V. Kanagaraj, J.
1. The above appeal suits are directed against the judgment and decree dated 25.4.1984 respectively made in O.S.Nos. 7929 of 1981, 8350 of 1981 and 8351 of 1981 by the Court of IV Additional Judge, City Civil Court, Madras, thereby decreeing all the three suits, as prayed for.
2. In fact, all the above three suits have been filed against one and the same defendant, praying thereby to direct the defendant to pay the plaintiff in O.S.No. 7929 of 1981 (connected with A.S.No. 376 of 1985) a sum of Rs. 91,476.76; to pay the plaintiff in O.S.No. 8350 of 1981 (connected with A.S.No. 378 of 1985) a sum of Rs. 41,866 and to pay the plaintiff in O.S.No. 8351 of 1981 (connected with A.S.No. 379 of 1985) a sum of Rs. 55,368, with interest at 18% p.a. on the principal sums and with costs, which amounts, the plaintiffs are said to have paid in excess to the defendant, than what the plaintiffs should have paid, as per the accounts.
3. So far as the suit in O.S.No. 7929 of 1981, which is concerned with A.S.No. 376 of 1985, is concerned, the averments of the plaint are that the plaintiff is a limited company; that the plaintiffs company is carrying on business, as dealers, in aluminium and steel reinforce conductors; that the defendants a public sector and a Government of India undertaking used to supply the raw materials to enable the plaintiffs to manufacture the aluminum and steel reinforce conductors; that the plaintiffs were allotted 40 M.T. of aluminium E.C. Grade Ingots, as per the sale note, dated 26.5.1980 fixing the price at Rs. 14,089 per M.T. exgodown, other charges being extra amounts payable and the said sale note was valid upto 24.6.1980, by which time, the plaintiffs had to arrange for remittance and deposit of sale value; that in accordance with the terms and conditions of the sale note, the plaintiffs opened a letter of credit in confirmation with the arrangement and the amount was reserved with the bankers; that the defendants accordingly received the amount payable in respect of the goods earmarked for delivery to the plaintiffs and issued a delivery order No. 1568, dated 10.7.1980 against the above sale note and as per the value of the invoice issued by the defendants; that all the ingredients of sale were completed with the payment by the plaintiffs to the defendants; that by issuing the delivery order for delivery of the goods to the plaintiffs, the title in the goods passed to the plaintiffs effectively, in view of the fact that the goods were in 'deliverable state' in the godown of the defendants and only formal physical delivery had to be effected and that the transaction of sale became completed as between the parties, by payment and issue of delivery order.
4. The further case of the plaintiffs is that when the plaintiffs went to the godown and about to take physical delivery of the goods, they received a telegram dated 19.7.1980, sent by the defendants, directing the plaintiffs to make a further payment of Rs. 75,600.56 on ground that the amount payable by the plaintiffs has increased, due to increase in price of aluminium EC Grade Ingots; that the plaintiffs are not liable to pay the said excess demand, but since the defendants refused to effect physical delivery of the goods, without such payment, the plaintiffs paid the said amount under coercion, by pay order dated 29.7.1980 for the said sum of Rs. 75,600.56 issued by the Indian Overseas Bank, Kodambakkam Branch, Madras-26. The further case of the plaintiffs is that the price of the goods having been fixed and the plaintiffs having paid the amounts, the title of the goods was passed to the plaintiffs with the payment and issue of delivery order and the defendants cannot demand any excess payment on account of any increase in the price of the material between the date of delivery order handed over to the plaintiffs and the date when actual physical delivery took place. The plaintiffs would further submit that inasmuch as the goods were available in the godown and having ascertained the goods, as shown in the invoice and the sale price having been fixed, the demand for excess payment on account of the alleged increase in price, after the date of issue of delivery order to the plaintiffs is illegal and not valid and opposed to Law and equity; that the plaintiffs were made to pay the amount under coercion and the amount so collected by the defendants from the plaintiffs on account to the alleged increase in price, after issue of the delivery order, being illegal, the plaintiffs are entitled to the refund of the said amount from the defendants; that therefore, the plaintiffs issued a notice dated 3.5.1981 to the defendants calling upon them to pay the amounts, for which the defendants sent a reply dated 26.5.1981 with frivolous allegations that they are entitled to claim excess amount towards increase in price, as per sale note; that the said plea of the defendants is not valid and hence the plaintiffs would file the above suit for recovery of a sum of Rs. 75,600.56 being the excess amount collected by the defendants, with interest at 18% p.a.
5. So far as the suit in O.S.No. 8350 of 1981, which is concerned with A.S.No. 378 of 1985, the averments of the plaint are that the plaintiffs were allotted 40 M.T. of aluminium E.C. Grade rods, as per the sale note dated 24.5.1980 and the price was fixed at Rs. 3,13,000 as per invoice. No.AL/ECR, dated 5.7.1980 and in the same manner as in the earlier case, the defendants demanded the plaintiffs to pay an excess amount of Rs. 34,600, through their telegram dated 17.7.1980 and the plaintiffs paid the said amount under protest, as per pay order No. 2787, dated 25.7.1980 and took physical delivery of the consignments and since the said amount of Rs. 34,600 was collected by the defendants from the plaintiffs under coercion and threat, without allowing the plaintiffs to take physical delivery of the goods, even though the defendants cannot demand any excess payment on account of any increase in the price of the materials between the date of delivery order handed over to the plaintiffs and the date, when actual physical delivery took place, the plaintiffs would file the above suit for recovery of the said sum of Rs. 34,600, being the principal amount and Rs. 7,266 being the interest at 18% p.a., totalling to Rs. 41,866.
6. So far as the third suit in O.S.No. 8351 of 1981, which is concerned with A.S.No. 379 of 1985, is concerned, the averments of the plaint are that the plaintiffs are the dealers in aluminium and Steel reinforced conductors; that the defendants used to supply the raw materials to enable the plaintiffs to manufacture conductors in Aluminium and Steel; that the plaintiffs were allotted 40 M.T. of Aluminium E.C. Grade aluminium rods as per sale note dated 22.5.1980, fixing the price at Rs. 6,23,725.88 ps. as per invoice No.AL/ECR dated 5.7.1980; that in accordance with the terms and conditions of the sale note, the plaintiff's opened a letter of credit in confirmation with the arrangement and the defendants received the amount and issued a delivery order No. 3645, dated 3.7.1980 against the sale note and as per the value of the invoice issued by the defendants; that prior to taking physical delivery of the goods, the defendants, as per the telegram dated 17.7.1980, directed the plaintiffs to make further payment of Rs. 43,800 on the ground that the amount payable by the plaintiffs has increased due to increase in price of E.C. Aluminium rods; that the plaintiffs, even though not liable to pay the said excess amount, under coercion and threat and to take physical delivery of the goods, paid the said amount, by pay order No. 2788, dated 25.7.1980 and took physical delivery of the consignment and that the defendants collected the excess amount under coercion and being illegal, the plaintiffs filed the above suit for recovery of the said sum of Rs. 45,800, being the principal amount and Rs. 9,568 being the interest at 18% p.a., totalling to Rs. 55,368.
7. In the written statements filed in all the three suits in a similar manner, the defendant would allege that the defendants are a Corporation owned by the Central Government and carry out the direction as and when issued by the Central Government, with regard to the release of imported stocks of aluminium; that the defendants issued sale notes to the plaintiffs on certain conditions mentioned therein and the price is subject to revision vide Note (i) thereof, which says that the seller reserves the right to revise the price mentioned in Clause (4) of the material with consequential revision in quantity etc.; that it is also provided therein that in the event of price being revised by the Government, the ruling (price) on the date of delivery/despatch shall be charged; that the collection of additional sums are unassailable and valid in Law; that it is open to the defendants to demand difference in price in view of the increase in the price, after 15.7.1980, though the delivery order was dated 10.7.1980 in the case of O.S.No. 7929 of 1981 and dated 3.7.1980 in the case of O.S.Nos. 8350 of 1981 and 8351 of 1981; that the plaintiffs are not entitled to claim the refund, since the defendant collected the said amounts lawfully and since the plaintiffs are questioning the price as fixed by the Aluminium Controller, the plaintiffs ought to have made the Aluminium Controller as party to the suit and thus the suits are bad for non-joinder of necessary party and would ultimately pray for dismissing all the suits with costs.
8. Based on the above pleadings of parties, the court below would frame certain issues and would hold common trial in all the three suits, by recording the evidence in O.S.No. 7921 of 1981 (connected with A.S.No. 376 of 1985), in which, on the part of the plaintiffs, two witnesses would be examined as P.Ws.1 and 2 and they would mark six documents as Exs.A-1 to A-6. On the part of the defendants two witnesses would be examined as D.Ws.1 and 2 and they would also mark 13 documents as Exs.B-1 to B-13.
9. In consideration of the above evidence brought on record by parties and in the context of the pleadings and the position of Law and appreciating the same in its own way, the lower court would ultimately arrive at the conclusion to decree all the suits, as prayed for, challenging which, the defendant in all the above three suits (as detailed above) has come forward to prefer the above three appeal suits, on certain grounds, as offered in the memorandum of grounds of appeal.
10. During arguments, the learned Counsel for the appellant/defendant would contend that the defendants are the public sector undertakings and are canalising agents and used to supply aluminium rods to actual users on the price quoted by the Aluminium Controller; that aluminium being a controlled commodity, if any party wants to import it to a foreign country, he has to apply and get allotment from the aluminium controller; that in all these matters, in accordance with the terms and conditions of the sale note issued by the defendant, the plaintiffs opened a letter of credit and the amount was reserved with the bankers and the plaintiffs after obtaining the delivery order, have to produce the same to the godown manager to take delivery of the goods.
11. The learned Counsel appearing for the appellants would further argue that the plaintiffs after receipt of the delivery order, delayed in taking delivery of the goods from the defendants godown and in the mean while, the price of the was increased by the Aluminium Controller and the defendants have to pay the difference in price and they paid the difference in price and had taken delivery of the goods and hence the defendant/appellant is not liable to refund the difference amount, paid by the plaintiffs/respondents. He would further contend that the defendant issued sale notes to the plaintiffs and as per Note (i) of the sale notes, the defendant can revise the price and in the event of price being revised by the Government, the price on the date of delivery/despatch shall be charged; that the price of the commodity is fixed by the Aluminium Controller and the defendants have no control over the price of the commodity; that the title to the goods will be passed on only by physical delivery of the goods and not by mere issuance of delivery order and that the goods are unascertained because they have to be separated from the bulk, weighed and delivered.
12. The learned Counsel for the appellant would further continue to argue that in para No. 11 of its judgment, the lower court, by relying upon Section 2(4) of the Sale of Goods Act, 1930, would observe that by issue of delivery order, the title of the goods had been passed on to the plaintiffs; that but under Section 18 of the Sale of Goods Act, unless the goods are ascertained, the title to the goods will not pass on to the buyer and would rely on Sections 22 and 23 of the Sale of Goods Act and would cite a judgment in Jute and Gunny Brokers Ltd., and Anr. v. The Union of India and Ors. : [1961]3SCR820 , wherein it has been observed that,
The contention on behalf of the Union of India is that property in the goods cannot pass in law to the holders of the pucca delivery orders till the goods are actually appropriated to the particular order; therefore, as in this case it is not in dispute that no goods were actually appropriated towards the pucca delivery orders concerned, the property in the goods did not pass to the holders thereof but was still in the mills. Reliance in this connection is placed on Section 18 of the Indian Sale of Goods Act, No.III of 1930. That section lays down that 'where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained'. In the present case, as we have already said it is not in dispute that the goods covered by the pucca delivery orders are not ascertained at the time such orders are issued and ascertainment takes place in the shape of appropriation when the goods are actually delivered in compliance therewith. Therefore, till appropriation takes place and goods are actually delivered, they are not ascertained. The contract therefore represented by the pucca delivery orders is a contract for the sale of unascertained goods and no property in the goods is transferred to the buyer in view of Section 18 of the Indian Sale of Goods Act till the goods are ascertained by appropriation, which in this case takes place at the time only of actual delivery. The appeal court in our opinion was therefore right in holding that the property in the goods included in the pucca delivery orders did not pass to the holders thereof in view of Section 18 of the Sale of Goods Act in spite of the decision in the case of the Anglo India Jute Mills Co. I.L.R. (1910) Cal. 127. What that case decided was that in a suit between a holder of a pucca delivery order be he the first holder or a subsequent holder who has purchased the pucca delivery order in the market and the mills, there will be an estoppel and the mill will be estopped from denying that cash had been paid for the goods to which the delivery order related and that they held the goods for the holder of the pucca delivery order. That case therefore merely lays down the rule of estoppel as between the mill and the holder of the pucca delivery order and in a suit between them, the mill will be estopped from denying the title of the holder of pucca delivery orders; but that does not mean that in law, the title passed to the holder of the pucca delivery order as soon as it was issued even though it is not disputed that there was no ascertainment of goods at that time and that the ascertainment only takes place when the goods are appropriated to the pucca delivery orders at the time of actual delivery. The appeal court was in our opinion right in holding that the effect of the decision in the case of Anglo-India Jute Mills Co. I.L.R. (1910) Cal. 127 was not that the property in the goods passed by estoppel and that case only decided that as between the seller and the holder of the pucca delivery order, the seller will not be heard to say that there was no title in the holder of the delivery order. That case was not dealing with the question of title at all as was made clear by Jenkins, C.J. but was merely concerned with estoppel. In the present case the question whether the Government of India will be estopped is a matter which we shall consider later; but so far as the question of title is concerned there can be no doubt in view of Section 18 of the Sale of Goods Act that title in these cases had not passed to the holders of the pucca delivery orders on September 30,1946, for the goods were not ascertained till then, whatever may be the position of the holders of the pucca delivery orders in a suit between them and the mills to enforce them.
13. The next judgment cited by the learned Counsel for the appellant is Juggilal Kamalapat v. Pratapmal Rameshwar : [1978]2SCR219 , wherein it has been held that,
There is yet another reason why the pucca delivery orders cannot be taken as documents of title. These delivery orders did not relate to any specific lot of goods. It is well established that title cannot pass until the goods are ascertained in view of Section 18 of the Sale of Goods Act, 1930. (See: Jute and Gunny Brokers Ltd. v. Union of India : [1961]3SCR820 . It was argued that requisite quantities of goods were lying in the mills' godown when the pucca delivery orders were issued which was sufficient ascertainment within the meaning of Section 18. It appears from the judgment of the learned single Judge as also of the Division Bench of the High Court that no responsible officer of the mills came forward to prove this. But even assuming that the mills' godowns had sufficient quantities of B twill and hessian when the pucca delivery orders were issued, the requirement is not satisfied. Here the contracts were for the sale of unascertained goods by description. Section 23 of the Sale of Goods Act provides that in such cases, if goods of that description and in a deliverable state are unconditionally appropriated to the contract by the seller with the express or implied assent of the buyer, the property in the goods passes to the buyer. The assent may be given either before or after the appropriation is made. But here the plaintiff, who was the seller, did not have the necessary control over the goods to be able to appropriate them to the contracts even with the consent of the buyer.
14. The learned Counsel for the appellant would then draw the attention of the court towards the middle part of part No. 11 of the judgment of the lower court and would cite yet another judgment in M/s. Kamala Sugar Mills Ltd., Delhi v. Ganga Bishen Bhajan Singh 1990 L. W. 42, wherein it has been held that,
Section 23 of the Contract Act which provides the basis for Courts to find whether a contract is opposed to public policy says that a contract with consideration or object which is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies injury to the person or property of another is a contract which is opposed to public policy. The foundation on which the principles of public policy is based is that no court will lend its aid to a man who founds his cause of action upon an immoral or illegal act, if the cause of action springs from ex turpi cause, then the courts are prevented from assisting a litigant who bases his cause of action on such immoral and illegal causes. But it is always necessary that the court's conscience should be satisfied that the illegality, immorality or irrationality complied of in a contract goes to the very root of the matter and shakes its foundation. If such is the situation, then the courts will not assist the litigant who seeks it assistance under such circumstances.
It is further held that,
The courts, therefore, ought not to be astute to defeat the efficacy of such document or destroy such bargains. While interpreting a commercial contract, a broader outlook has to be adopted and care should be taken to avoid an artificial and unrealistic approach in the matter of the understanding the meaning and purpose of such documents. In such cases, the courts should occupy the chair of the contracting parties and reasonably understand their minds and intents. If, after such an approach the instrument still presents, circumstances which the conscience of a reasonable and prudent person cannot accept and if ex facie the terms are so unconscionable, illegal and designed to avoid or evade law, then only the doctrine of public policy will intervene, and will not implement Such bargains.
In the instant case, we are satisfied that Clauses 3 and 9 have the tenor of Exs.A-1 to A-5 do not pose any irrational principle in commercial practice; nor could it be said to be so unconscionable so as to be ignored by courts as being opposed to public policy.
15. The learned Counsel for the appellant would cite yet another judgment reported in P.S.N.S. Ambalavana Chettiar and Co. Ltd. and Anr. v. Express Newspapers Ltd., Bombay (1968) 2 S.C.R. 239, wherein it has been observed that,
Section 18 of the Sale of Goods Act provides that where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained. It is a condition precedent to the passing of property under a contract of sale that the goods are ascertained. The condition is not fulfilled where there is a contract for sale of a portion of a specified larger stock. Till the portion is identified and appropriated to the contract, no property passes to the buyer. In Gillett v. Hill (1834) 2 C. & M. 535 : 149 E.R. 871, Bayley, B. said:Where there is a bargain for a certain quantity, and there is a power of selection in the vendor to deliver which he thinks fit, then the right to them does not pass to the vendee until the vendor has made his selection, and trover is not maintainable before that is done. If I agree to deliver a certain quantity of oil as ten out of eighteen tons, no one can say which part of the whole quantity I have agreed to deliver until a selection is made. There is no individuality until it has been divided.
16. The learned Counsel for the appellant would end up his argument saying that since there was a delay on the part of the plaintiffs in taking delivery of the consignments and since in the meantime the prices of the commodities have gone up, the plaintiffs are bound to pay the enhanced rates and would pray to set aside the judgment and decree of the lower court.
17. In reply, the learned Counsel appearing for the respondents/plaintiffs would contend that the point that is to be decided in these matters is whether the plaintiffs were entitled to delivery or not; that the plaintiffs paid the excess amount under protest and therefore they are entitled to get back the same; that it is not a case where the goods were sent after importing; on the date, when the plaintiffs paid the excess amount and would cite Ex.B-7, dated 15.7.1980, which is the notification issued by the Joint Secretary to the Government of India, Ministry of Steel and Mines, which runs as follows: 'In pursuance of Sub-clause (2) of Clause 4 of the Aluminium (Control) Order, 1970, and in supersession of the notification of the Government of India in the late Ministry of Steel, Mines & Coal (Department of Mines) No.S.O. 567 (E) dated 4th October, 1979, the Central Government hereby fixes the sale price of imported aluminium as specified in the schedule appended to this notification
THE SCHEDULE
ISI specification Price in Rupees
per tonne
(1) (2)
1. Ingots conforming to
specification: IS: 4026-1969: 15,867
2. Ingots conforming to
specification: IS: 2590-1964: 15,723
3. Wire rods conforming to
specification: IS: 5484-1969: 16,349
Citing the above, the learned Counsel for the respondents/plaintiffs would argue that according to particular specification, unless the other side is able to connect the specification and in the absence of anything to show that the standard of the specification is the same as mentioned in Ex.B-7, the defendants cannot claim the excess amount and increase the price. The learned Counsel for the respondents/plaintiffs would further argue that the notification under Ex.B-7, dated 15.7.1980 is after the issue of the delivery order and therefore the same cannot be relied upon; that when once the delivery order is issued, the plaintiffs are entitled to take delivery of the goods; that the question of ascertainment of goods does not arise because the goods are available for delivery and in that context, the learned Counsel for the respondents/plaintiffs would rely upon the evidence of D.W.1, who deposed that he was one who specify and delivery the goods; that the allotment of the aluminium has to be done by the Aluminium Controller and the consignment will be allotted either in the godown or in the transit in the ship and they are only concerned with the sale; that the amount has to be paid within a specified time, after opening the sale note; that in all these cases, the plaintiffs deposited the amount in time and only after ascertaining the payment of the amount, they issued the delivery orders. The learned Counsel for the respondents/plaintiffs would then rely upon the evidence pf D. W.2, who is the Assistant Divisional Manager in the defendant-Corporation and who deposed in his cross examination that immediately after the issue of delivery order to the plaintiffs, they would get carbon copy of the same and that after the issue of the delivery order, they have no right to detain the consignment and that the purchaser can take delivery of the goods at any time.
18. The learned Counsel for the respondents/plaintiffs would further contend that there is an admission on the part of D.W.2 that they received the copy of the delivery order prior to the date of Ex.B-7 and therefore when once the delivery order copy is received by the godown authorities, where does the question of withholding the delivery arise?; that since the, defendants did not effect the delivery of the goods, the plaintiffs paid the excess amount under protest and took delivery of the goods and therefore the plaintiffs are claiming only the amounts, which they have paid in excess to the defendants and stating what a seller or buyer should do, he would rely on Section 2(4) of the Sale of Goods Act and would state that the goods are in a 'deliverable state'. He would further rely on Section 22 of the Sale of Goods Act, which deals with 'specific goods in a deliverable state, when the seller has to do anything thereto in order to ascertain price.' and would state that since the price had already been paid, the question of ascertaining the goods does not arise; that there is nothing to connect increase in price with Ex.B-7 and in the absence of any connecting link, it is not open to the defendants to say that the plaintiffs must pay the increased price and except Ex.B-7, there is no other impediment on the plaintiffs to receive the goods.
19. The learned Counsel for the respondents would further argue that even assuming that there was a delay on the part of the plaintiffs/respondents in taking delivery of the goods, it would only attract the godown rent and interest; that the plaintiffs have not applied for delivery and it has not affected the defendants in any manner; that so long as the separation is not done with regard to the quantity to be supplied to the plaintiffs, it would not be ascertained goods; that when once the delivery order goes to the godown, it is the duty of the seller i.e., the defendants herein to inform about the quantity to be delivered, which he can keep separately, so that the plaintiffs can take delivery of the goods at any time; that D.W.2 admitted that the goods must be delivered after receipt of the delivery order and therefore having issued the delivery order, the defendants cannot plead that the plaintiffs are not entitled to take delivery of the goods.
20. The learned Counsel for the respondents/plaintiffs would further argue that payments have been made in time, as admitted; that so far as A.S.No. 378 of 1985 and 379 of 1985 are concerned, the payments are made on 15.6.1980 and the payment in A.S.No. 376 of 1985 was received by the defendant on 16.6.1980; that this realisation would not in any manner affect the right of the purchaser; and after complying with all the formalities only, delivery orders were issued on 10.7.1980; that the plaintiffs paid the excess amount under protest; that the defendants demanded the excess amount under Ex.A-6 telegram, dated 19.7.1980 and the plaintiffs sent the reply under Ex.A-2 on 29.7.1980, thereby stating that the delivery Order No. 1568 dated 10.7.1980 for 40 M.Ts. of EC Grade aluminium Ingots has already been issued in favour of the plaintiffs against the sale note ultimately saying that they are paying the amount 'under protest' and would request to deliver the material; that if the court is pleased to hold that on issue of the delivery order, the plaintiffs are entitled to delivery of the goods, the excess amount must be ordered to be refunded to the plaintiffs; that the defendants claim is based only on Ex.B-7 and excepting that document, there is no other defence at all and there is absolutely no other go for the defendants except to refund the excess amount and since the excess amount paid by the plaintiffs was retained by the defendants illegally, the plaintiffs are entitled to the interest at 18% p.a and would end up his argument saying that the trial Judge has rightly dealt with all these aspects and would pray to dismiss the appeals filed by the appellants/defendants.
21. The learned Counsel appearing for the appellants/defendants, in his attempt to clarify certain anomalies in the argument of the learned Counsel for the respondents/plaintiffs would show as to how the question of payment would not arise in the case connected to the appeals and would read out passages from Exs.B-1, B-2, B-4, B-5, B-7, B-12 and B-13 and also from the evidence of P.W.1. Regarding the interest claimed by the plaintiffs at 18% p.a., the learned Counsel for the appellants/defendants would cite Clause 6 (v) of Exs.B-1 and B-2, which reads as follows:
In case of delay to effect delivery of the material for whatsoever reasons, the sale value and other charges deposited with the seller will not carry any interest. In case delivery becomes impossible due to Government Order or any other reason, the deposited money will be refunded to the buyer without any liability to interest.
At this juncture, the learned Counsel for the appellants/defendants would cite a judgment of this Court in Messrs. General Papers Limited v. Messrs. A.P.A. Pakkir Mohideen and Brothers : (1958)1MLJ294 , wherein it has been observed that:
The next was that as the goods covered by the contracts, Exs.B-1 and B-2, were in a deliverable state, and as the plaintiff's agent Annamalai had inspected and approved of them, they must be deemed to have been unconditionally appropriated to the plaintiff and to have become their property the moment the contracts were entered into at Madras, or at least when they were separated from the general stock and put in the cart to be taken to the Beach Station at Madras for consignment, and so the plaintiffs ought to have been directed by the lower Court to bear the loss by the fire later on. Mr. Gopalaswami Iyengar relied on the ruling in Langton v. Higgins 4 H & N. 391 : 118 RR 519 and on the ruling in Aldridge v. Johnson 110 Revised Reports 875, referred to therein, in support of the above contention. We agree with Mr. Bashyam that those rulings will have no application to the facts of this case. In Aldridge v. Johnson, it was held that the property passed to the buyer when the barley was put into the sacks supplied by the buyer, In Langton v. Higgins, the property was held to have passed to the buyer by the sellers putting the peppermint oil into the bottles supplied by the buyer. With great respect, we agree that in those cases the property passed to the buyer by such act. But the sellers in this case did not take out the bales contracted for from the general stock with them, and put them into any cart or box sent by the buyers, when alone the appropriation with the implied assent of the buyer would be made out and property pass. Indeed even in Firm P.M.R.S. v. B.C.J & Sons , a ruling of the East Punjab High Court relied on by Mr. Gopalaswami Iyengar, it was remarked that where there is a contract for sale of unascertained goods, it is necessary that they should be identified and ascertained before the contract can be performed, and that if the parties agree that the contract good shall be taken from some specified larger stock, then there is no identification of the goods as contract goods till they are ascertained on severance, and that in this connection a mere notional severance is not sufficient, and that it is well settled that before property in the goods passes to the buyer, the individuality and identity of the goods to be delivered under the contract should be established. So the mere fact that Annamalai had inspected the general stock and approved of the quality of the paper, and that the price was fixed ex-godown at Madras, and the buyer had to pay the freight, sales tax, packing charges etc. will not do to pass the property to the buyers, as the contracted bales were not separated from the general stock and given to Annamalai, and therefore the property in the suit bales had not passed at Madras itself to the plaintiffs, the buyers here.
At this juncture, the learned Counsel for the respondents/plaintiffs would comment that the question of ascertainment as well as the above judgment are only with regard to the ascertainment but not regarding cutting of the goods and hence they are not applicable to this case.
22. With the above arguments of the learned Counsel for the both and in consideration of the evidence and the facts and circumstances of the case, for determining the above appeals, the following points are framed:
1. Whether the transaction of sale was complete on the issue of the delivery orders and whether the title to the goods had been passed on to the plaintiffs with the issue of the delivery orders even in the event of certain conditions as found in Ex.B-1 agreement.
2. Whether the lower court is right in deciding to decree the suit as prayed for, for refunding the difference of amount with interest at 18% p.a.?
[After discussing the evidence His Lordship proceeded as follows: Ed.]
27. Point No. 1: In support of their contentions, the plaintiffs would mark six documents as Exs.A-1 to A-6. Ex.A-1 is the delivery order given to the plaintiffs in O.S.No. 8350 of 1981 and 8351 of 1981 (connected with A.S.Nos. 378 of 1985 and 379 of 1985) by the defendants; Ex.A-2 is the office copy of the letter dated 29.7.1980 addressed by the plaintiff in O.S.No. 7929 of 1981 (connected with A.S.No. 376 of 1985) to the defendants; Exs.A-3 to A-5 are the legal notices issued by the plaintiffs in all the above suits respectively to the defendants and Ex.A-6 is the telegram dated 19.7.1980 issued by the defendants to the plaintiffs in O.S.Nos. 8350 of 1981 and 8351 of 1981 (connected with A.S.Nos. 378 of 1985 and 379 of 1985). From along all these documents, marked on behalf of the plaintiffs, the respondents/plaintiffs would claim to have become the owner of the goods under Ex.A-1 delivery order, dated 3.7.1980, since according to them, the moment the delivery order was issued in their favour by the defendants, the title of the goods had been passed on to them and it is only the formality that is to be observed for taking physical delivery of possession of the property and further since Ex.A-1 delivery order had been issued on payment of the amount quoted by the defendants, there cannot be a revised sale price for the same consignment, which had been sold in their favour. The other two vital documents are Exs.A-2 and A-6. Among these two documents, Ex.A-6 telegram is the earlier one, dated 19.7.1980, wherein the respondents plaintiffs were requested by the appellants/defendants to make good the difference of amount, since the price of the aluminium ingots had increased. This is the telegram that has been given at the earliest possible opportunity, after the notification under Ex.B-7 had been received by the appellants/defendants. Ex.A-2 is the reply given by the respondents/plaintiffs to the appellants/defendants on 29.7.1980, i.e., ten days after the telegram and while enclosing therewith the Pay Order for the difference of amount, in the last paragraph of Ex.A-6, the plaintiffs would write that they are paying the amount 'under protest'. This would mean that immediately after coming to know of the increase of the price, the plaintiffs as per the usual conditions and formalities and practice, accepted the proposal of the defendants regarding payment of difference of amount and while enclosing the pay order for the difference of amount and intimating their intention to take delivery of the goods on payment of the revised amount they would state that they were making the payment 'under protest', which is nothing short of an element of afterthought.
28. On the contrary, among the defence documents, marked as Exs.B-1 to B-13, Exs.B-1 and B.2 are the agreements entered into respectively by the respondents/plaintiffs with the appellants/defendants, wherein not only the particulars such as description of the metals, weighment, quantity, mode of delivery, price, handling charges, taxes applicable were mentioned, but also under Heading 'NOTE (i)' it has been clearly mentioned that:
The seller reserves the right to revise the price mentioned in Clause (4) of the material with consequential revision in quantity etc.
Under heading 'Note (ii)', the right of revision of taxes is also discussed. Again under Clause 6(b) it has been mentioned that
** In the event of the price being revised by the Government, the ruling on the date of delivery despatch shall be charged.
This has been tellingly and mandatorily revealed as one of the conditions of the agreement entered into in between the parties. Further, it should be noted that under Clause 6(v) of Exs.B-1 and B-2 it has been clearly mentioned that,
In case of delay to effect delivery of the material for whatsoever reasons, the sale value and other charges deposited with the seller will not carry any interest. In case delivery becomes impossible due to Government order or any other reason the deposited money will be refunded to the buyer without any liability to interest.
Further, under Clause 6(vi) it has been mentioned that
In default of payment/additional payment and/or non-compliance of any of the formalities within the time allowed, the salenote will automatically stand cancelled.
Clause 6(vii) reads that,
The seller shall have the right to amend or revise or modify the terms and conditions of sale note at their sole discretion.
Likewise, under Clause 6(viii), a deeming provision has been introduced regarding the acceptance of the sale note and regarding the cancellation or modification of the sale before delivery of the goods.
The next important documents, marked on behalf of the appellants/defendants are Exs.B-10 and B-11 delivery orders in favour of the respective plaintiffs, wherein it has been clearly mentioned under hearing 'Note 4' that
Material should be lifted within 15 days from the date of this D.O., failing which godown rent and interest are recoverable.
Ex.B-7 is the notification issued by the Government of India, Ministry of Steel and Mines, dated 15.7.1980 and it is the case of the appellants/defendants that the moment the Government alters or modifies or revises the price of the goods, the defendant-Corporation being a Government of India undertaking, the Aluminium Controller will announce the revised rates and from the time that it has been given effect to, the buyers have to pay the revised rates and take delivery of the consignments irrespective of the fact that the sale note, delivery order etc., had already been issued.
29. Only agreeing to the above conditions, the plaintiffs placed the orders with the defendants for the purchase of the commodities and not otherwise, so as to ignore the conditions in Exs.B-1 and B-2 and claim the refund of the difference of price that they have paid after enhancement. Hence, it is clear, from the terms of the agreement that it is not sale note or delivery order that would pass on the title, but it is within the meaning of the relevant conditions imposed in the contract itself. Hence, it is evident that the price noted in Clause 4 of the contract under Exs.B-1 and B-2 should be read along with subclauses and it cannot independently be looked into, so as to come forward to say that once the price under Clause 4 is fixed and the delivery order is issued, there is no question of revising the price of the consignment since the moment, the delivery order is passed the title is passed on to the plaintiffs. In these cases, in view of the conditions of contract, as aforementioned, the title of the goods cannot pass on to the plaintiffs, based on the issuance of the delivery order. Hence, it has to be answered to the point No. 1 as framed above that the transaction was not complete on the issue of the delivery order and that the title had not passed on to the plaintiffs. However, the delivery order issued by the defendants was only subject to the other conditions imposed, as per the terms of contract and in such event, it has to be decided that the delivery order is not a document of title.
30 Point No. 2: Coining to the second point, it could be seen that there is no pleading at all to the effect that the goods are in a 'delivery state' nor any oral evidence has been adduced to the said effect. It may further be noted that the laches committed on the part of the plaintiffs in taking delivery of the consignments have given way for all the problems and it is the case of the plaintiffs that the delay had been caused by the defendants. On the contrary, it would be stoutly defended by the defendants that there was absolutely no delay caused on their part and the moment either the buyer or his power of attorney produces the delivery order, the physical delivery of the consignments would have been effected.
31. From the evidence of defence witnesses it comes to be known that on three installments the plaintiffs had taken delivery of 40 M.T. of Aluminium through their Transport contractors, and on the first day, when a part of the consignment had been taken delivery of by the plaintiffs, there had been a stock of 500 M.Ts, out of which, by all the parties, including the plaintiffs, only 52 M.Ts. of Aluminium had been received and therefore it cannot under any circumstances be held that either for lack of stock or for any of the reasons, the godown authorities could be held responsible for the delay, which is only either on the part of the plaintiffs in being lethargic or could be attributed for the delay committed by the transport contractors of the plaintiffs.
32. Moreover, so far as the delay is concerned, in para No. 5 of the plaint in O.S.Nos. 8350 of 1981 and 8351 of 1981 (connected with A.S.Nos. 378 of 1985 and 379 of 1985), the plaintiffs state that 'When the plaintiffs went to the godown for taking delivery, there has been some delay'. But, at the same time, there is no pleading to the effect that as to who caused the delay, either by the plaintiffs themselves or by the defendants and in what matter etc. Therefore, the court below should not have allowed evidence to be let in on this point without proper pleading. It could be further seen from the evidence of D.W.1 that there are three modes of payment, out of which, if immediate delivery was the motive of the plaintiffs, nothing prevented them from paying the amount by Demand Draft and take immediate delivery of the consignments. The positive evidence adduced on the part of D.W.1 is that the price got increased only on 15.7.1980 by the notification in Ex.B-7. Thus, it is the fault committed on the part of the plaintiffs, to have not come forward to take delivery of the consignments from the godown till such time, even though the delivery order was issued long before. Hence, the delay caused in not taking delivery of the consignments before 15.7.1980, could only be attributed for the plaintiffs and not to the defendants in any manner. Moreover, this is a charge levelled against the defendants by the plaintiffs and therefore the burden lies on the plaintiffs to prove this fact, but the evidence (adduced on the part of the plaintiff) is abegging and explanation is lacking. Hence, it is to be decided that the plaintiffs are responsible for causing the delay in taking delivery of the consignments and for such delay committed on the part of the plaintiffs, the defendants, cannot, under any circumstance, be held responsible. The lower court in its judgment has not properly considered the condition Clauses in the contract covered under Exs.B-1 and B-2, agreeing which only the plaintiffs came forward to purchase the commodity from the defendants. In spite of rise in price, in the middle, the plaintiffs willingly came forward to purchase the goods, even paying the difference of amount. But, ten days later, changing their minds, the plaintiffs wrote a letter to the defendants under Ex.A-6 stating thereby that they are paying the difference of amount 'under protest' moreover, it comes to be known that this form of agreement, as seen in Exs.B-1 and B-2, being the printed forms, the same were followed for earlier transactions and comes to be followed for the current and future transactions also, since it is the evidence available from the plaintiffs side that even after the purchases, which are the subject matters of the above three matters, the plaintiffs have been in the habit of effecting the purchase of the aluminium ingots and rods from the defendants and no evidence comes forth to the effect of any alteration in the usual conditions, imposed in the agreement forms, covered under Exs.B-1 and B-2. Hence, it has to be decided that the plaintiffs came forward to claim the difference of amount ignoring the conditions imposed in the contracts, which are glaring and as against their own willingness showed to abide by the conditions mentioned under Exs.B-1 and B-2. Under such circumstances, the lower court, without proper consideration of the facts and circumstances and without proper appreciation of the terms and conditions of the contract and the evidence let in by the parties, has arrived at a wrong conclusion to decree the suits as prayed for by the plaintiffs and the same being against the spirit of law, agreed conditions and the evidence available, the same is hereby declared wrong and set aside.
33. There are patent errors of law and perversity in approach, so far as the findings arrived at by the trial court are concerned, thus, warranting interference by this Court into such wrong findings, as arrived at by the trial court, as per its judgment and decree passed in all the above three suits. So far as the facts and circumstances and the question of law that are concerned with the above cases they are one and the same and no necessity arose to differentiate one case from the other.
34. In result, all the above three appeal suits are allowed. The common judgment and decree dated 25.4.1984 made in O.S.Nos. 7929 of 1981, 8350 of 1981 and 8351 of 1981 by the Court of IV Additional Judge, City Civil Court, Madras, are set aside and the said suits are dismissed.
35. However, in the circumstances of the case, the parties are to bear their own costs.