PETITIONER:
UNION OF INDIA
Vs.
RESPONDENT:
SITA RAM JAISWAL
DATE OF JUDGMENT28/10/1976
BENCH:
RAY, A.N. (CJ)
BEG, M. HAMEEDULLAH
SHINGAL, P.N.
CITATION:
1977 AIR 329 1977 SCR (1) 950
1976 SCC (4) 505
ACT
Pleadings under-section 70 of the Contract Act (Act 9)
1872,--Ingredients necessary to be pleaded.
Practice--Non-suiting for want of proper pleadings at
the appellate stage by the Supreme Court when parties went
to trial and issues were raised and the litigation went
through the course of trial and appeal is not desirable.
Civil Procedure Code (Act 5 of 1908) Order VI r/w Order
XIV, rule 1(5) --Courts should not allow parties to go to
trial in the absence of proper pleadings.
Words and phrases--"Restoration" in Section 70 of the
Contract Act, meaning of.
HEADNOTE
In a suit for the recovery of price of "Mac Intyre
Sleeves, "supplied to the appellant, but alleged to have
been wrongfully’ rejected after a considerable time, the
respondent/plaintiff sought to make the appellant/defendant
liable to compensate by reasons of provisions containing in
Section 70 of the Indian Con-tract Act. The trial Court
found that the goods were accepted and it dismissed the suit
on the reasoning that the appellant offered to restore the
goods. But .on appeal, the Division Bench decreed the suit,
not on the principles of Section 70 of the Contract Act, but
treating the case of the respondent to be a claim for dam-
ages for wrongful rejection and for non-acceptance of goods
on the footing of uninforceable contract for sale of
goods".
Dismissing the appeal by certificate the. Court,
HELD: (1) The three. ingredients to support the cause of
action undersection 70 of the Indian Contract Act are:
First, the goods are to be delivered lawfully or anything
has to be done for another person lawfully. Second, the
thing done. or the’ goods delivered is so, done or delivered
"not intending to do so gratuiously". Third, the person to
whom the goods are delivered "enjoys the benefit thereof".
It is only when the three ingredients are. pleaded in the
plaint that a cause of action is constituted under section
70 of the India Contract Act. If any plaintiff pleads three
ingredients and proves the three features the defendant is
then bound to make compensation in respect .of or to re-
store -the things so done or delivered. [980 G-H, 981 A]
(2) Courts should not allow the parties to go to trial
in the absence of proper pleadings. In the instant case,
the Court should not have allowed the respondent to go to
trial with a claim under-section 70 of the Indian Contract
Act. [981 B-C]
(3) When parties went to trial and issues were raised on
claims and the litigation also went through the. course
of trial and appeal, non-suiting for want of proper plead-
ings at the appellate stage, by the Supreme Court is not
desirable. [981 C]
(4) Restoration under-section 70 of the Indian Contract
Act does not mean restoration of "goods by actual delivery".
Intimation to take back the goods rejected evinces intention
of restoration. [982 B-C]
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1762 of 68.
(Appeal from the Judgment and Decree dated 18-5-1967 of
the Calcutta High Court in Appeal from Original Decree No.
183/56).
980
G.L. Sanghi and Girish Chandra, for the Appellant.
Purushottam Chatterjee and Sukumar Ghose, for the respond-
ent.
The Judgment of the Court was delivered by
RAY, C.J.--This appeal by certificate is from the judgment
dated April 11, 1968 of the High Court at Calcutta.
The respondent filed this suit against the appellant in
the High Court at Calcutta and claimed Rs. 76,691-2-0 with
interest or in the alternative Rs. 78,204-8-4. The respond-
ent’s case in short is that the respondent delivered to the
defendant appellant pursuant to several orders from time to
time goods described as Mac Intyre Sleeves and other goods.
The respondent alleged in the plaint that the appellant
"wrongfully purported to reject the Mac Intyre Sleeves"
supplied by the respondent. The respondent further alleged
that the rejection was unlawful inasmuch as the rejection
was after lapse of reasonable time. The respondent claimed
the sum mentioned in the plaint as reasonable price of the
goods. The alternative case of the respondent is that the
plaintiff respondent was entitled to the sum for supply of
Mac Intyre Sleeves because the same were not supplied gratu-
itously.
The appellant denied in the written statement that there
was any enforceable contract, and, therefore, the respondent
was not entitled to sue for price of the goods delivered.
The appellant took the plea bar of the suit that there
was no contract in compliance with section 175 of the Gov-
ernment of India Act, 1935. The appellant pleaded to. the
alternative case of the respondent by alleging that the
goods were lawfully rejected because the goods were found
not to be of the correct description and quality. The
appellant further denied that the rejected goods were re-
tained after lapse of reasonable time without intimating the
rejection.
At the trial the respondent found that the claim for the
sum of money as price of goods could not be sustained be-
cause of lack of enforceability of contract. The respondent
therefore sought to make the appellant liable to compensate
the respondent by reason of provisions contained in section
70 of the Indian Contract Act.
Counsel for the appellant raised the plea at the trial
that there. was’ no foundation in the plaint for any case
under section 70 of the Indian Contract Act.
The three ingredients to support the cause of action
under section 70 of the Indian Contract Act are these:
First, the goods are to be delivered lawfully or anything
has to be done for another person lawfully. Second, the
thing done or the goods delivered is so done or delivered
"not intending to do so gratuitously". Third, the person to
whom ’the goods are delivered "enjoys the benefit thereof".
It is only when the three ingredients are pleaded in the
plaint that a cause. of action is constituted under section
70 of the Indian Contract Act.
981
If any plaintiff pleads the three ingredients and proves the
three features the defendant is then bound to make compensa-
tion-in respect of or to restore the things so done or
delivered.
The allegation in the plaint in the present case was as
follows. "In any event the plaintiff is entitled to the said
sum of Rs. 26,248-7-0, and Rs. 50,442-11-0 with interest for
the said Mac Intyre Sleeves, Copper Strips and Stay Shackles
for the same were not supplied gratuitiously". The plaint
lacked the two other essential features to constitute a
cause of action under section 70 of the Indian Contract Act.
These were that the respondent delivered the goods lawfully
to the appellant and that the appellant enjoyed the benefits
thereof. The Court should not have allowed the respondent to
go to trial in the present case with a Claim under section
70 of the Indian Contract Act in the absence of proper
pleadings.
In view of the fact that parties went to trial and issues
were raised on claims under section 70 of the Indian Con-
tract Act and the litigation went through the course of
trial and appeal we do not desire to non-suit the respondent
at this stage.
The trial court held that the goods were not properly
rejected. But the trial court also held that the wordings of
the rejection memos negatived any case of enjoyment of
benefit. The trial court said that the documents show that
the goods were not utilised or used by the appellant and the
appellant disclaimed interest in the goods. The trial court
also found that the respondent accepted the goods. The
findings are inconsistent. The trial court held that the
appellant offered to restore the goods to the respondent but
the respondent refused to take them back. The trial court
dismissed the suit. When the trial court found that the
goods were accepted there could be no question of restora-
tion. The trial court should have decreed the suit.
The Division Bench on appeal held that the goods were
accepted by the appellant. The Division Bench held that
title to the goods passed and if title passed then the whole
context of section 70 of the Indian Contract Act would be
irrelevant. The judgment of the Division Bench is con-
fused. The Division Bench treated the case of the respond-
ent to be "a claim for damages for wrongful rejection".
Under the Sale of Goods Act when there is any enforceable
contract the seller may claim for price of goods sold or
damages for non acceptance. The present case could not be
supported on the footing of any enforceable contract giving
rise to damages for non-acceptance or wrongful rejection.
The reasoning of the Division ’Bench in allowing the claim
is erroneous.
The evidence in the present case as found by the trial
court is that the signatures of Rodericks and Francis on the
challans indicate acceptance of the goods, and, ,therefore,
the rejection is wrongful. The finding of the trial court
that there was acceptance of the goods obviously repels any
plea of rejection of the goods.
The error of the trial court was that it found the
goods were accepted and yet dismissed the suit on the rea-
soning that the appellant
982
offered to restore the goods. The error of the Division
Bench was in decreasing the suit not _on the principles of
section 70 of the Indian Contract Act but ’on damages for
non acceptance of goods on the footing of unenforceable
contract for sale of goods.
In view of the fact that there was acceptance of the
goods no question of restoration arises. Counsel for
respondent argued that restoration under section 70 of the
Indian Contract Act meant that the defendant would have to
restore the goods to the plaintiff by delivering the same to
the plaintiff. This contention of the plaintiff respondent
is utterly unsound. As long as there is intimation by the
defendant to the plaintiff that the plaintiff can take back
the goods the defendant evinces intention of restoration.
In the present case no question of restoration arises be-
cause of the acceptance of the goods.
The respondent in view of the trial court and the Divi-
sion Bench of the High Court allowing the respondent to go
on with the claim under section 70 of the Indian Contract
Act became entitled to compensation for the goods accepted.
The High Court found that the respondent had received a sum
of Rs. 7,602-0-0 out of the claim of the claim under sec-
tion 70 of the Indian contract Act and the respondent has
been given a decree for Rs. 69,069-1-0 we order that the
parties will pay and bear their own costs in this appeal.
We specify the period of two months for payment of the
aforesaid sums of money Rs. 76,671-1-0. The High Court
gave a decree for the sum of Rs. 69,069-1-0.
For the foregoing reasons there will be a decree
for Rs. 69.0169-1-0.
The High Court awarded half costs of the trial and full
costs of the appeal. We do not wish to disturb those two
orders for costs. In view of the fact that there was no
proper case pleaded to support
Appeal dismissed.
983