CHLNA COTTON EXPOHTERS versus BEHARILAL RAMCHARAX COTTON MILLS LTD

Citation: [1961] 3 S.C.R. 845 · Decided: 17-02-1961 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

Judgment (excerpt)

' 
3 S.C.l{. 
SUPREME COUltT nEPOR'l'S 
845 
on the managing agents of the mills was effective 
service on the mills as owners for the purpose of 
r. 75-A (2). 
In conseciuence r. 75.A (3) would apply 
and the property in the goods passed to the Govern-
ment of India on September 30, 1946. 
The appeal of 
the Union of India therefore is allowed and a declara-
tion is granted that the goods were vali<lly requisi-
tioned and acquired and that the orders of requisition 
and notices of acquisition were valid and binding ou 
the respective defendants, and the goods specified 
thernin vested in the Government of India on Se.ptem-
ber 30, 1946. 
As to costs, it appears that this litigation was due 
entirely to the defect in the form of address of the. 
requi~ltion orders and the notices of acquisition. In 
the circu:nstances we order parties to bear their own 
costs throughout. 
Civil Appeals Nos. 314 to 316 of 1967 dismissed. 
Civil Appeal No. 778 of 1957 allowed. 
CHll\'A COTTOK EX.POHTERS 
v. 
BEHARILAL RAMCHARAX COTTO:\ 
MILLS LTD. 
(P. B. GAJENDRAGADKAR and K. C. lJA8 UUP'J'A, JJ.) 
Breach of Contract-Contract for sale of goods-Supply s1<bject 
to import licence-Shipping dat.e guaranteed-Failure to suppty-
Inadequacy of seller's contract with overseas rnpptiers-Liability. 
The appellant had made a contract with its Italian suppliers 
for 200,000 lbs. of cotton fibre for August, 1950, shipment and 
another for 300,000 lbs. for NovermberiDece1nber, 1950, shipment. 
On July 2.2. 1950, tht: appellant entered into a contract with the 
respondent for the sale of 40,000 lbs. of fibre, August shipment. 
On August 9, 1950, it entered into another contract with the res-
pondent for sale of 50,000 lbs. of fibre, "October/November 1950 
shipment". ln the remarks column of the second contract it was 
mentioned: " This contract is subject to import licence and 
therefore the shipment date is not guaranteed ". 
In October, 
r950, 50,000 lbs. out of the first contract with the Italian 
suppliers arrived; out of this 40,000 was delivered to the respon-
dent against his first contract and Io,ooo against tl1e second, The 
balance of 40,000, lbs. against the second contract was not 
Jute ~-:- Guuny 
!Jrohrrs Ltd. 
v. 
L·11io11 vj India 
1Fanchoo /. 
F ebruayy 17. 
China Cotton 
Exporters 
846 
8tJPREME COtJH.1
1 REPORT8 
(1961) 
supplied. The respondent filed a suit for damages for breach of 
contract. The appellant contended that it was not liable as the 
date of shipment was not guaranteed and as it had adequate 
contracts with its suppliers to cover the contract with the respon-
11 hv . . 1 1 
dent but was unable to fulfil it as the supplier failed to make 
e at-i a 
h d 1. 
. 
Ra1nchar.1n Cotton t e e iver1es. 
Milts Ltd 
Held, that the appellant was liable for breach of contract as 
· 
the date of shipment was guaranteed and as the appellant had no 
adequate contracts with its suppliers to cover the contract with 
the respondent. In commercial contracts time is ordinarily of 
the essence of the contract. The words in the remarks column 
meant that the date of shipment was not guaranteed only to the 
extent that delay in obtaining the import licence stood in the 
way of keeping to the shipment date. 
As there was no delay in 
obtaining the licence the shipment date October/November, 1950, 
was guaranteed. The other terms of the contract also showed 
that the date of shipment was guaranteed. The appellant had 
to show that on the date of the breach i.e. on December 15, 1950, 
it had a contract under which it could, provided the contract 
was not broken, obtain the goods to honour its agreement to sell 
October/November shipment of goods. The first contract with 
the suppliers was cancelled at the end of September and the 
appellant was not entitled to receive any goods under it on the 
relevant date. Under the second contract it could not be said 
that the suppliers were bound to deliver the goods by instal-
ments or to supply at least 40,000 lbs. before December 15, as 
the contract with the suppliers was not produced before the 
Court. The appellant had failed to establish that it had an 
adequate contract to cover the contract in suit. It was not 
enough for the appellant to show that there was a chance of it 
fulfilling its contract with the respondent. 
Bilasiram Thakurdas v: Gubbay (1915) I.L.R 43 Cal. 305 and 
Phoenix Mills Ltd. v. Madhavdas Rupchand (1916) 24 Born. L.R. 
142, referred to. 
CIVIL 
APPELLATE 
JURISDICTION: 
Civil

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