Union of India Vs. Sita Ram Jaiswal
 INSC 268 (28 October 1976)
RAY, A.N. (CJ) RAY, A.N. (CJ) BEG, M.
HAMEEDULLAH SHINGAL, P.N.
CITATION: 1977 AIR 329 1977 SCR (1) 950 1976
SCC (4) 505
CITATOR INFO :
R 1977 SC2082 (6)
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.
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 damages
for wrongful rejection and for non-acceptance of goods on the footing of un-inforceable
contract for sale of goods".
Dismissing the appeal by certificate the.
HELD: (1) The three. ingredients to support
the cause of action under section 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 restore -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 pleadings 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]
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
Purushottam Chatterjee and Sukumar Ghose, for
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 respondent'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 gratuitously.
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 Government 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 retained 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 because 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
compensation-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 gratuitously".
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 Contract
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 restoration. The trial court should have decreed
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
confused. The Division Bench treated the case of the respondent 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
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 reasoning 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
In the present case no question of
restoration arises because of the acceptance of the goods.
The respondent in view of the trial court and
the Division 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 section 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
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