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PETITIONER: UNION OF INDIA

       Vs.

RESPONDENT: SITA RAM JAISWAL

DATE OF JUDGMENT28/10/1976

BENCH: RAY, A.N. (CJ) BENCH: 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)

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

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       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

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       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

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       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