22 January 1957
Supreme Court


Case number: Appeal (civil) 219 of 1953






DATE OF JUDGMENT: 22/01/1957


CITATION:  1957 AIR  357            1957 SCR  438

ACT: Amendment of plaint-Addition of alternative ground for claim --Necessary  allegations  Present in  Plaint-Fresh  suit  on amended claim barred by limitation -Whether amendment should be allowed-Action in trover-when maintainable.

HEADNOTE: The  appellants  filed  a suit for  damages  for  conversion against   the  respondents  on  the  allegations  that   the respondents  were  the agents of the appellants,  that  the- appellants  had  placed orders for certain  goods  with  the respondents, and that the respondents had actually  imported the  goods  but refused to deliver them to  the  appellants. The  suit  was dismissed on the findings  that  the  parties stood  in the relationship of seller and purchaser, and  not agent  and principal and that the title in the  goods  could only   pass   to  the  appellants   when   the   respondents appropriated  them to the appellants’ contracts.  In  appeal before  the  Supreme  Court,  the  appellants  applied   for amendment  of the plaint by raising, in the  alternative,  a claim for damages for breach of contract for nondelivery  of the  goods.  All the allegations necessary for sustaining  a claim  for  damages  for breach  of  contract  were  already present  in the plaint and the only allegation  lacking  was that  the appellants were, in the alternative,  entitled  to claim damages for breach of contract by the non-delivery  of the goods.  But a fresh suit on the amended claim was barred by limitation on the date of the application. Held, that this was a fit case in which the amendment should be allowed.  The fact that a fresh suit on the amended claim was (1)  A.I.R. [1954] Raj. 211. 439 barred   by  limitation  is  a  factor  to  be  taken   into consideration  in  the  exercise of  the  discretion  as  to whether  the amendment should be ordered or not,  -and  does not  affect the power of the court to order it, if  that  is required in the interests of justice.  Charan Das v. Amir Khan, L.R. 47 I.A. 225 and Kisan Das v.   Rachappa, (1909) I.L.R. 33 Bombay 644, followed.



To  maintain  an  action  in  trover  the  plaintiffs   must establish  that they had title to the goods in question  and that  further they were entitled to possession thereof  when they  called  upon the defendants to deliver them.   If  the parties stood in the relation of sellers and purchasers with reference to the transactions, then the plaintiffs must show that the property in the goods, which initially was with the defendants  had  passed  to them  in  accordance  with  the- provisions  of  the  Sale of Goods Act.   If,  however,  the defendants  imported the goods as agents of the  plaintiffs, then the title to them would undoubtedly be with the latter, and the only question then would be whether the former  were entitled to retain possession, as they would be if they  had paid the price on behalf of the principals, and had not been reimbursed that amount.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 219 of 1953. Appeal from the judgment and decree dated June 26, 1952,  of the  Bombay High Court in Appeal No. 20 of 1952 arising  out of  the judgment and decree dated December 17, 1951, of  the -said High Court in its ordinary Original Civil Jurisdiction in Suit No. 1623 of 1948. C.   K.   Daphtary,  Solicitor-General  of  India,   M.   N. Gharekhan and M. S. K. Sastri, for the appellants. H.   D.  Banaji, D. P. Madon, S. N. Andley,  Rameshwar  Nath and J. B. Dadachanji, for the respondents. 1957.  January 22.  The Judgment of the Court was  delivered by VENKATARAMA  AYYAR  J.-This  appeal arises  out  of  a  suit instituted by the appellants in the High Court of Bombay for damages for conversion estimated at Rs. 4,71,670-15-0.   The suit  was decreed by Shah J. sitting on the  Original  Side, but his judgment was reversed on appeal. by Chagla C.J.  and Gajendragadkar J. Against this judgment, the plaintiffs have 57 440 preferred  the  present appeal on a certificate  under  Art. 133(1)(a) of the Constitution. Messrs.   Maitland  Craig  Lubricants Ltd.  is  an  American Company  engaged in the manufacture and sale of  lubricants. It  carried  on business in India with its  head  office  at Calcutta  and  a  branch  office  at  Bombay.   The   second plaintiff,  H. J. Leach, was employed during the years  1933 to   1935  in  the  Bombay  branch  of  the  said   Company. Subsequent  thereto, the Company closed its  Bombay  branch, and  eventually  wound up its Calcutta office as  well,  and thereafter its business was taken over firstly by Ewing  and Company  and  then  by the defendants.  After  he  left  the service of Maitland Craig Lubricants Ltd., Mr. Leach started business as seller of lubricants on his own account and  was importing  them  through the defendants.  On June  6,  1941, they  entered  into an agreement, Ex.  A,  under  which  Mr. Leach was given an exclusive right to sell lubricants of the make of Maitland Craig Lubricants Ltd., within the limits of Bombay  Presidency,  Central Provinces, Rajputana  and  such parts of Central India and Hyderabad as might be  determined by  the  defendants.  The agreement was to  continue  for  a period of five years "unless sooner determined in the manner hereunder - provided.  " Clause 14 of the agreement runs as follows: "Notwithstanding   anything  hereinbefore   contained   this



agreement  shall  be  terminable by either  of  the  parties hereto  upon  giving  to the  other  three  calendar  months previous notice in writing expiring at any time but  without prejudice  to  the  rights and liabilities  of  the  parties respectively   which  shall  have  accrued  prior  to   such termination.  " Clause  16 provides that the agreement was personal  to  the selling  agent, and that he was not to assign or attempt  to assign  his  rights thereunder without the  consent  of  the defendants  in writing first obtained.  It is common  ground that the dealings between the parties continued on the basis of this agreement during the relevant period. On  March  18, 1944, the first plaintiff, which is  a  Joint Stock Company, was incorporated -under the provisions 441 of  the  Indian Companies Act, and on March  30,  1944,  the second  plaintiff assigned his business to it.  On June  13, 1945, the defendants wrote to the second plaintiff that they were  cancelling the agency constituted under the  agreement dated June 6, 1941, as he had assigned the same to the first plaintiff  without  obtaining their consent  in  writing  as provided therein.  Before that date, however, the defendants had  placed orders for import from America of certain  goods which  the  plaintiffs had required, but  these  goods  were actually  received  by them after the  cancellation  of  the contract.  The plaintiffs called upon them to deliver  those goods  to them, but they refused to do so.   Thereupon,  the plaintiffs  instituted  the  present suit  for  damages  for conversion  alleging that the goods in question were due  to them under Government quotas comprised in Nos.  P.L. 1004 to 1007, and that the defendants who had ordered them on  their behalf had themselves no title to them.  The plaintiffs also averred  that in importing those goods the  defendants  were acting  as  their agents.  The  defendants  repudiated  this claim.   They contended that far from they being the  agents of the plaintiffs, it was the second plaintiff who was their agent,  and  that  the property in the goods  was  with  the defendants  and that the action for damages  for  conversion was not maintainable. The  suit was tried by Shah J. who held that the  plaintiffs were  not  the agents of the defendants, that the  goods  in question  had been imported by the latter on behalf  of  the former,  and that in refusing to deliver the same  to  them, the  defendants were guilty of conversion.   He  accordingly passed  a decree referring the suit to the Commissioner  for ascertaining  the  damages.   On  appeal,  Chagla  C.J.  and Gajendragadkar  J. held that on the terms of  the  agreement dated  June 6, 1941, on which the suit was based, the  title to the goods imported by the defendants vested in them,  and that  it  would  pass  to  the  plaintiffs  only  when   the defendants endorsed the shipping documents in their  favour, and that as that had not been done, the claim for damages on the basis of conversion was misconceived.  They  accordingly allowed the appeal, and dismissed the suit. 442 Now,  the contention of the appellants before us is that  on the facts proved, they were entitled to damages on the basis of conversion. There  is no dispute as to the position in law.  Before  the plaintiffs  can  maintain  an action in  trover,  they  must establish  that they had title to the goods in question  and that  further they were entitled to possession thereof  when they  called  upon the defendants to deliver them.   If  the parties stood in the relation of sellers and purchasers with



reference to the transactions, then the plaintiffs must show that the property in the goods, which initially was with the defendants, passed to them in accordance with the provisions of  the  Sale  of Goods Act.  If,  however,  the  defendants imported  the  goods as agents of the plaintiffs,  then  the title to them could undoubtedly be with the latter, and  the only question then would be whether the former were entitled to retain possession, as they would be if they had paid  the price  of the goods on behalf of the principal, and had  not been reimbursed that amount.  This question, however,  would not  arise  on  the facts of this case,  as  the  defendants denied  the title of the plaintiffs to the goods, and  there was  no  refusal by the latter to pay the price.   The  main question that arises for determination, therefore, is as  to the  relationship in which the parties stood with  reference to the suit transactions. It is conceded that to start with, it is the agreement,  Ex. A, that governs the rights of the parties.  It is  therefore necessary  to  examine  its  terms  to  ascertain  the  true relationship of the parties thereunder.  It has been already mentioned   that   under  this  agreement  Mr.   Leach   was constituted  the selling agent of the defendants in  certain areas specified therein.  Under Ex. A, the second  plaintiff was  not to sell the goods below a certain price,  and  they were  also  to  be  sold with  the  mark,  Mait  land  Craig Lubricants Ltd.  The course of business was that the  second plaintiff   used   to  intimate  to   the   defendants   his requirements.   They would then import those goods in  their own  names  from  America  under  c.i.f.  contracts.   After importing  them,  they would fix their own price  for  those goods and                             443 endorse  the  shipping  documents in favour  of  the  second plaintiff,  who  would  be entitled to  clear  them  at  the harbour on payment of 80 per cent. of the price, the balance of  20 per cent. being payable on the delivery of the  goods by  him to his purchasers.  The sales to be effected by  the second  plaintiff within the area to his own customers  were matters  which concerned only him and his  purchasers.   The defendants  had nothing to do with them.  Under cl.  6,  the second plaintiff had to "keep the value of his stocks at all times  fully  insured against fire risk." Clause  13  is  as follows: "  The relationship between parties hereto shall be that  of principal  and  principal only and the selling  agent  shall have no authority whatsoever except such as may be conferred upon him in writing by the firm to transact any business  in the  name of the firm or to bind the firm by  any  contract, agreement or undertaking with or to any third party." In contrast with these terms, there is cl. 4, which provides that  the defendants would themselves supply to  the  Indian Stores  Department  all  their  requirements  of  lubricants within  the territory allotted to the second plaintiff,  who was  to  act  as  their agent  in  clearing  the  goods  and delivering  them  to  the authorities.  And  for  this,  the second plaintiff was to be paid a commission. It  is  clear  that  the agreement read  as  a  whole  is  a composite one consisting of two distinct matters.  So far as cl. 4 is concerned, the second plaintiff was merely an agent of  the defendants.  As regards the other clauses, the  true relationship  is,  as  stated in cl.  13,  that  the  second plaintiff  was purchaser of the goods from  the  defendants, and  the conditions relating to the minimum price  at  which they  could  be sold and the marking of the goods  with  the name of Maitland Craig Lubricants Ltd. were only intended to



protect  their  trade interests but that once  the  shipping document  were  endorsed  by the defendants  to  the  second plaintiff,  he became the owner of those goods.  The  object of  the  insurance  clause was obviously  to  safeguard  the interests  of the defendants with reference to  the  balance price payable by the second plaintiff.  In this case, we 444 are not concerned with any goods consigned by the defendants for  supply  to the Government under cl. 4  but  with  goods which were imported by them for meeting the requirements  of the  plaintiffs.   The  relationship  of  the  parties  with reference  to  those  goods,  if  it  is  governed  by  this agreement, is undoubtedly that neither party is agent of the other,  and  that  the defendants are the  sellers  and  the plaintiffs  are  the purchasers.  If so, the  title  to  the goods would pass to the plaintiffs only when the  defendants appropriated  them  to  the contract,  as  for  example,  by endorsing  the shipping documents, and as that had not  been done,  the  claim for damages on the  ground  of  conversion would be misconceived. The   learned   Solicitor-General  who  appeared   for   the appellants, did not dispute that this was the position under Ex.  A. But he contended that the relationship of seller and purchaser created by the agreement became modified when  the Government   introduced  the  licence  system.    That   was introduced in August ,September, 1941, while the war was on, with  a  view to regulate and control imports.   The  system adopted  was  that  every importer was required  to  give  a statement  as to they extent of his import  business  during the  preceding years, and on the basis of that statement,  a licence  was  given  to him to import up  to  a  limit.   On September  26,  1941, the second plaintiff  applied  to  the Controller  for a licence to import lubricants stating  that he  had been doing that business for seven years and  giving particulars  as to the volume of his business.  Sometime  in November,  a licence was granted to him by  the  Government. The  defendants  also  applied  for  a  licence  to   import lubricants  based  on  the  volume  of  their  business  and obtained  it.   That licence did not -include  the  quantity which  they sold to the second plaintiff, and thus  the  two licences were mutually exclusive.  Mr. Leach would have been himself entitled under the licence to import goods  directly from  America,  but  he chose to  import  them  through  the defendants  as  before,  because  under  the  terms  of  the agreement, Ex.  A, he would have to pay only 80 per cent. of the price when clearing the goods.  There was, 445 however,  this change in the character of  the  transaction, that  whereas before the licence system the defendants  were the   purchasers  from  American  Companies   under   c.i.f. contracts  and  they  then  sold the  goods  to  the  second plaintiff on a price fixed by them, under the licence system the price payable to them was only what they themselves  had to  pay to the American sellers with an addition by  way  of commission on the transaction. Now, the argument of the appellants is that as they were the persons  entitled  to  import the goods  under  the  licence granted to them, in importing them on their requisition  the defendants  must be held -to have acted for them,  and  that the  relationship between them was no longer one  of  seller and  purchaser under Ex.  A but of agent and principal.   To this,  the  answer of Mr. Banaji, learned  counsel  for  the respondents,  was  twofold.  He contended  firstly  that  in applying for and obtaining the licence in his own name,  the second  plaintiff  was  merely acting as the  agent  of  the



defendants, and secondly that the present contention was not raised  in  the plaint and was, therefore, not open  to  the appellants.   On the first contention he referred us to  the correspondence  which  passed  between the  parties  at  the relevant period.  On September 5, 1941, the defendants wrote to  the  second  plaintiff to send  particulars  of  certain shipments  consigned to him so that they could include  them in their application for licence, and on September 11, 1941, they  further wrote to him that those goods were not  to  be included  in hi,, application for licence.  But  the  second plaintiff  was obviously not agreeable to it,  and  actually included those very shipments in his application for licence dated September 26, 1941.  The defendants did not pursue the matter  further,  and  wrote  to  the  second  plaintiff  or December  10, 1941, to intimate to them the number and  date of his import licence and continued to import goods for  him on  the  basis  of that licence.   Counsel  for  respondents relied  on  a letter dated December 11, 1941  in  which  the defendants  advised the second plaintiff to join a group  of oil  merchants, which was to be formed at Bombay,  but  that was obviously by way of adviced 446 to him as a customer.  This evidence is too inconclusive and too  slender  to  support the  contention  that  the  second plaintiff   obtained  the  licence  as  the  agent  of   the defendants.  On the other hand, if the true position of  the second  plaintiff under Ex.  A was that he was a.  purchaser of goods, then the sales by him of those goods were as owner and  the licence issued to him on the basis of  those  sales must  have  been given to him in his own right  and  not  as agent  of the defendants.  This wag the finding of  Shah  J. and  that  has not been reversed on appeal, and  we  are  in agreement with it. It is next contended that the entire plaint is framed on the footing  that the rights of the parties are governed by  Ex. A, that there is no averment therein that that agreement had been  cancelled  or modified, and that a new  agreement  had been  substituted after the licence system  was  introduced, that the evidence of Mr. Leach in the box was also that  Ex. A was in force throughout the period, and that therefore  it was not open to the appellants now to contend that the rela- tionship  of  seller  and purchaser under Ex.   A  had  been altered  into one of agent and principal.  It is  true  that the  plaint proceeds on the basis that Ex.  A is  in  force, and  there is no allegation that it had been modified.   But Ex.  A had not been wholly abandoned.  It was still in force governing  the  relationship of the parties  in  respect  of various  matters such as delivery of goods on payment of  80 per  cent.  of  the price.  The plaint  does  refer  to  the introduction  of  the  licence system,  and  the  defendants clearly knew as much of the true position thereunder as  the plaintiffs,  and  there  could be  no  question’s  surprise. Under the circumstances, if the rights of the parties had to be  determined on the basis of the licence system, we  would have  hesitated  to non-suit the appellants  merely  on  the ground that the effect of that system had not been expressly stated in the plaint. But then, the licence system itself came to an end in March- April,  1942, and was replaced by what is known as  "  Lease and Lend " scheme.  It was under this scheme that the  goods which  form  the  subjectmatter  of  this  litigation   were imported,  and we have therefore to examine what the  rights of the parties                             447 are  with  reference to the incidents of that  scheme  taken



along  with Ex.  A, which is admitted by the  appellants  to have  been  in  force.  This scheme was  introduced  by  the Government  of  India  as a war measure  to  facilitate  the import  of certain essential goods and to conserve them  for the  effective prosecution of the war.  Oil  and  lubricants were  among  the  goods which  were  controlled  under  this scheme.   Under  it, the Government  prohibited  the  direct import  of oil and lubricants from America  through  private agencies,  whether individuals, firms or companies and  took upon itself to import the required quantity. An  association of importers and dealers in Calcutta  called the  Central  Lubricants Advisory Committee  (C.L.A.C.)  was formed,  and importers were to write to the  Committee  what quantity they required to be imported on their behalf.  This Committee  was  a  private body, and  served  as  a  liaison between  the  importers  and  the  Government.   A   similar Committee was formed at Bombay called the Bombay  Lubricants Advisory Committee (B.L.A.C.). The procedure adopted in  the import of goods was this: the importers were to state  their requirements  to  the Committee which sent the same  to  the Government.   Then  on intimation given  by  the  Government authorities,  the  dealers would have to  make  deposits  on account  of  the  price  to be  paid  for  the  goods.   The Government had a purchasing agent in America and he would be required  by  them to purchase the requisite  goods  and  to arrange to get them transhipped to the destinations in India mentioned  by the several dealers.  The  shipping  documents would be taken in the name of the Government and on  payment of the bills endorsed over to the importer for clearance  at the  harbour.  The features of the system to be noticed  are that it was the Government who was the importer of the goods and  the  dealers became entitled to the goods only  on  the shipping documents being endorsed to them by the Government. Now,  so far as the plaintiffs are concerned, the facts  are that they made no deposits with the Government, 58 448 and their names were not in the list of traders for whom the Government  imported  the goods.  They had  direct  dealings only  with  the defendants and sent  their  requirements  to them.   The  defendants would in their  application  to  the Government  include what the plaintiffs required as well  as what  they  themselves  required  and  make  the   necessary deposits  for all the goods.  But all that would stand  only in their name.  Though it would be possible to ascertain  by reference to the correspondence between the parties which of the  orders  placed by the defendants  with  the  Government related to the requirements of the plaintiffs, so far as the Government  itself  was  concerned  it  knew  only  of   the defendants  as importers, and it was in their name that.  it would  endorse the shipping documents, and it was only  when the defendants in their turn endorsed the same to them  that the  plaintiffs  would  get  title to  the  goods,  and  the evidence of Mr. Leach makes it clear that this had not  been done,  as regards the shipments with which the suit is  con- cerned.  This is what he says in his deposition. " The goods were shipped all to the order of the  Government of India  Separate documents were drawn up in respect of the consignments which were to be supplied to each of the trader according  to his requirement submitted to Government.   The traders  who submitted their requirements cleared the  goods by paying the amount of the bills.... The Government did not make any allocation to me.  I depended on the defendants for obtaining  my requirements from the Government.  I  did  not make  any cash deposit as required of the dealer. 1 made  no



deposit with the Government in respect of the quantity which I  wanted.  The entire deposit was made with the  Government by the defendants even in respect of my requirements...  The defendants  endorsed  over the documents in  my  favour  for goods which were meant for me... Excepting for the  admitted portions  the  documents for remaining part of PL.  1004  to 1007  were not handed over to me or endorsed in  my  favour, except to the extent to which the goods were delivered," 449 The evidence of Sir John Burder for the defendants was  "the shipping  documents  were  received  in  the  name  of   the defendants  ".  It  is thus clearly  established  that  with reference to the goods comprised in P.L. 1004 to 1007, which formed   the  subject-matter  of  the  suit,  the   shipping documents  had  not  been  made  out  in  the  name  of  the plaintiffs, nor had the defendants in whose names they  were taken, endorsed the same to them.  That being so, unless the plaintiffs  established that the defendants  were  importing the  goods  as their agents, they would not  have  title  to them,  and the claim for damages on the basis of  conversion must fail. We should mention that the appellants relied on some of  the letters  written  by  the defendants as  showing  that  they recognised the plaintiffs as having the title to the  goods. Thus,  on  August  12, 1944, the  defendants  wrote  to  the plaintiffs  " We confirm that the consignment is for you  ", and  on March 24, 1945, they wrote, " We enclose herewith  a statement  showing  quantities  and grades  that  have  been ordered  by  Government on your account against  order  P.L. 1006/10"  But these statements are quite consistent with the position  of the defendants as sellers who had  ordered  the goods  on  the  requisition of the plaintiffs,  and  do  not import that title thereto had passed to them, which could be only   after  the  goods  came  into  existence   and   were appropriated.   That  did not happen in this case,  and  the shipping documents continued in the name of the  defendants. We  therefore  agree  with the learned Judges  that  on  the pleadings  and on the evidence the claim for damages on  the footing of conversion must fail. That  would  entail the dismissal of this  appeal,  but  the plaintiffs  have applied to this Court for amendment of  the plaint  by raising, in the alternative, a claim for  damages for breach of contract for non- delivery of the goods.   The respondents  resist the application. They contend  that  the amendment  introduces anew cause of action, that a  suit  on that cause of action could now be barred by limitation, that the plaintiffs had ample opportunity to amend 450 their  plaint but that they failed to do so, and that  owing to   lapse  of  time  the  defendants  would  be   seriously prejudiced  if  this new claim were allowed  to  be  raised. There  is  considerable force in the objections.  But  after giving due weight to them, we are of opinion that this is  a fit  case in which the amendment ought to be  allowed.   The plaintiffs do not claim any damages for wrongful termination of the agreement, Ex. A, by the notice dated June 13,  1945. What they claim is only damages for non-delivery of goods in respect  of  orders  placed  by them  and  accepted  by  the defendants prior to the termination of the agreement by that notice.  Clause 14 of the agreement expressly reserves  that right to the plaintiffs.  The suit being founded on Ex.   A, a claim based on Cl. 14 thereof cannot be said to be foreign to the scope of the suit.  Schedule E to the plaint mentions the  several indents in respect of which the defendants  had committed default by refusing to deliver the goods, and  the



damages  claimed  are also stated therein.   The  plaintiffs seek by their amendment only to claim damages in respect  of those  consignments.   The prayer in the  plaint  is  itself general   and   merely  claims  damages.   Thus,   all   the allegations  which are necessary for sustaining a claim  for damages  for breach of contract are already in  the  plaint. What  is lacking is only the allegation that the  plaintiffs are,  in  the  alternative, entitled to  claim  damages  for breach  of contract by the defendants in not delivering  the goods. It  is no doubt, true that courts would, as a rule,  decline to  allow amendments, if a fresh suit on the  amended  claim would   be  barred  by  limitation  on  the  date   of   the application.  But that is a factor to be taken into  account in exercise of the discretion as to whether amendment should be  ordered, and does not affect the power of the  court  to order  it, if that is required in the interests of  justice. In Charan Das v.    Amir   Khan   (1)  the   Privy   Council observed: " That there was full power to make the amendment cannot  be disputed, and though such a power (1)  [1920] 47 I.A. 255. 451 should  not as a, rule be exercised where the effect  is  to take  away from a defendants, legal right which has  accrued to  him  by lapse of time, yet there are  cases  where  such considerations are out-weighed by the special  circumstances of the case. Vide also Kisan Das v. Rachappa In  the present case, apart from the contents of the  plaint already  set  out,  there is the fact  that  the  defendants cancelled  the contract without strictly complying with  the terms  of cl. 14.  The ground on which they  repudiated  the contract  was  that the second plaintiff  had  assigned  his interests to the first plaintiff ; but the record shows that subsequent  to  the assignment the defendants  had  business transactions  with  both the plaintiffs  and  therefore  the ground  for cancellation appears to have been a mere  device to  deprive  the plaintiffs of the benefits  of  the  orders which  they had placed.  We are of opinion that the  justice of  the case requires that the amendment should be  granted. The  plaintiffs  will accordingly be allowed  to  amend  the plaint as follows: "  12(a)  In the alternative and without  prejudice  to  the claim on the footing of conversion, the plaintiffs say  that by  reason  of  the facts aforesaid, there  was  a  contract between  the  parties whereby the  defendants  undertook  to supply and deliver to the plaintiffs (or either of them) the goods  ordered out by Government on-their (the  plaintiffs’) account  and included in the quotas PL. 1004-PL. 1007.   The said goods arrived in Bombay, but the defendants failed  and neglected  to deliver the same though demanded, and in  fact repudiated their obligation to deliver.  The plaintiffs  say that they were always ready and willing to pay for and  take delivery of the same. The  defendants  at all material times well  knew  that  the plaintiffs  had  purchased  the  same  for  resale  and  for fulfilment of contracts of sale and supply.  The  plaintiffs claim damages as per particulars.  " This  appeal must accordingly be allowed, the  decree  under appeal set aside, and the suit remanded for (1)  [1909] I.L.R. 33 Bombay 644. 452 rehearing  to  the trial court.  The  defendants  will  file their  written statement to the amended claim and  the  suit



will be tried and disposed of in accordance with law. There remains the question of costs.  As the plaintiffs  are getting  an  indulgence,  they must pay  the  costs  of  the defendants both in the suit and in the appeal to the  Bombay High  Court.  So far as costs of this appeal are  concerned, as  the  defendants persisted in their contention  that  the plaintiffs  were only acting as their agents,  a  contention which,  if upheld, would have furnished a conclusive  answer to the amended claim as well, we direct the parties to  bear their own costs in this Court. Appeal allowed. Case remanded.