Case Note & Summary
The plaintiff, The Cotton Corporation of India Ltd., filed a suit for recovery of Rs.15,78,006.49 along with interest at 20% per annum against the defendant, The Co-operative Textile Mills Ltd. The dispute arose from a contract for the purchase of 500 bales of Sudan Cotton. The All India Federation of Cooperative Spinning Mills Ltd. requested the plaintiff to book the cotton on behalf of the defendant, which was confirmed by the defendant. The plaintiff sent a standard form contract bearing no.G/655 dated 12.5.77 to the defendant. Clause 33 of the contract provided that if the duplicate copy was not returned duly signed within seven days, it would be deemed accepted. The defendant did not return the signed copy. The plaintiff imported 474 bales of Sudan Cotton at Rs.5150 per candy CIF Bombay and informed the defendant. The defendant failed to pay. The court held that the contract was binding due to deemed acceptance under Clause 33. The plaintiff was entitled to recover the claimed amount with interest. The suit was decreed in favor of the plaintiff.
Headnote
A) Contract Law - Formation of Contract - Deemed Acceptance - Clause 33 of Contract - Where the duplicate copy of the agreement was not returned duly signed within seven days, it was deemed to have been accepted by the mill - The court held that the contract was concluded and binding on the defendant (Paras 2-3). B) Contract Law - Liability for Price and Charges - Sale of Goods - The defendant was liable to pay the price of cotton bales at Rs.5150 per candy CIF Bombay along with other charges as agreed - The court held that the plaintiff was entitled to recover the sum of Rs.15,78,006.49 with interest at 20% per annum (Paras 1, 3).
Issue of Consideration
Whether a binding contract existed between the parties for the sale of cotton and whether the defendant is liable to pay the price and charges with interest.
Final Decision
Suit decreed in favor of the plaintiffs for recovery of Rs.15,78,006.49 with interest at 20% per annum.
Law Points
- Contract formation by deemed acceptance
- liability for price and charges
- interest on delayed payment
