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Pranlal Bhaichand Vs. the Maneokji Petit Manufacturing Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 46 of 1931 and Suit No. 8 of 1931
Judge
Reported inAIR1933Bom46; (1932)34BOMLR1252; 140Ind.Cas.610
AppellantPranlal Bhaichand
RespondentThe Maneokji Petit Manufacturing Co. Ltd.
DispositionAppeal dismissed
Excerpt:
indian contract act (ix of 1872), sections 83, 92, 118-indian evidence act (i of 1872), section 115-contract for sale-banto mal-goods to be manufactured- appropriation of goods-goods not of the contract description-part delivery taken by purchasers-estoppel of purchasers.; on october 3, 1929, the defendants contracted to purchase from the plaintiffs cotton piecegoods described as 'banto mal' to be manufactured from november 1929 to january 1930, on condition that defendants were to take delivery of the goods manufactured during those months, and if they failed to do be they were to be debited with interest). before the end of january the plaintiffs manufactured the contract goods and included therein some of the bales which they had manufactured before november 1929. the defendants took.....john beaumont, kt., c.j.1. in this suit the plaintiffs sue for the price of certain piecegoods sold by them to the defendants under a contract dated october 3, 1929, which is exh. a. the first plaintiffs are themanufacturers. and the second plaintiffs are the selling agents, through whom the contract was made. under the contract the goods sold are described as ' banto to be manufactured, from november 1929, to january 1930,' and the purchasers are to take delivery of the bales in those months, and if they fail to take delivery they are to be debited with interest. the goods are described as partly ' satin gangaghat' and partly 'domestic ', but the argument on the appeal has been confined to the ' gan-gaghat' goods. the price is to be at the rate of fourteen annas per lb.2. mr. justice.....
Judgment:

John Beaumont, Kt., C.J.

1. In this suit the plaintiffs sue for the price of certain piecegoods sold by them to the defendants under a contract dated October 3, 1929, which is Exh. A. The first plaintiffs are themanufacturers. and the second plaintiffs are the selling agents, through whom the contract was made. Under the contract the goods sold are described as ' banto to be manufactured, from November 1929, to January 1930,' and the purchasers are to take delivery of the bales in those months, and if they fail to take delivery they are to be debited with interest. The goods are described as partly ' Satin Gangaghat' and partly 'domestic ', but the argument on the appeal has been confined to the ' Gan-gaghat' goods. The price is to be at the rate of fourteen annas per lb.

2. Mr. Justice Rangnekar gave judgment for the plaintiffs, and on the appeal, three points have been argued by the defendants: first, that the sale was by sample and that the goods were not in accordance with sample, secondly, that the property in the goods had not passed to the defendants and that the plaintiffs cannot sue for the price, and, thirdly, that the plaintiffs failed to deliver goods, and never made a tender of goods, in accordance with the contract.

3. On the first point, I agree with the learned Judge in thinking that the sale was not according to sample. The learned Judge based his decision on this part of the case largely upon the evidence of Monji, the manager of the second plaintiffs, and he dls-belived the evidence of the defendants. In my opinion, even if the evidence of the defendants upon the points be accepted, they failed to show that the contract was for sale by sample. The contract itself says nothing about sample, so the defendants must prove an independent collateral agreement (Indian Evidence Act, Section 92, proviso 2). The evidence of Chunilal on behalf of the defendants only comes to this, that about three weeks before the date of the contract he had a conversation with Monji who said that the defendants might purchase according to the sample which he produced; Chunilal took the sample, and discussed the matter with his partner and his salesman, and they decided to buy according to sample ; but when the actual terms of the contract came to be discussed, no further mention was made of a sale by sample. It seems to me clear that even on this evidence the plaintiffs were not bound by any contract to sell by sample. They originally expressed a willingness to enter into a contract for sale by sample, but when the actual terms of the contract came to be negotiated, they could have said that they had changed their minds, and were no longer prepared to sell by sample. As the defendants themselves did not insist upon a sale by sample when the contract was entered into, it was not necessary in my view for the plaintiffs to mention the matter again.

4. The second and third points are to a great extent interdependent and I will deal with them together.

5. Under the contract the defendants were bound to take delivery at the end of January 1930 at the latest and to pay for the goods. On January 30, 1930, the second plaintiffs wrote to the defendants a letter, which is Exh. L, enclosing an order for 131 bales and a chithi for debiting defendants' account on January 31, 1930. With that letter were enclosed two documents which are Exh. K. The first document is addressed to the defendants and states that on account of the contract in suit, delivery of 131 bales remained to be taken in accordance with the conditions of the contract. Then it says :-

The same are lying in the mills and a list thereof is given below. Please arrange to take delivery of the same on the 31-1-30. Should you fail to take delivery of the abovementioned bales on the data aforesaid, then under the conditions of the contract the amount of the price thoreof will be debited to your account and you will be charged interest thereon at nine per cent, and godown rent and insurance charges.

Then there is a list of the bales referred to. The second document is a delivery order addressed by the second plaintiffs to the godown keeper of the piecegoods shop and it states:-

Please give to Pranlal Bhaichand (i,e. the defendants) delivery of piece-goods mentioned below.

There is then a description of the bales which are totalled up in the last column but one at 131 bales, and in the last column at 129 bales. The explanation of the difference is that two bales had been delivered just before January 30. Then on January 31 Chunilal on behalf of the defendants went to the pedhi of the second plaintiffs and signed Exh. E, which is an entry in the dagina book of the plaintiffs. That entry states :-

Having debited to your account, the goods have been kept in the mill on your behalf.

Exhibit F shows that the price of all the bales remaining to be delivered, which was to be ascertained by weight, was debited to the account of the defendants on January 31, 1930. Mr. Bahadurji on behalf of the defendants points outthat; in these documents the identification numbers of the bales are not given, and he says, therefore, that there was no appropriation of specific bales to the contract of the defendants, since it is in evidence that between the months November 1929 and January 1930 the first plaintiffs manufactured more bales than those attributable to the defendants' contract. But, in my opinion, the effect of these documents is to tell the defendants that specific goods have been appropriated to their account, and they could have gone to the mills and ascertained exactly which the goods were, They signed the acknowledgement Ex. E, and submitted to be charged with the price of the goods, without troubling to go and look at them, and 1 think we must hold that Exh. K means what it says that the goods attributable to the contract are lying in the mills to the account of the defendants.

6. On this point the learned Judge relied on the evidence of Monji, the agent of the second plaintiffs, who says that he knew that the mills had set apart the bales, His evidence is, however, open to the comment that he says that his knowledge is based upon the receipts, which, when produced, he admita cannot show how many bales were set apart by the mills. I think, however, the documents themselves show that specific goods were set apart, and that the defendants assented to the appropriation, and, but for the difficulty to which I will now refer, I think that the property in the goods would have passed to the defendants under Section 83 of the Indian Contract Act on January 81, 1980.

7. It appears. however, and is not disputed, that of the 129 bales referred to in Exh. E, twenty-four bales had been manufactured before November 1929, and were not, therefore, goods falling within the contract. Exhibit K, I think, means that the goods thereby appropriated were goods which answer to the contract description, and Exh. E was signed by the defendants on this basis, and in my opinion it cannot, therefore, be said that on January 31, 1930, the defendants had assented to an appropriation including goods not in accordance with the contract. It appears that between January and May 1930 the defendants took delivery of something over thirty bales from the mill, and amongst those bales were thirteen which consisted of goods manufactured before the date of the contract. The particulars of these bales are contained in Exh. D, After the institution of this suit an order was made, on February 23, 1931, for inspection by the defendants of the bales lying at the mills, and on this inspection it was ascertained that thirteen of these bales were not in accordance with the contract. Thereupon the defendants put in supplemental points of defence claiming to reject on this ground the whole of the ninety-five bales of Gangaghat satin remaining to be delivered. No reply to the supplemental points of defence was delivered. The learned Judge was of opinion that the defendants had waived their right to object that some of the bales were not in accordance with the contract, The only evidence of waiver is that of Monji who says:-

The plaintiffs knew that some of the goods were manufactured before the date of the contract. There was conversation about) this between me and Chunilal and I told Chunilal how many balea were manufactured before the date of the contract.

It is to be noticed that there was no plea of waiver, or of the facts alleged to amount to waiver, and in the absence of such a plea, I think the learned Judge should not have allowed evidence of waiver to be given, However, apart from this point, and taking the evidence as it stands, I think that the single statement of Monji in which he does not give the date or occasion of any such conversation as he refers to cannot be treated as establishing express waiver against the defendants, The date of the conversation might be very material.Chunilal in cross-examination denies that when he took delivery he knew that some of the bales were packed before the date of the contract, and the alleged conversation with Monji was not put to him.

8. The position, therefore, seems to me to come to this : At the end of January 1930 the plaintiff's appropriated certain goods to the contract of the defendants some of which were not in accordance with the contract, and it is not proved that the defendants were at that time informed that some of the goods were not in accordance with the contract, and indeed Exh. K suggests the contrary. Under Section 83 of the Indian Contract Act the appropriation must be of goods 'answering the description in the agreement'. In this case there was no such appropriation, and therefore no assent by the defendants under the section. If the dafendants had taken delivery of the whole of the goods, it is, I think, clear that they would have had a right of rejection, but they would have had to exercise their right promptly on ascertaining the f acts. Moreover, if they had exercised acts of ownership over part of the goods, for example by selling them, before ascertaining that some of the goods were not in accordance with the contract, they would have lost their right of rejection in respect of the whole of the goods. Authority for this proposition is to be found in the case of E, Hardy & Co. (London) v. Hillerns and Fowler [1923] 1 K. B. 658 affirmed in appeal, [1923] 2 K. B. 490 That case turned on the construction of Section 35 of the English Sale of Goods Act, but I think the position under Section 118 of the Indian Contract Act, which governs this case, is similar. In the present case, however, the defendants did not take delivery of the whole of the goods, and I think that the delivery of part of the goods which they did take cannot be treated as a constructive delivery of the whole within Section 92 of the Indian Contract Act, since that partial delivery was not made in progress of the delivery of the whole. See illustration (c) to the section, Mr. Somjee contends that a right of rejection must be exercised once and for all in respect of the whole contract, and that a buyer of goods cannot repudiate the contract after he has accepted and dealt with part of the goods: see Harnor v. Groves (1855) 15 C.B. 667 a case in which the plaintiffs claimed damages for breach of contract. I think that this argument is sound, and that the defendants were not entitled, after re-selling part of the goods, to reject the rest. But the plaintiffs are not claiming damages for breach of contract; they sue for the price of the goods, and sellers cannot recover the price unless the property in the goods has passed to the buyers. The contention of the defendants is that in the circumstances stated the property in the goods never passed either by appropriation or delivery and the suit for price is not, therefore, maintainable. For the reasons given above I am disposed to agree that in fact the property in the goods never did pass either by appropriation or delivery, but, in my opinion, the defendants are estopped by their conduct from asserting this, After receiving Exha. L and K and signing Exh, E, the defendants knew that the plaintiffs were holding goods at the mills to the order of the defendants on the footing that they were goods appropriated under the contract. Between January and May the defendants continued to take delivery of portions of the goods as suited their convenience, and on twelve separate occasions they took delivery of bales packed before the date of the contract. They never told the plaintiffs that they would repudiate the appropriation on this ground, and the plaintiffs continued to hold the goods to the order of the defendants. In my opinion the conduct of the defendants amounted to a representation to the plaintiffs that they would not repudiate the appropriation on the ground that some of the goods were packed before the date of the contract, and the plaintiffs acted upon this representation by continuing to hold the goods. On this point, therefore, I arrive at the same conclusion as the learned trial Judge, but I rely on estoppel and not on evidence of express waiver.

9. In my opinion the appeal fails and must be dismissed with costs.

Mirza, J.

1. The two main questions which arise for determination in this appeal are: (1) whether the appellants have rightly repudiated their contract dated October 3, 1929, in respect of ninety-five out of 125 bales of Satin known as Gangaghat on the ground that the 125 bales of Satin Gangaghat which were comprised in the contract and of which these ninety-five bales formed a part were to be manufactured and supplied to them in accordance with a basic sample, which is Exhibit 3 in the suit, and that the ninety-five bales are not in accordance with such sample; and (2) whether the appellants were justified in repudiating the contract in respect of the ninety-five bales of Satin Gangaghat on the ground that thirteen out of the ninety-five bales supplied or tendered to them were not of the contract description as they were not manufactured between November 1929 and January 1930 as stipulated in the contract. The repudiation by the appellants under the first head was by their attorneys' letter dated September 23, 1930, part of Exhibit Q collectively; and the repudiation by them under the second head was by their supplemental points of defence filed in this suit on March 13, 1931, after the appellants had taken a survey of the goods under an order of the commercial Judge dated February 3, 1931.

2. The appellants' case is that previously to the contract in suit they had under two contracts, Exhibits 0 and B, contracted to purchase from the plaintiffs (respondents) certain bales of Satin (Gangaghat brand) to be delivered from August to September 1929 as ready goods and between August to October 1929 as banto, i. e, goods under manufacture, respectively ; that, while the appellants were taking delivery of the goods under these contracts, they asked for and obtained from the respondents a sample piece of Satin Gangaghat brand, being Exhibit No. 3, with a view to lay a further order for banto Satin of this brand, and that thereafter the appellants entered into the contraot dated October 8, 1929, part of Exhibit A, on the understanding that the respondents were to manufacture and supply to the appellants 125 bales of Satin Gangaghat comprised in this contract in accordance with the sample Exhibit 3; that prior to January 31, 1930, the appellants, in ignorance of the fact that the goods were not in accordance with the sample, took delivery from the respondents of some bales of Satin Gangaghat brand and re-sold the same to their up-country constituents ; that on January 31, 1930, being still ignorant on this subject the appellants executed Exhibit E, which is an entry in the Udhar Nondh of the respondents, debiting to the appellants the goods under the two contracts dated October 3, 1929, and October 11, 1929, of which no delivery had till then been taken by the appellants-January 81, 1930, being the last day by which delivery of all the goods comprised in the two contracts was to be completed ; that in February, 1930, the appellants, having received certain complaints from their up-country constituents regarding some of the Satin Gangaghat which the appellants had sold to them oat of this stock, started correspondence, ( Exhibit G collectively), with respondent No. 2 complaining for the first time that the goods which were supplied to the appellants were found to be not in accordance with the sample which was agreed upon. In the course of that correspondence the respondents having denied that they had agreed to sell these goods according to any sample, the appellants, after having taken delivery of some more bales of Satin Gangaghat from time to time from the respondents, finally by their attorneys' letter dated September 23, 1930, repudiated their liability to take further delivery of the ninety-five bales which had then remained to be taken delivery of.

3. It is admitted on behalf of the respondents that on September 14, 1929, the respondents gave to the appellants at Chunilal's request five cuttings including Exhibit No. 3, but they say that the five pieces so supplied were not by way of samples in respect of any contract which was then in contemplation, but were given to Chunilal because Chunilal said that he wanted such pieces in his shop for being shown to prospective customers. The appellants deny that they received five pieces as alleged by the respondents' witnesses Monji Kallianji and Ratan Shavak Sethna. They admit having received only one piece, viz., Ex. 3. Monji Kallianji, Shavaksha Pestonji Lala and Eatan Shavak Sethna all admit that the piece Exhibit No. 3 is superior in quality to the Satin Gangabhat brand which was supplied to the appellants. Monji Kallianji and Shavaksha Pestonji Lala have both stated that Exhibit No. 3 is not Satin Gangaghat, but long cloth, Ratan Shavak Sethna, the Weaving Master of the mills, and Kawasji Hormusji Petit, the general Superintendent of the mills in charge of cloth sales, both agree that Exhibit No. 3 is Satin Gangaghat. The impressed stamp on Exhibit No. 3 describes the cloth asGangaghat. According to Monji Kallianji and Shavaksha Pestonji Lala this impression on Exhibit No. 3 has been wrongly made. It appears that the texture of Exhibit No. 3 is made up of 52 reeds and 52 picks in a square inch; while that of the goods supplied is 48 reeds and 48 picks, There can be no doubt that Ex. No. S is superior in quality to the Satin Gangaghat supplied by the respondents. The learned Judge has believed the evidence of Monji Kallianji and Shavakaha Pestonji Lala that the piece Exhibit No. 3 is really long cloth and not Satin Gangaghat. This point, however, seems to me to be immaterial in view of the terms of the contract, which, in the absence of a collateral agreement to the effect as contended for by the appellants, must govern the case. The contract which is in writing does not mention that the sale is to be in accordance with any sample. Theterms of Section 92 of the Indian Evidence Act would preclude the proof of an oral agreement which would contradict, vary, add to, or subtract from its terms. Under proviso 2 to Section 92, it is permissible to prove the existence of any separate oral agreement as to any matter on which the document is silent and which is not inconsistent with the terms of the document. The learned Judge was of opinion that the verbal agreement relied on by the appellants in this connection came under proviso 2 to Section 92, and hence admitted oral evidence to prove the collateral agreement. The learned Judge was satisfied from the demeanour of the witnesses before him that he could not rely upon the evidence either of Chunilal Parbhudas or of his partner Bhaichand Vanmali. He was favourably impressed by the straightforward manner in which the witnesses Monji Kallianji and Ratan Shavak Sethna gave their evidence. The onus being upon the appellants to prove the verbal agreement on which they rely, they have failed to discharge it, Apart from this consideration, the objection taken by the appellants under the present head is a belated one. They were called upon by the respondents on January 30, 1930, by their letter Exhibit K, to take delivery on the following day which was January 31, 1930, of the remaining goods under their two contracts. The appellants did not take delivery of the goods on January 31, 1930, nor did they inspect the goods of which delivery was offered. They signed the entry Exhibit E by which they acknowledged the correctness of the particulars given in the entry, thus appropriating to themselves the goods which had till then remained undelivered under the two contracts, and constituting respondent No. 1 bailees to hold these goods on their behalf, The appellants started correspondence in February 1930 raising the point for the first time that the goods were not according to sample. Although the allegation made by the appellants that the sale was by sample was challenged by the respondents in the course of that correspondence, fiche appellants continued to take delivery from time to time as it suited their convenience of further bales from the stock so set apart and did not finally repudiate the contract in respect of the remaining ninety-five bales until September 23, 1930. Having regard to this conduct of the appellants, they are debarred, in my opinion, from now contending that the sale to them was by sample and the goods are not according to sample.

4. With regard to the second point, it is conceded by the respondents that thirteen bales out of the ninety-five bales are not of fiche contract description as they were manufactured and packed prior to November 1929. The respondents, however, urge that the appellants were aware that some of the goods appropriated to the contract were not of the contract description and had waived any objection they might have had on that ground. The evidence of Monji Kallianji. on this point is as follows:- ' The plaintiffs (meaning the defendants-appellants) knew that some of the goods were manufactured before the date of the contract.' The learned trial Judge has believed this evidence of Monji Kallianji and has held that the appellants knew that some of the goods out of those appropriated to the contract were manufactured before the date of the contract and had waived any objection on that ground. From Exhibit D it appears that on January 25, 1930, the appellants took delivery of one bale of Satin Gangaghat on which the date of packing was January 4, 1928. Again, on January 28, 1930, the appellants took delivery of a bale which was packed on January 9, 1928. The appellants' attention must have been called at the time to the date of packing which these bales bore, Chunilal's denial to the contrary has not been believed by the learned Judge, Subsequent to January 31, 1930, the appellants on various dates took delivery out of the stock set apart for them of various bales including thirteen bales of Satin Gangaghat which had been packed prior to November 1929 and did not at the time raise an objection to any of these thirteen bales on the ground that they were not of the contract description. It is difficult to believe that the appellants were ignorant of the dates on these thirteen bales. On February 3, 1931, the appellants obtained an order from the commercial Judge by which they were given liberty to survey the goods, the subject-matter of this suit. After the survey was taken by the appellants they obtaiued leave on March 13, 1931, from the commercial Judge to file supplemental points of defence, and in pursuance of the leave so granted the appellants filed their supplemental points of defence raising for the first time the further defence that they were not liable to pay for and take delivery of the remaining ninety-five bales as thirteen bales out of them were found to be not of the contract description, In granting leave to the appellants to tile supplemental points of defence, the learned commercial Judge ordered the respondents to file a reply to the supplemental points of defence, but the respondents have Jailed to comply with that order. If the respondents were relying on waiver by the appellants, they ought clearly to have pleaded it by means of a further reply. At the hearing before the learned Judge no issue was raised on the point of waiver, but evidence was allowed to be led and the matter has been dealt with by the trial Judge in his judgment,

5. The question of waiver on the part of the appellants seems to me to be closely connected with the question as to the appropriation of the remaining goods to the contract on January 31, 1930. On January 30, 1930, the respondents wrote their letter, Exhibit K, to the appellants by which they informed the appellants that in respect of the two contracts in suit, 131 bales had remained to be delivered and that the same were lying in the mills, implying that they were ready for delivery. A list of the goods to be so delivered with their full description is appended to the letter, The letter calls upon the appellants to arrange to take delivery of the goods on January 31, 1980, The letter proceeds :-

Should you fail to take delivery of the abovementioned bales on the date aforesaid, then under the conditions of the contract the amount of the price thereof will be debited to your account and you will be charged interest thereon at nine per cent, and godown rent and insurance (charges) eta, of which please take note.

A delivery order addressed to respondent No. 2's godown-keeper asking him to give delivery of the remaining goods appertaining to the contracts is enclosed with the letter. On January 31, 1930, an entry is made in the Udhar Nondh kept by respondent No. 2. The heading of the entry is: ' To the account of Sha. Pranlal Bhaichand. The date the 31-1-80. Having debited to your account (the goods) have been kept in the mill on your behalf. Particulars of the same are as under :-' The entry then gives full particulars of the goods of which delivery was to be taken. At the foot of the account Chunilal has put his signature on behalf of the appellants. He acknowledges the correctness of this entry.

6. Mr. Bahadurji on behalf of the appellants has contended that there was no proper appropriation of the goods to the contract. He relies upon an admission made by Monji Kallianji in his evidence which is as follows:-

Exhibit E is a mere book entry made and signed because of the terms of the contract. The due date having elapsed by January 31 details of the bales remaining undelivered had to be entered on that date. Nothing is stated in the entry as to dates of packing. We had not taken delivery of these bales from the mills at this date. At that date I knew the mills bad set apart these bales. I knew from the receipts. The receipts are as our shop, I can produce them. The receipts will not show date of packing on this date. Nobody knew the dates of packing of these bales. I did not know nor the person who signed Exhibit E knew when the bales were packed.

Later in his re-examination Monji Kallianji produced the receipt book to which he had referred in his cross-examination and admitted that the receipt book did not show how many bales were set apart by the mills in respect of these contracts, Dealing with this evidence the learned Judge has observed : ' Monji swears that the bales were set apart by the mills as would appear from the receipt books. These books were subsequently produced. I accept Monji's evidence on this point as there is noth-to challenge it,' There is force in Mr. Bahadurji's contention that the learned Judge's observations on this evidence are not justified. From the evidence as it reads, it would appear that Monji Kallianji had no personal knowledge as to whether the mills had set these goods apart or not. The evidence he gava was based upon an inference which he drew from the receipt book, and when the receipt book was produced it did not bear out that inference.

7. Mr. Bahadurji also complains that certain remarks appearing in the learned Judge's judgment on the question of waiver are not justified by the evidence. The observations in the judgment to which exception is taken are as follows:-

According to Monji's evidence, which 1 accept, Chunilal knew and was in. formed that some of the bales under the conbraota were manufactured before the dates of the contracts. In spite of that he agreed to take the goods. This seems to me to be probable having regard to the defendants' conduct. I am unable to believe them when they say that they did not know until long after disputes arose whether they could reject the goods on this ground, especially as they knew and were dealing in Banto goods for several years. Therefore I think that there was a waiver of the rights under Section 118 inasmuch as there was an agreement to accept the goods in spite of the knowledge that some of them were manufactured before the date of the contract.

From the evidence of Monji Kallianji to which I have already referred, it would appear that the witness' recollection on this point was very vague. He has given no particulars as to the date or the occasion when this conversation is said to have taken place. If the matter rested only upon the evidence of Monji Kallianji, I would be disposed to agree with Mr. Bahadurji's contention that the respondents have failed to prove that there was an express agreement by which the appellants waived their objection to some of the goods not being of the contract description.

8. With regard to the appropriation of the goods to the contract the effect of Exhibit E, in my opinion, is that certain goods purporting to be of the contract quality and description were appropriated by the respondents in the first instance to the contract and the appellants were invited to take delivery of those goods. Thereafter the goods remained with the mills acting on behalf of the appellants as their bailees. The respondents have not satisfactorily proved that they actually set apart these goods in their mills. The onus to prove this was on them and they have failed to discharge it. But the effect of Exhibit E, in my opinion, is that there was a notional setting apart of the goods which was assented to by the appellants. The respondents in effect represented to the appellants that the remaining goods under the contract were ready for delivery and called upon the appellants to take delivery of them. The appellants accepted that position and must be deemed to have taken delivery of the goods described in Exhibit E in respect of which they constituted the respondents their bailees for holding the goods on their behalf.

9. The contract was in respect of goods which were to be manufactured by the mille. The contract was entered into by the appellants with respondent No. 2, but respondent No. 2 firm were contracting as the agents of a disclosed principal, viz., respondent No. 1. In the absence of a contract to the contrary the place for delivery in such a case would be the place where the goods were manufactured. Under Section 93 of the Indian Contract Act, in the absence of a special promise, the seller of goods is not bound to deliver them until the buyer applies for delivery. None the less the respondents took the initiative in offering to deliver the goods on the due date. Under Section 94 of the Indian Contract Act, in the absence of any special promise as to delivery, goods sold are to be delivered at the place at which they are at the time of the sale; and goods contracted to be sold are to be delivered at the place at which they are at the time of the contract for sale, or, if not then in existence, at the place at which they are produced. Mr. Bahadurji has relied upon the evidence of Monji Kallianji to show that the practice was for the appellants to apply to respondent No. 2 for delivery of bales as and when they required them ; respondent No. 2 would then send for these bales from the milla and Bend a delivery order in respect of them to the appellants on respondent No. 2's godown keeper. The delivery order given in respect of the remaining goods on January 81, 1930, being part of Exhibit K, exemplifies that practice except that it comprises all the remaining bales. On this ground Mr. Bahadurji has contended that he was under no duty to examine the goods until they reached the place where he was bound to take delivery, that place being respondent No. 2's godown. In my judgment, the appellants cannot now rely on this contention. By Ex. E they purported to take delivery of the goods although the goods were not then in respondent No. 2's godown, and agreed that those goods should continue to remain in the mills on their behalf.

10. Mr. Bahadurji nest contends that the tender made on January 80, 1980, of the goods was not a valid tender. Twenty-four bales out of them were not of the contract description and in respect of those bales the tender could not be valid, Under Section 38 of the Indian Contract Act where there is an offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver. Mr. Bahadurji has cited Rylands v. Kreitman (1865) 19 C.B.N.S 351 Reuter v. Sala (1879) 4 C. P. D. 239 and Moore & Go. and Landauer & Co., In re, [1921] 2 K. B. 519 as showing that where the sale of goods is by description, if the goods contracted to be sold are mixed with goods of a different description the buyer would be entitled to reject the whole consignment. It was undoubtedly the right of the appellants on January 31, 1930, to have rejected the remaining Satin Gangaghat bales when the offer for delivery was made as they contained, as has subsequently transpired, twenty-four bales which were not of the contract description. In Haridaa Khandelwal v. Kalumull I.L.R. (1903) Cal. 649 Sale J. has held that if the right to reject the goods as being of an inferior quality is not exercised by the buyer when the goods are tendered, but a right of a proprietary character in respect of the goods is exercised by directing delivery to be made to third parties, then the buyer accepts the goods. In the present case it was the appellants' duty, in my opinion, to have ascertained on January 31, 1930, whether the goods were of the contract description. They did not do so, but exercised proprietary rights thereafter over the goods delivered to them. They constituted the respondents their bailees for holding these goods on their behalf. They exercised further proprietary rights over these goods by taking delivery of such part or portion of them from time to time as suited their convenience. It is not open to them to raise the contention that as some of the goods are not of the contract description they are now entitled to reject such of the bales as they have not disposed of. It is not open to the appellants, in my judgment, after a lapse of time, when the market has gone against them, to claim that they can reject these goods.

11. Prior to January 31, 1930, the appellants, having taken delivery of some bales which were not of the contract description, can be deemed to have made a representation that they would not object to the goods on the ground that they were not manufactured during the contract period. It can be said that relying on that representation the respondents included in their tender of the remaining goods on January 31, 1930, twenty-four bales which were manufactured prior to the contract period. The appellants dealt with these remaining goods irrespective of their being of the contract description or not. By so dealing with the goods the appellants can in my judgment be said to have made a further implied representation to the respondents that they would not reject the remaining goods on this ground. The respondents have acted on the faith of that representation by having continued to hold the goods on behalf of the appellants until the market in those goods fell. The respondents have materially altered their position to their prejudice owing to this conduct on the part of the appellants. In my judgment the appellants are now estopped from contending that any part of the goods which remained on their account with the respondents was not of the contract description.

12. In the result, in my opinion, the appellants having failed on both points which were urged on their behalf, the appeal should be dismissed.


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