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Kishinchand Chellaram Vs. Vishandas Amarnath - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 1751 of 1947
Judge
Reported inAIR1949Bom334; (1949)51BOMLR480
AppellantKishinchand Chellaram
RespondentVishandas Amarnath
Excerpt:
.....right of-goods sold passing into possession of purchaser-conversion.;sections 48 and 54 of the sale of goods act, 1930, contemplate that the unpaid seller of goods has not parted with possession thereof to the purchaser and that be has therefore a lien on the goods sold, and while he is in possession of them, he has got the right of re-sale. the above sections do not contemplate the ease where the purchaser has already taken delivery of the goods. the possession is then with the purchaser, and it is not transferred to the vendor by the purchaser subsequently leaving the goods at the vendor's door. in such eases the vendor has neither the right (except at the request of the purchaser) nor the duty to resell the goods. if the vendor disposes of the goods, he is liable on the footing of..........deficiency in price cm the footing of a re-sale as referred to in section 46 and section 54 of the sale of goods act. sections 46 and 54 contemplate that the unpaid seller of goods has not parted with possession thereof to the purchaser and that he has, therefore, a lien on the goods sold, and while he is in possession of them, he has got the right of re-sale. those sections do-not contemplate the case where the purchaser has already taken delivery of the goods. the possession then is with the purchaser, and it is not transferred to the vendor by the purchaser subsequently leaving the goods at the vendor's door. in such cases the vendor has neither the right (except at the request of the purchaser) nor the duty to resell the goods. if the vendor disposes of those goods, he is liable on.....
Judgment:

Desai, J.

1. By a contract dated December 30, 1946. the plaintiffs agreed to sell to the defendants 15 bales of raw silk steam filature yarn E Grade Pounds 20/22 at Rs. 37-8-0 per pound. By the said contract it is provided that 'goods shipped per S.S. 'Monroe' will be delivered on safe arrival after clearing from the Customs House.' Mr. K.T. Desai, the learned Counsel appearing for the plaintiffs, has relied on Clauses 3, 7 and 9 of the terms printed at the back of the contract; whereas Mr. Somjee, the learned Counsel for the defendants, has relied on Clauses 21 and 22.

2. On February 6, 1947, the plaintiffs delivered the 15 bales to the defendants. The 15 bales did not bear any tickets. On February 7, 1497, the defendants wrote to the plaintiffs that the 15 bales were without any tickets, that they had sold the 15 bales to other parties and that Messrs. Bhojaji Sobhagchand who had purchased 10 bales from the defendants out of the said 15 bales had served the defendants with a telegraphic notice that the bales in question were without tickets and that they therefore refused to take delivery and that the other two parties to whom the defendants had sold the remaining five bales were also refusing to take delivery thereof. The defendants further wrote that in the light of what was stated above, the defendants were compelled to ask the plaintiffs to take back the 15 bales and that the bales were lying with the defendants on the plaintiffs' account. By their letter dated February 7, 1947, the plaintiffs replied as follows:-

We are surprised to note your asking us to take back the bundles on which you allege that the tickets are not affixed. We regret we are in no way responsible now as the goods have been taken over by you and delivered by us as per the terms of the contract, in which there is no stipulation whatsoever that all the bundles should have tickets affixed thereto. Please settle our bill immediately and oblige.

These two letters crystallise the dispute which arose between the parties. Thereafter considerable correspondence passed between them. It is not necessary, in my opinion, to refer to that correspondence at length.

3. The plaintiffs by their attorneys' letter dated February 13, 1947, called upon the defendants to pay the sum of Rs. 74,256-6-0 being the price of the 15 bales. The defendants denied their obligation. On February 21, 1947, the defendants returned 10 bales out of the 15 bales to the plaintiffs. In fact the defendants left the said 10 bales on the pavement adjoining the plaintiffs' shop. By their telegram of that date the defendants said that the 10 bales were without tickets and so they were returning them to the plaintiffs' shop and that the defendants were sending also the remaining 5 bales. By their attorneys' letter dated February 21 1947, (which letter was written before the 10 bales were left at the plaintiffs' shop) the plaintiffs called upon the defendants to pay the price in respect of the 15 bales and added:

Without prejudice to the above and in order that your clients may not be mulcted in further costs and expenses, we are instructed to suggest that the 15 bales of yarn taken delivery of by your clients from ours should be sent to the auctioneers Messrs. Bennett & Co., who should be asked to sell the same on behalf of the parties concerned. Messrs. Bennett & Co. will take delivery of the said goods on behalf of both our clients and without prejudice to the rights of the parties against each other sell the same and pay over the nett sale proceeds of the goods to our clients.

By another letter dated February 21, 1947, (written after the 10 bales were left at the plaintiffs' shop) the plaintiffs' attorneys wrote as follows:-

We have advised our clients to keep the goods with them instead of letting them lie on the pavement, but please note that this will be on your clients' account and at their risk. Please let us know as early as possible whether your clients are agreeable to the goods being sold through Messrs. Bennett and Company as suggested in our letter to you of date.

The plaintiffs' attorneys sent a reminder by their letter dated February 25, 1947, and informed the defendants that the 10 bales were being sent to Messrs. Bennett & Co. with instructions to sell off the same in the best way possible, but that the sale would be on the defendants' accounts and at their risk. By the said letter the plaintiffs' attorneys called upon the defendants to send to Messrs. Bennett & Company the five bales in their possession so that the same may be sold off in the same way as the 10 bales. By their attorneys' letter dated February 28, 1947, the plaintiffs' wrote that the said 10 bales had been forwarded to Messrs. Bennett & Co. By their attorneys' letter dated March 3, 1947, the plaintiffs called upon the defendants to send to the plaintiffs the remaining 5 bales so that all the 15 bales may be sold off together by public auction. By their attorneys' letter dated March 3, 1947, the defendants stated that the market had gone down considerably and that it was the plaintiffs' duty to have the goods sold out at the time of default and not wait till the market had gone down considerably as it had then. The 10 bales were advertised for sale on March 11, 1947, but subsequently under instructions from the plaintiffs the sale was postponed to March 14, 1947, when the 15 bales were sold by public auction through Messrs. Bennett & Co. on account of the defendants. As a result of the said sale, Rs. 54,001-14-6 were realized as the price in respect of the 15 bales out of which deducting the auctioneers' commission at the rate of 1 per cent, amounting to Rs. 540, the net sale proceeds came to Rs. 53,461-14-6. The plaintiffs have brought this suit to recover the sum of Rs. 20,870-3-6. I should mention that out of the sum of Rs. 53,461-14-6, the plaintiffs claim by their plaint to deduct the sum of Rs. 75-12-0 for advertising the sale on March 11, 1947, and it is after deducting this sum that they arrive at the aforesaid figure of Rs. 20,870-3-6 as the amount due to the plaintiffs.

4. The plaintiffs by their plaint deny that there was any express or implied term in the contract that the bales were to bear any ticket or that there was any bazaar custom or dhara that the bales should bear any ticket as alleged by the defendants.

5. By paragraph 15 of the plaint the plaintiffs in the alternative claim to recover the sum of Rs. 21,649-14-6 as damages. The sum of Rs. 21,649-14-6 is made up of the sum of Rs. 20,870-3-6 with interest calculated thereon at the rate of 9 per cent.

6. The defendants by their written statement admit that they took delivery of the 15 bales on February 6, 1947, and state that they had no opportunity to examine the goods when they took delivery. The defendants say that they rejected the 15 bales as they had no tickets. In paragraph 7 the defendants state that the plaintiffs are bound under the contract to give goods with tickets. In the alternative they plead that it was an implied term to give goods with tickets. In the further alternative, they say that such was the custom of the trade or bazaar dhara. The defendants deny in toto their liability to pay anything to the plaintiffs.

7. At the hearing before me the following issues were raised:-

(1) Whether the suit as framed is maintainable, being a suit to recover the price on resale of the goods?

(2) Whether it was an express term of the contract that the plaintiffs should supply-goods bearing tickets?

(3) Whether it was an implied term of the contract that the goods should bear tickets?

(4) Whether the defendants were entitled to reject the goods on the ground that they bore no tickets?

(5) Whether the resale is binding on the defendants? and

(6) Whether the plaintiff is entitled to recover any, and if so, what sum from the defendants?

8. I should mention that Mr. Khambatta, who was then in charge of the case on behalf of the defendants, specifically mentioned that he gave up his contention about the custom of the trade or bazaar dhara.

9. Parties are agreed about all the important facts and the dates when the incidents took place, the only disputed question being whether the defendants took delivery of the goods after examining them as alleged by the plaintiffs or without examining them as alleged by the defendants. That dispute to my mind is not material in the view I take of this case.

10. I shall, in the first place, consider the defendants' contention that it was either an express term or an implied condition of the contract that the bales should bear a ticket. Now what is written in the manuscript in the contract exhibit A as constituting the description of the 15 bales is that the 15 bales were of raw silk steam filature yarn E Grade Pounds 20/22 shipped S.S. 'Monroe'. It is not a term of the contract that in order that the goods should be of contract quality, there should be a ticket affixed to the said goods. In support of his contention that it was an express term, of the contract that tickets should be attached to the goods, Mr. Somjee relies on Clause 21 of the printed terms printed at the back of the contract exhibit A, which is as follows:-

Binding packing and fold whatever that may be you are bound to take.

I fail to see what bearing this clause has on the rival contentions on the subject. Mr. Somjee more particularly and emphatically relies on Clause 22 of the contract which says:

If goods to arrive by steamer have been, sold to you by wire or air mail, then we are not responsible for the design, quality, colour, number or label of the goods. Whatever goods come the purchaser is bound to take delivery thereof without objection.

Mr. Somjee contends that the reason why it is specifically provided by that clause that the plaintiffs were not to be responsible in respect of the label of the goods is that it was contemplated by the parties that the goods should have a label. I do not think that is a correct construction of that clause. What that clause means is that where design, quality, colour, number or label is specified in terms in the contract and there is a difference in design, quality, colour, number or label in the goods as they actually arrive, in that case the plaintiffs are not to be responsible and that the purchaser was bound to make delivery without objection. In my opinion there is no express condition in the contract that the goods should bear labels. It is difficult to understand the value of tickets in reference to goods as they have been sold, especially when tickets carry no value with them as pointed out hereinafter.

11. One Harnarayan Bhambharam Dhingra, a munim in the employment of the defendants, was called as a witness on behalf of the defendants. He said that the defendants had purchased in all 20 bales, fifteen of them being the subject-matter of the suit and the remaining five bales being the subject-matter of contract No. 113, which contract was arrived at on the same day as the contract in suit, i.e. December 30, 1946. The defendants paid for the 5 bales on February 6, 1947, as the 5 bales bore a ticket, but they did not pay for the 15 bales as they did not bear tickets. Harnarayan stated that the ticket showed the quality of the goods. Mr. K.T. Desai objected to the above answers on the ground that it was an attempt to show that the contract was different from what it appeared to be on the face of the writing. I asked Mr. Khambatta whether it was stated in the points of defence that the ticket indicated the quality of the goods. Mr. Khambatta said that it was not so stated in terms. Harnarayan stated that the 5 bales bore only one kind of ticket but he could not tell what particular ticket was on the 5 bales; it may be any ticket. I asked the witness the question: 'Is the quality the same whatever may be the ticket or does the quality vary according to the ticket?' The only answer that I could get was that the quality was written on the ticket, whatever the ticket may be. The question was repeated and the answer given was: 'Each manufacturer has got his own ticket.' I again asked the witness: 'Are the goods sold according to the grade, e.g. E grade Or are they sold by the description of the ticket?' The answer given was: 'The grade is written on the ticket.' Thereupon in despair I gave up the attempt to get an answer to my question. The reason why I asked that question was that if the tickets did not indicate the quality, there was no point in making the ticket a term of the contract.

12. In my opinion the goods were sold by description as clearly stated in the contract and they were sold without there being any written or other obligation to have a ticket attached to the goods. I am, therefore, of the opinion that there was no express or implied obligation that the goods should, bear tickets. In order to hold that there was an implied obligation, I must come to that conclusion as a matter of necessity, a conclusion so irresistible on the facts of the case, that it was as plain as something written in terms in the contract. In my opinion there are no facts which raise that necessary conclusion. In this connection it is significant to note that the defendants have given up their case that the custom of the trade required that the goods should have a ticket attached to them.

13. I, therefore, answer issues Nos. 2 and 3 in the negative. In the result issue No. 4 must also be answered in the negative.

14. I shall now come to issue No. 1, namely, whether the suit as framed is maintainable, being a suit to recover the price on resale of the goods? Now in my opinion this suit is a suit to recover the price of the goods. But the plaintiffs having got the goods sold through auctioneers and realized certain moneys, have got to give credit, and they have, therefore, given credit for these moneys against their claim for recovery of the price. Mr. Somjee has argued that Clauses 7 and 9 of the printed terms at the back of the contract are not in terms referred to in the plaint, and I must, therefore, disregard them, and that the plaintiffs claim to resell the goods under Clause 3 of the contract in suit cannot be sustained. Mr. Somjee says that Clause 3 has no application where the goods have been rejected as in this case they were by the defendants. In my opinion Clauses 3, 7 and 9 have no application to the facts of this case. In my opinion this is not a suit to recover the deficiency in price cm the footing of a re-sale as referred to in Section 46 and Section 54 of the Sale of Goods Act. Sections 46 and 54 contemplate that the unpaid seller of goods has not parted with possession thereof to the purchaser and that he has, therefore, a lien on the goods sold, and while he is in possession of them, he has got the right of re-sale. Those sections do-not contemplate the case where the purchaser has already taken delivery of the goods. The possession then is with the purchaser, and it is not transferred to the vendor by the purchaser subsequently leaving the goods at the vendor's door. In such cases the vendor has neither the right (except at the request of the purchaser) nor the duty to resell the goods. If the vendor disposes of those goods, he is liable on the footing of conversion.

15. What then is the position in reference to these goods in which the property had in my opinion passed to the defendants and which they had no right to reject The defendants left the 10 bales opposite the plaintiffs' shop on the pavement against the plaintiffs' will. Instead of allowing these goods to perish and go waste, the plaintiffs got them sold by public auction along with the other 5 bales after notice to the defendants and on the defendants' account. That action of the plaintiffs may be justified or not, but that sale was not a re-sale as contemplated by the contract or by the Sale of Goods Act. The plaintiffs' liability being in the nature of liability arising on conversion, the plaintiffs, in my opinion, are liable to account to the defendants for such price as fairly represents the value of the goods at the date of the sale, and no more, especially in a case like this, where the plaintiffs had no other course left open to them. As the sale was not a re-sale within the meaning of the Contract or the Sale of Goods Act, the question, whether the sale was unreasonably delayed and the consequences of such delay, does not, in my opinion, arise for my decision. If it did, I am of the opinion that the sale was not held unreasonably late. The goods were left at the plaintiffs' shop on February 21, 1947, and they had to take legal opinion as to what should be done with these goods and they had to advertise the goods for sale. The sale was advertised for March 11, 1947, and it was postponed to March 14, 1947, in order that all the 15 bales may be sold together. The only question is whether the price which the plaintiffs have given the defendants credit for in respect of the said 15 bales is a fair price. In my opinion the sale was a bona fide sale properly advertised and conducted, that it was the only proper method of selling off the goods, and the price is in consequence a fair and bona fide price which the plaintiffs realized in respect of the goods. The defendants have filed no counterclaim claiming damages in respect of conversion of these goods. That is natural when one remembers that the defendants' contention is that they had nothing to do with these goods. I answer issue No. 1 in the affirmative.

16. As regards issue No. 5, the re-sale was not a re-sale within the meaning of the Sale of Goods Act. But the actual re-sale as it took place is binding on the defendants in the sense that the price realized at the re-sale was a fair price. I answer issue No. 5 in the affirmative.

17. So far as the claim for interest is concerned, the Sale of Goods Act, Section 61, applies. I, therefore, award the plaintiffs interest but at the rate of 6 per cent, only instead of at the rate of 9 per cent, as claimed by the plaintiffs.

18. So far as the claim for Rs. 75-12-0 being charges of the advertisement for the first sale is concerned, Mr. K.T. Desai gives up his claim, in respect of the same.

19. In the result there will be a decree in favour of the plaintiffs for Rs. 20,794-7-6 with interest on Rs. 74,256-6-0 at the rate of 6 per cent, from February 6, 1947, till March 14, 1947, further interest on Rs. 20,794-7-6 at the rate of 6 per cent, from March 15, 1947, till judgment, costs of the suit and interest on judgment at 4 per cent. Costs to include costs of the chamber summons.


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