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Multanmal Chempalal Vs. C.P. Shah and Co. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 312 of 1965
Judge
Reported inAIR1970Kant106; AIR1970Mys106; (1969)2MysLJ499
ActsSale of Goods Act, 1930 - Sections 26
AppellantMultanmal Chempalal
RespondentC.P. Shah and Co.
Appellant AdvocateV. Tarakaram, Adv.
Respondent AdvocateS.G. Sundaraswamy, Adv.
Excerpt:
.....at chitradurga where quarrying business was obtained had jurisdiction to try suit but in view of section 16(d), cpc read with proviso to section 16 and section 20, courts at bangalore also have jurisdiction to try the suit. - 9. that being so, the contention that the goods were lost when they had not become the property of the plaintiff but continued to be the property of the defendant, cannot assist the plaintiff's claim if it otherwise has to fail under clause 7. and in my opinion, it has to, in that way......8 that property shall not pass until the full price paid does not arrest the passing of that risk. clause 7 is in truth an agreement to the contrary which controls the operation of the general rule which section 26 of the sale of goods act incorporates. 9. that being so, the contention that the goods were lost when they had not become the property of the plaintiff but continued to be the property of the defendant, cannot assist the plaintiff's claim if it otherwise has to fail under clause 7. and in my opinion, it has to, in that way. 10. there is also another reason why the plaintiff's claim must be negatived. the first proviso to section 26 says that where delivery has been delayed either because of the fault of the buyer or the seller, the goods are at the risk of the party in.....
Judgment:

1. The appellant is the plaintiff and his suit was for the recovery of a sum of Rs. 2,100 from the defendant from whom he agreed to purchase some quantity of cloth pieces for a sum of Rs. 1,449-12-3 towards which the plaintiff paid an advance of Rs. 50. The goods were despatched from Bombay to Bellary in a truck belonging to a public carrier on March 7, 1957, but the balance of the price payable by the plaintiff was paid only in May through a bank draft. Until then, there was a controversy with respect to a small sum of money which represented bank charges, the payment of which was insisted upon by the defendant but was refused by the plaintiff. Eventually the plaintiff paid that amount only in may nearly two months after the goods had been despatched through the public carrier. The defendant then on May 20, 1957 forwarded the necessary receipt on the presentation of which the plaintiff could collect the goods from the carrier, but the plaintiff could not obtain delivery of those goods, which by then, were missing. This suit was instituted in that situation for the recovery of the price paid by the plaintiff to the defendant.

2. The defendant resisted the suit on the ground that under the terms of the contract between the parties, the goods were at the plaintiff's risk after their despatch by the seller and that clause reads:

'If the goods are to be booked to up-country, the same will be done at the buyer's risk and no claim shall be entertained for any loss or damage.' It is not disputed that the despatch of the goods from Bombay to Bellary fell within this clause, and that if nothing else could be said about it, once those goods are despatched by the defendant from Bombay to the plaintiff, the defendant would beunder no liability to pay any compensation for their loss or destruction. That, was, the view taken by the two Courts below which dismissed the plaintiff's suit.

3. But in this appeal preferred by the plaintiff, Mr. Tarakaram advanced the contention that the courts below depended upon Clause 7 in isolation, without considering the effect of Clause 8, under which, according to Mr. Tarakaram, the goods continued to be at the seller's risk until the full price payable by the plaintiff was paid. That clause reads:

'Until the full payment of this bill is received the goods covered by this bill shall be the seller's property'.

4. It was contended by Mr. Tarakaram that under Clause 8 the goods continued to be the goods of the seller even after the goods had been despatched from Bombay since the price was paid by the plaintiff only in May 1957. Mr. Tarakaram also contended that the evidence discloses that the goods never reached Bellary and that they must have been lost in transit at a point of time when the seller was still the owner of the goods and the property in those goods had not yet passed to the buyer,

5. This was not the ground on which the plaintiff maintained his claim before the courts below and no issue was raised with respect to that matter. Even on the assumption that Clause 8 controlled the operation of Clause 7, what was necessary for the plaintiff to establish in order to sustain his dependence on Clause 8 was that the goods were lost before the plaintiff paid the price, and, with respect to that matter Mr. Tarakaram was unable to point out any evidence. It is obvious that the plaintiff did not at any stage attempt to support his claim in the way in which Mr. Tarakaram attempted to maintain it in this Court. So the question whether the goods continued to be the goods of the defendant when they were lost was one into which no investigation was made by the two courts below.

6. Moreover, it does not appear to me that the protection which the seller gave to himself under Clause 7 was to any extent controlled by Clause 8. All that Clause 8 states is the point of time when the property in the goods passes from the seller to the buyer. It speaks nothing about the responsibility for loss or destruction of the Roods even before the property in the goods passes to the buyer. On that question Clause 7 is complete and exhaustive. It says that once the goods are despatched by the seller, they shall be at the risk of the buyer who will not have any right to make any claim against the seller in respect of loss or damage. This condition in the contract is absolute and is to no extent subject to the provi-Provisions of Clause 8, and, Clause 7 is a contract to the contrary within the meaning of Section 26 of the Sale of Goods Act which reads:

'Risk prima facie with property. --Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer the goods are at the buyer's risk whether delivery has been made or not:

Provided that where delivery has been delayed through the fault of either buyer or seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault;

Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee of the goods of the other party.'

7. The clear meaning of this section is that prima facie the risk passes only with property, but the section authorises a contract to the contrary under which the risk passes even before the title to the property passes. So it is permissible for the contracting parties to enter into an agreement that although property does not pass, the risk passes and they may fix the point of time when it so passes.

8. In this case, the contract entered into between the parties with respect to that matter was that the risk passes to the buyer at the point of time when they are despatched by the seller to the buyer and that being so, the provision contained in Clause 8 that property shall not pass until the full price paid does not arrest the passing of that risk. Clause 7 is in truth an agreement to the contrary which controls the operation of the general rule which Section 26 of the Sale of Goods Act incorporates.

9. That being so, the contention that the goods were lost when they had not become the property of the plaintiff but continued to be the property of the defendant, cannot assist the plaintiff's claim if It otherwise has to fail under Clause 7. And in my opinion, it has to, in that way.

10. There is also another reason why the plaintiff's claim must be negatived. The first proviso to Section 26 says that where delivery has been delayed either because of the fault of the buyer or the seller, the goods are at the risk of the party in fault with respect to any loss which might not have otherwise occurred. In the case before me, it is obvious from the correspondence between the parties that the goods were despatched by the defendant as early as on March 7, 1957 as can be seen from Exhibit P-3, the carrier addressed a communication to the plaintiff on June 13, 1957 which stated that the goods so despatched reached Bellary within a few days, and that for aboutthree months they were lying In the octroi office obviously for the reason that during all the period the plaintiff was carrying on a vexatious correspondence with the defendant with respect to a small sum of money representing bank charges, although eventually it was only in May that he agreed to pay those charges.

11. So it was, that delivery could not be made to the plaintiff until May 20, 1957 on which date the necessary document of title was handed over to the plaintiff's representative in Bombay as can be seen from Exhibit P-2. It is quite reasonable to infer that the goods were lost some time between the middle of March 1957 when the goods must have reached Bellary and May 20, 1957 when payment in full was made by the plaintiff, and that during that period when the plaintiff was in default in resisting the demand for the payment of bank charges the goods must have been lost, is, I think, a fair and proper inference. That loss, it is obvious, would not have occurred if the plaintiff had not unreasonably delayed the payment of the bank charges during a long period of two months. So, on the admitted facts, it is obvious that the first proviso to Section 26 is attracted and the loss must be borne by the plaintiff, quite apart from the provisions of Clause 7 of the contract.

12. So I dismiss this appeal, No costs.

13. Appeal dismissed.


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