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Dharampal and Co., Agra Vs. Firm Kila Gatla Ram Chandra Rao and Co., Vizianagram - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 477 of 1969
Judge
Reported inAIR1980All316
ActsSale of Goods Act, 1930 - Sections 41, 44 and 56; Contract Act, 1872 - Sections 73; Code of Civil Procedure (CPC) , 1908 - Sections 100 to 101
AppellantDharampal and Co., Agra
RespondentFirm Kila Gatla Ram Chandra Rao and Co., Vizianagram
Advocates:V. Saha and ;B. Dayal, Advs.
DispositionAppeal allowed
Excerpt:
.....by the plaintiff. the second point was whether the contract was in respect of the goods of specific description and the plaintiff failed to satisfy the defendant about the quality of goods, if so, its effect. this was answered by holding that the goods contracted for purchase, were of specific description and the plaintiff failed to satisfy the defendant about the quality of the goods and as such was not entitled to any amount claimed by way of damages......the defendant about the quality of goods, if so, its effect. this was answered by holding that the goods contracted for purchase, were of specific description and the plaintiff failed to satisfy the defendant about the quality of the goods and as such was not entitled to any amount claimed by way of damages.5. i have heard mr. bhupeshwar dayal, learned counsel for the appellant. no one has appeared for the defendant-respondent although the notice was duly served on 19th october, 1977. even after personal service no one has appeared to represent the defendant.6. the question whether goods of specific description were contracted for sale would normally be a question of fact but where a question is raised as to whether the contract spelled out the supply of specific goods it will be open to.....
Judgment:

A. Banerji, J.

1. This is a second appeal by the plaintiff. The plaintiff's suit for recovery of Rs. 1,850/- as damages from the defendant-respondent firm was decreed by the trial Court with costs and pendente lite andfuture interest at the rate of 4% per annum. On appeal by the defendant the judgment and decree of the trial Court were set aside and the suit was dismissed with costs throughout. The plaintiff aggrieved by the above decision has come up in appeal.

2. Briefly stated the relevant facts are as follows. A contract was entered into between the parties by means of a telegram for the purchase of 250 bags of peas at the rate of Rs. 37/- per bag, deliverable F.O.R. at Vizianagram, The buyer namely the defendant-respondent indicated in the telegram that the peas should be triable at 6 1/2. This contract was arrived at on the 3rd February, 1962. On the same day a wagon was indented by the plaintiff for the despatch of goods. He received the wagon on 14th February, 1962 and loaded the peas and despatched the peas the same day. The wagon reached Vizianagram on 16th February, 1962, Meanwhile the plaintiff had also sent a Hundi to the defendant and despatched the R. R. (Railway Receipt) for collection through Bank. The defendant did not receive or accept the goods at Vizianagram and the defendant did not also honour the Hundi or take the R.R-from the Bank. The defendant's stand was that the peas sent were not of the contracted quality and therefore, he sought to repudiate the contract. The plaintiff had to send a messenger to Vizianagram who took delivery of the consignment of the goods after paying demurrage to the Railways and sold it to a local dealer at a lower rate with the result that he incurred loss in the price of the goods also. He, therefore, in this suit claimed a sum of Rs. 833/-as demurrage, Rs. 142/- as miscellaneous expenses and Rs. 875/- as the difference in price, totalling a sum of Rs. 1,850/-, The plaintiff's stand was that the defendant could not refuse to take delivery of the goods and was not entitled to repudiate the contract. He was afforded an opportunity of examining the goods but he did not avail of the same. The quality of the goods sent was according to the contract.

3. The stand taken in defence was that the goods were of inferior quality and unless the plaintiff satisfied the buyer that the goods were of the quality which he had contracted for he could not be compelled to take the goods and in any event was not liablefor any of the damages claimed by the plaintiff.

4. The trial Court held that the time was not the essence of the contract and the quality of the goods supplied was not inferior to the contracted quality, the plaintiff suffered damages as claimed and the Court had territorial jurisdiction to try the suit. Lastly, it was held that the plaintiff was entitled to the damages and the suit was accordingly decreed. The lower appellate court formulated two points for consideration. The first point was about the territorial jurisdiction of the Court at Agra to try the suit. This was held in the affirmative and in favour of the plaintiff. The second point was whether the contract was in respect of the goods of specific description and the plaintiff failed to satisfy the defendant about the quality of goods, if so, its effect. This was answered by holding that the goods contracted for purchase, were of specific description and the plaintiff failed to satisfy the defendant about the quality of the goods and as such was not entitled to any amount claimed by way of damages.

5. I have heard Mr. Bhupeshwar Dayal, learned counsel for the appellant. No one has appeared for the defendant-respondent although the notice was duly served on 19th October, 1977. Even after personal service no one has appeared to represent the defendant.

6. The question whether goods of specific description were contracted for sale would normally be a question of fact but where a question is raised as to whether the contract spelled out the supply of specific goods it will be open to this Court even in second appeal to examine the relevant material to see whether any specific goods had been agreed upon. There is no dispute that what had to be despatched was farm peas, a vegetable product. A perusal of the telegram, Ex. 2 shows that the offer was made by the defendant for the purchase of peas at not less than 6 1/2 annas triable. Cryptic wordings in the telegram read as follows :--

'Reed. accepting wagons 37 not less than 6 1/2 annas fryble Wire -- Dalls.'

The reply to this was sent by the plaintiff on the 3rd February, 1952 by the following telegram Ex. 3.

'Reed. accepted 250 peas farm shitted 37 triable 6 1/2 -- Pengoria.'

This completed the contract.

7. It is now clear from the perusal of the judgments of the Courts below that the expression 250 farm peas meant 250 bags of farm peas. The reference to 37 is regarding the rate F. O. R. per bag of farm peas. The quality was indicated by being 'triable' 6 1/2 annas. It appears from the material on record that the peas were required of a quality which were triable under the specification of 6 1/2 annas. It would be seen that it was not the external description of the product but something about its quality which could be ascertained by some further examination. The word 'triable' has been defined in the New English Dictionary of Historical Principles, Vol. IV as follows :

'Triable -- capable of being crumbled or reduced to powder, pulverizable, crumbly.'

The word 'friability' has been defined in the same dictionary as 'the quality of being triable'. From the dictionary meaning it is apparent that the matter must be triable and that can only be found out by making an attempt to do so. It is also clear from what appears in the above two telegrams, Exts. 2 and 3 that the external appearance of the peas could not be a correct criterion -- What was required to be ascertained was the friability of the peas and that could be seen after a proper examination and frying. In the present case the evidence on record shows that the defendant refused to receive the goods, what to say of taking delivery of the consignment. It has also come in evidence that the plaintiff's agent Kishan Singh had asked the defendant to examine the goods but the defendant had declined to do so. Section 41 of the Sale of Goods Act provides that a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract has to be afforded to the buyer. This opportunity is necessary where the buyer had no previous occasion to examine the goods. From the facts of this case it is evident that the buyer had no opportunity of examining the goods earlier. The contract was made on the telegram and the plaintiff despatched the goods without the buyer examining them at the despatching station. He could examine the goods at Vizianagram where thegoods were carried by the Railways, The buyer had been intimated about the despatch of the Hundi and the R. R. The buyer could obtain the R. R. after having retired the Hundi, He could thereafter examine the goods at the Railway premises after having received the goods. He did not retire the Hundi. He did not take the R. R. Consequently, there was no question of his examining the goods or coming to the conclusion that the goods were of an inferior quality or below the quality stipulated. It is only after he had received the goods that he could have examined them. He could not have repudiated the contract, but ask for damages for the breach of warranty. He did not do so, without examining the goods he took the stand that the goods were of an inferior quality than what was contracted for. The Court below has accepted this stand of the defendant. I find it a wholly incorrect approach in the circumstances of the. case. When the buyer had contracted the purchase of certain items of farm goods indicating a particular quality that quality could only be ascertained after visual and other inspection. It was his bounden duty to have received the goods, made the inspection and then if it was found to be of a quality inferior to that contracted for he could have sued for damages.

8. Section 41 of the Sale of Goods Act only gives a buyer a right of examining the goods and not a right to repudiate the contract. The right of inspection could only arise either when the consignee had taken the delivery from the carrier or when it was tendered for delivery to the buyer. Where the buyer was the consignee the question of affording an opportunity could arise only after the consignee received the consignment. Where the seller was the consignee, it was his duty to take delivery of the goods and give an opportunity to the buyer to inspect and examine the goods. It means that when the seller tenders the goods to the buyer he is bound to afford an opportunity for the inspection of the goods. In the present case the goods were loaded F.O.R. Vizianagram at the instance of the buyer. The Railway became the carrier and the agent for the buyer. The buyer, therefore, could not compel the seller to offer the goods for an examination at Vizianagram. That was not part of the contract. That could have been understood if the defendant had contracted with the plaintiff that the goods will be acceptable to him only after inspection at Vizianagram but such is not the case here. The goods were to be despatched F.O.R. along with the relevant papers which meant that the goods were entrusted to the carrier for being collected by the defendant at the destination. The buyer was obliged to receive the goods and make an examination and if he found that it was sub-standard or contrary to specification, he could sue for the refund of the price or sell the goods and sue for the damages.

9. In the case of G. N. Behere v. N. B. Rice Mills (AIR 1966 Assam 95) a Division Bench of the Assam High Court was considering a case of despatch of machinery from District Thana in the State of Bombay to Bongaigaon in Assam through Railway. The machinery was damaged in transit. The defendant refused to take delivery of the same. A question arose as to whether the defendant would be deemed to have taken delivery of the machinery when it was entrusted to a common carrier. The answer was in the affirmative. Reference was also made to Section 40 of the Act and it was held that where the seller undertakes to take the goods at his own risk to a place other than that where these are when sold and if any deterioration takes place in the course of transit the buyer would be liable for it. Reference was also made to Section 41 of the Act and it was held :

'This section only gives the buyer a right of examination. It does not give a right to the buyer to repudiate the contract. The right of inspection under this section can only arise either when the delivery has already been taken or when it is tendered for delivery. In the present case the respondent did not take delivery and thus Section 41(1) will not be attracted and if the argument of the respondent is accepted that it was tendered for delivery at the Railway Station when it reached Bogaigaon, the only right which could be exercised by the plaintiff under Section 41(2) was to ask for the inspection of the goods but he could not repudiate the contract and further that when the goods reached the destination under the Railway receipt, it cannot be said that they were tendered for delivery at Bongaigaon Station.'

10. In the case of Mahadev Ganga Prasad v. Gouri Shanker : AIR1950Ori42 a Division Bench of the Orissa High Court considered the question of Section 41 of the Sale of Goods Act, in a case where a contract of five bales of sarees was entered into. The consignment was despatched through Railways to be collected through a Bank. The Division Bench observed :

'There was, therefore, delivery of the goods to the purchaser under the terms of the contract and the only right of the purchaser thereafter was the right to examine the goods as provided for under Section 41 of the Act. That section makes a distinction between the delivery of the goods to the buyer and his acceptance of the same after examination. There is, however, no provision for the buyer to refuse to receive the goods. He may receive the articles and yet not accept them. The plaintiff's case that he was justified is not receiving the goods at all, does not find support either from the express terms of the contract, as stipulated between the parties, or from any of the provisions of the Sale of Goods Act.'

11. The lower Appellate Court has referred to the case of In re Firm Beharilal Baldeo Prasad (AIR 1965 Mad 271) where the Court had occasion to consider the provisions of Sections 16, 17 and 41 of the Sale of Goods Act. It was observed :--

'These sections show that even after the buyer has a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract and even when such an examination has taken place it might still be open to the buyer to reject the goods when they are not in conformity with the contract because of some defect which was not apparent on such examination. Examination of the goods is considered necessary before delivery of goods can amount to acceptance.'

12. The above observation does not run counter to the view expressed earlier. The examination of the goods before delivery is essential. The evidence in the present case shows that the defendant buyer refused to examine the goods. Under the circumstance the buyer cannot be heard to say that the goods were of an inferior quality. The finding of the trial Court is that the goods were of the requisite quality. This finding has not been varied by the lower Appellate Court in so many words. If this finding stands, then the defendant cannot have any complaint. Two things stand out. Firstly, that the goods were not of inferior quality and secondly the buyer was asked to inspect the goods. He did not do so. It is thus that the buyer could have inspected only after retiring the Hundi and obtaining the R. R. from the Bank. It, therefore, became necessary for him to inspect the goods after obtaining the R. R. The consignee was the buyer and not the plaintiff. Consequently, it was necessary for the buyer to inspect the goods and then indicate whether he accepted the same or not. If he did not accept then he had to proceed in accordance with the provisions of the Act and claim the amount which he had spent for retiring the Hundi, but he could not repudiate the contract straightway.

13. For the reasons indicated above, the decision of the Court below is based on an erroneous approach to the question of law and the liability. In my opinion, the judgment of the lower Appellate Court cannot, therefore be sustained and must be set aside. The judgment and decree of the trial Court must, therefore, be restored.

14. In the result, therefore, the appeal succeeds and is allowed. The judgment and decree of the lower Appellate Court are set aside and those of the trial Court are restored. There will be no order as to costs.


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