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In Re: Beharilal Baldeoprasad Firm of Merchants by Partner Tagoor Prasad and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 1649 of 1953
Judge
Reported inAIR1955Mad271
ActsProvincial Small Cause Courts Act, 1887 - Sections 25; Code of Civil Procedure (CPC) , 1908 - Sections 20 and 115; Sale of Goods Act, 1930 - Sections 15, 16, 17 and 41
AppellantIn Re: Beharilal Baldeoprasad Firm of Merchants by Partner Tagoor Prasad and ors.
Advocates:A. Shanmughavelu, Adv.
DispositionRevision dismissed
Cases ReferredJawarmal Shivanath Maiu v. Haji Ibrahaim Kassam Uplitwala
Excerpt:
.....other words, section 41 gives the buyer a right of inspection and unless he has bad an opportunity of exercising that right, he is not deemed to have accepted the goods and had a right to reject them and therefore till the goods are inspected and accepted, it cannot be stated mat the relationship of buyer and seller has become extinguished and the relationship of debtor and creditor or of principal and agent alone remained to be considered. in other words, contract to buy does not immediately transfer ownership but only when goods are found by buyer to be in good condition or when he has accepted them......with reference to quality, it would be the duty of the seller to prove that the goods were of the quality contracted for: -- 'chandmull mulchand v. s. & c. nordlinger', air 1824 cal 490 (zl). the defendant has not discharged that burden in this case. 14. on these findings we have to further decide whether the suit should be laid for return ofthe advance amount in the tuticorin court or inthe kanpur court. in -- 'lakshmipathi naidu v.mohamed ghani air 1947 mad 83 (z2), horwillj. held that 'a suit for breach of contract can be filed at any place where the contract should have been performed in whole or in part. a suit for damages for breach can be filed at the place either where the goods were deliverable or the price payable. part of the cause of action arises where the price is to be.....
Judgment:
ORDER

Ramaswami, J.

1. This is a revision petition which is sought to be filed against the decree and Judgment of the learned Additional Subordinate Judge of Tuticorin in S. C. S. No. 504 of 1953.

2. The facts are: On 27-10-1949 the plaintiff, 'a merchant at Tuticorin, placed a telegraphic order with the defendants' firm at Kanpur for one wagon of 'dry peas dhall superior without broken or dankie'. The first defendant accepted the order and contracted to supply the goods specified. On 7-11-1949 the plaintiff remitted a sum of Rs. 1000 through the Central Bank of India to the defendants as advance of the sale price of the contracted goods. On the goods arriving at Tuticorin the plaintiff inspected the goods and found them to be Inferior, broken and dankie mixed with husk. Thereupon the plaintiff called in Sri Subbier, P. W. 2, the defendants' Tuticorin representative, and he inspected the goods and satisfied himself that the complaint of the plaintiff was well founded. The plaintiff refused to accept the delivery of the goods and telegraphed his refusal and demanded return of the advance amount of Rs. 1000.

3. The reply of the defendants was two-fold, viz., that there was no breach of contract because the defendants wired to the plaintiff under Ex. A.5 that they had 'purchased one wagon of pokhrayan dried peas dhall forty three twelve' and the plaintiff wired to the defendants under Ex. A.6 that the purchase of pokhrayan dhall was acceptable if dried without polish and broken and that the defendants have replied to the plaintiff under Ex. B.3 that they had purchased pokhrayan peas dhall dry without polish and of good quality end asked for confirmation and that the plaintiff confirmed the same under Ex. B.2 and that what reached Tuticorin railway station was that; and secondly, that no part of the cause of action arose in Tuticorin and that the suit should have been filed in Kanpur.

4. The learned Subordinate Judge held against the defendants on both the points and decreed the suit and hence this revision petition.

5. Point 1: Under S. 25, Provincial Small Cause Courts Act, the High Court can interfere when the decision of the Court below is not in accordance with law or to prevent substantial injustice or miscarriage of Justice. The High Court has wider Jurisdiction under this section in entertaining revision applications than under the provisions of S. 115, Civil P. C. But where the evidence makes it clear that a question of fact was gone into by the Judge and this decision is apparently in accordance with the evidence, the High Court will not usually interfere in revision merely because it is possible to take a different view of the evidence to that of the court below. The decision of the Small Cause Court should not be interfered with in revision though it may appear even to be erroneous unless the conclusion is one which no Judge acting judicially could reasonably reach: (-- K.V. Narayanarao v. Muhammad Isakhan', C. R. P. No. 388 of 1946 D/- 18-4-1947 (A), (Gentle J.); --'Doraiswami Nadar v. Sivanupandla', AIR 1944 Mad 181 (B); -- 'Meenal v. Govindaswami Naidu', AIR 1927 Mad 900 (C); -- 'M. & S. M. Rly. Co. Ltd. v. Subbarao', AIR 1920 Mad 512 (D); -- 'In re, Ganapathi Pillai', 19I2 1 Mad WN 181 (E); --'Govindaswami Pillai v. Ramaswami Aiyar' AIR 1917 Mad 735 (P) and -- 'Gopala Iyengar v. Venkatakrlshna Iyengar', 1912 MWN 1227 (G).

6. The facts of the instant case show that not only has the learned Subordinate Judge gone into the evidence thoroughly, but his conclusion is also in accordance with the evidence. I have already adverted to the telegraphic order placed on 27-10-1949 and the subsequent wires Exs. A.5, A.6 and B.3. On not receiving the goods till 22-11-1949 after remitting the advance on 7-11-194S, the plaintiff sent a wire Ex. A.7 dated 22-11-1949 cancelling the contract. The defendants replied by wire Ex. A.8 that the goods had been sent On the previous day. On 7-12-1949 the plaintiff sent the telegram Ex. A.9 in which he informed the defendants that he would pay the peas dhall hundi only after inspecting the goods. Then the subsequent facts narrating the arrival of the goods, inspection by the plaintiff and by the defendants' representative and their rejection of the same and intimation to the defendants have already been set out.

These facts clearly show that far from there being any variation in the original contract entered into between the parties, the defendants have unconditionally contracted throughout for the supply of goods of the description and specification contained in the telegrams of the plaintiff and from which it cannot be spelt that the plaintiff agreed to the supply of inferior, broken and worm-eaten peas dhall. That the dhall which, was received at Tuticorin was found to be inferior, broken and worm-eaten and full of husk has been proved through the evidence of the plaintiff and the Tuticorin representative of the defendants Sri Subbier and the prompt intimation of the same to the defendants. The inspection in this case was made by piercing at the railway station the bags of dhall with needle and extracting samples. If the. defendants considered this allegation on which refusal to take delivery was made was false they would have Invited the local Chamber of Commerce to inspect and report the results. Therefore, the learned Subordinate Judge was fully justified in accepting the evidence of P. Ws. 1 and 2 and answering this point against the defendants.

7. Point 2: The relevant sections under the Indian Sale of Goods Act are Sections 15, 16 and 41. (For Section 15 analogous law: Section 13 English sale of Goods Act; Section 113 Indian Contract Act, 1872; for 'Section 16, Section 14, English Sale of Goods Act, 1893 and Sections 110-111, 114-115, Indian Contract Act, 1872; for Section 41, Section 39 English Sale of Goods Act, Section 38(2), Indian Contract Act). Section 15 lays down that a contract for sale of goods may be (i) by description. (ii) by sample and (lit) by sample as well as by description. The first case is dealt with by Section 16, and the second case is dealt with by Section 17. The sale of goods by description may have reference to the quality of the goods. To that extent the goods must satisfy the conditions as to quality. In the case of food stuffs where they are purchased by description an implied condition as to their being sound and of merchantable quality may also arise. (See Section 111, Indian Contract Act). The phrase merchantable means that the article is of such quality that a reasonable man acting reasonably would after full examination accept it under the circumstances of the case in the performance of his offer to buy that article whether he buys for his own use of to sell again: -- 'Bristol Tramways and Carriage Co. v. Fiat Motors', 1910 2 KB 831 (H). The question as to whether a particular article was selected by the buyer or the seller may or may not be important. Its relevancy arises only for ascertaining whether the buyer relied on his judgment in selecting the article or relied on the skill of the seller's skill as to its wholesomeness: -- 'Rinladl v. The Mohican Co.', 1918 225 N. Y. R 70 (I).

In any event the civil law holds that the warranty enters into and forms an Integral part of the contract of sale itself. An Implied warranty being a part of the contract to which it attaches itself is the law's contribution to the welfare of the parties beyond the terms of the contract itself. It Is a legal fiction intended to prevent the seller from loading a fraud on to a contract, which by its terms will not be able to combat the fraud: -- 'S.F. Browser Co. Inc. v. Neccormack', 1930 230 N. Y. ADR303 (J); -- 'Bekkevold v. Potts', 173 Minn 87 (K).

8. In this case it stands to common sense that the Tuticorin market will not absorb inferior quality broken and worm-eaten dhall mixed with husk. That is why the local representative Sri Bubbler has written Ex. B. 12 in which he has tactfully mentioned that if dhall of this description supplied was avoided the sales of the defendants' dhall could be pushed up in the Tuticorin market. In other words, the representative has politely pointed out to his firm that if they did not want to sell dhall in Tuticorin market this was the precise way of doing it. The condition of the article being reasonably fit for a purpose may be implied from the nature or description of the article itself as in this case. Only goods corresponding to the quality stipulated for by the plaintiff's firm could sell as dhall. Therefore, the seller was bound to supply goods in conformity with the contract and of merchantable quality and this was not: found to be the case on examining the goods. For the few Indian cases on this subject see -- 'Bombay Burmah Trading Corporation v. Aga Mahomed', 34 Mad 453, (L); -- 'In reAndrew Yale and Co.', AIR 1832 Cal 879 (M); --'Bansilal Ramratan v. Ramchand Tolarami, AIR 1930 Lah 843 (N); -- 'Dr. Baretto v. T. R. Pruce,AIR 1939 Nag 19 (O); and cases decided underSections 110, 111, 414, 115, Indian Contract Act, --'Peermohamed v. Dalooram', AIR 1919 Mad 728(P); -- 'Malli and Co. v. A. A. R. Farm', AIR 1923 Mad 252 (Q); -- 'Hubert John Amies v. Jal P. Virji', AIR 1924 Bom 41 (R); -- 'Mackellop v.Noorbhoy and Sons', AIR 1929 Sind 161 (S);-- 'Agha Mirza Nasarali Khoyee & Co. v. Gordon.Woodroffe & Co. (Madras) Ltd., AIR 1937 Mad 40 (T).

9. The next question which arises for consideration is the buyer's rights on examining the goods The seller is bound to deliver the goods in conformity with the contract, and the buyer before acceptance is entitled to see whether the condition has been fulfilled by the seller. Deli-very to the buyer does not necessarily mean that he has accepted the goods. He is required to accept the goods under Section 42 of the Indian Sale of Goods Act only after he has actually examined them, or, at any rate, had a reasonable opportunity of examining them. Sub-section (1) of Section 41 defines that right. Sub-section (2) of Section 41 is based upon the English case -- 'Isherwood v. Whitmore', 1843 11 M & W 347 (U). In that case the defendants, having received notice that the goods were at a certain wharf ready for delivery on payment of the price, went there, but on application to Inspect the goods were shown two closed casks said to contain them. It was held that no sufficient opportunity was given to the buyer to examine the goods and the plaintiff, therefore, had not made a valid offer for delivery. This rule has been followed under Section 38(2), Indian Contract Act: -- 'Ruttonsey Morarji. v. Jamnadas Pitambardas', 6 Bom 692 (V).

10. The Sale of Goods Act provides for the examination of the goods under Sections 41, 16 and 17. These sections show that even after the buyer had 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 where 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. But it does not necessarily mean that an . examination of the goods would always lead to an acceptance of the goods or that there should be no acceptance of goods unless there Is an opportunity of examination or there is an actual, examination of the goods by the buyer. This is a right of the buyer and the buyer might stipulate to dispense with it or may otherwise waive it. If the buyer had an opportunity to examine the goods, the seller is not responsible if later on the goods are found to be unmerchantable. The buyer must take the consequence of his own careless-ness; AIR 1919 Mad 728 (P) .

11. Prima facie the place and the time of examination are the time and place of delivery:

--'Perkins v. Bell', 1893 1 QB 193 (W); -- 'Nagardas v. Vel Mohamed : AIR1932Cal879 . In other words, Section 41 gives the buyer a right of inspection and unless he has bad an opportunity of exercising that right, he is not deemed to have accepted the goods and had a right to reject them and therefore till the goods are inspected and accepted, it cannot be stated mat the relationship of buyer and seller has become extinguished and the relationship of debtor and creditor or of principal and agent alone remained to be considered. In other words, contract to buy does not immediately transfer ownership but only when goods are found by buyer to be in good condition or when he has accepted them. -- 'Ramdeyal Ram Narain v. Bhairo Bux', : AIR1924Pat240 (Y).

12. On rejection of the goods as not answerring to description the buyer if he has paid for them is entitled to recover from the seller the price as money had and received for his use: --Tukaram v. Deoti', AIR 1920 Nag 34 (Z). The form of this suit is therefore irreproachable.

13. Ordinarily when there is a dispute, between a buyer and a seller with reference to quality, it would be the duty of the seller to prove that the goods were of the quality contracted for: -- 'Chandmull Mulchand v. S. & C. Nordlinger', AIR 1824 Cal 490 (Zl). The defendant has not discharged that burden in this case.

14. On these findings we have to further decide whether the suit should be laid for return ofthe advance amount in the Tuticorin Court or inthe Kanpur Court. In -- 'Lakshmipathi Naidu v.Mohamed Ghani AIR 1947 Mad 83 (Z2), HorwillJ. held that

'a suit for breach of contract can be filed at any place where the contract should have been performed in whole or in part. A suit for damages for breach can be filed at the place either where the goods were deliverable or the price payable. Part of the cause of action arises where the price is to be paid.'

In -- 'Venkatachalam Pillai v. Rajaballi M. Sajun', AIR 1935 Mad 663 (Z3) the facts were: The plaintiff, who was a resident of Tuticorin, sued the defendant, who carried on business at Rangoon, to recover damages on account of short fall and inferiority of quality of certain goods gold by the latter to him. It appeared that the goods purchased by the plaintiff were to be paid for by hundies and against bills of lading in favour of the defendant at Tuticorin by honouring the bills at the particular place. Held: that part of the cause of action arose at Tuticorin And the Court of that place had jurisdiction to try the suit; and the fact that the defendant obtained payment by endorsement of the hundies at Rangoon would not deprive the Tuticorin Court of its jurisdiction to try the suit. In -- 'Jawarmal Shivanath Maiu v. Haji Ibrahaim Kassam Uplitwala, Firm', : AIR1950Mad768 (Z4), Mack J. Held:

'The law presume delivery to the buyer on aC. I. F. or F. O. R. contract at the time of theconsignment on the basis that goods accordingto sample are being consigned. If the sellerfalls to supply goods according to sample ordishonestly supplies goods of another description, the buyer in law has a right to refuse acceptance. Therefore it cannot be said that no part of the cause of action arose in the place where the buyer made the discovery that the goods consigned were not according to sample. The District Munsif's court in that place has clear Jurisdiction to try a suit resulting from damages alleged by reason of the breach of the implied contract underlying the C. I. P. of F. O. R. contract that the goods supplied would be in accordance with the particular sample or description. It would be strange in law that if a merchant in Madras orders goods from Bombay P. O. R. or C. I. F., pays for them and finds on opening the consignment sent to him that they are not according to sample or of an entirely different description, he should tie compelled to go to the court within whose jurisdiction the seller lives arid sue him there.'

Therefore, the learned Subordinate Judge rightly held that the suit can be filed In Tuticorin.

15. This revision petition does not merit ad-mission and is hereby dismissed.


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