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The Province of Madras Vs. C.A. Galia Kotwala and Co., Ltd. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai
Decided On
Reported inAIR1946Mad69; (1945)2MLJ418
AppellantThe Province of Madras
RespondentC.A. Galia Kotwala and Co., Ltd.
Cases ReferredHeilbutt v. Hickson
Excerpt:
- - officer a letter stating that it was in a position to supply best quality of canvas hose according to a sample sent with the letter at rs. it is unnecessary for the purposes of this case to decide whose recollection is the better. the first sample was of excellent quality. 18. even if it cannot be said that there was acceptance of the goods, the failure on the part of the plaintiff to reject them until the 7th july, 1942, puts the plaintiff out of court. the law which applies to the facts here is clearly stated in section 42 of the sale of goods act......1942, but these goods were not paid for. the rs. 24,982-6-0 represented the price of the 7,986 feet supplied up to the 8th may, 1942. the defendant brought a counter-claim for the price of the goods delivered and not paid for, the amount being rs. 6,559-13-0. the learned trial judge (charidrasekhara aiyar, j.) held that the goods supplied were of inferior quality and consequently the plaintiff could have rejected them, but it had in fact accepted them; in any event the right of inspection and rejection was not exercised within a reasonable time. the plaintiff included in the plaint an alternative plea for damages for breach of warranty of quality. the learned judge was of the opinion that there was no evidence on the record on which such damages could be assessed and he rejected this.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. The plaintiff in this action and the appellant in the appeal is the Government of Madras. It sued on the Original Side of this Court to recover from the respondent, a limited liability company trading in fire hose pipe, the sum of Rs. 24,982-6-0, moneys which it had paid to the defendant for goods supplied, the allegation being that the goods had proved to be of inferior quality. The contract was for the supply of 10,000 feet of hose. The hose was delivered in instalments between the 28th April, 1942 and the 3rd June, 1942. By the 8th May, 1942, the defendant had delivered 7,986 feet and had received payment in full for this quantity by the 15th May, 1942. The balance of the contract was delivered in three instalments between the 19th May, 1942 and the 3rd June, 1942, but these goods were not paid for. The Rs. 24,982-6-0 represented the price of the 7,986 feet supplied up to the 8th May, 1942. The defendant brought a counter-claim for the price of the goods delivered and not paid for, the amount being Rs. 6,559-13-0. The learned trial Judge (Charidrasekhara Aiyar, J.) held that the goods supplied were of inferior quality and consequently the plaintiff could have rejected them, but it had in fact accepted them; in any event the right of inspection and rejection was not exercised within a reasonable time. The plaintiff included in the plaint an alternative plea for damages for breach of warranty of quality. The learned Judge was of the opinion that there was no evidence on the record on which such damages could be assessed and he rejected this plea also. As he held that the plaintiff had accepted the goods, he gave the defendant a decree for the amount of the counter-claim.

2. It is necessary to set out the facts in detail. On the 13th January, 1942, the defendant wrote to the Special A.R.P. Officer a letter stating that it was in a position to supply best quality of canvas hose according to a sample sent with the letter at Rs. 1-13-6 per foot, F.O.R., Madras, delivery to be from its ex-Bombay stock, subject to prior sale. On the 17th January, the defendant wrote a letter to the Deputy Commissioner, Madras Fire Services, stating that the hose would be supplied in cotton canvas ply of 18 or 24 and that the company was in a position to supply about 1000 feet of hose pipe from its ex-Bombay stock, subject to prior: sale. On the 20th January, the Deputy Commissioner placed an order with the-defendant for 500 feet of 24 ply canvas hose for the purpose of testing it. On the 26th January, the defendant delivered 310 feet of this hose and stated that the balance of the 500 feet would be delivered shortly. On the 18th February, the; Deputy Commissioner wrote cancelling the order so far as it concerned the balance of 190 feet. Between the 26th January and the 18th February it had been ascertained that the hose leaked and was therefore unsuitable for the purposes - of the Madras Fire Services. On the 26th March, the defendant wrote stating that they could supply canvas hose, 2 1/2 inches by 24 ply,.which was of superior quality.

3. On the 11th April, the Deputy Commissioner sent 100 feet of the 310 feet of hose which was supplied on the 26th January, to the Buckingham and Carnatic Mills in order that it might be ascertained whether it would be possible to 'rubberize ' the inside of the pipe, and it was discovered that this could be done and, when done, the rubberization made the hose serviceable.

4. On the 21st April, Mr. Gray, the Chief Fire Officer, had an interview with Mr. P.S. Krishnamurthy, the defendant's manager. According to Mr. Gray, he disclosed to Mr. Krishnamurthy that it was possible to render the hose serviceable by rubberization inside the pipe and that he intended to place an order for hose of the same quality as that of the 310 feet supplied on the 26th January. According to Mr. Krishnamurthy nothing was said with regard to the matter of rubberization. It is unnecessary for the purposes of this case to decide whose recollection is the better. For the purposes of this case we will assume that the matter of rubberization was discusssed at this interview and that Mr. Krishnamurthy fully understood that the plaintiff intended to have all the hose supplied treated in this way.

5. On the same day the defendant wrote to the Assistant Commissioner saying that the company could supply any quantity of 2 1/2 inches cotton hose, 24 ply, from its Bombay stock at Rs. 2-14-0 per foot, the quality to be similar to that first supplied. On the following day the Deputy Commissioner wrote to the defendant as follows:

Referring to your representative's letter, dated 21st April, 1942 (Sri P.S. Krishnamurthy), kindly arrange to deliver urgently at the Fire Service Headquarters, 10,000 feet of cotton 24 ply hose at Rs. 2-14-0 per foot quality similar to your last supply. This order may be treated as very urgent..

6. The price to be paid was higher than that charged for the 310 feet, but what is important is that the quality was to be the same. On the 28th April, the defendant wrote to the Deputy Commissioner thanking him for the order for 10,000 feet of hose and sent to him as the first instalment of the order 450 feet. The letter stated that the balance of the contract would be executed ' part by part' as early as possible. As we have indicated, the 10,000 feet of hose was supplied in seven instalments, spread over the period from the 28th April, 1942 to the 3rd June, 1942.

7. In the Court below it was not suggested that the letter of the 22nd April embodied an entire contract, but in this Court the point has been taken. We consider that it is a fallacious one. The request for 'urgent delivery' did not in itself visualise delivery in one lot, and the defendant's letter of the 28th April shows that delivery could not be given in one lot. It is manifest that the plaintiff was quite willing to take delivery in instalments, provided that the deliveries were made as soon as possible. In this connection we may draw attention to a letter of the 23rd April, written by the defendant's Madras office to the Bombay office, in which it was stated that instructions had been received to confirm the order for 10,000 feet of cotton hose, 2 1/2 inches X 24 ply, for supply 'in parts' at Rs. 2-14-0 per foot. It is also significant that the plaintiff paid in full for the first two instalments on the 7th May, and the next two instalments on the 15th May, and that each instalment was accompanied by a letter from the defendant company stating that if the goods were not approved, it must be informed of the fact within three days, otherwise it would not take the goods back.

8. On the 19th May the Deputy Commissioner sent to the Buckingham and Carnatic Mills for rubberization 8,069 feet of the hose of which he had received delivery. On the 3rd June the managing agents of the Buckingham and Carnatic Mills wrote to the Deputy Commissioner the following letter:

We find that the 8,069 feet of hose delivered to us for rubberizing on 21st May, 1942, is of inferior construction to the original 100 feet length sent on 17th April, 1942. The followimg is a comparison

Weft threads per inch. Warp Counts. Weft Counts.

Original 100 feet 12 8/19s 24/195

Present supplies 13 4/14-1/23 24/305

9. If the present supplies are supposed to be of the same quality as the first sample, you should have a substantial claim on the manufacturers in respect of the lower quality now supplied,

10. The present supply is a much lighter hose and causes much difficulty in processing and successful results cannot be guaranteed. The first sample was of excellent quality.

11. We suggest that you inspect the hose at the mills and decide whether the results so far as obtained are likely to be satisfactory. In the meantime, we are processing no more.

12. On the 7th July the Director, Fire Services, wrote to the defendant drawing attention to the defective quality and stating that the whole of the consignments had been found to be unsatisfactory. He went on to ask that the hose delivered should be replaced by hose of the same quality as that of the original 310 feet. No reply was received to this letter, nor to further letters on the subject written on the 20th July, 5th August, and 18th November, 1942 and the 4th January, 1943 and the 4th February, 1943. On the 5th April, 1943, the Government Solicitor wrote to the defendant and to this a reply was sent on the 14th April. In the reply the defendant averred that the goods were of the contract quality and that the goods supplied had been unequivocally accepted. Attention was drawn to the statement in each of the letters accompanying delivery to the effect that only three days would be allowed for rejection. It was in these circumstances that the suit was filed.

13. There was much argument in the Court below and there has been some argument in this Court on the question whether there is a difference between canvas hose and cotton hose. The 310 feet supplied on the 26th January was described as canvas hose. The letter of the Deputy Commissioner of the 22nd April placing the order for 10,000 feet spoke of cotton hose. The Court is not called upon to decide whether there is or there is not a difference between canvas hose and cotton hose. What the plaintiff stipulated for and what the defendant undertook to supply was hose of the same quality as that of the 310 feet. If the deliveries under the contract in suit were not of that quality, then the defendant was in breach and the plaintiff had its remedy, provided that the goods were not accepted or were rejected within a reasonable time.

14. The evidence of Mr. Hill, the rubber expert, and of Mr. Molyneaux, the textile expert, of the Buckingham and Carnatic Mills, which has been accepted by Chandrasekhara Aiyar, J., and is accepted by us, shows that the goods supplied were inferior to the sample, and the plaintiff would have been justified in rejecting them. It has been argued by the learned Advocate-General that the contract implied that the hose should be fitted for rubberization by the process employed by the Buckingham and Carnatic Mills. This is going much too far. The record does not lend support for the suggestion that Mr. Krishnamurthy agreed to supply hose which was fitted for that process or for any other process. It transpired, however, in the course of the examination of the plaintiff's witnesses that the hose in fact supplied was capable of satisfactory rubberization by another process, that employed by a factory in Trivandrum; but we need not pursue this matter further because there was no warranty that the hose would be suitable for rubberization. What we have to consider is whether the plaintiff accepted the goods without reservation and, if not, whether it rejected them within a reasonable time.

15. Section 42 of the Sale of Goods Act says that the buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them or when the goods have been delivered to him and he does an act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. There was here no intimation on the buyer's part that he had accepted the goods; but did the buyer do something in relation to them which was inconsistent with the ownership of the seller, and/or did he intimate his rejection of them after the lapse of a reasonable time?

16. We agree with Chandrasekhara Aiyar, J., that the plaintiff did accept the goods delivered under this contract. As we have pointed out, each instalment was accompanied by a letter requiring rejection, in case of rejection, to be intimated within three days. This was not done. The plaintiff paid in full for the first four instalments soon after the goods had been received and the fact that the plaintiff sent this large quantity of the goods to the Buckingham and Carnatic Mills for rubberization in itself is inconsistent with the ownership of the sellers. If a small quantity had been sent for testing purposes the position might perhaps have been different.

17. Mr. Molyneaux's evidence shows that the defect in quality could have been ascertained by looking at the goods. But, instead of having them examined by an expert as and when they were delivered, the plaintiff allowed them to accumulate until a greater part of the contract had been fulfilled and paid for them. We consider that the evidence amply justifies the finding that the plaintiff did in fact accept the goods. There was, no doubt, lack of care on the part of the plaintiff's servants. If they had taken proper steps, they would have quickly ascertained that the goods were of inferior quality; but no such steps were taken.

18. Even if it cannot be said that there was acceptance of the goods, the failure on the part of the plaintiff to reject them until the 7th July, 1942, puts the plaintiff out of Court. We will assume that the plaintiff was acting within its rights in having an examination of the goods made at the Buckingham and Carnatic Mills; but that right would avail the plaintiff of nothing unless it was promptly exercised. The goods were not sent for processing to the Buckingham and Carnatic Mills until three weeks after the receipt of the first instalment and eleven days after the receipt of the fourth instalment, all of which had been paid for. The defendant had, without protest, insisted on the right of rejection being exercised within three days. The rejection did not take place until the 7th July, 1942 and therefore not in our judgment within a reasonable time.

19. We hold that the plaintiff's claim fails for these reasons :--(i) It accepted without reservation the goods and (ii) even if there was no acceptance, the rejection of the goods took place after a reasonable time had elapsed for their inspection and examination.

20. The learned Advocate-General has referred to several reported cases and has laid emphasis on the judgment in Heilbutt v. Hickson (1872) L.R. 7 C.P. 438. The facts of all the cases quoted are entirely different from the facts of this case. The law which applies to the facts here is clearly stated in Section 42 of the Sale of Goods Act.

21. The learned Advocate-General has very properly not pressed the alternative claim for damages for breach of warranty. As the learned Judge has pointed out, there is no evidence on the record on which such damages could be assessed.

22. On our findings the defendant was rightly granted a decree for the price of the goods delivered and unpaid for.

23. The appeal is dismissed with costs.


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