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A.K. Abdul Azeez Vs. V.C. Ramalingam and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 164 of 1958
Judge
Reported inAIR1961Mad281
ActsSale of Goods Act, 1930 - Sections 39; Contract Act, 1872 - Sections 73
AppellantA.K. Abdul Azeez
RespondentV.C. Ramalingam and ors.
Appellant AdvocateV.S. Rangachari, Adv.
Respondent AdvocateC. Vasudevan, Adv.
DispositionAppeal allowed
Excerpt:
.....law term relating to carriage of goods specifically inserted in contract of sale is unessential term of contract - in present case only term contained in contract was transport by rail - respondent found guilty of breach of contract as his principal did not send goods in conformity with contract - appellant not bound to accept goods sent without prior sanction through sea route - decree for damages against appellant cannot be sustained. - - the appellant wanted an assurance that the goods would reach him in good condition without pilferage, and that any loss in that account should be compensated by the seller. both the trial as well as the appellate judges proceeded on the footing that ex. it was perfectly open to the appellant to stipulate his terms, when a different method of..........prevented them front adhering to the terms of the contract. in august, 1949, they sent by ship the goods agreed to be purchased, and sent the appellant the relative invoice with a request to honour the bill. the appellant did not pay the bill or receive the document, as he was not sure that he would get the goods undamaged and intact under a sea transport. correspondence followed between the parties.the appellant wanted an assurance that the goods would reach him in good condition without pilferage, and that any loss in that account should be compensated by the seller. the correspondence and negotiations that followed led to a delay, and the appellant further insisted as a condition of his paying the bill that there should be a guarantee from the respondent to compensate him in respect.....
Judgment:

Ramachandra Iyer, J.

1. The appellant entered into a contract with the respondent who was the agent of the Maya Engineering Works, Calcutta, on 27-5-1949 for the purchase of 42 pumps. An advance-of Rs. 100 was paid on the date of the contract The balance of the purchase money was agreed to be paid against the delivery of railway receipt which was to be sent through the respondent's banker. The terms of the contract were that the goods should be sent by train to the Madras Salt Cotaurs, and that the responsibility of the same was to cease with the delivery of the goods to the carrier at Calcutta.

The Maya Engineering Works did not, however, send the goods by rail. It is unnecessary now to ascertain the reason which prevented them front adhering to the terms of the contract. In August, 1949, they sent by ship the goods agreed to be purchased, and sent the appellant the relative invoice with a request to honour the bill. The appellant did not pay the bill or receive the document, as he was not sure that he would get the goods undamaged and intact under a sea transport. Correspondence followed between the parties.

The appellant wanted an assurance that the goods would reach him in good condition without pilferage, and that any loss in that account should be compensated by the seller. The correspondence and negotiations that followed led to a delay, and the appellant further insisted as a condition of his paying the bill that there should be a guarantee from the respondent to compensate him in respect of demurrage payable, and also for the over due interest, in respect of the unpaid purchase money; the respondent offered that, if there was any defect, in the goods on account of defective manufacture, they would replace them, but they did not agree to bear the loss in transit, whether due to pilferage or other causes.

From the correspondence, it is clear that the appellant was ready to take delivery of the goods if the respondent would meet his demands regarding compensation. The respondent, on the other hand, insisted that the responsibility of the supplier ceased with putting the goods on board the ship and all risks, demurrage, etc. would have to be taken by the appellant. Further correspondence did not induce the parties to change, their respective attitudes.

The appellant finally repudiated the claim of the respondent on the ground that, as the latter had not acted up to the terms of sending the goods by train, but instead sent than by steamer, he was absolved from all obligations under the contract, but that the respondent being guilty of breach in not sending the goods in accordance with the contract, was answerable in damages to him, besides returning the advance paid.

The respondent cleared the goods, after paying the charges due to the Port Trust etc. But the respondent filed the suit, out of which this appeal arises, for recovery of the entire balance of price of the goods, namely, Rs. 876-11-3, incurred by them and subsequent interest. There was an offer to deliver the goods taken by the respondent. The appellant countered it by instituting a suit for recovery of the advance paid, and a further sum of Rs. 145 as damages.

2. Both the trial and the appellate Judges held that the mode of transport stipulated in the contract was an immaterial term, and that the appellant was not entitled to refuse to take delivery of the goods or pay for the same. In that view, the suit was decreed. The appellant's claim for refund of advance and damages was rejected, and as the suit was originally laid as a small cause suit, no further appeal was possible, and no other proceedings appear against that decree of the trial Court.

3. This present appeal is, therefore, concerned with the question, whether the seller was entitled to recover the price of the goods on the ground that the buyer was in default. It is not disputed that the contract of sale expressly stipulates that the goods should be despatched by train. The respondent stated in the plaint that an alteration of that term enabling a despatch by sea was agreed to between the parties. This was denied in the written statement. No issue was raised on the question or evidence tendered. Both the trial as well as the appellate Judges proceeded on the footing that Ex. A-1 governed the rights of the parties, namely, that the mode of transport agreed between the parties, was through rail. But they held that the term relating to the carriage of goods by train was an immaterial one.

4. It the term is held to be material one, it cannot be said that the stand taken by the appellant was incorrect. Under Section 39(3) of the Sale of Goods Act, where goods are sent by sea the seller (in the absence of specific agreement), should give sufficient notice to enable the buyer to insure the goods, failing which he would be responsible for the risk. In the present case, transport by sea was not agreed to; and the respondent could not rely on the contract which absolves him of all risk after delivery to the carrier viz., the railway. It was perfectly open to the appellant to stipulate his terms, when a different method of 'transport was adopted unilaterally by the respondent or his principal. Reliance is, however, placed on the admission of the appellant in his evidence, where he has stated:-

'I did not accept the goods. My only grievance or apprehension was that the goods might be found broken. The mode of transport is not important or material term in Ex. A-1 and it is no grievance to me that the goods were sent by sea. It did not matter to me whether the goods were sent by sea or by train.'

It may be that the appellant thought that so long as he got the goods in the condition stipulated, he should not, personally speaking, mind the made in which they were sent. But that cannot mean that he agreed to the despatch of goods by sea or even agreed that it was open to the appellant at his own choice, to change the manner of delivery, and that, on such choice being made so as to send the goods by sea, he should take all the risks of a sea transport. I cannot agree with Mr. Vasudevan, the learned counsel for the respondent, that the admission of the appellant amounts to proving of the fact that the term as to the carriage of the goods was immaterial term.

5. The substantial question is whether, under the law, the term relating to, the carriage of goods which is specifically inserted in a contract of sale, is an unessential term of the contract. The law on this point is stated by Benjamin on the Sale of personal Property, 8th Edn. at page 342 thus:-

'On the same principle, if a particular mode of transmission be expressly or impliedly prescribed by the contract, as, for example, delivery to a specified carrier, or by a particular route, the goods must be delivered to that carrier, or by that route.'

Then again, at page 738, the learned author states, after considering the provisions of Section 32(1) of the English Sale of Goods Act:-

'Whether named by the buyer or not' shall be read subject to the preceding words 'in pursuance of the contract', so that if the buyer names a particular carrier the seller must deliver to him, otherwise there will be no proper delivery.'

This question has been considedred by the Court of Appeal in Sutro and Co., and Heilbut Symons and Co., In re, 1917 2 K.B. 348, where it was held that where the contract specifically provided for a sea carrier, it would not be open to one of the parties, in the absence of agreement, to send the goods partly by sea and partly by land, even though there was a usage which entitled them to do so. The purchaser in the case who repudiated the contract, sought to justify his repudiation by stating that a transit by rail would prejudice him, by reason of its uncertainty in regard to the date of arrival. Swinfen Eady L. J. observed that even that was not required under the law. In other words, it was not necessary to justify in a Court of law the mercantile reasons for inserting any particular stipulation in a contract. The learned Judge held that, on a consideration of the terms of the con-the loading port to the ultimate port of discharge, tract, which provided only for a sea carriage from transports by rail was not permissible. The learned Judge further stated, at page 357:-

'The contract is to send by a specified method of conveyance -- by ship. This is a usual method, and the route by sea is a usual route. Where a method of convenyance and route, namely, a sea route are specified, it is immaterial that there may co-exist some other usual mode of conveyance and route. The terms of the contract must be observed.'

After referring to the usage pleaded, the learned Judge continued:-

'Any such usage, if found, would be inconsistent with the terms of the written contract, and repugnant to them, and therefore inadmissible to annex a new term or condition to the contract. It is not like a case where words or phrases employed in commerce are alleged to have been used in some special technical sense other than their ordinary sense. Moreover, the whole context of the contract shows that the parties were employing the words used in their ordinary sense.'

Bray, J., who agreed with the view, also stated that the custom or practice, or whatever it be, could not be read into the contract. In the present case, the respondent tailed to make out his case, that there was an agreement between the parties, under which the seller and the buyer might have varied the original term as to transport. It must, therefore, follow that the only term contained in the contract was transport by rail.

Such stipulation would be a material stipulation, and the observation of Swinfen Eady, L. J. in the case just now cited will be apposite in this connection. As already stated, once it is conceded that the term as to transport by rail is material one the respondent should be found to be guilty of breach of the contract, as his principal did not send the goods in conformity with the contract. The appellant was not bound to accept the goods sent without his prior sanction through sea route. A decree for damages against the appellant cannot therefore, be sustained.

6. The appeal is allowed with costs throughout. Leave refused.


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