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K.N. Lakshmiah Alias N. Lakshmiah Chettiar Vs. Hajee S. Abdul Azeez, Proprietor, Abdul Azeez and Co., by Agent, T. Mohamed Yusuf Marakayar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1960)2MLJ137
AppellantK.N. Lakshmiah Alias N. Lakshmiah Chettiar
RespondentHajee S. Abdul Azeez, Proprietor, Abdul Azeez and Co., by Agent, T. Mohamed Yusuf Marakayar
Cases ReferredTuken Singh v. Hanuman Das
Excerpt:
- .....term of such a contract with reference to the provisions of law applicable to the case (the indian sale of goods act) the appellant had a right in law to insist upon what he termed ' open delivery', namely, inspection of the goods before he would take delivery of them, and honour the railway receipt and the demand draft. in other words, the question is whether it is the appellant that committed breach of the contract, or, whether it is the respondent who has done so.5. the learned judge (basheer ahmed sayeed, j.) held that both upon the facts and the law, it was abundantly clear that breach of the contract was committed by the appellant alone. he also held that, under a particular term of the contract, the respondent was justified in holding a sale of the rejected goods, even though the.....
Judgment:

Anantanarayanan, J.

1. This is a Letters Patent Appeal by the deendant in O.S. No. 721 of 1947 on the file of the Additional Judge, City Civil Court, Madras. The appellant was also the plaintiff in O.S. No. 999 of 1947 on the file of the same learned Judge. The matter came up in appeal in C.C.C.A. No. 34 of 1952 before Basheer Ahmed Sayeed, J., and the learned Judge confirmed the findings of the City Civil Court, in both the suits, and dismissed the appeal of the present appellant (defendant) with costs. From that decision of the learned Judge, the present Letters Patent Appeal is before us.

2. The facts are quite simple. On 19th March, 1947, the appellant entered into a a contract with the plaintiff in O.S. No.721 of 1947 for the purchase of 150 cotton parachutes at Rs. 24-8-0 per parachute. This is evidenced by the document, Exhibit A-I (page 15 of the printed papers) and there can be no doubt that it is a completed contract of sale between the parties, the purchaser (the appellant) to pay the: packing and cartage charges.

3. We shall later come to the express and implied terms of this contract. The further facts were that the goods were despatched by train to Hindupur, the place where the appellant was to receive them according to the contract. The railway receipt was sent along with a demand draft through a bank in Hindupur, according to the usual trade practice. The facts are not in dispute before us that the appellant refused to honour the documents and take delivery of the goods, contending that he was entitled to what he termed 'open delivery', namely, that he would first make an inspection of the goods, and then take delivery of them, only if he was satisfied that the goods substantially corresponded with the description, or, with the sample which he alleged that he was shown. There was further correspondence between the parties, after the goods were left in this fashion undelivered at Hindupur, and, in accordance with one of the terms of the contract, the respondent firm advertised the sale of these goods to be held on 3rd August, 1947. The sale was originally stopped, but, ultimately, actually held on 24th August, 1947, through certain public auctioneers.

4. The point involved in the appeal is a simple one. It is whether, either upon the explicit terms of the contract, or, upon any implied term of such a contract with reference to the provisions of law applicable to the case (the Indian Sale of Goods Act) the appellant had a right in law to insist upon what he termed ' open delivery', namely, inspection of the goods before he would take delivery of them, and honour the railway receipt and the demand draft. In other words, the question is whether it is the appellant that committed breach of the contract, or, whether it is the respondent who has done so.

5. The learned Judge (Basheer Ahmed Sayeed, J.) held that both upon the facts and the law, it was abundantly clear that breach of the contract was committed by the appellant alone. He also held that, under a particular term of the contract, the respondent was justified in holding a sale of the rejected goods, even though the notice might not have reached the appellant by that particular date. We are in entire agreement with this view, which appears to be the only view possible upon the facts, and in the context of the relevant legal principles. There can be no doubt whatever that the document, Exhibit A-I, evidences a completed contract of sale for the supply of goods, and that dominion in the goods passed to the appellant, as soon as this document was signed. It is sufficient, in this context, to refer to paragraph 7 of the contract, in which it is specified that the goods will be booked by the route at the risk of the customer or the buyer, and to paragraph 6, where it is laid down that every consignment refused or not taken delivery of, will be sold by public auction, and that the buyer alone is responsible for the loss.

6. What is now urged before us is that some vague right of inspection seems to be implied in the law, with reference to Section 17(1) and (2) and Section 41(1) and (2) of the Indian Sale of Goods Act. This argument, when examined, is found to be totally without substance. It is clear from a scrutiny of Section 17(1) and (2) that that section relates to a particular kind of sale, known to trade usage as a sale by sample. It is obviously necessary that a particular sample should be agreed upon, between the parties, as that to which the goods supplied should correspond, and also that there should be a clear term of the contract that the sale will be with reference to such a sample. It is sufficient here to observe that, in Pollock and Mulla's Indian Sale of Goods Act, 2nd Edition, page 86, the learned authors state:

A sale at which a specimen of the goods is exhibited may nevertheless not be a sale by sample, for, it is consistent with the buyer relying on the description alone, and not stipulating for conformity to the specimen produced.

This is sufficient to make an end of the argument that the present contract was im-pliedly a contract of sale by sample. No such express term, and not even any such implication can be spelled out from the facts of the case.

7. With reference to Section 41, we may briefly state that Section 41(2), which alone can at all apply obviously relates to a case where the buyer is to be afforded an opportunity for examination and rejection of the goods before he actually takes delivery, as one of the conditions of the understanding between the parties. As Pollock and Mulla declare at page 185:

the rule declared by Sub-section (2) is excluded in the case of a C.I.F. contract; the obligation of the seller being to tender the documents within a reasonable time, and he need not wait till the goods have arrived before calling on the buyer to take up the documents.

This is precisely the situation here where the goods were consigned to Hindupur when it might take days for them to arrive, and the consignor sends the documents to the consignee, so that the consignee may be ready to take delivery. In fact, actual commercial or trade practice would come to a standstill, if, in every case of consignment by rail to a destination which may even be in another country, the consignee is presumed to have an implied right in law to inspect the goods before delivery, and then, to take delivery of them or to leave them at the spot at his option. Since the carrier's responsibility must admittedly cease when the consignee has an opportunity to take delivery, the result of this will be that such implication will work havoc in trade practice, and bring commerce to a standstill. We have been shown absolutely no ground for any inference that this is implied in the law on the subject. Clearly, he terms of the contract in the present case totally exclude it.

8. Further, we are constrained to point that there is not a hint of the claim now advanced in the evidence of the appellant, Lakshmiah Ghetty, as D.W. I (page 47 of the printed papers). All that the witness states is that the plaintiff said that sales-tax would not be charged, and that, as the Bank did not furnish him with details for the amount, he failed to honour the document, and also that he did not take delivery of the goods. There is not a hint or trace of the suggestion that there was any understanding between the parties, that, at Hindupur itself, he could inspect the goods and then refuse to take delivery of them, if he was not satisfied with the correspondence between the actual goods and the description.

9. In brief, we are clearly of the view that it is the appellant alone who committed the breach of contract, and occasioned loss through his negligence. The re-sale itself was in pursuance of a specific term of the contract, which clothed the respondents with the right to sell the goods at the risk of the buyer. The fact that they sent a notice which did not reach in time, cannot place them in a worse position, when no notice was really required by the contract itself. For authority upon this point reference might be made to Tuken Singh v. Hanuman Das 7 C.W.N. 108. This appeal seems to be totally lacking in merits, and it is accordingly dismissed with costs.


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