1. The appellant (original defendant) has preferred this Appeal under Section 96 of the Civil Procedure Code against the judgment and decree dated 29.9.1995 whereby the Suit filed by the respondent-original plaintiff has been decreed with interest.
2. At the outset, it is observed that while dictating the order, it was found that the oral as well as documentary evidence were destroyed by the trial Court and no such evidences are available on original Suit. Therefore, learned advocates for the parties were requested to ensure that if they have any certified copy of the oral as well as documentary evidence, then it may be produced in the matter. However, learned advocates for both the sides have submitted that they have no such Certified Copy with them, however, they have stated that the matter may be decided on the basis of the Paper-book supplied by the parties in present appeal. Accordingly, the present appeal is being disposed of after taking into account the Paper-book submitted by the parties in the matter.
3. For the brevity and convenience the parties will be referred to as Plaintiff and defendant as enumerated in the original suit.
4. It is the contention of the defendant that the plaintiff has instituted a summary suit no. 2339 of 1986 in the City Civil Court at Ahmedabad for principal amount of Rs.66726.64 paise along with interest at the rate of 18% p.a. from 28.6.1983 to 23.3.1986 plus notice charges of Rs.600/- aggregating to Rs.1,00,200.64. It is contended that the plaintiff has filed Suit for the price of the goods (machine) said to have been delivered to the defendant as per the terms of the Agreement entered into between the parties dated 24.12.1982. According to the defendant, the plaintiff has not delivered the aforesaid machine in time as agreed between the parties. It is further the case of the plaintiff that the plaintiff is having office at Ahmedabad and the defendant had placed an order at Ahmedabad with the Plaintiff to manufacture and supply to the defendant the Hydraulic Power Unit with accessories and the defendant, who is having office at Ahmedabad, has paid Rs.20,000/- as advance amount toward the order booked with the plaintiff. It is contended that the plaintiff has dispatched the hydraulic power unit through the transport operator M/s. Panchmahal Transport Company and the defendant was required to retire the documents on payment and obtain the delivery of the goods. It is also the case of the plaintiff that the goods in question was to be delivered to the defendant at Ahmedabad and the amount of the same is to be paid by the defendant at Ahmedabad but as per the request of the defendant the goods were despatched to the defendant's factory at Ankleshwar. As per the plaintiff, it has despatched the goods as per the agreement and it had reached the destination. But the defendant had failed to retire the documents by making the necessary payment. It is also case of the plaintiff that the plaintiff thereafter repeatedly requested the defendant to make the payment, but, the defendant has not complied with the terms of the agreement and thereupon the plaintiff issued Notice dated 30.4.1985 and called upon the defendant to make payment. It is also contended that as the Notice was not accepted by the defendant, the plaintiff was constrained to send the aforesaid notice on 29.5.1985 to the defendant's Office at Bombay. Thereupon, the defendant replied on 28.6.1995 wherein the defendant had agreed that an order was placed to the plaintiff for the supply of goods but it was contended in the Notice that the goods were to be delivered by April, 1983. It was also contended by the defendant that on account of late delivery, the defendant suffered the loss.
4.1 It is also contended by the plaintiff that it has to clarify the entire position in reply dated 5.7.1985, however, the defendant failed to comply with the plaintiff's reply dated 5.7.1985 calling upon the defendant to retire the documents and make the payment. Thereupon, the defendant reiterated the contentions raised in the earlier reply. In view of that the Plaintiff has filed impugned Suit against the defendant.
5. The defendant has filed detailed reply at Exh-14 and has contended that the Suit is not maintainable and has also raised the contention that the Court does not have jurisdiction to entertain the Suit. It is also contended that the Suit is barred by Limitation as the defendant has placed the Order with the plaintiff on 24.12.1982 and the plaintiff was suppose to deliver the goods on 1.4.1983 whereas the Suit has been filed on 9.4.1986. It has also contended that the defendant has placed the Order on 24.12.1982 with M/s. Rexroth Maneklal Industries Limited situated at Vatva, Ahmedabad and the present suit is filed by M/s. GL Rexroth Industries Limited against the defendant and there is no previty of contract between the parties and therefore the defendant is not liable to pay the amount. It has also denied that the plaintiff has delivered the goods within the prescribed time limit. It is also contended that the plaintiff has not delivered the goods at prescribed time limit and has also charged the excise duty in its invoice which the defendant is not liable to pay. It is also contended that there is breach of contract by him. According to it, as the plaintiff has not supplied the goods within prescribed time limit, the defendant has suffered heavy loss and therefore plaintiff has committed breach of the contract for not supplying the machine and, therefore, the plaintiff is liable to pay damages to the defendant. It is also contended that the plaintiff has deposited Rs.20,000/- with the plaintiff for supplying the equipment to the defendant within prescribed time limit. The defendant has prayed to dismiss the Suit and also stated that he is entitled to recover interest on the advance amount of Rs.20,000/- deposited by the defendant.
6. On the basis of the pleadings of the parties, the learned trial Court has framed the following Issues at Exh-22:
(1) "Whether this court has no territorial jurisdiction to try and decide the suit on the facts averred by defendant vide para-5 of exh.14?
(2) Whether the suit is barred by law of limitation
(A) Whether the suit is barred by law of limitation?
(B) Is it proved that the delivery of suit machine was not made in accordance with the terms and conditions agreed by the parties" If yes, what is its effect on the suit claim?
(3) Whether the plaintiff proves the suit claim of Rs.66,726-64 ps as outstanding due and payable by the defendant on account of suit contract to supply Hydraulic power Unit with accessory?
(4) Whether the plaintiff is entitled to claim Rs.32,874-00 Ps by way of interest?
(5) Whether the plaintiff is entitled to claim Rs.600/- towards the notice charges?
(6) Whether the defendant proves that defendant is entitled to claim interest at the rate of 18% on advance deposit of Rs.20,000/- made to the plaintiff as contended vide Para-14 of the exh14?
(7) To what amount, if any, the plaintiff is entitled to claim?
(8) What order and decree?"
7. After perusing the evidence on record the learned trial Court has answered Issue No. 2A, 3, 4, 5 in the affirmative, whereas 2B and 6 is answered in negative and Issue No. 1 and 2 were not pressed and ultimately Issue No.7 and 8 was decided as per final order.
8. Being aggrieved by the impugned judgment and decree, the defendant has preferred this Appeal inter alia contending that the trial Court erred in appreciating the evidence on record, as has also erred in interpreting the provision of law essentially that Sales of Goods Act, Central Excise and Salt Act, 1944 and the Rules made thereunder and the Indian Evidence Act. According to it, the trial Court has erred in interpreting Sections 38 and 39 of the Sale of Goods Act. According to him (i) there must be a condition of contract for delivery of the goods by the seller to the buyer for the mode of transport of the goods and (ii) seller must be authorized by the buyer to send the goods through a career. According to the defendant only in these circumstances, it can be prima-facie deemed to be a delivery of goods to a buyer. It is contended that in the present case there is nothing in the Agreement exh-68 nor in any other oral or documentary evidence to show that the plaintiff shall have to deliver the goods through the transporter to the defendant nor at no-where it is shown that the defendant has authorized the plaintiff to send the said machine in question to the defendant through Panchmahal Transport. According to the plaintiff, the trial Court has committed grave error in interpreting the aforesaid provisions of law and has erred in appreciating the evidence on record.
8.1 While referring to Section 41 of the Sale of Goods Act, it is contended by the defendant that the plaintiff has not given any opportunity for examining the said machine in question before its delivery. Section 41 gives explicit and clear right to a buyer to have the previous examination and reasonable opportunity for the purpose of ascertaining whether the goods are in conformity with the contract or not and unless such opportunity is not given to the buyer, the buyer is not deemed to have accepted them. The said provision gives an indirect opportunity to the buyer to reject the goods if they are in not conformity with the contract. It has assailed that the observation of the trial Court that the present defendant has deemed to have accepted the delivery of the said machine is contrary to Section 39 of the Sale of Goods Act.
8.2 While referring to provision of Central Excise and Salt Act, 1944 and the Rules made thereunder, it is contended that the goods in question was not excisable goods and the plaintiff has failed and neglected to produce any documentary evidence to show that the plaintiff has paid excise duty of 10% on the said machine amount to Rs. 7581/- as mentioned in the invoice at Exh-38. According to the defendant, the plaintiff could have produced documentary evidence such as G.P. 1 Form, R.T. 12 Return, RG23 or like other documents which is obligatory on the part of the plaintiff to maintain under the provisions of the Central Excises and Salt Act, 1944. According to the defendant this aspect has not been appreciated by the learned Trial Court and has committed grave error in passing the decree in favour of the plaintiff. It is also contended that within prescribed time, the plaintiff has failed to provide machinery though the defendant was ready and willing to take the delivery of the machines. It is contended that the plaintiff has miserably failed to prove his case. It is prayed by the appellant-defendant to quash and set aside the impugned judgment and decree and the suit of the plaintiff be dismissed with cost.
9. Heard Mr. Krishal Patel, learned advocate for Devang Nanavati, learned Senior Advocate for appellant-defendant and Ms. Amrita Thakore, learned advocate for the plaintiff at length. Perused the impugned judgment of the trial Court and the material evidence in a shape of paperbook produced in the matter. The following points arose for the determination of the present Appeal:
1. "Whether the learned trial Court has committed error of facts and law in passing the impugned judgment and decree in favour of the plaintiff?
2. Whether the impugned judgment and decree of the leaned trial Court in Summary Suit No.2339 of 1986 is liable to be set-aside?
3. What order?"
10. For the reasons given below, my findings on the above points, are as under:-
3. As per final order.
11. Learned advocate Mr. Patel for Mr. Devang Nanavati, learned Sr. Counsel for the appellant has vehemently submitted that there was agreement between the parties to provide machines and the machine was to be provided in the month of April, 1983 and therefore, the time was essence of the Contract. He has also contended that as per the agreement the defendant has deposited Rs.20,000/- as 1/3rd amount of the proposed price. According to him, it is alleged by the plaintiff that the goods were send through transport and the defendant ought to have retired the document and obtained the delivery of the goods, but, the goods were not send in time and it was sent later and the goods were lying with the Transporter and title and the possession of the ownership of the goods has not been transferred in favour of the defendant and it remained with the plaintiff and, therefore there is no question of making payment of the goods. According to him, the goods were not delivered in the month of April, 1983 and it was send as per the invoice dated 28.6.1983. According to him, the invoice has been including the amount of excise duty and Notice charges which was never agreed between the parties. While referring to the agreement dated 24.12.1982, he has referred to the terms of the agreement wherein delivery time is shown as April, 1983 and there was no mention about charges and Central Excise Duty . According to him, as per agreed terms, the plaintiff in invoice dated 27.6.1983 has claimed Rs.72,200/. Mr. Patel, learned advocate for the defendant has also submitted that the amount of the goods cannot exceed Rs.60,000/- as 1/3 of it amounts to Rs.20,000/-, was paid in advance. While reference to the notice at Exh-55 and Exh-49, he has submitted that the Transport Company was dealing directly with the plaintiff and when the goods was not delivered to the defendant, the plaintiff cannot maintain the suit for price of the goods. According to him, at the most the plaintiff could claim for damages against the defendant. While referring to the notice, transaction and reply thereon he has stated that Section 55 of the Sale of Goods Act will not apply to the facts of the case and only Section 56 of the Act will apply.
11.1 While referring to the deposition of the parties, he has submitted that time was essence of the contract as delivery was to be effected in the month of April, 1983. According to him, the invoice was not within terms of the contract. He has also contended that package charges were not as per the Contract and when the goods are imported the same is not liable to pay any excise duty. According to him, if the excise duty is paid by the plaintiff, necessary document thereof had been with the plaintiff which are not produced in the matter. He has also contended that there is no agreement of payment of excise duty and notice charge. He has also contended that if the Suit is found to be maintainable then in that case also the delivery through transport cannot be deemed to be delivered to the buyer. Therefore, when the deliver of the goods is not handed over to the defendant buyer, then the plaintiff cannot claim any amount of price of the goods from the defendant and the plaintiff would only get the damages, if any.
12. In support of his argument, he has relied upon the following judgment and has requested to dismiss the suit, by allowing the present appeal.
1. Mahabir Prasad Rungta v. Durga Datta, (1961) AIR SC 990.
2. China Cotton Exporters v. Beharilal Ramcharan Cotton Mills Ltd., (1961) 3 SCR 845.
3. Kundan Lal Rallaram v. The Custodian, Evacuee Property Bombay, (1961) AIR SC 1316.
4. Bengal Immunity Co. Ltd. v. State of Bihar and others, (1955) AIR SC 661.
13. Per contra, Ms. Amrita Thakore learned advocate for the plaintiff has vehemently submitted that as per the contract, time was not the essence of the contract and there was no such contention raised that the contract was only for Rs.60,000/-. She also submitted that even if excise duty is not paid by the plaintiff, then the plaintiff will be liable to the government and any action can be taken by the government but that fact will not give any right to the defendant. She also contended that initially the invoice was not disputed at any time and interest is part of the contract and the same fact has never been raised. While referring to the documentary evidence, she has submitted that the defendant has never raised any dispute with regard to late delivery or interest or price and has only raised issue of excise duty, which was clarified by the plaintiff to the defendant. While referring to Exh-45 dated 1.10.1983, she has submitted that the defendant at the relevant time has assured that it will take delivery of the goods. While referring to various communication between the parties, she has submitted that the defendant has asked only time for making payment and no dispute was raised in letter dated 8.2.1984. She has also stated that after issuance of the legal notice for the first time, the defendant has raised the question of delay of delivery and excise duty which is contrary to the terms of the contract. She has also referred to the correspondence and submitted that there was no meeting between the parties and the defendant has sought for time for making payment. She has also contended that no counter claim is filed by the defendant for claiming damages and there was only 2 months delay in sending goods to the defendant. She has also submitted that the points of arguments which are raised before this Court were not raised in Written Statement filed in the Suit by the defendant. While reading the judgment, she has submitted that there is no error of fact and law in the impugned judgment and it deserves to be sustained and present appeal is liable to be dismissed.
14. In rejoinder, it is submitted by Mr. Patel, learned advocate for the defendant that goods were rejected and any communication made thereof is a counter offer and no new contract has been entered into. He has referred to the deposition of both the sides and submitted that after rejection of the suit no fresh contract was created due to intermittent correspondence. He has also contended that all the contentions argued before this Court were taken before the City Civil Court, but, those were not properly appreciated by the learned Trial Court and failed to appreciate the defence of the defendant in toto. According to him, Notice is not a contract by itself. On all these grounds he has prayed to allow the appeal.
15. In the case of Mahabir Prasad Rungta v. Durga Datta (Supra) in Para-8 the Apex Court has observed that in commercial transaction, time is of the essence.
16. In the case of China Cotton Exporters v. Beharilal Ramcharan Cotton Mills Ltd. (supra), the Apex Court has observed that in commercial contract, time is of the essence of the Contract. In Para-12, the Apex Court has observed as under:
"12. .....Before the seller could be heard to say that the non-supply was due to default on the part of his suppliers or some other cause beyond his control the seller is bound to show that he himself did all in his power to ensure timely supply. He could do so by showing that he had made a contract under which he was entitled to obtain the supplies in good time. If under his contract with his own suppliers he was not so entitled but there was merely a chance of his getting the supplies in time to enable him to honour his contract the non-supply would clearly be due to his own default in not making a contract which would have so entitled him and not to a default on the part of the supplier or to a circumstance beyond his control".
17. In the case of Kundan Lal Rallaram v. The Custodian, Evacuee Property Bombay (supra), while dealing with the provisions of Evidence Act as well as Negotiable Instruments Act, in Para-5, the Supreme Court has observed as under:
"5. This section lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder a court shall presume, inter alia, that the negotiable instrument or the endorsement was made or endorsed for Consideration. In effect it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be. The question is, how the burden can be discharged? The rules of evidence pertaining to burden of proof are embodied in Chapter 7 of the Evidence Act. The phrase "burden of proof" has two meaning - one the burden of proof as a matter of law and pleading and the other the burden of establishing a case; the former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas the latter is not constant but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence, i.e. oral or documentary evidence or admissions made by opposite party; it may comprise circumstantial evidence or presumptions of law or fact. To illustrate how this doctrine works in practice, we may take a suit on a promissory note. Under Section 101 of the Evidence Act, "Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist." Therefore, the burden initially rests on the plaintiff who has to prove that the promissory note was executed by the defendant. As soon as the execution of the promissory note is proved the rule of presumption laid down in Section 118 of the Negotiable Instruments Act helps him to shift the burden to the other side. The burden of proof as a question of law rests, therefore, on the plaintiff; but as soon as the execution is proved, Section 118 of the Negotiable Instruments Act imposes a duty on the court to raise a presumption in his favour that the said instrument was made for consideration. This presumption shifts the burden of proof in the second sense, that is, the burden of establishing a case shifts to the defendant. The defendant may adduce direct evidence to prove that the promissory note was not supported by consideration, and if he adduced acceptable evidence, the burden again shifts to the plaintiff, and so on. The defendant may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling, the burden may likewise shift again to the plaintiff. He may also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. Under Section 114 of the Evidence Act, "The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case." Illustration (g) to that section shows that the Court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. A plaintiff, who says that he had sold certain goods to the defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration, should produce the said account books, for he is in possession of the same and the defendant certainly cannot be expected to produce his documents. In those circumstances, if such a relevant evidence is withheld by the plaintiff, Section 114 enables the Court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the plaintiff. This presumption, if raised by a court, can under certain circumstances rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act. Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact. We are not concerned here with irrebuttable presumptions of law".
18. In the case of Bengal Immunity Co. Ltd. v. State of Bihar and others (supra), the Apex Court, in Para-207, has observed as under:
"207. It was then contended that the sales proposed to be taxed did not take place in Bihar as the goods were actually delivered as contemplated by the Explanation not there but in Bengal. The argument is that the words "actual delivery" in the Explanation are used in contrast to constructive or symbolic delivery as meaning physical delivery of goods, that under S. 39(1), Sale of Goods Act, 1930 (Act 3 of 1930) the common carrier is the agent of the purchaser, and that therefore delivery of the goods to the railway authority in Bengal was actual delivery thereof to the purchaser in Bengal. Section 39(1) is as follows :
"Where in pursuance of a contract of Sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody is 'prima facie' deemed to be a delivery of the goods to the buyer".
It is difficult to see what there is in this section to support the contention that delivery to a common carrier is actual delivery to the purchaser. The section does not say so. On the other hand, it proceeds on the assumption that there was, in fact, no delivery to the purchaser, actual or otherwise, a thing being deemed to be something only, when as a fact it is not that, and then enacts on that basis a fiction that delivery to a common carrier shall be deemed 'prima facie' to be delivery to the buyer. What is the purpose of this fiction? It is, as will be clear from S. 39(2), to fix on whom the loss is to fall in case the goods are lost or damaged in course of transit. But when no such question arises, the fiction has to be ignored, and the matter will have to be decided on the factual basis whether the goods were actually delivered."
19. The main controversy between the parties is regarding as to whether the time was essence of the Contract. In this regard, it is worthwhile to refer to Sections 55 and 56 of the Contract Act, which reads thus:
55. Effect of failure to perform at fixed time, in contract in which time is essential
"When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.
Effect of such failure when time is not essential.
If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure.
Effect of acceptance of performance at time other than that agreed upon.
If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless at the time of such acceptance he gives notice to the promisor of his intention to do so".
56. Agreement to do impossible act
An agreement to do an act impossible in itself is void.
Contract to do act afterwards becoming impossible or unlawful.
A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
Compensation for loss through non-performance of act known to be impossible or unlawful.
Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.
20. The relevant provision thereof is also contained in Section 11 of the Sale of Goods Act, 1930, the said Section reads as under:-
"11. Stipulations as to time
Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract".
Now as per the provisions contained in Section 11 of the Sale of Goods Act, the stipulation as to time, has to be gathered from the intention of the parties which may appears from the terms of contract.
21. In view of the provisions of the Contract Act also, there is need of finding out intention of the parties as to whether the time was essence of the Contract. The parties, may make time of the essence either expressly in terms which unmistakably provide that they intended to do so. Alternatively, making of time as the essence of a contract may be inferred from the nature of the contract, the property or the surrounding circumstances. When the contract itself provides for extension of time, the same cannot be terms to be the essence of the contract. It is well settled law that in case of contract for the sale of land or immovable property, it would normally be presumed that time was not of the essence of the contract.
22. Now, on perusal of the documentary evidence, it appears that vide Exh-65 dated 24.12.1982 (Page-77 Paper Book), the defendant appellant has placed, order for the goods in question and delivery was sought in April, 1983. It is also averred therein that the defendant has tendered Rs.20,000/- being 1/3rd advance against the order and balance payment would be made against delivery. It is also stated therein (pg-78 of the paper book) that Excise and Sales Tax payable at the rate applicable at the time of delivery. Thus, this letter clearly shows that the defendant has placed order of the goods in question and made part payment of Rs.20,000/-. Now on perusal of the various correspondence, which are at Exh-43, (Page-24) dated 29.8.1983, Exh-44, (Page-25) dated 20.9.1983, Exh-45, (Page26) dated 1.10.1983, Exh- 46, (Page-28) dated 8.2.1984, Exh-48, (Page-54) dated 26.4.1984, it is found that in these correspondence, the defendant has never raised the question that the time was essence of the contract. Rather, the defendant has agreed to make payment and has sought for clarification regarding payment of excise duty. It appears from the record that in the year 1985, first time, vide Exh-50 dated 28.6.1985 (Page-33) the defendant has raised the issue as to the facts that the time was essence of the contract. It appears that this point has been raised after the issuance of the legal notice by the plaintiff to it. Thus, all the correspondence clearly suggest that there was no intention on the part of the parties to stipulate that the time was essence of the contract.
23. The next question which is agitated by the appellant-defendant is that property of the goods was not transferred in favour of the buyer i.e. defendant. At this juncture, it is worthwhile to reproduce various relevant provisions 18, 19, 20, 21, 22, 23(2), 38, 39, 41 and 59 of the Sale of Goods Act, which are as under:
"18. Goods must be ascertained
Where there is a contract for the sale of unascertained goods, no property in the goods is transferred to the buyer unless and until the goods are ascertained.
19. Property passes when intended to pass
(1) Where there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.
(3) Unless a different intention appears, the rules contained in sections 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.
Sec 20. Specific- goods in a deliverable state
Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed.
21. Specific goods to be put into a deliverable state
Where there is a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof.
22. Specific goods in a deliverable state, when the seller has to do anything thereto in order to ascertain price
Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done and the buyer has notice thereof.
23. Sale of unascertained goods and appropriation
(1) xxx xxx xxx
(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.
38. Instalment deliveries
(1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments.
(2) Where there is a contract for the sale of goods to be delivered by stated instalments which are to be separately paid for, and the seller makes no delivery or defective delivery in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the whole contract, or whether it is a severable breach giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated.
39. Delivery to carrier or wharfinger
(1) Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to wharfinger for sale custody, is prima facie deemed to be a delivery of the goods to the buyer.
(2) Unless otherwise authorised by the buyer, the seller shall make such contract with the carrier or wharfinger on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case. If the seller omits so to do, and the goods are lost or damaged in course of transit or whilst in the custody of the wharfinger, the buyer may decline to treat the delivery to the carrier or wharfinger as a delivery to himself, or may hold the seller responsible in damages.
(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit, in circumstances in which it is usual to insure, the seller shall give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails so to do, the goods shall be deemed to be at his risk during such sea transit.
41. Buyer's right of examining the goods
(1) Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract.
59. Remedy for breach of warranty
(1) Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods, but he may-
(a) set up against the seller the breach of warranty in diminution or extinction of the price; or
(b) sue the seller for damages for breach of warranty.
(2) The fact that a buyer has set up a breach of warranty in diminution or extinction of the price does not prevent him from suing for the same breach of warranty if he has suffered further damage.
24. In view of the aforesaid provisions, on perusal of the evidence on record, it clearly transpires that the plaintiff- respondent has despatched goods to the defendant -appellant by invoice dated 27.6.1983 Exh-38 (Page-23 of the paper book) through Panchmahal Transport Company and intimated the defendant-appellant to retire the document from the bank. It also appears from the documentary evidence, which are referred to hereinabove, that the defendant has only sought for clarification as to whether the payment of excise duty and to deduct the same from the Bill so that they can retire the document from their banks. Thus, it appears that the properties in goods was passed in favour of the defendant.
25. It reveals from the letter dated 8.2.1984 at Exh-46 (Page 52 of the Paper book) that t
Please Login To View The Full Judgment!
he defendant has stated as under: "Mr. Renroth Maneklal, Shafi Manzil, Ashram Road, AHMEDABAD-380 009. Dear Sir, We are in receipt of your telegram in connection with retiring the documents drawn on us. In this connection, we have to state that due to very critical finance position, we would not retire the documents in time though we have given you promise for the same. Now we expect that we will be in a position to retire the documents by the end of this month and therefore, we request you to please allow us the time. We hope, you will appreciate our difficulty and accede to our request. Thanking you, Yours faithfully, For Shah Metal Industries M.I. BANGUR ACCOUNTANT." 26. Thus, from the documentary evidence it clearly transpires that the matter was rested at the end of the defendant to get the possession of the goods by retiring the document from the Bank. Considering the facts and circumstance of the case, it is found that as soon as seller has delivered the goods to the transport company, the property in goods has been transferred in favour of the purchaser i.e. defendant. 27. Now it appears from the documentary evidence on record that the defendant has never raised his right of examining the goods nor he has initially raised question as to breach on the part of the plaintiff to deliver goods to the transport company. The only point raised by the defendant was regarding non-applicability of the payment of excise duty. Now, if the plaintiff does not pay the excise duty then the Excise Department can initiate action against the plaintiff. Merely because the plaintiff has not provided the documentary evidence to show that it has paid excise duty, no right can accrue to the defendant, for non-payment to the plaintiff for the goods property of which was passed in favour of the defendant. 28. It is pertinent to note that in the present case the defendant has never put forward his right to examine the goods or seek any amount of damages from the plaintiff. It is only after issuance of legal notice by the plaintiff that the defendant has raised the question of time as the essence of contract and regarding the payment of excise duty. It is also pertinent to note that it is the defendant who has not retired the document from the Bank and due to that he has not got the actual delivery of the goods. It also appears from the documentary evidence that the defendant itself has sought time for making payment and to retire the document. Therefore, from reading of the entire evidence on record, it is clearly found that the defendant is liable to make payment to the plaintiff for the goods in question. It is also admitted fact that this being a commercial transaction, the defendant is liable to pay the interest and as he has failed to make payment as per Invoice, the plaintiff had to issue legal notice. Therefore, defendant is also liable to pay the notice charge though it is not mentioned in the Invoice referred t hereinabove. 29. On perusal of the impugned judgment of the trial Court it appears that the trial Court has considered every aspect of the matter in its true perspective and has committed no error of facts and law in passing the decree in favour of the plaintiff-respondent. The impugned judgment of the trial Court is sustainable in the eyes of law. 30. In view of the aforesaid reasoning, I have answered point No.1 and 2 as referred to hereinabove in Negative and therefore the present Appeal deserves to be dismissed. 31. Resultantly, in view of the above, the present appeal stands dismissed. The impugned judgment and decree dated 29.9.1995 passed in Summary suit no. 2339 of 1986 by City Civil Court are hereby confirmed. 32. No order as to costs. 33. Necessary decree to be drawn in the First Appeal. FURTHER ORDER: At this stage, Mr. Arjun Rathod, learned advocate for Mr. Devang Nanavati,learned Senior Advocate for the appellant submitted that interim stay may be continued for further period of four weeks. In view of the discussion made in the judgment, request is declined.