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        2023 (5) TMI 89 - HC - Indian Laws

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        Contractual description of goods controls rejection rights; non-conforming equipment can be returned with refund and interest. Goods supplied under a specific contractual description must conform to the agreed specifications; where the supplier fails to prove that the designation ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Contractual description of goods controls rejection rights; non-conforming equipment can be returned with refund and interest.

                              Goods supplied under a specific contractual description must conform to the agreed specifications; where the supplier fails to prove that the designation FH 160 meant anything other than the stipulated lifting capacity, the buyer may reject the goods for non-conformity. In a sale of goods transaction, failure to complete installation and to demonstrate promised performance strengthens the buyer's right to reject, recover the price paid, and obtain interest on the refunded sum in a commercial setting. The stated ratio is that non-conforming goods can be rejected and the purchase price recovered with interest when the contract description is not met.




                              Issues: (i) Whether the equipment supplied conformed to the specifications in the purchase order, and whether the designation FH 160 denoted a 160 kg lifting capacity; (ii) Whether the buyer was justified in rejecting the goods and recovering the price with interest.

                              Issue (i): Whether the equipment supplied conformed to the specifications in the purchase order, and whether the designation FH 160 denoted a 160 kg lifting capacity.

                              Analysis: The purchase order described the equipment as Fine Lift FH 160 with gripper, but did not define the number 160. The correspondence and conduct of the parties showed that the buyer consistently required a minimum lifting capacity of 160 kg at all angles, while the supplier's shifting explanation that 160 meant 100 kg job weight plus gripper weight was unsupported by reliable proof. The Court also found that the supplier failed to establish the alleged gripper weight and that the documentary and oral evidence did not support the trade-practice explanation advanced by the supplier.

                              Conclusion: The equipment did not satisfy the contractual specifications, and FH 160 referred to the lifting capacity of the equipment, not to a composite of job weight and gripper weight. The finding is in favour of the respondent.

                              Issue (ii): Whether the buyer was justified in rejecting the goods and recovering the price with interest.

                              Analysis: The dispute was governed by the law relating to sale of goods, including the buyer's right to examine the goods, reject goods not answering the contract description, and recover the price paid when rejection is justified. The supplier's failure to complete installation and demonstrate performance as promised, coupled with the inability of the goods to meet the agreed specifications, supported rejection. Since the transaction was commercial and the buyer had been deprived of the use of the amount paid, award of interest was warranted on the refunded sum.

                              Conclusion: The buyer was entitled to reject the goods, recover the price paid, and obtain interest as directed. The finding is in favour of the respondent.

                              Final Conclusion: The dismissal of the main appeal and the allowance of the cross-objection left the decree for refund intact and enhanced the monetary relief by adding interest at the rates directed by the Court.

                              Ratio Decidendi: Where goods supplied against a specific contractual description fail to satisfy the agreed specifications, the buyer may reject them and recover the price paid, and in a commercial transaction interest may be awarded on the refunded amount.


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                              ActsIncome Tax
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