AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1954 (9) TMI 45
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....The description of the pens was "1000 D. F. regular fills." The price per gross was 74.95 dollars. This was forwarded to Messrs. Frazer and Co., New York, who themselves were middlemen getting these goods from manufacturers of these pens. The price here mentioned included the commission payable to the plaintiff but by a subsequent arrangement evidenced by Ex. P. 2 dated 4-1-1947 it was agreed by the defendants that invoices might be made out for the price to be paid to Messrs. Frazer and Co., in America while they themselves undertook to pay five per cent, of the value of the order as com-mission to the plaintiff. This was accepted by Messrs. Frazer and Co., New York by their letter, Ex. P. 3, dated 30-1-1947. The description of the goods for which the order was accepted stated in this acceptance letter was 550 gross, styled 1000 De Luxe Dropper filled (regular) fountain pens." The price was mentained as 74.05 dollars per gross F. AS. New York and it was added "However in accordance with the instructions from Crystal Company (the plaintiff herein) we are deducting their five per cent, commission from this price. The merchandise will be billed to you at 71.20 do....
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....6-11-0 & have to be paid by you at your earliest convenience. Kindly confirm the above so that we may debit the cost of 180 gross fountain pens in your account." On the same day this was replied to by the plaintiff as follows: "In reply to your letter dated 31st March, you may under the circumstances, return the 180 gross solid colour fountain pens. In of her words, you may debit the cost of these fountain pens the landed cost of which works out to ₹ 26-11-0 to our account. In view of the fact that we have no go-down of our own, you may keep this stock in your godown, delivery to be taken by us as and when required for sale. We will attempt to dispose of the goods within 30 days from date and in case we are not able to do so within that time, you are at liberty to charge us interest on the value of the 180 gross. For the first one month, you are not entitled to any interest. In the meantime please let us have your cheque for the 5 per cent, commission on the value of the 370 gross. Deluxe fountain pens." 4. This letter has been marked as Ex. P. 45. It was acknowledged on the same date in Ex. P. 6 by the defendants in these terms: "We are in due receip....
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....the defendants to the plaintiff at a price of Bs. 26-11-0 per dozen and complaining of the non-delivery of the goods, a claim was made for damages for the breach of this contract in the sum of ₹ 2835 the figure being computed as the difference between the landed cost of the said goods at ₹ 26-11-0 and the prevailing market rate stated to be ₹ 28 per dozen. The defendants also in their turn had this letter replied to by their lawyers and in this the contention of the defendants, that they would not part with the possession of the 180 gross pens until payment of the price was reiterated. It was urged that the plaintiff could not claim delivery before paying the value of the goods. The defendants also threatened that if before the end of the month the goods were not sold by the plaintiff and the proceeds delivered to them, the defendants would either by public auction of private retail sale sell these goads at the risk of the plaintiff after 1-4-1947 and hold him liable for the deficiency. They also called upon the plaintiff to pay to the defendants the price of 180 gross already paid by the defendants, namely, Rs- 53000 and odd. The answer of the plaintiff to this....
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....iption of the goods contracted for. The defendants were therefore entitled to reject these goods and this was consented to by the plaintiff. As the defendants had paid for the entire value of the goods, they had a right to insist that possession of the goods should be with them until they were paid their value by the plaintiff. The attitude of the plaintiff who insisted upon the delivery of the goods without payment of their price was not lawiul and the defendants were therefore justified in refusing to part with the goods and insist on payment before delivery. As the action of the plaintiff was not proper, the defendants were entitled to sell the goods and appropriate the sale proceeds to themselves. That would amount to an acceptance of these goods and the claim put forward in the counter claim is in the nature of damages for breach of warranty. As admittedly there has been a breach of the condition on the acceptance of the goods by the buyer they have a right to sue for damages as for breach of warranty under the terms of Section 59, Sale of Goods Act and the learned Judge was not therefore justified in rejecting the counter claim. 9. Before dealing with the legal points invo....
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....n behalf of the appellants was never present to their minds at the stage of the trial and this is clear from the relevant issue dealing with the present matter. It is issue No. 4 which runs thus: "Was there an agreement beween the parties that the plaintiff should take back 180 gross pens at ₹ 26-11-0 as alleged in para 8 of the written statement?" When analysed it will be seen that the basis of the counter claim as put forward in the written statement is this, viz., that there was an agreement that the plaintiff should take back 180 gross pens at ₹ 20-11-0 per dozen and that he failed and neglected to do so, this failure being rested on subsidiary point that though the plaintiff asked for delivery he failed to pay for the goods and therefore was not entitled to make such a demand. In respect of this part of the case, it is necessary to mention that when goods are properly rejected by a buyer there is no obligation upon him to return the goods in the sense that he is not bound to take steps to see that they are delivered at the place of business of the seller. This is provided by S, 43, Sale of Goods Act. In cases where a buyer who has already paid for the....
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....eir books of account to show the exact price for which they sold these goods. But they called in some evidence to prove the ruling prices of these pens in or about April-May, 1947. On the ofher hand, the plaintiff also let in some evidence to show that the price of these pens on the relevant dates was about ₹ 26-11-0 per dozen, in which event of course the defendants would not be entitled to any damages for a breach by a buyer for non-acceptance. The learned Judge was not inclined to accept the evidence adduced on behalf of the defendants and that was the ground upon which he dismissed the counter claim. Counsel for the appellants does not challenge these findings of the learned Judge and that is exactly the reason why counsel for the appellants raised the contentions which we have summarised above and which proceeded upon a foofing tofally different from that on which their case was rested at the trial in the pleadings and in the evidence. 11. Even assuming that it is open to the defendants to put forward such a new case at this stage, we consider that there are no merits in the argument sought to be raised. Tho relevant provisions of the Sale of Goods Act which have a be....
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....ivested from them and revested in the seller, or on the ofher hand whether the original vesting of the property itself is conditional on the goods delivered conforming to the description contracted for and on the condition being broken and on the buyer not electing to retain the goods, the title that vested conditionally in the buyer is determined and put an end to. It is sufficient to state that whatever be the legal theory in the case of a sale of the type now under consideration, namely, "Fas New York" once the buyer elects to disaffirm the delivery and exercises the right of rejection he is divested of the title to the goods and the title vests in the seller. Not having any title to the goods, the buyer would have no light to them, for the property in them is in the seller. There is no obligation on the buyer to return the goods to the seller whose property they have become by reason of their rejection (S. 43). In the present discussion we are not concerned with the correctness of the attitude taken up by the buyers in the refusing to part with their possession, a matter which has already been dealt with earlier. Further, for the consideration of the present questio....
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...., the time for performance has already expired and the buyer does not extend the same, he can sue the seller for I damages for non-delivery. The damages would then be calculated on the difference between the contract price and the market price on the date of the breach. A buyer however to whom the goods not conforming to the contracted description are delivered is not bound to reject. He has an option to waive the condition and elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract as repudiated (Vide Section 13(1), Sale of Goods Act). These two rights are by their very nature alternative. When a buyer accepts the delivery or deais with the goods as his own, he is not thereafter entitled to reject the goods and sue the seller for damages for nondelivery (Vide Section 42). Section 59(1) of the Act deals with the right of buyer in such a contingency. Where however the buyer rejects the goods there is no question of his suing for any ofher relief -than damages for non-delivery. 15. What is however urged on behalf of the appellants before us is that appellants must be treated to have accepted the goods by reason of their priv....
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....elivery, of new chillies and that there had been a breach of contract on the part of seller. On this finding it was clear that the buyer was entitled to damages. The only question was whether the price realised at the sale of the goods did or did not represent the actual market value of the goods on the date of the breach. The contention of the buyer was that it did while it was contended for the seller that as the goods were sold at Alandur they might not have fetched the proper price and that evidence was necessary to show the exact price of the goods on the date of the breach. For this purpose the matter was remanded to the original side. It will be seen that the facts of this decision do not help the appellant in the least. In the case then before this court, the buyer had brought in the sale proceeds of the goods and had claimed the relief for the balance and it was such a case that was the subject-matter of the decision. In these circumstances, we do not consider that that decision affords any assistance to the appellants in the present case where the defendants have not brought into account the sale proceeds. We are, therefore, of the opinion that appellants are not entitl....
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....hich the buyer is entitled to damages would be as stated in - 'Jones v. Just', (1868) 3 QB197 (C), the difference between what the goods were worth when they arrived and what the same goods would have realised had they been in the state contracted for. In the words of Slade J. in - 'Champanhae and Co. Ltd. v. Waller and Co, Ltd.', 194S-2 All ER 724 at p. 727 (D): "The measure of damages is in the first place the difference in value between the goods as they were and the value which they would have had had they complied with the warranty." The law in India is exactly the same. It will be seen that in this computation, the price contracted for is wholly irrelevant and immaterial. To take the present case as a concrete instance, the contracted price of the goods was ₹ 26-11-0 per dozen. Suppose the market price in April-May 1947 of solid colour pens were ₹ 28 per dozen while that of pearl colour was ₹ 30 a dozen; the buyer would be entitled to damages at ₹ 2 per dozen notwithstanding that he is making a profit by the sale. On the ofher hand, if the market price of the solid colour pens went down to ₹ 18 per dozen while the v....