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Full Case Details
The Mysore Sugar Company, the plaintiff in the suit, advertised for sale of certain items like
copper ingots, copper scraps as well as brass tubes available with the company at Mandya by
its notification dated 27th July, 1966. The defendant offered to purchase the same by his letter
dated 30-6-1966. The plaintiff accepted the offer of the defendant to purchase the various
items and, thereafter, the defendant lifted certain items on part-payment and when it came to
lifting of copper ingots, he sought for time to pay the balance and to remove the same
separating it from other things with which it was mixed up. The defendant had to lift 2,000
K.Gs. of copper scrap and 2,000 K.Gs. of copper ingots valued at Rs. 48,503-96. He wrote to
the plaintiff on 28-4-1966 raising objections regarding percentage of copper contents in the
articles. The plaintiff intimated to the defendant on 12-9-1966 stating that no certificate for
purity of the metal would be given and the material was sold on “as is and where is”
condition. In spite of repeated reminders and demands, the defendant did not take delivery of
the remaining goods and remit the value. The letter dated 22-11-1966 to the defendant also
did not meet with favourable response. Therefore, the plaintiff resold copper tubes and copper
ingots through an advertisement dated 30th December, 1966 to M/s. Karnataka Hardware,
Avenue Road, Bangalore. By the said resale, the plaintiff incurred loss of Rs. 8,643-96. The
plaintiff got issued a legal notice to the defendant to make good the loss. The defendant did
not. Hence, the plaintiff instituted the suit for recovery of Rs. 8,643-96 less Rs. 500/- being
the initial deposit by the defendant. The plaintiff claimed, in all, Rs. 8,143-96 ps. from the
defendant along with costs and interest.
The defendant contended that the suit was not tenable. According to him, what was
offered was copper scraps and copper ingots in the advertisement and what was found at the
spot was alloy and not pure copper. Therefore, he contended that the plaintiff committed
breach of contract. He further contended that the plaintiff did not have right to re-sell and that
compensation, if any, could only be recovered under the general principles contained in S. 73
of the Indian Contract Act, 1872 (hereinafter referred to as the ‘Act’). According to him,
Section 54 of the Sale of Goods Act, 1930 was not applicable. The defendant, according to
him, was not liable to pay any damages. On the other hand, he claimed compensation of Rs.
1,000/-.
G.N. SABHAHIT, J. – 8. The points, therefore, that arise for my consideration in this appeal
are:
(1) Whether the Courts below were justified in holding that the defendant committed
breach of contract?
(2) Whether the learned Civil Judge was justified in dismissing the suit for damages?
- It is true that in the advertisement given by the plaintiff, it is specifically mentioned
that what was offered for sale was copper scraps and copper ingots. It is further true that
there was no clause in the tender stating that the goods were sold on “as is and where is”
condition. It is also on record that the parties were not allowed to inspect the goods before
offering their tender. The fact, however, remains that after the tender of the defendant was
accepted he had occasion to inspect the goods and he lifted part of the goods and when he
came to lifting of copper scraps and copper ingots, instead of raising any protest, he prayed
for extension of time to make payment and to lift the goods. That would clearly show that the
defendant knew that what was offered was the material on “as is and where is” condition.
Hence, the Courts below have rightly rejected the contention of the defendant that he was not
offered copper scraps and copper ingots of cent per cent purity and as such the plaintiff
committed the breach of contract. I have no reason to differ.
- It is no doubt true that it is the plaintiff who has come to the Court claiming damages.
The first question that would arise for my consideration is whether, under Section 54(2) of
the Sale of Goods Act, the goods had already passed on to the ownership of the buyer. - Thus we have to find out whether the seller exercised his right of lien or stoppage in
transit on the facts of this case. (The court re-produced sections 19 and 20 of the Act.)
12-A. Thus by reading Ss. 19 and 20 of the said Act, it becomes obvious that in this case
an offer was made by advertising to sell all the articles in question. Thereafter, a tender was
given by the defendant and his tender was accepted. Therefore, there is an unconditional
contract of sale and there were, no doubt, stipulations for payment of price and delivery of
goods subsequently. In such a case, the property in the goods passes on to the buyer and
hence Section 54 of the Act comes into play. It is on record that the plaintiff issued a notice
to the defendant as per Ex. D-10 on 22-11-1966 making his intention clear that the buyer must
lift the goods on payment as otherwise he will have to resell the goods and the defendant shall
be liable for any loss caused. That satisfied the condition mentioned in Section 54(2) of the
Act. Thereafter, however, it was made clear by a notice to the defendant that if he did not lift
the goods within three days, his contract would be treated as cancelled. That is by Ex. D-8
dated 12-9-1966. Therefore, since the goods were not lifted by the defendant, the contract
came to an end on or about 15-9-1966. Within a reasonable time thereafter the company
should have resold the goods by advertising it. But the evidence on record shows that the
advertisement was inserted only on 30-12-1966, i.e., after nearly three months. - The learned Advocate appearing for the respondent-defendant urged before me that
this was not re-sale within a reasonable time as contemplated under S. 54(2) of the Act. It is
all the more so, according to him, because P.W. 2, the person who purchased the goods in the
re-sale has clearly stated in his evidence that the prices were more three months prior to his
giving the tender for resale, and, thereafter, the prices came down. Therefore it is clear from
the evidence on record that the prices were falling from August 1966 and the plaintiffcompany delayed for three months therefrom to give the advertisement, knowing fully well
that the prices were falling; for P.W. 2 has stated that the prices were a little low at the time
when he gave his tender and that the prices were a little more earlier. P.W. 2 is witness
examined by the plaintiff. Making allowance for his interestedness, it is obvious that the
prices were more in about September 1966 when the breach of contract occurred. - It is needless for me to point out that a duty lay on the plaintiff to mitigate the
damages. Even in view of S. 54(2), it was the duty of the plaintiff to see that re-sale was
effected within a reasonable time especially so, when the prices were falling for the relevant
material. Three months delay, therefore, on the facts of this case, is certainly inordinate and
re-sale has not taken place within a reasonable time as contemplated in Section 54(2). It is
relevant to mention in this context that what was the ruling price in about September 1966 is
not brought on record by the plaintiff though P.W. 2, as stated above, admitted that the prices
were more at that time. The difference claimed as damages on the facts of this case, is also
not much. That being so, the learned Civil Judge having regard to the probabilities has
observed that if the goods were re-sold in September 1966 within a reasonable time, the
plaintiff would not have incurred any loss whatsoever. At any rate, since the burden of
proving the damages was on the plaintiff and he has not placed any evidence on record in that
behalf, the learned Civil Judge has rightly proceeded to disallow the suit for damages.
- As explained above, there has been unreasonable delay in re-selling, on the facts of
the present case, when the market price was falling. Hence, the value realised on re-sale does
not afford a good ground to fix the damages. There is no evidence on record placed by the
plaintiff to show the ruling price of the commodity at the time when there was breach of
contract. The plaintiff has come to Court. The burden is on him to prove the alleged damages
and since he has not placed any material evidence to show that he has suffered damages, he
has to fail and the learned Civil Judge has rightly held so. I have no reason to differ. - The learned counsel appearing for the respondent-defendant submitted that S. 54(2) of
the Sale of Goods Act should be read with Section 73 of the Act. It may be stated in this
context that Section 73 contains the general principle with regard to fixing up of damages,
whereas Section 54 speaks of specific case of moveable property sold. Section 54 is more
specific whereas Section 73 is general in nature. Therefore, Section 54 prevails over Section
73 though both the sections are based on the same general principle. - In the result, therefore, I am constrained to hold that the appeal is devoid of merits and
is liable to be dismissed and I dismiss the same.
