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1959 Supreme(AP) 214

Andhra Pradesh High Court
Judges : BHIMASANKARAM, KRISHNA RAO
Alapaty Ramamoorthy - Appellant
Versus
Polisetti Satyanarayana - Respondent
Decided On : 11-06-59

The seller of goods is not bound to deliver them until the buyer applies for delivery, unless there is an express contract to the contrary.

Headnote:

SALE OF GOODS ACT - SECTION 35 - APPLICATION FOR DELIVERY - CONSTRUCTION OF CONTRACT - DAMAGES FOR NON-DELIVERY.

Fact of the Case:

The plaintiff, a registered firm, sued the defendants, businessmen, for Rs. 10,192-9-0, which was decreed in part by the lower Court. The claim arose from the purchase of gunnies, breach of contract for non-delivery of goods, and interest. The defendants denied liability, asserting that the plaintiff did not demand or offer to take delivery, thereby committing breach of contract.

Finding of the Court:

The Court held that the defendants were not liable for damages for non-delivery as the plaintiff did not apply for delivery, which was obligatory upon him under section 35 of the Indian Sale of Goods Act. The Court found that the contracts between the parties did not explicitly say anything about the buyer's application for delivery and that a correct construction of them did not relieve the buyer of his obligation in that respect.

Issues: 1. Whether the plaintiff was obligated to apply for delivery under the contracts of sale. 2. Whether the defendants were liable for damages for non-delivery in the absence of an application for delivery by the plaintiff.

Ratio Decidendi: 1. Section 35 of the Indian Sale of Goods Act provides that the seller of goods is not bound to deliver them until the buyer applies for delivery, unless there is an express contract to the contrary. 2. The contracts of sale between the parties did not contain any express terms relieving the buyer of his obligation to apply for delivery. 3. The plaintiff's failure to apply for delivery constituted a breach of contract, and the defendants were not liable for damages for non-delivery.

Final Decision: The Court allowed the defendants' appeals and modified the lower Court's decree by decreeing the suit for Rs. 3,121-8-0 with proportionate costs and subsequent interest at six percent per annum against the first defendant and dismissing the suit with costs as against defendants 2 and 4.

KRISHNA RAO, J.

( 1 ) THESE three appeals have been preferred respectively by the plaintiff, by the first defendants and by defendants 2 and 4 and arise out of the plaintiff s suit to recover Rs. 10,192-9-0 from the defendants, which has been decreed in part by the lower Court. The plaintiff is a registered firm doing business at vijayawada under the name and style "alapati Ramamoorthy Geli Krishnamurthy".

( 2 ) THE first defendant is a businessman at the same place and defendants 2 to 4, who are merchants residing at Guntur, Rajampet and Vijayawada respectively, are alleged in the plaint to be the first defenant s confederates. The thir defendant died during the pendency of the suit and defendants 5 to 8 are his legal representatives. The claim for Rs. 10,192-9-0 against defendants I to 4 falls under three heads : (1) Rs. 5,840-10-0 being the price of 25 bales of gunnies purchased by the first defendant from the plaintiff and delivered to him on 22nd April, 1946 ; (2) Rs. 2,625 being the total of the damages for breach of contract by non-delivery of the goods under four contracts of sale of gunnies entered into between the plaintiff and defendants I to 4 respectively on 4th April, 1946 and (3) interest at 12 per cent, per annum on the aforesaid amounts until the date of the suit. The plaintiff s case was that although the four contracts mentioned under the second head were entered into in the names of defendants 1 to 4 respectively, the real contracting party was the first defendant alone and defendants 2 to 4 were merely name-lenders. On this allegation, he asked for a decree for the entire amount of the damages in respect of all the four contracts, together with interest, against the first defendant and for Rs. 750, Rs. 562-8-0 and rs. 562-8-0 out of the amount, together with interest, in respect of 3 of the contracts against the respective defendants 2 to 4 jointly and severally with the first defendant. The only defence of the fist defendant as regards the Rs. 5,840-10-0 under the first head which was claimed from him alone was that he had made a payment of rs. 3,300 on 7th April, 1946, which the plaintiff had not given credit to. He admitted his liability for the balance and deposited Rs. 2,863 in the lower Court during the pendency of the suit as the amount due from him inclusive of interest. As regards the second head of the claim, the defendants denied that defendants 2 to 4 were name-lenders for the first defendant and asserted that defendants 1 to 4 were the respective contracting parties under the four contracts. Their defence, so far as it is material to these appeals, was that they were under no obligation to deliver the goods as the plaintiff did not demand or offer to take delivery and that the plaintiff himself had therefore committed breach of the contracts. The learned Subordinate judge accepted the contentions of the defendants as regards the first defendant s payment of Rs. 3,300 and as regards defendants 1 to 4 being severally liable under their four respective contracts. But he held that in view of the letters admittedly passed by the plaintiff to the defendants in respect of the four contracts, on the same terms as exhibit B-1 passed to the fourth defendant, there was no obligation on the part of the plaintiff to demand delivery and that the defendants are liable to pay damages at the rate of Rs. 2-8-0 per bale of gunnies as claimed in the plaint. He also upheld the plaintiff s claim based on trade custom for interest at 12 per cent, per annum till the date of the suit. On these findings, he decreed the suit against defendants 1, 2 and 4 and the estate of the third defendant in the hands of defendants 5 to 8 for Rs. 3,713 (Rs. 2,863 plus 850) Rs. 850, Rs. 637-8-0 and Rs. 637-8-0 respectively, together with subsequent interest at six per cent, and proportionate costs.

( 3 ) IN the plaintiff s appeal, the dispute is confined to the first head of his claim and interest thereon till the date of the suit. Th



















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