1977 Supreme(Cal) 219

High Court Of Calcutta
Padma Khastgir
DAGA FILMS - Appellant
Versus
LOTUS PRODUCTION - Respondent
Suit 288  Of  1970
Decided On : 07/04/1977

The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller or when after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them.

Headnote:

SALE OF GOODS ACT - SECTION 42 - OUTRIGHT SALE - COUNTER-CLAIM - CIVIL PROCEDURE CODE, 1908 - ORDER 8, RULE 6-A - MAINTAINABILITY - ASSIGNMENT OF BENEFITS OF CONTRACT - TRANSFER OF PROPERTY ACT, SECTION 130.

Fact of the Case:

The plaintiff, a film distributor, entered into an agreement with the defendant No. 1, a film producer, for the distribution of a film titled 'juari' in the Bengal Circuit territory. Subsequently, the parties agreed to convert the contractual obligation into an outright sale. The plaintiff paid a sum of Rs. 60,000/- to the defendant No. 1 and took delivery of 8 prints from Messrs. Famous Cine Laboratories and Studios Private Ltd., as instructed by the defendant No. 2. The plaintiff also took delivery of one loan print and 6 extra prints by paying a total sum of Rs. 18,334.40. After the release of the film, the plaintiff complained about the defective nature of the prints and refused to pay the balance amount of Rs. 30,000/- to the defendant No. 2. The defendant No. 2 filed a counterclaim for the balance amount and also claimed damages for the plaintiff's failure to return the loan prints.

Finding of the Court:

The court held that the plaintiff had accepted the goods and had not exercised its right to reject them under the Sale of Goods Act. The court also held that the counter-claim was maintainable under Order 8, Rule 6-A of the Civil Procedure Code, 1908, as amended in 1976. The court further held that there was no assignment of the benefits of the contract by the defendant No. 2 in favor of Messrs. Famous Cine Laboratories and Studios Ltd. to the extent of Rs. 90,000/-.

Issues: 1. Whether the plaintiff had accepted the goods and had not exercised its right to reject them under the Sale of Goods Act? 2. Whether the counter-claim was maintainable under Order 8, Rule 6-A of the Civil Procedure Code, 1908, as amended in 1976? 3. Whether there was an assignment of the benefits of the contract by the defendant No. 2 in favor of Messrs. Famous Cine Laboratories and Studios Ltd. to the extent of Rs. 90,000/-?

Ratio Decidendi: 1. The court held that the plaintiff had accepted the goods and had not exercised its right to reject them under the Sale of Goods Act, Section 42, which provides that the buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller or when after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them. 2. The court held that the counter-claim was maintainable under Order 8, Rule 6-A of the Civil Procedure Code, 1908, as amended in 1976. The court noted that under the new amendment, a counter-claim by itself was competent and was enforceable by way of a separate suit. The court also noted that the plaintiff had not sought for leave to file an additional written statement in answer to the counter-claim of the defendant nor had the plaintiff at any time before the issues were settled applied to the court for an order that such counter-claim may be excluded. 3. The court held that there was no assignment of the benefits of the contract by the defendant No. 2 in favor of Messrs. Famous Cine Laboratories and Studios Ltd. to the extent of Rs. 90,000/-. The court noted that the letter dated 7th April 1970, in which the plaintiff and the defendant No. 2 agreed that the plaintiff would pay to Messrs. Famous Cine Laboratories and Studios Pvt. Ltd., Mahalakshmi, Bombay on account of the defendant No. 2 a sum of Rs. 90,000/- against delivery of 12 brand new prints, did not amount to an assignment of the benefits of the contract. The court also noted that neither in the pleadings, correspondence nor in the evidence it has ever transpired that there has been an assignment of the benefits of the contract by the defendant No. 2 in favor of Famous Cine Laboratories and Studios Ltd. to the extent of Rs. 90,000/-.

Final Decision: The court dismissed the plaintiff's claim in the suit and passed a decree for the sum of Rs. 70,000/- in favor of the defendant No. 2 together with interim and further interest @ 6 per cent and cost against the plaintiff.