1983 Supreme(Del) 131

High Court Of Delhi
RUDNAP EXPORT-IMPORT - Appellant
Versus
EASTERN ASSOCIATES COMPANY - Respondent
Decided On : 04/26/1983

Headnote:

SALE OF GOODS ACT, 1930 - SECTIONS 4, 2(4), 61 - FOREIGN COMPANY - SUIT BY - AUTHORISATION OF REPRESENTATIVE - EVIDENCE ACT, 1872 - SECTION 85 - PRESUMPTION - LIMITATION ACT, 1963 - SECTION 19 - ACKNOWLEDGMENT OF LIABILITY - BILL OF LADING - TRANSFER OF TITLE - PRINCIPAL AND AGENT - DISTINCTION - CONTRACT OF SALE - ESSENCE OF.

Fact of the Case:

Plaintiff, a Yugoslav Enterprise, filed a suit against the defendants, a partnership firm, for recovery of the balance of price of goods and interest. The defendants contended that the plaintiff could not sue and be sued in its own name, the suit was barred by time, and the suit was bad for misjoinder of causes of action. The plaintiff claimed that it was a legal person, its representative was duly authorized to institute the suit, and the suit was within time.

Finding of the Court:

1. The plaintiff was a legal person and the suit was instituted on its behalf by a duly authorized person. The power of attorney executed by the Director General of the plaintiff enterprise in favor of the plaintiff's representative in India was duly executed and authenticated. [Issue No. 1] 2. The defendants were acting as agents and not as purchasers in the transaction of sale of 23 tractors supplied by the plaintiff to the Andhra Pradesh Government. [Issue Nos. 7 and 8] 3. The plaintiff was not required to provide after-sales service to the Andhra Pradesh Government. It was the responsibility of the defendants. [Issues 9 and 10] 4. There was no defect in the tractors supplied by the plaintiff. [Issue No. 11] 5. The plaintiff was entitled to the price of the two dumpers, i.e., Rs. 1,21,800.00, if the suit was within time. [Issue Nos. 12 and 13] 6. The plaintiff was entitled to interest @ 6% on the price of two dumpers from the date of delivery of the bill of lading to the defendants till the date of payment if the claim was within time. [Issue No. 15] 7. The suit for the price of tractors was not maintainable as there was no transaction of sale between the plaintiff and the defendants. [Issue No. 2] 8. The suit for the price of dumpers was barred by time. [Issue No. 2] 9. The suit was not bad for misjoinder of causes of action. [Issue No. 3] 10. The plaint contained all the relevant facts and particulars required for the decision of the suit. [Issue No. 4] 11. The suit was maintainable. [Issue No. 5] 12. Proper court fees had been paid. [Issue No. 6] 13. The plaintiff was not entitled to any amount from the defendants. [Issue No. 14]

Issues: 1. Whether the plaintiff was a legal person and the suit was instituted on its behalf by a duly authorized person? [Issue No. 1] 2. Whether the defendants were the purchasers of 23 tractors or they were only agents of the plaintiff in the sale transaction of these tractors to the Andhra Pradesh Government. [Issue Nos. 7 and 8] 3. Whether the plaintiff was required to provide after-sales service in respect of tractors? [Issue No. 9] 4. If answer to issue No. 9 is in the affirmative, whether the plaintiff has performed its obligations in respect of after-sales service? [Issue No. 10] 5. Whether the plaintiff supplied defective machinery, if so, what was the defect and what is its effect on the suit? [Issue No. 11] 6. Whether there has been a valid contract between the plaintiff and defendants in respect of supply of dumpers, if so, what were its terms, nature and effect? [Issue No. 12] 7. Whether the plaintiff issued invalid invoice contrary to the instructions of the defendants and contrary to the import licence and if so whether the dumpers could not be cleared on this account? [Issue No. 13] 8. To what amount is the plaintiff entitled? [Issue No. 14] 9. Whether the plaintiff is entitled to any interest and if so, at what rate? [Issue No. 15] 10. Whether the suit is barred by time? [Issue No. 2] 11. Whether the suit is bad for misjoinder of causes of action? [Issue No. 3] 12. Whether the plaint is lacking in material particulars and if so with what effect? [Issue No. 4] 13. Whether the suit as laid is not maintainable (vis-a-vis preliminary objection No. 9 in the written statement)? [Issue No. 5] 14. Whether proper court-fee has not been paid? [Issue No. 6] 15. Relief. [Issue No. 16]

Ratio Decidendi: 1. A contract of sale is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price paid or promised to be paid. [Issue Nos. 7 and 8] 2. The true relationship of the parties in a contract of sale has to be gathered from the nature of the contract, its terms and conditions. [Issue Nos. 7 and 8] 3. The essence of a contract of agency to sell is the delivery of goods to a person who is to sell them, not as his own property but as the property of the principal who continues to be the owner of the goods and will therefore be liable to account for the sale proceeds. [Issue Nos. 7 and 8] 4. A bill of lading is a document of title to the goods according to the definition in S. 2 (4) of the Sale of Goods Act, 1930. [Issue Nos. 12 and 13] 5. Under S. 61 of the Sale of Goods Act, 1930, the plaintiff is entitled to interest on the price of two dumpers. [Issue No. 15]

Final Decision: The suit of the plaintiff regarding the price of 23 tractors and interest thereon was dismissed as there was no transaction of sale between the plaintiff and the defendants. The suit of the plaintiff regarding the price of two dumpers and interest was dismissed as the plaintiff's claim was barred by time. In the circumstances of the case, the parties were left to bear their own costs.