The main legal point established in the judgment is the distinction between the rights of the unpaid seller under S. 46(1)(c) and the mode of resale under S. 54(2) and S. 54(4) of the Sale of Goods Act, emphasizing the seller's right to recover damages, duty to mitigate damages, and calculation of damages based on the difference between the contract price and the price obtained through resale.

Balakrishnan, J. - This appeal is directed the judgment and decree passed by the Additional Sub-Judge, Cochin in O.S. No. 38 of 1979. The plaintiff, Board of Trustees of the Cochin Port Trust, represented by its Chairman, filed suit for realisation of an amount of Rs. 46,343.23 with interest at the rate of 15% per year. The plaintiff on 12-11-1975 invited tenders for the sale of non-propelled floating crane. The defendant submitted his tender on 5-1-1976 by which he offered to purchase the crane for Rs. 1,71,000/-. He deposited Rs. 1,200/- as earnest money. The tender submitted by the defendant was accepted by the plaintiff and this was communicated to him by letter dated 24-2-1976 and he was requested to deposit the balance amount within 30 days of the receipt of the letter. The defendant did not respond to the letter of acceptance. The plaintiff, therefore, sent a letter to the defendant on 11-6-76 informing him that the earnest money would be forfeited and that the loss sustained would be recovered from him. The plaintiff sold the crane to one V. Veerappan of Madras for an amount of Rs. 1,23,456.77. Plaintiff sustained a loss of Rs. 47,543.23 Ps. After adjusting the earnest money, the plaintiff sued for the balance amount.

2. The defendant filed written statement contending that there was no completed contract. He contended that the tender was not accepted within 30 days as stipulated and the letter dated 24-2-76 was in the nature of a counter offer and it was not accepted by the defendant. The contract must be deemed to have terminated on 24-3-76. The letter of the plaintiff dated 11-6-76 terminating the contract was illegal. The defendant was not aware of the alleged sale of the crane to Veerappan of Madras. There was no retendering and the crane should have been sold in open auction. Plaintiff was bound to return the earnest money deposit to the defendant. Plaintiff did not take any steps to mitigate the damages and the maintainability of the suit was challenged by the defendant.

3. The Plaintiff produced series of correspondence and they are marked as Exts. A. 1 to A. 12. P.W. 1 was examined on the side of the plaintiff and D.W. 1 was examined on the side of the defendant. The court below held that there was completed contract between the plaintiff and the defendant regarding the sale of a non-propelled floating crane and the plaintiff had performed his part of the contract and the default was made by the defendant. However, the claim for damaged by the plaintiff was rejected by the court below for the reason that the plaintiff did not give notice of the resale to the defendant and that the plaintiff did not take any steps to mitigate damages. The court below held that, as there was no valid resale, the plaintiff cannot complain that it had sustained loss and on these premises the suit was dismissed with costs.

4. The short question that arise for consideration is whether the plaintiff is entitled to get 'damages' viz., the amount by which the contract price exceeded the resale price and the expenses for the resale. The definite contention of the respondent is that the plaintiff-appellant conducted the resale-as per S. 54(2) of the Sale of Goods Act and the sale was without notice to the respondent and if there was no such notice the unpaid seller is not entitled to recover damages. On the other hand, the appellant contended that the resale was not under Sub-section (2) of S. 54 of the Sale of Goods Act but it was under Sub-section (4) of S. 54 of the Sale of Good Act as the seller expressly reserved a right of resale in the contract.

5. In order to appreciate this distinction it may be necessary to understand the rights of unpaid seller, which are enumerated under S. 46(1) of the Sale of Goods Act. S. 46(1) of the Sale of Goods Act reads as follows :

"46. Unpaid seller's rights - (1) Subject to the provisions of this Act and of any law for the time being in force, notwithstanding that the property in goods may