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1980 Supreme(All) 63

IN THE HIGH COURT OF ALLAHABAD
A. Banerji, J.
DHARAMPAL AND CO., AGRA - Appellant
Versus
FIRM KILA GATLA RAM CHANDRA RAO AND CO., VIZIANAGRAM - Respondents
Second Appeal 477 Of 1969
Decided On : 01/29/1980

Advocates Appeared:
B.DAYAL, V.Saha

A buyer cannot repudiate a contract for the sale of goods without first examining the goods to ascertain whether they are in conformity with the contract.

Headnote:

SALE OF GOODS ACT, 1930 - SECTION 41 - INSPECTION OF GOODS - BUYER'S RIGHT TO EXAMINE GOODS - REPUDIATION OF CONTRACT - ESSENTIALITY OF INSPECTION BEFORE REPUDIATION.

Fact of the Case:

Plaintiff and defendant entered into a contract for the purchase of 250 bags of peas at a specific rate, deliverable F.O.R. at Vizianagram. The peas were to be of a specific quality, indicated by the term "friable 6 1/2 annas." The plaintiff dispatched the goods, but the defendant refused to receive or accept them, claiming that they were of inferior quality.

Finding of the Court:

The court held that the defendant could not repudiate the contract without first examining the goods. The defendant had a right to inspect the goods to ascertain their quality, but he failed to do so. The court found that the goods were of the requisite quality and that the defendant had no valid reason to reject them.

Issues: 1. Whether the goods were of specific description and the plaintiff failed to satisfy the defendant about the quality of goods? 2. Whether the defendant was entitled to repudiate the contract without examining the goods?

Ratio Decidendi: 1. The court interpreted Section 41 of the Sale of Goods Act, 1930, which provides that a buyer has a right to examine the goods for the purpose of ascertaining whether they are in conformity with the contract. The court held that this right of inspection arises only after the buyer has taken delivery of the goods or when they are tendered for delivery. 2. The court held that the defendant could not repudiate the contract without first examining the goods. The defendant had a duty to inspect the goods and determine whether they were of the contracted quality. The defendant's refusal to examine the goods amounted to a breach of contract.

Final Decision: The court allowed the appeal, set aside the judgment and decree of the lower appellate court, and restored the judgment and decree of the trial court. The defendant was ordered to pay the plaintiff the amount claimed as damages.

A. BANERJI, J.

( 1 ) THIS is a second appeal by the plaintiff. The plaintiffs suit for recovery of Rs. 1,850/- as damages from the defendant-respondent firm was decreed by the trial Court with costs and pendente lite and future interest at the rate of 4% per annum. On appeal by the defendant the judgment and decree of the trial Court were set aside and the suit was dismissed with costs throughout. The plaintiff aggrieved by the above decision has come up in appeal.

( 2 ) BRIEFLY stated the relevant facts are as follows. A contract was entered into between the parties by means of a telegram for the purchase of 250 bags of peas at the rate of Rs. 37/- per bag, deliverable F. O. R. at Vizianagram, The buyer namely the defendant-respondent indicated in the telegram that the peas should be friable at 6 1/2. This contract was arrived at on the 3rd february, 1962. On the same day a wagon was indented by the plaintiff for the despatch of goods. He received the wagon on 14th February, 1962 and loaded the peas and despatched the peas the same day. The wagon reached Vizianagram on 16th February, 1962, Meanwhile the plaintiff had also sent a Hundi to the defendant and despatched the R. R. (Railway Receipt) for collection through Bank. The defendant did not receive or accept the goods at Vizianagram and the defendant did not also honour the Hundi or take the R. R-from the Bank. The defendants stand was that the peas sent were not of the contracted quality and therefore, he sought to repudiate the contract. The plaintiff had to send a messenger to Vizianagram who took delivery of the consignment of the goods after paying demurrage to the Railways and sold it to a local dealer at a lower rate with the result that he incurred loss in the price of the goods also. He, therefore, in this suit claimed a sum of Rs. 833/-as demurrage, Rs. 142/- as miscellaneous expenses and Rs. 875/- as the difference in price, totalling a sum of Rs. 1,850/-, The plaintiffs stand was that the defendant could not refuse to take delivery of the goods and was not entitled to repudiate the contract. He was afforded an opportunity of examining the goods but he did not avail of the same. The quality of the goods sent was according to the contract.

( 3 ) THE stand taken in defence was that the goods were of inferior quality and unless the plaintiff satisfied the buyer that the goods were of the quality which he had contracted for he could not be compelled to take the goods and in any event was not liable for any of the damages claimed by the plaintiff.

( 4 ) THE trial Court held that the time was not the essence of the contract and the quality of the goods supplied was not inferior to the contracted quality, the plaintiff suffered damages as claimed and the Court had territorial jurisdiction to try the suit. Lastly, it was held that the plaintiff was entitled to the damages and the suit was accordingly decreed. The lower appellate court formulated two points for consideration. The first point was about the territorial jurisdiction of the Court at Agra to try the suit. This was held in the affirmative and in favour of the plaintiff. The second point was whether the contract was in respect of the goods of specific description and the plaintiff failed to satisfy the defendant about the quality of goods, if so, its effect. This was answered by holding that the goods contracted for purchase, were of specific description and the plaintiff failed to satisfy the defendant about the quality of the goods and as such was not entitled to any amount claimed by way of damages.

( 5 ) I have heard Mr. Bhupeshwar Dayal, learned counsel for the appellant. No one has appeared for the defendant-respondent although the notice was duly served on 19th October, 1977. Even after personal service no one has appeared to represent the defendant.

( 6 ) THE question whether goods of specific description were contracted for sale would normally be a question of fact but where a question is raised as to














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