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2012 Supreme(MP) 811

MADHYA PRADESH HIGH COURT AT INDORE BENCH
S.K.Seth, J.
Sanghi Brothers - Appellant
Versus
Methodex System Ltd. - Respondent
F. A. No. 253 of 1999
Decided On : 30-04-2012

The central legal point established in the judgment is that the sale of goods, particularly computer peripherals, must include the necessary components for their functionality, and the absence of such components may render the goods unworthy of payment.

Headnote:

Computer Peripherals - Contract Dispute - [Indian Contract Act, 1872 - Section 2(h), Sale of Goods Act, 1930 - Section 2(4), Section 19] - The court discussed the provisions of the Indian Contract Act, 1872 and the Sale of Goods Act, 1930, particularly focusing on the definition of contract, sale of goods, and the rights and obligations of the parties in a contract for the sale of goods. The court emphasized the importance of fulfilling the terms of the contract and the requirement for goods to be functional and usable to claim recovery.

Fact of the Case:

The respondent company offered to supply computer peripherals to the appellant, and a purchase order was placed. Dispute arose regarding the installation and functionality of the peripherals, leading to a lawsuit for recovery of payment.

Finding of the Court:

The court found that the supply of peripherals alone, without the proper installation of the Unix Unify operating system, rendered the peripherals useless and not worthy of payment. The court emphasized the interconnectedness of the peripherals and the necessity of the operating system for their functionality.

Issues: The issues revolved around the proper supply and installation of computer peripherals as per the contract, and the entitlement to recovery of payment for the peripherals.

Ratio Decidendi: The court held that the sale of peripherals without the necessary operating system did not warrant payment, emphasizing the interconnectedness and functionality of the peripherals as a whole.

Final Decision: The appeal was allowed, and the suit filed by the respondent/plaintiff was dismissed with costs throughout.

JUDGMENT :

This appeal arises out of the judgment and decree passed by the XIIIth Additional District Judge to the Court of District Judge Indore in Civil Suit No. 118B/93 decreeing the suit of the respondent/plaintiff for recovery of Rs. 79,750/- together with interest @ 18% p. a.

2. About the following facts there is no dispute. Appellant is a registered company so also the respondent. Respondent Company deals with the manufacturing and sales of office equipments and computers. Respondent company offered to supply computer peripherals. Said offer was accepted by the appellant and a purchase order was placed on 8-6-1989 for supply of following :

 

SI. No Particulars Qnty. Price Total
1 Terminals (Graphics) 4 12,500/- 50,000/-
2 Cartridge Tape Drive (Internal Xenix Driver) (40MB) 1 18,000/- 18,000/-
3 Dot Matrix Printers      
  (a) MSP-45, 132 Col. 240 CPS 2 18,000/- 36,000/-
  (b) MSP-55, 312 Col. 300 CPS 1 20,500/- 20,500/-
4 Unix and Unify (with 'C' dev. System) Installation Charges.     5,000/-
      Total 1,29,500/-

      Out of this, Rs. 32,250/- was paid in advance. Out of 4 Terminals, one was found damaged. No other fact is admitted.

3. It was stated that the supply shall be made within two weeks and the vendor will install Unix and Unify with "C" Dev in the existing machine [386 Computer] and provide training on the O/S [i.e. the Operating System]. A sum of Rs. 32,250/- was paid in advance. According to respondent/plaintiff, peripherals were installed except the Unix OS because of the incompatibility of the machine. They therefore, made two suggestions to get back the terminal and also to reduce the installation charges of Rs. 5000/- for Unix and Unify system from the Bill or use the Terminals by upgrading the existing system with nominal costs with HCL Magnum Mini Computer and demanded payment of balance amount. When it was not forthcoming, the suit was instituted out of which this appeal arises.

4. Appellant, except the admitted facts, denied the entire claim of the respondent/plaintiff. It was stated that peripherals were not supplied as per order. It was alleged before making the offer, vendor's engineers had inspected the existing Machine (386 Computer) and assured that the Unix Unify OS would be installed in the Machine for the proper use and function of peripherals at different locations but the vendor could not install the Unix Unify OS consequently other peripherals were of no use for the appellant. Even otherwise, also 3 Terminals (one was already damaged/defective) were junk without parallel (Printer) Port; as against the requirement of Cartridge Tape Drive of 40 MB, the CTD supplied 60MB drive with Rs. 2,000/- extra charges. It was pointed out that so called issue of incompatibility of hardware was never raised, otherwise appellant would not have placed the order for supply and installation of peripherals. Old and used Dot Matrix printers were supplied instead of new ones. Thus appellant denied that respondent/plaintiff was entitled to any sum; on the contrary he was liable to pay damages to the appellant to the tune of Rs. 5,17,886/- as per demand notice and prayed for dismissal of the suit with special costs.

5. At this stage it is pertinent to point out that appellant had also filed a separate suit for damages as aforesaid. It was registered as C.S. No. 3B/94. Learned Court below as per order-sheet dated 14-9-1994 clubbed together both suits for consolidated hearing and after recording evidence by common judgment, dismissed the suit of the appellant where as suit of the respondent/plaintiff was allowed as mentioned above. No separate appeal was preferred by the appellant against dismissal of suit; hence decree of the trial Court to that extent has become final and need not detain us any longer.

6. Now coming to the case in hand, respondent, Plaintiff examined only Ravindra Kumar Manan (PI) General Administration whereas appellant examined Jai Kumar, Director in support of their cases and prov





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