1989 Supreme(MP) 632

IN THE HIGH COURT OF MADHYA PRADESH
T. N. SINGH, J.
Kaluram Bhagwati Prasad (Firm) - Appellant
Versus
Firm Balramdas Laxmi Narain - Respondent
F. A. No. 84 of 1978 (G)
Decided on : 30-06-1989

Headnote:(1) Sale of Goods Act, 1930 – S. 5 – nature of the contract – should be pleaded and proved by plaintiff.

       (2) Sale of Goods Act, 1930 – S. 17 (2), 56 and 60 – buyer's act not 'wrongful' – exercise of right under S.17 (2) (a) is statutory – no claim for damages lies.

       (3) Sale of Goods Act. 1930 – S. 2 (2) – “delivery” – goods lying at railway station – Hundi not honoured – delivery has not taken place.

       (4) Sale of Goods Act, 1930 – S. 54 (2) and 17 (2) – right to re – sell contemplated under S. 54 (2) – arises when seller has no complaint against buyer in terms of S. 17 (2).

        Short Note

       1. This is plaintiff's appeal whose suit apparently based on section 56 of the Sale of Goods Act, 1930, for short, the 'Act' has been dismissed.

       2. Held : Before adverting to the other provisions of the Act, extracted or referred hereinabove, a brief mention may be made of section 5 of the Act as that has definitely signal relevance to plaintiff's default in pleading and proving his case. It is contemplated thereunder that a contract of sale of goods may be made in writing or by word of mouth, partly in writing and partly by word of mouth and, as pointed out at the outset, in the plaint, no care was taken to give the origin and formation of the contract in any manner. Indeed what was the offer made and how it was made or in what terms it was accepted are also not to be read in the plaint. For enforcing the contract, it was also the bounden duty of the plaintiff to mention all those particulars in the plaint to prove the case, pleaded in the plaint. In this context, let it be recalled that while the plaintiff sought to justify delivery of goods contracted for in instalments (through four different railway receipts) the defendant's case was that delivery was to be made of the goods despatched in a single wagon as that would have cost less to the defendant In Ex. D/1, plaintiff's breach in that regard was complained, but that remained unexplained.

       3. There cannot be any doubt that under section 56, claim for damages for non – acceptance would lie only when the buyer acts "wrongfully" in refusing to accept goods contracted to be purchased. In the instant case, the act of the defendant cannot be said to be "wrongful" because he had merely exercised his statutory rights contemplated under section 17 (2) (a). There is also nothing on record to afford to the plaintiff protection of section 54 (2) as the plaintiff did not exercise his right to re – sell thereunder. On evidence it is established that the plaintiff took recourse to re – sell accepting the position that the goods supplied were of inferior quality and on that account reducing the price payable therefore by the defendant. The right to re – sell contemplated under section 54 (2) would arise in a case in which the seller can have no complaint against the buyer in terms of section 17 (2) of the Act. The moment it is established that the "implied condition" contemplated under section 17 (2) is breached by the seller, the contract shall become enforceable and right to re – sell contemplated under section 54 (2) cannot be enforced by him against the buyer.

       4. However, according to me, plaintiff's claim founded on section 56 is refuted also by section 60. Admittedly, in this case, the goods had not been delivered to the defendant. The goods dispatched by the plaintiff were lying at the Railway Station and delivery could not be taken by the defendant without honouring the Hundi and taking from the Bank the Railway Receipts to obtain delivery from the railways of the goods despatched. Section 2 (2) defines the term "delivery" to mean "voluntary transfer of possession from one person to another". In this case transfer of possession of the goods despatched had not taken place in favour of the defendant. In the instant case, as discussed above, the defendant had repudiated the contract and had himself served the notice through his lawyer on the plaintiff for breach of the contract. Section 60 is already extracted above. The word "repudiate" used in the said provision signifies "duty or obligation owed to other party" (See Black's Law Dictionary, Fifth Edition page 1171). Black also gives another meaning of the term – "the act of a buyer or seller in rejecting the contract of sale either partially or totally". For the word "rescind", which occurs in the above extract, meaning is also given in Black at page 1174. It means – (1) to declare a contract void in its inception and to put an end to it as though it never were; (2) Not merely to terminate it and release parties from further obligations to each other but to abrogate it from the' beginning and restore parties to relative positions which they would have occupied had no contract ever been made. In the instant case, on evidence, the plaintiff must be deemd to have treated the contract sued upon to be "rescinded". Indeed, his claim for "damages for the breach" contemplated under section 60, must fail because the defendant is found not to have breached the contract. I have no doubt that section 60 has to be read subject to the provisions of section 56 and in the instant case it has been found that the defendant had not acted "wrongfully" to refuse to accept delivery so as to render him liable for damages under section 56. Appeal dismissed.