SALES OF GOODS ACT, 1930

AIR 1991 ORI17 (23/02/1979)

Project By
Name Samarth Vinod Gangrade
Class :- FY BAF ‘A’
Roll No :- 447
Subject :- Law 1

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 INDEX

SERIAL NO. CONTENT PAGE

1 Name of the Case NO.4
2 Citations 4
3 Date of the Case 4
4 Judges 4
5 Parties 4
6 History 4
7 Facts of the case 4
8 Judgement 5
9 Conclusion 7
10 Refrences 8
11 Biblography 8

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> Name of the Case

M/s Jain Mills and Electrical Store V/S State of Orissa

> Citations :-

AIR 1991 Ori 117

> Date of the Case :-

23rd Of February 1979

> Judges :-

V. Gopalswamy

> Parties :-
• Ashok Mukheiji
• A.K. Mishra
• G. Mukherji
• B.B. Ratho
• N. Misra
• S.N. Mahapatra
• G.C. Chopder
• Bhubaneswar Advocates.

> History :-

The plaintiffs prefer this appeal against the judgment dated 28-3-1979 and decree
dated 10-4-1979 passed by the Subordinate Judge, Bhubaneswar, in O.S. No. 41 of
1975 III, disallowing the plaintiffs' claim to the extent of Rs. 47,792.04, while
decreeing the suit in part only for a sum of Rs. 24,099.58.

> Facts of the case :-

• The plaintiffs are the partners representing the registered partnership firm M/s.
Jain Mills and Electrical Stores which deals in electrical goods and supplies
electrical equipment, appliances and materials to Government and semi-
Government Departments and also to the public in general. Defendant No. 2,
the Executive Engineer, Lift Irrigation Electrical.

• On behalf of the State of Orissa (defendant No. 1) invited tenders for supply of

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 electrical goods and in response to the same, the plaintiffs' firm submitted its
quotations on 5-2-1973. Defendant No. 2 accepted the quotations submitted by
the plaintiffs' firm on 5-3-1973 and placed the purchase order in favour of the
plaintiffs
• On 5-3-1973 with the direction that the materials should be supplied by 24-3-
1973. The goods described in plaint Schedule A were despatched in time by
rail, but in the transit, there was some delay and so the said goods reached the
defendants after 30-3-1973.
• The defendants have duly received the plaint schedule goods but in spite of
repeated demands from the plaintiffs for the payment, the defendants did not
pay the price thereof.
• So ultimately the plaintiffs had issued letters to the defendants demanding of
the defendants to return the 'A' schedule goods which the Lift Irrigation
Department was wrongfully withholding without paying the price thereof, the
defendant No. 2 by his letter extended the stipulated period of supply of the
goods which the plaintiffs had not supplied till 7-4-1973.
• Ultimately, on 20-5-1974 the defendant No. 3 had amended the purchase order
No. 812 dated 5-3-1973 so as to include the 'A' schedule goods as well,
indicating therein that the price payable for the same would be at the original
contractual rate. As the prices of the said goods have considerably increased in
the meanwhile, the plaintiffs did not agree to sell them at the prices stipulated
in the original contract and so insisted on their return.
• The plaintiffs contend that in view of the conduct of the defendants, the
plaintiffs are entitled to be paid for the goods at the prevailing market rate as on
the date of Section 80, C.P.C. notice.
• Section 80, C.P.C. notice was issued by the plaintiffs on 16-10-1974. The
defendants received the notice, but neither returned the plaint 'A' schedule
goods, nor paid their price as demanded in the notice.
• So, the plaintiffs filed the suit praying for the return of the plaint 'A' schedule
goods and in the alternative prayed demanding payment of Rs. 66,735.62
towards the market value of the plaint 'A' schedule goods together with interest
at 12 per cent per annum by way of damage from 16-10-1974, the date of issue
of Section 80, C.P.C. notice.
• Hence the suit was filed for Rs. 72,891.62 p. as per the calculation in plaint
schedule B.

> Judgement

• Defendant No. 1 is the State of Orissa and defendant No. 2 is the Executive
Engineer and defendant No. 5 is the Assistant Engineer of the Lift Irrigation
(Electrical), defendant No. 3 is the Executive Engineer, Lift Irrigation Division,
New Capital, defendant No. 4 is the Managing Director and defendant No. 6 is
the Chairman of the Orissa Lift Irrigation Corporation. All the above referred
defendants Nos. 1 to 6 have jointly filed a written statement.
• Defendant No. 2 has placed the purchase order with the plaintiffs by his letter
No. 812 dated 5-3-1973 for supply of the goods, indicating that the goods
mentioned therein should be supplied before 24-3-1973, failing which the
plaintiffs would be liable to pay penalty as per the terms of the agreement. The

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 plaintiffs have defaulted in making the timely delivery of the goods.
• The plaintiffs have so far not delivered cables worth Rs. 75,975.25 (valued at
the rate of the purchase order). As there was some delay in the delivery of the
goods, under Clause 2 of the agreement the plaintiffs were liable to pay the
penalty.
• As the quantity of goods supplied by the plaintiffs was less than the goods
ordered for, the defendants suffered a loss to the extent of about rupees one lakh
due to such short supply, due to the rise in prices in the meanwhile. The
plaintiffs' claim for higher rates to the extent of 4 per cent at the initial stage and
subsequently to the extent of 14 per cent on account of the alleged rise in prices,
is contrary to the terms of the purchase order and the agreement and, therefore,
such a claim is not sustainable in law.
• Considering the representation of the plaintiffs, the defendants took a liberal
view in the matter. The purchase order was amended on 20-5-1974 limiting the
quantity of the materials to the quantity actually supplied. The supply of goods
(four types of cables of different sizes) under the purchase order was a package
deal.
• With a view to accommodate the plaintiffs, the defendants, while agreeing to
condone the short supply, proposed to pay for the goods already supplied at the
contractual rate.
• But in the meanwhile, the plaintiffs rushed to the court and filed the suit with
false allegations and the same is, therefore, not maintainable and is liable to be
dismissed.
• From the pleadings, the evidence placed on record and the arguments advanced
at the Bar, the following points arise for consideration and decision in this
appeal:
1. In the facts and circumstances of the present case, as the plaint 'A' schedule
goods were not supplied to the defendants within the stipulated time, whether it
can be said that the supply of the goods was not in pursuance of the contract
between the parties?
2. Considering the circumstances under which the plaint 'A' schedule goods
were supplied by the plaintiffs, whether they are entitled to claim the relief
prayed for in the suit by invoking the provisions of Section 70 of the Indian
Contract Act?
3. As the defendants have not paid the price for the plaint 'A' schedule goods,
in spite of repeated demands by the plaintiffs for such payment, whether the
plaintiffs are entitled to claim for the return of the said goods in exercise of their
right of unpaid seller's Hen?
4. Whether the claim of the plaintiffs that the value of the plaint 'A' schedule
goods should be calculated on the basis of the market rate prevailing by the
date of Section 80, C.P.C. notice is valid and tenable?
5. Whether the rate of interest awarded to the plaintiffs ought to have been
much more than six per cent per annum in view of the provisions of Sub-
section (1) of Section 34, C.P.C.?
6. To what relief the plaintiffs are entitled?

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 ✓ One of the partners of the plaintiffs' firm Indulal Mehta examined
himself as P.W. 1 and deposed in support of the case made out in the
plaint. The plaintiffs have also relied on the documentary evidence
Ext's. 1 to 27 in support of their case. The defendants did not adduce
any oral evidence.
✓ But they exhibited Ext. A showing the conditions of contract between
the parties, in the matter of supply of the goods. For appreciating the
points of law involved in the appeal, it is necessary to know the factual
background under which the plaint 'A' schedule goods we're supplied by
the plaintiffs to the defendants.
✓ It is the plaintiff's case that the Executive Engineer, Lift Irrigation
(defendant No. 2) acting for and on behalf of the State of Orissa
(defendant No. 1) invited tenders for the supply of the electrical goods
and in response to such invitation of tenders the plaintiffs' firm
submitted its quotations on 6-2-1973 indicating the prices at which the
firm was willing to supply the goods.
✓ The plaintiffs’ quotations were accepted by defendant No. 2 and on 5-3
1973 the latter placed the purchase order dated 5-3-1973 with the
plaintiffs' firm requesting it to supply the goods as per the specification
and quantity given in the list appended to the purchase order.
✓ Defendant No. 2 has stipulated in the purchase order that the goods
were to be supplied on or before 24-3-1973, failing which penalty
would be imposed as per the agreement. According to the plaintiffs
though the plaint 'A' schedule goods were despatched by rail in time,
due to the delay in transit they reached the defendants after 30-3-1973.
✓ The dealings between the parties regarding the supply of various items
of goods mentioned in the purchase order and to what extent the
payments were made, is indicated in the Table 'A' below, the correctness
of which is not disputed by the parties.

> Conclusion

In the result, in view of my findings on the several points raised in the appeal, the
appeal is found to be without any merit, and therefore, the same is dismissed on
contest, but in the circumstances of the case, without costs.

> References

• Reference of Information were taken from Indian Kanoon Website.

• Case was taken from Case mine Website.
• Appeal Information was taken from Lawyer Service Website.

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> Bibliography :-

• www.indiankanoon.org
• www.lawyerservice.org
• www.casemine.org
• www.orrisahighcourt.nic.in