1967 (11) TMI 112 - SC - VAT and Sales Tax

Where there is a bargain for a certain quantity extra greater quantity and there is h power of selection in the vendor to deliver which he thinks fit then the right to them does not pass to the vendee until the vendor has made his selection and trover is not maintain able before that is done

Summary

Issues:
1. Interpretation of a contract for the sale of Russian newsprint between the parties.
2. Variation of contract terms and its legal implications.
3. Validity of a resale of goods and the passing of property rights.
4. Calculation of damages and liabilities in case of breach of contract.

Detailed Analysis:
1. The dispute involved a contract between the parties for the sale of Russian newsprint, with specific terms recorded in writing. The respondent agreed to buy 500 tons of newsprint in reels at a specified price, while the appellants agreed to buy 415 tons of newsprint in sheets. The contract also included provisions for advance payments, interest, and insurance charges. The key issue was the interpretation of these contract terms and the obligations of each party.

2. Subsequently, on November 26, 1951, the parties orally agreed to modify the contract, reducing the quantities involved. The respondent would buy 300 tons of newsprint in reels, and the appellants would buy 300 tons of newsprint in sheets. The variation of the contract terms raised questions regarding the validity of the modified agreement and its legal consequences, including the passing of property rights and liabilities.

3. A significant aspect of the case was the validity of a resale of goods by the respondent to a third party after the appellants refused to take delivery of the remaining newsprint. The courts found the resale to be genuine and properly conducted. However, the Supreme Court analyzed whether the property rights in the goods had passed to the appellants before the resale, as it determined the legality of the respondent's actions under the Sale of Goods Act.

4. In determining the damages and liabilities arising from the breach of contract, the Supreme Court calculated the amount due to the respondent based on the market price of the goods on the date of refusal by the appellants. The Court assessed the damages, including interest and insurance charges, resulting in a final balance due to the respondent. This detailed calculation of damages and liabilities formed a crucial part of the judgment in resolving the financial aspects of the contractual dispute.