TMI Blog1989 (11) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... nd C.V.S. Rao, Advocates, with him), for the respondents. Pallav Shishodiya and D. Bhandari, Advocates, for the appellant. -------------------------------------------------- The judgment of the Court was delivered by B.C. RAY, J. -Special leave granted. Arguments heard. This is an appeal against the judgment and order passed in R.F.A. (OS) 3 of 1983 on March 14, 1983, by the High Court of Delhi dismissing the civil writ petition in limine against the judgment and decree rendered by Chawla, J., in Suit No. 50 of 1972, on February 12, 1982. The matrix of this case is stated hereunder: The appellant, M/s. Marwar Tent Factory, is a firm having its registered office at Jodhpur (Rajasthan) and dealing in the manufacture and sale of tents and tarpaulins. The firm is a regular supplier of these goods to the defence services of India. On March 13, 1968, tenders were invited for the supply of tents by the Directorate General of Supplies and Disposals, the respondent No. 2. Accordingly, the appellant submitted a tender which was accepted by the officer of the Directorate General of Supplies and Disposals on behalf of the President of India. The said contract was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 5 as their interests were identical. The defence was that 224 tents were received short under railway receipt No. 502671 and the sum of Rs. 51,912 was rightly deducted from the payment due to the appellant under other contracts. The respondent Nos. 3 and 4 also filed a joint written statement stating, inter alia, that only 11 tents were delivered short under railway receipt No. 502671 for which the admitted liability was to the tune of Rs. 2,475. This sum had been paid to the C.O.D., Kanpur, by debit adjustment. T.P.S. Chawla, J. , by his judgment and order dated February 12, 1982, though dismissed the claim of the appellant substantially but in so far as the amount of Rs. 2,475 regarding the shortage of 11 tents admitted by respondent Nos. 3 and 4 was concerned, decreed the said sum in favour of the appellant with interest at 12 per cent per annum from April 1, 1972, till the date of judgment and further interest at 6 per cent from the date of judgment till the realisation of the amount. Against the said judgment and decree the appellant preferred an appeal being R.F.A. (OS) No. 3 of 1983, before the Division Bench of the said High Court. The said appeal was, however, dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thirdly no notice under section 78-B of the Indian Railways Act was served on the railways by or on behalf of the appellant. The appellant, however, submitted that the title of the goods passed on to respondent No. 5, Commandant, C.O.D., Kanpur, the moment the tents were lodged on rail head, Jodhpur, as the term of delivery under the contract was f.o.r., Jodhpur. For any short delivery of the goods made by the railways at Kanpur, the appellant was not responsible and respondent No. 5, under the terms of the contract is not entitled to deduct the price of the short delivery of tents, i.e., 224 tents. It was for the Commandant, C.O.D., Kanpur, to claim damages from the railways and the Commandant had actually made a claim as stated hereinbefore to the railways in respect of the short delivery. The learned single Judge, however, found that the abbreviation f.o.r. meant free on rail, meaning simply that the cost of the carriage of the goods up to the railway wagon is included in the price and must be borne by the seller and the cost of carriage thereafter is to be borne by the buyer. It has also been held that the risk in the goods would not pass at Jodhpur as expressly stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttention to condition No. 11 of the Schedule to the Acceptance of Tender dated February 29, 1968. It has been mentioned therein that the terms of delivery was f.o.r. Jodhpur, i.e., free on rail at jodhpur railway station. It has also been mentioned that before the goods are loaded on railway wagons for delivery to respondent No. 5 at Kanpur, the Inspector, I.G.S., North India, will inspect the same at the firm's premises at jodhpur and after approval, the said goods will be despatched to its destination by placing them in the railway wagons at Jodhpur railway station and the railway receipt has to be sent to the consignee under registered cover immediately after despatch of the stores with full details. It is also stipulated that 95 per cent of the price of the goods will be paid by respondent No. 5 on receipt of the railway receipt and the inspection note and the balance 5 per cent will be paid after the same reached at the destination in good condition. Referring to this term for delivery under clause 11 of the Schedule to the Acceptance of Tender, it has been urged by the learned counsel for the appellant that the delivery was complete at jodhpur when the goods were loaded in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not responsible, the buyers were not notified of the arrival of the goods until the following January 17. It was held that the sellers were not in breach as they had delivered the goods in accordance with the requirements of the contract by shipping them in such a way as would normally have resulted in their arrival in time for the Christmas trade." The question as to the meaning of f.o.r. contract fell for consideration in the case of Girija Proshad Pal v. National Coal Co. Ltd. AIR 1949 Cal 472. P.B. Mukharji, J., as His Lordship then was, observed in para 11 as follows: "The words f.o.r. are well-known words in commercial contracts. In my judgment they mean when used to qualify the place of delivery, that the seller's liability is to place the goods free on the rail at the place of delivery. Once that is done the risk belongs to the buyer." Reference may also be made in this connection to the decision of this Court rendered in Commissioner of Sales Tax, Eastern Division, Nagpur v. Husenali Adamji and Co. [1959] 10 STC 297; [1959] Supp 2 SCR 702. In that case under the terms of the contract the respondent-company whose place of business was situated in Chanda in the ers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract." In the instant case, in view of the terms and conditions of the contract embodied in clause 11 of the Schedule to the Acceptance of Tender regarding the place of delivery "f.o.r. Jodhpur", the property in the goods passed immediately on to the buyer after delivering the goods and loading the same in the railway wagons at Jodhpur for transmission to the buyer, the consignee, without reserving any right of disposal. The seller is deemed to have unconditionally appropriated the goods to the contract only under section 26 of the said Act; the goods remained at seller's risk until the property therein is transferred to the buyer. As stated earlier that the property in goods has been transferred to the buyer by the seller by delivery of the goods and loading the same at Jodhpur in railway wagons. In this connection reference may be made to section 39(1) of the said Act. Considering the aforesaid provisions of the Sale of Goods Act, 1930 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent per annum was claimed by the plaintiff-appellant on Rs. 51,912 being the price of 224 tents for the period from January 1, 1969 to December 1, 1971. It is appropriate to refer in this connection to the relevant provisions of section 61(2) of the Sale of Goods Act, 1930 (Act 3 of 1930) which reads as follows: "61(2). In the absence of a contract to the contrary, the court may award interest at such rate as it thinks fit on the amount of the price- (a) to the seller in a suit by him for the amount of the price-from the date of the tender of the goods or from the date on which the price was payable; (b) to the buyer in a suit by him for the refund of the price in a case of a breach of the contract on the part of the seller-from the date on which the payment was made." In the instant case, undoubtedly, it has been found by the courts below that the short delivery of 224 tents occurred during the transmit of the said goods by the railways. It is also an admitted fact that respondent No. 5, the Commandant, C.O.D., Kanpur, deducted the price of the said 224 tents from the other bills of the contractor, i.e., the appellant and did not pay the same. The appellant has claimed int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods supplied remained unpaid. It was contended on behalf of the plaintiff that even in the absence of the contract, the plaintiff was entitled to reasonable interest under section 61(2) of the Sale of Goods Act 1930. The supply had been effected up to September 18, 1962 and in normal case the price of the goods ought to have been paid by the defendant within a reasonable time of the deliveries but the payment had been delayed for nearly a year which compelled the plaintiff to bring the suit for recovery of the price. It has been held that in such circumstances, the lower courts should have exercised discretion in favour of the plaintiff and awarded interest on the amount of the price of the goods under section 61(2) of the Sale of Goods Act. The High Court of Rajasthan allowed interest at 6 per cent per annum which was considered to be a reasonable rate of interest. On a conspectus of all the decisions referred to before as well as the provisions of section 61(2) of the Sale of Goods Act, we are constrained to hold that the plaintiff is entitled to get a decree of interest on the unpaid price from January 1, 1969, to December 1, 1971, at 6 per cent per annum which is co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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