9911796707
TMI Blog1989 (11) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of two kinds of tents "flies inner" and "flies outer". The agreed rate for the "flies outer " was Rs. 225 per tent and the quantity was 19,100. In accordance with the said terms of the contract the goods were to be inspected at the premises of the firm at jodhpur and after the same being passed by the Inspector, the goods had to be despatched to the Commandant, C.O.D., Kanpur. It was further agreed between the parties that 95 per cent of the price was payable on proof of despatch and production of the inspection note. The balance 5 per cent was to be paid after receipt of the goods in good condition by the C.O.D., Kanpur. On October 14, 1968, one consignment of 1,500 tents was despatched to the C.O.D., Kanpur, by the appellant under railway receipt No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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, dismissed by the High Court of Delhi by order dated March 14, 1983. The instant appeal on special leave has been preferred by the appellant against the aforesaid judgment and decree. The crucial question that requires consideration in this appeal is whether 1,500 tents which were loaded in the railway wagons on October 14, 1968, at Jodhpur for delivery to respondent No. 5, the Commandant, C.O.D., Kanpur, under railway receipt No. 502671 were actually delivered to respondent No. 5. It has been held by the trial court, i.e., learned single judge, High Court, Delhi, that the tents were carried in 3 wagons up to Agra. The railway line from jodhpur to Agra was a metre gauge. Thereafter, from Agra to Kanpur which is a broad gauge line the tents were put into four bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys 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 in the general conditions of contract contained in form DGS & D-68. These were made applicable by clause 7 in the Schedule to the Acceptance of Tender. Special emphasis was laid to the condition No. 4 entitled "responsibility of contractor for executing the contract". The learned Judge has, with reference to sub-clause (10) of this condition, held that the goods shall remain in every respect at the risk of the contractor until their actual delivery to the consignee at the stipulated place and as such the risk of the appellant remains until the goods were actually delivered to the Commandant, C.O.D., Kanpur. The argument as regards condition No. 14 of the general conditions of contract as well as its sub-clause (2) entitled "passing of property" was negatived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods 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 the goods train for delivery to respondent No. 5 at Kanpur and property in the goods passed to the buyer as soon as the goods were despatched by railway at Jodhpur. Thereafter, the risk in respect of the goods despatched remained with the consignee. The appellant, the consignor, is entitled to get the entire price of the 224 tents which were short delivered by respondent Nos. 3 and 4 to respondent No. 5 at Kanpur in view of the clear finding by the trial court that though the entire consignment of 1,500 tents was actually loaded in the railway wagons for despatch to the consignee, respondent No. 5. The respondent No. 5 duly filed a claim to the railways, respondent Nos. 3 and 4, for the short delivery to the tune of 224 tents immediately after taking delivery of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 erstwhile Central Provinces had to load diverse quantities of "sawar" logs on railway wagons and to despatch the same from Chanda and other railway stations in the Central Provinces to Ambernath, a town in the erstwhile Province of Bombay. Clause 2 of the contract reserved the right of the consignee to examine the goods on arrival at Ambernath and to reject the same if they were found, in the opinion of the factory manager, not to conform with the specifications. Clause 6 also provided that the goods shall be measured under the supervision of the factory's representative, the decision of the factory manager at Ambernath would be binding on the contractor and by clause 7 the prices of the goods shall be "f.o.r. Ambernath". The question arose was as to when and where the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, as well as the terms and conditions of delivery, i.e., "f.o.r. Jodhpur" the irresistible conclusion that follows is that the property in the goods together with the risk passed from the seller to the buyer, i.e., from the consignor to the consignee as soon as the goods were loaded in the railway wagons at Jodhpur as per the terms of delivery, i.e., f.o.r. Jodhpur. Therefore, the finding of the trial court that the risk throughout remained with the appellant until the goods were actually delivered to the Commandant, C.O.D., Kanpur, is wholly wrong and illegal. The further finding of the trial court that the risk was governed by condition No. 4(1) of the Schedule to the Acceptance of Tender and the property in the goods, i.e., the tents did not pass until the same were actua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 interest in respect of the price of the said goods being not paid to the appellant within a reasonable time from the date of delivery of the goods, i.e., for the period from January 1, 1969, to December 1, 1971. The respondent No. 5 did not dispute the claim of the appellant in this regard. His only plea was that in the notices under section 80 of the Code of Civil Procedure, served on the respondents, the claim of interest was not made and as such the claim of interest could not be allowed. In the case of B. B. Bose v. National Coal Trading Company AIR 1966 Pat 346, the plaintiff filed a suit for recovery of price of goods sold to the defendant. Before filing the suit, the plaintiff served a demand notice on the defendant. In the demand notice, exhibit 2, no claim for interest was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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