TMI Blog2023 (5) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court is surprised to find that the defendant, who had promised to demonstrate the functioning of equipments with a carrying capacity of 130 kg, did not come forward to fulfill their promise. The defendant, at one stage, felt disappointed and insisted only payment. It is now established that the defendant, who has undertaken to successfully install the machines before the release of final payment, started demanding payment, which is not required as per the revised terms as mentioned in the invoice - this Court has no hesitation to hold that the defendant has not fulfilled its obligation under the contract and that they purposely delayed installation to the satisfaction of the plaintiff, as undertaken by them during middle of the installation. Though the defendant made an attempt to convince the plaintiff to improve the performance as per specifications, they did not accomplish and hence this Court is unable to accept the case of defendant. This Court has no reason to disbelieve the evidence of P.W.2 as regards the actual weight of gripper especially when the plaintiff's application for appointment of Advocate Commissioner was dismissed on the objection of defendant and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial, this Court is justified in granting 12% p.a. interest for the period from 02.10.2008 to 28.02.2010 and 6% p.a. thereafter till date of realisation - issues are answered in favour of the respondent/plaintiff and against the appellant/defendant. The decree of the trial Court is confirmed. In addition, there shall be a decree granting interest at the rate of 12% p.a. for the period from 02.10.2008 to 28.02.2010 and at the rate of 6% p.a. thereafter till the date of realisation. Upon making payment of the amount as per the decree, it is open to the defendant to take delivery of all the equipments supplied by them to plaintiff. Appeal dismissed. - A.S.No.666 of 2016 And Cross Objection No.91 of 2022 And C.M.P.No.20339 of 2016 - - - Dated:- 25-1-2023 - Honourable Mr. Justice S.S. Sundar And Honourable Mr. Justice A.A.Nakkiran For the Appellant : Mr.V.Lakshminarayanan for Mr.A.K.Balaji For the Respondent : Mr.P.R.Ramakrishnan for Mr.R.Bharath Kumar For the Cross-Objector : Mr.P.R.Ramakrishnan for Mr.R.Bharath Kumar For the Respondent : Mr.V.Lakshminarayanan for Mr.A.K.Balaji COMMON JUDGMENT S.S. SUNDAR, J. The defendant in the suit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upto 60 kg. The plaintiff also stated that the defendant guaranteed that all equipments could lift atleast 130 kg, but the defendant failed to accomplish its promise. Thereafter, there were exchange of communications from the plaintiff to defendant and defendant to plaintiff on several occasions. Finally, the defendant demanded further payment before going for further demonstration and testing to satisfy the plaintiff as to the actual capacity of the equipments supplied by the defendant. Thereafter, the plaintiff issued suit notice, not only for return of price paid by the plaintiff but also for compensation @ Rs.4,000/- per day. It is seen that the plaintiff rejected the equipments/goods on the ground that the equipments supplied by the defendant did not confirm to the specifications mentioned in the purchase order and that the equipments supplied to the plaintiff were useless to them. Even in the notice, the plaintiff requested the defendant to take back the equipments after paying the amounts which have been paid by the plaintiff to the defendant towards the equipments. Thereafter, the suit was filed for refund of price paid by the plaintiff along with interest @ 12 %. p.a. fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has specifically informed the plaintiff's representative that the lifting capacity of the equipment along with the metal gripper is 160 kg and thereafter, the plaintiff confirmed the order fully satisfying with the weight lifting capacity of the proposed manipulators. (j) The unit price of the manipulators is Rs.6,36,000/- and the cost of 7 Nos. of manipulators works out to Rs.44,52,000/-. The price of aluminium rack per unit was stated to be Rs.2,46,000/- and the total cost of 7 such aluminium racks was worked out to Rs.17,22,000/-. Therefore, the price of the manipulators and the aluminium racks was fixed at Rs.61,74,000/-. (k)As per the purchase order dated 09.02.2007, the sales tax @ 4% and the packing charges were to be paid by the plaintiff apart from the cost. (l) As per the terms and conditions of purchase order, the plaintiff has to pay 10% of the value of equipments as initial payment to confirm the order and agreed to pay 85% after trials with proforma invoice and the balance 5% is payable on receipt of material before installation. 7.In the written statement, it is repeatedly stated by defendant that the total capacity to lift 160 kg of weight is inclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as per purchase order should be 160 kg. It is further stated that the plaintiff demanded that the defendant should enhance the capacity of manipulator to 130 kg and that it was then decided by defendant to try his best to increase the capacity of the manipulators in the hope of getting his payments. It is the further case of defendant that he found a way out to enhance the job weight lifting capacity of the equipment by reducing the weight of the gripper to 30 kg by designing a special aluminium gripper with 30 kg weight. It is further stated that when the modified system was ready at the defendant's place, the plaintiff did not send anyone to defendant's place and hence sent video CDs showing successful completion of trials. It is then stated that the plaintiff did not come forward to pay the balance despite demonstration of successful trials of the equipment at defendant's place. The defendant has admitted the payment of a sum of Rs.49,79,000/-. Ultimately, the defendant also demanded the balance after the assessment of the total cost incurred by the defendant at Rs.67,94,225/-. Therefore, the defendant has pleaded that the defendant is entitled to a sum of Rs.18,15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endant that as per trade practice, the description with regard to weight lifting capacity of machine should be understood by deducting the gripper weight. The trial Court further held that Section 16 of Sale of Goods Act will not come to the aid of defendant. However, the trial Court observed that there was a misunderstanding as regards the specifications of the equipment and that there was a mutual mistake. Therefore, the trial Court, while granting a decree for recovery of principal amount of money which had been paid by the plaintiff to the defendant, held that the plaintiff is not entitled to interest from 02.10.2008, as pleaded in the plaint. 15.Aggrieved by the judgment and decree of the trial Court, the main appeal is preferred by the defendant, whereas, the Cross-Objection is filed by the plaintiff challenging denial of interest. 16.Learned counsel appearing for the appellant/defendant contended that the purchase order was silent regarding the weight lifting capacity of manipulators and that the plaintiff has just taken advantage of the attitude of the defendant to satisfy the plaintiff on all aspects, even though the defendant had in fact supplied the equipments as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments supplied by defendant to the plaintiff satisfy the specifications mentioned in the purchase order ? ii. Whether the Number 160 found in the basic equipment Fine Lift FH 160 refers to weight lifting capacity of the equipment or it refers to the total weight of the gripper as well the job carrying capacity of the basic equipment ? iii.Whether the plaintiff has acknowledged supply of equipments as per the specifications and in accordance with the purchase order and failed to pay balance amount as per the contract ? iv. Whether the plaintiff is justified in rejecting the equipments which were supplied by defendant to the plaintiff as per the purchase order under Ex.B1 dated 09.02.2007 and filing the suit for recovery of money ? v. To what relief, the plaintiff is entitled to ? Issue Nos.(i) and (ii) : 20.The purchase order issued by the plaintiff to defendant, dated 09.02.2007, is marked as Ex.B1. As per the purchase order, the plaintiff wanted 7 Nos. of basic equipment Fine Lift FH 160 with gripper for sheet metal components at the cost of Rs.6,36,000/- per equipment and 7 Nos. of aluminium rack total overhead trolley with air supply kit and rack ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 679; ergonomic, rational operation without strain ● precise and exact positioning of components ● weightless, non-swinging handling due to automatic weight counterbalance ● individual gripper systems ● easy operability ● optional load-control directly on the goods being handled ● optional lifting/lowering function for absolutely loadfree lifting and lowering ● high safety standard ● upright, suspended or movable version ● comprehensive accessories for optimal configuration ● connectable backlash reduction on rotation axes 1 and 2 23.From the specifications mentioned in the Brochure, it is seen that the number mentioned would show the minimum weight lifting capacity of the equipment. Since it is stated that the equipments with Numbers PB 80/PB 160/ PB 250 are designated for medium load weights upto 375 kg, this Court is unable to find any explanation from the defendant on whose behalf the Brochure is marked. For reasons, the defendant has not marked the Brochure which they have published or given to their clients at the time when the plaintiff placed order to purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f gripper is 60 kg. Since the defendant has not made any attempt to prove the actual weight of gripper to prove his theory, this Court finds some lacuna in the case of defendant as regards the mutuality of the contract. It is admitted that an application during trial for appointment of an Advocate Commissioner was dismissed on the objection of defendant referring to the fact that there is no dispute as to the actual lifting capacity of equipments supplied by defendant. 25.This Court then considered the continuous correspondence between the parties. The following sequence of events and correspondence would tell us the actual understanding between the parties and their conduct in fulfillment of their obligations under the contract. The plaintiff placed the purchase order for 7 Nos. of manipulators with gripper and aluminium rack, etc., on 09.02.2007. The defendant sent the invoice under Ex.A3 to the plaintiff on 22.08.2007. It is to be noted that the plaintiff has paid a sum of Rs.49,79,000/- between 22.02.2007 and 01.11.2007. It is evident that there was enormous delay on the part of the defendant, even though the defendant agreed to ship the equipments within twelve weeks. As pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pments were capable of lifting only 50 kg instead of 100 kg. It is also to be noted that, by no other communication, it is brought to the notice of this Court that the plaintiff had never accepted the equipments with a carrying capacity of 100 kg. It was also admitted by the defendant that, out of 7 systems, only 5 equipments were brought into function and 2 equipments were not in function and the equipments were capable of lifting just 50 kg. Thereafter, the subsequent visit by defendant's men was planned by 4th October, 2007. After the subsequent visit, it is recorded by the defendant that, all 7 systems were brought into function, and operation and maintenance manual was handed over to the plaintiff's staff, apart from giving training for operation, setting and maintenance of machines to members of plaintiff company. It is to be noted that the defendant have admitted that the issue regarding weight capacity could not be attended, as the systems required additional equipments to enhance their performance. Again, as recorded in the Minutes, the defendant ordered 14 new Vaccum Cups, which were procured from Sweden. It is further recorded that, additional structural member w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for this and revert back to us very immediately. Payment will be taken care automatically once this problem solved. 30.Thereafter, repeated communications from defendant to plaintiff and plaintiff to defendant would only show that the parties were at loggerheads on the performance of the equipments supplied by defendant to the plaintiff earlier. While defendant kept on saying that they have supplied Fine Lift FH 160 manipulators with gripper, having job capacity of 100 kg, the plaintiff kept on insisting the carrying capacity to be not less than 160 kg. In every communication, the plaintiff has also referred to the fact that the machines did not lift even the weight of 100 kg and they do not perform well when the object is required to be tilted. A clarification was also given by the defendant to the plaintiff in the subsequent communication dated 16.11.2007 that the load capacity of manipulators was firmly decided keeping 100 kg weight of sheet in mind, as per the discussions the parties had before placing the purchase order. 31.Though the defendant keeps on telling the plaintiff that the lifting capacity of the equipment was increased to 100 kg and that the defendant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quipment completely with new grippers, take trials on the covers made as per the drawing of plaintiff. Surprisingly, that was not done, admittedly. 33.The defendant wanted the plaintiff to send Vaccum Cups so that they can conduct test to assess the performance of similar equipments at the factory site of defendant. Therefore, there were series of correspondences. There was also a delay in sending Vaccum Cups. Even though the plaintiff has proved that they have sent the Vaccum Cups to the defendant the defendant could acknowledge the receipt of Vaccum Cups on actual delivery. It appears that the defendant, thereafter, sent a CD to the plaintiff to satisfy the plaintiff as to the performance of equipments by handling the sheet as per the specifications of plaintiff. After seeing the CD sent by the defendant, the plaintiff appreciated the work undertaken by defendant, but expected the defendant to bring their materials directly to the plaintiff's location and to prove the performance of the equipments. Even though the defendant was trying to pacify the plaintiff as regards the specifications and performance of the equipments to the satisfaction of the plaintiff, the parties, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the average weight of gripper is only 31.5 kg and not 60 kg. Out of 7 equipments, the lifting capacity of 6 equipments is only 60 kg. Assuming that the lifting capacity may be affected due to non-use for a long time, the evidence of P.W.2 regarding the actual weight of gripper as 31.5 kg has not been questioned by specific suggestion. This Court has no reason to disbelieve the evidence of P.W.2 as regards the actual weight of gripper especially when the plaintiff's application for appointment of Advocate Commissioner was dismissed on the objection of defendant and the evidence of P.W.2 was not controverted. This Court finds no truth in the case of defendant. 36.From the sequence of events and evidence as discussed above, Issue Nos.(i) and (ii) are answered in favour of the plaintiff and against the defendant. This Court holds that the defendant failed to supply equipments to the plaintiff, satisfying the specifications mentioned in the purchase order. This Court also holds that the understanding of the plaintiff and defendant at the time of placing purchase order is that the weight carrying capacity of the equipment at all angles should be upto 160 kg and the actual wei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the High Court of Gujarat in the case of Shah Mohanlal Manilal v. Firm running in the name and style of Dhirubhai Bavajibhai reported in AIR 1962 Guj 56 , wherein, it has been held as follows : 6. One of the acts upon the doing of which the buyer is deemed to have accepted the goods is that he intimates to the seller that he has accepted them. It is clear that such an intimation may be made by the buyer before he has had a reasonable Opportunity of examination and if such an intimation is made, it is obvious the without more Section 42 would operate, and the buyer would be deemed to have accepted the goods. In the same way when the buyer does an act in relation to the goods which is inconsistent with the ownership of the seller, Section 42 must be treated as coming into operation notwithstanding that the reasonable opportunity of examining the goods has not expired. Suppose the buyer after taking delivery of the goods and before he has had a reasonable Opportunity of examining them consumes them or turns them or part of them at once into his mill and uses them in the manufacture , can it be said in such a case that the buyer is not deemed to have accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he right of examination of the goods for the purpose of ascertaining whether they are in conformity with the contract is a right which is conferred on the buyer for the purpose of enabling him to decide whether to accept the goods or to reject them. But it is open to him to waive that right and he may choose to accept the goods without exercising that right. It will thus be seen that no conflict is created between Sections 41 and 42 by reading Section 42 as independent of Section 41 and not limiting the Provisions of Section 42 by Section 41. Where the buyer does any of the acts specified in Section 42 before the reasonable opportunity of examining the goods has expired the buyer waives the right of examination of the goods conferred by Section 41 and is deemed to have accepted the goods. This is in my opinion the only construction which can be placed on Sections 41 and 42. I am fortified in this opinion by a decision of the Court of Appeal in England in Hardy and Co. v. Hillerns and Fowler (1923) 2 KB 490, where the Court of Appeal has taken the same view regarding the construction of Sections 34 and 35 of the English Sale of Goods Act which are in the same termed as Sections 41 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Hormusha Joshi and Co. v. V.M.Ismail and another reported in AIR 1960 Mad 520 . The relevant portions of the judgment relied upon by the learned counsel are extracted below : 13. The buyer by description had the opportunity to inspect goods and reject them and did not avail himself of the opportunity and reject them within reasonable time and therefore the seller was absolved from responsibility in regard to defects which such examination might have revealed with the result that this claim for damages will not lie. 25. Goods are of merchantable quality if they are of such a quality and in such condition that a reasonable man, acting reasonably, would, after a full examination, accept them under the circumstances of the case in performance of the offer to buy them, whether he buys for his own use or to sell again: Per Farwell, L. J., in Bristol Tramway Co. v. Fiat Motors Ltd., (1910) 2 KB 831 at p. 841. 28. The proviso to S. 16 of the Act, however, divides all such defects into two kinds, often called patent and latent defects. Patent defects are those which can be found on examination by a person of ordinary prudence with the exercise o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Soap Works, AIR 1959 Mad 112 : 71 Mad LW 757. 34.The inspection and rejection must be without practicable delay. The trial Court has rightly relied on Mithan Lal v. Suraj Parshad, AIR 1932 Lah 52 and Province of Madras v. Galia Kotwalla and Co., Ltd., 1945-2 Mad LJ 418: (AIR 1946 Mad 69, for the proposition that avoidable and inordinate delay would disentitle the plaintiffs from maintaining any action for damages. 35. The buyer is bound to make payment against the tender of goods; his right of examining the goods and to reject them if they are not in conformity with the contract, however, remains even after payment and is exercised on actual delivery of goods: Polenghi Bros. v. Dried Milk Co., (1905) 92 LT 64; Ram Dayal Ram Narain v. Bhairo Bux, AIR 1924 Pat 240; Mahadev Ganga Prasad v. Gourishankar, AIR 950 Orissa 42 : ILR (1949) 1 Cut 453. 45.The buyer is entitled examine the goods to decide whether he will become owner, and until the examination is completed or waived he is under no obligation to accept the goods: 3 Williston on Sales, S. 472. The examination is waived, however, in so far as it is a condition precedent to the transfer of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d correspond with the description. Again, under S. 16(2) of the Sale of Goods Act: Where the goods are bought by description from a seller who deals in goods of that description........... there is an implied condition that the goods shall be of merchantable quality, 52.But there is a proviso to the section that: if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed. ... 57.The same aspect of law was again discussed in (1958) Mad WN 631 : (AIR 1959 Mad 112) by the learned Chief Justice and Ramachandra Iyer, J. The learned Judges refer to Sections 15 and 16(2), and observe that the effect of the two conditions is to give a right or an occasion to the buyer to reject the goods, in case what was tendered did not answer the description, or was not of a merchantable quality. But where the goods were accepted, the buyer would be precluded from rejecting the goods, and would only be entitled to a remedy by way of damages. But the passing of property in the goods is not the test of applicability. ... 65.But where the goods were not thoroughly inspected at the time of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the plaintiff merely because an opportunity was there for the plaintiff to inspect the goods at the factory premises of defendant. The judgments relied upon by appellant's counsel will have no relevance to the present case where the defendant failed to supply the equipments as per specifications and the defendant has agreed to install the equipments at the place of plaintiff and this never happened. 41.Learned counsel appearing for the appellant also relied upon a judgment of Lahore High Court in the case of Mithan Lal-Inder Nanin v. Suraj Parshad-Madan Gopal reported in AIR 1932 Lah 52, wherein, it is held as follows : 4.So far as damages are concerned, the learned District Judge held that the plaintiffs could not claim more than Rs. 100 which was all that they prayed for in the suit, and that, by reason of the last paragraph of Section 118 of the Contract Act, the plaintiffs, if they intended to claim compensation, should have given notice of their intention to do so within a reasonable time after discovering the breach of warranty, whereas in fact they waited for 24 days. 5.Now it is well settled that a reasonable time for examining goods is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inspection of the barrels, and they were willing to take the risk, the price being so low, and Mr. Halfhide himself, as I have found, told the plaintiffs at the beginning of the interview when the bargain was made that he had inspected the parcel. It may be a question whether, after this statement, the defendants could be heard to say that they had not examined the glue, but however that may be, I think they examined the goods within the meaning of the sub-section. There can be no doubt that such an examination if made in the ordinary way would have revealed the defects complained of. The defects complained of were apparent the moment the casks were opened. The examination agreed to on September 18, which they had full opportunity of making on September 19, would involve the opening of a sufficient number of casks to ascertain the condition of the glue. I hold that this case falls within the proviso and consequently there was no implied condition. Having found that it was not a sale by sample, and that there was no implied condition that the glue was merchantable, the defence fails, and the plaintiffs are entitled to judgment. 44.A Division Bench of Allahabad High Court, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon the judgment of this Court in the cases of Re Beharilal Baldeoprasad Firm of Merchants by partner Tagoor Prasad and others reported in AIR 1955 Madras 271 , Messrs. Sha Thilokchand Poosaji v. Crystal and Co. , reported in AIR 1955 Madras 481 , National Traders v. Hindustan Soap Works reported in AIR 1959 Madras 112 , Ranbirsingh Shankarsingh Thakur v. Hindusthan General Electric Corporation Ltd. and another reported in AIR 1971 Bombay 97 and Eternit Everest Ltd., Coimbatore v. C.G.Abraham and another reported in AIR 2003 Kerala 273 and a few more judgments to support his arguments. 47.In the present case, though the defendant was bound to discharge the burden lies on them, they failed to produce even the Brochure to establish their story about the Number 160 found in the purchase order. This Court has already seen that the case of defendant is not consistent and the evidence of D.W.1 is liable to be rejected. Though the trial Court has not considered the report given by P.W.2 and the evidence of P.W.2, this Court has no reasons to disbelieve them atleast as to the actual weight of gripper, as the appellant/defendant has not cross-examined the wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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