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DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE – SALE BY SAMPLE, S.17, SALE OF GOODS ACT, 1930

SUBJECT – CONTRACTS II

NAME OF THE FACULTY – P. JOGI NAIDU SIR

NAME OF THE CANDIDATE – KARTIK BHARGAVA

ROLL NO. - 2018044

SEMESTER – THIRD SEMESTER

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ACKNOWLEDGEMENT:

I want to express my special thanks to my professor, ‘P. JOGI NAIDU SIR’, who gave us this
golden opportunity to do this wonderful project on the topic ’SALE BY SAMPLE’, which also
helped us in doing a lot of research and we came to know about a lot of things.

Secondly, we also thank DSNLU for providing me with all the necessary materials required for
the completion of the project.
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Table of Contents

1. ABSTRACT……………………………………………………………………………..4
2. INTRODUCTION………………………………………………………………………5
3. BRITISH PAINTS (INDIA) LTD. V UNION OF INDIA……………………………6
4. KALURAM BHAGWATI PRASAD V BALRAM DAS LAXMI NARAIN……….8
5. K.N. LAKSHMIAH ALIAS N. LAKSHMIAH V HAJEE S. ABDUL AZEEZ……12
6. LALCHAND DEEPCHAND V BAIJNATH JUGAL KISHORE AND ANR……15
7. CONTINENTAL EXPORTERS V THE BHAVNAGAR TEXTILES PVT. LTD...18
8. BIBLIOGRAPHY………………………………………………………………………22
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ABSTRACT

SALE BY SAMPLE

This project deals with sale by sample in the sale of goods act. In the sale of goods act, 1930-
(section 17) provides provision for sale by sample. This project will elucidate the process of
introduction of merchanatable quality and sale by sample.

In this project the following judgements will be discussed:

 BRITISH PAINTS (INDIA) LTD. V UNION OF INDIA

 KALURAM BHAGWATI PRASAD V BALRAM DAS LAXMI NARAIN
 K.N. LAKSHMIAH ALIAS N. LAKSHMIAH V HAJEE S. ABDUL AZEEZ
 LALCHAND DEEPCHAND V BAIJNATH JUGAL KISHORE AND ANR.
 CONTINENTAL EXPORTERS V THE BHAVNAGAR TEXTILES PVT. LTD.
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INTRODUCTION

Section 17 in The Sale of Goods Act, 1930

Sale by sample.—
1. A contract of sale is a contract for sale by sample where there is a term in the contract,
express or implied, to that effect.
2. In the case of a contract for sale by sample there is an implied condition—
 that the bulk shall correspond with the sample in quality;
 that the buyer shall have a reasonable opportunity of comparing the bulk with the
sample;
 that the goods shall be free from any defect, rendering them unmerchantable,
which would not be apparent on reasonable examination of the sample.
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CASES

British Paints (India) Ltd. vs Union Of India

FACTS

This appeal is at the instance of the plaintiff in a suit for damages for breach of contract against
the Union of India. The Union of India invited tenders for the supply of paints of the description
compound recoloring Olive Green scamic 314 for faded tents to Specification Ind/ 32/7037. The
plaintiff offered a tender being sample No. 30/100. The laboratory did not consider the sample to
be upto the mark, but the higher authorities of the defence department accepted this tender, and
placed an order with the plaintiff for supply of 500 Cwt. of this article and the price was fixed at
Rs.256/-F.O.R. Calcutta per Cwt. According to the contract the goods were to be inspected by
the Inspector at Calcutta, and if he was satisfied that these were upto the mark, then the same
could be dispatched by the plaintiff on receipt of the inspection notes. The original date of
delivery was fixed on 15th of October, 1952, but the plaintiff stated that it might not be in a
position to do so as it had to indent some of the ingredients from U K., and on their successive
applications for extension of time, time for supply was finally extended upto the 30th of April
1953. 9 Cwt. of this article was inspected on the 16th October 1952 and accepted and dispatched
on the 5th December 1952. The second lot consisting of 591/2 Cwt. was inspected on the 16th
March 1953, and was rejected on the 22nd April 1953, and again offered after some
reconditioning on the 30th April 1953, and rejected on the 19th May 1953. The third lot of 150
Cwt. was inspected on the 30th March 1953 and accepted and dispatched on the 17th April 1953.
The fourth lot consisting of 188 Cwt. was inspected on the 13th April 1953, and was rejected on
the 7th May 1953. The last lot consisting of 931/2 Cwt together with 591/2 Cwt. constituting the
second lot, were inspected on the 30th April 1953, and rejected on the 19th May 1953.
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ISSUES

1. Whether that sample 30/100 had been destroyed or not?

ARGUMENTS AND REASONING

It was urged on behalf of the appellant that as the Inspector's reports regarding the goods were
not available on the 1st May 1953, the authorities had no materials before it under which it could
cancel the Contract. in Nune Siwayya v. Maddu, (1935) 62 Ind App 89 at p. 98 (PC) it has been
held by the Privy Council that in a suit for damages for breach by repudiation of the Contract for
the sale of goods, the defendant can rely upon any grounds for repudiation which existed when
he repudiated; he is not confined to the ground which he then stated. After the Inspector's reports
were made available and showed that the goods were not in accordance with the tender, it was up
to the Union of India to take up that ground as well. Mr. Sengupta in this connection has already
drawn our attention to Ext. 3-C the condition of Contract. Now the term "delivery" as denned
therein means "Delivery by the dates specified in the acceptance of tender of stores which are
found acceptable by the Inspector and not the submission of stores which are not to the required
standard or which are not delivered by due dates." in this particular case, the goods were not
properly delivered by the 30th of April 1953. The goods were not up to the standard, and there
was no sufficient time given to Union of India for inspecting the same, as we have already
pointed out.

Mr. Mukherjee has also submitted that as the defendant also claimed liquidated damages, the
defendant was not entitled to cancel the Contract. We are not in a position to accept this
contention. In Ext. 3-C it has been specifically laid down that if any stores are rejected, the
Secretary shall be at liberty to (a) to allow the Contractor to resubmit the stores within a time
specified by himself, (b) buy the quantity of the stores rejected by others of a similar nature
elsewhere at the risk and cost of the contractors etc. or (c) terminate the contract and recover
from the contractor the loss the purchaser thereby incurs. Therefore, it was within the rights of
the defendant to terminate the contract. The defendant has not made any attempt to recover the
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loss if any, he has suffered for the default of the plaintiff. By Ext. 20 the defendant while
cancelling the Contract for the supply of the further materials had merely asked the plaintiff to
note that right to recover liquidated damages for delayed supply was reserved. There was no
claim actually made for liquidated damages. In the subsequent letter (Ext. 51) no such claim was
even referred to. In the circumstances, this objection must be overruled.

JUDGEMENT

The result, therefore, Is that we find that in this case time was of the essence of the contract and
that the time was extended up to the 30th of April 1953 by the mutual consent of the parties and
that the goods had not been offered or delivered in time, and were also not of the requisite
quality. The defendant, therefore, was within its rights to repudiate the contract for the supply of
the remaining portion of the goods, and this appeal therefore, must fail.

KALURAM BHAGWATI PRASAD (FIRM) VS BALRAMDAS LAXMI

NARAIN (FIRM)

FACTS

plaintiff and defendant were food grain merchants and there was a contract between them
relating to sale of toor dal. The nature of the contract and conditions thereof being disputed, a
few words have to be stated in regard to that controversy at the outset.

The genesis of the contract and its nature are not mentioned on which the trial Court has
commented adversely against him though on that ground the suit was not dismissed. The only
statement is that in July, 1973, defendant firm had contracted with the plaintiff firm to purchase
240 bags of toor dal at the rate of Rs. 230/- per bag F.O.R. Sabalgarh Station (Bilticut, tax-paid).
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Pursuant thereto the consignment was despatched under four railway receipts each covering 60
bags and the goods were despathed to Bhatapara Railway Station from Sabalgarh.

The further case of the plaintiff was that on 23-7-1973, by telegram the defendant was informed
of despatch of the goods, but the Bank (State Bank of India) informed the plaintiff on 7-8-1973
that the relevant Hundi for the goods despatched was dishonoured by the defendant. As the result
of defendant's illegal action, the plaintiff had to depute a representative to Bhatapara on 23-8-
1973 to contact the defendant and on 3-9-1973 again, a telegram was sent to the defendant that
for all loss or non-acceptance of goods he will be held liable. The plaintiffs claim was for a
decree in the sum of Rs. 13,334/- for loss occurred due to resale of the goods as price of toor dal
had fallen in the market.

In his written statement, the defendant gave genesis and particulars of the contract and his
version has been accepted by the trial Court on valid ground to which I advert in immediately.
The trial Court has rightly attached signal importance to defendant's letter written to the plaintiff
as early as on 17-9-1973, proved in suit as Ex.D/1. Indeed, that letter is defendant's legal notice
to plaintiff alleging breach of contract. It was mentioned that the defendant had contracted to
purchase from the plaintiff "one wagon load (240 bags) number one quality of Toor (Rahar) Dall
Tax-paid, bulty-cut, rate Rs.230/- per quintal new gunny bags". In that notice, it was alleged that
the contract was breached by the plaintiff because the goods supplied was "very inferior (number
three quality)" and that at the time of contract, sample was shown of "number one quality". That
apart, as per contract, the entire consignment of 240 bags had to be booked in one railway receipt
in one wagon, but that was not done. In that notice, the defendant stated that the contract was
made through a broker and a representative of that broker with representative of the plaintiff had
come to Bhatapara and taken sample of the goods lying at Bhatapara Station. In the presence of
some persons, namely, one Saligram Daga and others, the samples were compared and partners
of defendant firm, Ramnarayan and Laxminarayan informed the two representatives that even at
reduced rates, they were not in a position to accept the goods though, those two –representatives
consented to reduce the price by Rs.3,000/-. In the written statement, the same case was set up
and reiterated.
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The Court below struck as many as ten issues, but I have no doubt that the instant appeal can be
disposed of having regard only to the controversy agitated, decided in defendant's favour. The
issue was, "whether inferior quality dall had been despatched".

ISSUES

 whether inferior quality dall had been despatched?

 whether they are in conformity with the contract?

ARGUMENTS AND REASONING

In this appeal, much is sought to be made out by appellant's counsel Shri Swami Saran of the
fact that it was the duty of the defendant to produce in Court the sample on which he had built up
his case and on his failure to do so, his plea founded on Section 17 must be rejected. In that
contention, I see little merit because of what I read in the evidence which has also been accepted
by the trial Court. There is preponderance of evidence in this case that the goods supplied did not
"correspond with the sample in quality" and if that position is accepted, then the plaintiff's case
must fail, because of what is contemplated in Section 17(2)(a).

Let it be noted further vests on the buyer the duly, "to accept and pay for (the goods) in
accordance -with the terms of the contract of sale". Buyer's right of examining goods at the time
of delivery is explicitly reserved which contemplates that the buyer shall not be deemed to have
accepted the goods "unless and until he has had reasonable opportunity of examining them for
the purpose of ascertaining whether they are in conformity with the contract".
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JUDGEMENT

There cannot be any doubt that, claim for damages for non-acceptance would lie only when the
buyer acts "wrongfully" in refusing to accept goods contracted to be purchased. In the instant
case, the act of the defendant cannot be said to be "wrongful" because he had merely exercised
his statutory rights contemplated Under Section 17(2)(a). There is also nothing on record to
afford to the plaintiff protection as the plaintiff did not exercise his right to resell thereunder. On
evidence, it is established that the plaintiff took recourse to re-sell accepting the position that the
goods supplied were of inferior quality and on that account reducing the price payable therefor
by the defendant. The right to re-sell contemplated, would arise in a case in which the seller can
have no complaint against the buyer in terms of Section 17(2) of the Act. The moment it is
established that the "implied condition" contemplated Under Section 17(2) is breached by the
seller, the contract shall become enforceable and right to re-sell contemplated, cannot be
enforced by him against the buyer.

Admittedly, in this case, the goods had not been delivered to the defendant. The goods
despatched by the plaintiff were lying at the Railway Station and delivery could not be taken by
the defendant without honouring the Hundi and taking from the Bank the Railway Receipt to
obtain delivery from the railways of the gods despatched. Section 2(2) defines the term
"delivery" to mean "voluntary transfer of possession from one person to another". In this case,
transfer of possession of the goods despatched had not taken place in favour of the defendant. In
the instant case, as discussed above, the defendant had repudiated the contract and had himself
served the notice through his lawyer on the plaintiff for breach of the contract. The word
"repudiate" used in the said provision signifies "duty or obligation owed to other party" (see
Black's Law Dictionary, Fifth Edition, page 1171). Black also gives another meaning of the term
- "the act of a buyer or seller in rejecting the contract of sale either partially or totally". For the
word "rescind", which occurs in the above extract, meaning is also given in Black at page 1174.
It means -(1) to declare a contract void in its inception and to put an end to it as though it never
were; (2) Not merely to terminate it and release parties from further obligations to each other but
to abrogate it from the beginning and restore parties to relative positions which they would have
occupied had no contract ever been made. In the instant case, on evidence, the plaintiff must be
deemed to have treated the contract sued upon to be "rescinded". Indeed, his claim for "damages
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for the breach" contemplated , must fail because the defendant is found not to have breached the
contract

For all the forgoing reasons, the appeal fails and is dismissed. The decision of the Court below
dismissing the suit is upheld. However, there is no order as to costs in this appeal as
defendant/respondent has not appeared in this Court.

K.N. LAKSHMIAH ALIAS N. LAKSHMIAH VS HAJEE S. ABDUL AZEEZ

FACTS

On 19th March, 1947, the appellant entered into a a contract with the plaintiff in O.S. No.721 of
1947 for the purchase of 150 cotton parachutes at Rs. 24-8-0 per parachute. This is evidenced by
the document, Exhibit A-I (page 15 of the printed papers) and there can be no doubt that it is a
completed contract of sale between the parties, the purchaser (the appellant) to pay the: packing
and cartage charges. The further facts were that the goods were despatched by train to Hindupur,
the place where the appellant was to receive them according to the contract. The railway receipt
was sent along with a demand draft through a bank in Hindupur, according to the usual trade
practice. The facts are not in dispute before us that the appellant refused to honour the documents
and take delivery of the goods, contending that he was entitled to what he termed 'open delivery',
namely, that he would first make an inspection of the goods, and then take delivery of them, only
if he was satisfied that the goods substantially corresponded with the description, or, with the
sample which he alleged that he was shown. There was further correspondence between the
parties, after the goods were left in this fashion undelivered at Hindupur, and, in accordance with
one of the terms of the contract, the respondent firm advertised the sale of these goods to be held
on 3rd August, 1947. The sale was originally stopped, but, ultimately, actually held on 24th
August, 1947, through certain public auctioneers.
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ISSUES

whether it is the appellant that committed breach of the contract, or, whether it is the respondent
who has done so?

ARGUMENTS AND REASONING

some vague right of inspection seems to be implied in the law, with reference to Section
17(1) and (2) of the Indian Sale of Goods Act. This argument, when examined, is found to be
totally without substance. It is clear from a scrutiny of Section 17(1) and (2) that that section
relates to a particular kind of sale, known to trade usage as a sale by sample. It is obviously
necessary that a particular sample should be agreed upon, between the parties, as that to which
the goods supplied should correspond, and also that there should be a clear term of the contract
that the sale will be with reference to such a sample. It is sufficient here to observe that, in
Pollock and Mulla's Indian Sale of Goods Act, 2nd Edition, page 86, the learned authors state:

A sale at which a specimen of the goods is exhibited may nevertheless not be a sale by sample,
for, it is consistent with the buyer relying on the description alone, and not stipulating for
conformity to the specimen produced.

This is sufficient to make an end of the argument that the present contract was im-pliedly a
contract of sale by sample. No such express term, and not even any such implication can be
spelled out from the facts of the case.

This is precisely the situation here where the goods were consigned to Hindupur when it might
take days for them to arrive, and the consignor sends the documents to the consignee, so that the
consignee may be ready to take delivery. In fact, actual commercial or trade practice would come
to a standstill, if, in every case of consignment by rail to a destination which may even be in
another country, the consignee is presumed to have an implied right in law to inspect the goods
before delivery, and then, to take delivery of them or to leave them at the spot at his option.
Since the carrier's responsibility must admittedly cease when the consignee has an opportunity to
take delivery, the result of this will be that such implication will work havoc in trade practice,
and bring commerce to a standstill. We have been shown absolutely no ground for any inference
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that this is implied in the law on the subject. Clearly, he terms of the contract in the present case
totally exclude it.

JUDGEMENT

The learned Judge (Basheer Ahmed Sayeed, J.) held that both upon the facts and the law, it was
abundantly clear that breach of the contract was committed by the appellant alone. He also held
that, under a particular term of the contract, the respondent was justified in holding a sale of the
rejected goods, even though the notice might not have reached the appellant by that particular
date. We are in entire agreement with this view, which appears to be the only view possible upon
the facts, and in the context of the relevant legal principles. There can be no doubt whatever that
the document, Exhibit A-I, evidences a completed contract of sale for the supply of goods, and
that dominion in the goods passed to the appellant, as soon as this document was signed. It is
sufficient, in this context, to refer to paragraph 7 of the contract, in which it is specified that the
goods will be booked by the route at the risk of the customer or the buyer, and to paragraph 6,
where it is laid down that every consignment refused or not taken delivery of, will be sold by
public auction, and that the buyer alone is responsible for the loss.

In brief, we are clearly of the view that it is the appellant alone who committed the breach of
contract, and occasioned loss through his negligence. The re-sale itself was in pursuance of a
specific term of the contract, which clothed the respondents with the right to sell the goods at the
risk of the buyer. The fact that they sent a notice which did not reach in time, cannot place them
in a worse position, when no notice was really required by the contract itself.
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LALCHAND DEEPCHAND VS BAIJNATH JUGAL KISHORE AND ANR.

FACTS

The plaintiff and the defendant had business in shellac before, but in April 1934-and I am now
stating the undisputed facts-the plaintiffs who are commission agents or local representatives of
certain up-country traders had four lots of old shellac in their godown. They are referred to
respectively as 124 bags, 157 bags, 22 bags and 254 bags. A broker, Routhmull, was authorized
by the plaintiff to negotiate the sale. So much is common ground. He approached the defendants
buyers and in April 1934 on the 30th the sale was concluded in respect of 124 bags and on the
7th May, if my recollection is right, the contract was concluded in respect of the 157 bags. This
is the lot in dispute. It is admitted, or at any rate, established that between the first enquiry by the
broker and the respective dates of the sowda, certain samples of four lots were sent by the buyers
to Messrs. R.B. Briggs & Co. for analysis. The analysts' report has been put in and proved. The
respective results, I will explain in greater detail hereafter, were 10.05 impurities for 124 bags,
13.05 for 157 bags, 20.06 and 36.26-a very wide range of variation 124 bags were delivered and
retained. They have been paid for. The 157 bags were delivered on the 13th May. The
weighment, which I shall have to describe in greater detail, took place on the 16th. On the 20th
or 21st the buyers sent a sample of the bulk to Messrs. Briggs & Co., with a result showing 21'6
impurities, and on the 24th they sent a further specimen which showed 24.75 per cent impurities.
I have advisedly used the word specimen for the following reasons: The story of the defendant is
that Routhmull brought the sample and the purchase was by sample and that the goods in the
godown were never inspected. The sellers' story is that one of the defendants or rather his brother
came and inspected the goods in the godown and himself took away specimens for the purpose
of finding out what price he should offer. In the former case it would be what is technically
known as a sale by sample and in the latter case it is not. In both cases the goods sold were
"ascertained" or "specified." That is a matter which relates to the point of law argued before me.
That then is the first main point on which there is conflict of evidence. The second is what
happened at the time of delivery? The sellers say that the goods were weighed and allowance
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was fixed for what is called "refraction," that the buyers accepted the goods without any
objection, that bills were sent, they promised to pay, but no payment having been made the
solicitor's, letter was sent to them on the 6th June. The buyers say that objection was raised at
once, or at any rate on the 16th, that the weighing, etc., was provisional, that the sellers requested
that a further and more representative sample of the bulk should be sent for analysis and agreed
to take back the goods if it was not successful, agreeing further, after they had heard the result,
actually to take them back. The letters written by the sellers' attorney proceeded upon the basis
that the sale was a sale by sample; so does the plaint. That brings me to the first matter of
difficulty which under our system of law confronts me.

ISSUES

(1) Was it a contract of sale by sample?

(2) Were the goods equal to sample?

(3) Were the buyers entitled to reject-this depending

(a) On acceptance and

(b) Upon the point of law?

ARGUMENTS AND REASONING

Now two points are taken by Mr. Ghose. Both are ingenious and have to be considered. The first-
is and this has also a bearing on the question of contract of sale by sample, that there cannot in
law and in fact be a sale by sample when no sample is in existence. I think he somewhat impairs
the logic of this argument when he concedes that it may be so if a sample was accidentally lost or
destroyed. His point is that where a sample is deliberately destroyed there cannot be a sale by
sample. There I disagreed. In my view, provided a specimen has been in existence on the basis of
which an offer was made and the offer was accepted notwithstanding the disappearance of that
specimen, the sale would remain a sale by sample. The common sense of it or the business sense
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of it is this: in great many modern transactions the seller will offer a sample of certain goods
which cannot be judged or compared with the bulk by mere physical examination. What
therefore is done is that the sample or portion of it is examined and the analysis obtained. The
quality is in the analysis. That must happen, and if that sale is in fact made in relation to the
specimen supplied, my view is that notwithstanding the sample is transformed into a certain
formula the sale would retain its original nature. There may be a difficulty if the sample is not
retained. Mr. Ghose's point in answer to this is well, at any rate, the sale would not be a sale by
sample: it might be a sale with a specific condition or express condition as to formula. I quite
agree. It might. In each case we have to determine what in this particular transaction or in that
particular trade is the way in which business is done. It seems to me on the evidence in this trade
that when the offer is made on the basis of a specimen and accepted, the sale is made upon that
specimen notwithstanding that the specimen is turned into a formula; the offer and the
acceptance must be regarded as being made on the basis of the accepted specimen. My view does
not bind anybody dealing with any other transaction in respect of these goods or any other goods.

The second point urged by Mr. Ghose in connexion with the specimen which I will now call
sample, is as follows: It is a point which I am bound to say I did not appreciate during the course
of the trial. I do not for a moment say that Mr. Ghose omitted anything, or he is not entitled to
make that case before me on behalf of the plaintiff. The question is whether on the evidence as it
stands his point is good. It is this: the contract was undoubtedly for stick lac and counsel for the
seller has throughout emphasized the distinction between stick lac and seed lac. In cross-
examination on the result of the analysis he made this clear and his point now again is two-fold.
He says first of all that this analysis is for one thing and the contract is for another. There has
been no test at all. His second point is that even if there has been a test there has been no proper
test and for this reason. The contract was for stick lac and you have taken analysis of the samples
of a residue or a portion of the goods supplied to you. If you would analyse the whole the result
would or might have been different. There is therefore the unknown factor both in the case of the
first analysis and second analysis, i.e., the impurities in the bulk which you did not send to the
analysts. Of that there is no evidence at all.
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JUDGEMENT

I think the decision should be in favour of the buyer. I find, therefore, that objection was raised;
the weighment was not intended as acceptance, and there was a discussion with Chouthmull, and
I further think he probably in some shape or other did ask for a further analysis and suggested
that he would be bound by the result. Why ultimately he changed his view I do not know. It
should be remembered that it has not been suggested and is clearly not the case, that the buyer
was in any need of money and could not pay. The market was going up at the time. I think that
the buyers rejected because they thought the goods were not up to quality. I find, therefore, in
favour of the buyer on the issue of acceptance.

CONTINENTAL EXPORTERS VS THE BHAVNAGAR TEXTILES PVT.

LTD

FACTS

The case of the appellant in brief is that, it has engaged in the export of garments to various
countries, so also the defendant-respondent is engaged in supplying of fabrics and processing of
fabrics, and the defendant-respondent approached the appellant-plaintiff seeking orders for
supply of fabrics for processing. The respondent-defendant used to supply the fabrics through
others like Soma Textiles, Rohit Mills, etc. Some parts of the payments were also made by the
appellant-plaintiff to the aforesaid parties on the instructions of the respondent-defendant.
Therefore, there is privy contract with the respondent-defendant. Accordingly, respondent-
defendant was obliged to supply fabrics and process fabrics. Accordingly the plaintiff-appellant
placed several orders with the respondent-defendant for the supply of aforesaid fabrics. The
respondent-defendant undertook to supply fine quality of fabrics for export and assured to supply
the entire quantity of fabrics ordered without delay and without any defect. The respondent-
defendant were knowing fully well the consequential loss to be incurred by the plaintiff if there
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is any slightest defect and delay in processing of fabrics. Knowing fully well all these conditions
the respondent-defendant did not follow the conditions while supplying the fabrics. The
materials supplied by the respondent-defendant were defective and were not fit for export,
therefore the appellant-plaintiff sustained loss to the tune of Rs. 2,12,080-50 ps. Accordingly, he
filed a suit claiming in all Rs. 2,66,662-66 ps., which include cost of bleaching, excess billing
and non-delivery of orange and lilac coloured fabrics and the interest.

After receipt of summons the respondent-defendant appeared through counsel and filed its
written statement contending that there was no privity of contract in between the plaintiff and the
defendant and the appellant-plaintiff used to place orders in writing directly with the
manufacturers for purchase of fabrics. Therefore, the question of short supply or supply of huge
quantities of fabrics does not arise, but with regard to samples were concerned there was
directing dealing in between the plaintiff and the defendant. Invoices were made by the
respondent-defendant in the name of the plaintiff-firm and samples were distinguished from
finished products. Therefore, in order to overcome the payment of Rs.2,66,662-66 M/s. Soma-
Textiles filed a false suit against the respondent-defendant.

ISSUES

1. Whether plaintiff proves that it had a privity of contract with the defendant in respect of the
suit transaction?

2. Whether plaintiff proves that it is entitled to claim the suit amount as a loss attributable to the
short supply/defective printing of the garments (suit goods) meant for export?

ARGUMENTS AND REASONING

The learned Counsel for the appellant submitted that the as per Section 17 of the sale of Goods
Act a contract was entered into between the appellant and the defendant. The sale by sample
only. Therefore the trial court has not properly appreciated the evidence placed on record. In
order to appreciate the contention it is just and proper to cull out Section 17 of the Sale of Goods
Act:
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17. Sale by sample.-(1) A contract of sale is a contract for sale by sample where there is a term in
the contract, express or implied, to that effect.

(2) In the case of a contract for sale by sample there is an implied condition-

(a) That the bulk shall correspond with the sample in quality;

(b) That the buyer shall have a reasonable opportunity of comparing the bulk with the sample;

(c) That the goods shall be free from any defect, rendering them unmerchantable, which would
not be apparent on reasonable examination of the sample;

Further, the learned Counsel for the appellant submitted that the trial court has held that the
plaintiff has produced only a carbon copy of the telex message said to have been sent to the
defendant and the defendant sent reply through telex message is incorrect.

Statements made by-

(1) persons who have any proprietary or pecuniary interest in the subject- matter of the
proceeding, and who make the statement in their character of persons so interested, or (2)
persons from whom the parties to the suit have derived their interest in the subject-matter of the
suit, are admissions, if they are made during the continuance of the interest of the persons
making the statements.

But in the instant case Exs. 38 to 58 are the copies of exchange of correspondence said to have
took place between the appellant and the defendant. Admittedly, Exs. P38 to P58 are not the
copies of the telegraph message received by the appellant from the defendant or sent by the
appellant to the defendant. Therefore the contention of the learned Counsel for the appellant that
the trial court is wrong in coming to the conclusion that there is no privity of contract in between
the plaintiff and defendant cannot be accepted.
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JUDGEMENT

I have carefully gone through the reasons assigned by the learned Sessions Judge in answering
Issue Nos. 1 to 2 in the negative. There is no written agreement of contract entered into between
the plaintiff and the defendant and it is submitted that the plaintiff has not maintained any books
of accounts to show that the defendant is due of the suit claim. Moreover, the plaintiff before
filing the suit, the plaintiff has not issued any legal notice calling upon the defendant to pay the
suit claim together with interest. Since the plaintiff failed to prove the privity of contract the
question of payment of any amount by the defendant does not arise. Non-adducing of any
evidence by the defendant is in no way helpful to the appellant. Therefore, the learned Sessions
Judge has rightly come to the conclusion in answering Issue Nos. 1 to 2 in the negative by
holding that there is no written contract or agreement entered into between the parties and the
question of acceptance of the carbon copies of the alleged telex messages exchanged between the
parties cannot be accepted. Hence I do not find any good reasons to interfere with the judgment
and order of the suit filed by the plaintiff-appellant.

Accordingly, the appeal is dismissed as devoid of merits. No order as to costs.

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BIBLIOGRAPHY

WEBSITES:

 www.scconline.com
 www.manupatra.com
 www.westlaw.com
 www.indiankanoon.com
 www.legalcrystal.com
 www.swarb.uk.co

BOOKS:

 Pollock&Mulla The Sale Of Goods Act 1930

 Avatar Singh The Sale Of Goods Act 1930
 Mulla The Sale Of Goods Act 1930