Kailash Sharma vs. The Patna Municipal Corporation and Ors.
Citation: CWJC No. 9730 of 2006
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The Appellant-Company sold a certain number of fogging machines (used for killing mosquitoes) to the Respondent-Corporation for which the payment had to be made within one week of delivery. The Respondents did not pay within one week. The Respondent did not communicate with the appellants w.r.t the payment afterwards too. After 6 months of using the machine, the Respondents communicated with the appellants, but only to complain about the fogging machines’ inefficiency. They said that the machines were defective. Next, the Respondents intended to return the machines. The Appellants have filed this suit to recover the payment of machines from the respondents. This Judgement is given after three year of the delivery of goods.
Issue: Whether the Respondents are liable to pay for the machines (liable to pay if repudiation of transaction not allowed).
Relevant Provision(s): Section 13(2), 32, 42 and 59 of Sale of Goods Act, 1930
According to section 42 of the Sale of Goods Act, the act of receiving the machine, after demonstration, using it and retaining it for a long time amounts to valid acceptance. In this case, the Respondents have accepted the machines.
The Court in this case discussed Section 32 of the Act (payment and delivery are concurrent conditions) and noted that the law provides that payment and delivery are concurrent but that is subject to an agreement otherwise. Here the agreement was for payment within one week of delivery. Furthermore, in the present case, three years are over.
Section 13 (2) of the Indian Sale of Goods Act, 1930, clearly states that where there is a warranty then at best the purchaser can raise a claim for damage but cannot repudiate the transaction itself as is being sought to be done by the Corporation. This section was read with Section 59 of the Act. Section 59 says that a buyer is not by reason of a breach of warranty (by the seller) entitled to reject the goods. He may sue for damages or for breach of warranty. Here too, the Respondents, after using the machines for a long time, cannot simply return the machines to the appellants without payment for the machines.
The court eventually held that the Respondent-Corporation is at fault in law for the non-payment. The facts are merely a pretext to withhold the payment.
Conclusion: Respondents were held to be liable to pay for the fogging machines as they could not legitimately return the machines after use/ repudiate the transaction.
Author: Vishrut Kansal