1955 (10) TMI 49 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the contract was opposed to public policy.
2. Whether the Plaintiff could be liable for damages for the alleged breach of warranty.
3. Whether there was an implied warranty of quality.
4. Measure of damages for breach of warranty.
5. Calculation of damages and diminution of price.

Detailed Analysis:

1. Whether the contract was opposed to public policy:
The Defendant contended that the Plaintiff's suit should be dismissed as the contract was opposed to public policy, arguing that the transport of goods from Damoh to Jabalpur on permits obtained in the Plaintiff's name contravened control orders in force. However, the Court found this contention without substance, stating, "There is nothing in the contract (Ex. P-l) regarding any contravention of a control order, nor does the contract provide that the Plaintiff had to undertake the transport of those goods to Jabalpur." The Court concluded that even if the Plaintiff delivered the goods to Jabalpur despite the control order, it did not vitiate the contract of sale as being opposed to public policy.

2. Whether the Plaintiff could be liable for damages for the alleged breach of warranty:
The Plaintiff argued that the property in the goods passed to the buyer on the date of sale, and hence, he could not be liable for any damages for the alleged breach of warranty. The Court, however, determined that the contract was not for the sale of specific or ascertained goods, and the property in the goods did not pass on the date of the sale but on the date of delivery. The Court noted, "Under Sections 18, 19 and 23 of the Sale of Goods Act, the property in the goods did not pass on 5-11-1944 when the contract of sale was made but on 11-11-1944 when delivery was given."

3. Whether there was an implied warranty of quality:
The Plaintiff contended that no warranty of quality was expressly stipulated nor could it be implied under the circumstances. The Court disagreed, citing Section 16 of the Sale of Goods Act, which implies a condition that goods shall be of merchantable quality when bought by description from a seller who deals in goods of that description. The Court stated, "Masur is a foodstuff and it is reasonable to presume that, the purpose of the purchase was its use as a foodstuff." It concluded that there was an implied warranty of quality, as the goods were not of merchantable quality at the time of delivery.

4. Measure of damages for breach of warranty:
The Defendant argued that the trial Court's estimate of the market price of the damaged masur was incorrect and that the measure of damages should be the difference between the contract rate and the rate of the damaged goods on the date of delivery. The Court upheld the principle adopted by the trial Court for assessing damages, stating, "The principle adopted by the trial Court, for assessing damages for breach of warranty of quality is correct." The Court further explained that damages should place the injured party in the same position as if no default had occurred, aligning with the principle of compensating for the injury suffered due to non-performance of the contract.

5. Calculation of damages and diminution of price:
The Plaintiff contended that the rate of damages had been ascertained on correct principles. The Court concluded that the Defendant was entitled to claim the difference between the market price of good masur and the market price of the damaged masur as general damages under Section 59 of the Sale of Goods Act. The Court stated, "We therefore hold that the Appellant would be entitled to claim the difference between the market price of good masur (i.e., 7 1/2 seers per rupee) and the market price of the damaged masur (i.e., 15 seers per rupee) as his general damages under Section 59 of the Act which he can set up in diminution of the price." Consequently, the damages were calculated to amount to Rs. 2,000/-, reducing the decretal amount by Rs. 500/-.

Conclusion:
The Court partially allowed the Defendant's appeal by adjusting the damages based on the correct principles of diminution in price due to the breach of warranty, ultimately reducing the decretal amount and leaving the parties to bear their own costs in both Courts.