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TMI Blog1977 (12) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... NDRACHUD Y.V., BHAGWATI P.N., KRISHNA IYER V.R., UNTWALIA N.L., MURTAZA FAZAL ALI S. AND KAILASAM P.S. JJ. A. Subba Rao, Advocate, for the intervener. B. Kanta Rao, Advocate, for the appellants in C.A. Nos. 2488-2497 of 1972. Sachin Chowdhary, Senior Advocate, and B. Sen, Senior Advocate (S.S. Bose, K.K. Chakraborty, A.G. Manzes, J.B. Dadachanji and K.J. John, Advocates, with them), for the appellant in C.A. No. 724 of 1976. L.N. Sinha, Senior Advocate (D.N. Mukkerjee, G.S. Chatterjee and A.K. Ganguli, Advocates, with him), for respondents Nos. 1 to 4 in C.A. No. 724 of 1976. Soli J. Sorabjee, Additional Solicitor-General (in C.A. Nos. 2488-97) and P. Parameshwara Rao, Senior Advocate (A.K. Ganguli and T.V.S. Narasimhachari, Advocates, with them), for the respondent in C.A. Nos. 2488-2497 of 1972. -------------------------------------------------- The judgment of CHANDRACHUD, BHAGWATI, KRISHNA IYER, UNTWALIA, MURTAZA FAZAL ALI and KAILASAM, JJ., was delivered by CHANDRACHUD, J. BEG, C.J., delivered a separate judgment. BEG, C. J.- I am in general agreement with my learned brother Chandrachud, J., who has discussed all the authorities s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislative. It is true that passages from the judgment of Pathak, J., in the case of Ram Bilas Ram Gopal [1969] 24 S.T.C. 508 (F.B.); A.I.R. 1970 All. 518 (F.B.)., were cited and specifically disapproved by a Bench of this Court in Chittar Mal Narain Das v. Commissioner of Sales Tax [1970] 26 S.T.C. 344 (S.C.); [1971] 1 S.C.R. 671. But, perhaps the view of this court in Chittar Mal Narain Das [1970] 26 S.T.C. 344 (S.C.); [1971] 1 S.C.R. 671., goes too far in this respect. It is not really the nomenclature of the order involved, but the substance of the transaction under consideration which matters in such cases. In the first type of cases mentioned above the substance of the concept of a sale, as found under our law, itself disappears because the transaction is nothing more than the execution of an order. Deprivation of property for a compensation, which may even be described as "price", does not amount to a sale when all that is done is to carry out an order so that the transaction is substantially a compulsory acquisition. On the other hand, a merely regulatory law, even if it circumscribes the area of free choice, does not take away the basic character or core of sale from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the field of choice is a necessary concomitant of a controlled or mixed economy which ours is. Absolute freedom of contract or unregulated operation of the laws of supply and demand, which an apotheosis of the laissez fairs doctrine demanded, led really to a shrinking of the area of freedom in the economic sphere, producing gross inequalities in bargaining powers and recurrent crises. Therefore, a regulated or a socialistic economy seeks to regulate the play of forces operating on the economic arena so that economic freedom of all concerned, including employers and employees, is preserved and so that the interests of consumers are also not sacrificed by any exploitation of conditions In which there is scarcity of goods. I think that the regulation or restriction of the area of choice cannot be held to take away the legal character of the transactions which take place within the legally restricted field. It is too late in the day, when so much of the nation's social and economic activities are guided and governed by control orders, allotment orders, and statutory contracts, to contend that mere State regulation of the economic sphere of life results in the destruction of the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. I think the case is distinguishable. This, however, makes no difference to the common conclusion reached by us on the facts of the cases before us. CHANDRACHUD, J.- These appeals have been placed for hearing before a seven-judge Bench in order to set at rest, to the extent foreseeable, the controversy whether what is conveniently, though somewhat loosely, called a "compulsory sale" is exigible to sales tax. When essential goods are in short supply, various types of Orders are issued under the Essential Commodities Act, 1955, with a view to making the goods available to the consumer at a fair price. Such orders sometimes provide that a person in need of an essential commodity like cement, cotton, coal or iron and steel must apply to the prescribed authority for a permit for obtaining the commodity. Those wanting to engage in the business of supplying the commodity are also required to possess a dealer's licence. The permit-holder can obtain the supply of goods, to the extent of the quantity specified in the permit, from the named dealer only and at a controlled price. The dealer who is asked to supply the stated quantity to the particular permit-holder has no option but to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. Pvt. Ltd., 2, Brabourne Road, Calcutta-1, to be supplied by M/s. Vishnu Agencies (Pvt.) Ltd., 3, Chittaranjan Avenue, Calcutta-13, on conditions detailed below. The price of material involved must be deposited with the stockist within 15 days and the actual delivery must be taken within 15 days from the date of issue of the permit. The licence is issued only for the purpose of manufacturing of mosaic tiles at 183, Netaji Subhas Road, Calcutta-40. Under no circumstances will the validity of the permit be extended beyond the period of 15 days from the date of its issue. Cement Total Tonnage Country cement at Rs. 144.58 per M. T. Ton Cwt. exclusive of S.T. 10 M/T (Ten M/T only)." The appellant supplied cement to various allottees from time to time in pursuance of the allotment orders issued by the appropriate authorities and in accordance with the terms of the licence obtained by it for dealing in cement. The appellant was assessed to sales tax by the first respondent, the Commercial Tax Officer, Sealdah Charge, in respect of these transactions. It paid the tax but discovered on perusal of the decision of this court in New India Sugar Mills Ltd. v. Commissioner of Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utta High Court, namely, that the transactions amount to sales and are taxable under the Sales Tax Act. Counsel appearing in the Andhra Pradesh appeals agree that the decision in the Calcutta case will govern those appeals also. Since the crux of the appellant's contention is that the measures adopted to control the supply of cement leave no consensual option to the parties to bargain, it is necessary first to notice the relevant provisions of law bearing on the matter. The West Bengal Cement Control Act (26 of 1948) was enacted in order to "confer powers to control the production, supply and distribution of, and trade and commerce in, cement in West Bengal". Section 3(1) of the Act empowers the Provincial Government to provide, by Order in the official Gazette, for regulating the supply and distribution of cement and trade and commerce therein. Section 3(2) provides by clauses (b) to (h) that an Order made under sub-section (1) may provide for regulating or controlling the prices at which cement may be purchased or sold and for prescribing the conditions of sale thereof; regulating by licences, permits or otherwise, the storage, transport, movement, possession, distribution, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en order issued under paragraph 3, weigh the cement in his presence or in the presence of his authorised representative at the time of delivery. We are not concerned with the amendments made by the Government of West Bengal to the Cement Control Order on December 30, 1965, by which, inter alia, paragraphs 2, 3, 4, 8 and 8A of that Order were deleted. The appeal from the decision of the Calcutta High Court is limited to the transactions between the appellant and the allottees from the years 1957 to 1960. As regards the batch of appeals from Andhra Pradesh, the levy of tax was challenged by three sets of persons, the procuring agents, the rice-millers and the retailers with the difference that the procuring agents were assessed to purchase tax, while the others to sales tax under the Andhra Pradesh General Sales Tax Act, 1957. By virtue of the provisions of the Andhra Pradesh Paddy Procurement (Levy) Orders, the paddy growers can sell their paddy to licensed procuring agents appointed by the State Government only and at the prices fixed by the Government. The agriculturist has the choice to select his own procuring agent but he cannot sell paddy to a private purchaser. The procur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of sale prices receivable, or if a dealer so elects, actually received by the dealer ..... By clause (h) of section 2, "sale price" is defined to mean the amount payable to a dealer as valuable consideration for "the sale of any goods". By section 4(1), every dealer whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum is liable to pay tax under the Act on all "sales" effected after the date notified by the State Government. Section 2(n) of the Andhra Pradesh General Sales Tax Act, 1957, defines a "sale" as "every transfer of the property in goods by one person to another in the course of trade or commerce, for cash, or for deferred payment, or for any other valuable consideration ....." Section 5 of that Act is the charging section. According to these definitions of "sale" in the West Bengal and Andhra Pradesh Sales Tax Acts, transactions between the appellants on the one hand and the allottees or nominees on the other are patently sales because, indisputably, in one case the property in cement and in the other, property in paddy and rice was transferred for cash consideration by the appellants; and in so far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 54 in the State List of the Constitution must receive the same meaning as in the Sale of Goods Act is repelled on behalf of the State Governments with the argument that constitutional provisions which confer legislative powers must receive a broad and liberal construction and, therefore, the expression "sale of goods" in entry 48 and its successor, entry 54, should not be construed in the narrow sense in which that expression is used in the Sale of Goods Act, 1930, but in a broad sense. The principle that in interpreting a constituent or organic statute, that construction most beneficial to the widest possible amplitude of its powers must be adopted has been examined over the years by various courts, including this court, and is too firmly established to merit reconsideration. Some of the leading cases on this point are the Privy Council decisions in British Coal Corporation v. King [1935] A.C. 500., Edwards v. A.-G. for Canada [1930] A.C. 124., and James v. Commonwealth of Australia [1936] A.C. 578.; the Australian decisions in Morgan v. Deputy Federal Commissioner of Land Tax, N.S.W.[1912] 15 C.L.R. 661., and Broken Hill South Ltd. v. Commissioner of Taxation, N.S.W. [1937] 56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the essence of "sale" in the legal sense is the transfer of the property in a thing from one person to another for a price. The court then proceeded to determine the connotation of the expression "sale of goods" in the legal sense and held, having regard to the evolution of the law relating to sale of goods, the scheme of the Indian Contract Act and the provisions of the Sale of Goods Act, 1930, which repealed Chapter VII of the Indian Contract Act relating to sale of goods, that according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the Parties for the purpose of transferring title to the goods, which presupposes capacity to contract, that the contract must be supported by valuable consideration and that as a result of the transaction property must actually pass in the goods. "Unless all these elements are present, there can be no sale." Basing itself on this position, the court finally concluded in Gannon Dunkerley [1958] 9 S.T.C. 353 (S.C.); [19591 S.C.R. 379., that the expression "sale of goods" was, at the time when the Government of India Act was enacted, a term of well-recognised legal im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, unless the context otherwise clearly requires, not to have conferred a legislative power intended to be interpreted in a sense not understood by those to whom the Act was to apply. The view expressed in Gannon Dunkerley [1958] 9 S.T.C. 353 (S.C.); [1959] S.C.R. 379., that the words "sale of goods" in entry 48 must be interpreted in the sense which they bear in the Sale of Goods Act, 1930, and that the meaning of those words should not be left to fluctuate with the definition of "sale" in laws relating to sales of goods which might be in force for the time being may, with respect, bear further consideration but that may have to await a more suitable occasion. It will then be necessary to examine whether the words "sale of goods" which occur in entry 48 should not be construed so as to extend the competence of the legislature to enacting laws in respect of matters which might be unknown in 1935 when the Government of India Act was passed but which may have come into existence later, as a result of a social and economic evolution. In Attorney-General v. Edison Telephone Company of London [1880] L.R. 6 Q.B.D 24., a question arose whether the Edison Telephone Company, London, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1958] 9 S.T.C. 353 (S.C.); [1959] S.C.R. 379., the true question for decision, therefore, is whether in the context of the Control Orders issued by the Government of West Bengal for regulating the supply and distribution of cement, the transactions under which the appellant supplied cement to persons who were issued permits by the authorities to obtain the commodity from the appellant, involved an element of volition or consensuality. If they did, the transactions would amount to sales, but not otherwise. It is undeniable that under paragraph 2 of the West Bengal Order of 1948, which we have for convenience designated as the Cement Control Order, no person can dispose of or agree to dispose of any cement except in accordance with the conditions contained in a written order of the Director of Consumer Goods or the authorities specified in that paragraph. That is a limitation on the dealer's right to supply cement. Correspondingly by paragraph 3, no person can acquire or agree to acquire cement from any person except in accordance with the conditions contained in a written order of the Director of Consumer Goods or the authorities specified in that paragraph. That is a limitation on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such volition carries with it the willingness to trade in the commodity strictly on the terms of the Control Orders. The consumer too, who is under no legal compulsion to acquire or possess cement, decides as a matter of his volition to obtain it on the terms of the permit or the order of allotment issued in his favour. That brings the two parties together, one of whom is willing to supply the essential commodity and the other to receive it. When the allottee presents his permit to the dealer, he signifies his willingness to obtain the commodity from the dealer on the terms stated in the permit. His conduct reflects his consent. And when, upon the presentation of the permit, the dealer acts upon it, he impliedly agrees to supply the commodity to the allottee on the terms by which he has voluntarily bound himself to trade in the commodity. His conduct too reflects his consent. Thus, though both parties are bound to comply with the legal requirements governing the transaction, they agree as between themselves to enter into the transaction on statutory terms, one agreeing to supply the commodity to the other on those terms and the other agreeing to accept it from him on the very te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant contended that the deliveries of steel products were made under compulsion of law since it was the Controller who determined the persons to whom the goods were to be supplied, the price at which they were to be supplied, the manner in which they were to be transported and the mode in which the payment of the price was to be made. Since every facet of the transaction was prescribed by the Controller, so it was argued, there was no agreement between the parties and, therefore, the transaction could not be considered as a sale. Rejecting this contention, it was observed by Hegde, J., who spoke for the Constitution Bench, that though the Controller fixed the base price of the steel products and determined the buyers, the parties were still free to decide the other terms of the bargain, as for example, the time and date of delivery and the time and mode of payment and, therefore, it could not be said that there was no agreement between the parties to sell and buy the goods. It was held that though the area within which it was possible for the parties to bargain was greatly relieved on account of the Iron and Steel Control Order, it was not correct to contend that because law imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act defines "consent" and section 14 says that consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake as defined in sections 15 to 22. In the background of these provisions, the court observed that the cane-grower in the factory zone was free to make or not to make an offer of sale of cane to the occupier of the factory. But if he made an offer, the occupier of the factory was bound to accept it and the consent of the occupier not being caused by coercion, undue influence, fraud, misrepresentation or mistake was "free consent" as defined in section 14 of the Contract Act, even though he was obliged by law to enter into the agreement. "The compulsion of law is not coercion as defined in section 15 of the Act" and "in the eye of the law, the agreement is freely made". Since the parties were competent to contract, the agreement was made for a lawful consideration and with a lawful object, the agreement was not void under any provision of law and it was enforceable at law; the court held that the purchases of sugarcane were taxable by the State Legislature under entry 54, List II, of the Seventh Schedule of the Constitution. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ah, J., who delivered a dissenting opinion, observed after reviewing the position both under the English and the Indian law, that though it was true that consent makes a contract of sale, such consent "may be express or implied and it cannot be said that unless the offer and acceptance are there in an elementary form, there can be no taxable sale". Taking the view that on obtaining the necessary permit, the sugar mills on the one hand and the Government of Madras on the other agreed to "sell" and "purchase" sugar could admit of no doubt, the learned Judge said that when the Province of Madras after receiving the permit, telegraphed instructions to despatch sugar and the mills despatched it, "a contract emerged and consent must be implied on both sides though not expressed antecedently to the permit". The Controller brought the seller and the purchaser together, gave them permission to supply and receive sugar leading thereby to an implied contract of sale between the parties. The learned judge accepted that there was an element of compulsion in both selling and buying, perhaps more for the supplier than for the receiver, but, according to him, "a compelled sale is nevertheless a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annon Dunkerley [1958] 9 S.T.C. 353 at 377-378, 386-387 (S.C.); [1959] S.C.R. 379 at 413-414, 425-426., to which we have referred at length in another context. In fact, Shah, J., observes at page 469 of the Reports (page 324 of 14 S.T.C.), after discussing the judgment in Gannon Dunkerley [1958] 9 S.T.C. 353 at 377-378, 386-387 (S.C.); [1959] S.C.R. 379 at 413-414, 425-426., that "the ratio decidendi of that decision must govern this case". The decision in Gannon Dunkerley [1958] 9 S.T.C. 353 at 377-378, 386-387 (S.C.); [1959] S.C.R. 379 at 413-414, 425-426., really turned on a different point, the question for consideration therein being whether the value of the materials used in the execution of building, contracts could be included within the taxable turnover of the company. It was contended on behalf of the company that the power of the Madras Legislature to impose a tax on sales under entry 48, List II, of the Seventh Schedule of the Government of India Act, 1935, did not extend to imposing a tax on the value of materials used in construction works, as there was no transaction of sale in respect of those goods, and that the provisions introduced in the Madras General Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the contractor should construct a building according to the specifications contained in the agreement, and in consideration therefor receive payment as provided therein, and as will presently be shown there is in such an agreement neither a contract to sell the materials used in the construction, nor does property pass therein as movables. It is therefore impossible to maintain that there is implicit in a building contract a sale of materials as understood in law." The final conclusion on the point involved in the appeal was expressed thus: "To sum up, the expression 'sale of goods' in entry 48 is a nomen juris, its essential ingredients being an agreement to sell movables for a price and property passing therein pursuant to that agreement. In a building contract which is, as in the present case, one, entire and indivisible-and that is its norm, there is no sale of goods, and it is not within the competence of the Provincial Legislature under entry 48 to impose a tax on the supply of the materials used in such a contract treating it as a sale." Thus, the two reasons given by the court in support of its conclusion were, firstly, that in a building contract there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Act, 1947, and compensation was paid therefor. The question was whether this amount was liable to income tax on the footing of sale of the wagons by the company. The contention on behalf of the revenue was that compulsory acquisition being treated as sale under the English law, the taking over of the wagons and payment of compensation therefor must also be regarded as sale for purpose of income tax and, therefore, the company was liable to a balancing charge under section 17 of the Income Tax Act, 1945. The case turned on the meaning of the word "sale" for the purposes of the excess profits tax legislation and the Income Tax Act, 1945 (8 9 Geo. 6, c. 32). Lord Morton in his dissenting speech found it "impossible to say that the only construction which can fairly be given to the word 'sold' in section 17(1)(a) of the Income Tax Act, 1945, is to limit it to a transaction in which the element of mutual assent is present". But the majority of the House came to a different conclusion, and held that the element of bargain was essential to constitute a sale, and to describe compulsory taking over of property as a sale was a misuse of that word. We are not concerned in these appeals wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or transfer on sale of any property ........... In the light of this entry under which stamp duty was payable, the question which the court had to consider was whether a transfer executed on behalf of a dissenting share-holder was a "transfer on sale". The answer depended upon whether there could be a sale even though the essential element of mutual assent was totally absent. Lord Evershed, M. R., observed in his judgment that what the Companies Act had done, by the machinery it had created, was that in truth it brought into being a transaction which ex facie in all its essential characteristics and effect was a transfer on sale. Donovan, L. J., in his concurring judgment said that when the legislature by section 209 of the Companies Act empowered the transferee-company to appoint an agent on behalf of a dissenting shareholder for the purpose of executing a transfer of his shares against a price to be paid to the transferor-company and held in trust for the dissenting shareholder, it was clearly ignoring his dissent and putting him in the same position as if he had assented. For the purpose of considering whether the transaction amounted to a sale, one must, according to the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.C.R. 459. has no application". The court distinguished the decision in New India Sugar Mills [1963] 14 S.T.C. 316 (S.C.); [1963] Supp. 2 S.C.R. 459., on the ground that it was founded on a different principle since the condition requiring mutual assent of the parties was lacking in that case. In Chittar Mal Narain Das v. Commissioner of Sales Tax [1970] 26 S.T.C. 344 (S.C.); [1971] 1 S.C.R. 671., the appellants who were dealers in foodgrains supplied to the Regional Food Controller diverse quantities of wheat in compliance with the provisions of the U.P. Wheat Procurement (Levy) Order, 1959. The High Court held in a reference made to it under the Sales Tax Act that the transaction amounted to a sale and was exigible to sales tax. In appeal to this court it was held by a Bench consisting of Shah and Hegde, JJ., that clause 3 of the U.P. Procurement (Levy) Order, 1959, sets up a machinery for compulsory acquisition by the State Government of stocks of wheat belonging to the licensed dealers, that the Order contains a bald injunction to supply wheat of the specified quantity day after day, that it did not envisage any consensual arrangement and that the Order did not even require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long as there was freedom to bargain in some areas the transaction could amount to a sale though effected under compulsion of a statute. Looking at the scheme of the U.P. Wheat Procurement Order, particularly clause 3 thereof, this court in Chittar Mal [1970] 26 S.T.C. 344 at 348 (S.C.); [1971] 1 S.C.R. 671 at 677. seems to have concluded that the transaction was, in truth and substance, in the nature of compulsory acquisition, with no real freedom to bargain in any area. Shah, J., expressed the court's interpretation of clause 3 in no uncertain terms by saying that "it did not envisage any consensual arrangement". In Salar Jung Sugar Mills Ltd. v. State of Mysore [1972] 29 S.T.C. 246 (S.C.); [1972] 2 S.C.R. 228., which was decided by a Bench of seven learned Judges, the appellants were subjected to levy of tax on purchase of sugarcane after the inclusion of sugarcane in the Third Schedule to the Mysore Sales Tax Act, 1957. They challenged the levy on the ground that on account of the Central and State Control Orders applicable to the transactions, there was no mutual assent between them and the growers of sugarcane in regard to supply of sugarcane by the latter and since there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuance of the directions given by the Government were liable to pay sales tax on the turnover relating to the price of gunny bags. In some of the connected appeals the question also arose whether the selling agents of the State Trading Corporation were liable to pay sales tax in respect of the price of the gunny bags in which they sold cement to the consumers. As regards the question whether the transactions between producers and the State Trading Corporation in so far as the supply of cement was concerned amounted to sales within the meaning of the Madras General Sales Tax Act, 1959, Hegde, J., who spoke for the three-Judge Bench, observed that there was "no dispute" that those transactions could not amount to sales in view of the Cement Control Order, 1958. On the question whether the gunny bags, in which the cement was supplied, can be considered to have been sold, it was observed that there was "no dispute" that if the price of gunny bags was held to have been wholly controlled, then the supply of gunny bags also could not be considered as sales. This position was held to have been concluded by the decisions in New India Sugar Mills Ltd.(1) and Chittar Mal Narain Das [1970] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligatory terms of a statute may nevertheless be a sale in the eye of a law. The Indian Contract Act which was passed in 1872 contained provisions in its seventh chapter comprising sections 76 to 123 relating to sale of goods which were repealed on the enactment of a comprehensive law of sale of goods in 1930. The Contract Act drew inspiration from the English law of contract which is almost entirely the creation of English courts and whose growth is marked by features which are peculiar to the social and economic history of England. Historically, the English law of contract is largely founded upon the action on the case for assumpsit, where the essence of the matter was the undertaking. The necessity for acceptance of the undertaking or the promise led the earlier writers on legal theories to lay particular emphasis on the consensual nature of contractual obligations. It was out of the importance which political philosophers of the eighteenth century gave to human liberty that the doctrine was evolved that every person should be free to pursue his own interest in the way he thinks best and therefore law ought to give effect to the will of the parties as expressed in their agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the freedom to combine; and in the last resort competition and combination were incompatible. Individualism was yielding to monopoly, where strange things might well be done in the name of liberty. The twentieth century has seen its progressive erosion on the one hand by opposed theory and on the other by conflicting practice. The background of the law, social, political and economic, has changed. Laissez faire as an ideal has been supplanted by 'social security'; and social security suggests status rather than contract. The State may thus compel persons to make contracts, as where, by a series of Road Traffic Acts from 1930 to 1960, a motorist must insure against third-party risks; it may, as by the Rent Restriction Acts, prevent one party to a contract from enforcing his rights under it; or it may empower a tribunal either to reduce or to increase the rent payable under a lease. In many instances a statute prescribes the contents of the contract. The Moneylenders Act, 1927, dictates the terms of any loan caught by its provisions; the Carriage of Goods by Sea Act, 1924, contains 6 pages of rules to be incorporated in every contract for 'the carriage of goods by sea from any port i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome an illusion. The policy of our Parliament in regard to contracts, including those involved in sale of goods, has still to reflect recognition of the necessity for a change, which could be done by a suitable modification of the definition of "sale" of goods. It all began with the reliance in Gannon Dunkerley [1958] 9 S.T.C. 353 at 364 (S.C.); [1959] S.C.R. 379 at 396-398., on the statement in the 8th Edition (1950) of Benjamin on Sale that to constitute a valid sale there must be a concurrence of four elements, one of which is "mutual assent ". That statement is a reproduction of what the celebrated author had said in the 2nd and last edition prepared by himself in 1873. The majority judgment in New India Sugar Mills [1963] 14 S.T.C. 316 at 323, 352 (S.C.); [1963] Supp. 2 S.C.R. 459 at 467, 510., also derives sustenance from the same passage in Benjamin's 8th edition. But as observed by Hidayatullah, J., in his dissenting judgment in that case, consent may be express or implied and offer and acceptance need not be in an elementary form. It is interesting that the General Editor of the 1974 edition of "Benjamin's Sale of Goods" says in the preface that the editors decided to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12, 425., Venkatarama Aiyar, J., was influenced largely by these observations and by the definition of "sale" in the Benjamin's 8th edition. Gannon Dunkerley [1958] S.T.C. 353 at 375, 376 (S.C.); [1959] S.C.R. 379 at 411, 412, 425., involved an altogether different point and is not an authority for the proposition that there cannot at all be a contract of sale if the parties to a transaction are obliged to comply with the terms of a statute. Since we are putting in a nutshell what we have discussed earlier, we would like to reiterate in the interest of uniformity and certainty of law that, with great deference, the majority decision in New India Sugar Mills [1963] 14 S.T.C. 316 (S.C.); [1963] Supp. 2 S.C.R. 459., is not good law. The true legal position is as is stated in the minority judgment in that case and in Indian Steel and Wire Products [1968] 21 S.T.C. 138 (S.C.); [1968] 1 S.C.R. 479., Andhra Sugars [1968] 21 S.T.C. 212 (S.C.); [1968] 1 S.C.R. 705., Salar Jung Sugar Mills [1972] 29 S.T.C. 246 (S.C.); [1972] 2 S.C. R. 228., and Oil and Natural Gas Commission [1976] 38 S.T.C. 435 (S.C.); [1977] 1 S.C.R. 354. To the extent to which Cement Distributors Pvt. Ltd. [1973] 31 S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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