Neney Kasi Viswanatham vs Gadigay Sanna Lingappa Dakappa by managing member Gadigay Dakkappa

Basheer Ahmed Sayeed, J.—The point that arises for consideration in this revision petition is whether the requirements of Section 54(2) of

the sale of Goods Act have been complied with in order to entitle the plaintiff, respondent to recover the deficiency on resale of goods consigned

to the petitioner, and which the petitioner is said to have refused to take delivery. The facts of the case are fairly simple. The defendant purchased

goods from the plaintiff through his agent P.W. 1. The agent selected the goods of the plaintiff in his shop and in respect of the price paid a sum of

Rs. 158 and odd and wanted that the goods should be despatched to the defendant at Bezwada and the balance of price should be collected

through the Kanara Bank at Bezwada. The goods were accordingly despatched and the R.R. was sent to the bank to be delivered over to the

defendant on payment of the balance of the price. The defendant did not choose to pay the amount and take delivery of the R.B. or the goods.

Thereupon the plaintiff proceeded to Bezwada to have the matter settled and then tried to use the good offices of P.W. 1 and also certain others to

mediate and see that the dispute was settled. But the plaintiff did not succeed in that. Thereupon he sold the goods to one Bugadl Lakshmanna for

the price then prevailing in the market and filed the suit for the difference that he was entitled to on account of the resale. The defendant raised the

plea that he did not commit any breach of contract and that in any event the plaintiff was not entitled to resell the goods without notice of resale and

without giving him the opportunity he was entitled u/s 54(2) of the Sale of Goods Act. The learned trial Judge has simply proceeded on the basis

that the defendant committed breach of contract in refusing to take delivery of the goods, that the plaintiff was entitled to resell the goods on such

refusal and that he was entitled to claim the difference in price on resale. It was incumbent upon the learned Judge to find out whether there was

notice of resale as required by Section 54(2) of the Act but he did not do so. On the other hand, the evidence is clear on both sides that no notice

of resale of the goods was issued by the plaintiff to the defendant before the sale to Lakshmanna actually took place, Section 54(2) lays down that

the resale can take place only after notice of resale has been given to the defendant who refuses to take delivery of the goods in pursuance of the

contract and it also disentitles the plaintiff to claim damages in the absence of notice of resale having been issued to the defendants. On this ground,

I should think that the defendant was entitled to succeed against the plaintiff. But the learned Counsel for the respondent, plaintiff, would say that

notice of resale would be essential only when the goods had passed to the defendant and that in this case the property and the goods did not pass

to the defendant and that when no-property has passed to the defendant the plaintiff would be entitled to resell the goods and claim the difference

between the contract price and the market price. On the question as to whether the goods had really passed to the defendant or not I am unable to

agree with the learned Counsel for the respondent for when once the goods had been selected and purchased and despatched to the defendant

after payment of advance towards a part of the price and when according to the arrangement entered into between the parties it was proposed that

the money should be collected through the instrumentality of a certain bank, I fail to see how the property in the goods could not have passed to

the purchaser. If the vendor, after the goods had been selected and advance had been paid in respect of the same, had not despatched the goods,

certainly it would be open to the defendant to say that the goods had become his after selection and after payment of advance. In such a case the

mere despatch of goods by rail and R.B. being sent to the bank for collection of the balance of unpaid sale price would not mean that the property

in the goods has not passed to the vendee. On the facts of this case it is clear that the property in the goods had passed to the purchaser and when

once the goods had passed to the purchaser and the question of resale arises in consequence of the refusal or the purchaser to take delivery of

goods and pay the balance of the price, the vendor would be bound to give notice of resale before the actual resale takes place. Even otherwise it

is not clear in the plaint that the plaintiff claims only the difference in price between the contract rate and the market-rate. On the other hand, what

the plaintiff seems to claim according to the plaint is the difference on resale of goods in favour of the subsequent purchaser. Besides, the evidence

of P.W. 1 also makes it clear that the plaintiff told P.W. 1 that the defendant took delivery of a part of the goods and that in regard to the balance

he failed to take delivery and that he asked P.W. 1 to get the matter settled. P.W. 1''s efforts did not fructify in that direction. In the light of the

circumstances I do not think there is much force in the contention of the learned Counsel for the respondent that the goods did not pass or that the

plaintiff was entitled to claim the difference between the market-rate and the contract rate which is not the case in the present suit, if authority is

required for the position that the vendor will not be entitled to resell the goods and claim the difference on resale without giving notice of resale to

the purchaser who refused to take delivery of the goods, it is enough to refer to the latest decision in ''Motilal Jhun Jhunia v. Moolchand'', 1950

All. L.J. 583 which has been referred to by the learned Counsel for the petitioner. - There are also numerous other decisions of this Court and

other Courts to which my attention has been drawn by the learned Counsel for the petitioner. I do not think it necessary to refer to them at length

on the question whether the property had passed to the vendee or not. Now on the facts in the present case I should think that the decision in

''Parthasarathi Gupta v. The Calcutta Glass and Silicate Works'' (1936) 61 M.L.W. 510 would apply to the facts. In these circumstances I think

the decision of the learned trial Judge cannot be upheld and the same will have to be set aside.

The petition is, therefore, allowed and the decree of the lower Court is set aside. The petitioner will be entitled to his costs.