Decided on February 12,1979



A.M.AHMADI - (1.) This Second Appeal is directed against the order passed by the learned Civil Judge J. D. Baria dismissing the plaintiffs suit with costs which came to be confirmed by the learned District Judge Panchmahals Godhra by his judgment and decree dated 23rd February 1976 2 The broad facts giving rise to the present litigation are almost admitted. The appellant-plaintiff is a registered Co-operative Society carrying on business in timber charcoal etc. in Devgadh Baria. Two heaps of charcoal described as lots Nos. 9 and 10 comprising 567 and 886 Boras (gunny bags of the standard size of 56 x 32) were put up for sale by public auction on 28th June 1971 at the Piplod Depot of the appellant-Society. The Range Forest Officer Shri Ghanshyam Shivnath Pande was present at the time of the said auction sale. Before the offers were invited from bidders the terms regarding the auction sale were read over to the bidders by Kantilal Purshottamdas the salesman of the appellant-Society. These terms are contained in a printed leaflet and are on the record of the case at Ex. 47. Term No. 2 indicates that the entire lot was put up for sale and the bids were to be made for the entire lot as a single unit. Term No. 3 which is material for our purpose reads as under:- *** After the aforesaid terms were read out to the bidders bids by ballots were accepted and lot No. 9 was sold to a merchant who offered to pay Rs. 10553.53 ps. under the ballot note Ex. 26. The highest bid for lot No. 10 was received from respondents-defendants who offered Rs. 17985.86 ps. Both these bids being the highest were accepted at the auction sale and sanctioned by the Range Officer in whose presence the sale took place. This is clear from Exhs. 26 and 36 which bear the signatures of the Range Officer Shri Pande in token of having sanctioned the said two bids. According to term No. 8 in Ex. 47 the highest bidder whose bid was accepted had to make the payment within 90 days or at the time of receiving delivery whichever was earlier. On the accepted bids bills were issued in respect of both the lots on 29th September 1971 Lot No. 9 which was purchased by another merchant was subsequently taken over by the defendants and thus the defendants were liable to pay Rs. 28 540.39 ps. in respect of both the lots to the appellant-Society. However when the defendants took delivery of the charcoal in lots Nos. 9 and 10 they paid an amount of Rs. 19 844.8 ps. leaving a balance of Rs. 8 49 ps. The defendants refused to pay the balance to the appellant-Society on the ground that the charcoal in the two lots was not of the quantity mentioned at the time when the auction bids were invited and the short fall was of the value exceeding Rs. 8 495.49 ps. and invited they were not liable to pay the balance to the appellant-Society. The appellant-Society thereupon served the defendants with a notice dt. 20th February 1973 calling upon them to pay the balance to which the defendants sent a reply on 28th February 1973 setting up the same plea. According to the defendants they were entitled to receive approximately 1453 boras of the standard size mentioned in the terms read out at the auction sale but instead they had received delivery of only 864 boras and hence they were not bound to pay the price for the short fall of 589 boras which were not delivered to them. As the defendants failed to make the payment on the above plea the plaintiff-appellant filed a Suit No. 48/73 in the court of the learned Civil Judge Junior Division Baria for the balance amount together with interest and costs. The learned Civil Judge came to the conclusion that term No 3 reproduced above was in the nature of a warranty and placing reliance on the decision in Harnarain Ramchandra Jaiswal v. Firm Radhakisan Narayandas. A. I. R. 1949 Nagpur 178 dismissed the suit with costs on 4th December 1974 Against the said order of dismissal the Society preferred an Appeal being Appeal No. 105/74 in the court of the learned District Judge Panchamahals at Godhra. The learned District Judge also came to the conclusion that the aforesaid term read out at the auction sale amounted to a warranty and placing reliance on Harnarains case he confirmed the order of dismissal passed by the learned trial Judge. It is against this view taken by the two courts below that the present appeal is preferred by the original plaintiff-.Society.
(2.) At the hearing of this Second Appeal Mr. Zaveri the learned advocate for the appellant submitted that specific goods were sold by the plaintiff Society in two lots which were in full view of the bidders and the mention of the number of boras contained in each lot was merely an estimate which did not form part of the contract and was therefore not a warranty as held by two courts below. He also submitted that on a close scrutiny of the decision in Harnarains case on which reliance has been placed by both the courts below it becomes obvious that it has no application so far as the facts of the present case are concerned. The principal question which therefore arises for consideration is whether term No. 3 read out at the auction sale at the time of inviting offers amounts to a warranty as held by the two courts below.
(3.) A contract may consist of a single term or it may have more than one term. Where a contract has more than one term the nature and import of each term has to be considered in a contextual setting. Very often courts are confronted with the question whether a particular statement is a term of the contract or a mere representation. If the statement is an essential term of the contract it is a condition breach whereof allows the other party to repudiate the contract. If the representation or the statement though forming part of the contract is not vitally important to the subject matter of the contract but is merely collateral to the main performance of the contract it can bE termed a warranty breach thereof may give the opposite party a right to an action in damages. If the representation does not from part of the contract that is if it is neither a condition or a warranty it amounts to an expression of opinion not intended to enter the bargain and its nonfulfilment does not give rise to Any right to a legal action. Thus if the parties considered the term as an essential feature of the contract it is a condition; if they regarded it as a subsidiary or collateral term of the contracts it is a warranty; but if they considered it neither it is a mere representation or expression of opinion not forming part of the contract nonfulfilment whereof is of no legal consequence whatsoever. Whether a stipulation in a contract is a condition or warranty or neither would naturally depend on the construction of the contract in each case. (See sec. 12 of the Sale of Goods Act 1930 hereinafter called the Act).;

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