- (1.) THIS is a revision filed by the defendants in a suit for recovery of money.
(2.) THE respondent Bhagwan Sahai and Bhonrey Lal sued the appellant Prabhu Dayal and respondents No. 3 Babu Lal on the allegations that the defendants had agreed to purchase 65 bags of tilli on 3rd October, 1947, at the rate of Rs. 30/4/- per maunds. THE defendants, however, did not take delivery of the goods as prices bengan to fall and the plaintiffs served a notice on the defendants on 9th October, 1947, that if they did not take delivery of the goods at once the same would be sold at market rate and any loss which may accrue would be recovered from the defendants. It was alleged that the defendants did not take delivery of the goods which were sold ultimately on 16th October 1947 in the market resulting in a loss of Rs. 411/12/ -. THE plaintiffs claimed the said amount together with postal charges of -/9/ -. Prabhu Dayal alone filed the written statement. He admitted the contract for the purchase of 65 bags of till and stated that he had sent his man to take delivery of the goods but it transpired that the goods were of very inferior quality as compared with the sample and when this fact was brought to the notice of plaintiffs, the plaintiffs agreed that the contract be deemed to have been cancelled. It was pleaded that the defendants did not commit any breach of the contract, that no loss had been sustained by the plaintiffs, and a proper reply was given to the notice sent by the plaintiffs. THE Civil Judge, after evidence, held that the goods of which delivery was to be given were not according to the sample and the defendants did not commit any breach of the contract. He accordingly dismissed the suit. On appeal the learned District Judge reversed the finding and held that the breach of the contract was made by the defendants. He held the plaintiffs entitled to damages claimed by them. He accordingly allowed the appeal and decreed the suit in favour of the plaintiffs. Hence this revision. The first appellate court in coming to the conclusion that the breach of contract was made by the defendant relied on the fact that the defendants' agent had seen the goods before the agreement to purchase was entered into and the agent had satisfied himself as to the quality of goods by taking samples by means of a parkhee from 20 or 25 bags, and if any defect was detected later at the time of delivery the plaintiffs were not to blame because the said defect had not developed later by any act or negligence of the plaintiffs. The lower court did not look into the case from the proper angle and did not appreciate the law applicable to a transaction of this nature, As held by this Court in Bhagirath vs. Samdu Khan (1) where the court arrives at a conclusion without applying its mind to the point involved in the case or misapprehends the nature of the enquiry before it altogether, it acts with illegality or material irregularity in the exercise of its jurisdiction, when such acting has a material affect on the result of the proceeding. The contract of sale in the present case was entered into as a contract of sale by sample. It is immaterial whether the samples were taken out by the defendants' agent or by the plaintiffs for the sample was ultimately taken to the defendants' shops and the sample was approved by Bhagwan Sahai, a partner of the defendants. The learned District Judge has placed great reliance on the fact that the samples were taken by Jagannath, agent of the defendants' firm. But that is by no means correct. The plaintiffs Bhonrilal in his statement said that the goods were shown to the defendant through several brokers, and the plaintiff, had arranged for the sample to be seen by the defendants at their shop, and after Bhagwan Sahai, a partner of the firm of the defendants had seen the sample the agreement was entered into. In the case of a contract of sale by sample, certain conditions are implied under sec. 17 of the Indian Sale of Goods Act: - (1) That the bulk shall correspond with the sample in quality. (2) That the buyer shall have a reasonable opportunity of comparing the bulk with the sample. (3) That the goods shall be free from any defect rendering them unmerchantable, which would not be apparent on reasonable examination of the sample. The plaintiffs maintained that the defendants did not make any attempt to take delivery, as the price had fallen. The defendant's version on the other hand is that they had sent their men with bags and the weigh-man, and when the goods of one or two bags had been taken out and weighed, the defendants' agent Jagannath asked the plaintiff's man to wait until he could consult the defendants for instructions. Jagannath conveyed to the defendants that the goods were not according to sample and were discovered to contain clods occasioned by the goods having become wet on some occasion and therefore not according to sample. According to P. W. 2, Kanhaiyalal broker this information was conveyed to him by the defendants with the further decision of the defendants that the goods being not according to same and having been found to be defective will not be taken delivery of by the defendants. It is important to note that this witness Kanhaiyalal who was a broker in the transaction does not suggest that he contradicted the plaintiff's as to goods being not according to sample or suffering from the alleged defect. The plaintiff admitted in cross examination that the defendants' weighman did come with bags but after weighing the goods of one bag, he declined to go on with the weighment further until instructed by the defendants. Bhonrilal P. W. 1 also admits that he thereafter went to the defendants, and asked them to continue the delivery but they declined to take delivery. Bhonrilal has suppressed the fact that the defendants then and there told him also the reason for not taking delivery. The plaintiff's other witnesses are P. W. 3 Murlidhar, P. W. 4 Laturmal, P. W. 5 Nathuram, and P. W. 6 Mishri Lal. They say that the tilli contracted for was merchantable, but the defendants declined to take delivery because new tilli had come in the market and the rate of the old tilli had gone down. Their evidence is totally unreliable keeping in view the evidence of P. W. 2 Kanhaiyalal and the admissions of the plaintiff P. W. 1 as to the reason for not taking delivery of the goods. Jagannath D. W. 3, who had gone to take samples and later on to take delivery, and was no longer in the service of the defendants, at the time of giving his statements, has said that the sample was seen by applying parkhee, an instrument about 1/3" round, and the defect of clods (due to dampness) found later at the time of taking delivery could not be detected - by taking samples with parkhee. This witness is fairly independent, and his evidence may be considered to be reliable. Now as would be seen from a reference to sec. 17 of the Sale of Goods Act, if the defects which are noticed later on are not apparent on reasonable examination of the ample the buyer can reject the goods on discovering the defects later. Some evidence has been led by the plaintiff as stated above to show that the goods were not unmerchantable. Unmerchantable, however, does not mean that they cannot find any sale in the market, but that the goods suffer from a defect which is not expected to be found in goods which are generally sold in the market. Now oilseeds are generally expected to be dry and dampness may affect their oil content. The plaintiffs have denied the goods to be defective, but have not said that the goods would still be merchantable even through the defects point out by the defendants were there. In the circumstances, it must be held that the goods contained defects which could not be apparent by examining the sample, and were unmerchantable and, therefore, the defendants were justified in not accepting the delivery of the goods. In that view the defendants did not commit any breach of the contract and the plaintiffs are not entitled to pay damages which they may have suffered on resale of the goods. If was argued by learned counsel for the respondent that even accepting the defen- goods are found to be defective, the buyer has dant's version that they had only taken pains the option to reject the entire quantity of to see the goods of one or two bags, there was goods. nothing to show that the goods of the remaining bags were also defective, and there was, The revision is, therefore, allowed, the therefore, breach of contract by the defendants judgment and decree of the lower court is set at any rate in respect of 63 bags. This argu- aside, and that of the trial court restored with ment is totally untenable for if some of the costs throughout. . ;