P L D 1958 Dacca 512 (PLP)

NANDI, J.‑This appeal is on behalf of the plaintiff and arises out of a suit for recovery of damages for alleged breach of contract committed by the defendant in respect of sale and purchase of some Japanese cotton yarn. The facts which are not in dispute are as follows :‑The plaintiff agreed to sell 'and the defendant agreed to buy on 10‑3‑.1951 fifty bales of Japanese cotton yarn to be shipped by S. S. Sirdhana. The contract is evidenced by what is called a sauda and marked Exhibit 2 and runs as follows :‑ "Messrs Ahmed Abdul Gani, 213, Khatunganj, Chittagong, Rahmania Trading Co., Chittagong. Sir, This is to confirm that we have bought from you this day the following goods as per terms mentioned below :‑‑

1. Description :‑No. 40s Japan any ticket,

2. Quantity :‑50 Bales (fifty bales) in all.

3. Price : Rs. 56‑8‑0 (Rupees fifty six and annas eight) only per bundle;

4. Shipment :‑S. S. Sirdhana, on forward basis.

5. Payment :‑Cash before delivery.

6. Delivery :‑Ex‑godown.

7. Buyers' Textile, license No.

8. Remarks. Broker : ‑ Ful Chand Buyers Sellers, Yours faithfully, Ahmed Abdul Gani, Rahmania Trading Company. FI. Adamji, Illegible. Manager Manager For 50 bales of 40s Japan 12‑3‑51". S. S. Sirdhana carried all the ‑contracted fifty bales fram Osaka to Singapore where the goods were discharged from the afore said steamship and from Singapore only 17 out of the 50 bales were brought to Chittagong by S. S. Kilwa in May, 1951. On the 17th of May, the defendant wrote the following letter to the plaintiff :- "RAHMANIA TRADING COMPANY, General Merchants & Commission Agents, Chittagong, 17th May, 1951. M/s Ahmed Abdul Gani Khatunganj, Chittagong. Dear Sir, Re: Our purchase of 50 bales Cotton Yarn No. 40 Japan from you on 10‑3‑51 shipped per S. S Sirdhana. We shall thank you if you please let us know when are you going to give the delivery of the above. Thanking you Yours faithfully, Rahmania Trading Company, A. A. Karim, Manager". The plaintiff's reply to the above' letter is contained in its letter of the next ;late to the following effect :‑ "Messrs Rahmania Trading Company, Chittagong. 18th May, 1951. Dear Sirs, Re : Your purchase of 50 bales Cotton Yarn No. 40 Japan from us, on 10‑3‑51 shipped per S. S. Sirdhana. Ref :‑Your letter dated 17th May, 1951. With reference to the above, we beg to inform you that the said goods still unreceived by us. We shall let you know as soon as we receive it. Thanking you, Yours faithfully. For Ahmed Abdul Gani Illegible Manager".

2. On the 19th of May, 1951, however, the plaintiff issued a delivery order in favour of the defendant in respect of the 17 bales that had already arrived per S. S. Kilwa. The defendant took delivery of the above 17 bales and also paid for the same.

3. We are concerned in the present suit with the thirty‑three bales which could not be delivered on the 19th of May, 1951, when the seventeen bales were delivered and paid for. [Portion not necessary for reporting has been omitted].‑Ed.]

4. The learned Subordinate Judge held that all the fifty bales were to be delivered at one time and there was no contract between the parties either oral or in writing for delivery by instalments. He held further that under the law the defendant was not bound to take delivery of the second instalment of 33 bales of cotton yarn and the refusal of the defendant to take such delivery did not amount to any breach of contract in his part. He accordingly dismissed the plaintiff's suit with costs. Hence this appeal by the plaintiff.

5. Mr. Rafiuddin Ahmed, the learned Advocate who appears in support of the appeal, contends that after accepting a part of the goods, the buyer had no right to reject the balance. The buyer's remedy in such cases is, at the highest, a claim for damages and not avoidance of the contract.

6. Mr. Sobban, the learned Advocate for the respondent, on the other hand, contends that when the seller is not ready to deliver the full quantity of the contracted goods but offers delivery of only a part of the same, the buyer has the option either to accept the part of which offer is made for delivery and pay for the same or to reject even the part offered and treat the contract as at an end and in either case sue the seller for damages for breach of contract.

7. The learned Advocate for the appellant relies on the provisions of subsection (2) of section 13 of the Sale of Goods Acting support of his contention. Subsection (2) of section 13 of the Sale of Goods Act runs as follows :‑ "Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, or where the contract is for specific goods the property in which has passed to the buyer, the breach of any condition to be fulfilled by the seller can only be treated as a breach of warranty and not as a ground for rejecting the goods and treating the contract as repudiated, unless there is a term in the contract, express or implied, to that effect."

8. The learned Advocate's argument is, firstly, that the defendant having accepted 17 bales out of 50 bales, the breach of the condition of delivering 50 bales at a time by the seller may entitle the buyer to treat the same as a breach of warranty but does not entitle him to treat the same as a ground for rejecting the 33 bales offered and repudiate the contract. In the second place, the learned Advocate argues that the contract being not severable and for specific goods the property in the goods has already passed to the buyer and he cannot repudiate the contract and refuse to take delivery of the balance of the goods, the property in them being in him. The highest right of the buyer, under the circumstances, is to sue the seller for damages for breach of warranty. The second branch of the argument of Mr. Ahmed is founded on the misconception that the goods contracted for are specific goods the property in which has passed to the buyer. "Specific goods", according to the definition given in subsection (14) of section 2 of the Sale of Goods Act, mean "goods identified and agreed upon at the time a contract for sale is made". The description of the goods given in the sauda or agreement is "No. 40s Japan any ticket" and the quantity given is "50 bales (fifty bales) in all". The goods as described in the agreement were not identified and could not be said to be specific goods and no question of title in them having passed to the buyer arises.

9. As regards the first branch of the contention of the learned Advocate, it will be apparent from a perusal of sections 12 and 13 of the Sale of Goods Act that the latter section deals with cases where and when conditions In contracts are to be treated as mere warranties. Section 12 lays down that breach of a condi tion in a contract will give rise to a right to treat the contract as repudiated, whereas breach of warranty will only give rise to a claim for damages but not to a right to reject the goods and treat the contract as repudiated. The first subsection of section 12 lays down that the buyer may at his option either waive the condition in the contract the breach of which gives him the right to treat the contract as repudiated or he may treat such condition as a warranty and not as a ground of repudiation of the contract. It means that the buyer, even though he may treat the contract with the seller as repudiated for breach of a con dition to be fulfilled by the seller, has the option either to waive such a condition and stick to the bargain in spite of such breach or he may treat the breach of the condition as a breach of warranty and stick to the bargain with a right to claim damages A for the breach of the warranty. The first part of subsection (2; of section 13 then lays down that in certain events, viz., where the contract of sale is not severable and the buyer has accepted the goods or part thereof the breach of a condition to be fulfilled by the seller will be treated as a breach of warranty only. In other words, if the buyer accepts the goods or part thereof in spite of a breach of a condition to be fulfilled by the seller the buyer will preclude himself from repudiating the contract by hi< own conduct in accepting the goods or part thereof and can only treat the breach of condition as a breach of warranty. Both subsection (1) and the first part of subsection (2) of section 13 are, in our opinion, based on the same principle which gives the buyer the option of treating a breach of condition in a contract to be fulfilled by the seller as a breach of warranty. In the one case, he exercises his option by express words and in the other law presumes exercise of the option from his conduct. We have already dealt with the contention of the learned Advocate founded on the latter part of subsection (2) of section

13. Section 13 does not contemplate the case of a Belle, failing to tender delivery of the contracted goods. In the present case, the contract was for sale and purchase of 50 bales of Japanes cotton yarn. The contract was entered into on 10‑3‑

51. On 19‑5‑51, only 17 bales out of the contracted 50 bales arrived and was offered to the defendant. The rights and liabilities of the buyer in such events are laid down in subsection (1) of section 37 of the Sale of Goods Act, which runs as follows :‑ "Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them but if the buyer accepts the goods so delivered he shall pay for them at the contract rate ". So the options of the buyer in a case where the seller delivers a quantity less than what he contracted to sell are either to reject or to accept the same and in case he exercises the latter option, he is liable to pay for the quantity delivered to him at the contract rate. The subsection is based on the principle that tender of a lesser quantity than what was contracted for cannot be referred to the original contract which must be deemed to have been repudiated so that the buyer may reject the less C quantity tendered but the tender of the less quantity by the seller may be treated as amounting to a new offer capable of being accepted by the buyer and if the buyer accepts such tender, he must pay for the same. It follows that when the part which was not tendered previously is tendered afterwards it cannot be referred back to any subsisting contract between the buyer and the seller. In the present case, 17 bales offered by the plaintiff on the 19‑5‑51 was accepted by the buyer and he took delivery of the same and no complaint is made that he did not pay for it. The balance of 33 bales was not tendered till 18‑7‑

51. It is not contended by the plaintiff that there was any agreement either express or implied for delivery of the goods by instalments. Subsection (1) of section 38 of the Sale of Goods Act lays down that "unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments". Reading subsection (1) of section 37 and subsection (1) of section 38 together, we are clearly of opinion that the defendant can not be made liable for not accepting the 33 bales tendered by the seller on 18‑7‑

51. In view of the provision of sub section (1) of section 38 of the Sale of Goods Act, it cannot be contended that the defendant is bound to accept the goods h( contracted to buy by instalments and in view of the provisions of subsection (1) of section 37 of the said Act, the buyer's liability is only to pay for the part of the goods he chooses to accept and no further. The acceptance of the plaintiff's contention that the t: buyer was bound to accept the second instalment of 33 bales, when offered on 18‑7‑51, would make the provisions of law laic down in sections 37 (1) and 38 (1) of the Sale of Goods Act nugatory. The provisions of subsection (2) of section 13 of the Sale of Goods Act might be attracted if the seller tenders all the contracted goods and the buyer chooses to accept a part only. But we are clearly of the view that where the seller tenders only a part of the goods contracted to be sold, section 13 (2) of that Sale of Goods Act has no application. The relevant provision of law in such a case is to be found in sections 37 (1) and 38 (1) of the said Act. Mr. Sobhan, the learned Advocate in support of his contention, also relies on the decision in the case of Harnarain Ramchandra Jaisival v. Firm Radhakisan Narayan das (A I R 1949 Nag. 178). The following observations of their Lordships Grille, C. J., and Hidayatulla, J., lend support to the contention made by Mr. Sobhan :‑ "It would appear that the purchaser can, after receiving part of the goods, still have the right to reject the goods if he finds that the total quantity of goods is less than what the seller contracted to sell. He cannot insist on a partial delivery but if he has received only a part of the goods he will be res ponsible for the price of the part delivered to hire. In this case the buyer has not called for a smaller quantity but only a smaller quantity was delivered to him, for, the tender of the rest was no tender at all and was not of the quantity warranted. In this sense the provisions of section 37 (1) seem to supplement the provisions of section 59 (l) of the Act. A breach of warranty in the matter of quantity may entitle the buyer to reject the goods outright or at any time even after receipt of some of the goods. He is not entitled to call for a partial delivery but is not bound to return that which he has received".

10. We may also profitably refer in this connection to the case of Rehrend & Company, Limited v. Produce Brokers Company, Ltd. ((1920) 3 K B D 530). In that case, the contract was for sale of cotton seeds to be shipped at Alexandaria and delivered in London to the buyers. On arrival of the ship at London, portion of the seeds was delivered when the ship left for Hull to discharge her cargo for Hull. Fourteen days later, the ship returned to London and tendered the balance of the seeds to the buyer which they refused to accept. The question was if the buyer was entitled to so refuse to accept delivery of the tendered cotton seeds. The matter was referred to arbitration and the umpire held in favour of the buyer's contentions. The Court was asked to say whether the umpire was right. Bailache, J held as follows :‑ "In the absence of any stipulation to the contrary, the buyer, being ready with his craft, is entitled to delivery of the whole of an indivisible parcel of goods sold to him for delivery from a vessel which has begun delivery to him before she leaves the port to deliver goods elsewhere. If this is so, the rest of the case is covered by section 30 of the Sale of Goods Act, and the buyer can either reject the whole of the goods, including those actually delivered, in which case he can recover the whole of his money, or he may keep the goods actually delivered and reject the rest, in which case he must pay for the goods kept at the contract price, and he can recover the price paid for the undelivered portion". Section 37 in our Sale of Goods Act is a reproduction of section 30 of the English Act. We, accordingly, hold that the learned Subordinate Judge was right in the view he took of the rights and liabilities of the parties. The defendant was not bound to take delivery of the 33 bales in the second instalment and he was not liable for any breach of contract to entitle the plaintiff to recover damages.

11. The result, therefore, is that this appeal is dismissed with costs. AMIN AHMED, C. J.‑I agree. A. M. C. Appeal dismissed.