2. SALE OF GOODS ACT, 1930
It is a contract by which the ownership of movable goods is
transferred from the seller to the buyer. The term ‘contract of
sale’ is defined in Section 4(1) of the Sale of Goods Act as:
“A contract of sale of goods is a contract whereby the seller
transfers or agrees to transfer the property in goods to the
buyer for a price”
3. RAVINDER RAJ (THE PETITIONER)
V/S
MARUTI UDYOG LIMITED (RESPONDENT NO. 1)
&
M/S COMPETENT MOTORS CO. PVT. LTD. (RESPONDENT NO.2)
CASE NO. 1
4. When & What
1985 – 1986
The Petitioner, Mr. Ravinder Raj books a Cream Colour Maruti 800 Car by Paying Rs.10000/-
July 15, 1988
Respondent 2 informs the Petitioner that his Maruti Car Allotment has Matured for Delivery
Feb 16, 1989
The Petitioner pays a sum of Rs.78351.05 towards the total cost of the Car.
March 01, 1989
There is an increase in the excise duty payable, causing a price hike of Rs.6710.61.
March 18, 1989
Ravinder Raj received a letter from Respondent 2 to deposit the excess amount payable.
April 05, 1989
The Petitioner under protest pays the excess amount.
5. Thereafter
The Petitioner applies to the District Consumer Forum
Judgement - The request is rejected
The Petitioner then applies to the State Forum
Judgement - The State Forum accepts the Petitioner's Claim
The Respondents then go before the National Commission
Judgement - The Nation Forum reverses the State Forum's Order
The Petitioner finally goes to the Supreme Court by way of Special Leave Petition.
Here
According to the Petitioner
# He was not responsible in any way for the delay in delivery of the Vehicle.
# He should not be made to bear the increase in Price.
According to the Respondents and their Learned Counsel
# Amount Paid was subject to the Price Prevailing on the Date of Invoice.
# Delay in delivery was because of the Colour of Vehicle which the Petitioner had
requested
# No evidence of any deliberate intention on part of the Respondents to delay delivery.
6. Sale of Goods Act, 1930
According to Section 64 of the Sale Goods Act, 1930,
The burden of any increase in the price by way of additional taxes would
have to be borne by the Customer and not by the Manufacturer.
According to Section 46A (1) (b) of the Sale of Goods Act, 1930
It is the liability of the Petitioner to pay the extra price when the excise duty
had been enhanced prior to the delivery of the Vehicle.
9. THE CASE & PARTIES INVOLVED
M/S JCL INTERNATIONAL LTD. BHARAT PETROLEUM
CORPORATION LTD.
10. • Petitioner: M/s JCL International Ltd.
– JCL provides solutions for supply & distribution of LPG
as domestic, industrial and automotive fuel. They
carry out LPG bottling for Shell, Bharat Petroleum and
Hindustan Petroleum Corporation.
• Respondent: Bharat Petroleum Corporation Ltd.
– Bharat Petroleum Corporation Limited (BPCL) is one
of the largest public sector, oil marketing company in
India.
ABOUT PETITIONER &RESPONDENT
JCL’s CLAIM: To Consider Provisional Price as Final Price
11. JCL entered into a contract
with BPCL for supply of LPG
Cylinders at Rs 679.67
BPCL issued amendment to the
Purchase Order which was
signed by both parties fixing the
price of cylinder at Rs. 702.98.
Cylinders delivered to BPCL and
contract ends.
Both the parties enter into a
fresh contract for supply of
cylinders during the financial
year 2000-2001 at Rs 702.98
BPCL communicates the
revised price of the cylinder
supplied during the previous
year, from Rs. 702.98 to the
provisional price of Rs. 645
May 1999
July 1999
March 2000
October 2000
SEQUENCE OF EVENTS
12. BPCL alleged to have
unlawfully, arbitrarily
retained/deducted about
Rs. 28.69 lakhs from the
amount payable
Petitioner asks to appoint an
Arbitrator under ‘Arbitration
Clause’
Arbitrator was appointed,
conducts the arbitration,
and due to transfer– and a
new Arbitrator is appointed
Arbitrator dismisses the claim
of the Petitioner (JCL)
Oct 2000
June 2001
August 2001 - 2006
Oct 2006
SEQUENCE OF EVENTS
13. Petitioner challenges the
decision,
Petition allowed and new
Arbitrator appointed
The Judgement –
‘A Letter dated 30th July by Respondent
clearly mentioned to the Petitioner that the
price of cylinder was provisional and will be
revised on the basis of the pricing set by
MOP & NG’ – contents of this letter are not
in dispute and are crucial to the case
Oct 2006
Sept 2009
SEQUENCE OF EVENTS
14. • Section 9 of the 1930 Act allows the parties not to fix the price
at the time of the transfer and to leave the determination of
the amount of consideration to a later date
• Also re-fixing or revising of price was done with due notice
and/or in breach of terms and condition of the contract
and/or statutory provision
• Thus, considering the provisions of Sale of Goods Act and the
Contract Act, the fixation of provisional price cannot be stated
to be impermissible and creates no rights in favour of JCL’s
claims
THE JUDGEMENT
15. Section 9 of Sales of Goods Act
(1) The price in a contract of sale may be fixed by the contract or
may be left to be fixed in manner thereby agreed or may be
determined by the course of dealing between the parties.
(2) Where the price is not determined in accordance with the
foregoing provisions, the buyer shall pay the seller a
reasonable price. What is a reasonable price is a question of
fact dependent on the circumstances of each particular case.
17. AMMIREDDY OILS LTD. ORIENTAL INSURANCE
Vs.
CASE NO. 3
ACTS CITE:
Sale of Goods Act 1930,
Sec.4(3)(4),Sec.6(1)(2),Sec.14(3),Sec.20,21,22
18. AMMIREDDY OILS LTD. Vs. ORIENTAL INSURANCE
Insures stock under fire policy
C with under spontaneous
combustion clause.
APPELLANT / COMPLAINANT
Engaged in the manufacturing rice-bran oil &
de-oiled bran
APPELLEE / DEFENDANT
Engaged in the provision of insurance
services
20.08.1991
Enters into a agreement to sell
1000M.T to Alfred Toepfer
India, broker for M/s. Alfred C.
Toepfer International Gmbh in
Hamburg
The defendant after an
insurance survey settled the
claim for INR 2L for the loss of
350M.T of de-oiled bran
Due to a fire accident
appellant claims loss of
685.39MT amounting to INR
14.80L
05.09.1991
21.12.1991
21.12.1991
Dissatisfied
by the settlement, the
appellant invoked Clause 13 of
the conditions of the policy
and seeked arbitration.
04.12.1992
Oriental Insurance company
contested the matter by
claiming that the material had
already been sold and also
presented other facts.
19. AMMIREDDY OILS LTD. Vs. ORIENTAL INSURANCE
APPELLEE / DEFENDANT’S ARGUMENT
As the DOB stock was already sold to M/s Alfred Toepfer(India) Ltd. the
appellant was no longer the owner of the goods.
The appellee also claimed that 25% of stock has lost its value through
pre-sponteneous ignition.
Furthermore, the surveyors report claimed negligence by the appellant.
• Stock was mismanaged due to which the Appellee could not quantify the loss.
• The fire took place due to dumping of stocks in one corner of the warehouse
wall-to-wall and choking the ventilation grills also.
• It was also ascertained that 219 M.T of DOB was lost in cyclone in May 1991.
KEY FACTS
• There was a term in the agreement that if the seller fails to deliver the entire quantity
contracted and/or fails to deliver the quality rejected at the port of loading, the seller was
supposed to pay to the buyer dead freight at ruling contract rate and default price of sailing
of the vessel for the quantity not delivered.
• Around 1000MT of DOB was to be produced and delivered. But only 685.39MT was produced
and were not of the right quality.
• The shipment date ascertained was 25/11/91 (at buyers option) and the fire accident date
was 21/12/91.
20. AMMIREDDY OILS LTD. Vs. ORIENTAL INSURANCE
COURT VERDICT
• There was no dispute that the stock was in the possession
of the appellant and the question of payment by the
buyer does not arise.
• The policy might indicate fire only. But if it provides cover
for loss and damage to the property insured “caused by
own fermentation, natural heating and spontaneous
combustion” the insurance company cannot claim that
the loss was not covered.
• The court ruled that a total of 466.39 M.T of
DOB @ Rs.780/- per M.T should be paid by
the insurance company as 219 M.T is lost in
cyclone and not covered under the Fire
Policy ‘C’.
• Also the appellant was entitled to interest of
9%p.a w.e.f 1993.
22. C.N. Anantharam Vs Fiat India Ltd.
In October, 2002, Mr. C.N. Ananatharam purchased a Fiat Siena
Weekender vehicle form Sundaram Automobiles, Bangalore
According to Mr. Anantharam immediately after registration of the
vehicle, he was taken the car for the drive, when certain defects
particularly in the engine began to manifest.
DISPUTE
VERDICT
C.N.Anantharam was not satisfied with the performance of the vehicle
and accordingly, insisted that the vehicle be replaced with a new vehicle
or the amount paid by him as sale price be refunded.
Mr. C.N. Anantharam filed complaint before the IVth Additional District
Consumer Disputes Redressal Forum, Bangalore Urban, on 17 April,
2003.
The forum directed dealer to refund the amount as claimed by Mr. C.N
Anantharam.
23. • Aggrieved by the said order Fiat India Ltd & Fiat Sundaram Automobiles
(Respondents 1 and 2 ) filed appealed in Karnataka State Consumer
Disputes Redressal Commission, Bangalore. On 15th June, 2006.
VERDICT
• Karnataka State Consumer Disputes Redressal Commission, Bangalore -
Forum directed Respondents 1 and 2 to replace the vehicle or refund the
amount
C.N. Anantharam Vs Fiat India Ltd.
• Still unsatisfied the matter was further taken to the National Consumer
Disputes Redressal Commission, New Delhi.
VERDICT
• The National Consumer Disputes Redressal Commission, New Delhi directed
the dealer and the manufacturer are directed to remove the defect.
• If necessary by reconditioning the vehicle and deliver it to the complainant in
the presence of an independent technical expert.
• The expert shall certify that the vehicle is free from any defect which shall be
final for all purposes.
• All this should be done within a period of three months.
24. Arguments raised by petitioner and respondent
1) Petitioner – Raise an argument on the very first day that the vechile has an
inherited defect which could not be removed. Hence he wanted the enitre
amount refunded along with the interest.
2) Respondent - The vehicle had been duly certified to be completely roadworthy
and it was the Petitioner who was at fault for not having taken delivery of the
same, despite the same being ready.
C.N. Anantharam Vs Fiat India Ltd.
Unsatisfied with the decision, Mr. C.N Ananthram filed a ‘Special Leave
Petitions’ challenging the order of the National Commission on the
following grounds:
Whether it can be said that the manufacturing defect of the
vehicle was such that it warranted replacement, and whether the
refund of justified?; and
Whether both the dealer and the manufacturer are jointly and
severally liable in regard to deficiency of service?
25. C.N. Anantharam Vs Fiat India Ltd
Court direct that if the independent
technical expert is of the opinion that
there are inherent manufacturing defects
in the vehicle, the petitioner will be
entitled to refund of the price of the
vehicle and the lifetime tax and EMI along
with interest @ 12% per annum and
costs, as directed by the State
Commission.
COURT VERDICT
