GROUP – C2

BEFORE

THE COURT OF CIVIL JUDGE JUNIOR DIVISION, AMRITSAR

IN THE MATTER OF

AMIT KHETARPAL ………………………….… PLAINTIFF

V.

VIJAYPAL …………………..………………….… DEFENDANT

CIVIL SUIT NO.127 OF 2017

MEMORIAL ON BEHALF OF THE DEFENDANT

ARMAAN MATHAROO

131/13

B.Com.LL.B.(Hons.) 9th Semester

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 TABLE OF CONTENTS

List of Abbreviations .……………………………………………………………………3

Index of Authorities ………………………………………………………………………4

Statement of Jurisdiction: .………………………………………………………….…….6

Statement of Facts: ……………………………………………………………………….7

Issues Raised: …………………………………………………………………………….8

Summary of Arguments: ………………………………………………………………….9

Arguments Advanced ……………………………………………………………………10

PRAYER …………………………………………………………………………………21

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 LIST OF ABBREVIATIONS

Anr. Another

Art. Article

AIR All India Reporter

Ed. Edition

Govt. Government

H.C. High Court

Hon’ble Honourable

i.e. Id est (that means)

ICA The Indian Contract Act, 1872

L.J. Law Journal

No. Number

Ors. Others

Pb. Publication

S.C. Supreme Court

SCC Supreme Court Cases

SCR Supreme Court Reporter

Sec. Section

SOGA The Sales Of Goods Act,1930

Ss. Sub-Section

v. Versus

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Vol. Volume

www. World Wide Web

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 INDEX OF AUTHORITIES
Books:

1. Pollock and Mulla, Indian Sale of Goods Act, Second Edition.

Legal Websites:

1. http://www.supremecourtofindia.nic.in

2. http://www.indiankanoon.org

3. http://www.manupatra.com

4. http://www.advocatekhoj.org

5. www.legalcrystal.com

6. Law Finder

Statues and Rules:

1. The Code of Civil Procedure, 1908

2. The Sales of Goods Act, 1930
3. The Indian Contract Act, 1872

Indian Cases:

S.NO CASE NAME CITATION PAGE NO.

1 Endupuni Narsimhan v. Mahadevram AIR 1974, Ori 98 14

2 Mysore Sugar Co. Ltd. v. Manohar Metal AIR 1982, Kant 283 14
Industries.

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3 R.N. Ramalingam Chettiar v. Parasuram AIR 1963, Kerala 13
Parumal & Co. 13

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 STATEMENT OF JURISDICTION
The Defendant, most courteously and respectfully, submits that this Hon’ble Court has the
requisite territorial and subject matter jurisdiction to entertain and adjudicate this matter under
Section 91, 152 and 203 of The Code of Civil Procedure, 1908. It is further submitted that all
procedural requirements have been adhered to in the prescribed manner.

1 9.Courts to try all civil suits unless barred.-

The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of
which their cognizance is either expressly or impliedly barred.
2 15. Court in which suits to be instituted.- Every suit shall be instituted in the Court of the lowest grade competent to try it.
3 20. Other suits to be instituted where defendants reside or cause of action arises.- Subject to the limitations aforesaid, every suit

shall be instituted in a Court within the local limits of whose jurisdiction— (a) the defendant, or each of the defendants where
there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or
personally works for gain.

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 STATEMENT OF FACTS

DATE EVENT DETAILS

11th December, Contract Signed Plaintiff and Defendant signed a Written agreement for
2016 the sale of 525 sealed wheat flour bags of one quintal
each, supplied in two equal instalments @ Rs. 500/bag.

26th December, Novation of the New Agreement to sell 350 quintals of wheat flour @ Rs.
2016 Contract 490/ quintal with a condition that supply will be in 5
equal instalments and agreed 250 quintals will be from
open wheat flour stored in mill and rest 100 quintals will
be supplied from Plaintiff’s brother Mohan’s shop.

30th December, First delivery of After personally checking the quality of the flour and its
2016 70 Quintals Lot packaging, Defendant paid Rs. 34,300/- for the supply of
the product.

7th February, No notice of Defendant went to Plaintiff’s shop to rescind the contract
2017 rescinding of and express his inability to take further deliveries.
contract given to However, when he went there he found that plaintiff was
Plaintiff not present at the shop whereas he expressed his intention
to Mohan, plaintiff’s brother, who was at plaintiff’s shop
at that time.

17th February, Notice of Re- Notice of Re-sale of 180 quintals was given to the
2017 sale not given by defendant by Mohan, via telephonic conversation. The
Plaintiff notice was however not given by the plaintiff to
defendant, who was the parties to contract.

Re-sale of wheat Re-sale of remaining 180 quintals of wheat flour was

by Mohan at a made by Mohan to one of his business dealers- M/s
price less than Harish And Sons @ Rs. 470/quintal while the market
market price price was Rs. 475/quintal.

20th August, Suit filed Plaintiff approached the Learned Civil Court for
2017 claiming of damages and compensation for losses
incurred on resale, from the defendant.

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 STATEMENT OF ISSUES

1:

WHETHER OR NOT THE DEFENDANT BE MADE LIABLE FOR LOSSES AND

DAMAGES ARISING OUT OF RESALE OF 180 QUINTALS OF WHEAT UNDER
SECTION 54(2) OF THE SALE OF GOODS ACT, 1930?

2:

WHETHER OR NOT THE DEFENDANT BE MADE LIABLE FOR THE PAYMENT

PRICE OF 100 QUINTALS OF WHEAT UNDER SECTION 55 OF THE SALE OF
GOODS ACT, 1930?

3:

WHETHER THE DEFENDANT BE MADE LIABLE FOR DAMAGES INCURRING OUT

OF THE BREACH OF CONTRACT UNDER SECTION 73 OF THE INDIAN CONTRACT
ACT, 1872?

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 SUMMARY OF ARGUMENTS
1. Whether or not the defendant be made liable for losses and damages arising out of resale
of 180 quintals of wheat under Section 54(2) of The Sale of Goods Act, 1930?

The defendant cannot be held liable for losses and damages arising out of resale u/s 54(2)
of The Sale of Goods Act, 1930 because of the following:

 The goods did not pass from seller to buyer and thus were not ascertained.

 The goods were of semi-perishable nature.

2. Whether or not the defendant be made liable for the payment price of 100 quintals of
wheat under Section 55 of The Sale of Goods Act, 1930?

The defendant cannot be held liable for the suit for price of 100 quintals of wheat u/s 55
of the Sale of Goods Act, 1930 because of the following:

 No property in goods has been passed to the buyer.

 No future date of payment was fixed and certain, so, this section is not
maintainable.

3. Whether the defendant be made liable for damages incurring out of the breach of
contract under Section 73 of the Indian Contract Act, 1872?

The defendant cannot be held liable under section 73 of The Indian Contract Act, 1872
because of the following:

 The contract is silent in case breach occurs and about the damages for such
breach.

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 The parties to the contract were the Amit Khetarpal (plaintiff) and Vijaypal
(defendant).

 But the resale was done by Mohan who was not a party to the contract.

 Mohan resold the wheat to his business dealer- M/s Harish and Sons at a price
lower than market price, for his personal benefits.

 The loss did not arose naturally in the usual course of things.

 There was no likelihood of suffering of loss in case of breach of contract, at the

time of making of contract.

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 ARGUMENTS ADVANCED

 Whether or not the defendant be made liable for losses and damages arising out of
resale of 180 quintals of wheat under Section 54(2) of The Sale of Goods Act, 1930?

It is most humbly stated that the defendant cannot be held liable for losses and damages
arising out of the resale of 180 quintals of wheat under Section54(2) of the Sale of Goods
Act, 1930.

Section 54 of The Sale of Goods Act, 1930 states:

Sale not generally rescinded by lien or stoppage in transit.—

(1) Subject to the provisions of this section, a contract of sale is not rescinded by the mere
exercise by an unpaid seller of his right of lien or stoppage in transit.

(2) Where the goods are of a perishable nature, or where the unpaid seller who has
exercised his right of lien or stoppage in transit gives notice to the buyer of his intention to
re-sell, the unpaid seller may, if the buyer does not within a reasonable time pay or tender
the price, re-sell the goods within a reasonable time and recover from the original buyer
damages for any loss occasioned by his breach of contract, but the buyer shall not be
entitled to any profit which may occur on the re-sale. If such notice is not given, the unpaid
seller shall not be entitled to recover such damages and the buyer shall be entitled to the
profit, if any, on the re-sale.

(3) Where an unpaid seller who has exercised his right of lien or stoppage in transit re-sells
the goods, the buyer acquires a good title thereto as against the original buyer,
notwithstanding that no notice of the re-sale has been given to the original buyer.

(4) Where the seller expressly reserves a right of re-sale in case the buyer should make
default, and, on the buyer making default, re-sells the goods, the original contract of sale is
thereby rescinded, but without prejudice to any claim which the seller may have for
damages.

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 According to Section 54(1), where a seller has exercised his right of lien or stoppage in
transit the contract of sale is not thereby set aside by the exercise of these rights.

But sub-section (2) of Section 54 lays down that where a seller has exercised the right of
lien or stoppage in transit or where the goods are of a perishable nature, the seller can re-sell
them by giving the buyer a notice of his intention to resell the goods and if the buyer does
not, within a reasonable time, tender the price thereof. If the resale results in a loss the buyer
shall have to make good the loss to the seller. But if it yields a profit the seller need not
return the same to the buyer.

Furthermore, it is contended that the goods were not passed from seller to buyer. And it is a
general principle that until and unless the goods are not passed, they are not ascertained. The
question whether a seller of goods has the right of re- sale is important, for where he has
such a right he is entitled to claim as damages the difference between the contract price and
the amount realised on the re-sale, less the costs of the re-sale while if he has no such rights
he is entitled to the difference between the contract price and the market price on the date of
the breach. Now the power to re-sell may be either statutory or it may be conferred on the
seller by the terms of the contract of sale; in the former case it can be exercised only if the
property in the goods had passed to the buyer, as is implied by the words of this section, in
the latter case it can be exercised even if the property in the goods has not passed to the
buyer. 4

Thus, if it is provided in a contract of 'indent' that on default on the part of the buyer to pay
for and take delivery of the goods within a specified time, the seller should be at liberty to
re-sell the goods, and that the buyer should pay all the loss arising on the contract with
interest, the seller is entitled to re-sell the goods on default on the part of the buyer even if
the property in the goods has not passed to the buyer, and to sue the buyer for the loss on re-
sale, but it is necessary to the exercise of this power that the goods contracted for should at
least have been appropriated for the purposes of the contract. If there has been no such
appropriation, there is nothing to which the power of re-sale under the contract could attach,

4 R.N. Ramalingam Chettiar v. Parasuram Parumal & Co. , AIR 1963 Kerala 13.

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 and the seller is not entitled in such a "case to the loss on re-sale, but to the difference
between the contract price and the market price at the date of the breach.

The terms of the contract in this case had not conferred on the respondent the right of re-
sale so that the question is whether he had a statutory right of re-sale. This right would be
available only if property in the goods had passed to the buyer. Section 23 of the Sale of
Goods Act provides :

"23(1) Where there is a contract for the sale of the not ascertained or further goods by
description and goods of that description and in a deliverable state are unconditionally
appropriated to the contract, either by the seller with the assent of the buyer or by the
buyer with the assent of the seller, the property in the goods thereupon passes to the
buyer. Such assent may be express or implied, and may be given either before or after the
appropriation is made.

(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a
carrier or other bailee (whether named by the buyer or not) for the purpose of
transmission to the buyer, and does not reserve the right of disposal, he is deemed to have
unconditionally appropriated the goods to the contract.

Relevant case laws:

1. Endupuni Narsimhan v Mahadevram5, it was held that the right of resale and the rights
which arise under this section after resale are available only when the property in goods
has passed to the buyer and not when, the goods being still not ascertained, no property
has passed to the buyer and the seller is reselling his own goods.

5
AIR 1974 Ori 98.

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 2. Mysore Sugar Co Ltd v Manohar Metal Industries6, it was held that where the seller
does not offer the evidence of the difference between the contract price and resale price
on the date of breach, he is not entitled to any compensation.

6
AIR 1982 Kant 283.

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 PRAYER

WHEREFORE IN THE LIGHT OF ISSUES RAISED, ARGUMENT ADVANCED,

REASONS GIVEN AND AUTHORITIES CITED, THE HON’BLE COURT MAY BE
PLEASED TO DISMISS THE SUIT WITH COST (TOGETHER WITH
COMPENSATION) TO DEFENDANT ITSELF.

AND ANY OTHER RELIEF THAT THIS HON’BLE COURT MAY BE PLEASED TO
GRANT IN THE INTEREST OF JUSTICE, EQUITY AND GOOD CONSCIENCE.

-Sd

Counsel on Behalf of Defendant

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