Case: P.S.N.S. Ambalavana Chettiar And Co. Ltd And Anr Vs. Express Newspapers Ltd., Bombay

in the goods has passed to the buyer subject to the lien of the unpaid seller. Where the property in the goods has not passed to the buyer the seller has no right of resale under S 54 (2). The question is whether the property in the 300 tons of newsprint in sheets had passed to the appellants before the resale. 8. On November 13, 1951, the respondent agreed to sell to the appellants the stock of 415 tons of newsprint in sheets then lying in the respondents godown in Madras. There was an unconditional contract for the sale of specific goods in a deliverable state and the property in the goods then passed to the appellants. But on November 26, 1951, the contract was varied in a material particular. The parties agreed that the appellants would buy only .300 tons of the stock of 415 tons of newsprint then lying in the respondents godown. The result was that in place of the original contract for sale of specific goods a contract for sale of unascertained goods was substituted. 9. Rajagopala Ayyangar, J. held that the effect of the variation of the contract on November 26, 1951 was that the appellant and the respondent became joint owners of the stock of 415 tons. In our opinions this was not the correct legal position. The parties did not intend that the appellants would buy an undivided share in 415 tons of newsprint On November 26, 1951, the bargain between the parties was that appellants would buy and the respondent would sell 300 tons out of the larger stock of 415 tons. 10. The appellate Court held that the property in the entire 415 tons passed to the appellants who were subsequently relieved from, their liability to take 115 tons and that the respondent could resale any 300 tons out of the larger stock of 415 tons. We are unable to accept this line of reasoning. It is true that originally the property in the en tire 415 tons had passed to the appellants. But the result of the variation of the contract was to annul the passing of property in the goods. The effect of the bargain on November 26, 1951 was that the respondent would sell and deliver to the appellants any 300 tons out of the larger stock of 415 tons. As from November 26, 1951, the property in the entire stock of 415 tons belonged to the respondent. The parties did not intend that as from November 26, 1951 the property in any individual portion of the stock of 415 tons would remain vested in the appellants. 11. Section 18 of the Sale of Goods Act provides that where there is a contract for the sale of unascertained goods no property in the goods is transferred to the buyer unless and until the goods are ascertained. It is a condition precedent to the passing of property under a contract of sale that the goods are ascertained. The condition is not fulfilled where there is a contract for sale of a portion of a specified larger stock. Till the portion is identified and appropriated to the contract, no property passes to the buyer. In Gillett v. Hill, (1834) 2 Cr and M 530 (535): 149 ER 871 (873) Bayley, B said :"Where there is a bargain for a certain quantity ex a greater quantity, and there is a power of selection in the vendor to deliver which he thinks fit, then the right to them does not pass to the vendee until the vendor has made his selection, and trover is not maintainable before that is done. If I agree to deliver a certain quantity of oil as ten out of eighteen tons, no one can say which part of the whole quantity I have agreed to deliver until a selection is made. There is no individuality until it has been divided." 12. No portion of 415 tons of the newsprint lying in the respondents godown was appropriated to the contract by the respondent with the appellants consent before the resale. On the date of the resale, property in the goods had not passed to the buyer. Consequently, the respondent had no right to resell the goods under S. 54 (2). The claim to recover the deficiency on resale is not sustainable. 13. The respondent is entitled to claim as damages the differences, between the contract price and the market price on the date of tint breach. Where no time is fixed under the contract of sale for acceptance of the goods, the measure of damages is prima facie the difference between the contract price and the market price on the date of the refusal by the buyer to accept the goods, see Illustration (c) to S. 73 of the Indian Contract Act.In the present case, no time was fixed in the contract for acceptance of the goods. On March 29, 1952, the appellant refused to accept the goods. The respondent is entitled to the difference between the contract price and the market price on March 29, 1952. Counsel for both parties requested us that instead of remanding the matter we should assess the damages on this basis and finally dispose of the matter. We have gone through the materials on the record and with the assistance of counsel, we assess the market price of the Russian newsprint in sheets on March 29, 1952 at 8 annas per lb. Counsel on both sides agreed to this assessment. The claim of the respondent for Rs. 6,798-5-1 on account of interest and Rs. 1,119-6-0 for insurance charges is admitted before us by Mr. Gupte, on this basis the final position is as follows :Price of 122824 Lbs. at 9 1/2 anna par lb. less Rs 63.032 15.9Rs.9.596-14-8 Difference 547051 Lbs. at 1 1/2 anna per lb.Rs.51,286-0-6 InterestRs. 6,795-5-1 Insurance chargesRs. 1,119-6-0 Total amount due to the respondentRs. 68.797-9-10 Deduct amount due to the appellantsRs. 57,816-18-2 Balance due to the respondentRs 10,980-12-8

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]5. The two Courts concurrently found that (1) appellant No. 2 was a party to the contract of purchase of 415 tons of newsprint in sheets, (2) on November 26, 1951 the parties orally agreed that instead of 415 tons the appellants would buy 300 tons of the newsprint and (3) there was no cancellation of the contract as alleged by the appellants. These findings are not challenged. The two Courts concurrently found that the resale held on April 21, 1952 was genuine and was effected at a proper price on due notice and after proper advertisement. Mr. Gupte attempted to challenge these findings, but we see no reason to interfere with themWe are inclined to accept this argument6. It is to be noticed that the contract did not envisage any loan of money by the respondent to the appellants on the security of the newsprint in sheets. The payment of Rs. 3,18,706-9-10 was made by the respondent towards part discharge of its liability for the price of the newsprint in reels10. The appellate Court held that the property in the entire 415 tons passed to the appellants who were subsequently relieved from, their liability to take 115 tons and that the respondent could resale any 300 tons out of the larger stock of 415 tons. We are unable to accept this line of reasoning. It is true that originally the property in the en tire 415 tons had passed to the appellants. But the result of the variation of the contract was to annul the passing of property in the goods. The effect of the bargain on November 26, 1951 was that the respondent would sell and deliver to the appellants any 300 tons out of the larger stock of 415 tons. As from November 26, 1951, the property in the entire stock of 415 tons belonged to the respondent. The parties did not intend that as from November 26, 1951 the property in any individual portion of the stock of 415 tons would remain vested in the appellants12. No portion of 415 tons of the newsprint lying in the respondents godown was appropriated to the contract by the respondent with the appellants consent before the resale. On the date of the resale, property in the goods had not passed to the buyer. Consequently, the respondent had no right to resell the goods under S. 54 (2). The claim to recover the deficiency on resale is not sustainable13. The respondent is entitled to claim as damages the differences, between the contract price and the market price on the date of tint breach. Where no time is fixed under the contract of sale for acceptance of the goods, the measure of damages is prima facie the difference between the contract price and the market price on the date of the refusal by the buyer to accept the goods, see Illustration (c) to S. 73 of the Indian Contract Act.In the present case, no time was fixed in the contract for acceptance of the goods. On March 29, 1952, the appellant refused to accept the goods. The respondent is entitled to the difference between the contract price and the market price on March 29, 1952. Counsel for both parties requested us that instead of remanding the matter we should assess the damages on this basis and finally dispose of the matter. We have gone through the materials on the record and with the assistance of counsel, we assess the market price of the Russian newsprint in sheets on March 29, 1952 at 8 annas per lb. Counsel on both sides agreed to this assessment. The claim of the respondent for Rs. 6,798-5-1 on account of interest and Rs. 1,119-6-0 for insurance charges is admitted before us by Mr. Gupte, on this basis the final position is as follows :Price of 122824 Lbs. at 9 1/2 anna par lb. less Rs 63.032 15.9Rs.9.596-14-8Difference 547051 Lbs. at 1 1/2 anna per lb.Rs.51,286-0-6Insurance chargesRs. 1,119-6-0Total amount due to the respondentRs. 68.797-9-10Deduct amount due to the appellantsRs. 57,816-18-2