Commercial Automobiles v. Shri Maharaj Singh Bhatia
2011-09-29
A.K.SHRIVASTAVA
body2011
DigiLaw.ai
JUDGMENT : The unsuccessful first and second defendants have taken shelter of this Court by taking the aid of Section 100 CPC and thus have assailed the judgment and decree passed by learned two Courts below decreeing the suit of the plaintiff-respondent No.1 against them. 2. A suit for realization of Rs. 18,004.43 paise has been filed by the plaintiff -respondent No.1 who is a Transport Operator and is carrying on his business in the name and style M/s Indersons and Company, at Gopal Bagh, Jabalpur, arraying appellants as defendants No.1 and 2 respectively and Second respondent as defendant No.3. According to the plaintiff, first defendant is the authorized dealer of third defendant and second defendant is authorized Body Builders of Tata Diesel Vehicles. Third defendant is manufacturer of Trucks called Tata Diesel Vehicles of different sizes and appointed first defendant as its authorized dealer to sell the vehicles manufactured by it. The second defendant is also the authorized by the manufacturer (Third defendant) to build the body of the trucks on chassis. The plaintiff was desirous to purchase five Tata Diesel Vehicles Model 1210-S.E./36-143 (in short "Model-36") as per the specification of the third defendant and he asked first defendant to give quotation in that regard to Punjab and Sindh Bank, Jabalpur Branch. Accordingly, said defendant sent its quotation dated 09.03.1983 for Rs. 2,65,000/- for each such vehicle to the said Bank. According to the quotation, the first defendant was asked to supply the said five vehicles Model-36 as per the standard specification of third defendant. 3. It is the further case of the plaintiff-respondent No.1 that first defendant was not having five vehicles in stock of the desired Model i.e. Model-36, hence, first defendant impressed upon the plaintiff to purchase two vehicles of Model 1210- S.E./421-63(in short "Model-42") which was not as per the order of the plaintiff. It has also been pleaded in para 6 of the plaint that plaintiff specifically told first defendant that vehicles are desired by him to be converted and used as 'Tippers' and also told that he can rely upon the special skill and knowledge of the first defendant in case the body is made by them to be used as Tippers after consulting the manufacturer-third defendant.
On this, the first defendant told and advised the plaintiff that second defendant is also an authorized Body Builder and has been approved by the third defendant. The plaintiff hence, accepted the representation of the first defendant and agreed to purchase two vehicles of Model-42 instead of Model-36 and requested first defendant to build up the desired body on the said chassis. According to the plaintiff, he never suspected any foul play and relied on the representation, skill and special knowledge of first defendant as the dealer and second defendant as the authorized Body Builder of the defendant No.3. 4. In para 9 of the plaint it has been pleaded by the plaintiff that all the vehicles purchased are covered under the warranty issued by first defendant on behalf of third defendant and the trucks bodies on all the vehicles were made and fitted by second defendant. In the month of February, 1984 within the tenure of warranty the chassis No. 344, 073 63328 of Model - 42 were found cracked. The plaintiff immediately sent the vehicles to first defendant on 12.12.1984 for replacement of the chasis under the terms of warranty, who rest assured the plaintiff that the management of first defendant would lodge the claim with defendant no. 3 and get the replacement of the chassis done. In the meantime, the first defendant requested to plaintiff to deposit Rs. 16,739.43 so that the new chassis may be supplied in place of the cracked chassis and amount can be refunded as soon as the replacement under the warranty is made by third defendant. 5. It is the further case of the plaintiff that under the belief and representation given by first defendant to the plaintiff an amount of Rs.16,739.43 was deposited vide receipt dated 21.02.1984 issued by first defendant, who further charged a sum of Rs. 665/- as labour charges, which the plaintiff deposited vide receipt dated 22.02.1984. It was also informed to plaintiff that his warranty claim has been registered by third defendant as Claim No.07000 -1550. The plaintiff thereafter wrote several letters to settle the claim at an early date but the plaintiff became shocked and surprised to receive a letter from Zonal Service representation of third defendant stating that third defendant does not recommend Model-42 to be converted and used as Tipper, therefore, the claim is not considered. 6.
The plaintiff thereafter wrote several letters to settle the claim at an early date but the plaintiff became shocked and surprised to receive a letter from Zonal Service representation of third defendant stating that third defendant does not recommend Model-42 to be converted and used as Tipper, therefore, the claim is not considered. 6. According to the plaintiff the first defendant had knowledge that third defendant being the manufacturer does not recommend Model - 42 to be converted and used as Tipper despite it with a view to play fraud with the buyer (plaintiff) and somehow to pushup the sale of the vehicles of Model -42, the plaintiff knowingly supplied the vehicles as the authorized dealer of third defendant and thereby cheated the plaintiff while acting in collusion with second defendant. Hence the plaintiff claimed the amount from defendants in the following manner: Sr. No. Amount (in Rs.) Amount paid (i) Rs. 16,739.43 Being the amount paid vide receipt dated 21-2-1984 as price of the replacement of the chasis (ii) Rs. 665.00 Being the amount paid vide receipt dated 21-2-1984 towards labour charges (iii) Rs. 600.00 Deposited vide receipt dated 21-2-1984 against warranty claim. Total Rs. 18,004,43 (Rupees Eighteen Thousand four and forty three paise only) The plaintiff also claimed interest pendente lite at future rate of Rs. 18% per annum as per commercial bank rate and prayed that the suit be decreed. 7. All the defendants filed their separate written statement. The written statement of first defendant is that the plaintiff was not advised or given an impression to purchase the vehicle of Model - 42. The factum of misrepresentation to the plaintiff has been specifically denied and further it has been denied that any advice was given to plaintiff that there was no difference in chassis of Model - 36 and Model - 42. According to first defendant, the plaintiff was well acquainted with the working of both the Models. Further it has been pleaded in para 6 of the written statement denying the averment of plaintiff that he (plaintiff) can rely on the special skill and knowledge of second defendant in case the body is made by the second defendant to be used as Tippers and there was no question of consulting the manufacturer (third defendant).
Further it has been pleaded in para 6 of the written statement denying the averment of plaintiff that he (plaintiff) can rely on the special skill and knowledge of second defendant in case the body is made by the second defendant to be used as Tippers and there was no question of consulting the manufacturer (third defendant). According to first defendant, the plaintiff himself purchased the chassis of Model - 42 and further denied that plaintiff ever requested first defendant to build up the body on the said chassis and the question of foul play or any representation by the said defendant does not arise. The other averments made in the plaint were also specifically denied. 8. The stand of second defendant in its written statement is that he is not the authorized Body Builder of third defendant although the said defendant does the work of Body Building of the customers who approached them for the said purpose and the body is built according to specification and direction given by the customers. Further it has been pleaded in para 7 of the written statement that the plaintiff himself approached second defendant for fabrication of steel body and fitting of Tipper equipment on chassis of Model - 42 and accordingly said defendant undertook to complete the job and completed the same as per the plaintiff's requirement and specification. The plaintiff was satisfied with the work done by the said defendant. In para 11 of the written statement it has been pleaded that second defendant has been informed that vehicle in question being overloaded and furthermore knowing well that the particular body is meant for manual loading only, the plaintiff was using the vehicle for mechanical loading. 9. The stand of third defendant is that second defendant is not its authorized Body Builder and if it had built the body against the direct orders received by it from the customers or from the customers of first defendant, the third defendant has no concern. The other averments made in the plaint were specifically denied by the said defendant. 10. On the basis of allegations made in the plaint and denial made in the written statements, learned Trial Court framed as many as 5 issues and after recording the evidence of the parties, decreed the suit against the first and second defendants (appellants herein) for Rs.18,004.43 paise along with 6% per annum interest.
10. On the basis of allegations made in the plaint and denial made in the written statements, learned Trial Court framed as many as 5 issues and after recording the evidence of the parties, decreed the suit against the first and second defendants (appellants herein) for Rs.18,004.43 paise along with 6% per annum interest. However, the suit against the third defendant was dismissed. 11. The first and second defendants preferred first appeal, which has been dismissed by the impugned judgement and decree. However, the plaintiff did not file any cross-objection dismissing his suit against third defendants. 12. In this manner this second appeal has been filed by the appellants-first and second defendants. 13. This Court on 10.11.1994 admitted the second appeal on the following substantial question of law:- "Whether, the lower appellate Court was correct in decreeing the suit in absence of warranty being filed to prove the claim? 14. Thereafter following two more substantial questions of law were framed by this Court on 23.08.2011:- 2. Whether, the findings of the Courts below fastening the liability on the appellant is perverse being against the evidence placed on record? 3. Whether, the adverse inference should have been drawn against the respondent No.1 for not filing any document relating to dispute in question?" 15. Vehemently, it has been argued by Shri Amit Shrivastava, learned counsel for appellants that the plaintiff purchased the chassis with open eyes and got 'Tippers' built on the said chassis and therefore no responsibility could be fastened on the appellants during the course of its use by the plaintiff. The contention of learned counsel is that buyer (plaintiff) purchased the chassis with open eyes, of his own choice after due verification and therefore no liability can be fastened on the appellants. Indeed the damage has been caused on account of rough use and overloading by the plaintiff. It has also been put-further by learned counsel that the plaintiff failed to submit any warranty and therefore the claim which he has against the appellants cannot be awarded and his suit cannot be decreed. 16.
Indeed the damage has been caused on account of rough use and overloading by the plaintiff. It has also been put-further by learned counsel that the plaintiff failed to submit any warranty and therefore the claim which he has against the appellants cannot be awarded and his suit cannot be decreed. 16. By inviting my attention to a document (Ex.P/1) dated 09.04.1983 it has been put-forth by learned counsel for appellants that the chassis of Model-42 was purchased on 19.03.1983 and the body was built up on 24.08.1983 on the said chassis of Model-42 purchased by the plaintiff and therefore it is luminously clear that first of all chassis was purchased and later on the body was built up but the evidence of the plaintiff when he appeared as PW1 before the learned Trial Court is altogether different and according to him, on the chassis which he purchased, the body was already built up, which is contrary to Ex. P/1. 17. The contention of learned counsel is that the plaintiff is banking upon its case under Section 16 of the Sales of Goods Act, 19630 (in short "Act of 1930") which speaks about implied condition as to quality and fitness and he has invited my attention to subsection (2) of the said section and has contended that if the buyer has examined the goods there shall be no implied condition as regards the fact which such examination ought to have been revealed. According to learned counsel there is no pleading of the plaintiff in this regard that he did not inspect the goods which he had purchased and if that would be the position, according to learned counsel, no liability could be fastened on the appellants and in this context he has invited my attention to decision of Madras High Sorabji Hormusha Joshi and Co. v. V.M. Ismail and another AIR 1960 Madras 520. 18. Learned counsel has also invited my attention to the evidence of plaintiff and submitted that for a considerable long time he was using the vehicles and never intimated to defendants within reasonable time about the damage which was caused to the vehicle and in this context learned counsel has invited my attention to Section 42 of the Act of 1930, which pertains to "acceptance". 19.
19. By inviting my attention to para 12 of the statement of plaintiff it has been contended by learned counsel before purchasing the chassis of Model-42 he was well acquainted that on this model, the manufacturer does not give, permission to build up the body of 'Tippers' and even then if plaintiff has asked second defendant to build up the body on Model-42, no liability could be fastened on the defendants. Learned counsel has also placed reliance on the decision of Bombay High Court City and Industrial Development Corporation of Maharashtra Ltd., Bombay and another v. M/s Nagpur Steel and Alloys Pvt. Ltd., Nagpur AIR 1992 Bombay 55 and decision of Orissa High Court Commissioner of Income-tax v. Prafulla Kumar Mallik, AIR 1969 Orissa 187. 20. It has also been put-forth by learned counsel that material documents have not been filed by the plaintiff indicating that vehicle of Model-42 fitted by Tipper' was carrying how much load and other documents and therefore adverse inference should be drawn against the plaintiff for not filing the same. On these premised submissions it has been contended that by allowing this appeal, the suit of the plaintiff be dismissed. 21. On the other hand Shri R.K. Sanghi, learned counsel of first respondent argued in support of the impugned judgement passed by two Courts below and submitted that present case is a clear case of misrepresentation and on the assurance of first defendant that Model-42 would fulfill the requirement of the plaintiff if Tipper' is fitted on the said chassis. Learned counsel submits that the appellants were quite aware that on the said model if the Tipper is fitted, the chassis would be cracked but knowingly they did not disclose it to the plaintiff and therefore the appellants cannot save their skin and cannot be exonerated from the liability to pay damages which has rightly been fastened on them by learned Trial Court. Learned Counsel has invited my attention to the written statement of first defendant and submitted that present case is not the case of 'express warranty' but is a case of 'implied warranty as envisaged under Section 16 of the Act of 1930.
Learned Counsel has invited my attention to the written statement of first defendant and submitted that present case is not the case of 'express warranty' but is a case of 'implied warranty as envisaged under Section 16 of the Act of 1930. Learned counsel has also invited my attention to para 7,9 and 10 of the written statement of defendant and para 2 and 3 of the written statement of second defendant and it has been contended that because the first defendant controls the Unit of second defendant, both of them are jointly and severally liable to pay damages which has been rightly allowed by learned Trial Court by decreeing his suit. The contention of learned counsel is that finding of misrepresentation is a pure finding of fact and cannot be interfered in this second appeal. By inviting my attention to terms 'implied warranty' learned counsel has put emphasis on the Major Law Lexicon by P. Ramanatha Aiyar, 4th Edition 2010 page 3206 and has also placed reliance on Business Law and the Regulation of Business, 8th Edition by Richard A. Mann Barry S. Roberts page 408. On the basis of these submissions it has been put-forth by learned counsel that this appeal be dismissed. 22. Having heard learned counsel for the parties at length, I am of the view that this appeal deserves to be dismissed. Regarding substantial questions of law No. 1 and 2: 23. On bare perusal of the findings recorded by learned two Courts below as well as after going through the pleadings of parties as well as the evidence placed on record this Court finds that although the plaintiff wanted to purchase five chassis of Model-36 and indeed he bought three Models of it but on account of non-availability of remaining two Models, he bought two chassis of Model 42. The question now rests on pivot that whether there was any misrepresentation of the appellants that the chassis of impugned Model - 42 would fulfill the requirement of plaintiff or in other words whether the 'Tipper' could be fitted on said model.
The question now rests on pivot that whether there was any misrepresentation of the appellants that the chassis of impugned Model - 42 would fulfill the requirement of plaintiff or in other words whether the 'Tipper' could be fitted on said model. According to learned counsel for plaintiff-respondent because it was never disclosed by first and second defendants (appellants herein) that on Model-42 the Tipper cannot be fitted and body cannot be built up on it, therefore, on the assurance given by the appellants, he (plaintiff) purchased the Model-42 and therefore the doctrine of implied warranty' would come into play. On going through the book of the Major Law Lexicon by eminent author P. Ramanatha Aiyar, the meaning of word 'implied warranty' has given and explained and I think it apposite to quote it: Implied warranty. A warranty which is presumed by law EVERY warranty in a sale of goods is a promise that the article is so and when this promise may be implied by the contract of the vendor, or may result from the nature and circumstances of the sale, it is then called as "implied warranty". Warranties, such as the warranty of merchantability, that are imposed by law; they do not arise from expressions or actions of the principal. An implied warranty is simply a warranty that the articles sold, when there is no express warranty, is merchantable and fit for the purpose for which it is intended. A warranty that the articles sold are merchantable and fit for the purpose for which they are intended. {S. 16(3), Sale of Goods Act (3 of 1930)}. Warranties may be express or implied. The law reads certain provisions into the sale transaction between buyer and sellers and these warranties are implied. In marine insurance, warranty that a vessel is seaworthy and its voyage lawful (not explicitly written into the contract). (Insurance) Implied warranty of fitness for a particular purpose. An implied warranty that arises whenever the buyer relies on the seller's expertise to select goods to suit the buyer's intended use. "Those unfamiliar with the difference between the warranty of merchantability (fitness of the ordinary purposes for which such goods are used) and the warranty of fitness for a particular purpose often confuse the two; one can find many opinions in which the judges used the terms 'merchantability' and 'fitness for a particular purpose' interchangeably.
"Those unfamiliar with the difference between the warranty of merchantability (fitness of the ordinary purposes for which such goods are used) and the warranty of fitness for a particular purpose often confuse the two; one can find many opinions in which the judges used the terms 'merchantability' and 'fitness for a particular purpose' interchangeably. Such confusion under the Code is inexcusable.....'." The doctrine of 'implied warranty' has been further explained in the book of Business Law (supra), which reads thus; IMPLIED WARRANTIES An implied warranty, unlike an express warranty, is not found in the language of the sales contract or in a specific affirmation or promise by the seller. Instead, it exists by operation of law. An implied warranty arises into their circumstances under which the parties enter into their contract and depends on factors such as the type of contract or sale entered into, the seller's merchant or non-merchant status, the conduct of the parties and the applicability of other statutes. Merchantability. Under the Code, a merchant seller makes an implied warranty of the merchantability of goods that are of the kind in which he deals. The implied warrant of merchantability provides that the goods are reasonably fit for the ordinary purposes for which they are used, pass without objection in the trade under the contract description, and are of fair, average quality. (Article 2A). Fitness for Particular Purpose. Unlike the warranty of merchantability, the implied warranty of fitness for a particular purpose applied to any seller, whether he is a merchant or not. The implied warranty of fitness for a particular purpose arises if at the time of contracting the seller had reason to know the buyer's particular purpose and to know that the buyer was relying on the seller's, skill and judgment to select suitable goods. (Article 2A). The implied warranty of fitness for a particular purpose does not require any specific statement by the seller. Rather, it requires only that the seller know that the buyer, in selecting a product for her specific purpose, is relying on the seller's expertise. The buyer need not specifically inform the seller of her particular purpose, it is sufficient if the seller has reason to know it.
Rather, it requires only that the seller know that the buyer, in selecting a product for her specific purpose, is relying on the seller's expertise. The buyer need not specifically inform the seller of her particular purpose, it is sufficient if the seller has reason to know it. On the other hand, the implied warrant of fitness for a particular purpose would not arise in a situation where the buyer insists on a particular product and the seller simply conveys it to her. In contract to the implied warranty of merchantability, the implied warrant of fitness for a particular purpose pertains to a specific purpose for rather than the ordinary purpose of, the goods. A particular purpose may be specific use or may relate to a special situation in which the buyer intend to use the good. Thus, if the seller has reason to know that the buyer is purchasing a pair of shoes for mountain climbing and that the buyer is relying on the seller's judgment to furnish suitable shoes for this purpose, a sale of shoes suitable only for ordinary walking purpose would be a breach of this implied warranty. Likewise, if a buyer indicates to a seller that she needs a stamping machine to stamp 10,000 packages in an eight-hour period and that she relies upon the seller to select an appropriate machine, the seller, by selecting a machine, impliedly warrants that the machine selected will stamp 10,000 packages in an eight- house period. 24. There is no quarrel to the proportion what is the meaning of 'implied warranty' and how it should be interpreted. But, the whole question is that whether there was any 'implied warranty' given by the appellants or not and further whether plaintiff was quite aware before purchasing that on the Model-42 that the body of 'Tipper' cannot be built up on it. If the plaintiff was quite aware of this situation before purchasing the chassis of Model-42 he stands nowhere because in that situation knowingly that a body of 'Tipper' cannot be built upon the said Model-42, he purchased the same and in that case no liability could be fastened on the appellants.
If the plaintiff was quite aware of this situation before purchasing the chassis of Model-42 he stands nowhere because in that situation knowingly that a body of 'Tipper' cannot be built upon the said Model-42, he purchased the same and in that case no liability could be fastened on the appellants. The turning point in this case which is against the appellants is that on the impugned Mode - 42 the body of 'Tipper' cannot be built upon came into the knowledge of plaintiff only after the vehicle became damaged and he submitted claim and it was informed by Manufacturer (third defendant) vide its letter dated 20.07.1984 (Ex. P/17) that on Model - 42 the body of Tipper cannot be built up. It shall be condign to quote that letter (Ex.P/17) which reads thus: - March 19,1984 Mr. Maharaj S Bhatia C/O Indersons & Co. Jabalpur Re: Warranty claim no.070001550 dated 14.02.84 for chassis frame. Dear Sir, This has reference to our copy of your letter dated 23.02.84 addressed to our Divisional Manager (Service) HQ, Bombay regarding the above. Since we do not recommend SE/42 to be converted and used as tippers the claim has not been considered under goodwill by our Divisional Manager (Service HQ) Bombay. Thanking you. Yours faithfully, Tata Engineering & Loco. Co. Ltd. -sd- ZONAL SERVICE REP. Earlier to the date mentioned in this letter, the plaintiff was not aware that on Model-42 the body of 'tipper' cannot be built up. 25. The instant case comes within the purview of Section 16 of the Act of 1930 which speaks about the 'implied condition' as to quality and fitness and according to this Section there is no implied warranty or condition as to quality or fitness for any particular purpose of goods supplied under the contract of sale and the explanations are given from sub-section (1) to sub -section(4) to Section 30 of the Act of 1930. According to sub - section (1) where the buyer expressly or by implication makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller's skill or judgment and the goods are of description which it is in the course of seller's business to supply (whether he is manufacturer or purchaser or not), there is a implied condition that goods shall be reasonably fit for such purpose.
The proviso appended to sub-section (1) wriggles out from such an implied condition if the specified article is under its patent or other trade name. In the instant case a pure finding of fact has been arrived at by learned two Courts below that plaintiff was desirous to purchase five chassis of Model-36 and indeed three of them were supplied to him, however, two chassis of Model-42 were supplied to him instead of Model-36. Learned two Courts below have also arrived at a pure finding of fact that the buyer (plaintiff) expressly told the seller (first and second defendants) that he would install the 'Tipper' on each chassis and thus, it was known to the seller (first and second defendants) that for a particular purpose the chassis are being purchased by the plaintiff. In these state of affairs it was incumbent upon the seller that if the Tipper' is installed on the chassis of Model-42 it will not serve the purpose of the plaintiff and the chassis may be damaged. It was well in the knowledge of sellers (first and second defendants) that if Tipper is installed on the chassis of Model-42. it will not bear the heavy weight for which it was being purchased by the plaintiff and therefore if the seller without disclosing this fact, has sold Model-42 to the plaintiff, certainly they are liable to pay damages because after installing the Tippers when the vehicle was used, it was damaged. 26. In Gillespie Brothers vs. Cheney Eggar and Co. (1896) 2 QB 59 the buyer purchased cargo of Cyfarth Merthyr coal under a written contract, Before the contract was made it was informed to the seller that coal is wanted for bunkering steamers and it was held that it was not a purchase of a specified article under it is patent or trade name and therefore there was a implied warranty that the coal which would be supplied, it would fit the requirement of the purchaser.
This decision is applicable in the present case because in the present case also the seller (appellants) were quite aware that for which particular purpose the plaintiff is purchasing the chassis and it was in their special knowledge that on Model-42 the 'Tipper' cannot be installed and even then they sold it to the plaintiff without disclosing this fact to the plaintiff and therefore according to me rightly they have been found to pay damages to the plaintiff. In Richard Thorold Grant v. Australian Knitting Mills, Ltd. and others (1936) AC 85 = AIR 1936 PC 34 it was held by the Privy Council that where the defect is a hidden and is unknown to the customers, the seller was held to be responsible to pay the damages. 27. Much emphasis has put by learned counsel for appellants on proviso 2 to subsection (2) of Section 16 of the Ac of 1930 and has submitted that it is borne out from the evidence of plaintiff that before purchasing the Model-42 he saw and inspected the same and therefore looking to mandate given in this proviso no liability can be fastened on the defendants. However, the submission so made at the first blush appears to be quite attractive but on deeper scrutiny found to be devoid of substance. Mere seeing the Model-42 by the plaintiff would not be sufficient in the peculiar facts and circumstances because it was in the special knowledge about the defendants only that Tipper cannot be fitted on this model and therefore, it will not exonerate the first and second defendants (appellants) from the liability to pay damages since they did not disclose to plaintiff that Tipper cannot be fitted and they were quite aware that plaintiff is purchasing Model-42 to install a Tipper. 28. The reason to enact proviso to sub-section (2) of the Act of 1930 is that if a party purchases an Article upon his own judgement he cannot afterwards hold vendor responsible on the ground that article was turned out to be unfit for the purpose it was required; but if he relied upon the judgment of the seller and informed him of the use for which the article is to be applied the transaction carried with a implied warranty that the things can be fit and in proper function for which they were designed.
The learned two Courts below have arrived at a pure finding of fact that the purpose for which Model-42 was being purchased by plaintiff was known to the first and second defendants and therefore, certainly they are liable to pay damages because it was well in their special knowledge that a Tipper cannot be installed if Model-42 is cut and fabricated to fit in the Tipper. In Bristol Tramways Company v. Fiat Motors Limited (1910) 2 KB 831 it was held that the buyer by a written contract buys from Fiat Motors Limited, a fiat motor which he has inspected and ordered six vehicles more. It was explained verbally that purchasers are required vehicles to ply vehicles in heavy traffic on hilly roads. When the cars were delivered they broke down and became unfit for traffic requirement and it was held that sellers are required to pay damages because firstly cars were not fit for traffic and secondly, this is not a sale of car under the patent or trade name, and even if it were, the cars must be merchantable which they were not found. According to me, this decision is squarely applicable in the present case, according to chart which I am mentioning hereinbelow:- S. No. Case of Bristol Tramways Company Present Case 1 The buyer inspected the chassis. The plaintiff has inspected the chassis. 2 It was told that for heavy traffic cars on hilly roads will be used. Plaintiff told that 'Tipper' will be installed and it will be used for loading purpose. 3. After the cars were delivered and used they broke down. Similarly Model -42 also broke - down. 4. It was known to the seller that the cars which are sold out would not serve the purpose. It was known to the seller that the Model - 42 which is sold out would not serve the purpose of the plaintiff. 5. It was not amounted to sell of cars under the patent or trade name. It is not a sale of Model - 42 under a patent or trade name. 6. The car was not found to be merchantable. Model - 42 was not found to be merchantable.
5. It was not amounted to sell of cars under the patent or trade name. It is not a sale of Model - 42 under a patent or trade name. 6. The car was not found to be merchantable. Model - 42 was not found to be merchantable. In the case of Bristol Tramways Company (supra the term of merchantable quality" has been explained by Farewell, LJ and by holding that a "merchantable quality" of reasonable man, acting reasonably would after the full examination accepts it under the circumstances of the case in the performance of his offer to buy that article which he buys for his own use or to sale out again. In general, the term "merchantable quality" means two things; firstly when the goods are bought for self-use they must be reasonably fit for the purpose the goods of that kind are commonly supplied and used, and secondly where the goods are brought for resale, they must be reasonably good for that purpose. 29. In the case of Priest v. Last (1903) 2 KB 148 a "hot water bottle" was purchased by the plaintiff from chemist, when it was used next to his skin, it injured plaintiff's wife. It was held that there was a breach of implied condition as to merchantable quality and defendants was liable to pay compensation because the hot water bottle is generally used for heat for human body and article sold by the defendant to the plaintiff was not fit for that purpose. 30. According to me, where the goods are ordered for a special purpose and that purpose is disclosed to the seller so that in accepting the order he undertakes to supply goods which are suitable for the object required such a contract is sufficient to establish that the buyer has shown that he relies on the seller's skill and judgment within the meaning of section 16 of the Act. See Manchester Liners Limited v. Rea Ltd. (1922) 2 AC 74 and Frost v. The Aylesbury Dairy Company Limited, (1905) 1 KB 608. 31.I would like to put emphasis that what is the fine distinction between a patent and latent defect.
See Manchester Liners Limited v. Rea Ltd. (1922) 2 AC 74 and Frost v. The Aylesbury Dairy Company Limited, (1905) 1 KB 608. 31.I would like to put emphasis that what is the fine distinction between a patent and latent defect. A person possesses ordinary skill, using due care and diligence while examining the goods and he would not have thought of existence of a particular defect which gives rise to the action, such a defect would be a latent or hidden one and distinguished from a patent defect. Applying this principle in the instant case, even if the plaintiff by his own eyes saw chassis of Model-42 but he was not aware that 'Tipper could not be fitted in it and this defect was hidden and this defect was in the special knowledge of seller (appellants) therefore, they were obliged to disclose this defect to the plaintiff. In the case of Apha Mirza Nasarati Khoyee v. Gordon Woodroffe & Co. AIR 1937 Madras 40 it was held that the defects contained in section 16 are those apparent on the reasonable examination within the meaning of section 17 of the Act of 1930. Further it was held that 'implied warranty' will be excluded as regards any defects which a buyer of ordinary diligence would have detected by due diligence in use by usual means. What shall be the due diligence it would depend upon the facts and circumstances of the each case. The decision of Richard Thorold Grant (supra) was placed reliance in this decision. In Messrs Hasembhoy Jetha, Bombay v. New India Corporation Ltd, Madras AIR 1955 Madras 435 it was held that the inspection made by the respondent's representative was of no use inasmuch as the defect was a latent defect which could not be revealed except by demonstration with electric power and it was infact was not done or avoided on the assurance given by the appellant's firm. It was further held that mere fact that there was an opportunity to inspect or that inspection was done or that machine was worked by hand was of no use as latent defect would not reveal by such inspection. 32. The decisions of City and Industrial Development Corporation of Maharashtra Ltd. Bombay and another (supra), Prafulla Kumar Mallik (supra) and Sorabji Hormusha Joshi and Co.
32. The decisions of City and Industrial Development Corporation of Maharashtra Ltd. Bombay and another (supra), Prafulla Kumar Mallik (supra) and Sorabji Hormusha Joshi and Co. (supra) relied upon by learned counsel for appellants are not applicable in the present case because they do not relate to implied warranty and are not on the point of hidden defect. However, the present case is of implied warranty and of hidden defect. 33. There is concurrent finding of fact arrived at by learned two Courts below on the basis of oral and documentary evidence placed on record that on the assurance and representation given by first and second defendants (appellants) that the requirement of plaintiff to build up the body of 'Tipper' would be fulfilled if he purchases Model-42 then certainly they are liable to pay damages on account of the crack of chassis. According to me, the learned two Courts below did not commit any error in decreeing the suit of plaintiff. 34. Thus, the substantial question of law No.1 is answered that even without filing the warranty by plaintiff, learned two courts below did not err in decreeing the claim of the plantiff and the substantial question of law No.2 is answered that there is no perversity in the judgment of two Courts below fastening the liability on the appellants. Regarding substantial question of law No. 3 35. The question of having possession of certain documents in the power and possession of the plaintiff that how much load was given on the Tippers and whether Tipper was competent to carry the said load or not would not be a determining factor because had appellants disclosed this fact to the plaintiff before purchasing the Model-42 that the 'Tipper' cannot be fitted on this Model and even then the plaintiff would have purchased the said model then only the defendants could be exonerated. Hence in the facts and circumstances, no adverse inference can be drawn against the plaintiff (respondent No.1). This substantial question of law is thus answered against the appellants and in favour of plaintiff-respondent No.1. 36. Resultantly, this appeal fails and is hereby dismissed with costs. Counsel fee as per schedule, if pre certified.