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PETITIONER: MARWAR TENT FACTORY

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT09/11/1989

BENCH: RAY, B.C. (J) BENCH: RAY, B.C. (J) MUKHARJI, SABYASACHI (J)

CITATION:  1990 AIR 1753            1989 SCR  Supl. (2) 127  1990 SCC  (1)  71        JT 1989 (4)   307  1989 SCALE  (2)1149

ACT:     Indian  Sale  of  Goods Act 1930--Sections  23,  39  and 61--Short delivery in transit of goods----Liability  for--F. O.R. Contract--Meaning of.

HEADNOTE:     The  appellant is a firm dealing in the manufacture  and sale  of  Tents and Tarpaulins at Jodhpur in  Rajasthan.  It carried  on a regular business of supplying these  goods  to defence services. The Director General of Supplies and  Dis- posal invited tenders for the supply of tents and the appel- lant-firm submitted its tender, which was accepted. The said contract  was of two kinds of tents viz, "Flies  Inner"  and "Flies Outer", the agreed rate of the latter was Rs.225  per tent  and the quantity was 15,000. As per the terms  of  the contract, the goods were to be inspected at the premises  of the appellant firm and after inspection the same were to  be despatched  to  Commandant, C.O.D., Kanpur. As  regards  the mode of payment of the price of the goods, 95% of the  price was to be paid on proof of despatch of goods and  production of inspection note, and 5% latter.     On  October 14, 1968 one consignment of 1500  tents  was despatched  to C.O.D. Kanpur from Jodhpur by  the  appellant under  Railway Receipt No. 502671 and 95% of the  price  was paid  to the appellant. The commandant, C.O.D.  Kanpur,  the consignee  reported  that  224 tents out of  the  said  sale consignment  had  not been received at Kanpur and  for  that reason  a sum of Rs.51,912 being the price of 224 tents  was deducted from the amounts due to the appellant, under anoth- er  contract.  The Traffic Officer,  Commandant  C.O.D.  had filed  a claim with the railways for short delivery  of  224 tents.     Despite  repeated  requests  by the  appellant  for  the payment of the said amount, the same was not paid to it.  As such the appellant filed a suit in Delhi High Court for  the recovery  of the principal amount as also for  the  interest thereon. In the suit, the appellant also claimed interest on two other consignments, as its balance price i.e. 5% amount- ing to Rs.24,357 was paid after a delay of 3 years and  thus a  sum of Rs.8,525 was claimed as interest @ 12%  per  annum from  1.1.69  to  1.12.71.  Thus  the  total  claim  was  of

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Rs.74.972. 128     The  defence of Respondents 1, 2 & 5 was that 224  tents were received short and as such a sum of Rs.51,912 its price was rightly deducted from the appellant’s bill.     Respondents  3 & 4 (Railways’ Officials) filed a  State- ment  that only 11 tents were delivered short for which  the admitted  liability was Rs.2,475, the same having been  paid to C.O.D. Kanpur by debit adjustment.     The  Trial  Judge by his Order dated February  12,  1982 dismissed  the claim of the appellant substantially  but  so for  as the amount of Rs.2,475 regarding the shortage of  11 tents was concerned, the same was decreed with interest.     Against  the Judgment and Order of the Trial Judge,  the appellant  preferred an appeal before the Division Bench  of the  High  Court  and the same having  been  dismissed,  the appellant has come up in appeal to this Court after  obtain- ing Special Leave. Allowing the appeal, this Court,     HELD:  In view of the terms and conditions of  the  con- tract embodied in clause 11 of the schedule of acceptance of tender regarding the place of delivery "F.O.R. Jodhpur", the property  in the goods passed immediately on to  the  seller after  delivering  the  goods and loading the  same  in  the railway wagons at Jodhpur for transmission to the buyer, the consignee, without reserving any right of disposal. [136D]     On consideration of the place of delivery as well as the terms  of delivery embodied in clause 11 of the schedule  of Acceptance  of Tender, the property in the  goods  alongwith the  risk  in  the goods passed from the  appellant  to  the Respondent  No.  5 when the goods were  delivered  and  dis- patched  by railway wagons at Jodhpur i.e.  F.O.R.  Jodhpur. The  consignee,  Commandant, C.O.D.  Kanpur  is,  therefore, liable for the price of 224 tents which was deducted by  him from the other bills of the appellant. [137A-B]     The plaintiff is entitled to get a decree of interest on the  price from 1.1.69 to 1.12.1971 @ 6% per annum which  is considered to be a reasonable rate of interest as claimed by the plaintiff-appellant. [139C]     Girija  Proshad Pal v. The National Coal Co.  Ltd.,  AIR 1949 Cal. 472; The Commissioner of Sales-Tax, Eastern  Divi- sion, Nagpur v. 129 Husenali Adamji & Co., [1959] 2 Supp. SCR 702; B.B. Bose  v. National Coal Trading Company, AIR 1966 (Patna) 346 and M/s. M.K.M.  Moosa  Bhai Amin, Kota v. Rajasthan  Textile  Mills, Bhawanimandi, AIR 1974 Raj. 194-1974 Raj. L.W. 77,  referred to.

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 4586  of 1989.     From the Judgment and Order dated 14.3.1983 of the Delhi High Court in R.F.A. (O.S.) No. 3 of 1983. Pallav Shishodiya and D. Bhandari for the Appellant. V.C. Mahajan, Arun Madan and C.V.S. Rao for the Respondents. The Judgment of the Court was delivered by RAY, J. Special leave granted. Arguments heard.     This is an appeal against the judgment and order  passed in R.F.A. (OS) 3 of 1983 on March 14, 1983 by the High Court of  Delhi  dismissing  the Civil  Writ  Petition  in  limini against  the judgment and decree rendered by Chawla,  J.  in Suit No. 50 of 1972 on February 12, 1982.

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The matrix of this case is stated hereunder.     The  appellant M/s Marwar Tent Factory is a firm  having its registered office at Jodhpur (Rajasthan) and dealing  in the  manufacture and sale of tents and tarpaulins. The  firm is a regular supplier of these goods to the defence services of India.     On March 13, 1986 tenders were invited for the supply of tents by the Directorate General of Supplies and  Disposals, the respondent No. 2. Accordingly, the appellant submitted a tender which was accepted by the officer of the  Directorate General of Supplies and Disposals on behalf of the President of India. The said contract was of two kinds of tents ’Flies Inner’  and  ’Flies Outer’. The agreed rate for  the  ’Flies Outer’  was Rs.225 per tent and the quantity was 19,100.  In accordance  with  the said terms of the contract  the  goods were to be inspected at the premises of the firm at  Jodhpur and after the same being passed by the Inspector, the  goods had  to be despatched to the Commandant, C.O.D.  Kanpur.  It was further agreed between the 130 parties  that 95% of the price was payable on proof of  des- patch and production of the inspection note. The balance  5% was to be paid after receipt of the goods in good  condition by the C.O.D., Kanpur.     On  October 14, 1968, one consignment of 1500 tents  was despatched  to  the C.O.D., Kanpur by  the  appellant  under Railway  receipt No. 502671 dated 14.10.1968 and 95% of  the price  was  paid  by  demand  drafts  dated  17.10.1968  and 19.5.1969. The Commandant, C.O.D., Kanpur reported that  224 tents  out  of a sale consignment had not been  received  at Kanpur  and consequently a sum of Rs.51,912 (being the  full price of those 224 tents inclusive of sales tax) was deduct- ed  from  the  amounts due to the  appellant  under  another contract.    The  appellant made repeated requests and  sent  repeated reminders for payment of the said sum of Rs.51,912 from  the respondent  but without any effect. As such,  the  appellant filed a suit being Suit No. 50 of 1972 in the High Court  at Delhi  for  recovery of the said principal sum  as  well  as interest  on  the principal. The appellant  further  claimed interest on two other consignments as the price of the  said consignments was paid after a great delay. The two  consign- ments  were of 700 and 1400 tents despatched on  August  10, 1968  and  August 27, 1968 respectively. Though 95%  of  the price  was paid, the balance 5% amounting to  Rs.24,357  was not paid till December 1, 1971 despite repeated requests and reminders.  The  said payment of  Rs.24,357  was  wrongfully delayed  by  about three years and a sum  of  Rs.8,525  was, therefore, claimed as interest @ 12% per annum from 1.1.1969 to  1.12.1971  on the said amount. The total  claim  of  the appellant was of Rs.74,972 i.e. Rs.51,912 principal sum  and Rs.  14.535 as interest on this and Rs.8,525 as interest  on the sum of Rs.24,357 wrongfully withheld for three years.     A joint statement was filed by the respondent Nos. 1,  2 &  5 as their interest were identical. The defence was  that 224  tents  were received short under  railway  receipt  No. 502671  and the sum of Rs.51,9 12 was rightly deducted  from the payment due to the appellant under other contracts.     The  respondent Nos. 3 and 4 also filed a joint  written statement stating inter alia that only 11 tents were  deliv- ered  short under railway receipt No. 502671 for  which  the admitted liability was to the tune of Rs.2,475. This sum had been paid to the C.O.D., Kanpur by debit adjustment. 131     T.P.S. Chawla, J by his judgment and order dated  Febru-

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ary  12,  1982 though dismissed the claim of  the  appellant substantially  but in so far as the amount of  Rs.2,475  re- garding the shortage of 11 terms admitted by respondent Nos. 3 and 4 was concerned, decreed the said sum in favour of the appellant  with interest @ 12% per annum from 1.4.1972  till the date of judgment and further interest @ 6% from the date of judgment till the realisation of the amount. Against  the said  judgment and decree the appellant preferred an  appeal being R.F.A. (OS) No. 3 of 1983 before the Division Bench of the said High Court. The said appeal was, however, dismissed by  the High Court of Delhi by order dated March  14,  1983. The  instant appeal on special leave has been  preferred  by the appellant against the aforesaid judgment and decree.     The crucial question that requires consideration in this appeal is whether 1500 tents which were loaded in the  rail- way  wagons on October 14, 1968 at Jodhpur for  delivery  to the  respondent No. 5, the Commandant, C.O.D., Kanpur  under railway  receipt No. 502671 were actually delivered  to  the respondent  No. 5. It has been held by the Trial Court  i.e. learned single Judge, High Court, Delhi that the tents  were carried in 3 wagons upto Agra. The railway line from Jodhpur to  Agra was a meter gauge. Thereafter, from Agra to  Kanpur which  is  a broad gauge line the tents were put  into  four broad  gauge wagons at Agra for onward transmission to  Kan- pur, as evident from the transmission, register. It has been found that the railways could not establish the delivery  of 224  tents under railway receipt No. 502671 to  the  Comman- dant, C.O.D., Kanpur from the unloading register. The short- age  certificate  issued by the  railways  corroborates  the entries  in the unloading register. The particulars  of  the consignment are set out in the heading of this document. The railway  receipt is No. 502671 and the names of  the  sendor and  consignee  are  also mentioned.  The  Traffic  Officer, Commandant,  C.O.D., Kanpur filed a claim with the  railways on  February  10, 1969 for 224 packages received  short  and this  claim was made under railway receipt No.  502671.  The plea  of the railways was that the shortage was of 11  tents and  not of 224 tents. It has been found by the Trial  Court that  this plea is falsified by the unloading register,  the shortage  certificate  and the reconciliation  statement  as also the report made by their Traffic Inspector on  December 9, 1970. Accordingly, it was held that under railway receipt No. 502671 the appellant delivered the full quantity of 1500 tents  to the railways but the latter failed to deliver  224 tents  out  of this consignment to the  Commandant,  C.O.D., Kanpur and as such the railways are estopped from contending that it was under some other railway 132 receipt. The Trial Court, however, held that no decree could be  passed against the railways because the plaint  did  not contain  any  claim  for loss or  non-delivery  against  the railways. Secondly, the suit against the railways was barred by  time and thirdly since no notice under Section  78-B  of the Indian Railways Act was served on the railways by or  on behalf  of the appellant. The appellant, however,  submitted that the title of the goods passed on to the respondent  No. 5,  Commandant,  C.O.D., Kanpur, the moment the  tents  were lodged  on rail head, Jodhpur as the term of delivery  under the contract was F.O.R., Jodhpur. For any short delivery  of the goods made by the railways at Kanpur, the appellant  was not responsible and the respondent No. 5, under the terms of the  contract  is not entitled to deduct the  price  of  the short  delivery  of  tents i.e. 224 tents. It  was  for  the Commandant,  C.O.D., Kanpur to claim damages from the  rail- ways and the Commandant had actually made a claim as  stated

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hereinbefore to the railways in respect of the short  deliv- ery.  The  learned  single Judge, however,  found  that  the abbreviation  F.O.R. meant Free on Rail meaning simply  that the cost of the carriage of the goods upto the railway wagon is included in the price and must be borne by the seller and the cost of carriage thereafter is to be borne by the buyer. It  has also been held that the risk in the goods would  not pass  at  Jodhpur  as expressly stipulated  in  the  general conditions  of contract contained in Form DGS & D-68.  These were made applicable by clause 7 in the Schedule of  accept- ance  of tender. Special emphasis was laid to the  condition No.  4 entitled "responsibility of contractor for  executing the contract". The learned Judge has with reference to  sub- clause  (10)  of this condition held that  the  goods  shall remain in every respect at the risk of the contractor  until their  actual  delivery to the consignee at  the  stipulated place  and as such the risk of the appellant  remains  until the goods were actually delivered to the Commandant,  C.O.D. Kanpur.  The  argument as regards condition No.  14  of  the general conditions of contract as well as its sub-clause (2) entitled  "passing of property" was negatived on the  ground that the risk was governed by condition 4(1) of the  general conditions  of contact. The claim before the railways  being time  barred  and also no notice under Section 78-B  of  the Indian  Railways  Act  having been served  on  the  Railways within the stipulated period, the appellant could not  claim for damages for breach of contract and for the price of  the tents not delivered. However, in respect of the price of  11 tents the shortage of which was admitted by the railways and for which a sum of Rs.2,475 was paid to the respondent No. 5 by  the  appellant, it was decreed with interest @  12%  per annum  from 1.4.1972 till the date of passing of the  decree and  also further allowed interest on the said sum @ 6%  per annum thereafter till the date of 133 payment.  The  respondents, however, did  not  question  the finding  of the Trial Court regarding the short delivery  of 224  tents  at the railway station  at  Kanpur.  Admittedly, there  has  been a short delivery of 224 tents  out  of  the consignment of 1,500 tents loaded at Jodhpur railway station in the railway wagon under the said receipt No. 50267 1.     In order to decide and fix the responsibility for  pass- ing  of the decree in respect of the sum of Rs.51,912  being the full price of 224 tents inclusive of sales tax  deducted from the amount due to the appellant under another  contract by  the  respondent No. 5, it is pertinent to  consider  the question  when the property in goods passed from the  seller to the buyer at Jodhpur when the goods were loaded in  rail- way  wagons  for delivery to the consignee  at  Kanpur.  The learned counsel for the appellant drew our attention to  the condition  No.  11 of the Schedule of acceptance  of  tender dated February 29, 1968. It has been mentioned therein  that the terms of delivery was F.O.R., Jodhpur i.e. free on  rail at Jodhpur railway station. It has also been mentioned  that before  the goods are loaded on railway wagons for  delivery to  the  respondent No. 5 at Kanpur, the  Inspector,  I.G.S. North  India  will inspect the same at  firm’s  premises  at Jodhpur and after approval the said goods will be despatched to its destination by placing them in the railway wagons  at Jodhpur  railway station and the railway receipt has  to  be sent  to  the consignee under registered  cover  immediately after  despatch of the stores with full details. It is  also stipulated  that 95% of the price of the goods will be  paid by  the respondent No. 5 on receipt of the  railway  receipt and  the  inspection note and the balance 5%  will  be  paid

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after  the same reached at the destination in  goods  condi- tion. Referring to this term for delivery under clause 11 of the  Schedule of acceptance of tender, it has been urged  by the learned counsel for the appellant that the delivery  was complete at Jodhpur when the/goods were loaded in the  goods train  for  delivery to the respondent No. 5 at  Kanpur  and property  in  the goods passed to the buyer as soon  as  the goods were despatched by railway at Jodhpur. Thereafter, the risk  in respect of the goods despatched remained  with  the consignee.  The appellant, the consignor is entitled to  get the entire price of the 224 tents which were short delivered by the respondent Nos. 3 and 4 to respondent No. 5 at Kanpur in view of the clear finding by the Trial Court that  though the entire consignment of 1500 tents was actually loaded  in the  railway wagons for despatch to the consignee,  the  re- spondent  No. 5. The respondent No. 5 duly filed a claim  to the  railways,  the respondent Nos. 3 and 4  for  the  short delivery  to the tune of 224 tents immediately after  taking delivery of the goods. In order to decide the question as to whether the rights in the goods passed from 134 the  seller  to  the buyer i.e. from the  appellant  to  the respondent No. 5 as soon as the goods were loaded in railway wagons  at Jodhpur and the railway receipt was sent  to  the consignee,  it is pertinent to refer to the meaning  of  the words  F.O.R.  Jodhpur. In Haulsbury’s Law of  England,  4th Edition  (Volume 41) at page 800, para 940 it has been  men- tioned that:               "Under  a free on rail contract  (F.O.R.)  the               seller  undertakes to deliver the  goods  into               railway wagons or at the station (depending on               the  practice of the railway) at his  own  ex-               pense,  and (commonly) to make  such  contract               with the railway on behalf of the buyer as  is               reasonable  in the circumstances. Prima  facie               the time of delivery F.O.R. fixes the point at               which property and risk pass to the buyer  and               the price becomes payable."     In Benjamin’s Sale of Goods (2nd Edition), at page  1799 it is stated as under:               "Stipulations as to time of ’delivery’--provi-               sions as to the time of delivery in an  f.o.r.               contract  are  taken to refer to the  time  of               shipment and not to the time of arrival of the               goods;  and  this may be so  even  though  the               provision in question contemplates the arrival               of  the goods by a certain time. Thus in  Fre-               bold and Sturznickel (Trading as Panda O.H.D.V               v.  Circle Products Ltd. German  sellers  sold               toys to English buyers f.o.b. Continental Port               on the terms that the goods were to be  deliv-               ered in time to catch the Christmas trade. The               goods were shipped from Rotterdam and  reached               London  on  November 13; but  because  or’  an               oversight  for  which  the  sellers  were  not               responsible  the buyers were not  notified  of               the  arrival of the goods until the  following               January 17. It was held that the sellers  were               not in breach as they had delivered the  goods               in  accordance  with the requirements  of  the               contract  by  shipping them in such a  way  as               would normally have resulted in their  arrival               in time for the Christmas trade."     The  question as to the meaning of F.O.R. contract  fell for  consideration in the case of Girija Proshad Pal v.  The

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National  Coal Co. Ltd., AIR 1949 (Calcutta) 472. P.B.  Muk- harji,  J. as His Lordship then was observed in para  11  as follows: 135               "The  words  f.o.r. are well  known  words  in               commercial contracts. In my judgment they mean               when  used to qualify the place  of  delivery,               that  the seller’s liability is to  place  the               goods free on the rail as the place of  deliv-               ery. Once that is done the risk belongs to the               buyer."      Reference  may also be made in this connection  to  the decision  of  this  Court rendered in  The  Commissioner  of Sales-Tax,  Eastern Division, Nagpur v. Husenali Adamji  and Co., [1959] 2 Supp. SCR 702. In that case under the terms of the contract the respondent Company whose place of  business was situate in Chanda in the erstwhile Central Provinces had to load diverse quantities of ’sawar’ logs on railway wagons and  to  despatch  the same from Chanda  and  other  railway stations  in the Central Provinces to Ambernath, a  town  in the  erstwhile Province of Bombay. Clause 2 of the  contract reserved the right of the consignee to examine the goods  on arrival  at  Ambernath and to reject the same if  they  were found, in the opinion of the factory manager, not to conform with  the  specifications. Clause 6 also provided  that  the goods shall be measured under the supervision of the  facto- ry’s representative, the decision of the factory manager  at Ambernath would be binding on the contractor and by clause 7 the  prices  of the goods shall be ’F.O.R.  Ambernath’.  The question arose was as to when and where the property in  the logs passed from the respondent to the consignee and whether the respondent was liable to pay sales tax under the  provi- sions  of  the Central Provinces and Berar  Sales  Tax  Act, 1947.  The  Sales Tax Department levied the tax on  the  re- spondent  on the ground inter alia that the property in  the logs  passed  from the respondent to the  factory  consignee under section 23 of the Indian Sale of Goods Act, 1930  when the  logs  were  loaded in the wagons  at  railway  stations within the Central Provinces and the railway receipts  taken in the name of the factory were forwarded to the latter.  It was held:               "that on a proper construction of the contract               as  a whole the intention of the  parties  was               that  the  respondent would send the  logs  by               rail  from the different stations in the  Cen-               tral Provinces to Ambernath where the  factory               manager would inspect, measure and accept  the               same  if in his opinion they were of  the  de-               scription and quality agreed upon. Consequent-               ly,  as the respondent sent the logs and  left               it  to the factory to appropriate to the  con-               tract  such  of them as they  accepted  as  of               contract, quality and description, the proper-               ty in the logs did not pass to the buyer by               136               the mere delivery to the railway for  carriage               but  passed  only at Ambernath when  the  logs               were  appropriated  by the  factory  with  the               assent  of  the seller within the  meaning  of               section  23 of the Indian Safe of  Goods  Act,               1930."      It  is  also convenient to refer*to  the  provision  of Section  23(2) of the Indian Sale of Goods Act,  1930.  This sub-section provides that:               "(2) Where, in pursuance of the contract,  the

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             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 uncondition-               ally appropriated the goods to the contract."     In the instant case, in view of the terms and conditions of  the  contract embodied in clause 11 of the  Schedule  of acceptance of tender regarding the place of delivery ’F.O.R. Jodhpur’,  the property in the goods passed  immediately  on from  the seller after delivering the goods and loading  the same  in the railway wagons at Jodhpur for  transmission  to the  buyer,  the consignee, without reserving any  right  of disposal.  The  seller  is deemed  to  have  unconditionally appropriated the goods to the contract only under section 26 of  the said Act, the goods remained at seller’s risk  until the property therein is transferred to the buyer. As  stated earlier  that the property in goods has been transferred  to the buyer by the seller by delivery of the goods and loading the  same at Jodhpur in railway wagons. In  this  connection reference may be made to Section 39(1) of said Act.  Consid- ering  the  aforesaid provisions of The Sale of  Goods  Act, 1930  as well as the terms and conditions of  delivery  i.e. ’F.O.R. Jodhpur’ the irresistible conclusion that follows is that the property in the goods together with the risk passed from  the  seller to the buyer i.e. from  consignor  to  the consignee  as soon as the goods were loaded in  the  railway wagons  at Jodhpur as per the terms of  delivery  i.e.F.O.R. Jodhpur. Therefore, the finding of the Trial Court that  the risk throughout ramained with the appellant until the  goods were actually delivered to the Commandant, C.O.D., Kanpur is wholly  wrong and illegal. The further finding of the  Trial Court that the risk was governed with the condition No. 4(1) of the Schedule of Acceptance of Tender and the property  in the  goods i.e. the tents did not pass until the  same  were actually delivered to the Commandant, C.O.D. Kanpur and  the Commandant,  C.O.D.  Kanpur was not liable for loss  of  the tents  during the period of transit by the railways is  also illegal and bad. As stated hereinbefore on considera- 137 tion of the place of delivery as well as the terms of deliv- ery  embodied in clause 11 of the Schedule of Acceptance  of Tender, the property in the goods along with the risk in the goods passed from the appellant to the respondent No. 5 when the goods were delivered and despatched by railway wagons at Jodhpur  i.e.  F.O.R., Jodhpur. The  consignee,  Commandant, C.O.D.,  Kanpur  is therefore, liable for the price  of  224 tents which was deducted by him from the other bills of  the appellant.  The findings of the Trial Court which were  con- firmed  by the Division Bench of the High Court are,  there- fore,  liable  to  be  set  aside  and  the  claim  of   the plaintiff-appellant should be decreed.     As regards the claim of interest on the unpaid price  of 224  tents  amounting  to  Rs.51,912  for  the  period  from 1.1.1969  to  1.12.1972 @ 12% per annum,  the  Courts  below disallowed  the claim on the findings that no claim for  the price  of the goods had been made against the railways,  nor any notice under Section 78-B of the Indian Railways Act had been  served  on respondent Nos. 3 and 4, and the  suit  was barred  by limitation against the Railways. We have  already held hereinbefore that the appellant is entitled to get  not only  the price of the goods but also the  interest  thereon for not making the payment of the price of the goods  within a reasonable time. The interest @ 12% per annum was  claimed by  the plaintiff-appellant on Rs.51,912 being the price  of

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224  tents for the period from 1.1.1969 to 1.12.1972. It  is appropriate  to  refer in this connection  to  the  relevant provisions  of Section 61(2) of the Sale of Goods Act,  1930 (Act 3 of 1930) which reads as follows:               "61(2):  In the absence of a contract  to  the               contrary, the Court may award interest as such               rate  as  it thinks fit on the amount  of  the               price--                         (a)  to the seller in a suit by  him               for the amount of the price--from the date  of               the  tender of the goods or from the  date  on               which the price was payable,                         (b)  to the buyer in a suit  by  him               for  the  refund of the price in a case  of  a               breach  of  the contract on the  part  of  the               seller--from the date on which the payment was               made."     In  the instant case, undoubtedly, it has been found  by the  Courts below that the short delivery of 224  tents  oc- curred  during the transmit of the said goods by  the  rail- ways. It is also an admitted fact that the respondent No. 5, the Commandant, C.O.D. Kanpur deducted the price of the said 224 tents from the other bills of the contractor i.e. the 138 appellant and did not pay the same The appellant has claimed interest in respect of the price of the said goods being not paid to the appellant within a reasonable time from the date of  delivery of the goods i.e. for the period from  1.1.1969 to 1.12.1971. The respondent No. 5 did not dispute the claim of  the appellant in this regard. His only plea was that  in the notices under Section 80 of the Code of Civil  Procedure served on the respondents the claim of interest was not made and  as such the claim of interest could not be allowed.  In the case of B.B. Bose v. National Coal Trading Company,  AIR 1966 (Patna) 346, the plaintiff filed a suit for recovery of price of goods sold to the defendant. Before filing the suit the  plaintiff served a demand notice on the  defendant.  In the  demand notice Ex. 2, no claim for interest was  put  by the plaintiff. It was urged on behalf of the defendant  that there was no stipulation for payment of interest in case the price remained unpaid in the contract and as such the plain- tiff could not claim any interest on the unpaid amount. This was negatived by the High Court, Patna and it was held:               "   ..........  That is, no doubt,  true,  but               the  demand  clearly was for  the  outstanding               balance price of coal which the plaintiff  had               supplied  to the defendant. The  supplies  had               been effected upto the 26th June, 1954, and in               the  normal  course, the price ought  to  have               been paid by the defendant within a reasonable               time  of the deliveries, but the  payment  had               been delayed for nearly three years and plain-               tiff was obliged to institute the present suit               for  recovery  of the price. In  such  circum-               stances,  it was within the discretion of  the               court to award interest to the plaintiff at  a               reasonable  rate  on the amount of  the  price               under  S. 61(2) of the Sale of Goods Act.  The               price was undoubtedly payable when the  notice               of demand (Ex. 2) was served by the  plaintiff               upon  the defendant and there can be no  doubt               that  the rate of 6 per cent per  annum  which               the Court awarded was a reasonable rate."     Similar question cropped up for decision in the case  of M/s  M.K.M.  Moosa Bhai Amin,  Kota v.   Rajasthan   Textile

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Mills,  Bhawanimandi, AIR 1974 Raj. 194=1974 Raj LW  77.  In this  case  the plaintiff filed the suit for  price  of  the goods delivered as well as for interest on the unpaid price. The claim regarding interest was disallowed by the  District Judge  on the ground that there was no stipulation for  pay- ment  of  interest in case the price of the  goods  supplied remained unpaid. It was contended on behalf of the plaintiff that even 139 in  the absence of the contract, the plaintiff was  entitled to  reasonable interest under Section 61(2) of the  Sale  of Goods Act, 1930. The supply had been effected upto September 18, 1962 and in normal case the price of the goods ought  to have been paid by the defendant within a reasonable time  of the deliveries but the payment had been delayed for nearly a year  which  compelled the plaintiff to bring the  suit  for recovery of the price. It has been held that in such circum- stances,  the lower courts should have exercised  discretion in  favour  of  the plaintiff and awarded  interest  on  the amount of the price of the goods under Section 61(2) of  the Sale  of  Goods  Act. The High Court  of  Rajasthan  allowed interest @ 6% per annum which was considered to be a reason- able rate of interest.     On a conspectus of all the decisions referred to  before as  well as the provisions of Section 61(2) of the  Sale  of Goods Act, we are constrained to hold that the plaintiff  is entitled  to  get a decree of interest on the  unpaid  price from  1.1.1969 to 1.12.1971 @ 6% per annum which is  consid- ered to be a reasonable rate of interest, as claimed by  the plaintiff-appellant.     In the premises aforesaid the appeal is allowed and  the judgments  and the decree of the Courts below in so  far  as they  rejected the claims regarding the price of  224  tents and  interest  thereon are set aside.  The  plaintiff-appel- lant’s  claim  for the price of the said goods  as  well  as interest thereon @ 6% per annum for the period from 1.1.1969 to  1.12.1971 is hereby decreed. The appeal is thus  allowed with costs quantified at Rs.4,000. The claim for interest  @ 6%  per  annum  for the period from 1.1.1972  till  date  of payment of amount unpaid is allowed. Y. Lal                                  Appeal allowed. 140