[ISSUE 2] THAT THE DELIVERY OF GOODS WAS EFFECTED

It is humbly submitted before the Hon’ble Supreme Court that it is clearly

mentioned in clause (d) of the agreement1 entered into between NF and SAP that the
delivery of the goods will be as decided by the parties. In clause (c) of the same
agreement2 it is mentioned that the delivery has to be made to the buyer on or before
15th of May, it is also mentioned in (g) of the same3 that the buyer shall be entitled
to deduct a sum of Rs. 1 lakh for every day of the delay as liquidated damages. The
buyers, however, claimed a breach and terminated a contract on the third day itself
when the goods could not be delivered. This would be contrary to the provisions of
(g) of the agreement4. It clearly indicates that buyers are willing to accommodate
some delay that might happen due to certain contingencies and make a deduction of
certain sum of money accordingly. On the basis of the contract, the other party
should not be allowed to terminate the contract before a minimum period of 5 days,
starting 15th of May.

The NF is claiming breach on the grounds that the delivery was not effected. It is
humbly submitted that the delivery was made in accordance to the terms of the
contracts on 17th of May. Section 23 of the Act5 provides that where is a contract for
the sale of unascertained or future goods by description and in a deliverable state are
unconditionally appropriated to the contract, either by the seller with the consent of
the buyer or by the buyer with the consent of the seller, the property in the goods
thereupon passes to the buyer. Such accent may be expressed or implied and may be
given either before or after the appropriation is made. Sub-section (2) of section 23
further provides that where, in pursuance of the contract, the seller delivers the
goods to the buyer or to the carrier or other bailee (whether named to buyer or not)
for the purposes of transmission to the buyer, and does not reserve right of disposal,
he is deemed to have unconditionally appropriated the goods to the contract.6
Moreover, it is mentioned in section 39 of the Sale of Goods Act that where is
pursuance of a contract of sale, the seller is authorised to send goods to the buyer,
delivery of goods to a carrier is prima facie deemed to be a delivery of goods to the

1
Cite memo
2
Cite memo
3
Cite memo
4
Cite memo
5
Act
6
Associated Strips Ltd. v Commissioner of Central Excise, New Delhi, 2002 SCC OnLine CEGAT 2416.
buyer.7 Section 36(3) of the Act8 Where the goods at the time of sale are in the
possession of a third person, there is no delivery by seller to buyer unless and until
such third person acknowledges to the buyer that he holds the goods on his behalf.

In the case of Guljag Industries Limited vs. State of Rajasthan and Anr,9 It was submitted by
the learned counsel for the appellant that under Section 51(2) of the Sale of Goods Act, goods
are deemed to be in transit from the time they are delivered to a carrier or other bailee for
transmission to the buyer until the buyer takes delivery of them from such carrier or other
bailee. In terms of Section 51(3) of the said Act, transit comes to an end when after arrival of
the goods, the carrier or bailee acknowledges to the buyer that he holds goods on his behalf,
i.e., there is an agreement between a carrier and the buyer by which carrier undertakes to hold
goods for consignee not as a carrier but as his agent.10 Hence in the present case
NF wrote to SAP saying “Please send the Goods by courier to this address [address in
Bombay] and asked to use DHL only11 which by the fact proves that the delivery was
complete when the goods were delivered to DHL.
Admittedly in the present case, after appropriation of the goods to the contract they
were delivered to the carrier as per the terms of the contract. Therefore, delivery to
the carrier has to be taken as delivery to the buyer. Section 26 of the Sale of Goods
Act lays down the general principle that risk prima facie passes with property unless
otherwise agreed. It therefore shows that even though the general rule is that the
goods remain at the seller’s risk until the property therein is transferred to the buyer,
the goods are at buyer’s risk whether delivery has been made or not, there can be a
contract to the contrary.12 The Act of NF in choosing a very specific company for
being responsible for the delivery shows that for some reasons NF trusted DHL with
their goods and wanted that DHL be solely responsible for the delivery.

Although, goods that were sent by SAP to DHL via courier never actually reached
the buyers but delivery of the goods had been effected on 17th of May as per the
terms of the contract and the provisions of Sale of Goods Act.

In

7
AIR 1966 Patna 346
8
Sale of Goods Act, 1930
9
2003 129 STC 3 Raj.
10
MANU/RH/0822/2002.
11
Cite memo.
12
Associated Strips Ltd. v Commissioner of Central Excise, New Delhi, 2002 SCC OnLine CEGAT 2416.
In The Bengal Immunity Company Limited vs. The State of Bihar and Ors,13
physical delivery of goods, that under section 39(1) of the Sale of Goods Act, 1930
(Act III of 1930) the common carrier is the agent of the purchaser, and that therefore
delivery of the goods to the railway authorities in Bengal was actual delivery
thereof to the purchaser in Bengal.

In A.M. Mohd. Ishaok v. State of Madras,14 Division Bench of Madras High Court
expressed the view while interpreting Section 39 of the Act and held that whenever
actual delivery of goods is made in terms of contractual obligation, there shall be
presumption with regard to delivery of goods to the buyer. While considering
Section 39 (1J of the Sales of Goods Act, Madras High Court considered the
definition of sale given in BENJAMIN'S Sale of Goods. Their lordships held that
the carrier constituted as an agent of the buyer for accepting delivery of goods on
his behalf.15 The delivery, as it is submitted was completed on 17th May, and
therefore now the goods were held by DHL on behalf of NF.

It is therefore argued that the delivery of the goods in fact had been made to the
plaintiffs on 17th of May itself. Other terms of the contract had also been complied
with, the goods were delivered to the service provider DHL as per wishes of the
other party.

13
1988 AIR 1531.
14
AIR 1959 Mad 502.
15
Guljag Industries Limited vs. State of Rajasthan and Anr, 2003 129 STC 3 Raj.