CASE:

JSW Steel Ltd.

V.
AI Ghuriar Iron and Steel
LLC.
(2014 SCC Online Bom 895 )
FACTS OF THE CASE:
 JSW Steel Ltd. AI Ghuriar Iron and Steel LLC was a case decided under
Arbitration Petition No. 398 of 2014 in the High Court of Bombay .It is
a case under Sales of Good Act, 1930.

 In this case the Petitioner has challenged the money awards of the
Arbitral Tribunal date 28 May, 2013.

 The petitioner JSW Steel LTD was to supply certain specified goods
i.e. Prime Hot Rolls and Steel Coils. The respondent AI Ghuriar Iron
Steel LLC. had paid the price of goods and the goods were supposed to
be shipped from Bombay to Dubai.

 The goods were to be supplied in accordance with their description

given in the contract, these specifications were an important part of
the contract as it was claimed by the respondent that unless the goods
were of the correct specification, they could not be loaded on the
mandle and it would have been damaged if the coils were not of the
required specification.
 The petitioner sent the Mills Test Certificate to the respondent the Mills Test
Certificate when the goods were shipped; this was received by the respondent
a day before the shipment of the goods on 16 th September, 2008.

 According to the respondent the certificate showed that the goods did not
conform to the specification as to weight and the OD stipulated in the contract
and this was informed to the respondent immediately.

 The goods arrived at the destined port on 16 th September, 2008 and remained
there for some time, they were granted permission for the clearance only on 9 th
November, 2008. Thus they could be examined the goods only after they were
delivered to the respondent’s plant on 14 th November, 2008.

 Upon inspecting the respondent found out that the goods did not conform with
the specification of the ID and were in damaged condition as they were bent
and cut. This was informed to the petitioner through an email with the
inspection report and photographs of the damaged coils. The respondent
couldn’t have utilized the goods so he rejected the goods and called upon the
petitioner to remove the same and return the consideration paid. The
petitioner failed to do the needful hence the respondent sold the goods and
claimed the price paid for the good together with interest and storage charges
and gave credit for the amount that was received upon the sale to the
petitioner.
RULES APPLICABLE:
Section 15 of the Sale of Goods Act, 1930 :
There is a contract for sale of goods shall correspond with the description, there is an implied
condition that the goods shall correspond with the description; and if the sale is by sample as well
as description, it is not sufficient that the bulk of the goods corresponds with the sample if the
goods do not also correspond with the description.
Section 41 of the sale of goods act buyer's right of examining the goods:
(1)Where goods are delivered to the buyer which he has not previously examined, he is not deemed
to have accepted them unless and until he has had a reasonable opportunity to examining them for
the purpose of ascertaining whether they are in conformity with the contract.
(2)Unless otherwise agreed, where the seller tenders delivery of goods to the buyer, he is bound, on
request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of
ascertaining whether they are in conformity with the contract.
Section 42 of the Sale of Goods Act :
He buyer is deemed to have accepted the goods when he intimates to the seller that he has
accepted them, or when the goods have been delivered to him and he does any act in relation to
them which is inconsistent with the ownership of the seller, or when, after the lapse of a
reasonable time, he retains the goods without intimating to the seller that he has rejected them
SIMILAR CASES:
 Bowes v. Shand
That the contract had not been complied with; that its words must be
construed in their plain and ordinary sense, that evidence of any usage in
the particular trade must, to affect their meaning, be very clear and
consistent, and such evidence not having been given in this case the
Plaintiffs could not recover on the contract.
 Wallis V. Pratt
Buyer purchased seeds described as “English sainfoin seeds.”The seeds
supplied by the seller were of an inferior and a different variety known as
“Gaint sainfoin seeds.”At the time of supply of seeds the buyer could not
make out the defect as the two varieties were indistinguishable. The
defect could only known after the seeds had been sown and the crop was
ready. The buyer could claim compensation only. There was no chance of
avoiding the contract and rejecting the goods.
 CONCLUSION:
 It can be thus concluded that there was a breach of contract as they failed to
follow the description of the goods as agreed in the contract and due to this
the respondent had the right to return the goods delivered to him
 While regarding clause 4.2(b) and 4(1) of the contract the respondent as the
buyer had the right to examine the goods upon a reasonable opportunity
provided to the respondent to ascertain whether they were in conformity
with the contract, more so when the contract was a sale by description
carrying the statutory implied condition that the goods would conform with
the specification. The respondent cannot be deprived of this statutory right.
 Hence it can be concluded that the rejection of goods by the respondent is
valid and the petitioner is thus bound to repay the balance amount paid by
the respondent for the purchase of good.
 It also tells about the rights of the buyer as well as the seller and the time
that are reasonable for all kind of communication between the parties. It was
an important case in Indian Scenario for further development and
transparency of the Act Sales and Goods, 1930.