Raman bought the car of Rupali. But the car remained in garage of Rupali. The price remained unpaid. The car was destroyed by a fire but there was no fault of Rupali in this. Rupali claims money of the car. Examine the v

CS Executive · Economic, Business and Commercial Laws · PYQS · December 2023
Raman bought the car of Rupali. But the car remained in garage of Rupali. The price remained unpaid. The car was destroyed by a fire but there was no fault of Rupali in this. Rupali claims money of the car. Examine the validity of her claim as per the Sale of Goods Act, 1930.

Answer & Explanation:

There may be two alternative answers of this question Alternative Answer 1: When it is presumed that ownership has passed on to the Raman and rule of res perit domino is applicable Section 26 of Sale of Goods Act, 1930 discusses the passing of risk. The general rule is that goods remain at the seller's risk until the ownership is transferred to the buyer. After the ownership has passed to the buyer, the goods are at the buyer's risk whether the delivery has been made or not. For example: A buys goods of B and property has passed from B to A; but the goods remain in B's warehouse and the price is unpaid. Before delivery, B's warehouse is burnt down for no fault of B and goods are destroyed. A must pay B the price of the goods; as he was the owner. The rule is res perit domino- the loss falls on the owner. So, payment or delivery of goods is not a criterion to determine who will bear the loss. If there is no other agreement expressly between buyer and seller, and delivery is not delayed due to fault of Rupali in this case, then the rule of res perit domino prevails. Then Rupali will succeed in her claim. Alternative Answer 2: Where according to agreement between the buyer and seller, risk and ownership passes at different point of time or when delivery is delayed due to fault of either party, then the rule of res perit domino does not apply. But the parties may agree that risk will pass at the time different from the time when ownership is passed. For example, the seller may agree to be responsible for the goods even after the ownership is passed to the buyer or vice versa. In the case of Consolidated Coffee Ltd. v. Coffee Board, (1980) 3 SCC 358 , one of the terms adopted by coffee board for auction of coffee was the property in the coffee knocked down to a bidder would not pass until the payment of price and in the meantime the goods would remain with the seller but at the risk of the buyer. In such cases, risk and property passes on at different stages. In the case of Multanmal Champalal v. Shah Co., AIR 1970 Mysore 106 , goods were despatched by the seller from Bombay to Bellary through a public carrier. According to the terms of the contract, the goods were to remain the property of the seller till the price was paid though the risk was to pass to the buyer when they were delivered to public carrier for despatch. When the goods were subsequently lost before the payment of the price (and the consequent to the passing of the property to the buyer), the Court held that the loss was to be borne by the buyer. It was further held in the same that the buyer was at fault in delaying delivery unreasonably and therefore on that ground also he was liable for the loss, because such loss would not have arisen but for such delay. Thus, where delivery has been delayed through the fault of either the buyer or the seller, in such a case, the goods are at the risk of the party at fault as regards any loss which might not have occurred but for such fault. Rupali's claim may fail on aforesaid basis.

Topics: Sale of Goods Act, 1930

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