The laws relating to contract of sale of goods in contained in The Sale of
Goods Act, 1930. Earlier, it was a part of Indian Contract Act, 1872. But over
the years the conditions relating to trade and commerce changed tremendously and
therefore it was needed to modify the then existing act. So, in the year 1930,
The Sales of Goods Act was implemented. It is mainly based on the (English)
sales of Goods Act, 1893. The act contains 66 Sections and has a wide scope. It
was the Section 65 of this act which repealed the Indian Contract Act.
The act contains provisions regarding formation of contract of sale, subject
matter of sale, price, conditions and warranties, transfer of property as
between buyer and seller, transfer of title, performance, rights and duties of
buyer and seller, and suit for breach of contract.
Chapter IV of the act provides for performance of the contract and Section 32 of
the said chapter deals with the conditions of payment and delivery. It states
"Payment and delivery are concurrent conditions.- Unless otherwise agreed,
delivery of the goods and payment of the price are concurrent conditions, that
is to say, the seller shall be ready and willing to give possession of the goods
to the buyer in exchange for the price, and the buyer shall be ready and willing
to pay the price in exchange for possession of the goods". This is an essential
condition for the performance of the contract of sale unless any other clause is
provided in the contract.
This is also based on the fact that if the contract is to perform reciprocal
promises simultaneously, one party need not fulfill his promise if the other one
is not doing so. If this condition is not fulfilled, the contract cannot be
performed. Similarly, Section 33 to 44 deals with the provisions of delivery
including the mode of delivery, effect of part delivery, delivery of wrong
quantity, risks where goods are delivered at wrong place etc.
This was the point of focus in the case of Sujanmal v. Radhey Shyam Agrawal
This project will explain in detail the mentioned case along with the
background, issues in the case and judgement by the court. It will also analyze
the efficacy of judgement in resolving the issue and try to find out its
substantial contribution of the law of contracts.
Background Of The Case
Sujanmal and Manmal (father of Sujanmal), the appellant, was the proprietor of
the firm M/s Dhoolchand Manmal which was a firm of Hindu Undivided Family in
Chhoti Sadri. On 27/12/63, he entered into a contract with proprietor Radhey
Shyam Agrawal (defendant), the owner of Hindu Undivided Family firm M/s
Jainarayan Radhey Shyam, to purchase 200 tins of Rasada Vanaspati @ Rs.41 per
tin. The contract neither mentioned any time period for the delivery of tins nor
contained the provisions as to the time of payment. On 02/02/64, the defendant
sent a notice to the plaintiff asking for the payment in advance.
The price of Rasada Vanaspati was controlled by the Central Government. On
13/02/64, the government issued a notification to change the price of the
commodity with effect from 14/02/64. The plaintiff then sued the defendants,
Radhey Shyam and Jainarayan (father of Radhey Shyam) in the Munsif Court, Chhoti
Sadri for breach of contract and claimed nominal damages of Rs. 500, loss on
profit amounting to Rs. 870 and Rs. 1.25 in giving notice.
It was contended that Radhey Shyam was the sole proprietor of the firm and
Jainarayan had nothing to do with it. It was also contended by the defendants
that advance payment was already stipulated in the contract and on 26/01/64, the
plaintiff had himself came to him to cancel the deal. However, there was no
evidence to prove it. It was also contended that as the notification for change
of price came on 13/02/64, there was no loss of profit to the plaintiff for the
alleged breach of contract.
The trial court decreed the case in favor of the plaintiff. It ordered the
defendant to pay Rs. 870 to the plaintiff but disallowed the claim for nominal
damages. It contended that the contract was breached on 15/02/64.
The defendants challenged the decree in the District Court. Here the court
relying on the pleadings of plaintiff declared that the contract was breached
not on 15/02/64 but on 02/02/64 when the defendant had sent the letter asking
for advance payment. As the notification for change of price had come on
13/02/64, the plaintiff had not suffered any loss due to breach of contract.
Therefore, the plea to pay the loss of profit was dismissed by the Court.
The plaintiff then reached the High Court of Rajasthan to claim the damages.
Issues Of The Case
After going through the details of the case, Jain J. observed the following
issues in the case:
- Whether the defendants committed breach of contract and
- If the breach had been committed, what is the date of such breach?
The judge referred to following Sections of the Sales of Goods Act, 1930 to
understand the case.
S.11 - "Stipulation as to time.- Unless a different intention appears from the
terms of the contract, stipulations as to time of payment are not deemed to be
of the essence of the contract of sale. Whether any other stipulation as to time
is of the essence of contract or not depends on the terms of contract".
S.31 - "Duties of seller and buyer.- It is the duty of the seller to deliver the
goods and of the buyer to accept and pay for them, in accordance with the terms
of contract of sale".
S.32 - "Payment and delivery are concurrent conditions.- Unless otherwise
agreed, delivery of the goods and payment of the price are concurrent
conditions, that is to say, the seller shall be ready and willing to give
possession of the goods to the buyer in exchange for the price, and the buyer
shall be ready and willing to pay the price in exchange for possession of the
S.33 - "Delivery.- Delivery of goods sold may be made by doing anything which
the parties agree shall be treated as delivery or which has the effect of
putting the goods in the possession of the buyer or of any person authorized to
hold them on his behalf".
S.35 - "Buyer to apply for delivery.- Apart from any express contract, the
seller of goods is not bound to deliver them until the buyer applies for
S.36 - "Rules as to delivery.- (1)………..
(2) Where under the contract of sale the seller is bound to sell the goods to
the buyer, but no time for sending them is fixed, the seller is bound to send
them within a reasonable time".
S.57 - "Damages for non-delivery.- Where the buyer wrongfully neglects or
refuses to accept and pay for the goods to the buyer, the buyer may sue the
seller for damages for non-delivery".
The court found that the contract of sale between Sujanmal and Radhey Shyam did
not have any clause regarding time of delivery and payment. Therefore, the court
referred to Section 36(2) of the Sales of Goods Act and declared that the
delivery was to be made in a reasonable time. The reasonable time here depends
on the facts of the case. Before estimating that reasonable time, the court
first the time of payment.
Although Radhey Shyam contended that the payment was to be made in advance but
he had no evidence to support the claim. Therefore, this contention of the
respondent was not accepted. However, referring to the provisions of law in
contract of sale, the court said that the contract of sale involves reciprocal
promises. In case, there is not any provision with regards to the time of
performing such promise, the promises are to be performed simultaneously and
"both parties should be ready and willing to perform his promise before calling
upon other to perform his".
The court cited the case of Firm Birdhi Chand v. Ramdeo
where it was held
that "In a contract of sale of goods unless otherwise agreed, delivery of goods
and payment of price are concurrent conditions and where the plaintiff in a suit
of breach of contract happens to be a seller, he must allege and prove that he
was ready and willing to sell and deliver the goods". On the basis of this, it
was held by the court that where the buyer happens to be a plaintiff in a suit
of breach of contract, he must prove that he applied for delivery and was ready
and willing to pay for the goods.
In the present case, the defendant sent the letter to the plaintiff asking for
the payment to be made in advance on 02/02/64. But the plaintiff accepted before
the court that he did not reply to the letter either in writing or orally. The
court said accepted that it was not justified in the part of the defendant to
ask for the payment in advance but at the same time it was necessary for the
plaintiff to reply that in absence of any contract for the same he will not make
advance payment but he is ready and willing to pay at the time of delivery.
By not doing so, "the plaintiffs did not show readiness and willingness to pay
the price in accordance with the provisions of Section 32 of the act". It was
also found that the plaintiffs had not applied for delivery which is a necessary
condition as per Section 35 of the act. Relying on these facts, the court held
that the plaintiffs neither showed readiness and willingness to pay nor applied
for delivery, therefore, they cannot hold defendants liable for breach of
The court further referred to the decision of trial court which had found the
date of breach to be 15/02/64 and found no basis for this as the cause of action
arose on 02/02/64. Since there was no increase in price from the date of
formation of contract and the cause of action, there is no loss of profit to the
After finding that there was no breach of contract by the defendant and no loss
of profit to the plaintiff, the court moved forward to determine the reasonable
time for performance of contract. The judge took into consideration the facts of
the case. Depending on the availability of stocks and distance between Chhoti
Sadri (Place of delivery) and Neemuch (Defendants' firm), the judge found one
moth to be the reasonable time for performance of contract.
The appeal was thus dismissed.
The court has accurately applied all the relevant provisions in the present
This can be analyzed by dividing it into three different parts:
- Reasonable time for performance of contract.
Though this issue was not raised by the parties to the contract, the court
took Suo Moto to determine the time as to the performance. The court
depended upon the facts of the case for this. The distance between the
defendant's firm and place of delivery was 12 miles and the stock was
already available. So, the reasonable time was found to be 1 month.
Analysis: Although ignored, but it is a very crucial point as when the
contract is not performed within a reasonable time, it might frustrate the
whole objective of the contract. If the defendant had not asked for payment
in advance, the contract might have been performed after that day. As the
price of Rasada Vanaspati increased with effect from 14/02/64, the plaintiff
would have suffered huge losses. Therefore, the court took justified step in
determining the reasonable time.
- Breach of Contract
The court found defendant not guilty for the breach. As it was the plaintiff
who did not show their readiness and willingness to pay and neither applied
Analysis: Ordinarily, a contract is breached when it fulfills one of the
- Non-payment- When the buyer denies paying for goods after the
- Violation of Condition- If the contract is based on certain
condition/conditions and that condition is breached, the contract is
said to be breached.
- Violation of Warranty- Warranty is a stipulation collateral to the
main purpose of contract. If the warranty is breached, the contract is
deemed to be breached.
- Installment deliveries- If the delivery is to be made in installment
and the buyer refuses to pay for a certain in tustallment or all the
installments or the seller makes defective delivery in one or more
installments, the contract is breached.
- Non-acceptance of good- When the buyer refuses or neglects the
delivery of goods, the contract is breached on his part.
- Non-delivery of good- If the seller does not deliver the goods to
the buyer after entering into a contract, the contract is breached on
None of the above conditions is present in the concerned case, therefore it
cannot be said that the contract was breached by the defendant. However, if
we apply the last condition, i.e., non-delivery of good, it seems that the
contract was breached on the part of the seller. But this clause is to be
read with Section 32 of the act which says that "Payment and delivery are
concurrent conditions". Applying this to the case, it is clearly evident
that the buyer was not ready to pay.
Hence, the court was justified in saying that the contract of sale was not
breached and the reasoning was also correct. However, the defendants were
nonetheless guilty of asking payment in advance. As per the facts of the
case, there was no clause for amendment present. The defendants had no right
to escape the contract when the plaintiff did not accept the amendment.
- Payment and Delivery are concurrent conditions
The court referred to Section 32 of the act and held that the plaintiffs did
not show readiness and willingness to pay.
Analysis: The plaintiffs can argue against this point by saying that they
were ready and willing to pay as if not, they would never have been entered
into the contract of sale. The point is nevertheless correct but after
receiving the letter asking for payment in advance, they were bound to
expressly show their readiness and willingness.
Had the letter for advance payment not been sent to them, it was not
required of them to show express willingness as it was already implied.
However, they could still not blame the defendants for breach because they
had not applied for delivery which is a necessary condition as per Section
The case of Sujanmal v. Radheyshyam Agrawal
raises a very important
question regarding the payment and delivery. It is important to note that there
were various factors influencing this case. The court however ruled in favor of
the defendant and held that "Payment and Delivery are concurrent conditions".
Along with this, it highlighted two more important aspects as to breach of
contract and reasonable time for performance. Although these seems very simple
and common phenomena but were in dispute in the concerned case.
The buyer and seller entered into the contract but no time for delivery and
payment was fixed. Therefore, in the absence of any clause to the contrary, the
payment and delivery were to be made concurrently and the contract was to be
performed in a reasonable time of 1 month. The seller was ready to make the
delivery and asked for advance payment. It is to be noted that there was no
clause for advance payment in the original contract.
However, had the buyer informed the seller that he was willing to make the
payment only at the time of delivery, he would have been treated as the
aggrieved party. But merely asking for advance payment does not make the seller
guilty as the buyer was silent throughout. Therefore, the court was justified in
ruling that there was no breach of contract on the part of the seller.
- The Sale of Goods Act, 1949, § 32, No. 3, Acts of Parliament, 1930
- Indian Contract Act, 1872 § 3, No. 9, Acts of Parliament, 1872 (India).
- Sujanmal v. Radhey Shyam Agrawal, AIR 1976 Raj 98.
- Firm Birdhi Chand v. Ramdeo, 1970 RLW 148=ILR 1969 19 Raj. 481.
- Jai Mishra, Breach of Contract under Sale of Goods Act,1930, Legal
Services India (Mar. 25, 2022, 12:22 PM), https://legalserviceindia.com/legal/article-4303-breach-of-cpntract-under-sale-of-goods-act-1930.html.