Team Code:

TC-31

Jamia Millia Islamia

In The Hon’ble District Court of Saket

Filed under Section 20 of Code of Civil Procedure, 1908

Civil Suit No. ___ Of 2020

In the matter of

Killiance Mio & Co.............................................................................Plaintiff

Versus

Drazon Deliveries Ltd. & Anr......................................................Defendants

Memorandum on Behalf of Defendants,

Counsels for the Defendants

Table of Contents

Referred to in

List Of Abbreviations............................................................................................

Index Of Authorities..............................................................................................

■ Table Of Cases..................................................................................................................6

■ Statutes Referred..........................................................................................................10

■ Books Referred...............................................................................................................10

■ Journals and Reporters................................................................................................ 11

Statement Of Jurisdiction..................................................................................12

Statement Of Facts..............................................................................................

13

Statement Of Issues..... ........................................................................................

16

Summary Of Arguments......................................................................................

17

Arguments Advanced..........................................................................................19

Issue 1. Whether or not there was a valid contract?.............................................19

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1.1] Under The Indian Contract Act, 1872............................................................20

1.2] Under The Sale of Goods Act,

1930...............................................................21

Issue 2. Whether there was fraud on part of DD or Not?.....................................24

2.1] No ‘active concealment’ of the fact................................................................24

2.2] Exception to § 19 would apply.......................................................................25

2.3] No fraudulent misrepresentation....................................................................25

Issue 3. Whether there was a breach of contract or not?..................................27

3.1] Acceptance of ‘NAM02’ by

KMC..................................................................27

3.2] Fraud by servant of AK Coating...................................................................28

Issue 4. Whether or Not Killiance Mio & Co. is entitled to get purchase price and

damages for Breach and Negligence?..............................................................30

4.1] Caveat Emptor................................................................................................31

4.2] Fraud by servant.............................................................................................32

4.3] Breach of an implied warranty by the seller itself..........................................32

Prayer....................................................................................................................

34

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List of Abbreviations

¶ Paragraph

& And

§ Section

§§ Sections

Art. Article

AIR All India Reporter

C.P.C. Code of Civil Procedure

DD Drazon Deliveries Ltd.

Ed. Edition

Hon’ble Honorable

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H.C. High Court

ibid Ibidum

IPC Indian Penal Code

IEA Indian Evidence Act

KMC Killiance Mio & Co.

MANU Manupatra

No. Number

Pg. Page

Ors. Others

SIM Subscriber Identity Module

supra Superimposed

SCR Supreme Court Reporter

SCC Supreme Court Cases

w.e.f. with effective from

viz. namely

v. versus

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Index Of Authorities

Table Of Cases

Referred to in

1. Abdulali Moosabhoy v Gokaldas Lalji, AIR 1927 Sind 49..............................................30

2. Andhra Bank v Ananmath, AIR 1991 AP

245..................................................................21

3. Armagas v Mundogas, [1986] 1 AC 717..........................................................................29

4. AV Joseph v R Shew Bux, AIR 1918 PC

149....................................................................30

5. Balraj Chibber v NOIDA, 1955 All LJ 1513: (1996) 27 ALR 10...................................25

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6. Banarsi Das & Co. v Lulla Mal, AIR 1915 All 295.........................................................30

7. Brahma Deo Narain Singh v Members of Notified Area Committee, AIR 1965 Pat

179....................................................................................................................................30

8. Chidambara v P.S. Renga, AIR 1965 SC 193: (1966) 1 SCR 168..................................19

9. Coffee Board, Karnataka v Commissioner of Commercial Taxes, AIR 1988 S.C.

1487..................................................................................................................................23

10. Conrad Dia v Joseph Dias, 1996 2 Mah LJ 208..............................................................19

11. Fanindra Narain Roy v Kacchemen Bibi v, AIR 1918 Cal 816.....................................21

12. Fazaladdin Mandal v Panchanam Das, AIR 1957 Cal 92..............................................21

13. Firm Bhagwandas Shobhalal Jain v State of Madhya Pradesh, AIR 1966 MP 95........30

14. Food Corporation of India v Laxmi Cattle Feed Industries, AIR 2006 SC 1452...........30

15. Gambhirmull Mahabir Prasad v Indian Bank Ltd. AIR 1963 Cal 163............................30

16. GL Kilikar v State of Kerela, AIR 1971 SC 1196............................................................30

17. Hardy & Co. v Hillerns & Fowler, (1923) 2 KB 490.......................................................28

18. Hollandia Pinmen v H. Openheimer, AIR 1924 Ran 356................................................30

19. Jamshed Karimuddin Musalman v Kunjilal Harsukh Kalar, AIR 1938 Nag 530...........30

20. John Minar Apcar v Louis Caird Malchus, 1938 SCC Online Cal 62.............................25

21. Kailash Sharma v Patna Municipal Corpn., AIR 2009 Pat. 10.......................................28

22. Karnataka Bank Ltd. v State of A.P. & Ors, (2008) 2 SCC 254......................................20

23. Khimji Vasanji v Narsi Dhanji, (1915) 39 Bom 682, AIR 1915 Bom 300......................30

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24. Knawar Lal Thapar v Raja Bahadur Kamakhya Narayan Singh, AIR 1957 Pat

350....................................................................................................................................30

25. Koorangong Investment P. Ltd. v Richardson & Wrench Ltd., (1981) 3 All ER 65:

(1982) AC 462 (PC)..........................................................................................................29

26. Lloyd v Grace, Smith & Co., [1912] AC 716...................................................................29

27. M/s Jain Mills & Electrical Source v State of Orissa, AIR 1991 Ori. 117......................28

28. Mahomed Rowther v. Dalooram Jayanarayan, [1918] 47 I.C. 555.................................28

29. Mithan Lal-Inder Nanin v Suraj Parshad-Madan Gopal, 1931 SCC OnLine Lah 369 :

AIR 1932 Lah 52..............................................................................................................28

30. Mohammad Ismail Khan v Hasan Ali Khan, AIR 1923 All 220......................................30

31. Mohta Alloy & Steel Works v Mohta Finance & Leasing Co Ltd., 1987 AIHC 1327

(Del)..................................................................................................................................19

32. Municipal Committee v Harda Electric Supply Co. Pvt. Ltd., AIR 1964 MP 101.........30

33. Naresh K Agarwala and Co. v Canbank Financial Services Ltd., AIR 2010 SC

2722,(2010) SCC 178.......................................................................................................30

34. Nasiram Bibi v Mohd Hasan, (1996) All LJ 1648...........................................................25

35. Niaz Ahmad Khan v Parshotam Chandra, I.L.R 53 All. 374 (1930)...............................26

36. Oriental Insurance Co. Ltd. v Gowrama, AIR 1994 Kant. 29.........................................25

37. P K Abdullah v State of Kerela, AIR 2002 Ker 108.........................................................30

38. P. Sayamala v R. Gopinathan, (2004) 1 CTC 117...........................................................21

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39. Pandurang Balaji v Nagu bin Dadu, (1906) 30 Bom 598................................................30

40. Prakashwati Jain v Punjab State Industrial Development Corpn., AIR 2012 P&H

13......................................................................................................................................21

41. Ramalinga Mudaliar v SR Muthuswami Iyyer & Sons., (1926) 50 Mad 94, AIR 1927

Mad 99..............................................................................................................................30

42. Ramalingam Chettiyar v Gokuldas Madvaji & Co., AIR 1926 Mad 1021......................30

43. Rampratap Mahadeo Prasad v Sasana Sugar Works Ltd., AIR 1964 Pat 250................30

44. Randhir Singh Chandlok v Vipin Bansal, (2006) 135 DLT 56........................................19

45. Shoshi Mohun Pal Chowdhary v Nobo Krishto Poddar, ILR (1874) 5 Cal

801..............................................................................................................................24, 25

46. Standard Chartered Bank v. Andhra Bank Financial Services Ltd.,(2016) 1 SCC 207 :

2015 SCC Online SC 766.................................................................................................23

47. State Bank of India v Shayama Devi, AIR 1978 SC

1236................................................29

48. State of Andhra Pradesh v Kone Elevators India Ltd., (2005) 3 SCC 389......................23

49. State of Tripura v Bina Choudhary, AIR 2007 SC 2169..................................................30

50. State of Uttaranchal v Khurana Brothers, JT 2010 (12) SC 323: (2010) 11 SCALE

348....................................................................................................................................21

51. T.N. Tea Plantation Corp. Ltd. Ltd. v Srinivasa Timbers, AIR 1999 Mad 111...............19

52. Tan Ah Boon v State of Johore, AIR 1936 PC 236..........................................................30

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53. Tarsem Singh v Sukhminder Singh, AIR 1998 SC 1400..................................................19

54. U.P. State Sugar Corpn. Karamchari Assn. v State of U.P., 1994 All LJ 937.................25

55. Union of India v Kuthari Trading Co. Ltd., AIR 1969 Assam 84....................................30

56. Union of India v Vasudeo Agarwal, AIR 1960 Pat 87.....................................................30

57. Vishnu Sugar Mills v Food Corp. of India, AIR 1987 Pat 22...........................................23

58. Weeks v Tybald, 1605 Noy 11: 74 ER 982.......................................................................19

Statutes Referred

1. Code of Civil Procedure, 1908

2. Specific Relief Act, 1963

3. The General Clauses Act, 1897

4. The Indian Contract Act, 1860

5. The Sale of Goods Act, 1930

Books Referred

1. Avtar Singh, Contract and Specific Relief (11th ed. 2013)

2. Dr. R.K. Bangia, Contract-I (6th ed. 2009)

3. Dr. R.K. Bangia, Contract-II (6th ed. 2009)

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4. Dr. R.K. Bangia, Law of Torts (23rd ed., 2015)

5. P.S.A. Pillai, Law of Tort (9th ed., 2010)

6. Pollock & Mulla, The Indian Contract and Specific Relief Acts (14th ed. 2016)

7. Pollock and Mulla, The Indian Contract and Specific Relief Acts (14th ed. 2016, vol.

2)

8. Ramaswamy Iyyer’s, The Law of Torts (10th ed., 2007)

9. Ratanlal & Dhirajlal, The Law of Torts (26th ed., 2015)

10. S.C. Sarkar & Prabhas C. Sarkar, Sarkar’s The Code of Civil Procedure (11th ed.,

2011, vol. 1)

11. Winfield and Jolowicz on Tort (19th ed., 2015)

Journals & Reporters

1. All India Reporter

2. Indiankaanoon.org

3. Lexis Nexis Academica

4. Lexis Nexis Legal

5. Manupatra Online Resources

6. SCC OnLine

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Statement Of Jurisdiction

The Respondents humbly submits this Memorandum filed by the Counsel before the Hon’ble

Court of Saket. This Hon’ble Court has the jurisdiction to hear this case § 20 of the Code of

Civil Procedure, 1908.

Section 20:

Ҥ 20. Other suits to be instituted where defendants reside or cause of action arises-

Subject to the limitations aforesaid, every suit shall be instituted in Court within the local

limits of whose jurisdiction—

(a) the defendant, or each of the defendants where there are more than one, at the time of the

commencement of the suit, actually and voluntarily resides, or carries on business, or

personally works for gain; or

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(b) any of the defendants, where there are more than one, at the time of the commencement of

the suit actually and voluntarily resides, or carries on business, or personally works for gain,

provided that in such case either the leave of the Court is given, or the defendants who do not

reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such

institution; or

(c) the cause of action, wholly or in part, arises.”

Statement Of Facts

About the Parties

1. Killiance Mio & Co. (‘Mio’) is headquartered in Senarashtra, Indiana and is the fourth

largest telecom operator in Indiana with 98.70 million subscribers. It is managed by Mr.

Bhukesh Rambani. Mio resolved to win customers by providing them free internet access and

voice calls for a period of six months from 1st October 2020 to 31st March 2021. Mr. Rambani

wanted to acquire a new machine called as NAM02 that would further reduce Mio’s costs of

production.

2. Drazon Deliveries ran a freight business that distributed many of Mio’s products and the

products of Mio’s other rival companies. The news which said the Drazon Delivery had

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acquired NAM02 came as a surprise to Mr. Rambani, as he had believed that all of the

NAM02’s in existence was owned only by Mio’s competitors.

3. AK Coating Ltd. (AK Coating), a contractor was indulged in repair work on the premises

of Drazon Deliveries. In the present matter, it was given a job to repair the NAM02 which

was at to be delivered to ‘Mio’ from Drazon Deliveries pursuant to the agreement made

between them.

About ‘NAM02’ Machine

4. ‘NAM02’ in the telecommunication industry was very expensive owing to its exclusivity,

efficiency and cost-cutting advantages. The machine reduces significantly the quantity of raw

materials, labour and energy required to manufacture Subscriber Identity Module (SIM)

could produce thousands of them in one go. In the present matter, there were only three

NAM02 in existence in this world and Mr. Rambani that all of them were owned by the rivals

of Mio’s competitors.

Agreement to Sell

5. Mr. Rambani opened negotiations with Mr. Badshah Khan to buy the NAM02 owned by

their company. On 1st November 2020, Drazon Deliveries agreed to sell its NAM02 to Mio

for 4 Million INR although Mr. Rambani was aware of the considerable amount and 4

Million was far less amount to buy NAM02. It was orally conveyed that the buyer i.e. Mio

must exercise due diligence before the sale which would have given way to an elaborate

procedure. But, Mr. Rambani made no further enquiry as to how Drazon Deliveries came in

possession of NAM02.

6. The negotiations were concluded by 5th November 2020 and it was agreed between the

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parties that the machine has to be delivered to Mio on 20th November 2020. Till then the

machine was to be kept in the basement of Drazon Deliveries wherein some repair work was

going on. The purchase price was to be paid on the delivery date itself.

Malfunctioning of ‘NAM02’

7. The delivery and the payment were done pursuant to the contract between the parties. Later

on, the machine was put to use and it was discovered that the machine has not been working

properly due to the deposition of moisture in it. On 18th November 2020, one of the

employees of AK Coating Ltd., Mr. Barnab Boswami, caused a water leak which affected the

NAM02. He further did not inform his employer which malfunctioned the NAM02 despite

the fact that he was aware that the machine was very costly and was to be delivered to Mio as

per the contract.

8. On 25th November 2020, Mio tried to repair the machine by involving its team of

technicians in order to make the machine functional but due to a spark the machine got

irreparably damaged. Killiance Mio brought proceedings in the court of law against Drazon

Deliveries Ltd. seeking the purchase price and damages for breach of a contract. They also

made AK Coating Ltd. a party to the suit in respect of their act of negligence which damaged

the machine.

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Statement Of Issues

Issue 1

Whether or not there was a valid contract?

Issue 2

Whether there was fraud on part of DD or Not?

Issue 3

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Whether there was a breach of contract or not?

Issue 4

Whether or Not Killiance Mio & Co. is entitled to get purchase price and damages for Breach

and Negligence?

Summary Of Arguments

Issue 1] Whether or not there was a valid contract?

In the present matter, there existed valid of sale between the Killiance Mio (KMC) and the

Drazon Deliveries (DD). The explanation to this argument has been furnished in arguments

advanced, issue 2 under the several sub- issues. The principles of contract of sale have been

discussed with the facts of this case which ultimately proves that there existed a valid

contract. The contract was valid from the beginning under:

i. The Indian Contract Act, 1872 [1.1]

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ii. The Sale of Goods Act, 1930 [1.2]

Issue 2. Whether there was fraud on part of DD or Not?

It is humbly submitted that there was no fraud committed on part of DD. The entire argument

is based on the facts of this case. The argument has two basis which establishes that there was

no fraud committed. They are:

i. No ‘active concealment’ of the fact [2.1]

ii. Exception to § 19 would apply [2.2]

iii. No fraudulent misrepresentation [2.3]

Issue 3. Whether there was a breach of contract or not?

It is humbly submitted that there was no breach of contract by the DD. According to the facts,

an agreement to sell was made between the KMC and DD on November 5, 2020 and the

delivery was made on November 20, 2020 as agreed. The entire argument is based on two

submissions. They are as follows:

i. Acceptance of ‘NAM02’ by KMC [3.1]

ii. Fraud by servant of AK Coating [3.2]

It is therefore submitted that there was no breach of contract on part of DD nor the machine

was in a non-deliverable state at the time of delivery.

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Issue 4] Whether or Not Killiance Mio & Co. is entitled to get purchase price and damages

for Breach and Negligence?

It is humbly submitted that KMC is not entitled to get the purchase price and the damages for

breach of contract and negligence. The petitioners have failed to present all the meticulous

particulars of in the plaint especially to what they have alleged. There are two grounds which

does not make either of the defendants to pay the damages and the price money. They are:

i. Caveat Emptor [4.1]

ii. Fraud by servant [4.2]

iii. Breach of an implied warranty by the seller itself. [4.3]

Arguments Advanced

Issue 1] Whether or not there was a valid contract?

It is humbly submitted that there existed a valid contract between the parties. For a contract to

be valid there must be offer1 and acceptance2. After such acceptance, there must be a

consideration given under § 2(d) of the Act. A proposal when accepted gives rise to an

agreement3 and an agreement enforceable by law becomes a contract.4 There is no written

agreement5 so made in the made present matter, which is not a necessary entity.6 Writing is

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necessary only when prescribed by law.7 Also, if the plaintiff relinquishes any part of his

claim i.e. omits to sue in respect of, or intentionally relinquishes, any portion of his claim he

shall no afterwards sue in respect of the portion so omitted8. Moreover, if he omits to sue for

one or more relief, he shall not afterwards sue for any relief so omitted.9

In the present matter, the consideration10 paid was the price money of the machine, NAM02

by the Killiance Mio Company (KMC). The parties so involved in making an agreement must

be competent to the contract under § 10 of the Act. Thereafter, the consent so obtained by the

parties must be freely obtained by the other party signifying the willingness to the offer under

§ 14 of the Act.

The aforementioned principles of contract have been discussed with the facts of this case

which ultimately proves that there existed a valid contract. The contract was valid from the

beginning under:

i. The Indian Contract Act, 1872 [1.1]

ii. The Sale of Goods Act, 1930 [1.2]

[1.1] Under The Indian Contract Act, 1872

Under this Act, the following are the essentials which should be fulfilled in order to make a

valid contract. They are:

i. The parties were competent to the Contract [1.1.1].

ii. There was a lawful consideration [1.1.2]

iii. The object of the contract was lawful [1.1.3]


T.N. Tea Plantation Corp. Ltd. Ltd. v Srinivasa Timbers, AIR 1999 Mad 111; Conrad Dia v Joseph Dias, 1996
2 Mah LJ 208.

The Code of Civil Procedure, 1908 O. II, R.2(2).

The Code of Civil Procedure, 1908 O. II, R.2(3).

Chidambara v P.S. Renga, AIR 1965 SC 193: (1966) 1 SCR 168.

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1.1.1] The parties were competent to the Contract- In the present matter, Killiance Mio

(KMC) and the Drazon Deliveries (DD) are companies competent to the contract.§ 3(42) of

the General Clauses Act, 1897 defines a person as a Company or Association or body of

individuals whether incorporated or not. In the case of Karnataka Bank Ltd. v State of A.P. &

Ors.11 the Supreme Court said, “Relying on the said definition it was contended that branches

of Company, Association or body of individuals cannot be treated as separate persons.

Therefore in the present matter, both the companies are competent to the contract read with

the meaning of § 3(42) of the General Clauses Act, 1897.

1.1.2] There was a lawful consideration- In the present matter, the subject matter is NAM02,

a movable property which was agreed to be sold by DD to KMC. The consideration12 of a

contract of sale which was to be paid was Rupees 4 Million INR. Later on, November 20,

2020 the price money of the machine was paid in full by KMC which was agreed between the

parties. Therefore, it completely fulfills the requirement of § 2(d) of the Act.

1.1.3] The object of the contract was lawful- It is established that there was a lawful

consideration in this case; simultaneously the object must be lawful. In the present matter, the

object of the contract was to sell the machine. As per § 23 of the Act, says that the

consideration or object of an agreement is lawful unless it is forbidden by law; or is of such

nature that, if permitted, it would defeat the provisions of any law; or is fraudulent13. In the

present case, the object of the machine does not defeat any of the provisions of law, or was

done with any fraudulent object. It can also be established from the fact that it was conveyed

to Mr. Rambani to exercise due diligence before the sale which would have given way to an

elaborate procedure. Therefore, there was no fraudulent object as to deceive the KMC.


(2008) 2 SCC 254.

P. Sayamala v R. Gopinathan, (2004) 1 CTC 117; Fazaladdin Mandal v Panchanam Das, AIR 1957 Cal 92;
Fanindra Narain Roy v Kacchemen Bibi v, AIR 1918 Cal 816; Andhra Bank v Ananmath, AIR 1991 AP 245;
Prakashwati Jain v Punjab State Industrial Development Corpn., AIR 2012 P&H 13.

Avtar Singh, Contract and Specific Relief (11th ed. 2013)

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[1.2] Under The Sale of Goods Act, 1930

It is established that in a general case, the parties are competent to the contract and henceforth

are competent to contract of sale in the context of present matter as well. An agreement to sell

becomes a sale on fulfillment of the conditions or when the time provided in the agreement

elapses. 14The transaction of machine in the present matter will be covered with The Sale of

Goods Act, 1930. § 4(1) of the Act defines contract of sale as , “ A contract of sale of goods

is a contract whereby the seller transfers or agrees to transfer the property the property in the

goods to the buyer for a price” Thus in the present matter, the following essentials must be

fulfilled:

i. It is a contract between two parties [1.2.1]

ii. The subject- matter of a contract is “goods” [1.2.2]

iii. transfer or agreement to transfer by the seller [1.2.3]

iv. Transfer of ownership in the goods from seller to the buyer for a consideration15

known as “price” [1.2.4]

[1.2.1] It is a contract between two parties- The nature of the parties has been explained in the

sub- issue 1.1.1. The parties are competent to make an agreement to sale which was further

executed on November 20, 2020 fulfilling the terms of agreement to sell.

[1.2.2] The subject- matter of a contract is “goods”- The subject matter16 of the present case is

‘NAM02’. § 2(7) defines “goods” means every kind of movable property other than

actionable claims and money; and includes stock and shares, growing crops, grass and things

attached to or forming part of the land which are agreed to be servered before sale or under


State of Uttaranchal v Khurana Brothers, JT 2010 (12) SC 323: (2010) 11 SCALE 348.

The Sale of Goods Act, 1930 § 2(10).

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the contract of sale.”

It would be noteworthy to establish the nature of the property involved in this case. ‘NAM02’

is a machine which was used to manufacture Subscriber Identity Module (SIM). The machine

could produce thousands of SIM in one go which makes it expensive. The nature as described

in the fact sheet agglomerates that NAM02 is a movable property17.

The scope of movable property has been covered by The Indian Contract Act, 1872; The Sale

of Goods Act, 1930; General Clauses Act, 1897 etc. Movable Property shall mean property of

every description, except immovable property18. Every movable property which is capable of

being possessed19 and which is not immovable is the subject matter of the present case.

[1.2.3] Transfer or agreement to transfer by the seller- In the present matter, On November 5,

2020 the negotiations were concluded and it was agreed that the machine has to be delivered

to Mio on November 20, 2020 by Drazon Deliveries. The transfer was finally made on the

stipulated date as agreed between the parties.

[1.2.4] Transfer of ownership in the goods from seller to the buyer for a consideration known

as “price”- In a contract of sale, the main object is the transfer of property and delivery20 of

possession of the property.21 In other words, there must be a transfer of ownership in goods

from the seller to the buyer as per § 4(3) of the Sales of Goods Act, 1930.


Id.

The General Clauses Act, 1897, § 3(36).

Standard Chartered Bank v. Andhra Bank Financial Services Ltd.,(2016) 1 SCC 207 : 2015 SCC Online SC
766.

Coffee Board, Karnataka v Commissioner of Commercial Taxes, AIR 1988 S.C. 1487; Vishnu Sugar Mills v
Food Corp. of India, AIR 1987 Pat 22.

State of Andhra Pradesh v Kone Elevators India Ltd., (2005) 3SCC 389.

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Issue 2. Whether there was fraud on part of DD or Not?

It is humbly submitted that there was no fraud committed on part of DD. The entire argument

is based on the facts of this case. The argument has two basis which establishes that there was

no fraud committed. They are:

i. No ‘active concealment’ of the fact [2.1]

ii. Exception to § 19 would apply [2.2]

iii. No fraudulent misrepresentation [2.3]

[2.1] No ‘active concealment’ of the fact

It has been alleged by the Petitioners that fraud has been committed by not disclosing the fact

that the machine did not rightfully belonged to the Drazon Deliveries. Since, the fact is that

they are actually the rightful owners of NAM02, the question of active concealment of such

fact cannot arise. Moreover, during the negotiations, Mr. Rambani was given a chance to

exercise due diligence22. Why would someone be asked to enquire of the ownership of the

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property of which in case he is not the actual owner? The silence of Mr. Badshah Khan as to

the fact is not equivalent to his duty to speak in any manner whatsoever.

[2.2] Exception to § 19 would apply

It is also submitted that Exception of § 1923 would apply in this case. It says, “If such consent

was caused by misrepresentation or by silence, fraudulent within the meaning of section 17,

the contract nevertheless, is not voidable, if the party whose consent was so caused had the

means of discovering the truth with ordinary diligence24” Several phrases of this exception

apply to the Respondent’s case which establishes the fact that there was no fraud committed

by the DD as to the question of being their rightful owner of the machine or not.

The phrase “had the means of discovering the truth”25 resembles to its literal meaning that the

buyer should beware of the property respective of its ownership. This is also a well

established principle known as ‘Caveat Emptor’. As already stated, Mr. Rambani was given a

chance to exercise due diligence and had the all the means to ‘discover the truth with due

diligence’.

2.3] No ‘fraudulent misrepresentation’

In John Minar Apcar v Louis Caird Malchus26, It is clear that the words “fraudulent within the

meaning of § 17” refer only to the word “silence” and not to the word “misrepresentation.” If

anything further were needed to make this clear the existence of the two words “by” in the

phrase “by misrepresentation” or “by silence” makes the statement grammatically correct and

clear and shows conclusively that the words “fraudulent within the meaning of § 17 apply


The Indian Contract Act, 1872 § 19.

Shoshi Mohun Pal Chowdhary v Nobo Krishto Poddar, ILR (1874) 5 Cal 801; U.P. State Sugar Corpn.
Karamchari Assn. v State of U.P., 1994 All LJ 937; Oriental Insurance Co. Ltd. v Gowrama, AIR 1994 Kant.
29.

Balraj Chibber v NOIDA, 1955 All LJ 1513: (1996) 27 ALR 10; Nasiram Bibi v Mohd Hasan, (1996) All LJ
1648

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only to the word “silence.”

The effect that the exception to § 19 of the Contract Act applies to cases of misrepresentation

as distinguished from fraud and should not be interpreted as being meant to apply to

misrepresentation which is “fraudulent within the meaning of sec. 17”. The present case has

to be distinguished between the two. The phrase “fraudulent within the meaning of sec. 17”

should be deemed to apply to the preceding word “silence” exclusively and not to the word

“misrepresentation.”27 Also, there is a difference between the two phrases to their literal

meanings, i.e. ‘wrongful representation’ and ‘misrepresentation. These are two distinct

phrases and have their own literal meaning.

After such literal interpretation of these distinct words and phrases, fraudulent

misrepresentation is impossible in the present matter, as the matter is only concerned about

silence and not misrepresentation. Since, it has been established that silence of Mr. Rambani

was not equivalent to his duty to speak28, therefore, it specifically agglomerates the fact that

there was no fraud either.


Niaz Ahmad Khan v.Parshotam Chandra, I.L.R 53 All. 374 (1930).

The Indian Contract Act, 1872, Explanation to § 17.

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Issue 3. Whether there was a breach of contract or not?

It is humbly submitted that there was no breach of contract by the DD. According to the facts,

an agreement to sell was made between the KMC and DD on November 5, 2020 and the

delivery was made on November 20, 2020 as agreed. The entire argument is based on two

submissions. They are as follows:

i. Acceptance of ‘NAM02’ by KMC [3.1]

ii. Fraud by servant of AK Coating [3.2]

[3.1] Acceptance of ‘NAM02’ by KMC

According to the facts of this case, ‘NAM02’ was delivered on November 20, 2020. It can

inferred from the facts that the machine was put to repair after it was found that the machine

was not working properly. Since, the KMC tried to repair the machine by involving its own

team of technicians; it would be deemed that KMC had accepted the machine absolutely. The

question arises why they had not informed the DD about the mal-functioning of the machine

at the first place? Had they informed DD immediately after the mal-functioning of the

machine, the liability of DD would have arisen in that case, which is not.

Applying technicians to the machine is a sufficient fact to establish that liability of breach of

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contract by DD cannot arise in any case. The argument is well supported by § 42 of Sale of

Goods Act, 1930. Certain essentials can be ascribed out of the definition as provided in § 42

of the Act, in order to fulfill the aforementioned argument. The essentials for the purpose of

this argument are:

i. intimation to the seller that he has accepted29 them

ii. and does any act which is inconsistent with the ownership of the seller

iii. after the lapse of reasonable time

iv. he retains the goods without intimating to the seller that he has rejected them30.

The aforementioned essentials can be well explained with the facts of this case. Firstly, the

acceptance of NAM02 was enough intimation to the seller that he has accepted it31 on

November 20, 2020, irrespective of that fact that the machine was working or not as due

diligence was not taken Mr. Rambani. Secondly, where on November 25, 2020 KMC tried to

repair the machine with its own team of technicians is an inconsistent act with the ownership

of the seller. Thirdly, the question of lapse of reasonable time and the rejection of machine

does not arise as the machine would be deemed to be accepted after such incident.

[3.2] Fraud by servant of AK Coating

The second argument for this issue is that Fraud was committed by Mr. Barnab Boswami and

would not make liable the master in the present case. It is also contended that the machine

was in a deliverable state at the time of delivery. In every contract of sale, the goods which

are transferred are examined at the time of the deliverable state. It is a very general


Mahomed Rowther v. Dalooram Jayanarayan, [1918] 47 I.C. 555; Mithan Lal-Inder Nanin v Suraj
Parshad-Madan Gopal, 1931 SCC OnLine Lah 369 : AIR 1932 Lah 52; Hardy & Co. v Hillerns & Fowler,
(1923) 2 KB 490.

M/s Jain Mills & Electrical Source v State of Orissa, AIR 1991 Ori. 117.

Kailash Sharma v Patna Municipal Corpn., AIR 2009 Pat. 10.

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phenomenon with the electric products that they might stop working due to any damage

which would have been caused, anytime before their mal- functioning. Since, Mr. Badshah

Khan was in friendly terms with Mr. Rambani, therefore, the seller in this case would

definitely check the goods before the delivery to maintain good confidence in his friend.

In case, if the presumption arises by the petitioner that the machine mal-functioned due to the

water leak caused by Mr. Boswami and would make DD liable vicariously would be

absolutely incorrect32. In fact, the machine might have stopped working after the delivery was

made and the moisture so collected could have affected the machine later on. But, since the

facts are clear on the point that Mr. Boswami caused the water leak despite the fact that he

had every information about the machine only points towards his guilty intent in this case.

The master’s liability in tort for frauds of his servant resembles the principal’s liability on

contracts entered by his agents. Therefore, if servant had no actual authority nor he was

acting for the master’s benefit and the person injured by the fraudulent or dishonest act of the

servant could not have reasonably regarded the servant as possessing any apparent authority

in dealing with him33, the master cannot be made liable simply because the acts done by the

servant were of a class which he was authorized to do on master’s behalf.34The question arises

whether the servant was just doing his job badly or not doing the job at all, doing his own

thing instead. Considerations of time, place, equipment and purpose will all be relevant to

this purely factual determination.35

It is therefore submitted that there was no breach of contract on part of DD nor the machine

was in a non-deliverable state at the time of delivery.


Lloyd v Grace, Smith & Co., [1912] AC 716; State Bank of India v Shayama Devi, AIR 1978 SC 1236.

Armagas v Mundogas, [1986] 1 AC 717.

Koorangong Investment P. Ltd. v Richardson & Wrench Ltd., (1981) 3 All ER 65: (1982) AC 462 (PC).

Wier, Case Book on Tort, 5th ed.

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Issue 4] Whether or Not Killiance Mio & Co. is entitled to get purchase price and damages

for Breach and Negligence?

It is humbly submitted that KMC is not entitled to get the purchase price and the damages for

breach of contract and negligence. The petitioners have failed to present all the meticulous

particulars of in the plaint especially to what they have alleged. In a suit for breach of

contract, the defendant is entitled to know exactly what case he has to meet, and must be

afforded an opportunity to investigate the details of the claim, so that he may call them and

meet the plaintiff’s estimate of damages and the basis.36 The plaintiff must, therefore furnish

necessary particulars in the plaint.37

The burden lies on the plaintiff to prove the contract,38 (although which is still proved by the

defendant in the present matter), and its breach, as also the injury suffered by him consequent

upon the breach;39 that he has performed or has been always ready to perform his part of the

contract;40 that the defendant or his agent has committed breach;41 and that he has suffered


Pollock and Mulla, The Indian Contract and Specific Relief Acts 1219 (14th ed. 2016, vol. 2).

Jamshed Karimuddin Musalman v Kunjilal Harsukh Kalar, AIR 1938 Nag 530.

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damage, as also its extent.42 A plaintiff claiming special damages must prove his entitlement

to them.43

The petitioner has made Drazon Deliveries as the other party to this suit along with AK

Coating who was involved in the repair work. The petitioner seeks purchase price of NAM02

and damages for breach of contract from the DD as well as from the AK Coating Ltd jointly.

There are two grounds which does not make either of the defendants to pay the damages and

the price money. They are:

i. Caveat Emptor [4.1]

ii. Fraud by servant [4.2]

iii. Breach of an implied warranty by the seller itself. [4.3]

[4.1] Caveat Emptor

It is a general common rule with regard to the quality or fitness of the goods for the purpose

of which they are purchased.44 It means that the buyer should take the precaution and see that

the article is fit for his purpose.45 The rule is “let the buyer beware”. A purchaser who fails to

investigate the vendor’s title does so at his own risk.

4.1.1] Reason why exceptions of caveat emptor would not apply in this case- § 16 of The

Sale of Goods Act, 1930 provides for exceptions to Caveat Emptor. They do not apply to the

present matter. Clause (1) of this section uses the phrase ‘buyer relies on the seller’s skill or


Banarsi Das & Co. v Lulla Mal, AIR 1915 All 295; AV Joseph v R Shew Bux, AIR 1918 PC 149; Hollandia
Pinmen v H. Openheimer, AIR 1924 Ran 356; Abdulali Moosabhoy v Gokaldas Lalji, AIR 1927 Sind 49;
Knawar Lal Thapar v Raja Bahadur Kamakhya Narayan Singh, AIR 1957 Pat 350; Union of India v Vasudeo
Agarwal, AIR 1960 Pat 87; Gambhirmull Mahabir Prasad v Indian Bank Ltd. AIR 1963 Cal 163; Municipal
Committee v Harda Electric Supply Co. Pvt. Ltd., AIR 1964 MP 101; Rampratap Mahadeo Prasad v Sasana
Sugar Works Ltd., AIR 1964 Pat 250; Brahma Deo Narain Singh v Members of Notified Area Committee, AIR
1965 Pat 179; Firm Bhagwandas Shobhalal Jain v State of Madhya Pradesh, AIR 1966 MP 95.

Ramalingam Chettiyar v Gokuldas Madvaji & Co., AIR 1926 Mad 1021; Union of India v Kuthari Trading Co.
Ltd., AIR 1969 Assam 84; State of Tripura v Bina Choudhary, AIR 2007 SC 2169.

M. Krishnan Nair, The Law of Contracts 384 (4th ed., 1983)

Id.

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judgment’. The buyer, i.e. Boswami was aware of the fact that DD ran a freight business and

was not skilled in repairing the machine; despite the fact AK Coating was given the job to

repair the machine. Therefore, it was the duty of Mr. Rambani to check the machine as to its

functioning.

[4.2] Fraud by servant

It has been established and proved that fraud was committed by Mr. Barnab Boswami.

However, the act of Mr. Boswami might seem to be negligent and for which the liability of

his employer would arise vicariously, but, which is not the case as such. The fact is very

explicit on this point that ‘Mr. Barnab Boswami caused the water leak’ which would make

him solely liable. Mr. Boswami was aware about the fact that the machine was extremely

expensive and its importance. Despite having all such knowledge of the machine, he did not

inform his employer about the water leak that was caused by him. Thus, the intensity of the

phrase used in the fact sheet ‘caused the water leak’ must be treated in its higher degree.

Keeping in mind about the knowledge that Mr. Barnab Boswami had about NAM02, only

resembles to the fact that the water leak was not caused negligently by him. Thus, a separate

suit must be filed against Mr. Rambani for the act done for his own benefit.

The defendant parties cannot be made liable to pay the damages and the price money as the

act of the servant was for his own benefit.

[4.3] Breach of an implied warranty by the seller itself

Moreover, it is contended by the petitioner that there was an implied condition which was

later to be considered as an implied warranty. § 12 of The Indian Contract Act, 1872 explains

conditions and warranty as:

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“(1) A stipulation in a contract of sale with reference to goods which are the subject

thereof may be a condition or a warranty.

(2) A condition is a stipulation essential to the main purpose of the contract, the

breach of which gives rise to a right to treat the contract as repudiated.

(3) A warranty is a stipulation collateral to the main purpose of the contract, the

breach of which gives rise to a claim for damages but not to a right to reject the goods

and treat the contract as repudiated.

(4) Whether a stipulation in a contract of sale is a condition or a warranty depends in

each case on the construction of the contract. A stipulation may be a condition, though

called a warranty in the contract.”

In the present case, an implied condition which was treated as an implied warranty46 came to

an end the moment KMC applied its own technicians to repair the machine which caused that

machine irreparably damaged. It would remove the liability from the DD to pay the damages

and the price money.


The Sale of Goods Act, 1930 § 13.

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Prayer

In the light of issues raised, arguments advanced and authorities cited, the counsels for the

Defendants humbly prays to this Hon’ble Court and declare:

1. That, there existed a valid contract of sale between Killiance Mio & Co. and Drazon

Deliveries.

2. That, there was no fraud committed by Drazon Deliveries.

3. That, there was no breach of contract by the Drazon Deliveries.

4. That, Drazon Deliveries Ltd. is not liable to pay the purchase price and damages for

breach.

AND

Pass any order that this Hon’ble Court may deem fit in the interest of equity, justice and good
conscience.

And for this act of kindness, the Counsels for the Defendants shall duty bound forever pray.

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Respectfully Submitted

Sd/- _______________

Place: New Delhi Counsels for the Defendants

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