NMIMS Global Access

School for Continuing Education (NGA‐SCE)

Course: Business Law
Internal Assignment applicable for December 2017 Examination

Question 1.

The case given is a Cash on Delivery model of contract, payment of the price and the delivery
of the goods and concurrent conditions, i.e., they both take place at the same time as in a cash
sale over a shop counter.,

We are going to discuss the eligibility point of becoming un-paid seller and rights and
privileges of un-paid seller
As part of this we are going to see all the sections as part of Sales and Goods Act 1930., which
seller has to adhere to.

As per Section 45-55, the seller who has not received price of goods sold or the seller who has
got his negotiable instrument dishonored will become Unpaid Seller. In the given case,
'A'(buyer) denied to accept the product mean, seller has not received the price of the phone,
which already sent to buyer as he denied the product.
The delivery process in this case looks like a Constructive delivery, which takes place when
the courier or logistic agent hold good, (in this case phone) on behalf of and at the disposal of the
buyer.

Before deciding the Seller as Unpaid Seller, let’s try to discuss the accuracy of the Performance
of the Contract of Sale from duty of the seller stand point:

As per the Section 31.

It is the duty of the seller to deliver the goods, (in this case phone) to the buyer, and it is the
buyer's obligation to accept and pay for the goods in accordance with the terms of the contract.
This is denied by the buyer.

As per the Section 31.

Unless otherwise agreed, the seller should be prepared to deliver the goods (in this case phone)
to the buyer, in exchange for the price and the buyer should be prepared to pay the price in
exchange for the possession of goods at the same time, just like a cash sale over counter.,
This action denied by the buyer.

As per the Sec. 33.

Delivery in this case, is Constructive delivery, which takes place when the courier or logistic
agent hold good, (in this case phone) on behalf of and at the disposal of the buyer.

As per the sec. 36.

The goods, in this case the phone, must be delivered to a specific location, which is contractually
agreed during business hours on a working day or at the place where they are at the time of sale.
To been considered as Unpaid Seller, delivery location must be as per the contract.

At the time of ‘A’ orders a phone online. In the contract definitely there should be agreed time.
The seller is obligated to send the goods to the buyer within a specified time as per the contract.,

As per the Sec 37.

Seller is responsible for delivering the good as specified in the contract, should validate if any
wrong delivery, in case of wrong delivery seller cannot be an unpaid seller.

As per Sec 38.

Complete product has to be delivered. Seller has to make sure all the part along with user manual
is delivered.

As per Sec 40
Risk of product while in transit has to be the responsibility of the Seller, buyer can reject the
damaged product.

As per Sec 41
Buyer has right to examine the goods for the purpose of ascertaining, if any deviation from the
contract can be rejected.

As per the Sec 43.

If buyer does not take delivery within reasonable time, the buyer is liable to the seller for any
loss arising on account of refusing to take delivery.

I have discussed only applicable sections above which can help seller supporting if incase of
unpaid seller:
Seller is responsible for timely, right place, right product and not damaged to be eligible to
become unpaid seller, if buyer denies accepting the product.

Privileges of Unpaid Seller are categorized as:

 Rights against Goods
 Rights against Buyer

Unpaid Seller can exercise the rights against goods classified as follows.

Right of stoppage in transit

Unpaid Seller has right to stop the goods while they are in transit

Right of lien
Right to retain goods by seller until amount is recovered is called right of lien

Rigth to resale
The unpaid seller may resell the goods for non-payment of the price by the buyer.
In the same way unpaid seller will have rights against Buyer.
Sometimes it becomes inevitable choice to exercise buyer rights for non-payment of the price.
The unpaid seller can file lawsuits against the buyer, as explained below.

Right to a price action

It is fundamental right of buyer to file a suit for recovery of unpaid price. In the case of sale. Suit
will be made for price balance, but not for compensation.

Sue for interest

If the buyer makes an unreasonable payment delay, the seller has right to claim interest.

Right to compensation
If a sales agreement is violated, the seller can only see for compensation for the breach of
contract. In such circumstances he cannot Sue for price

Right to preliminary claim

If a sales agreement from the buyer before the performance date
Question 2.
This case is related to flat dispute for the flat in Sunpark Apartment at Mumbai, between A and
B. ‘A’ claims, he has purchased the flat and ready to shift, at the same time ‘B’ claims he also
purchased the same flat and already holds position.

Specific to this case:

‘A’ files RTI with Maharashtra Housing and Area Development Authority MHAD, with
objective is to know as per MHA Act 2011 who holds the right ownership of the flat between
himself (A) and B. And also want to check the possibilities to withdraw from the deal between
himself(A) and the dealer/promoter/builder who sold the property.

‘A’ want’s to understand the possibilities of property dispute, there can be many different
scenarios leading to fraudulent deal and RTI can be applicable to most of them. Few such cases
may be fraud in the registration of the property that initially belonged to someone else or dispute
over the area of ownership between two parties.

Fake Registration:
Fake registration is like a 3rd person without any authority and permission claims the ownership
of the property and try to sell it. ‘A’ wants to understand if this is the case with him. Section 2(f)
of the RTI act, it can be used to obtain various ownership related documents of the property. The
information can then be used to substantiate ‘A’s case and can also seek righted of his criticism
at an appropriate forum.

Property(Flat in this case) Dispute:

Dispute can arise for many reasons., if builder is litigant, with greed of seeking more money, he
might have sold the same property to multiple people.
In most of the project Metropolitan development holds the mortgage of the property, builder
supposed to release it, if incase he has not release and holding agency has sold it to other party.
In case of GPA., GPA holder can sell and at sametime actual owner can sell it to someone
In case of lost document, registration can happen on CC copy of the documents., and later or
prior., if also registration happened on the original document can also lead to dispute.

There can be many more scenarios leading to disputes.

Encumbrance certificate
Simple and fast way to understand the previous ownership is Encumbrance certificate;
encumbrance certificate (EC) ensures that there is a complete ownership of the property without
any monetary or legal liability. A copy of EC can be obtained from any sub-registry office as
public authority just by paying rupees 100 to 200

It is clear that ‘A’ is looking to find out the previous ownership from where he brought the
property has all legal right to sell this and to frame the complete link from the inception of the
property who owns and how the ownership transfer chain chronologically can be identified from
EC.

Structure of RTI:
As like any other public authority, MHA also has designated officer are state public information
officer (as MHA is state public authority) responsible for providing requested information to
public. These PIOs are designated
‘A’ has to approach the PIO in MHA and give the RTI request to him, he has to make sure it is
been formatted correctly with all the information, an incorrectly formatted request is one of the
major reasons for rejection of a request by the PIO.

The PIO must open a file and dispose of the request within 30 days. If the PIO fails to reply to
the applicant by either approving or denying a request, the PIO is liable to pay a fine of Rs. 250
for each day of delay.

If the PIO does not have the request, a complaint can be lodged with the Appellate Body within
30-45 days.
There is room for a second objection to the Information Officer if the authority does not respond
within 90 days or the answer is found unsatisfactory. The final decision of the Information
Officer is binding

Process of requesting information (Specific to this case):

Application, on white paper with acceptable language ( English or Marathi ), specify all the
details about the flat.,
Timelines as in case of property it is 30days additional 5 days as this information has to be given
by Assistant PIO.
Since 3rd party involvement in this case, it may need additional 10days.
Fee for this activity is rupees 125/-
In case of incomplete information, there can be rejection.
Conclusion:
We can conclude this as A can follow the process RTI with guidance with the structure of RTI
and file the RTI in appropriate way can get needed information to understand the right ownership
of the purchase property and can figure-out the fraudulent in this transaction.
And also can understand, if he is the owner, how can he take the possession from B, if in case he
is not proven to be the owner, he can understand the occurrence fraudulent transaction to take the
further legal actions.
Question 3.A.
Ask is to advice X when Y delivers 15 chairs as per contracted make and quality but delivers
remaining 15 chairs to different make.
As per the given case, X and Y got into a contract, that Y should deliver 30 chairs of the make
and quality specified by X.
X has to check the contract, for the below listed clauses:
Acceptance of the contract by either parties is mandatory, X has to make sure the same contract
of 30 chairs of specified make and quality is agreed and accepted by Y, as per the offer and
acceptance.
Legal relation: If both the parties, consent of creating a legal relation, if no., I would advise X to
create a legal relation and stay prepared for legal consequences.
Buying 30 chairs cannot be a domestic agreement, this looks like a commercial agreement.
Creating the legal relation very much needed for commercial agreement.
Voidable: Also, advise to X that., to create voidable contract, if any breach by either parties and
should get discharged on contract breach.
Free Consent: X should be known that, consent Y should be a free consent at the time of
agreement, meaning free from Coercion, Influence, Fraud, By Mistake...
Discharge by Breach: As per the agreement, Y have to get 30 chair of the brand and quality as
agreed in the contract., Since he could not do this, contract can become void and can be
discharged
Capacity: Before coming to contract, each party has to make sure the capacity of other party,
capacity includes Age, unsound mind …
"X" has to be aware of different conditions in the purchase contract about the quality of the
chairs, the price, the method of payment and the delivery of the chairs and the place.
As discussed above they have to come into a legal relation for this contract, which should clearly
specify the details of the contract on make and quality. Should also need to have a clause on
contract violability and a clause on discharge of the contract. And also capacity of Y has to be
taken in to consideration before getting into contract.
I would advise X to keep view on the listed clauses as part of contract document:
Acceptance, Legal relation, Free Consent, consideration, agreement Violability and Discharge by
Breach and all these clauses should be clearly documented, agreed and made into contract, so
that X can sue Y and deny the acceptance of the delivery.
Question 3.B.
This is a special kind of contract called, contract of Bailment.
Section 148 defines ‘Bailment’ as “the delivery of goods by one person to another for some
purpose, upon a contract that they shall, when the purpose is accomplished be returned or
otherwise disposed of according to the directions of the person delivering them”.
Bailor: - The person delivering the goods is called ‘Bailor’
Bailee: - The person to whom they (goods) are delivered is ‘Bailee’.

In the given case P is the ‘Bailor’ and Q is the ‘Bailee’

As per section 150, Bailors are of 2 types, with respective to their jobs.
Gratuitous Bailor – Who lends his goods and services.
Bailor for reward – Who get profit from the goods delivered, He is making profit from his
profession and, therefore, it is his duty to see that the goods which he delivers are reasonably
safe for the purpose of the bailment. He cannot say that he is not aware of any defect or type of
goods.
In this case Bailor P is of “Bailor for reward” type and responsible to delivering the goods to
Bailee Q.
Section 150 clearly says that “if the goods are bailed for hire, the bailor is responsible for such
damage, whether he was or was not aware of such faults in the goods bailed.” He has to examine
the goods and remove such defects as reasonable examination would have disclosed.
Under this section, the bailor is bound to disclose to the Bailee deficiencies in the goods or the
type of goods borrowed which the bailor is aware of and substantially disturbs their use or places
the pawnbroker at extraordinary risk; and if he does not make such disclosure, he is responsible
for damages incurred by the pledgee directly from such errors.
In the given case: Goods consigned without disclosing that they were explosives. Where a Bailor
P delivers goods to Bailee Q for carriage, goods were not disclosed and shared the information
about the nature of good as explosives.
They explode and cause damage to the other goods and also injure a person, Bailor P has to held
responsible for this, as per the clause if the goods are of dangerous nature, the fact should be
disclosed to the Bailee