1286R

IN THE

HONOURABLE SUPREME COURT OF INDIA

AT NEW DELHI

CIVIL APPEAL NO. XXX OF 2016

UNDER ARTICLE 133 OF THE CONSTITUTION OF INDIA READ WITH SECTIONS 96 AND 109 OF THE

CODE OF CIVIL PROCEDURE, 1908 AND ORDER XVI OF THE SUPREME COURT RULES, 2013

IN THE MATTER OF

MR. RAMESH BAHADUR ....APPELLANT

V.

NATIONAL HANDLOOM HOUSE & CO.

AND

JAPS KNITTING MILLS LTD. ....RESPONDENTS

MEMORIAL ON BEHALF OF THE RESPONDENTS

 TABLE OF CONTENTS

INDEX OF AUTHORITIES ................................................................................................. iii

STATEMENT OF JURISDICTION ..................................................................................... iv

STATEMENT OF FACTS ...................................................................................................... v

ISSUES FOR CONSIDERATION ........................................................................................ vi

SUMMARY OF ARGUMENTS ...........................................................................................vii

ARGUMENTS ADVANCED .................................................................................................. 1

I. The retailer is not liable for breach of the relevant implied conditions under Section 16

of the Sale of Goods Act, 1930. ............................................................................................. 1

(a) The retailer is not liable under Section 16(1) of the Sale of Goods Act. ................. 1

(b) The retailer is not liable under Section 16(2) of the Sale of Goods Act. ................. 3

II. The manufacturer is not liable for negligence. ............................................................ 4

PRAYER ................................................................................................................................... 6

ii
 INDEX OF AUTHORITIES

Cases

Bengal Corporation Pvt. Ltd. v. The Commissioners for the Port of Calcutta, AIR 1971 Cal

357.......................................................................................................................................... 2

Bristol Tramways Co. v. Fiat Motors Ltd., [1910] 2 KB 831 (CA). ......................................... 3

Donoghue v. Stevenson, [1932] A.C. 562.................................................................................. 5

Eternit Everest Ltd. v. CV Abraham, AIR 2003 Ker 273. ......................................................... 1

Grant v. Australian Knitting Mills Ltd., [1936] A.C. 562 ......................................................... 5

Griffiths v. Peter Conway Ltd., [1939] 1 All ER 685 ................................................................ 4

Sumner Permain & Co. v. Webb & Co., [1922] 1 KB 55 (CA). ............................................... 3

Treatises

Pollock & Mulla, The Sale of Goods Act, Ninth Edition, LexisNexis (A Division of Reed

Elsevier India Pvt. Ltd.), 2014. .............................................................................................. 3

iii
 STATEMENT OF JURISDICTION

The Counsel for the Respondents most humbly and respectfully submits that this Honourable

Supreme Court of India has the requisite jurisdiction to hear and adjudicate the present matter

under Article 133 of the Constitution of India read with Sections 96 and 109 of the Code of

Civil Procedure, 1908 and Order XVI of the Supreme Court Rules, 2013.

iv
 STATEMENT OF FACTS

Ramesh Bahadur (the appellant) had a brief history of skin disease for which he was under

the treatment of a dermatologist. On 20th March, 2012, he bought underwear from National

Handloom House & Co. (the retailer), who had in the ordinary course at some previous

date purchased the same from Japs Knitting Mills Ltd. (the manufacturer).

II

Over the next two weeks, the appellant often wore the underwear and at the same time,

redness appeared on each of his ankles. The appellants skin trouble only got worse with

every passing day. On 4th April, the appellant discarded the underwear on being advised to do

so by his dermatologist. The appellants condition, however, continued to aggravate.

III

Finally, in May, the appellant became convalescent and went to Haridwar to recuperate. He

returned after two months and felt sufficiently recovered to resume his practice. Soon after,

however, he had a relapse and was hospitalised again, for one month.

IV

The appellant first brought an action against the retailer and the manufacturer in the Kota

District Court, which ruled in his favour. However, in appeal, the High Court of Rajasthan set

aside the judgment of the District Court.

Hence, the present appeal before this Honourable Court.

v
 ISSUES FOR CONSIDERATION

ISSUE 1: WHETHER THE RETAILER IS LIABLE UNDER SECTION 16 OF THE SALE OF GOODS

ACT, 1930?

ISSUE 2: WHETHER THE MANUFACTURER IS LIABLE FOR NEGLIGENCE?

vi
 SUMMARY OF ARGUMENTS

ISSUE 1: WHETHER THE RETAILER IS LIABLE FOR BREACH OF THE RELEVANT CONDITIONS

IMPLIED UNDER SECTION 16 OF THE SALE OF GOODS ACT, 1930?

The retailer is not liable for breach of the implied conditions under either Section 16(1) or

Section 16(2) of the Sale of Goods Act, 1930. It is not disputed that the implied conditions do

exist in the present case. However, it is submitted there is no breach of the said conditions.

Nothing in the evidence goes to show that the garment was not fit for the purpose of being

worn next to the skin, nor is there any positive evidence establishing that the garment was not

of merchantable quality. The presence of free sulphites in the garment is merely assumed, and

there is nothing to show that the disease was caused due to the garment. The relapse of the

dermatitis even after the garments had been discarded further makes it improbable that the

garments were the cause of the disease in the first place. The appellants history of skin

disease is another important factor to be considered.

ISSUE 2: WHETHER THE MANUFACTURER IS LIABLE FOR NEGLIGENCE?

The tort of negligence requires three essential ingredients to be established, viz., existence of

a duty, breach of the said duty, and resultant damage to the claimant as a consequence of the

breach. Looking to the principles evolved judicially in the landmark case of Donoghue v.

Stevenson, it can be seen that a manufacturer despite the absence of privity of contract can be

held liable for the tort of negligence. However, in the present case, the manufacturer is not

liable for negligence as, though a duty to take care existed on its part, it has neither been

established that there was a breach of the said duty, nor has the damage suffered by the

appellant been shown to be a consequence of any negligence by the manufacturer.

vii
 ARGUMENTS ADVANCED

I. The retailer is not liable for breach of the relevant implied conditions

under Section 16 of the Sale of Goods Act, 1930.

The Sale of Goods Act, 1930 governs the rights and liabilities of the parties to a

contract of sale. In the present case, such a relationship exists only between the

appellant (buyer) and the retailer (seller). Section 16 of the Act is an exception to the

rule of caveat emptor. The most important exceptions to the rule of caveat emptor,

and the ones relevant to the present case, are the implied condition of fitness for a

particular purpose and the merchantableness of the product.

(a) The retailer is not liable under Section 16(1) of the Sale of Goods Act.

Sub-section (1) of Section 16 deals with the implied conditions as to the

quality or fitness of the articles sold. It is attracted when the buyer expressly or

by implication had made known to the seller the particular purpose for which

the goods were purchased.1 It is immaterial whether the buyer has, or has not,

the opportunity of inspecting the goods, or whether or not he avails himself of

that opportunity if he has it.

It may be observed that the conditions under Section 16(1) will not be implied

if the goods are not of a description which it is in the course of the sellers

business to supply; and, even where the goods are of that description, it is

necessary that the purpose for which they are bought should be made known to

1
Eternit Everest Ltd. v. CV Abraham, AIR 2003 Ker 273.

1
 the seller in such circumstances as to show that the buyer relies on his skill and

judgment.2

In the present case, it may be said that the appellant, by implication, made

known to the retailer the purpose for which the underpants were required, viz.,

for being worn next to the skin. Also, the retailer deals in the said goods,

which are thus of a description which it is in its course of business to supply. It

is, however, submitted that there is no breach of the implied condition that the

goods shall be reasonably fit for the intended purpose.

The appellant had a history of skin disease for which he was under the

treatment of a dermatologist. On the first day that he wore the underpants,

there was no problem. The itching began only after the garment had been

washed once. The appellants claim is based on the assumption that disease

has been caused to him by the presence of an irritating chemical, viz., free

sulphite, in the underpants. While it is not conceded that the presence of such

chemical is a fact as the same has not been proved, it may be submitted that

the presence of such a chemical is also possible as a result of washing of the

garment, as laundry detergent is also known to contain sulphur compounds.

There is nothing to show that the garment was unfit for being worn. It has not

been established that the dermatitis caused was due to the garment. The

disease relapsed even when the garments had been returned. Reading Sections

101 to 103 of the Indian Evidence Act together, it can be safely said that the

burden of proof to establish the aforementioned facts is on the appellant and

the same has not been discharged.

2
Bengal Corporation Pvt. Ltd. v. The Commissioners for the Port of Calcutta, AIR 1971 Cal 357.

2
 (b) The retailer is not liable under Section 16(2) of the Sale of Goods Act.

Section 16(2) of the Sale of Goods Act introduces the implied condition that in

situations as provided thereunder, the goods sold shall be of merchantable

quality. The rule is that, in the case of goods sold by description by a seller

who deals in such goods, the seller is always, in the absence of agreement to

the contrary, responsible for latent defects in the goods which render them

unmerchantable, whether the buyer has examined them or not, and for all such

defects whether latent or discoverable on examination in cases where the

buyer has not in fact examined the goods.3

There is no definition of the phrase merchantable quality in the Act. In an

English case,4 the phrase has been explained as meaning that the article is of

such quality and in such condition that a reasonable man, acting reasonably,

would after a full examination accept it under the circumstances of the case in

performance of his offer to buy that article, whether for his own use or for

resale. The condition is that the goods shall be of merchantable quality, i.e.,

that they shall not differ from the normal quality of the described goods to

such an extent as to make them unsaleable.5

Applying Section 16(2) to the present case, it is submitted that as the retailer is

a dealer in the goods sold, there is an implied condition that the goods are of

merchantable quality. However, it cannot be said that there is a breach of the

said condition. There is nothing in the facts of the case to show that the goods

were not of a merchantable quality.

3
Pollock & Mulla, The Sale of Goods Act, Ninth Edition, LexisNexis (A Division of Reed Elsevier India Pvt.
Ltd.), 2014.
4
Bristol Tramways Co. v. Fiat Motors Ltd., [1910] 2 KB 831 (CA).
5
Sumner Permain & Co. v. Webb & Co., [1922] 1 KB 55 (CA).

3
 In Griffiths v. Peter Conway Ltd.,6 the plaintiff purchased from the defendant,

a retail trader, a Harris tweed coat, and shortly after she began to wear the coat

she contracted dermatitis. It was found that the plaintiffs skin was abnormally

sensitive, and there was nothing in the cloth which would have affected the

skin of a normal person. It was held that the sub-section did not apply in such

a case as no seller could assume that a buyer was allergic to any particular

goods. In the present case too, the appellant has had a brief history of skin

disease. He has not revealed the same to the retailer. It is possible that the

defect was not in the garment, but that the appellants skin was extra sensitive.

Lastly, it is reiterated that the burden of proof is on the appellant to establish

that the disease was caused to him by the garment, and that the garment had

the alleged defect. A claim based on mere assumptions cannot stand without

positive evidence establishing the same. The appellant is simply making a

circular argument, that the garments must have caused the dermatitis because

they contained sulphites, and that they must have contained sulphites because

they caused the disease.

II. The manufacturer is not liable for negligence.

The appellant wishes to make the manufacturer liable; however, there is no direct or

immediate relation of buyer and seller between them, and therefore, no liability can

arise under the Sale of Goods Act, 1930. Therefore, the appellant has alleged that the

disease caused to him was due to the presence of an irritating chemical in the

underpants, which he has attributed to negligence in the manufacture of the same.

6
Griffiths v. Peter Conway Ltd., [1939] 1 All ER 685.

4
 In the landmark case of Donoghue v. Stevenson,7 Lord Atkin stated as follows:

A manufacturer of products, which he sells in such a form as to show that he

intends them to reach the ultimate consumer in the form in which they left him

with no reasonable possibility of intermediate examination, and with the

knowledge that the absence of reasonable care in the preparation or putting

up of the products will result in an injury to the consumer's life or property,

owes a duty to the consumer to take that reasonable care.

Thus, the manufacturer does owe a duty of care to the appellant. However, it has

neither been established that there was a breach of such duty, nor has it been proved

that the damage (disease) caused to the appellant was a result of the negligence of the

manufacturer. It is possible that the appellants skin was abnormally sensitive, as has

been shown above. Nothing in the facts proves that the garments caused the disease,

or that the garments even contained free sulphites as contended. The appellant has not

discharged the burden placed on him to prove the same.

Lastly, it may be of importance to look at the celebrated Australian case, Grant v.

Australian Knitting Mills Ltd.,8 the facts of which are similar to those of the present

case. This case can be distinguished from the present case as, in this case, it was

proved with the help of positive evidence that the disease was external and that the

buyers skin was normal. Also, the seller had accepted that free sulphite was present

in the garments in major quantities, thus rendering them defective.

7
Donoghue v. Stevenson, [1932] A.C. 562.
8
Grant v. Australian Knitting Mills Ltd., [1936] A.C. 562.

5
 PRAYER

Wherefore in the light of facts stated, issues raised, arguments advanced and authorities cited,

it is most humbly and respectfully prayed before this Honourable Supreme Court of India, at

New Delhi, that it may be pleased to:-

Dismiss the appeal with costs.

And pass any other order in favour of the Respondents which this Court may so deem fit in

the ends of equity, justice and good conscience.

All of which is most humbly and respectfully submitted.

Place: New Delhi Counsel No. 1286R

Date: October 20th, 2016 Counsel for the Respondents