Damage of loss of movable property lies with owner of property.
CASE STUDY-APR07- SALE OF GOODS ACT, 1930
Question : 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.
| General Rule in India provides that risk of damage or loss of movable property lies with the owner of goods. The Latin term ‘res perit domino’ expresses that the thing is lost to the owner of the property. This principle is applicable in the case of sale of movable property. SECTION 2(7) of Sale of Goods Act, 1930 -defines movable property as “movable property includes every kind of movable property, including stocks and shares, growing crops, grass, and things attached to or forming part of the land that is agreed to be severed before sale or under the contract of sale. It does not apply to actionable claims and money”. SECTION 26 of the Sale of Goods Act, 1930 states the goods are the owner’s risk if the property in them has not been transferred to the buyer. But if the property has been transferred to the buyer, then the goods are buyer’s risk. This provision is applicable if no specific provision has been signed by the parties to the contract in their contract regarding this. This rule is applicable irrespective of the fact that delivery has been made or not. It means that the risk is associated with ownership and not with mere possession of the property. To decide whether the risk has been passed or not, we first need to find whether the property in goods i.e. the ownership has passed or not. The passing of risk means the transfer of the liability for damage or loss of the property from the seller of the immovable property to the buyer. The risk in the property prima facie passes with the property, but if the parties to the contract agree to pass the risk on the property at some other level of transaction, then that is also possible, depending upon the terms of their contract. It is also possible that that the title, risk, and possession of the property pass independent of each other from the seller to the buyer in a sale’s transaction. EXCEPTIONS TO THE ABOVE RULE If the delivery has been delayed due to the fault of either party, then the liability of damage will lie on the party at fault. If the seller has failed to deliver the goods as agreed by the parties and the goods are damaged or lost due to that, then the seller will bear the cost. If the buyer has failed to take delivery of goods despite many reminders by the seller, then the buyer will bear, the cost of damage to the good. Irrespective of the fact that the property in the goods has been transferred or not, the possessor of the good has same rights and duties as bailee of the goods. If the damage to the property occurs due to the negligence of the possessor of the goods, as a bailee, he will be liable to bear the damage or loss of the goods. |
Answer:-
Section 26 of the Sale of Goods Act, 1930 provides that gods are at owner’s risk , until ownership is transferred to the buyer. In case of sale of good contract ownership related to goods have been transferred but possession o goods are still with the seller then ownership of damage is with the seller and when ownership transferred to the buyer then buyer becomes owner of those goods, and any damage will be bear by the buyer.
Lets’ consider given case Raman has bought car of Rupali and on transfer of ownership of car from Rupali to Raman any further damage will be of Raman. If there is a contract between the parties that Raman will collect car after some time say 5 days or 7 days and Rupali will look after safety of the car, in this case if any damage happen before 5 or 7 days as agreement to the car Rupali (seller) will be liable. In other scenario if Raman has not taken possession of car within 5 or 7 days as agreed and any damage happen to the car then Raman will be liable in this case.
DISCLAIMER: the article presented here is only for sharing information with readers. In case of necessity do consult with professionals.
Author: FCS Deepak P. Singh[ B.Sc. LLB, FCS, AIII, CIAFP}
