8 months ago
Bombay HC Rules Use of Goods as Deemed Acceptance
The Bombay High Court recently made an important decision about buying and selling goods.
They said that if a buyer starts using the goods they bought, it means they accept them, even if they later find some problems.
In this case, a company called Godrej bought some steel tubes from another company, Remi.
After using the tubes, Godrej said some were rusty and discolored and tried to return them.
But the court said that because Godrej had already used the tubes, they couldn't reject them later.
The court also said that Godrej can only ask for money to fix any problems, not return the tubes.
This decision is based on a law called the Sale of Goods Act, which says that using goods means you accept them.
The Bombay High Court ruled that using goods amounts to deemed acceptance under the Sale of Goods Act, 1930.
Godrej and Boyce Manufacturing Company Limited challenged an arbitral award directing it to pay over Rs 4.25 crore to Remi Sales and Engineering Limited.
The dispute arose from a purchase order for 8,339 stainless steel seamless tubes valued at over Rs 5 crore.
Godrej claimed defects in the tubes after installation, but the court held that using the tubes amounted to deemed acceptance.
The court upheld the arbitral tribunal's findings and dismissed Godrej's petition, stating that the only remedy available is a claim for damages for breach of warranty.
- Who
- Godrej and Boyce Manufacturing Company Limited and Remi Sales and Engineering Limited
- What
- Dispute over the acceptance and rejection of stainless steel tubes
- Where
- Bombay High Court, Mumbai
- When
- Purchase order issued in August 2016, supplies made in 2017, court ruling in January 2024
- Why
- Godrej claimed defects in the tubes after installation and rejected the goods, leading to arbitration and subsequent court proceedings
Key facts
- Parties Involved
- Godrej and Boyce Manufacturing Company Limited and Remi Sales and Engineering Limited
- Dispute Value
- Over Rs 5 crore
- Arbitral Award
- Rs 4,25,44,680 with 10% interest
- Goods in Dispute
- 8,339 stainless steel seamless tubes
- Contract Date
- August 2016
- Supplies Made
- 2017
- Legal Provision
- Section 42 of the Sale of Goods Act, 1930
- Court
- Bombay High Court
Quotes
Justice Marne
Justice of the Bombay High Court
“a party cannot blow hot and cold at the same time”
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