Case Comment on

Gopalakrishna Pillai

v.
K. M. Mani
AIR 1984 SC 216.

Abstract.
This paper will be commenting on the Supreme Court judgement related to the case of Sales
of Goods act. It will begin by introducing the case, then giving the background of the case
with the issues involved and the opinion of the different courts in the given case. At last the
analysis of the judgment is provided.

Introduction.

The case of Gopalkrishna Pillai v. K.M. Mani is revolving around the main theme line of the
right of the seller to recover damages or interest whereby the law interest or special damages
can be recovered. This is revolving around the Section 61 of the Sales of goods act. The
seller can only recover interest when he is in a position to recover the price. What does
meant by the position to recover the price is defined under the Sec 55 of the Sales of Goods
act.

The seller has right to have interest if the prices of the goods are not paid by the purchaser on
the stipulated date or when the goods are tendered to the buyer. A person deprived of the use
of money to which he is legitimately entitled has a right to be compensated for the
deprivation by whatever name it called, viz., interest, compensation or damages and this
proposition is unmistakable and valid; the efficacy and binding nature of such law cannot be
either diminished or whittled down.1

There is also brief discussion related to the sec. 59 of the Sales of Goods act which is related
to the remedy for the breach of the warranty. Then what is warranty? The definition of the

1
Executive Engineer, Denkanal Minor Irrigation Division v NC Budharaj (2002) 2 SCC 721.

1
warranty cam be gathered from the Section 12(3) which is (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.

These are the core theme lines from the Sales of Goods act aro.und which the given case is
revolving

The appeal in the Supreme Court against the order of the High Court of the Kerala was raised
by the Appellants under Special Leave petition, based upon the under given facts of the
present case.

It was alleged that the appellants and the respondent came into the contract for the sale and
purchase of a cow and calf for a sum of INR 1600. But after some time the appellant (buyer)
urged that the cow did not yield the quantity of milk which the respondent had stated it would
yield and was suffering from an incurable disease which was concealed from the appellant by
the respondent.

For the reason mentioned the appellant (buyer) urged the respondent(seller) to purchase the
same cow and calf for the same amount as paid by him to the respondent. On this proposal by
the appellant, respondent agreed to repurchase the cow and calf from him for the sum of Rs.
1600

On pursuance of the further contract made the cow and calf was delivered by the appellant
(seller in second contract) to the respondent (buyer in the second contract). The respondent
acknowledged the delivery by the appellant on October 27, 1976. In spite of repeated
demands made by the appellant, including by his advocate's letter dates September 17, 1977,
the respondent failed and neglected to pay to the appellant the said sum of Rs. 1600 or any
part thereof though he went on promising to do so by his letters dated November 25, 1976,
December 30, 1976, and May 19, 1977. Then the appellant filed a suit for the recovery of the
interest as damages for the non payment of the amount on time.

The main contention from the side of the respondent was that he is not liable to pay the
damages as he was a debtor in the meaning of the Kerala Debtors (Temporary Relief) Act,
1975. This act was for the relief of the debtors from their liabilities which they have to be

2
paid. This was a temporary legislation which was further made permanent by the Kerala Debt
Relief Act, 1977.
Background.
ISSUE INVOLVED.
1. Whether the amount claimed by the appellant in a suit filed by him against the
respondent was a "debt" within the meaning of that expression as defined in cl. (3) of
S. 2 of the Kerala Debt Relief Act, 1977.

COURTS OPINION.

This case was taken by the appellants and the respondents to the various levels of the
judiciary and the opinion of all the courts is necessary here to be followed.
The issue in the court was that the amount taken by the respondents from the appellants is a
debt or not and whether he is exempted from it or not.
The Supreme Court first solved the question about the Kerala Debt Relief Act and its
provisions and then analysed the reasoning of every court.

The Clause (3) of the Section 2 of the Kerala Debt Relief Act, 1977 defines the term debt.
The material provisions of the said definition are:
"(3) "debt" means any liability in cash or kind, whether secured or unsecured, due from or
incurred by a debtor on or before the date of commencement of this Act, whether payable
under a contract, or under a decree or order of any court, or otherwise, and subsisting on that
date, but does not include
(f) any debt which represents the price of goods purchased; or"
The clause (4) of the same act defines debtor as "any person whose annual income does not
exceed three thousand rupees from whom any debt is due."
Section 3 of the Kerala Debt Relief act is related to the discharge of the debt of the debtor to
the creditor wholly.
On the basis of these sections all the courts in the hierarchy delivered their judgement.
The trial court left only one issue that whether the respondent is discharged as being a debtor
under the Kerala Debt Relief Act. The court decided that the annual income of the
respondent is less than Rs. 3000 and that he was a debtor under the meaning of the cl. (4) of
S. 2 of the Kerala Debt relief act. But the amount which is due to the appellant of the
respondent it was held by the Trial Court that the amount claimed by the appellant in the

3
suit was a debt which represented the price of goods purchased by the respondent and,
therefore, fall within execution (f) to cl. (3) of S. 2 of the said Act. The respondent also raised
another contention that the cow and calf cannot be considered as goods but the trial court
rejected this contention. On the basis of this trial court passed a decree in favour of appellant.
High Courts Opinion.
When the matter went to the Kerala High court the court decided that the said amount which
is to be paid cannot fall under the Section 2 cl.3 execution sub-clause (f), it did not consider
whether he is a debtor or not under Section 2 cl. 4 of the Kerala Debt Relief Act as this was
delivered in affirmative and appeal was only for determining the money to be paid whether
falls under the exception clause. The reasoning behind the judgement was that the respondent
here taking back i.e., refunding the amount as the livestock was not as required so it cannot
be said that this represents the price of goods purchased, as he is returning the amount which
is already paid to him. It may be equivalent to the price of goods purchased. Hence the case
was decided in favour of respondent.
Supreme Courts Opinion.
The Honourable Apex Court rejecting the reasoning given by the High Court stated that, the
High Court cant understand the true nature of the transaction between the parties. The claim
from the side of the appellant is the claim for the price of the goods resold not for the refund
of the money, so there was no requirement to look upon whether the refund amount is in the
exception clause of Section 2 cl. 3. Both parties at the level of the Trial Court agreed that the
there was an agreement for sale for amount Rs. 1500 and the cow and calf was delivered in
the performance of the contract. The High Court overlooked that that the respondent dropped
his contention regarding the transaction in question.
Moreover the case of the appellant is not based that the amount of milk yield from the cow is
the condition of the contract so that he can reject the goods and have refund. This is only a
warranty and for the breach of it he cannot reject the goods and only remedies are in the Sec.
59 of the Sales of Goods Act. The appellants claim is not based on the breach of warranty, it
is based on the fact that he took back the cow and calf to the respondent he repurchase it.
So, this is a case of resale of the goods. A resale of the goods also a sale of goods and the
money consideration paid is the price payable for the resale. The money consideration for
such resale is the price of the goods sold and easily falls under the definition of price given in
Sec. 2 of Sales of goods act. So the view taken by the High Court was wrong, as the money
consideration to be paid represents the price to be paid. Hence the amount due to the
appellant can fall under the meaning of the debt and since such debts represents the price of

4
goods purchased; this is well under the exception (f) of sub-clause 3 of Section 2 of the
Kerala Debt Relief Act, 1977. The interest claimed by the appellant should be awarded under
Section 61 (2) of the Sales of goods act, though there was no agreement upon the interest to
be paid.
ANALYSIS.
The above case in question is more related to the discussion that the price which respondent
has to pay is a debt and if affirmative then whether it falls under the exception clause. This
states that how judicial interpretation over the same issue. The Trial court and the Supreme
Court was in the favour of the appellant and they appreciated and analysed the transaction
between the appellant and respondent very well.
However the Trial Court did not provide proper reasoning why the amount which is to be
paid is in the exception or how it represents the price of the goods purchased. But the
Supreme Court thoroughly discussed the case with the eliminating all possibilities on which
the High Courts opinion was based. The Apex Court considered that this is not a case of
refund still they dwelled in the facts of the case so that whether there may be any situation by
which they can seek to treat the transaction as one of refund. Supreme Court rejected the
contention as the case is considered to be of resale and it is the obiter dicta that the a person
purchased the goods from one person then selling of the same good to the third person or
again to the seller considered to be the resale of the goods. No matter that the goods are sold
to the same person.
The court properly considered the money consideration to be paid by the respondent to the
appellant on the basis of the transaction and considering that the appellants case is not for
refund but for the price which he defaulted interpreted that this is the price under the
definition of the Sales of goods act, and not paid becomes debt . So well in the exception that
the debt represents the price of the goods purchased by the debtor, hence not subject to the
said exception.
The High Court of Kerala pronounced the judgement without carefully analysing the
arrangement between the parties. The court overlooked the main fact of the case which is
easily visualised as the parties itself acknowledged about the agreement during appeal still
the erroneous judgement was produced. The judgement was not also properly supported by a
good reasoning, citing that this is a case of refund prima facie rejects the basis of the
judgement. Hence it was not uphill task for the Apex court on rejecting the pronouncement,
based on wrong footing. Such type of mistake must be avoided as this will question the

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judicial validity and trustworthiness among the professional and others. Such neglect of the
simple facts is grave injustice to the parties concerned.

Conclusion.
The above case is not truly based on the provisions of the Sales of Gooda