R. Rajendra Babu, J.
1. Eternit Everest Ltd., Coimbatore, the Suppl. 3rd defendant in O.S. 16/1987 before the Sub Court, Ottapalam, is the appellant. C.G. Abraham, the 1st respondent herein, filed the suit claiming damages against the 1st defendant, Everest Building Products Ltd., Podanur, Coimbatore, and the 2nd defendant, Haridas Bhagath and Co. (P) Ltd., Coimbatore. During the pendency of the suit the 1st defendant company was taken over by the suppl. 3rd defendant-appellant and hence the suppl. 3rd defendant was impleaded in the suit. The court below decreed the suit partly allowing damages. The above judgment and decree are under challenge in this appeal.
2. The case of the plaintiff as revealed from the plaint briefly was as follows: The 1st respondent-plaintiff had constructed a new cinema theatre by name 'Geetha Theatre', at Shornur, and for the roofing of the above theatre, the plaintiff purchased asbestos sheets and accessories manufactured by the 1st defendant from its agent, the 2nd defendant on 6.11.1985 by invoice No. 10699 for a total value of Rs. 45815/-. The roofing work was completed in December, 1985. When the monsoon started in June, 1986, the sheets were found leaking. Accordingly the plaintiff sent a representation to the 1st defendant, and the officials of the 1st defendant, the manufacturer, advised the plaintiff to provide more ventilations at the ridge level. Accordingly ventilations were provided at the ridge level. Even then the leaking during monsoons continued and there was no change. The officials of the manufacturer again visited the theatre and they opined that the dripping of water was due to the condensation of moisture inside the structure during rainy season and it could be rectified by providing proper ventilations. Though the officials of the manufacturer were fully convinced that the leaking was due to the manufacturing defect of the asbestos sheets, yet they advised to provide sufficient number of radial exhausts and accordingly the plaintiff purchased sufficient number of radial exhausts on 23.7.1986 and those were installed. Yet there was no change to the leaking. The officials of the manufacturer further advised for providing lime coating and the plaintiff provided lime coating over a portion on an experimental basis, but even then the leakage could not be arrested. The leakage, in fact, was due to the defective material and bad quality of the asbestos sheets and it was a manufacturing defect. There was an implied warranty by continuous trade practice and usage that the goods were effective and fault proof for the purpose for which it was used ie., in respect of the quality of the Everest Asbestos Sheets purchased. As the sheets were of substandard quality and the sheets could not be used for the purpose for which it was purchased, the plaintiff was entitled to damages. It was further alleged that due to the leakage, material damage was caused to the ceiling made of plaster of paris and further amount had to be invested for putting waterproofs on the plaster of paris for saving the same from further damage. Thus the plaintiff claimed a total amount of Rs. 50565/- towards damages.
3. The 1st defendant, the manufacturer, filed a written statement contending that the court below had no territorial jurisdiction for considering the above claim as the sale was made and the goods were delivered at Coimbatore and also that the materials were purchased from the 2nd defendant and thus there was no privity of contract between the manufacturer and the plaintiff. The dripping of water was due to the condensation of moisture inside the structure as during rain the humidity inside the theatre would be very high and the atmosphere outside would cool down and the water vapor inside the structure would condense resulting the dripping of water inside and, if proper ventilation was provided, the dripping could be avoided. They denied the allegation that the materials supplied were of low quality. It was contended that there was no manufacturing defect, and the sheets were manufactured in accordance with the standard prescribed by the Indian Standards Institution as well as the British Standards specifications. The sheets were devoid of any defects and the dripping was due to the improper and defective construction of the theatre. There was no implied warranty as alleged and the 1st defendant prayed for a dismissal of the suit.
4. The 2nd defendant and the suppl. 3rd defendant adopted the above contentions put forward by the 1st defendant.
5. The court below framed the following issues:
1. Whether the court has jurisdiction to try the suit?
2. Whether there is any implied warranty of title in respect of the goods purchased by the plaintiff?
3. Whether the plaintiff is entitled to any and if so to what damages?
6. PWs. 1 and 2 were examined and Exts. A1 to A13 were marked on the side of the plaintiff. DW1 was examined and Exts. B1 to B3 were marked on the side of the 1st defendant. Exts. C1 to C3 were also marked. After considering the entire evidence the court below found that the Court had territorial jurisdiction to try the case and that the leakage was as a result of the defect in the manufacture of the asbestos sheets and the plaintiff was entitled to damages. Accordingly the sail was decreed for an amount of Rs. 39111.25 with interest at 6%. Aggrieved by the above judgment and decree, the suppl. 3rd defendant has come up in appeal.
7. Heard the learned counsel for the appellant and the 1st respondent.
8. The question that had come up for consideration was whether there was any implied warranty as to the quality of the asbestos sheets sold to the 1st respondent-plaintiff. Admittedly the 1st respondent placed an order with the 2nd defendant for the supply of semi corrugated Everest asbestos sheets and accessories during October 1985. By Ext. A13 letter dt. 28.10.1985 the 2nd defendant Haridas Bhagath & Co. Pvt. Ltd., Coimbatore, informed the 1st respondent-plaintiff that the goods shall be sent during the first week of November. Ext. A13 would refer to the receipt of an amount of Rs. 10,000/- towards advance and there was a further request for sending the balance amount. The goods were sent by the 2nd defendant to the plaintiff by Ext- A1 invoice dt. 6.11.1985. The roofing work of the theatre was completed by December 1985. During the monsoon it was found that there was leaking of the asbestos sheets. Admittedly the matter had been informed to the 1st defendant, the manufacturer, and their representatives were deputed for inspection of the theatre and for advising suitable remedial measures. The manufacturer was of the opinion that the dripping of water during monsoon season was due to the condensation of moisture inside the theatre due to the lack of proper ventilation. Accordingly the manufacturer's representatives advised the plaintiff to provide further ventilation at the ridge level. Though the above modification was made, it was of no avail in preventing the leakage. Thereafter the manufacturer advised to provide radial exhausts. Though sufficient number of radial exhausts were provided, the leaking could not be controlled and the leaking still continued.
9. The manufacturer further raised a contention that the leaking was due to the defect in the construction of the theatre. Sri. T.R. Ajayan (PW3), Executive Engineer, Palakkad, was appointed as the Commissioner to inspect the theatre and to file a report. He inspected the theatre on 11 A. 1989 in the presence of Sri. U.K. Rajaram, Architect attached with Rajaram and Associates, Coimbatore, and filed Ext. C1 report. The Commissioner had noticed fissures in several sheets and had opined that such fissures would occur due to defective curing of the sheets; and if fissures were there, water would definitely leak and drip. He further opined that even without fissures, water can leak and drip if the sheets were not cured for the full period and there was any defect in curing also. He was of the definite opinion that the leakage and dripping of water was not due to any structural defect of the theatre, or lack of ventilation or because of water entering through the overlaps, but was solely due to the defective quality of the asbestos sheets. The Commissioner was examined as PW2 and he had given evidence in support of his report. Though he was cross-examined by the learned counsel for the manufacturer, nothing could be brought out to discredit his evidence or his report.
10. The learned counsel for the appellant placed much reliance on Ext. C3 test certificate of National Test House, Calcutta, dt. 17.7.91. Even the oral evidence let in by DW. 1 Ramakrishnan, the Quality Controller of the 1st defendant company, would reveal that there could be difference in the water absorption due to exposure of the asbestos sheets to sun and rain for a pretty long time. Ext. C3 report was obtained in 1991 ie., after more than six years of the exposure of the article to sun and rain and as such much reliance cannot be placed on the above report. The evidence as a whole would establish that the leakage of the asbestos sheets was due to the defect in the manufacture of the sheets.
11. The learned counsel for the appellant submitted that there was no warranty either express or implied so far as the sale of the asbestos sheets were concerned as the purchaser had gone to the 2nd defendant, inspected the sheets and purchased the same after fully satisfied as to the quality of the same. But the evidence was not to that effect as Ext. A13 letter sent by the 2nd defendant would reveal that an order was placed in October 1985 and the articles were despatched only during November, 1985, The recital in Ext. A13 'As soon as the sheets are ready for delivery, we will inform you over phone' would indicate that the articles were not available when the order was placed. Even if the plaintiff had examined the articles, the possibility of ascertaining latent defects of the product was too remote. The seller also was fully aware that the asbestos sheets were intended for the roofing of the theatre. The quality of asbestos sheets intended for roofing purpose cannot be ascertained by mere perusal and the quality can be ascertained only by use. The percentage of water absorption of the sheets was the main aspect which would decide the quality of the same and the above could be ascertained only by exposure of the article to sun and rain and not by mere sight.
12. The learned counsel for the 1st respondent submitted that there was an implied warranty as to the quality of the article which was sold in view of Section 16 of the Sale of Goods Act. Section 16 of the Sale of Goods Act which deals with the implied warranty reads:-
'Implied conditions as to quality or fitness.
Subject to the provisions of this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:-
(1) Where the buyer, expressly or by implication makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be reasonably fit for such purpose:
Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name, there is no implied condition as its fitness for any particular purpose. (2) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality.
Provided that, if the buyer has examined the goods, there shall be no implied condition as regards defects which such examination ought to have revealed. (3) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.
(4) An express warranty or condition does not negative a warranty or condition implied by this Act unless inconsistent therewith'.
Sub-section (1) of Section 16 of the Sale of Goods Act (for short, the Act) deals with the implied conditions as to the quality or fitness of the articles sold. Section 16 is an exception to the rule of 'caveat emptor'. The rule of 'caveat emptor' applies whenever the buyer voluntarily chooses what he buys. But it does not mean that the buyer should 'take chance' but it means he should 'take care'. The most important exception to the rule of 'caveat emptor' are the implied condition of fitness for a particular purpose and the merchantableness of the product. When a man sells an article, he thereby warrants that it is merchantable ie., it is fit for some purpose and if he sells it for some particular purpose, he thereby warrants it for that purpose. In order to attract Section 16 it has to be proved that the buyer expressly or by implication had made known to the seller the particular purpose for which the goods were purchased. Ext. A13 letter sent by the 2nd respondent coupled with the invoice showing the sale of the sheets with assessories for the roofing would indicate that the purpose of purchase of the semi corrugated asbestos sheets was for roofing and that had been disclosed too. Moreover, the corrugated asbestos sheets are mainly used for roofing of buildings for protecting the building from sun and rain and it is not being used for a variety of purposes. The leakproof of the asbestos sheet is the essential quality of the sheets and only if it is leakproof, it can be said to be fit for the purpose for which it is purchased. The evidence would further reveal that the plaintiff wanted Everest asbestos sheets and Everest asbestos sheets had the reputation regarding its quality. Thus the plaintiff was trusting to the judgment or the skill of the 1st defendant, the manufacturer, or the dealer and thus there was an implied term of warranty that the articles would be reasonably fit for the purpose to which it was applied. The evidence would further reveal that the asbestos sheets supplied by the 2nd defendant had manufacturing defect and thereby it was leaking during rainy season. Ext. C1 report would further reveal that fissures were there on the sheets and that could be due to defective curing also. As the article was purchased for a specific purpose and it was disclosed to the seller, Sub-section (1) of Section 16 would be attracted and there was an implied warranty as to the quality of the articles sold that it was fit for the purpose for which it was sold.
13. The learned counsel for the appellant submitted that the proviso to Sub-section (1) of Section 16 would be applicable and as such there could not be any implied warranty. The asbestos sheets were purchased not in its trade name so as to attract the proviso, but it was purchased disclosing the purpose of purchase. Though such an argument was advanced, the learned counsel for the appellant could not convince how the proviso to Section 16(1) would be applicable in the present case. Further Sub-section (2) of Section 16 also would be attracted as the above article should be of mercantile quality. An implied warranty of merchantilability of the goods, ie., the goods were free from latent defects, was also there. Thus, Section 16 of the Sale of Goods Act would be applicable and there was an implied warranty as to the quality or fitness for the particular purpose for which the goods were sold. Hence there was a breach of the implied warranty as the goods did not conform to the quality or fitness for the purpose for which it was purchased.
14. Another argument advanced by the learned counsel for the appellant was that the 1st respondent had filed the suit for damages after using and retaining the articles. It was further argued that Section 59 of the Sale of Goods Act does not allow such a claim for compensation. Though the entire value of the goods had been claimed towards damages, the court below allowed only 75% of the value of the goods. Further some amount was allowed towards the expenditure met by the 1st respondent in arranging additional facilities for avoiding leakage. Even in the plaint it was alleged that as a result of the leakage, the ceiling made of plaster of paris had been damaged and additional amount had to be spent for safeguarding the above ceiling. Thus additional expenditure had to be met by the 1st respondent for safeguarding the ceiling due to the dripping of water from the roof by providing pitamin coated Hassan clothes over the plaster of paris over the entire area. It was a case where the 1st respondent was entitled to compensation under Sub-section (2) of Section 59 also. Thus the 1st respondent was entitled to compensation for the breach of the implied warranty. The Court below was fully justified in granting a decree for a portion of the claim put forward in the plaint and I see no reasons to interfere with the amount decreed by the Court below.
15. Another argument advanced by the learned counsel for the appellant was that the Court below had no territorial jurisdiction to try the suit as the sale took place at Coimbatore in Tamil Nadu. The article were sold for being used at Shornur. Only by the use of the articles the latent defect of the material could be ascertained and thereby the cause of action for damages arose. The court below found that it had jurisdiction to decide the matter. Though a contention as to the jurisdiction was raised, the appellant did not move the court below to consider the above issue on jurisdiction as a preliminary issue and to decide the same before taking evidence. The judgment would further reveal that the above issue was not canvassed too. No reasons are there to disbelieve the above recital. On these circumstances I find no reasons to interfere with the above finding of the court below on jurisdiction. Thus this appeal has only to be dismissed.
In the result this appeal is dismissed. The parties will suffer their respective costs.