ABSTRACT

Section-18 in the Sale of Goods Act, 1930

Introduction:-
Goods must be ascertained. Where there is a contract for the sale of unascertained
goods, no property in the goods is transferred to the buyer unless and until the goods
are ascertained.
The case laws are:-
 The Minerals And Metals Trading vs Madras Electrical Contractors.
That section lays down that where there is a contract for the sale of
unascertained goods, no property in the goods is transferred to the buyer unless
and until the goods are ascertained". In the present case, as we have already
said it is not in dispute that the goods covered by the pucca delivery orders are
not ascertained at the time such orders are issued and ascertainment takes place
in the shape of appropriation when the goods are actually delivered in
compliance therewith. Therefore, till appropriation takes place and goods are
actually delivered, they are not ascertained. The contract therefore represented
by the pucca delivery orders is a contract for the sale of unascertained goods
and no property in the goods is transferred to the buyer in view of Section 18 of
the Indian Sale of Goods Act till the goods are ascertained by appropriation,
which in this case takes place at the time only of actual delivery. 1

 Sangameshwar Coffee Estate Ltd. vs Commissioner Of Income-Tax.

In this case the assessee is a company owning coffee estates. There were a
number of standing trees in the coffee plantations, including rose-wood trees.
On July 15, 1970, the assessee-company entered into an agreement with a
timber merchant to sell for total consideration of Rs. 7,25,000 standing rose-
wood trees numbering 200, to be felled and removed by the purchaser at his
cost. During the year of account ended March 31, 1971, the purchaser had
felled and removed as many as 150 trees and had paid the assessee-company
Rs. 6,25,000. Having regard to all the circumstances aforesaid, we are satisfied
that the sale of the trees numbering 200 in all took place in the year ended
March 31, 1971, corresponding to the assessment year 1971-72. It follows that
the entirety of the consideration named in the agreement of sale, must be
regarded as forming the full value of the consideration for the said sale. In this
view, we answer both the questions referred to us in the affirmative and against
the assessee.2

1
(1999) 1 MLJ 487
2
1980 58 STC 208
  The State Of Andhra Pradesh Rep.vs M/S.Itc Bhadrachalam Paper.
The respondent, in these Tax Revision Cases, manufactures paper and paper
boards, and is a company registered under the Companies Act. They
established an industrial unit, at Sarapaka The declaration of law by the
Division Bench, in Andhra Pradesh Paper Mills Ltd2, was only after an
elaborate and exhaustive consideration of all the terms and conditions of the
agreement, the provisions of the APGST Act and the Sale of Goods Act. We
see no reason, therefore, to take a different view. village, Khammam District -
a schedule area, for manufacture of paper and paperboards. They commenced
commercial production from 01.10.1979. Agreements were entered into, from
time to time, between the Government of Andhra Pradesh and the respondent-
company for grant of long term leases of forest land for making bamboo
available, for the consumption of the respondent, at their paper mills.3

 Dan Singh Bisht vs Firm Janki Saran Kailash Chander.

The dispute between the parties relates to their rights to certain standing timber
in the district of Bijnor and Naini Tal. Raja Gajendra Shah was the owner of
considerable property in the districts of Moradabad, Shahjahanpur, Bijnor and
Naini Tal. On 22nd December 1941, he entered into an unregistered agreement
with Lala Romesh Chand Goel, proprietor of the firm Lala Janki Sarau Kailash
Chandra, who were the plaintiffs to this action. We shall have occasion to
quote the relevant portions of this agreement. Briefly it may be mentioned that
it gave the plaintiffs a right to cut and remove certain timber trees of certain
girth by, 21st December 1948, that is during a period of seven years, for a sum
of Rs. 25,000 which was to be paid in certain instalments, the last instalment
being payable on 30th June 1943. After the agreement was entered into, the
plaintiffs started cutting and removing the trees. he result, therefore, is that the
appeal is allowed, the decree of the lower Court is set aside and the plaintiffs'
suit is dismissed with costs in both the Courts.4

 Ishri Mul And Ors. vs Goasain Chaturbhuj Dut And Ors.

A revenue-paying estate called mehal Sonbursa was jointly owned by a number
of proprietors, three sets of whom appear to have opened, under Section 10 of
Act XI of 1859, separate accounts in the Collector's Register for the payment of
their respective shares of the Government revenue. The plaintiffs, who were the
proprietors of the remaining share of the estate, were liable for the share of the
revenue in respect thereof. This disposes of the second ground on which the
suit has been decreed and on that ground too I think the appellants are entitled
to succeed. I agree with Mr. Justice Beverley that the appeal must be allowed,
and the suit dismissed with costs in both Courts.5
3
(1985) 60 STC 213
4
AIR 1948 All 396
5
(1894) ILR 21 Cal 844.
Submitted by :-
D.Sumanth
18LLB120