RAJIV GANDHI NATIONAL UNIVERSITY OF LAW,

PUNJAB

TOPIC- “Goods” under sales of goods act

Submitted to
Dr. Sangeeta Tak
(Assistant Professor of Law of contract)

Submitted by
Name: Anish Singh
Roll No. 21091

1
 ACKNOWLEDGEMENT

I would like to express my deep regards to Dr. Sangeeta Tak( Assistant

Professor of law) for her guidance and valuable feedback throughout the
duration of this project. His suggestions were of monumental help in the
completion of my project work. 
I would also like to express my gratitude to Rajiv Gandhi National
University of Law, Patiala for giving me the topic ‘ “Goods” under sales of
goods act’ which turned out to be an insightful and enriching experience for me.
I would also like to extend my acknowledgement to the Library staffs for
providing us access to their invaluable material and resources. At last, my
sincere appreciation to all those who inspired me; family and friends, their
selfless contributions to guide me throughout this research.

2
BONAFIDE CERTIFICATE
This is to confirm that the undertaking based on “goods” under sales of goods
act’ is a unique work of Pulastya Dwivedi who is a bonafide understudy of
Rajiv Gandhi National University of Law, Punjab. 
 
SIGNATURE  
~Anish Singh

3
TABLE OF CONTENTS:-

COVER PAGE...................................................................1

ACKNOWLEDGEMENT………………………………2

BONAFIDE CERTIFICATE……………………………3

TABLE OF CONTENTS.......................................………4

1. INTRODUCTION........................................................5

2.‘GOODS’ DEFINITION................................................6

3.DIFFERENCE BETWEEN THE ENGLISH LAW AND

THE INDIAN LAW”………………………………..6-10

4.IMPORTANT CASES……….............................…..9-11

5.CONCLUSION..................................................……14

6.BIBLIOGRAPHY......................................................15

4
Introduction:-

The Sales of Goods Act, 1930 governs contracts for the sale of commodities. It
encompasses the whole of India. Contracts for the sale of goods were regulated
by the Indian Contract Act, which establishes fundamental contract law
principles.
Although a contract for the sale of products has certain unique features, such as
ownership transfer, delivery rights and duties, and remedies for contract breach,
implicit conditions and assurances included in a contract for the sale of goods,
etc. The Sale of Goods Act, 1930, has provisions addressing these concerns.

1.1 The purpose and the objective of research:-

The purpose of the research is to examine the "goods" part of “The Sale of
Goods Act” and its legal ramifications. The purpose of this research is to
conduct an examination of the concept of "goods" and its exclusions.

1.2 Questions involved:-

The defined research topic for this project is to analyse and evaluate the
definition of "goods" under the 1930 sales of goods statute. This included being
acquainted with the statute's roots in English law, as well as its complex
ramifications.

1.3 Literature Review:-

The principal source cited in this study is Pollock and Mulla's "The Sale of
Goods Act." It benefited in the comprehension of tort law and its impact on
society, as well as how torts are a necessary component of our legal system.

1
Grewal, Shivbir S. "Risk of Loss in Goods Sold During Transit: A Comparative Study of the UN Convention on
Contracts for the International Sale of Goods, the UCC, and the British Sale of Goods Act." Loy. LA Int'l & Comp.
LJ 14 (1991): 93.

5
1.4 Methodology of Research
The utilisation of online publications and papers, as well as online databases,
was resorted to for the purposes of this project. Additionally, websites on the
internet were cited as secondary sources for the data gathering procedures used
in this investigation.

1.5 Research Gapp

Due to time restrictions, the research undertaken for this project was primarily
doctrinal in nature, and as a consequence, may be weak in the qualitative
department.

1.6 Thesis
The hypothesis developed at the study's commencement was the essential
concept behind the sales of goods act and its significance in the broader scope
of contracts, etc. This is explored further in the project by delving into the
notion of "goods" and its exclusions.

1.7 Chapter structure

On page iv of this project's table of contents, the chapterization scheme is
indicated.

‘Goods’ definition:-
To be considered "goods" under Section 2(7) of the "Act," "movable property"
includes any property that is not actionable claims or money, as well as any
stock and shares, growing crops and grass, and other items attached to or
forming part of the land that are agreed upon prior to sale or in the purchase
agreement's terms.

“Movable Property” defined:-

6
"Movable property" is defined in Section 3(36) of the General Clauses Act 1897
as "property of every kind except immovable property," which is defined as
"property of every kind except immovable property."According to Section 3(26)
of the same Act, "immovable property" includes "land, benefits derived from
land, and anything linked to the ground or permanently fixed to anything related
to the earth."

After reading the two paragraphs together, it is evident that anything connected
to the land may be referred to as "movable property," as long as the property in
issue has some degree of severability. When determining the nature of a
property, it is crucial to take severability into account. This factor is found by an
assessment of the property itself, as well as the parties' intent and the terms of
their contract with one another.

For instance, under S.2(7) of the Customs Code, lumber is classified as "goods."
Timber trees are considered as a commercial commodity since they are
harvested from their natural habitats for the purpose of sale.The case of Tata
Consultancy Services v. State of Andhra Pradesh had a clear result.Property, as
defined by the Sale of Items Act, was judged to contain both general and
specialised property over the items.The addition of the term "includes" broadens
the definition further, since it now includes not just commodities of the requisite
kind, but also those goods expressly permitted by the interpretation clause.

Difference Between The English Law And The Indian Law:-

According to Section 61(1) of the Sale of Goods Act 1979, "goods" in English
law include personal chattels, which are further classified into "choices in
possession" and "choices in action."Only the former is included in the English
definition of "goods," whereas the latter, which includes commodities such as

7
stocks, bonds, bills of exchange, and other negotiable instruments, is excluded
since they all represent actionable claims.

According to S.2(7), the Indian term is significantly more expansive than the
English definition, since it includes stocks and shares as "goods," but the
English definition does not include stocks and shares as "goods."The following
dispute is mostly about whether certain types of commodities should be
included or omitted from the definition of "goods."

Energy as "resources":-
Incorporating ethereal energy into the concept of products is a significant step
forward. Electricity is not a "good" under English law since it lacks physical
components. Although the terms "thing" and "article," as well as the word
"tangible personal property," have been used in English legal judgments, there
has yet to be a judgement defining electricity as "goods" for the meaning of the
Sale of Goods Act, which would be a first.When it comes to legal ownership of
electrical energy, however, "it is capable of being retained or stored only
through affecting the physical or chemical state of another entity that is itself
the subject of possession."In India, on the other hand, the situation is entirely
different. The Calcutta High Court's ruling in Associated Power Company v.
R.T. Roy established that electricity comes under the definition of 'goods' under
Article 366 (12) of the Constitution and Section 2 (7) of the Electricity Act.

According to a Madras High Court judgement, electricity is a 'good' since it is

capable of delivery, and the learned judge said that it makes no difference
whether the electricity is in the form of physical or ethereal energy.The Law
Commission of India recommended in its eighth report that electricity and water

8
be included in the definition of 'goods' under Section 2(7) of the 'Act' to broaden
its scope.2

When the Supreme Court of India heard a case contesting the definition of
"goods" under the Madhya Pradesh Sales Tax Act (2 of 1959), it determined
that the term "goods" included all sorts of transportable property.

Additionally, the court concluded the following:"The term "movable property"

as applied to "goods" as defined for sales tax purposes cannot be construed
narrowly, and simply because electric energy is not tangible or cannot be moved
or touched in the same way that, say, a piece of wood or a book can, it does not
cease to be movable property when it possesses all of the characteristics of such
property.It is entitled to the same rights as other movable property in terms of
transmission, transfer, delivery, storage, and ownership."

Despite Pollock and Mulla's reservations about the Act's application to

electricity, they do so because the public entity distributing "electricity" has no
contractual obligation to furnish these "goods," as they note in their comments.
Provision of such products would not qualify as "sale" under Section 102 of the
'Act."

As a consequence, any lapse or failure by a public institution to deliver energy

would be governed by the standards set out in the statute regulating the public
body in issue.

As a result, although "electricity" is described as a "good," the applicability of

the "Act" to electricity sales is debatable.

2
Maini, B. N., Charanadithiya, Sharma, M., kaur, G., & Daagba, I. (2019, March 22). "goods" under the
sale of Goods Act, 1930. Academike. Retrieved April 27, 2022, from
https://www.lawctopus.com/academike/goods-under-the-sale-of-goods-act-1930/

9
Lottery tickets are expressly excluded from the "goods" category.
A lottery, according to Black's Law Dictionary, is "a chance to win a prize in
return for a charge."Lottery tickets are indisputably movable property for the
purposes of the 'Act;' but, whether they form an actionable claim under Section
3 of the 1882 Transfer of Property Act has been a point of debate.

In H. Anraj v. Government of Tamil Nadu, the Supreme Court found that

buying a lottery ticket primarily included two rights: (1) the right to participate
in the draw and (2) the right to win the prize depending on the conclusion of the
drawing.

In that case, it was determined that the former right constituted a "transfer of a
beneficial interest in movable goods" and thus qualified as a sale within the
meaning of Article 366 (29-A) (d) of the Constitution, whereas the latter right
qualified as a "choice in action" and thus did not qualify as "goods" for sales tax
purposes.

On the other hand, a later Supreme Court ruling, Sunrise Associates v.

Government of the National Capital Territory of Delhi, reversed this judgment's
conclusion.

The sale of a lottery ticket was ruled to be the sale of a claim that may be
prosecuted in court. Given this rationale, the Court decided that there was no
difference between a buyer's right to win and a buyer's right to participate in a
lottery draw, since the buyer pays the consideration for the buyer's right to win.3

3
Maini, B. N., Charanadithiya, Sharma, M., kaur, G., & Daagba, I. (2019, March 22). "goods" under the sale
of Goods Act, 1930. Academike. Retrieved April 27, 2022, from
https://www.lawctopus.com/academike/goods-under-the-sale-of-goods-act-1930/

10
The right to participate was classed mistakenly as a "right in praesenti," whilst
the right to win was classified incorrectly as a "right in futuro," implying that
both of these rights are "rights in futuro."

As a result, the prior judgement was partially overturned, and "lottery tickets"
were removed from the category of "goods."

Concerns about software applications are understandable.

The Supreme Court declared in TCS (Tata Consultancy Services) v. State of

Andhra Pradesh that a software programme on a CD or floppy drive qualifies as
a "good" for the purposes of California's sales tax.

Consider software programmes as collections of instructions or commands sent

to a computer in order to do a certain task.

The primary issue is whether or whether software programmes, which are

intellectual creations of the human mind, should be defined as "goods" for the
purposes of the 'Act.'

International Computers Ltd v. St Albans City and District Council was a

seminal judgement. Sir Iain Glidewell observed in this regard that a hardware
device is useless without accompanying software, that software must be
contained in a physical medium such as a CD or a Floppy Disk, and that if the
disc is sold with a defect in the programme, the disc manufacturer will be held
liable for the defect.As a consequence, he determined that both the physical disc
and the software programme would fall within the definition of "goods." A
particular reference was made in the TCS case (above), in which the learned
court ruled that once a software programme is transferred to an external storage

11
medium, such as a CD-ROM or an external floppy drive, it ceases to be an
intellectual work.

This is primarily because each of these channels has developed into a distinct
commercial product in its own right.The "marketability" of a commodity
determined whether it was classified as a "good."According to certain experts,
"operational software" that has been downloaded does not lose its physical
nature.

Additionally, there has been debate about whether or not computer software
should be included in the definition of "goods" as defined in Section 2[41] of
the Uniform Commercial Code, 1952.

Because "custom designed" computer software is the outcome of a labor-

intensive process, it is argued that it should be provided as a service rather than
an object. Although the majority of software programmes are available
independently, they are often marketed in pre-packaged bundles, much like any
other consumable product.

Contracts for the supply of data processing services, on the other hand, have
been determined by courts to be contracts for "services" rather than
"goods."With this explanation in hand, it is clear that, despite the fact that
"computer software" is an intangible commodity, it may be included in the
definition of "goods" for the purposes of the 'Act.'

The definition's exclusion of the phrase "Money"

Money is specifically excluded from the definition of "goods" in Section 2(7)
of the 'Act,' since money is the means of exchange used to conclude the sale of

12
goods.As a consequence, money is no longer seen as a "chattel," but as a "sui
generis" item.On the other hand, a coin intended for sale as a novelty item is
referred to as a "good," since it is passed on as a commodity rather than a unit of
money.

Conclusion:-
This research study aims to shed light on some of the most contentious issues
surrounding certain commodities and their classification as "goods" under
Section 2(7) of the 'Act'. The dispute aimed to establish that although
"electricity" (despite its intangible nature) falls within the ambit of
commodities, lottery tickets (which are, by definition, movable objects) are
excluded from the ambit of goods due to their status as "actionable claims."

This enables us to illustrate that being a transportable property does not always
imply being a "good," as is sometimes assumed. Additionally, the debate over
software programmes highlighted the critical nature of the "marketability"
component of "goods."

As a consequence of the rapid breakthroughs in science and technology, it is

apparent that the definition of goods cannot be segregated into straight jacket
divisions, and as a result, the breadth of this section will continue to increase in
the future.
Bibliography:-
https://www.lawctopus.com/academike/goods-under-the-sale-of-
goods-act-1930/
http://www.gstatic.com/generate_204
https://www.latestlaws.com/latest-caselaw/2021/january/2021-latest-
caselaw-21-sc/

13
https://blog.ipleaders.in/condition-and-warranties-on-sale-of-goods/?
amp=1

14