BADRI PRASAD versus STATE OF MADHYA PRADESH AND ANOTHER

Citation: [1965] 3 S.C.R. 381 · Decided: 16-03-1965 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
D 
B 
F 
G 
H 
BADRI PRASAD 
v. 
STATE OF MADHYA PRADESH AND ANOTHER 
March 16, 1965 
381 
[P. B. GAJENDRAGADKAR, C. J., RAGHUBAR DAYAL AND V. RAMA-
SWAMI, JJ.J 
Sale of Goods Act (3 of 1930), s. 20-Auction of cut timber of 
forest-Delivery-Destruction by fire before removal-Formal con-
tract signed by competent authority later-If property in timbe1" 
passed. 
The 2nd respondent purchased on 24th December 1956, at a 
public auction sale held by the Divisional Forest Officer, the cut 
timber of a couP€ and paid the first instalment of the purchase price 
immediately. The appellant stood surety for the payment of the 
remaining three instalments. The coupe was divided into 4 sections 
according to the r11les which were deemed to be part of the con-
tract and the boundary certificates was furnished to the 2nd respon-
dent on 5th February 1957. He began operations in the 1st section 
on the last week of February, but defaulted in the payment of the 
2nd instalment which was due on 1st March 1957, and so, on 25th 
April the apP€llant and 2nd respondent were informed by the forest 
authorities, that no further removal of the timber would be allowed, 
as the value of timber already removed exceeded the a-mount paid. 
On 28th April, a fire broke out and the timber sold to the 2nd res-
pondent ceased to exist. On 3rd May 1957, the formal deed of con-
tract, which was signed by the 2nd respondent and the Divisional 
Forest Officer on 24th December, was signed by the Chief Conserva-
tor of Forests, as required by the rules. Since the 2nd respondent had 
not paid the later instalments proceedings were commenced by the 
1st respondent against the appellant, whereupon he filed a suit for 
restraining the 1st respondent from continuing the proce.edings. The 
suit was decreed by the trial court, but dismissed on appeal, by the 
High Court. 
In his appeal to this Court, the apP€llant contended that the 2nd 
respondent had not been put in possernion of the timber sold, except 
the portion on the 1st section of the coupe, that there was no trans-
fer of property in the timber and therefore he was not liable to pay 
the amounts due on the other 3 instalments, the transfer of proper-
ty in the timber being a condition precedent to his lfability. 
HELD: 
There was an unconditional contract for the sale of 
specific goods in a deliverable state, the property in the timber 
passed to the 2nd respondent when the contract was made on 24th 
December 1956 under s 20 of the Sale of Goods Act, 1930, and posses-
sion was also given on 5th February 1957. Therefore, the appellant's 
suit was rightly dismissed by the High Court (391 HJ 
The timber was sufficiently identifiable and was therefore spe-
cified goods and there was nothing in the contract postponing posses-
sion till the other instalments have been paid. 
The fact that the 
contract was signed by the Chi€f Conservator, after fire had broken 
out has no effect on the validity of the contract, or on the question 
of delivery of possession or on the passing of property in the timber. 
The instructions in the Forest Manual about execution of contra<·ts 
plainly take h1to 
the lar:se of time br;. 
... ,,,,. 
.. ,, ·:> 
382 
SUPREME COURT REPORTS 
[1965] 3 S.C.11. 
tion by the lessee and by the competent forest authority, and 
A 
therefore, the date on which the Chief Conservator signed had not 
any real effect on the actual date on which the sale of the timber 
took place. It was also with'n the realm c.f possibility that the timber 
might be lost on account of fire or other risk, before the contract 
was formally signed. The sale of the timber to the 2nd respondent 
was therefore final on 24th December, the date of sale, subject to 
the acceptance of his b'.d by the competent authority. [387 E-H; 
B 
388 F; 393 A-BJ 
Williams v. North China Instlrance Co., L.R. (1876)! C.1".D. 757, 
applied. 
Rule 8 of the Forest Contract Rules empowers the Divisional 
Forest Officer to stop the removal ·of the timber en his finding that 
the value of the timber already removed exceeded the amount of 
instalments pa'd, But, that would not amount to reserving a right 
of disposal in the State, because, the rules provide that though ordi-
narily the timber should be sold for cash payment in full, payment 
in instalments could be cons'dered as payment in full, if a right in 
accordance with r. 8 is reserved. When a contractor is deemed to have 
paid in full the price, there could be no occas'on fer the G

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