Calcutta High Court Utilises Clean Hands Doctrine To Deny Claim To Buyer in Default of Scheduled Payment

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Introduction

The Petitioner in the following case requested delivery of the machine from the Respondent as per the contract signed between the parties, which the Respondent was unable to provide.

Facts of the Case

The Petitioner entered into a contract with the Respondent for the purchase of coal mining machinery. The contract consisted of building and delivery of 2 machines and scheduled the payment in instalments. As per the contract, Machine was to be delivered by April 30, 2020, and the payment for machinery was to be done before the delivery. But none of the above conditions were fulfilled. The Petitioner filed a case with the Court regarding the delivery of the machinery.

Petitioner’s Arguments

The Counsel representing the Petitioner argued that the contract signed between the parties cannot be terminated. Same was mentioned in the contract. The Counsel argued that the delivery of machinery, as per the contract, was not made. The Counsel argued that the machinery belonging to the Petitioner was directed to the Respondents’ use illegally and caused financial loss to the Petitioner. The Petitioner mentioned that the Receiver appointed by the Court could not find the machinery in manufacturers’ plant.  

Respondent’s Arguments

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The Respondent argued that the delay in delivery of machinery was caused by a delay in the scheduled payment by the Petitioner. The Petitioner also required different machinery with different specifications and that caused the delay in delivery. The Petitioner argued that as per the contract, the title of the machinery would be transferred to the Petitioner on the delivery of the machinery and when the payment was wholly received. The Counsel also stated that the Petitioner had made false accusations with the proof of recorded emails between both parties. 

Court’s Judgement

The Court stated that the burden of the proof lay on the Petitioner. In the following case, the Petitioner was unable to provide any proof. The Respondent also could not produce the whereabouts of the machinery that the Petitioner claims. It was already admitted that the entire amount of the machinery was not paid by the Petitioner. It was also admitted that the Respondent did not have machinery in a deliverable state. Referring to the contract signed between the parties. The Court observed that the title to the machinery shall pass on the delivery and when the entire payment was done. The Court ruled in favour of the Respondent, dismissing the petition.

Click here to read Cuprum Bagrodia Limited v. Gainwell Commosales Private Limited.


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