Report No. 8
18. Section 16.-
It was pointed out by the Deputy Director of the Indian Standards Institution that though under sections 5 and 6 of the Indian Standards Institution (Certification Marks) Act of 1952, persons are prohibited from making improper use of standard marks and of certain names, there is no provision in the law to enable the buyer to repudiate a contract if the goods sold on the basis that they are in accordance with the standards laid down by Government do not conform to the Government standards. It was, therefore, suggested that a provision should be inserted in section 16 of the Sale of Goods Act that when Government, lays down any compulsory standard for any products, the products sold should conform to that standard.
We had the advantage of a discussion with the Deputy Director on this subject.
It appears that the Act itself contains no provision prescribing any particular standard of quality for any of the standard marks envisaged by the Act. The Act only penalises the use of standard marks otherwise than in accordance with its provisions.
There are, of course, some other Acts which lay down or provide for the making of rules to prescribe standards of quality, such as the Agricultural Produce (Grading and Marking) Act, 1937, and the Drugs Act, 1940. The Drugs Act prohibits the sale of goods which are not of the standard quality. It is, however, not possible from such penal provisions to imply the existence of a condition or warranty regarding the quality of the goods, the breach of which may entitle the buyer to civil consequences under the Sale of Goods Act.
What is necessary to achieve the object in view is a provision which will imply in such cases a condition or warranty regarding the quality of the goods, to the effect that the goods sold are of the quality which the standard or other mark carries with it. In the absence of an express or implied condition or warranty regarding the quality of the goods, the purchaser would not be able to claim a right to repudiate the contract or claim damages for breach of the warranty.
He may be liable for the penalties provided under the Acts. The enactment of a statutory condition or warranty may affect a large class of merchants and middlemen. It is a matter of policy to be decided by the Union and the State Governments whether they should undertake such legislation. In the circumstances we do not propose to make any recommendation on the question raised by the Deputy Director.