Firm Ramdhan Kedarmal v. Firm Totla Trading Company
1958-01-22
BAPNA, BHANDARI
body1958
DigiLaw.ai
Bapna, J.—This is first appeal by the defendant in a suit for recovery of damages for breach of contract. 2. The case of the; respondent according to the plaint filed before the trial on 14th May, 1949 in the court of the District Judge, Kishangarh was, that the parties were members of the Chamber of Commerce, Ltd., Madanganj and dealt in gold and silver bullion according to the rules of the Chamber. It was alleged that the plaintiff agreed to purchase 50 bars of silver 21 Rs. 168/-per bar(100 tolas) deliverable on Asad badi I Smt. 2005, the transaction itself having been done on Jeth badi amavas (7th June, 1948) of the same year through the registered brokers of the Chamber. It was alleged that the defendant while entering into an agreement of sale of the aforesaid bars, said that this transaction was to re entered in the name of a merchant whose name would be disclosed, later on, but if this wa3 not disclosed, the transaction would be as if entered by the defendant. On the next day the defendant gave out that his own name as seller be entered. It was alleged that according to the rules of the Chamber every member dealing in gold and silver bullion had to send a list of his transactions with other members. The list of the plaintiff contained an entry of purchase of 50 bars and the list of the defendant also contained an entry of sale of 50 bars. The name of the merchant with whom the transaction took place was not entered in the list filed by the plaintiff. So far as the list of the defendant was concerned, he made an entry that he had sold the aforesaid 50 bars to the plaintiff.
The name of the merchant with whom the transaction took place was not entered in the list filed by the plaintiff. So far as the list of the defendant was concerned, he made an entry that he had sold the aforesaid 50 bars to the plaintiff. It was further alleged that on information being received from the broker that the defendant had agreed being named himself as the seller, the plaintiff went to the office of the Chamber and entered the name of the defendant at the blank space left for the purpose- It was then urged that the office of the Chamber later sent for the plaintiff to inform that the defendant had cut out the entry of sale of 50 bars to the plaintiff from the list of 7th June, 1948 and because the defendant wanted to repudiate that contract, he advised the plaintiff to make an application to the Chamber according to the rules for the settlement of the dispute. The allegation further is that the plaintiff made an application to the Chamber on 9th June, 1948 for allowing damages for the refusal by the defendant to perform his contract on the due date. The office of the Chamber declared that the market rate on 9th June, 1948 at 4-30 P. M. was Rs. 173/12 - per hundred tolas at which rate the damages were to be calculated if the Arbitration Committee decided in favour of the plaintiff that a breach of contract had taken place. The Arbitration Committee went into the matter and held that the defendant had committed breach of contract and damages should be allowed on the difference between the rate at which the bars were purchased and the rate of Rs. 173/12/- declared by the office as aforesaid. The amount of damages came to Rs. 8050/- This award was made on 19th June, 1948. The plaintiff further alleged that after the award, he received Rs. 1278/- through the Chamber from the defendant, and made a claim for the balance of Rs. 6772/- principal and certain interest at 6% P. A. making a total of Rs. 7140/-. 3. The defendant denied having entered into the contract for the sale of 50 bars of silver on 7th June, 1948. It was alleged that only ten bars of silver were sold and that the transaction was completed according to the rules of Chamber.
6772/- principal and certain interest at 6% P. A. making a total of Rs. 7140/-. 3. The defendant denied having entered into the contract for the sale of 50 bars of silver on 7th June, 1948. It was alleged that only ten bars of silver were sold and that the transaction was completed according to the rules of Chamber. Certain other points were also raised. The court framed as many as six issues and as a result of the trial found in favour of the plaintiff and passed a decree for Rs. 6772/- having disallowed the claim of interest. The learned Senior Civil Judge, Kishengarh in whose court the appeal was preferred by the defendant, dismissed the same. The defendant has come in appeal to this Court. 4. Several points were raised in the grounds of appeal, but only the following two points were argued:— 1. That the plaintiff had failed to prove that the defendant had entered into a contract for the sale of 50 bars of silver as alleged by him. 2. That the rate of bullion forming the basis for calculation of damages would be that prevailing on the date of delivery rather than on the date of the breach of the contract. 5. As to the first contention the lists of the transactions of 7th June, 1948 filed by the plaintiff as also the defendant with the Chamber are Exs. P. 2 P. 1 respectively. ... ... ... ... ... ... ... ... ... ... ... ... ... ... 6. Taking......evidence to be reliable, we accept the evidence of the plaintiff that the space was left blank for the reason that the brokers would inform him of the defendants intention to give a pucca name on the next day and when that name was given on the next day, the plaintiff made an entry in the list that it was the defendant who had agreed to sell the said bars of silver. It is also proved that the defendant repudiated the contract on 9th June, 1948. The lower court is therefore, right in its finding that the defendant had entered into a transaction of sale of 50 bars of silver as alleged in the plaint to the plaintiff and later repudiated the same on 9th June, 1948. 7.
It is also proved that the defendant repudiated the contract on 9th June, 1948. The lower court is therefore, right in its finding that the defendant had entered into a transaction of sale of 50 bars of silver as alleged in the plaint to the plaintiff and later repudiated the same on 9th June, 1948. 7. The next point for consideration is that in a case of breach of contract of this nature what would be the measure of damages. The facts as stated above were that the defendant agreed on 7th June, 1948 to deliver 50 bars of silver on 22nd June, 1948 against the price at the rate of Rs. 168/- for 100 tolas of silver. He repudiated this agreement on 9th June, 1948. The case is one of anticipatory breach of contract. Learned counsel for the appellant relied on the cases of Monindra Chandra Nandi vs. Aswini Kumar Achariya (1), and Maungo Po Kyaw vs. Saw Tago (2), for the contention that in case of such breach the damages are to be calculated according to the difference between the price at which the goods were agreed to be sold and the price prevailing on the date when the delivery was to be given. Ordinarily this view of law may be correct, but where the contract of sale and purchase are done on an exchange from day to day with respect to commodities like bullion, the marker value of such contract on the date of repudiation is the best basis of damages rather than the actual value of performance as proved by the event. What is broken is not a contract but agreement to fulfil a particular contract, and since the identical contract for the same date of delivery could be made on the date of repudiation the rate at which such contract for the same date of delivery could be obtained, can furnish a better basis for calculation of damages. As similar view has been taken by this Court in that case of Ram Laxman vs. State of Rajasthan (3), where the only difference in the case was that there was no Particular quantity of articles deliverable and no fixed date on which they were to be delivered. It was a case of contract by an individual to supply a particular kind of goods at a fixed rate as and when they would be required.
It was a case of contract by an individual to supply a particular kind of goods at a fixed rate as and when they would be required. It was held that the true measure of damages should be calculated on the basis of terms on which an identical contract can be obtained by the promisee from the third party. This view finds support in paragraph 1397 of Willis on Contracts, (Vol. V page 3899). After observing that anticipatory breach does not change the nature of the contract, and the normal rule of damages is, therefore, the same as if the breach had not taken place until the time fixed in the contract for performance the learned author proceeds to say that:— "In a narrow class of cases, following the analogy of the law governing breach at the time of performance the market value of a contract such as that which the defendant has repudiated should be taken as the basis of damages, rather than the actual value of performance as proved by the event, but it is only a limited class of contracts for future performance-such as contracts to sell wheat or cotton in the future, or to insure which can be said to have a market value." 8. It was finally contended that the rate has been calculated as at 4-30 P.M. while the rate at the opening of the market in the morning was only Rs. 172/6/-. The rules of the Chamber on the basis whereof the parties had been entering into contracts provided for the fixation of rate by the Manager of the Chamber and Rule Nos. 3 & 4 show that the rate to be fixed is to be of the hour soon after the report of the breach of contract. There is no evidence in this case that the rate fixed was not in accordance with the rules. There is no force in any of the contentions. 9. The appeal is accordingly dismissed with costs.