MYSORE SUGAR CO. v. Y. B. BORAIAH — 1980 DIGILAW 276 (KAR)

SABHAHIT, J. ( 1 ) THIS appeal by the dfendant is directed against the judgment and decree dated 28-3-1974 passed by the Civil Judge, mandya in R. A. 330 of 1972 on his file modifying the judgment and decree dated 18-9-1972 passed by the Munsiff, Mandya in O. S. No. 618 of 1969 on his file decreeing in part the suit of the plaintiff for damages. ( 2 ) PLAINTIFF instituted a suit for damages. The relevant averments are: The plaintiff entered into a contract with the defendant-company to grow and supply 200 tonnes of sugar-cane in S. No. 282/2 of Guttalu village, in an area of 4 acres, and the plaintiff further agreed to an additional condition with the defendant- company as per Ex. D2 that he would pay damages at Rs. 50/- per tonne on his failure to supply sugar-cane to the defendant company. Likewise, defendant-company also agreed under the contract to take supply of 200 tonnes of sugar cane grown by the plaintiff in S. No. 282/2 of Guttalu village in an extent of 4 acres and pay the prescribed price viz. , Rs. 80 per tonne. On the above conditions the agreement Ex. D2 was executed in the month of June 1968 and the same was with the defendant- company. On the strength of the contract the plaintiff supplied 152 tonnes and 830 kgs. of sugar cane to the company by 14-8-69 and again on 19-9-69 he took 10 tonnes of sugar cane. But the company refused to receive it on the ground that it was not grown in the field in question but that it was grown by the brother of the plaintiff in his land. Thus the plaintiff has averred in the plaint that he incurred heavy loss on account of the breach of contract by the company. He spent Rs. 500 towards hire charges and maintenance charges of the lorry. He claimed Rs. 3373-66 towards the value of the rest of the sugar cane that he was bound to supply and Rs. 1400 withheld by the Sugar company, thus in all Rs. 5273-66 Ps. along with future interest and costs. ( 3 ) THE suit was resisted by the Company. According to the company, the breach was committed by the plaintiff. The company denied that any quantity of sugar cane perished. They denied that the plaintiff incurred any damages. 1400 withheld by the Sugar company, thus in all Rs. 5273-66 Ps. along with future interest and costs. ( 3 ) THE suit was resisted by the Company. According to the company, the breach was committed by the plaintiff. The company denied that any quantity of sugar cane perished. They denied that the plaintiff incurred any damages. They denied that 47 tonnes and 170 Kgs. of sugar cane were available in the suit schedule land for supply. They prayed that the suit be dismissed. On these pleadings' the trial Court raised the following issues:1) Whether the plaintiff proves that there was still 47 tonnes and 170 Kgs. of 'oppige' sugar-cane in S. No. 282 of guttalu on the date of suit and it was ripe? 2) If so, whether the defendant-company committed breach of contract and it is liable to pay damages? 3) To what quantum of damages, if any, is the plaintiff entitled? 4) The trial Court appreciating the evidence on record answered under issue no. 1 that plaintiff proved that there was sugar cane in 16 guntas of land and defendant was bound to receive it. Under Issue no. 2 the trial Court answered that plaintiff proved that the defendant committed breach of contract and that he was liable for damages. In that view the trial Court awarded damages at Rs. 1635 with proportionate costs. The trial Court held that in the interest of justice, though there was no specific evidence on record with regard to damages, nominal damages of rs. 5 per tonne should be awarded for non-acceptance of 47 and odd tonnes of sugar cane. The trial Court further held that the defendant-company was liable to pay back Rs. 1400. Thus it arrived at the figure of damages as stated above. Aggrieved by the said judgment and decree the plaintiff went up in appeal before the learned Civil Judge, Mandya in R. A. 330 of 1972 on his file. The learned Civil judge raised the following point as arising for his consideration in the appeal: whether the defendant-company has committed breach of contract? If there is breach of contract to what damages the plaintiff-appellant is entitled to?and reassessing the evidence on record the learned Civil Judge held partly allowing the appeal, that plaintiff was entitled to damages of Rs. 5273 with proportionate costs. That included the price of 47 and odd tonnes of sugar-cane at Rs. If there is breach of contract to what damages the plaintiff-appellant is entitled to?and reassessing the evidence on record the learned Civil Judge held partly allowing the appeal, that plaintiff was entitled to damages of Rs. 5273 with proportionate costs. That included the price of 47 and odd tonnes of sugar-cane at Rs. 80 the agreed price in addition to Rs. 1400 awarded by the learned Munsiff. Aggrieved by the said judgment and decree the defendant-company has come up in second appeal, before this Court. ( 4 ) THE learned Advocate appearing for the appellant-defendant vehemently argued that the first appellate Court was not justified in ignoring the provisions of law regarding the awarding of compensation. He submitted that damages if at all, were to be quantified on the basis of the difference between the prevailing market value and the agreed rate, and that the learned civil Judge was not justified in awarding the entire price of the sugar cane at the agreed rate as damages. He further submitted that it was the duty of the plaintiff to aver and prove that he made honest attempts to mitigate the damages by trying to sell the sugar cane in the open market and in that if there was any loss, he was entitled to recover the same by way of damages. Hence he submitted that the appeal was entitled to succeed. As against that the learned Advocate appearing for the respondent-plaintiff argued that the damages have to be determined on the facts of each case and on the facts of the present case there was no scope or opportunity for the plaintiff to sell the sugar cane elsewhere and thus mitigate the damages and hence he submitted that the learned Civil Judge was justified in awarding the agreed price for 47 and odd tonnes of sugar cane towards damages. The points therefore that arise for my consideration in this appeal are :1) Whether the learned Civil Judge is justified in awarding the damages for non- acceptance of 47 and odd tonnes of sugar cane by the Company at the agreed rate of Rs. 80/-per ton? 2) Whether the plaintiff was justified in not pleading and proving that he made efforts to sell the sugar-cane elsewhere and yet incurred damages? ( 5 ) S. 73 of the Indian Contract Act speaks of compensation for breach of contract. 80/-per ton? 2) Whether the plaintiff was justified in not pleading and proving that he made efforts to sell the sugar-cane elsewhere and yet incurred damages? ( 5 ) S. 73 of the Indian Contract Act speaks of compensation for breach of contract. It states:"when a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of the contract. Such compensation is not to be given for any remote or indirect loss or damage sustained by reason of the breach. . . . . . . . . . . . . . . . . . . . . . . Explanation : in estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. Illustration (c) to the Section reads : a contracts to buy of B at a stated price, 50 maunds of rice, no time being fixed for delivery. A afterwards informs b that he will not accept the rice if tendered to him. B is entitled to receive from A, by way of compensation, the amount, if any, by which the contract price exceeds that which B can obtain in the rice at the time when A informs b that he will not accept it. " ( 6 ) THE Supreme Court of India explaining the aspect in the case of M. N. Gangappa v. A. N. Shetty and Co. (V) has stated in para 9 of the judgment thus :"it was admitted by the defendant in his evidence that the price was rising from the month of November 1950 to march 1951, the rate finally going up to rs. 2201- per candy. The High Court therefore took the lowest rate viz. Rs. 210/-per candy which was prevailing on 13-1-1951 as the rate for computing the damages. We do not find anything illegal or unreasonable about the process by whieh the damages were computed. 2201- per candy. The High Court therefore took the lowest rate viz. Rs. 210/-per candy which was prevailing on 13-1-1951 as the rate for computing the damages. We do not find anything illegal or unreasonable about the process by whieh the damages were computed. "thus the Supreme Court has affirmed the proposition that the plaintiff is entitled to get damages being the difference in price between the market value and the agreed rate. If the plaintiff gets less than the agreed rate he is entitled to be compensated for such amount. That was an appeal arising from a case from this High court. The same principles were affirmed by the Supreme Court in the case of mvralidhar Chiranjilal v. Harishchandra dwarakadas (2 ). This High Court had an occasion to consider this aspect in the case of M. Nanjappa v. M. P. Muthuswamy (3 ). His Lordship Malimath, J. , considering this aspect has observed inter alia that under Explanation to S. 73, the burden is on the plaintiff, who has proved the breach of the contract, of further establishing that he has taken all reasonable steps to mitigate the loss, consequent on the breach of the contract. If he fails to establish that he has taken all reasonable steps to mitigate the damages consequent on the breach of the contract, he will be debarred from claiming damages from the defendant to the extent he could have mitigated the damages by taking reasonable steps. Failure on the part of the defendant to place evidence that there did exist means of mitigating damages; does not help the plaintiff. (AIR 1962 S. C. 366 relied on. AIR 1938 Mad. 672 not followed ). In that case the plaintiff did not take any steps to secure employment after he was wrongfully dismissed and hence damages could not be awarded. In the instant case, it is the case of the plaintiff that the sugar company did not receive as per the agreement 47 and odd tonnes of sugar cane at the agreed rates. The Courts below have concurrently held that the defendant company committed breach of contract. That being so, it is obvious that the plaintiff is entitled to damages. To that extent there is no dispute whatsoever. ( 7 ) THE point of difference starts after that stage. The Courts below have concurrently held that the defendant company committed breach of contract. That being so, it is obvious that the plaintiff is entitled to damages. To that extent there is no dispute whatsoever. ( 7 ) THE point of difference starts after that stage. The learned Civil Judge has awarded compensation to the plaintiff from the defendant company at the agreed rate per tonne, at Rs. 80, on 47 and odd tonnes not accepted by the Company. It is that which is challenged before me by the learned Advocate for the appellant. Relying on the ruling of the Supreme court followed by this Court in the aforesaid decision, he submitted that the plaintiff did not place any material as required under S. 73 of the Contract Act as contained in the Explanation thereto, that he made any honest attempts to mitigate the damages by trying to sell the sugar cane in the open market and that he thereby incurred any loss. It is no doubt true that in view of the explanation to S. 73, a duty is cast on the plaintiff who goes to Court for damages to plead and prove that he took all reasonable steps to mitigate the damages. In the instant case, according to the plaintiff, the defendant-company refused 10 take 47 and odd tonnes of sugar cane. If that is so, it was his duty to plead how he tried to mitigate the damages by selling the sugar cane in the open market. He has not done so. He has neither pleaded nor proved that he made any such attempt. ( 8 ) THE learned Advocate appearing for the respondent-plaintiff, however, invited my attention that there were restrictions placed on the plaintiff under the contract ex. D2, that he could not sell the sugarcane in the open market unless he was permitted by the Company and further he was given a permit by the Deputy Commissioner under the Mandya Sugar cane (Regulation and Distribution) Mandya, order 1968. Under Ciause (vi) of that order it is stated that no sugar cane shall be exported from the reserved area except under and in accordance with the conditions of permit issued by the deputy Commissioner in form No. 1. Cl. (vii) speaks of issue of permits. Under Ciause (vi) of that order it is stated that no sugar cane shall be exported from the reserved area except under and in accordance with the conditions of permit issued by the deputy Commissioner in form No. 1. Cl. (vii) speaks of issue of permits. In other words the plaintiff if he wanted to sell the sugar cane outside the reserved area in the open market had to obtain a permit from the Deputy Commissioner and had to take the leave of the Company. In the instant case the Company refused to receive the sugar cane. Therefore it had no objection for the plaintiff to sell it elsewhere and since the company did not wish to purchase the sugar cane there was no difficulty also for the plaintiff to obtain a permit from the Deputy Commissioner. The fact remains that he had not made any efforts in that direction. ( 9 ) THE learned Advocate for the respondent-plaintiff further submitted that the breach took place on 19-9-1969 and the suit was filed on 22-9-1969. Therefore there was no occasion for the plaintiff, according to him, to try to obtain the permit and sell the sugar cane elsewhere. The argument has no substance Nobody compelled the plaintiff to rush to the Court without doing his part of the job as required under the Explanation to Section 73, to mitigate the damages. That being so, it is obvious that on the facts of this case the plaintiff has neither pleaded nor proved that he made any efforts to mitigate the damages as required under explanation to Section 73, before he rushed to the Court claiming for damages. In the circumstances therefore there is no basis to award any damages to the plaintiff. The learned Civil Judge clearly erred in thinking that he should award by way of damages the price of the entire quantity of sugar cane not accepted by the defendant-company. It means that the plaintiff could have the sugar cane and in addition he would have the price of the sugar cane also which on the face of it, is, to say the least besotted. It means that the plaintiff could have the sugar cane and in addition he would have the price of the sugar cane also which on the face of it, is, to say the least besotted. ( 10 ) THE learned Munsiff, however, in the absence of any evidence placed by the plaintiff in that behalf in order to claim and receive damages from the defendant, thought it proper, taking a broad and commonsense view, that the plaintiff should be compensated at Rs. 5/- per tonne. That is not challenged by the defendant company by filing any cross objections and in my opinion rightly so. ( 11 ) IN the result, therefore the judgment and decree of the learned Civil judge are set aside and those of the learned Munsiff are sustained and restored. On the peculiar facts and circumstances of this case I make no order as to costs. --- *** --- .