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Gauhati High Court · body

1996 DIGILAW 54 (GAU)

National Diary Development Board v. Gograj Agarwalla and Co. and Another

1996-03-28

J.N.SARMA

body1996
This first appeal arises out of the judgment and decree dated 27.8.90 passed by the learned Assistant District Judge, Tinsukia in Money Suit No.110 of 1986. By the impugned judgment and decree the learned Assistant District Judge decreed an amount of Rs. 71,050/- being the amount of damage of Rs.59,400/-+ 18% interest on it being the amount of Rs. 10,990/- and Rs.6,660/- the interest of Rs. 10,000/- for the security money for sometime. 2. The admitted position in this case is that the plaintiff entered into an agreement with the defendant No.l for supply of 4 wagons of Rapseed Oil by two contracts, that is, one is RRT 4 and the other is RRT 8. The further admitted position is that according to the terms of the contract against each contract a security deposit of Rs. 10,000/- is to be made. But in this particular case security deposit of Rs. 10,000/- was made towards one contract only and the Contract No. RRT 4 was executed by the defendant No.l. But with regard to contract No. RRT 8, that was not performed by the defendant No.l on the ground of security not being given. But it appears from Ext.5, the letter of the Broker, defendant No.2 through whom the contract was made, that was subsequently agreed that Rs. 10,000/- which was not refunded by defendant No.l after completion of the first contract shall be adjusted towards the second contract as security. 3. Be that as it may this contract was not performed and a suit for damages was filed. This case shall be squarely covered by section 73 of the Contract Act. Section 73 of the Contract Act provides for compensation for loss or damage caused by breach of contract. Section 73 requires that before any compensation or damage can be assessed, the first thing that must be established/proved by the plaintiff that there was a breach of contract on the part of the defendant and that the plaintiff was not guilty for the breach of that contract and regarding assessment of damage two considerations arise. They are as follows : 1. Whether the damage naturally arose in the usual course of thing from the breach ? 2. Whether the plaintiff had the means of remedying the inconvenience and has neglected to avail himself of it ? 4. They are as follows : 1. Whether the damage naturally arose in the usual course of thing from the breach ? 2. Whether the plaintiff had the means of remedying the inconvenience and has neglected to avail himself of it ? 4. The Court in the first instance must decide that defendant is liable and then it proceeds to assess what are liabilities. But till that determination there is no liability at all upon the defendant. A claim for damages for a breach of contract is, therefore, not a claim for a sum presently due (see AIR 1974 SC 1265 , Union of India vs. Raman Iron Foundry). 5. In the instant case the findings have been arrived at that there was a breach of contract and the defendant No.l is responsible for it. 6. I have perused the materials on record and I am satisfied that the findings which have been arrived at by the lower Court is justified on this count. 7. The next question is what should be the quantum of damage. Regarding the measure of damage the principles have been laid down in the leading case of Hadley vs. Baxendable, 5 AC 25, and that English case has been accepted by the Court in India althrough as a guide of determining damage. The law laid down in that case is that two parties have made a contract, which one of them has broken, the damages which the other party ought to receive in respect of such a breach of contract should be such as may be fairly and reasonably be considered either arising naturally i.e. according to the usual course of things, from such breach of contract itself or such as may reasonably be supposed to have been in the contemplation of both the parties, at the time they made the contract, as the probable result of the breach of it. 8. It is that aspect of the matter which must be proved in a case claiming damages for a breach of contract. In the instant case a bare perusal of the evidence will show that aspect has not been considered by the learned Judge in his judgment and he calculated Rs.59,400/- at the rate of Rs.50/- per tin of Refined Rapseed Oil of 1187 tins during the first part of October, 1982 when the defendant illegally terminated the contract. In the instant case a bare perusal of the evidence will show that aspect has not been considered by the learned Judge in his judgment and he calculated Rs.59,400/- at the rate of Rs.50/- per tin of Refined Rapseed Oil of 1187 tins during the first part of October, 1982 when the defendant illegally terminated the contract. But there is absolutely no evidence as deposed by PW 1. On the basis of this oral statement no damage can be granted or assessed by the Court. That will be a perverse approach to measure the damage for the breach of contract. The burden is squarely on the plaintiff and the plaintiff is to discharge that burden of proof regarding damage. 9. The next illegality in the judgment is that the plaintiff claimed damage of Rs.59,400/- and at the same time claimed interest on it. There cannot be claim for damage and interest simultaneously because interest is nothing but a sort of damage. So this claim is not also tenable in law. I find that the claim of interest on damage is absolutely illegal. So the claim of damage as well as interest is not tenable. 10. The next question is what should be the damage. I find that there is no legal evidence to measure the damage. It can be reasonably assumed that the plaintiff must have suffered something for the breach of the contract and as such I assess an amount of Rs. 500/- for the breach of the contract. As there is no evidence of appreciable damage suffered, by way of nominal damage the plaintiff can recover nominal damages which are only a peg to hang costs on no sums at all. The nominal sum means in fact no sum at all, but has a mere fictions existence. Accordingly the judgment and decree of the trial Court is modified to the extent that this suit will be decreed for a sum of Rs.500/- and Rs.600/- as interest of security money of Rs. 10,000/-, that is for Rs. 1,100/- only. The suit of the plaintiff was not a bonafide one, but it was resorted to as a gamble just to earn some backs (sic). The appeal is partly allowed with cost all through out. 11.1 have heard Shri GN Sahewalla, learned counsel for the appellant and Shri SS Sharma, learned Advocate for the respondents. 1,100/- only. The suit of the plaintiff was not a bonafide one, but it was resorted to as a gamble just to earn some backs (sic). The appeal is partly allowed with cost all through out. 11.1 have heard Shri GN Sahewalla, learned counsel for the appellant and Shri SS Sharma, learned Advocate for the respondents. In terms of the interim order of this Court the defendant paid Rs.40,000/-. As the suit has been decreed for Rs. 1,100/- the balance amount of Rs.3 8,900/- shall be refunded by the plaintiff to the defendants within a period of two months from the date of receipt of this "order, failing which this amount will carry interest at the rate of 18% per annum. The defendant on failure to pay the money by the plaintiff as indicated above will be able to realise it by way of restitution by executing it as decree. 12. The appeal is partly allowed. Decree to be drawn up accordingly.