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Babu Madan Mohan Lal vs N.N. Mukherji on 19 April, 1917

Patna High Court
Babu Madan Mohan Lal vs N.N. Mukherji on 19 April, 1917
Equivalent citations: 39 Ind Cas 919
Author: Atkinson
Bench: Mullick, Atkinson


JUDGMENT

Atkinson, J.

1. These second appeals come before us from the decision of the District Judge of Gaya affirming, in effect, the decree of the learned Subordinate Judge dismissing the plaintiff’s claim in this action.

2. The plaintiff is owner of certain mica mines situated in Pergana Pachrukhi in the District of Gaya and the defendant is a dealer in mica. The plaintiff seeks to recover from the defendant a sum of Rs. 2,317-12-0 by was of damages for breach of contract.

3. Early in March 1913 the defendant entered into negotiations with the plaintiffs for the purpose of securing mica; and as earnest for the performance of the contract which was about to be made the defendant paid to the plaintiff the sum of Rs. 100. On the 9th of March 1913 the contract relied upon in this suit, was made between the parties. That contract shortly provided that the defendant was to be entitled to the entire output of the plaintiff’s two mines one situate at Balam and the other at Simaltali, from the 9th of March to the 18th of March; and the defendant was to take delivery at the plaintiff’s godown at Balam of the mica which was to have been of market size and there was to be no such thing as sorting. No specific price was fixed for the mica but the price was to be the current market price prevailing at the date of the contract, viz., the 9th March 1913 and which price was well-known to both the plaintiff and the defendant. The contract of the 9th of March was duly made and executed; and as further earnest money for the performance of the contract the defendant paid to the plaintiff a further sum of Rs. 1,000 making in all a total payment by the defendant to the plaintiff of Rs. 1,100 on foot of the contract which sum was to be applied in part payment of the amount which the defendant would have to pay to the plaintiff upon completion of the contract. The plaintiff, so far as one can see performed his part of the contract. He devoted the entire output of his mines between the 9th of March and the 18th of March to the contract which he had made with the defendant; and the account book which has been produced shows the amount of the output of the two mines which was stored in the godown at Balam. The plaintiff says that the entire quantity of mica set forth in the schedule to his plaint was the output of the two mines between the 9th of. March and 18th of March; and that the value of the quantity of mica set forth in the plaint would be Rs. 15,041-9-9 at the current market price. The plaintiff further alleges that at the end of March or the beginning of April the market price fell and that they had to sell the mica, which they did in December, at a considerable loss. The contention of the plaintiff is that the defendant committed a breach of contract by failing to take delivery of the mica stored for him at the plaintiff’s godowns at Balam because one of the conditions of the contract was that delivery was to be made at the godown of the plaintiff.

4. Every conceivable defence was put forward by the defendant in order to resist the plaintiff’s claim. It was alleged that the contract was never made or executed; it was alleged that the contract was obtained by fraud; it was alleged that the contract was made by an agent without authority; and every other defence which could possibly have been raised was raised and strongly pressed. The learned Judge, however, was satisfied that the story told by the defendant was absolutely false and that the defence put forward was utterly untrustworthy. The learned Judge therefore, finds that the contract alleged by the plaintiff was made and that the contract so made was broken by the defendant; and that thus there was subsisting at the time of the institution of this suit a cause of action for breach of contract. The only ground upon which he dismissed the plaintiff’s suit is that the plaintiff had failed to give sufficient information or data upon which the learned Judge could assess the measure of damages to be awarded in point of law.

5. By way of re-joinder to the suit brought by the plaintiff, the defendant instituted a separate suit to recover from the plaintiff the sum of money which he deposited namely Rs. 1,100 as earnest for the performance of the contract. This appears to us to have been a most audacious claim on the part of the defendant. However, the learned Judge decreed that suit, and ordered the deposit to be refunded by the plaintiff to the defendant with interest at 6 per cent from the date specified in his order. Against this order, Second Appeal No. 950 of 1916 is laid. We will dispose of this aspect of the case at once by setting aside the order of the learned Judge in the suit brought by the defendant; and by directing that the plaintiff do retain in his hands the sum of Rs. 1,100 and apply the same in part satisfaction of the damages which we shall award in this case. So far as Appeal No. 950 and the suit out of which it arises are concerned each party will abide their own costs.

6. In second appeals we do not usually go into evidence, and we have only done so in this case at the express request of both parties; We were at first inclined to send back this case to the learned Judge for re-hearing on a particular issue to be framed by us with a proper legal direction; but we were pressed by both sides, and particularly by Mr. Sultan Ahmad who appears on behalf of the defendant, to decide the case ourselves upon a consideration of the evidence already recorded. Therefore we have set ourselves the task of determining whether or not the plaintiff has proved that he is entitled to damages in point of law as against the defendant for breach of contract. In considering this aspect of the case two questions arise. The first question is what was the quantity of mica in the plaintiff’s godown on the 18th March; or in other words was there on the 18th of March in the plaintiff’s godown the quantity of mica stated in the plaint to have been there? And the second question is whether or not the plaintiff has given information by way of evidence sufficient to enable us to assess the damages to be awarded.

7. As to the first point Mr. Sultan Ahmad for the defendant suggested that there was no evidence to show what was the quantity of mica in the plaintiff’s godown on the 18th of March. The learned Subordinate Judge and the lower Appellate Court were of’ the same opinion. We think, however, that the learned Subordinate Judge and the lower Appellate Court arrived at this conclusion upon erroneous grounds. We do not think that the two learned Judges carefully considered the evidence on the record. The lower Appellate Court excludes the account book which purports to be a record of the amount of the output from the two mines which was stored for the defendant between the 9th of March and the 18th of March, and the ground on which the learned Judge excludes this account book is that it is not admissible under Section 34 of the Indian Evidence Act. Por se the book would not be evidence; but the book is certainly admissible in corroboration of other direct evidence as to the amount of’ mica which was extracted between the 9th of March and the 18th of March deposed to by the witnesses who prove that this book is a record of the output of the mines; that it is prepared after the mica taken from the mines has been analysed and sorted; that then entries are made in the respective columns which are checked by an Overseer and countersigned and endorsed by the Manager. In view of this evidence we think that the learned Judge ought to have admitted the account book as corroborative evidence of the direct evidence given by the plaintiff’s witnesses. This book purports to contain entries made by a proper and competent person in the ordinary course of business. The book clearly shows that the quantity of mica extracted from the mines between the 9th of March and the 18th of March was the quantity shown in the plaint. Therefore, we hold as a matter of f(sick) that the quantity of mica in the plaintiff’s godown on the 18th of March was the quantity shown in the plaint, namely 251 maunds 10 seers odd. If the contract had been completed, and the plaintiff had been paid by the defendant at the current market price the plaintiff would have received Rs. 15,041-9-9. The question which we have to decide, therefore, is whether the Judge was justified in coming to the conclusion that there was no material or data on which he could assess the amount of damages. We think that the learned Judge did not fully or adequately consider the evidence which was adduced on both sides. No doubt there is evidence both ways. Strong evidence has been adduced by the defendant; but having carefully considered it we are of opinion that it does not detract from the weight which we attach to the evidence adduced by the plaintiff. I shall refer in greater detail to the evidence of the witness for the defendant whose evidence, Mr. Sultan Ahmad asks us to hold, should be believed and relied upon because, it is alleged, he is a wholly disinterested witness and is unconnected with the parties in this case. On the other hand, the plaintiff has called a witness who is equally unconcerned with any of the parties to this suit. He is a person connected with the trade, and was dealing with mica throughout 1913 and was thus vitally concerned with the market price. He gives his evidence clearly, distinctly and without hesitation. He says, he made a contract for the purchase of mica in February 1913 which was completed in May 1913 upon the February rates.

8. There appears to be no dispute that the market rate at the date of contract was the rate set out in the schedule to the plaint. This is conceded on both sides; and that was, therefore, the contract price payable by the defendant to the plaintiff on the 18th of March, 1913. The learned Judge had this before him.

9. The defendant failed to complete the contract. What damages is the plaintiff entitled to?

10 The learned Judge, as I have said, has held that there were no data before him upon which he could assess the measure of damages. We think that the learned Judge was wrong in so holding and that as a matter of fact there was evidence upon which he could have assessed the measure of damages to be awarded.

11. The defendant’s witness says that during the months of April, May and a part of June the rate remained uniform from January and that it fell towards the end of June.

12. On the other hand the plaintiffs witness a person who was carrying on mica business says that the rate began to fall towards the end of March 1918, that it remained low throughout the months of March, April and May and that it was not till the month of December of the same year that the market price showed a slight rise again. This evidence specifies clearly what the market price was in April 1915, namely, a sum less by Rs. 51 in respect of No. 1 quality; Rs. 51 in respect of No. 2 quality; Rs. 51 in respect of No. 3 quality ; Rs 36 in respect of No. 4 qualify; Rs. 36 in respect of No. 5 quality and Rs. 11 in respect of No. 6 quality, than the contract rates.

13. Mr. Sultan Ahmad asks us to hold that this witness has not given trustworthy evidence, having regard to the fact that the receipt which he produces, dated the 3rd May 1913 in fact shows that he paid at a higher rate in the month of May. We think, however, that the witness has satisfactorily explained this by the fact that he made the contract under which he purchased in the month of February and that although he took delivery of the goods in May, he had to pay at the February rates.

14. We attach great weight and importance to the testimony of this witness and we accordingly hold that the learned Judge had before him evidence to show what was the difference between the market price on the 18th of March and the market price within a reasonable time after the contract had been broken.

15. The witness for the defence relied upon so strongly by the Counsel for the defendant is, no doubt, an upright and independent witness. This witness says that for the past 6 years, since he left the service of Messrs. Gladstone Wylle & Co., he has not been concerned with the purchase or sale of mica and that in 1913 he was mostly in Calcutta floating the present syndicate off which he is the manager. All he can tell us, is without indicating the source of his knowledge, that the rate for mica remained uniform from January to June. We are unable to accept this evidence as showing that the current market price within a reasonable time after the 18th of March was not lower than the Contract price in face of the definite evidence given on behalf of the plaintiff by a person actually engaged in the trade that the price fell at the end of March and remained low till December.

16. As to the measure of damages it must be observed that if a party breaks a contract, the party who breaks the Contract is liable to pay to the injured person such damage as may within a reasonable time after the breach has occurred. That is the law in England and so far as we can see there is no authority to the contrary in India.

17. There is one other matter which has been argued before us, namely, whether this case comes under Section 107 or under Section 73 of the Contract Act. Section 107 would only apply if Section 83 of the same Act was applicable, i.e., if there had been an absolute sale and transfer of the property in goods to the defendant. We do not think that Section 83 can be held to apply to this case inasmuch as it has not been proved that there was an absolute sale or transfer of the property in the mica to the defendant. The plaintiff says that nevertheless Section 83 is applicable to this case, inasmuch as there had been an appropriation of the mica extracted from the mines for the satisfaction of the defendant’s contract and that thus the case falls within Section 107. This contention cannot succeed unless it is proved that there was an assent on the part of the defendant to the appropriation that was made in fact by the plaintiff. No such assent has been proved to have been given by the defendant. But although the case does not come under Section 107 of the Contract Act we think that the plaintiff is entitled to damages from the defendant under Section 73 of the Contract Act; and the Counsel for the plaintiff very wisely accepted the suggestion thrown out by us that the total amount of such damages should be Rs. 2,000. We accordingly assess these damages at Rs. 2,000. Against this sum the defendant will have credit for the Rs. 1,100 already deposited and the plaintiff will be entitled to take out execution for the balance, namely, Rs. 900. The plaintiff will receive his costs from the defendant in the first Court, the lower Appellate Court and in this Court.

18. As I have already stated the counter-suit out of which Second Appeal No. 950 arises will be dismissed, each party bearing its own costs.

Mullick, J.

19. I agree.

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