{"id":40976,"date":"1998-05-29T00:00:00","date_gmt":"1998-05-28T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/union-of-india-vs-ms-indian-proofing-general-on-29-may-1998"},"modified":"2015-08-13T02:25:00","modified_gmt":"2015-08-12T20:55:00","slug":"union-of-india-vs-ms-indian-proofing-general-on-29-may-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/union-of-india-vs-ms-indian-proofing-general-on-29-may-1998","title":{"rendered":"Union Of India vs M\/S Indian Proofing & General … on 29 May, 1998"},"content":{"rendered":"
Delhi High Court<\/div>\n
Union Of India vs M\/S Indian Proofing & General … on 29 May, 1998<\/div>\n
Author: S Kapoor<\/div>\n
Bench: S Kapoor<\/div>\n<\/p>\n
<\/pre>\n
ORDER<\/p>\n
 S.N. Kapoor, J. <\/p>\n
 1.1  This  judgment shall dispose of IA Nos. 1970\/95, 1971\/1995 as well  as suit No. 1880\/94.\n<\/p>\n
 1.2  In  this  case, the award was filed by the arbitrator along  with  the proceedings.  Notices were accordingly issued and respondent  filed  objec-tions vide IA 1970\/95 along with an application IA 1971\/95 under Section  5 of Limitation Act.\n<\/p>\n
 2.1  It  is claimed in IA No. 1971\/95 – the application for condensation  of delay,  that  the notice of filing the award was not served on any  of  the authorised representatives of the respondent company. Shri Surender Sureka, Managing  Director  of the respondent firm was mentally disturbed  and  was away  to Bombay in connection with diagnosis and tests of his brother  from September  1994 to January 1995. On 23rd January 1995 while  going  through the papers, he came across one notice received from the court. He could not immediately  connect the notice with the concerned case. He  contacted  his
\ncounsel  Shri S.L. Jain and it transpired that the notice related to  award dated  8th February 1994 and not 17th August 1994 as mentioned in  the  notice.  It appears from the record that the notice was served on some  official  of the company on 8th September 1994. The delay appears to have  been explained for it had not been received by any of the partners of the plain-tiff  firm  but by an employee as is evident from the  report.  Seeing  the circumstances,  the  delay  in filing the application is  condoned  and  IA 1971\/95 is accordingly allowed.\n<\/p>\n
 3.   Learned  counsel for the objector challenged the award given  by  Shri Ram Bahadur, Sole Arbitrator dated 8th February 1993 on the ground that the general damages amounting to Rs.6,03,603.80 allowed by the Arbitrator  were unjust  for  purchases  were not made in the year 1985  but  in  1987.  The learned counsel for the applicant referred to letters Annex.3 to 5 indicat-ing  that  Madhav  Cotton Mills Limited, UP Handloom  Stores  and  National Textile Corporation had not supplied dusty blue 91 cm. width dyed fastness on  or around 31st March 1985. In this connection, learned counsel for  the
\nobjector  referred to AT No. BTX-4\/0055\/COAD\/118 dated 3rd  September  1984 and  A\/T No. BTX-4\/118(84)\/RP\/COAB\/025 dated 29th September 1987 placed  by Union  of India on NTC for purchase of stores. It indicated that  a  74,796 mtrs.  of cotton cloth dosuti blue of 91 cms. width was to be  supplied  at Rs.13.90P  per  mtr. It is further submitted that  the  learned  arbitrator ignored the modified rate at which the goods under this A\/T were  supplied. It is submitted that it is evident from the record that the rates given  in the  A\/T dated 28th May 1985 were not final. The damages should  have  been
\nassessed only on the date of breach of contract and not on any date  subsequent to the date of breach of the contract.\n<\/p>\n
 4.   On  the other hand, the submission of the claimant is that the  objec-tion is mis-conceived for the award indicated that Union of India had filed A\/T No. BTX-4\/0053\/COAD dated 28th May 1985 to prove the difference between the contract rate at Rs.6.48 per mtr. and market rate of Rs.12.86 per  mtr. on  or  about  the date of breach 31st March 1985. But  rate  mentioned  in letter was not the rate which was relied upon by the Arbitrator. No  doubt, the arbitrator relied upon A\/T dated 28th May 1985 but with modified rates. The letter dated 13th November 1986 addressed to National Textile  Corpora-\n<\/p>\n
tion Ltd. indicated that the goods of the same quality were supplied at the rate  of Rs.12.86 per meter. and this is the rate which was  considered  by the  learned arbitrator. As such, the objector is probably labouring  under some mistaken belief that 1987 rates had been applied by the contractor.\n<\/p>\n
 5.   Having  heard the parties counsel and having gone through the  record, it appears that the only point which requires consideration is whether  the arbitrator  has committed misconduct by accepting A\/T No.  BTX-4\/058  dated 28.5.85 as appropriate basis for calculating damages.\n<\/p>\n
 6.   In  so  far as lack of evidence of market rate is  concerned,  if  the claimant  had  failed to file any other vidence,  the  defendant  objector could have themselves filed some other evidence to show different rates. In such  matters when both the parties are allowed to file and  lead  evidence and rates of exact date of breach of contract are not ailable, the  court as well as Arbitrator do consider such rates to arrive at just conclusion.\n<\/p>\n
 7.   The learned counsel for the claimant relied upon Nagar Palika,  Mirza-pur Vs. The Mirzapur Elect. Supply Co. Ltd., , M.L. Dalmiya & Co. Ltd. Vs. International Airport Authority of India,  and  M\/s  Ruttonsha International Rectifier Pvt. Ltd. Vs. Union  of  India,
\n in support of his contention that the objections are  not maintainable.\n<\/p>\n
 8.   I  find  a lot of force in the submissions of the learned  counsel  in view of the aforesaid facts.\n<\/p>\n
 9.   Learned counsel for the objector relied upon M\/s.Murlidhar Chiranjilal vs.  M\/s. Harishchandra Dwarkadas and<\/a> another,  and  Section
\n73  of the Contract Act. In para 9 of the judgment, the Supreme Court  laid down the following principles relating to calculation of damages:\n<\/p>\n
       (9) The two principles on which damages in such cases are  calculated are well-settled. The first is that, as far as possible, he who has proven a breach of a bargain to supply what he contracted to  get is to be placed, as far as money can do it, in as good  a situation as if the contract had been performed; but this princi-ple  is qualified by a second, which imposes on a  plaintiff  the duty  of taking all reasonable steps to mitigate the loss  consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to taken such steps:  (British
\n     Westinghouse  Electric  and  Manufacturing  Company  Limited  Vs. Underground  Electric Ry. Co. of London, (1912) AC 673 at  p.689. These  two  principles also follow from the law as laid  down  in S.73  read with the Explanation thereof. If, therefore, the  con-tract was to be performed at Kanpur it was the respondent’s  duty to buy the goods in Kanpur and rail them to Calcutta on the  date of  the breach and if it suffered any damage thereby  because  of the  rise in price on the date of the breach as compared  to  the contract  price, it would be entitled to be re-imbursed  for  the loss.  Even  if the respondent did not actually buy them  in  the market  at Kanpur on the date of breach it would be  entitled  to
\n     damages  on  proof of the rate for similar  canvas  prevalent  in Kanpur  on  the date of breach, if that rate was above  the  con-tracted rate resulting in loss to it. But the respondent did  not make  any attempt to prove the rate for similar canvas  prevalent in  obviously be not entitled to any damages at all, for on  this state of the evidence it could not be said that any damage  natu-rally arose in the usual course of things.”\n<\/p><\/blockquote>\n
 10.  The  above said observations relate to a suit. In arbitration  proceed-ings,  the similar standard of proof is certainly preferable but some  room for  estimation  is also left. In Murli Dhar’s case (supra), there  was  no
\nevidence  at  all. But in the present case, there is some evidence  on  the basis of which the estimate could be made.\n<\/p>\n
 11.  In  so  far as Section 73 of Contract Act is concerned,  it  reads  as under:\n<\/p>\n
      “73. Compensation for loss or damage cause by breach of  contract _ <\/p>\n
      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  con-tract, to be likely to result from the breach of it.\n<\/p><\/blockquote>\n
      Such compensation is not to be given for any remote and  indirect loss or damage sustained by reason of the reach.”\n<\/p><\/blockquote>\n
 12.  It  is undisputed that the contract was to be performed by 31st  March 1985 and the order was placed on 28th May 1985. The law as to such type  of damages is that damages are to be assessed with reference to date fixed for delivery and the court must estimate rate as best as it can and it  matters not  that the estimate to a certain extent is speculative. If it is  proved that after rescission of the contract the claimant acting reasonably and as prudent  man, he might have made a contract at better rates that  could  be considered  ground for abatement of damages and if after the breach of  the contract, fresh contract is entered which is at the risk of the party other than  the party claiming damages for he cannot make use of such a  purchase for the purpose of enhancing his damages. The mere fact that it is somewhat difficult  to  accept  the damages with certainty  and  precision,does  not relieve the defendant of his liability to pay the damages to the  plaintiff to compensate for the loss. The plaintiff would be entitled to the  benefit of every reasonable presumption as to the loss suffered. Supposing that the market  rate  at place of delivery is not available, the  arbitrator  could
\ntake  into consideration the market price at the nearest place and on  this very logic if the market rate on the exact date of breach is not available, the  arbitrator can certainly take into consideration the market  price  at the nearest day. (See also M\/s Saraya Distillery, Sardarbaggar Vs. Union of India  & Anr.,  and Andard Mount (London)  Ltd., England Vs. Curewel (India) Ltd., New Delhi, AIR 1985 Delhi 45).\n<\/p>\n
 13.  In  the above said circumstances, if the arbitrator has considered  A\/T dated 28th May 1985 and its modified rates as per letter dated 13th  Novem-ber  1986 which is nearest to the date of breach of the contract, no  fault can  be  found  with the award on this score. The arbitrator  has  given  a reasoned  award and appears to be justified in what has been stated  above. In  such circumstances, the award cannot be challenged on the  ground  that reasons  given by the arbitrator were inadequate or that the  appraisal  of evidence  was  not up to the mark and the conclusions reached  by  him  are
\nquestionable. No interference with the award is permissible in the  absence of any misreading of the document or ignoring any material evidence.\n<\/p>\n
 14.  Accordingly,  I  do not find any force in the  submission  of  learned counsel for the objector and the award given by Shri Ram Bahadur dated  8th February 1993 is made rule of the court. The claimant shall be entitled  to interest  at the rate of 18% per annum on Rs.6,03,603.85 from the  date  of this decree till realisation.\n<\/p>\n
 15.  Decree sheet be prepared accordingly.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Union Of India vs M\/S Indian Proofing & General … on 29 May, 1998 Author: S Kapoor Bench: S Kapoor ORDER S.N. Kapoor, J. 1.1 This judgment shall dispose of IA Nos. 1970\/95, 1971\/1995 as well as suit No. 1880\/94. 1.2 In this case, the award was filed by the arbitrator along […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-40976","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nUnion Of India vs M\/S Indian Proofing & General ... on 29 May, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/union-of-india-vs-ms-indian-proofing-general-on-29-may-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Union Of India vs M\/S Indian Proofing & General ... on 29 May, 1998 - 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