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K.G. Hiranandani Vs. Bharat Barrel and Drum Mfg. Co. Pvt. Ltd. - Court Judgment

LegalCrystal Citation
SubjectService
CourtMumbai High Court
Decided On
Case NumberSuit No. 355 of 1963
Judge
Reported inAIR1969Bom373; 1969LabIC1324
ActsIndian Contract Act, 1872 - Sections 73; Code of Civil Procedure (CPC), 1908 - Sections 34; Constitution of India - Article 141; Evidence Act, 1872 - Sections 103 and 106
AppellantK.G. Hiranandani
RespondentBharat Barrel and Drum Mfg. Co. Pvt. Ltd.
Appellant AdvocateA.N. Mody and ;H.G. Advani, Advs.
Respondent AdvocateC.N. Daji and ;P.R. Kedia, Advs.
Excerpt:
a) the case debated on explanation as per section 73 of the contract act, 1872 in regard to mitigation of damages - it was ruled that it was not in the nature of an independent rule or duty but was merely a factor to be taken into account in assessing the damages naturally arising from the breach, for the purpose of main part of section 73 of the act ; b) the case debated on value of obiter dicta of supreme court in relevance to precedents, preamble - it was ruled that the obiter were entitled to the highest respect at the hands of all courts in the country and should be accepted as law unless they were in the nature of mere passing observations ; c) the case debated on breach of the contract of employment for a fixed period by the employer - it was ruled that employee was entitled to.....order(1) this is a suit field by the plaintiff to recover damages for wrongful termination of service amounting to rs. 92,019.54, together with interest from the date of suit, from his former employers, the defendants. it is really not necessary for me to refer to the facts of this case in detail for the simple reason that after issues were raised and some evidence recorded, mr. daji for the defendants very fairly made a statement that his clients did not desire to dispute the wrongful termination of the services of the plaintiff on which the present suit is based, but would confine the contest to the issues relating to damages, with the result that only issues nos. 4, 5, 7 and 8 survived in the present suit. a few facts may however, be mentioned at the very outset. the plaintiff retired.....
Judgment:
ORDER

(1) This is a suit field by the plaintiff to recover damages for wrongful termination of service amounting to Rs. 92,019.54, together with interest from the date of suit, from his former employers, the defendants. It is really not necessary for me to refer to the facts of this case in detail for the simple reason that after issues were raised and some evidence recorded, Mr. Daji for the defendants very fairly made a statement that his clients did not desire to dispute the wrongful termination of the services of the plaintiff on which the present suit is based, but would confine the contest to the issues relating to damages, with the result that only Issues Nos. 4, 5, 7 and 8 survived in the present suit. A few facts may however, be mentioned at the very outset. The plaintiff retired on superannuation from his service with the Western Railway in which he was, at the time of his retirement on the 7th January 1962, holding the post of Deputy Chief Mechanical Engineer and was drawing a salary of Rs. 1,600 per month/ On the 12th February 1962 the Defendants employed him in the grade of Rs. 1500-100-2000 as the General Manager-in-charge of their barrel factory in Bombay, and that employment was confirmed by a letter of appointment dated 19th April 1962 written by the defendant company to the plaintiff in which the terms of employment were set out in details. It is not necessary to refer to those terms beyond stating that the employment was in the grade mentioned above, plus certain other liberal benefits mentioned in the said letter, and was for a period of five years from the 12th of February 1962. The plaintiff worked at the factory of the defendant-company in Bombay till the 11th of March 1963, during which period he was deputed to go to Europe and America for certain purpose connected with the Defendants business for about five months. On the 12th March 1963, when the plaintiff went to the defendants factory as usual, he received a message from one D. C. Jalan, a Director of the defendant-company, calling him to the residence of the said Jalan. When the plaintiff went there, the said Jalan told him that for certain reasons to which it is now unnecessary to refer, the plaintiff should work at his own house instead of working at his office, and that the necessary papers would be sent to his house. When however, the plaintiff reminded the said Jalan by his letter dated 9th April 1963 about the increment in salary that had become payable to him on completing a year's service, and sent a further reminder to the said Jalan he received the defendants letter of the 21st of May 1963 alleging that the plaintiff had refused to accept the work which was assigned to him at the company's office at Calcutta and the defendants had, therefore, been constrained to relieve the plaintiff of his service with the effect from the 1st April 1963. The plaintiff by his letter dated 6th June 1963 in reply immediately denied the facts set out in the said letter, as well as the alleged termination of his services, and contended that the defendants were wrongfully and illegally terminating his services. The plaintiff thereafter filed the present suit on the 8th of October 1963 claiming the full salary and allowances payable for the remaining period of his contract of service with the defendants as damages for breach of contract by the defendants.

2. In view of the fact that it is now conceded that the termination of the plaintiff's services by the defendants was wrongful, it is not really necessary for me to refer to the defences that are to be found in the Written Statement in regard to the merits of the controversy between the parties. In paragraph 9 of the Written Statement, the defendants have denied the plaintiff's right to the damages claimed by him and have pleaded that in any event, the plaintiff was bound and liable to mitigate the alleged damages and was not entitled to claim the full amount Rs. 92,019.54 or any part thereof, or to claim interest thereon. Eight issues were framed by me in this case, but in view of the fact that the only questions that now survive are those relating to the damages to which the plaintiff is entitled, only four of them viz. Issues Nos 4, 5, 7 and 8 need to be dealt with. They are in the following terms:-

4. To what amount, if any, is the plaintiff entitled as and by way of damages?

5. Whether the plaintiff was at all material times bound and liable to mitigate the said alleged damages and has deliberately not done so as alleged in paragraph 9 of the Written Statement.

7. To what relief, if any, is the plaintiff entitled?

8. And Generally.

3. On the first date of hearing before me, viz. 21st August 1968, evidence of the plaintiff was led in regard to all issues, because it was only when the hearing was resumed on the next day that Mr. Daji made the statement that he would not contest the fact that the termination of the plaintiff's service was wrongful. In view of that statement by Mr. Daji it is now necessary for me to refer only to such parts of the plaintiff's evidence as relate to the question of mitigation of damages. Before I deal with the evidence on that point, it may be stated that the defendants have not led any evidence in this case at all. The plaintiff has stated towards the end of his examination-in-chief that, after he received the defendants letter of 21st May 1963, he tried to get employment elsewhere, but was not able to get any offer which he could accept, and that, under the circumstances, he had remained without employment right till now. When cross-examined by Mr. Daji on the point of mitigation of damages the plaintiff deposed that though he had in mind the manufacture of nuts and bolts as a business for himself after he retired from the railways and before he joined the defendants' service, he did not make any attempt in that direction after the termination of his services by the defendants, he tried to get employment with a concern offered to him were not suitable for him. He has stated that at this distance of time he does not remember what those jobs were, but what he recollected now was that they were not suitable from the point of view of view of salary as well as from the point of view of the nature of the work he would have been called upon to do. He, however, frankly admitted that he does not remember, even approximately, what was the salary that was offered to him by that concern or what was the nature of the jobs which they had offered him. The plaintiff has stated that he did not get any offers from anybody else, though he did try to obtain employment with some other private concerns whose names he did not remember. He has stated that he made those attempts through friends, but did not make any written applications to anybody, nor did he advertise for a job, and that he continued to make those attempts 'till 1964'. When questioned further, he said that he did not remember in which part of the year 1964 he had made attempts for getting employment. The plaintiff has stated later on in his cross examination that since August 1963 he has become a financing partner in a firm known as Everest Construction with a 30 per cent share, he having contributed 30 per cent capital of the said concern, and he has produced a copy of the Partnership Deed in respect thereof which has been tendered and marked Ex. 2. The Plaintiff has deposed that, being a financing partner, he did not have to do any work in connection with the business of the said firm, and that he did not attend its office at all except on rare occasions and did not have to go to the company's office even for the purpose of signing cheques, as almost all the cheques were prepared in the office and sent for his signature after being signed by one other partner who was also a financing partner, and that on an average he used to sign one or two cheques a month. Reference may be made only to two of the clauses of the Partnership deed (Copy ex. No. 2) viz., Cls. 9 and 14 . Though Clause 9 provides that the partnership business is to be managed and conducted by all the partners by mutual consultation and that the overall supervision as well as policy decisions were to be made by the capitalist partners, of whom the plaintiff is one, Clause 14 lays down that it is he two working partners, who were to receive., over and above their shares in the profits of the partnership, a fixed remuneration of Rs. 500 per month. This would show clearly that it is they who were to attend to the day-to-day business of the firm and not the plaintiff or the other capitalist partner who were only to regulate the policy of the firm. Having regard to the oral testimony of the plaintiff, and having regard to the terms of the Partnership Deed (Copy Ex. 2), I have come to the conclusion that the interest of the plaintiff in the firm of Everest Construction was nothing more than his interest as an investor, and that it did not require him to attend to the day-to-day business of that firm, with the result that the return which he got on his investment cannot be taken into account as being in mitigation of damages in the present in cross-examination that he had not tried to get any employment after his services with the defendants were terminated, his answer was, 'I did try but I assumed that I continued in the Defendants' service in view of my five-year contract with them', and he has further stated that he assumed that he would be called to duty at any time, as the said Jalan had told him on 11-3-63 that his brothers might reconsider the matter of the plaintiff's employment. He then proceed to say that he came to know of his termination by the defendant's letter dated 21-5-1963. Reading these answers together, it is quite clear that it is only from the 11th of March 1963 till 21st May 1963 that the plaintiff assumed that he had continued in the defendant's service. In any event, what I am concerned with is only the question of assessment of damages, and the plaintiff has stated in clear terms that he did make the efforts to which he has deposed. Mr. Daji then asked the plaintiff in cross-examination whether after receipt of the letter dated 21st May 1963 he had shown readiness and willingness to work in the company's office at Calcutta, and the answer of the plaintiff was that he had by his letter dated 6-6-1963 in reply clearly stated that there had been no such assignment of work in the company's Calcutta office to him. When it was further put to him that after receipt of the said letter dated 21st May 1963 he did not offer to go to Calcutta, the plaintiff stated that he was never offered any job by the defendants at Calcutta, nor did not occur to him that he should make any such offer. In this connection, it may be mentioned that the plaintiff has stated that the defendants had a large factory in Bombay, and only a tiny plant at Calcutta, and that answer of the plaintiff would clearly suggest that a General Manager in the grade and with the allowances which were granted to the plaintiff would not be require to work at Calcutta. It may be mentioned that there is no evidence before me at all, oral or documentary, to show that any job had been offered by the Defendants to the plaintiff at Calcutta. As far as the statement in the said letter of 21st May 1963 that the plaintiff had refused to accept the assignment of work at Calcutta is concerned, that is a matter prior to the breach and cannot be taken into account in assessing damages which must be as at the date of the breach. At the conclusion of his cross-examination, Mr. Daji put to the plaintiff that he had not made any genuine efforts to obtain employment, to which his answer was that he did make 'some efforts'. That is all the evidence that arises for my consideration in regard to the question of damages.

4. Before I proceed to deal with the rival contentions of the learned counsel on either side, it would be convenient refer to material portions of Section 73 of the Contract Act which is the section which lays down what may be called the measure of damages in case of breach of contract. The substantive portion of that section lays down the basic rule that a party who suffers by the breach is entitled to receive from the party in breach 'compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach'. The Explanation to the section lays down that in estimating the loss or damage arising from the breach of a contract, 'the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account'. Though what the Explanation enacts is popularly called the 'rule' in regard to mitigation of damages, and has been so referred to even in some decided cases and standard works, and though it is loosely called a 'duty' to mitigate, the position really is, as out legislature has rightly stated, merely this, that what the Explanation enacts is not in the nature of an independent rule or duty but is merely a factor to be taken into account in assessing the damages naturally arising from the breach, for the purpose of the main part of Section 73. That is precisely the reason why it is enacted, not as a sub-section or a separate paragraph, as an 'Explanation' to the substantive rule in the first part of Section 73. Support is to be found for this view which I am taking in a passage in Mayne on damages (12th ed.) para 149, point (2), in which it is stated that the expression 'duty to mitigate' is the common and convenient way of stating the position, but that expression is a somewhat loose one, since there is no duty which is actionable or which is owed to any one by the plaintiff. It is further pointed out in the said message that the plaintiff cannot owe a duty to himself, and that the position is similar to that of a plaintiff whose damages are reduced because of his contributory negligence. If means existed of remedying the inconvenience caused by the breach of contract which have not been availed of by the plaintiff, the damages claimed by him cannot be said to arise 'naturally' from the breach within the main part of Section 73 of the Contract Act or, to put it in another way, the means, if any, of remedying the inconvenience caused by the breach of contract are factors that go to reduce the damages that might otherwise have been said to have arisen 'naturally' from the breach, That, in my opinion, is the proper construction that should be placed upon, what is popularly called the rule in regard to mitigation of damages.

5. Having construed the relevant statutory provisions in the preceding paragraph, I will now proceed to deal with the rival contentions of the parties. It is the contention of Mr. Daji that in cases of breach of a contract of service, damages are never given for the fill remaining term of service, but that they have been given by Courts only for a reasonable period or for a reasonable period of notice. It is further contention of Mr. Daji that, in any event, there was a duty on the plaintiff to mitigate damages, that the onus of proving what efforts he made to obtain alternative employment is on the plaintiff, and that the evidence that the plaintiff, and that the evidence that the plaintiff has given on the point shows that he has really made no efforts whatsoever to mitigate damages the onus which according to Mr. Daji, lies upon him. As far as the first proposition that in cases in which the contract of employment was for a fixed period, the normal measure of damages would be the salary for the whole of the unexpired period of service. The cases cited by Mr. Daji were all cases in which there was no fixed term of employment for a fixed term, damages have been given for a shorter period, as being the normal measure apart. It is not necessary for me to deal with each one of the cases on which Mr. Daji has relied, but I may refer to three of them to show that the principle of awarding damages for a reasonable period or reasonable period of notice comes into play only when the contract of employment is not for a fixed term. The case of Sree Minakshi Mills Ltd. v. Anantrama Ayyar : AIR1930Mad654 was cited by Mr. Daji. The statement at p. 658 in the judgment in the said case that the Court had after all to see in each particular case what time may reasonably by expected to elapse before a person wrongfully dismissed can secure a similar employment, must be read in the context of the facts of that case which show clearly that the employment was not for a fixed term. It may be mentioned that it was observed in the said judgment that the doctrine of reasonable that that is the time during which a fresh employment may reasonably by obtained, and that both the principles come to the same thing. No question of reasonable notice can possibly arise in the case of a contract for a fixed term, and it is, therefore, clear that the principle laid down in the said case has no application to a case like the present one in which the contract was admittedly for a fixed term of five years. Mr.daji has also relied upon a decision of the Calcutta High Court in the case of Prafulla Ranian v. Hindusthan Building Society Ltd. : AIR1960Cal214 , but the facts of the said case shoe clearly that the plaintiff's employment as the secretary of the defendant was for an indefinite period terminable by reasonable notice, and it was on those facts that the Court proceeded to hold that the plaintiff was entitled to 9 month's salary in lieu of notice by way of damages. Mr. Daji also cited a decision of the High Court of Travancore-Cochin in the case of Thomakutty v. Thomas. AIR 1954 Trav-co 104 in which also it is clearly stated in the judgment, para 7, that the appointment of the plaintiff as permanent teacher did not mean that the tenure of office was guaranteed for any definite period, and that the word 'permanent' in the appointment order was used merely in antithesis to the words 'acting' or 'temporary'. It was on those facts that the Court held(paragraph 17) that the service could only be terminated after reasonable notice, except where the dismissal was for proved misconduct or for other justifiable causes, and that the period of the notice would ordinarily be fixed as the rime during which a fresh employment might reasonably be expected to be obtained, and awarded to the plaintiff (paragraph 20) twelve months' salary as and by way of damages. No useful purpose would be served by my discussing any of the other cases cited by Mr. Daji which can be served by my discussing any of the cases cited by Mr. Daji which can distinguished on precisely the same grounds as these three cases. As against those cases, there is a vast array of authority laying down that the normal measure of damages in the case of breach of a contract of employment for a fixed term is the salary for the whole of the unexpired period of service. It would be convenient to refer at the outset to the decision of the highest Court on the point, and that is the decision of the Supreme Court in the case of S. S. Shetty v. Bharat Nidhi Ltd., : (1957)IILLJ696SC in which Bhagwati, J. delivering he judgment of the bench, laid down (paragraph 13) that if the contract of employment is for a specific term, the servant would, in that event, be entitled to damages the amount of which would be measured, prima facie and subject to the rule of mitigation, in the salary of which the ,aster and deprived him. Bhagwati J. then proceeded to lay down in the same paragraph that the servant would, in that event, be entitled to the whole of the salary, benefits etc., which he would have earned had he continued I the employ of the master for the full term of the contract, subject for the full term of the contract, subject of course, to mitigation of damages by way of seeking alternative employment. The appellant in that case had taken up service with the respondent, but was discharged on the pleas that he had become surplus to the requirement of the Respondent company. On adjudication by the industrial tribunal, his discharge was held to be illegal and the appellant was ordered to be reinstated within a month of the date of the publication of the award. The respondent having failed to reinstate the appellant, the appellant claimed Rs. 47,738 as compensation on account of the pay he would have earned till his 55th year of age. The Supreme Court took the view (paragraph 22) that, having regard to the terms and conditions of the appellant's service, it was possible for the respondent had been found which the respondent to terminate the service of the appellant by paying him one month's salary in lieu of notice, but that in view of certain unfair practice of which the respondent had been found guilty, that right, which the respondent would have had, could not be availed of by the respondent and, having regard to all these factors. the Supreme Court came to the conclusion (paragraph 24) that it would be reasonable to compute the benefit of reinstatement which was awarded to the appellant at the amount of Rupees 12,500. Though, therefore, this was not a case of an employment for a fixed term, the Supreme Court, in discussing the law on the point, has made (paragraph 13) the observations to which I have referred above. it is too well settled to need authority that even he obiter dicta of the Supreme Court are entitled to the highest respect at the hands of all Courts in this country and should be accepted as law. : AIR1959Bom320 , unless they are in the nature of mere passing observations. In view of the law as laid down by the Supreme Court in the said case, it is really unnecessary for me to refer to any other authorities on the point. I may, however briefly cite some of them. The same principle has been laid down earlier by a Division Bench of this Court in the case of Gokak Municipality v. Rajaram Shridhar 42 Bom LR 886 = : AIR1940Bom386 though that was also a case in which there was no contract to employ the plaintiff for a definite period. In the case of Sundaram v. Chokalingam AIR 1938 Mad 672, however, the contract of employment was for a fixed term f three years and was terminated before the expiry of that period, and it was laid down by a Division Bench of the Madras High Court at p. 674 that, where the employment was bound to pay the stipulated salary for the full period, unless he showed that the discharged servant had an opportunity of other employment but refused to avail himself of it, and that as t had not been shown that he appellant could have obtained other employment, he was entitled to payment from the date of wrongful termination of his service till the expiry of the full period of three years. This decision of the Madras High Court has been followed by Hidayatullah C. J. in case of Trimbak Gopal v. Akola Education Society. : AIR1957MP144 in which also the employment was for a fixed term viz. from 15th June 1950 to 31st March 1951, and it was held that it could not be terminated before the expiry of that period, unless the employee was at fault, and that where the employment was for a definite period, the employer was bound to pay the stipulated salary, unless he showed that the discharged servant had an opportunity of other employment, but refused to avail himself of it. The same proposition in regard to the measure of damages for the wrongful dismissal of an employee for a fixed term is to be found in standard works on the subject. In Mayne on Damages (12th edn.) Para 608, it is stated that the plaintiff would have earned had the employment continued according to the contract, subject to a deduction in respect of any amount which the plaintiff in minimising damages either had obtained or should reasonably have obtained. The learned author, however, proceeds to point out that whereas in the case f sale of goods the general rule in regard to measure of damages is the difference between the contract price and the market price at the date of the breach, in the case of the breach of a contract for wrongful dismissal prima facie the measure of damages is the contract price, which is all that the plaintiff needs to show, subject to mitigation by the plaintiff, the onus of showing that the plaintiff, has or should have obtained alternative employment being on the defendant. It is further stated (para 609) that basically, the amount that the plaintiff would have earned under the contract is the salary of the wages which the defendant had agreed to pay. In Chitty on Contracts (22nd edn.) Vol, 2. para 1141, the rule is formulated in the same terms. In Halsbury's Laws of England (3rd edn.) Vol. 11, p. 244 para 414, it is stated in somewhat more specific terms that the measure of damages for wrongful dismissal, is the loss thereby incurred, and that would, subject to the duty of the plaintiff to mitigate, normally be the wages due and payable for the agreed period of service. In Sarkar on the Law of Master and Servant (1939 edn.) at page 243, it is stated that 'in actions for wrongful dismissal, the general rule is that the plaintiff may recover damages for the whole unexpired period o service', except in cases where it is provided that the agreement might be terminated at an earlier date by giving previous notice. in view of these clear authorises on the point, I have no hesitation in holding, as I do, that in the case of a contract of employment for a fixed period, the normal measure of damages is the salary for the whole of the unexpired period of service.

6. The next question that I must proceed to consider is in regard to the rule relating to mitigation of damages as laid down in the Explanation to Section 73 of the Contract Act. I have already expressed my views in regard to the construction of the substantive portion of Section 73 and of the Explanation thereto, and I need not repeat the same. What I must, however, proceed to consider is, on whom is the burden of proving that there existed means of remedying the inconvenience caused by the breach, within the terms of the Explanation to Section 73 of the Contract Act, and what is the extent of what is loosely called the 'duty' of the plaintiff to mitigate damages, but which, as already stated earlier in this judgment, not really a duty but is a factor which goes to reduce the damages that might otherwise have been assessed. Before I discuss the authorities in regard to these questions. I may deal with two regard to the question on onus. He has contended that the onus is on the plaintiff to show that he made proper attempts to obtain alternative employment and thereby mitigate damages. Mr. Daji has further contended that, in any event, the facts relating to the attempts made by the plaintiff to mitigate damages would be especially within his knowledge and that, therefore, the burden of proving those facts would on him by virtue of the provisions of Section 106 of the Evidence Act. Apart from the authorities which I shall presently discuss, I am afraid, I cannot accept either of these arguments of Mr. Daji in regard to the terms of the Explanation and the way in which it is worded and viewed it in its proper perspective, as already stated 'the means which existed of remedying the inconvenience caused by the non-performance of the contract' which must be taken into account would, in the case of a contract of employment, be nothing else but the existence or non-existence of other jobs is not a matter which could be said to be especially within the knowledge of the plaintiff within the terms of Section 106 of the Evidence Act. Moreover, it is the non-evidence of suitable jobs that onus lay upon him./ The law does not require a plaintiff to prove the negative, except in cases in which, in order to show a right to relief, it is necessary for he plaintiff, under the substantive law to prove the non-existence of a fact. That is not the case here as Section 73 of the Contract Act does not require that in order to get relief by way of damages in an action for wrongful dismissal the plaintiff must prove that other jobs were not available. What the Explanation to Section 73 lays down is, in effect, only a permissible deduction in assessing damages. Under the rule laid down in S. 103 of the Evidence Act, the burden of proving a fact lies ion the person who wishes the Court to believe in its existence, or in other words, on the person who asserts the positive existence of those facts, and not on the person who relies on the negative by way of the non-existence of those facts. If the defendants discharge that onus might then shift to the plaintiff to prove that, for certain reasons, he could not avail himself of those means. In the present case, however, that stage never arrived, because the defendants did not lead any evidence at all.

7. Having dealt with the question of onus on principle and in the light of the provisions of the Evidence Act, I must now turn to the authorities which were cited on the point. Mr. Daji has relied on a decision of the Allahabad High Court in the case of Prabhu Lal v. District Board, Agra : AIR1938All276 in which Harries J. has, in his judgment at pp. 288-289, after stating that a dismissed servant cannot be permitted to do nothing for himself and than claim an indefinite loss of salary, stated that the very fact that the plaintiff gave no evidence that he had attempted to minimise his loss suggested strongly that he was not really suffering any substantial loss as a result of his dismissal from service as the secretary of a /district Board. Though the word 'onus' is not used by Harries J. in hat statement, here ca be no doubt that Harries, J. does proceed mitigating circumstances in an action for wrongful dismissal would be on the plaintiff. In the case of Aliya Begam v. Mohini Bibi, AIR 1943 Oudh 17 which, it may be stated, was not a case of wrongful dismissal, it was laid down at p. 33, col. I that the explanation to Section 73 seems to cast burden upon the person complaining of the breach of contract to show hat he did not possess means of remedying the inconvenience caused by the non-performance of the contract, that there was no evidence on record to show that here was any insuperable obstacle in the way of the plaintiffs in the said case to raise money on the security of their houses in order to save the property from sale, and that, under the circumstances the appellants could not be granted by way of damages the actual value of the houses which were sold in satisfaction of the decree. It may be mentioned that the court was satisfied I the said case that the claim for damages arose out of a breach of a term of the contract on the part of mortgagee and loss caused to the mortgagee by the sale of their property for inadequate price arose out of that very transaction. Mr. Daji has also relied on the decision of M. P. High Court in the case of Pannalal v. State of Madhya Pradesh, : AIR1963MP242 which was a case of breach of contract with the government by a contractor, and it was held (para 15) that the Explanation to Section 73 of the Contract Act casts a burden upon the person complaining of breach to show that he did not possess means of remedying the inconvenience caused by the non-performance of the contract. It may be mentioned that reliance was wrongly placed for that proposition on the judgment of the Privy Council in the case of Jamal v. Moolla Dawood, AIR 1915 PC 48=43 Ind App 6 at p. 10 which does not deal with the question of onus, but merely lays down the proposition that the 'duty' of taking all reasonable steps to mitigate loss consequent upon the breach is on the plaintiff, and that he cannot be claim as damages any sum which I due to his own neglect. The case of Tanjore Permanent Bank v. G. N. Muniswami, : AIR1964Mad183 relied upon by Mr. Daji was a case of breach of a contract of service which was not for a fixed term. It was laid down in the said case that as the employee had not established that he made any attempts to get re-employment over any stated period, and as the employment in which the respondent was engaged could in no sense be described as of a specialised character, and no evidence had been led to show the reasonable period within which re-employment could have been secured, the power Courts had acted liberally in awarding twelve months' salary by way of damages. These observations do show hat case was that the onus of proving factors mitigating the loss was on the plaintiff. There can be no doubt that the cases which I have just discussed take that view, but I am unable to agree with the view expressed therein, both o principle as already discussed above, as well as on the authorities which I shall presently discuss.

8. I have already referred to the case of AIR 1938 Mad 672 in another context and to the observation made in the judgment in that case to the effect that it is for the employer to show that the discharged servant had an opportunity of other employment but refused to avail himself of it, It is necessary for me to discuss that case once again. I have referred to the decision of the Calcutta High Court in Prafulla Ranjan's case, : AIR1960Cal214 also in another context. in the said case after referring to the observations of Leach C. J. in Sundaram's case, Air 1938 Mad 672 as regard to the burden of proof being upon the defendant, it has been stated in the judgment of the learned judge (paragraph 34) that the defendant in the case before him had adduced no evidence at all to show what the plaintiff should have done to mitigate damages, and those circumstances the plaintiff was entitled to the damages to which he would otherwise have been entitled. I do not think it necessary to discuss the said case once again. Mr. Mody has also relied upon the statements on the point of onus that are to be found in standard works which are all to the effect that the onus of proof on the issue of mitigation is on the defendant, and if he fails to show hat the plaintiff ought reasonably to have taken certain mitigating steps, then the normal measure will apply. reference may be made in this connection to Mayne on Damages (12th edn.) para 149, clause (4), footnote 27 under para 150 and para 986 in which, after stating that the burden of proof of the issue of mitigation is on the defendant, the learned author proceeds to state that the normal measure of damages will not be cut down that the plaintiff ought reasonable to have suggested mitigating steps. Reference may also be made in this connection to the statement to the same effect in Chitty on Contracts (22nd edn.) Vol. 2, paragraph 1141 and Vol. 1, paragraphs 1381-1382. In paragraph 1382 of the latter volume, it is stated in clear terms certain steps to mitigate his loss. To the same effect is the statement of the law in regard to onus on the issue of mitigation in Halsbury (3rd edn) Vol. 11, page 290, Para 333, not only is it stated that the burden of proving hat the plaintiff had the means at hand for mitigating damages and did not avail himself of them is on the defendant, but it is laid down that it also essential for the defendants to plead the specific matters in mitigation of damages on which they rely. I prefer the view taken in the cases relied upon by Mr. Daji on the question of onus of proof and I, therefore, hold that the onus is on the defendants to show that the plaintiff ought reasonably to have taken certain mitigating steps.

9. As far as the question of the extent of the efforts which a plaintiff ought to make if the defendant shows that means existed of mitigating the loss, is concerned, as observed by Sir Dinshah Mulla in his commentary on the Indian Contract and Specific Relief Act (8th edn.) at page 472, in applying the Explanation to S. 73, Courts should take care to see tat they have put the plaintiff in same position as if the contract had been performed, and have not been over-generous to the contract-breaker by too severe an application of the rule that the plaintiff must take reasonable steps to mitigate damages. The same learned author has said at page 468, that the rule in regard to mitigation must be applied with discretion and a man who has already put himself in the wrong by breaking his contract has no right to impose new and extraordinary duties on the aggrieved party. The Privy Council itself has, in the leading case of Foley, v. James AIR 1917 PC 255, observed that in many cases the nature of the contract, or its circumstances. may take it extremely difficult, if not impossible, to apply the rule in regard to mitigation of damages, but that rule of law seems to apply to all contracts 'where it can practically take effect'. In the case of James Finlay and Company Ltd, v. N. V. Kwik Hoo Tong Handel Maatschappij, (1928) 2 KB 604 (confirmed in (1929) 1 KB 400) it has stated that no doubt a plaintiff is bound to take steps, to minimise damages, but that doctrine 'must be construed reasonably'. In the case of AIR 1915 PC 48 = 43 Ind App 6 at p.10 already cited above it has been laid down by the Privy Council as undoubted law that the plaintiff who sues for damages owes the duty of taking all reasonable steps to mitigate the loss consequent upon the breach and cannot claim as damages any sum which is due to his own neglect. The Privy Council, however, proceeds to state that the loss to be ascertained is the loss at the date of the breach, and if at that date the plaintiff could do something or did something which mitigated the damages, the defendant is entitled to the benefit of it. As far as the question of the extent of the efforts which the plaintiff would be called upon to make for the purpose of mitigating damages is concerned, the position on the authorities therefore, seems to be clear that that obligation is to be reasonably construed and can only be imposed on the plaintiff where it can practically take effect. In this connection, it may further be pointed out that, in the case of a breach of a contract of employment, the plaintiff is not bound to take up just any and every employment that may be available to him e.g. as pointed out in Mayne on Damages (12th edn.) para 611 at page 526, the employee is not expected to accept an employment in a lower status, nor will he be expected to accept employment in a different part of the country or in a different type of work.

10. Having regard to these legal principles laid down by the authorities in regard to the question of burden of proof and in regard to the question of the extent of the efforts which the plaintiff may be bound to make in order to mitigate the loss arising from the breach. I must now turn to the facts of the present case and the position as it arises in view of the evidence on record. The defendants not having led any evidence whatsoever to show that means existed by resorting to which the plaintiff could have mitigated the loss arising from their breach of contract. The only way they can succeed in discharging the onus which lay upon them to prove those facts would, therefore, be to establish from the evidence of the plaintiff himself in cross-examination that such means did exist of which the plaintiff did not avail himself. I have already discussed the evidence of the plaintiff in some detail earlier in this judgment and it is not necessary for me to deal with it over again. Suffice it to say, that there is nothing in the evidence of the plaintiff which the defendants have been able to elicit in cross-examination which would show that a job similar to that of the general manager of a factory with a somewhat similar status and pay scale as well as nature of work was available in Bombay at the time or about the 21st of May 1963 when the breach occurred. The evidence of the plaintiff also shows, though he was not bound to show it in view of the failure of the Defendants to discharge the onus which lay upon them, that he did make some efforts to obtain alternative employment. No doubt those efforts were somewhat feeble, on the evidence as it stands, but in this connection, it must not be forgotten that the duty to minimise the loss which is imposed upon an aggrieved party has to be reasonably construed in a practical manner. The plaintiff was a superannuated man and it would be certainly difficult for him to obtain employment of this nature, or anything similar thereto, on a similar pay scale in the city of Bombay. The efforts that he made were, as stated by him, only till some time in the year 1964, but having regard to the facts just mentioned by me, he may well have felt that it was no use his attempting to goon trying for a job of that nature in view of his experience during the few months subsequent to his wrongful dismissal. I do not think the Court would be justified in imposing upon him the extraordinary duty of making frantic efforts for obtaining alternative employment right through the period for which he was employed by the defendants. As stated in the passage in Mayne on Damages (12th Ed.) para 986 to which I have already referred, if the Defendants fail to discharge he burden of showing what the plaintiff should have done to mitigate damages the normal measure of damages, which in this case would be the salary for the whole of the unexpired period of service. to which the plaintiff would be entitled will not be cut down. Even if I am wrong in the view which I have taken above that the onus is on the defendants to show that the plaintiff ought reasonably to have taken certain mitigating steps, since the plaintiff would, in effect, have to prove negative, viz, the absence of alternative employment, he need give only a slight evidence of the same 47 Bom LR 304 = AIR 1945 Bom 320 and the evidence which the plaintiff has given is, in my opinion, sufficient for that purpose. Looking at the matter from any point of view, therefore, there is no substance whatsoever in the defendants' plea that the plaintiff is not entitled to the damages claimed by him for the full unexpired period of service.

11. In the result, I hold that the Plaintiff is entitled by way of damages to the salary for the full unexpired period of service. As far as the allowance relating to the car and the telephone which have been mentioned in the particulars annexed to the plaintiff and marked 'C' and claimed in this suit are concerned, in my opinion, the plaintiff is not entitled to the same, as the car as well as the telephone were intended to be used for the purpose of discharging the plaintiff's duties as the general manager of the defendants. The plaintiff is, however, entitled to all the increments in salary which he would have earned had the contract not been broken by the defendants. As far as the plaintiff's claim for interest is concerned, it is well-settled, by now that interest prior to the suit cannot be awarded by way of damages, but that the awarding of interest as from the date of the filing of the suit is a matter resting in the discretion of the Court under Section 34 of the Code of Civil procedure which is not confined in its terms to claim for liquidated damages only: : [1961]3SCR639 . IN the case reported in : [1961]3SCR639 interest on damages from the date of suit was awarded by the Supreme Court at the rate of 4 per cent per annum, but rates of interest, in general, have arisen since then, and even the Court rate of interest has now gone up to 6 per cent. I, therefore, propose to allow interest at the rate of 6 per cent per annum. In view, however, of the fact that the whole amount of the salary claimed by way of damages had not yet become due as at the date of the of the suit, in the exercise of my discretion, I propose to allow interest at the rat of 6 per cent per annum on the aggregate amount of the salary, together with the increments, which became due to the plaintiff, from the expiry of the period of the contract of employment on the 12th February 1967, till payments

12. I answer the issues as follows:-

1, 2, 3, and 6 Given up by the Defendants

4, 7, and 8, See Order below.

5, The plaintiff ought to take reasonable steps to mitigate the loss naturally arising from the breach of contract on the part of the defendants. It has, however, not been proved that the plaintiff has not done so.


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