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Chunilal Ishwardas Vs. the Secretary of State - Court Judgment

LegalCrystal Citation
Decided On
Case Number Joint Appeal Nos. 38 and 42 of 1908
Reported in(1910)12BOMLR769
AppellantChunilal Ishwardas;The Secretary of State
RespondentThe Secretary of State;chunilal Ishwardas
.....instead- mint officers accepting the coins-estoppel, acquiescence or ratification by government-loss to government-measure of damages.;a shroff was appointed by government as an expert to pass babashahi silver coins, on the occasion of withdrawing the babashahi currency. the shroff worked for about a month, during which he accepted and passed as babashahi, 12170 shikkai coins. those coins were finally passed on to the mint. the shikkai coins had long before that date ceased to be current and had only bullion value. government having alleged that by the shroff's action, they suffered a loss of rs. 1758-15-1, the shroff paid them a sum of rs. 1,095. government, however, being of opinion that they still suffered a loss of rs. 663-15-i by the shroff's action, filed a suit to recover the..........employed by government as shroff to examine and pass only babashai silver coins and not to accept shikkai coins has not been made the subject of any convincing argument. but it is urged that the right of government to complain that the appellant as their agent has acted contrary to the directions given to him and the purpose of his employment is lost by reason of their conduct in keeping the shikkai coins, instead of returning them to the appellant, and in allowing without objection such coins to be remitted to the mint. this defence, if it means anything, must amount either to a plea of estoppel, or acquiescence, or ratification, or novation, that is, anew contract of agency barring the right of government to claim damages from the appellant off the specific contract of agency on which.....

N.G. Chandavarkar, Kt., J.

1. In Appeal No. 38 of 1908, the learned District Judge's finding that the appellant was employed by Government as shroff to examine and pass only Babashai silver coins and not to accept Shikkai coins has not been made the subject of any convincing argument. But it is urged that the right of Government to complain that the appellant as their agent has acted contrary to the directions given to him and the purpose of his employment is lost by reason of their conduct in keeping the Shikkai coins, instead of returning them to the appellant, and in allowing without objection such coins to be remitted to the Mint. This defence, if it means anything, must amount either to a plea of estoppel, or acquiescence, or ratification, or novation, that is, anew contract of agency barring the right of Government to claim damages from the appellant off the specific contract of agency on which the action was funded. In the Court below, no such defence was set up in the pleadings, unless we are to understand the third issue as covering them. But it cannot be so understood. That issue merely raised the question whether the appellant was misled by the action of the Revenue authorities with reference to the coins in such a way as to exonerate him from responsibility. Assuming that the pleas in question did arise on the issue, the evidence falls far short of what the law requires to sustain them.

2. The appellant was employed as an expert to pass Babashai silver coins only. If he passed other coins, the fact that his employer appointed others, such as appraisers at the Mint, and the Mamlatdar and the Aval Karkun at the sub-treasury at Nariad, to see whether the appellant did his duty according to the directions, and that those others allowed Shikkai coins to be passed by him, cannot relieve him from his duty as agent. There was no contract between him and Government that he should be held to have fulfilled his duty, if other servants employed by them to inspect his work allowed him to depart from directions given to him. As for the fact that Government kept and had the benefit of the Shikkai coins, that by itself raises no presumption of either estoppel, or acquiescence, or ratification. The directions given to the appellant when he was employed were specific; he was to pass Babashai silver coins only. That was his duty, irrespective of supervision or inspection. If he, or any other person similarly employed, remitted other coins, and the Mint officers kept and used them for Government, it cannot be said either that Government caused the appellant intentionally to believe and to act upon the belief that their specific directions were modified by them-and that the original purpose of the agency was changed, or that they acquiesced in or ratified the appellant's acts. Ratifi, cation and acquiescence mean a full knowledge of the facts. The Mint officers were agents of Government to receive Babashai coins; they were not agents to contract for and on their behalf in the matter. Their action cannot bind Government except so far as Government have derived benefit from the action of the Mint officers. That benefit makes them liable only so far that it is to be taken into account in measuring the damages for the loss sustained by Government in consequence of the appellant's deviation from the directions given to him and the purpose of his employment.

3. The next question is as to the measure of damages. The lower Court has taken as measure the difference between the price actually paid by Government for the Shikkai coins (Rs. 100 for 130 Shikkais as if they were Babashai) and their market value. Calculating the damages on tin's principle, the lower Court has held that the amount paid by the appellant to Government under protest fully represented the loss incurred by them owing to his breach of the contract of agency. The appellant seeks by his claim to recover a portion of that amount on the ground that Government, having retained and made use of the Shikkai coins, are entitled only to nominal damages. This contention ignores the principle that nominal damages are allowed only where there is failure to prove any appreciable damage in fact. That cannot be said to have been the case here. For the Shikkai coins which were let in by the appellant in breach of his duty, Government paid at a certain rate and had to suffer actual loss in money. That is found by the Court below and we have heard no argument against that finding. It is questionable whether the lower Court is right in estimating the loss sustained by Government by the difference between what Government paid for the coins and their market value. That question is raised by Government in their Appeal (No. 42 of 1908) from the decree in the suit brought by them against the present appellant Ishwardas. But the question does not arise in this appeal.

4. On these grounds the decree in appeal No. 38 of 1908 must be amended as to costs which are to be paid by the appellant. In other respects the decree must be confirmed with costs.

5. Dealing now with appeal No. 42 of 1908, it arises out of a suit brought by the Secretary of State for India in Council to recover from the defendant, Ishwardas Bhogidas, a certain amount as representing the loss caused by him by passing a certain number of Shikkai coins as genuine Babashais, contrary to his contract of agency with Government. The defendant had paid to Government under protest a sum in satisfaction of the loss, but Government claimed more and filed the suit.

6. The lower Court disallowed the claim on the ground that the sum paid by the defendant under protest fully represented the loss,

7. After Government had preferred this appeal from the lower Court's decree, the defendant (respondent), Ishwardas Bhogidas, died, and his legal representative was brought on the record in his place.

8. A preliminary objection to the hearing of the appeal is raised on the ground that the action, being of a personal character, does not survive owing to the death of the original defendant, Ishwardas Bhogidas, according to the maxim ' actio persona/is moritur aim persona.'

9. The application of that maxim is limited to actions in which remedy is sought for a tort, or, for something which involves, at any rate, the notion of wrong-doing' : per Lord Macnaghten in United Collieries Ld. v. Simpson [1909] A.C. 383. But it does not apply to actions in which compensation is claimed for injury to property on the strength of an express or implied contract: Phillips v. Homray (1833) 24 Ch. D. 439. ' It is not only where there is an express contract that a suit, grounded on some default of the person, whose representative is sued, can be maintained; but if the position of the parties was such that the law of England would imply a contract from that position, then on assumpsit the executor might still be held liable. There are many cases where an action can be brought upon an obligation implied by law in consequence of the position which the parties have undertaken to one another': Batthyany v. Walford (1887) 36 Ch. D. 269. See also Bunbury v. Hewson (1849) 3 Ex. 560.

10. The present is one of such cases, because here the defendant Ishwardas undertook to pass only Babashai coins. It was an implied term of that contract that, if he passed any other coin as Babashai and Government suffered loss, he should make it good Section 211 of the Indian Contract Act. Government complain and have proved that, owing to his negligence, they have been out of pocket, inasmuch as they had to pay in their own currency for Shikkai, instead of Babashai, coins. The injury complained of is to their personal estate, and the action is one on assumpsit since the defendant, by the term of his employment annexed by law to the contract, had agreed to indemnify Government for the loss.

11. The action, therefore, survives. The next question in this appeal is whether the damages have been estimated by the lower Court on a correct principle. That Court has held that Government are entitled to damages being the difference between the money they paid actually. (Rs. 100 for 130 Shikkai coins, as if they were Babashais), and the market value of the Shikkai coins at the date of the remittance of the latter to the Mint. Government object to the market value being taken into account and contend that only the bullion value of the Shikkai coins must be deducted. The principle adopted by the lower Court regards the transaction as one between vendor and vendee, not as between principal and agent. In Cassaboglou v. Gibbs (1882) 9 Q.B.D. 220, the plaintiff appointed defendant as his agent to select opium of a certain description; the defendant selected and sent opium of a different description, part of which the plaintiff sold. The plaintiff sued the defendant for loss and claimed damages on the footing of the difference between the market price of the article ordered and the proceeds of the sale of the drug actually sent. But it was held that he could not so claim and treat his agent as vendor of the opium to him, and that all the plaintiff was entitled to was the actual loss and damage sustained by him through the defendant's negligence and breach of duty. In the present case the Shikkai coins had ceased to be a legal tender and the evidence adduced by the respondent to show that people were buying them in market is not satisfactory. The evidence adduced for Government to prove that the market rates relied upon by the respondent were inflated and fictitious is not contradicted; and the experts examined state that since Shikkai ceased to be a legal tender, its price has been reckoned according to the bullion value (see Exhibits 116 and 69).

Heaton, J.

12. In a series of suits the Secretary of State for India in Council claimed against certain shroffs for damages for breach of a duty they had contracted to perform. Briefly stated, the facts are these : on the occasion of the substitution of British Indian for Baroda Babashai rupees, the Government treasuries undertook to accept all genuine Babashai rupees at the rate of 100 British Indian for 130 Babashai. The defendant-shroffs were employed at the Treasuries to scrutinize the coins offered and to pass only genuine Babashai. As a fact they passed large numbers of Shikkai rupees, and thereby, it is alleged, caused a loss to the Secretary of State for India in Council. Subsequently the shroffs paid certain sums by way of damages but the Secretary of State, deeming the amounts so paid insufficient, has sued to recover further damages. The shroffs sued separately to recover what they had paid.

13. The suits were' heard by the District Judge, Ahmedabad, who by consent, disposed of all the contested points in one judgment. He dismissed all the suits and ordered the parties to bear their own costs, holding that though the shroffs were liable in damages, they had paid enough.

14. Both parties have appealed, and here, as in the Court below, one judgment will suffice.

15. The District Judge has dealt adequately and convincingly with the appellant-shroffs' defence that they believed the expression ' genuine babashai' included Shikkai rupees and that they did not disobey their instructions in accepting Shikkai rupees. There can be no doubt in my mind, on the evidence, that the shroffs deliberately accepted Shikkai rupees knowing that they ought not to do so and understanding why they ought not. This defence is so disingenuous and without merit that I am surprised that we were troubled with it in appeal.

16. The defence that had Government returned the Shikkai rupees the shroffs could have minimised their obligation to make good the loss to Government is almost as disingenuous and quite as unconvincing. The idea underlying this defence is that had the Mint returned the Shikkai rupees, the shroffs could have exchanged them for Babashai, have changed the latter for British and so have reduced their losses to something far short of what they have been required to pay to the Government. How far the arithmetic of the defence is good I do not enquire. At what rate the shroffs could have got rid of the Shikkai rupees had they been returned, is a matter of pure imagination and conjecture on which we need not occupy our minds. It will suffice to say that the Government were not under any obligation express or implied to return, without any demands from the shroffs, the Shikkai rupees, which they had accepted; not even for the purpose of enabling these shroffs who had deliberately failed to fulfil their duties, to escape some part of the loss which such action entailed.

17. We are only concerned to find out what was the loss to Government entailed by this neglect of duty on the part of their agents. The plaintiff-Government found themselves burdened with a large number of Shikkai rupees for which they had paid Rs. 76-14-9 British per 100 : though for coining purposes they were worth only Rs. 62-7-6. Their loss clearly was the difference between these two sums for each 100 Shikkai rupees. This is their loss because they can only do one of two things. They can coin the Shikkai rupees into Indian currency) in which case they are worth to Government no more than the cost of buying an equivalent amount of silver in the open market and that is Rs. 62-7-6 for each 100 Shikkai rupees. Or they can sell the Shikkai rupees in the open market, in which event they will fetch only Rs. 62-7-6 for each hundred. The rate of Rs. 62-7-6 that which prevailed some time shortly after the acceptance of Babashai rupees at the Treasuries and consequently the duties of the shroffs had come to an end. That rate varies; but no objection has been taken by either side to the rate of Rs. 62-7-6 if it be determined that the rate to be taken is a rate subsequent to the last acceptance of Babashai rupees at the Treasuries. The shroff-appellants however contend that the rate which ought to be taken is the price of Shikkai rupees at the time the breach of duty by the shroffs occurred. That rate would be Rs. 67 or perhaps something more and if that rate be taken, the loss payable by the shroffs is materially reduced. That is the rate at which the District Judge has estimated the loss. It seems to me he has proceeded on a wrong principle. The actual loss to Government is what I have stated-that to my mind is clear beyond question. The Government are entitled to be recouped that loss (ss. 73 and 211, Contract Act) unless it be shown that but for want of reasonable care or but for failure to perform some duty they owed the shroffs, they would have incurred a smaller loss. There was no failure on the part of Government in the performance of their duties to the shroffs. Was there any want of reasonable care? lean-not see that there was. What is it that the Government failed to do which they ought to have done? The only thing suggested is that they should have returned the Shikkai rupees to the shroffs. This point I have dealt with in so far as it is a matter of obligation. Is there anything in it regarded as a matter of reasonable care I think not. I do not think it was unreasonable to retain the Shikkai rupees and I am unable to conceive of any reason for which it can be said to be unreasonable. It is useless for me to deal further with the argument on this point addressed to us for I am unable to see anything in it whatever deserving of serious consideration.

18. The arguments in these appeals have occupied us for a long time and have covered a variety of points as to which discussion is unnecessary. The case is really very simple indeed. The shroffs deliberately and knowing they were wrong to do so accepted Shikkai rupees and thereby induced the Government to pay for them far more than they were worth, besides burdening Government with a commodity they had never undertaken to buy and did not want. The loss caused to Government is unmistakeable and easy to ascertain. Nevertheless the defendants have striven to minimise their liability, first by asserting entirely false defences, and then by the exercise of ingenuity in devising worthless legal arguments. Had they been well advised they would not have appealed.

19. One other point remains. In two of the cases the shroffs died during the pendency of the suit or appeal and it is urged that the right to sue did not survive. This contention is based on the maxim ' actio personalia moritur cum persona '. This maxim does not apply where as here the plaintiff has sustained a pecuniary loss arising out of a breach of obligation or contractual duty by the person sued. This seems to me to be clear from a study of the three English cases : Phillips v. Homfray (1833) 24 Ch. D. 439 and Batthyany v. Walford (1887) 36 Ch. D. 269 and United Collieries Ld v. Simpson [1909] A.C. 36. I would dismiss the appeals of the shroffs with costs throughout and allow the appeals of the Secretary of State and award the claims with costs throughout as proposed by my learned colleague.

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