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Yarlagadda China Rattayya and anr. Vs. Donepudi Venkataramayya and ors. - Court Judgment

LegalCrystal Citation
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal Nos. 37 and 124 of 1952
Reported inAIR1959AP551
ActsContract Act, 1872 - Sections 29, 39 and 73; Limitation Act, 1908 - Schedule - Articles 48, 106 and 116; Easements Act, 1882 - Sections 62; Evidence Act, 1872 - Sections 101 to 104; Transfer of Property Act, 1882 - Sections 111
AppellantYarlagadda China Rattayya and anr.
RespondentDonepudi Venkataramayya and ors.
Appellant AdvocateM. Seshachalapati and ;D.V. Reddipantulu, Advs.
Respondent AdvocateN.V.B. Shankara Rao, ;K. Rajah Iyer, ;K. Suryanarayana, ;N. Nagabhushana Rao and T.V. Narasimhamurthy, Advs.
(i) contract - motive of defendant - sections 39 and 73 of contract act, 1872 - cancellation of contract by defendant - suit by plaintiff not to cancel contract before time period of licence - alleged that defendant cancelled contract with wrong intention - contract terminated lawfully - motive behind termination irrelevant - held, bad motive does not constitute any reason for claiming damages from defendant. (ii) damages - section 73 of contract act, 1872 - whether claim of plaintiff for damages for illegal termination of contract maintainable - loss occurs to plaintiff in usual course of breach of contract - claim for damages independent of cancellation of contract - plaintiff can enforce his right to damages. - all india services act, 1951.sections 8 & 11 & a.p. buildings (lease,.....chandra heddy, c.j.1. these two appeals arise out of o. s. no. 96 of 1949 on the file of the subordinate judge's court, rajahmundry. this action was raised by the plaintiff who is the 1st respondent in both the appeals for recovery of a sum of rs. 3,00,000/-against defendants 1 to 3 under three heads: (a) damages for an illegal cancellation of a lease d/20-3-1937; (b) value of timber illegally taken possession of by defendants 1 and 2 and made over to the 3rd defendant; and (c) value of some movables illegally taken over by the 1st and 2nd defendants and given to the 3rd defendant.under the first head, rs. 1,50,000/- is claimed; and under the 2nd and 3rd heads rs. 5,000/-and rs. 1,00,000/- respectively. the plaintiff obtained a lease marked as ex. a-1 on 30-3-1937 to fell timber in.....

Chandra Heddy, C.J.

1. These two appeals arise out of O. S. No. 96 of 1949 on the file of the Subordinate Judge's Court, Rajahmundry. This action was raised by the plaintiff who is the 1st respondent in both the appeals for recovery of a sum of Rs. 3,00,000/-against defendants 1 to 3 under three heads: (a) damages for an illegal cancellation of a lease d/20-3-1937; (b) value of timber illegally taken possession of by defendants 1 and 2 and made over to the 3rd defendant; and (c) value of some movables illegally taken over by the 1st and 2nd defendants and given to the 3rd defendant.

Under the first head, Rs. 1,50,000/- is claimed; and under the 2nd and 3rd heads Rs. 5,000/-and Rs. 1,00,000/- respectively. The plaintiff obtained a lease marked as Ex. A-1 on 30-3-1937 to fell timber in certain ranges of Jeypor forests from the 1st defendant the Maharajah of Jeypore. The 2nd defendant was the Assistant Dewan of the estate at that time. Having taken the lease to exploit the forests in the three ranges under Motu division, the plaintiff admitted into partnership with him the 6th defendant and one Dr. Sattaraju whose legal representatives are defendants 4 and 5. Dr. Sattiraju having died prior to the institution of the suit.

Dr. Sattiraju was to be the financing partner and was to get a three-annas share while the plaintiff and the 6th defendant had each a six and half annas share. Some time after this, disputes arose amongst the partners with the consequence that the forests could not be exploited and the business came to a stand-still. Then the matter was referred to the arbitration of the second defendant under Ex. B-46 D/- 11-7-1940. The award was passed on 9-7-1943-vide Ex. B-128. A few months later the compact evidenced by Ex. A-1 was terminated by the first defendant for the reasons contained in Ex. A-2d/20-1-1944. On that date, the lease was to run for a further period of four years.

Within a short time thereafter, i. e., on 24-1-1944, a lease of the same area was granted to the Motu industries, which had its registered office at Rajahmundry, the 3rd defendant. Though Ex. A-2 was received by the plaintiff in the same month he remained silent for over 2 1/2 years. On 11-3-1946, he caused a notice to be issued by a lawyer denying the right of the 1st defendant to rescind the contract and also claiming a sum of Rupees 4,00,000/- under the three heads mentioned above. It was also suggested in the notice that the reason for the delay in replying to the notice of the 1st defendant cancelling the contract was that he was sent for by the 1st and 2nd defendants and started negotiations about the compensation and damages that were payable to him for illegal rescission of the contract and the cost of felling wood etc.

2. The suit in which these appeals are filed was brought three years later, The 3rd defendant was impleaded because he was the lessee of the same forest for the subsequent period under the 1st defendant and also because the 1st and 2nd defendants are alleged to have transferred the trees that were felled by the plaintiff prior to the termination of the contract.

3. The answer of the defendants to the suit was that the plaintiff abandoned the contract, that, at any rate, it was validly cancelled, and therefore not legally entitled to any compensation and that there were no trees felled by the plaintiff which were in the forests at the time of the termination of the lease and which were illegally taken over by the defendants. Even if any such logs of wood were in the forest at the relevant date, the timber not removed within nine calendar months of the determination of the lease became the absolute property of the 1st defendant. As regards the second claim, it was pleaded all the things were sold to the 1st defendant for Rs. 9,500/- by the plaintiff and his partners through the 2nd defendant and the price paid in that behalf was adequate and proper and could not be questioned in that suit.

4. The trial Judge held that there was no surrender of the contract by the plaintilf, but it was validly cancelled by Ex. A-2 and consequently the plaintiff was not entitled to any damages or compensation in that regard. He found that there was conspiracy among defendants 1 to 3 to put an end to the contract in favour of the plaintiff and the 1st defendant leased out the forest which was the subject of Ex. A-1 to the 3rd defendant in which the 1st defendant had acquired an interest and that this has furnished a cause of action to the plaintiff.

On the first count, he awarded a sum of Rupees 50,000/- only against the 1st defendant by way of cost of the felled trees in the view that a large number of teak and non-teak trees felled by the plaintiff were left in the forest and the value of which could be estimated at about Rs. 50,000/-and which were removed by the 3rd defendant at the instance of the 1st and 2nd defendants. He decided that plaintiff was solely and exclusively entitled to the decree for the reason that the 6th defendant had not supported the plaintiff in the suit and that the father of defendants 4 and 5 had only a sub-contracts with the plaintiff and as such they had to work out their own rights in a separate proceeding. The claim in regard to the movables was disallowed on the finding that those assets were sold for a fair price and the plaintiff was not entitled to any excess amount on that account.

5. The 1st defendant has preferred an appeal against that portion of the decree and judgment which is against him. The plaintiff has filed a memorandum of cross-objections contending that the lease was not validly determined and that he was entitled to larger sums under the first and second heads. But, the relief on all the counts-was confined to Rs. 50,000/-.

6. The 6th defendant has brought another appeal, aggrieved by the decision of the that court disentitling him to a share in the decretal amount.

7. In the appeal filed by the 1st defendant, two points are urged before us;

(1) That the finding of the Judge that defendants 1 to 3 conspired to cancel the contract is opposed to facts and law; and

(2) that the conclusion of the Judge that the plaintiff was entitled to compensation in a sum of Rs. 50,000/- from, the 1st defendant. being the value of timber transferred to the 3rd defendant by defendants 1 and 2 is not borne out by the material on record.

We will first take up the point relating to conspiracy. The trial Judge thought that the 2nd defendant brought about a breach of contract with a view to benefit the 3rd defendant company in which he had financial interest and that these defendants acted in concert in terminating the contract and consequently the plaintiff had a cause of action against all or either of them. We find it difficult to reconcile this conclusion of the lower court with the finding that the contract was vaiidly terminated. If the view that the 1st defendant was entitled to cancel the contract is correct, the motive behind the action even if had, would not convert it into an illegal act. The motive is absolutely ir-lelevant.

8. The doctrine that an act even harmful does not become actionable, by reason of its being done with a bad motive and with intention of injuring another, provided that it was otherwise lawful, though not new, was fully expounded in the celebrated case of Alien v. Flood, 1898 AC 1 at p. 92. The principle js put thus in the speech of Lord Watson :

'Although the rule may be otherwise with regard to crimes, the law of England does not, according to my apprehension, take into account motive as constituting an dementi of civil wrong. Any invasion of civil rights of another person is it-Self a legal wrong carrying with it liability to repair its natural consequences in so far as they are injurious to the person whose right is infringed, whether the motive which prompted it is good, bad or indifferent. But the existence of a bad motive in the case of an act which is not in itself illegal will not convert that act into a civil wrong for which reparation is due. A wrongful act done knowingly and with a view to its injurious consequences may, in the sense of law, be malicious;but such malice derives its essential character from the circumstances that the act done constitutes a violation of the law.'

The same principle is also enunciated in Bradford Corporation v. Pickles, (1895) 1 Ch. D. 145. Therefore, the test is whether the defendant had a right to do the act complained of. however selfish or malicious his conduct may be.

9. Another rule to be remembered in this context is that i the defendant had done something lawful in promotion of his own interest and had not employed any unlawful means the plaintiff would have no cause of action, if any right of his has not been violated. See Moghul Steam Ship Co. v. McGregor, 1892 AC 25. This proposition is also contained in Crofter Hand Woven Hari Tweed Co. v. Veilch, 1942 AC 435. It was therein stated that if people acted in combination with each other for the purpose of promoting their legitimate interests, the combination would not be unlawful if the means employed were neither criminal nor tor-tious in themselves.

In the light of this proposition, the act of the defendants in terminating the contract would not be actionable if their purpose was to advance the interests of the 3rd defendant, as found by the trial court, if the cancellation was otherwise lawful. Thus, if is is a lawful act, the first defendant had right to do it however bad the motive might be If. on the other hand, it is an unlawful act he would have had no right to do it even if prompted by a good motive. Motives and intentions in such questions are not quite relevant.

10. Another well-recognised rule is that it is only a person that procures a breach of contract that commits a tort and no tortious liability could be fastened on a person who is alleged to have committed a breach of contract. The latter's liability will be ex contraclu and he does not incur any tortious liability. The only relevant question, therefore, would be whether the 1st defendant could vaiidly put an end to the contract. This aspect of the matlcr will be dealt with separately as it is the subject of cross-objections filed by the plaintiff.

11. That apart, there is nothing on record to suggest that the 1st defendant was guilty of any conspiracy. There is no oral or documentary evidence which can substantiate the plaintiff's case in this regard.

12. Most of the documents referred to in paragraph 49 of the judgment do not throw any light on the alleged conspiracy. They bear only on the interest evinced by the 2nd defendant and another K. V. Narain in the 3rd defendant. They do not advance the case of the plaintiff in this behalf. Moreover, the case of the plaintiff, according to the plaintiffs witnesses, is that the conspiracy was hatched in the house of one K. V. Narain at Rajahmundry.

It is admitted that the 1st defendant was not present then. It is not suggested that he was _even aware of the alleged conspiracy. The plaintiff is not personally aware of the conspiracy, but he was only told about it. He stated in the witness-box that he did not believe that the 1st defendant would 'commit such a sin.' In these circumstances^ the view of the Subordinate Judge that the plaintiff had a cause of action against the 1st defendant is erroneous and cannot stand. In fact, the counsel for the respondents had not even attempted to sustain the judgment on this point.

Furthermore, it can have a bearing only either on the issue relating to damages resulting from illegal cancellation of the contract or on the claim relating to the alleged transfer of wood said to have been left over by the plaintiff to 3rd defendant by defendants 1 and 2.

13. We will now turn to the claim under the head (a). The case of the plaintiff in this behalf is that large stock of timber measuring one lakh of cubic feet was left over in the recess of the forest and this was unauthorisedly transferred by defendants 1 and 2 to 3rd defendant after the termination of his contract. This timber is alleged to have been cut by him prior to the reference of disputes between him and his partners to the 2nd defendant as arbitrator in 1940.

This is denied by defendants 1 to 3. According to them, all timber belonging to the plaintiff was disposed of by the 2nd defendant, and the plaintiff and his partners had the benefit of the sale-proceeds. The trial court thought that the quantity of timber left in the forest and not brought to plaintiff's account was 1383, 2816 non-teak and 4757 poles and their approximate value) would be about Rs. 50,000/- at Re. 1 per cubic foot.

It also gives an alternative basis, for this namely, four years profits at the rate of Rs. 12,610-11-0 per year. The discussion in the judgment of the trial court on this topic discloses some confusion of thought. We are unable to appreciate the ra-tionale of the trial Judge in evaluating the compensation in terms of the net profits which would have been derived by the plaintiff if the contract was not cancelled. That would have a bearing only on damages if the termination is found to be invalid.

14. The judgment of the trial court is sought to be supported by the respondent with reference to the account books of the plaintiff (Exs. A-60, A-62, A-68, A-71, A-74, A-77, A-78, A-34-A-135, A-107, A-108, A-214 and B-35) and the oral evidence of plaintiff and P. W. 3. (After discussing in Paras 15-26 the oral and documentary evidence tendered by the plaintiff and holding that the evidence was not helpful to the plaintiff, the Judgment proceeded):

27. Now, let us examine the evidence of the defendants. The 2nd defendant as D. W. 8 had stated that he asked Govindaramayya to bring all available felled timber and to his knowledge timber was not left in the forest and even if anything was left it was stray pieces. This was repeated in cross-examination. The witness added that Govind-ramayya must have brought all available limber with a list and the partners would have handed over a list if any to Govindaramayya. Govinda-ramayya has not contradicted this witness. As already remarked P. W, 3, did not say that there were some more logs of wood in the forest after he transported 2700 and odd. There is also no reason why P. W. 3 who seems to be interested in the plaintiff should have left any timber unremov-ed from the forest, D. W. 8 does not accept the truth of the statement of the plaintiff that the latter requested him or the 1st defendant for permission to remove any timber from the forest or that he asked the 2nd defendant, in 1942 to get the balance of timber left over in the forest.

28. There is support for this in the deposition of D. W. 10 one of the partners of plaintiff who stated that P. W. 3 brought all timber and what little was left was set fire to. He further deposed that the plaintiff did not complain to the 2nd defendant at any time that he should arrange to bring other available timber to Rajahmundry.

29. Ex. B-128 the award passed by the 2nd defendant, inter alia recites that he requested the estate to give advance to carry on the timber busi-ness and to bring to Rajahmundry the timber which was felled, cut and kept ready at various places in the forest before the arbitration was sought, and brought to Rajahmundry and sold it in public auction, also has the same effect. If there was any truth in the story of the plaintiff, it does not stand to reason that he would have kept silent for nearly four years.

It is significant that in Ex. B-37 a reply to Ex. A-1 issued through a lawyer it was stated that the plaintiff 'now learns that you disposed of col-lusively half a lakh of cubic feet of teak wood and half a lakh of other varieties of wood.' He does not say how he came to know of this in the year 1946, or how he came to estimate the teak-wood and other varieties of wood at 50,000 cubic feet each because on his own showing he did not enter forest after the 2nd defendant took over the management as arbitrator.

30. The case of the plaintiff is also against broad probabilities. If really such large stocks of wood as stated by the plaintiff were left over in the forest after P. W. 3 sold the stocks of wood belonging to the plaintiff at Rajahmundry as instructed by the 2nd defendant, it is not possible to believe that the plaintiff would have kept quiet till Ex. B-37. At any rate, the other partners would not have remained inactive if timber to the tune of one lakh of cubic feet and worth nearly a lakh of rupees in which they had a share was allowed to rot up to 1944. It is unthinkable that he would not have protested against the action of the defendants in this behalf at least after the receipt of Ex. A-2. His conduct throughout is explicable only on the hypothesis of there being no timber worth the name belonging to him in the forest and not disposed of for his benefit.

31. The plaintiff is confronted with another difficulty in this respect. It is beyond controversy that timber was not cut subsequent to 1940. In fact, the complaint of the plaintiff was that the timber slocked by him at the time the arbitration proceedings started was taken over by defendants 1 and 2 and transferred to 3rd defendant (see Ex. B-37).

It means that at least four years had elapsed before the trees cut were taken possession of by the 3rd defendant. The evidence of D. W. 1, the estate clerk, is of some assistance to us in judging whether any timber felled by the plaintiff prior to 1940 would have been in a condition so as to be of any commercial value to the 3rd defendant and which could be made over to the 3rd defendant by the 1st and 2nd defendants with any advantage. In the words of D. W. 1,

'if teak is not removed within three years it) will be spoiled. They are liable for destruction on account of fire, rains and worms. If exposed to sun they would get cracked up and worms get into the interior of logs and spoil them. If poles and posts are kept beyond one year, they are liable to be spoiled. It is uneconomical to market these spoiled logs.'

There is no evidence to the contra, On the other hand, his opinion derives support from a passage in the 'Manual of the Timbers of the World' by Alexander Howard at page 317;

'By leaving the trees lying on the ground it will not automatically become seasoned, or indeed be any better fitted for use. If the bark remains on the tree, the latter as it cracks at the ends is liable to be stained by the bark, which by degrees falls off and exposes the bare wood to sun and wind and all variations of the weather. Insects attack it from all points, laying their eggs in the bark and in the splits and cracks which develop on the ends and sidess; when these occur they will not close again and will seriously impair the value of the wood, Fungus also naturally develops, the result being that the tree becomes only a large piece of decaying vegetation.'

This also militates against the story of the plaintiff that large quantity of timber belonging to him. was illegally taken away by the defendants. Thus the plaintiff has failed to make out that over and above what P. W. 3 sold there were some more logs left over in the recess.

32. Even on the assumption that there was some wood unsold after the relevant period there could be no decree against the 1st defendant on the material before us. Merely because some timber was left in the forest in ihe year 1942 it does not follow that the 1st defendant had transferred it to the 3rd defendant in 1944 so as to incur a liability. There is no evidence to substantiate the case of the plaintiff that the 1st defendant had illegally and unauthorisedly handed over the timber to the 3rd defendant.

Plaintiff admitted that he was not present when this timber is alleged to have been seized by the 1st defendant and given over to the 3rd defendant. Not a single witness spoke to the 1st defendant getting seisin of this. It was not even suggested to this defendant when he was in the witness-box, that he was guilty of any conversion. No attempt was made at least to bring home to that defendant knowledge about the existence of such timber in the forest.

33. It is to get over this difficulty that Mr. Rajah Aiyar pressed upon us the contention that if the plaintiff substantiates his case that large stock of timber was left over, it is not necessary to go further and show that the 1st defendant had brought about this transfer or that it took place with his connivance or at his instance or that he was aware of it. According to him, this was an item of damages flowing from the illegal termination because the plaintiff was not able to remove them.

Consequently, if the plaintiff was entitled to claim damages by reason of the illegal determination of the licence, compensation as representing the value of this timber would be included therein. We do not think this contention can prevail. This could not form part of tho damages that could be allowed for invalid cancellation as it has nothing to do with the removal of timber lying in the forest. Under the terms of Ex. A-1, the plaintiff was at liberty at any time within nine calendar months of the determination of the lease to enter upon the said forest or any part thereof to remove timber he had previously cut.

Not only that, he could remove his machinery, implements, utensils and articles. If the plaintiff could take away whatever materials including the timber he had previously cut within a particular time even after tho expiry of the contract period one does not appreciate his difficulty in removing the timber when the contract or the licence (whatever it might be called) was revoked illegally before the expiry of the period stipulated.

It is a different matter if he was prevented by any one from doing so. Nor was he under a legal disability to do it. Such being the case, we are unable to follow the argument that the damages for breach of contract would embrace compensation for articles of the plaintiff said to have been wrongfully appropriated by the defendants. We do not think that this alleged loss had resulted from the breach of contract.

It is only loss or damage that naturally arises in tho usual course from the breach that could really he !he subject of a claim for damages for the illegal termination of the contract or tho breach of tho covenants. The right of the plaintiff to remove timber previously cut by him is de hors the cancellation. That is an independent right which he can enforce if any obstruction was caused to him. A passage from Mayne on damages as quoted in Venkatarama Sastrulu v. Nama Venkanna, 37 Mad LJ 335; (AIR 1920 Mad 867), supports this view of ours:

'The loss or damages must arise naturally in tho usual course o things from the breach or it must be such as the parties know to be likely to result from the breach.'

For these reasons, we are unable to accept the proposition advanced by the counsel for the appellants. It follows there could be no decree against the 1st defendant in the absence of proof of himself autho. rising tho transfer of the timber to the 3rd defendant or at least it was with his knowledge that it was done. As we have already pointed out, there is no material even to suggest that he knew that some timber belonging to she plaintiff, was lying in the forest at the time of the revocation of the contract. On this ground also the plaintiffs claim must fail on this count.

34. There is another reason why the plaintiff could be non-suited and that is tho bar of limitation. The averments in the plaint are that the defendants look over all the assets of the plaintiff's business which continued to belong to him and which he was illegally prevented from getting back between the invalid cancellation of the contract and the granting of fresh lease to the 3rd defendant i. e., between February and April 1944. The suit was instituted on the 22nd of April 1949. There was thus an interval of a little over five years between the misdemeanours complained of and the laying of the action.

35. The question for consideration is whether this suit brought after five years is within time.

This deponds upon whether it is Article 48 or Article 116 of the Limitation Act that applies. Article 48 applies-to suits for the recovery of specific movable property lost or acquired by theft or dishonest misappropriation or conversion or for compensation for wrongfully taking or detaining the same. If the suit is governed by this Article, indisputably the action is barred. In this suit, the plaintiff is claiming compensation against the defendants ior wrongfully taking the timber belonging to him.

So, it is a case of wrongful sequestration or conversion of movable property. Prirna facie it falls within the operation of this Article. But the plaintiff wants to resort to Article 116 which prescribes a period of six years for a suit for compensation for the breach of contract in writing registered. There can be little difficulty in extending this Article because the document was registered if the action is related to tho breach of contract. But the point for determination is whether this is one of the resulte of the invalid cancellation. We have already answered if against the plaintiff.

It follows that the plaintiff cannot take umbrage -under Article 116 of the Limitation Act as it does not flow from the registered contract. It was a wrong committed independent of the contract. As the claim arose out of illegal detention, the appropriate Article is Article 48 and Article 116 is not relevant It follows that the suit is not within time even if there is any truth in the version of the plaintiff. In the result, A. S. No. 124 of 1952 is allowed with costs.

36. We shall next deal with the memo of cross-objections preferred by the plaintiff. The judgment of the trial court is assailed by him on two grounds. It is submitted on his behalf that tho cancellation was not valid both in tact and in law. According to Mr. Rajah Aiyer, the learned counsel for the appellant^ tho transaction in question was a licenco coupled with an interest in property and could therefore be revoked only under the conditions to be found in the Easements Act relating to licences.

It is maintained that it was not competent tor the 1st defendant to cancel the contract before the expiry of the period stipulated, namely, ten years unless it falls under one or other of tho clauses of Section 62 of the Easements Act, and even otherwise the causes assigned for putting; an end to the transaction are unreal and invented for that purpose. On the other hand, the stand taken by the 1st defendant is that the provision for cancellation of the contract before the period fixed could be enforced as it was not opposed to law and the appellant was well within his rights in determining it earlier.

37. Under Clause 7 of Ex. A-l. the 1st defendant reserved to himself the rights to cancel the contract at any time for adequate reasons. This term is attacked by the cross-objector as being too vague and indefinite to he enforced and as such void. It is argued by Mr. Rajah Aiyar that the expression 'for adequate reasons' is vague. It is only terms or conditions the defeasance of which would entail forfeiture that could be enforced.

38. In support of this proposition, reliance was placed by the learned counsel in Davis v. Davis, (1887) 36 Ch. D. 359, which laid down the princi-ple that covenants to retire so far as the law allows from the trade or business and not to treat, act or deal in any way _so as to either directly or indirectly affect the continuing partners, were too vague for the courts to enforce. This decision has really some bearing on the present enquiry. The statement of law in the judgment of Cotton L. J. which is apposite in this context is as follows:

If parties wish to ask the court to assist them in restraining those with whom they are dealing from breaking a limited covenant against carrying on a trade, they must in my opinion, themselves fix the limits within which, there is to be no carrying on of the trade, and then they do it at their peril. The law will determine whether the limit is a good one, or whether it is one which is so unreasonable that the covenant must fail.'

It is true that the covenants in the ease cited are not the same as in the present case. But, it is the rinciple embodied in the decision that is sought to applied to this.

39. Another instance of this principle is_ Bishop and Baxter Ltd. v. Anglo Eastern Trading and Industrial Co. Ltd., 1944 KB 12. In this case the sellers of goods accepted an order for the supply of woolen cardigans from intending buyers 'subject to the necessary licences etc., being in Order and subject to Government restrictions as to sales and war clauses'. The words 'subject to war clauses' did not refer to any specific war clauses and it took many forms. It was held that as there was no evidence that the parties had any particular form of clause in mind, there was no consensus ad idem and therefore no completed contract.

40. In Sanjivarao's Indian Contract Act (4th edition) the following passage occurred at page 334;

'But a promise to continue business so long as it is profitable or to continue an arrangement so long as one patty shall 'handle It satisfactorily to the other' has been held too indefinite for enforcement. And a promise to perform as long as the promise remains in a certain business has also been regarded as too indefinite. So, a promise to renew the plaintiff's notes 'until such time as the improvement in the business situation should enable him to proceed in business without such assistance' is merely a hopeful encouragement sounding only in prophesy.

41. The learned commentator has cited in support of these statements some English authorities. The doctrine of these cases seems to be in accordance with, (1887) 36 Ch. D. 359. The principle seems to be that a defeasance clause should be express and precise in definite terms and should not be vague and indefinite, because it operates in defeasance of the grant. If it is precise, the tenant will know when he incurs forfeiture or when the defeasance takes effect and he will guard against it. We feel that this condition to revoke the contract for adequate reasons is vague, and indefinite and hence unenforceable. One party might regard a particular covenant as important while another may treat it as a very unimportant one.

42. It is argued by Mr. Rajah lyer that the condition on the performance or non-performance of which the licence stands revoked should be a specified one in order that a licence may stand revoked falling under Section 62 of the Easements Act.

42a. Section 62 so far as relevant runs as follows:

'A. license is deemed to be revoked:

(a) x x x x x(b) x x x x x(c) Where it has been granted for a limited period, or acquired on condition that it shall become void on the performance or non-performance of a specified act, and the period expires, Or the condition is fulfilled; xxxxx' Under this clause the licence would become void if there is a breach of a particular condition. In other words, the condition or conditions the breach of which involves the forfeiture should be specifically stated.

43. We are inclined to agree with Mr. Rajah Iyer as regards the nature of the transaction in question. It looks to us that it is not a mere licence but one coupled with a grant which has created an interest in immovable property. A right to cut trees and remove them is a licence connected with an interest in immovable property. See Seni Chettiar v. Santhanathan Chettiar, ILR 20 Mad 58 (FB) and Mammikkutti v. Puzhakkal Edom, ILR 29 Mad 353.

44. In the present case, the acts for the performance or non-performance of which the licence stands revoked are not set out. As already mentioned the grantor had reserved to himself an unlimited power to terminate it for any reasons which he considered to be sufficient or adequate. Such a power does not seem to be in conformity with Section 62(c) of the Easements Act. That such clauses should be construed strictly appears from Raman Menon v. Malabar Forest and Rubber Co., ILR 58, Mad 378: (AIR 1935 Mad 163) which affairs the principle that a clause for forfeiture should be construed as against a person who was then trying to take advantage of it and effect should be given to it so far as it is rendered absolutely necessary to do so by the wording of the clause. To a like effect is the judgment of the Bench of the Patna High Court in Kuchwar Lime and Stone Co, Ltd. v. Secy, of State, AIR 1936 Pat 372, which rules that a forfeiture clause should be literally and strictly construed and should be taken most strongly against the lessor inasmuch as he could always provide as stringent conditions as he liked. We will now refer to Chitty on Contract (Vol. I page 163, 21st edition):

'Lord Selborne has since declared in the House of Lords in Neil v. Devonshire (Duke of)-(1882) 8 A. C. 135 at 149 -- that 'it is well settled that the words of a deed, executed for a valuable consideration ought to be construed, as far as they properly may in favour of the grantee'; and it is submitted that the rule still exists. So, in the case of a guarantee, if the party who gives it uses ambiguous language, such ambiguity will be taken most strongly against himself.'

45. The principle to be deduced in that condition of defeasance should be expressed in clear and in unequivocal terms, in order to be operative. If they are vague, they cannot be given effect to as being void for uncertainty. They should be construed strictly. Courts always lean in favour of strict construction in regard to such clauses as they have the effect of defeating the very grant.

46. In this case, the relevant clause vests in the grantor unlimited and unqualified power to rescind the contract. It is not even referable to the covenants in the contract. An argument was pressed upon us by the counsel for the 1st defendant that there is no room for the invocation of the above-stated doctrine as the grant in favour of the plaintiff was only subject to the right of the 1st defendant to terminate it at any time he liked. Therefore, the provision relating to the termination of the contract does not derogate from the grant. The whole document should be read as a whole and so as to harmonise all the parts thereof. As far as possible the various clauses of the deed should be so read as to reconcile the different clauses in Ex. A-1, elaborated the learned counsel.

47. We are not disposed to accede to this contention. It is true that a document should be read as a whole and as far as practicable should not be construed so as to leave a part of it without any meaning or not to give any effect thereto. So construing Ex. 1-A, it will not be correct to describe the grant evidenced by the document a conditional one i. e.. subject to the pleasure of the grantor as suggested by Mr. Seshachalapathi. The power in question does constitute a defeasance of the grant. The grantee has obtained the right to exploit the forest for a period of ten years for valuable consideration as seen from the main terms of the document. This right is sought to be taken away by this provision. In this context, we cannot do better than refer to a passage in Peacock's Easements in British India (p. 671 2nd edition) which is an extract from the judgment in Wood v. Leadbitter, (1845) 13 M and W 838, which had considered the power of revocation.

'A mere licence is revocable, but that called a licence is often something more than a licence. It often comprises or is connected with a grant, and there the party who has given it cannot in general revoke it so as to defeat his grant to which it was incident.'

For these reasons, we feel that the 1st defendant was not legally invested with the general power to revoke the grant before the len years period fixed therein.

48. We will now proceed to scrutinise the reasons assigned by the appellant for the cancellation of the contract on the basis of the validity of Clause 7 of the document Before we do it, we will have to dispose of the point raised by the appellant that the cross-objector had surrendered the grant. We are invited to draw the inference that this contract was abandoned or surrendered immediately before the arbitration reference from two or three factors, namely (1) that the forest was not exploited from that time upto the issue of Ex. A-2; and (2) that the security deposit of Rs. 1,000/- made by the plaintiff at the time he entered into contract was added to the assets of the partnership which were divisible amongst the partners as seen from Ex. A-128.

The award was passed by the 2nd defendant on 9-7-1943. Emphasis is laid by the learned counsel on the fact that this award was accepted by the plaintiff and the correctness of the figures mentioned therein was not challenged by him as is clear from Ex. B-130. The statements of the 4th defendant in the witness-box as D. W. 10, namely that they had no idea of working the contract is also called in aid. We are unable to give effect to this argument. The documents relied on for the appellant do not very much advance his case on this issue. The fact that the contract could not be worked during the period the arbitration was pending is not in any way indicative of its abandonment or the surrender. During the time, the disputes amongst the partners were not settled and they were awaiting the decision of the arbitrator.

Further, the mere non-exploitation of forest does not amount to abandonment of surrender. Nor is Ex. A-128 capable of being so construed. It only shows that the security deposit was taken into account in calculating the assets of the partnership. This cannot lead to the inference suggested for the plaintiff. On the other hand, this was not added in arriving at the amounts payable to each of the partners.

This has been excluded from those figures. If the intention of the parlies was to return this amount and was in fact returned, this would have been included in the sums to be divided amongst all the partners. The material on record does not warrant any conclusion that either the plaintiff had abandoned the contract or the 1st defendant so treated it. The rovalty was collected from the plaintiff upto July 1941 which far from probablising the 1st defendant's case is destructive of the theory of abandonment in 1940.

49. Ex. B-252 an entry debiting the plaintiff with a sum of Rs. 6000/- for the year 1942-43 is also indicative of the existence of the contract at least at that period. D. W. 1 who made this entry sought to explain this away by attributing it to a mistake. This explanation did not commend itself to the trial court and we concur in its opinion with regard to the matter. We feel that that entry represents the real state of affairs. Ex. A-26 also cannot lend any countenance to any such notion. On the other hand, to a large extent it renders improbable any case of abandonment.

50. Most of the grounds put forward in support of the termination proceeded on the assumption that the contract was valid upto that date. It is alleged there that there were some disputes between the partners which were referred to the arbitration of the Diwan and that after a protracted inquiry an award was given on the 9th July 1943 and owing to that delay the contract was not worked till the 20th of February 1944 and thereby the estate was put to irreparable financial loss. This ground would be absolutely unmeaning if there was abandonment of the contract in the year 1940 itself. This is explicable only on the hypothesis that the contract was in force. The other clauses set out also give an indication that the contract between the parties still subsisted.

It is also significant that it is the notice that cancelled the agreement dated 28th March 1937 and there is not a single whisper in the whole document that any lime anterior to this, it was abandoned or that Ex. A-2 was a mere formality, the contract having already been surrendered or abandoned. We are disposed to think that this story of abandonment is a mere after-thought, The evidence of D. W. 10 also does not help the 1st defendant. All that he stated was that they had no idea of working the contract. He does not go the whole length of supporting the 1st defendant.

51. Comment is made by the learned counsel for the appellants on the silence of the cross-objector for a period of nearly two years after the receipt of Ex. A-2. According to him, this is confirmatory of abandonment. We are unable to accept this view of the inaction of the plainfiff. If there is no substance in the plea of abandonment in the year 1940 or at any rate prior to 1944, the lapse of nearly two years between the two dates cannot be said to be consistent only with the version of the appellant. Abandonment must be proved affirmatively by one who sets it up by unimpeachable evidence and in this case the appellant has failed to adduce any such evidence. On the contrary, the surrounding circumstances lend colour to the opposite theory.

52. In support of his proposition, Mr. Seshachalapathi cited to us four decisions Muneeruddeen v. Mohammed Ali, 6 Suth WR 67, Hanuman Prasad Singh v. Deo Charan Singh, 7 Cal L. J. 309 and Bhaga v. Girwar, : AIR1953All439 and Subbarayudu v. Ramaswanty, 50 Mad LJ 535: (AIR 1926 Mad 661). These cases do not lay down any rule as to what constitutes abandonment or surrender. In 6 Suth WR 67, a cultivating tenant who held a jote of the land in dispute had run away from the land and had ceased to occupy it. The landlord re-granted it to another. It was in these circumstances held that the tenant relinquished it when he ran away from the land without cultivating it and without paying any rent. Down the same line goes 7 Cal LJ 309. In that case the tenant transferred the land to another and did not pay the rent. The landlord then took possession of the same. It was decided that the latter was entitled to do it as there was an implied surrender of the land.

53. : AIR1953All439 , is another instance of actual abandonment. It was ruled that the licence stood revoked within the meaning of Clause (f) of Section 62 of the Easements Act when the ryots to whom the land was granted for building houses left the village which meant that the purpose for which it was granted was abandoned. Nor has 50 Mad LJ 535: (AIR 1926 Mad 661), any bearing on this enquiry. The question there was whether kudivaram interest could be acquired in the holding by the landholder even by surrender and it was answered in the affirmative. These rulings do not furnish any analogy to the present case. The contention of the appellant in this behalf is therefore rejected. (Their Lordships then proceeded in paras 54-66 to scrutinise the reasons assigned by the appellant for the cancellation of the contract and concluded):

In these circumstances, the contention of the plaintiff that these reasons were dug out for the purpose of cancelling the contract is not without force. In our opinion they are unstable and do not afford any justification for the action of the 1st defendant in this regard.

67. Finding that it was futile to depend upon these reasons to sustain the action of the 1st defendant, his counsel fell back upon the argument that it is not open to a court to canvass the adequacy of the reasons. Support is sought for this in Wood v. Prestwich, (1911) 104 LT 388 and Wright v. Marquis of Zetland, 1908-1 KB 63. This decision dealt with the power of a Head-master to expel a boy for adequate cause to be judged by him. In an action by the parent for damages for breach of contract, judgment was entered for the defendant Head-master, as under the scheme made under the Endowed Schools Act 1869, with regard to an endowed school there was a provision which enabled a Head-master to have a power of expelling a boy for adequate cause to be judged by him.

68. The Other case considered the authority of a headmaster to dismiss an Assistant in pursuance of a scheme made under the Endowed Schools Act. Under that scheme, the Headmaster was invested with the sole power of appointing and dismissing all Assistant Masters in the school at pleasure. In an action by an Assistant Master in the school against the governors of the school for his wrongful dismissal by the Headmaster without notice, the right of the headmaster was upheld to do so.

69. These two pronouncements far from lending any countenance to the theory that a court is precluded from going into the_ grounds assigned for it negative it The position is slated by Justice Avory in (1911) 104 LT 388 thus;

'.....the only limitation which I believe courts of law have ever put on such words or similar words is that there must be a bona fide exercise of the judgment or discretion of the person in whom such power is vested.'

To a like effect is the statement of law contained in the following passage in 1908-1 KB 63.

'I further think that there may be cases in which, the governors or the headmaster, as the case may be, having thought fit to assign a cause for the dismissal of a master, although under no obligation to do so, and that cause, when brough before the court, appearing to be an insufficient cause, the court may, as in a case where the dismissal is corrupt, set aside the dismissal.'

On this authority and on general principle of law, there can be litlle doubt that it is open to canvass the grounds urged in justification of a cancellation of a contract in a court of law. It is quite competent for a court to review bona fides, go into the motives underlying such an action and if the court is satisfied that they are inadequate or insufficient, it will certainly set them aside. Whether party is obliged to assign any reasons or not when once ho chooses to do so, they are liable to be scrutinised by a court of law. We would also say that these reasons must be looked for within the contract. It follows that the reasons assigned by the 1st defendant in order to terminate the contract before the period fixed cannot stand any scrutiny some of them being fanciful and that the ter-mination was illegal and invalid.

70. This leads us to the question whether the plaintiff has sustained any damage and if so in what measure. On this aspect of the matter, we do not derive any help from the judgment of the trial court as this matter was not gone into in the view that the cancellation of the contract was valid and that the plaintiff was not entitled to any damages. We have therefore to call for a finding from the court below on this issue on the evidence already on record. Time for submission of the finding within six weeks of the reopening of the lower court after summer recess. Objections if any, will be filed within two weeks thereafter.

71. The plaintiff has not pressed his appeal under head (b) in paragraph 21 of the plaint, nor the appeal No. 295/56 against the decree and judgment in O. S. 98/48. They are therefore dismissed. No order as to costs.

72. There remains the appeal No. 37/1922 preferred by the 6th defendant. The subordinate Judge took the view that the 6th defendant was not entitled to any relief and that the plaintiff alone had a cause of action for the reason that he had not supported the plaintiff. This reasoning of the trial court is unsound and Mr. Rajah Aiyar for the respondents frankly conceded that it was unsustainable.

Consequently, it must be held that the 6th defendant has also a right to participate in the fruits of a decree which the plaintiff might get as undoubtedly it is one of the partnership assets. This is only subject to general accounting. Mr. Rajah Aiyer had no objection to allow an account-taking subject to the plea of limitation. Mr. Raje-swararao docs not take exception to the qualification that the right of his client is subject to the plea of limitation. In these circumstances, the trial court is required to submit a finding on this issue also after deciding the point of limitation. The finding will be submitted within six weeks from the reopening of the court. Objections, if any, two weeks thereafter.

73. We arc told that a sum of Rs. 7,500/- is in court having been deposited by the arbitrator. This sum appears to have been withdrawn by the plaintiff after furnishing security for half the amount. We think till the rights of the parties (plaintiff and 6th defendant) are decided, the equitable course will be to direct the plaintiff (as a tentative arrangement) to redeposit a sum of Rupees 2500/- within one month from today which can be drawn out by the 6th defendant on furnishing security to be brought back by him whenever a necessity arises.

These appeals and the memorandum of cross-objections filed by the 1st respondent in Appeal No. 124 of 1952 coming on for final hearing after the return of the finding of the lower court, upon the issues referred by the High Court for trial, the court delivered the following judgment,

Chandra Reddy, C.J.

74. As directed by us in our judgment dated 22-3-1957, the Subordinate Judge has submitted findings. He estimated the damages sustained by the plaintiff i.e., the first respondent in Appeal No. 124 of 1952 at Es. 30,000/-. His finding in Appeal No. 37 of 1952 is that the claim of the sixth defendant, i.e. the appellant therein, was barred by Article 106 of the Limitation Act, The plaintiff and the first defendant in the suit have preferred objections to the findings with the result that the matter in controversy is re-opened in its entirety. It may be mentioned here that although originally the plaintiff claimed damages in a sum of about Rs. 1,50,000/-in the appeal, he confined it to Rs. 50,000/-.

75. The facts culminating in this litigation have been set out fully in our judgment calling for findings and it is therefore unnecessary to recount them here.

76. We will first take up Appeal No. 124 of 1952. The question that calls for decision is as to the quantum of damages that are payable to the plaintiff. It is urged by the learned Advocate General on behalf of the appellant that no damages had arisen out of the contract, as the plaintiff would not have been in a position to work the forest even if the lease was not cancelled, for the reason that he was not in a position to exploit it having had no financial resources. It is because he could not command any resources to work out the lease that he took in one Dr. Sathiraju as a financing partner who had advanced only Rs. 21,000/- and when he ceased to advance any more money there arose difficulties in working the forest. Reliance is placed for this purpose on Ex. B-49, a petition submitted by the plaintiff to the second defendant. It was recited therein as follows : --

'From the beginning, there was no proper supply of funds for this business. More so, this year,Sri Chitturi Sattiraju Garu failed to supply anyfunds and thereby caused much loss to the business.In these circumstances, when you came on campto Motu in the month of May, I represented to youabout the difficulties of the said business. I broughtsome amounts from outsiders also and carried onthe business. Xx xx xx'

77. Lower down, it is said: -- 'Further, the royalties payable to the Samsthanam have not been paid till now.' He added in that letter that Sathiraju made it impossible for him to carry on the business and that he did not make advances to cart-men, salaried people and others. Some of the statements in Rs. B-128, the award made by the second defendant are also called in aid. It was stated therein :

'This act of mine, i.e., the carrying on of the timber business for another season was never contemplated at the time of arbitration nor had the firm tho money to carry on the same. With a view to save the partners, I requested the Estate to give certain advances to carry on the timber business. I did so With the result I could bring to Raja-mundry the above-said timber which was sold in public auction'.

But we do not think that these are conclusive of the matter, The material on record does not war-rant the inference that the plaintiff was so financially crippled that it would have been impossible for him to carry on the business till the expiry of the lease. That he possessed sufficient property which would have enabled him to raise credit in the market is apparent from Ex. B-42. The schedule of properties annexed to Ex. B-42 establishes that he had 26 acres of land and a vacant site with a tiled house thereon, which the plaintiff valued at about Rs. 1,00,000/-.

In addition to these, he acquired subsequently about fifteen acres of land and he had also purchased some buses. It also appears that even before Dr. Sathiraju had joined the partnership, he could work the forest for some time and had thirty thousand cubic feet of timber cut. It is also evident from the documents relied on by the appellant that on several occasions when Dr. Sathiraju failed to keep to the terms of the agreement, the plaintiff himself had to advance monies to continue the business.

These various factors clearly indicate that he could easily obtain loans on the security of the properties which he possessed. If he was utterly incapable of working the forest, he would have surely surrendered it even during the life of the lease. It may be that he might not have invested large sums of money on his own risk to work the contract for the benefit of the partnership. But he would not have abandoned the work completely, especially when the prices of timber were going up. We do not think that the death of Sathiraiu had completely incapacitated him to exploit the forest.

78. It was nest urged for the appellant that the plaintiff had not called in evidence to show what profits he would have made during the un-expired period of the lease or what expenses he would have incurred and there being no data, a court cannot fix any damages and consequently only nominal damages could be awarded to the plaintiff. We do not think we can subscribe to the theory propounded by the learned Advocate-General. It is true that the plaintiff in this case had not given the best evidence either on the quantity of timber he would have felled or the amount to be expended for cutting the trees and transporting them to the market.

Even with regard to the expenses for the prior period, he had furnished only, some shadowy evidence. Consequently, there is some difficulty in arriving at a definite conclusion with regard to the estimate of profits. But the difficulty in assessing the damages should not be a ground for refusing altogether damages or to award only nominal damages. When the plaintiff is unable to give any evidence of loss, generally, nominal damages are allowed. But, it, by no means, follows that In every such case only nominal damages are recoverable,

A distinction must be drawn between cases of absence of evidence which makes ft impossible to fix damages and eases which present difficulty in assessing damages because of the nature of the damage proved, and the difficulty fn assessing It is not a ground for refusing substantial damages. Courts have to try to get at that sum of money which would put an injured party in the same position as that in which he would have been if he had not sustained the wrong which entitles him to claim damages. A Judge has got to assess damages as best as he could on the material available.

He cannot decline to estimate them merely because the plaintiff could not adduce the best evidence, but has to decide what the proper method is having regard to alt the circumstances. In cases where evidence could be adduced as to the quantum of damages, it should be established with some degree of certainty. But, as pointed out by Mooker-jee, J. who spoke for the court in Fredrick Thomas Kingsley v. The Secy, of State, AIR 1923 Cal 49.

'.....this does not mean that absolute certainty is required nor, in all cases, is there a necessity for direct evidence as to the amount. Damages are not uncertain for the reason that the loss sustained is incapable of proof with the certainty of mathematical demonstration or is to some extent contingent and incapable of precise measure-ment.'

So, what is to be made out is that loss of profits was likely to result from the breach of contract and was a probable and direct result thereof. They should not be speculative profits such as might be guessed to be the result of the breach. Plaintif would only he entitled to such damages as may be fairly and reasonably considered as arising naturally i.e. in accordance with the usual course of things. The damages claimed should be the direct and natural consequences of the injury. If damages do not flow directly from lie breach they would be regarded as remote and would be inadmissible. Here what the plaintiff has to establish is that the rescission was the real or the effective cause of the injury or loss sustained. In this context, we might refer to a passage in Wolcott v Mount, ((1878) 36 NIL 262), extracted by Mqokerjee J. in the case cited. The passage runs thus : --

'It must not be supposed that mere speculative profits such as might be conjectured to have been the probable results of an adventure which was defeated by the breach of the contract sued On the gains from which ate entirely conjectural, with respect to which no means exist of ascertaining even approximately, the probable results, can under any circumstances, be brought within the range of damages recoverable. The cardinal principle in relation to the damages to be compensated for on the breach of a contract, that the plaintiff must establish the quantum of his loss by evidence from which the Jury will be able to estimate the extent of his injury, will exclude all such elements of injury as are incapable of being ascertained by the usual rules of evidence to a reasonable degree of certainty.'

Therefore, a court has to make an intelligible and probable estimate which the nature of a case will permit from the facts and circumstances of a particular case.

79. It was next urged that the very fact that in the first instance the plaintiff claimed a huge sum of Rs. 1,50,000/- under the head of damages and later on reduced it to Rs. 50,000/- which he is not able to make out is proof positive of the fact that no damages were sustained by the plaintiff. But, exaggeration of the claim does not furnish a ground to dismiss it in its entirety.

80. Now, we have to see whether there is any material on which a reasonable and intelligible estimate could be made.

(After discussing the material in paras 80-82 the judgment proceeded:)

Having regard to all these circumstances and in the absence of any definite data as to what the measure of damages would be in a case like this we can only assess the damages approximately. In these circumstances, we fix them at Rs. 17,500/-.

83. It is argued for the appellant by the learned Advocate General that the royalty due and payable to the estate should be deducted out of this sum. According to him, the royalty was collected upto July, 1941. Reliance is also placed on the following question and answer in his cross-examination :

'Q. Have you at any time after 10-7-1943 offered minimum royalty?

A. If die forest was handed over to me, I said I would pay royalty. I offered to pay royalty to defendants 1 and 2.'

We do not think that we would be justified in going into the question whether any royalty remained unpaid. For one thing, there is no reference to the arrears of royalty made in the written statement. There is no material on record nor is there any issue relating to this matter. Even when the finding was called for, no claim seems to have been put forward in this behalf nor any argument advanced. At the close of the arguments the advo-cate appearing for the appellant in the trial court filed an affidavit to the effect that he had advanced an argument in this regard, but the trial court had not dealt with it. We are invited by the counsel for the plaintiff not to attach much weight to this affidavit being a belated one and that secondly he has no opportunity of getting an affidavit from the counsel that appeared for the plaintiff in the lower court having regard to the stage at which it is filed. It is also significant that no ground is taken in the memorandum of objections that although this point was raised the trial court had not discussed it. Therefore, we do not think we will be justified in acting on this affidavit. We are also not inclined to send back the matter once again to the lower court having regard to the fact that this matter has been pending for nearly a decade and also the Subordinate Judge who submitted the finding is no longer there. For these reasons, we fix the damages at Rs. 17,500/- with interest at 6 per cent per annum for the plaintiff in modification of the finding of the trial court. The trial court had fixed interest only 5 per cent. We think normally interest at 6 per cent is awarded and the learned Advocate General fairly conceded that the proper rate is 6 per cent per annum.

84. The plaintiff is also entitled to a refund of the deposit ot Rs. 1,000/- which he made at the time the second contract was entered into. In re-card to the sum of Rs. 7500/- referred to in the last paragraph of our judgment on 22-3-1957 since this represents the assets of the partnership which were set apart for discharging alleged debts but which are not discharged, the 6th defendant is also entitled to participate in it in proportion to his share. So, he is entitled to withdraw this sum which, we believe, is in deposit.

85. The parties will pay and receive proportionate costs throughout.

86. We will turn our attention to the appeal of the 6th defendant. The main question that falls to be determined is whether the claim of the 6th defendant was barred by limitation. This in its turn depends upon Article 106 of the Limitation Act. Article 106 provides a period of three years for the suit For an account and a share of the profits of a dissolved partnership, the starting point being the date of dissolution. The trial court accepted the contention of the plaintiff that a claim to a share in the profits of the decree in his favour pertains to a share in partnership assets of the firm which was dissolved and therefore comes within the purview of Article 106. It was of opinion that its view was substantiated by the decision in Gopala Chetty v. Viiavarauhavachariar. ILR 45 Mad 378. : (AIR 1922 PC 115). We do not think that this pronouncement of the Privy Council is in any way injurious to the 6th defendant.

It is no doubt true it is stated there that if no accounts of a dissolved partnership had been taken and 'there is no contest that the partners have squared up 'then the remedy open to any of the partners was only to have the accounts of the partnership taken when an asset belonging to the partnership had been realised. But it is also equally, clear from that judgment that if at the time of settlement of accounts, an asset was not taken into consideration such an asset ought to be divided between the partners when it falls in.

Here, it is nobody's case that when the accounts were taken the decree to be passed in the present litigation was in the contemplation of the parties and it could not be in the nature of things because the lease was determined long after the talcing of accounts. So, ILR 45 Mad 378 : (AIR 1922 PC 115), does not in any way put the 6th defendant out of court in regard to his claim. It was faintly argued for the plaintiff that in view of the fact that the award passed by the 2nd defen-dant was set aside ultimately by the High Court of Orissa the accounts must be deemed not to have been settled. Firstly, this point was not taken at any time before; secondly, the attitude adopted by the plaintiff till to-day is inconsistent with such a plea.

Throughout the relevant period, he was pre-pared to abide by the award as could be seen from Ex. B-142, On several occasions, he requested that a decree should be passed in terms of the award Having induced the other party to believe that ac counts have been settled so far as they are concerned and made him act on that basis it is not oper to the plaintiff to turn round and say that there was no settlement of accounts, In these circumstances it is too late for him to resort to a change of front and contend that there has been no settlement of accounts so as to bring the case within the scope of ILR 45 Mad 378 : (AIR 1922 PC 115).

87. That apart, we fail to see how Article 106 would have any bearing on the present inquiry, This is not a case where any asset had already fallen in or where one of the parties had collected it in which the other parties are claiming their due share. Here a new asset belonging to the partnership had come into existence. The sole controversy is whether one of the partners alone is entitled to collect it or all of them should do it.

In such a case, there is no question of the claim of any of the partners being barred by limitation. For these reasons, the objection on the basis of Article 106 of the Limitation Act raised on behalf of the appellant is untenable and cannot be given effect to. It follows that the view of the trial court is unsound and cannot prevail. We, therefore, hold that the 6th defendant is also entitled to Rs. 0-6-6 share in the decree obtained on behalf of the partnership.

But, this will only be subject to the accounting in regard to the expenses incurred by the plaintiff in this litigation. The costs awarded to the plaintiff in the suit by the trial court are Rs. 8768-11-0. These are only cerified costs allowable under the Civil Rules of Practice, but that does not mean that the plaintiff cannot call upon the defendant to bear his share of other expenditure properly incurred by him in regard to this litigation.

Taxed costs would not repay him for the full amount he has expended for the action. Since we have not any data before us to ascertain the exact expenditure in this behalf, the only course open to us is to send it back to the trial court again to go into it. But in order to obviate further expendi-ture and time, we were invited to fix a reasonable amount by way of costs that must have been incurred by the plaintiff. Taking into account all the circumstances, we think the reasonable figure would be about Rs. 15,000/-.

The 6th defendant will get his share of the decree subject to his paying Rs. 0-6-6 in the costs of the litigation which we have fixed at Rs. 15,000/-. In this court, parties will bear their own costs.

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