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Sagar Mal Poddar Vs. Amir and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal Nos. 1637 and 1640 of 1953
Judge
Reported inAIR1966All103
ActsContract Act, 1872 - Sections 73
AppellantSagar Mal Poddar
RespondentAmir and anr.
Advocates:Kashi Nath Gupta, Adv.
DispositionAppeals dismissed
Excerpt:
contract - damages - section 73 of indian contract act, 1872 - recovery of damages by way of interest - some agreement, usage or custom must be there held, in the absence of agreement plaintiff could not recover damages. - - 1 eventually failed and it wits held that the amount of rs. i am, therefore, clearly of opinion that the lower appellate court was right in dismissing the suit. 6. these two appeals accordingly fail and are dismissed......he was not entitled to any interest by way of damages.5. it is doubtful if a plaintiff can legally recover damages by way of interest unless there is a stipulation between the parties agreeing to the payment of such interest, or there is some usage or custom under which such payment could be validly claimed. in bengal nagpur rly. co. ltd. v. ruttanji ramji, it was held that in order to attract the equitable jurisdiction of the court for payment of damages by way of interest there must be some usage or custom permitting the recovery of such damages. their lordships pointed out that section 73 of the contract act merely recognised the general rule that in the event of breach of a contract, the party who suffers by such breach is entitled to recover from the party breaking the contract,.....
Judgment:

D.P. Uniyal, J.

1. These are two connected appeals by the plaintiff and arise out of the same judgment.

2. The facts giving rise to the present suit are as follows. On 15-X-1944 an agreement was entered into between the plaintiff and defendant No. 2 by which the latter agreed to sell the house in dispute to the plaintiff. The plaintiff deposited a sum of Rs. 200/- with defendant No. 2 by way of earnest money. Despite the agreement aforesaid defendant No. 2 sold the house in question to defendant No. 1 on 13-12-1944. Thereupon the plaintiff instituted suit No. 26 of 1945 against both the defendants for specific performance of the contract. This suit was decreed on 25-2-1946. There was an appeal to the High Court and during the pendency of the appeal the defendant No. 1 was permitted to deposit a sum of Rs. 800/- by way of mesne profits of the housein dispute. The appeal of defendant No. 1 eventually failed and it wits held that the amount of Rs. 8,300/- deposited in court towards the sale price of the house shall be paid to defendant No. 1. On 27-3-1952 the sale deed was accordingly executed by both the defendants in favour of the plaintiff.

3. Then sometime in 1952 the present suit was instituted by the plaintiff for recovery of damages by way of interest against two defendants on the allegation that the money deposited by him on 7-3-1946 would have earned interest at the rate of 6% per annum, and inasmuch as he was deprived of that interest ho was entitled to recover the same from the defendants-respondents. The trial court decreed the suit for Rs. 777/- by way of damages. On appeal, the lower appellate court dismissed the suit. Hence this second appeal.

4. The learned counsel for the appellant vehemently contended that he was entitled to recover interest by way of damages at the rate of 6% per annum as from 7-3-1946, the date on which he deposited Rs. 8,300/- in court towards the sale price of the house. In this connection it must be pointed out that after the passing of the decree for specific performance in favour of the plaintiff the court directed him to deposit the money, which he did within the time allowed. The said deposit., therefore, was made in pursuance of the decree of the court. During the pendency of the appeal the money remained in the custody of the court. The execution of the decree by the plaintiff was stayed by the High Court on condition of the contesting defendant depositing Rs. 800/-. Thus the amount of Rs. 800/- really represented the damages which according to the court were likely to accrue to the plaintiff. Inasmuch as the deposit of Rs. 8,300/- had been made under the orders of the court, and in view of the fact that Rs. 800/- were considered sufficient by the High Court to cover any loss occasioned to the plaintiff by reason of his having been dispossessed of the house in question, I consider that he was not entitled to any interest by way of damages.

5. It is doubtful if a plaintiff can legally recover damages by way of interest unless there is a stipulation between the parties agreeing to the payment of such interest, or there is some usage or custom under which such payment could be validly claimed. In Bengal Nagpur Rly. Co. Ltd. v. Ruttanji Ramji, it was held that in order to attract the equitable jurisdiction of the court for payment of damages by way of interest there must be some usage or custom permitting the recovery of such damages. Their Lordships pointed out that Section 73 of the Contract Act merely recognised the general rule that in the event of breach of a contract, the party who suffers by such breach is entitled to recover from the party breaking the contract, compensation for any loss or damage thereby caused to him. In the present case there being no such agreement, the plaintiff could not recover any damages. I am, therefore, clearly of opinion that the lower appellate court was right in dismissing the suit.

6. These two appeals accordingly fail and are dismissed. In the circumstances, me partieswill bear their own costs of these appeals.


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