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Gopal Das Agarwala Vs. L. Hari Kishan Das - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1936All514; 163Ind.Cas.919
AppellantGopal Das Agarwala
RespondentL. Hari Kishan Das
Excerpt:
- - 1929 mad 347. to my mind the facts of that case are clearly distinguishable. it may well be that the plaintiff may not buy the goods, which he had contracted to buy from the defendant, elsewhere from an available market, but in that case he would not be entitled to damages on the basis worked out by the court below on the first occasion; that is the figure at which i have arrived at approximately on the entire evidence, and after all in a matter like this approximation can be the only guide......for the goods at the date of breach, the damages must be based on the difference between the market price and the contract price: a contract of re-sale becomes immaterial, because if there was a market, the law presumes that the buyer can minimise his damage by procuring substituted goods in the market, so that he is thus in the same position, apart from the difference in price, as if the seller had not made default. hence the difference of price, if the market price exceeds the contract price, is the sole damage in general recoverable. this is exactly what was said in different words by this court on the former occasion. it was observed:the plaintiff however must have been in a position to purchase the flour elsewhere and to sell it at the rate of rs. 7-3 0, and possibly to make a.....
Judgment:
ORDER

Bajpai, J.

1. This is an application in revision by the plaintiff whose suit has been dismissed by the Court below. The facts may be briefly stated. Sometime towards the end of January 1934 the plaintiff and the defendant entered into a contract by which the latter was to supply 905 bags of Saharanpur chapati atah to the plaintiff in the month of February 1934 at the rate of Rs. 6-3 per bag. The defendant could supply only 151 bags, and thus there was a deficit in the supply of 754 bags. The plaintiff, therefore, brought a suit in the Small Cause-Court at Allahabad for the recovery of damages arising on the breach of the contract made by the defendant. The defence was that the Small Cause Court at Allahabad had no jurisdiction; that there was no breach of contract by the defendant and that the amount of damages was excessive. This case had had a chequered career, in the sense that the Small Cause Court at Allahabad tried this suit on 26th November 1934 and came to the conclusion that the plaintiff was entitled to damages at the rate of Re. 1 on 754 bags. He overruled the preliminary objection that the Allahabad Courts had no jurisdiction. There was a revision to this Court by the defendant and a learned Judge of this Court remanded the case after having corrected the Court below on a question of law. What the Court below had done in the first instance was to find out the contract price of each bag and that was very easy. It worked out to be Rs. 6-3 per bag. The Court then tried to find as to what was the prevailing rate in Allahabad at which Saharanpur chapati atah was sold about the end of February or the beginning of March 1934.

2. That rate was Rs. 7-3 per bag, and the Court below was of the opinion that the plaintiff was entitled to damages per bag on the difference between Rs. 7-3 and Rs. 6-3 because that was the profit which the plaintiff could make. It was pointed out by this Court that this method of assessing damages was contrary to law. It was said that if the plaintiff took no steps to buy flour elsewhere in order to make up the deficiency, then the plaintiff would not be entitled to a decree merely because he might have made a profit if the defendant had supplied the flour. When the case went back to the Small Cause Court Judge he dismissed the plaintiff's suit on 30th September 1935 with the finding that there was no evidence at all on behalf of the plaintiff on the point mentioned by this Court and therefore the suit must be dismissed in accordance with the law laid down for the subordinate Court by this Court. The plaintiff has now come up in revision, and before I proceed to dispose of the contention advanced by the plaintiff it is necessary that I should mention some of the points taken by the defendant opposite party. It is once more argued before me that the Allahabad Court had no jurisdiction. It is submitted by learned Counsel for the opposite party that the view taken by the learned Judge of this Court inter partes is binding on all points, and if it is said to be not binding on any particular point it should be held to be not binding on any point whatsoever. It is, therefore, said that if I intend to hold a view different from what was held by this Court on the former occasion, I should also consider the question as to whether the Allahabad Court had jurisdiction in the matter, a point which was decided against the defendant on the former occasion.

3. The plea, therefore, that is advanced before me in the very beginning is that the plaintiff should be directed to present his plaint at Saharanpur. Now there can be no doubt that where there are two Courts, both of which would normally have jurisdiction to try the suit, the parties may be allowed to agree among themselves that the suit should be brought in any of those Courts and not in the other. This was held in Achratlal Kesavlal Mehta & Co. v. Vijayam, & Co. 1925 Mad 1145; A. Milton & Co. v. Ojha Automobile Engineering Co. 1931 Cal 279 and Tilakram Chaudhari v. Kodumal Jethananad Wadha 1928 Bom 175; but it did not happen in any one of those cases that the Court below had decided that a particular Court (different from the one for which the parties had contracted) had jurisdiction in the matter and the superior tribunal had interfered in revision on the ground that the suit ought to have been instituted in the Court for which the parties had contracted. In the present case this matter was agitated before this Court, and this Court came to the conclusion that on the question of jurisdiction it should not interfere. I am of the same opinion. The object of parties entering into a contract of this nature is to afford facility or convenience either to both the parties or to one of the parties, and it is unfair that any one of the parties should resile from the contract entailing hardship and inconvenience to the other party. At the same time it is common ground that the other Court also has jurisdiction, and when it is found that the Court below, holding that it has jurisdiction, has tried the merits of the case between the parties, it would not be proper for the revisional Court to interfere and to entail fresh hardship on both parties. This was the view taken by this Court on the former occasion, and I find that the wisdom of this view is all the greater now, when on two occasions the merits have been discussed by the subordinate Court. I, therefore, refuse to accede to the plea taken by the defendant that the plaint should be returned to the plaintiff for presentation to the proper Court.

4. Connected with the point just discussed, another plea was raised that the Allahabad Courts have no jurisdiction whatsoever in the matter, and this plea was based not on the fact that there was a binding contract between the parties by which the suit ought to be instituted in a different Court, but it is said that the contract was entered into at Allahabad by a canvasser of the defendant and the proprietor himself signed the contract at Saharanpur. My attention was drawn to the case in J. D. John v. Oriental Government Security Life Assurance Co. 1929 Mad 347. To my mind the facts of that case are clearly distinguishable. The learned Judge of the Court below has taken great pains to show that a part of the cause of action arose at Allahabad and as such the Allahabad Courts had jurisdiction. I see no flaw in the reasoning of the Judge, and I cannot possibly hold that the Allahabad Courts had no jurisdiction whatsoever in the matter.

5. Coming now to the question of damages, once more it is argued that the view taken by the learned Judge of this Court on a former occasion is binding between the parties. Without deciding the larger question as to whether it is binding on me or not, I am definitely of the opinion that Kendall, J., did not intend to hold and could not hold anything beyond what was held by their Lordships of the Privy Council in Erroll Mackey v. Kameshwar Singh 1932 P C 196. Their Lordships observed that in the case of breach of contract of sale of goods, if there was an available market for the goods at the date of breach, the damages must be based on the difference between the market price and the contract price: a contract of re-sale becomes immaterial, because if there was a market, the law presumes that the buyer can minimise his damage by procuring substituted goods in the market, so that he is thus in the same position, apart from the difference in price, as if the seller had not made default. Hence the difference of price, if the market price exceeds the contract price, is the sole damage in general recoverable. This is exactly what was said in different words by this Court on the former occasion. It was observed:

The plaintiff however must have been in a position to purchase the flour elsewhere and to sell it at the rate of Rs. 7-3 0, and possibly to make a profit on it at that rate, and if so he could only claim compensation to the amount of the difference between the profit he actually made and the profit he might have made if the defendant had not broken his contract.

6. I am, therefore, not trying to lay down any law different from what was laid down by this Court on 22nd May 1935.

7. The learned Judge of the Court below now says that there is no evidence at all on behalf of the plaintiff to show that the plaintiff took any steps to buy flour elsewhere in order to make up the deficiency, and if he did so what he had to pay for it. It is quite true that interpreting literally what was said by this Court on the former occasion, the plaintiff's suit was liable to be dismissed, if he did not as a matter of fact purchase flour elsewhere in order to make up the deficiency, but that is not what the intention of this Court was nor is it the law. It may well be that the plaintiff may not buy the goods, which he had contracted to buy from the defendant, elsewhere from an available market, but in that case he would not be entitled to damages on the basis worked out by the Court below on the first occasion; but there is no reason why, if the plaintiff is able to prove the market price prevailing in an available market about the date of the breach, he should not be given damages based on the difference between the market price and the contract price. One has therefore got to determine what was the date of the breach in the present case, and it was held in the Privy Council case, to which reference has been made already, that the date of the breach was the date when the contract ought to have been but was not fulfilled, and in the present case the contract was to have been fulfilled by the defendant up till the end of February, and the date of the breach would therefore be about the beginning of March 1934. If, for instance, in the present case the plaintiff might have tried to purchase chapati atah in an available market about the end of February 1934, and if the defendant had chosen to fulfil the contract by the end of February 1934, the plaintiff might have had more flour than he had contracted to sell to others or which he could dispose of easily, and the plaintiff while trying to minimise his damages by procuring substituted goods in the market might have placed himself in difficulties. Up till the date of the breach therefore the plaintiff had to wait, and it is only when he got fully convinced that the defendant was not going to perform his part of the contract that he should have been alert and tried to minimise the damages.

8. The inquiry therefore should be as to what was the market price about the beginnnig of March. The case not having been understood in the Court below quite correctly, there is some lacuna in the evidence. There is however on the record of this case a letter dated 24th February 1934, Ex. B, from which it would appear that the market price at Saharanpur about that time was Rs. 6-9-0 a bag. There is also the evidence of the defendant that the rate of flour went high about the middle of March in Saharanpur. There is also the evidence of the plaintiff that about the end of February he bought flour at Allahabad at the rate of Rs. 6-10-0 a bag. It is true that these purchases were made in pursuance of contracts made in advance in January. From all these facts it would be reasonable to assume that the plaintiff could have obtained in an available market flour of the kind contracted between the parties at the rate of Rs. 6-8-0 a bag. That is the figure at which I have arrived at approximately on the entire evidence, and after all in a matter like this approximation can be the only guide. The plaintiff therefore suffered a loss of 5 annas per bag, the contract price being Rs. 6-3-0 per bag.

9. Learned Counsel for the opposite party also drew my attention to the fact that the plaintiff brought the present suit at Allahabad in violation of the contract entered into between the parties on account of which the suit ought to have been instituted in Saharanpur, and if it had been so instituted, the defendant would have had some greater facilities, and some allowance should be made for the extra trouble and expense to which the defendant has been put by the plaintiff. My attention was also drawn to an observation in the judgment of Kendall, J., to the effect that it might be possible for the defendant to claim as a set off compensation for this extra trouble. I feel inclined to agree with the contention of the defendant that some allowance should be made, and I therefore do not give to the plaintiff a decree at the rate of 5 annas per bag, but only at the rate of 4 annas per bag. As a result of what I have said above, I allow this revision, set aside the decree of the Court below and decree the plaintiff's suit for Rs. 188.8-0 for 754 bags at the rate of 4 annas per bag. In view of all the circumstances the plaintiff must pay his own costs in all Courts, and should pay to the defendant costs in all Courts in proportion to the amount to which his suit has been dismissed.


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