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Masseys (1930), Limited Vs. C.R. Krishnaswami Aiyar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1935Mad603; (1935)69MLJ69
AppellantMasseys (1930), Limited
RespondentC.R. Krishnaswami Aiyar
Cases Referred and Padmanabhaya v. Ranga
Excerpt:
.....those damages to be assessed at the same rate of hire agreed upon between the parties in the hiring agreement. paragraph 10 states that the defendant failed and neglected to pay any of the arrears in spite of requests and that the plaintiffs are entitled to recover possession of the machinery or its value rs. in this case clause 13 of the agreement, to which i have already referred, clearly provides for such a claim, stone, j. it is true that the plaint is not clearly worded as it ought to have been and that paragraph 11 and prayer ii have occasioned the trouble; i am quite satisfied that the basis for the assessment of the damages put forward by the plaintiffs is the correct one. ranga (1910)20mlj930 .i cannot see anything in the plaint which indicates clearly an intention on the..........those damages to be assessed at the same rate of hire agreed upon between the parties in the hiring agreement. paragraph 10 states that the defendant failed and neglected to pay any of the arrears in spite of requests and that the plaintiffs are entitled to recover possession of the machinery or its value rs. 2,500. then comes paragraph 11 which has been the cause of the trouble in this case. it reads as follows:the plaintiffs are also entitled to recover the sum of rs. 1,298-3-6 being arrears of hire and interest thereupon up to date of plaintf.3. then follows paragraph 12:the plaintiffs are also entitled to recover damages for use and detention of the machinery after determination. such damage the plaintiffs assess at the same rate of hire per month as agreed to in the hire.....
Judgment:

Horace Owen Compton Beasley, Kt., C.J.

1. This is an appeal from a judgment of Stone, J. The appellant-plaintiffs Messrs. Masseys, Limited sued the respondent-defendant under an agreement, dated the 30th September, 1932 claiming in pursuance of that agreement the delivery of possession of some machinery set out in the plaint schedule or in lieu of it the value of the machinery viz., Rs. 2,500, and the sum of Rs. 1,298-36. The way in which the latter sum is claimed appears from paragraph 11 of the plaint but in order to better understand what the plaintiffs' claim is, I will set out in full paragraph 9 in the plaint : That paragraph 9 reads as follows:

On account of the defendant's persistent defaults in spite of requests and concessions made to him the plaintiffs have by letter, dated 3rd October, 1933 called upon the defendant to pay the arrears then accrued due and in default determined the hire purchase agreement calling upon the defendant to deliver possession of the machinery and to pay all arrears of hire and subsequent damages for non-delivery of the machinery at the same rate of hire agreed upon between the plaintiffs and the defendant in the agreement.

2. This paragraph clearly indicates that the hiring had been determined and that the defendant had been called upon to deliver up possession of the machinery and at the same time to pay all arrears of hire due at that date and subsequent damages for non-delivery of the machinery, those damages to be assessed at the same rate of hire agreed upon between the parties in the hiring agreement. Paragraph 10 states that the defendant failed and neglected to pay any of the arrears in spite of requests and that the plaintiffs are entitled to recover possession of the machinery or its value Rs. 2,500. Then comes paragraph 11 which has been the cause of the trouble in this case. It reads as follows:

The plaintiffs are also entitled to recover the sum of Rs. 1,298-3-6 being arrears of hire and interest thereupon up to date of plaintf.

3. Then follows paragraph 12:

The plaintiffs are also entitled to recover damages for use and detention of the machinery after determination. Such damage the plaintiffs assess at the same rate of hire per month as agreed to in the hire purchase agreement and the defendant is bound to pay such hire or at such rate as the Court thinks fit as damages from the date of determination Lo date of delivery of possession of the machinery.

4. Then prayer I prays for an order directing the delivery of the machinery or payment of its value. Prayer II claims the payment of Rs. 1,298-3-6 being the arrears of hire accrued due up till date of plaint including interest with further interest thereon and prayer III claims future hire or damages for the use of the machinery at the same rate per month as is mentioned in the agreement. The agreement was a hiring agreement with an option to purchase under which the plaintiffs let out on hire some machinery to the defendant. It provides for an initial payment of Rs. 1,048-12-0 by the defendant. The defendant was thereafter to pay in monthly instalments on the fifth day of each subsequent month the amount specified in the agreement. There are various clauses in the agreement to which it is unnecessary to refer. The aggregate amount to be paid by the defendant to the plaintiffs was a total sum of Rs. 3,258-10-0. Clause 5 of the agreement gives the hirer, the defendant, the right to terminate the hiring at any time in the course of the hiring by delivering up the machinery to the plaintiffs. Clause 12 provides that on the termination of the hire all the payments by the hirer under the terms of the agreement are to be forfeited to the owners and the hirer is to deliver up the machinery to the plaintiffs. Clause 13 which is the important one reads as follows:

On the termination of the hire the owners may notwithstanding the seizure of the said machinery or the return of the same either by the act of the hirer or under process of law, recover from the hirer all hire rents in< arrears at the date of the termination of the hiring with interest and also damages for any injury to the said machinery and damages for breach of this agreement and any costs, expenses and payments incurred or made by the owners in connection with tracing and obtaining possession of the said machinery or otherwise and the hirer shall not on any ground whatever be entitled to any allowance, return or set off.

5. This is, as I have already stated, a very important clause because it gives the right to the plaintiffs the owners of the machinery, even after the hiring has been terminated to' claim damages in addition to the arrears of rent due on the date of the termination of the hiring for breach of the agreement. Stone, J., gave a decree to the plaintiffs for Rs. 1,298-3-6 on the footing that that sum represented the hire due to the plaintiffs up to the date of the plaint. It is quite clear and I think that Stone, J., was of that opinion also - that this is a case which comes within the class of cases embraced by Helby v. Matthews (1895) A.C. 471 and that this is a hiring agreement and not an agreement by way of purchase. In such agreements as those the owner of the machinery is entitled not only to recover possession of the machinery but if the agreement so provides for damages up to the time when possession of the machinery is delivered to the owner. In this case Clause 13 of the agreement, to which I have already referred, clearly provides for such a claim, Stone, J., it being an undefended suit before him, was of the opinion that, from the way in which the plaint was framed, the plaintiffs had, by claiming arrears of hire up to the date of plaint, waived the determination of the hiring which was by letter of the 3rd October, 1933. I regret to say that I cannot take that view. It is true that the plaint is not clearly worded as it ought to have been and that paragraph 11 and prayer II have occasioned the trouble; but taking the allegations in the plaint generally, in my opinion, they amount to this that, though the hiring has been determined, the plaintiffs are entitled to arrears of rent up to the date of the termination by notice of the 3rd October and that thereafter they are entitled to damages for use of the machinery not delivered up to them in pursuance of the demand, and they put forward the contention that the proper basis for the assessment of those damages is the amount of hire agreed upon in the agreement. This, I think, is the correct basis. Whilst the defendant is in improper possession of the machinery he has the use of it and it is difficult to see why the plaintiffs cannot claim by way of damages the amount which is properly due to them for the trial of the machinery. Had the machinery been returned to the plaintiffs on demand, the plaintiffs would have had the use of the machinery or would have been able to hire it out to somebody else. I am quite satisfied that the basis for the assessment of the damages put forward by the plaintiffs is the correct one. As regards the waiver of the notice determining the hiring, in my opinion, Stone, J., has taken an incorrect view of the matter. The fact that rent has been claimed after giving notice to terminate, does not in my opinion, amount to waiver. The plaintiffs had of course the option to waive the notice determining the hiring and treat the hiring as if it were still going on or had the option to claim a forfeiture of the machinery and, unless by some subsequent act it is shown that there was any intention on the part of the plaintiffs to waive the notice determining the hiring, then that notice has not been waived. Unless there has been a payment of rent made after the notice to determine the tenancy or the hiring as the case may be and that payment is accepted, there has been no waiver of the determination of the tenancy or the hiring by the mere demand for subsequent rent. This is quite clear from the English case of Blyth v. Dennett (1853) 1 C.B. 177 : 138 E.R. 1165 and Padmanabhaya v. Ranga : (1910)20MLJ930 . I cannot see anything in the plaint which indicates clearly an intention on the part of the plaintiffs to treat the contract of hiring as if it were still in existence. On the other hand, I think that what is clearly meant by the plaint is that the contract of hiring was determined and damages are claimed thereafter for the wrongful detention of the machinery. For these reasons, in my opinion, the learned trial Judge was wrong and this appeal must be allowed with costs and the decree of the trial Court modified by ordering that the defendant do deliver up possession of the machinery to the plaintiffs or its value, viz., Rs. 2,500 and by awarding damages to the plaintiffs up to the date of this decree at the rate of the monthly rent.

6. The appeal is allowed with costs.

Cornish, J.

7. I am of the same opinion. I think that the agreement between the parties here was a hiring agreement with an option to purchase. It was not an agreement to buy as the agreement imposes no obligation upon the hirer to purchase. It is true that in the event of the hirer paying all the instalments of rent the initial payment of Rs. 1,048-12-0 was to be credited to him towards the purchase money. But the agreement shows that this initial payment was made by way of hire on delivery and as consideration for the option to purchase. It is not, therefore, a part of the purchase money until the hirer had exercised his option to purchase. The instalments of rent having fallen into arrear, the owners were entitled under the agreement to terminate the hire. This they did, and the hiring agreement came to an end; and the owners were entitled to get back the machinery and also, under Clause 13 of the agreement, to claim damages for breach of the agreement. I think that the learned trial Judge was in error in assuming that the owners had waived the notice terminating the hiring. There is no evidence of the owner's intention to waive it. The plaint indeed has not been very accurately drawn, but I think it substantially claims what the owners are entitled to claim on the agreement, namely, damages for use on failure, after notice of termination, to deliver up the machinery. The hirer has continued to have the use of the machinery after the notice and I see no reason why he should not pay for the subsequent use of the machinery. I think that the amount of hire fixed by the agreement would be a fair measure of damages for the continued user of the machinery. This will of course be in addition to the arrears of rent after notice which the owners are entitled to have and also to the liability to deliver up the machinery or to pay its value.


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