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K.S.R. Chakrapani Chettiar Vs. S. Guruswami Reddia - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtChennai High Court
Decided On
Judge
Reported inII(1984)ACC408
AppellantK.S.R. Chakrapani Chettiar
RespondentS. Guruswami Reddia
Cases ReferredGopal Krishnaji v. Mohd. Haji Latif
Excerpt:
- .....between the plaintiff and the defendant that the plaintiff should withdraw his application or the route panruti-vallam and that the defendant should likewise, withdraw his application with reference to the route panruti-arasur. in accordance with this agreement, when the r.t.a. took up the consideration the grant of permit on the route panruti-vallam on 27-10-1971, the plaintiff withdrew his application and the defendant was granted the permit on that route by the r.t.a. in relation to panruti-arasur, the r.t.a. had fixed 29-2-1972 as the date for the consideration of the applications and on 28-2-1972, a letter of withdrawal of the application of the defendant was filed before the r.t.a. however, on 29-2-1972, when the r.t.a. took for consideration the grant of stage carriage permit on.....
Judgment:

Ratnam, J.

1. The defendant O.S. No. 371 of 1974, Sub Court, Cuddalore, is the appellant in this appeal. That suit was laid by the respondent herein praying for the recovery of a sum of Rs. 40,000, as damages and other incidental reliefs under the following circumstances. The plaintiff and the defendant are stage carriage operators and they have been applying for grant of permits in respect of several routes. In relation to two such routes, namely, Panruti-Vallam and Panruti-Arasur the plaintiff, the defendant and certain others had applied for the grant of stage carriage permits. Sometime in October 1971. before the applications were taken up for consideration, an agreement was arrived at between the plaintiff and the defendant that the plaintiff should withdraw his application or the route Panruti-Vallam and that the defendant should likewise, withdraw his application with reference to the route Panruti-Arasur. In accordance with this agreement, when the R.T.A. took up the consideration the grant of permit on the route Panruti-Vallam on 27-10-1971, the plaintiff withdrew his application and the defendant was granted the permit on that route by the R.T.A. In relation to Panruti-Arasur, the R.T.A. had fixed 29-2-1972 as the date for the consideration of the applications and on 28-2-1972, a letter of withdrawal of the application of the defendant was filed before the R.T.A. However, on 29-2-1972, when the R.T.A. took for consideration the grant of stage carriage permit on the route Panruti-Arasur, the defendant engaged another counsel and prayed for the withdrawal and in spite of opposition by the plaintiff, that was allowed and eventually the defendant was granted the permit even on the route Panruti-Arasur by the R.T.A. Against this, the plaintiff and two others filed Appl. Nos. 533, 655 and 670 of 1972 to the State Transport Appellate Tribunal, Madras, and on 23-9-1972, the State Transport Appellate Tribunal found that the R.T.A. was not right in permitting the defendant to withdraw his letter of withdrawal of the application and that the application of the defendant must be considered to have been withdrawn rendering it unnecessary to be considered. Considering the merits also, the State Transport Appellate Tribunal found that the plaintiff was entitled to be granted the permit and accordingly granted the permit to the plaintiff for the route Panruti-Arasur. The correctness of this order was challenged in C.R.P. 2520 of 1972 and that was dismissed on 18-8-1973, with the result that the grant of the stage carriage permit in favour of the plaintiff for the route Panruti-Arasur by the State Transport Appellate Tribunal stood confirmed. Claiming that as a result of the breach of the agreement entered into between the plaintiff and the defendant in relation to the route Panruti-Arasur committed by the defendant, the plaintiff had sustained loss in the collections on the route Panruti-Arasur, for a period of 15 months during which the defendant had run on that route and further that other expenses had also to be incurred by the plaintiff which amounted in all to Rs. 96,000. The plaintiff stated that he restricted his claim to Rs. 40,000 and sought the recovery of this amount against the defendant with interest from the date of suit till the date of realisation.

2. The defendant resisted the suit contending that the agreement set up by the plaintiff was not true and that in any event it was opposed to public policy as well as the provisions relating to the grant of stage carriage permits under the Motor Vehicles Act. The further plea of the defendant was that the agreement was illegal and that was the reason why even in C.R.P. 2520 of 1972 there was no reference to the agreement, and, therefore, the plaintiff cannot base his claim for damages on such an agreement. The agreement was also stated to be devoid of consideration. It was also contended by the defendant that there were other applicants for the grant of permit on the route Panruti-Arasur and the authorities had to consider the grant of a permit on a consideration of the merits and qualifications and, therefore, there was no certainty that the plaintiff would have secured the permit in the event of the withdrawal of the application by the defendant. The damages sustained by the plaintiff was, according to the defendant, not direct or proximate cause of the breach of the agreement. The quantum of damages claimed by the plaintiff was characterised as excessive and fanciful. On those grounds, the defendant prayed for the dismissal of the suit.

3. On the aforesaid pleadings, of the parties, the learned Subordinate Judge, Cuddalore, framed the following issues for trial:

1. Whether there was any agreement as stated by the plaintiff and if so what are the terms?.

2. Whether the agreement even if true is valid and enforceable?.

3. Whether the alleged agreement is opposed to public and hence invalid?.

4. Whether there was any breach of the agreement?.

5. Whether the pla amount is the p.

3. Whether the alleged agreement is opposed to public and hence invalid?.

5. Whether the plaintiff suffered any damages and if so, to what amount is the plaintiff entitled?.

6. To what relief?.

4. Before the Court below, on behalf of the plaintiff, Exs. A-1 to A-14, were filed and the plaintiff was examined as P.W. 1, in addition to two other witnesses P.Ws. 2 and 3, while, on behalf of the defendant, he examined himself as D.W. 1 and marked Exhibits B-1 to B-13. On a consideration of the oral as well as the documentary evidence, the learned Subordinate Judge found that there was an agreement between the plaintiff and the defendant as claimed by the plaintiff and that such an agreement is enforceable and further that the defendant had committed a breach of that agreement. It was also held that the agreement is not opposed to public policy. Adverting to the quantum of damages the learned Subordinate Judge estimated on the evidence that the daily net collection would be about Rs. 100 and that a provision at the rate of Rs. 50 per day for payment of motor vehicles tax and other incidental expenses has to be made and, therefore, at the rate of Rs. 50 per day, the plaintiff will be entitled to recover a sum of Rs. 22,500, as damages with interest thereon at 6 per cent per annum from the date of plaint till payment. While the defendant in his appeal challenges the correctness of this decree, the plaintiff in his memorandum of cross-objections has questioned the quantum of damages awarded to him under the decree of the Court below.

5. We may state at the outset that the finding of the Court below that there was an agreement between the plaintiff and the defendant in respect of the route Panruti-Vallam and Panruti-Arasur and only in pursuance of that agreement the plaintiff had withdrawn his application when the meeting of the route Panruti-Vallam took place on 27-10-1971, and the defendant committed breach of the agreement on 29-2-1972 when he filed the withdrawal application of the withdrawal letter has not been challenged before us. The learned Counsel for the appellant contended that the consideration of applications for the grant of route permits by the concerned authorities under the Motor Vehicles Act, involved the interest of the public and any agreement of the kind set up by the plaintiff, even if true, will be opposed to public policy as well as the provisions of the Motor Vehicles Act, and cannot, therefore, be recognised by Court and enforced. Reliance in his connection was also placed by the learned Counsel on the decision in Swaminatha Aiyar v. Muthu-swami Pillai (1970) ILR 30 Mad. 530. Per contra, the learned Counsel for the respondent submitted that the withdrawal of an application already made by a person by the exercise of his volition is not prohibited by the provisions of the Motor Vehicles Act and the Rules there under and, therefore, the object of the agreement was not to defeat what the law had prohibited. It was also further pointed out that at best the effect of the agreement was only to reduce the number of applicants by one, but that would not result in the grant of a permit in favour of other or others, as, despite the withdrawal the R.T.A. had to deal with the question of the grant of permit on the merits of the rival applicants. Our attention in this connection was drawn to the decision in Model, hack v. Sreeramulu AIR 1946 Mad. 289, Ramalingiah v. Subbarami Raddi : AIR1951Mad390 , Gherulal Parakh v. Mahadeodas : AIR1959SC781 and Firm Pratapchand v. Firm Kotrike : [1975]3SCR1 . The prior decision in C.R.P. 2520 of 1972, inter partes upholding that of the State Transport Appellate Tribunal wherein it had been held that the defendant could not be permitted to withdraw his earlier letter of withdrawal, was also relied upon as precluding the defendant from raising any plea in this regard. Our attention of this connection was drawn to the decision in Sathyadhyan v. Smt. Deorajin Debi : [1960]3SCR590 and T.G. Mudaliarv. State of Tamil Nadu : [1973]3SCR222 .

6. It has earlier been seen that the defendant has accepted finding of the Court below that there was breach of an agreement between the plaintiff and the defendant under the terms of which the defendant agreed to withdraw his application for the grant of a stage carriage permit in respect of the route Panruti-Arasur. The question is, whether such an agreement is unenforceable because it is opposed to public policy or the provisions under the Motor Vehicles Act. We may immediately point out that our attention was not drawn to any provision in the Motor Vehicles Act, or the Rules there under which prohibits an application from withdrawing an application made by him earlier for the grant of a stage carriage parmit. In the absence of provisions to that effect, an agreement, which results merely in the withdrawal of an application made earlier for the grant of a stage carriage permit by an applicant, would not be oppossd u or run counter to any provision of law or would defeat a prohibition by law. The question of public policy with reference to the enforceability of the agreement has to be considered in their twin aspects, namely, the nature of the consideration as well as the nature of the acts to be performed. In this case, it is not the case of the appellant that the consideration is such as to be treated as opposed to public policy. But even with reference to the nature of the acts to be performed under the agreement, it is only the withdrawal of the application earlier made by the appellant for the grant of the stage carriage permit for the route Panruti-Arasur, which is not in any manner formed upon by the statute. In addition, it has to be borne in mind that effect of such an agreement is not to dispense with an enquiry by the R.T.A. in relation to the grant of permits for the route Panruti-Arasur and to grant a permit for the route in favour of the plaintiff. In other words, in spite of the withdrawal of the application by the defendant, the question as to who among the applicants is entitled to the grant of a stage carriage permit on the concerned route has nevertheless to be considered and dealt with by the R.T.A. on the merits. For all practical purposes, the effect of the agreement was to leave one applicant out of consideration for the grant of the permit for the route in question and that is not the same thing as saying that one of the applicants should be granted a permit irrespective of his other qualifications. We do not, therefore, see involvement of any public interest or the violation of public policy or even the provisions of the Motor Vehicles Act.

7. The decision relied on by the learned Counsel for the appellant in Saminatha Aiyar v. Muthusami Pillai, (supra) has no application to the present case, for, herein, money was undertaken to be paid to a public servant to induce him to retire with a view to make way for the appointment of the promisor and that was held to be trafficking with reference to an office, and, therefore, void Under Section 23 of the Contract Act. Such considerations are totally lacking in this case. On the other hand, in Md. Iack v. Sreeramulu, (supra), the question arose whether an agreement between the owner of motor buses to withdraw the tender of one so that the other can secure a licence for carrying mails between Ellore and Chintalapddi as a valid one. Under the agreement, the person who withdrew his tender had to be paid by the successful tenderer a sum of Rs. 15 per month for a certain period and Rs. 20 per month in other contingencies and it was this amount that was sought to be recovered by the institution of a suit in which the defence was that the contract was unenforceable as being opposed to public policy. In holding that such an agreement would be valid, Rajamanner J. (as he then was) applied the principle laid down by Sargent C.J. in Haribalakfishna and Co. v. Naro Moreshwar and Co. I.L.R. (1894) Bom. 342 and observed that if an agree- ment to refrain from bidding at an auction is not opposed to public policy, then an agreement for the withdrawal of a tender which is only in the nature of an offer or a bid, cannot be declared unlawful. In Ramalingiah v. Subbarami Reddi. (supra) Panchapagesa Sastri J. had no consider the validity of a knock out agreement by which certain villagers had agreed not to bid against each other, but to put up one person as the sole bidder. It was contended that such an agreement not to bid against each other is not illegal under the common law nor an auction would get invalidated because of such an agreement and in upholding the validity of such an agreement, the absence of a statute here as in England to remedy the evil of a knock out combination was noticed and it was held that such an agreerrent cannot be invalidated on the ground of public policy. Considered in the light of the principles laid down in the decisions referred to above, we are of the view that at best the agreement in this case would amount to a mere withdrawal of the application made by the defendant for the grant of a stage carriage permit on the route Panruti-Arasur and that such an agreement is not opposed to public policy. We may also note that the object of the agreement was not to carry out some- thing prohibited by the provisions of the Motor Vehicles Act or law widely applicable so as to be hit by Section 23 of the Contract Act, as pointed out by the Supreme Court in Firm Pratapchand v. Firm-Kotrike : [1975]3SCR1 .

8. Earlier, it has been noticed how the plaintiff and Ors. appealed to the State Transport Appellate Tribunal in App. Nos. 523, 655 and 670 of 1972 against the grant of a permit in favour of the defendant in respect of the route Panruti-Arasur, contrary to the agreement between the plaintiff and the defendant under which the defendant had agreed to withdraw his application. Ex. A-7 is the copy of the judgment of the State Transport Appellate Tribunal. After elaborately considering the circumstances under which the agreement between the plaintiff and the defendant was entered into, the State Transport Appellate Tribunal, in para 26 of its judgment, found that the Regional Transport Authority was not right in having permitted the defendant to withdraw his letter of withdrawal of the application and in having proceeded to consider the application of the defendant and had also further stated that the application of the defendant must be considered to have been withdrawn. In other words, the State Transport Appellate Tribunal had proceeded to uphold the validity of the agreement as well as its legal effect and this judgment of the State Transport Appellate Tribunal had been upheld by this Court in C.R.P. 2520 of 1972 on 18-8-1973, as seen from Ex. A-8. Though it may appear from Ex. A-8, that the validity of the agreement had not been specifically adverted to yet the binding effect of the adjudication therein would not be dependent upon whether this argument was put forth or not. But if the point with reference to which the argument was raised before the State Transport Appellate Tribunal was decided, it does not matter whether it was expressly considered or a decision was given thereon or not as that will not take away the binding effect of the decision of this Court confirming that of the State Transport Appellate Tribunal (vide T. G. Mudaliar v. State of Tamil Nadu), (supra). We are, therefore, of the view that even by the principles of res judicata, the defendant is preduced from contesting either the validity or the legal effect of the agreement entered into between the plaintiff and the defendant with reference to the withdrawal of the application of the defendant for the grant of a stage carriage permit on the route Panruti-Arasur.

9. Regarding the quantum of damages, the learned Counsel for the appellant submitted that the quantification and the fixation of the damages at Rs. 22,500, is excessive. It was submitted that the basis for the quantification of the damages at Rs. 50 per day is on the high side, and, therefore, the amount of damages should be reduced. It was also further pointed out that during the pendency of C.R.P. 2520 of 1972, the defendant operated on the route in question on the strength of an order of stay of this Court which enuredj to his benefit between 19-10-1972 to 18-8-1973, and, therefore, at least during his period when he was protected by an order of stay, damages cannot be awarded to the plaintiff. The learned Counsel pressed into service the well known maxim actus curiae neminem gravabit. On the other hand, the learned Counsel for the respondent submitted that even on the basis of the evidence of D.W. 1, the net income from the route in question was Rs. 100 per day and, therefore, the quantification of damages at the rate of Rs. 50 per day after making provision for payment of taxes and other incidental expenses by the Court below is erroneous. In this connection, he drew our attention to the admission of D.W. 1 in his evidence to the effect that the net income per day was Rs. 100 on this route. In addition, the learned Counsel also submitted that no plea was raised by the defendant in his written statement that he was not liable to pay damages for the period between 19-10-1972 and 18-8-1973 and that no point in this regard had also been raised in the grounds of appeal, and, therefore, the defendant cannot be heard to complain that the Court below had gone wrong in quantifying the damages for this period also. The learned Counsel for the respondent further submitted that the defendant who had operated on the route during the period was in possession of evidence which would throw considerable light on the collections made during the period, but had burned the evidence except for the production of Exhibit B-10, relating to the month of May, 1972, only and had suppressed the rest of the materials and, therefore, the Court below had fixed the quantum on the basis of the admission of the defendant himself, though erroneously after deducting some amount towards expenses, motor vehicles tax, etc., from out of the net income. The learned Counsel also drew our attention to Gopal Krishnaji v. Mohd. Haji Latif : [1968]3SCR862 , in this connection.

10. We now proceed to consider in the light of the submissions made, the correctness of the quantum of damages fixed by the Court below. In relation to this, the plaintiff had placed before the Court only oral evidence, P.W. 1 had stated that he estimated the loss of earnings at Rs. 200 per day, P.W. 3, the conductor, would say that on the route in question the total earnings would be about Rs. 550 per day and that Rs. 150 will be spent for expenses and the net income would be Rs. 200 per day. On the other hand, the evidence of D,W. 1 which has been noticed by the Court below is to the effect that the net income on this route will be about Rs. 100 per day. The Court below has, in para 13, adverted to this admission of D.W. 1, but has proceeded to deduct Rs. 50 per day for payment of motor vehicles tax and other incidental charges, overlooking that the net collections amount to Rs. 100 a day after making provision for these outgoings. In other words, the Court below had made double deduction in this regard. It had deducted again from out of the net income, items of expenditure like the motor vehicles tax and other incidental expenses. This is plainly erroneous. The defendant, apart from relying upon Ex. B-10, has not made available any other material to show the income from the route in question. Undoubtedly, during the period in question, the defendant had operated on the route and the defendant should have materials in his possession which would throw light with reference to the income. But he had not made available to Court the best evidence in his possession and in the absence of such evidence, the defendant cannot be permitted to rely upon the abstract doctrine of onus of proof (vide Gopal Krishnaji. Mohd. Haji Latif), (supra). We are inclined to accept the admission of D.W. 1, as reflecting a correct estimate of the net income from the route in question which even according to him, would be about Rs. 100 per day. On this basis, the plaintiff will be entitled to recover from the defendant a sum of Rs. 100 every day for the total period of 15 months. In other words, the plaintiff will be entitled to recover from the defendant a sum of Rs. 45,000 but he had restricted the claim to Rs. 40,000 only. We, therefore, hold that the plaintiff is entitled to recover the amount of Rupees 40,000 from the defendant as damages.

11. The argument that the plaintiff is not entitled to damages for the period covered by the stay order does not appear to us to be one of substance. That this period has to be excluded has not been raised by the defendant in the written statement. There is nothing whispered about this even in the grounds of appeal. Apart from this, if the plaintiff had been prevented from operating by an order of stay on the route on which he was entitled to operate as a result of the grant of a stage carriage permit in his favour by the State Transport Appellate Tribunal, we do not see how the defendant can claim that he should not be prejudiced by an act of Court. It has also to be remembered that ultimately C.R.P. 2520 of 1972 was dismissed and that would mean that even the stay order granted in favour of the defendant ought not to have been granted as ultimately the plaintiff was held entitled to the stage carriage permit in respect of the route Panruti-Arasur. In other words, the plaintiff was prevented by the order of stay obtained by the defendant from operating on the route in respect of which he secures a permit and he ought not to be penalised because the defendant obtained an order of stay in C.R.P. 2520 of 1972, which was eventually dismissed. Under these circumstances, the defendant cannot be heard to take umbrage or sheller.under the principle of actus curiae neminem gravabit.

12. That takes us on to the question of interest awarded under the In decree of the Court below. The Court below has granted interest at the rate I of 6 per cent per annum of Rs. 22,500 from 17-8-1974, the date when the suit was instituted till the date of realisation. The learned Counsel for the appellant contended that till the actual determination of the quantum of damages, the amount of damages would really remain unascertained and under such circumstances, interest ought to have been allowed on the damages awarded only from the date of the decree of the Court below. On the other hand, the learned Counsel for the respondent submitted that the Court below had thought it reasonable to direct payment of interest on the amount decreed from the date of institution of the suit in accordance with Section 34, C.P.C. and therefore no exception can be taken to the interest as awarded under the decree of the Court below. It is seen from the plaint that the respondent had set out a claim for a sum of Rs. 96,000 and had eventually confined his relief to Rs. 40,000 and this would show that even the respondent was not very sure about the quantum of damages he is likely to secure from the appellant. As against the claim as made by the respondent the Court had to go into and decide the question of the exact amount of damages payable to the respondent and this was done only under the decree of the Court below dated 7-1-1977. Taking into account all the circumstances of the case, we are of the view that the end of justice would be met, if the appellant is directed to pay interest at the rate of 6 per cent per annum on the sum of Rs. 40,000 from 7-1-1977.

13. Consequently, the decree of the Court below will stand modified in that the appellant should pay the respondent the sum of Rs. 40,000 with interest thereon at six per cent per annum from 7-1-1977 till the date of payment. The result is Appl. No. 81 of 1977 will stand dismissed and there will be no order as to costs therein. The memorandum of cross-objections will stand allowed with costs and the suit will stand decreed as prayed for with costs.


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