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Birendra Nath Dhar Vs. Food Corporation of India - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberSuit No. 285 of 1972
Judge
Reported inAIR1978Cal362
ActsContract Act, 1872 - Section 73
AppellantBirendra Nath Dhar
RespondentFood Corporation of India
Excerpt:
- .....amount of bills paid and in the alternative at the rate of rs. 7,500/- per month on the basis of minimum remuneration. he also claimed an enquiry into damages. 4. it is the admitted position that no work was allotted to the plaintiff from june 1, 1970 and that the contract was not terminated by the defendant. in this background, at the trial by consent of the parties a learned member of the bar was appointed as the special referee to enquire into the damages suffered by the plaintiff on the following terms :-- 'what are the damages suffered by the plaintiff if any, for breach of the agreement by non-supply of work to the plaintiff during the period from may 30, 1970 to march 6, 1971 in terms of the tender and/or agreement between the parties?'5. the referee entered into the reference.....
Judgment:
ORDER

Monjula Bose, J.

1. The present application is by the plaintiff in this suit who seeks to vary or modify a report of the Special Referee dated October 11, 1977 made herein by enhancing the amount of damages as determined by the Learned Referee.

2. The facts leading to this application are shortly as follows:--

The plaintiff was appointed the Handling and Transport Contractors for loading, unloading and transport of foodgrains at the defendant's two specified godowns for a period of two years from March 7, 1969 to March 6, 1971. Under the terms contained in the tender, no definite volume of work was guaranteed but the defendant undertook to pay to the Contractor during the subsistence of the contract a minimum amount per month the quantum of which was not specified. The defendant also had a right to terminate the contract at any time without assigning any reason therefor on 30 days' notice to the Contractor without being liable to pay any compensation to the plaintiff for such termination.

3. Upto May 29, 1970 the total value of the work allotted to the plaintiff was Rs. 10,60,746.69. Thereafter, no further work was allotted during the entire unexpired period of contract which however was not terminated by the defendant. In the suit the plaintiff claimed damages of Rs. 68,696.78 as loss of profits for the unexpired termof the contract on the basis of 10% of the amount of bills paid and in the alternative at the rate of Rs. 7,500/- per month on the basis of minimum remuneration. He also claimed an enquiry into damages.

4. It is the admitted position that no work was allotted to the plaintiff from June 1, 1970 and that the contract was not terminated by the defendant. In this background, at the trial by consent of the parties a learned member of the Bar was appointed as the Special Referee to enquire into the damages suffered by the plaintiff on the following terms :--

'What are the damages suffered by the plaintiff if any, for breach of the agreement by non-supply of work to the plaintiff during the period from May 30, 1970 to March 6, 1971 in terms of the tender and/or agreement between the parties?'

5. The Referee entered into the reference and has filed his report dated October 11, 1977 on January 24, 1978. A sum of Rs. 40,000/- has been found to be the damages payable to the plaintiff.

6. Before the Referee the plaintiff claimed damages on the following further basis, i. e. on the basis of difference between the contract rate and the rate at which the plaintiff paid his labourers up-to May 30, 1970.

7. Evidence was led before the Special Referee by the plaintiff to show that the minimum remuneration clause in the tender was not quantified as the defendant was unable to ascertain the volume of work on which the minimum remuneration was to be fixed. It is in further evidence that a few months after the acceptance of the tender the Regional Manager of the defendant stated to the plaintiff that such minimum remuneration would be Rs. 7,500 per month. It is further in evidence that the plaintiff's average income per month in respect of the work done was Rs. 8,000/-.

8. The Special Referee disallowed theplaintiff's claim for damages on the basis of 10% of the amount of paid bills on the ground that there was no guarantee that the plaintiff would be allotted the same volume of work for the unexpired period. The damages claimed on the basis of work for bills submitted and 25% profits therefrom has also been rejected on the ground that in the plaint profit on the basis of 10% was claimed. The Ld. Referee however accepted the case of the plaintiff that some minimum remuneration was contemplated in the contract and on that basis allowed the damages at Rs. 40,000/-.

9. At the hearing, learned counsel for the plaintiff reiterated his claim inter alia on the basis of a minimum remuneration of Rs. 7,500/-.

10. It appears to me that the plaintiff's claim for damages on the basis of a minimum remuneration of Rs. 7,500/- per month is tenable. No doubt this amount was not quantified in the tender and left blank but it has been the unchallenged testimony of the plaintiff that this was the amount on the basis of which the parties proceeded with the transaction. The minimum remuneration Clause XIV (b) was not intended to be inapplicable to the contract and was not scored through as was admittedly done in respect of Clause XXA (ii), (iii) & (iv). Furthermore it is an admitted case that the parties contemplated the execution of a formal contract which was not done. Clause IX of the tender relating to the period of contract had similarly been left blank but subsequently, it was agreed that the contract would be for a period of two years. The contention of the defendant that the plaintiff at best is en-titled to a month's notice and therefore should receive only Rs. 7,500/- as minimum remuneration and that it was contemplated that the plaintiff would be allotted work of the value of Rs. 1,20,000/-only and accordingly he was required to deposit a sum of Rs. 6,000/- being 5% of such value do not appear to me to be acceptable. The defendant did not terminate the contract and therefore there is no question of the plaintiff's claim being limited to one month's minimum remuneration. It has also been found by the Special Referee, and in my opinion correctly, that Rs. 1,20,000/- did not represent the total value of the work to be allotted as the plaintiff was in fact allotted work of a much higher value being over Rs. 10,00,000/- and hence the security deposit of Rs. 6,000/- was only a token deposit which had nothing to do with the value of the work under the contract.

11. It however, appears to me that theSpecial Referee did not take into account or correctly appreciate the oral evidence of the plaintiff as to the agreed or stipulated minimum remuneration of Rs. 7,500/-payable to the plaintiff, which evidence of the plaintiff was not controverted by the defendant. I accordingly, hold that the plaintiff is entitled to damages on the basis of such minimum remuneration of Rs. 7,500 per month for the unexpired periodof contract, from June 1, 1970 to March 6, 1971 amounting to Rs. 69,250/-. The report of the Special Referee is varied to that extent only and the amount of damages is enhanced accordingly. There will be a decree in favour of the plaintiff accordingly for Rs. 69,250; interim interest and interest on judgment at six per cent per annum and coats, including costs of this application and reference, certified for two counsel.


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