On behalf of the defendant-appellant, case-law has been cited such as in Erroll Mackay v. Kameshwar Singh, AIR 1932 PC 196, Jivraj v. Chainkaran, AIR 1944 Nag 279, Anandram v. Bholaram, AIR 1946 Bom 1, all holding that for award of damages on breach of contract, the disadvantage to the plaintiff should be calculated as it was on the date of the breach and not on any later date. As a general principle, this is altogether beyond controversy. It is equally certain that the conduct of the defaulter can, as it were, postpone it to a date later than that on which he had to perform his part of the contract. In this case, this involves facts about earlier demands and evasion; it had to be pleaded so that the plaintiff might have occasion to point out that even though a date for performance has been stated in the contract, the breach had really happened on a later date. Having failed to do so, the appellant-defendant cannot agitate this question here.
Madhya Pradesh High Court
Indore Malwa United Mills Ltd. vs Ramkaran Ghisslal on 29 November, 1961
Equivalent citations: AIR 1963 MP 197
1. This is an appeal by the defendant, from the judgment of the learned Civil Judge decreeing the plaintiff-respondent's suit for damages for nondelivery of part of the cotton seed produced by the defendant in his textile mill, in the ginning season of 1948, and contracted to be sold to him. The allegation was that having agreed to deliver all the cotton seed of that season of the variety called 'Malvi' at an agreed price, the defendant actually sold only 300 Manis (or 1200 bags) out of a production of 800 manis or (3200 bags). By the time the defendant persisted in his refusal in spite of the plaintiff's notice, the price had gone up; the latter claimed and obtained a decree for damages on this breach on the basis of the price on the day of the final refusal which was 1-3-1949.
The following questions arose for consideration; (i) whether the agreement was for the delivery of 300 manis only or for the entire production of the season; (ii) whether the quantity withheld was 2000 bags (weight 500 manis) as given out by the plaintiff and (iii) whether the difference in price was as set out by the plaintiff. But the defendant restricted his attack to the first only. In appeal it is urged that besides this the appellant is entitled to put the plaintiff to the strictest proof on the other issues as well, as those relating to the quantity, and the date, the price on which is to be basis for calculating the damages.
2. Though the issues are in essence ones of fact, the position taken by the defendant in the lower Court have in a sense made them mixed ones calling for the examination of the principles relating to the drawing of adverse inference from a party's withholding the best evidence in its possession, its delay in replying to the demand of delivery of sold goods, and its failure to make an express denial of the averments of the opposite party.
3. The facts of the case are the following: As a textile enterprise, the defendant also gins cotton, with the result that in the season which is usually in October, November and December, he has in his hand quantities of cotton seed. For the season of 1948, he entered into a contract with the plaintiff to deliver to him the cotton seed of that season which consisted of three varieties (about two of which there is no controversy) the third, the cheapest, which variety known to be 'malvi' at the rate of Rs. 45-12-3, to be delivered at the Mills at Indore. The two other varieties were to be delivered at a godown at Sanawad. While it is common ground that the entire quantity of the season of the two other varieties was to be sold, in regard to this variety i.e. 'malvi' there was a difference. The plaintiff contended that he was entitled to purchase the entire production which he estimated at 3200 bags i.e. 800 manis (each mani being six maunds); the defendant contended that only 300 manis, in other words 1200 bags were agreed to be sold The prices were going up; and by the end of the season i.e. the middle of December 1948, the conventional date being Kartik Sudi Purnima, he had delivered as against an advance and further payment a quantity of 300 manis or 1200 bags. The plaintiff noticed the defendant on 19-1-1949 calling upon him to deliver the rest of the cotton seed of the season of this variety; but he avers that he had made oral requests, with no success. The defendant was silent till the 1st March, when he replied that the agreement was to deliver only 300 manis, which had been done, and not the entire production of the season. The plaintiff thereupon filed the suit on his estimate of a total production of 3200 bags or 800 manis claiming that 2000 bags or 500 manis had remained undelivered. The price on 1-3-1949 was Rs. 12-3-9 per mani in excess of the agreed price; he has claimed this amount with interest and costs.
4. As already mentioned, the defendant joined issue only on the crucial term of the agreement relating to the quantity. His case is based on register on which the agreement was entered, and signed by the plaintiff, which at the time of the written statement showed "about 300 manis" entered da the appropriate column. He did not join issue on other averments.
5. The Court found that originally there was no mention of any quantity in the register; which implies that the entire quantity of the season was to be sold. The recital "about 300 manis" had been made later on. Again, while the plaintiff averred that the agreement had been made with Seth Pyarelalji, one of the directors or officers of the company, the defendant denied it, without ever stating with which director or officer it had been made at all. This, however, was of no consequence as it was common ground that the agreement had been with the company, and it was quite immaterial whether the officer concerned was Seth Pyarelalji or any other. Having found that there was a breach, the Court accepted, in the absence of any evidence to the contrary adduced by the defendant, that the quantity produced in the season was the estimate given by the plaintiff. As for the price, the plaintiff adduced evidence that it was Rs. 58/- per mani on 1-3-1949, This was not controverted by the defendant nor did the defendant urge that the breach if any could nave been committed on the Kartik Sudi Purnima, which was some date early in December. The result was that the plaintiff's claim was decreed in toto.
6. Ground No. 1:-- The agreement has been reduced to writing in one of the registers of the company and copy of which has been exhibited as Ex. P/2. On the same page there is Ex. P/3 (of the same date and obviously of the same time) an agreement with the same purchaser i.e. the plaintiff, in regard to cotton seed of two other Varieties. The plaintiff has urged that when he signed the agreement, the column 'quantity' had not been filled in. The term of delivery was;
"ready stock to be delivered on permission from the Suba Sahib and to complete the delivery upto Kartik Sudi Purnima."
The original is not before us having apparently been taken away by the defendant from the lower Court and now untraced with him, but it is common ground that the entry in the column "quantity" had been made in another ink and at another time than the rest. The plaintiff's statement is that the column "kind of cotton seed" had also been left blank and the word 'malvi' had also been written later on. This in any event, is immaterial a's the price would indicate that the sale of the cheapest of the three varieties was being coutracted for, and this is admittedly the 'malvi' variety. The defendant does not question the fact of words "about 300" being inserted later on, but according to him it was part of the agreement. Otherwise we have oral evidence against oral evidence with the further disadvantage to the defendant that while denying that Seth Pyarelal was the officer director that actually entered into the negotiations, they are unable to call or even name of the particular officer (sic) who was responsible for this. The strongest support for the plaintiff's case is that, while certainly the insertion had been made later, there is no initial or other formal acceptance of this insertion by him. Any variation of the formal agreement to the disadvantage of one of the parties should certainly be signed or otherwise proved to have been accepted by him in an unmistakable manner. This alone is sufficient to justify the trial Court's finding but there are other reasons also. Simultaneously, there was an agreement for the purchase of two other varieties; it is common ground that the entire production of the season was meant in regard to them. If out of the three varieties the entire production of the season of the two were to be delivered, it is very likely that the position was similar in regard to the third, unless, of course, there is some special reason. But the defendant has not suggested any reason whatsoever why in regard to the 'malvi' variety there was a reservation. Yet another reason is that an approximate and not a definite quantity was mentioned. If the ginning was to extend for some time and the total quantity of the cotton had not come in and the intention was to sell the entire production, words like "about 300" are understandable. It may be that the company is making an underestimate with some ulterior purpose such as, for example, playing with the controlling authorities, but that is not the real point. Obviously a person who makes an estimate will either mention a quantity or "about" something; but one who agrees to buy a definite quantity, will mention it and not qualify it by "about". The implication of an estimate excludes the possibility of a quantity already ascertained on that date.
7. Ground No. 2:-- A party can certainly choose to contest one only out of several issues. If it wins on it, it does not experience any further difficulty; but if it loses, it is often too late to agitate the other issues involving facts. Grounds of law pure and simple can be examined at any stage; but even there, in the event of controversial facts also being involved, a party cannot spring a surprise.
8. The plaintiff has pleaded and the Court has found that the breach was on, 1-3-1949; for the calculation of the damages the price on that date has been taken as the basis. It was open to the defendant to plead and seek to establish, without prejudice to his other grounds, that the breach, if any, had really been committed on the Kartik Sudi Purnima; and further that the price was lower on that date than on the 1st March 1949. He having failed to do this, we have to examine if on the materials before us the breach can be definitely held to have been committed on Kartik Sudi Purnima; and secondly, whether the defendant can at all raise this defence at the present stage. The contract does mention that the delivery should bo completed by the Kartik Sudi Purnima. If by that time, there had been delivery upon demand by the plaintiff there was no breach. The plaintiff has averred that he mada oral demands, that the defendant was evasive, and ultimately he issued a notice on the 19th January 1949. It was open to the defendant to deny that there were oral demands at all; and assert that he could have got the entire quantity if he had applied before that date. Actually the defendant delayed till the beginning of March, and even then he did not take the position; it is not that he would have delivered the entire quantity by Kartik Sudi Purnima and had to change his mind as the purchaser did not come to collect it on or near the date. On the contrary, the reply was to the effect that the agreement was for the delivery of 300 manis and not the produce of the season. Thus we have to find that by his own conduct the defendant had led the plaintiff to hope till that date, that the entire quantity would be forthcoming. This along with the sheer absence of a pleading to this effect prevents us from going into the question at this stage.
9. On behalf of the defendant-appellant, case-law has been cited such as in Erroll Mackay v. Kameshwar Singh, AIR 1932 PC 196, Jivraj v. Chainkaran, AIR 1944 Nag 279, Anandram v. Bholaram, AIR 1946 Bom 1, all holding that for award of damages on breach of contract, the disadvantage to the plaintiff should be calculated as it was on the date of the breach and not on any later date. As a general principle, this is altogether beyond controversy. It is equally certain that the conduct of the defaulter can, as it were, postpone it to a date later than that on which he had to perform his part of the contract. In this case, this involves facts about earlier demands and evasion; it had to be pleaded so that the plaintiff might have occasion to point out that even though a date for performance has been stated in the contract, the breach had really happened on a later date. Having failed to do so, the appellant-defendant cannot agitate this question here.
10. Ground No. 3:-- The plaintiff has stated in his plaint:
"After the said delivery of 300 'mani', the defendant had produced in his mill 2000 bags of cotton seed of a total weight of about 500 manis. This he was bound under the contract to deliver to the plaintiff but in spite of his demand, the defendant would not give it."
Now this quantity is a provisional estimate, the plaintiff having no material to prove definitely that this quantity had been actually produced in the Mills of the defendant in that season. He must have depended on mere rumours, or at best, estimates based on the out-turns of the previous years; all this is at best an approximation. The defendant did not either plead that the quantity produced in the mills was less, nor did he bring his stock-registers. Being a joint stock company, he must have been maintaining such books, especially because the quantities are large. He has now urged in appeal, that it was for the plaintiff to prove on good evidence that the quantity was so much and, failing it, to lose his case.
11. In this regard the appellant has referred to Order 8, Rule 3 and cited case-law such as J. B. Ross v. C. R. Screven, AIR 1917 Cal 269(2); Order 8, Rule 3, C. P. C., runs thus:
"It shall not be sufficient for a defendant in his written statement to deny generally the grounds alleged by the plaintiff, but the defendant must deal specifically with each allegation of fact of which he does not admit the truth, except damages."
Certainly this puts the burden on the plaintiff of proving his claim for damages, whether or not the defendant specifically denies the allegation in regard to its measure. All that this ruling shows is that in such a case an issue is necessary. All the same, it does appear that certain sentences in this judgment give the impression of having been worded rather widely. It is unnecessary, however, to go into an analysis of this judgment, in view of the subsequent decision of the Privy Council reported in T. S. Murugesam Pillai v. M. D. Gnana Sambandha Pandara Sannadhi, AIR 1917 PC 6:
"A practice has grown up in Indian procedure of those in possession of important documents or information, lying by, trusting to the abstract doctrine of the onus of proof, and failing accordingly to furnish to the Courts the best material for its decision. With regard to third parties, this may be right enough; they have no responsibility for the conduct of the suit; but with regard to the parties to the suit, it is an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw light upon the proposition."
This principle applies to the instant case. The plaintiff gave a provisional estimate which in theory is certainly unsatisfactory; but the defendant did not even care to state what according to him was the total quantity produced by him in that season though he was best qualified to know. It is not as if the defendant is refusing to go out of his way to oblige a third party; but he is refusing to produce the best documentary evidence bearing on the main issue which affects him Vitally. His apparent justification being that the burden of proof under Order 8, Rule 3 lies solely on the plaintiff, and he cannot be compelled to do anything to lighten this task. It is this kind of cleverness which the Courts have to discourage. Fortunately they are not powerless; and are competent to draw an inference that the evidence of his stock-books if produced, would have supported the plaintiff. It might even be that the plaintiff has made an underestimate and the quantity was higher still.
The same principle has been affirmed by the Privy Council in the later decision reported in Rameshwar Singh v. Bajit Lal Pathak, AIR 1929 PC 95; that:
"Best evidence not produced though available raises adverse presumption."
In that case both the High Court and the Judicial Committee disapproved "of the design on the part of the defendant to take advantage of the abstract doctrine of the burden of proof". Referring to the same question, the Supreme Court has, in the case reported in Hiralal v. Badkulal, AIR 1953 SC 225 held that:
"The defendant cannot be heard to say, relying upon the abstract doctrine of onus of proof, that it was no part of his duty to produce his books unless he was called upon to do so."
12. In this connection the appellant has also argued that the principles under which the so called "nominal damages" are granted by the English Courts in the absence of definite evidence regarding the quantity have not been accepted by our Courts; therefore, since there is no direct first hand evidence in this case produced by the plaintiff as to the quantity withheld from him, it was not proper for the trial Court to have awarded any damages. This argument does not appeal to us for more than one reason. Fristly the principle followed by the English Courts has been accepted by the Nagpur High Court in Arjunsa Raghusa v. Mohanlal Harakchand, AIR 1937 Nag 345 though there are views to the contrary expressed by some of the other High Courts.
"When a contract to deliver goods is broken, the proper measure of damages in general is the difference between the contract price and the market price of such goods at the time when the contract is broken..... If that is not done, nominal damages: If that is done that is the measure of damages prima facie."
The words "nominal damages" do not mean minimum damages but damages on a provisional basis. Anyway, the position in this case is not one which calls for the award of nominal damages. We have to see whether the manner in which the plaintiff has sought to prove one of the factors viz., the quantity withheld is satisfactory in these circumstances; for the reasons already set out, it is satisfactory and sufficient to establish, in the absence of other evidence, that the quantity was 2000 bags. It is thus unnecessary to study how far those principles have been accepted by our Courts.
13. Ground No. 4:-- On the price on the 1st March 1949, the evidence of the plaintiff has not been controverted by the defendant-appellant.
14. The result is that the appeal is found to be without substance and is dismissed. Costs and pleaders' fees according to rules payable by the defendant-appellant to the plaintiff-respondent.
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