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1960 Supreme(Cal) 7
HIGH COURT OF CALCUTTA
B. K. Guha, B. N. Banerjee
UNION OF INDIA (UOI) - Appellant
Versus
MOUJI LAL SHAW - Respondent
A. F. O. D. 98 Of 1953
Decided On : JANUARY 12, 1960
Arun Kumar Janah, J.Majumdar, KSHETRA MOHAN CHATTERJI, SARAT CHANDRA JAIN
The measure of damages for breach of a contract for the sale of goods is the market price of the goods at the date of the breach.
Headnote:
SALE OF GOODS - BREACH OF CONTRACT - DAMAGES - MEASURE OF DAMAGES - MARKET PRICE AT THE DATE OF BREACH - EVIDENCE OF MARKET PRICE - REMAND FOR FRESH EVIDENCE.
Fact of the Case:
Plaintiff purchased 145 tons of timber from the Union of India in an auction sale. The Union of India failed to deliver 87 tons of the timber. The plaintiff sued for damages for non-delivery.
Finding of the Court:
The court held that the plaintiff was entitled to damages for non-delivery of the timber. The court also held that the measure of damages was the market price of the timber at the date of the breach.
Issues: 1. Whether the plaintiff was entitled to damages for non-delivery of the timber? 2. What was the measure of damages?
Ratio Decidendi: 1. The court held that the plaintiff was entitled to damages for non-delivery of the timber because the Union of India had breached its contract with the plaintiff. 2. The court held that the measure of damages was the market price of the timber at the date of the breach because this was the amount that the plaintiff would have had to pay to purchase the timber from another source.
Final Decision: The court set aside the judgment and decree of the trial court and remanded the case to that Court to be re-heard on the point of measure of damages and on no other point.
( 1 ) THIS appeal, at the instance of the defendant Union of India, is directed against a decree for damages, amounting to Rs. 21,716/-, on account of non-delivery of goods.
( 2 ) FACTS, as hereinafter stated, leading upto the sale of the goods, of which the delivery of the whole could not be given, are not disputed. Chewringhee Sales Bureau Ltd. , (Defendant respondent No. 2) were auctioneers appointed by the Union Government and under express instructions from the Regional Commissioner (Disposals) (Ex. I (5) and I (4)) advertised for sale in public auction of 145 tons of Sal timber, as per conditions of sale contained in the notice (Ex. A ). Thereafter, on 15-10-1046, the aforesaid goods were sold in auction at the workshop and store yard of Messrs. Indian Metal Corporation at 16, Belur Road, Howrah, where the goods were stacked and plaintiff Moujilal Shaw made the highest bid at Rs. 3,500/-, as the bid sheet (Ex. H) shows. He deposited a sum of Rs. 1000/- with the fall of the hammer and later on the same day, paid the balance of the price along with the sales tax. All these appear from the advance slip (Ex. 6) and the Cash Bill (Ex. 4 ). A delivery order on the stockist of the goods, Messrs. Indian Metal Corporation, the purport of which is contained in the plaintiff's letter, Ex. 1, directing the said Stockist that delivery must be given "by measurement (weight by weight) and a receipt obtained" was made over to the plaintiff.
( 3 ) THE plaintiff, however, alleged that he could not take delivery, firstly, because the stock of timber sold, was found short by about 33 per cent and, secondly, because the stockist refused delivery. These will appear from letters marked Ex. 1 (d) and I (a), respectively dated the 17th and the 21st October, 1946.
( 4 ) THE plaintiff wrote to the authorities complaining about the non-delivery of the goods. The Chowringhee Sales Bureau Ltd. , the auctioneers, wrote to Messrs. Indian Metal Corporation to give delivery of the goods sold to the plaintiff (as appears from the letter Ex. 1 dated 23-11-1946 ). So also did the Controller of Production (as appears from letter Ex. I (1) dated 2-11-1946) but only 18 tons were delivered to the plaintiff, on the 3rd and the 4th of December, 1946.
( 5 ) THEN followed a chapter of correspondence by the Chowringhee Sales Bureau, the Regional Commissioner (Disposals), the Controller of Production, the Indian Metal Corporation and the plaintiff, one against the other, between December 7, 1946 and March 6, 1947 (Ex. 1 (a), 1 (b), 1 (c), I, I (h), I (j), B (1), B (2), B (3), B (4) and B (5)) evidencing plaintiff's repeated endeavours and failures to obtain delivery and strong support on paper by the Regional 'commissioner and the Controller of Production to the cause of the plaintiff. The letter Ex. B (5) written by the Controller of Production to Messrs. Indian Metal Corporation, dated 6-3-1947, is revealing of the situation and need be referred to:"ref: Your letter No. LW/291 dated 24-2-1947 and subsequent discussions of the undersigned on 13-3-1947 with your Mr. Banerjee and Mr. Ganeriwalla. This is to confirm that in the above discussions it was agreed that you would deliver the above timbers to the buyer. Mr. Moujilal Shaw, on production of the letter when he calls on you for collection of the timber on 10-3-1946 at 11 a. m. onwards. To avoid any further controversy or dispute whatsoever, it was also mutually agreed that one of my representatives will accompany the buyer and in the event of your failure or refusal to deliver the timber to the purchaser, you shall be entirely responsible to make good any loss suffered by the Government in the transaction. Copy to :--2. Messrs. Moujilal Shaw, Iron and Metal merchant, 1, Ghola Danga 3rd Bye Lane, Howrah, Ref. his letter no. nil dated 10-2-1947. He will please call in this office on 10-3-1947 at 10-30 a. m. sharp and accompany one of my departmental Inspectors to the premises of the above firm for
