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HIGH COURT OF CALCUTTA
Bose
M. PRESTON - Appellant
Versus
J. S. HUMPHREYS - Respondent
Suit 1834 Of 1952
Decided On : MAY 25, 1954
CONTRACT - BREACH - DAMAGES - LIQUIDATED DAMAGES - PENALTY - SECTION 74, CONTRACT ACT - INTERPRETATION - REASONABLE COMPENSATION.
Fact of the Case:
Plaintiff agreed to purchase a soda water plant from the defendant on certain terms and conditions. The defendant failed to deliver the plant within the stipulated time and also failed to supply certain parts of the plant. The plaintiff cancelled the contract and claimed damages for breach of contract.
Finding of the Court:
The court held that the defendant had committed a breach of contract and that the plaintiff was justified in cancelling the contract. The court also held that the plaintiff was entitled to a refund of the advance paid by her and to damages for the breach of contract.
Issues: 1. Whether the defendant committed any breach of the contract as alleged by the plaintiff. 2. Whether the time for performance of the contract was extended by mutual consent. 3. Whether the provision for payment of compensation at Rs. 50/- per day was a penal clause or enforceable in law. 4. To what relief, if any, the plaintiff was entitled.
Ratio Decidendi: 1. The court held that the defendant had committed a breach of contract by failing to deliver the plant within the stipulated time and by failing to supply certain parts of the plant. 2. The court held that the time for performance of the contract was not extended by mutual consent. 3. The court held that the provision for payment of compensation at Rs. 50/- per day was not a penal clause but was a genuine pre-estimate of damages. 4. The court held that the plaintiff was entitled to a refund of the advance paid by her and to damages for the breach of contract.
Final Decision: The court decreed in favor of the plaintiff for Rs. 4410/- with interim interest on the sum of Rs. 3000/- at 6% per annum. The defendant was also ordered to pay the costs of the suit.
( 1 ) THIS is a suit for recovery of Rs. 5500/- as damages for breach of a contract to deliver and instal a Soda Water plant and for refund of Rs. 3000/- paid as advance in respect of the price of the said plant and for other incidental reliefs.
( 2 ) THE plaintiff's case is that on or about 11-12-1951, the plaintiff agreed to purchase from the defendant one aerated soda water plant on terms and conditions as set out below: (1) The defendant would supply (a) One reconditioned Niagara Carbonator by Barnett and Foster Ltd. , London adapted for hand or power drive having a capacity of 70 dozen bottles per hour complete with pressure reducing value and two 40 lbs. capacity cylinders filled with gas and two electro motors. (b) One Sankey two head back pressure filling machine with one operator. (c) One hand power crowning machine on stand, (d) One double headed Syruping machine with stainless steel syrup vessel. (e) One bottle washing plant consisting of galvanised iron soaking tank electrically driven brushing machine and 12 jet rinsing machine. (2) The price of the complete plant would be. Rs. 5800/- including delivery and installation at premises No. 7 Kyd Street, Calcutta. The price would include replacement of parts for 12 months from the date of installation. (3) Rs. 3000/- would be paid in advance towards the price. (4) Delivery and installation of the plant was to be completed within two weeks from 11-12-1951, (i. e. , date of acceptance of the offer ).
( 3 ) THE defendant also guaranteed that the plant would be in perfect working order and condition and would produce high class soda water.
( 4 ) ON 11-12-1951 the plaintiff paid Rs. 3000/-towards the price of the said plant in advance.
( 5 ) ON 23-2-1952 the said agreement was modified as follows: (a) The two electro motors were to be new. (b) The galvanised iron tank of the washing machine was to be replaced by a new one. (c) Delivery and installation of the plant was to be completed by 6-3-1952 and in the event of failure to give delivery on or before date, the defendant would pay compensation at the rate of Rs. 50/- per day after 6-3-1952.
( 6 ) IT was further agreed that the plaintiff would arrange a mechanic to complete the fabrication of the connection and for the adjustment of the plant before it was put into use, under the supervision and in accordance with the instruction of the defendant. The plaintiff was ready and willing- to perform her part of the agreement but the defendant failed to carry out his obligations under the contract. The defendant delivered only some parts of the plant, which were scraps and not of merchantable quality and were useless for the installation and working of the plant. The plant is still incomplete and has not been installed and is not working at all. The plaintiff offered to return the parts supplied, but the defendant has refused to take them back. By reason of the breach of contract on the part of the defendant, the plaintiff has suffered damages which is assessed at Rs. 5500/ -. The particulars of such damage are set out in para. 15 of the plaint. The plaintiff also claims refund of the advance of Rs. 3000/ -.
( 7 ) IN the written statement, the payment of Rs: 3000/- is admitted. It is stated further that the defendant was all along ready and willing to perform his part of the contract but the defendant was prevented from performing his part of the contract by the wrongful conduct of the plaintiff's landlord and the plaintiff's business partner Mr. Agabeg. It is alleged that time for performance was extended by mutual consent and the defendant performed his part of the contract within the extended time until he was hindered by the plaintiff not providing the electricity. It is admitted that the defendant did not supply the following parts; (a) Two 40 lbs. Cylinders with gas. (b) One brushing machine complete. (c) One 1/4 H. P. Motor for brushing machine. (d) Fittings for the plant and belting. But it is stated that
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