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1996 Supreme(Del) 659
High Court Of Delhi
ANANT RAJ AGENCIES - Appellant
Versus
INDCRJIT AND BROTHCRS - Respondent
Decided On : 08/13/1996
In a breach of contract case, the plaintiff must prove the actual damages suffered as a result of the breach. In the absence of a risk purchase clause in the agreement and documentary evidence to establish the actual purchase price, the plaintiff cannot recover damages for excess payment made for the purchase of goods from the open market.
Headnote:
CONTRACT - BREACH OF CONTRACT - SALE OF GOODS - FAILURE TO SUPPLY GOODS - DAMAGES - PLAINTIFF'S FAILURE TO PROVE ACTUAL DAMAGES - NO RISK PURCHASE CLAUSE IN AGREEMENT - NO DOCUMENTARY EVIDENCE OF PURCHASE PRICE - SUIT PARTLY DECREED FOR OUTSTANDING BALANCE WITH INTEREST.
Fact of the Case:
Plaintiff, a registered partnership firm, entered into an agreement with the defendants for the supply of 20 lakh bricks at Rs. 350 per thousand. Plaintiff advanced Rs. 87,000 to the defendants, who supplied only 75,000 bricks. Plaintiff purchased the remaining 19 lakh bricks from the open market at a higher price, claiming damages for the excess payment.
Finding of the Court:
The court found that the defendants breached the contract by failing to supply the agreed quantity of bricks. However, the court held that the plaintiff failed to prove the actual damages suffered due to the breach, as there was no risk purchase clause in the agreement and no documentary evidence was produced to establish the actual price paid for the purchase of bricks from the open market.
Issues: 1. Whether the plaintiff is a registered partnership firm and the suit has been filed through a registered partner? 2. Whether the defendants agreed to supply 20 lakh bricks to the plaintiff? 3. Whether the defendants supplied two lakh bricks to the plaintiff? 4. Whether the plaintiff purchased 19 lakh bricks valued at Rs. 8,36,000.00 at the risk and costs of the defendants? 5. Whether the plaintiff is entitled to receive the amount of difference of the original price and the price at which the plaintiff purchased the bricks at the risk of the defendants? 6. Whether the plaintiff is entitled to interest? 7. To what amount is the plaintiff entitled?
Ratio Decidendi: The court held that the plaintiff was entitled to recover the outstanding balance of Rs. 60,650, which was the difference between the amount advanced and the value of the bricks supplied by the defendants. However, the court denied the plaintiff's claim for damages for the excess payment made for the purchase of bricks from the open market, as the plaintiff failed to prove the actual damages suffered.
Final Decision: The suit was partly decreed, and the plaintiff was awarded Rs. 60,650 with interest at the rate of 18% per annum from the date of institution of the suit till the date of payment.
( 1 ) THIS is a suit for recovery of Rs. 2,54. 538. 00 from the defendants with a pendente life and future interest at the rate of 21 per cent per annum.
( 2 ) THE plaintiff is a registered Partnership Firm, of which Shri Anil Sarin is a registered partner. The plaintiff firm is engaged, inter alia, in the business of construction. The plaintiff firm for the purpose of cam-ing out some construction works awarded to it. required bricks and accordingly entered into an agreement with the defendant No. 1 who is engaged in the business of manufacture for supply of 20 lakhs 1st Class bricks at the rate of Rs. 350. 00 per thousand bricks, inclusive of Sales Tax, Cartage, etc. The plaintiff at the request of defendant No. 1 advanced a sum of Rs. 60. 000. 00 to defendant No. 1 vide Cheque No, P 600956 dated 13/12/1985 drawn on State Bank of Patiala. Hauz Khas, New Delhi and the said cheque was duly encashed by the defendant No. 1. Defendant No. 1 through its representative again approached the plaintiff for advancing Rs. 27,000. 00 which was urgently required bv it to enable it to purchase coal for supplying the bricks and the plaintiff advanced a sum of Rs. 27. 000. 00 vide Cheque No. 175401 dated 26. 12. 1985. which was also encashed by the defendant No. 1. The defendant No. 1. however. issued a cheque bearing No. 994965 drawn on State Bank of Patiala dated 3. 1. 1986 purporting to return the sum of Rs. 27. 000. 00 which was advanced by the plaintiff at the request of defendant No. 1, but the said cheque was returned unencashed with the endorsement "not arranged for .
( 3 ) IT is further averred in the plaint that the defendant in complete breach of the agreement failed to supply 20 lakh bricks as agreed upon to be supplied and when inspite of waiting by the plaintiff for the defendant No. 1 to make such supplies till May, 1986, the plaintiff made purchase from the open market at the risk and cost of the defendant by making purchase of the said bricks at the rate of Rs. 340. 00 to Rs. 350. 00. per thousand bricks. In that manner, the plaintiff purchased 19 lakh bricks costing in all Rs. 8,36,000. 00 at the rate varying from Rs. 430. 00 to Rs 450. 00, whereas, the rate agreed with the defendant was Rs. 350. 00 per thousand bricks. It was further stated that the defendant No. 1 advanced a total sum of Rs. 87,000. 00 and suffered a loss of Rs. 1,71,000. 00 on account of breach of the defendant and accordingly the present suit has been filed seeking to recover the aforesaid amount of Rs. 2. 54,538. 00 seeking a decree thereof
( 4 ) THE defendants filed a written statement denying the allegations made in the plaint and also stating, inter alia, that the plaintiff gave an advance of Rs. 60,000. 00 to the defendants by cheque, which was encashed as against which the defendants supplied bricks of the value of Rs. 70. 000. 00 to the plaintiff and were prepared to refund a sum of Rs. 17,000. 00 in full and final settlement of the account between the plaintiff and the defendants.
( 5 ) ON the aforesaid pleadings of me parties, altogether eight issues were framed in the suit which read as follows:- ,
1. WHETHER the plaintiff is a partnership firm duly registered under the Indian Partnership Act and the suit has been filed through a registered partner? OPP.
2. WHETHER the defendants agreed to supply 20 lakh bricks to the plaintiff as alleged in para 5 of the plaint? OPP.
3. WHETHER the defendants supplied two lakhbricks to the plaintiff ? OPD.
4. WHETHER the plaintiff purchased 19 lakh bricks valued at Rs. 8,36,000. 00 at the risk and costs of the defendants ? If so, its effect? OPP
5. WHETHER the plaintiff is entitled to receive the amount of difference of the original price and the price at which the plaintiff purchased the bricks at the risk of the defendants? OPP.
6. WHETHER the plaintiff is entitled to interest? If so, at what rate? OPP.
7. TO what amount is the plaintiff entitled? OPP.
( 6 ) ON behalf of the plaintiff, Mr. Pankaj N
