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S.RAVINDRA BHAT
ARYAVART OVERSEAS (P. ) LTD. – Appellant
Versus
KAY AAR BISCUITS (P. ) LTD. – Respondent
Based on the provided legal document, here are the key points:
The case involves a breach of contract concerning the supply of biscuits between the plaintiff, a marketing company, and the defendant, Kay AAR Biscuits, with a focus on damages for short supply and breach of contractual obligations (!) (!) .
The original agreement was entered into on June 8, 1978, with a subsequent settlement on June 7, 1979, which guaranteed minimum supplies and set terms for payments, delivery, and market restrictions (!) (!) (!) .
The contract stipulated that Kay AAR would supply a minimum of 100 tonnes of biscuits per month, with an obligation to increase supply progressively, and the plaintiff invested heavily in marketing and reputation-building based on this agreement (!) (!) (!) .
The defendant defaulted on supply commitments, supplying only nominal quantities after a certain point and selling biscuits in the open market, which constituted breach of the contractual terms (!) (!) (!) .
The court found that the plaintiff suffered damages due to short supply, calculated at Rs. 768.75 per tonne for approximately 220 tonnes, based on the net profit loss per tonne (!) (!) (!) .
The court emphasized that damages should be based on actual loss and market value, and noted the plaintiff's failure to mitigate damages by purchasing from alternative sources or taking reasonable steps to reduce losses (!) (!) (!) .
The court concluded that the plaintiff's claim for damages should be reduced proportionally, considering the duty to mitigate, and awarded damages calculated at Rs. 768.75 per tonne for approximately 988.58 tonnes, which is half of the shortfall, amounting to Rs. 7,59,969.72 (!) (!) .
Additionally, the plaintiff was awarded a sum of Rs. 20,030.25, which was withheld, along with interest at 15% pendente lite and future interest on this amount (!) (!) .
The suit was decreed in favor of the plaintiff, with costs quantified at Rs. 75,000, and the damages and interest awarded as detailed above (!) .
The legal principles reinforce that damages aim to place the injured party in the position they would have been if the contract had been fully performed, but the plaintiff must act reasonably to mitigate losses and cannot claim damages for losses that could have been avoided through reasonable efforts (!) (!) (!) .
Please let me know if you need further analysis or specific legal advice related to this case.
HON’BLE MR. JUSTICE S.RAVINDRA BHAT, J.
1. The plaintiff, a private limited company carrying on business in marketing biscuits, sues for damages in the sum of Rs.39,74,344.25 P (Rupees thirty Nine lakhs Seventy four thousand hundred and forty and paise twenty five only).
2. The plaintiff is a private limited company incorporated under the Companies Act, 1956 and carries on business inter alia of selling and marketing biscuits and other food products in various part of India. It is averred that in 1978 the defendant (hereafter “Kay Aar”) approached it (the plaintiff) at New Delhi requesting assistance to it (the defendant) for setting up a factory to manufacture biscuits,and also for its sale. The plaintiff agreed; this led to the parties entering into a rate contract on the 8th of June 1978. The original of that agreement was filed on record of suit No.5 of 1980 and marked as Exhibit P-1; a certified copy of the agreement together with its annexures is filed in this suit. It is produced, and marked as Exhibit PW-1/1.
3. The parties, by the said contract agreed that Kay Aar would supply to the plaintiff biscuits, (as described in its Anenxures) under the Plaintiff’s trade n
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