The measure of damages, normally, in case of breach of contract for sale of goods, is a difference between the contract price and the market price on the date of the breach.

JUDGMENT :- This appeal is directed against the order of Shri N. C. Gupta, Sub Judge 1st Class, Delhi whereby the objections filed by M/s. Tribhuwan Das Lalji Patel to an award made by Shri Ram Labhaya were accepted and the award was not made a rule of the Court.

2. The facts leading up to the award were that a contract for the supply of Indian Teak Sleepers of specified sizes at a specified rate was entered into between the Union of India and M/s. Tribhuwan Das Lalji Patel of Bhavnagar. The contracted goods had to be supplied to the Union of India on monthly basis from June, 1952 onwards and the total quantity was to be supplied by 31st December, 1952. The contract entered into by the Union of India was subject to its Supply Department's general conditions of contract contained in a printed booklet known as form W. S. B. 133. These general conditions, inter alia, contained an arbitration clause under which in case of a dispute between the parties and differences arising between them the same were to be referred to the arbitration of two arbitrators, one to be appointed by each of the contracting parties and in case of disagreement to an umpire for his adjudication. Disputes did arise between the parties as to the claim of damages of Union of India arising out of the alleged non-supply of the contracted goods by the other party. The arbitrators did not agree among themselves and so the matter was referred to Shri Ram Labhaya, Umpire, who made his award on 21st November, 1960. By this award the Government's claim for damages was upheld to the extent of Rs. 18,320/-. On the award being filed in Court the Contractor filed objections against it and contended that the award is liable to be set aside as it suffered from an error apparent on the face of it. The trial Court agreeing with the contention set aside the award and dismissed the application of Union of India for making the award a rule of the Court. Aggrieved, the Union of India has preferred this appeal.

3. Mr. Brijbans Kishore, the learned counsel for the appellant, has urged that on a reading of Cl. 11 (3) of the conditions of contract it would be clear that irrespective of whether the Government suffered any loss or not on account of the contractor's failure to supply the contracted goods, the Government was entitled to damages. He further contended that the award was justified in terms of illustration (a) under Section 73 of the Contract Act. The learned counsel for respondent, on the other hand, contended that when admittedly the Government suffered no loss or damage, the umpire could not award damages as damages can only be awarded provided there is a loss.

4. Clause 11 (3) of the conditions of contract reads as under :-

"Failure and Termination. Should the contractor fail to deliver the stores or any consignment thereof within the period prescribed for such delivery the Secretary, Department of Supply shall be entitled at his option either :-

(a) to recover from the contractor as "liquidated damage, and not by way of penalty, a sum of 2% of the price of any stores which the contractor has failed to deliver as aforesaid; for each month or part of a month during which the delivery of such stores may be in arrears.

(b) to purchase elsewhere, without notice to the contractor on the account and at the risk of the contractor, the stores not delivered or others of a similar description (where others exactly complying with the particulars are not in the opinion of the Secretary, Department of Supply which shall be final, readily procurable) without cancelling the contract in respect of the consignment not yet due for delivery, or

(c) to cancel the contract.

In the event of action being taken under (b) or (c) above the contractor shall be liable for any loss which the purchaser may sustain on that account but the contractor shall not be entitled to any gain on repurchases made against default."

Under this clause it is apparent that if the Contractor fails to deliver the stor