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2016 Supreme(Mad) 3807
IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. SATHISH KUMAR, J.
Sri Narayanamoorthy Travels Rep. by its Managing Partner Mr. M.C. Harikrishnan - Plaintiff
Vs.
The Secretary Sri Venkateswara Educational and Health Trust - Defendant
C.S. No. 452 of 2007
Decided On : 07-12-2016
For the Plaintiffs : Mr. S. Thiruvenkadam
For the Defendant : Mr. V. Balasubramanian
The main legal point established is that in a breach of contract case, damages can be awarded for specific losses suffered, and the claimant must provide evidence to support the extent of the damages claimed.
Headnote:
Damages - Transport Business - Contract Law - [MOTOR VEHICLES ACT, 1988, Section 66(1)] - The court discussed the breach of contract, damages claimed, and the non-furnishing of the No Objection Certificate by the defendant. The court awarded damages for the delay in furnishing the certificate and discussed the ownership of the buses and the lack of evidence for claiming damages for all buses.
Fact of the Case:
The plaintiff, a transport business owner, entered into a contract with the defendant, a college, to provide transport services for students and staff. The defendant terminated the contract and failed to provide a No Objection Certificate, causing the plaintiff to claim damages for the loss suffered.
Finding of the Court:
The court found that the defendant breached the contract by not furnishing the No Objection Certificate, leading to damages for the delay in obtaining the certificate. The court also found that the plaintiff could only claim damages for the buses owned by them and not for all the buses as claimed.
Issues: The issues included breach of contract, entitlement to claim damages, amount due for services rendered, and the entitlement to a decree for recovery of a specific sum from the defendant.
Ratio Decidendi: The court held that the defendant committed a breach by not furnishing the No Objection Certificate, leading to damages for the delay. The court also ruled that the plaintiff could only claim damages for the buses owned by them and not for all the buses as claimed.
Final Decision: The court decreed the suit in favor of the plaintiff, awarding damages for the delay in furnishing the No Objection Certificate and interest at the rate of 6% from the date of the suit.
The suit is filed to award a sum of Rs.27,73,040/- towards damages for the loss suffered due to the conduct of the defendant and to award the interest at the rate of 18% per annum from the date of plaint till the date of the realisation of the amount.
2. The brief facts of the case of the plaintiff are as follows:
The plaintiff is running fleet and doing a transport business for several decades. Apart from running the buses for public transport, the plaintiff also running the buses on contract basis to various persons. The defendant, who is running a college had approached the plaintiff to render service to their students on contract basis. Accordingly, the agreement was entered into between them on 31.05.2005 initially for a period of one year and thereafter to continue for ensuing period depending on the rates to be agreed on ever year.
2.1. In view of the potential requirement of the defendant institution, the plaintiff procured 16 buses to meet the requirement of the defendant. The plaintiff spent several lakhs in setting up the exclusive arrangement to act in tandem to the institution functions. The plaintiff also obtained special permit from the Regional Transport Officer (in short "RTO") and such permit cannot be used to ply the buses for other purposes. After one year, when the plaintiff sought renewal to continue the service, the defendant informed the plaintiff to wait for three months as they have to get approval of the trustees.
2.2. While so, without prior notice or intimation about the possible discontinuation of the service, one Sre Kannathal Travels, which is run by one of the close relative of the defendant, was given the contract on the higher rate of the plying charges with other perks. When the same was questioned by the plaintiff, the defendant made some unfounded blames against the plaintiff. As the plaintiff had invested huge money and established the back office cum maintenance, the act of the defendant caused heavy loss to the plaintiff.
2.3. Apart from that, the defendant withhold the payment due for the services already rendered to the tune of Rs.2,84,000/-, for which the plaintiff already raised the bill. On the said amount, the defendant has to pay the interest at the rate of 18% which comes to Rs.29,820/-. Hence, the defendant is liable to pay a sum of Rs.3,13,820/- in addition to the damages claimed.
2.4. Since the defendant caused huge loss and damages to the plaintiff by their conduct and implication, the plaintiff is entitled to claim the damages from the defendant. When the plaintiff made several attempt to contact the defendant to issue the application for surrender of permit and clearance certificates, due to the development created by them, there is no response from the defendant. Therefore, the plaintiff sent a legal notice dated 17.11.2006 calling upon the defendant to answer. As there was no response from the defendant, the plaintiff has filed the present suit.
3. The case of the defendant, in nutshell, is as follows:
The suit is not maintainable in the eye of law and the same is liable to be dismissed in limine, as the plaintiff has not filed its Firm Registration Certificate to maintain the present suit. As the defendant Trust is running an educational institution, the plaintiff was engaged for the purpose for ferrying its student and staff to its college. An agreement was entered into between the plaintiff and the defendant on 31.5.2005 and as per the terms of the agreement, the period of contract was only for one year commencing from 01.6.2005 to 31.05.2006. There was no promise that the agreement shall continue till own arrangement come into existence or for another 5 years. Further, there is no extension / renewal clause in the agreement dated 31.5.2005.
3.1. Since the services rendered by the plaintiff were not up to the standard promised by it and the vehicles provided by
