A party to a contract is liable to pay damages for breach of contract, even if the damages are in the nature of a penalty, if the parties have voluntarily and of their own accord agreed upon the amount of damages and the amount is a reasonable estimate of the loss likely to be caused by the breach.

Bhandari, J.

1. The, only point for decision in the present case is whether the plaintiffs are entitled to recover from the defendant-company a sum of Rs. 7,897/6/- which was paid by them under protest in respect of electric current alleged to have been consumed by them.

2. On the 10-3-1941 the Jullundur Electric Supply Company, Limited, Jullundur, (hereinafter referred to as the Company) entered into an agreement with Messrs. Amin Chand-Bhola Nath, Merchants, Jullundur, (hereinafter referred to as the plaintiffs) for the supply of electrical energy to their premises situate on the Tanda Road at Jullundur. The principal terms of the agreement were: (1). The Company shall furnish to the consumer a constant supply of electrical energy on and from the date on which "the premises shall be connected with the Companys distributing mains". (2) The Company shall draw the high tension and erect a new sub-station in the premises of the consumer. (3) The consumer guaranteed a minimum consumption of 1,60,000 units in two years and the Company agreed in that case to charge the plaintiffs at the rate of Re. -/1/3 per unit for all energy consumed on the new connection. (4) In case the plaintiffs failed to consume the guaranteed 1,60,000 units in the period of two years from the date of the agreement they were to pay to the Company the cost of 1,60,000 units at the stipulated rate of Re. -/1/3 per unit (5) The consumer was not to be at liberty, save with the consent of the Company, to determine the agreement before the expiration of two years from the date of commencement of the supply of the electrical energy. (6) The full supply under the agreement was to commence as soon as the sub-station required to be put was ready for use, but the Company was to arrange for as much load as was possible from the existing mains even prior to the erection of the sub-station.

3. The plaintiffs paid all the amounts which were due in respect of energy which was actually consumed. On the 19th June 1944 the Company addressed a communication (Exhibit P. 5) to the plaintiffs requesting the latter to arrange payment within a period of 15 days from the receipt of the letter of a sum of Rs. 7,424/12/3 in respect of 95,037 units of electrical energy less consumed by the plaintiffs up to the 8-1 1944 from the guarantee of 1,00,000 units. The plaintiffs objected to the payment of this sum, but as the Company threatened to cut off the supply under the provisions of Section 24 (4), Electricity Act, 1910, the plaintiffs sent a cheque, for the requisite amount on 23-1-1945 making it quite clear that the payment was being made under protest. On 5-3-1946 the plaintiffs brought the suit, out of which the appeal has arisen, for the recovery of a sum of Rs. 7,424/ 12/3 with interest at the rate of 6 per cent, per annum from the 24th January 1945 to the date of institution of the suit and future interest at the rate of 6 per cent, per annum from the date of institution of the suit till the realization of the amount. The trial Court having dismissed the plaintiffs suit, the latter have come to this Court in appeal, and the question for this Court is whether the Court below has come to a correct determination on points of fact and law.

4. The first and perhaps the most important point for decision is whether the Company was debarred) for the reasons mentioned in paragraph 11 of the plaint, from recovering the amount in question. I shall proceed to deal with each of these several grounds in seriatim:

5. The first ground is that the conditions about the minimum guarantee and the default were obtained by coercion and undue influence or threats of refusal to supply the energy. It is admitted that before the execution of the agreement on 10-3-1941 the plaintiffs were receiving electrical energy from the low tension mains of the Company. Sometime in the year 1940 they expressed a desire to obtain a larger quantity of electrical energy. As the increased demand could not be met f