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1960 Supreme(MP) 31
High Court Of Madhya Pradesh
H. R. Krishnan, Nevaskar and Shiv Dayal, JJ.
FIRM KISHANLAL SHRILAL PATWA - Appellant
Versus
UNION OF INDIA (UOI), RLY.ADMINISTRATION NOW NORTHERN RLY. - Respondents
First Appeal 41 Of 1955
Decided On : 01/22/1960
Dhodapkar, R.K.Zamindar, S.L.Dubey
Compensation for breach of contract can only be granted if the claimant proves that the loss or damage naturally arose in the usual course of things from the breach, or that the parties knew when they made the contract that the loss or damage was likely to result from the breach.
Headnote:
RAILWAYS ACT - SECTION 72, 73 - CONTRACT ACT - SECTION 161 - Compensation for deterioration of goods due to delay in delivery - Conditions for grant of compensation - Knowledge of parties at the time of contract - Whether price control order fixing price of gur was a foreseeable event.
Fact of the Case:
Plaintiff delivered a consignment of 'gur' to the Railway Administration for transport by public goods train. Due to delay in delivery, the consignment reached the destination 15 days later. During this period, the price of 'gur' fell from Rs. 32/- to Rs. 21/- per maund due to a sudden notification of price control by the Central Government. Plaintiff filed a suit for compensation for the depreciation in the value of the goods.
Finding of the Court:
The court held that the plaintiff was not entitled to compensation for the following reasons: 1. The fall in price was not a direct consequence of the delay in delivery. 2. The parties were not aware at the time of the contract that the delay in transport was likely to result in a sudden fall in price. 3. The price control order was a remote and indirect consequence of the delay, and the plaintiff had not satisfied the conditions for grant of compensation under Section 73 of the Contract Act.
Issues: 1. Whether the plaintiff was entitled to compensation for the depreciation in the value of the goods. 2. Whether the fall in price was a direct consequence of the delay in delivery. 3. Whether the parties were aware at the time of the contract that the delay in transport was likely to result in a sudden fall in price.
Ratio Decidendi: 1. Section 73 of the Contract Act governs all cases of a claim for compensation upon a breach of contract, including bailment contracts. 2. Section 161 of the Contract Act deals specifically with the responsibility of a bailee when goods are not duly returned, delivered, or tendered at the proper time. 3. Section 161 does not set out the general conditions for grant of compensation mentioned in Section 73, but it should be read as an expansion or illustration of the earlier section. 4. In order to be entitled to compensation under Section 73, the claimant must prove either that the loss or damage naturally arose in the usual course of things from the breach, or that the parties knew when they made the contract that the loss or damage was likely to result from the breach. 5. In the present case, the fall in price was not a direct consequence of the delay in delivery, and the parties were not aware at the time of the contract that the delay was likely to result in a sudden fall in price. 6. Therefore, the plaintiff was not entitled to compensation for the depreciation in the value of the goods.
Final Decision: The suit was dismissed, and the costs of the appeal were payable to the respondents by the appellant.
( 1 ) A difference of opinion having arisen between my learned brothers Shree Nevaskar J. and Shri Shiv Dayal J. as to whether compensation could be properly awarded to the plaintiff appellants in this case, a reference has been made to me. Both the judges have held that in regard to the delivery of a consignment of goods to the consignee plaintiff, the Railway Administration, defendant respondent, was guilty of misconduct by the delay of 15 days, beyond the time in which in due course of their busi-ness they should have delivered them. The suit is for compensation for deterioration by fall in market during this interval; on the actual depreciation on account of the fall in price, there is no difference of opinion.
( 2 ) THE difference is that, on the one hand Shri Nevaskar J. applying the principles contained in Section 73 of the Indian Contract Act, holds that the depreciation in the value of the goods was neither a direct consequence of the delay on the part of the administration, nor was a consequence which both parties to the contract knew to be likely. Accordingly on the basis of the interpretation of Section 73 of the Contract Act by different High Courts he decided that the plaintiff was not entitled to anything. On the other hand, Shri Shivdayal J. was of the view that once it is found that there had been a misconduct on the part of the administration, and the owner of the goods had suffered loss on account of the depreciation, he is entitled to damages whether or not there is a causal connection OB awareness of the parties at the time of the contract. There is also an indication in his judgment, that the sudden notification of price control in the present case, which resulted in the fall of price was not an unforeseen event but one which the parties could have foreseen. Accordingly he has held that the plaintiff appellant is entitled to compensation. But on the actual measure, if it can be awarded at all, there is no difference of opinion. The plaintiff himself had claimed a largest sum, but the Judges have found that the fallen price was 11 rupees (Rs. 32 -- Rs. 21) to the Maund and as the consignment was of 342 Maunds and 13 Seers, the compensation would be Rs. 3765/9/ -.
( 3 ) THUS, I am not called upon to deal at this stage, either with the question whether or not there was mis-conduct by delay in the delivery, or whether the plaintiff actually found that the market price had fallen from Rs. 32/- to Rs. 21/- a Maund between the 22-10-1950 when the consignment could have been delivered in due course of transport business, down to 21 rupees a Maund on 611-50, when it was actually delivered to the plaintiff. It is also a noncontroversial fact that this fall in the price was the immediate consequence of an order passed by the Central Government on 25-10-1950 controlling the price of "gur'' and fixing it at 21 rupees a Maund.
( 4 ) THE other relevant facts can be briefly stated. On 6-10-1950 the plaintiff delivered at the Railway Station Bharwari, on the erstwhile Eastern Railway in the Allahabad District of the U. P. , a consignment of 157 bags of 'gur' weighing 342 Maunds and 13 seers for transport by public goods train, at Ujjain station on the erstwhile G. I. P. Railway, The plaintiff's own notion was that it should ordinarily reach on the 17th October, 1950. When it did not, he was trying to contact the authorities concevned, and arrange somehow to get the consignment pushed on to Ujjain as early as possible, and even went to the extent of requesting the railway authorities to tell him where the wagon was actually lying, and permit him to take delivery there, and make his own arrangements for transport by truck to his place. The administration was unable to do this for the plaintiff, and the consignment actually reached Ujjain and was delivered on 6-11-1950.
( 5 ) IN the interval things were happening. 'gur' was an essential commodity for the purposes of the Essential Supplies (Temporary Powers) Act
