Appeals Nos 54 and 55 of 1957
Appeals from the judgment and decree dated March 11 1953 of the Judicial Commissioner s Court Rewa in First Appeals Nos 104 and 116 of 1952
B C Misra for the appellant
Tarachand Brijmohan Lal for the respondent
January 31
The Judgment of the Court was delivered by HIDAYATULLAH J
Mahabir Prashad Rungta appellant in these two appeals was plaintiff in his own suit and defendant in a counter suit filed by Durga Datt the respondent
The two appeals have been filed on certificates granted by the Judicial Commissioner Vindhya Pradesh against a common judgment and decree of the Judicial Commissioner s Court in four appeals filed by the rival parties two in each civil suit
Certificate was also granted to the respondent but he did not take steps in that behalf and we are therefore concerned only with the appeals of Mahabir Prashad Rungta
The two suits were filed in the following circumstances Rungta owns a colliery at Budhar in Madhya Pradesh
On October 30 1950 an agreement was executed between Rungta and the respondent Durga Datt
Durga Datt agreed to transport coal from the colliery to the railway station at the rate of Rs 2 8 0 per ton for a period of two years commencing from November 11 1950 to November 10 1952
That agreement is exhibit P 1
The case of Rungta was that Durga Datt broke the contract from July 29 1951 by stopping the work of transport
Durga Datt in his suit on the other hand averred that Rungta had 641 broken the agreement and work of carriage as a result was stopped from July 30 1951
The difference of a day between them is of no consequence
Rungta s case was that as a result of the breach of the contract on the part of Durga Datt he was required to employ other carriers and to pay them at Rs 3 per ton and he incurred demurrage and damages to his constituents for delay in supplies
He therefore claimed a sum of Rs 60000 as damages including Rs 20000 as general damages for loss of business credit and repu tation
He admitted that a sum of Rs 15087 5 0 was owed by him to Durga Datt on account of coal carried by the latter and he thus claimed Rs 44912 11 0 after allowing credit for that sum
Durga Datt in his suit asked for a decree for Rs 49544 12 0
This included Rs 26139 11 0 on account of arrears of bills and Rs 905 1 0 as interest on the amount
The balance Rs 22500 was claimed as damages for loss of business and profits of the unexpired period of the contract at Rs 1500 per month
In giving the particulars for Rs 26139 11 0 Durga Datt stated that he had transported 15844 tons 2 Cwts
of coal to the end of July 1951 which were loaded in the wagons and despatched
He also claimed Rs 7500 in respect of 3000 tons of coal which he had transported to the railway yard but which had not beed loaded in the wagons
After adjusting sundry amounts and allowing credit for Rs 21861 7 6 he claimed Rs 26139 11 0 as stated above
Durga Datt alleged that Rungta was guilty of breach of the contract particularly of cls
4 5 and 8 thereof which compelled him to rescind the contract
These clauses may be quoted here 4 Petrol  It will be arranged by party No 1 himself but party No 2 will help in time of need to get the petrol the expenses incurred by party No 2 for securing such petrol will be borne by party No 1
If party No 2 in spite of his best efforts cannot arrange for petrol then in such case party No 1 will not be responsible for any loss in regard to transportation of coal
642 5 Payment of Bills Party No 2 will make payment of Bills of party No 1 for actual despatch of coal on the 10th of the following months 8 The road will be kept in repair by party No 2
 The two suits were consolidated by the trial Judge and evidence was partly recorded separately and partly for the two suits together
The trial Judge held that the breach of the contract proceeded from Durga Datt and the suit of Rungta was decreed in the sum of Rs 12900 as damages due to him
In the other suit the trial Judge held that Durga Datt was entitled to a payment of Rs 26695 6 6 and a decree for Rs 13795 6 6 was passed in his favour after setting off the two amounts against each other
The rest of the claims in the two suits were dismissed
The parties were dissatisfied with the decrees and four appeals were filed
The learned Judicial Commissioner reversed the decision of the trial Judge
He held that Rungta was guilty of the breach of the contract because he had not made payments to Durga Datt as laid down by el
5 of the agreement and had not kept the road in repair
He ordered the dismissal of Rungta s suit in its entirety and reducing the amount decreed in Durga Datt s favour by Rs 918 6 0 for which there was a double charge he passed a decree for Rs 25113 4 0 awarding interest at 6 per cent
per annum on the amount from August 1 1951 till date of realisation
In these two appeals Rungta challenges a the dismissal of his suit for damages based on the finding that the breach proceeded from him b the inclusion of Rs 7500 in respect of 3000 tons of coal said to have been transported to the railway yard but not loaded in the wagons and c the award of and in the alternative the rate of interest
The main question in these appeals is who was responsible for the breach of the contract  The admitted position is that work stopped about the end of July 1951
Previous to the closure of work each party had written letters of protest to the other Rungta complaining that Durga Datt had slowed his work and he was suffering loss and Durga Datt 643 complaining that lack of arrangements for petrol failure to repair the road and the withholding of the money due to him were making it impossible for him to fulfil the contract
The trial Judge did not accept the case set up by Durga Datt and held that he had wilfully stopped work
The learned Judicial Commissioner on the other hand held that Rungta had unreasonably and in breach of the agreement withheld large payments and had left the road in a poor state of repair and thus caused the breach of the contract
He did not attach much importance to the controversy over the supply of petrol which controversy was not mooted before us again
of the two reasons on which Rungta was held responsible for the breach of the contract the important one was the withholding of payment
Learned counsel for Rungta contended that time was not of the essence of the contract and that in any case the payment of bills to Durga Datt depended upon the presentation of the bills in time
From the evidence it appears that when the trucks were loaded coal was not weighed
It was weighed at the bridge where the wagons were loaded details of which were either with the railway company or with the representative of Rungta at the station
Durga Datt was required to obtain the information from one source or the other before he could make his bills
How much coal was transported by Durga Datt was a fact also within the knowledge of Rungta and the clause quoted above merely provided for payment of the bills by the 10th of the following month without stating expressly that the presentation of bill was a condition precedent to the payment
The learned Judicial Commissioner held on both the points against Rungta and in our opinion rightly
Even if the presentation of the bills be regarded as a condition precedent to payment it is clear enough that Rungta paid not the whole of the amounts due under the bills but only small sums from time to time
Learned counsel for Rungta contended that Durga Datt by receiving such payments and by not insisting on his rights must be deemed to have waived payment in a lump sum under cl
But no case of waiver 644 was pleaded by him and the evidence if any cannot be looked into
In any event an examination of the accounts between the parties discloses that payments were in fact withheld
Under the agreement 10 per cent
of the bills was to be withheld to build up a security deposit of Rs 2000 and an amount in excess of this was withheld by the end of May No doubt the bills were not presented by Durga Datt at the end of each month bills for April and May were submitted on July 16 1951 and bills for June and July on August 6 and 12 respectively
Even so the indebtedness of Rungta to Durga Dutt stood as follows 16th July 1951 about Rs 7835 27th July 1951  Rs 6790 6th August 1951  Rs 11170 12th August 1951  Rs 15590 These sums were in addition to a security deposit of Rs 2038
Whatever might be the intent and purpose of the clause in question it is clear enough that Rungta was withholding substantial amounts over a very long period without any reasonable cause
To Durga Datt the receipt of money in time was a vital consideration if he was to fulfil his contract at all
It was not to be expected that he would go on carrying thousands of tons of coal from the colliery without receiving payments
In our opinion these facts speak for themselves and amply support the finding of the learned Judicial Commissioner that Rungta was really responsible for hamstringing the work of Durga Datt
Why Rungta did so is not very clear from the record of the case though an attempt was made to show that the quantity of coal transported from month to month was falling
An abstract of the quantities transported does not support this allegation
This abstract is of the quantity loaded in wagons
The figures are almost constant except in one month April
There were of course variations in the quantity of coal loaded in the wagons from month to month but the evidence shows that some coal remained at the siding in heaps and was not loaded immediately
The variation in the quantity also might have been due as much to Durga Datt as to the colliery and its output
In our judgment no 645 inference can be drawn from the abstract showing the quantities of coal loaded into the wagons that Durga Datt had slackened work after May Learned counsel for Rungta cited some cases in which time was not considered as of the essence of the contract
Most of these cases deal with immovable property where a different rule applies
In commercial transactions time is ordinarily of the essence and in the agreement with which we are concerned the payment of bills by a particular date was expressly mentioned
The intention obviously was that Durga Datt would receive payments for work executed as soon as the amounts became due
Rungta did not pay these amounts which were also within his own knowledge either by the 10th of the following month or even within a reasonable time after the presentation of the bills
In these circumstances we are of opinion that cl
5 was breached by Rungta
In addition to this there were difficulties of the road being in a bad state during the rainy season
The evidence shows that the wheels of the trucks used to sink in the mud frequently and the trucks had to be dragged out
For this state of affairs Rungta was mainly responsible under cl
The inclusion of the clause in the agreement itself shows that the parties realised that there might be hindrance to the trucks if the road was not repaired
The finding of the Judicial Commissioner on this part of the case is therefore  sound though that reason by itself might not have been sufficient for stopping the work altogether and rescinding the contract
The case is thus covered by section 55 of the Indian Contract Act and Durga Datt was entitled to rescind the contract when the very important condition of the agreement was broken by Rungta
We confirm the finding of the Judicial Commissioner on this part of the case
This brings us to the inclusion of Rs 7500 on account of 3000 tons of coal alleged to have been transported
The evidence on
this part of the case is somewhat unsatisfactory
Fortunately for Durga Datt some of the witnesses of Rungta admitted that besides coal 646 which was loaded in the wagons there were three large heaps of coal lying in the yard and that this coal was transported by Durga Datt
The estimate of Durga Datt was 3000 tons
That is no more than a mere guess
A railway official was examined in the case and he stated that loose coal was sufficient to fill  100 or 50 wagons 
From the schedule filed it appears that a wagon carries on an average 20 tons
Taking the number of wagons as 75 the quantity could not exceed 1500 tons
A sum of Rs 3750 as payment for 1500 tons at Rs 2 8 0 per ton ought to have been included instead of Rs 7500
To that extent the decree in favour of Durga Datt would be modified
There remains the question of interest
Interest for a period prior to the commencement of suit is claim
able either under an agreement or usage of trade or under a statutory provision or under the Interest Act for a sum certain where notice is given
Interest is also awarded in some cases by Courts of equity
Bengal Nagpur Railway Co Ltd vs Ruttanji Ramji 1
In the present case no agreement about interest was made nor was it implied The notice which was given did not specify the sum which was demanded and therefore the Interest Act does not apply
The present case also does not fall within those cases in which Courts of equity grant interest
Learned counsel for Durga Datt claimed interest as damages but it is well settled that interest as damages cannot be awarded
Interest up to date of suit therefore was not claimable and a deduction shall be made of such interest from the amount decreed
As regards interest pendente lite until the date of realisation such interest was within the discretion of the Court
The rate fixed is 6 per cent
which in the circumstances and according to the practice of Courts appears high
Interest shall be calculated at 4 percent
per annum instead of at 6 per cent and the decree shall be modified accordingly
Except for reduction in the amount decreed by Rs 3750 and of interest up to the date of the filing of the suit which has been disallowed arid of the rate of 1 1937 LR 65 1A 66
647 interest pendente lite until realisation the appeals shall stand dismissed
In view of the substantial failure of the appeals the appellant shall pay the costs in this Court
One hearing fee


Summary:
The workmen claimed bonus for the year 1956 equivalent to nine months  total earnings on the ground that the employers had admitted their capacity to pay and that there was a big gap between the wage actually received and the living wage
The employers contended that they were paying the workmen a living wage and they were not entitled to any bonus
The employers relying mainly on the Report of the Textile Labour Committee 1940 contended that if the living wage in 1940 ie Rs 55 was multiplied by 35 due to rise in prices it gave Rs 19250 as the living wage in 1956 and they were paying their workmen at a higher rate
The workmen relied on the recommendations of the Indian Labour Conference 1957 to show that Rs 20970 approximated to the standard of the need based minimum wage and that the average wage paid by the employers was nothing more than this
The Tribunal held that the wages paid were fair but that there was still a gap between the actual wage and the living wage and awarded bonus equivalent to five months  basic wages
Held that the employers had failed to establish that they were paying a living wage to the workmen
In construing wage structure the considerations of right and wrong propriety and impropriety fairness and unfairness are also taken into account to some extent
As the social conscience of the general community becomes more alive and active as the welfare policy of the State takes a more dynamic form as the national economy progresses from stage to stage and as under the
growing strength of the trade union movement collective bargaining enters the field wage structure ceases to be a purely arithmetical problem
Wages are usually divided into three broad categories the basic minimum wage the fair wage and the living wage
The concept of these three wages cannot be described in definite words is their contents are elastic and vary from time to time and from place to place
The concept of a living wage is not a static concept it is expanding and the number of its constituents and their 537 respective contents are bound to expand and widen with the development and growth of national economy
In an under developed country no wage structure could be described as reaching the ideal of a living wage
It is unreasonable and unsafe to treat the Report of the Textile Labour Committee 1940 as to the monetary value of the living wage in 1940 as sound
The figure reached by the committee in 1940 did not represent anything like a living wage it really represented the minimum need based wage
Besides the method of multiplying the figure by 35 was materially defective  the proper approach was to evaluate each constituent of the concept of the living wage in the light of the present day prices
Even the highest average wage paid by the employers was much below the standard of the living wage though it was above the need based minimum
Express Newspapers P Ltd vs Union of India  Standard Vacuum Oil Company vs Their Workmen  Burmah Shell etc Oil Companies in Madras vs Their Employees  Woykers of SVOC Ltd Standayd Vacuum Employees  Union vs Standard Vacuum Oil Co Ltd and Standard Vacuum Oil Company vs Their Employees  referred to
Burmah Shell Oil Storage and Distributing Co of India Ltd Bombay vs Their Workmen  approved
Quaeye Whether the workmen would be entitled to bonus even if a living wage is paid to them by the employers
Muir Mills Co Ltd vs Suti Mills Mazdoor Union Kanpur and Syee Meenakshi Mills Ltd vs Their Workmen   referred to