1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD SECOND APPEAL NO. 41 OF 1993 Bhimrao Namdeorao Jalkote, age: 68 years, Occ: Business, R/o Udgir, District Latur. Appellant Versus 1 Laxmi Enterprises, Oil Cake Suppliers, Nehru Gunj Road, Gulberga, through its partner Harinarayan Pusharam Gilda, age: 66 years, Occ: :Business; 2 Harinarayan Pusaram Gilda, age: 66 years, Occ: Business, R/o Gulberga (Karnatak State) 3 Jaikishan Harinarayan Gilda, age: 39 years, Occ: Business, R/o Nehru Gunj Road, Gulberga (Karnatak State) Respondents Mr.S.V.Warad, advocate holding for Mr.V.M.Warad, advocate for the appellant. Mr.S.S.Bora, advocate for Respondents No.1 to 3. CORAM: R.M.BORDE, J. DATE : 01st September, 2009. JUDGMENT: 1 This is an appeal by original plaintiff raising challenge to the judgment and decree dated 14th July 1992, passed by Additional District Judge, Latur in Regular Civil Appeal No.169 of 1984. 2 2 Plaintiff instituted Regular Civil Suit No.11 of 1976 seeking decree for recovery of amount of Rs.12494.82 towards damages along with interest @ 12% p.a. from the date of suit till realisation of the amount. The trial Court decreed suit presented by plaintiff and held plaintiff entitled to recover amount of Rs.12494.82 along with future interest @ 12% p.a. The judgment and decree passed by the trial Court has been modified by the first appellate Court whereby plaintiff is held entitled to recover only an amount of Rs.4182.80 along with interest @ 12% p.a. The claim raised by plaintiff in respect of recovery of amount of Rs.6377.74 with future interest came to be rejected by the first appellate Court. 3 Plaintiff carries on business as commission agent and general merchant at Udgir under the name and style as "Prabhurao Bhimrao & Company". According to him, defendant no.2 Harinarayan, father of defendant no.3 Jaikishan together constitute a joint Hindu family of which defendant no.2 is `karta'. They both carry on business in the name and style as "Laxmi Enterprises" i.e. defendant no.1. In the month of October 1974, plaintiff had offered to sell 100 metric tonnes of Neem fruit expeller cake to defendant no.1 After due negotiations, it was agreed between the parties that defendants shall purchase 100 metric tonnes of Neem fruit expeller cake @ Rs.480/- per tonne. In accordance with the terms of contract, defendants requested the plaintiff to dispatch two wagon load of goods to Kolluru Railway Station and to draw a `Hundi' on M/s Maruti Trading Company, Kolluru for the price against railway receipt. The plaintiff, as per the terms of contract, dispatched two wagon load of goods and drew a `Hundi' for Rs. 20,059.20 in the name of M/s Maruti Trading Company, Kolluru and sent railway receipts through bank. Defendants, however, refused to honour the `Hundi' and accept delivery of goods dispatched by the plaintiff. Plaintiff, 3 therefore, had to send his representative to Kolluru for arranging delivery. Ultimately, goods had to be sold in favour of M/s Maruti Trading Company @ Rs.400/- per tonne. Defendants were informed in respect of this development. According to the plaintiff, he could recover a sum of Rs. 16,660/- as against the amount of Rs.20,059.20, which was the price of the goods as per the contract entered into by the parties. Plaintiff, as such, suffered loss of Rs.4182.80 on account of breach of agreement committed by defendants. It is further case of the plaintiff that he was awaiting instructions for dispatch of consignment of remaining goods. He sought instructions repeatedly from the defendants for dispatching consignment of remaining goods, however, defendants failed to intimate. On the contrary, defendants instructed the plaintiff and sent contract form wherein one Laxmi Enterprises, Kolhapur was shown as a purchaser while defendant no.1 was described as a broker. The plaintiff, finding that the contract form is not in accordance with the terms agreed, sought explanation from the defendants. Plaintiff has also issued notice through his advocate to the defendants informing them about his readiness to dispatch the remaining goods as per the contract. Defendants responded to the notice and denied the contract entered into with the plaintiff. It is, however, contended by defendants in reply notice that they acted as brokers in settlement of contract between plaintiff and M/s Laxmi Enterprises, Kolhapur. Defendants also denied their liability to pay compensation or damages for having committed breach of contract with the plaintiff. The plaintiff thereafter waited for some period. The price of the goods at relevant time was crashing down. He had, therefore, to sell the goods at Akola market. In the process, plaintiff has suffered loss to the tune of Rs.6377.74. According to the plaintiff, defendants are liable to make good the loss. 4 4 Defendants appeared in the suit and resisted the contentions raised by the plaintiff. According to defendants, the firm M/s Laxmi Enterprises, Gulberga - defendant no.1 is a canvassing agent. In the month of October 1974, plaintiff made a telephonic call to M/s Laxmi Enterprises and informed that he had to sell 100 metric tonnes of neem fruit expeller cake and requested to find out a buyer. The terms of contract, as pleaded by the plaintiff in the plaint, have been denied by defendants. According to defendants, Laxmi Enterprises at Kolhapur was willing to purchase the goods. As such, it was informed accordingly to the plaintiff firm. Defendants have denied that they instructed the plaintiff to dispatch two wagon load of goods to Kolluru station and to draw a `Hundi’ in the name of Maruti Trading Company. According to them, there was no completed contract between plaintiff and M/s Laxmi Trading Company. They also contend that there was no contract of purchase of 100 metric tonnes of neem fruit expeller cake between plaintiff and defendants. Defendants, as such, prayed for dismissal of the suit. 5 The trial Court, after recording evidence of the parties, came to the conclusion that the plaintiff has proved his case and as such, granted decree in his favour. 6 So far as appeal presented by defendants, being R.C.A. No. 169/84 is concerned, same came to be allowed to the extent of recovery of amount of Rs.6377.74 and it has been held that defendants are not liable to pay said sum to the plaintiff. So far as decree, passed by the trial Court in respect of recovery of damages to the tune of Rs.4182.80, is concerned, same has been maintained by the first appellate Court. 5 7 In the instant appeal, plaintiffs are agitating refusal by the first appellate Court to confirm decree in respect of recovery of an amount of Rs. 6377.74. So far as claim raised by the plaintiff on account of breach of contract by the defendants in their refusal to accept goods dispatched to Kolluru is concerned, plaintiff's case in that regard for recovery of damages has been accepted by the first appellate Court. Therefore, said issue need not be gone into while considering instant appeal. The only question, that arises for consideration, is whether plaintiff is entitled to claim damages to the tune of Rs.6377.74 on account of loss sustained by him due to sale of goods at Akola. 8 While admitting instant Second Appeal, this Court has observed that grounds noted at Sr.Nos.5, 11 and 13 in the memorandum of appeal, involve substantial questions of law. Those are: (5) As a matter of fact, the appellant was entitled to receive the price of Rs.27,940.80 ps. at the rate of Rs.480/- per tonne as per the contract with the Respondents. Thus, he had suffered the loss of Rs.6377.24 in respect of the goods sold at Akola. (11) The appellant keeping the downward trend of the market in view and in order to mitigate the loss, sold the goods at Akola through the commission agent and suffered the loss of Rs.6377.74. The appellant suffered the loss mainly due to breach of contract by the Respondents and the learned Judge of the trial Court has rightly allowed the damages in respect of the goods sold at Akola. (13) The learned Judge of the appellate Court has committed error in holding that there is no proof of the prevailing price at Udgir and Akola in the relevant period. The goods were sold at Akola through the 6 Commission Agent and it was not necessary for the appellant to bring the proof of the fluctuating price every day from the date of breach of contract till the goods were sold in the open market. The observation of the learned Judge of the appellate Court to this effect is quite wrong, arbitrary and erroneous. The case of the appellant is fully covered by the provisions of Section 73 of the Contract Act. In view of the clear finding that there was contract which was broken by the Respondents, the learned Judge of the lower appellate Court ought not to have disallowed the claim of damages of the appellant in respect of the goods which were sold by him at Akola. 9 I have perused the judgments delivered by both the Courts below and heard argument advanced by learned Counsel for appellant. 10 It is the case of plaintiff, that although there was an agreement between the plaintiff and defendants in respect of purchase of 100 metric tonnes of Neem fruit expeller cake, defendants failed to purchase the goods at agreed rate. Plaintiff, on number of occasions, requested the defendants to issue instructions for delivery of the goods, which were kept ready by the plaintiff, however, defendants did not issue any instructions and, on the contrary, defendants have denied the contract itself. Plaintiff contends that after issuance of notice to the defendants, he waited for some time. He also found that the market in respect of goods was crashing down, as such, he had to sell the goods at Akola market. The plaintiff could not sell the goods at the agreed price and had to dispose of the commodity at lesser price and in this process, he has sustained monetary loss. It is contended by defendants that they are not liable to make good the loss for the reason that before disposing of the goods, it was incumbent upon the plaintiff to issue notice to the defendants, as contemplated by Section 54 (2) of the Sale of Goods Act. 7 Placing reliance on Section 73 of the Indian Contracts Act, it is urged that plaintiff has not made out case for claiming damages on account of failure of the defendants to purchase the goods from the plaintiff at agreed price. According to the defendants, the compensation, to which the plaintiff is entitled to, cannot be given for any remote or indirect loss or damages sustained by the plaintiff. It is contended by the defendants that the plaintiff himself is to be blamed for the loss sustained by him. He has waited unreasonably long duration even after finding that market for the goods at Udgir is crashing down. It is also contended that there was no justification for the plaintiff to sell the goods at Akola market. The plaintiff has also not placed on record what was the prevailing rate of commodity at Udgir between the period 12.10.1974 till 23.01.1975. In such situation, it is contended that the plaintiff is not entitled to claim damages. 11 On perusal of the reasons recorded by first appellate Court, it does transpire that plaintiff has failed to make out a case in respect of recovery of damages as claimed by him on account of failure of defendants to accept delivery of goods at agreed price. The plaintiff has made unreasonable delay even after finding that the market in respect of commodity is crashing down. He waited for three months to resell the remaining portion of consignment. Plaintiff cannot recover the entire loss sustained by him, but he can claim only difference between market rate and the rate prevailing on the date of breach. In order to ascertain the exact loss, it is incumbent upon the plaintiff to place on record comparative local rates of commodity at Udgir. However, in the instant case, plaintiff has not placed on record comparative local rates of the commodity at Udgir. He, on his own, chose to resell the goods at Akola in spite of the fact that market rate was falling down. In such situation, it cannot be said that plaintiff has made 8 out a case for recovery of damages from defendants. It was not possible for the Court to ascertain the exact quantum of damages in the absence of any evidence as regards prevailing rate of the commodity at Udgir. The first appellate Court, as such, was right in its approach in rejecting the claim raised by plaintiff in respect of damages to the tune of Rs.6377.74. It has been observed by the first appellate Court that provisions of Section 54 (2) of the Sale of Goods Act, are not attracted to the instant matter, as it has not been demonstrated that the commodity in question is a perishable commodity. It is only in the case where the goods are perishable, Section 54 (1) prescribes a precondition in respect of issuance of notice. In the instant matter, Section 54(2) of the Sale of Goods Act has no application. The view adopted by the first appellate Court cannot be said to be erroneous. There is no merit in the case put up by plaintiff-appellant. 12 In the result, appeal is dismissed. However, in the facts and circumstances of this case, there shall be no order as to costs. (R.M.BORDE) JUDGE ******* adb/sa4193