IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN WEDNESDAY, THE 10TH NOVEMBER 2010 / 19TH KARTHIKA 1932 AS.No. 8 of 2000(B) ---------------------------- OS.NO.39/1995 of SUB COURT, KOTTARAKKARA .................... APPELLANTS/DEFENDANTS: ------------------------------------------ 1. R. ASOKAN PILLAI, AGED 38 YEARS, AZHAKATHU PUTHEN VEEDU, DANUVACHAPURAM, UDAYANKULANGARA, NEYYATTINKARA. 2. MURALEE MOHAN, S/O.JANARDANAN VAIDYAR, AGED 33 YEARS, KRISHNA BHAVAN, THOLICODE, PUNALUR. BY ADV. SRI.T.S.RAJASENAN, SRI.G. BENOY. RESPONDENT/PLAINTIFF: -------------------------------------- VARGHESE JOSEPH, AGED 38 YEARS, PONTHAMALA PUTHEN VEEDU, MANIYATTUKARA, PUNALUR, REPRESENTED BY MUKTHYAR AGENT JOSEPH VARGHESE, AGED 67 YEARS. BY SRI.V.N.ACHUTHA KURUP, SENIOR ADVOCATE THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 10/11/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs AS.No. 8 of 2000(B) ORDER ON C.M.P.NO.4534/2000 IN A.S.NO.8/2000 CLOSED ORDER ON C.M.P.NO.2528/2000 IN A.S. NO.8/2000 DISMISSED 10/11/2010. SD/- M.N.KRISHNAN, JUDGE //TRUE COPY// P.A. TO JUDGE rs M.N. KRISHNAN, J. ........................................... A.S.NO.8 OF 2000 ............................................. Dated this the 10th day of November, 2010. J U D G M E N T This is an appeal preferred against the judgment and decree of the Subordinate Judge, Kottarakkara in O.S.No.39/1995. The suit is one for damages. The plaintiff has claimed damages of Rs.1,08,500/= and the trial court has granted a decree for Rs.30,572/=. It is against that decision, the defendants have come up in appeal. 2. Heard the learned counsel for the appellants as well as the respondent. The brief facts necessary for the disposal of the appeal are stated as follows: It is the case of the plaintiff that he and the defendants had entered into an agreement on 13.4.1994 with respect to a machinery and retreading of the tyre business in the premises which belonged to the plaintiff. According to the plaintiff, the stipulation is that the defendants have agreed to purchase the machinery for a sum of Rs.1,05,000/= on or before 5.5.1994 and in breach, the plaintiff is entitled to claim damages of Rs.50,000/= apart from amount required : 2 : A.S.NO.8 OF 2000 for the repair of the machinery. There is also a stipulation that if the amount is paid by the defendants, it shall be paid then and there to the Kerala Financial Corporation towards the discharge of the liability. It was also agreed to pay Rs.25/= as licence fee per day for using the premises. According to the plaintiff, the defendants had committed the breach and therefore, the plaintiff is entitled to the amount claimed. 3. On the other hand, the defendants would contend that they have not executed the agreement dated 13.4.1994. According to them, there was an agreement in the year 1993 which is Ext.B1 between the father of the plaintiff and the defendants and it was in pursuance of the same, they were running the retreading company. It is also stated that when a request was made for transfer, it was stated that without discharging the liability of the Kerala Financial Corporation it cannot be done and therefore, had obtained signatures in blank papers and had utilised the same for creation of Ext.A1 document and has filed a suit of this nature. : 3 : A.S.NO.8 OF 2000 4. In the trial Court, PWs 1 to 5 and Dws1 and 2 were examined. Exts.A1 to A 12, B1 to B3 and C1 to C4 were marked. On an analysis, the trial court granted a decree for Rs.30,572/=. 5. Now the first thing is regarding execution of Ext.A1 agreement. It is the specific case of the plaintiff that the defendants had entered into Ext.A1 agreement and one of the witnesses to Ext.A1 agreement is his father who had been examined as PW1. The court below also considered the matter in detail and held that the defendants are educated young people and they would not have signed any blank papers and it is also to be stated that they continued to be in possession of the premises. Ext.B1 agreement also fixes the rate of the machinery at Rs.1,05,000/=. So from the attending circumstances as held by the court below it has to be held that Ext.A1 agreement is executed by the defendants in favour of the plaintiff. 6. The next question is regarding the breach of contract. As per the stipulation in Ext.A1 the defendants were obliged to pay a sum of Rs.1,05,000/= on or before : 4 : A.S.NO.8 OF 2000 5.5.1994. There was also a condition that the moment the amount is paid it will be paid to the Kerala Financial Corporation towards the discharge of its liability. It was also agreed upon that the defendants would pay Rs.25/= per day as the licence fee. The peculiar conduct of the defendants surprisingly is that they had used the premises and they had used the machinery but they did not pay even one rupee as licence fee or did they pay any consideration towards the value of the movables namely the machinery. Irrespective of the question whether the defendants pay it or not, the liability to the Kerala Financial Corporation will remain in tact. 7. In a case of damages, it is imperative on the part of the plaintiff to prove how he had sustained the damages irrespective of the fact that a large amount is shown in the agreement. The theory behind it is the principles of equity and unjust enrichment that does not enable any person to benefit out of a transaction. Here so far as the first aspect of Rs.7,500/= is concerned i.e, regarding the licence fee they had been using the premises for 10 months, the court : 5 : A.S.NO.8 OF 2000 below was perfectly justified in granting that amount. Again the court granted a sum of Rs.8,072/= towards damages which the plaintiff had sustained on account of payment of interest to the Kerala Financial Corporation. 8. The learned counsel for the appellants would submit before me that irrespective of the question of payment by the defendants it was the plaintiff who had taken the loan and he had obligation to pay the amount to the Kerala Financial Corporation. It is true. But it has to be understood that right from Ext.B1 onwards since the plaintiff could not manage to deposit the amount, he had entered into an agreement with the defendants and the defendants had paid a paltry amount of Rs.250/=, caught hold of the machinery as well as premises and ultimately on 5.5.1994 also they did not pay any amount which later resulted in the Kerala Financial Corporation acting against the industry and closing the establishment. What the trial court has done is only to pay the damages in between the period of 13.4.1994 to 1.7.1994 and directed that interest to be paid. By no stretch of imagination it can be said to be higher or : 6 : A.S.NO.8 OF 2000 improper. 9. Lastly to the question of damages. The period of agreement is only for 3 weeks. The amount of damages shown is Rs.50,000/=. It is absolutely disproportionate when considering even the value of the machinery. Value of the machinery is only Rs.1,05,000 whereas damages for breach is fixed at Rs.50,000/= immediately three weeks after the execution of the agreement. So in these type of cases it is imperative on the part of the plaintiff to prove with evidence regarding the damages sustained. But unfortunately materials are not forthcoming in that regard. The trial court has given damages of Rs.15,000/=. This Court sitting in the appellate jurisdiction have its own guess in the absence of materials and so I reduce it by Rs.5,000/= and make the damages as Rs.10,000/= considering that the period was too short. 10. Therefore from these discussions I hold that the plaintiff is entitled to the decree but the amount has to be reduced by Rs.5,000/=. Therefore a revised decree is passed as follows: : 7 : A.S.NO.8 OF 2000 The plaintiff is given a decree for realisation of Rs.25,572/= with 12% per annum from the date of suit till realisation from the defendants and their assets. The defendants are also restrained by a permanent injunction from using the plaint A schedule machinery or removing them or forcibly entering into the building of the plaintiff. Considering the facts and circumstances of the case, I direct the parties to bear their respective costs in the appeal. Disposed of accordingly M.N. KRISHNAN, JUDGE. cl : 8 : A.S.NO.8 OF 2000 M.N. KRISHNAN, J. ........................................... A.S.NO.8 OF 2000 ............................................. 10th day of November, 2010. J U D G M E N T