Case: Union of India Vs. Steel Stock Holders' Syndicate, Poona

2, 974/2/- as claimed by the plaintiff could not be allowed in the absence of there being any contract justifying the charging of such interest. This Court was not at all concerned with a case like the present one where the plaintiff has merely claimed damages pure and simple and in order to assess the same had applied the yardstick of charging interest at a particular rate on the locked up capital for a period of more than six months. In these circumstances, therefore the ratio of the aforesaid decision in Watkins Mayore &Company (supra) is not applicable to the facts of the present case.Similarly in Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji which was relied upon by this Court in Watkins Mayore &Company (supra) the amount claimed by the plaintiff was a specified amount on the basis of which interest was charged which had the effect of increasing the damages sought for. That was a case of a contractor who had brought a suit for recovery of the amount due from the Government Department and had added interest to the total claim made by the plaintiff. The Privy Council pointed out that as there was no stipulation which authorized the plaintiff to charge interest on the quantified amount of damages, the plaintiff was not entitled to any interest. Thus, in other words, the ratio of the decision in Ruttanji Ramjis case as also in Watkins Mayore &Company (supra) would apply only to such cases where interest by way of damages is claimed for wrongful detention of a debt or where the interest is claimed on a specified amount due or claimed against any debtor. The principle adumbrated in the two cases mentioned above will not apply to cases where the plaintiff does not claim interest on a quantified amount or on damages but where the plaintiff merely calculates interest as a yardstick or measure to assess t he damages which he would be entitled to. In the instant case the Courts below have clearly found that the plaintiff had deposited a sum of Rs. 27, 332-44 in the Bank soon after booking the consignment with the railway administration. The plaintiff was a stockist and as the money in the Bank remained idle for a period of more than six months due to the delayed delivery made by the Railway on account of its negligence, the plaintiff merely claimed compensation for this delayed delivery on the basis that if the amount was not locked up it would have earned some interest which would yield some profit to the plaintiff. Thus it is clear, therefore, that in the instant case the plaintiff neither claimed interest on any quantified amount, nor did he claim profit due to loss of market.In Digbijai Nath v. Tirbeni Nath Tewari a Division Bench of the Allahabad High Court, while interpreting the decision of the Privy Council referred to above, observed as follows:"We do not consider that this case is authority for the proposition that interest cannot be claimed by way of damages for breach of a contract under s. 73, Contract Act. All that was held in it was that interest cannot be allowed by way of damages for wrongful detention of debt. * * * The position is different where interest is claimed as part of the damages for breach of a contract.A similar view was taken by a Division Bench decision of the Patna High Court in The Official Receiver, Calcutta High Court and another v. Baneshwar Prasad Singh and another. We find ourselves in complete agreement with the principles laid down in those cases."13. For these reasons, therefore, we are of the opinion that the decision of this Court in Watkins Mayore &Company (supra) does not appear to be of any assistance to the appellant, so far as the facts of the present case are concerned. Thus it is clear that there is no of the Interest Act, because in the instant case the Interest Act has no application at all inasmuch as no interest is claimed by the plaintiff at all but interest has been used as a measure to determine the compensation which the plaintiff could seek against the appellant for its negligence in causing inordinate delay in the delivery of the goods. The contention raised by the learned Solicitor-General on this point is, therefore, overruled.14. The plaintiff is not claiming the sum decreed by way of interest but he is claiming the damages calculated on a particular basis. As a common carrier the Railway is undoubtedly responsible for breach of contract. In the instant case the Railway Receipt shows that the goods were booked to be carried from Bhillai to Poona which is on the Nagpur route. There was absolutely no reason nor any occasion for the Railway to divert the goods to a different route and for taking the same to a different route and for taking the same to Aurangabad which did not fall on the route to Poona at all. The Courts below, therefore, rightly found that the Railway was guilty of gross negligence.The last quest ion submitted by the learned Solicitor General was that the plaintiff was not entitled to loss of profit or loss of market, because the plaintiff has not pleaded anywhere that he had obtained any permit for the goods which, were a controlled commodity and sustained loss of market. It is true that the plaintiff has not pleaded this fact, but the plaintiff has not at all prayed for any damages on the ground of loss of market or loss of profit. The plaintiff has only claimed nominal damages for the loss which occurred to him because of the amount of money which he had deposited in the Bank and was locked for more than six months due to the delayed delivery. The Trial Court has already scaled down the amount from Rs. 2, 378-65 to Rs. 1, 250/- and we think the Trial Court was fully entitled to do so.15.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We are, however, unable to accept this argument. It is well settled that while the Indian Contract Act merely provides certain elementary conditions under which the contract becomes binding on the parties, it does not provide any particular form or condition of a contract. It is, therefore, clear that the parties to the contract may agree to a particular form or condition or of mode in which the contract is to be executed. In case where the Government enters into a contract with a person or vice versa a particular form in which the contract is to be executed has been provided for even by the Constitution and the contract has to be in that form.This does not mean that the provisions of the Contract Act stand superseded either by the Constitution or by the Railways Act which provide for a particular mode or a form in which the contract has to be entered into. Section 72 therefore does nothing more or nothing less than provide for a particular form in which the contract is to be executed and it enjoins that such a form will be prescribed by the railway administration and approved by the Centralthese circumstances, therefore, according to the plaintiff itself, the breach occurred only after the new Act had come into force-whether it was January 1, 1962 or thereafter. There can be no question of the liability arising when the goods were booked and the contract was entered into between the plaintiff and the Railway, because there is no presumption that the contract would result in breach. The plaintiff would be entitled to damages only when t here was a breach of contract and if the said breach, even according to the plaintiff itself, occurred on January 1, 1962 or thereafter, then it is manifest that the case would be covered by the new Act and not by the old Act.The first contention put forward by the Solicitor General was that the case of the plaintiff does not fall under any of the contingencies contemplated by s. 76 of the newthese circumstances, the case of the plaintiff does not fall within the four corners of s. 76, nor does it fulfill any of the categories mentioned therein. If s. 76 does not apply to the facts of the present case, then s. 78 will also have no application, because s. 78 starts with a non obstante clause "Notwithstanding anything contained in the foregoing provisions of this Chapter, a railway administration shall not be responsible". We, therefore, agree with the learned counsel for the respondent that under the new Act the liability of the Railway has been increased so as to take upon itself the responsibility of a commonthese circumstances, therefore, with due respect, we are unable to agree with the somewhat broad view taken by the Allahabad High Court and followed by the Orissa High Court in the cases referred to above. We, on the other hand, prefer to adopt the view taken by the Lahore High Court in the case referred to above. In this view of the matter, it is clear that the word "deterioration" used in s. 76 referred to the physical and actual deterioration of the goods which has admittedly not taken place in the present case. The plaintiff cannot take advantage of s. 76 relying on the word "deterioration" because of the finding of negligence entered by the Courts below. The case of the plaintiff is clearly taken out of the ambit of ss. 76 and 78 and his suit for damage also cannot be defeated on the ground that it is barred by s. 76 or s. 78 of the new Act. We are, therefore, of the opinion that in vie w of the finding of fact arrived by the Courts below the plaintiff is undoubtedly entitled to damages.This brings us to the second contention raised by the Solicitor General, namely, that the plaintiff is not entitled to interest as damages for breach of the contract. It was submitted that what the plaintiff has done is to calculate interest at the rate of 12% which has been reduced to 6% per annum on the amount deposited by him in the Bank which remained locked up for more than six months and to claim the same as damages. It was contended that the plaintiff plainly could not do so in view of the Interest Act under which interest can only be charged before suit if so stipulated by the parties to the contract. It is common ground that in the present case the contract between the parties does not provide for charging any interest for breach ofplaintiff is not claiming the sum decreed by way of interest but he is claiming the damages calculated on a particular basis. As a common carrier the Railway is undoubtedly responsible for breach of contract. In the instant case the Railway Receipt shows that the goods were booked to be carried from Bhillai to Poona which is on the Nagpur route. There was absolutely no reason nor any occasion for the Railway to divert the goods to a different route and for taking the same to a different route and for taking the same to Aurangabad which did not fall on the route to Poona at all. The Courts below, therefore, rightly found that the Railway was guilty of gross negligence.The last quest ion submitted by the learned Solicitor General was that the plaintiff was not entitled to loss of profit or loss of market, because the plaintiff has not pleaded anywhere that he had obtained any permit for the goods which, were a controlled commodity and sustained loss of market. It is true that the plaintiff has not pleaded this fact, but the plaintiff has not at all prayed for any damages on the ground of loss of market or loss of profit. The plaintiff has only claimed nominal damages for the loss which occurred to him because of the amount of money which he had deposited in the Bank and was locked for more than six months due to the delayed delivery. The Trial Court has already scaled down the amount from Rs. 2, 378-65 to Rs. 1, 250/- and we think the Trial Court was fully entitled to do so.