1. KHILJI ARIF HUSSAIN, J.--- The plaintiff filed suit for specific performance, declaration, recovery of damages and claimed a sum of Rs,97,353,328 as damages.
2. Brief facts for the purpose of deciding the suit are that the plaintiff, a registered partnership firm, entered into an agreement, dated 31-7-2004 with the defendant for two years, extendable mutually for further period and revocable at three months' advance notice, by which the defendant agreed to get Oil/Banaspati filled in the packing under brand name of the defendant and defendant has to pay labour charges at the rate of Rs,55 per maund on the basis of daily variation of rates of oil and other packing material. The plaintiff was required to charge oil processing charges separately. The defendant undertook to left minimum 15/20 trawlers per month (30 tons each trawler per month, equal to 600 MT which may exceed to 60 tons daily, equal to 1800 MT per month). From 11-10-2004 to 2-11-2004, the plaintiff delivered to the defendant oil and a sum of Rs,3,03,328 remained outstanding against the defendant. From mid of October, 2004 apparently the defendant refused to take delivery of goods from the plaintiff and further refused to pay the balance amount outstanding against the defendant. It is the case of the plaintiff that the plaintiff renovated his factory specifically for manufacturing and re-commissioning as per the demand of the defendant, after signing the agreement, by investing/spending huge amounts thereon, before the first consignment was delivered to defendant in early September, 2004. The plaintiff claims following amounts of damages:-- S. No, Details Amount (Rs,)
3. 1 Amount recoverable as balance outstanding303,328 2 Expected turn over of the business under agreement for one and half months w,e,f, October and November, 2004.4,50,00,000 3 Expected profit at the rate of Rs,5,00,000 per month w,e,f, 5+2.5750,000 4 Fixed charges w,e,f, salaries and allied expenses per month a @ Rs,2,00,0003,00,000 5 Amount already spent as incurred on goods under agreement5,00,000 6 Amount accruable a @ Rs,5,00,000 x 22 months1,10,00,000 7 Amount spent to re- commission/renovation of the factory at the demand of defendant25,00,000 8 Mental torture suffered by plaintiff as well as his family10,000,000 9 Physical agony suffered by plaintiff as well as his family10,00,000 10 Disturbance in family life due to losses50,00,000 11 Loss of respect in society 5,000,000 12 Personal reputation, which the defendant had damaged by levelling frivolous allegations in society10,000,000 13 Loss of business and good will5,000,000 14 Financial suffering (including Court expenses, professional fee of lawyers, travelling and miscellaneous expenses)1,000,000 Total 97,353,328 Notices/summons were issued to the defendant, but the defendant failed to appear and vide order, dated 13-2-2006, matter was ordered to proceed ex parte against the defendant.
4. The plaintiff filed affidavit in ex parte proof and produced photocopies of various pages of ledgers and delivery orders.
5. Heard Mr. Nisar A. Mujahid, learned counsel for the plaintiff, at length.
6. Mr. Nisar A. Mujahid, learned counsel for the plaintiff, vehemently argued that by an agreement dated 8-7-2004, which was valid for a period of two years, the defendant was required to get Ghee/oil filled in the brand name of defendant from the plaintiff at a specified rate. The defendant was required to lift 30 MT per month from the plaintiff and since the defendant failed to lift consignment, as agreed the plaintiff is entitled for damages for remaining period of the contract w,e,f, 22 months at the rate of Rs,5,00,000 per month being the profit which the plaintiff was expected to be earned from the contract in question. In support of his contention, the learned counsel for the plaintiff relied upon Chapter 17 "Remedies for breach of contract" from the book "Law of Contract" Eighth Edition by W.T. Major, wherein doctrine of "Ubi jus ibi remedium"
7. (whenever there is a right, there is a remedy) was discussed and it is stated that a breach of contract usually, but not always, causes a loss; in any event, there is a right of action against the contract-breaker. The learned counsel further argued that due to delay in payment the plaintiff is entitled for damages. Learned counsel for the plaintiff also relied upon a passage from the "Law on tort" Eighth Edition by J.A. Jolowics, where the learned author discussed general and special damages.
8. I have taken into consideration arguments advanced by Mr. Nisar A. Mujahid, learned counsel for the plaintiff, as well as perused the record.
9. Though the defendant is not represented, but while passing the decree it is the duty of the Court to see whether the plaintiff is entitled for the relief asked for and if so to what extent.
10. From the perusal of the agreement between the parties it appears that the agreement was entered into for a period of two years, which could be terminated by either party by giving three months' advance notice. Although according to the plaintiff the defendant has not served any notice for cancellation/termination of the agreement, but in paragraph 7 of the plaint it is stated that the defendant exposed his ulterior motive in the mid of October, 2004, when he refused to pay the balance amount. In the affidavit-in-ex parte proof the plaintiff has not stated anything new in support of his claim except reproducing the contents of the memo. Of plaint. Along with the affidavit-in-ex parte proof photocopies of ledgers and delivery orders have been produced. From Annexure "A/1", photocopy of the ledger, it appears that a sum of Rs,300,348 has been shown being the balance amount payable by the defendant. The plaintiff also produced documents in support of his claim amounting to Rs,3,03,328 but so far his claim pertaining to the amount already spent or incurred on the goods under agreement amounting to Rs,5,00,000, the plaintiff has not produced any document in support of the same and accordingly the plaintiff is not entitled for the said amount. As regards the plaintiff's claim, being the expected turn over of the business under agreement for 1-1/2 months, w,e,f, October and November, 2004, amounting to Rs,45,000,000, nothing has been brought on record that on what basis the plaintiff has calculated the said amounts and claim of expected profit on its amounting to Rs,7,50,000. No evidence has been brought on record that during the period when the contract was performed by the defendant how much profit the plaintiff has earned on it. The plaintiff deliberately not produced any evidence in this regard. It was not difficult for the plaintiff to place on record income-tax returns filed by him for period in, question to show that how much profit he had earned during the period when the contract was performed by the defendant. As regards the claim of Rs,3,00,000, being the fixed charges of salaries and allied expenses and Rs,5,00,000 spent on purchasing the goods under the contract, the plaintiff has not produced any evidence in support of the same. The plaintiff claimed a sum of Rs,11,000,000, being the expected profit at the rate of Rs,5,00,000 for remaining 22 months.
11. Admittedly the agreement between the parties was a revocable agreement with an advance notice of three months and at best, if the plaintiff was entitled for damages, he can claim damages from the date when the defendant refused to perform his part of obligation, for three months and not for 22 months, as claimed by him. Another question, which requires consideration is, if the plaintiff is entitled for damages for three months, then at what rate he is entitled for. The plaintiff claimed a sum of Rs,5,00,000, being expected profit per month, again there is no supporting evidence, in the absence of which it is not possible to grant relief as the plaintiff himself has failed to place on record evidence that in the like trade one can expect profit of Rs,5,00,000 in a month.
12. The plaintiff claimed a sum of Rs,25,00,000, being the amount spent on re- commissioning/renovation of the factory on the demand of the defendant, but again no evidence has been produced by the plaintiff that what machinery plaintiff purchased or what renovation plaintiff carried out during this period of time and that too at the request of the defendant. As regards the claim of mental torture Rs,10,000,000, physical agony Rs,1,000,000, disturbance in family life due to losses Rs,5,000,000, loss of respect in society Rs,5,000,000, personal reputation, which the defendant had damaged by levelling frivolous allegations in society Rs,10,000,000, loss of business and goodwill Rs,5,000,000 and financial suffering (including Court expenses, professional fee of lawyers, travelling and miscellaneous expenses) Rs,1,000,000, in my view in the commercial contracts damages in terms of section 73 of the Contract Act can be granted only to the extent of actual losses suffered by the parties due to breach of the contract and the plaintiff is not entitled for mental torture, physical agony, etc. Such damages may be granted in an action under Tort.
13. For the foregoing reasons the plaintiff's suit is decreed for the sum of Rs,303,328 with interest at the rate of 12% per annum from the date of filing of the suit till realization with costs.