' NAZIR AHMAD BHATTI, J.--The weighment fee (octroi) of Godfrey Gunj Bazar Fund of the protected area of Malakand Agency for the year 1975-76 (from 7th December, 1975) was to be collected through auction and the same was put to auction on 5-12-1975 at Malakand under the supervision of Assistant Political Officer, Batkhela. The terms of the auction were advertised through auction notice issued in this behalf. The Godfrey Gunj Bazar is administered by the Political Agent, Malakand. Many persons took part in the auction proceedings but the final bid of Rs.7,20,000 offered by Bahadar Khan respondent herein was accepted and the earnest money of Rs.15,000 deposited by him before the auction proceedings was retained as security. The respondent took charge of realisation of the octroi money with the permission of the Political Agent and started collection of the octroi w.e.f. 7th December, 1975. However, on 20-12-1975 the appellants herein cancelled the contract of the respondent without any notice or other proceedings and the contract was given to one Dr. Muhammad Shoaib, who had offered to pay rupees nine lac as octroi duty.
The respondent, challeng ing this action as illegal, void, against natural justice, male fide and without jurisdiction filed a Writ Petition No.621 of 1975 in this Court but the same was dismissed on 26-4-1976. The respondent then filed a civil petition for special leave to appeal in the Supreme Court of Pakistan which was also dismissed on 11-4-1978, on the ground that the period of the contract had already expired. The respondent then instituted a suit on 28-5-1978 in the Court of Senior Civil Judge, Batkhela against the appellants herein for the recovery of rupees four lac as damages for wrongful cancellation of the contract. The respondent herein had mentioned in his plaint that if he had worked under the contract, he would have earned a profit of rupees four lac inclusive of the expenditure which he had incurred on litigation and compensation for mental torture. This suit was contested by the appellants herein and they submitted in their written statement that the contract had not been executed with the respondent herein but the offer of Dr. Muhammad Shoaib for rupees nine lac was accepted; and that the suit was time-barred and bad for non-joinder of necessary parties. The trial was held on the following issues:-
(1) Whether the plaintiff has got a cause of action? O.P.P.
(2) Whether the plaintiff is estopped from suing? 0 P D
(3) Whether the suit is bad for non-joinder of necessary parties? O.P.D.
(4) Whether the suit is within time? O.P.P.
(5) Whether no agreement was made between the plaintiff and the defendants and the contract between them was not approved, if so, its effect? O.P.D.
(6) Whether the plaintiff is entitled to the recovery of Rs.4,00,000 as damages as prayed for? O.P.P.
(7) Whether the contract was wrongly, illegally, with male fide intention and without jurisdiction cancelled by the defendants and was handed over to Dr. Muhammad Shoaib, if so, its effects?
O.P.P.
(8) Relief?
' The respondent-plaintiff produced one witness besides his own statement whereas only one witness appeared on behalf of the appellant-defendants. The learned Judge decided issues 1, 4, 6 and 7 in favour of the respondent-plaintiff and issues 2, 3 and 5 against the appellant-defendants vide his judgment, dated 25-11-1978 and granted a decree for recovery of Rs.2,80,000 as damages in favour of the respondent-plaintiff against the appellant-defendants with costs. Feeling aggrieved the appellant-defendants filed the present regular first appeal in this Court.
2. The learned Advocate-General appearing on behalf of the appellants has challenged the findings of the learned trial Judge on issues 5, 6 and 7. His contention was that no contract had been entered into between the parties and that the respondent-plaintiff had not suffered any loss.
3. The auction notice, Exh.P.W.1/1, shows that the contract for collection of weighment fee (octroi) of the Godfrey Gunj Bazar Fund for the year 1975-76 (starting from 7th December, 1975) was to be put to auction whereby the successful candidate in whose name the contract was to be auctioned was required to--
(1) sign an agreemen
(2) furnish a cash security of Rs.1,000 for due observance of the rules, and
(3) deposit two monthly instalments in advance at the time of auction which shall be counted for against the last two months instalments.
' This notice further specifies that the Political Agent, Malakand, who is Administrator of the Fund, reserved the right to refuse the highest bid without giving any reason. The document regarding terms and conditions of the contract, copy Exh.P.W.1/2,further shows that the Administrator, Godfrey Gunj Bazar Fund reserved the right to cancel the contract at any time on issuing 15 days prior notice. In obedience to the auction notice the auction proceedings were held on 5-12-1975. Ten persons, including the respondent-plaintiff, took part in the auction proceedings. The highest bid of Rs,7,20,000 was offered by the respondent-plaintiff which was submitted to the Political Agent, Malakand for approval by the Assistant Political Officer, Batkhela who supervised the auction proceedings. Letter, dated 8-12-1975 addressed by the Political Agent, Malakand to Commissioner, Malakand Division, copy Exh.P.W.1/6, shows that the former had accepted the bid and had requested the Commissioner to convey his approval. In the meantime on 7-12-1975 the respondent-plaintif was allowed to start collection of the octroi duty on the goods leaving or entering the limits of Malakand Agency protected area and he continued collecting the octroi till 19-12-1975. The record of the case shows that one Dr. Muhammad Shoaib submitted an application to the Political Agent stating that the persons who had participated in the auction proceedings on 6-12-1975 had formed a ring and through their mutual collusion had managed to secure the contract at comparatively lower rate and he offered rupees nine lac in lumpsum for the period in question. Upon this offer, the Political Agent wrote another letter on 10-12-1975 to the Commissioner, copy Exh.P.W.1/8, soliciting approval of the offer made by the said Dr. Muhammad Shoaib and this approval was conveyed by the Commissioner on 12-12-1975 by letter, copy Exh.P.W.1/9. It appears that upon the receipt of this approval the respondent-plaintiff was ordered to discontinue the collection of the octroi and also to pay the amount which he had already collected on account of the octroi. The aforesaid facts and circumstances would show that a proposal had been made for collection of the octroi in question by the appellants in lieu whereof auction proceedings were held, the proposal was accepted by the respondent-plaintiff by offering the highest bid and the same was also accepted by the Political Agent and approval of the Commissioner was sought, and in the meantime the respondent-plaintiff was allowed to start collection of octroi and he in fact continued to collect the same for 13 days. It shall thus be seen that a valid contract as envisaged by section 2 of the Contract Act, 1872 had come into existence between the parties. Contracts can be entered into orally or in writing. Although the auction notice specified that the highest bidder had to execute an agreement, yet the conduct of the parties would show that the acceptance in writing was only a formality and the contract had been validly entered into and was being acted upon. Even otherwise in the terms of the auction notice and by the terms and conditions of the contract, the Political Agent, Malakand was the final authority to accept or reject the contract. The approval of the Commissioner in this respect was only a formality and had no legal backing at all.
Both the aforesaid documents do not show that the approval of the Commissioner was a pre- condition for acceptance of the contract. In this respect, we may also refer to the rules for administration of the Godfrey Gunj Bazar Fund approved by the then Government of India on 25-6- 1934, according to which the authority for the administration of the Fund is the Political Agent, Malakand subject to any orders issued by the local administration regarding control etc. and the Fund shall be operated by the Administrator. It shall thus be seen that even under these Rules the auction of collection of this Fund was not subject to any approval by the Commissioner. We are, therefore, firm in our mind that a valid contract of auction of the Fund had taken place between the parties.
4. The next question is whether this contract was validly cancelled by the Political Agent. In this respect we would only refer to condition No.7 of the terms and conditions of contract, copy Exh.P.W.1/2. This condition allows the Administrator to cancel the contract at any time on issuing 15 days prior notice. It shall thus be seen that if the Administrator wanted to cancel the contract, he was bound to give a notice of 15 days to contractor. The terms and conditions of the contract show that the contract could be cancelled unilaterally and without assigning any reason by the Administrator but the only limitation on his power was a 15 days prior notice. As the Political Agent had the authority to cancel the contract, his action cannot be called to be mala fide but it was improper because he did not give a 15 days prior notice. We cannot hold that the Political Agent acted without jurisdiction, illegally and with mala fide intention, although he acted wrongly. We would, therefore, uphold the findings of the learned trial Judge on issues 5 and 7 but in the aforesaid terms.
5. As the contract had been broken by the Political Agent in a wrong manner, the respondent- plaintiff was entitled 4o claim damages under section 73 of the Contract Act, provided any loss or damage was caused to him by su2h breach. The fundamental question in this respect is the pecuniary loss naturally flowing from this breach. A cause of action for breach of contract would arise as and when the plaintiff had actually suffered damage. The amount of damages recoverable, as a general rule, is governed by the extent of the actual damage sustained in consequence of the breach of the contract. In case of admission of proof of such damage, the amount must be established with reasonable certainty and the damages must be appreciable, capable of being stated and of being established and in a suit for the recovery of damages for breach of the contract it is for the plaintiff to establish the extent of his suffering. The onus is on the plaintiff to produce best evidence to prove damages otherwise every presumption would be made against him. We would, therefore, scan the evidence produced in the case to see if the respondent- plaintiff had really suffered any loss and was he able to discharge the onus in this respect.
Appearing as P.W.2, the respondent-plaintiff stated that if the contract in dispute was not taken into possession by the appellant-defendants from him, then he would have earned rupees 11 or 12 lacs as a total of the octroi duty and would have earned a profit of rupees four lac. This much is the evidence which was produced by the respondent-plaintiff to prove the quantum of financial loss suffered by him by the breach of the contract. Dil Aram, Accountant of the office of Political Agent, appearing as D.W.1, has stated that by giving the contract to Dr. Muhammad Shoaib for rupees nine lac, the appellant-defendants have earned Rs.1,80,000.
' The main-stay of the learned counsel for the respondent-plaintiff was that the respondent- plaintiff had suffered this straight loss of Rs.1,80,000. Izzat Shah, Clerk in the office of the Political Agent, appearing as P.W.1, stated in reply to a Court Question that if a contractor offers rupees eight lacs, then he earns rupees two lacs or more in the contract. This much is the evidence produced by the respondent-plaintiff to prove the loss sustained by him by the breach of the contract and the learned trial Judge appears to have been swayed by this evidence in granting damages amounting to Rs.2,80,000 to the respondent-plaintiff. On the contrary, during the 13 days for which the respondent-plaintiff continued collection of the octroi under the contract, he realized a total amount of only Rs.26,000. This would show that the average collection of octroi per day was Rs.2,000. Thus the total amount of octroi for the period of one year in dispute would not be more than Rs.7,20,000.
6. The evidence produced by the respondent-plaintiff to prove the quantum of damages is neither convincing, nor of a reliable nature. In so far as the amount of rupees one lac out of the amount of damages granted by the trial Judge is concerned, that is only a bare opinion of the witnesses and it should not have been relied upon.
This opinion was not based on any solid ground or fact. Moreover the respondent-plaintiff had not actually invested any money in the performance of his part of the contract. His duty under the contract was to collect octroi for which he was not required to make any investment. As such the question that if he had invested eight lac rupees he would have earned a profit of two lac rupees becomes hypothetical and meaningless. As such the evidence of P.W.1 Izzat Shah would be of no help in calculating any loss suffered by the respondent-plaintiff. In so far as the offer of Dr. Muhammad Shoaib is concerned, we would also not give a serious consideration to that because the fact material for the determination of the actual loss is the amount which the respondent- plaintiff actually realised as octroi during the 13 days and that amount comes to Rs.2,000 per day.
The respondent-plaintiff failed to produce any positive and clear evidence of the actual amount of loss which was sustained by him during the entire period of the contract, whereas on the contrary there is the clear circumstance of actual recovery of the octroi under his own supervision. The onus to prove as to what loss he actually suffered by the breach of the contract was upon the respondent-plaintiff but he miserably failed to discharge that onus. The auction of collection of octroi at Rs.800,000 for the year prior to the year in dispute and the reduction of that amount by Rs.
80,000 for the year in dispute would further show that there was not much scope of profit in the bargain. We are, therefore, of the firm opinion that the respondent-plaintiff did not suffer any actual loss by the breach of the contract. We would, therefore, set aside the finding of the learned trial Judge on issue No.6 and would decide it in the negative.
7. As a net result of the above discussion we would accept this appeal, set .aside the impugned judgment and dismiss the suit of the respondent-plaintiff. However, there shall be no order as to