' The facts of the case are that on 7-2-1982 the plaintiffs invited tenders for purchase of "10,000 metric tons of steam coal for prompt shipment". The particulars of the coal required and the terms and conditions of the offer were contained in the plaintiffs' tender document. The defendant, a company incorporated in the United States of America, submitted the lowest tender and its offer was accepted. The price quoted by the defendant through its local agent. Pakistan Industries Limited, was U.S. $ 117 per ton.
2. Thereafter, breach was committed by the defendant as the goods could not be supplied by it.
Consequently, the plaintiff claimed damages amounting to Rs,32,53,758.
3. The matter was ultimately referred to arbitration and Mr. Justice (Retd.) Dorab Patel and Mr. Nizam Ahmed Advocate were nominated as Arbitrators by the plaintiff and the defendant respectively.
4. Therefore, both the arbitrators gave a unanimouns Award, dated 12-11-1986, for Rs,3,43,549 which included Rs,3,02,445 as cost of the Import Licence fee incurred by the plaintiff and Rs,41,104 which were paid by the plaintiff to M/s. Muslim Commercial Bank for opening of the letter of credit.
5. Since the commission of the breach of the contract by the defendant was not denied by the latter, the plaintiff claimed damages on the basis of the difference between the price of coal and its market price on the date of the breach of the contract. In this regard, the plaintiff had placed reliance on quotations received from two dealers viz. F.H. Nagi and Transocean Asia Limited. The former had offered coal at U.S.$ 163 and 160 per ton whereas the latter offered the same for U.S. 141 per ton. Consequently the plaintiff claimed U.S.$ 24,000 (equivalent to Pak. Rs,27,95,232) as damages and a further amount of Rs,4,58,526 as special damages.
6. Although the arbitrators concluded that breach had been committed by the defendant, but they were of the view that the onus to establish the market price of coal at the time of the commission of the breach was on the plaintiff which had not been discharged. The damages, according to them, could not be proved by mere production of the said two quotations in evidence. In the final analysis the arbitrators were of the view that since the market price of coal at the time of the breach could not be established by the plaintiffs, no damages could be awarded to them on such basis. However, some compensation was awarded to the plaintiffs by the arbitrators as pointed out earlier.
7. It is pertinent to point out that none appeared on behalf of the defendants when the matter came up for arguments before this Court on 7-4-1989.
8. Mr. Mansoor-ul-Arfin, learned counsel for the plaintiffs has argued that assuming that sufficient evidence in regard to the market price of the coal at the time of the breach had not been placed by the plaintiffs before the arbitrators, the plaintiffs were still entitled to nominal damages. Reliance in this respect was placed by the learned counsel on Jag Mohandas Vurji Wandas v. Nusserwanji Jehangir Khambata (I.L.R. 26 Born. 744), Hajee Ismail & Sons v. Messrs Wilson & Co. (I.L.R. 41 Mad.
709) and West Pakistan Industrial Development Corporation, Karachi v. Aziz Qureshi (1973 SCMR 555).
9. In the first case, on 21-10-1899 the defendant contracted to deliver to the plaintiff at Bombay 1,000 tons of coal by January to May shipments, 200 tons to be supplied each month. The first shipment was due in middle of February. The defendant failed to deliver any of the coal and the plaintiff did not purchase any coal against the defendant's contract. The plaintiff then sued for damages for the alleged breach of contract. The only question was as to the mode of assessing damages. There was practically no coal in Bombay of the description contracted for on the dates on which delivery should have been given and consequently no market rate could be proved. At the hearing, the plaintiff produced a statement showing the rates at which they had, during the contract period, settled certain contracts for the coal. It was held that under the special circumstances of the case, and in the absence of any evidence as to market rate, the figures given in the statement might properly be received in evidence for the purpose of fixing the actual value of the coal on the dates of the breach, thus affording a measure of the damages suffered.
10. In the Madras case, the defendants agreed to sell certain quantity of molasses to the plaintiffs by monthly instalments and failed to deliver one of the instalments assigning as a reason the difficulty of obtaining freight. The plaintiff did not purchase other molasses against the contract and there was no market for the goods at the place of delivery. The plaintiffs, who were not found to have incurred any actual loss from the non-delivery sued the defendants for the breach of the contract. They were awarded damages by the Court. It was held that the plaintiffs were entitled to damages as the case fell within illustration (a) of section 73 of the Indian Contract Act which lays down that the measure of damages in a case like this is the sum by which the contract price falls short of the price for which the purchaser might have obtained goods of like quality at the time when they ought to be delivered.
11. I would like to point out that the facts of the two cases just referred to by me are somewhat distinguishable from those of the present case. In the Bombay case the damages were assessed by the Court on the basis of the statement prepared by the plaintiff itself showing the rates at which the price of coal was settled with the Bombay company in view of the absence of the market rate. Jenkins, C.J., therefore, accepted that as the evidence of the actual value. Consequently, although no exact measure was available before the Court, but the statement was relied upon to give to the plaintiff a fair compensation for the loss suffered by him. Similarly, in the Madras case the measure of damages was determined, thus:- "On the other hand, looking at the evidence as a whole, and especially at Exhibit G-1, I think there is evidence from which I am justified in concluding that the hypothetical value of 800 tons in Madras at the end of November must have exceeded the c.i.f. Contract price by not less than Rs,5,000. It is very likely that the figure would be higher if all the evidence were before us, but we are agreed that sum may safely be awarded on the evidence before us. I would accordingly allow the appeal and increase the damages to Rs,5,000."
12. The difficulty in the present case is that the only evidence produced by the plaintiff is the two quotations, reference to which has been made earlier. No doubt, the third quotation for the supply of identical coal had also been received by the plaintiff from the defendant itself and the price quoted by the defendant was U.S.$ 125 per metric ton but even the learned counsel for the plaintiff conceded that none of such evidence could fairly be relied upon by the arbitrators for assessing the measure of damages at the time of the breach of the contract. However, according to him, the third case relied upon by him, reported in 1973 SCM R 555, fully supports his contention.
13. In this case, the respondent was appointed sole distributor for all the products of the appellant's woollen mills. Subsequently the offer of appointment was unilaterally withdrawn by the appellants.
The respondent then instituted a suit in the then High Court of West Pakistan for recovery of Rs,2,00,000 as damages. The suit was decreed for Rs,40,000. The Letters Patent Appeal filed by the appellants against the decree was dismissed. The matter then went before the Supreme Court and the Court while proceeding on the premises that breach of the contract had been committed by the appellants and the appellants by virtue of sections 203, 204 and 205 of the Contract Act were liable to make compensation to the respondent, then went on to hold as follows:- "Compensation is payable for the actual loss or damage caused, the loss or damage must he the proximate result of the breach, and foreseeable by the defendant. In estimating the loss or damage, the means which existed of remedying the inconvenience caused by the non- performance of the contract must be taken into account. Speaking generally the underlying principle is restitution in integrum. There is no specific rule upon the matter, and it is left to the good sense of the Court to assess as best it can what it considers to be an adequate recompense for the loss suffered by the plaintiff. Every injuria, although without loss or damage, would entitle the plaintiff to judgment. If is not always necessary that actual damage should be proved in order that damages may be awarded. In actions for breach of contract nominal damages are recoverable although no actual damage can be proved."
14. Salahuddin Ahmed, J. Who delivered the judgment of the Supreme Court, while quoting from Halsbury's Laws of England (Hailsham), Second Edition para 101, has observed:- "The best statement as to the meaning and incidence of nominal damages is given by Lord Halsbury L.C. In the Mediana where he said:- `Nominal damages' is a technical phase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though gives you no right to any real damages at all, yet gives you a right to the verdict or judgment because your legal right has been infringed."
The quotation further runs:- "There are a very few scattered illustrations of this type of nominal damages. This paucity of case- law warrants the inclusion of Dixon v. Deveridge, although it was an action for the price of goods sold and delivered and not strictly, therefore, an action for damages. In that case there was evidence which went to show that some amount was due from the defendant, but nominal damages were awarded since the plaintiff did not give evidence as to what the amount was. And in Twyman v. Knowles an action by the plaintiff lessee against the defendant for trespass to land, it appeared that five days after his trespass the defendant had obtained a lease of the property from the plaintiff's lessor. In the absence of evidence of the duration of the plaintiffs lease, it being admitted that the fee was in some third party, the jury concluded that the plaintiff's lease only lasted till the date of the defendant's lease and awarded nominal damages."
15. It may be pointed out that the dictum laid down by the Supreme Court in 1973 SCMR 555 is not attracted to the facts of the instant case because in order that nominal damages may be awarded by the Court, it must be shown that some loss was suffered by the plaintiff on account of the breach. As has been pointed out earlier, the Supreme Court in the reported case proceeded on the premises that the appellants were liable to make compensation to the respondent for revocation of his contract of agency without any sufficient cause, before the expiration of the period mentioned in the contract. However, since no evidence had been produced by the respondent vis-a-vis the actual damages suffered by him, nominal damages were awarded. There can even be cases where it is not possible to prove actual damages. In such cases also the Court can, in its discretion award nominal damages. However, when there is no evidence that a party has suffered any loss on account of the breach, no damages can be awarded unless the actual damages are proved. In the instant case, there is nothing to indicate that the plaintiffs have suffered any loss on account of the breach committed by the defendants. The only evidence produced by the plaintiffs was the quotations said to have been received by them from the two dealers, F.H. Nagi and M/s. Transocean Asian Limited, which as pointed out earlier, could not discharge the onus, which was upon the plaintiffs to prove the loss allegedly suffered by them.
Consequently, the contention of Mr. Mansoor-ul-Arfin in regard to awarding of nominal damages in the instant case cannot be accepted. The objections therefore have no force.
16. In the result, the objections are overruled and the award is made the rule of the Court.
Award made rule of the Court.