About the Author
The Author of this article is Midhuna M.S who is a 2nd Semester, 5 year LLB student of Government Law College, Thiruvananthapuram
Case:Muralidhar Chiranjilal Vs. Harishchandra Dwarkadas And Another
Court : Supreme Court of India
Citations : 1962 AIR 366, 1962 SCR (1) 653
Petitioner : M/s Muralidhar Chiranjilal
Respondent : M/s. Harishchandra Dwarkadas And Another
Judges : Wanchoo K.N, Gajendragadkar P.B.
Facts of the Case
Muralidhar Chiranjilal entered into a contract with Harishchandra Dwarkadas through Babulal for the sale of certain canvas at Rs1 per yard. The delivery was to be made through railway receipt. The cost of transport from Kanpur to Calcutta and the labour charges in that connection were to be borne by Dwarkadas. It was agreed by Chiranjilal that the railway receipt would be delivered on August 5, 1945. But he failed to deliver it on due date. He informed Dwarkadas on August 8, 1947 that the booking from Kanpur to Calcutta was closed and therefore the contract had become impossible of performance; he cancelled the contract and returned the advance that had been received. Dwarkadas did not accept that the contract had become impossible of performance. He filed a suit against Chiranjilal and Babulal for the breach of contract.
The trial Court held that Babulal had acted as the agent of Chiranjilal in the matter of the contract and therefore he was bound by it. The court further held that the contract had become impossible of performance. Hence, Dwarkadas had failed to prove the rate prevalent in Kanpur on the date of breach and therefore he was not entitled to any damages. This order of trial court was challenged before High Court. The high court held that the contract had not become impossible of performance as it had not been proved that the booking between Kanpur and Calcutta was closed at the relevant time and it further held that Dwarkadas was entitled to damages on the basis of the rate prevalent in Calcutta on the date of breach. M/s Chiranjilal challenged high court’s judgement on an appeal by special leave before Supreme Court of India.
Issues in the case
Whether the contract had become impossible of performance?
Whether the respondent was entitled to damages at the rate claimed by it?
Contentions of the Appellant
The contract was for delivery of canvas from Kanpur to Calcutta and the respondent had therefore to prove the rate of plain canvas at Kanpur on or about the date of breach. But the respondent has not proved it. Therefore he was not entitled to any damages at all.
There is no measure for arriving at the quantum of damages on the record in this case.
Contentions of the Respondent
It was proved that the rate of coloured canvas in Calcutta on or about the date of the breach.
Where goods are available in the market, It is the difference between the market price on the date of the breach and contract price which is the measure of damages.
Decision of the Case
The Supreme court said that it was unnecessary to decide whether the contract had become impossible of performance, as they have come to the conclusion that the appeal must succeed on the other point raised on behalf of the appellant.
It was well settled that the two principles relating to compensation for loss or damage caused by breach of contract as laid down in section 73 of the Indian contract Act, 1872 read with the explanation thereof, are (i) that, as far as possible, he who has proved a breach of a bargain to supply what be contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed. But (ii) that there is a duty on him of taking all responsible steps to mitigate the loss consequent on the breach and debars him from claiming any part of the damage which is due to his negligence to take such steps.
The contract in the present case was for delivery of certain canvas from Kanpur to Calcutta. It was open to the buyer to sell the goods where it liked, and no inference could be drawn from the mere fact that goods were to be booked for Calcutta that the seller knew that the goods were for resale in Calcutta only. The contract was therefore not of special type to which the words “which the parties knew, when they made the contract, to be likely to result from the breach of it” appearing in Section 73 of the contract Act apply. This is an ordinary case of contract between traders which is covered by the words “which naturally arose in the usual course of things from which breach”appearing in section 73 of the Indian contract Act 1872. As the respondent had failed to prove the rate for similar canvas in Kanpur on the date of breach. He is not entitled to any damages in the circumstances as there was no measure for arriving at the quantum.
The case on which Supreme Court placed reliance was Re.R and H. Hall Ltd and W.H. Pim (Junior) & Co’s Arbitration, Victoria Laundry (Windsor) Ltd. V. Newman Industries Ltd. And Chao and others V. British Traders and Shippers Ltd.
