Bombay High Court
Kaumudi P. Kothari vs Central Warehousing Corporation And ... on 28 March, 2025
2025:BHC-AS:14464
First Appeal No. 1307 of 2022 (final).doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO. 1307 OF 2022
Smt. Kaumudi P. Kothari ]
Age : 75, Occ. : Household ]
An Adult, Hindu, Inhabitant of Mumbai ]
Having address at 121, Mittal Tower, ]
'C' Wing, 12th Floor, Nariman Point, ]
Mumbai - 400 021. ] ...Appellant
Versus
1. Central Warehousing Corporation ]
A Government of India Undertaking ]
Having Regional Office address at Baldota ]
Bhavan, M. K. Marg, Churchgate, Mumbai - ]
400 020. ]
2. The Secretary ]
Ministry of Food, Consumer Affairs ]
& Civil Supplies, Krishi Bhavan, ]
New Delhi. ] ...Respondents.
WITH
FIRST APPEAL NO. 1054 OF 2024
Smt. Kaumudi P. Kothari ]
Age : 75, Occ. : Household ]
An Adult, Hindu, Inhabitant of Mumbai ]
Having address at 121, Mittal Tower, ]
'C' Wing, 12th Floor, Nariman Point, ]
Mumbai - 400 021. ] ...Appellant
Versus
1. Central Warehousing Corporation ]
A Government of India Undertaking ]
Having Regional Office address at Baldota ]
Bhavan, M. K. Marg, Churchgate, Mumbai - ]
400 020. ]
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First Appeal No. 1307 of 2022 (final).doc
2. The Secretary ]
Ministry of Food, Consumer Affairs ]
& Civil Supplies, Krishi Bhavan, ]
New Delhi. ] ...Respondents.
------------
Mr. Pradeep Thorat, Ms. Aditi Naikare for Appellant.
Mr. Bharat Satra and Mr. Manoj Mishra for Respondent.
------------
Coram : Sharmila U. Deshmukh, J.
Reserved on : 30th January, 2025.
Pronounced on : 28th March, 2025.
Judgment :
1. Both the First Appeals arise out of Judgment and Decree dated
30th August, 2022 passed by the City Civil Court dismissing the
Summary Suits. As the Appeals arise out of identical suits in respect of
two identical Lease Agreements in respect of two separate premises
owned by the Plaintiff, with consent, both Appeals are taken up for
hearing together and are being disposed of by this common judgment.
For the sake of convenience, the parties are referred as per their status
before the Trial Court. The facts of Summary Suit No. 8433 of 2002 are
referred.
2. Summary Suit No. 8434 of 2002 came to be filed by the Plaintiff
under Order XXXVII, Rule 2 of Code of Civil Procedure, 1908 [for short,
"CPC"] seeking a decree for sum of Rs. 4,12,420/- towards the godown
rent for the unexpired period of lease from 1 st December, 1999 to 14th
October, 2000 along with interest.
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3. The case of the Plaintiff was that she was owner of godown
premises situated in Manpada, Thane. On 15 th October, 1987, an
Agreement of Lease came to be executed between the Plaintiff and
the Defendant No. 1, which is Government Undertaking working under
the control and supervision of Defendant No. 2, i.e. the Secretary,
Ministry of Food, Consumer Affairs and Civil Supplies, New Delhi, for
initial period of three years for monthly compensation of Rs. 39,460/-.
Clause 1 of the Agreement provided for termination of the lease at
option of either parties only after three years by giving one month's
written notice. In complete violation, the Defendant No. 1 unilaterally
announced their decision to de-hire the subject premises w.e.f 1 st
December, 1999 and vacated the premises before expiry of lock-in
period. The Plaintiff regularly sent the debit notes for the monthly
rent for the period from 1st December, 1999 to 14th October, 2000 but
they remained unpaid. After service of statutory notice under Section
80 of CPC, the suit came to be filed seeking decree for the unpaid rent
for remainder of lock-in period.
4. The Defendant No. 1 filed its Written Statement and denied the
liability to pay damages or rent as claimed. It was contended that the
Lease Agreement was determinable at the option of the Defendant
only. An objection to maintainability was raised on various grounds
firstly in view of the arbitration clause contained in the Agreement,
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secondly in view of Section 41 of Presidency Small Causes Court Act,
1882, thirdly for the reason that the summary suit is not maintainable
for recovery of rent and lastly for the reason that the Lease Agreement
is neither registered or stamped document.
5. The Defendant did not lead any evidence in the matter and the
Application of Defendant to file evidence and documents was rejected
by the Trial Court by order of 21 st June, 2018. From the record, it
appears that the said order came to be challenged before the High
Court. The interim relief granted by the High Court on stay of further
proceedings was not continued and therefore, the Trial Court
proceeded with the matter. The Trial Court framed and answered the
issues as under :-
Sr. No. ISSUES FINDINGS
1. Whether defendant committed In the affirmative
breach of clause (1) of Agreement
dated 15.10.1997 by dehiring the
premises with effect from
15.09.1999?
2 Whether defendant was liable to pay In the negative
monthly compensation of Rs. 79,380/-
from 15.09.1999?
3. Is plaintiff entitled to claim interest at In the negative
the rate of 18% per annum?
4. Whether this Court has jurisdiction to In the affirmative
try the present suit?
5. Whether plaintiff is entitled for reliefs In the negative
sought, if yes, what?
6. What order and decree? Suit dismissed as per
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final order.
6. The Trial Court considered Clause-1 of Lease Agreement and
held that the Defendant No. 1 has terminated the Agreement within
the lock-in period and committed breach of Clause-1. As far as the
liability to pay monthly compensation from 15th September, 1999, the
Trial Court noted the decision of this Court in the case of Indiabulls
Properties Pvt. Ltd. vs. Treasure World Developers Private Limited 1
and held that there is no clause in Agreement, which entitles the
plaintiff to claim liquidated damages from the defendant and that
plaintiff has not claimed ascertainment of damages suffered by her. It
held that in absence of ascertainment of debt and as there is no
liquidated damage or penalty stipulated in the Agreement, there is no
question of granting damages. The Trial Court held that without an
inquiry as to actual damages suffered by the party, no amount towards
damages or loss can be awarded and answered the issue against the
plaintiff.
7. On the aspect of jurisdiction, the Trial Court held that the suit
was basically for damages towards unexpired period and therefore, the
Court had the jurisdiction. The Trial Court noted that the other
objections as regards arbitration clause and non-payment of stamp
1 2014 (4) Bom.C.R.76
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duty and non-registration were already dealt by the High Court and
rejected the objections. The Trial Court held that though there is
breach of Agreement by the Defendant, the Plaintiff is not entitled to
Decree as the suit did not seek quantification of damages and
dismissed the suit.
8. Mr. Thorat, learned counsel appearing for the Plaintiff has taken
this Court through the averments in the plaint and would submit that it
is a specific case of the plaintiff that there was prohibition on
termination of lease during the lock-in period and relief was for
recovery of rent for unexpired lock-in period. He submits that
execution of Agreement to Lease is undisputed and also the handing
over of possession. He submits that the suit being one filed under
Order XXXVII, Rule 2(b) of CPC was for liquidated demand and not
liquidated damages. He submits that liability is crystallised as an
implied term under Clause 1 of the Agreement and therefore, it is not
a case of damages and not covered by Section 73 of Indian Contract
Act, 1872 [for short, "Contract Act"]. As an alternative argument, he
submits that the suit can also be treated as one for recovery of money
as reimbursement is sought due to premature de-hiring of the godown
premises. He would further submit that there is no separate inquiry
required as the amount was already mentioned in the contract as an
implied term of the contract. In support, he relies upon the following
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decisions :-
Dena Bank vs. K. Motiram Vakil2
Jyotsna K. Valia vs. T. S. Parekh and Co.3
9. Per contra, Mr. Satra, learned counsel appearing for Respondent
would submit that before the Trial Court, the case of the Plaintiff was
one for damages and accordingly arguments were advanced by the
Plaintiff before the Trial Court. He submits that having come with a
case for damages, it was necessary for the Plaintiff to lead evidence to
prove the loss suffered and the efforts taken to mitigate the loss. He
submits that the Agreement does not contain liquidated damages
clause and merely provides for lock-in period. Pointing out to the
arguments recorded in the impugned judgment, he submits that it was
the specific case of the plaintiff that the amount is claimed as
liquidated damages and can be recovered from the defendant by way
of Summary Suit. In support, he relies upon the following decisions:-
Express Netweb Solutions Private Ltd. vs. IVK
Mobile Pvt. Ltd.4
Manju Bagai vs. M/s. Magpie Retail Ltd.5
10. The following points would arise for determination :
(i) Whether the claim in the suit is an ascertained debt and constitutes
liquidated demand or whether the same is in nature of damages?
2 1988 SCC OnLine Bom 241.
3 2007 SCC OnLine Bom 413.
4 2018 SCC OnLine Del 10576.
5 2010 SCC OnLine Del 3842.
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(ii) Whether the entitlement of the Plaintiff stands proved and the suit
is liable to be decreed against the Defendant?
As to Point Nos. (i) and (ii):
11. The suit was filed as Summary Suit under Order XXXVII, Rule 2 of
Civil Procedure Code, 1908 claiming godown rent for the unexpired
period of lease from 1st December, 1999 to 14th October, 2000 as per
the terms of the Agreement of Lease along with interest. The relevant
clause in the Agreement of Lease pressed in service by the Plaintiff
reads as under:
"1. THE LESSORS HEREBY AGREE to let and the lessees hereby
agrees to take on lease for an initial period of three years
from the 15th October, 1997, and thereafter subject to as
hereinafter, mentioned on a monthly tenancy, the godown
premises described in the schedule hereto. It is agreed
specifically that the tenancy hereby created shall be
determinable only at the option of the Lessees and Lessors
only after three years by giving one months notice in
advance."
12. The above clause provided that the term of the Lease Agreement
was for three years and that the entire term of three years will
constitute what is commonly known as "lock-in period" i.e. the period
during which the parties agree not to terminate the Agreement.
Despite the existence of the lock-in period of three years, the
Defendants terminated the Agreement prior to the expiry of lock-in
period and handed over possession of the leased premises to the
Plaintiff. The finding of the Trial Court is that Defendants have
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breached Clause 1 of the Agreement by terminating the Agreement
during lock-in period, which finding is not assailed by the Defendants.
13. Admittedly, there is no express term in the Agreement imposing
any obligation for termination of the Agreement during the lock-in
period. According to Mr. Thorat, implied in Clause 1 of the Lease
Agreement is the acceptance of liability of payment of lease rent for
the unexpired lock-in period in event of termination and this implied
term constitutes an ascertained debt for which summary suit can be
filed. The question is whether in the facts of the present case, it is
possible to imply the term that the violation of Clause 1 of Lease
Agreement would impose an obligation of payment of compensation
for the unexpired lock-in period. It is settled that the general
presumption is against implying terms into a written contract. In Full
Bench decision of this Court in Jyotsna K. Valia vs T.S. Parekh and
Company (supra), the expression "implied term of a contract" was
considered. The Full Bench took stock of various authorities and
treatise on interpretation of contract and culled out the tests which
are to be applied whilst considering whether from the written contract
it can be held that there is an implied term to pay. It observed that the
necessity to imply the terms arise because the parties have not
expressly stated them for several reasons, the most significant being
that the obligation was so "obvious" that it "went without saying". In
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such case, it may become necessary to find out whether terms can be
implied to provide for the contingency. The Full Bench referred to the
treatise of "The Interpretation of Contract" by Kim Lewison, Q.C.
containing extensive discussion on "implied terms" which set out the
following conditions to be fulfilled:
(1) It must be reasonable and equitable.
(2) It must be necessary to give business efficacy to the
contract so that no term can be implied if the contract is
effective without it.
(3) It must be so obvious that it goes without saying.
(4) It must be capable of clear expression.
(5) It must not contradict any express term of the contract.
14. If the clauses in the present Lease Agreement are seen, Clause 1
provided for minimum guarantee period of three years during which
the parties had agreed not to terminate the Agreement. The
Agreement contains a clause for mutual renewal of lease at the end of
the term of three years. The other clauses pertain to the maintenance
of the leased premises and payment of the outgoings. Whether or not
a term is implied is usually said to depend upon the intention of the
parties as collected from the words of the Agreement and the
surrounding circumstances. The Agreement is silent as regards the
consequence of pre-mature termination. In the absence of any express
term in the Agreement as regards the consequence, the breach of the
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Agreement would give rise to a claim for damages under the statutory
provisions of Section 73 of the Contract Act. As the statutory provision
provide the relief which the party suffering from breach of a contract is
entitled, it cannot be said that by not setting out an express term, the
contract has failed to provide for the contingency of violation of
Agreement, enjoining upon the Court to imply a term for completeness
of the contract. Thus, there is no requirement of implying any term in
the contract as Section 73 of the Contract Act applies to such
eventuality.
15. Apart from the above, for purpose of implying a term, the
obligation on the defaulting party must be so obvious that it was not
necessary to state the same in express terms in the contract. When the
various clauses in the Agreement are considered, the other terms do
not provide any guidance as to what the parties intended to be
consequence of the breach. The parties could have stipulated that
upon breach of Clause 1, the defaulting party to pay liquidated or
unliquidated damages or payment of compensation for remainder of
lock-in period, or for forfeiture of security deposit, etc. For a term to be
implied, it must be the "only" obvious term. Where it is not possible to
say that the only consequence of breach would be payment of rent for
the unexpired lock-in period, such a term cannot be implied unless
expressly stated in the contract.
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16. The pleadings in the plaint militates against the claim being a
claim for liquidated demand. If the averments in the plaint are seen,
after pleading about the execution of the Agreement of Lease, it is
pleaded in paragraph 4 that in complete violation of the clear and
unambiguous condition of minimum guarantee of three years, the
Defendant No. 1 de-hired the subject premises. In paragraph 10, it is
pleaded that the Defendant No. 1 has wrongfully denied to honor their
contractual obligations and are therefore, legally bound to reimburse
to the Plaintiff the rent of the subject godown premises for the
unexpired lock-in period. The plaint essentially claims breach of
contract and to be compensated for the breach.
17. If the contention of Mr. Thorat is accepted and the claim is
considered to be simplicitor for recovery of the monthly compensation
under the Lease Agreement for the unexpired lock-in period, the
character of the suit will be one for recovery of license fees governed
by Section 41 contained in Chapter VII of Presidency Small Causes
Court Act, 1882 which reads as under:
"41.(1) Notwithstanding anything contained elsewhere in this
Act but subject to the provisions of sub-section (2), the Court of
Small Causes shall have jurisdiction to entertain and try all suits
and proceedings between licensor and licensee, or a landlord
and tenant, relating to the recovery of possession of any
immovable property situated in Greater Bombay, or relating to
the recovery of any licence fee or charges or rent therefor,
irrespective of the value of the subject-matter of such suits or
proceedings.
(2) Nothing contained in sub-section (1) shall apply to suits or
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proceedings for the recovery of possession of any immovable
property, or of licence fee or charges or rent thereof, to which
the provisions of the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947, the Bombay Government Premises
(Eviction) Act, 1955, the Bombay Municipal Corporation Act, the
Maharashtra Housing and Area Development Act, 1976 or any
other law for the time being in force apply."
18. Where the subject-matter of the suit relates to recovery of
immovable property, license fees or rent between landlord and tenant
or licensor and licensee, it is only the Small Causes Court which would
have jurisdiction irrespective of valuation. The Plaintiff has chosen his
forum and has filed the suit. When the pleadings in the plaint are
perused, it is evident that the Plaintiff considered the claim as one for
liquidated damages for breach of the contract by the Defendant No 1
and invoked the jurisdiction of the Civil Court. The submissions of the
Advocate for Plaintiff before the Trial Court also supports this
conclusion. The finding on Issue No. 4 on jurisdiction in paragraph 38
by the Trial Court records the submission of Advocate for Plaintiff that
the suit is for claim of rent of unexpired period in the form of damages
and not simplicitor for arrears of rent. Before the Trial Court, the
learned counsel for Plaintiff had relied upon Sections 73 and 74 of
Contract Act, 1872. Paragraph 28 of the impugned judgment records
the argument that the amount claimed is liquidated damages and can
be recovered by way of summary suit. The argument before the Trial
Court was that for claiming liquidated damages, the party is not
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required to prove actual loss or damage suffered by him and not that
the suit is for liquidated demand. The specific case put up before the
Trial Court was a claim for damages and at the Appellate stage, it is not
permissible to do a volte-face and canvas a submission about the suit
being for liquidated demand and not damages.
19. The clauses in the Agreement, the frame of the suit, the forum
chosen by the Plaintiff and the arguments canvassed before the Trial
Court establishes that the Plaintiff came with a case of damages for
breach of the contract. The filing of the suit as summary suit cannot
change the nature of the suit from one for damages to one for
liquidated demand. As the relief claimed arises out of breach of
contract, the provisions of Section 73 of Contract Act are clearly
applicable to the facts of the case. It was thus necessary for the
Plaintiff to plead and prove the loss or damage suffered by the Plaintiff
by reason the breach. It is well-settled that damages is money claimed
as compensation for injury and remains a claim till adjudication and
only after the Court awards the same, it becomes a debt.
20. Section 73 of Indian Contract Act, 1872 reads thus:
"73. Compensation for loss or damage caused by breach of
contract.--When a contract has been broken, the party who
suffers by such breach is entitled to receive, from the party
who has broken the contract, compensation for any loss or
damage caused to him thereby, which naturally arose in the
usual course of things from such breach, or which the parties
knew, when they made the contract, to be likely to result from
the breach of it.
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Such compensation is not to be given for any remote and
indirect loss or damage sustained by reason of the breach.
Compensation for failure to discharge obligation
resembling those created by contract.--When an obligation
resembling those created by contract has been incurred and
has not been discharged, any person injured by the failure to
discharge it is entitled to receive the same compensation from
the party in default, as if such person had contracted to
discharge it and had broken his contract.
Explanation.--In estimating the loss or damage arising from a
breach of contract, the means which existed of remedying the
inconvenience caused by the non-performance of the contract
must be taken into account."
21. As per Section 73 of the Contract Act, the party who suffers by
the breach of contract is entitled to receive from the defaulting party,
compensation for any loss or damage caused to him by such breach,
which naturally arose in usual course of things from such breach, or
which the two parties knew when they make the contract to be likely
the result of the breach of contract. The provision makes it clear that
mere breach of the contract would not entitle the party suffering from
the breach to claim damages unless the party has suffered damages by
reason of the breach, which has to be proved and the plaintiff will be
entitled to a decree to the extent of the damage suffered. There has to
be relief claimed for ascertainment of the damages and the Plaintiff
was required to lead necessary evidence to prove damages, which the
Plaintiff has failed to establish.
22. The Supreme Court in the case of Union of India vs. Raman Iron
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Foundry6 expounded this very principle in the following words:
"11. Having discussed the proper interpretation of Clause 18,
we may now turn to consider what is the real nature of the
claim for recovery of which the appellant is seeking to
appropriate the sums due to the respondent under other
contracts. The claim is admittedly one for damages for breach
of the contract between the parties. Now, it is true that the
damages which are claimed are liquidated damages under
Clause 14, but so far as the law in India is concerned, there is
no qualitative difference in the nature of the claim whether it
be for liquidated damages or for unliquidated damages.
Section 74 of the Indian Contract Act eliminates the somewhat
elaborate refinements made under the English common law in
distinguishing between stipulations providing for payment of
liquidated damages and stipulations in the nature of penalty.
Under the common law a genuine pre-estimate of damages by
mutual agreement is regarded as a stipulation naming
liquidated damages and binding between the parties : a
stipulation in a contract in terrorem is a penalty and the Court
refuses to enforce it, awarding to aggrieved party only
reasonable compensation. The Indian Legislature has sought
to cut across the web of rules and presumptions under the
English common law, by enacting a uniform principle
applicable to all stipulations naming amounts to be paid in
case of breach, and stipulations by way of penalty, and
according to this principle, even if there is a stipulation by way
of liquidated damages, a party complaining of breach of
contract can recover only reasonable compensation for the
injury sustained by him, the stipulated amount being merely
the outside limit. It, therefore makes no difference in the
present case that the claim of the appellant is for liquidated
damages. It stands on the same footing as a claim for
unliquidated damages. Now the law is well settled that a claim
for unliquidated damages does not give rise to a debt until the
liability is adjudicated and damages assessed by a decree or
order of a Court or other adjudicatory authority. When there is
a breach of contract, the party who commits the breach does
not eo instanti incur any pecuniary obligation, nor does the
party complaining of the breach becomes entitled to a debt
due from the other party. The only right which the party
aggrieved by the breach of the contract has is the right to sue
for damages. (Emphasis supplied) That is not an actionable
claim and this position is made amply clear by the amendment
in Section 6(e) of the Transfer of Property Act, which provides
that a mere right to sue for damages cannot be transferred.
This has always been the law in England and as far back as
1858 we find it stated by Wightman, J., in Jones v. Thompson,
6 (1974) 2 SCC 231.
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[(1858) 27 L.J.Q.B. 234] "Exparte Charles and several other
cases decide that the amount of a verdict in an action for
unliquidated damages is not a debt till judgment has been
signed". It was held in this case that a claim for damages does
not become a debt even after the jury has returned a verdict
in favor of the plaintiff till the judgment is actually delivered.
So also in O'Driscoll v.Manchester Insurance Committee, [(1915)
3 K.B. 499], Swinfen Eady, L.J., said in reference to cases
where the claim was for unliquidated damages:"... in such
cases there is no debt at all until the verdict of the jury is
pronounced assessing the damages and judgment is given".
The same view has also been taken consistently by different
High Courts in India. We may mention only a few of the
decisions, namely, Jabed Sheikh v. Taher Mallik [45 Cal. Weekly
Notes, 519], S. Malkha Singh v. N.K. Gopala Krishna Mudaliar,
[AIR 1956 Punj 174] and Iron & Hardware (India) Co. v. Firm
Shamlal & Bros., [AIR 1954 Bom 423]. Chagla, C.J. in the last
mentioned case, stated the law in these terms:
"In my opinion it would not be true to say that a person who
commits a breach of the contract incurs any pecuniary liability,
nor would it be true to say that the other party to the contract
who complains of the breach has any amount due to him from
the other party.
As already stated, the only right which he has is the right to go
to a Court of law and recover damages. Now, damages are the
compensation which a Court of law gives to a party for the
injury which he has sustained. But, and this is most important
to note, he does not get damages or compensation by reason
of any existing obligation on the part of the person who has
committed the breach. He gets compensation as a result of the
fiat of the Court. Therefore, no pecuniary liability arises till the
Court has determined that the party complaining of the breach
is entitled to damages. Therefore, when damages are assessed,
it would not be true to say that what the Court is doing is
ascertaining a pecuniary liability which already existed. The
Court in the first place must decide that the defendant is liable
and then it proceeds to assess what that liability is. But till that
determination there is no liability at all upon the defendant."
This statement in our view represents the correct legal
position and has our full concurrence. A claim for damages for
breach of contract is, therefore, not a claim for a sum presently
due and payable and the purchaser is not entitled, in exercise
of the right conferred upon it under Clause 18, to recover the
amount of such claim by appropriating other sums due to the
contractor."
23. It follows that where the contract does not stipulate the
quantum of damages, the Court is required to assess the compensation
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as per Section 73 of Contract Act. Even if the loss is ascertainable, the
claim being for damages cannot be considered as a claim for
ascertained sum. This Court in Continental Transport Organisation
Pvt. Ltd. vs. Oil and Natural Gas Corporation Ltd. 7 has held that
unless loss is pleaded and proved, it cannot be recovered. The burden
was upon the Plaintiff to prove damages which she has failed to prove
as there is no pleading or evidence in respect of the loss sustained.
Further, the Hon'ble Apex Court has held in Murlidhar Chiranjilal vs.
Harishchandra Dwarkadas8 as under:
"9. The two principles on which damages in such cases are
calculated are well-settled. The first is that, as far as possible,
he who has proved a breach of a bargain to supply what he
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
this principle is qualified by a second, which imposes on a
plaintiff the duty of taking all reasonable step" to mitigate the
loss consequent on the breach, and debars him from claiming
any part of the damage which is due to his neglect to take
such steps: (British Westinghouse Electric and Manufacturing
Company Limited v. Underground Electric Railways Company
of London). These two principles also follow from the law as
laid down in S. 73 read with the Explanation thereof. If
therefore the contract was to be performed at Kanpur it was
the respondent's duty to buy the goods in Kanpur and rail
them to Calcutta on the date of the breach and if it suffered
any damage thereby because of the rise in price on the date of
the breach as -compared to the contract price, it would be
entitled to be reimbursed for the loss. Even if the respondent
did not actually buy them in the market at Kanpur on the date
of breach it would be entitled to damages on proof of the rate
for similar canvas prevalent in Kanpur on the date of breach, if
that rate was above the contracted rate resulting in loss to it.
But the respondent did not make any attempt to prove the
rate for similar canvas prevalent in Kanpur on the date of
breach, if that rate was above the contracted rate resulting in
loss of it. Therefore, it would obviously be not entitled to any
7 2015 SCC OnLine Bom 4918.
8 1961 SCC OnLine SC 100.
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damages at all, for on this state of the evidence it could not be
said that any damage naturally arose in the usual course of
things."
24. As the Agreement did not provide for liquidated damages,
Section 74 of Contract Act had no applicability. For sustaining a claim
for unliquidated damages, the damages have to be ascertained by
leading cogent evidence. The Plaintiff has failed to plead the loss
suffered by reason of the breach of the contract and the steps taken by
the Plaintiff to mitigate the losses. There is no relief sought of
ascertainment of damages and consequently, no evidence is brought
on record. The claim for compensation for remainder of the lock-in
period had no basis and only damages could have been granted for the
breach of the Agreement. The Trial Court has rightly held that the
Plaintiff has not claimed ascertainment of damages suffered by her
and in the absence of any inquiry as to actual damages suffered by the
Plaintiff, no amount can be awarded towards damages/loss. The Trial
Court has rightly dismissed the suits filed by the Plaintiff. Point Nos. (i)
and (ii) are accordingly answered against the Plaintiff.
25. Resultantly, both the First Appeals fail and stand dismissed.
26. In view of dismissal of the First Appeals, Interim Applications, if
any, do not survive for consideration and stands disposed of.
[Sharmila U. Deshmukh, J.]
Sairaj 19 of 20
First Appeal No. 1307 of 2022 (final).doc
27. At this stage, request is made for continuation of the ad-interim
relief of keeping the amount deposited which was directed by order
dated 23rd November, 2022 for further period of eight weeks. The
interim order is extended for a period of eight weeks from today.
[Sharmila U. Deshmukh, J.]
Sairaj 20 of 20
