Ashok Kumar Khanna vs Johnson And Johnson Co. And Anr.
2010 Latest Caselaw 5017 Del

        THE HIGH COURT OF DELHI AT NEW DELHI
%                      Judgment Reserved on: 28.10.2010
                       Judgment Pronounced on: 01.11.2010

+             CS(OS) 1833/2000

ASHOK KUMAR KHANNA                               ..... Plaintiff

                  - versus -
JOHNSON AND JOHNSON CO. AND ANR.                 .... Defendants

Advocates who appeared in this case:
For the Plaintiff       : Mr Pawan Bahl, Adv.
For the Defendants      : Mr M.S. Vinayak, Mr Rajan
                          Narain, Ms Rajeshwari Shukla
                          and Mr Kishan Rawat, Advs.
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1.

Whether Reporters of local papers may be allowed to see the judgment? Yes

2. To be referred to the Reporter or not? Yes

3. Whether the judgment should be reported in Digest? Yes

V.K. JAIN, J

1. This is a suit for permanent injunction and

recovery of Rs.25,30,000/-. It has been alleged in the plaint

that the plaintiff, who had come to know that the defendant

wanted to allot distributorship for G.B. Pant Hospital, Delhi

for supply of its various products to that hospital, submitted

a letter dated 29th June, 1999, seeking right of

distributorship. Defendant No.2 G.B. Pant Hospital issued

a tender for supply of various surgical and other items in

the month of October, 1999. The tenderer was required to

deposit earnest money between Rs 5,000/- to Rs 30,000/-,

in different categories. Defendant No.1, which wanted to

participate in the tender to supply Group D items of

Cardiology Department was required to pay earnest money

of Rs 30,000/-. An official of defendant No. 1 approached

the plaintiff, asking him to deposit the earnest money.

Accepting the request, the plaintiff got prepared an FDR of

Rs 30,000/- in favour of defendant No. 2 on 22nd October,

1999 and submitted the same to defendant No.1. The

tender submitted by defendant No.1 was accepted by

defendant No.2. It has been further alleged that defendant

No.1 had also orally entered into an agreement with the

plaintiff to supply its goods to G.B. Pant Hospital, for which

the plaintiff was to be paid a margin of about 19% of the

total sale. The officials of the defendant also requested the

plaintiff to fulfil the basic requirement such as obtaining

cellular phone, fax machine and computer, etc. Those

requirements were also completed and defendant No.1 was

intimated. However, defendant No.1 decided to allot the

supply of goods to G.B. Pant Hospital to M/s Cure Aids

India. According to the plaintiff, the supply to be made to

defendant No.2 was to the tune of Rs 1.5 crore and 19% of

margin on that amount comes to Rs 20.25 lakhs. The

plaintiff, therefore, has claimed Rs 20 lakhs towards the

margin on the sale to G.B. Pant Hospital. He has also

claimed the amount of Rs 30,000/- which he had paid as

earnest money. He has further claimed a sum of Rs 5 lakhs

as damages for the mental torture, alleged to have been

caused to him.

2. The suit has been contested by defendants. In its

written statement, the defendant No.1 has taken a

preliminary objection that the plaintiff was suing for specific

performance of a non-executed agreement and since there

was no contract, there was no question of any relief to the

plaintiff. It has also been submitted that since there was no

acceptance of the proposal submitted by defendant No.1 to

the plaintiff, no contract came into existence between the

parties. On merits, it has been alleged that no proposal for

appointment of a dealer was submitted by the plaintiff in

writing, though an FDR of Rs 30,000/- was submitted by

him for considering his appointment as a dealer. It has

been further alleged that no official of defendant No.1 had

approached the plaintiff and it was the plaintiff, who had

approached defendant No.1 to be appointed as a dealer and

had submitted the FDR of Rs 30,000/- to show his bona

fide. It has also been alleged that the plaintiff was required

to take back the amount of Rs 30,000/-, but, he failed to do

so.

3. Defendant No.2, in its written statement, has taken

a preliminary objection that the suit against it did not

disclose any cause of action since no transaction was

entered into between it and the plaintiff. It has further been

admitted that earnest money of Rs 30,000/- was required to

be deposited for cardiology items and the tender submitted

by defendant No.1 was accepted and supply order was

placed on receipt of authorization from defendant No.1 in

favour of M/s Cure Aids India.

4. The following issues were framed on the pleadings

of the parties:-

1. Whether the suit is not maintainable as pleaded by

defendant No.1 in preliminary objection No.1? OPD

2. Whether there is no contract between the plaintiff

and defendant as pleaded in para of the preliminary

objection No.2? OPD

3. Whether payment of Rs 30,000/- by bank draft in

favour of defendant No.2 by plaintiff does not create

any right in favour of the plaintiff to maintain the suit

as pleaded in para 5 of the preliminary objections?

4. Whether the plaintiff is entitled to the relief of

injunction?

5. Whether the plaintiff is entitled for Rs 25,00,000/- as

damages/compensation?

6. Whether the plaintiff is entitled to recovery of Rs

30,000/- being the amount of bank draft annexed

with the tender documents by defendant No.1?

7. Whether the plaintiff is entitled to interest and if so at

what rate and for what period?

5. Issue No.2

Admittedly, there is no privity of contract between

plaintiff and defendant No.2. The tender to defendant No.2

was submitted by defendant No.1 and the order by the

hospital was also placed on defendant No. l. No relief

against defendant No.1 has been claimed by the plaintiff.

The suit against defendant No.2 is, therefore, not

maintainable. In any case, defendant No.2 G.B. Pant

Hospital by itself is not a legal entity, this being an

institution of Government of NCT of Delhi. If the plaintiff

had any grievance against G.B. Pant Hospital, he could have

sued Government of NCT of Delhi, but the suit against the

hospital is not maintainable. The issue is decided against

the plaintiff and in favour of defendant No.2.

These issues are interconnected and can be

conveniently decided together.

The plaintiff has examined himself as PW-1 and

has produced two more witnesses. In his affidavit by way of

evidence, the plaintiff stated that having come to know that

defendant No.1 wanted to allot distributorship for G.B. Pant

Hospital for supply of various products, he vide letter

Ex.PW-1/1 applied to defendant No.1, seeking

distributorship. Defendant No.1 directed its main

distributor M/s Reliance Surgical Emporium to give the

required goods to him, for supply to various customers in

G.B. Pant Hospital. He further stated that defendant No.2

invited a tender in the month of October, 1999 for supply of

various surgical and other items. Defendant No.1 was

required to pay earnest money of Rs 30,000/- to participate

in the tender, terms and conditions of which are Ex.PW-

1/17. The officials of defendant No.1 approached him and

asked him to deposit the earnest money by way of FDR in

the name of defendant No.2. The plaintiff accordingly got

the FDR Ex.PW-1/18 prepared and gave it to defendant

No.1 which submitted the same to defendant No.2 and

participated in the tender. He further stated that defendant

No.1 had also orally entered into a contract with him to

supply the goods to defendant No.2 and he was to get about

20% profits from the supplies to be made by him to

defendant No.2. The officials of defendant No.1 also

requested him to arrange cellular phone, fax machine,

computer, etc. which were duly arranged by him and the

defendant No.1 was intimated in this regard vide letter

Ex.PW-1/19 dated 30th January, 2000. However, in March,

2000, the plaintiff came to know that defendant No.1 had

decided to allot the supply to M/s Care India. He also

stated that defendant No.1 had supplied goods valued at Rs

2.93 crores to defendant No.2 and he is entitled to 20%

profit on these sales, as was agreed by defendant No.1 and

was also paid by it to other agents.

7. PW-2 Mr Kailash Chand is an official of G.B. Pant

Hospital. He produced the record Ex.Pw-2/A (Colly.). PW-3

Mr Tarun Kapoor, is an ex-employee of M/s Care India. He

stated that he used to participate in the tender of M/s Care

India, which had supplied cardiology products worth Rs 65

to 75 lakhs to G.B. Pant Hospital in the year 2001-02 on

behalf of Johnson & Johnson Company, of which it was a

distributor, till the year 2002. He further stated that the

company earns gross profit of 13 to 15%.

8. In rebuttal, defendant No.1 has products its Zonal

Manager Shri Harsh Gulati as DW-1. In his affidavit, Mr

Harsh Gulati stated that there was no agreement or

contract either written or oral, between the parties at any

point of time. He further stated that on 29th June, 1999,

the plaintiff had given a proposal to defendant No.1 for

being appointed as a dealer and in furtherance of that

proposal, he had deposited an FDR of Rs 30,000/- with

defendant No.2, on behalf of defendant No. l. This act,

however, was not done with the consent or as per the

instructions of defendant No.1 and the proposal of the

plaintiff was never accepted by defendant No.1. He also

stated that defendant No.1 had not supplied any goods to

defendant No.2 through its distributor M/s Care India on

the basis of the earnest money of the plaintiff. According to

him, defendant No.1 had repeatedly asked the plaintiff to

take back the FDR of Rs 30,000/-, which he had given to

show his bona fide interest in being appointed a dealer of

defendant No.1 and this was done, without prior consent of

defendant No.1. He also stated that the request to be

appointed as a dealer had to be filed in a prescribed

proforma which was to be forwarded to the head office of

defendant No.1 and was to be approved by it. The plaintiff,

however, merely sent a letter expressing his desire to

acquire dealership, without caring about the prescribed

procedure and under no circumstances, approval to such a

proposal could have been given by the head office of

defendant No.1.

9. It is not necessary that a contract between two or

more parties need to be in writing. Oral contracts are

permissible in law and are duly recognized. However, the

onus of proving such an agreement lies upon the person

who sets up such an agreement in case it is denied by the

other party. The standard of proof required to prove an oral

agreement is much stronger when a large company such as

defendant No.1 is alleged to be the party to such an

agreement.

10. Admittedly, the plaintiff was never appointed as a

distributor or a dealer of defendant No.1. Admittedly, there

was no written contract between the plaintiff and defendant

No.1 for supply of products of defendant No.1 by the

plaintiff to G.B. Pant Hospital. Admittedly, there is no

document from defendant No.1 to the plaintiff, asking him

to deposit Rs 30,000/- as earnest money with G.B. Pant

Hospital on its behalf. Admittedly, there is no document

from defendant No.1 to the plaintiff, agreeing to pay about

19% of the value of the goods which were to be supplied to

G.B. Pant Hospital or any other amount as his

profit/margin. The entire case setup by the plaintiff is

based upon an oral agreement, which has been denied by

defendant No.1. Nowhere in the plaint, the plaintiff

disclosed the name of the official(s) of defendant No.1, who

are alleged to have approached him and agreed to make

supply to G.B. Pant Hospital through him, and pay him

about 19% of the sale value as his profit/margin. Though

the plaintiff pleads an oral agreement with a large company,

the plaint does not disclose the name of the person who

entered into the alleged oral agreement with him, on behalf

of defendant No.1. There is no explanation from the plaintiff

for not disclosing such a vital fact in the plaint.

11. The plaintiff file a replication, controverting the

averments made in the written statement of defendant No.1.

But, even in the replication, he did not come out with the

name of the person, who entered into the alleged oral

agreement with him on behalf of defendant No.1.

12. The notice dated 31st January, 2000 sent by the

plaintiff is addressed to Mr Vishal Gupta, Regional Sales

Executive of defendant No.1. It has been stated in this

letter that there was some discussion in the office of Mr

Vishal Gupta at the time of defendant No.1 submitting the

tender with G.B. Pant Hospital, along with the earnest

money of the plaintiff and it was assured by him that

certain basic requirements like office fax machine,

computer, etc. were to be fulfilled by him before the tender

enquiry was finalized. It has been further stated that the

plaintiff was ready with necessary formalities. He also asked

Mr Vishal Gupta to convey the terms and conditions of the

company on the subject of distributorship. However, there

is absolutely no averment in this letter that there was an

oral contract between the plaintiff and defendant No.1 for

supply of products of defendant No.1 by the plaintiff to G.B.

Pant Hospital. If there was an oral agreement to this effect,

as alleged in the plaint, there was no reason for not claiming

such a contract in this letter sent by the plaintiff. Though it

has been alleged in the plaint that commission of about

19% of the sale value of the product was agreed to be paid

to the plaintiff as his margin/profit, there is absolutely no

indication of any such agreement/assurance in this letter.

Again, there is no explanation from the plaintiff as to why

no such averment was made in the letter sent by him to Mr

Vishal Gupta.

13. Ex. P-1/20 is the letter dated 23rd May, 2000 sent

by the plaintiff to Mr N.K. Ambawani, Managing Director of

defendant No.1, though it has been alleged in this letter that

the Delhi office of the company had asked the plaintiff, in

case he was interested in supplying goods to G.B. Pant

Hospital, to deposit Rs 30,000/- in favour of G.B. Pant

Hospital so as to enable it to participate in the tender due

on 22nd October, 1999 and he had accordingly given an FDR

of Rs 30,000/- to Delhi office in favour of G.B. Pant

Hospital. There is no averment even in this letter that the

Delhi office or any official of defendant No.1 had agreed to

pay 19% of the value of the goods to be supplied to G.B.

Pant Hospital to the plaintiff as his profit/margin. By the

time the plaintiff wrote his letter, he had already came to

know that M/s Care India had been appointed by Delhi

office of defendant No. 1 for direct sale to G.B. Pant Hospital

and he also apprehended that the tender of G.B. Pant

Hospital would also be diverted to that firm. Still, he chose

not to refer to the alleged agreement to pay 19% of the sale

value of the goods to him as his margin/profit. Ex.PW-1/21

is the letter dated 08th June, 2000, written by the plaintiff to

Mr. R. Dalal, President (Professional Products) of defendant

No.1 referring to his earlier letter dated 23rd May, 2000

addressed to its Managing Director. Though he alleged that

Mr Vishal Gupta had assured him that the company was

looking after his interest in the transaction, he did not plead

any oral agreement in this letter. He did not claim that Mr

Vishal Gupta had agreed to pay 19% of the sale value of the

goods to him as his profit/margin.

14. Ex.PW-1/21 is the legal notice dated 30th June,

2000, sent by the plaintiff to Mr R. Dalal, President

(Professional Products) of defendant No.1 through his

counsel Mr Pawan K. Bahl. Even in this legal notice, the

plaintiff did not claim that name any official of defendant

No.1 who had agreed to pay 19% of the value of the goods to

him as his profit/margin. Again, there is no explanation for

not making this claim even in the legal notice sent through

a counsel.

15. The plaintiff has not produced any official of

defendant No.1 to prove the alleged oral agreement for

supply of the products of defendant No.1 to G.B. Pant

Hospital, pursuant to the tenders invited by the hospital, or

to pay about 19% of the value of the goods to him as his

margin/profit in the supply. The letter Ex.PW-1/19,

addressed to Mr Vishal Gupta, Regional Sales Executive of

defendant No.1 refers to some discussion held in his office,

at the time tender for the year 2000-01 was submitted by

defendant No.1 to G.B. Pant Hospital along with the earnest

money belonging to the plaintiff. Mr Vishal Gupta, however,

has not been produced by the plaintiff, as a witness. Since

the onus of proving the alleged oral agreement lies upon the

plaintiff, it was for him to produce Mr Vishal Gupta to prove

what transpired between him and the plaintiff during the

discussions, alleged to have taken place in his office.

Defendant No.1 had filed an affidavit of Mr Vishal Gupta,

controverting the case setup by the plaintiff. He, however,

was not produced for cross-examination and, therefore, his

affidavit cannot be read in evidence. It appears from the

suggestion given to DW-1 Harsh Gulati in his cross-

examination that Mr Vishal Gupta had ceased to be an

employment of defendant No.1 either because he had

resigned or because had been dismissed from the service of

defendant No.1. Mr Vishal Gupta having left the

employment of defendant No.1, no adverse presumption can

be done against it for not producing him in the witness box.

This is more so, when the onus of proving the alleged oral

agreement lies upon the plaintiff and the onus is rather

heavy since defendant No.1 is a large company and

normally such companies will not enter into oral

agreements of the nature, claimed by the plaintiff.

16. In his cross-examination, the plaintiff stated that it

were Mr M.R. Gandhi and Mr Vishal Gupta, who had

approached him and asked him to start the work, promising

to award the contract to him after 8-10 months. Even Mr

M.R. Gandhi was not produced by the plaintiff to prove the

alleged assurance.

17. In these circumstances, I have no hesitation in

holding that the plaintiff has failed to prove that defendant

No.1 had entered into an oral agreement with him for

supply of its products to G.B. Pant Hospital through him. It

is difficult to dispute that the FDR of Rs 30,000/- was got

prepared by the plaintiff at the suggestion or with the

consent of some official of defendant No.1. The case of the

plaintiff is that the FDR was delivered by him in the Delhi

office of defendant No.1 and was then submitted by that

office to G.B. Pant Hospital, whereas the case of defendant

No.1 that the FDR was deposited by the plaintiff directly

with G.B. Pant Hospital. Even if it is presumed that the

plaintiff deposited the FDR of his own and not through the

Delhi office of defendant no.1, the use of that FDR by

defendant No.1 for securing order from G.B. Pant Hospital,

leaves no reasonable doubt that the FDR of Rs 30,000/-

was deposited by the plaintiff with the consent of some

official of defendant No.1. But, use of the FDR of the

plaintiff by defendant No.1 did not, by itself, result into a

concluded contract between the plaintiff and defendant No.1

for supply of the products by defendant no.1 to G.B. Pant

Hospital through the plaintiff. It is more likely that the FDR

was provided by the plaintiff in order to show his bona fides

in the matter of the request made by him on 29th June,

1999 for grant of distributorship to him and in the hope

that the distributorship will be granted and the supply to

G.B. Pant Hospital will be awarded to him by defendant

No.1. It also appears to me that the official of defendant

No.1 utilized the FDR provided by the plaintiff in the hope

that he may be awarded distributorship of defendant No.1,

in pursuance of the request which had already been made

by him. Of course, the hope entertained by the plaintiff and

the official of defendant No.1 did not materialize since the

plaintiff did not submit a request in prescribed form for

appointment as a distributor of defendant No.1 and

consequently, his request could not be processed further. In

any case, even if it is presumed that some official of

defendant No.1 had agreed to the plaintiff supplying the

tendered goods to G.B. Pant Hospital on behalf of defendant

No.1 that by itself does not entitle the plaintiff to 19% of the

value of the goods as his margin/profit. The onus was upon

the plaintiff to prove that defendant No.1 had agreed to pay

19% of the sale price to him as his margin. He has

miserably failed to prove any such agreement. As noted

earlier, there is no mention of any such margin in the letters

written and the legal notice sent by the plaintiff to defendant

No.1. In his affidavit filed by way of evidence, the plaintiff

claimed 20% and not 19% of the total sale value as the

profit agreed to be paid to him by defendant No.1. He,

however, has not been able to prove that defendant No.1

had agreed to pay 19% or 20% or any other percentage of

the sale value to him as his margin. No doubt, had the

plaintiff made supply to G.B. Pant Hospital on behalf of

defendant No.1, he would have been entitled to some

payment from defendant No.1 as his profit/margin. But, in

a suit for recovery of money, it is for the plaintiff to prove

what exactly was agreed to be paid to him as his

profit/margin. It is not for the Court to speculate as to

what could be the margin that would have been paid to the

plaintiff by defendant No.1, in case of supply to G.B. Pant

Hospital being made through him. No decree for recovery of

money can be passed unless the liability of the defendant is

ascertained and it is not possible for the Court to ascertain

liability in such case unless the plaintiff is able to prove the

exact margin/profit agreed to be paid to him.

18. The learned counsel for the plaintiff has referred to

the following decisions in support of his case Bharat

Petroleum Corporation Ltd. vs. Great Eastern Shipping

Co. Ltd. (2008) 1 SCC 503; JS Bhalla vs. G.J. Bhawnani

23 (1983) DLT 125; Mahant Mela Ram Chela Mahant Inder

Dass vs. Shiromani Gurudwara Parbandhak Committee,

Amritsar AIR 1992 Punjab & Haryana 252; Birendra

Pratap Singh and anr. vs. Gulwant Singh and others AIR

1968 SC 1068; Smt. Niranjan Kaur vs. M/S New Delhi

Hotels Ltd. and ors. AIR 1988 Delhi 332; Mohd.

Salamatullah and ors. vs. Government of Andhra

Pradesh AIR 1977 SC 1481; A.T. Brij Paul Singh and Bros.

vs. State of Gujarat uAIR 1984 SC 1703; Ayub Ali vs.

Union of India 86(2000) DLT 869; Oil & Natural Gas

Corporation Ltd. vs. Saw Pipes Ltd. 2003(2) Raj. 1 (SC);

Bharat Sanchar Nigam Limited vs. BWL Ltd. 2006(3)

R.A.J. 239(Del).

19. In the case of Bharat Petroleum Corporation

Ltd.(Supra) , there was a time charter party entered into

between the appellant and the respondent on 6.05.1997, for

letting on hire, vessels for a period of two years. It was later

extended till 31.08.1998. There were various offers and

counter-offers exchanged between the parties as to the

terms on which the charter party was to continue pending

finalization of a new charter party from 1.09.1998. At every

stage the respondent made it clear that till the tender was

finalized, the existing terms and conditions of the charter

party would continue as per usual practice. No firm interim

agreement, however, could be reached though the vessels of

the respondents continued to be charter by the appellant till

31.08.1999. The chartered party agreement contained an

arbitration clause. The question before the Supreme Court

was whether on expiry of the extended period of charter

hired on 31.08.1998 the charter party came to end and the

arbitration agreement between the parties perished with it.

Answering the question in negative, the Supreme Court,

Inter alia, observed as under:-

"It is, no doubt, true that the general rule is that an offer is not accepted by mere silence on the part of the offeree, yet it does not mean that an acceptance always has to be given in so many words. Under certain circumstances, offeree's silence, coupled with his conduct, which takes the form of a positive act, may constitute an acceptance - an agreement sub silentio. Therefore, the terms of a contract between the parties can be proved not only by their words but also by their conduct."

The facts and circumstances of the case before this

Court being absolutely different, this judgment has no

applicability. There is no dispute with the proposition of law

that under certain circumstances silence on the part of a

party coupled with some positive act on his part may

constitute his acceptance. But, no such conduct on the

part of defendant No.1 stands established in the present

case.

20. In the case of JS Bhalla(supra) the owner of the

property had appeared in the Court and deposed that he

was the owner and lease deed was executed in his favour.

He, while in the witness box, was not cross examined about

the ownership of the property in question. It was observed

that in the absence of cross-examination it must be held

that the appellant had admitted the facts deposed by the

respondent. However, in the present case, there has been

no such absence of examination on the part of defendant

No.1 and there was a specific suggestion given to the

plaintiff that he had given Rs.30,000/- to defendant No.2

merely to induce defendant No.1 to appoint him as a

distributor.

21. In the case of Mahant Mela Ram Chela Mahant

Inder Dass(supra), it was observed that a party should put

to each of its opponents witnesses so much of his case as

concerns that particular witness and if no such questions

are put, the court presumes that the witness account has

been accepted. This judgment is of no help to the plaintiff

in view of extensive cross-examination conducted by

defendant No.1.

22. I have also considered the decision of the Supreme

Court in the case of Birendra Pratap Singh and

anr.(supra), I do not find any such proposition in this case

which can be of any help to the plaintiff.

23. In the case of Smt. Niranjan Kaur(supra) , there

was failure on the part of defendant No.1 to produce the

account books despite direction of the court. In these

circumstances, the court felt that an adverse inference

could be drawn that if the accounts books or the

correspondences between the plaintiff and the defendant

No.1 had been produced by defendant No.1, the same would

have gone against it. Since no document has been withheld

by defendant no.1 before this Court and in any case there

was no direction to it to produce any particular

record/document, there is no occasion to draw an adverse

inference against it.

24. I have also considered the decision of the Supreme

Court in the case of Mohd. Salamatullah and ors.(supra).

Again, I do not find any such proposition in this case which

can be of any help to the plaintiff.

25. The case of A.T. Brij Paul Singh and Bros.(supra)

was a case relating to breach of work contract. The Court

took the view that the contractor was entitled to claim the

damages on the basis of expected profit on balance of the

works contract. This is not a case based upon a works

contract and in any case the plaintiff had failed to prove the

alleged oral contract. Therefore, this judgment does not

help him.

26. In the case of Ayub Ali(supra), the claimant had

claimed 10% of balance works not executed due to pre-

mature closure of contract as loss of profit. It was held that

the claim was not excessive. Again this judgment has no

applicability to the facts of the case before this court.

27. In the case of Oil & Natural Gas Corporation Ltd.

vs. Saw Pipes Ltd.(supra), the Supreme Court held as

under:

"(1) Terms of the contract are required to be taken into consideration before

arriving at the conclusion whether the party claiming damages is entitled to the same;

(2) If the terms are clear and unambiguous stipulating the liquidated damages in case of the breach of the contract unless it is held that such estimate of damages/compensation is unreasonable or is by way of penalty, party who has committed the breach is required to pay such compensation and that is what is provided in Section 73 of the Contract Act.

(3) Section 74 is to be read along with Section 73 and, therefore, in every case of breach of contract, the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree. The Court is competent to award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequences of the breach of a contract.

(4) In some contracts, it would be impossible for the Court to assess the compensation arising from breach and if the compensation contemplated is not by way of penalty or unreasonable, Court can award the same if it is genuine pre-estimate by the parties as the measure of reasonable compensation."

Since the plaintiff before this Court has failed to

establish any concluded contract between him and

defendant No.1, there is no question of awarding any

compensation to him under sections 73/74 of the Contract

Act.

28. In the case of Sanchar Nigam Limited(supra), the

Arbitrator had noted that the Supreme Court had upheld

profit at the rate of 15% and, therefore, award of higher rate

of profit was devoid of any reason. This judgment also has

no applicability to the facts of the case before this Court.

29. In view of the above discussions, both these issues

are decided against the plaintiff and in favour of defendant

No.1.

30. Issue No.4

Since supply of G.B. Pant Hospital has already

been made, this issue has become infructuous and is

treated as such.

31. Issue No.5

In view of my finding on Issues No.2 and 3, the

plaintiff is not entitled either to the amount of Rs 20 lakhs,

claimed as his margin/profit on the sale made by defendant

No.1 to G.B. Pant Hospital or any amount as

damages/compensation. The issue is decided against the

plaintiff and in favour of defendant No.1.

32. Issue No.6

It was not disputed by the learned counsel for the

defendant No.1 that the plaintiff is entitled to recovery of Rs

30,000/- from defendant No.1. Even otherwise, the FDR of

Rs 30,000/- was provided by the plaintiff as a non-

gratuitous act. Section 70 of Contract Act provides where a

person lawfully does anything for another person, or

delivers anything to him, not intending to do so

gratuitously, and such other person enjoys the benefit

thereof, the latter is bound to make compensation to the

former in respect of, or to restore, the thing so done or

delivered. Hence, the plaintiff is entitled to recover this

amount from defendant No.1.

33. Issue No.7

There is no agreement between the parties for

payment of interest on the amount of Rs 30,000/-, utilized

by defendant No.1. No custom or usage of trade for

payment of interest has either been pleaded or proved by

the plaintiff. The provisions of Interest Act are also not

applicable in the facts of this case. Section 3 of Interest Act,

1978 empowers the Court to grant interest in any

proceedings for recovery of any debt or damages or in any

proceeding in which a claim for interest in respect of any

debt or damages already paid is made. It further provides

that if the proceedings relate to a debt payable by virtue of a

written instrument at a certain time, then interest can be

directed to be paid from the date mentioned in this regard,

in a written notice, given by the person claiming interest, to

the person liable for payment of interest. In the case before

this Court, the amount of Rs 30,000/- is not returnable to

the plaintiff by virtue of a written instrument. Hence,

clause (a) to sub-section (1) of Section 3 of Interest Act,

1978 does not apply. Since no interest has been claimed

even in the written notice sent by the plaintiff to defendant

No.1, interest cannot be awarded to him even under clause

(b) of sub-section (1) of Section 3 of the aforesaid Act.

Section 4(1) of Interest Act, 1978 is also not attracted as the

plaintiff is not entitled to interest on the amount of Rs

30,000/- by virtue of any enactment or other rule of law or

usage having the force of law. Since the case of the plaintiff

is not covered under clauses (a) and (d) of sub-section (2) of

Section 4, interest cannot be awarded to him even under

Section 4(2) of the Act. The issue is decided against the

plaintiff and in favour of defendant No.1.

ORDER

34. In view of my findings on the issues, the plaintiff is

entitled to recover Rs 30,000/- with proportionate costs,

only from defendant No.1. The plaintiff is not entitled to any

relief against defendant No.2. The suit is, therefore,

dismissed against defendant No.2 and is decreed only

against defendant No.1 for recovery of Rs 30,000/- with

pendente lite and future interest at the rate of 9% per

annum and proportionate costs of the suit.

Decree Sheet be prepared accordingly.

(V.K. JAIN) JUDGE

NOVEMBER 01, 2010 BG