1976 (3) TMI 244 - HC - Indian Laws

Court reduces damages in contract dispute, stresses mutual agreement on price and statutory duties.

The appeal was allowed in part, with the defendant liable to pay a reduced sum of Rs. 3075/- as damages for the non-supply of three wagons, along with ... - Issues Involved:1. Whether the defendant committed breach of contract.2. Whether the plaintiff is bound to pay the Central Excise Duty on supplies made to him on and after 1-3-1970.3. To what damages, if any, is the plaintiff entitled.4. Whether this court has no jurisdiction to try the suit.5. To what relief.Detailed Analysis:1. Whether the defendant committed breach of contract:The trial judge found that the defendant committed a breach of contract. The plaintiff's case was based on three contracts for the supply of tin containers, which the defendant allegedly failed to perform in full. The defendant admitted to the first two contracts but claimed the third was only an oral agreement for one wagon. The court examined extensive correspondence between the parties, which revealed that the plaintiff had repeatedly instructed the defendant to delay or stop dispatches. The court concluded that the plaintiff's instructions to delay were clear and unambiguous, and thus the defendant's inability to perform was not solely due to his actions.2. Whether the plaintiff is bound to pay the Central Excise Duty on supplies made to him on and after 1-3-1970:The court found that the plaintiff is bound to pay the Central Excise Duty. The defendant had informed the plaintiff about the increase in excise duty, which the plaintiff categorically refused to pay. According to Section 64-A of the Sale of Goods Act, the seller is entitled to add the increase in excise duty to the contract price. The court held that the plaintiff's refusal to pay the increased duty amounted to a refusal to pay the full contract price, which is a concurrent condition for the performance of the contract.3. To what damages, if any, is the plaintiff entitled:The trial judge initially assessed damages at Rs. 30,780/-. However, upon appeal, the court found that the plaintiff was not entitled to damages for the non-performance of the contracts due to his own instructions to delay dispatches and his refusal to pay the excise duty. The court did find that the defendant failed to supply three wagons as agreed, which constituted a breach. The damages for this breach were calculated based on the market price difference, resulting in a sum of Rs. 3075/-.4. Whether this court has no jurisdiction to try the suit:This issue was not elaborately discussed in the judgment, implying that the court found it had jurisdiction to try the suit.5. To what relief:The court concluded that the plaintiff is entitled to damages only for the non-supply of three wagons. The appeal was allowed in part, reducing the damages to Rs. 3075/- with interest from the date of the suit until payment and proportionate costs.Conclusion:The appeal was allowed in part, with the defendant liable to pay a reduced sum of Rs. 3075/- as damages for the non-supply of three wagons, along with interest and proportionate costs. The court emphasized the importance of mutual agreement on the contract price, including statutory duties, and held that the plaintiff's refusal to pay the increased excise duty invalidated his broader claim for damages.