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Judgment
Seshagiri Aiyar, J.—The defendant gave a lease of about 11 acres of inam land for 5 years to the plaintiff beginning with 1911. Before the
cowle to the plaintiff the lands had been leased to another person. The plaintiff attempted to take possession of the lands but was unable to get
them in the first year. In the second year he was able to get possession of a few acres and in the third year a few more. The suit was instituted for
damages for failure to give possession. The defence was that there was no undertaking to give possession, that the defendant did give possession
of the lands that the damages were excessive and that the plaintiff was not entitled to maintain the suit. The District Munsif held that the suit was
maintainable and following The Zamindar of Vizianagaram v. Behara Suryanarayana Pantulu ILR (1901) Mad. 587 gave the plaintiff a decree for
his share of the crops as estimated in the cowle Exhibit A. This decree was confirmed on appeal.
In the second appeal it was not disputed that the suit was properly instituted. The only point seriously argued related to the measure of damages.
Mr. Narasimha Rao relying upon Mahamed Esa Khan v. Baboo Keshub Lal (1870) 14 W.R. 382 contended that the plaintiff is only entitled to
nominal damages. The general rule as to damages whether they relate to moveable or Immovable property is contained in Section 73 of the Indian
Contract Act. Two considerations arise in assessing damages : (1) whether the damages naturally arose in the usual course of things from the
breach and (2) whether the plaintiff had means of remedying the inconvenience and has neglected to avail himself of them. In The Zamindar of
Vizianagaram v. Behara Suriyanarayana ILR (1901) Mad. 587 the learned Judges without discussing the question, under very similar
circumstances like the present, say : "" The measure of damages is the amount of profits with interest thereon at 6 per cent. per annum which would
have accrued to the plaintiff if he had been put in possession of the villages and was in enjoyment of the same during the term of the lease."" In my
opinion the observations are fully supported by the English authorities. In Fletcher v. Tayleur (1855) 17 CB 21the defendant had contracted to
build a ship which was to be delivered to the plaintiff in August 1854. It was not delivered till March 1855. It was held that as the primary object
of the ship was to earn freight by carrying passengers, the measure of damages was the value of the profits which could have been obtained
between the date fixed for the delivery and the date on which the ship was actually delivered. Wills, J., stated the law to be "" that the measure of
damages for the breach of a contract for delivery of a chattel should be governed by a similar rule to that which prevails in the case of a breach of
contract for the payment of money "" and concluded by saying "" the measure of damages in such a case as this was held by analogy to be the
average profit made by the use of such a chattel."" In In re Trent and Humber Co. (1868) 4 Ch. A. 112 the Lord Chanceller said: ""The measure of
damages is prima facie the same which would have been earned in the ordinary course of employment of the chattel in the time."" This principle was
accepted as good law in The owners of the steamship '' Grade'' v. The owners of the steamship Argentino (1889) 14 App. Cas. 519. In Jaques v.
Miller (1877) 6 Ch. D. 153 which was a case of an agreement to grant a lease Mr. Justice Fry after examining the case-law on the point said :
The question of damages is a more difficult one. Damages are claimed, in addition to the specific performance of an agreement, in respect of the
delay which was caused by the defendant''s wilful refusal to perform his contract and the consequent loss of profit to the plaintiff. I think I am at
liberty to consider what would have been the value of the possession of the premises to the plaintiff for the period between the 5th of September
1876, and the time when he actually obtained possession of the other premises"". Although this case was overruled by Marshall v. Berridge (1881)
19 Ch. D. 233 on another question the principle as to damages enunciated by the learned Judge was accepted in Royal Bristol Permanent Building
Society v. Bomacha (1887) 35 Ch. D. 390. There are cases which draw a distinction between what are primary and secondary profits. Under the
first heading profits or advantages which are the direct and immediate fruits of the contract are included. Under the latter class profits expected
from dependent and collateral engagements entered into on the faith and in expectation of the performance of the principal contract are brought in.
The decision in Mahabala Bhatta v. Kunhanna Bhatta ILR (1898) M. 372 to which our attention was drawn belongs to the latter category. In the
present case the parties must have contemplated that the plaintiff would have cultivated the lands in a husbandlike manner and that he would have
derived profit therefrom. That undoubtedly is what is known as the primary profits, and there is no reason why the plaintiff should not be entitled to
it. The principle is neatly stated in Sedgwick on Damages Vol. III, Section 984; ""The general principle in this case is the same as in cases of refusal
to convey although the Courts are more nearly agreed in adopting the principle of complete compensation for the loss of the bargain. The ordinary
rule is to allow the ''difference between the rental value of the premises for the term and the rent reserved."" In another place (Section 187) it is
stated: ""The rental value of a building will be the measure of damages in an action for delay in delivering possession."" Applying this test to the
present case it is the net profit which the plaintiff would have derived, that should be awarded to him. The District Munsif was wrong in holding that
the decree which he gave represented the net profit of the lands. From the evidence of the plaintiff it is clear that it was the gross produce. From
this, deduction will have to be made for the expenses of the cultivation and for the failure of season if any, during the period for which damages are
claimed. The amount which has been fixed in the contract should not be the criterion for assessing damages. Further as was pointed out in one of
the cases already quoted the opportunities which the plaintiff had of renting other lands should be taken into account. Therefore before finally
disposing of this case we must ask for a finding on this question namely:
(1) What was the net profit which the plaintiff could have derived during the period he was out of possession ?
The finding should be given on the evidence on record within 6 weeks; and 7 days will be allowed for objections.
Phillips, J.
The question of quantum of damages is somewhat difficult. In Mahamod Esa Khan v. Baboo Kashub Lal (1870) 14 W.R. 382 it was held in a
similar case that plaintiff was only entitled to nominal damages, but in this Court in The Zamindar of Vizianagaram v. Behara Suryanarayana Patrulu
ILR (1901) Mad. 587 it was held that the measure of damages is the amount of profit with interest at 6 per cent per annum which would have
accrued to the plaintiff if he had been put in possession and the issue sent down for trial was "" What is the amount of net profits...which the plaintiff
would have derived from the villages leased to him, if he had been in possession of the villages during the term of the lease ?
Section 73 of the Contract Act lays down the principles to be employed in assessing damages and embodies the principles of English law on the
subject vide Jaques v. Miller (1877) 6 Ch. D. 153 and Mayne on Damages, pages 64-66. The loss or damage must arise naturally in the usual
course of things from the breach or it must be such as the parties knew to be likely to result from the breach. In the present case it may be assumed
that the plaintiff would have cultivated the lands if he had been put into possession. He would therefore be entitled to the net profits that he would
have made by such cultivation. In considering what should be set off against the gross profits, I think it must be assumed that the cultivation was
carried on entirely by hired labour, for if the profit is calculated on the assumption that plaintiff himself worked he would in the shape of
compensation not only receive the value of that labour, but would be able to utilize the same labour for obtaining profit in some other direction.
The explanation to Section 73 further lays down that in estimating the loss, the means which existed of remedying the inconvenience must be
taken into account. In the present case therefore while it may probably be said that plaintiff could not conveniently have obtained other land for the
first year of his lease, the same assumption could not be made for succeeding years and evidence would be necessary to show that he could have
mitigated the loss by taking a lease of other land. With these remarks, therefore, I agree in the order proposed.
[In compliance with the order contained in the above judgment the Subordinate Judge of Cocanada submitted that the net profit the plaintiff could
have derived is as claimed in the plaint which amounts to Rs. 529 for all the 3 years together.]
This Second Appeal coming on for final hearing after the return of the finding of the Lower Appellate Court on the issue referred by this Court
for trial the Court delivered the following
JUDGMENT
We accept the finding and dismiss the Second Appeal with costs.