Dhanu Lal vs Kuldip Narayan Singh and Others

Harries, J.—This is a plaintiff''s appeal from concurrent decrees of the Courts below dismissing the plaintiff''s claim for Rs. 1000 and interest by way of damages or compensation. The plaintiff''s claim with regard to certain other small items was decreed, but nothing arises out of that portion of the decree. The plaintiff was the proprietor of certain property, and the defendants were mukarraridars holding from him. It was alleged that the defendants were liable to pay Government revenue and cesses in respect of the property and that they had failed to do so. Consequently the property had been sold for the payment of these Government dues, and the plaintiff had been compelled to repurchase the property from one Ramkishun for a sum of Rs. 1000. The present suit was brought to recover this sum of Rs. 1000 together with certain costs and for certain other small items which were decreed.

Both the Courts below came to the conclusion that the plaintiff was not entitled to recover this sum of Rs. 1000 together with interest and costs and dismissed this portion of the claim.

The Courts below have held as a fact that the plaintiff knew of the defendants'' failure to pay the Government dues. The amounts due totaled Rs. 9, and both the Courts below have found that the sale could have been avoided if the plaintiff had paid this small sum. The plaintiff, though knowing; that this amount was due, allowed the property to be sold and purchased by Ram kishun.

He subsequently purchased the same for Rs. 1000, and in the view of the lower Courts the plaintiff could not recover, the amount which he spent in recovering; the property because he could have mitigated the whole of the loss by himself paying Rs. 9 before the sale took place. It has been contended by Mr. G.C. Mukherji on behalf of the plaintiff that there was no evidence upon which the Courts could come to the conclusion that the plaintiff knew of the defendants'' failure to pay the Government revenue or cess or knew of the impending sale. Both the Courts below have come to the conclusion that notice issued to the plaintiff by the Certificate Officer informing him that his property was going to be sold in a certificate sale was actually served on Walayat Ali (P.W. 3) some time before the sale took place. Walayat Ali was the plaintiff''s mukhtar, and in evidence he did not deny the receipt of this notice. All he said was that he could not remember whether he had received the notice or not. He then added that the plaintiff had complained to him that he had not been told that this notice had been served.

Mr. Mukherji has contended that service on Walayat Ali was not effective service on the plaintiff because it was not established that Walayat Ali was a person empowered to accept notice on behalf of the plaintiff.

Mr. Mukherji has relied upon Rule 3, Schedule 2, Bihar and Orissa Public Demands Recovery Act; but in my view it is clear from Walayat Ali''s evidence that he was a person empowered to receive such a notice on behalf of the plaintiff. Further, there was evidence that a registered parcel had been sent by the Certificate Officer to the plaintiff. At first the plaintiff denied his signature on the receipt for the parcel; but it is clear that the signature is that of the plaintiff.

This parcel must have contained some notice relating to this certificate sale, and the moment it is held that the plaintiff received this parcel and gave a receipt for it, it follows that he had notice of this intended sale before it took place. In my view there was ample material upon which the Courts below could come to the conclusion that the plaintiff had notice of the impending sale in time to take steps to avoid it. In fact, he could within thirty days of the sale have obtained the property by paying the amount due and a small percentage as compensation. The plaintiff did nothing of the kind but waited and then paid Ramkishun Rs. 1000 and then brought this suit.

The Courts below have held that the plaintiff could, by the exercise of reasonable diligence, have avoided all damage in this case and that being so, they have refused to give the plaintiff any sum in respect of this portion of his claim. Section 73, Contract Act, lays down that if a party is guilty of a breach of contract, the other party is entitled to 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. In the Explanation to this Section however it is laid down that:

In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the nonperformance of the contract must be taken into-account.

The contract sued upon here was a promise by the tenant to pay the Government revenue and cess. There was a breach of this contract the moment the tenant failed to pay the Government dues on due date. At that moment the plaintiff''s property was in jeopardy, and he was entitled to sue for any damages which would be incurred. Clearly after the breach the plaintiff could have avoided all damage by paying Rs. 9 which was the amount due to the Government. He did nothing and allowed the property to be sold. Every person who has a right to damage for breach of contract must take all reasonable steps to mitigate the loss arising from such breach. In the present case payment of a very small sum could have avoided the damage which occurred in this case, and as the plaintiff did not take any step to mitigate his damages, he cannot claim the large amount which he now does in this case.

Mr. Mukherji attempted to argue that there was no breach of contract in this case until the property had been sold; but, as I have stated, the contract sued upon here was a promise by the tenant to pay the Government dues the moment the Government dues were payable; and as there was failure to pay, there was a breach of contract at that moment. The plaintiff had ample time between the date of the breach and the date of the sale for mitigating all the damage which arose from the breach. Mr. Mukherji has however argued in this case that this is not a case of a claim for damages or compensation for breach of contract. According to him, it is a claim for an amount due under a contract of indemnity. It is to be observed that in the plaint the word "indemnity" is never mentioned, and, indeed, there is nothing to suggest that there was any agreement between the parties by which the tenants agreed to indemnify the plaintiff from any loss due to failure to pay Government dues. The case was undoubtedly pleaded as a case of a claim for damages for breach of a promise to pay Government dues.

The learned Munsif treated the case as such and so did the learned Subordinate Judge. In the grounds of appeal to this Court nothing is said about a contract of indemnity. It is assumed in the grounds of appeal that this was a case of a claim for damages for breach of a promise to pay Government dues and nothing more. It is now argued that in the contract between the parties there is a promise amounting to an indemnity; but the contract is not before us, and it has not been printed. Nevertheless, Mr. Mukherji has urged us to allow him to argue this case upon the basis that there is a contract by the defendants to indemnify the plaintiff against all loss in the event of the property being sold.

I am not inclined to allow the plaintiff to change the whole nature of his suit at this stage. He certainly cannot do so without the leave of the Court, because no point as to indemnity is taken in the memorandum of appeal. Even if we allowed Mr. Mukherji to argue this case as a claim arising out of a contract of indemnity, we have not the contract before us and neither of the Courts below have ever had the opportunity of considering it and construing it. In my view, the Court should not, at this stage, allow the plaintiff to change the whole nature of the suit, particularly when even at this late stage the materials for deciding this new case are not before the Court.

The case must be treated as a claim for damages for breach of a promise to pay Government dues, and in my judgment both the Courts below were right in holding that the plaintiff''s claim failed by reason of the fact that he could by the exercise of reasonable care and diligence have avoided the effect of the defendants'' breach. For these reasons I am satisfied that there is no merit in this appeal and accordingly I would dismiss it with costs.

Dhavle, J.

I agree.