Dilbar Sarkar vs Joysri Kurmi and A.M. Dunne and Others

This second appeal arises out of a suit brought by the Plaintiff under the following circumstances: It appears that the Plaintiff and the Defendants to the action are jointly interested in a sal forest called Bawangarh, situated in the district of Dinajpore. As considerable damage was caused by the promiscuous cutting down of the trees by the. residents of the locality, the Plaintiff and the Defendants entered into an agreement by which they bound themselves not to cut down any tree in the forest aforesaid for the next ten years, and in case of any breach committed by anyone of them to pay a penalty of Rs. 500. The first clause of the contract sets, out this condition:--"As there is no unity amongst us, and we out down the trees, &c, whenever we respectively please, a great damage is being done to the sal forest; to prevent such damage and to protect the sal forest, we, all the undersigned, by this ekrarnamah executed by us, make the following rules, and stipulate that from this day we shall act upon the said rules made, and shall not be at liberty to act in contravention of the rules, and that if we do a wrong act, we shall be liable for Rs. 500 for infringement of the rules." It appears that the Defendant No. 1 has, in violation of his contract, cut down some sal trees. The Plaintiff has accordingly brought the present suit against him joining the other parties to the agreement as pro forma Defendants with the object of recovering compensation for the tress so cut down and also damages for the breach or infringement of the agreement to which we have already referred. The Defendant took various objections to the Plaintiff''s suit. He contended that the agreement was contrary to law and equity, and denied cutting down any tree, and so forth.

But the Courts below have found as a fact that the Defendant did cut down the trees in violation of the contract, but they have given to the Plaintiff, or rather to the Plaintiff and his co-sharers, the pro forma Defendants, just the value of the trees which they would have had 10 years hence if they were not cut down and have overruled the contention of the Plaintiff that, in view of the nature of the contract, the Defendant ought to be made liable, in the exercise of a proper discretion, for some damages for the infringement of the agreement entered into by him. The Subordinate Judge refers to the judgment in the case of Nait Ram v. Shib Dal I. L. R. 5 All. 288 (1883). as an authority for the proposition enunciated by him that, in cases like this, the Plaintiff is. only entitled to, or, that the Courts need only give to him, compensation measured by the actual loss sustained by the Plaintiff. The facts of the case on which the Subordinate Judge has relied were totally different from those appearing in the present case. In that case the Defendant had agreed to supply a certain quantity of indigo plant at a certain price, and it was stipulated in the bond executed by the Defendants that, on failure of such delivery, the obligors will be liable to pay damages calculated at twice the sum advanced as consideration of the bond. They failed to make the delivery agreed upon, and the learned Judges held in that case, upon the. facts found, that the Plaintiff would be fully compensated by assessing the damages on the basis of the actual loss sustained by them. It seems to us from the circumstances to which we have already referred that the ''principle upon which the learned Judges proceeded in that case does not apply to the facts here. The object of the parties in entering into the agreement in the present case was to prevent the people who were in the habit of entering the sal forest from doing injury to the trees or to the forest by cutting down wood, and. with a view to prevent that in the future, until at least such time as the trees grew up to a proper height, they bound themselves deliberately not to cut down any tree and, in case anyone of them infringed the contract thus solemnly entered into by them, they stipulated that he would be liable to pay a penalty of Es. 500. Undoubtedly, sec. 74 of the Contract Act has clone away with the distinction between a penalty and liquidated damages and although, generally speaking, the distinction between these two classes of damages is fine, yet it is desirable to bear in mind that in some cases there is a broad distinction, In this case undoubtedly the sum agreed upon by way of damages was agreed upon as a penalty.

In the case of The Bramaputra Tea Co., Ld. v. Scarth I. L. K, 11 Cal. 545 at p. 550 (1884), which came up to this Court as an appeal from original decree, the learned Judges pointed out various circumstances which, in matters of this kind, ought to be kept in view for the assessment of damages. They say "the remaining contention is that the sum awarded as compensation for the breach of the condition in the 8th clause is unreasonably small..The. case clearly falls within sec. 74 of the contrect act the effect of which was to do awey with the distinction between liquidated damages and a penalty, and to leave it to the Court in all case in which a sum is named in the contract as the amount to be paid, to award against the party who has broken the contract reasonable compensation not exceeding the sum named. It is clear that the Court might have awarded the full sum stipulated without any proof of damages or loss. The Plaintiff'' gave no proof of actual damage or loss, and the Court assessed the damages with reference wholly to the increased emoluments which the Defendant had drawn subsequent to the time when the agreement came into operation. Though averse to interfere with the decision of the Judge on this point, we think ho has not exercised his powers rightly or discreetly in this matter. The agreement was deliberately entered into and as deliberately broken. The Company refused to assent to the Defendant''s leaving before his time. He not only went, but took service as manager of a neighbouring factory."

In this case, no doubt, evidence was given regarding the actual value of the trees which were cut down by the Defendants. It seems to us that that can in no way be regarded as a measure for assessing the damages to the general body of persons who entered into that agreement for the protection of the forest. The learned Judge in the Court below ought, in our opinion, to have fixed some reasonable sum, of course not exceeding Rs. 500 agreed upon between the parties, as would be likely to prevent any repetition of the wrongful conduct on the part of the Defendant. As we are, however, not in a position to assess the damages the course which we think we ought to take is to remit the case to the learned Subordinate Judge to deal with it in view of the observations we have made. The Plaintiff will be entitled to his costs in this Court.