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Judgment
N.S. Ramaswami, J.—This civil revision petition is against the dismissal of a suit for recovery of a sum of Rs. 983-16, as damages. The
revision-petitioner who is the plaintiff in the suit sold certain goods to a buyer at Berhampur and the documents were negotiated through the Indian
Bank at Erode. The buyer at Berhampur cleared the documents and took delivery of the goods. The price of the goods paid by the buyer has
reached the plaintiff and there is no dispute regarding the same. However, the C form issued by the buyer at Berhampur did not reach the plaintiff
at Erode and in the absence of the C form the plaintiff had to pay sales tax at 7 per cent, on the value of the goods as against one per cent if such
C form was produced. The sum of Rs. 900 and odd claimed as damages is the difference between 7 per cent tax paid by the plaintiff and one per
cent. which he was bound to pay if the C form was available. Plaintiff impleaded the Indian Bank as the first defendant and the State Bank of India
through whom the Indian Bank put through the transaction as the second defendant. It is now found as a matter of fact that the Berhampur buyer
delivered the C form to the branch of the State Bank of India at Berhampur when he cleared the documents. It is also an established fact that the
said C form received by the State Bank at Berhampur did not reach the plaintiff through the Indian Bank at Erode.
The trial court has in a way held that there was negligence on the part of the defendants in not delivering the C form to the plaintiff. But the claim
of the plaintiff has been negatived on the ground that the commercial tax authorities had levied 7 per cent, tax (and not one per cent tax) not
because the C form had not been produced but for some other cause. The appellate Judge says that the Berhampur buyer got an endorsement on
his licence in respect of the commodity purchased by him only on 6-2-1959 though he is already a registered dealer in respect of other goods, and
that he had issued the C form even on 2-2-1959 and that is the reason why the commercial tax authorities had disallowed the plaintiff''s claim that
only one per cent tax is leviable. The above reasoning of the appellate Judge is factually incorrect. It is true that the Berhampur dealer got an
endorsement regarding the commodity in question, namely, oil, only on 6-2-1959. But it is incorrect to say that he had issued the C form even on
2-2-1959. The order of the Appellate Assistant Commissioner (Commercial taxes) Erode is one of the documents (Ex. A) in this case. That order
extracts the communication from the Commercial tax officer, Ganjam I circle, Berhampur regarding this aspect. That communication clearly says
that from the state of accounts furnished by the Berhampur dealer it was seen that he had issued the1 C form on 7-2-1959 against bill No. 41
dated 2-2-1959 for Rs. 16,386, i.e., after the amendment of the certificate of registration held by him."" It is thus clear that the reference to 2-2-
1959 is only in respect of the bill drawn by the plaintiff and not in respect of the date of the C form issued by Berhampur dealer. The said C form
had been issued only on 7-2-1959, that is the date after the said dealer got his licence endorsed for the goods in question. From the above facts it
is clear that the plaintiff had to pay tax at a higher rate, namely, seven per cent, regarding the transaction in question only due to the absence of the
C form and not for any other reason. There was no defect in the C form itself. As I said earlier, the banks concerned had failed to deliver the C
form to the plaintiff in spite of the admitted fact that the Berhampur dealer had duly supplied the C form at the branch of the State Bank at
Berhampur.
As held in Kesharichand Jaisukhal Vs. The Shillong Banking Corporation, , a banker is bound to act according to the directions given by the
customer and in the absence of such directions according to the usage prevailing at the place where the banker conducts his business and
applicable to the matter in hand; and the banker is also bound to use reasonable skill and diligence in his work.
In the present case, apart from what is stated in the written statement that the Bank at Berhampur had despached the C form to Erode, there is
absolutely no evidence as to what really happened to the said C form. No witness got into box to swear to the circumstances under which the C
form was lost. Therefore it is not possible to hold that the banks concerned in this case had taken all the reasonable care in delivering the C form to
the plaintiff. Under such circumstances the plaintiff would be entitled to claim the damages which he has claimed in the plaint.
The only other question is whether the plaintiff has mitigated the damages. It is stated that the plaintiff could have obtained a duplicate C form
and produced the same before the Commercial tax authorities and avoided paying higher rate of tax. But what has happened in this case is that
when the matter was before the appellate Assistant Commissioner the plaintiff tried to furnish the necessary evidence to show that he did obtain the
C form and the Assistant Commissioner directed him to get a copy of the triplicate of the C form. In fact, the plaintiff did obtain a copy of the
triplicate of the C form and produce the same before the Assistant Commissioner. But ultimately the Assistant Commissioner held that that was not
sufficient for giving the plaintiff relief regarding the tax payable by him in respect of the turnover. Under such circumstances I am unable to hold that
the plaintiff had failed to discharge his duty in mitigating the damages.
In Mayne and McGregor on Damages, in para 158 at page 145, it is observed :--
Although the plaintiff must act with the defendant''s as well as with his own interest in mind, he is only required to act reasonably and the standard
of reasonableness is not high in view of the fact that the defendant is an admitted wrongdoer."" Then in that book the observations of Lord
Macmillan in Banco de Portugal v. Waterlow, 1932 AC 452 have been quoted with approval. In that case, Lord Macmillan said-
Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures
which he may be driven to adopt in order to extricate himself ought not to be weighed, in nice scales at the instance of the party whose breach of
contract has occasioned the difficulty. It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but
such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult
situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held
disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might
have been taken.
On the above standard, I do not believe that the plaintiff bad not acted reasonably in producing only a copy of the triplicate of the C form and
not producing a duplicate of the said form before the Commercial tax authorities. The plaintiff is entitled to a decree.
The further question is as against whom. There is no privity of contract between the plaintiff and the second defendant, namely, the State Bank
of India. That bank has been added as a party-defendant only because the Indian Bank had acted through the State Bank in negotiating the
documents. Therefore the plaintiff is entitled to a decree only as against the first defendant and not against the second defendant. The civil revision
petition is allowed and the suit is decreed with costs in the trial court only as far as the first defendant is concerned, and it is dismissed without cost
as far as the second defendant is concerned. No costs in this civil revision petition.