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Judgment
Sengottuvelan, J.—This appeal is filed by the Government of Tamil Nadu represented by the Department of Agriculture, the defendant in the suit in O.S. No. l43 of 1974 on the file of the Original Side of this Court, against the judgment and decree passed in the said suit by Padmanabhan, J., awarding a sum of Rs. 26,79,930-50 with interest at 12 per cent from the date of cancellation of lease amounting to Rs. 9,64,775 totalling Rs. 36,44,705-50 and future interest from the date of the suit till the date of decree to the respondent herein. The facts of the case are briefly as follows:-In 1970 the Director of Fisheries, Madras called for sealed tenders for the lease of the right to fish, take and carry away chank shells from the Government Chank Fisheries, of (1) Palk Bay region of Ramanathapuram District; (2) The coast of Kanyakumari District; (3) the coast of Chingleput District including Madras and South Arcot and excluding the French Kuppam of Pondicherry; (4) the coast of Thanjavur District excluding the chank fishery of the French Kuppam of Karaikal and also excluding the Thanjavur coast from Puthukudu to Point Calimere; and (5) The coast line of Ramanathapuram District i.e. from Sundarapandian Pattinam to Karangadu in the Palk Bay, generally known as Sivaganga Fishery. The tenders were called for by the notification dated 17th August, 1970. The respondent, a partnership firm submitted tenders along with others. The tenders submitted by the respondent being the highest was accepted by the Government of Tamil Nadu, the appellant herein. The bid amount of the respondent in respect of several fisheries which were accepted by the appellant are as follows:-
1.
region
Rs. 81,001
2.
Kanyakumari region
Rs. 9,501
3.
South Arcot, Chingleput and region
Rs. 85,087
4.
Thanjavur region
Rs. 81,082
5:
Sivaganga region
Rs. 45,601
The respondent also executed lease deeds in respect of the above said fisheries in favour of the appellant. According to the lease deeds the respondent was permitted to collect chanks from the various regions upto the limits prescribed in the lease deeds in respect of each fishery. The particulars of the lease as evidenced by the lease deeds can conveniently be stated by means of a tabulation:-
S. No.
Ex. No.
Name of the Fisheries
Period of lease
Lease amount
Limit upto which chanks can be collected
Security deposit.
1.
P-11
region
From 2-2-1971 to 1-2-74
Rs. 81,000/ - per annum to be paid half yearly in advance.
6,00,000 full sized chanks of size of 57.15 m.m. per year.
Rs. 8,100
2.
P-12
Kanyakumari region
-do-
Rs. 9,501/ - per annum to be paid yearly in advance.
1,50,000 full sized chanks per year.
Rs. 95070
3.
P-13
South Arcot, Chingleput and region.
�do-
Rs. 85,087/ - per annum to be paid half yearly in advance.
1,75,000 full sized chanks per year.
Rs. 8,508-70
4.
P-14
Thanjavur region
�do-
Rs. 81,082/ - per annum to be paid half yearly in advance.
2,00,000 full sized chanks per year.
Rs. 8,108-20
5.
P-15
Sivaganga region
�do-
Rs. 45,601/ - per annum to be paid half yearly in advance.
3,00,000 full sized chanks per year
Rs. 4,560-10
As per the terms of the abovesaid lease agreement, viz., Exs. P11 to P15, the respondent took possession of the fisheries on 2nd February, 1971. The case of the respondent is that immediately thereafter the appellant prevented the respondent from enjoying the right to fish in Palk Bay and Sivaganga regions by the non-co-operation of the appellant and its refusal to render the respondent the necessary assistance. On 7th March, 1971 the respondent sent a notice Ex.P17 through their Advocate to the Secretary to Government of Tamil Nadu complaining about their being prevented from having quiet possession and peaceful enjoyment of the leasehold rights and privileges and calling upon the appellant to render all assistance in the matter of peaceful fishing of the chanks. There was no disturbance from others from 14th March, 1971 for some days. However, by means of the proceedings of the Director of Fisheries, marked as exhibits P23 to P26 the appellant unilaterally, cancelled all the leases. No notice was given to the respondent to show cause why the leases should not be cancelled. The case of the respondent herein and the plaintiff in the suit before the learned trial judge is that he respondent was put to great loss by the unilateral cancellation of the leases. On the basis of the lease agreements the Respondent had invested more than Rs. 5,00,000 for the purpose of carrying out the fishing operation. Therefore the respondent issued a lawyer''s notice Ex.P27 to the appellant on 6th July, 1971 under S.80 of the CPC claiming a sum of Rs. 27,65,544 as damages. The appellant did not send any reply. The appellant repaid the respondent a sum of Rs. 48,175-68 being the balance of lease amount remitted by the respondent after deducting the lease amount payable for the period during which the lease was in force, which the respondent received under protest. The appellant also refunded the security deposit of Rs. 30,227-10. The respondent herein, the plaintiff in the suit, filed the suit for recovery of damages to the extent of Rs. 27,65,544 with future interest and costs. 3. In the written statement filed in the suit the appellant herein and the defendant in the suit denied the allegation that the respondent was prevented from enjoying the fisherie-right in respect of Palk Bay and Sivaganga regions. The respondent enjoyed the rights granted under the different agreements till 10th June, 1971 on which date the agreements were cancelled by the appellant. C1.11 of Ex.p111 and C1.7 of Exs.P12 to P15, the agreements relating to the several leases, enable the appellant to cancel the agreement without assigning any reason therefor. The agreements did not call for any notice being given before the cancellation of the lease. The appellant cancelled the lease in the larger interest of the public. The clause relating to cancellation of the lease without assigning any reasons is binding on the respondent and the respondent having taken the lease subject to said clause and having enjoyed the fruits thereof is estopped from contending against the tenor of the agreements. The allegation that the respondent had invested about Rs. 5,00,000 in pursuance of the agreement is denied. The appellant denied the factum and the quantum of damages alleged in the plaint. It is also contended that if the number of chanks fished by the earlier lessees are taken into consideration it will be evident that the respondent could not have obtained the maximum number of chanks mentioned in the agreements. In the additional written statement filed on behalf of the appellant it is contended that what was granted under the above said five agreements Exs.p111 to P15 was only a licence to fish chanks in the different regions and that consequently the licence is revocable at the will of the lessor and the appellant is entitled to cancel the same without notice. The learned trial Judge on the basis of the abovesaid pleadings framed the following Issues:-
Whether the termination of the lease agreement by the defendant is illegal and not valid?
Was the Plaintiff prevented from enjoying fishery right to the Palk Bay and Sivaganga regions?
Is the Plaintiff entitled to any damages and if so to what amount?
To what relief are the parties entitled?
Additional Issues:
Whether the agreements created a lease in favour of the plaintiff or only conferred a licence in favour of the plaintiff to collect and carry away chanks?
Whether the claim towards damages in respect of Kanyakumari region on the enhanced amount of Rs. 6,92,649-86 is barred by limitation?
In dealing with the additional Issue No. l Padmanabhan, J., after referring to the cases reported in Ananda Behera and Another Vs. The State of Orissa and Another, and The Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. Vs. Sipahi Singh and Others, , observed that the right to collect and carry away chanks is in the nature of a profit a prendre, i.e., a profit or benefit arising out of the land, and came to the conclusion that the right to collect and carry away the chanks from the sea bed is a benefit arising out of the land as in the case of a right to catch and carry fish from a lake and as such it is an interest in immovable property. Then, the learned trial Judge proceeded to discuss the question whether the right conferred under Exs.p111 to P15 is a lease or a licence. After referring to the definition of licence in S. 52 of the Indian Easement Act and the distinction between the lease and the licence laid down in the cases reported in Board of Revenue v. South Indian Co. Ltd. ILR 48 Mad. 368 Associated Hotels of India Ltd. Vs. R.N. Kapoor, Mrs. M.N. Clubwala and Another Vs. Fida Hussain Saheb and Others, , Konchada Ramamurthy Subudhi and Another Vs. Gopinath Naik, , The State of West Bengal Vs. Shebaits of Iswar Sri Saradia Thakurani and Others, Panchapakesan v. Swaminathan 1971 II M.L.J. 169: 84 L.W. 800, Board of Revenue and Others Vs. A.M. Ansari and Others, and Ananda Beher a v. State of Orissa1, came to the conclusion that the right conferred under the agreements Exs.p111 to P15 are in the nature of a licence coupled with interest. Further, the learned Judge is of the view that the right conferred under the above said agreements which is a licence coupled with a grant or a licence with profit a prendre are not revocable under S.60 of the Easements Act.
On Issue No. l the learned Judge held that the unilateral power of the defendant to cancel the agreements at their own will without assigning any reason therefor which is incorporated in C1. 11 of Ex.p111 and C1.7 of Exs.P12 to P15 is null and void. After referring to the case reported in Kanwar Lal Thapper Vs. Raja Bahadur Kamakhya Narayan Singh and Another, , holding that where a fixed term is mentioned and an option is given to the lessor to determine the lease whenever he desires, such option is void for repugnancy, the learned Judge quoted with approval the head note from the judgment of Rajamannar, C.J., found in Maddala Thathiah Vs. Union of India (UOI),
Where there is an enforceable concluded contract between two parties subject to a condition that it is open to one of the parties to say at any time that the contract is not enforceable, such a condition has the effect of actually or possibly destroying the contract altogether at the whim and fancy of one of the parties to the contract. Such a clause has to be rejected as unenforceable.
The learned Judge also relied on the English decision reported in Furnivali V. Coombes 134 E.R. 756 and Forbes v. Git L.R. 1922-I A.C 256 and came to the conclusion that if in a deed an earlier clause is followed by a latter clause which destroys altogether the obligation created by the earlier clause the latter clause has to be rejected as repugnant and the earlier has to prevail. Applying the same principle to the terms of the lease in the present case the learned Judge held that since a fixed term is mentioned with an option to the lessor to determine the lease whenever he desires, the latter must be taken to be void due to repugnancy. The learned Judge also quoted with approval the following passage reported in International Oil Co. Vs. Indian Oil Co. Ltd. now known as Indian Oil Corp. Ltd., Madras,
In all indefinite mercantile or commercial contracts, the question whether the relationship of principal and agent can be terminated by a reasonable notice or only by mutual consent is one of construction subject to the rules of law. There is no general rule of permanence. An agency may be terminated in various ways. If the termination of agency by the principal is inequitable or works an unjust hardship on the agent, the law requires a reasonable notice to be given. An absolute power of cancellation of contract cannot be validly reserved in favour of one of the parties.
In the instant case the Indian Oil Corporation had reserved an absolute power of cancellation of the contract of agency and has actually cancelled the agency without assigning any valid reasons. Such a clause in the contract is absolutely illegal, irregular and void. It is true the agent had knowledge of the existence in the agreement of the sword of Damocles'' termination clause. Even then it is unfair on the part of the Corporation to terminate the agency without due regard to the equities of an agent, without just provocation and without any notice.
Eventually the learned Judge came to the conclusion that the term occurring in C1. 11 of Ex.P11 and C1.7 of Exs.P12 to P15 are illegal and void and held that the defendant is not entitled to cancel the contract unilaterally relying on the above said clauses which confer unilateral and arbitrary power on the defendant to cancel the contract at their own will without assigning any reasons therefor. The learned Judge also came to the conclusion that the above said clauses providing for cancellation of the contract are void for repugnancy to the earlier clause which prescribes a period of three years as the duration of the contract.
The learned Judge also did not accept the argument on behalf of the defendant, the appellant herein, that the provisions of the Governments Grants Act will apply in respect of the above said contracts. In dealing with the applicability of S.2 of the Government Grants Act, which declares that the provisions of the Transfer of Property Act are not applicable to Government grants, the learned Judge referred to the following decisions of the Allahabad High Court. In Zahoor Ahmad Abdul Sattar Vs. State of Uttar Pradesh and Another, , the Allahabad High Court observed as follows:-
S.2 of the Government Grants Act does not render all the provisions of the T.P. Act inapplicable to lands held under grant by the Government, but the meaning of the section is that when the Court is called upon to construe an instrument granting land by the Government, it shall construe each grant irrespective of the provisions of the T.P, Act. The ultimate portion of S.2 of the Act, viz., ''but every such grant and transfer shall be construed and take effect as if the said Act had not been passed'', is the key to the understanding of the section. It provides that if the grant ever comes to be construed, then the Court shall construe such grant irrespective of the provisions of the T.P. Act. For instance, S 14 of the T.P. Act provides what is known as the rule against perpetuity. In case of a grant made by the Government, this rule will, not apply.
On appeal against the judgment in the above said case, the Supreme Court in The State of U.P. Vs. Zahoor Ahmad and Another, , observed as follows:-
S.2 of the Government Grants Act does not mean that all the provisions of the Transfer of Property Act are inapplicable. To illustrate, in the case of a grant under the Government Grants Act S 14 of the Transfer of Property Act will not apply because S.l4 which provides what is known as the rule against perpetuity will not apply by reason of the provisions in the Government Grants Act. The grant shall be construed to take effect as if the Transfer of Property Act does not apply. S.3 of the Government Grants Act declares the unfettered discretion of the Government to impose such conditions and limitations as it thinks fit, no matter what the general law of the land be. The meaning of Ss.2 and 3 of the Government Grants Act is that the scope of that Act is nor limited to affecting the provisions of the Transfer of Property Act only. The Government has unfettered discretion to impose any conditions, limitations or restrictions in its grants, and the right, privileges and obligations of the grantee would be regulated according to the terms of the grant, notwithstanding any provisions of any statutory or common law.
The learned Judge also extracted an observation of the Allahabad High Court as in the case reported in Dost Mohammad Khan v. Sank of Upper India 1506-3 All.L.J. 628, where a Crown grant was mortgaged and it was claimed that the grant was not subject to the right of sale by the mortgagee, the Allahabad High Court repelled such a contention. The relevant passage in the judgment is as follows:-
It is difficult to interpret S.2 of the Crown Grants Act but from a perusal of the preamble to the Act it is reasonably clear that the object of the Legislature in passing the Act was to validate any provisions, restrictions, conditions and limitations which might be contained in any Crown Grant and which otherwise might be held to be obnoxious to the restrictions imposed in respect of grants generally by the Transfer of Property Act. We do not think that it was intended by the Legislature that unconditional grants made by the Crown, free from restrictions, as to alienation ,should not be the subject of a sale in a suit by the mortgagee.
The learned Judge observed that in so far as this case is concerned S.2 of the Government Grants Act has no relevancy at all and the only relevant provision that is applicable is S.3 of the Government Grants Act. As per S.3 of the Government Grants Act, all provisions, restrictions, conditions and limitations contained in any such grant or transfer by the Government shall be valid and take effect according to their tenor, notwithstanding any rule of law, statute or enactment of the legislature. But the learned Judge did not apply the provisions of S.3 of the Government Grants Act since there is no plea in the written statement that what has been conferred upon the plaintiff, the respondent herein, under Exs.p111 to P15 are Government grants, coming within the meaning of the Government Grants Act. Eventually the learned Judge, after referring to the decision of the Division Bench of this Court reported in Maddala Thathiah Vs. Union of India (UOI), where Raja-mannar, Chief Justice, held that where there is an enforceable concluded contract between two parties subject to a condition that it is open to one of the parties to say at any time that the contract is not enforceable, such a condition has the effect of actually or possibly destroying the contract altogether at the whim and fancy of one of the parties to the contract and such a clause has to be rejected as unenforceable, came to the conclusion that the cancellation of the agreements Exs.p111 to P15 was illegal and invalid.
On Issue No. 2, regarding the question whether the plaintiff was prevented from enjoying the fishery right in the Palk Bay and Sivaganga regions, the learned Judge accepting the evidence of P.Ws. l to 3 that one Mangalaswami, an office-bearer of the Fishermen Association and other fishermen had obstructed the exercise of the rights by the plaintiff as lessee of the above said chank fisheries and also accepting the version of P.Ws. that the Fisheries Department did not take effective steps to prevent the obstruction caused by Mangalaswami and his associates against the exercise of the rights by the Plaintiff, came to the conclusion that the plaintiff was prevented from enjoying the fishery rights in Palk Bay and Sivaganga regions.
On Additional Issue No. 2, the learned Judge came to the conclusion that the enhanced claim put forward by the plaintiff by way of an amendment to the plaint in respect of damages relating to Kanyakumari region is not barred by limitation.
On Issue No. 3 relating to the question whether the plaintiff is entitled to any damage, and if so, to what amount, the learned Judge referred to S. 73 of the Contract Actwhich states that when a contract has been broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract, 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 know, when they made the contract, to be likely to result from the breach of it and the observation in the well known decision in Hadley v. Baxendale 1854-9 Ex. 341, which is as follows:-
''Where two parties have made contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated.
The learned Judge also referred to the decision reported in Venkatarama Sastrulu v. Nama Venkanna AIR 1920 Mad. 867, where the principle in arriving at the damages for breach of contract is stated as:-
The loss or damages must arise naturally in the usual course of things from the breach or it must be such as the parties know to be likely to result from the breach.
The learned Judge also referred to Illustration (a) to S.73 of the Contract Act which states that the measure of damages upon a breach by a buyer is the difference between the contract price and the market price on the date of the breach and observed that the present case is more or less similar to a case covered by Illustration (a) to S.73 of the Contract Act. Though the learned Judge observed that Exs. P11 to P15 cannot be characterised to be the agreements to sell goods, the same relate to a similar transaction since the plaintiff has been permitted by the above said agreements to catch and carry away a particular quantity of chanks from different regions. The learned Judge also accepted the evidence of P.W. 3 that there is a great demand for these chanks particularly in West Bengal. On the question of measure of damages the learned Judge came to the conclusion that the plaintiff is entitled to the difference between the cost price of the chanks that would have been incurred by the plaintiff in case the lease agreements, Exs. Pll to P15 had been acted upon and the market price prevalent after the cancellation of the lease. The learned Judge also observed that on account of cancellation of the lease the plaintiff had been obliged to buy at the market rate. The learned Judge eventually, after setting out the principle in Murlidhar Chiranjilal Vs. Harishchandra Dwarkadas and Another, that the first principle on which damages in cases of breach of contract are calculated is that, as far as possible, he who has proved a breach of a bargain to supply what he contracts to get is to be placed, as far as money can do it, in as good a situation as if the contract can be performed, calculated the cost of the chanks as per Ex.p111 in respect of Palk Bay region after taking into consideration the cost of the price paid by the plaintiff as evidenced by Exs. P62, P72 and arrived at Rs. 11,25,000 as the damages sustained by the plaintiff in respect of Palk Bay region.
In so far as South Arcot, Chingleput and Madras regions are concerned the learned Judge after calculating the cost of the chanks as per Ex. P13 and after taking into consideration the cost of the chanks purchased after cancellation as evidenced by Exs. P-74 and P80, arrived at the difference between the contract price and the market price Rs. 3,61,294 as the quantum of damages in the above said region.
With reference to Thanjavur region the learned Judge calculated the cost price of the chanks as per Ex.P14 and the price paid by the plaintiff as per Exs.P74 and P75 and came to the conclusion that the difference in price, viz., Rs. 2,61,794 will be the quantum of damage in Thanjavur region.
As far as Sivaganga region is concerned the learned Judge calculated the cost price of the chanks as per Ex.P15 and the price paid by the plaintiff as per Ex. P72 and came to the conclusion that the difference in price, viz., Rs. 2,25,000 will be the quantum of damage in respect of Sivaganga Region.
As far as Kanyakumari region is concerned the learned Judge calculated the cost price of the chanks as per Ex. P12 and the price paid by the plaintiff as evidenced by Ex. P95 and came to the conclusion that the difference in price, viz., Rs. 7,48,326 will be the quantum of damage in Kanyakumari region.
For taking into consideration the chanks that could have been fished by the plaintiff the learned Judge assumed that the maximum quantity prescribed in the agreements, Exs.P11 to P15 would have been fished by the plaintiff and proceeded to assess the damages on that basis. The learned Judge also observed that the fact that during 1967-1970 the very same plaintiff and the other lessee T.S. Abdul Kader and Company were not able to reach the ceiling limit will not in any way affect the claim of the plaintiff for damages on the basis that he would have got the maximum number of chanks mentioned in Exs.P11 to P15. The learned Judge also rejected the documents, Exs.P115, 124, 125 and 126 wherein the plaintiff himself had given the price of the chanks in Ramanathapuram before the declaration of free chank fishery and the price prevailing after the declaration of free chank fishery and preferred to rely upon the bills produced by the plaintiff in the matter of calculation of damages and spoken to by P.Ws. and calculated the damages on the difference between the price alleged to have been paid by the plaintiff after the cancellation of the lease and the cost which would have been incurred by the plaintiff if he had operated the chank fisheries as per Exs.P11 to P15. The learned Judge thus arrived at the quantum of damages at Rs. 27,21,404 for all the above said chank fisheries. The learned Judge also came to the conclusion that the plaintiff is entitled to six per cent interest on the above said sum from the date of the suit till the date of payment.
Though in the grounds of appeal the appellant/the State of Tamil Nadu represented by the Secretary to Government, Department of Agriculture, challenged all the findings of the learned trial Judge, during the course of the argument the correctness of the judgment of the learned trial Judge was challenged mainly on the following two grounds:-
(1) The provisions of the Government Grants Act, 1895 apply to this case and as such all the terms of the lease are enforceable in spite of the provisions of the Contract Act and the Transfer of Property Act. Hence the finding of the learned trial Judge that C1.11 of Ex.P11 andC1.7 of Exs.P12 to P15 empowering the Government to cancel the lease without assigning any reason at any time is void and unenforceable cannot be sustained,
(2) In any event the basis adopted for calculating the quantum of damage is not correct
Hence the points for determination that arise in the appeal are as follows-
Whether the finding of the learned trial Judge that the clauses in the agreements of lease, viz., Exs.P11 to P15, empowering the Government to cancel the lease at any time without assigning any reason is void and unenforceable, is sustainable in view of the provisions of the Government Grants Act?
Whether the basis on which the quantum of damage arrived at by the learned trial Judge is sustainable?
Before entering into a discussion on the first point we will have to ascertain the nature of right conveyed under the agreements, Exs.P11 to P15. The transaction in question related to the fishing and carrying away the chanks found in the regions of Palk Bay, Kanyakumari, South Arcot, Chingleput and Madras, Thanjavur and Sivaganga. In these areas in certain parts of the Sea, certain types of worms grow on the sea-bed and such sea-bed is called "Poochi Manal". The chanks grow on these worms and mature into several types depending upon the region. There are two types of chanks, viz., Jadhi chanks and Patti Chanks. The Jadhi chanks are more valuable than the patti chanks. Valampuri chanks, a rare variety of chanks, is of great value. The ancient rulers of Tamil Nadu had been exploiting the chank fisheries in the east-coast of Tamil Nadu from time immemorial. That right had devolved on the subsequent rulers, viz., Nawabs of Arcot, the British and afterwards the Union of India. The right vested with the sovereign was enjoyed by leasing out the right to fish and take away the chanks by diving or netting and the proceeds of the lease were appropriated by the sovereign from time immemorial. In the year 1962, the fishermen residing in Sivaganga coast of Ramanathapuram District made an attempt to challenge the rights of the Government by filing writ petitions in W.P. Nos. 915 and 916 of 1962 reported in P.S.A. Susai and another v. The Director of Fisheries Mount Road, Madras and another (1965) 2 M.L.J. 35 on the ground they have been fishing and carrying away the chanks in the chank fisheries from time immemorial and that the Government is not entitled to lease out either under the provisions of the Indian Fisheries Act, 1897 or any other enactment and that the right to fish the chanks in the Sivaganga coast is a fundamental right available to the fishermen under Art.19(1)(g) of the Constitution of India. In that case Veeraswami, J., as he then was, dealt with in extensive the origin and development of the chank fisheries on the East-coast of Tamil Nadu from ancient times upto the present day and came to the conclusion that the sovereign had the right to exploit the chank fisheries from time immemorial and as such the fishermen cannot question the right of the Fisheries Department to lease out the chank fisheries.
The question that arises in this case is whether the right conveyed by the Government of Tamil Nadu to the lessee of a chank fishery is a right in immovable property. The plea of the plaintiff, the respondent herein, is that such a lease is a lease of immovable property. In support of the case of the respondent, reliance is placed upon the case reported in The The Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. Vs. Sipahi Singh and Others, where the Supreme Court observed as follows:-
The right to catch and carry away the fish being a Profit a prendre i.e., a profit or benefit arising out of the land, it has to be regarded as immovable property within the meaning of the Transfer of Property Act read in the light of S.3(26) of the General Clauses Act.
In the case reported in K.T.M.T.M. Abdul Kayoom and another v. The Commissioner of income tax, Madras ILR 1953 Mad. 1133=66 L.W. 1117 (F.B.), a Full Bench of this Court in dealing with the nature of the rights acquired by a lessee of a chank fishery observed that the amount of lease paid by the lessee is a capital expenditure. In the course of the judgment the Full Bench quoted with approval the following passage from the case reported in Kauri Timber Company Limited v. Commissioner of Taxes 1913 A.C. 771 :
The principle of these decisions appears to be this: that whenever at the time of the contract it is contemplated that the purchasers should derive a benefit from the further growth of the thing sold from further vegetation and from the nutriment afforded by the land, the contract is to be considered as for the interest in land; but where the process of vegetation is over, or the parties agree that the thing sold shall be immediately withdrawn from the land, the land is to be considered as a mere warehouse of the things sold and the contract is for good.
On appeal against the decision of the Full Bench in the above case, viz., in K.T.M.T.M. Abdul Kayoom and another v. The Commissioner of income tax, Madras ILR 1953 Mad. 1133=66 L.W. 1117 (F.B.), the Supreme Court held in K.T.M.T.M. Abdul Kayoom and another v. The Commissioner of income tax, Madras AIR 1962 S.C. 68, that the lease amount paid by the lessee of a chank fishery is a capital expenditure spent for acquiring right to fish the chanks. In the case reported in Ananda Behera and Another Vs. The State of Orissa and Another, the Supreme Court laid down that the sale of a right to catch and carry away fish in specific portions of the lake over a specified future period amounts to a licence to enter on the land coupled with a grant to catch and carry away the fish, that is to say, it is a profit a prendre, which is regarded in India as a benefit that arises out of the land and as such is an immovable property. In the case reported in The Srirangam Municipality v. Nataraja Pillai AIR 1972 Mad. 433=85 L.W. 318, Raraanujam, J., while construing the right of a lessee to cut the grass for a period of three years in the sewage farm maintained by the Srirangam Municipality, observed as follows:-
The grantee is entitled not only to the grass which has grown at the time of execution of the deed but also to the subsequent growth for the period mentioned in the deed. As such he acquires a right in the land under that deed and is a lessee. The owner reserving a right to terminate the arrangement after notice or on grantee contravening its terms will not make it a licence.
The learned trial Judge after considering the material on record and the decisions cited above came to the conclusion that the right that is conferred on the plaintiff under Exs.P11 to P15 is a licence coupled with interest in immovable property. In fact the finding of the learned trial Judge that what was granted is a right in immovable property is not seriously challenged by the appellant before us in spite of the fact a plea was taken in the additional written statement to the effect that what was given to the plaintiff is a mere licence which is liable to be revoked by the grantor at any time.
The main argument on behalf of the appellant is that the right conferred under Exs.P11 to P15 being a right in respect of an immovable property the right conveyed to the lessee amounts to a Government grant to which the provisions of the Government Grants Act apply. The meaning and the implication of the word "grant" is explained in the case reported in Mohan Ali and others v. State of Madhya Pradesh (1975) II S.C.W.R. 511 where the following observation is found:-
In the widest sense, ''grant'' may comprehend everything that is granted or passed from one to another by deed. But commonly the term is applied to rights created or transferred by the Crown, e.g. grants of pensions, patents, charters, franchise, etc.
The right granted under Exs.p111 to P15 being a right in immovable property granted by the Government the transaction is welt within the definition of the term-a grant. The case of the appellant is that in view of the provisions of the Government Grants Act, C1.11 of the agreement Ex.p111 and C1.7 of the agreements Exs.P112 to P15 enabling the Government to cancel the lease without assigning any reason cannot be said to be void and inoperative as contended by the respondent. As per S.2 of the Government Grants Act the Transfer of Property Act, 1882 shall not apply to any grant by the Government and every such grant and Transfer will have to be construed as if the Transfer of Property Act had not been passed. S.3 of the Government Grants Acts is as follows:-
All provisions, restrictions, conditions and limitations contained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding.
The meaning of S.2 of the Government Grants Act is that when the court is called upon to construe a Government grant it shall construe such grant irrespective of the provisions of the Transfer of Property Act. According to S.3 of the Government Grants Act, the Government has an unfettered discretion under that section to impose any condition, limitation or restriction in its grants and the rights, privileges and obligations of the grantee would be regulated only according to the terms of the grant itself even if the same are inconsistent with the provisions of any statute or common law. The result is that the Government is entitled to put such conditions in a grant which a private individual could not. In the case reported in The State of Madras, represented by the Collector of Madras and another v. T.M. Osman Haji and Co. ILR 1970 Mad. 154=82 L.W. 283, a Division Bench of this Court held that S.3 of the Government Grants Act prevails over the provisions of the Madras City Tenant''s Protection Act. In the case reported in State of V.P. v. Zahoor Ahmad and another 1974-1 S.C.R. 344, in dealing with a lease by the Government for the purpose of erecting a temporary rice mill the Supreme Court observed as follows:
S.3 of the Government Grants Act declares the unfettered discretion of the Government to impose such conditions and limitations as it thinks fit, no matter what the general law of the land be. The meaning of Ss.2 and 3 of the Government Grants Act is that the scope of that Act is not limited to affecting the provisions of the Transfer of Property Act only. The Government has unfettered discretion to impose any conditions, limitations or restrictions in its grants, and the right, principles and obligations of the grantee would be regulated according to the terms of the grant, notwithstanding any provisions of any statutory or common law.
In the case reported in Raja Rajinder Chand Vs. Sukhi, the Supreme Court made the following observation:-
It is, we think, well settled that the ordinary rule applicable to grants made by a subject does not apply to grants made by the sovereign authority and grants made by the Sovereign are to be construed most favourably for the Sovereign. This general rule, however, is capable of important relaxations in favour of the subject. It is necessary to refer here to such only of these relaxations as have a bearing on the construction of the document before us; thus, if the intention is obvious, a fair and liberal interpretation must be given to the grant to enable it to take effect and the operative part if plainly expressed, may take effect notwithstanding qualifications in the recitals. In cases where the grant is for valuable consideration, it is construed in favour of the grantee, for the honour of the Sovereign and where two constructions are possible, one valid and the other void, that which is valid ought to be preferred, for the honour of the Sovereign ought to be more regarded than the Sovereign''s profit.
In view of the above decisions we have no hesitation in accepting the contention of the appellant that the lease evidenced by Exs.P111 to P15 which amounts to an interest in immovable property is a transaction to which the provisions of the Government Grants Act are applicable.
On behalf of the respondent reliance is placed upon the case reported in Secy. of State Vs. Lal Mohan Choudhury and Others, where a Division Bench of the Calcutta High Court observed that the position of the Government in regard to khas mahal lands is that of an ordinary landlord, the Government occupying no higher position than that of a Zamindar, where the settlement granted to the lessee was by an officer of the Government in charge of a khas mahal; in case of a transfer by the lessee of such settlement ''pendente lite'', S.52 of the Transfer of Property Act was applicable and the provisions of the Government Grants Act will not apply to such a case. The Calcutta High Court had also observed that the position of the Government in regard to khas mahal lands, is that of an ordinary landlord, the Government occupying no higher position than that of a Zamindar and the Government was in possession of the khas mahal merely as a private proprietor. The provisions of the Government Grants Act were not applied in that case since what was dealt with in that case is not anything pertaining to the rights of the Crown. But in the present case the right to lease out the chank fisheries being the prerogative of the Government, the principle laid down in the above decision cannot be applied to the facts of the present case.
It is true that the plea that the provisions of the Government Grants Act are applicable to the facts of this case is not taken in the written statement, it is purely a legal; plea and the points of law need not be pleaded in the written statement. Even during the argument before the learned trial Judge reliance was placed on the provisions of the Government Grants Acts by the defendant and the said plea had also been considered and negatived by the learned trial Judge. Under the circumstances the plea that the provisions of the Government Grants Act apply to the facts of this case being a legal plea need not be taken in the written statement and further since the said plea had been put forward even before the learned trial Judge, there is no element of surprise in it any the respondent herein will not be prejudiced in any way.
The learned trial Judge relying upon the principle laid down in Maddala Thathiah Vs. Union of India (UOI), came to the conclusion that C1.11 of the agreement Ex.P111 and clause 7 of the agreement Exs.P112 to P15 in this case are void land unenforceable. In that decision a Division Bench of this Court had laid down that where there is an enforceable concluded contract between two parties subject to a condition that it is open to one of the parties to say at any time that the contract is not enforceable, such a condition has the effect of actually or possibly destroying the contract altogether at the whim and fancy of one of the parties to the contract. Such a clause has to be rejected as unenforceable. No doubt such a clause relating to the cancellation of contract in respect of ordinary contracts will be void. But in cases where the provisions of the Government Grants Act apply such a clause will be valid in view of S. 3 of the said Act. In as much as we have held that the provisions of the Government Grants Act will apply to the contract in question the principle laid down in the above decision rendered under the Transfer of Property Act cannot be said to apply to the facts of this case.
The decision of the learned trial Judge on this point had been rendered without taking into consideration the provisions of the Government Grants Act. In the case reported in P.S.A. Susai and another v. The Director of Fisheries, Mount Road, Madras and another (1965,) 2 M.L.J. 35 Veeraswami, J., as he then was, quoted with approval the following passage from the case reported in Young v. Bristol Aeroplane Co. Ltd., (1944) 2All. E.R. 293 at 300:-
It (where the earlier decision was given per incuriam) depended upon the true meaning (which in the later decision was regarded as clear beyond argument) of a rule of the Supreme Court to which the court was apparently not referred and which it obviously had not in mind where the court has construed a statute or a rule having the force of a statute, its decision stands on the same footing as any other decision on a question of law. But where the court is satisfied that an earlier decision was given in ignorance of the terms of the statute or a rule having the force of a statute, the position is very different. It cannot, in our opinion be right to say that in such a case the court is entitled to disregard the statutory provision and is bound to follow a decision of its own given when that provision was not present to its mind. Cases of this description are examples of decisions given per incuriam.
On behalf of the respondent reliance was placed, upon the decision reported in Mis. Karnal Distillery Co., Ltd., v. The Union of India 1977 (2) S.C.J. 232 where the Supreme Court observed as follows:-
there was no dispute that the regulation of production and distribution of liquor is one of sovereign functions and the authorities could act under the several enactments and rules framed for the above purpose-But in the present case the agreement was entered into purely as a contact between the plaintiff and the Government for the supply of liquor at a particular rate.
The Supreme Court held that the Government will have to pay for the goods supplied at the rate mentioned, to the person who supplied the goods and the Government cannot fix a price neglecting the terms of the agreement. The above case relating to an agreement between the dealer and the Government regarding the supply of liquor does not relate to any right in immovable property for which the provisions of the Government Grants Act will apply. Therefore the principle laid down in the above decision cannot be applied to the facts of this case.
In view of the above discussion the conclusion arrived at by the learned trial Judge and the cancellations of the contracts evidenced by Ex.P21, is void and unenforceable cannot be sustained. In view of the provisions of the Government Grants Act we have to conclude that as per clause 11 of the agreement Ex.p111 and clause 7 of the agreements Exs.P12 to P15 the lease is liable to be terminated by the Government at any time without assigning any reason and as such the orders passed by the Government cancelling lease of chank fisheries in favour of the respondent as per Ex.P21 is perfectly valid.
Extensive arguments have been advanced on behalf of the appellant on the question of quantum of damages arrived at by the learned trial Judge in order to show that the basis on which the quantum of damages arrived at is not correct. According to the agreements Exs.p111 to P15 the lessee is entitled to fish and carry away the chanks subject to a maximum in respect of each fishery. As per the above said agreements the lessee can fish and carry away the chanks upto the limits set out below:-
S. No.
Ex. No.
Name of the Fisheries
Period of lease
Lease amount
Limit upto which chanks can be collected
Security deposit.
1.
P-11
region
From 2-2-1971 to 1-2-74
Rs. 81,000/ - per annum to be paid half yearly in advance.
6,00,000 full sized chanks of size of 57.15 m.m. per year.
Rs. 8,100
2.
P-12
Kanyakumari region
-do-
Rs. 9,501/ - per annum to be paid yearly in advance.
1,50,000 full sized chanks per year.
Rs. 95070
3.
P-13
South Arcot, Chingleput and region.
�do-
Rs. 85,087/ - per annum to be paid half yearly in advance.
1,75,000 full sized chanks per year.
Rs. 8,508-70
4.
P-14
Thanjavur region
�do-
Rs. 81,082/ - per annum to be paid half yearly in advance.
2,00,000 full sized chanks per year.
Rs. 8,108-20
5.
P-15
Sivaganga region
�do-
Rs. 45,601/ - per annum to be paid half yearly in advance.
3,00,000 full sized chanks per year
Rs. 4,560-10
The case of the plaintiff, the respondent herein before the learned trial Judge was that it would have been possible for him to fish the maximum number of chanks to which he is entitled at the following rates of payment for the respective fisheries:-
1.
Chingleput
0.99� rupees.
2.
Thanjavur
0.72
3.
Bay
1.51 for Jadhi chanks 0.79 for Patti chanks
4.
Sivaganga
0.80
5.
Kanyakumari
0.96
It is the case of the plaintiff/respondent on account of the orders of cancellation he had to buy chanks from divers at the following rates:-
1.
South Arcot and Chingleput
Several rates averaging 2.15
2.
Thanjavur
Several rates averaging 1.63
3.
Palk Bay
Several rates averaging 289 for Jadhi chanks and 1.35 for Patti chanks.
4.
Sivaganga
Several rates averaging 1.30
5.
Kanyakumari
2.65
The plaintiff respondent claims the difference in rates calculated on the basis of the maximum number of chanks that can be fished as damages which according to the plaintiff worked out to 39, 92, 095. The learned trial Judge accepted the case of the plaintiff and awarded damages as prayed for in the plaint with interest at six per cent from the date of suit till the date of payment. The decision of the learned trial Judge in this regard is challenged by the appellant on the following grounds:- 1. The availability of chanks cannot be predicted with any amount of accuracy and the calculation of damages on the basis of the maximum chanks that could be fished by the plaintiff as per the terms of the contract cannot be sustained.
There is no proper proof evidencing the price for which the chanks were alleged to have been purchased by the plaintiff in several regions.
The'' claim of the plaintiff/respondent is bound to fail on account of the non-production of relevant documents in their possession.
The first contention on behalf of the appellant is the quality of chanks that could be got from the above said chank fisheries cannot be predicted with any amount of accuracy and the learned trial Judge ought not to have speculated and fixed the yield of chanks at the maximum to which the plaintiff is entitled to get. In this connection the following observation of the Supreme Court reported in K.T.M.T.M. Abdul Kayoom and Another Vs. Commissioner of Income Tax, , was relied upon:-
Under the lease which the respondent obtained, it had a right to take only chanks of particular dimensions and shape, but it had to fish for them and obtain them first. The rest of the chanks were not its property. The smaller chanks had to be returned alive to the sea, and Valampuri chanks had to be compulsorily sold to the State. Of course, the smaller chanks put back into the sea would grow, and if fished later be its property to take: but till they grow it had no claim. The chanks were on the bed of the sea. Their exact existence was not known, till the divers found them, or they got netted. Chanks which were there one day might have been washed back into the deep sea, and might never be washed back into a place where they would be within reach. Similarly, other chanks not there one day might come within reach on another day. All these matters make the case entirely different front the case of a purchase from the divers. In detaining the lease, the respondent obtained a speculative right to fish for chanks which it hoped to obtain and which might be in large quantities or small, according to its luck. The respondent changed the nature of its business to fishing for chanks instead of buying them. To be able to fish, it had to arrange for an area to fish, and that arrangement had to be of some duration to be effective.
This is not a case of so much clay or so much saltpetre or a dump of tailings or leaves on the trees in forest. The two modes in which the respondent did the business furnish adequate distinguishing characteristics. Here is an agreement to reserve a source, where the respondent hoped to find shells which, when found, became its stock-in-trade but which in situ, were no more the firm''s than a shell in the deepest part of the ocean beyond the reach of its divers and nets.
It is contended on behalf of the appellant that the probability of getting chanks in the present case also is uncertain and the learned trial Judge had gone-wrong in assuming that the plaintiff would have got the maximum number of chanks as provided in the contract. It is also seen from the evidence of D.W.1, the Joint Director of Fisheries, that the plaintiff was the lessee for Madras, Chingleput, South Arcot and Thanjavur regions for 1967 to 1970. He further deposed that it is only at the instance of the plaintiff the ceiling was fixed. The plaintiff seems to have insisted upon the fixing of a ceiling with a view to satisfy the income tax authorities who were attempting to estimate the yield of chanks for above the actual yield on previous occasions. Ex.D32 is the letter addressed by the plaintiff to the Joint Director of Fisheries requesting him to fix the following ceiling limit in respect of the lease for the periods from 1967 to 1970 in respect of several fisheries:-
1.
Madras, Chingleput and South Arcot.
1.75 lakhs
2.
Thanjavur.
2 lakhs.
The Joint Director of Fisheries who was examined as D.W.2 deposed that the ceiling with regard to the number of chanks in respect of the following fisheries had been fixed previously only at the instance of the plaintiff:-
1
Madras, Chingleput and South Arcot
1.5 lakhs of chanks
2
Thanjavur
2 lakhs of chanks
3
Sivaganga
8 lakhs of chanks.
4
Palk Bay
6 lakhs of chanks
5
Gulf of Mannar
5 lakhs of chanks
6
Kanyakumari
1.5 lakhs of chanks.
The same ceiling seems to have been fixed for the period from 1971 to 1974 also as per Exs. P11 to P15. It is also the evidence of both D.W.1, the Joint Director of Fisheries and D.W.2, the Assistant Director of Fisheries, that at no time the ceilings fixed in the contract in respect of the chank fisheries were reached. The plaintiff who was in possession of the details of actual yield foT 1967-1970 for the abovesaid regions had not chosen to produce the same into court in support of his allegation that he could have got the maximum number of chanks mentioned in Exs.111 to P15. On the other hand we have a statement relating to the yield of chanks during the previous year as evidenced by Exs. D31, D33 and D34, produced by the defendant, and spoken to by D.W.2., according to which the following is the yield from the several fisheries:-
Fisheries
Actual yield of chanks
Ceiling fixed as per agreement
Percentage
Thanjavur
1,52,397
6,00,000
25.4
Palk Bay
8,62,937
18,00,000
47
Sivaganga
1,81,487
9,00,000
20
Kanyakumari
73,082
4,50,000
16
As per the agreements Exs.P11 to P15 the plaintiff is bound to submit a return to the Fisheries Department with reference to the chanks got by the plaintiff. As per the return submitted by the plaintiff and admitted by P.W. 3, the chanks that were obtained by the plaintiff during February, 1971 to May, 1971 in South Arcot and Madras regions are as follows:-
Month
No. of chanks obtained
February, 1971
5,739
March, 1971
5,282
April, 1971
7,149
May, 1971
9,011
The actuals also show that the catches are far below the ceiling limit. To a specific question put to P.W. 3, the Managing Partner of the plaintiff''s firm, he says that he does not know whether the catches for the previous years were not up to the ceiling limit mentioned in the agreements. A suggestion was put to him that only 25.4 per cent for Thanjavur, 47 per cent for Palk Bay and 20 percent for Sivaganga were reached for the previous period for which the plaintiff was the lessee. To this question also he replied that he does not know. P.W. 3 must be in possession of the accounts and other records with reference to the above details and his answer can only be taken to be a suppression of material facts. Even P.Ws. l and 2 who were the persons alleged to have been employed by the plaintiff were not able to say the number of chanks fished during the four months operation of the chank fisheries by the plaintiff. On a perusal of the evidence of both the plaintiff and that of the defendant the only conclusion that can be arrived at is that during previous leases the ceilings fixed in the agreements were never reached. Since the plaintiff failed to disclose the actual yield during the previous leases we will have to accept the evidence of D.Ws.l and 2, regarding the catches made during the previous leases which shows that the ceiling was never touched at all. Under these circumstances, the calculation of damages made by the learned trial Judge on the basis that the plaintiff would have obtained the chanks upto ceiling limit mentioned in Ex.P11 to P15 cannot be supported. 30. The second argument advanced on behalf of the appellant/defendant is that there is no acceptable proof to show the purchase of chanks by the plaintiff. No doubt certain accounts were sought to be produced and spoken to by P.Ws. 4, 5 and 6 evidencing the purchase of chanks by the plaintiff. But these accounts are not supported by vouchers showing the purchase duly signed by the persons from whom the chanks were alleged to have been purchased. Further P.Ws. 4, 5 and 6, the Accountants of the plaintiff, have no personal knowledge of the transaction and they deposed that they wrote the accounts only as per the details given by their principals. They have also deposed that they were not personally aware of the transaction. Even from the income tax return Exs.P117 to P122 it is not possible to make out the price for which the chanks were purchased. In the absence of proper voucher showing the purchase of chanks signed by the persons who sold the chanks to the plaintiff it is not possible to conclude that the plaintiff had conclusively proved the price for which the chanks have been purchased.
The third argument advanced on behalf of the appellant is that the plaintiff had kept back the relevant documents in the case and on that account the plaintiff''s case is bound to fail. It is the contention of the appellant that the production of the accounts and the other records of the plaintiff showing the out-turn of the chanks during the prior lease periods, viz., 1967 to 1970 will clearly show that the maximum had not been reached at any time and that the plaintiff wanted only to suppress the entire documents. No doubt the production of the relevant documents relating to the prior lease periods from 1967 to 1970 will have a bearing on the probable yield of chanks. But it cannot be said that the plaintiff''s case will have to fail because he has failed to produce the abovesaid documents.
It has to be noted that the claim for damages for breach of contract cannot be speculative. In the case reported in Yarlagadda China Rattayya and Another Vs. Donepudi Venkataramayya and Others, at Page 560 it has been observed as follows:-
When the plaintiff is unable to give any evidence of loss, generally, nominal damages are allowed. But, it, by no means, follows that in every such case only nominal damages are recoverable.
A distinction must be drawn between cases of absence of evidence which makes it impossible to fix damages and cases which present difficulty in assessing damages because of the nature of the damage proved, and the difficulty in assessing it is not a ground for refusing substantial damages. Courts have to try to get at that sum of money which would put an injured party in the same position as that in which he would have been if he had not sustained the wrong which entitled him to claim damages. A Judge has got to assess damages as best as he could on the material available.
He cannot decline to estimate merely because the plaintiff could not adduce the best evidence, but has to decide what the proper method is having regard to all the circumstances. In cases where evidence could be adduced as to the quantum of damages, it should be established with some degree of certainty. But, as pointed out by Mookerjee, J. who spoke tor the court in F.T. Kingsley Vs. The Secretary of State for India in Council, :
this does not mean that absolute certainty is required nor, in all cases, is there a necessity for direct evidence as to the amount. Damages are not uncertain for the reason that the loss sustained is incapable of proof with the certainty of mathematical demonstration or is to some extent contingent and incapable of precise measurement.
So, what is to be made out is that loss of profits was likely to result From the breach of contract and was a probable and direct result thereof. They should not be speculative profits such as might be guessed lo be the result of the breach. Plaintiff would only be entitled to such damages as may be fairly and reasonably considered as arising naturally, i.e., in accordance with the usual course of things. The damages claimed should be the direct and natural consequences of the injury. If damages do not flow directly from the breach they would be regarded as remote and would be inadmissible.
In the present case it had not been shown that the Plaintiff had entered into contracts for the supply of chanks from dealers elsewhere which necessitated the plaintiff to purchase the chanks at any cost. In the absence of any such commitment the plaintiff is not bound to purchase the chanks. Even in the case purchase of chanks at higher rate as per the evidence of P.W. 3 it had not been shown at what rate the chanks so purchased had been sold. It had not been established that the plaintiffs were not able to sell the chanks which they had purchased at a higher rate for a profitable price. In any event on the cancellation of the leases there is no necessity on the part of the plaintiff to purchase chanks at a higher rate and hence merely because the plaintiff chose to buy chanks at a higher rate the appellant cannot be mulcted with the difference in price as damages. As already stated the claim for damages cannot be speculative. If at all the plaintiff is entitled to any damages it can only be the cost that the plaintiff had incurred in preparing himself for the chank fishing according to the lease granted to him. P.W. 3, Basheer Mohideen, the Managing Partner, had deposed that they made a capital investment of Rs. 4,40,000 and also obtained the loan of Rs. 1,50,000 and on the whole they spent Rs. 5,90,000 in respect of the preparation for the chank fishing. He had also deposed that they had purchased three launches and 100 boats for the purpose of chank fishing and that they constructed 65 godowns at number of places. P.W. 3 also states that Rs. 60,000 was borrowed and another sum of Rs. 60,000 was invested in a sister-concern for the purchase of launches. It is also the evidence of P.W. 3 that they made advances to the divers, and that they had spent a sum of Rs. 1,30,000 by way of advances to divers. No doubt, if really the plaintiff had purchased the launches and boats for the purpose of fishing and if those launches and boats on re-sale had not fetched the price for which they were purchased the difference may represent the damages that the plaintiff had incurred on account of the transaction. But there is no evidence to show as to what happened to the launches and boats and the passing statement of P.W. 3 that the two of the launches have been sunk is not substantiated. Similarly with reference to the advances made to the divers if really the plaintiff had advanced the amounts and the same had not been got back the amount so lost may represent the damages on account of the transaction. But there is no reliable evidence to prove the amount that was actually advanced to the divers by the plaintiff. Hence on the evidence on record there is no reliable material on which the quantum of damages can be arrived at.
For the above reasons the findings of the learned trial Judge awarding damages to the plaintiff will have to be set aside and the appeal will have to be allowed. In the result the appeal is allowed and the suit is dismissed. However since the cancellation of the leases by the appellant/defendant gave rise to the suit this is not a fit case where costs should be allowed. Hence the appeal is allowed without costs. There will be no order as to costs in the suit also. With reference to Article 134(A) of the Constitution of India the learned counsel for the respondent sought leave to appeal to the Supreme Court. We are satisfied that the question involved in the proposed appeal to the Supreme Court, namely, "whether the Government Giants Act is applicable to the cases of the type concerned in this case, and even if it is applicable, what should be the measure of damages?" is a substantial question of law of general importance which needs to be decided by the Supreme Court. Accordingly, we grant the leave.