M/S. MURLIDHAR CHIRANJILAL versus M/S. HARISHCHANDRA DWARKADAS AND ANOTHER

Citation: [1962] 1 S.C.R. 653 · Decided: 29-03-1961 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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1 S.C.R. SUPREME COURT REPORTS 
653 
M/S. MURLIDHAR CHIRANJILAL 
v. 
M/S. HARISHCHANDRA DW ARKADAS 
AND ANOTHER 
(P. B. GAJENDRAGADKAR and K.N. WANCHOO, JJ.) 
Damages-Breach of contract-Sale of goods-Measure of 
damages-Foreseeable consequence of breach-Knowledge of parties 
-Indian Contract Act, r872 (9 of r872), s. 73. 
The appellant entered into a contract with the respondent 
for the sale of certain canvas at Re. I per yard under which the 
delivery was to be made through railway receipt for Calcutta 
f. o. r. Kanpur. The cost of transport from Kanpur to Calcutta 
and the Jabour charges in that connection were to be borne by 
the respondent and it was agreed that the railway receipt would 
be delivered on August 5, 1947. The appellant was unable to 
deliver the railway receipt on the due date because booking 
from Kanpur to Calcutta was closed, and, therefore, cancelled 
the contract. The respondent instituted a suit for the recovery 
of damages for the breach of the contract and claimed that as 
the seller knew that the goods were to be sent to Calcutta and 
must therefore be presumed to know that the goods would be 
sold in Calcutta, any loss of profit to the buyer resulting from 
the difference between the rate in Calcutta on the <late of the 
the breach and the contract rate would be the measure of 
damages. 
Held: 
(r) that it is well settled that the two principles 
relating to compensation for loss or damage caused by breach of 
contract as laid down ins. 73 of the Indian Contract Act, J872, 
read with the Explanation thereof, are (i) that, as far as pos-
sible, he who has proved a breach of a bargain to supply what 
he contracted to get is to be placed, as far as money can do it, 
in as good a situation as if the contract had been performed, but 
(ii) that there is a duty on him of taking all reasonable steps to 
mitigate the loss consequent on the breach and debars him from 
claiming any part of the damage which is due to his neglect to 
take such steps. 
British Westinghouse Electric and Manufacturing Company, 
Limited v. Underground Electric Railway Company of London, 
[1912] A.C. 673, relied on. 
(2) that the contract in the present case was for delivery 
f. o. r. Kanpur in which it was open to the buyer to sell the 
goods where it liked, and no inference could be drawn from the 
mere fact that goods were to be booked for Calcutta that the 
seller knew that the goods were for re-sale in Calcutta only. 
The contract was therefore not of the special type to which the 
words "which the parties knew, when they made the contract, 
March 29. 
Murlidhar 
Chiranjilal 
v 
H arishchandra 
Dwarkadas 
654 
SUPREME COURT REPORTS 
[1962] 
to be likely to result from the breach of it" appearing in s. 73 
of the Indian Contract,Act, 1872, would apply, but an ordinary 
contract, for which the measure of damages would be such as 
"naturally arose in the usual course of things from such breach" 
within the meaning of that section. The damages would be the 
difference between the market price in Kanpur on the date of 
breach and the contract price. But as the respondent had failed 
to prove the rate for similar canvas in Kanpur on the date of 
breach, it was not entitled to any damages as there was no 
measure for arriving at the quantum. 
Chao and others v. British Traders and Shippers Ltd., [1954] 
l All E.R. 779, relied on. 
Re.Rand H. Hall Ltd. and W.P. Pim (Junior) & Co.'s Arbi-
tration, [1928] All E.R. 769 and Victoria Laundry ( W insdsor) Ltd. 
v. Newman Industries Ltd., [1949] r All E.R. 997, distinguished. 
CIVIL APPELLATE JURISDICTION: 
Civil Appeal No. 
193 of 1958. 
Appeal by special leave from the judgment and 
decree dated October 3, 1955, of the High Court of 
Judicature, Madhya Bharat, Indore, in Civil First 
Appeal No. 58 of 1952. 
C. B. Aggarwala and Bhagwan Das Jain, for the 
appellant. 
Radhey Lal Aggarwal and A.G. Ratnaparkhi, for 
respondent No. 1. 
1961. March 29. The Judgment of the Court was 
delivered by 
Wanchoo J. 
W ANCHOO, J.-This is an appeal by special leave 
from the judgment of the High Court of Madhya 
Bharat. A suit was filed by firm Messrs. Harish-
chandra Dwarkadas (hereinafter called the respondent) 
against the appellant-firm Messrs. Murlidhar Chiranji-
lal and one Babula!. The case of the respondent was 
that a contract had been entered into between the 
appellant and the respondent through Babula! for sale 
of certain canvas at Re. 1 per yard. The delivery was 
to be made th

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