LexSIR CHUNILAL V. MEHTA AND SONS, LTD. versus THE CENTURY SPINNING AND MANUFACTURING CO., LTD.
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3 S.C.R.
SUPREME COURT REPORTS
549·
SIR CHUNILAL V. MEHTA AND SONS, LTD.
v.
THE CENTURY SPINNING AND MANUFAC·
TURING CO., LTD.
(B. P. SmHA, C.J., J. L. KAPUR, M. HIDAYATULLAH,
J. C. SHAH and J. R. MuDHOLKAR, JJ.)
Supreme Court Appellate Jurisdiction of-Appeal against
decree of affirmance-Substantial question of law-Construction
of agreement, if such a question-Br.ach of contract-Liquidated
1amages-Constitution of India, Art. 133(1).
The appellants were appointed managing agents of the
respondents for 21 years. Under cl. 10 of the agreement the
appellants were entitled to a remuneration equal to 10% of
the gross profits <if the respondents subject to a minimum of
Rs. 6,000 per month. Clause 14 provided that if the agree·
ment was terminated otherwise in accordance with the provi-
sions thereof the appellants would be entitled to liquidated
damages "of not less than Rs. 6,000" per month for the
unexpired portion of the agreement. The respondent wrong-
fully terminated the agreement before the expiry of the
stipulated period. The appellants filed a suit for recovery of
damages for breach of contract cin the basis of 10% of the
gross profits of the respondents. The trial Judge granted a
decree for Rs. 2,34,000 calculating the amount at.Rs. 6,000
per month. On appeal by the appellants the High Court
affirmed the decree. The appellants applied to the High
Court for a certificate of fitness for appeal to the Supreme
Court but it declined to grant the same on the ground that
though the question involved in the case relating to the inter-
pretation of the agreement was a question of law it was not a
substantial question of law as required by Art. 13(1) of the
Constitution.
Held, that the case involved a substantial question of
law and the appellants were entitled to the certificate as of
right. A substantial question of law is one which is of
general public importance or which directly and substantially
affects _the rights of the parties and which have riot been
finally settled·by the Supreme Court, the Privy Council or the
Federal Court or which is not free from difficulty or which
calls for discussion of alternative views. The question invol-
ved in the present ca'3e as to the construction of the agreement
was not only one of Jaw but it was neither simple nor free
from doubt and was a substantial questiop of l'!'Y wi!hin th~
fllCi!nin? of Art, 133(1).
·
·
·
•
1962
March {J,
1961
Sir Chunilol
V. Afehta d: Som,
Ltd.
...
Tht Ctnli..17 SpiMing
d.: JI 4nrifa<turing
Co, Ltd.
M:Jdho/l;(l' J.
550 SUPREME COURT REPORTS (1962] SUPP.
Kaiklw.shroo Pirojsha Glzaira v. C.P. Syndicate Ltd.,( 1948)
I. Born. L. R. 741; R~~thunath Prasrul Singh v. Depuly Com-
missioner~( ParlaPVarh, ',1927) 54 l. A. 126 and Dinkarrrw v.
R'lllansey, I. L. R. ( 1949) Nag. 224, referred to.
.
Rimmalap>;di Subb<1 Rtw v . • Voony l'eeraju, [. L. R. 1952
~fad. 264, approved.
lleld, further that upon a proper construction of cl. 14
of the agreement the appellant; were entitled to damages
at the rate of Rs. 6,000 per month only.
The words "not
le<S than Rs. 6,000" in
cl. 14 could not be construed
as meaning 10% of the gross profits as provided in cl. 10.
When in cl. 14 the parties named a sum of money to be paid
....,.
as liquidated damages, it excluded the right to claim an
unascertaincrl sum as darnages.
Crvn. APPELLATE JURISDICTION : Civil Appeal
.No. 417 of 19:ii.
Appeal by sp~cial leave from the judgment
and dceree tlatBd .\farch 14, 19.56, of tho Bombay
High Court in Appeal No. 94 of 1955.
N. A. Palkhivala, J. B. Dadachanji, 8. N. Andie)/,
R1tm.eshwar .l\'ath and P. L. Vohm, for the appellants.
.
llf. C. 8r1alvad; Attorney General of India, R .• !.
Joshi and R. P. Malteshwari, for the respondont.
Pon1!3 A. Melita and R. H. Dliehar, for the
r ntervencr.
1962. March 5,
The Judgment of the Court
1va~ delivered by
MuDIIOLll:AR, J.-This is an appeal by special
lerive iigainst. tho Judgment of the High Court of
Bomh11.y in an appeal from the jud~ment of a single
.Judge of that Court. The claim in appeal before
tho High Court was for a.bout 26 lakhs of rupees.
Being aggrieved by the decision of the High Court,
'h<> n.npelliint a.pp lied for a. certificate under Art.
I !l3(l )la) of the Con•titution. The ju :lgment of the
High Court in appeal was in affirma.nco of the judg-
ment of the learned single ,Judge dismissing the
~ppellant's suit. for qamages and therefore, it Excerpt shown. Read the full judgment & AI analysis in Lexace.