T K SUNDARAM Vs. CO OPERATIVE SUGARS LTD

JUDGEMENT

(1.) The question of law that arises in this second appeal is whether under S.74 of the Contract Act, 1872 in case of breach of contract the amount of compensation mentioned in the agreement is payable or the plaintiff is bound to prove the actual damage that can be recovered from the defaulter. The appellant in this case on 3-3-1970, as per the agreement Ex.A-1, agreed to supply to the respondent company 125 tonnes of sugarcane grown by him in an extent of 5 acres of land in S.F. Nos. 582/1 and 610, in Kurudamapalayam village, Coimbatore Taluk, during 1970-71, main season commencing from 15-10-1970. According to the agreement Ex.A-1 the appellant also agreed to pay a penalty of Rs. 50 per tonne of sugarcane not supplied to the respondent company. According to the plaint allegations the appellant did not supply the sugarcane as agreed and the respondent company has suffered a greater loss than the penalty payable. It is also alleged that the suit was laid to recover only the penalty stipulated in the agreement for 125 tonnes at the rate of Rs. 50 per tonne amounting to Rs. 6250.

(2.) While admitting the agreement Ex.A 1 the appellant herein, the defendant in the suit, pleaded that there was no concluded contract between both the parties. It was contemplated between the parties, that there should be a written contract containing all the essential terms for the supply of sugarcane by the appellant to the respondent. No such contract was entered into. The alleged agreement Ex.A-1, dated 3-3-1970 is not an agreement at all in the eye of law. The parties were not at ad idem with reference to the quantity, price, mode and manner of supply and performance which are the basic terms relating to the contract. In any event, the alleged agreement is void and cannot be enforced. The appellant raised on 15-11-1969 rate on (sic) variety of sugarcane in S.F. 582/1 which was due for harvest within nine months to ten months. Similarly in S.F. 610 the crops were raised on 15-2-1970 to be harvested within ten months. The case of the appellant is that as the parties did not enter into any contract and as the respondent company never intimated its willingness till January 1971 to enter into any contract, in spite of the fact that the crop was ripe for harvest in or about 1971, the appellant was under no obligation to supply the sugarcane. The appellant also contended that the penalty is only Rs. 23, as against Rs. 50/- claimed by the respondent company. It is also contended that the respondent had not disclosed whether the respondent actually sustained loss and if so the quantum or actual loss. In any event, the suit is barred in view of the provisions contained in the Kerala Co -operative Societies Act 1961. The appellant also claimed protection under the provisions of Ordinance of 1978 (Tamil Nadu Act 17 of 1978) which was also negatived by the courts below.

(3.) The learned Subordinate Judge on a consideration of the evidence documentary and oral, came to the conclusion that there is a valid and concluded contract between the parties for the supply of sugarcane for 1970-71, season and the said agreement is binding on the appellant. The trial court also found that the appellant committed breach of contract and the penalty of R.50 per tonne stipulated in Ex.-A1, is payable. On the question of jurisdiction, the trial court held that since the said plea had not been taken as a preliminary issue the same cannot be considered. As against the said judgement the appellant herein filed A.S. 293 of 1978 on the file of the District Judge, Coimbatore, and the learned District Judge on a consideration of the evidence and the materials placed before him concurred with the findings of the trial court and dismissed the appeal. This second appeal is filed challenging the legality and correctness of the decisions of both the courts below.