MAHADEOPRASAD Vs. SIEMENS (INDIA) LTD

JUDGEMENT

(1.) (After stating facts and holding that there was a breach of guarantee His Lordship discussed the question of damages.) The question involves a point of law, namely the effect of Section 74, Contract Act. Speaking for myself, I have never understood Section 74. I am always convinced of the difficulty of a particular point when both sides say it is perfectly simple. I will deal first with the point of law involved and then with the main question of fact which underlies every issue as to damages, including the question of mitigation. What is the effect in Indian law of naming a figure? I should perhaps say now that I have no doubt that these parties at the time of the compromise fully considered their position. The figures named are undoubtedly large, but I have no doubt that they were arrived at after consideration, and I think the harshness of the contract (if you can call it that) is not so much the fixing of these particular figures as the unconditional undertaking to fulfil a very stringent guarantee under what must have been almost unknown circumstances.

(2.) However the point is a point of law and has been argued as such on behalf of the defendant company, and quite rightly and very ably argued. What is the effect of naming a sum, having regard to Section 74? Mr. Page says it has not any effect except as a maximum: In other words, that you have got to read the contract as meaning damages not exceeding Rs. 40,000. That follows from the last clause of the section. The plaintiff has got to prove his damages, irrespective and regardless of the sum fixed. He must have to begin at the bottom, and prove damage item by item. Is that right? Mr. Page relies upon a ruling of the Privy Council in Panna Singh V/s. Firm Bhai Arjan Singh AIR 1929 PC 179, at (p. 951 of 33 CWN.), and if I took it down correctly the relevant passage is as follows: The effect of the Contract Act, Section 74, is to disentitle the plaintiffs to recover simpliciter the sum of Rs. 10,000, whether as penalty or liquidated damages. The plaintiffs must prove the damages they have suffered.

(3.) Now, in that case, which was a case of sale of land, the figure mentioned was Rs. 10,000. It was proved that there had been a re-sale with an actual loss only of Rs. 1,000. The plaintiffs had been granted damages to the extent of Rs. 10,000. The Board reversed that finding and gave expression to the proposition that I have quoted. Mr. Page says that that proposition lays down what he has contended for. The question is, having regard to the facts of that case, what does simpliciter mean? In the first place, does simpliciter refer to recover or to the sum which is to-be recovered? Does it mean simply to recover or does it mean simply the sum? I am not clear. Further, having regard to the facts of the case, I think it might well have meant notwithstanding that it has been proved that the actual damage was Rs. 1,000 and nob Rs. 10,000. But, taking the word simpliciter in its ordinary meaning (I looked it up in the dictionary), absolutely unconditionally, without any condition or consideration. Does it mean that the sum named is to be of no effect at all? The Judicial Committee do not say so. It is true that they say the plaintiff must prove his damages. But is not the figure named some proof? It is not to be conclusive proof, but is it not some proof? Is not the estimate made by the parties with full consideration some evidence? I think it is.