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M/S Aryavart Overseas (P.) Ltd v/s M/S Kay Aar Biscuits (P.) Ltd

    CS(OS)No.1161 of 1982

    Decided On, 14 September 2009

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE S. RAVINDRA BHAT

    For the Plaintiff: Janendra Lal and Ms. Yasmin Tarapore, Advocates. For the Defendant: Nemo.



Judgment Text

S.RAVINDRA BHAT, J.


1. The plaintiff, a private limited company carrying on business in marketing biscuits, sues for damages in the sum of Rs.39,74,344.25 P (Rupees thirty Nine lakhs Seventy four thousand hundred and forty and paise twenty five only).


2. The plaintiff is a private limited company incorporated under the Companies Act, 1956 and carries on business inter alia of selling and marketing biscuits and other food products in various part of India. It is averred that in 1978 the defendant (hereafter ?Kay Aar?) approached it (the plaintiff) at New Delhi requesting assistance to it (the defendant) for setting up a factory to manufacture biscuits,and also for its sale. The plaintiff agreed; this led to the parties entering into a rate contract on the 8th of June 1978. The original of that agreement was filed on record of suit No.5 of 1980 and marked as Exhibit P-1; a certified copy of the agreement together with its annexures is filed in this suit. It is produced, and marked as Exhibit PW-1/1.


3. The parties, by the said contract agreed that Kay Aar would supply to the plaintiff biscuits, (as described in its Anenxures) under the Plaintiff?s trade names of ?Swady?, Salona, ?Krispee? and ?Saltene?. Kay Aar agreed to supply a minimum of 100 MT (tonnes) of those biscuits, per month according to the plaintiff?s requisition to be (and which were) placed from time to time. Kay Aar was permitted to use the said trade names only for the supplies made to the plaintiff. The agreement further stipulated that payment would be made within two days of the bills raised during the previous week.


4. The plaintiff contends that Kay Aar was unable to meet its (plaintiff?s requirements); owing to short supplies, disputes arose between the parties. To settle those disputes, a settlement was arrived at on 7th June, 1979 by which Kay Aar guaranteed the supply of a minimum of fifty tons in the month of June, 1979 with a progressive increase of ten tons per month till the minimum agreed contracted supply of one hundred tons a month was reached. It was agreed that the payment (for the supplies) would be made on the third day after the supply. With a view to cover past accounts and disputes, the parties also agreed that they would prepare an ?up to date? account which would take into consideration various payments made between the parties to outsiders. Parties agreed to a third party liability of Rs.97,000/- to be borne by the plaintiff, provided that Kay Aar maintained the regular, minimum guaranteed supply. It was also agreed that if on taking final accounts, any amount was found due from the plaintiff to the Defendant, the former would pay the same in installments of Rs.10,000/- per month, provided the minimum guaranteed supply was maintained as stated in the settlement. The certified copy of the said settlement dated 7th June, 1979 is marked as Exhibit PW1/2.


5. The plaintiff says that thereafter, although Kay Aar started supplying the goods, it started defaulting in making regular supplies thereby committing breach of the agreement. It is alleged that Kay Aar, instead of selling the biscuits to the plaintiff, also started selling them in the open market through other parties. Resultantly the plaintiff filed an Arbitration Petition being Suit No. 1057-A of 1979, under Section 20 of the Arbitration Act, 1940. Kay Aar expressed its disinterest in having the disputes resolved through arbitration; the Plaintiff therefore withdrew the said arbitration petition. The Plaintiff thereafter filed Suit No.5 of 1980 in this Court for the recovery of a sum of Rs. 5,01,084/- as damages on account of short supply of 334.056 tones of biscuits by Kay Aar, up to 31st December, 1979 and for an injunction. A certified copy of the plaint is marked as Exhibit PW1/3. That suit was partly decreed by the court on 17th February, 1982. The court granted to the plaintiff, damages calculated at the rate of Rs.768.75 per tonne. A certified copy of the said judgment and order in Suit No.5/1980 is produced as Exhibit PW1/4.


6. It is submitted that in terms of the agreement dated 8th June, 1978 and the settlement dated 7th June, 1979 the agreement/ contract between the parties was to remain in force for three years from the date of the first sale, which it is stated, took place on 18th August, 1978 i.e. till 17th August, 1981. It is claimed that the plaintiff assisted Kay Aarwith the know-how, man power, and finance in consideration of the contract and also geared up its marketing organization accordingly, recruiting staff, making a survey of the markets all over North India and incurring huge expenses on building up a reputation and demand for the said products under the said trade names to be introduced into the market. The plaintiff alleges spending large amounts on publicity, newspaper advertisement, slide shows in cinema halls, etc., all over North India. It is said that the plaintiff had, represented throughout North India that biscuits to be put into the market would be ?of the best quality?. The Plaintiff alleges staking its reputation on the said biscuits and the representations made, and the failure of Kay Aar to supply the product resulted not only in monetary losses (to the plaintiff) but also in loss of reputation which the plaintiff states, would take years to re establish. Kay Aar?s failure to honour its terms has, it is alleged, resulted in the plaintiff suffering heavy loss of profit.


7. It is stated that even after 1st of January, 1980 Kay Aar supplied only nominal quantities of biscuits to the plaintiff, whereas it continued to supply and sell them in the open market, thus committing breach of the terms of the agreement and the settlement arrived at, on the one hand and causing extensive damage to the plaintiff on the other. Kay Aar by various letters to various purchasers offered the biscuits in the open market and one such letter dated 13th April, 1980 is produced. It is alleged that from the period January, 1980 to August, 1981 Kay Aar had to supply one hundred tons per month; the total supplies for the entire period was to be 2,000 (Two thousand) tones, the minimum guaranteed supply. After January, 1980 Kay Aar supplied only 64.443 tonnes at the agreed rates. This Court in Suit No.5 of 1980 had under various interim orders appointed a Commissioner to determine the rates at which the Kay Aar should supply biscuits to the Plaintiff, without prejudice to the rights of the parties. In terms of such purely interim arrangement, Kay Aar supplied 14.953 (Fourteen point nine hundred and fifty three) tonnes of biscuits on the basis of the rates fixed by the commissioner and a further quantity of 3.465 (three point four hundred and sixty five) tonnes for which the plaintiff supplied the raw material; Kay Aar was to be paid only conversion charges and charges of raw material actually used. The plaintiff states that though those supplies were not in terms of the contract, it is giving to Kay Aar due credit for it. The total supplies effected during this period thus were 22.843 (twenty two point eight hundred and forty three) tons resulting in short supply to the extent of 1977.157 tonnes (one thousand nine hundred and seventy seven point one hundred and fifty seven) for which the plaintiff claims damages.


8. The plaintiff relies on a Trade Price list with effect from 1st June 1980 marked as Exhibit PW1/4 to establish market rates, and says that the difference between that and the agreed purchase price and the market price is as per Annexure ?D? marked as Exhibit PW1/5. The market rates in Delhi or nearby markets in which similar types of biscuits manufactured and sold by established companies such as ?Parle? and ?Dalima? were much higher than the rate at which the plaintiff was selling it?s biscuits. The whole sale rate list of M/s. Parle Biscuits was filed by the plaintiff ? an admitted document, and marked Ex. P-2. It is stated that rates for Meghraj Biscuits sold by the Kay Aar under the plaintiff?s brand names is marked as Exhibit PW-1/6. Likewise the rate list for M/s. Dalima Biscuits effective from 8th January, 1981 and 22nd July, 1981 has been filed by the plaintiff and marked as Exhibits PW-1/7 and PW 1/8 respectively. The plaintiff states that it has restricted its claim to Rs.39,54,314/- (Rs. Thirty Nine Lakhs Fifty four thousand three hundred and fourteen) only as damages from Kay Aar at the rate of Rs.2,000/- (Rupees Two thousand) only per tonne on the short supply of 1977.157 tones (one thousand nine hundred and seventy seven point one hundred and fifty seven only) plus interest. The plaintiff also states having overpaid to the Kay Aara sum of Rs. 20,030.25P (Rupees twenty thousand and thirty and paise twenty five only) which it entitled to claim on account of the arrangement between the parties having come to an end.


9. The plaintiff refers to a legal notice dated 15th April, 1982 being served on the Kay Aar calling upon it to pay the sum of Rs.39,54,314/- (Rs. Thirty Nine lakhs fifty Four thousand three hundred and fourteen only) on account of damages together with interest thereon at the rate of 18% per annum The legal notice is marked as Exhibit PW1/9.


10. The defendant had entered appearance, and filed its written statement; however it defaulted in prosecution of its case, and was set down ex-parte on 1-11-2006. The plaintiff thereafter proceeded to lead ex-parte evidence. Its Managing Director, Ishwar Dayal Kansal, filed affidavit-evidence dated 31-3-2009; he deposed on 31-8-2009, tendering the affidavit as Ex. PW-1/A. The exhibits were marked on that date, as Ex. PW-1/1 to PW-1/9.


11. Before proceeding with a discussion of the merits of the plaintiff?s claims, it would be necessary to extract relevant portions of the original agreement, as well as the settlement of 1979. They are as below:


I Extracts of the June 8, 1978 Rate Contract:


?**** Whereas the Seller has set up a new factory at C-35, Industrial Area, Meerut Road, Ghaziabad in biscuits and whereas the Purchaser who have got 7 years of marketing experience in the said line, now both the parties have entered into this rate contract for supply of biscuits to the purchaser under the terms and conditions agreed to by and between the parties mentioned hereinafter


Now this parties to this rate contract have agreed as under :


1. The purchaser has expressly made known to the seller that he wants minimum 100 tones of biscuits per month manufactured by the seller as per the requirement and varieties requisitioned by the purchaser, and the seller agreed to supply the required quantity of biscuits to the purchaser as per contract rate indicated in Annexure A.


2. The purchaser may however indent on rate contract more than the quantity mentioned heretofore and the seller is liable to offer the same at the said rate contract subjection to the capacity of manufacturing.


3. The Seller will offer the excess production if any to the purchaser on contracted rate and may sell the goods to some other party/ dealer only when the purchaser declines to lift the entire manufactured quantity.


4. The varieties and quantity required by the purchaser under this rate contract, will be indicated by the purchaser in advance. The purchaser is the owner of the trade/ brand name ?Swady? and the seller is permitted to use the said brand name or any other brand name if required by the purchaser for the supply of goods as per his requirements. A list of the present varieties required are listed in Annexure ?A.


5. The rates at which biscuits will be supplied to the purchaser under this rate contract agreement of different varieties, are also indicated in the above mentioned Annexure ?A? which shall from the basis of all payments between the parties.


6, xx xx xx


7. xx xx xx


8. xx xx xx


9. The payment will be made by the purchaser within two days of all bill raised by the seller during the previous week, subject to the mutual agreement and arrangement from time to time.


10. xx xx xx


11. This rate contract agreement will be in force and effect and binding upon the parties for three years from the date of first sale after which this agreement may be extended with or without modification by mutual consent.


12. This rate contract is subject to ?Force Majeure? clause for stoppage of work due to strike, Labour Trouble, Fire, Flood, Earthquake or any other cause over which either party has no control.?


The settlement dated 7-6-1979, inter alia, is as follows:


?1, The seller has guaranteed a minimum supply to the purchaser of first 50 tones in the month of June with a progressive increase of 10 tones per month thereafter as per schedule and requirement of the purchaser. The purchaser?s minimum demand being 100 tones per month, the seller will be obliged to offer to the purchaser any production in excess of the guaranteed supply. The seller may however sell their products in Delhi and /or Overseas markets only after fulfilling this obligation of contracted supply to the purchaser. The seller will not however sell their products in Delhi at a rate lower then that of the wholesale rate, excluding all taxes, of the purchaser.


2. The Seller will not sell and/or supply their products to any other dealer other than the purchaser except in Delhi and/or overseas markets. Any excess production after 100 tones will either be sold by the seller in Delhi and Overseas markets or offered to the purchaser only even after fulfilling the obligation of supply to the extent of 100 tones per month.


3. The seller will deliver the goods at the godowns of the purchaser as per his packing wise/ quantity wise requirements thrice a week on Monday, Wednesday and Friday. Any change in requirement or schedule will be intimated by the purchaser in advance. In any case if the supply is not made on any day for any reason or prior intimation, the same will be made good next day. C


4. The payment will be made by the purchaser on the 3rd day of supply as per bill raised by the seller.


5. The Seller will arrange for and keep adequate stock of raw and packing material so that requirement of the purchaser is met promptly and under no circumstances non-availability of stock should disturb the flow of scheduled supply to the purchaser.


6. Any additional excise duty levied by the authorities will be to the purchaser?s account on all bills raised by the seller on the supplies made on or after 16.05.1979. Additional excise duty levy if any on the bills raised upto 15.05.79 from 1.8.78 will be borne by the seller. The seller will however right against such levy to the best of ability to the last.


7. The revised rate list of the present packigwise varieties is annexed herewith and this will be the basis of payment from the next day it is signed by both the parties. The purchaser has agreed to this revision of rates on seller?s firm commitment of regular minimum supply as mentioned heretofore. For introduction of any new variety the parties will mutually settle the rate beforehand along the line of the existing products. But it will be ensured by the seller that new products will not hamper the production of present supply.


8. An upto date account statement will be prepared taking into consideration the payment of Rs.10,000/- made by the purchaser to the seller on 16.5.78, Rs.40,000/- paid to Shir Madan Verma by Aryavart Investment and chit fund Pvt. Ltd., which was subsequently credited in the purchaser?s account with the seller on 30.11.78, Rs.97,000/- paid by the seller to Arayavart International for Maccaas products and payment due to the purchaser from M/s. Meghraj Biscuit Co. and Alpana Confectioners, Ghaziabad. This final acco9unt statement will be signed by both the seller and the purchaser for its authenticity. As per the final account statement whatever amount becomes payable by the purchaser will be paid by him instalment of Rs.10,000/- per month provided the minimum monthly supply guaranteed by the seller is maintained. In case of any shortfall in any month the purchase will have the option of withholding the instalment due for the month.


No instalment payment will however be withheld by the purchaser in any month in case of short-fall upto 10% of the guaranteed supply.


9. The purchaser has agreed to consider the revision of rate in case of unusual increase or decrease in raw material cost in future


10. Xx xx xx


11. xxx xx xx


12. This settlement will be effective from 7th June, 1979.?


12. This court?s judgment dated 17-2-1982 in Suit No. 5/1980 has interpreted the contract, as well as the settlement; it binds the parties. That suit, however, claimed damages for non supply of about 336 tonnes. The court awarded the sum of Rs.1,69,675/- for the short supply of about 220 tonnes, by the defendant. The reasoning of the court, in its relevant parts is extracted below:


??The object of an award of damages is to give the plaintiff compensation for the damages is to give the plaintiff compensation from the damages, loss or injury he has suffered. Section 73 embodies the general rule that the plaintiff is entitled to be placed, so far as money can do it, in the same position as he would have been in had the contract been performed. The Supreme Court, in M/s. Murlidhar Dhiranjilal Vs. M/s. Harishchandra Dwarkadas and Anr. (AIR 1962 Sc. 366) has laid down two principles on which damages in cases of breach of contract of sale of goods are calculated. The relelvant observations at page 369 read as under :-


?The two principles on which damages in such cases are calculated are well settled. The first is that, as far as possible, 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 this principle is qualified by a second, which imposes on a plaintiff the duty 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 Ltd., Vs. underground Electric Ry. Co. of London. (1912) AC 673 at p. 689. These two principles also follow from the law as laid down in S. 73 read with the explanation thereof?.


Normally measure of damages when the seller fails to deliver the goods is the difference between ? (a) the market price of the relevant goods at the time for delivery and at the place fixed for delivery. And (b) the contract price. (See Union of India Vs. M/s. Tribhuwan Das Lalji Patel A.IR. 1971 Delhi 120). If there was no available market for gods of the contractual description at the time and place of seller?s failure to deliver, the buyer?s damages must be assessed under the general rule at the sum of money which will put the party who has been injured or who has suffered in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation.


Xxxx xx xx xx


The agreed price of various varieties of biscuits to be sold by the defendants under the agreement in question is given in the annexrue to the settlement deed (exhibit P-2). According to the said annexure there were about twenty varieties of biscuits. However, it was admitted that about 80 per cent of the supply was of Glucose biscuits in card board. In such circumstances it would be reasonable and proper if the damages were assessed on the basis of the glucose biscuits in care- board. Parties have no objection to this method.


Agreed price of the Glucose biscuits in care-broad as per annexure to settlement deed (Exhibit P-2) was Rs.48.50 per card- board of eight kilograms. Besides a sum of Rs.4.85 was admittedly payable by the plaintiffs as excise duty. The total purchase price, including the excise duty, therefore, came to Rs.53.35 for eight kilograms i.e. Rs.6,668.75 per tones.


Mr. Madan Verma (DW.1) has admitted that the plaintiff were selling biscuits at the price shown in exhibit P-22. This fact was not disputed on behalf of the plaintiff. It is otherwise clear from the evidence of Ashok Kuamr (PW/1) Amrish Kumar (P.W.2) Rajiv Kishan (P.W.3) Rajendra Prasad Garg (P.W.4), Rohtas Kumar (P.W5) and Puran Chand Chawla (P>W.^) who have that they purchased biscuits form the plaintiffs at the prices given in the price list (Exhibit P-22), Kalyan Kumar Banerjee (PW.7) was the sales manager of the plaintiffs. He deposed that the price list (Exhibit P-22) was correct. The price of eight kilograms Glucose biscuits according to Exhibits P-22 was Rs.70/-. Thus it has been proved that the plaintiffs sold these biscuits at Rs.70/- per eight kilograms card-board, i.e. Rs.8,750/- per tone. In these circumstances the plaintiffs earned gross profit at Rs.2,081. 25 per tones.


Xxxx x xxxx


In this way the plaintiff spent 15 per cent of the sale price on effecting sales to their dealers, i.e. Rs.1.312.50 per tone. The net loss suffered by plaintiffs would come to Rs.768.75 per tone. The loss for 220.716 tones would amount to Rs.1,69,675/-..?


13. It is quite evident that the plaintiff had, in that case, led elaborate evidence about the pre vailing market rate, its expenses, marketing network, taxes paid and payable. Other documentary evidence, in the form of market rates of biscuits available as of then, were also available. On these materials, the court concluded that the short supply was 220.716 tonnes and the net loss suffered by the plaintiffs would have been Rs. 768.75 per tonne. Here, theplaintiff merely relies on a rate list, filed and asks the court to base its findings on the difference between the prices indicated in it, and the agreed rates. Though the defendant is ex-parte, the court cannot uncritically accept such evidence, not backed by any supporting material. The court is also mindful that the plaintiff has not disclosed whether it proceeded to purchase any quantity of biscuits; if so to what extent, and at what rates. It merely claims the entire non (or short) supply to the extent of 1977.157 tonnes (one thousand nine hundred and seventy seven point one hundred and fifty seven) as the basis for damages.


14. The theory behind damages for breach of contract is restitutionary. Market value forms the basis of damages calculation, as it is presumed to be the true value of the goods to the buyer. As far as possible he who has proved a breach of a bargain to supply what he has 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. The basic premise for damages is compensation for the pecuniary loss which naturally flows from the breach; as far as possible the injured party should be placed in as good a situation as if the contract had been performed. This was explained in Union of India v. Sugauli Sugar Works (P) Ltd., (1976) 3 SCC 32, in the following terms:


?The market rate is a presumptive test because it is the general intention of the law that, in giving damages, for breach of contract, the party complaining should, so far as it can be done by money, be placed in the same position as he would have been in if the contract had been performed. The rule as to market price is intended to secure only an indemnity to the purchaser. The market value is taken because it is presumed to be the true value of the goods to the purchaser. One of the principles for award of damages is that as far as possible he who has proved a breach of a bargain to supply what he has contracted to get is to be placed as far as money can do it, in as good a situation as if the con tract had been performed. The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach. Therefore, the principle is that as far as possible the injured party should be placed in as good a situation as if the contract had been performed. In other words, it is to provide compensation for pecuniary loss which naturally flows from the breach.?


15. The court is of the opinion that apart from the lack of convincing material to afford a reasonable basis for damages, the plaintiff is banking upon an assumption that it would have naturally profited, had the contract been performed in full. This assumption would be reasonable, up to a point. Yet, it cannot apply for the entire term, till August, 1981. If indeed the plaintiff had made the arrangements it claims to have, by way of advertising, marketing network, publicity, etc, surely it would have ? after waiting for the defendant to perform its obligations up to a reasonable time, proceeded to purchase the products from alternative sources. That would have naturally entailed some expenses, which in turn would have resulted in a realistic picture. Yet, that course does not appear to have been taken; the plaintiff, instead claims damages toward loss of profit, based on assumed performance of the entire contract, for the balance duration.


16. This court is of opinion that the plaintiff had a duty to mitigate its damages, to a reasonable extent; that would have afforded a reasonable ? or even realistic ? basis to calculate what could have been the net profit, denied to it. This duty to mitigate arises from Section 73 of the Contract Act. The Supreme Court, in M. Lachia Setty and Sons Ltd. v. Coffee Board, (1980) 4 SCC 636, described the law on the issue as follows:


?The correct statement of law in this behalf is to be found in HALSBURY?S LAWS OF ENGLAND (4th Edn.) Vol. 12, para 1193 at page 477 which runs thus:


?1193. Plaintiff?s duty to mitigate loss.?The plaintiff must take all reasonable steps to mitigate the loss which he has sustained consequent upon the defendant?s wrong, and, if he fails to do so, he cannot claim damages for any such loss which he ought reasonably to have avoided.?


Again, in para 1194 at p. 478 the following statement occurs under the heading Standard of conduct required of the plaintiff:


?The plaintiff is only required to act reasonably, and whether he has done so is a question of fact in the circumstances of each particular case, and not a question of law. He must act not only in his own interests but also in the interests of the defendant and keep down the damages, so far as it is reasonable and proper, by acting reasonably in the matter... In cases of breach of contract the plaintiff is under no obligation to do anything other than in the ordinary course of business, and where he has been placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nice scales at the instance of the defendant whose breach of contract has occasioned the difficulty....?


The plaintiff is under no obligation to destroy his own property, or to injure himself or his commercial reputation, to reduce the damages payable by the defendant. Furthermore, the plaintiff need not take steps which would injure innocent persons.


(emphasis supplied)


In Banco De Portugal v. Waterlow & Sons Ltd.2, Lord Shankey, L.C., quoted with approval the statement of law enunciated in James Finlay & Co. v. N.V. Kwik Hoo Tong, Handel Maatchappij3, to the effect: ?In England the law is that a person is not obliged to minimize damages on behalf of another who has broken a contract if by doing so he would have injured his commercial reputation by getting a bad name in the trade?. In AMERICAN JURISPRUDENCE, 2d, Vol. 22, para 33 at pp. 55-56 contains the following statement of law:


?33. The general doctrine of avoidable consequences applies to the measure of damages in actions for breach of contract. Thus, the damages awarded to the nondefaulting party to a contract will be determined and measured as though that party had made reasonable efforts to avoid the losses resulting from the default. Some courts have stated this doctrine in terms of a duty owing by the innocent party to the one in default; that is, that the person who is seeking damages for breach of contract has a duty to minimise those damages. However, on analysis, it is clear that in contract cases as well as generally, there is no duty to minimise damages, because no one has a right of action against the non-defaulting party if he does not reasonably amid certain consequences arising from the default. Such a failur

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e does not make the non-defaulting party liable to suit; it only indicates that the damages actually suffered are greater than the law will compensate. Therefore, in contract actions, the doctrine of avoidable consequences is only a statement about how damages will be measured,? (emphasis supplied) From the above statement of law it will appear clear that the non-defaulting party is not expected to take steps which would injure innocent persons. If so, then steps taken by him in performance or discharge of his statutory duty also cannot be weighed against him. In substance the question in each case would be one of the reasonableness of action taken by the non-defaulting party.? 17. While the law does not impose unreasonable demands on a party, particularly who claims to be legally injured, yet, it imposes a duty to ? as far as reasonably possible, ?mitigate? or minimise it. The failure of a plaintiff on this score results in denial of damages for any such loss which he ought reasonably to have avoided. Here, the plaintiff is silent about any impediment in its ability to purchase the product from another manufacturer, or trader. It is not as if the products were beyond the reach of the plaintiff. That short supply of the biscuits by the defendant inconvenienced the plaintiff, cannot be doubted; it also suffered loss of profit which it could reasonably have expected. In the circumstances, it would be inappropriate for the court to award damages for the entire lot of short supply, ie. 1977 tonnes. The plaintiff claims the short supply for the period January 1980 to 17th August, 1981, or roughly about 100 tonnes per month. For the reasons indicated, the court is of opinion that the plaintiff?s failure to mitigate its losses disentitles it to claim compensation towards loss of profit, for the entire quantity; instead, it would be reasonable to grant compensation in respect of half the said quantity, which is conveniently worked out at 988.5785 tonnes. 18. The plaintiff claims Rs. 2000 per tonne as loss of profit. Unlike in the previous suit, where the plaintiff established its expenses, towards each head, and the publicity and advertising effort made by it, in this proceeding, no such attempt has been made. In the circumstances, granting Rs. 2000/- would not be equitable. Instead, the court is of opinion that the amount arrived at in Suit No. 5/1980, i.e Rs.768.75 per tonne denoted the net profit, which was denied to the plaintiff, can be a proper basis, in this suit, too. Thus, the plaintiff is entitled to the sum of Rs. 7,59,969.72 (Rupees seven lakhs, fifty nine thousand nine hundred and seventy two only). Inaddition, it is also entitled to a decree for the sum of Rs. 20,030.25 (Rupees twenty thousand and thirty and paise twenty five only). Since the amount of Rs. 7,59,969.72 is towards damages, no interest is payable. As far as Rs. 20,030.25 is concerned, the plaintiff is entitled to interest, since it was money withheld. The plaintiff is entitled to 15% interest pendente lite, and future interest, on the said amount, till realization. 19. The suit is accordingly decreed, in the above terms, with costs; the counsel?s fee is quantified at Rs. 75,000/-.
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