Delhi District Court
M/S India Insight Tours Pvt. Ltd vs M/S Excel Cars Ltd on 18 August, 2012
1
IN THE COURT OF SH. SANJEEV AGGARWAL LD. ADJ03
(CENTRAL) DELHI
Suit No. 133/12
M/s India Insight Tours Pvt. Ltd.
A310, Defence Colony,
New Delhi110024
Through Sh. S.M.Makhija
duly authorized vide
Board Resolution passed
in a board meeting dated
December 17, 2004 .....Plaintiff.
Versus
M/s Excel Cars Ltd.,
Lancer Division
M/s Excel Motors
B1, E20, Mohan Cooperative
Industrial Estate,
Mathura Road,
New Delhi110044
Also At:
Plot No. 25, Sector 18,
Maruti Industrial Area,
Gurgaon(Haryana) ...Defendant
Date of Institution of the Suit : 07.01.2005
Date on which order was reserved : 07.08.2012
Date of decision : 18.08.2012
J U D G M E NT
1.Vide this judgment, I shall dispose off the suit for recovery of Rs. 8,41,945.78/, filed by the plaintiff.
Suit No. 133/12M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
22. Brief facts are it is stated that the plaintiff is a Private Limited Company duly incorporated with the Companies Act, 1956 and the suit had been filed through an authorized person competent to file the present suit.
3. It is further stated defendant is a limited company also incorporated under the Companies Act and unit of M/s Excel Motors who is the registered authorized dealer for Mitsubishi Cars, having its registered office at B1 E20, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi and having its showroom and workshop at Gurgaon.
4. It is further stated that the plaintiff company is the owner of a Mitsubishi Lancer Car bearing No. DL 3 CY 853 (hereinafter referred to as "Car"), which was purchased by the plaintiff company on 18.07.2003 for a sum of Rs. 7,90,000/ which was being used by the Director of the company and the same was also financed from City Bank for a total amount of Rs. 6 lacs and the said amount was to be repaid at the monthly installment of Rs. 19,200/ in equal 36 installments. It is further stated that the plaintiff company as on date of accident on 25.10.2004 had repaid 16 installments i.e the amount of Rs. 3,47,554.22 towards the principal and a sum of Rs. 36,445.78 towards the interest was payable. It is stated that the plaintiff from the very beginning had maintained the car in excellent condition and on 25.10.2004, the plaintiff company had sent Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
3the said car to the defendant for inspection for a probable repair for the noise coming from the right rear side of the said car and at the time of booking of the car, it was having perfect condition, except few scratches on the doors, fenders and bumpers.
5. It is further stated that in the evening of 25.10.2004, when the driver of the plaintiff company had to take the delivery of said car alongwith Managing Director Sh. Vishwas Makhija, they were shocked to see that the said car had been completely damaged from the left front side and after enquiry it was revealed that the said car had been misused by the employee of defendant No. 2 unauthorizedly and had been taken out of the premises without the permission of the plaintiff.
6. It is further stated that defendant acted negligently and irresponsibly in allowing the car to go outside the premises and the depreciated value of the car at that time was Rs. 6,38,000/ and the plaintiff after the above incident offered the defendant to buy a new Mitsubishi Lancer Car for the plaintiff company after providing one year depreciation and further offered to pay the differential amount, but no response was received from the defendant company and the plaintiff was still ready and willing to sign any document to do so. It is further stated that the defendant company at a much belated Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
4stage offered to repair the said car at the estimated cost of Rs. 82,000/, to be borne by the defendant and Rs. 25000/ towards depreciation for the parts to be replaced, which offer had been refused by the plaintiff company. It is further stated that once the car has undergone such an accident, it will never perform as a new car, therefore the said car has to be replaced and thereafter, the plaintiff had to purchase a new Baleno car on 16.11.2004. It is stated that the plaintiff is entitled to claim from the defendant the following amounts alongwith interest:
(i)Recovery towards the Damaged Car at the insured value Rs. 6,38,000/
(ii)Recovery of Interest on the outstanding installments Rs. 36,445.78
(iii)Recovery towards cost of Taxi Fare from October 26,20004 till November 21, 2004 Rs. 67,500/
(iv)Recovery towards damages for mental agony, loss of business and reputation and harassment Rs.1,00,000/
7. Written statement has been filed by the defendant in which it is stated that this court has no territorial jurisdiction to try the present suit, as cause of action, if any, arose at Gurgaon and Delhi courts have no jurisdiction to try the present suit, even otherwise the plaint has not been properly Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
5verified and is liable to be dismissed. It is not disputed that the plaintiff had sent his car for service & repairs at the defendant workshop on the date alleged in the plaint.
8. It is further submitted that after the car was serviced, as per the usual practice, the Senior Mechanic and Service Advisor had taken the car for a road test for the rear side noise inspection, to IFFCO road in Gurgaon, bisecting Sector 17 and
18. Due to heavy traffic on that road, it was not possible to drive the car at a speed more than 1020 Kms per hour. While on the road test on the above road, a SUMO, which was in front of the plaintiff's c ar, suddenly stopped on the wrong side.
The Senior Mechanic, who was driving the car, applied the break and tried to control the car, but the car did not stop and hit the SUMO from the back side and therefore, there was damage to the body of external left side of the car. The car was externally damaged due to the aforesaid reason and not because the driver was driving the car rashly and negligently. It is further submitted that the plaintiff had given his consent for taking the car out for a road test, as is clear from the job card which is annexed as Annexure 1 to the written statement. Therefore it does not now lie in the mouth of the plaintiff to state that the car had been taken out of the workshop illegally and unauthorizedly for some personal work of the employee of the defendant.
Suit No. 133/12M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
69. It is further stated that all four doors of the car were scratched and dented, when the plaintiff had taken the car to the workshop and both the fenders, quarter panels were also dented and scratched and even both the rear shockers, link kit and tyres were defective and required replacement. It is further stated that the defendant was ready to repair the car provided the defendant could claim the insurance of the car from the plaintiff, but the plaintiff had refused the said proposal of the defendant. Since plaintiff was not ready to use a repaired car, which damage was only external and the plaintiff was adamant to get a new car at the cost of defendant company. It is further submitted that plaintiff had got the said car inspected and had taken photographs, which have been filed on record and plaintiff never got his surveyor to get the car valued and it is stated that plaintiff is not entitled for any relief claimed in the plaint, therefore the suit of the plaintiff is liable to be dismissed.
10. Replication has been filed by the plaintiff to the Written Statement of defendant in which the allegations made in the Written Statement were denied in toto and those made in the plaint were reiterated as correct.
11. From the pleadings of the parties vide order dated 13.11.2007, following issues were framed:
(i)Whether the Delhi court has no territorial Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.7
jurisdiction to entertain and try this suit ? OPD.
(ii)Whether the suit has not been signed, verified and instituted by a competent person ?OPP
(iii)Whether the plaintiff is entitled for damages as claimed ? OPP.
(iv)Whether the plaintiff is entitled for any interest ? If so, at what rate ? OPP.
(v)Relief.
12. Plaintiff in support of his case has examined Sh. S.M.Makhija as PW1, who is the Director of plaintiff company. He has also been cross examined on behalf of the defendant. Vide order dated 12.04.12 of the Ld. Predecessor the defendant was proceeded exparte and thereafter the matter was listed for final arguments.
13. I have heard Ld. Counsel for the plaintiff Sh. Sumit Jidani and perused the record. My issue wise findings are as under:
ISSUE NO. 1The onus to prove this issue was upon the defendant. The defendant has not lead any evidence on this issue as defendant has already been proceeded exparte, even otherwise as the registered office of the defendant is situated within the local jurisdiction of this court and the workshop where the plaintiff had sent its car for repairs at Gurgaon is Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.8
only a unit of the defendant company having its registered office at New Delhi, therefore this court has territorial jurisdiction to try and entertain this suit. This issue is decided accordingly decided in favour of the plaintiff and against the defendant.ISSUE NO. 2
The onus to prove this issue was upon the plaintiff. PW1 has stated in his affidavit that he is the Director of the plaintiff company and he has been authorized vide resolution dated 17.12.2004 to sign, verify and file the suit vide resolution ExPW1/1 and the company is duly incorporated under Companies Act vide ExPW1/2. PW1 was also put in detailed cross examination, but nothing material has come out in his testimony which shows that the PW1 was not duly authorized by the resolution relied upon by him to sign, verify and file the suit. No contrary evidence has also been placed on the record by the defendant to displace the evidence lead by the plaintiff on this issue. Consequently, this issue is also decided in favour of the plaintiff and against the defendant.ISSUE NO. 3 & 4
These issues are taken up together, as they are interconnected with each other.
This is the major bone of contention between the parties as the plaintiff has claimed that he is entitled to Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.9
recovery of amount towards the damaged car at the insured value at the time of the accident incurred by the defendant amounting to Rs. 6,38,000/ and further recovery of interest on the outstanding installments of the loan, which he had taken from the City Bank amounting to Rs. 36445.78 and he is also entitled to recovery towards cost of taxi fair from 26.10.04 to 21.11.04 and he purchased a new car for Rs. 6,75,000/ and he is further entitled for damages of mental agony, loss of business, reputation and harassment. The principle for claiming the compensation for loss or damage caused by breach of contract is contained in Section 73 of the Indian Contract Act which is reproduced as under:
" Compensation for loss or damage caused by breach of contract When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach."
Illustration (b) mentions in Section 73 of the Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
10Contract is also reproduced for ready reference:
" A hires B's s hip to go to Bombay, and there take on board, on the first of January, a cargo, which A is to provide, and to bring it to Calcutta, the freight to be paid when earned. B' s ship does not go to Bombay, but A has opportunities of procuring suitable conveyance for the cargo upon terms as advantageous as those on which he had chartered the ship. A avails himself of those opportunities, but is put to trouble and expense in doing so. A is entitled to receive compensation from B in respect of such trouble and expense."
Further the principle of assessment of damage has been laid down in AIR 2000 SC 2003 as under:
"In case of breach of contract damages may be claimed by one party from the other. The damages may be liquidated or unliquidated. Broadly the principle underlying assessment of damages is to put the aggrieved party monetarily in the same position, as far as possible, in which it would have been if the contract had been performed. Here the rule as to remoteness of damages comes into play. Such loss may be compensated as the parties could have contemplated at the time of entering into the contract. The party held liable to compensation is obliged to Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.11
compensate for such losses as directly flow from its breach. It follows that compensation for mental agony could not be awarded."
From the reading of Section 73 as a whole including illustration cited above, it is clear that the plaintiff is only entitled to reasonable damages for any loss or damages caused to him for the breach of contract, which naturally arose in the usual course of things from such breach that is to say substance of Section 73 is to put a party who has suffered breach in the same condition as far as possible which would have been the case if the contract had been performed by the opposite party who has caused breach of the same and further plaintiff would only be entitled to such reasonable damages by applying the principle of mitigation of damages i.e the plaintiff should take all the steps to mitigate damages which the other party had deprived it.
The leading English case on which Section 73 of the Indian Contract Act is based is the case of Hadley Vs. Baxendale(1854) 9 Ex. 341, 354 in which it was held as under:
"Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e according to the usual course of Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.12
things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. But, on the other hand if these special circumstances were wholly unknown to the party breaking the contract, he at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from such a breach of contract. For had the special circumstances been known, the parties might have specially provided for the breach of contract by special terms as to damages in that case; and of this advantage it would be very unjust to deprive them."
Further it has been held in judgment British Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
13Estinghouse, Etc. Co. Vs Underground Electric Etc., Co. (1912) A.C. 673 that:
"So far as practicable, " a person with whom a contract has been broken has a right to fulfill that contact for himself as nearly as may be, but he must not doe this unreasonably or oppressively as regards the other party, or extravagantly." It is even his duty to take all the reasonable steps to mitigate the loss consequent on the breach; and then the effect in actual diminution of the loss he had suffered may be taken into account, and this apart from the question whether it was his duty to act."
In view of the above law laid down in the aforesaid judgments, even otherwise the defendant is exparte, the plaintiff has to prove his case as per law, on the yardstick laid down in Section 73 of the Indian Contract Act. In the present case the plaintiff would only be entitled to that compensation for any loss or damage caused to him which naturally arose in the usual course of things from such breach such as may be reasonably supposed to have been in the contemplation of the parties at the time when they made the contract, as the probable result of the breach. In the present case the plaintiff is not entitled to any damages which he has claimed for the price of the new car less depreciated value of the car on the Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
14date of damage, nor he is entitled to any recovery of interest on the outstanding installments which he had to pay to Citi Bank as per pleadings on the record and consequently defendant is also not entitled to the taxi fare which he has claimed amounting to Rs. 67500/, as even though the defendant has not lead any evidence and consequently has failed to prove its defence as pleaded in the written statement, but at the same time as per principle of mitigation of loss the plaintiff should have taken back his vehicle from the workshop of the defendant and if the defendant was not willing to get it repaired at his own cost then the plaintiff should have repaired the vehicle at his own cost and then could have claimed the damages or cost so incurred by him on the said repairs from any other workshop alongwith compensation.
From the photographs of vehicle placed on record by the plaintiff which the plaintiff had filed alongwith list of documents, it is apparent that the vehicle had only suffered damage to the left side of the fender and front bumper, it nowhere appears from the mere look of the said photographs that the vehicle was totally damaged, so as not to be able to ply on the road, even if that was so then the vehicle could have been towed away to any competent workshop where the same could have been repaired and the cost so incurred by the plaintiff for the repair of said vehicle could have been Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
15recovered from the defendant by filing the suit in this regard. No such steps were taken by the plaintiff to mitigate the loss consequent to breach of contract with the defendant workshop.
Vide order dated 23.05.06, during trial the defendant was directed to repair the vehicle in question at his own cost within one month from the date of order and after the car was so repaired the plaintiff was to be intimated for the same. It appars that after repairs, the car was handed over to the plaintiff which is now in the possession of the plaintiff and the photographs of repaired car have also been filed on record which are ExPW1/8. From the said photographs it appears that car is in good condition, therefore the plaintiff is not entitled to the recovery towards the damaged car at the insured value for a sum of Rs. 6,38,000/, nor the plaintiff is entitled to the recovery of interest of the outstanding installments, as the defendant cannot be said to have any special knowledge that the said car had been financed from some financial institution or bank. In the absence of special circumstances or knowledge with regard to the finance of the said vehicle, no interest on the said amount can be claimed by the plaintiff in the present case can be claimed. For the same reasons the plaintiff is not entitled to recover the cost towards taxi fare from 26.10.2004 to 21.11.2004 amounting to Rs.
Suit No. 133/12M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
1667,500/, as the said amount cannot be considered to be fair and reasonable damages/compensation which arose naturally according to the usual course of things from breach of contract or which the party knew when they made the contract, to be likely result from the breach of it. However, the plaintiff is certainly entitled towards damages for mental agony, loss of business, reputation and harassment meted out by the plaintiff to the defendant company by causing wrongful loss to his car, as it appears that the defendant had taken the car outside the workshop without explicit consent of the plaintiff and the defendant thereafter caused accident to the car of the plaintiff and the defence of the defendant that it took place due to negligence of other vehicle has not been proved, as no iota of evidence has been led by the defendant in this regard, therefore compensation of Rs 1 lakh claimed by the plaintiff towards mental agony, loss of business, reputation and harassment can be said to be just, fair and reasonable amount of compensation in the facts and circumstances of the present case due to the breach of contract caused by the defendant, which contract was that the defendant would repair the car of the plaintiff as per the satisfaction of the plaintiff and as per the requirement given by the plaintiff to the defendant at the time of handing over the vehicle at the workshop of the defendant and further the defendant would take all care and Suit No. 133/12 M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
17caution in preservation of vehicle in the same condition as it was at the time of handing over the same, which defendant did not and employee of the defendant caused accident when he took the vehicle outside the workshop. Issues No. 3 & 4 are decided accordingly.
RELIEF In view of my findings on the above issues, the suit of the plaintiff is decreed for Rs. 1 lakh alongwith simple interest @ 12% per annum pendentlite and future interest from the date of filing of the suit till its realization alongwith costs.. Decree sheet be prepared accordingly.
14. Thereafter, file be consigned to Record Room.
ANNOUNCED IN THE OPEN (Sanjeev Aggarwal)
COURT ON 18.08.2012 ADJ(Central03)
Delhi/18.08.2012
Suit No. 133/12
M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.
18 Suit No. 133/12M/s India Insight Tours Pvt. Ltd Vs. M/s Excel Cars Ltd.