MESSRS MOOSA OOMER & Co. LTD_ vs MESSRS HAJI E. DOSSA & SONS AND Another
This matter originated from a contractual dispute where the appellant repudiated a contract for the purchase of 5,000 maunds of cotton seeds by refusing delivery of a portion of the goods. Following the breach, the respondents sold the remaining goods in the market, incurring a financial loss based on the difference between the contract price and the market price on the date of resale. The dispute was referred to arbitration, resulting in an award in favor of the respondents. After a series of appellate proceedings, the matter reached the Supreme Court via a petition for special leave to appeal. The core legal question concerned the correct methodology for calculating damages in cases of breach of contract, specifically whether the market price on the date of breach or the actual resale price should determine the quantum of damages. The Supreme Court, noting the reasonableness of the damages awarded and the significant passage of time since payment, declined to adjudicate the legal question, recalled the leave to appeal, and dismissed the appeal, holding that the circumstances did not warrant further examination.
- Is the market price on the date of breach the sole determinant for calculating damages in a contract for the sale of goods?
- Can a court decline to adjudicate a legal question regarding the calculation of damages if the damages awarded are reasonable and payment was made long ago?
1. JUDGMENT.
2. NA&IM HASAN SHAH, J. -In this case the appellant on 15-10-1958repudiated a contract entered into by them with the respondents for purchase of 5,000 maund of cotton seeds by refusing to take delivery of a part of the goods (3,000 maunds of cotton seeds). The respondents, thereupon, on 20- 10-1958, sold the aforesaid 3,000 maunds of cotton seeds in the market at prevailing rate on that day viz. Rs.13 per maund and, therefore, suffered a loss of Rs.6 per maund, as the stipulated rate between the parties was Rs.19 per maund. The respondents referred the matter to arbitration in accordance with the terms and condition of the contract-dated 17-9-1958. Sir Do arbitrator, on 17- 12-1958, awarded a sum of Rs.18, 012-5-3 and Rs.140 as costs for the loss suffered by the respondents.
3. The learned Additional District Judge, Karachi, by his order dated 10-5-1961, however, set aside the award but the appeal (Miscellaneous Appeal No. 46/61) against the said order was allowed by a learned Single Judge of the High Court of West Pakistan, Karachi, by his judgment dated 26-11-1964 and the letters patent appeal against the said judgment was, with minor modifications, dismissed by a Division Bench on 7-5-1971. It appears that the appellants thereafter paid the sum awarded to the respondents. In the meanwhile, however, the appellants also moved a petition for special leave to appeal before this Court which was granted on 7-2-1972 to consider whether the arbitrator observed the correct principles in awarding the damages, namely, whether the market price of the contracted goods on the date of the breach could be allowed and the differences made up from the actual price which the goods fetched on the date of resale. In other words, the legal question, which required consideration, was as to how to work out the damages in cases of breach of contract of this nature.
4. We observe that the damages paid by the appellants are reasonable an in no way excessive.
5. Moreover, the amount was paid as for back as ten years ago. In the peculiar circumstances of this matter we feel this is not a fit case for examination of the abovenoted question.
6. We would, accordingly, recall the order granting leave and dismiss the appeal, leaving the parties to bear their own costs.