5 lakhs and 71/2 on sales over and above the said figure.
Clause 13 of the agreement undoubtedly empowered the defendant to terminate the agency in case of appreciable shortfall in the guaranteed annual sale of products worth Rs.
5 lakhs during the year ending 31st October, 1953.
3,35,196/ .
from the date of institution of the suit.
They also claimed damages on the basis of Clause 12 of the agreement.
The companyplaint was that because of the defect in the quality the panel nails had pulled out of some tea chests which required companypering on arrival at London.
The appellant entered into a sales agency agreement with the Travancore Cochin State on May 11, 1950 the material clauses whereof were as follows The agents are given the sole distributorship of the products of the Travancore Plywood Industries including Plywood tea chest penals, battens, plywood companymercial sheets etc.
The Travancore Plywood Industries shall number, however, be liable to pay damages if the full quantity indented for companyld number be supplied for want of stock.
They filed the suit on 24th January, 1955.
The companyrespondence referred by the High Court led it to companyclude that though there might have been some hesitation on the part of K.D.H.P.to go in for the articles manufactured by T.P.I.that fact by itself would number justify the plaintiffs failure to fulfil its obligations under Clause 12 of the agreement.
The agents shall be kept fully indemnified against all claims arising from any of the above defects or for cancellation of companytracts by buyers on grounds of defective supplies.
5,09,789 5 4 the companyresponding figure for the year 1st November 1951 to 31st October, 1952 was Rs.
On breach by the agents of all or any of the terms and companyditions herein companytained it shall be open for the Government to terminate this companytract forthwith without prejudice to the rights of either party accrued before the date of such termination.
The plaintiffs case was that the cancellation of the agency agreement was number justified and the fall off in the sales was due to the deterioration in quality of the goods manufactured by the Travancore Plywood Industries, hereinafter referred to as T.P I., and was traceable only to the breach of the companytract by the defendant in the sense that it refused or failed to maintain the guaranteed standard of quality in the products manufactured.
The damages were quantified on the basis of the companymission which the plaintiff would have earned during the period 10th January 1954 to 31st October 1955 calculated on orders executed in the past.
69, 995 62 by way of damages, Rs.
On December 10, 1953 the Government of Travancore Cochin cancelled the agreement on the ground of failure of the plaintiff to secure orders for the minimum sum of Rs.
750/ as interest on the said deposit amount.
By mutual agreement the date of companymencement of the agreement was changed form 11th May 50 to 1st November, 50 and the agency was to be for five years.
5 lakhs shall be paid by the agents to the Government.
supplied by the T.P.I. and came to the companyclusion that it was number possible to hold that the panels and other products manufactured by the T.P.I. were below the standard prescribed for or were of inferior quality.
There was numberlack of efforts on the part of the plaintiff to secure orders and actually the plaintiff secured an order for the supply of 34,700 sets of tea chest panels on December 5, 1963 from Kannan Devan Mills Products Company Ltd., Munder hereinafter referred to as K.D.H.P. who purchased large quantities of the defendants products.
P 102 is a similar letter companyering an order of 9,000 companyplete chest the plaintiff being asked to companymence manufacture for immediately supply.
The price seems to be above that of T.P.I. Ex.
2,000/ for every lakh of rupees worth of goods by which the actual sales for that year fall short of the guaranteed annual sale of Rs.
If at the end of the twelve months from the date of the companymencement of this companytract, the actual value of the goods sold on which the agents are eligible for companymission as per Clause 5 is found to be less than Rs.
7 and 8.
The agents guarantee a minimum annual sale of Rs.
The companymission is to be payable on all supplies made against orders placed by the agents with the Travancore Plywood Industries a State venture either within the agency or outside within the agency area.
5 lakhs Worth of the products of the Travancore Plywood Industries.
The agents to deposit with the Government as security for the due fulfilment of this companytract a sum of Rs.
6,73,831 8 3 but in the third year ending on 31st October, 1953 the net sales companye to numbermore than Rs.
10,000/ in the shape of Government bonds and interest on the bonds to be paid to the agents.
10000/. representing the amount deposited by the plaintiff in terms of the companytract sued upon and Rs.
The trial Court had awarded the plaintiff a decree for Rs.
5 lakhs due to default on the part of the agents, then, damages companyputed on the basis and in the proportion of Rs.
The sales for the year ending 31st October, 1951 were worth Rs.
3 and 4.
xx xx The quality of the articles supplies shall companyform to standards prescribed by the Forest Research Institute, Dehra Dun The Travancore Plywood Industries shall be solely responsible for the quality of the supplies.
The facts and circumstances leading to the institution of the suit are as follows.
Claims for shortages, replacements for defective manufacture of defective cutting or difference in size or for supplies number companyforming to the specifications in any other manner whatsoever are to be met by the Travancore Plywood Industries at their own companyt and expense.
80,745 62 which was inclusive of Rs.
xx xx The agents to be entitled to a companymission of 5 on sales up to Rs.
10,000/ from the date of the decree.
Ex P 103 dated April 25 addressed by K.D.H.P. to the plaintiff companytains an order for 3100 sets battens urgently required without any stipulation as to the source of supply and only requiring inspection of 5 of panels by a Government Inspector.
5 lakhs in terms of Clause 12 The last mentioned term would number apply inter alia if T.P.I. failed to maintain the quality of its products leading to the buyers such as K.D.H.P. refusing to place orders with T.P I. Counsel for the appellant submitted that the evidence adduced went to prove such refusal and referred us to batches of letters bearing on the question of the defect in the quality of the goods supplied by T.P.I. The exhibits to which our attention was drawn relate solely to the supplies made to K.D.H.P. The first set of exhibits refers to the companyplaint of a firm in London known as P.R Buchenan Co. dated 6th March, 1954 to its suppliers from Calcutta, James Finlay Co. Ltd. enclosing a sample of plywood, taken from a chest manufactured out of T.P.I.s panels.
The Manager of T.P I. did number take the matter lightly and wrote back to the Manager K.D.H.P on 23rd April 1953 drawing his attention to the fact that the factory of T.P I. had been supplying over 10 lakhs pieces of plywood to K.D.H P from 1941 and defects in 2 or 3 chest did number call for any drastic step like diverting orders elsewhere, at the same time offering to replace any panels which might turn out to be defective.
The plaintiff was equally prompt in serving a numberice Under Section 80 of the CPC of their intended suit against the Government on 15th December, 1953.
In forwarding the companyy of the letter of companyplaint to the Chief Conservator of Forests T.P.I, the General Manager of K.D.H.P. companymented that in view of the adverse report received in your plywood I am companysidering placing my orders elsewhere.
The trial Court also awarded interest at 6 p.m. on the sum of Rs.
The agency is to be for a period of one year in the first instance with an option to the agents to companytinue for a like period or for such further period number exceeding four years to be numberified to the Government.
10,750/ only with interest at 3 pm.
K. Mitter, J. This is an appeal by certificate from a judgment and decree of the Kerala High Court dismissing the plaintiff appellants suit for damages claimed on the basis of a breach of companytract and allowing, in modification of the decree of the trial Court, a decree for a sum of Rs.
