SUPREME COURT OF INDIA

Before:- M. Srinivasan and R.C. Lahoti, JJ.

Appeal Civil 4952 of 1999. D/d. 06.09.1999.

K.N.N. Achar - Petitioner

Versus

Karnataka Power Corpn. Ltd. - Respondents

Civil Procedure Code, 1908, Section 100 - Contract Act, 1872, Sections 73 and 161 - Second appeal - Contract for transportation of goods - Seizure of goods by police on the ground that the same were being illegally transported - Suit for recovery of damages by consignor on the ground that respondent had not taken appropriate steps for getting the goods released from the police authorities decreed by lower appellate Court - Second appeal in High Court - High Court, without framing a substantial question of law, observed that Section 73 was not applicable and right provision was Section 161 of Contract Act - Failure to refer to Section 161 either in trial court or in the appellate Court - High Court simply set aside the judgment and decree of the courts below and granted a decree in favour of the plaintiff - Held, not valid - Appeal remanded back to the High Court for decision afresh.

[Para ]

ORDER

R.C. Lahoti, J. - Leave granted.

2. This appeal arises out of a suit for recovery of damages filed by the respondent. The appellant was operating the business of transportation of goods. The respondent contracted with the appellant for transportation of cement from the factory of A.C.C. Ltd., Shahabad to its godown at Ambika Nagar, Ganeshgudi. The said agreement was to be in force till 31.3.1981. The appellant took delivery of 20 M. Tonnes of cement on 31.1.1981 and 40 M. Tonnes of cement on 1.2.1981 for transport and delivery to the respondent's godown at Ambika Nagar. The total cost of cement was about Rs. 25,000/ -. According to the appellant when the vehicles were loaded there was not sufficient diesel available and therefore the goods had to be unloaded and kept in a warehouse so that the transport could be made after getting the required diesel. In that process, there was a delay and goods could not be delivered within the specified time.

3. In the meanwhile, there was a seizure of the goods by the police on the ground that the same were being illegally transported. The appellant claimed that he informed the respondent about the unlawful seizure and requested it to get the goods released by informing the concerned authorities that the goods belonged to it and were being lawfully transported to their godown. According to the appellant, no steps were taken by the respondent to get the goods released. Both the trial court and the lower appellate court found that the respondent had not taken appropriate steps for getting the goods released from the police authorities and if it had acted in time such amount of damages would not have been caused.

4. On second appeal, the only substantial question of law framed in the grounds of appeal read as follows:-

Whether the court below is right in putting the burden on the plaintiff to establish that he has taken all reasonable steps to mitigate the loss consequent on the breach of contract having regard to the law laid down by the Supreme Court in AIR 1981 Supreme Court 162.

5. The High Court did not decide that substantial question of law. The High Court proceeded to observe that there was something fishy in between as the goods were unloaded for the purpose of getting diesel for the lorry. The High Court proceeded to observe that the damages were claimed under Section 73 of the Contract Act but the right provision was only Section 161 of the Indian Contract Act. It is to be noted that Section 161 was not referred to by the respondent either in the trial court or in the appellate court. Apart from that, the High court did not frame any substantial question of law which arose in this case. Without going into any of the questions which arise for consideration, the High Court simply set aside the judgment and decree of the courts below and granted a decree in favour of the plaintiff.

6. To say the least, the judgment of the High Court is unsatisfactory. It is not in accord with the principle of law repeatedly laid down by this Court that while dealing with a second appeal under Section 100 Civil Procedure Code the High Court shall frame substantial question of law and decide the same. Hence the judgment is set aside and the appeal is allowed.

7. The second appeal is remanded back to the High Court for fresh disposal in accordance with law. The High Court shall frame all substantial questions of law which arise in the case and decide the same in accordance with law. No order as to costs.

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