TEAM CODE:- 28

JAMIA MILLIA ISLAMIA

BEFORE
THE HON’BLE TRIAL COURT AT SAKET

DISPUTE RELATING TO
BREACH OF CONTRACT AND TORT OF NEGLIGENCE

[Under S. 15 & S. 19 of The Code of Civil Procedure, 1908]

In the Matter of

Killiance Mio………………………………………………………………(PLAINTIFF)

V.

Drazon Deliveries Ltd. & Anr………………………………………...(RESPONDENT)

MEMORIAL for PLAINTIFF

~ Killiance Mio~
 I

TABLE OF CONTENTS

Table of Contents.............................................................................................................I

Index of Abbreviations..................................................................................................II

Index of Authorities......................................................................................................IV

Statement of Jurisdiction............................................................................................VII

Statement of Facts......................................................................................................VIII

Statement of Issues........................................................................................................XI

Summary of Arguments..............................................................................................XII

Arguments Advanced................................................................................................1-15

I. Whether Defendant 1 i.e. Drazon Deliveries should be liable for fraud or not?….1-4

II. Whether Defendant 1 i.e. Drazon Deliveries liable to pay the purchase price and

damages for breach of contract or not?...................................................................5-11

2.1 There is a breach of contract on part of Drazon Deliveries...............................5-8

2.2 Plaintiff has a right to seek purchase price.........................................................8-9

2.3 Plaintiff is entitled to sue for damages...............................................................9-11

III. Whether Defendant 2 i.e AK Coating Ltd. is liable for negligence or not?...12-15

3.1 The employee of AK Coating Ltd i.e. Barnab is liable for Negligence……...12-13

3.2 AK Coating Ltd. is vicariously liable for acts of its employee……………….13-15

Prayer……………………………………………………………………………… XV

MEMORIAL for PLAINTIFF TABLE OF CONTENTS

 II

TABLE OF ABBREVIATIONS

& And

§ /Sec./sec. Section

A.C. Appeal Cases (England)

A.P. Andhra Pradesh

All ER All England Reporter

Anr. Another

Bom Bombay

Cal. Calcutta

Del Delhi

Etc. Et cetera

EWCA civ. Court of Appeal, Civil Division

EWHC England and Wales High Court (UK

Hon’ble Honorable

KB Kings bench

Lah. Lahore

Ltd. Limited

Nag Nagpur

MEMORIAL for PLAINTIFF TABLE OF CONTENTS

 III

Nov. November

Oct. October

Ori Orissa

Ors. Others

p. Page

para. Paragraph

QB Queen’s Bench

QBD Queen’s Bench Division

SC Supreme Court

SCALE Supreme Court Almanac

SCC Supreme court cases

Sind Sindh

U.S. United States Reports

UKHL UK House of Lords

v. Versus

Vol. Volume

WLR Weekly law reporter

MEMORIAL for PLAINTIFF TABLE OF CONTENTS

 IV

INDEX OF AUTHORITIES

Judicial Decisions Cited

I. FOREIGN CASES

NAME OF CASES PAGE

Al-Kandari v. JR brown 3
Anns v Merton London Borough Council 12
Bell v. Great Northern Railway Co. of Ireland 12
Caparo Industries plc v. Dickman 12
Derry v. Peek 2
Donoghue v Stevenson 12
Dooley v Cammell Laird 13
Dutton v. Bogner Regis 13
Humberstone v Northern Timber Mills 15
Isler v. Brown 3
Jewson & Sons Ltd. v. Arcos Ltd 2
Joel v. Morison 14
Jones v. Bowden 15
Marc Rich & Co Ag and Others -v- Bishop Rock Marine Co Ltd and Others HL 13
Market Investigation Ltd. v Minister of Social Security 14
Montreal v Montreal Locomotive Works Ltd 15
Peek v. Gurney 2
Performing Right Society Ltd. v. Mitchell Etc. Ltd. 14
R v. Kylsant 2
Rhino Linings USA Inc v. Rocky Mountain Lining Inc 5
Short V.J. & W. Henderson Ltd 14
Spartan Steel & Alloys Ltd. v. Martin & Co. 14
Standard Chartered Bank v. Pakistan Shipping Co 3
Stavely Iron & Chemical Co. v. Jones 14
Storey v. Ashton 15

II. Indian Cases

NAME OF CASES PAGE

ARSP Subramanian Chettey v. Official Assignee of Madras 2
Barium Chemicals Ltd. V. A.P. Mining Corporation Ltd. 7
Chief Secy, State of Gujrat v Kothari Associates 8
Enercon (India) Ltd. v. Enercon GMBH 7
Gomathinath Pillai v. Palaniswami Nadar 5
Gopal Krishna Pillai v. K.M. Mani 6
Gundappa Chikappa Kurbar v. Balaji Ramji Dange 2
Haji Ahmed Yar Khan v. Abdul Gani Khan 2
Kamal Kant Paliwal v. Smt Prakash Devi Paliwal 3
M. Lachia Setty & Sons Ltd v Coffee Board Bangalore 9

MEMORIAL for PLAINTIFF INDEX OF AUTHORITIES

 V

Man Kaur (Dead) by LRS v. Hartar Singh Sangha 5

Maula Bux v. Union of India 5
Mithoolal Nayak v. Life Insurance Corpn Of India 4
MSK Projects (I) (JV) Ltd. v. State of Rajasthan 7
Murlidhar Chiranjilal v. Harish Chandra Dwarkadas 8
Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. 9
Priya Vasant Kalgutkar v. Murad Shaikh 7
Rajkot Municipal Corpn. v. Manjulben Jyantilal Nakum 7
Raju Kakara Shetty v. Ramesh Prataprao Shiraole 5
Ram Kumar v. Lakshmi Narayan 9
Silver Jubilee Tailoring House v. Chief Inspector of Shops 15
Tata Iron & Steel Co Ltd v Ramanlal Kandoi 10
Union of India v. Jolly Steel Industries (Pvt) Ltd 10
United Motors Finance Co v. Addison and Co 3

WEBSITES REFERRED

1. Manupatra Online Resources, http://www.manupatra.com.

2. Lexis Nexis Academica, http://www.lexisnexis.com/academica.
3. Lexis Nexis Legal, http://www.lexisnexis.com/in/legal.
4. SCC Online, http://www.scconline.co.in.
5. Oxford Dictionary, http://www.oxforddictionaries.com.
6. Indian Kanoon, https://indiankanoon.org/
7. Legal Services India, http://www.legalservicesindia.com/

BOOKS REFERRED

 SIR FREDRICK POLLOCK & SIR DINSHAW FARDUNJI MULLA, INDIAN

CONTRACT ACT,1872 V. I & II (14th ed. Lexis Nexis 2016)
 H.K. SAHAREY, DUTT ON CONTRACT (11th ed. Eastern Law House 2013)
 Dr. R.K. Bangia, Contract V. I & II (Allahabad Law Agency 2015)
 Dr. R.K. Bangia, Indian Contract Act, 1872 (Allahabad Law Agency 2016)
 N. Nandi , Law Relating to Indian Contract Act 1972 (2011 Reprint 2012)
 Avtar Singh, Law of Contract & Specific Relief (8th ed. Eastern Book Company
 Avtar Singh, Textbook on Law of Contract & Specific Relief (6th Ed. Eastern Book
Company 2016)
 R. Ramchandran, Law of Torts,(2nd Edition,2013)
 Prof. S.P.Singh, Law of Torts,(7th Edition,2015)
 Ramasawami Iyer’s Law of Torts,
 Ratanlal & Dhirajlal, Law of Torts,(27th Edition,2016)
 Dr. N.V.Paranjape, Law of TORTS (Consumer Protection Law and Compensation
Under Other Statutory Laws), (9th Edition,2016)
 B.M.Gandhi, Law Of TORTS,(4th Edition,2016)
 Dr. Avtar Singh & Dr. Harpreet Kaur, Introduction to Law Of Torts and Consumer
Protection, (3rd Edition,2013)

MEMORIAL for PLAINTIFF INDEX OF AUTHORITIES

 VI

STATUTES REFERRED:-

1. Indian Contract Act, 1872

2. The Sale of Goods Act,1930
3. Specific Relief Act, 1963
4. The Code Of Civil Procedure, 1908

MEMORIAL for PLAINTIFF INDEX OF AUTHORITIES

 VII

STATEMENT OF JURISDICTION

The PLAINTIFF (Killiance Mio) humbly submits the dispute, concerning ‘Fraud,

Breach Of Contract and Negligence’, to the Territorial and Pecuniary Jurisdiction of the

Hon’ble District Court of Judicature at Saket, Delhi, India pursuant to S.6 and S.9 under

S.15 and S.19 of the Civil Procedure Code, 1908, respectively.

S.6 of The Code of Civil Procedure,1908 states:

“Save in so far as is otherwise expressly provided, nothing herein contained shall operate to

give any Court jurisdiction over suits the amount or value of the subject-matter of which

exceeds the pecuniary limits (if any) of its ordinary jurisdiction.”

S.9 of The Code of Civil Procedure,1908 states:

“The Courts shall (subject to the provisions herein contained) have jurisdiction to try all

suits of a civil nature excepting suits of which their cognizance is either expressly or

impliedly barred.

S.15 of The Code of Civil Procedure,1908 states:

“Every suit shall be instituted in the Court of the lowest grade competent to try it.”

S.19 of The Code of Civil Procedure,1908 states:

“Where a suit is for compensation for wrong done to the person or to movable property, if

the wrong was done within the local limits of the jurisdiction of one Court and the defendant

resides, or carries on business, or personally works for gain, within the local limits of the

jurisdiction of another Court, the suit may be instituted at the option of the plaintiff in either

of the said Courts.”

All Laws of the country of Indiana are pari materia to laws of India. Thereby, PLAINTIFF

submits this memorial which sets forth facts & laws on which the claims are based.

MEMORIAL for PLAINTIFF STATEMENT OF JURISDICTION

 VIII

STATEMENT OF FACTS

1. Mr. Bhukesh Rambani is the managing director of Killiance Mio & Co. (“Mio”)

which works in the field of Internet access, telecommunication and hardware production

and headquartered in Senarashtra, Indiana.

2. Mio resolved to win customers by providing them free internet access and voice calls

st st
for a period of six months from 1 Oct. 2020 to 31 March 2021 which created panic

in the telecom industry and set high standards for the incumbent operators.

3. Mr. Rambani wanted to acquire a new machine that would further reduce Mio’s costs

of production which is known in the telecommunication industry as the NAM02. There

were only three NAM02’s in existence in the world, which were very expensive owing to

their exclusivity, efficiency and cost-cutting advantages.

th
4. On 20 Oct. 2020, Mr. Rambani learned that Drazon Deliveries Ltd. (Drazon

Deliveries), a freight business that distributed many of Mio’s products and the products

of Mio’s other rival companies, had acquired a NAM02 which was a surprise to

Mr.Rambani, as he had believed that all of the NAM02’s in existence were owned only by

Mio’s competitors. Mr. Rambani was in friendly terms with Mr. Badshah Khan who was

the CEO of Drazon Deliveries since both of them were classmates in high school.

st
5.After Negotiations, on 1 Nov. 2020, Drazon Deliveries agreed to sell its NAM02 to

Mio for ₹ 4 Million INR. During the negotiation, it was orally conveyed that the buyer

i.e. Mio must exercise due diligence before the sale which would have given way to an

elaborate procedure. But, Mr. Rambani simply wanted to acquire the machine as soon as

MEMORIAL for PLAINTIFF STATEMENT OF JURISDICTION

 IX

possible as there were other companies willing to pay a higher price for NAM02.

Therefore, Mr. Rambani made no further enquiry as to how Drazon Deliveries came in

possession of NAM02.

th
5. The negotiations were concluded by 5 Nov. 2020 and it was agreed between the

th
parties that the machine has to be delivered to Mio on 20 Nov. 2020. Till then the

machine was to be kept in the basement of Drazon Deliveries wherein some repair work

was going on. The purchase price was to be paid on the delivery date itself.

6. Pursuant to the contract, the machine was successfully delivered to Mio and

complete payment was made in favor of Drazon Deliveries. Later, when the machine was

put to use, it was discovered that the same has not been working properly due to

moisture in some of its hardware components which was shock to Mr. Rambani and due

to this, Mio had to continue using its older machinery to manufacture its products.

th
7. It was discovered that on 18 Nov. 2020, one of AK Coating Ltd. employees, Mr.

Barnab Boswami, caused a water leak which affected the NAM02. Mr.Boswami

knew that the NAM02 was an extremely expensive machine and was aware of the

importance to Mio of acquiring the same. He did not inform his employer about the

incident which mal-functioned the machine.

th
8. On 25 Nov. 2020, Mio tried to repair the machine by involving its ‟team of

technicians in order to make the machine functional but due to a spark the machine

got irreparably damaged. Subsequently, it was discovered that the NAM02 was stolen by

Drazon Deliveries from Fairtel Ltd., which was one of Killiance Mio‟s rivals, and to

whose premises Drazon Deliveries had access.

9. Killiance Mio filed a suit in the Court of law against Drazon Deliveries Ltd.

MEMORIAL for PLAINTIFF STATEMENT OF JURISDICTION

 X

seeking the purchase price and damages for breach of a contract. They alleged that fraud

has been committed upon them by the defendant company by making a sale of damaged

machine and they have wrongfully represented themselves as the rightful owners of the

machine and also made AK Coating Ltd. a party to the suit in respect of their act of

negligence which damaged the machine.

MEMORIAL for PLAINTIFF STATEMENT OF JURISDICTION

 XI

STATEMENT OF ISSUES

I
Whether defendant be liable for fraud or not.

II
Whether the defendant be liable to pay the purchase price and damages for breach of
contract or not.

III
Whether A.K. Coating Ltd. be liable for act of negligence.

MEMORIAL for PLAINTIFF STATEMENT OF ISSUES

 XII

SUMMARY OF ISSUES

1.Whether defendant be liable for fraud or not.

It is humbly submitted by the plaintiff that defendant should be held liable for fraud because

it has wrongfully represented itself as the rightful owners of the machine NAM02. It caused

breach in its duty to speak about the material fact by being silent during the negotiations as

well as concealed the fact that they were not the rightful owners and they had acquired the

machine by stealing it from Fairtel Ltd. The defendant failed in their duty to speak which is

one of the essential grounds of fraud.

2.Whether the defendant be liable to pay the purchase price and damages for breach of

contract or not?

It is most humbly pleaded that the defendant is liable to pay the purchase price as well as

damages for breach of contract because defendant has failed to perform the obligations as

implied by contract by making sale of a damaged machine.. Here defendants sold the

damaged machine and caused breach of contract by selling defected machine which caused

loss to plaintiff as it resulted in loss of profits as well as in lieu of purchase price.

3. Whether A.K. Coating Ltd. be liable for act of negligence.

It is most humbly submitted that AK Coating is liable for act of negligence which resulted in

loss to plaintiff due to the negligent act was caused by its employee in course of employment

for which AK Coating is vicariously liable. It is also asserted that there was duty to take care

on part of employee and he caused breach of that duty which resulted in a non-remote

damage to be caused to plaintiff. Thus, AK Coating should be held liable vicariously for

negligent act of the its employee.

MEMORIAL for PLAINTIFF ARGUMENTS ADVANCED

 XIII

MEMORIAL for PLAINTIFF ARGUMENTS ADVANCED

 1

ARGUMENTS ADVANCED

I. WHETHER DEFENDANT 1 i.e DRAZON DELIVERIES SHOULD BE LIABLE FOR

FRAUD OR NOT?

1.It is humbly submitted before the Hon’ble Court that the defendant company should be held

liable for fraud because it acted in such a way to deceive the plaintiff to enter into contract.

According to Sec.17 of Indian Contract Act,1872

"Fraud" means and includes any of the following acts committed by a party to a contract, or with

his connivance, or by his agents, with intent to deceive another

party thereto his agent, or to induce him to enter into the contract;

(1) the suggestion as a fact, of that which is not true, by one who does not believe it to be true;

(2) the active concealment of a fact by one having knowledge or belief of the fact;

(3) a promise made without any intention of performing it;

(4) any other act fitted to deceive;

(5) any such act or omission as the law specially declares to be fraudulent.

2.In the present case, defendant company passively concealed one of the most important material

facts that they were not the rightful owner of the machine NAM02. They explicitly concealed the

fact that the machine was stolen from one of the rivals of plaintiff company, i.e. Fairtel Ltd.

3. Also, defendant company did not have right to sell the machine as they did not had the title of

the machine which they did without expressing this fact neither in negotiations between the

companies nor at any time prior to the agreement.

4.In the case of Gundappa Chikappa Kurbar v. Balaji Ramji Dange,1 Hon’ble Bombay HC held

that it is fraud to claim beneficial title under a deed in respect of which the vendee is only a

1
AIR 1941 Bom 274
 2

Benamidar.

5.In this case, the defendant company made the willful suppression of the statement which is false

in substance and is fraudulent under the ambit of S.17 of Indian Contract Act,1872. It is supported

by judgement in another case ARSP Subramanian Chettey v. Official Assignee of Madras 2 decided

by Hon’ble Madras High Court. Various English Courts have asserted this fact in various english

cases in Peek v. Gurney3, R v. Kylsant4 and Jewson & Sons Ltd. v. Arcos Ltd. 5 Here, it was the

implied obligation on defendant that every material fact of the goods sold should be conveyed

which has been imposed by trade usage and it is always a usage that title of the good should be

honestly represented.

6.Hon’ble English court in Jones v. Bowden6, held that in such a case omission to mention a defect

of that kind is equivalent to express assertion that it does not exist. Thus, giving way for fraud.

7.In the instant case, it was the legal duty of the defendant company to disclose the fact related to

title which gives a rise to duty to speak about that fact on which silence may amount to fraud as

also accepted by Hon’ble Nagpur court in Haji Ahmed Yar Khan v. Abdul Gani Khan 7. It is

submitted that Fraud arises when there is a suggestion of an untrue fact either negligently or

recklessly intended to induce the other party to enter into the contract and this leads to damages. 8 It

is submitted that the representation was false since the respondent was not absolutely entitled to sell

and transfer the NAM02 machine due to it being a stolen property from Fairtel Ltd. and reliance

was placed on this for two reasons:-

(i)Suppression of truth amounts to suggestion of falsehood:-

8.It is submitted that the respondents cannot take the defence that mere silence does not amount to

2
AIR 1931 Mad 603
3
(1873) LR 6 HL 377 at 403
4
[1932] 1 KB 442; [1931] All ER Rep 179
5
(1933) 39 Com Cas 59, (CA)
6
(1813) 4 Taunt 847
7
AIR 1937 Nag 270 at 272
8
Derry v. Peek, [1889] 14 A.C. 337.
 3

misrepresentation.9  It is a rule of equity, as well as of laws that a suppress ioveri is equivalent to a
10
suggestio  falsi. The respondents were clearly aware of the need of Killiance Mio to acquire

NAM02 since Mr. Rambani, M.D. of Mio was in friendly terms with Mr. Badshah Khan who was

the CEO of Drazon Deliveries as both of them were classmates in high school and thus the

defendant had knowledge of the falsity of their representation. Therefore, when a statement of clear

title was made but the fact that there was an existing encumbrance had rather been suppressed, it

was a suppression of truth with a suggestion of falsehood and hence, amounted to fraud.11

(ii). Intention of the Party is immaterial:-

9.It is further submitted that the intention of the respondents is immaterial.12 The mere fact that they

made a representation claiming to have title over the shares knowing it was untrue is sufficient to

prove fraud. Furthermore, merely because the misled party had the opportunity to investigate it is

not deprived of the right to claim deception and therefore a breach of warranty. 13 There is an

obligation upon the party upon whom confidence has been reposed to disclose information relevant

to the contract.14 Defendants having special knowledge as to why Mio wanted to acquire NAM02

had a duty to disclose everything that may have affected the latter’s judgement.15

10.Moreover it is clearly and explicitly stated that the defendant had the intent to deceive which can

be inferred from the statement of one of the employees of Drazon Deliveries who said to Mr.

Rambani, “We knew that you’d want that fancy piece of metal that we procured; we sure pulled

a fast one in relation to it.” ‘Pulled a fast one in relation to it” is an English idiom which means

“succeeding in deceiving”. Now it can be clearly inferred from this statement that defendant

wanted to deceive the plaintiff and that is the reason that they sold the product at a price well very

9
Kamal Kant Paliwal v. Smt Prakash Devi Paliwal, AIE 1976 Raj 79 [“Kamal”]
10
Infra. 2
11
Isler v. Brown, 196 N.C. 685 (N.C. 1929).
12
United Motors Finance Co v. Addison and Co., (1937) 39 BOMLR 706.
13
Standard Chartered Bank v. Pakistan Shipping Co., [2003] 1 All ER 173.
14
Al-Kandari v. JR brown, 1988 QB 665.
15
Anson’s Law of Contract, 3019(Beatson et al, 29th edn., 2010).
 4

less from the market price. They wanted to dispose off the property as early as possible because as

the goods were stolen they could have been subjected to criminal liability in future and that is the

reason why they agreed to sell that machine much below the market price. As the plaintiff needed it

very urgently he could have went to an extent to buy it atleast at the market price. It is asserted that

the defendant should be held liable for the fraud as the essentials is as needed to prove fraud are all

present in this case.

11.From the above arguments, it can be established beyond doubts that the representation was

fraudulent under this instant case. As decided by Hon’ble Supreme Court in Mithoolal Nayak v.

Life Insurance Corpn Of India16 that once it is held that the representation was fraudulent under

S.17. The exception in S.19 is of no avail and the question whether the person alleging fraud had or

had not the means of discovering the truth with ordinary diligence is probably immaterial.

If the Party want to continue with the contract with still being voidable after being proved for fraud,

then Second Question of Issue is:-

II. WHETHER THE DEFENDANT 1 i.e. DRAZON DELIVERIES LIABLE TO PAY THE

PURCHASE PRICE AND DAMAGES IN BREACH OF CONTRACT OR NOT?

12.Although there are differences of approach in cases, the law is fretful to uphold the contract

wherever possible lest it defeats the purpose for which the contract was entered into.17

Therefore, it is s u b m i t t e d that, firstly, there is breach of contract on part of defendant [A];

and, secondly, plaintiff has right to seek the purchase price [B] and thirdly, plaintiff is entitled to

sue for damages[C].

2.1 There is breach of contract on part of Drazon Deliveries

13.The word "breach," as applied to contracts, is defined as a failure without legal excuse to

perform any promise that forms a whole or a part of a contract, including the refusal of a party to

16
AIR 1962 SC 814
17
Raju Kakara Shetty v. Ramesh Prataprao Shiraole, (1991) 1 S.C.C. 570
 5

recognize the existence of the contract or a party's act that is inconsistent with its existence. 18As

per the case of Rhino Linings USA, Inc. v Rocky Mountain Rhino Lining, Inc.19, “If a party to a

contract fails to perform a promise mutually bargained for and agreed upon by the parties, then

the remedy is an action for breach”.

14.A breach of contract occurs when a party to a contract fails to perform his part of the

contract.20 Where the party performing a contract does not do so to the standard required under

the contract or within the timeframe set, that party is liable for the breach of the contract.21 The

contemporary approach is to consider the nature of the terms of contract so as to decide

whether such terms are conditions or warranties.22 The breach of warranty gives rise to claim for

damages. Warranty as defined23 “. A warranty is a stipulation collateral to the main purpose of the

contract, the breach of which gives rise to a claim for damages but not to a right to reject the

goods and treat the contract as repudiated”. Warranty is an assurance given by the seller to the

buyer about the state of product that the prescribed facts are genuine.

15.In Maula Bux v. Union of India24,the Court has specifically held that it is true that in every case

of breach of contract the person aggrieved by the breach is not required to prove actual loss or

damage suffered by him before he can claim a decree and the Court is competent to award

reasonable compensation in a case of breach even if no actual damages is proved to have been

suffered in consequence of the breach of contract. The Court has also specifically held that in case

of breach of some contracts it may be impossible for the Court to assess compensation arising

from breach.

16.It is humbly submitted that under the S.59(1), where there is a breach of warranty by the seller,
18
As per American Jurisprudence. 17A Am. Jur. 2d Contracts § 699
19
62 P. 3d 142 (Colo. 2003) 
20
Man Kaur (Dead) by LRS v. Hartar Singh Sangha, (2010) 10 S.C.C. 512
21
Maula Bux v. Union of India, AIR. 1970 SC 1955
22
Gomathinath Pillai v. Palaniswami Nadar, A.I.R. 1967 S.C. 868
23
S.12(3) of indian Sales Of Goods act 930
24
Infra 21
 6

or where the buyer elects or is compelled to treat any breach of a condition on the part of the

seller as a breach of warranty the buyer is not by reason only of such breach of warranty entitled

to reject the goods; but he may-

(a)Set up against the seller the breach of warranty in diminution or extinction of price; or

(b)Sue the seller for damages for breach of warranty

(2) The fact that a buyer has set up a breach of warranty in diminution or extinction of price does

not prevent him from suing for the same breach of warranty if he has suffered further damage.

17.In Case of Gopal Krishna Pillai v. K.M. Mani25 The Hon’ble Supreme Court held that case is

not founded on breach of warranty but on resale to the original seller for the same price and a

breach of warranty does not entitle the buyer to reject the goods and his only remedy would be

those provided in S.59 namely, to set up against the seller the breach of warranty in diminution or

extinction of the price or to sue the seller for damages for breach of warranty.

18.In another case of Barium Chemicals Ltd. V. A.P. Mining Corporation Ltd.26 Hon’ble Andhra

Pradesh high Court held that defence of diminution or extinction of price, by reason of breach of

warranty is a statutory defence expressly provided by S.59 and is not in nature of counter-claim or

set-off.

19.In the instant case here, plaintiff wants to humbly submit that plaintiff has right to sue for

damages under a breach of contract in accordance with S.73 along with the S.13 of the Indian

Sale Of Goods Act under which plaintiff has right to waive the breach of condition and sue for

breach of warranty under S.59. S.73 provides for compensation for any loss or damage

caused, to the party who suffers by such breach is entitled to receive, form the party who

has broken the contract27. In a breach of a sales contract, the buyer is entitled to recover

25
AIR 1984 SC 216 at 220
26
(1980) 1 Andh WR 350
27
MSK Projects (I) (JV) Ltd. v. State of Rajasthan, AIR 2011 SC 2979
 7

all the expenses of procuring same or similar goods.28The injured party has to be placed in as

good a situation as if the contract has been performed.29 . Where two parties have contracted,

out of which, one of them has breached the contract, the damages which the other party

ought to receive in respect of such breach of contract should be such as may be fairly and

reasonably be considered either arising in the usual course of things from such breach itself, or

such as may reasonably be supposed to have been in contemplation of both parties at the time

they made the contract, as the probable result of it.30

20.The section thus clearly lays down two rules. Compensation is recoverable for any loss

or damage:-

(i)arising naturally in the usual course of things from the breach, or 

(ii)which the parties knew at the time of the contract as likely to result from breach.

21.In a case, the builder was required to complete the work within 18 months but by reason of

delays caused by the Department, it took 27 months to be complete. The builder suffered itemized

damages which he proved by leading oral evidence. The amount claimed being reasonable was

decreed.31

2.2 Plaintiff has right to seek the purchase price

22.It is humbly submitted before this Court that Plaintiff has right to seek purchase price due to the

breach of contract caused by the defendants by selling a damaged machine which caused loss of

money paid for consideration of value of machine NAM02.

23.Section 73 imposes a duty on the party seeking damages to mitigate its loss. In Murlidhar

Chiranjilal v. Harish Chandra Dwarkadas32, the Supreme Court of India has set out two principles

on which damages are calculated in case of breach of contract of sale of goods. The first is that the

28
Priya Vasant Kalgutkar v. Murad Shaikh, AIR 2010 SC 40
29
Enercon (India) Ltd. v. Enercon GMBH, (2014) 5 SCC
30
Rajkot Municipal Corpn. v. Manjulben Jyantilal Nakum, (1997) 9 SCC
31
Chief Secy, State of Gujrat v Kothari Associates, (2003) 1 Guj CD 372 (Guj).
32
(1962) 1 SCR 653
 8

injured party has to be placed in as good a situation as if the contract has been performed. He who

has proved a breach of a bargain to supply what he has contracted to get, is to be placed so far as

money can do it in as good a situation as if the contract has been performed. This is qualified by a

second principle - the injured party is debarred from claiming any part of damages arising out of his

neglect. The onus is on him to mitigate losses consequent to the breach of contract.The Supreme

Court of India has decided that the principle of mitigation does not give any right to a party in

breach of contract but it is a circumstance to be borne in mind in assessing damages. 33It must be

added that in the latter case, the Supreme Court has not taken into consideration its previous

judgement and the explanation to section 73.

24.When it is either not possible or not desirable to award damages measured in prescribed way, a

court may award money damages designed to restore the injured party to the economic position

they occupied at the time the contract was entered (known as the ("reliance measure"), or designed

to prevent the breaching party from being unjustly enriched("restitution").

2.3 Plaintiff is entitled to sue for damages

25.Every Breach of contract upsets many a settled expectation of the injured party. He may feel the

consequences for a long time and in variety of ways. In a case, 34 a person contracts to supply to a

shopkeeper pure mustard oil, but he sends impure stuff, which is a breach. The oil is seized by an

inspector and destroyed. The shopkeeper is arrested, prosecuted and convicted. He suffers the loss

of oil, the loss of profits to be gained on selling it, the loss of social prestige and of business

reputation, not to speak of the time and money and energy wasted on defence and mental agony

and torture of prosecution.

26.In Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd.3 5 It was held that the party who is

injured by the breach of contract may bring an action for damages. Damages means monetary

33
M. Lachia Setty & Sons Ltd v Coffee Board Bangalore AIR 1981 SC 162 at 168
34
Ram Kumar v. Lakshmi Narayan AIR 1947 Cal 157
35
AIR 2003 SC 2629
 9

compensation for the loss caused to the injured party.

27.Section 73 of the ICA provides as follows: 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.”

28. Besides, an explanation to this section adds that: In estimating the loss or damage arising from a

breach of contract, the means which existed of remedying the inconvenience caused by the non-

performance of the contract must be taken into account.

29.The principle of award of compensation is that the injured party should as far as possible be

placed in the same position in terms of money as if the contract had been performed by the party in

default. Where the contract is one of sale, this principle calls for assessment of damages as at the

date of breach. Under a contract for the sale of goods, the measure of damages upon breach by the

buyer is the difference between the contract price and the market price at the date of breach.

30.On a breach of contract to supply goods by the seller, the buyer is entitled to recover all the

expenses of procuring same or similar goods as held by the Hon’ble Calcutta High Court in the

case of Tata Iron & Steel Co Ltd v Ramanlal Kandoi.36 In case of non-delivery of goods, the

damages are fixed on the basis of the price prevailing on the date on which delivery is to be made,

as was held by the Supreme Court in the case of Union of India v. Jolly Steel Industries (Pvt) Ltd. 37

36
(1971) 2 Cal. Rep. 493, 528
37
AIR 1980 SC 1346
 10

III. WHETHER THE DEFENDANT 2 i.e A.K. COATING LTD. SHOULD BE HELD

LIABLE FOR NEGLIGENCE OR NOT?

31.It is humbly submitted by the plaintiff that defendant is liable for negligence as the negligent

act of Mr. Barnab Boswami was done in course of employment thus shifting the liability on his

employers A.K. Coating Ltd. It is also asserted that the employee Barnab Boswami is liable for

negligence because he failed in his duty to take care and this failure on his part was the proximate

cause for the damage occurred.

3.1 The Employee Of The A.K.Coating Ltd. i.e. Barnab Boswami is Liable For Negligence

32.It is humbly submitted by the plaintiff that Mr.Barnab Boswami who is employee of

A.K.Coating Ltd. is liable for negligence because he has failed in his duty to take care and all the

esssentials required to constitute negligence are fulfilled. There was

(3.1.a) Firstly, Duty to take care, (3.1.b) Secondly, breach of that duty to take care and (3.1.c)

Thirdly, a non-remote damage caused by that breach of duty.

(3.1.A) There was legal duty to take care on part of employee of A.K. Coating Ltd.

33.It is humbly submitted on behalf of the paintiff that there was a legal duty to take care on part

of Barnab Boswami who was employee of A.K Coating Ltd. as the repair work was going on in

the basement of the premises of the Drazon deliveries Ltd. It was the duty of every person

engaged in such repair work to be careful that there should not be any other damage to any other

property other than what is authorized by the Drazon Deliveries Ltd. Here in this case the

employee i.e. Barnab Boswami knew that the machine was of very much importance to Killiance

Mio Ltd. He was working in that premises for a long time and he knew about the negotiations

between Killiance Mio Ltd. and Drazon Deliveries Ltd. regarding the sale of machine NAM02.

He also knew that this machine was very costly in market as because it is very less in number.

This knowledge on part of the employee itself gives rise to the duty to take care that he should
 11

have taken care while working in the basement. This duty to take care was towards the plaintiff as

the machine was bought by plaintiff and this was also in knowledge of the employee thus clearly

showing that there existed a duty to take care towards the plaintiff.

34.Court in the Irish case of Bell v. Great Northern Railway Co. of Ireland38, in which illness due

to reasonable apprehension of personal injury due to the defendants' negligence was held to give a

cause of action.

35.Caparo39 is the landmark case which has created the tripartite test in establishing duty of

care.40 This test departs from Donoghue v Stevenson41 and the Wilberforce test laid down in Anns

v Merton London Borough Council42 which starts from the assumption that there is a duty of care

and that harm was foreseeable unless there is good reason to judge otherwise 43. Whereas Caparo

starts from the assumption no duty is owed unless the criteria of the three-stage test are satisfied.

These criteria are: Foreseeability, Proximity and whether it is fair, just and reasonable to impose

such a duty44. Yet this approach has been critiqued45 by over complicating "neighbour" principle

in Donoghue. Moreover, there is an abundance of case law which moves away from the Caparo

test altogether46. The duty of care does not vary with the nature of damage, as to whether it is

physical or financial. The relationship of the parties is to be taken into account in assessing the

extent of damage.47

(3.1.B) There was breach of that legal duty by the employee i.e. Barnab Boswami

36.It is to be asserted that there was breach of that legal duty to take care on the part of the

38
[1890], 26 L.R.Ir. 428
39
Caparo Industries plc v. Dickman [1990] UKHL 2
40
Mark Godfrey, `The categories of negligence revisited: Harrison v West of Scotland Kart Club &Noble v De
Boer`. 2005 2 SLT 9
41
1932 UKHL 100
42
1978 AC 728
43
Kirsty Horsey & Erica Rackley , Tort Law (4th edn, OUP Oxford 2015) at 60
44
Ibid; at 66.
45
Mark Godfrey , `The categories of negligence revisited : Harrison v West of Scotland Kart Club &
Noble v De Boer; at 09
46
Ibid; at 39
47
Marc Rich & Co Ag and Others -v- Bishop Rock Marine Co Ltd and Others HL, [1995] 3 All ER 307,
 12

employee which was to be fulfilled till he was working in the basement where the machine was

kept. There was failure on his part to fulfil that duty. There was water leak in the basement which

damaged the machine. He failed to stop the water leakage and also failed in his obligation to save

the machine from the damage which could have been caused by the water leakage. He has a duty

to take care that as the repair work was going on he has to keep in mind and prevent any damage

to the machine as it was very costly and of utmost importance to the Killiance Mio Co. Ltd. Also

here no other than A.K.Coating had access over the water system on Drazon Deliveries premises.

37.In a case, The council were liable to the plaintiff for the damage caused by the breach of duty

by their building inspector in failing to carry out a proper inspection of the foundations; the

plaintiff was not precluded from recovering damages on the ground that her loss was solely

economic because the damage to the house was physical damage and the plaintiff was entitled to

recover the cost of repairs and an action in negligence lay for economic or physical loss.48

38.In another case49 defendants were under a duty of care towards plaintiff, who was within the

range of foreseeable danger of physical impact or shock, and that they were in breach of that duty

in supplying a defective sling; and that accordingly plaintiff was entitled to damages against

defendants.

(3.1.C) Non-Remote Damage Was Caused to Plaintiff by that breach of duty

39.It is most humbly submitted that the damage caused to the machine was non-remote in nature

and the water leak which was caused by the employee was the proximate cause of the damage

caused to the machine which ultimately led it to become unusable and irreparably damaged. It

could be easily be in contemplation of the employee that if there is any water leak (in normal

water is used for every repair work) then it would surely damage the machine.

40. The non-foreseeability that the machine could be irreparably damaged will not negate the fact

48
Dutton v Bognor Regis UDC [1972] 1 QB 373, CA
49
Dooley v Cammell Laird [1951] 1 Lloyd's Rep 271, Liverpool Assizes
 13

that it was to be always in foreseeability of a reasonable prudent man that if the repair work is

going on in the basement where the machine is kept and breach of duty to take care on anyone’s

part would surely damage the machine and that’s what happened in this case. Thus it is asserted

that the non-remote damage was caused to the plaintiff by breach of the leagal duty to take care.

41.In Spartan Steel & Alloys Ltd v Martin & Co 50 Martin & Co negligently cut the power to

Spartan Steel’s factory Spartan steel claimed for loss of profit and cost for a melt currently in

their furnace and the successful claims were due to the melt being a direct consequence of the

power cut. Therefore, it is submitted that the employee of the A.K. Coating Ltd. i.e. Barnab

Boswami should be held liable for the negligence for his negligent act which resulted in his

failure to fulfil duty to take care which originated against the plaintiff.

3.2 A.K. COATING LTD. IS VICARIOUSLY LIABLE FOR THE ACT OF ITS

EMPLOYEE

42.It is humbly submitted by the plaintiff that the A.K. Coating Ltd. is vicariously liable for the

act of it’s employee because the negligent act done by employee was in course of his employment

and it falls within the purview of vicarious relationship between the master and servant as

described under torts law.

“The relation of master and servant exists only between persons of whom the one has the order

and control of the work done by the other. A master is one who not only prescribes to the

workman the end of his work, but directs or at any moment may direct the means also, or, as it

has been put, ‘retains the power of controlling the work’.” 51

43.In Short V.J. & W. Henderson Ltd.,52 LORD THANKERTON pointed out four indications of a

contract of service:

(i)Master’s power of selection of his servant; (ii)Payment of wages or other remuneration;

50
[1973] QB 27
51
Performing Right Society Ltd. v Mitchell, etc. Ltd., (1924) 1 K.B. 762.
52
(1946) 62 TLR 427(HL), p.420.
 14

(iii)Master’s right to control the method of doing the work, and (iv)Master’s right of suspension

or dismissal

44.In the words of LORD CHELMSFORD, L.C.: “It has long been established by law that a

master is liable to third persons for any injury or damage done through the negligence or

unskilfullness of a servant acting in his master’s employ. The reason of this is, that every act

which is done by servant in the course of his duty is regarded as done by his master’s order, and,

consequently it is the same as if it were master’s own act”, according to the maxim, ‘qui facit per

alium facit per se.’53

45.In Stavely Iron & Chemical Co. v. Jones54 The House of Lords dismissed the appeal of the

master and upheld the finding of negligence of the crane driver.

46.The scope of the liability of a master for the negligence of his servant has been succinctly

stated by Baron Parke, J. in Joel v. Morison55 thus:

'The master is liable where the servant is acting in the course of his employment."

47.In Montreal v Montreal Locomotive Works Ltd.,56 Lord Wright said that in the more complex

condition of modern industry, more complicated test have often to be applied. According to him, it

would be more appropriate to apply a complex test involving- Control; Ownership of the tools;

Chance of profit; Risk of loss; and Control in itself is not always conclusive.In a later case, Market

Investigation Ltd. v Minister of Social Security 57, COKE J. referred to these factors and said that the

fundamental test was; “Is the person who has engaged himself to perform these services

performing them as a person in business on his own account?” If the answer is yes, it is a contract

for services; if no, it is a contract of service. There is no exhaustive list of considerations relevant to

determining this question, and no strict rules about the relative weight the various considerations

53
Bartonshill Coal Co. McGuire, (1858) 3 Macq. 300 (306).
54
(1956) 1 All ER 403: (1956) 2 WLR 479 (HL).
55
[1834] EWHC KB J39
56
[1944] UKPC 44
57
[1969] 2QB 173
 15

should carry in a particular case.

48.The Supreme Court of India in Silver Jubilee Tailoring House v. Chief Inspector of Shops,58

after a review of the most of the authorities mentioned above observed: “In recent years the control

test as traditionally formulated has not been treated as an exclusive test. It is exceedingly doubtful

today whether the search for a formula in the nature of a single test to tell a contract of service from

a contract for service will serve any useful purpose. The most that profitably can be done is to

examine all the factors that have been referred to in the cases on the topic. Clearly, not all of these

factors would be relevant in all these cases or have the same weigh in all cases.” Again, in Storey v.

Ashton59 , Cockburn, L.C.J., says:

"The true rule is that the master is only responsible so long as the servant can be said to be doing

the act, in the doing of which he is guilty of negligence, in the course of his employment as

servant."

49. To apply the respondeat superior, the employee's negligence must occur within the scope

of her employment. Additionally, it is important to know whether B is an employee of A and

also to determine whether B was within the scope of employment when the negligence act was

committed.

50.DIXON J. in Humberstone v Northern Timber Mills 60 made an observation that “The question is

not whether in practice the work was in fact done subject to a direction or control exercised by an

actual supervision or whether an actual supervision was possible but whether ultimate authority

over the man in the performance of his work resided in the employer so that he was subject to the

latter’s order and directions.” Thus, Defendant 2 should be held vicariously liable.

58
AIR 1974 SC 37
59
(1869) L.R. 4 QB 476
60
(1949) 79 CLR 389
 ~ XV ~

PRAYER

Wherefore, in the light of the facts stated, arguments advanced and authorities cited, it is
most humbly prayed and implored before the Hon’ble High Court of Mumbai, that it may be
graciously pleased to adjudge and declare that:

1.The Defendant 1 i.e Drazon Deliveries Ltd. should be held liable for Fraud.

2. The Plaintiff i.e. Killiance Mio Ltd. should be entitled to Purchase Price and Damages for Breach

of Contract on part of Defendant 1 i.e Drazon Deliveries Ltd.

3. The Defendant 2 i.e. A.K. Coating Ltd. should be held liable for Negligence.

Also, pass any other order that it may deem fit in the favour of the PLAINTIFF to meet
the ends of equity, justice and good conscience.

For this act of Kindness, the PLAINTIFF shall duty bound forever pray.

Place: Delhi s/d

th
Dated: 4 February, 2020 Counsel for PLAINTIFF

MEMORIAL for PLAINTIFF PRAYER