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  • Ss. 73, 74 and 75 of the Indian Contract Act.8.
  • Ss. 73, 74 and 75 of the Indian Contract Act
  • section. S. 74 of the Indian Contract Act
  • Ss. 73 and 74 of the Indian Contract Act
  • S. 74 of the Indian Contract Act
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  • Ss. 73, 74 and 75 of the Indian Contract Act.8.
  • Ss. 73, 74 and 75 of the Indian Contract Act
  • section. S. 74 of the Indian Contract Act
  • Ss. 73 and 74 of the Indian Contract Act
  • S. 74 of the Indian Contract Act
Smart Summary

Judgment Summary (Ismail, J.)

Factual and Procedural Background

This civil appeal arises from a suit instituted to enforce a bond executed in respect of the importation of a foreign-built car. The principal factual narrative in the opinion is as follows, reproduced from the record:

  • On 10 October 1956 Mr. Fred Reist applied for a permit to bring his Mercedes Benz car into India from Manila. The initial application was rejected on 28 November 1956 because a licence could not be issued for import of a built-up car.
  • On appeal a Customs clearance permit dated 16 January 1967 (marked Ex. A.1) was issued as a special case. The permit contained a condition that the car must be re-exported when the licensee (Mr. Reist) left India; the covering letter stated that this condition would not be relaxed.
  • Subsequently the first appellant (as agent for Mr. Reist) and the second appellant (as surety) executed a bond dated 16 April 1957 (Ex. A.2). The bond undertook that they would not sell or dispose of the car in India and would, within a fixed time after Mr. Reist's departure, produce evidence that the car had been re-exported; alternatively, they undertook to pay Rs. 13,923-10 on demand, in which case the bond would become void.
  • The bond was accepted by the Joint Chief Controller of Imports and Exports, Madras. It was later discovered that Mr. Reist left India on 2 May 1959 but the car was not re-exported, and it was being used by the first appellant.
  • The Joint Chief Controller issued notices calling for evidence of re-export and ultimately demanded re-export; the appellants sought permission from the Government of India to sell the car in India because they alleged it had been seriously damaged in an accident and re-export would be commercially unviable. No permission was granted.
  • After notice through the Government Pleader, the present suit was instituted by the Joint Chief Controller of Imports and Exports to enforce the bond (Ex. A.2) and recover Rs. 13,923-10 with interest at 6% per annum.
  • The trial court (Seventh Assistant Judge, City Civil Court, Madras) framed six issues, tried the suit on documentary evidence, found the bond enforceable despite its penal character, held that the Joint Chief Controller could institute the suit on behalf of the Union of India, rejected the impossibility/accident defence, and by judgment and decree dated 26 November 1966 decreed the suit as prayed. The defendants (appellants) appealed.

Legal Issues Presented

  1. Whether the condition in the bond requiring payment of Rs. 13,923-10 (in lieu of evidence of re-export) can be enforced against the defendants.
  2. Whether the said condition is in the nature of a penalty which cannot be enforced.
  3. Whether the suit was properly instituted by the Joint Chief Controller of Imports and Exports (i.e., whether he could represent the Union of India for this purpose).
  4. Whether the car met with a severe accident and, if so, whether the contract became impossible of performance.
  5. Whether the plaintiff (Joint Chief Controller) was entitled to recover the amount claimed.
  6. To what relief, if any, the plaintiff is entitled.

Arguments of the Parties

Appellants' Arguments

  • The licence was granted to Fred Reist and the appellants (being the agents/surety) cannot be penalised for Reist's failure to re-export the car.
  • The Joint Chief Controller of Imports and Exports could not represent the Union of India for the purpose of instituting the suit.
  • The stipulation for payment under Ex. A.2 is in the nature of a penalty and the court should relieve the appellants from such a penalty.
  • The car had met with a severe accident and, as a result, performance of the contract (re-export) had become impossible.
  • On appeal counsel (Mr. Habibulla Badsha) relied on Section 74 of the Indian Contract Act and argued that no damages can be awarded without proof that the respondent actually suffered damage; he also relied on clause 5(1)(iii) of the Imports (Control) Order (1953/1955) to argue that the licensing provision contemplated execution of a bond to comply with conditions but did not contemplate a stipulation for payment of a penalty.

Plaintiff / Respondent's Position (as reflected in the opinion)

  • The plaintiff (Joint Chief Controller of Imports and Exports, Madras) sought enforcement of the bond Ex. A.2 and recovery of the sum of Rs. 13,923-10 with interest, on the basis that the appellants failed to re-export the car and did not obtain permission to sell it in India.
  • The trial court found the bond valid, enforceable and that the plaintiff was competent to sue; the respondent relied on the terms of the permit and bond and subsequent notices and correspondence to support enforcement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Special Officer, Amaravathi Co-operative Sugar Mills v. Thirumilaiswomi (W.P. No. 124 of 1969, d. 16th April 1970) Interpretation of Ss. 73, 74 and 75 of the Indian Contract Act — in particular, that S.74 allows recovery of reasonable compensation without proof of actual damage where a sum is named or a penalty stipulated; and that the exception to S.74 applies to bonds given under orders of Central/State Government for performance of public duties. The court relied on the reasoning in that judgment to hold that (i) S.74 permits recovery of reasonable compensation without proof of actual loss when a contract names a sum or stipulates a penalty, and (ii) the Exception to S.74 applies to the bond in the present case because it was executed under orders of the Central Government and concerned an act in which the public were interested; hence the appellants are liable to pay the whole sum mentioned in Ex. A.2.

Court's Reasoning and Analysis

The court proceeded by examining the contested legal contentions against the factual matrix and applicable statutory and contractual provisions. The reasoning in the opinion can be summarized in the following steps, faithfully reflecting the text:

  1. Preliminary observation: The facts were not in controversy and the appeal lay within a narrow compass, so the court limited its reference to essential documents (the permit Ex. A.1, the bond Ex. A.2, and correspondence).
  2. On the challenge to the legality of the bond clause in view of clause 5(1)(iii) of the Imports (Control) Order (1953/1955): The court rejected the contention that the stipulation for payment was illegal. It reasoned that (a) at no stage did the appellants contend that they were not bound to enter into the bond containing such a stipulation or that it was illegal, and (b) the appellants had not pleaded compulsion or coercion in entering the bond. Because the parties freely entered into the bond with full knowledge of its terms, the court held there was no legal principle rendering the stipulation illegal or unenforceable.
  3. On the scope and application of Section 74 of the Indian Contract Act: The court adopted the prior analysis (in Special Officer, Amaravathi Co-operative Sugar Mills v. Thirumilaiswomi) of Ss. 73, 74 and 75. That analysis recognizes:
    • S.73 and S.75 require proof of actual loss or damage to recover compensation for breach.
    • S.74 operates differently: where a contract names a sum to be paid on breach, or contains a stipulation by way of penalty, the claimant is entitled to reasonable compensation whether or not actual damage is proved, though such compensation cannot exceed the amount named.
  4. On the assessment of reasonable compensation and the effect of the Exception to S.74: The court observed that normally the court must assess reasonable compensation (not exceeding the contractually named sum) even if no proof of damage is produced. However, S.74 contains an explicit Exception: where bonds are given under the provisions of any law or under orders of the Central or State Government for performance of public duties or acts in which the public are interested, the person giving such bond is liable upon breach to pay the whole sum mentioned therein.
  5. Application of the Exception in the present case: The court concluded that Ex. A.2 plainly falls within the Exception:
    • The bond explicitly states it was executed under orders of the Central Government and in respect of an act in which the public are interested.
    • Even absent the express stipulation, the court held independently that the condition (re-export of imported foreign cars) concerned public interest, because import of foreign cars was prohibited in order to protect indigenous production; thus enforcement of re-export conditions serves public interest.
    Consequently, the Exception applies and the appellants are liable to pay the whole sum mentioned in the bond without the court having to privately assess a lesser “reasonable compensation.”
  6. Other defences: The trial court had rejected the appellants' contentions that the Joint Chief Controller could not sue and that the accident made performance impossible; the appellants did not press these points on appeal in view of the trial court's findings, and the present court did not disturb those findings.
  7. Conclusion of reasoning: Given that the bond falls within the Exception to S.74, the court held the trial judge's conclusion correct and found the suit was rightly decreed.

Holding and Implications

Core Holding: The appeal is dismissed and the decree of the trial court enforcing the bond Ex. A.2 is affirmed. The appellants are bound to pay the sum mentioned in the bond.

Implications:

  • Direct effect on the parties: The defendants (appellants) remain liable to pay the full sum of Rs. 13,923-10 as stipulated in the bond Ex. A.2 for their failure to re-export the car; the trial court's decree in favour of the plaintiff was affirmed.
  • Procedure/costs: The appeal fails and is dismissed; the court expressly made no order as to costs.
  • On precedent and broader legal consequence: The opinion applied established statutory interpretation of Ss. 73–75 of the Indian Contract Act and the Exception in S.74 as previously articulated in the cited judgment. The opinion does not assert that it creates any new legal rule beyond applying that interpretation to the facts of this case.

V.C.S

Note: This summary is confined strictly to the content and reasoning contained in the provided judgment text. No facts, arguments, or authorities have been added beyond those explicitly set out in the opinion.

    B.N. Mathur v. Union Of India

    JUDGMENT

    (Ismail, J.)

    1. The defendants in O.S No. 3476 of 1964 on the file of the City Civil Court, Madras, are the appellants herein.

    2. The facts are not in controversy, and the appeal itself lies within a narrow compass, and therefore, we do not propose to refer to the pleadings of the parties in extenso in this appeal. One Mr. Fred Reist, Field representative of Pratt and Whitney Engineers Division of United Craft Export Corporation, of U.S.A, applied on 10th October 1956 for a permit to bring into India with him his personal Mercedece Benz car from Manilla. The application was rejected on 28th November 1956, on the ground that a licence could not be issued for import of a built-up-car. But on appeal by the first appellant herein for and on behalf of the said Fred Reist, a Customs clearance permit dated 16th January 1967, marked as Ex. A. 1 in these proceedings was issued to him as a special case to bring his car into India. This permit imposed a condition that the car imported against the said permit should be re-exported, when the licencee leaves this country. The covering letter dated 16th January 1957 (Ex. A. 1) made it clear that the said condition about re-export would not be relaxed on any account. Subsequently the first appellant, as the agent of the said Fred Reist, and the second appellant as a surety, executed Ex. A. 2 bond. Under this bond, they undertook that they would not sell or dispose of the car when the same is in India and that they would procure and deliver to the Joint Chief Controller of Imports and Exports, Madras, within one month or such extended period as may be allowed by the said Joint Chief Controller of Imports, Madras, from the date of departure from India of the said Fred Reist, evidence to prove that the car had been re-exported out of India. They further undertook that in lieu of the delivery of evidence as referred to above, the first appellant and his heirs or representatives, shall, upon demand by the Joint Chief Controller of Imports and Exports, Madras, pay or cause to be paid to him a sum of Rs. 13923-10, in which case the bond shall become void and of no effect, otherwise the bond shall be and remain in force. The second appellant, as we have pointed out already, joined the execution of the bond as a surety. The bond is dated 16th April 1957 and the said bond was accepted by the Joint Chief Controller of Imports and Exports, Madras. In October 1961, the Joint Chief Controller of Imports and Exports, Madras, learnt that Mr. Reist left India for the United States of Americaon 2 May 1959, but the car was not re-exported, and was being used by the first appellant herein as the representative of Messrs L.A Lewis, Inc. On this, a notice was issued by the Joint Chief Controller of Imports and Exports, Madras, to the first appellant herein to produce evidence to show that the car was re-exported. No such evidence being produced, the Joint Chief Controller of Imports and Exports, Madras, called upon the first appellant to re-export the car within a fixed time. Correspondence ensued between the appellants and the Joint Chief Controller of Imports and Exports, Madras, in which the appellants took the stand that the car was involved in a serious accident, and, therefore, commercially, it was not worth while re-exporting the car, because the cost of re-export would exceed the value of the car in that condition and consequently, they were seeking the permission of the Government of India, to sell the car in India, either privately or through the State Trading Corporation. Ultimately no such permission was granted by the Government of India, and thereafter, after issuing a notice to the appellants through the Government Pleader, Madras, the present suit was instituted to enforce the bond Ex. A.2 and recover the sum of Rs. 13923-10 with interest at six percent per annum.

    3. In the written statement filed by the first defendant, which was adopted by the second defendant the facts were not disputed. The contention that was put forward by way of defence to the suit was that the licence was granted to Fred Reist, and with reference to that licence, the appellants cannot be penalised for the failure on the part of Fred Reist to re-export the car. Another contention that was put forward by the appellants was that the Joint Chief Controller of Imports and Exports could not represent the Union of India for the purpose of filing the suit. Lastly, they contented that the provision for payment of the amount in Ex. A.2 was in the nature of penalty, and the court should relieve the appellant of the said penalty. Yet another plea raised by the appellants was that since the car met with a severe accident, it could not be exported and, therefore, the contract became impossible of performance.

    4. On the basis of these pleadings, the trial court framed the following issues—

    1. Cannot the conditions in the suit contract for payment of Rs. 13928-10 be enforced sgainst the defendants?

    2. Is the said condition in the nature of a penalty which cannot be enforced?

    3. Is the suit not properly instituted for the reasons stated in para 5 of the written statement?

    4. Did the car meet with a severe accident and if so has the contract become impossible of performance?

    5. Is the plaintiff not entitled to recover the amount?

    6. To what relief, if any, is the plaintiff entitled?

    The learned Seventh Assistant Judge, City Civil Court. Madras, who tried the suit, came to the conclusion that though the stipulation for the payment of the amount in question was in the nature of penalty, still the contract can be enforced against the appellant herein. He also came to the further conclusion that the Joint Chief Controller of Imports and Exports, Madras, in whose favour alone the bond was executed, was competent to represent the Union of India and institute the suit. With regard to the contention put forward that because the car met with a serious accident, it could not be re-exported, the learned Judge rejected the same. On the basis of these findings, by judgment and decree dated 26th November 1966, the learned Judge decreed the suit as prayed for. Hence, the present appeal by the defendants in the suit.

    5. Mr. Habibulla Badsha, the learned counsel for the appellants, having regard to the findings of the court below on the points such as whether the suit is maintainable by the Joint Chief Controller of Imports and Exports and whether the contract became impossible of performance by virtue of the car meeting with a severe accident, did not pursue these points. However, the learned counsel strongly relied on S. 74 of the Indian Contract Act, and contended with reference to that section, that no damage can be awarded by the court in favour of the respondent herein for the alleged breach of contract without the respondent proving that he has actually suffered damage. In this context, Mr. Badsha relied on clause S(1)(iii) of the Imports (Control) Order, 1953 which provides—

    “5(1). The licencing authority issuing licence under this order may issue the same subject to one or more of the conditions, stated below………(iii) that the applicant for a licence shall execute a bond for complying with the terms subject to which a licence may be granted.”

    The argument of Mr. Badsha is that this provision contemplates the execution of a bond for complying with the condition with regard to the re-export and it does not contemplate the stipulation for the payment of of penalty in the event of the failure to comply with the terms of the contract. We shall now consider this argument of the learned counsel for the appellants.

    6. With regard to the contention that in view of Cl. 5(1) (iii) of the Imports (Control) Order, 1955, the stipulation in Ex. A2, for payment of the said sum of money by way of penalty for failure to comply with the terms of the contract, is illegal, we are clearly of the opinion that no such plea is available to the appellants. In the notices passed between the parties, at no stage the appellants took the stand that they were not bound to enter into the bond containing such a stipulation and such a stipulation was illegal. Apart from this, the appellants have not pleaded in the written statement that though such a stipulation was outside the scope of Cl. 5(1) (iii) of the Imports (Control) Order, 1955, they were still compelled or forced to enter into the bonds under any special circumstances. Having regard to these features, we are unable to entertain this plea, because the parties in this case freely entered into the bond with the full knowledge of the terms of the bond, and there is no principle or provision of law, which renders such a stipulation in a contract freely entered into between the parties, illegal. Consequently, we hold that the stipulation in the bond cannot be said to be illegal or unenforceable from any point of view.

    7. The next submission based on S. 74 of the Indian Contract Act requires consideration as to the scope of that section. S. 74 of the Indian Contract Act is follows:

    “When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or as the case may be, the penalty stipulated for.

    Explanation: A stipulation for increased interest from the date of default may be stipulation by way of penalty;

    Exception: When any person enters into any bail bond, recognisance or other instrument of the same nature, or under the provisions of any law, or under the orders of the Central Government or of any State Government gives any bond for the performance of any public duty or act in which the public are interested, he shall be liable, upon breach of the condition of any such instrument, to pay the whole sum mentioned therein.

    Explanation: A person who enters into a contract with Government does not necessarily thereby undertake any public duty, or promise to do an act in which the public are interested”.

    One of us had to consider the scope and effect of Ss. 73, 74 and 75 of the Indian Contract Act in the judgment in W.P No. 124 of 1969, d. 16th April 1970. Special Officer, Amaravathi Co-operarive Sugar Mills v. Thirumilaiswomi(1). In that judgment, after quoting Ss. 73, 74, and 75 of the Indian Contract Act, it was held:

    “Thus, it will be seen that S. 73 talks of compensation for any loss or damage caused to a party to the contract by the breach of the contract committed by the other party. Therefore, so far as S. 73 is concerned a party to a contract can claim compensation from the other party, who has broken the contract only if he proves that he has sustained loss or damage and that too only to the extent of such loss or damage suffered by him. This conclusion flows from the language used in the section itself, namely, ‘compensation for any loss or damage caused to him thereby’; Similar is the expression used in S. 75 too. That section refers to ‘compensation for any damage Which he has sustained through the non-fulfilment of the contract. Consequently, both under S. 73 and under S. 75, a person will be entitled to recover compensation only if he has sustained loss or damage and the amount of compensation will be only to the extent of such loss or damage. On the other hand, S. 74 is intended to meet a different situation altogether and it provides for a different consequence. That section clearly and categorically states that the party complaining of breach is entitled to compensation, whether or not actual damage or loss is proved to have been caused by the breach of the contract. Again, as distinct from the use of the expression, ‘compensation for any loss or damage caused to him thereby’ in S. 73 and the use of the expression ‘compensation for any damage which he has sustained through the non-fulfilment of the contract’ in S. 75, Sec. 74 uses the expression, ‘reasonable compensation” Therefore, S. 74 is more or less in the nature of an exception to S. 73. Hence, where a case falls within the scope of S. 74, a claimant will be entitled to the reasonable compensation, irrespective of the fact whether actual loss or damage is proved to have been caused to him or not. However, S. 74 will apply only if in the contract a sum has been named as the amount to be paid in case of breach or if the contract contains any other stipulation by way of penalty. If this test is not satisfied, S. 74 will not be attracted. When this test is satisfied and S. 74 is attracted, the reasonable compensation cannot exceed the amount named in the contract or the penalty stipulated for. In other Words, in such circumstances, the amount named in the contract or the penalty stipulated for will be the maximum which a party will be entitled to by way of reasonable compensation. From the very nature of the case it is the duty of the court to assess and arrive at the reasonable compensation and if the reasonale compensation so arrived at exceeds the sum named in the contract or the penalty stipulated for, the successful party will be entitled only to the sum so named or the penalty stipulated for. On the other hand, if the reason able compensation arrived at by the court is less than the sum so named in the contract or the penalty stipulated for, the successful party Will be entitled to the amount assessed by the court. Hence a combined reading of Ss. 73 and 74 of the Indian Contract Act leads to the following result:—

    Whenever a contract has been broken, the party who has suffered by such breach is entitled to recover from the party in breach, compensation for loss or damages caused to him by such breach. This naturally assumes that the claimant had suffered loss or damage and therefore before claiming anything by way of compensation, he must prove that he has suffered loss or damage. The quantum of compensation will depend upon the extent of the loss or damage caused to him and in other words, the compensation will be only to cover the loss or damage suffered by him. This will be the position in respect of a contract where the parties themselves have not mentioned any amount as being the amount payable in the event of a breach or have not stipulated for payment of any penalty. On the other hand, where the parties to a contract have named an amount as being payable in the event of a breach or stipulation for payment of penalty, the party not in breach will be entitled to recover from the party in breach a reasonable compensation and for recovering this reasonable compensation, it is not necessary for the claimant to prove that he has actually suffered any loss or damage The reasonable compensation to be awarded by the court cannot exceed the amount named by the parties to the contract or the penalty stipulated for, the same being treated to be the maximum to which the party not in breach is entitled’.

    After considering the decisions of the Supreme Court and certain other decisions, the judgment concluded—

    “……having regard to the express language contained in S. 74 of the Indian Contract Act, and the various decisions of the courts referred to above, in a case to which S. 74 of the Indian Contract Act applies, the party claiming compensation need not prove that he has actually suffered any loss or damages, and he is entitled to claim reasonable compensation solely because breach of the contract has been committed hy the other party and the parties themselves have agreed to the payment of a particular sum, whether it is called ‘damage’ or penalty’ in the event of a breach and that the only restriction which the law imposes is that the reasonable compensation to be assessed or computed by the court cannot exceed the amount agreed to by the parties., whether by way of damages or by way of penalty. To contend that even in such circumstances, the party claiming compensation must prove that he has actually suffered loss or damage is to fly at the face of the express language contained in S. 74 of the Indian Contract Act and to ignore the same altogether. If the plaintiff actually proves the extent of loss or damage sustained by him as a result of the breach committed by the other party, it would certainly constitute relevant material to be taken into account by the court in assessing the reasonable compensation. But it is far different from saying that he is not entitled to any compensation at all unless he proves that he has actually sustained loss or damage. Where it is established that the plaintiff has not suffered any loss or damage at all the court may not award him any substantial amount? But that is far different from denying him the right to claim compensation as provided for by S. 74 of the Indian Contract Act on the ground that he has not actually suffered any loss or damage”.

    In our opinion, the above extracts from the judgement correctly represents the position of law with reference to Ss. 73, 74 and 75 of the Indian Contract Act.

    8. Even with reference to this judgment, Mr. Badsha contended that the court has to fix a reasonable compensation not exceeding the amount agreed to between the parties and there is no evidence before the court for fixing this reasonable compensation, and in the present case, the trial court merely awarded the amount stipulated in the bond Ex-A.2 as the compensation. This argument happens to be advanced in view of the fact that no oral evidence whatever was let in the present case, and the parties proceeded with the trial of the suit only on the basis of the documents marked on behalf of the respondent herein, viz., the Customs Clearance permit Ex. A.1 and the bond, Ex. A.2 and the correspondence that passed between the parties. In our opinion, this argument of the learned counsel for the the appellants overlooks the exception to S. 74 of the Indian Contract Act, which also we have retracted. That exception takes two categories of instruments out of the scope of the restriction contained in S. 74. One category of instruments is bail bond, recognisance or other instrument of the same nature. The other category is any bond entered into by any person under the provisions of any law or under the orders of the Central Government or of any State Government for the performance of any public duty or act in which the public are interested. In both these cases, the person who entered into the bond, recognisance or other instrument, upon breach of the condition of any such instrument, shall be liable to pay the whole or the sum mentioned therein. If the case of the appellant falls within the scope of the exception, certainly the appellants are liable to pay the entire amount mentioned in Ex. A.2 without the court assessing the reasonable compensation for the breach of contract committed by the appellants herein. We are clearly of the opinion that the bond executed by the appellants is covered by the Exception to the section and comes within the second category referred to above. That it is a bond is not disputed. That it was executed under orders of the Central Governments is not disputed either. The bond itself states that it was executed under the orders of the Central Government and was in respect of an act in which the public are interested. For one thing, the appellants having executed the bond with the express stipulation that the bond was entered into under the orders of the Central Government, for the performance of an act in which the public are interested, are not entitled to go back on the said stipulation and contend that it was not executed under the orders of the Central Government, and it was not for the performance of an act in which the public are interested Even assuming that the appellants are entitled to go back on the express stipulation and can canvass the position as to whether the present bond was executed in respect of an Act in which the public are interested, we are clearly of the opinion that the present case falls within the scope of the exception referred to, independent of the above stipulation in Ex. A 2. It is not disputed that the import of foreign cars is prohibited. Such prohibition is imposed by the Government, among others, for giving protection to indigenous production of the cars. Therefore, the fulfilment of the condition of re-export subject to which the foreign car is imported is an act in which the public as a whole are interested, and indisputably the stipulation itself was inserted in the bond under the orders of the Central Government. Consequently, the case falls directly within the scope of the exception, and the appellants herein having failed to perform the obligation of re-exporting the car, are bound to pay to the respondent the sum mentioned in the bond, and, the question of the court itself determining a reasonable compensation not exceeding the sum mention the bond does not arise.

    9. Under these circumstances, we hold that the conclusion of the learned trial Judge, is correct, and the suit was rightly decreed. Consequently, the appeal fails and is dismissed. But we do not make any order as to costs.

    V.C.S

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    B.N. Mathur v. Union Of India
    (Jul 5, 1973)