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TMI Blog1962 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... was involved in the appeal. On behalf of the appellant it was contended that the question raised concerned the interpretation to be placed on certain clauses of the managing agency agreement upon which their claim in the suit was founded and that as the interpretation placed by the appeal court on those clauses was erroneous and thus deprived them of the claim to a substantial amount the matter deserved to be certified by the High Court under Art. 133(1)(a) of the Constitution. The learned Judges dismissed the application without a judgment apparently following their previous decision in Kaikhushroo Pirojsha Ghaira v. C. P. Syndicate Ltd. (1948) L. Bom. L.R. 744). The appellants, therefore, moved this Court under Art. 136 of the Constitution for grant of special leave which was granted. In the application for special leave the appellant had raised a specific contention to the effect that the view taken by the High Court with regard to the application for certificate under Art. 133 (1) (a) of the Constitution was wrong, that the appellant was entitled to appeal to this Court as a matter of right and that while considering the appeal this question should also be decided. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion of law meant a question of general importance. Their Lordships think it is quite clear and indeed it was conceded by Mr. De Gruyther that that is not the meaning, but that "substantial question of law" is a substantial question of law as between the parties in the ease involved." Then their Lordships observed that as the case had occupied the High Court for a very long time and on which a very elaborate judgment was delivered the appeal on its face raised as between the parties a substantial question of law. This case is reported in Raghunath Prashad Singh v. Deputy Commissioner of Partabgarh (1927) 54 1. A. 126, 128. What is a substantial question of law as between the parties would certainly depend upon the facts and circumstances of every case. Thus for instance, if a question of law bad been settled by the highest court of the country the question of law however important or difficult it may have been regarded in the past and however much it may affect any of the parties would cease to be a substantial question of law. Nor again, would a question of law which is palpably absurd be a substantial question of law as between the parties. The Bombay High Court, however, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is such doubt in its mind the question of law decided by it cannot be said to be "a substantial question of law" so as to entitle a party to a certificate under a. 1 10 of the Code of Civil Procedure. It is true that they have not said in so many words that such a doubt must be entertained by the Court itself but that is what we understand their judgment to mean and in particular the last sentence in the portion of their judgment which we have quoted above. As against the view taken by the Bombay High Court there are two decisions of the High Courts in India to which reference was made before us. One is Dinkkarrao v. Rattansey (1. L. R. (1949) Nag. 224). In that case applying the Privy Council's decision the High Court held that a question of law is substantial as between the parties if the decision turns one way or another on the particular view taken of the law. If the view taken does not affect the decision then it cannot be substantial as between the parties ; but it would be otherwise if it did, even though the question may be wholly unimportant to others. It was argued before the High Court on the basis of certain decisions that no question of law can be substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s palpably absurd it would still be regarded as a substantial question of law merely because it affects the decision of the case one way or the other. 'But at the same time his observation that the view taken in the cases cited before him requires to be modified in the light of the Privy Council decision would imply that a question of law is deemed to be a substantial question of law even though the legal principles applicable to the case are well defined and there can be no reasonable divergence of opinion about the correctness of the view taken by the High Court. If we, have understood the learned Chief Justice right, we think that he has gone further than was warranted by the decision of the Privy Council in Raghunath Prasad Singh's case (1927) 54 I.A. 126. 128). The other case relied upon was Rimmalapudi Subba Rao v. Noony Veeraju (I.L.R. 1952 Mad. 264). In that case the test of the kind suggested by Bose 'C.J., was rejected on the ground that logically it would lead to the position that even a palpably absurd plea raised by a party would involve a substantial question of law because the decision on the merits of the case would be directly affected by it. What was, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on passed by the respondent company in October 1945, Chunilal Mehta & Co., were permitted to assign the benefits of the aforesaid.agreement to the present appellant, Sir Chunilal V. Mehta & Sons Ltd. On April 23, 1951, the Board of Directors of the Company terminated the agreement of 1933 and passed a resolution removing the appellant as Managing Agents on April 23, 1951. The appellant thereupon filed a suit on the original side of the Bombay High Court claiming Rs. 50 lakhs by way of damages for wrongful termination of the agreement. Eventually with the permission of the Court it amended the plaint and claimed instead Rs. 28,26,804/-. The company admitted before the Court that the termination of the appellants' employment was wrongful and so the only question which the learned Judge before whom the matter went had to decide was the quantum of damages to which the appellant was entitled. This question depended upon the construction to be placed upon cl, 14 of the Managing Agency agreement. That clause runs thus; "In case the Firm shall be deprived of the office of Agents of the Company for any reason or cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tends, the appellants are entitled to 10% of the profits of the company subject to a minimum of Rs. 6,000/- p.m. Alternatively learned counsel contends that el. 14 is not exhaustive of the appellant's right to compensation and the right to be compensated in respect of contingent remuneration based on 10% of profits is left untouched by that clause. A perusal of el. 14 clearly shows that the parties have themselves provided for the precise amount of damages that would be payable by the Company to the Managing Agents if the Managing Agency agreement was terminated before the expiry of the period for which it was made. The clause clearly states that the Managing Agent shall receive from the Company as compensation or liquidated damages for the loss of appointment a sum equal to the aggregate amount of the monthly salary of not less than Hs. 6,000/- for and during the whole of the unexpired portion. of the term of Agency. Now, when parties name a sum of money to be paid as liquidated damages they must be deemed to exclude the right to claim an unascertained sum of money as damages. The contention of learned counsel is that the words "not less than" appearing before "Bs. 6,000/-" i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n earned. Now, whether a company had made profits or not and if so what is the extent of the profits is determinable only at the end of its accounting year. To say, therefore, that the remuneration of 10% of the gross profits accrues from day to day and is payable every month would be to ignore the nature of this kind of remuneration. Therefore, in our opinion, when the remuneration and salary were equated in el. 12 nothing else was meant but Rs. 6,000/-and when the word salary was used in el. 14 we have no doubt that only that amount was meant and no other. It may be that under el. 10 the appellant was entitled to additional remuneration in case the profits were high upto a limit of 10% of the gross profits. That was a right to claim something over and above Rs.6,000/-and could be characterized properly as additional remuneration and not fixed or normal remuneration which alone was apparently in the minds of the parties when they drew up el. 14. In our opinion, therefore, the High Court was right in the construction placed by it upon the clause. Coming to the alternative argument of Mr. Palkhivala, we appreciate that the right which the appellant had of claiming 10% of profits was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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