Case Note & Summary
The plaintiff, a partnership firm registered under the Indian Partnership Act, carried on business of acquiring sites, erecting hoardings, and permitting customers to display advertisements. The defendant, a public limited company incorporated under the Companies Act, manufactured cranes and steel plant equipment. In early 1977, the defendant approached the plaintiff to display advertisements on two hoardings in the compound of Industry Manor, Prabhadevi, Bombay. An arrangement was reached on 15/3/1977, and the defendant started displaying advertisements. The plaintiff issued bills for licence fees, which the defendant paid until 1985. Thereafter, the defendant stopped paying. The plaintiff filed a suit seeking recovery of Rs. 26,87,340 as arrears of licence fees and compensation at Rs. 17,000 per month per hoarding from the date of suit till discontinuance. The court examined the evidence, including correspondence and bills, and found that the defendant had used the hoardings without payment after 1985. The court held that the plaintiff was entitled to recover the arrears and future compensation for wrongful use. The suit was decreed in favor of the plaintiff with costs.
Headnote
A) Contract Law - Licence Agreement - Recovery of Licence Fees - Indian Contract Act, 1872 - Plaintiff partnership firm granted licence to defendant company to display advertisements on two hoardings. Defendant failed to pay licence fees from 1985 onwards. Court held that plaintiff is entitled to recover arrears of licence fees and mesne profits for wrongful use of the hoardings after termination of licence. (Paras 1-10) B) Property Law - Mesne Profits - Compensation for Wrongful Use - Transfer of Property Act, 1882, Section 108 - After termination of licence, defendant continued to use hoardings without payment. Court held that defendant is liable to pay compensation at the rate of Rs. 17,000 per month per hoarding from the date of suit till they discontinue use. (Paras 3-10)
Issue of Consideration
Whether the plaintiff is entitled to recover licence fees and compensation for the defendant's use of hoarding sites after termination of the licence agreement.
Final Decision
Suit decreed in favor of plaintiffs with costs. Defendants ordered to pay Rs. 26,87,340 as arrears and Rs. 17,000 per month per hoarding from date of suit till discontinuance.
Law Points
- Licence fee recovery
- mesne profits
- compensation for wrongful use
- termination of licence
- suit for recovery of money
