1. The plaintiff was a trader engaged in exporting carpets from India to England. He had his own customers and agents. The defendants who were five traders engaged in the same business joined together into one associated body and entered into competition with the plaintiff, by offering very low and attractive rates to customers who would deal with them. A result of this was that many of the plaintiff’s customers left him and went over to the defendants. Some of his agents also left the plaintiff. In consequence, the plaintiff unable to withstand the competition had to close down his business. He claims damages from the defendants for conspiring to injure him.
Decide with giving reasons whether he can succeed?
Civil Services (I.A.S.) Exam, 1973
West Bengal Judicial Service Exam, 1981
Bihar Judicial Service (Civil Judge, Jr. Division) Exam, 1974 (Similar Problem).
Ans: No, plaintiff cannot succeed in his suit for damages – Mogul Steamship Co. v. Mac-Gregor Gow & Co., (1892) AC 25.
Reasons: This problem is based on the maxim ‘Damnum Sine Injuria’ which means damage without injury (harm without violation of legal right). Under law of torts harm without violation of legal right is not actionable.
Facts of this problem are similar to the facts in the famous case of Moghul Steamship Co. v. Mac-Gregor Gow & Co. In this case a number of Steamship companies combined together and drove the plaintiff’s company out from the ‘tea carrying trade’ by offering reduced freight. The House of Lords held that the suit for damages against the defendants is not maintainable because it is a case of trade competition and defendants by lawful means acted to protect and extend their trade and increase their profits, and in doing so they did not violate any legal right of the plaintiff. In the given problem also there is a case of trade competition and defendants have not violated any legal right of the plaintiff, hence, the plaintiff cannot claim damages from the defendants, though the act of the defendants caused loss to him.