Falshaw, J. - (1.) This is an appeal by the Delhi Cloth and General Mills Company Limited, Delhi, against a decree passed in favour of K. L. Kapur respondent for Rs. 46,712/-.
(2.) The facts of the case are to a great extent not in dispute, though some ol their implications are, and are as follows. About December 1945 the plaintiff, K. L. Kapur, who possesses a diploma in engineering from the Maclagan Engineering College at Lahore and claims to be an expert in the branch of industrial technology described as "Time and Motion Study" approached the Company with a view to placing his skill at its disposal for the purpose of effecting economies in the running of its factories. He was successful in persuading the management to give his methods a trial and the only terms of the contract subsequently entered into between the parties are embodied in the letters P. 2, P. 3 and P. 4. The first of these dated the 29th of January, 1946 is addressed by the Managing Directors of the Company to the plaintiff and reads:--(Page 87). "Reference your letter No. D. M. I dated the 28th December, 1945, please note that the terms on which we are prepared to engage you for study of Time and Motion in our Mills are as follows :- We will pay you 10% of the savings effected annually for the first year only. 2 1/2 of this amount will be payable after three months of the completion of your work to our satisfaction 21/2 after six months and the balance after one year. The payment will not be for suggestions only, but for actual economies effected by your personal effort. The decision of the General Manager, Spinning Superintendent and our Costing Officer will be final for purposes of deciding as to how much economies have been effected and to what an extent. Although the economies effected will be recurring, but the payment will be only on the basis of first one year's savings." Exhibit P. 3 on the same page is from the plaintiff to the Managing Directors dated the 31st of January, 1946 as follows:-- "I am in receipt of your letter No. 12853 dated the 29th January, 1946. 'n this connection I beg to point out that the work was started in the Mills about a month back on the understanding that I will receive 20% of the saving effected annually for the first year only. 20% is already a low figure and it is not possible for me to do the job on anything lesser than this. 5% of this amount was to be payable after three months of the completion of work in a department, 5% after six months and the balance after one year. I agree that the savings will be recurring but payment to me on the first year's savings. I also agree that the General Manager, Spinning Superintendent and Costing Officer in consultation with me will decide as to how much economies have been effected and to what an extent. Their decision in this respect will be final. It is, however, suggested that certain basis be formed against which improvements will be compared e.g. average 24 hours production for the months of November and December or any other two months of the year 1945. Time and Motion Study work is mostly educative and as the operators form better habits, the production begins to improve and the costs decrease. Rest of the work consists of improving the effectiveness of supervision and introducing better control. My work, therefore, will be most practical and personal. Suggestions will be made to the management where changes in organisation, machinery and plant layouts will be required. Perfect loyalty and honesty in work is assured." The last 'letter P. 4 (Page 88) is from the Company to the plaintiff dated the 5th February, 1946 and reads :-- "Reference your letter No. DM/3 dated the 31st January, 1946, we are agreeable to the figure of 20% mentioned by you on the terms etc. already decided."
(3.) Thereafter Kapur began studying conditions in the Spinning Department of the Company, which in itself apparently comprises two separate factories, and on the 21st of February, 1946 he submitted what is described as his first report P. 5/1 (page 122). This is apparently a statistical analysis in which he recommended the regrouping of workers of five instead of six groups, which he considered would save one head-doffer and one doffer for each shift, and he suggested that the men thus saved should be assigned to him as his staff. It does not seem that either any of his suggestions contained in this report were accepted or acted upon at that time or afterwards.;