P L D 1965 (W (PLP)

"

24. When the contract is made for two or more months of shipment it is to be understood unless otherwise mentioned that the quantity is divided equally over the months mentioned in the contract and it is also understood that any old packages can be shipped in any of the months contracted at the sellers option.

25. If the goods or any portion of the same are shipped prior to the time stipulated the buyers will not have the right of canceling, but provided the prior shipment exceed 10 days they will not be charged interest if required for the period that the goods are shipped prior to the time stipulated." The provision in clause 24 with regard to the equal division of the quantity over the months would be applicable unless it is "otherwise mentioned" in the contract itself. In the case of this contract the shipment clause provides for June/July. It is, therefore, clear that under the written terms of the contract the sellers were entitled to ship the whole or any part of the goods in either of these two months. They would fulfil their contract so long the whole quantity was shipped before the end of July 1951. This was done in this case. There is thus no substance in this objection of the plaintiff. In fact, Mr. Aziz, their learned counsel, conceded that in view of the oblique line between June and July he would not be able to press this issue. In view of my conclusion my finding on issue No. 3 is that the contracted goods were shipped in terms of the agreement.

11. I shall next proceed to deal with the additional issue, namely, whether the plaintiffs are disentitled from claiming the refund of the deposit on account of their failure to apply for delivery and the connected question, namely, whether the defendants cleared the cantracted goods within a reasonable time and the further question as to who committed the breach of the contract. These are subject-matter of issues 4 and 6.

12. It will be necessary now to refer to some more of the correspondence which passed between the parties. I have already dealt with the correspondence up to 18th August 1951. The letter of that day is Exh. 11 and is from the plaintiffs, wherein they had asked for the refund of the deposit. The defendants' replied by Exh. 12, dated 22nd August insisting that the goods had been shipped according to the contract and the plaintiffs were bound to accept them and that they shall have to pay and take delivery as soon as the goods arrived. The plaintiffs replied on 25th of August reiterating their stand and the defendants again wrote on 30th of August as per Exh. 14 saying that as soon as the goods were cleared they will have to pay for and take delivery of it. The next material letter is dated 24th November 1951, Exh. 16, from the defendants to the plaintiff in which they said:‑-- "We have to inform you that the goods under the above contracts have been cleared and brought to our godown. Please pay for and take delivery of the same within 48 hours. of the receipt hereof by you, otherwise the goods will be sold by public auction at your risk." When the plaintiffs received this letter they replied on the same day and asked for the following information: (i) The date or dates on which the shipment of goods had been effected; (ii) the date or dates of the arrival of the steamer or steamers carrying the goods; and (iii) the reasons for unreasonable delay in offering the goods. To this the defendants replied on 27th November 1951, as per Exh. 18 saying that they had given information with regard to the shipment by the letters dated 12th July 1951 and 7th August 1951; that the date of the arrival of the ship in question can be ascertained from the Customs Authorities; that they categorically deny that there was any unreasonable delay in offering the goods. On the other hand, it were the plaintiffs who had been putting forward lame excuses. The plaintiffs wrote again asking for the information with regard to the arrival of the ship and the clearance of the goods and the defendants replied on 8th December 1951, that they had informed them about the shipment of the goods and subsequently when the goods were cleared and received in their godown they had informed the plaintiffs by their letter dated 24th November 1951. The information with regard to the date of the arrival of the two ships and the date of clearance was not given. The plaintiffs again asked for information on 10th December 1951, as per Exh. 21 and the defendants replied on 13th December as per Exh. 21‑A saying that as disputes had arisen between them the matter should be referred to arbitration in terms of clause 35 of the contract and that it was not necessary to enter into any further correspondence. The rest of the correspondence is not material.

13. At the trial the plaintiffs examined the traffic supervisor of the Karachi Port Trust Mr. Zaidi, P. W. 1, who with reference to the record stated that the ship s. s. Pentacotta had arrived on 25‑8‑51, and the other ship s. s. Obra arrived on 1st October 1951. These dates were not challenged by the defendants. These are the two ships on which the contracted goods had been shipped and eventually received by the defendants.

14. It will be noted that it was for the first time on 24th November 1951, that the defendants had by Exh. 16 informed the plaintiffs that the goods of the contract had been cleared and brought to their godown. It would thus appear that with regard to the goods of Pentacotta the information had been conveyed exactly after three months of the arrival of the ship and in respect of the goods of Obra after one month and 23 days. The defendants had examined the broker in Suit No. 433/54, which evidence was agreed to be read in this case. He stated that the first information in such transaction is given with reference to the name of the ship on which the goods are shipped and the second information is given when the goods are cleared from the Customs and brought in the godowns. The plaintiffs in Suit No. 433/54 examined a clearing agent namely, Muhammad Siddiq P. W. 2, who stated with reference to his register of the year 1951, that the ship s. s. Orna arrived on 24‑8‑

51. He received the documents of the consignment of his client on 27‑8‑51, and cleared the goods on 30th August 1951. With regard to another transaction he stated that the ship s. s. Palamcotta arrived on 4‑8‑51, and he got the documents on the same day and cleared the goods on 11th August 1951. With regard to the third ship s. s. Umariya he stated that it arrived on 4‑8‑51, the documents were received by him on 6‑8‑51, and he cleared the goods on 11‑8‑

51. With regard to the fourth ship s. s. Muzaffaria he stated that it arrived on 4‑6‑51, the documents were received by him on 5‑6‑51, and the goods were cleared by him on 9‑6‑

51. In cross‑examination he stated that when everything is normal it takes 5 to 7 days to clear the goods after the arrival of the ship but if any complications arise it takes more time. None of these ships are amongst the two from which the goods of the present suit came. But this evidence was relied upon by the plaintiffs in this suit to show the normal time which is taken in the clearance of the goods from the Karachi Port. The defendants led no evidence to the contrary.

15. The defendants in their written statement had taken a plea that as the plaintiffs had already cancelled the agreements on 9‑8‑51, by their letter, Exh. 9, the further offering of the goods by the defendants was merely a matter of form and the plaintiffs could not be allowed to use any irregularity or lacuna (presumably in the defendants' case) to avoid their liability. Now, there is no doubt that not only had the plaintiffs repudiated the contract by their letter of 9th August 1951, but they had maintained the same attitude in several subsequent letters to which reference has already been made. The various grounds upon which the plaintiffs were accusing the defendants of the breach of contract and‑ demanding the refund of their deposit have been dealt with under issues Nos. 2 and 3, and I have found that they were not entitled to repudiate the contract upon those grounds. But the defendants never accepted the repudiation and on this point they consistently maintained that the plaintiffs were bound to take delivery of the goods when it arrived. The last letter of the plaintiffs repudiating the contract was of 31st August 1951. Then on 24th November 1951, the defendants informed them that the goods had been cleared and brought to their godown and the plaintiffs should pay and take delivery within 48 hours. The plaintiffs then asked for various informations including the information about the date of the arrival of the steamer and what they called unreasonable delay in the offer of goods. The substance of all this correspondence has already been reproduced by me earlier.

16. It is indisputably clear from the correspondence that the defendants had, notwithstanding the repudiation of the contract, by the plaintiffs, treated the contract as subsisting and had not elected to rescind it. The law seems to be clear that a wrongful repudiation in the absence of election by the other party leave B both of them with their rights and liabilities as if no repudiation has taken place. This applies in cases of anticipatory breach. The general principle is contained in section 39 of the Contract Act and section 60 of the Sale of Goods Act deals with the same particular reference to cases of sale of goods. "

60. Where either party to a contract of sale repudiates the contract before the date of delivery, the other party may either treat the contract as subsisting and wait till the date of delivery, or he may treat the contract as rescinded and sue for damages for the breach." An extremely lucid exposition of the consequences of non acceptance of anticipatory breach was given by Cockburn, C. J., in the case of Frost v. Knight (L R 5 Ex. 322). This is what the learned Judge said: "The promisee, if he pleases may treat the notice of intention as inoperative and await the time when the contract is to be executed, and then hold the other party responsible for all the consequences of non‑performance; but in that case he keeps the contract alive for the benefit of the other party as well as his own; he remains subject to all his own obligations and liabilities under it, and enables the other party not to complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstance which would justify him in declining to complete it."

17. Their Lordships of the Judicial Committee in the case of Florrie Edgridge v. Rustomji D. Sethna (AIR 1933 P C 233), dealing with a contract containing a reciprocal promise held that "a wrongful repudiation by one party cannot, except by the election of the other party so to treat it, put an end to an obligation; if the other party still insists on performance of the contract, the repudiation is what is called `brutum fulment' that is the parties are left with their rights and liabilities as before". In an earlier case Burn & Company Ltd. v. H. H. Thakur Sahib Sree Lukhdhirji of Morvi State (AIR1925PC188), their Lordships had taken the same view. It may be interesting to note the facts of this case. The defendant Burn & Company had agreed to manufacture and deliver to the Morvi State 50 railway wagons for a fixed price within 6 months from the date of the receipt of the order. The terms of payment which were held to be of the conveyance of the contract were that the buyer should pay to the seller company 1/3rd of the contract price on the orders for the wagons being given and another 1/3rd when the under frames of the wagons should be wheeled and the remaining 1/3rd when the wagons should be delivered. The first instalment was duly paid but when the buyer was given notice that the underframes of the wagons had been wheeled he made default in payment of the second instalment, which in effect amounted to a refusal by him to perform the contract in its entirety. The defendant company was entitled to rescind the contract but they did not do so and on the contrary by delivering 8 of the wagons treated the contract as subsisting. They then insisted on payment of the price and that not being received they gave notice that unless the full amount of the original contract price was paid to them within 10 days, the undelivered wagons would be disposed of and they did eventually do so. Two months thereafter the buyer's solicitor asked for the delivery of the remaining 42 wagon, enclosing a cheque of the full amount of the second instalment and promising to pay the third instalment on receipt of the wagons in accordance with the terms of the contract. It was held that the sellers were in breach because having kept the contract alive they could not insist on payment of the whole price because that was to be paid on the delivery of the wagons.

18. My conclusion, therefore, on this aspect of the case is that inasmuch the sellers had not accepted the wrongful', repudiation by the buyers in this case and had not only kept the contract alive but had insisted that the buyers shall have toy take delivery when the goods arrived, both parties were left in the same position as if the repudiation had not taken place and were thus entitled to the same rights and subject to the same liabilities. I then pass on to the next phase of the case when the steamers arrived and goods were offered to the buyers after clearance.

19. I have already referred to the defendants' letter of 24th November 1951, Exh. 16, whereby they informed the plaintiffs that the contracted goods had been cleared and brought to their godown and they (buyers) should pay for and take delivery of the same within 48 hours. 1 have also referred to the plaintiffs' letter of the same day in which they had enquired about the date of the arrival of the steamer and the reason for the unreasonable delay in the offering of the goods. The correspondence which followed has also been referred to and need not be repeated. The contention of Mr. Aziz, the learned counsel for the plaintiffs, was that even if it was found that the grounds upon which the buyers bad repudiated the contract earlier were ill‑founded the buyers in the absence of the election of the sellers were still entirely within their rights to refuse to take delivery because the sellers were already in breach inasmuch as they had not cleared the goods within a reasonable time. It was pointed out that the information by the sellers with regard to the goods having come into their godown was after a lapse of three months in the case of first steamer and one month and 23 days in the case of the second steamer. Mr. Sohail countered this argument by urging that even if the counter‑claim of the defendants for damages was not tenable if it was held that the delay in the clearance of the goods was unreasonable, the plaintiff's suit for the refund of the earnest money must fail upon the short ground that they had not fulfilled the obligation imposed upon them by section 35 of the Sale of Goods Act. This section reads:‑ "

35. Apart from any express contract, the seller of goods is not bound to deliver them until the buyer applies for delivery." Mr. Sohail contended that an application for delivery was a condition precedent before the buyer could complain of breach on behalf of the sellers. Such an application, he argued, was the cause of action of the buyers and inasmuch as they had not applied for delivery they had no cause of action and, therefore, their suit must, in any event, fail. Reliance was placed by him on three cases which are no doubt in point. The first is a Privy Council decision and is Nune Sivayya and another v. Maddu Ranganayakulu and another (A I R 1935 P C 67). The second is a decision of the Bombay High Court and is reported in D. L. Kumar and others v. S, Rambilas and others (A I R 1947 Bom. 293). The third is a Division Bench judgment of this Court clussain Trading Co. v. Haji Moosa Haji Oomar (P L D 1957 Kar. 311). In this judgment reliance has been placed on the Privy Council case and the Bombay case referred to above.

20. In the case of Nune Sivayya v. M. Ranganayakulu the contract between the parties was in respect of 160 bales of yarn. The buyers had taken delivery of some and with regard to the remaining when called upon to take delivery by the sellers took the stand that the sellers were bound to deliver all the goods within two months from the dates of the respective contracts and since they had failed to do that the buyers were not bound to take delivery of the goods after the expiry of the due date. The sellers then sold the remaining bails by auction and brought a suit for damages. The trial judge held that a reasonable time for delivery had expired and therefore the sellers were in breach. On this finding the sellers' suit was dismissed. On an appeal to the High Court the sellers urged that in view of the provisions of section 93 of the Contract Act they were not bound to deliver the goods to the buyers until the latter applied for delivery. Section 93 fell in Part VII of the Contract Act which, having been repealed by the Sale of Goods Act (Act III of 1930), the section reappeared as section 35 of the latter Act, but with the substitution of the words "apart from any express contract" for the words "in the absence of any special promise". The High Court held that section 93 was inapplicable in the circumstances of that case. The main reason for this conclusion was that the contention of the plaintiffs based upon section 93 was against that pleading and evidence, and it was also against the very nature of the contracts themselves under which the plaintiffs were to procure from distinct part of India goods, the arrival of which would be within their knowledge and not within the knowledge of the defendants. They accordingly dismissed the appeal and the matter was then taken by sellers to the Privy Council. Their Lordships of the Privy Council disagreed with the view taken by the High Court on section 93 of the Contract Act and observed:‑-- "It is important to observe that section 93 applies unless there is a special promise, which in their Lordships opinion, indicates an express stipulation as to delivery which relieves the buyer from the obligation to apply for delivery or the necessary implication of such a stipulation from the nature of the contract as expressed. It might also arise out of usage or custom of trade, as provided in section 1, Contract Act. But, in their Lordships' opinion, an obligation‑assuming that it existed in the present case, as is suggested by the High Court on the seller to inform the buyer when the goods are in a deliverable state is not a special promise within the meaning of section 93 though it may postpone the obligation of the buyer to apply for delivery, and, on the elapse of a reasonable time to enable the goods to be procured by the seller from the mills, the buyer would be entitled and bound to apply for delivery."

21. In the Bombay case A I R 1947 Bom. 293 which was a case of a contract of sale of ready goods it was urged on behalf of the sellers by Mr. Setalvad that the fact that an application for delivery was made had not been clearly set out in the plaint. Upon this their Lordships made the observation which has been relied upon by Mr. Setalvad:‑ "It is true that when a buyer sues a seller for damages for non‑delivery of goods, application for delivery on his part is a part of the cause of action and must be explicitly stated in the plaint." They, however, went on to hold that the averment in the plaint implied that an application for delivery had been made. With reference to the contention of Sir Jamshed Kanga on behalf of the buyers that section 35 did not apply to a contract of sale of ready goods, their Lordships observed: ‑ "Section 35 makes no distinction between the sale of ready goods and of forward goods; and the Privy Council in 37 Bom. L R 538 has laid down that the buyer can only be relieved from his statutory obligation to apply for delivery by an express stipulation to the contrary."

22. In the Karachi case [P L D 1957 Kar. 311], a decree had been passed by the trial Court upon the buyers' suit for the refund of deposit. The point of the absence of the application of delivery was not taken in the trial Court. In appeal before the Division Bench it was urged on behalf of the sellers that in view of the provision of section 35 of the Sale of Goods Act, in the absence of any express contract between the parties it was necessary for the buyers to demand the delivery of the goods before repudiating the contract and as the buyers in this case did not make any demand for the delivery of the goods, their suit for the refund of the deposit should have been dismissed. Reliance was placed upon the Privy Council case as well as upon the Bombay case mentioned above. It was also urged by the sellers' learned counsel that in so far as the buyers' suit was filed on the allegation that the sellers did not deliver the goods within a reasonable time the sellers were entitled to show that the buyers did not make any demand for the delivery of the goods and that it was not necessary for the sellers to make an averment to this effect in the pleadings. Their Lordships, however, remanded the case so that an issue could be framed on this question and the parties should have the opportunity of leading evidence thereon. While remanding the case their Lordships observed:‑-- "We consider that in a suit for damages or for the refund of the deposit on the breach of the contract for the supply of goods, it is necessary for the plaintiff to allege that the delivery of goods was demanded from the seller and to prove this fact by cogent evidence. It is only after such demand that the question, as to the time within which it should be complied with, shall arise."

23. On remand the case was tried by Qadeeruddin, J., on the Original Side. He disbelieved the evidence of the buyers that a demand for delivery was made but he pointed out that the contract expressly provided that the delivery of the goods was to be made after their clearance; that the ship carrying the goods arrived at Karachi on 18th June 1951, and the goods were cleared on 24th July 1951, and the sellers had informed the buyers on 20th July 1951, to wait until information was given to them regarding the clearance of the goods. This, it was observed, had the effect of postponing the time for application for delivery though it was not an "express contract" within the meaning of section 35 of the Sale of Goods Act. The learned Judge went on to hold that as the sellers on clearance had themselves offered the goods for delivery they had themselves dispensed with the requirement of section 35 and they could not then turn round and say that they were not bound to deliver until an application for delivery was made. His Lordship then went on to hold that the buyers were within their right in canceling the contract on the ground of delay on the part of the sellers in clearing the goods. He, therefore, held both on the ground of delay in the clearance of the goods by the sellers and because of their own offer to deliver the goods that they could not successfully resist the buyers' claim for the refund of deposit. The buyers' suit was accordingly decreed. The judgment is not reported but a certified copy of it was produced by Mr. Aziz and has been kept on record.

24. Thereafter there have been three more judgments of this Court on the same point. Two of these are by Division Bench. The judgments, however, in all these three cases have been written by my learned brother Qadeeruddin, J. The first of these is a Division Bench judgment in the case of Pakistan Khopra Mills v. Abdul Rashid Siddiki & Sons (P L D 1957 Kar. 781). The question of section 35 of the Sale of Goods Act was pointedly raised in this case on behalf of the sellers. The material terms of the contract in this case were:‑- "Please book and despatch at your earliest convenience by goods train the under mentioned goods subject to the terms and conditions specified overleaf and send documents through V. P. P." ". . . . Mill delivery. Bags to be supplied by the purchasers, April. Sellers' option Sellers option after 15‑4‑51." The learned Judge on the Original Side who tried the case had held:‑ "To my mind the question of applying for delivery would not arise in the case of sellers' option unless the sellers intimate to the buyers that the goods are ready for delivery." The correctness of this finding was vigorously challenged by Mr. A. Aziz Advocate who in that case happened to be appearing for the sellers (Khopra Mills). The decree passed by the trial Judge was however sustained. It was held that in the circumstances of the case the obligation of the buyers to apply for delivery should be taken to have been postponed until the last moment in view of the sellers' option. If the sellers did not exercise their option at all and allowed the entire period of the contract to elapse, then the responsibility was theirs and they should be made responsible for it. It was further held that the option enjoyed by the sellers in this case amounted to an express contract within the meaning of section 35 of the Sale of Goods Act.

25. The second case is also a Division Bench case and is Muhammad Anwar v. Muhammad (P L D 1960 Kar. 382). This was also a case of forward contract for the sale of textile to be imported from abroad. The contract provided for May shipment. The ship arrived in port on 29th June 1951, but the goods were not cleared until the 4th of August 1951. The buyer refused to take delivery on the ground that the goods were not offered within a reasonable time of the arrival of the ship. The seller sued the buyer for damages. The buyer made a counter‑claim for the refund of his deposit. The suit for the seller was dismissed and the counter‑claim of the buyer was decreed. On an appeal it was held by the Division Bench that section 35 of the Sale of Goods Act did not impose an obligation on the buyer for applying for delivery after breach of contract had been committed by the seller and that such a breach had been committed inasmuch as the goods were not cleared from the Customs within a reasonable time. The seller's appeal was accordingly dismissed.

26. The third case is a Special Bench decision by Qadeerud din, J., in three connected suits. The judgment is Abdul Shakoor v. Karachi Trading Co. (P L D 1962 Kar. 50). In all these three suits the contract provided that the goods were to to delivered from the godowns of the sellers. Answering the contention advanced on behalf of the sellers based upon section 35 of the Sale of Goods Act it was held that though there was no express contract having the effect of dispensing with the necessity of application for delivery yet in view of the express terms that the goods were to be delivered from the godowns of the sellers and not that of the importers it could not be said that the buyers had to apply for delivery before the goods were ready for delivery in the godowns of the sellers. It was further observed that the postponement of the application for delivery was indicated in these cases, because, according to the contract, it was the duty of the sellers to have the .goods ready for delivery in their godowns. It was further observed that an application for delivery had to be an effective application and if there was no relationship between the duty of the sellers to put the goods in a deliverable State and the application of the buyers, the buyers could apply for delivery hypothetically on the very date on which they agreed to buy the goods and then forget all about section 35 of the Sale of Goods Act. In view of these conclusions amongst others all the three suits for the refund of the deposit were decreed.

27. Section 35 of the Sale of Goods Act falls under Chapter IV of that Act which relates to the performance of the contract. It would, therefore, be useful to examine some of the provisions of this Chapter to get an idea of the context in which section 35 appears. Section 31 provides that it is the duty of the seller to deliver the goods and of the buyer to accept and pay for them in accordance with the terms of the contract of sale. Section 32 lays down that unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer shall be ready and willing to pay the price in exchange for possession of the goods. Sections 33 and 34 are not material for present purposes. Then comes section 35 which provides that apart from any express contract, the seller of the goods is not bound to deliver them until the buyer applies for delivery. The next section 36 contains the rules as to delivery and in the first part of it, it is stated that whether it is for the buyer to take possession of the goods or for the seller to send them to the buyer, is a question depending in each case on the contract, express or implied, between the parties. Apart from any such contract the goods sold are to be delivered at the place at which they are at the time of the agreement to sell, or, if not then in existence, at the place at which they are manufactured or produced.

28. The general principles with regard to performance of reciprocal promises are contained in sections 51 to 57 of the Contract Act. It will be sufficient for present purposes to refer only to sections 51, 52 and

54. Section 51 provides that when a contract consists of reciprocal promises to be simultaneously performed no promissor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise. Section 52 relates to the order of performance of such promises and lays down that where the order of performance of the reciprocal promises is not expressly fixed by the contract they shall be performed in that order which the nature of the transaction requires. Section 54 provides that where the performance of a reciprocal promise cannot be claimed till the other has been performed and if the promisor of the promise last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal promise. I have only mentioned the portion which is material for the present purposes.

29. I shall now revert to the terms of the contract and the facts of this suit. The contract (Exh. 6) contains an agreement of sale of Japanese cotton piece goods which were to be imported by the sellers by June/July shipment. The price payable by the buyers was ex‑godown of the sellers and the payment of the remaining 90% of the price was cash against delivery of goods. This delivery was to be made ex the sellers godown. The delivery of these goods could not, therefore, be enforced until these goods had been imported, cleared from the custom and brought to the sellers' godown. It was the duty of the sellers to deliver the goods and of the buyers to accept and pay for them. The sellers had to be ready and willing to give possession of the goods and the buyers to pay the price thereof in exchange for possession. Therefore, if the sellers failed to import the goods or failed to clear them and bring them to their godowns they could not claim to be ready and willing to give possession and in that event the corresponding obligation of the buyers would not arise. In the present case, the sellers had imported the goods and cleared them and brought them to their godowns and informed the buyers about it and asked them to take delivery. The buyers said that they were not bound to take delivery because the sellers had failed to clear the goods within a reasonable time after they had been imported and the sellers were already in breach. The contention of the sellers, however, is that the buyers had failed to perform the statutory duty imposed upon them for making an application for delivery, and that being so they are out of Court so far their suit for refund of deposit is concerned. I shall now record my conclusions on this point.

30. Section 35 clearly imposes a duty upon the buyer to apply for delivery apart from any express contract. The substitution of the words "express contract" for the words "special promise" as they occurred in section 93 of the Contract Act was plainly intended to exclude any implied stipulation. This express contract must refer to delivery in order to displace the statutory liability of the buyers. If there is no such express contract the consequences of section 35 must follow. The important question which, however, arises is as to at what point of time should such an application be made. That clearly must depend upon the terms of the contract and the nature of the transaction in each case, assuming of course that in the meantime there has been no breach on the part of the seller. In the present case, having regard to the terms of the contract and the nature of the transaction the proper time for the buyers to apply for delivery would be after they had been informed that the goods had been cleared. In the Privy Council case referred to above it was recognised that the obligation of the buyer to apply may be postponed. It is true, it was said that the buyer would have to apply on the elapse of a reasonable time to enable the goods to be procured by the seller from the mills. In the present case, however, the goods were to be imported from abroad and according to the usage of the trade, which is not in dispute, the sellers had to inform the buyers that the goods had been cleared and brought to the godowns. This is clear from the evidence of the defendants' own witness, the broker and from the fact that as soon as the goods came into the godowns the defendants did inform the plaintiffs by their letter dated 24th November 1951. The question that then arises is whether the buyers were released of their obligation to apply for delivery on account of unreasonable delay by the sellers in the clearance of the goods. I tried very hard to find an answer to this question in the negative, but I must confess that I did not succeed. That the period of three months or for that matter of one month and twenty‑three days would mean an unreasonable delay, cannot be seriously questioned in the absence of any evidence whatever that some abnormal situation arose with regard to the clearance of these goods. Mr. Sohail had, in his argument, said that as it had become clear from the attitude of the buyers that they were not going to take delivery of the goods, the sellers were in difficulty and, therefore, they did not clear the goods earlier. But there is no evidence to that effect. On the contrary it was clearly the case of the sellers in the correspondence as also in the pleadings that there was no unreasonable delay and the goods were cleared within a reasonable time. This cannot be accepted. It may be possible in a given case for the seller to say. "I had properly imported the goods, the ship or ships duly arrived, the goods had been off loaded, but the market had considerably gone down and my buyers for that or some other reason were neither ready nor willing to take delivery. I was thus in difficulty and I, therefore, took time to pay the duty and tax and clear the goods. How can these buyers accuse me of delay when they themselves were not ready and willing to pay and lift the goods." If such stand is taken it will have to be examined. The readiness of the buyer will have to be investigated. The buyer would be put to proof. But no such plea was taken in this case. Therefore, upon the pleas and the facts of the present case the question whether the buyers were relieved of their obligation to apply for delivery must be E answered in the affirmative. It was a part of the sellers' obliga tion to clear the goods within a reasonable time and inform the buyers of it. When they failed to do so the buyers were relieved of their reciprocal obligation and the sellers could not claim its performance.

31. The question whether the application for delivery is an effective one which has been referred to in some of the cases cited above, I must respectfully point out, does not arise in such a case. That question would properly arise when a buyer is accused of breach upon the ground that he was not ready and willing to perform his part of the contract.

32. It was, however, pointed out on behalf of the defendants that the plaintiffs had been raising all kinds of false excuses to avoid the taking of delivery and had adopted this attitude as soon as they had been informed that the goods had been shipped. From this it was urged that this ground of unreasonable delay taken by the buyers was not a bona fide one and should not be countenanced. There is no doubt that the plaintiffs' objection with regard to the shipment of the goods by two steamers was ill‑founded as I have already held. It may well be that the plaintiffs were finding excuses to avoid the taking of delivery because the market had gone down by 30 %. The question, however, is that if they raised some ground which was false, are 'F they necessarily precluded from raising an objection which was correct and well‑founded. It seems to me that they could not be so precluded. It was held by Sir D. F. Mullah in the case of Steel Bros. & Co. Ltd. v. Dayal Khatao & Co. (A I R 1924 Bom. 247) that‑ "a buyer who rejects goods on a wrong ground is not thereby precluded from relying on a valid ground which in fact exists. Thus a buyer who refuses to accept further deliveries on the ground that his sub‑purchaser would not take them owing to previous commitments is not precluded from proving at the trial of the action that the goods were not of the contract description."

33. In view of my conclusions my finding on issues 4 and 6 is that the defendants did not clear the contracted goods within a reasonable time and were, therefore, in breach. On the additional issue my finding is that the plaintiffs are not disentitled from claiming the refund of the deposit.

34. Issue No. 7 is also answered accordingly.

35. In view of these findings it is not necessary to examine in any detail the questions which are the subject‑matter of issues 5 and

9. However, if my findings on issues 4 and 6 and the additional issue were not adverse to the defendants I would have had no hesitation in holding that the defendants were entitled to a decree on their counter‑claim upon the basis of difference between market rate and the contract rate. This difference, as claimed by the defendants, has been abundantly proved by the market reports which have been produced and deposed to in this case and also upon the evidence of the broker that the market had gone down by 30 %.

36. In view of my findings I decree the plaintiffs' claim only for the amount of the deposit, that is Rs. 18,633.

37. This is not a fit case for the grant of any interest to the plaintiffs either before or after the filing of the suit or of any costs. The plaintiffs' conduct in attempting to repudiate the contract in all probability because of the sharp falls in the market does not entitle them to any costs of the suit or interest. That part of the claim is accordingly rejected. There shall be a decree only for Rs. 18,

633. K.B.A Suit decreed.