P L D 1960 (W (PLP)

3. The facts alleged by the plaintiff were admitted by the two defendant‑appellants, and the only major contention raised was that the items expressed in foreign currency were payable by the defendants at the current rate of exchange or the rate of exchange prevailing on the date when the refund was demanded by the plaintiff and not at the rate of exchange which was prevalent when the money was paid to Dr. Rafiquddin in the United Kingdom. The question about the liability to pay interest was also raised.

4. To appreciate appellants' contentions regarding the rate of exchange it is necessary to mention certain relevant dates and the rates of exchange pertaining thereto. The payments in sterling were made to appellant Rafiquddin from 28‑9‑48 to 17‑8‑49 and the rate of exchange during this period was 1 = Rs. 13‑5‑

3. The pound sterling was devalued on 19‑9‑1949 and the rate of exchange from that day became 1 =Rs. 9‑4‑

3. The Pakistani rupee was then devalued on 31‑7‑55, from which date the rate of exchange again reverted to the old rate namely 1 =Rs. 13‑5‑

3. The appellant Rafiquddin refused to join service on 1‑5‑50, and the refund of the money spent on him was demanded by Government on 26‑10‑

50. The suit was filed on 1st March 1954.

5. The learned Subordinate Judge has observed that : "The plaintiff spent Rs. 13‑5‑4 of his currency for each pound for supplying his (i.e. defendant's) needs abroad and, therefore, whatever be the rate of exchange later on, the plaintiff is entitled to get the currency spent by him." On this view of the matter the learned trial Judge passed a decree, converting the sterling items into Pakistani rupees at the rate of Rs. 13‑5‑

4. Mr. Azmatullah the learned counsel for the appellants has con tended before us that the correct principle to apply in a case of the present kind is to convert the foreign currency into the local currency at the rate prevailing on the date the payment becomes due. According to him, in the present case, there are three dates which may be considered alternatively as the dates on which the payment became due, or on which the cause of action arose. The first is 1‑5‑50 on which date the appellant Rafiquddin refused to join the service of the Central Government and thereby broke the condition of his bond. In the alternative the relevant date can be 26‑10‑50 on which the plaintiff demanded the refund of the moneys spent on Rafiquddin. Finally there is the date of the suit namely 1‑3‑

54. On all these three dates the prevailing rate of exchange was Rs. 9‑4‑3 and not 13‑5‑3.

6. The principle which should apply in a case of the present kind appears to us to be well stated in Rule 177 at page 914 of Dicey's Conflict of Laws (seventh edition by J. H. C. Morris, 1958). The relative portion of the rule may be reproduced with advantage "(2) For purpose of litigation in England ; (a) a debt expressed in a foreign currency must be converted into sterling with reference to the rate of exchange prevailing on the day when the debt was payable ; (b) damages for breach of contract must be converted into sterling with reference to the rate of exchange prevailing on the day when the contract was broken ; (c) damages for tort must be converted into sterling with reference to the rate of exchange prevailing on the day when the loss was incurred for which compensation is claimed."

7. The same principle has been enunciated in several authorities cited at the Bar by Mr. Azmatullah. For example, in Madhavji Visran Thacker v. , Ramniklal Vadilal (I L R Bom. 23, p. 487) which was a case of a claim resting on a judgment of the High Court in England, it was held : "that the rate of exchange to be taken should be the rate prevailing on the date of the judgment of the High Court in England, which gave the plaintiffs a cause of action for their suit in Bombay." It was observed that ‑ on the date on which the English High Court gave its judgment defen dants came under a legal obligation to pay the sums in question to the plaintiffs, and therefore that is the date for determining the applicable rate of exchange. Then in Ottoman Bank, Nicosia v. Dascalopoulos (AIR 1935 P C 39) while considering the same question with regard to the payment of pension of a bank employee whose pension was originally expressed in terms of Turkish gold pounds, but was payable to him in Cyprus the rule laid down by their Lordships was : "The Cyprus currency was to be calculated according to the rate of exchange prevailing at the date when each instalment of the pension became due." Finally in the Khursheed Jamal v. Muhammad Asghar (P L D 1956 Sind 47) a learned Judge sitting on the original civil side held that the rate of exchange applicable was that prevailing on the date the debt became due.

8. We consider that the rule is thus well established that in cases of payment of debts incurred or expressed in foreign currencies, and sought to be realised in the country of the debtor, the payment is to be made in national currency calculated at the rate of exchange prevailing on the date the debt became due. Now the question is when did it become due in the present case.

9. As already stated, the learned counsel for the appellants has indicated three alternative dates on which the debt can be said to have become due, but Mr. Castellino, the learned counsel appearing for the respondent, has contended that this is a case where the debt became due or the cause of action arose on the several dates on which the money was paid to or on behalf of the appellant Rafiquddin in the United Kingdom and to reinforce his argument he has referred us to Article 61 of the 1st Schedule of the Limitation Act which prescribes a limitation of 3 years in case of suits "for money payable to the plaintiff for money paid for the defendant", and the time from which period begins to run is "when the money is paid". It appears to the learned counsel that the plaintiff's suit in this case was for the recovery of money which the plaintiff had paid for the defendant in the United Kingdom and therefore it is clear from the language used in the Limitation Act that the cause of action arose to the plaintiff on the date the money was paid. That being so, Mr. Castellino contends that the debt clearly became due against the two appellants on dates prior to the devaluation of the British pound on 19‑9‑1949.

10. The contention raised by Mr. Castellino, however, conveniently overlooks the case set up by his client, namely, the case of a broken condition of a bond which is appropriately covered by Article 68 in the 1st Schedule of the Limitation Act. From the facts already stated in the earlier part of this judgment, which were taken from the plaint, it is clear that the appellant Rafiquddin and his surety became liable to refund the moneys spent by the Government only because Dr. Rafiquddin refused to join the service of the Central Government in accordance with the terms of his bond. In paras 2 and 3 of the plaint this position is made amply clear and it is stated in unambiguous terms that Dr. Rafiquddin and his surety became liable to repay to the plaintiff all moneys etc. with interest because of the refusal of Dr. Rafiquddin to report for duty on 1‑5‑50 as directed and thereby committing a breach of the bond given by him and his surety. In view of these admitted facts, there could be no doubt whatsoever as regards the nature of the plaintiff's claim in this case. The cause of action has arisen to the plaintiff because of the fact that the condition in the bond is broken by one of the defendants. It is' on this day that the debt became due to the plaintiff, and in accordance with Article 68 in the 1st Schedule of the Limitation Act the period for limitation starts to run in such a case when the condition is broken. In other words in the present case the relevant date is 1‑5‑50 on which dais the appellant Rafiquddin refused to join service and thus committed a breach of the relevant condition in the bond. This is the date which will govern the rate of exchange applicable for conversion of the sterling debt. On this date the rate of exchange was 1 = 9‑4‑

3. The sterling part of the debt must therefore be con verted into Pakistani currency at this rate.

11. As regards the rate of interest, Mr. Azmatullah raised an argument that the bond stipulates that the interest was to be calculated "at fixed Government rates then in force for Govern ment loans", but the plaintiff had failed to place on record any evidence to prove that 3% was the fixed Government rate, and therefore no interest should be charged in this case. It is clear that such an argument has no force. The bond clearly stipulates the payment of interest on the moneys due, and it is not contended that 3% is not the rate for Government loans. It was pointed out to the learned counsel that at the most it can be said that there has been a technical omission on the part of the plaintiff to place on record evidence to show that this is the rate applicable to Government loans, and this deficiency can either be made good by the Court taking judicial notice of this rate of interest or by directing further evidence to be recorded on this point. The learned counsel then conceded that the rate of interest at 3% per annum was appropriate and applicable in the case, but he made a further request that from the date of this suit to the date of payment, the same rate of interest may be continued, instead of raising the rate to 6%., in view of the fact that both the appellants bad admitted their liability from the very start, and were contesting only the question of the rate of exchange. We consider that the request is reasonable and should be accepted.

12. The result therefore is that the appeal succeeds to the extent that (a) The rate of exchange for converting sterling debt into its equivalent should be 9‑4‑3 instead of Rs. 13‑5‑3 ; and (b) That the rate of interest from the date of the suit to the date of payment should be 3% per annum. 1n the circumstances of the case there will be no order as to costs. R. M. A. Appeal accepted.