1980 PLP 249 (CLC)

I must also refer to an earlier Division Bench judgment of the same Court, delivered almost two years earlier than the above‑cited cases, by Inamullah and S. A. Haq, JJ. (as their Lordships then were) in Dr. Muhammad Rafiquddin and another v. Federation of Pakistan (P L D 1960 Kar. 506). In this case Dr. Muhammad Rafiquddin and his Guarantor had executed bond and guarantee respectively for payment of the foreign exchange amount spent on the training of Dr. Muhammad Rafiquddin in England and it was agreed that in case of the Doctor's failure to join the service of the Central Government in accordance with the terms of his bond, Dr. Muhammad Rafiquddin and his Guarantor would become liable ‑to repay to the Government all moneys etc. spent on his training with interest. Following rule 177 at page 914' of Dicey's Conflict of Laws, 7th Edition by

1. H. C. Morris, 1958) and Ottoman Bank, Nicosia v. Dascalo poulas (A 1 R 1935 P C 39) and' two other decisions immediately noticed hereinafter, it was observed at page 511 of the report :‑ The cause of action hay arisen to the plaintiffs because of the fact that the condition ire 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 which Article 68 in the Ist Schedule after the period for limitation starts to run in such a case when the condition is broken. In other words in such a case the relevant date is 1st May, 1950 on which date 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 T lb.=9‑4‑

3. The sterling part of the debt must, therefore, be converted into Pakistani currency at this rate." Reference also be had to the judgment of this Court in Mst. Khurshid Jamul v. Muhammad Asghar Qureshi (P L D 1956 Sind 47). It was a case for recovery of dower debt contracted in India before devaluation of Pakistani Rupee. It was held that the debt was payment at the rate of exchange on the date when the debt became due that is, at the time of divorce pronounced and not at the rate prevailing on the date of judgment. Same principle has been followed in India in Medhavji Visratn 1hacker and others v. Ramniklal Vadilal and other (A 1 R 1923 Bom. 437) wherein the contention that the rate of exchange should be how to be that prevailing on the date of foreign judgment sued was accepted. The same principle was followed in Param Sukh v. Ram Daval (I L R 8 All. 650) and Ishwardas v. Mir Aimuddin Khan (1881 P 1 40). I may also here refer to two decisions of Calcutta High Court in Dakhina Mohan Roy Chowdhry v. Mohan Roy Chowdhry ((1861) L R 23 Cal. 357) and Muhammad Abdul Hayee v. Gajraj Sahai (1 L R 25 Cal. 283). In the first mentioned case whic&was followed in .t a second case it was observed as follows :‑ "Section 610 seems to us to allow the amount expressed in sterling in the order of their Lordships of the Privy Council to be converted into rupees according to the rate of exchange for the time being fixed by the Secretary of Staten for India in Council, the amount expressed in the order of the Privy Council being described as the amount so payable and to be estimated accord ing to that rate. The words "for the time being" on which the Judges of the Allahabad Court rely, seem to us to have reference only to the time at which the ,order of the Privy Council was passed. It would, moreover, be contrary to the usual rule in such matters if the amount due under a decree were to be left uncertain, and, indeed, if it were left to the option of the decree‑holder to determine by a rate of exchange favourable to him to obtain a larger amount of rupees then would be due under the order as originally passed. Moreover, it seems to us that the object of this clause of section 610 would be lost if, on construction expressed by the Allahabad Court, a decree‑holder, instead of obtaining the money due to him in rupees, the currency of this country in which the decree is executed, were practically to obtain in sterling in India the amount at the time of execution that might be due. It seems rather to have been the object of the law that the amount stated in sterling in the order should be at once convertible into Indian Currency at the rate of exchange than allowed by the highest authorities in England. We have also been referred to the case of Lakhpatty Thakoorani v. Leelanund Singh (2 C L R 323). " The facts are not sufficiently stated in that case to satisfy us that it is in point 610 was considered also refer to the view taken by the Rangoon High Court in Fleming & Co. (A I R 1923 Rang. 265). In this case Robin g had held that the slate at which damages are to be calculated is the date of the breach and exchange is to be taken for the purposes of converting the amount in English Currency into rupees is the date on which under the agreement the money was to be paid and on which a breach occurred by its not being paid. Before I examine the case‑law from English Jurisdiction, may first refer to the principles stated by certain eminent ‑Jurists, on the issue under consideration. Dicey in his book entitled, The Conflict of Laws, 9th Edition (1973) at pages 877‑95, in Rules 169 to 174 has stated the principles with regard to payment of debt expressed in foreign currency. Here I may refer to two rules only. The first principle what is generally known as the Nominalistic principle is contained in rule 169 and is as follows "Rule 169.‑A debt expressed in the currency of any country involves an obligation to pay the nominal amount of the debt in whatever is legal tender at the time of payment according to the law of the country in the currency of which the debt is ex pressed (lex monetate), irrespective of any fluctuations which may have occurred in the value of that currency in terms of sterling of any other currency, of gold, or of any commodities between the time when the debt was incurred and the time of payment (Principle of Nominalism). If damages are to be calculated in terms of a given currency, arty fluctuations in the value of that currency which may have occurred after the event giving rise to the claim for damages (breach of contract, tort) must be disregarded." The other relevant rule is Rule 174 which reads :‑ "Rule 174 (1).‑An English Court cannot give judgment for the payment of an amount in foreign currency. A debt which is expressed and damages which are calculated in a foreign currency must therefore be converted into sterling for the purposes of litigation in England, irrespective of the place at which they are payable and irrespective of the law governing the substance of the obligation. (2) For the 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 , (Reference is made) to Re : United Railways of Havana and Regla Warehouses Ltd. 1961 A C 1007, Lloyd Royal Beige v. Louis Dreyfus& Co. (1927) 27 I L R 288 (C. A.), Madeleine Vionnet et Cie v. Wills (1940) I K B 72 (CA), Cumming v. Landon Bullion Co. Ltd. (1952) 1 K B 327 (C A), Re : British American Continental Bank Credit General Liegeois Claim (1922) 2 . Ch. 148. (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. (Reference is made to DI Ferdinando v. Simon, Smits & Co. (1920) 3 K. B. 409 (C A), Bain v. Field (1920) 5 L. I. L. R. 16 (C A) ; Re British American Continental Bank Ltd. Lissar & Rosenkranz's Claim (1923) 1 Ch. 276 (C. A) ; Ottoman Bank v. Chakarian (1930) A. C. 277 (P C) ; Barry v. Van den Hurk (1920) 2 K B 709 ; Lebeaupin v. Cripin (1920) 2 K B 714 ; Re British American Continental Bank Ltd. Golzieher and Penso's Claim (1922) 2 Ch. 575, Mehmet Dogan Bey v. G. G. Abderi Ltd. (1951) 2 K B 405 ; McDonald v. Wells (1931) 45 C L R 506 ; The decisions in Kirsch v. Allen, Harding & Co. (1920) 123 L T 106 and Cohn v. Boulken (1920) 36 T L R 767 were overruled in the Di Ferdinando case ; (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 (d) expenses incurred and remuneration earned by the salvor of a ship must be converted into sterling with reference to the rate of exchange prevailing on the day * when the salvage services terminated." I may also refer to and re‑produce herein below some passages from Cheshire's Private International Law, 9th Edition, .(1974) pp. 704‑706 wherein the learned Jurist clearly states the law on the issue under consideration as obtaining in England till the time the 9th Edition was prepared. The passages are "Again, the view taken in England, though not shared by several foreign countries, is that an English Court cannot order pay ment except in English currency." ' "The learned Author quotes "Whatever sum is ordered to be paid, whether for principal, interest or damages, must be expressed in English money, or such order cannot be enforced by the ordinary writs of execution " He proceeds to opine "On the other hand, an arbitral award may be made in a foreign currency." "If an action is brought in England to recover a debt payable in foreign currency or to recover damages for the breach of a foreign contract, or for a foreign tort where the damages are fixed the amount of English judgment must be based on the quantity of English sterling that would be required to purchase in England at the ruling rate of exchange the amount of foreign currency due. There was formerly a controversy whether the rate of exchange prevailing at the date of wrong or at the date of judgment must be followed in making this conversion from foreign to English Currency. The date chosen may be of great importance to the parties in view of the violent fluctuations of the rate of exchange that not infrequently occur in the modern world. It is now settled that the relevant date of the wrong. (See Re United Railways of Havana and Regla Warehouses Ltd.) 1961 A C 1007. The extent of the loss for which the plaintiff is entitled to compensation falls to be determined at the date when it was suffered, not at the date when the judgment happens to be delivered." The learned author quotes from s. s. Celia v.. s. s. Volturno (1) "If the date taken be that note of the tort but of the judg ment, it is giving the Plaintiff not damages for the tort, but damages also for the postponement of the payment of those damages until the date of the judgment. If such later damages can tie recovered, as under circumstances they may be if the defendant improperly postpones payment, they would be re covered in the form of interest. They would be damages not for the original tort, but for another and a subsequent wrongful act." "This rule applies not only to .an action for tort but also to an action for breach of contract, or for the recovery of a liquidated debt or for an account, or . for the non‑payment of a promissory note or a bill of exchange or for salvage claim, or for the enforcement of an arbitral award made in a foreign currency." Now. I may refer to some of the case which have direct bearing on the issue. I may first refer to following opinion of Lord Eldon, L . C. in Cash v. Kennion ((1905) 11 Ves. 314=32 E R 1109 (1110)), at pp. 1109‑1110 "I cannot bring myself to doubt, that where a man agrees to pay 1001bs. in London upon the 1st of January, he ought to have that sum there upon that day. If he fails in that contract, wherever the creditor sues him, the law of that country ought to give him just as much as he would have had, if the contract had been performed. Now I would refer to a decision of the House of Lords in s. s. Colia v. s. s. Volturno ((19211 2 A C 544). Although this is a case of damages but the principle laid down in this case has been followed in the sub sequent cases involving payment of debt expressed in foreign currency but payable in the local currency. In this case following an earlier case in Di Ferdinando v. Simon, Smits & Co. which was ‑‑affirmed by the Court of Appeal, it was held by Lord Buckmaster Lord Summer, Lord Parmoor and Lord Wrenbury, Lord Carson dissenting, that the proper date for ascertaining the rate of exchange for the purpose of converting the amount payable into English currency was the date at which the detention occurred. Here I may refer to some of the obser vations made in the decision which are quite illuminating. Lord Buckmaster at page 551 of the report observed ,'The final authorities upon this matter are fortunately far from ambiguous, Roche, J. in Kirsch & Co. v. Allen Harding Qc Co. j (25 Com. Cas. 63) decided that the rate of exchange should be taken as the present time, meaning no doubt the date of judg ment : but in a later decision of Di Ferdinando v. Simon, Smits & Co. (1920) 2 K B 704,which was an action for breach of contract to carry goods from London to Italy and for conver sion, the learned Judge held that the proper measure of damages was the value of the goods at the date when they should have arrived in Italy. He found the value in Italian lire and con verted the sum into English currency at the rate of exchange on that date. This judgment was upheld by the Court of Appeal, (1920) 3 K B 409, Bailhache,

1. In Barry v. den Hurk (1920 2 K B 709) also fixed the date for conversion as the date when the damages were properly measured, and McCardie, J. in Lebeaupin Crispin & Co. (1910) 2 K B 714, decided the same thing." "There is consequently a very formidable body of opinion in recent decisions against. the appellants' contention, and the only authority to which they can refer in their support is the American case of Maiburg v. Marburg (26 Mad. 8) decided in 1866. There does not appear to have been any consideration of the question in the Supreme Court of .he United States, and their Lordships are deprived of the assistance which would have .been afforded had the matter been the subject of argument before that tribunal. The principle underlying the decision in the Maryland case appears largely to be due to the consideration of text‑books on International Law. In one sense the case undoubtedly affects International matters, but it does not necessarily follow that it involves consideration of international law. The real question must depend upon the true effect of a judgment in one country relating to damages that are measured in terms or a foreign currency, and into this international relations do not necessarily enter. Disputes similar to that in the present case could easily' arise between the British subjects out of a purely British contract where the measure of damages was originally expressed in terms of a foreign currency, in such a case the English Court could and ought to measure the damages at the proper date, and then at that date convert the foreign exchange into English currency. There can be no difference in the principle when one of the litigation is not a British subject." Lord Summer at page 558 of the report reasoned :‑‑ "Finally it was urged that exchanging lire with sterling at the date of the judgment was the best way of eliminating speculative elements, and had the advantage of ensuring that in no case would a judgment creditor get more than the exact sum, to which lie was entitled. Fluctuations in foreign exchanges inevitably introduce a speculative element into all transactions and affairs, and, unless the parties themselves have provided for this by some contract, the law must apply the same principles as if they had remained stable. Waiting to convert the currency till the date of judgment only adds the uncertainty of exchange to the uncertainty of the law's delays. The result may favour one side or the other, and there is no answer to this except that already discussed‑namely, that the claimant's right is exclusively a right to lire, and would result in a judgment for lire, if only an English Court was, so to speak, competent to express itself in Italian. This is a mere assumption. After all the Court is‑in‑English Court and in theory decides the right as at the time when it arises, and does so in plain English." Lord Parmoor observed :‑ "The necessity for transferring into English money damages as certained in a foreign currency arises in the fact that the Courts of this country have no jurisdiction to order payment of money except in English currency. Considerations which are irrelevant in the ascertainment of the amount of damage are irrelevant in fixing a rate of transfer, and 1 agree in the judgment of Hill, J., as confirmed by the Court of Appeal. In truth the risk of a subsequent fluctuation in the rate of exchange is a risk which the parties themselves respectively incur. In its incidence it may, in any particular case either mitigate or enhance the amount which, under a stable condition of exchange would be payable to the injured party, but in itself it cannot affect the ascertainment of damages." The next case which I think, I should refer to is the Privy Council's decision in Ottoman Bank. Nicosia v. Dascalopoulos (AIR1935PC39). 1t was a case from Cyprus which rules that respondent's pension was to b.; calculated on the basis of Turkish gold pounds as he was entitled to under the terms of his employment. He was therefore entitled to a monthly pension in Cyprus currency of a sum really equivalent to the amount of Turkish gold pounds to which he would be entitled. The syprus currency was to be calculated according to the rate of exchange prevailing at the date when each installment of the pension became due. The third important case which I would refer to is again a case of the House of Lords but relates to question of payment of debt expressed in foreign currency but sued for in England, and is known as Re : United Railways of Hawana d Regla Warehouses Ltd. (1961AC1007). In this case it was clearly held that the provable sum in dollars was to be converted into sterling at the rates of exchange prevailing at the respective dates when the several sums owing by the U. Company to the trustee fell duo and were not paid. I may here quote from the opinion of Viscount Simonds it pp. 1044‑1045 of the report :.‑. "I have spoken of authority ancient and modern, and have given your Lordships an example of ancient authority. Let me pass over more than three hundred years and come at once to a case decided in 1943. In Syndic. in Bankuptcy of Salim' Nasrullair rhoury v. Khawat (1943) A C 507 the material question was at what rate according to the law of Palestine, which was conceded for this purpose to be the same as English law, should a suet of 2,000 gold 'Turkish pounds payable at Haifa be converted into local (i.e. Palestine) currency. I venture to quote emmensively from a, Judgment of the Judicial Committee of the Privy Council which was delivered by Lord Wright. I asked : At what dates must the rate of ex charge be calculated ? There can Their Lord slips apprehend, be now no doubt as to the English law can this point. It is true that different views have been taken a different times and by different systems of law. 1r,:Aeed, them were at cast four different (alternative) rules which might he adopted. The rate of exchange right be determines as at the date at. Which payment was due, or at the date of actual payment, or at the date of the commencement of proceedings to enforce payment, or at the date of judgment. English law has adopted the first rule. not only in regard to obligations to pay a sign certain at a particular date, but also in regard to obligations the breach of which sounds in damages, as for an ordinary breach of contract, and also in regard to the satisfaction of damages for a wrongful act or tort," (See (1943) A C 507 at pp. 512 and 513). Then, after citing the following words of Lord Summer from Celia v. s. s. Yalurno :‑ "The agreed numbers of lire are only part of the foreign language in which the Court is informed of the damage sustained, and, like the rest of the foreign evidence, must be translated into a English. Being a part of the description and definition of the damage, this evidence as to lire must be understood with reference to the time when the damage accrues, which it is used to describe." The judgment proceeds :‑ "This can be applied directly to a case where the damage claimed arises from a failure to pay a sum in foreign currency, like the Turkish gold pounds here. It is true that Lord Summer does not deal specifically with and seems to reserve the question of what is the rule where there is a contractual obligation for the payment of fixed or calculable sums in a foreign place and (their Lordships would prefer or) in a local currency. He does, however, observe (15 Asp. M L C 378) that: Waiting to convert the currency till the date of judgment only adds the uncertainty of exchange to the uncertainty of the law's delays". Lord Buckmaster (15 Asp. M L C 375) rejects summarily the idea that the date of the writ or of the commencement of the action is the proper date. His view, in their Lordships opinion, is summed up by his statement that, in regard to damages which have been "assessed in a foreign currency the judgment here, which must be expressed in sterling, must be based on the amount required to convert this currency into sterling at the date when the measure was properly made, and the subsequent fluctuation of exchange, one way or the other, ought not to be taken into account." And also quote from Lord Reid at pages 1052‑53 of the report :‑‑ "Really the only practicable choice would seem to be between converting at the date of breach and converting at the date of raising the action in England. The latter alternative might perhaps, be preferable, and it was in fact adopted by the United States Supreme Court in 1926 in Deutsche Bank v. Humphrey 272 U S

517. But the rate at the date of raising the action might be very different from the rate at the date of payment. Indeed, the objections to taking it are not very much less than the objections to taking the rate at the date of breach. Moreover, 1 doubt whether, in view of the great intricacy of some commercial transactions, it would be practicable to have two possible dates for conversion according to the nature of the contract. It would, 1 think, be wrong to take the date of raising the action "in every case : to my mind, the date of breach is much better in The simple cast of an English contract where the parties are in England and one fails to deliver foreign currency which he has contracted to deliver. So even if this were still an open question. I would have to come to the conclusion that in every case where a plaintiff sues for a debt due in a foreign currency, that debt should be converted .into sterling at the rate of exchange current when the debt fell due. That rule may in some cases be artificial, it may even be unjust, but it has been accepted for a long time, it is clear and certain, and no other rule could be relied on to produce a more just result indeed, no other rule is really practic e able." I should not omit to quote here from the observations of Lord Denning at pages 1070‑71 of the report. He observed :‑ "It is worth noticing that, as we look upon sterling, so also do the Courts of the State of New York look upon the dollar. They have, in believe the rule that a claim for debt or damages in foreign money must be converted into dollars at the rate of exchange prevailing at the date of the breach. In this respect the New York Courts follow their own course rather than the decision of the Supreme Court of the United States of America, and I think we should' do likewise. It is better suited to a commercial community. Any other rule would mean that the sum payable would depend on the delays of parties or of Courts. That cannot be right. And I would point out that it is often open to creditor or debtor to safeguard himself from any adverse consequences of the rule. Take the case where sterling depriciate . For instance, a debt is payable in dollars in the United States, it is unpaid, and ‑afterwards sterling depreciate:. The creditor can, after devaluation, bring an action in the United States and recover judgment in dollars. He can then sue in England on that United States judgment and the rate of exchange will be taken not at the date of the original contract debt, but at the date of the United States judgment: see Scott v. Bevan, (1831) 2 B & Ad. 78 and section 2 (3) of Foreign Judgments (Reciprocal Enforcement) Act, 1933." Take next the case where the foreign currency depreciates : for instance, when a debt is payable in francs in France, it is unpaid and afterwards francs depreciate. The creditor may bring an action in England but the debtor can forestall it by paying the debt in France in depreciated francs ; and then, when the debtor is sued in ‑England, he can claim that he has discharged the debt by the proper law of the contract: see Societe des Hotels Ls Touquet Paris Plages v. Cummings (1922) 1 K B 451 : T L R 221 (C A)." "In this case the trust company did not take any steps in Cuba or the United States to get judgment for rentals in dollars. I take it there were good reasons for this : so that this is the only country in which it can get redress. But coming here, it must accept the rule of our law that we can only give judgment in sterling, and at sterling calculated at the rate of exchange when the rentals should have been paid" ..................The rates of exchange for this proportion must be the rates ruling when the rentals accrued due when the trust company receives the amount so calculated it will have received a sum which in the eye of our law is full a is fact no the claim for entire interest ; and it should receive no More. no matter how matter is framed. It is true that, when the trust company wishes to turn the sum back into dollars, it may find that it has not enough dollars to pay the certificate holders in full : but that cannot be helped There are always risks incident to foreign investment. One of the risks is that the lender :nay have to go to another country to recover his money ; and when he dues so he must recover in the currency of that country, and not in that of his own. It is for risks such as these that he stipulates for a rate of interest ; and his disappointment at the rate of exchange will, I hope be mitigated by the substantial interest which he will receive." Then, I may ,refer to Re Russian Commercial and Industrial Bank ((1955) 1 All E R 75). do this case the facts were that Russian Commercial and Indus trial Bank was incorporated in Russia in 1890, established in 1911 a branch in London. In or about December, 1917, the bank was dissolved under the laws of the Union ox; Soviet socialist Republics, but continued business in London Unit, February 3, 1922, a Petition was presented for its compulsory winding in England. On October 24, 1922, an order was made for the compulsory winding up often Bank, for many years prior to the winding up bad a current account, with the Bank at the London branch, and he proved in the winding up for a balance of sutra 36,430 roubles due to him as at July, 1, 1921. For the purposes of proof it was, necessary to convert the sum in roubles into sterling and the question arose at what date the conversion should be effected. In this case. it was observed by Wynn Parry, J., at page 77 of the report its follows :‑‑‑‑ "I turn, therefore, to consider the substantial question which arises, as at what date is the conversion to be effect The first propositions which counsel for the applicant put forward was that in a winding up by this Court a proof for a debt expressed in foreign currency must be for a sum in sterling converted as at the date when the debt became due. I agree with counsel that this proposition is established by the authorities, which he cited. First there is the judgment of P. O. Lawrence J., in Re : British American Continental Bank Ltd. Credit General Liegeois Claim (1922) 2 Ch. 589, where he reviewed the prior authorities. As I understand his judgment, he is to be taken as having stated the rule, as a rule of general application, that on a claim in the winding up of a company in England for a debt due from the company to the claimant in foreign currency the correct date on which that debt ought to be converted into sterling for the purpose of ascertaining the mount for which the claimant ought to be admitted as a creditor, is the date when the debt became due. This decision wag approved and followed by the Court of Appeal in Madeleine Vionnet et cie v. Wills (1939) 4 All E R 1:3G." He further observed at page 78 of the report as follows :‑‑ "Counsel for the Liquidator contended, however, that a gloss had been made on the rule by the Court of Appeal in the recent case of Cummings v. London Bullion Co. Ltd. (1952) I All E R

383. As I read that case, the Court of Appeal expressly recognised the general rule, which I have stated above, but felt compelled to choose a date different from the date when the debt became due, because of the construction which they placed on the Exchange Control Act, 1947, S. 33. 1 cannot, therefore, regard this case as in any way impinging on the general rule. In the present case. I find no circumstance which should militate against its application. 1, therefore, hold that the date as at which the sum in roubles should be converted into sterling is the date when they became payable to Mr. Ronassen." Lastly, I may refer to a decision of the Court of Appeal in England in the Teh Hu. ((1970) Probate 106 ). In this case facts were in February 1967 Japanese salvage contras. To salved in which was owned by a Panamanian Company, under a Lloyd's standard form of salvage agreement. By the terms of the agreement the salvor's remuneration was to be fixed by arbitration in London. In November, 1970, sterling was devalued by 14 per cent The arbitration was held in 1968. The Salvor's original award was f69,t?07 In January, 1969, the appeal arbitrator held that the devaluation of sterling could be taken into account but reduced the award to 45,000 upon the basis that it was not right to do so. On a special case stated, Brandon, J. held that a devaluation of the. pound occurring after the termination of the salvage services was not a relevant factor in assessing the award. While dismissing the appeal from the decision of Brandon J., the Court of Appeal (Lord Denning :M. R. dissenting) held that the general rule of English law that the amount for which a judgment was entered was not to be affected by any change in the value of sterling after the date when the cause of action accrued applied to salvage cases. The devaluation of sterling between the date of the termination of the salvage services and the date of the award could not therefore be taken into account in fixing the amount of the award. , It was however, held by Lord Denning, M_ R. that the maritime law as to salvage is a peculiarly equitable jurisdiction seeping to do justice to the salvors and the owners of the ship and cargo saved. The common law rule for debt or damages giving judgment in pound sterling at a rate or exchange which is taken at the date when the cause of action accrued requires modification and should not be extended to English maritime law or to arbitration under the Lloyds standard form of salvage agreement. On the basis of the opinion expressed by the jurists and the cases noticed herein above it seems clear that in an action in whatever form in court in this country for the recovery of a debt payable in foreign currency the amount of judgment and order must be expressed in Pakistani Rupees, and, that, unless the relative values of the respective currencies are fixed by statute or some authority binding the Pakistani Court or by the agreement of the litigants, the amount of the judgment or the order of Court in this country must b‑ based on the quantity of Pakistani Rupees which one would have to pay here to obtain in the market the amount of the debt payable in foreign currency delivered at the appointed place of payment, i. e. the amount payable according to the rate of exchange. It seems plain that this mode of computing the value of foreign currency in Pakistani Rupee, and thus converting the one currency into the other, is based upon damages for the breach of contract to deliver the commodity bargained for the appointed time and place, and if this is so, it follows that the date as of which that value must be ascertained is the date of the breach, and not the date of the judgment. The American view taken in Die Deutsche Bank riliable Nurnberg v. Charles Franklin Humphrey ((1926) 272 U S 517) that in an action in the United States to recover damages for failure of a German Bank, to return on demand, a deposit payable ,4n marks, the relevant amount in marks must be trans lated into dollar4 as of the time the suit is brought, and not when the demand is made, was not followed by the Supreme Court of Pakistan in S. M. Hvnif Limited v. Central Bank of India Limited, or by Muhammad Yaqub Ali, J (as his Lordship then was) in the matter of Khanewal Oil Mills Limitied. Further, the American view was not followed even by the House of Lords (see the opinion of Lord Reid in s. s. Selia v. s. s. Volturno. Moreover, the decision of the American Supreme Court was a majority decision of five Judges as against four dissentient opinions. The other judgment which could be cited in support of the view is Soziere Des Hotels le Touguet Paris‑Plage v. Cummings ((1922) 1 K B 451). But in that case there was an undertaking to pay a debt on the Ist December, 1914. The debt had been incurred in France and the amount was settled in France. The suit was brought in England, and it was therefore, necessary to arrive at a proper equivalent in English Currency. The rate of exchange prevailing between the two countries from the 31st December, 1914 when the debt became due was adopted, and it was held by Avory, J., that and not the rate at the date of the judgment was the proper rate. That case was taken up on appeal, but the only point considered was whether the payment that had been made by the debtor in France after the suit had been filed amounted to accord and satisfac tion of the debt. On that point the judgment of Avory, J. was reversed but the date on which the rate of exchange was to be taken was left untouched. Now, I would take ‑up the contention of Mr. Khalid Anwar, Advocate. Mr. Khalid Anwar relying on the provisions of Article 1 clause (4) tend clause 8(b) of the contract submitted that the defendants were liable to repay the debt at the rate of exchange calculated at the highest selling rate of Marks (highest amount of rupees for Deutsche Marks) quoted by authorised dealers of foreign exchange in Pakistan on the date of repayment. He emphasised the words "on the date of repayment" used in clauses (4) and (8) of Article 1 of the contract and argued that by using these words the parties contemplated that the debt would be paid at the rate of exchange on the date of repayment and not on the dates when each of the 16 instalments became due or when in accordance with the terms of the contract the whole amount became due and payable. Now if this argument is accepted then the defendant, or the plaintiff could fix the date or dates as the case may be, of repayment or the date enforcing the repayment according to their own respective choices and that could not be the intention of the parties. Besides, it would make the amount of debt uncertain and uncertainable till the debt is paid. Then, would it not leave the determination of the amount of debt to the fluctua tion in rate of exchange between the two currencies for an indefinite time. Further, on default of the defendants in payment of dues if the plaintiff enforces the payment of the due installments or the amount due through Court action then what would be the material date of which rate of exchange between the two currencies would be taken ? The .date of action, or the date of decree, or the date when the execution of the decree is sought, or when the decree is actually executed ? Therefore, the rule laid down in the cases cited herein before apart from the American view, in the absence of any other provision in the contract and accept where action could be brought under law expressing dues in foreign currency and decree could be passed in that currency, is that the material date for calculating the amount of debt in local currency would be that date on which each instalment of the entire debt became due and this rule is enshrined in the principle that the parties should be put in the position that the contract was performed on the due date. Mr. Khalid Anwar also relied upon the provisions of clause 5 of Article VI of the contract where under on default of the defendant in payment of instalments or breach of any terms thereof if the plaintiff declares the loan due and payable immediately, it has the right to charge premium at the rate of 3 per cent per annum on the amount of loan recalled for the period from the date of such recall to the stipulated dates of repayment and also the right to require the defendants a cash deposit or bank guarantee to cover the exchange risk for the full tenure of the loan, and argued that these pro visions show that the exchange risk continued till the debt was paid. This argument is also without substance. 1n fact the right to charge premium at the rate of 3 per cent. per annum on the amount of the loan recalled for the above‑mentioned period and the other provision relied upon show that the material dates or date are or is when the instalments of the whole amount become due and payable as per contract for the parties contemp lated to compensate the plaintiff for any loss cause due to change in exchange rate upto the stipulated dates of repayment of the instalments or before full tenure of the loan in case the whole amount was recalled earlier for any of the reasons mentioned in clause (2) of Article VI of the contract, by allowing the plaintiff to charge a premium at the rate of 3 per cent per annum on the amount of loan recalled for the period from the date of such recall to the stipulated date of repayment. Indeed the contract further awards to the plaintiff commission at the rate of 1/4 of 1 % per annum on the principal amount of the loan withdrawn and out standing from time to tim3 to cover the exchange risk. The fact is that the plaintiff hats included the amount of premium in its claim in the suit. According to the contract, as amended, the debt was payable in years in sixteen equal semi annual instalments commencing from 1‑1‑196 and ending on 1‑7‑1974. The Pakistani rupee was devalued on or about 15‑5‑1972. On that date only five instalments had not become due. According to the law laid down in the cases cited hereinbefore, the amounts of the instalments that became due before the above‑mentioned P date of devaluation of Pakistani Rupee have to be calculated at the rate of exchange between the Rupee and Deutsche Mark prevailing on the dates when each instalment became due. However, the plaintiff have much before the date of devaluation of the Rupee, by the notice dated 29‑8‑1970 (Exh. 11), in accordance with the provisions of hub clause (a) dg (b) of clause (2) of Article VI of the Contract bad notified the defendant 1 that due to default committed by it in payment of the instalments, the entire amount of the loan had become due and payable immediately and had accordingly, called upon the defendant, to pay the same. Thus the entire amount of the loan bad become due and payable much before the date of devaluation. The devaluation would, therefore, not make any difference so far as the liability of the defendants is concerned. However, it was submitted by Mr. Khalid Anwar that the plaintiff had recalled this loan provisionally calculating the dues at the rate of exchange then pre vailing but subject to change. In my opinion this condition would also not make any difference for unless the debt could be claimed at the rate of exchange prevailing on the date of actual payment, the debt Has pay able at the rate of exchange prevailing on the dates or date when the debt became due and the plaintiff at its own option according to the terms of the contract, had required the defendant I to repay the entire amount of the loan within three weeks of the receipt of notice dated 29.8‑1979 (Exh. 11). Thus the whole debt had become due much before the date of the devaluation. Suppose in response to the notice the defendants had repaid the entire loan amount before the date of devaluation of Pakistani rupee. Could the plaintiff still claim the difference arising out of the devaluation ? The answer could certainly be in the negative. In my opinion once the plaintiff had recalled the entire loan amount it had only the right to charge premium at the rate of 30% per annum on the amount of the loan recalled for the. period from the date of such, recall to‑the stipulated dates of repayment of the remaining instalments, Indeed the plaintiff has claimed the same in the suit. Let me examine the case in the light of American view. The present action claiming Rs. 11,50;415.75 was brought on 5‑! 1‑1971. This claim included the amount of those instalments also which had not but for enforcement of the right under the provisions of sub‑clauses (a) & (h) of clause 2 of Article V1 of the contract, become due. Even if the American view taken in Defaults,‑he Bank v. Hamphrey could bee followed that would not have helped the plaintiff for Pakistani rupee was devalued in the year 1972 touch after the present action was brought. Now I may mention the last submission of Mr. Khaiid Anwar. He submitted that the Court had allowed the plaintiff, subsequent to the devaluation, to increase the amount of Rs. 11,50,415.75 claimed in the suit to Rs. 38, 96 374.50 by amending the plaint and therefore this amount cannot now be reduced. Rut this amendment in my view, is of no con sequence for firstly, it does not estop the defendant from questioning the enhanced amount more so when the amendment was allowed subject to all just exceptions ; secondly it does not confer any right on the plaintiff except to establish that it is entitled to a decree for the enhanced amount and that the plaintiff in my opinion, has failed to establish. 1, therefore, hold that the debt is to be calculated at the rate of excharge prevailing on the date when each instalment became due and. payable and in respect of those instalments which had become due to account of declaration made by the plaintiff under clause 2 of Article V of the contract by the notice Exh. 11 on the expiry of the period men tioned in the notice. Issue No. 2.‑ 1, therefore, pass a preliminary decree in Form 5‑A in Appendix D to the First Schedule to the Code of Civil Procedure for sale of the proper ties mentioned in Schedules 11‑A and li‑B. 1 declare the amount due on mortgage as on 5‑11‑1971 was Rs. 11,50,415.75. The plaintiff shall also be entitled to interest at 9# per cent. per annum from the date of the suit till the date of payment anti costs of the suit to be assessed on the afore said amount. The defendants are allowed three months time to pay the amount due under this decree. M.Y M, Suit decreed.