P L D 1958 Karachi 686 (PLP)

in reply to this letter, the plaintiff‑respondent wrote on the 24th of November 1958, vide Exh. D,'6 and conveyed its readiness to deliver the goods at the control price :‑‑‑ "Provided that your said clients pa‑y to us the difference between the contracted rate and the control rote, which is by all means (which is in every, respect) their liability owing to, their failure to take delivery of the goods within a reasonable time of the materialisation of the above sale." The plaintiff‑respondent then put an end to the exchange of views, and sent a debit note Etch. D/8 (= Exh. P/L) dated the 12th of December 1958. The material part of it is as follows; "We debited your account as follows; Re : Our sale to you dated 3‑10‑58 of 471 bags rapeseeds at Rs. 471 per bag of Mds. 2 and seers 3 Gross i.e. Rs. 38 per maund of cleaned goods. Mds. Srs. 942 39 Net at Rs. 38 per Md., Rs. 35,832‑15‑6 942 39 Net at Rs. 2544‑0 per Md. (invoiced back on 6‑12‑58). Rs. 23,810‑ 2.0

3. The next step which the plaintiff‑respondent took was to file a suit for the recovery of Rs. 12,022‑13‑6 as damages. The defendant‑appellant submitted its written statement to contest the claim, and the above‑mentioned issues were framed can the pleadings.

4. No oral evidence was produced by the parties who went on, trial mainly on the basis of the above‑'mentioned documents. The trial Court gave its judgment on the 18th of January 1960, and came to the conclusion that the contract had become frustrated. It, therefore, dismissed the suit.

5. The plaintiff‑appellant went in appeal, which was accepted on the 5th of June 1963, the conclusion of the First appellate Court was as follows: "The suit is decreed as prayed for i. e., the decree for Rs. 12,022‑13‑6 with costs and running interest at 6 % per annum, from ‑the date of suit till realization. Respondent to bear costs of the appellant in this Court."' The defendant‑respondent, as mentioned above, has come in Second Appeal to this Court. .

6. We have heard counsel... for, the parties. 'Mr. Jan Muhammad Dawood, appearing for the appellant said that the main question for consideration in these proceedings was as to whether property in the goods had passed to the defendant appellant or not, and, if it did, then before or after the 10th of November 1958. The conclusion of the trial Court was that it did, not pass because of the frustration "that was caused by virtue of Martial Law Regulation No. 42, but the First Appellate Court has held it did 'pass in terms of section 20 of the Sale of Goods Act.

7. Mr. Jan Muhammad Dawood has questioned the conclusion of the First Appellate Court by contending that one of the conditions of the contract was that the goods should be weighed before they were delivered. In support of this, he referred to the letter of the. plaintiff‑respondent dated the 30th of October 1959 in which a complaint was made that the defendant‑appellant was postponing the weighment of the goods. Additionally, counsel referred to the Debit note, Exh. D/8, in which the amount due has been calculated on the basis of the quantity of rapeseed, and not on the number of bags. He also referred to the letter of the plaintiff‑respondent dated the 3rd of November 1958 in which the, price is mentioned per bag, but of a specified weight, which, according to counsel, indicated that so long as the agreed weight was not established, the price could not be calculated with reference to the number of bags. He also relied on Exh. P/1, which is a letter, fr6m the plaintiff respondent in which it is stated that 471 bags "out of our total stock already stands sold to you." Counsel contended that this letter shows that the goods intended to be sold had not been separated from the total stock ; therefore, there were not specific goods in terms of section 20 of the Sale of Goods Act.

8. The above contentions of counsel are effectively answered by the averment made by the plaintiff‑respondent in para: 2 of the plaint (and accepted by the defendant‑appellant in paragraph 3) of its written statement that the goods had been purchased and not merely agreed to be purchased by the defendant appellant. Additionally, in Exh. P/E it is mentioned that the quality of the goods was inspected and approved by the buyers. The First Appellate Court has come to the, conclu sion that the goods were "specific and approved." The mere fact that the plaintiff respondent complained about procrastination of weighment by the defendant‑appellant and calculated the price in the debit note with reference to weight does not change .the essential nature of the transaction. As explained by their Lordships of the Privy Council in Hoe Kim Seing v. Maung Ba Chit (AIR 1935 P C 182), it is sometimes in the interest of the buyers to satisfy themselves by weighing the goods. Such satisfaction has nothing to do with the passing of property in the goods. In this case the goods remained with the seller after they were approved and sold; therefore, as contended by Mr. Sayeed A. Sheikh, the necessity arose of satisfying the buyers that they had not been tempered with during the custody.

9. For the above reasons, we are of the view that the property in the goods had passed to the defendant‑appellant in terms of section 20 of the Sale of Goods Act, on the date on which the transaction was made namely, the 3rd of October 1958.

10. The above discussion disposes of the contention which was advanced by Mr. Jan Muhammad Dawood but one aspect of it needs further reference. That aspect is the application of proper law for calculating the amount of damages. In this respect the provisions which are possibly applicable are sections 54, 55 and 56 of the Sale of Goods Act.

11. In order to determine as to which is the proper section, it may be kept in mind that the rights of an unpaid seller are enumerated in section 46 of the Act. It is as follows: "

46. Unpaid seller's rights.‑(1) Subject to the provisions of this Act and of any law for the time being in force, notwithstanding that the property in the goods may have passed to ,the buyer, the unpaid seller of goods, as such, has by implication of law‑ (a) a lien on the goods, for the price while he is in possession of them ; (b) in case of the insolvency of the buyer right of stopping the goods in transit after he has parted with the possess‑ion of them s (c) a right of resale as limited by this Act. (2) Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co‑extensive with his rights of lien and stoppage in transit where the property has passed to the buyer."

12. In this case, we are not concerned with subsection (1)(b) which deals with insolvency. The exercise of lien mentioned in subsection (1)(a) is to be made in terms of section 54 of the Act ; but in this we are not concerned with such exercise either. Re‑sale which is mentioned in subsection (1)(c) can take place in those cases in which property in the goods has not passed as well as in those in which it has passed. In these proceedings, vice are not concerned with those cases in which property does not pass to the buyer. The cases in which it does pass, are governed by subsection (1) of section 55 as well as by section 56 of the Act: Subsection (1) of section 55 is as follows: "55(1). Suit for price.‑Where under a contract of sale the ‑property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the, goods according to the terms of the contract, the seller may sue him for the price of the goods." The above provision does not apply to these proceedings, because the plaintiff ‑respondent has not sued for the recovery of the price of the goods, but has claimed damages. This case falls under sections 56 of the Act, which is as follows;. "

56. Damages for nova‑acceptance.‑Where the buyer wrong fully neglects or refuses to accept and pay for goods, the seller may sue him for damages for non‑acceptance." According to the above provision, the seller is entitled to claim damages for non‑acceptance of the goods from the buyer to whom the property in the goods has passed.

13. It' would be proper to refer here to a sentence from Aggarawala which occurs at page Eli of his book "The Indian Sale of Goods Act," Fifth Edition, 1959. It is as follows: "Where the property has passed the seller may sue, either for price under section ‑55(l) or for damages for non -acceptance or can exercise his right of lien for the unpaid price and resale of the goods and recover loss as damages under section 54." The case of the plaintiff‑respondent falls in the second category. In such circumstances, the measure of damages is the difference between the contract price and the market price prevailing ova the date on which non‑acceptance takes place. The non-acceptance in this case cannot be said to have taken place before the 21st of November 1958, on which date the defendant‑appellant wrote the letter Exh. P/J, and offered to take delivery of .the goods at the control price. The control rates were fixed, as mentioned above, on the 10th of November 1958. According to those rates, rapeseed was to be sold at the rate of Rs. 25‑4‑0 per maund, which means that the price of a bag weighing 2 maunds and 2 seers was Rs. 51-12‑

0. This was, therefore, the market price which prevailed on the 21st of November 1958. The contract price was Rs. 76 per bag of two maunds and two seers of rapeseed. This means that the plaintiff ‑respondent has suffered a loss at the rate of Rs. 24-4‑0 per bag. On this basis, the total loss which the plaintiff respondent has suffered comes to Rs. 11,421‑120‑. But the claim made in the plaint is for Rs. 12,022‑13‑6, which is to be reduced to Rs. 11,421‑12‑0, on which plaintiff respondent is entitled to, get interest at the rate of 6% per annum from the date of suit until recovery. Mr. Jan Muhammad Dawood says that the bigger amount has been recovered by execution of the decree, which means that the defendant‑appellant is entitled to get the diference refunded.

14. Before concluding this judgment, we may mention that Mr. Jan Muhammad Dawood contended that the main question for decision in this appeal has been as to whether property in the goods had passed to the buyer or not, but no issue was framed on this point ; therefore, the discussion which took place in the trial Court, the First Appellate Court and in this Court is without all the material before the Court that could possibly be, produced, if such an issue had been struck: We inquired from learn‑d counsel as to what such material could be, to which he replied that the rules of the Karachi Grain Merchants Association and oral evidence could be produced, We do not think that oral evidence can have much value, particularly because contracts are to be interpreted or the basis of their own terms, and because oral evidence was deliberately not produced by the parties. Additionally, the suit was filed in 1959, and now we are in the beginning of 1965. In these circumstances, we do not think that it will be proper to frame an issue and to have evidence recorded on it.

15. Our overall conclusion is that the appeal stands dismissed with costs; subject to the arithmetical variation mentioned in paragraph 13 and recognition of the right of the defendant‑respondent to recover the difference by adopting a suitable procedure. A E. Appeal dismissed.