P L D 1962 (W (PLP)

QADEERUDDIN AHMED, J.‑The above‑mentioned three suits will be disposed of by this judgment. The plaintiff is common in all of them and the material allegations made by the plaintiff are also common. The defendants are not common but their defenses are common. The plaintiff entered into three agreements with the defendants in April 1951. He wanted to purchase Japanese White Shirting " 16000" at the rate of Rs. 79/4 per piece of 36 x 42 yards, which the defendants had purchased from Messrs Khan Bahadur H. M. Habibullah & Co. who had opened a Letter of Credit No. 4919 through Netherlands Trading Society, Karachi for Importing those goods by June/July 1951 shipment. The contracts in all the three suits are Exh.

6. The clause relating to delivery is important. In the contract which is the subject‑matter of suit No. 396 of 1954 that clause is as follows:‑ "Delivery ; against cash payment after the arrival of the goods in our godown." In the other contracts which are the subject‑matter of suits Nos. 397 of 1954 and 402 of 1954 that Clause is as follows:‑ "Delivery; as and when the goods are cleared from the Customs after the arrival of the steamer Ex‑Sellers' godown, against full payment of the value of the goods." In Suits No. 396 of 1954 and 397 of 1954, the plaintiff had contracted to purchase from the defendant 700 pieces and deposited Rs. 4,

175. In Suit No. 402 of 1954 the plaintiff had contracted to purchase from the defendants 500 pieces and deposited Rs. 3,000.

2. The case of the plaintiff in all the suits as disclosed in evidence is that the goods arrived and were cleared by Messrs Khan Bahadur H. M. Habibullah & Co. but the defendants did not take their delivery and were not in a position to deliver them to the plaintiff against payment. He several times went to the defendants to take the goods but they were not in the godowns of the defendants. He was not prepared to pay their price to the defendants and then wait for their delivery to be taken by himself or by' the defendants from Messrs Khan Bahadur H. M. Habibullah & Co. He, therefore, called upon the defendants in writing to refund the money that was deposited by him, which they declined to do. The breach of contracts in these circums tances, according to him was on the part of the defendants, and he is entitled to recover the amounts deposited by him with them.

3. The case of the defendants is that they had informed the plaintiff of the names of the ships by which the goods were coming but the plaintiff did not apply to them for delivery. He was not in a position to do so because he was in jail in conse quence of his prosecution. Moreover, the market had gone down at the time of the performance of the contracts, therefore the plaintiff did not intend to perform the contract. Moreover, they were entitled to recover the balance of the price from the plaintiff at the time of the performance of the contracts and leave him to take delivery of the goods from the importers, Messrs. Khan Bahadur H. M. Habibullah & Co., or to wait after making the payment to enable them to get the goods from the importers so that they could deliver them to the plaintiff. In these circumstances, according to them, breach of the contracts was committed by the plaintiff.

4. In view of the above facts I do not consider the five Issues, that were framed in the cases to be adequate and re‑settle them to be as follows:‑ (1) Whether the plaintiff was not in a position to take delivery of the goods because of his arrest ? (2) Whether the market had gone down and, therefore, the plaintiff did not intend to perform the contracts ? (3) Whether the defendants were entitled to recover the balance of the price from the plaintiff without having the goods ready for delivery in their own godowns ? (4) Whether the plaintiff was bound in the circumstances of this case to apply for delivery in terms of section 35 of the Sale of Goods Act. (5) General.

5. These issues do not strictly arise from the pleadings of the parties which are particularly meagre as compared to the defenses disclosed in the evidence. I have framed them taking a liberal view of the pleadings, because the value of the suits, is small and it was fair to treat them with the same liberality as' is considered to be fair in respect of pleadings in subordinate Courts. Strict adherence to the pleadings would have debarred the major part of the evidence that was allowed in the interests of justice. I may mention here that Mr. A. Aziz Advocate who has conducted the cases on behalf of all the defendants requested me at the commencement of the hearing of these suits that they should be transferred to the District Court to be tried there, but counsel for the plaintiff Informed me that they had been originally instituted in the District Court but were transferred to this Court by consent of the parties on applications made to this Court.

6. Counsel for the parties then requested that these suits should be tried together because the evidence of the plaintiff was bound to be common and common questions of law were involved in them. I have, however, recorded the evidence separa tely, because there was hardly any saving of time in recording the evidence together in these cases, The plaintiff only was to be examined and the defendants wanted to examine one witness each. The names and dates had to be stated by the witnesses separately and the documents were also separate. After recording the evidence and proof of documents, I am in a position to dispose of the three suits by one judgment. I shall take up the above issues one by one.

7. Issue No. L‑The goods arrived by s. s. "Orna" and s. s. "Pantakotta". s. s. "Orna" arrived in August 1951 but the month of the arrival of s. s. "Pantakotta" has not been brought on record. The plaintiff has admitted his detention in jail for about 2 weeks in November 1951. There is no other evidence of his arrest or the duration for which he was in jail. He has stated that his shop was open and was attended by his brother, manager and a typist. It is true that a letter dated the 4th of December 1951 (Exh. 16) sent by the defendant in Suit No. 402 of 1954 was returned by the Postal Department with the following endorsements on the envelope (Exh. 15): "(Addressee) searched but has not been found as yet. (Dated 5‑12‑1951)., Further : The addressee is out of Karachi and there is no hope of his return. (Dated the 6th of December 1951)." Mr. Aziz argued that these endorsements prove that the plaintiff was in jail on these dates and that there was nobody at his shop to receive the letter. The conclusion, according to counsel is that the plaintiff was not in a position to take delivery of the goods because of his arrest. These conclusion cannot be reached because the endorsements are too Insufficient as evidence to prove that the plaintiff was in jail. Moreover, if he was in jail in the month of December, there is no evidence to establish that the duration was longer than 15 days. Moreover, the contents of the endorsements do not appeal to me as convincing. The statement contained in the letter of them that there was no hope of the return of the plaintiff is obviously farfetched. Moreover, the contents of the letter (Exh. 16) show that the defendant in Suit No. 402 of 1954 had merely Intimated the plaintiff, like the defendants in the other suits, that the goods had been cleared by Messrs Khan Bahadur H. M. Habibullah & Co. and were in their godown. This is not an appropriate communication to support the argument that the plaintiff was not in a position to perform his part of the contract, because the mere fact that the goods were in the godown of the importer could not impose the duty on the plaintiff to take their delivery unless issue No. 3 is decided in favour of the defendants. At best the decision of this issue can be taken to be dependent on the decision of issue No. 3.

8. Issue No. 2.‑Comparative market rates have not been proved but presuming that the market had gone down, one cannot say that the necessary conclusion is that the plaintiff committed the breach of the contracts. The plaintiff' has stated that he was prepared to take delivery of the goods if the defen dants had performed their part of the contracts because he was financially in a position to pay for the goods irrespective of loss. There is no suggestion that he was in financial difficul ties. Fall In prices can be a reason for breach of contract and can support the evidence of such breach but cannot by itself prove the breach, because conscientious businessmen would 6 discharge their contractual and legal obligations irrespective of loss. There can be no doubt that the plaintiff was not bound to perform his part of the contract and suffer loss if he could take advantage of the inability of the defendants to perform their part of the contracts. The correct conclusion in my view, on the meagre evidence on this issue, should be that the market had gone down but there is no proof that the plaintiff did not intend to perform his part of the contract. On the contrary he has relied from the beginning on the Inability of the defendants to perform their part of the contracts and consequent absence of his liability to perform his part of the contracts. The Issue is, therefore, decided against the defendants.

9. Issue No 3.‑The clause relating to delivery reproduced above in Suit No. 396 of 1954 is clearly against the defendant. According to it the goods had to be delivered by the defendant from its own godown. The defendant's witness in this suit has stated as follows: "We did not take delivery of the goods from Messrs Habibullah & Co. because the plaintiff never in response to our letter called upon the defendant to make payment of the price. The presence of the goods in the godown of Messrs Habibullah & Co. was as good as in our godown." This stand of the defendant is in direct contradiction with the delivery clause of the contract.

10. In the delivery clauses reproduced above of the contracts in the other suits the words are "ex‑Sellers' godown". The defen dant's witness in Suit No. 402 of 1954 has tried to interprets these words in favour of the defendant as follows: "There was no question of the goods coming to our godown, because our contract was ex‑Seller's godown, by which he meant that the goods were to be taken by the plaintiff from Messrs Habibullah & Co." This interpretation is wrong because if this was the true situation, the defendant would have used it for not taking delivery of the goods from Messrs Habibullah & Co. On the contrary the reason given by the same witness for the failure of the defendant to take is as follows: "We did not lift the goods from the godown of Messrs Habibullah & Co. because the market was going down and we did not want to take the risk of the goods being left on our hands if the plaintiff did not take them from us." In other words the defendant wanted to recover the price of the goods from the plaintiff first and then to perform its part of the contract, merely because the defendant wanted to protect itself from loss at a time when the market was falling.

11. This is clearer in the statement of the defendant's witness in Suit No. 397 of 1954. He has stated as follows "We had not taken delivery of the goods from Messrs Habib ullah & Co. We did not pay to our sellers because the plaintiff did not pay the price to us. . Messrs Habibullah & Co. have filed a suit against the defendant which is pending in this High Court."

12. The conclusion, therefore, is that the expression "ex -Seller's godown" which occurs in the contracts in Suits Nos. 397 of 1954 and 402 of 1954 refers to the godowns of the sellers of the plaintiff and not those of the sellers of the defendants. The defendants were bound to take delivery of the goods and to deliver them to the plaintiff from their own godowns but owing to the fall of the prices they did not want to perform their part of the contract and expected the plaintiff to pay the balance of price to them, so that afterwards they could either instruct the plaintiff to take delivery of the goods from their sellers or to let him wait until they were able to pay to their sellers and make the goods available in their godowns for delivery. This was a violation of the terms of the contract.

13. This was further inconsistent with the delivery clauses of the contracts wherein the defendants have undertaken to deliver the goods to the plaintiff against "cash payment" and "against full payment of the value of the goods". There is no provision in them that payment was to be received first and delivery could be deferred. Consequently payment and delivery are concurrent conditions in terms of section 32 of the Sale of Goods Act also. The issue is, therefore, decided against the defendants.

14. Issue No. 4.‑Under section 35 of the Sale of Goods Act "the seller of goods is not bound to deliver goods until the buyer applies for delivery" but this is subject to "any expressed contract". There is no expressed contract in this case having the effect of dispensing with the necessity of the application but it has been expressly provided that the goods were to be delivered from the godowns of the defendants. Can it be said in these circumstances that the plaintiff had to apply for delivery before the goods were ready for delivery in the godowns of the defen dants ? There is no mention of the time in section 35 at which the buyer has to apply for delivery. Therefore, the point of time at which the application is to be made must depend on the circums tances of each case and may be postponed if the facts indicate it. The possibility of postponement is contemplated in the judgment of the Privy Council in Nune Sivayya v. Maddu Ranganayakulu (AIR 1935 P C 67 at p. 70) as follows: "It is important to observe that section 93 (same as section 35) applies unless there is a special promise, which in their Lordship's 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." Postponement is indicated in the present cases because it was the duty of the defendants to have the goods ready for delivery in their godowns. If there was no relationship between the duty of the seller to put the goods in a deliverable state and the applica tion of the buyer, the buyer could apply for delivery hypothetically on the very date on which he agreed to buy the goods and forget all about section 35 of the Sale of Goods Act afterwards. Moreover, in those contracts in which the time of delivery is mentioned the buyer could argue that the contract itself was an application for delivery. But this is not correct. An application for delivery before the appropriate time is not contemplated by the provision of law, because the application contemplated by the law must be an effective application, which means that it should be accompanied with tender of price and, as pointed out by Pollock, A. J. C. in Mohanlal v. Gyaniram Agarwal (AIR 1935 Nag. 111) even with the arrangements for taking delivery of the goods. This cannot be done until the seller has the goods ready to be delivered. The appropriateness of time for making an effective application is not only for the benefit of the buyer but may be for the benefit of the seller also, as for instance when the seller is entitled to exercise an option. I may refer in this connection to the following passages from the judgment in Pakistan Khopra Mills v. Abdul Rashid Siddiki & Sons (P L D 1957 Kar. 781) to which I was a party ". . . . . the situation is that if the buyers had applied before the period of the option then the sellers could contend that the time of their option, of which they could not be deprived, had not yet arrived and therefore the application could not be an effective one. The same would have been true if they applied during the period of the option."

15. This aspect sometimes escapes notice because of the observations which have been correctly made in some judgments. Firm Ganesh Das Ishar Das v. Ramnath (A I R 1928 Lah. 20) wherein it was held that the duty of the seller to give notice of the arrival of the goods did not dispense with the duty of the buyer to apply for delivery. It is true that the performance of the duty by the seller of giving notice of the arrival of the goods does not dispense with the duty of the buyer (sic) to apply for delivery, but the seller cannot say that the buyer should make an effective applica tion for delivery before the goods are ready for delivery. Both of them have their own duties to perform as pointed out in the foot‑note (p) at p. 121 of Halsbury's Laws of England, Vol. 29 Second Edition: "The rule assumed and stated by text‑writers previously to the Act was that prima facie it is the duty of the buyer to take the goods, and that the seller's duty is fulfilled by his putting the goods at the disposal of the buyer at the place of delivery. There seems to be nothing in the wording of the Act to displace this rule."

16. The conclusion is that the defendants could not without having the goods ready for delivery in their own godowns expect the plaintiff to make effective applications under section 35 of the Sale of Goods Act for delivery. Counsel for the plaintiff) cited in Muhammad Anwar Bros. Ltd. v. Muhammad (P L D 1960 Kar. 382) in which the decision was that the buyer was discharged of the duty to apply for delivery because the seller had already committed a breach of the contract. In this case the facts do not establish breach of the contracts by the defendants in relation to the point of time at which the plaintiff was to apply for delivery. The situation is merely that the defendants did not, in terms of the contracts, have the goods available for delivery; therefore the plaintiff could not make effective applications for delivery. There is evidence that he made oral applications but I do not believe it. My conclusion is that the omission of the plaintiff in the circumstances of these cases does not constitute a valid defence against the claim of the plaintiff.

17. Mr. Aziz Advocate has sent three books after the conclusion of the arguments in support of the defendants' case. Alapaty Ramamoorthy v. Polisetti Satyanarayana (A I R 1958 A P 559) contains a detailed discussion of section 35 of the Sale of Goods Act but is not relevant for the present purposes. Firm Kanwar Bhan‑Sukha Nand v. Firm Ganpat Rai‑Ram Jiwan (A I R 1926 Lah. 318) contains the following observations . . it is not necessary for the plaintiff to prove that on the due date he had the goods actually in his possession. It is quite sufficient if he is able to prove that he had control over the requisite goods or that he had the capacity to deliver them to the purchaser when called upon to do so, in other words, that he was in a position to fulfil his part of the contract on the due date on a demand being made by the purchaser." In these cases the defendants were never in a position to deliver the goods from their godowns as undertaken by them and the reason established by the evidence is that they wanted to recover money from the plaintiff before paying for the goods which they had undertaken to sell to the plaintiff. Firm Ganesh Das‑Ishar Das v. Ramnath is also not helpful to the defendants in which the decision was that‑even where the contract provided that the buyers would take the goods on payment of the price as soon as the railway receipts and the invoice of the goods arrived, and the seller gave notice of the arrival, the buyers were still bound to apply for delivery. This judgment, appears to support the views which I have expressed above. In conclusion the issue is decided in favour of the plaintiff.

18. Issue No. S.‑It follows from the above discussion of the whole case that all the defenses have failed. The plaintiff should succeed because the defendants have been at no time in a position to deliver the goods against payments from their godowns. I accordingly decree the suits for refund of the deposited amounts with costs and interest at the rate of six percent per annum from the dates of the suits until payment. R. B. A. Suit decreed.