P L D 1962 (W (PLP)

WAHIDUDDIN AHMED, J.‑In this first appeal the appellants have attacked the judgment of Mr. Ahsanul Haq Qureshi, the then Additional District Judge, Karachi, in Civil Suit No. 283 of 1956 dated the 28th of April 1959 in so far as the claim of the appel lants for the recovery of Rs. 5,469 has been dismissed against the respondents. The appellants who are merchants of Karachi, under an agreement dated the 20th of June 1950 agreed to purchase from Messrs Home Textiles Company of Karachi or their agents or principals 12500 yards of "Overprints three or four colours, quality 2003, at 19.5 cents per yard F. O. B. Japan Port" plus their commission at 2% on C. I. F. value. The other terms of the contract were that the appellants would open a confirmed irrevocable letter of credit in favour of their suppliers the respon dents, a Japanese firm, by the 21st of June 1950, valid upto the end of August 1950 and expiring on the 1st of September 1950. The Karachi firm was sued as defendant No. 1 in the original suit before the learned trial Judge, but is not a party in this appeal. The appellant's case, however, is that in pursuance of the above mentioned contract, they opened an irrevocable letter of credit in favour of the respondents through Habib Bank, Limited, and it was duly accepted by the respondents. It is alleged by the appellants that by acceptance of this letter of credit the respon dents became liable for the performance of the contract entered into with Messrs Home Textiles Company. It is further alleged by the appellants that the goods in question, after the acceptance of the letter of credit, were shipped per "S. S. Vide‑Ke‑Maersk" and shipping documents namely the bill of lading and the invoice were duly forwarded by the respondents to Messrs Home Textiles Com pany of Karachi: The appellants were informed of this fact by the Karachi firm under letter dated the 15th of September 1950 and the documents of shipment, invoice etc. were forwarded by the Karachi firm to them under a letter dated the 27th of September 1950. Accordingly the goods in question duly arrived In Karachi but when the appellants approached the authorities concerned for taking delivery, the Customs Authorities informed them that they could not be delivered to them because the shipping agent's instructions were that they should be delivered to a party who produces the original invoice and bill of lading. The appellants alleged that the respondents and Messrs Home Textiles Company in collusion with each other have diverted the contracted goods to other parties because the market of the con tract goods about the time the steamer carrying the contract goods arrived at Karachi went very high and the respondents, in order to obtain undue advantage and profits, have committed breach of the contract. In view of this breach the plaintiffs in the above mentioned suit claimed damages in the sum of Rs. 5,469, both against Messrs Home Textiles Company and the respondents. The damages are claimed on the basis of the difference of the cost price of the goods in question namely Re. 1 per yard acid the market price namely Rs. 1‑7‑

0. The claim was resisted by both Messrs Home Textiles Com pany, defendant No. 1, and the respondents. In defence, Messrs Home Textiles pleaded that the contract in dispute was entered into on the basis of a written indent and they were acting as an intermediary, having been commissioned by the appellants to act and purchase the goods in question on their behalf as provided in Condition No. 1 of the Indent. They denied, therefore, their personal liability in the dispute arising out the indent in question. They further pleaded that the appellants were guilty of the breach of the contract because they did not agree to the transhipment of the goods via Singapore as required by the suppliers In view of the non‑availability of direct shipment. According to them the appel lants failed to extend the time of the letter of credit and to increase the same by 361 which they had agreed to do, in spite of repeated demands of defendant No. 1 at the instance of the Japanese firm, namely the respondents in this appeal. The suppliers acting upon the promise and assurance of the appellants shipped the goods in expectation that they would carry out their verbal assurances, but when it was found that neither the letter of credit was extended nor its amount was increased, they diverted the goods to another customer. They repudiated the allegations that they committed any breach of the contract on 6tb November 1950. They also denied the market rate on the date of the alleged breach and challenged the allegation that the appellants had suffered damages in the sum claimed by them or in any other sum. The respondents also resisted the suit. In defence they plead ed that they were not aware of the alleged contract between the appellants and Messrs Home Textiles Company. They further pleaded that Messrs Home Textiles by cable dated the 14th of June 1950 had placed at Osaka an order with them for the purchase of 10000 of printed cotton shirting Swatch No. 2003. This order was accepted by them by cable dated the 15th of June 1950 and a sale note was executed by them as seller and Messrs Home Textiles as purchasers. Under the sale note the payment was to be made at Osaka by an irrevocable letter of credit on presentation of shipping documents to the bank. Their case is that for the payment of the above‑mentioned goods number of letters of credit were opened in their favour and they shipped the goods on the instructions of Messrs Home Textiles. They admit ted that the appellant opened a letter of credit but denied that by its acceptance they had accepted a liability for the performance of the contract entered Into by Messrs Home Textiles with the appellants. According to them they were responsible to Messrs Home Textiles and under their instructions the goods were not delivered to the appellants. They further pleaded that the contract between them and Messrs Home Textiles was as buyers and sellers and there was no relationship of agent and principal between them. They further alleged that there was no privity of contract between them and the appellants and denied that they were the principals of Messrs Home Textiles. They also denied the allegation of collusion. In effect, the respondents denied their liability in the contract in question on the allegation that there was no privity of contract between them and the appellants. On these pleadings as many as twelve issues were framed in the trial Court. The most important issue before the learned Subordinate Court was about the relationship between the parties, whether the contract of the appellants with defendant No. 1 was as between principal and principal or whether defendant No. 1 was merely an intermediary or agent In the suit contract on behalf of the respondents. On this question the learned Subordinate Court, on the evidence produced before him, came to the conclusion that the contract between the appellants and defendant No. 1 was between principal and principal and there was no direct contract between the appellants and the respondents. In coming to this conclusion the learned Subordinate Judge observed as under:‑ "It appears strange that the plaintiff never wrote to the defendant No. 2 to confirm the said contract, which would have made the position quite clear. The defendant No. 2 denied that they bad accepted the letter of credit in the sense that they had become a party to the contract between the plaintiff and the defendant No.

1. The crux of the question is whether the defendant No. 1 acted as agent of defendant No.

2. It was argued on behalf of the plaintiff very vehemently that the defendant No. 1 gave himself out as agent of defendant No. 2 and that in the present case the plaintiff secured confirmation of the indent from defendant No. 2 verbally from their local office, which was situated close to the office of defendant No.

1. In view of the fact that the defendant No. 1 disappeared and never entered the witness box it is not easy to come to the conclusion that the defendant No. 1 was acting as agent of defendant No.

2. If it were so there should have been at least some correspondence between the plaintiff and defendant No. 2 prior to the non‑delivery of the contract goods to the plaintiff. The plaintiffs for the first time wrote to the defendant No. 2 when the delivery of the contract goods was not made to the plaintiff. My finding therefore is that the defendant No. 2 has not rendered himself liable for the performance of the contract in so far as the plaintiff was concerned and thus committed no breach of the contract," On these findings the learned Subordinate Judge dismissed the suit against the respondents. But decreed the suit against defendant No.

1. In decreeing the suit he came to the conclusion that defendant No. I committed breach of the contract and awarded the appellants damages in the sum of Rs. 5,469 with costs and Interest. The appellants have not impleaded in this appeal defend ant No. I as party but have attacked the Judgment of the learned Subordinate Court on the findings in favour of the respondents. Mr. Suleman Punja, the learned counsel for the appellants, has urged before us that the contract in this case was entered into on the basis of an indent and on the terms of the contract and other correspondence placed on the record it should have been held that the respondents were also liable to perform the contract in question. The learned counsel urged that the liability of the respondents not only can be gathered from the fact that the letter of credit opened by the appellants was accepted by them but also from the fact that the respondents after the acceptance of the letter of credit shipped the goods in the name of the appel lants, prepared the Invoice in their favour and delivered the necessary documents, for taking delivery from the Customs Authorities in pursuance of the aforesaid contract. He further contended that on the evidence led in the case it is proved beyond doubt that defendant No. 1 was acting In Karachi as the agent of the respondent and the contract in question was accepted orally by the representatives of the respondents working in their Karachi office. The question raised in this appeal has always been found by the Courts of law to be an intricate one. The legal position of indent merchants who import goods into this country has been the subject‑matter of lot of litigation. In some cases it is claimed that his relationship with the indentor is that of agent and in others his relationship is claimed to be as that of principal to principal. In some measure it is due to the fact that the persons engaged in this trade have very little regard for the significance of the language used in framing their contracts and the matter is further complicated because the indent business is secured in several alternative modes. Page, J. has considered this aspect of the question in the case of Holmes Wilson do Co. Ltd. v. Bata Kriso De (A I R 1927 Cal. 668). It will be useful to reproduce here his observations at page 677 of the report about the different modes in which this business is secured. He observed:‑ "When gods are ordered from abroad by a dealer under an indent at a price and rate of commission therein stated it is the duty of the merchant as agent for the dealer to buy the goods from the supplier upon the terms and conditions of the indent at the lowest price obtainable not exceeding the price set out in the indent. "The dealer received the supplier's invoice and the supplier draws upon the dealer for the price of the goods. In such a transaction the merchant acts throughout as the agent of the dealer, and is entitled to commission from the dealer at the indent rate. Owing to the unwillingness of foreign suppliers, however, to enter into direct relations for the supply of goods with bazar dealers this course of business, in which the merchant acts merely as a middleman in the transaction usually, is not resorted to and one or other of the following alternative methods of supply is followed. The merchant agrees as agent for the dealer to buy the goods from the supplier on the indent terms F. O. B. or C. I. F., the price being stated in the indent, but no commission being payable by the dealer. In that case, according to the usage of the trade, the parties are understood to agree that the merchant shall be entitled to obtain remunera tion by making an arrangement with the foreign supplier for the payment to the merchant of a return commission ; but the amount of this return commission does not concern the dealer, the rate of commission being fixed by agreement between the merchant and the supplier, and being paid by means of credit slips either at the time when the goods are supplied, or at a periodical adjustment of accounts as may be arranged. Under the alternative method of supply ii, which no commission Is payable by the dealer the dealer orders the goods to be imported by the merchant at a fixed price C. I. F. or F. O. B., and according to the usage of the trade the parties are understood to agree that the merchant may buy the goods on his own account from the foreign supplier without disclosing the dealer's name or acting as his agent, and then resell them at the Indent price to the dealer upon the terms of the Indent. Under this method the merchant obtains his remuneration by retaining the differ ence between the price at which he buys from the supplier and the indent price of the goods." But it is now well settled that in cases arising out of indent business the relationship between the various parties should be determined on the construction of the terms of the contract entered into between them. In the present case also, a, is usually the case in indent business, the appellants placed the order for the supply of the goods in question on a printed indent form. In order to appreciate the point before us the material portion of the indent (Exh. P/6) at page 51 is reproduced below. P. O. Box 919 "Indent No. HT/119 Karachi, 20th June 1950 I/We, the undersigned Haji Sultan Goawala & Sons, having my/our place of business at Saleh Muhammad Street, Karachi, (hereinafter called "the Buyers") hereby jointly and severally agree to purchase from H. T. Corporation or their agents or principals in Pakistan or any part of the world (hereinafter called "the Suppliers") the whole or any part of the goods here inafter mentioned at prices and on the terms and conditions specified below and on the reverse of this Indent the suppliers to intimate to me/us at the above address by letters or telegrams with . . . . . . days from the date herein whether this indent has been accepted or not‑ Suppliers and Manufacturers C. Itoh & Co. Ltd., 36, 2‑Chome, Honmachi, Higashiku, P. O. Box, No. 117, Osaka. Description of goods Overprints three or four colours. (Your Selection) Not given. Quality 2003. Quantity 12500 Yards (Twelve thousand and five hundred yds. a bt.). Price 19.5 per yard fob Japan port (Nineteen point five cents) plus our commission of 2% on C.I.F. value to be paid to us immediately on receipt of documents. Packing As usual. Shipment August Insurance Party will take themselves here. Destination Karachi. Payment A confirmed irrevocable letter of credit to be opened in favour of the above suppliers definitely on 21st June valid upto the end of August and expiring on 15th September. Broker's name Draft drawn at sight, partshipment allowed. Usman Dadabhai. Marking All Packages under this Indent to be marked as described. Credit No. 41942 for 510 through . . . . . Corporation. Remarks. If any Import Licence is required at the time of ship ment the buyers hereby agree to procure the same fail. Ing which the goods will be lying with the supplier at the sole risk and account of the buyers. The Indentors hereby admit that the terms and conditions specified above and on the reverse of this Indent have been fully explained to and understood by them and they hereby accept the same. Any writing in vernacular other than the Indentors' signature shall be of no effect. Haji Suleman Goawala & Sons. (Sd.) (Illegible), Signature of Indentors. Dated 20‑6‑

50. For the Home Textiles Corporation. (Sd.) M. H. Siddlq, Managing Director." Thus the printed form used in this case suggests several methods of securing business by the commission agent from an indentor the indentor, who is described as buyer could agree to purchase goods directly from the commission agent. He could also agree to purchase goods through the agent of the commission agent or his principals In Pakistan or any part of the world. But whatever may be the mode of purchase under this indent, the persons from whom the goods are to be purchased are described as suppliers. Then there is the u6ual term that the performance of the contract secured under it would depend on its acceptance by the suppliers concerned within a certain period. There are about twenty conditions printed on the reverse of the indent form, which apparently have been inserted with a view to meet the different situation arising from the indent. There are some terms which will be applicable only if the suppliers are the commission agents and there are other terms which will be applicable in those cases where the suppliers are some third parties. It is therefore quite obvious that the indent form used in this case can be utilised for business secured by the commission agents in different modes. There is however no difficulty in finding out the nature of the business secured. It can easily be gathered from the written or typed out terms incorporated in the indent. Thus, if the suppliers are the commission agents, their name should appear in the column of the suppliers. But if the suppliers are third parties, then in the column of suppliers the name of the third parties would appear. This seems to be clear from the terms of the indent under consideration. If that had not been the case, in the column of the suppliers in the body of the indent the name of the foreign suppliers alone would not appear but the name of the commission agent should have appeared. The view, which we have taken that in an Indent business the commission agent usually use compendious printed forms is also supported by the following observations of Page, J., in the above‑mentioned Calcutta case:‑‑ "Bearing in mind what I have already stated with respect to the indifference with which indent traders regard the wording of their contracts, it is not a matter of surprise that the custo mary form of indent commencing with the words: We/I, the undersigned request you to purchase yourself or through your agents on my/our account and risk are used by indent traders whichever method of supply they may employ, and whether according to the course of business the merchant is acting as a principal or as the agent of a dealer." It is in this light that we have to consider the relationship of the parties in the present case. In our opinion the fact that Messrs Itoh & Co. Ltd., Osaka, the respondent, were named in the column of suppliers and the further fact that in the column of mode of payment it was stated that "a confirmed irrevokable letter of credit to be opened in favour of the above suppliers definitely on 21st June valid up to the end of August and expiring on 15th September" are very significant circumstances to support the appellants' contention that defendant No. I namely Messrs Home Textiles Corporation were only acting as agent or intermediary between the appellants and the foreign suppliers in respect of the contract in question. The further fact that Messrs Home Textiles under the contract were only to charge 2% commission on C. I. F. value immediately on receipt of documents from the appellants strengthens this view. Mr. Suleman Punja, the learned counsel for the appellants, has further taken us through the entire evidence on the record to show that 1n pursuance of the above contract an irrevokable letter of credit was opened in favour of the appellants, that they accepted this letter of credit and thereafter shipped the goods in question in the name of the appellants and drew the invoice and insurance policy in their favour. These facts are amply proved. The appellants opened a letter of credit No. 41942 (Exh. P/7) on 29th June 1950, through Habib Bank Limited, Karachi in favour of the Chase National Bank of the City of New York, Osaka, for the benefit of the respondents in the sum of

510. This letter of credit was accepted by the respondents and was ultimately returned to the appellants under a telegram dated the 25th October 1950, at page 96‑C of the paper book. Exh. P/8 is an invoice dated the 10th of September 1950, in favour of the appellants of the goods in dispute. Bill of Lading No. K‑70 dated the 10th of September 1950, at page 68 further shows that the respondents shipped the goods in question to the appellants per "S. S. Videke Maersk." Exh. P/10 is the insurance policy of the goods in question in favour of the appellants. These documents were forwarded by Messrs Home Textiles to the appellants under letter dated 27th September 1950, at page 89 of the paper book. There is thus not the slightest doubt that the respondents not only accepted the letter of credit but also carried out the terms of the contract, shipped the goods, drew the invoice and performed all the necessary things for the supply of a the goods to the appellants. Mr. Punja also referred us to the evidence of P. W. 3 Haji Sulaiman, the appellant, to the effect that the respondents confirmed the indent obtained by Messrs Home Textiles Corpora tion, who were representing themselves as the agents of the respondents to the Karachi merchants.' The appellant's contention that the respondents' representa tives at Karachi were consulted before the indent in question was confirmed is borne out by the fact that Messrs Home Textiles Corporation consulted them before cancelling the contract in question. P. W. 3 Haji Suleman made a categorical statement that the indent in question was confirmed by the local office of the respondent. It is true that be did not possess any writing to that effect. Unfortunately in this case the respondents did not examine their representative who was working at the material time in their Karachi office. They only examined D. W. 1 Mr. Haryama, who admittedly was not working in Karachi in 1950 and who came to Karachi in 1952. This witness admitted that he had no personal knowledge of the facts of the case. He further admitted that in 1950 one Liaison Officer of defendant No. 2 was at Karachi, who had sample of goods and contacted local merchants. He stated that the Liaison Officer was merely a link whenever necessary between the local office and the customers. He admitted in cross‑examination that he had not seen the file of the transaction entered into with the appellants, which was in the Head Office at Japan. Although this witness was unable to give the came of the Liaison Officer working in Karachi in 1950, but the letter of Home Textiles Corporation (Exh. P/14) dated the 4th of October 1950, addressed to the respondents shows that the respondents had Mr. Fujimura and Ishibashi, two representa tives at Karachi in the year 1950. So the respondents have not produced the best evidence available in the case in order to explain under what circumstances the contract in question was entered into. Mr. Jan Muhammad Daud, the learned counsel for the respondents, has urged before us that there was no privity of contract between the appellants and the respondents and the respondents, therefore, could not be made liable under the indent in question. He urged that there is ample proof on the record to show that the respondents had direct dealings with Messrs Home 'textiles Corporation for the supply of certain goods. In support of his contention the learned counsel referred us to two documents Exhs. D/2 and D/I. Exh. D/2 is Sale Note No. 010 by the respon dents in favour of Home Textiles Corporation, Karachi, in respect of 10,0000 yards of printed cotton shirting "Beauty" Swatch 2003. Under this sale note the respondents agreed to supply to Home Textiles Corporation, Karachi, these goods at the rate of 19'5 cents per yard F. O. B. Japanese port. They agreed that these goods will be shipped in August 1951 and the mode of payment according to these documents was in sterling, draft at sight. Under the terms of the sale note Messrs Home Textiles Corpora tion were to open an irrevocable letter of credit within fifteen days of the entering of the sale note. Exh. D/1 is an acknow ledgement by Messrs Home Textiles Corporation dated nil of entering into the above transaction. The learned counsel further referred us to the invoice and other documents to show that it was on the basis of this sale note that the respondents supplied the goods in question and other gods to the parties in Karachi. It was, however, admitted by the learned counsel that this sale note was never brought to the notice of the appellants and was for the first time produced at the trial by D. W. 1 Mr. Haryama. This gentleman hid no personal knowledge of the transaction in question and it is very difficult for us to hold in the circumstances of the present case that this contract was really entered into between Horse Textiles Corporation and the respondents. In any case, the contract entered into between Home Textiles Corporation and the respondents having not been brought to the knowledge of the appellants could have no important bearing on the decision of the appeal. D. W. I Haryama, who produced this document is not a reliable witness because be even denied the fact that his firm at Osaka did not ship any goods in the name of the appellants, which is contrary to the facts proved on the record. The genuineness of this document is not above suspicion. It was further argued by respondent's counsel that mere acceptance of the letter of credit and the shipping of the goods or the drawing of the invoice cannot lead to the inference that there was a direct contract between the appellants and the respon dents. In support of his contention he relied on a Madras decision in M. V. Krishna Iyer & Sons v William C. Yille & Co. Ltd. (A I R 1927 Mad. 1150), but the facts of that case are distinguishable. In that case a suit was brought by an Indentor against a merchant of Glasgow for the return of certain amount paid as advance to the commission agent at Madras, who, it was alleged, acted an intermediary for supply of yellow metal sheets under an indent. The plaintiffs relied on a sale note by the Glasgow firm and on the fact that the advance amount had been remitted to them to prove that there was a direct contract between themselves and the Glasgow firm. But it was found that under the indent the plaintiff only offered to enter into a contract with the ultimate manufacturers or suppliers of the goods and not with the Glasgow firm and the sale note could not be referred to any offer from the indentor for creating a binding contract. Besides in that case the advance amount was not paid direct to the Glasgow firm and was held to have been paid to them In respect of concluded contract between the commission agent and the foreign firm. It was, in these circumstances, that it was observed as under: "We are of opinion that the plaintiffs have failed to establish that there was any contract relation between themselves and William C. Yille & Co. Ltd., which would enable to sue that firm for the moneys which they banded over to the Indian Trading Co. As between the Indian Trading Co. and William C. Yille & Co. Ltd., these moneys were paid by the Indian Trading Co. as their own moneys in discharge of their own debt and the fact that the ultimate source was the plaintiff has no effect upon the legal position of the parties." Thus it will be seen that this case can possibly have no bearing on the facts of the present case. Mr. Jan Muhammad Daud further relied on a Lahore decision in Fazal RAI v. The Imperial Chemical Company, Delhi (67 I C 157). This case is also distinguishable because it was found in it that the commission agent entered into the contract in question on his own behalf and not on behalf of the foreign firm. The commission agent was further found to be liable under section 230 (1) of the Contract Act. The present case is more in line with the Lahore case decided in Deoki Nandan & Sons v. Ram Lal Qulak & Lockwood Bros. (A I R 1923 Lah.296), where, 1n similar circumstances, it was held that the commission agent acted only as an agent and the contract was between the merchant In India and the foreign merchant. In our opinion there is overwhelming evidence on the record to establish that appellant's relationship with the respondents was between principal to principal. Apart from intrinsic evidence and other circumstances referred to above there is not the slightest doubt that Home Textiles Corporation acted as commis sion agents for the Japanese firm in large number of other cases. The letter dated the 17th of October 1950, of the respondents speaks volumes about it. The correspondence between the appel lants and the commission agents makes it perfectly clear that throughout Homes Textiles represented the Japanese firm as agents and were either calling upon the appellants for the extension of the letter of credit or for the increase in the amount of the letter of credit. If the position had been otherwise they would have got either the letter of credit opened in their own name or cancelled the contract on their own behalf. The course of business therefore between the parties undoubtedly proves that Messrs Home Textiles Corporation acted in the transaction in question as commission agents and not as principal with the appellants. This is also the position which Messrs Home Textiles Corporation took as early as 6th November 1950, in reply to the notice of the appellant's counsel. In this letter it was stated that they had only acted as commission agents under Indent No. H. T. 119 dated 20th June 1950 and their scope of liability was limited to the extent of the terms and conditions to which the appellants had expressly agreed. The written statement of Messrs Home Textiles Corporation also is to the same effect. This is not a case in which a foreign firm for the first time comes to know about the fact that a particular party had clandestinely passed himself as their agent but a case in which it is fully aware of the part played by a local party. We entirely agree with respondents' counsel that as long as the respondents did not accept the indent the agreement was executory, but in our opinion after the acceptance of the letter of credit and shipping of the goods in question to the appellant the relationship between the parties ripened into a direct contract between them. On this view it appears to us that the view of the learned Subordinate Court that the respondents are not liable on the contract in question is not well‑founded and must be set aside. Mr. Jan Muhammad Daud, however, argued that there is enough material on the record to show that the appellants did not carry out their part of the contract and committed breach of the contract. He pointed out that the letter of credit opened by the appellants was not in conformity with the terms of the indent. He further contended that the appellants failed to extend the period of the letter of credit and thus committed breach of the contract. It will be noticed that under the terms of the indent (Exh. P/6) the appellants were to open an irrevocable letter of credit in favour of the respondents definitely on the 21st of June 1950, valid upto the end of August and expiring on the 15th of September 1950. But in the letter of credit (Exh. P/7) dated the 29th June 1950, it was stated that the bill of lading must be dated not latest than 31st July 1950, and bills of exchange must be dated and negotiated not later than 15th August 1950. But Mr. Jan Muhammad Daud did not notice that in the letter of credit under a separate note, the following significant terms also appear :‑ "Each. fixed @ 2‑1 25/32. Dely 22‑11‑50/22‑12‑50 at your request." Therefore it cannot be said that the letter of credit was not in conformity with the terms agreed upon between the parties. Besides, it will be further noticed that in the indent itself the letter of credit, which was opened by the appellants, is specifically men tioned. It is stated in the indent that the appellants had opened "Credit No. 41942 for 510 through." Thus the letter of credit which was opened in favour of the respondents was brought to the notice of the respondents and they bad accepted it without any objection. Mr. San Muhammad Daud's contention that the increase of the amount in the letter of credit was demanded because 510 did not represent the true value of the goods shipped from Japan is also without any foundation. The letter of credit for 510 was considered to be of proper value and unless this point was specifically taken in the pleadings it is not open to the respondents to raise this objection. On the other hand, the correspondence placed on the record shows that at first the respondents asked to extend the letter of credit for shipment upto the end of August and then later on they demanded to increase the amount of the letter of credit to the extent of ‑361, more valid upto the 30th of September expiring on the 15th of October 1950. These demands are definitely against the terms of the contract and the appellants cannot be blamed for them. There is much force in the appellant's contention that on account of rise in the market rate of the goods in question both the respondents and Home Textiles Corporation were making frantic attempts to persuade the appellants to agree to increase the limit of letter of credit by

361. But they could not succeed in it. The respondents were fully conscious of the unreasonableness of their demand and ultimately shipped the goods in question to the appellants on the basis of the original letter of credit. This fact is borne out by letter dated the 15th of September 1950, of Home Textiles Corporation addressed to the appellants to the following effect :‑ "We have the pleasure to let you know that as a result of our endless efforts and endurance your indented goods have been shipped pur s.s. Vibe‑ke‑Maersk. As you know well your credit had expired, It was difficulty to smooth the shipment. On our part we have done our best, and now it depends to comply with the premises made by you." This fact is further borne out by letter dated the 27th of Septem ber 1950, which reads as under :‑ "We have the pleasure in enclosing the documents‑invoices of printed shirting 203 shipped per s.s. Vibeke Maerks. We request you to arrange our commission of Rs. 172‑8‑0 on 870/15/7." The appellant's counsel further referred us to the letters of Messrs Home Textiles Corporation dated 4th October 1950, and respondents' letter dated the 17th of October 1950, to show that the only reason which was given by Home Textiles Corporation to cancel the contract of the appellants was that they had refused to extend the letter of credit. He further pointed out that the representatives of the respondents and Home Textiles Corporation were in collusion with each other and it was after consultation with the representatives of the respondents that the goods were sold to Messrs Abdul Karim and were diverted to them. In the circumstances of the present case we are satisfied that the respon dents are to be blamed for the breach of the contract and no responsibility in this respect can be fixed on the appellants. Lastly it was argued by Mr. Jan Muhammad Daud that the appellants had failed to establish that they had suffered damages in the amount claimed by them. The learned counsel argued that there was no evidence on the record to show that the cost of the goods at Karachi was Re. I per yard and the market rate on the date of the breach was Rs. 1‑7‑0 per yard. This contention also has no force. In the first place P. W. 3 Haji Sulaiman has made a positive statement in his examination‑in‑chief that the cloth in dispute purchased by them at the rate of 195 cents per yard was equivalent in Pakistan money to Re. 0‑10‑0 per yard. He further stated that the cost of the goods on arrival at Karachi was Re. 1 per yard inclusive of all charges and the market rate of the goods in question on the date of the breach was Rs. 1‑7‑0 per yard. The appellants in support of their contention that the price of the goods, i.e, market rate at Karachi was Rs. 1‑7‑0 per yard produced P. W. 5 Abdur Rahman. This witness stated that according to the published weekly reports of market rates of different commodities, the rate of printed Chint No. 2003 was 1/4 to 1/6 per yard on 21‑6‑1950. He further stated that the rate of the said cloth on 10‑11‑50, was Rs. 1‑6‑6 per yard. The appellants also produced Exh. P/9, bill of entry, to show that the C. I. F. value of the goods in question was Rs. 8,444‑10‑0 and the customs duty was in the sum of Rs. 3,040‑1‑

0. These figures prove beyond doubt that the cost of the goods on arrival at Karachi was about Re. 1 per yard. The respondents have led no evidence in support of their contention that the cost of the goods was not Re. 1 per yard or the market rate of the goods on the date of the breach was not 16. 1‑7‑0 per yard. The statement of the appellant and the evidence produced by him stands unrebutted. In these circumstances it is quite clear to us that the claim of the appellants in the sum of Rs. 5,469 is fully proved and no excep tion can be taken to it. On the view which we have taken of the evidence led by the parties, the respondents are liable to pay the damages claimed by the appellants. Accordingly we allow the appeal and pass a decree in favour of the appellants in the sum of Rs. 5,469 against the respondents with costs throughout. K. B. A. Appeal accepted.