P L D 1959 (W (PLP)

Goods Selves Empire Spartan W.Y.S. 931 2 C/S IRANI 9 (Two) KARACHI 10 (C/S) Sd Manager. Received the within mentioned packages in good order and condition. The most important question for decision in this case is whether the defendant bank, in view of the said delivery orders, bound themselves to be personally liable for the delivery of the goods or were merely acting as agents of the importers and of the plaintiffs. In this connection the plaintiffs have examined Haji Umar, their managing partner as one of the witnesses in support of their case. According to this witness the defendant bank was asked to deliver the documents but instead of that they gave him four delivery orders (Ex. 8/6 to Ex. 8/9). This witness has further stated that at the time of handing over the delivery orders they were not told that the goods were under clearance. Thus the plaintiffs have not based the liability of the defendant bank on any oral contract between them. Their whole case depends on the terms of the delivery orders given to them on the clearing department of the defendants to deliver the documents and on the allegations that they were not aware and informed that the goods were under clearance. I have very carefully considered the evidence produced on behalf of the parties in this case and in my opinion the plaintiffs have failed to establish any fresh contract between them and the defendant bank about the delivery of the goods. The evidence produced on the record sufficiently establishes that the contract between Messrs Continental Syndicate of Trade was entered into at a time when the goods were under clearance. I accept the statement of Mr. M. Ibrahim, defendants witness No. 2, that they could not deliver the documents to the representative of the plaintiffs as they had already been, under the instructions of the importers, through whom the plaintiffs claim their right, filed with the Customs Authorities. The plaintiffs have not been able to satisfy me as to how they could build their case of fresh contract on the basis of the said delivery orders. The delivery orders are only a direction to the clearing department to deliver the goods on payment of necessary charges. There is reliable evidence on the record to establish that the defendant bank was clearing the goods under the instructions of the importers Messrs Continental Syndicate of Trade. The letter (Ex. 9/10) conclusively proves that the defendant bank were not clearing the goods on their own behalf but on behalf of the importers. Ex. 9/ IO reads as under :‑ "THE CONTINENTAL SYNDICATE OF TRADE. January 4th 1951. PB. 53/HZ. (i) 49, Zeenat Mansion, Mcleod Road, Karachi. THE NATIONAL BANK OF INDIA, Lm., KARACHI. Re: BC88/14106 for 579‑17‑1 14107 for 582‑ 2‑2 14108 for 579‑ 4‑3 14109 for 586‑ 3‑8 Drawn by G. R. Irani 4 Company, London. ‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Dear Sirs In continuation of our letter dated 4th January 1951, on the above subject, we would further request you kindly to get the consignments pertaining to the above bills cleared through your clearing agents, and let us have an intimation to this effect, when we will arrange to make the payment and take the delivery of the goods. This is very urgent please. Thanking you for your co‑operation, Yours faithfully, Sd/‑ MANAGER." Mr. Parmanand, the learned counsel for the defendants, is perfectly right in his contention that the defendant bank afforded a facility to the importers and for doing so did not take upon themselves any responsibility for the delivery of the goods either to the importers or their representative. In my opinion the terms of the delivery orders do not in any way help the case of the plaintiffs for making the defendants personally liable for the delivery of the goods. The case of the plaintiffs is now confined to the claim of damages and therefore it would not be relevant to discuss here the question whether the defendant bank would have been liable to reimburse the plaintiffs for the payment made by them on behalf of Messrs Continental Syndicate of Trade for the retirement of the draft. The only question for determination in this case is whether the defendants are liable to pay any damages. There is no doubt in my mind that there is no privity of contract between the plaintiffs and the defendant bank. I am satisfied that the plaintiffs were fully aware that the goods in dispute were under, clearance under the importers' instructions. It was for this reason that they accepted the delivery orders, otherwise they would not have taken them and insisted on the delivery of the documents. This view finds support in the fact that the plaintiffs themselves would have cleared the goods and finding that they were being cleared by the bank, had the satisfaction that it was done by the best possible agency. Thus, the evidence on the record conclu sively proves that the defendant bank were merely acting as clearing agents of Messrs Continental Syndicate of Trade. In such circumstances the only question for consideration will be whether, the agent conducted the business of the principal according to his directions, acted with reasonable diligence and conducted it with as a much skill as is generally possessed by persons engaged in similar business. The evidence on the record proves beyond doubt that the defendant bank was taking all possible steps for the protection of the interest of Messrs Continental Syndicate of Trade and the parties claiming through them. The goods in question were not released by the Customs Authorities as the price of the goods given in the invoices was much more than the limits fixed under the O. G. L. system. The Customs Authorities, therefore, called upon them to produce an import licence. The defendant bank tried their utmost to meet this objection. They immediately informed them that the value of the goods mentioned in the invoices included buyer's commission, that the exporters have already decided to deduct this amount from the bill of invoices, this amount has already been refunded to the importers and that the price of the goods was within the O. G. L. limits and the goods be released. But the Customs Authorities did not agree with this contention. They referred the matter to their Import Trade Control Section. The goods were ultimately ordered to be confiscated on the 10th of April 1951, vide Exhs. 9/22 to 'x/25. The defendant bank there upon took the matter to the Central Board of Revenue. They not only filed an appeal (Exh. 10/1) on their own behalf but also attached with their appeal a memorandum of appeal on behalf of Messrs Continental Syndicate of Trade. This appeal was accepted by the Central Board of Revenue on the 25th of April 1952 and the goods were cleared somewhere in June 1952. Throughout this period the defendant bank was in touch with the plaintiffs and Messrs Continental Syndicate of Trade and were posting them with full facts and the manner in which the case was being dealt with by the Customs Authorities and the Central Board of Revenue. On this evidence I am clearly of the opinion that the defendant bank faithfully discharged their duties as agents of Messrs Conti nental Syndicate of Trade and they were not negligent in any way. I am therefore of the opinion that the defendant bank are not liable to pay an y damages to the plaintiffs. This view is further fortified by the fact that the plaintiffs by their letter dated the 27th of August 1951 through Messrs Lalchand & Company, Advocates (Exh. 9/39) only called upon the defendants to refund the amount of Rs. 22,197‑2‑0 with interest and did not claim any damages from them. A further notice was sent by the plaintiffs through Messrs Kotwal & Co. (Exh. 9/43) on the 5th of October 1951 and in this letter also only the refund of the amount of Rs. 22,197‑2‑0 was claimed. This makes it perfectly clear that the plaintiffs were given sound legal advice and were fully aware that the defendant bank was acting as agent of Messrs Continental Syndicate of Trade. It was for this reason that no damages were claimed from them. The claim of damages in these circumstances appears to be an after‑thought. Mr. Jamiatrai, the learned counsel for the plaintiff, has failed to draw my attention to any provision of law under which such a claim can be made from a bank acting as clearing agent on behalf of the importers. It appears to me that in a case where a bank in whose favour the drafts for the value of the goods have been endorsed also acts as a clearing agent, the responsibility of such a bank as a clearing agent is no more than what is between principal and agent under the Contract Act. In such cases, before any damages can be claimed from the agent, it is to be fully established that the agent concerned has acted carelessly and not in accordance with the duties impose on him as an agent. In the present case the plaintiffs have failed to establish any such negligence or dereliction of duty on the part of the defendant bank as clearing agents. Assuming for the sake of argument that the defendant bank is liable to pay any damages to the plaintiffs, even then the plaintiffs have failed to establish any loss suffered by them in respect of the contract in dispute. The memorandum of sale produced by the defendants (Exh. 17) shows that the plaintiffs sold the goods delivered by the defendant bank during the pendency of the suit for a sum Xs. 37,116‑9‑3.The evidence on the record shows that the plaintiffs paid Rs. 22,197‑2‑0 to the defen dant bank. Out of this amount Rs. 527‑7‑0 were refunded by them on 22nd January 1951, being the buyer's commission. Thus, the plaintiffs paid to the defendant bank a total sum of Rs. 21,669‑11‑

0. They further paid a sum of Rs. 7,187‑13‑0 towards clearing charges. The plaintiffs in this way paid a total sum of Rs 28,857‑8‑0 to the defendant bank. As against this the plaintiffs sold the goods in dispute for Rs. 37,1169‑

3. The plaintiffs have not proved on the record any other payment in respect of the transaction in dispute to Messrs Continental Syndicate of Trade. Under the contract 75% of the price agreed upon . was to be paid to the bank for clearing the drafts and surplus, if any, out of it was to be paid to Messrs Continental Syndicate of Trade. Now 75% of the contract price comes to about Rs. 22,115‑2‑0, therefore there remained nothing to be paid to Messrs Continental Syndicate of Trade in this respect. The balance of 25% of the amount was to be paid by the plaintiff towards the clearing charges. Whatever amount remained as surplus after the said payment was to be paid to Messrs Con tinental Syndicate of Trade. There is no evidence on record to show that any amount out of the said 25% was paid by the plaintiffs to Messrs Continental Syndicate of Trade. 'The plaintiff has failed to produce his account books. Mr. M. A. Shaikh who was examined on behalf of the defendants made a positive state ment that no amount was paid to them by the plaintiffs in this connection. Under these circumstances it is obvious that the plaintiffs have earned profit in respect of the transaction in dispute to the extent of about Rs. 8,259‑1‑

3. Mr. Jamiatrai, the learned counsel for the plaintiffs, has however, urged before me that the plaintiffs entered into a contract on 31st January 1951, with Messrs Tyeb Omer & Co., for the supply of the goods in dispute at the rate of Rs. 2 per yard. But I am very doubtful about the genuineness of this transaction. The contract (Exh. 12) shows that the goods were to be supplied within a week of the said date. The plaintiffs were fully aware that the goods were under clearance, that there was no likelihood of the clearance of the goods within a reasonable time and it is impossible to believe that under these circumstances they would enter into such a contract with the Eastern Bank. In fact the evidence of Mr. Kassim Ali Muhammad Parak (Exh. 11) shows that this contract was cancelled between the parties on the 14th of March 1951. My suspicion is further strengthened by a letter dated the 10th of March 1951, (Exh. 9/21) in which the plaintiffs had stated that they have been in negotiation with certain party for the sale of the goods in question and if further delay is caused in mak ing delivery of the goods, they are likely to suffer the loss to a great extent. This shows that there was no contract at least till the 10th of March 1951, between the plaintiffs and any other party. In such circumstances no reliance can be placed on the contract alleged to have been entered between Tyab Omer & Co., on the 28th of February 1951. Moreover, there is no documentary or oral evidence on the record to establish the market rate of the goods in dispute between January 1951 and March 1951, when the breach is alleged to have taker place. The oral evidence produced in this case shows that there was very slight variation during this period in the market. In the absence of any evidence of the market rate of this particular goods, it is difficult to hold that the plaintiffs lost any profit in the transaction in question. After careful consideration of the matter in question, I am clearly of the opinion that the plaintiffs have failed to establish any liability of the defendants for the non‑delivery of the goods within a reasonable time of the payment made by them to the defendant bank. In my opinion the defendant bank were unable to deliver the goods on account of circumstances which were beyond their control and they were in no way responsible for it. They are therefore not liable to pay any damages. I further hold that the plaintiffs have failed to establish any loss suffered by them in respect of the transaction in dispute. For the reasons given above, I dismiss the suit with costs to the extent of Rs. 13,342‑8‑

0. A. H. Suit dismissed.