1968 SCMR 409 (PLP)

CORNELIUS, C. J.-The facts appear to be as follows. The plaintiff Amarst Narayanji, being under contract to supply 50 tons of begmi rice to a client in Zanzibar (East Africa) for which the letter had taken out a Letter of Credit, booked the necessary space in a ship the Karanjia. He failed to procure the rice from the Government stocks, as none was available of the crop mentioned in the Letter of Credit and, in order to fulfil the contract, came to an arrangement with the respondent firm Messrs Badruddin J. Mithani, who had the rice to export, but lacked the shipping space, that on the space and the Letter of Credit being made over to them, they would make the supply, Messrs Badruddin J. Mithani did make the supply consignment sent by the Karanjia, but from a later not consignment made by the ship Kampala. They did so, as the basis of being in direct contract, through transfer of the Letter of Credit, with the aforesaid client in Zanzibar, and appropriated all benefits therefrom, such as commission, profit on bonus voucher, etc. The Letter of Credit was transferred to Messrs Badruddin J. Mithani unconditionally, i.e, there was no reserve of any benefits therefrom, in favour of Amarsi Narayanji, and it seems too that all risks of the transaction were, by the transfer, assumed by the transferee. After the contract had been performed, Amarsi Narayanji sued Messrs Badruddin J. Mithani for (a) compensation for the shipping space (b) commission(c) profit on the bonus voucher I and (d) interest. The suit was dismissed, and successive appeals were dismissed by an Additional District Judge, and by a Division Bench in the High Court. Leave to appeal to this Court is now sought. In the High Court, the contention that the transfer of the Letter of Credit could not have been made, without consideration, was repelled on two grounds, viz., (1) that if money compensation had been agreed upon, there would have been a contract, and the Courts below bad held that there was none; and (2) that the plaintiff may have been content that his commitment to the client in Zanzibar should be fully met, and this was actually done. Mr. Nathumal for the petitioner relied on a notice Exh. 5 allegedly issued by his client to the respondent which (1) admits that he gave the shipping space and transferred the Letter" of Credit on "only one condition" viz., that "you will have to give delivery of 50 tons of Begmi rice to our clients;" (2) alleges that the condition had not been satisfied because the Karanjia bad reached and been unloaded at Zanzibar? but the rice had not been supplied, and adds "you are liable for losses suffered by our client ;" (3) demands return of the Letter of Credit ; and (4) claims "full right of bonus voucher" in case the shipment is made under "our Letter of Credit" by the Kambala, and adds that the client in Zanzibar would claim for losses and demurrage. It was contended that by this notice, the earlier agreement for shipment by the Karanjia had been revoked, and fresh terms had been demanded, including right of bonus voucher, if shipment were made by the Kampala. In fact, the notice exhibits clear confusion of understanding of the consequences which flowed from the unconditional transfer of the Letter of Credit. The idea that the Letter of Credit could be demanded back after that transfer was without foundation. By the transfer, the Zanzibar client was placed directly in contract with the respondent firm, and Amarsi Narayanji was in no position to issue threats for losses, dumurrage, etc., on the Zanzibar client's behalf, It does not seem that any such losses were claimed, but in any case, they would arise out of the contract, and would fall on the respondent firm as the transferee of the contract, The mention of a claim for the bonus voucher profit, after the Letter of Credit itself had been transferred, was a mere after-thought, for which no basis of right existed. The suit was rightly dismissed. We dismiss this petition. Petition dismissed.