1984 PLP 1853 (CLC)

(Sd.) (A Ghafoor Khan), Manager." The total stock of cotton seeds weighed 365 Maunds only and it fetched Rs. 12,477 which amount was remitted to the plaintiff's Denso Hall Branch at Karachi. The witness deposed :‑

"The weighment and disposal of the stock was done in the presence of few leading marchants of the marked in Sargodha. The names of the persons who were present were Choudbry Muhammad Aslam Bhatti, Muhammad Iqbal, Ch. Muhammad Yaqoob, Abdul Hameed and Manzoor‑ur‑Rehman. I produce the statement to the above effect made by the aforesaid persons which they signed in my persence, marked as Exh. 35/4. After the sale I had informed the defendant of the transaction by a telegram, dated 11th July, 1970 that goods have been sold and the proceeds remitted to their account at Karachi. I produce a copy of the telegram marked `X'. I produce the copy of my letter, dated 11th July, 1970 sent by registered cover whereby the party was informed about the sale of the stock, I produce the copy together its postal receipt, marked as Exhs. 35/5 and 35/6." Reference may here be also made to be plaintiffs letter, dated 17‑7‑1970 (Exh. 36/1) wherein the sale of 365 Maunds @ Rs. 35 per bag as verbally agreed by Mian Amir Bux was confirmed. It would be relevant to produce the contents of this letter which reads as follows :‑-- "As verbally agreed upon by you and your partner Mian Amir Bukhsh, our Sargodha Branch has disposed of your stocks of cottonseed pledged with them in lose form in a barrack of your Sargodha Factory. The stock has been weighed at 355, bags (1 Mds. in a bag) and has been sold @ Rs. 35 per bag, at price settled by you. The sale proceeds of the stocks i. e. Rs. 12,477 have been received and credited to your above‑noted account. The account at present shows a debit balance of Rs. 96,362.89 against which as you are aware no security is held by us. You are requested in your own interest to please arrange to adjust your account in full by 25th July, 1970, failing which we shall have no alternative but to refer the case to our Legal Adviser for filing of suit against you at your risk as to cost and consequences. This is our last and final notice." The above letter and facts stated therein, were never challenged by the defendants. The statement of account prepared by the plaintiffs Foreign Exchange Branch Karachi has been produced as Exh. 35/24 and is duly certified in accordance with the Bankers Books Evidence Act. Neither any of the entries made in the said statement has been shown to be incorrect nor was challenged in the cross‑examination. This statement of account shows that at the time of filing of the suit the defendants owned a sum of Rs. 99,812.50 to the plaintiffs. A significant fact to be noted here is that in spite of the fact that copy of statement of account (Exh. 35/24) was filed with the plaint and copies thereof had been supplied to the defendants, showing expressly credit of Rs. 12,477 on 15‑7‑1970 as sale proceeds of cotton seeds, the defendants did not take any plea in the written statement that the stock of cotton seeds in their godown situated in their factory premises was in excess of 365 Maunds or that any quantity was left undisposed of. On the contrary the defendants in para. 9 of their written statement admitted that para. 10 of the plaint was substantially correct but added that bulk of the goods were sold by the defendants without due notice and by collusive sales far below market price. The objection raised by the learned counsel for the defendants that neither the peon who delivered the letter, dated 9‑7‑1970 (Exh. 35/3) was examined nor the peon book was produced, cannot advance the case of the defendants as I find that this letter (Copy) (Exh. 35/3) was produced without any objection in the evidence. This objection was pressed by the learned counsel in support of his argument that the sale of the pledged goods was made by the plaintiffs without giving any notice as required by secti6n 176 of the Contract Act and as such the sale was not binding upon the defendants. I, however, find that the plaintiffs were served with notices which sufficiently complied with the requirements of section 176 of the Contract Act. In the notice dated 14‑9‑1977 (Exh. 9) served upon the defendants after pointing out that overdraft account (Rs. 1,81,297.75) had not been cleared, they were warned by the plaintiffs that : "We shall dispose of the stocks in .case you fail to adjust the outstanding within seven days from the date hereof." Thereafter by notice dated 18‑1‑1968 (Exh. 11) the plaintiffs again notified the defendants as follows :

"Please refer to your letter No. Nil, dated 12‑1‑1968 whereby you had undertaken to get the stock released against the payment within this week. In this context, we have to finally inform you that in case yon do not honour your commitment till 20‑1‑1968, we shall dispose of the stock of cotton seed under pledge with the Bank without any further notice." We have also letter dated 20‑4‑1968 (Exh. 13), letter dated 23‑5‑1968 (Exh. 14) and letter dated 5‑11‑1968 (Exh. 17) on record in which also the plaintiffs in `express terms warned the defendants that in case the outstanding amount was not paid, the Bank would proceed to take legal action and the security held by the Bank would be disposed of and shortfall, if any, would be recovered from the defendants. The plaintiffs in support of their case also produced Mr. Muhammad Gul Qureshi (Exh. 36) an employee who was working in their Exchange Branch M. A. Jinnah Road, Karachi. This witness stated that as security for the over draft facility defendant No. 1 had pledged stock of cotton seed, cotton seed oil cakes and groundnut oil cakes, and that on 30‑9‑1967, 4400 bags of oil cakes and 1,813 bags of groundnut cakes were pledged at Karachi. He further stated that out of 4,400 bags of oil cakes, 2,100 bags were transferred to Sargodha at the request of the defendants and the remaining stock of oil cakes were delivered to the defendant No. 1 at Karachi against three delivery orders Exhs. 21, 22 and

23. This witness also referred to Exh. 35/24 which is the statement of account of the defendants and referred to the credit entries about the sale proceeds of oil cakes made in favour of the defendants in the said account. He also produced notices Exhs. 36/1 to 36/7 sent to the defendants by the plaintiffs. I have already reproduced the contents of letter Exh. 36/1, wherein the sale of 355 bags cotton seeds at Sargodha @ Rs. 35 for a total consideration of Rs. 12,477 was confirmed and the defendants were also notified that a sum of Rs. 96,362.80 then remained outstanding. The defendants on their own behalf examined Mr. Muhammad Bux (Exh. 37) a partner in the defendant No. I firm. This witness made reference to Stock Report, dated 30‑9‑1967 (Exh. 20) wherein position of stock was shown to be as follows :‑

Descrip‑ Balance Recei‑ Deltve‑ Bal‑ Weight Rate Appro‑ Re‑ tion. per last ved. Red ance or per ximate marks. Stock on Measure‑ unit value report hand ment (Dated) per unit

Cotton‑ seeds Oil‑ 4,400 4,400 6,600 Rs. 15 Rs. 66,000 cakes. Bags Bags mds. (Subject to counting) Groundnut 1,813 1,813 3,172 Rs.15 47,580 Cakes Bags Bags mds Subject to counting) Seeds at 4,500 4,500 Rs. 18 81,000 Sargodha Bags Bags 4,500 P. M. mds (Subject to counting) 1,94,580

Placing reliance upon the above Stock report Mr. Ibadat Yar Khan, the learned counsel for the defendants argued that the said report was issued by the plaintiffs and, therefore, the plaintiffs cannot be allowed to resile from the statement made therein as to the position of the Stock and accordingly it was contended that the stock of cotton seeds shown to have been disposed of by the plaintiff bank was lesser than what was stated in the above‑mentioned Stock Report (Exh. 20) and that the plaintiff though credited sale proceeds of 355 20 bags in the defendants account but failed to credit Rs. 1,05,000 being the value of 3,400 bags of cotton seeds at Rs. 25 per md. which was the market rate prevailing in Karachi in 1968 as shown in market bulletin marked M‑

1. The claim of the defendants that the stock pledged was as per Exh. 20 and thus 3,400 bags of cotton seeds remained unaccounted for the pawnee (the plaintiff), however is not supported by any material on the record. It would be observed from the Stock Report (Exh. 20), the relevant portion of which has been reproduced above, that under the quantity of each of the item shown in it, remarks are made that the same were "Subject to Counting". Thus, no finality can be attached to the quantities shown in the said Stock Report. It is also important to note here that the defendants in the evidence did not challenge the said remarks. Further more, it would be observed that this document (Exh. 20) is signed by the defendants only and that the Manager plaintiffs has not signed, the certificate appended to the said Stock fact justifies the argument of the learned counsel for the plaintiffs, that the Stock Report (Exh. 20) is nothing more than a statement of the defendants who made the entries in Exh. 20 in their own favour for serving their own ends to obtain credit facility from the plaintiffs for a higher amount than what they otherwise would have been entitled. The defendants cannot, therefore, take advantage of self‑serving statement as to description, quantities etc. made by them in their own favour in Exh.

20. Reference may also be made to the document (Pledge of goods to secure a Demand Crash Credit) dated 3‑1‑1967 which is an admitted document and has been marked by consent as Exh.

27. In this document the defendants inter aria, as to quantities and value of pledged stocks expressly covenanted as follows ;‑

"That the borrowers shall be responsible for the quantity and quality of the goods pledged with the Bank and also for the correctness of statements and returns furnished by them to the Bank from time to time as mentioned in clause (6) above. The Borrowers have assured the Bank that all information regarding the quantity, quality, value etc., and other description of the goods pledged with the Bank as given in the said statement and Returns is or would be correct and the Bank has advanced and agreed to advance moneys under the above account on such representations. The Borrowers further declare and agree that the goods pledged with the Bank have not been actually weighed, value or numbered and in order to verify the quantity or quality of the goods pledged or the statement and Returns furnished by the Borrowers, the Bank shall be at liberty at any time in its discretion, to get the goods weighed, surveyed and valued at the expense of the Borrowers and the Borrowers agree to accept as conclusive proof the result of such weighment as certificate by an authorised officer of the Bank or by any other surveyors of valuers. If no such weighment, the goods pledged are found to be short or less than the weight as shown by the Borrowers, the Borrowers undertake to make up the deficit on demand and to reimburse the Bank for all loss, damage or expense incurred by the Bank on that account. The Borrowers agree to accept as conclusive proof of the correctness of any sum claimed to be due from them to the Bank under this agreement all statement of account made out from Books of the Bank and signed by the Accountant or other duly authorised officer of the Bank without the production of any other voucher, document of paper." Thus, in the absence of certificate by the plaintiff as to the quantity and quality etc. of the pledged goods, even otherwise, the statement made in the Stock Report (Exh. 20) is not binding upon the plaintiffs in view of the express convenant made in the Agreement of pledge (Exh. 27). I may also again refer here to the fact that the stock pledged belonged to the defendants and was lying in the defendants own godown in their own factory premises. The plaintiffs witness Mr. Adbul Ghafoor (Exh. 35) in his evidence stated that in February, 1968 he wanted to shift the stock of cotton seeds from factory premises for disposal but Mian Amir Bux and his staff did not allow the plaintiffs to shift the said stock from their premises. The witness, therefore, informed Head Office by his letter Exh. 35/1. This statement of the witness was neither challenged in the cross‑examination nor denied in his own evidence by the defendant. Significant to note here is that the defendants did not even choose to produce Mr. Amir Bux their partner who used to remain at Sargodha where the pledged stock was lying and who had dealings with the plaintiffs at Sargodha. The defendant also did not care to produce the stock‑register, though their witness admitted that the quantity of the pledged goods would have been mentioned in their records. It may be mentioned here that while making the above statement the said witness added that the said record is not available now with them but their explanation is not convincing. As to plea that the sales made were either collusive or were at lower price than market rates, it may be mentioned that the learned counsel for the defendants did not press the question as to sales made at an allegedly lower rate. No evidence has been produced to prove that the alleged sales were collusive. These contentions, therefore, cannot succeed.

5. From the reasons discussed above it is established that the stock of cotton seeds in the godowns of the defendants, situated in their own factory premises was 365 bags (1 Maunds in each bag) and that the same was sold by the pawnee/the plaintiffs after giving reasonable notice to the defendants and that the sales were neither collusive nor at a lower rate. It is also proved that at the time of filing of the suit a sum of Rs. 99,812.50 was payable by the defendants to the plaintiffs.

6. The suit is accordingly decreed against the defendants for Rs. 99,812.50 with costs and interest as prayed. S. Q. Suit decreed.