P L D 1963 (W (PLP)

"K.4/431‑B.040: The yarns are ready to be shipped, but Messrs Beernaerts bankers have now drawn their attention on a term contained in these two credits, reading : "and containing five liras". As the yarns are made up in ordinary cross reel hanks, and invoiced as such, Messrs Beernaerts insist to have that clause annulled. If this is done in time, the yarns will be shipped on the first steamer leaving Antwerp beginning February together with B. 30265." The reply from the appellants is in these words :‑ "Credits K.4/431 B.040 buyers agree annul clause but totally refuse prolongations stop imperative ship before thirty -first alternatively first available steamer with predated bill of lading Stop Please cable position urgently no alternative as ourselves committed pay loss buyers for non‑shipment in time Stop Request arrange immediate shipments without awaiting bank advice which may take time ourselves guarantee annulment." Relying upon the peculiar language used by his clients in their cable on 30‑1‑1952 Mr. Jan Muhammad emphasised the fact that his clients had at no time asked the defendant No. 2 to wrongly describe the goods they were exporting in response to the indent placed with them. Mr. Jan Muhammad maintained that the effect of the reply cable was merely to convey to the Belgian Firm that the appellants guaranteed the annulment of the difficult clause "and containing five liras" contained in the two letters of credit but, he said, that this reply cable could not be interpreted as meaning that his clients had advised or suggested to the Belgian Firm to export the goods under a false description.

9. Replying to this first argument of Mr. Jan Muhammad, Mr. Z. T Ahmad appearing on behalf other respondents invited our attention to a letter dated 2nd February, 1952 which appears at page 41 in the paper book of LA.181/1960 from the appellants to the Belgian Firm to send out these goods under the very description under which they arrived here. This letter Exh. 10 is an important document and its first two paragraphs may be set out here for the purpose of showing how the appellants were privy to the fraud practised by the Belgian Firm upon the respondents plaintiffs : "We learn from Messrs Van Damme Gosseye that the goods for credits K4/431 and B.040 are ready for shipment but according to a clause in the credits that each hank should contain 5 liras, you are unable to ship the goods as the yarn is not made up as such, and this clause should be annulled therefore. We are of the opinion that there should be no difficulty for you to ship the yarn as it is. We suggest that the goods be shipped as they are and the documents presented to the Bank as usual. If you feel however that the Bank may not accept the documents until it is incorporated in the invoice that each hank contains 5 liras, it may be mentioned accordingly in the invoices to negotiate the documents."

10. It thus seems to us from a perusal of the cable of 30‑1‑1952 sent by the appellants to the Belgian Firm and their subsequent letter of' 2‑2‑1952 that the appellants‑defendant No. 1 plainly invited the defendant No. 2 to ship the yarn out in the condition in which it was and further suggested to them that the shipping documents should mention that each hank contains five liras. There can, therefore, be no manner of doubt whatsoever that the appellants‑defendant No.1 were privy to the fraud practised by the defendant No. 2 namely the Belgian Firm upon the respondents‑plaintiffs. Indeed, it is clear that the defendant No. 2 acted in this matter upon the suggestion made to them by the appellants‑defendant No.

1. In this view, then, the appellants/ defendant No. 1 has rightly been held by the trial Court to be responsible for this breach of contract that has occurred with the plaintiffs in these two matters.

11. The second point raised by Mr. Jan Muhammad appearing on behalf of the appellants in both these appeals, namely that the two suits were barred by limitation was not pressed by him. He did when putting this point forward refer us to clause 5 of the indent which provided that‑ no claim in respect of the goods described on the obverse shall be entertained unless the same is made in writing within 7 days after arrival of steamer." Mr. Jan Muhammad submitted that the two suits were filed well after the period of seven days from the arrival of the two steamers in question and, therefore, despite the provisions of t Article 9i of the Limitation Act the two suits were barred by time. However, as mentioned above, the learned Advocate did not press this contention and it, therefore, becomes unnecessary for us to give a finding upon it.

12. The third and last contention of the learned Advocate appearing on behalf of the appellants concerning the absence of any proof ors the part of the plaintiffs of the actual damage sustained by them was vigorously pressed by him and it is, therefore, necessary to examine this contention in some detail. From the judgment of the lower Court we find that z definite issue being Issue No. 7 was raised on this particular point and it is in these words :‑ "Whether the plaintiffs can claim the loss of Rs. 5,000 being the difference of the market price of the two varieties as alleged by them from defendants or any one of the defendants ?" It is indeed interesting to note that on this important issue the respondents‑plaintiffs have led no direct evidence as to the difference between the prevailing market price and the price contracted for and paid by them nor have they produced their accounts to show whether any loss has in fact been sustained by them in these two contracts. The learned Advocate Mr. Z. T. Ahmad appearing on behalf of the respondents‑plaintiff, admitted that his clients had not only accepted these goods although according to them they were not in accordance with the goods actually ordered by them but had also traded in them and had sold them. This admission was made at the Bar in the course of the hearing of this matter but it finds no place in the pleadings or in the evidence led in the trial Court. In the absence, then of any such evidence as to the amount for which the yarn was sold and of the accounts, it is quite impossible for us to hold that the respondent‑plaintiffs had in fact sustained any loss in this matter. For all we know it may very well be that they have made a profit and that that is the reason why they have suppressed this evidence and have also suppressed their accounts in respect of their trading in the yarn in question.

13. We allowed a day's time to the learned Advocate appearing on behalf of the respondents‑plaintiffs to fully prepare himself on this aspect of the matter and to address further arguments to us should he so desire. We, therefore, adjourned the case for this purpose to the next day. This learned Advocate frankly admitted that in his drawing up of the plaint in these two matters he bad not made the correct approach on this question of damages sustained by his clients and that he relied upon the correspondence exchanged between his clients and the defendant No. 2 and the Belgian Embassy in Karachi. This correspondence appears to indicate that the loss sustained by the plaintiffs could be fixed at the rate of annas four per pound net and he therefore calculated the loss on this basis and claimed Rs. 5,000 as damages. The learned Advocate, however, went on to contend that in cases where fraud is proved, damages need not strictly be proved and in support of this contention he invited our attention to certain rulings.

14. The first of these is the case of Sheikh Jaru Bepari v. A. G. Peters (A I R 1942 Cal. 493). It was held in this case "In cases where the elements of fraud, oppression, malice or the like are found, the law does not confine its remedy to the payment of compensation merely proportionate to any pecuniary loss actually suffered by the injured person. It can grant vindictive or exemplary damages by way of punishment to the wrong‑doer." But, it seems to us that this case can be of no assistance to the learned Advocate for the simple reason that he has produced no documents and no accounts and he has not shown whether his clients have sustained any loss in these two transactions at all. Nor has any claim at any time been put forward on behalf of his clients in this matter for vindictive or exemplary damages by way of punishment to the wrong‑doer. Mr. Ahmad then referred us to the case of F. Thomas Kingsley v. The Secretary of State (A I R 1923 Cal. 49) and to the passage therein that‑ "In actions for breach of contract where there has undoubted ly been an infringement of a right, nominal damages are recoverable even though no actual damage can be proved." Here again, the question of "nominal damages" is something ephemeral and certainly the amount of Rs. 3,000 awarded to the plaintiffs in each of these two cases cannot be said to be nominal damages. In fact, in the absence of any conclusive evidence to show that the plaintiffs in these two suits have sustained losses and not profits we are most reluctant to consider awarding any damages to them. Mr. Z. T. Ahmad next quoted the case of Ismail Sait & Sons v. Wilson & Co. (I L R 1941 Mad. 709). This was a case in which there was no market for the goods at the place of delivery and in which the goods were not to be resold but were intended only for the buyer's use. Now, in the instant case, the plaintiffs admit having sold the yarn in question and, therefore, inasmuch as they were able to find the market for this yarn and were able to sell it, it follows that this reported case is not on all fours with the facts of the instant case. The last case relied upon by the learned Advocate appearing on behalf of the respondents was the case of Arjunsa v. Mohanlal (A I R 1937 Nag. 345). Here, again, the principle was enunciated that in cases of breach of contract the measure of damages is the difference between the contract rate and the market rate. It was further held in this case that if this difference is not proved then nominal damages should be awarded. This case is similar to the case reported in A I R 1923 Cal. 49 considered above and as mentioned by us when dealing with that case we are reluctant to fix any amount be it nominal or otherwise reflecting the damage or loss sustained by the plaintiffs particularly in the total absence of any evidence to show whether the resale of the goods had in fact brought about a loss rather than a profit.

15. Therefore, on this third and last contention raised in this case namely that the amount of damages awarded against the appellants had not satisfactorily been proved or established, we are constrained to hold that this contention must be upheld and that the result of this would be that the respondents‑plaintiff have failed to prove that they have sustained any loss in this matter as a result of the breach of contract committed by the defendants. The judgments and decrees of the lower Court by which it granted Rs. 3,000 to the respondents‑plaintiffs in each of these two suits must, therefore, be modified so as to disallow any amount of money as damages. Subject to this modification of the judgments and decrees, the appeals are dismissed with no order as to costs. A. H. Order accordingly.