1955 MLD 1 (PLP)

The defendants have examined Abdul Aziz, as employee of Defendant No.1. He states that during 1970 Cotton Season Seth Sulcman Dawood of their Company had rung him from Karachi and told him to ask Defendant No.2 to deliver 2;000 bales of cotton to the Plaintiffs firm. In the cross‑examination he states that Seth Seuleman Dawood is not even Director, but has again clarified that he is only aware of the Resident Director of their Company at Dawoodabad, who is also son of Seth Suleman Dawood. The Defendant No.1 have not produced any documentary evidence, as to who their Directors arc and whether Mr.Suleman Dawood is not Director of Defendant No.1. In view of all this evidence, there appears to be no doubt that Seth Suleman Dawood was acting on behalf of Defendant No.1 in this transaction. The fact that Abdul Aziz got instructions from Seth Suleman Dawood to direct Defendant No.2 to deliver 2,000 cotton bales to the plaintiffs also supports the claim of the plaintiffs with regard to the contract. There is another piece of evidence which also requires consideration. Admittedly 400 bales of cotton out of the contract quantity of bales were supplied to the defendant by M/s. Zaffar Cotton Ginners. Muhammad Rafiq, Manager, of M/s. Zaffar Cotton Ginners has been examined. He states that m the cotton season of 1970‑71 they had entered into a contract/agreement with Burewala Textile Mills Ltd. and in execution of this contract, they supplied 400 cotton bales to the Plaintiffs. He has produced the letter Ex.C‑9 addressed to Defendant No.1 by M/s.Zaffar Cotton Ginners and according to him it is signed by their partner Mr.S.M.Younus. This letter is addressed to the Defendant No.1 and his address is shown as D:iwoodabad, Karachi. It is regarding delivery of 1,000 bales to M/s.Abdullah and Sons" N Karachi, from their purchases. The relevant part of this letter is also reproduced as under:‑ "We hereby acknowledge your telephonic instructions to our Mian Muhammad Younis for the delivery of 1,000 B/S out of your contract at the compensated rate of Rs.113/‑ p. md. Now today we have received a message from Mr.Muhammad Hussain of General Agencies, Multam to stop the delivery of M/s. S. M. Abdullah & Sons out of your contract. So our Mian Muhammad Younas discussed with Seth Suleman Sahib in regards and followed the instructions, also stopped the delivery, but upto your first instructions we have already delivered 400 B/S to M/s. S.M.Abdullah and Sons out of 1,000 B/S. Please note. According to your instructions we have intimated our office to depute the representative for the delivery of the balance of contract." In his cross‑examination he states that Mr. Suleman Dawood, Managing Director of Defendant No.1 had given instructions on telephone from Karachi to deliver 1,000 bales of cotton to the plaintiffs. It is not suggested to him in cross examination that they did not send the letter Ex.C‑9 or that it was not received by the defendant No.1. In this context it would be relevant to refer to the evidence of P.W. Muhammad Rafique of M/s.Zaffar Cotton Ginncrs. He states that he had received telephonic message from Seth Suleman Dawood, Managing Director of Defendant No.1 to deliver 1,000 bales of cotton to the plaintiff. No doubt Younis, who had actually received this telephonic message has not been examined but this fact is mentioned in the letter C‑9 which is exhibited a, Ex.10/4. which is addressed to Defendant No.1. There is no evidence to show that this letter was not received by Defendant No.1 or that this letter was replied refuting tile allegations therein. The name of dcl'enciant No.1 is also specifically mentioned in letter C‑

10. There are certain telegrams and letters on the record exchanged between SMASONS Karachi and YARNSUP Karachi. Admittedly SNIASONS is tile telegraphic address of the plaintiff. P.W. Mullanimad Hussain hit titled that ARNSUP is the telegraphic address of M/s. Dawood Corporation. The letter Ex.10/6 which is produced by the defendant in the cross‑examination of P.W. Fazalur Rehman is on the letter head of Burewala Text Mill Ltd. vv. Defendant No.

1. This is in confirmation of the telegram which has been produced as Ex.8 through P.W. Muhammad Moosa of Telegraphic Office. This telegram is sent by YARNSUP and is in reply to the telegram sent by the plaintiff s copy of which has been produced as Ex.10/5. This telegram is from the plaintiffs to YARNSUP. This document clearly indicates that either YARNSUP is the telegraphic address of Defendant No.1 or communications sent on this address are received by the Defer lant No.1. D.W Abdul Aziz has not specifically denied that YARNSUP is not the it telegraphic address, but he has given evasive reply that he does not know of which company is this telegraphic name. Be that as it may Ex.10/6 and Ex.8 read as under:‑ Ex.10/6 and Ex.8. "SMASONS KARACHI We deny the allegations of your telegram dated twentieth November and reiterate the contents of our telegram-dated twenty‑sixth November. YARNSUP." Telegram dated 28th November referred to in this letter has also been produced as Ex.9 which reads as under:‑ "SMASONS KARACHI. Refer your telegram twenty‑fourth. All allegations arc denied. Please take delivery of remaining one thousand six hundred bales cotton from Kausar Oil and General Mills Multan as already agreed and confirmed by you vide your letter No.SAS/CS/PT‑P‑1/98 dated twentieth November, YARNSUP." This Ex.9 clearly supports the evidence of P.W. Fazalur Rehman that they received only 400 bales of cotton out of contracted quality of 2000 bales of Cotton and that Seth Suleman Dawood told him that tire balance quantity would supplied by M/s. Kausar Oil and General Mills Multan. It is suggested in the cross‑examination of Fazalur Rehman that M/s. General Agencies of Multan were not brokers, but were cotton merchants themselves, and that they do not let as agent of tire Defendant No.1 which suggestion is of course denied by the plaintiffs witness. However, D.W. Abdul Aziz has himself admitted in the cross‑examination that there were dealings between their Company and Muhammad Hussain of M/s. General Agencies from about 1960 to about 1971 or 1972 and that M/s. General Agencies have acted as Commission Agents in certain dealings with their Company. It may be pointed that the contract in tltics1ion pertains to the period of 1971). It will be seen that Seth Sideman Dawood is it main figure iii this case. As already pointed some witnesses have described him its Managing Director of Defendant No I. Even D.W. Abdul Aziz has described seth suleman Dawood to be of their Company, though subsequently he has stated that Seth Stilcman Dawood was neither Chairman, nor Managing Director nor Director of Defendant No.1. But he has further stated that he did not know who were Directors of the Company. As already pointed most of the correspondence is addressed to Seth Suleman Dawood. Seth Suleman dawood undoubtedly appears to be a person of authority, who conducts business for defendant No.1 He has chosen not to examine himself to rebut the evidence of the Plaintiffs' witnesses as described above and its presumption would not have to be drawn that had Seth Suleman Dawood bee examined, he would not have supported the case of Defendant No.1. Keeping all the oral as well as documentary evidence discussed above, there appears to be not even an iota of doubt that the contract as alleged by the plaintiff was entered into between the plaintiff and the Defendant No.1 through Muhamad Hussain of M /s General Agencies. The mere fact that this contract was not reduced in writing in the regular form. Would not detract from tire legality of the contract There is enough documentary evidence to show the existence of such a contract. My finding is, therefore in affirmative on issue No.3. The evidence of Fazalur Rehman that it has agreed that the contracted quantity would be supplied by That Cotton industries Multan has gone unrebutted and unchallenged. The telegram Ex.10/1 which has already been referred to above. Sent by the General Agencies, in the plaintiff confirming the contract mentions "That Cotton Account Dawood Sellers" My finding, therefore, in view of my finding on Issue No.3, is in affirmative on Issue No.4 also. I have already held that hl/s.GLneral Agencies acted as Commission Agents of Defendant No.1 and admittedly telegrams Exs.l0/1 and 10/2 and letter Ex.10/3 were sent by them. My finding is, therefore, in affirmative on Issue No.5. The evidence of plaintiff's witnesses its already discussed above, Show that the said Seth Suleman Dawood Managing Director of Defendant No.

agreed to deliver the contracted cotton through M/s. Muhammad Amin and Muhammad Bashir Ltd. and M/s. Zaffar Cotton Ginners. The evidence of Muhammad Rafiq of M/s. Zaffar Cotton Ginners supports the evidence of the Plaintiffs. Suleman Dawood has not examined himself in rebuttal and, therefore, my finding is in affirmative on this issue No.6 also. For reasons recorded, while discussing Issue No.3. My finding is in affirmative on Issues Nos.7 and 8 also. The effect would be that the Defendant No.1 was liable to supply the contracted quantity of bales of cotton to the plaintiffs. ISSUE N0.9: The plaintiff s witness has stated that M/s. Muhammad Amin and Muhammad Bashir Ltd. refused to deliver the cotton on the instructions from Defendant No.1. There is no evidence in rebuttal, nor is there any averment that the cotton was supplied by M/s. Muhammad Amin and Muhammad Bashir Ltd. therefore, my finding is in affirmative on this issue also. ISSUE NO.10: While discussing the evidence on Issue No.3. I have already referred to the evidence, that the Defendant No.1 had agreed to give delivery of 1,000 bales of cotton through Defendant No.2 and this fact is also mentioned in telegram Ex.9. The explanation of the defendant as stated in para 10 of written statement at to why they asked defendant No.2 to supply the bales of cotton to the plaintiff has not been proved, by any evidence. Their witness P.W. Abdul Aziz only states that he received instructions from Seth Suleman Dawood to ask M/s.Kausar Oil and General Mills Multan to deliver 2,000 bales of cotton to the plaintiff, but he states it is not known to him why he was given these instructions by Seth Suleman Dawood. Therefore, my finding on Issue No.10 is in negative. ISSUE N0.11: There is no evidence that Defendant No.2 offered to the plaintiff the delivery of 1,600 bales of cotton. As such my finding is in negative on this issue. ISSUE N0.12: There is evidence of plaintiffs witness that Defendant No.2 did not deliver the bales of cotton to him. The defendant's witness has stated that the plaintiff did not take delivery from M/s.Kausar Oil and General Mills Multan, but no witness has been examined from the Company of Defendant No.2 to support this contention. However, there is no direct evidence that refusal to deliver the bales by Defendant No.2 was in collusion with the plaintiff. But presumption can be drawn that may be the reason as to why the Defendant No.2, in spite of instructions from the Defendant No.1 did not give delivery to the plaintiffs. My finding on the issue are accordingly. ISSUE N0.13: No evidence has been led by the defendant to show that any breach oft contract had been committed by the plaintiff but rather the existence of the contract is denied by the defendant. P.W. Muhammad Hussain, however, stated that the plaintiff did not abide by the agreement with him which was to the effect that the plaintiff would purchase cotton only through M/s. General Agencies of Multan. However, the contract which is subject matter of this suit, is not the contract between Muhammad Hussain and the plaintiff, but the contract between the Defendant No.1 and the plaintiff for which there is no evidence of breach contract on the part of the plaintiff. My finding is in negative on this issue. ISSUE NO.1 The plaintiffs witness Fazalur Rehman has stated that the contract was entered into by the plaintiff with the defendant No.1 through Muhammad Hussain at Karachi. The suggestion in the cross‑examination that the contract by Muhammad Hussain was entered into at Multan on telephone is denied by the plaintiffs witness. Muhammad Hussain is silent about the fact as to where the contract was entered into. The defendant's witness does not state as to where the contract was entered into. Thus the only evidence on record is that of plaintiffs witness. This evidence could have been rebutted by putting specific questions in cross‑examination of Muhammad Hussain regarding the place where the transaction took place. Though, as already pointed, this witness has tried to favour Defendant No.1, but still no such question was put to him From his evidence it appears that Seth Suleman Dawood, who purchases and sells cotton for the defendant, resides in Karachi. Under the circumstances, I am inclined to believe the plaintiffs evidence that the contract was entered into at Karachi. Ex.10/6 which is on the letter head of Defendant No.1 shows their address as `Dawood Centre' Karachi‑

4. It is admitted by defendant's witness Abdul Aziz that their company has an export office at Karachi. Explanation (2) to section 20,1 C.P.C. provides that a Corporation shall be deemed to carry on the business at the sole or principal office or in respect of any cause of action at any place where it has also subordinate office at such place. The words "shall be deemed" were considered by their Lordships of Supreme Court in the case of M/s. Ranmania Trading Co. v. M/s. Eagle Star Insurance Co. Ltd. (P L D 1960 S C 202) and i! was held by their Lordships as under:‑ "Art explanation is enacted by the legislature to explain what otherwise would be doubtful or ambiguous. To the extent that it explains a stipulated situation its function is definitive inasmuch as it certifies or defines the legal position in a supposed state of acts. Therefore, despite the words `shall be deemed' Explanation (2) in terms defence the words `carries on business' used in clauses (a) and (b) of the section, and mean that where the defendant is a corporation, it is, deemed to be carrying on business at its sole or principle office irrespective of whether the cause of action hits arisen there, as well as of at the place where to it has its subordinate office provided the cause of ac, ion arises there. This appears to us to be its plain meaning." I have already held that the contract was entered into at Karachi. The evidence on record, as pointed above, shows that at least some subordinate office of the Defendant No.1 is at Karachi. As such this Court has Jurisdiction to entertain the suit and my finding is in affirmative on issue No.1. ISSUE N0.2: I have already held that M/s.General Agencies of Multan acted as agents of :3efendant No.1 while entering into contract in question with the plaintiff. Under section 230 of the Contract Act in absence of any contract to that effect, an agent cannot personally enforce the contract entered into by him on behalf of principal, nor he is personally bound by them. It is not the case of the plaintiff that there was any contract with the Agent viz. M/s.General Agencies of Multan and they would be personally liable. Under the circumstances neither M/s. General Agencies of Multan was necessary party nor the suit would be bad for his non‑joinder. My finding is in negative on this issue. ISSUE N0.14: I have already held, that out of the contracted quantity of 2,000 bales of cotton, the defendant No.1 supplied only 400 bales of cotton to the plaintiff and committed breach of contract by its failure to supply 1,600 bales of cotton. The plaintiff as such is entitled to damages under Section 73 of the Contract Act. Illustration (a) to Section 73 would be applicable in this case which is reproduced as under:‑ "(a) A contract to sell and deliver 50 maunds of salt petre to B, at a certain price to be paid on delivery. A breaks his promise. B is entitled to receive from A, by way of compensation, the sum, if any by which the contract price falls short of the price for which B might have obtained 50 maunds of salt petre of like quality at the time when the salt petre ought to have been delivered." I have already held that, according to the contract, the Defendant No.1 had to supply the contracted bales cotton to the plaintiffs by the end of November, 1970 at the rate of Rs.112/‑ per maund. The evidence of Muhammad Rafique shows that they supplied 400 bales of cotton to the plaintiff and the Invoice Ex.C/2 produced by him shows that the cotton was supplied by them at the rate of Rs.113.50 per maund. As such plaintiff is entitled to the difference between the two prices. The plaintiffs witness P.W. Ahmed, who is Asstt. Chief Clerk of Karachi Cotton Association has produced spot local rates prevailing in Karachi on 30‑11‑1970 which was the last date on which the Defendant No.1 had to supply the goods. It shows the rate of cotton AC‑134‑SG to be Rs.133.75 per maund. The defendant's witness Abdul Aziz has stated that if he remembers correctly, the rate of cotton AC‑134 was about Rs.109 or Rs.110/‑ per maund. He has produced no evidence in support of his contention and of which even he does not appear to be sure. As such the rates shown in the Daily Cotton Market Report Ex.6 issued by the Karachi Cotton Association Ltd. and produced by P.W. Ahmed will have to be accepted. These rates were prevailing at Karachi, but according to contract, the delivery was to be made at Multan. P.W. Fazalur Rehman has stated in his deposition as how they have calculated their claim for damages. The relevant portion of the statement is reproduced as under:‑ "On account of non‑delivery of 1,600 cotton bales by the defendants, we have filed the present suit for the recovery of Rs.1,42,433.56. This claim of damages is based on the difference of price between contracted price and the market price of the same quality of goods as prevailing on 30‑11‑1970. The market price as on 30‑11‑1970 of the contracted quality is based on the Karachi Cotton Association Bulletin. By calculating the damages we have given benefit of octroi and freight charges between Karachi and Multan as the contract was F.O.R. Multan whereas the market rate as on 30‑11‑1970 of Karachi Cotton Association was ex Karachi Godown. I may clarify that our total claim is Rs.1,42,433.56, out of which Rs.1,39,619.20 is on account of difference of contracted price and the market price as on 30‑11‑1970 and after giving adjustment on account of octroi and freight charges between Karachi and Multan as stated by me earlier, and the balance amount of Rs.2,814.36 is on account of excess payment made by us to Zafar Cotton Ginners, Multan, who has delivered us 400 bales of cotton but who had charged higher price than the price agreed in the agreement with defendant No.1." In absence of any evidence to the contrary, the evidence of plaintiff's witness will have to he accepted. My finding on Issue No.14 is accordingly. ISSUE N0.15: The suit of the plaintiff6 for Rs.1,42,433.56 is decreed with cost. Their claim for interest cannot be awarded before the damages are adjusted by the Court, and is, therefore, rejected. The judgment was announced by a short order dated 5‑10‑1987 and these are the reasons. AA./S‑176/K Suit decreed.