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Suit No.348 of 1972, decided on 24th March, 1987.

‑‑‑S.73‑‑Breach of contract‑‑Default of payment of price of goods supplied‑‑Order for supply of goods placed on plaintiff by contesting defendant, to be supplied at place of business of ex parte defendant‑ Plaintiff performed his part of contract and demanded payment‑ Defendants failing to pay price for the supplied consignment‑‑On plaintiff's suit for recovery of amount, contesting defendant taking plea that there was no privity of contract between him and the plaintiff‑ Liabilities of contesting defendant‑‑Extent‑‑Contesting defendant neither claiming in his letters written to plaintiff for supply of goods, that he was placing such order on behalf of ex parte defendant nor placing any document on record to show that in fact ex parte defendant had placed order which was conveyed by contesting defendant to plaintiff‑ Use of words "our company" by contesting defendant in one letter and describing such company as "his associate" in another letter, held, would indicate that contesting defendant was not an indenting agent but was associate of ex parte defendant on his own admission‑‑In absence of any clarification by using the words "our order", manner in which instructions regarding quality, quantity and mode of payment had been given by contesting defendant there would be no doubt left that plea of such defendant to be a mere indenting agent was an afterthought‑ Privity of contract between plaintiff and contesting defendant thus,

was proved on record.

‑‑‑S.73‑‑Civil Procedure Code (V of 1908), S.20‑‑Jurisdiction‑‑Breach of contract‑‑Liability to pay‑‑Extent‑‑Jurisdiction of Court‑‑Price of shipped material as claimed by plaintiff proved by material on record‑ Orders having been placed for shipment from 'K' from where goods were shipped and amount was to be paid, Court at 'K', held, would have jurisdiction to try the suit.‑‑[Jurisdiction].

‑‑‑S.73‑‑Breach of contract, suit for‑‑Liability of defendant‑‑Extent‑ Entitlement of plaintiff, held, was established only to cost of goods which were supplied to order of defendant‑‑In absence of evidence, plaintiff was not entitled to claim incidental loss suffered by him.

Ashiq Ali Abdullah for Plaintiff.

Mansoor Ahmad Khan for Defendants.

Date of hearing: 24th March, 1987.

The plaintiff has filed this suit for recovery of .6,233.51 in foreign currency and Rs.4,507 in Pakistani currency, alternatively for Rs.3,02,311 against the defendants. By its letters, dated 15‑5‑1971, 19‑5‑1971 and 26‑7‑1971 the defendant No.l placed orders on the plaintiff for consignment of Asbestos Cement Sheets for the total value of t.6, 233.51 which were shipped under bills of lading. This amount was payable on 60 days sight drafts drawn on defendant No.2, the consignee but the same was not paid. The defendant No.l sought extension of time upto 1st February, 1972 and finally upto 13th February, 1972 for the payment of the amounts of the sight drafts which was allowed but the defendant No.l failed to honour the commitment. As the defendant No.l did not pay the amount and the remittance could not be made the State Bank imposed a penalty of Rs.4,507 on the plaintiff. The plaintiff also lost a sum of Rs.76, 360 in Pakistani currency and had incurred an expense of Rs.1,52,720 for buying bonus vouchers for surrendering ‑L.6,233.51 to the State Bank of Pakistan. The plaintiff has also claimed a loss of Rs.68,724 being the market value of bonus vouchers equivalent to 45 of the export value of the aforesaid consignments which the plaintiff would have been granted by the Government if the defendant No.l had remitted the aforesaid amount of .6233.51 to Pakistan in time. The plaintiff served a notice. There was exchange of correspondence between the parties and as the defendants failed to pay, the suit was filed by the plaintiff.

The defendant No.2 has remained ex parte but the defendant No.l has filed the written statement. The defendant No.l denied that orders were placed by it. It was pleaded that the goods were supplied by the plaintiff to defendant No.2 directly on consignment basis and bills of Exchange, invoices and other documents were also drawn on the defendant No.2. No goods were sent by the plaintiff on account of defendant No.l. The supply of goods worth L,.6,233.51 to defendant No.2 is also denied. The sight draft was drawn on defendant No.2 with whom the plaintiff had privity of contract. The letters written by the defendant No.l to plaintiff were for and on behalf of the defendant No.2 who had asked this defendant to apply to the plaintiff for extension of time. It was denied that the defendant No.l had undertaken to pay the amount. It was pleaded that there was no privity of contract between the plaintiff and defendant No.l and, therefore, the claim is baseless. It was pleaded that on the same cause of action a suit was filed by the plaintiff in the Court of Qazi of Baldia Abu Dhabi and, therefore, the plaintiff cannot have two decrees on the same cause of action. It was also denied that Haroon Chamdia is competent to file the suit. On the basis of the pleadings the following issues were framed:‑------

(1) Whether there is privity of contract between the plaintiff and defendant No. l if so, for what amount the defendant No.l is liable

(2) Whether any goods were supplied to the defendant No.2 by the plaintiff, if so, of what value

(3) Whether the Court has jurisdiction

(4) Whether the plaintiff is entitled to claim any amount over and above Rs.72,201

(5) What is the effect of the plaintiff having already filed a case in the Court of Qazi of Baladia, Abu Dhabi and having obtained a decree there on the same cause of action

(6) Has the suit been competently filed

(7) To what relief, if any, is the plaintiff entitled

The plaintiff has pleaded that all the orders for supply of goods to the defendant No.2 were placed 'by the defendant No.l. In this regard reference has been made to Exh.8/1, 8/2 and 8/3. These letters were written by the defendant No.l placing orders for supply of goods. There is no dispute that besides these letters there are no other documents to show that orders were placed by any of the defendants in respect of the goods which were shipped to the defendant No.2. From the documents and correspondence it has been established that the plaintiff had shipped three consignments which were received by the defendant No.2 and that the value of these goods was L.6233.51. In the wake of the present controversy the defendant No.l has come forward to repudiate the plaintiff's claim on the plea that there was no privity of contract between them and that the order was placed on behalf of the defendant No.2. When the claim was first made by the plaintiff, the defendant No.l stated that these orders were placed on behalf of the defendant No.2 and that the plaintiff should make a claim to the defendant No.2. When the controversy became more serious and the plaintiff served a legal notice on the defendants, the defendant No.l's legal adviser sent a reply in which it was stated that defendant No.l was acting as post office. The object of using this word was to establish that the defendant No.l was merely an Indenting Agent. He was passing on order and communication from the defendant No.2 to the plaintiff without incurring any personal liability. However, from the letters which were issued by the defendant No.l such position cannot be claimed or established. No where in the letters Exhs.8/1, E 8/2, 8/3 the defendant No.l has stated that he is placing order for and on behalf of the defendant No.2 nor any document has been placed on record to show that in fact the defendant No.2 had placed order which was conveyed by the defendant No.l to the plaintiff. There have been past dealings between the parties and in this regard Exh.8/4 dated 10‑4‑1970 a letter from defendant No.l has been produced which reads as follows:‑-----

"Perhaps you are aware that all the shipments to Abu Dhabi of Asbestos Sheets, at our order with you, had to be hitherto made in the name of Mr. Kunwar Ismail Ali Khan, for the reason that the Trading Licence in the name of our constituted Company, Messrs Goldstone Company, was under consideration for issue by the Government authorities in Abu Dhabi. Till such time the Trading Licence, in the name of Messrs Goldstone Company, was issued, the Government of Abu Dhabi had permitted Mr. Kunwar Ismail Ali Khan to continue importing your sheets in his own name which was being done upto date.

We are pleased to inform you that the Trading Licence, in the name of Messrs Goldstone Company, has been issued with Mr. Kunwar Ismail Ali Khan as signatory partner of the said firm and with it the permission given in personal name of Mr. Kunwar Ismail Ali Khan has been withdrawn. In view of this position, we would request you to kindly make a note in your records that hence onward all the consignments of sheets ordered by us will be shipped in the name and at the address of:

From this letter two facts are clearly borne out, firstly that before the disputed consignments were shipped the defendant No.l was placing order to the plaintiff for shipment of goods at Abu Dhabi in the name of Kanwar Ismail Ali Khan and after the trading licence was received by Messrs Goldstone Co. the shipment of all the orders made by the defendant No.l, were to be made in the name of the Company. The second fact is that this is a Company of the defendant No.l as the words used are 'our company'.

The subsequent order Exh.8/1 placed by the defendants reads as follows:‑------

"Messrs Asbestos Cement Industries Ltd.

Shirin Manzil, Randal Road, Karachi‑3.

RE: SHIPMENT OF ASBESTOS CEMENT SHEETS TOTAL 4,500, TO ABU DHABI (ARABIAN GULF) ON OUR ACCOUNT.

Dear Sirs,

Further to our letter, dated 29th April, 1971 and reference telephonic talk with Mr. Altaf Ahmed this morning, we confirm that you will please now ship 4,500 sheets, duly crated secured, as done before, on same terms, as follows:‑------

Asbestos Cement Corrugated Sheets, Size

810' x 6 mm .... 1,000

Asbestos Cement Corrugated Sheets Red

Coloured light weight Sheets, Size 6' x 41 " x 4mm .... 1,000

Asbestos Cement Corrugated Sheets Size10'x42‑3/4" x 6mm

500

Asbestos Cement Corrugated Sheets Size 8' x 42‑3/4" x 6mm

1,000

Asbestos Cement Corrugated Sheets Size 61x42‑3/4"x 6mm .... 1,000

‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Total 4,500

‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Quite obviously, therefore the quantity of 2,000 sheets mentioned in our letter, dated 29th April 1971, stands revised and increased to 4,500 sheets as above which kindly note and make arrangements for its crating immediately.

You are also requested to arrange to book space for 4,500 sheets instead of 2,000 sheets.

Awaiting your confirmation to the above and thanking you we remain,

Yours faithfully,

for

(Sd.)

(M. Wasiullah Khan).

Therefore, this order is linked with the previous order of the defendant No.l. Again by Exh.8/2 the order was placed in the following manner:‑-----

"Reference meeting of Kunwer Ismail Ali Khan of Messrs Goldstone Company, Abu Dhabi and the undersigned held with your Mr. Altaf Ahmed on 17th May, 1971 we are pleased to confirm our following order with you:

(1) Asbestos Cement Corrugated Sheets, Size 10' x 3' x 6mm .... 2,500 Nos.

(2) As bestos Cement Corrugate Sheets, Size 8'x 3'x 6mm ... 2,500 Nos.

(3) Asbestos Cement Corrugate Sheets, Size 6'x3'x6mm

... 2,500 Nos.

‑‑‑‑‑‑‑‑‑‑‑‑‑

Total: 7,500 Nos.

(4) Asbestos Cement Corrugate Sheets, Red

coloured Size 6' x 41 x 6mm ... 2,000 Nos.

‑‑‑‑‑‑‑‑‑‑‑‑‑

Grand Total: 9,500 "

‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑

Please note that the sheets at Nos.l, 2 and 3 above will be shipped @ 2,500 sheets in equal proportion of each size per month on the same terms as 4,500 sheets ordered per our letter, dated 15th May 1971 and your letter No.ACI/S/EXP/71, dated 18th May, 1971 to be shipped to Abu Dhabi by first available vessel.

To avoid recurrence of mistakes caused by your Bank in respect of last shipment whereby Messrs Goldstone Company and we suffered much financially as well as in the imports of sheets, you will please ask your Accounts Department to prepare the Sight Draft in respect of 4,500 sheets as well as this order on the basis of 90 days for payment, as agreed, with clear instructions of your Bank to its correspondents in Abu Dhabi to count 90 days from the date of receipt and acceptance of the said Sight Draft by the Consignee at destination which is the normal and established practice for negotiation of such Sight Drafts. "

In this letter for the first time the defendant No.l has described Goldstone Company Abu Dhabi as his associate and also reference has been made to the fresh requirement of this Company. From this letter it is clear that the defendant No.l is not merely a post office or an indenting agent, but he is an associate of defendant No.2 on its own admission. Even in this letter he termed the order as 'Our above fresh request'. It has not been stated that the request is on behalf of defendant No.2 or the Principal of defendant No.l. The entire correspondence clearly establishes that the orders were placed by the defendant No.l for shipment in favour of the defendant No.2 who was to pay through draft as ordered by the defendant No.l and in respect of a small consignment through a letter of credit. I am not inclined to believe the explanation given by the defendant No.l in his cross‑examination that by "our order" he meant on behalf of the defendant No.2. Even the literal and dictionary meaning of the words do not support the contention of the defendant No.l. In none of the letters the defendant No.l has stated that the order was placed on behalf of the defendant No.2 and that he was acting merely as an indenting agent or an agent only. In the absence of any such clarification' by using the words "our order", the manner in which instructions regarding quality, quantity and mode of payment have been given, leaves no doubt that the plea of the defendant No.l is an afterthought and devoid of any force.

The other fact which lends support to the plaintiff's contention is that the defendant No.l has close association with the defendant No.2. In one document Exh.8/3 he admits the defendant No.2 to be his associate company. The plaintiff had filed a suit against the defendant No.2 at Abu Dhabi in respect of the same consignment. A decree was passed which is Exh.8/15 produced by the defendant No.l through the witness of the plaintiff. The defendant No.l has stated that this decree is not binding upon him as it was passed without giving notice to him. From the judgment and decree of Abu Dhabi Court it seems that the suit was filed against Goldstone Company and not against defendant No.l and, therefore, notice to him was not necessary. In that suit the defendant No.2 has admitted that Kunwar Ismail Khan, Wasiullah Khan the defendant No.l and an Arab namely Muhammad Bin Haider A1 Mohairi are the partners of Goldstone Company. This admission is binding on defendant No.2. The defendant No.l was in possession of decree Exh.8/15 which he would have either obtained directly or through defendant No.2. He has produced it through the plaintiff in cross‑examination. He would have been aware of the fact that the defendant No.2 has claimed defendant No.l to be a partner of defendant No.2 but did not produce any evidence worth the name to controvert it. He could have produced the partnership deed through the defendant No.2 or could have obtained such certificate from the relevant authority at Abu Dhabi to show that the defendant No.l has no concern whatsoever with the defendant No.2. Except a bare‑denial the defendant No.l has not brought such evidence on record. In these circumstances, the defendant No.l can be held to be a partner of the defendant Nd.2. In this view of the matter the order placed by the defendant No. l could not be treated as an order for and on behalf of the defendant No. 2. My finding on issue No.l is that there is privity of contract between plaintiff and defendant No. 1. So far the question of amount which the defendant No.l is liable to pay will be discussed in issue No.7.

ISSUE NO.2:

P.W.4 has produced the relevant documents to show that the goods were shipped to the defendant No.2. In fact there is no dispute about the quantity of the goods which were shipped. P.W.4 has stated D that the value of the goods was L.6,233.51 and this statement has gone unchallenged, therefore, my finding is that the goods worth 6,233.51 were shipped and supplied to the defendant No.2.

ISSUES NOS. 3 AND 5:

The learned counsel for the plaintiff has contended that as no cause of action has arisen against the defendant No.l and as there is a foreign judgment which operates as res judicata against the plaintiff, the Court has no jurisdiction to try this suit. In view of the finding on issue No.l the defendant No.l is liable and as the order was placed for shipment from Karachi from where the goods were shipped and E amount was to be paid this Court has jurisdiction to try the suit. So far foreign judgment is concerned it was made against the defendant No.2 and not against the defendant No.l. It is conclusive against defendant No.2.

ISSUES NOS. 4 AND 7:

The learned counsel for the defendant No.l has referred to Exh.8/16 and contended that the plaintiff cannot claim more than Rs.72,201. This is a letter issued to defendant No.2 stating that in their books of account as on 30‑6‑1972 Rs.72,201 was payable to them and they requested the defendant No.l to sign confirmation slip and sent it directly to their auditor. Such routine letters are usually written to debtors so that the liability may be kept alive and accounts may be properly made. According to the learned counsel for the defendant No.l the plaintiff had claimed Rs.72,201 and, therefore, he cannot now claim higher amount. By this letter the plaintiff had not made any claim. It was written to defendant No.2 for obtaining confirmation in respect of debit entries which were made against the defendant No.2 in the books of accounts. It does not limit the liability of the defendant F No.l. The plaintiff has claimed L,.6,233.51 equivalent to Rs.76,360 as cost of the consignment shipped to defendant No.2. The other claims include Rs.4,507 being penalty imposed by the State Bank of Pakistan, Rs.1,52,720 being the cost for purchasing bonus vouchers for surrendering L.6,233.51 to the State Bank of Pakistan and Rs.68,724 being the market value of the bonus vouchers which the plaintiff would have earned on export. Except the statement of the defendant's witness no documentary evidence has been produced to show that the State Bank of Pakistan has imposed penalty and that the plaintiff had purchased the bonus vouchers. No evidence has been produced to show that the plaintiff was entitled to bonus vouchers equivalent to 45 of the export value of the goods. In the absence of this evidence, the plaintiffs are entitled only to the cost of the goods which were shipped by them to the defendant No.2. The suit is decreed for Rs.76,358.48 equivalent to .6,233.51 at the rate of exchange of Rs.12.25 per pound Sterling with interest at 9% per annum from the date of the suit till recovery.

A.A./A‑30/K Suit decreed.

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