Nanalal Shamji vs Purushottam Umedbflai and Company

P.B. Mukharji, J.—In this suit Plaintiff Nanalal Shamji carrying on business in the firm name of Ranchoredas Purushottam at 23 Malacca Street, Singapore, and also at 19 Amratolla Street, Calcutta, is suing the Defendant Purushottam Umedbhai and Company, a firm carrying on business at 55 Canning Street, Calcutta, for the recovery of a sum of Rs. 14,664 on the allegation that the Defendant failed to deliver 100 bales heavy case to the Plaintiff under the contract, dated 18th July, 1949. In other words, this is a claim for damages for non-delivery in a contract for the sale of goods. The claim for Rs. 14,664 is said to represent the damage on the basis of difference between the contract price and the market price.

There is also a claim for special damages in the plaint. The Counsel for the Plaintiff has given up such claim for special damages, and I direct that abandonment of the claim for special damage be minuted in the records of the suit.

The Plaintiff''s case, briefly, is that by a contract in writing, dated 18th July, 1949, the Plaintiff and the Defendant agreed that the Defendant would sell and the Plaintiff would buy 100 bales of heavy case on the terms and conditions stated in para. 1 of the plaint. Plaintiff pleads that at all material times they were ready and willing to perform their part of the contract and in fact, opened letters of credit in favour of the Defendant It was the agreement of parties under the contract that the goods were to be shipped in July-August. 1949. According to the Plaintiff, the time of shipment was by mutual consent extended from time to time till the date on which s.s. "Chitung" sailed from the Port of Calcutta which on the evidence given before me is the 18th October, 1949. It is the allegation of the Plaintiff that the Defendant failed and neglected to ship or make delivery of the goods under the said contract. As a result, the Plaintiffs plead that by their solicitor''s letter, dated the 26th November, 1949, they put an end to the contract.

The written statement filed on behalf of the Defendant takes the defence that the contract was subject to the relevant export regulations of the Government of India. The Defendant pleads that at all material times there was in force an order of the Government of India requiring as a condition precedent before issuing an export licence all foreign buyers of jute and jute products to furnish guarantee from the relevant Local Government that the goods would not be re-exported by the buyers to South Africa. It is the Defendant''s case that the Plaintiff though aware at all material times of the said order of the Government of India failed and neglected to furnish the required guarantee as aforesaid in spite of requests. Therefore, the Defendant pleads that it was impossible on the part of the Defendant to export the said goods in terms of the contract. The Defendant denies that there was any mutual consent to extend the date of shipment.

The following issues were settled by the court and accepted by the Counsel on either side:

(1) Was the contract in suit subject to the relevant export regulations of the Government of India?

(2) Was there in force an export regulation requiring as a condition precedent before the grant of any export licence?

(a) Are foreign buyers of jute and jute products to furnish guarantee from relevant Local Government that the goods would not be re-exported to South Africa?

(b) Did the Plaintiff fail and neglect to furnish such guarantee in respect of the goods covered by the contract in suit?

(c) If so, did it become impossible on the part of the Defendant to export the said goods in terms of the said contract?

(d) Was the Defendant in the circumstances discharged from performing the said contract?

(3) (a) Was the time for shipment of the goods extended from time to time by mutual consent and agreement between the parties till the date on which s.s. "Chitung" sailed?

(b) Did the Plaintiff extend the validity of the relative letter of credit and make it effective till the extended date, i.e., the date on which s.s. "Chitung" sailed?

(c) What was the date on which s.s. "Chitung" sailed?

(4) Has the Defendant committed breaches of the said contract?

(5) What damages, if any, has the Plaintiff stiffered?

(6) Is the Plaintiff entitled to claim interest by way of damages?

(7) To what relief is the Plaintiff entitled?

There is a brief of documents most of which are admitted and the few documents that are not admitted have been proved. The brief of documents has been marked Ext. "A"

On behalf of the Plaintiff (1) Debji Gopal Das Sha, Manager of the Plaintiff firm Ranehoredas Purushottamdas, (2) Javerilal Mehta, representative of M. Jamunadas and Company, Singapore, and a former employee of Pannaehand & Company of Singapore, (3) Jitendra Mohan Seth, a broker of a Company by the name of Jewan Lall and Company, Bombay, (4) Sachindra Nath Ghosh, an officer of the Chartered Bank, Calcutta, and (5) Dinendra Nath Dutt Roy, an Upper Division Clerk of the office of the Deputy Controller of Exports, gave evidence.

On behalf of the Defendants (1) Umedbhai Kushalbhai Patel, a partner of the Defendant firm, (2) Chinta Haran Samajdar of the Commissioners of the Port of Calcutta, (3) Jayanti Lai Doshi, a partner of the firm of Hossain Ibrahim and (4) C.R.B. Menon, Director of Commercial Intelligence and Statistics of the Central Government, gave evidence.

Issue 1

The evidence of Dhirendra Nath Dutt Roy, the Assistant Controller of Imports and Exports, Government of India, and at present attached to the Office ot the Joint Chief Controller of Imports and Exports, of Debji Gopal Das Sha and of Umedbhai Patel and Jayanti Lai Doshi all establish beyond doubt that in the matter of export, the exporter has to obey the regulations issued by the Government of India from time to time in respect of various goods. In fact the documentary evidence in this case is quite clear. The trade notice marked Ext. G published by the Ministry of Commerce. Government of India, reproduces the Press Note issued by Government, dated 11th August 1949, for the general information of the trade. That Press Note reads:

Licences for export of jute goods to Singapore and Malayan Union will be issued to those firms who are able to produce to the satisfaction of the Deputy Chief Controller of Imports and Exports, Calcutta, a guarantee against re-export to any destination whatever from the Malayan Government.

This was modified later by a further notice which is to be found in the admitted brief of documents as Defendants'' document No. 14. This notice says that the procedure for export of jute goods to Malayan Union and Singapore is modified and the modification which was published for general information of the trade reads as follows:

In a Press Note issued on the 11th August 1949 it was provided that licences for export of jute goods to Malayan Union and Singapore will be issued to those firms who are able to produce to the satisfaction of the Deputy Chief Controller of Imports and Exports, Calcutta, a guarantee against re-export to any destination whatever from the Malayan Government. The matter has been considered further and it has row been decided to grant licences for export of jute goods to the destinations referred to, to firms who are in a position to produce from the Malayan Government a guarantee against re-export to South Africa only, and not necessarily other destinations.

This notice is dated 25th August, 1949.

It is clear from the above two notices that the contract in suit which was one for jute goods was subject to those export regulations of the Government of India as published in the Notification and the Press Note.

The contract in this suit was made on the 18th July, 1949. At the date of the contract therefore there was no export regulation requiring that the export under this contract would be made only on the condition that the buyer gave a guarantee that it would not be re-exported. While at the time of the contract no guarantee from the buyers against re-exports was required, yet during the currency of the contract under which the shipment could be made by the seller at any time between July and August, 1949, this requirement of a certificate from the Government of the land of the buyer against re-export was introduced. It was introduced on the 11th August, 1949 when it was provided that the guarantee would be against re-export of those goods to any part of the world. This was modified on the ?5th August by saying that the guarantee against re-export was only with reference to South Africa and no other destination.

Now, the contract in writing, dated 18th July, 1949 has no express term to suggest that it was to be subject to the relevant export regulation of the Government of India. I am of the opinion that every export contract is subject to such regulations as may from time to time be imposed and that is an implied term of such a contract arising from the nature of export trade in the modern age. Such export regulations are part of the law of the land and the export contract is in my opinion subject to such law.

The conduct of the parties is such that it is nobody''s case that the contract in suit was not subject to the relevant export regulations of the Government of India. In fact, when the Defendants on the 18th August, 1949 wrote to the Plaintiff enquiring whether they had heard that consignees at Singapore were required to give a certificate from their Government that the goods would not be re-exported from Singapore, although they preferred a mild protest in their reply of the 22nd August, 1949, the Plaintiffs did not pursue the point that they were not obliged to furnish a certificate of the Malayan or Singapore Government. In fact, it is the Plaintiffs'' case that they did furnish such a certificate and not that such certificate was not necessary to be furnished by them. On these materials therefore I hold that the contract in suit was subject to the relevant export regulations of the Government of India, and answer the first issue in the affirmative.

Issue 2(a)

I have already stated that there was in force an export regulation from the 11th August, 1949 modified on the 25th August, 1949 which required all foreign buyers of jute and jute products to furnish a guarantee from the relevant Local Governments that the goods would not be re-exported to South Africa. The official Notification published by the Collector of Customs is sufficient proof in support of this point and is a document marked as Defendants'' document No. 14 admitted in the brief of documents. I therefore, answer issue No. 2(a) in the affirmative. The controversy whether such guarantee was required to be furnished at the stage of applying for export quota licence or at the time of actual export is therefore immaterial in this context.

Issue 2(b)

This raises the question whether the Plaintiff failed and neglected to furnish such guarantee in respect of the goods covered by the contract in suit. As will be seen from the Government Notification, that certificate was to be produced from the Malayan Government or, rather, a guarantee from the Singapore Government that the goods which were being imported by the Singapore buyer would not be re-exported to South Africa Now, being a certificate of the foreign Government, it could not be the obligation of the Indian seller to procure it. From the very nature of the case, it must be an obligation which ought to attach and should attach on the buyer for the guarantee of non- re-export could only be given by him. It is for the buyer to produce the certificate from the Government under whose jurisdiction he carried on business and where he is an importer, to furnish that certificate. It is, therefore, in my Judgment, the Plaintiff''s obligation as a buyer in this case to furnish much certificate form the Singapore Government.

The question then is did the Plaintiff furnish such a guarantee? It is necessary to analyse the evidence on this point in order to come to the conclusion whether in fact the guarantee was furnished by the Plaintiff as alleged.

The letter of the 27th August, 1940 from the Plaintiff to the Defendant stated:

We have already furnished you a guarantee as required by you, although according to the terms of the contract you were bound to ship the goods without any sort of guarantee from us.

This letter in original has been marked as Ext. I. It is an air letter written in type and at the end of that letter is an endorsement. The copy as included in the admitted brief of documents does not disclose the manuscript writing in ink, below the interrogation mark. That manuscript writing says "Enclosed "guarantee against South Africa". There could be no enclosure in an air letter. When the original was produced in court Debji Gopal Das She had to admit in Q. 196 that possibly he intended to enclose a guarantee against South Africa and therefore he put an interrogation mark. In fact the answer in his own words is this ''Possibly I intended to enclose a guarantee against South "Africa because I have put a question mark. Since this new "guarantee could not be enclosed I saw that nothing was enclosed". Then I asked him that in the body of the letter he had already said that he had furnished a guarantee. So there was no occasion for enclosing another guarantee. In answer to Q. 198 he said that that guarantee was against re-export to all destinations and this was a guarantee against South Africa. In Q. 199 he says that he does not always write the word "enclosed"'' at the bottom of the letter when he was enclosing a document. He admitted (0. 201) that he could not enclose any guarantee in the air letter. Then when I pressed him to say why there was this interrogation mark in the manuscript writing he said in answer to Q. 202: "I am not able myself to explain this writing now after seven years. I "am not able to explain myself". Obviously from this evidence and from the manuscript writing in ink which is made by him on the air letter, it is clear that it is not at all certain whether in fact a guarantee against re-export to South Africa had at all been furnished by the buyer to the seller.

It is necessary to refer to a prior letter before proceeding further with the document on this point. It is the Plaintiff''s letter, dated the 25th August, 1949. In that letter the Plaintiff wrote: "Please, find enclosed a guarantee against 200 bales "which is in order. Please ship the goods by the first steamer "according to the terms of the contract". The contract in this case was only for 100 bales but anyhow here was a statement in the body of the letter that a guarantee was enclosed for 200 bales. At the end of the letter the word "enclosed" is not written. Now neither to the letter of the 25th August, 1949 nor to the letter of the 27th August, 1949 where the allegation was made by the Plaintiff that the guarantee had been enclosed was there any reply by the seller denying the receipt of such guarantee. When on the 7th September, 1949 the Plaintiff wrote saying that they had supplied the required guarantee the Defendant seller replied on the 10th September, 1949 saying, "You have not supplied the required guarantee and if you do so that will only be "helping your own shipment and not helping us". There was therefore, a categorical denial by the seller in this reply of the 10th September, 1949. They denied the receipt of any guarantee although, the Plaintiff buyer had alleged in the two previous letters of the 25th and the 27th August, 1949 that they had enclosed a guarantee. Now curiously again although the seller this time expressly said that no guarantee had been received by the seller and although this letter was duly received by the Plaintiff buyer there was no reply from the Plaintiff buyer saying that the guarantee had been duly sent to the Defendant seller. That appears to support the view that guarantee against non-re-export to South Africa was not in fact supplied by the buyer. Debji Gopal Das in his evidence offered a curious explanation on this point. He said that he came to Calcutta at that time and when he took Umedbhai to task for having written that letter of the 10th September, 1949 denying the receipt of the guarantee. Umedbhai was supposed to have apologised to him. I am not impressed by this attempt by Debji Gopal Das to explain the absence of any written protest against the Defendant sellers'' statement that no guarantee had been supplied to them. Although no formal denial was taken from Umedbhai when he came to the box that he did not offer any oral apology to Debji Gopal Das, yet the fact remains that he made it quite clear that he never received the guarantee from the Plaintiff. In Q. 42 he said that he did not receive the guarantee mentioned in the letter of the 25th August, 1949 and then again in answer to Q. 105 he said that he did not get any guarantee at all. Finally in answer to Q. 119 and Q. 120 Umedbhai has stated that he got the letter of the 25th August, but there was no enclosure with it and that he did not get any enclosure.

In this state of disputed testimony on the question whether in fact the guarantee was at all sent by the Plaintiff to the Defendant it is necessary to examine whether the Plaintiff has been able to furnish before the Court unquestionable proof of the issue of such guarantee from Singapore and Malayan Governments. It is strange that no copy even of the application that the Plaintiff must have made to the Government authorities at Singapore and Malaya for the issue of this guarantee has been produced. Secondly no copy of the certificate that is alleged to have been issued by the Malayan and Singapore Governments has been produced by the Plaintiff. It is extremely strange that the Plaintiff would keep no record of either the application to the Government for such a guarantee or a copy of the certificate of such guarantee after it has been issued by the Singapore or Malayan Government. It is strange because if the original guarantee which the Plaintiff alleges to have been sent to the Defendant got lost in the transit, how was it to be identified and traced? I have no doubt in my mind that there was a definite date and a definite number serial or otherwise with statement of specific goods by which the particular guarantee could be identified. The Plaintiff produced no books or register to show how the guarantee was sent. After all the guarantee was an important document. Nothing appears on record whether this original guarantee was sent under an insured or registered cover. Even if the Plaintiff had no copies or books or register to prove the grant of the guarantee, the easiest thing for the Plaintiff would have been to call for the evidence of the Governmental records of Singapore and Malayan Governments to prove that such and such guarantee was issued to the Plaintiff on such and such date in respect of such and such jute to be sent by the Defendant. Failure to produce this cognet evidence leads me to the conclusion that in fact no guarantee was supplied by the Plaintiff buyer to the Defendant seller.

I, therefore, answer issue 2(b) in the affirmative and hold that the Plaintiff failed and neglected to furnish the guarantee in respect of the goods covered by the contract in suit.

Issue 2(c)

Issue 2(c) raises the consequential question that if there was such failure by the Plaintiff to furnish the guarantee then did it become impossible on the part of the Defendant to export the said goods in terms of the contract? Having regard to the export regulation preventing export from India without such a guarantee it must follow that the Defendant seller could not possibly perform the contract by committing breach of the Export Regulations and thereby incurring- the penalty and punishment from his own Government here. I, therefore, answer this Issue 2(c) in the affirmative.

Issue 2(d)

Issue 2(d) also is a consequential question whether the Defendant in the circumstances is discharged from performing the said contract. If the view that I am taking is correct then the Defendant is discharged from performing his part of the contract because he could not perform his part of the contract on the ground that the buyer did not produce the guarantee from his own Government against re-export of these goods to South Africa.

It is necessary to notice some of the decisions which have been cited at the bar.

Mr. Dutt, learned Counsel appearing for the Defendant, relied on the case of H.C. Brandt Company v. H.N. Morris and Company Ltd. (1917) 2 K.B. 784 He relied on this case, first, for the proposition that the obligation of applying for licence in these circumstances always lies upon the buyers and not upon the sellers. Mr. Dutt also relied on the case of The Anglo Russian Merchant Traders Ltd. v. John Bait and Company (London) Ltd. (1917) 2 K.B. 679. and the observation of Viscount Reading, 0. J., at p. 688 that the sellers in these contracts are entitled to the whole of the time mentioned in the contract to perform their part of the contract. The fact, therefore, that between the 18th July, 1949 when the contract in this suit was made and the 11th August, 1949 when the first restriction in export on the basis of guarantee against re-export came into force, the seller did not avail himself of the opportunity to ship the'' goods is, therefore, not a point against the seller. Under the contract the shipment was to be made "July-August, 1949. Sellers option".

Therefore, it is clear in the facts of the present case that it was the option of the seller whether he should perform the contract in July or August and he had either month to perform it and he had the whole of the month of August to make the shipment. Mr. B. C. Mitter learned Counsel for the Plaintiff to counter the effect of observation of Viscount Reading, C. J. cited the case of Ross T. Smith Company Ltd. v. W.N. Lindsay Ltd. (1953) 2 All E.R. 1064 where Devlin, J. tried to distinguish this case by saying that if the order for control of export was not of "instantaneous operation" but gave a time limit as it did in that case from October 20, 1951 to November 1, 1951, then it was necessary for the sellers to show that they did their best within that time to make the shipment because if they could ship within that time they could have avoided the numerous restrictions which were coming into operation on November 1, 1951. I do not think that distinction, even if it is good, applies to the facts of this case, because in this case the order of control -whether of the 11th August or the 25th August was instantaneous and gave no future time within which the export traders could adjust their obligations and rights. Devlin, J. at p. 1065 of the Report said that if a party was going to rely on a prohibition of export or frustration whichever it was, he was to show that it covered the whole contract period and if it covered only a part of the period which the contract gave for shipment,. then performance of the contract was not rendered impossible and, according to Devlin, J., it was merely rendered more difficult for the seller. I am unable to apply that doctrine to a case like the present one before me where it is expressly said to be the seller''s option to ship either in July or August, 1949 and to hold that because he did not ship before the 11th August or the 25th August when the Export Regulation in this case came into force, therefore, it was a case of self-induced frustration. In fact it is not really a case of frustration at all but a breach of the buyer''s obligation to furnish the guarantee required by law and thus rendering the contract incapable of performance by the seller.

I, therefore, answer both Issues 2(c) and 2(d) in the affirmative.

Issue Vo. 3

This issue relates to the question whether time for shipment was mutually extended or not. As I have already quoted the words of the contract, dated July, 18, 1949, the time for shipment thereunder was July-August, 1949. According to the Plaintiff''s case, this time was extended till the date of the sailing of s.s. "Chitting". For this purpose the Plaintiff relies on the correspondence between them and their bankers opening the letter of credit and the arrangement the Plaintiffs were making with their own bankers about the extension of such letter of credit, first on the 30th of September, 1949 and thereafter till the 10th October, 1949 and finally till the 15th October, 1949 or date of shipment by s.s. ''''Chitting". The Plaintiff''s document No. 9 which appears in the admitted brief of documents sets out the telegram from the Netherland Bank, Singapore Agency, informing the Plaintiff that the letter of credit had been extended till the September, 30. The telegram asked the Plaintiff to inform the beneficiary, namely, the Defendant, about such extension. By a letter dated the 9th September, 1949 such intimation was duly conveyed to the Defendant. The letters, dated September 26, 1949, September 2T, 1949, and September 30, 1949 appearing in the brief of documents although at first not admitted have been now proved and admitted in evidence. They show the extension first up to October 10, and thereafter to October 15, or the date of sailing per s.s. "Chitting". The letter of October 3, 1949 which is an admitted document written by the Plaintiff to the Defendant informed them that the letter of credit had been extended to October 15, and quoted the Bank''s telegram, "notify "beneficiary shipment not later than 15th next month shipment "per ''Chitting'' notify beneficiary urgently".

Mr. Dutt has argued that these letters and extensions of letters of credit were all unilateral in the sense that the Defendant never agreed to such extension. I am unable to accept his submission. It is true that there is no letter from the Defendant accepting such extension. I am satisfied on the evidence that the Defendant knew about this extension and if the Defendant was not prepared to accept such extension, he should have written to say so either to the Bank or to the Plaintiff. But they have never done so. In fact, even in the letter of September 7, 1949, which is an admitted letter appearing in the brief of documents, the Plaintiff expressly wrote to the Defendant, "Our L. C. expired on 31st "August, 1949. However we have arranged to extend the same "further for your convenience If the Defendants were not prepared to accept that convenience, they should have protested.

I am,therefore, satisfied on the materials before me in spite of the absence of a written consent from the Defendant that the date of shipment was extended by mutual consent which I shall infer from the conduct and the silence of the Defendant. I also hold on the evidence that such extended date covered the loth October or the date of sailing of s.s. "Chitting". I have preferred to rely on the question of extension of letter of credit more on the conduct of parties that on their verbal testimony such as Debji''s answers to Q. 216 to 0. 251 and Umedbhai''s answer to Q. 125 to Q. 165.

With regard to Issues 3(a) and 3(b), evidence has been given by Chinta Haran Samajdar of the Port Commissioners of Calcutta to say that the actual date of departure of s.s. "Chitung" from Garden Beach was the l8th October, 1949, and he has proved it from the Inward Draft Book of the Harbour Master''s office. I shall, therefore, answer Issue No. 3(a) by saying that October 18, 1949 was the date on which s.s. "Chitting'' sailed. I answer Issue No. 3(6) by saying that the Plaintiff did extend the validity of the relevant letter of credit till either October 15. 1949 or the date of sailing of s.s. "Chitting". That there is a difference of three days between October 15 and October 18, does not in my mind make any difference. The letters to which I have already referred show that the letter of credit was extended by reference to date as October 15, and also by reference to the event, namely, the departure of s.s. "Chitting". If therefore, the event was later than the 15th I would certainly hold that the letter of credit had been validly extended till the 18th October, 1949 and answer Issue No. 3(b) accordingly.

Issue No. 4

Having regard to my findings on Issue Nos. 1 and 2, it must follow that the Defendant did not commit breach of the contract. My finding is that the contract was rendered incapable of performance by the seller by reason of the fact that the Plaintiff did not furnish the guarantee legally required from the buyers to be supplied by the Government in whose land the buyers were importing the goods.

This issue raises the question: what damages, if any, has the Plaintiff suffered? Having regard to my findings on the previous issues, the question of the Plaintiff''s suffering any damage does not any more arise. For the reasons already stated, I hold on the issue that the Plaintiff has suffered no damages. This finding is on the ground that no breach of the contract was committed by the Defendant. The breach, was of the Plaintiff in not supplying the requisite guarantee under the law.

But as a trial Court I shall record the arguments on this point. The contract in this case was a C.I.F. contract. Mr. Dutt argued that if there was breach on the part of the Defendant, such breach was non-supply of the goods on the expiry of the letter of credit, that is, on the 18th of October, 1949. According to him, the date of the breach is October 18, 1949.

Then Mr. Dutt argued that there was really no evidence of the Singapore rate at all on October 18, 1949. The evidence of rates is that given by the witness Javerilal Mehta who proved the Bill Books of Pannachand and Company, a well-known businessman in jute export and import of Singapore. In answer to Q. 23 he stated that bill No. 183, dated October 20, 1949 to Manila and Sons showed that five bales of gunny bags of the heavy case type were sold at 142 dollars per 100 sacks. But even this rate on October 20. 1949 was not in respect of C.I.F. contract. The second comment of Mr. Dutt on the evidence of damages is that the rates spoken of by Mehta in his evidence are in respect of ex-go down sales. According to Mr. Dutt and I think it right that such ex-go down charges will include Port charges and import duties which are not included in C.I.F. contracts such as the contract in suit. Therefore he submits that such rates are no guide at all to determine the rate of damage in this case. Thirdly Mr. Dutt''s submission is that before any rate that Mr. Mehta gave in evidence could be applied in the present case it should be established whether those rates were in respect of jute goods which did not suffer from restriction against re-export which the goods under the contract did. Naturally goods free to be exported to any part of the world without restriction and goods such as the one under the contract which cannot be re exported to South Africa cannot have the same rates. There is no evidence as to whether Manilal and Sons re-exported the goods to south Africa. If there was stoppage of re-export to South Africa then the goods under the contract in suit would fetch a different and in all probability a much lower price than the goods which did not suffer from such restriction. Mehta''s evidence, however, is that these goods were all imported from India and it was not a case of selling old stock. But that was merely his oral testimony unsupported by any corresponding entries in the books of Pannachand & Company showing when and under what circumstances the goods shown to be sold by the bill books were imported to Singapore. On these grounds Mr. Dutt submits that there is really no legal proof of damage given by the Plaintiff. Umedbhai Patel was asked in cross-examination questions Nos. 175-176 and in answer to them he said that the price of jute goods rose in Calcutta after the contract, dated the 18th July, 1949 and that such price was steadily rising till the first week of October, 1949. Debji Gopal Das said in QQ. 204-206 that the Singapore market was falling at the time when he wrote the letter of the 27th August. But there is no evidence as to whether the Singapore market was rising or falling in October, 1949. Then Mr. Dutt for the Defendant argued that the market rate that should determine the damage in this case was the market rate prevailing in Calcutta and not at Singapore. He made this argument with a view to avail of the fact that the Calcutta market in jute became a controlled market from October 10, 1949 because of the Jute Goods Export Control Order, 1949. According to the Jute Goods Export Control Order of 1949 the price of jute for this type of goods would be Rs. 172-15-6.87 pies. The agreed rate between counsel on the basis if the Jute Goods Export Control Order applied to this case is to be found in Ext. A. Now if the rate is Rs. 172-15-6.87 pies then there is no damage because the contract price was Rs. 180 per 100 bags. The market price being lower than the contract price there would be no damage for the Plaintiff even if he had suffered any loss.

The ma;a difficulty, however, on this point for Mr. Dutt is the decision of the Privy Council in Sally Wertheim v. Chincontimi Fulp Company (1191) A.C. 301. where the market price was taken to be the price that was ruling at the port of delivery and not at the port of shipment. But that doctrine may have to be modified with reference to the facts of the present case, because it is in evidence that jute could not be purchased at Singapore and almost the whole of it came from India. If the buyer had to purchase jute again in India then the Indian market was a controlled market at the time. It is, however not necessary for me to pursue the matter having regard to the view I have taken.

Mr. Mitter for the Plaintiff submitted that in a C.I.F. the breach is not at the date of shipment but when the shipping documents are to be delivered at Singapore. Normally on the strength of the decisions in Biddel Bros v. E. Clemens Horst Company (1911) 1 K.B. 214. and C. Charpe Ltd. v. Nosawa and Company (1917) 2 K.B. 814. that would seem to be the result. But where there is a letter of credit and the buyer opens a letter of credit in Calcutta and the Calcutta constituent receives the shipping documents then it seems to me that the date of shipment and the date of delivery of the goods are about the same, because the moment the shipping documents are given to the Calcutta constituent the seller is completely discharged and the title passes out of his hands. The decision in Biddel Bros, (supra) is really not a decision on the date of breach but is a decision that a seller has the right to get paid against shipping documents, Mr. Mitter tried to argue that handing over the shipping documents to ''the Calcutta constituent did not establish any privity of contract between his client the buyer and the Calcutta constituent and for the purpose he relied on the second and third paragraphs of Section 192 of the Indian Contract Act. I am afraid, I am of the view, that the first paragraph of Section 192 of the Contract Act answers the position better. Now the position is that the buyer in Singapore in this case asked the Singapore Bank to open a letter of credit in Calcutta. That letter of credit was opened by the instrumentality of the Singapore Bank through its constituent in Calcutta. It may be true that so far as the Calcutta constituent is concerned there is no privity of contract between the Calcutta constituent and the buyer and that such privity of contract was only between the buyer and his Bank at Singapore. Mr. Mitter, therefore, tried to say that the Calcutta constituent was in the nature of a sub-agent of the buyer. But the point is that the sub-agent represents the principal completely under the first paragraph of Section 192 of the Contract Act and the Calcutta constituent as the sub-agent in receiving the shipping documents on the sale in Calcutta must be in a position to represent the principal buyer completely. I am, therefore, of the opinion that the handing over of the shipping documents to the Calcutta constituent was the same as the handing over of the shipping documents to the buyer and specially so la this case where the Calcutta constituent was a mere branch of the Singapore Bank.

It is unnecessary for me to say anything more on this point or to quote Article 290 in Vol. XXIX of Hailsham''s Laws of England where it is stated that where payment is to be made by a Bank under a form of credit the place of tender would be the Banker''s place of business.

Issue No. 6

This was a claim by the Plaintiff for interest by way of damages. This claim has been abandoned by Mr. Mitter, learned Counsel appearing for the Plaintiff. That fact is recorded here. No finding, therefore, is. necessary on this issue.

This is the issue asking'' what relief, if any, is the Plaintiff entitled. On my finding that the Defendant seller in this case did not commit any breach of contract and on my further finding in this case that the failure of the Plaintiff to supply the legally necessary guarantee against re-export from the Malayan and Singapore Governments was the reason for the Defendant''s inability to export the goods to the Plaintiff, I must hold that the Plaintiff is not entitled to any relief.

The suit, therefore, must fail and is dismissed with costs. Certified as a fit case for employment of two Counsel.