The plaintiff placed an order for import of 5,000 tons of white crystal sugar from Hamburgat --. 22, 16-6 per ton C.I. F-Karachi. In this connection the plaintiff purchased Bonus vouchers of the total value of Rs. 13,08,201 and opened a Letter of Credit in favour of the sellers in Germany on 3-10-1968 through the Muslim Commercial Bank Limited, Karachi. In terms of the Letter of Credit the sellers shipped the consignment but before the goods arrived at Karachi the Central Government notified an order in exercise of its power under section 3 of the Essential Commodities Act, 1957 ride Notification No. S. R. O. 185 (R)/68), dated 17-10-1968, providing that all persons who have booked orders for importation of sugar into West Pakistan from abroad shall sell the entire quantity to the Trading Corpora--tion of Pakistan, Karachi, prescribing the maximum price. The plaintiff accordingly informed the authorities the details of the consignment ordered by them. The consignment arrived at Karachi on or above 11-12-1978.
2. In the events that happened, however before the arrival of the consignment the Government of West Pakistan issued a Notification dated 21-10-1968 in exercise of power under section 3 of the West Pakistan Foodstuffs (Control) Act, 1958 ordering that "all stocks of sugar imported by private importers, which have arrived at Karachi on 17-10-1968 or which may arrive thereafter, shall be sold to the Trading Corporation of Pakistan, at the cost price plus six per cent. Profit thereon." It appears that the Central Government rescinded the earlier notification issued under the Essential Commodities Act, 1957 on 1-11-1968.
3. Immediately after the arrival of the consignment at Karachi the plaintiff handed over the shipping documents to the defendant and the defendant cleared the consignment through their Clearing Agent after paying Customs duties and other charges. According to the plaintiff they submitted to the defendant two separate statements of account of the total landed cost of five thousand metric tons of sugar which came to Rs. 79,47,913.83. On the other band it is the case of the defendant that the plaintiff had submitted a bill for Rs. 37,34,667. Inclusive of 6 % of profit through their bankers and accordingly the defendant paid a total sum of Rs. 37,30,321.76 inclusive of 6% profit on the cost price. According to the plaintiff the defendant paid an amount of Rs.
39,21,570 and Rs. 39,430 towards customs duties and clearing charges respectively. The case of the plaintiff is that this amount was paid on behalf of the plaintiff and would include the cost price of the goods for all intents and purposes including for the computation of 6 % profit in terms of the Government Notification. The re-cost issues finally adopted by the Court were as follows :-
(1) Whether the plaintiff was required to sell the consignment in suit to the defendant in terms of Public Notice No. S. R. O. 185 (R)/68, dated 17-10-1968 at a profit of 6 %, on total landed cost, or in terms of Public Notice No. S.O.F. (Sugar) 5 (59)/67, dated 21-10-1968 at cost price plus 6 % profit thereon.
(2) Whether the plaintiff waived its rights if any, to claim from the defendant any amount in addition to the amount mentioned in the statement of account forwarded with its letter dated 6-11- 1968 on account of statement contained in the said letter of 6-11-1968.
(3) Whether the plaintiff is entitled to receive from the defendant Rs. 2,56,592.07 or any part thereof from the defendant.
4. At the trial the learned counsel for the parties admitted 12 documents which were exhibited in the evidence with consent of the parties. Additionally oral evidence was recorded in support of the case of both parties. The plaintiff examined Mr. Mansoor Ali, Manager of the plaintiff Company. He has stated that Rs. 35,02,271.87 was the C. I. F. Value of the consignment and does not include the customs duties, sales tax, clearance charges, cartage and profits. He said that the plaintiff claimed 6 % on the C.I. F. Value of the consignment as they were not aware of the legal implications.
5. Defendant's witness Muhammad Aslam Siddiqui, testified that the plaintiff had claimed the cost of the sugar at 6 % profit through their letter dated 6-11-1968 (Exh. 11). This letter enclosed the statement of details of the C.
1. F. Cost of the consignment and included profit at 6 %. The statement of costs forwarded by the plaintiff is also on the record (Exh. 12). In this statement the total C. I. F.
Value of the consignment is shown Rs. 35,23,271.87. On this figure the plaintiff claimed 6 % towards the profit allowed under the Notification at Rs. 2,11,395.46. Thus according to Exh. 12 the total dues of the plaintiff in relation to the consignment in question came to Rs. 37,34,667.33. The witness admitted in answer to a question in the cross-examination that the defendant had paid the profit on the amount paid by the importers towards the customs duty and sales-tax in other cases. This he explained, to be in accordance with the Government notification, so that if the importers paid the customs duty etc., themselves and then furnished the documents to the defendant, the profit was worked out on the total expenses incurred on the import of the consignment. However he admitted that the plaintiff had not refused to pay customs duty and sales tax as it was not called upon to do so.
6. Issue No. 1 was not pressed by the parties as it is common ground that the governing statutory document is the Notification of West Pakistan dated 21-10-1968 (Exh. 9).
7. The only question that arises for consideration under the remaining two issues is whether the plaintiff is entitled to 6 % profit on the total amount paid on the importation of the consignment of sugar inclusive of customs duty, sales tax and other charges or only on the C. I. F. Value of the goods before its clearance from the port. In other words the question is as to the meaning of the words "cost price" used in the notification in question. In order to appreciate the contention of the learned counsel it will be necessary to set down the contents of the Notification of Government of West Pakistan dated 21-10-1968 which is in the following terms :- "In exercise of the powers conferred by section 3 of the West Pakistan Foodstuffs (Control) Act, 1958 (West Pakistan Act XX of 1958), the Governor of West Pakistan is pleased to order that all stocks of sugar imported by private importers, which have arrived at Karachi on 17th October 1968, or which may arrive thereafter, shall be sold to the Trading Corporation of Pakistan, at the cost price plus 6 % profit thereon."
8. Mr. Chundrigar, learned counsel appearing for the defendant compared the language of the aforesaid Notification with the previous Notifi--cation issued by the Central Government dated 17- 10-1968. He pointed out that the previous Notification clearly indicated that 6--o profit was to be allowed on the cost of the goods inclusive of all duties and charges payable for the clearance of the goods from the customs. In this connection he referred to the words "immediately upon its clearance from the customs for home consumption, at price not exceeding the aggregate of the landed cost, the usual incidental expenses and 6 % of margin of profit." In view of this explicit language, counsel argued that under the previous Notification, the position was clearly that the profit was to be worked out with regard to the total expenses involved on the import of the consignment of sugar in the manner now claimed by the plaintiff. But according to the learned counsel there was a material change in the language of governing Notification issued by the Government of West Pakistan, in so far as the word "landed cost" was omitted and no reference to the usual incidental expenses has been made. He, therefore, contended that this change of language clearly expresses the intention of the authorities to confine the meaning of the expression "cost price to actual C. I. F. Cost excluding duties and charges. This is how the plaintiff itself understood the meaning of the notification. It was also pointed out that the words "immediately upon its clearance" used in the previous notification are conspicuously missing in the present Notification. In the alternative Mr. Chundrigar contended that in any case by claiming profit only on the landed cost of the goods, the plaintiff waived their rights to claim profit on the customs duty and other charges paid by the defendant.
9. Mr. Mohsin Tayabali, learned counsel for the defendant contended on the other hand, that the words "cost price" are words of larger import and mean the value of the goods which is the cost of the goods to the importer in ordinary course of business. He submitted that there are other expressions of common mercantile use relating to the price of goods purchased from a foreign seller fixed at different stages of purchase down the line up to the actual importation of goods in the consignee country. In this behalf he referred to the expression "ex-godown price" which a term means at which the goods are sold at the stage when they come to the barges, in other words, F. O.
B. Price. He next referred to the C. I. F. Cost, which includes the cost of the voyage inclusive of insurance and freight. The next stage is the price known as the "landed cost" which is a stage before the goods are cleared from the customs. After the goods are cleared from the customs upon payment of customs duty, sales tax and other charges the value of the goods is described as "delivered cost". Finally when the goods reach the warehouse of the importer, the value of the goods is then described as "imported cost" Having regard to all the stages at which the value of the goods can be determined in relation to the cost price, learned counsel for the defendant contended that the language employed in the Notification clearly indicates that the profit was payable on the "imported cost" of the goods which means the cost of the goods to the importer at the point of time when they are read to be sold to the customer.
10. The expression "cost price" has not been defined in any of the statutes under which two Notifications were issued by the two Government. No other statute has been referred where this expression has been defined. The intention of the law-maker can, therefore, be ascertained, by construing the meaning of the words used in the ordinary grammatical sense in the light of the entire text of the Notification. It was conceded by Mr. Chundrigar that both Notifications were aimed at achieving the same object regarding the importation of sugar in West Pakistan. Now the West Pakistan Foodstuff's (Control) Act, 1958, as its preamble would show, was enacted in order to empower the Government to "control the supply, distribution and movement of, and trade and commerce in,-Foodstuffs in West Pakistan". Section 3 of the aforesaid Act confers powers on the Government to issue notified orders for the purposes of maintaining supply of any Foodstuffs or for securing its equitable distribution and availability at fair prices. It would be appropriate to construe the meaning of the Notification having regard to the larger back--ground of the object and purposes of the legislation. Clearly the statute in question has the effect of encroaching of the rights of the subject as to freedom of contract and, therefore, in view of the well established principles for the interpretation of such statute, strict construction in favour of the subject has to be placed on the language of the Notification. To quote Maxwell on the Interpretation of Statutes (10th Edition) at page 285, on this subject, following observations made by the learned author may be referred :- "Statute which encroach on the rights of the subject, whether as regards person or property, are similarly subject to a strict construction in the sense before explained. It is a recognized rule that they should be interpreted, if possible, so as to respect such rights. A statute under which a house- owner is being deprived of his rights to property should be construed strictly against the local authority. If there is ambiguity as to the meaning of the section, inasmuch as it is a disabling section, the construction which is in favour of the freedom of the individual (to contract) should be given effect."
11. The meaning of the expression "cost price" in Ballentine's Law Dictionary is described as under :- "A mercantile term, the meaning of which is relative, depending upon the circumstances under which it is used and the situation of the B parties, but which ordinarily would appear to mean merely that amount paid or promised to be paid for an article.
As applied to a stock of merchandise, it ordinarily will mean the whole--sale price."
A plain reading of the Notification in dispute shows that it requires "all stocks of sugar imported by private importers" to be sold to the Trading Corporation of Pakistan. Additionally the Notification also related to stocks already imported before the date of Notification, which bad arrived at Karachi on 17-10-1968 or thereafter. The word "imported" is very significant and in my view clearly reveals the intention of the law-maker that the Notification was extended to apply to the stocks in respect of which the process of importa--tion was completed. According to the Ballentine's Law Dictionary the word "import" means;--- "To bring or carry a substance or article into the country from outside."
Ordinarily an article is said to have been imported only when it is cleared by the customs, so that it is freely offered for sale in the ordinary course of trade in the country in which it is imported. The fact that the Notification referred to stocks which had already arrived at Karachi strengthens t hi construction of the meaning of the Notification. Section 3 of the Wes Pakistan Foodstuffs (Control)
Act, 1958, as already stated confers power generally upon the Government to issue notified orders for regulating, inter alia the supply, distribution and disposal of any Foodstuffs. Subsection (2 of section 3 provides as under :- "Without prejudice to the generality of powers conferred by sub--section (1) an order made thereunder may provide- (a)
(b)
(c)
(d)
(e)For requiring any person holding stocks of any foodstuffs to sell the whole or a specified part of the stock to such persons or class of persons or in such circumstances as may be specified under the order;
(f) Etc. Not relevant.
12. A careful reading of clause (e) of subsection (2) cited above makes it very clear that the power can be exercised in respect of stocks "'held" by a person for the purpose of selling the same to specified person or class of persons. This clearly shows that the power was intended to be exercised in regard to stocks which are ready for sale, which in the case of imported goods would obviously relate to stocks which have been already cleared from the customs and are held by the importer. In this context the language of the Notification in question also clearly refers to stocks of sugar "imported" by private importers. If the Notification relates to the stocks of sugar that have already been "imported", obviously the cost price would include the value of the goods in the hands of the importer, I.e. The amount paid by him for acquiring the goods including the customs duty, sales tax and other charges. In other words the functionaries exercising the power have no authority to issue an order requiring a person to sell the goods before they are received by the importer and held by him in stock and the reading oft the notification clearly does not envisage any such thing.
13. Thus I have come to the conclusion that the real import of the Notification in question was that the importer was entitled to a profit of 6 % on the total cost incurred by him in importing commodities including all taxes, duties and charges. This is also supported by the evidence on record, as already pointed out the defendant's own witness has deposed to the effect that the defendant itself construed the provisions of the Notification in the aforesaid manner. It was on this account that in other cases profit yeas computed and paid on the cost price inclusive of customs duty and sales tax. Admittedly the defendant has already included the price of Bonus Vouchers, interest on the investment and banking charges in computing the profit and no exception was taken to the inclusion of these amounts over and above the C. I. F. Value of the goods.
14. The only other question that remains to be considered is the effect of the payment towards duties and other charges made by the defendant for the clearance of the goods. The plaintiffs have explained through their evidence that they tendered shipping documents to the defendant in ignorance of the legal implications. Mr. Mohsin Tayabaji argued that these payments were made by the defendant on behalf of the plaintiff and consequently the defendant could only deduct the amount from the total payment due to the plaintiff but could not exclude these amounts from the computation of the profit. There is considerable force in this submission. The documents were not handed over to the defendant under the terms of a contract but were obviously handed over in pursuance of the supposed statutory obligation of the plaintiff under the Notification. It was for the defendant to refuse to undertake the payment and ask the plaintiff to clear the goods before offering it for sale to the defendant. The undertaking of the clearance of the goods was apparently an ex gratia act on the part of the defendant.
15. But it was contended by Mr. Chundrigar that the failure of the plaintiff to claim profit on the additional payments involved, constituted, waiver of rights and that the plaintiff were estopped from altering their position. It is now well established that there can be no estoppel against the statute. Even otherwise waiver arise by the intentional relinquishment of a known right, claim or privilege. In other words the term implies the intentional relinquishment of a known right after knowledge of the facts. g It implies the intentional for bearance to enforce a right, and necessarily, therefore, assumes the existence of an opportunity for choice between the relinquishment and the enforcement of the right. In Exh. 11 on which reliance is placed on behalf of the defendant, the plaintiff clearly stated :- "We understand from your office that 6 % profit should be calculated on the C. I. F. Cost while as per Government announcement of 17-10-1968 it should be on the landed cost of the material. Without prejudice to whatever account of C. I. F. Cost submitted herewith, we reserve our right to claim our profit at the rate of 6 % on landed cost in case we should be asked to pay customs duty and other K. P. T. Dues."
Taken as a whole the aforesaid statements made in the letter clearly indicate the lack of correct knowledge on the part of the plaintiff in regard to the method of calculation of the profit. The plaintiff cannot therefore be said to have waived their rights through this letter. Although the question of waiver was not directly raised in E. A. Evans v. Muhammad Ashraf (PLD 1964 SC 535), a somewhat similar question came up for consideration by their Lordships in that case. The question for consideration was whether a tenant protected under section 30, Displaced Persons (Compensation and Rehabilitation) Act, 1958, was bound by his agreement to pay rent in excess of the rent payable under statute. Their Lordships held that -a tenant so protected could not lawfully contract out of that protection, for, such a contract would be void being against the public policy.
On party of reasoning, in my opinion, the principles postulated by their Lordships can be extended to this case. The West Pakistan Foodstuffs (Control) Act, 1958 is a legislation encroaching upon the private rights of citizens in the larger interests of the community. The restrictions imposed upon the sale and distribution of the Foodstuffs, particularly in the matter of price determined under the notified order would directly affect the procurement and supply of such Foodstuffs. If unreason able restraints are placed upon the importer it would inevitably impede the importation of the commodities in question. Therefore, the provision relating to the fixation of price in a particular notified order is a matter o public policy and as held in the cited case, no importer can contract out of the requirements for the payment of price fixed therein. -In any case such a contract would not be enforceable against the importer in a Court o law. 1, therefore, hold that the plaintiff did. Not waive their rights a contended.
16. There is no dispute between the parties and no argument was advanced, as to the quantum of the claim set up by the plaintiff for payment of the balance of profit amount.
17. .In view of the foregoing reasons and finding, I decreed the suit of the plaintiff as prayed with no order as to costs.