1. ' This is a suit in which the plaintiffs have claimed the following reliefs "The plaintiffs respectfully pray for judgment and decree against the defendants Nos. 1, 3 and 4 jointly and/or severally as follows :-
(1) For arrest/attachment and delivery of the vessel m. v. ILION to the plaintiffs as the rightful and lawful owner of the said vessel, subject to such terms and conditions as-to payment of price and deductions there from as the Hon'ble Court may in the circumstances of the case deem fit and proper.
2. ' OR ' In the alternative for specific performance of the contract of sale of the said vessel (m v. ILION) by ordering the defendants Nos. 1 and 2 and such of the other defendants as found liable for the same to have the said vessel sold, conveyed/delivered to the plaintiffs and/or delivery of the vessel and possession of to the plaintiffs be confirmed, in terms of the Memorandum of Agreement of Sale of 24th May, 1978, as mutually amended.
3. ' OR ' In case arrest and delivery of the vessel and/or specific performance, cannot for any reason be granted, the plaintiffs as required by law (without prejudice to their other claim) pray that a decree for a sum of Rs, 32,10,000 may be passed against the defendant No, 1 by way of damages compensation.
(2) Costs of the suit and interest @14% per annum from the date of suit till payment may also be granted.
(3) Such further and other reliefs which the Hon'ble Court deems fit in the circumstances of the case may also be granted."
2. The above suit was filed as an admiralty suit, However, on the basis of the statement made by the learned counsel for the plaintiffs the suit was treated as an ordinary suit by an order dated 12th June, 1979. In view of the above order the prayer mentioned in sub-para (1) of para 29 (1) has become redundant as the above suit is no longer an admiralty suit.
4. ' The facts leading to the filing of the above suit briefly are that by an agreement of sale dated 24th May, 1978, the defendant No, 1 agreed to sell the vessel, "m. v. IL1ON" for a sum of US $ 3,06,387 on the terms and conditions contained in the aforesaid agreement (annexure A to the plaint). By addendums Nos. 1 and 2, clause (2) of the above agreement was amended/modified. Under clause (1) of the agreement the vessel was to be delivered to the buyer charter-free, free of cargo, substantially intact, free of fire damage, but in all respects the vessel was to be paid and delivered "as is" safely float at the outer anchorage, Karachi, and it was also provided in the above clause that the buyers accepted the vessel without inspection and the sale was therefore outright and definite subject to the terms and conditions and exceptions of the contract. Whereas clause (2) provided the price in U S $ 78.40 per long ton LDT which also gave a lump sum total price of U S $ 3,06,387. It was also provided that the purchaser immediately after the signing of the contract shall establish 100% confirm irrevocable letter of credit in conformity with the memorandum of the agreement in London via M/s. United Bank Ltd, of London which was to be valid until and including 25th June, 1978. The above clause was amended by the aforesaid addendums Nos. 1 and 2 by providing that the full proceeds of the letter of credit shall be deposited with M/s. Williams Glyn's Bank Ltd. London and that the same would be released to the vendor after beaching the vessel at Gandani. The aforesaid clause (2) also provided certain other conditions which were to be fulfilled by the vendors including furnishing of a bank guarantee for a period of maximum 3 months for indemnifying the purchaser against any debts, in cumbrances and maritime liens. Furthermore, clauses (4) provided that the vessel shall be paid for and delivered to the buyer safely a float substantially intact, free of fire damage, at the outer anchorage Karachi at the expenses of the seller until the transfer of the funds and documents in London where after the vessel would become buyer's risk and expenses and that the buyers were to guarantee and arrange for such anchorage immediately upon arrival or the vessel, whereas clause (5) provided that the vessel shall be delivered to the buyer promptly, at the vendor's option date and the buyer shall pay for the vessel and would take delivery within 74 hours from lodging of I.G.M. And presentation by the seller of the vessel notice of readiness for delivery, safely afloat at the outer anchorage Karachi (Pakistan) not later than 15th June, 1978. Clause (8) provided that the vessel was sold for guaranteed demolition purposes only. Whereas clause (9) provided that after receiving full payment and effecting delivery of the vessel at the outer anchorage Karachi (Pakistan) or in port of Karachi wherever the vessel would beat the time of delivery, safely, afloat and the vendors were to assist the buyer in the beaching of the vessel at Gadani near Karachi port with the help of the master, engineers upto 7 crew members who would be at the purchaser's risk and that in case of the aforesaid crew services we were required in excess of first 5 days after delivery, the buyers were to pay $ 1,000 per day to the vendor. Furthermore, clause (10) provided that the risk of, or loss of, or damages to the vessel shall remain with the sellers until payment/ delivery of the vessel and that after such time of payment/delivery the vessel shall be at the full risk and expenses of the buyers.
5. Whereas clause (11) provided that if default be made by the buyer in payment of the purchase price or if the buyers failed to establish letter of credit as provided in the agreement after obtaining the Pakistan Import Licence, the vendors shall be at liberty to re-sell the vessel by public or private sale and to recover the loss. Clause (12) provided that if default be made by the vendors in the execution of a duly authenticated bill of sale or in the delivery of the vessel and her equipment in the manner and within time mentioned in the agreement the letter of credit shall at once be returned to the buyer and the seller in addition make due compensation for disappointment and loss caused by the non-performance of the agreement. Under clause (13) the vendors were to furnish documents mentioned therein to the Mercantile Marine Department. Whereas clause (15) provided that should the vessel be lost or wrecked or become a constructive or comprised total loss before delivery or not to be able to be delivered in time in the manner specified by reason of strike, lock outs or actions of any class of workmen, or through outbreak of war, or any event over which the buyers or the seller has no control this agreement shall be null and void and the letter of credit shall be returned in full to the buyers.
6. 3, It may be observed that at the time when the aforesaid agreement was executed on 24th May, 1978 the vessel in question had already arrived at the outer anchorage of Karachi on 22nd May, 1978, and the purchaser had already obtained an import licence for the import of some other ship for scrapping from some other party which was not utilized. The vendors' agent, i,e, the defendant No, 2 through their letter dated 3rd June, 1978 served a notice of readiness upon the plaintiffs and forwarded the copies of the documents mentioned therein. (annexure D-3 to the counter affidavit of the defendant No, 1). After that on 14th June, 1978 the defendant No, 2 requested M/s. Mckinnon Machenzie Ltd. Karachi to inform M/s. William Glyn's Bank Ltd. As per clause A of the memorandum of agreement that the vendor had served notice of readiness on the purchaser. It appears that after that the plaintiffs through their three separate letters all dated 27th June, 1978, requested the Immigration Officer Gate No, 1 Keamari, Karachi, the Wireless Investigation Inspector, Overseas Telecom Region, Karachi and the Assistant Collector of Customs in-charge rummagin Karachi respectively to issue the required certificate/permission. (annexures D to F to the Plaint). Thereafter, the plaintiffs through their letter dated 29th June, 1978 requested M/s. United Bank Ltd. Cloth Market Branch, Karachi, to amend their L/C already opened by them as to substitute the vessel in question in place of the previous vessel which they were intending to import from some other party referred to herein-above. Para 4 of the above letter provided that the vessel was to be delivered safely beached Gadani latest by 15th June, 1978 and whereas by para 5, 30th June, 1978 was substituted in the L/C in place of original date. Furthermore, the Plaintiffs also addressed a letter of request to the principal officer Marine Mercantile Department and the Director General Ports and Shipping Wing, for the required permission, in respect of the vessel in question in response whereof the Director's Board granted permission to the Plaintiff for the purchase of the ship in question for scrapping. After that the defendant No, 2 on behalf of the vendors addressed a letter dated 5th July 1978 to the plaintiffs pointing out that the Captain had got the vessel ready since 3rd July, to proceed to Gadani and in case the plaintiffs would fail to obtain the permission by 5th July the Master would shut down all the main engines and auxiliary since the vessel did not have spare fuel/diesel on board except for passage to Gadani and that thereafter 24 hours' notice would be required for making the vessel ready. Thereafter the plaintiffs through their letter dated 8th July, 1978 requested the defendant No, 2 to instruct the Master of the vessel to proceed for beaching at Gadani as they had obtained the permission from the Assistant Director Federal Investigation Agency and Immigration and the Customs Authorities. On 17th July, 1978 a certificate of delivery was executed by the plaintiffs, master of the vessel was delivered on 17th July, 1978 to the plaintiffs.
7. Whereas by a letter dated 17th July, 1978 the defendant No, 2 granted permission to the plaintiffs as the buyer of the vessel to post two watchmen. (4) (a) It seems that after that certain differences arose between the parties and according to the plaintiffs the defendant No, 1 had committed breach of the terms of the contract inasmuch as they did not furnish the required valid certificates and that certain equipment's from the vessel were missing and that the vessel was not in a condition to proceed to Gadani on its own power. Furthermore, the defendant No, 1 did not get the mortgage (to which the vessel was subjected) discharged, On the other hand, it was the case of the defendant No, 1 that the plaintiffs were deliberately withholding the payment of the purchase price.
8. ' Since the parties could not sort out their differences the plaintiffs have filed the present suit along with an application under Order XXXVIII, rules I and 5 read with Order XXXIX, rules 1 and 2 and section 151, C.P.C. The matter was placed before my learned brother Zahoorul Haq J. When on 12th June, 1979, an ad interim injunction was issued for restraining the defendants Nos. I and 2 from removing the vessel, etc. Outside the jurisdiction of this Court. The matter had come up for hearing before me on 9th January, 1980. The arguments upon the injunction application were concluded by the learned counsel for the parties on 14th January, 1980.
(b) Mr. Salim Akhtar the learned counsel for the defendant No, 1 has urged the following points
(1) Even if it is to be conceded for the sake of argument that there was any alleged breach on the part of the defendant No, 1, from the documents on the record, it is clear that the plaintiffs repudiated the contract and elected to claim damages,
(ii) That since the subject of the sale was a movable property which is covered by the definition the term of 'goods' given in section 2 of the Sale of Goods Act, the relief for specific performance of the agreement cannot be granted in view of sections 12 (c) and 21 (a) of the Specific Relief Act.
(iii) That the purchaser has failed to show that they have been ready and willing to perform their obligation under the agreement till the date of the filing of the suit.
9. ' Mr. Abbas Ali, learned counsel for the defendant No, 4 has urged that the defendant No, 4 has entered into a purchase agreement dated 11th April, 1979 (Annexure A to defendant No, 4's counter affidavit) with the defendant No, 5 who had purchased the vessel from the defendant No, 1 under the agreement dated 10th March, 1979 (annexure D-3/1 to defendant No, 5's counter affidavit) after the plaintiffs had committed breach of the contract and that in the instant case it would not be just and proper to confirm the injunction.
10. ' On the other hand Mr. Khalid Ishaque, learned counsel for the plaintiffs has urged the following points : (i)That the property in the vessel having been passed to the plaintiffs, the same belongs to them and that they are entitled to an injunction prayed for.
(ii) That the plaintiffs are entitled to specific performance of the sale agreement in view of section 12 (d) of the Specific Relief Act as it is probable that the pecuniary compensation cannot be got for the non-performance of the act agreed to be done by defendant No, 1.
(c) In support of the first contention that the plaintiffs had elected to claim compensation Mr. Salim Akhtar has referred to the plaintiff's letter dated 30th July, 1978 addressed to M/s. United Bank Ltd., West Wharf Branch Karachi in which the plaintiffs instructed the said bank not to release the payment of the L/C amount as there were breaches or the part of the defendant No, 1 namely-
(a) that the vessel was to be delivered free from any charge, encumbrances, but this had not been done ;
(b) that the vessel was to be delivered safely beached at Gadani latest by 15th July 1978 which condition was broken by the defendant No, 1 ; (c)that the vessel was to be delivered under her own power substantially intact which condition was also broken inasmuch as that the vessel did not have its own power and that the vessel was more or less a junk or wreck and that by no criteria could be considered as substantially intact ;
(d) that equipments and outfit had been removed from the vessel ; (e)the certificates provided by defendant No, 1 were not valid.
11. ' In the end the plaintiffs in their aforesaid letter concluded as follows : "In the circumstances, there is not only no question of negotiating the letter of credit but we have a claim amounting to over Rs, 8,50,000 against the beneficiaries and their principals by way of damages for the breach of the contract. We will take necessary steps for the recovery of the said amount."
12. ' This may be treated as extremely urgent. The other document relied upon in support of the above contention by Mr. Salim Akhtar is the plaintiff's letter dated 3rd August 1978 addressed to M/s. United Bank Ltd., West Wharf Branch, Karachi, a copy whereof was endorsed to the defendant No, l's agent, i. e. The defendant No, 2 (Annexure D-2 to the defendant No, l's counter-affidavit), It may be advantageous to reproduce hereinbelow the contents of the above letter, which reads as follows :- ' AL-FAROOQ SHIPPING LTD. The Manager, DT : 3rd August 1978.
13. ' United Bank Limited, West Wharf Branch, Karachi.
14. ' Re : Our L/c. No, IFL/OMK/451/78 for U. S. $ 3.06,387.00 Dear sir, ' We have for acknowledgment your letter of 30th July 1978 as a token of constructive delivery given to us by Hegge & Co. (Pakistan) Limited. Physical delivery of the vessel was never taken by us. In fact the Physical delivery of the vessel had to be given in terms of the credit as well in terms of the Memorandum of Agreement at Gadani and the vessel had to be delivered safely beached at Gadani under her own power and substantially intact. These conditions of the credit among others have not been fulfilled.
15. ' In fact, watchmen appointed by Hegge & Co. (Pakistan) Limited are on the vessel and we have not even engaged any watchmen or any other person to look after the vessel, since we have not actually taken delivery of the vessel. Please note that we have divested ourself even of constructive delivery of the vessel.
16. ' We are endorsing a copy of this letter to Hegge & Co. (Pakistan) Limited so as to make our position clear. This is without prejudice to our rights and remedies against the vendors of the vessel and their agents, ' We would further reiterate contents of our letter of 30th July 1978. Contents of our letter dated 30th July 1978 may also be treated as our comments/reply to the cable/telex received by your Cloth Market Branch from your London Branch, received by us under the cover of your letter of 1st August 1978.
17. ' In addition to what we have stated in our letter of 30th July 1978 we may briefly comment on the points mentioned by William & Glyn's Bank London, as under : ' The amount of outstanding cannot be ascertained from the papers available with us. However, even William & Glyn's Bank admit that the vessel is subject to mortgagees and there are outstandings. In the light of this, it is abundantly clear that L/c conditions have not been complied with and the requirements of the vessel being free of all debts mortgages etc. Has not been fulfilled and if any Bill of sale has been substituted, the same is fraudulent.
18. ' The requirement of legal Bill of the Sale and Guarantee from Williams & Glyn's Bank are not alternative requirements both of these documents are amongst the other documents, mandatorily required by the credit.
19. ' There was no question of delay in beaching the vessel as in the absence of Legal Bill of Sale and the documents mentioned in para 6 of our letter of 30th July 1978, no permission for beaching could be obtained.
20. ' For reasons mentioned in our letter of 30th July 1978 any alleged new Bill of Sale is false and fraudulent.
21. ' Contents of para. 4 are wholly false and even from the certificate issued by Hegge & Co.
22. (Pakistan) Limited, the vessel did not have her own power.
23. ' Yours faithfully, ' For Al Farooq Shipping Limited (Sd.)
24. ' Director ' Copy to- ' The Manager, ' United Bank Limitted, ' Cloth Market Branch, Karachi, ' M/s. Hegge & Co. (Pakistan) Limited, ' State Life Building No, 1-A.
25. ' I. I. Chundrigar Road, ' Karachi."
26. ' It may be noticed that through the above letter, the plaintiffs had divested themselves of the constructive delivery of the vessel.
(d) It has been urged by Mr. Khalid Ishaque, learned counsel for the plaintiffs that the above two letters were addressed by the plaintiffs to their banker and that they would not undo what had already been done i. e, the handing over of the constructive delivery of the vessel to the plaintiffs and the passing of the property in the vessel to them.
27. ' Whereas Salim Akhtar in support of his contention that the plaintiffs having elected to claim damages cannot claim specific performance of the agreement referred to the case of Anwer All Khan v. Abdul Sattar Abubakar (1) wherein it has been held that when the purchaser by his letter addressed to the seller claimed damages in respect of the sale agreement relating to immovable property and asked for the refund of earnest money, the specific performance could not be granted. On the other hand Mr. Khalid Ishaque has referred to the case of Dennant v. Skinner and another (2) wherein the plaintiff had knocked down a van to the highest bidder and inquired his name, who in reply stated his name was King and that he was the son of the proprietor of Kings Motors of Oxford, a well-known and reputable firm. The plaintiff knocked down 5 more vehicles to King including a standard motor car, the purchase price was paid by a cheque on the representation of King and by showing of the counter foils of the cheques that he was paying large amounts to the well-known auctioneers through cheques. Thereupon, the plaintiff accepted the cheque and obtained the signature of King on a printed form which stated "I hereby certify that my cheque number will be met on presentation at my bank. Furthermore, I agree that the ownership of the vehicles will not pass on to me until such time as the proceeds of my cheques have been credited to South London Motor Auction account at Lloyds Bank."
(1) PLD 1968 Kar. 154
(2) (1948) 2 All E L R. 29 ' On obtaining the above form the plaintiff delivered the cars to King who sold the standard car to a third party and who in turn sold the same to the defendant. Subsequently, the cheque given by King was dishonored and it was discovered that King had no connection with Kings Motors of Oxford. The plaintiff brought a suit for the recovery of possession. It was held by Hallett, J. Of the King's Division Bench that there was no mistake as to the identity of the contracting parties at the time when the contract of the sale was made which was at the fall of the plaintiff's hammer, and that the plaintiff's assent to the sale and to the passing of the property to King was not vitiated. In my view the facts of the above case are distinguishable from the instant case, inasmuch as there is no mistake of the identity of the parties involved in the present case.
(e) In may be pertinent to mention that sections 18 to 25 of the Sale of Goods Act deal with the passing of property from a vendor to a purchaser, Section 19 provides that in a contract for the sale of specific or ascertained goods the property in them is transferred to buyer at such time as the parties to the contract intend to be transferred, and that for the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case and that unless a different intention appears, the rules contained in sections 20 to 24 are rules for ascertaining the intention of the parties. Whereas section 20 of the above act lays down that when there is an unconditional contract for the sale of specific goods in a deliverable state, the property passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of goods, or both, is postponed. Furthermore, section 21 of the aforesaid Act provides that where there is a contract for the sale of goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof.
28. It may be noticed that in order to attract to the aforesaid section 20 of the Sale of Goods Act there are three preconditions, namely :-
(a) that there should be an unconditional contract.
(b) that the subject matter of the contract should by specific goods.
(c) that the goods should be in deliverable state.
29. ' I have referred to the various relevant clauses of the instant agreement in para 2 hereinabove, which indicate that prima facie the contract was not an unconditional contract, but there were certain obligations which were to be performed by the parties to the contract. Furthermore, if the allegations of the plaintiffs were correct that the vessel was not on its own power and that it was Junk and wreck in breach of the terms of the agreement in that event the vessel could not have been in deliverable state, and therefore, prima facie the property in the vessel could not have passed to the plaintiff till the time the vessel was put into a deliverable state as per section 21 of the Sale of the Goods Act and a notice thereof was given to the plaintiffs by the defendant No, 1.
(f) From the above sections of the Sale of Goods Act referred to hereinabove, it is also evident that the passing of property in the goods and the delivery of the same are two different things. It is not necessary that the property would pass on to the purchaser upon delivery of the goods and similarly the property in the goods may pass on to the purchaser without the delivery of the goods, if the conditions contained in section 20 of the Sale of the Goods Act are present. Prima facie it appears that the plaintiffs elected to claim damages from the defendant No, 1 and were not interested in the performance of the agreement on the ground of the alleged breach on the part of the defendant No,
1. I asked Mr. Khalid Ishaque to point out any document indicating that after August/September, 1978 the plaintiffs were ready and willing to perform their obligations and that in fact they had called upon the defendant No, 1 to complete the sale transaction. There is no document on the record to indicate that in fact the plaintiffs had been requesting the defendant No, 1 to complete the sale transaction. It is an admitted position that the L/C in favour of the defendant No, 1 had expired on 30th July, 197S and that the plaintiff did not get it renewed till today.
30. It may be noticed that, under the aforesaid amended clause (2) of the agreement referred to hereinabove, the price of the vessel was to be deposited with M/s. William Glyn's Bank Ltd. London, on the fulfilment of certain conditions contained therein and was to be kept with them till the beaching on the vessel at Gadani. But in the instant case the plaintiffs instructed M/s. United Bank Ltd. Not to honour L/C for the reasons mentioned by them in their aforesaid letters dated 30th July, 1978 and 3rd August, 1978. Furthermore, the plaintiffs in their aforesaid letter dated 30th July, 1978 even calculated an approximate amount of damages which they were allegedly entitled to recover from the defendant No, 1, namely, Rs, 8,50,000 on the ground of the breach of the contract.
31. The plaintiffs' aforesaid letter dated 3rd August, 1978 indicates that they had divested themselves of the constructive possession. It may again be observed that a copy of the letter was endorsed to the defendant No, l's agents, namely, the defendant No, 2 and, therefore, it cannot be urged that the aforesaid letter was intended by the plaintiffs for their banker.
(g) Furthermore, from the plaintiffs' telex dated 3rd September, 1978 (Annexure R/16 to the plaintiffs' rejoinder), it is clear that the plaintiffs wanted to renegotiate the price of the vessel in question and instructed their Karachi Office to revoke the L/C. It is also evident from the above telex that the plaintiffs were negotiating to purchase two vessels named therein at a price lower than the contract price of the vessel in question, i. e. The contract price of the instant vessel was US $ 78.40 per ton and whereas the quoted price of the two vessels named therein was US $ 74/75 per ton. In this regard a reference may also be made to defendant No, l's agent's (in England) telex dated 23rd November, 1978 addressed to the plaintiff's agent (R 16-1 to the plaintiffs' rejoinder) which reads as follows :- "23673 Erum PK ' 8813567L Izros G ' Most Urgent ' No, 494 dated 23rd November, 1978 ' For Al Farooq ' Att : Mr. Rauf.
32. ' M.v. ILION ' We have raced Following Tax from Sellers Reps which we Quote in Full Ilion-With reference to sale of this vessel to your Principals to whom the vssl was delivered we are Instructed by Sellers to Enquire :
1. Do buyers intend to accept Delivery and re-establish the letter of Credit as called for ?
2. If not will buyer pse state their position so that sellers may take whatever action they feel proper ' We await your Prompt Reply" Unquote. Pse telex your reply Immediately.
33. ' Regards ' Lizrose Ltd.
34. ' 23673 Erum PK ' 8813567 Lizros "G"
35. ' From the above-quoted telex it is clear that the defendant No, 1 wanted to know as to whether the plaintiffs were interested in completing the sale transaction. It was urged by Mr. Khalid Ishaque that the above telex supports his contention that in fact the delivery of the vessel was taken over by the plaintiffs. It is true that the constructive delivery was given to the plaintiffs but the plaintiffs themselves gave up the same. In the above telex the plaintiffs were asked to state as to whether they were willing to accept the delivery of the vessel or not. It may further be noticed that the plaintiffs have not produced any reply to the above telex nor any document to indicate that after the receipt of the above telex they had shown their readiness and willingness to perform the contract. It may be pertinent to mention that it is an admitted position that the plaintiffs did not post their two chowkidars for which the permission was granted by the defendant No, 2 nor put any staff on the vessel after the alleged taking over of the constructive delivery. The constructive delivery of the vessel was given on the paper which the plaintiffs voluntarily disowned. It may also be pertinent to observe that it is not a case in which the price was to be paid in Pakistani currency, but it was to be paid in foreign currency through a L/C and in fact if the plaintiffs were ready and willing to perform their obligation under the contract and wanted specific performance of it, the least which they could be expected of was to keep the L/C valid till the time of the filing of the suit.
36. The plaintiffs have not only done this, but they have not even called upon the defendant No, 1 to complete the sale transaction, during the period commencing from September, 1978 till June, 1979 i. e. Till the time of the filing of the suit. In this regard Mr. Salim Akhtar has referred to the case of K. S. Sundramayyar v. K. Lagadeesan and another (1) wherein a Division Bench of the Madras High Court held that the plaintiff in a suit for specific performance is to show that he always considered contract as still subsisting and had to prove his continuous readiness and willingness from the date of the contract to the time of the filing of the suit, and that where a purchaser to a contract of sale made a claim for 'damages on the basis of the alleged breach, it would amount to having elected on his part to treat the contract as at (1) AIR 1965 Mad. 85 an end. It may be mentioned that the above case related to the sale of an immovable property, but in my view, the principles of law propounded in the above case can be pressed into service in a case for specific performance of a sale agreement relating to goods as well.
(h) Referring to Mr. Salim Akhtar's contention that the contract relating to the sale of goods cannot be specifically performed, it may be observed, that by virtue of section 12 (c) of the Specific Relief Act a contract is specifically enforceable if the act agreed to be done is such that pecuniary compensation for its non-performance would not afford adequate relief. Furthermore, the Explanation to the above section provides that unless otherwise proved, the Court shall presume that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money, and that the breach of a contract to transfer movable property can be thus relieved. Whereas section 21 (a) provides that a contract cannot be specifically enforced for the non-performance of which compensation in money is an adequate relief.
37. In the instant case it cannot be urged that the plaintiffs cannot be compensated in terms of money. The plaintiffs entered into the agreement in question for the purchase of the vessel for scrapping it. The plaintiffs have neither pleaded nor pointed out any peculiarity or uniqueness in the vessel. Section 58 of the Sale of Goods Act which empowers a Court to grant specific performance of a contract relating to sale of goods expressly also provides that the above section is subject to the provisions of Chapter II of the Specific Relief Act.
38. ' The learned counsel for the defendant No, 1 in support of his above contention has referred to the case of Muhammad Azam and Muhammad Fazil & Co. v. A. N. Industries, Karachi (1), wherein the facts were that the subject-matter of the sale was a vessel. After the dispute having arisen between the parties, they approached the Court under Arbitration Act i,e,, one party for the filing of the arbitration agreement and the other party for declaring the agreement as null and void and not binding. In the above case an application for injunction for restraining the seller from removing the vessel and from scrapping or removing any article from it was also filed. While rejecting the above application by my learned brother Zaffar Hussain Mirza, J. Observed as follows :- "Additionally section 58 of the Sale of Goods Act which provides for specific performance of a contract to deliver specific or ascertained goods, in its opening clause makes the power of the Court to grant such relief subject to the provisions of Chapter II of the Specific Relief Act which contains section 21 referred above. 1 am, therefore, clearly of the opinion that if a suit had been brought by the buyers upon the same cause of action in a Court of Law, it would not have been permissible in law to order specific performance of the contract in question. Confronted with this position, learned counsel for the buyers contended that under section 41 read with the II Schedule to the Arbitration Act, the Court has nonetheless, the power to grant the relief sought in order to preserve the goods which are the subject matter of the reference. The perusal of the IInd Schedule, shows that while dealing with the powers of the Court separately it provides in clause (1) for preservation, interim (1) PLD 1977 Kar. 21 custody or sale of any goods which are the subject matter of the reference and in clause (4) with the power to grant interim injunction or the appointment of the receiver. The applications made for the interim relief have been expressly made for an injunction to restrain specific acts by the defendants. I do not think therefore, that the present is a case falling within the purview of clause (1) of the IInd Schedule. The case of the buyers is not that the goods are subject to decay or deterioration so as to require preservation. In any event as stated earlier, I have taken the view that the present contract is not capable of specific performance. Therefore, no useful purpose will be served by keeping the defendants from demolition of the ship or disposal of the materials obtained therefrom."
(i) The above ruling supports Mr. Salim's contention that specific performance of an agreement relating to a vessel cannot be granted. However, Mr Khalid Ishaque learned counsel for the plaintiffs had drawn my attention to section 12 (d) of the Specific Relief Act, which provides that a contract can be specifically enforced when it is probable that pecuniary compensation cannot be got for non-performance of the act agreed to be done. It was urged by Mr. Khalid Ishaque that as the defendant No, 1 has no assets in Pakistan, it will not be possible for the plaintiffs to get the compensation in money. It is a debatable point as to whether a party who had prima facie elected to claim damages instead of claiming specific performance upon the alleged breach on the part of the other party before invoking the jurisdiction of this Court can press into service this provision.
39. It was urged by Mr. Salim Akhtar that it is not the case of the plaintiffs that the defendant No, 1 do not have assets even in the country where they ordinarily carry on their business and, therefore, the above provision cannot be pressed into service. Be that as it may, the defendant No, 1 has offered to give a bank guarantee for a sum of Rs, 8,50,000 being the amount mentioned by the plaintiffs in their aforesaid letter dated 30th July, 1978. (R-6 to the plaintiffs' rejoinder) as the amount of damages which they were allegedly entitled to recover from the defendant No,
1. It may be observed that the above amount was mentioned by the plaintiffs prior to the filing of the suit, whereas in the present suit the plaintiffs have claimed a sum of Rs, 32,10,000. The above figure comprises of Rs, 30 lacs being the alleged difference of the contract price and the market price and whereas Rs, 2,10,000 being the alleged expenses incurred by the plaintiffs. No particulars have been furnished as to the date on the basis of which the alleged market price has been taken nor any explanation for claiming the above amount instead of Rs, 8,50,000 has been set out in the plaint. On the other hand, the agreement of sale entered into between the defendants Nos. 5 and 4 shows that the defendant No, 5 has agreed to sell the very vessel to the defendant No, 4 for a sum of Rs, 35,1720 US $ (Annexure A to the defendant No, 4's counter-affidavit), the difference between the plaintiffs contract and the defendant No, 4's contract comes to US $ 4,4333 which is equivalent approximately to Rs, 4,50,000. In my view for the time being the plaintiffs' interest will be sufficiently safeguarded if the defendant No, 1 will be directed to furnish a bank guarantee for Rs, 8,50.000, without prejudice to the right of the plaintiffs to press for the suit amount at the trial of this suit.
(i) It may he observed that the plaintiff have also filed a statement dated 14th January 1980 to the effect that they are ready and willing to take the vessel `as it is' on the price at which the ship being offered by the defendant No, 5 to the defendant No, 4 without claiming any damages, but as the defendants are not agreeable to the above offer, I cannot impose a new contract upon an unwilling party.
(k) It was urged by Mr. Abbas Ali, the learned counsel for the defendant No, 4 that the defendant No, 4 has entered into a sale agreement with defendant No, 5 in good faith without any knowledge and, therefore, the defendant No: 4 is protected under sections 30 and 54 of the Sale of Goods Act.
40. On the other hand, Mr. Khalid Ishaque has urged that the alleged agreements entered into between the defendants Nos. 1 and 5 and in turn between the defendants Nos. 4 and 5 are not genuine but the same are fake. Be that as it may, in my view it is not necessary to go into the above question as I am not inclined to confirm the injunction. I, therefore, order that the ad interim injunction shall stand vacated upon furnishing a bank guarantee of Rs, 8,50,000 by the defendant No, 1 to the satisfaction of the Nazir of this Court or upon the expiry of 15 days' time from today whichever is later in time. I have granted 15 days' time in order to enable the plaintiffs to file a petition for leave in case they are aggrieved by this order.
41. ' With the above observation the application stands disposed of with no order as to costs.
42. ' The office is directed to fix the above suit for regular hearing within six months after completing thepreliminaries. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.