' MAHMOOD AHMAD KHAN, J.-, This is a suit for specific performance as described in the title, however the contents and prayer also include alternatively damages.
1 In the plaint filed by Iqbal. & Ali Redha Trading Company of Oman through its local agent and attorney Mr. Akber Ali Noorani taking Rice Export Corporation of Pakistan (R.E.C.P.) (as it then was and since merged into Trading Corporation of Pakistan (T.C.P.) amended title since filed), relevant summarised facts as alleged being; ' That the plaintiff entered into agreement with the defendant for purchase of 30,000 tons of Basmati Pak-7 white rice being 19,000 tons of 1988-89 crop and 11,000 tons of 1989-90 crop @ U.S $ 313 per metric ton in accordance with the specifications laid down in the tender documents, along with the condition that if needed the rice of 1988-89 crops will be passed through "Sortex machine".
The-plaintiff was required to lift the 11,000 tons of 1989-90 crops within 60 days commencing from 18th February, 1994 whereas the 19,000 of 1988-89 crops were required to be lifted during 90 days period commencing from 18th April, 1994, for which on 6-2-1994 the plaintiff established a Letter of Credit for US $ 1,565,00/- and a further Letter of Credit was opened on 14-2-1994 for US $ 7,825,000/- through Oman International Bank and United Bank London respectively. As such the defendant was required to deliver the entire quantity by 30-6-1994. To this contractual obligation the Defendant failed to deliver the agreed quantity within the stipulated period and unilateral twice extensions for shipment by 30 days, only 15,000 tons were supplied during the period of six months of which 8,000 tons were sub-standard and unfit for human consumption. The plaintiff by its facsimile message dated 23-8-1994 lodged a complaint with the Chairman of the defendant to which the defendant by message dated 3-10-1994 informed the plaintiff that 10,000 tons of rice 1988-89 crops was available for shipment being 5,000 tons by end of November, 1994 and 5,000 by end'of December, 1994. The balance quantity of 5,000 tons was reduced to 2,000 tons unilaterally by exercising 10% more/less option, which was to be made available for shipment by January, 1995.
By a letter dated 8-10-1994 the plaintiff protested to unilateral extension calling for mutual agreement and compensation and by a fax message dated 22-10-1994 demanded compensation, return and replacement of the sub-standard rice shipped and its substitution by other rice of equal value for the balance 15,000 tons, the plaintiff was called upon by a telex message on 2-11-1994 for a visit and to a amicably resolve the matter, which was respondent by a visit on 8-11-1994.
' Finally by a letter dated 29-11-1994 the defendant informed the plaintiff for substitution of 12,000 tons of Basmati Pak-7 rice of 1988-89 crops of the value of US $ 3.76 million @ US $ 313 per metric ton of Irri-6 Sindh white 15-20% broken of 1994-95 crop entirely costing to US $ 3.76 million @ US $ 182.50 per ton, accordingly a fresh Letter of Credit was opened by the plaintiff with Societe General, Rotterdam for US $ 3,755.850 covering the total cost of 20580 tons of Irri-6 rice. It was also agreed that the claim of compensation of non-shipment was to be referred to Arbitration. On 7-12-1994 a telex message by defendant informed the plaintiff that shipment would be effected during March, 1995 and that security paid against agreement No, RECP/Exp/Tender/Basmati/5/93 has been adjusted against Irri-6 and would be held by defendant till quantity was shipped but thereafter despite repeated requests the defendant failed to fulfil the contract as agreed as such the suit with the prayer of specific performance, permanent injunction and damages. Ii. In the written statement as filed by the defendant specific performance was denied along with the authority to file and maintain a suit. It is stated that that the plaintiff was aware of the quality of purchase, time of shipment/s was extended on the request of the plaintiff, the decrease in quantity is said to be available in the agreement. The allegation of rice being un-fit of human consumption was denied.
The failure of arbitration was attributed to be on part of the plaintiff, claim of damages Was denied.
As such all the allegations of the plaintiff were denied.
2. Issues in the matter were framed by consent on 16-1-1998 being; i. Whether the suit is not filed and verified by a competent person and is not maintainable? ii. Whether the plaintiff firm is not registered partnership firm and the suit is barred under section 69 of the Partnership Act? iii. Who committed the breach of contract in relation to supply of 30,000 tons of basmati Pak-7 white rice (19000 tons of 1988-89 crop and 11000 1989-90 crop)? iv. Whether the Defendant had agreed to substitute 12,000 tons of basmati Pak-7 of 1988-89 crop of the value of US Dollar 3.76 million at the rate of US $ 313 per metric ton FOB by 20,580 tons of Irri-6 Sindh white 1'5% - 20% broken of 1994-95 crop and the plaintiff accordingly established a fresh Letter of Credit. v. Whether the Defendant committed breach of contract and neglected and failed to supply the agreed substituted quantity of Irri-6 Sindh. White 15% - 20% broken of 1994-95 crop by March, 1995. vi. Whether the Plaintiff is entitled to specific performance of the contract duly modified and demand the supply of the 20500 ton Irri-6 Sindh white 15% - 20% broken of 1994-95 crop under it and/or claim compensation/damages on the basis of the difference between the contractual price and market price during the relevant period? vii. What should the decree be?
3. Evidence was led by way of commission wherein the plaintiff brought forward two while the defendant relied upon one; ' Akber Ali Noorani S/o Rehmatullah who produced Exh.P/1 Affidavit-in-evidence, Exh.P/1-1 Copy of NIC, Exh.P11-3 original Certificate of Registration of Commerce Sultanate of Oman, Exh.P/1-4 Tender documents, Exh.P/1-5 Letter dated 18-1-1992 of defendant, Exh.P/1-6 photostat copy of letter dated 31.1.1994 issued by RECP, Exh.P/1-7 facsimile message dated 23.8.1994 sent by plaintiff to the Chairman RECP, Exh.P/1-13 its Confirmation slip, Exh.P/1-9 Letter dated 8-10-1994 send by plaintiff to RECP Manager (Export), Exh.P/1-10 its confirmation slip, Exh.P/1-11 Fax message dated 22.10.1994 sent by plaintiff to Chairman RECP, Exh.P/1-12 Copy of Fax message dated 02.11.1994 sent by RECP to the plaintiff, Exh.P/1-13 photo stat copy of letter dated 29-11-1994 sent by RECP to plaintiff's local Agent.
Exh.P/1-14/1 original telex message dated 06/07-12-1994 sent the defendant to the plaintiff, Exh.P/1- 14/2 Telex message dated 0112-1994 sent by RECP to plaintiff, Exh.P/1-15 Telex message dated 10/7.3.1995 sent by the plaintiff to General Manager (Exports) RECP, Exh.P/1-16 Telex message dated 24/13.5.95 sent by the plaintiff to defendant, Exh.P/1-17 True copy of Representation dated 24.6!1995 made by plaintiff to Federal Minister of Commerce Exh.P/1-17/2 its confirmation slip, Exh.P/1-18 Notice dated 10-2-.2000 through Fax message sent by M/s A.K. Brohi & Co. To advocate for defendant.
' The plaintiffs second witness Ali Raza Noorani S/o Ali Raza Noorani, produced Exh.P/2 Affidavit-in- evidence, Exh.P/2-1 True copy of Circular/Bulletin dated 31-3-1995 issued by London Rice Brokers Association, and Exh.P/2-2 photo copy of NIC.
' Initially the plaintiff witnesses were not cross-examined and the side of the Defendant was also closed to lead evidence, but thereafter under orders as were passed in HCA No,360 of 2003, the defendant cross-examined the plaintiff witnesses and also led the evidence.
' Defendant came up with the witness Muhammad Burhanullah S/o late Muhammad Abdullah who produced Affidavit in-evidence as Exh.D, attested true copy of the Secretary of Trading Corporation, the Resolution of the Board of Directors of Trading Corporation of Pakistan (Pvt.) Limited passed on 26th February, 2003, tender documents dated 27.12.1993, draft of Telex dated 28.02.1994 sent to the attorney of the plaintiff, photo stat copies o Telex message dated 02.03.1994 by attorney of the plaintiff to Rice Export Corporation of Pakistan (RECP), Telex dated 11.4.1994 by R.E.C.P. To the attorney of the plaintiff, Telex dated 26.4.94 by R.E.C.P to the attorney of the plaintiff, letter dated 29.5.94 by RECP to the plaintiff, the letter dated 10.05.1994 by the attorney of the plaintiff to the RECP, the FAX dated 09.05.94 received by RECP, the letter dated 19.6.1994 by the Government a Pakistan, Ministry of Commerce to the Chairman, RECP, Telex dated 30.06.94 by RECP to the plaintiff, Telex dated 05.07.94 by RECP to the plaintiff, FAX MESSAGE dated 03.10.1994 by RECP to the plaintiff Telex dated 17.10.94 by RECP to the plaintiff, Telex dated 03.12.94 by the plaintiff to RECP, Telex dated 06 12.94 by the plaintiff to RECP and photostat copy of She letter dated 29.11.1994 by the RECP to Local Agent and Attorney of the plaintiff. (The learned Commissioner has remarked that the pages mentioned in the documents filed with list of documents do not tally with the list of documents) photo copies of documents markea as Exhs.X/1 to X/19.
' The production of photocopies was objected to by the learned counsel for the plaintiff on the fallowing grounds; a. The documents so produced on behalf of the defendant are neither filed, referred to and/or relied upon by the Defendant in their written statement. b. No permission has been obtained by the Court to produce these documents. c. All the documents are photostat copies and being secondary evidence are not admissible in evidence. d. No confirmation slips of the Fax message or Telex Message has been produced. e. No, notice as envisaged under Order XII, Rule 8, C.P.C. Was even served by the Defendant on the Plaintiff or its advocate to produce the originals in their possession.
' As the matter of admissibility/production of the said documents was deferred to this stage of final arguments which may have escaped the attention of the learned counsel.
' Never the less, having gone through the same it is clear that even if the same are allowed to be produced it will not affect the issues to any benefit for the defendant.
6. Arguments have been addressed by both the learned counsel and they also filed written synopsis in the matter.
' Learned counsel for the plaintiff at the inception frankly conceded that he is not pressing the element of specific performance and as such his case is limited to damages only for non- fulfilment of the contract. It is contended by him that damages are available under section 73 of the Contract Act and in the matter the defendant despite having a valid contract failed to fulfil the same without any legal validity. It is further argued by the learned counsel for the plaintiff that the defendant has made all possible attempts to minimise his losses in the matter by agreeing to the replacement, however the defendant despite agreeing to the same failed to come up to their part of the agreed contract as liable for the claim of the plaintiff in accordance with the principles of duties between agreed price and the market price. He has relied upon the following judgments; ' PLD 1964 SC 625 - Province of West Pakistan v. M/s Saaz & Co. Discussing "Seller entitle to damages to extent of difference between price stipulated and market price at time of breach".
' PLD 1983 Karachi 63 - Aijaz Ahmad v. M/s Amin Fabrics Ltd.-discussing "principles for assessment of damages in cases. Of breach of contract of sale of goods indicate that an aggrieved party is entitled to actual damage or loss suffered by him and generally speaking in such case if the aggrieved party establishes the market rate on the date of breach or on the date of delivery according to the contract, the law presumes that the difference between the contract price and the market price on the date of breach or on the date of delivery according to the contract is the actual loss or damage suffered by the claimant. If however at the time when the contract was made the partips new as to what would be the loss of damage, which was likely to result from the breach of the conntract, the guilty party in such a case is liable for such loss."
' 1992 CLC 2524 M/s Chilya Corrugated Board Mills Ltd v. Mr. M. Ismail and another- discussing "Breach of contract of sale of goods. Aggrieved party is not obliged to make a matching purchase or any other purchase so as to make it entitled to claim damages from defaulting party. All aggrieved party has to do is to prove and claim difference, if any, between price agreed inter parties and ruliiig price of goods on date of breach. Correspondingly, it has to be shown as to what was date of breach, if any, and what was available price then."
' 1968 SCMR 1198 - Muhammadi Cotton Factory Ltd. v. M/s Pakistan Industries Ltd. -- discussing "requirement to claim difference in price, all along willing and ready to deliver the goods".
' Learned counsel for defendant contended that the person who has executed the plaint was authorised subsequent in time as the suit filed earlier. However the suit was presented on 19-7-1995 whereas the Power of Attorney prima facie was executed on 15-7-1995. The learned counsel may have inadvertently considered the date of stamping at Karachi at arrival on 3-8-1995 which done normally in cases of power of attorney executed outside Pakistan as exception otherwise executed documents are not stamped. As to the authority and ability to maintain a suit learned counsel argued that the Partnership Act is applicable in the matter if the permanent establishment of the agency is present and in absence of the same the plaintiff can maintain a suit under the law applicable in Oman in respect of which the plaintiff has produced Exh.P/1-3 which is a Certificate of Incorporation issued from Muscat which according to him is also dated subsequent to the said date. The learned counsel states that the same has been made in order to acquire protection from double taxation and in this regard he has also filed the agreement of double taxation between Pakistan and Oman. He has relied upon following Judgments; ' PLD 1960 (West Pakistan) Karachi 736 - M/s Sh. Mian Muhammad Allah Bux v. Universal Corporation and others - "discussing Suit barred under Sec.68-69 of Partnership Act, 1932 unless registered proved by certificate obtained".
' 2008 CLC 444 - Lakhani Textile International v. M/s Southern Agencies (Pvt.) Ltd.) "discussing bar of Sec.69 of Partnership ' Act, 1932 to institute a suit for enforcing a right arising out of contract by an unregistered firm against third party".
' PLD 2003 Karachi 314 - Ardeshir Cowasjee and others v. KBCA and others - Unregistered partnership was not a legal entity, thus could not sue in its own name, all partners of unregistered partnership would be made as plaintiffs in order to remove legal lacuna pertaining to maintainability of suit.
' 1983 CLC 1740-Abdul Rehman v. Parvez Ahgmed Butt and 2 others bar contained in S.69 applies only when plaintiff files a suit to enforce right arising from contract against either firm or any past or present member of same or against third party.
' In rebuttal the learned counsel for the plaintiff has argued that in the matter Partnership Act is not applicable as the plaintiff is not under domain of Pakistan law.
8. Having heard both the learned counsel and on examination of the available material, my finding on the issues with reasons thereof are as under: ' Issue No,1 Negative ' Issue No,2 Partially not proved & partially Negative ' Issue No,3 Defendant ' Issue No,4 Positive ' Issue No,5 Positive ' Issue No,6 Partially abandoned and partially Positive ' Issue No,7 for the amount as discussed.
' Discussion as to the Issues;
1. Whether the suit is not filed and verified by a competent person and is not maintainable?
' Although the issue is in negatively formation, irrespectively the plaint in the matter has been field by an authorised representative/ attorney of the plaintiff, who has also produced the said power of attorney. To the element of maintainability nothing is found present on record as to law and facts which may lead any question to the maintainability of the matter especially the cross-examination of the said attorney who has himself appeared in the witness box. Where no any adverse inference is liable to drawn as such in my humble understanding this issue stands decided in negative for both the portions.
2. Whether the plaintiff firm is not registered partnership firm and the suit is barred under section 69 of the Partnership Act?
' From the material on record wherein the certificate of incorporation was found in Arabic (to which both the learned counsel have been pleased to submit true translation in English and Urdu which are also, certified by the translators). The contents verify that the registration is prior to the filing of the case. The said certificate although does not specify that the firm is having a legal status of partnership, which inference can at best be drawn from the name only, the same never the less establishes that the plaintiff is registered at its place of origin coming within the domain of law thereof, the restraint under Section 69 of Partnership Act as in vogue here cannot be applied to the plaintiff on account of its origin. As such in my humble understanding the said issue is partially not proved with nil effect on the merits of the case to the extent of partnership firm and partially decided in negative on account of the Said certificate establishing registration.
3. Who committed the breach of contract in relation to supply of 30,000 tons of basmati Pak-7 white rice (19000 tons of 1988-89 crop and 11000 1989-90 crop)?
' The plaintiff has brought forward the communication between the parties as alleged in the plaint which reasonably ascertains the .Agreement between the parties and the default in the matter. It is bowever considerable that the parties initially agreed to the sale of 30,000 tons of basmati Pak-7 white rice (19000 tons of 1988-89 crop and 11000 1989-90 crop) and accordingly partial delivery was also made and thereafter eventually the terms were changed whereby they both agreed to the sale and purchase 20.580 M.Tons of Irri-6 rice to which the Defendant failed without having any cover of legal exceptions as such no element of frustration was present in the matter nor the same has been pleaded. As such in my humble understanding the defendant committed breach of the said contract as such the same is decided against the defendant. It is however considerable that as the parties had agreed to new terms the liability of the defendant can only be considered for and in respect to the new/lastly agreed terms and conditions leading to its consequential effect, which are discussed hereunder on account of being better placed under the said separate issue.
4. Whether the Defendant had agreed to substitute 12000 tons of basmati Pak-7 of 1988-89 crop of the value of US Dollar 3.76 million at the rate of US $ 313 per metric ton FOB by 20,580 tons of Irri-6 Sindh white 15% - 20%. Broken of 1994-95 crop and the plaintiff accordingly established a fresh Letter of Credit.
' The exhibit Exh.P/1-13 photo stat copy of letter dated 29-11-1994 sent by RECP to plaintiff's local agent is where the offer was made, the same document is Annexure H-1 to the plaint and was/is not denied rather the defendant has also brought forward the same during his evidence. In the plaint the same is also supported by letter of credit as such this issue is decided in affirmative.
5. Whether the Defendant committed breach of contract and neglected and failed to supply the agreed substituted quantity of lrri-6 Sindh White 15% - 20% broken of 1994-95 crop by March, 1995.
' Partially referring to the exhibits and discussion under issue No,4 above in respect to the delivery it is reasonable clear on account of absence of any justification having been brought on record that there is present breach of contract on part of the defendant and perhaps more unfortunate part is the non-returning of advance payment received, which was said to be adjusted for this very transection and noting been brought forward in this regard on record to provide any element of frustration or justified in-ability.
6. Whether the Plaintiff is entitled to specific peiformance of the contract duly modified and demand the supply of the 20500 ton Irri-6 Sindh white (15% - 20% broken of 1994-95 crop under it and/or claim compensation/damages on the basis of the difference between the contractual price and market price during the relevant period?
' On account of the being abandoned no discussion is required as to the element of specific performance, however as to element of damages the same is available under Sale of Goods Act, the referred reported cases further elaborate the legal interpretation specifies that the difference between the date of delivery and the agreed price is liable to considered for calculating the amount which can reasonably ascertain the value to put the seller in position equal to the civil wrong caused i.e, amages/compensation. It is however considerable that although promise of delivery has failed the plaintiff cannot be entitled for a benefit to which he failed to make an actual payment, had he paid the whole amount the whole of the benefit would have gone to him, in the present case the plaintiff has not come up with the amounts if any spent on the margins to the letter of credit or any other amounts spent, perhaps as initially specific performance was being pursued and the claim as to compensation/damages was taken as fall-back which now however where the same is being pursued it cannot be de-linked altogether. It is now a well settled law that for specific performance the purchaser has to deposit the balance price as agreed in order to retain the right to the property sold although inflation and devaluation of money has a much more quantitative value. Although immovable property and goods are different where credit is available and accordingly considered to my humble understanding the principle of justice demands actual payment of .Price/value to company with its resulting benefit especially in matters of future transactions and conclusion thereof. The cases cited by the learned counsel for the plaintiff are distinguishable in this regard i.e, conclusion which is acquired on receipt of reciprocal consideration, however the other elements are not applicable.
7. What should the decree be?
' The result of the above discussion considering the material brought on record the selling price as was agreed to between the parties was @ US $ 182.59 per M.Ton for 20,580 M. Tons of Irri-6 Sindh White 15-20 % broken of 1994-95 crop, whereas the price as on 31st March, 1995 (brought forward by circular of London Rice Brokers Association Ex.P/2-1) for Pakistani rice quoted for sale to Zimbabwe at $240 PMT. As the price of Pak-7 basmati rice is given as $450 it can be understood that the said price of $240 PMT is for Irri (the two most common varieties. The difference of $5 is present on account of the broken content as shown in the referred circular is more than what was agreed to between the parties but by 5% the same is liable to be ignored as negligible as such the said price can reasonably be considered, more so as the defendant has failed to bring forward any figure in this regard. Also is taken in account the element of 10% more or less as referred to in the plaint to the benefit of the defendant and substitution of the contract is the case of the plaintiff as such the difference and calculation is given as under; ' (Agreed price) $182.59 - $240 (market price) = (difference) $57.41 Agreed quantity 20,580 - (10% more/less option 2058) 18,522 57.41 x 18,522 = $1,063,348.02 I% being US$ 10,633.48 ' The defendant prima-face having paid I% (Tender instructions Ex.P-C/1) of the amount he is entitled for the same being $10, 633,48/.
' As the amounts have been calculated in dollars, however decree being given in equivalent rupees in accordance with the prayer made rate at the date of decree no equalizer as to inflation and/or pendency is being considered as stability is normally attributed to the US dollar, however, from the date of decree till realization the plaintiff shall also be entitled to profit at saving bank rate along with cost of the suit.
In view of the above discussion and finding the suit of the plaintiff is decreed to the difference of increase price of the contract date and of performance/delivery in US $10,633.48 converted to Pakistani Rupees as prevailing on the date of decree and payable in rupees, as the conversion has been effected on the date of this decree equalizer has not been included and further @ saving bank rate treated as equalizer on nonpayment from the date of decree till realization along with costs of the suit.
' The office to prepare a decree accordingly.