DADA STEEL MILLS vs METALEXPORT and 5 others

1. ' This suit was filed on 7-3-1973 by the plaintiff, Dada Steel Mills, a partnership firm, against defendants No.1 to 6 for specific performance and permanent injunction in respect of a ship, S.S. "MARBELLA". Defendant No.1 is Metalexport, a firm carrying on business at Beirut; defendant No.2 is Paul A. Ardhaldjian; and defendant No.3 is Hagop Ardhaldjian. Defendant No.4 is Ali Abdul Aziz Al- Homaidi. According to the plaint, the business of defendant No.1 firm is carried on by defendant No.2 as sole proprietor or by defendants No.2, 3 and 4 as partners. Defendant No.5 is Toyomenka (Pakistan) Limited, local agents of defendant No.1. Defendant No.6 is Gulf Shipping Corporation Ltd., who is described as the local agents of the ship in question. The negotiations had taken place between the plaintiff and defendant firm for the purchase of the ship S.S. MARBELLA. According to the plaintiff, defendant No.5, acting as the agents for the defendant firm, owners of the ship, by their letter dated 16-10-1972 (Exh.6/4) made the final offer for the sale of the ship to the plaintiff. By this letter dated 16-10-1972, defendant No.5 informed the plaintiff that they had received the final firm offer from their principals i.e. the defendant firm, through telex No.663 (Exh.6/1) for the vessel in question, which telex was enclosed with the letter. The price of the vessel to be delivered at Karachi Port was mentioned in the letter as US $55 per light displacement ton (LDT) and the total price according to the tonnage came to US $3,05,800. Various terms and conditions of the final offer were also specified in Exh. 6/4. By cable dated the same day i.e. 16-10-1972 (Exh.6/5), the plaintiff confirmed their acceptance of the offer made by the defendant firm through defendant No.

5. In this cable addressed to defendant No.5 (Toyomenka), the plaintiff confirmed acceptance of all terms and informed that they were submitting the 5 per cent bank guarantee as required and requested for forwarding the contract and 5 per cent performance bond and builders' plan to enable the plaintiff to open the letter of credit. By letter dated 17-10-1972 (Exh. 6/6) addressed to the plaintiff, Toyomenka asked the plaintiff to submit the bank guarantee for Rs.1,68,200 being 5 per cent of the purchase value of the ship and informed that on receipt of such bank guarantee, Toyomenka shall confirm to their principals to issue their guarantee to the defendant firm on behalf of the plaintiff and that the bank guarantee to be given by the plaintiff will be released on receipt of in-order letter of credit opened by the plaintiff. The requisite bank guarantee in the sum of Rs.1,68,907 was furnished on behalf of the plaintiff by Muslim Commercial Bank Limited in favour of Toyomenka. This bank guarantee is, dated 18-10-1972 and is exhibited as Exh. 6/7. Through letter dated 19-10-1972 (Exh. 6/9) Toyomenka acknowledged receipt of the bank guarantee dated 18-10- 1972 and informed the plaintiff that they had asked their principals to forward the necessary documents namely 5 per cent performance Bond, builders' plan or certificate certifying 5560 LDT of the vessel in question and proper contract memorandum of agreement. It was further informed that the defendant firm, principals of Toyomenka, may request the plaintiff to open L/C for the vessel in favour of their Kuwaiti associate namely defendant No.4. A formal memorandum of agreement dated 24-10-1972 (Exh. 6/11) was signed on behalf of the plaintiff firm, as buyers, by their partner Ghulam Hussain and on behalf of Metalexport (defendant No.1), as sellers, by Paul A.

2. Ardhaldjian (defendant No.2). Clause 16 of this agreement is the crucial clause, which relates to the opening of the irrevocable confirmed letter of credit. The entire defence of defendants Nos.1 to 4 is based on clause 16. According to them, the letter of credit opened by the plaintiff was not in conformity with clause 16 and as such there was a breach of contract on the part of the plaintiff and, therefore, the defendants Nos.1 to 4 were not liable to perform the contract. It may be observed here that the ship had come to Karachi Port apparently for the purposes of being delivered to the plaintiff under the contract dated 24-10-1972 but at the last minute the defendant firm refused to honour the contract on the ground that the letter of credit had not been opened by the plaintiff in accordance with clause 16 of the contract dated 24-10-1972. It may also be observed that apart from this defence taken on behalf of the defendants Nos.1 to 4 in the present suit for specific performance and injunction, the other main plea taken on behalf of the defendants No.1 to 4 is that a suit for specific performance of the contract for the purchase of the ship in question was not maintainable in law.

3. ' In paragraph 6 of the plaint it is stated that the price was agreed to be paid by means of irrevocable confirmed letter of credit in favour of defendant No.4, lodged with the National Bank of Kuwait Account No.379-4/B payable against complete transfer documents and that the amount was to be realized in favour of the said beneficiary only after delivery of the ship to the plaintiff. In paragraph 7 of the plaint it is mentioned that the plaintiff had entered into the agreement in question for the purposes of dismantling the ship and using the scrap, to the knowledge of the defendants. It was further stated that the plaintiff entered into the said agreement with the defendants with the permission of the Government of Pakistan and after obtaining import licence, the plaintiff on 6-11-1972, through Muslim Commercial Bank Limited opened an irrevocable letter of credit in favour of defendant No.4, as stipulated, in the sum of US $3,05,800 being the total agreed price for the ship at the rate of US $55 per LDT.

4. ' By letter, dated 9-1-1973 (Exhibit 6/43) addressed to the plaintiff, Toyomenka reproduced the text of a telex message received from their principals. This letter dated 9-1-1973 of Toyomenka is reproduced here:- "Subject: Memorandum of Agreement dated 24th Oct., 1972 for sale of s.s. "MARBELLA"

5. ' We are pleased to refer the telephonic conversation the undersigned had with your Partner Mr.Ghulam Hussain and reproduce hereunder the text of a telex message received from our principals for your kind perusal:- "MARBELLA LEFT JEDDAH ON 1ST JANUARY AT 0800 HOURS FOR KARACHI WITH SCRAP CARGO HOPE VSL REACHING KARACHI AROUND 15TH JANUARY THANKING YOU, WE ARE, YOURS FAITHFULLY"

6. ' Exh. 6/44 is a copy of the letter, dated 12-1-1973 of Gulf Shipping Corporation Limited (defendant No.6) addressed to the Traffic Manager, Karachi Port Trust informing that the ship s.s. "MARBELLA" was calling at Karachi Port under their agency and was expected to arrive off--port on 13-1-1973 with about 6,000 tons of steel and aluminium scrap to discharge. It was further informed that the vessel had been purchased by the plaintiff firm for scrapping and that the ship will be delivered to the plaintiff by Gulf Shipping Corporation Limited after completion of the discharge of scrap cargo.

7. Copies of this letter were also endorsed to Toyomenka and the plaintiff. Exh. 6/45 is a letter of Toyomenka addressed to the plaintiff and the same is reproduced here:- "With reference to the memorandum of agreement dated 24th October, 1972, we are pleased to bring to your kind notice that vessel s.s. "MARBELLA" had already arrived at Karachi off--port on 17th January, 1973."

8. We regret that due to congestion in Karachi Port the vessel s.s. "MARBELLA" is awaiting her turn for berthing to discharge 7,900 tons cargo before she becomes ready to be delivered to you and you will please then take delivery of the vessel. We regret the delay in delivery of the vessel which is due to the above circumstances.

9. Thanking you, we are, ' Yours faithfully, Sd/- ' P.S. In view of the above circumstances kindly, extend the date of delivery till 28th February, 1973."

10. ' In response to the above request for extending the period of delivery the plaintiff asked Muslim Commercial Bank Limited to do the needful, which was done and Muslim Commercial Bank Limited informed defendant No.4 through letter dated 1-2-1973 that they had amended the L/C by extending the date till period upto 28-2-1973. This letter is Exh. 6/51. Exh. 6/54 is a letter dated 16-2- 1973 of the plaintiff addressed to Toyomenka, in which reference is made about the extension of the delivery date upto 28-2-1973 and also about the extension of the date of expiry of the letter of credit upto the same date. The plaintiff further informed that they were ready to take delivery of the vessel and desired Toyomenka to inform them about the date, on which they would give delivery of the vessel to the plaintiff as per terms of the contract. Exh. 6/56 is a cable sent by plaintiff to Toyomenka referring to their letter dated 16-2-1973 and asking for the date, on which possession of the ship would be given to the plaintiff.

11. ' The trouble started between the parties by cable dated 24-2-1973 (Exh. 6/59) of defendant No.4 addressed to the plaintiff, which is reproduced here:- "REFERENCE MEMORANDUM OF AGREEMENT DATED 24TH OCTOBER, 1972 BETWEEN YOURSELVES AND OURSELVES WHEREIN WE AGREED TO SELL AND YOU AGREED TO PURCHASE THE VESSEL MARBELLA SUBJECT TO TERMS MUTUALLY AGREED WE NOW ADVISE YOU THAT AS A RESULT OF YOUR FAILURE TO OPEN L/C IN ACCORDANCE WITH THE MEMORANDUM OF AGREEMENT WE NO LONGER REGARD THE SAID MEMORANDUM OF AGREEMENT AS BINDING ON US."

12. ' Exh. 6/60 is a cable dated 24-2-1973 of Toyomenka addressed to the plaintiff and it reads as follows:- "YOUR LETTER DTD 16 STOP YOUR TELEGRAM LETTER DTD 20TH RECD AFTER DEPARTURE OF PRINCIPAL WITH WHOM YOU HAD SEVERAL MEETINGS DURING HIS STAY AT KARACHI STOP HAVE PASSED ON TO PRINCIPAL FOR THEIR NECESSARY ACTION STOP MEANTIME UNDERSTAND YOU HAVE ALREADY AMENDED L/C AS PER MEMORANDUM OF AGREEMENT (50) AND ALSO INCREASED AMOUNT AS AGREED: WATATYO"

13. ' This cable of Toyomenka was replied on behalf of the plaintiff by their advocate through cable (Exh. 6/62) which reads as follows:- "YOUR TELEGRAM DATED 24TH FEBRUARY 1973 ADDRESSED TO DADA STEEL KARACHI READING AS UNDER QUOTE YOUR LETTER DTD 16TH STOP YOUR TELEGRAM LETTER DTD 20TH RECD AFTER DEPARTURE OF PRINCIPAL WITH WHOM YOU HAD SEVERAL MEETINGS DURING HIS STAY AT KARACHI STOP HAVE PASSED ON TO PRINCIPAL FOR THEIR NECESSARY ACTION STOP MEANTIME UNDERSTAND YOU HAVE ALREADY AMENDED L/C AS PER MEMORANDUM OF AGREEMENT (50) AND ALSO INCREASED AMOUNT AS AGREED: WATATYO. UNQU OTE HAS BEEN PASSED ON TO US BY OUR CLIENTS MESSRS DADA STEEL MILLS TO REPLY YOU ON THEIR BEHALF THAT YOU AND YOUR PRINCIPALS ARE LIABLE TO MAKE DELIVERY OF THE VESSEL "MARBELLA" AS PER MEMORANDUM OF AGREEMENT DATED 24TH OCTOBER 1972 AND YOUR VARIOUS LETTERS AND FURTHER TO DENY SPECIFICALLY THAT ANY INCREASE IN THE AMOUNT REPRESENTING PURCHASE PRICE OF THE SAID VESSEL HAD BEEN AGREED UPON BY THEM AS ALLEGED BY YOU AND ALSO DENY THAT OUR CLIENTS AGREED TO ANY MODIFICATION OF THE MEMORANDUM OF AGREEMENT OBVIOUSLY DUE TO DEVALUATION OF US DOLLAR YOU WISH TO CLAIM WITHOUT ANY LEGAL JUSTIFICATION WHATSOEVER SOME EXTRA AMOUNT FORWARD A FALSE PLEA THAT OUR CLIENTS AGREED TO PAY INCREASED AMOUNT STOP THE MEETINGS YOU HAVE REFERRED TO IN YOUR TELEGRAM WERE NECESSITATED DUE TO YOU AND YOUR PRINCIPAL'S ATTITUDE WHICH SHOWED CLEAR INTENTION TO BACK OUT OF THE CONTRACT DUE TO RISE IN WORLD PRICE OF SHIPS FOR SCRAPPING STOP OUR CLIENTS HOWEVER DENY THAT ANY SUCH INNOVATION OF THE CONTRACT AS REFERRED TO BY YOU IN YOUR TELEGRAM WAS AGREED UPON STOP AS ALREADY EXPLAINED TO YOU AND YOUR PRINCIPA'L'S REPRESENTATIVE THAT OUR CLIENTS HAVE ENTERED INTO FORWARD CONTRACTS FOR SALE OF SCRAP OF THE SAID VESSEL MARBELLA AND THE NON-AVAILABILITY OF SHIP OF THE DESCRIPTION OF S.S.MARBELLA WOULD PLACE THEM IN AN EMBARRASSING POSITION AND THEY WOULD LOSE THEIR CREDIT IN THE MARKET IN CASE YOU AND YOUR PRINCIPALS COMMIT BREACH OF THE AGREEMENT STOP PLEASE NOTE THAT UNLESS WITHIN THREE DAYS FROM RECEIPT OF THIS NOTICE YOU DO NOT INTIMATE WILLINGNESS TO GIVE DELIVERY OF THE SAID VESSEL MARBELLA AS PER AGREEMENT WE HAVE INSTRUCTIONS TO TAKE SUITABLE ACTION IN COURT OF LAW."

14. ' The ship was not delivered to the plaintiff and as such they filed the present suit on 7-3-1973 for specific performance and permanent injunction. According to the plaint, the plaintiff had performed their part of the agreement and had been and were still ready and willing to perform all their obligations under the contract and had also extended the time limit of L/C upto 31-3-1973 but the defendants had refused to carry out their part of the agreement and were negotiating for the sale of the ship with other parties and the plaintiff was entitled to the specific performance of the agreement. Paragraph 15 of the plaint is reproduced hereunder:- "That monetary compensation in a case such as the present one would not be sufficient or adequate relief as the ships suitable for demolition are not available and the plaintiff has already entered into agreements with several parties for sale of scrap and in case relief by way of specific performance is not granted, plaintiff will be totally ruined. Further as defendants 1 to 4 are all foreigners and have no other assets in Pakistan except the vessel in the suit in case they take away the ship out of the jurisdiction of this Honourable Court it will not be possible to recover the decretal amount from the defendants. However in case for any reason the relief for specific performance cannot be granted to the plaintiff, the plaintiff in the alternative seeks the relief of recovery of Rs.20,36,628 as compensation being the difference between the contractual rate and the prevailing world market rate of US $92 per L.T.D."

15. ' However, in the prayer clause there is no relief for compensation. The plaintiff claimed a decree for specific performance of the agreement dated 24-10-1972 ordering the defendants to give physical possession of the vessel and to execute the documents of transfer and a permanent injunction restraining the defendants from giving delivery of the vessel or transferring the same to any other person or from removing the ship from the jurisdiction of this Court.

16. ' Defendants Nos. 1 to 4 in their written statement resisted the suit. It was pleaded that the plaintiff had one Feroze Master and another person as partners in the transaction in question and unless the said persons were shown as partners in the plaintiff firm and it is duly registered as such, the suit is liable to be dismissed. It was, however, admitted that the defendant No.1 was a firm in Beirut and its business was being carried out by defendant No.2. It was denied that defendant No.3 or 4 were partners of defendant No.1. It was admitted that defendant No.3 is the brother of defendant No.2 and had acted as a representative of defendants Nos.1 and 2. It was also admitted that according to the agreement dated 24-10-1972, the plaintiff was required to open a letter of credit in the name of defendant No.4. It was, however, denied that the plaintiff opened the letter of credit in accordance with the terms of the memorandum of agreement. It was admitted that defendant No.5 acted as local agents for defendants Nos.1 and 2 and that defendant No.6 was the local agents of the ship but it was denied that defendant No.6 had either the authority or that they had undertaken to give delivery of the ship to the plaintiff. The offer dated 16-10-1972 is not denied in the written statement but it was denied that the agreement of sale of the ship was finalized between the parties as per the terms contained in the letter dated 16-10-1972. According to the defendants Nos.1 to 4, the agreement was finalized on 24-10-1972 and the parties were governed by the terms and conditions stated in the said memorandum of agreement. It was denied that the amount was to be realized in favour of the beneficiary only after the delivery of the ship to the plaintiff.

17. According to these defendants, payment was to be made against the presentation of documents as contained in clause 16 of the agreement dated 24-10-1972. These defendants denied knowledge of any agreements entered into by the plaintiff with third parties. It was denied that the ships were not available at the price of US $92 per LDT by end of February, 1973. It was denied that these defendants wanted to back out of the contract and were making efforts to sell the ship to any other party or that defendant No.3 had come to Karachi for the purposes of selling the ship to any other party. In paragraph 12 of their written statement it is mentioned that subsequent to the execution of the agreement dated 24-10-1972, the plaintiff was required to open a letter of credit in favour of defendant No.4 strictly in accordance with clause 16 of the said agreement but instead of opening the letter of credit strictly in accordance with the said clause, the plaintiff with ulterior motives opened a letter of credit containing various discrepancies. Some of the said discrepancies have been specified in paragraph 12 of their written statement. According to these defendants, it is the plaintiff who had committed breach of contract. It is also pleaded that in any case specific performance cannot be granted in view of the provisions contained in the Sale of Goods Act and Specific Relief Act. It was denied that the difference in the contract price and market price was Rs.20,50,628.

18. ' Defendant No.6 also filed a written statement, in which they pleaded that they had acted as local shipping agents of the owners of the vessel in question and the suit against them was not maintainable and liable to be dismissed. It was further averred that the suit was barred by section 69 of the Partnership Act. According to defendant No.6, they had acted as local shipping agents of the said vessel on behalf of the owners and the said vessel had carried cargo which was to be discharged at Karachi Port and that they had incurred huge amount on account of port charges, etc., which amount had not been reimbursed by defendants Nos.1 to 5. According to defendant No.6, defendants Nos. I to 5 were liable to pay Rs.6,57,034.69 to defendant No.6.

19. ' On pleadings of the parties the following issues were settled by this Court on 16-11-1972:--

(1) Whether Feroze Master was the partner of the plaintiff in respect of the transaction in suit?

(2) Whether the plaintiff firm is registered under the Partnership Act?

(3) Whether the plaintiff was ready and willing to perform his obligations under agreement dated 24-10-1972? If not, to what effect?

(4) Whether the defendants committed breach of agreement dated 24-10-1972? If so, to what amount of compensation, if any, is the plaintiff entitled to?

(5) Whether the plaintiff committed breach of agreement dated 24-10-1972? If so, to what effect?

20. (5A) Whether the plaintiff had agreed to increase the amount of letter of credit by 10$?

(6) Whether the suit is not maintainable as alleged in para.15 of the W.S.?

21. (6A) Whether the suit is not maintainable against defendant No.6 as alleged in para.1 of W.S. by defendant No.6?

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

2. Alongwith the suit, the plaintiff filed an application under Order XXXVIII, rule 5, Order XXXIX,rules 1 and 2,,Order XLI, rule 1 read with section 151, C. P C. seeking an interim order for attachment before judgment of the ship in question or an injunction restraining the defendant from selling the ship or in the alternative for appointment of a receiver of the ship. One of the main arguments on behalf of the defendants Nos.1 to 4, while opposing the application for interim relief, was that the suit for specific performance of the agreement of sale of the ship in question was not maintainable in law.

22. By order dated 16-10-1973, a learned Judge of this Court, who decided the interim application, was tentatively of the view that ships although movables, are such commodities in respect of which specific performance of contract of sale should be granted. It was further observed by order dated 16-10-1973 that the plaintiff had paid the entire price by opening an irrevocable letter of credit in favour of plaintiff and that he had made substantial investment and, therefore, the discretion to decree specific performance can properly be exercised in favour of the plaintiff. By order dated 16- 10-1973, it was observed that the plaintiff had made out a prima facie case of his right to seek specific performance of contract and that the balance of convenience was also in his favour and further that in case interim relief was not granted, the plaintiff might not be able to get the rewards of the suit in case a decree was passed in his favour. The learned Judge was of the view that ad- interim attachment that had been granted was to be confirmed but on reconsidera tion it was thought that an order of attachment might work hardship on both the parties as each day the ship was in port it cost about Rs.10,000 and the suit was not likely to be disposed off at a very early date.

23. Accordingly, after hearing the learned counsel 'appearing for the plaintiff and defendants Nos.1 to 4, by consent, Nazir of this Court was appointed Receiver of the ship with the power of managing and selling the ship as by so doing recurring expenses incurred on the berthing of the ship at Karachi Port could be avoided. It was further agreed by the learned counsel that the Nazir should invite tenders from the parties afresh and that the person making the highest offer be given the delivery of the ship. Further directions were given to the following effects by order dated 16-10- 1973:- "This suit is not likely to be disposed of at a very early date because in any case it is not a short cause matter and for that reason I again asked Mr. S.M.Sadiq and Mr.Mohsin Tayab Ally who were present in Court, to assist me on the point as to what should be the proper order of the Court. The learned Advocates agreed and consented that it would be fit and proper if the Nazir of this Court was appointed the receiver in regard to the ship. Such consent is however without prejudice to contentions which they may raise at the time of hearing of the suit. They stated that the receiver should have the power of managing and selling the ship as by so doing the recurring expenses incurred on the berthing of the ship at the Port could be avoided; because that will be a dead loss to both the parties in any event, whatever be the result of the suit. The learned Advocates have further agreed that the Nazir should invite tenders from parties afresh within a week from today.

24. The plaintiff may make a fresh offer for purchase of the ship and the defendants also may procure fresh offers. The person making the highest offer shall be given the delivery of the ship. I would in such circumstances agree with the learned Advocates but only subject to a condition that as far as the plaintiff is concerned, his offer need not be accompanied by 25 per cent of the earnest money but so far as the other offers that are procured by the defendants, the earnest mony of 25 per cent must accompany such offer. Of the amount that is offered in case the offer of the plaintiff is accepted he shall deposit forthwith in Court the amount that he has offered less an amount of Rs.32 lacs. In case the offer of other party procured by defendants is accepted, the full amount shall be deposited in Court. So far as the acceptance of offer of the plaintiff is concerned, the plaintiff shall in the event of his offer being accepted remit the amount stated in the original agreement of sale by irrevocable letter of credit to Kuwait; in fact he has actually opened an irrevocable letter of credit in favour of the defendants, but he will only instruct his bankers to release the amount in favour of the defendants. The balance of the amount if any shall be retained by the Nazir in Court. In case the offer of any other party is accepted the amount shall be deposited in Court at once and of the said amount a sum of Rs.32 lacs shall be paid to the defendants immediately and the balance shall lie as deposit in Court. The amount thus lying in deposit in Court shall continue to lie in deposit until the disposal of the suit."

25. ' Pursuant to order dated 16-10-1973, offers were made by the parties to the Nazir of this Court and the Highest offer of Rs.65,05,299 made by the plaintiff was accepted. In the light of the directions given in the order dated 16-10-1973, the entire foreign exchange covered by the letter of credit was required to be released to defendant No.4. However, in view of later orders passed on interim applications, a sum of Rs.1,80,000 was paid to Captain Haleem, master of the vessel, another sum of Rs.3,42,844/69 was attached in Admiralty Suit No.7/74 and US $ 2,53,231/86 was remitted to defendant No.4 by the plaintiff. The aforesaid three sums represent the entire amount of foreign exchange covered by the letter of credit opened by the plaintiff. The balance amount of Rs.34,77,899 which formed part of the offer made by the plaintiff for the ship pursuant to the order dated 16-10-1973, was deposited by the plaintiff in this Court, and later on by order dated 10-4-1974 the plaintiff was allowed to withdraw this amount on furnishing a bank guarantee. The delivery of the ship was given to the plaintiff and the ship must have been scrapped by the plaintiff and the scrap disposed of. Therefore, if the plaintiff wins this suit and he can establish that there was no breach on his part but there was breach of the contract on the part of the defendants Nos.1 to 4 and that the plaintiff was entitled to specific performance of the contract, the result would be that the bank guarantee furnished by the plaintiff pursuant to order dated 10- 4-1974 will stand discharged. If on the other hand, it is not established that the plaintiff was entitled to specific performance of the contract but it is established that there was breach of the contract on the part of the defendants Nos.1 to 4, the plaintiff will then be entitled to damages and the question that would require further consideration would be the extent of damages to which the plaintiff would be entitled in such event. lf, however, it is found that there was no breach of contract on the part of the defendants Nos.1 to 4 but the breach was on the part of the plaintiff, the present suit will be dismissed and in that case defendants Nos.1 to 4 will be entitled to get the amount covered by the bank guarantee furnished on behalf of the plaintiff. In effect, therefore, the controversy at present is not as to whether the ship is to be delivered to the plaintiff as the ship has already been delivered to the plaintiff pursuant to the order dated 16-10-1973 but the fight between the concerned parties is in respect of the bank guarantee of Rs.35,00,000 furnished on behalf of the plaintiff on 29-5-1974.

3. It may be observed here that after the offer made by the plaintiff for the ship, pursuant to order dated 16-10-1973, had been accepted, a grievance had been made on behalf of the defendants Nos.1 to 4 that defendant No.4 had not been released the foreign exchange under the letter of credit opened by the plaintiff and it was considered necessary to record evidence on that point.

26. Accordingly on 4-12-1973, evidence of three witnesses was recorded as Court witnesses and these were Hagop (defendant No.3), Siraj Baqir Jafferi of Chartered Bank Limited and Abdul Aziz Sakrani of Muslim Commercial Bank Limited. Later on an amount of US $2,53,231.86 was released to defendant No.4. In his evidence, defendant No.3 stated that he was the agent of defendant No.4 and that he was prosecuting the present suit (apparently on behalf of defendants Nos.1 to 4).

4. On behalf of the plaintiff, initially three witnesses were examined, namely P.W.1 Ghulam Hussain (Exh. 8) Managing Partner of the plaintiff firm, P.W. 2 Hadi Ali, (Exh. 9) Assistant Vice-President of Muslim Commercial Bank Limited and Muhammad Hanif (Exh. 10), a businessman. On behalf of defendants Nos. 1 to 4, four witnesses were examined, namely, D.W.1 Ibrahim Dabdub, (Exh.11)

27. Manager, National Bank of Kuwait, D.W.2 Hagop (Exh.12) defendant No.3 and the representative of defendants Nos. 1 to 4, D.W.3 S.Khawaja (Exh.13) who was working in 1972 as Assistant to Mr.Abdullah, Manager of defendant No.5, and D.W. 4 Muhammad Abdullah (Exh.14) an employee of defendant No.5. In rebuttal P.W. Abbas Rajkotwala (Exh.15) was examined by the plaintiff .

28. ' On behalf of the plaintiff arguments were addressed by Mr.A.K.Brohi, Advocate. Mr.Mohsin Tayebally made his submissions on behalf of defendants Nos. 1 to 4. Mr.S.M.Sadiq, Advocate, gave reply on behalf of defendants Nos.1 to 4.

5. 1 may first refer to a submission made by Mr.Mohsin Tayebally that in para.4 of the plaint in the suit what was being referred to was the letter of defendant No.5 dated 16-10-1972 and the memorandum of agreement dated 24-10-1972 and in the prayer clause the plaintiff was seeking specific performance of the agreement dated 24-10-1972 and as such the plaintiff was restricted to claiming specific performance of the said agreement whereas in the evidence and arguments on behalf of the plaintiff what was being sought was not the specific performance of the agreement dated 24-10-1972 but specific performance of a new agreement. According to the learned counsel for the defendants Nos. 1 to 4, the plaintiff's case in the evidence was that after the execution of the ageement dated 24-10-1972 certain terms and conditions of the agreement here changed by agreement between the parties, which agreement was, however, denied by Mr.Mohsin Tayebally, Advocate, and this fresh agreement or novation was not pleaded in the plaint and as such no relief can be claimed in the present suit on the basis of the alleged novation or fresh agreement. It was argued that if there was any novation of the original agreement, this should have been specifically pleaded. According to the learned counsel for the defendants Nos. 1 to 4, there being no pleadings on the point of novation, these defendants have been prejudiced in their defence. It was submitted that no issue has been framed in the suit on the point of novation as there was no averment about novation and that in case novation of the original agreement had been specifically pleaded the defendants Nos. 1 to 4 would have led evidence to the effect that if any amendments had been made in the letter of credit which were not in accordance with the terms and conditions of the contract dated 24-10-1972, the same had not been made at the request or with the authority of defendants Nos. 1 to 4. Learned counsel relied upon the following authorities for the proposition that if there is any novation of a contract made between the parties, such novation is required to be expressly pleaded:-

(i) Shivjiram v. Gulabchand 194 I.C. 806 ' In this judgment from Nagpur High Court it was observed that if the plaintiff wanted to make out a case of novation, he should have pleaded the necessary facts to found novation and stated what was the original contract and in what way it had been replaced by a new contract.

(ii) Fairland Expert Syndicate v. Bengal Oil Mills Limited PLD 1970 Kar.

29. 125.

30. ' It was held in this case by Mr. Justice Ghulam Rasool Shaikh that a party cannot be allowed to set up altogether a new case during the course of evidence and that a plea on which the case is based must be specifically stated in the pleadings and cannot be afterwards introduced.

(iii) Karim Commercial Company Limited v. United Oriental Shipping Company PLD 1970 Kar.

31. 427.

32. ' In this case, during arguments on the question of limitation, a plea was raised that a document amounted to an acknowledgment of liability before expiry of the statutory period of limitation and therefore it had extended the time and the suit was filed within the limitation period. Mr. Justice Dorab F. Patel observed that this argument was barred by the pleadings as despite the mandatory provisions of Order VII, rule 6, C.P.C., the plaintiff had not pleaded an extension of time in the plaint.

(iv) Shaista Gul v. Duranai PLD 1969 Pesh.

33. 185.

34. ' In this case a learned Single Judge, after mentioning that the plaintiff in the suit was not asking for the specific performance of the terms agreed upon between the parties but was asking for something being given in compensation, observed that this was not within the scope of the law while granting specific performance of the terms of the contract and a plaintiff coming for specific performance of the contract must frame himself fully and completely to the terms of the contract and his only prayer would be that he should be granted under the command of the Court what a defendant in the case had agreed to give.

35. ' On behalf of the plaintiff, in reply to this objection relating to novation, it was submitted by Mr.S.M.Sadiq that there was no novation or substitution of the contract dated 24-10-1973. According to Mr.S.M.Sadiq, there was no amendment in the contract dated 24-10-1972 but only some amendments were made in the letter of credit at the instance defendants Nos. 1 to 4 and such amendments in the letter of credit do not amount to amendment of the contract. It was also argued that defendants had waived their rights by not repudiating the contract but on the other hand they had accepted the amended letter of credit.

36. 'In the facts and circumstances of the present case I am not inclined to accept the contention of Mr.Mohsin Tayebally, Advocate that in the present case there was a novation of the contract dated 24-10-1972, and as such the suit is liable to be dismissed as such novation was not specifically pleaded in the plaint by the plaintiff. There is no dispute between the parties about the execution of the agreement dated 24-10-1972, the identity of the vessel, the price payable at the rate of US $55 per LDT, the total tonnage of the vessel, the period of delivery and that the payment was to be made through a confirmed irrevocable letter of credit to be opened by the plaintiff in favour of the defendant No.4. If some amendments were made in the letter of credit and it is proved that such amendments had been made at the request of the defendants and that till the last minute no objection had been raised by the defendants Nos. 1 to 4 that the letter of credit that had been opened by the plaintiff was not in accordance with the agreed terms between the parties, the present suit is not liable to be dismissed on the ground that in the plaint it is not specifically mentioned that some amendments had been made in the letter of credit at the request of the defendants. In such a case it would not amount to novation of the original contract requiring specific plea to be taken in the pleadings. As an illustration, one may take the case of a contract in writing between two parties for the purchase of a piece of land at a certain price payable in cash. If after the execution of such a contract, the seller requests the purchaser that out of the total consideration payable in cash some portion thereof may be given through a bank draft and the balance in cash, such request, if accepted by the purchaser, will not amount to novation of the original contract requiring specific plea to be taken in the plaint, and a suit filed by the purchaser for specific performance of the contract for the sale of such land will not be liable to be dismissed on the ground that in the plaint it is not mentioned that after the execution of the original contract, at the request of the seller, the mode of payment, which was originally required to be all in cash, was modified to part cash and part through bank draft. The principles laid down in the four judgments cited by Mr.Mohsin Tayebally, Advocate, are, therefore, not appliable in this case. The objection raised on behalf of the defendants Nos.1 to 4 that as there is no specific plea in the plaint that some amendments had been made in the letter of credit at the request of defendants No.1 to 4 after the execution of the contract dated 24-10-1972, the suit is liable to be dismissed, is accordingly rejected.

6. I may now take up the issues settled by this Court on 16-11-1972.

37. Issue No.1 is whether Feroze Master was the partner of the plaintiff in respect of the transaction in suit. This issue was not pressed by Mr. Mohsin Tayebally, Advocate for the defendants Nos. 1 to 4, on whose behalf this issue had been framed.

7. Second issue is about the registration of the plaintiff firm. This issue was also not pressed by Mr.Mohsin Tayebally, Advocate. However, it may be observed that P.W.1 Ghulam Hussain, Managing Partner of the plaintiff firm, had produced a certified copy of the certificate of registration of the plaintiff firm as Exh. 8/1. There was no cross-examination of this witness on this point. Issue No.2 is accordingly decided in the affirmative.

8. Issues Nos. 3, 4 and 5 can be taken up together. What has to be decided is as to who committed breach of the agreement dated 24-10-1972.

38. ' The plaintiff claims that they had opened the required irrevocable confirmed letter of credit in favour of defendant No.4 in terms of the agreement but defendants Nos. 1 to 4 did not deliver the ship and backed out of the agreement. It has, therefore, been alleged that defendants Nos.1 to 4 committed breach of contract and there has been no breach on the part of the plaintiff. On the other hand the defence of defendants Nos. 1 to 4 is that the letter of credit opened by the plaintiff was not in accordance with contract dated 24-10-1972 and as such the breach was on the part of the plaintiff and defendants Nos.1 to 4 were absolved of their obligation to deliver the ship to the plaintiff.

39. ' It was argued by Mr.Mohsin Tayebally that in the case of a contract where payment is to be made through a letter of credit, it is the obligation of the purchaser to open the letter of credit strictly in accordance with the terms of the contract and opening of the letter of credit strictly in terms of the contract is a condition precedent and if such letter of credit is not opened by the purchaser, there is no obligation of the supplier to carry out his part of the contract. In connection with the obligations of the parties in respect of transactions involving the opening of letter of credit, Mr.Mohsin Tayebally referred to the following reported judgments from the English jurisdiction:-

(i) Garcia v. Page & Co. Ltd. (1936) 55 Lloyd's List Law Reports 391.

(ii) Etablissenents Chainbaux S.A.R.L. v. Harbormaster (1955) I Lloyd's List Law Reports 303.

(iii) Dix v. Grainger (1922) 12 Lloyd's List Law Reports 194.

(iv) Giddens v. Agnlo-African Produce Co.Ltd. (1923) 14 Lloyd's List Law Reports 230.

(v) Heisler v. Anglo-dal Ltd. (1954) 2 A.E.R.

40. 770.

41. ' The contract dated 24-10-1972 provided for payment through irrevocable confirmed letter of credit in favour of defendant No.9 as per clause 16 which reads as follows:- "16. Purchase money US $3,05,800 (said US dollar three hundred five thousand eight hundred) shall be paid by irrevocable confirmed letter of credit in favour of Ali Abdul Aziz Al-Hamaidi lodged with National Bank of Kuwait, Kuwait A/c No.379-4/B irrevocably valid in Kuwait for six months from date and available by draft (s) against at sight drawn on openers and accompanied by the following documents:- ' AAA--Signed invoice in triplicate showing cost of delivery Karachi Port.

42. ' BBB--Bill of sale free of debts and liens on British Form 79a-10a visaed by Kuwaity Chamber of Commerce and countersigned by Pakistan Counsul in Kuwait.

43. ' CCC--The seller's letter of undertaking to supply buyers with a cancellation of register of Somali Registry as soon as possible.

44. ' DDD--Original or copy of Builder plan and certificate showing light displacement tonnage (LDT) of vessel to be 5560.

45. ' EEE--Owners letter guaranteeing that nothing has been removed before the delivery in Karachi Port.

46. ' FFF--Vessel's sailing certificates valid for minimum three months.

47. ' GGG--Cable confirming that ,vessel safely afloat ready to be delivered at Karachi Port sent by Lloyd's Register Agents in Karachi evidencing delivery of S.S. "MARBELLA" Ex-"MITERA MARIA" Ex- "CONWAY" Ex-"ARMANISTAN" to Karachi Port as US $55 per LDT with working solid Bronze Propellers and one spare Propeller (Boss not made of steel) spare tailshaft and everything on Board with the exception of Captain Officers and crew personal effects."

48. ' Apparently some words were missing in sub-clause GGG of clause 16 of the Agreement dated 24- 10-1972 reproduced above. Sub-clause GGG, as inserted did not make sense. It required cable of Lloyd's Register Agent evidencing delivery of the vessel "to Karachi Port." It did not, however, name the person or party to whom the vessel was to be delivered. Exh. 6/18, a letter dated 4-11-1972 of defendant No.5 (Toyomenka), agents of the owners of the vessel, corrected the mistake in sub- clause GGG.

49. ' I have underlined the crucial words in the letter dated 4-11-1972, which letter was addressed to the plaintiff, and it is reproduced here:- ' RE: SALE OF VESSEL MARBELLA ' Please refer to the Memorandum of Agreement received from our Principals M/s. Metalexport, Beirut, confirming the sale of the above vessel to your goodselves. We have now recevied an authority by telex to amend clause 16 (GGG) as under instead of existing sub-clause:- ' CLAUSE 16(GGG)--Cable confirming that vessel safely afloat ready to be delivered at Karachi Port rent by Lloyd's Register Agents in Karachi and evidencing delivery of S.S. "MARBELLA" Ex.-"MITERA MARIA" Ex-"CONWAY" Ex-"ARMANISTAN" to the Buyers at Karachi Port at US $55 per LDT with working solid Bronze Propellers and one spare propeller (Boss not made of steel) spare tailshaft and everything on board with the exception of Captain Officers and crew personal effects.

50. ' Thanking you, we are, ' Yours faithfully."

51. ' Clause 16 (GGG) as amended, therefore, required a cable from Lloyd's Register Agents evidencing delivery of the vessel to the plaintiff before release of the amount under the letter of credit to the beneficiary i.e. defendant No.4.

52. ' Letter of credit was opened by the plaintiff through Muslim Commercial Bank Ltd. on 6-11-1972. In this letter of credit, apart from certain minor and inconsequential changes, as against sub-clause 16(GGG) of the contract, the following two clauses are to be found:- ' Original cable confirming that vessel safely afloat ready to be delivered at Karachi Port sent by Lloyd's Register Agents in Karachi.

8. Original Receipt from Muslim Commercial Bank Ltd. I. I.

53. Chundrigar Road, Karachi, confirming receipt of vessel by them at Karachi Port.

54. Bill of Exchange must be dated and negotiated not later than 28-2-1973. Transmitted through the National Bank of Kuwait, Kuwait, who are only authorized to negotiate your drafts."

55. ' I have underlined the first part of clause 8 of the letter of credit, as according to defendants Nos. 1 to 4, it is this part of clause 8 which was objectionable and by its insertion in the letter of credit, the plaintiff committed breach of contract and these defendants were absolved of their obligations under the contract. I may observe here that in para. 12 of their written statement, defendants Nos.1 to 4 have referred to several "discrepancies" in the letter of credit opened by the plaintiff and in his arguments also Mr. Mohsin Tayebally, Advocate referred to other clauses of the letter of credit, but from the evidence of D.W.1 Ibrahim Dabdub and D.W.2 Hagop (defendant No.3 and representative of defendants Nos.1, 2 and 4), it is obvious that dispute at the trial of this suit was in relation to clause 8 of the letter of credit and that also to the first part of the clause (underlined by me in the earlier part of this judgment where clauses 7 and 8 of the letter of credit have been reproduced).

56. D.W.1 Ibrahim Dabdub, Manager National Bank of Kuwait, Kuwait deposed in his examination-in- chief that the only amendment made in the letter of credit that was material was in clause 8. The main witness on behalf of defendants Nos.1 to 4 is Hagop (defendant No.3) and he deposed in his examination-in-chief that the first 7 terms mentioned in Exh. 6/20 (the letter of credit) were in accordance with the Agreement (Exh.6/11) but 8th term mentioned in the letter of credit was never discussed or agreed to. Then in his cross-examination conducted on 19-10-1976 he has stated as under:- "I see Exh. 6/20 which is the L.C. and say that clause 8 on page 2 of the document consists of only three lines, which are encircled in red and which is exhibited as Exh. 6/20/A. When I said in my examination-in-chief that clause 8 of the L.C. was not in accordance with our agreement I referred to clause 8 marked as Exh. 6/20/A."

57. ' The controversy about the letter of credit being in accord with the agreed terms, therefore, is confined to Exh. 6/20/A, which is that part of clause 8 of Exh. 6/20 (the letter of credit) which has been underlined by me earlier. This crucial challenged clause may be reproduced here again:- "8. Original receipt from Muslim Commercial Bank Ltd.

58. 1.1. Chundrigar Road, Karachi, confirming receipt of vessel by them at Karachi Port."

59. ' It had been vehemently argued by Mr. Mohsin Tayebally that the defendants Nos.1 to 4 had never agreed that delivery of vessel be given to the plaintiff before negotiation of documents by defendant No.4, beneficiary of the letter of credit. In fact it was argued that defendants Nos.1 to 4 could not possibly agree to such a condition. Clause 16 GGG of the agreement dated 24-10-1972 (Exh.6/11), however, contradicts this contention raised on behalf of defendants Nos.1 to 4. Clause 16 GGG of the agreement, as corrected by letter dated 4-11-1972 of defendant No.5 (Exh. 6/18), makes it clear that the vessel had first to be delivered to the buyers i.e. the plaintiff before the amount of the letter of credit could be released to defendant No.4. As for negotiating the draft, one of the documents to be produced by defendant No.4 was a cable of Lloyd's Register Agents evidencing delivery of the vessel to the plaintiff at Karachi Port. Then there was no uncertainty about this term of the contract between the parties. In the negotiations that had taken place prior to the execution of the contract this point had been cleared. In fact in the final firm Offer (Exh. 6/4) communicated to the plaintiff by defendant No.5, as agents of defendant No.1, which offer was accepted unconditionally by the plaintiff, it was stated that after the plaintiff took delivery of the vessel, the principals of defendant No.5 would draw payment against the letter of credit.

60. ' It has also been noted that a bank guarantee for an amount equivalent to 5% of the sale price had to be submitted by the plaintiff in favour of defendant No.5, which bank guarantee was to be released upon opening of in-order letter of credit by the plaintiff as is evident from Exh. 6/6, a letter dated 17-10-1972 of defendant No,5 addressed to the plaintiff. Required bank guarantee (Exh. 6/7) was furnished by the plaintiff. This bank guarantee was released after opening of the letter of credit by the plaintiff. This was done by defendant No.5 by their letter, dated 17-11-1972 (Exh. 6/27) in which they write to the plaintiff as follows:- "We are pleased to enclose herewith your Bank Guarantee No.TM 24/17 dated 18th October, 1972, duly discharged after opening of your L/C No.MR 24/2129-TM 24/244, dated 6th November, 1972."

61. ' If the letter of credit was not in order or did not conform to the terms of agreement between the parties, apparently the bank guarantee would not have been discharged.

62. ' Then no grievance is made by defendants Nos. 1 to 4 or even by defendant No.5 about the letter of credit not being in order. Letters, telexes and cables were being exchanged between the parties even after the opening of the letter of credit on 6-11-1972. Vessel arrived in Karachi Port in early January, 1973 but till 24-2-1973 no complaint was made by these defendants in any written communication about the letter of credit not being in order. For the first time reference is made about the letter of credit not being in order by defendant No.4 in his cable (Exh. 6/59) addressed to the plaintiff and there also specific mention is not made about clause 8 of the letter of credit. And previously, as mentioned earlier, defendant No.5 was informing the plaintiff from time to time that the vessel had arrived and was going to be delivered to the plaintiff shortly. If letter of credit was not in order and there was a material discrepancy therein, there was no occasion for informing the plaintiff that the vessel was going to be delivered to the plaintiff. If there was any material discrepancy in the letter of credit defendants would have certainly informed the plaintiff.

63. ' There is yet another very weighty reason for not accepting the contention of defendants Nos.1 to 4 that the letter of credit opened by the plaintiff was not in order and as such the plaintiff committed breach of contract and the defendants Nos.1 to 4 were absolved of their obligation under the contract dated 24-10-1972 to deliver the ship to the plaintiff. As observed earlier, objection had been raised about insertion of clause 8 in the letter of credit, as otherwise, according to the evidence of defendant No.3 (Exh.12) the letter of credit was in order and in accordance with the contract dated 24-10-1972. Now the original challenged clause 8 was once amended at the instance of the plaintiff but then a request was made by defendant No.4 to the plaintiff communicated through the National Bank of Kuwait that clause 8 be substituted by another clause and this was accepted by the plaintiff and letter of credit was accordingly amended. The substituted clause 8 read as follows:- "Cable advice by Muslim Bank to National Kuwait dated latest seven days after date of Lloyd's Register Agents cable called for per clause seven evidencing receipt of the vessel by openers."

64. ' Exh. 9/6 is the telex of the National Bank of Kuwait addressed to Muslim Commercial Bank Ltd., Karachi for amendment of clause 8 of the letter of credit. This was communicated to the plaintiff by letter dated 21-12-1972 of Muslim Commercial Bank Ltd. (Exh. 6/34). By their letter of the same date i.e. 21-12-1972, plaintiff, accepting the amendment, asked Muslim Commercial Bank Ltd., to confirm the same by cable (Exh. 6/35). Muslim Commercial Bank Ltd., made the amendment by cable dated 22-12-1972 and Exh. 6/36 is the letter of Muslim Commercial Bank Ltd., also dated 22-12-1972 confirming the cable. In his evidence, D.W.1 Ibrahim Dabdub, Manager National Bank of Kuwait (Exh.

65. 11), has stated that "several amendments were made in the letter of credit. Most of the amendments made in the letter of credit were formal but amendment to clause 8 was material and we did ask the Muslim Commercial Bank Ltd., Karachi for the same. The Muslim Commercial Bank confirmed the amendment by Exh. 6/34." He further stated that defendant No.4 was the owner of the vessel in question and defendants Nos.2 and 3 were the representatives of defendant No.4.

66. He then stated as follows:- "I cannot say when defendants Nos. 2 and 3 contacted us but it was after the receipt of the letter of credit. Both of them contacted us as representatives of defendant No.4. It was within a month of the receipt of letter of credit that defendants Nos.2 and 3 contacted us in their representative capacity. I do not remember whether the amendment suggested by me in clause 8 of Exh.6/20 was in the presence of defendants Nos.2 and 3. However, I did discuss this amendment with them, after we had suggested the amendment to defendant No.4. Defendant No.4 had authorized us to ask for the amendment suggested by us We had sent a copy of the letter of credit Exh. 6/20 to its beneficiary. The amendments sought by us in the letter of credit were authorized by the beneficiary. It was in accord with the banking practice. It is correct that by cable mentioned in Exh.6/39 we did ask for extension of the period of letter of credit till 31-1-1973."

67. ' D.W.2 Hagop, defendant No.3 and representative of defendants Nos.1,2 and 4, in his evidence (Exh.

68. 12) has stated that defendant No.4 had made the investment (in the vessel) and Metalexport (defendant No.1) had to carry out this transaction on his behalf and that defendant No.4 had nominated the National Bank of Kuwait as the negotiating bank on his behalf and this he had done in the capacity of the owner of the vessel. It was also stated by defendant No.3 that the entire amount of the letter credit was to be paid to defendant No.4. He also accepted that defendant No.1 firm was acting as the agent of defendant No.4."

69. ' The evidence points out that defendant No.4 had authorized the amendment in clause 8, which amounted to its substitution, and this was agreed by the plaintiff and letter of credit was amended accordingly. Substitution of clause 8 appears to be with the knowledge or approval of defendants Nos.2 and 3. It also follows from the evidence that defendant No.4 was the owner of the vessel and defendants No.2 and 3 were acting as the representatives of defendant No.4 in this transaction with the plaintiff. No request was made to the plaintiff to get, clause 8 deleted from the letter of credit.

70. ' As observed earlier, defendants Nos, 1 to 4 sought to go back upon the agreement only on account of insertion of clause 8 in the letter of credit, as, according to them, all other terms of the letter of credit were in accordance with the contract dated 24-10-1972. But then it has been found that clause 8, as finally substituted, was inserted in the letter of credit at the request of defendant No.4, the owner of the vessel and beneficiary of the letter of credit, and with the knowledge or approval of defendants Nos.2 and 3. Contract dated 24-10-1973 for C the sale of the vessel in question could not, therefore, be avoided by defendants Nos.1 to 4 on the ground that the letter of credit was not in order.

71. ' The evidence further clearly establishes that the plaintiff was all along ready and willing to perform his obligations under the agreement dated 24-10-1972 but the defendants Nos. 1 to 4 wrongly backed out of the contract. The judgments cited by Mr. Mohsin Tayebally on letters D of credit are not of any assistance to the defendants. Issues Nos.3, 4 and 5 are accordingly decided in favour of the plaintiff. Issue No.3 is decided in the affirmative. Issue No.4 is also decided in the affirmative. The question of extent of compensation to which the plaintiff is entitled, is considered and decided under issue No.7. Issue No.5 is decided in the negative. According to me, defendants Nos. 1 to 4 committed breach E of contract and not the plaintiff.

9. Issue No.6 is whether the suit is not maintainable as alleged in the written statement of defendants Nos.1 to 4. In the earlier part of this judgment, paragraphs 15 of the plaint has been reproduced. According to paragraph 15 of the plaint, monetary compensation in the present case would not be sufficient or adequate relief, as the ships suitable for demolition are not available and the plaintiff had already entered into agreements with several parties for sale of scrap and that in case relief by way of specific performance was not granted, the plaintiff would be totally ruined. In paragraph 13 of the written statement of defendants Nos. 1 to 4, on the other hand it has been pleaded that specific performance of a contract for the sale of ship in question cannot be granted in view of the provisions contained in the Sale of Goods Act and Specific Relief Act. Further in paragraph 14(a) it has been averred by the defendants Nos. 1 to 4 that the plaintiffs have abandoned their claim for specific performance of the agreement dated 24-10-1972 and the suit has, therefore, become infructuous.

72. ' On the issue, the first question to be considered and decided is whether specific performance of a contract for the sale of a demolition vessel required for scrapping can be granted. Mr.A.K.Brohi, Advocate, who had argued the case on behalf of the plaintiff, had referred to paragraph 6 of the order dated 24-10-1972 of Mr.Justice A.H.Kureshi (as he then was). However, that was an order on an interim application and the learned Judge had himself made it clear that the view that he had taken that specific performance of a contract for the sale of a ship can be granted, was a tentative view. Learned counsel for the plaintiff also referred to section 58 of the Sale of Goods Act, which corresponds to section 52 of the English Sale of Goods Act of 1893, section 12(2) and section 19 of the Specific Relief Act. Learned counsel also referred to the evidence of P.W.1 Ghulam Hussain, managing partner of the plaintiff firm, where he deposed that he had attempted to purchase another ship from the market but no suitable ship was available and then for purchase of another ship the plaintiff would have again been required to follow the cumbersome and time-consuming procedure for the purchase of ship which required obtaining various sanctions from the Government departments for the import of ship and arrangements for foreign exchange. Learned counsel also relied upon evidence of D.W. Abdullah, manager of defendant No.5, who stated in his cross-examination that the ship of the kind in question were rarely available in the market.

73. Reliance was also placed on the evidence of P.W. Hanif a ship broker. It was submitted by Mr. A.K.

74. Brohi that although a ship is a chattel, it is a specific type of chattel in respect of a contract for the sale whereof, specific performance can be granted as:-

(a) such ships were not readily available in the market;

(b) the ships was required for immediate use and even if a similar ship was available it would have taken a very long time to get delivery of the said ship as a cumbersome and time-consuming procedure had to be adopted for the purchase and import of such a ship; and

(c) there is a limited market of sale and purchase of such ships and the character of such market is of such a nature that such ships are rarely available.

75. ' According to Mr.A.K.Brohi, in view of the limited and special character of the market for ships, it was not possible for a purchaser to just go in the market and buy a ship.

76. ' In view of the aforesaid reasons, it was argued that although the ship was a chattel, specific performance for the sale of a ship can be granted under the relevant provisions of the law. Learned counsel for the plaintiff also relied upon the following reported judgments in support of his contention that specific performance of the contract dated 24-10-1972 can be granted:-

(i) Behnke v. Bede Shipping Company Limited. 1927 1 KB 649.

77. ' In this case the plaintiff, a German ship-owner, filed a suit against the British Shipping Company for specific performance of a contract for the purchase of a ship and in the alternative for damages. Apart from denying the contract, the defendants in the alternative took up the plea that such contract was specifically enforceable by reasons of section 4 of the English Sale of Goods Act, 1893 and that in any event it was not a case in which specific performance ought to be decreed.

78. On evidence it was found that the ship was of peculiar and practically unique value to the plaintiff, as it was a cheap vessel being, old, but her engines and boilers were practically new and such as to satisfy the German regulations, and as such, the plaintiff, as a German ship-owner, could have got registered the ship immediately under the German regulations. It was further observed that a very experienced ship-valuer had said that he knew only one other comparable ship but that might also have been sold. Then according to the evidence, the plaintiff wanted the ship for immediate use, and on such facts and circumstances, Wright J. took the view that damages would not be an adequate compensation and that the plaintiff was entitled to the ship and a decree of specific performance in order that justice be done.

79. ' No doubt in this English case it was held that damages would not be an adequate compensation and a decree for specific performance was granted but the facts are clearly distinguishable from the instant case. In the English case, as noticed, the ship was required by the plaintiff for sailing and its engines and boilers were in good condition and in view of its good condition, the plaintiff could have got the ship registered under the German Regulations immediately and started operations and on evidence it was also established that a comparable ship was not available anywhere in the market, and the ship was immediately required. In these facts the English Court took the view that specific performance of the contract for the sale of such ship could be granted. In the instant case, the ship was admittedly required by the plaintiff for the purposes of scrapping. In fact the documents referred to the ship as a "demolition ship". The facts of the English case and the present suit are clearly distinguishable. Ships in the two cases were of different types and the most important distinguishing feature of the two cases is the purpose for which the ship was required. In the English case, compensation apparently would not have provided adequate compensation.

(ii) James Jones & Sons Ltd. v. Earl of Tankerville (1909) II Ch. 440.

80. ' In this case the plaintiffs had entered into a contract with the defendant for the purchase of certain timber growing on defendant's property and according to the contract the plaintiffs had the right to enter upon the defendant's property, cut the timber and saw it up thereon, to erect sawmills, and to remove the timber. The plaintiffs erected a sawmill and commenced to cut timber, saw it up and remove it. The defendant subsequently repudiated the contract and forcibly ousted the plaintiffs from the property. The plaintiffs filed the suit against the defendant seeking injunction restraining the defendant from preventing a due execution of the contract, and for damages. It was contended on behalf of the defendant that the claim for an injunction was equivalent to a claim for specific performance and that the Court would not grant specific performance on such a contract but would leave the plaintiffs to their remedy by way of damages. It was held by Parker J. that although the Court might be unable to compel the plaintiffs to cut the timber if they refused to do so, it had jurisdiction to give them relief by way of specific performance and that the injunction ought to be granted. In the judgment reference was also made to section 5 of the English Sale of Goods Act, 1893 and according to Parker J. this provision seems to confer on the Court a statutory power of enforcing, at the instance of a purchaser, specific performance of a contract for the sale of ascertained goods, whether or not the property has passed by the contract.

(iii) Bank of India Ltd. v. J.A.H.Chinoy AIR 1950 P C 90 ' In this judgment there is an observation that having regard to the nature of the concerned company and the limited market of its shares, damages would not have been an adequate remedy.

(iv) Jainarain v. Surajmull AIR 1949 FC 211 ' This case also related to specific performance of a contract for the sale of shares. It was observed by the Federal Court of India in their judgment in this case that specific performance is undoubtedly a discretionary remedy but when shares of a company are limited in number and are not ordinarily available in the market, it is quite proper to grant a decree for specific performance of a contract for the sale of such shares.

81. ' On the other hand, it was contended by Mr. Mohsin Tayebally, learned counsel for defendants Nos.

82. 1 to 4, that the vessel in question was a demolition vessel and was admittedly required by the plaintiff for the purposes of scrapping and as such even if the plaintiff makes out a case for breach of contract on the part of the defendants, specific performance of the contract cannot be granted and at the most a claim for damages can be maintained. Learned counsel referred to two decisions of this Court. The first decision is in the case of Muhammad Azam Muhammad Fazil & Co. v. N.A. Industries PLD 1977 Kar. 21 of Mr. Justice Zaffar Hussain Mirza. In this matter there were two suits which were disposed of by the learned Judge by his reported judgment. One suit was an application under section 20 of the Arbitration Act made by Muhammad Azam Muhammad Fazil & Co. against N.A. Industries seeking to have the arbitration agreement between the parties filed in Court and for reference of the disputes between the parties to the arbitrators appointed in accordance therewith. The other case was an application under sections 31 and 33 of the Arbitration Act filed by N.A. Industries for a declaration that no valid arbitration agreement existed between the parties in relation to their vessel, which was subject matter of the two proceedings.

83. The learned Judge allowed the application under section 20 of the Arbitration Act and rejected the application under sections 31 and 33 of the Arbitration Act filed by the seller namely, N.A. Industries.

84. In the suit under section 20 of the Arbitration Act, the purchaser had also filed an application, seeking a temporary injunction for restraining the seller from selling or transferring the vessel in question to any other party. The injunction was not granted by the learned Judge holding that the contract for the sale of the ship which was required for scrapping purposes was not capable of specific performance. Paragraphs 18, 19 and 20 of the judgment of Mr.Justice Zaffar Hussain Mirza are relevant for the controversy here and these are reproduced hereunder:- "18. I will now consider the request for temporary injunction wherein the buyers seek an order to restrain the sellers from selling or transferring the motor vessel "MARIE ANN" and from grounding, scrapping or removing any articles from it. Various objections were raised by the learned counsel for the sellers against the prayer for injunction but to mind the important question for consideration in this regard is whether the interlocutory relief sought would be ancillary to the main relief eventually to be obtained by the award. Learned counsel for the buyers strenuously contended that the buyers are prima facie entitled, upon the documentary evidence to the delivery of "MARIE ANN". To this the submission on behalf of the sellers was that the contract between the parties as embodied in the agreement was in substance for the sale of goods which cannot be specifically. enforced. Additionally, he submitted that since the alleged breach of the contract in question can adequately be compensated in money, the specific performance of the contract is barred under section 21 (a) of the Specific Relief Act. I find great force in these submissions.

19. The agreement between the parties clearly specifies that the subject vessel was being purchased for scrap purposes and was to be acquired by the sellers at the "prevailing market rate".

85. There is no doubt and in fact the contract expressly provides for delivery of the scrap material obtained upon breaking the ship. Indeed the payment of the price was directly related to the scrap material yielded by the ship. The contract also expressly provides the formula for the determination of the sale price. It is not the case of the buyers that the scrap secured from the ship is not available in the market or for that matter that ships for scraping are not available. Documents Annexures 'N', 'II', 'JJ', 'KK' and 'LL' which are market reports issued by Tramanship International Ltd. of Pakistan clearly establish that vessels for demolition purposes are available in the International Market at competitive prices. There is thus no doubt that the buyers loss is ascertainable and capable of compensation in monetary terms. Indeed the buyers' own document Annexure 'E' which purports to be a notice served upon them in connection with an advance contract for the sale of scrap to a third party, quite clearly establishes that damages arising out of the contract were assessable in terms of money.

20. 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 provision of Chapter II of the Specific Relief Act which contains section 21 referred above. I 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 21 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 II Schedule shows that while dealing with the powers of the Court separately it provides in clause I for preservation, interim 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 complainant of the receiver. The applications made for the interim relief have been expressly made for an injunction to restrain specified acts by the defendants. I do not think therefore, that the present is a case falling within the purview of clause (1) of the II 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."

86. ' The ratio of the judgment reported in PLD 1977 Kar. 21 apparently supports the contention of the learned counsel for the defendants No.1 to 4 that specific performance of a contract for the sale of a ship required for scraping purposes cannot be granted.

87. ' The other case relied upon by Mr. Mohsin Tayebally is Al-Farooq Shipping Co. Ltd. v. Vasa Shipping Co. Ltd. 1980 CLC 1228. It is an order passed by Ajmal Mian, J. of this Court on an interim application in a suit for specific performance of a contract for the sale of a vessel filed by the plaintiff/purchaser. It was observed by the learned Judge that in the case it could not be urged that the plaintiffs cannot be compensated in terms of money, as the plaintiffs had entered into the agreement in question for the purchase of a vessel for scraping it and they had neither declared nor pointed out any peculiarity or uniquences in the vessel. The learned Judge referred to PLD 1977 Kar.

88. 21.

10. In the present case, the vessel was admittedly purchased by the plaintiff for demolition so that scrap recovered through demolition of the vessel could be sold to third parties or used by the plaintiff in their re-rolling mills. In fact in their pleadings as well as in their evidence, plaintiff averred that they had entered into contracts with third parties for sale of the scrap to be recovered by demolition of the said vessel. The vessel was not being purchased by the plaintiff for plying as a cargo or passenger vessel. It may be repeated that it was being purchased for scrap purposes. In their pleadings as well as in their evidence they have stated that although demolition ships were not easily available in the international market, the rate of such demolition ships at the time breach of contract had taken place was US $92 L.D.T. Evidence also does not indicate any special or peculiar nature of the vessel in question. The evidence also does not indicate that there were no alternative sources for obtaining scrap from the local or international market for purpose of use in the plaintiffs mills or for fulfilling the agreements the plaintiff might have entered into with third parties for sale of scrap. In these circumstances I have found it difficult to accept the contention of the learned counsel for the plaintiff that the contract in question was capable of being specifically enforced. On the other hand the case of the plaintiff through their pleadings and evidence points out that in the present case damages would have adequately compensated the plaintiff for the breach of contract on the part of defendants No.1 to 4. Section 21 (a) of the Specific Relief Act, 1877 in very clear terms lays down that a contract for the non-perfor mance of which compensation in money is an adequate relief cannot be specifically enforced. Reliance had been placed by the learned counsel for the plaintiff on section 58 of the Sale of Goods Act, 1930 (correspond ing to section 52 of the English Sale of Goods Act of 1893). However, as pointed out by Mr. Justice Zaffar Hussain Mirza in PLD 1977 Kar. 21, section 58 of the Sale of Goods Act is subject to the provisions of Chapter II of the Specific Relief Act and Chapter II of Specific Relief Act contains section 21(a), which, observed earlier, provides that a contract for the non-performance of which compensation in money is an adequate relief cannot be specifically enforced. In my view, therefore, the plaintiff cannot get any benefit from section 58 of the Sale of Goods Act, unless it was established that in the present case compensation could not be an adequate relief. However, it has not been established by the plaintiff that for the breach of contract dated 24-10-1972 by defendants Nos. 1 to 4, the plaintiff could not be adequately compensated in money. As a matter of act the pleadings of the plaintiff and the evidence on record more then clearly indicates that for the breach of the contract dated 24-10-1972 plaintiff could have been adequately compensated in money.

89. ' The English case reported in (1927)

1. K.B. 649 and relied upon by the learned counsel for the plaintiff is clearly distinguishable as pointed out at pages 43-44 of this judgment. In the English case, the ship was required for sailing purposes and although the ship was old, its engines and boiler were in good condition and the purchaser, a German Reglations and immediately started playing the ship, and that a comparable ship was not available anywhere in the market and the ship was immediately required. In those circumstances, on the facts of that case, Specific performance was ordered. However, in the present case the ship was required by the plaintiff for demolition so that from the recovered scrap he could fulfil their agreements with third parties for sale of scrap and/or use the scrap in their re-rolling mills. The case in (1927) 1 K.B. 649 does not help the plaintiff. Then the facts and circumstances of the other three cases cited by the learned counsel for the plaintiff are also distinguishable. The facts in those three decisions made out a case for specific performance of the contracts as compensation in money would not have properly and adequately compensated the claimants in those cases.

90. ' The other arguments of the learned counsel for the plaintiff on this issue that such ships were not readily available in the market, that the ship in question was required for immediate use and that there was a limited market for sale in purchase of such ships also do not take the case of the plaintiff very far as regards specific performance of the contract dated 24-10-1972. As observed earlier, this is not a case where a ship is required to be operated as a passenger or cargo vessel, where different considerations may be applicable. It may again be repeated that the vessel in question was required and was being purchased by the plaintiff for demolition and then apparently to sell the scrap to third parties or to use it in their own re-rolling mills. It has already been pointed out that the evidence does not establish that there were no alternative sources of supply of scrap. No special or peculiar condition or nature of the vessel was pointed out or evidence in that context brought on record. In these circumstances, I am of the view that the contract in question is not capable of being specifically enforced. However, foundation has been laid in the plaint filed in the suit for damages as is apparent from para. 15 of the plaint where damages to the extent of Rs.20,36,628 have been claimed on account of breach of contract and the basis of these damages has been given in para. 15 of the plaint as a difference between the contractual rate and the prevailing world market rate of US $92 per L.D.T. I have already held that the defendants Nos. 1 to 4, and not the plaintiff, committed breach of contract, I am, therefore, of the view that although the contract dated 24-10-1972 cannot be specifically enforced, on account H of breach of contract on the part of defendants Nos. 1 to 4, the plaintiff is entitled to damages.

91. Issue No.6 is decided accordingly.

11. Issue No.6-A is whether the suit is not maintainable against the defendant No.6 as alleged in para. 1 of the written statement filed by the defendant No.6. The suit was not pressed against the defendant No.6 and as such this issue has become redundant.

12. Issue No.5A is whether the plaintiff had agreed to increase the amount of letter of credit by 1 per cent. The burden of this issue is on defendants Nos. 1 to 4. They have not established through evidence that the plaintiff had agreed to increase price of the ship by 10 per cent and as a consequence increased the amount of letter of credit also by 10 per cent. Nothing concrete came out during the cross-examination P.W.1 Ghulam Hussain (Exh. 8), Managing Partner of the plaintiff firm in favour of defendants Nos. 1 to 4 on this issue. The main witness of defendants Nos. 1 to 4 was D.W.2 Hagop (Exh. 12). He is defendant No.3 and also representative of defendants Nos. 1,2 and 4. In his evidence he stated that he came to Karachi on 19-1-1973 to see the plaintiff and from that date onwards practically every day he saw Ghulam Hussain, Managing Partner of the plaintiff. He left Karachi on 13-2-1973. According to his evidence, Ghulam Hussain had agreed to increase the price by 10 per cent. If this had been so, defendants Nos. 1 to 4 would have immediately after 13-2-1972 addressed some communication to the plaintiff. The trouble had started by cable, dated 24-2-1973 (Exh. 6/59) of defendant No.4 addressed to the plaintiff, whereby he informed the plaintiff that as the L/C had not been opened according to the agreement dated 24-10-1972, the sellers were no longer bound by the agreement dated 24-10-1972. No reference is made about the agreement relating to increase of price. No doubt there is reference to increase of the amount in Exh. 6/60, which is a cable dated 24-2-1973 of defendant No.5 addressed to the plaintiff but in the said cable reference about 10 per cent increase is not mentioned. Then from the evidence on record it is apparent that on account of devaluation of US doller and other reasons the price of such ships had increased consider ably and as the ship had not yet been delivered to the plaintiff, the defendants Nos. 1 to 4 tried to back out of agreement dated 24-10-1972 by wrongly claiming that the letter of credit was not in order letter of credit. If the plaintiff had agreed to increase the price by 10 per cent, in the meeting that Hagop and representative of defendant No.5, some writing would have been obtained by defendants Nos. 1 to 4 or there would have been an amendment of the agreement in writing.. From the evidence on record, defendants Nos. 1 to 4 have not been able to establish that the plaintiff had agreed to increase the price of the ship by 10 per cent. The evidence indicates that on account of devaluation of US dollar during the first half of February, 1973, the prices in the International Market of such ships had increased and Hagop had come to Karachi in 'order to get some increase in the price but was not able to persuade the plaintiff for such increase. Issue No.5A is accordingly decided in the negative.

13. Issue No.7, the last issue is about the relief to which the plaintiff is entitled in the present suit.

92. While deciding issue No.6, I have already held that the plaintiff was not entitled to specific performance of the agreement dated 24-10-1972 but was entitled to damages on account of breach of contract by defendants Nos. 1 to 4. Mr. Mohsin Tayebally, learned counsel for the defendants Nos. 1 to 4, had argued that the basis for computation of damages, to which the plaintiff can be entitled, would be the differnece between the contract price which was US $55 per LDT and the market price on the date of breach of contract. It was argued that the market price on the date of breach was not proved and the plaintiff was not entitled to any damages. In the alternative it was argued that the maximum damages that can be granted to the plaintiff cannot exceed the amount claimed in para. 15 of the plaint. As mentioned earlier, in para. 15 of the plaint it was mentioned that the prevailing market rate was US $92 per LDT and as such the compensation would come to Rs.20,36,628 being the difference between the contract rate and the prevailing market rate. On the other hand, Mr.S.M.Sadik learned counsel for the plaintiff, relied upon section 19 of the Specific Relief Act, 1877, which refers to awarding of compensation to be assessed in such a manner as the Court may direct. According to Mr. S.M.Sadiq, if a suit is filed for specific performance of a contract and the Court does not decree the suit for specific performance but, on account of the breach of contract on the part of the defendant, decides to grant compensation/damages, the basis of awarding such damages is different from the normal basis, which is provided in section 73 of the Contract Act. According to the learned counsel for the plaintiff, in the present case the proper compensation to be awarded to the plaintiff would be the difference between the offer of Rs.65,05,299 made by the plaintiff for the purchase of the ship and the contract price. According to the learned counsel, this basis would be a just and equitable basis for calculation of compensation under section 19 of the Specific Relief Act.

93. 'A perusal of section 19 of the Specific Relief Act no doubt indicates that a Court while awarding compensation under section 19 is not restricted to award the compensation on the basis provided in section 73 of the Contract Act. Normally, where there is a breach of contract and damages are to be awarded, principle contained in section 73 of the Contract Act is resorted to and that is the difference between J the market price on the date of breach and the contract price. But under section 19 of the Specific Relief Act if a person is suing for specific performance of a contract, if the Court comes to the conclusion that though the contract was such as was capable of being specifically enforced under the law but the Court was not inclined to grant specific performance, it could award compensation and such compensation is to be assessed in such a manner as the Court may direct. While awarding such compensation under section 19 of the Specific Relief Act, the C Court is not restricted by the principle laid down in section 73 of the Contract Act for awarding damages.

94. ' As I have already held that contract dated 24-10-1972 is not a contract which can be specifically enforced through a decree of the Court, damages, to which the plaintiff is entitled, will have to be A determined under section 73 of the Contract Act and not under section 19 of the Specific Relief Act.

95. ' In the evidence of Ghulam Hussain, Managing Partner of the plaintiff, it is mentioned that the offer that he had made for the ship was more than the market price. In para. 15 of the plaint, as observed earlier, according to the plaintiff, the market rate on the date of breach of the contract was US $92. per LDT. The evidence of Ghulam Hussain also is to the effect that at the time of breach the market price was about US $92 LDT. One broker, namely P.W.2 Muhammad Hanif, had also been examined by the plaintiff. His evidence is also to the effect that during February/March, 1973, price of comparable ship was about US $92 per LDT. On the other hand, in the evidence of Hagop it is deposed that during February, 1973, there was a slight increase in the price of demolition ships in the market on account of devaluation of US doller and vessels of identical description and specifications were also available. He produced certain journals and weekly market reports as Exh.

96. 12/8 to 12/14. There is no specific evidence on behalf of the defendants Nos. 1 to 4 as to the market price of the comparable ship during February, 1973. It may be observed that although according to the contract dated 24-10-1972, the ship was to be delivered by the end of December, 1972, or early January, 1973, L/C had been extended till the end of February, 1973, and the breach of contract took place on 24-2-1973, when defendant No.9 informed that the sellers were no longer bound by the agreement dated 24-10-1972. It is therefore, the market price of February, 1973, which is relevant for the purposes of assessm ent of damages. Production of certain journals by Hagop does riot establish the market rate of comparable ships during February, 1973. It is obvious that the price of comparable ships had increased with effect from February, 1973, inter alia, on account of devaluation of US doller. I am inclined to accept the evidence tendered on behalf of the plaintiff that at the time of breach of contract i.e. February, 1973, the market rate of comparable ships was on the basis of US $92 per LDT and as such the damages to which the plaintiff is entitled comes to Rs.20,36,628. Learned counsel for the defendants Nos.1 to 4 is right in making the submission that the plaintiff cannot claim more than this amount as damages. Firstly, para. 15 of the plaint clearly states that the damages would amount to Rs.20,36,628. Secondly, the evidence on record does not establish that the market rate was more than US $92 per LDT. And then no request was made to amend the plaint for increasing the amount mentioned in para.15 of the plaint. In fact it was never the case of the plaintiff that the market price of comparable ships during February, 1973, was more than US $92 per LDT.

14. As a result, suit No.92/73 is decreed in favour of the plaintiff and against defendants Nos.1 to 4 in the sum of Rs.20,36,628 with costs. The plaintiff had already withdrawn an amount of Rs.34,77,899 from this Court on furnishing a bank guarantee for Rs.35 lacs pursuant to order dated 10-4-1974 passed in this suit. The plaintiff, therefore, had withdrawn Rs.14,41,271 in excess of the decree that has been passed in their favour. The excess amount belongs to defendants Nos. 1 to 4. On this excess amount, plaintiff is further liable to pay interest at the rate of 71 per cent to the defendants Nos.1 to 4 from the date the amount of Rs.34,77,899 was withdrawn by the plaintiff, in view of the undertaking given on behalf of the plaintiff before the Supreme Court of Pakistan on 17-5-1974 in Civil Petition for Special Leave to Appeal No.K-65/1974 filed by defendants Nos. 1 to 4 against the order dated 10-4-1974 passed in this suit. The plaintiff is directed to deposit the excess amount of Rs.14,41,271 with interest at the rate of 71 per cent, with effect from the said date, after adjustment of costs of this suit, within one month of the preparation of the decree. The office is directed to prepare the decree in this suit within 15 days hereof. On deposit of such excess amount with interest, after adjustment of costs, the bank guarantee furnished by the plaintiff shall stand discharged. Such excess amount deposited by the plaintiff shall belong to defendants Nos.1 to 4 who will be entitled to withdraw the same from the Court. In case such excess amount is not deposited within the prescribed time by the plaintiff, defendants Nos.1 to 4 will be free to file an application for requiring Muslim Commercial Bank Limited, who had furnished their guarantee on behalf of the plaintiff, to deposit such amount in Court.

97. Some interest had accrued on the amount of Rs.34,77,899 deposited by the plaintiff till such time the amount was withdrawn. With the consent of Mr.Mohsin Tayebally it is ordered that such interest will belong to the plaintiff, who can withdraw the same.

98. Suit as against defendants Nos. 5 and 6 is dismissed with no order as to costs.