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Afshar M.M. Tacki Vs. Dharamsey Tricamdas - Court Judgment

LegalCrystal Citation
Decided On
Case Number O.C.J. Suit No. 1042 of 1944
Reported in(1946)48BOMLR661
AppellantAfshar M.M. Tacki
RespondentDharamsey Tricamdas
contract, frustration of - written instrument, construction of-surrounding circumstances-indian evidence act (1 of 1872), section 92-construction of contract.;the defendant contracted on march 7, 1044, to purchase bales of grey cotton yarn in bombay for the plaintiff, to transport them to jaffarabad, to put them on a country craft there on their way to khoramshare, a port in the persian gulf, and to see that the craft crossed the territorial waters of jaffarabad. it was agreed between the parties that the plaintiff was to pay to the defendant the cost of the bales and transport charges on presentation of invoices; and the defendant was to receive remuneration at the rate of rs. 25 per bale and commission at the rate of five per cent, on the total cost involved. the defendant further.....blagden, j.1. this is a suit to recover rs, 3,00,000 pursuant to an agreement in writing dated march 7, 1944, or alternatively as money paid for a consideration which has wholly failed. the defendant admits the making of the agreement and payment to him by the plaintiff of the sum sought to be recovered. he contends (inter alia) that the consideration has not failed wholly, that on the true construction of the agreement the money is not repayable, and that the agreement has been terminated by frustration.2. the contract out of which the suit arises is admittedly contained in two letters exchanged in bombay on march 7, 1944. that addressed by the defendant to the plaintiff reads as follows:i agree to purchase for you and on your behalf 300 bales grey cotton yarn merchantable quality each.....

Blagden, J.

1. This is a suit to recover Rs, 3,00,000 pursuant to an agreement in writing dated March 7, 1944, or alternatively as money paid for a consideration which has wholly failed. The defendant admits the making of the agreement and payment to him by the plaintiff of the sum sought to be recovered. He contends (inter alia) that the consideration has not failed wholly, that on the true construction of the agreement the money is not repayable, and that the agreement has been terminated by frustration.

2. The contract out of which the suit arises is admittedly contained in two letters exchanged in Bombay on March 7, 1944. That addressed by the defendant to the plaintiff reads as follows:

I agree to purchase for you and on your behalf 300 bales Grey cotton yarn merchantable quality each bale weighing 400 lbs. of which 100 bales shall be of 20 x 2S and 200 bales of 42 x 2S counts and to ship the same from Jattarabad to Khoramshare.

You will provide to me the cost of purchase and all other expenses incidental to conveying the goods from Bombay to Jaffarabad such as carting, railway freight, storage and other charges, which shall be paid to me on presentation of the invoice.

On my loading the goods on a country craft and handing over to you the shipping documents, I will be entitled to receive from you Rs. 25 per bale and 5% commission on the total cost involved.

In case I am unable to effect shipment of the goods or if the country craft, for any reason, fails to cross the territorial waters of Jaffarabad, I will repay to you the cost paid as per my invoice and all other expenses incurred in taking the goods to Jaffarabad and I will lose my right to claim from you as remuneration Rs. 25 per bale and 5% commission and will refund to you the same if paid.

Apart, of course, from transposition of the parties, that addressed by the plaintiff to the defendant differs materially from its twin brother only in that it contains the words 'from Jaffarabad' after the words 'shipment of the goods', thereby making abundantly clear that which is common ground, namely, that the shipment contemplated was shipment from Jaffarabad and nowhere else, in the last paragraph. Jaffarabad is in Janjira State, Kathiawar, and Khoramshare is a Persian Gulf port.

3. The surrounding circumstances which must have been present to the minds of the parties and which I am entitled and bound to take into consideration in construing this contract are matters of common knowledge. A world war was in progress, with far-reaching effects on commercial and other life even, in Western India. Among its minor horrors in that and other areas was an abundance of that which is popularly called 'red tape', although in fact bureaucrats ordinarily use white tape, presumably to disarm criticism. Almost every activity of the citizen was subject to a greater or less degree of interference, direct or indirect, by officials, including a control of prices. While, therefore, the war had produced in India a serious shortage of yarns and textiles, great profits were to be made by exporting these and other articles to the Persian Gulf. This traffic the Governments of British India and/or Bombay were desirous of stopping, and to have exported such goods from a British Indian port would have been difficult, if not impossible. It was unquestionably the object of the parties to evade the ban on export of the goods in question, and while they no doubt hoped and expected that their venture would be less likely to be interfered with in an Indian State) than in British India, Mr. Banaji, for the defendant, with his wonted frankness, admits that they did not imagine that the rule of 'red tape' ceased absolutely at the frontiers of the latter, nor conceivably could they have done so.

4. The multitudinous regulations which have to be promulgated to ensure the efficient prosecution of a modern war are, undoubtedly, a great nuisance. No one could possibly carry them all in his head and the most law-abiding and patriotic citizen may constantly break them by inadvertence. Often they bear the marks of incompetent draftsmanship and one wonders in some particular cases whether they are really conducive to their very desirable end. None the less, their deliberate evasion stands on a very different footing from the perfectly legitimate pastime of finding and exploiting loopholes in normal, peacetime, legislation. To indulge in that practice is the perfect right of a free citizen, and, even if it served no other useful purpose, provides interesting and lucrative work for the legal profession.

5. The evasion of regulations made in the time of war with a view to the ultimate deliverance of one's country from that curse, and that for the sake of a commercial profit made while one's fellow citizens are fighting and dying on the field of battle, seems to me, to say the least of it, less commendable. Their. common object having been what it was, I have not, myself, the slightest sympathy, in the events which have happened, for either of the parties.

6. Another circumstance which must have been present to their minds had nothing to do with the war, though it was equally notorious. The monsoon might be expected to break in Bombay about the third week of June and in Kathiawar very little later. 'Country craft' in which it was proposed to effect shipment, are somewhat primitive lateen-rigged sailing vessels, capable of long and surprisingly fast passages in fair weather, but very illfound for surviving a monsoon gale, a fact patently obvious to anyone with any knowledge of seamanship who has ever inspected one of these ships. No master of a country craft in his senses would set out on a voyage to the; Persian Gulf at a time when he could not be reasonably certain of getting well clear of the monsoon area before the monsoon broke: he would take his departure (if he was going to do so at all) by about May 31 at the latest. Both parties are, I gather, experienced Bombay business men, and this fact must have been as perfectly well known to them both as to anyone else of any intelligence in this port.

7. Mr. Banaji for the defendant wished to adduce oral evidence under the guise of 'surrounding circumstances' to show that what the parties really meant by the expression 'in case I am unable to effect shipment of the goods' was 'in case my licence or licences to export the goods should prove ineffectual'. But I felt bound to exclude any such evidence: to have allowed it in a suit, other than a suit for rectification, would, I think, involve a plain violation of Section 92 of the Indian Evidence Act. The rule as to 'surrounding circumstances' cannot be extended to enable a party to prove that when he wrote one thing he meant, and was understood to mean, something totally different.

8. Between March 7 and 28 the plaintiff paid defendant three sums on account of one lakh each, and on or about the 28th the defendant presented, an invoice antedated to the 8th for 303 bales of yarn of counts not identical to those specified in the written contract, the total price being Rs. 3,37,768-12-0. The parties had admittedly agreed to vary the original contract as to counts, and it is unnecessary to go into this in detail or to discuss the matter of the odd three bales.

9. The plaintiff never paid the balance of Rs. 37,768-12-0 or any part thereof. He is not, therefore, asking for it back; nor is the defendant counter claiming for it. Whether the defendant even asked for it is in dispute, but the question appears to me quite academic in the events which have happened.

10. During and, I think, after March the defendant, who had entered into contracts similar to that in suit with numerous merchants other than the plaintiff, bought from time to time at Bombay in his own name very large quantities of yarn of which the 303 bales invoiced to the plaintiff formed a part. The bales which the defendant is pleased to call 'the plaintiff's bales' have never been placed separately from the resit, or marked with the plaintiff's name, or in any other way physically appropriated to the plaintiff. The making out of the invoice already referred to did not serve that purpose, because in every case in which he charged for various numbers of bales of a given description, the defendant had in fact on hand more than that number of bales of that description: so that from first to last there never was a moment when anyone other than the defendant could have gone to the bales and picked out any specific 303 bales as the property of the plaintiff. It is true that the defendant might have done so, but there would be nothing to prevent his picking out a different 303 bales, corresponding to the bales in the invoice, five minutes later. The defendant has contended, as long as he could, that there was an appropriation to the plaintiff, but a timely summons for particulars eventually pinned him down to what was really an admission that this was not so at all. He also says that the plaintiff was aware of and consented to the course of dealing I have briefly described, but the same affidavit of particulars now discloses that what he really relies on is the con-sent and knowledge of one Nikupur. Whether the latter had any authority from the plaintiff to give his consent is in dispute. The defendant, through his counsel, expressed his willingness to discharge the onus of proving that he had. It appeared to me, however, and still does, that this question, also, is now academic. I propose to discuss the legal effect of the foregoing after stating the remaining facts,

11. At some time-I am not sure when, nor does it matter-the defendant got hold of three licences signed by the Dewan of Janjira State in favour, respectively, of two individuals other than himself and of a Bombay firm, one of which permitted the export from Janjira to Khoramshare of 1,000 bales of cotton yarn. This was, however, valid only up to May 9.

12. In order to ship the goods at Janjira the goods had to be got to Janjira, and the defendant in fact set about doing this. The route he chose was by rail into the State of Cambay and thence by ship to Janjira. The plaintiff took no steps to obtain any necessary licence for the purpose of getting the goods to Janjira, holding, as he still maintains, that it was for the defendant to do so.

13. Apparently, all the goods in question were still in Cambay on June 14, 1944, on which date the Janjira export licence relied on by the defendant had long expired. Apart from that, it was then probably too late, in view of the approaching monsoon, to consign the goods by country craft even to Jaffarabad, and certainly too late to expect such a vessel to set out for the Persian Gull I assume, as the contrary is not alleged, that the delay so far was due to no default or neglect by the defendant.

14. According to the defendant (and I assume the correctness of this for the purpose of deciding the legal aspects of issue No. 5), on June 14 the goods in question were (to use a metaphor which is not altogether happy in this climate) 'frozen' by a notification by the Dewan of Cambay. Whether that official was inspired or pressed into issuing this notification by any power other than his own Prince I do not know, nor does it matter. The fact is that the further movement of the goods was prohibited and there at Cambay they have remained ever since.

15. While in a godown at Cambay they seem, of course, to have been, and to be, completely useless either for the efficient prosecution of the war or for any other purpose. There may be some reason, beyond my ken, by force of which cotton yarn locked up in a shed in Cambay is serving some useful and legitimate end; or, more probably, it may be that somebody is holding out for a bribe before he will permit the goods to be moved. On the off chance that this judgment should come to the notice of some responsible official who is both honest and reasonably intelligent, I venture to point out that the goods in suit might usefully be made available to would be purchasers. But, in any event, no official corruption or stupidity can convert the adventure on which the parties embarked into a patriotic one.

16. By his solicitor's letter of July 21, the plaintiff demanded the amount now claimed and stated that he would claim interest at six per cent, per annum. In the ordinary course this letter would have been received on the 22nd and the defendant had till the evening of that day in which to pay up and look cheerful. He did not do the former: whether he did the latter I do not know.

17. On August 21, 1944, the plaintiff commenced the present proceedings by way of a summary suit to recover the three lakhs he had paid the defendant, who obtained leave to defend, from my brother Bhagwati, on October 3, 1944. The general effect of the pleadings I have already endeavoured to summarise, and the following issues have been framed:

(1) Was it ever orally agreed between the parties that the contract goods should be shipped on or before April 30, 1944 If not, what was a reasonable time for shipment ?

(2) Was the contract between the parties varied as to counts, as alleged in paragraph 4 of the written statement ?

(3) Were the three lakhs referred to in the plaint paid in respect of the goods obtained by the defendant under the contract as so varied or in respect of some other and what goods ?

(4) On the true construction of the contract between the parties- (') was it the duty of the defendant or of the plaintiff to obtain any export licence necessary for the purpose of conveying the goods to Jaffarabad (6) was it the duty of the defendant to get the contract goods to Jaffarabad or merely to use his best endeavours to get the contract goods to Jafferabad ?

(5) Was the contract frustrated as alleged in paragraph 6 of the written statement or at all ?

(6) Were 803 bales or some other and what number of bales obtained by the defendant as agent for the plaintiff If so, do those bales, in the events which have happened, belong to the plaintiff?

(7) Were the goods is the last issue mentioned collected at Cambay If so, were they so collected by the defendant as the plaintiff's agent If so, were they so collected with the (a) knowledge and/or (b) consent of the plaintiff'?

(8) Was the plaintiff at any and what time or times ready and willing to carry out his part of the contract between the parties ?

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

18. The answers to issues Nos. 2 and 3 are now admitted to be 'Fes', and consequently I have dealt with these matters as shortly as I could. Mainly at the suggestion of learned counsel for the defendant, but with the approval of learned counsel for the plaintiff, issue 4 was dealt with first with the object of saving time. In fact, Mr. Bauaji for the defendant was unable to keep his argument on this question and on the legal aspects of issue 5 in separate and watertight compartments, and I have in fact heard-with great interest and pleasure-all his submissions on both these topics.

19. I framed the second part of issue 4 on a suggestion which it seemed to me the written statement implied, but in fact it has not been, and could not be, seriously contended that the contract in question was merely a contract to endeavour to ship certain goods: it was an absolute contract to ship them with a special provision as to what should happen if that proved impossible: and obviously the goods could not be shipped at Jaffarabad, (which was admittedly the contemplated port of shipment) until they had been got there, or failing that, until other goods of the same description had been obtained at Jaffarabad.

20. Issue 4(a), like the latter part of issue 1, is a question of construction. The contract is in writing, and any ambiguities in it are patent ambiguities: None of the provisos to Section 92 of the Indian Evidence Act is applicable and therefore the materials I am allowed to use are, first and foremost, the grammatical and ordinary meaning of the words used taken as a whole, and, secondly, the surrounding circumstances which must have been present to the minds of both parties. If the grammatical and ordinary meaning of the words produces an absurdity or a repugnancy with the rest of the instrument, I may depart from it so far as may be necessary to avoid that absurdity or repugnancy, but no further. (See the famous passage in his speech in Grey v. Pearson (1857) 6 H. L. C. 61 often referred to as Lord 'Wensleydale's 'Golden Rule')- The rule may work hardship in some cases and possibly-though I am by no means so persuaded -this is one of them: on the whole it is undoubtedly productive of infinitely more good than harm. I am also entitled to imply a term, if it is necessary to give the contract business efficacy, but not otherwise. The Moorcock (1889) 14 P. D. 64. Bowen L.J.'s well known judgment to that effect in that case has subsequently been further explained by that other great commercial Judge, Scrutton L.J. The very clear test which the latter held to be applicable was this: let it be supposed that at the time of contracting the question of expressly including the term sought to be implied had arisen. If the Court is satisfied that the parties would both-not one, but both-have said, 'We need not bother about that, it is too obvious'-then the term should be implied: but otherwise it cannot be.

21. I now look at this contract, bearing these weighty pronouncements in mind. It imposes on the defendant, as it seems to me, four duties, two absolute and two contingent, namely, (1) To buy the goods; (2) to ship them at Jaffarabad; (3) if (2) proved impossible, to refund any money paid to him by the plaintiff; (4) to make the like refund if after shipment the ship failed to reach the high seas.

22. It is a hybrid contract, being in the main one of agency and in part one of guarantee, though in fact the latter part never came into operation.

23. Clearly there is no express term that the plaintiff should obtain any licence whatsoever, and I am quite unable to see why one should be implied. If I agree for Rs. 500 to go from here to Delhi there cannot, in the light of The Moorcock, or of Scrutton L.J.'s test, be an implied term that the other party to my agreement should buy my ticket for me: indeed, the present case is even clearer than that because there was an express term that the plaintiff should pay to the defendant the defendant's expenses of performing his part. It must, therefore, have been for the defendant to do the work and incur, in the first instance, the expense (if any) of getting the necessary licence, which expense (if any) he would be entitled to be reimbursed; or if he did not like actually to put his hand into Ms pocket, it was for the defendant to ascertain the expense and claim it in advance from the plaintiff. The latter he never did. The only decided case (so far as I can discover) which even superficially conflicts with this view is M.O. Brandle & Co. v. M. N. Morris & Co. [1917] 2 K. B. 784, but the facts there were quite different from the present facts. In that case oil, for the export of which during the 1914-18 war a licence was required, was sold f.o.b. Manchester. It was held that it was for the purchaser to get the licence. But why Simply because it was an ordinary f.o.b. contract and therefore it was the vendor's duty merely to put goods of the contract quantity and description on board a ship nominated by the purchaser: it was for the latter to nominate an effective ship, i.e. a ship both legally and physically capable of carrying the goods (see per Scrutton. L.J. at p. 798). The obtaining of the licence was no more the business of the vendor than the necessary repairs would be if the buyer had nominated a ship with a hole in her bottom. The present contract was not a contract of sale at all but one of agency, as, indeed, Mr. Banaji rightly admits: but, he says, 'it was for the plaintiff to do all essential things as I was only an agent.' Carried to its logical conclusion, this argument means that to earn his remuneration an agent need do nothing, or, at all events, nothing that matters: which is absurd. The answer to this issue, is, therefore, (a)-Of the defendant; (b)-The former,

24. Really, the main part of Mr. Banaji's able and interesting argument dealt with issue 5, assuming for its purpose the facts to be as his client contended. I regret that as I was at all material times in charge of the miscellaneous list it was not possible to hear that argument with anything approaching continuity, but that was the fortune of war, and I have done my best to follow it with the attention it deserves. I do not think that I am doing it any injustice by summarizing it into two cumulative or alternative propositions, viz.

(1) On a true construction of the contract in suit 'inability to ship the goods' only begins when the goods are at the port of shipment:

(2) My contract was frustrated by the action of the Cambay Government: consequently I am released from its further performance.

25. I cannot see the force of the first proposition once it is determined that it was for the defendant to do whatever was needful to get the goods to Jaffarabad. In saying this I assume that other goods of the contract quantity and description were not obtainable at Jaffarabad. This assumption is in the defendant's favour, because if such goods were obtainable, he might be liable not merely to refund the plaintiff's money but to pay him damages as well. You cannot ship goods until you get the goods to the ship or the ship to the goods, and it was the former that had to be done in the present case. If that essential preliminary could not be done, shipment was just as impossible as it would have been if the goods had been got to Jaffarabad but all the stevedores of that port had been on strike. Suppose that someone is good enough to invite me to lunch with him at 1 p.m. on a Wednesday in term time at the Willingdon Club. I should answer, with regret, that I could not do so, because my duty required me to be at the High Court, several miles away, at the time in question. My would-be host would surely be himself inaccurate if he charged me with inaccuracy in the use of language, saying, 'It is not that you can't lunch with me but merely that you can't come to the Willingdon Club.' I should rejoin, if I were to pursue such an unprofitable argument, 'If I can't come to the Willingdon Club, a fortiori I can't lunch with you there,' and I should have thought this was obviously correct. According, however, to Mr. Banaji's contention, inability to lunch would only arise if (my board for the day having miraculously collapsed) I made my way post-haste to the Willingdon Club and arrived by one o 'clock, but on arrival was prevented from consuming my host's good cheer by a fit of apoplexy or an attack of tetanus, or some such cause, I think this argument carries its own refutation with it: for it must, surely, be conceded that the defendant here was either 'able' or 'unable' to effect shipment of the goods within the meaning of the present contract. If, therefore, he was not 'unable' to do so, it means that he was 'able' to do so: that is to say, that he was 'able' to ship at Jaffarabad goods which he could not get to Jaffarabad- which is absurd.

26. Turning to Mr. Banaji's second contention, the doctrine of frustration has been one of gradual growth. The general rule of law (exemplified in its full harshness in Paradine v. Jane (1641) Aleyn 26) was that a man, come what may, must either perform his bargain or pay up. If he failed to provide in his contract against the event which happened, more fool him. An apparent exception to this was, however, early recognised in contracts of which the continued life of a particular human being formed the basis. In contracts for personal services, for example, there is no implied covenant by the servant that he will keep alive till the end of the period of his service, and a suit for damages against his personal representative for breach of contract by dying is, so far as I am aware, unknown. This is very notable, because, the death of the servant being inevitable sooner or later, the parties might very well have contemplated the possibility of its occurring during the term of the contract and provided therein what was to happen if it did. Doubtless, there is no reason why a man should not by apt words covenant that he would not die before a stipulated date, but I doubt if anyone has even seen or heard of such a contract.

27. The law advanced a considerable step in Taylor v. Caldwell (1868) 8 B. & S. 820 where it was held that the continued existence of a particular thing, in that case a music hall, formed the basis of the parties' contract and that the casual destruction of that thing discharged each party from further performance of the contract, although there had been no breach of it by the other.

28. The next important development occurred in consequence of the postponement of King Edward VII's coronation, when the happening of a particular event was recognised as a possible 'basis for the contract', so that its failure to happen discharged the contract. Krell v. Henry [1903] 2 K. B. 740 and Chandler v. Webster [1904] 1 K. B. 498 are cases of this period. In the latter case it was held that rent already paid for a room from which to view the coronation procession could not be recovered even though the contract was frustrated by the postponement of the coronation. The happy lessor was thus, no doubt, enabled to let the room all over again to someone else when the coronation did take place, and so reap a second harvest, while the lessee was left lamenting. It was not an ornament of common law and is now, happily, overruled.

29. The Avar of 1914-1918--till lately called 'Great'-witnessed a further development, in the recognition by decisions of the House of Lords of the continued existence of a given state of things, including a given state of the law, as an element so fundamental in some contracts (such as charterparties and building agreements) that its cessation frustrated those contracts. To this epoch belong, amongst other important decisions, F. A, Tamplin Steamship Co., Ld. v. Anglo Mexican Petroleum Products Co., Ld. [1918] 2 A. C. 397; Metropolitan Water Board v. Dick Kerr & Co., Ld. [1918] A. C. 119 and Bank Line, Ld. v. Arthur Capel & Co. [1919] A. C. 485. In many of the so-called 'Great War' cases, frustration was held to have been brought about by a change in the law of the land-not the physical impossibility, but the supervening illegality, of carrying on the original adventure was held to have discharged the contract. This well illustrates the proposition that the doctrine of frustration is not really an exception to the rule that a man must pay damages if he breaks his contract, for there can be no default in not doing that which the law prohibits. Lord Wright said of the doctrine o frustration in Denny Moti & Dwkson, Ld, v. James B. Frasey & Co., Ld. [1944] A. C. 265 (p. 274) =

I should prefer to describe it as a substantive and particular rule which the common law has evolved. Where it applies there is no breach of contract. What happens'is that the contract is held on its true construction not to apply at all from the time when the frustrating circumstances supervene. From that moment there is no longer any obligation as to future performance, though up to that moment obligations which have accrued remain In force.

His Lordship then deals with the case of a contract for personal services, which I have already mentioned, and then proceeds (p. 274) :-

A rule of this character obviously admits of almost indefinite exemplifications, as numerous and diverse as are the possibilities of the performance of a contract being interrupted by a vital change of circumstances. The law, however, has examined a great variety of cases in which it has held or refused to hold that a contract is nullified as to its future by the impact of a frustrating event. The application of the general principle must depend on the circumstances of the particular case. No detailed absolute rules can be stated. A certain elasticity is essential.

I believe the last judicial echo of the 1914-1918 war was the decision of their Lordships of the Privy Council in Hirji Mulji v. Cheong Yue Steamship Co, Ld. [1926] A. C. 497, where, in a characteristically brilliant judgment delivered by Lord Sumner, the frustration of a time charter was held to put an end to a reference, therein contained, to arbitration; with the result that when, applying a great deal more elasticity to the law than Lord Wright afterwards considered essential, an arbitrator awarded damages for subsequent non-performance to the disappointed party, he was acting without jurisdiction. In one respect, which I shall point out later, this is the strongest decision in the defendant's favour.

30. During the present, or we may possibly hope, immediate past, war the doctrine again engaged the attention of the highest tribunal in Great Britain on several occasions, including Denny Moit & Dickson Ltd.'s case (supra). Perhaps the most noteworthy of these is Fibrosa Spolka Akeyjna v. Fairbbairn Lavison Combe Harbour, Ld. [1943] A. C. 83 where Chandler v. Webster (supra) is overruled. The Legislature also took a hand in the matter by producing the Law Reform (Frustrated Contracts) Act, 1943. The unlamented demise of Chandler v. Webster is not of direct importance to this country where the law, thanks to Section 65 of the Indian Contract Act, was at all material times more in accordance with the (in Lord Shaw's view) more civilized law of Scotland. But it is of some indirect importance in the present case as showing that, even in darkest England, money paid pursuant to a frustrated contract, the payment of which produces no benefit to the payer, may be recovered from the payee, and that in a case in which the parties have not expressly provided that it should be so repaid.

31. Though the law of frustration has been long developing and though the topic has been repeatedly considered by the very highest tribunals, I am not aware of a single case in which that doctrine has been held applicable to an express contract to repay money in case of the supervening impossibility of performance of a major obligation. It is rightly conceded that it is open to parties to make their own bargain about this or, in general, any other matter: nor could one doubt that if two citizens, foreseeing the possibility of an inflammation of the Royal appendix or of an abdication, had agreed for the hire by one to the other of a room to watch a coronation procession on the express terms that the rent should be paid in advance but refunded in case this procession did not take place, the Court would not, even in the unenlightened ago in which Chandler v. Webster was decided, have allowed the lessor to keep the rent, even if he had incurred expense on making the room fit for the lessee's brief occupation. There is, to the best of my belief, no reported instance of a claim under such a contract, but the whole ratio decidendi in the decided cases where the doctrine has been held applicable is that the frustrating event was outside the contemplation of the contracting parties. The exact opposite is the case here-they have in terms provided what was to happen in case of impossibility of performance-unless indeed I am bound to give the words 'In ease I am unable to effect shipment of the goods' a meaning more restricted than their grammatical and ordinary meaning. In, I think, most of the reported cases in which war or one of its effects was held to be a frustrating cause, the contract in suit was made before the war actually started. The Dick Kerr case (supra) is a good example of this class. No ordinary and reasonable man, contracting even in July 1914, could have been expected to foresee the wholesale interference with the liberty of the subject which even the so-called 'Great' war produced-even in the countries which were fighting to preserve that liberty. The only reason why the remedy was not as bad as the disease was that the evils of the remedy were for the most part less abiding than those of the disease. It is true that the phenomenon of war was not unknown before August 4, 1914; but that which we are pleased to call 'civilization' advances-or retrogresses (whichever be the correct expression)-not steadily but by jerks; and an ordinary man contracting in July 1914 could no more have predicted, by reason of what had happened in the Napoleonic, Crimean and Boer Wars, the state of things which would be prevailing in England in (say) 1917 than could such a man, contracting in August 1939, have foreseen the atomic bomb. Cases of this class do not, I think, assist the defendant, who made his contract when the war was, and all its consequences were, in full swing.

32. Cases such as the Sank Line case (supra) (described by Lord Sumner at p. 453 as 'a very near thing'), Lloyd Royal Beige Societe Anonyme v. Stathatos (1917) 84 T. L.R. 70, (said by no less an authority than Pickford L.J. to be 'very near the line') and Hirji Mulji's case (supra) are more helpful to the defendant. So, to take a case arising out of the 1926 'General Strike' is The Penelope [1928] P. 180. In this last mentioned case, the contract was made when the industrial horizon of Great Britain was heavily overcast, and contained a common form of strikes and lockouts clause; but the contract itself showed (which I feel to have been fundamental in Lord Merrivale's judgment) that the parties did not contemplate anything comparable to that which happened, viz. the impossibility of shipping any coal at all from any port whatever in South 'Wales or elsewhere in Great Britain for a period of many months. The Bank Line case is sharply contrasted with Tamplin case: the latter was that of a time charter made before the war, and already in operation at its outbreak, containing a 'restraint of princes' clause and an express power to sublet. It was held not to be frustrated by the requisition of the chartered ship or even by her conversion from an oil tanker into a troop ship. In the former case, a time charter made after the war contained a 'restraint of princes' clause, but the ship was requisitioned before she was even delivered to the charterers at all. Despite the fact that the contract was made during the war, the adventure was held to be frustrated by the requisition of the ship, largely because at the time of that event, as opposed to the time of the trial, it was completely uncertain and unascertainable when, if ever, the ship would be available for purposes of the charter, which destroyed the identity of the chartered service. In the Lloyd Beige case this principle was extended from a time charter to a voyage charter at time rates, and again there was a 'restraint of princes' clause. Here also the ship never became available to the charterers. As the case was said to be, and if I may say so, obviously was, 'very near the line', I must be very hesitant of extending it. In no one even of these cases was there a provision in express terms as to what was to happen in case the main object of the contract proved impossible of attainment, which in my humble judgment distinguishes them from this case without entering into other, and more minute, possible distinctions, Hirji Mulji's case is, therefore, I think, the most helpful to the defendant. Its general effect I have already stated. In dealing with it I feel that it is most important to notice the exact terms of the reference therein discussed. It appears from p. 498 of the report that they were, so far as material, as follows:

Any dispute arising under the charter shall he referred to the arbitration of two persons...etc.

Could a dispute which arose only at the moment when, as their Lordships held, the charter was brought to an end and both parties were released from further performance of its obligations, be held to arise 'under that charter' Their Lordships held that it could not: the termination of the charter as a whole terminated the reference as surely as the complete collapse of a house would involve the destruction of a picture attached by a nail to one of its walls. But supposing the parties had added after the words 'under this charter' some such expression as 'including any question as to its frustration'-what then? I cannot doubt that then their Lordships' decision would have been in the opposite sense-there would in reality have been two contracts written on the same piece of paper, the one frustrated, and the other not. Such, unless indeed I ought to give a very restricted and unnatural meaning to the words I have already, set out, is the present case. For what, it may be asked, has happened which renders it physically or legally impossible for the defendant to pay the plaintiff Rs. 3,00,000? The answer must be ''nothing.' In these circumstances, I feel that my decision on this question must turn not on authority but on pure construction of the particular contract before me. Why should I give to the words in question a narrower meaning than that which they grammatically bear?

33. Substantially, two reasons for this are advanced. First, that if I do not do so the bargain is an absurdly hard one on the defendant. Secondly, that some effect must be given to the presence, in relation to the ship's possible failure to reach the high seas, of the words 'for any reason' and the very conspicuous absence of those words from the clause relating to the defendant's inability to effect shipment.

34. I see little substance in the former argument. There is a loss, and as the parties have not agreed to share it, one or other of them must bear it. It seems to me no more unreasonable to throw it on one than on the other. Mr. Banaji contends, in effect, that if the defendant was to bear the loss, it makes the contract, from the plaintiff's point of view, one of 'heads-I win: tails-- you lose.' It means that the defendant carries the whole risk. I do not think that is really correct: the plaintiff took the risk, common to all contracts involving credit and trust reposed by one man in another, of the insolvency or dishonesty of the defendant: all maritime risks after the passing by the ship of the three mile limit were for the plaintiff's account. He might minimize the latter by insurance, if he chose, and if the defendant gave him adequate notice of shipment (which he was not bound to do), but if so, lie would have to pay the premium and to chance his arm as to the solvency of the underwriters-a not great, but still appreciable, risk. Last but not least, a change in the legal or economic state of things at Khoraroshare might have made a highly profitable contract into a disastrous loss: no doubt, this was highly unlikely, but unlikely things sometimes happen, and this risk was entirely the plaintiff's. In any event, if the defendant has made not merely an unpatriotic but also an improvident bargain, I should be the last to mend it for him even if I had (as I have not) power to do so: and certainly the contract according to its ordinary and grammatical meaning is not so absurdly one sided as to justify my departing from that safe and sound standard of interpretation. I feel all the more confident about this as it is, as I think, clear that the defendant, and not the plaintiff, in the events which have happened, is the beneficial owner of the goods, for what they may be worth. This will, at any rate, minimize his loss and possibly enable him to pay the plaintiff his three lakhs without undue inconvenience. For reasons already indicated I do not particularly rejoice at either event.

35. Conversely, I feel very strongly the force of the second of these arguments. I must, if I can, give some meaning and, preferably, a sensible one, to every word or series of words, and if the presence in one part of the contract of a phrase absent from another part makes the latter in its ordinary meaning nonsensical, I should be fully justified in seeking some other meaning for the latter. According to Mr. Banaji, the only way to make the two material parts of paragraph 4 of the letter both sensible when read together is to hold that 'In case I am unable to effect shipment' means 'In ease I am unable by reason of any cause now in our mutual contemplation to effect shipment,'' while 'if the country craft for any reason fails to cross the territorial waters of Jaffarabad' means what it says, except, of course, that 'Jaffarabad' means 'Janjira'.

36. This contention, though superficially most attractive, is, I think, fallacious. The causes which might lead to failure of shipment are of two classes-the inability, through circumstances beyond his control, of the defendant to do so, or his unwillingness to do so-bad luck on the one hand, and default on the other. Similarly, the ship might fail to reach the high seas for causes either external or internal to herself and her company, or, indeed, through a combination of such causes. She might be overwhelmed by a gale, captured by a pirate, torpedoed, or swallowed whole by some as yet unknown sea monster, before she had sailed one marine league. Equally, she might fail to accomplish that modest feat through mutiny, barratry of the master or mariners, or through the drunkenness of the former, the latter, or both.

37. As regards failure to ship by the default of the defendant the contract is silent and, obviously, the parties left the law to take its course as to what should happen in this event. If- in preference to shipping the plaintiff's goods the defendant had sold them to the highest bidder at Jaffarabad, he would have had to pay damages which must have exceeded, and might have far exceeded, three lakhs: obviously, the parties did not say anything about this because it was unnecessary to do so, as it was too obvious that such would be the ease. The express provision for a refund, etc., in case of inability to ship was therefore purposely, I think, limited to inability. To make it clear that this was not the case as to failure of the ship to sail three marine miles, but that as to this the defendant was, shipment once having been effected, an absolute guarantor, the words 'for any reason' were necessarily included where they are included and, I think, deliberately omitted, as being unnecessary, where they are omitted. By the one clause the defendant limited and defined his liability in the event of inability to perform his bargain: by the other, he unconditionally guaranteed that a particular ship with particular goods on board would sail to a point one marine league from low watermark of ordinary spring tides, but no further, and waived his right to remuneration if this event should not occur. That seems to me a perfectly reasonable and sensible contract, and to involve no such absurdity as to compel or permit me to construe words as meaning something different from that which, according to their grammatical and ordinary interpretation, they mean.

38. To summarize my conclusions on this issue, they are these: I assume in the defendant's favour that it was the action of the Cambay Government which prevented his shipping the goods within the time and at the place the contract contemplated,-as the goods were not apparently held up till June 14, and the export licences he had somehow come by, in someone else's name, had by the time long expired, and as the monsoon might be expected on or about June 21, this is an enormous assumption-still the contract to pay money in case of inability to ship is most clearly severable from the contract to ship, and the frustration, if any, of the one does not affect the other. It is also a very great assumption to assume that the action of the Cambay Government was outside the contemplation of the parties at the time of contracting, for I apprehend that Cambay was, technically at the least, at all material times a belligerent, and even if she were not, modern war is, amongst its other evils, grossly infectious. But making every such assumption, the answer to this' issue must still be:-

Not so far as the defendant's agreement to repay the sum in dispute is concerned.

39. That issue being disposed of, the answers to the remaining issues are, really, very simple.

40. Each party, despite their desire to dispose of issues 4 and 5 first 'to save time' has ardently desired to adduce oral evidence as to other matters which (those issues being answered) do not arise. Had they done so, no time at all would have been saved. I should have been the last to stand in the way of either party in this case who wished to expend money on such deserving objects as Mr. Viniadalal for the plaintiff, Mr. Banaji for the defendant, or the solicitors instructing either of them, if it were not for the facts that I do happen to preside over a Court and not a moot club, and that there are other litigants who want their oases decided. I know that I 'ought not' as a rule, 'to dispose of the whole case on a preliminary issue', but the very words 'as a rule'' imply the existence of exceptions. Even where, as here, the parties, through their counsel (with exemplary politeness) 'threaten and intend' to carry the matter to their Lordships of the Privy Council, I cannot see that I am justified in indulging in what may be a waste of public time for their benefit where, as here, I have a commercial dispute involving (I think) only the construction of an admitted document in the light of admitted events. If I am wrong, it is true, a new trial may be necessary on some or all of the issues: but, if 'f may be forgiven for saying so, it is just possible that I am right: in any case, if there is a new trial, the responsibility is mine and not that of either party.

41. Having said that, I now turn to the remaining issues.

42. 1. It will, again, be convenient to answer the latter part first.

43. I have to extract the answer from the written contract and the surrounding circumstances. Mr. Viniadalal contends that the parties contemplated shipment by a date sufficiently early to enable a country craft to clear the monsoon area before the monsoon. Mr, Banaji, that having regard to the date of the contract, shipment shortly after the monsoon-up to, say, the end of October 1944-would still be within a reasonable time. He, of course, admits that the monsoon itself was, so to speak, a 'dead period'. One notorious fact about modern war is that circumstances during it change very rapidly and radically. A good contract in May might well have proved a crazy one in October. In these circumstances, and all others, I think that, Whatever might be the case about a similar contract made on March 7 in normal times, the latest reasonable date of shipment was May 31, Even if 1 am wrong, it does not greatly matter, because though the suit might possibly have proved premature if the goods could have been shipped at Jaffarabad on, say, October 30, in fact they could not have been, but have been immobilized right down to the present date. A fortiori, therefore, the answer to the first part of this issue is of completely acadamic interest. v ,

44. The answer is: 'The first part does not arise: as to the second' part, on or before May 31, 3944.' The answers to issues 2 and 3 are in 'each case now admittedly 'Yes.' Issues, 4 and 5.1 have already answered.

45. Issue 6 is a little complicated, but again the material part of. it is the second, Again I make some very big assumptions in the defendant's favour, and in particular assume that Mr. Nikupur was the plaintiff's agent to consent to a course of dealing, which otherwise would be, in the light of such well known authorities as Bostock v. Jardine (1865) 3 H. & C. 700 and Robinson v. Mollet (1874) L.R.802, a clear breach of the defendant's duty as agent of the plaintiff. Were this not so, the plaintiff would be entitled to the relief he now asks, not under any special term of the contract at all, but on the ground that the contract which the defendant agreed to make on his behalf has never been made and, therefore, the consideration for his, the plaintiff's, payment of three lakhs has wholly failed. In this event, of course, no property would :have passed to the plaintiff. But >even on the assumption I propose to make, the same result as regards property follows, for nobody on earth could at any time definitely have said: which specific articles are and which are not the property of the plaintiff. In these circumstances it is absolutely impossible to hold that the property in any of the goods passed to the plaintiff. See Wait, In re [1927] 1 Ch. 606, where wheat was sold c.i.f. England to W and, in part, resold c.i.f. England to X, W becoming bankrupt before any part of the wheat had been appropriated to X. It was held by a majority of the Court of Appeal, reversing the judgment of a Divisional Court and restoring that of the County Court Judge, that without prejudice to any right of proof X might have, the whole of the wheat passed to was trustee for the benefit of his creditors. :

46. But even if I am wrong about this and if the title to some (though who can say which?) of the goods at Cambay passed here to the plaintiff, in the events which have happened he is now entitled to none of them. It was a most clearly implied term that if the plaintiff should elect, as he admittedly has done, to have his money back rather than to take the goods, if any, for what they .may be worth, the defendant is entitled to make what he can of those goods. To maintain the contrary (which I need hardly say Mr. Vimadalal has never done) would be to deny the proposition (unfortunately, but notoriously, true) that you cannot both eat your cake and have it. Applying Lord Justice Scrutton's test, let us suppose that on March 7, 1944, this possibility had occurred to the parties. I cannot doubt that if, as I am prepared to assume, they are reasonable people, 'Some such dialogue as the following would have taken place:

Defendant: 'What is to happen if I buy goods for you, cannot ship them, : and therefore pay you back your money ?'

Plaintiff: ' Well, you'll be entitled to the goods.'

Defendant: 'I think we'd better provide for that in the contract.'

Plaintiff: 'Surely, we needn't bother-it is too obvious.'

Defendant. 'Yes, I agree.'

47. The answer to this issue is, therefore, 'Strictly, it does not arise: but the articles alleged by the defendant to belong to the plaintiff do in fact belong to the defendant.'

48. Issue 7 consequently does not arise, nor, since the plaintiff is only claiming what he is, does issue 8. As far as the now material part of the contract is 'concerned, there was nothing for the plaintiff to do except to receive his money, and it hardly needs saying that he was always ready and willing enough to do that.

49. The result of all this is that there will be a decree in favour of the plaintiff for three lakhs with interest thereon from July 23, 1944, to this date at six per cent, per annum simple, costs to be taxed, including costs reserved, and interest on the aggregate decretal amount at six per cent, per annum simple till payment.

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