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Gambhirmull Mahabirprasad Vs. the Indian Bank Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberSuit No. 1380 of 1943
Judge
Reported inAIR1963Cal163
ActsContract Act, 1872 - Sections 56, 73, 182, 192, 194, 195, 211 and 212; ;Sale of Goods Act, 1930 - Sections 23 and 25; ;Code of Civil Procedure (CPC) , 1908 - Section 35 - Order 1, Rule 7
AppellantGambhirmull Mahabirprasad
RespondentThe Indian Bank Ltd. and anr.
Appellant AdvocateAmiya Basu, Adv.
Respondent AdvocateM. Hazra and ;P.P. Ginwalla, Advs.
Cases ReferredMadras v. Mysore Chromite Ltd.
Excerpt:
- sankar prosad mitra, j.1. in this suit the plaintiff states that at the material time both the defendants had branch offices at rangoon. the plaintiff was a constituent of the defendant indian bank ltd. in calcutta which was acting as the plaintiff's bankers and agents and was in-charge and control of three consignments of hosiery goods belonging to the plaintiff. the goods were lying in rangoon. the documents relating thereto were in the custody of the defendant bank. the goods consisted of 34 cases shipped per s.s. hupeh; 16 cases shipped per s. s. taksand and 2 cases shipped per s. s. hong-peng.2. on and prior to the 3rd january, 1942 the plaintiff instructed the defendant bank in calcutta, to arrange for the immediate reshipment of the goods, to calcutta and if re-shipment was not.....
Judgment:

Sankar Prosad Mitra, J.

1. In this suit the plaintiff states that at the material time both the defendants had Branch Offices at Rangoon. The plaintiff was a constituent of the defendant Indian Bank Ltd. in Calcutta which was acting as the plaintiff's bankers and agents and was in-charge and control of three consignments of Hosiery goods belonging to the plaintiff. The goods were lying in Rangoon. The documents relating thereto were in the custody of the defendant bank. The goods consisted of 34 cases shipped per s.s. Hupeh; 16 cases shipped per s. s. Taksand and 2 cases shipped per s. s. Hong-peng.

2. On and prior to the 3rd January, 1942 the plaintiff instructed the defendant bank in Calcutta, to arrange for the immediate reshipment of the goods, to Calcutta and if re-shipment was not possible to arrange for insurance and storage of the goods- The defendant bank informed the plaintiff that instructions to the said effect had been sent by them to their Rangoon Office on the 3rd January, 1942.

3. By letter dated the 7th January, 1942 Machinon Mackenzie and Co., the defendant No. 2 herein had at the request of the plaintiff undertaken to have the consignment of 34 cases re-shipped to Calcutta immediately on receipt of a deposit and the documents relating to the goods. On the 10th January, 1942 the defendant bank at Calcutta informed the plaintiff that its Rangoon Office had undertaken to arrange for the immediate re-shipment of the goods and if re-shipment was not possibleto arrange for insurance of the goods against waf risks and to store the same. On the 10th January, 1942 the plaintiff handed over the letter of the defendant No. 2 to the defendant bank, at Calcutta to take further action in the matter. Pursuant to these instructions the defendant bank, by its letter dated the 10th January, 1942 to the defendant No. 2, requested the latter to arrange for the immediate re-shipment of all the three consignments from Rangoon to Calcutta and to instruct their Rangoon Office to act accordingly and to accept the documents relating to the goods. Pursuant to the plaintiff's instructions the defendant bank, at Calcutta by their letter dated the 10th January, 1942 to their Rangoon Office confirmed the previous correspondence in the matter and requested the latter to hand over the documents relating to the goods to the Rangoon Office of Messrs. Mackinon Mackenize and Co. immediately with instructions to re-ship the goods at once, if re-shipment had not already been made.

4. By their letter to the defendant bank dated the 13th January, 1942 the defendant No. 2 undertook to arrange for re-shipment of the goods immediately on receipt of a deposit of Rs. 600/-. On the 14th January, 1942 the defendant bank on behalf of the plaintiff paid the sum of Rs. 600/- to the defendant No. 2.

5. The plaintiff's case is that the defendant Bank, at Calcutta agreed with the plaintiff that it would arrange for the immediate re-shipment of the goods from Rangoon to Calcutta and would forthwith hand over the documents relating thereto to the defendant Mackinon Mackenzie and Co., and that if re-shipment was impossible the defendant bank would store the goods and would arrange for insurance against war risk. It is also the plaintiff's case that the defendant Mackinon Mackenzie and Co., at Calcutta agreed with the plaintiff that they would arrange for the immediate re-shipment of the goods on receipt of the documents relating thereto. The defendant No. 2 retained the sum of Rs. 428/5/- out of the deposit of Rs. 600/- for their charges in the matter and remitted the balance of Rs. 171/11/- to the defendant bank. The plaintiff has paid to the defendant bank the sum of Rs. 428/5/- as also the sum of Rs. 229/- for war risk insurance charges and Rs. 12/12/- for commission and postage.

6. The defendant bank committed breaches of its agreement with the plaintiff and of its duties as the agent of the plaintiff and conducted the business undertaken by it negligently and without skill and diligence.

Particulars:

a. The plaintiff is informed by the defendant No. 2, that on the 31st January, 1942 it received from the defendant bank, an Export licence which was not in correct form; that the licence was returned for correction to the defendant bank and was not received back by the defendant No. 2. The defendant bank was guilty of negligence in obtaining a licence which was not in correct form, in failing to get the same corrected or in obtaining the requisite export licence to hand over the same to the defendant No. 2.

b. The plaintiff is informed by the defendantNo. 2, that it did not receive from the defendant bank any documents relating to the goods until the 31st January, 1942. The defendant bank was guilty of negligence in not handing over the document to the defendant No. 2, earlier than the 31st January, 1942 or in terms of the bank's agreement with the plaintiff.

c. The defendant bank alleges that the goods were insured against war risk by two receipts dated the 8th and the 31st January, 1942. The plaintiff does not admit that the receipts produced by the defendant bank relate to the goods in suit. The defendant bank negligently or in breach of their obligations to the plaintiff failed or neglected to insure the goods against war risk and in any event to arrange for any effective insurance thereof or to establish any privity between the plaintiff and the insurers or to prove the loss of the goods before the insurers or to obtain compensation therefor.

d. The defendant bank, negligently or in breach of its obligations to the plaintiff failed and neglected to store or to secure the goods or to take proper care thereof.

e. The defendant bank negligently or in breach of its obligations to the plaintiff failed and neglected to arrange for re-shipment of the goods.

7. The plaintiff is informed that on receipt of the documents relating to the goods the defendant No. 2 took possession thereof. The defendant 'No. 2, however, wrongfully and in breach of its duties and agreement with the plaintiff failed and neglected to re-ship or to arrange for the re-shipment of the goods from Rangoon to Calcutta, or matters incidental thereto or to take proper care of the goods.

8. The goods were never re-shipped or delivered to the plaintiff by the defendants, and were wholly lost to the plaintiff. The plaintiff is informed that the goods were lost sometime in February, 1942 as a result of enemy action. The plaintiff has claimed Rs. 25000/- as the value of the goods, alternatively the three sums mentioned above aggregating to Rs. 670/11/- with interest thereon and other reliefs.

9. The case of the defendant bank inter alia is that its Calcutta branch was asked to collect the bills which accompanied the Bills of Lading and invoices relating to the goods from the various customers of the plaintiff. The defendant bank never acted as the plaintiff's agent or banker and was not in-charge or control of the plaintiff's goods. Pursuant to the plaintiffs 'directions the bank's Rangoon Office finally presented to the plaintiff's customers the bills relating to the goods in suit for payment and failing to get the payments, on the 17th December, 1941 sent two bills of lading together with the invoices to the second defendant at Rangoon and instructed them to store the goods in bonded warehouse and to arrange to re-ship the goods by the earliest boat available. The bank insured all the goods for their full value with effect from the 8th January, 1942 till the end of February, 1942. The second defendant at its Rangoon branch accepted the bills of lading. They asked for an Export licence on the 2nd January, 1942 without which they stated the consignment would not be permitted to be shipped by the customsauthorities. The bank's Rangoon Office immediately applied for the licence and on receipt of the same sent it to the second defendant together with the Bills of Lading on the 31st January, 1942. The Rangoon Office of the defendant No. 2 accepted the licence and the documents and took possession of the goods for re-shipment. The bank had nothing further to do in the matter. The bank in all the transactions aforesaid acted gratuitously without any special remuneration to help the plaintiff at the plaintiff's request. There was at no point of time any agreement with the plaintiff as alleged in the plaint either to arrange for the re-shipment of the goods or to hand over the documents to the defendant No. 2 or to store the goods or to insure the goods.

10. Assuming that there was an agreement between the plaintiff and the defendant bank it became frustrated by the conditions in Burma at the time and became impossible of performance and as such void.

11. The bank's Rangoon Office was informed by the defendant No. 2 that the goods could not be re-shipped for want of labour. Out of the sum of Rs. 600/- sent to the defendant bank by the plaintiff a sum of Rs. 428/5/- was paid to the defendant No. 2 as re-shipment charges and the balance was returned to the plaintiff. The sum of Rs. 229/- was paid as insurance premium. The sum of Rs. 12/12/- represents commission on the transactions of presentation of bills and postage expenses.

12. Assuming that the defendant bank was an agent of the plaintiff with regard to re-shipment or storage or insurance it acted in accordance with the directions of the plaintiff with all reasonable skill, care and diligence in the extraordinary or peculiar situation during the material period. In any event the plaintiff has waived its rights, if any, by letter dated the 13th January, 1943. The Export licence which was obtained by the bank was in proper form and remained with the defendant No. 2.

13. On the 8th May, 1943 this defendant offered to assign to the plaintiff its rights under the policy of insurance against war risks taken out by this defendant to establish a privity between the plaintiff and the insurer. But the plaintiff did not avail itself of the offer. This defendant did all that was possible to prove the claim and obtain compensation. But as it was not in a position to establish the date or the time of loss or details of the causes and circumstances thereof as required by the officer, Burma War Risk Insurance, owing to hurried and compulsory evacuation of Rangoon, compensation could not be realised. The goods were also stored in Bonded Warehouse and kept in Safe custody. This defendant had to close its Rangoon Office and leave Rangoon on the 18th February, 1942. The defendant bank denies that the plaintiff has suffered damages due to any act on its part or that the value of the goods was Rs. 25,000/-. The total value as per Bills Nos. OBCS 13,14,39 and 56 was Rs. 13,046/13/-. In any event the damages claimed are too remote. The plaintiff's claim for refund of the several sums mentioned in the plaint has also been denied.

14. The defence of Mackinon Mackenzie and Co., the defendant No. 2 herein inter alia is thatby the letter of the 7th January, 1942 it offered to re-ship 34 cases of goods upon terms and conditions mentioned in that letter. This offer was never accepted by the plaintiff. This defendant admits that the defendant bank by its letter of the 10th January, 1942 requested this defendant to arrange for re-shipment of three consignments of goods. It denies that by its letter dated the 13th January, 1942 it undertook 'to arrange for re-shipment of the goods immediately on receipt of a deposit of Rs. 600/-. The defendant admits however that it received the sum of Rs. 600/- from the defendant bank on the 14th January, 1942. The agreement to re-ship the goods was made between the defendant bank and this defendant's agent Messrs. Mackinon Mackenzie Burma. Ltd. This defendant retained the sum of Rs. 428/5/- out of the deposit of Rs. 600/- for the charges of its agents in Burma. On the 31st January, 1942 this defendant informed the plaintiff that its agent in Burma received from the defendant bank an export licence not in correct form and such licence was returned to the defendant bank. It was not received back by Messrs. Mackinon Mackenzie Burma. Ltd. The goods were partly stored in a Bonded Warehouse and were partly in the possession of the Commissioners of the Port of Rangoon. Inasmuch as no proper Export Licences from the Controller of War Supplies and Economic Warfare, Burma covering such goods were delivered to this defendant's agent in Burma, they could not re-ship them prior to their evacuation which was effected on the 21st February, 1942 pursuant to Orders of appropriate authorities.

15. Alternatively if it be held that there was any agreement between this defendant and the plaintiff for re-shipment of the goods, this defendant contends that the performance of such agreement was frustrated or rendered impossible by the failure of the plaintiff or its agents to provide the agents of this defendant with proper Export Licences and by enemy action in Burma and order of the authorities for evacuation from Burma. In the premises the agreement, if any, to re-ship the goods was discharged. This defendant denies that the plaintiff has suffered damages amounting to Rs. 25,000/- or any part thereof. This defendant denies also that the plaintiff is entitled to refund of the various sums specified in the plaint.

16. Mr. Hazra appearing for the defendant No. 1 and Mr. Ginwalla for the defendant No. 2 raised two separate sets of issues on behalf of their respective clients.

17. The issues raised on behalf of the defendant No. 1 are as follows:

1. a. Did the defendant bank become the plaintiff's agent for a. re-shipment of the goods and b. in case of re-shipment becoming impossible for arranging their storage and insurance against war risk?

b. If so, what were the terms, conditions and incidents of such agency?

c. Did the defendant bank act gratuitously as alleged in paragraph 7g. of the written statement?

2. Was there any breach or default or neglecton the part of the defendant bank as alleged in paragraph 14 of the plaint?

3. Did the plaintiff waive its rights, if any, as alleged in paragraph 14 of the written statement of the defendant bank?

4. Did the agreement of agency become frustrated as alleged in paragraph 9 of the written statement of the defendant bank?

5. Is the plaintiff entitled to the refund of money as stated in paragraph 18 of the plaint?

6. Was there any agreement as alleged in paragraph 10 of the plaint? If so, was such agreement frustrated?

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

18. The issues raised by learned counsel fot Mackinon Mackenzie and Co., he defendant No. 2 in this suit are as follows:

1. Did the defendant No. 2 at any material time have a branch office in Rangoon?

2. Did the defendant No. 2 agree with the plaintiff that it would arrange for tho immediate re-shipment of the goods on receipt of the documents relating thereto as alleged in paragraphs 4, 8, 11 and 12 of the plaint?

3. Was the payment of Rs. 600/- as alleged in paragraph 9 of the plaint made on behalf of the plaintiff to the defendant No. 2?

4. Did the defendant No. 2 retain the sum of Rs. 428/5/- out of the deposit of Rs. 600/-for its agents as alleged in paragraph 8 of its written statement?

5. Did the defendant No. 2 take possession 08 the goods? If so, did the defendant No. 2 fail to take proper care of the goods?

6. Did the plaintiff or its agents fail to provide for a proper export licence for the said goods?

7. If there was any agreement between the plaintiff and the defendant No. 2 for reshipment of the goods, was such agreement discharged or was the performance thereof frustrated or rendered impossible by failure of the plaintiff or its agents to provide fot a proper export licence or by enemy action or by orders for evacuation from Burma?

8. To what relief, if any, is the plaintiff entitled?

19. Although a large number of issues have been raised on the pleadings, Mr. A. N. Bow, learned counsel for the plaintiff in his final arguments sought to restrict the scope this suit to a large extent.

20. In paragraph 4 of the plaint reference has been made to the letter dated the 7th January, 1943 from Mackinon Mackenzie and Co., of 16, Strand Road, Calcutta to the plaintiff firm Exhibit C page 19. In this letter the defendant No. 2 states that it shall be pleased to have the consignment 08 34 cases re-shipped from Rangoon on receipt of certain documents together with a deposit of Rs. 400/-. The next letter which should be noted is dated the 10th January, 1942 Exhibit C page 31. from the defendant bank in Calcutta to its Rangoon Office. A copy of this letter was sent to the plain-tiff. The letter refers to OBCS 13, 14, 39 and 56. The defendant bank in Calcutta acknowledges receipt of a cable from its Rangoon Office that the Said office is arranging to re-ship and if the same becomes impossible to have the goods insured against war risk and store the same. A copy of a letter addressed by the defendant bank in Calcutta to Messrs. Mackinoo Mackenzie and Co., Calcutta is also enclosed. The bank's Rangoon Office is advised to hand over documents to Messrs. Mackinon Mackenzie and Co., at Rangoon requesting them to re-ship the goods to Calcutta if arrangement for re-shipment had not already been made by the Rangoon branch of the bank. In the letter of the defendant bank to Messrs. Mackinon Mackenzie and Co., dated the 10th January, 1942 Exhibit C, page 29. reference is made to its letter of the 7th January, 1942 to the plaintiff firm. It is stated that this letter has been handed over by the plaintiff to the defendant bank for further action. The letter goes on to say that the defendant bank's Rangoon Office has been asked to arrange for re-shipment of the goods. The Rangoon Office is experiencing some difficulty in doing so and the defendant No. 2 is requested to instruct its office at Rangoon to accept the relative documents from them and arrange for re-shipment at an early date, if the defendant bank's Rangoon branch had not already done so. All necessary charges in this connection would be paid by the defendant bank.

21. The two letters both dated the 10th January, 1942 have been referred to in paragraphs 6 and 7 of the plaint. It should be noted further that in the defendant bank's letter to Messrs. Mackinon Mackenzie and Co., dated the 10th January, 1942 the request for arrangement for re-shipment is made in respect of all the 52 cases in suit and this was done under the instructions of or at the instance of the plaintiff.

22. Then comes the letter of the 13th January, 1942 Exhibit C page 35. . from the defendant No. 2 to the agent of the defendant bank in Calcutta, which has been mentioned in paragraph 8 of the plaint. The defendant No. 2 is replying to the letter of the 10th January, 1942 with reference to all the 52 cases. The relevant portions of the letter runs as follows:

'We......note that you wish our RangoonAgents to obtain the shipping documents from your Rangoon Office to enable them to make necessary arrangements for the re-shipment of the above consignments to Calcutta. Owing to the present unsettled condition, we regret our inability to handle this transaction unless a deposit sufficient to cover the return Steamer freight and wharfage charges is received by us and we shall be glad if you will send us a cheque for Rs. 600/- at your early convenience. We shall advise our Rangoon agents accordingly on hearing from you.'

23. It is to be observed that this letter of the 13th January, 1942 deals with the entire lot of 52 cases. The defendant No. 2 is agreeing to arrange for re-shipment through its agents in Rangoon provided that a deposit of Rs. 600/- is made. This letter puts an end to the argument advanced on behalf of the defendant No. 2 that the agreement if any to re-ship the goods was made between thedefendant bank and Messrs. Mackinon Mackenzie Burma. Ltd. or that the defendant No. 2 merely requested its agents in Rangoon to re-ship.

24. Then on the 14th January, 1942 the defendant bank in Calcutta wrote to the defendant No. 2 enclosing a cheque for Rs. 600/-: Exhibit C page 58. It is stated in this letter that this amount is to be refunded if the Rangoon branch of the bank had already re-shipped the goods. The fact of this payment of Rs. 600/- has been pleaded in paragraph 9 of the plaint. In paragraph 12 it has been alleged that out of the sum of Rs. 600/-, the defendant No. 2 retained Rs, 428/5/- for their charges and sent back the balance thereof to the defendant bank. Then there is the letter of the defendant No. 2 to Mackinon Mackenzie and Co., Burma. Ltd. with regard to all the 52 cases dated the 15th January, 1942 Exhibit C page 39. which is as follows:

'We have been requested by the agent, Indian Bank Ltd., Calcutta, to ask you to arrange re-shipment of the above goods to this port. They have already advised their Rangoon branch at 636, Merchant Street, to hand over the documents to you. Please get in touch with them and arrange for reshipment of the above packages covering them against War Risk at the first opportunity. Please send your bill of charges for collection here.'

25. It is necessary at this stage to note the provisions of Sections 194 and 195 of the Indian Contract Act which run thus:

'Section 194': Where an agent, holding an express or implied authority to make another person to act for the principal in the business of the agency has named another person accordingly, such person is not a sub-agent but an agent of the principal for such part of the business of the agency aa is entrusted to him.'

'Section 195: In selecting such an agent for his principal, an agent is bound to exercise the same amount of discretion as a man of ordinary prudence would exercise in his own case; and, if he does this he is not responsible to the principal for the acts or negligence of the agent so elected.'

26. In Chowdhury T. C. and Bros. v. Girindra Mohan Neogi : AIR1930Cal10 . N purchased from a firm C at Calcutta a quantity of corrugated iron sheets and paid a sum of Rs. 250/- in part payment of the price. N instructed the firm to send the goods to Khulna and collect the balance of the purchase money through the Khulna Union Bank. The firm C thereupon sent the goods to Khulna and directed the Railway Receipt, their bill and demand draft with a covering letter to the National Bank of India, their bankers at Calcutta, instructing them to collect the bills through the bank at Khulna. Contrary to instructions, the Khulna Bank made over the goods to N. N delayed payment and later offered to pay by instalments. The firm C brought a suit to recover the balance from the National Bank of India. It was held that the Khulna Union Bank was the agent of the firm C for the work directed to be done at Khulna, and the National Bank was merely the conduit pipe through which the firm communicated their instructions to the Khulna Union Bank. The bank atKhulna was not the sub-agent of the National Bank ot India.

27. At page 14 of the Report, Page J., observed as follows:

'Now, it is common ground that the defendant Bank did appoint the Khulna bank to carry out that part of the collection which was to take place at Khulna but the question to be decided is whether the defendant Bank appointed the Khulna Bank so as to act as the sub-agent of the defendant bank or as the substituted agent of the plaintiffs. The issue depends upon whether the defendant bank on behalf of the plaintiffs and the Khulna bank agreed that the Khulna bank should act at Khulna as the plaintiff's agent for the purpose of collecting the bills or, in other words, whether the defendant bank created privity of contract between the plaintiffs and the Khulna bank. In my opinion, that is the true test to determine whether the person appointed by an agent authorised in that behalf to perform part of the business of the agency is a substituted agent of the principal or the sub-agent of the agent, and the test to be applied is the same whether the case falls within Section 194 or whether, as in the present case, the person so appointed is the nominee of the principal although there is a difference in the obligation undertaken by the agent, for Section 195 applies to a case falling within Section 194, while in cases where the substituted agent is the nominee of the principal, the agent is not concerned with the character or efficiency of the person so appointed, and his obligation quoad the part of the business of the agency entrusted to the substituted agent ceases if and so soon as privity of contract has been created between the substituted agent and the principal. Now, applying this test to the facts of the present case, I am of opinion, that, while the letters and telegrams to the Khulna bank were sent by the defendant bank, the mandates therein contained came from the plaintiffs. As I apprehend the facts, in endeavouring to carry out the collection of the bills at Khulna, the Khulna bank was not acting under the control of the defendant bank, for, so far as the collection at Khulna was concerned, the defendant bank was acting under the directions of the plaintiffs who throughout took charge of the transaction. The defendant bank, in my opinion, was merely the conduit pipe through which the plaintiffs communicated their instructions to the Khulna bank, and, inasmuch as the defendant bank invariably, I think, forwarded to the Khulna bank the communications which they received from the plaintiffs, it is clear that the Khulna bank was fully aware that the instructions which the defendant bank forwarded to them proceeded from the plaintiffs, and not from the defendant bank.'

28. In Halsbury's Laws of England, 3rd Edition at page 172, Article 444, is as follows:

'There is as a general rule no privity of contract between the principal and a sub-agent, the sub-agent being liable only to his employer, the agent. The exception is where the principal was a party to the appointment of the sub-agent, or has subsequently adopted his acts, and it was the intention of the parties that privity of contract should be established between them.'

29. In the case before me it appears that by the letter of the 7th January, 1942 addressed to the plaintiff the defendant No. 2 offered to re-ship 34 cases on receipt of a deposit of Rs. 400/- and certain documents. This letter ot the 7th January, 1942 was handed over by the plaintiff to the defendant bank for further action. Thereupon the defendant bank on the 10th January, 1942 wrote to the defendant No. 2 requesting the defendant No. 2, to arrange for re-shipment through its agent at Rangoon. Similar instructions were also given by the defendant No. 1 to its branch office at Rangoon. By letter dated the 13th January, 1942 the defendant No. 2 agreed to re-ship the goods through its Rangoon Agents upon a deposit of Rs. 600/- being made. I have already said that the defendant bank's letter of the 10th January, 1942 was in respect of 52 cases being the subject-matter of the suit. On the 14th January, 1942 the defendant bank paid to the defendant No, 2 the said sum of Rs. 600/- out of which a sum of Rs. 428/5/- was retained by the defendant No. 2. On the 15th January, 1942 the defendant No. 2 communicated to its Rangoon Agent instructions for re-shipment.

30. This is a case, therefore, in which the defendant No. 2 was the nominee of the plaintiff. The plaintiff was a party to the appointment of the defendant No. 2 and it was the intention of the parties as can be gathered from the correspondence that privity of contract should be established between the plaintiff and the defendant No. 2. Such a privity was, in my opinion, created between the substituted agent and the principal in the instant case. The defendant No. 1 therefore is not concerned with the character or efficiency of the defen-dent No. 2 or any negligence on its part. The correspondence I have relied on and the factum of payment of the sum of Rs. 600/- by the defendant No. 1 to the defendant No. 2 have been set out in paragraphs 4 to 9 of the plaint. In paragraph 11 it is stated that the defendant Mackinon Mackenzie and Co. at Calcutta agreed in the premises with the plaintiff that they would arrange for immediate re-shipment of the goods on receipt of the documents relating thereto.

31. It is true that prior to the correspondence I have referred to there were certain negotiations between the defendant bank and Mackinon Mackenzie Burma. Ltd. On the 8th December, 1941 the plaintiff wrote to the Manager of the defendant bank in Calcutta with regard to OBC Nos. 14 and 39 requesting the bank to instruct its Rangoon Office by cable to re-ship these consignments incase the drawees did not pay against further presentation of the bills Exhibit C page 2. . A telegram was sent to this effect by the Agent of the defendant bank in Calcutta to its Rangoon Office on the same date Ext. C page 3. . Then on the 16th December, 1941 the plaintiff wrote to the defendant bank again that it had not heard about re-shipment of goods covered by OBC Nos. 14 and 39. The plaintiff requested the bank to remind its Rangoon Office by a cable. The same instruction was communicated with respect to another outstanding OBC. The plaintiff agreed to pay the costs of the cable Ext. C pages 3 and 4. . Upto this point of time Mackinon Mackenzie Burma. Ltd. did not come into the picture. On the 17th December,1941 the Rangoon Office of the defendant bank wrote to the Burma, company for arranging tokeep 28 cases of cotton hosieries in the bondedwarehouse and re-ship them to Calcutta by theearliest boat. The Rangoon Office advised the Burma Co., to send its bill Ext. C page 6. . By letter dated the 2nd January, 1942 the Burma Co. informed the agent of the Indian Bank at Rangoon regarding 34 cases that re-shipment would not be permitted by the Customs authorites without an export licence. The Burma Co. was arranging in the meantime to bond the goods Ext. C page 9. . From these two letters exchanged between the Rangoon Office of the Indian bank and the Burma Co. no privity was established with the plaintiff. Indeed on the 5th January, 1942 the defendant No. 2 writes to the plaintiff that it has been advised by its Rangoon agents' office that 28 cases havebeen lying undelivered at Rangoon and are incurring demurrages. The plaintiff was asked to request the consignees to take early delivery and also to inform the defendant No. 2 of the names and addresses of the consignees to enable the Rangoon agents to communicate with them. The plaintiff was also asked to advise the defendant No. 2 regarding disposal of the goods Ext. C page 15. . This letter shows that there had not yet been a concluded agreement between the Burma Co. and the Rangoon branch of the Indian bank regarding reshipment of the goods. There was no such agreement with the plaintiff either. By letter dated the6th January, 1942 the plaintiff requested the defendant No. 2 to ask its agents at Rangoon to re-ship 34 cases to Calcutta as the consignee had refused to take delivery. All charges would be paid by the plaintiff in Calcutta: Ext. C page 17. This is the first request by the plaintiff to the defendant No. 2. On the 7th January, 1942 with reference to 34 cases the defendant No. 2 makes a counteroffer to the plaintiff as follows:

'We shall be pleased to have your above consignment re-shipped from Rangoon on your sending us the following documents together with a depositof Rs. 400/-

1. Original Bill of Lading duly endorsed by you.

2. Invoices.

Kindly also let us know whether you require the consignment to be insured against war risks and if so, kindly state the amount it should be insured for.' Ext. C. page 19.

This counter-offer of the defendant No. 2 was not apparently accepted by the plaintiff. On the 10th January, 1942 the plaintiff wrote to the defendant bank in Calcutta enclosing a copy of the letter of the defendant No. 2 dated the 7th January, 1942. The plaintiff gave instructions to the defendant bank concerning all the 52 cases in suit. The instructions were as follows:

'In order to expedite re-shipment of the goodswe shall thank you to kindly instruct your Rangoon Office to hand over the required documents to Mackinon Mackenzie and Co., Rangoon in case the former has not been able to arrange re-shipment so far. Kindly also write a letter to the Shipping Company informing them that the documents are with your Rangoon Office and that you have givenyour instructions to your brancn as above. Vide Ext. C page 27.'

32. Thereafter the defendant bank took up the matter and the correspondence I have already referred to had started leading to the appointment of the defendant No. 2 as a substituted agent for 52 cases for arranging re-shipment of the goods upon receipt of documents. The defendant bank became an agent of the plaintiff for handing over the documents only and through the conduit pipe of the defendant bank a privity of contract was established between the plaintiff and the defendant No. 2 as substituted agent for purposes of arranging reshipment.

33. Mr. Ginwalla, learned counsel for the defendant No. 2 has contended that an agent haa been defined in Section 182 of the Indian Contract Act as a person employed to do any act for another and to represent another in dealings with third persons. The person for whom such act is done or who is so represented, is called the 'principal'. According to him in paragraph 11 of the plaint a direct agreement between the plaintiff and the defendant No. 2 has been pleaded and not an agreement of agency. In Trojan and Co. v. Nagappa : [1953]4SCR789 it has been observed that the decision of a case cannot be based on grounds outside the pleadings of the parties and it is the case pleaded that has to be found. I should observe that in Kedarlal v. Hari Lal : [1952]1SCR179 it is stated that the Court would be slow to throw out a claim on a mere technicality of pleading when the substance of thing is there and no prejudice is caused to the other side however clumsily or inartistically the plaint may be worded. In any event, it is always open to a Court to give a plaintiff such general or other relief as it deems just to the same extent as if it had been asked for, provided that occasions no prejudice to the other side beyond what can be compensated for in costs. I have said that in paragraphs 4 to 9 of the plaint the relevant correspondence has been mentioned. In paragraph 11 an agreement is pleaded between the plaintiff and the defendant No. 2 whereby the defendant No. 2 undertook to arrange for immediate re-shipment of the goods in suit on receipt of the relevant documents relating thereto. The expression 'substituted agent' has not been used in the plaint. But the substance of the thing is there, and I do not see that any prejudice would be caused to the defendant No. 2 if I allowed the plaintiffs claim on the basis that the defendant No. 2 was in fact and in aw appointed a substituted agent of the plaintiff. I respectfully agree with the observations in Abdul Latiff v. Gopeswar : AIR1933Cal204 that whatever might have been the words used in the pleadings, the relationship between the parties was to be determined upon the real character of the contract between them. Mr. Ginwalla has submitted that the letter of the 15th January, 1942 Ext. C page 39. by which the defendant No. 2 asked the Burma Co. to get in touch with the Rangoon Office of the Indian Bank for the documents relating to the goods and to arrange for reshipment of the goods to Calcutta has not been mentioned in the plaint at all. This letter in my opinion is not relevant for purposes of the privily of contract that was created between the plaintiffand the defendant No. 2. Mr. Ginwalla has also urged that there is no issue on substituted agency. Issue No. 2 raised on behalf of the defendant No. 2 is as follows;

'Did the defendant No. 2 agree with the plaintiff that it would arrange for the immediate re-shipment of the goods on receipt of the documents relating thereto as alleged in paragraphs 4, 8, 11 and 12 of the plaint.'

34. I agree with Mr. Ginwalla that there was no such agreement as alleged in paragraph 4 of the plaint. But in paragraphs 8, 11 and 12 the allegations are as follows:

'8. By their letter to the defendant Indian Bank Ltd., dated the 13th January, 1942 the defendant Mackinon Mackenzie and Co. undertook to arrange for re-shipment of the said goods immediately on receipt of a deposit of Rs. 600/-.

11. In the said premises the plaintiff also states that the defendant Mackinon Mackenzie and Co. at Calcutta within the said Jurisdiction agreed with the plaintiff that they would arrange for the immediate re-shipment of the goods on receipt of the documents relating thereto.

12. The defendant Mackinon Mackenzie and Co. retained the sum of Rs. 428/5/- out of the said deposit of Rs. 600/- tor their alleged charges in the matter and remitted the balance sum of Rs. 171/11/- to the defendant Indian Bank Ltd.'

35. In these circumstances it seems to me that issue No. 2 raised by learned counsel for the defendant No. 2 is wide enough to cover the case of a substituted agency urged by Mr. Bose in his concluding arguments.

36. The next point that arises for consideration is that in paragraph 1 of the written statement of the defendant No. 2 it has been denied that at any material time this defendant had a branch office at Rangoon. On the basis of this allegation issue No. 1 has been raised on behalf of the defendant No. 2. Mr. Ginwalla has contended that B.I.S.N. Co. Ltd. is the principal both of Mackinoo Mackenzie and Co., the Calcutta firm and Mackinon Mackenzie Burma. Ltd. of Rangoon. The letters dated the 7th January, 1942 Ext. 05. and the 13th January, 1942 Ext. 06. from the Calcutta firm to the plaintiff: and the Calcutta firm to the agent of the defendant bank in Calcutta respectively, the contents whereof have been noted above have both been addressed in the letter head of the Calcutta firm as Managing Agents inter alia of B.I.S.N. Co. Ltd. Upon consideration of the correspondence that passed between the parties, as a whole, it would appear that there was no contract between the plaintiff and Mackinon Mackenzie and Co. of Calcutta. The contract, if any, was between the defendant bank and Mackinon Mackenzie Burma. Ltd. The Burma Co. may be an agent of the Calcutta firm for other purposes. But it was not an agent in respect of the contract between it and the defendant bank. Even if a contract be spelt out of the correspondence between the plaintiff and the defendant No. 2 there is no contract under which the Calcutta firm was to re-ship the goods. The contract was to ask the Burma Co. to re-ship. Learned counsel has drawn my attention to the oral anddocumentary evidence in this suit in support of his contentions. He has said that the correspondence between the Calcutta firm and the plaintiff started on the 5th January, 1942, but prior to that the Burma Co. had already agreed to re-ship 44 cases at the request of the Rangoon branch of the defendant No. 1 if export licence was made available to it There was no further scope for any agreement between the Calcutta firm and the plaintiff. The defendant No. 2 therefore came into the transaction as Managing Agent of B.I.S.N. Co. Ltd. In the correspondence the Burma Co. is also treated as an agent in Burma of B.I.S.N. Co. Od. Meanwhile the plaintiff had asked the defendant bank to re-ship the goods. The defendant bank asked its Rangoon branch to re-ship in its own name or store or insure the goods mixing them up with the goods of other customers. The Rangoon branch was acting on its own account pursuant to instructions of its Calcutta Office and entered into an agreement with the Burma Co. with regard to 44 cases. On the 31st January, 1942 the Rangoon branch sent to the Burma Co. the export licence together with bills of lading in respect of 52 cases vide Ext. C. page 20. . Malcolm Horton Lacey who at the material time was an assistant of the Burma Co., was examined de bene esse before McNair, J. He has stated in his evidence that until the 31st January, 1942 no documents were sent to the Burma Co. with regard to the 8 cases. The effect of his evidence is that the Burma Co. retained these documents questions 89 to 91. . That is how according to Mr. Ginwalla the Burma Co. accepted liability for all the 52 cases. Learned counsel also drew my attention to the letter dated the 22nd May, 1943 Ext. C page 145. from G. Bagaria, solicitor to Mackinon Mackenzie and Co., Calcutta. It is stated in this letter that the plaintiff had entrusted to the defendant bank the 52 cases in suit for re-shipping the same to Calcutta from Rangoon. The defendant bank in its turn appointed Mackinon Mackenzie and Co. Calcutta to do so. Then it is said that there has been a lot of correspondence between various parties including the Burma Co., which is described as the Calcutta firm's Rangoon representative. Mr. Ginwalla has submitted that the plaintiffs confusion can be noted in this letter, the confusion that the Calcutta firm and the Burma Co. are the same. But the sequence of events has been correctly represented in this letter. The sequence is that the plaintiff instructed the defendant bank and the defendant bank arranged with the Burma Co. In other words the Burma Co. was an independent entity.

37. I have already discussed above the effect of the correspondence with the Burma Co. at the earlier stage, and have expressed the opinion that ultimately the defendant No. 2 was appointed the substituted agent of the plaintiff for purposes of re-shipment of the 52 cases in suit. I have to add that in paragraph 7 of the written statement of the defendant No. 2 it is alleged that the agreement if any, to re-ship the goods was made between the defendant bank and the agent of the defendant No. 2 Messrs. Mackinon Mackenzie Burma. Ltd. In paragraph 8 it is stated that the defendant No. 2 retained Rs. 428/5/- out of the deposit of Rs. 600/-made by the defendant Bank. It retained theamount for the charges of its and agents'. In paragraph 10 it is stated inter alia that until their evacuation from Burma Messrs. Mackinon Mackenzie and Co., Burma Ltd. were the agents of the defendant No. 2. At the request of the defendant bank made in such bank's letter to the defendant No. 2 dated the 10th January, 1942 and the 14th January, 1942 the defendant No. 2 requested its agents Messrs. Mackinon Mackenzie and Co., Burma. Ltd. to arrange to re-ship the goods in Calcutta. Inasmuch as no proper export licences were delivered to the said agents of the defendant No. 2, such agents could not re-ship the goods prior to their evacuation from Burma, which was effected on or about the 21st February, 1942. Then again in the correspondence that passed between the parties repeatedly the Burma Co. has been described as the Rangoon agents of the defendant No. 2. In the letter of the defendant No. 2 dated the 13th January, 1942 Ext. C page 35. for instance in which the offer to re-ship on receipt of a deposit of Rs. 600/- was made to the defendant bank's Calcutta Office it is stated inter alia as follows:

'We.........note that you wish our Rangoonagents to obtain shipping documents from your Rangoon Office to 'enable them to make necessary arrangements for the reshipment of the above consignments to Calcutta. Owing to the present unsettled condition, we regret our inability to handle this transaction unless a deposit sufficient to cover the return Steamer freight and wharfage charges is received by us and we shall be glad if you will send us a cheque for Rs. 600/- at your early convenience. We shall advise our Rangoon agents accordingly on hearing from you.'

38. On the 14th January, 1942, as I have said the defendant bank sent to the defendant No. 2 the sum of Rs. 600/- by cheque. Mr. Ginwalla has stated that by the letter of the 14th January, 1942 Ext. C page 38. the defendant bank did not unconditionally accept the offer of the defendant No. 2 contained in its letter of the 13th January, 1942. The defendant bank said in this letter that this deposit of Rs. 600/- was to be returned in case its Rangoon branch had in the meantime been able to re-ship the goods. There is some force in this contention of learned counsel but I find in paragraph 8 of the written statement of the defendant No. 2 the clear admission that it retained Rs. 428/5/-out of the deposit of Rs. 600/- being the charges of its Rangoon agents.

39. In the face of the repeated admissions of the defendant No. 2 in the correspondence as well as in its written statement that Mackinon Mackenzie and Co., Burma. Ltd., was the agent of the defendant No. 2 in Burma in respect of the transactions in suit I am unable to agree with Mr. Ginwalla that the Burma Co., was independent of the defendant No. 2 and accepted liability for 52 cases on its own.

40. Section 192, of the Indian Contra'ct Act provides that where a sub-agent is properly appointed the principal is, so far as regards third persons, represented by the sub-agent, and is bound by and responsible for its act, as if he were an agent originally appointed by the principal. The agent is responsible to the principal for the act of thesub-agent; the sub-agent is responsible for his acts to the agent, but not to the principal except in case of fraud or wilful wrong. The plaintiff in the instant case could not have filed a suit against the Burma Co. Even if it be held that negligence on the part of the sub-agent is a 'wilful wrong' the right of recourse to the sub-agent, does not exclude the principal's normal right of recourse to bis agent. In fact, the total effect of Section 192 is to give an option to the principal where a fraud or 'wilful wrong' is committed by the sub-agent: see Pollock and Mulla on Indian Contract and Specific Relief Acts, 8th Edition, page 640.

41. It has been urged by Mr. Ginwalla that the defendant No. 2 is the agent of B.I.S.N. Co. Ltd. and the plaintiff has no cause of action against this defendant. The letter of the defendant No. 2 dated the 5th January, 1942 Ext. C page 15. is in the letter-head of B.I.S.N. Co. Ltd. In this letter the defendant No. 2 informed the plaintiff that it was advised by its Rangoon agent's office that 34 cases were lying undelivered at Rangoon and were incurring demurrage. The plaintiff is asked in this letter to request the consignees to take early delivery and also to intimate their names and addresses to the defendant No. 2 to enable its agent to communicate with the consignees. Alternatively, the plaintiff was to advise the defendant No. 2 regarding the disposal of the goods. Advisedly the letter-head of B.I.S.N. Co. Ltd. was used because it was that company which carried the goods from Calcutta to Rangoon. But the subsequent letter-heads are those of Mackinon Mackenzie and Co. Indeed the vital letters dated the 7th January, 1942 Ext. 05. and the 13th January, 1942 Ext. 06. are both in the letter heads of Mackinon Mackenzie and Co., 16, Strand Road, Calcutta. In this letter-head the defendant No. 2 is described as Managing Agent of 6 limited companies including B.I.S.N. Co. Ltd. and as agent for 10 other different concerns. In these circumstances I am unable to agree with Mr. Ginwalla that the defendant No. 2 agreed with the plaintiff to arrange for re-shipment of the goods as an agent of B.I.S.N. Co. Ltd.

42. An alternative argument was advanced by Mr. Bose on the basis of Sections 230 and 233 of the Indian Contract Act. Section 230 provides that in the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of the principal, nor is he personally bound by them. Such a contract shall be presumed to exist, inter alia, where the principal, though disclosed, cannot be sued. Section 233 provides that in cases where the agent is personally liable, a person dealing with him may hold either him or his principal, or both of them, liable. Mr. Boss's contention is that assuming that B.I.S.N. Company Limited was the principal, it was a foreign Company. A company having its registered Office in England but carrying on business in India will be deemed to be resident in England for the purposes of Section 230. Where a contract, therefore, is entered into by the 'Managing Agents' of such a company in India, it can be enforced against the agents personally, unless the foreign company is in writing made the contracting party and the contract is made directly in its name: Pollock and Mulla on Indian Contract and Specific Relief Actspages 701 to 702. I do not propose to entertain this alternative argument of the learned counsel lor the plaintiff in the absence of any indication in the plaint that the defendant No. 2 entered into the contract on behalf of a foreign principal. From the documentary evidence on record however I am of opinion that the defendant No. 2 was not an agent at all. The contract was between the plaintiff and the defendant No. 2.

43. I shall now discuss whether the defendant No. 2 took, possession of the goods and, if so, failed to take proper care thereof. 1 have said that in my view at the material time the Burma Company was acting as the agent of the defendant No. 2. Malcolm Lacey has said in his evidence that 44 cases were bonded by the Burma Company prior to the 31st January, 1942. The documents relating to the remaining 8 cases were made over by the Rangoon Branch of the defendant bank on the 31st January, 1942. These 8 cases were in Selo Pagoda Wharf and not in any bonded warehouse. The reason why these packages were not bonded was that Lacey had invited the Assistant Collector of Customs to discuss with him the situation regard ing labour and the useless amount of time involved in bonding the goods. He asked the Assistant Collector to consider the Burma Company's application for re-shipment of cargo of such a nature and came to learn that the application would be considered upon receipt of the export licence. He admits that export licences along with bills of lading for 52 cases were brought to him on the 3Ist of January or the 2nd of February, 1942. According to him the Bills of lading were retained and the export licence was returned for correction to the agent of the defendant bank's Rangoon Office who brought them Questions 86 to 92 and 261 to 268. . I shall discuss a little later if Lacey's evidence on return of the export licence can be accepted. For my present purpose it is enough to say that he has admitted that bills of lading in respect of 52 cases were accepted and retained by him. Maha-deva Ramamurthy who was the agent of the Rangoon branch of the defendant bank at the material time was examined on commission. He has stated that the 8 cases were not bonded as he expected re-shipment. He had the goods insured questions 182 to 190. . It appears therefore that on the 31st January, 1942 or at any rate on the 2nd February, 1942 the Burma Company was in possession of the relevant documents of title relating to the 52 cases in suit. Possession of the documents meant in the circumstances of this case constructive possession of the goods. And in the context of the present case failure to arrange for re-shipment amounted to failure to take proper care of the goods. This observation however is subject to my decision on Issue No. 6 raised on behalf of the defendant No. 2 as to whether the plaintiff or its agent failed to provide for a proper export licence. It would be convenient to discuss this point at this stage. Indeed this is the most important issue in this suit and I have to analyse the relevant oral and documentary evidence on this point in details.

44. I have already indicated that Lacey's case is that on or about the 31st January, 1942 an agent of the Indian Bank at Rangoon came to him with a letter addressed by the Rangoon branch tothe Burma Company dated the 31st January, 1942 Ex. 'O1'. . The opening paragraph of this letter is as follows:

'We herein enclose the export licence granted to us by the Controller of War Supplies and Economic Welfare together with relative bills of lading to be re-booked to Bombay and Calcutta.'

45. Lacey checked the export licence with the bills of lading and discovered certain discrepancies. He retained the bills of lading but returned the export licence to the bank's agent for necessary correction. He has made an endorsement in pencil on the second page of this letter as follows:

'Export licence returned to the Indian Bank Limited for alteration of certain particulars.'

46. The export licence according to Lacey was never returned to the Burma Company by the bank and as such it was impossible to re-ship the goods before evacuation: Vide evidence of Lacey, questions 39 to 53 and 74-75. .

47. On the 2nd February, 1942 the agent ot the Rangoon Branch wrote to the Calcutta Office of the defendant bank that the export licence had been received on that day Ex. 'C' page 45. . It had been handed over to the Burma Company with instructions to re-book the goods to Calcutta, Mahadeva Ramamurthy says in his evidence that he forwarded the export licence to Mackinon Mackenzie and Co., Burma. Limited. Question 41. . In question 42 he has stated that the licence was never returned to the Indian Bank after it was handed over to the Burma Company on the 31st January, 1942. He wrote to the Calcutta Office about this fact on the 2nd February, 1942 Question 43. . His attention was drawn to both the letters dated the 31st January, 1942 and the 2nd February, 1942 Ex. 'C' pages 43 and 45. . His explanation is that he had typed the letter dated the 31st January, 1942 addressed to the Burma Company on that day. The letter was despatched on the 2nd February. 1942 as 31st January, 1942 was a Saturday. The letter was sent by a peon and no clerk of the bank had accompanied him. The peon book was left in Burma at the time of evacuation Questions 53 to 57. . In this view of the matter the statement in the letter of the 2nd February Ex. 'C' page 45. that the licence had been received on that day is not correct. It seems to me on the evidence that the bank got the licence on or about the 31st January and delivered it to the Burma Company on the 2nd February, 1942. The last boat sailed from Burma on the 19th February, 1942 And Lacey has stated in question 63 that if export licence had been received on the 7th February re-shipment could possibly have been effected.

48. I have now to examine whether any reliance can be placed on the pencil writing of Lacey on the letter of the 3Ist January, 1942.

61. After discussing evidence Paras 49 to 60. His Lordship proceeded. . So far as the pencil writing on the letter of the 3ist January, 1942 Ex'O1'. is concerned, Mr. Bose, learned counsel for the plaintiff, has commented that it is impossible to detect the age of a pencil writing. Persons who want to interpolate documents often resort' To pencilwritings. I think there is some force in this con-tention of Mr. Bose. In any event I am of opinion that the pencil writing of Lacey on Ex. 'Ol' is a subsequent interpolation. I hold therefore that the plaintiff or its agents did not fail to provide the Burma Company the agent of the defendant No. 2 for purposes of re-shipment with a proper Export licence in respect of the goods in suit. That is how I answer Issue No. 6 raised on behalf of the defendant No. 2.

62. 1 shall now consider if the agreement between the plaintiff and the defendant No. 2 for arranging re-shipment of the goods was discharged or the peformance thereof was frustrated or rendered impossible by the failure of the plaintiff or its agents to provide for a proper Export licence or by enemy action or by orders for evacuation from Burma. I have held that there was no failure on the part of the plaintiff or its agents to provide for a proper Export licence. The licence was received by the Burma Company as an agent of the defendant No. 2, it appears from the evidence on record, on the 2nd February, 1942. Lacey has said in question 213 that the Burma Company had shipped hundred tons of rubber on the 19th Feburary, 1942. On this evidence of Lacey it would be reasonable to conclude that the Burma Company after receiving the export licence on the 2nd February, 1942 had sufficient tune to arrange for reshipment of the goods. Indeed Lacey has said in question 63 that if Export licence had been received on the 7th February, 1942 re-shipment could possibly have been effected. In the premises I hold that the agreement between the plaintiff and the defendant No. 2 for arranging re-shipment was not discharged nor was its performance frustrated or rendered impossible either by failure on the part of the plaintiff or its agents to provide for a proper Export licence or by enemy action or by orders for evacuation from Burma. It should be remembered that the parties entered into the contract in the unsettled conditions created by the Second World War. In view of the international situation the agent of the defendant No. 2 should have foreseen the consequences of the delay in re-shipment of the goods: vide Monarch Steamship Co. Ltd. v. Karishamns Oljefabriker, 1949. AC 196. The delay in re-shipping cannot be covered up by the plea of frustration. If at all, it is a case of self-induced frustration.

63. Coming now to the question of damages suffered by the plaintiff Mr. Bose has argued that under Section 212 of the Indian Contract Act an agent is always bound to act with reasonable diligence and to use such skill as he possesses; and to make compensation to his principal in respect of the direct consequences of his own neglect, want of skill or misconduct, but not in respect of loss or damage which are indirectly or remotely caused by such neglect, want of skill or misconduct. In the instant case if the defendant No. 2 had not left the goods behind in Rangoon the loss would not have occurred. The direct cause of the loss was the failure to re-ship. The defendant No. 2 knew how the war situation was developing; the defendant No. 2 also knew that failure to re-Ship would have the result of the goods falling into the hands of the enemy; the failure on the part of the defen-dant No. 2 to re-ship therefore is the direct cause of the loss by enemy action. In its letter to the International Bank of India Limited dated the 19th May, 1942 Ex. 'C' page 80. the defendant No. 2 has stated that.

'owing to the occupation of Rangoon by the enemy the goods and documents must be considered as lost'

The proximate cause of this loss is the leaving of the goods at Rangoon without re-shipment and not the arrival of the enemy. The probability of such arrival was in the contemplation of the parties. The loss of the goods was a direct consequence of the neglect of the defendant No. 2 to arrange for re-shipment and the defendant No. 2 has to make compensation for it.

64. Where goods are entirely destroyed or lost by a common carrier, the measure of damages recoverable against the carrier is prima facie the value of the property lost. The owner is entitled to the value of goods dealt in by way of trade at the place to which they were consigned. If there is a market for that description of goods at such place, the damages are the market value of the goods there at the time when they ought to have been delivered; but if there is no market, then the damages are the cost price of the goods, together with the expenses of carriage, and such profits as might reasonably be expected to be made in the ordinary course of business provided that the carrier had notice that the goods were bought for resale. If the consignor has declared the value of the goods before carriage, he is bound by such declaration, and is estopped from giving evidence that the goods have any higher value: Halsbury's Laws of England, 3rd Edition, Vol. 4, page 151, Article 399. In an appropriate case it may be proper for the seller to regard a distant market as an available market, subject to proper allowance for the additional cost of carriage; Mayne on Damages, 11th Edition, page 183.

65. On these authorities Mr. Bose contends that if there was no available market at Rangoon, the plaintiff is entitled to rely on a distant market. In any, event the goods were being booked for Calcutta and the loss that the plaintiff has suffered is the Calcutta price.

66. The fact that damages are difficult to estimate and cannot be assessed with certainty or precision does not relieve the wrong-doer of the necessity of paying damages for his breach of duty, and is no ground for awarding only nominal damages. A distinction must be drawn, however, between cases where the difficulties are due to uncertainty as to the causation of damage, where questions of remoteness arise, and cases where they are due to the fact that assessment of damages cannot be made with any mathematical accuracy. Lack of relevant evidence may make it impossible to assess damages at all, as where the extent of the loss is dependent upon too many contingencies, and in such cases, where the liability is established, nominal damages only may be awarded. Where it is established, however, that damage has been incurred for which a defendant should be held liable the plaintiff may be accorded the benefit of every reasonable presumption as to the loss suffered. Thus the Court,or a jury doing the best that can be done with insufficient material, may have to form conclusions on matters on which there is no evidence, and to make allowance for contingencies even to the extent of making a pure guess; this is of common occurrence in claims made, for example, in respect of pain and suffering, loss of expectation of life, and the loss of a chance of winning a price; Halsbury's Laws of England, 3rd Edition, Vol. 11, page 226, Article 394.

67. Kasturchand, a partner of the plaintiff firm has deposed in this suit. He says that the invoices correctly describe the number of the goods, their rates and values. In November, 1941 the goods used to be sold at those rates. In January, 1942 the rates did not go up. But in February/March, 1942 they went on increasing. Exhibit 'D' consists of carbon copies of the invoices which were shown to this witness. The total price of all the goods shown in these invoices is Rs. 13,046/13/-. In January the rates were approximately the same. After January they started rising. Kasturchand tried to find from other dealers the prices of hosiery goods similar in kind in 1941 and early in 1942. But since 17 or 18 years have elapsed no records were available from such dealers. The rates at which the goods in suit were sold would appear in the invoices. They were the market prices of these goods in November, 1941. Kasturchand cannot say at what price these goods had been bought by the plaintiff. They could be found in the Jama Book but it was not available. He does not remember whether this book was disclosed at the time the suit was instituted. In the prices given in the invoices reasonable profit of the plaintiff has been included. Kasturchand does not know that was the price of the goods at Burma at the end of December, 1941 or in January or the beginning of February 1942. The goods in suit consisted of goods manufactured by Mills in Calcutta, by Mills in Southern India as well as goods manufactured by the plaintiff. He then said that all the goods that were despatched to Burma were purchased by the plaintiff Qs. 21. 24 to 30, 66 to 70, 78, 113 to 120, 260 to 272. .

68. It is evident that Kasturchand has failed to prove the prices at which the goods were purchased by the plaintiff. But Mr. Bose contends that it was not suggested to him in cross-examination that the reasonable profit he has spoken of would have wiped out the entire sum of Rs. 13,046/13/-. It was not also suggested that the prices mentioned in the invoices were not the market prices in Calcutta. The market price always includes profit and in the absence of cross-examination it should be held that the market price has been admitted by the defendant No. 2. In paragraph 21 of the Written Statement of the defendant No. 1 the plaintiffs claim for Rs. 25,000/- has been denied. But it is stated that the total value of the goods as per Bills Nos. OBCS, 13, 14, 39 and 56 was Rs. 13046/ 13/-. Ramamurty has stated in question 21 that these goods were insured for Rs. 13,100/- though accurately they should have been insured for Rs. 13,046/13/-. In A. V. Joseph v. R. Shew Bux, 23 Cal WN 601: AIR 1918 PC 149. it was agreed under a C. I. F. Contract between S and J that if S failed to take delivery of certain timber in time, J.was to dispose of the same locally and S was to pay him the difference in price. S failed to take delivery. Thereupon, J. sold the timber up by auction in a regular manner and sued for the difference. It was urged that I did not give clear evidence of the freight, the insurance, the loading, charges and certain port oc customs duties, which had to be deducted. It was held by the Privy Council that as S called no evidence on those points at all and there was no suggestion on his side that these expenses would have wiped out the difference, the Appellate Court in India was not justified in awarding to J. nominal damage of Re. 1/- only. Their Lordships of the Judicial Committee made certain deductions and assessed the damage at Rs. 18,502/- and a decree was passed accordingly. There was evidence in this case as to customs and loading charges as also the maximum rate of freight. The insurance charges their Lordships thought could be safely taken at 10/16ths per cent. The evidence which the plaintiff gave was that the total combined ordinary maritime risk and war risk--it being questionable whether he would have to pay the war risk -- came, in the following February, to 10/16ths per cent and, in a general way, he implied that this was the rate of insurance which, he thought was due at the tune. The Judicial Committee was of opinion that the evidence was not of the very best, and every presumption should be made against the plaintiff; if there is any range, the range should be taken against him; but the defendant called no evidence on these points at all, and the Board was entirely without trace of any suggestion on the defendant's behalf that these expenses could have wiped out the otherwise apparent great loss. The Board was of the opinion that there was an element of uncertainty which might have made it desirable that the matter should be sent back for enquiry, but neither counsel had pressed for that, and, their Lordships thought, very wisely, because the amount that could be taken off on a possible enquiry would bear a very small proportion to the expenses of such an enquiry. In these circumstances their Lordships, without dissent of counsel, had taken the matter into their own hands and had assessed the damage in the manner aforesaid.

69. In Rameswar Bazaz v. Sbyama Sundari Debi, AIR 1926 PC 37 there was a contract for the sale of lands containing valuable minerals and it was stipulated that if ever any dispute over title arose, with a Rajah, a third person, then the promisor would remain liable for the sale; he would give the promisee all necessary papers, etc., for the establishment of his title. If was held in the face of the clause it was impossible to construe the contract as one in which the promisor warranted the mineral as conveyed, and all that the vendee if the contract was implemented, was to get was the chance of either fighting the Rajah or by having secured the surface rights, being in a position to hamper the Rajah in letting to anyone else, and consequently compelling him to grant fair terms to the plaintiff himself. The Trial Judge found that there was a contract and a breach thereof and assessed the damages at Rs. 1,20,000/-, the calculation being on the figure of Rs. 200/- per bigha on 600 bighas, which he considered to be the size of thefield. On appeal the judgment was affirmed as to the contract and the breach but the damages were reduced to Rs. 5,000/- on the ground that there were no materials oil which to assess the figure found by the trial Judge. On the questionof the quantum ot damages the Judicial Committee upheld the Appellate Court. Their Lordships wereof the view that exact valuation of the lost chance was impossible, and the plaintiff had led no evidence to make approximate valuation easy. In the circumstances the Appellate Court acting as a Jury would have done, allowed Rs. 5,000/-. Their Lordships did not think it proper to interfere with this determination. There was no cross appeal in this case by the respondent as to the question of therebeing a contract.

70. Learned counsel for the plaintiff has placed strong reliance on these two decisions of the Privy Council. In 23 Cal WN 601: AIR 1918 PC 149. damages were assessed and awarded on insufficient or inadequate materials. In AIR 1926 PC 37 damages were awarded without any evidence. Mr. Bose also relied on the judgment of Sir Asutosh Mooker-jee in F. T. Kingslay v. Secy. of State for India, 36 Cal LJ 271: AIR, 1923 Cal 49. . In this case a jgrant entitled a licences to an exclusive right tocatch elephants within defined tracts and for a specified period. The learned Judge observed that though every breach of duty arising out of contract gives rise to an action for damages without proof of actual damage, the amount of damages recoverable was, as a general rule, governed by the extentof the actual damage sustained in consequence of the defendant's act. In cases admitting of proof of such damages, the amount must be established with reasonable certainty. But this does not mean that absolute certainty is required; nor, in all cases, is there a necessity for direct evidence as to the amount. Damages are not uncertain for the reason that the loss sustained is incapable of proof with the certainty of mathematical demonstration or is to some extent contingent and incapable of precise measurement.

71. Mr. Ginwalla, learned counsel for the defendant No. 2, relied on Section 73 of the Indian Contract Act and contended that in case of a breachof contract the party who suffered the breach wasentitled to compensation, inter alia, for any loss or damage caused to him which arose in the usualcourse of things. Loss of goods is not an item of damage in this sense for failure to put the goods on a certain vessel, A party which suffers a breach may also be entitled under Section 73 to compensation for loss or damages caused to him which the parties knew when they made the contract, to be likely to result from the breach. On the 14th January, 1942 when the contract is said to have been completed, it could not be said that the parties in Calcutta knew that if the goods were not shipped as soon as the Export licence was obtained, the goods would be lost. In fact, when the contractwas entered into there was no question of obtaining an Export licence.

72. Mr. Ginwalla also contended that the breach itself, if any, did not cause the loss of the goods. Rangoon fell to the Japanese forces and thatwas the cause of the loss.

73. I am unable to agree with his contentions. If an agent should knowingly deposit goods in an improper place, and a fire should accidentally take place Dy which they are destroyed, he will be responsible for the loss: for, although the loss is not me immediate and direct consequence of the negligence, but of the tire; yet it may be truly said, that it would not have occurred, except from such negligence. The negligence, then, was the occasion, although not strictly the cause, of the loss; and the loss may be fairly attributed to it. If a carrier --master of a ship should unnecessarily deviate from the proper course of the voyage, and the goods shipped should afterwards be injured by a tempest, or should be lost by capture or other peril, the shipper would be entitled to a full indemnity from the ship master and ship-owner. In these cases, although the misconduct or negligence of the agent is not the direct and immediate cause of the loss, yet it is held to be sufficiently proximate, to entitle the principal to recover for loss or damage; for, otherwise the principal would ordinarily be without remedy for such loss or damage; since tbe same objection would apply in almost all cases of this sort. The law disregards such subtleties and niceties, as to causes and possibilities, and it acts upon the intelligible ground, that, where there has been misconduct or negligence in the agent, all losses and damages occurring afterwards to which tbe property would not be exposed, but for such misconduct or negligence, are fairly attributable to it, as a sufficiently proximate cause, although not necessarily the immediate or nearest cause of the loss or damage. The doctrine, too, may be vindicated upon the broader ground of public policy, that no wrongdoer ought to be allowed to apportion or qualify his own wrong; and that, as a loss has actually happened, whilst his wrongful act was in operation and force, which is fairly attributable to his wrongful act, he ought not to be permitted to set up, as a defence, that there was a more immediate cause of the loss, acting upon the subject-matter at the same time, or a bare possibility of loss, if his wrongful act had not been done; See Story on Agency, 9th Edition, pages 260 to 262. It is essential to a cause of action that the act complained of should be the real or effective cause of the injury or loss sustained. Various phrases have been used in the older cases to indicate this requirement; the phrase now usually adopted is 'direct cause', although 'proximate cause' is still often used as its equivalent; Vide Mayne on Damages, 11th Edition, page 45.

74. Applying these principles to the facts of this case it seems to me that the loss of the goods was the direct or proximate cause of the neglect or failure of the agent of the defendant No. 2 to arrange for re-shipment of the goods from Rangoon to Calcutta after receiving the export licence and the documents relating to the goods on the 2nd February, 1942.

75. Mr. Mahadeb Hazra, learned counsel for the defendant No. 1, has urged that the damages suffered by the plaintiff have not been proved. In paragraph 17 of the plaint, a sum of Rs. 25,000/-has been claimed as the value of the goods which has not been proved, Kasturchand has said in his evidence that the value is a little over Rs. 13,000/-including reasonable profit of the plaintiff. If the damage was due to non-shipment the value of the goods in Calcutta at or about the date the ship would have reached Calcutta would be the value which the plaintiff can claim. But in tins case that value has not been proved. The oral evidence of Kasturchand in the absence of relevant books of account regarding market prices in different months should not be accepted.

76. Mr. Ginwalla for the defendant No. 2 has adopted the arguments of Mr. Hazra to a certain extent. He has relied on the decision of Chaiterjee, J. in G. A. Jolli v. Dominion of India, AIR 1949 Cal 380 tor the proposition that when goods are lost by the Railway and in consequence the plaintiff loses the profits which he could have earned, the value of the lost goods can be recovered, but not any profits in the absence of proper notice. Learned Counsel has stated further that if the Calcutta rate was higher than the Burma rate, the plaintiff can claim the difference but without knowing the Burma rate this difference cannot be assessed. Secondly, if it be held that goods were lost not due to the breach of contract to arrange re-shipment but due to enemy action, the plaintiff would recover the difference in cost that was necessary to engage some other agent for re-shipment as damages. Thirdly, if the goods were tost on account of the failure to arrange for re-shipment the plaintiff would recover the value of the goods at the destination, namely, Calcutta which means that he can recover the price, at which he could have bought the goods and not the price at which he could have sold.

77. I have, agreeing with the contentions of Mr. Bose, held that on the facts of this case the goods can be said to have been lost due to the neglect or failure of the defendant No. 2 to arrange for re-shipment of the goods from Rangoon to Calcutta. According to Mr. Hazra the plaintiff can claim in that event the value of the goods in Calcutta at or about the date the ship would have reached Calcutta. According to Mr. Ginwalla the plaintiff can recover the price at which it could have bought the goods at the relevant time. The plaintiff's witness Kasturchand has stated before me that the rates mentioned in the invoices were the rates at which these goods used to be sold by the plaintiff in November, 1941. The rates in January, 1942 were not higher but in February/March, 1942 they went on increasing due to the war. He has admitted that these rates include reasonable profits of the plaintiff. It is true that the plantiff should have proved the quantum of reasonable profit. I might have directed a reference to ascertain the quantum but that was not asked for, presumably in view of the expenses involved. In any event no useful purpose will be served by directing a reference. Kasturchand says his relevant books are no longer available and there is also no dealer who can depose about the rates to be enquired into after 17 or 18 years. But at the same time, in the absence of any evidence or suggestion in cross-examination to Kasturchand that the plaintiff's reasonable profit would wipe out the total sum of Rs. 13,046/13/-, it would not be just or fair to award to the plaintiff only nominal damages in this suit. Similar situations arose in the cases reported in 23 Cal WN601: AIR 1918 PC 149. and AIR 1926 PC 37. 1 find from tile invoices that certain expenses incurred by the plaintiff: on Dingi freight, insurance, freight, and empty cases and other sundry expenses for sending the goods from Calcutta to Rangoon, have been added to the invoice prices. After deducting these expenses the price of the goods comes to Rs. 12,327-11-0. This sum of Rs. 12,327-11-0 according to Kasturchand was the price at which these goods used to be sold in Calcutta by the plaintiff in November and December, 1941 and in January, 1942. From February/March, 1942 the prices went on increasing. The sum of Rs. 12,327-11-0 included 'reasonable' profit of the plaintiff. What this 'reasonable' profit was Kasturchand did not prove. Having regard to the desisions of the Judicial Committee reported in 23 Cal WN 601: AIR 1918 PC 149. and AIR 1926 PC 37 in similar circumstances, it may be safely assumed that the plaintiff's 'reasonable' profit could not have exceeded 331%. Mr. Bose submitted that a profit of more than 10 to 15% was not 'reasonable'. But since his client has adduced no evidence on the point I am inclined to fix the maximum at 33 1/3%. If this maximum profit be taken into account a sum of Rs. 4109-3-8 would have .to be deducted from Rs. 12,327/11/- and the price at which the plaintiff had purchased the goods comes to at least Rs. 8218-7-4. I will add to that Rs. 428/5/- which was retained by the defendant No. 2 as charges for re-shipment. The total sum, therefore, payable by the defendant No, 2 to the plaintiff comes to Rs. 8646-12-4. The measure of damages in an: action by a principal' against his agent for negligence or any other breach of duty by the agent in course, of the agency is the loss actually sustained by the principal, provided that it was the natural and probable consequence of the breach or such loss as in the particular circumstances the agent might reasonably have expected to result from such negligence or breach of duty: Bowstead on Agency, 11th Edition, page 111, Article 58. To my mind, on the facts of this case, the minimum amount of loss actually sustained by the plaintiff is the sum of Rs. 8646-12-4 for which the defendant No. 2 is liable.

78. Another point taken by Mr. Ginwalla is that the plaintiff had sold the goods to different persons in Rangoon. The property in the goods did not remain in the plaintiff and, as such, the plaintiff was not entitled to claim the price. There is neither any pleading nor any issue on this point. In any event under Section 110 of the Indian Evidence Act when the question is whether any person is owner of anything ot which he is shown to be iti possession, the burden of proving that he is not owner is on the person who affirms that he is not the owner. The evidence in this suit is that the Indian Bank was in possession of the goods as ar. agent of the plaintiff and documents relating thereto were not to be delivered to the purchasers in Rangoon till payments were made by them. Kasturchand in question 151 has admitted that the purchasers in Rangoon told the plaintiff about the quantity of the goods, the quality of the goods and the size of the goods and left it to the plaintiff to send them. The plaintiffs bills were sent to the Rangoon branch of the defendant bank for pro-sentation to the purchasers. Upon payments being effected by the purchasers they could obtain delivery of the goods. By letter dated the 8th December, 1941 to the Manager, Indian Bank, Calcutta, Ex. 'C' page 2. the plaintiff requested the Manager to instruct the Rangoon branch to present to the drawees OBC Nos. 14 and 39 once again and if the drawees did not pay, the consignments were to be re-shipped to Calcutta. There is a copy of a telegram to, this effect dated the 8th December, 1941 from the Agent of the defendant bank in Calcutta to the Indian Bank, Rangoon Ex. 'C' p. 3. . These documents show that the plaintiff reserved to itself the right of disposal of the goods until certain conditions were fulfilled.

79. Delivering the judgment of the Supreme Court in Commr. of Income-tax, Madras v. Mysore Chromite Ltd., S. : [1955]27ITR128(SC) , S. R. Das, J. has observed that Section 23 of the Indian Sale of Goods Act lays down that where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. The requirement of the Section is not only that there shall be appropriation of the goods to the contract but that such appropriation must be made unconditionally. This is further elaborated by Section 25 which provides that where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such a case, notwithstanding the delivery of the goods to the buyer, or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled. Placing of the goods on board the Steamer named by the buyer under a F.O.B. contract clearly discharges the contractual liability of the seller as seller and the delivery to the buyer is complete and the goods may thenceforward be also at the risk of the buyer against which he may cover himself by taking out an insurance. 'Prima facie' such delivery of the goods to the buyer and the passing of the risk in respect of the goods from the seller to the buyer are strong indications as to the passing also of the property in the goods to the buyer but they are not decisive and may be negatived, for under Section 25 the seller may yet reserve to himself the right of disposal of goods until the fulfilment of certain conditions and thereby prevent the passing of property in the goods from him to the buyer.

80. In view of the principles enunciates above on the facts of this case it does not appear that property in the goods had passed from the plaintiff to its purchasers at Rangoon. The plaintiff, therefore, is entitled to maintain its claim for damages.

81. As to the costs of this suit payable by the defendant No. 2 T intend to refer to Article 579 at page 318 of Halsbury's Laws of England, 3rd Edition, Vol. 30 which is, inter alia, as follows:

'When an action is properly and reasonablybrought against two defendants as being liable jointly or in the alternative and judgment is recovered against one only, the unsuccessful defendant may be ordered to pay to the plaintiff the costs payable by him to the successful defendant or to pay the costs of the successful defendant direct to that defendant.'

82. In this case even at the final stages of the hearing when arguments were advanced by counsel for the respective parties the two defendants were blaming each other. The case of the defendant No. 2 was that the defendant No. 1 did not make over to the defendant No. 2 the export licence which was returned for correction. The defendant bank was contending that on the 2nd February, 1942 the export licence was handed over to the Rangoon Agent of the defendant No. 2 and it was not given back to its Rangoon branch for correction. On analysing the evidence I have come to the conclusion that the case of the defendant No. 1 should be accepted. I have set out above the contents of the relevant paragraphs in the two written statements particularly to indicate the nature of the dispute between the two defendants and then respective contentions. In this view of the matter the plaintiff was justified in making both the defendants parties to this action and proceeding against both of them till the very end vide Order I Rule 7 of the Code of Civil Procedure. . The defendant No. 2 therefore, should be asked to bear the costs of the defendant No. 1 in addition to the costs of the plaintiff. I shall make this order especially in view of the interpolation of the pencil writing of, Lacey on the letter of the 31st January, 1942 marked Exhibit O-l which was not disclosed by the defendant No. 2 till the 23rd May, 1945 only five days before Lacey's examination debene esse.

83. In the result, therefore, there will be a decree in favour of the plaintiff against the defendant No. 2 for Rs. 8646.77nP. and for interest on judgment @6% per annum. The suit is dismissed as against the defendant No. I. The defendant No. 2 would pay to the plaintiff as well as to the defendant No. 1 their costs of this suit. Certified for two counsel.


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