PLJ 1998 Karachi 245 (DB)

Present: wajihuddin ahmed and hamid alt mirz, J J. Messrs PETROCOMMODITIES (PVT.) LTD.--Appellant

versus RICE EXPORT CORPORATION OF PAKISTAN-Respondent

High Court Appeal No. 196 of 1996, decided on 2.12.1996

(i) Contract Act, 1872 (IX of 1872)--

—-S. 73-Breach of contract--Status--Once contract was wilfully broken, itwas relegated to the status of dead letter and no question of its
performance would arise. [P. 247] A

AIR 1953 Mad. 380; PLD 1977 Lah. 481; 1984 CLC 1129; 1991 MLD 2697and 1993 CLC 714 ref.

(ii) Sale of Goods Act, 1930 (III of 1930)--

—-S. 4 read with Specific Relief Act, 1877(1 of 1877), S. 56 and CivilProcedure Code, 1908 (V of 1908), O.XXXIX, Rr. 1 & 2-Contract for saleof goods-Grant of interim injunction against breach of contract-Entitlement-ContraL, 'or sale of goods was not capable of beingspecifically performed, therefore, permanent injunction in terms of S.56(f). Specific Relief Act, 1877 could not be issued-Where permanentinjunction could not be issued, interim injunction also would not beissued—In relation to contract of sale of goods, unless otherwise shownand established, compensation in terms of money would be adequateconsideration. [P. 247] B

(iii) Sale of Goods Act, 1930 (III of 1930)-

-—Ss. 2(14) & 58 read with Specific Relief Act, 1877 (I of 1877), S. 56 and Civil Procedure Code, 1908 (V of 1908), O.XXXIX Rr. 1 & 2-Contract for sale of goods--Specific performance of such contract when to be ordered-Specific performance could be ordered even in relation to sale of goods but same would be relative to specific or ascertained goods-As regards such goods S. 56, Specific Relief Act, 1877 would not become bar for grant of permanent injunction nor interim injunction could be refused on that score--Whether goods involved in contract for sale of goods would qualify as specific or ascertained goods was always question of fact. [P. 248] C Yawar Farooqui, Advocate for Appellant.ArifHussain Kliilji, Advocate for Respondent. Date of hearing : 2.12.1996.orderWajihuddin Anmed, J.-This appeal arises from an interlocutory order passed by a learned Single Judge of this Court on the original side inSuit No. 1132 of 1996, whereby interim relief of injunction was declined to the appellant-plaintiff. Such was a suit based on application under sections 20 and 41 of the Arbitration Act, 1940. The suit pertained to a contract between the plaintiff-appellant and the defendant-respondent concluded on 11-7-1995 for the sale of 10,000 metric tones of Basmati rice. The appellant was to establish the letter of credit within 21 days of the date of agreement and the respondent-seller had to do the needful at its end in such manner that the goods, which were sold on F.O.B basis, were put on board on or before 31-12-1995. It is nobody's case that the letter of credit was opened in time or the rest of the requirement were fulfilled within the contractual period. According to the appellant, the letter of credit was established on 16-10-1996 but respondent, Rice Export Corporation of Pakistan (RECP) says that by the time if received the intimation of that having been done, the contract had already been cancelled by it on 5-11-1996. This is controverted from the side of the appellant and it is maintained that two memorandums were issued on 24-10-1996 for 2500 metric tones on 1000 metric tones each by the RECP for supply of those quantities to the appellant. As to this, without conceding anything, Mr. Arif Hussain Khilji for respondents RECP says that such, even if the case, could merely have been an internal act of RECP. Correspondently, it has been pointed out by Mr. Yawar Farooqui for the appellant, that during the course of time, the appellant had agreed to take Irri-6 in place of Basmati rice and the contract had been kept alive all the while. In this background, according to him, the suit was filed and the interim relief was claimed. As seen the same was declined.The learned Single Judge, in disallowing relief, seems to have been impressed by several factors. He referred to non-payment of the contracted price by the appellant within time. Mention was also made of the revocation of a contract by the RECP. He cited V.K. Mumaraswami Chettiar and others. F.A.S. v. Karuppuswani Nooppanar AIR 1953 Mad. 380; Messrs Charibwal Cement Ltd., Lahore v. Messrs Universal Traders, Gakhar Mandi PLD 1977 Lah. 481; Hafiz Misbahul Hasan v. The Director-General of Suppliers 1984 CLC 1129; Haji Abdul Sattar Chapri v. Secretary, Karachi Grains and Saeeds Merchants Group and another 1991 MLD 2697 to hold that in such a contract, was before him, interlocutory relief by way of interim injunction could not be granted. The same decision are relied upon by Mr. Arif Hussain Khilji for the respondent. On his part Mr. Yawar Farooqi refers to Merkuria Sucden v. Rice Export Corporation of Pakistan 1993 CLC 714, where interim relief relative to a case sale and purchase was allowed by a learned Single Judge of this CourtThere can be little cavil with the proposition that once a contract is wilfully broken, it is relegated to the status of a dead letter and no question of its performance arises. That is what the learned Single Judge seems to have said on account of the fact that the appellant never came up with the requisite consideration money, which was a precondition involved in the opening of letter of credit within 21 days of the contract. Obviously, such anobservation as and remains tentative in nature, not intended to affect the ultimate decision of the case, which would be decided on its own factsAnother aspect of the matter is that a contract for sale of goods, peaking generally, is not routinely a contract, which is capable of being specifically performed. In relation to such a contract, not usually capable of specifically performed, a permanent injunction under section 56(f) of the Specific Relief Act cannot issue. Where a permanent injunction cannot issue, an interim injunction also does not arise to be administered. Correspondingly, in application to contracts of sale of goods, unless otherwise shown and established, compensation in terms of money would be adequate consideration, and therefore, no element of irreparable loss would subsist, again coming in the way grant of interim injunction relative to such contracts. These, however, are general principles of law and have to be applied in the specific circumstances of even case, which in itself may pose an exception. As said before, none of its calculated to affect the disposal of the main dispute between the parties.As to the order of a learned Single Judge of this Court in the case of Suceden (supra) all that needs to be said is that where the goods which to the subject-matter of the contract, are specific or ascertained goods and it is known that the property therein already stood passed even interim relief can be ?? as was the position ' ^v. a cited case. Several factors in the precedent case, including issuance of some documents of possession and creation of third by interests, may have accomplished just that. In that case yet another aspect have been that, at the time, the RECP alone was dealing in the export of and the goods were claimed to be unavailable elsewhere. That aspect also and have weighed with the learned Single Judge.Relevant to the provisions of law pertaining to the passing of the property or the title in the goods, the rule as enshrined in section 19 of the Sale of Goods Act is that the property in the goods inter alia passes at the time when the parties intend the same to pass. Intention of the parties, subject to contract, may be ascertained from the rules set out in sections 20 to 23 of the same Act. In the instant case, Mr. Arif Hussain Khilji, for the respondent, maintains that because the contract was on F.O.B. basis, the property would have passed only as from the time the goods were actually put on board because prior to that the same shall have remained at the risk of the RECP, the seller. The provisions of sections 20 to 24 of the Sale of Goods Act, as can be seen immediately, are explanatory of the various circumstances in which the intention of the parties may be gaudged. All such questions would come up for consideration as and when the matter is decided in the ultimate analysis.Reference may here be made to section 58 of the Sale of Goods Act. Such section runs thus :--"58. Sp^af>ifc performance. -Subject to the provisions of Chapter II of the Specific Relief Act, 1877, in any suit forbreach of contract to deliver specific or ascertained goods, the Court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. The decree may be unconditional, or upon such terms and conditions as to damages, payment of the price or otherwise, as the Court may deem just, and the application of the plaintiff may be made at any time before the decree."The reproduced section would show that, in the cases covered by it, specific performance can be ordered even in relation to sale of goods. But that, as hinted above, is to be relative to specific or ascertained goods. As regards such goods, section 56 of the Specific Relief Act would not become a bar for grant, of permanent injunction, nor an interlocutory injunction may be refused on that score in such behalf. Even then it would always be a question of fat as to whether the goods involved qualify as specific or ascertained goods. A variety of articles may fall under the category of "specific goods", which is defined by section 2(14). of the Sale of Goods Act to involve and mean "goods identified and agreed upon at the time a contract of sale is made". An example, which instantly occurs to mind, may be that of a painting or other piece of art or a thing having a special meaning to the _ buyer. Such goods arguably may be covered by the description. However, with reference to the subject-matter of the suit and the present appeal, it can hardly be said that the goods were specific goods, because Basmati Rice, except in rare cases and unlike old (specific or ascertained) wine, from year to year, may remain similar, if not the same. As it is, according to the appellant-buyer's own case even Basmati Rice came to be substituted by Irri-6. On the other hand, the concept of ascertained goods, in the view we taken, should be still different. The expression is not defined. That, inter alia, may connote earmarked or appropriated goods in terms contracted to be sold and purchased; in other words goods identified, as agreed upon after the contract of sale is made. At any event, each individual case of the nature in such ontext shall is made. At any even, each individual case of the nature in such context shall have to be determined on its own facts. Nothing more on the subject need be said here.Seeing no cause for interference, while we dispose of the appeal and also the applications filed with it, subject to the foregoing, the appellant, would be force to reagitate all such questions, as be relevant to its case, just as the respondent may do likewise. Nothing said here or in the order of the learned Single Judge, except the bare propositions would affect the rights of the parties, when the case proceeds either to trial or in arbitration, as the case may be.

(K.K.F.) Order accordingly.