UNION OF INDIA Vs. CHINUBHAI JESHINGBHAI

JUDGEMENT

(1.) This appeal raises a very short question as to the liability of the Union of India to discharge a liability arising under a contract which was entered into prior to partition and in respect of goods which according to the Union of India belonged to Pakistan on the appointed day, viz. 15-8-1947. In March 1947 the Government of India had certain quantities of longcloth for sale as disposal of surplus stock, and these goods were lying at the Ordnance Parachute Factory in Lahore. These goods were purchased by the plaintiffs, who are residents of Baroda, by three sale notes executed on 10-3-1947. Under these sale notes the plaintiffs had to pay a sum of Rs. 34,758-15-5. The contract contained in these sale notes provided that the goods sold had to be stamped for which certain charges had to be paid by the purchaser and that the stock had to be removed within 21 days of the stamping of these goods. The evidence shows, and the finding of the learned Judge is also to the same effect which has not been challenged by the Attorney General in this appeal, that through no fault of the plaintiffs the goods could not he stamped at Lahore because of the serious communal situation that prevailed in Lahore in the month of August 1947. The evidence also shows that a representative of the plaintiffs and of the Textile Commissioner in Bombay did see the goods in Lahore on 10-8-1947, but on that day nothing could be done and the goods could not be stamped partly because of the communal troubles and also because no labour was available due to the serious situation prevailing in Lahore. Thereafter came partition on 15-8-1947, and ultimately the goods were never stamped and never delivered to the plaintiffs. The plaintiffs paid the full price in respect of these goods including the stamping charges to the Government of India prior to 15-8-1947.

(2.) On 26-9-1947, the plaintiffs wrote to the Textile Commissioner, Bombay, drawing his attention to the abnormal situation prevailing in Lahore and asking him to bring the stock lying at Lahore to Bombay where delivery could be taken by them, or in the alternative to give them other materials in place of the materials purchased by them under the contract. Two reminders were sent by the plaintiffs to this letter and ultimately on 30-10-1947, the Textile Commissioner informed the plaintiffs that all outstanding actions on the contract for the sale of surplus would be performed by the Government of the Dominion in whose territory the stores were situated at the time of sale, viz. the Dominion of Pakistan. On 11-11-1947, the plaintiffs informed the Textile Commissioner that ho should either make arrangements to bring the goods to Bombay or, if that was not possible, the contract might be treated as having terminated and the moneys paid by the plaintiffs should be returned to them. The Textile Commissioner replied to this letter on 28-11-1947, pointing out that the decision communicated by him on 30-10-1947, was arrived at a very high level by the parties constituting the then Government of India and it was not possible to do anything further in the matter. The plaintiffs thereupon approached the Government of Pakistan and on 5-11-1948, the Textile Commissioner for Pakistan informed the plaintiffs that the sale notes in question had been cancelled as the stores were not available. With regard to the refund of the money the plaintiffs were asked to refer to the Textile Commissioner, Government of India, Bombay. On 16-11-1948, the plaintiffs approached the Government of India pointing out that the refund of the moneys had long been delayed and asking them to expedite the matter. On 21-1-1949, the Deputy Assistant Director of the Government of India informed the plaintiffs that the question of the refund had been referred to the Ministry in New Delhi along with other similar cases, and unless and until a decision was arrived at by the Ministry no action could be taken. On 25-1-1949, the Deputy Assistant Director informed the plaintiffs that in accordance with the press note, a copy of which was annexed, the plaintiffs were asked to intimate to the Government of Pakistan immediately their option in terms of the press note, and the option which the plaintiffs had to exercise in terms of the press note was that the plaintiffs had either to take delivery of the stores lying in the Dominion of Pakistan before 28-2-1949, or ask for the cancellation of the sale. Acting in pursuance to this press note, the plaintiffs wrote to the Textile Commissioner of Pakistan on 7-2-1949, cancelling the sale notes and asking the Government of Pakistan to remit to them the amounts paid by them under the contract. As the plaintiffs did not hear anything from the Pakistan Textile Commissioner, they again approached the Textile Commissioner, Bombay, on 2-4-1949, asking him to do the needful in the matter and to get the refund of the amount expedited. On 6-8-1949, the plaintiffs again wrote to the Textile Commissioner, Government of Pakistan, referring to the telegram that they had received to the effect that they should submit the original documents in connection with the sale of the surplus goods by the Government of India to them, and that in answer to that telegram they were forwarding the original documents. On 18-8-1949, as they had received no redress from the Textile Commissioner Pakistan they wrote to the Textile Commissioner, Government of India, calling upon him to take immediate steps to either compel the Pakistan authorities to refund the amount or in the alternative to request him to refund the amount to them without any further delay. On 21-12-1949, the Assistant Secretary to the Government of India pointed out to the plaintiffs that under the Inter-Dominion Agreement it was the liability of the Government of Pakistan to refund the money to them and they should continue reminding the Government of Pakistan to that effect. Ho further pointed out that the Government of India had already informed the Government of Pakistan that they should pay this amount, not only to the plaintiffs but to all other parties similarly situated, but nothing had so far been done and pending final settlement the Government of India regretted that no action could be taken by that Government. As the plaintiffs neither received the amount which they had paid under the contract either from the Government of Pakistan or from the Government of India, they ultimately filed this suit on 4-5-1950.

(3.) The plaintiffs claimed the amount of Rs. 34,758-15-5 as damages suffered by them for breach of contract by the defendant, or in the alternative as moneys due by them on failure of consideration or in any event as moneys had and received by the defendant. At the trial before the learned Judge below various issues were raised. It was contended by the defendant that the plaintiffs were not ready and willing to perform their part of the contract, that the defendant had not committed any breach of the contract, and also that there was no failure of consideration as alleged by the plaintiffs. On all these issues the learned -Judge found in favour of the plaintiffs. Various legal issues were also raised, as we shall presently point out, and on those issues also the learned judge held in favour of the plaintiffs. Ultimately, the learned Judge passed a decree in favour of the plaintiff's as prayed. It is from that decree that this appeal has been preferred, and before us the learned Attorney General has not contested the findings of the learned Judge on the issues of fact. Even on the questions of law it was urged before the learned Judge that the notice given by the plaintiffs under Section 80, Civil P. C., was not a proper notice inasmuch as it did not comply with the mandatory provisions of the section. The learned Judge held that the notice substantially complied with the provisions of Section 80 and in any event the notice had been waived by the defendant. This contention also which was raised in the Tower Court has cot been persisted in by the Attorney General before us. The only point that has been urged by the Attorney General is that under the Indian Independence (Rights, Properties and Liabilities) Order of 1947, any liability arising under the contract in suit had to be discharged by the Government of Pakistan and that the Union of India was not liable in respect of any such liability, and therefore according to the Attorney General assuming all the facts in favour of tie plaintiffs, even so in law the plaintiffs could not sue the Union of India and could not obtain any relief against the Union of India. Therefore, it is only this short contention of the Attorney General that remains to be considered in this appeal.