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Petitioner: MESSRS FAIRLAND EXPORT SYNDICATE VS Respondent: MESSRS BENGAL OIL MILLS LTD., JUDGMENT
Court Name: Sindh High Court Judge(s): Ghulam Rasool K. Shaikh Title:MESSRS FAIRLAND EXPORT SYNDICATE vs MESSRS BENGAL OIL MILLS LTD.,
JUDGMENT
Reported As: PLD 1970 Karachi 125 Result: Suit decreed Judgment JUDGMENT This is a suit for the recovery of Rs. 25,266.34 as damages on account of the loss suffered by the plaintiff on account of the supply of inferior quality of oil cake by the defendant. The plaintiff is a registered partnership firm and carries on export business in oil cakes. The defendant is a limited company and produces and manufactures as well as exports oil cakes. On 15-7-61 the defendant sold to the plaintiff 3000 bags weighing 5325 mds. Not what is commercially known under its patent name `Decorticated Cotton-Seed Cake Expellers' for export to United Kingdom at the rate of Rs. 11.50 per md. Again on 24th July 1961, the defendant sold to the plaintiff a further lot of 2000 bags weighing 3550 mds. Of the same oil cakes at the rate of Rs. 1,200 md. On account of these transactions the plaintiff paid a sum of Rs. 1,09,787.50 as price of the oil cakes including bardara and empty bags. Both these transactions were entered into through brokers Messrs Shakoor Zikar & Company. The oil cakes thus purchased were exported to United Kingdom in three lots of 720, 1400 and 2080 bags respectively. The first two lots were shipped by s. s. Egidia and the third lot by s.s. Circassia. According to the plaintiff as was the practice the aforesaid decorticated cotton seed cakes had to contain oil and alubiminoid between 43 to 45 Y. And it was on this basis that the goods were treated in local and international markets and this was also the basis on which the goods were sold by the defendant to the plaintiff. The price was also paid accordingly. An assurance was also given by the defendant to the plaintiff through the broker that the oil cakes were 100 up to the mark so far as the quality, fitness and contents of oil and alubiminoid were concerned and there was not the slightest defect in them and they were fit for export as they were of International standard. However, when the goods reached the United
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Kingdom it was found on analysis that the oil cakes contained oil and alubiminoid to the extent of 36.35 % on receiving this report from the United Kingdom the defendant was immediately approached and Seth Haji Abdul Rehman who was the director of the defendant-company was contacted. The broker and one representative of Messrs Hussaini Co. Accompanied the plaintiff. It may be mentioned here that Hussaini Co. Had also purchased same goods from the defendant. Seth Haji Abdul Rehman was appraised of the result of the analysis and he expressed his complete surprise and suggested to the plaintiff to have the second analysis. On his suggestion a fresh analysis was made and the oil cakes were found still more deficient: in their oil and alubiminoid contents to the extent of nearly 1 %. The result of this analysis was also communicated to the defendant and this time Haji Hashim a representative of the defendant happened to meet the plaintiff. On account of this deficiency the cotton-seed cakes were treated to be undecorticated. As a result of this the plaintiff was obliged to pay to their buyers in United Kingdom the total claim of - -1384/17/9 equivalent to Rs. 18,369.44 in Pakistani currency. Besides this, the plaintiff was also deprived of his bonus voucher entitlement of the value of Rs. 2,774 which would have been earned if the goods had been found to be of the standard quality which had been purchased and paid for. The loss to the disentitlement of bonus vouchers come to Rs. 6,896.90 as the market price of bonus vouchers of Rs. 100 at that particular time was Rs. 185. Thus the total loss which the plaintiff suffered came to Rs. 25,266.34. In spite of repeated demands the defendant did not pay the amount and therefore the present suit was filed. The defendant resisted the suit. Both the transactions were admitted but it was denied that the basis of the export to the United Kingdom was ever disclosed by the plaintiff. It was also admitted that the transaction :related to the decorticated cotton-seed expellers but it was denied that any guarantee with regard to the quality or percentage was given. It was expressly stated in the document purported to have been given by the broker that the percentage, was not guaranteed. The sale was as per sample. It was denied that the goods which were purchased by the plaintiff from the defendant were exported. It was also denied that there was any practice or usage that the goods had to contain 43 to 45 % of oil and alubiminoid nor the goods ,always contained any such percentage. It was also denied that either the sale was made or the payment was made on any basis or any assurance was given as to 100 % up to the mark about quality, fitness and contents. So they were not concerned with the analysis of the goods. The allegation that the goods were undecorticated was also challenged. In the written statement the emphasis was laid on the documents which were produced by the broker containing the clause that the percentage was not guaranteed and further there was no stipulation that the goods were intended for export to United Kingdom. On the basis of these pleadings the following issues were framed. "(1) Were the goods purchased by the plaintiffs for export to United Kingdom as alleged? (2) Was any guarantee or assurance as to percentage of fat and protein, given by the defendants? (3) Is there any usage or practice that oil cakes always contain 43 to 45 % of oil and alubiminoid and whether the price is dependent upon percentage of oil and alubiminoid contents? (4) Were the goods exported by the plaintiffs same which were purchased from defendants? If so, what is its effect?1 (5) Was any fraud committed by the defendants? (6) Was any loss or damage occasioned to the plaintiffs? If so, can the defendants be heldliable for the same? (7) Is the plaintiffs firm registered? (8) Are the defendants entitled to compensatory cost? (9) Were the goods supplied by the defendant undecorti--cated? If so, what is its effect?"
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Before answering the issues it would be necessary to briefly re-state the evidence which was led by the parties. On behalf of the plaintiff Fayyaz Ahmed Malik who was the partner of the plaintiff firm appeared in the witness box in support of the case. Six witnesses, Muhammad Yaqoob, Sultan A.I, Ahmed, Sadaruddin, Abdul Sattar and Abdul Shakoor were examined in Court while three witnesses namely, Mr. Ronald Alfred Rabnett, Mr. Lilian Marjorie Chamberlain, and Mr. Jack Hubert Hamence who were residents of London were examined on commission on the basis of the interrogatories and cross inter--rogatories. On the other hand Hashim A.I the Managing Director of the defendant and two more witnesses Raza A.I and Abdul Latif were examined in rebuttal of the case. Firstly I will take up the evidence of the witnesses produced on behalf of the plaintiff. The first witness is Fayyaz Ahmed Malik. He is the partner of the plaintiff's firm. He stated that their main business was export of oilcakes since 1959 and the defendant-company was well known and reputable firm manufacturing oil cakes. In the second week of July 1961, Shakoor and Zikar & Co., brokers informed him that the defendant was offering for sale 6000 bags of decorticated cotton- seed cakes containing 43% protein and fat combined at the rate of Rs. 11 per md. Besides the cost of empty bags where--upon he immediately contacted the foreign buyers ins London and Liverpool, and on hearing from them he decided to purchase the cotton-seed cakes and contacted the brokers on 14th July 1961. The defendant finding his interest increased the rate to Rs. 11.50 per md. This he agreed. After acceptance the defendant said that they were withdrawing the guarantee as to the percentage of protein and fat but simultaneously assured that the goods were of standard quality. On the basis of this assurance he agreed to purchase 5800 mds. Of cotton- seed cakes which were lifted in two lots and subsequently shipped under proper marking. Again two lots of 1400 bags and 700 bags were also purchased. He also produced the various documents about the shipping of the goods. One lot of 1400 bags was sold on their behalf by Ameeji Valeeji Sons to Fuerst Bros. Ltd., London. The landing was supervised by General Supdts. & Co. Ltd. At the port of discharge. Correspondence in this respect was produced. He further stated that all the three consignments to United Kingdom had been sold on the basis of the London Cattle Food Trade Contract No. 6. When the goods were analyzed by the buyers through their analysts it was found that they " ere deficient in protein and fat by about 6.80 %. He along with the broker and a representative of Hussaini & Co., contacted Seth Haji Abdul Rehman of the defendant's firm who suggested second analysis. The request to that effect was made to the buyers but the result was the same. On account of this, the loss was suffered in sale price as well as bonus vouchers. In cross-examination he stated that he did not enter into written contract nor the broker gave him any sale-bate. No sample was shown to him as he was aware that he was purchasing from a very reputable firm. However, he had seen the goods when he had got the delivery. He had talked with Haji Hashim over the telephone before entering into the contract. He denied the suggestion that Haji Hasbim informed him that they could give no guarantee as the goods were produced from cotton seeds which were of inferior quality. He further stated that before the goods were shipped no samples were taken. He had informed the defendants that he had to export the goods and besides their firm was known as exporters in the markets. He further admitted in the cross-- examination that if the goods were purchased on a guarantee basis samples had to be taken at Karachi in the presence of the sellers and the buyers. He further stated that from March 1955 till the later part of 1966 the export of undecorticated oil cakes was banned by the Government of Pakistan and there was no consumption of decorticated cakes in the local market. The second witness is Muhammad Yaqoob whose firm is engaged in the work of survey of goods which are exported. Their head office is located in Geneva while their branch offices are situated throughout the world including London and Karachi. The work of surveying is done by their office at the port of discharge under the instructions of the shippers. The result of tile analysis carried out by
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their exports are issued by their office and such reports are recognised by the State Bank of Pakistan. He further stated that in 1961 the goods were received in England exported by the plaintiff and one consignment of 1400 bags by Ameeji Valeeji & Sons on behalf of the plaintiff and samples were taken from various lots which were subsequently analysed in different laboratories. With regard to the shipment by Ameeji Valeeji he stated that their papers did not show that the consignment was shipped on behalf of the plaintiff. The third witness is Sultan A.I who is one of the employees of the Ameeji Valeeji & Co., and is incharge of export depart--ment. The record of all the exports are maintained. In 1960 1400 bags of Pakistan decorticated oil cakes were shipped on account of plaintiff to United Kingdom. According to him these goods were to contain at least 43 % oil contents. He produced the document therein a claim was made by the buyers against Ameeji Valeeji & Sons on account of the deficiency of oil and alubiminoid in the goods which were shipped. The claims are received after the goods are analyzed at the place of destination. He produced various documents in support of his evidence. He denied that Ameeji Valeeji had any oil mill or he ever worked in any oil mill. He could not say the number of the mills which produced the type of goods in question at Karachi or whether any special machine was required to manufacture those goods. He accepted the suggestion as correct that when the goods was manufactured from wholesome seeds they were called undecorticated while these manufactured from such seeds, after their scales had been removed were called decorticated. No samples, according to him were taken at Karachi. The fourth witness is Ahmed who is also an employee of Ameeji Valeeji acd was godown incharge. In 1961 he had received 2080 bags of decorticated cakes from Bengal Oil Mills Ltd. Which were directly loaded in the wagons without having been stored and the goods were marked `Fair Fairina', Liverpool. Again on 22nd July 1961, 120 bags of the same goods were received from Bengal Oil Mills Ltd. He further stated that he received a further consignment of 200 bags of the same goods on account of the plaintiff from Bengal Oil Mills Ltd. A regular register is maintained for the receipt of the goods as well as for the goods which are sent out of the godown. All the goods which were received were entered in the register. These goods had been received in the trucks of Sadruddin contractor but the goods did not bear any mark of Bengal Oil Mills Ltd. In the re--examination he stated that the goods which are marked at the time of export bear the marking of the exporter and not of the manufacturer. The fifth witness is Sadruddin who is a haulage contractor. On 21st July 1961 he got a delivery order of 3000 bags of decorticated goods from the plaintiff, which were to be lifted from Bengal Oil Mills. On the same day he collected 2080 bags and on 22-7-61 he collected 120 bags. The first lot was marked `fair Fairina' Liverpool. The second lot was also put the same mark except its destination shown as Glasgow. The goods were transported to the godowns of Ameeji Valeeji. He further stated that on 29th July 1961, he collected 2000 bags from Bengal Oil Mills Ltd. On account of the plaintiff. 1400 bags were marked as FBCP 6207 `Cardiff' and 600 bags were marked as 'Fair Fairina' Glasgow. While collecting the goods one slip is given to the suppliers and one slip to the godown incharge where the goods are subsequently deposited. He produced the slips in that behalf. In the cross- examination he stated that the delivery order which he had received from the plaintiff was deposited at the office of Bengal Mills after the goods were collected, and he kept a copy with himself. He had seen the goods personally before collecting them. He did not remember if his trucks had collected any goods from any other oil mill during the whole year of 1951. He had hauled some goods from Burma Oil Mills in 1963 but he did not remember the number of bags. The sixth witness is Abdul Sattar. He was working in the Clearing Forwarding Department of Ameeji Valeeji. On 21st July and 29th July 1961 he had handled two shipments on behalf of the plaintiff and had shipped them. These goods were originally brought to their godown in the trucks owned by
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Sadruddin Juma, and were directly loaded in the railway wagons to be taken to the shipyard. The goods were marked as 'Fair Fairina' Liverpool. The seventh witness is Abdul Shakoor who is a partner of Shakoor Zikar & Co., and had acted as broker in bringing about the transactions between the parties. He stated that he brought about the transactions in question and produced the documents in support of it. According to him the transactions involved 3000 bags of decorticated cotton-seed oil cakes. He further stated that decorticated oil seed expellers were known to have 43 % of oil content and 3 % of protein, but the contents may vary by 2 to 3 % adding further that 43 % represented oil and protein contents. He was asked by the defendant for the sale of decorticated cotton-seed oil cakes in 1961 and, therefore, he contacted the plaintiff and told him that the goods in question belonged to Bengal Oil Mills Ltd., which were always known to contain 43 Y. Of oil and protein contents. Only 5000 bags of the goods were sold by the defendant to the plaintiff through him. He had also some goods to Hussaini & Co. About the same time. These goods were not sold by sample. He admitted that the defendant never told him that the goods contained 43 oil and protein content, but in fact it was understood that the goods in question would be of that quality. His opinion was based on the fact that the goods of that description contained 43 % of oil and protein as market practice. He further stated that at one time Haji Hashim the Managing Director of the defendant refused to guarantee that the goods in question contained 43 % of oil and protein content. But after the plaintiff refused to finalize the deal Haji Hashim assured him that these goods were of first class quality and their contents were in all respects satisfactory although he refused to give any guarantee. Haji Hashim did not refuse to guarantee the description of the goods but he refused to guarantee the percentage of the contents. He further stated that most of the goods in question were meant for export although a minor percentage might be sold for local consumption. He continued that after the plaintiffs showed him the telegram which was received from the buyers in the United Kingdom he contacted Haji Abdul Rehman in the presence of the plaintiff and a representative of Hussaini & Co., and Haji Abdul Rehman expressed his surprise that the goods in question were found short of 43 % contents. Haji Abdul Rehman again assured him that the goods were of good quality and there must be some mistake committed by the analyst, and therefore he suggested a fresh analysis. After the second analysis report was received he went to see Haji Hashim the Managing Director of the defendant who also expressed his surprise and sympathy but stated that he was not in a position to help. The goods purchased by Hussaini & Co., also met within the same fate for it was found to contain only 35 to 36 % of oil and protein content. Consequently Hussaini & Co., filed a suit against the defendant in which too he appeared as a witness. He further stated that by looking at the goods he could not be able to say about the percentage of their oil and protein content. As a matter of practice when the goods are sold in the market they are presumed to be of fair quality. According to him the machine which produced decorticated cotton-oil seeds could equally produce undecorticated goods. He did not know if the defendant manufactured undecorticated goods in 1965. He also produced a writing Exhs. 28/4 and 28/5 which he had passed on to the defendant, and gave no copy to the plaintiff. This document was delivered to the defendant without the knowledge of the plaintiff. In this document it was shown that the decorticated oil cakes were sold without guaranteeing the percentage. However, the entries that he made in his books did not show that the goods were without any guarantee. In the cross- examination he admitted that the plaintiff had no direct contact with the defendant when the transactions were finalised. He had written Exhs. 28/4 and 28/ 5 at the instance of Haji Hashim Managing Director of the defendant but he gave no intimation of these writings to the plaintiff. He admitted that it was true that after the report of the analyst was received he had gone to see Haji Hashim but was told that since no guarantee had been given respecting the goods he could be of no assistance. According to him it was correct that the goods which were meant for export and
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were guaranteed to contain 43 % of oil and protein were purchased on the basis of special contract. He was not aware that the Government of Pakistan had fixed different percentage of oil and protein contents of goods at different times. He was aware of the existence of Export Promotion Bureau but he could not say what was its function or whether any standard of the quality of goods was fixed by it. Then comes the evidence of the three witnesses who were examined on commission. They were the analysts. Mr. Lilian Marjorie Chamberlain was the official analyst of the Cattle Food Trade Association since about 2 years. Mr. Ronald Alfred Abnott was the partner in Salamon & Seaber and was engaged in analytical chemistry since 1931. Mr. Jack Hubert was the senior partner in Wn. Bernard Dyer and Partners (1948) Limited, London Analytical and Consulting Chemists. He was the public analyst, Official Agricultural Analyst and had 3 7 years experience of the examination of the animal feeding stuffs. The company to which he belonged was official analyst. It was the unanimous opinion of Mr. R. A. Abnott and Mr. Jack Hubert that the samples which were tested by them were found to be deficient in oil and alubiminoid and were partially decorticated. They refused to concede that the samples could be said to be decorticated. According to them there was no recognised standard of decorticated cotton-seed oil cakes but decorticated goods of satisfactory quality should not contain less than 45 of protein and alubiminoid combined and more than 10% of fibre or husk. They stated that decorticated cotton-seed cake expellers was the name for the residue resulting from the removal of oil by expeller process from the commercial cotton-seed from which the cortex had been removed. They further stated that undecorticated cotton-seed oil cakes were made from undecorticated cotton-seeds. In order to decorticate the seed it would be passed through machines. Mr. Ronald Alfred could not say what was the general limit in husk contents, or the percentage for cotton husk and lint. So far as Mr. Jack Hubert is concerned he stated that he was unable to give individual proportions of lint and husk but the combined total usually amounted to 22 %. Both of them were definite that the samples which they had analyzed were not decorticated and were partially decorticated. Mr. Lilian Marjorie Chamberlin certified in his evidence that the certificate No. 61-A1293 dated the 21st September 1951 and No. 61-A-960 dated the 14th September 1961 were issued by him after analyzing the cotton-seed cakes and the result was correctly mentioned by them. He also admitted that he had the occasion to determine the contents of cotton-seed-oil cakes shipped by the defendant and always found them containing over 45 % oil and protein and very rarely below 43 %. He too stated that satisfactory decorticated cakes should not contain less than 45 oil and 10 % of Fibre. According to him there was no satisfactory limit for husk but it could not be too much and had to be kept to the minimum. He could not give the percentage of the cakes which was made from undecorticated seeds. He further stated that undecorticated cotton oil seeds were the cotton oil seeds prior to decortication and were not normally used for the manufacture of cakes. They were passed through machines in order to decorticated them. With regard to the cakes in question he stated that on appearance they had certainly been partially decorticated and could be made from undecorticated seeds but could not give the percentage. Now I take up the evidence on behalf of the defendant. The first witness is Hashim A.I. He is the Managing Director of the defendant-company. He stated that the plaintiff had purchased 5000 bags of decorticated oil-seed cakes in two lots on 14-7-1961 and 27-7-1961 at the rate of Rs. 11.50 per md. And Rs. 12 per md. Respectively; through the agency of Shakur brokers. He admitted that at no stage they had any talk with the plaintiff in relation to these transactions. According to him `decorti--cated' signified that the husk of cotton seeds was removed and the kernels were crushed. With regard to the guarantee he stated that at no stage any guarantee was given, that the goods in question contained any particular percentage of oil and protein and the contracts were entered into in terms of their agreement embodied in the slips Exhs. 28/4 and 28/5 given to them by the
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broker. He further stated that the decorticated oil-seed cake contained about 35 % to 50 % of oil and protein content and the percentage depended upon the quality of the seed. For producing decorticated cakes special machine was required. No guarantee was given as they were not sure of the quality of the cotton-seeds from which those goods were prepared. At no stage they were informed by the plaintiff that the goods were intended for export as when such goods are sold for the purpose of export a special contract is drawn between the parties followed by the sample of goods being taken in three lots, one is meant to be retained by the seller, another to be retained by the purchaser and the third is sent to the overseas buyer. To support this he produced two documents Exhs. 30 and 31 which contained special clause prescribing the quality for the goods intended to be exported. He denied that any…
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