KARACHI, Feb 8: Justice Sarmad Jalal Osmany of the Sindh High Court has dismissed an application whereby a private importer had prayed for restraining the government from selling the 2,356 tons of fertilizer (suit property) to any third party or creating any interest therein to the exclusion of the plaintiff.

The plaintiff, M/s Warraich Brothers Dahranwala, was represented by Altaf Husain, advocate, whereas the director fertiliser import department and the Government of Pakistan, through the ministry of food, agriculture and livestock, were represented by Standing Counsel Ziauddin Nasir.

According to the plaintiff, he was an authorized dealer of the defendant No 1 and as per agreement, the plaintiff offered to buy the entire suit property at the rate of Rs519 a bag of 50 kg. It was accepted by the defendant with a further condition that a pay order should be submitted for the required amount.

Justice Osmany in his order held that from a perusal of the various correspondence between the parties, it appeared, prima facie, that the true contract between them was one for lifting of the entire quantity of the suit property upon advance payment.

He observed that correspondence between the parties revealed that the plaintiff did not adhere to the commitment and only deposited a sum of Rs1 million on Feb 16, 2001 and kept on requesting for a delivery order against this payment. However, he noted that the defendant actually issued a delivery order against this amount of Rs1 million on April 24, 2001, but thereafter refused to do so for further quantities, and the plaintiff was requested to quote his best price for the suit property on the same date.

“In the circumstances in my view the defendants were well within their rights to repudiate the contract between the parties since despite the plaintiff’s undertaking etc. he had failed to deposit the entire sale consideration in advance,” Justice Osmany observed in the judgment.

It was Justice Osmany’s view that in the circumstances of the case where the goods were lying at the port and the defendants were undergoing heavy demurrage at the port, at the most the contract should have been performed within a week or two or possibly within a month. This the plaintiff failed to do by not paying the entire sale consideration in advance as agreed, he observed. Hence the defendants were well within their rights to revoke the contract between the parties, he observed.

As far as the novation of the contract was concerned, on the strength of partial delivery against Rs1 million, it would be seen that the essence of novation was not the mere dissimilarity of the terms of the old contract and the new one, but in the intention of the parties to supersede the old by the new one. Thus before there could be any novation under section 62 of the Contract Act, there should be actual substitution of the old contract by the new one and consequently till the second contract became operative the old contract would continue. (Mohammad Amin vs Star Oil & Ice Mills (PLD 1973 Kar 408).

As far as section 20 of the Sale of Goods Act upon which the counsel for the plaintiff had relied upon, Justice Osmany observed that the same contemplated passage of title to the buyer when the contract was made provided the same was unconditional. He observed that the present contract between the parties was a conditional one viz: that the entire suit property had to be lifted by the plaintiff upon payment in advance. Hence section 20 of the Sales of Goods Act would be inapplicable in the circumstances of the case.

With regard to section 58 of the Act, he said the same contemplated specific performance of a contract of sale and provided that the court might allow the same without giving an option to the defendant for retaining the goods on payment of damages.

“In my view again, in the circumstances of the case section 58 of the said Act is not relevant as it is subject to Chapter 2 of the Specific Relief Act,” the judge said.