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TMI Blog1977 (10) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... t account with the bank. By mutual agreement the Bank guarantee was extended to June 23, 1947. The guarantee amount was treated by the bank as a cash-credit account of the distillers in its books. (3) The Drum and Screw Cap Plant arrived in Karachi in April and June 1947. The bank paid the following two amounts to Francis Klein of Calcutta through whom the goods were purchased from the foreign manufacturers: 1.₹ 1,13,809/5.00 . 2.₹ 1,01,024/6.00 . TOTAL₹ 2,14,833/11.00 . (4) In return the plant was pledged by the distillers with the bank as security for the advance made in the cash credit account. (5) The bank's head office was in Darya Ganj at Delhi. It had its branches in Karachi and Lahore. From England the goods arrived at Karachi port. The bank took delivery of the goods. A part of the plant was stored by the bank in its godown at Karachi. Another part was stored by the bank with a company of clearing and forwarding agents known as the Eastern Express Company Limited, Karachi (Express Company) under its lien. (6) In March 1950 the bank sold and delivered the said plant-to one Akhtar Ali Khan of Pakistan Development Corporation, Karach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave not heard from you anything in reply. ASour Branch at Karachi is already closed, we can't continue to hold the Drum Plant for long. We request you to give the matter your immediate attention. (9) On August 8, 1951 the distillers cleared the loan account of the bank. They remitted the balance sum in full and final settlement of the account and wrote to the bank: KINDLYarrange to deliver the Drum and Screw Cap Plant to us, at your earliest convenience. (10) This is the starting point of the trouble. On September 19, 1951 the bank wrote the following letter to Express Company EX.12 Bharatbank LIMITED 37,Faiz Bazar, Delhi. 19THSeptember, 1951 REF.HO/RSD/6473 M/S.Eastern Express Co. Ltd., BUNDERRoad, Karachi. (Pakistan). Dear Sir, RE: Outstanding bills for drum making plant stored with you under lien of the bank. OURlien on the plant does not stand now. You may please recover your full amount of up to date unpaid bills for storage charges etc. from Messrs. Jagatjit Distilling and Allied Industries Ltd., with whom you may deal about it in future. YOURSfaithfully, SD/-Illegible Manager. (11) The bank wrote another letter on September 19,1951 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided our charges are paid up to the date of delivery and that you obtain a release order from the Department of Supply and Development, Govt. of Pakistan, as we have received instructions from them not to give delivery without their permission. YOURSfaithfully, FORthe Eastern Express Co. Ltd. SD/-Illegible Manager. (15) One thing we would mention at the outset that the Pakistan Government prohibited the transfer of the plant because the Lahore Branch of the bank had made the payment of ₹ 30,000.00 to Akhtar Ali on account of damages from their resources in Pakistan. The Pakistan Government considered it to be a violation of the Foreign Exchange Regulations which had come into force in the meanwhile. That Government took the view that the payment of ₹ 30,000.00 should have been made by the bank from their moneys in India and since it was not done they required the Lahore branch of the bank to recoup this sum of ₹ 30,000.00 from India. The bank did not do so. The Pakistan Government did not allow the plant to be delivered to anybody. (16) There was a stalemate. The distillers complained to the bank that in spite of full and final payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to release the machine tools in question, for export to India, subject to the condition stated in para 2 below :- 2.The State Bank of Pakistan has reported that M/s. Bharat Bank Ltd., Karachi, sold certain items of the consignment in question to M/s. Pakistan Development Corporation Ltd., Karachi, but later redeemed them by refunding the price together with a sum of ₹ 30,000 as damages. As the bank has paid this sum of ₹ 30,000 from its resources in Pakistan, it is necessary that the amount should be recouped by them from India through the State Bank of Pakistan. The release of the machine tools is, therefore, subject to the condition that an amount of ₹ 30,000 is transferred by the head office of M/s. 'Bharat Bank Ltd., in India to their Karachi Branch through the State Bank of Pakistan, 3.You are requested to arrange for this transfer, after which,the necessary permit will be issued for the export of the machinery. YOURSSincerely, SD/-M. L. Rahman. P.Vaidyanathan, ESQR.First Secretary (Commercial) INDIANHigh Commission, Karachi. (19) On the receipt of the conditional 'permission, from Pakistan Government the Indian Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stry of Finance urgently. YOURS sincerely, SD/-(P. Vaidyanathan) COMMERCIALAttache- R.N. Kapur, Esqr, UNDERSecretary to the Government of India, MINISTRYof Commerce and Industry. New Delhi. COPYto Messrs. Jagatjit Distilling and Allied Industries, Kapurthala (Mr. L. P. Jaiswal Camp Karachi.) SD/-(P. Vaidyanathan) COMMERCIALAttache. (20) The Indian High Commission on August 30, 1954 wrote' to the Government of Pakistan as follows :- EX.21. FIRSTSecretary (Commercial), INDIANHigh Commission. VALIKAMahal, Karachi-1. DATED27th/30th- August, 1954. NO.S. 9/ITGC/51/J-35, DEARMr. Rahman, Please refer to your D.O. letter No. 335/515/51 dated the 22nd May, 1954 to Vaidyanathan regarding release of certain machine tools imported before partition for Messrs Jagatjit Distilling and Allied Industries, Kapurthala. 2.The Government of India have allowed, as special case, the remittance of a sum of ₹ 30,0000 by Messrs Bharat Bank (now known as Bharat Nidhi Ltd. Delhi) to their Lahore Branch through the State Bank of Pakistan. Necessary instructions to this effect have been issued by the Ministry of Finance to the Reserve B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt.- (2)That the bank did not sell the machinery to Akhtar All with the knowledge and consent of the distillers and the said sale was, therefore, illegal. (3)The distillers we're not liable to pay ₹ 30,000.00 to the bank which the bank had to pay to Akhtar Ali for the cancellation of sale. (4)THEBank was in possession of the machinery on August 9 1951(the date of full and final settlement of the loan account) on behalf of the distillers. (5)THEtransaction was one of bailment and not pledge (6) THEcontract between the bank and the distiilers and not pledge. (7)The State Bank of Pakistan required the bank to replenish the Sum of ₹ 30,000.00 from its funds in India trough its branch in Pakistan. (8)The Bank was liable to remit ₹ 30,000 to Pakistan. (9)The distillers- should themselves arrange to Pay ₹ 30,000 to Pakistan Government and obtain delivery of the plant. (10)The distillers can realise ₹ 30.000 from the bank because the loss was caused by the action of defendant No. 1 . (Bharat Nidhi). (26) The Central Question: Bailee's obligations: The conclusions of the trial judge, if we may say so with respect, are a stra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.. 30,000 from India and that the release of the plant was subject to the condition that the amount of ₹ 30,000 is transferred by the head office of the bank in India to their Karachi branch in Pakistan through the State Bank of Pakistan. This averment was clearly made in paragraph 14 of the plaint. The copy of the letter dated May 22, 1954 by Mr. Rehman to the Indian High Commission was annexed to the plaint. Therefore, the bank could not have denied knowledge of the conditional permission after August 6, 1954. It was open to them to comply with the requirement of the State Bank of Pakistan on the receipt of the information and secure to the distillers the plant by fulfillling the said condition. (30) Whether the distillers would have ultimately obtained delivery of the plant from Express Company is not the question before us in the appeal. The question is : Did the bank clear the obstacle placed in the way of the delivery of the plant to the distillers by paying 'a sum of ₹ 30,000 from its head office in India to their branch in Pakistan through the State Bank of Pakistan ? From the evidence it clearly appears that the Pakistan Government on March 7, 1951 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . the responsibility which was exclusively its own. Nor can it be allowed to shift its responsibility to distillers' shoulders. That will be passing the buck, to use a colloquial phrase. (33) The Express Company informed the distillers that they had to do three things before delivery of the goods could be made to them. These are : 1.The instructions of the Bharat Bank Delhi to deliver the goods should be confirmed by the Lahore branch. 2.That the distillers should pay their charges. 3.That the distillers should obtain release orders from the Ministry of Supply, Government of Pakistan which had forbidden the disposal of the goods on March 7, 1951. (34) This being the situation of the distillers wrote to the bank on November 2, 1951 an important letter in these words :--- D-31. Jagatjitdistilling And Allied Industries LTD. 2ND Nov., 1951. M/S.Bharat Bank Ltd. 37,Faiz Bazar, Delhi. DEARSir, WE have since received a copy of the letter No. 5172/493/ Mtc dated the 24th October, 1951, addressed by M/s. THEEastern Express Co. Ltd. Karachi to your address in response to your letter foresaid. From this, it is clear that it is necessary for you to ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant to deliver the said machinery to the plaintiff at Karachi the said agreement became incapable of performance because of the restrictions of the Pakistan Government mentioned in the plaint and as such the present suit is not admitted to be maintainable. (41) This paragraph refers to the allegations made in the plaint. But when we turn to the plaint we find it clearly said that the Pakistan Government had forbidden the disposal of the machinery on March 7, 1951, but on May 22, 1954 the Government of Pakistan had decided to release the plant subject to the condition of repatriation of ₹ 30,000 from India to Pakistan. (42) Now the condition of transfer of Rs, 30,000 was not impossible of performance. This meant crediting to Pakistan that amount of foreign exchange in Indian currency as the Indian High Commission put it in their letter dated 22nd/24th May, 1954 (L-l). There is evidence that the Reserve Bank was ready to give permission to the bank to remit ₹ 30,000 from India to Pakistan. The Ministry of Finance, Government of India was also agreeable. There was no hitch or hurdle. The combined efforts of the distillers and Indian High Commission made it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult by the bank in selling the plant to Akhtar Ali which caused the allegedly frustrating event. As Lord Russell said in. POSSIBLEvarieties (of fault) are infinite. GIVINGan illustration he said: Thoughtlessness of the prima donaa who sits in a draught and loses her voice caanot be said to be a frustration of the contract as the resultant frustration is self-induced . (46) The rule that frustration must not be self-induced applies to all deliberate or negligent acts, whether they are actually breaches of contract or not. For it is in all these cases unjust to make the other party to bear the loss. (47) It appears to us that the bank is responsible for the no delivery of the plant and it cannot plead frustration. It is in evidence of Shri Ravi Tandon, First Secretary of Indian High Commission in Karachi, that the plant was never declared as an evacuee property and that Foreign Exchange Control Restrictions had come into force in Pakistan on the 19th of September, 1949. It would, therefore, appear that the sale d delivery of the plant on March 11, 1950 to Akhtar Ali by the bank's Karachi branch without the consent and knowledge of the distillers and without the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aters of the great divide there was no ark of safety. But with every year of peace the landscape brightened. In 1954 the distillers were able to sort out things with the Pakistan Government. As a, result of the untiring efforts of the distillers and the good offices of the Indian High Commission permission was ultimately obtained on May 22, 1954 when the Government of Pakistan agreed to release the plant on the condition of repatriation of ₹ 30,000. Therefore, it will not be correct to say that the agreement, factually or legally, became impossible of performance so as to attract Section 56 of the Contract Act. We can see no justification for a conclusion, of law that the contract was frustrated. Frustation is not to be lightly invoked as the dissolvent of a contract. No court has an absolving power . (51) It appears to us that the instant case is not a case of frustration but one of abuse of possession. Winfield says, it is possible for you to commit conversion of my goods by wrongfully abusing possession of them when you have already got it. ABUSEof possession which the defendant already had may take many forms, such as sale accompanied by delivery of the plaintiff' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings it cannot now be contended with justice that the Punjab National Bank was a necessary party to the suit and failure to prosecute the claim - against it is fatal to the suit of the distillers. (55) 3. Delivery of Possession : Counsel submitted that possession was delivered by the bank to the distillers by writing to Express Company on September 19, 1951 (Ex. 12) that they had raised their lien on the goods stored with it and that on payment of their charts they may deliver the goods to the distillers. We cannot accept this position. (56) This argument raises a fundamental question for decision : What is the nature of the transaction ? Was it a pledge or a lien ? The trial court found that it was a case of bailment and not pledge. We do not agree. To us it seems a clear case of pledge. (57) The position in Indian Law is the same as in English law. Section 172 of the Contract Act which defines a pledge affirms the English Common law. Section 172 states that the bailment of goods as security for payment of a debt or performance of a promise is called a pledge . The bailor is in this case called the pawnor and the bailee is called the pawnee . According to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a personal right : (61) 29 cases of the plant were stored with the Express Company by the bank. The possession of the goods remained with the bank throughout. To begin with some goods were stored by the bank in its godown, some were stored with Express Company. After the cancellation of the sale in favor of Akhtar Ali all the 29 cases were stared with Express Company. Without the permission of the pledgee the pledger could not obtain the goods. From the letters it is quite clear that the possession was of the bank. Therefore, in law the bank was bound to deliver possession at least in Karachi if not in India. There was (1) the advancing of loan, (2) the endorsement of the documents in favor of the bank enabling it to take delivery and to store goods with it, and (3) after taking delivery the bank stored the goods with Express Company (See A-9 dated May 22, 1950). Their combined effect was that the bank was in control of the goods till the debt was discharged. Such a transaction is pledge. This is a well-known practice followed by the bankers : (62) The pledge should be in a position to redeliver the goods on payment of the debt. If he has put himself in a position where he i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 30,000. From the record it appears to us to be so. But there are two simple answers to this argument. First, it was the duty of the bank to get the restriction removed and deliver the goods. Section 160 casts a duty on the bailee : 160.Return of goods bailed on expiration of time or accomplishment of purpose-It is the duty of the bailee to return, or deliver according to the bailor's directions, the goods bailed, without demand, as soon as the time for which they were bailed has expired or the purpose for which they were bailed has been accomplished. (67) The bank cannot escape from this liability simply by writing to Express Company. It bad to see to it that the goods are delivered to the distillers after they had brought the impediment to its -notice by means of its letters. (See D/31 supra). The complaint of the distillers that they were unable to get the delivery by reason of the hank's default in making payment of damages from its resources in Pakistan fell completely on deaf ears. They distillers' protestations remained unheeded : (68) Secondly, knowledge was certainly imported to the bank in the plaint after the institution of the suit. That the bank k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing possession itself. Law has adopted a fairly good working scheme of possession to confer on the bailor the right to get back that possession of which he parted with in favor of the bailee. This is how the concept of possession is used as a tool of legal thought to invest the bailor with possessory remedies. Nothing could be clearer than the words of UNDEREnglish law, where there is a simple contract of bailment at will the possession of the goods bailed passes to the bailee. The bailor has in such a case the right to immediate possession, and by reason of this right can exercise those possessory remedies which are available to the possessor. The person having the right to immediate possession is, however, frequently referred to in English law as being the 'possessor'-in truth English law has never worked out a completely logical and exhaustive definition of 'possession'. (73) The same is the law in India (74) To summarise : (1)Pledge is abailment of goods to a creditor as a security for some debt or engagement. A bailment or delivery of goods by a debtor to his creditor to be kept till the debt is discharged is called a pledge. Pledge is a kind or class o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t account of the distillers in its books. (3) The Drum and Screw Cap Plant arrived in Karachi in April and June 1947. The bank paid the following two amounts to Francis Klein of Calcutta through whom the goods were purchased from the foreign manufacturers: 1.₹ 1,13,809/5.00 . 2.₹ 1,01,024/6.00 . TOTAL₹ 2,14,833/11.00 . (4) In return the plant was pledged by the distillers with the bank as security for the advance made in the cash credit account. (5) The bank's head office was in Darya Ganj at Delhi. It had its branches in Karachi and Lahore. From England the goods arrived at Karachi port. The bank took delivery of the goods. A part of the plant was stored by the bank in its godown at Karachi. Another part was stored by the bank with a company of clearing and forwarding agents known as the Eastern Express Company Limited, Karachi (Express Company) under its lien. (6) In March 1950 the bank sold and delivered the said plant-to one Akhtar Ali Khan of Pakistan Development Corporation, Karachi. The Express Company also delivered that part of the plant to Akhtar Ali which was stored with them. The bank represented that the sale was for a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ou to give the matter your immediate attention. (9) On August 8, 1951 the distillers cleared the loan account of the bank. They remitted the balance sum in full and final settlement of the account and wrote to the bank: KINDLYarrange to deliver the Drum and Screw Cap Plant to us, at your earliest convenience. (10) This is the starting point of the trouble. On September 19, 1951 the bank wrote the following letter to Express Company EX.12 Bharatbank LIMITED 37,Faiz Bazar, Delhi. 19THSeptember, 1951 REF.HO/RSD/6473 M/S.Eastern Express Co. Ltd., BUNDERRoad, Karachi. (Pakistan). Dear Sir, RE: Outstanding bills for drum making plant stored with you under lien of the bank. OURlien on the plant does not stand now. You may please recover your full amount of up to date unpaid bills for storage charges etc. from Messrs. Jagatjit Distilling and Allied Industries Ltd., with whom you may deal about it in future. YOURSfaithfully, SD/-Illegible Manager. (11) The bank wrote another letter on September 19,1951 to Express Co.: P-18 Bharatbank LIMITED 37,Faiz Bazar, Delhi. 19THSeptember, 1951 REF:H.O./RSD M/S.eastern Express Co. Ltd., BUNDERRoad, KARACHI(Paki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tan, as we have received instructions from them not to give delivery without their permission. YOURSfaithfully, FORthe Eastern Express Co. Ltd. SD/-Illegible Manager. (15) One thing we would mention at the outset that the Pakistan Government prohibited the transfer of the plant because the Lahore Branch of the bank had made the payment of ₹ 30,000.00 to Akhtar Ali on account of damages from their resources in Pakistan. The Pakistan Government considered it to be a violation of the Foreign Exchange Regulations which had come into force in the meanwhile. That Government took the view that the payment of ₹ 30,000.00 should have been made by the bank from their moneys in India and since it was not done they required the Lahore branch of the bank to recoup this sum of ₹ 30,000.00 from India. The bank did not do so. The Pakistan Government did not allow the plant to be delivered to anybody. (16) There was a stalemate. The distillers complained to the bank that in spite of full and final payment of the loan they were not getting the deivery of the plant because of the restrictions imposed by the Pakistan Government owning to the payment of ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported that M/s. Bharat Bank Ltd., Karachi, sold certain items of the consignment in question to M/s. Pakistan Development Corporation Ltd., Karachi, but later redeemed them by refunding the price together with a sum of ₹ 30,000 as damages. As the bank has paid this sum of ₹ 30,000 from its resources in Pakistan, it is necessary that the amount should be recouped by them from India through the State Bank of Pakistan. The release of the machine tools is, therefore, subject to the condition that an amount of ₹ 30,000 is transferred by the head office of M/s. 'Bharat Bank Ltd., in India to their Karachi Branch through the State Bank of Pakistan, 3.You are requested to arrange for this transfer, after which,the necessary permit will be issued for the export of the machinery. YOURSSincerely, SD/-M. L. Rahman. P.Vaidyanathan, ESQR.First Secretary (Commercial) INDIANHigh Commission, Karachi. (19) On the receipt of the conditional 'permission, from Pakistan Government the Indian High Commission wrote to the Government of India the following letter on May 24, 1954. EX.L-I. Firstsecretary (COMMERCIAL) Indianhigh Commission, ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MINISTRYof Commerce and Industry. New Delhi. COPYto Messrs. Jagatjit Distilling and Allied Industries, Kapurthala (Mr. L. P. Jaiswal Camp Karachi.) SD/-(P. Vaidyanathan) COMMERCIALAttache. (20) The Indian High Commission on August 30, 1954 wrote' to the Government of Pakistan as follows :- EX.21. FIRSTSecretary (Commercial), INDIANHigh Commission. VALIKAMahal, Karachi-1. DATED27th/30th- August, 1954. NO.S. 9/ITGC/51/J-35, DEARMr. Rahman, Please refer to your D.O. letter No. 335/515/51 dated the 22nd May, 1954 to Vaidyanathan regarding release of certain machine tools imported before partition for Messrs Jagatjit Distilling and Allied Industries, Kapurthala. 2.The Government of India have allowed, as special case, the remittance of a sum of ₹ 30,0000 by Messrs Bharat Bank (now known as Bharat Nidhi Ltd. Delhi) to their Lahore Branch through the State Bank of Pakistan. Necessary instructions to this effect have been issued by the Ministry of Finance to the Reserve Bank of India. 3.I request you to issue the necessary permit turn the export of the machinery, as early as possible. 4.I shall appreciate an early act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. (3)The distillers we're not liable to pay ₹ 30,000.00 to the bank which the bank had to pay to Akhtar Ali for the cancellation of sale. (4)THEBank was in possession of the machinery on August 9 1951(the date of full and final settlement of the loan account) on behalf of the distillers. (5)THEtransaction was one of bailment and not pledge (6) THEcontract between the bank and the distiilers and not pledge. (7)The State Bank of Pakistan required the bank to replenish the Sum of ₹ 30,000.00 from its funds in India trough its branch in Pakistan. (8)The Bank was liable to remit ₹ 30,000 to Pakistan. (9)The distillers- should themselves arrange to Pay ₹ 30,000 to Pakistan Government and obtain delivery of the plant. (10)The distillers can realise ₹ 30.000 from the bank because the loss was caused by the action of defendant No. 1 . (Bharat Nidhi). (26) The Central Question: Bailee's obligations: The conclusions of the trial judge, if we may say so with respect, are a strange medley of contradictory findings. It is a mixture of findings of an incongrous character Nearly all the issues were decided in favor of distillers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the bank in India to their Karachi branch in Pakistan through the State Bank of Pakistan. This averment was clearly made in paragraph 14 of the plaint. The copy of the letter dated May 22, 1954 by Mr. Rehman to the Indian High Commission was annexed to the plaint. Therefore, the bank could not have denied knowledge of the conditional permission after August 6, 1954. It was open to them to comply with the requirement of the State Bank of Pakistan on the receipt of the information and secure to the distillers the plant by fulfillling the said condition. (30) Whether the distillers would have ultimately obtained delivery of the plant from Express Company is not the question before us in the appeal. The question is : Did the bank clear the obstacle placed in the way of the delivery of the plant to the distillers by paying 'a sum of ₹ 30,000 from its head office in India to their branch in Pakistan through the State Bank of Pakistan ? From the evidence it clearly appears that the Pakistan Government on March 7, 1951 forbade the Express Compapy to dispose of the machinery without its prior approval. , On May 22, 1954 the Government of Pakistan decided to release the plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he buck, to use a colloquial phrase. (33) The Express Company informed the distillers that they had to do three things before delivery of the goods could be made to them. These are : 1.The instructions of the Bharat Bank Delhi to deliver the goods should be confirmed by the Lahore branch. 2.That the distillers should pay their charges. 3.That the distillers should obtain release orders from the Ministry of Supply, Government of Pakistan which had forbidden the disposal of the goods on March 7, 1951. (34) This being the situation of the distillers wrote to the bank on November 2, 1951 an important letter in these words :--- D-31. Jagatjitdistilling And Allied Industries LTD. 2ND Nov., 1951. M/S.Bharat Bank Ltd. 37,Faiz Bazar, Delhi. DEARSir, WE have since received a copy of the letter No. 5172/493/ Mtc dated the 24th October, 1951, addressed by M/s. THEEastern Express Co. Ltd. Karachi to your address in response to your letter foresaid. From this, it is clear that it is necessary for you to obtain release orders from the Directorate of Supply and Development, Government of Pakistan, Karachi before you can effect the delivery to us and also your ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pakistan Government mentioned in the plaint and as such the present suit is not admitted to be maintainable. (41) This paragraph refers to the allegations made in the plaint. But when we turn to the plaint we find it clearly said that the Pakistan Government had forbidden the disposal of the machinery on March 7, 1951, but on May 22, 1954 the Government of Pakistan had decided to release the plant subject to the condition of repatriation of ₹ 30,000 from India to Pakistan. (42) Now the condition of transfer of Rs, 30,000 was not impossible of performance. This meant crediting to Pakistan that amount of foreign exchange in Indian currency as the Indian High Commission put it in their letter dated 22nd/24th May, 1954 (L-l). There is evidence that the Reserve Bank was ready to give permission to the bank to remit ₹ 30,000 from India to Pakistan. The Ministry of Finance, Government of India was also agreeable. There was no hitch or hurdle. The combined efforts of the distillers and Indian High Commission made it possible to obtain the release order subject to this condition. From the evidence of Ram Sahai it appears that the bank was well aware of this impediment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are infinite. GIVINGan illustration he said: Thoughtlessness of the prima donaa who sits in a draught and loses her voice caanot be said to be a frustration of the contract as the resultant frustration is self-induced . (46) The rule that frustration must not be self-induced applies to all deliberate or negligent acts, whether they are actually breaches of contract or not. For it is in all these cases unjust to make the other party to bear the loss. (47) It appears to us that the bank is responsible for the no delivery of the plant and it cannot plead frustration. It is in evidence of Shri Ravi Tandon, First Secretary of Indian High Commission in Karachi, that the plant was never declared as an evacuee property and that Foreign Exchange Control Restrictions had come into force in Pakistan on the 19th of September, 1949. It would, therefore, appear that the sale d delivery of the plant on March 11, 1950 to Akhtar Ali by the bank's Karachi branch without the consent and knowledge of the distillers and without the permission of their own bead office was not proper and legal. In March 1950 the sale had to be cancelled on payment of damages and the machinery was taken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hings with the Pakistan Government. As a, result of the untiring efforts of the distillers and the good offices of the Indian High Commission permission was ultimately obtained on May 22, 1954 when the Government of Pakistan agreed to release the plant on the condition of repatriation of ₹ 30,000. Therefore, it will not be correct to say that the agreement, factually or legally, became impossible of performance so as to attract Section 56 of the Contract Act. We can see no justification for a conclusion, of law that the contract was frustrated. Frustation is not to be lightly invoked as the dissolvent of a contract. No court has an absolving power . (51) It appears to us that the instant case is not a case of frustration but one of abuse of possession. Winfield says, it is possible for you to commit conversion of my goods by wrongfully abusing possession of them when you have already got it. ABUSEof possession which the defendant already had may take many forms, such as sale accompanied by delivery of the plaintiff's goods or their documents of title to another, pawning them, or otherwise disposing of them. Even the use of a borrowed car for the transporting of uncus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is fatal to the suit of the distillers. (55) 3. Delivery of Possession : Counsel submitted that possession was delivered by the bank to the distillers by writing to Express Company on September 19, 1951 (Ex. 12) that they had raised their lien on the goods stored with it and that on payment of their charts they may deliver the goods to the distillers. We cannot accept this position. (56) This argument raises a fundamental question for decision : What is the nature of the transaction ? Was it a pledge or a lien ? The trial court found that it was a case of bailment and not pledge. We do not agree. To us it seems a clear case of pledge. (57) The position in Indian Law is the same as in English law. Section 172 of the Contract Act which defines a pledge affirms the English Common law. Section 172 states that the bailment of goods as security for payment of a debt or performance of a promise is called a pledge . The bailor is in this case called the pawnor and the bailee is called the pawnee . According to section 148 of the Contract Act a bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ughout. To begin with some goods were stored by the bank in its godown, some were stored with Express Company. After the cancellation of the sale in favor of Akhtar Ali all the 29 cases were stared with Express Company. Without the permission of the pledgee the pledger could not obtain the goods. From the letters it is quite clear that the possession was of the bank. Therefore, in law the bank was bound to deliver possession at least in Karachi if not in India. There was (1) the advancing of loan, (2) the endorsement of the documents in favor of the bank enabling it to take delivery and to store goods with it, and (3) after taking delivery the bank stored the goods with Express Company (See A-9 dated May 22, 1950). Their combined effect was that the bank was in control of the goods till the debt was discharged. Such a transaction is pledge. This is a well-known practice followed by the bankers : (62) The pledge should be in a position to redeliver the goods on payment of the debt. If he has put himself in a position where he is not able to redeliver the goods he cannot obtain a decree against.the pledger. If it were otherwise, the result would be thathe would recover the debt an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction removed and deliver the goods. Section 160 casts a duty on the bailee : 160.Return of goods bailed on expiration of time or accomplishment of purpose-It is the duty of the bailee to return, or deliver according to the bailor's directions, the goods bailed, without demand, as soon as the time for which they were bailed has expired or the purpose for which they were bailed has been accomplished. (67) The bank cannot escape from this liability simply by writing to Express Company. It bad to see to it that the goods are delivered to the distillers after they had brought the impediment to its -notice by means of its letters. (See D/31 supra). The complaint of the distillers that they were unable to get the delivery by reason of the hank's default in making payment of damages from its resources in Pakistan fell completely on deaf ears. They distillers' protestations remained unheeded : (68) Secondly, knowledge was certainly imported to the bank in the plaint after the institution of the suit. That the bank knew about the obstacle before the institution of the suit is also clear from the evidence of Ram Sahai who was at the time the manager of the head offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parted with in favor of the bailee. This is how the concept of possession is used as a tool of legal thought to invest the bailor with possessory remedies. Nothing could be clearer than the words of UNDEREnglish law, where there is a simple contract of bailment at will the possession of the goods bailed passes to the bailee. The bailor has in such a case the right to immediate possession, and by reason of this right can exercise those possessory remedies which are available to the possessor. The person having the right to immediate possession is, however, frequently referred to in English law as being the 'possessor'-in truth English law has never worked out a completely logical and exhaustive definition of 'possession'. (73) The same is the law in India (74) To summarise : (1)Pledge is abailment of goods to a creditor as a security for some debt or engagement. A bailment or delivery of goods by a debtor to his creditor to be kept till the debt is discharged is called a pledge. Pledge is a kind or class of bailment as was said by Lord Holt in the leading authority of Coggs v. Bernard (supra). (2)The bailee or the pledgee agrees to restore the thing to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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