Wanchoo, J. - (1.) These four appeals on certificates granted by the High Court at Calcutta arise out of one judgment and will be dealt with together. The brief facts necessary for present purposes are these:In September, 1946, there was food shortage in the Country. In order to relieve this shortage, the Government of India entered into an agreement with the President of Argentine Institute for Promotion of Trade by which it undertook to freeze, requisition and take over and sell to the Argentine Institute and Ship to Argentine 30,000 tons of hessian and in return the Institute guaranteed to obtain licences for shipment from Argentine of maize and wheat offals already purchased by the Government of India in Argentine. This agreement was arrived at on September 27, 1946. In anticipation of this agreement, the Government of India on September 20, 1946, addressed letters to the managing agents of various jute mills in Bengal demanding from them information as to stocks of hessian of certain description held by the mills under their managing agencies and prohibiting them from selling, transferring, removing, consuming or otherwise disposing of any article enumerated in Sch. B to the communication. This demand was made under sub-rule (5) of R. 75A of the Defence of India Rules (hereinafter called the Rules). After the information had been gathered, the Government of India issued an order on September 30, 1946, to the same managing agents requisitioning the hessian specified in the schedule to the order and directing them and every other person in possession of the said property to deliver it to the Director of Supplies, Calcutta, and in the meantime not to dispose of the property in any manner without the permission of the Central Government. The schedule to the order in each case indicated the mill from which the requisition was made, the quantity, the description of the hessian and the name of the registered stock-holders. These requisition orders were served upon the managing agents of the mills under sub-rule (1) of R. 75A of the Rules on that very day. Thereafter on the same day, that is, September 30, 1946, the Government of India issued a notice under sub-rule (2) of R. 75A to the managing agents communicating that it had been decided to acquire the property under that sub-rule. The managing agents were further informed that by virtue of sub-rule (3) of R. 75A the said property would vest in the Central Government at the beginning of the day on which the notice was served upon them free from any mortgage, pledge, lien or other similar encumbrance. The notices of acquisition were accompanied by schedules similar to the schedules accompanying the requisition-orders. This notice of acquisition was also served on the same day on all the managing agents. Further on the same day the deputy Director of Supplies, Government of India, wrote to the Secretary, Indian Jute Mills Association, that shipping instructions would be issued in due course by the Director of Supplies, Calcutta, with respect to hessian requisitioned and acquired under the orders and notices already referred to. The Government then tried to take possession of the hessian requisitioned and acquired but the mills and the holders of delivery-orders resisted the Government's attempt on the ground that the orders of requisition and acquisition were invalid. The Government of India then filed the suit out of which the present appeals have arisen on December 11, 1946, for enforcing the orders of requisition and acquisition and also applied for a receiver to be appointed. This application was resisted and it became apparent that it would take some time before it could be disposed of. As ships which were to carry the hessian to Argentine were ready and shipment could not be delayed, the Government on January 7, 1947, promulgated an Ordinance, being Ordinance No. 1 of 1947, whereby notwithstanding the pendency of the suit the title and possession of the goods requisitioned and acquired were made to vest in the Government. The Government then took possession of the hessian and shipped the same to Argentine. The suit however did not became infructuous or unnecessary after this because S. 3 of the Ordinance provided that the suit should be proceeded with in regard to one question involved in it and decision thereon obtained. Under S. 3 it was provided that if in the suit it was finally decided that the said goods were of validly requisitioned or acquired by the Central Government on the 30th day of September, 1946, each of the several previous owners of the said goods would be entitled to receive as compensation from the Central Government the market price prevailing on the date of the institution of the aforesaid suit; but if no such decision was made in the suit the said goods would be deemed to have been validly requisitioned and acquired by the Central Government on the 30th September 1946, and the amount of compensation to be paid by the Central Government to the several previous owners of the said goods would be determined in accordance with the provisions of law in force on September 30, 1946, relating to the requisition and acquisition of movable property under the rules made under the Defence of India Act, 1939. It may be mentioned that the Defence of India Act, 1939, and the Rules made thereunder came to an end on September 30, 1946. The main question therefore which remained to be decided in the suit was whether the orders of requisition and acquisition were valid and binding on the respective defendants; and the suit was confined to obtaining a declaration to that effect. If a declaration was granted to the Government of India as prayed, the compensation would be determined as on September 30, 1946, in accordance with the provisions of law in force on that day relating to the requisition and acquisition of movable property under the rules made under the Defence of India Act, 1939. On the other hand, if no such declaration was granted, compensation would have to be arrived at in accordance with the market price of hessian prevailing on the date on which the suit was filed, i.e., December 11, 1946.
(2.) The main questions which arose for determination in the trial court were four, namely-(1) Where the alleged orders of requisition dated September 30, 1946, mentioned in the plaint properly and/or validly and/or duly served (2) Did such alleged orders effect any valid requisition of the goods mentioned in the Schedules to such orders (3) Were the orders and notices of acquisition mentioned in the plaint properly made or given and/or duly served (4) Is there any custom of trade practice or usage that upon delivery orders being made over to the buyers against payment the property in the goods represented by such delivery orders passed to such buyers
(3.) Sarkar, J. who tried the suit on the original side of the High Court held that the orders of requisition were properly and validly made. He further held that there was no service of the orders on the mills which were in possession of the hessian and which had to be served in order to effect a valid requisition. He therefore held that as there was no proper or due service of the orders there was no valid or binding requisition. Further on the question of acquisition he held that as the goods requisitioned and acquired were subject to pucca delivery orders and in view of the usage that pucca delivery order were only issued against payment, were passed from hand to hand by endorsement and were sold and dealt with in the market as absolutely representing the goods to which they relate and as the mills were estopped from challenging that the property in the goods had passed (see Anglo-India Jute Mills Co. vs. Omademull, ILR 38 Cal 127) the Government which was claiming ownership through the mills was also subject to estoppel and as the holders of the delivery-orders being the owners of the property were not served on September 30, 1946, under R. 75-A(2) of the Rules, the property in the goods therefore did not pass on September 30, 1946. On this view the suit was dismissed.;