P.K.GOSWAMI - (1.) THESE two appeals are on certificate by the Calcutta High Court from its common judgment of 6-4-1967, in Appeal Nos. 175 and 177 of 1963.
(2.) RESPONDENT No. 1 prior to its liquidation was a private limited company carrying on business as an importer and dealer in sewing machines. On or about 16/04/1958, the respondent was granted an import licence by the Joint Chief Controller of Imports and Exports, Bombay by which it was authorised to import industrial sewing machines together with spare parts to the extent of 5 per cent, of the total value of the goods to be imported. The total value of the imports authorised was Rs. 47,406.00. The respondent could under the licence import the goods through any port in India. Out of the permitted value under the licence, goods worth about Rs. 9,919.00 were imported by the respondent through the Bombay port. The respondent then wanted to arrange the rest of the import through the Calcutta port. At the request of the respondent the Customs authorities of Bombay gave a release order in respect of the remaining goods to be imported in terms of the aforesaid licence through the Calcutta port. By an indent of 11/11/1958, the respondent placed orders with M/s. Fuji Trading Company Limited, Osaka, Japan for supply of 162 pieces of industrial sewing machine head "Raruna Brand" and 208 dozen of oscillating rock shafts. By two other indents of 3/12/1958, the respondent sent orders to M/s. Alickson & Company, Osaka, for the supply of 59 sets of industrial sewing machine head "Prosper Brand" and certain industrial sewing machine parts. All these three indents were accepted by the two Japanese Companies in due course. M/s. Fuji Trading Company Limited shipped the goods against orders placed with them on 30/01/1959, by s. s. Sydney Maru. M/s. Alickson & Company also shipped the goods covered by the indents placed with them on 28/01/1959, by s. s. State of Andhra. The respondent apparently had some financial difficulties for releasing the goods at Bombay, as according to it, it did not have sufficient credit with the Bombay Bank "to open the letter of credit with payment of a nominal margin only." The respondent, therefore, approached the Bombay and Calcutta Cycle Co. (briefly the Cycle Company, a partnership firm, which also used to carry on business as dealers in sewing machines and had previous dealings with the respondent. The Cycle Company agreed to guarantee the letter of credit if it were opened through their Bankers at Delhi. The respondent agreed to do so and thereupon at the request of the Cycle Company the Merchantile Bank Limited of Delhi agreed to act as the respondent's Bankers and also to allow the respondent to open the letter of credit. Thereafter on or about 29/12/1958, the respondent opened with the Marcantile Bank Limited Delhi, a letter of credit being L.C. No. 101/1085. The respondent advanced a sum of Rs. 2894.80 np by way of marginal deposit to the extent of 10 per cent of the value of the letter of credit and the necessary Bank charges.
(3.) ON 20/02/1959, while the said goods were on the high seas there was an agreement between the respondent and the Cycle Company by which the respondent agreed to sell and the Cycle Company agreed to buy at a future date certain quantities of industrial sewing machine heads and oscillating rock shafts. The contract of sale may be quoted in extenso. "Sale Contract We Messrs. Padnekar and Co. Private Ltd., 172, Girgaon Road, Bombay 4, hereby agree to sell in forward sale Industrial Sewing Machine Heads and parts thereof to Messrs. Bombay & Calcutta Cycle Co. of 48, Popatwadi, Kalbadevi Road, Bombay on the following terms and conditions : JUDGEMENT_790_3_1976Html1.htm S. S. State of Andhra and S. S. Sydney Maru arrived at the port of Calcutta on February 26 and February 27, 1959, reSpectively. The reSpondent inStructed the BankerS to engage M/S. Mackinon Mackenzie & Co. Pvt. Ltd. (briefly the Clearing AgentS) aS AgentS for clearing the goodS arriving by the Said two ShipS. The BankerS were alSo aSked to deSpatch the Shipping documentS to the Clearing AgentS. The BankerS carried out theSe inStructionS and the Clearing AgentS filed with the CuStomS authoritieS, Calcutta, billS of entry in reSpect of the aforementioned goodS for conSumption in the name of the reSpondent. On the requiSition of the CuStomS authoritieS Several documentS, aS required, were Supplied to them. Information aS to who guaranteed for the letter of credit, who retained the documentS and who paid for the goodS were alSo Supplied to the CuStomS authoritieS by the Clearing AgentS aS deSired.;