Contract Act, 1872 | Case Reference

Contract Act, 1872

(IX OF 1872)

Sections 2-9-Interpretation clause, what constitutes agreement. -Price is the essence of sale of immovable property-No sale unless the price is fixed or mode of determining the price is shown. M/s Chittagong Engineering & Electric Supply vs Income-tax Officer 22 DLR (SC) 443.

Offer and acceptance-where a contract may be said 'concluded'. Invitation for offer. 65 IC 282.

-an advertisement for sale by public auction is not an offer. 1923 Mad 582: 72 IC 436.

-quotation of price is not an offer. 1951 SC 184: 1951 (SC) J 257; 6 DLR (SC) 243.

-in order to convert a proposal into a promise the acceptance must be absolute and until there is such an acceptance, the stage of negotiation has not passed and no legal obligation is imposed, 1931 (Lah) 160: 1930 (Lah) 374; 1922 (Pat) 24; 1939 (Cal) 500.

-a mere reference to the preparation of a formal document does not prevent a contract otherwise binding being complete, 20 CWN 66: 32 IC 53: 60 C 1372: 1934 (Cal) 235. it is the intention of the parties which determines whether a formal document is absolutely necessary to conclude the contract. 478 335; 1923 PC 47; 28 CWN 73; 60 C 980; 57 CLJ 264: 1933 PC 29: 1933 MWN 10; 1933 ALJ 611 RC: 1941 (Bom) 247.

-where the parties entered into an agreement of sale "subject to the approval of title by the purchaser's Solicitor", the contract is concluded. 25 B 110: 18 CWN 568; 1932 (Bom) 51.

there may be contract by one executing document and the other accepting it. 20 CWN 408: 35 C 683: 12 CWN 628: 6 C 94, 4 CLJ 510.

-a contract to give an immovable property may be made by letter which is enforceable. 20 CWN 1054: 39, M. 509. acceptance may be made otherwise than in words. 49A 674, 1927 (All) 407.

-an offer must be accepted within a reasonable time. 42 M 776.

-Insurance policy, when the proposal and acceptance is complete 1934 (All) 298: 1933 (Mad) 764; 1933 MWN 937; 1952 (Cal) 69: 56 CWN 418. Construction-the court is not entitled to see what the parties might have intended. 85 IC 99: 1925 All 97.

-it is not proper that a contract in one case should be interpreted in the view taken with regard to another contract which is difficultly worded and is under consideration in another case. 42 CLJ 172;1925 (Cal) 1248.

-a reasonable interpretation is prima facie to be adopted if words admit. Words cannot be added which would result in adding a new term not involved in the purpose of the contract though words can be added to give effect to obvious intention. 1934 PC 254; 152 IC 401 PC. -principles of construction of a contract. 47 CLJ 327; 1927 PC 275 PC.

Consideration-the definition of the term "consideration" in section 2(d) is wider than under the English Law. It need not necessarily be a benefit received by the obligor, it may be for the benefit of the third person 61 C 841; 38 CWN 682 (Cal) 682; 1934 (All) 271.

Charter party agreement-Like ordinary contracts the terms of a charter party agreement can also be spelt from the correspondence exchanged between the parties. Pan Islamic Steamship Co Lid vs General Import and Exports Ltd PLD 1959 (Kar) 750. -No party can unilaterally add to the terms of a contract. PLD 1976 Karachi 14.

-Mutuality-So long as one of the parties to the transaction could back out of it at his choice there can be no concluded or binding contract between the parties although they may have agreed upon many of the material terms. PLD 1985 Quetta 167.

Proof of contract-Question whether there was a concluded contract was always question of fact and has to be inferred from evidence led and documents produced by parties. PLD 1983 Karachi 387 (DB)

-Parties contemplating execution of document-If the documents or letter relied on as constituting a contract contemplate the execution of a further contract between the parties it is a question of construction whether the execution of the further contract is a question of term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract and reference to the more formal document may be ignored. In a contract for sale of immovable property, document acknowledging receipt of advance amount by defendant towards sale of suit property containing essential terms of a binding agreement and giving full descriptions of vendor and vendee and total sale consideration, mere absence of stipulations regarding time of payment of balance price and by whom other formalities in connection with completion of sale are to be performed cannot render the contract void or unforceable. Mere fact that parties had agreed to execute another formal agreement setting forth manner and mechanism in which agreed terms of conditions were to be given effect to was not sufficient to detract the document from being considered as a concluded contract for sale of suit property. PLD 1981 Karachi 398.

Contract-Oral Contract is as valid as written contract-But in the matter of oral contract, once it is denied by one of the parties, a very heavy onus of proof lies on the other party in establishing its truth. Rezaur Rahman & others vs Al-Haj Ahmed Hossain Khan (1986) BLD 14.

-Oral contract. An oral contract by which itself the parties intended to be bound is valid and enforceable. PLD 1981 Karachi 170.

-Parties to contract-Where the partners of a firm decided to convert it into a company and new shareholders were brought in but before the actual incorporation of the company the firm decided to transfer the assets of the firm to the company of which they would also be shareholders. It was held that this did not bring about a contract between the firm and the company. It could at the most be an offer by the firm, which could be accepted by the company after its incorporation. PLD 1980 Lahore 86 (DB).

-Competence to contract-A company can enter into a contract only after its incorporation. Where an agreement was entered into on behalf of the company before its incorporation. It was held that even if there was an agreement, it was between the partners inter se or partners and promoters but not with the company, which could not be a party to the contract and therefore the company could not after its incorporation enforce it. PLD 1980 Lahore 86 (DB).

-Successor of party-Agreement for securing cash credit facility and memorandum of deposit of title deeds signed by predecessor would bind his successors on equitable mortgage of property. PLD 1986 Karachi 107.

-Formalities in making contract-Where the law has prescribed certain formalities those formalities should be complied with to create a contract capable of attaching liability. If the statutory requirement be that the contract should be executed in a particular manner and that requirement is also mandatory, there cannot be the slightest doubt that either the document should be executed in that manner or not at all. If the contract is executed in violation of such requirement it is invalid. PLD 1976 Lahore 1192.

-Government contract-Where no written agreement was concluded by the contractor with the Government. Some proposals were made and accepted but they required the final concurrence of the Financial Advisor, so that an outstanding issue might be settled once for all. It was held: that in the absence of a concluded agreement, the plaintiffs, claims on the basis of the decisions recorded in the minutes against both the Government of Pakistan as well as the Provincial Government cannot be sustained. PLD 1976 Karachi 623. Ambiguous language-Where an ambiguous expression has been used in a document, it should be construed against the party using it. PLD 1976 Karachi 458.

Contract-Terms which may be implied In other words a term which is necessary to give the transaction such efficacy as both parties must have in all reason intended it to have, can be considered to be implied in a written contract. PLD 1975 Lahore 896.

-Shipowner not liable (in the absence of a special contract) to notify the arrival of ship to the consignee-In case of contractual obligation, a letter addressed to the consignee is enough.

Two clauses in a bill of lading, one to the effect that notice is to be given to the consignee and the other saying that such directions are for the purpose of the ship's agent and not for creating any responsibility to the consignee No obligation to notify the consignee is thereby created. Messers Mackinnon Mackenzie & Co of Pakistan, Ltd vs Eastern Mercantile Co. 10 DLR 228.

Shipowner's liability to notify the charterer the arrival of goods. Messers Mackinnon Mackenzie & Co of Pakistan, Ltd vs Eastern Mercantile Co. 10 DLR 228.

CIF Cost, insurance and freight CIF contract explained. Syed & Co vs Messers MM Ispahani Lid, Chittagong and another 10 DLR 552. Of sale and hire-purchase agreement different between the two. Arabinda Poddar vs Shewram Das 12 DLR 229.

-Contract of the sale of movable property-Presumption is that the purchaser has become the owner when the contract is made. Shewram Das Agarwala vs Arobinda Poddar 13 DLR (SC) 141. Section 10 Alteration in an agreement does not necessarily amount to forgery-if an alteration changes the character of a document and alters the rights, liabilities and legal position of the parties in that case only it can be said that such an alteration is a material alteration which amounts to forgery and for such forgery the document may be treated as void. Mohiuddin Ahmed vs Lutfur Rahman 44 DLR 48.

Section 2(a)- Insurance Policy The offer to enter into a contract of insurance, as a general rule is considered to have been addressed to the insurers by the person who is seeking to protect himself by insurance against loss. He may have been invited by the insurers to put himself communication with them but whether the invitation comes to him from the insurers direct, or through the medium of an agent or as a member of the public through an advertisement, the position remained unchanged and he must submit his proposal which they may accept or decline at their pleasure. PLD 1978 Lahore 475.

Tender notice-A tender notice means only an invitation extended to the contractors for making offers. It does not amount to an offer or proposal and the quotation of rates offered by the contractor does not amount to an acceptance of offer or proposal thereby creating any promise or agreement! It is by the acceptiince of any of theile offers or proposals by the persons calling for tenders that it becomes a promise or an agreement. Thus the mere fact that a person made a certain quotation in response to the tender notice, even granting that it was the lowest quotation, will not, in any manner create an obligation to accept it on the person who issued the tender notice. PLD 1983 Karachi 340 (DB).

Auction by public functionaries Action in case of public functionaries stands at a different footing from ordinary auctions on being unsuccessful in a bid no bidder can claim, as of right, another mode of disposal of the property, the auction of a public functionary entering into an ordinary contract is different from entering into a contract through the process of tenders: The basic concept of financial dealing in the latter case is different from the former. Any serious deviation in the latter mode once adopted without compelling justification, might set at naught the entire concept of clean financial dealings. PLD 1979 Lahore 930 (DB)

Section 2(d) Agreement between debtor and strangers about transfer of business subsequent to borrowings of money by debtor would not bind creditors as to terms of such agreement. Strangers, however, could contest suit on behalf of debtor. PLD 1986 Karachi 207.

Trust in favour of Stranger-Where a contract has created a trust in favour of a person who is not a party, a suit by such a party as cesti que trust is maintainable, PLD 1984 Lah 59 

-Where a Contract in form of a compromise was made between respondent and another person creating a Trust in favour of Stranger/Petitioner and respondent became trustee of beneficial interest resting in petitioner. Mere fact that the petitioner was stranger to contract was not sufficient to hold that he had no cause of action in the suit filed by him against the respondent to enforce the contract. PLD 1984 Lah 59. 

Agreement to sell-effect-An agreement to sell does not create any right, title or interest in immovable property. PLD 1986 Lahore 399.

Section 2(c)–

When the land sold and the price quoted in the sale deed do not represent the land and price as agreed in the agreement, the deed cannot be accepted in law as executed as part performance of the contract. Saroj Kanta Sarker and others vs Seraj–ud–Dowla 56 DLR 39

Sections 2 and 10         

From a combined reading of the clauses of sec-tion 2 of the Contract Act read with the paragraphs of the preambles and the terms of three agreements, it is clear that defendant No.3 entered into an agreement with defendant Nos.1 and 2 to sign the tripartite agreement without any reservation in case the developer forward sells its share of the flats of the project 'Heritage'. The provisions of section 10 of the Contract Act also come in aid of the plaintiff. It appears that the land owner of his own accord agreed to sign the agreement to be exe-cuted between the developer and the intending buyers of the flats which fell in the share of the developer and hence the plea of the defendants 4 and 5 that their predecessor, defendant No. 3 not being a signatory to the tripartite agreement the same cannot be enforced against them is not legally sustainable. Md. Atif Atiq and another Vs. Nurun Nahar Begum and others (Civil), 2 LNJ 142  

Applicability of the Act-The Contract Act deals only with that part of the law of contract applicable to British India. 1924 (Cal) 990. The Contract Act is not exhaustive and where the Act does not cover the case with which the Court has to deal, the Court is bound to follow the principles of the English Common Law, i.e. the rules of justice, equity and conscience. 56 B 101; 1932 (Bom) 168; 62 (Cal) 612; 39 CWN 461; 1946 (Nag) 114.

The Contract Act does not say anything about the place where the contract is made and it is no part of the ordinary law of contract. Meaning of cause of action with reference to place of contract. 58 C 5931 (Cal) 659.

-Law applicable where parties belong to different countries 

Where the parties have expressed their intention that the contract was to be governed by law, it is not possible to accept that the law of the place of preference of the contract lex loci solution is to be deemed to be the proper law of the contract governing the substance of the obligation. In the absence of an agreement to the contrary, the same law applies to all the obligations under the contract and the Courts will not readily split the contract. The contract expressly and unequivocally stipulated for payment of the price in pound sterling. That currency was, therefore, the money of account under the proper law of the contract although the actual mode of payment was governed by another principle of International Law relating to foreign Currency obligation called the nominatistic principle i.e. by the law of the place of payment. PLD 1979 Kar 269.

-Whether the proper law is the lex Loci Contract us or lex Loci solutionies, the absence of any expressed intention is a matter of presumption. It is open to Court to determine whether there existed any   implied or inferred choice of Law in parties contract. PLD 1981 Karachi 197.

-Where a foreign-Court applied Law of Pakistan in determining question whether repudiation of contract by appellant was justified on basis of provision of Foreign Exchange Regulation Act, the Court upheld its decision. PLD 1981 Karachi 197.

-The contract Act embodies a number of limiting principles which create mutual rights and obligations in a codified form, but so long as the parties do not violate some legal prohibition, they can agree on whatsoever terms they like in respect of the subject matter of their contract, and the law, which includes principles, trade practices and customs having the force of Law, will give effect to them. The provisions of the contract act including the law of agency embodied in the Contract Act, 1872, are not exclusive, speaking as a whole, but to the extent it lays down certain provisions it is exhaustive and imperative. PLD 1986 Karachi 234.

-Where there is an ambiguity in the Language of a contract, it must be interpreted against the party who used the expression and in favour of the opposite party. PLD 1976 Karachi 458.

-No party can add to the terms of a contract. PLD 1976 Karachi 14.

-The intention of the parties has to be gathered not only from the words used in the contracts by the parties but also from the circumstances, their belief, knowledge and intention as expressed in their correspondence. PLD 1979 Karachi 88.

-In interpreting the terms of a contract, the court ought not to imply a term unless there is evidence that both parties must have intended that it should be terms of the contract, and the power of the Court of implying terms which the parties have not expressed should be exercised very sparingly and only in cases of necessity. PLD 1979 Karachi 88.

 

Section 2(d), 10 & 23 Read with Premises Rent Control Ordinance, 1963, Section 10(a) & 10(b)-Lease agreement contemplating advance rent to be liquidated in two years by adjustment of half of the monthly rental every month-consideration or object of lease agreement, whether unlawful lease agreement, whether enforceable at law or whether violative of the rent control ordinance, 1963-Lease Agreement being for a term of two years, whether compulsorily registerable and whether admissible in evidence. Shamsuddin Ahmed, vs Mohd. Hassan & others 31 DLR (AD) 155.

Section 2(f)-Agreement must be in proper form-Failure to comply with statutory provisions relating to the manner in which a particular agreement should be made would render it void. PLD 1976 Lahore 1192.

Section 2(g)-Void and voidable distinction between-The expression "void" in the strict and accurate sense means" "absolutely null" that is to say incapable of rectification or confirmation and of no effect whatever. The word "voidable" on the other hand is some thing which could be avoided or confirmed and which is not absolutely void. In other words what is voidable has some force or effect, but which may be set aside or annulled for some error of inherent vice or defect. "Thus that which is voidable operates to accomplish the thing sought to be accomplished until the fatal vice in the transaction has been judicially ascertained and declared". A common place instance of a void act or transaction in the sense of an absolute nullity is an agreement by a person under a legal disability, e.g. a minor or a person of unsound mind. Such act is void abinitio and is incapable of ratification or confirmation. Law forbids the enforcement of such a transaction even if the minor were to ratify if after attaining majority. This is clearly distinguishable from a case in which a thing or an act is "relatively void" which the Law condemns as wrong to the individual concerned who can avoid it by appropriate proceedings. A common place instance of such transaction is that which is brought about by undue influence, fraud etc which remains of full effect unless avoided by appropriate proceedings. PLD 1976(SC) 258.

Section 2(h)-Earnest money to bind a contract must follow and not precede the same. If there is no meeting of minds of the parties, consensus ad idem, there cannot be any question of earnest money. Bangladesh Moktijoddah Kalyan Trust represented by the Managing Director v Kamal Trading Agency and others 50 DLR (AD) 171.

Section 2(h)-Agreements for letter of credit, cash credit and hypothecation deed for advances, duly signed by debtor would bind debtor to terms and conditions mentioned in such documents. PLD 1986 Karachi 107.

Letter of allotment of land-A document offering plots for construction of houses containing therein memorandum of acceptance, setting forth terms and conditions for allotment of plots would have all the characteristics and necessary ingredients of a contract between parties. Therefore an allotment order relating to plots was nothing but a contract which came into being as a result of offer by Government to sell and acceptance by allottees. PLD 1987 Lahore 440.

-Stage when contract is made-The question whether the parties had reached a concluded contract or not, is a question of fact to be deduced from the correspondence, and other documentary and oral evidence. The true test for deciding this question is to ascertain whether the parties were of one mind on all the material terms at the time it is said to have been finalised between them and whether they intended that the matter was closed and concluded between them. PLD 1977 Karachi 377.

Cancellation or alteration of contract-A party to a contract is not entitled in law to cancel a concluded contract unilaterally. Having entered into an agreement, it is not open to the defendant to resile from the same on untenable grounds as he pleases. Therefore, such a cancellation has no effect in law. Similarly unilateral addition to terms is not permissible. PLD 1976 Karachi 14. PLJ 1976 Kar 58 (DB).

Communication, acceptance, etc It is impracticable to consider what are the terms of a particular contract without considering precisely what steps constituted the offer and what constituted the acceptance and precisely what particular terms ought to be read into the contraer (6) 3 DLR 23.

Sections 3 and 4 The tenderer acquired no vested right of a property merely because his tender for that property had not been rejected and his earnest money had not been refunded by the Corporation. As there was no definite communication of acceptance of tender by the Corporation no vested right was acquired by the plaintiff. Sahana Chowdhury (Widow) and others vs Md Ibrahim Khan and another 6 BLC (AD) 67

Section 4-Acceptance through letter or telegram-As soon as the acceptance is posted or sent by telegram, the acceptance is complete against the proposer and the contract is concluded. A person posting a letter of acceptance is not answerable for casualities occurring at the post office. Consequently, the contract was complete and binding on the proposer immediately after the acceptance was posted and it was not revoked. It is rather the liability of the acceptor that would start only after the acceptance comes to the knowledge of the proposer. PLD 1984 Lahore 430.

-Place of contract-The contract is made at the time when and at the place where the letter of acceptance is posted PLD 1984 Lahore 430.  

-Revocation of contract-A communication of revocation is effective when the letter of revocation is received by the addressee. Where before an acceptance sent by letter reaches the offer or a telegram revoking the acceptance reaches him, no concluded contract can come into existence. PLD 1984 Lahore 430. 

-Executory contract ripens into a completed contract when the consignor in the foreign territory despatches the goods under CIF contract and the consignee becomes the owner thereof with transit risk. S Sibtain Fazli vs Star Film Distributors 14 DLR 307.

Contract  Act, 1872 (IX of 1872)   

Section —2(h)   

A  contract is the creation of an agreement between the parties. Where the parties  under the terms and conditions of the contract agree to incorporate an  arbitration clause, that clause stands apart from the rights and obligations  under the contract, since it was incorporated as a machinery for the settlement  of any dispute that may arise out of or in relation to or consequent to or  concerning the contract. Bangladesh Jute  Mills Corporation Vs. Maico Jute and Bag Corp. and Ors. 10BLT (HCD)223   

Section 2(h)–

Earnest money to bind a contract must follow and not precede the same. If there is no meeting of minds of the parties, consensus ad idem, there cannot be any question of earnest money. 

Bangladesh Moktijoddah Kalyan Trust represented by the Managing Director vs Kamal Trading Agency and others 50DLR (AD) 171.

Section 2(g)—

The correct legal position has been stated by Mr Rafique-ul-Huq and Mr Mahmudul Islam. In respect of the contention of Mr Huq that the use of the word "void" or "voidable" is applicable to contract and they should not be used in other context is difficult to accept. It is true that the said expressions are frequently used in respect of contract. Bu t nevertheless, an order of the Court can also be Void' or Voidable. Razia Satter vs Azizul Huq 12 BLC 357.

Sections—3 and 4

The tender floated by the House Building Finance Corporation for the sale of a mortgaged property has to be accepted for the purpose of concluding a contract. The alleged information by a nominated officer cannot be a proper communication of acceptance by the Corporation. The tenderer acquired no vested right on the property merely because his tender for that property had not been rejected and his earnest money had not been refunded by the Corporation. As there was no definite communication of acceptance of tender by the Corporation no vested right was acquired by the plaintiff. Sahana Chowdhury (widow) and others Vs Md Ibrahim Khan and another, 21 BLD (AD) 79.

Sections 3 and 4—

The tenderer acquired no vested right of a property merely because his tender for that property had not been rejected and his earnest money had not been refunded by the Corporation. As there was no definite communication of acceptance of tender by the Corporation no vested right was acquired by the plaintiff. Sahana Chowdhury (Widow) and others vs Md Ibrahim Khan and another 6 BLC (AD) 67. 

Sections 3,4 and 8—

In the instant case, by accepting the offer of defendant No. 3 by  defendant  No.   1 and   delivery  of possession of a part of the suit holding there was a concluded contract between defendant No, 1 and defendant No. 3 and subsequent amendment of the Bangladesh Abandoned Property (Building in Urban Areas) Rules, 1972 by sub-rule (4A) could not take away the vested right or be detrimental to the right of defendant No. 3 but the Courts below committed an error of law in holding that, the auction sale was not complete and the plaintiff had pre-emptory right to make offer of the highest bid made in the auction on the strength of subsequent amendment of the Rules by inserting sub-rule (4A) in Rule 10 of the Bangladesh Abandoned Property (Building in Urban Areas) Rules, 1972. United Commercial Bank Ltd and anr vs Rahimafrooz Batteries Ltd and ors 7 BLC (AD) 73.

Sections 4, 5 & 73—

The offer of the plaintiff was accepted by the defendant seller by its letter of acceptance, Exhibit-2(a). Con­sequently, there was a concluded contract between the plaintiff buyer and the defen­dant seller as regards sale of the suit property. But the plaintiff buyer failed to pay the aforesaid sum even within the extended time and thus committed breach of the contract. The defendant seller was therefore entitled to forfeit and it did forfeit the earnest money for breach of the above terms and conditions of the contract. Mesbahuddin Ahmed vs James Finlay 12 BLC (AD) 156.

Sections 4, 5 & 21—

There was a con­tract between the parties. As per contract the plaintiff deposited to the defendant's bank and the defendant being fully satisfied has given the work order and delivery order of the goods in favour of the plaintiff. The defendant suddenly wanted to retract from his commitment saying that the work order and delivery order has been given in violation of the Store Manual. The reason for retraction from the contract by the defendant was not assigned to the plaintiff which defeats the principle of natural justice. Bangladesh Karma Sangsthan Sangstha vs Power Development Board 15 BLC 600.

Sections 4 & 3-The tenderer acquired no vested right of a property merely because his tender for that property had not been rejected and his earnest money had not been refunded by the Corporation. As there was no definite communication of acceptance of tender by the Corporation no vested right was acquired by the plaintiff. Sahana Chowdhury (Widow) and others vs Md Ibrahim Khan and another 6 BLC (AD) 67.

Section 5-Revocation of proposal-Under section 5 of Contract Act a proposal may be revoked at any time before the communication of Ss. 5-6) of the Communication, Acceptance & Revocation of Proposals its acceptance is complete as against the proposer, and under section 7 the acceptance of a proposal must be absolute and unqualified. The manser of revoking a proposal and of communicating neceptance might be controlled by the terms of agreement, yet it was necessary that the offer should have been accepted at least ultimately in an absolute and unqualified manner. Trustees of the Port of Karachi vs Muhammad Baksh, PLD 1959, (Kar) 658

Section 6(2) Reasonable time-What is reasonable time within the meaning of section 6(2) of the Contract Act is undoubtedly dependent upon the facts and circumstances of each case. The question in this case is whether this delay of 1 year and 3 or 4 months will not be considered unreasonable in the facts and circumstances of the instant case, Gladstone Wyllie & Co Ltd vs ABM Shayesta Khan 28 DLR 344.

-Understanding given by the plaintiff to the defendant company for completion of the construction of bungalows for the defendant within 4 months time from 17-11-50 not fulfilled-defendant-company paid a large sum of money to the plaintiff for construction in advance with the expiry of 4 months time defendant extended further time to the plaintiff to complete construction and also paid further sums of money-Construction remained incomplete even till 7-3-52 when the defendant company took possession of the incomplete bungalows-Plaintiff failing to comply with the terms of the contract the defendant company served a notice on 27-12-55 in which 10 days time was given to complete the construction in default it was said it would amount to failure to fulfil the contract The repudiation of contract on 27-12-55 by the defendant- company quite legitimate-No plea can be set up on that account. Gladstone Wyllie & Co Ltd vs ABM Shayesta Khan 28 DLR 344.

-The communication of a counter offer does not amount to the acceptance of a proposal or an offer made by the other party. Abdul Aziz vs The Rent Controller, PLD 1958 (Kar) 278.

-Absolute and unconditional acceptance-Every transaction to be recognised as a contract must, in its ultimate analysis, resolve itself into a proposal and its absolute and unqualified acceptance. If it contains a material variation of the terms of the offer, there is no consensus ad idem or agreement upon which a contract can be founded. PLD 1982 Karachi 76.

-Manner of acceptance-Where a person in an offer made by him to another person expressly or impliedly intimates a particular mode of 'acceptance as sufficient to make the bargain binding, it is necessary for the other person to whom such offer is made to follow the indicated mode of acceptance. If acceptance is not made in such manner, there is no contract between the parties. PLD 1978 Lahore 264.

Section—7

An acceptance must be expressed in some usual and reasonable manner, unless the proposal prescribes a particular manner in which it is to be accepted. Acceptance means, in general, communicated acceptance. In the instant case the manner of acceptance has been clearly indicated by the plaintiffs in Exhibit-8 signifying offer. [Per A.T.M. Afzal, C.J; (Majority)] Bangladesh Muktijoddah Kalyan Trust, represented by the Managing Director Vs Kamal Trading Agency and others, 18 BLD(AD)99

Section 7— Earnest money does not form part of consideration—Earnest money accompanying the tender signifies the bonafide of the proposal and it does not form part of consideration. Encashment of the earnest money sent with the tender does not amount to acceptance of tender. The matter of acceptance of the tender depends on the decision of the competent authority. Bangladesh Muktyoddha Kalian Trust represented by the Managing Director Vs. Kamal Trading Agency and others. 3, MLR (1998) (AD) 1.

Section 8—

On an analysis of the cited decisions, it appears that in a suit for specific performance of contract the primary question before the Court is whether the plaintiff has been able to prove the genuineness of the agreement by producing cogent, reliable and independent evidence. It also appears that the expert's opinion is not conclusive evidence but expert's opinion enables the Court to come to a satisfactory conclusion, though the said opinion is not binding upon the Court. Anwara Khatun vs Tofjal Huq 15 BLC 787.

Section 9— Price is the essence of sale of immovable property. Unless price is shown there can be no sale of immovable property. M/s. Chittagong Engineering & Electric Supply Co. Ltd. Vs. Income Tax Officer (1970) 22 DLR (SC) 443.      

 

An agreement for reconveyance is assignable right—      

An agreement to obtain a deed of reconveyance being a contractual right is an assignable right.      Sabed Ali Sikder Vs. Haji Rustom Ali Sikder. (1957) 9 DLR (HC) 464.     

 

Sale to minor—Seller cannot take advantage of incapacity of minor—      A person who sells a property to a minor can not take the advantage of the minor's statutory incapacity to contract with a view to avoiding the transfer. Ashraj Ali Vs. Earn Ali (1959) 11 DLR (HC) 185.      

Section 10–

Alteration in an agreement does not necessarily amount to forgery–if an alteration changes the character of a document and alters the rights, liabilities and legal position of the parties in that case only it can be said that such an alteration is a material alteration which amounts to forgery and for such forgery the document may be treated as void.

Mohiuddin Ahmed vs Lutfur Rahman 44 DLR 48.

 

Section 10–

A stranger to a contract cannot sue the other party. Terms of the contract can be enforced only by the contracting parties and not by third party. Trang Jee and Cold Storage Company Limited vs Amin Fish Farm 46 DLR 39.

 

Section 10–

Since it is a sale through tender notice, the contract for sale cannot be a concluded one unless and until all the terms and conditions of the tender notice are fulfilled. United Commercial Bank Ltd vs Rahimafrooz Batteries Ltd and others 52 DLR 625.

Section— 10

Contract—Oral contract is as valid as written contract—But in the matter of oral contract, once it is denied by one of the par— tics, a very heavy onus of proof lies on the other party in proving the contract. Rezanur Rahman and others Vs. Al-h A hmed Hossain Khan; 6BLD (HCD) 14

Ref: A.i.R.1946(PC)97; AIR. 1957(Cal) 479.

Section 10—

It appears that the plaintiff-opposite-party has totally failed to prove that oral contract was made between the plaintiff and the defendant No. 1 and earnest money of Taka 80,000 was paid out of Taka 1,20,000 on the basis of oral contract. Moreover, the evaporate and will become a hollow word of law. Equity must prevail. Therefore, justice and equity demands that if the decree is affirmed it should be followed by awarding of interest on the decretal amount. Bangladesh Water Development Board vs Titas Prokaushali ltd 11 BLC 398.

Section 11— Transfer of minor's property— Legal effect of— A transaction which is void is a nullity and has no existence in the eye of law. Sale of property of a minor by unauthorised person such as mother of the minor under the Muslim law is void and of no legal effect. Possession of the transferee if given in pursuance of such transfer is no better than that of a trespasser,      1 PLR (Dhaka) (HC) 627.      

Section 15—

The writ petitioner of his own filed an application to the manage­ment seeking reemployment upon giving an undertaking that he would realise the outstanding dues from BK Shaha and that in case of his failure the outstanding dues would be realisable from his salary and service benefits and that the letters impugned in the writ petition being the follow-up of 'the representation, the undertaking that was obtained from the writ petitioner can in no way be said that it was obtained by the authority under coercion and duress and while he was in distress situation or that'it was issued without lawful authority. Abdul Majid (Md) vs Bangladesh Chemical Industries Corporation 9 BLC (AD) 37.

Section 16— Transfer of property in lieu of dower—      

When not executed under undue influence, transfer of property by a registered deed in lieu of dower is not a fictitious transaction. Nasir Ahmed Khan Vs. Ismat Jahan Begum. (1969) 21 DLR (SC) 145.      

 

Documents executed by poor, illiterate Pardanashin lady— Protection of-      Courls should be more careful in scrutinising the evidence while ascertaining the genuineness or otherwise of the document alleged to have been executed by pardanashin lady or poor illiterate lady under influence.      Md. Sheikh Vs. Moinuddin Sheikh (1970) 22 DLR (HC) 677.      

 

Undue influence— Invalidates contract—      

Undue influence usually arises in fiduciary position. But as between strangers between whom there exists no fiduciary relation, certain forms of coercion, oppression, compulsion or unlawful detention may constitute undue influence which invalidates a contract. Undue influence is not a matter always capable of direct proof. Bindu Mukhi Vs. Sreemati Sarda SundarL (1954) 6 DLR (HC) 97.      

 

Onus of proof of undue influence—      

The burden of proof lies in the first instance upon the party who raises the plea of undue influence. If that party proves that the other party was not only in a position to dominate his will, but that the transaction entered into was also unconscionable, then the burden of proof that he did not use his dominant position to obtain an unfair advantage over the other is shifted on to him.      Bindu Mukhi Vs. Sreemati Sarda SundarL (1954) 6 DLR (HC) 97.      

 

Section 20— Mistake of fact— Legal position of contract— Agreement based on mutual mistakes of the parties is viod. S. Sibtain Fazli Vs. M/s. Star Film Distributor. (1964) 16 DLR (SC) 198.      

Section—16

Undue influence—Whether relationship daughter to mother leads to a presumption of undue influence or control by the daughter upon the mother—Whether in a transaction between the daughter and the mother the daughter is to discharge the onus of proving the bonafide of the transaction—rvlere relationship of daughter to mother by itself does r’-i lead to a presumption of undue influence control by the daughter upon the mother—I the absence of any pleading of undue in& ence in obtaining the kabala from the exec tant that the daughter was in active confide of the mother. Both the Courts below did rcommit any error of law in not considen these questions—The ground of undue int1u ence in challenging the kabala ought to ha been pleaded so that the other side was ali to the question and could meet the same at trial—Evidence Act (I of 1872) S_I.

Noab Chand Vs. Mst. Hossain Bam others; Noah Chand Vs. Fulinati Bewa others; 6BLD(HCD)l73

Rf. 33 l.A. 86: A.1.R. 1920(P.C.)65

Section—16

Defendant No. 1 was undoubtedly in a dominant position on account of his high official position and close association with the Martial Law Authority at the relevant time and the plaintiff had a helpless role to play in the face of pressure from the Martial Law Authority. The bargain obtained by defendant No. 1 in the compromise petition was clearly unconscionable because the plaintiff had to give up his rightful claim in the contractual land. The burden of proof that the compromise was not attained by undue influence, therefore, lay squarely upon defendant No.1 which he has miserably failed to discharge. Abul Hossain Vs Farooq Sobhan and others, 19 BLD(AD)291

Ref: 51 md. App. 101(AIR 1924 PC 60); AIR 1963 SC 1279; AIR 1967 SC 878 and PLD 1956 Dhaka 153—Cited.

Section 16— Undue influence defined—      

Undue influence arises usually in contracts made between relations or persons in fiduciary position. But as between strangers certain forms of coercion, oppression or compulsion may amount to undue influence vitiating a contract. When element of undue influence is established in obtaining a compromise decree, such decree is liable to be declared viod and not binding upon the plaintiff.  Abul Hossain Vs. Farooq Sobhan and others. 4, MLR (1999) (AD) 392.  

Section 17

There is no gainsaying that MMDL inserted the permission at the bottom of the letter, annexure X-1, by resorting to forgery in collusion with Zakir Hossain with mala fide motive to secure a judgment from the High Court Division showing that its project was approved by RAJUK and for this forgery, the authorities of MMDL and the persons responsible for insertion of this permis-sion are required to be prosecuted in accordance with section 195(c) of the Code of Criminal Procedure. Per Surendra Kumar Sinha, J. Metro Makers and Developers Limited, Vs. Bangladesh Environmental Lawyers' Association (BELA), (Civil), 2LNJ 222.    

Section17-—Fraud— 

The facts as noticed by the High Court Division are sufficient to hold that the nature of transactions among the defendants as fraudulent and collusive. Fraud cannot be directly proved, it has to be inferred from the conduct of the parties. Abdur Rashid & Bhiila and others vs Moulana Mobaswar Ahmed and others 8 BLC (AD) 11.

 Section 17—

Credit documents had been accepted by the Petitioner Bank after examining the same without any objection within a period of one year/six months. Opposite party Bank as Negotiating effected payment to beneficiary opposite party Company. Plea of fraud had not been adopted by Petitioner Bank at the time of acceptance of Letter of Credit. Petitioner Bank slept and slept and woke up at a very late stage. Petitioner Bank after acceptance of Credit documents cannot turn back and cannot decline to reimburse payment given to beneficiary opposite party Company by opposite party Bank on the plea of fraud. It is observed that relief by way of injunction is available to that litigant who is prompt and vigilant and not to him who is indolent and sleep and sleep over his right. Petitioner Bank slepts and slepts and then lately rose seeking relief in bringing forth complaint of fraud. It was too late in the day to wake up and rise in ventilating grievances as to genuineness of, credit documents. National Credit and Commerce Bank Limited vs Prime Bank Limited and ors 8 BLC 391.

Section 17—

Non-inclusion of a party cannot be construed as a fraud and ex parts decree of a court against a party not impleaded in the suit shall not be turned down on the ground of fraud. Rahmat-e-Alam Islam Mission and Etimkhana (Secretary) vs Md Shafiqul Huq and ors 10 BLC 449.

Sections 17 and 18—

In this case, the plaintiff No. 1 claimed that their 531 bales of jute were damaged but the surveyor found damage to 435 bales of jute. The defendants may not agree with the claim of the plaintiffs so far 531 bales of jute is concerned and may rely on the survey report so far 435 bales is concerned. But it cannot on that ground repudiate the claim of the plaintiff. This discrepancy in respect of jute damaged is a matter of opinion and in circumstances vary and do not at all substantiate a case of misrepresentation of fact as envisaged under section 18 of the Contract Act or do not bring it within the ambit of section 17 of the Contract Act or even within clause 13 of the Policy Document. Fibre Deals Ltd vs Sadharan Bima Corporation and others 8 BLC 337.

Section 19— Letter or writing gives a fresh starting point of limitation—      Notwithstanding the provision in section 19 of the Limitation Act, a writing even given after the expiry of the period of limitation, acknowledging the debt gives a fresh starting of the limitation.      Tripura Modern Bank Ltd. Vs. Elahi Baksha (1966) 18 DLR (HC) 498. Riasatullah Vs. Tripura Modem Bank Ltd. (1968) 20 DLR (HC) 44.    

Section—23

Agreement to compromise a criminal ease whether valid—Compromise of an of— fence which is not compoundable is against public policy—Such agreement is void—W validity of an agreement is impeached on r ground that it is opposed to public policy the party taking the plea must prove the same— party after securing his discharge in pursuance of a salishnama agreed by both the parties cannot disown the salishnama—Law does not encourage age a person to take advantage of his o wrong—The trial Court rightly dismissed t suit—Code of Criminal Procedure (V 1898)s. 345.Md. Joynal and others Vs. Rustani Ali Mia and others; 4BLD (AD) 86

Ref: 21 DLR 918: A.I.R. 1965(SC) l66: 10 Cr1. U. 228; 5DLR 114 and 338: 1968 S.C.M.R, 1313: A.I.R. 1947 (All) 317: A.LR. 1923(AlJ)474; A.I.R. l950(All)86: 20 C.W.N. 948.

Section 23— When contract is void— Legal effect as to arbitration clause—      

When a contract is viod abinitio falling within the mischief of section 23 of the Contract Act, the arbitration clause for settlement of dispute by arbitration will be unenforceable and the award if any given thereon shall be a nullity. Monzoor Hossain and others Vs. Wali Mohammad and others (1965) 17 DLR (SC) 369. 

 

Shalishnama, legal effect of—      

A person having derived some advantage out of a Shalishnama can not subsequently disown the said shalish on the ground of his own wrong. Md. Joynal Vs. Md. Rustam Ali (1984) 16 DLR (AD) 240.      

 

Section 23— Provision of agreement as to limitation being opposed to law is viod—When the Limitation Act prescribes the period of limitation for institution of legal proceedings any provision contrary thereto is void.      Islamic Republic of Pakistan Vs. Naza Din Khattah (1969) 21 DLR (Peshwar) (HC) 313.     

Section—23

Contract—Whether a contract to transfer the C.D.A. plot in violation of the prohibition of transfer of such plot in the deed of lease is enforceable—Such a contract is not void as it is not in contravention of any law. S.M. Anwar Hossain Vs. Haji Abdul Malek and others: 5BLD (HCD)29O

Ref: 17 DLR(SC)369: PLD 1965(S.C.) 425: 28 D.L.R. 238.

Section—23

Payment of Municipal Tax—Whether the agreement that such tax for the premises would be payable by the tenant is void—By mutual agreement payment of municipal tax is payable either by the tenant or the landlord— Whatsoever is agreed to between the parties can be a term of the tenancy as no prohibition exists in the matter of payment of such tax— Premises Rent Control Ordinance (XX of 1963)Ss.9 and 10. Meherunnessa Khatun Vs. Abdul Lcstif and another; 6BLD(AD)279

Ref: 31 DLR(AD)l55; 38 DLR(AD) I.

Section 23–

Admittedly the Government was not a party to the alleged contract and, as such, the same could not be enforced against the Government whether it came to contest the suit or not. Bangladesh Railway and others vs Pranab Kumur Chakraborty and others 50 DLR (AD) 150.

 

Section 23–

The suit land being the property of the Government the Railway Administration could not make any contract with respect to the same. Bangladesh Railway and others vs Pranab Kumur Chakraborty and others 50 DLR (AD) 150.

 

Section 23–

If for withdrawing and compromising a non–compoundable case an agreement is entered into between the parties then the same is against public policy and the bar of section 23 of the Contract Act is attracted. Moti Mia vs Ayesha Khatun and another 48 DLR (AD) 64.

 

Section 23–

By an oblique and indirect reference the object of the agreement cannot be brought within the mischief of section 23 of the Contract Act. Moti Mia vs Ayesha Khatun and another 48 DLR (AD) 64.

 

Section 23–

If consideration is for compromising a non–compoundable offence then it is hit by section 23 of the Contract Act as opposed to public policy. Moti Mia vs Ayesha Khatun and another 48 DLR (AD) 64.

 

Section 23–

Contract entered into between estranged husband and wife giving the visiting right to the plaintiff–husband by sending their minor son to him is, by no stretch of imagination, void. 

Irfan Sayed (Md) vs Mrs Rukshana Matin and others 48 DLR (AD) 134.

Section-23

(a) The plaintiff stated in the plaint that the two kabalas executed and registered in favour of defendant No. 1 were file- gal and void as no consideration passed— the impugned kabalas were executed during the pendency of a non-compoundable criminal offence—High Court Division observe. In the absence of any evidence of force, coercion or intimidation, the provisions of section 23 of the Contract Act cannot be attracted in a case—Held : This approach of the learned Single Judge is not correct, because if for withdrawing and compromising a non-compoundable case an agreement is entered into between the parties then the same is against public policy and the bar of section 23 of the Contract Act is attracted. [Para- 10] Moti Mia Vs. Ayesha Khatun & Anr. 4BLT (AD)-6

(b) The criminal proceeding was pending while kabalas executed and registered

— the kabalas are not hit by section 23 of the Contract Act as the plaintiff failed to make out a specific case on the pleadings and on the evidence on record that the kabalas were executed in pursuance of an agreement to compromise a non-compoundable offence. (Para- 151 Mod Mia Vs. Ayesha Khatun & Anr 4BLT AD-6

Section-23

The suit land being the property of the Government the Railway Administration could not make any contract with respect to the same as this will plainly offend Section 23 of the Contract Act. [Para- 12] 

Bangladesh Railway & Ors. Vs. P. K. Chakraborty 5 BLT (AD)-153

Section-23  

(a) The  plaintiff stated in the plaint that the two kabalas executed and registered in  favour of defendant No. 1 were illegal and void as no consideration passed— the  impugned kabalas were executed during the pendency of a non- compoundable  criminal offence—High Court Division observe. In the absence of an evidence of  force, coercion or intimidation, the provisions of section 23 of the Contract  Act cannot be attracted in a case—Held This approach of the learned Single  Judge is not correct, because if for withdrawing and compromising a  non-compoundable case an agreement is entered into between the parties then the  same is against public policy and the bar of section 23 of the Contract Act is  attracted. Moti Mia Vs. Ayesha  Khatun & Anr. 4BLT (AD)-6   

 

(b) The  criminal proceeding was pending while kabalas executed and registered — the  kabalas are not hit by section 23 of the Contract Act as the plaintiff failed  to make out a specific case on the pleadings and on the evidence on record that  the kabalas were executed in pursuance of an agreement to compromise  a non-com-poundable offence. Moti Mia Vs. Ayesha  Khatun & Anr. 4BLT (AD)-6   

 

Section-23   

The suit  land being the property of the Government the Railway Administration could not  make any contract with respect to the same as this will plainly offend Section  23 of the Contract Act. Bangladesh Railway  & Ors. Vs. P. K, Chakraborty 5BLT (AD)-153   

 

Section 24–

Minor's contract– want of mutuality– An agreement which is void ab initio cannot be validated by ratification. Julhash Mollah (Md) and another vs Ramani Kanta Malo and another 47 DLR (AD) 35.

 Section—24

An agreement which is void ab-initio cannot be validated by ratification. Au agreement for sale of the suit land not being enforceable against a minor it cannot been forced against the promisor as well for lack of mutuality. The submission that a contract entered into with a minor is not always void and a minor can ask for its enforcement if it is for his benefit is not applicable to the facts of the present case. Md. Julhash Mollah and another Vs. Ramani Kanta Malo and another, 14 BLD (AD) 263

Ref: 1. L.R. 39 (Cal) 232(PC); 11 DLR 185; AIR 1960 (Cal) 65; 1. L.R. 40 (Mad) 308 (F. B)—Cited.

Section—25(3)

Time-barred debt—Agreement to pay such debt—Whether is an enforceable contract—The suit is based on a promise to pay time barred debt made in writing—It is not only an unconditional acknowledgment of the debt but also unconditional promise to pay the time barred debt in writing under the signature of the defendant—There is no question of its being merely an acknowledgment of the debt as no acknowledgment of the liability to pay the amount due was made before the expiration of the period of limitation—Such a promise to pay time barred debt in writing signed by the debtor is an enforceable contract—Limitation Act(TX of 1908) S. 19.

M/s. Daulat Ltd. Vs. Pubali Bank Ltd; 7BLD (HD)263

Ref: PLD 1968 (Dacca) 260; 33 l.A. 165; 18 DLR 498.

Section-28   

Section  28 of the Contract Act makes void only those agreements which absolutely  restrict a party to a contract from enforcing the rights under that contract in  ordinary tribunals. But this section has no application when a party agrees not  to restrict his right of enforcing his rights in the ordinary tribunals but  only agrees to a selection of one of those ordinary tribunals in which ordinarily a suit would be tried. Bangladesh Air  Service (Pvt) Ltd. Vs. British Airways PLC. 5BLT (AD)-242   

 

Section 28— Agreement proceedings—      

Agreement restricting proceedings is viod. Abdul Razzak Vs. East Asiatic Co. (1952) 5 DLR (HC) 394.      

 

Section 28— Mutual consent neither confer nor divest jurisdiction—      Jurisdiction cannot be conferred upon court which it does not have under general law nor any jurisdiction under the law can be divested by mutual consent of the parties. Contract restricting legal rights is void.  Tar Mohammad & Co. Vs. Federation of Pakistan. (1957) 9 DLR (HC) 197.      Submission to jurisdiction of foreign court—The parties to the contract having agreed that in case of any dispute between the parties arising out of the contract will be tried by the court in England, such court in England will be the only Court to try the suit.  British India Steam Navigation Co. Vs. A.R. Chowdhury. (1967) 19 DLR (HC) 54.      

Section-28

Section 28 of the Contract Act makes void only those agreements which absolutely restrict a party to a contract from enforcing the rights under that contract in ordinary tribunals. But this section has no application when a party agrees not to restrict his right of enforcing his rights in the ordinary tribunals but only agrees to a selection of one of those ordinary tribunals in which ordinarily a suit would be tried. [Para-53] Bangladesh Air Service (Put.) Ltd. Vs. British Airways PLC. 5 BLT (AD)-242

Section—28

Foreign Arbitration Clause is an integral part of International Trade and Commerce

Section 28 makes void to that extent every agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract by the usual legal proceedings in ordinary tribunals but Exception 1 to section 28 provides that section 28 shall not render illegal a contract if disputes are referred to arbitration, that is, for determination by a person or persons other than a Court of competent jurisdiction. Exception 1 itself relaxes the rigours of section 28. The plea of sovereignty and interest of the country and its. citizens, if accepted, will render foreign arbitral jurisdiction absolutely nugatory. Such a consequence will itself be op. posed to public policy, for no country lives in an isolated island these days. Foreign arbitration clause is an integral part of international trade and commerce today. [Per Mustafa Kamal,J] Bangladesh Air Service (Pv.) Ltd. Vs. British Airways PLC, J 7BLD(AD)249

Section 28—

In fact, the liability of the guarantor or surety is immediate and this need not be deferred until the creditor exhausts his remedies against the principal debtor. In the absence of any special reason, the surety cannot plead that the creditor must first initiate action against the debtor before proceeding against the surety or the guarantor on the ground that the debtor is solvent enough to repay the debt. IFIC Bank Ltd vs Chittagong Steel Mills Ltd and another 8 BLC 589.

Section—28, Exception 1

There is nothing in Exception 1 to section 28 of the Contract Act that prohibits the parties to a contract from choosing a foreign forum under the supervision of a foreign Court for arbitrating their disputes. Such contract does not offend the main provision of section 28 of the Act because the local Courts still retain the jurisdiction to decide the us between the parties. [Per Mustafa kamal, J.] Bangladesh Air Service (Pv.) Ltd. Vs. British Airways PLC, 17 BLD (AD) 249.

Section—28, Exception 1

Section 28 of the Contract Act deals with making those contracts void which restrict the right of a contracting party from taking legal actions in the ordinary tribunals through usual process of law. Exception (1) to Section 28 of the Contract Act, however, enacts a saving clause in favour of the contracts to refer to arbitration any dispute that may arise between the parties. Hence arbitration clause is protected by Exception (1) to Section 28 of the Contract Act. [Per Latifur Rahman, J.] Bangladesh Air Service (Pv.) Ltd. Vs. British Airways PLC, 17 BLD (AD) 249.

Section 28–

It is quite clear that cause of action to recover the loss finally accrues only when the arbitrator, arbitrators or umpire have finally settled the award as to the quantum of loss or damage, but not before that. This principle of common law has now found statutory recognition in section 28 of the Contract Act. So, condition No. 18 of the policies has the full backing of explanation (1) of section 28 of the Contract Act. It would be a clear violation of the law of contract and terms and conditions of the policy to saddle the insurers with the liability to pay the loss though they never acknowledged the liability and had a right to postpone a decision on liability until arbitrator had fixed the amount of loss or damage. Daulatpur Traders & Co Ltd vs Eastern Federal Union Insurance Co Ltd 42 DLR 125.

 Section 28–

Limitation–Waiver–Special period of limitation referred to in insurance policy agreement will not be hit by section 28 of the Contract Act inasmuch as this limitation was created by consent of parties and that will amount to waiver of the right given under Limitation Act. Sadharan Bima Corporation vs Sanjib Kumar Das 46 DLR 566.

Section 28–

Forfeiture of insurance claim– ­The arbitration agreement contained in the insurance policy in question provided that if a claim be made and rejected and an action be not commenced within 3 months after such rejection all benefits under the policy shall be forfeited. The Insurance company having informed the plaintiff that their claims under the policy were not payable and as such rejected the same as per condition No.13 of the policy and the plaintiff having not commenced any action within 3 months, have forfeited all their rights under the policy. Sadharan Bima Corporation vs Dhaka Dyeing and Manufacturing Co. Ltd 43 DLR 286.

Section 28–

Under section 28 of the Contract Act, save as otherwise provided in the contract in0self, the liability of the surety is co­extensive with that of the principal debtor. In fact, the liability of the guarantor of surety is immediate and this need not be deferred until creditor exhausts his remedies against the principal debtor. IFIC Bank Ltd vs Chittagong Steel Mills Limited and another 55 DLR 417 

Section 28 Exception I –

There is nothing in Exception 1 to section 28 of the Contract Act prohibiting the parties to a contract from choosing a foreign forum under the supervision of a foreign court for arbitrating its disputes. Such contract does not offend the main provision of section 28, because the local Courts still retain the jurisdiction to decide the /is between the parties. Bangladesh Air Service (Pvt) Ltd vs British Airways BLC 49 DLR (AD) 187.

Section 28 Exception I–

The plea of sovereignty and interest of the country and its citizens, if accepted, will render foreign arbitral jurisdiction absolutely nugatory. Bangladesh Air Service (Pvt) Ltd vs British Airways BLC 49 DLR (AD) 187.

Section 30–

Speculative damage can be treated as remote damage for which a court cannot pass any decree.

Trang Ice and Cold Storage Company Ltd vs Amin Fish Farm 46 DLR 39

Section-31   

Plaintiff  tenants under defendant No. 1 landlord having paid two installments one of  three installments as advance as per a tenancy agreement for shop rooms of a  multi-storied building under construction and tender of 3rd installment being  disputed, the plaintiff instituted the suit seeking various reliefs. 50% of the  advance being paid the landlord cannot do injustice to the existing tenant  contract for construction though contingent the suit decreed justifiably. Since  the plaintiffs were the existing tenants having payment of regular rents and  since 50% of the advance was paid in due time as per agreement, equity demands  that the landlord-defendant No. 1 cannot do injustice to his existing tenants  who were craning their livelihood from respective shops. Though the contract  for construction was a contingent and this plaintiffs suit was rightfully  decreed specially when the multi- storied building was factually completed. Shamsuddin Ahmed Vs.  S. M. Harun-Or-Rashid 1BLT(AD)-48   

Section-31

Plaintiff tenants under defendant No. 1 landlord having paid two installments one of three installments as advance as per a tenancy agreement for shop rooms of a multi- storied building under construction and tender of 3rd installment being disputed, the plaintiff instituted the suit seeking various reliefs. 50% of the advance being paid the landlord cannot do injustice to the existing tenant contract for construction though contingent the suit decreed justifiably.

Since the plaintiffs were the existing tenants having payment of regular rents and since 50% of the advance was paid in due time as per agreement, equity demands that the landlord-defendant No. 1 cannot do injustice to his existing tenants who were craning their livelihood from respective shops. Though the contract for construction was a contingent and this plaintiffs suit was rightfully decreed specially when the multi- storied building was factually completed. [Paras- 5 & 6]

Shamsuddin Ahmed Vs. S. M. Harun-Or-Rashid 1 BLT (AD)-48

Section 33— Objection against arbitration clause of contract—Not supported by affidavit—Though section 33 of the Contract Act provides for deciding the objection against arbitration or award supported by affidavit, application not supported by affidavit is also maintainable. M/S. Badri Narayan Agarwalla Vs. M/S. Pak. Jute Bailers Ltd. (1970) 22 DLR (SC) 45.

 

Section 37- The plaintiff being the C & F Agent of the defendant was responsible to clear the consignment from the Port authority and then make arrangement for necessary transportation and the equipment that may be required for the loading and desptach of the consignment and also effect delivery at the Mills site/godown as fixed by the defendant through its officers and the goods shall be treated in its possession until the same is delivered at the destination or the Mills site.

The trial Court as well as the High Court Division also failed to apply their mind as to the consequence that would follow, if it is held that a C & F Agent would be responsible upto the loading of the goods in a hired truck only, then the C & F Agent itself may behave in an unscrupulous way and in the process may join hands with the truck drivers in misappropriating the goods in the transhipment in the name of loss of the goods and in that case, the owner(s) of the goods, here the defendant shall be put to a helpless situation as well as in double jeopardy, i.e. it would lose the goods and at the same time have to also pay the commission fee to the C & F Agent for clearing the goods from the port.

We conclude that the trial Court and the High Court Division erred in law in holding that the plaintiff was not responsible for the loss of the goods of the defendant in the transhipment. M/S Gramsico Ltd. -VS- Bangladesh Textile Mills Corporation, [9 LM (AD) 271]

Section 37— Repudiation of Contract— 

Unilateral repudiation of contract does not constitute an effective rescission of a deed except the decree of a court. Kanehan Mala Bepari Vs. Ananta K. Bepari. (1954) 6 DLR (HC) 254.      

 

Sale of immovable property accompanied by an agreement (ekrarnama) for reconveyance—A subsequent purchaser of the vendor's right being the successor-in-interest, is entitled to enforce the right of reconveyance against the original vendee except a bonafide purchaser for valuable consideration without notice of the agreement. Jalal Ahmed Vs. Thorais Mia. (1968) 20 DLR (HC)  80.   

Section 37- C & F Agents The plaintiff and the truck owners and the defendant categorically stated that if it could realise the money from Sadharan Bima Corporation, it would refund back the money to the plaintiff (C & F Agent) deducted from its bills and the defendant would be bound by such promise. M/S. Gramsico Ltd. -VS- Bangladesh Textile Mills Corporation, [9 LM (AD) 271]

Section 40—

It appears that the defendant failed to deliver the goods to the plaintiff in spite of repeated readiness expressed by the plaintiff to lift the goods in payment of balance money according to the contract. But due to the default of the defendant the plaintiff could not succeed. In case the seller insists on delivery to the buyer a quantity of goods less than he contracted to sell, the buyer has got the right to reject them and claim refund of the money paid by him to the seller. In the instant case, the seller failed to show that he was ready to deliver to the buyer the quantity/quality of the goods in good condition contracted to be delivered and, in fact, there is default by the seller and, in such view of the matter, there is no legal reason to authorise the seller to forfeit the good money paid by the buyer and, as such, the action of the seller in the present case in forfeiting the money of the plaintiff cannot stand in the eye of law. National Bank Ltd vs Pragati Industries Ltd 10 BLC (AD) 189.

Sections—42 and 45

The suit was filed during the life time of all the partners of the firm, but defendant- respondent Nos. 2 to 4 and 6 died during the pendency of the suit. Provisions of sections 42 and 45 of the Act clearly indicate that when a person or two or more persons made a joint promise to two or more persons they are jointly liable for the performance of the same and the right to claim performance of the same rests as between him and them during their life time and if any of them died their representative must be brought on record to enable them to perform the contract. But in the instant case admittedly defendant Nos. 2 to 4 and 6, partners of firm, died during pendency of the suit before the trial court and no step was taken for their substitution in the suit. Therefore, the suit must fail as it cannot be proceed against dead persons. Pubali Bank Ltd Vs M/s. Sultana Oil Mills and Soap Factory and others, 19 BLD (HCD) 249

Sections 42 & 45–

When a person or two or more persons made a joint promise to two or more persons they are jointly liable for the performance of the same and the right to claim performance rests as between him and them during their lifetime and if any of them died their representative must be brought on record to enable them to perform the contract. Admittedly defendant Nos. 2 to 4 and 6, partners of firm, died during pendency of the suit and no step was taken for their substitution. Therefore, the suit must fail as it cannot proceed against dead persons. Pubali Bank Ltd vs Sultana Oil Mills and Soap Factory and others 51 DLR 323

Section 46— Time is not essence of contract for sale of land— Ordinarily time is not the essence of contract in an agreement for sale of land.  Haji Abdullah Khan Vs. Nisar Mohammad Khan. (1965) 17 DLR (SC) 481.      

Section 46–

Since there was no laches on the part of the respondent in the materialization of the contract the Court has committed no error in making the direction for the payment upon making declaration that the contract contained in the letter of intent with the respondent issued by the petitioner has been breached. Privatisation Board vs AK Fazlul Huq 55 DLR (AD) 11

Section—46   

On  perusal of the materials on record as well as from the reading of the judgment  of the High Court Division it is seen that because of the conduct of the  petitioner and that of other agencies of the Government and that non-disclosure  of the amount as claimed by the Agrani Bank against the enterprise the contract  to sell the enterprise to the petitioner ultimately could not be materialized.  It is also seen from the materials on record there was no latches or lapses on  the part of the Respondent No.1 in the materialization of the contract but  because of the default of the petitioner and other Government agencies in  several respects the contract ultimately did not reach finality. Since there  was no latches on the part of the Respondent No. I in the materialization of  the contract as such High Court Division has committed no error in making the  direction for the payment of Tk. 4,00,02,499.75 upon making declaration that  the contract contained in the letter of intent dated 11th February, 1999 with  the respondent No.1 issued by the petitioner has been breached. Privatization Board  Vs. A.K. Faziul Huq & Anr. 10 BLT (AD) 95   

 

Section 48— When time is essence of Contract—

Time is the essence of a contract when there are express stipulation between the parties having regard to the nature of property depending upon the surrounding circumstances. Purnendu Kumar Das Vs. Hiron Kumar Das. (1969) 21 DLR (HC) 918.      

 

Time   is   essence   of  contract   for resale—      

In a case of a contract of sale generally the time may not be the essence of the contract, but in the case of a contract, for the resale of the same, the time is the essence of the contract. Abdul Rahim Sardar Vs. Idris Ali Bepari (1959) 11 DLR (HC) 169.      

 

Unless originally made subsequently time can not be made essence of the contract—      

The principle is that if time is not originally made the essence of a contract for sale of land, one of the parties is not entitled afterwards by notice to make it of I the essence, unless there has been some default or unreasonable delay by the other party.  Abdul Hamid Vs. Abbas Bhai Vs. Abul Hossain Sodawaternwala. (1962). 14 DLR (SC) 24.      

 

Suit for specific performance of Contract—      

A suit for specific performance of contract will not be rendered defective by reason of the failure of the plaintiff to assert that he is ready and willing to perform his part of the contract where he has already asserted that he has performed his part of the contract.  Moksud Ali Vs. Eskandar All (1964). 16 DLR (SC) 138.

Sections 51 and 53 

Defendants praying for decree declaring the deed of agreement between the parties cancelled and for recovery of compensation. Bangladesh Krishi Bank represented by the Managing Director vs. Messers Dadajee Ice Plant and Storage Lid (Mohammad Fazlul Karim J) (Civil) 4ADC 924

The Court while decreeing the suits made the said compromise petition part of the decree. The suit was filed seeking declaration of title and for recovery of khas possession as well as mesne profit and also for rectification of Khatian. Abdus Sattar Khan being dead his heirs vs. Md. Noor@ Nurullah being dead his heirs (Md. Ruhul Amin J) (Civil) 4ADC 930

 

Section 55- Time when not essence of contract—      

In a suit for specific performance of contract where no time is mentioned in the agreement and as part performance and on payment of bulk of consideration, plaintiff is put in possession of the suit land, the suit is perfectly maintainable and is not barred by limitation.  Abdul Sarnad Gazi Vs. Abdul Khalil Gazi, 5 MLR (2000) (HC) 404.

 

Section-55

Section 55 of the Contract Act, if it was the intention of the parties that the time should not be of the essence then the contract does not become voidable, but the promisee becomes entitled to receive compensation. Hence, it is our view that the Vendor is only entitled to receive compensation for the delay in performance of the agreement by the Purchaser. Mahua Khair VS Amena Begum Ali Ispahani, [3 LM (AD) 246]

Section—55

Time for specific performance of contract—Whether time was the essence of the contract.—The parties by their conduct having extended the time it could not be said that time was the essence of the contract. Osnianuddin Vs. 5ubal Chaiidra Mondal and others; 3 BLD (HCD) 226

Section—55

Contract for sale—When time is the essence of—In a contract for sale of immovable property time is not generally considered to be essence of the contract, unless the contract itself by clear and unambiguous terms expressly indicates that time is intended to be essence of the contract. Imperial Chemical Industries (Bangladeshi) Ltd. Vs. M/s. G.K. Brothers; 4BLD (HCD) 207

Section—55

Specific performance of contract—When time is the essence of the contract—Where time is intended to be of the essence of the contract, it is not sufficient to find whether here was such intention or not, hut it is necessary to find whose unwillingness to perform his part of the obligation eventually led to the non-performance of the contract—The plaintiff must succeed if his readiness and willingness to perform the obligation undertaken by him are proved even if time is made essence of the contract. Rain Chandra Das and others Vs. Md. Khalilur Rahman and another; 5BLD (AD) 41

Ref: AIR. l967(SC)868.

Section 55–

Where in a deed of agreement no time is mentioned for registration of sale deed and the plaintiff is already put in possession of the suit land in pursuance of the agreement duly executed by the defendant upon receipt of the bulk of the consideration money, time is not an essence of the contract. It is true that a contract implies two parties, but a contract, in writing in this country does not necessarily imply that the document must be signed by both the parties thereto.

Abdul Samad Gazi vs Abdul Khalil Gazi and others 53 DLR 262

 Section 55

Although it was stipulated in the agreement that the contract for sale should be completed within a period of one year, the breach of such condition was sanctioned by the payment of liquidated dam-age. Therefore, time was definitely not of the essence of the contract. The vendor did not take any action on or after 08.08.1993 to cancel the agreement. Rather, her acceptance of Tk. 15,00,000.00 of the consideration money on 15.02.1994 has negated the aspect of time of the essence of the contract. According to section 55 of the Contract Act, if it was the intention of the par-ties that the time should not be of the essence then the contract does not become voidable, but the promisee becomes entitled to receive compensation for the delay in performance of the agreement by the purchaser. It appears that nine and a half years had elapsed from the time of contract till the filing of the suit. The seller is entitled to receive taka two crore by way of compensation. Mahua Khair Vs. Amena Begum Ali Ispahani, (Civil). 1LNJ 68.   

Section 56— Doctrine of frustration—

When applicable—  "Where the subject-matter of the lease of tenancy is completely destroyed and section 108 of the Transfer of Property Act is not attracted, the doctrine of frustration of contract becomes applicable.   Azizur Rahman Vs. Abdus Sakur (1984) 36 DLR (AD) 195.

Section 56–

To attract the doctrine of frustration of contract the performance of the contract must become absolutely impossible due to the happening of some unforeseen event.

Mokbul Hossain Khondker vs Jaheda Khatoon 47 DLR 430.

Section 56—Frustration of Contract—

Considering the facts and circumstances of the case and evidence on record it appears that the contract was ultimately frustrated by the action of the plaintiff and as such no decree can be passed as has been rightly found by the High .Court Division. Sooraya Rahman vs Hajee Md Elias and others 8 BLC (AD) 7.

Section—56

Doctrine of frustration—Whether it applies to contract only or to leases also— Whether provision of section 108(e) of the Transfer of Property Act or doctrine of frustration as contained in section 56 of the Contract Act will apply in case where the entire structures of the tenancy was destroyed—Where only a material part of the tenancy is destroyed or otherwise rendered substantially and permanently unfit for the purpose for which it was let at the option of the tenant the lease will come to an end—But where the entire subject matter of the tenancy is destroyed the provision of section 108(e) of Transfer of Property Act will not be applicable—The doctrine of frustration as embodied in section 56 of the Contract Act will apply in case of destruction of the entire subject matter of the tenancy—Transfer of Property Act (IV of 1882) S. lO8(c)

Azizur Rahman and others Vs. Abdus Sakur and others; 4BLD (AD) 287

Ref: 22 DLRI26; AIR. 1968 (SC)1024; A.I.R. 196 l(Cal)70: A.I.R. I 950(Cal)44 1; 64 C.W.N. 932; PLD l970(SC)185; (1981) 2 W.L.R. 45.

Section—56

Contract for sale entered into before 25.3.1971—Impossibility of performing such contract on the property of a party becoming abandoned property—On the coming into force of P.O. 16 of 1972 the agreement entered into before 25th March, 1971 is binding upon the Government in the same way as upon the original owner—Government merely stepped into the shoes of the original owner—Bangladesh Abandoned Property Order (P.O. 16 of 1972), Articles A and 10.

Imperial Chemical Industries (Bangladesh) Ltd. Vs. M/s. G.K. Brothers; 4BLD (HD)2O7

Ref: 1978 BSCR 260.

Section—56

The Doctrine of Frustration of a Contract

To attract the doctrine of the frustration of a contract the performance of the contract must become impossible due to the happening of certain events. Where inspite of the intervention of events subsequent to the making of the agreement, which were not in the contemplation of the parties and which could not be foreseen with reasonable diligence, the contract could still be performed in substance, then it cannot be said that the contract has become impossible of performance within the meaning of section 56 of the Act. Md. Mokbul Hossain Khondker Vs. Mosammat Jaheda Khatoon, 14 BLD (HCD) 549.

Section—56

Doctrine of Frustration

Doctrine of frustration as embodied in Section 56 of the Contract Act is applicable to leases of immovable property. The plea of frustration of the contract of lease having not specifically taken in the written statement and the defence being one of denial of the plaintiff’s title, then one of permissive possession, then extinction of permissive possession by fire and thereafter possession of structures in his own right and title and the defendant successfully resisting the plaintiff’s attempt for taking the suit out of the S.C.C. Court for trial as a regular suit, the defendant’s plea for a regular suit for declaration of title and recovery of possession cannot be entertained as it will tantamount to putting a premium on the defendants desperate and contradictory stands.

Md. Mokbul Hossain Khandker Vs. Mst. Jaheda Khatun, 15 BLD (AD) 185.

Ref: Azizur Rahman Vs. Abdus Sakur, 36 DLR (AD) 195; National Carriers Ltd. Vs. Panalpina (1981) 2 W.L.R. 45; Golam Rahman V Mrsimratunnessa,22 DLR 1 26—Cited.

 

Section 62–

When the parties to a contract agree on substituting a new contract for it, it is known as novatio or novation. Abul Hashem Khan vs Md Shamsuddin Khan 41 DLR 415.

 

Section 62–

Specific performance of contract– The plaintiffs not having disclosed the material facts such as time, place and names of witnesses are guilty of laches.

Abul Hashem Khan vs Md Shamsuddin Khan 41 DLR 415.

 

Section 62–

Substitution of a new contract for the original contract, such as the reconstitution of the firm between the defendant Nos.1 and 2, is not a novation within the meaning of section 62 of the Contract Act.

Abul Hashem Khan vs Md Shamsuddin Khan 41 DLR 415.

 

Section 62–

Once a bank's borrower has become a defaulter, his stigma cannot be removed by invoking the provision of section 62 which only contemplates novation of contract or modification of the term of contract. It has little to do as to the elevation of the status of person who has already defaulted in making payment of any dues to the bank.

Abdul Momen Bhuiyan vs Hazi Payer Ali Mia 43 DLR 97.

Sections—62 and 70

Novation of contract and corn pensation—Assurance to contractor for enhanced rate of remuneration—Assurance amounted to novation of contract or caused entitlement to fair compensation—After the contractor’s work as clearing and forwarding agent was finished and benefit there from was derived, the defendant T & T Board cannot get away without paying some remuneration on the basis of -as surance—The case would have been other had the contractor’s claim been rejected other wise—it is true, some meeting of minds the parties to a contract is necessary for novation of contract—But consent may also be-applied by conduct of the parties—In this ca conduct of the defendants although shows the. they recognised the difficulties the appellant was put into difficulties because of their o laches—Prolonged dialogues clearly indicate that the appellants claim for enhancement the rate got same merits—He is entitled to remuneration on the basis fair and reasonable rate.Baziur Rahinan Vs. People’s Republic 4’ Bangladesh and others; 10 BLD(AD)66

Ref: AIR. l938(PC)67.

Section 63— Extension of time—Time for performance of contract may be extended under section 63 of the Contract Act.  Abdul Jalil Chowdhury Vs. Mohammadi Steamship Co. Ltd. (1961) 13 DLR (SC) 214.      

 

Damage for breach of contract—Party guilty of breach of contract shall be liable to pay compensation measure of which shall be assessed on the quantum of loss sustained on account of the breach or which the parties knew to be likely to flow from the breach. M/S. Amiii Jute Mills Vs. M/S. A.R.A.G. (1976) 28 DLR (SC) 76. 

  

Section-67   

In an  agreement for sale of land, the land, price and promisee are all integral parts  of the contract besides the time. When the land sold and the price at which the  land was sold as quoted in the sale deed do not represent the land and price as  agreed in the agreement, such deeds cannot be accepted in law as executed as  part performance of the contract. In the circumstances, only possible  conclusion could be arrived at that the parties made transactions, if any,  independent of the contract on the basis of agreement, deed to deed. Therefore,  both the parties must he held to have neglected the contract. Saroj Kanta Sarker  & Ors. Vs. Seraj-ud-Dowla & Ors 12 BLT (HCD)-28   

Section-70   

It must  be remembered where a claim for compensation is made by one person against  another under section 70, it is not on the basis of any subsisting contract  between the parties, rather it is on the basis of the fact that something was  done by the party for another and the said work so done has been voluntarily  accepted by the other party. Reason is not far away to see, section 70 prevents  unjust enrichment and the principle applies as much to an individual as to  corporations and the Government. A.K.M Shahidul Haque  Vs. Deputy Commissioner& Ors 12 BLT (HCD) 236   

 

Section 70–

When a thing is done or delivered by one person it must be open to the other person to reject it. The acceptance and enjoyment of the benefit of the work done or the goods delivered which is the basis for the claim for compensation under section 70 must be voluntary. AKM Shahidul Hoque vs Deputy Commissioner and others 56 DLR 538.

Section 70—

In the suit the plaintiff ST International challenged the order dated 20-6-99 of the government terminating the lease directing to pay one crore and odd as dues for Meghna-Gomati bridge on the ground of hartal, flood and transport strikes for which it could not enjoy the benefit of lease and considering the sufferings of the plaintiff was allowed to collect tolls of the said bridge for a further period of 50 days upto 9-6-99, after the expiry of the lease on 19-4-99, without making any payment to the government and thereafter plaintiff prayed for a further remission of revenue and. its prayer was under the active consideration of the Hon'ble Minister for Communications but defendant No. 1 in'violation of the recommendations of the Minister of Communications cancelled the plaintiff's lease by his order dated 20-6-99. and illegally terminated the lease directing to pay the dues aforesaid.

Since the plaintiff continued to enjoy the privilege of collecting of tolls even after 9-6-99, defendant No. 1 committed no illegality in claiming government du6s from the plaintiff by the impugned notice. In a democratic society the government functionaries are under constitutional and' moral obligations to mete but equal treatment to all citizens irrespective of social standing and political affiliations. Granting of revenue holiday to the plaintiff involving crore of takas without any justifiable reason is a classic example of wanton discrimination and mis-use of discretion in managing the affairs of the State. The public functionaries must be cautious in doling out charities by way of granting revenue holiday to individuals or establishments against public interest.

Accordingly, the Deputy Commis­sioner, Munshiganj was directed to take prompt legal steps against the plaintiff for realising damages under the provisions of PDR Act from 9-6-99 till the plaintiff vacates and makes over possession of the Meghna-Gomati Bridges to the Government. ST International vs Executive Engineer, Roads & Highways, Road Division & ors 6 BLC 396.

Section—70

Compensation for non-gratuitous acts done for others who derived benefit— Whether payable to an auction purchaser ho under order of the Court allowed a Company under liquidation to use his go down after auction purchase—Since the Company h derived benefit from the storage of the bonded articles in the go down of the responder justice demands that the respondent should be I indemnified by way of compensation for the use and occupation of the go down of the auction purcahser by the Company in liquidation. 

Tofazzal Ali, former C. airmaii of Roxana Industries Ltd. (In liquidation) Vs. Johurul Huq Khan, Official Liquidation: and M/s. Md. Idris and Co. Ltd. Vs. Official liquidator, Roxana Industries Ltd: (In liquidation) and others; 4 BLD(HCD) 196

Section—70

Novation of contract—A contract with the Government must be in writing. A contract or modification of the terms of contract or novation of contract can only be made on behalf of the Government by the person duly authorised by the Government to enter into the contract or to make modification of the terms of the contract or to make novation of the contract the Government—a contract entered into an unauthorised person is not binding upon the Government—An oral agreement is not enforceable against the Government. The Chairman. B. T & T. Board and others Vs. Bazlur Rahman and another; 6BLD HCD)336

R.1925(PC)232;1.L.R.62(Cal)17: A.1.R I 938(P.C.)67.

Section—70

The plaintiff had no right and interest whatsoever in the bridges in question for claiming free collection of tolls on the expiry of the grace period on 9.6.99. The filing of the suit on 7.7.99 based on a non-existing right is ill-conceived, aimed at prolonging enjoyment of the said bridges under the cover of litigations for making illegal gains. It is evident from the admission of the PW 1 that the plaintiff defaulted in payment of the scheduled installments when trial Court found that at least two installments for the lease money had remained unpaid along with other dues of a huge amount money which is clear violation of the clauses of the lease agreement. Since the plaintiff continued to enjoy the privilege of collecting of tolls even after 9.6.99, defendant No. 1 committed no illegality in claiming government dues from the plaintiff by the impugned notice.

In a democratic society the government functionaries are under constitutional and moral obligations to mete out equal treatment to all citizens irrespective of social standing and political affiliations. Granting of revenue holiday to the plaintiff involving crore of taka without any justifiable reason is a classic example of wanton discrimination and miss use of discretion in managing the affairs of the State. The public  functionaries must be cautious in doling out charities by way of grant. ing revenue holiday to individuals or establishments against public interest. M/s. ST International Vs Executive Engineer, Roads and High Ways, Road Division & ors., 21 BLD (HCD) 395.

Section—73

Breach of contract—Damages—All sorts of damages are not entertainable—In assessing damages only the circumstances resulting from the breach of contract are to he taken into consideration.

Al-Sayer Navigation Co. Vs. Delta International Traders Ltd. & others; and Delta international Traders Ltd. Vs. M. V. Kuan Hal renamed M. V. Al-Sayer; 2 BLD(AD)69

Ref: (l933)AC. 449.

Section 73— Suit for compensation-maintainability—      

Damage or compensation for breach of contract can be claimed on the establishment of wilful breach of contract by the defendant. But when the plaintiff failed to establish that the part of his obligation was fully discharged his suit for damage or compensation is not maintainable.      M/s Nozrul Islam Khan & Co. (Put) Ltd. Vs. Festasi Shipping Company S.A and others. 2, MLR (1997) (AD) 369.      

 

Suit for damage and compensation—      

It is not permissible in law for a court to pass any order for delivery of possession of the property in a suit for damage and compensation. The plaintiff has to provide grounds for calculation of damage and in such case the defendant has no obligation. Government of Bangladesh & others Vs. Hosne Ara Begum. 2, MLR (1997) (AD) 56.      

 

Gift-Absence of acceptance—effect—      

When the donee enters into possession of the land of gift within the knowledge of the donor, mere absence of declaration of acceptance of the gift in the deed does not invalidate the gift.      Achia Khatoon Vs. Md, Soleman and others. 1, MLR (1996) (HC) 330.      

 

Viena Convention— Diplomatic immunities of the service staff of Mission—      

Persons engaged in business in Bangladesh under the name of U.S. Commissary enjoy diplomatic immunities from civil jurisdiction under Viena Convention and as such the jurisdiction of Labour Court is not attracted in respect of them.      Kozi M, Delwar Hossain Baig Vs. Chairman 1st Labour Court Dhaka. 1, MLR (1996) (HC) 223.           

 

Time is not always the essence of contract for sale of immovable property—      Even fixation of the period of contract with power to treat it as cancelled, if not fulfilled within time does not always make time essence of the contract.      Data Mia Vs. Haji Md. Ebrahim. 8 DLR (SC) 616.      

Section- 73

In the  absence of any evidence for breach of contract, the claim of. the plaintiffs  for compensation or damages under section 73 of the Contract Act would also  fail Eastern Bank &  Anr. Vs Sufia Re-Rolling Mills & Ors. 13 BLT (HCD)221   

 

Section-73   

Section-  73 provides for compensation for loss or damage caused by breach of contract.  It provides further that such compensation is not to be given for any remote  and indirect loss or damage sustained by reason of the breach. Sonali Bank Vs. M/s,  Karnaphuli Works Ltd. 2BLT(AD)-78   

 

In  consideration of both Section-6 1(2) of sale of goods Act and Section-73 of  contract, it is held that the principal sum due to the plaintiff having been a  definite one and payable within a definite time as provided in the agreement,  the order for its payment along with interest thereon is quite lawful. Sonali Bank Vs. M/s  Karnaphuli Works Ltd. BLT(AD)-78   

Section-73

Section- 73 provides for compensation for loss or damage caused by breach of contract. It provides further that such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. [Para- 12]

Sonali Bank Vs. M/S Kamaphuli Works Ltd. 2BLT (AD)-78

In consideration of both Section-61(2) of sale of goods Act and Section-73 of contract, it is held that the principal sum due to the plaintiff having been a definite one and payable within a definite time as provided in the agreement, the order for its payment along with interest thereon is quite lawful. [Para- 13]  Sonali Bank Vs. M/S Kamaphuli Works Ltd. 2 BLT (AD)-78 

Section—73

Shipping Law—Delay in carriage—Remoteness of damage—Loss of profit—Loss of profit recoverable as damages for breach of lie contract of carriage by deviation involving delay—Loss of market will be found to be within the contemplation of the parties in car— ‘age of goods by sea—When ship was incapable of performing the voyage within the pulated period due to any fault in the ship, the carrier must face the consequence—Carriers ‘here apprised of the salt crisis and urgency mediate shipment—Carrier must be saddled with liability.

Al-Sayer Navigation Co. Vs. Delta Internationl Traders Ltd. & others; and Delta international Traders Ltd. Vs. M. V. Kuan Hai renamed M.D. Al-Sayer; 2BLD(AD)69

Ref: L.R. Vol. 11. 118; Heron II, (1967) 3 H.E.R. 686: (1902)2 K.B. 614; (1854)9 Ex. 3l: 1924 F. 2 d. 384; 1929—32 F. 2d 929; i)39 I All. E.R. I: All E.R. Rep 1900—03 P. I S I.

Section—73

Breach of contract—Relief’s available— When a contract is broken it gives rise to two reliefs namely, compensation or specific performance —Where the contract cannot be specifically enforced the relief available is compensation—Specific Relief Act (I of 1872). S. 21

Burinah Eastern Ltd. Vs. MIs. Hazi Mohainmd Ali and others; and Idris Alani Vs. MIS. Haji Mohammad Ali and others; 5BLD(HCI))159

Ref: I 3DLR(SC)228:P.L.D. 196 l(SC)53 1; PLD 195 8( WP)63: 1 7DLR(SC) II PU) I 965( S C) 83: AJ.R.l944(Oudh)l39: PLI)l964(SC) 106: 35DLR(AD)127; 14DLR307: I6DLR (SC)l98.

Revocable Contract

A revocable contract, or for that matter, a license which is by nature revocable, cannot be specifically enforced under the law and under the law for a contract which cannot he specifically enforced, no injunction could be allowed.

Ministry of communication, Railway Division, Government of the People’s Republic of Bangladesh and others Vs. Md. Firozur Rahmnan and others; 12BLD (HCD)267

Ref: AIR. l950(East Punjab)40: 17 DLR (SC) II.

Section—73

When there are materials for ascertaining damages the trial Court illegally refused to award damages in terms of the agreement for selling medicine and earn profit. Islami Bank Bangladesh Ltd. Vs. Messes Shohag Medicine Supply and ors., 21 BLD (HCD) 1.

Ref: Amin Jute Mills Ltd. Vs. Arag Ltd, 28 DLR (AD)76—cited.

Sections 73 and 74—

In the instant case the umpire rightly awarded compensation to militate the loss suffered by the contractor and the contractor is entitled to it in the facts and circumstances of the case. The source of fund is absolutely irrelevant so far it relates to the present issue and there is no substance or material on record to classify the contract other that a contract as known in the Contract Act within the meaning of section 2 of the said Act. So, this disposes the contention so far it relates to the award of compensation by the Umpire and upholding the same by the trial Court and in view of the materials and evidence on record and discussions made aforesaid the awarding of compensation made by the Umpire does not amount to jurisdictional error in the instant case. Bangladesh Water Development Board vs Titas Prokaushali Ltd 11 BLC 398.

Section 73–

A share–holder in a company cannot sue the company for wrong or damage or for any loss suffered by the company. If any wrong is done or damage is done to a company, the company is the only person who can claim for damages against the person who has caused such damages.

Trang Ice and Cold Storage Company Ltd vs Amin Fish Farm 46 DLR 39.

 

Section 73–

In an appropriate case a Court of Law can apply and imply warranty, as distinguished from an express contract or express warranty, on the presumed intention of the parties and upon reason.

Hutchison Telecom Bangladesh Ltd vs Bangladesh Telegraph and Telephone Board and others 48 DLR (AD) 30.

 

Section 73–

When there are materials for ascertaining damages the trial Court illegally refused to award damages in terms of the agreement for selling medicine and earn profits.

Islami Bank Bangladesh Ltd vs Shohag Medicine Supply and others 52 DLR 571.

 

Sections 73 & 124 –

The remedy under these provisions of the Contract Act lies in the Civil Court, if at all, not under the Admiralty Jurisdiction on a Marine Hull Policy.

Sadharan Bima Corporation vs Bengal Liner Ltd and another 48 DLR (AD) 143.

 

Section 74–

Since the agreement between the parties for sale of the suit property was enforceable in law and the term of the agreement for depositing 25% of the total consideration money was violated, the defendant legally forfeited the earnest money given by the tenderer.

James Fialay PLC vs Meshbahuddin Ahmed 46 DLR 624.

Section—76

Realization of debt or pawn—For the realisation of payment of any debt or pawn from the defaulter pawner, there is no bar in the institution of a proper suit by the pawner and at the same time to retain the pledged goods, if any, in his custody as’ collateral security—The two reliefs, though concurrent, are yet alternative and both cannot he resorted to at a time.

Mere institution of a suit by the pawner for of realisation of his debt money against the pawner cannot destroy the other alternative remedy for the plaintiff-pawner to sell the pledged goods with reasonable notice to the pawner defendants with the leave of the Court.M/s. Bengal Metro Engineering Co. & others Vs. Agrani Bank; 12 BLD(HCD)484

Ref: 27DLR523: AIR. 1963(Cal) 132.

 

Sections 89 and 90       

Even if the pre-emptee does not raise the points of requirements as laid down in sections 89 and 90 of the SAT act, such requirements of law must be satisfied by the pre-emptor before claiming a right of pre-emption (Per S K Sinha majority view). Md. Habibur Rahman Bhuiyan and others Vs. Most. Galman Begum and others (Civil), 1 LNJ 100                      

Section 92(b)–

An acceptance must be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted.

Bangladesh Moktijoddah Kalyan Trust represented by the Managing Director vs Kamal Trading Agency and others 50 DLR (AD) 171.

The Contract Act, 1872 

Section 124

Confirming Bank, did not get money from the L/C. opening Bank as they re- fused to pay the money for the exported goods to the plaintiff and deprived the plaintiff from his legitimate claim and the plaintiff was deprived of US $ 5,24,441 M/S. Nippan Liner System vs. M/S Mahi Fish Processing (Mohammad Fazlul Karim J) (Civil) 6 ADC 958

The Contract Act, 1872

It appears that a contract can be specifically enforced by or against the minor if the contract was entered into by the guardian for the benefit and welfare of the minor. Habib Bank Limited vs. M/S. K. M. Enterprise (Syed Mahmud Hos- sain J) (Civil) 10 ADC 251

Contract Act 1872

Instituted the suit seeking declaration, mandatory injunction and recovery of Tk.29,64,51,760/-. According to the plaint case. Chairman, National Hous- ing Authority vs. M/s. M.R. Trading Co (S.K. Sinha J) (Civil) 8 ADC 544

Section 124—

The High Court Division held that whatever might be the considera­tion of the defendant in delivering the disputed consignment to the buyer con­signee, it must be done at its own risk and peril and thus the action of the defendant No. 1, carrier could not be absolved from its responsibility to the consignor. Accordingly, the appeal is dismissed affirming the judgment and decree of the trial Court in Money Suit No. 3 of 1992 decreeing the suit. Nippon Liner System vs Mahi Fish Processing Ltd 11 BLC (AD) 124.

Section—126

Bank guarantee—Bank under-taking to pay on the failure of performance of contract— No temporary injunction restraining the enforcement of the guarantee—Code of Civil Procedure (V of 1908) Or. 39 R.1 Uttara Bank Vs. Macneil! & Kilburn Ltd. and others; 1BLD(AD)230

Ref: (I 978)2L.I.L.Rep 166; (1978)1 L.I.L. Rep. l61:( I 975)A.C.396; A.I.R. 1970 (SC)89 I.

Section 128–

Guarantor's or Surety's liability– The liability of the principal debtor is co–extensive with that of the guarantor. A creditor is at liberty to pursue either the principal debtor or the guarantor according to his sweet will for realisation of his dues or he can proceed against both of them simultaneously.

Sonali Bank vs Hare Krishna Das and others 49 DLR 282.

Section—128

Guarantor’s liability as regards repayment of loan—The guarantor is not only responsible for repayment of the loan, his liability to repay need not even be postponed till the principal debtor fails to repay the loan—The choice lies with the creditor.

M/s. M.M. Ispahani Ltd. Vs. Sonali Bank and others; 4 BLD(AD)242

Ref:AIR. I 969(SC)297;A.I.R. I 939(PC)J I

Section—128

Guarantor’s or Surety’s liability

The liability of the principal debtor is co extensive with that of the guarantor. A creditor is at liberty to pursue either the principal debtor or the guarantor according to his sweet will for realisation of his dues or he can proceed against both of them simultaneously. Sonali Bank Vs. Mr. Hare Krishna Das and other, 16 BLD (HCD) 159.

Section—141

Repayment of loan—Denying the liability on the ground that the security has been taken away—When a person contracts a loan from a banking institution by offering valuable security but retaining its possession with itself, if cannot possibly lie in its mouth to deny the liability on the ground that the security has been lost or it had parted with its possession under compulsion—For such loss or taking away of the security persons or bodies who are responsible for it may be liable but such a plea is not sufficient to absolve the person or its obligation to repay the loan. M/s. M.M. Ispahani Ltd. Vs. Sonali Bank and others; 4BLD (AD) 242

Sections—151 and 161

Liability of the Port Authority to pay compensation for non-delivery of goods— When the Shipping Company had delivered the goods the Port Authority must be deemed to be the agent for the consignee—The liability of the Port Authority is that of a bailee—They would be liable in the absence of proof that they took as much care of the goods as a man of ordinary prudence would in similar circumstances take—A suit based on non-delivery is really based on a breach of the duty—The Chittagong Port Act (V of 1914), Ss. 50, 50A and 63.

The Chittagong Port Authority Vs. Md. Ishaque and others: 3BLD(AD)338

Ref AiR, 1959 (Mad) 367; A.LR.1928 (Lah) 774; 1895A.C.632; (1911)2 K.B.(C.A.) 29 1; ( 19 19)1KB .(C.A.)443.

Sections—151, 152 and 161

Onus of proof—Bailee’s onus under the Chittagong Port Ordinance—It is well settled that onus is on the bailee to show that missing, loss etc. happened because of factors beyond the control of the Bailee—The statutory bailee having failed to take proper measure for protection of the goods cannot avoid Iiability for the loss—Here it is not the case that the consignee having failed to clear the goods after notice the Port Authority is absolved of the liability—It is a clear case of non-delivery— Chittagong Port Act (V of 1914). s. 50A.

The Trustees of the Port of’ Chittagong Vs. Khandkar Mahbub Hossain and others; 5BLD(HD)1 15

Ref: AiR. 1957 Myssore 55: 17 DLR 582; 35 DLR(AD)364.

Sections—151, 152 and 161

Code of Civil Procedure, Order 7 Rule 11

Essential facts constituting cause of action for the plaintiff must be mentioned in the plaint. The absence of such statement of facts in the plant will mean the plaint did not disclose any specific cause of action. Non disclosure of a specific cause of action is a good ground for rejecting the plaint. Md. Ayub Vs. Sonali Bank & ors.,14 BLD (HCD) 236

Sections 151 and 152—

Section 151 of the Contract'Act provides that the bailee is required to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own: goods while section 152 of the Act provides that bailee, in the absence of special contract, is not responsible for the loss, destruction or deterioration of the thing,bailed, if he has taken the amount of care of it described in section 151. In the instant case, the plaintiff bank duly took reasonable and proper care for the protection and preservation of the pledged jute when the looting of the pledged jute took place beyond the control and comprehension of the plaintiff and as such the plaintiff cannot be held liable for the loss of the pledged jute. Reliable Jute Traders and another vs Sonali Bank and others 7 BLC 16.

Sections 151, 152 and 161–

Port Authority is not liable for any loss in this case as they informed the owner of goods to locate the same.

In this case as the owner of the drums did not remove the same from the Jetty premises, without any fault on the part of the Jetty Administration, within clear 7 working days from the time of landing of the drums in question the Jetty Administration is not liable for any loss as in this case the Port Authority informed the owners of the drums to find out the same and there was no fault on the part of the Port Authority to locate the goods. Chittagong Port Authority vs Hong Kong Shipping Lines 41 DLR 332.

 

Sections 151, 152 and 161–

Chittagong Port Authority acts as a bailee so long the goods remain in their possession. Section 50A of the Port Act will not operate if the necessary procedure is not followed.

It is true that under section 50A of the Chittagong Port Act the Port Authority is responsible for the loss of goods landed and remained in its possession or control as a bailee in view of the provisions of sections 151, 152 and 161 of the Contract Act, 1872. But section 50A will not operate in a case where the goods landed under nil mark and the consignee fails to follow the nil mark procedure to locate the goods by reason of sub­-rules (f) and (g) of Rule 64, of General Rules and the Schedules for Working of the Chittagong Port (Railway) Jetties.

Chittagong Port Authority vs Hong Kong Shipping Lines 41 DLR 332.

 

Sections 151, 152 & 161–

The Railway carries a goods delivered to it as a bailee and is bound to take such care of the goods as that of a man of ordinary prudence. It is only when it wants to limit its liability that it can enter into special contract with the parties concerned.

It appears from the records that the booking clerk, one Mr Ismail Howlader, was in the employment of the appellant and while discharging his official duties in the capacity of booking clerk delivered the goods in question to a third party. In view of the facts, circumstance, evidence and decision referred to above we are of the opinion that the defendant–appellant is absolutely liable for the act done by the booking clerk under his employment.

Chairman Rly Board vs Commerce Bank Ltd 46 DLR 254 .

Section—170

Bailee’s Lien—Question of bailee’s right to retain goods and have order of attachment— The plaintiff (bailee) could have exercised the right of lien under the Contract Act if he had possession over the scheduled materials—The High Court Division’s findings that the Bank had been in possession of the attached goods will preclude him from relying on the cited decisions in support of his claim to retain the scheduled properties as a bailee—His application for attachment itself indicates that he was not in possession of the goods—Had he been in possession. he would have asked for an order of injunction, and not for attachment—Code of Civil Procedure (V of 1908) Or. 38 Rules 5 and 8. Mohaminad Meah Vs. Pubali Bank and others; 9 BLD(AD) 57.

Ref: 28DLR(AD)43; (1915)lCh.D.621; A.l.R. I 926(C)464( 1946)2All.E.R. I 54:( 1963) 3 All. ER. 213.

Section 170–

The plaintiff did not make out any case under section 170 of the Act to retain the goods as a bailee.

In this case the plaintiff could have exercised his right under section 170 of the Contract Act if he had possession over the scheduled materials. The High Court Division's finding on the basis of the documents on record and the evidence adduced in the matter that the Bank had although been in possession of the attached goods does not suffer from any infirmity. In fact, the plaintiff did not make out any case that he was entitled under section 170 of the Contract Act to retain the scraps as a bailee till he received due remuneration for the services rendered by him. In the application for attachment; the plaintiff did not mention the word 'lien' nor did he do so in his written objection to the application for vacating that order. Muhammad Meah vs Pubali Bank 41 DLR (AD) 14.

 

Section—170   

Bailee’s Lien—Question  of bailee’s right to retain goods and have order of attachment— The plaintiff  (bailee) could have exercised the right of lien under the Contract Act if he  had possession over the scheduled materials—The High Court Division’s findings  that the Bank had been in possession of the attached goods will preclude him  from relying on the cited decisions in support of his claim to retain the  scheduled properties as a bailee—His application for attachment itself  indicates that he was not in possession of the goods—Had he been in possession.  he would have asked for an order of injunction, and not for attachment—Code of  Civil Procedure (V of 1908) Or. 38 Rules 5 and 8. Mohaminad Meah Vs. Pubali Bank and others; 9 BLD(AD) 57. Ref: 28DLR(AD)43; (1915)lCh.D.621; A.l.R. I 926(C)464(  1946)2All.E.R. I 54:( 1963) 3 All. ER. 213.    

Section 170 –

(Minority view) Per BH Chowdhury– Section 170 says lien exists in the absence of a contract to the contrary. This question has agitated the minds of the English Judges and the law was surveyed in Tappenden vs Antus (1964) 2 QBD 185=1963 All ER 213.

Muhammad Meah vs Pubali Bank 41 DLR (AD) 14.

 

Section 170–

Lien cannot be a ground for action, it can be taken as defence. Lien cannot be a ground for action, it can be taken as defence. Prcisely that was done here in Miscellaneous Judicial Case No.1 which was brought to the Bank . Here the plaintiff can raise the point of lien in the face of the application for releasing the attached properties. And that has happened in this case.

Muhammad Meah vs Pubali Bank 41 DLR (AD) 14.

 

Section 170–

Under section 170 of the Contract Act a ship breaker can retain goods for his remuneration. (Minority view) The bank granted the loan for buying the ship and the ship is to be scrapped and the scrap is to be sold in the market and the sale proceeds is to be deposited into cash credit account for liquidating the debt. Unless the ship is broken how the debt is to be liquidated? Therefore, the question comes what about the remuneration of the ship breaker and the law says in section 170 of the Contract Act that he can retain such goods.

Muhammad Meah vs Pubali Bank 41 DLR (AD) 14.

 

Section 170 –

(Minority Judgment) Per BH Chowdhury J–Execution of decree when all the properties are mortgaged to the Bank–Applica­tion of section 170 of the Contract Act–Plaintiffs claim on lien–Remuneration of the breaker – ­Omission to mention the word "lien" by the plaintiff–Effect of–Rule of pleading does not warrant it.

The crux of the problem as to how he could execute the decree when all the properties of Janapad Enterprise are mortgaged to the Bank. The only available property was the scheduled property which was valued for only eight lac. The question was, whether the plaintiff could retain this property. Plaintiffs claim for his remuneration is grounded on lien and section 170 says that he has a right to retain such goods until he receives due remuneration for the services in the absence of the contract to the contrary. ls there any contract to the contrary in this case between the Bank and the borrower that the remuneration of the breaker must not be given out of the sale proceeds of the ships? The answer is in the negative. If so, then why the ship breaker will be deprived of his remuneration. It was contended by the learned Counsel appearing for the respondent that in the application for attachment the plaintiff did not mention the word 'lien' nor did he do so in his written objection to the application filed by the Bank for vacating that order. To say the least rule of pleading does not warrant it.

Muhammad Meah vs Pubali Bank 41 DLR (AD) 14.

 

Section 171–

Claim and counter–claim between the petitioner and the Agrani Bank– Petitioner (appellant) claimed a sum of Taka 75,55,020.28 paisa after adjustment in the suit­Trial Court allowed prayer for mandatory injunction–Appellant contended that the import passbook issued by the CCIE could not be a security for the purpose of Banker's general lien within the meaning of section 171 of the Contract Act–High Court Division issued order directing the petitioner to furnish security to the extent of the claim of the bank whereupon the defendant Bank is to return the import passbook either to the CCIE or to the nominated bank of the petitioner and set aside the order of mandatory injunction.

Held: The Court will not decide a point, especially in the interlocutory matter which will not advance the cause of justice. It will merely delay the process of coming to a conclusion as to claim and counter–claim which can only be thrashed out in the pending suit.

The Dhaka Dyeing and Manufacturing Co vs Agrani Bank 42 DLR(AD) 60,

 

Section 171 –

In the present case concerning adjustment of loan by share certificates, the provisions of Banking Companies Ordinance shall be read and construed in addition to section 171 of the ContractAct. From the provision of the Sale of Goods Act it appears that the shares of a company are also goods and as such moveable property. Money is a species of goods over which lien may be exercised. Where a banker has advanced money to another, he has a lien on all securities which come within his hand for the amount of his general balance unless there is an express contract to the contrary.

Sonali Bank vs Bengal Liner Ltd 42 DLR 487.

 

Section 171–

Banker's right of lien– ­Whether a bank can retain depositor's money in exercise of its right of general lien– Depositor's money with the bank is not in the nature of any goods bailed to the bank–Money deposited by the plaintiff in his account cannot be retained by the bank for the simple reason that by the said deposit a relationship of debtor and creditor is established between the bank and its customer and the bank can use the money in any manner it likes as the ownership in such deposit vests in the bank and there is no question of exercising lien on the money over which the bank has absolute right of ownership and possession–The bank could not withhold the money deposited by the plaintiff with the defendant No. I in exercise of its right of general lien.

Rupali Bank vs Haji Ahmed Sabur 43 DLR 464.

Section—171

The money deposited with bank is not in the nature of any goods bailed to the bank and as such cannot be retained by the bank for the simple reason that by the said deposit a relationship of debtor and creditor is established between the bank and its customer and the bank can use the money in any manner it likes as the ownership in such deposit vests with the bank and there is no question of exercising lien on the money over, which the bank has absolute right of ownership and possession. Rupali Bank Vs. Haji Ahmed Sabur and another, 13 BLD (HCD) 35.

Section 172–

In hypothecation, the borrower has got actual physical possession of the goods as an agent, as it were, of the bank. Eastern Bank Ltd and another vs Sufia Re–Rolling Mills and Steel Ltd and others 56 DLR 530

 

Section- 133   

Liability of guarantor arises only when one is  proved to be guarantor. Moqbul Brothers and  Another Vs. Rupali Bank & Ors. 8BLT (HCD)-14 Section – 172 In case  of pledge, goods are kept in the godown under lock and key of the bank under  its direct. supervision and the goods are undoubtedly. in the possession,  physical and otherwise, of the bank and removal, or addition of the stock are  not permissible without permission of the bank. The position with regard to  hypothecation is different because the goods are not under lock and key of the  bank but are allowed to be kept at the factory or the premises of the borrower  without any lock and key of the bank as such. Such possession is no doubt  constructive possession of the bank by – virtue of the contract of  hypothecation. which obliges the borrower to submit a regular return to the  bank showing the increase and. I or decrease of said goods to enable the bank  from time to time to verify the drawing of the borrower. In hypothecation, the  borrower has got actual physical possession of the goods as an agent, as it  were, of the bank. Eastern Bank &  Anr. Vs Sufia Re-Rolling Mills & Ors. 13 BLT (HCD)221       

Section 176–

For realisation of payment of debt or pawn there is no bar to institute a proper suit by the pawnee and at the same time to retain the pledged goods, if any, in his custody as a collateral security. But the two reliefs, though concurrent, are yet alternative and both cannot be resorted to at a time.

Bengal Metro Engineering Co. vs Agrani Bank 46 DLR 168.

 

Section 176–

Law relating to the right of the pawnee does not require him to sell the pawned goods first and thereafter, if any amount remains due from the pawnor then to file the suit for the realisation thereof.

Islami Bank Bangladesh Ltd vs Sub–Judge and Additional Artha Rin Adalat and others 55 DLR (AD) 121

 

Sections 176 & 177–

Where the pawnee is not in possession of the property pledged to him as security for the payment of the loan nor did he prove that it had been damaged or destroyed at the risk of the defendant (pawnee) the pawnee is not entitled to recover the debt because the pawnor had the right conferred by section 177 to redeem his property at any time before the actual sale prior to filing of the suit.

Pubali Bank Ltd vs Sultana Oil Mills and Soap Factory and others 51 DLR.323

Section—176   

Bailee’s pica of equity  and pawnee’s right—Whether the Court could uphold the order of attachment  in favour of the bailee as otherwise he will be left without any remedy- In  this case equity is not in favour of the plaintiff (bai lee )—From the facts  and circumstances of the case it is to be held that plaintiff knew about the  defendant’s transaction that the vessel with all its materials was pledged with  the Bank—Under the Contract Act and the terms of transaction the Bank is free  to follow any of the ways legally available for realisation of its dues and the  plea that the Bank ought to have proceeded against other securities has got no  substance—The Court will refrain from making any officious direction to follow  a particular secuirty. Mohaininad Meah Vs. Pubali Bank and others; 9BLD (AD)57.      

Section—176

Bailee’s pica of equity and pawnee’s right—Whether the Court could uphold the order of attachment in favour of the bailee as otherwise he will be left without any remedy- In this case equity is not in favour of the plaintiff (bai lee )—From the facts and circumstances of the case it is to be held that plaintiff knew about the defendant’s transaction that the vessel with all its materials was pledged with the Bank—Under the Contract Act and the terms of transaction the Bank is free to follow any of the ways legally available for realisation of its dues and the plea that the Bank ought to have proceeded against other securities has got no substance—The Court will refrain from making any officious direction to follow a particular secuirty. Mohaininad Meah Vs. Pubali Bank and others; 9BLD (AD)57.

Sections—176 and 177

In view of the provisions of section 176 and 177 of the Act it appears that where the Pawnee is not in possession of the property pledged to him as security for the payment of the loan nor did he prove that it had been damaged or destroyed at the risk of the defendant (Pawnee), the Pawnee is not entitled to recover the debt because the pawnor had the right conferred by section 177 to redeem his property at any time before the actual sale prior to filing of the suit. Pubali Bank Ltd Vs MIs. Sultana Oil Mills and Soap Factory and others, 19 BLD (HCD)249

Section 182—The relationship created under the agency agreement is a fiduciary relationship which is absent in the relationship of seller and customer. This fiduciary relationship is the crux of the provision of section 405 of the Penal Code which clearly defined the offence of “criminal breach of trust” as when a person is entrusted with property who dishonestly converts the same for his own use of that property or dishonestly uses or disposes of the direction of any legal contract expressed or implied then the offence of criminal breach of trust is committed, if committed by agent, etc. will be liable for punishment under the provision of section 409 of the Penal Code. Bhaskar Chakraborty vs State 59 DLR 325.

Section—201

Termination of Agency-Power of Attorney

The settled law is that on the demise of either parties to a power of attorney the relationship between the principal and the attorney ceases in terms of section 201 of the Contract Act. Defendant No. 8 represented defendant Nos. 1-7 both for the purpose of the suit land and for execution of the Kabala as their attorney. On the death of defendant No. 8 nothing devolved upon his heirs and as such there was no necessity for impleading his heirs in the execution case. Md. Abdur Rahman Vs Md. lqbal Ahmed and others, 17 BLD (AD) 175

Section 201–

On demise of either party to the power of attorney the relationship between the principal and the attorney ceases.

Abdur Rahman (Md) vs Md Iqbal Ahmed and others 49 DLR (AD) 142.

 

Sections 202 and 203–

A power of attorney becomes irrevocable when if the power were revoked the attorney would be deprived of a substantial right.

Begum Shamsunnahar Chowdhury vs Md Masud Jamal and others 48 DLR 267.

Section—217

An agent is paid by his principal only, to whom he owes his contractual duty. An agent will be in a situation of conflict of interest and dishonesty, and it will tantamount to an underhand dealing, if he receives any remuneration from a third party, unless it is stipulated between the principal and other party that the responsibility of making payment of commission to the agent shall lie on the other party. S.M. Faziul Haque v. Salahuddin Ahmed and another, 22 BLD (HCD) 155.

Ref: Anglo African Merchants Ltd. v. Bayley (1970) 1 QB 311; Cook v. Deeks (1916) 1 AC 554

Section 217–

Under the law of agency the agent is paid by his principal only. An agent owes his contractual duty to his principal only and the agent will be in a situation of conflict of interest and dishonesty if he receives any remuneration from the third party.

SM Fazlul Haque vs Salahuddin Ahmed and another 54 DLR 612

Section—226

An agent is not himself a party to any contract entered into by his principal through him with the third party if he posed as a disclosed, agent. As such no question of his liability to such third party for any breach can arise, and the only person who can be sued is the principal. There are a few exceptions where an agent can be liable. S.M. Faziul Haque v. Salahuddin Ahmed and another, 22 BLD (HCD) 155.

Ref: Montgomerie v. United Kingdom Mutual SS Association (1891) 1 QB 370; Pacquin v. Beanclerk (1906) AC 148; Elbinger AG Fur Fabrication von Eisonbahn Material v. Clay (1873) LR, 8 QB 313; Teheran Euro Ltd. v. S.T. Bolton Tractor Ltd. (1986) 2 All ER 886.

Banking—Bank guaranteeing satisfactory performance of contract by Seller—seller defaulted in delivering goods within stipulated time--Purchaser called upon the bank to credit the guaranteed amount to its account—Bank refusing to comply contending that the contract till due to circumstances beyond the seller’s control—Whether Bank liable to en- cash the guarantee. Pubali Bank Vs. Bangladesh Agriculture Development corporation; 2BLD (HCD)I7

Ref: IBLD(AD)230; l978L.I.L. Rep.l66; 1978)Q.B. 159.

Section 226–

No question of agent's liability to a third party for any breach can arise. General principle dictates that the contract is the contract of the principal, not that of the agent, and prima facie in law the only person who can be sued is the principal. SM Fazlul Haque vs Salahuddin Ahmed and another 54 DLR 612.

Section—230

Loss of goods—Loss of goods while in possession of agent of the carrier after off- loading—Both the carrier and its agent are liable.

Bangladesh Biman Vs. Roxana Tradersand others; and Air India International Vs. Roxaita Traders and others; 1BLD(HCD) 352

Ref: I9DLR 75; 21 DLR(SC)245.

Section—230

Liability of agent—Liability for acts done on behalf of disclosed principals—The agent cannot personaly be liable for the work done by him on behalf of his principal in the absence of a contract that the agent would be liable—Defendant Nos. 2, 3 and 4 being agents of disclosed principals they are not liable to answer the claims arising out of wrong done by their principals. Bangladesh Chemical Industries Corporation and another Vs. M. V. Kayo Alkyon and others; 7BLD (HCD) 1

Ref: 8 DLR 349.

Section 238–

It could not be said that the then manger of the Bank received the cheques in course of his employment under the Bank but it seems that he was carrying on a parallel business–one as the agent of the Bank and the other as the agent of the plaintiff. Sonali Bank vs MA Hakim 39 DLR 367.

Contract/Agreement Matter

Writ jurisdiction in case of breach of contract- Case of Superintendent Engineer, RHD Sylhet and others v. Md. Eunus and Brothers (Pvt.) Ltd. reported in 31 BLD (AD) 1 the decision of this Division reported in 9 BLC (AD)1. noted earlier, was considered and six conditions were formulated, which would permit entertaining an application within the writ jurisdiction in case of breach of contract. These were as follows:

(a) the contract is entered into by the Government in the capacity as sovereign;

(b) where contractual obligation sought to be enforced in writ jurisdiction arises out of statutory duty or sovereign obligation or public function of a public authority;

(c) where contract is entered into in exercise of an enacting power conferred by a statute that by itself does not render the contract a statutory contract, but if entering into a contract containing prescribed terms and conditions is a must under the statute then that contract becomes a statutory contract. If a contract incorporates certain terms and conditions in it which are statutory then the said contract to that extent is statutory';

(d) where a statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions and the contract so entered by the statutory ower then merely because one of the parties to the contract is statutory or public body such contract is not a statutory contract:

(e) when contract is entered into by a public authority invested with the statutory power, in case of breach thereof relief in writ jurisdiction may be sought as against such on the plea that the contract was entered into by the public authority invested with a statutory power;

(f) where the contract has been entered into in exercise of statutory power by a statutory authority in terms of the statutory provisions and then breach thereof gives right to the aggrieved party to invoke writ jurisdiction because the relief sought is against breach of statutory obligation." ...Government of Bangladesh -VS- M/S. AMS Faraj Construction, [6 LM (AD) 23]

In absence of any specific provision in the Agreement/policy guideline or under any law, the price cannot be changed by giving retrospective effect- The Government/the Ministry cannot enhance the price of the goods violating the terms of the contract executed between BPC, the Ministry and the Writ Petitioner. However, according to the Agreement there is no legal bar for reformulating the price of petroleum products by the Government but in absence of any specific provision in the Agreement/policy guideline or under any law, the price cannot be changed by giving retrospective effect. It is to be noted that it is not disputed that the Government previously by Gazette Notification dated 10.01.2013 re-fixed the price of the petroleum products and the said Gazette Notification was given effect on the next date from the date of publication of the Gazette Notification.

Thus, considering the totality of the materials on record, we are of the view that the High Court Division legally decided that the price of petroleum products cannot be fixed/re-fixed by giving retrospective effect. ....Bangladesh Petroleum Corporation  =VS= Petromax Refinery Ltd., [9 LM (AD) 146]

Agreement for sale of Property- The judgment and decree passed by the trial Court is restored with modification of the amount of compensation which will now be Tk. two crores. The respondent is directed to execute and register the sale deed in question on receipt of this amount from the appellant within three months from date, failing which, the appellant will be at liberty to get the kabala deed executed and registered through Court on deposit of the said amount in Court. If the Purchaser fails to pay the amount ordered by us within the time allowed by us, then the agreement for sale in question shall stand cancelled and the Vendor will be entitled to regain vacant possession of the suit property within one month thereafter. ......Mahua Khair =VS= Amena Begum Ali Ispahani, [3 LM (AD) 246]

There was no clause in the agreement- We find from the judgment of the trial Court that the learned Judge noted that there was no clause in the agreement that it would be cancelled for non- performance of any of the terms and that time was not of the essence of the contract and cancelling the agreement was illegal. The suit for specific performance of contract was barred by limitation was therefore, not accepted. Purchaser did not perform her part in obtaining Income Tax Clearance Certificate..... Mahua Khair -VS- Amena Begum Ali Ispahani, [3 LM (AD) 246]

Black-listed for failure to perform in contract- There was no provision for the company to claim damages or compensation for breach of contract. Equally there was no provision for terminating or rescinding the contract for any reason other than breach of the contract. From the facts and circumstances before us we find that the instant contract was rescinded due to the fact that the company had been black-listed for failure to perform in another contract. There is no term in the present contract that it (the contract) can be rescinded or terminated for the reason that the company is/may be black-listed for its non-performance in respect of another contract. Hence, we are of the view that the rescission in the way and for the reason that it was done, was not lawful, such action being beyond the terms and conditions of the contract. The appellant company is entitled to receive the full contractual amount of Tk.85,98,775.50/- with deduction only of Tk. 22,02,856/-, which was received as part bills. Hence, the respondent is directed to pay Tk. 63,95,919.50 to the appellant company. The appellant company shall be reimbursed by the respondent the actual amount of the earnest money and security deposit, if any. which they claim to have paid at the time of entering into the contract......A. Latif & Co. Ltd-VS- Executive Engineer, LGED Rangpur, [3 LM (AD) 26]

Consultancy fees- Consultancy fees for the second power plant, the High Court Division concluded that this contract was signed long after the consultancy agreement and was not resultant from the said consultancy. We also find that the plaintiff admitted in his cross-examination that the second contract was signed six years after 03.05.1998. We, therefore, do not find any illegality in the reasoning given by the High Court Division that the plaintiff is not entitled to receive any consultancy fees for the second contract...... Muhammad Iqbal Hussain -VS- Westmont Power (BD) Ltd., [3 LM (AD) 422]

Contract- The writ-petitioner challenged the Department due to the fact that their bid was not successful. Before this Division it was argued that the writ petition involved a commercial contract and hence, the High Court Division was wrong in holding the writ petition maintainable. Upon referring to the six conditions noted above, it was held that the contract does not fulfill any of the requirements to make the same statutory contract or contract entered into by the Government in the capacity as sovereign. We find that the contract in question having been entered into by the official liquidator was not a sovereign contract and hence it was not amenable to the writ jurisdiction. The appeal is allowed and the judgment and order of the High Court Division is set aside.....Government of Bangladesh VS= M/S. AMS Faraj Construction, [6 LM (AD) 23]

When the contract has become impossible with no fault of the plaintiff- We are of the view that ends of justice be served in awarding compensation of Rs.10 lakh in favour of the plaintiff appellants out of the compensation received consequent to the acquisition of the suit land. The rest of the compensation, if any, received towards land and shops in question has to be paid to the land owner that is defendant Nos. 1 to 5 (respondent Nos.2 to 6 to this appeal) after deducting an amount of Rs.10 lakh out of the said compensation. We further direct in event compensation has not yet been disbursed, the compensation be disbursed to the appellants (legal heirs of the plaintiff) and respondent Nos.2 to 6 in the above manner and in the event the compensation has been received by defendant No.6 (respondent No.1), respondent No.1 shall return the compensation to the extent of Rs.10 lakh to the appellants and the rest of the amount to defendant Nos.1 to 5 (respondent Nos.2 to 6). The judgment and decree of the High Court dated 02.11.2012is modified to the above extent. ..... Urmila Devi VS The Deity, Mandir Shree Chamunda Devi, [4 LM (SC) 96]