Law:

Section:

(a) Contract Act (IX of 1872)-------S. 10---Contract---C&F contract---Meaning---In C&F contract, freight is included in cost of goods and the seller is liable to deliver the same at the place named in the contract. (b) Carriage or Goods By Sea Act (XXVI of 1925)--- ----Sched., Art.4(c)--Contract Act (IX of 1872), Ss. 126 & 128---Suit for recovery of money ---Encashment of Bank guarantee---Title in goods when passed to the purchaser---Contract between the patties was for the supply of goods from foreign country by plaintiff on C&F basis and the goods were to be delivered in Pakistan---plaintiff furnished Bank guarantee in favour of the defendant for due performance of the agreement---After loading of the goods, vessel went aground and resulted in total loss of consignment--­Defendant encashed the Bank guarantee as the plaintiff failed to supply the goods---Plea by the plaintiff was that as it had performed its part of contract and the delivery was complete, the defendant was not entitled to encash the Bank guarantee as the title of the goods had passed to the defendant --- was filed for recovery of such amount and the same was decreed by the Trial Court---Validity---Where according to the contract between the parties it was the responsibility of the plaintiff to have supplied the goods in Pakistan, it could not be said that the title in the goods had passed to the defendant when the goods were loaded on the vessel---Bank guarantee `itself provided in unequivocal terms that the plaintiff was under an obligation to supply the goods in Pakistan and, therefore, on failure of the plaintiff to supply, the goods for any reason, whatsoever, the defendant was entitled to encash the Bank guarantee---Trial Court had wrongly found that the plaintiff was entitled to recover the amount from the defendant---Judgment and decree of Trial Court was set aside---Appeal was allowed in circumstances. Mehta & Co. v. Messrs Parmeshardas Parshotamdas AIR 1924 Sindh 4 and Law and Bonar Limited v. British American Tobacco Company, Limited 1916 KB 605 ref. (c) Contract Act (IX of 1872)--- ----Ss. 126 & 128---Bank guarantee---Bank guarantee, encashment of--­Failure…

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