JUDGMENT: M. Seetharama Murti, J. 1. This is a first appeal suit by the unsuccessful defendant assailing the judgment dated 20.2.2004 of the learned VII Additional Senior Civil Judge, City Civil Court, Hyderabad passed in OS No. 1657 of 1997 filed for recovery of money. Since this Court of first appeal is the last Court of fact, it is necessary to refer to the pleadings of the parties in the first instance. 2. The plaint averments, in brief, are as under: 'The plaintiff-the State Trading Corporation of India Limited is a Government company. The plaintiff had received an inquiry from Louis-Drafus-Italia SPA via Ponte Masiuo 41, 48100 Revenna, Italy ('the foreign buyer', for brevity) whether the plaintiff can supply tapioca dried chips ('the goods', for brevity). Thereupon, by a fax message, the plaintiff had contacted the defendant on 20.2.1995 and made enquiries with the defendant as to whether the defendant could supply the goods. By a reply fax message dated 23.2.1995, the defendant had agreed to supply the Indian Tapioca Dried Chips of semi peeled in a quantity of 7000 Metric Tonnes packed in bulk at the contracted price to the foreign buyer on C & F (Clearing and Forwarding) Free out 1 safe Berth Revenna Italy Basis. In the said message, the defendant had also stated that the terms, other than those stated in the fax message, will be as per Grain and Feed Trade Association, London (hereinafter referred to as 'the GAFTA') Contract Nos. 100 and 119/125 including arbitration clause. In view of the said offer made by the defendant, the plaintiff, in turn, had sent a fax message on 23.2.1995 to the foreign buyer confirming the supply and it was also mentioned that the defendant is the supplier. Accordingly, the plaintiff had entered into a contract with the foreign buyer (the Italian Company) on 23.2.1995. Simultaneously, on 24.2.1995, the plaintiff had informed the defendant the confirmation that the foreign buyer had placed the order as per the details given in the said letter. However, by a fax message dated 1.3.1995, the defendant had requested for certain terms regarding presentation of documents. The plaintiff had sent a reply fax message on 2.3.1995 to the defendant informing that as per the request the defendant can delete the words 'ascertained by scale' and insert the words 'Ascertained by Scale/Weigh Bridge'. However, by a fax message dated 1.3.1995, the defendant had requested for certain terms regarding presentation of documents. The plaintiff had sent a reply fax message on 2.3.1995 to the defendant informing that as per the request the defendant can delete the words 'ascertained by scale' and insert the words 'Ascertained by Scale/Weigh Bridge'. The plaintiff had further informed the defendant that in respect of the stipulation in the reimbursement clause that it should be made by the issuing bank within three working days, the plaintiff was informed by the foreign buyer that the letter of credit will be governed by the provisions of UCP 500 which embodies the time limit within which payment has to be made by the opening bank. The defendant was further informed in the same message that as per the UCP 500, the reimbursing bank will dispose of the documents within seven banking days following the date of the receipt of the documents. The plaintiff had further promised the defendant that the matter would be followed by its office at Frankfurt once the documents are sent by the negotiating bank to the opening bank, so that the reimbursement is effected immediately on presentation of the documents. The plaintiff had requested the defendant not to insist upon insertion of a definite time limit for reimbursement and had requested the defendant to confirm its consent for the same, so that the foreign buyer can be informed accordingly. By a letter dated 9.3.1995, the plaintiff had informed the defendant that the foreign buyer had opened the letter of credit on 6.3.1995 for USD 10,85,000 and that the original credit will be assigned to the defendant in due course. The defendant was informed by the said letter that in the mean while, back-to-back contract would be sent for its signature and return along with corporate guarantee by the defendant as per the discussions held. With the covering letter dated 14.3.1995, the back-to-back contract in triplicate was sent to the defendant for signatures and return of two copies along with a corporate guarantee; and in the covering letter the defendant was requested for furnishing the name and address of its banker through whom the letter of credit has to be assigned in favour of the defendant. By letter dated 15.3.1995, the plaintiff informed the defendant that its foreign buyer has requested to name the vessel (Flag/Built) class and ETA Load Port for the purpose of covering marine insurance. The plaintiff along with a letter dated 29.3.1995 had communicated the copy of message sent by the plaintiff to its foreign buyer basing on the contract entered into by the defendant on 23.2.1995 for supply of 7000 metric tonnes of Indian Tapioca Chips. The defendant had entered into the contract on 22.3.1995 by way of fax message sent by it; and having received all the letters sent by the plaintiff had accepted all the terms and conditions without any demur. However, to the utter shock and surprise of the plaintiff, the defendant had sent a message on 30.3.1995 stating that the availability of tapioca (goods) in the market is less than the initial projection and that in consequence the arrivals in the market have come down subsequently; and that the defendant had signed agreements with two suppliers locally and that they have defaulted in their supplies due to reasons mentioned in the letter and that therefore, the defendant was prevented from executing the contract due to non-availability of sufficient cargo (goods) and that the foreign buyer should, therefore, be informed that the cargo is not coming and sought cooperation in cancelling the contract. On receipt of the message from the defendant, the plaintiff, in turn, had informed the foreign buyer the contents of the message of the defendant. On the same day, the foreign buyer had enquired as to whether the plaintiff is going to fulfill its obligation under the contract with the foreign buyer or not despite its difficulties, if any, with the defendant. Thereupon, the plaintiff passed on the said message received by the plaintiff from the foreign buyer to the defendant. The defendant had sent a reply dated 3.4.1995 to the plaintiff, wherein it had admitted about the contract entered into by it by its message dated 23.2.1995, but, took a different stand contending that the quantity was not available at the market and that was the reason why the defendant suggested the cancellation of the contract. The defendant had sent a reply dated 3.4.1995 to the plaintiff, wherein it had admitted about the contract entered into by it by its message dated 23.2.1995, but, took a different stand contending that the quantity was not available at the market and that was the reason why the defendant suggested the cancellation of the contract. The plaintiff by letter dated 5.4.1995 addressed to the defendant, had disputed the alleged delay of opening the letter of credit since there was no stipulation of time as per the offer of the defendant and acceptance by the plaintiff on the same day. The plaintiff had also informed the foreign buyer about the contentions raised by the defendant to the effect that the material (goods) was not available in the market. By letters dated 5.4.1995 and 6.4.1995, the plaintiff had informed the defendant that the defendant should fulfill its obligation under the contract dated 23.2.1995. The plaintiff had also informed the defendant about the fact of opening of the letter of credit by the foreign buyer with a direction to the plaintiff to fulfill its obligation under the contract with the foreign buyer. By message dated 13.4.1995, the defendant had informed the plaintiff that the defendant has been making all efforts to secure goods for meeting the shipment, but, there was no change in the circumstances as informed by him on 28.3.1995. Thereupon, the plaintiff had communicated to the foreign buyer the reasons given and the contentions that were raised by the defendant and had requested the foreign buyer to give an option either to cancel the contract at par or to defer its implementation till the next season. The defendant was also informed by the plaintiff by its letter dated 2.5.1995 about the message of the foreign buyer received by the plaintiff asking the defendant to arrange the vessel in execution of the contract. By letter dated 12.5.1995, the plaintiff informed the defendant about the message it had received from the foreign buyer seeking confirmation of the fulfillment of the contract. The plaintiff had sent two more reminders on 15.5.1995 and 25.5.1995 to the defendant but the defendant did not choose to send any reply. By letter dated 12.5.1995, the plaintiff informed the defendant about the message it had received from the foreign buyer seeking confirmation of the fulfillment of the contract. The plaintiff had sent two more reminders on 15.5.1995 and 25.5.1995 to the defendant but the defendant did not choose to send any reply. By a letter dated 26.5.1995, the plaintiff had informed the defendant about the contents of the message it received from its foreign buyer to the effect that on the failure of the plaintiff to tender a vessel within the time provided by GAFTA CTR No. 100 and in accordance with default clause P.A.R. (F), the foreign buyer would consider the plaintiff to be in default and that they were investigating in the market to establish the default price and that they would revert in due course. By a letter dated 1.6.1995, the plaintiff had informed the defendant that its foreign buyer sent a message claiming damages in a sum of USD 1,68,000/- from the plaintiff for its default, basing on difference between the contract price and market value and that the plaintiff should confirm remittance of funds, failing which they would act as per CTR terms. As there was no reply from the defendant the plaintiff was constrained to address another letter dated 7.6.1995 to the defendant informing that the foreign buyer had claimed damages to a tune of USD 1,68,000. The defendant was also informed that the foreign buyer is directing the plaintiff to accept the claim before 15.6.1995 failing which the foreign buyer would proceed in Arbitration with one Mr. A.G. Scott as their Arbitrator. By a letter dated 14.6.1995, the plaintiff had once again informed the defendant that its proposals for settlement were not accepted by the foreign buyer and that the foreign buyer has claimed damages from the plaintiff with a threat that he would proceed in Arbitration against plaintiff if the plaintiff does not settle the dispute before 15.6.1995. The plaintiff had requested the defendant to settle the matter positively failing which any penalties, losses, damages and other liabilities imposed finally by the foreign buyer on the plaintiff would be passed on to the defendant. The plaintiff had informed the defendant that the foreign buyer also rejected the request of the plaintiff, for extension of time beyond 15.6.1995 to enable the defendant to settle the dispute. The plaintiff had informed the defendant that the foreign buyer also rejected the request of the plaintiff, for extension of time beyond 15.6.1995 to enable the defendant to settle the dispute. Thereupon, the plaintiff had sent another letter dated 19.6.1995 to the defendant once again reiterating the earlier stand that the defendant would be held responsible for any damages imposed by the foreign buyer on the plaintiff. On the very same day, i.e., 19.6.1995, a letter was addressed to the Director of the defendant firm apprising him about the facts and requesting for his intervention in the matter. On 19.6.1995, the defendant had sent a reply letter to the plaintiff stating inter alia that it disagrees with the letters sent by the plaintiff. In the said letter, it is stated that the defendant had never agreed for certain terms of the contract alleged to have been mentioned in the plaintiffs letter dated 1.3.1995 and that the letter of credit dated 6.3.1995 was not in accordance with the discussions alleged to have been held by the defendant and that therefore, the defendant could not sign the contract. In the same letter, the defendant took another stand that since there was no reply from the plaintiff till 28.3.1995 to the message dated 1.3.1995 of the defendant, the defendant could not procure cargo and that non-availability of the cargo prevented it from sourcing. The said contentions of the defendant are factually incorrect as the plaintiff sent as many as five letters between 1.3.1995 and 29.3.1995 to the defendant. The plaintiff had informed the defendant accordingly by letter dated 20.6.1995 and that it was the defendant who kept silent even after receiving all the letters. In the letter 20.6.1995, the defendant was categorically informed that there is a concluded contract and this is so in view of the fact that the defendant himself informed the plaintiff in reply to the plaintiffs letter dated 14.3.1995 that it was negotiating with three banks at Mumbai and SBI at Hyderabad for certain facilities and that it would come back with its choice. The plaintiff had also informed the defendant that its contention that it was prevented from sourcing material is incorrect and the same is contrary to the fax message dated 30.3.1995 of the defendant and that therefore, the defendant would be held responsible for any damage the plaintiff would be put to by the foreign buyer. The plaintiff had also informed the defendant that its contention that it was prevented from sourcing material is incorrect and the same is contrary to the fax message dated 30.3.1995 of the defendant and that therefore, the defendant would be held responsible for any damage the plaintiff would be put to by the foreign buyer. The defendant had sent a reply dated 27.6.1995 refuting even the factual statement borne out by record. The defendant had sent another letter on 18.7.1995 to the plaintiff making all false allegations and contending that the letters given by the defendant including the one dated 30.3.1995 were given at the request of the plaintiffs Branch Manager, as a backup paper and that the Branch Manager in a hurry got opened the letter of credit although there has been no agreement on certain terms and conditions by the defendant. The plaintiff along with the letter dated 7.11.1995 sent to the defendant, the copies of the documents received by the plaintiff in the Arbitration case filed by its foreign buyer and requested for the comments of the defendant. The defendant was also kept informed about the progress of the arbitration process filed by the foreign buyer against the plaintiff before GAFTA, London from time to time and also the copies of papers were sent to the defendant. The plaintiff by letter dated 29.5.1996 had informed the defendant about the appointment of solicitors at London and the copies of the draft submissions prepared by the Solicitors were also communicated to the defendant and the defendant was informed about the posting of the case for hearing. The plaintiff had also informed the defendant that it was advised by letter dated 21.10.1996 of the solicitors that the chance of success in the Arbitration proceeding was very slender and that therefore, it was advisable to settle the matter with the foreign buyer. By letter dated 31.12.1996 the plaintiff had informed the defendant that to mitigate the damages likely to be awarded by the Arbitrators, which may come up to about USD 2 lakhs and which would naturally be passed on to the defendant, the plaintiff had decided for an out of Court settlement and pass on the resultant burden to the defendant. By letter dated 31.12.1996 the plaintiff had informed the defendant that to mitigate the damages likely to be awarded by the Arbitrators, which may come up to about USD 2 lakhs and which would naturally be passed on to the defendant, the plaintiff had decided for an out of Court settlement and pass on the resultant burden to the defendant. After receiving its letter dated 31.12.1996, the defendant with a view to defeat the claim and as a counter blast got issued a notice dated 10.1.1997 through their lawyers at Mumbai to the plaintiff with all false allegations and denying their liability. The dispute was settled out of Court by the plaintiff agreeing to pay damages in a sum of USD 1 lakh in full and final settlement for no fault of the plaintiff. The plaintiff had to pay the said damages completely due to the default and breach of the contract committed by the defendant. The plaintiff remitted a sum of USD 1 lakh to its foreign buyer. The plaintiff also incurred expenditure for appearing before the Arbitrators and engaging solicitors. The said and such other connected expenses amounted to British Pound Sterling 11993.96. The defendant is, therefore, liable to reimburse to the plaintiff, a sum of USD 1 lakh paid by the plaintiff to the foreign buyer on account of breach of contract committed by the defendant and also the sum of 11993.96 British Pound Sterling which is the expenditure incurred by the plaintiff in the Arbitration proceedings before GAFTA, London. In view of the facts stated and the contents of various documents including the correspondence between the plaintiff and the defendant, there is a concluded contract under law between the plaintiff and the defendant. The defendant had committed breach of the terms and conditions of the concluded contract and had failed to supply the material as agreed upon, resulting in sufferance of damages by the plaintiff in the arbitration proceedings launched by its foreign buyer on the ground of the alleged breach of contract by the plaintiff with the foreign buyer. In view of the breach committed by the defendant, the plaintiff was consequently held for breach of contract by the foreign buyer and was made liable to pay damages. In view of the breach committed by the defendant, the plaintiff was consequently held for breach of contract by the foreign buyer and was made liable to pay damages. Consequently the defendant is liable to pay the damages to the plaintiff in a sum of USD 1 lakh awarded as damages against it by the Arbitrators and also the expenses incurred by the plaintiff in a sum of British Pound Sterling 11993.96 for defending the claim before the Arbitrators. Hence the suit." 3. In the written statement, the defendant having denied the material allegations in the plaint had submitted that the plaintiff is not entitled to the suit claim. The crux of the defence of the defendant may be stated, in brief, as follows: "There is no valid and concluded contract between the plaintiff and the defendant. Therefore, it cannot be said that there is a breach of contract by the defendant. In the telex message dated 20.2.1995, the plaintiff had requested the defendant to supply 'INDIAN TAPIOCA dried chips' to the foreign buyer. In the said telex message, the plaintiff had assumed the role of an agent saying that a service charge of one per cent on invoice value has to be paid to the plaintiff. The telex message dated 23.2.1995 reveals that there was a contract between the plaintiff and the foreign buyer and this defendant's name was not mentioned anywhere in the said message. In the contract dated 23.2.1995, the sale and purchase took place between the plaintiff and the foreign buyer and the defendant was merely mentioned as a shipper. Therefore, for the plaintiffs faults and wrongs, the plaintiff cannot claim damages from the defendant. The plaintiff in the letter dated 9.3.1995 demanded a corporate guarantee from this defendant to perform the contract and to deliver the goods to the plaintiff. This defendant informed the plaintiff that it is impossible for them to provide corporate guarantee in view of the policy decision of the defendant. The defendant did not furnish corporate guarantee. Hence, the contract between the plaintiff and the defendant is inconclusive. The contract was not signed by the defendant. Hence, the contract is not binding on the defendant. Since there was no valid contract, the plaintiff did not demand corporate guarantee and was silent on this aspect. Since there is no contract, there is no liability. Hence, the contract between the plaintiff and the defendant is inconclusive. The contract was not signed by the defendant. Hence, the contract is not binding on the defendant. Since there was no valid contract, the plaintiff did not demand corporate guarantee and was silent on this aspect. Since there is no contract, there is no liability. Hence, the question of paying damages to the plaintiff does not arise. In any view of the matter, the contract is one sided and is not binding on the defendant. Without prejudice to the submissions supra, and assuming for a moment, but without conceding the rights of the plaintiff, that there was a contract between the plaintiff and the defendant, still, the plaintiff cannot claim damages or any amount from the defendant for the reason that due to adverse circumstances, which are beyond the control of the defendant and for non-availability of the goods in the market, the plaintiff could not supply 'Indian Tapioca' (the goods). The non-availability of the product in the market is also known to the plaintiff. Hence, the contract has automatically got frustrated. Evidently, in the telex message dated 29.3.1998, the plaintiff had informed the foreign buyer that three of their brokers had committed default stating non-availability of the product in the market as the reason and that therefore, they are not in a position to supply the product/goods. Therefore, it is evident that the plaintiff had also tried to supply the same goods simultaneously through two other suppliers and could not procure the same from any one of them. Therefore, even though there is no valid contract between the plaintiff and the defendant, the defendant had still, taken all possible measures and care to supply the goods to the plaintiff as a matter of goodwill gesture, but the goods could not be supplied due to non-availability of the same in the market. Hence, there is no breach of contract. The suit is contrary to the terms and conditions of the contract particularly Clause 11 of the unsigned contract dated 23.2.1995. The contract contains conflicting clauses such as subjecting to arbitration of the GAFTA as well as arbitration in New Delhi as per the Indian Council of Arbitration. The plaintiff failed to act as per the terms and conditions specified in the arbitration clause. The plaintiff cannot claim the relief in the present suit from the civil Court. The contract contains conflicting clauses such as subjecting to arbitration of the GAFTA as well as arbitration in New Delhi as per the Indian Council of Arbitration. The plaintiff failed to act as per the terms and conditions specified in the arbitration clause. The plaintiff cannot claim the relief in the present suit from the civil Court. Though the contract contains an arbitration clause under Clause 11(6), the plaintiff has not referred the parties to arbitration and hence the present suit is premature and is liable to be dismissed in limine. In the defendant's reply fax messages dated 23.2.1995, it is stated that the letter of credit should be opened by 1st class international bank on the defendant and that the export contract should be directly between the defendant and the foreign buyer and the role of the plaintiff should be that of a broker. The defendant had also stated that other terms will prevail as per the GAFTA Contract Nos. 100 and 119/125 including arbitration rules. In spite of understanding between the parties in respect of the role of the plaintiff, as an agent between the foreign buyer and the defendant, the plaintiff had entered into a direct contract with the foreign buyer. This defendant is not aware of the existence of a contract between the plaintiff and the foreign buyer. The fax message dated 24.2.1995 would show that the foreign buyer had placed an order on the plaintiff, but not on the defendant. It is false to say that the plaintiff through letter dated 24.2.1995 informed the defendant confirming the placement of the order by the foreign buyer and so the back-to-back contract would be sent for signature along with the corporate guarantee by the defendant as per the discussions held between plaintiff and defendant. The said allegation is denied. For the first time in the letter dated 9.3.1995, the plaintiff had mentioned that a corporate guarantee may also be executed by the Group of the defendant company in favour of the plaintiff for supply and export of Tapioca Chips to the foreign buyer. The defendant sent a fax message based on the impression that the defendant would receive a direct export contract from the foreign buyer and that the plaintiff was only facilitating opening of letter of credit as an agent. The defendant sent a fax message based on the impression that the defendant would receive a direct export contract from the foreign buyer and that the plaintiff was only facilitating opening of letter of credit as an agent. The telex message dated 2.3.1995 sent by the plaintiff to the defendant clearly establishes that although the basic terms of contract were negotiated, other commercial terms had not been finalised between the plaintiff and the defendant and this defendant believed that the contract will be a direct contract from the foreign buyer and the plaintiff was only a commission agent. When the commercial terms had not been finalised as on 2.3.1995, the contract is only an inconclusive one. The fax message dated 2.3.1995 mentions about the plaintiffs office in Frankfurt and their dealing with the foreign buyer. Even without conclusion of the contract with the defendant, the plaintiff had processed further with the foreign buyer and asked the foreign buyer to open letter of credit on the plaintiff directly. This means the plaintiff had taken the risk and responsibility to supply goods to the foreign buyer without finalizing the contract or concluding the same, with the defendant. No discussion had taken place between the plaintiff and the defendant prior to letter dated 9.3.1995 on the aspect of furnishing corporate guarantee. The said letter dated 9.3.1995 was received by the defendant on 12.3.1995. The letter of credit opened by the foreign buyer on plaintiff does not show or mention that the defendant company is the only shipper to execute the contract. It only allows third party shipments, which means the shipper could be either the defendant or any other party who is willing to supply the goods to the plaintiff and not necessarily the defendant. The plaintiff had sent back-to-back contract dated 23.2.1995 with a covering letter dated 14.3.1995 requesting the defendant to provide a corporate guarantee and also the name and address of the defendant's bankers through whom the letter of credit is to be assigned in favour of the defendant. The plaintiff has conveniently forwarded the so-called back-to-back contract even without concluding the contract with this defendant. When the matter of issue of such a guarantee cannot even be considered, the question of signing or executing the back-to-back contract does not arise. The plaintiff has conveniently forwarded the so-called back-to-back contract even without concluding the contract with this defendant. When the matter of issue of such a guarantee cannot even be considered, the question of signing or executing the back-to-back contract does not arise. Knowing the facts, the plaintiff had stated in the contract that 'failure to sign and return a copy of this contract does not affect validity of this contract'. The clause was incorporated in the contract by the plaintiff with a mala fide intention. The said clause is a pre-planned, motivated clause in the alleged contract dated 23.2.1995. After signing the fax message, the Branch Manager of plaintiff had requested back-up letter to justify his message to foreign buyer and to protect the Branch Manager internally in their organization. Therefore, at request of the Branch Manager of the plaintiff, the defendant company had sent a fax message dated 30.3.1995 merely as a matter of help, without accepting the liability under the alleged contract. The fax message dated 30.3.1995 was sent to the plaintiff only to suit the requirements of the plaintiff to support their fax message dated 29.3.1995 issued by them to foreign buyer. Even though the contract is not concluded and is inconclusive on certain clauses, still this defendant issued the fax message dated 30.3.1995 to the plaintiff only with a view to help the Branch Manager of the plaintiff being taken to task by his superior officers. The letter dated 30.3.1995 was not voluntarily issued by the defendant. The fax message dated 31.3.1995 was a continuation of the previous letters and fax messages, but not a voluntary one. Likewise, the fax messages dated 3.4.1995 and 4.4.1995 were in fact tutored by the plaintiff. All the said fax messages dated 30.3.1995, 31.3.1995, 3.4.1995 and 4.4.1995 were issued at the instance of the plaintiff, but not voluntarily by this defendant. The said fax messages are not binding on the plaintiff. The defendant is not concerned with the correspondence between the plaintiff and the foreign buyer. The defendant had not issued any reply to the fax message dated 15.5.1995 and 25.5.1995 and letter dated 12.5.1995 as they were irrelevant and do not bind this defendant. The plaintiff had directly written a letter to the Director of the defendant company and sought his intervention in the inconclusive or inchoate contract. The defendant had not issued any reply to the fax message dated 15.5.1995 and 25.5.1995 and letter dated 12.5.1995 as they were irrelevant and do not bind this defendant. The plaintiff had directly written a letter to the Director of the defendant company and sought his intervention in the inconclusive or inchoate contract. In other words, when the defendant's Secunderabad Office was silent after knowing the attitude of the plaintiff and when the file was closed, then the plaintiff started correspondence with the Director of the defendant company. The Director of the defendant company directed defendant's Secunderabad Office to deal with the matter as per the records. The letter dated 19.6.1995 sent by the defendant to the plaintiff explains the clear and factual position in respect of the alleged contract between the plaintiff and the defendant. The plaintiff did not transfer the letter of credit in favour of the defendant and did not bother to open the letter of credit in favour of the defendant. As per the terms and conditions, the letter of credit shall be opened in favour of defendant but evidently it was in the name of the plaintiff, but not in the name of the defendant and this defendant had not been shown as a shipper. Without opening the letter of credit in favour of the defendant, the plaintiff cannot claim damages and penalties for the faults committed by it. Since the plaintiff negotiated the deal simultaneously with some other parties also, the plaintiff did not transfer the letter of credit in favour of the defendant. The defendant was negotiating with three banks at Mumbai and SBI, Hyderabad for certain facilities and that the defendant stated that it would come back with its choice is absolutely untrue. The banking arrangement is an internal arrangement and the plaintiff has nothing to do with the same. The letter dated 18.7.1995 issued by the defendant explains true and correct facts. Since the defendant did not have any role in the arbitration proceedings between the foreign buyer and the plaintiff and as it is only for the plaintiff to reply and answer, the defendant did not issue any replies to the correspondence which is between the plaintiff and foreign buyer. There was no tripartite agreement between the plaintiff, the defendant and the foreign buyer. There was no tripartite agreement between the plaintiff, the defendant and the foreign buyer. There was no concluded contract between the plaintiff and the defendant and when the concluded contract was not in existence between the defendant and the plaintiff, the question of payment or mitigating the damages does not arise. In response to the letter dated 31.12.1996, the defendant through its Counsel got issued a suitable reply. It is absolutely untrue and incorrect to state that due to the default and breach of contract committed by the defendant, the plaintiff remitted a sum of USD 1,00,000 to its foreign buyer. The said allegation is made to cause wrongful loss to the defendant. The defendant is no way concerned with the expenditure incurred by the plaintiff in respect of arbitration proceedings and engaging solicitors. The plaintiff cannot claim the said expenditure from the defendant. When there was no concluded contract, the question of payment of damages, penalties, expenses etcetera does not arise. The defendant is no way concerned with the damages paid by the plaintiff to the foreign buyer and the plaintiff cannot claim the same against this defendant for the various reasons stated in the written statement. The plaintiff is not entitled to any interest much less interest @ 18% per annum from 9.5.1997. The defendant is not liable to pay the principal amount to the plaintiff and so the payment of interest does not arise." 4. Taking into consideration the above pleadings, the trial Court had framed the following issues for trial: 1. Whether there is a concluded contract between the parties? 2. Whether the defendant committed breach of the terms of the contract? 3. Whether the contract is frustrated due to non-availability of product in the market? 4. Whether this Court has no jurisdiction in view of the arbitration clause in the contract? 5. Whether the plaintiff is entitled for the suit amount? 6. To what relief? During the course of trial, PWs. 1 and 2 were examined and Exhibits A1 to A39 were marked on the side of the plaintiff. DW 1 was examined and Exhibits B1 to B6 were marked on the side of the defendant. On all the issues, the trial Court had held in favour of the plaintiff and against the defendant and had decreed the suit of the plaintiff for a sum of Rs. DW 1 was examined and Exhibits B1 to B6 were marked on the side of the defendant. On all the issues, the trial Court had held in favour of the plaintiff and against the defendant and had decreed the suit of the plaintiff for a sum of Rs. 43,51,948/- with costs and had also awarded pendente lite interest at the rate of 12% per annum simple and future interest from the date of the decree till realization @ 6% per annum on the principal amount. Therefore, the aggrieved defendant is before this Court. 5. We have heard the submissions of the learned Counsel for the appellant/defendant and the learned Senior Counsel for the plaintiff. 6. At the time of hearing, the learned Counsel for the defendant had raised two sets of contentions. Firstly; it is contended that the back-to-back contract dated 14.3.1995 is not signed by the defendant and that there is no concluded contract between the plaintiff and the defendant and that the fax messages dated 30.3.1995, 31.3.1995, 3.4.1995, 4.4.1995 and 13.4.1995 were issued at the instance of the plaintiff, but not voluntarily by the defendant and that on failure of the defendant to sign and return the copy of the contract dated 29.3.1995, there is no concluded contract and hence, the plaintiff is not entitled to recovery any money from the defendant. Alternately, it is contended that even assuming for a moment and without conceding that there is a concluded contract between the plaintiff and the defendant, still the defendant is not liable due to frustration of contract on account of adverse circumstances, which are beyond the control of the defendant and non-availability of the goods in the market for being supplied as per the contract. Secondly, it is contended that the civil Court has no jurisdiction to entertain the suit and grant the relief to the plaintiff against the defendant as the plaintiff did not act as per the terms and conditions specified in the arbitration agreement, which is contained in the contract dated 23.2.1995; and that according to Clause 11(6) of the agreement, any disputes between the plaintiff and the defendant shall be settled by an Arbitrator in accordance with the Rules of Arbitration of Indian Council of Arbitration and that the plaintiff had failed to refer the parties to arbitration and that therefore, the present suit is premature and the civil Court is not having jurisdiction and the plaintiff ought to have resorted to arbitration proceedings for redress and not a civil suit. 7. On the other hand, the learned Senior Counsel for the plaintiff had submitted that there is a concluded contract and that from the documents filed, particularly, the correspondence between the plaintiff and the defendant, it is unequivocally and clearly established that there was a concluded contract between the parties and that the contract has come into existence between the parties through correspondence. He had further submitted that the contention of the defendant that the contract had frustrated is not correct and that the defendant had committed breach of the contract having failed to perform its part of the contract and that the contention of the defendant that the civil Court has no jurisdiction and the matter is arbitrable is devoid of merit. He supported the judgment of the trial Court stating that the trial Court having considered the facts and the evidence on record in a right perspective had recorded well-reasoned finding on all issues and that therefore, there is no merit in the first appeal and the same is liable to be dismissed. 8. Now, the points for determination in this appeal suit are: 1. Whether the civil Court had no jurisdiction in view of the existence of arbitration agreement in the contract between the parties? 2. Whether there is a concluded contract between the plaintiff and the defendant? 3. Whether the contract is frustrated due to non-availability of the goods in the market, as contended by the defendant? 4. Whether the plaintiff is entitled to the suit amount or any part thereof? And if so, to what amount? 5. To what relief? Point No. 1: 9. Whether there is a concluded contract between the plaintiff and the defendant? 3. Whether the contract is frustrated due to non-availability of the goods in the market, as contended by the defendant? 4. Whether the plaintiff is entitled to the suit amount or any part thereof? And if so, to what amount? 5. To what relief? Point No. 1: 9. In the suit of the plaintiff for recovery of money based on breach of contract by the defendant, the 1st line of defence of the defendant is that even assuming for a moment for argument sake and that without conceding that there is a concluded contract between the parties, still, the civil suit before a civil Court is not maintainable as the civil Court is not having jurisdiction to entertain the civil suit in view of the arbitration agreement contained in Clause 11(A) and (B) of the Contract dated 23.2.1995. In the said contract, the clause concerning arbitration agreement reads as under: "11. Arbitration. (A) Should there be any dispute between the Corporation and the Foreign Buyer in regard to relating to or arising out of the Export Contract, the Corporation shall keep the suppliers informed and shall try to resolve the dispute in consultation with the Suppliers. If, however, such dispute cannot be resolved and is referred to Arbitration/Court then the expenses on account of and for pursuing the same shall be to the account of Suppliers. Any award/decree/order passed or settlement of any dispute reached with the Foreign Buyer shall be final and binding on the Suppliers who at their own cost, discharge any and all obligations of the Corporation under any such Award/Decree/Order or settlement. (B) In case of any dispute or, difference relating to the contract or in the execution of the Export Contract between the Corporation and the Suppliers the same shall be settled either by negotiation or by arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration and the award made in pursuance thereof shall be binding on all the parties. The place of arbitration shall be New Delhi." In Clause (B), it is stated in no uncertain terms that in case of a dispute or difference relating to the contract or in execution of the export contract between the plaintiff and the defendant the same shall be settled either by negotiation or by arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration. However, without seeking reference to arbitration, the plaintiff had approached the civil Court by filing the instant suit. However, the defendant having received the summonses in the suit did not raise a preliminary objection at the first opportunity available to the defendant and on the other hand; the defendant had filed its defence and submitted to the jurisdiction of the civil Court. On the defendant filing the written statement, issues were framed and after full-fledged trial, the suit was decreed in favour of the plaintiff and against the defendant. In view of the factual matrix, it is necessary to refer to Section 8 of the Indian Arbitration Act, 1996, which reads as under: "8. Power to refer parties to arbitration where there is an arbitration agreement:--(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made." As per the above provision of law, the defendant is obliged to apply to the trial Court to refer the parties to arbitration before the defendant submitting the first statement on the substance of dispute. As already noted, the defendant did not apply to the trial Court to refer the parties to arbitration. As already noted, the defendant did not apply to the trial Court to refer the parties to arbitration. The defendant having filed its written statement and having not filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 to refer the parties to arbitration and having submitted to the jurisdiction of the civil Court, is estopped by its own conduct from contending that the civil Court is not having jurisdiction. Therefore, the contention of the defendant before this Court that the civil Court is lacking jurisdiction is devoid of merit. The present case is not a case where the civil Court lacked inherent jurisdiction to entertain a suit for damages/recovery of money. Therefore, the point is answered in favour of the plaintiff and against the defendant. Point No. 2: 10. In the case on hand, as per the case of the plaintiff and the admitted facts, there is no formal written contract signed by both the plaintiff and the defendant. Therefore, the learned Counsel for the defendant forcefully contended that there is no concluded contract between the parties. However, the learned Counsel for the plaintiff had also forcefully contended that, even if a formal contract which was reduced into writing is not signed by one of the parties, still, a contract can be spelt out from the correspondence between the parties and that in the present case the correspondence exchanged admits no doubt in regard to the fact that there is a concluded contract between the parties. In view of the contentions and rival contentions, it is now necessary to refer to the settled legal position laid down in M/s. Rickmers Verwaltung Gimb H v. Indian Oil Corporation Limited, AIR 1999 SC 504 , which is as follows: "In this connection the cardinal principle to remember is that it is the duty of the Court to construe correspondence with a view to arrive at a conclusion whether there was any meeting of mind between the parties, which could create a binding contract between them but the Court is not empowered to create a contract for the parties by going outside the clear language used in the correspondence, except insofar as there are some appropriate implications of law to be drawn. Unless from the correspondence it can unequivocally and clearly emerge that the parties were ad idem to the terms, it cannot be said that an agreement had come into existence between them through correspondence. The Court is required to review what the parties wrote and how they acted and from that material to infer whether the intention as expressed in the correspondence was to bring into existence a mutually binding contract. The intention of the parties is to be gathered only from the expressions used in the correspondence and the meaning it conveys and in case it shows that there had been meeting of mind between the parties and they had actually reached an agreement, upon all material terms, then and then alone can it be said that a binding contract was capable of being spelt out from the correspondence." 11. In view of the settled legal position, the question however is - 'Can a contract be spelt out from the correspondence between the plaintiff and the defendant in the instant case?' It is true that the initial onus of proof or the evidentiary burden and the burden of proof, which is the legal burden and which never shifts are on the plaintiff. To answer this question which is the central issue, it is necessary for us to analyse the chronology of events as borne out by the oral and the documentary evidence, as that would be of help to answer the pivotal point. (i) The plaintiff, which is a Government company had received an inquiry from the foreign buyer as to whether the plaintiff can supply tapioca dried chips/the goods. (ii) Thereupon, by a fax message, under the Exhibit Al, the plaintiff had contacted the defendant on 20.2.1995 and had made enquiries with the defendant as to whether the defendant could supply the goods. (iii) By a reply fax message dated 23.2.1995, the defendant had agreed to supply 'Indian Tapioca Dried Chips of semi peeled' in a quantity of 7000 Metric Tonnes packed in bulk at the contracted price to the foreign buyer on C & F (Clearing & Forwarding) Free out 1 safe Berth Revenna Italy Basis. In the said message, the defendant had also stated that the terms, other than those stated in the fax message, will be as per GAFTA Contract Nos. 100 and 119/125 including arbitration clause. In the said message, the defendant had also stated that the terms, other than those stated in the fax message, will be as per GAFTA Contract Nos. 100 and 119/125 including arbitration clause. The said message of the defendant is Exhibit A2. (iv) In view of the said message under Exhibit A2 addressed to the plaintiff by the defendant, the plaintiff, in turn, had sent a fax message on 23.2.1995 to the foreign buyer confirming the supply and it was also mentioned that the defendant is the supplier. The said message by the plaintiff to the foreign buyer is Exhibit A3. (v) In fact, the plaintiff had entered into a contract with the foreign buyer on 23.2.1995. The copy of the said contract is Exhibit A4. As per the terms of the said contract, the plaintiff is the seller, the foreign company is the buyer and the defendant is the shipper. (vi) On 24.2.1995, the plaintiff had informed the defendant about the confirmation that the foreign buyer had placed an order. In the message of the said letter dated 24.2.1995 the details of the order placed by the foreign buyer were given by the plaintiff to the defendant. In that letter, the description of the goods, the specification, the quantity, the mode of packing, price, period of shipment, payment method, quality and weight of the goods, demurrage/dispatch and other terms were clearly stated. In the said letter, it is also stated that a formal back to back contract would follow. At the end of the letter, it is stated that the content of the letter confirms the discussions on telephone between the parties. (vii) By a fax message dated 1.3.1995 (Exhibit A34), the defendant had requested for certain terms regarding presentation of documents. On that the plaintiff had sent a reply fax message on 2.3.1995 under Exhibit A6 informing the defendant that the defendant can delete the words 'ascertained by scale' and insert the words 'Ascertained by Scale/Weigh Bridge'. The plaintiff had further informed the defendant that in respect of the stipulation in the reimbursement clause that reimbursement should be made by the issuing bank within three working days, the plaintiff had stated that the letter of credit will be governed by the provisions of UCP 500 which embodies the time limit within which payment has to be made by the opening bank. The defendant was further informed in the same message that as per the UCP 500, the reimbursing bank will dispose of the documents within seven banking days following the date of the receipt of the documents and that in any case, the plaintiff is having an office at Frankfurt and further promised the defendant that the matter would be followed by its office at Frankfurt once the documents are sent by the negotiating bank to the opening bank, so that the reimbursement is effected immediately on presentation of the documents. The plaintiff had requested the defendant not to insist upon insertion of a definite time limit for the reimbursement clause and had requested the defendant to confirm its consent for the same, so that the foreign buyer can be informed accordingly. (viii) By a letter dated 9.3.1995, the plaintiff had informed the defendant that the foreign buyer had opened the letter of credit on 6.3.1995 for USD 10,85,000 on STC. While enclosing a copy of the same, the plaintiff had informed the defendant that the original credit will be assigned to the defendant in due course. The defendant was informed by the said letter that in the mean while, back-to-back contract would be sent for its signature and return along with corporate guarantee by the defendant as per discussions between the plaintiff and the defendant. The said letter with the said annexure is Exhibit A7. (ix) Further, with a covering letter dated 14.3.1995 addressed by the plaintiff to the defendant, the back-to-back contract in triplicate was sent to the defendant for signatures and return of two copies along with a corporate guarantee; and in the covering letter the defendant was requested for furnishing the name and address of his banker through whom the letter of credit has to be assigned in favour of the defendant. The said letter dated 14.3.1995 with enclosed copy of contract dated 23.2.1995 duly signed by the representative of the plaintiff is Exhibit A8. In the concluding line of the said contract it is stated as follows: 'Failure to sign and return the contract does not affect validity of this contract'. (x) By letter dated 15.3.1995, the plaintiff had informed the defendant that its foreign buyer has requested to name the vessel (Flag/Built) class and ETA Load Port for the purpose of covering marine insurance. The said letter is Exhibit A9. (x) By letter dated 15.3.1995, the plaintiff had informed the defendant that its foreign buyer has requested to name the vessel (Flag/Built) class and ETA Load Port for the purpose of covering marine insurance. The said letter is Exhibit A9. (xi) Along with a letter dated 29.3.1995 under Exhibit A10 the plaintiff had communicated, the copy of the message, which the plaintiff had sent to the foreign buyer. In the said letter, the plaintiff had referred to the discussions had in the afternoon between the plaintiff and the defendant at the office of the plaintiff in regard to the contract dated 23.2.1995 for 7000 MTs of Tapioca Chips. The plaintiff having received an enquiry from the foreign buyer as to whether the plaintiff can supply tapioca dried chips had informed the foreign buyer by message dated 29.3.1995 under Exhibit All that the plaintiff had encountered a serious problem in implementing the contract on account of the default on the part of the three brokers of the plaintiff with whom the bulk of the supply order was placed. In that message, the plaintiff had requested the cooperation of the foreign buyer. (xii) Exhibit A12 fax message dated 30.3.1995 from the defendant to the plaintiff, which is of significance reads as under: "N.W. EXPORTS LIMITED VIA FACSIMILE ONLY FAX No.: 040 236786 DATE: 30.03.1995 COMPANY: STC/HYDERABAD K/ATTN: Mr. AMIT RAHA PAGES: ONE * * * Dear Mr. Raha, Contract No. STC/HYD/TAPIOCA/1/94-95 DATED 23.2.1995 * * * This has reference to our discussions in your office on 28th and 29th of March on above contract. It is with deep regret that we inform you that tapioca availability in the market is much lesser than the initial projections and as a consequence arrivals in the market have come down substantially. Hence although we are prepared to pay higher price, it is not possible to meet quantity requirements. Further as a consequence of higher production estimates, a number of shippers/exporters have sold forward and market is in a over-sold position. Our expectation is that about 30-40% of forward commitments shall not be fulfilled. We had signed agreements with two suppliers locally and they have defaulted in their supplies due to above reasons. Hence we are prevented from executing the contract due to non-availability of sufficient cargo. Our expectation is that about 30-40% of forward commitments shall not be fulfilled. We had signed agreements with two suppliers locally and they have defaulted in their supplies due to above reasons. Hence we are prevented from executing the contract due to non-availability of sufficient cargo. In view of above it is advisable that we inform buyers up-front that this cargo is not coming and seek their cooperation in cancelling the same at par. However we can suggest following alternatives: (a) We may give some quantities to buyers on any other vessel that they may nominate on FAS basis. If this proposal interests them we can discuss on quantities, prices and shipment period. (b) We can offer other products from India which are of mutual interest to continue our long term business relationship. Kindly take-up the matter suitably with the buyers and advise us. Best regards Sd/- M.B. Rao General Manager (GT)" (xiii) The plaintiff had received Exhibit A12 message dated 30.3.1995 of the defendant on 31.3.1995. On receipt of the message under Exhibit A12 on 31.3.1995, on the same day, the plaintiff had informed the foreign buyer about the message of the defendant. In reply, on the same day, the foreign buyer had enquired with the plaintiff as to whether the plaintiff is going to fulfill its obligation under the contract with the foreign buyer not withstanding the difficulties which the plaintiff is having with the defendant. The plaintiff had then passed on that message to the defendant. (xiv) The defendant had then sent a reply dated 3.4.1995 under Exhibit A35. (xv) To this letter under Exhibit A35 dated 3.4.1995, the plaintiff had sent a reply dated 5.4.1995 under Exhibit A14. (xvi) By letter dated 6.4.1995 under Exhibit A16, the plaintiff had communicated to the defendant the reply received from the foreign buyer, i.e., Exhibit A15. (xvii) On 13.4.1995, the defendant sent a reply to the plaintiff informing as follows: "This is to inform you that we have been making all out efforts to secure goods for meeting the above shipment. However, there is no change in the availability of goods as informed to you on 28.3.1995. Under the circumstances our proposal still remains as following: (a) To cancel the contract at par. (b) To defer the contract till the next season. However, there is no change in the availability of goods as informed to you on 28.3.1995. Under the circumstances our proposal still remains as following: (a) To cancel the contract at par. (b) To defer the contract till the next season. We request you to take up the matter suitably with the buyers for their concurrence." (xviii) Under Exhibit A36 fax message dated 13.4.1995, the plaintiff had communicated the foreign buyer's reply to the defendant wherein, the foreign buyer insisted upon to execute the contract and fulfill the contractual obligations. (xix) Under Exhibit A18, the letter dated 2.5.1995, the plaintiff had informed the defendant about the message of the foreign buyer, wherein the foreign buyer has stated as follows: 'Please tender vessel in execution above contract and/or advice your intentions." On 15.5.1995, the plaintiff had informed the defendant that the plaintiffs are tying to contact the defendant regarding the tapioca dried chips as they are constantly receiving remainders from the foreign buyer regarding the shipments. In this letter, the plaintiff had requested the defendant to positively call back the plaintiff. (xx) By letter dated 25.5.1995 under Exhibit A21, the plaintiff informed once again the defendant that the buyer is pressing for reply to their message and that a message was left with the operator of the representative of the defendant. (xxi) In Exhibit A22, letter dated 26.5.1995 from the plaintiff to the defendant, the foreign buyer's message that 'if the seller failed to tender a vessel within the time provided, the foreign buyer will consider the seller to be in default', was communicated to the defendant. (xxii) On 7.6.1995, another message was sent by the plaintiff to the defendant quoting the foreign buyer's message, wherein the foreign buyer had stated as follows: "Unless we receive an affirmative answer from sellers that they accept our claim for damages for USD 168,000,00 in consideration of their default within 15th June 1995, as from now we claim arbitration and appoint Mr. A.G. Scott as our Arbitrator." (xxiii) In the circumstances by addressing letter dated 19.6.1995 under Exhibit A25 to the Director of the defendant, the plaintiff sought his intervention. A.G. Scott as our Arbitrator." (xxiii) In the circumstances by addressing letter dated 19.6.1995 under Exhibit A25 to the Director of the defendant, the plaintiff sought his intervention. (xxiv) Finally, under Exhibit A26 letter dated 19.6.1995 addressed to the plaintiff by the defendant, the defendant had stated that the defendant never agreed for certain terms of the contract as they are not part of negotiations and that prima facie the defendant had not agreed for the buyer's terms mentioned in the letter dated 1.3.1995 and the same is conveyed through fax message dated 1.3.1995 and that in spite of the non-agreement to certain terms of the draft letter of credit the plaintiffs buyer had opened the letter of credit on 6.3.1995 in favour of the plaintiff without the concurrence of the defendant and that the contract dated 23.2.1995 sent for signatures was not on the lines with the discussions and hence, the defendant had not signed the contract with the plaintiff and that the defendant could not procure the cargo without a valid contract/letter of credit and that non-availability of cargo had prevented the defendant from sourcing and that the said situation had arisen because the plaintiff and its buyer had not agreed on the contractual/letter of credit terms and that the defendant is in no way responsible. (xxv) To the said letter the plaintiff sent a reply under the original of Exhibit A39 dated 20.6.1995 reiterating its stand. (xxvi) The defendant sent a further reply dated 27.6.1995 under Exhibit A27. 12. Thus, we have carefully perused the contents of the correspondence in the form of messages and letters exhibited in the suit. There is no dispute about the exchange of the correspondence. In fact, DW 1, the witness for the defendant had admitted the exchange of correspondence, vide Exhibits A1 to A39. Without any dilation, it is trite to observe that till the matters boiled down and precipitated to the stage of the foreign buyer claiming damages from the plaintiff for breach of contract and the plaintiff, in turn, making a claim of equivalent sum of damages besides expenses from the defendant, the defendant had not stated that there is no concluded contract between the plaintiff and the defendant. The contents of Exhibit A12 letter on a careful analysis would disclose the following facts: 'Referring to the contract dated 23.2.1995 and the discussions which the plaintiff and the defendant had in the office of the plaintiff on 28th and 29th of March, the defendant had sent the said fax message dated 30.3.1995 to the plaintiff expressing its regret and informing that the goods availability in the market is lesser than the initial projections and that as a consequence, arrivals in the market have come down substantially and hence, it is not possible for the defendant to meet the quantity requirement though the defendant is prepared to pay higher price to its local suppliers. In this Exhibit A12 message, the defendant had further stated to the plaintiff that the defendant's expectation is that about 30-40% of forward commitments shall not be fulfilled. In this letter under Exhibit A12, the defendant had also stated that it had signed agreements with two suppliers locally and that they had defaulted in their supplies due to non-availability of sufficient goods in the market and hence, the defendant is prevented from executing the contract due to non-availability of sufficient cargo and that in view of the said fact it is advisable that the plaintiff and defendant should inform the buyers upfront that the cargo is not coming and seek cooperation in cancelling the same at par. Further in Exhibit A12 fax message, the defendant while expressing regrets for the defendant's inability for executing the contract, had suggested alternatives and had requested the plaintiff to take up the matter suitably with the buyers and advised the defendant. 13. The contents of the copy of Exhibit A34 would further lay bare the following facts: 'The business was finalised on 23.2.1995 and that LC was opened on 7.3.1995 and till LC was received purchase could not be commenced and that the Tapioca is a product where the defendant does not take long position as the business is done on back-to-back basis. That although contracts were concluded with local suppliers on back-to-back basis, they had defaulted due to reasons mentioned earlier and that the defendant has to reject some of lots due to poor quality and average rejections amounted to 40% of arrivals.' Ultimately, it is said in Exhibit A34 fax message that the quantities are indeed not available in the market and that for that reason the defendant suggested for cancellation of contract at par. It is also stated in the concluding line of this document as follows: 'However, our proposal either to cancel the contract at par or to defer it till next season still stands'. 14. It is not the case of the defendant either in Exhibit A12 or Exhibit A34 that there is no concluded contract. A reading of Exhibit A12 would show that after entering into the contract with the plaintiff, the defendant had made arrangements to procure the goods for supply upfront to the foreign buyer by entering into agreements with local suppliers. Had there been no consensus ad idem nor a concluded contract, the defendant would not have taken steps for procurement of the goods to be supplied under the contract. When the plaintiff is sending messages or communications one after the other, the defendant was making arrangements at its end for fulfillment of its obligations under the contract with the plaintiff; by sending any reply communications/messages to the plaintiffs messages and communications, the defendant had never informed the plaintiff that there is no concluded contract. It is borne out by record that the defendant even negotiated with three banks at Mumbai and SBI, Hyderabad for certain facilities and that the defendant stated that it would come back to the plaintiff with its choice. To explain away its conduct in this regard, the defendant simply stated that the banking arrangement is an internal arrangement and the plaintiff has nothing to do with the same. But for the fact that there is a concluded contract, the defendant ought not to have made arrangements with its bankers. Further, as already noted in Exhibit A12, the defendant had only stated that since the local suppliers with which the defendant had entered into agreements for supply of goods had defaulted, the defendant is prevented from executing the contract. Thus, the defendant had categorically stated that it is prevented from executing the contract due to non-availability of sufficient cargo. Further, as already noted in Exhibit A12, the defendant had only stated that since the local suppliers with which the defendant had entered into agreements for supply of goods had defaulted, the defendant is prevented from executing the contract. Thus, the defendant had categorically stated that it is prevented from executing the contract due to non-availability of sufficient cargo. In the said Exhibit A12, fax message, the plaintiff sought cancellation of the contract at par while suggesting alternatives. What is to be noted is that in Exhibit A34 fax message the defendant having specifically referred to the contract dated 23.2.1995 had also stated that the business was finalised on 23.2.1995. Further, in Exhibit A34 the defendant only expressed regret on account of non-availability of goods in the market and the defendant's inability to meet quantity requirements on account of the defaults on the part of the suppliers of the defendant. To restate, the above admissions of the defendant would show that after entering into the contract with the plaintiff the defendant had made its own arrangements for procuring the goods locally by entering into agreements/concluded contracts on back-to-back basis with the local suppliers but, ultimately could not supply the goods as contracted to with the plaintiff on account of non-availability of goods and defaults on the part of the local suppliers with which the defendant had entered into agreements for supplies and that therefore, the defendant is prevented from executing the contract due to non-availability of sufficient cargo. The said admissions of the defendant in the correspondence amply lay bare that there is a concluded contract but the defendant had failed to execute the contract for the reasons assigned by it. The defendant sought cancellation of the contract at par and made an alternative offer to defer it till the next season would also emphasise the fact that there is a concluded contract. But for the fact that there is a concluded contract, the defendant would not have acted in the manner mentioned in Exhibits A12 and A24. Coming to the exhibits in 'B' series, Exhibit B1 is a fax message dated 15.2.1995 of the defendant concerning the supply of goods-long grain. Therefore, Exhibit B1 deals with non-basmati rice and is not related to the suit transaction. Coming to the exhibits in 'B' series, Exhibit B1 is a fax message dated 15.2.1995 of the defendant concerning the supply of goods-long grain. Therefore, Exhibit B1 deals with non-basmati rice and is not related to the suit transaction. Exhibits B2 to B4 also do not relate to suit transaction, viz., Tapioca but relate to some other product and therefore, DW 1 had admitted that they are not related to the suit transaction. Exhibit B5 is a letter addressed by the plaintiff to the defendant regarding appointment of solicitor at London to appear in the arbitration proceedings. Exhibit B6 is another letter dated 10.7.1996 by the plaintiff to the defendant. Through the said letter, the plaintiff forwarded the letter of the solicitors whereunder fee was claimed by them. We have carefully analysed the contents of all the exhibits. We have given a detailed and thoughtful consideration to the facts and the contents of all the exhibits. On a harmonious and combined reading and consideration of the entire correspondence, in our well considered view, it can safely be held that an unequivocal and clear contract had emerged out of the correspondence between the plaintiff and the defendant. As a sequel, it must be held that the plaintiff had discharged the burden which is upon it and established its case on this point as required under facts and in law. 15. Now, by referring to the contentions of the defendant, it is to be examined as to whether the defendant was able to dislodge the established case of the plaintiff by proving any of its contentions. The contract where under the already agreed to terms were reduced into writing and which is signed by the representative of the plaintiff and which is not signed by the representative of the defendant is the contract dated 23.2.1995. In the contract itself, it is stated that the non-signing of the contract by the defendant would not affect the validity of the contract. Therefore, a contract had already emerged from out of the correspondence is also known to both the parties even by that time. In the contract itself, it is stated that the non-signing of the contract by the defendant would not affect the validity of the contract. Therefore, a contract had already emerged from out of the correspondence is also known to both the parties even by that time. If really, the defendant is not agreeable to any of the terms mentioned in the said contract the defendant ought to have immediately raised objections and ought to have sought clarifications/modifications and ought to have either cancelled the contract that had emerged already by citing valid reasons or ought to have stated that there is no contract at all at that relevant time. The defendant did not do so. Even before the contract for signing is sent in triplicate, the plaintiff was communicating to the defendant the progress in the matter from time to time and the defendant is also taking at its end certain steps like entering into agreements with local suppliers for fulfilling its obligations under the contract. At the earliest opportunity available to the defendant, the defendant had never raised any objections to the terms of the contract and also did not state that there is no contract, subsequent to the first week of March 1995. Be it noted that only after the matter precipitated and when the foreign buyer pointed out the default and the breach of contract and when in turn the plaintiff had informed the defendant that the defendant would be liable to reimburse the damages and expenses to the plaintiff, the defendant started resiling from the contractual obligations and had ultimately taken a stand that there is no concluded contract. This belated attempt of the defendant in contending that there is no concluded contract is of no avail. Coming to the contention that the defendant did not furnish corporate guarantee as desired by the plaintiff, even that contention is of no avail to the defendant as in view of the concluded contract, the plaintiff did not insist for corporate guarantee. Even the defendant had stated that the plaintiff had taken a risk in proceeding with the matter without the defendant furnishing a corporate guarantee. Even the defendant had stated that the plaintiff had taken a risk in proceeding with the matter without the defendant furnishing a corporate guarantee. The contentions of the defendant that the contract was not signed by the defendant and that after signing the fax message, the Branch Manager of plaintiff had requested back-up letter to justify his message to foreign buyer and to protect the Branch Manager internally in their organization and that therefore, at request of the Branch Manager of the plaintiff, the defendant company had sent a fax message dated 30.3.1995 merely as a matter of help, without accepting the liability under the alleged contract and that the fax message dated 30.3.1995 was sent to the plaintiff only to suit the requirements of the plaintiff to support their fax message dated 29.3.1995 issued by them to foreign buyer and that even though the contract is not concluded and is inconclusive on certain clauses, still this defendant issued the fax message dated 30.3.1995 to the plaintiff only with a view to help the Branch Manager of the plaintiff being taken to task by his superior officers and that the letter dated 30.3.1995 was not voluntarily issued by the defendant and that the fax message dated 31.3.1995 was a continuation of the previous letters and fax messages, but not a voluntary one and that likewise, the fax messages dated 3.4.1995 and 4.4.1995 were in fact tutored by the plaintiff and that all the said fax messages dated 30.3.1995, 31.3.1995, 3.4.1995 and 4.4.1995 were issued at the instance of the plaintiff, but not voluntarily by this defendant and that the said fax messages are not binding on the defendant are all contentions which were raised as an afterthought and without any basis to somehow wriggle out of the contract and to avoid the liability. Therefore, the point is accordingly answered holding that there is a concluded contract between the plaintiff and the defendant. Point No. 3: 16. The next line of defence of the defendant is that due to non-availability of goods in the market, the defendant was prevented from executing the contract and that therefore, the contract was frustrated. Therefore, the point is accordingly answered holding that there is a concluded contract between the plaintiff and the defendant. Point No. 3: 16. The next line of defence of the defendant is that due to non-availability of goods in the market, the defendant was prevented from executing the contract and that therefore, the contract was frustrated. On the other hand the contention of the plaintiff before this Court is that the defendant ought to have made diligent enquiries about the availability of goods before entering into a contract and that the defendant having contracted to supply the goods ought to have made necessary arrangements to procure the goods and to supply the same, but the defendant obviously did not make adequate arrangements to procure the goods and that therefore, the deliberate conduct of the defendant in not procuring the goods cannot be a ground to say that the contract is frustrated due to non-availability of stocks in the market. In the correspondence, which is already referred to, the defendant had stated that the defendant had entered into agreements with two suppliers locally, but the local suppliers had defaulted in making the supplies and that therefore, the defendant is prevented from executing the contract. It is also stated by the defendant as a consequence of higher production estimate, a number of shippers or exporters have sold forward and market is in an over-sold position. Therefore, had the defendant been diligent the defendant would have procured the goods is evident from the very statement of the defendant in Exhibit A12. Further, the defendant had only examined DW 1, who is an employee of the defendant based at Cochin. In his affidavit filed in lieu of examination-in-chief, there is no whisper about the frustration of the contract for non-availability of the cargo. The defendant did not examine any of its suppliers with whom the defendant had entered into contracts for supply of cargo to substantiate its defence. The reasons that the defendant made wrong projections or that the defendant could not secure the goods to fulfill their obligations under the contract cannot be valid reasons for contending that the contract has frustrated. The defendant did not examine any of its suppliers with whom the defendant had entered into contracts for supply of cargo to substantiate its defence. The reasons that the defendant made wrong projections or that the defendant could not secure the goods to fulfill their obligations under the contract cannot be valid reasons for contending that the contract has frustrated. At one breath the defendant contended that due to market conditions the required cargo could not be procured for executing the contract and at another breath, the defendant contended that the defendant had not signed the contract with the plaintiff and that the defendant could not procure the cargo without a valid contract/letter of credit and that non-availability of cargo had prevented the defendant from sourcing and that the said situation had arisen because the plaintiff and its buyer had not agreed on the contractual/letter of credit terms and that the defendant is in no way responsible. Therefore, the defendant having taken inconsistent stands failed to prove by adducing necessary evidence any one of its defences to accept that the contract is frustrated. Accordingly, the point is answered against the appellant/defendant. Points 4 and 5: 17. Under Point Nos. 1 and 2, this Court held that the civil Court is having jurisdiction to entertain the suit and that there is a concluded contract. Under point No. 3, this Court had further held that the defendant's plea that the contract is frustrated is untenable. The defendant having entered into a contract to supply 7000 MT of Indian Tapioca dried chips at the agreed price had failed to fulfill its obligations under the contract and having defaulted raised unsustainable contentions that there is no concluded contract and that the contract, if any, is frustrated. The further contentions that the correspondence is not voluntarily made are also held untenable. The defendant could not prove by adducing necessary evidence any of its defences. On account of the breach of the contract committed by the defendant, the plaintiff, in turn, could not fulfill its contractual obligations under the contract between the plaintiff and the foreign buyer. Therefore, the foreign buyer after exchange of correspondence treated the plaintiff as a defaulter and referred the parties to arbitration having appointed an Arbitrator and made a tall claim of damages of USD 168,000,000. Therefore, the foreign buyer after exchange of correspondence treated the plaintiff as a defaulter and referred the parties to arbitration having appointed an Arbitrator and made a tall claim of damages of USD 168,000,000. Under Exhibit A24, the letter dated 14.6.1995, the plaintiff communicated to the defendant the foreign buyer's claim and further informed the defendant that ultimately, any penalties, damages or other liabilities that may be imposed finally by the buyers on the plaintiff will be passed on to the defendant. The plaintiff having put the defendant on notice had appointed solicitors to represent the plaintiff before the Arbitrator. The plaintiff by letter dated 29.5.1996 had informed the defendant about the appointment of solicitors at London. The copies of the draft submissions prepared by the solicitors were also communicated to the defendant and the defendant was informed about the posting of the case for hearing. The plaintiff had also informed the defendant that it was advised by letter dated 21.10.1996 of the solicitors that the chance of success in the Arbitration proceeding was very slender and that therefore, it was advisable to settle the matter with the foreign buyer. By letter dated 31.12.1996 the plaintiff had informed the defendant that to mitigate the damages likely to be awarded by the Arbitrators, which may come up to about USD 2 lakhs and which would naturally be passed on to the defendant, the plaintiff had decided for an out of Court settlement and pass on the resultant burden to the defendant. After receiving its letter dated 31.12.1996, the defendant with a view to defeat the claim and as a counter-blast got issued a notice dated 10.1.1997 through their lawyers at Mumbai to the plaintiff with all false allegations and denying their liability. Finally, the dispute was settled out of Court by the plaintiff agreeing to pay damages in a sum of USD 1 lakh in full and final settlement for no fault of the plaintiff. The plaintiff had to pay the said damages completely due to the default and breach of the contract committed by the defendant. The plaintiff remitted a sum of USD 1 lakh to its foreign buyer. The plaintiff also incurred expenditure for appearing before the Arbitrators and engaging solicitors. The said and such other connected expenses amounted to British Pound Sterling 11993.96. Therefore, the plaintiff claimed the said amounts in the present suit from the defendant. The plaintiff remitted a sum of USD 1 lakh to its foreign buyer. The plaintiff also incurred expenditure for appearing before the Arbitrators and engaging solicitors. The said and such other connected expenses amounted to British Pound Sterling 11993.96. Therefore, the plaintiff claimed the said amounts in the present suit from the defendant. Before instituting the suit, the plaintiff had issued a legal notice under the original of Exhibit A32. The defendant's reply is Exhibit A33 denying its liability. However, none of the defence contentions are accepted by this Court while adverting to Points 1 to 3 supra. The defendant is, therefore, liable to reimburse to the plaintiff, a sum of USD 1 lakh paid by the plaintiff to the foreign buyer on account of breach of contract committed by the defendant and also the sum of 11993.96 British Pound Sterling which is the expenditure incurred by the plaintiff in the Arbitration proceedings before GAFTA, London. As a sequel, it must be held that the plaintiff is entitled to recover from the defendant the suit amount in a sum of Rs. 43,51,948/- with subsequent interests and costs. On the principal amount, the trial Court had awarded interest pendente lite @ 12% per annum simple and future interest @ 6% per annum from the date of the decree till the date of realization. The same is in accord with the facts and law. 18. Viewed thus, we find no grounds calling for interference with the well considered judgment of the trial Court. In the result, the appeal suit is dismissed without costs. Miscellaneous petitions, if any, pending in this appeal shall stand closed.