VIVIAN BOSE,J.

(1) THE defendant appeals.

(2) THE plaintiffs were the partners of a firm known as Harnam Singh Jagat Singh. Before the partition of India they carried on the business of cotton cloth dealers at Lyallpur which is now in Pakistan.

(3) THE defendant is the Delhi Cloth and General Mills Co. Ltd. It is a registered company carrying on business at Delhi and other places and has its head office at Delhi. One of the places at which it carried on business before the partition was Lyallpur.

(4) THE plaintiffs case is that they carried on business with the defendant company for some three or four years before 1947 and purchased cloth from the company from time to time. In the course of their business they used to make lump sum payments to the defendant against their purchases. Sometimes these were advance payments and at others the balance was against them. When there was an adverse balance the plaintiffs paid the defendant interest: see the plaintiff Sardari Lal as P. W. 3.

(5) ON 28/7/1947 the account stood in the plaintiffs favour. There was a balance of Rs. 79-6-6 lying to their credit plus a deposit of Rs. 1,000.00 as security. On that day they deposited a further Rs. 55,000.00 bringing the balance in their favour up to Rs. 56,079-6-6.

(6) THE defendant company delivered cloth worth Rs. 43,583-0-0 to the plaintiffs against this amount at or about that time. That left a balance of Rs. 11,496-6-6. The suit is to recover this balance plus interest.

(7) THE claim was decreed for Rs. 12,496-6-6 and this was upheld on appeal to the High court. The defendant appeals here.

(8) THE defendant admits the facts set out above but defends the action on the following ground. It contends that when India was partitioned on 15/8/1947, Lyallpur, where these transactions took place and where the money is situate, was assigned to Pakistan.,. The plaintiffs fled to India at this time and thus became evacuees and the Pakistan government froze all evacuee assets and later compelled the defendant to hand them over, to the Custodian of Evacuee Property in Pakistan. The defendant is ready and willing to pay the money if the Pakistan government will release it but until it does so the defendant contends that it, is unable to pay and is not liable. The only question is, what are the rights and liabilities of the parties in those circumstances? The amount involved in this suit, though substantial, is not large when compared with the number of claims by and against persons in similar plight. The defendant itself is involved in many similar transactions. A list of them appears in Ex. D-11. Mohd Bashir Khan, D.W. 1, says that the total comes to Rs. 1,46,209-1-9. The defendant has accordingly chosen to defend this action as a test case.

(9) THE further facts are. as follows. At the relevant period, before the partition, cloth was rationed and its distribution controlled in, among other places, the Punjab where Lyallpur is situate. According to the scheme, quotas were allotted to different areas and the manufacturers and suppliers of cloth could only distribute their cloth to retailers in accordance with those quotas, and dealers in those areas could only import cloth up to and in accordance with the quotas allotted to them. If the suppliers themselves had a retail shop or business in a given area, then the quota for that area was divided between the supplier and a government quota-holder or quota-holders called the nominated importer or importers. The local agency of the suppliers was permitted to import up to the -portion of the quota allotted to it in that area and the suppliers were obliged to give the balance of the quota to the government quota-holder or holders. The plaintiffs were the government quota-holders for Lyallpur and the defendant company also carried on business there through the General Manager of the Lyallpur Mills.

(10) IT is admitted that the def