ࡱ> _ objbj,E,E EN/N/g:>>>>>RRR8.\R1( 0000000$2f50>0>>40P!P!P!>>0P!0P!P!+h,cU*,m0001,55 ,5>,P!0015 :  IN THE HIGH COURT OF SINDH AT KARACHI Suit No. 1485 of 1999 Date of hearing: 13/02/2017 Date of Announcement: 27/02/2017 Plaintiff: M/S Burhani Iron and Steel Company Through Mr. Muhammad Aziz Khan Defendant: M/S. Pakistan Steel Mills Through Mr. M.G. Dastagir JUDGMENT KHADIM HUSSAIN TUNIO, J.- This suit for recovery of Rs. 97,42,127/- filed by the plaintiff above named against the defendants. 2. Briefly facts of the present suit as disclosed in the plaint are that the plaintiff is in a partnership firm doing business of general order suppliers and manufacturers representatives and the defendant has a limited company registered under the Companies Act. 1913. The defendants had invited tenders for supply of Crane Rail of Russian Origin K.P. 11 or equivalent. 3. On 18.03.1996 tenders were opened, the plaintiff and four others parties had participated out of which 3 parties had qualified and their offers were accepted by the technical committee, thereafter on 27.06.1996 offer (s) were opened and plaintiff, being lowest of all, were awarded contract on 23.09.1996 for supply Crane Rail European Origin in pursuance of purchase order of the defendant. The plaintiff had imported the tender item in such quantity for the purpose of its delivery to the defendant and incurred huge expenses and on 26.06.1996 the plaintiff wrote a letter to the defendants requesting for local letter of credit and the same was not applied. It was pointed out by the plaintiff to the defendant that request for L/C in their favour was not part of any contractual obligation from either side nor it was any condition for the purchaser. On 04.02.1997 and 27.02.1997 the plaintiff requested the defendant for early delivery of material as it was shipped earlier by supplier and reached Karachi in February 1997, but there was no response on the part of defendants. 4. On 05.06.1997 the plaintiff received a Fax from defendant for part delivery of 31150 K.G. out of total 41150 K.G of tender item and as the plaintiff was making arrangement for delivery they received another fax dated 12.05.1997 wherein, it was mentioned that in view of the request for local dated 26.06.1996, tender item may not be delivered until now. Thereafter, the plaintiff had made several request and representations for taking the delivery of tender item, but the defendant avoided same. Thereafter plaintiff imported the tender item by borrowing from his friends and market on high interest and their investment to the extent of tender amount was blocked for no fault on their parts; that on the first instance the plaintiff was forced to give 15% discount in the tender items which the plaintiffs had agreed but defendant again avoided to take delivery of the tender items as is evident from the letter of plaintiff dated 23.07.1997. Plaintiff further submits that without canceling the contract of the plaintiff the defendant has again invited the tenders of the same item but they could not be succeeded. The plaintiff, in order to minimize their financial loss, have to agree with defendant as the tender item was having no consumption in the open market after retaining the same for 22 months, supplied the same on reduced rate to the defendant without prejudiced to their right under the earlier contract. Under the contract the plaintiff was entitled to get an amount of Rs. 59,14,078/- for supply of tender item but they only got a sum of RS. 26,71,951/80 as against total delivery of tender item. As such an amount of Rs. 23,42,126/20 was due and payable by the defendant as per contract dated 23.09.1996. The plaintiff had faced a great hardship due to act of defendant and they suffered financially and mentally and further submits that they are entitled to the damages for hardship and mental agony to extent of Rs. 50,000/-. Thereafter defendant was served upon legal notice on 15.07.1999 for calling to pay the damages caused to the plaintiff as claimed above, but the defendant had failed to reply the same. The cause of action arose to the plaintiff on 12.05.1997 when the plaintiff was intimated by the defendant that he will not take the delivery of tender item and the cause of action is continued till the time the tender item was supplied subsequently to the defendant on 15.02.1999 and the payment was not made to the plaintiff as per contract. 5. The plaintiff prayed for judgment and decree as follows:- \ An amount of Rs. 32,42,126/20 being outstanding amount of tender item already supplied/delivered to the defendants after deducting an amount of Rs. 26,71,951/80 which the plaintiffs have received from the defendants till filing of this suit. An amount of Rs. 15,00,000/- as damages due to block of capital investment of the plaintiffs. An amount of Rs. 50,00,000/- towards the damages for hardship and mental agony faced by the plaintiff. Profit at the prevailing bank rate from the date of filing the suit till realization of the entire amount. Cost of the suit. Any other relief/reliefs which this Honble Court may deem fit and proper under the circumstances of the suit may be extended to the plaintiffs. 6. The Defendant filed his written statement and totally denied the case of the plaintiff. He has submitted that the tender was floated and opened on 09th November 1998 for the same item and on the basis of price received in response to the tender after negotiation and settlement with the plaintiff, who agreed to supply the item on new price. He has also submitted that the defendant has fulfilled its obligations and no damage or any hardship or financial loss mental agony was caused to the plaintiff as alleged. The legal notice was properly replied by the defendant, denied the baseless claim of the plaintiff; that no cause of action arose to the plaintiff to file the present suit which is even otherwise not maintainable in law. 7. Out of the pleadings of the parties following issues were framed by the court on 6.8.2001. ISSUES Whether the Plaintiff is a registered firm and was awarded contract dated 23.9.1996 by the defendant for crane rail European Origin? Whether the plaintiff imported the tendered item incurred and huge expenses, if so, what is the effect? Whether the defendant avoided taking delivery and the plaintiff was forced to give discount? Whether the plaintiff agreed to supply the crane rail for reduced price of Rs.26,71,951.80/- without any reservation and the purchase order was amended on 11.02.1999? Whether the plaintiff has received the entire reduced price and no amount is payable by the defendant? Whether the plaintiff has suffered loss of Rs.15,00,000/- (15 Lacs) as alleged in para 15 of the plaint? Whether the plaintiff has suffered financially and mentally and is entitled to damages to the extent of Rs.50,00,000/- (50 Lacs)? To what relief, if any, is the plaintiff entitled? Additional Issue 1 Whether the suit of the plaintiff is barred u/S 69 of the partnership act? 8. I have heard the learned counsel for the parties and perused the material available on the record. My findings on the above issues with reasons are as under. Issue No.1 Accordingly Issue No.2 Accordingly Issue No.3 Negative Issue No.4 Affirmative Issue No.5 Affirmative Issue No.6 Negative Issue No.7 Negative Additional Issue No.1 Affirmative Issue No.8 Suit Dismissed ISSUE NO.1. Whether the Plaintiff is a registered firm and was awarded contract dated 23.9.1996 by the defendant for crane rail European Origin? So far issue No.1 is concerned, the perusal of the pleadings of the respective parties would reflect that it was an admitted fact, as set out in the plaint and Affidavit in Evidence by the plaintiff as well as Defendants in their written statement and Affidavit in Evidence of the DW that the plaintiffs firm was not registered at the time of award of contract and filing of the suit. Thus, prima facie registration of plaintiffs firm or otherwise was never a matter of controversy hence, issue to such an extent was redundant. As regard the second part of the issue, it would suffice to say that both the parties also admitted in their pleadings and evidence that contract was awarded to the plaintiff by the Defendant for the supply of crane rail European origin. Thus, issue is answered accordingly. ISSUE NO.2. Whether the plaintiff imported the tendered item incurred and huge expenses, if so, what is the effect? So far Issue No.2 is concerned, the burden was upon the plaintiff to prove the same. It is material to add here that whenever one agrees to supply an item against certain amount then it becomes its obligation to arrange/ supply the same. A plea of incurring huge expenses in discharge of such obligation shall never entitle one for more / excess amount but the one agreed by it for such supply. To discharge such burden the plaintiff has filed his affidavit in evidence and reiterated the same contentions as contended in the plaint but he has not given the details of the expenses incurred by him on the transportation on the import of tender item nor produced any documentary evidence in this respect. The plaintiff has not produced the payment receipt of payment made by him at the time of purchase of said tender item nor adduced oral evidence on this issue. He has produced only Ex.P/2 i.e. purchase order, letter dated 27.02.1997 at Ex.P/3, Tele Fax at Ex.P/4, P/5, letter dated 13.05.1997 at Ex. P/6, letter dated 27.05.1997 at Ex.P/7, fax at Ex. P/8, letter dated 23.07.1997 at Ex. P/9, letter dated 07.01.1998 at Ex. P/10, letter dated 17.01.1998 at Ex. P/11, letter dated 19.01.1998 at Ex. P/12, letter dated 11.07.1998 at Ex. P/13, letter dated 16.11.1998 at Ex. P/14, Tele Fax at Ex. P/15, Amended purchase order at Ex.P/16, letter dated 11.02.1999 at Ex. P/17, Facture Invoice dated 05.12.1996 at Ex. P/18, Cotecna Inspection S.A.at Ex. P/19, Bank Certificate dated 23.10.1997 at Ex. P/20, photostate copy of Partnership Deed at Ex. P/21, but he has failed to prove that plaintiff while importing the tender item the plaintiff has incurred huge amount. Even plaintiff himself remained silent and did not depose single word regarding the expenses incurred by him while importing the tendered item. So also plaintiff has not produced any documentary proof regarding purchase of tendered item from foreign country, more particularly in respect of the expenditure incurred by him. Therefore, plaintiff has miserably failed to prove this issue, hence same is answered accordingly. ISSUE NO.3 Whether the defendant avoided taking delivery and the plaintiff was forced to give discount? To prove this issue plaintiff was first required to have established the legal obligation of the defendant to take the delivery and then causeless refusal to take the delivery thereby compelled the plaintiff to give discount. The perusal of the material, produced by the plaintiff, it appears that though plaintiff has produced number of documents, as mentioned under Issue No.2, but in none of the aforesaid mentioned documents it is mentioned that the plaintiff has reduced the sale price / amount of the tendered items on the pressure, inducement or compulsion. On the contrary plaintiff has repeatedly approached the Defendant through letters for delivery of the tendered item on discount rates without pleading such offer as a consequence of force/compulsion by the defendant. Not only this, but it is also a matter of record that the plaintiff himself participated into subsequent tender; not only agreed to supply items on reduced rate but did supply without challenging or questioning the legality of such second tender for same item and even did not file any suit till completion of subsequent contract / agreement between same parties for same subject. The plaintiff though had claimed a breach on part of the defendants with reference to earlier tender hence it was obligatory upon the plaintiff to have resorted to the available legal remedy but the plaintiff himself chose to enter into fresh contract (tender) with the defendant on fresh terms i.e. price. Here, I may add that where a person is aggrieved of an act or fact he has a right rather a duty to object to safeguard his right but if he chooses otherwise he shall be held to have waived his right to object and subsequently shall be estopped from raising such objection at a later stage. Reference in this regard can well be made to the case of Dr. Muhammad Javed Shafi v. Syed Rashid Ahmed & Ors PLD 2015 SC 212. Further, there can be no denial to the well established legal position that if parties, already under an agreement for doing a thing, entered into a fresh agreement for same subject matter then earlier shall stand merged unless specifically kept alive by conduct and attitude or in writing. The conduct and attitude of parties also matter in appreciating existence of a concluded contract or otherwise because it does not necessarily depend upon their subjective minds but upon a consideration of what was communicated between them by words or conduct. Reference may be made to the case of RTS Flexible Systems Ltd. V. Molkerei Alois Muller 2012 SCMR 1027 (SC UK) wherein it is held as: 45. The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed . It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance to the parties have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a pre-condition to concluded and legally binding agreement In the instant matter, it stood evident that it was plaintiff himself who remained asking the defendants for taking delivery on reduced rate and when such offer was accepted by defendants the plaintiffs not only delivered the items but happily received the amount without any note of protest. Thus, legally plaintiff cannot be allowed to blow hot and cold in a single breath. Accordingly, the Issue No. 3 is answered in Negative. ISSUE NO.4 Whether the plaintiff agreed to supply the crane rail for reduced price of Rs.26,71,951.80/- without any reservation and the purchase order was amended on 11.02.1999? It was the claim of the plaintiff that plaintiff agreed to supply the crane rail for reduced without prejudice to their rights, arose from earlier contract, hence burden to prove the above issue was upon the plaintiff. Plaintiff himself averred in plaint and deposed in affidavit in evidence that he has agreed, approached and repeated demands to the Defendant for supplying crane rail on reduce price of Rs.26,71,951.80 and purchase order was amended on 11.02.1999 and same has been produced in evidence by the plaintiff at Ex.P/2. The plaintiff though had pleaded to have acted by reserving his rights but produced not a single document which could have established / shown that subsequent acts of the plaintiff in supplying the items on reduced price / rate were under earlier contract or were under protest. There is nothing except mere words of the plaintiff which, legally, cannot be taken to prevail over written documents particularly when such written documents also find support from conduct and attitude of the plaintiff himself i.e supplying items at reduced rate without an objection to such reduced amount. This conclusion is also in line with object to Article 103 of the Qanun-e-Shahadat Order. Reference can well be made to the case of Elahi Bakhsh v. Muhammad Iqbal 2014 SCMR 1217 wherein it is held as: The question that arises for the adjudication of this Court is whether an oral statement of a party to an instrument which varies or tends to vary its terms could be admitted into evidence? The answer to this question is a plumb no because Article 103 of Qanun-e-Shahadat Order 10 of 1984 excludes oral statement as between the parties to any such instrument or their representatives. The rationale behind this Article is that inferior evidence is excluded in the presence of superior evidence that an agreement finding expression in writing is an outcome of deliberate and well thought out settlement; that a party acknowledging a fact in writing is precluded to dispute it an that an agreement reduced into writing is immune from mischief, failure and lapse of memory. It, therefore, follows that oral statements of P.Ws 1 and P.Ws 2 which tend to vary the terms of the deed mentioned above are inadmissible in evidence. No conclusion could be drawn much less a judgment rendered on the bass of these statements. If these statements are excluded, we are left with bare words of the respondent. Bare words, we afraid, cannot dislodge the presumption of truth attached to a registered deed. Any finding based on such statements is no finding in the eye of law. 8. The argument that application of this Article can be attracted to the instrument executed between the parties to the litigation and not their witnesses being against the letter and spirit of the Article cannot be given any weight when the Article clearly provides that no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representative in interest for the purpose of contradicting, varying , adding to or subtracting from its terms. Further, the plaintiff has not examined any other been supported by tangible and confidence inspiring evidence either oral or documentary in this regard. There is no endorsement on any of the documents produced in evidence from the plaintiff side that the crane rail was supplied on reduced price of Rs.26,71,951.80 due to compulsion, pressure, inducement or coercion except the pleadings i.e. plaint as averred by the plaintiff which per Article 103 of Qanun-e-Shahadat Order is to be excluded from consideration, hence this issue is answered in Affirmative. ISSUE NO.5. Whether the plaintiff has received the entire reduced price and no amount is payable by the defendant? It is case of the plaintiff that he has received the entire reduced price from the Defendant and produced such Bank Certificate at Ex. P/20, which confirms that the entire reduced price has been received by the plaintiff and nothing is outstanding against the Defendant as the plaintiff himself voluntarily agreed for providing the tendered item crane rail at the reduced price. Thus, issue is answered in the Affirmative. ISSUES NO.6 & 7 Whether the plaintiff has suffered loss of Rs.15,00,000/- (15 Lacs) as alleged in para 15 of the plaint? Whether the plaintiff has suffered financially and mentally and is entitled to damages to the extent of Rs.50,00,000/- (50 Lacs)? Since these issues are inter-connected and based on same piece of evidence, therefore, I would like to discuss the same together in order to avoid conflict in findings and repetition of reasons. Before start of the discussion, it would be advantageous to say that while insisting damages, suffered due to breach of a contract, the onus shall always upon the plaintiff to establish the contract; breach thereof and then the details of the damages, suffered by him (plaintiff) in result of such breach. Reference can well be made to the case of Syed Ahmed Saeed Kirmani 1993 SCMR 441 wherein it is held as: A party claiming damages suffered due to breach of contract must establish the contract, the breach thereof and the extent of damages. The onus is on the plaintiff and without discharging it he cannot succeed. Section 73 of the Contract Act prescribes the rule for assessing the damages suffered due to breach of contract. Only such damages can be recovered which naturally arise in the usual course of things from such breach or the parties at the time of making the contract knew that loss or damage in likely to result from the breach. Another principle which is to be kept in mind while assessing damages is that whether the plaintiff was in a position to mitigate the damages and has neglected to avail it. As discussed above the appellant has failed to prove the agreement with the Egyptian Embassy, the rate of rent and the date of occupation. There should be no confusion that the plaintiff has been seeking damages with reference to earlier tender, if any, which he (plaintiff) himself substituted with fresh tender. Not only this, but, as discussed in foregoing issue, that it was plaintiff himself who opted not to sue for alleged breach but supplied the items under fresh tender at reduced price thereby waiving his right to object breach, if any. Although, failure of the plaintiff to establish either of twos was / is sufficient to hold him not entitled for damages, however, the plaintiff also took plea of hardship and mental agony but record shows that plaintiff has not given the particulars of the details of the loss suffered/damages sustained by him at the hands of the Defendant. Even he has not given the kind of loss/damages i.e. that he has sustained special or general damages at the hands of Defendants. He has not examined any witness in support of his contention. He has not examined any doctor in support of his plea that after causing of loss he became ill and got treated himself through any doctor. He has claimed loss as well as damages in lump sum without giving details as well as reasons of the same. Since, it is well settled principle of law that failure of the plaintiff to discharge his burden shall result in declining what could have been declared as a right on successful discharge of burden. Further, the plaintiff himself approached the Defendant for providing the tendered item at reduced price and sent number of letters to the Defendant for receiving the tendered item and amended purchase order was issued on the request of the plaintiff, then he received the entire price from the Defendant as agreed by him through Bank certificate at Ex.P/20. Under such circumstances, I am of the humble that plaintiff has not sustained any loss as well as damages at the hands of the Defendants. As such Issues No. 6 & 7 are answered in Negative. ADDITIONAL ISSUE NO.1 On this issue learned counsel for the plaintiff has argued that the plaintiff firm has been registered on 08.11.2000 and registered Partnership Deed is produced at Ex.P/21 though he has candidly admitted that at the time of filing of the suit the plaintiffs firm was not registered and same has been subsequently registered by the plaintiff; that the suit of the plaintiff is maintainable. He has referred the case law reported in (1985 CLC 2836), (1989 CLC 1671), (1989 CLC 1778), (2010 CLC 1100), (2010 YLR 952) & (2014 CLC 718). Conversely, learned counsel for the Defendant has urged that the suit of the plaintiff is not maintainable and barred under section 69 of the Partnership Act, 1932; that the suit of the plaintiff is liable to be dismissed being barred by law. He has referred case law reported in (PLD 1968 Karachi 196) & (2014 CLC 718). 16. I have given due consideration to the submissions made by the learned counsel for the respective parties and perused the case law. Honourable Apex court has been pleased to observe in the case of Ch. Nazeer Ahmed vs. Ali Ahmed and others (2016 CLD 338), which reads as under:- 6. In view of the above, it may be pointed out (reiterated) that though the Act places no prohibition upon an unregistered partnership making contracts either inter se the partners or with some third party, nor forbids an unregistered partnership acquiring property or assets, all section 69 does is to make a suit instituted by an unregistered partnership to recover property or enforce rights, unenforceable and precluded. This undoubtedly is a penal provision, therefore on this account it must be construed strictly. In other words the registration of a firm is a condition precedent and sine qua non to the rights to institute a suit by or on behalf of the firm or its partner(s) as the case may be and any suit instituted against the mandate of law shall be barred, with the obvious consequ3nces of rejection of the plaint by the Court as per Order VII Rule 11(c) C.P.C which provides where the suit appears from the statement in the plaint to be barred by law. 17. In the case reported as Province of West Pakistan and another vs. Messrs. Asghar Ali Muhammad Ali & Co. (PLD 1968 Karachi 196), it was observed as under:- It was in this context that one of the three learned Judges happened to advert to section 69 of the Partnership Act and took the view that a subsequent registration of a firm before the passing of the decree validates the proceedings. With respect we do not agree. The prohibition in section 69 of the Partnership Act is to the institution of the suit itself unless the firm is registered. The prohibition is express and mandatory. It prevents a Court from taking cognizance of a suit brought by an unregistered firm. There is a mass of case law in support of this view which is now well established. We do not, therefore, see how we can accept the contention that the subsequent registration of the firm during the pendency of the suit can validate the suit. That brings us to the third point whether section 69 is at all attracted in the present case. 18. In view of the above position, discussion as well as case law cited above, the Additional Issue No.1 is answered in the Affirmative. 19. ISSUE NO. 8: In the light of the above position, discussion and circumstances, I am of the opinion that plaintiff has miserably failed to prove his case; therefore, the suit of the plaintiff is dismissed. The parties shall bear their own costs. 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