JUDGMENT SHEET
IN THE HIGH COURT OF SINDH AT KARACHI
Suit No. 907 of 1998
Present:
Mr. Khadim Hussain Tunio
Plaintiffs: M/s. Arsala Khan Bros.
through Mr. Mukesh Kumar, advocate.
Defendants: Chief Engineer, Highway Sindh, Hyderabad and
four others --
throughMr. Pervaiz Ahmed Memon, advocate for defendant No.5 &Mr. Alley Maqbool, AAG
&Ms.NaheedAkhtar, State Counsel.
Date of hearing: 17/02/2017.
Date of Announcement: 16/03/2017
JUDGMENT
Khadim Hussain Tunio:-J This suit for recovery of Rs.7,28,859/- and damages of Rs.5 Million has been filed by the plaintiffs, above named, against the defendants.
2. Briefly the facts of the present suit, as disclosed in the plaint are that the plaintiffs were awarded contract regarding construction of link road from Super Highway, mile, 13/0 fruit and vegetable market, Karachi. The project was sponsored by defendant No.4 and executed by defendant Nos. 1 to 3. The contract was carried out by the plaintiffs to the satisfaction of the defendants and a substantial portion of the dues of the plaintiffs was paid by defendants. The payments used to be made on the recommendation of defendants No. 1 to 3. An amount of Rs. 45,49,493/- was paid to the plaintiffs, the defendants were entitled to claim/adjust a sum of Rs.5,50,000/- being the costs of bitumen supplied additionally and they were also entitled to claim/adjust Rs.1,99,974/- on account of Income Tax deductions. The payment, already made by the defendants, to the plaintiffs is Rs.32,50,000/- leaving a balance of Rs.5,49,519/-. The plaintiffs are also entitled to a sum of Rs.40,000/- lying with the defendants by way of security deposit. It is the case of the plaintiffs that an additional sum of Rs.1,39,340/- was due against the defendants on account of jungle cutting and the total amount due to the plaintiffs from the defendants Rs.7,28,859/-. Although the plaintiffs are not big contractors but they have reputation of integrity, efficiency and known for punctuality in the market. Because of withholding of the suit amount the plaintiffs have not been able to bid for other works with the result that their image in the competition is tarnished. Thus they have lost the goodwill, reputation and business besides suffering mental torture at the hands of the defendants. Furthermore the plaintiffs would have earned Rs. 2 to 2.5 million if the amount, withheld by the defendants, was released and paid to the plaintiffs so as to enable them to obtain and execute other work. The plaintiffs also claim a sum of Rs.3 million on account of damages that they have suffered in terms of goodwill, reputation, in business and for mental peace which they suffered at the hands of defendants. The plaintiffs called upon by the defendants to pay the amounts now being claimed in the suit by a legal notice sent to the defendants on or about 31.10.1997 and the said notice although duly served has remained un-replied. The cause of action arose to the plaintiffs when the work was completed and final bills were submitted to the defendants on or about 26.02.1997 and also on such subsequent dates when the amount was claimed by the plaintiffs from the defendants but the same was not paid and finally on the service of legal notice dated 31.10.1997
3. The plaintiffs prayed for the following reliefs: -
1. Pass judgment and decree against the defendants jointly and severally in the sum of Rs.7,28,859/- on account of principal amount due against the defendants and Rs.5 million on account of damages suffered by the plaintiffs at the hands of the defendants.
2. To pass such other order and give such direction to the defendants as may be expedient and just in the circumstances of the case.
3. To award mark up at such rate that this Hon’ble court may deems from the date of institution of the suit till payment.
4. Award costs.
4. The defendants were served with the summons, failed to file their written statements, ultimately they were debarred from filing written statement on 12.01.1999 and suit of the plaintiffs was decreed against the defendants vide judgment/order dated 09.02.1999. Thereafter the defendants filed application under order IX rule 13, C.P.C. for setting aside the ex-parte decree, which was allowed after hearing the parties and ex-parte judgment/order was set-aside by this Court vide Judgment dated 25.09.2003 while deciding Judicial Miscs. No. 44, 45, 46 and 54 of 1999.
5. The Defendants filed their written statements separately. They have denied all the allegations leveled against them by the plaintiffs, they stated that the tenders for this work were invited by the Executive Engineer Highways division Karachi vide No. TC/G-55/1691 dated 30.09.1996 with date of receipt & opening on 13.10.1996 & 14.10.1996 and the plaintiffs were though lowest bidder but they started the work in anticipation of approval of the tender and issuance of work order. They further stated that a substantial portion of the work done was paid to the plaintiffs by market Committee on the initiative by the defendant No.3, as far the satisfaction of work done, it was premature on the ground that since the compaction tests had not taken place and it could not be ascertained that the quality of work was satisfactory. Moreover, oversize stone metal in funds used in the construction of road also. The Director General with other members of the Chief Minister’s inspection & Evaluation team had pointed out certain defects during their inspection on 29.05.1997, which need to be rectified and the work done by the plaintiffswere required to be brought to standards as per PWD specifications. It is also submitted that before compliance of the instructions regarding removing the objections the plaintiffs were not entitled to any payment. They further submitted that the payments were made on the recommendation of defendant No.3 by Market Committee but all the payments were running payments subject to the adjustment of final recording of measurements and also good quality of work. As per clause 8 of the B-1 agreement every running payment was advance payment.
6. They also stated that the plaintiffs had not been able to bid for other work as they were approved in “B” class to the estimate of Rs. 25,00,000/-. They further submitted that the plaintiffs have been paid running bills & no money was pending for payment. The question of any claim, hardly arose and as per record nothing was payable to the contractor till his accounts were finalized. The alleged claim was therefore false and the plaintiffswere not entitled to any relief on the other hand the plaintiffs are liable to complete the work as per specification and standard.
7. They also further stated that the tenders for the subject work were invited by Executive Engineer, Highway Division Karachi under No. T.C./G-55/1691 dated 30.09.1996 with date of receipt and opening on 13.10.1996 and 14.10.1996, respectively, though he was lowest bidder but he had started the work in anticipation of approval of tender and issuance of work order. They further stated that the subject work was not completed property by the plaintiffsas such the same could not be executed by the defendants No.1 to 3 as per contract due to fault of the plaintiffs. And the rest of the contents are denied and he made the payment to the plaintiffs for a substantial portion of the work done by the plaintiffs, on the initiative of the defendant No.3. As for as satisfaction of the work done by the plaintiffs it was premature to say that the work done was to the satisfaction as per drawing design and specification, as compaction tests had not taken as yet and it could not be ascertained at that stage that the quality of the work performed by the plaintiffs was satisfactory. It is further submitted that over size stone metal had been used in the construction of road also. The Director General with other members of the chief Minister’s inspection and Evaluation Team had pointed out certain defects during their inspection on 29.05.1997, which needed to be rectified and the work done by the plaintiffs was not as per required standard of PWD specification. They further stated that the payments were made to the plaintiffs by the defendant No.5 on recommendation of defendant No.3 but all payments were running payment subject to adjustment of final recording of measurements and also subject to quality of work as per PWD specification.
8. They also submitted that the security deposit amount of Rs.40,000/- as per relevant clauses of the contract agreement and the contention of the plaintiffs regarding additional work of jungle cutting and claim of Rs.1,39,340/- was false. In fact no work of jungle cutting was assigned to plaintiffs and so called additional work was neither provided in the estimate nor was it recorded in the MB. It is further submitted that the plaintiffs had not been able to bid for other work and the final bills were not submitted by the plaintiffs and the running bills were not paid to the plaintiffs and the plaintiffswere being paid running bills and no money was out standing against the defendants and as per record nothing was payable to the plaintiffs till his account were finalized. According to clause 8 of the B-I Agreement every running payment was advance payment.
9. Vide order dated 26.09.2005 following issues were adopted by this court:-
Issues:-
1. Whether the suit is not maintainable?
2. Whether no cause of action has accrued to the plaintiffs?
3. Whether there was any privity of contract between the plaintiffs and the defendants?
4. Whether the plaintiffs have performed the contract work committed any breach of contract? If so, it’s effect.
5. Whether the defendants have committed breach of contract by non-payment of the contractual amount?
6. Whether the plaintiffs are entitled damages? If so, what amount.
7. What should the decree be?
10. Plaintiffsfiled affidavit-in-evidence of one Arsala Khan. Plaintiffs also filed affidavit in evidence, one Hassan Khan as Ex. 5/1 along with certified copy of the following documents.
11. Plaint in Suit No. 907/1998, list of legal heirs of plaintiff, plaintiff’s address for service, list of documents, legal notice to defendant No.1 dated 31.10.1997, abstract /measurement ----Part A, abstract /measurement---Part-B, abstract / measurement---Part C, Letter from defendant No.3 to defendant No.2 dated 10.10.1996. Letter from defendant No.3 to defendant No.2 dated 15.10.1996, Programme of construction of road, letter from Asstt. Engineer Highway to defendant O.3 dated 30.10.1996, letter from Market Committee addressed to the plaintiff dated 28.11.1996, Cheque for Rs. 17,50,000/- of MCB, dated 28.11.1996, Cheque of UBL from Market Committee for Rs. 500,000/- dated 03.03.1997, Certificate from the defendant No.3, Letter from Asstt. Engineer Highways to defendant No.3 dated 01.01.1997, Ist running Account Bill submitted by the plaintiffs, letter from plaintiffs to defendant No.3 dated 28.01.1997, Letter from the plaintiffs to defendant No.3 dated 28.01.1997, 2nd running account bill of the plaintiffs dated 26.02.1997, First R/A Bill No. 145, Order dated 26.09.2005, Written statement filed on behalf of defendant No.1 a/w covering letter dated 21.11.2003, Written statement on behalf of defendant No.5, Proposed issues on behalf of defendants, proposed issues on behalf of plaintiffs at Ex-5/1 to 5/12, respectively. He was cross examined by the learned counsel for the defendants.
12. On the other hand, defendants filed affidavit-in-evidence of Muhammad MehfoozMemon on 01.01.2014 and Anwar Ali on 19.02.2014 respectively, thereafter defendants also filed affidavit in evidence, Waseem Haider son of Ghulam Haider, as Ex. D-1/1, Photostat copy of Bill as Ex. D-1/2 to D-1/11 along with photo state copy of cheque X-1 and DW-2 Muhammad MahfoozMemonfiled his affidavit-in-evidence and produced the same at Ex. DW-2/1. They were cross-examined by the learned counsel for the plaintiffs.
13. I have heard by learned counsel for plaintiffs and defendants.
14. Mr. Mukesh Kumar, Learned counsel for the plaintiffshave urged that the plaintiffshave carried out the contract to the satisfaction of the defendants; that as substantial portion of dues were paid by the defendants; that the claim of the plaintiffs against the defendants is bill Rs.45,49,493/= cost Rs,5,50,000, income tax deduction Rs,1,99,974, payment already made by the defendants to the plaintiffs Rs,32,50,5000, security deposit lying with defendants Rs,40,000, jungle cutting (additional work) Rs.1,59,340, total amount payable by the defendants to the plaintiffs Rs.7,28,859; that there is another aspect of the case which pertains to damages and compensation on account of certain acts of the defendants; that the plaintiffs are not big contractors, but all along they have been enjoying the reputation of integrity, efficiency and punctuality in the market; that on account of withholding the amount of bill, the plaintiffs were not able to bid for other works, resultantly the image of the plaintiffs was tarnished in the competition on account of non-participation therefore, plaintiffs sustained loss of reputation, good will in business circles and general public; that the plaintiffs also suffered mental torture, humiliation and defamation on account of certain acts of the defendants; that the defendants are liable to compensate the plaintiffs for the pecuniary and non-pecuniary losses sustained by them due to the wrong and malafide acts of the defendants; that in case of timely payments the plaintiffs would have earned 2.5 million rupees till final disposal of suit and likewise more money at least in the same proportion till today, rather till the decree of the suit, that the plaintiffs claim Rs.3 million towards compensation and damages for the goodwill, reputation in business circles so also for mental peace losses; that the plaintiffs were fully determined by the monitory claims against the defendants, sent a legal notice to them on 31.10.1997 which was not replied by them even after service of the same; that the defendants No.5 claimed that the plaintiffsare guilty of default, they admitted certain payments to the plaintiffs, but claimed that they have not taken compaction test; that there is no specific denial regarding quality of work done by plaintiffs; that they admitted that the measurements were recorded for the work done in MB No.149 from page 28 to 59; that the plaintiffshave successfully proved his case; that the DWs failed to produce original documents in their evidence though they have produced the photocopies of certain documents; that during cross-examination the evidence of the defendants was shattered; that the defendants have failed to prove their contention through oral and documentary evidence; that the DWs have admitted the contention of the plaintiffs; that the DWs have failed to give justification as to why the defendants have withheld the bill of plaintiffs; that the evidence of the DWs is hearsay evidence; that the DWs have not produced any record in order to rebut the allegations of the plaintiffs; that the suit of the plaintiffs may be decreed.
15. Conversely, the learned AAG has submitted that suit of the plaintiffs is not maintainable at law; that the plaintiffshave no cause of action to file the suit against the defendants; that the plaintiffshave not completed the work assigned to him; that the plaintiffshave used the oversized stone metal in the construction of the road; that the quality of the work performed was not satisfactory; that the Director General with other members of the Chief Minister Inspection and Evaluation has pointed out certain defects during inspection on 29.5.1997; that prior to compliance of defects and instructions regarding removing the objections the plaintiffs are not entitled to any further payment; that the payments were made to the plaintiffs by the Defendant No.5 on recommendation of Defendant No.3 which were made running payments subject to adjustment of final recording of measurement, quality of work as per PWD specification; that according to clause 8 of B-1 agreement, every running payment is advanced payment; that the plaintiffs calculated the amount based on the measurement recorded in the MB No. 145 but the bills were never prepared and submitted by the contractor in the office of Defendant No.3; that the plaintiffs had been receiving payments against unmeasured work on hand receipts (from 28); that the final bills were not submitted by the plaintiffs; that the running bills were not paid to the plaintiffs according to actual work done by him, but such running payments were made without proper measurement, therefore the plaintiffs cannot claim that any amount got outstanding against the defendants in respect of work performed by him.
16. However, learned counsel for Defendant No.3 has submitted that the suit of the plaintiffs is barred u/S 23 of Agricultural produce markets Act, 1939. The learned counsel further adapted the same arguments as advanced by the learned AAG.
17. I have given close meticulous consideration to the arguments advanced by the learned counsel for the parties and carefully perused the material brought on the record.
18. My findings on above issues with reason as under:-
Issue No.1 Affirmative
Issue No.2 Affirmative
Issue No.3 Accordingly
Issue No.4 Negative
Issue No.5 Negative
Issue No.6 Negative
Issue No.7 Suit Dismissed
19. ISSUE NO. 1:
“Whether the suit is not maintainable?
The burden of proving this issue lies upon the shoulders of the defendants as they have asserted in their written statement that the suit of the plaintiffs is not maintainable in law. Although they (defendants) did not specifically take such plea in the written statement that how and under which law the suit of the plaintiffs is not maintainable however, at the time of hearing the learned counsel for the defendants has argued that the suit of the plaintiffs is barred under Agricultural Produce Markets Act 1939 as no notice was served upon defendants before filing of suit. I would add here that a legal object / question with regard to competence / jurisdiction can well be raised at any stage because subject to certain exceptions, any decision rendered by the court stands vitiated on this count alone. Reference may be made to the case of Karachi Dock Labour Board PLD 2016 SC 121 wherein at para-15 it is held as:
“15. … Furthermore, an objection regarding inherent jurisdiction of an arbitrator is a point of law, which goes without saying, can be raised at any stage and it is an incurable defect per the law laid down inChief Engineer’s case supra.
In another case of Zahid Zaman Khan PLD 2016 SC 409 it is held as:
‘5. ….It may emphatically be stated that the law enjoins a duty upon the Court to settle questions about its jurisdiction, because subject to certain exceptions, any decision rendered by the court having no jurisdiction stands vitiated on that account alone.
To properly appreciate the maintainability of suit with specific reference to Section 23 of the Markets Act, it would be proper to refer the same which reads as:
“Section 23. Bar of Suit in absence of notice—(1) No suit shall be instituted against any market committee or any member, or employee thereof or any person acting under the direction of any such committee, member, or employee for anything done or purporting to be done under this act, until the expiration of 2 months next after a notice in writing, stating the cause of action, the name and place of abode of the intending plaintiff and the relief which he claims, has been, in the case of a committee, delivered or left at its office, and in the case of any such member, employee or person as aforesaid, delivered to him or left at his office or such place of abode, and the plaint shall contain a statement that such notice has been so delivered, or left.
(2) Every such suit shall be dismissed unless it is instituted within six months from the date of the accrual of the cause of action.”
20. The language is quite clear that it not only restricts one to sue againstany market committee or any member, or employee thereof or any person acting under the direction of any such committee, member, or employee until the compliance, as insisted, is not made but clause (2) thereof speaks of penal consequences i.e dismissal of suit, therefore, it is quite safe to say that plaintiffs cannot seek an exception thereto. If a thing is to be done in a particular manner then same has to be done in that manner nor otherwise. A directive provision, if has been insisted by sub-clause with penal consequence, then such provision shall always be taken as ‘mandatory’ and departure therefrom shall bring detailed consequences. The Courts are always empowered to ensure compliance of such mandatory provisions. Reference may be made to the case of Umer Aslam v. Sumera Malik PLD 2007 SC 362 wherein it is held at rel. p.367 as:
“.. As according to latter provision of law, Election petition shall be dismissed during trial if the provision of sections 54 and 55 of the Act, 1976 have not been complied with. As non-compliance of the provision of section 55, particularly, subsection (3) of the Act, 1976 with reference to the instant case, prescribes a penalty, therefore, verification on oath and its attestation by an authorized person to administer the oath has become mandatory.
In the same case it was held at rel. p-369 as:
“10. … It may also be added at this juncture that notwithstanding the fact that the defect has been pointed out by the respondent or not, the Court is always empowered to ensure that the law under which proceedings have been initiated before it stands complied with fully particularly in the cases where non-compliance of mandatory provision prescribes a penalty.”
21. The plaintiffshave produced photocopy of notice dated 31.10.1997, issued by Mr. Usman Ghani Rashid advocate to the Chief Engineer Highways, Shahbaz Building, Hyderabad and copy whereof endorsed to the Executive Engineer block No. 71 Pak Secretariat Karachi and the officer incharge, Market Committee, A-212, Block 3, Gulshan-e-Iqbal, Karachi. I would add that mere attaching a copy of notice alone would not be sufficient to satisfy the spirit of said provision because it is not the notice but service thereof. A requirement of notice shall never serve its object unless it is served / delivered to the one, addressed because the term ‘notice’ is meant :
“information that tells you or warns you about something that is going to happen”
It is a matter of record that plaintiffs have not produced any proof that same was delivered in the office of the defendants neither produced any postal receipt or acknowledgement receipt regarding service of said legal notice upon the defendants. Further, the plaintiffs have filed the suit on 05.06.1998 i.e after expiry of 6 months of issuance of said notice which also brings the penal clause into play thereby insisting for dismissal of the suit. Thus, even such notice does not provide any help to the plaintiffs to escape the consequences hence I find that the suit of the plaintiffs is not maintainable at law and is barred by the provision of Section 23 of the Agricultural Produce Markets Act 1939. The issue is answered in the affirmative.
22. ISSUE NO.4 & 5
“Whether the plaintiffs have performed the contract work committed any breach of contract? If so, it’s effect?
Whether the defendants have committed breach of contract by non-payment of the contractual amount?
Both these issues are strongly interlinked with each other hence it would be in all fairness to discuss the same jointly to avoid repetition. The burden of proving both these issues lies upon the plaintiffs because it was the assertions and claims of the plaintiffs that they (plaintiffs) completed the works without any breach and final payment illegally with-held by defendants by committing breach of contract. To prove this issue plaintiffs have filed affidavit in evidence of the PW Hassan Khan Ex.5 who has reiterated the same assertions as asserted in the plaint, but the plaintiffs had not produced any documentary evidence so as to prove that the contract work was completed by the plaintiffs within stipulated period, as per agreement. I would add that since the plaintiffs have set-up their claims under plea of completion of the contract hence it was obligatory upon the plaintiffs to have established so, however, record shows that the plaintiffs neither disclosed the date of completion of the work nor the date of submission of the final bill for payment with the defendants. The plaintiffs have also not disclosed the date of taking of measurement as well as recording of MB. There can be no denial to fact that one legally cannot claim complete and final payment without establishing satisfactory completion of the entire work particularly when this was agreed by parties. Thus, plaintiffswere always legally bound to have established handing over of the work under a certificate of satisfaction which the plaintiffs have not. Not only this, but the plaintiffs also did not claim that after completion of works the final measurement was recorded in MB (measurement book). In absence whereof the plaintiffs cannot be said to have discharged the burden, fell upon plaintiffs. On the other hand, it is case of the defendants that the plaintiffs failed to complete the work within stipulated period; had abandoned the work without completion of the same as per specifications and in accordance with the contract. The work was not completed by the plaintiffs properly as such same could not be executed by the defendants No.1 to 3 as per contract due to fault of the plaintiffs. The defendant No.5 had made payment to the plaintiffs for a substantial portion of work done by the plaintiffs on the initiative of the defendant No.3 which however does not help the plaintiffs from discharging obligations to prove that work was done as per specification and with entire satisfaction of defendants, particularly when the defendants specifically had come forward with breach / default on part of the plaintiffs, as stated above. Further, it was the claim of the plaintiffs that plaintiffs have been working as contractor and had a name, fame and reputation in such field therefore, plaintiffswere always believed to be having complete notice and knowledge of procedure that plea of completion of work could only sustain when a certificate is issued in favour of the contractor by concerned authority / Engineer in charge. Receipt of some of the payment cannot be of any help for the plaintiffs when the defendants specifically claimed such payment with reference to clause-8 of the contract agreement. A direct reference to clause-8 would make things further clear which reads as under:
“All such Intermediate payments shall be regarded as payments by way of advance against the final payment only and not as payments for work actually done and completed, and shall not preclude the engineer in charge from requiring any bad, unsound, imperfect or unskilled work to be removed or taken away and reconstructed, or re-corrected nor shall any such payment be considered as an admission of the due performance of the contract or any part thereof in any respect or the accruing of any claim.”
23. The status of the above clause, being binding upon either side, is not disputed, hence the plaintiffs legally cannot seek an escape or exception to agreed position(s) that :
i) intermediate payments shall be regarded as advance;
ii) intermediate payments shall not be regarded as payments for work actually done and completed;
iii) intermediate payments shall not preclude plaintiffs from removing any bad, unsound, imperfect or unskilled work and reconstruction thereof;
iv) nor such payment shall be considered as an admission of the due performance of the contract or any part thereof;
Thus, even production of first running account bill, second running account bill and FWST R/A Bill No.145 with plaint and affidavit at evidence at Ex.5/7 to 5/9 respectively, would in no way change the legal position that same shall continue with status of ‘advance payment’ and in no way advances the plea of plaintiffs that work was completed. The plaintiffs have not disclosed the date of completion of work, measurement of the completed work and removal the defects in the work pointed out by the Chief Ministers monitoring and evaluation team in its report dated 29.05.1997. The plaintiffs have not specifically mentioned date of submission of the final payment bill with the defendants or date of refusal of payment. The plaintiffs have not produced the original copy of legal notice dated 31.10.1997 and failed to examine its author. Such dispute could have been proved by examining the Engineer-in-charge which the plaintiffs didn’t, so as to prove their claim of completion of work. Non-examination of such a material witness without any legal justification or reason by the plaintiffs, allow in presuming adverse inference against the plaintiffs well within meaning of Article 129(g) of Qanun-e-Shahadat Order.
24. It needs not be mentioned that failure or weakness of rival cannot be a valid ground to claim an exception towards duty of plaintiffs to prove what was to be proved by plaintiffs. Be as it may, in rebuttal of evidence of plaintiffs, defendants have filed affidavit in evidence of DW Maqsood Ahmed Memon; that the payments were made to the plaintiffs by the Defendant No.5 on recommendation of Defendant No.3, but all the payments were running payments subject to adjustment of final recording of measurements and also subject to quality of work as per PWD specification which stand is in conformity with clause-8 of the B-1 agreement, already referred above. DW further submitted that amounts calculated by the plaintiffs are based on the measurement recorded in MB No.148 from page 29 to 59 but the bills were never prepared and submitted by the contractor in the office of the defendant No.3 and the defendant had been receiving the payments against the unmeasured work on hand receipts (from 28-28), which, as already held was / is a payment in advance and not an ‘admission’ of completion of the work or any part thereof.
25. Be as it may, the defendants had categorically come forward with a specific plea against the claim of plaintiffs regarding completion of work that it was premature on the ground that since the compaction tests had not taken place and it could not be ascertained that the quality of work was satisfactory hence it was obligatory upon the plaintiffs either to deny the same by filing replication or to have insisted for such exercise by defendants, however, it is a matter of record that plaintiffs resorted to none. Further, the defendants also had come forward with a specific stand that over-size stone metal was used in the construction of road and that the Director General with other members of the Chief Minister’s inspection & Evaluation team had pointed out certain defects during their inspection on 29.05.1997, which need to be rectified and the work done by the plaintiffswere required to be brought to standards as per PWD specifications. This was also not denied nor the plaintiffs examinedany body so as to prove that defects, if any, pointed out were rectified within meaning of Clause-8 of the agreement.
26. Thus, it is quite safe to conclude that plaintiffs have failed to prove, through cogent, confidence inspiring as well documentary evidence, that they have performed the contracted work and that breach was committed by defendants hence, the Issue Nos.4 and 5 are answered in the Negative.
27. ISSUE NO.6
‘Whether the plaintiffs are entitled damages? If so, what amount?”
The burden to prove this issue squarely falls upon the plaintiffs because when a party claims damages, suffered due to claimed breach of contract, then resort is provided by Section 73 of the Contract Act itself as:
“73. Compensation for loss or damage caused by breach of contract.When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
Whenever, one is going to claim compensation / damages with reference to breach of a contract then it is always obligatory upon him to establish contract first and then breach thereof because for breach / breaking a thing shall always require existence thereof. Reference may be made to the case of Syed Ahmed SaeedKirmani v M/s MCM Bank Ltd. 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.
In another case of M/s Kamran Construction (Pvt.) Ltd. v. Nazir Talib2010 SCMR 829, it is held as:
‘8. The respondent filed the suit claiming damages while relying upon the provisions of section 73 of the Contract Act. Under the said provisions of law, the party claiming damages to has to firstly plead and the prove by sufficient , trustworthy, independent and cogent evidence that the concluded agreement existed between the parties, the other party committed breach of contract, such breach entitled the first party to damages and the foremost factor is quantum of damages. This Court in the case of Ahmed SaeedKirmani (ibid), has inter alia held “that 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 theContract Act prescribes the rule for assessing the damages suffered due to breach of contract.” In this context, the case reported as “Islamic Republic of Pakistan v. Sh. Nawab Din 2003 CLC 991 can also be referred to.”
Since, while discussing earlier issues, it stood established that the plaintiffs failed to prove breach on part of the defendants hence this issue with reference to entitlement of the plaintiffs with reference to breach needs no further discussion.
28. However, the plaintiffs have also attempted to colour the claimed compensation as damages for loss of reputation e.t.c but with reference to breach. For such plea, it would suffice to refer the second para of the Section 73 of the Act which reads as:
“Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.”
The above should be sufficient that one would not be entitled for any compensation for any ‘remote and indirect loss / damage’ if same is with reference or as consequence of such breach. Even otherwise, the plaintiffs have not given details of the damages as well as particulars of the loss sustained by them at the hands of the defendants. They have claimed imaginary damages against the defendants. The plaintiffs have not adduced any sufficient oral as well as documentary evidence on this issue. There is only word of PW- on this issue and same is not corroborated by any independent and confidence inspiring evidence. Mere words alone would never be sufficient to prove the plea of damages. Accordingly, this issue is answered as negative.
29. ISSUE NO.3
Whether there was any privity of contract between the plaintiffs and the defendants?
This issue seems to be redundant because it was not disputed that the contract was given to the plaintiffs regarding construction of link road from super highway Mile 13/0 to fruit and vegetable market Karachi and even the defendants acknowledged payment of running bills (advance payment). As such issue is answered accordingly.
30. ISSUE NO.2
Since it has been opined under foregoing issue that the suit of the plaintiffs is not maintainable at law, plaintiffs have not completed the contract work to the satisfaction of defendants as per agreement, failed to remove the defects the Director General with other members of the Chief Minister’s Inspection and Evaluation Team had pointed out during their inspection on 29.05.1997, which needed to be rectified and the work done by the plaintiffs was not as per required standard of PWD specification and defendants have not caused any damages to the plaintiffs as well as plaintiffs have not submitted final bill for payment with the defendants. Above all, the specific plea of the defendants that the compaction tests had not taken place hence the quality of work could not be declared as satisfactory which otherwise was requirement for a cause to claim consequences, arising out of completion of contract work. As such plaintiffs have no cause of action to file present suit, hence issue is answered in the affirmative.
31. ISSUE NO.7
In view of the findings recorded under foregoing issue the plaintiffs have failed to prove their case therefore suit of the plaintiffs is dismissed with no order as to cost.
J U D G E