H.C.A.No. 141
of 2020
Present: Mr. Justice Aqeel Ahmed Abbasi
Justice Mrs. Rashida Asad
Date of Hearing: 19.11.2020
Date of judgment: 02.12.2020
Appellant: M/s Masoomi Enterprise Pakistan Pvt. Limited and two others
through Mr. Abid S. Zuberi
advocate
Respondents: Nemo
Rashida Asad J. – Through instant Appeal, the appellants have
assailed the judgment and decree dated 29.05.2020, passed by the learned Single
Judge of this Court in Suit No. 1569/2001, whereby, the suit of appellants/plaintiffs
against respondent No.1 was partially decreed to the extent of payment of USD
120,000.00 to be paid from the amount of USD 200,000.00 already deposited with
the Nazir of this Court.
2. The relevant facts of the appeal are
that the appellants as a private limited company incorporated under the
Companies Ordinance, 1984, are carrying on and involved in the business of
general traders, buyers, sellers, importers, exporters, contractors, industry
and in all kinds of deep sea fishing, whereas, the respondent No.1 (a corporate
entity operating under the laws of China) used to act and operate in Pakistan
through respondent No. 2 & 3, being authorized representative. As such, the
appellant No. 1, entered into four different Agreements with respondent No.1,
inter-alia, for provision of two deep sea fishing trawlers. The dates of said
Agreements were 18.06.1997, 10.11.1997, 14.01.1998 and 07.08.1998 respectively.
These Agreements contain terms relating to the framework for operating the two
deep sea fishing trawlers viz. respondents No.5 and 6.
3. One of the main term
of the Agreements was that appellants would obtain Letter of Intent from Marine
Fisheries Department, Karachi/ respondent No.4. The Agreements further contained
modality of payments. According to the appellants the respondents/defendants
No. 1 & 2, willfully failed to fulfill their part of contractual
obligations culminating into breach of contract and did not provide fishing
trawlers at all and they also committed fraud upon the appellants by providing
said trawlers to another local company.
4. Appellants originally filed
Admiralty suit No. 18/2000 and prayed for following
relief(s):-
a)
US$ 260,000.00 (USD Two Hundred and Sixty
Thousand Only) to be paid to the Plaintiffs.
b)
To award damages as aforesaid from the
Defendants No.1 to 3 amounting to 30,50000.00 USD and
may be paid to the Plaintiffs No. 1, 2 and 3.
c)
To issue warrant of arrest of the Defendants
No. 5 and 6 i.e. detain the two vessels/ trawlers Nos. FU YUAN YU 235 and FU
YUAN YU 236 and keep the same in custody of this Hon’ble
Court until the payment of the above amount of damages 30,50,000
US$ and amount of cooperation expenses i.e. 2,60,000 US$ (total amounting to
US$ 33,10,000) is paid to the Plaintiff’s No. 2 and 3, and further restrain the
Defendant No.4 from issuing the vessels/ trawlers bearing Nos. FU YUAN YU 235
and FU YUAN YU 236 till disposal of the suit. The aforesaid two vessels may be
allowed to leave the port only in the event of furnishing security to the
extent of the amount claimed in the suit and if no security is furnished, the
Defendant No.5 and 6 be sold and the decretal amount
be paid to the Plaintiffs out of the sale proceeds of the Defendants No. 5 and
6.
d)
Cost of the suit be
awarded to the Plaintiffs.
e)
Make such other or further orders as may be
found fit and proper in the circumstances of the case.
5. The respondents No.2 and 3 filed
their written statement, denied the allegations of the appellants and averted
that appellants No.2 and 3 failed to support the business operation for
non-availability of funds and requisite license from the concerned Authority.
However, question regarding shareholding of appellants in appellant No.1, was
raised and according to the respondents, the same was transferred to the
respondent No.2 and 3. Respondent No.1 was declared ex-parte. Official respondent
No.4 filed written statement. Issuance of licenses for operating vessels and “No
Objection Certificate” for fishing voyages and Inspection of fish catch was
conceded which were subsequently cancelled in September 2000. Respondent No. 6
questioned the maintainability of the suit under the Admiralty jurisdiction.
6. Legal heirs of Respondent No.7 also
filed their written statement repudiating claim of the appellants by stating
that the grievance of the appellants was against respondents No.2 and 3, who
played fraud upon the legal heirs of respondent No.7 in respect of shareholding
of appellant No.1.
7. From the pleading of the parties,
following Issues were framed:-
i) Whether
the defendant No.1 violated the agreements dated
18.06.1997, joint venture agreements dated 18.06.1997
and 10.11.1997 and Agreement/ Deed dated 14.01.1998?
ii)
Whether a revised agreement was also executed
between the plaintiffs and defendant No.1 on 07.08.1998, which was also
violated by the defendant No.1?
iii)
Whether as a result of violations of the
aforesaid agreements the plaintiffs suffered huge losses as mentioned in the
paragraph No.26 of the plaint and plaintiffs are entitled for the relief prayed
in the suit?
iv)
What should the decree be?
8. It
reveals from the impugned judgment and record that in the intervening period,
three developments took place i.e. on 20.08.2011, the matter was settled
between appellants and respondents No. 2 and 3 in presence of respective
counsel and both the respondents No. 2 and 3 were deleted from the array of the
Defendants, vide order dated 21.03.2016 and consequent upon such settlement an
amount of USD 200,000, lying in the Standard Chartered Bank, was directed to be
transferred to the Nazir of this Court which has been
invested in a profit bearing scheme. Further, by order dated 21.12.2000, the
suit was converted from Admiralty Suit No.18 of 2000 to an ordinary Civil Suit,
which order was challenged by the appellants in Admiralty Appeal, but the same
was dismissed vide judgment dated 07.11.2001.
9. Thereafter, evidence was recorded
through commission and appellants examined appellant No.2 as PW-01, Fayyaz Ali Shah as P.W-02 and Arz
Muhammad Siddiqui as P.W-03. Neither the respondents
cross examined the witnesses nor they produced their own evidence.
10. Learned
Single Judge, after hearing the learned counsel for the appellants and
evaluation of the evidence decreed the suit as under:-
“26. The above suit is
partly decreed only against Defendant No.1, which is liable to pay US
Dollar 120,000/- (one hundred and twenty thousand US Dollars) to the
Plaintiffs. Since, Nazir of this Court had earlier encashed the Bank Guarantee of US$ 200,000/- (two hundred
thousand US Dollars) and invested the same in profit bearing scheme, therefore,
Nazir shall pay to Plaintiffs after completing
requisite procedure, the above amount of US$ 120,000/- (one hundred twenty
thousand US Dollars) in Pak Rupees at the current conversion rate. For the
remaining amount lying with Nazir, he may file a
reference in Court, so that remaining/ balance amount can be returned to
Defendant No.1.”
11. Being
aggrieved by the decree, the appellants/plaintiffs have filed present appeal. Notices
of the instant appeal were issued to the respondents through all modes,
however, none of them came forward to answer the appeal and as such the appeal
was heard ex-parte.
12. Learned
counsel for the appellants argued that the learned Single Judge despite answering
Issues No.1 and 2 in affirmative, in respect of violation of Agreements and
Revised Ocean Fishery Cooperation Joint Venture 1998-99 and revised Ocean
Fishery Cooperation Contract 1998-99 dated 07.08.1998 by the respondent No.1, denied
the claim of damages; that respondent No.1 failed to either cross examine the
appellant and or their witnesses and or to appear/ produce any evidence in
rebuttal, hence the claim of the appellants was unrebutted;
that learned Single Judge has not taken into consideration the fact that the
respondent No.1 deliberately and intentionally, in order to usurp the amount of
the appellants company, committed flagrant violation of the terms and
conditions of the Contract hence was guilty of breach of contractual
obligations; that respondent No.1 in collusion with respondents No. 2 and 3
committed fraud with the appellants as the two stern fishing trawlers, brought
to Pakistan by the respondent No.1, were
handed over to another company viz. A.Z.M Marine System Karachi and therefore,
the respondent No.1 violated the terms and conditions of the Ocean Fishing
Cooperation Contract dated 18.06.1997 and did not pay the phase 1 of
Cooperation payment amounting to USD 50,000/- to the appellants company, on
which the appellants sent a legal notice to the respondent No.1 for payment of
One Million USD as damages plus 50,000 USD towards 2nd phase
cooperation expenses of the appellants Company; that learned Single Judge did
not appreciate that initial contract with respondent No.1 was for one year (Ex.P/19) which was extended for further three years as
mentioned in Revised Contract Ocean Fishery dated 07.08.1998 (Ex.P/22 and P/23) which was extended on the written request
of the respondent No.1; that respondent No.1 sent an amount of USD 500,000/- to
appellants through the Master of the Fishing Trawlers, owned by respondent
No.1, sent for fishing operation in Pakistan sea waters, on the license of
Appellants’ Company, but due to misguidance of local agents, the said Master of
the ships and Mr. HE, the translator of the respondent No.1, operated the
vessels on other companies license i.e. M/s Siegfried Farms & Pak Fishing
Corporation. It is further argued that letter dated 05.10.2001 was not taken
into consideration by the learned Single Judge, whereby the respondent No.1 has
clearly stated that in case, Master of the Vessels deposited the amount in
court as guarantee, appellants company shall have the right to encash the said amount; that as per revised Contract, in
case the Vessels will be given to any other company, the respondent No.1 would
be liable to pay damages one Million USD and such fact has been proved by the
appellants by cogent evidence which went un-rebutted and unchallenged; that the
learned counsel, by referring clause (i) para 4 of
the Agreement dated 07.08.1998, contended that learned Single Judge did not
examine the effect of penal clause and damages; he lastly, prayed that impugned
judgment and decree may be modified to the extent of claimed amount for two
years 1998-99 to 2000 amounting to USD 260,000/-, as prayed in prayer clause
‘a’ of the plaint, outstanding amount of
Pak Rs.66,49,590/- lying in the office of Nazir and
further to allow relief of two years from 2001-2002, as Ocean Fishery Cooperation
Contract which was extended to the respondent No.1 for three years more. The
respondent No.1 is liable to pay an amount of USD 280,000.00 to the appellants
for two years. He further asserted that claim of damages as per prayer clause
‘b’ of the plaint, may be awarded to the appellants for committing two other
flagrant violations in fulfilling the terms of contract. Having been confronted
with certain legal discrepancies and inconsistencies in the evidence to achieve
the whole relief as claimed in the suit and herein, the learned counsel for the
appellants frankly contained himself to seek claim to the extent of remaining
amount of USD 80,000 lying with the Nazir of this
court since deposited in terms of compromise between appellants and respondents
No. 2 & 3, whereby their names were deleted from the array of defendants.
13. Nevertheless,
of contentment of the learned counsel for the appellants to claim just
remaining amount to modify the impugned decree, the claim and relief of the
appellants is required to be examined on its own merits regardless of the fact
that defendants/respondents did not defend the suit or appeal because of
cardinal and global principle of jurisprudence that “he who alleges, must prove
and in case he fails to prove the issue, the presumption goes against him”. In
this regard, reference to the following case law would be beneficial:-
(a) State
Life Insurance Corporation of Pakistan through Chairman and 3 others vs. Mst. Safia Begum (2001 CLC 408), wherein it is held as
under:
(b) Muhammad Akram alias Akan vs. Mst. Pathani through Legal Heirs and 5 others (2001 MLD 1037), wherein it was held
that:
(b) Administration
of Justice..........Party approaching Court for seeking some relief has to
stand on his own legs and any weakness in the case of other side neither improves
his case nor such party is entitled to any relief on
that basis.
(c) Ruqiya Bibi vs. Samiullah (2004 YLR
2607)
(c) Suit………..Plaintiff has to succeed at the
strength of his own evidence and if case is not made out from his evidence, the
suit must fail.
14. However,
before dilating upon the facts, evidence and merits of the appeal, it seems
expedient to examine the propriety of the parties arrayed as respondents
hereto. As mentioned hereinbefore that in terms of a compromise between the
appellants and respondents/defendants No. 2 & 3, their names were deleted
from the list of the defendants vide order dated 21.03.2016 and thus they were
no longer party to the suit. In such eventuality arraying respondents No. 2
& 3, in the instant appeal appears to be unlawful and unnecessary and
accordingly their names are hereby ordered to be deleted from the array of
respondents to construe that they were never a party to this appeal.
15. Now
reverting to the merits of the appeal and that too with regard to the issue No.
3, of the suit which has further narrow down in view of the arguments of the
learned counsel for the appellants who gave up rest of the claims and asserted
for entitlement of the appellants for payment of remaining amount of USD
80,000.00 lying with the Nazir of this Court in the
background of facts as depicted in the preceding paragraph. Since the learned Single
Judge has been pleased to hold affirmably that respondent No. 1, violated the
joint venture agreements either original or revised, only question remains for
us to decide is that “whether the appellants are entitled for recovery of
losses? on account of liquated damages emerging from
breach of contracts by respondent No. 1, as averted and urged on behalf of the
appellants.
16. In terms
of findings of the learned Single Judge the claim of yearly payment of USD
140,000.00 (as fixed amount) for two trawlers (70,000.00 each) culminating from
breach of Revised Contract stands proved. For refusal of liquated damages, the
learned Single Judge has considered the relevant terms and conditions of the
Revised Contract and concluded that for claiming damages of USD 50,000.00, the
appellant was required to file a proceeding in this Court. Admittedly the
present appeal is an out come of suit filed by the
appellant for recovery of damages. However, the learned Single Judge, while
dismissing the claim for liquidated damages, seems to be influenced by the
clause of the contract which provide that deleted respondent No. 3, was liable
to pay damages of USD 1,000,000.00 with whom the appellants had settled their
claim and consequently his name along with respondent No. 2, was deleted from
the proceedings and thus apart from yearly payment of USD 140,000.00 the
appellants are not entitled for any other amount on account of damages. In our
view, while granting decree to the appellants to the extent of USD 140,000.00,
the learned Single Judge entirely relied upon penalty clause (i) of the “Revised
Ocean Fishery Co-Operation Contract” dated 7th, August, 1998, which
reads as under:-
“And
whereas Syed Bashir Ahmed Zaidi, the authorized
representative of Party “B” under takes to pay US$ 1,20,000/- within stipulated
period himself on or before 31.09.1999. In case party “B’s” authorized
representative failed to pay the amount within the stipulated periods i.e.
31.08.1999 then the Party “A” have right to sue the Party “B” and its
authorized representative in the Court for the recovery of the above US$
1,20,000/- along with damages of US$ 50,000/- and the operation of two trawlers
on the licences of M/s Masoomi Enterprises Pakistan
(Pvt) Ltd, shall be stopped through Hon’ble High
Court and the two trawlers operating on the licence of M/s. Masoomi
Enterprises Pakistan (Pvt) Ltd, shall be get arrested through Hon’ble High Court Sindh by this clause of agreement”.
17. Paragraph
25 of the impugned judgment is of much significance to adjudicate this appeal
inasmuch for grant of liquidated damages as argued or otherwise. It reads as
under:-
“Adverting
to the claim of yearly payment of US$ 1,20,000 (one
hundred twenty thousand US Dollars). This payment term is unambiguous and agreed
by the Plaintiffs and Defendant No. 1 in two different Clauses (k and I) of the
said Revised Contract and it is also proved by the witnesses of Plaintiffs in
the evidence, inter alia, that the Subject Trawlers were handed over to some
other local company and not to Plaintiffs. Since the tenure of last Revised
Contract was one year, therefore, the Plaintiffs are entitled to be paid an
amount of US$ 120,000 (one hundred twenty thousand US Dollars) because US$
20,000 (twenty thousand US Dollars) has already been paid to Plaintiff……..”
18. In our
view, the evidence which was reckoned and considered cogent for grant of relief
for recovery of one chunk of amount, out of same evidence, cannot be
distinguished and discarded for liquidated damages emanating from the decreed
claim. Accordingly, the findings and decree to the extent of payment of US$
120,000/- is modified that appellants are also entitled for liquidated damages
to the tune of US$ 50,000/- to be paid and adjusted from remaining amount of
US$ 80,000/- still lying with the Nazir of this
Court. Admittedly, the proceedings have been subjected to long trial spanning
about 20 years, therefore, considering such aspect of
the matter and in the administration of justice, the appellants are also
entitled for the remaining amount of US $30,000/- as additional liquidated
damages lying with the Nazir of this Court.
19. However,
we must, at this stage, state that we have observed that pursuant to the order
of this Court, the Nazir had earlier encahsed the bank guarantee of USD 200,000/- after its
conversion into PKR and invested the same in the profit bearing scheme. An
amount of Rs.19,680,000/- equivalent to 120,000/- USD in compliance of decree dated
29th May 2020, has since been withdrawn by the appellants and
remaining amount of Rs.6,649,590/- is lying with Nazir
of this Court. The learned counsel for appellants accepted withdrawal of amount
in the conversion rate of USD, prevailing at the relevant time when deposit was
made, with profit. Therefore, the appellants are entitled to receive Rs.6,649,590/- along with profit.
20. Accordingly,
the appeal is allowed in the above terms, the Nazir
is directed to release the amount forthwith, after completing requisite
procedure.
JUDGE
JUDGE
.