HIGH COURT OF SINDH, KARACHI
Suit No.323 of 2007
Plaintiff : M/s. Friends Associate Builders &
Developers.
Defendants: Town Municipal Administration
Lyari Town, Karachi and another.
Date of hearing : 6.1.2012 and 16.03.2012.
Syed Muhammad Nehal Hashmi, Advocate for the plaintiff.
Nemo for the defendants.
Judgment
Muhammad Ali Mazhar, J.:- The plaintiff has filed this suit for recovery of money with the following prayer:
a) To direct the defendants to pay the outstanding bill/amount of Rs.65,39,412.67 (Rupees Sixty Five Lac Thirty Nine Thousand Four Hundred Twelve and Sixty Seven Paisas Only) against the total outstanding of Rs.69,27,190.17 in connection of supply of POL to the defendant No.1’s Lyari Town, Karachi as per agreement executed between the plaintiff and defendant No.1.
b) To pass an ad-interim order with direction to the Nazir of this Hon’ble Court to seize the account of defendant No.1 and take the amount of Rs.65,39,412.67 and handover the same to the plaintiff in the larger interest of justice.
c) Award the cost of the suit.
d) Any other relief(s) which this Hon’ble Court may deem fit and proper under the circumstances of the case.
2. The brief facts of the case as narrated in the plaint are that the plaintiff firm is engaged in a range of business including Builders/Developers, Petroleum Dealer, Civil Contractor etc. The plaintiff firm entered into an agreement with defendant No.1 on 06.10.2004 for supply of POL (petroleum, oil & lubricants) products to the vehicles, plants and units of the defendant No.1 as per their requirements.
3. The plaintiff’s firm performed its obligation with full satisfaction and never violated the terms and conditions of the agreement. The plaintiff always supplied the products as per requirement of the defendant No.1 as per agreement, however the payment was to be made on every fifteen days against the supplies but the defendant No.1 never cleared any bill within the stipulated period.
4. The last payment was made to the plaintiff by the defendant No.1 on 06.04.2006 in sum of Rs.5,00,000/- against the total outstanding of Rs.69,27,190.17 and still a sum of Rs.65,39,412.67 is outstanding against the defendant No.1.
5. It is further contended that due to non payment, the plaintiff suffered grave hardship and difficulties and owing to huge outstanding liability, it was unable to supply the POL to the defendant No.1. It is further averred that the defendant No.1 avoided to pay the pending bills despite repeated requests and demands and under the said circumstances, it was impossible for the plaintiff to continue the supply. The plaintiff served a legal notice to the defendant No.1 on 19.06.2006 but the defendant No.1 called upon the plaintiff to continue the supply. The plaintiff made best possible efforts to resolve the issue of outstanding dues and also sent a letter to the defendant No. 1 on 03.08.2006. The bills were passed by the Local Funds Audit Department (Pre-Audit) but the same were unnecessarily withheld and the defendants avoided to pay the outstanding amount. Keeping in view the above circumstances, the plaintiff served another legal notice to the defendant No.1 for termination of agreement on 5.10.2006 in view of condition No.9 of the agreement and also demanded the outstanding amount but the defendant No1 failed to reply.
6. The record shows that despite various opportunities, both the defendants failed to file any written statement. The diary sheet dated 31.8.2007 of Additional Registrar shows that both the defendants were served and granted four weeks time to file written statement. Since no written statement was filed within four weeks, therefore, the matter was placed in court on 10.12.2007 for orders, on which date Mr.Thawar Ali Khan, advocate appeared and sought time on the ground that no copy of plaint was supplied. Again on 31.3.2008, he made a request for time and on his request two weeks further time was allowed to file written statement, then the matter was fixed in court on 13.10.2008 and as a last chance again two weeks time was allowed for filing written statement. The order sheet dated 03.11.2008 shows that further two weeks time was allowed for filing written statement. Despite availing many opportunities, the defendants failed to file any written statement, therefore, the Additional Registrar debarred both the defendants on 16.12.2008 and the matter was fixed in the court for final disposal.
7. On 27.3.2009, while the suit was fixed for final disposal, again Mr.Thawar Ali Khan, advocate for the defendants requested for time to file written statement and in order to meet the ends of justice as a last chance defendants were directed to file written statement within two weeks with further directions that if they failed to do so, they will be debarred from filing the written statement. The suit was fixed for further orders in court on 4.5.2009, on which date Mr. Manzoor Ahmed, Advocate appeared for defendant No.2 and sought time for filing written statement and in the interest of justice again two weeks time was allowed to both the defendants with caution that failure to do so they will be debarred from filing the written statement. In the interest of justice various opportunities were given but the defendants failed to file written statements and last two directions dated 27.3.2009 and 4.5.2009 were sufficient to pronounce the judgment against the defendants in view of Order 8 Rule 10 C.P.C. On 12.10.2009 Mr.Thawar Ali Khan, Advocate appeared and submitted that the defendant No.2 has no concern with the dispute and the said defendant has been wrongly arrayed and on behalf of defendant No.2, he undertook that defendant No.2 does not propose to file any written statement, therefore, the defendant No.2 was also debarred from filing written statement and the matter was placed in court for final disposal.
8. On 15.9.2011, plaintiff filed affidavit in ex-parte proof and on the same date, he was cross-examined by the learned counsel for the defendant No.2. the learned single judge of this court reserved the judgment with an opportunity to the plaintiff’s counsel to file written submissions within three days. However, the matter was ordered to be fixed for re-hearing. On 30.11.2011, the learned Single Judge of this court raised certain queries and directed the learned counsel for the plaintiff to submit the statement and the matter was adjourned. The suit was fixed on 13.12.2011 and 20.12.2011 but could not proceed further. Finally it was fixed on 06.01.2012 on which date, the learned counsel for the plaintiff argued the whole matter again before me and also filed a statement along with a certificate issued by Accounts Officer, D.M.C. Karachi South showing the outstanding amount of the plaintiff.
9. The plaintiff through its duly authorized representative exhibited the documents as Exb.P-1/A to P-1/F. In the affidavit in ex-parte proof the representative of the plaintiff reiterated the same facts and also confirmed the contents of the plaint. He was cross examined by Mr.Ali Azam, Advocate for the defendant No.2 and during his cross examination, he admitted that his dispute is with the defendant No.1, but he made party to defendant No.2 because the defendant No.2 releases the funds to defendant No.1. He categorically admitted that the plaintiff has no claim directly against the defendant No.2.
10. At this juncture, I would like to refer to 1999 SCMR 900 (Rehmat Ali v. Additional District Judge, Multan and others) in which the hon’ble Supreme Court held that the words “the Court may proceed ex-parte and pass decree without recording evidence” in rule 6 (1) (a) as instead by Law Reforms Ordinance, 1972 come up for interpretation before this court in the case of Shamroz Khan and another v. Muhammad Amin and others (PLD 1978 SC 89) and Mr.Justice Dorab Patel observed that the words ‘and pass decree without recording evidence’ were inserted by the Law Reforms Ordinance, 1972. Before this Amendment the consistent practice of the Courts was to record evidence before decreeing a suit under this rule. The practice of recording evidence could lead to delays. But does this mean that the question was left to the discretion of the courts or does it mean as submitted that it was incumbent on courts to decree a suit without recording evidence. If it is correct, the courts would be compelled to decree patently time barred suits or suits which were patently dishonest or which contained absurd and exaggerated claims. Such an intention cannot lightly be attributed to the legislature now would we be justified in doing so because the amended rule now reads ‘………..the Court may proceed ex-parte and pass decree without recording evidence…..’ . This means that the court may proceed ex-parte and that it may pass a decree without recording evidence. The word ‘may’ here imports discretion and means may, not shall, therefore, when a court strikes off the defence of a defendant, it has further to decide in the exercise of discretion whether it should decree the claim against the defendant after recording evidence or without recording evidence, and like all discretion vested in the courts, this discretion must be exercised judicially. In the case of Rehmat Ali (supra), the honorable supreme court went on to hold that courts can pass ex-parte decree even without recording evidence as the pleadings are to be filed on oath on solemn affirmation. Nevertheless, the Superior Courts had always looked with disfavor, decrees granted against absentees, without consideration of available record or application of mind as amended Order IX, Rule 6, C.P.C. does not provide any arbitrary authority or blatant discretion toward decrees by closed eyes. Spirit of law demanded that whenever trial court did not find it necessary to examine evidence, reasons must be recorded for showing justification for deciding the claim without taking further proceedings and without recording evidence.
11. Order IX Rule 6 CPC empowers the Court to proceed ex-parte and pass the judgment even without recording of evidence. It is also well settled principle of law that Court of law is not expected to shut its eyes and mechanically pass the order and decree in favour of plaintiff. Such power also empowers the court to pass judgment and decree and to dismiss the suit as well. When a Court strikes off the defence of a defendant, it has further to decide in the exercise of discretion whether it should decree the claim against the defendant after recording evidence or without recording evidence, and like all discretion vested in the courts, this discretion must be exercised judicially. The plaintiff has to stand on its own legs to satisfy the conscious of court as to the existence of any right sufficiently or otherwise of evidence.
12. Keeping in view the aforesaid dictum, instead of outrightly decreeing the suit on the basis of affidavit in ex-parte proof, this court called the plaintiff’s witnesses in witness box and recorded evidence. The witness/representative of the plaintiff exhibited agreement dated 6th July, 2004 at Exh.P/1/A which shows that the defendant No.1 through its Municipal Officer/Nazim entered into an agreement with the plaintiff for supply of petroleum, oil and lubricants products for the Town Municipal Administration, Lyari Karachi. In paragraph-9 of the agreement, it is clearly mentioned that in case any authority desires to forego or dissolve the agreement, same can be done on one month advance notice to the other. The plaintiff also exhibited last cheque at Exh.P/1/B received from the defendant No.1 in the sum of Rs. 5,00,000/-. The legal notice tendered on 19.6.2006 to the defendant No.1 is exhibited as P/1/C which shows that a demand in the sum of Rs.65,39,412.67 was said to be outstanding and the defendant No.1 was called upon to settle the outstanding dues within seven days. This legal notice was replied vide Exh.P/1/D dated 24.6.2006, in which learned Advocate for the defendant No.1 admitted execution of agreement. However, it was stated that the plaintiff stopped the supply of diesel to the Town Administration without any prior notice and in a meeting it was agreed that whenever funds will be available to the Town Administration dues shall be paid. It was further stated that a sum of Rs.5,00,000/- was paid. It was further averred in reply that the plaintiff is bound in terms of clauses 7 to 10 of the agreement to supply diesel and in the event of cancellation one month prior notice is required which the plaintiff failed to serve, therefore, defendant No.1 laid much emphasis that the agreement is still in force. Though many reservations were made in the reply and the request was also made to the plaintiff to start the supply of aforesaid products to the vehicles of the Town Administration immediately, however, the fact remains that the counsel on behalf of the defendant No.1 undertook that as soon as Town Administration will receive the funds, dues of the plaintiff will be cleared. In order to show the privity of contract, the plaintiff also exhibited various bills and cheques received for the previous payments from the defendant No.1 including the photo stat copies of different cheques.
13. As I said earlier that on the basis of documents exhibited in court on 5.9.2011, judgment was reserved by learned Single Judge, however, mater was fixed in court on 30.11.2011 for rehearing and final disposal and certain queries were raised with regard to the documents that have been produced in evidence by the plaintiff and certain clarifications were sought in that regard. Directions were issued to the learned counsel for the plaintiff to submit statement. On 6.1.2012, the learned counsel submitted statement dated 2.1.2012 issued by the Accounts Officer, DMC (south), Karachi which was issued to proprietor of the plaintiff M. Feroze Khan who in writing requested to the Administrator, District Municipal Corporation (south), Karachi to provide complete details of liabilities on account of POL supplied by the plaintiff during year 2004-06. Since these documents were not exhibited, therefore, vide order dated 12.3.2012 direction were issued to fix suit in court for recording further evidence on 16.3.2012 with intimation notice to the plaintiff and defendants. Accordingly on 16.3.2012, plaintiff appeared in witness box and exhibited two more documents i.e. his letter written to the Administrator, District Municipal Administration (south), Karachi and month wise complete detail of pending bills of plaintiff duly signed by Accounts Officer, DMC (south) Karachi dated 2.1.2012 as exhibits Exh.P/1/G and P/1/H. Despite issuing notice to the defendants No. 1 & 2 nobody appeared to cross-examine the plaintiff. When the plaintiff first time appeared in witness box on 15.9.2011, he was cross-examined by the counsel for the defendant No.2 and during cross-examination, plaintiff admitted his dispute with defendant No.1. Witness also admitted that plaintiff has no claim directly against the defendant No.2. It is unequivocally transpires that there is no privity of contract between the plaintiff and defendant No.2 and this fact has also been admitted by the plaintiff’s representative during his cross-examination which irresistibly shows that claim of the plaintiff is confined only against the defendant No.1 who entered into an agreement and availed its benefits.
14. Despite affording many opportunities to the defendants, none chosen to file any written statement though they were provided repeated chances but to no avail and ultimately when no option was left with the court, they were debarred and declared ex-parte. The reckless and negligent conduct of the defendants shows that either they never wanted to defend suit for some ulterior motives or on the contrary, they had no defence to plead and this was the reason perhaps to protract the proceedings for long time on different pretexts and avoid to file written statement. Even on the last date also when the plaintiff was called upon to exhibit two more documents including statements of accounts, a notice was issued to the defendants No. 1 & 2 which was served upon the defendant No.2. However, clerk of defendant No.1 Mushtaque refused to receive court notice from Bailiff on the ground that Muhammad Raees is not present who will personally receive notice which shows their callous conduct while responding court notices.
15. The last statement exhibited in court clearly shows that outstanding dues of plaintiff in the sum of Rs.65,36,912/- has been admitted by DMC (south), Karachi on behalf of the defendant No.1 which is now under the control and supervision of Administrator, District Municipal Corporation (south), Karachi by virtue of the Sindh (Repeal of the Sindh Local Government Ordinance 2001 and Revival of the Sindh Local Government Ordinance 1979) Act, 2011 promulgated on 15th July 2011 with immediate effect. However under Section (4) of the above Act, it is clearly provided that notwithstanding the repeal of 2001 Ordinance, all orders made including rules, bye-laws, regulations and notifications and other legal instruments, proceedings taken, appointments made, acts done by any authority or any person which were made, taken or done, or purported to have been made, taken or done thereunder, between the sixth day of August 2001 and the date on which this Act comes into force shall continue to remain in force until altered or amended by the Chief Minister or any authority or officer authorized by him. It is clear from the aforesaid provision of the Sindh (Repeal of the Sindh Local Government Ordinance 2001 and Revival of the Sindh Local Government Ordinance 1979) Act, 2011 that the agreement executed between the plaintiff and the defendant No.1 on 6th October 2004 is saved for all intent and purposes and never said to have been altered or amended and since the succession came into effect by virtue of statute and all previous actions and legal instruments are saved hence the succeeding authority is not required to be impleaded in suit separately and it is responsible for discharging all liabilities of its predecessor in the same manner as entitled to enjoy, avail and seek all benefits, rights and privileges of its predecessor under repealed law by virtue of Section (4) of Sindh (Repeal of the Sindh Local Government Ordinance 2001 and Revival of the Sindh Local Government Ordinance 1979) Act, 2011.
16. For the foregoing reasons, the suit of the plaintiff is decreed to the extent of an admitted liability in the sum of Rs.65,36,912/-(Rupees sixty five lacs, thirty six thousands, nine hundred & twelve only) with costs only against the defendant No.1. This liability of outstanding dues will be discharged by successor-in-interest of the defendant No.1 i.e District Municipal Corporation (South), Karachi in view of the last statement of accounts issued by them on 2.1.2012
Karachi:-
Dated 12.5.2012 Judge