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Petitioner: Nazeer Ahmed & another VS Respondent: Karachi Port Trust & others
Court Name: Sindh High Court Judge(s): Arshad Hussain Khan Title: Nazeer Ahmed & another vs Karachi Port Trust & others Case No.: Suit No.882 OF 2002 Date of Judgment:2018-10-11 Reported As: 2019 YLR 1985, 2018 SHC 1032 Result: N/A
Judgment Arshad Hussain Khan J. The present suit was filed on 23.8.2002 by the plaintif fs against the defendants for declaration, permanent injunction and damages of Rs.1,93,31,000/- with the following prayers: ?1. Declaration to the effect that the plaintiffs are the lawful owner of the sunken vessel and are entitled to salvage/cutting/break and dismantle the remaining portion of the wrecked vessel known as M.V. Naran grounded at Baba Bhit Pool between Kamari and Manora. 2. Declare that the defendant No.1 and 2 illegally , unlawfully and without any justification and with malafide intention did not grant permission for further breaking and removing the scrapes to the plaintif fs. 3. Declare that the defendant No.1 and 2 sold out the sunken vessel M.V. Naran on Peanut Price with malafide intention to cause the losses to the plaintif fs. The alleged proceeding tender shall be declared as null and void. 4. Permanent injunction restraining the defendants jointly and severally their emplo yees, servant/servants, workers, labours, agents, authorities and person/persons from entering in sunken vessel M.V. Naran grounded at Baba Bhit Pool for salvaging/breaking/cutting and removing the scrapes from the site. 5. Grant decree sum of Rs.1,93,31,000/- towards the damages as per the market price of the sunken vessel. 6. Cost of the suit. 2. Briefly the facts of the present case, as averred in the plaint, are that plaintiffs are owners of the wrecked vessel namely M.V. NARAN (subject Vessel) and, inter alia, engaged in the business of ship breaking and salvaging. It is also averred that M.V. KASHMIR Vessel known as M.V. NARAN was the subject matter of Suit No.387/1988 filed before this court wherein the subject vessel, sunken and grounded at Baba Bhit Manora, was auctioned and purchased by M/s. Iqbal Trading Company against the consideration of Rs.35,00,000/- and the possession of the subject Vessel was handed over to M/s. Iqbal Trading Company by virtue of bill of sale and the court order. The said auction purchaser (M/s. Iqbal Trading Company) signed and executed special power of attorney in favour of plaintiffs empowering them to deal the matter with the KPT. It is also averred that in the year 1996 the auction purchaser/
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executants of power of attorney sold out the subject vessel to the plaintiffs for consideration. The plaintiffs after having purchased the subject vessel paid additional duties and wharfage to KPT besides custom duties and other taxes. Further averred that the plaintiffs, being the attorney of the auction purchaser of subject vessel, when approached to defendants-KPT for grant of permission to salvage /break/dismantle and remove the scrap of the subject vessel from the port area to the market upon payment of dues and taxes, the KPT granted said permission vide its letter dated 12.7.1995 and 3.10.1995 and in pursuance thereof the plaintiffs had continued the wreckage work and the salvage quantity was being transported by the plaintiffs under the proper custom escort upon payment of custom duties, wharfages and other charges to the KPT. It is also averred that, under the agreed terms and conditions, the plaintiffs paid sum of Rs.2,00,000/- as a security deposit to the KPT. It is also averred that for the purposes of dismantling/breaking of the sunken subject vessel, the plaintiffs installed machineries, which machineries are laying at the site and the plaintiffs have been denied access to the same by KPT. Furthermore, the said machineries are now being utilized by defendant No.3 (new auction purchaser of the subject vessel), illegally and without any justification, at the instructions of defendants-KPT and as such causing losses to the plaintiffs. Since the plaintiffs have been denied access to the machineries lying at site, therefore, actual losses could not be ascertained. However, the defendants are jointly and severally liable to pay a sum of Rs.38,15,000/- to the plaintiffs being the cost of the machineries lying at the site. It is also averred that first permission, granted to the plaintiffs, was valid up to 31.3.1996 and during that period the plaintiffs had been breaking and salvaging the subject vessel and the scrapes were being removed against the payments to the KPT on the basis of weight of the scrape material, however, after the expiry of first permission, the defendants-KPT, instead of extending the time in writing, verbally allowed the plaintiffs to carryout breaking, salvaging and removal the scrap material without any objection of whatsoever nature. After expiry of the period, the plaintiffs was allowed to mobilize the labour and equipment to commence the salvaging, breaking and removal of the scrape up to 22.3.1999. Thereafter, the defendants-KPT did not allow the plaintiffs to continue the salvage of the remaining vessel, even they seized the scrape material which not only caused monitory losses but also caused the mental distress, discomfort to the plaintiffs. The plaintiffs on account of the non-cooperative attitude of defendant No.2 continued to make request for grant of permission in writing to further salvage the remaining portion of the subject vessel, however, instead of granting permission, the defendants-KPT chooses to delay the matter on one pretext or the other. It is also averred that the Defendants-KPT without any justification and lawful excuse got a notice published in daily Dawn dated 20.10.2001 whereby bids were invited for removal of the subject vessel, whereas ownership whereof was vested with plaintiffs. The plaintiffs upon having knowledge of the said public notice, lodged a written protest with the defendants-KPT wherein the plaintiffs also assured that they will clear all payments of KPT and clear the site as well. In pursuance thereof, the KPT authorities though called upon the plaintiffs and obtained undertaking in the month of June, 2002, however, despite assurance and commitment, they did not issue the permission to start the salvaging of remaining portion of the subject vessel. It is also averred that defendants-KPT without any justification and lawful excuse sold out the plaintiffs subject vessel to defendant No.3 against the meager amount of Rs.1.1 million knowingly that the value of the remaining un-salvaged vessel weighing 1293 MT, was of Rs.1,55,16,000/- at the rate of Rs.12,000/- per MT. The above said fact came into the knowledge of the plaintif fs on 2.8.2002, where upon the plaintif fs immediately approached to the defendants-KPT and raised protest, however , failed to get any positive response. Consequently , 06.08.2002, the plaintif fs served legal notice upon the defendants which was never replied by the defendants. The plaintif fs, thereafte r, having no other option filed present suit. 3. Upon notice of the present case defendants No.1 and 2 (KPT) filed their joint written statement whereas the defendant No.3 failed to file any written statement consequently on 4.3.2003 the defendant No.3 was debarred from filing written statement. 4. Defendants-KPT in their written statement while raising preliminary objections regarding maintainability of the suit, has denied the claim and allegations leveled in the plaint. It has also been stated that the plaintiffs were only acting as the attorney of the auction purchaser namely M/s. Iqbal Trading Company. The plaintiffs being attorney of the auction purchaser on 13.09.1995 had executed a bond of undertaking, whereby it was, inter alia,
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undertaken by the plaintiffs that they will complete the dismantling/salvaging work of the subject vessel in all respect and clear wreck (breaking site) by 31.03.1996. However, the plaintiffs failed to fulfill their obligations as per the said undertaking and further despite repeated requests they also failed to pay the dues as per the port tariff which was accumulated to the extent of Rs.481,780.08 up to 31.1.2001. Consequently, the defendants had to auction the subject vessel which was subsequently purchased by defendant No.3. It has also been denied that defendants have brought any machinery at the site. Further the plaintiffs never submitted list of equipment/machineries with the Engineering Department of KPT. Further stated that the present suit has been filed with malafide intention and the plaintiffs are not entitled to any of the relieves claimed in the suit. 5. Out of the pleadings following issues were framed by the court on 24.8.2003:- 1. Whether the suit is not maintainable in view of the non-service of notice under Section 87 of the KPT Act? 2. Whether the defendants were justified in calling for fresh bid of auction in the year 1998? 3. Whether the suit is time barred? 4. Whether there was any breach of contract by the plaintif f? 5. Whether the plaintif f is entitled to any damages? 6. To what relief the plaintif f is entitled to? 7. What should the decree be? From the perusal of the above issues, it appears that due to some typographical error the year of auction has been written as 1998 instead of 2002. Therefore, the issue No.2 may read as follows: "2. Whether the defendants were justified in calling for fresh bid of auction in the year 2002? ? 6. After settlement of issues, at the joint request, the commissioner for recording evidence was appointed, who after completing the commission submitted his report. 7. Record reveals that the plaintif fs in support of their case have examined two witnesses PW-1 namely Mehboob Ali as Ex.1 and PW-2 Muhammad Zafer Nazir as Ex.14, whereas the defendants examined witness DW-1 namely Muhammad Azam Khan, Assistant KPT . 8. The plaintif fs filed af fidavit in evidence of PW -1 Mehboob Ali as Ex --2, who produced following documents:- 1. Agreement of Sale dated 9.6.1996 Ex.3 2. Tax payment dated 18.3.1996 Ex.4 3. Letter dated 21.8.1995 Ex.5 4. Letter dated 15.1 1.2001 Ex.6 5. Letter dated 19.1 1.2001 Ex.7 6. Letter dated 4.12.2001 Ex.8 7. Letter dated 1 1.12.2001 Ex.9 8. Publication dated 30.10.2001 Ex.10 9. Publication dated 7.5.2002 Ex.1 1 10. Letter dated 6.1 1.2001 Ex.12 11. Legal Notice dated 6.8.2002 Ex.13 12. TCS receipt Ex.14 9. The said witness was subsequently cross examined by the advocate for defendants which for the sake ready reference is reproduced as under:- "I am plaintiff No.2 in the present suit. The plaintiff No.1 will be examined if necessary. It is correct that the plaintiff has not given any notice prior to the filing of the present suit, to the KPT under section 87 of the KPT Act. I see para 4 of my affidavit in evidence and say that I am the owner of Wrecked vessel vide agreement Ex.3. I had informed the KPT and country about the purchase of the vessel. I rely on my letter dated 21.8.95 Ex.5 and letter dated 6.11.2001 Ex.12. It is correct that the plaintiff had executed an indemnity bond on 13.9.95 with KPT. I was witness to this bond. Mr. Nazeer Ahmed, the plaintiff No.1 has signed this bond as attorney of M/s. Iqbal Trading, who purchased the subject vessel from High Court in auction. It is correct that on 13.9.1995, the plaintiff No.1 signed the bond as attorney of M/s. Iqbal Trading as at that time the plaintiff was not the owner of the vessel. It is correct that the
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plaintiff has not informed the KPT and customs about the ownership of the vessel between 21.8.95 to 6.11.2001. It is correct that the letter dated 6.11.2001 Ex.12 was written by the plaintiff after the publication of tender of the vessel dated 30.10.2001 Ex.10. It is not correct to suggest that the KPT published the tender when the attorney and the owner of the vessel failed to pay the dues of KPT. It is incorrect to suggest that there was KPT dues against the owner of the vessel. We purchased the vessel at Rs.55 lac vide agreement Ex.5. When the plaintiff purchased the vessel, there was not cutting of work and it was 100%. The payment of the sale price was made in cash. The cash amount was lying with the plaintiff and not drawn from any bank. We are doing the business of import export and general trade. We also pay the Income tax. It is correct that the plaintiff have not filed the copy of the income tax return to show that the plaintiff had the money at that time to pay the same to the seller. It is correct to suggest that M/s. Iqbal Trading Company is not a party to this suit. It is not correct to suggest that the agreement Ex.5 is a fictitious document. It is not correct to suggest that the plaintiff No.1 as attorney of M/s. Iqbal Trading has not complied with the term and condition of the bond. I see para 13 of my affidavit in evidence and say that the amount of Rs.2 lacs was deposited by me as plaintiff No.2. At present I cannot produce the receipt of payment of Rs.2 lacs. It is correct that only Rs.1 lac was deposited by the plaintiff No.1 as attorney for M/s. Iqbal Trading Company. I see para 14 of my affidavit in evidence and say that it is correct that the plaintiff have not provided the list of machineries to the customs and KPT. The plaintiff had the verbal permission only from KPT for bringing the machineries by the plaintiff at KPT site. The verbal permission was given to the plaintiff by Deputy Conservator KPT. The name of D.C in 1996 may be Mr. Hassan. The machineries were brought to the KPT site periodically. It is not correct to suggest that the machineries were not brought to KPT site. I see para 15 of my affidavit in evidence and say that it is incorrect to suggest that the plaintif f has not paid to the KPT the dues in respect of wrecks. I see para 17 of my affidavit in evidence and say it is not correct to suggest that the KPT had not given the verbal permission for taking the wrecked from the KPT site. I see para 18 of my affidavit in evidence and say that my statement in respect of KPT dues is correct. It is not correct to suggest that my earlier statement that there was no KPT dues in not correct. Voluntarily states that the plaintiff had the security deposit amounts with the KPT. It is not correct to suggest that there is only Rs. One lac as security deposit with KPT. The plaintiff had deposited from time to time with to time with KPT and at present these amounts might be about Rs.7 lacs. I have not filed any documents of deposit of above amounts with KPT. I see para 19 of my af fidavit in evidence and say that the plaintif fs have not participated in the bids. I see para 21 of my af fidavit in evidence and say that it is not correct that my statement in this para is false. It is incorrect to suggest that the plaintif f have filed the false suit and are not entitled to the prayers made in the suit.? [Emphasis supplied] 10. The second witness (PW-2) has also filed his affidavit in evidence as Ex-15 and he was cross examined by learned advocate for the defendants KPT , which for the sake of ready reference is reproduced as under:- I am giving evidence at the request of Mr. Nazeer Ahmed and Mehmood the plaintif f No.1 & 2. The plaintif f is not related to me. The plaintif f No.1 is related to me. I am doing my work of contract at different places. At present I am working a Gaddani Beach. I am doing my own business. I see para 3 of my affidavit in evidence and say that there is typing mistake, the word plaintif f, may be read as defendant and the defendant as plaintif f. I was engaged to supervise the breaking of the vessel by the plaintif f. It is not necessary to obtain the pass to go at the site of KPT . It is not within my knowledge as to whether the plaintiff had given any list of person to KPT who were working at site. There were several other persons working on the vessel besides me. I had not given any list to KPT of persons working with me at site directly. I was engaged by the plaintiff on contract basis. The contract was oral. It is incorrect to suggest that I had no contract with the plaintiff No.1 nor I was present at site. I see para 4 of my affidavit in evidence and say that I was informed by the plain tiff that the machineries at site belongs to them. I was not informed by any other person about the ownership of the machineries.
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I see para 5 & 6 of my affidavit in evidence and say that the facts stated in this para was informed to me by the plaintiff. I see para 7 of my affidavit in evidence and say that in the beginning the plaintiff had the written permission from KPT which I had also seen, but subsequently I did not see any written permission with the plaintiff. It is incorrect to suggest that the plaintiff had no written permission in the beginning. I was informed by the plaintiff that there are KPT dues against them. I see para 8 to 13 and say that the facts statement in these paras were informed by the plaintiff to me. It is not correct to suggest that I have no personal knowledge and whatever stated by me in my affidavit in evidence is at the instance of plaintif f. I see para 10 of my affidavit in evidence and say that since I have taken the contract of breaking from the plaintiff, therefore, I had the knowledge of the figures mentioned in this para. I have mention the rate previously at that time. It is correct that I have not filed the document to show the previous rates. I have no knowledge as to what has been stated by the plaintif f No.2 in para 21 of his affidavit in evidence. It is not correct to suggest that my affidavit in evidence in repetition of affidavit in evidence filed by the plaintif f No.2. I have no knowledge about the execution of bond by plaintif f with KPT . I have no knowledge as to whether the plaintif f had supplied the list of machineries to KPT. I have no knowledge about the total dues of KPT against the plaintif f.? [Emphasis supplied] 11. After completion of the evidence of the plaintif fs' side, the defendants KPT filed affidavit in evidence of its witness (DW .1) namely Muhammad Azam Khan as Ex-D and he produced following documents:- 1. Bond of undertaking dated 13.9.1995 Ex.D/1 2. Permission Letter by KPT to Plaintif f dated 3.10.1995. Ex.D/2 3. Letter addressed by plaintif fs as attorney of M/s. Iqbal Trading Company to KPT dated 30.3.1996. Ex.D/3 4. Letter addressed by Deputy Conservator KPT to Nazeer Ahmed dated 3.6.1996. Ex.D/4 5. Letter to Deputy Conservator By Chief Accounts Of ficer dated 13.6.1997. Ex.D/5 6. Memorandum issued by ABL showing reasons of dishonor of the cheque of the plaintif f dated 10.6.1997. Ex.D/5-A 7. Dishonoured cheque of Rs.50,000/-. Ex.D/5-B 8. Letter addressed by Deputy Cons ervator KPT to Nazeer Ahmed along with delivery receipt dated 24.12.1997. Ex.D/6 9. Letter addressed by Deputy Cons ervator KPT to Nazeer Ahmed along with delivery receipt dated 22.1.1998. Ex.D/7 10. Letter addressed by Mahboob Impex to Deputy Conservator dated 16.2.1998 Ex.D/8 11. Letter addressed by Mehboob Impex to Deputy Conservator dated 16.2.1998. Ex.D/9 12. Letter addressed by Deputy Conservator KPT to Nazeer Ahmed dated 23.2.1998 Ex.D/10 13. Letter addressed by Deputy Conservator KPT to Nazeer Ahmed along with delivery receipt dated 26.3.1998. Ex.D/1 1 14. Letter addressed by Deputy Conservator KPT to Nazeer Ahmed along with delivery receipt dated 29.8.1998 Ex.D/12 15. Letter addressed by Deputy Conservator KPT to Nazeer Ahmed along with delivery receipt dated 26.9.1998. Ex.D/13 16. Letter addressed by Chief Accounts Of ficer KPT to Deputy Conservator KPT dated 4.9.1998. Ex.D/14 17. Letter addressed by Enquiry Of ficer to Traffic Manager KPT dated 10.8.2000. Ex.D/14-A 18. Letter addressed by Deputy Conservator KPT to Nazeer Ahmed dated 1 1.8.2000 A/w Delivery slip. Ex.D/15 19. Letter addressed by Deputy Conservator KPT to Nazeer Ahmed dated 26.8.2000. Ex.D/16 20. Letter addressed by Enquiry Of ficer to Deputy Conservator dated 22.8.2000. Ex.D/16-A 21. Letter addressed by Deputy Conservator KPT to Mehboob Impex dated 12.10.2000. Ex.D/17 22. Letter addressed by Deputy Conservator KPT to Mehboob Impex dated 12.10.2000. Ex.D/17-A
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23. Letter addressed by Deputy Conservator KPT to Mehboob Impex dated 6.1 1.2000. Ex.D/18 24. Letter addressed by Deputy Conservator KPT to Mehboob Impex dated 17.1.2001 Ex.D/19 25. Letter addressed by Chief Accounts Of ficer to Deputy Conservator KPT dated 17.2.2001. Ex.D/20 26. Letter addressed by Deputy Conservator KPT to Mehboob Ali dated 4.12.2001. Ex.D/21 27. Extract from the minutes of the procee dings of the meeting of the Board of Trustees of the Port of Karachi held on 11.7.2002. Ex.D/22 28. Public notice of KPT for inviting removal of sunken wreck published in Daily DA WN dated 7.5.2002. Ex.D/23 29. Authority letter in favour of Muhammad Azam Khan, Assistant Deputy Conservator's Department of KPT to appear and give evidence on behalf of KPT . Ex.D/24 12. The said witness (DW.1) was subsequently cross examined by the advocate for plaintiff which for the sake of ready reference is reproduced as under:- ? I say that the suit is not maintainable as advised by my advocate. I do not know personally the period of lifting but it is mentioned in the agreement. The period is mentioned in para 10 of the Bond Ex.D/1. It is correct that the plaintiff did not clear the wreck up to 31.3.1996. The period after 31.3.1996 was not extended by the defendants. It is correct that even after 31.3.96 the plaintiff continued the breaking of the ship and removed the wrecks. It is correct that the plaintiff was not served with notice of cancellation by the defendant after 31.3.96. Voluntarily states that the plaintiff used to request verbally for extension and the defendant used to allowed them to lift the wrecks. It is correct that the ship M.V. Narain was purchased by M/s. Iqbal Trading Co., Karachi from court auction. According to our record Mr. Nazir Ahmed was their attorney. The bond is signed by Mr. Nazir Ahmed. The defendants used to correspond with M/s. Nazir Ahmed C/O Mehboob Impex. The KPT had received the cheque from Nazir Ahmed. I see letter dated 16.2.1998 Ex.D/9 and say that this letter was received by the KPT. Q. It is correct that after the property is sold by the KPT it does not remain their property? A. It depends upon the terms and condition of sale. It is correct that after sale, so long as the ship remains in the KPT area, the KPT is entitled to charge the rent. The defendant vide its letter dated 17.1.2001 Ex.D/19 and Ex.D/20 Ex.D/21 informed the plaintif f the amounts of rent due for the period the ship remained in the KPT area. It is correct that the defendant vide Ex.D/19 informed the plaintif f the amount of Rs.4,67,964/- due against the plaintif f up to 31.12.2000. I cannot say as to what was the amount lying with KPT as security deposit of the plaintif f. I cannot say as to whether the plaintif f had deposited Rs. 2 lacs with KPT or not as mentioned in Ex.D/1. I see Ex.D/23 and say that there is no mention in this publication that the sale is being made on account of default of payment made by the plaintif f. It is correct that when the wrecks are shifted from KPT-area, they are liable to pay the customs duty and wharfage. The ship, after the publication for auction was sold out to M/s. Mehran Associates. It is correct that in the publication no details are mentioned. Voluntarily states that it was sold "as is where is" basis. I see the letter dated 22.5.2002 at page 24 of Ex.D/22 and say that the Mehran Associates had mentioned the list of machineries for lifting the wrecks. It is correct that when any machines is broug ht to the port area or removed from gate, an entry is made in our record. It is not within my knowledge the details of machines brought by the plaintif f. I have no knowledge as to whether the plaintif f has removed his machines or not. I see para 14 & 15 of the written statement and say that the statement made therein is correct. It is not within my knowledge as to whether the new purchaser has lifted the entire wreck of the ship or not. It is correct that some wreck are still at site. It is correct that during the "monsson" season it is difficult to make the underwater cutting of the wreck. The ship was sold at Rs.11,00000/- vide Ex.D/22 page (20). According to my knowledge the purchaser has paid the entire purchase money . According to my information the new purchaser has been declared as defaulter . It is correct that the remaining part of the wreck has not yet been sold at any person. Voluntarily states that there are several wrecks in the harbor and the KPT is planning to auction all at a time the wrecks. The sale has not yet been finalized. It is correct that the KPT did not call upon the plaintif f to receive back his security deposits as the plaintif f did not make any application for the withdrawal of the same. Since the plaintif f has been declared as a defaulter , his…
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