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Petitioner: PAKISTAN DEFENCE OFFICERS HOUSING AUTHORITY VS Respondent: ABDUR REHMAN and JUDGMENT
Court Name: Sindh High Court Judge(s): Kamal Mansur Alam Title:PAKISTAN DEFENCE OFFICERS HOUSING AUTHORITY vs ABDUR REHMAN and
JUDGMENT
Reported As: 1993 MLD 104 Result: Suit dismissed Judgment JUDGMENT ' This suit has been filed by the plaintiff Pakistan Defence Officers Housing Authority, established under President Order 7 of 1980 and being the successors of the Pakistan Defence Officers Housing Society, against the defendants under Order 37, C.P.C. for the recovery of Rs,3,71,728 being the amount of promissory note dated 29-6-1981 executed by defendant No,1, Abdul Rahman. The defendant was granted unconditional leave to appear and defend the suit on 17-11-1987. ' The facts of the case are that the Pakistan Defence Officers Housing Society, the predecessors of the plaintiff appointed the defendant No,2, a proprietaryship concern of which the defendant No,1 is the proprietor, its transport contractor on 29-10-1975 for transporting portland and sulphur resistant cement from the factory at Karachi and Rohri, for the plaintiffs projects. The plaintiff advanced two mobilisation advances of Rs,30,000 and Rs,70,000 to the defendant on 30-10-1975 and 2-12-1975 respectively which were to be recovered from the running bills of the defendant. The plaintiff also advanced to the defendant a sum of Rs,2,60,000 for the purchase of Trucks so as to augment their transport capability. This advance was made on 22-3-1976. A further advance of Rs,2,24,000 is said to have been made by the plaintiff to the defendants for the procurement of cement for the Sea View Project of the plaintiff. It is claimed by the plaintiff, but denied by the defendants, that after about a year the performance of the defendant deteriorated and they could not honour their commitments with the result that approximately an amount of Rs,4 lacs became due from the defendants to the plaintiff. In consequence of subsequent discussions' between the parties the defendants furnished an Insurance Bond dated 21-5-1978 for Rs,3,50,000 from Pioneer Insurance Company Ltd. Admittedly the transport agreement between the parties was terminated
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by the plaintiff in early December 1978. After the termination of the arrangement the plaintiff called upon the defendants to clear the outstanding and on their failure, it required the Pioneer Insurance Co. Ltd., to pay the insurance bond amount. On defendants' failure to pay the outstanding amount the plaintiff by its letter dated 24-3-1981 (Exh.5/16) reported the matter to the Martial Law Authorities. In pursuance of the plaintiff's complaint the Martial Law Authorities called the defendant No,1 and in the course of the proceedings before the Martial Law Authorities a promissory note dated 29-6 1981 for Rs,3,71,728 was executed by the defendant No,1. This promissory note was attested by one Major Muhammad Aziz Khan, attached to Headquarters, D.M.LA., Sector 1. ' No payment on the promissory note having been made the plaintiff once again approached the Martial Law Authorities, in 1984. Admittedly the defendant was again called by the Martial Law Authorities and according to him he was required to execute another promissory note as the limitation of the earlier promissory note was due to expire. But before executing the second promissory note, he wrote a letter dated 12-5-1984 (Exh.5/18) to the D.M.LA. bringing the facts of the case to his knowledge and thereupon the case was dropped by the Martial Law Authorities. The amount said to be outstanding against the defendant on the promissory note having not been paid the present suit was filed by the plaintiff for its recovery. ' The following issues were framed in the suit out of the pleadings of the parties:-- "(1) Whether the defendants are liable to make good the promise for payment of Rs,3,71,728 after having admitted the same through Promissory Note executed on 29th January 1981? (2) Whether any pressure was used on the defendants by the plaintiff for, execution of Promissory Note or they had received the consideration from the plaintiff for the value thereof? (3) Whether the letter dated 12-5-1984 of the defendants to the President of Pakistan and Administrator Pakistan Defence Officers Housing Authority admitting to have executed the Promissory Note for Rs,3,71,728 in favour of plaintiff tantamounts to admission of a liability afresh? (4) Whether the defendants' letter/correspondance with the plaintiff regarding their liability justifies that the Promissory Note was executed for valid grounds? (5) Whether the mobilization Bond arranged by defendants with the Pioneer Insurance Company Limited proves the liability to the plaintiff beyond any iota of doubt? (6) What should the decree be?" ' In the written statement there is a specific plea of limitation but no such issue was framed although issue No,3 would indirectly seem to cover the question of limitation also. Accordingly at the time of the arguments, the following additional issue was framed by consent of the plaintiffs counsel and the defendant No,1 as issue No,1(a):-- "1(a) Whether the claim of the plaintiff is barred by limitation? ' The counsel and the defendant No,1 agreed that the evidence already on record would cover the additional issue and no further evidence was required. ' As issues Nos.1(a), 2 and 3 are inter-dependant Mr. Nazar Hussain Dhoon, the learned counsel for the plaintiff made submissions on these issues first. As these issues go to the very root of the case, I too propose to take up these first. ' The case of the plaintiff is that the defendants were paid certain advances in respect of mobilization advance, purchase of trucks, supply of cement etc. and to secure these advances, which added up to Rs,3,50,000 the defendants furnished an Insurance Bond dated 21-5-1978 (Exh.5/5) for Rs,3,50,000 but when called upon to pay neither the defendants nor the Insurance Company paid the same. Subsequently, the plaintiff approached the Martial Law Authorities by their letter dated 24-3-1981 (Exh.5/16) and in response to this letter the Martial Law Authorities intervened and called the defendant No,1. According to the plaintiffs counsel it was during the proceedings before the Martial Law Authorities that the defendant No,1 through the good offices of the Martial Law Authorities executed the promissory note dated 29-6-1981 for Rs,3,71,728 (Exh.5/18)
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which was the amount then outstanding against the defendant. His submission was that by the aforesaid promissory note the defendants promised to pay what was due against them at that time and it was therefore valid and enforceable. He denied that the said promissory note was obtained by the Martial Law Authorities by coercion or under any kind of threat. His submission was that the Martial Law Authorities had power to intervene in the matter and he placed reliance on M.L.O. 10 dated 14-7-1977 issued by the Martial Law Administrator, Zone 'C'. The operative part of that M.L.O. reads:-- "Whoever fails to pay any outstanding taxes, or any other dues payable to Government or any local body or authority by 15th August, 1977, shall be tried by Military Courts. This order shall not be applicable to those cases where the matter is sub judice in any Court or under consideration before any competent authority on the date of issue of this Order." ' The counsel admitted that the plaintiff got the promissory note, Exh.5/17, attested by a Notary Public in the absence of the plaintiff. He denied that the promissory note was obtained under coercion or pressure by the Martial Law Authorities and submitted that defendants' allegation in this regard was unsupported by any evidence. On the question of limitation his contention was that the liability under the promissory note (Exh.5/17) was subsequently acknowledged by the defendant No,1 in his letter dated 12-5 1984, which is Ex.5/18 and as this acknowledgement of liability was made within three years of the execution of the promissory note dated 29-6-1981 (Exh.5/17), a fresh period of limitation commenced from the date of Exh.5/18 i.e. 12-5-1984 and computed from that date the present suit filed on 25-10-1986 was well within time. He argued that defendant's letter dated 12-5-1984 (Exh.5/18) constituted acknowledgement within the meaning of section 19 of the Limitation Act notwithstanding that in the said letter the amount of liability was not expressly mentioned, for, the defendant had therein unequivocally admitted the execution of the pormissory note. According to him, defendants' claim for damages in the letter would, at best, amount to a claim for set-off and therefore, by virtue of Explanation I to section 19 it would still be an acknowledgement. The counsel placed reliance on the cases of M/s. M.G. Qadir & Co. v. Abdul Latif PLD 1970 Kar. 708 and Harchandrai v. The Popular Metal Works, Gujranwala and others PLD 1971 Kar. 925. It was observed in the former case that: "The expression 'acknowledgement' itself has not been defined in the Limitation Act but we may accept the definition followed by the Courts in England as well as by the High Courts in India and Pakistan, given by Fry, U. in Green v. 'Humphreys (1884) 26 Ch. D 474. According to this definition acknowledgement is admission by the writer, that there is a debt owed by him. Proceeding further, Fry, Li. observed that in order to take the case out of the statute of limitation, there must, upon the fair construction of the letter, read in the light of the surrounding circumstances, be an admission that the writer owes the debt. Next, some rules have to be observed in construing a document which is set up as an acknowledgement of liability. One principle is, that the Limitation Act being a statute in derogation of the right to sue, exceptions in the Act must be construed liberally. A writing claimed to be an acknowledgement must, therefore, be interpreted liberally, so as to maintain the right to sue rather than in negation or derogation of such right Another rule which has to be kept in mind is that an acknowledgement, like any other document, should be construed according to the intention of the parties but this intention is the intention as revealed by the language of the body of the deed." ' Somewhat similar observation has been made in the other case too. ' Abdur Rahman, the defendant No,1, arguing the case on behalf of the defendants, submitted that some advances had been made by the plaintiff to the defendants towards mobilisation advance, purchase of trucks, cement etc. and in respect of these he had furnished the insurance bond, Exh.5/5, for Rs,3,50,000. He, however, submitted that it was a term of the agreement between the parties, as stated in Exh.5/5, that the entire outstanding was to be recovered by the plaintiff from
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the running bills of the defendants at the rate of 20% of each bill, but, notwithstanding this agreement the plaintiff unilaterally terminated the agreement and stopped the defendants from performing their work as from 1st of December, 1978 which resulted in huge losses to the defendants. He stated that his various running bills submitted to the plaintiff for payment were not paid and, in breach of the agreement, all these bills were adjusted in full towards the outstanding dues. His repeated protest against the illegal action of the plaintiff in withholding payments of his various bills and cancellation of the agreement bore no result. He submitted that later in order to pressurise the defendants the plaintiff reported the matter to the Martial Law Authorities and there he was called and under coercion, threat of arrest and torture he was made to sign the promissory note (Exh.5/17) which, he alleged, was without consideration. In this connection he referred to paras. 13 and 14 of his written statement. He also referred to his affidavit-in-evidence where he stated that:-- "The plaintiff then submitted a petition to the Martial Law Administration and fraudulently manipulated to entertain the petition and take up the matter even though as per Martial Law Order Zone `C' itself neither the Martial Law Administration nor the Summary Courts could take up the matter. When the plaintiff could manage to pursuade the Martial Law Administration to violate the Martial Law Order and take up the matter, what justice and fairplay Can a common man expect. One Major Niazi attached to the Headquarters of the Deputy Martial Law Administrator, Karachi, called me to his Headquarters and ultimately under coercion obtained a promissory note for Rs,3,71,728 without any moral or legal justification. I was not supplied a copy of the petition submitted to the Martial Law Administration by the plaintiff by the said Major. Thereafter the plaintiff manipulated and forged the promissory note so as to appear and establish that the said promissory note was signed by me before a notary public out of my free will and which was not a fact." ' He further stated in his affidavit-in-evidence that:-- "The said Major Niazi attached to the Headquarters of the Deputy Martial Law Administrator, Karachi, used to frequently summon me to appear before him through police and pressurise me to pay the amount of the promissory note. In one of the meetings he told me that he would send me to jail, if I failed to pay soon. He also detained me at his Headquarters for hours together and ultimately let me go saying that considering my white hairs he had allowed me to go that time and next time it would be different and I would be sent to jail. I was so much dejected that I sent representation to the Chief Martial Law Administrator narrating the facts and sent copies to Martial Law Administrator, Zone 'C', Dy. Martial Law Administrator, Karachi, Judge Advocate-General G.H.Q., Rawalpindi, Pakistan Defence Housing Authority (plaintiff) and Chairman, Human Rights Commission. Since the action all along of the Headquarters of the Dy. Martial Law Administrator, Karachi, in collusion with the plaintiff was not legal the said Major Niazi again called me to the Headquarters and took me to a Lt.-Colonel who told me that the entire matter was thoroughly studied and since the matter relates to business transaction, the petition of the Pakistan Defence Officers Housing Authority (plaintiff) had been rejected and the case was finally closed." ' According to the defendant No,1, thereafter things were quiet until May 1984 when one Major Gill attached to the Headquarters of the Deputy Martial Law Administrator, Karachi summoned him and pressurised him to execute a fresh promissory note. This event has been narrated by the defendant in his affidavit in-evidence in the following words:-- "Major Gill told me that I have to sign a fresh promissory note or I have to face arrest because there were clear instructions of the Chief Martial Law Administrator in that regard. I knew that the plaintiff in collusion with Martial Law Authorities had again staged a new drama in the name of the Chief Martial Law Administrator to terrorise me and obtain a fresh promissory note as the first promissory note obtained by Major Niazi had become void."
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' It was then that he wrote the letter dated 12-5-1984 being Exh.5/18, to the Deputy Martial Law Administrator bringing to his notice the high-handedness of the officers. His contention was that his letter (Exh.5/18) did not constitute acknowledgement under section 19 of the Limitation Act, as, in the said letter there was no express admission of liability and the admission relating to the execution of the promissory note was subject to the condition that the defendant had suffered loss due to breach of agreement by the plaintiff and that the promissory note had been obtained under coercion. It is true that the amount of Rs,3,71,728 is not mentioned in the said letter but the execution of the promissory note is admitted though of course such admission is qualified by two important conditions, namely, a claim for damages arising out of breach of agreement by plaintiff and an allegation that the promissory note was obtained under coercion. Claim for damages, would at best amount to a claim for set-off and therefore in view of Explanation I to section 19 of the Limitation Act such claim would not alter the nature of the document if otherwise it is found to be an acknowledgement for purposes of the said section. ' As the very validity of the promissory note (Exh.5/17) has been called into question by the defendants, it will be appropriate to deal with that first. It would appear from the written statement and the evidence of the defendants that they had throughout been asserting coercion and undue influence in the execution of the promissory note. In para. 13 of the written statement it has been stated that, "Major Muhammad Aziz Khan Niazi of the said Headquarters under coercion, harassm ent, and threat of arrest obtained from the defendants a promissory note and a schedule of payment. The impugned promissory note obtained was without consideration." In para. 14 the defendants state that, "the impugned promissory note dated 29-6-1981 was obtained by the Martial Law Authorities who meted out an inhuman and atrocious onslaught on the defendant. The promissory note is also signed by one Major Muhammad Aziz Khan Niazi attached to the Headquarters of the Deputy Martial Law Administrator, Karachi, which speaks volumes about the nature of the promissory note. It was obtained under coercion and influence with the threat that the defendant would be sent to jail and even to torture camp if he did not sign the promissory note". As is apparent from the portions of defendant's affidavit-in-evidence reproduced earlier that in the evidence too the defendant No,1 repeatedly affirmed that the promissory note had been obtained from him by the Martial Law Authorities under coercion and threat. At one place of his affidavit in evidence he stated that, "All along the actions taken by the plaintiff had been immoral, fraudulent and illegal which were not befitting to a defence organisation like Pakistan Defence Officers Housing Authority. The plaintiff by involving the Martial Law Administration in its illegal acts had also defamed the institution of the Armed Forces of Pakistan. The plaintiff and the Martial Law Authorities had forced me to accept a liability which I did not owe. I was afraid of them and avoided to antagonise them by writing the facts as they may involve me in a false case and get me arrested. Ultimately when I was dejected I took a bold step and brought the facts before the higher authorities. I did not owe any money to the plaintiff nor out of my free will I admitted the liability at any time. The plaintiff had caused me a loss of more than ten Lacs. The Martial Law Authorities had obtained the promissory note under coercion." ' The defendant remained firm in maintaining these assertions in his cross-examination. He stated that:-- "It is not true that I issued promissory note in favour of the plaintiff in consideration of money which I owed to the plaintiff. It was, in fact, issued under coercion. It is correct that in May 1984 I was called by the Martial Law Authorities and told that the dispute between the parties was a civil matter and that the Martial Law Authorities had nothing to do with it. Q. Why did you not take any legal action to have the promissory note cancelled after you were told by the Martial Law Authorities that they had nothing to do with the dispute between the parties?
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A. I did not do so because I was under the impression that the promissory note had become void because Colonel had told me that no action has been taken against me." ' As against the defendants' unwavering stand, as is evident from portions of the written statement and deposition of the defendant No,1 reproduced hereinabove, the plaintiffs evidence on the point, is almost non existent and the assertions of the defendant have gone unrebutted. The only witness examined by the plaintiff was Masooaul Haq. In his examination-in chief the witness had admitted that, "The plaintiff therefore, approached the Martial Law Authorities as they were conducting the arbitration cases in respect of Government dues". This witness was admittedly not in the employment of the plaintiff at the material time and he admitted that he was giving the evidence on the basis of the records produced in Court. With regard to the promissory note (Exh.5/17) this witness stated in his cross-examination that, "It is correct that Exh.5/17 was executed at the Headquarters of Deputy Martial Law Administrator. Notary Public has attested this document later on. It is correct that you were not present before the Notary Public when it was got attested by us". He has denied that the promissory note was obtained under coercion. He states that "It. is incorrect to say that Exh.5/17 was obtained from you under coercion". However, this denial is of no effect for the witness admits that, "I did not personally attend any proceedings before the Martial Law Authorities with regard to this dispute". ' The facts that the plaintiff addressed its communication dated 24-3-1981 (Exh.5/16) to the Headquarters D.M.LA. requesting that the case for recovery from the defendants may be handled by the Martial Law Authorities and on the basis of this the Martial Law Authorities summoned the defendant No,1 and during the course of proceedings there the promissory note was executed, would lend support to defendant's contention that the same was obtained under threat and undue influence, all the more, when Exh.5/16 was signed by the Administrator of the plaintiff, who happened to be a senior serving officer of the rank of Brigadier. It is important that, while the defendants took this plea of coercion at the very outset, in their written statement and persistently stuck to it, the plaintiff made no attempt to repel the same. The witness examined by the plaintiff was a person who had no knowledge of what transpired before the Martial Law Authorities. What this witness stated in his examination-in-chief on this aspect of the case is briefly mentioned above and may be reproduced here: "The plaintiff therefore, approached Martial Law Authorities as they were conducting the arbitration cases in respect of Government dues. We filed claim before the Martial Law Authorities in the sum of Rs,4,20,028 (Rupees four lacs, twenty thousand and twenty-eight only). I produce the claim filed before the Martial Law Authorities as Exh.5/16. Defendant No,1 executed a promissory Note which I produce. It is marked as Exh.5/17." ' It was not for the first time that the defendant No,1 had in the written statement, alleged that the promissory note had been obtained from him under coercion and threat, but, earlier too, as far back as in May 1984, much prior to the filing of the present suit, the defendant had alleged in his letter dated 12-5-1984 (Exh.5/18) that the promissory note had been obtained by one Major Niazi under coercion. Although a copy of this letter was endorsed to the plaintiff and apparently was also received by, it, for Exh.5/16 was produced by its witness, yet no reply to that letter appears to have been sent denying the serious allegation of coercion. That the promissory note was got attested by a Major attached to the Martial Law Headquarters is also not without significance. Apparently this was done to keep the pressure on the defendant, for otherwise, had the promissory note been executed by the defendant voluntarily, in the normal course, there would hardly been any question of its attestation by the officer or the notary public. ~~Plaintiffs counsel's contention that the proceedings before the Martial Law Authorities were competently taken by virtue of the above-referred MLO 10 would appear to be devoid of force for more than one reason. In the first place it is clear from the said MLO that it related only to those
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cases of outstanding taxes and dues which were payable to Government or any local body or authority at the time the said MLO was issued and accordingly by the said MLO the parties were required to pay the same by 15th August 1977. Admittedly, no amount was payable by the defendant to the plaintiff till 15-8-1977. Secondly, the word 'payable' used in the said MLO would, in my view, mean legally payable and not just a claim by one person which is denied by the other. Thirdly, even in respect of cases covered by the said MLO the jurisdiction to try these was vested with the Military Courts and not the officers attached to Martial Law Headquarters. ' Taking into consideration the various aspects discussed above, I am of the view that the plaintiff got the defendant No,1 to execute the said promissory note (Exh.5/17) under the pressure, threat and undue influence brought about through the officer attached with Martial Law Authorities and that the execution of the said promissory note…
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