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Petitioner: PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY And ANOTHER VS Respondent: Messrs LIGHT HOUSE ELECTRIC CONCERN, COMMERCIAL CENTRE, NANGI
Court Name: High Court of Azad Jammu and Kashmir Judge(s): Sardar Muhammad Ashraf Khan, Sher Zaman Chaudhary Title:PAKISTAN WATER AND POWER DEVELOPMENT AUTHORITY And ANOTHER vs
Messrs LIGHT HOUSE ELECTRIC CONCERN, COMMERCIAL CENTRE, NANGI Case No.: Civil Appeal No.54 of 1987 Date of Judgment:1989-03-21 Reported As: 1989 CLC 1778 Result: A. Judgment ORDER S.Z. CHOUDHRI, J.--Facts leading upto the present controversy briefly stated are that the plaintiff is a firm operating under the trade name M/s. Light House Electric Concern having its office at Commercial Centre Nangi Mirpur (Azad Kashmir). With the acceptance of respondents-plaintiff's tender by the appellants for the improvement of water supply line between Power House Mangla and waterworks at left Bank Colony Mangla, the parties entered into a contract on 5-4-1984 for the purpose. The work under the terms of the contract was required to be completed within 120 days after signing the contract. 2. The job could not be completed within the stipulated period as according to the respondent- plaintiff additional condition for the use of a pipe of particular make, not available at the time, was imposed by the appellants. The penalty of Rs.1,00,000 thus imposed on the respondent-plaintiff has liquidated damages on account of delay in completion of work was, according to the plaintiffs, unjustified and illegal. Besides, the deduction of the amount of Rs.1,29,587 made from the bill by the defendants was also illegal. Feeling` aggrieved respondent-plaintiff, therefore, filed the suit against the appellant in the Court of District Judge Mirpur on 9-6-1985 claiming therein that the imposition of penalty of Rs.1,00,000 has liquidated damages and deduction of Rs.1,29,587 altogether Rs.2,29,587 from its bill by the defendants be declared as having been done without lawful justification and for the recovery of the same by way of consequential relief. 3. The suit was resisted by the appellants on all the counts that had been made basis for the claim by the respondent. The trial Court after taking necessary proceedings in the case decreed the plaintiff's suit ,vide the impugned judgment passed on 11-7-1987.
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4. Feeling dissatisfied by the impugned judgment and decree that had been allowed by the trial Court on 11-7-1987 in favour of the respondent :plaintiff, appellant-defendants have now challenged the correctness and legality of it through this appeal inter alia on the grounds:-- (a)That the suit for having been hit by the express and mandatory provision as contained in section 69 of the Partnership Act (hereinafter called to be Act) was not maintainable. This important point of vital legal importance having not been attended to by the trial Court in its correct perspective has rendered the impugned judgment invalid; (b)That the suit for having been instituted by an un-authorised and incompetent person on behalf of the plaintiff-firm was not maintainable. This important aspect of the case for having not been properly attended to by the trial Court had rendered the impugned judgment illegal; and (c)That the findings of the trial Court even on merit was not maintainable as the appraisal of evidence available on record conducted by the trial Court was violative to the settled norms governing appreciation of evidence. The impugned judgment was, therefore, liable to be set aside. 5. Arguing on the first point of his objection Mr. Muhammad Rafique Dar learned Advocate for the appellants-defendants submitted that a suit when filed in the Court by or on behalf of a Firm against any third party, it must first be proved that the respondent-plaintiff, as required under section 69 of the Act, was a registered firm and a specific plea should be taken in that respect in the plaint itself. Since no certificate of Registrar of Firms was produced by the plaintiff-firm as a proof of its registration and no such plea had been taken in the body of the plaint by the respondent-plaintiff it was, therefore, not validly instituted suit before the Court. The trial Court under the circumstances had no other option except to dismiss the suit. The learned District Judge, despite of objections expressly taken by the appellants-defendants in the written statement, continued with the trial and finally decreed the plaintiff's suit in total disregard to the mandatory provision contained in section 69 of the Act. This fault approach to the point involved by the trial Court has, therefore, rendered the impugned judgment invalid, submitted the learned Counsel. In support of the submission reference was made to 1982 CLC 714, PILD 1952 Lah. 314, PLD 1960 Kar. 736 and PLD 1968 Kar. 196. 6. Controverting the arguments addressed on behalf of the appellant Mr. BA. Sheikh learned counsel for the respondent-plaintiff has contended that all that was required of was that a suit by or on behalf of a firm could only be filed against any third party by registered firm. It was not prerequisite to the filing of the suit that such a plea should also be taken expressly in the grounds listed in the plaint. The argument on the point having no substance, therefore, according to the learned counsel, did not merit consideration. Reference was made in support of the arguments to AIR 1938 Lah. 96, PLD 1966 SC 328, PLD 1953 Lah. 107(109),and AIR 1942 Mad. 634. 7. The question in view of the arguments addressed on behalf of the parties that requires resolution is as to what is the true import of section 69 of the Act. On careful perusal the provision appears to provide that a suit by or on behalf of a firm to enforce a right arising from a contract against any third party could only be instituted if it stood registered at the relevant time and not that it must first be proved so before the Court could proceed with the case. The difference between these two situations though very subtle is however important. 8. We have carefully gone through the reports of the cases that have been referred to by the learned counsel for the appellants-defendants. In 'Habib Bank Ltd. v. Mian Muhammad Yaqoob and Mian Muhammad Shafi', 1982 CLC 714, The question that came to be considered was whether a suit to enforce a right under contract against an unregistered firm, in view of section 69(3) of the Act was maintainable. It is thus clear that neither the facts of that case are similar nor the principle enunciated therein has any relevancy to the case now under consideration. In `Australasia Bank Ltd. v. Messrs A. Ismailji and Sons', PLD 1952 Lah. 314, the question that needed determination was as to whether a statutory bar envisaged under section 69(2) of the Act against the filing of a suit by
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an unregistered firm was to be taken to have been removed if it was registered before the decision. We have carefully gone through the report of this case. Nowhere in it has been laid down that the trial Court would not proceed with the case unless its registration has first been proved by the plaintiff-firm by producing the certificate of registration as a proof of its registration or the factum of its registration should have specifically been mentioned in the body of the plaint. Similarly, the principle evolved in `Messrs Sh. Mian Muhammad Allah Bux v. Universal Corporation and others' PLD 1960 Kar. 736 and `Province of West Pakistan and another v. Messrs Asghar Ali Muhammad Ali and Co'. PLD 1968 Kar. 196 are of no assistance to the appellant's case either. In `Chuni Shah v. Amar Singh', AIR 1938 Lah. 96, the proposition came to be considered in the following circumstances:- "In a money suit by the petitioner-firm in a Small Cause Court against respondent-firm Behari Lal Bani Persad defendant-firm resisted the suit on the ground that the plaint did not state that the plaintiff-firm was registered. It also objected that the suit could not proceed in the name of the firm. Since the suit was a Small Cause; no issues were framed. The respondent never denied that the plaintiff-firm was registered. The trial Judge however dismissed the suit on the ground that registration was not proved. While considering the point Coldstream, J. Observed:- "Now the respondents never denied that the plaintiff-firm was registered as they were bound to do if they opposed the suit on this ground (0.6, R.6 and 0.8, R.2 C.P.C.), and it was natural enough for the plaintiffs to assume that this objection had not been taken. The law does not require (and this is not disputed) that a plaint by a firm must expressly note that it has been registered. No reference to registration or non-registration was made in the evidence or it certainly appears that the plaintiffs were taken by surprise as their counsel now alleges when they found at the time of arguments that the Judge was calling on them to show that they were a registered firm." While accepting the revision petition the judgment of the trial Court was vacated by the learned Judge. 9. In `Goverd kandoss v. Abdur Rahiman,' AIR 1942 Mad. 634, the point among others that came to be considered in that case was whether in case of non-- registration of firm the Court was bound to dismiss the suit suo motu. It was held that there was a distinct provision of Limitation Act that a Court was bound to dismiss a suit on the ground of limitation if it finds the suit be barred whether a plea of this kind has been raised on behalf of the defendants or not. No such provision however exists in the Partnership Act and, therefore, the Court is not bound to dismiss the suit on the ground of non-registration of a firm suo motu if no plea had been raised by the defendants to the suit to this effect. 10. On perusal of the pleadings of the parties in the present case we find that no such plea as regards non-registration has been taken by the defendants in their I written statement. The only objection taken by them was that the plaintiff-firm is not a legal and validly constituted firm. On careful consideration of the point involved and in view of the principle evolved in AIR 1938 Lah. 96 and AIR 1942; Mad. 634 we are of the view that non-mention of the plaintiff-firm being a registered firm in the body of the plaint would not render the suit invalid nor this non-mention would operate as a bar on the trial Court's competence to proceed with the case. As the plaintiff's suit was not opposed on the plea of non---registration in the written statement neither the institution of the suit suffers from any infirmity nor the suit could be dismissed on account of non-registration in absence of such a plea by the defendants. The argument on the point having no substance, therefore, stands rejected. 11. It was next contended on behalf of the appellants-defendants that the plea of non-registration being purely a point of law could be taken at any stage of the proceedings before the trial Court and even at the appeal stage. Despite of the fact that during the pendency of the appeal respondent-plaintiff was allowed to adduce additional evidence as regards the registration of the plaintiff-firm, certified copy placed on record as evidence in the case by the respondent was of no
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legal worth as it had not been issued in accordance with the requirement of section 67 of the Act. The respondent-plaintiff at least at the appellate stage could not be said to be not aware of the objection on the point. He had full opportunity to prove the factum of registration but as he failed to do so the suit was liable to be dismissed and the judgment and decree allowed in his favour by the trial Court was, therefore, not maintainable. The learned counsel for the appellants further contended that as there was nothing on record from which it could be even inferred that Mr. Majid Kanwar who filed the suit on behalf of the firm was either a partner of it or had the valid authority to file the suit on behalf of the plaintiff firm. As the suit had been filed by incompetent and un- authorised person, it was, therefore, not maintainable. The suit was liable to be dismissed on this ground alone. According to the learned counsel, the suit suffered from yet another legal infirmity. The copy of the certificate of registration marked as Exh.RA placed on record by the respondent relates to a firm registered under the name and style `Light House Mirpur' and not to the plaintiff- firm which is Messrs Light House Electric Concern. As there is no evidence on record as regards the registration of the plaintiff-firm, the suit, therefore, fails on account of non-registration, contended the learned counsel. 12. As against this it was argued on behalf of the respondent-plaintiff that document Exh.RA has been issued in accordance with law and suffer from no legal infirmity. It was a valid piece of evidence to be taken into consideration. It also, according to the learned counsel for the respondent, relates to the plaintiff---firm. The objection as regards the competency of Mr. Majid Kanwar to file the suit on behalf of the plaintiff-firm is also misconceived, submitted the learned counsel. 13. One of the plea made basis for a challenge to the impugned judgment in this appeal was as regards the registration of respondent-plaintiff firm. On an application made on 23-2-1988 the respondent was allowed to adduce additional evidence on the point of registration by this Court vide its order dated 25-5-1988. Mr. Majid Kanwar while appearing as a witness placed on record the certified copy of certificate of registration marked as Exh.RA and a photo copy of the power of attorney Exh.RB as evidence in the case. The document Exh.RA which has been issued by the Administrative Officer Directorate of Industries has no evidenciary worth and cannot legally be taken as a proof of registration as, according to the learned Advocate, only a certified copy under the head of Registrar of firm issued in accordance with the requirement of section 67 of the Act could be taken to have been issued validly and admissible as evidence in the case. The argument on careful consideration is found without substance for the reasons:- (a)Since the Registrar was holding the dual office i.e. Of Registrar as well as the Director of Industries and the record being in his custody, Exh.RA the certified copy of the certificate of registration thus issued suffers from no legal infirmity and as such was a valid piece of evidence in the case; and (b)That the register of firm being a public document, a public officer having the custody of such record was under section 76 of the Evidence Act competent to issue the certified copy. Document Exh.RA signed by the Administrative Officer who had the custody of the record was, therefore, admissible piece of evidence. Section 67 of the Act cannot, in our view, be termed as opposed to or in conflict with section 76 of the Evidence Act. Both these sections are rather complementary having harmonious application. In 'Muhammad Allah Buksh v. Universal Corporation', PLD 1960 Kar. 736, Mr. A.S. Farooqi, J. While considering the proposition observed:- Section 68(2) provides that a certified copy of an entry related to a firm in the register of firm may be produced in proof of the fact of registration of such firm. Section 74 of the Evidence Act defines the public document and there is no doubt that the register of the firm maintained by the Registrar is a public document. Section 76 enable a person to obtain certified copies of public documents
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and section 77 provides that such certified copies may be produced in proof of the contents of the public document.' It may also be noted that these provisions of the Evidence Act have been replaced by `Qanun-e- Shahadat' of 1984. This however would make no difference in the present case because the document. Exh.RA has been issued much prior to this adoptation and has been used as evidence in a case instituted much earlier to the adoptation. The purpose of section 67 of the Act on careful perusal of it rather appears to be to make it compulsory for the Registrar, when applied for, t9. Issue copy. The document Exh.RA, therefore, in our view, is a valid piece of evidence. It suffers from no such legal infirmity as has been contended on behalf of the appellants. 13. It has also been submitted on behalf of the appellants that Exh.RA even if be assumed to be a valid proof of registration, it was still of no help to the respondent-plaintiff as it only related to a firm that had been registered under the name style `Light House Mirpur' and surely not to the respondent-plaintiff's firm which operates under the trade name "Light House Electric Concern". The argument on careful consideration is found to be mis-conceived. We have examined the record including the whole lot of correspondence between the parties. On perusal of documents Exh.PB, PE, PF, PH, PJ, PN, PQ, PT, PU, PW, PZ and PAA. We find that in all these documents operative part printed in very bold letters in red ink is only "Light House". The documents, no doubt, also carry the writing Electric Concern dealers in electronic goods Government Contractor and General Order suppliers in blue ink but not in bold letters. This merely shows the nature of and the field the firm operates in. The argument on the point, therefore, stands rejected. 14. As regards the objection taken on behalf of the appellants relating to the institution of the suit, note may be taken of the fact that the suit was filed by Mr. Majid Kanwar as a partner and attorney of the plaintiff-firm. According to the learned counsel there was no validly instituted suit before the Court as, according to him, only a partner of a firm was competent person to file the suit. It was for the plaintiff to prove but there is nothing on record to this effect. The institution of the suit was, therefore, not valid and the trial Court by proceeding with the trial committed a grave legal error rendering the impugned judgment invalid. The argument has no force for the simple reason that the status of Mr. Majid Kanwar as partner of the firm has not been denied by the defendants. In a very lengthy and comprehensive written statement filed by the appellants-defendants, no challenge had been made on this count. Objection in this regard was for the first time taken during the arguments in appeal. The witness when appeared before the Court was specifically questioned on the point by the learned Counsel for the appellants-defendants. In answer to the question, the witness stated that he was one of the partner of the firm and had also the power of attorney photostat copy of which he had with him and placed it on record as evidence in the case and is marked as Exh.RB. Since the plea that the witness was not a partner of the firm and as such the suit could not be filed, was not taken by the defendants in their t written statement nor is there any issue on the point. There is yet another aspect of vital importance that cannot be lost sight of. The contract Exh.PGG is an admitted document on record. It was signed on behalf of the defendants by Ghulam Farid Qureshi and Abdul Majid Kanwar on behalf of plaintiff-firm. The document carry the signature of both these gentlemen. It is thus clear that his partnership in the firm stands established. In this view of the matter, the argument that he was not a partner of the firm and as such the suit was not validly instituted has no force. 15. The institution of the suit even otherwise cannot be objected to because as appears from the plaint it was filed by Mr. Majid Kanwar not only as a partner but also as an attorney of the plaintiff- firm. The photostat copy of the power of attorney marked as Exh.RB that was placed on record as evidence in the case was produced at the instance of the learned counsel for the appellants- defendants. It is in the evidence recorded by this Court that the learned counsel for the appellants
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does not object to the admissibility of this document. No challenge, therefore, could be made to the filing of the plaint. The argument on the point is, therefore, rejected. 16. As regards the imposition of penalty by way of liquidated damages, the learned counsel for the appellants argued that the trial Court by holding that the delay in completion of work was due to imposition of an additional condition for the use of pipes of a particular make after the contract had been signed which, according to the impugned judgment the defendants under law could not imposed, was due to misperception of the terms of contract. Besides, the whole evidence on the point of imposition of liquidated damages was misconstrued and misinterpreted by the trial Court. This fault approach to the evidence on the point by the trial Court has, according to the learned counsel, rendered the impugned judgment on the point invalid. 17: As against this it was argued on behalf of the respondent-plaintiff that Exh.PB was not merely an informatory letter but a regular request for extension of time for justifiable reason. The defendants failed to suggest use of any alternate pipe. They rather felt advised to keep silent over the matter. It was only on 20-6-1984 that the plaintiff after receiving the required pipes could start the work. The delay thus caused was not due to the plaintiffs fault. The position, according to the learned counsel, got further aggravated by supply of defective pipes by the defendants and other unavoidable circumstances like setting in of monsoon rains etc. The findings on the point of damages recorded by the trial Court was, therefore, perfectly in accordance with law and as such was open to no interference by this Court. 18. We have heard the learned counsel for the parties, and have examined the record including the impugned judgment. Since the issues No.l to 4 are inter--related, these are, therefore, taken up and decided jointly. The contract Exh.PGG was admittedly signed by the parties on 5-4-1984 and the work under it was to be completed within the period of 120 days i.e. By 3-8=1984. As the job was far from completion, the Resident Engineer imposed liquidated damages on 4-8-1984 vide document Exh.PG placed on page 117 and 118 of the trial Court's file. This document stands admitted as the copy of it has also been filed and stands listed as No.2 in the list of documents filed along with the written statement by the defendants. This list is placed on page 26 of the trial Court's file. As the work was finally completed on 20-12-1984, there was delay of 139 days. The amount thus calculated and deducted from the plaintiffs bill was Rs.1,00,000 as liquidated damages. This amount so deducted has not been denied by the defendants. 19. The question that now, therefore, requires determination is whether respondent-plaintiff's firm was responsible for the delay and as such was not entitled to this amount that had been deducted from its bill. We have examined the record with utmost care. As already stated in the earlier part of this order the contract had been signed on 5-4-1984 and the job had to be completed within 120 days thereafter. On 14-4-1984 through a letter Exh.PA placed on page 128 of the trial Court's file, the defendants directed the plaintiff-firm to use the pipes of Jamal Factory Lahore. Under the terms of contract the plaintiff-firm was only required to use the Pak best made quality pipes. The direction made through Exh.PA, according to the respondent-plaintiff, tantamounted to imposing additional condition after the contract had been signed which could not legally be imposed. The trial Court, as appears from the impugned judgment, also recorded its findings to the same effect. On careful consideration of the point involved we find that the direction for use of a pipe of Jamal Factory could not be termed as an imposition of additional condition without competence. It was, in our view, merely a direction for the use of a particular kind of material for which the defendants had competence under clause 33 of the contract. The Engineer under this clause had the competence and authority to issue the kind of directions which he in fact did vide document Exh.PA. This clause in the contract having important bearing on the point appears to have escaped the notice of the trial Court.
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20. We next advert to the question of responsibility for the delay in completion of the work within the stipulated period under the contract. The plaintiff-firm after having received the direction per Exh.PA contacted the manufacturing firm but was informed vide letter dated 30-4-1984 that the supply of the said pipes was not possible before 15-6-1984. On 3-5-1984 respondent then through a letter Exh.PB requested for the extension of time on the ground that the pipes despite of its best efforts could not be had before 15-6-1984 nor was it available in the open market. This letter, in our view, is not merely informatory but in fact a request for extension. The plea that the pipes if not…
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