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Petitioner: Captain Syed WARASAT HUSSAIN VS Respondent: MUHAMMAD AHAD SAAD
Court Name: Sindh High Court Judge(s): Aziz-ur-Rehman Title: Captain Syed WARASAT HUSSAIN vs MUHAMMAD AHAD SAAD Case No.: Old Suit No,1037 of 2000 and New Suit No,1396 of 2002 Date of Judgment:2013-04-17 Reported As: PLD 2013 Sindh 513 Result: Suit decreed
JUDGMENT
JUDGMENT AZIZ-UR-REHMAN, J.---The instant suit has been filed by the plaintiff for accounts and permanent injunction with following prayers:- (a) Direct the defendants to render true and correct account of the business of Bulk Trade International and for that purpose pass a preliminary decree appointing a commissioner to take accounts of the business of Bulk Trade International; (b) Pass on final decree directing the defendant to pay to the plaintiff 10% of the profits of Bulk Trade International up to 30-9-1999 and to indemnify the plaintiff for payments made and to be made to the creditors of Bulk Trade International; (c) Permanently restrain the defendant No, 1 from pursuing extra judicial remedies against the plaintiff in respect of any matter relating to the business of Bulk Trade International or any other business jointly conducted by the plaintiff and the defendant No,1; (d) Grant costs of the suit; and (e) Grant such other relief as may be appropriate in the facts and circumstances of the case. Briefly the facts leading to the filing of the suit are: 5.Since the year 1992 until 1997 the plaintiff was residing and working in Dubai. By profession per assertion the plaintiff is a Captain in the merchant Navy. Per plaintiff's assertion lastly he was working as General Manager of Barkat Shipping Services, a Dubai based company engaged in the business of ship management and chartering. The salary of the plaintiff at the relevant time was Dirhams 10,000.00 per month, (equivalent to Pak Rs,125,000 per month) and was also availing facilities of free accommodation and a car. Per averments upon introduction sometime in May or June, 1997 when the plaintiff was in Dubai, the defendant while recognizing the expertise and
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contacts of the plaintiff in the business of marine shipping proposed a plan to the plaintiff for directly entering into the field of chartering and hiring of shipping vessels. 4. Eventually, per wish and desire of the defendant it was agreed between the parties that the plaintiff would move from Dubai to Pakistan and in turn the defendant would set up a business of ship charterers and shipping agents. Accordingly, the operational part of the planned business was agreed to be handled by the plaintiff however, the financial and accounting aspect of the business was to be looked after by the defendant. 5. The capital required for the partnership was about US$ 2,00,000 (US Dollars two laces only) and per agreed terms it was to be invested by the defendant alone. Upon getting the business secured 10% of all profits as agreed was to be paid to the plaintiff. The plaintiff being a Pakistani citizen, formal 'partnershipunder circumstances, was deemed as inadvisable. 6. Plaintiff as agreed, was to be paid monthly salary net of tax of Rs,25,000 (Rupees twenty five thousand only) plus house rent and all amenities, a car and patrol from the shipping agency. The basic salary per averments after the plaintiff's joining was increased from Rs,25,000 to Rs,70,000 per month after a short span of time/few months on account of plaintiff's valuable performances. 7. The business of ship charterers so set-up, was started in the name and style of 'Bulk Trade. International'. The bank account of the business was opened in ANZ Grindlays Bank, St. James Street, London. The defendant being a British National, the account of the aforesaid business thus was operated under signatures of the plaintiff. 8. All the operational work, such as chartering, hiring and sub- chartering/taking cargo was done by the plaintiff whereas the finances and books of accounts were kept and maintained by the defendant from an office at 403, Marine Point, Clifton, Block 9, Karachi. 9. According to the plaintiff's averments, the business of 'Bulk Trade Internationalhad commenced during the month of December, 1997. Four vessels, namely Rubin Lotus, Tetien, New Alliance and Mary's were chartered while the plaintiff was still in Dubai. The plaintiff thereafter came to Pakistan in April, 1998. The business, per averments, continued to prosper and a number of other vessels were also chartered including m.v. Laxmi I, m.v. II, m.v. Oluja, m.v.Pan Queen, m.v. Tian Shan Hai, m.v. Wadi Halfa, m.v. Pisces Explorer, m.v. Norita, m. . Golden Farmer, m.v. Joshua, m.v. Kyernatis, m.v. Pisces Planter ark, otheRs, 10. Per assertion, the defendant in one of his business ventures, viz, 'trading in nitro phosphatesuffered huge losses. For and to cover up such losses the defendant besides drawing huge sums of money out of the business of 'Bulk Trade Internationalalso withdrew entire invested capital, profits made and advances received. 11. The defendant, upon confronting the situation of default vis-a-vis creditors and the plaintiffs due profits, finally in September, 1999 agreed to dis-associate himself from the ship chartering business of 'Bulk Trade International'. It was also agreed during negotiations that the defendant would compensate the losses suffered by the plaintiff and also pay the plaintiff his due share of profit earned from the business of 'Bulk Trade International up to September, 1999. 12. Accordingly thereafter per defendant's instructions and promises necessary steps were taken for settling the outstanding issues with the creditoRs, In efforts so made some of the issues were settled with the creditorsof 'Bulk Trade Internationalwhile some other still remained to be settled. 13. Per assertions, on 22-2-2000 the plaintiff received from 'Ocean Ma rine Shipping', a buyer of vessel 'Dubai Gold', a sum of US $90,000[US Dollars ninety thousand only]. On receipt, the said amount was listed towards plaintiffsthen tentative outstanding share of the profits from the business of 'Bulk Trade International [i,e, during the period of the association of the plaintiff with the defendant] and the remaining towards the liabilities of the creditors of 'Bulk Trade Internationalwhich the plaintiff had settled in accordance with the defendantsinstructions and authorization. Per plaintiffs 'sown knowledge still a sum of Rs,US $ 51,281 is outstanding and payable
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to the creditors of 'Bulk Trade International'. Per plaintiffsassertions, the defendant has not paid the actual due share of the profits of 'Bulk Trade International'. 14. The cause of action per averments made in the plaint, has arisen firstly in October, 1999 when the business of 'Bulk Trade Internationalwas dis-continued and also on other dates/occasions as mentioned in para 13 of the plaint. Per averments, the defendant instead of making payment of money owed to the plaintiff and to the creditors has started his using of influence with law enforcement agencies for harassing the plaintiff. The plaintiff thus constrained to file the instant suit inter alia for rendition of accounts of business 'Bulk Trade International'. 15. Along with plaint, an application under Order XXXIX, Rules and 2 C.P.C. Bearing C.M.A. No, 6758 of 2000 was also filed by the plaintiff with the following prayers:- "It is respectfully prayed that pending hearing of the above suit, this Hon'ble Court may be pleased to restrain the defendants from threatening or further harassing the plaintiff or from pursuing any extra judicial proceedings against the plaintiff in respect of any business dealings between the plaintiff and the defendants. As the harassment is continuing, ad-interim orders in like terms are humbly solicited." 16. The above application (C.M.A. No, 6758 of 2000) when came up before the court on 16-8-2000 thereon the following order was passed:-- Granted. 2. Notice to defendants for 29-8-2000. In the interim period the defendants shall not take any coercive action against the plaintiff nor shall he cause harassment of impartment to the plaintiff specially in pursuance of any steps that the plaintiff wishes to take to resolve the issue between him and the defendants." 17. Thereafter, summons were issued to the defendant and returned duly served. The defendant, later on filed his written statement wherein inter alia the claim and assertions made in the plaint were denied. Per averments, the plaintiff was introduced to the defendant as a willing and efficient worker who per defendant's assertion was in need of job. The plaintiff on approaching was interviewed and thereafter per defendantsversion was appointed in his company. 18. In the business operation of shipping, per averments, the plaintiff in addition to remuneration was given an incentive of 10% [ten percent] of the profits to be earned on operation of the ship M.V. Dubai Gold which in fact was purchased by the defendant as a partner with the foreigner. No partnership was agreed or reduced into writing between the plaintiff and defendant at all. 19. The plaintiff, per defendant's assertion miss-managed the business operation of ship and did not earn any profit. On the contrary, due to plaintiff's negligence, the defendant sustained losses. Per averments, the defendant was kept on false hopes by the plaintiff that he will be able to recover the outstanding amounts. Due to gross negligence of the plaintiff, per averments in written statement no profit was earned. Rather huge losses were sustained by the defendant. The defendant under circumstances had constrained to sell the ship M.V. 'Dubai Gold'. 20. The amounts received by the plaintiff, in fact are the money of defendant. Per averments, the plaintiff was only authorized to collect and re-invest the same. The plaintiff as being an in charge of the operation, accounts of the ships operation business per defendant's version has never rendered any true account. The plaintiff, per defendant's assertions has no concern whatsoever as far as the 'business affairsof defendant are concerned. 21. The .Plaintiff was merely an employee of the defendant and does nothing with the business transactions made by the defendant. Per averments in the written statement the plaintiff has pocketed an amount of US $90,000.00 (US Dollars Ninety thousand only). The above suit, per defendant's assertion is motivated and aimed to halt/stop the plaintiff from recovery of the amount and possession of the company's assets from the plaintiffs possession.
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22. The parties to the suit went on trial and out of the pleadings on 14-5-2001 the following issues were settled by the court:-- (i) whether the plaintiff was engaged by the defendant to render services to Bulk Trade International and if so, on what terms and conditions? (ii) What amount if any is payable by the defendant to the plaintiff? (iii) Whether the defendant pursued extra judicial remedies to harass the plaintiff? (iv) What should the decree be? 23. After framing of issues, on 21-9-2010 Commissioner was appointed to record 'evidence of the parties'. Thereafter learned Commissioner submitted his report dated 22-1-2010. 24. On 5-4-2011 when the matter came-up before the court the following order was passed:-- "The commissioner has filed his report dated 22-1-2010, in terms of which it appears that examination-in-chief of the plaintiff has been recorded but when the matter was adjourned for cross-examination of the witness, according to commissioner no one appeared on behalf of defendant on 21-12-2010. The commissioner is directed to give one final opportunity to the defendant to cross-examine the witness of the plaintiff by giving appropriate notice to the parties. If neither the defendant nor learned counsel for defendant appear on that date the right of the defendant to cross-examine the witness may be closed." 25. In terms of order dated 5-4-2011 the matter was sent back to the learned Commissioner for affording one more final opportunity to the defendant. Thereafter the learned Commissioner after complying with directions of this court in terms of order passed on 5-4-2011 submitted his detailed report dated 7-3-2011 [Available at page 73 of the court file] which was subsequently taken on record vide order dated 5-6-2011. Being relevant order dated 5-6-2011 is reproduced as under:- "Learned Commissioner had submitted his report dated 22-1-2010 and had informed this Court that the matter was adjourned for cross-examination of the plaintiff's witness and none was appeared before the learned Commissioner on behalf of the defendant. This court directed the learned Commissioner to give final opportunity to the defendant to cross-examine the plaintiff's witness by giving a proper notice to the parties and if none appeared on behalf of the defendant on the said date fixed by this. Court i. e. , 21-12-2010, the right of the defendant to cross-examine the plaintiffs witness may be closed. Learned Commissioner in his report dated 7-6-2011 submitted that in compliance of the order of this court dated 5-4-2011, learned Commissioner issued notice to the defendant and his counsel for 18-5-2011 and 24-5-2011 through UMS. Notice and the postal receipt issued by the learned Commissioner to the defendant are enclosed with his report. None appeared on behalf of the defendant on the date fixed by the learned Commissioner for cross- examination of the plaintiff's witness and the learned Commissioner under the directions of this court closed the side of the defendant to cross-examine the plaintiff's witness and submitted his report dated 4-6-2011, which is taken on record. Office is directed to fix the matter for final arguments." 26. Before the learned Commissioner the plaintiff (P.W.1) filed his 'affidavit-in-evidenceon 15-12- 2010 and his 'examination-in-chief was recorded on 15-12-2010. The plaintiff in his 'depositionproduced his 'affidavit-in-evidenceas Exh. PW-1and other documents as Exh.'P.W.-1/1to Exh.'P.W.1/9'. 27. On 13-3-2013 when the matter came up before the court, I heard Mr. Adnan Iqbal Chaudhry the learned counsel for the plaintiff and with his able assistance scanned the available record. 28. Mr. Adnan Chaudhry learned counsel for the plaintiff while arguing the case submitted that the plaintiff being a Captain in the Merchant Navy was working in Dubai in the business of ship management and chartering. Per learned counsel, around May or June, 1997 the defendant in recognition of the plaintiff's expertise and contacts in the field of ship chartering made a Warasat Hussain v. Muhammad Ahad Saad Sindh 521 (Aziz-ur-Rehman, J)
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Similar business in Pakistan which was agreed by the plaintiff in pursuance and consequence of negotiations held between the parties. Per learned counsel, arrangement/terms and conditions agreed between parties are oral, however, the gist /outcome thereof per plaintiff's case is as follows:-- (i) The defendant per agreed terms invested capital to start the business of ship charter under the name and style of 'Bulk Trade International'. The operational part of such business was however, handled by the plaintiff, while the financial and accounting side per agreed terms was handled by the defendant. The plaintiff as agreed was entitled to 10% of all profits earned out of such business being carried on in the name of 'Bulk Trade International'. (ii) Till the business of 'Bulk Trade Internationaltook off the plaintiff was paid salary and perks from the other business concern of the defendant, which was that of shipping agents, incorporated as 'Bulk Trade (Pvt.) Ltd.' (iii) The ship charter business of 'Bulk Trade Internationalultimately commenced in December, 1997 and due to the plaintiffs un-tired efforts, the business smoothly and continuously prospered. (iv) Other business of the defendant suffered losses and in order to cover-up such losses, the defendant started drawing huge sums from the business of 'Bulk Trade International'. 29. The plaintiff protested such withdrawals because of:-- (i) Due to such withdrawals the plaintiff was deprived of his agreed 10% share of profits, (ii) The creditors who had extended credits to 'Bulk Trade Internationalon the reputation of the plaintiff remained unpaid/not being paid by defendant. 30. Mr. Adnan Iqbal Chaudhry learned counsel for the plaintiff further contended that by the end of September, 1999 the plaintiff and defendant under the aforesaid scenario, decided to work independently. 31. Per learned counsel with regard to the business of 'Bulk Trade International', however, it was further agreed that the plaintiff would use his 'contactsand 'good officesto settle outstanding issues with the creditors of 'Bulk Trade Internationalfor which the defendant, per learned counsel, would remain liable to the plaintiff. The defendant's learned counsel vehemently argued is also liable to pay the plaintiff his remaining due share out of profits of 'Bulk Trade Internationalearned up to September, 1999. 32. Mr. Adnan Iqbal Chaudhry, learned counsel for the plaintiff further urged that when the plaintiff confronted the defendant for the money owed to the plaintiff and to the creditors, the defendant instead of paying the outstanding liabilities started using of his influence with law enforcement agencies for harassing the plaintiff. Per learned counsel, the amounts, still owed and payable to the creditors approximately are as follows:-- 1. FID SHIP DESPATCH US $ 39186 2. KYUERNATIS US $ 1200 3. SHIP ROUTING US $ 1215 4. PISCESPLANTER US $ 1235 5. GOLDEN FARMER US $ 2500 6. BERY MARITIME US $ 345 7. SPS BROKERAGE COMMISSION US $ 5600 8. TOTAL US $ 51281 33.Mr. Adnan Chaudhry, learned counsel for the plaintiff further submitted that before the learned Commissioner plaintiff (P. W.1) filed his 'affidavit-in-evidencealong with copies of documentary evidence available with the plaintiff. Per learned counsel since the 'originals of documentsare/were lying in possession of defendant, therefore, in view of the requirement of law a notice under Order XII, Rule 8, C.P.C. Was served upon defendant calling upon him to produce originals of documents
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mentioned in the legal notice dated 9-12-2010. Such notice and postal receipt have already been produced in plaintiff's evidence as Exh . P. W. 1/2 and Exh. P. W.1/3 respectively. 33. The defendant, per learned counsel besides avoiding 'cross-examinationof the plaintiff (P.W.1) has also failed and/or ignored to lead any evidence in his defence. Lastly, Mr. Adnan Chaudhry, learned counsel for the plaintiff forcefully submitted that in absence of any rebuttal/evidence from the defendant's side the plaintiff's suit deserves to be decreed as prayed. 35. In support of his contention the learned counsel for the plaintiff has placed reliance on the following case-laws:-- (a) Friends Engineering Corporation The Mall Lahore v. Government of Punjab and 4 others (1991 SCMR 2324) (b) Purushotham Haridas and others v. Messrs Amruth Ghee Co. Ltd., Guntur and others (AIR 1961 Andhra Pradesh 143 (V 48 C 41)) 36. I have heard the learned counsel for the plaintiff and my issue-wise finding is as follows:-- 37. Issue No, 1: From pleadings and evidence led by the plaintiff, it appears that the ship charter business referred to the instant suit is called 'Bulk Trade Internationalwhile the 'shipping agent businessis called 'Bulk Trade (Pvt.) Ltd'. The parties evidently are not at issue with regards to 'Bulk Trade (Pvt.) Ltd'. The issue No,1 relates only to 'Bulk Trade International'. The onus of proof of this issue lies on the plaintiff's shoulder. From the pleadings and evidence led by the plaintiff it is manifestly clear that it is not the case of the plaintiff that 'Bulk Trade Internationalwas a partnership firm of the plaintiff and the defendant. Rather the plaintiff's case is that he was engaged by the defendant for and to provide services to the defendantsbusiness named and styled as 'Bulk Trade International'. For such services of the plaintiff, as compensation the defendant had promised 10% from the profits of business of 'Bulk Trade International'. 38. Besides positive assertions in the written statement, the averments made and evidence led by the plaintiff to the effect that the plaintiff was engaged to provide services to the ship, charter business styled as 'Bulk Trade Internationalat 10% promised compensation out of the total profits of business of 'Bulk Trade Internationalhave gone un-rebutted. The defendant though admits that plaintiff was being an employee of 'Bulk Trade (Pvt.) Ltd'., and not of 'Bulk Trade Internationalbut he asserts that plaintiff is not entitled to any profit from the business of ship chartering called 'Bulk Trade International'. Regarding such assertions and support thereof, however the defendant has failed to either cross-examine the plaintiff (P. W.1) and/or otherwise lead any evidence in support of his stand. As far as the terms and conditions agreed between the parties are concerned from evidence led by the plaintiff it is established position that the operational part of 'Bulk Trade Internationalwas handled by the plaintiff and the financial and accounting side of business was handled by the defendant. Of course, averments made by the plaintiff to this effect have also gone un-rebutted. 39. Out of the net profits of the ship chartering business of 'Bulk Trade Internationalevidently, the plaintiff's promised share is 10%. 'Bulk Trade International', no doubt, is a sole proprietorship of the defendant. Being a British citizen the defendant was not permitted to run the shipping business in Karachi. Per wish, therefore, the plaintiff provided services to the business of 'Bulk Trade Internationaluntil separation of ways in September, 1999. The use of plaintiff's 'contactsand 'good officesfor settling the up-front disputes with creditors of 'Bulk Trade Internationaland resolution thereof to some extent is not disputed. The payment of a sum of DHS AED 3,30,3000 [equal to US$ 92,5491.00] to the plaintiff is not a disputed fact which fact itself is a prima facie proof of plaintiff service, provided to 'Bulk Trade International'. For and to establish the relationship and arrangements reached between the parties in respect of business of 'Bulk Trade International', the plaintiff in evidence has produced a document dated 23-2-2000 [Exh. P.W.1/5] from which inter alia, US $ 45,000.00 seems as appropriated towards plaintiff's claim of 10% chartering profit and the
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remaining US $ 47549.00 against paid amounts to the creditors of 'Bulk Trade Internationalby the plaintiff. 40. In the written statement the defendant, owns the liability of the creditors of 'Bulk Trade Internationalas his own responsibility. Nonetheless, the liability adjusted by the plaintiff is not disputed/denied. 41. Apart from the above the contents of paras 4 to 7, 9 and 10 of the plaintiff's 'affidavit-in- evidencehave gone un-challenged. Exh.'P.W.1/1', Exh. P.W.1/5to Exh.'P.W.1/8indeed establish of providing of services by the plaintiff to the business of 'Bulk Trade Internationalon the agreed 10% share out of the total profits of 'Bulk Trade International'. 42. Despite opportunities, neither the defendant 'cross-examinedthe plaintiff (P.W.1) nor did he lead any evidence. The contention/assertions and the evidence led by the plaintiff are thus deemed to be admitted by the defendant. The general denials on the part of defendant in his written statement are of no evidentiary value. The averments made in the written statement cannot be treated as evidence because the defendant has failed to come forward to examine himself. Only the admissions made directly or indirectly in the plaint and/or in the written statement can be used and/or relied upon. It is a fundamental principle of law that if, a material fact is 'deposedin 'examination- In chief and not rebutted in 'cross-examinationthen the same is deemed to be admitted. In this regard reliance can be placed on the following cases. (a) ?Nazir Ahmed Khan and 2 others v. Muhammad Ashraf Khan and others (PLD 1975 Karachi 598 Placititm 'A') wherein it was held as follows:- "7 ... ...As a rule pleadings are not evidence by themselves; the statements made by defendant in the written statement, could be used as evidence in cases where they amount to admission of the plaintiff's pleas. These admissions could be direct or even by implication, and in both cases are proof in themselves." (b) Muhammad Noor Alam v. Zair Hussain and 3 others [Reported in 1988 M LD 1122 Placitum A], following rule was laid down by a Division Bench of this Court: "5 A written statement contains averments of a party which are to be proved through cogent evidence. If a party does not produce any evidence in support of the contents of its written statement, in the absence of any admission on the part of a plaintiff the averments contained in the written statement cannot be treated…
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