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Petitioner: MESSRS TAJ CONSTRUCTION COMPANY VS Respondent: FEDERATION OF PAKISTAN AND 9 JUDGMENT
Court Name: Sindh High Court Judge(s): Zaffar Hussain Mirza, Syed Sajjad Ali Shah Title:MESSRS TAJ CONSTRUCTION COMPANY vs FEDERATION OF PAKISTAN AND 9
JUDGMENT
Reported As: 'PLD 1982 Karachi 378 Result: Order accordingly Judgment JUDGMENT ZAFFAR HUSSAIN MIRZA, J.-These five letters patent appeals arise out of the judgment dated 21-5- 1964 by the learned Single Judge on the Original side of the Karachi Bench of the erstwhile High Court of West Pakistan whereby the suits filed by present appellants were dismissed. Since the learned Single Judge disposed of all the suits by a common judgment for the reason that the same arose out of common facts, we also propose to dispose of these appeals by the present judgment. 2. Briefly the facts leading to the present appeals are that the appellants filed separate suits for recovery of money allegedly due to them on account of the work done by them in pursuance of contracts for building quarters, houses and other buildings for the Pir Illahi Bakhsh Cooperative Housing Society at Karachi except in L. P. A. No. 83/68 in which the claim also pertains to a house built by the appellant therein for respondent Pir Illahi Bakhsh (since deceased and represented by his L. Rs.) in his individual capacity. Pir Illahi Bakhsh Co-operative Housing Society (hereinafter referred to as the Society) came into being somewhere in the end of 1947 or the 'beginning of 1948 for the purpose of building and providing residential accommodation for the displaced persons who had migrated to Pakistan in the wake of the Partition The case of the appellants is that the Society invited tenders from contractor for the enormous work involved in the scheme and in response thereto tenders were submitted by the appellants which were acce2ted in pursuance of Resolution of the Society dated 3-2-1948 on the rates mentioned in- the tender documents. The appellants were then given work orders for different portions of the area on which the buildings were to be constructed. The work started almost immediately and each of the appellant admits
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having received periodical payments from time to time from the Society which was in the meantime duly registered under the Bombay Co-operative Societies Act, 1948 on 30-3-1948. The appellants claim to have executed considerable portion of the work awarded to them but while the remaining work was in progress the Managing Committee of the Society was served with a show-- -cause notice for supersession and replacement by a nominated body on the allegation that the affairs of the Society had been grossly mismanaged. As a result of these proceedings by order dated 24-1-1951 the Registrar of Co-operative Societies, Karachi, in exercise of his powers under rule 48(1) of the Bombay Co-operative Societies Rules ordered the supersession of the Managing Committee for one year and by a further order dated 2-3-1951 nominated a Managing Committee of his own choice comprising of seven members including the Chairman. It is the case of, the appellants that not--withstanding the aforesaid change of Management they carried on their work, but on 10-4-1951 the newly constituted Managing Committee of the Society forcibly dispossessed them from the site of work with the result that the building materials collected by them for the purposes of the works were also left behind and misappropriated by the Society. The appellants then demanded the payment of their dues from the Society and also served notice under section 80 of the C. P. C. On the Government of Pakistan as well as a notice under section 70 of the Bombay Co-operative Societies Act upon the Registrar. On getting no satisfactory response to their claims, they filed separate suits impleading the Government of Pakistan, the Society, Pir Illahi Bakhsh and one Major Mahmoodul Hasan as defendants. 3. Each appellant claimed decree for a sum certain as balance of payment due on account of work done and materials taken over by the respondents, jointly against the respondents. The defence of Government of Pakistan, who filed a separate written statement, was that it is not concerned with the transaction in suit although the Registrar of Co-operative Societies, Karachi had admittedly taken action by supersession of the Managing Committee and appointment of a new Committee in its place. Thus the Government denied the claim of the appellants and also its liability. Respondent No. 2, the Society and Pir Illahi Bakhsh, however, filed a joint written statement, also denying their liability. They also denied that any contract was entered into between them and the appellants. They averred that the alleged contract or its copy has never been produced before- any Officer of the Society and also repudiated the allegation that the Managing Committee of the Society ever authorised the execution of any such contract or ratified the same. As to the claim set up by the appellants, it was stated that there was nothing on the records of the Society to support the same and as such it was repelled. Respondent No. 4 Major Mahmoodul Hassan filed a separate written statement admitting most of the allegations made by the appellants. He attributed male fides against the Registrar, Co-operative Societies in taking action against the Society and dispossessing it of its property. His plea was that respondents Nos. 1 to 3 were liable to settle the final bills of the appellants and make payment of the dues as all the documents were in their possession. A number of issue of law and fact were framed by the Court on the pleadings of the parties in each suit, but as the matter was argued before us, it seems to us, the final out--come of these appeals mainly turns on the decision of some common points. It is mentioned in the judgment of the learned Single Judge that the parties had examined evidence in one suit only and agreed that the evidence recorded therein shall be treated as evidence in all the suits. 4. In the impugned judgment the learned Single Judge has taken the view that the suit against Government of Pakistan was not maintainable as the notice under section 80, C. P. C. Was not, served on the Chief Commissioner of Karachi, who was the Provincial Government for purposes of the then Federal Capital Area of Karachi. Ha further held that there was no privity of contract between the Government of Pakistan and the appellants and, therefore, it was not liable to be sued. As to the validity of the alleged contract and its binding force on the society, the learned Judge found that there was nothing in the evidence to indicate that the contracts with the appellants
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were confirmed in writing by the Society after it was registered Body. As to the liability of respondent Pir Illahi Bakhsh, the learned Judge found that he was in no way responsible for giving the contracts to the appellants as alleged. The learned Single Judge rejected the evidence of respondent Major Hassan to the effect that the tenders submitted by the appellants were approved by the Managing Committee of the Society in the first instance and by the General Body of the society finally on 3-2-1949. In this view of the matter the learned Judge gave a finding that there was no valid contract between the appellants and the society; and that respondent Major Hassan alone is responsible under the contract for the loss sustained by the appellants in his individual capacity. As to the question whether the appellants had established the quantum of work done by them, the learned Judge came to the finding that there was no evidence on record to establish that the contractors had done any extra work beyond the work specified in the contracts. He was, however, of the opinion that some work was done by the appellant under the contracts, but the extent thereof and its value had not been proved by any evidence produced by the appellants. Accepting the evidence of the defence witness Jamaluddin overseer of the society who was deputed to physically check the work claimed to have been done by the appellant in each suit, the learned Judge held that on the assessment made by this witness of value of work alleged to have been done by the appellants and taking into consideration the admitted payments received by each, it was clear that the appellants were made over payment far in excess of the dues claimed by them. The learned Judge also found against the appellants on the question whether the appellants were stopped from executing the contract work by the newly constituted Managing Committee. He was, however, of the opinion that there was some evidence to the effect that the plaintiffs had left some building materials on the site after they had stopped working, but there was nothing to prove the value of the material so left behind. As to the allegation that there was collusion between the appellants and Major Hassan, the ex-Secretary of the Society the learned Judge reached the conclusion that there was no evidence to estab--lish the allegation. In the view of the learned Judge Major Hassan withheld the relevant books of account and other receipt pertaining to the contracts out of his own personal motive to avoid liability arising out of the contracts entered into by him with the appellants on behalf of the society in" excess of his authority. As to Suit No. 368 of 1954 (L. P. A. No. 83 f 1968) the learned Judge held- that the appellant partnership firm in this- case was different from the one who was awarded the contract and, therefore, had no locus stand! to file the suit. Finally the learned Judge also reached a finding that in Suit No. 368/1954 (L. P. A. No. 83/1968) there is no evidence that the house allegedly built by the appellant in that case personally for respondent Pir Illahi Bakhsh belonged to him. On these aforesaid findings the learned Judge dismissed all the suits filed by the appellants. 5. These appeals were heard together and the leading argument was addressed on behalf of the appellants by Mr. Ibadat Yar Khan, learned counsel appearing for the appellant in L. P. A. No. 164/1964. Messrs Habibur Rehman, S. M. Saeed and Munawwar Abbas appearing on behalf of the rest of the appellants supplemented the arguments of Mr. Khan and dealt separately with peculiar features of their respective cases. On behalf of Government of Pakistan, Mr. S. Hamid Hussain replied to the arguments addressed for the appellants and Mr. Ilyas Ahmed generally replied to the arguments on behalf of the Society. 6. It will be convenient first to take up the question whether the Government of Pakistan is liable to be sued in these cases. It was urged on behalf of the appellants that since the Registrar of Co- operative Societies, Karachi was acting under the administrative control of the Government of Pakistan under the provisions of Pakistan Establishment of Federal Capital Order, 1948 (G. G.-O. No. 15), it was vicariously liable for the acts of the Registrar. Since the main claim of the appellants arises out of the alleged contracts between them and the Society, it was conceded that the claim against the Government was based on tort. The allegation relevant in this connection is that the
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newly appointed Managing Committee illegally dispossessed the appellants from the site of the work and took over the materials belonging to them lying on the site. It was further urged that the learned Single Judge erred in holding that notice under section 80 was invalid as it ought to have been served on the Provincial Govern--ment. We are unable to agree with the learned Judge that the notice of suit should have been served on the Provincial Government or the Chief Commissioner of Karachi. Section 80, C. P. C. On its plain reading provides that in case of a suit instituted against the Central Government notice has to be served on it through its Secretary. Since the Government f Pakistan was impleaded as a party, it would appear that notice was Tightly served on the said Government. However, we agree with the learned Single Judge that so far as the claim relating to the contracts is concerned, the Government of Pakistan is not liable for want of privity. There is no evidence on the record to indicate that the Government was in any way responsible for the alleged action of forcibly dispossessing the appellants. The supersession of the Committee was ordered by the Registrar in exercise of his powers under rule 48 of the Rules framed under the Bombay Co-operative Societies Act and 'by virtue of clause (3) of rule 48 all the powers and duties of the Committee, during the period of supersession, are exerciseable by the newly appointed Committee. Thus it is clear that under the law any action taken by the Committee appointed by the Registrar would be deemed to be the action of the Managing Committee of the Society for which the Society alone can be held responsible. In any case the supersession of the Committee is not in question in these cases and action taken in pursuance of statutory powers by the statutory functionaries cannot be deemed to be the responsibility of the Government of Pakistan under whose administrative control through the Chief Commis--sioner, Karachi the Registrar may be working. It was urged by Mr. Hamid Hussain that there is nothing in the evidence to support the allegation that the building materials were appropriated by the Government or any of its Officers. We agree with this submission and hold that Government of Pakistan is not liable for anything done by the Committee newly appointed by the Registrar. Additionally it was argued by the learned counsel for the Government that the suit was barred by limitation. Reference was made to Article 2 of the 1st Schedule to the Limitation Act which prescribes a period of 93 days for bringing a suit for compensation for doing or for omitting to do an act alleged to be in pursuance of any enactment and the period of limitation commences from the time when the act or omission takes place. The other possible Article attracted in the case is Article 36 dealing with a suit for compensation for any malfeasance, misfeasance or non-feasance independent of contract which provides a period of two years. The cause of action for the suit as pleaded in the plaint arose against the Government of Pakistan on 2-1-1-1951 and continued until 10-4-1951. But all the suits were filed in the year 1954 and were, therefore, clearly barred by limitation. In Province of East Bengal v. S. M. Faruque PLD 1959 Dacca 268the Dacca High Court held that a suit for damages for eviction from requisi--tioned premises on orders of Requisition Officer passed under colour of legal duty was governed by Article 2 of the Limitation Act. No argument was submitted in reply to these submissions. The suit against the Government, therefore, appears to be barred by limitation and was, therefore, rightly dismissed. 7. It will be convenient next to take up the liability of respondent Pir Illahi Bakhsh. In the plaints filed by the appellants their case is that at different times the aforesaid respondent called the respective appellant through respondent Major Hassan who was the Organizer of P. I. B. Co- operative Housing Society and offered him the building contract in ques--tion; and in consequence of this offer each of the appellants entered into a contract with the Society. In L. P. A. No. 164/64 the time given is "about the middle of 1949", in L. P. A. No. 82/68 it is "towards the middle of 1 948", in L. P. A. No. 83,/68, 84/68 and L. P. A. No. 85/68, it is "towards the end of 1947". It may be recalled that the Society was registered on 30-3-1948, before which it was an unregistered Society. Respondent Pir Illahi Bakhsh in his written statement has denied this allegation and in his evidence
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has explained the circumstances in and the extent to which he was associated with the Society. He has stated that on establish--ment of Pakistan he was a Minister in the Sind Cabinet incharge of the portfolio of Education and Local-Self Government. He was apprised of the miserable condition in which the refugees including respondent Major Hassan were living in camps. At the request of the aforesaid refugees they were shifted to the land where the P. I. B. Colony is now located. At this stage Major Hassan suggested the idea of establishing a colony for the refugees for which a Co- operative Housing Society could be formed and which was in fact formed in March 1948, with Major Hassan as its Organizer. He was then offered the Presidentship of the Society and was elected as such. He then became Chief Minister of Sind in May, 1948. According to him the entire work was being done by Major Hassan and had nothing to do with the work of the Society. He categorically denied having called the appellants and entrusted them with any work. After the supersession of the Managing Committee he was nominated by the Government as its Chairman. As regards the alleged house constructed for him by the appellant in L. P. A. 83/68 he stated that two plots of land were allotted to his minor nephew and he constructed a house thereon with the help of a mistri. He paid for all the materials and the cost of the construction and has denied that Taj Construction Company had built this house. As already mentioned the learned Single Judge found the said respondent not to be responsible for the contracts in any way. In this behalf he has referred to the admitted position that the Society had passed a Resolution dated 30-1-1948 authorising him to invite tenders and accept one or two of them. He has also referred to Resolution No. 7 (Exh. A/51) dated 3-2-1948 which clearly indicated that the acceptance of the tenders, even if this was a genuine document, was not done by the said respondent as it bears the signature of Major Hassan alone. Before us the claim against the said respondent was not pressed seriously and in any case we find no evidence on the record nor was any referred to in support of the allegation that the said respondent was in any way person--ally liable. The case of the appellants seems to be that the contract was given on behalf of and under the authority of the Society. The said respondent cannot, therefore, be held liable in his individual capacity. As to the claim regarding the house, reference was made to the evidence of Muhammad Khan in L. P. A. No. 83/68. He has not stated in his evidence that respondent Pir Illahi Bakhsh entrusted the work of construction of his house to him. The only thing he stated was that his firm had built 450 quarters and a first class bungalow which is in the possession of the said respondent. Admittedly the work of the house was outside the tender work and finds no mention in the contract. This witness further made categorical admission that it was Major Hassan, who had asked him to build the house and promised that the Society will pay for the work after recovering the same from Pir Illahi Bakhsh. From these admissions it is clear that there was no privity of contract between the appellants and the said respondent. Learned counsel for the appellants in this case conceded that there is no evidence as to the quantity or value of the work allegedly done on the house. The claim regarding the houses as against Pir Illahi Bakhsh has also not been proved. In this view of the matter we hold that the suit was rightly dismissed against him also. 8. I propose now to take up the claim of each appellant separately. L. P. A. No. 164/64 The claim of the appellant in this case is for Rs. 52,585 for the work done and the material left at site, the particulars of which have been given in Annexures 'A' to 'A/1'. The contract in this case is alleged to have been entered into 28-2-1949 vide letter of acceptance of tender (Exh. B-3) which reads as follows;-- "Your tender dated 13-2-1949 is hereby sanctioned as per General Meeting Resolution No. 7 dated 3-2-1948. You are hereby directed to commence the work forthwith. A copy of the schedule of rates is attached herewith. (Sd.) (S. M. Hassan) Organizer"
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Schedule 'B' attached to this letter (Exh. B-4) describes the quantities of work with corresponding rates for building one barrack consisting of six quarters. This document is endorsed with the following words: "Approved in the General Meeting on 2-2-1948 with the condition of the supply building material on Government rates. (Sd.) (S. M. Hassan) 3-2-1948" It has to be borne in mind that the Society was registered on 30-3-1948. As pointed out by the learned Single Judge, Resolution No. 7 dated 3-2-1948 referred to the tenders of three appellants in other appeals. He reached the finding that with regard to the acceptance of the tenders of other appellants there is nothing on the record except the acceptance letter from Major Hassan. It has also been pointed out earlier that the learned Single Judge reached the, finding that there was no valid contract between the appellants and the Society. It was, therefore, urged in this appeal by Mr. Ibadat Yar Khan that Major Hassan had authority to enter into contract with the appellant which was binding on the Society. In this behalf the submission was that the learned Single Judge ignored other relevant resolutions of the Society on record. In this behalf reference was first made to the Minutes of the General Meeting of the Society held on 5.4-1948 (Exh. 13-B). These Minutes contained the following three resolutions : (1) Resolution No. 3.--11 members of the working Committee shall remain as usual and all t he powers vested in the Society have been conferred upon all those members and it was approved that the society be made a limited concern subject to the deposit of at least Rs. 2,0(10 by each of these members within 3 months and Rs. 4,000 within 6 months. (ii) Resolution No. 4.-The Committee unanimously appointed Honourable Pir Illahi Bakhsh, Mahmoodul Hassan and Moulana Abdul Hamid Sahib Qadri as Directors and full powers were given to them. (iii) Resolution No. 5. The Organizer has been given full powers to make payments with the consultations of Honourable Pir Illabi Bakhsh and Abdul Hamid Qadri and it was approved. It was submitted that reading Resolutions Nos. 4 and 5 above together it is clear that the Society authorised the three gentlemen mentioned therein as Directors to exercise all powers of the Society. The next resolution referred to was passed in the Meeting held on 16-7-1948 which approved the "formation of one Managing Board for the Society who on their own responsibility should delegate all their powers regarding constructions, expenditure, receipts and payments etc. To the Organizer and they themselves shall, from. Time to time, check the accounts and supervise the work". The names of seven persons were mentioned as having been elected as members of the Managing Board including the above-mentioned three gentlemen. Finally we were referred to the Minutes of the General Meeting held on 16-9-1948 in which Resolution No. 4 reads as under;-- "All the members of the Committee and other members unanimously approved to give powers to the Organizer to carry on all the constructions as he likes as the society has full confidence in him. The proposal to authorise the Organizer to spend the amount upto completion was approved and it was approved to complete the mosque and school etc. After taking the price of shops, etc." On the strength of the aforesaid Resolutions on record it was urged that the Organizer (meaning thereby Major Hassan) had delegated authority to bind the Society in regard to contracts for construction of buildings. Additionally it was pointed out that the three Directors mentioned in Resolution No. 4 dated 9-4-1948 referred to above, had impliedly consented to the contract as cheques of running payment were signed by them and Major Hassan. Finally it was pointed out that in the General Rules and Directions for guidance of the contractors issued . By the Society (Exh. 42), Major Hassan was authorised to open tenders and reject anyone of them and, therefore, under the doctrine of In-door Management the Society was bound by his acts.
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9. As against the above it was argued by Mr. Ilyas Ahmad, learned counsel appearing for the Society that fraud was committed by the Organizer of the Society against the Society as is reflected in the Report of the Deputy Director (Co-operation and Development), Government of Pakistan to the Registrar of Co-operative Societies, Karachi in an enquiry into the affairs of the Society dated 5-7-1950 (Exh. 23) which led to the order dated 5-7-1950 issuing show-cause notice to the Society and finally to the order of superses--sion. Counsel further submitted that there was no General Body which consisted only of six members and the appellants were all involved with Major Hassan in the commission of the fraud, with the result that the Managing Committee was in total usurpation of authority. It…
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