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Petitioner: ALVIA TABLEEGHI TRUST AND 8 OTHERS VS Respondent: MUJEEBUR RAHMAN ALVI AND 7 JUDGMENT
Court Name: Sindh High Court Judge(s): Ajmal Mian Title:ALVIA TABLEEGHI TRUST AND 8 OTHERS vs MUJEEBUR RAHMAN ALVI AND 7
JUDGMENT
Reported As: 1984 CLC 796 Result: M. Y. H. Suit decreed Judgment JUDGMENT ' (a) This is a suit filed by Alvia Tableeghi Trust, a private Trust and its Trustees (hereinafter referred to as the Trust) for declaration, injunction and accounts etc. Originally defendant No, .8 being a Trustee of the Trust was shown as plaintiff No, 5 but was transposed into defendant No, 8 as he did not support the plaintiffs' case. ' The brief facts leading to the filing of the above suit are that plaintiff No, 2 Dr. Habibur Rehman Elahi Alvi created plaintiff No, 1 Trust in 1958 under Registered Trust Deed No, 562 of 1958 and also got it registered at Karachi in 1967 under Registered Trust Deed No, 527 of 1967. According to the averments in the plaint the Trust owns immovable landed property and also a salt work known as "Sind Salt Works" with its office at Zeenat Mansion, I. I. Chundrigar Road, Karachi. Defendant No, 1 is one of the sons of plaintiff No, 2 and was also a Trustee of the Trust and was also managing Sind Salt Works, on behalf of the. Trust. It has been averred that in or about August, 1976 another Salt Work, namely, "Khurshid Salt Work" (hereinafter referred to as the Salt Works) was offered for sale by its owners M/s. Khurshid Salt Limited and that plaintiff No, 2 became interested to purchase the salt work. It has been further averred that defendant No, 1 being the son and also a trustee of the Trust was instructed to pursue the matter and to finalize the sale. It has also been averred that the above transaction was finalized under the agreement, dated 28th August, 1976 Exh. 8 for a price of Rs, 7,50,000 out of which a sum of Rs, 1,50,000 was to be paid at the time of the execution of the sale agreement and the balance of Rs, 6,00,000 was to paid to the seller in 12 monthly instalments of Rs, 50,000 between months of March, 1977 and September, 1978 as per schedule to sale agreement, which payment was to be duly backed by a bank guarantee. It has been further averred that
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plaintiff No, 2 got the above bank guarantee from M/s. Muslim Commercial Bank Ltd. It has also been averred that it appears that from the beginning defendant No, 1, who was charged with the duty to finalize the purchase for the benefit of Trust developed dishonest and crooked mind and instead of acting in a clean and forthright manner played foul with the Trust and tried to advance his personal interest at the expense of the Trust and got the agreement made out in the name of faked partnership in the name of Habib Ocean Industries. It has been further averred that defendant No, 1 held out that Khurshid Salt Works had been changed to Habib Ocean Industries, Habibur Rehman being the name of plaintiff No, 2 in order to inspire confidence in him. But he did not disclose that Habib Ocean Industries was a self-styled partnership with totally unconcerned and strange people. It has also been averred that when questioned by plaintiff No, 2 about the mysterious partnership, defendant No, 2 tried to explain that this was a "ghost partnership" and that the partners shown were no other than himself, his own brother-in-law and their sons. It has been further averred that he also pursuaded that the agreement was obtained in the name of partnership to diversify the assets of the Trust and to hold different properties by different names. It has also been averred that plaintiff No, 2 did not accept his explanation and insisted that the bogus partnership should be forthwith dissolved and after two days defendant No, 1 turned up and produced letters of retirement/withdrawal from all the faked partners and assured that the final sale-deed would be obtained in the name of the real purchaser plaintiff No, 1 or in the name of plaintiff No, 2 the provider of the fund. It has been further averred that in spite of his earlier assurances defendant No, 1 is now trying to bypass plaintiffs Nos. 1 and 2. It has also been averred that in reality plaintiff No, 2 had contributed the entire value of the property either arranging cash or by securing bank guarantee and that defendant No, I has already recovered a total sum of Rs, 6,71,904 from plaintiffs Nos. 1 and 2 but has not duly accounted for. It has also been averred that defendant No, 1 has also drawn amount much in excess of the price disclosed in the sale agreement which be claims to have paid to the seller a sum of Rs, 5,00,000 for which he has not produced any receipt or acknowledgement and as such remains unaccountable. On the basis of the above averments the above suit was filed. (b) Defendants Nos. 1 to 5 filed a joint written statement, in which the contents of the plaint have been denied. It has been averred that suit is misconceived and is not maintainable as framed and that it has been filed in contravention of section 92 of the C. P. C. It has been further averred that the purchase of the Salt Works from defendants Nos. 6 and 7 i. e. The previous owner was effected by defendants Nos. 1 to 5 in favour of defendant No, 2 partnership firm. It has also been averred that the possession of the Salt works was delivered to defendant No, 2 pursuant to the sale agreement between defendant No, 2 and defendants Nos. 6 and 7. It has been further averred that defendants Nos. 1, 3, 4 and 5 entered into a partnership deed on the 19th August, 1976and agreed to carry on business in partnership under the name and style of Habib Ocean Industries i. e. Defendant No, 2. It has also been averred that on 25th August, 1976 the partners of the said firm executed a Special Power of Attorney in favour of defendant No, 3 authorizing him to negotiate with Khurshid Salt Works Ltd. For the purchase of the Salt works situated at Mauripur. It has been further averred that the brother of defendant No, 1 (Attaur-Rehman Alvi, now defendant No, 8) who has been in Nigeria for the past several years expressed his willingness to help the defendants financially in setting up an independent business for defendant No, 1 and the other defendants and for this purpose he remittted to defendant No, 1 in Pakistan a sum of Rs, 1,63,651 in the month of May, 1976 and that the aforesaid partnership was formed after receiving the above fund and defendant No, 3 was authorised to negotiate the purchase of the Salt works. It has also been averred that on or about 28th August, 1976 an agreement was entered into between Habib Ocean Industries and Khurshid Salt Works Ltd. For the purchase of the Salt Works for a total consideration of Rs, 7,50,000 out of which a sum of Rs, 1,50,000 was paid to Khurshid Salt Works Ltd. From the fund remitted to Pakistan
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by plaintiff No, 4 (now defendant No, 8 (for the benefit of defendant No, 1 and the balance of Rs, 6,00,000, was agreed to be paid in 12 equal monthly instalments commencing from March, 1977. It has been further averred that necessary guarantee in favour of Khurshid Salt Works was furnished by Muslim Commercial Bank Ltd. On behalf of Habib Ocean Industries and a counter guarantee in favour of Muslim Commercial Bank Ltd. Was executed' by all the partners of Habib Ocean Industries. It has also been averred that plaintiff No, 2 was fully aware of this independent venture and business of the defendants with the fund made available by plaintiff No, 4 (i. e. Now defendant No, 8) and in fact requested the bank to furnish necessary bank guarantee and wife of plaintiff No, 2 deposited certain title deeds of the property standing in her name as the security and executed the letter of undertaking in favour of Muslim Commercial Bank Ltd. In June, 1977 and that the said documents were released by the bank and returned by the defendants to the plaintiff as substantial repayments were made by defendant No, 2 to the seller. It has been further averred that on taking possession of salt works from Khurshid Salt Works Ltd., business was carried by the defendants and instalments of Rs, 50,000 each were paid by defendant No 2 with effect from March, 1977 onwards upto the date with the result that Rs, 4,00,000 representing more than half of the balance consideration has been paid to Khurshid Salt Works Ltd. And liability for payment of the remaining amount is exclusively with the defendants, for which the defendants have furnished a counter-guarantee in favour of Muslim Commercial Bank Ltd. (It may be observed that the above written statement was filed on 12th November, 1977.) It has also been averred that the business of the Habib Ocean Industries and the purchase of the Salt Works from Khurshid Salt Works Ltd. Is the sale and exclusive business of the defendants and the plaintiffs have no right, title claim or interest therein of any kind or nature whatsoever and the claim now made in suit is totally dishonest, misconceived, incorrect and not a maintainable in law. (c) Defendant No, 8, who was plaintiff No, 4 and was transposed as defendant No, 8 at his request as observed hereinabove has filed a separate written statement in which inter alia it has been averred that the contents of the plaint are admitted to be the extent that plaintiffs being Trust and plaintiff No, 2 its founder. It has been averred that although defendant No, 8 was induced and compelled to be shown as a co-trustee but yet no consent has either been taken from him or his signature has been obtained in the suit. In has been further averred that defendant No, 8 was approached by defendant No, 1 to help him financially as he wanted to establish his own business in the field of suit business and hence for this purpose the answering defendant had remitted an amount of Rs, 1,63,104. It has also been averred that defendant No, 1 had informed him that they had purchased M/s. Khurshid Salt Works in the name and style of Habib Ocean Industries, a partnership firm established by then alongwith defendants Nos. 3, 4 and 5. It has been further averred that from the very beginning it was very well in the knowledge of the plaintiffs that M/s. Khurshid Salt Works had been purchased in the name of M/s. Habib Ocean Industries which was established as a partnership firm. On the basis of the above averments it has been denied that the plaintiffs were entitled to any relief. (d) Defendants Nos. 6 and 7 have filed a separate joint written statement, in which inter alia it has been averred that the suit was not maintainable as the same was filed without obtaining the consent of the Advocate-General under section 92, C. P. C. It has been denied that Khurshid Salt Works was over offered for sale by defendant No, 6. It has been averred that defendant No, 6 was interested in selling Salt Works owned by it and that the name "Khurshid" was never offered for sale alongwith the Salt Works, which belong to defendant No, 6 even after the sale agreement. It has been further averred that at all material times defendant No, 3 had visited the answering defendants for purchase of the Salt Work and that the demised Salt Works was sold by defendant No, 6 to defendant No, 2 under an agreement dated 28th August, 1976 for Rs, 7,50,000 out of which they received Rs, 1,50,000 on signing of the agreement and thereafter instalments of Rs, 150,000 per
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month were paid in terms of the sale agreement. It has been also averred that defendant No, 6 had so far received Rs, 5,50,000 from defendant No, 2. It has been further averred that defendant No, 2 has submitted with defendant No, 6 a copy of partnership deed dated 19th August, 1976 and a bank guarantee of Muslim Commercial Bank Ltd. For the payment of the instalments as provided under the said agreement. It has been further averred that defendant No, 6 had agreed to sell the demised salt works to defendant No, 2 for valuable consideration without any knowledge of the alleged claim of the plaintiffs. It has also been averred that in pursuance to legal notice, dated 27th July, 1977 addressed to answering defendants, defendant No, 6 by his letter, dated 30th August, 1977 requested the Advocate for plaintiff No, 1 to furnish absolute proof in support of their claim and allegations but no reply was sent. It has been denied that the plaintiffs are entitled to any relief against the answering defendants. It has been averred that the suit is liable to be dismissed with compensatory costs to these defendants. (e) On the basis of the pleadings of the parties, the following four issues were framed :- (1) Whether the suit is misconceived and not maintainable as framed ? (2) Whether the suit has been filed in accordance with section 92, C. P. C. ? If not what is effect? (3) Whether the defendant No, 2 has purchased the Salt Work on its own behalf or on behalf of the Trust ? (4) What should the decree be? 2. In support of the suit plaintiff No, 2 Dr. Habibur Rehman Elahi Alvi examined himself as P. W. 2 Exh. 15, P. W. 1 Syed Abdul Wadood an Officer of National Bank of Pakistan, Liaquat Bazar Branch, Karachi Exh. 6, P.W. 3 Akhtar Hussain, a retired Senior Civil Servant and Chairman of the Trust Exh. 16, P. W. 16, P. W. 4 Pir Mahfooz Exh. 17, a businessman and P. W. 5 Aftab Ahmed Khan retired Managing Director, National Bank of Pakistan. On the other hand defendant No, 8 examined himself as D. W. 1 Exh. 19 whereas defendant No, 1 examined as D. W. 2 Exh. 20. ' The parties have also produced a number of documents for and against their respective claims. ' It may be observed that issue No, 2 was not pressed and, therefore, no arguments were advanced. 3. (a) The basic issue, is issue No, 3. In support of the plaintiffs' case it has been vehemently urged by Mr. Ibadat Yar Khan, learned counsel for the plaintiffs that from the oral and documentary evidence, it has been proved that the Salt Works was purchased by defendant No, 1 in the name of defendant No, 2 on behalf of the Trust and not for the benefit of the partnership. On the other hand, it was vehemently urged by Mr. Liaquat Merchant, learned counsel for defendants 1 to 5 that the evidence on record has conclusively proved that the Salt Works was purchased for the benefit of the partnership defendant No, 2. (b) In my view, the above issue No, 3 inter alia involves following questions :- (i) Whether in fact defendant No, 1 was instructed by plaintiff No, 2 to negotiate for the purchase of the Salt Works for the Trust and in fact concluded the above negotiation on behalf of the Trust? (ii) Who provided the consideration. (iii) What was the conduct of the parties after the purchase? (c) As regards the above first point, it may be observed that in order to prove the first point plaintiffs have examined plaintiff No, 2 P.W. 2 Habibur Rehman Alvi, P.W. 3 Akhtar Hussain, P.W. 4 Pir Mahfooz and P.W. 5 Aftab Ahmed Khan. It may be advantageous to reproduce in verbatim what has been stated by the above witnesses on the above point :- (i) P.W. Dr. Habibur Rehman Elahi Alvi has deposed as follows :- "In the year 1975 I came to know that Khurshid Salt Works is for sale, which is owned by Dinshaws. I convened a meeting of the Trustees and at the meeting the Trustees decided that a Trust should make an effort to purchase Khurshid Salt Works. This Salt Works was owned by a Parsi family. The Trustees and I thought that we should offer to purchase this property not in the name of plaintiff No,
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1 because the Parsi owners might not like to sell the property to a Trust, whose one of the main functions is Tableegh and accordingly it was decided to obtain this property in the name of Habib Ocean Industries which incorporate a part of my name. ' I entrusted the negotiation to my son Mujibur Rehman Alvi defendant No, 1 for purchasing Khurshid Salt Works from Dinshaws. In November, 1975 defendant No, 1 congratulated me for his having successfully negotiated purchase of Khurshid Salt Works. He informed me that the property had been agreed to be purchased for Rs, 74 lacs. He further informed me that a sum of Rs, 12 lacs was to be paid at the time of the sale agreement and the remaining amount was to be paid in 12 monthly instalments and a bank guarantee for the balance of Rs, 6 lacs was to be provided to the seller. Accordingly I negotiated it with the National Bank of Pakistan, Central Office on I. 1. Chundrigar Road, Karachi for providing bank guarantee. Mr. Akhtar Hussain was the Chairman of the Trust and he also exerted his own influence on the National Bank of Pakistan for their agreeing to provide bank guarantee by them. Mr. Aftab Ahmed Khan, who was then retired Deputy Managing Director of the National Bank of Pakistan used his influence over the bank for providing the bank guarantee.. ' The National Bank of Pakistan had agreed to provide a bank guarantee provided we give security. The Trust offered its property as security, but the Bank did not accept the properties of Trust as security. Thereafter Mr. Akhtar Hussain, Chairman of the Trust advised me to approach the Muslim Commercial Bank for obtaining the bank guarantee from them. I, therefore, approached Pir Mahfooz who was my friend to help us in obtaining bank guarantee from the Muslim Commercial Bank. Pir Mahfooz informed me that Muslim Commercial Bank has agreed to provide guarantee on behalf of the Trust provided I or my wife should furnish counter-guarantee and security of our property. Accordingly I provided the security of the three plots of land which were standing in my name but which were also be used for the Trust and the security of the house of my wife. The plots of land are situated in Gulshan and the house is situated in the Muhammad Ali Memorial Housing Society, Karachi. The Muslim Commercial Bank had kept the documents of the aforesaid properties with them as security. Thereafter Muslim Commercial Bank issued a bank guarantee in favour of Khurshid Salt Works Ltd. And the Dinshaws delivered possession of Khurshid Salt Works Ltd. To me." (ii) P.-W 3 Akhtar Hussain has stated as follows :- "I know Dr. Elahi Alvi. I know about Alvi Tablighi Trust. I am the Chairman of the Trust since 1967. It is a private Trust. All the funds to the Trust were contributed by Dr. Elahi Alvi, from his professional and personal earnings. ' About four or five years ago, Dr. Alvi had called me to his surgery. ' He told me that Salt Works owned by some Parsi gentlemen was available for sale and that the Trust would like to purchase it. Dr. Elahi's son Mujibur Rehman was there and he was told to negotiate for purchase of the Salt Works. He was at that time one of the Trustees of the Trust. He was told by me as well as by Dr. Elahi Alvi. The Salt Works was to be purchased for the benefit of the Trust. Dr. Alvi told me that Parsi gentlemen might not like to sell Salt Works to the Tableeghi Trust and, therefore, it was decided to purchase the same in the name of Habib Ocean Industry. Sometime thereafter I was called by Dr. Alvi again and I was told by him that the negotiations for purchase of the Salt Works were successful. A sum of Rs, 7,50,000 was mentioned as sale consideration and one and half lacs were required to be paid in cash and for the remaining amount of Rs, 6 lacs, the seller wanted bank guarantee. Dr. Alvi asked me to help him in getting the bank guarantee, and he mentioned certain names of a gentleman who was Manager of a bank. I told him that I knew him very well as he was nephew of the friend of mine. The name of the Manager was Ghulam Hussain Manager of the National Bank of Pakistan (Branch). I was told later on by Dr. Elahi Alvi that he was not able to get a bank guarantee from the said Manager. I had contacted the Manager through telephone to recommend a bank guarantee. The contact was
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made before the guarantee was refused by National Bank of Pakistan. Later on Dr. Alvi through the good office of kir Mahfooz was able to get the bank guarantee from the United Bank Limited. ' P.-W 4 Pir Mahfooz has deposed as follows : - "In the year 1976 the Chairman of Muslim Commercial Bank or President of Muslim Commercial Bank was my friend. I know Dr. Elahi Alvi very well. There was a talk about purchase of Khurshid Salt Works between me and Dr. Alvi. Dr. Elahi Alvi wanted to buy Khurshid Salt Works on instalments and for that he wanted a bank guarantee. He asked me to approach Mr. Garda who was then President of Muslim Commercial Bank and happened to be my ' friend. Dr. Elahi Alvi wanted my help for requesting Muslim Commercial Bank to become guarantor on Trust's behalf for payment of sale consideration of Khurshid Salt Works in instalments. Dr. Elahi Alvi wanted to purchase Khurshid Salt Works for Alvia Tableeghi Trust which he had floated some years back. This talk took place in the clinic of Dr. Elahi Alvi when I dropped in on my way from my office to home. At that time Mujibur Rehman and Dr. Arif were present in the clinic. Both are his sons. This talk took place in their presence. I talked to Mr. Garda and he agreed that his bank would become a guarantor subject to Dr. Elahi Alvi giving the security of his property by way of equitable mortgage to the bank. I had told Mr. Garda that it was a charitable Trust and a good cause to provide bank guarantee. Mr. Garda said that guarantee would be given if security of the property of Dr. Elahi Alvi or his wife is given. I was told after quite some time that the transaction had materialized." (iv) P,-W 5 Aftab Ahmed Khan has stated as follows :- "I am no more in National Bank of Pakistan. I have already retired. I was not in National Bank of Pakistan in or about the year 1976. I remained connected with the National Bank of Pakistan for over 20 years. I know Dr. Elahi Alvi. In the year 1975 or 1976 Dr. Elahi Alvi alongwith his son Mujibur Rehman had come to me to my house. He told me that he was purchasing Khurshid Salt Works in the name of Alvia Trust. He told me that he had paid some cash and remaining amount was to be paid through a bank guarantee. As far as I can remember the amount was Rs, 6 lacs. He had asked me to talk to some officer in National Bank of Pakistan for giving guarantee as I had remained connected with the Bank. I talked to the Officer concerned to consider his case as he was in a position to provide the necessary security and owned some property. He had told me that Mujibur Rehman would come to me to know the progress of the case from time to time. Thereafter Mujibur Rehman came to me once or twice and informed me that he had come under the directions of Dr. Alvi and he informed me of the difficulties which he was coming across from the Bank. As far as I know that the bank had sanctioned the guarantee but bank's terms and conditions were such that Dr. Alvi could not or did not perform. Thereafter I came to know that Dr. Alvi had arranged some guarantee through another bank. Dr. Alvi had told me in the presence of Mujibur Rehman that he was purchasing Khurshid Salt Works for the Trust and he had given out the names of the trustees.- (d) Against the above evidence defendant No, 1 has examined himself. The evidence of defendant No, 8 on the above point does not inspire any confidence as he was at the relevant time in Nigeria. In his letter Exhs. 19/1 and 19/2 through which he remitted the amount referred to hereinbelow, he has not made any reference to the fact that defendant No, 1 intended any Salt Work. In my view even if I were to ignore the testimony of P.W. 2, Dr. Elahi Alvi, the evidence of the above three witnesses, who are men of statutre and of standing and have no plausible reason to depose falsely at the stage of their advanced ages, has proved that in fact defendant No, 1 was authorised to negotiate on behalf of the Trust. It may be observed that Mr. Akhtar Hussain at the time of his examination in Court was 78 years old. He is a retired Senior Civil Servant and had held a number of public offices A including of the Governor of the erstwhile West Pakistan. He has been cross- examined by the learned counsel for defendants Nos. 1 to 5 at length but the above witness has not been shaken on the above point, namely, that the defendant No, 1 was authorised to negotiate to purchase Khurshid Salt Works on behalf of the Trust. The cross-examination of the above witness
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was directed to solicit the fact that there was no meeting of the Trustees of the Trust and there was no decision made for the purchase of the said Salt Works. The above witness has frankly stated that there was no recorded decision authorising Mujibur Rehman to negotiate and to purchase the Salt Works for the Trust as far as he knew. He has also stated that there was no meeting of the Trustees, where it was discussed or decided to purchase the Salt Works from Parsi gentlemen. However, he has denied that discussion took place between him and Dr. Elahi Alvi alone and stated that there were other Trustees, namely, his two sons again stated more sons. It was…
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