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Petitioner: HAROLD ROBERTHENRY LIND VS Respondent: BRITISH INSULATED CALLENDER's CONSTRUC JUDGMENT
Court Name: Sindh High Court Judge(s): Durab Patel Title:HAROLD ROBERTHENRY LIND vs BRITISH INSULATED CALLENDER's CONSTRUC
JUDGMENT
Reported As: PLD 1970 Karachi 315 Result: Suit decreed Judgment JUDGMENT The plaintiff has filed this suit for damages for defamation amounting to Rs. 5 lacs. According to the plaint, he is the President and Managing Director of a group of Companies incorporated in Canada known as the Canbrit Group. This group enjoys a very high reputation and he has been its representative in Pakistan since 1960, and, on its behalf entered into negotiations for construction work with firms, companies, the Provincial and the Central Governments. In the events that happened, in or about April 1965, he obtained a sub-contract from the defendant, on behalf of the Canbrit Group, for carrying out soil investigations on the proposed Landhi/Dhabeji Transmission Line of the Karachi Electric Supply Corporation Ltd., Karachi, and the defendant was aware that he was acting as the Managing Director of the said Group when it placed this sub-contract. However on account of "personal squabbles" between the plaintiff and the officers of the defendant, who were actuated by malice, the defendant illegally terminated this sub-contract and on the 13th April 1965, published the following notice in the newspapers circulating in both wings of Pakistan: ---Public is hereby informed that our clients British Insulated Callender's Construction Company Limited, Karachi have terminated the contract awarded to Mr. H. R. H. Lind, said to be of the Canbrit Group, Canada, residing at 49-D, Block No. 6, P. E. C. H. Society, to carry out Soil Investiga--tions on proposed Landhi/Dhabeji Transmission line, with effect from 8th April 1965. The said Mr. H. R. H. Lind has no concern of whatsoever with our clients and any one dealing with him on behalf of our clients will do so at his own risk and account.--- The contents of this notice were false, malicious, defamatory and without justification, because the sub-contract in question had been awarded not to him but to the Canbrit Group which he
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represented because termination of the sub-contract was illegal and because the words "said to be of the Canbrit Group" in the aforesaid notice were false, malicious and defamatory. In addition to this Public notice the defendant had sent him a legal notice terminating the sub-contract on false grounds therefore he had replied to the said notice and demanded damages for defamation, and as the defendant did not comply with this demand, filed this suit. 2. In its written statement the defendant denied all the allegations in the plaint. It said that it had no knowledge of the alleged high reputation of the Canbrit Group or of the plaintiff's claim that he was its Chairman or Managing Director. It also stated that the plaintiff had falsely represented to it that the Canbrit Group was registered under the Companies Act in Pakistan and thereby induced it to enter into the said sub-contract. It further stated that it had been induced by the plaintiff to enter into this sub-contract because he had led it to believe that the Canbrit Group had all the equipment required for the soil investigation; therefore it had given him advances amounting to Rs. 10,000 between the 30th January and 15th Febru--ary 1965. But it found later that he was not able to carry out the contract within the stipulated period because of lack of equipment and material, and that he had in turn sub-contracted the work to another company without its approval. It also contended that the plaintiff had wrongly tried to pass of as a consultant whereas he was only a contractor, and that he had obtained credit for himself from the North Western Hotel, Karachi in the name of the defendant's customer namely, the Karachi Electric Supply Corporation Ltd. He had also got involved in Court cases for non-payment of debts. In these circumstances, it submitted that it was entitled to terminate its sub-contract with him and also to publish a notice of this termination in the newspapers. It admitted that it had sent him a legal notice and that it had also published the impugned notice in the newspapers. But it submitted that, in the circumstances outlined in its written statement, it was fully justified in publishing a notice in the newspapers for the protection of its own interest. It denied that the notice was false or malicious or defamatory, it also denied that the words "said to be of the Canbrit Group" were defamatory and pleaded that these words were inserted because it had dealings only with the plaintiff. In the result it denied liability for the plaintiff's claim and claimed compensatory costs under section 33-A of C. P. C. 3. On these pleadings several issues were framed, but learned counsel for the plaintiff admitted that the Canbrit Group was not registered in Pakistan under the Companies Act. In view of this admission I re-settled the issues, and counsel limited their arguments to the following issues: --- (1) Whether the plaintiff is President, Managing Director and the majority share-holder of the Canbrit Group as stated in paragraph No. 1 of the plaint? If so, to what effect? (2) Does the plaintiff enjoy wide reputation and high status as stated in paragraph No. 3 of the plaint? If so, to what effect? (3) Are the contents of the Public Notice mentioned in paragraph No. 6 of the plaint malicious and without lawful justification? If so, to what effect? (4) Is the defendant entitled to special cost under section 36-A and entitled to any relief? If so what? The plaintiff examined himself and a witness, whilst the defendant examined its local Manager and six witnesses. Both parties also produced documents in support of this contention. I shall now examine these issues:- 4. Issue No. I.-The plaintiff said in his evidence that the Canbrit Group consisted of three limited companies namely the Canbrit Corporation Limited, the Canbrit Consultant Ltd. And the Canbrit Construction Ltd. Which were all registered in Canada and that he, together with Mr. R: H. Lind and Mr. James Mullally Q. C., had formed these companies. He did not produce the Memorandum or Articles of Association of these companies to show that he was the Chairman or the Managing Director of these companies as contended by him, therefore Mr. Mehboob argued that his statement was not fit to be believed. However, he had examined J. P. Rego of the National and
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Grindlays Bank, Metropole Hotel Branch, Karachi, J. P. Rego said in his evidence that the Canbrit Consultants Ltd. Had an account with his Branch of the Bank since 1952, that this account had been operated by the plaintiff as its Managing Director, and that all cheques had been paid into an account in the name of Canbrit Consultants Ltd. He further said that in pursuance to an enquiry by the plaintiff to ascertain the position about this account from Canada, his bank had made enquiries from the Canadian Imperial Bank of Commerce whether the plaintiff was the Managing Director of Canbrit Consultants Ltd. And the Canadian Imperial Bank of Commerce had confirmed by cable that the plaintiff was the Managing Director of this Company (Vide Exh. 6). This witness was a: completely disinterested witness and Mr. Mahboob's only criticism of his evidence was that, according to the plaint, the plaintiff had represented the Canbrit Group since 1960 whilst according to P. W. J. P. Rago, Canbrit Consultants Ltd., had had an account with the National and Grindlays Bank, Karachi since 1952. The discrepancy is trivial and I hold that the plaintiff was the Managing Director of the Canbrit Consultants Ltd. And was associated with the Canbrit Group. 5. Issue No. 2. The plaintiff has not produced any evidence of his reputation or status, but this does not entitle defendants to defame him. However the failure of the plaintiff to give evidence on this issue will be relevant to the question of the quantum of damages. 6. Issue No. 3.-This is the real issue in this suit and Mr. Jatoi submitted that the circumstances leading to the defamatory publication in the newspapers were relevant to show that the defendant was actuated by malice. On the other hand, Mr. Mahboob denied that the notice was defamatory, but in the alternative he submitted that the defendant was protected because it enjoyed qualified privilege, therefore, according to him also, the circumstances leading to the publication of the notice in the newspapers were relevant to his defence. In view of the arguments advanced, it will be convenient first to examine the disputes between the parties, the reasons which led the defendants to terminate its sub-contract with the plaintiff and its reasons for publishing the same in the newspapers. 7. The plaintiff said in his evidence that he has obtained a contract, on behalf of the Canbrit Group, to work as a consultant to the defendants for soil investigation in respect of the transmission lines to be laid by the defendant for the Landhi/Dhabeji area. In support of this evidence, he produced a copy of his quotation prepared by him on behalf of the Canbrit Group to the defendant dated the 28th January 1965 (Exh. 8), the letter of intent of the defendant to the Canbrit Group dated the 30th January, 1965 signed by Mr. Gillitt (Exh. 9) and a copy of the defendant's order addressed to the Canbrit Group dated the 29th March 1965 (Exh. 13) also signed by Mr. Gillitt. He further said that this contract required soil drilling in order to obtain samples of the soil, which he had to analyze for the defendant, and that he had given the drilling cont--ract to the Swise Boring Company. He then said that he had learnt through some friends of the termination of this contract by the defendant through the notice in the Dawn which I have quoted in para. 1 and three days thereafter he received a notice from the defendant's Advocate terminating his contract. The plaintiff was cross- examined at length about his claim to represent the Canbrit Group and about the damages claimed by him. He also admitted in cross-examination that the companies of the Canbrit Group were not registered under the Pakistan Companies Act, and that he had entrusted the drilling operations to the Swise Boring Overseas Company with the knowledge of the defendant. No question was put to him that he could not have entrusted the drilling operations to that company under the terms of his agreement with the defendant, nor was he questioned on the allegation that he had induced Mr. Gillitt to enter into the agreement with him by falsely representing that he had drilling equipment. Finally, it is very material to observe that no question whatsoever was put to him in cross-examination about the period for completing the contract or about the allegation that due to interruption of work or other reasons he had failed to complete the contract within the time fixed for its performance.
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8. Although the plaintiff's evidence shows clearly that his dealings were with Mr. Gillitt, the then Manager of the defendant, the defendant did not examine Mr. Gillitt on the flimsy plea that he had left the country at some unspecified date, but instead it examined its present Manager, D. W. Nasiruddin Hassan. D. W. Nasiruddin Hassan claimed to know about the negotiations with the plaintiff because he was the Assistant to Mr. Gillitt. But in his cross-examination he admitted that he did not know all that transpired between Mr. Gillitt and the plaintiff, and that he had no say in the making of the contract. Despite this, he said n evidence that the defendant's contract was with the plaintiff and not with the Canbrit Group, that the plaintiff had to complete his contract within 8 weeks and that as his work was very slow the defendant was compelled to terminate it. In this connection he relied on the defendant's letter of intent dated the 30th January 1965 (Exh. 9) signed by Mr. Gillitt, and said that this was the contract between the parties and that under it the plaintiff had to complete the work entrusted to him within 8 weeks, which would mean that the plaintiff had to complete the contract by the end of March 1965. But the plaintiff was not cross-examined at all about the period in which lie had to complete the contract and the letter (Exh. 9) does not specify the period for the performance of the contract. It only states that the work should commence by 5th February 1965 and that a final order would be forwarded on 8th February 1965. This would imply that the work was to commence when the formal contract was issued. But, Exh. 13, which is a copy of this formal contract, shows that the formal order was issued on 29th March 1965. This makes it very difficult to believe D. W. Nasiruddin Hassan's statement that the contract had to be completed by the end of March 1965. In order to overcome this difficulty, D. W. Nasiruddin Hassan, who was a clever witness, said that, although a letter of intent was normally followed by a formal order, in the instant case, the work was so urgent that this formality was dispensed with, and the letter of intent (Exh. 9) was the order. But as this letter of intent (Exh. 9) itself states that a formal contract \,.,as to be issued D. W. Nasiruddin's statement is false. Turning now to the copy of the formal order (Exh. 13) produced by the plaintiff it lays down the period for completing "field works" whatever that may mean, but not the time for the completion of the contract. As the defendant did not admit this copy (Exh. 13) 1 have compared the signature on it with the admitted signatures of Mr. Gillitt on Exhs. 9 and 10 and I have no doubt that Exh. 13 was signed by Mr. Gillitt. It is therefore admissible in evidence. In view of the absence of any provision in Exh. 9 and in Exh. 13 about the time for completion of the contract, I am not able to believe D. W. Nasiruddin's statement that the plaintiff had to complete the contract within 8 weeks or by the end of March 1965 or that he was not able to perform it within the agreed period. 9. The defendant's second ground for terminating its sub--contract, which is stated in its notice (Exh. 16) was that the plaintiff had misused it for personal gains. The notice (Exh. 16) did not give any particulars of this allegation, but according to D. W. Nasiruddin Hasan, the plaintiff had obtained credit from a restaurant known as Agha's Tavern in Karachi by saying that his bills would be paid by the defendant and by the defendant's customer, the Karachi Electric Supply Corporation. According to Mr. Mahboob, this evidence was supported by that of D. W. Hakim, Manager of Agha's Tavern. D. W. Hakim said in his evidence that the plaintiff had obtained credit from his hotel by saying that his bills would be paid by the defendant. He further said : "on enquiries I found that the plaintiff had also represented himself as connected with the defendant to the Karachi Electric Supply Corporation. I produce copy of a letter addressed to the Chief Engineer, Karachi Electric Supply Corporation regarding Mr. Lind (Exh. 30)". I am not able to understand why this witness went round making enquiries from the Karachi Electric Supply Corporation about what the plaintiff had told that Corporation about his connections with the defendant. In any case, D. W. S3rkar Hussain, as officer of the Karachi Electric Supply Corporation, produced the file: of his Corporation and dented that any letter had been received-- by the Karachi Electric Supply Corporation from Agha's Tavern as alleged by D. W. Hakim. This means that the copy of the letter to
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the Karachi Electric Supply Corporation (Exh. 30) = produced by D. W. Hakim was a fabrication and that reliance cannot be placed on D. W. Hakim's evidence. It is also, significant that the plaintiff was not cross-examined on the allegation that he had obtained credit from Agha's Tavern in the defendant's name nor was this plea advanced in the written statement. In the circumstances this allegation is not fit even to be considered. As to the other allegation of D. W. Nasiruddin Hassan that the plaintiff had obtained credit in the Karachi Electric Supply Corporation's name, the plaintiff has denied this in his cross-examination, therefore the burden of proving it was on the defendant, the more so as, according to --Mr. Mahboob, the defendant's case for qualified privilege was based on this allegation. But D. W. Sarkar Hussain, who appeared on behalf of the Karachi Electric Supply Corporation, had no knowledge whatever of this allegation. The only-- evidence in support of this allegation is that of D. W. Nasiruddin --Hassan who said in his evidence that he had received a.. Telephone call from Mr. Haider, the Karachi Electric Supply. Corporation's Project Engineer complaining about the plaintiff:--As the defendant did not examine Mr. Haider, D. W. Nasiruddin: Hassan's statement is not even admissible in evidence. But --I would also like to observe here that I have not been impressed-- by D. W. Nasiruddin's evidence, therefore, as the defendant, did not examine Mr. Haider about his alleged telephone call with D. W. Nasiruddin Hassan, I am not able to believe D. W.Nasiruddin's statement about the alleged telephone call and I hold that he has given false evidence. 10. Mr. Mehboob next argued that the defendant was --justified in terminating its sub-contract with the plaintiff because he had obtained it by falsely representing that he was in possession of drilling equipment. The plaintiff has denied this, allegation, and the only evidence in support of this allegation is the statement of D. W. Nasiruddin Hassan that "the plaintiff had told Mr. Gillitt that he was both qualified and equipped. For the job." As the letter of intent (Exh.9) and the copy of the formal order (Exh. 13) do not contain any stipulation in, this respect and as the defendant did not examine Mr. Gillitt, I accept the plaintiff's evidence. Mr. Mehboob then argued that the plaintiff committed breach of contract in entrusting --the drilling operations to the Swise Boring Company. But neither the letter of intent (Exh. 9) nor the copy of the formal order (Exh. 13) prevented the plaintiff from entrusting the drilling operations to anybody else. Additionally, although--- the defendant had its own representative at the drilling operations it never raised any objection at that time to the-- fact that the plaintiff had entrusted the drilling operations to the Swise Boring Company. Learned counsel's arguments are there--fore without merit. 11. Finally, as the plaintiff admitted in evidence that the Canbrit Group was rot registered in Pakistan under the Companies Act, 1913, Mr. Mehboob argued that the defendant was entitled to terminate its sub-contract because of the failure of the Canbrit Group to obtain registration under the said section. But the argument is inconsistent with the defendant's plea, and the evidence of D. W. Nasiruddin that the sub-contract was placed with the plaintiff personally and not with the plaintiff on behalf of the Canbrit Group. If, as claimed by D. W. Nasiruddin in his evidence, the sub-contract was placed with the plaintiff personally, then the question of the registration of the Companies of the Canbrit Group under section 277 of the Companies Act is irrelevant. I shall therefore consider whether the sub-contract was made with the plaintiff as claimed by D. W. Nasiruddin. 12. Apart from the plaintiff's own evidence that the sub--contract was placed with the Canbrit Group, as I have already observed, the defendant's letter of intent dated the 30th January 1965 (Exh. 9), its letter dated the 13th February 1965 (Exh. 10) and the signed copy of its formal order (Exh. 13) which have all been signed by the defendant's then Manager, Mr. Gillitt, are addressed to the Canbrit Group and not to the plaintiff personally. Similarly, the copy of the plaintiff's quotation dated the 28th January 1965 (Exh. 8) and of his progress report to the defendant dated the 22nd March 1965 (Exh. 23) are signed as the Canbrit Group. As this correspondence took place before the dispute between the parties began there is absolutely no reason to doubt its authenticity. Similarly,
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the plaintiff's correspondence with the Swise Boring Overseas Company (Exh. 27) to Exh. 27/7 is also between that Company and the Canbrit Group. This lends further support to the plaintiff's claim that the contract was between the defendant and the Canbrit Group. Finally, a letter written by the defendant's Head Office to its Karachi office on 5th April 1965 (Exh. 38) states as follows :- "You have already dealt with the point that the Canbrit Group were not appointed as our Consultants but as Contractors. When you decided to place this work with the Canbrit Group you informed me . . . . . . . . . . . . ." The reference to the Canbrit Group and not to the plaintiff in the correspondence exchanged between the defendant's own offices establishes beyond any doubt that D. W. Nasiruddin gave false evidence when he said that the sub-contract was placed not with the Canbrit Group but with the plaintiff personally. The sub-contract was placed with the Canbrit Group, therefore I have to consider the effect of the failure of these Companies to register themselves in Pakistan under section 277 of the Companies Act. Under section 277 every company incorporated outside Pakistan has to register itself with the Registrar of Joint Stock Companies and to supply to the Registrar the information prescribed under the section, and the section imposes a fine on any foreign company which fails to comply with any of the requirements of section 277. The section does not contain any provision which would have the effect of invalidating or rendering illegal any contract by a foreign company which has failed to comply with the provisions of this section, therefore I am not able to accept Mr. Mehboob's argu--ment that the defendant was entitled to terminate its sub contract with the Canbrit Group merely because these companies had not complied with the requirements of section 277. 13, No other argument was advanced in support of the plea that the defendant was entitled to terminate its sub-contract with the plaintiff. In the circumstances discussed, not only has the defendant failed to show that it was entitled to terminate the sub-contract, but some of the reasons given by it for this termination are absolutely false. However, assuming for the sake of argument that it was entitled to terminate the sub--contract, the obvious question which arises for consideration is whether it was entitled to announce this termination in the newspapers. Mr. Mehhoob was conscious of the fact that such publicity was not likely to enhance the plaintiff's reputation, therefore he argued that the defendant was justified in publishing its notice in the newspapers because the plaintiff's whereabouts were untraceable, so that there was no other means of informing him about the termination of the sub-contract. In support of this plea he referred me to the evidence of several witnesses examined by him, namely, J. R. Alexander, Muhammad Akram, Haji Amin Sattar and the defendant's local Manager, Nasiruddin Hassan and I shall briefly consider their evidence. 14. In January 1965 the plaintiff had been a tenant of a building owned by Ralli Brothers Ltd. And J. R. Alexander said in his evidence that the plaintiff was ejected by an order of a Rent Controller, Karachi because be had failed to pay the rent of the flat occupied by him to Ralli Brothers Ltd. But the Rent Controller's order (Exh. 26/1) is dated the 2nd February 1965, whilst the notice in the newspapers was published in April 1965, this means that the plaintiff had left the fiat owned by Ralli Brothers Ltd. Long before the period in dispute, and the evidence of Mr. Alexander is completely irrelevant to Mr. Mehboob's argument. Mr. Muhammad Akram was employed in the Swise Boring Overseas Ltd. To which the plaintiff had entrusted the drilling operations of his contract. This witness said "We had some difficulties in tracing the plaintiff on the address given by him." But the plaintiff was not cross-examined on this allegation. Further Mr. Akram produced correspondence between his company and the plaintiff (Exhs. 27/1 to 27/6) and there is nothing in the correspondence to support his statement that Swise Boring Overseas Company was note; able to communicate with the plaintiff at his address, therefore I am not able to accept Mr. Akram's evidence. As to Haji Amin Sattar he had advanced a loan to the plaintiff and, although he had
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obtained a decree against him, he had not been able to recover the entire decretal amount. He said in evidence that he had searched for the plaintiff in the P. E. C. H. S. Area, Karachi but he was not able to trace his whereabouts. I have to state with regret that…
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