JUDGMENT SHAUKAT UMAR PIRZADA, J.---This appeal has .Been directed against the judgment and decree dated 3-7-2003 passed by the learned Civil Judge, Mailsi, whereby the appellant's ,suit for recovery of Rs.63,68,900 has been dismissed.
2. The brief facts giving rise to this appeal are that the appellant is a partnership firm which has instituted the recovery suit A through its managing director/partner, Mian Muhammad Tariq.
Respondent No.1 is also a firm and is sued through Khan Ahmad Nawaz Khan Khichi, who has been impleaded as defendant No.2 in the suit. The said defendants have been impleaded as respondents in the instant appeal. The appellant's firm is owner of a factory known as Tariq Gulzar Industries, Sardar Pur Jhandey, where cotton ginning and ,pressing process is carried out. This factory is equipped with costly machinery and has required infrastructure and installations. This factory is leased out for ginning and pressing purposes and its necessary repairs are carried annually. At the commence of cotton season 1998-99, the necessary annual repairs were carried out at the factory by spending Rs.1,00,000. To run the business of the factory Muslim Commercial Bank Limited (MCB Ltd.) Mailsi Branch has allowed finance limit of Rs.7.5 Million under Agreement for Financing on Mark-up Basis executed between the bank and appellant. This limit has been secured against the mortgage of factory and pledged of all the stocks at the factory, which are insured with the insurance company recommended by the bank. Needless to state that the amount of loan is to be repaid to the bank with the agreed markup. On the commencement of cotton season 1998-99, respondent No.2 contacted the appellant for securing lease of the factory and a deal was struck through an agreement between the parties, whereby respondents agreed to pay Rs.4 Lac for the cotton season 1998-99 commencing from November, 1998 to April, 1999 as lease money for the said period. In addition to that Rs.1,00,000, which the appellant spent on the repairs/renovation etc., were also to be paid by the respondents to the appellant. So, the respondents undertook to pay Rs.5,00,000 till the first week of December, 1998 to the appellant, which were never paid. As per the agreement cotton fee and other levies/taxes of Government Departments were to be paid by the respondents including electricity bills etc. To the concerned departments and that respondents were entitled to utilize bank limit available to the appellant with the condition that the same would be repaid along with the mark-up and the cheques issued with regard to the said limit would be credited to the respondents' account lying with the MCB and the said amount would be utilized only for the factory purposes and respondents' stocks would remain pledged with the bank and salaries of the godown keeper and insurance charges and other expenses would be borne by the respondents. As per the agreement, respondents started running the factory and pledged the production/stocks with the bank, which appointed godown keeper.
Respondents started utilizing the financial limit in a manner, detailed in para-8 of the plaint. The respondents could not dispose of cotton bales timely, therefore, cotton market crashed and respondents neither paid lease money to the appellant nor principal amount of loan and mark-up to the bank. The appellant in order to stop the bank from any action, paid Rs.5,00,000 and respondents were liable to pay to the bank following amounts:- Liability of the MCH Rs.96,97,000 Lease amount for the Rs.5,00,000 year 1998-99 along with cost Lease money for the season 1999-2000Rs.4,00,000 Last bill paid by respondents by Rs.63,046 borrowing money from the appellant Seasonal fees/charges Rs.36,000 Total Rs.1,10,20,046 As respondents failed to repay the bank's liability, therefore, it auctioned the pledged 1049 cotton bales against a consideration of Rs.46,51,140. By deducting the said amount out of the total liability of Rs.1,10,20,046, respondents are liable to pay Rs.63,68,900, which they have failed to repay, hence, the recovery suit. The suit was contested by the respondents through filing written statement containing various pleas including that the said agreement dated 3-10-1998 is forged and fabricated document and the lease money was not Rs.4,00,000 rather Rs.2,25,000, which were paid to. The appellant under an oral agreement and that the respondents themselves incurred expenses of the factory repairs. It was also averred that the defendants never utilized the appellant's bank limit and have no concern whatsoever with the same and they have paid all bills and nothing is outstanding against them, rather the appellant has illegally and forcibly took possession of 1049 cotton bales of the respondents in their absence and consequently F.I.R. No.219 of 2000 dated 24-1-2000 under section 380, P.P.C. Was registered against the appellant at Police Station Sadar Mailsi, as he sold the said cotton bales illegally and they reserve the right to recover the cost of said bales from the appellant. In view of divergent pleadings of the parties following issues were framed:--
(1) Whether the defendants executed lease agreement dated 3-10-1998, in favour of the plaintiff?
OPP
(2) If issue No.1 is proved in affirmative, whether the plaintiff is entitled to recover the suit amount from the defendants? OPP
(3) Whether the plaintiff's firm is unregistered? If so, its effect on the suit? OPD
(4) Whether the defendants paid Rs.2,25,000 to the plaintiff as lease amount and incurred the expenses of repairing from their on pocket? OPD
(5) Relief.
In support of his plea, the appellant produced 5 witnesses, namely, Ali Asghar, Manager, Muslim Commercial Bank Ltd. Mailsi, P.W.1., Abdul Malak, P.W.2., Muhammad Aslam, P.W.3., Mian Muhammad Tariq P.W.4. And Noor Muhammad P.W.5. And also tendered in evidence documents Exh.P.1 to Exh.P.73, while respondents produced 04 witnesses, namely, Ahmad Nawaz, one of the respondents DW-1, Fida Hussain, DW-2, Aziz Ahmad, DW-3 and Abdul Wahid D.W.4 and tendered only F.I.R. No.29 of 2000 in evidence Exh.D.1 in support of their case.
After hearing learned counsel for the parties, the learned Trial Court dismissed the appellant's suit vide judgment and decree dated 3-2-2003, hence, this appeal.
3. Learned counsel for the appellant inter-alia contends that the impugned judgment and decree are result of non-reading and mis-reading of the evidence available on the record. The impugned judgments and decrees have been passed with pre-conceived notion by the learned trial court which has acted arbitrarily while picking up the pieces of statements of P.W.2. And P.W.3. Out of context in order to justify the dismissal of the instant suit. The learned Trial Court has acted illegally and without jurisdiction while ignoring the material contradictions apparent in the statements of D.W.1/Ahmad Nawaz, D.W.2/Fida Hussain, D.W.3/Aziz Ahmad and D.W.4/Abdul Wahid. He has further contended that the bias of the learned Trial Court against the appellant is evident from this fact alone that P.W.2./Abdul Malik and P.W.3/Muhammad Aslam in their statements have categorically stated that respondent No.2 has signed the agreement in their presence and even then it was held that the appellant has failed to prove the execution of the lease agreement dated 3-10-1998 by the respondents in his favour. He has further contended that arbitrariness of the learned Trial Court is proved beyond shadow of doubt, when it absolutely ignored the judgment of this Court dated 9-3- 2000 tendered in evidence as Exh.P.73, while passing the impugned judgment and decree which amounts to not only committing contempt of this Court but has also rendered in impugned judgment and decree as a nullity in the eye of law. Learned counsel for the appellant has submitted that the impugned judgment and decree are contrary to the record, hence, not sustainable, therefore, be set aside and the suit be decreed.
4. Learned counsel for the respondents has controverted the contentions of learned counsel for the appellant and contended that the impugned - judgment and decree of the learned Trial Court are in accordance with law and record of the case and supported the same. He has stated that the appellant has failed to prove his case before the learned Trial Court, as evidence produced by him is not trustworthy, therefore, rightly disbelieved by the learned Trial Court. He has submitted that the instant appeal be dismissed.
5. We have heard learned counsel for the parties and perused the available record.
6. Our issue-were findings are as under:-- Issue Nos.1, 2 and 4. We have carefully gone through the record and have minutely scanned the oral and documentary evidence produced by the parties. Admittedly, the factory in question was leased out by the appellant to the respondents at the commencement of cotton season 1998 and it was only for one season, 1998-99, but there are differences between the parties on the mode and terms and conditions of the lease agreement. It has been averred in the plaint that the agreement was for one cotton season from November, 1998 to April, 1999 for lease money of Rs.4,00,000 for that season and respondents were obliged to pay Rs.1,00,000 for the repairs of the factory carried out by the appellant at his expense and payment of Rs.5,00,000 on account of lease money and expenses on repairs, was to be made till the first week of December, 1998, which amount has never been paid to appellant. It has been also averred in the plaint that the appellant's factory was sanctioned finance limit for carrying out the business and an agreement for financing on mark-up basis has been executed between the bank and appellant. This finance facility has been secured by the bank against mortgage of the factory and stocks lying there. Under the lease agreement, appellant agreed to allow the respondents to utilize the said finance facility for carrying out the business on the condition that 'they would pay the principal plus mark-up and insurance fee etc; Under the agreement, respondents were also liable to pay cotton fee and cesses/taxes including the bills such as electricity to the concerned departments. The respondents started utilizing the limit, which is evident from the details of 25 cheques given in para. 8 of the plaint, that were issued by the appellant's firm in favour of the respondents in respect of the said finance facility and the said amounts were utilized by the respondents. "The respondents could not dispose of the cotton bales at the proper time, therefore, cotton market crashed and respondents neither paid the principal amount nor mark-up to the bank. The appellant in order to stop the bank from any action paid Rs.5,00,000 and respondents were liable to pay the bank following amounts:-- Liability of the MCH Rs.96,97,000 Lease amount for the Rs.5,00,000 year 1998-99 along with cost Lease money for the season 1999-2000Rs.4,00,000 Last bill paid by respondents by Rs.63,046 borrowing money from the appellant Seasonal fees/charges Rs.36,000 Total Rs.1,10,20,046 As the respondents failed to repay the bank's liability, it auctioned the pledged stock i.e. 1049 cotton bales against a consideration of Rs.46,51,140. By deducting the said amount .Out of the total liability of Rs.1,10,20,046, respondents' liability reduced to Rs.63,68,900, which they have failed to pay. In support of his contention, appellant has tendered in evidence Exhs.P.1 to P.24 and P.41, the cheques issued by the appellant's firm in favour of the respondents which were credited to their account and they utilized the amount for various purposes including payment to the insurance company and salaries to the godown keepers, who were taking care of the stocks on behalf of the bank. The appellant has filed the lease agreement dated 30-10-1998 in the Court at the time of institution of the suit, as is evident from the list of documents filed, wherein the same has been shown at Serial No .1. Documents Exh.P .27 to Exh. p . 30 and Exh. P.32 to Exh.P .39 are the correspondence between the bank and the appellant, whereby the bank has been repeatedly demanding the payment of its dues, whereas'
Exh.P .40, rxh . P .45 , Exh.P .46 and Exh.P .47 are documents pertaining to the pledge of cotton bales with the bank, while Exh.P.48 is a notice from the bank convening the bank's intention to sell the pledged goods, while Exh.P.49 to P.68 are vouchers issued in the name of respondents and Exh.P.17 is notice dated 15-12-1999 issued by the WAPDA to the appellant threatening discontinuation of the service line and removal of equipment. The respondents in their written statement have denied the execution of the agreement dated 3-10-1998 (Exh.P-30) by contending that the same was forged and fabricated document and lease agreement was oral and not for Rs.4,00,000 rather for Rs.2,25,000, which were paid to the appellant and that the respondents themselves incurred expenses of repairs. The respondents have further contended that they never utilized the appellant's bank limit and paid all bills and nothing is outstanding against them, rather the appellant has illegally and forcibly took possession of 1049 cotton bales of the respondents in their absence and consequently F.I.R. No.219 of 2000 dated 24-1-2000 under section 380, P.P.C. Was registered against the appellant at Police Station Sadar Mailsi, for illegally selling their said cotton bales. In support of their contentions, they. Have produced only one document, which is F.I.R. Exh.D .1. As regards the details of cheques contained, in para-8 of the plaint, which have been issued by the appellant's firm to the respondents or on their behalf to pay the charges, either to insurance company or godown keepers and the contents of sub-para-I to IV, it has been noticed that the respondents have miserably failed to rebut the contents and documents referred to by the appellant in para. 8 and that the respondents have avoided to reply the same and wherever they have replied, they have kept their stance vague, evasive, and irrelevant, which are reproduced hereunder for facility of reference:-- {{URDU TEXT}} The reply of the above para. Has been given by the respondents in Para No.8 of their written statement which is reproduced hereunder for appreciating the contentions of both parties:-- ' {{URDU TEXT}} Before proceeding further, it would be appropriate to point out here that evasive F reply or denial of material facts by respondents is not only against the provisions of Order VIII, Rules 3 and 4, C.P.C.
But such conduct has also been deprecated by the courts. Reliance is placed on "Shamsul Hassan and 6 others v. Karachi Transport Corporation through Managing Director and 2 others" (2001 CLC 942), the relevant portion reads, as follows:-- "Under Order VIII, Rule 3, C.P.C. The denial is to be specific. It provides that it shall not be sufficient for a defendant in written statement to deny generally the grounds alleged by the plaintiff but the defendant must deal specifically with each allegation of fact of which he did not admit the truth except damages. According to Order VIII, Rule 4, C.P.C. Where a defendant denies an allegation of fact in the plaint he must not do so evasively but answer the point of substance."
The disapproval of evasive denial of facts is also taken as admission by the courts as has been held in "Messrs Muhammad Amin Muhammad Bashir Limited and another v. Pakistan through Secretary, Ministry of Communications, Rawalpindi and 5 others" (2000 CLC 1559 Karachi), the relevant portion reads as follows:- "As a rule pleadings are not evidence by themselves; the statements made by defendant in the written statements, could be used as evidence in cases where they amount to admission of the plaintiffs pleas: These admissions could be direct or even by implication, and in both cases are proof in themselves. This rule could be equally applied in the matter of plaintiffs. In the cases where the defendant has failed to specifically deny any allegations of the plaint or where it was admitted even by implication, such fact being all admitted fact could be considered as part of admitted facts. In the case of Muhammad Noor Alam (cited at Serial No.III above), following rule was laid down by a Division Bench of this Court:-- "A written statement contains averments of 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 statements, in the absence of any admission on the part of a plaintiff the averments contained in the written statement cannot be treated as evidence."
In the light of the above case law, the evasive reply and implied admission of contents of para. 8 of the plaint, amounted to admission thereof by the respondents which proves the appellant's contention that under the lease agreement (Exh.P-31), the Bank's facility/limit was utilized by the respondents.
Without prejudice to the above, it has been noted that despite evasive denial, respondents could not rebut the issuance of cheques (detailed in para 8 of plaint) by the appellant in their favour and they stated only that the said cheques were not received by them. This contention is belied by the statement of account Exhs .P .25 and P.43, as also Exhs.P .49 to P.68, which are vouchers/receipts and admittedly signed by D.W.2/Fida Hussain and D.W.3/Aziz Ahmad. Mere denial of para-8 (I to iv) by the respondents is also of no consequence. As the contents of these sub-paras of the plaint are supported by the documents Exhs.P.27 and P.28, which are the applications addressed to MCB jointly by the appellant and respondent No.2 and are bearing their signatures, wherein they have requested for time to repay the liability, while Exh.P.29 which is a letter issued by the bank advising the borrower to dispose of the old stocks and showing bank's liability as Rs.9.447 million, which has been utilized/received by respondent No.2. These documents further show that respondents have been interacting with the bank with regard to the finance facility and have also been corresponding with it. If the finance was not availed/utilized by the respondents or, their stocks/cotton bales lying in the factory were not pledged with the bank, then why they with the appellant, were interacting and corresponding with the bank and for what purpose?. Interestingly, this documentary evidence has been totally ignored by the learned Trial Court while passing the impugned judgment and decree. The contentions of the respondents that they have no connection with the financial facility in question and only the appellant has availed and utilized the same and that he has stolen their stocks of 1049 cotton bales which were never pledged with the Bank and appellant is liable to reimburse them value the ?Of, have not only been completely eroded by the contradictory statements of DW.1 to DW.4, wherein they have taken conflicting pleas, but also effectively demolished by judgment of this Court dated 9-3-2000 passed in Writ Petition No.1291 of 2000, whereby the only documentary evidence produced by the respondents i.e. F.I.R. Exh.D.1 registered against the appellant at the instance of respondent No.2, was quashed and auction of the pledged stock/cotton bales by the MCB was kept intact. The relevant portion whereof is reproduced here:- "I have gone through the several documents appended with the writ petition. The contents of the writ petitioner as narrated above, are borne out from a perusal of the said documents. I particularly asked the learned counsel for the respondent/complainant as to the status of the cotton bales in question and it must be said to the credit of the learned counsel that he has very fairly stated that the cotton bales were in fact pledged with the Muslim Commercial Bank Ltd. Mailsi as stated in the writ petition. He, however, complains that the Bank without obtaining a decree from a Court of competent jurisdiction could not have disposed of the cotton bales. 1 will not be committing upon the merits of the said contention in view of the civil suit pending between the parties wherein the said question might arise. However, one thing is certain that it is admitted on all hands that the cotton bales were in possession of the said Bank. Now the ingredients of an offence punishable under section 380, P.P.C. Is commission of offence is a building used for the custody of property. As per section 378, P.P.C. Commission of theft involves moving of a property with intention to take dishonestly the same out of possession of any person. I feel no hesitation in observing that the said person mentioned in section 378, P.P.C. In the present case is the Muslim Commercial Bank Ltd. As admittedly the goods were in its possession. Thus even if the goods were so removed by the petitioner or other person mentioned in the F.I.R., they were moved from the custody of the said Bank and not the complainant as alleged by him in the said F.I.R. Thus, I find myself in agreement with the learned counsel for the petitioner that the F.I.R. Is false inasmuch it alleges removal of goods from the possession of the complainant when they were not so in his possession."
(4) The petitioner has placed certified copy of the contempt application dated 13-1-2000 referred to in park-6 of the writ petition. I find that in the said contempt application (Annexure-F), it is stated in para-4 that it was on 6-1- 2000 that the petitioner along with several other persons went to the premises and took possession of 1049 bales of cotton. A perusal of the F.I.R., however, reveals that the- complainant laid information at Police Station Sadar .Mailsi on 24-1-2000 stating that on 22- 12000 at 4-00 p.m. The petitioner along with his accomplices came to the premises and removed 1049 bales of cotton. This glaring discrepancy does lead one to believe that deliberately false averments have been made in the F . I . R.
(5) In view of the above discussion, I find F.I.R. No.29 dated 24-1-2000 to be false and motivated by malice and quash the same. The writ petition is accordingly allowed leaving the parties to bear their on costs."
It may not be out of place to mention here that this judgment has not been challenged by the respondents and the same has attained finality. It goes without saying that the respondents counsel has admitted that the stocks/cotton bales of the respondents lying in the factory were ,pledged by them with the bank against G financial facility availed/utilized by them and consequently auction whereof by the bank was considered in order. It is strange enough that the learned Trial Court has not taken notice, of this judgment, which was not only available on the case file, but also tendered in evidence by the appellant as. Exh.P.73. This shows that for all intents and purposes, the learned Trial Court has flouted the said judgment by showing utter disregard to the same in the impugned judgment and decree, which is highly deplorable. The findings of the learned Trial' Court with regard to lease agreement dated 3-10-1998 that the same has not proved by the appellant and his two witnesses P.W.2 and PW.3, who were marginal witnesses thereof, is also contrary to the record. Both the witnesses have categorically stated that the agreement was read over to them before signing and respondent No.2/defendant No.2 signed the said document in their presence. Both the witnesses remained unshaken on this stance, therefore, the learned Trial Court has wrongly concluded that Exh.P.31 has not been proved. This suit has been filed on 4-1- 2000 and the said lease agreement was also filed with the plaint at the time of institution of the suit, therefore, mere non-mentioning of its date in the plaint is immaterial, as the documents, filed by the appellant in the suit were part of the appellant in the suit were part of the record. More-over, learned Trial Court has miserably failed to take notice of the fact that it has been categorically mentioned in the said judgment dated 9-3-2000 passed in Writ Petition No.1219 of 2000 (Exh.P.73) that the factory in question was leased out to the respondents vide agreement dated 30-1-1998 for the season 1998-99 and one of the terms of the lease was that lessee was to clear the liabilities of the bank. Perusal of the entire judgment would reveal that this contention has not been then controverted by the respondents before the Court, which amounts to acceptance or admission of this term of the lease agreement and this admitted position has already attained finality since 9- 3-2000 through the judgment (Exh.P.73). By ignoring all these facts unfortunately, the learned Trial Court has miserably failed to act with independent and judicial mind. As regard the statements of DW.1 to DW.4,the same are full of contradictions. Statement of DW.1/ respondent No.2 is full of contradictions, evasive, showing his ignorance about material facts, hence, not reliable. He stated that he has not studied the plaint. He has further stated that he has no knowledge that the suit for rendition of account has been amended and converted into suit for recovery. He has also stated that he did not know whether written statement has been filed or not. He has also stated that he does not remember that Exh.P.49 to P-52 and P-54 bear his signatures or not. He has further stated that he did not remember the signatures of Fida. Hussain/DW.2 and that he did not remember whether Exhs.P.49 to P-52, P-54 to P-58 and P-60 to P-66 and P-68 bear the signatures of Fida Hussain/DW.2. He has also stated that he did not remember whether Aziz Ahmad/DW.3 was his employee and Exhs.P.59 to P-61 bear his signatures or not. He further stated that he did not know that due to non-payment of cotton duty, Excise Department issued warrants of arrest and attachment in the name of the appellant, despite the fact Exh.P.69, which are warrants of arrest and attachment issued by the Assistant Collector Excise and Taxation, are on the record. He has also stated that he did not remember that how much amount was credited to his account and also stated that {{URDU TEXT}} He has further stated that he did not know whether Exh.P.27 bears his signature or not. He has made all his remaining statement in the same manner. DW.2/Fida Hussain has admitted that the bank has posted Godown keeper and Chowkidar at the factory and the daily report of the stocks was sent to the bank. He has also admitted that cheques Exhs.P.1 to P-24 were received by him and that the amounts of the said cheques were transferred in the respondent No. 1/Ali Zaib's account. He has also admitted that receipts/vouchers Exhs.P.49 to P-58 bear his signatures and Exhs.P.59 to P- 61 bear the signatures of Aziz Ahmad/DW.3 and Exhs.P.62, P-63 and P-68 bear his signatures. He has also admitted that Exh.26 bears the signature of respondent No.2. After assessing and evaluating the evidence of the parties, we have reached to the irresistible conclusion that the appellant through oral as well as documentary evidence has successfully proved the execution of the lease agreement Exh.P.31 and utilization of the finance facility by the respondents, which they have failed to re-pay. The appellant has also successfully proved that the appellant is entitled to recover the claim contained in the plaint, while the respondents are unable to rebut the appellant's claim which is fully supported by both oral and documentary evidence produced by the him. The only document produced by the respondents/defendants is F.I.R. Exh.D .1, which was quashed vide judgment dated 9-3-2000 even prior to the institution of the suit in hand, therefore, the findings of the learned Trial Court on the above issues are erroneous, result of non-reading and misreading of evidence, reflecting its arbitrariness and bias against the appellant, hence, set aside.
ISSUE No.3. The findings on this issue given by the learned Trial Court are upheld.
RELIEF. In view of the above, this appeal is allowed with costs throughout and the suit of the appellant/plaintiff is decreed in his favour and against the respondents/ defendants.
While parting with the judgment, we may observe that conduct of the learned trial Court is unfair and not reflecting independent, impartial and judicial mind, therefore, this judgment may be placed in the personal file of the Presiding Officer concerned.