' MUHAMMAD' FARRUKH IRFAN KHAN, J.--- The petitioner is aggrieved of the order of the learned Additional District Judge, dated 19-6-2010 whereby he while allowing the appeal of the respondents filed against the order dated 20-1-2010 passed by the learned Civil Judge rejected the application of the petitioner under Order XXXIX, Rules 1 and 2 C.P.C., in a suit for declaration along with permanent injunction.
2. Facts of the case in brief are that the plaintiff/petitioner filed a suit for declaration, along with permanent injunction against the respondents/defendants contending therein that plaintiff is engaged in a business of Carbon Di Oxide CO2 for the last 20 years and was getting its raw material in the form of impure CO2 from the defendant/respondent which is waste product produced during the manufacturer of fertilizer. An agreement dated 3-5-2002 was executed between the parties and the principle agreement was subsequently amended by a supplementary agreement dated 9-9-2003 for a period of ten years i,e, till 8-9-2013 (hereinafter referred to as agreement). According to the terms and conditions of the agreement inter alia price of CO2 gas is to be determined in accordance with Article II whereby CO2 gas was to be supplied starting with a base price @ Rs,2.75 per Kg. With a proportionate increase .In the price with the price of Sui Gas. It was further settled that 25% discount was to be extended, by the respondent/defendant on account of:---
(a) Correction due to varied CO2 composition.
(b) Correction due to impact of gas dryness variable moisture contents in the gas stream.
' It was averred in the plaint that CO2 gas was being provided to the petitioner/plaintiff, however, in the bill for the month of October, 2009 which was issued in violation of agreement, concession of 25% discount was withdrawn unilaterally and instead of 30 days, the plaintiff/petitioner was required to deposit the bill within 15 days. Moreover on account of security further amount was required to be deposited by the respondent /defendant. Being aggrieved the petitioner/plaintiff filed a suit for declaration with the prayer that the defendant/respondent be restrained to raise any demand in violation of terms and conditions of the agreement or to amend the terms and conditions of the agreement unilaterally.
3. Defendants/respondents contested the suit through filing written statement raising certain preliminary objections. Learned trial courts after hearing the parties proceeded to accept the application of the petitioner for grant of temporary injunction vide order dated 20-1-2010. Being aggrieved the respondent preferred an appeal before the learned appellate court, who accepted the same vide impugned order dated 19-6-2010. Being aggrieved the petitioner has filed the instant civil revision.
3-A. I have heard the arguments advanced by both the learned counsel for the parties at length and gone through the record.
4. Orders of both the learned courts below are at variance. Learned trial court accepted the application for grant of temporary injunction, whereas, in the appeal the learned appellate court reversed the findings of the learned trial court vide impugned order dated 19-6-2010, therefore, this Court has to look into the entire aspect of the matter. The matter before us is an application under Order XXXIX, Rule 1 and 2 of C.P.C. And while deciding the same the Court has to take into consideration three ingredients i,e, balance of convenience, prima facie arguable case and irreparable loss. During the course of arguments and with the assistance of the learned counsel for the parties it emerged that a settlement could be arrived at between the parties according to the following terms:---
(1) Gas supply to the petitioner will be resumed immediately by the respondent subject to the following conditions:--
(i) that the petitioner will furnish a security deposit in cash equivalent to the amount of one month's deposit of the supply.
(ii) that a bank guarantee will be furnished by the petitioner for 25% amount of the previous bills which is claimed by the respondent.
(iii) that on account of future supply, bank guarantee for the 25% amount will be provided for such each time supply given to the petitioner.
(iv) That the price of the gas will be chargeable in accordance with the provisions of the agreement between the parties which speaks of proportionate increase according to the increase of the price of sui gas.
(v) That after the assessm ent of the increased price if any difference is payable by either party to one or the other it would be paid in cash.
5. Both the learned counsel sought adjournment to obtain instructions from their respective clients and today the learned counsel for the petitioner submitted that he has no objection if his CO2 supply is restored in the aforesaid terms but the learned counsel for the respondent submitted that his client is not willing to accede to the aforesaid proposal, therefore, the Court is constrained to decide the matter on merit.
6. Prior to discussing the merits/demerits of the application under Order XXXIX Rule 1 and 2 of the C.P.C. It is essential to understand the circumstances in which the agreement was made and the circumstances prevailing currently. From, the tentative assessment of the pleadings of the parties and after hearing the arguments of their respective learned counsel the Court has come to an understanding that when the agreement was entered upon between the parties respondent was a State owned enterprise and did not undertake the business of converting CO2 gas into a marketable product. However, somewhere in the year 2005 respondent-company was privatized by the Government of Pakistan thus it has gone into the hands of private owners. New management in order to improve upon its profitability and return of investment has put up a plant for converting of free CO2 into marketable produce and has thus entered in the same business (which prior to privatization it did not undertake) as that of the petitioner, thus, the respondent has become a direct competitor of the petitioner. It has been vehemently argued before me that the respondent has acted in a similar manner against other companies which were buying CO2 in its free form from it by unilaterally changing the terms and conditions of supply thus resulting in those companies going out of competition . Learned counsel for the petitioner also asserted that the petitioner is one of the last few survivors from amongst the companies to whom the respondent used to supply the said raw material prior to privatization. Thus increase in the price of CO2 not corresponding or proportionate to the increase in the price of sui gas is being used as a coercive measure to drive the petitioner out of business/competition by becoming uncompetitive.
7. Execution of agreement is admitted between the parties and parties are bound to comply with the terms and conditions of said agreement. Apparently, the petitioner is ready to honour the terms and conditions and even the proposal made by this Court in order to run its business but the mala fide of the respondent is apparent on the face of record that as it has itself entered into the business of supply of CO2 and now bent upon to destroy the business of the petitioner by imposing conditions which are prima facie alien to the contractual relationship between the parties. The dispute between the parties regarding interpretation of certain conditions of the agreement can only be resolved after recording of evidence. Prima facie the petitioner has a good arguable case.
The petitioner shall also suffer irreparable loss as stoppage of supply of CO2 which has been continuously being done for the last nine years or so would result in destruction of the business of the petitioner, as it will default in its contractual commitments thus destroying its good-will and reputation in the business that has been built up over the last two decades or so and no amount of money can compensate the petitioner for such a loss of good-will and reputation. As the ingredients of prima facie arguable case and irreparable loss are in favour of the petitioner, thus, balance of convenience automatically tilts in its favour.
8. Resultantly, this civil revision is allowed as a result whereof impugned order of the learned appellate court dated 19-6-2010 is set aside and that of the learned Civil Judge dated 20-1-2010 is restored with a modification that the respondent will restore the CO2 supply of the petitioner in the terms as recorded in para No,4 (1) (i) to (v) of this order.
9. Before parting with this order it is clarified that the observations made by this Court while passing the instant order is .a tentative assessment without having undertaken an in-depth analysis of the case and the same shall not prejudice the main case of either side which of course shall be decided by the learned trial court on merit within four months from the date hereof keeping in view the evidence of the- parties.