' Through instant 2nd Appeal the appellant has assailed the legality of judgment and decree dated 27.9.2012 passed by learned 2nd Additional District Judge, Sanghar in Civil Appeal No, 55 of 2004 "Re-MI s. Golden Textile Mills Ltd. v. M/s. Sun Shine Cotton Ginning & Pressing Factory, Khipro" whereby dismissing the appeal and in consequence thereof the judgment and decree dated 24.4.2004 and 29.4.2004, passed by learned trial Court (Senior Civil Judge, Khipro) in FC Suit No, 24 of 2001, were maintained.
2. Succinctly, facts are that Respondents/Plaintiffs Nos. 1 & 2 filed a suit against the appellant for recovery of Rs, 16,57,981/-wherein pleading that they are owner of Cotton Ginning and Pressing Factory at Khipro under the name and style 'Sun Shine Cotton Ginning and Pressing Factory'. The respondents/plaintiff deals in a business of purchasing raw cotton and then after ginning and pressing it in its factory, sells the same to customers interested therein. In first week of September, 2000 Appellant/Defendant No, 1 through Respondent/Defendant No, 2, a broker, approached the respondents/ plaintiff at Khipro and offered to purchase the pressed cotton bales for Appellant/Defendant No,
1. Respondent/Defendant No, 2, after examining quality of cotton, offered to purchase 200 bales of pressed cotton at the rate of Rs, 1850/- per Maund (7.3 KG) which offer was accepted by respondents/plaintiff through its Partner No,
1. Respondent/Defendant No, 2 then on telephone contacted Defendant No, 1 through its Chief Executive and apprised him of above contract entered into by him with plaintiff on their behalf. The Chief Executive of Defendant No, 1 then talked with Partner No, 1 of the plaintiff and confirmed the contract entered into by Respondent/Defendant No, 2 on behalf of appellant/defendant. The Chief Executive of Appellant/ Defendant No, 1 further asked Partner No, 1 of the respondents/ plaintiff that the transport for transacting purchased cotton bales to its destination at Bhai Pheru would be provided by Appellant/ Defendant No, 1 through Respondent/Defendant No, 2 and the respondents/plaintiff was to deliver the sold goods at Khipro to Appellant/Defendant No, 1 it was assured by Chief Executive of Appellant/Defendant No, 1 that on receiving the goods, the amount payable against Sale Tax and value of goods would be remitted/paid to respondents/plaintiff through demand Draft within month after such delivery of goods. The terms were accepted by the respondents/plaintiff through its Partner No,
1. It is further added that the Respondent/ Defendant No, 2 provided two trucks bearing Registration Nos. 9732/SGD and 7735/DNA through New Afzal Goods Transport Company Shandadpur on 09.9.2000 and the respondents/plaintiff delivered 100 bales of pressed cotton at Khipro and Truck No, 1367/LX5 through people Goods Transport Company Shandadpur on 11.9.200 and the respondents/plaintiff delivered 100 bales of pressed cotton at Khipro. Such delivery was evidenced by receipts issued by above stated transport companies. On receiving the goods, Appellant/Defendant No, 1, through its Chief Executive confirmed on telephone having received the goods and sent an amount of Re. 248,697/- against Sales Tax through Demand Draft issued by bank Al-Habib Lahore in the name of plaintiff on 13.10.2000 which was received on 16.10.2000 and the plaintiff paid the same amount against sale tax by depositing the same in national Bank of Pakistan Mirpurkhas on same day i,e 16.10.2000. The plaintiff had sent both Invoices Nos. 10 and 11 dated 09.9.2000 and 11.9.2000, showing weight of sold goods i,e cotton bales to Defendant No,
1. The value/price of sold goods was Rs, 16,57,981/-. The Chief Executive of Defendant No, 1 had promised on telephone to remit the value of the sold goods to plaintiff at Khipro shortly. It is added that respondents/plaintiff awaited payment by Defendant No, 1 for a month but when no response was shown by it, the plaintiff through its Partner No, 1 contacted on telephone Chief Executive of the Defendant No, 1 and complained to him of negligence in making payment. The Chief Executive expressed regrets and assured plaintiffs partner that the payment would be made soon. Plaintiff through its Partner No, 1 had been reminding the Defendant No, 1 through its Chief Executive for payment of price due from Defendant No, 1 but found all promises fake and empty. The plaintiffs said partner also contacted Respondent/ Defendant No, 2 and complained about negligence of Defendant No, 1 in making payment of value of goods but to no effect. Respondents/ plaintiff lastly on 27.2.2001 sent a letter to the Appellant/Defendant No, 1 through TCS but same was not accepted by appellant/defendant and TCS returned the same undelivered with such reason for non-delivery.
The respondents/ plaintiff claimed that Appellant/Defendant No, 1 turned dishonest and had no mind to makes payment. It was added that respondents/ plaintiff performed its contractual obligations in entirely and the purchased goods were also received by the Appellant/Defendant No, 1 hence respondents/plaintiff is entitled for price/value.
3. In such back ground the Plaintiff/Respondent No, 1 filed the instant suit for said relief (s):--
(a) Order the Defendant No, 1 to pay to the plaintiff an amount of Rs, 16,57,981/- being cost of goods (pressed cotton bales) If for any reason, Defendant No, 1 is not found liable, the Defendant No, 2 be ordered to pay to plaintiff the above stated amount;
(b) Award mark up at the Bank rate on above stated amount w.e .f 15.9.2000 or any other date as may be determined by Honourable Court, to the plaintiff till the above amount is finally paid;
(c) Award Costs of the suit to the plaintiff;.
(d) Grant any other relief to plaintiff to which it may be found entitled under facts and circumstances of the case;
4. After service, the Appellant/Defendant No, 1 appeared and filed written statement while the Respondent/Defendant No, 2, after service, was declared exparte.
5. Out of the pleadings of the parties, the learned trial Court struck the following Issues:--
1. Whether the Defendant No, 1 is liable to pay price of cotton to plaintiff purchased by it through Defendant No, 2?
2. Whether payment made by Defendant No, 1 in shape of cotton yarn to Defendant No, 2 is valid payment of price of cotton of plaintiff?
3. Again what account Defendant No, 2 sent rupees 2,18,697/- to plaintiff through draft issues by Bank Al-Habib Lahore?
4. Whether the Chief Executive of Defendant No, 1 had assured partner of plaintiff for payment of rice of cotton through demand drafts within a month after receipt of cotton bales by Defendant No, 1?
5 Whether the payment of goods in commercial dealing is made in advance and never given on credit?
6. Whether the Defendant No, 1 is entitled to special costs?
7. Whether there was any business transaction, oral or written between plaintiff and Defendant No, 1 for purchase of ginned cotton?
' Whether the Defendant No, 1 had supplied the cotton yarn to the Defendant No, 1 in lieu of ginned cotton arranged by Defendant No, 2?
9. Whether any payment of sales tax was made by Defendant No, 1 for purchase of ginned cotton?
10. Whether the Defendant No, 1 had paid the amount of ginned cotton in the shape of cotton yarn to Defendant No, 2?
11. Whether suit filed by plaintiff at Khipro is hit by Section 20, CPC and is not maintainable?
12. Whether the Defendant No, 2 had transacted with the plaintiff and is responsible to make payment of ginned cotton in the suit to the plaintiff?
13. Whether this Court has jurisdiction to hear this suit at Khipro?
14. What should the decree be?
6. The respective parties lead their evidence and at the end of the day the learned trial Court Judge decreed the suit of the respondents/plaintiff. Such Judgment and decree was assailed by Appellant/Defendant No, 1 through Civil Appeal No, 55 of 2004 who, having heard the respective parties, dismissed the appeal of the Appellant/Defendant No, 1.
7. Learned counsel, for the Appellant/Defendant No, 1, inter alia, argued that both judgments recorded by lower Courts are corumnon-judice; appellants/defendants were having office at Lahore therefore, suit filed at Khipro was not maintainable under the law; impugned judgments are of the result of misreading and non reading of evidence; both lower Courts failed to appreciate the evidence brought on record by the appellants hence instant revision is liable to be accepted. In support of his contentions, learned counsel has placed reliance on the cases reported as 1986 SCMR 310, 1990 CLC 919, 199V MLD 2712, 2004 YLR 764, PLD 1969 Quetta 21 and PLD 1991 SO 180.
8. Learned counsel for the respondents/plaintiff argued that candidly there was no agreement between appellant and respondents but said goods were delivered to the agents of appellant same wino received by them; scope of IInd Appeal is very limited; even erroneous findings recorded by inferior Courts cannot be disturbed in provisional jurisdiction; Section 168 of Contract Act provides that authority of agent can be impliedly. In support of his contentions, he has relied upon 2010 SCMR 1868, 2004 SCMR 877, 1981 SCMR 494, PLD 1993 SC 395, 1986 SCMR 1814, 2009 SCMR 254 and 1996 SCMR 1729.
9. Before going into merits of the case, in hand, I would like to examine the scope of the 2nd Appeal in the matter of concurrent findings of the two Courts below. The scope of the 2nd appeal also A appears to be no at much variance with that of the revision because for succeeding in the 2nd appeal the appellant has to establish, prima facie, that decision was either contrary to law or substantial error or defect in the procedure was committed while deciding the matter. I am guided in my such view with the case laws, reported as: ' In the case of Messers Anwar Textile Mills Limited v. Pakistan Telecommunication Company Limited and others 2013 SCMR 1570 "15. Thus, by reading of this provision, it is apparent that the High Court will be justified to interfere with the decision of the lower Courts when it is contrary to law or failed to determine material issue of law or commits substantial error or defect in the procedure, which may have resulted in error or defect in the decision of the case on merits."
' In the instant matter, two issue (s) require determination(s) to the effect:
(i) Whether there had been a concluded agreement between the parties?
(ii) Whether the act of the Respondent/Defendant No, 2 has any binding upon the Appellant/Defendant No, 1?
10. It would be germane mention that to constitute a concluded agreement it does not, always, depend upon the terms o writing but upon what the parties agreed. In absence of a writing it I the behavior and conduct of the parties which matter to reach to conclude whether there exists any concluded agreement or otherwise. Reference can be made to the case of RTS Flexible Systems Ltd. v. Molkerei Alois Muller GmbH and Co. KG 2012 SCMR 1027 SC UK.
"45. The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations. Even if certain terms of economic or other significance to the parties have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement."
11. Let's examine what is the stand of the Appellant/ Defendant No, 1 in respect of the claim of the respondents/plaintiff with regard to 'agreement/contract'. The examination of the Appellant/ Defendant No, 1 would show that it was admitted:
(i) purchase of goods;
(ii) delivery thereof to the appellant/ Defendant No, 1 by the plaintiff/ respondents;
(iii) this was under some understanding and for consideration;
(iv) there had been admitted payment in favour of the plaintiff/respondent regarding sale tax amount of goods, supplied to '' ' Appellant/Defendant No, 1 by plaintiff/ Respondent No, 1.
' All the above admitted facts are sufficient to hold that the plaintiff/respondents supplied the goods under some understanding and for some consideration, which, even the Appellant/Defendant No, 1 admits. Albeit, there had not been any written agreement between the parties but the parties i,e plaintiff and Defendant No, 1, from their conduct and attitude proved whole transaction to be a result of an agreed agreement (certain terms and conditions).
12. Further, the plaintiff/respondent had claimed categorically that the transaction, through Respondent/Defendant No, 2, was confirmed by the Chief Executive of the appellant/defendant on telephone. Against such claim of the plaintiff/respondent the witness, examined by Appellant/Defendant No, 1, stated in his cross-examination that: "I do not know if Qasim Chief Executive of Defendant No, 1 had confirmed the purchase of cotton on telephone with Partner No, 1 of the plaintiff that they have received 200 bales of cotton from plaintiff."
' This shows that there is no specific and clear denial to such claim of the Plaintiff/Respondent No, 1.
Even otherwise, this plea is of no help for the Appellant/Defendant No, 1 when he admits paying sale tax amount of the goods received directly to the Plaintiff/Defendant No, 1 while saying in his cross- examination that: "It is fact that we had made payment of sale tax in respect of cotton bales purchased from plaintiff.
I see Ex.63 and say that this demand draft was obtained by our Mill in favour of plaintiff."
13. Thus, such admission and act of making payment of the sale tax of the goods received is indicative that the Appellant/ Defendant No, 1, from its conduct, also proved existence of a binding agreement. Thus, I am inclined to hold that there was a binding contract between the parties.
14. Regarding the Point No, ii, I may say that though the Appellant/Defendant* No, 1 denied the status of the Respondent/ Defendant No, 2 to be their agent but claimed him to be a 'broker'. Worth to add here that since it was so claimed by the Appellant/ Defendant No, 1 hence the burden was upon it to have established so, particularly when the acts/commitments, made by the Respondent/ Defendant No, 2, were affirmed by the Appellant/Defendant No,
1. Some portions of the cross-examination of the Appellant/Defendant No, 1, being material to the issue, arc reproduced hereunder:--
(i) It is fact that broker purchase cotton from parties for us;
(ii) It is correct that the goods belong to parties the broker only work facilitates the transactions.
Broker gets his commission....The seller when transaction is completed.
(iii) It is fact that Muhammad Suleman broker had purchased cotton from the plaintiff for us; Since, it already stood established that on such acts of the Respondent/ Defendant No, 2 the Appellant/Defendant No, 1 not only received the goods but also made payment of the sale tax directly in name of the respondent/plaintiff hence confirmed the acts of the Respondent/ Defendant No, 1 to have been done legal and have been done on its behalf/in its name because it is also matter of record that goods were supplied at the place where the Appellant/Defendant No, 1 demanded.
15. Be as it may, let the status of the Respondent/Defendant No, 2 to be taken as 'broker'. The term broker' has been defined by the Black's Law Dictionary as: ' Broker.--1. An agent who acts as an intermediary or negotiator, esp. Between prospective buyers and sellers; a person employed to make bargains and contracts between other persons in matters of trade, commerce, and navigation.
The term 'broker', defined above makes it clear that it is speaking that either one should act as an 'intermediary or negotiator' or it should have an authority from one to make bargains and contracts on one's behalf. Let's take the first definition first. If it is believed that the Respondent/Defendant No, 2 acted as an 'intermediary or negotiator' then no other conclusion could be drawn that both the parties i,e plaintiff and Defendant No, 1 came face to face, as was the claim of the respondent/plaintiff that transaction was confirmed by the Chief Executive of the Appellant/Defendant No,
1. In such eventuality the Appellant/Defendant No, 1 was rightly held liable to pay the amount as completion of transaction, otherwise, is not disputed.
' Even if the second definition is taken for the instant case and it is believed that the Respondent/Defendant No, 2 acted on or in name of the Appellant/Defendant No, 1 which makes the Respondent/ Defendant No, 2 to be an 'agent' hence action of an agent is binding upon the principal particularly when the principal form its conduct and attitude confirmed the acts of such an agent. Thus, in either cases (s), the position becomes quite obvious that agreement was rightly held to be concluded and binding one. The act of ratification by the Appellant/Defendant No, 1 is sufficient to establish that act of 'Respondent/Defendant No, 2 were rightly held to be by Appellant/ Defendant No, 1 or on its behalf. I am guided in such conclusion with the case, reported as PLD 2013 SC 641, wherein honourable Supreme Court held that; ' One of the established essentials of ratification in law is that the purported agent must have been acting in the name of the purported principal, always having been representing himself as a lawful agent of the same (Sanaullah v. Muhammad Rafique 2003 CLC 138).
' Thus, I am of the clear view that there is no illegality on part of both the lower Courts below in appreciating the factual controversies.
16. However, the appellant has been pressing hard the question of jurisdiction of the Court with reference to Section 20 of the Code. This aspect of the case was also properly appreciated by the learned Court (s) below within guidance of the Apex Court. The reading of the Section 20 of the Code would show that it is initially parted into two parts i,e:
(i) where defendant resides; or
(ii) cause of action arises; ' The principles of interpretation make it clear that the use of the word 'or' does not diminish the value of the second part and both part carries equal weight and substance. In the instant matter it is not a matter of dispute that the transaction happened at Khipro; where Respondent/ Defendant No, 2 either on behalf of the Appellant,/ Defendant No, 1 or in its name ordered the goods; from such place the goods were sent; at such place the bank where from the respondent,/ plaintiff got encashment of sale tax amount, sent by Appellant/ Defendant No,
1. Thus, such place was the place where from most of the part(s) of transaction were completed hence the learned lower Court(s) below did not err while holding that cause of action accrued to the respondent/ plaintiff at such place at this juncture it would be conducive to refer the case of Muhammad Yasin and 2 others v. Ch. Muhammad Abdul Aziz (PLD 1993 Supreme Court 395), wherein apex Court has held that: "The bundle of essential facts which comprises the cause of action in this case amongst other elements relating to Quetta, undoubtedly contains the most essential pivotal element of the supply of coal at Quetta from where it was to be dispatched to Faisalabad. The element of place of agreement also is relevant as an essential part of the bundle of facts. But the question of supply being very important in the context of entire circumstances of this case, the same is also a very essential fact. We, do agree with the learned counsel for the appellants that receipt of coal at Faisalabad is an important element in the transaction and the trial of the suit in that behalf but that also is one single element. It will also be treated as an essential fact amongst the other facts constituting bundle of essential facts, as forming the cause of action. Thus, a part of cause at least arose, at Quetta also."
Even otherwise, the present appellant/plaintiff will not be legally justified in denying its legal obligation only by taking the cover of jurisdiction defect when it enjoyed complete opportunity to disprove the claim of the respondent/plaintiff. ,17. In view of above discussion, I am of the firm view that the appellant has failed in pointing out any illegality in the judgment and decree (s) of both the Courts below hence the instant appeal is dismissed with no order as to costs.