' SHAHID BILAL HASSAN, J.---Through this appeal, the appellant has called into question the order dated 02.06.2014, passed by learned trial Court, whereby in a suit for declaration, permanent injunction and recovery of damages, status quo has been issued.
2. Tersely, the facts leading towards this appeal may be summarized as such that appellant is a multinational company engaged in the business of manufacturing and bottling of aerated waters and beverages. In order to expand its business, the appellant has undertaken to set up another plant at Multan at the cost of US $ 34,600,000 in direct foreign investment while the total cost of plant and machinery is estimated at US $ 70 Million. The construction contract for the project was awarded to the respondent vide contract dated 26.04.2013. The said construction was to be completed by the respondent on or before 15.02.2014. A mobilization advance equivalent to 25% of the contract price was paid to the respondent and in lieu thereof unconditional and irrevocable advance payment guarantees dated 16.05.2013 were furnished on behalf of the respondent in favour of the appellant. Allegedly, the respondent failed to fulfill its contractual obligations and remained in default for which the appellant served notices in order to give time to the respondent to rectify the default in performance and respondent practically abandoned the project in September, 2013. The appellant appointed Messrs Harvester Services (Pvt.) Ltd. To assess the site, which carried out inspection. The contract was cancelled on 20.09.2013, against which the respondent filed an application under sections 20 and 33 of the Arbitration Act, 1940 on 21.09.2013 and also filed an application for temporary. Injunction to restrain the appellant from en-cashing the bank guarantees, which was dismissed by learned trial Court on 19.02.2014, against which a Civil Revision bearing No,553 of 2014 has been filed by the respondent, which is pending adjudication before this Court. During pendency of earlier suit filed under section 20 of the Arbitration Act, 1940, the respondent filed another suit for declaration, permanent injunction and recovery of damages before the learned Senior Civil Judge, Lahore on 27.05.2014; along with the suit an application for temporary injunction was also filed and learned trial Court vide impugned order dated 02.06.2014 restrained the appellant from making further construction at the site in Multan.
3. Learned counsel for the appellant while advancing arguments has submitted that since there was no injunctive order, the construction contract was awarded to ORA-HRL JV vide contract, dated 04.04.2014, but the respondent has not arrayed the said contractor as party to the suit. Adds that in suit for grant of damages, injunctions are not granted under section 21 of the Specific Relief Act, since the contract was not such which could have been specifically enforced, therefore, no injunction could have been issued, especially when damages were claimed as a final relief.
Submits that balance of convenience tilts in favour of the appellant as construction work could not be stopped without hearing the appellant, because after termination of contract with the respondent, the Contract has further been awarded to ORA-HRL-JV vide Contract dated 04.04.2014 and by not impleading the said Contractor in the suit, the same is bad due to non-joinder of necessary party. Further adds that respondent is not entitled to any injunction on account of its own breach, because the project was to be handed over on or before' 15..02.2014, but despite having received huge amount, the respondent stopped work at the project site; the conduct of the respondent is indicative of its mala fide and disentitles it from claiming any equitable relief. States that second suit was barred and the application ought not to have been entertained as it was the same subject matter, the same cause of action and the same parties as in the earlier suit, which is pending adjudication. Submits that when suit from which the proceedings have arisen is barred by law and when the suit itself cannot proceed, an injunction as prayed for could not be granted.
Further states that property i.e, subject matter in question is admittedly in Multan and not within the jurisdiction of Civil Courts Lahore, therefore, the suit was not entertainable at Lahore. Adds that application under section of the Arbitration Act, 1940 is to be treated as suit. Contends that on hand the respondent wants settlement of dispute by arbitration and other hand has filed a suit for damages on the same set of for result would be failure of both. Adds that earlier application sections 20 and 23 of the Arbitration Act, 1940 as well as have been entertained by one and same court, in the circumsbeing a clear bar of Order II, Rule 2 of Code of Civil Pre no injunction could be prayed for or granted even ad interim more so by the same learned Judge. Submits that decision in one proceedings operates as Res Judicata in the subsequent proceedings. Adds that appeal in hand is maintainable, when same is admitted for regular hearing. Finally submits that the impugned order is not sustainable in the eye of law; same may be set aside by accepting the appeal in hand. Relies on Associate Construction v. Federation of Pakistan and others 2010 MLD 627-Karachi, Faisal Kapadia and another ,v. Motorola Ltd. And 2 others 2010 MLD 518-Karachi, Munda Hydropower Ltd. Through Habib H. Paracha and 2 others v. Federation of Pakistan through Secretary Ministry at Water and Power and 2 others 2009 MLD 526-Islamabad, Muhammad Naved Aslam and 3 others v. Mst. Aisha Siddiqui and 14 others 2011 CLC 1176-Karachi, Muhammad Bachal v.
Province of Sindh through Home Secretary and 12 others 2011 CLC 1450-Karachi, XEN, Highway Division, Abbottabad and another v. Habib Ur Rahman 1996 CLC 279-Peshawar, Sh. Fazal Hussain v.
Board of Governors, Divisional Public High School, Lyallpur 2001 MLD 407-Lahore, Messrs Mono Engineering (Pvt.) Limited v. The Karachi Development Authority 1999 YLR 1340-Karachi, Malik Maqsood Asghar and 5 others v. Malik Sultan Asghar and 2 others 2008 CLC 1150-Lahore, Hafiz Muhammad Abrar and another v. Addl. District Judge, Multan and 17 others 2012 YLR 2471-Lahore, Muhammad Anwar v. Messrs Associated Trading Co. Ltd. And 2 others PLD 1987 Karachi 535, Syed Altaf Hussain through Attorney v. Irshad Ahmed and 9 others 2014 MLD 457-Sindh, Zulqarnain v.
SNGPL through General Manager and 2 others 2013 YLR 503-Lahore, Syed Saqlain Abbas v. Syed Hayat Shah 2012 CLC 945-Lahore, Oil and Gas Development Corporation Ltd. Pakistan v. Claugh Engineering Ltd. Through Local Representative Mr. Martin Harris 1999 MLD 254-Lahore, Messrs China Harbour Engineering Co. v. Water and Power Development Authority and others 2001 YLR 1781- Karachi, Ch. Bashir Ahmad and 4 others v. Province of Punjab through Collector, Sargodha and 4 others 1990 MLD 986-Lahore, Salahud Din v. Syed Mansoor Ali Shah and others 1997 SCMR 414, United Bank Limited v. Messrs Khawaja Ra,dio House through Proprietor and 2 others 2004 CLD 1609-Lahore, Messrs James Construction Company (Pvt.) Ltd. Through Executive Director v.
Province of Punjab through Secretary to the Government of Punjab (Communication and Works)
Department, Ohore and 3 others PLD 2002 Supreme Court 310 and Mrs. Dino Chinoy and 8 others v.
Muhammad Matin PLD 1983 Supreme 693.
' On the contrary, learned counsel appearing on behalf of the No,1 by favouring the impugned order has further argued in hand is not maintainable as the mandatory provision of Rule 3 of the Code of Civil Procedure, 1908 have not been complied with. Adds that against interim order, no appeal lies and maintainable. Stresses that earlier was an application under sections 20 and 33 of Arbitration Act, 1940 and not suit, therefore, the present suit is not barred under Order II, Rule 2 of the Code of Civil Procedure, 1908. Adds that respondent No,1/plaintiff has consumed a huge amount on construction of the project at site pursuant to the contract given to the respondent No,1/ plaintiff; therefore, the learned trial Court has rightly granted interim injunction. Lastly prayer for dismissal of the appeal in hand has been made. Relies on Roomi Enterprises (Pvt.) Ltd. v. Stafford Miller Ltd. And others 2005 CLD 1805-Karachi, (Messrs) The Associated Cement Companies Ltd. v. The Province of Punjab PLD 1954 Lahore 151, Shah Muhammad Khan v. Ghulam Qadir, and others. PLD 1971 Baghdad Ul Jadid 9, Mirza Muhammad Iqbal Beg and others v. International Estate Developers Ltd. 1986 MLD 2785-Lahore, Mst. Saj'ida Yousaf v. Lahore Development Authority 1989 MLD 225-Lahore, N.R. Dongre and others v. Whirlpool Corporation and another 1997 MLD 2124-Supreme Court of India, Islamic Republic of Pakistan through Secretary, Establishment Division, Islamabad and others V.
Muhammad Zaman Khan and others 1997 PLC (C.S.) 971-Supreme Court of Pakistan, Mirza lftikhar Beg v. Government of the Punjab through Secretary Health, Lahore and another 1990 CLC 851- Lahore, Pioneer Pakistan Seed Ltd. v. United Distributors Pakistan Ltd. And 5 others 1998 CLC 61- Lahore, Islamic Republic of Pakistan through Secretary, Establishment Division, Islamabad and others v. Muhammad Zaman Khan and others 1997 SCMR 1508, Karachi Electric Supply Company through duly authorized officer v. Muhammad Shahnawaz and 46 others 2010 YLR 2426-Karachi, Government of Pakistan through Secretary Ministry of Interior, Islamabad v. Dr. Abdul Qadeer Khan 2010 MLD 533-Lahore, West Pakistan Industrial Development Corporation v. Messrs Sheikh Muhammad Amin and Co. 1992 CLC 2047-Karachi, Bangladesh Shipping Corporation v. Syed Muhammad Anwar Iqbal 1992 CLC 1500-Karachi, Ghulam Farid and others v. Province of Punjab and others 2013 MLD 77-Lahore, Messrs James Construction Company (Pvt.) Ltd. Through Executive Director v. Province of Punjab through Secretary to the Government of Punjab (Communication and Works) Department, Lahore and 3 others PLD 2002 Supreme Court 310, United Bank Limited and others v. Ahsan Akhtar and others 1998 SCMR 68, Habib Bank Limited and others v. Syed Zia Ul Hassan Kazmi 1998 SCMR 60 and Messrs Chas A. Mendoza Pharmaceutical Laboratories v. Syed Tausif Ahmad Zaidi and 2 others PLD 1993 Kar.
790.
5. Heard.
6. First and foremost question in the present case is that whether this appeal is maintainable or not, because according to version of learned counsel for the respondent, notice as required under Order XLIII, Rule 3 of the Code of Civil Procedure, 1908, which is mandatory under the law, has not been given to the respondent. In this A regard it is observed that when the appeal has been admitted for regular hearing and the respondent's side has put appearance before this Court, it would be presumed that provision of law has been met with. In this regard reliance is placed on Salahud Din's case 1997 SCMR 414, wherein it has been held that, 'Respondents being duly represented before High Court before admission of appeal, object of serving notice on respondents under 0. XLIII, R.3, C.P.C. Before filing of appeal was fully met and, therefore, appellant could not have been non-suited in appeal on such ground'. Even in Hafiz Muhammad Abrar and another's case 2012 YLR 2471-Lahore, it has been observed by this Court that, 'Once appeal had been admitted, the same could not be dismissed for non-compliance of the provisions of 0. XLIII, R.3, C.P.C.---Objection as to non-service of notice under 0. XLIII, R.3, C.P.C. Was only available up to the preliminary stage of hearing of the appeal---Such objection could not be entertained when the respondents to the appeal appeared and contested the same'. Similar view has been adopted in Syed Saqlain Abbas' case 2012 CLC 945-Lahore, wherein it has been observed that, '0. XLIII, R.3--- -Appeal against an interim order---Nonservice of notice of appeal on respondent prior to its filing---Appearance of respondent's counsel in response to court's notice---Effect---Objection regarding non-service of such notice became immaterial'. Even otherwise, the appellant has appended copy of notice issued under Order XLIII, Rule 3 of the Code of Civil Procedure, 1908 as well as postal receipts Nos.867 and 868, divulging that notice germane to filing of this appeal was issued to the respondents' side in accordance with the mandate of law; therefore, contention of the appellant stands proved; in this regard reliance can be placed on Zulqarnain's case 2013 YLR 503- Lahore, wherein it has been observed, 'Perusal of record revealed that petitioner had served the respondent with legal notice that was sent through post and postal receipts duly certified by the Post Master were annexed with the civil revision----Contention of petitioner stood proved, in the light of such documents ...... . Even in Malik Maqsood Asghar and 5 others' case 2008 CLC 1150- Lahore, it his been maintained, 'Lack of service of notice in terms of 0. XLIII, R.3, C.P.C. Was of no legal significance after admission of appeal and the same should not be dismissed for non- compliance with the provisions of 0. XLIII, R. 3, C.P.C....'. Therefore, the arguments of learned counsel, for the respondents in this regard, regarding maintainability of the appeal in hand, have no force to be considered.
7. Now comes the second divergence inter se the parties; it is contention of the appellant's counsel that in presence of proceedings taken under sections 20 and 33 of the Arbitration Act, 1940, the second suit is not maintainable, whereas the respondent/plaintiff's counsel has submitted that earlier was the application and not suit, therefore, the present suit is not barred under the law. In this regard, it is observed that though the proceedings under the provisions of sections 20 and 33 of the Arbitration Act, 1940 are not suit in stricto sensu, yet the proceedings under said sections are to be treated as a civil suit, though it is not a full-fledged civil suit in stricto sensu, but it is a legal proceedings with limited scope. Application under section 20 of the Arbitration Act, 1940 is treated as a suit and order directing filing of agreement and making reference to arbitration being final, in circumstances, amounts to a decree. In this regard reliance is placed on Messrs China Harbour Engineering Co.'s case 2001 YLR 1781-Karachi and Sh. Fazal Hussain case 2001 MLD 407-Lahore. Even otherwise, it is manifested from bare reading of the contents of application filed under sections 20 and 33 of the Arbitration Act, 1940, that in whole of the application words 'Plaintiff' and 'Defendant' as well as 'Arbitration Suit' have been used, which clear the intention and nature of the proceedings. For ready reference only two paragraphs are reproduced as under:--
29. That Clause 52 of the Contract between the parties is the Dispute Resolution/Arbitration Clause. This clause provides for the settlement of the disputes between the parties through amicable settlement process and/or arbitration under provisions of the Arbitration Act 1940 as amended or any statutory modification or re-enactment thereof for the time being in force.
30. That the Plaintiff wants to commence arbitration proceedings against Defendant No,1 and 2 in accordance with Clause 52 of the Contract in order to settle dispute in issue. It is in these arbitration proceedings that it shall be determined whether the Plaintiff or Defendants Nos.1 and 2 was in default of its obligations under the Contract.'
' In view of above discussion and judgments supra, it can be safely held that application filed under sections 20 and 33 of the Arbitration Act, 1940 is treated to be a suit and not an application.
' Moreover, when we place the contents of the application filed under sections 20 and 33 of the Arbitration Act, 1940 and second suit, even prayer made in both the cases, it reflects that same are more or less the same; therefore, the respondent/ plaintiff cannot be allowed to split up claim in order to vex the opponent twice for the same cause of action. Because in the preset case, at one hand, the respondent/ plaintiff seeks settlement of accounts through arbitration and on the other hand claims damages, which is hit by Order II, Rule 2 of the Code of Civil Procedure, 1908. In this regard reliance is placed on Muhammad Bachal's case 2011 CLC 1450-Karachi, wherein it has been observed, '0. II, R.2---Same cause of action---Splitting up of claims---Validity--- Provision of 0. II, R. 2, C.P.C. Is devised to prevent a party from splitting up claims and remedies arising out of same cause of action against same party-Such provision is based on the principle that defendant should not be vexed twice for the same cause of action---Provision of 0. II, R. 2, C.P.C. Is penal in nature and precludes plaintiff to sue for the portion of claim or remedy so omitted'. More so, the order dated 19.02.2014 passed by learned trial Court while deciding application under section 41(b) read with Para 4 of the Second Schedule to the Arbitration Act, 1940, reflects that it was in the knowledge of the respondent/plaintiff as well as learned trial Court that Contract between the parties stood terminated, which was terminated on 20.09.2013 and the respondent/plaintiff filed application under sections 20 and 33 of the Arbitration Act, 1940 on 21.09.2013, whereas the present suit was instituted on 27.05.2014; so the said findings on facts and law recorded in earlier proceedings are binding on learned trial Court. In this regard reliance is placed on Messrs Mono Engineering (Pvt.) Limited's case 1999 YLR 1340-Karachi, wherein it has been observed, 'An earlier finding on the point of law by a Judge is binding on him in subsequent proceedings'. But the learned trial Court while passing injunctive order in the present suit has not kept in view the earlier findings recorded by him in earlier proceedings, under sections 20 and 33 of the Arbitration Act, 1940.
8. In view of above, when the earlier proceedings, having same cause of action, are between the same parties, the principle of Res Judicata clearly applies in the present suit. Though at present, before this Court, the appeal is regarding order passed by learned trial Court granting ad interim injunction, but when from the above state of affairs, it becomes very much clear that the plaint is not entertainable being barred by law, the same can be rejected while applying principle of Res Judicata or plaint can be returned at any stage of the suit even in appeal or revision. In this regard reliance can safely be placed on Muhammad Anwar's case PLD 1987 Karachi 535, wherein it has been observed, 'Applicability of section 11, C.P.C. Is not restricted only to suits but its principles apply to the proceedings which may not be provided in the former suit or proceeding the same parties were heard and the same dispute between them was agitated and decided by Court of competent jurisdiction. Once these conditions have been complied with, a subsequent suit on the same facts in respect of the same dispute between the same parties will be barred by the principle of res judicata. It is not necessary that the former proceedings should be only a suit.
Section 11 is not exhaustive and the principles of res judicata can be invoked in respect of proceedings to which it does not strictly apply'. When the suit is not competent and barred by law, what to talk of the ad interim injunction granted by the learned trial Court; especially when one and the same court has already observed that the contract between the parties has been terminated and it has manifested from the record that admittedly after termination of the contract, the appellant has further awarded the Contract to other Company/Contractor. Therefore, three ingredients for grant or refusal of injunction i.e, (i). Prima facie arguable case (ii). Balance of convenience and (iii). Irreparable loss also tilt in favour of the appellant.
' The other factor in the present case is that admittedly the subject matter in this case is within the territorial limits of District Multan, whereas the respondent/plaintiff has instituted the suit in Civil Court, Lahore; meaning thereby the learned Civil Court at Lahore lacks territorial jurisdiction to entertain the suit in hand and the learned trial Court ought to have returned the plaint instead of passing the ad interim injunction while entertaining the suit, for its presentation before the proper forum for adjudication in accordance with law. In this regard, action---Territorial jurisdiction-.Property of plaintiff was demolished and bulldozed unlawfully and illegally by defendants---Suit property was situated at place "N" whereas the suit was filed at place "K" before High Court in its original civil jurisdiction-Validity-Provisions of 0. VII, R. 10, C.P.C. Were mandatory and adjudication by a court without jurisdiction was a determination coram non judice and not binding---When court lacked pecuniary or territorial jurisdiction, in such cases, plaint must be returned for presentation to proper court and Court could not pass any judicial order except that of returning the plaint---Cause of action described by plaintiff in plaint showed that no cause of action accrued to plaintiff within territorial limits and jurisdiction of High Court, therefore, plaint was returned to plaintiff for institution before the court of appropriate jurisdiction.
9. So far as the case law cited by learned counsel for the respondent/plaintiff is concerned, with utmost respect, same has no relevance to the peculiar facts and circumstances of the present case; therefore, it does not render any assistance or help to the respondent/ plaintiff's cause. Even otherwise, each and every case has its own peculiar facts and circumstances and the Courts have to evaluate the same with independent mind, so as to administer safe justice.
10. The discussion made above ends with the conclusion that second suit instituted by the respondent/plaintiff, during pendency of earlier Arbitration Suit, is not maintainable, being hit by 0.
II, Rule 2 of the Code of Civil Procedure, 1908 as well as under section 11 i.e, Res Judicata; resultantly, while placing reliance on the judgments supra, the instant appeal is allowed, consequent whereof, the plaint in second suit i.e, present suit, is rejected under Order VII, Rule 11(d) of the Code of Civil Procedure, 1908. No order as to costs.