' AMIR HANI MUSLIM, J. --- These Petitions are directed against the judgment dated 02.12.2014, passed by the Lahore High Court, Lahore, whereby Civil Revision No, 2577/2014 and FAO No, 422/2014 filed by the Petitioner were dismissed.
' Facts. Necessary for the purpose of deciding these proceedings are that the Petitioner invited Expression of Interest from qualified parties by floating tender in the National press, for plying train between Lahore-KarachiLahore on public-private partnership basis (hereinafter (referred to as the "Business Train"). The Respondent being the highest bidder was declared successful and awarded the contract. An agreement in this respect was executed inter se the Petitioner and Respondent No, 1 on 18.8.2011 (hereafter referred to as the "Agreement"), which -was subsequently amended on 26.12.2011. ,The Agreement was initially entered into for a -period of five years, on the terms and '`conditions- enumerated therein, extendable, for another term of five years with .Mutual consent of the parties. As per the terms of agreement the Business Train started its operation on 04.02.2012.
Under Article 6.1 of the Agreement the Business Train was scheduled to run between Lahore and karachi Cantt. And Respondent No, 1 was obliged to pay the Petitioner a sum of Rs, 1.573 million per train journey calculated at 88% passenger/luggage capacity with the applicable normal business class fare. The aforesaid journey fare was required to be deposited by the Respondent No, 1 before the commencement of the train journey. It was further stipulated that any delay in payment of the agreed fare would entail an additional penalty of 5% of the amount and in case, no amount was deposited till the 6th day, the Petitioner would be entitled to suspend the operation of the Business {{BLUR PAGE}} Train without any notice, which term was subsequently amended on 26.12.2011. .Artioe.i..1 of ti.Ti.e.,Ag.-je01-1-ret:A..,...4.1.40...r.;stioptl?Tott--.. that 'Respondent 'Om of Rs, added,'SerViCes; Which...WOulci.b.Oreatect-as.: :perfp*.Pfte*. And additional expenes inctirredfOr J'..0 6 '-'''fe014.Tt . Respondent No whiohwotId, under no p.iiCurnstances,. Be ..itranSferre.Tt,JO the Petitioner Additionally Under Article... 6 of ., ;.Th'e `..,AgreOtherit,... In - '66Se one-. Or 'more passenger coaches..... were not. , made -availabre..By-'the Petitioner,. The . Petitioner .- would not -recover any amount equal to '88% of carrying'. ;capacity of the coach/CoaChes:.And:- ConVersely.If .Additionat.. coaches - Were providedi,..Then.RespOndept No,1 .Shall pay the .. Petitioner equal to 88% of the- aMount-of.Carrying..Capacity of the coach/coaches.
4. Disputes arose amongst the parties at the very outset of their contractual relationship.
Respondent No, 1 in violation of its commitment under Article 6.1 of the Agreement failed to deposit Rs, 225.786 million as performance guarantee before the commencement of the Business Train.
Shortly thereafter on 10.02.2012, a mep six days since the commencement of the Business Train, the Respondent Company approached the Ministry of Railways with the request to suspend operation of Article 6.1 of the Agreement, undertaking to pay the outstanding amount within g period of six months. The Ministry of Railways through a summary dated 16.5.2012 referred the matter for change in the con/pRsition of business express to the Economic Qoordinition Committee (hereinafter referred to as the "ECC") in order to safeguard the interest of the Railways, which was a stranger to the Agreement. The ECC decided to determine the basis of award of contract and validity of personal agreement for sharing of revenue, by evaluation through a third party. The ECC appointed M/s. Deloitte Pakistan as a consultant to make its recommendations, which submitted the following recommendations that were approved by the E.C.C. In its meeting dated 01.01.2013:-
(i) "Minimum occupancy to be achieved at 65%.
(ii) Share ratio of gross revenue can be set as 80.20 between Pakistan Railways and Joint Venture Partners upto occupancy of 75% and,
(iii) For occupancy achieved above 75% the sharing ratio between PR and JV Partner can be set at 75.25."
5. In light of the aforesaid recommendations of M/s. Deloitte Pakistan, the ECC on 03.07.2012, took the following decision:--- "The Economic Coordination Committee of the Cabinet considered the Summary dated 16th May, 2012, submitted by Ministry of Railways on "Changes in the Composition of Business Express" and decided to constitute a Committee, comprising Minister for Information & Broadcasting (Convener), Chairman Board of Investment, Deputy Chairman, Planning Commission and Secretary Ministry of Railways for further examining the matter and suggesting a viable course of action for Pakistan Railways.
' Ministry of Railways will also act as secretariat of the Committee."
6. Subsequently on 17.12.2012, the Ministry of Railways floated another summary, proposing that the Respondent No, 1 had defaulted to the extent of Rs, 289.8 million and any dispensation granted to the Respondent No, 1 must be accompanied by a caveat with the understanding that the outstanding amount must be cleared within one year. This proposal contained in the summary was an interim arrangement, which was approved by the ECC and was endorsed by the Federal Cabinet on 15.03.2013.
7. Respondent No, 1 however failed to clear its outstanding dues in terms of the aforesaid Cabinet decision. On 23.02.2013 the Respondent No, 1 undertook to clear the outstanding amount of Rs: 236,247,808/- in equal instalments starting from 01.07.2013 and concluding the entire amount within the stipulated period. On 28.02.201.3, the Ministry of Railways floated another summary to the ECC on which following decision was made, which was approved by the Government on 04.06.2013:- "The Economic Coordination Committee of the Cabinet considered the Summary dated 28th February, 2013, submitted by the Ministry of Railways on "Charges in the Composition of Business Express" and decided that the additional services provided to the passengers by the JV partner should not be part of ticket/fare and revenue be shared accordingly, with the condition that there is no downward revision in the actual fare."
8. On 17.9.2015, the Ministry of Railways moved yet another summary, stating that the matter needs reconsideration of ECC to the Cabinet and that the decision of ECC to the Cabinet dated 01.01.2013 may be re-visited and re-called ab initio to save Pakistan Railways from recurring losses. After consideration of the summary, the ECC took the following decision:--- "The Economic Coordination Committee of the Cabinet considered the summary dated 11th September, 2015, submitted by the Ministry of Railways regarding "Change in the Composition of Business Express Train", endorsed the opinion of Ministry of Law, Justice and Human Rights contained in para-9 of the summary and approved the proposal contained in para 11 of the summary."
9. That while efforts were being made by the Petitioner to resolve the matter, Respondent No, 1 in parallel, on 29.11.2013, approach the Civil Court under Section 20 of the Arbitration Act, 1940, and prayed for referring the dispute to Arbitration in the following terms alongwith an Application for interim relief:---
(a) The agreement dated 18.08.2011 alongwith the Addendum dated 26.12.2011 be filed in this learned Court.
(b) This application may kindly be allowed and the matter be referred for Arbitration under the terms of the Agreement for adjudication on merits.
(c) Adjudication be completed within a period of four months and award be filed in this learned Court.
' Any other relief as deemed appropriate in the circumstances of the case may also be granted in favour of the Plaintiff and against the Defendants."
10. By order dated 24.04.2014, the Civil Judge, 1st Class Lahore, allowed the Application and directed the parties to provide names of their respective Arbitrators. The Civil Judge also allowed the other Application of the Respondent No, 1 under Section 41(b) of the Arbitration Act, 1940, granting injunction restraining the recovery of the amounts payable by them.
11. Feeling aggrieved, the Petitioner filed Civil Revision against the order of the learned Civil Judge allowing the Application of the Respondent No, 1 under Section 20 of the Arbitration Act, 1940 and a F.A.O. Against the grant of interim injunction. Both the aforesaid Civil Revision and FAO were dismissed by the Lahore High Court, Lahore, vide impugned judgment dated 02.1 .2014, hence these Petitions for leave to Appeal.
12. The learned Counsel for the Petitioner has contended that he will not be pressing his prayer in the Petition against the appointment of the Arbitrators, as he has been instructed to contest the Petition only against the grant of interim injunction, allowing the Application of the Respondent No, 1 under Section 41(b) of the Arbitration Act, 1940. The learned Counsel next contended that Respondent No, 1 has neither paid the amounts in terms of the agreement nor invested the agreed amount contained in the agreement. He contended that Respondent No, I was put to notice for payment of the agreed amount under the terms of the agreement besides the investment they had to make, the matter having been subsequently referred to the E.C.C. For decision, which allowed the interim arrangement under which the agreed amount was reduced from 88% capacity of luggage and passengers to 65%. The learned Counsel submitted that the Respondent No, 1 had defaulted even in payment of such amounts, inspite of their undertaking that they would clear the said outstanding amount within one year. In the intervening period, the Respondent No, 1 approached the Civil Court which had directed the parties to take up the dispute to the Arbitrators appointed by each one of them. Additionally, the Civil Court restrained the Petitioner from recovery of the amounts and presently the Respondent No, 1 has to pay a huge sum of Rs, 1,11,55,00,000/- outstanding against them while they are plying the Business Train and availing all the benefits under the agreement.
13. The learned Counsel submits that on one hand, the Petitioner has been restrained from recovery of the outstanding amount and on the other hand the dispute has been referred to Arbitration. He contended that neither the Civil Court nor the High Court has applied their mind to the facts of the case while granting injunction against the Petitioner. The principles for grant of injunction have been completely overlooked by the learned High Court and the Court below while passing the impugned order. The reasons for grant of injunction were neither assigned nor discussed either by the learned High Court or by the Civil Court. He next contended that grant of injunction is causing recurring financial losses to the Petitioner - a National Asset.
14. As against this the learned Counsel for the Respondent No, 1 has contended that the agreement was assumption based and under Article 6.1 of the agreement the Respondent No, 1 had to pay 88% of carrying capacity of the train whereas the actual occupancy was 60 to 65%, therefore, the Respondent No, 1 was not obliged to make payment in excess of the said 60-65% of the carrying capacity of the passengers and luggage. He next contended that it has been pointed out in the report of M/s. Deloitte Pakistan that contractual payment to Pakistan Railways at the rate of 88% of the full capacity revenue of the train was a major contributor to the deficit. The learned Counsel further submits that the High Court as well as the Civil Court had rightly allowed the Application of the Respondent No, 1 while taking into account the language of clause 5(vi) addendums to the agreement, which restricts the parties from suspending the operation of the Business Train.
15. He next contended that Respondent No, 1 has paid excess amount to the Petitioner on the basis of report of M/s. Deloitte Pakistan, as the amount agreed upon by Respondent No, 1 was assumption based. He submitted that Respondent No, 1 has also made huge investments for operating the Business Train and their investment should also be saved.
16. We have heard the learned Counsel for the parties and have perused the record with their assistance. In the first place, we are not persuaded by the contention of the learned Counsel for Respondent No, 1 that the agreement between the parties was assumption based and Respondent No, 1 was not obliged to pay the amounts agreed by them in terms of the agreement. If Respondent No, 1 had made financial commitments, by accepting the terms of the agreement, they are bound to discharge their obligations.
17. The contention of the learned Counsel for the Respondent No, 1 that Article 6.1 was assumption based and they were suffering losses as the specific capacity of passengers and luggage was not attained and or attracted by the Business Train, therefore, the default in payment of the amounts was justified. The agreement between, the parties has the status of a statute and unless it is shown that any term of the agreement is violative of the law, it cannot be rescinded by a party. Even otherwise, law does not permit a party to read in an implied condition which was never agreed to by the parties at the time of entering into the agreement. The contention of the learned Counsel for the Respondent No, 1 is contrary to the agreed terms of the Article 6.1 which cannot be unilaterally changed by the Respondent No, 1 on the premise that it was assumption based.
18. The dispute raised by Respondent No, 1 in regard to the quantum of payment based on the report of M/s. Deloitte Pakistan has no binding effect, as financial commitments made by the parties to the agreement would not be diluted, defused or extinguished by the aforesaid report. The plea of miscalculation in such-like agreements is hardly a ground to allow a party to withdraw itself from its financial. Subsequent to the execution of the agreement, a party cannot wriggle out of it on the ground that the calculation was assumption based.
19. The clause 11.2(v) pertaining to continuous operation of the Business Train, as has been incorporated in the Addendum to the Agreement, was introduced for public welfare and has to be read alongwith immediate succeeding clauses of the Agreement. The mode for termination of the agreement has been provided under independent clauses and Addendum to the Agreement has no nexus with it. The clauses of the agreement, can in no way, be construed to absolve the Respondent No, 1 from discharging its obligations by refusing to pay the agreed amounts on the ground that financial commitments were assumption based, therefore, they were not obliged to pay, as has been contended by Respondent No, 1.
20. It has been shown from the record that Respondent No, 1 has invoked the arbitration clause, therefore, the dispute will be determined through Arbitration, but at the same time, a restraining order against recovery of the amounts by the High Court and the Civil Court in terms of Section 41(b) of the Arbitration Act, 1940 without examining the three Ingredients for grant of injunction i.e, prima facie case, balance of convenience and irreparable loss, in the case in hand, is not sustainable in law. Unrestricted permission to Respondent No, 1 for plying the Business Train without discharging their obligations of payment of amounts agreed to in the Agreement cannot be termed as justifiable grounds for grant of injunction. In the case in hand, prima facie, the Respondent No, 1 has defaulted in paying the agreed amounts towards fares besides the investment, as is evident from the record, therefore, grant of injunction of the nature to the disadvantage of the Petitioner was not justified.
21. We are informed that Respondent No, 1 has appointed his Arbitrator, and accordingly direct the Petitioner to appoint their Arbitrator within the stipulated time incorporated in the short order. We, for the aforesaid reasons, have converted these petitions into Appeals and disposed of the same, by our short order of even date, which is reproduced here-under:--- "We have heard the arguments of ASCs for the petitioner as well as respondent No,
1. For reasons to be recorded separately these petitions are converted into appeals and disposed of in the terms that the order dated 24.4.2014 passed by the Court of Civil Judge, 1st Class Lahore in suit titled M/s. Four Brother International (Pvt.) Limited v. Ministry of Railways, etc. And the impugned order of the Re visional Court dated 2.12.2014 are modified to the extent that interim injunction granted in favour of respondent No, 1 is vacated. Further parties are directed to nominate their respective arbitrators within two weeks from today who in turn appoint umpire within next two weeks so that arbitration proceedings may commence immediately and concluded within four months."