This appeal under section 100 of the C.P.C. By the Province of the Punjab and two others, namely, the Director of Education, Sargodha Region and Ambala Muslim College, Sargodha, through its Principal, is directed against the judgment and decree of the learned Additional District Judge, Sargodha, dated 1-3-1988, whereby the decree of the learned Senior Civil Judge, Sargodha, dated 9-2-1986, for recovery of Rs:1,05,000 with costs was affirmed and the plaintiff company, Izhar Limited, Jauharabad, District Sargodha, now respondent, was also held entitled to interest on the decreed amount at the rate of 10$ per annum for the period from 5-4-1973 to 8-2-1986.
2. The facts, on which the claim of the plaintiff-company was founded, are not disputed. They are as follows. An institution known by the name of Ambala Muslim College, Sargodha, was being managed by a committee known as Ambala Muslim College Committee, Sargodha, with the Deputy Commissioner, Sargodha, as its ex officio President.
The Committee invited tenders for the construction of its new campus on land comprising Square Nos.52 and 56 situated in Iqbal Colony, Sargodha at a cost of about Rs.30,00,000. The first phase of the campus was to be constructed at a cost of Rs.8.42,500. The plaintiff-- company submitted a tender on 20-8-1970 (Exh.P5) and the same was accepted by the Ambala Muslim College Committee (hereinafter to be called the college committee) by its letter dated 27-8-1970. As the college committee were not in 'possession of the building site, the work of construction could not commence till after 10-2-1972. The plaintiff-company was paid Rs.70,000 as mobilisation advance.
After the construction work had commenced, the plaintiff-company presented its first running bill for an amount of Rs.47,136.62 "after adjusting mobilisation amount of Rs.70,000". The college committee issued a cheque dated 29-8-1972 for that sum drawn on the National Bank of Pakistan, Sargodha. The cheque was not presented for payment till 5-9-1972, when it was dishonoured on the ground that the college being a privately managed college had been nationalized under MLR 118 of 1972. Admittedly, Ambala Muslim College, Sargodha, had an account with the said Bank and had, at the date of the cheque viz. 29-8-1972, a sum of Rs.1,12,732.66 in its account. It appears that on account of the nationalization of the college, its account was frozen and that prevented the bank from paying the amount of the cheque to the plaintiff-company.
3.The plaintiff's case was that after the cheque had been dishonoured, it informed the college authorities by its letter dated 16-9-1972 of that fact but as the payment was not made, it- had to stop its construction work. Yet it had to keep some staff, its equipment and material at the site. The plaintiff-company again informed the college authorities by its letter dated 11-10-1972 that on account of its staff and equipment at the site, the plaintiff-company was incurring an expenditure of Rs.311.15 daily but this letter also remained unreplied. Accordingly, the plaintiff-company served the defendants with a notice asking for the payment of Rs.47,136.62, that being the amount of the cheque for compensation at the rate of Rs.311.15 per day "due to stoppage of construction by the act and conduct of the defendants without any fault of the plaintiff" and for increasing the rates of construction. When the plaintiff-company received no reply, it instituted this suit for recovery of Rs.47,136, that being the amount of the cheque, Rs.57,864 on account of the remuneration of the staff and rent of the equipment kept at the site at the rate of Rs.311.65 daily for the period from 29- 8-1972 to 5-3-1973, the total being Rs.1,05,000. The plaintiff-company also prayed for interest at the rate of 10$ per annum "till the realisation of the amount".
4. In the written statement of the defendants, it was said, among others, that the plaintiff-company was itself to blame for not having encashed the cheque before the nationalization of the college.
The fact that the plaintiff-company had commenced the construction of the building in pursuance of a valid contract between the college committee and the plaintiff-company was not denied; nor was it denied that the plaintiff-company had been paid Rs.70,003 on a-count of "mobilisation advance" and that the sum of Rs.47,136.62 was due to the plaintiff-company on account of "running bill".
5. On the parties' pleadings, five issues were formulated. The learned Civil Judge found all of them in favour of the plaintiff-company. On issue No.4, which was whether the plaintiff was entitled to recover the said amount with interest from the defendants, the learned Civil Judge recorded the finding that the defendants were liable to pay the sum of As.47,136.62 on account of the running bill.
In the view of the learned Senior Civil Judge, as the plaintiff-company had to keep its staff, its equipment and its building material at the site because the contract had not been cancelled and the plaintiff-company had received no reply to its notice informing the college authorities that it was incurring an expense of Rs.311.15 daily, the plaintiff --company was entitled to the payment of Rs.57,864 also. As there was no agreement between the parties as to the payment of interest, the learned Senior Civil Judge thought that the plaintiff-company was not entitled to the payment of interest on the decreed amount.
6. Against the decree, the defendants preferred an appeal and the plaintiff-company filed cross- objections; the cross-objections related to the payment of interest. The learned Additional District Judge, Sargodha, dismissed the appeal but being of the opinion that section 34 of the C.P.C.
Applied, allowed interest on the decreed amount at the rate of 10$ per annum for the period from 5-4-1973 to 8-2-1986.
7. By MLR 118, all privately managed colleges, together with all property attached to them vested in the Provincial Government as from the 1st day of September, 1972. Paragraph 9 of MLR 118, as originally made, provided that any contract made by the owner or manager of the privately managed college which vested in the Provincial Government under or by virtue of the Regulation would, in so far as such contract, related to the management of such college or school, be deemed to have been made by the Provincial Government; and by paragraph 10 thereof, all rights, properties, assets, liabilities, debts and obligations of the owner or manager of the privately managed college, so vested, would, in so far as they related to the management of such college or school, be the rights, properties, assets, liabilities, debts and obligations of the Provincial Government. MLR No.118 was amended by Punjab Ordinance, XVI of 1972. By it, paragraph 9 was deleted and for paragraph 10, the following was substituted:- "All rights, properties and assets of any privately managed college or privately managed school which is vested in the Provincial Government under or by virtue of this Regulation, shall be the rights, properties and assets of the Provincial Government."
8. Learned counsel maintains that in reaching the conclusion that they did, the learned Courts below overlooked the fact that paragraph 9 of the Regulation had been deleted and that paragraph 10 had been substituted. The effect of the deletion of paragraph 9 and the substitution of paragraph 10, according to the appellants counsel, was that the Provincial Government in whom the college vested under the Regulation was not responsible for any liabilities of the college or the college committee incurred before the 1st day of September, 1972. Learned counsel for the plaintiff- company on the other hand relied upon Messrs Azam Instruments Ltd. v. Islamia Education Society and 2 others 1985 CLC 351 and argued that the deletion of paragraph 9 and substitution of paragraph 10 did not, in any way, affect the liability of the institution, namely, Ambala Muslim College, Sargodha, and that of the Government in whom the properties of that College vested by operation of law under 1dLR 118.
9. It will be noticed that Paragraphs 9 and 10, as they originally stood, spoke of "any contract made by the owner or manager of privately managed college" and "rights, properties, assets, liabilities, debts and obligations" of the owner or manager of any privately managed college. Thus, those provisions made a clear distinction between the institution as such and its owners and managers.
The deletion of paragraph 9 and the substitution of paragraph 10 did not, in any way, affect this position. On general principles also, the liabilities attaching to a property as such go with the property on transfer from one owner to the other, unless a contrary intention is expressly manifested by the parties. Here, the vesting of the college in the Provincial Government was by operation of law and I find nothing in the fact of the deletion of paragraph 9 and substitution ofparagraph 10 to countenance the seemingly wholly unjust result that while the properties of the college became vested in the Government, the liabilities attaching to the properties of the college remained those of the previous owner or manager. One effect of this result would be to leave a party in the position of the plaintiff-company without a remedy, which is an impossible conception as seen above, a sum of Rs.1,12,732.66 lay in the bank account of the college and the whole of it was frozen and the plaintiff-company ;gas, therefore, left without any means to recover what was admittedly due to it. This view receives support from the precedent case cited by the learned counsel for the plaintiff-company. In that case, some instruments were supplied to the institution between the period from 1961 and 1963, their value being Rs.94,737.07, out of which, a balance of Rs.54,737.07 was outstanding at the date of the nationalisation of the institution. The question raised there also turned upon the deletion of paragraph 9 and substitution of paragraph 10 of MLR
118. It was held that "these omissions did not have the effect of absolving the Provincial Government from the liabilities incurred by the institution itself before the date of promulgation of MLR 118.
9.In the admitted and proved facts of the case, I do not see any reason to differ with the concurrent finding of the fact of the learned Courts below that the plaintiff-company was entitled to compensation at the rate of Rs.311.15 for the period from 28-8-1972 to 5-3-1973. With the discretion of learned Additional District Judge -allowing interest for the period of the suit, also there appears no reason to interfere. Learned counsel for the appellants referred to Ghulam Abbas v. Trustee of the Port of Karachi PLD 1987 SC 393 to support the view taken by the learned Civil Judge that as the parties had not agreed upon the payment of interest, the plaintiff-company was not entitled to it.
The precedent case, however, related to an arbitration award and to the p9wer of an arbitrator to allow interest. As to the power of the learned Additional District Judge under section 34 of the C . P .
C . To order to payment of fl l-- interest from the date of the suit to the date of decree, there appears no doubt. No reason r was adduced by the learned counsel for the appellants why the discretion, so exercised by the learned Additional District Judge under] that section, should be interfered with.
10The appeal is dismissed with costs throughout