On 2-2-1989, Messrs Ch. Construction Company Ltd. Filed a suit for declaration to the effect that the order of cancellation of contract dates[ 9-1-1989 is illegal, without jurisdiction and of no effect upon the rights of the petitioner/plaintiff to complete the project. The suit was accompanied by an application for temporary injunction restraining the respondents from interference in the construction being carried by the plaintiff.
2. It was averred in the plaint that the petitioner was granted a contract for the construction of Ward in CMH (Phase II Okara Cana). The time of the contract was from 9-3-1988 to 9-3-1989. The contracted amount was about Rs.22 lacs. It was averred that the petitioner Company was prevented on account of a number of circumstances to comence the work without its fault. The petitioner, however, continued the work and raised the construction up to the roof levels. It was on 9-1-1989 that the contract was cancelled without any notice to the petitioner Company.
3. The learned trial Court by order dated 8-4-1989 accepted the application and granted the requested injunction. On appeal by the respondents, the learned District Judge Okara accepted the appeal vide order dated 11-6-1989 and dismissed the application for temporary injunction.
Hence this petition.
4.Learned counsel for the petitioner raised the following points in support of this petition:-
(i) It was contended that the time of the contract was from 9-3-1988 to 9-3-1989. The respondents had no authority to cancel the contract before the stipulated date, that the petitioner/plaintiff was completing the project with a remarkable speed and was sure to complete it before 9-3-- 1989.
The petitioner had done a work to the amount of Rs.5 lacs which was paid to him. Reliance was placed on Pakistan Paper Corporation Limited v. National Trading Company Limited 1983 CLC 1695.
(ii)It was next contended that the provisions of Section 56-D of the Specific Relief Act were inapplicable to this case as this was a case of concluded contract under which the respondents were bound to let the petitioner complete the project. The rule enunciated in Pakistan Paper Corporation's case 1983 CLC 1695 was pressed into service that even in a case of contract, injunction can be granted if the petitioner/plaintiff can show that he has a prima facie case, irreparable injury will accrue to him and that balance; of convenience is on.His side.
5. Learned counsel for the respondents who appeared in consequence of pre-admission notice, opposed the petition on the grounds that neither the suit was competent under Section 42 of the Specific Relief Act nor the application for injunction was maintainable. It was urged that Section 42 ibid related to declaration in respect of legal character, to any right as to any property and was not applicable in respect of declaration, pertaining to contracts. Reliance was placed on M.A. Naser v.
Chairman Pakistan Eastern Railways and others (PLD 1965 SC 83) Alavi Sons Ltd. v. Government of.
East Pakistan etc (PLD 1968 Karachi 222), Feroze Din v. Abdul Hamid and others (PLD 1969 Lahore 89) and WAPDA through Chairman WAPDA, Lahore v. Muhammad Yaqoob (PLD 1973 Note 12).
6. 1 have heard the arguments of both the parties and herein proceed to determine their respective contentions. It is appropriate to examine the nature of the contract between the parties. Admittedly the contract is complete contract between Ch. Construction Company and Pakistan. The contract is appended with the written statement and is on page 37 of the file. Under this contract the Accepting Officer has the powers under condition No.55 to cancel the contract. The condition relating to cancellation is as fallows:-- "55.Cancellation of contract, for default.--(a) The Accepting Officer may without prejudice to any other right or remedy which shall have accrued or shall accrue thereafter-to Government, cancel the contract in any of the following cases, if the Contractor- '
(i)Being an individual, or, if a firm, any partner thereof, shall at any time be adjudged bankrupt or have a receiving order or order for administration of his estate made against him or shall take any proceedings for liquidation or composition 'under any Bankruptcy Act for the time being in force or make any conveyance or assignment of his effects or composition or arrangement for the benefit of his creditors or purport so to do or if any application be made under any Bankruptcy Act for the time being in force for the sequestration of his estate or if a trust deed be granted by him on behalf of his creditors, or (ii)Being a Company, shall pass a resolution or the Court shall make an order for the liquidation of its affairs, or a receiver or manager on behalf of the debenture holders shall be appointed or circumstances shall arise which entitle the Court or debenture holders to appoint receiver or manager, or (i.e)Fails to comply with any of the terms and conditions of the Contract or after reasonable notice in writing, with order properly issued thereunder, or (iv)Fails to complete the works and clear the site on or before the date of completion, or (v)Assigns, transfers, sublets or attempts to assign, transfer or sublet any portion of the work without the prior written approval of the Accepting Officer.
(b)Whenever the Accepting Officer exercises his authority to cancel the Contract under this condition he may complete the works by any means at the Contractor's risk and expense. The Contractor shall be entitled to receive payment of work performed, in the Contract value thereof less the cost of completing the Works in his default as certified by the GE and if the cost so certified exceeds the sum of money held by Government as otherwise due to the Contractors, the Accepting Officer may recover the deficit from the Contractor by other means but if such cost of the work so completed is less than the contract value of the work the contractor shall not be entitled to any credit therefor ".
7. From the contract itself, it is clear that the Accepting Officer has an authority to cancel the contract. This power was not challenged by the petitioner except that this power had to be exercised after the expiry of the time of the contract.
8.The nature of building contracts was examined in Hudson on Building Contracts, page 404, in which it is stated that:- "The contractor in ordinary building or engineering contracts for executing work upon the site or land necessary to execute the works, depending always upon the precise terms of the contract.
Such licence can be revoked by the employer at any time, and thereafter the contractor's right to enter upon the site will be gone, but such revocation, if not justified under the terms of the contract, will render the building owner liable to the builder for damages for breach of contract. The measure of such damages must be calculated at the date of such revocation or re-entry. It would seem that the building owner cannot (subject always to the terms of the contract) be restrained by injunction from re-entering upon his own land, or from so preventing the builder from performing the contract"
9.In Garret v. Banstead and Epsom Downs Rly. Co (1965) 12 L.T. 654: 13 W.R. 878), the plaintiff contracted to execute the works of the defendant-- company and the contract provided that, in certain events, the directors might take the further performance of the contract out of his hands and themselves execute the remaining works and also that a person named should be the referee in all disputes having arisen, the company by their engineer violently (as the Bill alleged) took possession of the works, and upon this Bill being filed, the plaintiff moved for an injunction to restrain them from such possession and from interfering with plaintiff in the further execution of the works, and it was held that as the Court would have no power to compel and due completion of the contract by the plaintiff, if it reinstated him whereas he would have ample remedy in damages if he were improperly displaced by the defendants, the injury to the defendants of granting an injunction would far exceed that to the plaintiff of refusing it, and the injunction was dissolved. The observations of Lord Justice Knight Bruce are of some importance in this case. He said: .
"To purpose, in a case like this, where, if the company are wrong, ample compensation in damages may be obtained by the contractor, that the company are to have a person forced on them to perform these works whom they reasonably or unreasonably object to (whereas there would be no reciprocity if the wrong were on the other side) for the purpose of compelling the performance of the works, is more than I am able to do".
10.1n Munro v. Wivenhoe, etc. (1865) 12 L.T. 655) where a contractor applied for injunction to restrain the company, whose work he had contracted to execute from rescinding the contract. The Court refused to issue an injunction; Lord Justice Knight Bruce said at page 757 that.
"The Court cannot enforce specific performance of the works: it cannot look after the. Acts and conduct of the plaintiff not to say how far he does or does not depart from what is right in executing the works or . Profession to execute them. If he is or shall be wronged by his exclusion from the works, and by the act of the company in executing the works A themsleves, that will be a case for damages to be assessed and given, either in this Court or in a Court of law, but it is not a case for specific performance or relief analogous to specific performance, which to proceed to grant an injunction on this part of the prayer of the Bill would necessarily amount to".
11. The same principle was highlighted in M.A. Nasir v. Chairman Pakistan Railways and others (PLD 1965 SC 83).
12.The rules emerging from the afore-enoted authorities are:-- (i)A building or an engineering contract for executing work upon the land of another are mere licence to enter upon the site or land necessary to execute the work. Such licence can be revocable by the employer at any time; (ii)No injunction can be issued against the owner at the instance of building contractor. His proper remedy is suit for damages.
13. Now I will turn to examine the rule laid down in Pakistan Paper Corporation Limited v. National Trading Company Limited 1983 CLC 1695. This case proceeds on distinguishable facts which are not relevant to the facts of the case in hand. In this case, Pakistan Paper Corporation Limited appointed National Trading Company Ltd. As their distributor for their product for the city of Lahore for a period of three years. The Corporation declined to supply this product to the distributors from 28-2-1982 before expiry of the period of the contract. The contract itself provided that the contract was capable of termination by a notice of one month by either party. Before termination of the contract, the Corporation did not give notice to the Company and so the company filed an application under Section 20 of the Arbitration Agreement. Under clause 13 of the Distribution Agreement, the application for injunction was given in the arbitration proceedings under the agreement.
14. As indicated above, the facts of the case are not relevant for the purpose of decision of this petition. In result I find no substance in this petition which has been filed against a discretionary order passed by the first Court of appeal. It is a settled principle of law that order passed in exercise of discretionary authority is g not to be interfered in revisional jurisdiction until and unless the order is found to be arbitrary, capricious, and fanciful. In the instant case no such circumstance has been pointed out. The- petitioner has a remedy of filing a suit for damages for the cancellation of the contract. The petition is found to be without any merits and is accordingly dismissed in limine.