1. C.M.A. No, 2374/90: ' This is an application filed by defendant No,2 under Order VII, rule 11, C.P.C. For rejection of the plaint on the ground that no cause of action has been shown in the plaint, as security in respect of which the relief has been sought has already been encashed by the defendant No,1 before the suit was filed. The plaintiff filed a suit on 4-5-1989 for declaration and permanent injunction seeking the following reliefs:-
(a) declare that the plaintiff is not liable under the Tender Bond Guarantee No L/G 243/88 dated 9- 6-1988 issued by the defendant No,1 except in case of default for any amount as liquidated damages in the absence of liquidated adjudicated amount of loss/damages if sustained by the defendant No,2.
(b) Permanently restraining the defendant No, 1 from making payment of the sum specified in the Tender Bond Guarantee L/G 243/88 dated 9-6-1989 or any part thereof except under order of a Court of competent jurisdiction.
(c) Permanently restraining the defendant No,2 from enforcing the Tender Bond Guarantee L/G No,243/88 dated 9-6-1988 in the absence of dimension of loss/damages by a Court of competent jurisdiction.
2. ' The main allegations in the plaint are that the surety furnished is subsisting and the defendant No,1 is threatening to encash the bank guarantee which according to law it is not entitled. There is nothing in the plaint to show that the bank guarantee has been encashed or was encashed before filing the suit. This fact can be ascertained only from the written statement filed on behalf of the defendant and counter affidavit to plaintiff's application under Order XXXIX, Rules 1 and 2, C.P.C.
3. Order VII, rule 11, sub-clause (a) provides that the plaint can be rejected only where a reading of the plaint makes it clear that no cause of action has been made out. For the purposes of employing Order VII, rule 11 (a) C.P.C. Only the plaint is to be looked into and nothing else. Reference can be made to 1988 CLC 1207; 1988 CLC 473 and 1988 CLC 308; 1987 CLC 2461 and PLD 1981 Kar. 604 and many other authorities on the point. Mr. Fazal Ghani, the learned counsel for the defendant states that as from the record it is clear that the bank guarantee has been encashed, the defendant should not be allowed to be dragged in the proceedings unnecessarily. The fact whether the bank guarantee was encashed before filing the suit is an issue which will be determined only after necessary evidence has been brought on record. Mere B statement of the defendant which has not been admitted cannot be taken as gospel truth for the purposes of rejecting the plaint. The application is dismissed.
4. C.M.A. No,3295/89. C.M.A. No, 6878/89, and C.M.A.6879/89: ' These three applications shall be disposed of by this order. The plaintiff filed a suit on 4-5-1989 for declaration and permanent injunction. It has been prayed that the plaintiff is not liable under the tender bond guarantee dated 9-6-1988 issued by defendant No,1 except in case of default for any amount as liquidated damages in the absence of legally adjudicated amount of loss if sustained by defendant No,2 and permanently restraining defendant No,1 from making payment under the bank guarantee and defendant No,2 from enforcing the bank guarantee. The plaintiff filed application under Order XXXIX, rules 1 and 2 (C.M.A. No, 3295/89) on 4-5-1989. The learned Single Judge in chamber passed an interim order restraining defendant No,1 from making payment of the amount of bank guarantee till next hearing to defendant No,2 and notice was issued for 18-5-1989.
5. On that date Mr. Syed Iqbal Ahmed, Advocate for defendant No,1 appeared and requested for time for filing counter-affidavit. He made a statement that the payment of the amount of bank guarantee has already been made to defendant No,2 and he produced a letter to that effect.
6. ' The plaintiff was awarded a work by the defendant No,2 and for performance of that agreement bank guarantee was furnished by defendant No,1 on behalf of the plaintiff. The bank guarantee provided that in the event of failure of the plaintiff to execute the proposed contract the entire amount will become payable to defendant No,2 as liquidated damages and not as penalty for the plaintiff's failure to perform. It was also provided that defendant No,2 shall be the sole and final Judge for deciding whether the plaintiff has duly performed his obligations to sign the contract and to furnish the requisite perfomance to be security within the time or has defaulted in fulfilling the said requirements and surety shall pay without objection the sum of Pakistani Rupees three Million upon demand from defendant No,2. The plaintiff has pleaded that as no default has been committed and further that liquidated damages if any have not been assessed and adjudicated, defendant No,2 is not entitled to encash the bank guarantee and defendant No,1 is not liable to pay the said amount under the bank guarantee. It is not necessary to enter into this dispute and touch upon the merits of the case. Suffice to say that defendant No,1 has taken the plea that as the bank guarantee had already been encashed before the service of the order of injunction on it, no injunction can be granted. It is well-settled that order of injunction takes effect not from the time it is passed but from the time and date when it was C served on the party. Admittedly the order was served on 4-5-1989 but the defendant's plea is that the payment had been made on 3-5-1989 through a pay order. In this regard defendant No,1 has filed correspondence between defendant No,2 and defendant No,1 and also produced a copy of pay order and the receipt acknowledging that the pay order had been received by defendant No,2 on 3-5-1989. This factual position has been denied by the plaintiff and an affidavit has been filed stating that the plaintiff's representative was all the time in touch with the bank on 3-5-1989 as well as 4-5-1989 and till 4-5-1989 to his knowledge and information the pay order had not been received by defendant No,2. This has been denied by defendant No,1. However, in his affidavit the plaintiff deponent has not given the names of those persons who had informed him about this fact nor he has disclosed the source of information and therefore general allegations as stated in the affidavit are not sufficient to demolish the documentary evidence produced by the defendants.
7. ' Mr. Akhtar Ali Mahmood, the learned counsel for the plaintiff, contended that the pay order was encashed on 14-5-1989 after the injunction order had been served and therefore there is a clear violation of that order. Before dealing with this aspect of the case it would be proper first to decide the application under Order XXXIX, Rules 1 and 2, C.P.C. From the facts stated above the plaintiff has not been able to make out a prima facie case as the 0 payment had already been made before the service of order of injunction on the defendants. In these circumstances the application has become infructuous and is dismissed.
8. ' Now coming to the application under Order XXXIX, Rule 2 (3), C.P.C. Merely because an application under Order XXXIX, Rules 1 and 2, C.P.C. Has been dismissed it does not mean that its violation during its currency will not attract Order XXXIX, Rule 2 (3), C.P.C.
9. ' According to Mr. Akhtar Ali Mahmood, the learned counsel for the plaintiff the pay order is just like a negotiable, instrument and as the defendants had been restrained from making payment no payment could have been made on 14-5-1989. On the other hand Mr. Syed Iqbal Ahmad, the learned counsel for defendant No,1 has contended that once pay order is issued there is a relationship of debtor and creditor between the parties and the bank cannot recall that payment and payment is deemed to be made on delivery of the pay order. In this regard the learned counsel has referred to Dictionary of Banking where pay order has been defined as follows: "Bankers draft: A draft drawn by a branch on a bank on the bank's Head Office or City Office. As this is sure to be paid when presented it is acceptable anywhere as equivalent to cash. Such a draft does not satisfy the definition of a bill of exchange because it is not 'drawn by one person on another."
10. A bank draft once delivered to a party amounts to payment of that particular amount from the issuing bank. Such draft has its own sanctity and according to banking practice treated as cash payment or equivalent to payment. It is a safe F method to secure the money and ensures payment. The learned counsel for the defendant No,1 has stated that in the books of account entries denoting payment of amount in respect of bank guarantee were made, therefore, so far defendant No,1 is concerned the payment shall be deemed to have been made on delivery of the pay order. Hence question of breach of order does not arise at all. The learned counsel for the plaintiff contended that in view of PLD 1952 Lah 77 he was under the impression that after prima facie case for contempt has been made out, the plaintiff would be entitled to cross-examine the parties and thus prove the guilt. The observations made in the said authority do not support the contention of the learned counsel. If he wanted to cross-examine the plaintiff he could have filed application under Order XIX, Rule 2, C.P.C. But no such step has been taken. The learned counsel at the fag end of the arguments expressed his desire to cross-examine the deponent but it was too late to grant such a request. Order XXXIX, Rule 2 (3), C.P.0 is a penal provision and unless the charge of breach of order is not fully proved penalty cannot be imposed. In such cases the alleged F contemner is entitled to benefit of doubt as well. The defendant No,1 has prima facie established that payment had been made through a pay order before the service of notice therefore it cannot be charged of violation of order of injunction. The learned counsel contended that encashment of pay order on 14-5-1989 will amount to breach of order. The facts, circumstances and the mode of payment has been discussed above. Considering the banking practice the payment was bona tide because in case of pay order payment is deemed to be made on its issue and delivery. In these circumstances I am not inclined to hold defendant No,1 liable under Order XXXIX, Rule 2 (3). The application is therefore dismissed.
11. ' C.M.A. No,6878/89 has been filed for granting status quo ante in respect of the payment made by defendant No,1 to defendant No,2. In view of the aforesaid order such an order of status quo ante cannot be granted. This application is also dismissed.