' IMAM ALI G. KAZI, J--This appeal under section 3 of the Law Reforms (Amendment) Act, 1972 is from the judgment and decree passed by learned Single Judge of this Court on 4-7-1975 in Suit No,296 of 1966 whereby suit filed by appellants was dismissed with costs subject to certain observations,
2. That facts leading to the filing of this appeal are as under; Messrs Karachi Steam Roller Flour Mills Company Ltd., Messrs Sindh Flour Mills Company Ltd., Messrs India Flour Mills (1936) Ltd. And Messrs Pakistan Roller Flour Mills agreed with the Director, Civil Supplies, Karachi to mill indigenous and imported wheat into Atta, Maida, Suji and Bran, commonly known as wheat products according to prescribed percentage of extraction.
3. Under the agreement referred to hereinabove the wheat was to be supplied to the Millers by the Government on credit at a fixed price while the wheat products were too he sold to Atta Depots and Ration shops at controlled price. The difference between the two rates was worked out to be Rs,124-6-0 per hundered maunds of wheat milled by them. This amount was taken to be milling charges inclusive of all expenses. This arrangement was effective from 1st July, 1950.
4. In the year 1952, due to increase in the price of imported wheat, the Government raised the issue rate from Rs,11-4-0 to Rs, 12-4-0 per maund with effect from 25th May, 1952, but decided not to increase the retail price of Atta. The Director Civil Supplies, Karachi and other high officials of the Government of Pakistan persuaded the Millers to reduce their milling charges initially for a period of 3 months to Rs,91-12-0 on the understanding that the matter will be reconsidered subsequently.
On expiry of the period of 3 months in spite of repeated representations by the Millers, the Government of Pakistan did not restore the original milling charges at Rs,124-6-0 per hundred maunds of wheat. It is from this stage the Millers started raising dispute with the Government. They claimed restoration of their milling charges in addition to compensation for the losses of 1-1/2 in the wheat which they had to suffer in milling process. They worked out their demand to be of an amount of Rs, 66,87,932-3-0 on both the counts. Such a dispute engaged the attention of the Government and a series of meetings among officials of Ministry of Food, Government of Pakistan, Karachi Administration and the represenatives of the Millers took place to negotiate a settlement.
The Government of Pakistan decided to pay the Millers the milling charges at the rate of Rs,102-69 for the poriod 1-9-1952 to 30-6-1955 and at the rate of Rs,104-25 for the period 1-7-1955 to 30-4-60.
As a result of above decision the Millers were given a credit of Rs,36.05,127-1-9. The Millers accepted such credit under protest. It may be mentioned here that the account was kept by the Director, Civil Supplies, Karachi and such entry was recorded in the accounts so maintained.
5. As from 1-5-1960 the wheat was decontrolled and certain stocks of wheat and its products were lying with the Millers. Due to decontrolling of wheat, price of wheat registered an increase. The cost of wheat stocks was calculated at market price and amount debited to Millers' account, who were asked to pay the same.
6. On 1st July, 1962 the Food Department was transferred to the erstwhile Province of West Pakistan as on account of change in the Constitution food became a Provincial subject. At the time of transfer a sum of Rs,69,29,347-59 stood as debit balance against the Millers. This figure is, however, not disputed but the Millers claimed certain adjustments due to amount payable to them on quality difference on indigenous wheat, difference in milling charges on imported wheat for the period from 1-9-1952 to 30-6-1962, milling losses of 1-1/2 on imported wheat with effect from 1st December, 1958 to 30th June, 1962 and deletion of, entry of Rs,16,32,888 debited on account of appreciation of the value of the stock of wheat due to decontrolling. The Millers then claimed that on taking of proper accounts certain amount will be due and payable to them.
7. An agreement was executed by the Millers and the Government of West Pakistan on 2-12-1965.
Clause 6 of the agreement provided that 10% will be payable on outstanding amounts and clause 7 clearly stipulated that in case arrears are not paid within 4 days the amount together with penal interest under clause 6 shall be recoverable as arrears of land revenue.
8. The Millers had reported shortage of wheat stock and they undertook to replenish the shortage of wheat of the value of Rs,77,50,058-00 by purchasing it from the open market. But on enquiry by the Food Department, it was found that the shortage of wheat was of the value of Rs,98,76,588.44 and asked the Millers to furnish a bank guarantee for Rs,99 lakhs. The Millers failed to furnish the bank guarantee and, therefore, the bank guarantee of the amount of Rs,35 Lakhs, which was previously furnished as a security for the stock was encashed leaving a balance of Rs,63,76,588.40 as payable by the Millers. The Government of West Pakistan by their order dated 20-10-1966 directed that the said balance amount together with penal interest at 10% per annum be recovered as arrears of land revenue in accordance with clause 7 of the agreement dated 2-12-1965 (Ext.
12/6) under the West Pakistan Government Dues (Recovery) Ordinance, 1962. Consequently, the City Deputy Collector, Karachi instituted recovery proceedings and issued a show-cause notice under section 152 of the Sindh Land Revenue Code, 1879 to the Millers for payment of an amount of Rs,63,76,588.44 within 10 days failing which coercive steps will be taken for recovery of the same.
This necessitated the filing of the present suit by the Millers. The plaintiffs prayed for the judgment and decree as under:
(a) That this Hon'ble Court be pleased to make a declaration that the order No, ABI (v)-9-63 dated 26-10-1966 passed by the Government of West Pakistan directing that Rs,63,76,588.44 be recovered from the plaintiffs as arrears of land revenue under the West Pakistan Government Dues Recovery Ordinance, 1962, is illegal, ultra vires and of no effect and further that defendants have no right or authority to order any sum of money as due and recoverable from the plaintiffs, and as arrears of land revenue in respect of the dealings between the parties.
(b) That an injunction be issued restraining Government of West Pakistan (defendant No,1) and City Deputy Collector, Karachi (defendant No,4) from recovering or realising from the plaintiffs the aforesaid sum of Rs,63,76,588.44 as land revenue under West Pakistan Government Dues Recovery Ordinance.
(c) That defendant No,2 be ordered to supply all the inspection notes and wheat notes in respect of all quantities of indigenous wheat sold and supplied to the plaintiffs, from West Pakistan, Bahawalpur and Sindh between 1951 to 1957 and to work out the quality allowance payable to the plaintiffs and/or direct the same to be worked out and determined.
(d) Should this Hon'ble Court be pleased to hold that an account is to be taken separately in respect of the dealings between the plaintiffs and the Central Government and in respect of dealings of the plaintiffs with the Government of West Pakistan then the same be ordered to be taken separately, and that the amounts due in respect of each such account be finally determined and ascertained and all the claims of the plaintiffs be worked in the manner mentioned above, by determining the amount finally due on each account to the plaintiffs.
(e) For each other and further relief as this Hon'ble Court may deem appropriate in the case.
(f) For costs of suit."
9. Both the Government of Pakistan and Government of Sindh (successors of Government of West Pakistan) filed their written statements. The Government of Pakistan generally denied the claim of the plaintiffs and also claimed that the suit was barred by law of limitation. The Provincial Government disowned the liability for the period prior to 1-7-1962 except that they were entitled to claim the cost of the stocks that were lying with the Millers and they were also entitled to recover the balance amount of Rs,76,588.44 being the cost of the wheat that was found short in stocks on the basis of the agreement and the undertaking of the Millers. They generally denied the other averments. On the basis of the pleadings of the parties, the following issues were settled by the Court; (1)(a)Was any meeting held on 31-12-1960 between the plaintiffs and the representatives of the Central Government?
(b) Was any decision taken at this meeting for payment to the plaintiffs milling charges and milling loss allowance on the lines mentioned in para. 17 of the plaint?
(c) Does this decision constitute an agreement binding on and enforceable against the Central Government?
(2) Are the plaintiffs not liable for payment of Rs,16,32,888.19 to the Central Government on account of the appreciation of wheat prices for the reasons stated in paragraph 15 of the plaint?
(3) (a) Was there any agreement between the plaintiffs and the Central Government for payment to the plaintiffs of quality allowance on the lines mentioned in paragraphs 22 and 29 of the plaint?
(b) If so, what is the amount of this quality allowance?
(c) Is the claim for quality allowance not barred by limitation?
(4) Have the plaintiffs been wrongly debited with items (i) and (ii) of paragraph 26 of the plaint? If so, are these entries liable to be reversed?
(5) Are the plaintiffs entiled to payment by the Provincial Government of Rs,12,00,000 as allowances for supply of inferior quality of wheat as from the period commencing from the date of Government's letter dated 12-10-1962?
(6) Are the plaintiffs entitled to claim any allowances from the Provincial Government on the basis of any agreement between the plaintiffs and the Central Government allegedly reached at the meeting held on 31-12-1960. If so, in that amount?
(7) Whether the Provincial Government is entitled to recover from the plaintiffs Rs,63,76,588.44 as arrears of land revenue?
(8) Has the defendant No,5 any share in the amount claimed by the plaintiffs from the Provincial Government? If so, is this amount recoverable in the present suit?
(9) Whether the plaintiffs are entitled to claim milling charges for wheat consumed at the original rate of Rs,24-6-1 per hundred maunds or in the alternative such reasonable milling charges including 1-1/2 milling loss as may be fixed by this Hon'ble Court from 1-9-1952 and upto the final decree in the suit and if so, from which of the defendants?
(10) Whether the dues demanded by defendant No,1 in this case are recovered by the provisions of Revenue Recovery Act, 1890 read with West Pakistan Government Dues Recovery Ordinance, 1962?
If so, whether the suit is barred under the provisions of the said Act and Ordinance?
(11) Whether the suit for accounts is maintainable against the defendants?
10. The learned trial Judge after minutely examining the evidence both oral and documentary produced by the parties decided issues Nos.1, 3, 4, 5, 6, 9 and 11 against the appellants. Issues Nos.2 and 8 were not pressed before him. As regards issue No,7 that related to the recovery of dues through coercive process under the Sindh Land Revenue Code, 1879 he held that as the amount due and payable by the appellants was determined and appellants were informed of the same vide Ext. P/244 and they had expressly agreed by clause 7 of the agreement entered into by them with the Government that dues remaining unpaid for 4 days could be recovered as arrears of land Revenue no exception could be taken to recovery of such dues under the provisions of the said Code.
11. Issue No,10 related to the recovery under provisions of the West Pakistan Government Dues Recovery Ordinance, 1962. The learned trial Judge held that as no Notification under section 3 (2) of the West Pakistan Government Dues Recovery Ordinance, 1962 was issued declaring such dues to be recoverable as the arrears of land revenue the respondents could not resort to action under the Ordinance. This issues was decided in the negative.
12. As a result of his findings mentioned hereinabove, the suit filed by the appellants was dismissed with costs by the judgment passed by the learned single Judge on 4-7-1975. The trial Judge, however, observed that a certain sum representing the amount as a result of increase in the price of wheat due to decontrol was wrongly debited to the account of appellants and required such entry in the account to be reversed.
13. The appellants being aggrieved by the judgment and decree mentioned hereinabove have preferred this appeal.
14. Mr. Mushtaq Memon, the Advocate appearing for the appellants took us through evidence recorded in support of all the issues to show that the finding of the learned trial Judge on such issues was not correct. He, however, strenuously led strees on the ground that the Government dues could only be recovered under the West Pakistan Government Dues Recovery Ordinance, 1962 after the Government issues a Notification declaring that such dues would be recoverable from the defaulters as arrears of land revenue. The learned trial Judge himself had held that the clues in this case in absence of such Notification could not be recovered; under the Ordinance appellants were entitled to a decree at least to that extent. He further contended that any agreement between the parties recording consent of a party that dues could be recovered as arrears of land revenue would not confer jurisdiction on the Authorities to recover the dues as arrears of land revenue. To support his such arguments he relied on the cases reported in PLD 1967 Kar. 673, PLD 1975 Lah.
1059, PLD 1987 Lah. 268, PLD 1987 Lah. 316, PLD 1962 SC 384, PLD 1965 SC 698 and AIR 1947 PC 78.
15. Mr. Abdul Hafeez Lakho, the Advocate General Sindh argued that nothing has been pointed out by the learned counsel for the appellants that can enable this Court to disturb the findings on certain issues recorded by the learned trial Judge. As regards issue No,10, he, however, contended that the trial Judge had rightly held that the dues could not be recovered under the West Pakistan Government Dues Recovery Ordinance, 1962 as no Notification contemplated by its section 3 (2) was ever issued by the Government and appeal to that extent could be accepted and suit decreed to that extent.
16. Mr. Mushtaq Memon, Advocate for the appellants was unable to point out any infirmity on record that could justify disturbing the finding of the trial Judge on issues Nos. 1, 3 to 6, 9 and 11.
17. The admitted position in this case is that the Provincial Government had initiated the proceedings to recover their dues under Clause 7 of the agreement executed by parties on 2-12- 1965 (Ext. 12/6) as well as under the provisions of the West Pakistan Government Dues Recovery Ordinance, 1962 and requested the City Deputy Collector, Karachi (Respondent No,4) to effect recovery. The City Deputy Collector directed issuance of show-cause notice to the appellants under section 152 of the Sindh Land Revenue Code, 1879 (Ext.12/62) and required them to pay the amount within 10 days failing which further steps would be taken by him according to law. At the relevant time when the dues of the respondents were sought to be recovered from the appellants the Sindh Land Revenue Code, 1879 was in force. Chapter-XI of the said Code provides an elaborate procedure for the recovery of all sums due on account of Land Revenue and certain other charges leviable under the said Act. Section 187 of the Sindh Land Revenue Code, 1879 authorises certain other dues of the Government under other enactments and under contracts to be recovered as arrears of land revenue. Section 187 of that Code is reproduced as under: "187. All sums due on account of land revenue, all quit-rents, nazranas, succession duties, transfer duties and forfeitures, and all cesses, profits from land, emoluments, fees, charges, penalties, fines, and costs payable or leviable under this Act or under any Act or Regulation hereby repealed, or under any Act for the time being in force relating to land revenue; and all moneys due by any contractor for the farm of customs duties, any other duty, or tax, or of any other item of revenue whatsoever, and all specific pecuniary penalties to which any such contractor renders himself liable under the terms of his agreement; ' and also all sums declared by this or by any other Act or Regulation at the time being in force or by any contract with the Crown to be leviable as an assessment, or as a revenue demand, or as an arrear of land revenue; ' shall be levied under the foregoing provisions of this Chapter and all the foregoing provisions of this Chapter shall, so far as may be, be applicable thereto.
' And any money ordered by a liquidator appointed under section 42 of the Co-operative Societies Act, 1912 to be recovered as a contribution to the assets of a society or as the costs of liquidation may, notwithstanding anything contained in subsection (5) of section 42 of the said Act be levied under the foregoing provisions of this Chapter and all the foregoing provisions of this Chapter shall, so far may be, be applicable thereto: ' Provided that every application for recovery in such manner of any such sum shall be accompanied by a certificate signed by the Registrar appointed under section 3 of the Cooperative Societies Act, 1912, that the amount may be recovered as an arrear of land revenue.
' And all persons who may have become sureties under any of the provisions of this Act or of any Act or Regulation hereby repealed, or for any such contractor as aforesaid for any sum of money shall, on failure to pay the amount or any portion thereof for which they may have become liable under the terms of their security-bond, be liable to be proceeded against under the provisions of this Chapter as revenue-defaulters and all the foregoing provisions of this Chapter shall, so far as may be, be applicable to such persons.
' And in the event of the resumption of any such farm as is aforesaid, no person shall be entitled to credit for any payments which he may have made to the contractor in anticipation.
' And any person who has received from the Provincial Government a free grant of money for any agricultural purpose, subject to the proviso, that he shall refund the same on failure to observe any of the conditions of the grant, shall on failure to observe any such condition and to repay the said sum to the Provincial Government, be liable to be proceeded against under the provisions of this Chapter as a revenue-defaulter; and all the foregoing provisions of this Chapter shall, so far as may be, be applicable to such person."
' On plain reading of the provisions mentioned hereinabove it will be seen that following amounts can be recovered under the provisions contained in Chapter-XI of the said Code;
(i) All sums due on account of land revenue, cess, fees, charges, penalties, fines etc. Payable and leviable under the Code.
(ii) All moneys due by any contractor for the farm of customs duties or any other duty or tax or any other item of revenue etc.
(iii) All sums declared by the Code or by any other Act or Regulation to be so recoverable.
(iv) All sums which are by any contract with Government leviable as an assessment or as an arrear of land revenue.
In view of above provision of law it is clear that Government dues under the revenue laws, Governemnt dues declared by any other law to be so recoverable and Government dues arising out of certain contracts when parties to the contract agree that dues under the contract can be so recovered under the provisions of Sindh land revenue Code 1879. In the present case clause 7 of the agreement expressly provided that dues under that contract will be recoverable as arrears of Land Revenue and the, dues could therefore be recovered as arrears of land revenue independent of any notification under Section 3 (2) of the West Pakistan Government Dues Recovery Ordinance 1962. The cases mentioned above and relied by Mr. Mushtaq Memon on such aspect of the case will not be relevant in view of express stipulation in clause 7 of the agreement and provision of law made in section 187 of the Sindh Land Revenue Code, 1879. No exception could, therefore, be taken to the findings of the learned Single Judge recorded on issues Nos.7 and 10.
18. In view of above, we find no force in this appeal, which is dismissed with costs.