1. MIAN ALLAH NAWAZ, J.---This first appeal by the Defendants is from the judgment and decree dated 28-2-1987 of Mian Hameed Jillani, Civil Judge Ist Class, Lahore, decreeing the suit of the plaintiff, while Civil Revision No,2235 of 1986 is by the plaintiff against the order of the same Civil Judge, dated 17-11-1986 directing the plaintiff to file separate plaints in respect of each contract and fix the requisite court-fee on each plaint. Both the first appeal and the Civil Revision arise out of the same suit and involve common questions of law and facts and are, therefore, being disposed of by a single common judgment.
2. 2.The facts out of which the first appeal and the Civil Revision arise, are not much in dispute. The uncontested controlling facts are that Messrs Masood Autos (plaintiff, respondent herein) is a registered firm and shall be referred to as "seller". The appellant/defendant is Province of the Punjab and shall be referred to as "purchaser". The stores/goods are the spare parts of agricultural.
3. Machinery like bulldozers and tractors being. Operated by the Agricultural Department at various agricultural engineering workshops, situated at Faisalabad, Sargodha, Gujranwala, Talagang, Layya, Rawalpindi, Lahore, Multan, Bahawalpur and Dera Ghazi Khan. These workshops, shall be referred to hereinafter "as consignees". There is a supply wing in the Directorate of Industries, Lahore, which has been assigned the function of purchasing the spare-parts for the use of machinery, noted above and the Director-of Industries, had been allocated the function of entering into the contracts for the purchase of these spare parts.
4. 3.By means of 61 separate contracts executed between the Director of Industries, on behalf of the Province of Punjab (defendant, appellant herein) and Messrs Masood Autos in between 5-12-1982 to 27-4-1983, Messrs Masood Autos, was to supply the genuine spare parts of IA.D-VII, Bulldozers, manufactured by the Kamatsu Company of Japan worth sixty lacs of rupees. These contracts were on a written form and provided the conditions pertaining to the venue of delivery, the mode of receipt of stores/goods, through process of inspection, the mode of payment, the securities and the provisions relating to extension of time after the expiry of time fixed for the contracts. The spare parts were to be supplied by 15-6-1983.
5. 4.It was on 7-5-1983 that the seller made an application to Director of Industries, for extension of date of delivery and change of its venue, on account of reasons that the stores/goods were in transit from Japan and were destined to reach Karachi on or before 15-6-1983. It was further prayed that the venues of deliveries were scattered in length and breadth of the Punjab and it was not possible to comply with the terms of the contracts. It was, therefore, prayed that the venue be changed to Agricultural Engineering Workshop, Lahore.
6. 5.No decision was made on this application on the ground that still there was sufficient time and appropriate decision will be taken on 18-6-1983 after reviewing the whole situation. On the said date the Director of Industries gave his consent to prayer embodied in' the application and solicited the advice of Director Agriculture (Field), who gave the advice to the effect' that the delivery date be changed to 30-6-1983 and Agricultural Engineering Workshop, Lahore, be declared as consignee-end of all the contracts; that the representative of consignee ends will be available on 30-6-1983 at Lahore. It was suggested that necessary amendments be issued in the contracts. The file was sent to the Finance Department for its concurrence. On 27-6-1983, the Finance Department, gave the requisite concurrence and the file was received.In the supply-wing of Directorate of Industries on 28-6-1983 when the Director of Industries, consulted his Joint Director, who recorded a note to the effect that only one day was left behind, no inspection-call has been received from the seller and so the necessary amendments could not be issued.
7. 6.In the aforesaid background the stores/goods partly received at Lahore, were returned to seller.
8. The seller fulfilled the various contracts by offering stores/goods at consignee-ends at different dates after the expiry of the period embodied in the contracts. The seller made applications on various occasions for extension of time which were allowed. The stores/goods were inspected and accordingly received and used by the consignee except the stores/goods rejected at Agricultural Engineering Workshop, Faisalabad. In this background the seller filed a suit on 1-9-1985 for the recovery of unpaid price of stores/goods received and used by the defendants, the recovery of amount deducted by way of late delivery charges, recovery of securities and for damages and compensation. It was averred in the plaint that the defendants had changed the date of delivery from 15-6-1983 to 30-6-1983 and had also changed the venue of delivery from different consignee-ends to Agricultural Engineering Workshop, Lahore but later on committed breach of these covenants and received the stores at consignee-ends. It was also averred that on account of this breach the ?Laintiff had suffered the loss. Item-wise claim of the plaintiff was as follows:--
(a) The price of goods/stores actually received by the defendants and used by them but price of goods not paid.Rs, 7,7,8,938.40
(b) Amount of securities: Rs,4,49,788.00
(c) Late delivery charges deducted from the payment of price to the plaintiff. Rs, 4,48,037.67
(d) Price of stores/goods offered at Faisalabad which were not received without any fault on the part of Seller.Rs, 13,28,298.52
(e) Amount of damages on account of loss of businsess, of reputation in business circles, friends and storage charges of the stores offered for inspection at various stations.Rs, 4,00,000
(f) Interest at the rate of 14% per annum till 30-8-1985. Rs, 11,59,568.70 Total :- Rs, 45,64,631.29 7.The suit was resisted by the Province of Punjab on a number of legal as well as factual grounds. It was pleaded in the written statement that the plaintiff had no cause of action; that the stores/goods were not supplied at Faisalabad, Sargodha, Gujranwala, Talagang, Layyah, Rawalpindi, Lahore, Multan and Bahawalpur within time fixed in the contracts; that the Court at Lahore had no territorial jurisdiction to hear the cases; and that there were 61 independent contracts between the parties which were executed on different dates and related to supply of stores/goods to different consignees. Therefore, the cause of action relating to each contract, was independent and distinct. The plaintiff had no right to amalgamate these causes of actions in one suit; that the plaintiff had affixed the highest court-fee of Rs, 15,000 on plaint in respect of reliefs flowing from separate contracts. The plaintiff was under the law, required to file separate plaints by affixing the requisite court-fee on them. On these grounds, it was pleaded that the suit was not competent.
9. 8.On merits it was pleaded by the defendant that the parties were governed by 61 separate contracts, wherein the date of delivery was specifically mentioned. It was contended that these contracts were mercantile transactions and the time was the essence of the contracts; that the Director of Industries, neither changed the date nor the venue of delivery and so the plaintiff had committed breach of the contract by not supplying stores/goods at the stipulated date and so the defendant was within its legal right to deduct the late-delivery charges and detain the securities on account of breach of the contracts on the part of the plaintiff. It was prayed that the suit be dismissed.
10. On the pleadings of the parties, the learned trial Court framed as many as eight issues, which are as follows:-
(1) Whether this Court has no territorial jurisdiction to try this suit?
(2) Whether the plaintiff is entitled to recover the dispute amount as damages and compensation from the defendants?
(3) Whether the plaintiff has no cause of action to file the suit?
(4) Whether the suit is not maintainable?
(5) Whether the suit is bad for misjoinder and non-joinder of the necessary parties?
(6) Whether the suit is hit by section 79 of C.P.C.
(7) Whether notice under section 80, C.P.C. Was not given.
(8) Relief.
11. 9.During the pendency of the trial on 13-11-1986, the defendant submitted an application for directing the plaintiff to file separate suits in respect of different contracts. It was canvassed in this application that the dispute arose with respect to 58 separate commercial transactions; that consignee-ends in these contracts were different; that breach, if any occurred at different places.
12. So the plaintiff was required to file separate plaints in the Court with respect to each transaction.
13. This application was allowed by order, dated 17-11-1986. Against this order a Civil Revision bearing No,2235 of 1986 was filed before this Court which was admitted to regular hearing and the aforesaid order was suspended. In view of this, the learned trial Court completed the hearing of the case and by means of judgment, dated 28-2-1987 decreed the following reliefs:
(1) Cost of goods supplied: Rs,7,78,938.40
(2) Securities: Rs,4,49,788.00
(3) Late delivery charges. Rs,4,48,037,67
(4) Damages. Rs,4,00,000.00
(5) Interest at the rate of 14% till filing of the suit. Rs,7,56,651.50
(6) Interest at the rate of 14% from the date of the suit till passing of the decree.Rs,5,95,017.10 Total: Rs,34,28,432.67 10.The learned counsel Kh. Muhammad Farooq, appearing on behalf of the appellant raised the following points in support of his appeal: Firstly, It was contended that 58 contracts between the parties pertained to commercial cause. In these contracts, the date of delivery was specifically given as 15-6-1983 for the supply of stores at consignee-ends. The Director of Industries who was competent to change this date, did not alter it; that this date of delivery was the essence of the contracts. There was no dispute that the stores were not delivered on the due date and at the venue of the delivery. Therefore, it was apparent that the plaintiff had committed a visible breach of these, contracts, and was not therefore, entitled to any compensation/damages. On this factual assertion the reliance was placed upon the statements of D.W.4, Saeed Ahmad Khan, D.W.5, Syed Ras Masood, D.W.6 M.A. Fazil, D.W.7 Mr. Zafar- ud-Din Sheikh and D.W.8 Muhammad Siddique. It was urged that aforesaid witnesses were relevant officials dealing with the application of the plaintiff for change of the date and venue of delivery.
14. These officials deposed that neither the date of delivery nor the venue of delivery was changed.
15. Secondly, it was contended that the plaintiff undisputedly delivered the stores at consignee-ends on various dates much after the date fixed in the contracts. It is also not disputed that the plaintiff obtained the orders of extension from the competent authorities in accordance with the provisions contained in the contracts. These extensions were granted subject to conditions of deduction of late delivery charges which were provided in the contracts as liquidated damages. It was urged that at the time of formation of the contracts a clause was provided for such deduction of liquidated damages in case of breach on the part of the Seller. According to the learned counsel, therefore, the defendants were, completely within their legal rights under the contracts to deduct these amounts and the Civil Judge has incorrectly and illegally awarded decree on this count.
16. Thirdly, that as far as the securities were concerned, it was canvassed that the plaintiff was entitled to receive securities subject to satisfactory fulfilment of the contracts. Fourthly, on the question of damages and of interest the learned counsel forcefully pointed out that neither damages nor the interest could be awarded to the plaintiff in view of simple reasons that the contract was breached by the plaintiff and not by the defendant and additionally the plaintiff was not entitled to any interest on account of reason that neither any ascertained sum was detained by the defendant nor any part of the contract was breached by the defendant. Reliance was placed on Syed Sibte Raza and another v. Habib Bank Ltd. PLD 1971 SC 743.
17. On the basis of these submissions, it was submitted that the appeal merited to be accepted.
18. 11.Regarding revision filed by the plaintiff, it was contended that the suit filed by the plaintiff was hit by the principle of misjoinder and the Court had the authority under Order II, Rule 7, C.P.C. To order separate trials. In this case, the plaintiff had combined different causes of action flowing from 58 contracts in one suit and so the defendants were not able to lead full and complete evidence in support of their defence. It was further urged that the suit was hit by the principle contained under section 17 of the Court Fee Act. It was represented that the plaintiff had paid the highest court-fee of Rs,15,000 by avoiding court-fee on each claim. The plaintiff was bound to value each claim separately and affix court-fee accordingly. Reliance was placed on Secretary of State v. N.M.R.
19. Ayyasami Chettiar (AIR 1933 Madras 178), R.M.P.L.S. Chettiar Firm v. Koormiah and another AIR 1941 Rangoon 95, D. Lakshminarayana Chettiar and another AIR 1954 Madras 594 and Ava A. Cowasjee and 8 others v. Nasreen Nizam Shah and 4 others 1984 CLC 2705.
20. 12.The learned counsel appearing on behalf of (respondent), on the other hand, supported the impugned decision of the trial Court. It was urged that it was clear from the statement of D.Ws that the Director of Industries had consented to change the date of delivery, venue of delivery and had solicited the advice of Director Agriculture (Field), who gave consent to the aforenoted changes; that the Finance Department also gave consent to the proposed changes. Seen from this angle, it was urged that the date of delivery as well as venue of the delivery stood changed. The learned counsel urged that it was apparent from the evidence of D.Ws. That the representatives of consignee ends were present with their vehicles on 30-6-1983 at Lahore in order to receive goods; that the plaintiff had with the permission of defendants, stored 28 boxes containing goods at Agricultural Engineering Workshop, Lahore and was prepared to offer the remaining stores at Lahore but the defendant refused to receive the stores/goods on account of a telegram sent by one Ahmad Ali and the plaintiff was forced to supply stores/goods at consignee-ends without any fault on his part. It was contended that the defendant had committed breach of the contract by refusing to receive goods at Lahore and so substantial loss was caused to the plaintiff. It was further contended that the learned trial Court was completely in error in rejecting the claim of plaintiff in respect of Faisalabad Engineering Workshop. It was in evidence of P.W.2 Muhammad Zia Iqbal, P.W.3, Khalid Masood and P.W.2 Masood Malik, plaintiff that the stores/goods were offered at Faisalabad but were not received on account of illegal, unjustified and intransigent behavior of the Agricultural Engineering, Faisalabad. These stores were purchased by the seller for the purpose of supplying them to the defendant and the plaintiff was, therefore, entitled to receive their value on account of violation on the part of defendant. It was submitted that these stores were special spare parts to be used in Bulldozers run by Agricultural Workshop, Faisalabad and could not be sold in open market; that they were still lying with the plaintiff. It was submitted that although the plaintiff had neither filed cross-objections nor filed any appeal against the findings of the learned trial Court on this count, this Court has the power under Order XLI Rule 33 to award this claim to the plaintiff in this appeal as well 13.It was next contended that as far as the claim with respect to recovery of the price of stores/goods supplied and used by the defendant are concerned, it was admitted by the defendant that these stores were received, had been utilized in the machinery but the payment had not been made on account of rigmarole of technicalities by the defendant. It was submitted that it was a simple case of detention of price of goods received by the purchaser. It was next urged that the appellant was entitled to damages by way of compensation and not by way of interest. Reliance in this behalf was placed on Section 72 of the Contract Act.
21. 14.On the question of late delivery charges it was urged that the defendant was entitled to deduct these amounts, if breach of contracts was committed by the plaintiff, but the circumstances of the case very clearly showed that the breach flowed from the defendant's side. Therefore, the finding of the 1st Court on this count was not open to any exception. The same argument was given on the next count i.e, the securities.
22. 15.Reverting to Revision, it was submitted that the trial was completed by the 1st Court, evidence was adduced by both the parties, so this technical objection cannot be given effect to in Appellate Court and the parties cannot be put back to the vortex of litigation again. It was submitted that the plaintiff had suffered enormous loss at the hands of the defendant. He imported the stores directly from Japan. The stores/goods at Faisalabad were refused without any reasonable basis and these stores were purchased at exorbitant rates from the market which could prove the measure of damages. It was submitted that the findings of the Courts below were not open to any exception.
23. No other point was urged.
24. 16.We have heard the arguments of the parties at length and perused the record with their assistance. The points emerging for consideration are: (i)Whether the suit is hit by the principle of misjoinder of causes of action and on account of this circumstance, prejudice has been caused to the appellant-defendant.
(ii) Whether the plaintiff was required to file separate plaints, value each claim, separately and was bound to affix separate court-fees on each claim. What is the legal effect of this circumstance of the case?
(iii) Whether the date and venue of delivery was changed from 15-6-1983 to 30-6-1983 and the appellant-defendant had committed breach of this covenant by refusing to receive the stores at Agriculture Engineering Workshop, Lahore on 30-6-1983 and so have broken this condition of contract which was in fact the essence of the contract.
(iv) Whether the plaintiff is entitled to the recovery of price of goods/stores received and used by the defendant and whether the plaintiff is entitled to receive interest by way of damages on account of detention of unpaid price of stores.
(v) Whether the defendant is entitled to recover the late delivery charges under sub-clause (d) of clause 3 of the Contract.
(vi) Whether the plaintiff is entitled to interest on the amounts noted above.
25. 17.Having set out the facts of the case, the submissions made by the parties and the judgment of the 1st Court, we herein proceed to determine the points Nos.(i) and (ii).The contention is that the suit related to 58 separate commercial transactions. The plaintiff was not competent to combine these 58 causes in one suit and was required to file separate suits in respect of each transaction, We have perused the plaint and find no force in this contention. On 18-6-1983 the Director, Industries agreed to change the date and venue of delivery in all the contracts by one note. The Director Agriculture (Field) dealt the question jointly. The same treatment was accorded by the Finance Department. It was on 28-6-1983 when the Director Industries did not issue the necessary amendments in respect of the contracts by one note. We are, therefore, clear in our mind that the cause of action accrued to the plaintiff when the defendant refused to receive the stores at Agricultural Engineering Workshop, Lahore and delivered back the stores/goods which had already been received in pursuance of aforenoted arrangements. Even otherwise it may be noted that Rule 3 of Order II, C.P.C. Authorizes the plaintiff to combine several causes of actions against the defendant when these causes involve jointers of interest. Rule 3 is as under:-- "(1) Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit.
(2) Where causes of action are united, the jurisdiction of the Court as regards the suit shall depend on the amount or value of the aggregate subject-matters at the date of instituting the suit."
26. ' It is clear from the first part of Rule 3 that when the plaintiff has several causes of action against the same defendant jointly, he is entitled to amalgamate them in one suit. It is quite clear that the suit was filed against the Province of Punjab in respect of all these 58 contracts. The Province of Punjab was party to each contract and the defendant was by the order of the Director of Industries by which the necessary amendment was not issued in the contract and consequently the stores/goods were not received at Lahore. We have, therefore, no hesitation in coming to the conclusion that the plaintiff had correctly combined the various causes of action in one suit and the suit was not hit by the principle of misjoinder of causes of action. The order passed by the learned trial Court directing the filing of separate plaints is, therefore, found to be contrary to the law and cannot be sustained.
27. 18.As regards the second contention, it will be advantageous to examine the applicable law.
28. Section 17 of Court Fees Act and Schedule I of Court Fees Act under the Heading "Ad Valorem Fees" as amended by the Punjab Finance Act, 1973, are relevant. These are as under:- Section 17: Where a suit embraces two or more distinct subjects, the plaint or memorandum of appeal shall be chargeable with the aggregate amount of the fees to which the plaints or memorandum of appeal in suits embracing separately each of such subjects would be liable under this Act.
29. Nothing in the former part of this Section shall be deemed to affect the power conferred by the Code of Civil Procedure, Section 9: SCHEDULE I (Ad Valorem Fees Serial No,Article Proper Fee
1. Plaint, written statement pleading a set-off or counter- claim or memorandum of appeal (not otherwise provided for in this Act) or of cross-objection presented to any Civil or Revenue Court except those mentioned in section 3.Seven-and-a-half per centum on the amount or value of the subject-matter in dispute subject to a maximum of fifteen thousand rupees.
30. Note: The amount payable under this number shall be rounded to the nearest fifty paisas.
31. The bare reading of section 17 indicates that this section applies to suits which embrace two or more distinct causes of action. In this section stress has been laid on word 'subject'. This section postulates that when a suit is filed combining multifarious causes of actions, then each claim on the basis of causes of action is to be valued separately and requisite court-fee is to be paid on it.
32. This section came under consideration in R.M.P.L.S. Chettiar Firm v. Koormiah and another AIR 1941 Rang.
33. 95.It was held therein that section 17 covers a suit which embraces two or more distinct causes of action, court-fee should be paid in each cause of action. Each mortgage constitutes a distinct cause of action. Consequently in a suit which embraces two or more mortgages, court-fee shall be paid on each mortgage and not on aggregate amount of claim. This rule was followed in D.
34. Lakshminarayana Chettiar and another's case AIR 1954 Mad. 594 and Ava A. Cowasjee and 8 others v. Nasreen Nizam Shah and 4 others 1984 CLC 2705, but this does not conclude the question.
35. 19.In the aforesaid cases the point was not considered as to whether section 17 was subject to proviso at the end of Article 1 of Schedule I to Court Fees Act. It is to be noticed that Article I Schedule 1 was amended by the Punjab Finance Act, 1973. Instead of maximum Rs,3,000, Rs,15,000 was substituted. This question came up for consideration in Raghobir Singh v. Dharam Kuar and another (3 All. 108). In this case the plaintiff claimed possession of Landhora estate and all the rights appertaining thereto, valued at Rs,21,46,006-2-0 and mesne profits of the estate from the 1st January, 1971 to the date of the institution of the suit valued at Rs,10,00,000. He paid the court-fee of Rs,3,000. The suit was dismissed and on appeal the same court-fee was paid. The office of the High Court reported to taxation officer that proper court-fee had not been paid on plaint and memorandum of appeal. The taxation officer referred the matter to the High Court, which was placed before the Full Bench. The Full Bench held that section 17 must be held to be subject to the proviso at the end of Article 1 of the Schedule to the Court Fees Act. It will be apt to quote relevant passage from the judgment of His Lordship Mr. Justice Oldfield. It is as follows:-- "... ... ...The question before us is whether this proviso applies to limit the fee chargeable on a plaint or memorandum of appeal of the nature of those mentioned in Section 17; and it is contended that it does not, as they are taken out of the operation of Art. 1 Schedule I, by being `otherwise provided for in the Act,' that is, provided for by S.17.
36. In my opinion this contention will not hold good. It is true that by the terms of Art.1, Schedule I, that Article will not apply to a plaint or memorandum of appeal 'otherwise provided for in the Act,' but those words mean a provision fixing the amount of fees chargeable and a plaint or memorandum of appeal will not come under the operation of Art. 1, Schedule I for which a proper fee has been provided in some other part of the Act. Now S.17 of the Act makes no provision of this kind for the proper fee to he charged; it merely lays down a general rule that, where a suit embraces two or more distinct subjects, the plaint shall be charged with the aggregate amount of fees to which the plaints or memoranda of appeal in suits embracing separately each of such subjects would be liable under the Act. S.17 does not pretend to fix the amount of the fee, but, on the other hand, expressly refers to other parts of the Act for the amount, that is, to the schedules, which alone deal with the amount; and the general rule in S.17 becomes necessarily governed by rules as to the amount of the fee to be found in the schedule and among them by the proviso in Art. 1, Schedule I; limiting the amount of fee on a plaint or memorandum of appeal of the nature of those referred to in section 17; for no other part of the Act deals with the amount, and, if the Article is to be applied, it must be applied in its integrity, and with the proviso, which it contains fixing a maximum fee leviable, a proviso which is in no way inconsistent with the application of the general rule contained S.17, but which governs its application.
37. In the case before us, therefore, the court-fee will be limited to Rs,3,000."
38. This view was followed by the Division Bench of Calcutta High Court in Kashi Prosad Singh v.
39. Secretary of State for India-in-Council 29 Cal.
40. 140.We have examined the aforesaid 'enunciation of law in Raghobir Singh's case and are in respectful agreement. Accordingly the contentions put forward by the learned counsel for the appellant are found to be without any force.
41. 20.In result we are of the view that the order of the learned Civil Judge dated 17-11-1986 is in contravention of the law noted above and cannot be sustained. The revision petition filed by the plaintiff is accepted and the order dated 17-11-1987 passed by the learned trial Court is hereby set aside.
42. 21.Having determined the contentions of the parties relating to form of suit and the affixation of court-fees, we now turn to the question Nos. (iii) and (iv) which are inter-related. On these questions there is substantial degree of agreement with respect to events leading to this litigation.
43. The parties have a divergence on the question of legal effect of these facts. The uncontested facts are that 61 contracts for supply of stores/goods were executed between parties; that out of them one was fulfilled and two were rescinded; that the dispute is confined to 58 contracts; that in all these contracts the date of delivery was 15-6-1983 or before; that the seller was to supply stores at consignee ends. Furthermore it is not in dispute that on 7-5-1983, the seller applied to the Director of Industries for extension of date of delivery and the change of venue of delivery; that that application was not decided and was deferred to 18-6-1983 by the Director Industries with a note to the effect that the prayer will be considered after taking into consideration the circumstances obtaining on the said date; that on the said date the Director of Industries assented to the prayer of the plaintiff and called for advice of the Director General Agriculture (Field) who advised to the effect that the date of delivery be changed from 15-6-1983 to 30-6-1983 and that the Agricultural Engineering Workshop, Lahore be declared as consignee-end of all the contracts with a condition that the transportation charges would be borne by the plaintiff. It was proposed that necessary amendments be issued; that the Supply Wing of thd Department of Industries sent the file for concurrence to the Finance Department; that on 27-6-1983 the Finance Department gave the requisite concurrence and file was received in the Supply Wing of Industries Department on 28-6- 1983. In this background the Director of Industries consulted Joint Director who recorded opinion that only one day was left and no inspection call was received from the seller. So it was proposed that necessary amendment should be declined. It is also uncontested that the plaintiff did start offering stores from 29-6-1983 which were kept in Agricultural Engineering Workshop, Lahore; that on 6-7-1983 the Store Officer Workshop communicated to the plaintiff that as expected amendment against clause No,(8) was not made, the plaintiff should remove 28 boxes containing stores/goods lying in the workshop; that the plaintiff in these circumstances had to take away the stores, offered them at consignee end after obtaining necessary sanction from the competent authorities. It is to be noticed that in this background the stores had been received by the Province of Punjab at different consignee-ends and still an amount of Rs,7,78,038.40 has not been paid to the plaintiff.
44. 22.The Province of Punjab had taken up the position in the aforesaid background to the effect that the original date of contract i.e, 15-6-1983 was in fact the essence of the contract; that the Director of Industries who was the competent authority, had not accepted the application of the plaintiff and necessary amendment had not been made with respect to the date of delivery and the venue of delivery; that the plaintiff had committed breach of contract by not supplying the stores on or before 15-6-1983 and supplied the stores/goods after the due date; that the Province of Punjab was within its rights to deduct the late delivery charges.
45. 23.In order to substantiate the aforenoted points, the plaintiff called in P.W.1 Muhammad Hassan Rizvi, P.W.2 Muhammad Zia Iqbal former Inspection Officer, Department of Industries, P.W.3, Khalid Masood, former Assistant Director Inspection Industries and P.W.4 Masood Malik while the defendant examined D.W.1, Muhammad Zafar Ullah, Assistant Agriculture Engineer, Faisalabad, D.W.2, Ali Ahmad Randawa, Store Officer Agricultural Engineering Workshop, Faisalabad, D.W.3, Falak Sher, Agricultural Engineer, Faisalabad, D.W.4, Saeed Ahmad Khan, A.A.E., Well Drilling, Sheikhupura, D.W.5, Syed Ras Mahmood, Deputy Director of Industries, Bahawalpur Division, D.W.6, M.A. Fazil Additional Director, Industries, Lahore, D.W.7, Zafar-ud-Din Sheikh, Chief Engineer, Power, Irrigation and Power Department, Lahore, D.W.8, Muhammad Siddique Chaudhry, Secretary Punjab Price and Supplies Board, Lahore, D.W.9 Mir Abdul Majid, Special Technical Officer, Purchase Cell, D.W.10 Abdul Hamid Butt.
46. 24.A number of documents were tendered by both the sides. We feel unnecessary to comment upon this evidence. Since the object and purpose of documentary evidence is to establish the points already noted above, suffice it to say that D.W. 1, D.W. 2, D.W. 3 and D.W. 4 have furnished their evidence with respect to Faisalabad episode while D.W. 5, D.W. 6, D.W. 7 have furnished their evidence with respect to circumstances dealing with the prayer of the plaintiff for change of date and venue of delivery of stores/goods. D.W. 8, D.W. 9 and D.W. 10 have given evidence with respect to the right of appellant to deduct the charges in consequence of late deliveries under the contract.
47. 25.Having noted the facts and evidence, we now proceed to determine the legal contentions. At is a settled law that ordinarily the time is the essence in mercantile contract. In commercial transactions, the parties insist upon the punctuality in performance of contractual obligations. The relevant section of Contract Act is section 55 which reads as follows:-- "Effect of failure to perform at fixed time in contract in which time is essential: When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promise if the intention of the parties was that time should be of the essence of the contract.
48. Effect of such failure when time is not essential: If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promise is entitled to compensation from the promisor for any loss occasioned to him by such failure.
49. Effect of acceptance of performance at time other than that agreed upon.-- If in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promise accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the nonperformance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so.
50. On this subject Charles Rickards' case (1950) 1 KB 616, is leading case. It will be worth while to quote a passage of Lord Denning, L.J. It reads as under:-- "If the defendant as he did, led the plaintiffs to believe that he would not insist on the stipulation as to time, and that if they carried the work, he would accept it, and they did it, he could not afterwards set up the stipulation in regard to time against them. Whether it be called waiver or forbearance on his part or an agreed variation, or substituted performance, does not matter. It is a kind of estoppel. By his conduct he made a promise not to insist on his strict legal rights. That promise was intended to be binding, intended to be acted upon and was, in fact, acted on. He cannot afterwards go back on it."
51. His Lordship added:-- "Therefore, if the matter had stopped there, the plaintiffs could have said that notwithstanding that more than seven months had elapsed, the defendant was bound to accept, but the matter does not stop there, because delivery was not given in compliance with the requests of the defendant: Time and again the defendant pressed for delivery, time and again, he was assured that he would have early delivery, but he never got satisfaction and eventually at the end of June he gave notice saying that unless the car was delivered by July 25, he would not accept it. The question thus arises whether he was entitled to give such a notice, making time the essence and that is the question which counsel for the plaintiffs has argued before us. He agrees that, if this is a contract for sale of goods the defendant could give such a notice. He accepted the statement of MacCardic, J. In Hartley v. Hymans (1920) 3 KB 475, 495, as accurately stating the law in regard to contracts for award and labour. The Judge, thought that the contract was one for sale of goods, but in my view, it is unnecessary to determine whether it was a contract for the sale of goods or a contract for work and labour, because whichever it was, the defendant was entitled to give a notice bringing the matter to a head. It would be most unreasonable if, having been lenient and having waived the initial expressed time, he should thereby have prevented himself for ever thereafter insisting on reasonably quick delivery. In my judgment, he was entitled to give a reasonable notice making time essence of the matter. Adequate protection is given to the suppliers by the requirement that the notice should be reasonable."
52. To the same effect are the observations of Lord Cairns in Bowes v. Shand (1877) 2 App. C. 455 and read as under:-- "Merchants are not in the habit of placing upon their contracts stipulations to which they do not attach some value and importance."
53. The same rule was approved in Muhammad Habibullah v. Bird and Company AIR 1922 Privy Council 179 and Messrs Hafiz Abdul Aziz Yousufani & Co. v. Burma Oil Mills Ltd. PLD 1967 Karachi 318.
26. The ratio deducible from these authorities is that ordinarily in mercantile transactions, time is the essence of the contract; that this principle is not inflexible and it is the duty of the Court to further ascertain whether in substance fulfilment of contract depends on other party's promise being performed by the fixed date or the contract date was merely for the purpose to secure the performance within a reasonable time. The intention of the parties has to be gathered from the nature of the contract, surrounding circumstances and from the express stipulations in it. The antecedent conduct of the parties may also be looked into.
54. 27.Applying this principle to the facts of the case it is quite clear that the contractual relations between the parties are regulated by 58 separate contracts deeds and general conditions of contracts applicable to the contracts of Directorate of Industries and Mineral Development Supply Wing Government of Punjab (e.g. See P. 66). It is also not in dispute that the contracts were on printed forms. Under the relevant clauses (e.g. See clause 13 of P. 66) it was stipulated that the time and the venue of delivery was to be an essence of the contract. The contract expressly provided the mode of delivery, the right of purchaser to terminate the contract in the event of default on the part of the seller, the extension of delivery date, and the mode of payment of the price of the goods received. We have, therefore, no difficulty in coming to the conclusion that the time and the venue of the delivery was in fact essence of the contract, but the difficulty does not come to end here. The difficulty arises from the subsequent conduct of the parties. It is in evidence that before the stipulated date, the defendant received the application with a prayer that the date and venue of delivery be changed. The defendant did not decline this prayer, rather deferred the matter to 18-6- 1983. On the said date, the Director of Supplies, gave an opinion in favour of acceptance of prayer.
55. The Director General Agricultural (Field) gave advice in positive, unmistakable term and stated to the effect that the change of the date, and venue, of delivery was a fait accompli and that Agricultural Engineering Workshop, Lahore be declared as a consignee-end for all the consignees; that stores/goods be received on or before 30-6-1983; that the matter was referred to Finance Department wherein concurrence was given on 28-6-1983 and finally the application for date of delivery was declined on 29-6-1983. It is also in evidence that the plaintiff offered the stores on 29- 6-1983 at Agriculture Engineering Workshop, Thokar Niaz Baig, Lahore partly and was prepared to offer the remaining stores at the aforenoted place on 30-6-1983; that 28 boxes containing the stores/goods were deposited at the aforesaid place. It is further in evidence that all the staff of Agriculture Department from consignees had arrived at Lahore with their transport to receive their respective stores/goods; that the prayer was declined on 28-6-1983 in absence of the plaintiff on account of the reasons that only one day had been left and inspection call had not been received from the plaintiff. From the aforesaid undisputed events it is quite clear that the defendant did not insist upon the delivery of stores/goods at consignee-ends on or before 15-6-1983 in consonance with clause 13 of the contract. From these circumstances we are of the view that the performance of clause 13 ibid, was in fact waived by the defendant. On the doctrine of waiver, the Province of Punjab' cannot be permitted to say that 15-6-1983 was the essence of the contract and it has been breached by the plaintiff. It is a settled principle that the performance/fulfilment of condition or promise in contract may be waived by a party, but the principle is that the waiver must be specific and be such as to demonstrate a clear intention to affect the legal relations of the parties. It must be so unmistakable and clear that the other party should reasonably believe that the performance will not be insisted upon. Lord Denning L.J., in Charles Rickards's case stated this position in the following words:- "To constitute waiver there must be conduct which leads the other party reasonably to believe that the strictly legal rights will not be insisted upon. The whole essence of the waiver is that there must be an intention to affect the legal relations of the parties. If that cannot be properly inferred from the conduct there is no waiver."
56. This doctrine is completely applicable to the facts of this case and we have no doubt in our mind that the performance of the clause pertaining to time and venue of delivery incorporated in clause 13 ibid, was, in fact, waived by the Province of Punjab. Therefore, the plaintiff cannot be held to have committed the breach of contract by not supplying the stores/goods at consignee-ends on or before 15-6-1983. So is the case of the plaintiff. The plaintiff from the start made efforts to get the time and venue of delivery in contracts changed. He did not insist that he was prepared to fulfil the contract either by 15-6-1983 or by 30-6-1983 and had been supplying the stores in accordance with the need of the defendant. Therefore, he cannot be permitted to say that 30-6-1983 was in fact the essence of the contract. The case of both the parties is of pail delicto.
57. 28.Having dealt with the aforesaid questions, now we turn to remaining questions. It is to be noticed that the representative of defendant admitted that the stores and goods supplied on various consignee-ends worth Rs,7,78,038.40 has been received, and utilised in the machinery but the price of these stores has not been paid to the plaintiff. The unpaid seller under a contract of sale is entitled to sue a buyer for the price of goods under section 55 of the Sale of Goods Act. Section 55 of the Sale of Goods Act reads as under:-- "Suit of price.---(1) Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.
(2) Where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract."
58. From the bare reference of this section it is crystal clear that when the goods have passed to buyer and the buyer wrongfully neglects or refuses to pay for the goods, according to the terms of the contract, the seller is entitled to institute the suit. The position is admitted that the seller was not paid upto the date of institution of suit. The plaintiff had all along been claiming the payment of the price of the goods/stores received by the defendant in consonance with clause 20 of the Contract which reads as under:-- "System of payment. ---(i) Unless otherwise agreed between the parties, payment for the delivery of the stores shall be made on submission of bills in the prescribed form in accordance with the instructions given in the contract by crossed cheque on a Government Treasury in Pakistan on a branch of the State Bank of Pakistan or on the branch of any other bank transacting Government business.
(ii) Payment for the stores or for each delivery shall be made to the contractor on submission of bill in accordance with the procedure laid down by the Purchaser below:--
(a) Ninety-five per cent of the price of each consignment shall be paid on proof of despatch of stores to the consignee from a Railway Station or a port in Pakistan after inspection. A photostat copy of the Railway Receipt or Bill of Lading under which the goods charged for in the contractor's bill (hereinafter referred to as the bill) are despatched shall accompany the Bill.
59. The number and date of the Railway Receipt or Bill of Lading shall be quoted on the Bill and a certificate to the effect that the Railway Receipt or Bill of Lading has been sent to the consignee shall be furnished alongwith the bill. The balance 5(five) per cent. Will be paid on receipt of the consignment in good condition by the consignee in which case the consignee's receipt shall be submitted with the bill for such balance, the purchaser (Supply Wing) however, may permit increase in the percentage mentioned in this clause in any case, if the interest of the public service so requires.
(b) In case of C&F, C.I.F., contracts, 100 per cent. Shall be paid on presentation of shipping documents.
(c) Alternatively at the contractor's option, the full value of the stores shall be paid after inspection on receipt of the consignment in good condition by the consignee.
(d) Advance payment upto 50% of the value of the contract may be made with the concurrence of Finance Department to the manufacturers of repute, Public Sector, Agencies of industrial undertaking acquired by Government. The consignees or the Indenting Officers shall be allowed to make payment direct to the contractors where suppliers are drawn under a contract direct by him.
60. From the reading of this clause, it is obvious that 80% of the price of each consignment is to be paid on the proof of despatch of stores/goods to the consignees. Further facility is provided that full value of the stores shall be paid after inspection on the receipt of the consignment in good condition. The mode of advance payment is also provided. This clause indicates that the seller is to pay the price as expeditiously as possible subject to the satisfaction of purchaser that the stores supplied conform to the quality specified in the contract. Therefore, we are clear in our mind that the seller by overwhelming evidence has established that he has supplied the goods to the buyer, and the goods have been utilised in the machinery, he was, therefore, entitled to receive the amounts noted above and the purchaser had no right to detain this price. We accordingly affirm the findings of the Courts below that the purchaser had wrongfully detained the price of the goods/stores received and used in the machinery. While doing so we also note that the learned Civil Judge committed a mistake of fact by decreeing this claim to the tune of Rs,7,78,938.50. In fact the amount comes to Rs,7,78,038.40 (this amount was admitted by the defendant vide statement of account submitted in Court by the representative of the defendant). We, therefore, modify this claim of the plaintiff to this extent and decree the payment of Rs,7,78,038.40 (Rupees Seven lacs, seventy-eight thousand and thirty-eight & paisas forty only).
61. 29.As earlier noted that the clause pertaining to date of delivery and the venue of delivery was waived by the conduct, we have no hesitation in coming to the conclusion that the defendant had no justification to withhold the price of stores, was not entitled to deduct the late delivery charges and securities. We accordingly, affirm the finding of the first Court on these issues.
62. 30.As already noted, the first Court granted interest at the rate of 14% for a period before the institution of the suit, awarded damages to the tune of Rs,4,00,000 and then awarded interest at the rate of 14% from the date of suit till the passing of the decree. The point for consideration is whether the first Court was empowered to grant interest with respect to pre-institution period. This question has not been free from difficulty. This question came up for consideration in Sham Singh v. Nanak 136 I.C.
63. 719.It was held that no interest can be granted on the retention of price of goods, if such provision was not incorporated in the contract. This view was followed in G.I.P., Ry. Co. And others v. Jugal Kishore-Mukat Lal AIR 1930 All. 132, Chet Ram v. Bhut Singh and another AIR 1927 Lah. 99, Kirpal Singh v. Jiwan Mal AIR 1927 Lah. 287, J.H. Pattinson and others v. Bindhya Debi AIR 1933 Patna 196 and Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji and others AIR 1938 Privy Council 67. The contrary view was taken in Abdullah and others v. Allah Diya AIR 1927 Lah. 333, wherein it was held that interest can be granted by way of damages to the wronged party. This view was followed in Seth Ajhodhya Prasad and another v. Shivprasad and others AIR 1927 Nagpur 18, Municipal Committee, Gujranwala v. Charanji Lal AIR 1935 Lah. 685.
31. However, the controversy was resolved in Messrs A.Z. Company v. Messrs S. Maula Bakhsh Muhammad Bashir PLD 1965 SC 505, where it was held that interest on a sum adjudged in award as damages cannot be granted before the period of adjudication unless it was so contained in the contract or 1 mercantile usages. This view was reiterated in A. Ismailjee & Sons Ltd. v. Pakistan PLD 1986 SC 499 and Ghulam Abbas v. Trustees of the Port of Karachi PLD 1987 SC 393.
64. 32.Guided by the aforesaid principle we are clear in our mind that the learned trial Court committed mistake in awarding Rs,7,56,651.50, as interest at the rate of 14% for the period before the filing of the suit. There is provision neither in the contract nor in a statute, entitling the plaintiff to such interest. The plaintiff did not allege any trade usage either. On this item, the finding of the learned trial Court, therefore, is not sustainable.
65. 33.Having concluded that the defendant has wrongfully and unlawfully detained the price of goods/stores received, had unlawfully deducted the late delivery charges and had withheld security and so deprived the plaintiff of the use of these amounts, the next question is whether the plaintiff was entitled to interest on the amount found due from the date of the suit to the date of the decree and on the aggregate sum so adjudged from the date of the decree to the date of payment. This question falls to be determined under section 34 of the C.P.C. We find ourselves in agreement with the learned trial Court that the plaintiff was entitled to interest for this period at the rate of 14%. The plaintiff was entitled to compensation for the deprivation, as representing the profit he might have made if he had the use of the money or conversely the loss he suffered because he had not that use. In this connection, we have taken notice of the fact that ordinarily 13% to 15% is being charged as mark-up by banks. We hold, therefore, that interest at 14% per annum shall serve as fair measure for the purpose of compensating the plaintiff.
66. 34.The only remaining point for adjudication is whether this Court is empowered under Order 41 rule 33 of the Code of Civil Procedure to grant relief with respect to Faisal Abad episode. The contention of the learned counsel for the defendant that notwithstanding the fact that the defendant has neither filed appeal nor cross-objection, he is entitled to recovery of the price of goods/stores offered for inspection but rejected by the consignee. In order to appreciate the contention, it will be appropriate to notice the relevant rules of Order 41 which read as follows:-- 0.41, R.22, C.P.C.
(1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the Court below, but take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal or within such further time as the Appellate Court may see fit to allow.
(2) Such cross-objection shall be in the form of a memorandum, and the provisionsof rule 1, so far as they relate to the form and contents of the memorandum of appeal, shall apply thereto.
(3) Unless the respondent files with the objection a written acknowledgment from the party who may be affected by such objection or his pleader of having received a copy thereof, the Appellate Court shall cause a copy to be served, as soon as may be after the filing of the objection, on such party or his pleader at the expense of the respondent.
(4) ---------
(5) -------- 0.41, R.33, C.P.C.
67. The Appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection: (Provided . That the Appellate Court shall not make any order under section 35-A, in pursuance of any objection on which the Court from whose decree the appeal is preferred has omitted or refused to make such order).
68. ' From a bare reference to Rules 22 and 33 of Order 41 C.P.C., it is clear that the respondent can support the decree of the Court below on points which have been decided against him but he cannot ordinarily attack the decree and ask for variation without filing cross-objection. Reference may be made to the rule laid down in Khairati and 4 others v. Aleem-ud-Din and another PLD 1973 SC 295. The following passage from this judgment is worth quoting:-- "The next contention of the learned counsel appearing in support of this review petition is that it is, in any event, the duty of the Court to consider the question of limitation. This is also correct to the extent it goes; but it does not mean that where a trial Court has given a finding on the question of limitation against a particular party, he can still, without filing an appeal or cross-objection challenge that finding in the higher Court of appeal."
35. The ratio emerging from the aforesaid examination of Order 41 Rules 22 and 33 of the Code of Civil Procedure is that the Appellate Court ordinarily does not vary the decree and judgment of subordinate Court unless and until the aggrieved party prefers appeal or cross-objection under Order 41 Rule 22 ibid. The Court under Order 41 Rule 33 has ample power to do the complete justice between the parties, when it comes to the conclusion that the judgment and decree of the first Court is arbitrary, perverse and has done substantial injustice apparent on the face of record.
69. 36.Applying these principles to the facts of the case, we have no doubt in our mind that the finding of the trial Court on Faisalabad episode is not open to any exception.
70. 37.In result of foreging discussion. RFA No,49 of 1987 is partly allowed, the suit of the plaintiff in view of the finding noted above is decreed with following reliefs:-- 1.Cost of goods supplied.Rs,7,78,038.40 2.Securities. Rs,4,49,488.00 3.Late delivery charges.Rs,4,48,037.67 4.Interest on Rs,16,75,564.07 at the rate of 14% per annum from the date of the institution of the suit till the date of decree of the trial Court, with further interest at the same rate on the aggregate sum so adjudged from the date of that decree to the date of payment.
71. 38.The revision petition bearing No, 2235 of 1986 is allowed and the impugned order passed by the Civil Judge, Ist Class is hereby set aside. In view of the divided success the parties are left to bear their own costs.
39. Before parting with this judgment , we note that by order, dated 16-12-1987 on an application for interim relief, this Court made the order in following terms:- "There has been a reasonable proposal put forward by the learned counsel for the respondent in terms that the amounts at serial Nos. 1 and 2 regarding cost of goods supplied and security for the purpose of performance of contract amounting to Rs,12,28,726.40 may be ordered to be paid to the respondent decree-Holden on his furnishing security by way of mortgage of valuable property to the satisfaction of the executing Court. The balance of the decretal amount may be invested by the executing Court with the Khas Deposit Certificate Scheme to yield good returns. The proposal is accepted and the appellants are directed to deposit the decretal amount within six weeks from today with the executing Court to be dealt with in the manner ordered above."
72. In case the plaintiff had received Rs, 12,28,726.40 and the remaining amount was invested in Khas Deposit Certificate Scheme, the plaintiff will be entitled to recover the remaining decreed amount from the amount invested in Khas Deposit Certificate Scheme. The plaintiff, respondent herein, will be entitled to proportionate costs of this appeal.