1. ' By this order I propose to decide the following preliminary issues framed on 22-1-1991:--- "(i) Whether the suit against the defendants Nos.3 and 4 is barred by law of limitation?
(ii) Whether the suit against the defendant No,3 is barred by the provisions of section 11 of C.P.C.?
(iii) What the orders be?"
2. ' Briefly the facts relevant for the purpose of deciding the above issues are that under agreement dated 10-6-1980, defendant No,4 had agreed to purchase from the plaintiff a piece of land, bearing Survey No,14 (Old Survey No,16), Sheet CL-10, measuring 3,940 square yards for the total consideration of Rs,12,608 million. Out of the aforesaid amount a sum of Rs,10,244 million was paid by the plaintiff to the said defendant. Under the terms of the agreement, the plaintiff within a period of 180 days was to obtain at his own costs and expense "all the requisite consents, sanctions and permissions for the conversion of the said plot from the residential purposes to a plot for commercial purposes from Karachi Metropolitan Corporation, Karachi Development Authority, Government of Sindh and other Government, Municipal and local authorities". For the purpose of securing the rights of defendant No,4, the plaintiff furnished bank guarantee through defendant No,3 for repayment of the sale consideration partly paid to the plaintiff. The plaintiff also secured the rights of defendant No,3 by mortgaging his aforesaid property and also by furnishing guarantee of two of its directors. In the event that followed, the plaintiff failed to procure the conversion within the stipulated time and consequently defendant No,4 by its notice dated 8-12- 1980 called upon defendant No,3 to honour the guarantees and the payment against the guarantee was made on 3-1-1981.
3. ' Defendant No,3 by its letter dated 31-1-1981, called upon the plaintiff to reimburse the amount paid by it to defendant No,4. On the failure of the plaintiff, defendant No,3 filed Special Suit No,67 of 1981 against the plaintiff and his two guarantors before the Special Court of Sindh at Karachi, constituted under the Banking Companies (Recovery of Loans) Ordinance, XIX of 1979. The plaintiff and the two guarantors filed application under Order XXXVII, Rule 3, C.P.C. read with section 7 of the said Ordinance. The above application was dismissed and the suit was decreed by the Court on 12-11-1981 against the present plaintiff alone and was dismissed as against the two guarantors.
4. Appeal filed by the plaintiff is said to be pending.
5. ' On consideration of the averments in the plaint, it appears that complete calm and quiet prevailed between the plaintiff and defendants Nos.3 and 4. All stood tranquillized for more than seven years.
6. ' On 14-2-1990, the present suit was filed challenging the legality and propriety of encashment of the Bank Guarantee on numerous pleas, with the following prayers:--- "(1) A declaratory decree that the power of commercialization of plots or permitting the building of additional storeys in 1980 and even now vest in defendant No,2.
(2) A declaratory decree that in 1980 and thereafter the defendant No,1 did not enjoy the power to commercialize the building plots or permit construction of additional storeys.
(3) A declaratory decree that the commercialization permission given by the defendant No,2 was valid and legal.
(4) A declaratory decree that the defendant No,3, and No,4 acted illegally and unreasonably by acting on the premises that the permission given by the defendant No,2 was invalid and ultra vires.
(5) Decree for a sum of Rs,40 million as compensation and/or damages against all/any defendants for the loss suffered by the plaintiff.
(6) Costs of the suit."
7. ' Mr. Naimur Rahman, learned counsel for the defendant No,3 has contended that in so far as the prayers for declarations are concerned, Article 120 of the Schedule to the Limitation Act, 1908 will be applicable and in so far as the prayer for recovery of money is concerned, Article 83 will be applicable inasmuch as the plaintiff can be said to have been actually damnified on 3-1-1981, when the guarantee was encashed which gave rise to the claim raised by defendant No,3 against the plaintiff and his guarantors.
8. ' The plaint discloses all the material dates vis-a-vis the date when the agreement was executed, payment was made to the plaintiff, the guarantee was furnished and was encashed by defendant No,4 as have been mentioned above. Article 120 of the First Schedule to the Limitation Act, 1908, prescribes that suit for which no period of limitation is provided elsewhere in the said Schedule, it shall be filed within six years when the right to sue accrues to the plaintiff. There cannot be two opinion that it was on 3-1-1981 that the alleged cause of action accrued to the plaintiff with regard to the declarations that have been sought in this suit, when the bank guarantee was encashed on the plea that the plaintiff had failed to perform his part of the contract under the agreement by having failed to procure requisite conversion of the plot from residential to commercial within 180 days.
9. In so far as the prayer for recovery of amount is concerned, the learned counsel has relied on Article 83 which provides that the suit for indemnification is to be filed within a period of three years when the plaintiff is actually damnified under a contract to indemnify. But there is no contract of indemnification between the plaintiff and defendant No,3 or 4. If there is any such contract, it is between the latter two defendants, under which defendant B No,3 had to indemnify defendant No,4, in case of failure of the plaintiff in procuring conversion of the plot within the specified period.
10. The said defendants or any of them had not given any undertaking nor any was pointed out to reimburse the plaintiff for any loss that may be suffered by it due to the conduct of the said defendants or either of them. If any loss is suffered by the plaintiff or in other words if any right to sue for damages has accrued to the plaintiff, it is ex contract and as such Article 83 is not applicable. I find that I Article 115 is appropriately attracted in the circumstances of this case. The suit in fact is for recovery of compensation/damages for the loss suffered by the plaintiff, allegedly because of the breach of the contract of sale of property in contradistinction to contract of indemnity.
11. ' Under the said Article suit for compensation for the breach of any contract, express or implied, not in writing registered and not specially provided for in the Schedule, is to be filed within three years from the time when the contract is broken. The right to sue had accrued to the plaintiff on 3-1-1981, when defendant No,3 paid the amount to defendant No,4, which payment, according to the plaintiff, was in breach of the agreement. Thus the suit for compensation/damages ought to have been filed within six years from 3-1-1981. The suit having been filed on 14-2-1990, after expiry of three years, from the date when contract was broken, is barred by limitation.
12. ' With regard to second issue, it was contended by the learned Advocate for defendant No,3 that Special Suit No,67 of 1981 having been decreed, the same issues cannot be reagitated in this suit. It may be pointed out that the present suit is not between the same parties. It is further noted that the learned Judge of the Special Court has not decided the dispute that has been raised in the present suit. His observations in this regard are reproduced below:--- "Thus the liability of the plaintiffs arises only from the terms of guarantee which as already pointed out provide an unconditional guarantee of repayment, even without reference to the borrower and without any question. Similarly as already pointed out the defendant No,1 in his letter of indemnity/guarantee unconditionally authorised plaintiffs to make payment on demand. As already pointed this Court cannot go into question as to whether the defendant No,1 committed any default or not in absence of Citi Bank being made party to the suit. This Court, being Special Court of limited jurisdiction, cannot go into this question even if Citi Bank is a party. Admitted facts are that the plaintiffs did make payments to the Citi Bank in terms of guarantee and defendant No,1 did not return the advance to the Citi Bank or conveyed the plot by registered sale-deed to Citi Bank within the stipulated time."
13. ' Issue No,1 is accordingly answered in affirmative and issue No,2 in negative.
14. ' Consequently, the suit is dismissed being barred by time.