1. ' This suit has been filed by the plaintiff for declaration and recovery of Rs,2,00,000 from the defendants. The facts briefly are that the defendants organized an auction on 27-10-1985 for the sale of 600 bags of betel-nuts weighing about 33000 kg. The plaintiff was one of the participants in the said auction where its bid of Rs,7,90,000 was the highest and was accepted. As such in accordance with the terms of the auction the plaintiff deposited on the same day a sum of Rs, 2,00,000 being approximately 25% of its bid. The plaintiff has alleged that before the start of the auction samples of the betel-nuts which were in good condition and fit for human consumption were shown to the prospective bidders with the assurance that the contents of the said 600 bags were similar to the samples and it was on this understanding that the plaintiff made the bid.
2. However, after the deposit of Rs, 2,00,000 when plaintiff's representative checked the 600 bags it was found that the betel-nuts in these bags did not tally with the sample, were in bad condition and not fit for human consumption. The plaintiff took samples of the betel-nuts from the bags and got these tested in a laboratory which confirmed that these were not fit for human consumption.
3. The plaintiff informed the defendants of the situation and finally requested for the return of the deposit of Rs,2,00,000. On failure of the defendants to refund the amount the present suit was filed.
4. ' The defendants in their written statement have denied about any sample having been shown to the bidders or any assurance given. It is stated that the bidders were provided full opportunity to inspect the goods and they participated in the auction after they were satisfied. It is claimed that the auction was simply on "as is where is" basis. It is admitted that the plaintiff's bid for Rs,7,90,000 was the highest and was accepted and that the plaintiff deposited the sum of Rs,2,00,000 soon after the auction. According to the defendants the plaintiff under the rules, had to pay the balance of the bid money within four days of the acceptance of its bid, failing which the deposit was liable to forfeiture and therefore the plaintiff was not entitled to the reliefs claimed. The defendants further alleged that as from 10-11-1985 the custom duty on betel-nuts was reduced from 25% to 10% and it was thereafter that the plaintiff, who was a regular importer of these nuts, raised the dispute about the quality of the auctioned goods. It is claimed that betel-nuts were not only used for human consumption but also for industrial purposes.
5. ' The following issues were initially framed on the pleadings of the parties:-
(1) Whether before the start of auction samples were shown to the plaintiff and he was assured that the goods were in accordance with the sample. If so were the goods according to sample?
(2) Whether 600 bags of betel-nuts which the plaintiff had purchased in the auction were not fit for human consumption? If so, its effect.
(3) Whether the plaintiffs are entitled to recover Rs,2 lass?
(4) Relief.
6. ' Later, the following additional issues were added:--
(1) Whether the plaintiff purchased the subject goods in auction conducted by defendants on the basis of "as it is where it is".
(2) Whether the suit goods can only be used for human consumption or there is another use of it as well?
(3) Whether the suit is not maintainable?
7. ' Issues No,1 of both the original and additional issues are related and as such are being taken together. Mr. Abdul Sattar Pinger, learned counsel for the plaintiff, submitted that no notice for the auction in question was published in the newspapers and therefore the bidders were not aware of any specific term of the auction. He stated that the notice which was published in the daily newspapers "Jang" and "Dawn" on 30-8-1985 was just a general notice wherein, the item of betel- nuts was not even mentioned and this notice did not mention any term of the auction either. Photo copy of the said notice is Exh.6/4. He stated that the plaintiff as also other bidders participated in the said auction on verbal information and just before the auction they were shown samples of betel-nuts which were fit for human consumption. It was on the understanding that the goods to be auctioned would be in accordance with the samples that the plaintiff participated in the auction. In this regard he referred to para. 4 of the plaint as also to the examination-in-chief of plaintiffs witness Ibrahim (P.W.2) where he stated that "I was shown a sample from a bag by the defendant. The betel-nuts of that sample were fit for human consumption and were in good condition". It may be mentioned here that this witness was the attorney of the plaintiff having personally participated in the said auction and has signed and verified the plaint. This being so it is obvious that what he has stated in the plaint and in his deposition is from his personal knowledge.
8. In his cross-examination he has denied the suggestion that the auction was on "as is where is" basis.
9. ' As against this, Mr.Umar Qureshi, the learned counsel for the defendants, has submitted that the auction was held on "as is where is" basis and no assurance was given to the bidders with regard to the quality of the goods. He drew my attention to paras. 4 and 7 of the written statement where it was stated that the auction was held on the basis of "as it is where it is". He then referred to those parts of the depositions of the defendants' witnesses Aftab Azam and Muhammad Sulaiman, where they stated that the auction was on "as it is and where it is" basis. However, admittedly none of these witnesses was personally present at the place of auction. This being so, their evidence cannot be of much consideration about events that occurred at the place of the auction. On this point the contents of the written statement would also not be of any help for the written statement has been singed and verified by the abovementioned defendants' witness, Aftab Azam. Reference was also made by the learned counsel to the Registration of Auctioneers and Auction Procedure Rules, 1980, framed by the Central Board of Revenue, in support of his contention, but failed to point out any provision thereof providing for auction to be on "as is where is" basis. The position therefore is that while the assertion of the plaintiff that the auction was on the basis of sample of the betel- nuts shown to the bidders before the auction and not on "as is where is" basis is supported by the statement of a person who was present at the auction and had personal knowledge of the facts, the defendant's contention that the auction was on "as is where is" basis is based on mere hearsay which cannot be accepted in preference to the more authentic version of the plaintiff. I would therefore hold that before the start of the auction the plaintiff was shown samples of the betel-nuts which were in good condition fit for human consumption and if not by express words by implication the plaintiff was given the impression that goods to be sold would be in accordance with the sample for there could hardly be any other reason for showing the samples to the bidders. These issues are decided accordingly.
10. ' Next I will take up issue No,2 of the original as well as that of the additional issues for both these too are inter-related. In para. 6 of the plaint it has been alleged that the 600 bags of betel-nuts purchased by the plaintiff in the auction did not tally with the sample and further "the said goods were not fit for human consumption". This para. Has been generally denied in para. 6 of the written statement wherein after making various allegations against the plaintiff the defendants stated that "betel-nuts are not only used for human consumption but are also utilized for indutrial purpose".
11. Except for a general denial of para. 6 of the plaint there is no specific assertion in para. 6 of the written statement regarding the auctioned goods being fit for human consumption. On the contrary, the emphasis appears to be on the industrial use of the commodity in addition to its use for human consumption thereby implying that the defendants do not seriously dispute plaintiffs contention that these goods were not fit for human consumption. In this regard para. 7 of the plaint and that of the written statement will also be relevant. In para. 7 of the plaint the plaintiff claimed that, "thereafter the plaintiff drew the attention of the defendants that the goods which have been sold to him by auction were not fit for human consumption and they cannot sell by auction the said goods which were in contravention of Food Laws, particular section 6 of Pure Food Ordinance, 1960". In corresponding para. 7 of the written statement the defendants while generally denying para. 7 of the plaint stated that "the goods were sold through auction on the basis of "as it is where it is" and the plaintiff, after thorough inspection of the goods, participated in auction and gave bid which was accepted and the contract was performed by the plaintiff by making payment of 25% value of the purchased goods. In fact, the betel-nut was not auctioned to the consumers for human consumption. It was auctioned to the bidders who voluntarily, after inspection, purchased and it is for them to sell in market for human consumption as to utilise the same for industrial purpose". Here again not only that there is no positive assertion that the goods were fit for human consumption, but the expression that: "In fact the betal-nut was not auctioned to the conusmers for human consumption" when seen in the light of plaintiffs assertion that, the auctioned goods were not fit for human consumption, would imply an admission of the plaintiffs contention.
12. ' Mr. Pinger submitted that samples from the auctioned betal-nuts were twice tested in laboratory for determining as to whether these were fit for human consumption or not and on both these occasions these were found to be unfit for human consumption as is apparent from the two reports dated 21-11-1985 and 28-7-1988 being Exs.5/1 and 7/4 respectively. The first report relates to the samples taken out by the plaintiff from the auctioned goods soon after the auction and the second report relates to the samples drawn from these goods by the Nazir of this Court in the presence of the customs officer. Apart from these reports, on this point the defendants' witness Aftab Azam in his cross-examination stated that: " I see a certain noting of Appraiser, Aleem Qureshi (BPS-14) dated 3-11-1985 in which on a query from the Deputy Collector of Customs Incharge of the auction section, he reported that the consignment in question consisted of eatable items not fit for human consumption". Such admission in defendants' own files at about the time auction took place leaves little scope for doubt that the auctioned goods were not fit for human consumption.
13. ' Muhammad Sulaiman, the other witness of the defendants tried to cover up the above-referred damaging noting by stating in his affidavit in evidence that, the subordinate staff of customs, due to long storage and deteriorated condition of the consignment in bond had inadvertently mentioned the entire lot as unfit for human consumption without any valid basis. This was also done to place on record the justification for fixation of the reserve price on lower side as some part of the consignment was unfit for human consumption". However, in his cross-examination he admitted that, I may not be able to say whether the goods auctioned namely betel-nuts were or were not fit for human consumption", and again that: "In this case, a report, following upon the inspection, was prepared but I do not recollect the name of the officer who prepared the same. In such report, it was mentioned that the goods were not fit for human consumption" and further that: "It is correct that in the instant case, the auction was made in spite of the fact that the report of unfitness was there". With this evidence the conclusion that the auctioned 600 bags of betal-nuts were not fit for human consumption is inescapable. The first part of issue No,2 is therefore answered in the affirmative. As to the second part of this issue, with regard to the effect of the auctioned goods being unfit for human consumption, I will take it up with issue No,3.
14. ' Additional issue No,2 that, "Whether the suit goods can only be used for human consumption or there is another use of it as well," arises out of the defendants' plea in the written statement that "Betel-nuts are not only for human consumption but are also utilised for industrial purpose". The burden to prove that betel-nuts could be used for purposes other than human consumption was on the defendants. In the written statement although they stated that betel-nuts were used for industrial purpose, they did not give any detail of the industry in which these were used. In his cross-examination plaintiffs witness Ibrahim denied the suggestion that "the betel-nuts which are unfit for human consumption can be used for industrial purposes". After this denial it became all the more necessary for the defendants to establish their contention at least by giving particulars of the industrial uses of the betel-nuts but except for the vague statement that betel-nuts were used for industrial purposes nothing specific was stated.
15. ' In so far as defendants' witnesses are concerned, they have not even mentioned in their deposition that there was industrial use for the betel-nuts. On the contrary, at one place in his cross-examination defendants' witness Aftab Azam, has stated that, "In principle it is correct that a commodity which is meant of human consumption may not be sold by the authorities which in its entirety has not been verified beforehand to be fit for such consumption. However, in, this case such verification had taken place and the goods were sold on "as it is where it is" basis. This statement would imply that the goods in question were meant for human consumption only.
16. Notwithstanding this position the learned counsel for the defendants vehemently argued that apart from human consumption the betel-nuts could be used for industrial purposes. In support of his contention he referred to Exs. 7/2 and 7/3. In Exh. 7/2 which is a copy of plaint in a suit filed by the plaintiff herein in the Court of a Civil Judge, reference was made to para. 2 which reads:- "That the goods imported were in damaged and deteriorated condition which may only be utilised for industrial purposes."
17. ' The goods referred to in the above para. Were betel-nuts. It was contended that aforementioned statement was a clear admission on the part of plaintiff that there was also an industrial use of the betel-nuts unconnected with human consumption. I am unable to agree with this. All that the statement suggests in that in view of the damaged and deteriorated condition of the betel-nuts these could be used only for industrial purposes. Such industries may as well be those involved in preparation of eatable items for human consumption, such as, the commonly known `saunf supari," "sweetened supari", etc. Marketed under different brand names. There is also nothing to suggest that the betel-nuts referred to in the said statement had become unfit for human consumption. All it says is that it was "in damaged and deteriorated condition". In spite of being in damaged and deteriorated condition these could still be fit for human consumption if the damage or deteriorations was slight or partial. Ex. 7/3 is the consent order passed by the Additional District Judge, Karachi in Appeal No,55 of 1983 in which the Government of Pakistan and the Collector of Customs were the appellants while the plaintiff herein was the respondent. In this order (Exh. 7/3) reliance was placed on the following passage:-- "Consequently, I order that the appellant shall release such quantity of betel-nuts as is fit for human consumption on payment of duty. In regard to the rest of the betel-nuts the appellant shall deliver the betel-nuts to the respondents on furnishing of Bank guarantee to the extent of customs duty, sales-tax etc. Payable and on furishing such Bank guarantee the respondent shall be allowed to take betel-nuts for separating the good ones from the bad in bonded customs warehouse. Such separation of good betel-nuts and the bad ones shall be carried out in the immediate presence of a customs official."
18. ' It was argued that the above would show that the plaintiff used to take delivery of good betel-nuts which were fit for human consumption on payment of the normal duty and the bad ones too which were not fit for human consumption on furnishing Bank guarantee and later on payment of reduced customs duty. This is not spelt out from the said order. Betel nuts delivered against Bank guarantee were for purposes of separating the goods one from the bad ones. There is nothing in this exhibit to show that after the bad betel-nuts had been separated from th6 good ones the former had been taken by the plaintiff on reduced customs duty. In these circumstances in my view, the defendants have failed to prove that there was any other use of betel-nuts except its use for human consumption. The issue is answered accordingly.
19. ' Before taking up issue No, 3 of the original issues I propose to deal with issue No,3 of the additional issues with regard to the maintainability of the suit for it was conceded by the defendants' counsel that though suit was maintainable in so far as the relief for the refund/return of the deposited amount of Rs, 2,00,000 was concerned, the reliefs for declaration and injunction were not maintianable under sections 42 and 54/56 of the Specific Relief Act. Reliance was placed on the case of Alavi Sons Ltd. v. The Government of East Pakistan and others (PLD 1968 Kar. 222). The contention is not without force. However, that would not be of much consequence, for the relief material for purposes of the suit is the one relating to the refund of Rs,2,00,000 paid by the plaintiff and that relief is admittedly maitainable. The reliefs with regard to the declaration and permanent injunction are redundant in the circumstances of the suit and seem to have been incorporated in the prayer clause more with the intention to highlight the illegalities of the defendants and as grounds for the refund of the deposit than as separate reliefs.
20. ' This brings me to issues Nos.3 and 4 of the original issues which may be dealt together along with second part of issue No,2. It was contended by the learned counsel for the plaintiff that the amount of Rs, 2 lacs was paid by the plaintiff on the understanding that the goods in question were fit for human consumption but as that was not so the plaintiff was entitled to the refund of the said amount. It was argued that the amount was returnable by virtue of section 65 of the Contract Act as the very sale of the goods by the defendants through auction was illegal being contrary to the provisions of section 5 of the Pure Food Ordinance, 1960 (hereafter referred to as the Ordinance) and opposed to public policy under section 23 of the Contract Act.
21. ' With reference to the Pure Food Ordinance it was submitted that section 5 of the Ordinance prohibited the sale of food which was "unsound, unwholesome, injurious to health or unfit for human consumption", and therefore the instant case was fully covered by the said prohibition.
22. Section 5 reads as under:-- ' Section 5.---Prohibition of sale, preparation. Manufacture, import or export of unwholesome food intended for human consumption. No person shall, directly or in direcly, himself or by any other person--
(a) prepare, manufacture, keep or store for sale, sell or, offer to sell any food which is unsound, unwholesome, injurious to health or unfit for human consumption, or
(b) import or export any food in such manner or in such condition as renders it or is likely to render it injurious to health."
23. ' The prohibition provided under section 5 relates only to the items of 'food' and therefore before applying its provision it will have to be seen if the 'betel-nuts' can be said to be an item of 'food' for purposes of that section. The term 'food' has been defined under section B(9) of the Ordinance as under:- "(9) 'food' means any article used as food or drink for human consumption other than drugs, and includes--
(i) any substance which is intended for use in the composition or preparation of food,
(ii) any flavouring matter or condiment,
(iii) any colouring matter intended for use in food,
(iv) chewing gum and other products of the like nature; and
(v) water in any form, including ice, intended for human consumption or for use in the composition or preparation of food."
24. ' The above definition, as is abvious, while retaining, in relation to `human being', the ordinary meaning of the word 'food', enlarges its scope, to include certain other items which otherwise would not be covered in its ordinary meaning. Betel-nuts having not been mentioned in any of the above sub-clauses (i) to (v) it will have to be seen if these will be covered by the ordinary meaning of the word 'food', for, then alone the prohibition contained in section 5 would apply. The ordinary dictionary meaning of 'food' is, "what one feeds on; that which, being digested, nourishes the body; whatever sustains or promotes growth; what one takes into the system to maintian life and growth". It is therefore apparent that in its ordinary meaning the word will not include every eatable item. When used with reference to human beings, it would seem to refer only to such items as are taken for nourishment, sustenance or growth of human body or maintenance of life. Betel-nuts have none of the properties which will make these fall in the category of food. These neither nourish the body nor sustain or promote growth nor maintain life.
25. ' Some people may be taking these as a matter of habit while others just casually but a none as an item of food in the sense described above. As such in my view, the provisions of section 5 of the said Ordinance would not apply to the instant case.
26. ' As to section 23 of the Contract Act, I am inclined to agree with the plaintiff's counsel that the case would attract its application. The section provides:
23. "The consideration or object of an agreement is lawful, unless.---it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or impels injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.
27. ' In each of these cases, the consideration or object of an agreement is said to be unlawful.
28. ' Every agreement of which the object or consideration is unlawful is void."
29. Having regard to the fact that the only use of betel-nuts, established in the case, is that for human consumption, the sale of such betel-nuts, as may be unfit for human consumption, by a Government department would neither be proper nor desirable for that would be putting public health in jeopardy by encouraging the nefarious trade of selling for human consumption, substandard articles, prepared from rotten betel-nuts. This would undoubtedly be opposed to public policy. This being so the alleged agreement to purchase the disputed goods would be void for being opposed to public policy and consequently under section 65 of the Contract Act the plaintiff will be entitled to the refund of the said amount of Rs, 2,00,000 deposited by the plaintiff.
30. These issues are answered accordingly.
31. ' In view of the above discussion and my findings on the various issues I hold that the plaintiff is entitled to the refund of Rs, 2,00,000 paid by it to defendants in pursuance of the said auction sale.
32. Accordingly I decree the suit against the defendants in the sum of Rs, 2,00,000 with costs.
33. ' The decree to be satisfied within a period of four months from the date hereof.