1. ' By this common order I intend to dispose of the abovesaid applications and Nazir's reports dated 5-10-1993 and 25-10-1993 as the parties in the two suits and the subject-matter as well as the facts and legal issues are almost same.
2. ' Briefly the facts are that the two suits have been filed by plaintiff No,2 Muhammad Iqbal in each suit and plaintiff No,1 who are the registered companies in each case. The case of the plaintiffs is that the defendant No,1 is the Chief Executive while the defendants Nos.2 and 3 are the Directors and shareholders of the plaintiff No,1 in each suit; and that the defendants agreed to transfer and sale all shares, interest, benefits in the plaintiff No,1 Company to plaintiff No,2 through the agreement executed on 23-12-1992. Under this agreement, the defendant No,1 agreed to sell the above two plaintiff No,1's Companies and a third company, namely, Messrs Unicorn Associates (Pvt.) Ltd. The total consideration for the three Companies was fixed at Rs,4,30,00,000 subject to clearance of mark-up amount and other demands up to 31st December, 1992 and the liabilities of all the three Companies were worked out and agreed upon as Rs,4,00,00,000 which plaintiff No,2 accepted and became responsible to pay any mark-up or charge payable after 1-1-1993 while the balance of Rs,30,00,000 was payable to defendants as full and final settlement of sale consideration. It is in the pleadings that the plaintiff No,2 paid a sum of Rs,15,00,000 to the defendants as disclosed in paras. 4 and 5 of the agreement while the remaining balance of Rs,15,00,000 was to be paid in January, 1993. In para. 4 of the plaint it is admitted by the plaintiffs that after execution of the agreement, the management was transferred to the plaintiffs alongwith some of the properties which were handed over to plaintiff No,2 and new Directors, namely, Muhammad Rafiq and Muhammad Arif and plaintiff No,2 himself were appointed to carry out the business. However, it is alleged that thereafter it was revealed that the defendants have not handed over the entire properties of the plaintiff No,1 companies and also certain recoverable dues were not endorsed to the plaintiff No,2. However, the main dispute is with regard to a Textile Division erected on plot of land bearing No,WH-10 Sector 16-B Industrial Area, North Karachi which according to the plaintiffs was purchased by defendant No,2 in his own name. However, the plaintiffs' claim that this purchase was Benami and in fact the price was paid from out of the funds of the three companies under sale to the plaintiffs and, therefore, the plaintiff No,2 is entitled to receive possession and other benefits arising out of this Textile Division (hereinafter referred to as the Textile Unit). In 'these circumstances the two suits have been filed by the plaintiffs. Suit No,625 of 1993 is for possession, recovery of Rs,2,02,66,882, injunction and mesne profits while the other suit is for declaration, damages, recovery of Rs,1,01,31,943, injunction and mesne profits. In both the suits the plaintiffs have moved applications for grant of injunction restraining the defendants from selling, encumbering or parting with possession or delivering the said property (Textile Unit) and records of the Companies as well as receiving profit out of Textile Unit. They have also made applications in both the suits for appointment of Receiver in respect of Textile Unit with all powers to receive the possession and rent from the tenants.
3. I have heard the learned counsel for the parties. The main emphasis of the learned counsel for the plaintiffs is that the said property i,e, the Textile Unit was purchased by the defendant No,2 from out of the funds of the three Companies under sale and, therefore, it was a Benami purchase and this property does form part of the sale agreement. It is also the case of the plaintiffs that defendant No,1 received a sum of Rs,33,94,527 for purchase of Yarn and, therefore, it should be presumed that it was for the Textile Unit and from this an inference can be drawn that the purchase of the Textile Unit in the name of defendant No,2 is a Benami purchase. The learned counsel for the plaintiffs has further submitted that according to sale agreement the defendants had undertaken to transfer the entire shares and interest in the said three Companies and any other interest arising out of the same to the plaintiff No,2.
3. ' As against this the learned counsel for the defendants has submitted that this property (Textile Unit) was purchased by defendant No,2 from out of his own funds and that there is nothing on the record to suggest that this is a Benami purchase from out of the funds of the plaintiffs' companies.
4. The learned counsel for the defendants has further submitted that the plaintiff No,2 was required to pay balance of 15,00,000 to the defendants in January, 1993 which has not been paid by them and, therefore, the plaintiffs are not entitled to any relief sought by them. In this case a Commissioner was also appointed to inspect the site and make his report. As per the report of the Commissioner/report of Nazir dated 25-10-1993 the ground floor, first floor and second floor of the Textile Unit are rented out to the tenants who are paying monthly rent to defendant No,2 while small portion of ground floor is lying vacant which is also in possession of defendant No,2.
4. I have perused the record and considered the above submissions of the learned counsel for the parties. From the pleadings and affidavits/counteraffidavits brought on record, it is clear that the whole dispute is with regard to the abovesaid Textile Unit. A perusal of the Sale Agreement in these two suits does not show if any reference has been made for sale Of this Textile Unit to plaintiff No,2 nor there is anything on the record to show that this Textile Unit forms part of any of the three Companies under sale. As regards Benami transaction, the burden would be on the party claiming the transaction to be a Benami one to show, at least prima fade, that the property was not purchased by the person in whose name it stands from his own source and also that the property involved is not for the benefit of the same person. In the instant case, as is clear from the report of the Nazir, it is the defendant No,2 who has been receiving the rent of the said Textile Unit and also it is defendant No,2 who is in occupation of the vacant portion. Thus it is clear that prima facie usufruct of the property is being enjoyed by defendant No,2. The learned counsel for the plaintiffs has made efforts to establish from the statement of accounts placed on record to show that inferences can be drawn that this Textile Unit was purchased from the funds of three Companies.
5. There is no direct entry in this respect in these statements of accounts. As regards the inference to be drawn I am afraid this is not the stage for it unless the same are proved through the substantive evidence. In these circumstances. I am of the view that the plaintiffs have not established a prima facie case of Benami transaction. It may further be observed that it is established law that in considering the injunction application the Court has to see that all the three ingredients must co- exist which are that the plaintiff should have a prima facie case in his favour, balance of convenience should also be in favour of the plaintiff and the plaintiff would be likely to suffer irreparable loss in case the injunction is not granted. As I have already held that plaintiffs have failed to establish a prima facie case he would not be entitled to grant of, therefore, injunction.
6. ' As regards appointment of receiver over the Textile Unit, it may be observed that a Receiver is to be appointed in case there is a peril to property or there is immense danger of waste of property. In the present case the Textile Unit is on rent to different tenants and the defendant No,2 has been receiving the rent. Defendant No,2 is also in possession of the vacant portion. There is nothing on the record to show if there is any peril to the property or the same is likely to be wasted. It is not mere convenience of the plaintiffs that a receiver should be appointed over the property in dispute but as observed earlier the plaintiff should show that there is a peril or threat of waste to the property. The plaintiffs have not been able to show the same. Accordingly the relief of appointment of Receiver cannot be granted.
7. ' Application (C.MA. No,10382/93) in Suit No,625 of 1993 has been moved with the prayer that the proceedings in the suit should be stayed forthwith and the matter be referred to arbitration in view of the provisions of Sale Agreement. The learned counsel for the defendants has submitted that this point is already subject-matter in J.M. No,78 of 1993 filed by the defendants. In these circumstances, I would dismiss this application with the observation that the same matter may be contested between the parties in J.M. No, 78 of 1993.
8. ' In view of the above discussion, all the applications are dismissed and the Nazir's reference/report are disposed of.
9. ' Above are the reasons for the short order announced in Court on 31st January, 1994.