1. This order is proposed to dispose of CMA Nos. 12140/93 and 212/94. The first application is filed by the plaintiff under Order XXXIX, Rules 1 and 2, C.P.C. For grant of injunction for restraining the defendants, their agents, officers and employees from appointing any other person as its sole or exclusive distributor or agent in Pakistan, in respect of defendants' plain paper copiers. The second application is filed by the defendants under Order XXXIX, Rule 4, C.P.C., for recalling the ad interim order of status quo passed on the above application of the plaintiff. '
2. The plaintiff has been carrying on business of imports, distribution, marketing and servicing of office products and equipments. Defendant No.1 is the exclusive authorised distributor for Pakistan territory, for the products of defendant No.2. Defendant No.2 is the manufacturer of U-Bix Plain Paper Copiers which are also known as Konica Plain Paper Copiers. Defendant No.1 is also authorised by defendant No.2 to grant exclusive sole agency rights for Pakistan in respect of the said copiers, including their parts and consumable supplies. Defendant No.1 under the said authority appointed the plaintiff as its sole agent for the entire territory of Pakistan, under the Sole Agency Agreement dated 1-6-1983. According to the plaintiff, this Agreement continues to subsist.
2. It is the case of the plaintiff that the above Agreement was valid for initial period of three years commencing from 1-6-1983 and after expiry of the said period, the agency was to renew automatically on year to year basis, unless terminated by either party by at least 30 days' prior written notice before the expiry of extended term, as envisaged in Article 13 of the said Agreement.
3. It is further stated that the agreement was lastly renewed, automatically, as stated above, for one year from 1-6-1993 up to 31-5-1994. It is alleged that defendants had issued certificate dated 30-7- 1987 to the Consulate-- General of Japan, Karachi, confirming the continuity of distributorship up to 30-12-1995. On 10-9-1993, the plaintiff received a notice from defendant No.1, wherein it was notified that under Article 11 of the Sole Agency Agreement, dated I-1-1975, the Agreement would not be further renewed on expiry of the term on 31-12-1993 and further that Sole Agency Agreement dated 1-1-1975 was to stand terminated with effect from the above date. According to the plaintiff as such Agreement was executed between the parties on 1-1-1975. The plaintiff by its letter dated 16-10-1993 asked for copy of the said Agreement., which was faxed. The said Agreement was between defendant No.1 and Imperial Typewriter Company which was terminated long ago.
4. The plaintiff then received letter dated 19-11-1993 wherein the termination of the agreement was reiterated.
5. As the plaintiff apprehended appointment of someone else as distributor for Pakistan during the subsistence of their Agreement with the plaintiff, it served notice dated 2-12-1993 on the defendants asserting that the Agreement dated 1-6-1983 continued to subsist and had not been validly terminated.
6. It is alleged that the plaintiff has made substantial capital investment to introduce and promote the defendants' products in Pakistan and claims to have invested a sum of Rs.83,950,000 in regard to introduction of Konica Products in Pakistan. The customers have purchased the copiers against the warranties issued by the plaintiff on behalf of the defendants which still subsist. It is alleged that a number of orders for purchase of the said copiers were booked by the plaintiff but it has not been allowed to import the same for sale in Pakistan, although the plaintiff had opened an L/C for the said purpose on 13-11-1993. The plaintiff has also disclosed several losses that may be suffered and on that account has preferred claim of Rs.202,284,739. The case of defendant No.1 is that though the plaintiff was appointed as distributor under the Agreement dated 1-6-1983 but it was terminated vide letters dated 10-9-1993 and 19-11-1993 in terms of Article 13 of the said Agreement and as such no agreement whatsoever subsists between the parties and the plaintiff is no longer a distributor of defendant No.1. It is further stated that defendant No.1 has appointed M/s. Office Automation Group of Lahore as Sole Distributor in Pakistan with effect from 1-1-1994. Except the notices sent by the plaintiff, rest of the allegations made by the plaintiff have been denied by the defendant. The plaintiffs have filed their objections and so also affidavit-in---rejoinder in which it has been stated that the defendants had appointed Mr. Tariq Saeed Butt of M/s. Office Automation Group of Lahore as special attorney as notified by them in daily `The News' of 9-1-1994 and the said advertisement does not disclose the appointment of the said group as sole distributor for defendants' products. The receipt of the notices of termination by the plaintiff in para. 3 of the affidavit-in-rejoinder has been admitted.
7. I have heard the learned counsel Mr. Iqbal L. Bawany for the plaintiff and Mr. Mujahid Selim for the defendants.
8. The learned counsel for the plaintiff mainly contended that the Agreement dated 1-6-1993, executed between the parties has not been terminated and as such the defendants cannot be permitted to appoint another distributor for their products. He has placed reliance on Article 13 of the said Agreement. With regard to allegation of the plaintiff that the defendants had appointed M/s. Office Automation Group of Lahore as their agent, the learned counsel placed reliance on advertisement published in Daily `The News' and contended that according to the aforesaid advertisement Mr. Tariq Saeed Butt of the said Group was appointed as attorney by the defendants but it does not notify that the said Group was appointed as Sole Distributor by the defendants. It was further urged by him that in case the injunction is not granted, the plaintiff will suffer irreparable losses and that the balance of convenience is in favour of grant of injunction. The learned advocate on the other side has controverted submission made on behalf of the plaintiff and has further contended that this Court has no territorial jurisdiction in the matter as the contract was made at, the defendants are residents of and carry on business in Japan, beyond the territorial limits of this Court. It was next urged that the suit is barred by law as Article 17 of the Agreement dated 1-6-1983 provides that if any dispute arises between the parties, it is to be referred to arbitration in Japan in accordance with the Commercial Arbitration Rules of the Japan Commercial Association and the suit can be maintained only after, the matter has been referred to and settled in the arbitration. On facts it was pleaded that the defendants have already terminated the agency agreement with the plaintiff and appointed M/s. Office Automation Group as their sole distributor for Pakistan with effect from 1-1-1994 before the order of status quo dated 5-1-1994 was passed. It was argued that the plaintiff will not suffer irreparable losses if the injunction is refused, as the plaintiff has already assessed his losses and filed the suit for compensation.
9. As the defendants have raised the issue relating to the jurisdiction of this Court, it ought to be dealt with first.
10. Section 120, C.P.C. Provides that sections 16, 17 and 20 of the Code shall not apply to High Court in the exercise of its original civil jurisdiction. The learned counsel for the defendants relying on West Pakistan Industrial Development Corporation v. Fateh Textile Mills Ltd. Reported in PLD 1964 Kar. 11, contended that the restrictions and limitations of sections 16, 17 and 20, C.P.C. Having been removed from the exercise of the original civil jurisdiction by the High Court, the said jurisdiction of the High Court is enlarged and it would have jurisdiction to entertain-the present suit.
11. It is settled law that in case the cause of action, even if partly, has accrued within the territorial limits of the Court, it would have the jurisdiction to entertain the suit. It is admitted position that the goods in terms of the contract were being supplied by the defendants to the plaintiff at Karachi.
12. The letters dated 10-9-1993 and 19-11-1993, whereby the sole agency agreement of the plaintiff has been terminated, were addressed and sent by defendant No.1 to the plaintiff at its Karachi address.
13. Thus cause of action partly arose at Karachi. Consequently this Court has jurisdiction to entertain the dispute.
14. The learned Advocate with reference to the second objection raised in respect of the maintainability of the suit, relied on Ganesh Das Bajaj v. Municipal Committee, Delhi AIR 1955 Punjab
112. The rule laid down in the said authority is not applicable in the present case. In the above reported case there were specific stipulations to the following effect:--- "And it is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this policy that the award by such arbitrator, arbitrators or umpire of the amount of the loss or damage, if disputed shall be first obtained:'
15. It was in view of the aforesaid specific stipulation that the Court referred to the accepted principle of law that it is open to the parties to a contract to agree in advance that no right of action shall arise thereon until the matter in controversy had been referred to and ascertained by an arbitrator appointed in accordance with the terms of the contract. The above authority is, therefore, distinguishable and the rule laid down therein is not attracted to the facts of this case.
16. It may, however, be pointed out that the defendants could have sought stay of the suit for referring the matter to the arbitration, but they did E not file application under section 34 of the Arbitration Act for stay of the proceedings of the suit and on the contrary have filed the written statement and submitted to the jurisdiction of this Court.
17. The learned counsel for the plaintiff contended that the agreement dated 1-6-1983, having not- been terminated, it continues to be operative. He referred to letter dated 10-9-1983, received from defendant No.1. In the said letter reference has been made to Article 11 of the Agreement executed on 1-1-1975, putting the plaintiff on notice that it will not renew the above agreement, the terms of which expired at the end of December, 1993 and that the said Agreement shall stand terminated on 31st December, 1993. The above letter was replied by the plaintiff by their communication dated 16-10-1993 which was responded by defendant No.1 by letter dated 19-11-1993, in which it is stated that the Imperial Typewriter Co. And Universal Business Equipment (Pvt.) Ltd. Were run by the same management and that the said two companies are de facto the game. It has been reiterated therein that the termination letter having been sent on 10-9-1993, business relations between defendant No.1 and Imperial Typewriter Co. Or the plaintiff-company would cease to exist on 31-12- 1993.
18. The copy of the Agreement dated 1-1-1975, filed by the plaintiff, shows that the said Agreement has been signed on behalf of Imperial Typewriter. Co. By Salahuddin Ahmed as its proprietor and the Agreement dated 1-6-1983 also has been signed by him as Managing Director of the plaintiff- company which is a private limited company. The letter dated 16-10-1993 also refers to embarcation upon the agency arrangement many years ago. The above reference can only be considered as allusion to Agreement of 1975 between the parties, as it has not been controverted that the management of the aforesaid two companies is the same. The plaintiff has also not disowned Imperial Typewriter Co. On the contrary in the aforesaid reply it is stated that distributory rights were granted to them on the basis of previous dealings through Imperial Typewriter Co. In the above background the reference to Agreement dated 1-1-1975, though erroneous, does not make the notice ineffective or inconsequential. It is not disputed that the Agreement dated 1-1-1983 is the only Agreement that existed between the parties, that, the termination notice is in accordance with clause 13 of the said Agreement. The mere reference to previous agreement, therefore, will not prima facie render the notice of termination invalid, when there is- solitary subsisting contract between the parties, and the language of the termination letter is in accordance with that agreement and no other contract existed between the parties.
19. As already pointed out above, the Agreement is initially for a period of three years and is renewed automatically on year-to-year basis, unless terminated. The contract between the parties is, therefore, revocable in nature.
20. The last three words do unambiguously vest the option of termination of the agreement at any time before the specified date and the said para. Taken as a whole, does not affect the right of revocation of the agency provided for in clause 13 of the Agreement. Under clause (d) of section 21 of the Specific p Relief Act (I of 1877), contract being revocable cannot be specifically enforced a and clause (f) of section 56 of the said Act provides that injunction cannot be granted to prevent the breach of a contract, the performance of which would not be specifically enforced. In view of the above, the injunction sought by the plaintiff is not warranted.
21. The plaintiff has filed the suit for recovery of damages allegedly suffered by it on several counts, including the losses and damages that would be suffered during the following two years en account of the alleged premature termination of contract which was allegedly to last till 30-12- 1995. The plaintiff having valued the losses in terms of money, it cannot be said that it would suffer irreparable loss.
22. The balance of convenience is also in favour of the defendants, who have already awarded sole distributary right of their products to a thirst party. It may, however, be observed that mere inconvenience, if caused to the plaintiff, is not enough to warrant grant of injunction.
23. Consequently C.MA. No.12140/93 is hereby dismissed, C.M.A. No.212/94 is granted and the ad interim order is hereby recalled. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.