' This petition under section 151 of Code of Civil Procedure seek revision of order dated 8-11-1994 of the trial Court dismissing an applicatioi under Order 39, rules 1 and 2 and Code of Civil Procedure read with Second Schedule of section 41 of the Arbitration Act, 1940 for restraining tab respondents from taking any coercive measures against the petitioner for it recovery of the amount in dispute.
2. The necessary facts are that the petitioner was awarded the contra for construction of a Sewerage Pump Station by the respondents on terms a conditions set out in the agreement dated 14-6-1986. It appears that on the failure of the petitioner to complete the work the contract was cancelled by the respondent at the cost and risk of the petitioner and was allotted to Messrs Shahid & Company. The petitioner was called upon to pay the differential amount between the two contracts which came to Rs,46,83,989. On its failure to do so, the respondent threatened to recover the amount as arrears of land revenue whereupon the petitioner filed an application under sections 8 and 20 of the Arbitration Act for referring the dispute to the Arbitration pursuant to the arbitration agreement between the parties. Alongwith that petition an application for grant of interim relief was also made which was refused by the trial Court. Hence this petition.
3. Mr. Riaz Karim Qureshi, Advocate for the petitioner has argued that the question as to whether the petitioner was in breach of the contract, if so to what extent was yet to be determined and the respondent's threat to recover the disputed amount as damages was illegal and unlawful. Learned counsel has relied upon Messrs Jamia Industries Ltd. v. Messrs Pakistan Refmery Ltd., Karachi (PLD 1976 Karachi 644) to contend that in such circumstances the petitioner was clearly entitled to the temporary injunction prayed for. The other arguments raised by the learned counsel was that in any case the amount even if payable cannot be recovered as arrears of land revenue through Collector.
4. Learned counsel for the respondent has defended the reasoning which prevailed with the trial Court for rejecting the application for temporary injunction. It was urged by him that according to the terms of the agreement between the parties, on failure of the petitioner to complete the works, the contract was cancelled at the risk and cost of the petitioner and the works were awarded to another contractor and the petitioner was liable to pay difference between the value of two contracts which was Rs,46,83,989. According to the learned counsel there was no dispute between the parties and the petition for reference to the arbitration and application for temporary relief were both not maintainable.
5. Admittedly the relationship between the parties was contractual in nature. The question as to whether the petitioner was in breach of the contract is yet to be determined. Similarly the liability of the parties inter se is still in issue. The trial Court has itself come to the conclusion that these disputes were referable to arbitration in terms of the arbitration clause contained in the agreement between the parties. That being so in the absence of any determination by a competent forum a serious question arises as to whether the amount claimed by the respondent as damages was due and payable by the petitioner. In this view of the matter the petitioner had clearly a prima facie case in his favour. In Messrs Jamia Industries Ltd. v. Messrs Pakistan Refmery Ltd., Karachi (PLD 1976 Karachi 644) it was observed that where the dispute between the parties arises out of breach of contract and the liability of the parties was yet to be adjudicated upon by the Arbitrator, it was appropriate to direct maintenance of status quo.
6. There is another aspect of the matter. No doubt under section 36 of Punjab Development of Cities Act, 1976 the respondent has the power to recover certain amounts as arrears of land revenue but on the plain wording of the provision itself that power is hedged by two conditions; firstly that the amount must be "due" and secondly and more importantly the amount should be due under the Act. The word due has been the subject-matter of repeated judicial interpretation and it has been held that there is a distinction between the amount due and the amount demanded; and further that due means what has been found to be legally payable. The earliest case to which reference can be made is Abdul Latif v. The Government of West Pakistan and others (PLD 1962 SC 384) and some of the other cases on the subject are Province of West Pakistan v.
Muhammad Ayub Khuhro (PLD 1967 Karachi 673), Zakaria A. Bawany v. City Deputy Collector and others (PLD 1975 Karachi 1008) and Constructions Ltd., Karachi v. Executive Engineer Indus Bridge Division West Pakistan P.W.D., Thatha and others.
7. As already noted section 36 not only requires that the amount should be due but further that it should be due under the Act. Prima facie it cannot be said that an amount claimed as compensation for breach of contract is an amount due under the Act. On the other hand, these amounts can appropriately be said to be due under the contract and not the Act. A perusal of the various provisions of the Punjab Development of Cities Act, 1976 would show that section 36 has referencelo recovery of rates, fees and taxes imposed under Chapter VII of the Act. It is unfortunate that this aspect of the matter was completely ignored for consideration by the trial Court. It follows that the petitioner has a strong prima facie case. If coercive measures are taken to recover the amount the petitioner is liable to suffer irreparable loss. Balance of convenience also lies in favour of the petitioner. (See Mian Muhammad Latif v. Province of West Pakistan and others PLD 1970 SC 180).
' As a result of what has been stated above this petition is allowed and a temporary injunction restraining the respondents from recovering the amount in dispute through coercive measures pending the decision of the application under sections 8 and 20 of the Arbitration Act, 1940 is issued subject to the condition that the petitioner shall furnish security for the payment of the disputed amount to the respondent in the event of dismissal of aforesaid petition within 2 weeks from today to the satisfaction of the trial Court.
No order as to costs.