1. ' This suit has been filed inter alia for recovery of Rs,200,000 as compensation for the loss sustained due to requisitioning of 'Noise Analysing Equipment' known as 'Vibration and Sound Testing Machine' hereinafter referred to as 'the said Equipment' by the plaintiff against the defendants or in the alternative against defendant No,2 who had actually purchased the said Equipment from the plaintiffs.
2. ' The brief facts, as per the plaint in the suit, are that the present plaintiffs, who are successors-in- interest of late Muhammad Omar Baig, who had originally filed this suit, had purchased the said Equipment in a Grand Auction held by Customs authorities on 2-8-1975 at Karachi Airport. The said Muhammad Omar deposited 25% of the final bid amount on the fall of the hammer and the remaining 75% was paid to the Customs Authorities on 12-8-1975 after the approval of the said sale by the Collector of Customs and delivery of the said Equipment to him. The said Muhammad Omar, after the purchase of the said Equipment ascertained the current price of the same and also its working from its manufacturer M/s. Bruel and Kjer, Linde Alleir of Denmark vide letter dated 4-9- 1975. The said letter was replied by the said company vide their letter dated 5-5-1976 giving the current price of the said Equipment through their representative in Karachi Mushko & Company.
3. After ascertaining full facts and working of the said Equipment, the said Muhammad Omar advertised for the sale of the said Equipment through English daily the 'Dawn' on 14-9-1975 and a copy of the same was sent to Navy, Army and the Government Departments, namely, Director, Hydrography, Deputy Chief of Naval Staff (Supplies), Pakistan Navy, Islamabad, Director, Naval Works Equipment, Islamabad, Naval Headquarters, Islamabad, Director, Suparco, Karachi under his letter dated 25-9-1975. In response to this advertisement, Suparco came forward to purchase the same and after some bargaining, the said Equipment was sold to Suparco for Rs,200,000 and it was also delivered to Suparco. The said Muhammad Omar submitted his bill for Rs,200,000 to Suparco for payment. The delivery of the said Equipment was also acknowledged by SUPARCO vide their letter dated 8-12-1975. After delivery of the said Equipment, the payment of the bill of Rs,200,000 remained pending in spite of several reminders. Meanwhile, a letter dated 19-3-1976 was received by the said Muhammad Omar from Commodore Logistics, Pakistan Navy, Karachi, requisitioning the said Equipment stating that the said Equipment was imported by the Pakistan Navy and was erroneously auctioned by the Customs authorities. A copy of this letter was also sent to Suparco and subsequently the said Equipment was taken away by the Pakistan Navy from the custody of Suparco. The said Equipment was/is not a secret equipment as is claimed by the Pak.
4. Navy, and was available in the open market. As is evident from the letter issued by its manufacturer through their local representative Mushko & Company, Karachi. However, after requisitioning the said Equipment, the Naval authorities should have made payment of the price of the said Equipment which was settled with Suparco but nothing was paid neither by Suparco nor by the Pakistan Navy. The said Muhammad Omar also wrote to Judge Advocate-General for the payment vide his letter dated 8-4-1976 and also served a legal notice through his Advocate which was acknowledged by. Pakistan Navy but no reply was received. That the requisitioning order made under Rule 121, of the Defence of Pakistan Rules, 1971 is without jurisdiction and nullity in law as it is not passed by a competent Authority and is illegal, ultra sires, unoperative and unwarranted by law, hence this suit.
5. ' Summons were issued and defendants Nos.1 and 2 filed their written statements. The defendant No,1 in its written statement confirmed that the said Equipment was imported by it and that the same was erroneously auctioned by the Customs Authorities and further submitted that they made payment of Rs,5,000 to the plaintiff to which he made no protest or any further claim and, as such, it was considered that the same was purchased as per Defence of Pakistan Rules, after paying compensation.
6. ' The defendant No,2 in its written statement while admitting that the said Equipment was sent to them for evaluation and testing, denied the allegation that it was purchased by them. They further denied that any interest was shown in regard to the purchase of the said Equipment and that the bill for Rs,200,000 submitted by the said Muhammad Omar, was just a quotation.
7. ' On the basis of the pleadings of the parties, the following issues were adopted:
(1) Whether after completing the formalities in respect of the disputed equipment, which was unclaimed, the Customs Authorities, in a grand public auction held on 2-8-1975 at the Airport auctioned and sold the said equipment, known as Noise Analysing Equipment' to the plaintiff for a price of Rs,5,000?
(2) Whether the plaintiff Buyer was a bona fide purchaser for value of the said equipment from the Customs Seller in the auction?
(3) Whether after ascertaining the cost-price of the said equipment from its purchaser/manufacturers M/s. Bruel & Kjer in Denmark, the plaintiff advertised it for sale to the General Public in the Daily Dawn dated 14-9-1975, as also by a separate Circular letter asked the various Government Departments including the defendant No,2 (Suparco), the Army and the Pakistan Navy, whethei they were interested in it?
(4) Whether in response to the advertisement and the Circular letter, the defendant No,2 (Suparco) after bargaining, purchased the said equipment from the plaintiff for a sum of Rs,200,000 and took delivery of the same from the plaintiff on 8-12-1975?
(5) Whether after the completed contract in respect of the equipment and receiving the plaintiff's bill for Rs,200,000 the defendant No,2 (Suparco) delayed payment of the sale price until it was requisitioned and taken by the Pakistan Navy under Rule 21 of the Defence of Pakistan Rules, 1971?
(6) Whether according to the manufacturers, the equipment in dispute was not a secret equipment and was saleable in open market the world over?
(7) Whether after a completed contract of the sale of goods in question by Public Auction, the Customs authorities had no right or claim over the said goods (the equipment) much less a right to cancel the auction?
(8) Whether the plaintiff is entitled to a decree for Rs,200,000 against the Buyer i,e, the defendant No,2 with interest at 10% per annum?
(9) To what relief is the plaintiff entitled to?"
8. ' The plaintiff examined Asghar Ali who is one of the plaintiff/L.Rs, and attorney of the plaintiff No,1.
9. The defendant No,1 examined Lt.-Commander Khalid Zulfiqar posted at Naval Store Depot Dockyard, Karachi. Defendant No,2 examined its Director Mehmood Ali Khan and Mehmoodur Rehman, Law Officer Customs, Karachi.
10. ' I have heard Mr. Abrar Hasan, learned counsel appearing for the plaintiffs and Mr. Ali Murtaza Hussain, learned counsel appearing for the defendants, and have also gone through the entire record and the evidence adduced. Mr. Ali Murtaza was absent on 23-8-1995 when the arguments were concluded. However, he was allowed to file written arguments on behalf of the defendant.
11. Issues Nos.1, 2 and 3.---I will deal with these issues together.
12. ' Asghar Ali in his deposition (Exh.7) confirmed the contents of the plaint. According to him he used to assist his father in his business. He further averred that in pursuance to the advertisement dated 19-6-1975 issued by the Customs Authorities his father participated in the auction held on 2-8-1975 at Karachi Airport and purchased the said "Noise Analyzing Equipment" after paying 25 per cent. Of the price at the fall of the hammer and 75% at the time of final approval and delivery. He further averred that the equipment was purchased to be sold on profit. It was repaired by qualified engineer and to ascertain the price a letter was written to the Manufacturer M/s. Bruel & Kjer Lindeallier of Denmark (Exh.7/2). The said manufacturer replied to their letter and also referred to their agents in Pakistan i,e, Mushko & Co. Ltd., Karachi.
13. ' Meanwhile his father had already advertised for the sale of the said equipment in Daily 'Dawn' dated on 14-9-1975. Letters were also dispatched to many Government Departments including defendants Nos.1 and 2 (Exh.7/6). During this time they received the pro forma invoice showing the price of the equipment (Exh.7/4). Suparco showed interest for the purchase of the same and the equipment was handed over to them and the bill for Rs,200,000 was sent as the purchase price.
14. The bill was never paid. Then a letter, dated 19-3-1976 was received from Navy and the letter dated 29-3-1976 from Suparco to the effect that the equipment has been requisitioned by the Navy. The bill of Rs,200,000 was sent to the Navy also but it was never paid and the suit was filed for the recovery of Rs,200,000 with 10% per annum interest and the costs of the suit. This witness was not cross-examined by the defendants.
15. ' The defendants Nos.1 and 3 examined Lt.-Commander Khalid Zulfiqar who confirmed in general the contents of the written statement. In cross-examination he averred that no date for the supply of the goods (equipment) was stipulated in the contract. On enquiry in respect of the said equipment they were informed that the equipment was already air lifted as such they started investigating and found that the equipment was sold by the Customs Authorities. However, he admitted that, from June, 1973 up to August, 1975 they did not contact the Customs Authorities to ascertain the position of the goods as they were not aware that goods had arrived at Karachi. He admitted that the said equipment was still in use of the Pak. Navy. He further admitted that the said equipment was requisitioned by the Pak. Navy under the Defence of Pakistan Rules and averred that Exh.7/14 was sent by Commander Logistic to the plaintiff to the effect that the matter has been referred to Judge Advocate-General Naval Headquarters, Karachi and any future correspondence should be addressed to him. He admitted that at the relevant time the price of the equipment in Pakistani currency was Rs,200,000 approximately.
16. ' Mehmoodur Rehman the Law Officer Customs was examined by the defendants (Exh.10). He confirmed that in 1975 the Customs Department Air Freight Unit Airport had disposed of the subject equipment through auction.
17. ' The deposition of the Law Officer Customs confirms that the subject equipment was unclaimed and as such was sold to the plaintiff Muhammad Umar in a grand auction held on 2-8-1975 at the Airport by the Customs Authorities. The defendant No,1 raised the plea in the written statement that due to wrong description of the equipment in the auction notice as "items of personal effects and electric instruments" the plaintiff purchased it. But nothing has been said in evidence or during arguments. On my querry Mr. Abrar Hasan stated that the boxes containing the equipment were open and shown to the bidders at the time of auction.
18. ' Be that as it may, the defendant could not explain as to why they neglected to trace the goods for so long i,e, from 1973 when order was placed and subsequently air lifted till 1976 when it was requisitioned. The sale notice published in Dawn was also sent by the plaintiff to various agents including Navy which (Exh.7/7) did give details of the equipment and the name of the manufacturer but even then Pakistan Navy did not wake up. Under the circumstances it can be said that an offer was made by the Customs Authorities which was accepted by the plaintiff for a consideration whereof the contract was completed. The receipt of Exh.7/4 was not denied.
19. ' In the circumstances, I answer the Issues Nos.1, 2 and 3 in affirmative. Issues Nos.4 and 5: ' The plaintiff very clearly stated in his deposition that after advertisement of sale for the equipment in Dawn and the letter Exh.7/6 the defendant No,2 indicated their interest and as such the equipment was delivered to them by the plaintiff and after negotiation the defendant No,2 agreed to purchase the same for Rs,200,000 for which the bill was forwarded. The delivery of the equipment was acknowledged by defendant No,2 on 8-12-1975. This witness was not cross- examined and his deposition remained un rebutted. Lt. Commander Khalid Zulfiqar admitted that the equipment was requisitioned by Pakistan Navy and the delivery was taken from defendant No,2. Mel1mood Ali Khan, the Director of Suparco also admitted that the equipment was brought for inspection and evaluation and on requisition by Pakistan Navy was handed over to them. However, he denied the purchase of the same by defendant No,2.
20. The deposition, documents and the behaviour of the witnesses show a definite interest of defendant No,2 in the equipment but of course interest without the presence of other essential ingredients of a contract does not create a sale as final. There is no evidence, written or verbal, to prove that the price of Rs,200,000 was finally accepted by the defendant No,2. The offer of sale exists but the acceptance and consideration are missing. Further, admittedly the equipment was delivered on 8-12-1975 and the bill was submitted on 30-3-1976 while the requisitioning letter was dated 19-3-1976 and the delivery of the instrument was given immediately thereafter. As such the question of delay in payment of sale price did not arise.
21. ' In view of the above, the answer to Issues Nos.4 and 5 is in the negative.
22. Issue No,6: ' The querry made by the plaintiff from the manufacturers of the equipment (Exh.7/2) and the reply from them and their agent in Karachi (Exhs.7/3 and 7/4 respectively) and the pro forma invoice (Exh.7/4/1) giving the prevailing market price of the equipment shows that the manufacturers were ready and willing to supply the said equipment and as such the answer to this issue is in the affirmative.
23. Issue No,7: ' The Law Officer Customs, Mehmoodur Rehman, stated in his examination-in-chief that after coming to know about the equipment in the custody of Suparco, the Pakistan Navy wrote a letter to C.B.R. And on the basis of the information contained in the said letter, the C.B.R. Wrote to the Customs Authorities to cancel the auction of the equipment. After the said cancellation, the plaintiff was duly informed by the Collector of Customs and offered the refund of Rs,5,000 which was paid by the plaintiff for the purchase of the said equipment. However Asghar Ali showed his ignorance if the amount was refunded to the plaintiff or not. None of the parties have disputed the powers of the C.B.R. For cancellation of the auction but since the equipment was already requisitioned by the Pakistan Navy under Rule 121 of the Defense of Pakistan Rules, the question whether the C.B.R. Was empowered to cancel the said auction or not, did not arise. The plaintiffs have challenged the order dated 19-3-1976 requisitioning the said equipment as illegal, ultra vires, inoperative and unwarranted by law and not having been passed by a competent Authority and prays for decree of Rs,200,000 against the defendants.
24. Issues Nos.8 and 9: Issue No,8 is whether the plaintiff is entitled to a decree for Rs,200,000 against the defendant No,2 with interest at 10 per cent. Per annum. As I have already discussed hereinabove, that the plaintiff did submit a bill for Rs,200,000 to the defendant No,2 but since the same was not accepted and acted upon the said contract was never completed. Further, that before the said bill was submitted to the defendant No,2, the defendant No,1 had passed an order, dated 19-3-1976 requisitioning the said equipment under Rule 121 of the Defence of Pakistan Rules, 1971. Now the question arises that what are the rights and liabilities of the parties if any goods are requisitioned by the Government under the said Rules.
25. "121. Requisitioning of property. ---(1) If in the opinion of the Central Government it is necessary or expedient so to do for ensuring the security, the public safety or interest, or the defence of Pakistan, or for securing the maintenance of public order or the efficient conduct of military operations or prosecution of war, or for maintaining supplies and services essential to the life of the community, it may by order in writing requisition any property, movable or immovable, and may make such further orders as appear to it to be necessary or expedient in connection with the requisitioning: ' Provided that no property used for the purpose of religious worship and no such property as is referred to in rule 111 or rule 117 shall be requisitioned under this rule.
(2) not relevant ............................
(3) not relevant ............................
(4) Whenever in pursuance of sub-rule (2) the Central Government requisitions or acquires any movable property, the owner thereof shall be paid such compensation as the Central Government may determine:"
26. The above sub-rule (4) of Rule 121 clearly provides that the owner of such goods whose property has been requisitioned will be compensated as the Central Government may determine.
27. ' Under sub-rule (7) of Rule 121, the powers of the Central Government could be exercised by the following persons: "(7) The powers conferred on the Central Government by sub-rules (1), (2), (4) (5) and (6) shall, subject to any general or special order of the Central Government be exercisable also by---
(a) The Commander-in-Chief of the Pakistan Army the Pakistan Navy, or the Pakistan Air Force;
(b) The Formation Commander;
(c) The Director General, Defence Procurement, and
(d) The Chairman, Pakistan Ordnance Factories Board."
28. ' As far as the Authority to determine such compensation is concerned has been provided under These rules. Now the question arises if the Central Government or any person inherent with such power had determined a compensation for the goods so requisitioned and the same was paid to and accepted by the plaintiffs. The plaintiff in his evidence which went un-rebutted stated that they had submitted bill of Rs,200,000 to the Pakistan Navy and had sent reminders but they were informed by a legal notice (Exh.7/14) that their matter was referred to the Judge Advocate-General, Naval Headquarters, Karachi and as such they should contact him in this respect. He has in unequivocal terms denied any payment and has claimed Rs,200,000 with ten per cent interest as compensation/price of the said equipment. Lt.-Commander Khalid Zulfiqar in his deposition stated that the plaintiff was offered an amount of Rs,5,000 as compensation for the goods in question and a cross-cheque of that amount was sent to the plaintiff, which was duly received and acknowledged by him. He admitted that the value of the consignment in question at the relevant time in Pakistan currency was Rs,200,000 approximately. Mehmoodur Rehman, the witness examined by the defendant No,2 showed his ignorance in regard to the refund of the amount the plaintiff paid to the Customs. While arguments were going, on I had inquired from the officer representing the Pakistan Navy if the cheque paid to the plaintiff was en cashed. He took out the said cheque from his papers and stated that "this was the cheque" which was sent to the plaintiff.
29. This shows that the cheque, which was sent to the plaintiff Muhammad Umar was returned by him which amounts to non-acceptance of the compensation by the plaintiff. The defendant No, 2 took no pains as to contact the plaintiff and settle the compensation in regard to the equipment. The entire evidence shows that the equipment could be made available by the manufacturers through their agent Mushko & Company Limited, Karachi and the price prevailing at the time has been given in their invoice dated 5-5-1976 is Rs,120,140. Admittedly the plaintiff being a businessman participated in the Custom's auction with the sole motive to purchase goods from the said auction and after proper examination and if any repairs needed after doing so he will sell the goods with profit.
30. ' It is very obvious that the Suparco showed interest in the said equipment but due to requisitioning, they changed their stand. The Navy, though sent compensation of Rs,5,000 but after the same having been returned by the plaintiff never bothered to settle the compensation.
31. In view of the, efforts that the plaintiff made from the date of participation in the auction till the instrument was requisitioned and to ensure his right to compensation of filing the present suit, he is awarded a decree of Rs,120,000 along with six per cent interest from the date of filing of the suit till payment, however, there will be no order as to costs.