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1999 MLD 2735

KARACHI ELECTRIC SUPPLY CORPORATION LTD. vs Messrs KAMPALA MOTORS

Citation1999 MLD 2735
CourtSindh High Court
Case No.Civil Suit No,257 of 1996
Date1998-02-12
Judge(s)Sabihuddin Ahmed
ResultSuit decreed

' This is a suit for recovery of Rs,7,104,000. The facts are simple. The plaintiff which is a Government owned Corporation invited tenders for supply of 13 units of Mazda Chasis with driver cabins and other goods vide advertisement appearing in the press on 30-4-1993. Apparently, the defendant offered to supply these goods vide their quotation, dated 24-5-1993 and the plaintiff through their Purchase Department vide letter, dated 12-6-1993 placed on order for supply of the said vehicles at the rate of Rs,3,53,000 per unit. The total price was calculated to be Rs,4,589,000. The terms of the contract may be reproduced as under:-- "NOTE

(1) The above price is firm, final and inclusive of all Government Taxes, Duties etc. And no escalation in the price will be allowed.

(2) You will give one free service after six hundred miles run. You will make good by repair or replacement of defective parts if any for the above vehicles which are under proper use appear within a period of 180 days or four thousand miles run whichever occurs first after the vehicles have been put in service solely from faulty design material and workmanship.

(3) Supply is subject to inspection and approval of our Controller of Transport or his authorised representative.

(4) PAYMENT: Payment will be made to you through cheque. In case an Income Tax Exemption Certificate is not produced by you the payment after 2-1/2% deduction of the amount required under section 50(4)79 of Income Tax Ordinance shall be paid to you. In this connection, Chief Accountant, KESC Limited has already been advised to prepare the cheque for such amount in your favour.

(5) DELIVERY:. 09 Units in June and 04 Units in July, 1993 or earlier.

(6) PENALTY: In the event of failure on your part to complete the delivery of vehicles within the specified period without any valid reason the KESC Limited reserves the right to levy a penalty equal to 2% of the balance value of the vehicles for each and every month or part of the month during which the delivery is delayed.

(7) ARBITRATION:

2. The plaintiff placed another order, dated 26-6-1993 upon the defendant for supply of 9 Nissan Sunny Cars at the rate of Rs,503,000 per car and the total price of Rs,4,527,000. The terms and conditions of this contract were also identical to the first one.

3. The plaintiff made payment to the defendant through three cheques i,e, Cheque No,H-31 866275, dated 14-6-1993 for Rs,30,97,575 (Rupees Thirty Lacs Ninety-Seven Thousand Five Hundred Seventy-Five only) vide second Cheque No,H-31 866847, dated 29-6-1993 for Rs,44,13,825 (Forty- Four Lacs, Thirteen Thousand Eight Hundred Twenty-Five only) and third cheque vide No,H-31- 866558, dated 22-6-1993 for Rs,13,76,700 (Rupees Thirteen Lacs Seventy-Six Thousand Seven Hundred only). All these payments were made before any vehicle was delivered by the defendant.

4. According to the plaintiff despite receiving full payment for all the contracted goods the defendant only supplied two Sunny cars on 23-7-1993 i,e, within the delivery period. Therefore, the plaintiff started pursuing the defendant to deliver the vehicles but the latter kept on avoiding to do so on one pretext or the other. After great pursuasion, however, the plaintiff were able to obtain delivery of two more Sunny cars on 9-12-1993. They also caused a legal notice to be served on the defendant but the latter did not respond to the same. On 21-3-1996 this suit was filed. Summons could not be served on the defendant in the ordinary course as by that time the defendant had moved out of the address given in the plaint and the plaintiff were unable to supply any fresh address. Eventually publication was effected through substituted service by publication in Daily 'Mashriq' on 13-4-1997 and affixation at the defendant's last known address. No appearance was made on behalf of the defendants.

5. The plaint is signed by the Secretary of the plaintiff and verified on oath, copies of the tender notice relating to two contracts for supply of Chasis and cars have been annexed. The plaintiff have also annexed photo copies of three cheques in favour of the defendants through which payments have been made alongwith a certificate from Manager, National Bank of Pakistan AIMAI House, Karachi, certifying the delivery of photo copies of the cheques. Certain correspondence with the defendant whereby the plaintiff have been repeatedly asked for completion of supplies and the defendant has been promising to do so on different dates has also been placed on record. In none of these letters the defendants have denied their liability to deliver or furnish any justification for non-delivery. An affidavit in ex parte proof has been filed by Syed Iftikhar Ahmad Shah, Deputy Chief Controller, Purchase in the plaintiff Corporation. The deponent has reaffirmed the contents of the plaint and the documents annexed thereto as mentioned above.

6. In the circumstances and on the basis of the material brought on record it appears quite plainly that entire payment for 13 Mazda Chasis and 9 Sunny Cars was made to the defendant in advance and the defendant only supplied four Sunny Cars. The plaintiff, therefore, are entitled to a decree for refund of the price of undelivered goods.

7. An extremely disturbing aspect of the whole matter, however, is that payment of such exorbitant amount out of public money was affected on behalf of the plaintiff Corporation without obtaining delivery of the contracted goods. There is nothing on record to justify that any amount of advance payment was required to be made for the purpose of giving effect to the terms of the contract.

' The officers of the plaintiff chose to make payment without bothering to obtain delivery of the goods. Thereafter, the matter was leisurely pursued and the suit was filed only in March, 1996 to avoid statute of limitation. By that time the defendant had very conveniently disappeared from the scene. Prima facie it is a case of gross maladministration, inter alia, in terms of Article 2(2)(1)(b) of the Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983, no justification appears to exist for advancing huge amounts of public's fund to a dealer without obtaining delivery of contracted goods or even securing the amount advanced. There is a strong possibility that it was done for corrupt motives.

8. I would therefore, decree the suit in the sum of Rs,7,104,000 in favour of the plaintiff Corporation as prayed. At the same time a copy of this judgment will be communicated to the Wafaqi Mohtasib for investigation into the act of maladministration on the part of Officers of the plaintiff Corporation under section 9(1) of the Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983

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