' In this suit for damages the following prayer is made:-- "(a) to declare that the defendants has not fulfilled their commitment in disbursing the LMM loan;
(b) to declare that due to refusal to disburse the said loan, the plaintiffs were not bound to lift the machinery;
(c) to order that a loss has been caused to the plaintiff in the sum of Rs,64.45 Millions;
(d) to order that damages to the extent of Rs,90.00 Millions has been caused to the plaintiff; (e)to declare that no loan is liable to be repaid by the plaintiff.
(f)to declare that the guarantees issued by the sponsoring Directors stand cancelled.
(g)to grant cost of suit; and (h)any other order/orders, relief/reliefs that this Hon'ble Court may deem fit and proper on the facts and circumstances of the case."
' The facts leading to the filing of present proceedings, as stated in the plaint, are that the plaintiff, a limited company, had applied to the defendant, a banking company eastablished under the Industrial Development of Pakistan Ordinance 1961, for grant finance to establish a Spinning Unit at Vinder, District Lasbela. The said request was granted by the defendant through Sanction Letter dated 16-12-1991 in the terms that the defendant agreed to issue bank guarantee for machinery proposed to be imported under supplier's credit in foreign currency equivalent to Rs,119.771 million.
Besides, the defendant agreed to provide financial assistance in the sum of Rs,10 million, under the LMM Scheme, with the arrangement that Rs,8 million were to be obtained by way of refinance from the State Bank of Pakistan whereas the remaining sum of Rs,2 million were to be provided by the defendant-bank from its own resources. According to the plaint, despite grant of the two facilities for separate amounts, the same were so inter-linked with each other that the grant of one in the absence of the other would render the first meaningless. It is further averred in the plaint that the plaintiff from its own funds had acquired land for the project and had raised construction thereon which had cost it a sum of Rs,20 million approximately. Besides, the plaintiff claims to have invested Rs,33 million for establishing Letter of Credit to import machinery for the project. The plaintiff claims to have already invested a sum of 16.60 million towards the project. In relation to the imported machinery, the required guarantee was issued by the defendant and the foreign manufactured machinery had arrived at Karachi Port during March 1993. As regards the, local currency finance, it is stated that the defendant bank had failed to disburse the same. While explaining the default, it is averred in the plaint that the payment, in terms of the LMM Scheme, had to be made directly to the local supplier of machinery after selection through the process of inviting tenders. The plaintiff's case is that the tenders were called by it with the approval of the defendant-bank on 9-6-b3 and bid was received from one M/s Rehan Engineering Foundry Industries which was forwarded for approval to the defendant-bank with its own recommendation. The tender was allegedly rejected without any justification and with the mala tide intention of evading the commitment earlier made by the defendant. Pursuant to the rejection of tender the plaintiff again invited fresh tenders which were recommended for acceptance to the defendant but to see the same fate. The plaintiff was then advised to locate a manufacturer approved by the defendant. It is further the case of the plaintiff that despite submission of quotation by approved manufacturers, the defendant declined to accept the offer and to release the finance under LMM Scheme. It is averred in the plaint that the mala fides of the defendant were evident from the fact that it had approved offers by the same manufacturers for supplying similar nature of machinery to two other entities, namely, Marhaba Textile Mill Limited and Ravi Taxtile Mill Limited. Despite the identical nature of offer contained in the tender of M/s Rehan Engineering Foundry Industries, the defendant had refused to approve the tender for supply of locally manufactured machinery to the plaintiff. Beside it is urged that the plaintiff had arranged bridge financing from different financial institution for meeting the part of investment undertaken to be arranged by its sponsors and promoters. However, the defendant with the mala fide object of causing loss to the plaintiff, refused to grant it's no objection for the bridge financing and rather got advertisements published in the Newspapers in relation to the imported machinery which was lying for clearance at Karachi Port with the result that the various banks and D.F.Is. Who had earlier agreed to grant bridge financing, backed out of their commitments making it impossible for the plaintiff to proceed with completion of its project which, in terms of the feasibility report, had to be completed within 22 months. With such background the present proceedings have been filed for recovery of damages alleging loss having been suffered by the plaintiff to the extent of Rs,154.45 million.
' In the written-statement the defendant-bank has denied the plaintiff's claim and it is urged that the two facilities were independent from each other and the rejection of tenders forwarded by the plaintiff was not tainted with mala fides and was justified the terms of the understanding between the parties. It is further the case of the defendant that the plaintiff had itself committed breach of the understanding between the parties. The allegation that the plaintiff had invested Rs,60 million towards the project or that any loss was caused to it have been denied.
3. On the pleadings of the parties, the following issues were settled on 19-5-1996 by this Court:--
(1) Whether or not the two financial facilities granted by the defendants under the Letter of Sanction dated 16-12-1991 are inter-linked and connected for the purposes of release? If so, what is the effect of non-release of LLM Funds by the defendants?
(2) Whether the plaintiffs have made huge investment of 60.00 million towards the Construction of Factory Building in furtherance of the project in question and opening of requisite L/Cs etc.?
(3) Whether the inability to get the imported machinery released from Customs was due to non- release of funds and non-cooperation of the Defendants? If so, what is the effect?
(4) Whether the defendants acted with malice in constantly rejecting the tenders submitted three times by the plaintiffs or purchase of locally manufactured machinery? If so, to what effect?
(5) Which of the party committed breach of Agreement/understanding?
(6) Whether the plaintiffs suffered losses as alleged?
(7)Whether the defendants are liable to pay the damages claimed in the suit?
(8) What should the decree be?
' The plaintiff has examined one Syed Farrukh Mateen, Exh.16, as its sole witness whereas the defendant, too, has examined its Manager, Settlement Department, Syed Asif Ali Shah, Exh.17, as its only witness. Prior to recording the evidence, admitted documents were brought on record as Exh.5 to Exh.15. The two witnesses were duly cross-examined.
4. I have heard the learned counsel for the parties and with their assistance perused the record. My finding on the issues is as follows: -- ' ISSUE No, l.
5. In relation to this issue, both the learned counsel have referred to the respective pleadings and the deposition of the two witnesses besides the Sanction Letter dated 16-12-1991, Exh.5. The assertion from the side of the plaintiff in the plaint and the examination-in-chief of the witness, Syed Farrukh Mateen, has been disputed by the defendant and its witness. The said material an merely, be termed as word against word and does not advance the case of either of the parties.
Reference has further been made to the Sanction Letter, Exh.5, to contend that a perusal of the lists of machinery covered by the two facilities shows that the two facilities were in-separable and utilization of either of the finances without availing the other was meaningless. The said contention of the learned counsel for the plaintiff cannot be accepted in the absence of positive evidence in this behalf. Neither a technical person has been examined by the plaintiff nor have any details been stated to show if the various items, mentioned in the list of imported machinery, Annexure-II to the sanction Letter, could not be used as Spinning Unit in the absence of the items mentioned in the list of locally manufactured machinery, Annexure II-A to the Sanction Letter. The learned counsel for the plaintiff has referred to Article 129 of Qanoon-e-Shahadat and contends that this Court is obliged to presume that the machinery covered by the two facilities could not be used separately for the reason that the grant of both the facilities was sanctioned through common document. I am A afraid, such presumption shall be too farfetched and cannot be drawn in the absence of some tangible proof. Indeed, the Sanction Letter, Exh.5, refers to the requirement of finances by the plaintiff for setting up a new Spinning Unit. However, the possibility of the machinery, covered by the LMM Scheme, not being imminently necessary for operation of project, cannot be ruled out. In any event, the learned counsel for the defendant has pointed out that this issue stands decided in J.M. No,1 of 1994 filed by his client, under section 39 of the I.D.B.P. Ordinance for recovery of the facility amount. The said proceedings filed by the defendant came to be decided through judgment dated 19-2-1996 wherein the following observation is contained: "As pointed out earlier, local currency component of the finance has nothing to do with the commencement of the project as in the first instance it was for the respondents to import the machinery which having been imported has not been cleared by them from the Customs despite a lapse of almost four years."
' The learned counsel for the plaintiff has pointed out that an Intra-Court Appeal has been filed against the said judgment passed in J.M. No,1 of 1994. However, it is conceded that the operation of the judgment has not been suspended. It is not disputed before me that the said finding has been recorded by a Court of competent jurisdiction or that the two parties hereto were party to the said proceedings. In the circumstances, the assertion of the learned counsel for the defendant that the consideration of this issue is barred by res judicata cannot be termed without force. The issue is answered accordingly.
' ISSUE No,2:
6. The learned counsel for. The plaintiff has referred to the averments contained in the plaint to the effect that the plaintiff has already invested a sum of Rs,60 million towards the project. The averments in this behalf are contained in para 6 of the plaint which is to the following effect:-- "6. That the plaintiffs company from its own funds acquired land for the project at Vinder Industrial Estate, District Lasbella, invested 33.00 Millions for establishing L/C, and started the civil works of the building in October 1992, and the civil works is almost complete up to the roof and the 98% of the flooring work done, thus, incurring cost of 20.00 millions. The total investment of sponsors according to scheme approved by I.D.B.P. Was 45 millions and Directors subordinated loan was 7.5 millions. However, the Plaintiffs have already invested Rs,60.00 millions towards the project.: ' The above averments have been denied in the written-statement. The plaintiff's witness in his deposition, Exh.16, has urged that a sum of Rs,33 million had been invested by the plaintiff before establishment of the Letter of Credit whereas the total amount of investment which has gone waste is to the extent of Rs,67 millions. The assertion made by the plaintiffs witness, as above, was disputed in the cross-examination as well as in the evidence of the defendant's witness, Syed Asif Ali Shah. The plaintiff has not produced any evidence of the expenditure of Rs,33 million before establishment of Letter of Credit nor have only details thereof been produced. Likewise, the details of construction have also not been brought on record nor has any Architect or Property Valuer been examined to assess the cost of the construction raised so. Far. From the side of the defendant, it has been urged that the construction raised by the plaintiff is incomplete and even the flooring and casting of roof has not been done. Indeed, such position is admitted by the plaintiffs witness in his cross-examination where he says "the structure of the building where the machinery had to be installed is not yet complete." It is an established position of law that in a claim for damages, loss has to be proved with exact details by the claimant; and, the material available on record of this case cannot be termed sufficient to entitle the plaintiff to a positive finding. The investment alleged by the plaintiff has to be proved in view of denial by the defendant.
The plaintiff, however, has failed to adduce any positive evidence to record a tacit finding in this behalf. The plaintiff, thus, has failed to prove this issue.
' ISSUE No,3:
7. Regarding this issue, the contention of the learned counsel for the plaintiff is that the imported machinery could not be got released by the plaintiff on account of ad-interim order of attachment passed on 8-9-1994 in J.M. No,1 of 1994 at the behest of the defendant. After such attachment, in pursuance of order passed by the Court, documents pertaining to the imported machinery were handed over to the defendant who, therefore, is responsible for non-release of the machinery. It is an admitted position that a huge amount of demurrage has already accumulated on account of non-release of the machinery which is lying in bonded warehouse. The explanation, in reply, is that the liability to have the imported machinery cleared was initially upon the plaintiff and the defendant was not obliged in law or under the arrangement contained in the Sanction Letter, Exh.5, to get the machinery released. The release of machinery involved payment of demurrage, customs duties, where etc. And such liabilities have now swelled to an enormous figure as beyond Rs,250 million. Even the judgment in J.M. No,1 of 1994, Exh.16/1, shows that the amount of said liabilities stood at Rs,191.007 million as on 30-6-1996. The plaintiff has not shown any material to fix the responsibility for release of the imported machinery upon the defendant or to provide funds to have the same released. The imported machinery had arrived at Karachi Port ill March 1993 according to the averments contained in para 7 of the plaint. Even if it is accepted that the plaintiff could not apply for release of the goods after the order of ad interim attachment, dated 8-9-1994, sufficient time was available to it for securing release of the machinery prior thereto. My finding on Issue No,3 is, therefore, in the negative.
' ISSUE No,4:
8. On behalf of the plaintiff it Is urged that the defendant had acted with malice in repeatedly rejecting the tenders for supply of locally manufactured machinery. Besides, the averment in the plaint to the effect that the defendant had approved the tender submitted by the same supplier of locally manufactured machinery in relation to two other projects of similar nature, the remaining averments of malice and mala fide intention are merely general and vague. It is quite a settled proposition that details of acts taken maliciously are required to be pleaded. For a person alleging mala fides, it is necessary to show that the person responsible for taking action has been motivated with the object of causing hurt to the complainant or to benefit one-self. Indeed, action taken for collateral purpose or any colourable exercise of authority or for committing fraud of the law is also included in mala fide acts. As regards proof of mala fide action, the following passage from the judgment in Federation of Pakistan v. Saeed Ahmed Khan (PLD 1974 SC 151) may be reproduced with advantage:- "Mala fides is one of the most difficult things to prove and the onus is entirely upon the person alleging mala fides to establish it, because there is, to start with, a presumption of regularity with regard to all official acts, and until that presumption is rebutted, the action cannot be challenged merely upon a vague allegation of mala fides. As has been pointed out by this Court in the case of the Government of West Pakistan v. Begum Agha Abdul Karim Shorish Kashmiri (PLD 1969 SC 14), mala fides must be pleaded with particularity, and once one kind of mala fides is alleged, no one should be allowed to adduce proof of any other kind of mala tides nor should any enquiry be launched upon merely on the basis of vague and indefinite allegations, nor should the person alleging mala tides be allowed a roving enquiry into the files of the Government for the purposes of fishing out some kind of a case."
' In the present case I am constrained to note that the particulars of mala fides or malice are lacking. Even with regard to the assertion that similar machinery was approved to be supplied by the same manufacturer/supplier is not proved: The defendant has denied all the allegations contained in the plaint in this behalf and it is pleaded that the tenders procured by the plaintiff were rejected for valid reasons. Such position, according to the defendant, was accepted by the plaintiff who, itself, had invited fresh tenders. The plaintiff has also not produced the procedure which was agreed between the parties for inviting tenders or that the requirement of inviting tenders was agreed between the parties at all. The learned counsel for the plaintiff has referred to principle of res ipsa loquitur and submits that sufficient material is available on record to hold that the defendant had agreed to disburse the facility granted under LMM Scheme directly to the supplier of local machinery, if approved by it. While it is manifest from the record that the procedure for inviting tenders to approve the supplier of machinery had been agreed between the parties, the limitations on the authority of the defendant to reject the tenders cannot be found from the record. Evidently, the burden to prove the conditions for inviting tenders and acceptance thereof is upon the plaintiff and the principle res ipsa loquitur is not attracted to the present case.
The necessary conditions for applicability of .The principle of loquitur have been narrated in the judgment of Pakistan Steel Mills Corporation v. Malik Abdul Habib (1993 SCM R 848) in the following terms:- "Res ipsa loquitur means that the things speak for themselves. This doctrine applies firstly, when the thing that inflicted the damage was under the sole management and control of the defendant and secondly, that occurrence is such that it would not have happened without negligence and thirdly, that there must be no evidence as to why or how the occurrence took place."
' Moreover, the learned counsel for the defendant has rightly urged that the existence of contract has to be established by the plaintiff for claiming any damages. In view of my findings on the subsequent issues, plaintiff fails on this count as well. My finding on this issue, therefore, again is in negative.
' ISSUES Nos.5, 6 and 7:
9. These three issues are proposed to be taken up together. On behalf of the plaintiff, its learned counsel has referred to the following clause contained in the Sanction Letter, Exh.5:-- "Disbursement Schedule: Local Currency Assistance Under LMM-SBP Scheme: ' Local currency assistance Rs,10,000 milion (Rs,8,000 million under SBP Scheme for LMM and Rs,2,000 million from Bank's own resources) shall be disbursed in instalments or in full to the local machinery supplier for purchase of locally manufactured machinery in accordance with the Bank's procedure for purchase of locally manufactured machinery. The disbursement will be made keeping in view 1.5 times security coverage after opening of letter of guarantee by the Bank."
' According to the learned counsel, the local currency finance under the LMM Scheme was undertaken to be disbursed by the defendant in accordance with the procedure for purchase of locally manufactured machinery prescribed by the defendants. In reply to my quarry, the learned counsel has conceded that the procedure referred in the above quoted term of the Sanction Letter is not available with the plaintiff nor has it been produced. I am afraid, the explanation for non- production of the above referred procedure of defendant-Bank is insufficient and could have easily been summoned from the defendant itself. For such purpose, the plaintiff could have summoned concerned officer of the defendant-Bank as witness or could have sought production thereof under Order XI, Rules 15 and 16, C.P.C. Even the defendant's witness, in his cross-examination, could be asked to produce the relevant material. The LMM Scheme prepared by the State Bank of Pakistan, in any event, is a duly notified scheme which could have been procured and produced, for, the procedure prescribed by the defendant-bank cannot be in deviation of the general scheme provided by the State Bank of Pakistan. Regrettably, however, the plaintiff has not chosen to have the necessary material produced leading to an adverse presumption. The production of said material could facilitate determination of the extent of defendant's authority to reject tenders. The plaintiff in order to establish breach of the alleged contract or understanding was required to clearly establish the terms agreed between the parties. On the available material, I am unable to find the terms of agreement settled between the two parties and it is not possible to record finding about any breach having been committed. Indeed, for claiming damages, onus to prove loss lies upon the plaintiff who cannot succeed without producing evidence in positive terms. In this respect, reliance can be placed on the case of Syed Ahmed Saeed Kirmani v. Muslim Commercial Bank Limited (1993 SCM R 441) wherein Saleem Akhtar, J., as he then was, speaking for the Court, has held as follows:--- "A party claiming damages suffered due to breach of contract must establish the contract, the breach thereof and the extent of damages. The onus is on the plaintiff and without discharging it he cannot succeed. Section 73 of the Contract Act prescribes the rule for assessing the damages suffered due to breach of contract. Only such damages can be recovered which naturally arise in the usual course of things from such breach of the parties at the time of making the contract knew that loss or damage is likely to result from the breach. Another principle which is to be kept in mind while assessing damages is that whether the plaintiff was in a position to mitigate the damages and has neglected to avail of it. As discussed above the appellant has failed to prove the agreement with the Egyptian Embassy, the rate of rent and the date of occupation. The appellant as stated by him is a man of status and resources but he has not proved what steps he had taken to mitigate the damages. It was contended and held by the learned trial Court that as the bank failed to pay the entire loan, the appellant could not be compelled to repay the loan received by him. In the facts of the case such an observation cannot be justified by any principle of law. A party can be relieved of his obligation under a contract where there are covenants which are conditional and the performance of one is dependent on the performance of the other. There is no such conditional or reciprocal promise between the appellant and the respondent."
' The law stated in the said judgment is very clear and no cavil can be had thereto. The plaintiff, in the present case, has failed to discharge its burden of establishing or bringing on record the terms settled between the parties and, therefore, finding about breach thereof cannot be recorded. The Sanction Letter, Exh.5, admittedly, does not contain any covenant which could be stated to have been violated by the defendant. In view of the said finding, I do not consider it appropriate to expatriate further on the issue and to determine if any breach of the terms contained in the Sanction Letter was committed by the plaintiff. In view of my said finding Issues Nos.6 and 7 are rendered infructuous. In any event, I am constrained to record that the plaintiff has again failed to establish the details of any losses allegedly suffered by it nor has been able to produce material sufficient to saddle the defendant with liability to pay any damages.
' ISSUE No,8: In view of the findings recorded hereinabove, the plaintiff's suit fails which, in the result, is dismissed.
The parties are, however, left to bear their own costs.