' This is a suit for recovery of Rs,60,75,405 seeking the following reliefs:--
(a) A money decree of Rs,60,75,405 on account of plaintiff's share of commission under the contracts between the Mills and defendant No,3 or the amount of commission due on the previous contract i.e. 21,36,645.
(b) Alternatively on account of damages in the sum of Rs,39,38.760.
(c) An injunction restraining the defendants from seeking the 10 per cent value of the last shipment under the previous contract and from collecting the 40 per cent. Of the fixed commission of 2 per cent. Under the new contract.
(d) Interest on both the sums aforesaid at the rate of 18 per cent. Per annum from the date of suit until realization.
2. It is the case of the plaintiff that Pakistan Steel Mills Corporation imports huge quantity of iron ore from various countries under contracts between foreign suppliers and the Mills which is monitored through the supplier's local agents in Karachi. In 1986 Pakistan Steel Mills indicated that they would be inviting tenders for execution of contracts at Karachi between qualified bidders and the Mills for requisite supplies which in the present case was to be supplied by defendant No,3 based in London. With regard to the contracted supplies the plaintiff, late Unver Isa predecessor of defendants Nos.1 and 2 and the defendants Nos.4 and 6 resolved to act for their mutual benefit as agents of defendant No,3 for the purpose of securing the contract and monitoring it for successful completion by defendant No,2. The said defendant by its letter dated 22-9-1986 appointed the plaintiff, late Unver Isa, defendants Nos.4 and 6 and another person as agents for the secured business with the Mills who were apprised of such appointment. After the process and scrutiny of tenders Pakistan Steel Mills accepted their tenders for the specified supplies for a period of five years commencing from 1987 to August, 1992. It is averred that on account of plaintiff's favourable position viz. Pakistan Steel Mills, it was agreed between the constituent parties that he shall receive 20% share out of 2% commission payable by defendant No,3 to joint venture with a view to cover the accruing relating to performance of the contract while the balance was divisible among other partners. After the conclusion of contract and execution of formal documents at Karachi constituents opened the letters of credit while defendant No,3 commenced supplies to Pakistan Steel Mills. On such supplies, plaintiff claims his title to share of 2% on the commission as agreed by reason of having brought the defendant No,3 and Pakistan Steel Mills together for the execution of the contract. It is asserted that plaintiff received only a part of his commission in Pakistan though he was the managing constituent of the joint venture viz-aviz. Defendant No,3 and the Mills.
According to the agency agreement. Plaintiff claims to be a partner of defendant No,6 and it was given effect to by all concerned. By reason of substantial investments and his contribution id securing the principal contract in favour of defendant No,3 he claims that the agency being coupled with interest acquired irrevocable character. It is averred that towards the conclusion of the contractual period between defendant No,3 and the Mills, the predecessor of defendants Nos.l and 2 namely Unver Isa expired at Karachi. However, during his lifetime Unver Isa, defendants Nos. 4 and 6 and another person made unholy efforts for ousting the plaintiff from the ongoing arrangement after the expiry of the initial contract in August, 1992 when new contract between defendant No,3 and Pakistan Steel Mills was anticipated. According to the plaintiff, continuation of agency after expiry of the contractual period was an implied terms of the agency notwithstanding the charge/alteration in the name of defendant No,6 by defendant No,7. It is grievance of the plaintiff that in October, 1991 late Unver Isa in collusion with defendants Nos.3 to 6 and another person illegally excluded him from the operative arrangement and sought his substitution by another person, namely, Farooque Rahimtoola. Plaintiff contested this position ensuring the continuity of contract between the parties so that the agency continued to receive due share of commission and to defray the expenses on account of new contract. Seriously agitating his exclusion from the 'residuary benefits, plaintiff seeks the deposit in Court by Pakistan Steel Mills of the entire residuary amount for the purpose of securing his claim.
3. In the counter-affidavit, defendant No,1 controverted the plaintiff's case that he made any efforts and inputs of substantial money and/or time to secure the principal contract between defendant No,3 and Pakistan Steel Mills Corporation Limited. According to this defendant, defendant No,6 i.e. Sarela Trading Company was exclusively owned by his late father Qazi Unver Kamal Isa who employed the plaintiff in the said company. He denied the existence of any agency coupled with interest as alleged and insisted that plaintiff's own documents reflected that his position was no better than an employee. Share in commission amount as claimed by the plaintiff is denied with an assertion that his father was compelled to dispense with the services of the plaintiff for reasons of criminal misconduct and embezzlement of funds. All other assertions are denied and specifically disputed.
4. In the counter-affidavit by defendants Nos. 3 and 5, it is urged that ,defendant No,3 was dealing with the contract for supply of iron ore to the Pakistan Steel Mills Corporation and that such imports are no longer handled by the local agents following the change in policy vide telex dated 16-1-1992 from the Pakistan Steel Mills. All allegations and assertions of the plaintiff are controverted with an averment that the Pakistan Steel Mills had awarded the contract not as a result of plaintiff's favourable position but in consequence of commercial and technical deliberations. It is said that both the defendants never treated the plaintiff as the Managing partner constituent but merely an employee of defendant No,6. Besides contract with defendant No,6 was not renewed due to the death of late Unver Isa and the refusal of Pakistan Steel Mills to appoint local agents.
5. Likewise defendant No,4 challenged the maintainability of the suit in view of the provisions contained in section 69 of the Partnership Act and Order XXX of the Code of Civil Procedure. He has supported and fully corroborated the defence set up by defendant No,1 . According to this defendant, plaintiff was employed on the basis of 20% share of commission to act as liaison with Pakistan Steel Mills. Copies of various letters exchanged between the plaintiff and late Unver Isa are filed to reiterate that the plaintiff had misappropriated certain sums of money whereupon his services were terminated by letter, dated 5th October, 1991.
6. Affidavit-in-rejoinder was filed reiterating the case set up in the plaint and rebutting the defence set up in the counter-affidavits.
7. At the hearing, learned counsel for the plaintiff referred to copies of various telex messages to reflect the impugned agency agreement between the plaintiff, late Unver Isa, defendants Nos. 4 and 6 and an unknown person for mutual gain for procuring contracts for supply of iron ore as local agents of the foreign exporter. According to the learned counsel, 26 vessels carrying iron ore sailed from Brussels to Pakistan and on each occasion letters of credit were opened equivalent to 105% of value of letter of credit in respect of each consignment of which 90% amount was recouped by defendant No,3 whereas 15% of the value of the consignment was retained by Pakistan Steel Mills for verification of quality as well as quantity of the consignment. According to learned counsel, commission at the rate of 2% was payable to off shore account controlled exclusively by defendant No,4 based at London. Such amounts were to be distributed between the constituents of joint venture i.e. Defendant No,6 for the initial contract which was wrongfully substituted by defendant No,7 after the expiry of initial contract period. Main thrust of the learned counsel for plaintiff is that as against total receivable share of US Dollars 1,94,979 he received, U.S. Dollars 1,15,844 on consignments shipped through first twenty vessels leaving a balance of US Dollar 79,135 Whereas he did not receive any commission on account of the consignments shipped through last six vessels, hence this claim for a sum of Rs,21,36,445 and alternatively for damages amounting to Rs,39,38,760.
8. On the afore-noted C.M.A. Vide order dated 22-10-1992 subject to furnishing security in the sum of Rs,2,00,000 by the plaintiff, garnishee i.e. Pakistan Steel Mills were restrained from remitting the amount in question to defendant No,3 till a specified date which was extended from time to time.
By another order dated 17-1-1993 passed at the behest of Mr.Kamal Azfar, Advocate for defendants Nos. 3 and 5 Pakistan Steel Mills were directed to deposit U.S. $ 90,000 with the Nazir of the Court being the amount equivalent to 2% value of the consignment.
9. On his part, Mr.Kamal Azfar, learned counsel for defendants Nos.3 and 5 with reference to paragraph 5 of the plant contended that plaintiff claiming to be partner of an unregistered partnership and seeking entitlement to 20% share in. The commission, his claim set up in the plaint would be barred by section 69 of the Partnership Act, that in any event according to plaintiff's own averments he has been overpaid and lastly; that plaintiff has no privity of contract with defendant No,2, therefore, he cannot enforce any right or right or interest in the property in suit against the said defendant. Learned counsel referred to letter dated 22-9-1986 addressed by defendant No,3 to defendant No,6 confirming the agreement between the said defendant and defendant No,6 to act on its behalf as liaison between the said defendant and Pakistan Steel Mills for the contract of supply of iron ore from 1987 onwards and assuring that agreed fee for services at 0.75% of the net F.
0. B. Value of each cargo shall be made after full payment for the shipment was received. A reference is also made to the contract between defendant No,3 and Pakistan Steel Mills Corporation Limited for the supply of iron ore for a period of five years. Learned counsel also made a pointed reference to plaintiffs letter dated 9-4-1988 addressed to his sister Mrs. Night Mohsin reflecting evil intentions of the plaintiff with regard to the commission receivable by Sarela Trading Company and letter, dated 5th October, 1991 written by Unver Isa to the plaintiff terminating his association with the company and intimating Pakistan Steel Mills about this fact to suggest that the plaintiff throughout the course of his employment with defendant No,6 was neither a partner in the share of commission nor instrumental in arranging the contract for supply of iron ore with defendant No,3. In fact he happened to be an employee of defendant No,6 who represented the interests of foreign exporter i.e. Defendant No,3.
10. Learned counsel lastly contended that the letter of credit has a definite implication. It is mechanism of great importance in International trade and any interference with such mechanism is bound to have serious repercussions on the International trade of this country. He relied upon Malas and another v. British Imex Industries Limited (1985) 1 All England Law Reports 262), Power Curber International Ltd. v. National Bank of Kuwait (1981) 3 All England Law Reports 607), Tarapore & Co. v.
0. Tractors 1969 (1) Supreme Court Cass 2033, Kohinoor Trading (Pvt.) Ltd. v. Managrani Trading Co.
(1987 CLC 1533), Allied Industries Hub (Pvt.) Ltd. v. China National Metals (1989 M LD 2027) and Banque Indosuez Belgium v. Haral Textile Ltd. (1998 CLC 582).
11. Mr. Kazim Hassan, learned counsel for remaining defendants except defendant No,7 virtually adopted the line of arguments taken by Mr. Kamal Azfar, learned counsel for defendants Nos.3 and
5. On his part Mr. Moin Azhar, Advocate representing Pakistan Steel Mills submitted that this is primarily a dispute between the plaintiff and the defendants, to which, Pakistan Steel Mills is not a party. In fact he meant to say that Pakistan Steel Mills as garnishee would abide by the lawful orders passed by this Court.
12. On examination of the record and proceedings containing various telex massage and photo copies of letters exchanged between the parties it is difficult to hold with an amount of certainty that there was a joint agreement between the plaintiff, late Unver Isa and defendants Nos.4 and 6 as averred. Ex facie it seems that defendant No,6 has been acting as local agent for and on behalf of the foreign importer i.e. Defendant No,3 for supply of iron ore to Pakistan Steel Mills Corporation Limited. There is a serious controversy between the parties with regard to the partnership of the plaintiff in the so-called arrangement between the parties relating to their respective shares in the amount of commission payable by defendant No,3 to defendant No,6. Tentatively it may be assumed for the time being and without deciding the issue conclusively that there was some liaison between the plaintiff and late Unver Isa relation to the contract for supply of iron ore by defendant No,3 to Pakistan Steel Mills.
13. Adverting to the point of view expressed by defendant No,3 seemingly defendant No,6 appears to be a sole proprietary concern owned and managed by late. Unver Isa and not a partnership in the.Joint venture i.e. Defendant No,6. Indeed the question is not free from controversy and there is an area of difficulty in placing implicit reliance on the stand taken by the plaintiff in this suit.
Various letters placed on record rather tend to reflect that his association with defendant No,6 was dismissed on serious charges of misconduct and criminal breach of trust. Be that as it may, at interlocutory stage this Court is not expected to express any definite opinion on the respective contentions of the parties as any expression of opinion is likely to prejudice the case of any of the parties. Suffice, however, to say that the plaintiff does not seem to have a vested legal right to any property or a legal character in order to entitle him to the relief of injunction which is purely discretionary and equitable in nature. It may, therefore, he safely observed that the plaintiff has hardly been able to make out a strong prima facie case for the attachment of amount of commission presently withheld under an interim attachment order passed by this Court nearly six years ago.
14. With regard to contracts and more so contracts with regard to establishment of letter of credit it may be observed that such contracts must be preserved and their sanctity should not be lightly interfered with as suggested. Indeed payment due under a Letter of Credit cannot be stopped/restrained unless there be a strong case of fraud, forgery, or obtaining wrongful advantage from such contract. Indeed the principle of law is well-settled that generally an irrevocable Letter of Credit cannot be dishonoured and the only exceptions are when any demand for payment is fraudulent or where there is a challenge to the validity of Letter of Credit. Indeed in Allied Industries case (supra) it was authoritatively held that an irrevocable Letter of Credit has a definite implication. It is mechanism of great importance and any interference with such machanism bound to have serious repercussions on the International commitments in the comity of nations. In my view, except under exceptional circumstances Courts are not entitled to interfere with such contracts. The view taken by Lord Denning MR is well-illustrated in Power Curber case (supra) as under: "It has been long established that when a letter of credits is issued and confirmed by a bank, .The bank must pay it if the documents are in order and the terms of the credit are satisfied. Any dispute between buyer and seller must be settled between themselves. The bank must honour the credit."
15. In Bank Indosuez case (supra) the view taken by the Lahore High Court is that Letter of Credit is altogether independent from original contract between buyer and seller. On the basis of alleged breach of contract of sale, a purchaser of sale, a purchaser cannot frustrate working of contract represented by a Letter of Credit. Working of Letter of Credit cap only be interrupted if it is shown that one or other condition of Letter of Credit itself has been reached. A negotiating Bank or holder of negotiable instrument in due course has absolutely no concern with working/importer working of the original contract of sale.
16. Indeed plaintiff is neither a seller nor a buyer of the goods under the contract of import governed by a Letter of Credit which are primarily governed by the Articles of Uniform Customs and Practice for Documental Credit (1988 Revision). Needless to reiterate plaintiff is not a party to the contract between the foreign exporter and the local importer. No conclusive agreement between the parties binding defendants Nos.3 and 6 appears to exist on the face of record. Reference to cases reported as Balagamwala Oil Mills (Pvt.) Limited v. Shahkarchi Trading A.G. (PLD 1990 Karachi 1) and Mohiuddin v. Province of East Pakistan (PLD 1962 SC 119) is, thus, completely out of place and misconceived.
17. I am not inclined to dilate on the point raised with regard to the bar of maintainability in terms of section 69 of the Partnership Act read with provisions of Order XXX, C.P.C. As notwithstanding the averments in paragraph 5 of the plaint it is not the case of the plaintiff that there was actually a partnership between the parties. In the absence of any definite averments as to the existence of any partnership the question of its registration or otherwise need not be determined at this stage.
18. As regards letter dated 9-4-1988 purportedly written by the plaintiff to his sister Mrs. Night Mohsin suffice it to say on defendant's own showing his employment having come to an end no useful purpose would be served by deeper of this aspect of the case.
19. In view of the factual and legal position discussed hereinabove, I am of the clear view that the plaintiff failed to make out a good prima facie case of the grant of interim order of the nature prayed by him. Balance of convenience and essential ingredient relating to irreparable injury also do not lean in his favour. C.M.A. Is, therefore, dismissed and interim .
Interim injunction refused.