On 9-2-1981, the petitioner filed a suit against the respondents. It was stated in the plaint that a contract for supply of 1,61,900 Saline Giving Plastic Disposable Sets manufactured by Messrs Venospital Inc., U.S.A. At the rate of US $ 0.28 each F.O.B. For a total sum of US $ 45332 was awarded to the petitioner by the respondent No,
1. The terms of the contract were that a letter of credit was opened directly by respondent No,2 in favour of said manufacturer and the goods were to be shipped directly to respondent No,2 while the petitioner was to be paid commission at the rate of 2% on the F.O.B. Value of the contract. This amount according to the plaint comes to Rs,9,000 that prior to the award of the contract, the petitioner had sent a set manufactured by said Messrs Venospital Inc. To the Armed Forces Institute of Transfusion (AFIT), Rawalpindi and it was tested and approved. It was further stated in the plaint that the petitioner had offered to supply the said sets manufactured by the said Messrs Venospital Inc. Or Messrs B. Braun Melsungen. GmbH. West Germany and the respondent opted for the former and placed the contract accordingly. The goods were received in Pakistan by the Officer. Commanding, Armed Forces Medical Stores, Depot, Karachi-4. However, the said sets were rejected for the following reasons:--- "(a) The connula (Spike) of the set is narrow and fits loosely in the nozzle of infusion bags (Braun Type) in use.
(b) The plastic tubing is soft and this walled as a result of which it kinks at several places making it difficult to remove the air from the flow line. These kinks also impede the free flow of fluid in it."
' According to the petitioner, the said reasons do not make out a ground for rejecting the said sets as these sets conform to the sample, the petitioner was required to supply. The plaint further narrates that the petitioner approached the concerned authorities and instructed them in the manner in which the said sets could be used in conjunction with the Braun Bags and demonstrated the perfect working of the said sets. According to the plaintiff the Commanding Officer (AFIT), Rawalpindi expressed satisfaction and the matter was reported to the Medical Directorate but, without any response. The respondents then proceeded to cancel the contract vide a letter, dated 19-8-1980 and thereafter, vide a letter, dated 22-1-1981, the petitioner was directed to deposit a sum of Rs,5,57,322.93 by way of damages. Thereafter, the plaint narrates some particulars of the mala fides on the part of respondents. With these averments, a declaration was sought that the said letter, dated 19-8-1980 cancelling the contract at the risk and cost of the petitioner and the order, dated 22-1-1981 requiring the petitioner to deposit a sum of Rs,5,57,322.93 as damages, is illegal, null and void and a permanent injunction was sought restraining the respondents from effecting the recovery. In their written statement, the respondents objected that the suit is not maintainable and is barred by section 56 of the Specific Relief Act, 1877. The award of contract and its terms narrated in the plaint were admitted. However, it was stated that upon receipt the consignment was rejected after inspection for reasons already stated above. It was also stated that the bulk supply was not made according to the approved sample. The cancellation of contract and in consequence demand of amount of damages was justified as in accordance with terms and conditions of the contract.
2. Following issues were framed:--
(1) Whether the suit is not maintainable under section 42 of the Specific Relief Act and the plaint is liable to be rejected? OPD
(2) Whether the suit is barred under section 56 of the Specific Relief Act? OPD
(3) Whether the suit is barred under section 69 of the Partnership Act? OPD
(4) Has the plaintiff come to this Court with unclean hands? If so, what is its effect? OPD
(5) Whether the plaintiff has no cause of action against the defendant? OPD
(6) Whether the order, dated the 19th of August, 1980, of the first two defendants cancelling the contract placed on the plaintiff and the subsequent order, dated the 24th of January, 1981, of the said two defendants requiring the plaintiff to deposit a sum of Rs,5,57,322.93 by way of damages, are unlawful, void and based on mala fides of defendants No,3 and No,4? OPD
(7) What is the amount of damages suffered by the defendants, if any? OPD
(8) Relief.
' Evidence of the parties was recorded. The learned trial Court dismissed the suit vide judgment and decree, dated 14-7-1987. A first appeal filed by the petitioner was dismissed by learned A.D.J., Lahore on 23-4-1988.
3. Learned counsel for the appellant contends that evidence on record has been misread by the learned Courts below. Precise contention is that the goods were ordered to be supplied under a brand name and were so supplied under arrangement made directly by the respondents with the manufacturer. Further contends that reasons for rejection of the consignment were not tenable on their facts. Then argues that in the matter of risk purchase, also the learned Courts below ignored evidence on record to the effect that the petitioner was being made to pay for a brand purchased by the respondents from another Company which event at the time of initial contract was costly, than the brand, the contract whereof was placed upon the petitioner. Learned Standing Counsel for Pakistan on the other hand, contends that the suit was barred under section 56 of the Specific Relief Act, 1877 as the matter pertains to a contract. Further contends that the inspection was made in accordance with terms of the contract and there was no obligation on the part of the respondent to have served notice upon the petitioner before carrying out the inspection. Supports the reasons given by the respondents for rejecting the consignment being within the ambit of contract entered into between the parties.
4. I have gone through the copies of the record appended with this C.R. With the assistance of the learned counsel for the parties.
5. I have already referred to the respective pleadings of the parties above. The admitted facts of the case are that prior to the award of contracts, the petitioner sent samples of the items in question manufactured by Messrs Venospital Inc. U.S.A., these were tested and examined, and found fit vide letter, dated 7-1-1978 of A.F.I.T. (Exh.P.2). Vide Exh.P.4, the petitioner offered to supply the said sets manufactured by said Messrs B. Braun Melsungen GmbH. At the rate of 0.69 DM while the sets manufactured by the said Messrs Venospital Inc. Were offered at US $ 0.28 each. Vide Exh.
P.5, contract was placed on the petitioner to supply 1,61,900 sets at the rate of US $ 0.28 each for a total value of US $ 45332. Under the special condition, the brand name is mentioned as Messrs Venospital Inc., U.S.A. The consignment did reach the specified consignee and was inspected and was rejected vide Exh.P.6, which is inspection note containing the reasons stated above. This inspection was conducted on 20-8-1979. On 12-2-1980 vide Exh.P.7, notice was served upon the petitioner to remove the rejected stores and to deliver acceptable stores within fifteen days. Exh.P.8 is letter dated 11-2-1980 addressed to the petitioner by A.F.I.T., Rawalpindi stating that six number of sets supplied by Messrs Venospital Inc. Are being sent. Exh.P.9 is letter, dated 14-4-1980 addressed by the petitioner to Medical Directorate stating the manner in which the sets are to be used. Exh.P.10 is letter, dated 12-4-1980 addressed to the petitioner by A.F.I.T., Rawalpindi sending empty plastic bags (Braun type) and the said Salive Giving Plastics Disposable sets for manufacture of adopters.
Exh.P.11 is letter addressed by said Messrs Venospital Inc. To Directorate of Procurement (Army) informing that the said sets were compared with the samples and found to be same in quality and that the spike fits perfectly on any universal type bag and no defect as pointed out in the inspection note was found. The department was also informed if it was to use an unusual I.V. Bag, then it should have sent the same before. A sample of the set attached to a Travenol Bag was also sent. Exh.P.12 is a letter, dated 19-8-1980 informing the petitioner that the contract has been cancelled at their risk and cost. Exh.P.13 is a letter, dated 22-1-1981 calling upon the petitioner to deposit Rs,5,57,322.93 as risk purchase amount.
6. Major Zahoor Ahmad appeared as D.W.1 alongwith record. He stated that agreement Exh.P.5 was entered into with the petitioner; that petitioner had given samples which were approved but the consignment was not in accordance with the sample as per inspection note Exh.P.6. Contract was cancelled and risk purchase was made from Afzal Pharmacy vide Exh.D.5 and Exh.D.6 on which the said amount of Rs,5,57,322.93 was spent in excess which was demanded from the petitioner. In the cross-examination, the witness stated that he has made the statement from the record and has no personal knowledge as he was not posted at the relevant time. He admitted that when the tenders were called, it was not stated that the sets which are to be purchased are to be used in conjunction with Braun type bags. The witness stated that he was not aware as to whether the said Braun bags can be used in conjunction with the sets. He does not know as to which was the company who had manufactured the bags for which the sets were purchased. He admitted that petitioner had made an offer to supply Braun sets and in the alternate Venospital sets. He admitted that price of Braun sets was more than that of the Venospital sets and, as such, the latter was approved. The witness does not know as to whether Venospital sets can be used with Braun bags.
The witness admits that the price was paid through I.C. Direct to the foreign supplier and the petitioner was only to be paid some commission which has not been paid. The witness admits that inspection note does not state that the supplied goods are not in accordance with the samples given by the petitioner before the contract. The witness admits that petitioner had supplied the sets manufactured by Venospital. The witness admits that the petitioner had written the department that in case some difficulty is being faced, adopter can be used. He admits that the supplier had given a warranty before the shipment. The witness was confronted with Exh.P.11 and he admitted that the foreign supplier reported that the sets had been re-checked and they are working properly. The witness admitted that German made sets were purchased at the rate of 1.10 German Mark and it was at this rate that the risk purchase was calculated. He further confirmed that Vensopital sets were not purchased. He admitted that a tender was never called for Venospital sets before imposing risk purchase. The witness admitted that the respondent did not make any inquiry in the market for market value of Braun or Venospital sets. Ch. Sami Ullah appeared as P.W.1. He is the Managing Partner of the petitioner firm and made a statement in accordance with the plaint.
7. The learned Courts below have dealt with Issues 6 and 7 under the impression as if there is absolute bar in law to read and consider the evidence in a case of present nature. The learned A.D.J. Has proceeded to reproduce reasons given by the respondents to reject the stores, and then, has proceeded to uphold the said reasons. Although it has been noted that learned A.D.J. Has gone through the entire evidence, but I am constrained to state that he has not read the evidence at all.
If he had read the evidence, he would find that the respondent's own witnesses have stated that petitioner was called upon to supply the sets manufactured by Venospital Inc. And that these were the sets that were provided. The witness further stated petitioner. The respondents have directly dealt with the foreign supplier who had given warranty and later assured after re that inspection note does not say that the supplies were not in accordance with the samples provided in advance by the checking that the sets are in order. In this view of the matter, the said reasons stated in the inspection note Exh.P.6 hardly constituted a ground for rejection of the supplies which were made under a brand name as ordered by the respondents. There was, thus, no reason with the respondent to cancel the contract particularly when according to D.W.1, the respondents were not put on notice that said sets are to be used in conjunction with the Braun bags. It also stands admitted on record that the defect if any was in any case rectifiable by use or adopter but instead of giving a chance to the petitioner to rectify the same, the respondents proceeded to buy stores, that too absolutely different from stores subject-matter of the contract, from the market. Both the learned Courts below have not at all considered the plea of the petitioner that whereas they were ordered to supply sets in particular brand name, the respondents proceeded to purchase stores of a different name and brand from the market at three times the price. The findings on the said issues 6 and 7 are not sustainable and, as such, are reversed.
8. So far as the other issues are concerned, Issues Nos.1, 3 are 5 were answered in favour of the petitioner by the learned trial Court. However, Issue No,2 was found against the petitioner. The learned A.D.J. Probably did not give findings on Issue No,2. This issue pertains to the bar of section 56(d) of Specific Relief Act, pleaded by the respondents. The learned trial Court has observed that the relief prayed for in the suit constitutes interference with the working of the Federal Government.
The observation is without any basis. What the petitioner sought in the suit was an injunction restraining the respondents from recovering the suit amount wrongly being claimed as damages for breach of contract. There is no question of any interference in the working of the Government.
The findings recorded on Issue No,2 are also reversed.
9. As result of the above discussion, since the impugned judgments and decrees are a result of complete misreading rather non-reading of evidence on record, the same cannot be sustained in this civil revision, which is accordingly allowed. The judgments and decrees of both the learned Courts below are set aside and suit of the petitioner is decreed as prayed for. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.