2016 PLP 735 (CLD)

MUHAMMAD KHALID MEHMOOD KHAN, J.

Through this Civil Revision, the petitioner has assailed an order dated 04.10.2014 of Civil Court, whereby the petitioner's application under Order XV, Rule 1 read with section 151, C.P.C. was dismissed.

2. Briefly stated the facts of the case are that the petitioner filed a suit for recovery of damages of U.S$ 10 Million against respondents Nos.1 and 2 and arrayed respondents Nos.3 and 4 as defendants asserting that respondents Nos.3 and 4 are the franchise holders of respondents Nos.1 and 2 under a franchise agreement and the petitioner's claim against respondents Nos. 3 and 4 are only to the extent that they allegedly are looking after the affairs of respondent Nos.1 and

2. The respondent Nos.1 and 2 have received US $ 40,000/- from the petitioner in terms of letter of intent signed dated 08.10.2010. The respondents Nos.1 and 2 have failed to perform their part of agreement and the petitioner suffered huge loss due to the breach of agreement on the part of respondents Nos.1 and

2. The respondents Nos.1 and 2 denied the petitioners' claim and the respondents Nos.3 and 4 have even denied any privity of contract with the petitioner.

3. The petitioner before recording evidence filed an application under Order XII, Rule 2, C.P.C. for admission and denial of the documents annexed with the plaint including the invoice for payment of U.S$ 40,000/-, respondents Nos.1 and 2 admitted all the documents including the receipt of US $ 40,000/. The learned trial court framed the issues and adjourned the case for recording of evidence.

4. The petitioner filed an application under Order XV, Rule 1 read with section 151, C.P.C. praying that a preliminary decree be passed against respondents Nos.1 and 2 as they have admitted the receipt of U.S$ 40,000/- or in alternative respondents Nos.1 and 2 be directed to deposit the amount of US $ 40,000/- in court. Respondents Nos.1 and 2 opposed the application and the learned trial court vide impugned order dated 04.10.2014 dismissed the application.

5. Learned counsel for petitioner submits that respondents Nos.1 and 2 have admitted the receipt of US $ 40,000/- being the part payment of franchise agreement agreed to be executed between the parties. Respondents Nos.1 and 2 subsequently backed out from their commitment and the petitioner has suffered huge losses due to breach of agreement on the part of respondents Nos.1 and

2. The argument of learned counsel is that respondents have admitted the receipt of US $ 40,000/- and have shown their willingness to refund the same but with the condition that petitioner should withdraw the suit hence the court is bound to pass preliminary decree under Order XV, Rules 1 and

2. Learned counsel submits that act of respondents to put any condition for the refund of amount on the face of it is a mala fide act which is sufficient to prove that respondents have no intention to pay any amount even if the decree is passed. The respondents Nos.1 and 2 are foreign registered companies, they have no assets in Pakistan except franchise fee payable by respondents Nos.3 and 4, If the respondents are not ordered to deposit the amount of US $ 40,000/- the petitioner will not be in position to recover any amount from the respondents 1 and 2.

6. Learned counsel for respondents Nos.1 and 2 submits that the amount of U.S$ 40,000/- no doubt was paid to them in pursuance of letter of intent dated 08.10.2010 but it was agreed between the parties that the amount of US $ 40,000/- is non refundable. As the petitioner has failed to perform their part of agreement and as such the amount of US $ 40,000/- is not refundable. Learned counsel submits that no preliminary decree can be passed without recording the evidence specially when the respondents have claimed that the amount of US $ 40,000/- is non refundable.

7. Heard. Record perused.

8. It is an admitted fact that petitioner has filed a suit for recovery of US $ 10,000,000/- against respondents Nos.1 to 4, the suit against respondents Nos.3 and 4 has been dismissed summarily as the learned trial court allowed the application of respondents Nos.3 and 4 under Order I, Rule 10, C.P.C. It is also an admitted fact that in para 10 of the plaint the petitioner has specifically asserted that on 04.10.2010 respondents Nos.1 and 2 issued an invoice demanding an amount of US $ 40,000/- in pursuance of letter of intent executed between the parties on 08.10.2010, the amount of US $ 40,000/- thus is a part of suit. The petitioner in its application under Order XV, Rule 1, C.P.C. asserted in para 5 of the application that so far as the amount of US $ 40,000/- is concerned, the claim whereof has been admitted by respondents Nos.1 and 2, hence it is in the interest of justice that the learned trial court should pronounce a judgment under Order IX, Rule 1-A, C.P.C. in favour of petitioner. Respondents Nos.1 and 2 filed their reply which is reproduced as under:- "That the contents of paragraph 5 are denied and it is particularly denied that the plaintiff is entitled to any profit on the said amount of US$ 40,

000. Although the payment of US$ 40,000 to the answering defendants is admitted as stated above the plaintiff cannot seek refund of the said amount in isolation. The said payment by way of refund can only be made upon the plaintiff withdrawing the suit having accepted the refusal of its application for the Ramada Franchise by the answering defendants".

9. It is an admitted fact that respondents in their written statement have taken the defense that the amount of US $ 40,000/- is non-refundable but in reply to the application under Order XV, Rule 1, C.P.C. they have shown their willingness to refund the amount of US $ 40,000/- but with the condition that the petitioner should withdraw its suit. It is also an admitted fact that respondents Nos.1 and 2 are foreign companies, they have no assets in Pakistan and in case a decree is passed it will not be possible for decree holder to get the decree executed against respondents Nos.1 and

2. Respondents Nos.1 and 2 no doubt are maintaining their franchises and are receiving the franchise fee but at present it is not ascertainable how much amount the franchise holders are paying to respondents Nos.1 and

2. Further respondents Nos.1 and 2 to frustrate the decree, if passed in favour of petitioner, will take other steps to receive the franchise fee out of Pakistan. As the respondents have admitted the refund of US $ 40,000, but subject to withdrawal of suit, the respondents Nos.1 and 2 are companies incorporated out of Pakistan and as such it is in the fitness of things that respondents Nos.1 and 2 should deposit US $ 40,000/- in court being the amount in dispute which will remain deposit in court and will be regulated as per the terms of decree.

10. In view of the above, this Civil Revision is allowed, the impugned order is set-aside and respondents Nos.1 and 2 are directed to deposit US $ 40,000/- with the learned trial court within one month from today. In case respondents Nos.1 and 2 deposit US $ 40,000/- with the learned trial court, the learned trail court will invest the said amount in any profit bearing account which will be regulated in terms of decree. SL/L-10/L Revision allowed.