1979CLC 831 (PLP)

(2) Whether equipments supplied to the plaintiff by the defendant are directly imported brand new, up-to-date and complete in all respects? If not, what is its effect? (3) What were the terms of the contract agreed by the parties? (4) Whether plaintiff is entitled to get back Rs. 7,000 from the defendant? (5) Whether contract was by inspection and approved by Dr. Mujtaba ? If so, what is its effect? (6) What is effect of machine lying with plaintiff? (7) What should the decree be? Dr. Drago was examined on behalf of the Purchaser Association and the Seller Company examined Ahmed Shafi, the Secretary in the office of the Seller Company. One Mohammad Shaft was also examined by the Seller Company to produce the minutes of the meeting of the Executive Committee of the Purchaser Association. The trial Court came to the conclusion that the transaction related to sale of specific goods and contract was entered into after approval of the goods by Dr. Mujtaba and for such reason the Purchaser Association could not reject the machines. On that view of the matter the suit of the Purchaser Association was dismissed. Op an appeal before the District Judge, Tharparkar, the decree of the Civil Judge was reversed on the ground that the Seller Company had agreed to supply brand new and up-to date, latest model machines. which they had failed to supply. Additionally the First Appellate Court came to the conclusion that the Seller Company had failed to discharge their burden by omission of proof that the machines supplied were in fact the same as had been inspected and shown to Dr. Mujtaba. Aggrieved by such appellate judgment and decree the Seller Company has filed II Appeal No. 204 of 1966.

4. An application was made by the Seller Company for transfer of the suit filed by the Purchaser Association in the Court of Civil Judge at Mirpur khas, to be tried in the High Court on the Original Side alongwith Suit No. 154 of 1963. By an order dated 25-5-1964, Qadeeruddin Ahmad, J. dismissed the application for transfer of the suit pending in the Court of Civil Judge at Mirpurkbas but ordered stay of proceedings in Suit No. 154 of 1963 which was pending before the High Court on the Original Side. This order was passed presumably on the ground that the suit pending in the Court at Mirpurkhas was prior in point of time. Again on 17-3-1969 the Seller Company made an application for early hearing of the suit on the ground that the cross-suit pending before the Civil Judge, Mirpurkhas had teen dismissed but in the appeal the District Judge had reversed the decree and for such reason II Appeal No. 204 of 1966 had been filed in this Court and the same was ripe for hearing. On 14-4-1969 it was ordered that the case be fixed in the month following. The case was fixed before the learned Single Judge and on the defendant, viz. the Purchaser Association being called absent, Ahmad Shafi the representative of the Seller Company was examined ex parte and the suit was decreed. An application was filed to set aside the ex parte decree and on 19-2-1971 it was brought to the notice of a learned Single Judge of this Court that the earlier order of stay in the suit was still in operation when the suit was decreed and further that the learned Single Judge who had decreed the suit ex parte was not informed of the earlier decree passed by the District Court at Mirpurkhas. Execution was stayed but in the meantime the present Letters Patent Appeal had come to be filed.

5. The issues framed by the Civil Judge, Mirpurkhas have already been reproduced above. The most pertinent issues are Nos. 3 and 5, namely, whether the contract of sale can be termed to be one by inspection and approval or in the alternative what were the terms of contract between the parties. The evidence on this issue had been tendered by Dr. Drago who eared as a witness for the Purchaser Association and Ahmed Shafi who appeared as a witness on behalf of the Seller Company. The judgment of First Appellate Court has taken into consideration the full evidence of both the parties and the conclusion is that the Seller Company had agreed to supply brand new up-to-date and latest model equipment& to the Purchaser Association. After coming to this conclusion the learned District Judge took notice of the fact that although D. Mujtaba had been shown some machines by the Seller Company he had not been examined to prove that the machines delivered were according to the description detailed in the documents whereby the machines were offered for sale to the Purchaser Association. This offer is in writing and paragraph 2 of the letter containing the offer reads as follows:- "

2. That the machines are new and in perfect condition. Both of the machines will be installed by us at your premises and will be put into working condition by our engineer." By a resolution of the Executive Committee of Purchaser Association dated 29-3-1960 the offer was accepted. Dr. Drago in his evidence has clearly stated that the machines were old and, used over a number of years, meaning thereby that the machines were not new. The Seller Company by a letter dated 18-7-1960 informed the Purchaser Association that the machines were brand new, up-to-date and complete in all respects. Such letter would clearly show that the Seller Company had agreed to sell band new and up-to-date machines, meaning thereby as the latest model machines. It is therefore, not difficult to say that the conclusion is inescapable that the Seller Company had agreed to sell brand new machines of the latest model. Ahmed Shafi, the Secretary of the Seller Company was the only witness produced by them in regard to the trans action. In his examination-in-chief he stated that the machines had been approved by Dr. Mujtaba and the machines supplied were the same. He, how ever, did not state that the machines were new or of the latest model. In cross examination he went on to deny the condition of the contract that the machines were to be brand new and complete. In the next breath he stated again that the machines approved by Dr. Mujtaba were new. He was asked if the Seller Company was in possession of documents to show that the machines were brand new and he answered the question in the affirmative but the Seller Company did not produce any documents to show the date of purchase of these machines. In fact Ahmed Shafi also went on to state that he did not know as to when these machines had been imported from Holland. On such state of evidence the learned District Judge was completely right in holding that the contract contemplated supply of new machines and the Seller Company had failed to prove that the machines were new and further that even if Dr. Mujtaba had approved these machines the Seller Company had not examined him in support of their case.

6. The question that arises in this case is whether the sale was one of goods specified and approved or one by description. In that regard the offer to sell and the resolution of the Purchaser Association is very clear that the machines to be sold were to be brand new. The Purchaser Association gave an order for new machines and the machines were not accepted by reason of their having been used over a number of years and for such reason those do not correspond to the description of new machines within the meaning of the contract. The term "new machines" was expressed as a term of contract and these words were used by the Seller Company as part of the description of goods rather than as mere collateral warranty. The Purchaser Association bad, by virtue of section 41 of the Sale of Goods Act, a right to examine the machines for the purpose of ascertaining whether those were in conformity with the contract. Again under section 15 of Sale of Goods Act in contracts for sale by description there is always an implied condition that the goods shall correspond to the description. To such extent the learned District Judge was right in holding that the goods did not correspond to the description stated in the contract. The conflict in the evidence of Abmad Shafi, the witness of the Seller Company also clearly shows that the machines supplied were not new.

7. Mr. Zia Quresbi, the learned Advocate for the Seller Company has attempted to set up an argument in regard to the machines being new and corresponding to the description stated in the contract. We are afraid this Court would not easily assume jurisdiction to entertain a II Appeal on the ground of erroneous findings of fact, however, gross and inexcusable the error may seem to be, unless the error is one of procedure provided by law which has resulted in an error or defect in the decision of the case on merits. The Federal Court in the case of Abdul Majeed and others v. Khalil (P L D 1955 F C 38) was concerned that a fallacy in appraising the evidence on facts and the Court on reference to the cases of Nadir Shah v. Lal Shah and others (P L D 1954 Lab. 447), Durgah Choudhrani v. Jawahar Singh Choudhary (1 L R 18 Cal. 23) and Mohammad Bux (11 Lab. 199) stated the point as follows :- "With great respect, I am unable to agree with this view, because a fallacy in appraising the evidence as to a fact, unless it amounts to a material mistaken assumption, is merely an error in coming to' a finding as to that fact, and such error has never been held to be an error of law justifying interference in second appeal." In such context we are no less impressed by the reasoning of the learned District Judge for arriving at his conclusion on taking note of the fact that in spite of Abmad Sbafi, the witness of the Seller Company stating that he had documents in regard in the purchase of the machines in question he had not produced the said documents. If the machines had been new the Seller Company should have found no difficulty in producing the documents relating to their model and import and for their failure to produce the same presump tion has to be drawn by reason of section 114, illustration (g) of the Evidence a Act to the effect that if a party fails to produce the best evidence in hi possession it would be presumed that on production of such evidence the interest of the party would be adversely affected. We are, therefore, not inclined to disturb the findings of fact recorded by the First Appellate Court. In such view of the matter we uphold the judgment of the learned District Judge and decline to interfere with the decree passed by him. As a conse quence Second Appeal No. 204/66 is dismissed with costs.

8. We now turn to Letters Patent Appeal No. 130/70 which has been filed to challenge the ex parte decree passed by the learned Single Judge on the Original Side of this High Court. Since the factual aspects of this case are identical with those in the connected II Appeal No. 204/66 we do not feel called upon to enter into that question again. Mr. K. A. Ghani appearing for the Purchaser Association has urged that this decree has been obtained by concealment of material facts as also by playing a fraud on the Court. He has contended that the Seller Company was aware of the cross-suit filed by the Purchaser Association in the civil Court at Mirpurkhas and they had in fact even filed II Appeal before this Court to challenge the decree. Ahmad Shafi was the only witness examined for furnishing ex parte proof in support of the case of the Seller Company. He was examined by the learned Single Judge and we find that he bad not even disclosed the cross-suit in the civil Court at Mirpurkhas or the result of such suit. The order of the learned Single Judge also makes no reference whatsoever, to this connected litigation. There is a further fact that needs to be mentioned. The Purchaser Association had filed written statement on 7-2-1964 but in para. 7 of the judgment of the learned Single Judge it is stated that: "Although the written statement was filed today when the case was fixed for final hearing none appeared for the defendant". It seems that the written statement was not on the file, but was lying elsewhere. Perhaps it was sent to the Court on final date of hearing. Even this fact about the filing of earlier written statement was not brought to the notice of the learned Single Judge.

9. For such concealment of facts the question then arises is whether the decree passed by the learned Single Judge should be maintained. We are of the view that the result of II Appeal No. 2C4/66 directly affects the decree passed by the learned Single Judge. We are strongly of the view that this decree had been obtained by fraud and concealment of facts. In that context our attention has been drawn to the Division Bench judgment in the case of Grindlays Batik Limited v. Murree Brewery Company (P L D 1954 Lab. 745) Muhammad Munir, C. J. (as he then was) in the judgment dealt with the situation in which a Single Judge had recalled an order of a Division Bench on the ground that the same had been obtained by fraud. The learned Chief Justice proceeded to observe as follows :- "Since fraud vitiates all proceedings, the lower Court in a suit properly constituted is certainly competent to set aside a judgment of a higher tribunal if it be proved that such judgment was obtained by fraud, it must a fcrtiori follow that a Judge of this Court sitting singly has jurisdiction to pass such order provided the issue whether the judgment was obtained by fraud properly comes up before him." In the case of Mil. Bhano and another v. Mian M. Sayeed (1969 S C M R 299) the Supreme Court was dealing with the case of cancellation of allotment in respect of the land that had been obtained by fraud or misrepresentation, Hamoodur Rehman, C. J. while enunciating the principles observed as follows:- , "Fraud vitiates everything and a statement or allotment obtained by practising fraud is not an allotment or settlement at all within the eye of law. It would be startling proposition 'to suggest that one can, with impunity, reap the advantage of his own fraud'." The principle which is deducible is that if a benefit in judicial proceeding obtained by practising fraud on the Court, no right comes into existence and the Court not only has inherent power to set aside the order based on such fraud but is under a duty to do so.

10. Mr. Justice Noorul Arifin who was dealing with the application for setting aside the decree passed an order on 19-2-1971, to the following effect: "Mr. K. A. Sabir proposes to file his personal affidavit as to whether he brought to the notice of two learned Judges of this Court that there was an order of stay in the suit either when the suit was ordered to be heard speedily or when the suit was decreed ex parte and that whether he further brought to the notice of the learned Judges that the First Appeal in the District Court bad been decided in favour of the defen dants in this suit and that the plaintiff's second Appeal is still pending in this Court." Mr. K. A. Sabir filed an affidavit on 24-2-1971 and we have examined the same. We find that he has not stated in the affidavit that he brought the fact of the earlier decision in cross-case filed by the Purchaser Association to the notice of the learned Single Judge who decreed the suit ex parte. He has not even stated that the order of Qadeeruddin, J., staying the proceedings in this suit bad been vacated or varied. We are, therefore, clearly of the view that the ex parte decree was obtained by the Purchaser Company by wilful conceal ment of material facts touching merits of the case and such conduct gives rise to an inference of decree having been obtained by fraud.

11. In the result we set aside the ex parte decree passed by the learned Single Judge in Suit No. 154 /63 which is the subject-matter of Letters Patent Appeal No. 139/70. The suit is dismissed with costs.

12. In the result II Appeal No. 204/66 is dismissed with costs and L. P. A. No. 139/70 is allowed with costs. M. Y. M. Order accordingly