1986 PLP 1306 (MLD)

Mr. Muneer A. Malik, Advocate holding brief for Mr Rasheed A. Rizvi, Advocate for the ‑respondent requested for adjournment on the ground that Mr. Rasheed A.Rizvi was at Islamabad. But as I had no other work, I decided to hear and dispose of the Revision. The facts of the case in this revision are that the respondent joined the applicant under an agreement, dated 24‑10‑1976. He was paid a nominal salary by the applicant and. was entitled to a commission on the sale of goods of .the applicant Company. At the time of joining the respondent had furnished a security which was to lie with the applicant and earn interest during the period of service of the respondent with the applicant. The amount of security deposited at the time of joining the service was a sum of Rs.5,000 which gradually swell to a sum of Rs.12,255 by the time the suit came to be filed by the respondent against the applicant. The contract contained various clauses, relevant among them are clauses '1(D) and 1(E)' which run as under:‑‑ "(D) To give such guarantees and or such cash deposits and/or securities as shall be deemed satisfactory to the Company and as specified in the Standing Instructions for the faithful performance of the terms of this agreement and all such guarantees cash deposits and/or securities shall be held by the Company as security for the faithful performance by the employee of the conditions on his part herein contained and if the company shall have any claim against the employee it shall be entitled to satisfy the same out of the said cash deposits and/or securities. (E) To reimburse the Company in cash at the list price or all machines and merchandise entrusted to the Employee for sale, if they cannot be accounted for or located." After about 15 years of service the respondent decided to leave the Company and applied to the applicant to be relieved of his service/ responsibilities. On 25‑3-1980 the Company accepted his resignation and he was relieved. After the resignation was accepted, the respondent became entitled to refund of the security deposit and the amount of interest that the original deposit had earned during the service which as stated above had become Rs.12,

255. The Company instead of refunding this amount raised a counter claim against the respondent in the sum of Rs.13,

735. This amount was, according to the applicant Company the price of the articles which remained to be accounted for by the respondent. It is also, admitted position in the case that the applicant Company in course of their business allow sales to various customers on hire‑purchase system. Each such transaction is covered by a guarantee from third party for the payment of the balance of the price remaining unpaid at the time of the sale of the goods to customers. It is also admitted position in the case that this amount of Rs.13,735 was the amount of unpaid sums by some of the hire‑purchasers to whom the goods were sold under the hire purchase system by the respondent system by the respondent on behalf of the applicant Company. It is still debit able whether the responsibility for these hire purchase sales was of the Manager or of the Assistant Manager, a position in which the respondent was serving. The respondent has stated that it was the responsibility of the Manager, who was the overall incharge of the office of the Company where these transactions took place. This position still remains debittable. Be that as it may, the fact remains that the amount relates to the sale made under the hire‑purchase system and should be recovered from the purchasers or the guarantor under the contracts of sales of the articles. On account of the failure of the applicant Company to refund .the security deposit, the respondent filed a suit being Suit No.893 of 1981 ih the Court of the learned XXVIII Civil Judge, Karachi for the recovery of Rs.12,

255. The applicant entered appearance and as stated above offered an explanation for non‑payment of the security deposit. According to them their claim was based on account of the respondent "not accounting for the goods to the value of Rs.13,735." As many as seven issues were framed by the learned Civil Judge. Parties led evidence. The plainitiff/respondent examined himself and produced the contract of the employment. Defendant/ Applicant also examined one Mr.Jamil Ahmed Khan and the evidence was closed by the parties. Issues Nos.2, 3 and 4 which are as follows are the main issues in the case:‑‑ . "(2) Had the plaintiff security deposit with the defendant Comany as security for the faithfull performance of the terms of his service agreement? (3) Has the plaintiff accounted for the amounts shown to his account in Annexure D‑3, to the written statement? (4) Whether the defendant‑Company is not justified in deducting the sum of Rs.13,255 from the plaintiff's account." On issue No.2 the finding on the basis of admitted position is in the affirmative. It is admitted position that the security was deposited and ‑ it stood for the proper and due performance of the obligations undertaken by the respondent to perform. In evidence there is nothing to show that the respondent had in any manner failed to perform hi B obligations under the contract exposing himself for forfeiture of the a6riiritv. 5o far as issues Nos.3 and 4 are concerned, they have been handled together by the learned Trial Court and the findings are that neither under cruse '1(D)' nor under clause '1(E)' the respondent would be liable for the balance remaining outstanding against the hire purchasers for the goods sold to them during the service period of the respondent. Mr. Jamil Ahmed Khan P.W. who has been examined on behalf of the applicant /defendant, has in his statement clearly admitted that the "suit amount is the money which is due against the hire purchasers sold by the plaintiff. It is a fact that the Company has issued notices to the hire purchasers to pay the amount due against them. It is a fact that the hire purchasers also executed surety for the transactions. It is not correct to suggest that the hire‑purchasers deposited the amount due against them." On this state of evidence and after taking into consideration this admission by the applicant's witness, the learned trial Judge held that the respondent could not be made liable for the outstanding amount remaining unpaid by the hire purchasers especially, when the applicant had already‑ issued notices to those hire‑purchasers and were contemplating action against them. The suit was, therefore decreed. Against this decree the applicant company filed an appeal which came to be heard by the learned VII Additional District Judge, Karachi. The learned Judge has thoroughly examined the effect of clauses '1(D) and 1(E)' in the agreement and has come to the same finding as arrived by the learned Trial Court. Few lines from this judgment may be quoted here. The learned Judge has held as under:‑ "It is the admission of the appellant in his deposition that the said amount is the money which is due against the hire‑purchaser sold by the plaintiff /respondent. It is a fact that the company has issued notices to the hire purchaser to pay the amount due against them: It is a fact that hire‑purchasers have executed surety. In view of clause E of the agreement the respondent can only be liable when the purchasers not accounted for or located. The admission of the appellant regarding issuance of notices to the purchasers gives weight to the case of the respondent that he has not to account for by the sales which were made through him." Mr. Kazim Hassan, learned counsel for the applicant, who seems to have laboriously prepared his brief, tried to' make out a case 'in favour of the applicant and raised the following two points during his arguments:‑‑ (1) The learned counsel contended that the employee/ respondent had failed to account for the goods entrusted to him and as such was liable to make good the losses suffered by the applicant. The learned counsel argues that the reference in the judgment that the respondent would be liable "only when the purchasers are not accounted for or located" is not correct and is not the proper evaluation of the terms of the agreement between the parties. But this contention is not well‑founded because if the whole judgment is read, it would be evident that by using the word 'purchasers' the learned Judge meant that the transactions relating to be goods are not properly brought out. to quote the lines from the judgment in the earlier part of para. 4 "employee is to reimburse the company in cash at the list price for all machines and merchandise entrusted to the employee for sale if they cannot be accounted for or located." This clearly explains that what the learned Judge meant was that the employee would only be liable if the shortage of the goods in his custody remains unexplained or unaccounted for. As discussed above, there is no such position in this case and as admitted by the witness for the applicant this claim of the applicant relate only to such contract for which the recovery has not yet been made. (2) The other contention was that the hire‑purchase notices were not produced by the respondent. /This contention also loses its force on account of clean and clear admission of the applicant's own witness Mr. Jamil Ahmed Khan that the claim of the appellant related to the hire, purchase contract and that "the Company has issued notices to hire purchasers to pay the amount due against them." When the Company has issued such notices it is futile to expect that the respondent should produce these notices.

7. The two judgments read carefully leave no room for doubt that in view of the admitted position that the security amount entrusted to the applicant had remained unpaid and the burden of proof to show a justification for its non‑payment was clearly on the applicant which' they have obviously failed to discharge. This revision has no merits and is therefore, dismissed with costs. A.A. Revision dismisses'