2020 PLP 1243 (CLC)

MUHAMMAD NAEEM ANWAR, J.

This civil revision under section 115, C.P.C has been preferred against the judgment and decree dated 21.04.2010 of learned Additional District Judge-V, Kohat, whereby appeal of the respondent was accepted, resultantly, suit of the plaintiff/respondent was decreed.

2. Octroi contract for the year, 1996-97, commencing from 16th of July, 1996 till 30th of June, 1997, was executed in between plaintiff/respondent and petitioner No.1, the Administrator Municipal Committee, Kohat, as then it was, for Rs.1,31,000,00/- with agreed stipulations as mentioned in the contract Exh.PW 1/4. As per clause 4 of the Contract, the respondent(contractor) was bound to deposit monthly installments on the last date of each month failing which he was required to be penalized at the rate of 1% per day, for late payment. But before imposing penalty, three days notice shall be served upon him for doing the needful and in case of failure penalty, as mentioned above, shall be imposed. According to the petitioners, the respondent (contractor) defaulted in the monthly installments, so, he was held liable to pay an amount of Rs.11,86,612/- to petitioners as penalty. The plaintiff / respondent filed a suit for declaration that nothing is outstanding against him, thus, the demand of the petitioners for the alleged penalty is wrong, against the fact and law, thus, ineffective upon him. Perpetual injunction was also sought that the petitioners/defendants be restrained from making coercive measure such as arrest of the plaintiff/respondent.

3. The petitioners/defendants put their appearance on summons and contested the suit by submitting written statement on various legal and factual objections.

4. The conflicting pleadings were resulted in the following issues as framed by the learned trial Court. ISSUES:-

1. Whether the plaintiff has got a cause of action?

2. Whether the suit is time barred?

3. Whether this court has got jurisdiction in the matter?

4. Whether the suit is incompetent in its present form?

5. Whether the plaintiff is stopped to sue?

6. Whether the suit is properly valued for the purpose of court fee?

7. Whether the plaintiff has paid the contract amount of Rs.1,31,00,000/- for the year 1996-97 to the defendants and nothing is outstanding against the plaintiff?

8. Whether defendant No.7 has issued warrant of arrest against the plaintiff for fine of Rs.11,86,612/- at the instance of defendants Nos. 1 to 6 which is ineffective upon the rights of plaintiff and is liable to be cancelled?

9. Whether the suit is based on mala fide, therefore, liable to be dismissed on cost?

10. Whether the plaintiff is entitled to the decree as prayed for?

11. Relief.

5. Both the parties produced their evidence and after conclusion of the trial, the learned trial Court through its judgment and decree dismissed the suit. The plaintiff has preferred an appeal before the appellate Court, which was succeeded and, resultantly, decree was granted in his favour by the learned appellate Court on 21.04.2010. The petitioners being aggrieved approached this Court through instant revision petition, which was admitted for full hearing by this court on 25.06.2010. Record of the case reveals that respondent No.1/plaintiff was served personally on 15.04.2019, while rest of the respondents were proceeded against ex parte by the office of Deputy Registrar of this Court on 18.04.2019. Once again, notice was issued for hearing of this petition to respondent No.1. Notice bearing No. 252747 was served upon him on 04.01.2020 but he did not turn up, hence, proceeded against ex parte.

6. Arguments of learned counsel for the petitioners heard and record perused.

7. It appears from the record that octroi contract was awarded to respondent No.1 for Rs. 1,31,00,000/-( rupees one crore and thirty one lac) for eleven (11) months, since July, 16,1996 till June 30, 1997 and in that respect certain terms and conditions were settled in between them through Exh.PW 1/4. Both of them while accepting the stipulations of the contract have signed the same. It was not disputed that the contractor (respondent No.1) paid an earnest amount of Rs.500000/- for the period w.e.f 16.07.1996 to 11.08.1996, amounting to Rs.1142025/- and an amount of Rs. 322975/- to the petitioner No.1 on 04.08.1996, 11.08.1996 and 13.08.1996 respectively. This total payment, as per clause No.3 of the contract, was made to the tune of Rs.1965000/-. Thereafter, the monthly payment with its detail was made as per Exh.PW 1/3, which is reproduced as under:- DETAIL OF LATE PAYMENT OF MONTHLY INSTALLMENT Payment month Due date of payment Date of deposit Amount Nos of days delayed Penalty @ 1% Total recovery 7/96 31.7.96 13.8.96 Rs.595455/- 13 Rs.5955/- Rs.77409/- 9/96 30.9.96 8.10.96 Rs.190910/- 8 Rs.1909/- Rs.15273/- 10/96 31.10.96 4.11.96 Rs.390910/- 4 Rs.3909/- Rs.15636/- 11/96 30.11.96 5.12.96 Rs.400000/- 5 Rs.4000/- Rs.20,000/- Do 30.11.96 9.12.96 Rs.290910/- 9 Rs.2909/- Rs.26182/- 12/96 31.12.96 4.1.97 Rs.200000/- 4 Rs.2000/- Rs.8000/- Do Do 7.1.97 Rs.257910/- 7 Rs.2579/- Rs.18053-/ 1/97 31.1.97 15.2.97 Rs.357910/- 15 Rs.3579/- Rs.53687/- 2/97 28.2.97 8.3.97. Rs.300000/- 8 Rs.3000/- Rs.24000/- Total Rs.258240/- Similarly, as per the petitioners, due to default on the part of respondent No.1 (contractor) schedule penalty in two categories were shown as under:- PENALTY RECOVERABLE DUE TO LATE PAYMENT OF EDUCATION CESS Payment month Due date of payment Date of deposit Amount Nos of days delayed Penalty @ 1% Total recovery 8/96 31.8.96 22.9.96 Rs.128800/- 22 Rs.1288/- Rs.28336/- 9/96 30.9.96 10.11.96 Rs.238181/- 40 Rs.2382/- Rs.95280/- 10/96 31.10.96 20.11.96 Rs.138181/- 20 Rs.2382/- Rs.47640/- 11/96 30.11.96 16.1.97 Rs.238181/- 47 Rs.2382/- Rs.111954/- 12/96 31.12.96 26.1.97 Rs.238181/- 26 Rs.2382/- Rs.61932/- 1/97 31.1.97 20.3.97 Rs.238181/- 48 Rs.2382/- Rs.114336/- 2/97 28.2.97 24.4.97 Rs.238181/- 55 Rs.2382/- Rs.131010/- 3/97 31.3.97 12.5.97 Rs. 238181/- 42 Rs.2382/- Rs.100044/- 4/97 30.4.97 16.6.97 Rs. 119099/- 47 Rs.1191/- Rs.55977/- Total: Rs.746509/- And PENALTY RECOVERABLE DUE TO LATE PAYMENT OF STREET LIGHT / CONSERVACY INSTALMENTS. Payment month Due date of payment Date of deposit Amount Nos of days delayed Penalty @ 1% Total recovery 8/96 31.8.96 5.9.96 Rs.64390/- 5 Rs.644/- Rs.3220/- 9/96 30.9.96 16.10.96 Rs.119090-/ 16 Rs.1191-/ Rs.19056/- 10/96 31.10.96 11.11.96 Rs.119090/- 11 Rs.1191/- Rs.13101/- 11/96 30.11.96 15.12.97 Rs.119090/- 15 Rs.1191/- Rs.17865/- 12/96 31.12.96 11.1.97 Rs. 119090/- 11 Rs.1191/- Rs.13101/- 1/97 31.1.97 8.3.97 Rs.119090/- 36 Rs.1191/- Rs.42876/- 2/97 28.2.97 17.3.97 Rs.119090/- 17 Rs.1191/- Rs.20247/- 3/97 31.3.97 16.4.97 Rs.119090/- 16 Rs.1191/- Rs.19056/- 4/97 30.4.97 21.5.97. Rs. 119090/- 21 Rs.1191/- Rs.25011/- 5/97 31.5.97 14.6.97 Rs.59535/- 14 Rs.595/- Rs.8330/- Total: Rs.181,863/- Thus, respondent No.1 was held defaulter and while invoking clause 4 of Exh.PW 1/4, total amount of Rs. 11, 86,612/- was held outstanding against him.

8. Learned counsel while referring to Exh.PW 1/1 contended that Resident Audit Officer, Municipal Committee, Kohat, has calculated the amount of Rs. 1186,612/- being penalty due to default of monthly installments at the rate of 1 % per day, thus, as the term of Exh.PW 1/4 being accepted by the contractor, could not be interpreted otherwise than the language of contract. For determining the respective rights and liabilities of both the parties, i.e., the Contractor (plaintiff) and the petitioners, Exh.PW 1/4 is of worth perusal, wherein it was agreed in between the parties to the contract that :- "total amount shall be paid by the contractor in eleven equal installments, first installment shall be half which shall become due at the end of July, whereas for the rest of 10 months, the installment of each month shall be paid on the last day of each month. Last installment of May, 1997 shall be paid on the last day of May. In case of failure of the installment, the contractor shall be served with a notice of three days and if the amount remained still unpaid, the penalty at the rate of 1 % per day shall be imposed and the contract shall be cancelled" Now for the purpose of imposition of penalty the entire clause shall be read in toto and a part thereof could not be interpreted in isolation from the rest of the contents of said clause. Exh.PW 1/1 reveals that the default started in payment of installment from the month of July, where the due date of payment was 31.07.1996, whereas the amount was paid on 13.08.1996, after thirteen day, and this practice continued till February, 1997, where the due date for the payment was 28.02.1997 and the amount was deposited on 08.03.1997. So, for invoking the penal clause, the respondent/plaintiff should have been served with a notice for payment within three days, when first ever default was made and the contract should have been cancelled for non-payment within three days notice, the petitioners never opted to invoke the penal clause as per agreed terms but they waited till the expiry of the contract and on the expiry of contract, when the entire contract amount i.e., Rs.1,30,00000/-was received they intended to start recovery by pressing into service the penal clause. When the petitioners kept mum in continuous default of respondent No.1 for his non-payment of the monthly installment within due time for considerable period of eight months and accepted the amount being deposited by respondent No.1 after due date, thus, the acquiescence on the part of the petitioners stopped them for pressing into service the penal clause and that too after the expiry of the contract period. Under the doctrine of estoppels, which according to the Concise Law Dictionary by PG Osborne:- "that a person who stands and keeps silence when he observes another person acting under a misapprehension or mistake, which by speaking he could have prevented by showing the true state of affairs, thus, an owner of goods who voluntarily allows another to treat them as his owner, without protest whereby a third person is induced to buy them bona fide, cannot recover them from that person. Similarly, if a stranger begins to build on land supposing it to be his own, and the real owner observing his mistake abstains from setting him right and leaves him to preserve in his error, equity will not afterwards allow the real owner to assert his title to the land". Thus the petitioners were stopped by their conduct from invoking the penal clause as per their own whims and wishes. It is pertinent to mention here that ordinarily the principle of estoppel is used as a shield and not as a sword, as it cannot create a cause of action but in the instant case the petitioners by invoking penal clause of contract demanded the amount for the default of respondent, which gave rise a cause of action, but the conduct of the petitioners in the aforementioned scenario stopped them from their demand as against the respondent, notwithstanding that he was plaintiff before the trial court. This is an exception from the general principle of estoppel.

9. Even otherwise for resolution of controversy, the agreed terms and conditions of Exh.PW 1/4 would require interpretation within well established and accepted principle of interpretation of an instrument as enunciated in case titled Liaqat Ali Khan v. Falak Sher reported in PLD 2014 SC 506 wherein it was held that:- "It is well accepted principle of interpretation of an instrument that for its proper comprehension and insight it is to be read as a whole and where its language is simple, clearly understandable and capable of no ambiguity, then the intention of the parties to such instrument is to be gathered from its contents alone without adverting to any other extraneous consideration and in normal course of it should have precedence over any other option". In the present case for invoking the penal clause three days notice was sine qua non and in absence of which no penalty could be imposed and the same could not be interpreted as per whims and whishes of either parties to the contract.

10. Similarly, the analogy of interpreting the contract has been decided by Sindh High Court in a case titled Al-Abdullah Construction (Pvt.) Ltd. v. WAPDA (2003 YLR 1535) wherein it was held that:- "

23. The language of a provision of contract has to be interpreted in a manner to gather the intent of the parties. But, at the same time, the eventualities which are not covered should also be read into it by examining the conduct of the parties. Any person who has failed to discharge its liability cannot seek benefit of a provision of a contract unless it is shown that he has discharged his obligations under the Contract. In the present case, it has been urged by Mr. Samiuddin Sami that since the plaintiff was not issued the completion certificate, therefore, their liability in terms of the insurance under clauses 20, 21 and Specifications-Technical Provisions Clause 4.02 continues irrespective of the fact that plaintiff have executed the required work." It must be kept in mind that whenever there is a written contract between the parties which was not disputed, in case of conflict the decision would be based on the agreed terms and conditions between them. While doing so court would be slow in impart oral evidence for decision on interpretation of terms of the agreement. In this respect wisdom is drawn from the case law reported in PLD 1970 Dacca 490.

11. As the petitioners have not given any notice to the respondent No.1 for making the payment of installments within three days from the first ever default, so, plaintiff/respondent No.1 could not be penalized.

12. Moreover, I have gone through the judgments recorded by the learned appellate court from all angles. He has attended to almost all aspects of the case and in the given circumstances, do not warrant interference by this court while exercising revisional jurisdiction.

13. For the reasons discussed above, the petition being without any substance is hereby dismissed with no order as to costs. ZC/91/P Revision dismissed.