P L D 1968 Karachi 910 (PLP)

QADEERUDDIN AHMAD, J.‑This is a Letters Patent Appeal from an order of Mr. Justice Wahiduddin Ahmad, now the Chief Justice of West Pakistan, dated the 15th of December 1966 by which he issued 9 conditional orders of injunction against the defendants‑respondents subject to the plaintiffs appellants furnishing a bank guarantee in the amount of Rs. 25 lacs within six weeks of the date of the order. This guarantee was to be furnished for the benefit of defendant No. 1, that is to say, the Province of West Pakistan: The plaintiffs have come in appeal to question the condition of guarantee.

2. The facts which form the background of this appeal, according to Mr. Fakhruddin, are that the Karachi Flour Mills Union is a firm with three partners that are limited companies. They are the Karachi Steam Roller Flour Mills Co. Ltd., the Sind Flour Mills Co. Ltd., and the India Flour Mills Ltd. Wheat is supplied to them by the Government for milling it. They have to pay the price of the wheat, and to supply the products to ration depots. They pay for the wheat at such rate as may allow them to earn their milling charges as well as the cost of loss of weight which results from the milling processes. Mr. Fakhruddin said that the proportion of milling 1033 was about 1 % and milling charges recoverable by them were Rs. 124/6 per 100 maunds. The wheat was in this manner supplied by the Central Government up to the 25th of May 1952 when .its price was raised, and the milling charges were temporarily reduced to Rs. 92 per 100 maunds. The question of revising the price continued to engage the attention of the Government as well as the appellants, with the result that meetings and negotiations took place, but no result was achieved until the 1st ,of July 1962, on which date the present Constitu tion was promulgated. Under the new Constitution, food became a Provincial subject; therefore, according to Mr. Fakhruddin, the entire liability of the plaintiffs‑appellants towards the Central Government was transferred to the Provincial Government. Counsel said that a huge amount of money was claimed by the Central Government towards the price of the short fall in weight which was discovered on inspection by the Government officers. All the amount that was paid was credited to the account of the Provincial Government, but the transactions went on as before without the payment of the amount claimed towards ‑the short fall, from the tat of July 1962 far into 1966.

3. On the 26th of October 1966, the Provincial Government issued an order under the West Pakistan Government Dues Recovery Ordinance, 1962 that Rs. 63,76,588.44 be recovered from the Karachi Flour Mills Union, as land revenue, and forwarded it to the proper revenue authority of Karachi for taking action in that behalf.

4. The Karachi Flour Mills Union and its 3 partners filed a suit, bearing No. 296 of 1966, against the Province of West Pakistan, Pakistan, Deputy Collector, Food, Karachi Region, City Deputy Collector, Karachi and Pakistan Roller Flour Mills, Daryalal Street, Karachi to get six reliefs. They are a declaration that the above‑mentioned order of the Provincial Government as illegal, ultra vires and of no effect, an injunction restraining the Government of West Pakistan and the City Deputy Collector, Karachi from recovering the amount; and a decree for the recovery of Rs. 35,79,938.29 against the Provincial Government and/or the Government of Pakistan. In the alternative, they have prayed for accounts to be taken for the entire dealings which had taken place between the plaintiffs on the one hand and the Central and the Provincial Governments on the other hand. They have 'also prayed that the Government of Pakistan be ordered to furnish inspection notes and weight notes to them, and that accounts be ordered to be taken separately between the plaintiffs and the Central Government on the one hand and the plaintiffs and the Provincial Government on the other hand.

5. Mr. Fakhruddin said that an interlocutory application for injunction was filed along with the plaint, but it was heard I and decided on the 15th of December 1966, when the learned Single Judge gave an order of injunction, subject to the plaintiffs furnishing a bank guarantee in the amount of Rs. 25 lacs and allowed six weeks time for doing so.

6. Let us note here that according to the order of the learned Single Judge, Mr. Dingomal had on behalf of the plaintiffs, offered to give a bank guarantee in the amount of Rs. 15 lacs, but the learned Single Judge raised the amount to Rs. 25 lacs, obviously because the amount ordered to be recovered as land revenue was more than Rs. 63 lacs, and the total claim mentioned in the counter‑affidavit that was submitted in Court, was more than 98 lacs. The plaintiffs did not furnish the bank guarantee and did not wait for the time that was allowed to expire, but preferred the present Letters Patent Appeal on the 9th of January 1967. On the date on which the time expired, than is to say, the 26th of January 1967, they applied to the Single Judge for extension of time, who allowed one month's more time to them. They did, not furnish the' guarantee within the extended time, but made, a second application on the 25th of February 1967, and on the 6th of March 1967 obtained an extension of another month's time. During this second extension too, they did not furnish the security and applied on the 6th of April 1967 for a third extension of one month, but that application was rejected on the 24th of April 1967.

7. While they were thus making applications to the Single Judge for obtaining latitude from him without informing him that they had gone in Letters Patent Appeal, they applied to the Appellate Bench on the 12th of April 1967, for an order of injunction to restrain the Provincial Government from proceeding to recover mosey from them as arrears of land revenue. On the 9th of May 1967 the main appeal and the interlocutory application came up before the Appellate Bench which admitted this appeal to regular hearing, and made the following order on the interlocutory application: "Meanwhile, the process of recovery shall .be stayed. This order is subject to the condition that the plaintiffs are restrained from either transferring any of the property of the mill or the mill itself or encumbering it in any manner during the pendency of this appeal." It is obvious from the trend of the order that the attention of the Bench was not drawn to the fact that the plaintiffs appellants had been obtaining extensions of time from the Single Judge for furnishing security, and that their third application for extension had been rejected. Their entire emphasis before the Appellate Bench was on the contention that the amount ordered by the Provincial Government to be recovered from the plaintiffs‑appellants could not be said to be "dues" in terms of the West Pakistan Dues Recovery Ordinance,. 1962. It was contended that the learned Single Judge had arrived at the conclusion that there was a bona fade dispute between the parties as to the amount due and that the plaintiffs‑appellants had a counterclaim against the Central and the Provincial Governments. Having arrived at this conclusion, the Single Judge could ‑not legally treat the amount claimed by the Government as an amount "due" ; therefore he could not allow its recovery, not even subject to the condition of furnishing security. The Letters Patent Bench was impressed by these contentions and has observed as follows: "The contention which has been raised before us is that in view of what the learned Single Judge had found as regards the prima facie nature of the case the plaintiffs were entitled to an unconditional temporary injunction with regard to the use of the coercive process for the recovery of the: alleged dues." The appeal was accordingly admitted to regular hearing and recoveries were stopped by an ex parte order but this order of restraint was also conditional, It was subject to the condition that the plaintiffs‑appellants would neither transfer any property of the mills, nor the mills themselves nor encumber them in any manner during the pendency of the appeal. In other words recovery was allowed if this, condition was not fulfilled.

8. The above order of restraint came before us for con firmation on the 8th of August 1967, and we found that the questions involved in the decision of the interlocutory application as well as the main appeal were common therefore directed that the whole case be heard and decided together. We have accordingly heard counsel for the parties. Mr. Fakhruddin has addressed us in support of the appeal as a whole, and Mr. Dlngomal has given an explanation with reference to a remark made by us that the institution of this appeal was apparently ,concealed from the Single Judge when extensions of time were taken from him, and that the extensions granted by the Single Judge were apparently not brought to the notice of the Appellate Bench when an order of injunction was obtained from it. In this connection Mr. Dingomal referred to para. 20 of the application which he had made in appeal under Order XXXIX, rules 1 and 2 and section 151, C: P. C. and said that extensions were mentioned in it. The paragraph is as follows: "That the appellants were given six weeks time to furnish Bank Guarantee i.e. up to 21‑1‑1967. This period teas extended to 26‑1‑1967 and again extended till 6‑4‑1967. The appellants have found it impossible to furnish a Bank Guarantee. The appellants are ready to furnish the security of their three mills, which are worth over a crore of rupees." We pointed out to counsel that mentioning a fact in one out of two dozen paragraphs is not the same thing as bringing that fact to the notice of the Court. In order to accept the explanation we wanted an assurance that on the one hand the extensions were actually brought to the notice of the Appellate Bench, and on the other hand that the institution of the appeal was brought to the notice of the Single Judge, but counsel, who had appeared in both the proceedings made no attempt to give, that assurance. We feel that the Single Judge would have left it to the Appellate Bench to stay the conditional order of injunction rather than granted extensions himself, if he knew that an appeal had been preferred against his order to question its validity and that the Appellate Bench would have taken a different attitude, if it knew that the purpose of the appeal was merely to get one form of security substituted for another.

9. We enquired from Mr. Fakhruddin as to whether, according to him, it was legally wrong foe the Single Judge to attach a condition to the order of restraint or his objection .was merely to the form of the security. We explained to him that if the objection was to the form of security only, then we were not at all satisfied that interference should be made with it in Letters Patent Appeal, because it could amount to interference with the exercise of discretion of the Single Judge. Counsel replied that he questioned the legality of the order because it amounted to sanctioning the recovery of a mere "claim" to an amount as land revenue contrary to the terms of the West Pakistan Government Dues Recovery ordinance. 1962. In support of this contention, he laid emphasis on the word "Dues", which occurs in section 3 of the Ordinance, on two precedents of this Court and on one judgment of the Supreme Court. Section 3 of the West Pakistan Government Dues Recovery Ordinance, 1962, is as follows; "3. (1) Government may, by notification declare that any dues or class of dues recoverable by Government shall be recoverable from the defaulters as if such dues were arrears of land revenue. (2) On the publication of a notification under subsection (1) any such dues shall be recoverable under the Revenue Recoveries Act, 1890 (Act I of 1890) as arrears of land revenue." The Supreme Court has held in the case of Abdul Latif v. The Government of West Pakistan and others (P L D 1962 S C 384) with reference to section 4 of the Public Accountant Defaulter Act, 1850 that before the machinery set up by the Act for the realisation of arrears could be put into motion it was necessary to decide whether there was anything due or not, and that this must be done in. accordance with the canons of justice and fairplay. In other words, an amount merely conceived by the claimant to be due could not be recovered under the Act as arrears of land Revenue. In the case of Government of West Pakistan and others v. Abdul Majid and another (P L D 1963 Kar. 653) a Division Bench of this Court has held with reference to the Sind Foodgrains Nationalisation Board Act, 1951, that a statement of account filed by Government and disputed by the opposite‑party cannot be recovered as arrears of land revenue unless the claim of Government was determined and established but machinery is provided for this purpose in the Act. In the case of Province of West Pakistan v. Muhammad Ayub Khan (P L D 1957 Kar. 673) one of us has held that under West Pakistan Government Dues Recovery Ordinance, 1962, an amount claimed by the Government can be recovered as arrears of land revenue after the claim is converted into established dues. A claim ripens, according to the judgment, into "dues" if it is established in accordance with law and justice. In view of these judgments, we have to decide whether in this case the claim of the Government to recover Rs. 63,76,588.44 can be said to have been established in accordance whit law and justice.

10. Such a finding cannot be conclusively given in these proceedings because this appeal has been preferred from an order made in interlocutory proceedings whereas the main suit is yet to be decided. We can, therefore, only form a tentative view. In this connection we may mention two letters of the plaintiffs appellants dated 8‑6‑1966 and 29‑6‑1966, because they can be said to contain admissions of the dues. As to the counter‑claim of the plaintiffs‑appellants against the Central Government, there is prima facie no relevancy of it to the claim of the Provincial Government, which arose after the 1st of July 1961, or, in other words, the date of the merger of the Karachi Administration into the Provincial Government. These facts prima facie consti tute a complete answer to the objection of the plaintiffs‑appellants to the legality of recoveries under Government West Pakistan Dues Recovery Ordinance, 1962. Additionally, clause 7 of the agreement dated 2‑12‑1965, of the plaintiffs‑appellants with the Government of West Pakistan has specifically authorised the Government to recover "arrears" as land revenue. The order issued by the Government of West Pakistan to make recoveries is founded on admissions and on this clause. This may mean that legality of the recovery in terms of the said Ordinance is not a fundamental consideration. Lastly, we should point out that the appellants feel aggrieved owing to the condition of a bank guarantee because according to the appellants, such a condition could not be attached ; but this contention has been pressed in disregard of the relevant provision of law itself. The order was issued under Order XXXIX, rule 2, C. P. C. since rule 1 is not applicable sub‑rule (2) of rule 2 empowers the Court to grant the injunction‑

"On such terms as to . . . . . security or otherwise, as" it may think fit. It is therefore, not possible to say that the condition of a bank guarantee could not be attached.

11. Mr. Fakhruddin has laid emphasis on his contention that : claims admittedly cannot be enforced as dues, therefore, it is contrary to the essence of this law that a claim of the Government should be allowed to be enforced on the ground that the appellants are unable to furnish the required bank guarantee. The condition, according to him, is illegal because indirectly it permits the enforcement of claims as dues. In reality the appellants do not object to the imposition of a condition because they have been taking extensions of time to furnish the required bank guarantee, and had also offered the mills as security at the time of the admission of this appeal. That offer had been accepted by the Appellate Bench vide its order dated 9‑5‑1967. The Appellate Bench had itself seen the propriety of attaching a condition to its order of injunction for it has prohibited the transfer of the mills and their properties. The appellants do not object to it.

12. In the above view of the situation, the order of they learned Single Judge, in so far as it is a conditional order the injunction, cannot be said to be either illegal or improper. Essentially, the objection of the appellants themselves is to the form of the security, that has been ordered by the learned Single Judge, but no objection was taken to it before him. Mr. Dingomal has explained that he did not offer to furnish a bank guarantee in the amount of Rs. 15 lacs but when the learned Single Judge proposed that a bank guarantee would meet the situation, he suggested the amount of Rs. 15 lacs. He may be right, but this supports the observation of the Single Judge because counsel had anyhow not objected to furnishing a bank guarantee and suggested an amount which was increased by the learned Judge. The objections that have been raised appear to be after thoughts.

13. The offer of the mills as security is not satisfactory ; because they are admittedly encumbered and unsuited as a security from the point of view of marketability. Additionally, on our enquiry, Mr. Dingomal has given hi writing that their income is sufficient only to meet their expenditure. In other words, they do not yield any net income.

14. The appeal is accordingly dismissed with costs. A. E. Appeal dismissed.