P L D 1967 Karachi 624 (PLP)

(7) In my view, therefore, Art. 14 of the Limitation Act is‑indirectly applicable to this case, in the same sense in which the plaintiff indirectly seeks to get an act of the defendant set aside and the suit is clearly barred by time: See Gangu v. Maharaj Chand A I R 1934 Lah. 384 and Municipal Corporation v. Province of Sind A I R 1947 Sind

69. No Article of the Limitation Act from 57 to 64 applies to this case in terms. The suit is barred by time even if Act 65 applies to it. Issue No. 1 is, therefore, decided against the plaintiff. The appellants being aggrieved by this judgment have come up in this Letters Patent Appeal before us.

9. In support of the appeal Mr. Mansoorul Arfin, the learned counsel for the appellants, contended that the learned Single Judge fell into an error in applying Article 14 of the Limitation Act on the facts of the present case. He contended that no order was passed by the respondent and the appellants had not filed any suit for setting aside any order passed by them. The learned counsel contended that the appellants' case is very simple, namely, that they paid the amount in dispute on various dates as import duty and sales tax towards the various ‑items contained in Annexure A to the plaint. This amount was refundable to them after the Department was satisfied that the goods had left Pakistan and bad been transported to Afghanistan. It was argued by the learned counsel that the appellants had obtained these certificates from the Department which are Exhs. 6 to 30 and on their basis submitted claims to the Department for the refund of the amount between the 20th, December 1955 and the 3rd January 1956 under the provision of the Sea Customs Act. But the respondents, instead of paying them have withheld the said amount on the ground that they have appropriated it in lieu of their claim against one Muhammad Ramzan allegedly on the ground that the appellants had stood surety for them in respect of certain goods which in terms of the bond Exh. A had not been transported to Afghanistan and were liable to pay Rs. 1,26,400‑2‑

0. It was therefore contended by the learned counsel that in doing so the respondents bad not passed any order nor communicated it to the appellant and, therefore, it cannot be said that there is any order in .the way of the appellants before a decree for the said amount is passed in their favour.

10. Mr. Mansoorul Arfin further contended that the alleged action of the respondent is illegal and ultra vires and in such circumstances, even if any order was passed by them, it was not necessary for the appellants to file any suit for the setting aside of any order before claiming a decree for the amount in dispute. In support of his contention the learned counsel has placed reliance on two decisions of the Privy Council reported in Lamanrao Madhavrao Jahagirdar v. Shriniwas Lingo Nadgir and others (AIR1927PC217) and Secretary of State v. Pardshram Madhavrao (AIR1934PC108). It was held in these cases that if the order of the Government is illegal, the plaintiff is not bound to file a suit to set it aside but is entitled to wait until it is enforced against him and the attempt to enforce it against him gives him a good cause of action. The learned counsel contended that for the first time the respondents informed the appellants by their letter dated 27th February 1959, Exh. 79, that they had withheld the draw back of Rs. 1,26,932‑3‑0 and freezed it because the appellants had not fulfilled their promise under the bond, Exh. A. It was further urged by the learned counsel that if certain money is due from the Government which it refuses to pay on the ground that it had some other claims against a party Article 14 would not apply to such cases because any such action of the Government could not be said to finally decide the right of the plaintiff. In support of this contention reliance was placed on decisions of the Bombay and Sind Courts in Dolatsing Hamirsing v. Joravarsing Naransing (A I R 1939 Bom, 473) and Manager, Encumbered Estates in Sind Hyderabad v. Kanyalal Bharomal Wadhwa and others (A I R 1948 Sind 14) respectively. In the last mentioned case it was held by a Division Bench of the Sind Court that the preparation and submission of a liquidation scheme under section 17 (1), Sind Encumbered States Act is a statutory duty and cannot be regarded as an act or order within the meaning of Article

14. Where, therefore, the Manager, Encumbered Estates, includes a certain immovable property in the estate of the estate owner as belonging to him and as mortgaged by conditional sale, a suit by the alleged conditional vendee to establish the nature or extent of his right to the property is not governed by Article 14.

11. In reply Mr. Muhammad Safdar, the learned counsel for the respondent, very frankly conceded that he was not in a position to support the judgment of the learned single Judge in which he has applied Article 14 of the Limitation Act to the present case He conceded that no order was passed by the respondent Government and, therefore, no question of setting aside any such order arises. On the other hand, his contention is that the proper Article to be applied in the present case is Article 62 of the Limitation Act or Article 65 of the Limita tion Act. Before proceeding to consider the contention of the learned counsel for the respondent, it may be mentioned that in our opinion too Article 14 of the Limitation Act is not applicable to the facts of the present case. The respondent has not produced. any order on the record which it was necessary for the appellants to set it aside before filing the suit out of which the present appeal has arisen. Article 14 of the Limitation Act is only applicable to such cases where a valid order is passed by a competent authority. In the present case the learned single Judge has not pointed out the power under which the respondent Government could pass any order by freezing the amount in dispute. In fact the statement of Mr. Abbas Hussain, the witness produced on behalf of the respondents, clearly shows that it was not done under any statutory power but was taken on the basis of a contract which was entered into between the parties. In our opinion such an action cannot be described as an order passed by a statutory authority under a statutory provision of law so as to fall within the four corners of Article 14 of the Limitation Act. We would, therefore, hold that the learned single Judge was not justified in applying Article 14 of the Limitation Act to the facts of the present case.

12. Coming now to the question which Article of the Limitation Act applies to the present case it will be noticed that the learned counsel for the appellants has contended that there being no specific Article applicable to the facts of the present case, it would be governed by Article 120 of the Limitation Act which is a residuary Act. On the other hand, Mr. Muhammad Safdar, the learned counsel for the respon dent, has contended that Article 62 or Article 65 of the Limitation Act would apply. In support of his contention that Article 62 of the Limitation Act applies to the facts of the present case Mr. Muhammad Safdar, the learned counsel appearing for the respondent contended that the money in dispute belonged to the appellants and it was received by the respondent Government for his use. It was therefore a case which would be governed by Article 62 of Limitation Act. In support of his contention be has placed reliance on a decision of the Supreme Court of Pakistan Muhammad Akbar Khan v. Province of West Pakistan (PLD1961 S C 17). It was held by their Lordships in that case that the essence of a cause of action for a suit con templated under Article 62, Limitation Act, is that money which, in justice and equity, belongs to the plaintiff, is received by the defendant, under circumstances which render the receipt by him a receipt for the use of the plaintiff. In that case certain amounts were received by the Government from a party on account of proceeds of the sale of the plaintiff's stock, and the excess payment made by him to the defendant on account of licence fees and their Lordships held on the facts of that case that the moneys in dispute which were received by the defendant could only have been for the plaintiff's use; and the mere fact that it was intended to adjust these items towards sums alleged to be due from the plaintiff to the defendant would not deprive their receipt of the character envisaged by Article

62. In this connection their Lordships made the following pertinent observation : "This consideration becomes reinforced when it is remembered that as a matter of fact, no licence fees were payable to the defendant at all in view of the final decision of the High Court, apart from whatever might have been payable on the principle of quantum meruit." The essential conditions, therefore, for applying Article 6 are as under:‑ (l) the suit must be for money receipt by the defendant; (2) the money must in justice and equity belong to the defendant at the time of such receipt; and (3) the circumstances under which the money is received by the defendant must be such that in the eye of law the receipt is by the defendant for the use of the plaintiff. These principles were recognised by the Sind Court in Madhavdas Parmanand v. Jan Mahomed Ghulam Hyder (A I R 1942 Sind 37). In that case a Bench of the Sind Chief Court observed as under:‑ "Money paid as consideration or part consideration in a contract of sale is not money paid for the use of the payer, except perhaps when the contract is of such a natvx5 that it is void in law ab initio. Hence, Article 62 does not apply to a suit for the refund of such consideration. The test for the applicability of Article 62 is whether, when the money was paid, it was recoverable immediately by the plaintiff." In an Allahabad case in which the claim of the plaintiff was for the refund of octroi legally taken 5y the Municipality but wrongfully refused to be returned it was held by a Division l3cnch of the Allahabad High Court that it was governed by Article 120 of the Limitation Act and not by Article

62. In this connection it was observed as under: "If the respondent had alleged that the Board was wrong in demanding and taking octroi in the first instance, the suit would have been governed by Article 62, Schedule 1, Limitation Act: See Rajputana Malwa Railway Co‑operative Stores, Ltd. v. .4jinere Munietpal Bard. But the appellant does not seem to allege that the Board was wrong in taking octroi in the first instance. He says that the Board was wrong in refusing a refund and in para. 6 of the plaint he gives the date of the refusal as the date on which the cause of action arose. The decisions of their Lordships of the Privy Council in Gurudas Pyne v. Ram Narain Sahu and Hanuman Kamat v. Hanuman Mandur and other cases decided by Courts in India, seem to lay down that Article 62 applies only when the money at the time of receipt can be said to have been received by the defendant for the plaintiff's use." It was, therefore, held that the demand of octroi being rightful and the refusal to refund being wrongful Article 6 2 was not applicable to the facts of that case.

13. It is in the light of the above discussion that it is for consideration whether on the facts of the present case Article 62 can be applied. In other words, whether it can be said that when the amounts in dispute were received by the respondents towards import duty and sales tax it can be said that they were received for the use of the appellants. In order to appreciate this point it will be useful to refer here that by Notification dated 12th June 1951, published in the Gazette of Pakistan, Extraordinary, toe Central Government in exercise of its powers conferred by subsection 1 of section 3 of the Imports and Exports Control Act, 1950 prohibiting the import o goods by sea, land or air from any country outside Pakistan of any goods of the description specified in the Schedule annexed thereto excep ted certain items mentioned therein. Under item Nos. (iv) and (vi) any goods manifested for a country outside Pakistan which on import into Pakistan are bonded for re‑export to that country and any goods imported for transmission across Pakistan by land to any country outside Pakistan were exempted. It is not disputed that the goods in dispute for which the goods imported by the appellant were intended to be re‑exported to Afghanistan. In such cases it is the duty of the importer or his agent to pay import duty. and sales tax and they are liable to be refunded under section 43 of the Sea Customs Act. According to section 43 of the Sea Customs Act, the refund of duty paid on import of goods from foreign countries at their customs port to a foreign country is treated as a draw back. The underlying idea behind it is that if the goods have not been used in the country they are entitled to refund of duty on export. Section 43 of the Sea Custom Act provides as under:‑‑ "

43. When any goods, having been charged with import duty at one customs‑port and thence exported to another, are re‑exported by sea as aforesaid, drawback shall be allowed on such goods as if they had been so re‑exported from the former port: Provided that, in every such case, the goods, be identified to the satisfaction of the officer in charge of the custom‑house at the port of final exportation, and that such final exportation be made within 3 years from the date on which they were first imported into the Provinces and the Capital of the Federation." Then section 51 lays down the time within which a claim of draw back is to be made and also provides the time when payment could be made. Section 52 requires a declaration by parties claiming drawback. These provisions are reproduced below : "Section 51.‑No drawback shall be allowed. unless the claim to receive such drawback be made and established at the time of re‑export. No such payment of drawback shall be made until the vessel carrying the goods has put out to sea, or unless payment be demanded within six months from the date of entry for shipment. Section

52. Every person, or his duly authorized agent, claiming drawback on any goods duly exported, shall make and subscribe a declaration that such goods have been actually exported, and have not been re‑landed and are not intended to be re‑landed at any customs‑port; and that such person was at the time of entry outwards and shipment, and continues to be, entitled to drawback thereon." These provisions are also applicable to cases covered by Land Customs Act as applied by section 9 of the Land Customs Act, 1924. Thus it will be noticed that under the above provisions of law it is the duty of the parties to import the goods for destination to a foreign country and to pay the import duty and sales tax on its importation into Pakistan; and such amounts are refundable to them after the goods have been re‑exported on establishing this fact to the satisfaction of the Customs Authorities. It is not disputed that the goods in dispute had been re‑exported and the necessary certificates referred to above had been obtained from the competent authority by the appellants.

15. It is, therefore, abundantly clear that when the appellant paid import duty and sales tax duty it was not received by the respondent for the use of the appellants. It was for the use of the Government subject to the condition that if the goods in dispute were re‑exported the appellants were entitled to the refund of the said amount. Besides it will be noticed that in the present case the respondent did not unlawfully recover or realise the import duty or sales tax. They were within their right to do so; and therefore, on the principle enunciated in the above mentioned decisions it cannot be said that the money which was received by the responded was received by them for the use of the plaintiff at the time when it was paid to the respondent. We are, therefore, of the view that on the facts of the present case Article 62 of the Limitation Act cannot be attracted.

16. It was next urged by Mr. Muhammad Safdar, the learned counsel for the respondents, that Article 65 of the Limitation Act is applicable to the facts of the present case. Article 65 of the Limitation Act reads as under: "

65. For compensation for Three years When the time breach of a promise to do in specified arrives anything at a specified time, or the contin or upon the happening of a gency happens." specified contingency. It applies in general to all contracts which are to be performed at a specified future date or on the happening of a specified contingency. Besides, it relates to suits which are for compen sation and for breach of promise to do anything at a specified time or on the happening of a specified contingency. None of these conditions exist in the present case. There is no contract between the parties providing for the performance of contract at any specified time or upon the happening of specified contingency. In Harakchand. Tarachand v. Sumatilal Chunilal (A I R 1932 Bom. 25), the scope of Article 65 was considered and it was held that Article 65 of the Limitation Act would not apply unless there is an agreement between the parties to pay the loss immediately on its being ascertained in the absence of any specified time or specified contingency it would not apply. In the present case there is no implied promise that the amount would be paid immediately after the certificates are obtained and the obligation to pay would not arise till the appellant made a demand for payment. Similarly it is not one of those cases in which the breach of promise to pay can be inferred on the hap pening of specified contingency. Thus the very ingredients of Article 65 are missing in the present case, and it can possibly have no application on the facts of the present case.

17. The learned counsel for the respondent was unable to refer any other specified Article in the Limitation Act which can be made applicable on the facts of the present case. There fore, the only other alternative is to rely on Article 120 of the Limitation Act. Under that Article the suit filed by the appellants is clearly within time. Even if it is assumed for the purpose of the decision of this case that the demand was made by the appellants in 1956, the suit was filed by them for the recovery of the amount in dispute in 1959 which was much within time. We would, therefore, hold that the appellants' claim in the suit under consideration was not barred by limitation and the suit should not have been dismissed.

17. We were inclined to decide the dispute between the parties on merits but it was brought to our notice by the learned counsel for the parties that the question whether the appellants partner Abdul Rehman signed bond Exh. A should be decided after obtaining the opinion of some independent expert. The learned counsel for the parties have agreed that the admitted signatures of Abdul Rehman may be sent for comparison with the disputed signature on the bond Exh. A to Malik Muhammad Ashraf, Forensic Expert, Forensic Section, Office of the Inspector General of Police, Lahore, for opinion, and that after the receipt of the opinion of the expert, the matter may be fixed for final bearing before the Judge on the original side dealing with original suits for deciding the dispute between the parties. We would, therefore, remand back the case for decision on merits to the Original side of this Court. The parties are directed to appear before the Additional Registrar, Original Side on 4th April 1967. Mr. Abdul Rehman, the partner of the appellant firm, would also appear before him on that date. In the presence of the parties his specimen signatures hill be obtained and those signatures along with the disputed signatures on the bond, Exh. A will be forwarded in sealed cover to the above handwriting expert for examination and report. The parties are directed to deposit Rs. 200 in equal share towards the preliminary expenses of the handwriting expert. It may be noted that the report of the handwriting expert will be brought on the record after he is examined as witness. The parties are directed either to summon him as a witness or to examine him on commission.

18. In the result, subject to the above remarks, the appeal is allowed. The costs of thus appeal will depend on the final result of the suit. K.B.A. Appeal accepted.