P L D 1971 Karachi 305 (PLP)

7. The plaintiff has said in his evidence that although the said Scheme had not been placed on the defendant's Notice Board, it had been circulated amongst its staff. He has further said in his cross-examination that it had been shown to him by his Departmental Head, Mr. Alvi, and has then said "I distinctly remember that a copy of this Scheme with a general covering letter had come to me and I had marked on the Scheme "Seen", and I had also intimated my acceptance of it". However, as I have pointed out, both the defendant's witnesses have denied that the said Scheme was circulated amongst the defendant's staff and Mr. Ibadat Yar Khan submitted that their evidence was supported by the contents of Exh.

8. Exh. 8 is described as a confidential memorandum and is apparently addressed only to Departmental Heads. At the bottom of the memorandum, there is a footnote with the initials of the persons to whom its copies were sent, and it is not disputed before me that the initials are the initials of the defendant's Departmental Heads. Prima facie this would show that the said Scheme was not meant to be circulated amongst the defendant's staff. But its last para. states that the addressees could "communicate the Scheme to interested employees verbally". Therefore Mr. Alvi, who was the Departmental Head, was entitled, in the exercise of his discretion, to communicate it to the plaintiff. I shall not consider here the plaintiff's statement in his examination-in-chief, but he has said in his cross-examination that Mr. Alvi had shown him the said Scheme. In these circumstances, ay the defendant claims that its Departmental Head, namely. Mr. Alvi did not show the said Scheme to the plaintiff it should have examined Mr. Alvi. Its only explanation of its failure to do so is that Mr. Alvi had left its service after obtaining emoluments under the said scheme under threats from Mr. S. S. Jafri, then Industries Secretary to the Government of Pakistan. First of all the allegation of threats by Mr. Jafri is pure hearsay and is not fit to be treated as evidence. Secondly, merely because Mr. Alvi had left the defendant's employment it did not mean that it was relieved of its liability to examine him. But, as I have observed, the defendant has examined Mr. Hyder and Mr. D'Souza, therefore I have to consider their evidence. Mr, Hyder's evidence is not relevant at all because he admitted in his cross-examination that he had no personal knowledge of the facts of the case and his evidence in chief was based only on the examination of the relevant files which were not even produced before me. However, Mr. D'Souza claims to have taken over from Mr. Alvi in October 1967 and has said that he had remained the Head of the Department in which the plaintiff was working until long after his resignation. I have however not been impressed by the evidence of this witness, who was produced only after Mr. Hyder's admission in his cross-examination that he had no personal knowledge of the plaintiff's case Further, Mr. Hyder has not stated that Mr. D'Souza had become the plaintiff's Deparmental Head in October 1967 nor was the plaintiff cross-examined about it. Again, whilst the plaintiff said very clearly in his evidence that he did not hear from the defendant about his resignation until he received the defendant's letter Exh. 11 dated 4th January 1968, Mr. D'Souza claimed in his evidence that, as the Departmental Head, he had met the plaintiff in December 1967 in order to persuade him not to resign, and had explained to him that the said Scheme was within the sole discretion of the management and was not applicable to him, as he was not surplus. As the defendant did not cross-examine the plaintiff on the alleged meetings between him and Mr. D'Souza. I am not able to believe Mr. D'Souza's evidence. In the circumstances discussed, having seen the plaintiff, I fully believe his claim that he bad been shown a copy of the said Scheme by Mr. Alvi, and, that he had submitted his resignation after having examined it. But this finding can help him only if his acceptance of the said Scheme amounted to a contract, and I shall now examine this aspect of the case.

8. The first para. of the said Schema states that it is open only till the end of 1967, and, as the plaintiff had submitted his resignation on 1st December 1967 (Exh. 9), Mr. Shaikh Hyder argued that, as soon as the defendant had received this letter, it created a contract under which the defendant was compelled to accept the plaintiff's resignation and to pay him emoluments under the said Scheme. On the other hand, the defendant's case is that the said Scheme was introduced to eliminate surplus staff and even when an employee intimated his desire to resign, the question whether his resignation was to be accepted or not was within the sole discretion of the defendant's management, and Mr. Ibadat Yar Khan further submitted that, at the highest Exh. 8 was not, an offer but an invitation for an offer. In order to decide these arguments, it is necessary to refer briefly to the said Scheme.

9. As I have already pointed out, it is described as a "confidential memorandum", and the defendant has proved that it was circulated only amongst its Departmental Heads, 'with authority to those Heads to show it to employees. This, I think, is a circumstance which supports the defendant's case, because if it had been intended to confer a right on all the defendant's employees, there would have been no need whatever either to mark it confidential or to restrict its circulation. Any other view would make it a hazard for the Heads of a large organisation to communicate with one another. Turning now to the terms of the said Scheme, it states: "Revised Voluntary Resignation Scheme.

The Voluntary Resignation Scheme which was discontinued has been reintroduc ed on improved terms for all employees effective August 20, 1967 and will remain is effect till the end of the current year. Employees separating under the revised scheme will get the following benefits . . . . . . ." Then the document goes on to state the manner in which benefits to employees separating are to be calculated. Finally the last para. States: "You may communicate the scheme to interested employees verbally and advise the Personnel Department of their names so that their benefits can be worked out and a clear picture may be given to the employees concerned." Nowhere does the document states that employees were entitled to resign under it, and on the whole its contents are more consistent with the defendant's plea that it had, under it, the option of accepting or refusing the resignation of its employees. Additionally the heading of the document shows that it was a revised scheme and it further states that the old scheme was being re-introduced on improved terms. It is common ground between the learned counsel that the old scheme is set out in the memorandum dated the 5th August, 1966 (Exh. 7). This memorandum also contains a scheme for the resignation of the defendant's employees and further expressly states that all resigna tions were subject to review by the General Manager. Because Exh. 8 does not expressly state that the Management had reserved the right of accepting or not accepting the resignation of an employee, Mr. Shaikh Hyder submitted that this was an indication in support of his interpretation that the said scheme conferred a right on the defendant's employees. But, as I have pointed out, Exh. 8 clearly specifies that the said Scheme, has to be real with the earlier scheme, and it further states that it was only the old scheme which was re-introduced on improved terms, The words "improved terms" would refer to financial benefits, therefore on a proper interpreta tion of Exh. 8 it seems to me that the only alteration under the said scheme was about the pecuniary benefits and that at the other terms and conditions of the old Scheme continued. This means that the provision in this old scheme (Exh.7) that the acceptance of the resignation of any employee was in the sole discretion of the defendant's General Manager was automatically incorporated into and/or continued under the said Scheme. I therefore agree with Mr. lbadat Yar Khan that the said scheme was not an offer but only an invitation for an offer. 9-A. However, assuming for the sake of argument that the said Scheme was an offer I do not think this helps the plaintiff's case. Not every offer that 9s accepted becomes a binding contract under law, otherwise every host, who cancels an invitation for dinner which has been accepted by his guests, would be confronted by claims for damages for cancelling his offer for a dinner. In all systems of jurisprudence the law has drawn a A distinction between promises which are intended to create legal relations and promises which are not intended to create legal relations, and so the Contract Act has drawn a distinction between promises simplicitor and promises which are agreements enforce able at law. Subsection (b) of section 2 of the Contract Act prescribes that when a proposal made by a person to another person is accepted by that other person it becomes a promise. Subsec tions (c), (d) and (e) then state: (c) The person making the proposal is called the 'promisor', and the person accepting the proposal is called the 'Promisee'. (d) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.. (e) Every promise and every set of promises, forming the consideration for each other, is an agreement." Thus, it is only a promise supported by a consideration which' becomes a contract under our laws. Assuming therefore that the said scheme can be treated as a promise by the defendant to its employees, the plaintiff can succeed only if he can show that he had advanced consideration for the defendant's proposal. I therefore, invited Mr. Shaikh Hyder to show what consideration had been given by the plaintiff so as to bind the defendant. Learned counsel could only refer me to the plaintiff's letters of resignation to the defendant. But the plaintiff was always free to resign from his employment, according to law, and the only reason for submitting his resignation under the said scheme was the hope of obtaining the substantial emoluments under that scheme, therefore in submitting his letter of resignation he did not act to his detriment, and this letter cannot be treated as consideration on his part so as to bind the defendant. I may quote here a passage from Mulla's Commentary on the Contract Act, and as I prefer the lucid statement of the law (I say so with respect) by Sir Morris Gwyer, I shall quote a passage from the 7th Edition of Mulla at page 25: "The essence of consideration is that the promisee takes on himself some kind of burden, or `detriment, as the English authorities call it. Where the consideration is a present performance and not a promise . . . . the deteriment may consist either in actually parting with something of value, or in undertaking a legal responsibility, or in foregoing the exercise of a legal right. It is not common experience that the exercise of one's legal rights is always profitable; nevertheless that which the law deems worthy of its protection must be presumed to be of some value. Thus the performance which constitutes a consideration may be negative as well as positive, provided that the promisee's abstinence from exercising a right was under taken at the request of the promisor. There need not be a total abandonment of the right, or an undertaking to suspend it for a definite time. Such an undertaking, if it exists, is of course not a performance, but a promise, and then the contract is formed by mutual or reciprocal promises (subsection (f )). In my humble opinion this passage states the correct law. As the plaintiff did not do anything to his detriment or part with anything of value or undertake any legal responsibilities by seeking the emoluments of the said scheme. I am of the view that even if the said scheme was an offer, there was no considera tion for it so as to make it an agreement.

10. However, Mr. Shaikh Hyder said that his case was supported by English decisions which I shall now consider. In Carlill v. Carbolic Smoke Ball Co. ((1893) 1 Q B 256) the defendants were the proprietors of a medical preparation called the Carbolic Smoke Ball. This smoke ball was sold at 10 sh. and they issued an advertisement in which they offered to pay 100 to any person who contracted influenza after having used their smoke balls in the specified manner. The plaintiff purchased the defendant's smoke balls. But despite having used it according to the defendant's instructions, she contracted influenza, therefore she sued the defendants for the 101 offered by the defendants under their advertisements. Her claim was upheld by the Court of Appeal. This judgment supports the plaintiff to this extent that the defendant cannot repudiate the said scheme merely because it was not specifically addressed to him. But, as I have shown, the real point for determination is whether it can be said that the plaintiff has given consideration for the said scheme, and on this point I shall quote the observation of Lindly, L. J. at page 264: "I come now to the last point which I think requires atten tion-that is, the consideration. It has been argued that this is nudum pactum-that there is no consideration. We must apply to that argument the usual legal tests. Let us see whether there is no advantage to the defendants. It is said that the use of the ball is not advantage to them. The answer to that, I think, is as follows. It is quite obvious that in the view of the advertisers a use by the public of their remedy, if they can only get the public to have confidence enough to use it, will react and produce a sale which is directly beneficial to them. Therefore, the advertisers get out of the use an advantage which is enough to constitute a consideration. But there is another view. Does not the person who acts upon this advertisement and accepts the offer put himself to some inconvenience at the request of the defendants? Is it nothing to use this ball three times daily for two weeks according to the directions at the request of the advertiser:' It appears to me that there is a distinct inconvenience, not to say a detriment, to any person who so uses the smoke ball. I am of opinion, therefore, that there is ample consideration for the promise." Applying the principles laid down in these observations, it is clear that the Carbolic Smoke Ball Company was bound by its promise, because, by purchasing the smoke ball for 10 sh., which was a very substantial amount 80 years ago, and by using it, the plaintiff had done something to her detriment. But it cannot possibly be said that the plaintiff had acted to his detriment by writing a letter of resignation in which he demanded the emoluments available under the said scheme, therefore the judgment cited is distinguishable on the facts. On the other hand, the observations in the first para. quoted lend some support to the defendant's interpretation of the said scheme. 10-A. Mr. Shaikh Hyder also referred me to a decision of the Court of Appeal in Davies v. Rhondda District Urban Council ((1918) 86 L J K B 156). The facts in that case were that the defendant was the local education authority, and the plaintiff was employed by it as a teacher. At the outbreak of the First World War, before the introduction of compulsory Military service in England, the defendant had issued a circular that if any teacher employed by it volunteered for military service, it would continue to pay that teacher his full civil pay less a deduction on account of his army or navy pay and/or allowances. The plaintiff, who was a teacher, informed the defendant that he would volunteer for military service on the basis of its circular and did so. As the defendant did not pay him his salary he filed a suit against it which was dismissed on the ground that there was no contract between the parties because there was no consideration on the plaintiff's part. The Court of Appeal set aside the trial Court's judgment and held that the plaintiff had advanced consideration to the defendant so that there was a contract between the parties. Mr. Shaikh Hyder submitted that this judgment supported his argument because the plaintiff also had submitted his resignation in the instant case. But in the judgment cited it was not the plaintiff's resignation from his employment with the defendant that constituted consideration but the fact that he had volunteered for military service on the basis of the defendant's circular. This is made very clear from the following passage in the judgment of Pickford, L. J. at page 168: "On the faith of that circular the plaintiff joined the Army. The Military Service Act, 1916 (5 and 6 Geo. 5 c. 104) was not in operation at that time, and therefore he was not bound to join the Army ; but he did join it on the faith of that resolu tion, and it will be noticed that in the letter in which the resolution is sent to him it was said to apply to teachers who are serving or may volunteer for service, and therefore it is obvious that it was never intended to apply simply to persons called up for active service in the sense of being reservists and liable to call, and not volunteers. The plaintiff was a volunteer, and it was pointed out to him that the resolution was intended to apply to volunteers. Upon that he joined. It is said that there was no contract, and there was no contract on the part of the council to pay him the money. I mean contract in fact, whether ultra vires or not is another matter. It seems to me that there was as a clear contract as you could have, assuming the defendants have the power to make it." Thus, as there can be nothing morn to a man's detriment than volunteering for military service in a war, on a proper apprecia tion of the facts, far from helping the plaintiff's case, the judgment cited goes against his plea. I have therefore no doubt that, in the instant case, the plaintiff's purported resignation did not amount to consideration on his part.

11. As the plaintiff's letters of resignation did not amount to consideration, it is clear that there was no contract between the parties, so that in any view of the matter the plaintiff is not entitled to the benefits of the said scheme of to any relief. It is therefore not necessary to consider Vic other arguments advanced by the learned counsel, and the second issue is decided against the plaintiff. The suit is without merit and is dismissed, but in the circumstances, I leave the parties to bear their own costs. A. E. Suit dismissed.