P L D 1968 Karachi 752 (PLP)

Halsbury's Laws of England, Third Edn., Vol. XXXIX, Note 30, p. 38 and Ertel Bieber & Co. v. Rio Tinto Co. (1918) A C 260 ref. Ashfaq Hussain for Appellant. No.

1. Dingomal for Respondents Nos. 1 to

4. A. A. Fazeel for Respondent No.

5. Date of hearing: 17th August 1966. SAJJAD AHMAD, J. ‑This Letters Patent Appeal arises out of Suit No. 191 of 1963, which was .tried on the original side by a learned Single Judge of this Court (our brother Mr. Justice Kadir Nawaz Awan) and dismissed by him on the ground that it was not maintainable. .

2. The suit was for specific performance of a contract by execution of a sale‑deed, with an option to purchase, a plot of land bearing Survey No. 29, Sheet S. B. 5, measuring 2724 sq. yards, situated in Saddar Bazar, Karachi. An additional claim made in the' suit was for a sum of Rs. 6,20,000‑00 as damages. The contract, according to the plaintiffs' case, was made with them on the 30th of August 1956, by respondent No. 1, namely, Dr. Eddie P. Bharucha, who is the owner of the plot in question, through his attorney, one Julian Hoshang Dinshaw. This plot was already on lease with Khan Ghulam Mohyuddin Khan and his wife Begum Nur Bakht for a period of ten years, commencing from 16th August 1948, who were impleaded as defendants Nos. 2 and 3 respectively, but were subs6quently dropped. These defendants had put up an open-air cinema in that plot known as "Mayfair Cinema" and had constructed certain structures on it for that purpose. The contract with Dr. Eddie Bharucha, referred to above, had been negotiated by the plaintiffs' father, the late Nlanekji Dastur who, in pursuance of the same, along with his son Hoshang, appellant No. 1, entered into a contract with the previous lessees on the 10th of May 1956, for the purchase of their lessee rights and other interests in the land in suit and all their buildings, fixtures, appurtenances on a fairly high price. Defendants Nos. 2 and 3 executed a deed of conveyance in favour of Manekji Dastur and his son, plaintiff No. 1, conveying to them their lessee rights, buildings, materials and all other interests in respect of the land in suit. It was alleged that possession had been delivered to the plaintiffs by the aforesaid defendant in September 1956. Thereafter, the plaintiffs had a plan made for a covered Cinema by their architect which was submitted to the K. D. A. for regular approval which was received in December 1960. According to their case, the plaintiffs had done all this on the faith of the contract made by defendant No. 1 with them, agreeing inter alia that s regular lease deed will be executed by him in their favour but he had failed to do so and instead had brought a suit (Suit No. 47 of 1960) against the plaintiffs in the High Court for their ejectment on the ground of alleged non‑payment of rent which was dismissed as also the Letters Patent Appeal which he had preferred against the dismissal order. The plaintiffs had also in the meantime received a notice from the K. D. A. in April 1961 forbidding them from con structing the Cinema House, on the plot, as the defendant had represented to it that the lease of the plot in question had been terminated. Apart from Suit No. 47 of 1960, defendant No. 1 took other proceedings for their ejectment in which he did not succeed. The plaintiffs were consequently driven to the necessity of filing the suit for specific performance and for damages alleging that while they have always been and are still ready and willing to perform their part of the contract, the defendant was not. The conduct of the defendant which had resulted in preventing the plaintiffs from building the Cinema House on the plot in suit had allegedly caused a loss to the plaintiffs in their income which was assessed at Rs. 20,000,00 per mensem and they made a claim for damages in the amount of Rs. 6,20,000‑

00. Defendants Nos. 5 and 6 were added as parties on the ground that defendant No. 1 had entered into some contract with them in respect of the plot in suit. Out of them, defendant No. 4 alone contested the suit, admitting that he had entered into agreement of lease with defendant No.

1. Defendants Nos. 5 and 6 were placed ex-parte. Defendant No. 1 contested the claim of the plaintiffs on the plea of non‑maintainability of suit, limitation and res judicata. On merits, it was denied that there was any complete and concluded agreement between him and the plaintiffs with respect to the lease or the sale of the plot in question. Issues were struck in the case on 29th January 1964, and the evidence of the parties was recorded from November 1964 to May 1965. On the 14th of September 1965, the learned counsel for defendant No. 1 applied to the learned Single Judge for stay of proceedings on the ground that the defendant was residing in India which country was at war with Pakistan and he was thus an alien enemy, within the meaning of section 83 of the Code of Civil Procedure. In view of this development, the plaintiffs also applied for impleading the Custodian of Enemy Property as a defendant, as the property of defendant No.1 had come to be vested in the Custodian, Enemy Property, under the Enemy Property (Custody and Registration) Order, 1965. Notice was issued to the Custodian and he entered appearance through counsel on the 5th of October 1965. He stated that he would choose to continue the suit under clause 4 (iv) of the aforesaid Order but he did not file any written statement. As several other suits were pending in the Court in which persons residing in Baharat who had become alien enemies on account of war with that country and who were either plaintiffs or defendants in those suits, the question was referred to a Division Bench of this Court for determi nation of the procedure to be adopted in such cases. The Division Bench, of which one of us was a member, heard the reference and gave detailed instructions about the course to be adopted in such suits where the alien enemies figured either as plaintiffs or defendants. The judgment of the Division Bench is reported as Reference No: 1 of 1965 in P L D 1966 Kar. 1.60. It was held by the Division Bench that the suits in which the defendants are alien enemies, can proceed, but their property, involved in the suits vests in the custodian of Enemy Property, and it is open to him to continue and defend the suit. It was further held that in a suit filed against an enemy defendant, he is not only entitled to defend the suit but is also entitled to file an appeal if a decision is given against him during the continuance of the hostilities. He is, however, debarred from executing any benefit derived by him in such litigation. It may be noted that under section 83, of the C. P. Code there is a prohibition for alien enemies residing in a foreign country to sue in any Court in Pakistan. Every person residing in a foreign country the Government of which is at war with Pakistan and who is carrying on business in that country without a licence in that behalf granted by the Central Government, is deemed to be an alien enemy residing in a. foreign country, while the law forbids the institution of suits by such persons, it does not give them an immunity from being sued as defend ants. The reason and the principle behind the rule are obvious. The protection to the alien enemies from being sued as defendants would amount to depriving the nationals and residents of Pakistan for the enforcement of their valid rights against them. 'The position of alien enemies as plaintiffs is entirely different. The Courts of a country will not lend any assistance to the plaintiffs who are nationals or residents of country which is at war with their own country and which assistance may amount to the enrichment of the enemy country and increase its efficacy for war. This principle of public policy, however, would defeat itself if it were allowed to operate to deprive the nationals of a country from enforcing their rights against alien enemies. 'The plaintiff, therefore, isle not to be non‑suited in a case merely because the defendant against whom he is seeking his remedy is an alien enemy. The learned Single Judge, in dismissing the plaintiffs' case on the ground of its non‑maintainability, was mainly influenced by the reason that after the breaking out of hostilities between Baharat and Pakistan, all rights and obligations that arose out of executory contracts entered into between the nationals of Pakistan and the alien enemies, even before the outbreak of war, ipso facto came to an end, and the contract is thus avoided, and in cases of completed and concluded contracts the contract is not avoided but the remedy is suspended which is revived on the restoration of peace. The learned Single Judge has also referred to rules 161 and 162 of the Defence of Pakistan Rules, relied upon before him by the learned counsel for the Custodian of Enemy Property, which deal with the prohibition of trading with enemy. Clause (1) of rule 162 lays down that a person shall be deemed to have traded with the "enemy" if he has had any commercial, financial or other intercourse or dealing with, or for the benefit of, any enemy, and, in particular, but without prejudice to the generality of the foregoing provisions if he has performed any obligation to, or discharged any obligation of, an enemy, whether the obligation was undertaken before or after the commencement of the Ordinance. Trading with the enemy is punishable with imprisonment which may extend to seven years, or with fine or with both. The learned counsel for the Custodian of Enemy Property seems to have urged before the learned Single Judge that if he were to perform any obligation or discharge any obligation arising from the agreement in suit allegedly entered into between the enemy (defendant No. l) and the plaintiffs, he will be committing an offence under sub‑clause (iii) of clause (1) of rule 162 of the Defence of Pakistan Rules, mentioned above. The learned counsel had also relied on Note 30 at page 3S of Halsbury's Laws of England, Third Edition, 'Volume .39, which describes the effect of a declaration of war upon contracts made before toe' outbreak of war between residents of the warring countries. It reads :‑

"The effect of a declaration of war upon a contract made before the outbreak of war with an alien enemy depends upon whether the contract is executory or executed.' If it is executory when war is declared, it is normally avoided and both parties are at once absolved from any performance of it. Even where the contract contains a term purporting to suspend its operation in the event of war, effect will not be given to the term unless this can be done without involving continuance of contractual relations between the parties, but the contract will be altogether dissolved. Where, however, a contract has been executed before the outbreak of war, it is not thereby avoided. The remedy only is suspended and revives on the restoration of peace. A contract is executed for this purpose if it has been so far carried out that no further intercourse with the enemy is required for its completion and it has been completely performed on one side so that all that remains is payment of liquidated sum by the others." In the foot‑note of the same paragraph, however, at (b) the observations of Lord Dunedin are quoted in the case of Ertel Biebar & Co. v. Rio Tinto Co. (1918 A C 260) to the effect that certain contracts, in particular those which are really the concomitants of rights of property, are not abrogated even when executory.

3. With all respect to the learned Single Judge, we consider that the question of the non‑maintainability of the suit on the ground that the defendant is an alien enemy under section 83 of the C. P. Code is distinct and independent from the competency and efficacy of the relief which the plaintiffs seek in the suit and which may be decreed or declined in the ultimate result. The question of the specific performance of the contract in suit depends on the nature' of the contract and its enforceability for that purpose which will have to be decided on the evidence led by the parties in support of their respective contentions. The plaintiffs allege I that while they had performed their part of the contract, the defendant had not. They also allege completion of the contract with delivery of possession which receives support from the fact that the defendant‑respondent had sought their ejectment from the suit premises by successive litigation. The question whether the contract stands frustrated owing to the outbreak of hostilities between Bharat and Pakistan, as seems to have been argued by 'the learned counsel for the Custodian of Enemy Property, has to be decided according to the relevant provisions of the Contract Act, i. e., whether under those provisions the parties, or either of them, have become absolved from their respective obligations under the contract in 'suit because of the outbreak of hostilities between their respective countries which has rendered the performance of the contract impossible or that it has become void on some other legal ground. It may be pointed out here that the plaintiffs' suit was not merely for specific performance of the contract but it contained an alternative relief of damages also which the plaintiffs have assessed at Rs.6,20,000'00 and which they allegedly sustained on account of the breach of the contract by the defendant‑respondent. The decision of this matter will depend on whether the defendant is to blame for any breach of contract and what is the extent of the loss sustained by the plaintiffs for that breach. Whether the plaintiffs win or lose in the case, there is no question of any gain accruing to the enemy defendant. In case of their success the amount of money which the plaintiffs will have to pay for the specific performance of the contract will be received by the Custodian of Enemy Property in whom all rights in the property of the alien enemy now vest under the law. We consider, therefore, that the suit as instituted against respondent No. 1, both for should 'not be thrown specific performance and for damages, out on the ground that it is not maintainable' because the defendant‑respondent has become an alien enemy. We would therefore, set aside the order of the learned Single Judge and direct that the case shall be remanded to him (Mr. Justice Kadir Nawaz Awan) for a fresh decision on all the issues struck in the case other than Issue No. 1, which has been decided by us in favour of the plaintiffs‑appellants. Costs shall follow the event. A. E./K. B. A. Appeal accepted. Case remanded.