P L D 1961 (W (PLP)

Two applications made by defendant No. 2‑one under section 3 of the Limitation Act read with Order XII, rule 6, C. P. C. and the other under Order VII, rule 11, C. P. C. both of which have equally close bearing on the maintainability of this suit, will be disposed of by this order.

2. In the application under section 3 of the ` Limitation ‑'Act the defendant has objected to the maintainability of this suit on the ground that it is barred by time. In the application under Order VII, rule 11, C. P. C., also the defendant's objection is that the suit is barred by time, but three more objections have been raised, which are: (i) that the statutory notice given under section 80, C. P. C., on the basis of which this suit has been filed is suit has been filed is not valid; (ii) that the suit suffers from the defects of misjoinder of parties of action which amount to multifariousness ; and (iii) that the suit is not maintainable against defendant the Government of Pakistan, because this is a Mr. K.A. Ghani, for defendant No. 2, has not pressed his objection as to multifariousness ; therefore, the following three objections are to be considered for deciding the applications: (i) Whether the suit is barred by time ; (ii) Whether the suit is not maintainable because the notice is bad ; (iii) Whether the plaintiff's claim is not maintainable against the Government of Pakistan.

3. It will be useful to state the background of facts before determining these issues. The facts are that a suit bearing No. 291 of 1955 was instituted by plaintiff No. 1, namely Faridsons Ltd. against the Federation of Pakistan on the 22nd of March 1955, for the recovery of Rs. 1,86,00,000 with interest at the rate of 9 per cent. per annum, and costs of the suit. The amount was claimed as damages on the ground that the Government of Pakistan had‑ "Maliciously induced and procured Messrs Siemens to break their agreement of agency (with the plaintiff) and to withdraw from their commitments," with the plaintiff, thus causing the plaintiff the loss of its com mission, benefits and profits as well as of its prestige and financial credit. The date of the cause of action was stated in paragraph 15 of the plaint to be‑ "on or about the 29th January 1954." The reason for instituting the suit against the Government alone without impleading Messrs Siemens was stated in paragraph 14 of the plaint to be that the plaintiff bad given a notice to Messrs Siemens with the object of referring their disputes to arbitration, but a reply from Messrs Siemens‑had not been received ; "since the limitation period as against the defendants (Pakistan) was about to expire, the plaintiff had to institute the suit and could not afford to wait for the reply of Messrs Siemens. On receipt of their reply, the plaintiff reserved the right to proceed against them by way of arbitration and/or otherwise."

4. Objection was taken in the written statement submitted on behalf of the Government on the 9th of April 1956 to the maintainability of that suit on the ground that the notice given under section 80, C. P. C., was insufficient. Before an issue was framed on that objection, Messrs Faridsons Ltd. and Mian Muhammad Abdul Latif, filed the present suit against Messrs Siemens Ltd. and Pakistan on the 29th of January 1957.

5. The present suit is on the same facts as those on which suit No. 291 of 1955 was based. Proper stamp duty was initially not paid on the plaint nor was it written on suitable sheets of paper ; therefore it was returned on the next day, I.e., the 30th of January 1957, for removing the objections within 15 days. The, plaintiffs apparently wanted to wait and see the result of the objection that had been taken to the maintainability of the previous suit ; therefore, they took no action on the objections for one year and seven months. After this long delay, they ,removed the objections and represented the plaint on the 27th of August 1958. They explained the delay by mentioning that their office had been raided by the police, as a result of which their "records" had been "dislocated". This was not a good explanation because firstly, the alleged search. was made in February 1958; and secondly, there is no explanation as to why they did not file a fresh plaint within a reasonable time. They could not be given endless time if the former plaint was never found. Nine other objections were taken by the office on the plaint when it was represented and it was returned in September 1958, for removing them. The objections were removed, and the plaint was presented again on the 28th of October 1958. The office noted that a similar suit was pending on the same cause of action in which an objection to the maintainability of the suit for non‑compliance with the provisions of section 80, C. P. C., had been taken but recommended to the Registrar that the plaint be registered and summons be issued to the defendants "subject to any objection at the time of hearing". The plaint was admitted after hearing counsel for the plaintiffs vie., Mr. Ihsanul Haq Advocate on the 27th of October 1956. In this suit, the plaintiffs have asked for a declaration against defendant No: 1, vie. Messrs Siemens that the contract is subsisting and consequently for rendition of account. Against the Government of Pakistan they have claimed a decree for rupees one crore and 86 lacs as damages. The reliefs against the two defendants are not claimed in the alter native, but it is obvious that damages for causing breach o the contract cannot be granted if the relief claimed against Messrs Siemens are awarded.

6. The proceedings in the former suit continued separately. ddin. A_' preliminary issue was framed on the 2nd of December 1957, on which evidence was recorded on the 18th and 19th of February 1959, and the suit was dismissed on the 26th of March 1959, on the ground that it was bad in terms of section 80, C. P. C. The defect that was found in it was that the period of 2 months required by section 80, C. P. C., for the notice had not been allowed to expire before the institution of the suit.

7. The two applications which are before me for disposal now were made in this suit by the Government of Pakistan, before the dismissal of the previous suit, on the 23rd of February 1959, but have remained pending since then. After the dismissal of the suit, defendant No. 1, namely Messrs Siemens, made two applications in this suit on the 24th of August 1959, for staying the proceedings in order to refer their disputes with the plaintiffs to arbitration. On the 1st of May 1961, a joint application was made by the plaintiffs and defendant No. 1 for getting proceedings against defendant No. 1 stayed in order to get i their disputes decided by the arbitration of Mr. Sharifuddin, Advocate, and Mr. R: M. Reisinger of Munich. It was granted by Inamullah, J., vide his order dated the 1st of May 1961 over ruling the following two objections which were raised against it on behalf of the Government of Pakistan (1) that the Government of Pakistan was not a party to the arbitration agreement and, therefore, the suit could not be stayed (2) that no order of stay could be granted on the 'joint application of the plaintiffs and defendant No. 1 without first disposing of the application made by the Govern ment for rejection of the . plaint under Order VII, rule 11, C. P. C. The reasons for overruling these objections were that the reliefs claimed by the plaintiffs against the Government were different from those claimed against Messrs Siemens, and that acceptance of the joint application could have no effect on the applica tion of the Government of Pakistan made under Order VII, rule 11, C. P. C. The joint application was, therefore, granted in the following terms "I would, for the reasons given above, stay the proceedings of the suit as prayed for by the plaintiffs and the defendant No. 1 under section 3 of the Act [The Arbitration (Protocal and Convention) Act, 1937]. I would order that the application under Order VII, rule 11, C. P. C. be fixed by office at an early date. This application, I 'may mention, is not before me today for disposal."

8. Pausing here to take a general view, of the situation 1 notice that the previous suit bearing No. 291 of 1955 was still pending when this suit was instituted. In the previous suit, Messrs Siemens was not impleaded as a defendant on the ground that a notice for referring disputes to arbitration had not yet been answered by that firm, and that Messrs Faridsons Ltd. could not wait for their reply ‑because the period of limitation "was about to expire" yet this suit was instituted after one and abut three quarters of a year from the institution of the previous suit, and after about three quarters of a year from the objection to the validity of the notice under section 80, C. P. C., was taken in the previous suit. The language of paragraph 19 of the plaint of this suit is suited to create an impression that it is meant primarily to be against Messrs Siemens and "by way of abundant caution only against defendant No. 2 also." The Suit against defendant No. 1, has, however, been stayed on a joint application made by the plaintiffs and defendant No. 1 but is proceeding against defendant No. 2 .

9. Against this background of facts I take up the three issues, which have been stated above. The third issue is the simplest and counsel for the Government of Pakistan did not appear to rely on it. He argued, with the help of paragraph 10 of the notice under section 80, C. P. C. and paragraphs 17 and 19 of the plaint, that the cause of action against the Government was in respect of torts and relied on Mrs. A. Y. Isaacs v. Federation of Pakistan (P L D 1954 Lah. 800) in support of his contention that a claim on torts could not be made against the Government. Mr. Sharifuddin for the plaintiffs, distinguished that judgment by pointing out that it related to a claim for the recovery of salary, and relying on paragraph 19 of the plaint contended that the Government had acquired control over the business and all the shares that were held by the plaintiffs, thus deriving profit by inducing the breath of the contract. This benefit according to counsel, brings the case within those categories of torts for which claim can be made against the Government. In support of this proposition lie has relied on Muhammadi Steamship Co. Ltd. v. Federation of Pakistan (P L D 1959 Kar. 232 (250)). As the present issues are in the nature of preliminary issues I cannot at this stage hold that the Govern ment has not benefited by acquiring control over the business and all the shares that were held by the plaintiffs and therefore must decide, subject to any evidence that may be adduced later on, that the suit is maintainable.

10. The second issue‑is more important. The notice under section 80, C. P. C. was given by Faridsons Ltd. only who had brought the previous suit against the Government on that notice. The present suit is by Mian Muhammad Abdul Latif also on the same notice. It is obvious that Mian Muhammad Abdul Latif has no right to institute this suit without giving a notice under section 80, C. P. C. Mr. Sharifuddin for the plaintiff tried to argue that Mian Muhammad Abdul Latif has been impleaded in the capacity of the Managing Director of the Company, but this is not correct because the two plaintiff have alleged their own rights in the plaint. For instance, in paragraph 8 of the plaint there is a mention of "a tripartite agreement between the plaintiffs and defendant No. 1, namely, Messrs Siemens." In paragraph 9 of the plaint there is a mention of "the joint responsibility of the plaintiffs and defendant No. 1: which‑ "was split up so as to make the plaintiffs Nos. I and solely responsible" for the distinct purposes detailed in the paragraph. Mr. Sharifuddin realised this difficulty and stated that plaintiff No. 2 was prepared to withdraw from the suit, but Mr. K. A. Ghani for the Government has objected to granting permission to plaintiff No: 2 to give up his claim on the ground that the proceedings of the suit have been stayed against the other defendant. He contended that though the proceedings had been stayed against one defendant only, the withdrawal of one plaintiff would mean amendment of the plaint, which cannot be made at present because Messrs Siemens are not represented now and because the entire suit has been stayed as far as one defendant is concerned. Counsel further argued that Inamullah, I., has held merely that the relief claimed against the Government i different from the relief claimed against Messrs Siemens and that an order of stay of the proceedings against defendant No. 1 would not prejudice the disposal of defendant No. 2's application under Order VII, rule 11, C. P. C., but the learned Judge has not indicated by doing so that the plaint which is a common document in relation to both defendants can be amended at a time when the suit is stayed against defendant No. 1.

11. The contention of Mr. A. Ghani has force in it. I would, therefore, not allow plaintiff No. 1 to, withdraw from the suit or give up his claim so long as the proceedings against defendant No. I are stayed, but in consequence of this decision I would also refrain from deciding the objection of Mr. A. Ghani under section 80, C. P. C. to the maintainability of the suit, I, therefore, let the determination of this issue stand over for the present. '

12. The first. issue is obviously 'the most important one. It is particularly important because the stand of the plaintiff's counsel is not that the suit is not barred by time against the Government ; he has, on the contrary, contended that their case falls under section .14 of the Limitation Act so that the time during which one of the plaintiffs had been prosecuting the previous suit against the Government should be excluded in computing the period of limitation. He contended that plaintiff No. 1 has with due diligence and in good faith prosecuted the previous suit, which was founded on the same cause of action . as the present suit but which the Court was unable to entertain owing to a defect of a statutory notice which was a defect of a like nature as the defect of jurisdiction. This. argument, is a departure from the following stand which was apparently taken by the plaintiffs in paragraph 21 of the plaint, in order to satisfy the provisions of Order V 11, rule 6, C. P. C. "That the cause of action arose at Karachi within the jurisdiction of the Honourable Court on January 29, 1954 when the defendant No. 1 repudiated the Agency Agreement and the defendant No. 2 procured the breach thereof, on March 20, 1954, when the defendant No. 2 terminated the managerial control of the Telephone Industries of Pakistan Ltd and acquired all shares held by the plaintiff No. 1 in the said company, and from day to day, the cause of action being a continuing one, and also as and when the commission became due and payable to the plaintiff's." This shows that, according to the plaintiffs, the suit was within time because, the plaintiff's were continuously suffering loss of income, but the grievance against the Government being (para. 1 of the plaint) that it has induced Messrs Siemens Ltd., to break their agreement with the plaintiffs; the cause of action against e the Government was complete when the inducement sueceede4 and cannot be said to have continued from day to day. Mr. Sharifuddin has apparently realised this weakness of the stand taken in the plaint and, therefore, relied on section 14 of the Limitation Act.

13. That section can be of help to one or both the plaintiffs, as, the case may be, provided its ingredients which are as follows can be said, in the circumstances of this case, to exist: (1) Suit No. 291 of 1955 was prosecuted by Messrs Faridsons Ltd., with due diligence. (2) It was prosecuted in good faith. (3) The cause of action of that suit and this suit is the same. (4) The previous suit was not entertained by the Court owing to A defect of jurisdiction or some other cause of like nature. If anyone of these ingredients is missing, then the benefit of section 14 of the Limitation Act will not accrue. I should therefore, examine them individually, keeping in mind that the burden of proving their existence is on the plaintiffs.

14. Plaintiff No. 2, viz. Mian Muhammad Latif was, not al plaintiff in suit No. 291 of 1955 ; therefore, he did not prosecute) that suit ; as such he is not entitled to the benefit of section 1 of the Limitation Act. In consequence, his claim against defendant No. 2, viz., the Government of Pakistan, must be, and is hereby dismissed as barred by time.

15. Messrs Faridsons Ltd. had instituted the previous suit and prosecuted it to its end, but their diligence during the period of time, which in the language of Explanation I to section 14 of the Limitation Act, can be described as from "the day on which that suit . . . . . was instituted . . . . . , (to) the day on which the proceedings therein ended" is not factually material, because they did nut wait for those proceedings to be ended on the 26th of March 1959, and have instituted this suit on the 29th of January 1957. Mr. A. Ghani has argued on this basis that Messrs Faridsons Ltd., are not entitled to the benefit of section 14 because the benefit can be claimed only if the previous, proceedings were the cause of delaying the institution of the subsequent proceedings. Moreover, in their previous suit they had not impleaded Messrs Siemens as a defendant on the excuse that they could not wait for doing so because the period of limitation against the Government of Pakistan was about to expire. This knowledge of the narrow margin of limitation should have impelled them to institute this suit immediately on coming to know that the validity bf the notice given by them under section 80, C. P. C., was questioned. They were in a position to do so just as they did after wasting a good deal of time. Their fault at least lies in failing without excuse to institute the present suit for about three quarters of a year after the objection had come to their knowledge on the 9th of April 1956. , The previous suit is, therefore, no excuse for this delay. I agree with counsel that the proceedings of the previous suit were lit fact not responsible for this delay, but section 14 of the Limitation Act will in any case be helpful to them until the date of objection if they have prosecuted the previous suit with due diligence until then. Mr. A. Ghani argued that they had not done so because the judgment given in that case reveals that according to the evidence of a clerk of Mr. Brohi, Advocate, they had acted prematurely in disregard of advice. Counsel is right in this, therefore, the con clusion is : (a) that Messrs Faridsons Ltd. did not prosecute the previous suit with due diligence in so far as they instituted it perma turely on the 22nd March 1955, in disregard of advice to the contrary; (b) that they knew the defect was found out when an objection under section 80, C. P. C., was taken on the 9th of April 1956, to the maintainability of the suit, and that at least after that date (i.e., 9‑4‑1956) their actions cannot be said to have been in fact obstructed by the consideration that those proceedings were pending ; for they have instituted this suit on the 29th of January 1957, before a preliminary issue was framed on the 2nd of December 1957, evidence was recorded on it, and the suit was dismissed on the 26th of March 1959.

16. Mr. Sharifuddin for the plaintiffs has contended that the idea of prosecuting the previous suit to the end could not be abandoned because its. result depended on evidence ; it should, therefore, be taken to have been prosecuted in good faith from the date of its institution until its proceedings ended. He argued that in this view the entire period of time should be excluded in computing the limitation of this suit. In other words, he has argued, that the uncertainty created by the need of evidence was a sufficient excuse in favour of Messrs Faridsons Ltd. irrespective of the fact that there was carelessness in the institution of that suit, and that the present suit was instituted before the proceedings therein ended. The first part of the argument needs no refutation. The essence of the second party 9s that the time of delay should be excluded from the period of limitation . irrespective of whether the previous suit was actually a cause of the delay or not. It is an erroneous argument, because the prosecution of the previous suit ceased to be in good faith for postponing the institution of this suit, when its prosecution ceased to be genuinely necessary for waiting to institute this suit. The expression `good faith' is not exhaus tively defined in section 2 of the Limitation Act but inherently embraces the idea of honesty of purposes. The definition is as follows‑ `good faith', nothing shall be deemed to be done in good faith which is not done with due care and attention ;" its effect is that nobody can be said to have acted honestly for purposes of the Act if he did not act with due care and attention. This ‑ is a stricter definition than that contained in section 3 (20) of the General Clauses Act, 1897, and excludes its application.

17. The first and second ingredients of section 14 of the Limitation Act are thus missing. The third one can be said to be present because the cause of action against the Government is the same in both suits. ,

18. Lastly, I have to consider whether the previous suit, was dismissed because the Court was "unable to entertain it" owing to "defect of jurisdiction or other cause of like nature". Mr. Sharifuddin has contended that dismissal of a suit owing to a defect of notice in terms of section 80, C. P. C., is a defect of like nature and has supported this contention by referring to G. G. in Council v. Gouri Shankar Mills (A I R 1951 Pat. 382) and to Gehimal v. The Manager, Incumbered Estates in Sind (32 I C 616). In the first case, a Division Bench of the Patna High Court has held that the plaintiff was entitled to the benefit of section 14 of the Limitation Act. because seeing that the previous suit had been instituted "within two months of the service of notice under section. 80, C. P. C:," he withdrew it with the leave of the Court and instituted the second suit on the following day. There is no discussion in the judgment of those provisions of the section which are to be examined here. Moreover, the action of the plaintiff in withdrawing the suit with the leave to institute another suit revealed his care and attention. Had he persisted in trying to get the suit decided on merits with the object of taking a mere chance of favourably interpreting section 80, C. P. C., and failed, he would have reduced the chances of getting the benefit of section 14 of the Limitation Act, because taking hazards or unnecessary risks is not acting with due care and attention. A Division Bench of the Sind Judicial Commissioner's Court granted the benefit of section 14 of the Limitation Act in the second case cited by Mr. Sharifuddin because the omission to give notice under section 80, C. P. C. was held by it to have been induced by the judgment in Fundumal v. Muhammad Sharif (S L R 175 .). It is not a helpful precedent to Messrs Faridsons Ltd.

19. On the other hand, Mr. A. Ghani has advanced the proposition that section 14 of the Limitation Act, does no at all help those plaintiffs who fail, in their previous attempts by reasons of their own negligence and laches. Moreover, they can neither be said to have acted honestly nor with due car and attention if they adopted those courses which patently involved risks of leading them to failure. Where there is absence o diligence and good faith, it is erroneous to attribute the failure to defect of jurisdiction or a like cause. He has supported this proposition by referring to India Publishers Ltd v. Aldridge (I L R 35 Cal. 728), Manghamal v. Fernandez (5 S L R 181) and pages 289‑290 of Sanjiva Rao's Indian Limitation Act, Vol. I, (5th Ed.).

20. In the case before me, the former suit was unnecessarily instituted before the expiry of two months after the service of the notice that was given under section 80, C. P. C., in disregard of the existence of serious doubts as to its sufficiency and in spite of an admonition to the contrary. Later on, a risk was run in pressing that suit for decision on merits by depending on the chance of getting over the objection by pro ducing evidence ; but it was dismissed for want of a valid notice. In these circumstances, I cannot conclude that the suit was dismissed owing to the inability of the Court to entertain it by reason of a cause that was defect of jurisdiction or of like nature, because in the words of Sir Barnes Peacock, C. J. reproduced with approval in India Publishers Ltd., v. Aldridge (I L R 35 Cal. 728 at page 734) from the case of Chunder Madhub Chuckerbutty v. Bissessuree Debea ((1866) 6 W R (C R) 184). "defect of jurisdiction would be a cause that would not include any neglect on the part of the plaintiff, either in stating his case or in other respects." In consequence, the claim of Messrs Faridsons Ltd., also fail against the Government of Pakistan as barred by time.

21. I may add that counsel for the parties have rendered valuable assistance to this Court. Much as I value the assistance given by Mr. Sharifuddin, it looks proper for me to point out that in this case he was engaged as counsel before he was nominated as an arbitrator by the plaintiffs and has opposed the applications of the Government on behalf of the plaintiffs after being so nominated. Counsel for the Government did not object to this, and I did not notice his appointment as an arbitrator during the hearing ;. therefore, Mr. Sharifuddin did not get an opportunity to clarify his action. In these circumstances, I do not find fault with him. Moreover, I can anticipate him saying that he is an arbitrator to decide the plaintiffs' disputes with Messrs Siemens and counsel for the plaintiffs in their claim against the Government, and that those disputes and this claim have become separated by the order of Inamullah, J. His fidelity towards the plaintiffs, he may claim, remains completely unsullied and his duties as an arbitrator between the plaintiffs and Messrs Siemens cannot be influenced by the arguments advanced by him in defence only of the preliminary objections to the suit raised by the Government. Conceding all the force that can be seen in these contentions, I should mention that the conduct expected of Mr. Sharifuddin is not ordinary but exemplary. He may be able to fully vindicate himself in relation to what has happened. but I may mention for future benefit of all that outstanding counsel would do well to consider the propriety of avoiding every chance of creating an impression on the Bar that an Advocate can simultaneously undertake the inconsistent duties of v counsel as well as of an arbitrator in relation, t the same cause of action ; or that he may place himself in a situation where he may have to reconcile conflict of interest which in this case can be said to be involved it; the necessity of receiving instructions and urging in Court as counsel the a certain contract had been violated resulting in damages t the plaintiffs and in the undertaking, while continuing to b counsel, to Judge as an arbitrator whether that contract subsists so as to justify the plaintiffs' claim for accounts. The principle is well stated in Emperor v. Rajani Karlta (A I R 1923 Cal. 106), which I reproduce here for general guidance ; " . . . . . a legal practitioner cannot represent conflicting interests or undertake the discharge of inconsistent duties. When he had once been retained and received the confidence of a client, he cannot accept a retainer from or enter the service of those whose interests are adverse to his client in the same controversy or in a matter so closely allied thereto as to be in effect a party thereof. The rule is rigid and is designed not only to prevent the dishonest practitioner from fraudulent conduct,, but as well to preclude the honest practitioner from putting himself in a position where he may be required to choose between conflicting duties, or be led to an attempt to reconcile conflicting interests, rather than to enforce to their full extent the right or the interests which he should represent."

22. With the above digression, which I believe was necessary I arrive at the over‑all conclusion that the suit be dismissed with alone costs against defendant No. 2.

23. It is ordered accordingly. A. H. Order accordingly.