1986 PLP 1914 (MLD)

5. Learned counsel for the plaintiff has argued that these default on the part of the defendants may casually look insignificant, but had a serious bearing on the proper working of the factory inasmuch as without clearance from the Bank, the plaintiff was not in a position to obtain further loans for investment in the project and without the functional drawings which were to be provided, the plaintiff felt handicapped in efficiently operating the factory without assurance of a secured lease term the .plaintiff could not put the land to full exploitation. In short the breach is attributed to the defendants and the delay, rather failure to make the payments is being justified.

6. The plaintiff has filed this suit for specific performance of contract, dated 2‑12‑1983 and for restraining the defendants from ousting the plaintiff from the scene and from taking forcible possession of the factory. That if they are riot restrained and the agreement, dated 2‑12‑1985 is not implemented the plaintiff would suffer. The reliefs claimed in the plaint, therefore, are as follows:‑ "(a) Specific performance of agreements, dated 2‑12‑1985. (b) In the alternative compensation amounting to Rs.30,00,000 being the actual investment by the plaintiff in the project plus damages of Rs.10,00,000."

7. The plaintiff has moved an application under sections 39 and 151 read with Order XXXIX, Rules 1 and 2, C.P.C. with the following prayer:‑ "That this Hon'ble Court be pleased give, grant and issued interim injunction restraining the defendants Nos.l to 3 and particularly defendant No.l his accomplices, companions, employees, agents or anyone else claiming through, under or in trust for him or acting or claiming to act on his behalf from interfering with the possession of the plaintiff and his employees of the Factory premises situated at Ghadap or otherwise dispossessing the plaintiff from the same or interfering with his functioning as Managing Director of the defendant No.4 till the final disposal of the case."

8. A counter‑affidavit has been filed and Mr. Iqbal Aziz defendant No.1, who is the Chairman of defendant No.4, has revealed in para. 4 that the agreement, dated 2‑12‑1985 referred to above was superseded by another agreement, dated 9‑2‑1986, under which the whole arrangement changed and a compromise was brought about between the parties, where under the plaintiff was required to pay a consolidated amount of Rs.15,36,000 by 19‑2‑1985, at the latest. In the event of his failure to make the above payment all interests of the plaintiff were to cease to exist and as per para. 3 of this compromise the following consequences were to follow:‑ "Further due to any failure whatsoever on my part to make the above payment, you would be free to instantly declare the above agreement null and void and reacquire Spring Water Company Ltd., on the basis of the declared and accepted balance‑sheet as on 30th June, 1983, and on terms and conditions most acceptable to you in pursuance of the best interests of the Company with no recourse to us. You, of course, assure the undersigned against any measures towards the reacquisition which would be defamatory towards me or my other existing business interests."

9. It is urged by the learned counsel for the defendant during the arguments that as a consequence of failure of the plaintiff to pay the agreed amount by 19th February, 1985 as per terms of agreement, dated 9‑2‑1985 the plaintiff ceases to have any claim against the defendants. The lease agreement between Messrs Spring Water Company Lid. and Mr. Rashidullah Khan has been cancelled by the landlord and a new lease has been granted by the landlord to another Company Messrs Health Crafts (Private) Ltd. on 17‑8‑1985. It is further alleged that in pursuance of the new lease Messrs Health Crafts (Private) Ltd. installed their own machinery on the factory premises and while the factory was reaching the phase of completion, the plaintiff with the aid of one Arif Malik, an Estate Broker and with the aid and assistance of some Goondas ejected the Workers of the' contractor of Messrs Health Craft (Private) Ltd. and has forcibly taken possession of the Company which he is occupying till to date. It is further alleged that in order to fortify this illegal action, the plaintiff has rushed to the Court and obtained an ad interim injunction for restraining the defendants from re‑entering the Factory.

10. The averments in this counter‑affidavit have been controverted by the plaintiff in a detailed rejoinder. The story of Messrs Health Crafts (Private) Ltd. having ever entered in the premises is vehemently' denied. It is contested that Messrs Health Crafts (Private) Ltd. ever entered the premises or made any improvement in the, structure, or added anything to the installations. which had been raised by the plaintiff during the "last about 2 years. The non-payment of the money is sought, to be justified on various grounds. It is urged that this agreement, dated 9‑2‑1985 was brought about under pressure and coercion and is unconscienable and that it was a result of black‑mail. Lastly it is contended that even under this agreement the defendant had to fulfil obligations as per clause (5) of the agreement which he has obviously

11. With this background, it is easy to understand that how the parties are now locked in a situation which unfortunately would frustrate the plannings and concept with which this useful industry came into being in 1983.

12. It is neither possible nor indeed desirable at this stage to examine the merits of the allegations and counter‑allegations raised by the parties against each other. The whole phenomenon seen in a broad spectrum reveals that on the one hand a substantial amount still remains to be paid by the plaintiff to the defendants, and on the other the agreement has been partially implemented. Even if the disputed and highly controvertial agreement, dated 9‑2‑1985 is taken to be the ruling agreement between the parties, the plaintiff had to pay a lump sum of Rs.15, 36, 000 by 19‑2‑1985. Whether withholding of this payment by the plaintiff was occasioned on account of the failure of the defendants to perform the reciprocal obligations or it was an act of breach on the part of the plaintiff, must be left to be determined at a stage when the parties go to the trial and a clear picture emerges. To make an attempt to discover the breach at this stage would mean forestalling the result. This might cause prejudice to the interest of the parties.

13. It is admitted position that the plaintiff was put in possession of the Factory in August, 1983, his possession was affirmed by agreement dated 28‑9‑1983, he has been appointed the Managing Director of the project, he has paid to the defendants a sum of Rs.3 lacs or so, that he has made further investment by undertaking publicity, that he has made commitments with third parties, whom he had appointed as distributors and agents for the product of the factory. He also claims to have raised constructions and claims to have installed machinery. This investment, according to him, is to the tune of Rs.30 lacs. With this background it is difficult to say that it is a mere paper agreement in which non‑payment of the balance of the price should completely wash of every thing that has happened and restore the defendants to the position of August, 1983. Indeed by clause 3 of the agreement, dated 2‑12‑1983, it is provided that if the plaintiff fails to make payments as per schedule, the unpaid balance shall carry an interest of 15% per annum, till the time the same is not, paid of.

19. Taking into consideration air the aspects of the case it is a case in which the agreement has gone a long way and has run into difficulties at an advance stage due to reasons which may be the failure of the plaintiff or the defendants. Whether the defendants have entered into a fresh contract for disposing of this Factory with Messrs Health Crafts (Private) Ltd. is doubtful and whether they have a right to do so Without settling the matters with a previous purchaser, who happens be in possession since 1983 is highly debatable.

15. An important issue in the suit would be whether the defendants are to be restored to the position of August, 1983, or are entitled only to the balance of the consideration, alongwith interest. These and others are the sensitive issues which must await to be decided at the time of trial.

16. For the present the question to be determined is whether the possession of the plaintiffs on the factory premises should be protected till the suit for specific performance is mature for hearing? I was anxious to find out a via media whereby this useful project should not remain idle and the machinery installed on the premises should not be allowed to be reduced to junk till the suit is disposed. The plaintiff is admittedly a technical man. I invited from both the parties proposals for some workable arrangements whereby the Factory could be put into Operation without causing prejudice to the interest of the parties. The plaintiff has come out with a proposal which he has filed in Court. Under this proposal he has pleaded for the appointment of Nazir as a Receiver. He has offered to surrender possession to the Receiver and also to work under his supervision. He has further consented to submit account of income and expenditure of the factory to the Receiver every three months. He has also offered to deposit in Court or to furnish a Bank Guarantee in the sum of Rs.11,81,000 which, according to him, is the only balance. which can be claimed by the defendants. This proposal is, however burdened with condition that "the plaintiff is allowed to operate the factory and market the product without any obstruction or interference by the defendants or any body also claiming through or under them or acting on their behalf". The defendants took time for consideration of the proposal and notify to the Court whether they would consent to such an arrangement. As no reply was communicated and no objections have been filed for quite some time, this order is being passed.

17. The proposals offered by, the plaintiff seem to be very attractive. The main element of attraction is that if the factory is put in operation, it would not only be beneficial to the interest of the two parties, but would also be in the national interest. There are, however, some difficulties in the way of adoption of this proposal, although those obstacles are of merely technical nature. A Receiver is appointed in very exceptional circumstances. As there was no application for appointment of Receiver, no opportunity could be offered to the defendants to examine this proposal in Court through an open arguments on behalf of both the parties. It would not be fair to adopt the proposal If the plaintiff without hearing the defendants on the proposal of Receiver. The only possible order which can be passed in the situation of the case is to dispose of the plaintiff's application under Order XXXIX, Rules 1 and 2, C.P.C. which has been exhaustively argued by Both sides The defendants should not illegally or forcibly eject or dispossess the plaintiff from the possession as apprehended by the plaintiff. Defendants would, however, be free to take any other counter‑action if the law permits them to do so. As this is a suit for Specific performance, plaintiffs cannot be permitted to enjoy all the benefits of the contract without discharging their obligations. They should, therefore, deposit in Court cash amount in the sum of Rs.15,36,000 within one month from the passing of this order as per terms of the agreement, dated 9‑2‑1985, whose execution is admitted, although its validity is questioned on allegations of coercion and undue influence which still remains to be proved by the plaintiff. The final order, therefore, should be that this C.M.A. No.4731 of 1985 under Order XXXIX, Rules 1 and 2, C.P.C. is granted to the extent that without prejudice to the contentions of the parties, the possession of the factory should not be forcibly taken over by the defendants till disposal of the suit and if they desire to run the factory and operate ‑it for profit, they would be entitled to do so at their own risk. Plaintiff should deposit in Court the sum of Rs.15,36,000 without prejudice to their contentions within one month from today. Application stands disposed of the above terms. A. A. Order accordingly.