P L D 1988 Karachi 548 (PLP)

The plaintiffs, Trustees of Board of Karachi have filed this suit for recovery of Rs.77,880 against the defendants, M/s. United Bank Limited, Karachi.

2. The facts as pleaded in the plaint are that the plaintiffs invited short notice tender for the construction of 64 'H' type quarters for Custom Department at the site situated near Timber Bond Keamari, Karachi. As per terms of the Tender Notice tenderers were required either to deposit in cash or to deposit a pay order in lieu of cash being 4$ of the estimated cost of Rs.19,47,000 as Barnet money via. Rs.77,

880. Inter alia, M/s. Haji Moosa and Sons, Karachi (hereinafter referred to as the Firm) in response to the above tender notice' submitted a tender on 10‑1‑1974 valid upto 19‑4‑1974 for a sum of Rs.23,13,493.35. Alongwith the tender the Firm deposited a pay order issued in favour of Chief Engineer Karachi Port Trust by M/s. Commerce Bank Limited, Siddiqi Wahab Road, Timber Market Branch, Karachi, which stood merged into the Defendants w.e.f. 1‑1‑1975 for a sum of Rs.77,880 in lieu of cash amount as earnest money. Notwithstanding the above tender form being valid upto 9-4‑1974, the firm, in contravention of clause 8 of the Tender Form through its letter dated 13‑3‑1974 withdrew the tender. The said clause 8 reads as follows: "We agree that should we withdraw the offer within the aforesaid period or fail to execute the formal contract/ Agreement and/or make the required Security Deposit, the Board of Trustees of the Karachi Port Trust shall be at liberty at their absolute " discretion to appropriate our Earnest Money deposits of Rs.77,880 either as agreed liquidated damages without any proof whatsoever of the extent of such damages or, on account, reserving to themselves the right to recover from us any further loss or expenses to which they may have been put directly or indirectly by reason of any failure on our part as aforesaid."

3. That the plaintiffs' Board through its Resolution No.684 dated 20‑3‑1974 on the basis of the recommendation of the Tender Committee awarded the above contract to the second lowest tenderer viz. M/s. Sind Construction Company for a sum of Rs.24,31,060.08 and also resolved through its above‑said Resolution dated 20‑3‑1974 to forfeit the earnest money deposited by the Firm. It was on or about 21‑3‑1974 that the firm by manipulation managed to obtain the Pay order of the plaintiffs' Engineering Department in contravention of Plaintiffs Board Resolution dated 20‑3‑1974. Despite the fact that the above Pay order was in favour of the plaintiffs' and that it contained the plaintiffs Engineering. Department stamp which showed that in fact the pay order was used for the purpose for which it was issued and without lacking any reference to the plaintiffs' paid the amount of the pay order to the Firm even though the said pay order was unauthorisedly obtained by the said Firm. The defendants had sufficient notice that the pay order was deposited with the plaintiffs' Engineering Department and that the pay order was in favour of the plaintiffs' refunded its amount to the Firm without making any reference to the plaintiffs. The defendants thus caused, inter alia, a loss of the amount of Rs.77,880 to the plaintiffs. The plaintiffs' staff had illegally given the said pay order to the above firm but the alleged act on the part of the plaintiffs' staff was not binding upon the plaintiffs inasmuch as by virtue of section 88 of the Karachi Port Trust Act the plaintiffs are not responsible for any misfeasance, malfeasance, non‑ feasance of any of their officers or staff. The plaintiffs further averred in the plaint that they had awarded the tender to the second lowest tenderer and thereby suffered a loss of Rs.1,17,567.45. The defendants were not entitled in law to refund the amount of pay order to the Firm as the pay order was issued in favour of the plaintiffs and it was handed over to them and it bore the stamp of the plaintiffs' Engineering Department and hence they have rendered themselves liable to pay the above amount of the pay order to the plaintiffs irrespective of the fact whether the plaintiffs had suffered any loss or not. The defendants deposit demands through Notice of the plaintiffs' advocate calling upon them to pay the amount failed to pay the same; hence the suit.

4. The defendants filed their ,written statement denying their liability to pay the amount of pay order viz. Rs.77,

880. They admitted to have issued the pay order of Rs.77,880 at the instance of the Firm favouring. the Chief Engineer, Karachi Port Trust but denied that it was deposited by the Firm with the Chief Engineer, Karachi Port Trust. It was also denied that the pay order contained the plaintiffs' Engineering Department stamp or that.‑ the said pay order was used for the purpose for which it was got issued by the Firm. So also it was denied that the pay order was unauthorisedly obtained by the Firm, if at all it was deposited by it with the plaintiffs. It was, however, not denied that the amount of the pay order was refunded to the Firm, who got the pay order issued by making the payment. It was again denied that the pay order had any time reached the hands of the plaintiffs and that the defendants caused any loss to the plaintiffs. The defendants also denied that they were not entitled in law to pay the amount of pay order to the Firm and that pay order was required to be discharged from the plaintiffs. It was further averred that the plaintiffs were responsible for the acts of their staff and that the plaintiffs by not holding themselves responsible for the acts of their staff cannot hold the defendants responsible of the acts of the plaintiffs' staff. The defendants further pleaded that the plaintiffs were themselves negligent, if allegedly the said pay order was deposited with them then they failed to have it encashed. It was also specifically pleaded that there is no privity of contract between the plaintiffs and the defendants, that the suit is bad :or non‑joinder of necessary party and that the suit is liable to be dismissed with special cost of Rs.5,000 to the defendants. Lastly, it was averred that the suit had been filed without any authority and Mr. M.D. Raman Lina had no authority to file the suit or sign the plaint. 5. :On the basis of these pleadings the following consent issues were framed:‑ ' "(1) Whether the pay order was deposited by M/s. Haji Moosa & Sons in lieu of cash amount with the plaintiff's Engineering Department, did the defendants had knowledge of its being deposited with the plaintiffs. If so, to what effect? (2) Whether the pay order issued by the defendants in favour of the plaintiffs contained the plaintiff's Engineering Department stamp at the time when and if it was obtained by M/s. Hai. Moosa & Sons from the plaintiff's Engineering Department. If so, what is its effect? (3) Whether the plaintiffs through their Resolution No.684 dated 20‑3‑1974 resolved to forfeit the earnest money if deposited by M/s. Haji Moosa & Sons through pay order of the defendants . If so, what is its effect? (4) Whether M/s. Haji Moosa & Sons at all obtained the above pay order from the plaintiff's Department concerned in contravention of the plaintiffs Board Resolution. If so, what is its effect? (5) Whether the act of the plaintiff's staff to return the pay order to M/s. Haji Moosa & Sons was illegal? If so, what is its effect? (6) Whether the plaintiffs are not responsible for any misfeasnce, malfeasance and non‑feasance of their any officer or servant. If so, what is its effect? (7)Are the defendants responsible for any act of the plaintiffs' staff? (8) Whether the defendants were not entitled in law to refund the above amount of the pay order to M/s. Haji Moosa & Sons for the reasons stated in para. 13 of the plaint. If so, what is its effect? (9) Whether the plaintiffs had to suffer loss of Rs.1,17,567.45 on awarding the contract to the second lowest tenderer. If so, what is its effect? (10) Whether the awarding of the contract to M/s. Sind Construction Co. by the plaintiffs was illegal? (11) Whether the plaintiffs by not encashing the pay order have been guilty of negligence. If so, what is its effect? (12) Whether there is any privity of contract between the plaintiffs and defendants? (13) Whether the suit is bad for non‑joinder of necessary party? (14) Whether the suit has been filed with authority and M.M. D'Lima had authority to file the suit and to sign the plaint. (15) Whether the defendant is entitled to special cost of Rs.5,000? (16) What relief, if any, is the defendant entitled against third party? (17) What should be the decree?"

6. Both the plaintiffs as well as the defendants examined one witness each. The plaintiffs' witness Irshad Ahmed Khan, Senior Clerk, Engineering Department, deposed that the Firm had submitted the lowest tender alongwith pay order of Rs.77,880 on 10‑1‑1975 in favour of the Chief Engineer, KPT issued by the defendant party. The tender was valid upto 10‑4‑1974. The Firm withdrew its tender within the period of validity on 13‑3‑1974 and thus, according to the terms of tender, the said amount of earnest money was to be forfeited. The pay order which was in plaintiffs' office was somehow taken away by the Firm who encashed it although it did not bear any endorsement of Chief Engineer releasing the payment. In cross -examination he stated that no receipt for pay order was issued as it was submitted alongwith the tender. He admitted that the pay order did not bear the stamp of Karachi Port Trust. He also admitted that no intimation about the receipt of this pay order was given to the bank. He, however, denied the suggestion as being incorrect that the pay order was not submitted by Haji Moosa.

7. Haji Muhammad Ayub was examined on behalf of the defendants. He deposed that the pay order (Ex.S/2) was issued at the instance of defendants' client Ws. Haji Moosa & Sons. It was later brought back by the same client and encashed. Before the encashment no intimation was received frog the plaintiffs that the said pay order was stolen away from their office. He further deposed that at the time of encashment the bank obtained a letter of indemnity from the said client (Ex.6/2). During his cross‑examination he stated that the beneficiary of the pay order is the Chief Engineer KPT, Karachi, and that it was issued on 8‑1‑1974 and encashed on 22‑3‑1974. He also admitted that no enquiry before the encashment was made from) the beneficiary. Now I proceed to record my findings on the above‑noted issues. ISSUE N0.1.‑‑Mr. Abbas Ahmed, learned counsel for the plaintiffs submitted that since in the instant case the pay order admittedly drawn in favour of the Chief Engineer Karachi Port Trust had been actually delivered to the payee, it was not open to the purchaser‑firm of the said pay order to encash it without getting it endorsed in its favour by the payee. Upon delivery of the pay order to the drawee the purchaser had lost his right to get the pay order cancelled and to receive the amount of the pay order. In this connection the learned counsel for the plaintiffs invited my attention to a decision of Allahabad High Court in the case of Pt. Sithnath Shukla v. Punjab National .Bank of India Limited (AIR 1960 All. 238). In this case the plaintiff paid a sum of Rs.6,000 to the defendant‑bank for preparation of a draft in the name of one Dr. Ram Narain of Luknow. A draft was prepared and handed over to the plaintiff. The plaintiff, however, retained the draft with himself and did not hand it over to Dr. Ram Naran Shukla. He informed the defendant‑bank that the draft should be cancelled and money paid back to him. He also offered to furnish an indemnity bond for the amount though he contended that it was not necessary. The defendant‑bank refused to pay the amount to the plaintiff. The plaintiff, therefore, sought to recover Rs.6,000 originally deposited by him for the purchase of the draft and Rs.300 interest thereon at the rate of 6$ per annum. The total amount claimed was thus Rs.6,

300. The bank contested the said suit. It was contended on its behalf that the draft having been prepared in the name of Dr. Ram Narain Shukla had been handed over to the plainitff and hence he (the plaintiff) had no authority to cancel the instrument already acted upon and it was only Dr. Ram Narain in whose name the draft had been prepared who could claim the amount. The bank's case was that the plaintiff had no right left and could not get the amount or any interest thereon. The learned trial Court dismissed the suit as in its opinion the plaintiff /purchaser could not give valid discharge and hence the defendant bank was not liable to pay the amount claimed by the plaintiff. It was contended on behalf of the plaintiff that he was the purchaser of the draft and had retained it all along. Though the draft had been prepared in the name of Dr. Ram Narain it had never been delivered to him and his right to claim the amount of the draft had, therefore, not arisen. The Allahabad High Court ultimately held as under: "As the draft was never actually delivered to Dr. Ram Narain Shukla in whose favour it had been issued no right accrued in favour of Or. Shukla. Before the delivery of the draft to him there was nothing to debar the plaintiff from counter manding its payment and from directing the defendant to cancel the draft and to pay back its amount to him . In fact he (Dr. Shukla) could not have presented it because it remained all alongwith the plaintiff and it could not have been handed over to him. The defendant could not, therefore, apprehend that any claim would be made against it on the basis of the draft by Dr.Shukla and that it would have to pay the amount over again to him after it had paid it to the plaintiff." It also seems appropriate to extract the following passage from this judgment: "But it does not follow from the above that a draft cannot be countermanded or its payment stopped in any circumstances. The difficulty in countermanding or stopping payment of the draft can arise only when the draft had already passed into he hands of the payee or had been endorsed in favour of another person. Delivery is one of the essential ingredients of the making, acceptance or endorsement of a negotiable instrument. The contract on a negotiable instrument is without delivery incomplete and revocable. It is, therefore, only after delivery that the payee of the draft can claim ‑any rights in respect of it and become entitled as a holder to receive or recover its amount." 8., Mr. Abbas Ahmed also vehemently urged that the pay . order is not an ordinary cheque or even a back draft. It is issued by a bank in favour of a specific named payee or his order and hence acquires a good and complete title to the instrument if it proves its delivery to him. The learned counsel submitted that the plaintiffs have proved through un-shattered evidence that the pay order in question had, been duly submitted/ delivered to the plaintiffs by the purchaser and hence they had become entitled to get the amount of pay order. According to the counsel, the defendant encashed the pay order negligently without getting it duly endorsed in favour of the purchaser from the payee, namely the Chief Engineer of the plaintiffs. In this connection the counsel placed reliance on a judgment of the Privy Council in Commissioner of Taxation v. English Scottish and Australian Bank Limited (1920 P.C. 682). In this case their Lordships cited with approval the judgment of Isaacs, J, of the High Court of Australia in the case of Commissioners of State Savings Bank v. Permewan, Wright & Co. (19 C.L.R.457, 478): "Apart from the well‑established rule that whether or not the evidence establishes that a person acts without negligence is a question of fact, the legal principles found in Morison v. London County and Westminster Bank, and relevant to the present, are (1) that the question should in strictness be determined separately with regard to each cheque; (2) that the test of negligence is whether the transaction of paying in any given cheque was so out of the ordinary course that it ought to have aroused doubts in the bankers' mind, and caused them to make inquiry." Their Lordships of the Privy Council then observed: "If there be inserted after the words "given cheque the words "coupled with the circumstances antecedent, and present," their Lordships think this is an accurate statement of .the law." The Privy Council then held as under:‑ "It follows that, being a question of fact, it is really impossible to lay down rules or statements which will determine what is negligence or what is not. Each case must be determined on its own circumstances."

9. Mr. Abbas Ahmed lastly submitted that having proved that the pay order had been delivered by the firm to the plaintiffs, the I defendant's liability to pay the amount of the pay order to or to the order of the plaintiffs is established. According to him, it is, therefore, immaterial whether the defendant had the knowledge of its being deposited with the plaintiff or not and that the defendant cannot legally escape its liability to pay' the amount of pay order to the plaintiffs by contending that it had no knowledge of the pay order having been deposited with the plaintiffs. The absence of knowledge of the defendant was, according to the counsel, of no effect. 10. iNr. Mansoorul Arfin, the learned counsel for the defendants, on the other hand, contended that the defendants did not know that the pay order had been delivered to the plaintiffs. There is nothing in evidence to show that the defendants had the knowledge of the pay order having been delivered by the firm to the plaintiffs. The counsel submitted that the firm as the purchaser had the right to get the payment of the pay order upon its presentation as held by the Allahabad High Court in the case referred to by the plaintiffs i.e. A.I.R.1960 A11.238. In this connection the learned counsel also invited my attention to the following authorities: (i) In re Travancore National and Quilon Bank Limited, S. Barkat Ali & others‑‑ Petitioners (AIR 1940 Mad. : In this case the Bank, which went into liquidation later on, was paid a sum of Rs.5,000 for getting a draft in exchange drawn by the Bank on its Raja Palayam Branch in favour of one Raja Sankar. The depositor claimed the payment of this amount in preference of the ordinary creditor's of the Bank. The creditors' intention was that the amount was specifically entrusted to the Bank for'' the specific purpose of being transmitted to Raja Sankar through the Bank's Branch at Raja Palayam. The official Liquidator denied this fact and submitted that this purchase of draft was nothing more than an ordinary Banking transaction done in the usual course of business. The Madras High Court held: "The money was not entrusted to the Bank for any specific purpose ‑and the Bank did not receive the money in the capacity of an agent for applying the said movies for specific purpose." The preferential payment in regard to this amount was disallowed. This case has, in my opinion, no direct bearing to the facts of the case in hand. (ii) In the Matter of the Indian Companies Act, 1930 and of the New Bank o India Limited, Amritsar (AIR 1949 East Punjab (373). By this single judgment the High Court of East Punjab decided 5 different petitions which were made for the issue of directions to the Bank for payment to the petitioners in full of the amounts of their respective drafts. The petitioners had obtained the drafts, in different sums, from various branches of the Bank. The drafts were, however, admittedly not presented to the Bank before the declaration of Moratorium. In all the cases on the basis of the evidence on record of each case, it was held that the respective petitioners were entitled to claim the amount of the cone‑erred drafts. The question thus arisen in all the petitions for decision was whether the petitioners or. any one off them were entitled to the payment in full of the amounts claimed by them or they must rank with the general body of creditors and content themselves with receiving only such dividends as are payable under the claim to such creditors. In all these petitions before the East Punjab High Court the purchaser had obtained the bank drafts drawn by one branch of the respondent‑bank on another branch of the same Bank, either for the transfer of their own money or in favour of third parties with whom ‑the purchaser had privately settled upon, the Bank refused to honour the drafts. In certain cases the drafts were presented before, and in certain other cases after the declaration of Moratorium; the question, as stated above, had arisen in all these petitions. The East Punjab High Court held that (i) a draft is a negotiable instrument; (11) on the face of it the relationship between the holder of the draft and any prior party is that of a creditor and a debtor; (iii) that the prior party of these petitions was the respondent‑bank and hence the petitioners were to be regarded as their creditors and paid in terms of the scheme; (iv) where a bank remits certain sum of money for the express purpose of such sum being paid to a named individual or his nominee, the sum must be deemed to have been specifically appropriated for the purpose of such payment, the payee which had the right to be adjusted with sum in full and cannot be obliged to rank with the general body of creditors, his having accepted a draft for the amount drawn on the branch or the bank notwithstanding. (iii) The Traders Bank Limited v. S. Kalian Singh (AIR 1953 Punjab 194). In this case also the respondent had purchased a draft on the appellant's dairy branch for an amount of Rs.11,000 on 17‑9‑

79. During the period the 27th September, the respondent endeavoured to cash the draft but it was refused by the Bank on the ground that advice from Amritsar had not been received. On 26th September, 1947 in Moratorium it was declared by the Government. The respondent's plea was that the Bank had accepted his money as a trustee and hence he was entitled in equity to preference over the ordinary creditors. Upon appreciation of the evidence on record, the Court declined to accept the respondent's contention and held that it was nothing but a case of ordinary creditor and debtor.

11. All the above‑noted cases cited by Mr. Mansoorul Arifin are manifestly distinguishable on their own facts and have thus no direct application to the facts of the case in hand. The purpose of the learned counsel to refer to these cases appears to be, perhaps to show that there remains a right vested in the purchaser of the draft to get the payment of the specified amount from the Bank and that the issuance of a draft by a Bank results in the creation of a relationship of debtor and creditor between the purchaser of the draft and the Bank.

12. In the instant case it is evidently borne out and stands proved from the unshattered evidence of P.W. Irshad Ahmed Khan that the firm (Haji Moosa & Sons) had submitted a tender for the consideration of 54‑H type quarters for the Customs Department for 'the estimated cost of Rs.19,47,000 and that alongwith the tender 4$ of the estimated amount viz. Rs.77,880, in terms of the tender notice, through a pay order in favour of Chief Engineer, K.P.T. It is also admitted by the defendants in their written statement that under the terms of the tender notice to the tenders were required either to deposit in cash or to deposit the pay order in lieu of cash amount being 4$ of they estimated cost of Rs.99,47,000 as earnest money viz. Rs.77,880 (See parse.. 4 of the plaint and the written statement). There is no evidence in rebuttal led by the defendants and hence there is no escape from the conclusion that the pay order in question had gassed into the hands of the payee, that is, the plaintiffs' Engineering Department. I hold accordingly. Now in so far as the second part of first above‑noted issue is concerned there as undoubtedly no evidence prevalent on record to hold that the defendants had knowledge of its being deposited with the plaintiffs. The witness of the plaintiffs hay in cross‑examination clearly admitted that the plaintiffs did not intimate the bank about the receipt of the pay order. It, therefore, now remains` to be examines as whether the plaintiffs were under' any legal or contractual obligation to inform the defendants about the deposit of the pay order by the firm with them. It was neither so specifically pleaded by the defendants nor proved through any evidences that the plaintiffs were under legal or contractual obligation to intimate the plaintiffs about the negotiation or deposit of the pay order by the firm. It is, however, an admitted fact that the payee of the Pay Order is 'the Chief Engineer, K.P.T, or. Order'. The payee is, as the term imports, the person to whom the drawer primarily intends, undertaker and directs the payment of the amount of pay order to be made, rests entirely with the payee of the pay order either to encash it himself or negotiate it further, if it is made payable on order. The liability of the drawer Bank to pay the specified amount of the Pay Order to the payee or his endorsee does not come to an end or in any way ceases to continue on account of or as a result of ` the payee's failure to intimate the Bank that the Pay order has been duly received by him. For these reasons, I am clearly of the view and so do hold that the defendant‑bank in the instant case had no Knowledge of the Pay Order having been deposited with the plaintiffs nevertheless upon .actual delivery of the Pay Order to the plaintiffs the contract on this negotiable instrument .became complete and' irrevocable. The issue No :l is answered accordingly. ISSUE N0.2:. A bare perusal of the Pay Order (Ex.5/2 ) clearly shows that it does not contain any stamp of the plaintiffs' Engineering Department. It is, however, of significance and cannot absolve the defendants of their primary responsibility to pay the amount of the Pad Order to the plaintiffs if the essential ingredient of delivery c thereof to the plaintiffs is proved, which has been proved as already held. The plaintiffs' ease is that without an endorsement and the stamp of their Engineering Department. the defendants were not expected to have paid the amount of the hay ‑Order #o any person other than plaintiffs‑payee. The learned counsel for the defendants, on the other hand, pleaded that since the Pay Order favouring the Chief, Engineer K.P:T. was issued at the instance of the plan of Haji Moosa & Sons, the said firm had a lawful right to tender the said Pay Order and claim of the payment of the amount specified therein. The defendants were thus, according to Mr. Mansoorul Arfin under a legal obligation' to pay the maid amount to the purchaser since a relationship of debtor and creditor had come into being upon'' the issuance of the Pay order, in question at its instance. The Pay Order was tendered by the purchaser and it was sufficient for the defendants to presume that `there had been no delivery of .the Pay Order to the payee and hence the purchaser was entitled to get back the amount paid by him to the defendants, against the issuance of the Pay Order. The counsel further urged that there is no law which renders it imperative upon the defendants to ask for any specific direction from the payee or an endorsement of discharge.

13. I have given due consideration to the respective‑ submissions of both the counsel and I am of the opinion that the absence of the plaintiffs' Engineering Department stamp on the Pay Order clearly indicates that the payee had neither discharged nor endorsed the` said pay order nor had. it presented the same for payment. The Deputy Chief Engineer of the plaintiffs in his letter dated March, 13, 1974 (Ex.5/1) addressed to the Manager Commerce Bank Limited (predecessor‑in‑interest of the Defendant Bank), after mentioning Pay Order number and date stated that the party had taken away the Pay Order for discharge when the Chief Engineer, K.P.T. had not endorsed the Pay Order but someone had signed for the Chief Engineer. Likewise the letter of the Vice‑Chairman of the plaintiffs dated 15‑4‑1974 (Ex.6/5) makes a mention that the "Bank has been grossly negligent in discharging the Pay Order without verifying the correct endorsement anti consequently I hold the Bank responsible for the loss sustained try . the K . P . T . " Similarly in his D . O . letter dated 16‑5‑1974 the Chairman of the plaintiffs to Mr. Yousuf, President Commerce Bank Ltd. mentioned that the Pay Order was encashed by M/s. Haji Moosa & Sons in spite of the fact that it was not discharged by the Chief Engineer, K.P.T. in whose name it was drawn. From' all the. documents it is clearly discernible that the plaintiffs were, under an impression that the Pay Order issued by the defendants in' favour of the plaintiffs' Engineering Department could not be encashed' without there being endorsement of the plaintiffs thereon and hence they presumed, while addressing the various letters to the defendants) as well as at the time of drafting acid presenting the plaint that the' Pay Order in question should bear the stamp of their Engineering'' Department and that it could not but be a forged endorsement. photostat copy of the Pay Order was asked for by the plaintiffs from the defendants vide Exh. 5/10 but it was not supplied to them. The plaintiffs all alone remained. under the belief that the Pay Order was encashed by putting the stamp of the plaintiffs' Engineering Department and through a forgery of the signatures of the payee The absence of the stamp of the plaintiffs' Engineering Department shows that the) Pay Order was neither discharged nor presented for payment to the 1. defendants. The overall effect of the absence of the Stamp of the[ plaintiffs' Engineering Department on the Pay Order is that the Defendants Bank had no reason to believe that it had been discharged so as to make the purchaser thereof i.e. Haji Moosa & Sons entitled to get the payment from the defendants. ISSUE N0.3: The plaintiffs' witness has deposed, without being controverted or challenged during his cross‑examination by the defendants, that according to the terms of tender, if the tender was withdrawn, this amount of earnest money was to be forfeited. This term was accepted by the firm, when it filled the tender form containing this clause. The firm withdrew its tender within the period of validity from 13‑3‑1974. However, this issue is, in my opinion, not pertinent or required to be finally adjudicated in this suit, since the plaintiffs have based their claim on the Pay Order irrespective of the fact whether the plaintiffs had suffered any loss or not as is evident from the contents of para. 13 of the plaint. ISSUE N0.4: On this issue there is, firstly, the uncontroverted evidence of P.W. Irshad Ahmed Khan, who has deposed that "the Pay Order which was in our office was somehow taken away by Haji Moosa & Sons who encashed it." Ex.S/1 and Ex.S/3 also make a mention of this fact. The defendants in their letter to the Chairman of the plaintiffs Ex.S/4 have also stated "that on 22nd March, 1974 M/s. Haji Moosa s Sons presented the said Pay Order for cancellation and encashment on the basis of its alleged non‑ utilisation by them and in support of their statement they executed an indemnity bond." Similarly in Ex.5/9 the defendant Bank has acknowledged the fact that the Pay Order had been encashed by the purchaser on 22nd March, 1974 by way of cancellation of the instrument and an endorsement of the purchaser himself. This issue is, therefore, answered in the affirmative. ISSUES NOS.S, 6 6 7: The issues Nos.S and 7, in my opinion do not as such are out of the pleadings of the parties and they do not, therefore, call for any adjudication. In so far as issue No.6 is concerned, Mr. Ahmed Abbas, the learned counsel for the plaintiffs sought to place reliance on Section 88 of the Karachi Port Trust Act, 1886;_ whereas Mr. Mansoorul Arfin, the learned counsel for the defendants submitted that this section is being wrongly pressed into service to the facts of the instant case. It would have, according to t' him, a relevancy if a suit would have been filed against the Board (K.P.T.). In this behalf I agree with Mr. Mansoorul Arifin. These issues are, therefore, disposed of accordingly. ISSUES NOS. 8, 9 & 10: These three issues do not seem to be relevant or the purposes or‑the suit and I, therefore, do not consider it necessary to adjudicate them. Moreover, I apprehend, any findings on these issues may cause prejudice to the case of the plaintiffs or the firm if any action is commenced by anyone of them against the other in respect of the matters covered by these issues ISSUE N0.11:' This issue must be answered against the defendants for the obvious reason that there was no time fixed in the Pay Order for its encashment by the plaintiffs. There does not exist any evidence on record to establish any negligence on the part of the plaintiffs in not encashing the Pay Order. It is, therefore, answered accordingly. ISSUE N0.12: By issuing the Pay Order in favour of the plaintiffs, the defendants made themselves liable as per promise made by them therein to pay the amount thereof to the plaintiffs or their order. The defendants had admittedly drawn the Pay Order in the name of the Chief Engineer., Karachi Port Trust and hence they were bound to pay the amount mentioned therein to the payee, upon the delivery thereof to them. It is inferred from A.I.R.1960 Allahabad 238 (discussed) above) that the contract on negotiable instrument on delivery becomes l complete and irrevokable, I respectfully endorse this view and answer) the issue accordingly. ISSUE N0.13: Mr. Mansoorul Arifin submitted that the firm (Haji Moosa &Sans) should have been also impleaded as a party and in their absence the suit is bad for non‑joinder of necessary party. I do not feel inclined to agree with him since the suit is based on the Pay Order which was issued, by the defendants favoring the plaintiffs. The firm undoubtedly had purchased the said Pay. Order from the defendants nevertheless having delivered the Pay Order to. the plaintiffs, it was no more a necessary party to this suit. The issue is answered accordingly. ISSUE N0.14: ‑ Mr. Mansoorul Arfin submitted that there is nothing on record to show that Mr. L.D. 'Lima' Secretary of the plaintiffs had the authority to file the suit and to sign the plaint. The suit has been filed by the trustees of the Port of Karachi as is required to be dune personate to Section 4 of the Karachi Port Trust Act. It lies been verified by the Secretary of ills Plaintiffs and I do not find that any valid objection can be raised of the plaint having been verified by r. M.D. 'Lima, Secretary of the plaintiffs. The verification is in accordance with the provisions of Order XXIX C.P.C. It is held accordingly. , ISSUES NOS. 15. 16 & 17; The Plaintiffs are entitled to the decree for ks .77,880 with 13 interest from the date of filing the suit till the recovery thereof as well as the cost of tile suit. The defendants knowing it fully well that they were primarily responsible to pay the amount mentioned in the Pay Order to the beneficiary named therein Clad paid the amount to the firm believing its statement and without getting it confirmed from the plaintiffs, by save guarding their interest by obtaining a Letter of Indemnity from ‑the firm (Ex.6/2). Hence the defendants, in turn, may recover the said amount from the firm on the basis of the said document. The suit is decreed in favour of the plaintiffs as above. Consequently, the defendants are not entitled to any special costs as claimed. M.B.A./T‑34/K Suit decreed.