1988 PLP 454 (MLD)

SALEEM AKHTAR, J.‑‑The Petitioners had applied for loan to the respondents for setting up a Cotton Textile Mill at Chunian, District Kasur which was accepted by the respondents on terms and conditions contained in the letter of sanction dated 25‑3‑1988 and accordingly an allocation of U.S. $ 5 million being "allocation of foreign exchange" undor World Bank Loan was made which was to remain reserved for the petitioners, project. The Petitioners paid the commitment charges. The respondents issued international tender notice dated 4‑6‑1987 inviting tenders for purchase of machinery to be purchased by the petitioners under the World Bank Loan. After tenders were opened in the office of the respondents, by letter dated 2‑7‑1987 they informed the Petitioners about the machinery approved by them aggregating to the value of U.S. $ 5.074.581. However, the respondents failed to open a letter of credit as it transpired that the matter had been referred to the Capital Co‑evaluation Committee, a body set up under the Chairmanship of the Chairman of Pakistan Banking Council, and the Presidents of the nationalised commercial banks and Development Finance Institutions. It is alleged that the object of this committee is to evaluate whether capital cost of the plant and machinery to be imported for industry is proper and will not result in loss of foreign exchange. The Committee did not find any T objection, but exercising coercive authority for realisation of demands of the bank and financial institutions vetoed the sanction although this was none of the functions of this committee. The respondents therefore, did not open the letter of credit. Consequently on 4‑11‑1987 the Petitioners filed Constitutional Petition No. 1450/87 for necessary directions in which the present respondents and the Committee were cited as respondents. In this petition, the power of the Committee was challenged. In the comments filed by the respondent No. 1 it was stated that in the light of Federal Government's directives, the respondents (I.D.B.P.) cannot open letter of credit without prior approval of the Committee in face of over-dues sister concerns of the Petitioners owe to I.D.B.P. It is alleged that in the terms of section no such condition was imposed. The Committee, however, submitted that capital evaluation certificate would be duly issued and was in fact issued without any condition. In view of this assurance the petition was withdrawn on 26‑11‑1987. On 3‑11‑1987 the respondents while replying to Petitioners justified their action to refer the matter to Pakistan Banking Council as the Sponsoring Directors of the Petitioners hold substantial interest in Shahryar Textile Mills and Fazal Sugar Mills Ltd., which have not paid their dues to the I.D.B.P. The Petitioners by their letter dated 12‑11‑1987 denied that these two companies are units of the Petitioners and alleged that Shahryar Textile Mills Ltd., and Fazal Sugar Mills Ltd., are independent companies and have nothing to do with the Petitioners. The Respondents by their letter dated 29‑11‑1987 informing that the Capital Cost Evaluation Committee has approved the prices and machinery asked the Petitioners to submit a revised contract in terms of the approval. They also demanded that in terms of clauses 4 (i) and 8 (vi) of the Sanction letter the Petitions should clear the entire overdues in respect of Central Cotton Mills Ltd., and produce no objection certificate from N.D.F.C. regarding amicable settlement of issues in the case of Fazal Sugar Mills Ltd., before opening letter of credit subject to the compliance with other terms of the letter of sanction. The Petitioners, however, maintained that the dues demanded fromthem do not fall within the ambit of clause 8‑(vi) of the sanction letter, nor is it reasonable and in any case does not lie within the respondents' power contractual or otherwise to make the demand in respect of the dues payable to I.D.B.P., and other units with none of whom the petitioners have legal affinity, alliance or nexus and neither of them is a unit of the petitioners or financed by I.D.B.P. in that capacity. The petitioners have therefore, challenged this action of the respondents and seek the following reliefs:‑ (i) to declare that clause (vi) of para 8 of the Sanction Letter, dated 25‑3‑1987, (Annexurc "C") does not take within its contractual or other scope the epayment by public companies/companies parties mentioned or contained m the Respondents' impugned order dated 13‑4‑1988 (Annexure "Q") and the Respondents' order is illegal and of no legal effect; (ii) to further declare that the Respondents cannot demand securing the payment and/or repayment from the petitioners of any amount due by (i) Central Textile Mills Ltd., (ii) Central Cotton Mills Ltd. (iii) Shahryar Textile Mills Ltd. (iv) Fazal Sugar Mills Ltd., or any other of the said demand is to IDBP, NDFC and/or NCBs or DFIs, unlawful and of no legal effect; (iii) to also declare that clearance of overdues and stuck‑up advances in all your associated concerns; is wholly misconceived and the direction to produce the `no dues certificate' from them is unwarranted in law and of no legal effect; (iv) to direct the Respondents to refrain from the aforesaid illegalities and do what is legally to be done by them, viz. to proceed with the due performance and finalization of the contract as contained in the Sanction Letter (Annexure "C") and not to obstruct or bar such fulfilment and compliance by demands which are illegal and of no legal effect; (v) to direct the Respondents not to allow the World Bank Loan to lapse and to forthwith establish conforming letters of credit in accordance with the foreign machinery contracts in favour of the foreign Manufacturers and Suppliers and also to perform the part of the Sanction Letter/Contract relating to the local currency etc. i.e. due compliance in full of the Contract". From a perusal of the facts and allegations made by the Petitioners it is clear that on terms of letter of sanction dated 25‑3‑1986 the respondents had agreed to finance the Petitioners' project which inter alia provided the following Special Conditions clause 8 (vi):‑ "(vi) The sponsors will clear overdues if any in respect of their units financed by I.D.B.P." The dispute between the parties revolves round clause 8 (vi) of the letter of sanction which is, a term of contractual commitment between the parties. The respondents treating Central Cotton Mills Ltd., Shahryar Textile Mills Ltd., and Fazal Sugar Mills Ltd., as units of the Petitioners called upon them to clear their dues as required by clause 8(vi). The petitioners deny that these companies are their units. In other words the petitioners are aggrieved of the respondents' action as they in breach of their contractual obligations and commitments require the petitioners to pay the dues which they are not liable under the letter of sanction and further that in breach of agreement the respondents have failed to open letter of Credit. The averments made in the petition involve disputed questions of facts. The petitioners are alleging breach of contract by the respondents and want the contractual commitments to be enforced by invoking constitutional jurisdiction of this Court. The relief s sought by the petitioners clearly demonstrate that they are seeking declaration for the enforcement of the terms of contract and direction to the respondents to comply with the contractual obligations as contained in the A letter of sanction. It is well settled that a contract cannot be enforced through a Constitutional Petition. Reference can be made to P L D 1986 Quetta 181, and P L D 1987 Lah.

262. We therefore, dismiss the petition in limine. AA./C‑54/K Petition dismissed.