1980 PLP 75 (CLC)

At the request of all the counsel the arguments on Misc. Application No. 618/78 for attachment before judgment and Misc. Application No. 868/78 for interim injunction have been heard together. This order will dispose of the said two applications. Briefly the facts relevant for the present purpose are that this suit has been brought in the name of Southern Cooperative Society Limited, which is a society registered under the Cooperative Societies Act, 1925. The Managing Committee of the plaintiff society seems to have been super seded as a result of an enquiry under section 43 of the Cooperative Societies Act, 1925, and an Administrator has been appointed to manage the affairs of the society. Before its supersession defendant 2 Mr. K. A. Majid, who was the Controller of accounts in the Muslim Commercial Bank Limited was the Secretary of the society since a long time. The plaint in this suit discloses a woeful story of the state of affairs prevail ing as regards the management, of the society, particularly in regard to its financial and monetary matters. But for the present purposes suffice it to say that according to the plaintiff defendant 2 being the Secretary of the society entered into dishonest concert with defendant 1 in order to defraud the society of its funds which were made up of con tributions made by the members by way of fixed deposits, allotment deposits, share capital and reserve fund. In substance the case of the plaintiff is that defendant 1 was awarded the contract by agreement dated 2-5-1969 to construct houses for the society for the benefit of its members on a plot of land situate in Deh Gujro Tapo Taluka, Karachi, This agreement made reference to another agreement between the parties of the same date whereby the defendant 1 had agreed to transfer the land required for the project to the society in respect of which the said defen dant had obtained a decree under the terms of which he was to acquire title thereto. Thus, defendant 1 had undertaken to arrange for construc tion of residential houses of various sizes/designs as per the plan and schedule attached with the agreement. The agreement also provided that defendant 1 will make efforts for obtaining loans to the individual allottees of plots. It was provided that all running bills in connection with the development work, construction of houses etc. will be paid by the Secretary of the society to defendant I direct or to any other party as directed by the latter to the extent of 90% of the work completed or alternatively to the extent of 75% of the cost of the material at site. The society also undertook to pay a sum of Rs. twenty lacs to the Registrar of Cooperative Societies in liquidation of the said defendants' debts. By way of consideration for the aforesaid, defendant 1 was to be transferred the ownership of the commercial plots as approved by the K. D. A. without payment. In addition the defendant was also entitled to the available amount remaining in balance after meeting all dues in respect of the land and construction of houses subject to a deduction of Rs. three lacs as handling charges by the society. It is alleged by the plaintiff that pursuant to the aforesaid agreement, in furtherance of the collusion between defendants I and 2, before the construction started in 1973 the latter started making huge payments to defendant 1 right from 19-4-1969. The plaintiff claims that a total pay ment of Rs. 68,04,172.38 was made to the defendant 1, before commence ment of the construction. It is further alleged that the account books obtained by the Administrator of the plaintiff society reveal that total payments made up to June, 1.974 are in the order of Rs. 1,44,65,137.18 for the construction of the houses. It is admitted by the plaintiff that through a registered deed of conveyance dated 13-6-1974 defendant 1 transferred to the plaintiff society 190 plots of land with houses construct ed thereon for a total consideration of Rs. 1,23,50,

000. These houses were constructed on land other than the one in respect of which the original agreement between the parties dated 2-5-1969 was executed. As to the receipt of consideration the conveyance deed recited that defen dant 1 had borrowed a sum of Rs. 55 lacs under a mortgage deed from the Muslim Commercial Bank Limited which was undertaken to be repaid by the society and as regards the balance of Rs. 68,50,000 the deed recited the acknowledgment by defendant 1 of having received this amount from the plaintiff before the execution of the deed. It was alleg ed that even these 190 houses were not completed as revealed by the report of the Nazir whose inspection report says that most of the houses have not been constructed above the plinth level. On these allegations the plaintiff alleged fraud and collusion between defendants 1 and

2. According to the plaintiff the value of houses in their present condition would be about Rs. 57 lacs and therefore it has claimed a decree for rendition of account for the monies received by defendant 1 and in the alternative for a sum of Rs. one crore. The present two interlocutory applications have been submitted in respect of the land bearing Survey Nos. 1.12 to 116, comprising 19.27 acres in Deh Gujro Tapo Songal, Taluka Karachi in respect of which the original agreement between the parties for construction of houses was entered into. The land on which the 190 houses are built which were transferred by defendant 1 to the plaintiff is a different land bearing Survey Nos. 119, 120, 121 and 615, measuring in all 16-16 acres. The plaintiff now seeks attachment before judgment of the first mentioned land in one of the applications and interim injunction in the other to restrain defendant 1 from disposing of the aforesaid land, on the ground that the said defendant has no other property to satisfy the claim of the plaintiff. As far as the prayer for injunction is concerned, it may be stated at the very outset that the plaintiff does not claim any right or interest or any special equity in the aforesaid land which is the property of the first defendant. The only avowed object for seeking relief in 9ie two appli cation is to protect the claim of the plaintiff. and prevent the ultimate decree obtained by the plaintiff from being defeated for want of adequate assets by defendant

2. The primary question to be considered for the just decision of these two applications is therefore, the question whether prima facie case. As held the plaintiff has succeeded in making out a pima of by me in Muhammad Yousaf v. Ameer Muhammad (P L, D 1976 Kar. 926) jurisdiction under Order XXXVIII, rule 5, C. P. C. is of extraordinary nature, to be exercis ed sparingly and Court should be satisfied that defendant is about to dispose of the whole or part of his property with intent to obstruct or delay execution of any decree which may b: passed against him. In Nazam Din & Sons Limited, Karachi v. m. v. "Wroornee" (P L D 1977 Kar. 722) once again I had the occasion to observe that attachment before judgment cannot be ordered as a plaintiff of course only on the ground that the plaintiff had good case at the trial and is to be ordered in exceptional cases only when conditions prescribed by law are satisfied. Thus it would appear that the law has provided stringent conditions on the exercise of jurisdiction in the matter of order of attachment before judgment which inevitably imposes very harsh restraints on the right of property and freedom of contract touching immovable property. Since the other application for injunction also substantially seeks the same end, in my view same considerations should apply to consideration of both appli cations. The perusal of the relief clause of the plaint clearly indicates that basically the suit of the plaintiff is for an account. The question whether the plaintiff would be entitled to a specific amount of money and to what extent is yet to go to trial, however, it was urged on behalf of the plain tiff that it has a strong prima facie case. As to the basic contract which created the contractual relations between the parties it was argued that the defendant 1 had abandoned the contract by which it was suggested that after receiving considerable amount of money the said defendant failed to fulfil his obligations under the contract to build houses on the land which was the subject-matter of the two agreements dated 2-5-1969. On the other hand it was strongly contended on behalf of defendant 1 that the breach occurred on the part of the plaintiff who did not honour its obligations under the contract. It was accordingly urged on behalf of defendants that the contract did not subsist and no rights can be claimed on the said contract between the parties. It was further sub mitted that the agreement dated 2-5-1969 was dependent upon the plain tiff acquiring the land in pursuance of the connected agreement of the same date but the plaintiff failed to perform the conditions stipulated in the said connected agreement, which had the effect of frustrating the con tract. In his counter affidavit defendant I had testified to these facts and had alleged that the subsequent transaction of sale of 190 houses was entered into by the parties in lieu of the original contract. Referring to this contract the defendants also denied having received prior to the sale the amount of Rs 68,04,172.58 and complained that this amount was represented by the plaintiff's Secretary to have been paid to various parties on his account. He further stated that the loan of Rs. 55 lacs out of the sale consideration undertaken to be discharged by the plaintiff was also not paid by the plaintiff to the Bank. Thus defendant 1 denied hav ing received the entire consideration for the sale of 190 houses and complained of fraud having been practised upon him by the plaintiff. There is no denial of this allegation that the plaintiff has failed to pay Rs. 55 lacs. In this context it is important to note that in the present suit the plaintiff is not challenging the validity of the sale transaction. and seems to claim title to the 190 houses transferred to it. It is also clear that no payment was made at the time of the sale and the considera tion for the same was partly stated to have been received prior to the transaction and to the extent of Rs. 55 lacs arrangement was made to make the payment directly to the Bank. Therefore, the plaintiff have been transferred substantial property of the value of Rs. 12,35,000 as per deed of sale, which is not being challenged in this suit. It was, however, argued on behalf of the plaintiff that the consideration was for houses in complete condition but as revealed subsequently by the report of the Nazir, most of the houses are incomplete. On this basis it was contended that the real value of the property transferred to the plaintiff would at the most be about Rs. 57 lacs and, therefore, the plaintiff is entitled to the refund of the balance of consideration. However, in this behalf the plea taken by the plaintiff in para 9 of the plaint is that a survey has begin ordered by the plaintiff's administrator by an architect to evaluate the construction in its present stage to determine the cost of the same. But the survey is admittedly in progress and there is no evidence as to the value of the property determined by the surveyor, prima facie, there fore, it is not understandable how the plaintiff can base his claim on an ad hoc assessment that the value of the property is not equal to the consideration mentioned in the sale document. In any case in seeking to press this claim the plaintiff has deviated from the cause of action set out in the plaint which is based upon the right of the plaintiff to demand an account of the payments made to defendant l in pursuance of the original agreement. On the other hand the sale transaction which was not contemplated by the original contract, seems prima facie, to support the submission of defendant 1 that the original contract was abandoned, otherwise the plaintiff would not have accepted the transfer of other pro perty instead of the work entrusted to tie defendant to construct houses on the land referred to in the original contract. As to the alleged payments made to defendant I as enumerated in the plaint, besides denying the receipt of the amounts it was pointed out by the learned counsel for the defendant 1 that besides 190 houses men tioned above the plaintiff have been transferred 6 houses on 240 sq. yds, each 8 houses on 120 sq. yds. each, 56 houses on 120 sq. yds. each and 20 houses on 200 sq. yds. each on different pieces of land. The value of all this property, according to the learned counsel was far in excess of the total fund at the disposal of the plaintiff as set out in the plaint. On these facts the defendant I complained of fraud being practised upon him by the Secretary of the plaintiff, for which he has filed a separate suit being Suit No. 490/77, against the plaintiff and its Secretary in this Court. In view of what has been stated above I am not satisfied that the plaintiff has made out a prima facie case. Additionally, it was argued that the land which is being sought to be attached is required by defen dant l in connection with his business. It was stated that the defendant's business is that of a building contractor and he constructs houses on land acquired by him which are then disposed of by him. The grant of relief prayed for will therefore amount to depriving him of his business which may not be justified and the intention of the defendant is therefore not to defeat the decree that may be passed against him but the disposal of the disputed property would be in the ordinary course of his business. Therefore, there is no justification to put restraint on the plaintiff as pray ed for. For the foregoing reasons there is no merit in these two application which are, therefore, dismissed. S. G. D. Petitions dismissed.