1986 PLP 303 (CLC)

(c) temporary injunction restraining Uzin from wrongfully invoking Article 37 of the contract and/or dispossessing M IC from the site; and (d) temporary injunction restraining Uzin from using, selling, removing or ‑dealing in any manner with the plant, equipment and machinery at site. Except for temporary injunction sought by the respondent against the Union Bank of Middle East Ltd. from making any payment under the Bank guarantees, this application with reference to all other reliefs claimed therein is being disposed of in the connected Appeal No. 38 of 1985. Hence the same need not be repeated. Mr. Muhammad Sharif, the learned counsel for the respondent contended that Suit No. 383 of 1984, is a suit for recovery of money simpliciter. The Bank guarantees and performance bond have not been challenged therein and no prayer has been made in the suit for the permanent injunction restraining Bank from making payment under the Bank guarantees and performance bond. In fact it was claimed as a set off in the written statement in another suit, which has been subsequently turned into the present suit after the withdrawal of that suit. Since no perpetual injunction is claimed by the appellants no question of granting ad interim injunction can possibly arise. Mr. Muhammad Sharif, relied upon Marghub Siddique v. Hamid Ahmed Khan 1974 S C M R

519. This case related to a service matter and the petitioner had approached the Supreme Court against the order of the First Appellate Court and the High Court refusing to, grant interim injunction to the petitioner, although the same had been granted to him by the trial Court. The Supreme Court, while dismissing the above observed that the petition must fail because interim injunction could not have been granted as no perpetual injunction was claimed. We find ourselves in respectful agreement with the above pronouncement of the Supreme Court and hold that the learned Single Judge was right in coming to the conclusion that no temporary injunction could be granted to the respondent in respect of encashment of Bank guarantee and performance bond in view of the principle laid down in 1974 S C M R

519. Hence as the Supreme Court has held, this application for ad interim should have been dismissed on this ground alone. The above ruling of the Supreme Court has been followed in a number of decisions particularly one of our own High Court reported in 1985 C L C

261. Mr. Kahlid M. Ishaque who appeared for the appellant cited in his support P L D 1962 S C 119, P L D 1975 S C 25, P L D 1980 S C 146, A I R 1962 S C 527 and 1949 Patna

496. All these rulings were rightly distinguished from the facts of the present case by the trial Court. It was observed by our learned brother Justice Nasir Aslam Zahid that none of the authorities lay down the principle that a temporary injunction can be granted where permanent injunction is not claimed as a relief in the suit. These judgments lay down that a temporary injunction may be granted by the Courts, exercising their inherent power under sections 94 and 151, C.P.C. in appropriate cases even though conditions of rules 1 and 2 of Order XXXIX are not fully satisfied and that in certain exceptional circumstances an injunction may be issued against a third party. But no case‑law was cited by the counsel for M.I. C. that the principle laid down by the Supreme Court in 1974 S C M R 519 has been modified, reviewed or altered by the Supreme Court.

5. Mr. Kahlid M. Ishaque, referring to the merits of the case submitted that the breach of contract was on the part of the respondent, that huge amounts were due from the respondent to the appellant and that the sub‑contract was not lawfully terminated. According to him it was the respondent who had committed defaults on account of which main contract was terminated by the owner. He further alleged that huge amount has been received by the respondent from the owner. This amount was in fact a trust which the respondent had to pass on to the appellant, but the respondent withheld this amount and even delayed the payments which were due to M.I.C. from Uzin against their running bills. These bills exceeded the amount which was due to the respondent from the appellant. Mr. Khalid M. Ishaque relied upon 1983 C L C 2252 and 1976 Kar.

644. These two rulings were cited before the learned Single Judge and have been properly distinguished by him from the present case. The first ruling related to an interim injunction granted against the encashment of bank guarantee and performance bond and the bank was made a party, while the facts of the second ruling were also distinguishable. Hence we uphold the orders of learned Single Judge and dismiss Appeal No. 39 of 1985. Let us now take up the Appeal No. 38 of 1985, which relates to the orders on C.M.As. Nos. 94 and 97 of 1985, in Suit No. 17 of 1985. C.M.A. No. 94 of 1985, is for an interim injunction sought by the respondents in Suit No. 17 of 1985, whereas C.M.A. No.97 of 1985 has been filed by the appellant for setting aside or modifying the interim order that joint measurement of the work that had already been carried out by the appellant to be carried out by Mr. Fida Hussain G.Ibrahim, Architect who was appointed as Commissioner by the Court. The Commissioner was also directed to make an inventory of all the materials, plants, equipment and machinery on the site. The Commissioner had submitted some reports. Substantial work under the commission has already been carried out by the Commissioner at the site and it is expected that shortly the work to be carried under the commission issued by this Court will be completed. Some staff, labourers and employees of appellant are still on the site. Mr. Kamal Azfar had stated before the learned Single Judge that as soon as the Commissioner completes the work at the site, the entire staff will leave the site. Hence in accordance with that statement the learned Single Judge ordered that the staff of the appellant shall vacate the site within three days of the receipt of intimation from the Commissioner of the completion of the work at site. The respondent informed the learned Single Judge that they had appointed another sub‑contractor to complete the works which were required to be completed by them. Hence the learned Single Judge ordered that the staff of the appellant will not interfere with the carrying out of the work at the site by the respondent/Uzin and their sub‑contractors. Some constructional plants and machinery, which were according to the respondent not required by them or by their new sub‑contractor for the purposes of completing the work, had already been allowed to be removed from the site by them under the order referred to above. Hence it was ordered by the learned Single Judge that no machinery will be removed by the appellant from the site till the disposal of this suit. It was further ordered that this restraint will not apply to E.M.M. 30 Batching plant which can be removed from the site by the appellant. This exception was made in view of the letter, dated 29‑4‑1984, of the respondent addressed to their Advocate which was annexed to the application for withdrawal of the Suit No. 559 of 1983. The respondents were, however, restrained from selling, disposing of or removing any machinery from the site which had been brought by the appellant on the site for the purposes of construction /erection of the works. Such machinery included the machinery purchased by the appellant from its own resources or from the mobilization advance provided by the respondent to the appellant. The learned Single Judge, however, permitted the appellant to make an application for recalling or modifying the order of interim injunction regarding the removal of the machinery etc. from the site as soon as the work, which was subject‑matter of the sub‑contract was completed by the Uzin or new sub‑contractor. Mr. Khalid M. Ishaque, who appeared for the appellant after arguing at some length conceded that it would not be in the interest of justice to vacate the injunction granted by the learned Single Judge. He agreed that by doing so the Court would bring the entire construction work of the Attock Cement Factory Plant to a standstill which apart from being a loss to the parties, would, result in a great national loss. He, therefore, submitted that he would only pray to this Division Bench that some safeguards should be provided against the misuse or use of the machinery in a negligent manner which could diminish its utility or altogether destroy machinery worth crores of rupees. He submitted that no doubt the damages could be claimed by him on account of any misuse of machinery or its destruction by negligent use, but he pointed out that the respondents were a foreign company and therefore, have no funds in Pakistan which could meet the decree for damages which he was expecting in Suit No, 17 of 1985 and for any further damages which he would claim in any other suit. He relied upon the English decisions reported in 1980 All England Reports 213/214, 1979 Lloyds Report 445/448 of 1980 (Vol. 1) All England Reports 480, 1980 (Vol. III 190 and All England Reports 1979 (Vo1.I1)

972. In all these rulings it was held that the Courts have got powers to safeguard by making appropriate order of injunction etc. for ensuring satisfaction of the decree which the appellant may be able to get, when there is danger that the respondent may transfer the assets outside the jurisdiction. It may be pointed out that these rulings have no application to Pakistan because in our country sufficient legal provisions are already in existence in the shape of Order XXXVIII, C.P.C. and the principles embodied therein can be pressed into service for meeting any such situation. Mr. Khalid M. Ishaque, then submitted that the machinery and plants of the value of about five crore of rupees were brought on the site by the appellant. He was carrying on his work with due diligence. It was the respondent who was delaying the payment of his running bills. He referred us to certain letters which were produced by him in which he had complained of delay in payment of those bills. He had also pointed out that two bank guarantees of 31 crores were given by the appellant. He therefore, concluded that it was the respondent who was at fault and that he apprehended that the respondents would on the contrary damage his machinery. In such circumstances either the Court should not have granted interim injunction or if it had granted the‑ same it should have provided sufficient safeguards against the same. He referred us to the provisions of Order XXXIX, rules 1 and 2, C.P.C., which read as under:‑ "(1) Case in which temporary injunction may be granted. Wherein any suit it is proved by affidavit or otherwise.‑‑ (a) That any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or (b) that 'the defendant threatens, or intends, to remove or dispose of his property with a view to defraud his creditors, the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property as the Court thinks fit, until the disposal of the suit or until further orders."

2. Injunction to restrain repetition or continuance of breach.‑‑(1) In any suit for restraining the defendant from committing a breach of contract or other injury of any kind. Whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the Court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained of, or any breach of contract or injury of a like kind arising out of the same contract or relating to the same property or right. (2) The Court may by order grant such injunction, on such terms, as to the duration of the injunction, keeping an account, giving security or otherwise as the Court thinks fit. (3) In case of disobedience, or of breach of any such terms, the Court granting an injunction may order the property of the person guilty of such disobedience or breach to be attached, and may also order such person to be detained in the Civil prison for a term not exceeding six months unless in the meantime the Court directs his release. (4) No attachment under this rule shall remain in force for more than one year, at the end of which time, if the disobedience or breach continues, the property attached may be sold, and out of the proceed the Court may award such compensation as .it thinks fit, and shall pay the balance, if any, to the party entitled thereto." A plain reading of this provision would show that the Court has sufficient power to impose such terms and conditions as were proper to safeguard the interest of the other side while granting an interim injunction. He complained that the learned Single Judge had in fact substituted a new contract in place of the contract entered into by the parties by its order, which was deprecated in 1947 Privy Council 360, He then submitted that where there were reciprocal promises in contract, the party in breach of the promise, which he had to perform cannot ask for specific performance of the promises which the other party was to perform. In this connection he relied upon 1968 S C M R 1198. As against Mr. Muhammad Sharif who appeared for the respondent has submitted that the learned Single Judge has rightly granted intern injunction in the above two C.M.As. He pointed out that the respondent had given mobilization advance of Rs.64.5 million to the appellant. It was then alone that the appellant had mobilized the machinery at the site. Hence in all fairness the respondent was entitled to insist upon the appellant not to remove the machinery from the site without his permission. Apart from that even according to Article 20 of the agreement the appellant was not entitled to the removal of the machinery. construction plants etc. from the site without the consent of the respondent. Regarding Bank guarantee he complained that the appellant had not renewed those bank guarantees which were going to expire on 31‑12‑1984. Even when he approached the bank for encashment of those guarantees the bank refused the same. Hence it would appear that the appellant was not honouring the promises made by him and was not offering sufficient safeguards to the respondent. Mr. Sharif enumerated the acts of misconduct and lapses and breach of contract committed by the appellant. He pointed out that the crane, E.M.M 40 plant, bulldozers, dumpers etc. were removed from the site by the appellant which amounted to abandonment of work. He refused to extend the bank guarantees. He failed to submit fortnightly bank reports. Mr. Sharif then referred is us to Annexure 'O' by which the owner Attock Cement Factory had called upon him to enter into new contract as the date of contract had expired and the appellant had not completed the work entrusted to him. He also drew our attention to the letters of the Attock Cement at pages 67, 71, 75, 101 and 111 to show that he had been pulling up the appellants from time to time and had given him a bit of his mind and had called upon him to speed up the work, but with no success. He referred us to a letter of bank which showed that the appellant had gone to the extent of hyphothecating entire machinery with Union Bank of Middle East. He then took us through the minutes of meeting of Attock Cement members at pages 97 of the file and also annexures at page 105, 119 and 133 of annexures filed with the counter‑affidavit to show that the principal had also been reprimanding him for the slackness In on the part of the appellant. In the end he referred us to notice of the termination of contract at page 201, which gives the reasons for rescinding the contract. It will be useful to reproduce those reasons which read follows: "(a) Refused to undertake the execution of the erection /installation works of electrical instrumentation and telecommunication equipment under terms and conditions of the sub‑contract. As a result U . B . L. had been forced to conclude a separate contract for the execution of the aforementioned works with Messrs Greavee Cotton & Co. (Pakistan) Limited (Article 37). (b) The fraudulent removal of machinery from time to time and more particularly crucial constructional and erection equipment effected during the night on Thursday, 13th/14th December, 1984, without the prior written approval of the Agent, against the provisions of Article

20. The equipment thus removed namely HITACHI Crano 160 toe KATO crane 26 toe, BLBA MM40 batching plant, SCHBWING mobile concrete pupme to numbers, concrete mixing siloe, 14 numbers NISSAN 20 toe dumpers, 2 numbers diesel generators, SCHWING excavator, 20 ton trailor, 2 numbers, motor compressors, the grader, the KOMATSU front loader, one cutting binding machine, etc. etc. had been bought with the money advanced by us and intended for the completion of the project. (c) Demobilized the exciting working course at the site which was already inadequate to cope with the magnitude of the job at hand. (d) Refused to extend the validity of the Bank guarantee for 20 million rupees representing the balance of down payment for work not performed by M.I,C, performances bond for good execution of the contract beyond 31-12-1984. (e) Refused to renew/extend, the B.A.R./C.A.R. insurance policy upto 31‑12‑1984. (f) Refused to present to the Agent "Progress Reports" every fortnight as per terms of the contract, photographs as required by agreement were not supplied either. (g) Refused to follow the Agent's instructions issued in accordance with Article 8(f) (Article 17(b))." It was next contended by Mr. Muhammad Sharif, and rightly that the delay, in delivery of site, in payment of mobilization amount or in payment of running bills at the most made the contract voidable. The appellant did not exercise his option to rescind the contract and instead accepted the above delivery and payment after the fixed time as such he has waived the default as provided under section 55 of the Contract Act. He also did not give notice of acceptance under protest and of claiming damages at the relevant time. Mr. Muhammad Sharif then argued that the foreign company is not necessarily to be put to terms. He rightly relied upon P L D 1952 Dacca 22/29, in which it was held that a party entering into contract with a foreign firm is not entitled to come subsequently to the Court and say that the other party should be put to terms simply because it was a foreign company. He then submitted and rightly that mere removal of the property before the judgment is not culpable, but the removal should be with a view to defraud. In this connection he has relied upon P L D 1976 Kar. 926, P L D 1979 Kar. 734 and P L D 1982 Kar. 701 where it was further held that the Court cannot ask for security in case of apprehended damages only. Mr. Muhammad Sharif has also contended that the order of the learned Single Judge is partly based on a compromise statement in one suit and certain other factors on account of which our learned brother has passed certain orders in favour of the appellant as well as certain orders against him. Whereas the appellant has taken benefit of those parts of the orders of the learned Single Judge which are in his favour, he has come in appeal against those parts which have gone against him. Reliance is placed by Mr. Sharif rightly, upon the principle that a party taking benefit under an order which is partly in hi favour and partly against him cannot be allowed to challenge that order as enunciated in English cases of Pearce against Chaplin, 115 English Reports 1483 (802) and Tinkler v. Hilder 154 English Reports 1176 (187). The same principle has also been followed by the superior Courts in this sub‑continent as has been hold in 21 Cal. Weekly Notes 23; After hearing the Advocates for both the parties, we have con to the conclusion that the respondent had a prima facie case, the balance of convenience is also in his favour and that he would suffer irreparable loss if injunction was not granted to him, which are the guiding principles for the grant of interim injunction P L D 1970 S C 139 and 1985 C L C 261 relied upon, and, therefore, we are of the clear view that the learned Single Judge was perfectly justified in granting injunction in both the C.M.As. We, therefore, do not find any justification for vacating the same. At present we do not consider it proper in our appellate jurisdiction to make any order for security or otherwise. We leave it to the learned Single Judge to take appropriate measures or pass appropriate orders for safeguarding interest of appellant, if any application is made before him in this behalf or deemed fit at the time of passing the judgment in the suit. We, therefore, dismiss both these appeals The costs in these appeals will follow the result of the suits. M.Y.H. Appeals dismissed.