1989 PLP 1415 (CLC)

SALEEM AKHTAR, J.‑‑On querry being made by M/s. Elaco Commercial Co. of Teheran Iran the importer, the petitioner by his letter dated 10‑6‑1980 offered to supply dicalcium phosphate @ U.S. Dollar 246.00 per M. Ton subject to opening of the letter of credit with a validity period of at least 90 days. The importers accepted this offer and it was agreed that the petitioner shall supply 300 M. Tons in three lots of 100 M. tons each and shipment was to start from the third week of October, 1981 provided the requisite letter of credit was received by the petitioner before 31‑8‑1981. The letter of credit established by the importers was received by the Bankers of the petitioner on or about 9th September, 1980 which contained several lacunae, and therefore, the importers were called upon to establish a clear and valid letter of credit. In view of these circumstances on the basis of the letter of credit which had been received on or about 9th September, 1980 it was not possible to ship the goods by the third week of August, 1980. The importer then amended the letter of credit but the period of 90 days was not given. Again the period of validity of letter of credit was extended upto 28‑2‑1981 but it was done after 31‑12‑1980. The petitioner therefore, could not supply the goods although he had made all arrangements and got the stocks reserved from M/s. P. Leiner & Sons Chemical Feeds Ltd. Lahore. He thus failed to ship the goods upto 28‑2‑1981. The importer lodged a report with the Export Promotion Bureau and a complaint under section 5‑B of the Import and Export (Control) Act, 1950 read with section 4 of the Import Quality Control Order 1973 was lodged before the respondent No.l. The respondent No.l examined Zahid Hussain Director of Export promotion Bureau whose statement was recorded and documents were produced by him. The petitioner examined one Mirza Jam el Baig Officer of Muslim Commercial Bank and the petitioner was also examined as a witness for the defence. The respondent No.1 by the impugned judgment convicted the petitioner and sentenced him to fine of Rs.10,000 and in default of payment to suffer imprisonment of one month. A compensation of U S $ 6,664 in equivalent Pak currency was also granted against the petitioner. The learned counsel for the petitioner has contended that the petitioner has not contravened any order made under section 3 of the Import and Export (Control) Act 1950 relating to export trade, and therefore the conviction and compensation granted by respondent No.l are illegal and without jurisdiction. The Commercial Court exercises its jurisdiction under section 5‑B of the Act which provides that cases for contravention of an order made under section 3 of the Act which relate to the export trade shall be tried exclusively by it. Under section 3 of the Act the Federal Government is empowered to pass order which may be published in the official Gazette imposing conditions, restrictions and prohibition or otherwise controlling the import and export of goods for unspecified description or regulate generally all practices including trade practice and procedure connected with the import and export of the goods, The Federal Government by virtue of section 3 has issued order which reads as follows:

4. Prohibition of trade malpractice.‑‑No person engaged in export trade shall wilfully‑‑ (a) fail to fulfil export order or to supply goods within the agreed period; (b) supply goods less in quantity than the goods agreed to be supplied; (c) fail to make payment of or to remit, the agreed commission or the amount due for services rendered; or (d) fail to so pack goods as to protect them from damage due to faulty packing. A contravention of this order has been made an offence and triable by Commercial Court. A person can be charged of a breach of this order, if he I wilfully fails to fulfil his obligation under an export order and does not supply the goods within the specified period. Therefore, it is not every breach which can be I taken cognizance .of by the Commercial Court. The breach constituting offence should be wilful breach by an exporter. It is therefore, to be considered whether any wilful breach has been made out in the case of the petitioner. Mr. Ikram Ansari the learned counsel for the petitioner has contended that no case of wilful default has been made out as the petitioner has not failed intentionally but it was due to importer's failure to establish proper letter of credit in the agreed terms. The word wilful default connotes a definite meaning which is different from the default or breach itself. The learned counsel for the petitioner has referred to General Manager, Pak‑American Fertilizers Limited, Mianwali v. Industrial Court, Lahore and another P L D 1966 Lahore 818 where following observation was made. "The learned counsel for the petitioner argued that the word `wilful' is equivalent to intentional and relied on Wheeler v. New Merton Board Mills, Limited (1933) 2 K B D

669. He also relied on The Queen v. Senior (1899) 1 Q B 283 in which Lord Russell, CJ. defined `wilfully' as meaning an act which is done deliberately and intentionally, not by accident or inadvertence, but so that the mind of the person who does the act, goes with it. The word `wilful' is defmed in Black's Law Dictionary as act done with stubborn purpose, but not with malice; act done intentionally, knowingly and purposely as distinct from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It is in this sense that the word `wilful' appears to have been used in clause (a) of subsection (3) of section 13 of the Ordinance. Reference can also be made to Haji Ismail Dossa v. Monopoly Control Authority P L D 1984 Kar 315 where following observation was made: "The learned Authority noted that ignorance of law is no excuse and proceeded to consider the meaning of the word `default' as interpreted by various authorities. Relying on the authorities of our Superior Courts where word `default' has been interpreted it followed the dictum that default would seem to embrace every failure by the defendant to perform his contract unless prevented by the superior force over which he had no control. The entire emphasis of the learned Authority is on the meaning of the word `default' as interpreted by the judgments of our superior Courts. In majority of these cases the Courts were considering the provisions of West Pakistan Urban Rent Restriction Ordinance, where the word `default' has been used. In section 19 of the Ordinance, however, words used are `wilfully failed to register.' There is a sharp difference in the meaning of the word `default' and `wilful default' or `wilful failure'. There can be no cavil with the meaning of `default' as stated by the learned Authority, but will this meaning apply to `wilful default' or `wilful failure'. The fact that the word `failure' has been qualified by the word `wilful' indicates that the `failure or `default' should be wrongful or intentional. `Wilful failure' as it is apparent, will occur when a party has purposely failed to comply with the provisions or intentionally avoided to comply, knowing full well that he is duty‑bound to do so. In such cases the party knows that he has to do a certain act but intentionally persists to follow a different course. If the failure is without any intention it will be a `default' or `failure' simpliciter, but if it is intentional it will amount to `wilful default' or `wilful failure'. In this regard reference can be made to Horabin v. British O v. Airways Corporation (1952) 2 A E R 1016, where the meaning of `wilful misconduct' has been explained in the following manner: `Wilful misconduct is misconduct to which the will is a party, and it is wholly different in kind from mere negligence or carelessness, however gross that negligence or carelessness may be. The will must be a party to the misconduct, and not merely a party, to the conduct of which complaint is made. As an example if the Pilot of an Aircraft knowingly does some thing which subsequently a Jury find amounted to misconduct, that fact alone does not show that he was guilty of wilful misconduct. To establish wilful misconduct on the part of this imaginary Pilot, it must be shown not only that he knowing (and in that sense wilfully) did the wrongful act, but also that, when he did it, he was aware that he was committing misconduct.' Barry, J. has illustrated it in the following words:‑ `The same act may amount on one occasion to mere negligence, and on another to wilful misconduct. Two men driving motor cars may both pass traffic right after they have changed from yellow to red. In both cases there are the same act, a same traffic light, the cross‑road, and the same motor‑car. In the first case the man may have been driving a little too fast. He may not have been keeping a proper look‑out, and he may not have seen the light (although he ought to have seen them) until he was too close to them and was unable to stop, and, therefore, crossed the road when the light was against him. He was not intending to do anying wrong to disregard the provisions of the Road Traffic Act or to endanger the lives of any one using the road, but he was careless in not keeping a proper look‑out, and in going too fast, and as a result, without intending to do any thing wrong he committed an act which was clearly an act of misconduct. The second driver is in a hurry. He knows all about the lights, and he sees in plenty of time that they are changing from yellow to red, but he says to himself; `Hardly any traffic comes out of this side of road which I am about to cross. I will go on. I am not going to bother to stop: He does not expect an accident to happen but he knows that he is doing something wrong. He knows that he should stop, and he is able to stop, but does not and he commits exactly the same act as the other driver. But in that frame of mind no .fury would have very much difficulty to the conclusion that he had committed an act of wilful misconduct. While determining whether the appellant has wilfully failed, the finding that he has defaulted, will not be sufficient to impose penalty unless it is established that he has intentionally and purposely defaulted knowing full well that he had to get himself registered. From the aforestated authorities it is well established that wilful default or wilful breach is that default or breach which is done intentionally and will is a party to such act. In a case where the default is not intentional but due to the default of other party or due to reasons beyond the control of the party, he will not be guilty of wilful default or wilful breach. The record before us establishes that at no point of time the letter of credit established by the importer provided a clear 90 days for export of the goods. This was one of the main conditions of the agreement and perhaps upon this depended the export of the goods. Although the letter of credit was established several times and amendments were made, they did not bring the letter of credit in terms of the agreement. Therefore, the petitioner though failed to export the goods did not intentionally commit the default and could not have been treated to have wilfully failed to perform the export order within the prescribed time. Not being a wilful defaulter, he could not have been prosecuted or charged of an offence under section 5‑B: Mr. Ikram Ansari the learned counsel for the petitioner has further contended that this was a fit case in which petitioner was entitled to benefit of doubt. He has referred to Barkat Ali v. The State P L D 1973 Kar.

659. In this case the appellants were tried under the Customs Act and it was observed that 'normal principles will apply namely that the accused is entitled to benefit of doubt and where reasonable explanation is offered which is acceptable and raises a doubt that the prosecution has not discharged the burden, then the accused may not have proved explanation it was enough for his purpose if he succeeds in raising a doubt as to whether or not the prosecution was true. The Commercial Court exercises criminal jurisdiction to which Criminal Procedure Code is also applicable. Therefore, such principles of law which are applicable to criminal cases will also be applicable to cases before the Commercial Court. The Commercial Court is entitled on the basis of the above principle to even give benefit of doubt to an accused. For the aforestated reasons by the following short order the petition was allowed: "For reasons to be recorded we declare that the impugned under passed by the respondent No.l is without lawful authority and of no legal effect. We quash it and petition is allowed. AA./M‑739/K. Petition accepted.