2003 PLP 314 (MLD)

PARVEZ AHMAD, J.‑‑‑The Punjab Provincial Cooperative Bank Ltd., defendant before the Civil Court in civil suit ‑for recovery of an amount of Rs.3,00,000 has challenged the judgment and decree of the trial Court dated 18‑7‑1995 in favour of the plaintiff and against the present appellant/defendant. Fazal‑ur‑Rehman, respondent/plaintiff, who was interested to purchase the land situated in Mauza Nadha, Tehsil and District Gujranwala owned by the defendant‑bank had given highest bid to the tune of Rs.32,25,000 which was accepted by the sub‑Committee of the defendant‑bank subject to the fulfillment of Schedule of Payment as given below:‑‑ "(1) Payment of Rs.1,00,000 (Rupees one lac only) as token money on the day of Sub‑Committee meeting i.e. 12‑7‑1990. (b) Further Rs.2,00,000 (Rupees two lacs only) as token money will be deposited by you on 16‑7‑1990 with the .Bank and further Rs.8,00,000 (eight lacs) up to 27‑7‑1990. In case of non‑deposit of Rs.8,00,000 (Rupees eights lacs only) up to 27‑7‑1990, the deposited amount of Rs.3,00,000 (Rupees three lacs only ) will be confiscated in favour of the Bank. Similarly, if Rs.2,00,000 (Rupees two lacs only) as token money not deposited by you up to 16‑7‑1990, the earlier token money deposited of Rs.1,00,000 (Rupees one lac only) will be confiscated in favour of the Bank. (3) The remaining amount of Rs.21.25 lacs (Rupees twenty one lac and twenty‑five thousand only) be deposited by your as under:‑‑ (i) Up to 10‑10‑1990 Rs.11,00,000 and Rs.10,25,000 up to 30‑11‑1990. Moreover, in case you fail to deposit Rs.11,00,000 (Rupees eleven lacs only) up to 10‑10‑1990 the earlier deposit of Rs.11,00,000 (Rupees eleven lacs only) will stand confiscated in favour of the Bank. Similarly, in case you fail to deposit the amount of Rs.10,25,000 (Rupees ten lacs twenty‑five thousand only), the earlier deposited amounts will stand confiscated in favour of the Bank. You will have to deposit entire bid. Money up to 30‑11‑1990 according to the above schedule and you will be bound to get the above noted Agricultural Land transferred in your favour from the Bank on your own expenses. The decision of Sub‑Committee will be subject to fulfillment of terms and conditions as stated above. "

2. The plaintiff, allegedly had deposited an amount of Rs.3,00,000 as token money on 12‑7‑1990 and 16‑7‑1990. The plaintiff as above stated after having received the approval of the Sub‑Committee which was subject to the fulfillment of the Schedule of Payment as given above did not agree to the said schedule and the terms and conditions of the Sub‑Committee of the defendant‑Bank and did not execute any agreement in this regard and intimated the bank of this fact on 25‑7‑1990 and then claimed refund of the amount of Rs.3,00,000 paid by him as token money and for this purpose also served a notice registered A.D. through an Advocate. The defendant‑Bank refused to refund the amount asserting that the plaintiff having been guilty of violation of the terms and conditions of the agreement the amount stands confiscated in favour of the bank which forced the plaintiff to file the abovesaid civil suit. The defendant contested their suit on various grounds of its non-maintainability etc., and on facts asserted that the plaintiff did agree with the terms and conditions of the Sub‑Committee conveyed to him vide Schedule of Payment then deposited the amount of Rs.3,00,000 as token money and on account of the plaintiff having violated the terms and conditions of the agreement was not entitled to the refund of this amount. On the pleadings of the parties, the trial Court framed the following issues:‑‑ (1) Whether this suit is not maintainable under sections 70 and 70‑A of the Cooperative Societies Act, 1925? OPD (2) Whether the suit is barred by limitation? OPD (3) Whether this Court lacks jurisdiction to adjudicate upon the suits? OPD (4) Whether the plaintiff is entitled to a decree for recovery of Rs.3,00,000 alongwith interest as prayed for? OPP (5) Relief. .

3. The trial Court after recording evidence of both the parties, comprising of the statements of the plaintiff as P.W.1 and that of Muhammad Nawaz, Chief Manager of the defendant‑Bank as D.W.I and Muhammad Anwar Shah, Chief Manager Legal as D.W.2, decreed the suit of the plaintiff/respondent before us. The appellant felt aggrieved by this judgment and decree and filed the R.F.A. under discussion. dye have heard both the parties and perused the material available before us.

4. The defendant‑Bank did not produce on record any agreement of acceptance of Schedule of Payment by the plaintiff in favour of the bank. The letter Exh.P.3 dated 25‑7‑1990 is in response to the letter by the bank dated 14‑7‑1990 Exh.P.2 giving Schedule of Payment and the terms and conditions offered by the Sub‑Committee of the defendant Bank to the plaintiff/respondent and through Exh.P.3, the plaintiff/respondent clearly stated that the Schedule of Payment mentioned in the letter has not been agreed upon by him. The bank having failed to produce any documentary evidence of acceptance of the Schedule of Payment and the terms and conditions offered by the bank has failed to establish that the plaintiff was guilty of violation of terms and conditions of the agreement and as such the amount deposited by the plaintiff/respondent stood confiscated in favour of the bank otherwise the law provides that apart from this situation in cases of violation of terms and conditions of the contract, even if a contract provides a sum as liquidated damages in case of breach may be there and aggrieved party will not be entitled without proving that he has suffered loss. Reliance in this regard has been placed on Industrial Development Bank of Pakistan v. Messrs Haji Dossa Ltd. and 6 others (PLD 1985 Karachi 71). Mr. Justice Ajmal Mian (as his Lordship then was) after reference to several judgments including the one delivered by the Hon'ble Supreme Court of Pakistan in the case of Province of West Pakistan v. Messrs Mistri Patel & Co. (PLD 1969 SC 80) observed as follows:‑‑ (i) That even if a contract provides a sum as liquidated damages in case of breach, an aggrieved party will not be entitled to recover the same without proving that he has suffered loss. (ii) That if a party suffers loss on account of breach of a contract on the part of the other party, and if the contract provides a sum as liquidated damages, the aggrieved party will be entitled to recover the loss to the extent of the amount provided as liquidated damages. (iii) That the Court in, a fit case may grant nominal damages in case of breach of a contract against the defaulting party even in the absence of any proof of loss. (iv) That despite of the breach on the part of a contracting party, the Court on equitable principles can relieve a defaulting party from the forfeiture of the earnest money if the circumstances of the case justify such a course. (v) That the Court may decline to enforce a penal clause of a contract including a clause relating to penal interest. (vi) That a clause providing payment of higher rate of interest than the agreed rate of interest in case of default in payment within the stipulated time, is enforceable if the higher rate of interest is reasonable and not penal. (v) The ratio of the majority cases cited and discussed hereinabove seems to be that even under section 74 of the Contract Act, the Court is not bound to allow the amount mentioned as the liquidated damages in a contract. The Hon'ble Supreme Court in the said circumstances declined to forfeit any amount of the earnest money, though admittedly the purchaser had committed breach by not lifting the contracted rice."

5. In view of the said discussion neither there was any agreement duly entered into in between the appellant and the respondent that in violation of the terms and condition and Schedule of Payment offered by the Sufi‑Committee of the Bank the amount deposited by the plaintiff/respondent will be confiscated nor any other material available on record establishes the submissions of the appellants Bank. As such we hold that the judgment and decree of the trial Court is perfectly in accordance with law and is maintained. With this observation we dismiss this Regular First Appeal with no order as to costs. HI.B.T./P‑115/L Appeal dismissed.