PAKISTAN AGRICULTURAL STORAGE AND SERVICES CORPORATION LTD.. vs Mian ABDUL LATIF and others

' CH. EJAZ YOUSAF, J.---This appeal as of right under Article 185(2)(d) is directed against the judgment dated 24-4-2002 passed by a Division Bench of the Lahore High Court, Lahore, whereby order dated 15-5-1994 passed by Civil Judge 1st Class, Lahore, rejecting plaint in the suit filed by the petitioner under Order VII, Rule 11, C.P.C., was set-aside and the case was remanded to the trial Court for decision in accordance with law.

2. Facts of the case in brief are that vide plaint dated 23-12-1991, respondent No,.1/plaintiff sought for a decree for money amounting to s,52,81,369.25 on account of a claim arising out of contract in the sum of Rs,37,81,369.25 and suffering agony and medical expenses to the tune of Rs,5,00,000.00.

As per averments made in the plaint respondent No,1/plaintiff entered into a contract/agreement bearing No, PASSCO/R.N.12 with the appellant/defendant for the "Work of Rehabilitation of Go downs at Kohat Road, Peshawar" for which bid schedule, specifications and drawing had been pre- measured. According to the plaintiff/respondent No,1, some of the items were deleted and some, not included in the contract were got executed subsequently resulting in loss to him. It was also alleged that he was not allowed escalation in the prices of cement and steel. Suit was contested and it was pleaded on behalf of the appellant/defendant that some of the nonessential items were though deleted on account of respondent/plaintiff's failure to execute work in time, yet such deletion was after service of due notice and similarly additional items were sought for and got executed with the concurrence of respondent/plaintiff, and the payment towards escalation too, was made in accordance with the conditions of contract. It was further pleaded that as per clause 60 of the contract since all the payments were to be made by USAID directly, therefore, this appellant/defendant was not under obligation to make payment to the plaintiff/respondent No,1 whatsoever. It was further pleaded that the job was completed by contract respondent No,1 on 30- 6-1991 instead of September,1990. Again the claim in respect of items added was paid off by USAID.

The inflated bill was rejected by USAID and reduced in accordance with the escalation clause and the corrected bill having been accepted by the contractor/respondent/plaintiff was duly paid to him, hence nothing outstanding was left.

3. During pendency of the suit an application under Order VII, Rule 11, C.P.C, was submitted by the appellant/defendant, wherein it was pleaded that since the respondent/plaintiff had received the full and final payment in the light of the final bill settled through an informal arbitration, therefore, he was precluded to institute a new suit with regard to the said claim and on the basis of same cause of action, hence, plaint may be rejected. Application was allowed by the Civil Judge on 15-5- 1994 and the plaint was rejected in view of the fact that plaintiff's counsel had admitted the plaintiff's signatures on the relative payment voucher vis-a-vis payment of final bill. However, on appeal learned Division Bench of the High Court reversed the judgment and decree dated 15-5- 1994, and remanded the case to the trial Court for decision of the suit on merits, vide the impugned judgment, hence this petition.

4. Mr. Muhammad Akram Khawaja, learned counsel for the petitioner has contended that since respondent/plaintiff's claim with regard to the execution of the contract in question was finally determined through informal arbitration, settled and paid off to the contractor, therefore he was precluded to agitate the same through the suit, in question. The plaint, therefore was rightly rejected by the learned Civil Judge. He pleaded, that in the circumstances, the learned Judges in the High Court have gone wrong in law by remanding the case to the trial Court.

5. Though, none has appeared on behalf of the respondent, yet we, while giving our anxious consideration to the contentions raised by the

5. Though, none has appeared on behalf of the respondent, yet we, while giving our anxious consideration to the contentions raised by the learned counsel for the appellant has carefully gone through the record of the case. It reveals that along with application under Order VII, Rule 11, C.P.C, wherein a number of legal and factual objections were taken, copies of the final bill, dated 18-9- 1991 submitted by the respondent/plaintiff to the Executive Engineer, PASSCO Division, Peshawar, in respect of the contract in question with voucher for purchase and services other than personal and minutes of the meeting dated 17-9-1991 were also filed. In order to properly appropriate the proposition in hand, it would be beneficial to have a glance at minutes of the meeting dated 17-9- 1991, which are reproduced hereinbelow in extenso:-- "A meeting was held on 17 September: 1991. The following participated:--

(1) Mian Abdul Latif (MALCO.)

(2) Mr. Muhammad Anis Latif (MALCO.)

(3) Mr. Muhammad Akbar Malik (PASSCO)

(4) Mr. Shabir Ahmed Qureshi (PASSCO)

(5) Mr. Iftikhar Ahmed Chaudhary (PASSCO)

(6) Mr. Tariq Javed (PASSCO)

' The object of meeting was to settle the claims submitted by MALCO. Mian Abdul Latif agreed that decision given by Mr. Akbar Malik would be acceptable to him and he would not take the case to Court irrespective of decisions given. During course of meeting, Mian Abdul Latif stated that he wishes to settle the matter and offered that he is willing to accept the measurements duly checked and recorded by Mr. Iftikhar Chaudhry, provided he solemnly affirms correctness of measurement, Mr. Iftikhar Chaudhry, affirmed solemnly that the measurements have been made by him correctly according to his best knowledge and acting as a true Muslim which was accepted by Mian Abdul Latif and all others present have signed this in acceptance and confirmation."

' It would be pertinent to mention here that minutes were signed by all the participants. Record further reveals that in pursuance of the above settlement through arbitration, detailed and final bill dated 18-9-1991 was also submitted, covering letter whereof reads as follows:-- "To ' The Executive Engineer, ' Subject:--12th(b) & Final Payment Bill For Rehabilitation Work of Godowns At Kohat Road Peshawar Site (Contract No,PASSCO/R-12)

' Dear Sir, ' Please find enclosed herewith 12th (b) & Final Progressive Payment bill for rehabilitation work of wheat Godowns at Kohat Road, Peshawar site. Early payment is requested.

' Thanking you, remain.

Your's faithfully (Sd.)

(M/s. Mian Abdul Latif & Co.)

Contractor ' It would also be worthwhile to mention here that on the foot of the said bill dated 18-9-1991, the following endorsement, with the signatures of the respondent No,1 plaintiff appears:-- "Final measurements & bill accepted. There is no further claim."

' It was on the basis of these documents that Civil Judge came to the conclusion that since the plaintiff/respondent No,1 had already received payment for the work executed, therefore he was precluded to bring a fresh suit on the basis of the same cause of action. Perusal of the impugned judgment of the High Court shows that case was remanded to the trial Court primarily and solely for the reason that since plaintiff/respondent No,1 had denied the receipt of full amount, and in the opinion of the learned Judge in High Court, the controversial facts had to be determined through evidence, therefore, the plaint could not have been rejected for non-disclosure of cause of action.

6. Admittedly the suit brought by the plaintiff/respondent was with regard to the violation of the terms and conditions of the same contract wherein final payment was received by him through bill dated 18-9-1991, hence there appears force in the contention that the respondent/plaintiff was precluded to institute a suit in respect of the said claim and on the basis of the same cause of action. It would be pertinent to mention here that the term "cause of action" represents all the requisites and facts which are necessary for the plaintiff to prove, before he can succeed in a suit.

In the instant case, therefore, learned trial Judge was justified to reject the plaint particularly when not only the submission of bill dated 18-9-1991 was admitted by the counsel for the respondent/plaintiff but settlement of claim through agreement/ arbitration dated 17-9-1991 too, was not refuted. It may be noted here that object of Order VII, rule 11 C.P.C., is primarily to save the parties from rigors of frivolous litigation at the very inception of the proceedings and if the Court on the basis of averments made in the plaint and documents available comes to the precise conclusion that even if all the allegations made in the plaint are proved; the plaintiff would not be entitled to the relief claimed, then the Court would be justified to reject the plaint in exercise of powers available under Order VII, Rule 11 C.P.C. In this view, we are fortified by a judgment of this Court delivered in the case of S.M. Shafi Ahmad Zaidi through legal heirs v. Malik Hassan Ali Khan

(Moin) through legal heirs 2002 SCM R 338, wherein it was held that while disposing of application under Order VII, Rule 11, C.P.C, besides averments made in the plaint, other material available on record, which on its own strength, is legally sufficient to completely refute the claim of the plaintiff, can also be looked into. It was further held in the above judgment that requirement of law is that incompetent suit should be buried at its inception and it is in the interest of litigating parties and judicial institutions itself, because it would save time and expenses of the parties and the Courts would get more time to devote it for the genuine causes.

7. Upshot of the above discussion is that this appeal is allowed, impugned judgment of the Lahore High Court, Lahore, dated 24-4-2002 is set aside and the judgment and decree dated 15-5-1994 passed by Civil Judge, Lahore, is restored.