REHMATULLAH KHAN through LRs vs SUPERINTENDENT, CUSTOMS and others
This civil appeal arose from a suit for recovery of money filed by the appellants, which was initially decreed by the trial court but subsequently dismissed by the High Court in appeal. The core legal question was whether an enforceable agreement existed between the appellants and the Federal Board of Revenue (FBR) regarding the hiring of a site, given the absence of a signed contract. The appellants relied on internal departmental correspondence and alleged oral directions from Customs officials to support their claim of a binding agreement and subsequent construction work. The Supreme Court upheld the High Court's decision, holding that internal departmental correspondence does not constitute a binding contract and that the appellants failed to establish the existence of a signed agreement. The Court affirmed the principle that parties bear the burden of ensuring a formal, signed agreement is in place before undertaking construction or modifications on property, and that internal departmental solicitations for advice do not create legal obligations toward third parties. Consequently, the appeal was dismissed.
- Does internal departmental correspondence regarding the solicitation of advice constitute a binding contract with a third party?
- Is a party entitled to recover costs for construction or modifications made on property in the absence of a signed lease agreement?
- Can oral directions from departmental officials create a binding contractual obligation in the absence of a formal signed agreement?
ORDER
' JAWWAD S. KHAWAJA, J.---This appeal as of right arises out of a suit for recovery of money filed by the present appellants. The suit was decreed in the sum of Rs.20,76,000, by the learned trial Court, vide judgment and decree dated 29-1-2005. The respondents filed an appeal (R.F.A. No.4 of 2005), while the appellants-plaintiffs filed cross-objections. The appeal has been allowed and as a consequence, the suit of the appellants-plaintiffs has been dismissed.
2. We have gone through the impugned judgment and record with the assistance of learned counsel on both sides. The impugned judgment is well reasoned and proceeds on a proper consideration of the law. The appellants alleged an oral agreement between themselves and the FBR. The learned counsel for the appellants referred to Exh.P.W.1/1, but this is a document, which has not been signed by any person on behalf of the respondents/FBR. Learned counsel for the appellants then referred to the correspondence Exhs.P.W.11/3 and P.W.12/1, between the Collector of Customs and the then CBR, but this correspondence is also of no help to the appellants, being internal to the department through which, the Collector/Superintendent solicited advice and approval of the higher authorities as to, "which of the [sic] party may be contacted for completion of further necessary formalities in order to hire the site". Learned counsel for the appellants conceded that Secretary, FBR or other departmental functionaries have not signed the proposed lease agreement. He, however, submitted that certain construction and modifications were also made on the oral direction of Customs officials. This, however, is irrelevant because it was for the appellants, as rightly held by the High Court, to ensure that there was an agreement in place before they made any construction/modifications on the property in question.
3. In view of the foregoing discussion, we find no reason to interfere in the impugned judgment which as noted above, proceeds on a proper consideration of the law. This appeal is, therefore, dismissed.
Cited by 1 case
- Omer Flour Mills vs Government Of Punjab and others PTCL 2021 CL. 640, 2021 PTD 275