Messrs ROYAL FLYING COACH (PVT.) LTD. Versus Messrs TOYOTA TSUSHO KAISHA LTD.
The brief facts out of which the present appeal arises are that the appellant executed an agreement with the respondents for the supply of 70-Units of Toyota Hi-Lux Pick-up Single Cabin, LN56R-KR, Nidek, 2446 cc, Diesel Engine (Pakistan Specifications) for the year 1986 at the rate of J. Yen 1,100,000 per unit. The appellant has also opened an irrevocable letter of credit in favour of respondent No.1 with Messrs United Bank Limited, Faisalabad on 25-1-1986 on the basis of the aforesaid agreement. The agreement was signed by the appellant as well as by respondent No.2 at Lahore and the respondents accepted to supply the appellant with 70-units of Pick-ups of the description of April production produced by respondent No. 1. According to the agreement executed between the parties, time was the essence of the agreement as is evident from the contents of the letter of credit that bill of lading must be dated not later than 30-4-1986 and the bill of exchange must be negotiated within fifteen days from the date of bill of lading specifically not later than 15-5-1986. The respondents failed to comply with the terms of the agreement executed between the parties on 25-1-1986, therefore, they committed the breach of contract by not shipping 70 vehicles by 30-4-1986. The matter was negotiated between, the appellant and respondent No. 1. The appellant sustained huge loss, on account of the breach of the contract by the respondents. The appellant filed a suit for recovery against the respondents amounting to Rs.20,000,000 before the Civil Judge 1st Class, Lahore on 17-7-1988. The contents of the plaint reveal that respondent No.1/defendant No.1 is a manufacturer of Toyota Hi-Lux Pickups and respondent No.2/defendant No.2 is its principal agent in Pakistan and its office is located at 87 Shahrah-e-Quaid-e-Azam, Lahore. The respondents/defendants filed written statement. controverted the allegations levelled in the plaint and also raised preliminary objection qua the territorial jurisdiction of the learned Civil Judge 1st Class, Lahore, to take the cognizance of the matter. Out of the pleadings of the parties, the trial Court framed the following issues:--
(1) Whether this Court lacks territorial jurisdiction? OPD
(2) Whether the suit is bad for misjoinder of the defendant No.2? OPD
(3) Whether this suit has been duly instituted by authorized person ? OPP
(4) Whether the defendant No.2 is principal agent of the defendant No. 1 in Pakistan? OPP
(5) Whether the time was essence of contract? OPP
(6) Whether the defendant' No.2 has entered into an agreement on 25-1-1986 to supply 70-units of Toyota Hi-Lux Pick-ups to the plaintiff? OPP
(7) Whether the defendant No.2 has entered into an agreement on 25-3-1986 to supply 80-units of vehicles to the plaintiff? OPP
(8) Whether the defendants have breached the terms of agreements mentioned above and the plaintiff is entitled to recover Rs.20,000,000 from the defendants as damages as detailed in the plaint? OPP
(9) Whether the plaintiff has got cause of action to bring this suit? OPP
(10) Relief.
2. The learned trial Court treated Issues Nos. 1 to 3 as preliminary issues and parties were asked to produce their evidence on Issues Nos.1 to 3 vide order dated 10-4-1991. The parties led their evidence and the learned trial Court returned the plaint to the appellant under Order VII, Rule 10, C.P.C. with the direction to present it before the competent Court of jurisdiction at Karachi. The appellant being aggrieved filed this appeal.
3. The learned counsel of the appellant submits that the respondents produced Nisar Ahmad, D.W.1 and the trial Court did not provide opportunity to the appellant to produce evidence in rebuttal, therefore, judgment of the trail Court is not sustainable in the eyes of law in view of Order 18, Rules 2 & 3, C.P.C. as the trial Court decided the case in violation of the aforesaid mandatory provisions of law. He further submits that respondents placed on record documents alongwith written statement which clearly establish that sub-office of Messrs National Motors Private Limited is situated at Lahore at 87 Shahrah-e -Quaid-e-Azam, Lahore. He relied upon the following documents placed on record by the respondents/defendants alongwith their written statement:
(i) Copy of Telex from respondent/defendant No. 1 to respondent/defendant' No.2 in 'the' name of Abdul Majeed Assistant Sales Manager, dated 7-4-1986.
(ii) Copy of letter No. Sale-LCHS/549-6 dated 5-8-1986 addressed by respondent/defendant No.2 to Messrs Rana Motors (Put.) Ltd. by Abdul Majeed Assistant Sales Manager.
(iii) Copy of letter No.Sales-LCHD/528-4 dated 16-7-1986 from respondent/defendant No.2 to respondent/defendant No.1 by, Abdul Majeed Assistant Sales Manager, for Managing Director.
(iv) Copy of letter No.1620 dated 20-7-1986 from respondent/defendant No.1 to respondent/defendant No.2 by Abdul Majeed Assistant Sales Manager.
(v) Copy of letter dated 6-5-1986 by respondent/defendant No.2 Abdul Majeed Assistant Sales Manager, to Messrs Polad & Co.
(vi) Photocopy of Indent relating to 80-units dated 24-3-1986 of National Motors Limited, 87 Shahrah-e-Quaid-e-Azam, Lahore.
(vii) Photocopy of Indent relating to 80-units dated 24-3-1986 of National Motors Limited, 87 Shahrah-e-Quaid-e-Azam, Lahore.
3-A. Nisar Ahmad, D.W.1. stated in cross-examination that there is no Assistant Manager namely Abdul Majeed in the office of respondent/defendant No.2. In case the aforesaid documents be read with this piece of evidence then D.W.1 Nisar Ahmad is not truthful witness at all, therefore, the trail Court erred in law to decide the case against the appellant on the basis of the evidence of Nisar Ahmad D.W.1. He further submits that the trail Court did not apply its judicial mind at the time of deciding the case otherwise the aforesaid documents clearly reveal that the National Motors Pvt. Limited has sub-office in Lahore, which is situated at 87 Shahrah-e-Quaid-e-Azam, Lahore, as the document clearly contained stamp of Messrs. National Motors Limited. He further submits that documents may be read against the respondents as the respondents placed on record the aforesaid documents alongwith the written statement. In support of his contention, he relied upon Sh. Muhammad Sharif Uppal v. Sh. Akbar Hussain and others PLD 1990 Lahore 229. He further submits that the Civil Court Lahore has jurisdiction to entertain the suit and decide the same as the sub-office of National Motors Limited is in Lahore. Agreement was also signed at Lahore. The National Motors Limited is carrying business at Lahore, therefore, cause of action accrued to the appellant at Lahore but this fact was not considered by the trial Court in its true perspective and decided the controversy between the parties in violation of the law laid down by the superior Courts. In support of his contentions, he relied upon the following judgments: --
Jamia Masjid Sharif Pura v. Mufti Khalil-ur-Rehman 1999 CLC 954; Mian Fazal Muhammad Nizam-ud-Din Baig and Co. v. The Province of West Pakistan and others PLD 1969 Lahore 453 and Messrs Brady & Co. (Pakistan) Ltd. v. Messrs Sayed Saigol Industries Ltd. 1981 SCMR 494.
He summed up his arguments that the trial Court decided, the case in violation of the law laid down by this Court in the following judgments:--
Bishan Das v. Gurbakhsh Singh and another AIR 1934 Lahore 63 (2) and Puran Das Chela v. Kartar Singh and others AIR 1934 Lahore 398.
4. The learned counsel of respondent No.1 submits that there is no agreement executed between the appellant and respondent No.1 at Lahore. The letter of credit was established by the appellant in United Bank Limited at Faisalabad. Money was received by respondent/defendant No. 1 at Japan. Toyota Hi-Lux in-question, had to be delivered at Faisalabad. Respondent No.1 has no sub-office at Lahore. He further submits that respondent No.2 is not agent of respondent No.1. Appellant failed to produce agreement executed between the parties before the trial Court. He further submits that documents relied upon by the learned counsel of the appellant during the arguments, at the time of hearing of this appeal, had not been relied upon by the appellant/plaintiff before the trial Court as is evident from the impugned order of the trial Court. Even otherwise, documents have to be proved in accordance with the provisions of Qanun-e-Shahadat Order, 1984. The documents relied upon by the learned counsel of the appellant before this Court were not exhibited or marked by the trial Court, therefore, same cannot be looked into at this stage. The trial Court has decided the controversy between the parties in accordance with the law laid down by, the Honourable Supreme Court in the following judgments:--
Messrs Kadir Motors (Regd.) Rawalpindi v. Messrs National Motors Ltd., Karachi 1992 SCMR 1174 and WAPDA and 2 others v. Mian Ghulam Bari PLD 1991 SC 780.
He further urges that respondent No.2 has an area office of National Motors Limited at Lahore and not sub-office/branch office. Even if for the sake of arguments, be admitted that respondent No.2 has a branch office at Lahore, even then no cause of action accrued to the appellant at Lahore, therefore, judgment of the trial Court is in accordance with the law laid down by the superior Courts. In support of his contentions, he relied upon Abdul Hakim and 2 others v. Saadullah Khan and 2 others PLD 1970 SC 63. He summed up his arguments that the appellant did not produce agreement executed between the appellant and respondent No.2 before the trial Court.
5. The learned counsel of respondent No.2 submits that respondent No.2/defendant No.2 filed an application before the trial Court with the prayer that the appellant should be directed to produce the agreement if any executed between the parties in Court so that respondent/defendant No.2 could file written statement after perusing the agreement. The appellant did not produce the same in the trail Court and the application was dismissed vide order dated 28-1-1990. Respondents produced Nisar Ahmad as D.W.1 who had taken a definite stand in his statement in examination-in-chief that National Motors Limited has no sub-office at Lahore and National Motors Limited did not carry any business at Lahore whereas the appellant failed to rebut the statement of D.W.1 by producing any witness before the trial Court, therefore, judgment of the trial Court is in accordance with law. In support of his contention, he relied upon Messrs Brady & Co. (Pakistan) Ltd. v. Messrs Sayed Saigol Industries Ltd. 1981 SCMR 494.
6. The learned counsel of the appellant, in rebuttal, submits that the appellant was not provided opportunity by the trial Court to rebut the evidence of D.W.1, Nisar Ahmad, therefore, judgment of the trial Court is hit by the principle of natural justice and is in violation of the Order 18, Rules 2 and 3, C.P.C. The National Motors Limited has sub-office at Lahore therefore, the trial Court erred in law to return the plaint of the appellant/plaintiff to be presented before the competent Court under Order VII, Rule 10 C.P.C.
7. I have given my anxious consideration to the contentions of the learned counsel of the parties and perused the record myself.
8. It is better and appropriate to reproduce the relevant orders evidence of D.W. 1, Nisar Ahmad, order dated 3-2-1993 of the trial Court to resolve the controversy between the parties:--
Order date 3-2-1993 :--
In case the aforesaid evidence and order are put in juxta position then it is crystal clear that the appellant himself did not avail the right of rebuttal, therefore, contention of the learned counsel of the appellant that the appellant was not provided opportunity in view of Order 18, Rules 2 and 3, C.P.C. has no force as per law laid down by this Court in Jhanda v. Muhammad Younas PLD 1994 Lah.
100. The relevant observation is as follows:-
"Plaintiff had unreservedly closed his affirmative evidence and hence, he could not have been permitted to record his statement in affirmative after the close of defence evidence. To that extent, his testimony carried little weight."
It is also admitted fact that appellant has not brought on record agreement executed between the appellant and respondent No.2 on record. It is also admitted fact that appellant has opened letter of credit in United Bank, Limited in favour of respondent No.1 at Faisalabad. Goods have to be delivered at Faisalabad from Japan by respondent No. 1. Money has to be received at Japan. D.W.1 has taken a definite stand that area office of National Motors Limited did not carrying on arty business at Lahore whereas appellant did not rebut the same by producing any evidence, therefore; the trial Court has no other alternative except to, believe the statement of D.W.1, Nisar Ahmad. It is no doubt that documents can be used against that party who had produced the same butt the documents relied upon by the learned counsel of the appellant did not establish any proof that any agreement or transaction had been executed/done between appellant and respondent No.2 at Lahore. It is also settled principle of law that appellant failed to bring on record agreement which was the primary evidence to prove his case as the appellant having not produced it a presumption can very safely be raised that there was no such document which reveals that appellant can file suit in Court within the local limits of Lahore. In arriving to this conclusion, I am fortified by the law laid down by this Court in Sh. Muhammad Sharif Uppal v. Sh. Akbar Hussain and others PLD 1990 Lah. 229. The question of law has been decided by the Honourable Supreme Court in Messrs Brady & Co. (Pakistan) Ltd. v. Messrs Sayed Saigol Industries Ltd. 1981 SCMR 494. The relevant observation is as follows:
"Explanation II can be subdivided into two parts; one dealing with the principal office and other with subordinate office---a limitation has been placed regarding subordinate office only, which would mean that a party choosing to institute a suit at a place where the corporation has only a subordinate office would have initially to show that the cause of action arose there. Thus it would appear that the location of the subordinate office does not give the plaintiff a choice to institute the suit at that place. The law did not recognize that the location of a subordinate office of a corporation can be converted, through a deeming clause; into a place where the corporation 'carries on business'. It would be so only under a limitation namely, that where cause of action arose and the corporation has also a subordinate office at that place. The combination of these two facts would become equal to the 'carrying on business'. The underlying idea seems to be that regarding corporation, it would not be correct to assume that it 'carries on business', as envisaged in section 20, at a subordinate office. Thus looked at from this angle as well, the entire Explanation II would appear to be relatable to the phrase carries on business' used in clauses (a) and (b) of section 20 and clause (c) remains independent thereof."
The aforesaid proposition of law is also considered by the Honourable Supreme Court in WAPDA and two others v. Ghulam Bari PLD 1991 SC 780 and laid down the following principle:--
"The use of the word "or" between the two is very significant. It means that the corporation shall be deemed to carry on business at its sole or principal office as well as at any place where it has a subordinate office but in the latter case the cause of action should have arisen at that place. Thus the argument of the learned counsel being too wide to be accepted and the same also being in negation of the statutory explanation, has .no force."
The two parts of explanation of section 20 are intended to be distinctive is made out by the use of word "or" as the law laid down by the Madras High Court in Parkash Road Lines Private Limited's case AIR 1985 Madras 84. It is settled principle of law that in, a suit between the principal an agent the cause of action arises where the contract of agency is made or where it was to be performed and where the refusal to account takes place as the law laid down by this Court in Ram Das Utam Chand's case AIR 1925 Lahore 387. The aforesaid proposition of law is also supported by reported Rowther's case AIR 1920 L.B.
48. I am also fortified by the law laid down by this Court in the following judgments:-
Bhag Singh v. Labh Singh and others AIR 1917 Lahore 12; Mul Chan Sanwal Das's case AIR 1919 Lahore 272 and Haji Karamat Hussain v. Naik Khan Muhammad 1986 CLC 6.
It is pertinent to mention here that the appellant failed to bring on record an iota of evidence to show that even a fraction of cause or action has accrued to the appellant at Lahore which is condition precedent to file a suit at Lahore, in terms of section 20(1), (c) Explanation II. C.P.C. therefore, trial Court was justified in law to return the plaint to the appellant under Order 7, Rule 10, C.P.C. to present before the competent Court at Karachi.
In view of what has been discussed above, I do not find any infirmity or illegality in the impugned judgment of the trial Court, therefore, appeal has no merits and the same is dismissed with no order as to costs.
S.A.K./R-238/L Appeal dismissed.