NAGHMANA ROOHI Versus UNITED BANK LIMITED

1. This Revision Application is directed against the order of the learned Judge, Small Causes Court, Karachi, dated 6‑10‑1983, whereby he decreed the suit of the respondent /plaintiff for Rs.5,000 against the applicant /defendant. I have heard the learned counsel for the parties and also perused the record and proceedings of the learned lower Court.

2. The brief facts of the case are, that the plaintiff respondent, who is a banking company appointed the applicant/ defendant No.l in the officer grade III on 15‑7‑1979 on execution of bond on 25‑7‑1979 to pay Rs.5,000 to the respondent, in the event of leaving services within five years of the employment. Defendant No.2, who is not a party to this Revision Application stood surety for the said amount, however, he did not contest the suit. On 3‑9‑1981, the defendant tendered her resignation and ceased. to attend her duty unauthorisedly from 18‑9‑1981, however, her services were terminated from 15‑12‑1981. As she failed to pay amount of the bond i.e. Rs.5,000 in spite of demand, hence the suit was fated by the respondent, which was decreed. The applicant/defendant No.l contested the suit and contended, that she appeared in C.S.S. Examination with the permission of the respondent and when she qualified in the same, she joined the Federal Government service. It was contended, that by permitting the applicant to compete in the examination, the respondent had acquiesced and waived their right of recovery of Rs.5,000 as they impliedly permitted her to join the services on qualifying the same. It is further contended, that the Banking Company's employment was Federal Government employment and as she has again joined Federal Government service, therefore, 'she has not violated any conditions of service. By way of set‑off, she also claimed the following amounts.

(1) Cash security. Rs.1,830.14

(2) G.P. Fund. Rs. 795.80

(3) Salary uptill 19‑9‑1981. Rs. 850.00

(4) One month notice salary Rs.1,298.00

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3. Total: Rs.4,763.94

4. She also raised the plea, that the suit was not maintainable and bad for non‑joinder of the proper party. On the pleadings of the parties the learned trial Judge framed the following issues:

(1) Whether the suit as framed is not maintainable?

(2) Whether the suit is bad for non‑joinder of Federal Government of Pakistan?

(3) Whether the defendant No.1 is entitled to claim any set‑off. If so what effect?

(4) Whether the plaintiff is entitled to the amount claimed in the suit?

5. The learned trial Judge did not accept the plea of the applicant defendant, that the Federal Government was necessary party and gave his findings on Issue Nos.l and 2 in negative for following reasons.

6. "Non‑joinder per se is not fatal. Yet when there is non‑joinder of a necessary party i.e. a party who ought to have been joined and in whose absence an effective decree cannot be passed the suit must fail. In my humble view, so far as the rights of the parties are concerned the same can be effectively determined in this suit without impleading the Federal Government of Pakistan. The claim of the plaintiff bank is based on the contract, admittedly executed between the parties at the time of her joining the plaintiffs service and at that " time the Federal Government was neither a party to the said contract nor the subsequent development in any way made the Government of Pakistan a necessary or proper party for determining the fights and liabilities of the parties."

7. I do not find any force in the contentions of the learned, counsel for the applicant and find no reason to disagree with the findings of the learned trial Judge on Issues Nos. 1 and 2.

8. Facts of the case are not disputed. Admittedly, the applicant joined services of the respondent on 15‑7‑1979, and admittedly, she failed to attend her job from 18‑9‑1981. Admittedly, she tendered her resignation on 3‑9‑1981 giving 15 days notice, and admittedly, her resignation was not accepted, but her services were terminated on 15‑12‑1981. It is also admitted, that she had executed a bond in the sum of Rs.5,000 to pay the same amount to the respondent if she left the job before completing service for the five years period. Admittedly, she failed to attend her duties in bank from 18‑9‑1981.

9. It is contended that the permission granted by the bank to the applicant to appear in the C.S.S. Examination was implied permission to her to join the superior services if she qualified the examination, and as such the bank had lost its right of recovery of penalty under the bond as a result of waiver and acquiescence.

10. The mere fact that, the bank had permitted her to appear in examination would not be considered as implied permission to leave the job of the bank and join the superior service 'if. she qualified in the C.S.S. Examination. As a matter of fact, the bank could not have refused to permit her to appear for the examination as that would amount to undue restraint and violation of her right under the Constitution to enter into any profession or trade. She could not even be restrained from leaving service of bank, but only condition, that could be enforced against her, was the payment of amount of bond, which in fact was liquidated damage. The plea of waiver was. discussed in P.L.D. 1962 Peshawar 14 where a Division Bench of that Court held

11. "Waiver as commonly understood is an intentional relinquishment or a known right. It may consist either of a positive act of relinquishment or conduct such as would warrant an inference of relinquishment of the right. To deprive a person of any legal right there must be clear and cogent evidence on record justifying that course."

12. In 1982 C.L.C. 44 a Division Bench of this Court held:

13. "The abandonment or lapsing of such right may either be expressly made by person concerned or may be inferred from his conduct and all other attending circumstances."

14. Judging the action of the respondent keeping in view the principles laid down in these two cases, it will be seen, that the conduct of respondent in permitting the applicant to appear in C.S.S. Examination cannot be considered as an implied permission to join services on qualifying in the examination and cannot be considered as a waiver of its right to receive the damages under the bond. I have already pointed, that any restraint on the applicant by the respondent by way of disallowing her to appear in examination would have amounted to deprive her of constitutional right.

15. However, in the written‑statement, the applicant has claimed certain amounts, which have been enumerated above by way of set‑off. No further statement was filed by the respondent in rebuttal of the claim of set‑off by the applicant in written‑statement. The learned counsel for the respondent candidly admitted, that the cash security as shown at serial No.1 as well as G.P. Fund ‑of the applicant were lying with the bank. However, he disputed the applicant's right to receive the salary up til 19‑9‑1981, and her right to receive a month's salary which she had claimed at serial Nos. 3 and 4. It is admitted, that on 3‑9‑1981 the applicant gave 15 days' notice to the respondent tendering resignation and she did not attend the bank from 18‑9‑1981. This impliedly shows, that she had attended her duties up to 17‑9‑1981. No rules of the bank have been pointed to show, that any notice for more than 15 days was required for the purpose of resignation. There was no legal restraint upon the applicant to resign her job after giving due notice, though she may be bound to pay penalty as per terms of bond. I also find force in this contention, that the applicant has actually served the respondent upto 17‑9‑1981 as such she is entitled to proportionate salary up to 17‑9‑1981 though she had claimed uptil 19‑9‑1981. Her salary up to 17‑9‑1981 would‑ be about Rs.760. The learned counsel for the applicant has not produced any provision of law or rule to show, that the applicant was entitled to receive one month's salary claimed by her at item . No.4. In my opinion, the applicant is legally entitled to claim as set‑off the amount of cash security and of G.P. Fund and regular salary up to 17‑9‑1981 which comes to Rs.3,385.00.

16. The scope of section 74 of the Contract Act has been discussed by their Lordships of Supreme Court in the case of Aslam Saeed and Company v. Trading Corporation of Pakistan Limited reported in P. L. D. 1985 S.C.

69. It is observed by their Lordships as under:‑

17. "Section 74 does not recognize difference between liquidated damages and panalty‑‑Section provides for cases where a sum' is named in contract itself as amount to be paid in case of breach of contract or if contract contains any other stipulation by way of penalty, party complaining of breach has to be compensated regardless of. proof of any actual damages or loss, and is entitled to receive from party breaking contract reasonable compensation riot exceeding amount so named, or penalty so stipulated."

18. In the instant case under the agreement of bond the respondents are entitled to receive reasonable damages not exceeding Rs.5,000 as the applicant left the services before completing five years. However, she has served the bank. not for five years, but for about two years and two months and as such it is only fair and equitable, that the amount of penalty may be proportionately reduced to a reasonable extent. It is not necessary, as a matter of rule, that this reduction be according to mathematical proportion. What is required is, that all facts be kept in view while awarding a reasonable amount of damages. In the instant case the applicant has proved a set‑off to the extent of Rs.3,385. In my opinion, this amount would be reasonable compensation as liquidated damages for the loss suffered by the respondents as a result of applicant's leaving job before completing stipulated period of five years.‑ Under the circumstances, the Revision Application is disposed of in the following terms.

(1) Respondents are entitled to receive damages to the tune of Rs.3,385.

(2) Applicant is entitled to set‑off against the said claim of the respondent an amount of Rs.3,385.00.

(3) Neither party is therefore entitled to recover any amount from the other.

(4) The defendant No.2 is not party to this Revision Application but liabilities of defendant No.2 is co‑extensive with that of applicant. As no amount is decreed against the applicant, no amount would be recoverable from the defendant No.2 also.

(5) The parties to bear their own costs

19. H . B . T . / M‑435/ K Order accordingly