CENTRAL TEXTILE MILLS LTD. Versus INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN

ORDER

1. ABDUL RAHIM KAZI, J.‑‑This High Court Appeal is directed against the orders passed by the learned Single Judge in Suit No. 388/1988, filed by the appellants, whereby, their prayer for injunction was rejected. The appellants had moved two applications and had sought the injunction in the following terms:‑

2. " (i) that the defendants be directed to keep valid, intact,the foreign exchange in question, for utilization by the plaintiffs under Annexures 'C' and 'D' read with 'F' and not to utilise . pt otherwise allow it to be utilised or to lapse without sanction of the Court:

(ii) the defendants be also directed to keep alive, current and make available the local/foregoing currency facilities granted under the sanction letter, Annexure 'C' read with Annexure 'F'; and

(iii) the defendants be ordered, interimly, to perform and finalize in accordance with the Sanction letters (Annexure 'C' and 'F') and the Machinery Supplies, contracts, to open/ establish all L/Cs in favour of the machinery manufacturers whose quotations have been accepted and in whose favour the conforming L/Cs have/are to be established by the defendants".

3. The facts briefly stated are that the appellants had filed the suit for declaration, injunction and specific performance. The case of the appellants is that they are in the process of setting up a Cotton Textile Mills at Chunian Industrial Area with estimated Spinning capacity of 3.266 million kilograms per annum and had applied for loan from respondents on the prescribed form 'A' which application was accepted vide letter dt. 25‑3‑1987 and the Foreign Exchange of U.S. $ 5,100 million equivalent to Pak. Rs.72.732 million was allocated. It is further claimed that respondents had undertaken that the allocation shall remain reserved for their project if they paid the commitment charges. Accordingly, International vendors were invited by the respondents and consequently the respondents communicated their approval of machinery for the purchase. Thus the appellants secured the Industrial plot and the project is in its stride with large investment from the sponsors. It is also alleged that the committee of respondents sat over the issuance of clearance and the appellants filed C.P. No.1450/87 before this Court which was subsequently withdrawn. It is alleged that this sanction was cancelled on 2‑5‑1988 on the ground of non‑payment of debts of the sister companies which position was explained to the respondents but they were not convinced and the appellants again filed another Constitution Petition being, C.P. No.D‑383/1988, challenging the impugned order. This Constitution Petition was dismissed in limine. Thereafter, the appellants filed the present suit with the following prayers:‑

4. "(a) to declare that the cancelling of the contract between the parties (vide Annexures 'C' and 'D') by letter dated 2‑5‑1988 (Annexure K) is in illegal breach of contract and order the defendants, by judgment and decree to specifically perform it:

(b) to further declare that the plaintiff are not in breach of clause (vi) of para. 8 of the contract and the contract and not the allocation of foreign exchange could. be cancelled/ withdrawn:

(c) to also declare that when the contract having been performed cancellation of loan and withdrawal of foreign exchange allocation on the said ground causes irreparable harm and injury to the plaintiff;

(d) to grant consequent relief by directing I.D.B.P. through appropriate order/judgment/.decree that they do specifically perform the contract;

(e) to grant a sum of Rs.5 crore for a year's delay which the project has suffered due to illegal act and action of the defendants and to make it recurring for each year of delay;

(f) ???????? In the alternative to grant a compensation of Rs.50 crore, being the estimated profit and appreciation envisaged in 10 years 'working of the textile mills;

(g) ??????? to grant costs to the plaintiff and also exemplary cost in the sum of Rs.10 lacs for the vexatious and frivolous act of the defendant;

(h) ??????? to grant such other/further/additional relief or reliefs, direction /directions, order/orders, as this Hon'ble Court may deem fit or appropriate in the circumstances mentioned hereinabove."

5. We have heard the learned Advocate for the parties. Mr. Fazle Ghani Khan, Advocate for the appellants, has argued that the appellants in the matter were required to pay the commitment charges of Rs.2.24.330 as required in the letter of respondents bearing No.ROK%DOC/119. dated 21‑4‑1987 and that after having received the above payment, the respondents could not cancel their allocation. He has further argued that the said other companies had nothing to do with the appellants and that the appellants were not responsible for their dues. He had argued that in view of above facts, specially the letter of 21‑4‑1987 under which the required payment was made, the respondents had no authority to cancel their allocation and that the appellants have a very strong case for grant of injunction as prayed .

6. Mr. A.I. Chundrigar, learned Counsel for the respondents, repelling the above contentions, has drawn our attention to the counter‑affidavit filed by respondents in the suit which clearly shows that the directors of the said two units namely, Shahyar Textile Mills Ltd. and Fazal Sugar Mills Ltd. are more or less same as that of the present appellants and even the address of the present appellants and the Fazal Sugar Mills Ltd. Is the same. This affidavit also shows the amount of dues against the three companies. He has argued that the three companies are actually owned by the same family and the same set of persons /directors are the sponsors thereof and therefore liable. Mr. A.I. Chundrigar has also drawn our attention to the following clauses of the letter of sanction:‑

7. "Clause 8(vi). The sponsors will clear over dues if any in respect of their units financed by IDBP;"

8. "Clause 9(xiv). The sanction of loan is subject to availability of foreign exchange at the time of opening of L/C and approval of the foreign loan giving agency."

9. Mr. Chundrigar has further argued that above clauses show the appellants are liable to clear the overdues of their units financed by the IDBP.

10. From the above submissions of the learned counsel we are of the view that the point in controversy cannot be resolved unless the evidence is brought on record. We are tentatively of the view that the appellants have not been able to show the existence of the prima facie case in their favour.

11. We are also of the view that the learned Single Judge has A rightly held that the appellants have not been able to show that they will suffer the irreparable loss in case the injunction as prayed is not granted and also that the balance of convenience is not in their favour.

12. We are, therefore, of the view that the present appeal has no substance and the same is dismissed in limine.

13. Above are the reasons for the short order passed by us on 13‑11‑1988.

14. M. Z. S. /C‑69/K ???????????????????? Appeal dismissed.