ADIN KHAN & GILOTI TRANSPORT CO. Versus GOVERNMENT OF PAKISTAN, STATE AND FRONTIER REGIONS DIVISION
ORDER
This is an application under Order, XXXIX, Rules 1 and 2, C.P.C. (CMA No.2237/95) filed by the plaintiff seeking temporary injunction restraining the defendants, their agents, officials from terminating the verbal contract dated 30‑3‑1995 allegedly entered into by the plaintiff and defendants for the transportation of wheat from Karachi to N.‑W.F.P., Punjab and Balochistan. It is further prayed in this application by the plaintiff that the defendants may be further restrained from inviting and accepting the bids/tenders in furtherance of an advertisement published in daily Dawn, Karachi dated 15‑4‑1995.
2. The plaintiff is a proprietorship firm and as claimed is running a transport business. The plaintiff and the defendants entered into contract for transportation of donated wheat for Afghan refugees from Karachi Port to different parts of N.‑W.F.P., Punjab and Balochistan. This contract was effective from 21‑4‑1993 to 30‑4‑1994. A copy of the same has been filed alongwith the plaint as Annexure‑A. It is averred in the plaint that on 19 th March, 1994, vide Annexure‑B to the plaint, the defendants extended the period of contract from 1‑5‑1994 to 30‑4‑1995. It is the case of the plaintiff that the plaintiff on 11‑3‑1995 applied for extension of the period of the contract for the year 1995‑96 through Annexure‑C to the plaint which was verbally extended by the defendants till 30th March, 1996 on the basis of previous performance of the plaintiff. The plaintiff has further claimed in the plaint that on the basis of such verbal extension dated 30‑3‑1995, the plaintiff established its branches at Islamabad and Karachi and engaged more than 150 members for smooth running of the business, that the plaintiff also engaged private trucks for quick transportation of the donated wheat and as a result incurred nearly Rs.5 million, that on 15‑4‑1995 the plaintiff noticed an advertisement published on behalf of the defendants calling invitation for tender which, according to the plaintiff, is illegal, mala fide and is unauthorised act of the defendants. In view of these alleged facts, the plaintiff has approached this Court with the prayers for specific performance of the verbal contract dated 30‑3‑1995 and declaration to the effect that the advertisement dated 15‑4‑1995 be declared illegal and mala fide. The plaintiff has also prayed for injunction restraining the defendants from committing breach of contract The plaintiff has also claimed damages against the defendants at the rate of Rs.5 million for the loss of prospective business.
3. The defendants in their counter‑affidavit have admitted grant of contract from 30th April, 1993 to 30th April, 1994. The defendants have also admitted extension of the period up to 30th April, 1995 but have denied that through a verbal contract it was extended up to 30th June, 1996. They have also denied the right of the plaintiff to maintain the suit and that the injunction could not be granted in view of section 56 of the Specific Relief Act, 1877.
4. I have heard Mr. Gul Zaman Khan, Advocate on behalf of the plaintiff and Mr. Syed Tariq Ali, Standing Counsel for the defendants. It is vehemently contended by Mr. Gul Zaman that under section 10 of the Contract Act, 1872 even oral agreement constitutes a valid and legal contract. He has relied upon the case of Ali Muhammad Khan v. Ria7uddin Khera (PLD 1981 Karachi 170) and the case of Mrs. Mussarat Shaukat Ali v. Mrs, Safia Khatoon and others (1994 SCMR 2189). In the case of Ali Muhammad Khan, a learned Division Rench of this Court held that for a valid agreement, it is not necessary that it should be in writing. In the same judgment, it was further held that an oral agreement and for its proof requires clearest and most satisfactory evidence. In view of the denial by the defendants that there was no verbal extension on 30th March, 1995 and in view of the fact that on the last occasion the contract was extended through a written communication which has been filed by the plaintiff as Annexure‑B to the plaint, the burden is more‑ heavier upon the plaintiff to establish, prima facie a case for the oral agreement. Mr. S. Tariq Alt, learned Standing Counsel for the defendants has also relied upon Article 173(3) of the Constitution of the Islamic Republic of Pakistan, 1973 which is reproduced as under:‑‑
"173. Power to acquire property and to make contracts, etc.‑‑
(1) -------------------------------------
(2) -------------------------------------
(3) All contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made in the name of the President or, as the case may be, the Governor of the Province, and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the President or Governor by such persons and in such Manner as he may direct or authorize.
(4) -------------------------------------
According to the learned Standing Counsel, it is mandatory for the Federal Government to enter into written contract in the name of the President and that the Government functionaries are not authorised to enter into any oral contract. He has also relied upon the case‑law reported as Dhulipudi Namayya v. The Union of India (AIR 1958 Andhra Pradesh 533), Nalini Kanta Roy v. The Province of East Pakistan and others (PLD 1961 Decca 536), Karachi Flour Millers' Union and 3 others v. Province of Sindh and 4 others (PLD 1976 Karachi 623), Messrs Pakistan Associated Construction Ltd. v. Asif H. Kazi (1986 SCMR 820) and Karachi Gas Company Ltd. v. Fancy Foundation (PLD 1977 Kar. 91).
5. The rule laid down in the case of Nalini Kanta Roy is very much applicable to the facts of the present case. In the reported case, the plaintiff asserted that the Government of the then East Pakistan accepted that in the event of Zinda‑Bahar House which was then under the occupation of the plaintiff, if requisitioned, the Government would provide her with an alternate accommodation. She tried to establish an agreement of exchange between her and the Government from various circumstances. A learned Division Bench of the Dacca High Court held as follows:‑‑
"The statute, therefore, provides a particular method by which a contract should be made with the Government. In this case no formal document was executed. The plaintiff has merely relied on the assurance given by the Accommodation Authority. The Government, however, is not bound by the said assurance as it was not expressed to be made by the Governor. It is well‑settled that, when a statute provides a particular method by which a contract should ‑be made, there must be compliance with the provisions of the Statute: See H. Young & Co. v. The Mayor and Corporation of Royal Leamington LPA (LR 8 AC 517) and Province of Bengal v. S.L. Puri (51 CWN 753). It is thus clear that the alleged agreement is not also in accord with the statutory requirements laid down in section 175(3) of the Government of India Act. "
6. It was next contended by Mr. Gul Zaman that the defendants have cancelled/terminated the agreement without prior notice to the plaintiff. It is argued that in the written agreement, it was provided that for termination of contract a 15 days' notice period is required. He has relied upon the case of Muhammad Asif and another v. Chairman, Railway Board and another (1991 CLC 1105), Shahab‑ud‑Din and others v. Mst. Mariam Bibi and others (1995 MLD 45) and Messrs Pacific Multinational (Pvt.) Ltd. v. Inspector‑General of Police, Sindh Police and 2 others (PLD 1992 Karachi 283). None of the principles as held in these reported cases, is of any help to the plaintiff. The case of Muhammad Asif relates to the cancellation of allotment by the authorities without issuing a prior show‑cause notice. In the case of Shahab‑ud‑Din, the petitioners' names were deleted from the joint tenancy rights without notice to them and without affording any opportunity and therefore, the act was declared to be illegal. In the case of Pacific Multinational, a Division Bench of this Court held that the State has a Constitutional obligation to act fairly even when performing an administrative function and that where the State while awarding a contract to a party has acted in an unfair or arbitrary manner or has discriminated against one of the parties who contested for the award of the contract, such grievance can be looked into by the High Court under Article 199 of the Constitution.
7. For obtaining an interim injunction, the plaintiff is required to establish all the three ingredients i.e. prima facie case, irreparable loss or injury and balance of convenience. (For any reference, see Marghoob Siddiqui v. Hamid Ahmed Khan and others (1974 SCMR 519), Haji Khan and another v. Government of Sindh and others (1990 MLD 155) and Messrs National Construction Company Limited v. Aiwan‑e‑Iqbal Authority, Lahore (PLD 1992 Lahore 86). In the instant case, I am convinced that the plaintiff was not able to make out a case of interim injunction in absence of the abovementioned ingredients.
8. In the end, it was also argued by the learned counsel for the plaintiff that the tender/bid received in response to the tender notice published in daily Dawn is much higher than the amount which was being paid by the defendants to the plaintiff for the transportation of wheat as per written contract. It is argued that this will cause heavy losses to the Government funds. Mr.. Gul Zaman has also stated at Bar that the plaintiff is willing to carry on transportation of wheat at the previous price but the defendants are not allowing them and that such act of the defendants shall cause heavy monetary losses to the Federal Government. Be that as it may, it would be pertinent to observe, with a view to save national exchequer that the defendants shall also invite rates from the plaintiff (if willing) and after considering all the tenders including that of plaintiff, if any, shall award the contract as per rules and regulations. With this observation, C.M.A. No.2237/95 is dismissed.
A.A./A‑54/K Application dismissed.