Messrs SPLENDOURS INTERNATIONAL (Regd.) Versus Messrs M. Y. MALIK & COMPANY (Regd.)
MUHAMMAD ASADULLAH, J.‑‑ Messrs Splendours International, the appellants' firm, has been running the business relating to medicines and owned various projects relating thereto. One of their projects was Shifa Medico (Manufacturing Division). Its Managing Partner Chaudhry Sami Ullah belongs to Ahmadis Community. In 1974 there were communal riots between the Muslims and Ahmadis. Finding it difficult to run their business of Shifa Medico (Manufacturing Division) the appellants' firm agreed to sell the said Manufacturing Division to the respondents through an agreement dated 1‑11‑1974. According to the agreement (Ext.D.42/P.23) the appellants firm sold the project of Shifa Medico (Manufacturing Division) to the respondents for a consideration of Rs.15,00,000. It was agreed to hand over, under the said sale, to the respondents "all the fixed assets pertaining to manufacturing side, all the stocks of raw material, goods in process and that of finished goods manufactured by the Manufacturing Division of Shifa Medico "as were then lying in the godowns of the laboratory. A sum of Rs.2,00,000 was received in cash by Chaudhry Sami Ullah, the Managing Partner of the appellants' firm, on 30‑10‑1974 and apart from its separate receipt, the receipt thereof was acknowledged in the said agreement. A sum of Rs.2,00,000 had to be paid within three months through Bill of Exchange drawn at 90 days' sight from 1‑11‑1974. A sum of Rs.11,00,000 was left with the purchaser in regard to assumption of the liabilities of the appellants' firm. This amount had to be accounted for by the purchasers. The remaining conditions are contained in the said agreement. Chaudhry Sami Ullah, the Managing Partner, left for America in the end of December, 1974 and returned to Pakistan in October, 1975. Soon after the agreement dispute arose between the parties in regard to the performance of the said agreement. The appellants' firm, ultimately, filed this suit on 5‑4‑1976 for recovery of Rs.68,25,000 as also for possession of the disputed premises i.e., 10, 11 and 12 Vakeel Khana, Patiala Ground, Link Mcleod Road, Lahore and 7 Aziz Mansion, Link Mcleod Road, Lahore. They also claimed interest on Rs.13,00,000 which according to them remained unpaid as also interest at 15% per annum on the total claim. They also claimed the return of narcotics and books of accounts including the record.
2. The details of their claim in regard to the recovery of Rs. 68,25,000 are contained in para.21 of the plaint and are as follows:‑
(a) Balance unpaid consideration
Rs.13,00,000.
(b) Interest and bank charges on amount at (a) above.
Rs.2,00,000.
(c) Risk purchases by Army and Civil Government etc. approx.
Rs.3,00,000.
(d) Deterioration of stocks pledged with Bank which could not be released due to mala ride non‑payment of Rs.13,00,000
Rs.2,00,000.
(e) Business loss sustained approx.
Rs.5,00,000.
(f) Goods illegally withheld and not delivered lying in the premises 10, 11 and 12, Vakilkhana, Link Mcleod Road, Lahore, Approx.
Rs.10,00,000.
(g) Illegal dispossession of premises 10, 11 and 12, Vakilkhana, Link Mcleod Road, Lahore.
Rs.6,00,000.
(h) Illegal dispossession of premises 7‑Aziz Mansions, Link Mcleod Road, Lahore, including stocks equipment etc.
Rs.8,00,000
(i) Fraudulent withdrawal of amounts from bank.
Rs.5,00,000.
(j) Damages on account of misuse of manufacturing licence.
Rs.6,00,000.
(k) Building material lying in the premises.
Rs.75,000.
(l) Damages on account of shock and loss of health including mental torture to the plaintiff.
Rs.5,00,000.
(m) Damages on account of non‑payment by the defendants.
Rs.2,00,000.
(n) Two Volks Wagon Ambulances
Rs.50,000.
Rs.68,25,000.
3. in regard to their claim for possession of the abovementioned premises the case of the appellants' firm was that they sold only the goods lying in the said godowns and did not agree to pass over physical possession to the respondents. Damages to the tune of Rs.6,00,000 and Rs.8,00,000 (totalling Rs.14,00,000) contained in items `g' and `h' above were claimed on account of illegal dispossession from the said premises. The claim to possession of the said premises was at first given up by the appellant firm in arguments on 5‑12‑1987, and then, the claim in regard to the said items `g' and `h' was also given up on the last day of arguments. The appellant firm also gave up the claim in regard to items b, c, d, e, i, n and m above during the arguments and the learned counsel for the appellants confirmed the giving up of the said items including items `g' and `h' in writing after the arguments.
4. The suit was contested by the respondents alleging that a sum of Rs.2,00,000 in lieu of payment through Bill of Exchange was made to the appellants through their General Manager Azam Qureshi on 27‑2‑1975 and the remaining amount was consumed in discharging the liabilities of the appellant firm. They claimed that a total sum of Rs.13,37,311.09 was paid by the respondents in addition to the said payment of Rs.2,00,000 by discharging the liabilities of the appellant firm. As such they claimed that they had paid Rs.13,37,311.09 to the appellant firm although they were liable to pay a sum of Rs.13,00,000 as the balance of sale prise which remained outstanding after the payment of Rs.2,00,000 on 30‑10‑1974 as initial instalment of the sale prior. They alleged that the manufacturing division was sold to turn as a whole alongwith the said premises which are owned by other persons and were on rent with the appellant firm since before the execution of the said agreement and that they became the tenants of the landlords in place of the appellant firm. They also claimed the cost of the movable property which was not delivered to them under the terms of the agreement.
5. During the arguments before us the respondents have confined their claim to the following items and amounts, the details of which were placed on record by the learned counsel for the respondents during the arguments:‑
(a) Total cash/cheque payments made to the plaintiff and his creditors as per Ext.D.4G.
Rs.8,21,844.09
(b) Payments made to employees of Shifa Medico by order of MartialLaw Authority as per Exts. D.41/1 to D.41/13.
Rs.15,467.00
(c) Claim of the defendants from the plaintiff on account of non‑delivery/short delivery of agreed items as per details attached.
Rs.5,34,000
Rs.13,71,311.09
Further, details of item‑c above as given by the respondents are as follows:‑
(1) Morphine Injection (1,00,000) ampoules
Rs.1,00,000
(2) Delivery Vans (2 Nos.)
Rs.90,000
(3) Cycolostyle Machine (1. No.)
Rs.15,000
(4) Electronic Calculators (3 Nos.)
Rs.6,000
(5) Typewriter Machine (No.1)
Rs.3,000
(6) Ampoule Printing Machnine (1 No.) (with accessories)
Rs.20,000
(7) Total value of pledged stocks(LIM A/C of raw materials, etc. lying in the godown at 13 Vakilkhana).
Rs.7,00,000
Note: This stock was to be got released by the defendants after payment of Rs.7,00,000 to the Bank but on account of fluctuation of prices of stocks plaintiff himself got it released and sold for more than Rs.10,00,000 and thus deprived the defendants of the profits worth Rs.3,00,000
Rs.3,00,000
Total
Rs.12,34,000
Less liability as per item `7
Rs.7,00,000
Net claim:
Rs.5,34,000
6. Out of the pleadings the following issues (including the additional issues) were framed by the learned trial Court:‑
(1) Whether the plaintiff is entitled to recover any amount from the defendants? If so, what amount? O.P.P.
(1‑A) Whether the suit is within time?
(2) Whether the plaintiff is entitled to the possession of the premises mentioned in the prayer of the plaint? O.P.P.
(3) Whether the defendants are in possession of any narcotics and books of accounts including record as pleaded in para. Nos.13 and 14 of the plaint? If so, whether the plaintiff is entitled to their return? O.P.P.
(4) Whether the suit is bad for misjoinder of parties? If so, to what effect? O.P.D.
(5) Whether the suit is liable to be dismissed in view of the preliminary objections Nos.2 and 3 in the written statement? O.P.D.
(6) Whether the plaintiff has no cause of action? O.P.D.
(7) Whether the plaintiff has not come to the Court with clean hands? O.P.D.
(8) Whether the suit is not maintainable? O.P.D.
(9) Whether the plaintiff's suit is misconceived and is incompetent? If so to what effect? O.P.D.
(10) Whether the defendant is entitled to special costs/under section 35‑A, C.P.C.? If so to what quantum? O.P.D.
(10‑A) Whether the plaintiff firm has ceased to exist, if so, its effect? O.P.D.
(11) Relief.
7. The learned Civil Judge, 1st Class, decided issues Nos.1, 2, 3, 4, 8, 10 and 10‑A in the negative while issues Nos.1‑A, 5, 6 and 7 were decided in the affirmative. Issue No.9 was decided partly in favour of the appellants and partly in favour of the respondents. As a consequence of decision of issues Nos.1, 2, 3 and 6 he dismissed the suit through judgment and decree dated 11‑10‑1983, leaving the parties to bear their own costs. ‑This appeal has been filed by the appellants to challenge the said judgment and decree. We have perused the record and have. heard the arguments.
8. As narrated above in paras Nos.2 and 5 the. parties have confined their clamm to the items and amounts detailed therein. The parties have advanced their arguments only on issue No.1. The remaining issues are either consequential thereto or are not material and as such have not been pressed. In other words it is to be determined as to whether the respondents have paid the remaining sum of Rs.13,00,000 to the appellants under the said agreement or what amount they have paid out of the same to the appellants. It has also to be seen as to whether the claim f the appellants other items as detailed above is Allowable to them and if so to what extent. As a result it will have to be determined as to whether any amount is due to the appellants from the respondents and if so what is the extent of the said amount.
9. As mentioned above the appellants have giver, up their claim to possession of the premises in dispute and to damages for dispossession therefrom. This would mean that the appellants concede that the Shifa Medico (Manufacturing Division) as a whole alongwith right of possession of the premises in dispute was sold by the appellants to the respondents and that only the stocks in the godowns etc. were not sold. It may, however, be added that a perusal of the agreement Ext.D.42/Ext. P.23 will also show that the Manufacturing Division as a whole and not the stocks etc. were sold by the appellants, to the respondents. Similarly the cancellation of insurance policies and the refund claimed and made thereunder through Ext. D.46 and Ext.D.47 also supports the said conclusion. The temporary retention and then shifting of telephone from 7‑Aziz Mansions evidenced by Ext.D.30 to Ext.D.33 also supports the same thing. Letter dated 4‑11‑1974 Ext.P/f'.7 written by the appellants to the Health Department regarding the said sale also lends support to this conclusion. Further, notices Ext.D.1 to Ext.D.4 issued in various newspapers regarding the change of ownership, which notices were never objected to or refuted by the l appellants, also prove the same fact.
10. Item 'a' of para. 2 above relating to the payment or adjustment of the remaining sale price of Rs.13,00,000 will be taken up separately as alongwith the same the claim of the respondents regarding cash payment and discharging of liabilities will have to be discussed item by item. Taking up the next item, i.e. item 'f' relating; to goods illegally withheld by the respondent% it will be sufficient to say that there is no evidence on record to prove that any item which was not sold by the appellants to the respondents through the said agreement remained stored in the stores transferred to the respondents. Therefore, the appellants have failed to prove their claim to Rs.10,00,000 on this item.
11. Coming to item 'j' of para. 2, i.e., damages on account of misuse of manufacturing licence it is to be seen as to whether under the said agreement, Ext.D.42, the respondents were entitled to have manufacturing licence to carry on the business of manufacuturing drugs in the said premises. Agreement Ext.D.42 makes it clear in itself that the appellants had given up the business of manufacturing of drugs and had transferred and sold the said business to the respondents. Therefore, the respondents had a right to carry on the business of manufacturing of drugs in the said premises with the material, machinery, the fixed assets etc. lying therein. Not only the right to manufacture was sold to the respondents but also the appellants undertook "not to start identical business carried out by manufacturing division of Shifa Medico which he is selling to the purchasers in Lahore for at least 5 years". This is contained in clause 7 of the agreement and it clearly means that not only the right to manufacture and the right to obtain the drugs manufacturing licence was transferred to the respondents but also the appellants undertook not to carry on similar business in any name in Lahore for 5 years. This is why the appellant firm wrote a letter dated 4‑11‑1974, Ext. P/PW‑7, to the Health Department intimating that they had disposed of the Manufacturing Division to the respondents and it is on the basis of this letter that manufacturing licences Ext.D.43 and Ext.D.44 were issued in favour of the respondents. Accordingly the respondents have not misused the manufacturing licence or any manufacturing right of the appellants. The claim contained in item‑j, is therefore, disallowed.
12. The premises in dispute were on rent with the appellants and, therefore, it was not expected that any building material belonging to the appellants would be lying there. However, there was no condition in the agreement Ext.D.42 that any such material would be removable by the appellants. In any case there is no cogent evidence to prove that any such material was lying there. The claim contained in item `k' of para 2 is disallowed.
13. In item `1' of para.2 the appellants have claimed the damages on account of shock and loss of health including mental torture to the tune, of Rs.5,00,000. Appellants have withdrawn the claims in regard to items `d' and `e', `g' to `i' and `m' and `n' para.2 above and as also claim to possession of the premises in dispute and interest. Therefore, it were the appellants who made false and huge claims. Further, Chaudhary Sami Ullah the Managing Partner of the appellants' firm had left for America leaving the respondents to search out the creditors of the appellants for discharging their liabilities. In these circumstances the question of any shock, loss of health or mental torture to the appellants does not arise. Therefore, the claim contained in the said item `1' is also disallowed.
14. This leaves us with item 'a' of para. 2 above, amounting to Rs.13,00,000. It is admitted that a sum of Rs.2,00,000 was paid by the respondents to the appellants by the time the agreement Ext.D.42 was executed. It is also admitted that the bill of exchange for Rs.2,00,000 was not honoured by the, respondents and as such the payment of Rs.2,00,000' was not made as stipulated in item 'b' of condition No.1 of the said agreement. The respondents alleged that the said amount of Rs.2,00,000 was paid in cash: to Azam Qureshi on behalf of the appellants on 27‑2‑1975 through EA. D.15. It has been explained by the learned counsel for the respondents that the amount was paid in cash so that the same could be utilized by the family of Chaudhary Sami Ullah because if the payment had been made through cheque in the name of Chaudhary Sami Ullah he would not have been able to encash it for the benefit of his family. Leaving apart the question whether Azam Qureshi was authorised to receive the money on behalf of the appellants' firm and leaving aside the question whether he actually received the same and signed Ext.D.15 or not, it is difficult to believe that the said payment was made to Azam Qureshi or was made to him on behalf of the appellants. The explanation that if the payment had been made by cheque the amount could not be utilized by the family of Chaudhary Sami Ullah does not sound reasonable and is not acceptable. If the payment had been made even through a crossed cheque it would have gone to the account of Chaudhary Sami Ullah or the appellant firm. In these days of so fast communications and prompt bank facilities it could not have been difficult for Chaudhary Sami Ullah to issue a cheque in favour of any member of his family and they could easily get the cash in Pakistan very promptly. It is the contention of the respondents that the dispute had arisen between the parties long before the alleged payment of Rs.2,00,000 on 27‑2‑1975 through Ex.D.15. It is the case of the respondents that the dispute was referred to Chaudhary Ghulam Rasool for arbitration and he gave the award dated 27‑1‑1975 Ext.D.19. With the existence of this dispute, leaving aside the other disputes, no prudent man could make such a big payment to a third person and that too in cash. Apart from that, the signatures of Azam Qureshi were not attempted to be proved by the respondents through any handwriting expert. Although we would give little significance to the evidence of Mr. Zaka A. Malik (PW.8) yet it will be worthwhile to mention that he has given the opinion that Ext.D.15 is not signed by Azam Oureshi. The signatures of Azam Qureshi were F attempted to be proved through Abdul Hafeez (DW.10), Manager of Allied Bank, but his evidence does not support the case of the respondents because he also states that all his alleged signatures on many documents differ from each other. Therefore, he is not definite as to which are his real signatures and as to which signatures tally with Ext.D.15. The payment of Rs.2,00,000 through Ext.D.15 is not proved and is disallowed.
15. The other big payment is of Rs. 50,000 to Mst. Azra Sheikh on 31‑12‑1974 through Ext.D.16 read with Ext.D.9, Ext.D.27 and Ext.D.28. It is difficult to dispute that this payment was not made to Mst. Azra Sheikh mostly because the payment is proved by the bankers and is admitted by Mst. Azra Sheikh as DW.20. However, the real question is as to why and on what account the said payment was made to her, even, if the appellants had desired that such payment should be made to her. Under the agreement the respondents were to discharge the liabilities of the firm and they were not obliged and required to discharge their personal or extraneous liabilities. Mst. Azra Sheikh was not a creditor of the firm and nothing was due to her from the firm. Therefore, no payment could be made to her legally. The respondents should have refused the payment even if the appellants had desired that it should be made and that too through an authorised agent. Accordingly, the said payment cannot be taken to be a payment towards the discahrge of liability of the appellant firm. The claim of the respondents in relation to this item is also disallowed.
16. The claim of the respondents in regard to discharge of liabilities is contained in Ext.D.40 and Ext.D.41/1 to Ext.D.41/13. The said items of Rs.2,00,000 and Rs.50,000 are also included therein. The remaining items will be discussed .below one by one. However, before dealing with the same it is necessary to see as to how the liabilities of the appellant firm were to be discharged by the respondents. Condition No.2 of agreement Ext.42 deals with the discharge of liabilities. It contains two conditions, one that the creditors will make a demand to the sellers (appellants) and the other that the sellers will certify the same in writing to the purchasers (respondents). Legally the demand could also be made to the sellers directly or through an authorissed agent or even through the purchasers. Similarly, the same could be certified in writing by the sellers to the purchasers directly or through any agent. As stated above the Managing Partner of the appellant firm left for America due to the communal riots and unrest. If he would not authorise any one to perform the duties on his behalf under the said agreement, the result would have been a chaos and vacuum. As a matter of fact in such a contingency the respondents would have been left to their own and they had to discharge the liabilities of the appellant firm according to their own discretion and judgment. Therefore, if it is taken that Chaudthary Sami Ullah did not authorise any one to act on his behalf either orally or in writing then the respondents were justified in discharging the liabilities of the appellant firm in their own discretion. The respondents allege that Chaudhary Sami Ullah authorised his wife Mst. Zubaida Begum, his brother Chaudhary Farooq and Azam Qureshi, their ex‑Manager to deal with the respondents. on behalf of the appellant firm and that he did so at first orally and then through authority letter dated 6‑12‑1974 Ext.D.28. Apart from other evidence the respondents have produced Mr. A. G. Pasha, handwriting expert (DW.22) and he has given the opinion that the said authority letter Ext‑1.22 is signed by Chaudhary Sami Ullah. The appellants have also produced' another expert Mr. Zaka A. Malik as PW.8 who has given the opinion that Ext.D.22 does not bear the signatures of Chaudhary Sami Ullah. The evidence of a handwriting expert is not always sufficient to prove the disputed signatures of a person. It has to be weighed and judged keeping in view the other evidence on record and the circumstances of each case. The opinion of Mr. Zaka A. Malik PW.8 was not obtained through the Court or with due notice to the respondents. Therefore, his I evidence is very weak and cannot be looked into. On the other hand the evidence of MrA. G. Pasha (DW.22) fords support from the other cogent evidence on record. Abdul Hafeez, Manager of Allied Bank appeared as DW.10 and he 'deposed that Ext.DW.22 bears the signatures of Chaudhary Sami Ullah. A comparison of his signatures with his admitted signatures on agreement Ext.D.42/Ext.P.23 also yields the same result. The circumstance that the appellant firm had to make an alternate arrangement in place of Chaudhary Sami Ullah who was leaving for America also leans towards the execution of Ext.D.22 by him. Therefore, it is proved that the authority letter dated 6‑12‑1974. Ext.D.22 was duty executed by Chaudhary Sami Ullah and he authorised Mst. Zubaida Begum, Chaudhary Farooq and Azam Qureshi to act on his behalf for the performance of agreement Ext.42. The learned counsel for the appellants has argued that even if it is a genuine authority letter it will take effect from 6‑12‑1974 and will not apply to transactions made before the said date. This argument has no force because a perusal of the said document will show that it is a confirmation of an oral agreement made between the parties earlier. It specifically mentions "as agreed in between your good selves and us" which means that the said authority had also been given orally and was then confirmed. The claims of the respondents, therefore, will be examined in the light of this conclusion.
17. There are payments which have been made by the respondents without any authorisation either from Chaudhary Sami Ullah or from any of the. said three persons. It is argued by the learned counsel for the appellants that such payments can in no case be debited to the appellants. It is to be seen whether the respondents had any implied authority to make payments which the appellants were in any case liable to make. The respondents were sold the manufacturing division for running the same and by law they became the successors‑in‑interest of the appellants. Therefore, they had the implied authority to make the payments which would have been made by the appellants if they had to continue to run the business themselves. Similarly, they were authorised to make the payments for items without which they could not run their business. In this clause fall the arrears of the pay etc. of the staff as they would not work without clearance of their dues. In this category also fall the bonus etc. which became payable to the staff for the period prior to the agreement because the staff union had won the same through the labour Department etc. Similarly, the dues determined by the Martial Law Authorities to be payable to the staff for the period prior to the agreement Ext.D.42 had to be paid by the respondents because without making payment of such charges they could not run the business. The condition in agreement Ext.D.42 that liabilities would be notified by the sellers did not mean that every liability had to be so notified. Il' a due was a real liability of the firm it had to be cleared and discharged either by the appellants or by the respondents and for doing so the respondents had an implied authority. Accordingly the claim of the respondents will be weighed keeping to view the said authority as well:
18. Before taking up items 'a' and 'b' of para.5 above it will be useful to examine the claim contained in item 'c', the details of which are given in the second part of the same para. The said items are dealt with seriatum:‑
(1) Morphine Injection (1,00,000) Rs.1,00,000 ampoules
Condition 'No.6 of agreement Ext.D.42 deals with narcotics, i.e., Morphine injections. It will' be seen that Morphine injections were not sold to the respondents through the said agreement. It was agreed that the same will be returned to the sellers as these were subject to narcotics and excise restrictions. It was further agreed that "in case and to the extent these are needed for fulfilment of the orders of Defence Forces these will be made available to the purchaser against payment of raw mateial". This would mean that the injections remained in the ownership of the appellants and the respondents could claim supply of the same to the extent of the orders of the Defence Forces already placed by them with the appellant firm and that too not free of cost but on payment of cost of raw material. Therefore, the respondents cannot claim cost of Morphine injections. This claim is disallowed.
(2) Delivery Vans (2 Nos.)
Rs.90,000
There was no agreement to deliver the said vans to the said respondents. The claim is disallowed.
(3) Cyclostyle Machine (1 No.)
Rs.15,000
As for item No.2.
(4) Electronic Calculators (3 Nos.)
Rs.6,000
As for item No.2.
(5) Typewriter Machine (1 No.)
Rs.3,000
As for item No.2.
(6) Ampoule Printing Machine (1No.) (with accessories)
Rs.20,000
As for item No.2.
(7) Total value of pledged stocks (LIM A/C) of raw materials, to lying in the godown at 13 Vakilkhana.
Rs.7,00,000
The total value for pleading of these stocks is Rs.7,00,000. At first the. respondents had claimed re‑imbursement of Rs.7,00,000 for which the goods were, pledged with the bank. However, they have now given up the claim to that amount because they never paid the said amount to the bank for clearance of goods. They have now claimed loss of profits on the supply of goods. Under the agreement Ext.D.42 they were not authorised to clear the said debt of the' appellants and were not authorised to get the stocks from the bank on payment of Rs.7,00,000. Apart from that all the pledged goods were imported medicines and under condition No.4 of the said agreement were not transferred to the respondents and remained owned by the appellants. Therefore, the appellants were within their rights to get the said goods released for their own use and benefit. The respondents cannot claim any loss of profit in respect thereof. This item is also disallowed.
19. Finally the items contained in Ext.D.40 and Exts.D.41/1 to D.41/13 are examined seriatum as under:
(1) Payment of Rs.2,00,000 on 30‑10‑1974 through Ext.D/PW.7. It is not disputed and is allowed.
(2) Payment of Rs.500 to Mr. Fazal Ahmad is not supported by any receipt and is disallowed.
(3) Wages amounting to Rs.278.67 paid to Miss Elizabeth Elvina through Ext.40/1 relate to the period prior to the agreement Ext.D.42 and is sufficiently proved. It is allowed.
(4) Payment of salary amounting to Rs.125 to Mr.Tariq through Ext.40/2 is allowed for similar reasons,
(5) Rs.15,00,000 credited to Mr. Sami Ullah is a notional sum which had to be paid to Mr. Sami Ullah and had to be accounted for.
(6) Payment of Rs.9,964.80 to M/s. Corning Glass Ltd. certified by Ext.D.10 This is supply of glass impoules. The firm was sole manufacturer and suppliers of the ampoules and if their arrears were not cleared they would not make any further supply to the respondents. They were, therefore, compelled by the circumstances and as of necessity to make the said payments. The same is allowed.
(7) As.200 as repair bills. It is supported by voucher Ext.D.40/37 and related to the period prior to the agreement. It is allowed.
(8) Rs.210 paid to Miss Nasreen through Ext.D.40/5 as wages are allowed for reasons mentioned in item 3.
(9) Payment of Rs 3,408.80 as salaries and wages of the staff for the month of October, 1974. is witnessed by Ext.D.14. It is verified by A7am Qureshi and is also proved by L.G. Moris PWA The dues of the staff had to be cleared first because the respondents had assumed the responsibility for clearance of liabilities of the appellants and second because the staff would not work without clearance of their dues. The item is allowed.
(10) A sum of Rs.5,500 paid to M/s. Authentic Traders through Ext.D.13 is verified by Azam Qureshi and is supported by D.Ws.9,13,19 and 21. It is allowed.
(11) Payment of Rs.90.46 to Miss Khalida as arrears of wages through Ext.D.40/7 is allowed for reasons mentioned in item 3.
(12) Payment of Rs.85.76 to, Miss Rani through Ext.D.40/6 is allowed for similar reasons.
(13) Payment of Rs.210 to Miss Fahmda through Ext.D.40/5 is allowed for similar reasons.
(14) Payment of Rs.1,800 through Ext.D.40/4 as factory rent for August,1974 had to be made to the landlord as it was a clear cut liability of the appellants' firm. The payment is allowed.
(15) The payment of Rs.550.54 as electricity charges is disallowed for want of receipt.
(16) The payment of Rs.812.82 on account of previous water bills is allowed as the same is evidenced by receipts Exts.D.40/3 and 4, and had to be made to save disconnection.
(17). The payment of Rs.2,409.74 through Ext.D.40/8 is allowed for similar reasons.
(18) The payment of Rs.7,822. 75 through Ext.D.12 is allowed as the same is certified by Azam Qureshi.
(19) The payment of Rs3,271. 75 through Ext.D.40/14 on account of previous Sui gas bills is also allowed because the same had also to be made as a liability of the appellants and to save disconnection.
(20) The payment of arrears to Mr. Sukhaira amounting to `Rs.243.00 through Ext.D.40/13 is allowed for reasons given against item 3.
(21) The payment of Rs.9,005 to Unesko Labs through Ext.D.9 is allowed as it is certified by Azam Qureshi.
(22) The payment of Rs.1,300 through Ext.D.11 for supply of Oxygen gas for the period prior to the agreement is allowed as it was a clear cut liability of the appellants and as the payment was necessary to avoid stoppage of future supplies.
(23 & 24) The payment of Rs.72 and 45 through Exts.D.15 and 16 for packing and cartage expenses respectively are not allowed because it is not clear for what purpose and on what authority these were made.
(25) The payment of Rs.25 through Ext.D.40/18 is not allowed as the drug import licence fee had to be paid by the respondents for their own purpose.
(26) The payment of Rs.3,600 through Ext.D.40,/17 as rent for September and October, 1974 is allowed as it had to be made for clearance of the liability of the appellants and to avoid eviction on account of non payment of rent.
(27) The payment of Rs.3,000 through Ext.D.17 to Shirket‑e‑Asghari is allowed as it was made on the authority of Ch. Sami Ullah.
(28) Payment of Rs.19,750 through Ext.D.40/29 on account of export of medicines to Kabul is also not allowed because there is no evidence to show that the appellants had received money for the said supply or that it was a liability of the appellants. The supply was not authorised by any one.
(29) The payment of Rs.20,000 certified by Ext.D.10 to M/s. Corning Glass Ltd. is allowed for reasons given in item 6.
(30) The payment of rent amounting to Rs.900 through Ext.D.40/34‑36 is allowed for reasons mentioned earlier. ‑
(31) The payment of Rs.20,000 certified by Ext.D.10 to M/s. Corning Glass Ltd. is allowed for reasons given under item 6.
(32) The payment of Rs.50,000 to Mst. Azra Sheikh through Ext.D.16 is disallowed for reasons given in para.15 above..
(33) The payment of Rs.2,8tX1 through Ext.D.40/27 as rent for September and October, 1974 is allowed for reasons mentioned earlier.
(34) The payment of Rs.600 through Ext.D.40/38 as rent for November and December, 1974 is disallowed as it relates to the period subsequent to agreement Ext.42.
(35) The payment of Rs.350 through Ext.D.40/40 as rent for January, 1975 is disallowed for the same reasons.
(36) The payment of Rs.3,000 to M/s. Muhammadi Industries, Karachi is not supported by any document and is disallowed.
(37) Claim of Rs.34,462 for export to Kabul through Ext.D.40/31 is disallowed for reasons mentioned in item 28.
(38) The payment of Rs.20,000 certified by Ext.D.10 to M/s. Corning Glass Ltd. is allowed for reasons given in item 6.
(39) The payment of Rs.2,00,000 to Mr. Azam Qureshi through Ext.D.15 is disallowed for reasons given in para.14 above.
(40) The payment of Rs.350 through Ext.D.40/39 as rent for February, 1975 is disallowed for reasons already given.
(41) The claim of Rs.18,207 through Ext.D.40/39 for export to Kabul is disallowed for reasons given against item 28.
(42) The payment of Rs.1,969.57 through Ext.D.40/25 for packing etc. is disallowed for the same reasons.
(43 & 44) The payment of Rs.1,32,654.20 as arrears of pay etc. to the staff is supported by documents Ext.D.8 and Ext.D.40/26. It is proved by D.Ws.1, 2, 3, 5, 9, 13, 19 and 21. These payments as already discussed above had to be made because these were the clear cut liability of the appellants and because the same had to be made to run the manufacturing division. However, in this amount bonus for November and December, 1974 amounting to Rs.2,046 is also included and the appellants were not responsible to pay the same. This amount has to be deducted. Accordingly payment of Rs.1,30,608.20 is allowed.
(45) The payment of Rs.19,214.01 certified by Ext.D.10 is allowed for reasons given in item 6.
(46) The claim of Rs.1,2W through Ext.D.40/22 for supply of goods to Multan is disallowed as it is not proved that the supply was made against any advance receipt by the appellants and because there is no authority for supply of the same.
(47) Rs.7,00,000 on account of payment to bank for release of goods is disallowed for reasons given earlier and as the claim to ^the same was given up before us.
(48) Claim of Rs.1,856.08 for supply made to Karachi is disallowed because there is no evidence to show that any advance had been received by the appellants. It is not supported by any document.
(49) The payment of Rs.15,467 as arrears to the staff under the orders of the Martial Law Authority is allowed. It is supported by Exts.D.41/5, D.41/2, D.41/8, D.41/3, D.41/7, D.41/6, D.41/1, D.41/4, D.41/11, D.41/10, D.41/9, D.41/12 and D.4i/13. These payments were made under the orders of Martial Law Authority and nobody could defy the same. These related to the period prior to the agreement Ext.D.42 and it was a clear cut liability of the appellants which had to be discharged by the respondents.
20. It may be mentioned that no evidence 'has been produced by the appellants even to suggest that the liabilities mentioned (and allowed) above were not their liabilities and were not due to the payees or that the payees had already received the same from them. Therefore, the said dues had to be allowed also for want of rebuttal.
21. As a result of my above discussion the respondents have discharged the liabilities of the appellants to the tune of Rs.3,02,327.70. Adding Rs.2,00,000 paid initially, a sum of Rs.5,02,327.70 in all has been paid by the respondents to the appellants out of a total sum of Rs.15,00,000 which was payable by the respondents to the appellants. Deducting the said amount of Rs.5,02,327.70 the respondents are still liable to pay a sum of Rs.9,97,672.30 to the appellants.
22. Accordingly the appeal is partly accepted. The judgment and the decree of the learned trial Court are set aside. A decree for recovery of Rs.9,97,672.30 is passed in favour of the appellants and against the respondents. The remaining suit of the appellants is dismissed. In the circumstances the parties shall bear their own costs throughout.
AA./S‑256/L Appeal partly accepted.