HABIB JUTE MILLS Limited Versus THE ISLAMIC REPUBLIC OF PAKISTAN
1. The plaintiffs have filed this suit for recovery of Rs.1,60,080. The brief facts are that on 29‑8‑1983 the Plaintiffs entered into a contract with the Defendant No.2 for supply of 3,000 bales at the rate of Rs.1,334 per 100 bags. The total consideration for the goods supplied was Rs.1,20,06,000. The bales were to be supplied by 31‑12‑1983. As the plaintiffs were not able to supply the goods within the specified period, they applied for extension of time. The first extension was granted by the defendant's letter dated 4‑4‑1984 and the delivery period was extended upto 20‑4‑1984 reserving the right to recover liquidated damages from the date of original delivery period. the Plaintiffs again failed to deliver the goods in time and the defendants by their letter 5‑3‑1984 extended the period of delivery upto 31‑3‑1984 with the same reservation to recover the liquidated damages. For the third time, as the entire quantity could not be supplied by the plaintiffs they applied for extension of time. By defendant's letter, dated 4‑4‑1984 it was extended on the same condition as mentioned in the earlier letters. It seems that the defendants while releasing the payment to the plaintiffs withheld Rs.1,600,80 claiming to be the liquidated damages due to delay in the delivery of the goods. The plaintiffs made representation and the defendants replied as follows:‑
2. In view of the circumstances explained in your letter No. Nil dated 4‑6‑1984 and 16‑8‑1984 the delivery period of the subject A/T is hereby regularised upto 18‑4‑1984 with the imposition of Liquidated Damges to the extent of Rs.1,60,080.
3. The plaintiffs asked the defendants to release the said amount as no damage was suffered by them of the consignees to whom the delivery was effected. In this regard the plaintiffs have produced a letter from the Food Department, Government of Punjab to whom the delivery was effected, in which it has been stated that although the goods were received late they were accepted by them and no loss has been sustained by the Food Department due to late delivery. In spite of this letter the defendant did not pay the said amount withheld by them as liquidated damages. In these circumstances the plaintiffs have filed the suit for recovery of the said amount. The defendants were served with the summons but neither they appeared nor filed any written statement. They were declared ex parte and today they are absent.
4. From the facts stated above it is clear that the Plaintiffs had supplied the goods during the extended period. Under the agreement the defendants are entitled to recover from the Plaintiffs liquidated damages and not by way of penalty, a sum of 2% of the price of the goods which the plaintiffs failed to deliver. From the terms of the contract it is apparent that the defendants could have claimed liquidated damages to the extent of loss suffered due to default or delay in the delivery of the goods. Unless the defendants establish that they have suffered any loss liquidated damages cannot be claimed. From the record it is clear that the Food Department, Government of Punjab to which delivery was made have not suffered any damage. The defendants have not explained in any letter in what manner they have suffered damage due to late delivery to the Government of Punjab. In these circumstances the defendants' relation and refusal to pay Rs.1,60,080 to the plaintiffs is not justified and is unwarranted. The Plaintiffs had served a notice under Section 80 C P C but the defendant failed to reply it. The suit is decreed against the defendants jointly and severally for Rs.1,60,080 with costs. The defendants are directed to satisfy the decree within a period of two months failing which the plaintiffs would be entitled to interest ad the rate of 10% PA. from the date of suit till recovery.
5. M.Y.H./H‑88/K Suit decreed