MACDONALD LAYTON & COMPANY PAKISTAN LTD. Versus UZIN EXPORT IMPORT FOREIGN TRADE CO. , M. Jamil Khan, Advocate Supreme Court and Muzaffar Ali Khan

1. SALEEM AKHTAR, J . ---This direct appeal challenges the judgment of the learned Judges of the Division Bench, of the High Court whereby appeal against the order passed by the learned Single Judge granting appellant's application under Order XII, rule 6, C.P.C. was set aside and the said application was dismissed.

2. The impugned judgment had disposed of appeal arising from the order of the learned Single Judge granting decree under Order XII, rule 6, C.P.C. and another application filed by the respondent No. l under section 34 of the Arbitration Act, which was dismissed. The present appeal refers only to judgment in respect of application under Order XII, rule 6., C.P.C. The respondent No. l had engaged the appellant for construction of Attock Cement Factory at Hub. Respondent No. l is a foreign company to whom the contract had been awarded by respondent No. 2. Respondent No. l engaged the appellant as a subcontractor and an exhaustive contract containing all the terms and conditions was executed between the parties. None of the parties have filed this contract and the same has not been brought on record. Dispute arose between the appellant and the respondents and the former filed Suit No.919/1985 for recovery of money and injunction. From the photo copy of the plaint produced during hearing by the learned counsel for respondent No.2 it seems that Mr. M.A. Khokhar had signed the plaint and such averment that he was Managing Director and had been authorised to do so by the plaintiffs' charter and Board resolution was also mentioned in para. 16 of the plaint. Respondent 'No. l filed application under section 34 of the Arbitration Act. An application for amendment of the plaint was also filed, which was allowed on 11-5-1987 and the amount claimed by the appellant was enhanced. The appellant filed an application dated 17-3-1987 under Order XII rule 6, C.P.C., alleging that during the pendency of the suit, respondent No. l admitted the appellant's running dues as contained in its letters which were annexed with the application and read as follows:--

2. 4517/28-7-1987

3. M/S MACDONALD LAYTON CO. LTD.

4. Re. Final Bill

5. Dear Sir,

6. We submit you attached hereinafter the 22nd and Final Bill for civil works done at Attock Cement Plant, Lasbela, checked and approved for the net payable amount of Rs.4,771, -962.

7. Thanking you, we remain

8. Yours faithfully

UZIN EXPORT IMPORT

REPRESENTATIVE

9. (Sd.)

10. Rusu Gh. M.Sc."

11. 4241 /7-2-1987

12. M/S. MACDONALD LAYTON & CO. LTD.

13. Site

14. Re: Interim Certificate No. 21 for Dec. 1986

15. Dear Sir,

16. We submit you hereinafter the 21st Interim Certificate for the month December 1986, for civil works, checked and approved for the amount of 4,399, 688 Rs. which is to be paid to you.

17. Thanking you, we remain,

18. Yours faithfully

UZIN EXPORT IMPORT

19. (Sd.)

20. Rusu Gh. M.Sc.

21. Month's turnover 2,83,626/-"

22. Both the respondents resisted the claim and filed counter-affidavits. It was pleaded that these letters do not amount to admission within the meaning of Order XII, rule 6; C.P.C., and they were merely in discharge of duties under the contract. It was also pleaded that the amounts mentioned in these letters do not form part of the claim in the suit and that in fact the claim had been rejected by respondent No. 1. Respondent No.2 denied its liability stating that it is not an. admission on their behalf. Respondent No. l also filed written statement in which it was pleaded that the claim is premature, and suit is not maintainable particularly on the ground that the plaint has not been signed by any authorised person as provided by law. The learned Judge in Chamber granted the application, but in appeal filed against it, by the impugned judgment it was set aside.

3. Mr. Fazal Ghani Khan, learned counsel for the appellant contended that the plaint was signed and verified by an authorised person and further that the admission being unqualified attracts order XII, rule 6, C.P.C. Order XII, rule 6, C.P.C. provides a summary and speedy remedy in cases where admission is made by the defendant in the pleadings -or outside it, but in order to attract this provision it is necessary that the admission should be unequivocal, clear, unconditional and unambiguous. Such admission should not only be in respect of the amount but the liability to pay the same as well" to the plaintiff. The Court in deciding such application exercises its discretion which is regulated by the well-recognised principles. In this regard, reference can be made to Tahilram Tarachand v. Vassumal Deumal and another (AIR 1926 Sindh 119) wherein it has been held that to pass judgment on admission of the defendant is within the discretion of the Court which should be exercised in judicial manner and is not a matter of right. However, if it involves questions which cannot be conveniently disposed of in an application, the Court may exercise discretion in rejecting the application. Reference can be made to Premsuk Das Assaram v. Udairam Gungabux (AIR 1918 Calcutta 467). Same view has been taken in Izzat Khan and another v. Ramzan Khan and others (1993 MLD 1287), a Full Bench decision of the Sindh High Court.

4. Another principle which regulates the exercise of discretion is that even if an admission has been made, but, it is subject to qualifications regarding maintainability of the suit or' any such legal objection which goes to the very root of it, then it would not be proper exercise of discretion to grant decree on such admission. In this regard reference can be made to Kassamali Alibhoy v. Sh. Abdul Sattar (PLD 1966 (P.W.) Karachi 75) in which Justice A.S. Faruqui, laid down the rule in tie following words:--

23. "Shortly put the question is this. When a defendant makes an admission on a point of fact but asserts that the claim is not recoverable in the suit because of the legal objections raised therein, can the Court then take the factual admission as an unqualified one and pass a decree on that admission? Having given my careful consideration to the question I have reached the conclusion that the answer to it must be in the negative. An admission in order to be made the basis of a decree under Order XII, rule 6, of the C.P.C. must be unqualified and unconditional. Therefore, when factual admission is accompanied with a qualification that the suit itself is not maintainable or that the claim suffers from a legal difficulty, it cannot be said that the admission is unqualified. When such a legal defence is raised the consideration of it must wait until the suit itself comes to be tried. The Court cannot in such a case proceed under Order XII, rule 6 of the C.P.C."

24. Mr. Muhammad Sharif, learned ASC has contended that the letters on the basis of which decree on admission is being sought do not in clear and unequivocal terms constitute admission. Taking the defence into consideration it seems that the letters have to be read with reference to the terms of the contract under which a procedure must have been provided to regulate issuance as well as payment under the certificate. It also does not clearly show that the amount is payable by respondent No.l or respondent No.2. This aspect can only be determined by looking into the terms of the contract which, none of the parties have filed.

5. The other ground on which the appeal must fail is that objections to the maintainability of the suit have been raised. Although Mr. Fazal Ghani Khan has taken pains to place before us the authorities to show that the plaint has duly been signed by an authorised person and also has referred to the resolutions of the company, according to Mr. Sharif even the resolution is to be looked into whether it is properly, legally and according to the articles of association duly passed by the Board of Directors. Considering all these facts it seems that the discretion for grant of application under Order XII, rule 6, C.P.C. should not have been exercised by the learned Single Judge. The appeal is dismissed with no order as to costs.

25. A.A./M-3211/S Appeal dismissed