TRADING CORPORATION OF PAKISTAN Versus MUHAMMAD ALAM
MUHAMMAD FAISAL KAMAL ALAM, J.--- The Ricc Export Corporation of Pakistan Limited, the predecessor-in-interest of the present Plaintiff-the Trading Corporation of Pakistan ("TCP"), a public sector company, has filed the present suit for Recovery of Rs.57,97,710.31 (Rupees Fifty Seven Lac Ninety Seven Thousand Seven Hundred Ten and Thirty One Paisa Only) against the Defendants, with the following prayer:
"(i) Decree for a sum of Rs. 57,97,710.31 against the Defendant No.1 or against Defendants Nos.1 and 2 jointly and severally with interest and for mark up at 14% per annum from the date of suit till recovery.
(ii) In the alternatively the Plaintiffs prays for a judgment and decree against the Defendants to render true and faithful account of the stock of rice and bardana entrusted to Defendants as mentioned in the plaint and to pass final decree for the amount ascertained on rendition of account.
(iii) Cost of the suit.
(iv) Any other relief which this Honourable Court may deem fit and proper in the circumstances of the case."
2. The Defendant No.1 was appointed as a handling agent of Plaintiff, inter alia, in respect of Rice Crop 1980-81 under the terms of Contract No.RECP-5/M&M/80-81/3 dated 06.10.1980 (the subject contract). Scope of Defendants' service included receiving, storing, forwarding and shipping Rice consignments, that is, to receive rice from different parts of Country at the designated Godown and after making appropriate arrangement for its storing, the same were to be transported and delivered at the ships for further exports.
3. The grievance of Plaintiff is that despite meetings, notices and reminders, the Defendants failed to render the R.S.A-Reserve Stock Accounts ("RSA"), in respect of rice stock and Bardanas/gunny bags, which were transferred from Defendant No.2 (M/s. Jamal Agencies) to Defendant No.1 on identical terms. Claim of the Plaintiff in monetary terms has been mentioned in paragraph-20 of plaint and paragraph-16 of the Affidavit-in-Evidence of Plaintiff's witness ("P.W.-1").
4. Both Defendants through their pleadings (written statements) contested the claim, although transfer of stock from Defendant No.2 to Defendant No.1 was acknowledged. Primarily, the Defendant No.1 in its pleadings has taken the stance that the handling contract was illegally cancelled and employees of Defendant No.1 were forcefully evicted from the godowns. It was also claimed by the Defendants that over all watch and ward of the Godown was/is with Plaintiff. The claim of Plaintiff about unaccounted for quantity of Basmati Rice of 1325.9341 Metric Tons having value of Rs.5526254.66 (at that relevant time) and of different types of bags including gunny bags of different quantities, has been denied by the Defendants.
5. From the divergent pleadings of the parties, the following issues were adopted by the Court vide order dated 18.11.1990:-
"1. Who has violated the terms and conditions of the contract?
2. Whether the works and services of defendants Nos.1 and 2 were un-satisfactory as alleged?
3. Whether the defendants Nos.1 and 2 failed and neglected to submit accounts and reports as alleged?
4. Whether the defendants Nos.1 and 2 mis-appropriated the stocks of rice and bardanas as alleged?
5. Whether the transfer of stocks of rice was effected from defendant No.2 to defendant No.1 on account of un-satisfactory performance of defendant No.2 as alleged by the plaintiffs?
6. Whether the defendant No.2 failed to render the accounts in respect of the stocks transferred from defendant No.1?
7. What should the Decree be?"
6. Respective parties have examined one witness each. Mr. Liaquat Ali Khan, the then Deputy Manager of the Plaintiff, testified on behalf of the Plaintiff as P.W.-1, whereas, Muhammad Alam (the Defendant No.1) examined himself as D.W.-1.
7. Findings on the above issues are as follows:-
ISSUE NO.1: As under.
ISSUE NO.2: In Negative.
ISSUE NO.3: In Negative.
ISSUE NO.4: In Negative.
ISSUE NO.5: Accordingly.
ISSUE NO.6: Accordingly.
ISSUE NO.7: Suit dismissed.
ISSUE NO.1.
8. It is the main issue, which goes to the root of the case. Admittedly, the subject matter of the present suit is the contract No.RECP-5/M&M/80-81/3 dated 6th October, 1980, viz. the subject contract. This has been pleaded in Paragraph-3 of the Plaint. However, the subject contract has not been filed, and instead as an Annexure "A" to the Plaint, another Agreement No.RECP/5/M&M/81-82/3 dated 27th October, 1981, has been filed, which has been exhibited as Exh: P/1-1 along with the Affidavit-in Evidence of PW-1. It is very relevant to mention here that with regard to this Agreement dated 27.10.1981, already a decree has been passed in Suit No.749 of 1989 by this Court. On query on this aspect of the case, learned counsel for the Plaintiff Mr. Ashfaq Hussain Rizvi, has referred the correspondence between the Plaintiff and Defendant No.2 (M/s. Jamal Agency) dated 17.01.1982 (Exh: P/1-3) and subsequent document of 18.01.1982 between present Plaintiff and Defendant No.1 (Muhammad Alam) of Shehzad Enterprises (Exh P/1-4) and replied that it is an undisputed fact that Defendant No.2 transferred the stock of rice and gunny bags/bardanas to Defendant No.1 on the same terms as contained in the above mentioned subsequent agreement of 27.10.1981. It was further argued by learned counsel for the Plaintiff that the above correspondence proves that entire stock, which was earlier being handled by Defendant No.2 under the afore-referred subject contact, was transferred to Defendant No.1 as per the Book Balance, therefore, the Defendants and particularly Defendant No.1 (Muhammad Alam) of Shehzad Enterprises was liable to submit periodical RSA-Reserve Stock Accounts. It was further contended that the said Defendant No.1 as an handling agent is thus liable to make good the losses, which the Plaintiff has suffered on account of un-accounted for quantity of (Basmati grade) rice and gunny bags and bardanas, which Plaintiff has evaluated and pleaded to the tune of Rs.5.7 Million (approximately).
9. On the other hand, Mr. Sajid Latif, leaned counsel for Defendant No.1 has controverted the arguments of Plaintiff's side by submitting, that the claim of the Plaintiff is vague and not specific. He has further contended that the contract (Agreement of 27.10.1981), which has been exhibited in the evidence, was the subject matter of Suit No.749 of 1989 regarding which already this Court has given its decision. He has further read the cross-examination of PW-1, which is available in the Evidence File (Page-82), in order to show that no physical verification of the stock was done before the same was transferred to Defendant No.1; therefore, the claim of the Plaintiff has no basis. He has specifically read the answer of PW-1 to the question put by the learned counsel for the Defendants that at the time of transfer of the stock, no physical verification was made. It would be advantageous to reproduce the relevant extract of the deposition of PW-1 hereinunder--
"Answer:--Yes, the Stock left by the Defendant No.2 with the Plaintiff was transferred to the Defendant No.1 Mohammad Aslam as per Book Balance. The Plaintiff RECP/T.C.P. ordered for the transfer of the Stock of rice left by the Defendant No.2 M/s. Jamal Agencies to the Defendant No.1 as per Book Balance. It is correct to suggest that no physical balance was made, Voluntarily says that the Defendant No.1 agreed that Defendant No.1 will be responsible for the stock rice."
I do not remember us to how much rice stock containing Basmati Rice and other varieties of rice were handed over/transferred from the Defendant No.2 to the Defendant No.1 Mohammad Aslam who is the Sole Proprietor of M/s. Shehzad Enterprise as per Book Balance." [Underlining to supply emphasis].
10. If the evidence adduced by the parties is taken into account, it will lead to the conclusion that neither the documents referred to and relied upon by the Plaintiff nor the evidence of Plaintiff's side discloses or mentions the actual quantity of the subject goods, which is claimed to be transferred to Defendant No.1 as per "Book Balance". The second undisputed but a very material factual aspect of the case is that the present transaction pertains to the contract of 6th October, 1980, (subject contract), which was neither annexed with the plaint nor has been produced (exhibited) in the evidence, in order to ascertain the stipulated terms and conditions between the parties hereto. Consequently, when the contract on the basis of which the present claim is not filed nor the physical verification of the stock was done as admitted by PW-1, then it cannot be held that the Defendants have violated the terms and conditions of the contract, therefore, Issue No.1 is answered accordingly.
ISSUES NOS.2, 3 AND 4.
11. From the evidence of DW-1 (the sole witness of Defendant No.1), it is apparent that Plaintiff has failed to elicit any reply from the said DW-1, which can prove the case of Plaintiff (TCP), particularly with regard to the actual quantity of rice, bardana and gunny bags which were transferred to Defendant No.1 by Defendant No.2, therefore, when the stock quantity of rice and bardana is not ascertainable from the pleadings and evidence of the parties then Defendants cannot be saddled with the liability of a negligent act and, therefore, the Issues Nos.2, 3 and 4 are answered in Negative and in favour of Defendants.
ISSUES NOS.5, 6 AND 7.
12. Issue No.5 is about transfer of stock from Defendant No.1 to Defendant No.2; which though is a proven fact, but looses its significance in the light of above discussion, in particular, it if is placed in juxta position to another proven fact; that no physical verification of stock was done while the same was transferred from second Defendant to the first. Admittedly, Plaintiff has not mentioned the basis, or, in other words, the actual 'book balance' figure from which the claim of shortage of 1325.9341 metric ton of rice and bags of different grades can be ascertained. This apparent vagueness in claim is fatal to Plaintiff's case.
13. In view of the above evidence of DW-1 (Defendant No.1) that the claimed quantity of unaccounted for stock even otherwise falls within the tolerance limit of less than 3%, cannot be brushed aside. Decision relied upon by Mr. Sajid Latif, Advocate and reported as PLD 2004 Karachi Page 705, is of relevance. Thus Issues Nos.5 and 6 are answered accordingly. Consequently the reply of Issue No. 7 is that non-production of the above mentioned subject contract dated 6th October, 1980 and the claim based on an unspecified quantity of stock, results in denying the relief to the present Plaintiff (TCP) and hence, instant suit is dismissed. However, parties are left to bear their own costs.
KMZ/T-4/Sindh Suit dismissed.