Summary: Background: The case involves a dispute between a manufacturer and a retailer regarding the terms of a supply contract. The manufacturer alleged that the retailer breached the contract by failing to purchase the minimum quantity of goods as agreed upon. The retailer countered that the manufacturer had failed to deliver goods of acceptable quality, thereby justifying their refusal to meet the minimum purchase requirement. ----Issues: 1- Whether the retailer breached the supply contract by failing to purchase the minimum quantity of goods. 2- Whether the manufacturer delivered goods of acceptable quality as per the contract terms. 3- Whether the retailer's refusal to purchase the minimum quantity was justified based on the alleged quality issues. ----Holding/Reasoning/Outcome: The court held that the retailer did breach the supply contract by not purchasing the minimum quantity of goods as specified. The court reasoned that the evidence presented by the manufacturer sufficiently demonstrated that the goods delivered met the acceptable quality standards as per the contract terms. Additionally, the retailer failed to provide adequate evidence to support their claim of quality issues. Therefore, the court concluded that the retailer's refusal to purchase the minimum quantity was not justified. The outcome was that the court awarded damages to the manufacturer for the breach of contract by the retailer.

Summary: Background: The State of Libya, through its Head of Mission in Pakistan, entered into a five-year lease agreement with the respondent for a property in Islamabad used as the Libyan Diplomatic Mission. The agreement permitted early termination by mutual consent. Libya sought early termination in 2018, leading to disputes over repair responsibilities for paint and polish work. The respondent sued for repair costs, which Libya contested, citing immunity under diplomatic privileges. -----Issues: 1- Whether the State of Libya waived its diplomatic immunity under the Diplomatic and Consular Privileges Act for claims unrelated to rent or possession. -----2- Whether the lease agreement was a commercial transaction under the State Immunity Ordinance, thus removing immunity from Libya. -----Holding/Reasoning/Outcome: --Diplomatic Immunity: The court found Libya maintained immunity, as the lease agreement did not constitute a waiver of immunity for claims beyond rent or possession disputes. The claim for repair costs fell outside this scope. --Commercial Transaction Argument: The court held that the lease agreement, serving diplomatic purposes, was not a commercial transaction. Section 5 of the State Immunity Ordinance excludes immunity for commercial transactions, but Section 17 exempts property used for diplomatic missions, reaffirming Libya’s immunity. --Federal Government’s Position: The Ministry of Foreign Affairs confirmed Libya’s immunity, emphasizing its role in maintaining diplomatic relations and the reciprocal nature of immunity. The court allowed the petition, set aside the Civil Court’s order, and dismissed the respondent’s suit, imposing a cost of Rs. 100,000 on the respondent. -----Citations/Precedents: A.M. Qureshi v. USSR (PLD 1981 SC 377) - Interpretation of immunity scope under diplomatic and consular privileges. Diplomatic and Consular Privileges Act, 1972 - Affirmed immunity for diplomatic missions in Pakistan. State Immunity Ordinance, 1981 - Sections 5 and 17 on exclusions from immunity for commercial transactions and diplomatic mission properties.

Summary: Contract Act (IX of 1872)--- ----Ss.202 & 206---Specific Relief Act (I of 1877), Ss. 8, 39, 42 & 54---Suit for declaration, possession and cancellation of mutation with mandatory injunction---Power of attorney, revocation of---Burden of proof---Predecessors of petitioners not challenging the mutation in his life time---Delay in challenging the mutation by the petitioners despite having knowledge---Locus standi of petitioners---Application of principles of waiver, estoppel and acquiescence---Contention of the petitioners was that since the power of attorney executed by their predecessor in favour of respondent had been revoked, therefore, disputed mutation could not have been executed by the respondent in favour of her husband---Validity---Petitioners were under legal burden to prove valid execution of revocation deed by producing confidence inspiring oral evidence, however, such course of action was not adopted, which was fatal to their stance---Under S.202 read with S.206 of the Contract Act, 1872, the principal is duty bound to give notice to the agent before cancellation of the power of attorney---Power of attorney could only be rescinded after serving a notice upon the attorney any revocation without notice to the attorney would be illegal--Disputed mutation was attested in the year 2001 and PW.2 during his cross-examination conceded that predecessor of petitioners was well aware of the disputed mutation and petitioners got knowledge of the same immediately after its execution, however, neither predecessor of petitioners nor petitioners themselves agitated the same and the suit was filed in the year 2009 i.e. after 08 years without any explanation for their inaction to do the needful, which created certain rights in favour of respondent, thus, petitioners had no locus standi to challenge the disputed mutation independently, for the reason that their predecessor himself had not challenged the same during his lifetime---Inaction on part of petitioners also invited applicability of the principles of waiver, estoppel and acquiescence---Implied consent in accepting the mutation in question constituted abandonment of rights on account of failure to enforce it---Agent can claim ownership rights in land of the principal for himself or for his own kith and kin on the basis of agency document with the approval of principal, failing which principal is at liberty to repudiate the transaction---Such course was not adopted by the principal/predecessor of petitioners despite having knowledge of the disputed mutation, thus, the plea of the petitioner was repelled by High Court---Revision petition was dismissed, in circumstances. Fida Muhammad v. Pir Muhammad Khan (Deceased) through legal heirs and others PLD 1985 SC 341; Mst. Shumal Begum v. Mst. Gulzar Begum and 3 others 1994 SCMR 818; Haji Faqir Muhammad and others v. Pir Muhammad and another 1997 SCMR 1811; Muhammad Yasin and another v. Dost Muhammad through Legal Heirs and another PLD 2002 SC 71; Mst. Ghulam Fatima v. Muhammad Din and others 2004 SCMR 618; Ghulam Muhammad v. Zohran Bibi and others 2021 SCMR 19; Atta Muhammad and others v. Mst. Munir Sultan (Deceased) through her LRs and others 2021 SCMR 73 and Mst. Akhtar Sultana v. Major Retd. Muzaffar Khan Malik through his legal heirs and others PLD 2021 SC 715 ref. Raza Munir and another v. Mst. Sardar Bibi and 3 others 2005 SCMR 1315; Jamila Khatoon and others v. Aish Muhammad and others 2011 SCMR 222; Fayyaz-ul-Haq and others v. Ghulam Nabi (Deceased) through his legal heirs and others 2022 MLD 688; Abdul Haq and another v. Mst. Surrya Begum and others 2002 SCMR 1330; Nazar Gul v. Islam and 3 others 1998 SCMR 1223; Muhammad Rustam and another v. Mst. Makhan Jan and others 2013 SCMR 299; Agha Syed Mushtaque Ali Shah v. Mst. Bibi Gul Jan and others 2016 SCMR 910; Anjum Mahmood and 5 others v. Rizwan Ahmad and 7 others 2006 CLC 876; Shero v. Muhammad Ramzan and 2 others 2006 YLR 2632 and Muhammad Arshad and 2 others v. Haq Nawaz and 9 others 2019 YLR 958 rel. Syed Kazim Raza Naqvi for Petitioners. Dr. Muhammad Aslam Khakhi and Yasmin Haider for Respondents. Imran Shaukat Rao, Assistant Advocate General. Date of hearing: 4th September, 2024.

Summary: (a) Civil Procedure Code, 1908 (V of 1908) —Ss. 115, 2(2)—Succession—Administration petition—Conversion into civil suit—Validity—Stranger challenging title of deceased—Maintainability—Principles— High Court set aside trial court’s order converting an administration petition into a civil suit at the instance of a stranger to the estate (i.e., nephew of the deceased)—Held, objections raised by a person who is neither a legal heir nor a legatee cannot transform an administration petition into adversarial proceedings—Disputes raised by such stranger fall outside the scope of administration and must be adjudicated in separate civil proceedings—Conversion of petition was contrary to binding precedent in PLD 2011 Karachi 83 (Ghazala Zakir case). (b) Succession—Administration of estate—Scope of court’s jurisdiction—Test for inclusion of property disputes— Court reiterated settled test: if the determination of a property dispute affects inter se rights of legal heirs, it may be decided in administration proceedings; if it only affects third-party claims or strangers, such dispute must be resolved separately—Objector’s allegation of deceased being benamidar of his own father, without any prior legal action during deceased’s lifetime, held insufficient to defeat or delay administration process. (c) Benami Transactions—Claim of benami ownership posthumously—Delay and laches—Effect— Where the alleged real owner (Mumtaz Ali Khan) never asserted title or took legal action during his lifetime, and no legal proceedings were initiated by his heirs for decades, subsequent claims of benami interest by nephew held belated and to be adjudicated separately—Challenge rejected in administration petition. (d) Stamp Duty & Legal Dues—Release of title documents—Preconditions— Court observed that original title documents could not be released to legal heirs until payment of all dues including stamp duty, transfer fees, and related charges—Claim of ownership based on an agreement coupled with interest under Section 202 of the Contract Act, 1872 would not override legal obligations for payment of government dues. Disposition: Appeal Allowed—Impugned order converting administration petition into civil suit set aside—Objector declared a stranger to the estate—Right to initiate independent proceedings reserved—Nazir directed to inquire into status of title chain and execution proceedings for issuance of Letters of Administration. ----- Cited Law / Precedents: Muhammad Zahid v. Mst. Ghazala Zakir, PLD 2011 Karachi 83 Contract Act, 1872, S. 202 Civil Procedure Code, 1908, O.VII, R.11; Ss. 115, 2(2) Succession Act, 1925 (implied for administration proceedings)

Summary: Background: This case involves a dispute over specific performance of a contract in a partnership business. A partnership was established for a business in Hyderabad, which the petitioner and respondent agreed to operate jointly. Subsequently, the petitioner agreed to sell her 50% share in the partnership to the respondent under a sale agreement. The respondent claimed partial payment was made, but the petitioner failed to complete the transaction. The respondent filed a suit for specific performance, which was initially dismissed under Order VII Rule 11 of the CPC by the Trial Court and affirmed by the Appellate Court. However, the High Court allowed the appeal, remanding the case to the Trial Court for a decision on merits. -----Issues: 1- Whether the Civil Court had jurisdiction to entertain a suit concerning the sale of partnership shares under the Companies Act, 2017. -----2- Whether a suit for specific performance and injunction could proceed without a request for dissolution or rendition of accounts in the partnership context. -----3- Whether the plaint could be rejected in part under Order VII Rule 11, CPC. -----Holding/Reasoning/Outcome: The Supreme Court upheld the High Court’s decision, refusing the petitioner’s request for leave to appeal. The Court concluded that: The suit was not barred under the Companies Act, 2017, as the partnership did not constitute a corporate entity under the Act. Order VII Rule 11, CPC, does not allow for piecemeal rejection of the plaint; if any part of the plaint is maintainable, it must proceed to trial. The Trial Court must determine the matter on merits, particularly the enforceability of the sale agreement regarding the 50% partnership share. -----Citations/Precedents: Order VII Rule 11, Code of Civil Procedure, 1908 – On rejection of plaints. Specific Relief Act, 1877 – Relevant provisions on specific performance and contractual obligations. Partnership Act, 1932 – Partnership definitions, rights, and dissolution conditions.

Summary: Arbitration Act (X of 1940)--- ----Ss.14, 18 & 33---Arbitration--- Arbitral award made rule of the Court--- Condemned unheard---Necessary party, impleading of---Petitioners / companies were awarded contract by respondent / Pakistan Tobacco Board (PTB) for collection of Federal Tobacco Cess (FTC) on surplus tobacco stock etc.---Dispute between the parties arose with regard to charging for transportation of tobacco over and above the allotted quota---On direction of Court arbitration proceedings were initiated and award given by arbitrator was made rule of the Court---Validity---Trial Court directed impleading petitioners as necessary party to arbitration application---When petitioners were necessary parties to such application, they were also necessary party to arbitration proceedings and without impleading them no effective award, to the extent of liability of petitioners, could be announced---Such award could not be made rule of Court for the purpose of execution against the interest of petitioners---Necessary questions pertaining to quota of tobacco and its transportation were not answered---High Court set aside the award to the extent of findings of such issues and judgements and decrees were set aside to such extent as petitioners were necessary party to arbitration proceeding--- High Court remanded the matter to Trial Court for settlement of additional issues where petitionerswere to be made party to the application submitted by respondent / Pakistan Tobacco Board whereafter petitioners / companies would file their reply--- Revision was disposed of accordingly. Shahin Shah v. Government of Khyber Pakhtunkhwa through Secretary Irrigation Department, Peshawar and others 2022 SCMR 1810; Messrs Shahzad Ali Usmani Chohan v. Managing Director, Sindh Small Industries Corporation 1989 CLC 540; National Highway Authority through Chairman, Islamabad v. Messrs Sambu Construction Co. Ltd. Islamabad and others 2023 SCMR 1103; Injum Aqeel v. Latif Muhammad Chaudhry and others 2023 SCMR 1361; Muhammad Farooq Shah v. Shakirullah 2006 SCMR 1657 and Allah Din and Company v. Trading Corporation of Pakistan and others 2006 SCMR 614 ref. Muhammad Rashid and others v. Abdul Rashid through Mst. Sharifan Begum and others 2004 SCMR 76; Juggilal v. General Fibre Dealers Ltd. AIR 1955 Cal. 354; Wazir Khan and 8 others v. Sardar Ali and 25 others 2001 SCMR 750; Design Group of Pakistan v. Clifton Cantonment Board 1990 MLD 2010; Muhammad Unis Elahi Sethi and another v. Federation of Pakistan, Chambers of Commerce And Industries 1996 CLC 1226; Turner Morrison Garahams Group of Companies, London v. Rice Export Corporation Pakistan Ltd. PLD 1998 Karachi 79; Punjab Province through Secretarg to Government of the Punjab; Irrigation and Power Department, Lahore and another v. Messrs Chauhan and Company through Managing Partner PLD 2000 Lahore 314; University of Engineering and Technology through Vice-Chancellor, Lahore v. Messrs Moderate Builders through A. Qutabuddin 2001 MLD 233; Faisalabad Development Authority v. R.C.C. Limited through Managing Director 2003 YLR 2377; Umar Din through L.Rs. v. Mst. Shakeela Bibi and others 2009 SCMR 29 and Messrs Trading Corporation of Pakistan Ltd. v. Messrs General Industrial Machines 2016 MLD 897 rel. Alam Zeb Khan for Petitioner. Farman Ullah Khattak, Mir Wali and Asad Jan for Respondents. Date of hearing: 24th July, 2024.

Summary: Background: The appellants, M.L. Traders, challenged the consolidated judgment and decree dated 28.07.2015 by the Banking Court, which decreed the recovery suit filed by the respondent, Habib Bank Ltd., for Rs.7,268,401 against a claimed amount of Rs.10,306,894. The appellants’ suit for damages of Rs.32,817,314 was dismissed. The dispute arose from a letter of credit (L/C) No.800371/0813 dated 13.09.1997, under which the appellants alleged the financial institution acted contrary to the terms by allowing transshipment. -----Issues: 1- Whether the financial institution was under a legal obligation to make payment to the beneficiary under the Credit arrangement despite a violation of the prohibition of transshipment. 2- Whether the payment made by the financial institution was contrary to the terms of the Credit. 3- Whether the appellants were liable to repay the amounts disbursed by the financial institution. 4- Whether the conversion of PAD (Payment against Documents) to FIM (Finance against Imported Merchandise) was valid. 5- The effect of non-presentation of drafts with the documents. 6- The role and responsibility of the Insurance company regarding the damaged goods. -----Holding/Reasoning/Outcome: ---Obligation of the Financial Institution: The court emphasized that the enforceability of the financial institution's obligation under the Credit arrangement, despite the prohibition of transshipment, needed to be evaluated under Article 23 of UCP 500. The Banking Court failed to undertake such an inquiry. ---Payment Contrary to Credit Terms: The court noted that there was a failure to examine the terms of the bill of lading in the context of the prohibition of transshipment in the Credit. The Banking Court did not consider whether the bill of lading provided continuous cover from the port of shipment to the port of discharge or whether it contained any specific disclaimer regarding transshipment. ---Liability of the Appellants: The court observed that the Banking Court did not properly address the appellants' liability to repay the amounts disbursed by the financial institution, especially considering the alleged breach of the Credit terms. ---Conversion of PAD to FIM: The court identified the need to determine the legality of converting PAD to FIM and whether the doctrine of novation applied, which was not addressed by the Banking Court. ---Non-Presentation of Drafts: The court highlighted that the non-presentation of drafts with the documents needed to be examined to determine compliance with the Credit terms. ----Insurance Company's Role: The court noted the importance of evaluating the role and responsibility of the Insurance company regarding the alleged damage to the goods. The court set aside the impugned judgment and decree dated 28.07.2015 and remanded the matter to the Banking Court. The Banking Court was directed to frame additional issues regarding the observations made and call upon the parties to lead evidence on these issues. The suits were to be decided afresh on merits without being influenced by any observations made in the appeal decision. The appeal of the financial institution (RFA No.1443/2015) was rendered infructuous. -----Citations/Precedents: Master Muhammad Bashir vs. Moinuddin (1990 CLC 703) Muhammad Arshad Khan vs. Chairman, M.D.A and 6 others (1997 MLD 3066) Bashir Ahmad vs. Abdul Wahid (PLD 1995 Lahore 98) Habib Bank Limited vs. Judge Banking Court and others (2015 CLD 1875) Crescent Leasing Corporation Limited vs. Messrs Sarhad Goods Transport Company (2013 CLD 854) Rehmatullah Khan and another vs. Ghulam Farid and others (2009 SCMR 371) Administration Municipal Corporation, Multan vs. Haider Zaman Qureshi (2012 MLD 948) Shah Nawaz and another vs. Nawab Khan (PLD 1976 SC 767) MCB Bank Limited vs. Sunshine Cloth Limited (C.O.S No. 152/2010) United Bank Limited vs. Messrs Ilyas Enterprises (2004 CLD 1338) Messrs Sazco (Pvt) Ltd vs. Askari Commercial Bank Limited (2021 SCMR 558) S.A. Hameed and others vs. Allied Bank of Pakistan Limited (2004 CLD 1620) Habib Bank Limited vs. Tauqeer Ahmed Siddiqui and another (2009 CLD 312) ----Quote: Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce, Publication No.500

Summary: (a) Specific Performance of Contract: ----Contractual obligations and enforcement---Contract for sale of property entered into between the vendor and vendee, specifying payment schedule and obligations of both parties---Vendor argued failure of vendee to comply with payment terms justified rescinding the contract, while vendee contended ambiguity in payment schedule and claimed a typographical error in the contract timeline---Held, that evidence did not conclusively support the vendor’s claim regarding payment default or extinguishment of vendee’s rights due to ambiguity in payment timelines---Typographical error in contract date acknowledged by the court as an oversight, aligning subsequent payment deadlines accordingly---Specific performance granted as the vendor’s arguments failed to substantiate non-compliance by vendee. (b) Contract Law---Interpretation of Payment Schedules: ----Contract clauses---Time-bound obligations---Ambiguity in contract timelines concerning payment of Rs.3,415,000/----Vendor’s claim that the payment deadline preceded the signing of the contract deemed implausible---Court determined the correct timeline by contextual examination of the contract terms and conduct of parties---Evidence insufficient to establish vendee's non-compliance or bad faith. (c) Civil Procedure---Standard of Proof in Contract Enforcement: ----Burden of proof---Vendor’s claim of forfeiture and rescission due to non-payment required substantiation with evidence of vendee’s default---Court emphasized the vendor's failure to present clear evidence, thereby allowing enforcement of the contract in favor of the vendee---Burden lies on the party alleging breach to establish non-fulfillment of contractual obligations. ----Disposition: Petition dismissed; specific performance of the contract decreed in favor of the vendee. Court directed the vendor to fulfill obligations under the agreement, including transfer of property and execution of necessary documentation.

Summary: (a) Contract Act (IX of 1872)--- ----Ss. 151 & 152---Bank-locker contents---Bailment and bailee---Responsibility of loss---Appellants/plaintiffs alleged that valuables lying in their locker with respondent/bank were stolen and they had claimed recovery of their loss from the bank---Trial Court dismissed the suit---Validity---No responsibility would hinge on respondent/bank under the law of bailment if (i) bailment was proved and (ii) if respondent/bank had taken as much care of the goods bailed to them as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value as the goods bailed---To make out a cause of action in bailment, appellants/plaintiffs had to prove (i) a transfer of possession of property and (ii) an obligation to do something with the property, such as to store it, use it for a specified purpose, or hold it subject to satisfaction of security, whether or not for payment---For a contract of bailment, a transfer of possession (delivery) of bailed goods must occur---Division Bench of High Court in exercise of appellate jurisdiction had to decide the matter within specific parameters, to see if laws and the evidence could allow claim of appellants/plaintiffs but they failed to establish their claim---Appeal was dismissed, in circumstances. Mahmooda Tapal and another v. Standard Chartered Bank PLD 2021 Sindh 28; New India Insurance Company Limited and another v. The Delhi Development Authority and others AIR 1991 Delhi 298; Bank of Chitur Limited v. P Narasimhulu Nidu and others AIR 1996 A.P. 163; Morvi Mercantile Bank Limited v. Union of India AIR 1965 SC 1954; Cooperative Hindustan Bank Limited v. Surindranath Dey and others AIR 1932 Calcutta 524; Sikandar Hayat v. Sughra Bibi 2020 SCMR 214; Hafiz Tassaduq Hussain v. Lal Khatoon PLD 2011 SC 296; Noor Jehan Begum v. Mujtaba Ali Naqvi 1991 SCMR 2300; Malik Tariq Mehmood v. Province of Punjab 2023 SCMR 102; Farzand Ali v. Khud a Buksh PLD 2015 SC 187; Muhammad Rafique v. Abdul Aziz 2021 SCMR 1805; Mahmood Khan v. Sara Akhter 2024 SCMR 178 and Jahangir v. Mst. Shams Sultana 2022 SCMR 309 ref. (b) Qanun-e-Shahadat (10 of 1984)--- ----Arts. 38 & 39---Extra judicial confession---Principle---Extra judicial confession made by any accused is inadmissible in evidence according to Arts. 38 & 39 of Qanun-e-Shahadat, 1984, specially before registration of FIR Zahid F. Ebrahim for Appellants. Hassan Arif for Respondents. Dates of hearing: 13th February, 19th and 20th March, 2024.

Summary: (a) Civil Procedure Code, 1908 (V of 1908) —O.VII, R.11—Rejection of plaint—Scope—Plaint for specific performance of oral agreement—Maintainability—Admitted oral agreement and pleaded part-performance—Effect— Suit for specific performance based on oral sale agreement was rejected under O.VII, R.11, C.P.C. for lack of written contract and limitation bar—Held, where oral agreement and part-payment are admitted by defendant in written statement and legal notice, plaint cannot be rejected solely for lack of written terms—Court must treat averments in plaint as true and assess maintainability accordingly—Rejection of plaint in such case constitutes material irregularity—Order of lower courts set aside. (b) Limitation Act, 1908 —Art. 113—Specific performance—Limitation—Starting point—No fixed date for performance—Refusal of performance— Held, where no date is fixed for performance in oral agreement, limitation under Art. 113 begins from date plaintiff has notice of defendant’s refusal—Legal notice dated 12.05.2018 constituted clear refusal—Suit filed on 06.05.2019 was within prescribed three-year period—Findings of lower courts based on incorrect application of limitation law—Rejection of suit on this ground was erroneous. (c) Contract Act, 1872 & C.P.C., 1908 —Ss. 29 & 10—Oral agreements—Uncertain terms—Pleading of general facts—O.VI, R.12— Court observed that an oral agreement need not recite all terms in detail in the plaint—Where contract arises from conversations or conduct, general pleading is permissible—Omission to state witness names or specific performance date not fatal—Ambiguity in pleadings may be cured by seeking further particulars under O.VI, R.5, C.P.C., rather than rejecting suit at threshold. Disposition: Revision Allowed—Judgment and decree of Appellate and Trial Courts set aside—Plaint reinstated—Matter remanded for trial on merits—Application under O.VII, R.11 dismissed. Cited Case Law: Haji Abdul Karim v. Messrs Florida Builders (Pvt.) Ltd., PLD 2012 SC 247 Siraj Din v. Mst. Khurshid Begum, 2007 SCMR 1792 Shoukat Ullah v. Adil Tiwana, 2021 SCMR 56 Ghulam Nabi v. Muhammad Yaqub, PLD 1983 SC 344 Jaiwanti Bai v. Amir Corporation, PLD 2016 Sindh 498