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Civil Revision No. 49 of 1978, decided on 5th November, 1985.

‑‑‑S. 2(h)‑‑Terms of contract between vendor and vendee specifying action to be taken in case of breach of terms of contract‑‑Vend or " taking action in accordance with terms of contract and taking other coercive measures for recovery of contractual amount as well as damages and fine‑‑Amount due from vendees to extent of balance of purchase money, damage and fine, held, could not be recovered because of 3 action having already been taken by vendor in terms of contract.

P L D 1965 S C 489 fol.

‑‑‑S. 4(2)‑‑Arrears of land revenue‑‑Recovery of‑‑Amount of fine not ascertained in accordance with law, held, could not be recovered as arrears of land revenue.

‑‑S. 115‑‑Revisional jurisdiction‑‑Part of amount claimed not covered by contract between parties‑‑Effect‑‑Where part of amount claimed was not covered by contract of parties, same, held, could be recovered by coercive measures as arrears of land revenue by vendee‑‑High Court in exercise of revisional jurisdiction modified decree of Courts below by excepting amount not covered by contract of parties.

Kh. Nazir Ahmad, Asstt. A.‑G. for Petitioners.

Khawaja Abdur Rashid for Respondent.

Date of hearing: 14th September, 1985.

On the 5th July, 1965, Messrs Feroz Din and Sons, Havelian Road, Abbottabad, (then Hazara District), hereinafter called 'purchasers', entered into a contract with the Government of the then West Pakistan, hereinafter called the 'vendor', for the purchase of 303 trees of different kinds, measuring 52483.0 eft. at Rs.2,58,062.18 from Phalkot compartment 1(ii) and 3(i), Galis Forest Division, Abbottabad. The conditions of the contract were reduced to writing in EXh.P.W.l/1 and the details of the trees purchased and the price to be paid by the, purchasers therefor was mentioned in the schedule appended to the contract. According to condition No. 2 the carriage to roadside was to be completed by 30‑11‑1965 and carriage beyond jurisdiction by 31‑12‑1965. According to condition No. 10, the amount at which the trees were purchased was to be paid by the purchasers in the following three instalments:‑

(1) Rs.86,022.18 on or before 1‑9‑1965;

(2) Rs.86,020 on or before 1‑10‑1965; and

(3) Rs.86,020 on or before 1‑11‑1965.

2. Under condition No. 11, if the purchasers failed to pay any instalment of the purchase money inclusive of supplementary marking, if any, or any part thereof on the due date, they were liable, after the lapse of 10 days grace, to pay interest at the rate of 10 per annum on the sum due in addition to any penalty provided in this contract. If such failure extended beyond 30 days, the purchasers were liable to the stoppage of all export of their timber and to the confiscation of their produce and of the security deposit hereinafter mentioned as well as of all other moneys paid by them or on their behalf under this contract, and to the cancellation of this contract at the discretion of the officer for the time being incharge of the Circle of Conservancy, called the conservator, as he might direct. It was further provided in this condition that in case the contract was cancelled, the purchasers would have no further claim to any trees, timber, fuel wood and charcoal remaining in the forest or road‑side depot or catching depot, whether paid for or not, nor to the refund of any money which might have been paid to them for such trees, timber, fuel wood and charcoal. The amount of the security which was deposited by the purchasers as mentioned in condition No. 28 was Rs.20,000. The Conservator was empowered to deduct from such security money any sum that might be due from the purchasers whether in respect of instalments of purchase money, or other sum payable by them in respect of any forfeiture or compensation incurred by them under the terms of this contract. It was further provided that the security money, or the balance thereof left after deduction aforementioned, was to be returned to the purchasers after the close of the operation, and after the Conservator had satisfied himself that all the terms of the contract had been duly and faithfully carried out by the purchasers.

3. The purchasers paid the first instalment as was due from them. They, however, failed to pay in full the second instalment, the outstanding balance being Rs.38,020. They also failed to pay the third instalment. The purchasers were also made liable to pay Rs.1,850 as extension fee, Rs.30.570.23' as damage and Rs.60,244.68 as fine (for illicit cutting), thus totalling Rs.2,09,703.91. This amount was sought to be recovered by the vendor from the purchasers as arrears of land revenue.

4. There had been a chain of correspondence between the parties and ultimately the purchasers instituted on 10‑2‑1968 against the vendor a suit in the Court of Senior Civil Judge, Abbottabad for a declaration to the effect that they were not liable to pay any dues to the vendor under the contract referred to above after the cancellation of the said contract and the confiscation of their timber and forfeiture of their security deposits and all other moneys paid by them. A prayer was also made that the vendor and other defendants be restrained from making recovery, in any manner, of any amount from them relating to the aforesaid contract.

5. This suit was contested by the vendor and other defendants (all hereinafter called vendor) on the grounds which are reflected in the following issues framed by the learned trial Judge:‑---

(1) Whether the plaintiff has a cause of action

(2) Whether the suit is correctly valued for the purposes of court‑fee and jurisdiction

(3) Whether the plaintiffs are not liable to pay any arrears under the agreement, dated 5‑7‑1965, if so to what effect

(4) Relief.

6. The learned trial Judge decided all the issues in favour of the purchasers and decreed the suit, vide his judgment, dated the 24th April, 1971. The vendor went up in appeal to the Court of learned District Judge, who dismissed the appeal, vide his judgment and decree, dated the 24th July, 1977. This revision has been filed by the vendor, wherein the decrees passed by the learned two Courts below have been assailed on the grounds herein mentioned.

7. Kh. Nazir Ahmed, Assistant Advocate‑General argued the matter on behalf of the vendor and Kh. Abdur Rashid, Advocate appeared on behalf of purchasers.

8. The learned Assistant Advocate‑General, while arguing this revision petition and in order to convince me that there has been misreading of evidence and misapplication of law by the learned two Courts below, took me through the entire evidence brought on record, oral as well as documentary. His precise contentions were that in this case the purchasers had failed to abide by the terms of the contract and had not paid in full the second instalment, had totally defaulted in payment of the third instalment, had committed damage in the compartments where the work was in progress and also in the coupe adjoining those compartments by doing illicit cutting of trees which were not marked for felting. He further contended that on account of illicit cutting of the trees not marked for felling the purchasers were fined by the competent authority in accordance with the terms contained in the contract. According to the learned Assistant Advocate‑General, since the purchasers had to pay an amount of Rs.2,09,703.91 to the vendor, coercive measures for the recovery of the same as arrears of land revenue were to be employed by the vendor. His contention was that the action taken by the vendor against the purchasers was covered by clauses 11, 17(a) and 26 of the contract.

8. The learned counsel representing the purchasers, however, argued that it was wrong to say that after taking action under clause 11 of the contract the vendor was still left with any other remedy to claim the amount sought to be recovered from the purchasers as arrears of land revenue; that action under clauses 17(a) and 26 of the contract could not be taken by the vendor; that the illicit cutting attributed to the purchasers was not at all proved against them and that despite the repeated requests made by the purchasers to hold impartial inquiry into the matter of illicit cutting, no inquiry was held, with the result that there were allegations and counter‑allegations by the parties to this litigation against each other which had not ripened into 'dues' so as to become recoverable from the purchasers as arrears of land revenue. His last contention was that at the most only a reasonable amount could be awarded to the vendor by the Court under section 74 of the Contract Act and not the amount claimed by them.

9. Since the vendor's case rests on clauses 11, 17(a) and 26 of the contract, it would be beneficial to reproduce these clauses, which read as follows:‑----

"11. That, if the purchasers failed to pay any instalment of the purchase money inclusive of supplementary marking if any, or any part thereof on the due date they shall be liable, after the lapse of ten days' grace, to pay interest at the rate of 10 per cent per annum on the sum due in addition to any penalty provided in this agreement. If such failure extends beyond 30 days, the purchasers shall be liable to the stoppage of all export of their timber and to the confiscation of their produce and of the security deposits hereinafter mentioned as well as of all other moneys paid by them or on their behalf under this agreement, and to the cancellation of this agreement at the discretion of the officer for the time being incharge of the Circle of conservancy (hereinafter called the Conservator) as he may direct. Should the agreement be cancelled the purchasers shall have no further claim to any trees, timber, fuel‑wood and charcoal remaining in the forest or road‑side depot or catching depot whatever paid for or not, nor to a refund of any money which may have been paid by them for such trees, timber, fuel‑wood and charcoal.

17 (a) That in the event of the purchaser, his agent or labour accidentally, negligently or deliberately felling a tree over 8" in diameter to which he is not entitled to fell under the terms of this agreement, the Conservator may impose a fine not exceeding ten times the price of the tree according to the rate given in the annexed schedule in addition to charging the price of the tree which will then become the property of the purchaser. For a tree under 8" in diameter the purchaser shall be liable to pay price of the sale rate plus a penalty not exceeding Rs.200 per tree. It is further agreed that the Forest officer has reason to believe that the purchaser or his agent or servant as felled more than 20 trees to which he is not entitled he may suspend his work pending enquiry. The department in that case will not be liable to account for such a break in the period of the agreement.

26. That the purchasers agree not to buy any standing trees other than from reserved forest, anywhere within limits of the------Forest Division except with the written permission of the Conservator.

26(a) That the purchasers agree to hold themselves responsible during the period of their contract for the felling of any unmarked tree within the compartment or compartments in which the work detailed in this agreement is being carried out or in Reserved Forest or Guzara‑Forest adjoining the coupe under operation by the purchasers. That in the event of any such tree being felled the Forest Officer may impose on the purchasers a fine of Rs.50 (Rupees fifty) only in addition to the average divisional sale rate for the current year of a tree of that particular size and species.

26(b) That the purchaser agrees to hold himself, his agents and labour employed for any of the purchasers connected with the execution of this contract, for illicit timber found within the area in which the work detailed in this agreement is being carried out or in his transit depot. That in the event of any such illicit timber found the Forest Officer may impose a fine which may amount to Rs.500 in addition to charging the price of timber upto 10 times the current market rates sold from the area which will then become the property of the purchaser."

9. The oral evidence led by the parties at the trial was of Adalat Khan (P. W .1) , Record Clerk, D . F.O. Office, Gallies Forest Division, Raja Feroz Din plaintiff (P.W.2) and Muhammad Iqbal (D.W.1) Head Clerk, Gallies Forest Division. Thereafter, the parties closed their evidence but the Court re‑examined Muhammad Iqbal, Head Clerk, Gallies Forest Division as a Court witness. The documentary evidence brought on record consisted of copies of various letters written by the parties to each other in connection with this contract. From this evidence it appears that clauses 12 and 17(d) of the contract were also relevant, which may be reproduced hereunder:‑---

"12. That the purchasers shall not remove beyond the limits of the forest any part of timber obtained from trees sold under this agreement before they have paid the first instalment provided for in clause 10 of this agreement, nor during such time as any instalment payable by them may be in arrears or any fine or liability incurred by them under this agreement may be unpaid or unsatisfied.

If at any time the Forest Officer considers that the value of any timber exported by the purchasers exceeds the amount of purchase money paid by them upto that time he may stop further export until the purchasers have paid such further sum as in the opinion of the Forest Officer may be sufficient to cover the excess value of the timber exported or about to be exported. The decision of the Conservator as to whether the payment has been made in full shall be final in the matter. 17(d) The purchasers further agree to pay compensation for any damage done to the surrounding regeneration in the course of felling and the value assessed by the Forest officer shall be final."

10. As already mentioned, the amount sought to be recovered from the purchasers as arrears of land revenue consisted of the balance of the price which the purchasers had to pay for the purchase of the trees, the extension fee imposed upon them on the request made by them for extension of period of operation, the damage done by them to the forest and the fine imposed upon them for illicit cutting of the trees.

11. The learned trial Judge decreed the suit in favour of the purchasers on the ground that after having invoked powers under clauses 11 and 17(a) of the contract the vendor was left with no other remedy to recover the disputed amount from the purchasers as arrears of land revenue. In appeal by the vendor to the District Court, the learned District Judge, agreeing with the learned trial Judge, also came to the conclusion that in view of the action taken by the vendor under clauses 11 and 17(a) of the contract, the vendor was left with no other remedy to recover the disputed amount from the purchasers as arrears of land revenue. Both the Courts below, in this regard, relied on the decision of the Supreme Court, reported as P L D 1965 SC 489. The learned District Judge was further of the view that the amount sought to be recovered by the vendor from the purchasers as arrears of land revenue was not 'ascertained dues' which could have been recovered under the West Pakistan Government Dues Recovery Ordinance, 1962. In his opinion, even the said Ordinance, was of no avail to the vendor.

12. It has come in the evidence placed on record, and was even not disputed by the learned counsel appearing before me for the parties, that all the trees purchased by the purchasers were allowed by the departmental authorities to be cut, processed and transported by the purchasers, some to the market as they were paid for, and some to the Azizabad road‑side depot of the purchasers. From the letter EXh.P.W.l/20, which was copy of the letter, dated 8‑3‑1966 of the Divisional Forest Officer, Gallies Forest Division to the Conservator of Forests, Abbottabad Circle, it was clear that the purchasers had completed forest operation and the timber mentioned hereafter was lying in the road‑side depot for carriage:‑----

Timber = 15353.5 Cft.

Hathbal = 33 Nos.

Pharas = 113 Nos.

Golas = 29 Nos.

In this letter some recommendations were made in favour of the purchasers. It was, therefore, obvious that even on 8‑3‑1966 substantial quantity of timber was lying in the road‑side depot of the purchasers and had the vendor and his agents in the field been vigilant enough to take action in terms of clause 12 of the contract much of the loss which allegedly occurred to them would have been avoided. As was not disputed before me by the learned counsel for the parties, the damage done to the trees which was to be recovered by the vendor was in fact to be treated as supplementary marking of trees, the purchase money whereof, at the calculated rate, was to be received alongwith the instalments which remained unpaid by the purchasers. It thus fell under the purview of clause II of the contract. On the basis of the authority of the Supreme Court referred to above, I would agree with the learned two Courts below that the amount due from the purchasers to the extent of the balance of the purchase money and the damages referred to above could not be recovered from the purchasers because action against them had been taken by the vendor under clause II of the contract, which was also cancelled in furtherance thereof. In respect of the extension fee of Rs.1,850, however, I am of the view that this amount fell out of the scope of the said clause of the contract and having become due on the request made by the purchasers themselves could be recovered by the vendor from them as arrears of land revenue. In respect of the fine imposed by the forest authorities on the purchasers, I agree with the learned District Judge that such fine could also not be recovered as arrears of land revenue because the amount had not been ascertained in accordance with law. Neither was there available any adjudication about it by the competent Court nor had it been assessed in the manner provided by any other law. The purchasers had been repeatedly making request for conducting impartial inquiry into the allegations against them of illicit cutting of trees by them on the basis of which damage reports were prepared and the forest authorities did not make any such inquiry. The damage reports were not even proved in evidence by those who had detected and made such reports, nor was produced any witness to show that the purchasers did commit illicit cutting of trees and were thus liable to pay damages and fine for the same. The solitary witness produced in this case by the vendor was the witness of record, who could only bring on record copies of documents and could depose to what was contained in the record. The illicit cutting done by the purchasers and its extent, therefore, remained unproved from the evidence brought on record and for that reason that learned lower appellate Judge was right in holding that it was not recoverable as arrears of land revenue, having not ripened into ascertained dues in accordance with law. The conclusion, therefore, would be that except the amount of extension fee of Rs.1,850 no other amount would be recovered by vendor from the purchasers as arrears of land revenue. The two Courts below misread the evidence available on the record only in respect of the entitlement of the vendor to recover the extension fee mentioned above.

13. In view of discussion above, I would partially accept this revision petition and modify the decree of the learned two Courts below in that except the amount of Rs.1,850 (extension fee) which could be recovered from the purchasers as arrears of land revenue, the rest of the amount was not recoverable as such. The parties are left to bear their own costs.

A . A . Revision partly accepted.

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