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Civil Revision Application No. 10 of 1987, decided on 14th January, 1987.

---O.VII, R.11--Rejection of plaint--Petitioner challenging order of Trial Court rejecting plaint, under O.VII, R.11, C.P.C., filed by respondent in suit for declaration that agreement/ arrangement entered between parties was valid and effective--Petitioner under an agreement handed over his factory to plaintiff /respondent for running it in a better and profitable manner--When factory showed better results petitioner terminated agreement on ground that respondent failed to make payments in accordance with terms of agreement--Respondent contending that he had been strictly performing terms of bond and that in view of huge investment made by him in operation of sick industry his right under agreement could not be terminated--Question as to whether agreement was a licence agreement or agreement of agency coupled with interest could not be decided in application under O.VII, R.11, C.P.C.--Such question has to be dealt with at trial of suit when all evidence would be available before Court to determine nature of contract and allegation of parties that terms of arrangement/ agreement had been violated by plaintiff-respondent and if so what was its effect on agreement--Trial Court, held, had rightly refused to reject plaint under O.VII, R.11, C.P.C. in circumstances--Petitioner could raise question with regard to maintainability of suit in written statement and in case such pleas raised; Trial Court might frame issues accordingly and decide same after recording evidence, alongwith other issues.

S. M. Saeed for Applicants.

This Revision Application is filed by the Defendants/ Applicants against the order of 3rd Senior Civil Judge, Karachi (South) dated 13-11-1986 whereby the learned Civil Judge rejected the application of the applicant under Order 7 Rule 11, C. P. C. and granted preliminary injunction on the application of Plaintiff /Respondent No.1.

The Respondent No.1 had instituted suit for declaration and injunction on the allegation that Respondent No.2 had. established an industry under the name and style-of M/s. Malti Press Industries for manufacturing of crockery item. The project was financed by applicant No.1 but the industry could not be run successfully by respondent No.2. Both the applicant No.1 and respondent No.2 thereupon approached the respondent No.1 to hand over the said industry for production, management and marketing of Melamine wares on an agreement which is filed as Annexure 'A' to the Petition. It is the case of respondent No.1 that on the request of the applicant No.1 and respondent No.2 a performance bond was executed by the Plaintiff /Respondent No.1 in their favour on 3rd August, 1986 through M/s. Union Insurance Company Limited of Pakistan. It was alleged that after taking over the above industry the respondent No.1 successfully operated it and has been paying the amount of instalment mentioned in the agreement regularly. It is alleged by the respondent No.1 in the plaint that seeing that the industry has come to life the applicant No.1 and respondent No.2 planned to oust the respondent No.1 from the management and with this aim purportedly cancelled the arrangement arrived at between the parties on 2nd July, 1985. The respondent No.1 first approached both applicant No.1 and respondent No.2 to withdraw the aforesaid purported cancellation and on their failure instituted Suit No. 169 of 1986 claiming a declaration that the arrangement/agreement entered into between the parties on 2nd July, 1985 is valid and effective and that the applicants or respondent No.2 have no right to disturb the position of Respondent No.1/plaintiff over the factory. Alongwith the suit respondent No.1/Plaintiff filed an application for grant of temporary injunction on which the Court in the first instance granted ad-interim status quo order which was later on confirmed by the impugned judgment. The learned counsel for the applicants at the hearing of this appeal stated before me that as against the grant of temporary injunction by the impugned order the Petitioners have already filed .an appeal before 4th Additional District Judge which is still pending.

The present Revision Application is filed by the Petitioners only against that part of the order of the learned Civil Judge whereby he refused to reject the plaint of respondent No.1 under Order 7 Rule 11 C.P.C.

The main contention raised by the learned counsel for the applicant is that as the arrangement entered into between the parties on 2nd July, 1985 was in the nature of bare license and the same having been terminated by applicant No.1, the suit instituted by respondent No.1 was incompetent as their possession over the factory after the termination of the agreement became unauthorised. It is accordingly contended by the learned counsel that the declaration sought by the petitioner could not be granted under section 42 of the Specific Relief Act.

It is an admitted position that under the agreement dated 2nd July, 1985 the possession of the factory was handed over to the respondent No.1 to run the same in a better and profitable manner. It is also an admitted position that under the aforesaid agreement the plaintiff /respondent No.1 had undertaken to pay the sum of Rs.50,000 per month to the applicant No.1 for utilizing of the factory and another sum of Rs. 15,000 per month on account of miscellaneous expenses including emoluments of the staff engaged for watch and ward, insurance premium. The Respondent No.1 for faithful performance of above arrangement provided an insurance bond in favour of applicant No.1 and respondent No.2 and under the aforesaid performance bond the amount mentioned in the agreement payable in instalment to applicant No.1 and other expenses are fully secured. The case of the applicants jointly is that the respondent No.1 had failed to make payment in accordance with the terms of the arrangement dated 2nd July, 1985 and as such it has been validly terminated. On the other hand the Respondent No.1 contended in his suit that he has been strictly performing the terms of the bond and that in view of the huge investment made by him in the operation of sick industry his rights under the agreement could not be terminated in the manner as has been done by applicant No.l. The question whether the agreement dated 2nd July, 1985 is a license agreement or an agreement of agency coupled with interest is a question which cannot be decided in application under Order 7 Rule 11 C.P.C. The learned trial Court therefore, rightly refused to reject the plaint as this question must be left to be dealt with at the trial of the suit when all the evidence will be avilable before the Court to determine the nature of the contract, the allegation of the parties that the terms of the arrangement has been violated by the Plaintiff/respondent No.1 and if so what was its effect on the agreement. I, therefore, see no reason to interfere with the order of the trial Court refusing to reject the plaint of respondent No.l in the suit under Order 7 Rule 11 C.P.C. However, if the applicant so advised they may raise the question with regard to maintainability of the suit in the written statement and if such pleas are raised the Trial Court may frame issues accordingly and decide the same after recording evidence of the parties alongwith other issues. With these observations the Revision Application is dismissed summarily.

M.Y.H./B-22/K Petition dismissed.

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