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High Court Appeal No.88 of 1985, heard on 5th December, 1985.
---O.XXXIX, Rr.l & 2--Law Reforms Ordinance (XII of 1972), S.3 Injunction--Appellant having no prima facie case and relief which claimed could be established in terms of money and he was not likely to suffer irreparable loss--Balance of convenience not lying in favour of appellant who had rot come to Court with clean hands--Appeal against order of refusing injunction having no merit was dismissed.
1979 S C M R 275 rel.
---O.XXXIX, Rr.l & 2--Injunction--"Irreparable injury"--Meaning- Irreparable injury meant that injury which could not be adequately compensated for in damages.--[Words and phrases].
---O.XXXIX, Rr:l & 2--Injunction--Where pecuniary compensation is granted, general rule is that no injunction should be granted.
---O.XXXIX, Rr.l & 2--Injunction--Injunction is a form of equitable relief and it is to be issued in aid of equity to a person who has come to Court with clean hands.
---O.XXXIX, Rr.l & 2--Injunction--Injunction is not to be granted to a person who comes to Court with mala fide intention and is never to be granted in aid of injustice.
---O.XXXIX, Rr.l & 2--Injunction--In order to obtain an interim relief, applicant has not only to establish that he has strong prima facie case but he has also to show that balance of convenience is also on his side and that he will suffer irreparable injury unless he is protected during pendency of suit.
1976 S C M R 220 and P L D 1969 Kar.349 rel.
A.S.Waswani for Appellant.
I. H . Zaidi and Ibrahim Pishori for Respondents.
Date of hearing: 5th December, 1985.
-This appeal is directed against the order of our learned brother Hon'ble Mr.Justice Ibadat Yar Khan sitting in S.B. dated 3-10-1985 whereby he dismissed the application of the appellant under Order XXXIX, rules 1 and 2 read with section 151, C.P. C. and refused to grant an order prohibiting the respondent No.1 from encashing Bank guarantee and respondent No.2 from making payment of the amount thereof.
2. Briefly stated the facts giving rise to this appeal are that the respondent No.1, had sold Bannu Sugar Mills Ltd. to the appellant for a consideration of Rs.13 crores by an agreement dated 25-1-1984. Out of the above amount Rs.3 crores were payable in cash by the appellant to respondent No.1 in biannual instalments of Rs.60.lacs each. The first instalment was paid on 2-2-1984 at the time of delivery of possession and the remaining instalments were to be paid after every six months consecutively for which bank guarantee was furnished. There was an amount of 21 crores outstanding against the above sugar Mills, the notice of demand for which was issued by the Excise and Land Customs Department to the appellant. It pertained to the period prior to the date of this transfer. According to the appellant the payment of this amount was the responsibility of respondent No.1. Hence they stopped payment of instalments and filed the present suit wherein the following prayers were made:-
"(a) That the Plaintiff is entitled to the adjustment of the newly, created liabilities disclosed in the relevant paragraphs of the plaint and admittedly said liabilities were not transferred to it as such the plaintiff is not liable to pay any amount to the defendant till the adjustment and finalization of the account as agreed.
(b) That the defendant No.1 be restrained from recovering any amount from the plaintiff in any manner detrimental to the Plaintiff's interests and further be restrained from encashing the bank guarantee.
(c) That the defendant No.1 and their Officers be restrained from implementing and/or making the payment to the defendant No.1 in terms of the bank guarantee No.84-17260, furnished by the Habib Bank Foreign Branch, Karachi, in favour of the Plaintiff.
(d) Cost of the suit.
(e) Any other relief which this Honourable Court deems fit and proper in the circumstances of the case."
3. Along with the suit an application under Order XXXIX, rules 1 and 2 read with Section 151 C.P.C. was made wherein it was prayed that pendente lite the respondent No.1 be restrained from encashing the Bank guarantee in question and respondent No.2 be prohibited from making payment against the said Bank guarantee to Respondent No.1.
4. The application was contested by the respondents. On the requisition of the learned trial Court the Excise and Land Custom Department have filed a statement through the Deputy Attorney General of Pakistan which is to the effect that
"arrears of Central Excise Duty on account of shortfall in production as against the capacity fixed under the Central Excise Duty on production capacity (Sugar) Rules, 1972 outstanding against M/s. Bannu Sugar Mills Limited, Sarai Nauruing (Bannu) shall be recovered from M/s. Pakistan Industrial Department Corporation and not from the new owners of the Mills."
5. The learned trial Court, therefore, rightly observed that in the face of such a clear statement on behalf of the Central Excise and Land Custom Department, there was no reason for the appellant to apprehend that the above amount of Rs.2 crores would be recovered from them and consequently they had no justification for stopping the payment of instalments or refusing to abide by their undertaking in the agreement to pay the instalments according to the schedule.
6. Mr. A. S. Waswani, the counsel for the appellant contended that the demand of Rs.2 crores made by the Excise and Land Custom Department is enforcible under section 11 of the Central Excise Act, 1944 and as his client stands exposed to the extent of this liability he does not want to part with the payment of instalments as in such a situation it would amount to double payment by him. He will not be able to recover this amount from the respondent No.1 subsequently. This argument of Mr.Waswani does not hold any water whatsoever because the so-called demand by the Excise and Land Custom Department is not being pursued by them against him as shown above.
7. Mr. Waswani then submitted that he is not going to be satisfied with the statement given by the Central Excise and Land Custom Department through Deputy Attorney-General because under the law this statement is not binding upon them. I am afraid that the learned counsel has not correctly appreciated the legal value of a statement made by an Officer of the Court as responsible as the Deputy Attorney-General of Pakistan on behalf of Central Excise and Land Custom Department.
8. Apart from that, on merits the appellant appears to have no prima facie case. He has entered into an agreement with the respondent No.1 whereby he had purchased Bannu Sugar Mills and had undertaken to pay the price in instalments. He cannot be allowed to violate the terms and conditions of that agreement by coming up to the Court with a plea that a certain demand was made from him by certain department of the Government in respect of certain arrears due from the said Mills which is alleged to be managed one.
9. He could not have unilaterally stopped the payment of instalments and could not have come to the Court by means of a suit in this manner. Moreover, he has not made Central Excise a Land Custom Department or for that matter the Central Government a party to the suit and his suit, therefore, appears to be bad for non-joinder of necessary parties.
10. It may further be pointed out that the relief which the appellant has claimed can be calculated in terms of money. He has already given Bank guarantee for that amount. It has been held in 1979 SCMR 275 that where the Petitioners are unable to point out what irreparable loss is likely to be caused to them in case of operation of impugned order being not stayed, no injunction can be issued in their favour. It is also settled law that irreparable injury means that the inquiry must be one that cannot be adequately compensated for in damages. Ordinarily, where pecuniary compensation can be granted, the general rule is that no injunction should be granted. Reference in this connection may be made to P L D 1972 A J K 70 (DB).
11. The balance of convenience or to put in other words the balance of inconvenience also does not lie in favour of the appellant. Rather it is in favour of the respondents. We are of the clear view that the appellant has not come to the Court with clean hands. He mala fidely wants to withhold the payment of instalments and thus put the P I D C to monetary loss, at the same time, wants to enjoy the produce of the Mills. He wants to abuse the process of the Court for this purpose. An injunction is a form of equitable relief and it is to be issued in aid of equity to a person, who has come to the Court with clean hands. It is purely within the discretion of the Court. An injunction is not to be granted to a person, who comes to the Court with mala fide intentions and is never to be granted to aid Injustice. In order to obtain an interim relief the applicant has not only to establish that he has strong prima facie case but he has also to show that balance of convenience is also on his side and that he would suffer irreparable injury unless he was protected during the pendency of the suit. Reference in this connection may be made in 1976 SCMR 220, 1979 SCMR 402 and P L D 1969 Kar. 349.
12. We, therefore, do not find any merit whatsoever in this appeal and dismiss the same in limine. It may, however, be pointed out that the observations made in this order are of tentative nature and should not prejudice the learned trial Court.
M.Y.H./B-32/K Appeal dismissed.
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