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Suit No.4 and Civil Miscellaneous Application No.64 of 1986, decided on 10th August, 1986.

---O.XXXIX, Rr.l & 2--Temporary injunction--Plaintiff firm seeking temporary injunction against letter issued by defendant Authority whereby directions were given to stop all payments to plaintiff firm--Plaintiffs supplied two Mobile Generating Sets to defendant Authority who noted some defects in them--Plaintiffs had been given 90% payment and 10% remained to be made in 'said transaction--Record showing that it was a case of repairs and not total replacement of two sets- Plaintiffs undertook repairs and completed, which defendants stated to be only an eye wash--Letter relating to stopping of all payments to plaintiffs who had got many contracts with defendants and said direction was hitting plaintiff hard--Held, it was proper and in interest of justice that in circumstances of case direction in said letter were to be read as withholding a specified amount which met costs of spares and repairs of generating sets only--Order accordingly.

J.H.Rahimatullah for Plaintiff.

Wajihuddin Ahmad for Defendants.

This is an application under Order XXXIX, Rules 1 and 2 and section 151. CPC for the issue of a temporary injunction, restraining the defendants from acting upon letter No. DPN/FOR/322668 dated 17th September, 1985 or recovering directly or indirectly any amount on basis of the impugned letter in any manner and from committing breach of their obligations under the contracts mentioned in paras. 22, 23 and 24 of the Plaint.

The facts leading to the filing of this application are that the plaintiff supplied two Mobile Generators to the defendants for a sum of Rs.27,79,000 and other material such as Flexible Electric Cables 3 crores at the costs of Rs.2,90,000. The plaintiff firm also executed warranty in form DPL-15 Annexure A-1. This warranty was initially for a year beginning from 22-2-1984, which was extended for another one year in 1985. So it was valid upto 22nd February. 1986. According to Annexures B & C filed alongwith the plaint the said Generating sets were received and tested on 16th August, 1984 and on trial they were also found satisfactory. 90% of the payment was received by the plaintiff according to clause 11 of the Contract, whereas the remaining 10% was to be paid after successful start up of the Generating set and its commissioning. On 27-12-1984 when the plaint. firm submitted to defendant No.2 its bill for payment of the balance 10% of the price of the Generating sets, the same was returned with memorandum dated 6-1-1985, stating that the balance would be paid on successful functioning of the Generating sets and production of its commissioning certificate. The plaintiff firm, accordingly, submitted the certificate dated 1st September, 1984 issued by the Manager, Yard Services, certifying that the Generating sets were of the required specification and were put to trials and test and were found satisfactory. Defendant No.2 thereupon made the balance payment to the plaintiff firm.

3. It was in or about April, 1985 that a letter dated 22nd April, 1985 (Annexure F) on behalf of the defendants was addressed to the plaintiff firm, alleging that the Generating sets supplied by the plaintiff firm were defective. It was further alleged that the repairs were not carried out by the plaintiff firm in spite of repeated verbal requests. It appears that thereafter a meeting was held between the parties and it was agreed that (a) "Generating set in 'use at PN Dockyard having fuel filter problem was considered to be a minor defect which can be overcome without much difficulty. (b) "In ease of the other set in use on Board PNS Babur it was agreed to get it repaired by providing all spares for this set and (c) "it was agreed that Flexible cables will be supplied by end of May, 1985 and appropriate tool kits pertaining to Generating sets will also be supplied soon". In this respect reference may be made to Annexure 'G' filed alongwith the plaint. According to Mr. Rehmatullah, learned counsel for the plaintiff, the repairs to the said Generating sets were carried out at the costs of Rs.3,74,000 by the plaintiff firm as per annexure filed alongwith the plaint. Mr.Wajihuddin Ahmad, learned counsel for the defendants disputes this statement as to the repairs and submits that no repairs were, in fact, carried out; it was simply an eye-wash. The plea of Mr. Wajihuddin, prima facie, seems to carry some weight because there is no other documents referred to by Mr. Rahmatullah to prove that the repairs were actually carried out.

4. The plaintiff firm having failed to rectify the defects in the Generating sets and replace parts as agreed the defendants were compelled to issue a letter dated 17th September, 1985, whereby the D.C.M.A. (D.P.) was requested to stop all payments to the plaintiff firm. It is against this letter that an ad interim injunction has been sought for by the plaintiff firm. It seems advantageous to reproduce the said letter as it forms the basis of the whole case for the issuance of injunction, which reads as under:-

"DPN/FOR/322668 MOST/IMMEDIATE/REGISTERED

Directorate of Procurement Navy, Ministry of Defence, 6, Liaquat Barracks KARACHI.

M/s Bakar Brothers 17th September, 1985

Faiz Muhammad Fatehali Road, KARACHI

Dear Sir,

CONTRACT N0.452001/322668 DATED 24-5-1984

FOR MOBILE TRAILER MO NTED GENERATING SETS

Reference:

A.DPN letter No.452001/322668 dated 6-8-1985

B. Your letter9No.BH/1545 dated 28-7-1985.

C. Your letter No.BH/1539 dated 28-7-1985.

D. Your letter No.BH/1524 dated 22-7-1985.

E. DPN letter No.DPN/FOR/322668 dated 11-7-1985.

F. Your letter No.BH/1598 dated 20-8-1985.

(1) In view of ample opportunity having been afforded to your firm for rectification of defects/ replacement of Parts having proved futile and your firm having failed to prove the reliability of the defective Generating sets supplied vide Contract No.452001/322668 dated 24-5-1984, it has now been decided that these substandard Generating sets be replaced with new Generating sets of same specifications and capacity at the earliest but not later than 3 months.

(2) DCMA (DP) through a copy of this letter is requested to stop all payments to your firm until satisfactory replacement of Generating sets.

Sd/

M.AFZAL MALIK

CAPTAIN PN

DIRECTOR"

5. Mr.Wajihuddin submitted that both Generating sets required replacement, whereas Mr. Rahmatullah submits that it is a case of repairs only. According to the submission of Mr.Wajihuddin the defendants are entitled to stop the payment as per letter Annexure 'J' whereas Mr. Rahmatullah submits that at the most the defendants may be entitled, without prejudice, to the costs of repairs. On the material placed on record and particularly relying on Annexure G , which contains minutes of meeting recorded by some officer of the defendants, it seems that in one set there was a fuel filter problem, which was considered to be a minor defect and in case of the other set it requires repairs by providing spare parts.

6. I am, therefore, of the view that on the facts and material placed on record it seems to be a case of repairs and not of total replacement of the two Generating sets. As to the costs of repairs the only material placed on record for the purpose of deciding this injunction application is the statement of account showing break up of the repairs amounting to Rs.3,74,000.

7. The impugned letter dated 17th September, 1985, its paragraph No.2, relates to stopping "all payments" to the plaintiff firm. Mr. Rahmatullah submits that the plaintiff firm has got many contracts with the defendants and this direction is hitting the plaintiff hard. Mr.Wajihuddin Ahmad, however, points out that the direction of the defendants contained in the said letter was stayed by an order of this Court dated 15th January, 1986. Mr. Rahmatullah, however, submits that notwithstanding the said order no payment has been made with regard to any of the contracts. He further alleges mala fide on the part of defendant No.4 and has relied on paragraph Nos.11 to 16 of the plaint alleging, inter alia, that after Mr. Najamuddin Ansari, Commandar, P.N. was replaced by the present Commander, who is defendant No.4 the trouble started as the plaintiff "declined to submit to his demands on which he threatened to see that all goods of plaintiff firm were rejected and that the plaintiff firm was black listed".

8. Mr.Wajihuddin further submitted that the cables which were also a part of the same contract under which the Generating sets were supplied by the plaintiff firm to the defendants have not been supplied so far. Mr. Rehmatullah while referring to para 12 of the plaint supported by affidavit submitted that the cables were supplied in May or June, 1985 as agreed earlier "but the defendant No.4 mala fidely damaged by cutting pieces from the cables on drums 50 so as to cause loss to plaintiff firm and render the cables unmarketable and unserviceable." Be that as it may, since the payment has not been stopped on the ground of alleged non-supply of the cable as per letter, dated 17th September, 1985, which is very much evident. I do not feel inclined to express any opinion on the point of the alleged non-supply of the cables. It is. however, significant to note that no counter-affidavit has been filed by defendant No.4 in spite of personal allegations made against him of a serious nature.

9. Reverting to the question of issuance of the injunction with regard to the letter dated 17th September, 1985 I deem it proper and in the interest of justice, in the circumstances of the case to direct that the impugned letter will be read as withholding an amount of Rs.3,74,000 only towards the costs of spares and repairs to the Generating sets only, and injunction to issue, pending disposal of the suit, to the defendants that they will not withhold an amount beyond the said sum of Rs.3,74,000 under the contract referred to hereinabove.

10. Before parting with the case, I would like to say that the observations with regard to the Generating sets whether they require replacement or repairs or that the repairs have been carried out or not, are only tentative and will be subject to the finding at the time of regular hearing after proper evidence is led by the parties on these questions.

11. The application, is therefore, disposed of in the terms stated above.

M.Y.H./B-30/K Order accordingly.

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