Citation Name
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Parties
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Case Law Notes
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| 2023 SCMR 1189 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
S. 73—Breach of contract—Damages, award of—Purpose and scope—Damages are costs that are imposed not as a deterrent or as a means to punish person(s) or party(s) who has/have breached a contract but instead to bring the person(s) or party(s) who has/have suffered from the breach of contract into a position which they would have been had the breach of contract not accrued—Said principle is known as the principle of restitutio in integrum (restoration to original condition)—It therefore stands to reason that damages are in fact the compensation that the law awards when a breach of contract occurs as compensation for the loss that a person or party has suffered from a breach of contract. |
| 2023 SCMR 1189 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
S. 73—Habib Bank Limited (Staff) Service Rules, 1981, R. 39—Bank employee—Wrongful dismissal—Suit for damages—Breach of employment contract by employer—Employee denied the right of an opportunity to defend himself and discriminated against—Compensation, award of—Financial and economic loss naturally arising out of the wrongful dismissal—In the present case when the Respondent-employee was dismissed from service, it would have been difficult for him to be employed again owing to the fact that a dismissal from service on his record would have had the effect of either barring him from further employment or making it considerably more difficult for him to be employed again—Such blot on his service permanently marked the Respondent for the rest of his life and was only washed away when the Respondent passed away—Had the Appellant-bank treated the Respondent in a just and fair manner and conducted a fair, open and impartial inquiry giving him the opportunity to defend himself, the financial and reputational aspect of a claim in tort would have been non-existent or too remote—Dismissal from service is clearly a stigma and financial and reputational loss apart from mental torture, agony and distress are logical consequences—In the present case, owing to denial of the right to defend himself without just cause leads towards a conclusion of wrongful dismissal and financial as well as economic loss and therefore could naturally be considered to arise out of the wrongful dismissal of the Respondent by the Appellant—Since the Respondent had been wrongfully dismissed from service, the Appellant cannot be granted the premium of not being made to compensate the Respondent especially when the Appellant failed to prove that the damages the Respondent sought were too remote or did not naturally arise out of the breach of contract—Once the Respondent had proved that he had been wrongfully dismissed from service, the onus shifted on the Appellant to prove that the damages claimed by the Respondent were either too remote or did not arise out of the breach of contract—In the absence of anything to the contrary, the Respondent was entitled to such damages that in the opinion of the Court, considering the facts and circumstances of the case, arose directly out of the breach of contract as well as all damages claimed for wrongful dismissal from service—Appeal was dismissed. |
| 2023 SCMR 1189 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
S. 73—Breach of contract—Damages, award of—Burden of proof—Onus would lie on a plaintiff or claimant to prove that there had been a contract entered into between the parties; that there had been a breach of contract; and the extent of the damages claimed thereof. |
| 2023 SCMR 1189 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
S. 73—Breach of contract—General and special damages—Distinction and scope—Concept of awarding damages is, by its very nature, inclusive of awarding both general as well as special damages—However, the nature of general and special damages and proving the two are different compared to each other. |
| 2023 SCMR 1189 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
R. 39—Contract Act (IX of 1872), S. 73—Bank employee—Wrongful dismissal—Suit for damages—Breach of employment contract by employer—Employee denied the right of an opportunity to defend himself and discriminated against—Effect—At no point did the Appellant-bank during cross-examination of the Respondent-employee ever try to rebut or deny the allegations made by him against the involvement of the General Management in the losses that had led to the initial preliminary inquiry and subsequent dismissal of the Respondent by the Appellant—In fact, the Appellant had agreed that it had allowed the General Manager, under whose instructions and supervision the Respondent worked, to resign as opposed to being dismissed from service—When the Respondent responded to the show-cause notice issued to him by the Appellant, he demanded a “full and complete” hearing before the Enquiry Committee—However, the Enquiry Committee constituted for probing the allegations against the Respondent dispensed with such requirement (under Rule 39 of the Habib Bank Limited (Staff) Service Rules, 1981) without giving any reason and proceeded to dismiss the services of the Respondent—Principle of audi alteram partem i.e. being granted a hearing before an adverse order is passed applies to employees who are to be dismissed from service since dismissal entails reputational as well as financial loss—Enquiry Committee by dispensing with the requirements of Rule 39 of the Habib Bank Limited (Staff) Service Rules, 1981 infringed the right of the Respondent to present oral evidence and cross-examine anyone who might have testified against him—Respondent was denied a fundamentally important right of an opportunity to defend himself—Furthermore, Respondent was discriminated against as admittedly the General Manager was the person who the Respondent reported to; under whose instructions the Respondent acted; and who admittedly appeared to be reason the branch of the Appellant faced colossal financial loss—Surprisingly, no civil proceedings were initiated by the Appellant against the General Manager and he was ultimately asked to resign from service whereas the Respondent was dismissed from service—Appellant had breached the Respondent’s employment contract— Appeal was dismissed. |
| 2023 PLC(CS) 891 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
R.39—Contract Act (IX of 1872), S. 73—Bank employee—Wrongful dismissal—Suit for damages—Breach of employment contract by employer—Employee denied the right of an opportunity to defend himself and discriminated against—Compensation, award of—Financial and economic loss naturally arising out of the wrongful dismissal—In the present case when the Respondent-employee was dismissed from service, it would have been difficult for him to be employed again owing to the fact that a dismissal from service on his record would have had the effect of either barring him from further employment or making it considerably more difficult for him to be employed again—Such blot on his service permanently marked the Respondent for the rest of his life and was only washed away when the Respondent passed away—Had the Appellant-bank treated the Respondent in a just and fair manner and conducted a fair, open and impartial inquiry giving him the opportunity to defend himself, the financial and reputational aspect of a claim in tort would have been non-existent or too remote—Dismissal from service is clearly a stigma and financial and reputational loss apart from mental torture, agony and distress are logical consequences—In the present case, owing to denial of the right to defend himself without just cause leads towards a conclusion of wrongful dismissal and financial as well as economic loss and therefore could naturally be considered to arise out of the wrongful dismissal of the Respondent by the Appellant—Since the Respondent had been wrongfully dismissed from service, the Appellant cannot be granted the premium of not being made to compensate the Respondent especially when the Appellant failed to prove that the damages the Respondent sought were too remote or did not naturally arise out of the breach of contract—Once the Respondent had proved that he had been wrongfully dismissed from service, the onus shifted on the Appellant to prove that the damages claimed by the Respondent were either too remote or did not arise out of the breach of contract—In the absence of anything to the contrary, the Respondent was entitled to such damages that in the opinion of the Court, considering the facts and circumstances of the case, arose directly out of the breach of contract as well as all damages claimed for wrongful dismissal from service—Appeal was dismissed. |
| 2023 PLC(CS) 891 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
S. 73—Breach of contract—Damages, award of—Purpose and scope—Damages are costs that are imposed not as a deterrent or as a means to punish person(s) or party(s) who has/have breached a contract but instead to bring the person(s) or party(s) who has/have suffered from the breach of contract into a position which they would have been had the breach of contract not accrued—Said principle is known as the principle of restitutio in integrum (restoration to original condition)—It therefore stands to reason that damages are in fact the compensation that the law awards when a breach of contract occurs as compensation for the loss that a person or party has suffered from a breach of contract. |
| 2023 PLC(CS) 891 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
S. 73—Breach of contract—General and special damages—Distinction and scope—Concept of awarding damages is, by its very nature, inclusive of awarding both general as well as special damages—However, the nature of general and special damages and proving the two are different compared to each other. |
| 2023 PLC(CS) 891 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
S. 73—Breach of contract—Damages, award of—Burden of proof—Onus would lie on a plaintiff or claimant to prove that there had been a contract entered into between the parties; that there had been a breach of contract; and the extent of the damages claimed thereof. |
| 2023 PLC(CS) 891 SUPREME-COURT |
HABIB BANK LIMITED VS MEHBOOB RABBANI |
R. 39—Contract Act (IX of 1872), S. 73—Bank employee—Wrongful dismissal—Suit for damages—Breach of employment contract by employer—Employee denied the right of an opportunity to defend himself and discriminated against—Effect—At no point did the Appellant-bank during cross-examination of the Respondent-employee ever try to rebut or deny the allegations made by him against the involvement of the General Management in the losses that had led to the initial preliminary inquiry and subsequent dismissal of the Respondent by the Appellant—In fact, the Appellant had agreed that it had allowed the General Manager, under whose instructions and supervision the Respondent worked, to resign as opposed to being dismissed from service—When the Respondent responded to the show-cause notice issued to him by the Appellant, he demanded a “full and complete” hearing before the Enquiry Committee—However, the Enquiry Committee constituted for probing the allegations against the Respondent dispensed with such requirement (under Rule 39 of the Habib Bank Limited (Staff) Service Rules, 1981) without giving any reason and proceeded to dismiss the services of the Respondent—Principle of audi alteram partem i.e. being granted a hearing before an adverse order is passed applies to employees who are to be dismissed from service since dismissal entails reputational as well as financial loss—Enquiry Committee by dispensing with the requirements of Rule 39 of the Habib Bank Limited (Staff) Service Rules, 1981 infringed the right of the Respondent to present oral evidence and cross-examine anyone who might have testified against him—Respondent was denied a fundamentally important right of an opportunity to defend himself—Furthermore, Respondent was discriminated against as admittedly the General Manager was the person who the Respondent reported to; under whose instructions the Respondent acted; and who admittedly appeared to be reason the branch of the Appellant faced colossal financial loss—Surprisingly, no civil proceedings were initiated by the Appellant against the General Manager and he was ultimately asked to resign from service whereas the Respondent was dismissed from service—Appellant had breached the Respondent’s employment contract— Appeal was dismissed. |
| 2023 MLD 994 KARACHI-HIGH-COURT-SINDH |
Dr. JAVED AKHTAR VS RUFI BUILDERS AND DEVELOPERS |
Ss. 42, 39, 12, 8 & 54—Contract Act (IX of 1872), S. 73—Qanun-e-Shahadat (10 of 1984), Art. 132—Suit for declaration, cancellation, specific performance of contract, possession, injunction and damages—Witness not cross-examined—Scope—Plaintiff filed a suit for declaration, cancellation, specific performance of contract, possession, injunction and damages—Contention of plaintiff was that he purchased suit property from the defendant; that he paid certain charges for lease and connection; that the defendant was bound to deliver possession within three years; that the defendant demanded more than the settled amount and that the defendant sent cancellation letter to the plaintiff—Defendant admitted that the plaintiff had booked the suit property and the total sale consideration was also agreed as stated by the plaintiff in the plaint, however, stated that since the plaintiff had failed to pay additional charges, therefore, the allotment was cancelled—Validity—Defendant never appeared before the commissioner appointed to record the evidence—Defendant had admitted most of the averments of the plaintiff in his written statement—Entire evidence of the plaintiff had gone un-rebutted—Mere written statement had no meanings since it could not be treated as evidence at all—Evidence of the plaintiff would be deemed to have been admitted by the defendant—Suit was decreed as prayed. |
| 2023 PLC(CS) 889 KARACHI-HIGH-COURT-SINDH |
MUHAMMAD ASLAM VS FEDERATION OF PAKISTAN through Secretary Ministry of Commerce |
S.73—Civil service—Termination from service—Master and servant—Compensation for loss or damage caused by breach of contract—Scope—Plaintiff filed a suit against his termination from the defendant company—Validity—Plaintiff was appointed by the company when it acquired corporate status, and their relationship was governed by the master and servant rule—Plaintiff had relied on the Human Resource Manual, which suggested that termination could be done without assigning any reason or as a retrenchment measure, provided a notice of three months or payment in lieu thereof was given—Defendant had offered final settlement to the plaintiff after completing the required formalities—Employee could not force his employer to continue his services as it would disrupt the entire internal mechanism and workings of the corporate sector—Therefore, the suit could, at most, be considered a claim for the recovery of damages due to the alleged unlawful termination and nothing more. |
| 2022 SCMR 1572 SUPREME-COURT |
Malik MUHAMMAD RIAZ VS MUHAMMAD HANIF |
Ss. 12, 19 & 54—Civil Procedure Code (V of 1908), O. VI, R. 1 & O. XIV, R. 1—Contract Act (IX of 1872), S. 73—Suit for specific performance of contract for service, damages and permanent injunction—Defendant engaged the appellant (plaintiff) to demolish an old building structure and construct a new plaza/building thereon—Appellant alleged in the plaint that he had almost completed 80% work of construction of the Ground Floor and 30% of the First Floor; that appellant forwarded a bill to the defendant for payment of Rs.52,01,500/- but the defendant refused to pay the same—According to the terms and conditions of agreement and the schedule of payment incorporated therein, the appellant prayed for a decree in the sum of Rs.70,10,500/- out of which, a sum of Rs.52,10500/- was for construction charges and Rs.15,00,000/- for the raw-material lying at the building site plus Rs.300000/- as demolishing charges of old structure—In addition, the appellant also claimed the damages to the tune of Rs.70,00,000/- on account of irreparable losses, mental agony and severe financial losses—Trial Court decreed the suit with the directions to the defendant to pay a sum of Rs.70,10,500/- as balance construction charges in view of the agreement and a further sum of Rs.70,00,000/- as damages—Judgment and decree of Trial Court were affirmed in appeal, however vide impugned judgment, the concurrent findings of the Trial Court as well as the first Appellate Court were set aside by the High Court and the suit filed by the appellant was dismissed—Held, that so far as principal amount of Rs.52,10500/- as outstanding charges of construction was concerned, it appeared from the record that this amount was rightly decreed in favour of the appellant, being an outstanding amount that could not be turned down and which was also established through evidence—So far as the claim of 15,00,000/- as cost of raw-material lying at the building site and the claim of damages was concerned, no specific issues were settled by the Trial Court and no specific findings were available on record except that such sum was decreed as compensation for loss or damage caused by breach of contract in terms of section 73 of Contract Act, 1872—Survey of prayer clauses as incorporated in the plaint for the relief of damages, showed that it was somewhat a mix of special and general damages claim but no convincing evidence was adduced to the effect of sustaining any serious financial losses, even no evidence was adduced with regard to the alleged irreparable losses or mental agony—Neither any issue was framed nor at any point of time, the appellant applied for framing any additional issue nor any evidence was led for substantiating the claim of damages (special or general both) or to justify the claim of cost of material allegedly lying at the building site—Appeal was allowed with the consequence that suit of appellant was decreed in the sum of Rs.52,10500/- only. |
| 2022 CLC 1772 KARACHI-HIGH-COURT-SINDH |
NIAZ AHMED VS ZAIN-UL-ABEDIN |
S.73—Suit for damages—Breach of contract—Compensation for failure to discharge obligation resembling those created by contract—Mental agony, presumption of—Scope—Claim of the plaintiffs was that the defendants (appellants) had entered into a contract whereby they had assured to get them performed Hajj against the money, so obtained by the defendants but they failed to arrange Hajj visas—Defendants had never denied the claim of the plaintiffs rather had admitted the claim to such extent with further claim to have paid such amount to a company—Nothing was produced on record that such deposit was permissible as per contract between parties or was with consent of plaintiffs—In absence thereof, such plea could not help the defendants in escaping their liabilities to honour the contract as well as compensation for breaching the same within the meaning of Contract Act, 1872—Defendants had only applied for quota which was never granted to them yet they not only took amount from the people, including plaintiffs in name of ‘getting such persons performed Hajj’—Performing Hajj is normally the greatest desire of a Muslim who, for his life, prays and gathers money for such purpose, therefore, when a person with complete satisfaction of performing Hajj is denied by the contractor (travel agency), the mental shock and agony is inevitable—Defendants being Directors of the company could not escape their liabilities towards the company—Appeal was dismissed. |
| 2022 YLR 1207 Gilgit-Baltistan Chief Court |
KARAKORUM COOPERATIVE BANK VS Mst. SOFIA BEGUM |
S. 42—Contract Act (IX of 1872), S. 73—Suit for declaration and damages—Compensation for loss or damage caused by breach of contract—Scope—Plaintiffs purchased a property from the defendant—Later on, another person filed a suit against defendant for redemption of the property—Suit was decreed throughout—Plaintiffs filed a suit for declaration and sought recovery of latest value of suit property, cost of improvements that they had made on the property and costs of defending the suit filed by said person—Trial Court partially decreed the suit—Validity—Plaintiffs had failed to substantiate the market value of the disputed land, however sale deed was proved as such original sale amount as determined in the year 1986 was rightly decreed—Plaintiffs had also failed to prove the costs of maintenance and improvements as such the claim of plaintiffs upto the extent of renovation charges was baseless—Claim regarding the costs to defend the suit was accepted as per claim since 1991 till 2007 by the Trial Court—Judgment and decree passed by Trial Court was upheld—Appeals were dismissed. |
| 2021 CLD 1027 LAHORE-HIGH-COURT-LAHORE |
ORIX LEASING PAKISTAN LTD. VS MUHAMMAD NOOR DAIRIES |
Ss. 3(2), 7, 9 & 22—Contract Act (IX of 1872), S. 73—Procedure of Banking Court—Suit for recovery—Lease finance for equipment—Default in monthly rental payments to Financial Institution by customer—Recovery of additional lease rental on overdue payments—Scope—Plaintiff Financial Institution impugned order of Banking Court whereby its claim on additional lease payments for overdue payments, as provided for in lease agreement, was disallowed—Validity—When cost of suit and cost of funds had been awarded by Banking Court in harmony with S. 3(2) of the Ordinance, then the same adequately protected interest of Financial Institution by reimbursing and compensating it for obstruction of funds—Any additional compensation such as additional lease rentals for overdue payments would amount to penalizing costumers and a default in lease finance contract could not have consequences of overpayment by customers and undue fiscal gain for Financial Institution—Allowing such payments would be contrary to S. 73 or Contract Act, 1872 as sufferer of breach could recover compensation only for loss or damage which naturally arose in usual course of things from such breach—No illegality therefore existed in impugned order—Appeal was dismissed, in circumstances. |
| 2021 PLD 57 KARACHI-HIGH-COURT-SINDH |
SADAN GENERAL TRADING LLC VS TRADING CORPORATION OF PAKISTAN |
Ss. 14(2), 30 & 33—Contract Act (IX of 1872), Ss. 73 & 74—Objection to award of contract—Loss and compensation, determination of—Performance guarantee—Encashment—Plaintiff company was awarded contract for supply of sugar and for the purpose it submitted performance guarantee to the Trading Corporation of Pakistan—Failure to supply sugar in due course of time—Corporation cancelled the contract and forfeited performance guarantee—Arbitrator rejected the claim of loss suffered by Corporation but awarded compensation to the extent of half of the performance guarantee—Validity—For the purposes of determining reasonable compensation under S.74 of Contract Act, 1872, assessment by Court, whether the party relying on forfeiture clause had suffered loss or not was the only one of the ways to see whether forfeiture was unconscionable or highly penal in nature—Ultimate analysis remained one of unconscionability and the extent of penalty—As to what was unconscionability and what was reasonable compensation, that was a question of fact and the Court or arbitrator had to determine in peculiar facts and circumstances of each case—For what could be seemed reasonable to the Court in one set of circumstances could not be seemed reasonable in another—Compensation could follow under S. 74 of Contract Act, 1872, even if no loss was proved—Even finding of breach of contract was not sufficient to entitle Trade Corporation of Pakistan to forfeit the entire amount—Objections to the award filed by both the parties were dismissed—Award was made rule of the Court. |
| 2021 PLD 57 KARACHI-HIGH-COURT-SINDH |
SADAN GENERAL TRADING LLC VS TRADING CORPORATION OF PAKISTAN |
Ss. 73 & 74—Loss and compensation—Proof—Even if a claimant is unable to prove actual loss / damage under S.73 of Contract Act, 1872, that by itself is not enough to oust compensation under S.74 of Contract Act, 1872. |
| 2021 MLD 1059 KARACHI-HIGH-COURT-SINDH |
PAKISTAN AIRLINE PILOTS ASSOCIATION VS FEDERATION OF PAKISTAN through Secretary for Ministry of Interior, Islamabad |
Ss.39, 72 & 73—Agreement, termination of—Principle—Agreement cannot continue for life time or indefinite period— If a party is unable to perform its part of agreement, then disability of such party itself results into termination of agreement. |
| 2021 PLC(CS) 860 KARACHI-HIGH-COURT-SINDH |
PAKISTAN AIRLINE PILOTS’ ASSOCIATION VS FEDERATION OF PAKISTAN through Secretary for Ministry of Interior, Islamabad |
Ss.39, 72 & 73—Agreement, termination of— Principle—Agreement cannot continue for life time or indefinite period— If a party is unable to perform its part of agreement, then disability of such party itself results into termination of agreement. |
| 2020 MLD 213 KARACHI-HIGH-COURT-SINDH |
ABDUL QADIR VS Mrs. AMEER ZADI |
Ss. 73 & 74—Specific Relief Act (I of 1877) S. 12— Sale of immoveable property— Suit for specific performance of contract to sell immoveable property—Earnest money / deposit—Earnest money / deposit given by vendee to vendors was part of the purchase price when the transaction went through but was forfeited when such transaction fell through by reason of fault or failure of vendee. |
| 2020 MLD 213 KARACHI-HIGH-COURT-SINDH |
ABDUL QADIR VS Mrs. AMEER ZADI |
Ss. 73 & 74—Breach of contract—Consequences—Compensation for loss or damage caused by breach of contract – Award of damages—Principles—In order to succeed in a claim for damages under S. 73 of the Contract Act, 1872, claimant had to prove the same through positive evidence; whereas liquidated damages could only be granted under S. 74 of the Contract Act, 1872 ,when inter alia, an aggrieved party proves default / breach of contract by the other party. |
| 2020 CLC 300 KARACHI-HIGH-COURT-SINDH |
SHAHZAD NABI VS NASEER TURABI |
Ss. 73 & 74 — Specific Relief Act (I of 1877), S. 12—Breach of contract—Consequences — Compensation for loss or damage caused by breach of contract — Compensation for breach of contract where penalty was stipulated for—Contract for sale of immoveable property—Earnest money, forfeiture of Discretion of Trial Court —- Scope— Advance or earnest money could be forfeited if a purchaser backtracked from his / her contractual commitments — Parties may determine expected losses and agree for an amount to be paid in breach of contract and earnest money was part of purchase price when transaction went forward, and same was forfeited when a transaction fell though by reason of fault and failure of vendee —- Discretion, however lay with the Court to interpret and implement a forfeiture clause in an agreement — Court, if forms an opinion, that amount mentioned in an agreement as liquidated damages for breach, penalty or forfeiture; was unreasonable, then it was not necessary to implement such clause — Court was not to permit a party to keep the entire amount if it was exorbitantly high and unreasonably harsh. |
| 2016 MLD 223 PESHAWAR-HIGH-COURT |
GOVERNMENT OF KHYBER PAKHTUNKHWA VS Syed JAFFAR SHAH |
S. 73—Suit for recovery of damages caused by breach of contract—Damages, determination of—Scope—General damages for mental torture, agony, defamation and financial loss were to be assessed following the “rule of thumb” and said exercise would fall in the discretionary jurisdiction of the court which had to be decided in the facts and circumstances of each case—Party claiming damages had firstly to plead and then to prove by sufficient, trustworthy, independent and cogent evidence that the concluded agreement existed between the parties and other party had committed breach of contract/agreement and quantum of damages had to be proved—Plaintiff, in the present case, had failed to produce any evidence to show that in fact he suffered any loss due to breach of contract—Solitary statement of plaintiff was not sufficient to decree the colossal suit amount as plaintiff had not stated anything with regard to damages—Impugned judgment and decree passed by the Trial Court were set aside and suit was dismissed—Appeal was accepted in circumstances. |
| 2016 CLD 1833 ISLAMABAD |
ATLAS CABLES (PVT.) LIMITED VS ISLAMABAD ELECTRIC SUPPLY COMPANY LIMITED |
Ss. 42 & 54—Contract Act (IX of 1872), Ss. 73, 74 & 126—Suit for declaration and injunction—Performance bonds, encashment of—Liquidated damages and penalty—Recovery—Plaintiff company entered into a contract of supply and the Bank issued performance bonds in support of plaintiff—Due to change in market situation, plaintiff failed to supply goods as per contract, therefore, defendant sought encashment of performance bonds and also sought recovery of damages as well as liquidated damages—Suit and appeal filed by plaintiff company were concurrently dismissed by Trial Court and Lower Appellate Court—Validity—Damages had to be first pleaded and thereafter proved by leading trustworthy and cogent evidence—Damages required evidence regarding details of losses actually suffered and liquidated damages, as a rule, required positive evidence to show actual loss suffered by party claiming the damages—Even fixed amount stipulated in contract as liquidated damages could not be recovered if quantum of actual loss suffered was not proved through sufficient evidence—Defendant did not plead or prove any loss caused by breach of contract by plaintiff, therefore, it could not encash performance bond which was furnished to compensate defendant for the losses it was to suffer on account of such breach— Defendant was not entitled to invoke provisions of performance bond or encash the same unless it was established through adjudicatory process that plaintiff committed default of the provisions of purchase orders and as a result of the default defendant suffered damages—Once such default on the part of plaintiff and loss suffered by defendant as a result of such default was proved, performance bonds could have been encashed to the extent of such loss—High Court set aside judgments and decrees passed by two courts below and suit was partially decreed in favour of plaintiff—Second appeal was allowed accordingly. |
| 2016 CLC 1677 ISLAMABAD |
ATLAS CABLES (PVT.) LIMITED VS ISLAMABAD ELECTRIC SUPPLY COMPANY LIMITED |
Ss. 42 & 54—Contract Act (IX of 1872), Ss. 73, 74 & 126—Suit for declaration and injunction—Performance bonds, encashment of—Liquidated damages and penalty—Recovery—Plaintiff company entered into a contract of supply and the Bank issued performance bonds in support of plaintiff—Due to change in market situation, plaintiff failed to supply goods as per contract, therefore, defendant sought encashment of performance bonds and also sought recovery of damages as well as liquidated damages—Suit and appeal filed by plaintiff company were concurrently dismissed by Trial Court and Lower Appellate Court—Validity—Damages had to be first pleaded and thereafter proved by leading trustworthy and cogent evidence—Damages required evidence regarding details of losses actually suffered and liquidated damages, as a rule, required positive evidence to show actual loss suffered by party claiming the damages—Even fixed amount stipulated in contract as liquidated damages could not be recovered if quantum of actual loss suffered was not proved through sufficient evidence—Defendant did not plead or prove any loss caused by breach of contract by plaintiff, therefore, it could not encash performance bond which was furnished to compensate defendant for the losses it was to suffer on account of such breach—Defendant was not entitled to invoke provisions of performance bond or encash the same unless it was established through adjudicatory process that plaintiff committed default of the provisions of purchase orders and as a result of the default defendant suffered damages—Once such default on the part of plaintiff and loss suffered by defendant as a result of such default was proved, performance bonds could have been encashed to the extent of such loss—High Court set aside judgments and decrees passed by two Courts below and suit was partially decreed in favour of plaintiff—Second appeal was allowed accordingly. |
| 2015 CLD 1439 LAHORE-HIGH-COURT-LAHORE |
MUHAMMAD FAROOQ AZAM VS BANK AL-FALAH LIMITED |
Ss. 9, 10 & 22—Contract Act (IX of 1872), Ss. 73 & 74—Banking Companies Ordinance (LVII of 1962), Ss. 3A, 25 & 41—State Bank of Pakistan BCD Circular No.13 of 1984 dated June 20, 1984—State Bank of Pakistan BCD Circular No.32 of 1984 dated November 26, 1984— Mark-up beyond original contractual period/additional sum/penalty for delay in payment by customer— Principles—Car/automobile finance facility— Plaintiff filed suit seeking redemption/clearance of vehicle from defendant Bank, on the ground that finance facility availed by plaintiff for the said vehicle was re-paid completely but defendant Bank refused to issue the NOC—Suit was dismissed by Banking Court on the ground that plaintiff was under contractual obligation to pay late payment charges—Held, that with introduction of State Bank of Pakistan BCD Circular Nos.13 of 1984 dated June 20, 1984 and BCD Circular No.32 of 1984 dated November 26, 1984, all Financial Institutions in Pakistan had been prohibited from charging any additional sum on account of delay caused by the customer in re-payment of its obligation created under an agreement based on mark-up and such obligation under a mark-up based agreement, once fixed could not be enhanced, so as to entitle a Financial Institutions charge any sum over and above original contractual amount—Mark-up beyond the original contractual period or any late payment charged, claimed by the Financial Institution was in violation of the restrictions contained in the said State Bank of Pakistan Circulars and any clause incorporated in a finance agreement for charging any additional mark-up or penalty would violate the said Circulars and was therefore, void ab initio—Penalty or damages at fixed rate was opposed to the provisions contained in Ss.73 & 74 of the Contract Act, 1872 and general principles for granting compensation when beneficiary alleged breach of contract were regulated by Ss.73 & 74 of the Contract Act, 1872 and without proving the actual loan, even a fixed amount, if stipulated for liquidated damages, did not become automatically payable—If a clause existed in the agreement for finance regarding late payment charges and penalties, the same could be disregarded by the courts being against the Islamic system of finance, and for being unconscionable and against the law—Order and decree of Banking Court was set aside and suit of plaintiff was decreed and defendant Bank was directed not to withhold issuance of clearance certificate in favour of plaintiff—Appeal was allowed, accordingly. |
| 2015 CLD 1439 LAHORE-HIGH-COURT-LAHORE |
MUHAMMAD FAROOQ AZAM VS BANK AL-FALAH LIMITED |
Ss. 73 & 74—Breach of contract—Compensation—Scope—General principles for granting compensation when beneficiary alleged breach of contract were regulated by Ss. 73 & 74 of the Contract Act, 1872 and without proving the actual loan even a fixed amount, stipulated as for liquidated damages, did not become automatically payable. |
| 2015 CLD 1598 KARACHI-HIGH-COURT-SINDH |
NATIONAL BANK OF PAKISTAN VS CAST-N-LINKS PRODUCTS LTD |
S. 9—Contract Act (IX of 1872), S. 73—Suit for recovery of loan by Bank—Penal/additional interest, charge of—Scope—No ‘interest’ or ‘penal interest’ could be charged on the amount of ‘commitment charges’ which would amount to compounding the interest—Penal interest in the loan agreement could be referred as ‘additional interest’—‘Penal’/’additional interest’ could not be recovered as it would amount to “penalty”—Interest in the case of loan on the ‘judgment debtor’ was to be granted from the institution of suit till payment. |
| 2014 CLD 519 KARACHI-HIGH-COURT-SINDH |
PAK PETROCHEMICAL INDUSTRIES PVT. LTD. VS Syed HAMID ALI |
S. 73—Suit for damages for breach of contract—Absence of defence and evidence in rebuttal, of plaintiff’s claim—Details of damages missing in plaint, affidavit-in-ex parte-proof and documentary evidence—Validity—Damages could not be granted merely on basis of routine assertions—Fixed amount of damages could not be granted without proving quantum of actual losses through cogent evidence—Party claiming damages was legally obliged firstly to plead and then lead sufficient, truthful and positive evidence in proof thereof—Heavy burden was on plaintiff to prove damages despite absence of defence/evidence—Plaintiff had failed to discharge such burden— Suit was dismissed in circumstances. |
| 2014 CLC 837 KARACHI-HIGH-COURT-SINDH |
PAK PETROCHEMICAL INDUSTRIES PVT. LTD. VS Syed HAMID ALI |
S. 73—Suit for damages for breach of contract—Absence of defence and evidence in rebuttal, of plaintiff’s claim—Details of damages missing in plaint, affidavit-in-ex parte proof and documentary evidence—Validity—Damages could not be granted merely on basis of routine assertions—Fixed amount of damages could not be granted without proving quantum of actual losses through cogent evidence—Party claiming damages was legally obliged firstly to plead and then lead sufficient, truthful and positive evidence in proof thereof—Heavy burden was on plaintiff to prove damages despite absence of defence/evidence—Plaintiff had failed to discharge such burden—Suit was dismissed in circumstances. |
| 2013 CLD 66 LAHORE-HIGH-COURT-LAHORE |
NAVEED MERCHANT VS SAFDAR GONDAL |
S. 73—Civil Procedure Code (V of 1908), O. I, R. 10—Breach of contract— Suit for damages and compensation—Necessary or proper party—Defendant’s application for striking out his name as a defendant in the suit was dismissed by Trial Court—Validity—Plaintiff had filed suit on the basis of an oral agreement between him and the other defendant and no specific role had been mentioned in the plaint against the defendant—Main grievance of the plaintiff was against the defendant Company and its officials whereas the defendant was only an estate advisor for said Company—Defendant was not a beneficiary of the alleged oral agreement—Compensation for breach of contract could be claimed from a party which had breached the terms of the agreement—Person who was not a party to contract was neither necessary nor proper party in a suit for damages—High Court set aside order of Trial Court and allowed the defendant’s application for striking out his name as defendant in the suit—Revision was allowed, accordingly. |
| 2013 PLD 290 KARACHI-HIGH-COURT-SINDH |
ARABIAN SEA ENTERPRISES LIMITED VS ABID AMIN BHATTI |
S. 73—Suit for damages—Breach of contract—Passing of decree on doctrine of “unjust enrichment” (no one can be permitted to derive benefit from an undue advantage to become unjustifiably enrich at expense of another)—Scope—Plaintiff was bound to prove that defendant was enriched by receipt of a benefit; that such enrichment was at plaintiff’s expense; that such enrichment and/or retention of benefit was unjust; and that defendant could legally be compelled to compensate plaintiff—Mere such assertions would not entitle plaintiff for damages without discharging his such legal obligations to prove the same. |
| 2013 PLD 290 KARACHI-HIGH-COURT-SINDH |
ARABIAN SEA ENTERPRISES LIMITED VS ABID AMIN BHATTI |
S. 73—Civil Procedure Code (V of 1908), S.9—Arbitration Act (X of 1940), Ss.20 & 34—Suit for recovery of damages for breach of contract—Agreement containing arbitration clause—Jurisdiction of civil court to entertain such suit—Scope—Assertions made in plaint would be deemed and accepted as correct for assumption of jurisdiction by civil court—Mere presence of arbitration clause would not bar jurisdiction of civil court, when subject matter in dispute fell and cause of action had arisen within its jurisdiction, particularly when defendant had failed and/or avoided to appear and file application under S.34 of Arbitration Act, 1940 for staying proceedings in suit—Illustration. |
| 2013 PLD 290 KARACHI-HIGH-COURT-SINDH |
ARABIAN SEA ENTERPRISES LIMITED VS ABID AMIN BHATTI |
S. 73—Suit for damages—Burden of proof—Heavy burden would lie on plaintiff to prove damages even in absence of defence/evidence of defendant. |
| 2013 PLD 290 KARACHI-HIGH-COURT-SINDH |
ARABIAN SEA ENTERPRISES LIMITED VS ABID AMIN BHATTI |
S. 73—Suit for damages—Proof—Failure of plaintiff to give details in respect of damages and lead sufficient evidence in support thereof—Effect—Damages could not be granted merely on basis of plaintiff’s ipse dixit routine assertions—Plaintiff would be obliged to specifically plead regarding actual losses/damages suffered with details and then to lead sufficient, truthworthy and positive evidence—Plaintiff even in absence of any defence/evidence in rebuttal would not be entitled for claimed damages without discharging onus of proof. |
| 2013 PTD 875 ISLAMABAD |
OCEAN PAKISTAN LTD. VS FEDERATION OF PAKISTAN |
Ss.122(5-A), 122(9) & 227(i)—Civil Procedure Code (V of 1908), O.VII, R.11(d) & O.XXXIX, Rr.1, 2—Contract Act (IX of 1872), S.73—Specific Relief Act (I of 1877), Ss.42 & 54—Suit for declaration, permanent injunction, damages and set-off—Transfer of working interest and rights in petroleum concession agreement by plaintiff—Show-cause notice issued under S. 122(9) read with S.122(5-A) of Income Tax Ordinance, 2001 demanding from plaintiff income tax payable on such transfer—Plaintiff’s plea was that new owner of such interest was liable for due taxes and such transfer of interest for being intangible was not taxable—Application by revenue-authority under O.VII, R. 11, C.P.C., seeking rejection of plaint for being barred by law—Validity—High Court had already dismissed plaintiff’s constitutional petition challenging such notice/demand by observing that same was not mala fide, without jurisdiction or void—Supreme Court had upheld such judgment of High Court—Plaintiff’s second constitutional petition for suspending such notice/demand had already been dismissed by High Court—Plaintiff had failed to establish before High Court mala fides or want of jurisdiction on part of revenue-authority in issuing such notice/demand—Plaintiff’s appeal against such notice/demand was still pending before Income Tax Appellate Authority, and against its decision he could avail remedies under Income Tax Ordinance, 2001—Question as to whether such working interest was immoveable property or intangible asset, would be decided by Inland Revenue Authorities—High Court rejected plaint in circumstances. |
| 2013 CLC 1036 ISLAMABAD |
OCEAN PAKISTAN LTD. VS FEDERATION OF PAKISTAN |
Ss. 42 & 54—Contract Act (IX of 1872), S.73—Civil Procedure Code (V of 1908), O.VII, R.11(d) & O.XXXIX, Rr.1, 2—Income Tax Ordinance (XLIX of 2001), Ss.122(5-A), 122(9) & 227(i)—Suit for declaration, permanent injunction, damages and set-off—Transfer of working interest and rights in petroleum concession agreement by plaintiff—Show-cause notice issued under S. 122(9) read with S.122(5-A) of Income Tax Ordinance, 2001 demanding from plaintiff income tax payable on such transfer—Plaintiff’s plea was that new owner of such interest was liable for due taxes and such transfer of interest for being intangible was not taxable—Application by revenue-authority under O.VII, R. 11, C.P.C., seeking rejection of plaint for being barred by law—Validity—High Court had already dismissed plaintiff’s constitutional petition challenging such notice/demand by observing that same was not mala fide, without jurisdiction or void—Supreme Court had upheld such judgment of High Court—Plaintiff’s second constitutional petition for suspending such notice/demand had already been dismissed by High Court—Plaintiff had failed to establish before High Court mala fides or want of jurisdiction on part of revenue-authority in issuing such notice/demand—Plaintiff’s appeal against such notice/demand was still pending before Income Tax Appellate Authority, and against its decision he could avail remedies under Income Tax Ordinance, 2001—Question as to whether such working interest was immovable property or intangible asset, would be decided by Inland Revenue Authorities—High Court rejected plaint in circumstances. |
| 2012 CLD 458 LAHORE-HIGH-COURT-LAHORE |
MUHAMMAD NADEEM VS ADDITIONAL DISTRICT JUDGE, BHAKKAR |
Ss. 20, 30, 34 & 39—Contract Act (IX of 1872), S.73—Specific Relief Act (I of 1877), Ss. 42 & 54—Constitution of Pakistan, Art.199—Constitutional petition—Suit for declaration and permanent injunction—Arbitration proceedings— Award, objection to— Damages—Entitlement—Plaintiff who was distributor of defendant company his distributorship having been terminated by defendant, he filed suit for declaration and permanent injunction—Defendant, during pendency of suit, filed an application under S.34 of the Arbitration Act, 1940 for settlement of dispute through arbitration as provided in one of the clauses of the agreement—With consent of the parties, Trial Court referred the matter to arbitrator—Both the parties made a joint statement before the arbitrator that they would abide by the award made by the arbitrator—After hearing the parties, the arbitrator held the plaintiff entitled to get amount Rs.16,49,033 as damages—No objection was raised by defendant before the arbitrator with regard to scope of reference or upon the jurisdiction of the arbitrator—Parties raised no objection on the credibility or jurisdiction of the arbitrator—When arbitrator award was made and announced, the defendant company, seeing the award unfavourable to it, took certain objections with regard to scope of reference for determination of the dispute—Validity—Defendant at that stage could not be allowed to point out any lacuna, whatsoever in the order of reference or the jurisdiction of the arbitrator—When the plaintiff submitted his claim for damages before the arbitrator who also framed issues on that point, ample opportunity was available to the defendant to take objections that neither scope of reference nor agreement allowed the award of damages, but defendant completely failed to do so—Under S.73 of the Contract Act, 1872, damages could be claimed even if there was no clause in the agreement—Award of the arbitrator was in accordance with law and same could not be set aside—Courts below were not justified in law while setting aside the award—Constitutional petition filed by the plaintiff was allowed as prayed for and impugned judgments passed by courts below were set aside, in circumstances. |
| 2012 MLD 1424 LAHORE-HIGH-COURT-LAHORE |
NAVEED MERCHANT VS SAFDAR GONDAL |
O. I, R. 10—Contract Act (IX of 1872), S.73—Breach of contract—Suit for damages and compensation—Necessary or proper party—Defendant’s application for striking out his name as a defendant in the suit was dismissed by Trial Court—Validity—-Plaintiff had filed suit on the basis of an oral agreement between him and the other defendant and no specific role had been mentioned in the plaint against the defendant—Main grievance of the plaintiff was against the defendant Company and its officials whereas the defendant was only an estate advisor for said Company—Defendant was not a beneficiary of the alleged oral agreement—Compensation for breach of contract could be claimed from a party which had breached the terms of the agreement—Person who was not a party to contract was neither necessary nor proper party in a suit for damages—High Court set aside order of Trial Court and allowed the defendant’s application for striking out his name as defendant in the suit—Revision was allowed, accordingly. |
| 2012 CLC 441 LAHORE-HIGH-COURT-LAHORE |
MUHAMMAD NADEEM VS ADDITIONAL DISTRICT JUDGE, BHAKKAR |
Ss. 42 & 54—Arbitration Act (X of 1940), Ss.20, 30, 34 & 39—-Contract Act (IX of 1872), S.73—Constitution of Pakistan, Art.199—Constitutional petition— Suit for declaration and permanent injunction— Arbitration proceedings— Award, objection to— Damages—Entitlement —Plaintiff who was distributor of defendant-company, his distributorship having been terminated by defendant, he filed suit for declaration and permanent injunction—Defendant, during pendency of suit, filed an application under S.34 of the Arbitration Act, 1940 for settlement of dispute through arbitration as provided in one of the clauses of the agreement—With consent of the parties, Trial Court referred the matter to arbitrator—Both the parties made a joint statement before the arbitrator that they would abide by the award made by the arbitrator—After hearing the parties, the arbitrator held the plaintiff entitled to get amount of Rs.16,49,033 as damages—No objection was raised by defendant before the arbitrator with regard to scope of reference or upon the jurisdiction of the arbitrator—Parties raised no objection on the credibility or jurisdiction of the arbitrator—When arbitrator award was made and announced, the defendant-company, seeing the award unfavourable to it, took certain objections with regard to scope of reference for determination of the dispute—Validity—Defendant, at that stage could not be allowed to point out any lacuna, whatsoever in the order of reference or the jurisdiction of the arbitrator—When the plaintiff submitted his claim for damages before the arbitrator who also framed issues on that point, ample opportunity was available to the defendant to take objections that neither scope of reference nor agreement allowed the award of damages, but defendant completely failed to do so—Under S.73 of the Contract Act, 1872, damages could be claimed even if there was no clause in the agreement—Award of the arbitrator was in accordance with law and same could not be set aside—Courts below were not justified in law while setting aside the award—Constitutional petition filed by the plaintiff was allowed and impugned judgments passed by courts below were set aside, in circumstances. |
| 2011 SCMR 1287 SUPREME-COURT |
MUHAMMAD SHARIF SANDHU VS DISTRICT ACCOUNTS OFFICER |
S. 73—Damages for breach of contract, calculation of—Criteria—Normally date on which contract had to be performed would be relevant date of breach of contract. |
| 2011 PLD 282 SUPREME-COURT |
DAOUD SHAMI VS EMIRATES AIRLINES |
S. 73—Carriage by Air (International Convention) Act (IX of 1966), First Sched. Chap.II, R.3—Warsaw Convention (1929), Art.17—Airline and passenger—Breach of contract—Award of damages—Essential principles. |
| 2010 SCMR 829 SUPREME-COURT |
KAMRAN CONSTRUCTION (PVT.) LTD. VS NAZIR TALIB |
S. 73—Specific Relief Act (I of 1877), Ss. 8 & 12—Suit for specific performance of sale agreement, possession and damages—Sale of residential flats by defendant—Booking of one flat by plaintiff and payment of its price—Non-completion of flat by defendant within stipulated period—Claim of plaintiff for specific performance of sale agreement, delivery of possession of flat and monthly rent Rs. 7000 as damages till completion of flat and its delivery by defendant—Trial Court passed decree as prayed for by plaintiff—Defendant’s appeal challenging validity of such decree to extent of awarding damages affirmed by Appellate Court—Validity—Plaintiff had not produced any independent evidence except his own affidavit to prove that defendant had committed breach of contract, which entitled plaintiff for damages and to what extent—Terms and conditions attached with allotment application did not find mention that in case of non-completion of flat or non-compliance of terms and conditions, plaintiff would be entitled to claim damages, and if so at what rate—According to such terms and conditions, project was expected to be completed within 36 months, but its progress would depend upon flow of instalments and unforeseen circumstances etc.—Such terms and conditions did not provide any compensation or measure of damages—Plait6niff’s application for allotment of flat was dated 3-7-1987, while advertisements relied upon by him were dated 17-6-1990 & 18-6-1990, thus, undertakings/ offers/commitments made therein would not apply retrospectively to preceding agreement executed between parties—Parties would be governed only by terms and conditions attached with plaintiff’s application and signed by parties—Assurances and guarantees given in such subsequent advertisements were not part of agreement with plaintiff—Supreme Court set aside impugned decree to extent of awarding damages in shape of such monthly rent at rate of Rs. 7000 and future monthly rent for being not sustainable in law. |
| 2010 SCMR 829 SUPREME-COURT |
KAMRAN CONSTRUCTION (PVT.) LTD. VS NAZIR TALIB |
S. 73—Suit for recovery of damages caused by breach of contract—Proof—Party claiming damages must establish contract, breach thereof and extent of damages—Burden would lie on plaintiff, who without discharging same could not succeed—Principles. |
| 2010 CLC 1196 LAHORE-HIGH-COURT-LAHORE |
MUHAMMAD HANIF VS RAMZAN BIBI |
Ss. 12 & 19—Contract Act (IX of 1872), S.73—Civil Procedure Code (V of 1908), O.XVII, R.3—Suit for specific performance of agreement to sell and recovery of damages—Trial Court closed defendant’s right to produce evidence, decreed the suit for specific performance but dismissed the claim of damages—Appeal was dismissed by High Court for being time-barred—Plaintiff contended that defendant having failed to execute registered sale-deed by revoking general power of attorney in favour of his nominee, entrusted with execution of registered sale-deed, was liable to pay damages eleven times the sale price of suit-land as per penal clause of the agreement—Defendant controverted plaintiff’s averment maintaining that both specific performance and penalty could not be granted to plaintiff—Validity—Plaintiff was entitled to compensation under S.73 of Contract Act, 1872 if he established loss caused by non fulfilment of contractual obligation by vendee of the agreement to sell but no such loss was proved to have occurred by the plaintiff during trial—In order to seek compensation for the loss caused by non-performance of the contract, plaintiff had to serve a notice upon the vendor and raise a demand of compensation for breach of the agreement but no such notice was, admittedly, served by plaintiff—Plaintiff could either seek specific performance of the agreement or enforcement of penalty clause, if any, incorporated in the agreement—Damages were claimed by plaintiff on the ground of cancellation of power of attorney in favour of his nominee but the same having been cancelled only after three years, since the execution of the agreement, could not be termed a violation of the agreement leading to enforcement of penalty clause—Cancellation of power of attorney, by itself; did not constitute refusal to perform agreement to sell—Plaintiff could not prove any specific monetary loss equivalent to the amount claimed in the plaint—Impugned judgment and decree of Trial Court did not suffer from any illegality—Appeal was dismissed in circumstances. |
| 2010 CLC 706 LAHORE-HIGH-COURT-LAHORE |
Qari MUHAMMAD HANIF VS IHSAN ULLAH KHAN |
S. 12—Contract Act (IX of 1872), Ss.2, 73 & 74—Suit for specific performance of contract—Compensation for breach of contract—Defendant executed an agreement in favour of plaintiff for payment of amount of consideration of land in question—Parties had agreed that amount would be paid till specified date and in ease of failure of defendant to pay amount till specified date, defendant would pay the double amount—Case of the plaintiff was that as terms of the agreement having not been complied with by the defendant, he was bound to pay double amount—Plea of the defendant was that he being working under the command of the plaintiff, had been subjected to undue influence and instrument/agreement was signed under coercion—Plaintiff had contended that he was never acting as a free agent when he put signature on said document—Validity—No signatures appeared on the instrument of the plaintiff to accept any reciprocal liability, if there was any—Provisions of S.74 of Contract Act, 1872 dealt with only the rights to receive from the party who had broken a contract, a reasonable compensation and in absence of any contract, mere fact that defendant did not make payment of the amount, within the time limit fixed by the suitor, would not entitle him to attract the provisions of penal clause and claim the penalty—Penalty to claim double amount in fact, was not enforceable at law–Court was bound to make proper assessment as to what was the nature of the contract and contents of the deal arrived at between the parties and what was the loss occasioned—Courts below had not taken into consideration that aspect and recorded their findings contrary to material available on the record—Section 74 of Contract Act, 1872 boldly cuts the most troublesome knot in the Common Law doctrine of damages—As contract had not been signed by the plaintiff, in absence of a reciprocal liability, said contract did not come within the definition of concluded contract as the vital ingredients embodied in S.2 of the Contract Act, 1872 were missing—Penal clause kept in instrument being not enforceable at law, only stipulated amount outstanding against the defendant, was bound to make payment of same in a recovery suit but not its double amount. |
| 2010 CLC 1843 KARACHI-HIGH-COURT-SINDH |
PAKISTAN STATE OIL COMPANY LIMITED VS FEDERATION OF PAKISTAN, MINISTRY OF WORKS, through Secretary |
S.73—Specific Relief Act (1 of 1877), S.21—Compensation for loss or damage caused by breach of contract—Scope—Principal. |
| 2009 SCMR 276 SUPREME-COURT |
AZIZULLAH SHEIKH VS STANDARD CHARTERED BANK LTD |
S. 73—Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.9(1)—Suit for recovery of damages with interest—Breach of contract—Damages, claim for—Party claiming damages had to firstly plead and then prove by sufficient, trustworthy, independent and. cogent evidence that the concluded agreement existed between the parties, the other party committed breach of contract, such breach entitled the first party to damages and the foremost factor was quantum of damages—Principles for ascertaining the quantum of general and special damages stated. |
| 2009 SCMR 276 SUPREME-COURT |
AZIZULLAH SHEIKH VS STANDARD CHARTERED BANK LTD |
S. 73—Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.9(1)—Suit for recovery of damages with interest—Breach of contract—Damages, claim for—Plaintiffs failed to produce any evidence to show that in fact they suffered any loss due to breach of contract—Solitary statement of one plaintiff was not sufficient to decree the colossal suit amount as plaintiffs’ witness did not state anything about damages—Plaintiffs through his failure to produce evidence totally failed to prove that due to breach of contract they were in fact entitled to damages and to what extent, which were sine qua non for the grant of damages under S.73, Contract Act, 1872—Held, plaintiffs, in circumstances, had not proved that they suffered any loss and also failed to prove, through production of evidence on record, that they were entitled for decree of the total amount claimed in the suit. |
