PLJ 2014 Karachi 102
MEDIA MAX (PVT.)
LTD., KARACHI through Chief
Executive--Plaintiff
versus
ARY
COMMUNICATION (PVT.) LTD., KARACHI through Chief
Executive and another--Defendants
Suits Nos.115,
124 and 165 of 2012, decided on 26.6.2013.
----O. XXXIX,
Rr. 1, 2 & 4--Stay order--Powers of Court to amend or set aside such
order--Scope--Court has ample powers to discharge, vary or set aside the
injunction order and even where subsequent to passing of the injunctive order,
some development took place and new circumstances emerged requiring
consideration, Court might in appropriate cases vary, modify or even discharge
the injunction order. [P. 121] A
2004 MLD 1820;
1988 CLC 230 and 1982 CLC 2242 ref.
----Illustrations
attached with a section of statute--Scope--Illustrations would not be read as
extending the meaning of a section, they should also not be read as restricting
its operation, especially so when the effect would be to curtail a right which
the plain words of the section would confer. [Pp. 121 & 122] B
43 IA 256;
(1916) 2 AC 575 and AIR 1938 PC 67 rel.
----S.
202--Agent's authority coupled with an interest in subject matter of agency,
determination of--Essential factors--Where an agreement is entered into on a
sufficient consideration whereby an authority is given for the purpose of
securing some benefit to donee of such authority, such an authority is
irrevocable--Interest of the agent in the subject of the agency may be inferred
from the language of the document creating the agency, and from the course of
dealings between the parties--Interest which an agent has in effecting a sale
and the prospect of remuneration to arise therefrom do not constitute such an
interest as would prevent the termination of the agency--Prospect of earning a
commission is not an interest for that purpose--Where the agent has only to get
commission after the accrual of the net collection, he cannot prima facie be
said to have any interest--Where the authority is given for the purpose of
being a security or as a part of security, and not to cases where the authority
is given independently and the interest of the donee of the authority arises
afterwards and incidentally only--As for instance, the goods are consigned to a
factor for sale--Afterwards the factor makes advances--This is not an authority
coupled with an interest, but an independent authority and interest
subsequently arising. [Pp. 122 &
123] C
PLD 2010 Kar.
213; 2007 YLR 590; PLD 2009 Kar. 288; PLD 2007 Kar. 278; PLD 2011 Kar. 362;
2006 MLD 367; PLD 1986 Kar. 234; 2004 SCMR 1092; PLD 2004 SC 860; 2005 CLD
1805; 2005 SCMR 1408; PLD 1989 Kar. 499 and 1999 YLR 1529 ref.
----Charge
of--Duty of Court--Issue of contempt of Court is a serious issue, which is
always a matter between the Court and alleged contemnor, but before framing
issue or charge, it is incumbent upon Court to first examine the matter whether
any prima facie case of contempt is made or not, which warrants on merits
issuance of show cause or framing of issue or charge. [P. 125] D
----O. XL, R.
I--Receiver of property, appointment of--Object of such appointment and duty of
Court--Object and purpose of the appointment of receiver may generally be
stated to be the preservation of the subject matter of the litigation pending
judicial determination of the rights of the parties--Appointment of receiver is
an act of Court and made in the interest of justice--Order is discretionary and
the discretion must be exercised in accordance with the principles on which
judicial discretion is exercised--Terms "just and convenient" used in
O.XL, R.I, C.P.C. does not mean arbitrary whim or pleasure of the
Court--Appointment of receiver deprives a person from enjoyment of the
property, therefore, it has been regarded as harsh remedy. [P. 126] E
----O. XL, R. I
& O. XXXIX, Rr, 1, 2--"Appointment of Receiver" and
"granting of temporary injunction" in a
case--Distinction--Distinction between a case in which temporary injunction may
be granted and a case in which a Receiver may be appointed is that while in
either case it must be shown that property should be preserved from waste and
alienation--If it be shown that plaintiff in the suit has a fair question to
raise as to the existence of the right alleged, while in the latter case a good
prima facie title to the property over which the Receiver is sought to be
appointed as to be made out--Receiver cannot be appointed unless there is some
substantial background for such interference that the property in suit
dissipated or other irreparable mischief may be done, unless the Court appoints
a Receiver. [P. 126] F
----O. VII, R.
11(d)--Rejection of plaint for being barred by law--Material essential to be
considered by Court--Only contents of the plaint may be looked into without any
extraneous consideration, and even the Court may not see the written statement/affidavits,
filed by the defendants--Court has to confine itself only to averments made in
the plaint and has to take the contents thereof to be true and cannot go beyond
the same--Court finds the plaint to be barred by law, the Court can reject the
plaint, but cannot do so by resolving the contested facts--Relief claimed by
the plaintiff was barred under any provision of law or a suit on. the basis of
it was incompetent. [P.
128] G
----O.VII, R.
11(d)--Rejection of plaint--Court cannot take into consideration the pleas
raised by defendants in the suit in his defence as at that the pleas raised by
defendants are only contentions in the proceedings unsupported by any evidence
on record. [P. 129] I
2010 CLC 1603; 2010
CLC 1968 and 2011 CLC 88 rel.
----O. VII, R.
11(a)--Rejection of plaint for non-disclosing cause of action--Scope--Facts
constituting a cause of action must co-exist, thus, any of such facts missing
in plaint would render suit as incompetent--Right to seek relief on basis of
alleged cause of action must be in existence at time of institution, of
suit--Lack or weakness of proof would not justify rejection of plaint for want
of cause of action--Words "cause of action" means bundle of facts
" which if traversed, a suitor claiming relief is required to prove for
obtaining judgment--Nevertheless, it does not mean that even one such fact, a
constituent of cause of action is in existence, the claim can succeed--Totality
of the facts must co-exist, and if anything is wanting the claim would become
incompetent--Not only should the party seeking relief have a cause of action,
when the transaction or the alleged act is done, but also at the time of the
institution of the claim--A suitor is required to show that not only a right
has been infringed in a manner to entitle him to a relief, but also that when
he approached the Court, the right to seek the relief was in existence--Lack of
proof or weakness of proof in circumstances of the case did not furnish
justification for coming to conclusion that there was no cause of action shown
in the plaint. [P. 129] H
----S. 2(2), O.
XII, R.6, O. XX, Rr.12 to 16, 18 & O.XXXIV, Rr.2 to 5, 7 &
8--"Preliminary decree", "final decree" and
"judgment/decree on basis of admissions in pleadings"--Distinction--A
preliminary decree declares the rights and obligations of the parties leaving
further matters to be determined in subsequent proceedings--Such decrees are
normally determinative of controversies of a fundamental nature--C.P.C.
provides and vests in the Court to pass preliminary decrees under Order XX,
Rules 12 to 16 and 18 and under Order XXXIV, Rules 2 to 5 and 7 and 8--A
preliminary decree and a final decree are both distinct and independent
entities--According to the Explanation attached to section 2(2), C.P.C, a
decree is preliminary when further proceedings have to be taken in the suit and
the suit has not been completely disposed of--Party may apply for a judgment on
admission without waiting for the determination of any other question between
the parties and decree can be drawn up in respect of the portion of the
admitted claim. [P. 130] J
----O.XII, R.
12--Passing of judgment on basis of admissions in pleadings--Duty of
Court--Order XII, Rule 6, C.P.C. enables a Court upon application by either
party to dispose of the suit with regard to which there is no dispute between
the parties--Entire plaint or written statement is required to be read for the
purposes of finding out the nature of admission--Admission must be clear,
specific, unambiguous, definite and categorical and Court is bound to examine
the plaint and written statement with diligent application of mind to ascertain
the nature of admission. [Pp.
130 & 131] K
PLD 2004 SC 860;
2005 CLD 1805; 2005 SCMR 1408; PLD 1989 Kar. 499; 1999 YLR 1529 and 2012 CLD
1380 ref.
2008 CLC 645;
2007 SCMR 433; PLD 2003 Kar. 253; 1996 SCMR 696; 2013 CLC 535 and 2007 SCMR 1933
rel.
M/s. Abid S.
Zuberi and Haseeb Jamali, Advocates for Plaintiff (in Suits Nos.
115 and 165 of 2012 and for the Defendant in Suits No. 124 of 2012).
M/s. Anwar
Mansoor Khan, Asim Mansoor and Muhammad Ali Talpur, Advocates for
Defendants (in Suits Nos. 115 and 165 of 2012 and for Plaintiff (in Suit No.
124 of 2012).
Dates of
hearing: 2, 23.1, 12.2 & 15.3.2013.
Order
This common
order will dispose of various applications filed in the three suits. The gist
of plaint and applications are as follows:--
1. This suit has been filed by Media Max
(Pvt.) Ltd. against ARY Communication Ltd. and ARY Digital, FZ LLC for
declaration and permanent injunctions. The crux of the matter is that on
1-7-2001, the Defendant No. 2 entered into a contract with the plaintiff to
exclusively provide sponsorship and advertisement for the satellite T.V.
Channel ARY Digital. In this case a declaration has been sought that e-mail
dated 29-1-2012 and the oral termination of the airtime contract dated
30-1-2012 communicated to the market is illegal and have no legal effect.
2. The injunction application (CMA. No.
923 of 2012) was fixed in this Court on 31-1-2012 when M/s. Bashir Ahmed Khan
and Mobeen Lakho, advocates appeared for defendants and undertook to file their
Vakalatnama. Both the learned counsel categorically stated in the Court that
Annexure "A" which is an agreement dated 1-7-2001 has not been
terminated. On this statement the counsel for the plaintiff shown his
satisfaction, consequently the injunction application was disposed of. Now in
this case following application is pending.
CMA No.
1063/2012. In this application, the Defendant No. 2 has prayed that agreement
contained an arbitration clause, hence arbitrator be appointed.
Suit No. 124 of
2012
ARY
Communication (Pvt.) Ltd. v. Media Max (Pvt.) Ltd.
3. This suit has
been filed by ARY Communication Ltd. "against Media Max (Pvt) Ltd. for
declaration, permanent injunction, rendition of accounts and damages. In this
suit the plaintiff has sought the declaration that upon termination of agency,
defendant (Media Max (Pvt.) Ltd) cannot represent the plaintiff for obtaining
any business. Injunction was also sought against the defendant not to represent
as agent or representative of plaintiff. Besides, claiming huge damages, the plaintiff
has also sought further declaration that agreements entered into by the
defendant (Media Max (Pvt.) Ltd) representing themselves ARY or ARY Digital are
based on misrepresentation
4. The
injunction application CMA. No. 1046 of 2012 was fixed in this Court for orders
on 3-2-2012. Learned counsel for the plaintiff argued that on 2-2-2012 the
plaintiff terminated the agency agreement, therefore, the defendant be
restrained from representing as an agent of plaintiffs and receiving amount in
their name directly from the clients. It was further argued that plaintiff has
no intention whatsoever to terminate the agreement entered into by the
defendant with various clients on behalf of plaintiff but only wanted to ensure
that sale proceeds/receipts are given directly to the plaintiffs. On this
contention notice was issued to the defendant and till then the defendant was
restrained to represent as an agent of the plaintiffs nor would receive any
amount directly in their names nor would interfere in the business of the
plaintiffs. In this suit, following applications are pending:--
(1) C.M.A. No. 4803/2012: The defendant has
filed this application under Order XXXIX, Rule 4, C.P.C. for vacating order
dated 3-2-2012.
(2) C.M.A. No. 1046/2012: The plaintiff has
prayed that defendant be restrained to act as agent of plaintiff.
(3) C.M.A. No. 1685/2012: The plaintiff
claims that the C.E.O of defendant has violated the Court's orders dated
3-2-2012.
(4) C.M.A. No. 1047/2012: The plaintiff
wants appointment of receiver to attach the accounts of the defendant.
(5) C.M.A. No. 3292/2012: The plaintiff
wants appointment of Chartered Accountant to audit the business undertaken by
the defendant as agent of the plaintiff since 2001 till date.
(6) C.M.A. No. 6232/2012: The plaintiff has
prayed that the defendant be directed to give full and complete disclosure,
statement of accounts and bank statement.
(7) C.M.A. No. 2204/2012: The defendant
claims that alleged contemnors have misinterpreted the order dated 3-2-2012.
(8) Nazir's report dated 24-12-2012: He
submitted that the plaintiff in compliance of order dated 23-2-2012 deposited
Rs. 15,22,86,741/-. The report is taken on record.
Suit No. 165 of
2012
Media Max (Pvt.)
Ltd. v. ARY Communication (Pvt.) Ltd.
5. The plaintiff
(Media Max (Pvt) Ltd.) has filed this suit for declaration, recovery, mandatory
and permanent injunction against ARY Communication Ltd. and ARY Digital, FZ
LLC. The plaintiff has sought the declaration that relationship of principal
and agent is governed by the contract dated 1-7-2001. The agency is coupled
with interest and third party contracts are protected under Section 204 of the
Contract Act hence the defendant cannot revoke the contract and the plaintiff
is entitled to 15% agency commission. Further declaration has been sought that
the termination of agency is unlawful and in violation of natural justice.
6. On 13-2-2012
when the injunction application (C.M.A. 1352 of 2012) and others applications
(at Sr. Nos. 3 to 5) were fixed first time for orders Mr. Asim Mansoor,
advocate appeared and waived the notice. Learned single Judge jotted down the
submissions and by consent it was ordered that the Defendant No. 1 on receipt
of amount from third party in respect of third party agreements entered into
between plaintiff and the third party shall retain 85% of such amount and 15%
of such recovery will be deposited with the Nazir of this Court. On the same
date it was further ordered that the Suit Nos. 115 and 124 of 2012 shall also
be fixed together on the next date. Now following applications are pending in
this suit.
(1) Nazir's report dated 20-3-2012: Nazir
submitted that ARY Communication has deposited Rs.70,68,976/-. The report is
taken on record.
(2) C.M.A. No. 9667/2012: The plaintiff
claims that the directors of the defendant have violated the Court's orders
dated 7-5-2012.
(3) C.M.A. No. 7012/2012: It is an unsigned
application and the contention raised are similar to C.M.A. No. 9667/2012 hence
it is dismissed.
(4) C.M.A. No. 4817/2012: The plaintiff has
prayed for the release of amount deposited by the Defendant No. l with the
Nazir.
(5) C.M.A No. 1352/12: The plaintiff has
prayed that defendants be restrained from collecting any revenue in terms of
third party contracts.
(6) C.M.A. No. 1353/2012: The plaintiff has
prayed for appointment of Nazir to manage accounts in relation to sale and
marketing of airtime in respect of third party contracts.
(7) C.M.A. No. 1354/2012: The plaintiff has
prayed that the Defendant No. 1 be directed to deposit the amount of Rs.89,922,341/-
as the Defendant No. 1 has made a clear unequivocal, unambiguous and
unqualified admission.
(8) C.M.A. No. 1355/2012: The plaintiff has
filed this application under Order XII, Rule 6, C.P.C. and prayed that
preliminary decree may be passed to the extent of Rs.89,922,341/-.
(9) C.M.A. No. 1684/2012: The Defendant No.
1 claims that alleged contemnors have violated the order dated 13.2.2012.
(10) C.M.A. No. 2206/2012: The plaintiff has
filed this application for restraining order against the defendants from
collecting any payments from third parties.
(11) C.M.A. No. 2207/2012: The plaintiff has
prayed for the appointment of Commissioner to inspect the defendant's accounts.
(12) C.M.A. No. 2208/2012: The plaintiff has
filed this application against the alleged contemnors who have committed
contempt of order dated 13-2-2012.
(13) C.M.A. No. 6234/2012: The Defendant No. 1
wants recalling/reviewing the order dated 6-6-2012.
(14) C.M.A. No. 5910/2012: The plaintiff prays
that the bank accounts and liquid assets of the defendants be attached/freezed.
(15) C.M.A. No. 6235/2012: The Defendant No. 1
wants that the order dated 13-2-2012 may be set aside or modified/altered.
(16) C.M.A. No. 3360/2012: The Defendant No. 1
has filed this application under Order VII, Rule 11, C.P.C. for rejection of
plaint.
7. Mr.Anwar
Mansoor Khan, learned counsel for the ARY Communications Ltd. and ARY Digital
FZ LLC argued that the Plaintiff ARY communications was established as a
private limited company in 2002 which was converted into a public limited
company. Media Max was incorporated on 24-8-2001, which is a marketing company
and was non-exclusively engaged, on terms and conditions contained in various
correspondences, without a formal agreement, on casual basis for marketing and
sale of airtime of ARY/ARY Digital.
8. It was
further contended that ARY Digital FZ LLC, had executed an agreement on
1-7-2001 with Media Max for selling airtime for the promotion of ARY Digital, a
Satellite TV Channel. By a letter dated 6-10-2005, ARY informed Media Max that
the billing was to be transferred from Media Max to ARY from January 1, 2006.
Media Max vide letter dated 17-10-2005 acknowledged the said letter to transfer
billing from them to ARY. On 25-5-2006, a letter was written by ARY in which it
was stated that the invoices would be on ARY Communication Limited's letterhead
and amount received against these invoices would be deposited in Standard
Chartered Bank.
9. He further
argued that the agreement dated 1-7-2001 actually came to an end and the new
relationship was created between parties where after a new agreement was
required to be entered into. The draft agreement was sent by ARY to Media Max
in September 2006 which was not accepted. Media Max modified various clauses
and specially the provisions of Clause 12 which stipulated the duration and
termination of the agreement. The said modification was not acceptable to ARY
hence various negotiations took place but no formal agreement could be signed.
The informal relation, which was governed by various letters and instructions,
however continued. The relationship between the ARY and Media Max was very
cordial and though targets were given in relation to various channels, but
there was no specific pricing policy agreed and discussed. Media Max without
reference to ARY, and without information continued to unilaterally negotiate
the price of airtime and raising/generating invoices in the name of ARY
Communication Limited. Media Max with mala fide intention, refused to provide
details of the accounts to the ARY and continued to syphon off money.
10. It was
further averred that the Media Max filed a Suit No. 115 of 2012 on 31-1-2012,
against ARY and ARY Digital FZ, LLC basing its claim on the agreement dated 1st
July 2001 which were entered into between ARY Digital FZ, LLC and Media Max. At
that point in time ARY Digital had not terminated the agreement hence the
counsel said that they had not terminated any agreement and this Court passed
an Order dated 31-1-2012, disposing off the injunction application on the basis
of above statement. The Media Max was incorporated in August, 2001 and the date
of submission of incorporation documents is given as 24-8-2001, which is almost
2 months after the date of the said Agreement which shows that Media Max was
not in existence at the time of signing of the Agreement hence no reliance can
be placed on the said agreement.
11. It was
further contended that on account of serious fraud and misrepresentation and
causing loss to ARY, a legal notice was served on 2-2-2012 and the oral
arrangement as to the casual agency was terminated. Whilst ARY was negotiating
with Media Max to give accounts of the previous years, Media Max gone into the
market and started to the take advances against the moneys payable to ARY. The money
thus taken by fraud is liable to be accounted for and after proper
determination/audit through a qualified Chartered Accountant, be returned and
or adjusted accordingly.
12. It was
further contended that Media Max was never a part of ARY as both are two
distinct Companies. Any such impression could not be assigned to the
relationship which was of casual nature. In the Suit No. 115 of 2012, Media Max
only disclosed five contracts but later on, in the Suit No. 165 of 2012, the
same company came up with fabricated documents, claiming them to be the
agreements entered into on behalf of the ARY. It was further averred that Media
Max highlighted that ARY admitted an amount of Rs.89 million as outstanding in
favour of Media Max. The learned counsel denied this assertion and pointed out
Rejoinder to the CMA. 1046 of 2012 and argued that the said amount even if
could be said to be an admission, the said document is dated 19.12.2011 showing
a balance as on 30-6-2011, whereafter there has and continued a number of
transactions, as such a previous transactional, statement could not be deemed
to be an admission on the date of the suit or commencement of litigation.
13. So far as
the contempt applications filed by Media Max against ARY and its directors is
concerned, the learned counsel argued that ARY has made all payments as
directed by this Court with the Nazir but Media Max in order to pressurize ARY
and its management and to extract undue benefits resorted to file contempt
applications one after another. In compliance of the orders passed by this
Court, ARY has deposited all the amounts as directed. The final determination
of any amounts due could only be made after the evidence has been led. He
further argued that Media Max after termination of agency, resorted to raising
allegations against the ARY regarding sending fraudulent emails which
allegations are denied. Media Max has submitted a fabricated email relating to
the confirmation of the amounts which was merely for the purposes of accounting
only. It is submitted that the documents/emails submitted by the Media Max
available at pages from 2049 to 2053 in Part 2 of Suit 165 of 2012 (i.e.
Rejoinder in C.M.A. 1352 of 2012) are questionable as they have been received
from unverified sources and are fabricated and concocted. He referred to
following case in point:
1. 2004 MLD 1820 - Muhammad Qasim v. Tahir
Saleem and another. The Court had ample powers under Order XXXIX Rule 4, C.P.C.
to discharge, vary or set aside injunctive order. It can be exercised keeping
in view the circumstances of each case.
2. 1988 CLC 230 - Muhammad Inam v.
Dr.Muhammad Safdar. Trial Court has got power under Order XXXIX, Rule 4, C.P.C.
to amend or to discharge, vary or set aside order of injunction.
3. 1982 CLC 2242 - Sindh Madrasatul Islam
Board Society v. Shamim. When injunction is made without notice to the opposite
party the remedy for an ex parte temporary injunction is provided in Rule 4 of
Order XXXIX C.P.C.
4. PLD 2010 Karachi 213 - Raja Abdul Hameed v.
Shehri-CBE. When some development takes place having material bearing on
substantive rights and interest of parties, the Courts do not sit with eyes
closed to such change, may in appropriate cases vary, modify or even discharge
the injunctive order. Ref: 2001 SCMR 279.
5. 2007 YLR 590 - Abdul Habib Rajwani v.
M/s. Brothers Industries Ltd. Pre-existing interest of the agent in the
subject-matter of the agency. The concept has been well illustrated at page
2036 of Halsbury's Law of England, IVth Edn, Volume-I.
"868. Authority coupled with
interest.--Where the agency is created by deed, or for valuable consideration,
and the authority is given to effectuate security or to security or to secure
the interest of the agent, the authority cannot be revoked. Thus, if an
agreement is entered into on a sufficient consideration whereby an authority is
given for the purpose of securing some benefit to the donee of the authority,
the authority is irrevocable on the ground that it is coupled with an interest.
So, an authority to sell in consideration of forbearance to sue for previous
advance, an authority to apply for share to be allotted on an underwriting
agreement a commission being paid for the underwriting, and an authority to
receive rents until the principal and interest of a loan have been paid off or
to receive money from a third party in payment of a debt, have been held to be
irrevocable. On the other hand, an authority is not irrevocable merely because
the agent has a special property in or a lien upon goods to which the authority
relates, the authority not being given for the purpose of securing the claims
of the agent.
6. PLD 2009 Karachi
288 - Cooper & Co. (Pvt) Ltd. v. Laurel
Navigation (Mauritius)
Ltd. The principal admittedly has authority to terminate the authority of an
agent in the following circumstances:--
(i) by the principal revoking his
authority;
(ii) by the agent renouncing the business of
the agency;
(iii) by the business of the agency being
completed;
(iv) by either the principal or agent dying or
becoming of unsound mind;
(v) by either the principal or agent being
adjudicated an insolvent under the provisions of any Act for the time being in
force for the relief of insolvent debtors;
(vi) by expiry of the period agency, if any;
(vii) by the destruction of a material part of the
subject matter of the agency;
(viii) the happening of any event which renders
the agency unlawful or upon the happening of which, it is agreed between the
principal and the agent that the authority shall determine; or
(ix) by dissolution of the principal, where
the principal is a firm or a company or other corporation.
Thus there could
be no cavil to the proposition that the principal has always ample power to
rescind, revoke or alter the authority of agent provided any one or more of
afore-stated conditions are available to the principal to amend, alter,
rescind, vary or cancel the authority of the agent: Prof. SC Srivastava, in his
book Law of Agency, III Edition at page 757 while discussing the nature of
authority of the agent coupled with the interest, has observed, as under:--
"Where the
agent's authority is by deed, or for valuable consideration, or for the purpose
of effectuating any security, or of protecting or securing any interest of the
agent, it is irrevocable during the subsistence of any, such security or
interest. This is known as agency coupled with interest. But it is not
irrevocable merely because the agent has an interest in the exercise of
it."
7. PLD 2007 Karachi
278 - M/s. Time N Visions International (Pvt) Ltd. v. Dubai Islamic Bank Pakistan Ltd. A contract
of agency by its very nature is personal to the parties and revocable at their
volition subject to agreed terms. It does not create eternal legal relations.
8. PLD 2011 Karachi 362 - M/s. Fospak (Private) Ltd. v.
Fosroc International Ltd. For Section 202 to apply, the following three
conditions must be fulfilled; (a) there must be an agency; (b) the subject
matter of the agency must be some property; and (c) the agent must himself have
an interest in such property. Thus, for Section 202 to apply. In the two
illustrations to Section 202, the basis of the agent's interest in the property
is the debt owed to him by the principal. This basis existed independently of
the agency contract, and would exist even if there were no agency contract.
Ref: Dalchand v. Seth Hazarimal and others AIR 1932 Nagpur 34, and the earlier
Bombay case of Vishnucharya v. Ramchandra (1881) 5 Bom. 253.
9. 2006 MLD 367 - M/s. Al-Mumtaz Agencies
v. Millat Tractors Ltd. It is settled principle of law that if a principal
makes a premature revocation, the agent can only claim damages as per law laid
down in Frith v. Frith (1906) AC 254. Agency is dependent upon the confidence
and trust which the principal has in his agent, the principal can revoke the
agency at his will, once this confidence is shaken. Lamb and Sons v. Goring
Brick Coy, Ltd. (1932) 1 KB 710.
10. PLD 1986 Karachi 234 - M/s. World Wide Trading Co. v.
Sanyo Electric Trading Co. Mere investment does ring no bell unless the
interest which is allegedly involved fulfils the condition that it forms part
of the subject-matter of the contract as provided in Section 202 of the
Contract Act. To my mind, the two statutory illustrations given at the end of
Section 202 contemplate that the interest of the agent, forming subject matter
of the agency, is to be some sort of an adverse nature qua the principal.
11. 2004 SCMR 1092 - Puri Terminal Ltd. v.
Government of Pakistan.
No doubt an injunction is a form of equitable relief. It is pertinent to note
that the petitioner irrespective of seeking declaration, permanent injunction,
compensation also claimed damages as an alternative relief. By claiming damages
as an alternative relief, the petitioner seemed to be not confident about the
grant of other relief.
14. On the other
hand, Mr.Abid Zuberi, the learned counsel for Media Max argued that since 2001
under Agreement dated 1-7-2001, Media Max worked as exclusive agent for sale of
Air time and Sponsorship of ARY Digital Channel, firstly and later on as
exclusive Agent on same terms and conditions for M/s ARY Communications
Limited. Since inception of the business relationship, there is not a single
complaint or allegation raised against the business conducted by Media Max and
accounts were shared and reconciled on regular basis. Till 28-1-2012 there was
no business issues and dispute arose only when Email dated 28-1-2012 was issued
by ARY whereby they attempted to introduce a new team to deal sale of air time
and sponsorship of ARY Digital Channel which led to filing of Suit No. 115 of
2012 by Media Max in which the ARY on the first date of hearing undertook that
the Agreement dated 1-7-2001 has not been terminated. However, ARY without
issuing a single notice approached this Court and filed Suit No. 124/2012 and
obtained restraining order dated 3-2-2012 on concealment of facts.
15. It was
further argued that vide letter dated 19-12-2011, Annexure CA/24 at page 417 of
Counter Affidavit filed by Media Max to Stay Application in Suit 124 of 2012
makes it clear that ARY has confirmed as on 30-6-2011 that a balance amount of
Rs.89,922,341.00 is payable to Media Max. The amount was confirmed in hand
writing and their Senior Manger Finance Mr. Asim Patel also signed and stamped
the said letter. To rebut this admitted liability ARY raised the pleas that
figure of Rs.89,922,341.00 was admitted for "accounting purposes" and
is not true and correct figure. They also manufactured a series of fictitious
Emails including Email dated 19-12-2011 sent by Asim Patel to Sajid Hafeez of Media
Max. In fact, this fictitious email was only sent by Mr. Asim Patel on
10-2-2012 which was received by Media Max on 10-2-2012 i.e. just 3 days before
filing of Suit No. 165 of 2012 when the negotiations were taking place. M/s
hostndomain.com conducted investigation and from I.P. Address of Media Max and
ARY found out that this particular email was sent from Outlook (Computer
Software for sending and storing emails on a personal computer) and Outlook
picks system date. So if the system date of sender (asim.patel@arydigital.tv)
is wrongly set then the mail will receive at recipient's end showing back date.
The learned counsel referred to Annexure RJ/17 at page 2047 - 2053 of Suit No.
165 of 2012 filed by Media Max along with its Rejoinder to Stay Application.
ARY has taken wrong plea that they have already paid 15% commissions of Media
Max and nothing is outstanding. He further argued that under Order XII, Rule 6,
C.P.C. any party may at any stage of a suit where admission of a fact is made
either in pleadings or otherwise, apply to the Court for such judgment or order
as upon such admissions he may be entitled to, without waiting for the
determination of any other question between the parties, hence this Court may
be pleased to pass preliminary decree to the extent of the admitted amount i.e.
Rs.89,922,341.00.
16. It was
further contended that since inception of business relationship Media Max was
using Logo, Trade Mark and Trade Name of `ARY' & ARY Digital' which amounts
to an implied acceptance on the part of ARY and ARY Digital. Various admitted
documents addressed by Media Max either to ARY, ARY Dubai, Pakistan
Broadcasters Association or third party and or Advertising Agencies do show
that Media Max was using the logo and trade name of ARY Digital and the same was
within the knowledge of ARY and ARY Dubai. After use of logo and Trade
mark/name for a period of more than 11 years it is only now that ARY is making
flimsy allegations which are without substance. ARY further alleged 15
Agreements mentioned in Suit No. 165/2012 are forged and prepared in back date
while in Suit No. 115/2012 only 4 agreements were mentioned. Despite claiming
remaining 11 agreements are forged, ARY has not singled out any one of these
Agreements as fraudulent. By a consent order dated 13-2-2012, ARY agreed to
deposit 15% agency commission out of 15 third party contracts with the Nazir of
this Court and they are till date depositing 15% share of Media Max with the
Nazir of this Court.
17. As far as
the plea that Media Max was merely a non-exclusive Agent of ARY, the learned
counsel argued that since 2001 Media Max acted as sole and exclusive Agent of
ARY Digital and upon subrogation in year 2006 they have acted as sole agent of
ARY for ARY Digital Channel. On one hand ARY claims that Agreement dated
1.7.2001 was an eye wash made in back date but in Court Order dated 31.01.2012
passed in Suit No. 115 of 2012 the Counsel of ARY and ARY Dubai admitted the
said Agreement and gave an undertaking that they do not intend to terminate the
agreement Furthermore, the CEO and President of ARY Digital Network and ARY Com
Mr.Salman Iqbal vide his email dated 31-1-2012 admitted the Agreement. The
learned counsel referred to Annexure CA/34 page 755 filed with counter
affidavit in Suit 124 of 2012. Furthermore, the Counsel of ARY in its legal
Notice dated 31-1-2012 again admitted and recognized the Agreement dated
1-7-2001 which is annexed as Annexure CA/33 pg 753 with counter affidavit in
Suit 124 of 2012. For 11 years ARY Dubai
and ARY Com have admitted acceptance of money by or through Media Max as their
sole Agent, however upon filing suit they have denied the relationship.
18. The process
of registration of the Media Max with SECP was started prior to the signing of
the Agreement dated 1-7-2001. The company was formed on 27-8-2001 and the
transmission of ARY Digital Channel started on September 16, 2001, therefore,
for all material purposes prior to the execution of the Agreement dated
1-7-2001, the company was operational.
19. He further
argued that Sections 202, 204, 206 and 217 of the Contract Act along with
relevant illustrations mentioned therein protect an Agent from illegal actions
and or termination by a Principal. Section 202 provides that where an Agent has
interest in the subject matter of the agency than said agency cannot be
terminated to the prejudice of such interest. Section 204 provides that in case
where an Agent has partly exercised the authority, than the principal cannot
revoke the same. In the present case, Media Max entered into 15 third party
contracts which pertained to sale of air time and sponsorship of ARY Digital
Channel only. Due to illegal termination of Agreement dated 1.7.2001, Media Max
was deprived of their 15% commission in such contract. However, ARY illegally
terminated the Agreement and after obtaining restraining order dated 3-2-2012
started honoring the contracts itself. Section 206 provides that a reasonable
notice must be given of such revocation or renunciation, otherwise damages
resulting therefrom must be made good. It was further contended that Agreement
read with Section 217 of Contract Act, makes it clear that Agent has authority
to retain his share.
20. The learned
counsel further argued that ARY in their pleadings alleged that Media Max was
not disclosing or reconciling true and complete accounts to them. In this
regard, he argued that all accounts were constantly shared between the two set
of parties. Periodical details of clients, recoveries etc. were shared and
reconciled. Media Max was issuing invoices in its own name and upon receiving
payments transferred 85% to ARY Dubai
and keep 15% as its commission. Media Max was also dealing with all the Tax
issues of ARY Dubai.
Even on their own Website, ARY has mentioned the only name and address of Media
Max as its Agent.
21. It was
further averred that to secure its own interest ARY through Letter dated
3-2-2012 misguided the Advertising agencies by misquoting this Court's Order
dated 3-2-2012. ARY informed the Advertising Agencies that subject to direct
payments, from now on ARY shall honour the third party agreements. By
deliberately misquoting the Court Order dated 3-2-2012 ARY has committed
contempt of the Court. ARY time and again failed to comply with the directions
contained in Order dated 13-2-2012 whereby ARY was supposed to disclose all
incomes and deposit with the Nazir 15% of such earning from the third party
Agreements. After a delay of more than 5 weeks ARY filed the Statement of
Account which was not certified by its chartered accountants. The contumacious
actions of the officials of ARY mentioned in the CMA No. 7012 of 2012, 9667 of
2012 and 2208 of 2012 has made themselves liable to be punished in accordance
with law.
22. As far as
the claim of audit is concerned, the learned counsel argued that such inquiry
will only delay the matter. However, he submitted that an audit of Media Max
and ARY for a period from July, 2011 till December, 2012 will reveal the truth
and claims of both the parties, especially in context with the third party
Agreements. The learned counsel further referred to Section 196 of the Contract
Act which provides the effect of ratification i.e. an unlawful Act of an Agent
which is ratified by the principal is considered to have been performed with
lawful authority. Section 197 of the Contract Act provides that ratification
can be both express and implied from conduct of principal, Section 198 of
Contract Act provides that valid ratification can only be done by principal
when he has knowledge of material facts and Section 199 of the Contract Act
provides that when a principal ratifies any unauthorized acts done on his
behalf than he ratifies the whole transaction of which such act forms part of.
A bare perusal of above sections show that ARY has expressly and impliedly
ratified the alleged unauthorized and voidable actions of Media Max. In support
of his arguments, he relied upon following case-law:
1. 2008 CLC 645 - CDGK v. Faqir Muhammad.
Suit can be decreed on admissions at any stage of proceedings. Admission must
be clear, unambiguous, unqualified and unequivocal, failing which it is
incumbent upon the Court to frame issues and decide the case.
2. 2007 SCMR 433 - G.R.Syed v. Muhammad
Afzal. Court was empowered under O.XII, R.6, C.P.C. to pass a judgment on the
basis of admissions of facts made by the parties to their pleadings, at any
stage of proceedings.
3. PLD 2004 SC 860 - Bolan Beverages (Pvt)
Ltd. v. Pepsico INC and others. The close examination of Section 202 of the
Contract Act would show that it can be split up into two parts. The first part
contemplates that the interest of the agent himself should exist in the
property that forms the subject matter of the agency. The second part of the
section is that when such an interest is created, it cannot be terminated to
the prejudice of agent unless it is expressly provided in the contract.
4. 2005 CLD 1805 - Roomi Enterprises (Pvt)
Ltd. v. Stafford Miller Ltd. Even if an agency due to any reason creates an
interest in the property and agreement itself provided for termination of such
agreement of agency, Section 202 Contract Act cannot be invoked. Making of
substantial investment in business of agency does not make the agency
irrevocable.
5. 2005 SCMR 1408 - Sinaullah v. Muhammad
Rafique. Ratification as required by Section 196, Contract Act, 1872 could be
made by the person on whose behalf an act has been done by the agent without
having authority to perform such act.
6. PLD 1989 Karachi 499 - Gulfam v. Ali Muhammad.
Doctrine of ratification would apply to such acts only which were not void or
forbidden by law--Ratification takes effect, though made subsequently, inasmuch
as it validates the acts already performed and it relates back to the time of
inception of the transaction as a complete retrospective efficacy.
7. 1999 YLR 1529 - Khadim Hussain v.
Muhammad Fazil. Ratification of act of agent by principal need not necessarily
be in writing, but same could be inferred from conduct of principal.
8. 2012 CLD 1380 - Faisalabad Development
Authority v. M/s.Sarwar Latif Associates. Principal could accept even an
unauthorized act done by his agent, which would amount to its validation and
ratification.
23. Heard the
arguments. Record shows that the litigation started between the parties when
first Suit No. 115 of 2012 was filed by Media Max (Pvt) Ltd. against ARY
Communication Ltd. and ARY Digital FZ, LL. This was suit for declaration and
permanent injunction in which the plaintiff challenged the e-mail dated
29-1-2012 and the oral termination of agency agreement made on 30-1-2012. It is
also a matter of record that when injunction application was placed for orders,
the learned advocate for the defendants appeared and stated that annexure
"A" which is an agency agreement has not been terminated. On this
statement the plaintiff's counsel was satisfied and the injunction application
was disposed of. It is also a matter of record that though the defendants'
counsel gave their statement but just after two days i.e. 2.2.2012, the
defendants terminated the agency agreement, which is now the subject matter of
Suit No. 165 of 2012 filed by the same plaintiff against the same defendants
for declaration, recovery, mandatory and permanent injunction. Since the cause
of action of this suit has become over as the plaintiff has already filed its
subsequent suit and the earlier suit was only confined to the declaration and
permanent injunction regarding the above e-mail and oral termination therefore,
in my view for all intent and purposes, at least this suit has become
infructuous as the plaintiff has already availed the remedy by filing fresh
suit impugning the termination of agency conveyed through legal notice dated
2-2-2012. In view of the changed circumstances and events the suit has become
infructuous as no relief can be allowed otherwise to the plaintiff for the
alleged oral termination. Consequently, this suit along with C.M.A. No. 1063 of
2012 is dismissed. Though the suit had been dismissed but an important aspect
cannot be ignored lightly that on the one hand the counsel for the defendants
stated that the agency agreement has not been terminated, while just after two
days of this statement, the agency agreement was terminated. What was the force
of circumstances or extraordinary events under which the agency agreement was
terminated will be seen in the pending suits filed by the parties for and
against.
24. ARY
terminated the agency agreement on 2-2-2012 and filed their Suit No. 124 of
2012 in this Court. The injunction application was placed before the Court on
3-2-2012. It was argued that the agency agreement has been terminated,
therefore, Media Max be restrained from representing as an agent of the
plaintiff and receiving amount in their name from the clients. It was further
argued that for the time being plaintiff have no intention to terminate the
agreement executed by the defendant with various clients on behalf of
plaintiff, with the assurance that the sale proceeds are directly given to the
plaintiff. This Court while issuing notice to the defendant restrained it from
representing as an agent of the plaintiff nor would receive any amount directly
in their name.
25. Conversely,
Media Max has also filed their Suit No. 165 of 2012 against ARY and on
13-2-2012 misc. applications including C.M.A. No. 1352 of 2012 were placed in
Court for orders. On which date again the counsel for ARY without notice
appeared and by consent it was ordered that ARY on receipt of amount from third
party in respect of third party agreements shall retain 85% of such amount and
15% of such amount will be deposited with the Nazir of this Court. It is
admitted fact that at present the agency agreement is terminated. It is also a
fact, which is clearly reflecting from the record that Media Max though
challenged the agency termination in their suit but there was no application
filed for the suspension of termination notice with the prayer that the agency
agreement will continue to operate till disposal of the suit. It is also a fact
that on 24-12-2012, Nazir has submitted a consolidated report in both the suits
and stated that in compliance of the Court's order ARY has deposited Rs.
15,22,86,741/-, which has been invested in National Saving Centre, Karachi. The
deposit of this amount shows that ARY has deposited 15% agency commission of
the Media Max with the Nazir of this Court. In both pending suits various
allegations and counter allegations have been levelled vice versa and the bone
of contention between the parties cannot be decided without recording evidence.
Numerous documents have been filed by the parties to blame each other hence in
order to reach to a just and proper conclusion and to sift grain from the
chaff, evidence is necessary without which the actual controversy cannot be
resolved. It is not out of place to mention here that the execution of agency
agreement is an admitted fact, though it was initially for ARY FZ LLC to which
Media Max was providing their services for selling airtime by procuring
sponsorship and advertisements for ARY Digital channel. The agency agreement
was executed in the year July, 2001. It has also been pleaded that relationship
between the parties was so cordial and on the strength of same agency agreement
Media Max was also providing the same services to ARY Communication Ltd. It is
also a fact that Media Max for the purpose of their billing etc. was using logo
of ARY and also representing ARY before different forums including Pakistan
Broadcasters Association but it was never objected. Both the parties have filed
various applications for and against including the application for recalling
the stay order and the learned counsel argued that the stay granted in favour of
his client deserve confirmation, while the interim order passed in favour of
other party in their suit is liable to be vacated or recalled. Mr.Anwar Mansoor
Khan relied upon the case-law that this Court may recall/ discharge the ex
parte injunction orders. The interim orders in Media Max case was passed by
consent of ARY's counsel who appeared without notice and waived the notice in
Court on appearance. As I already observed that the most expeditious way to
dispose of the issue of contractual obligation of a commercial nature is to
record evidence, as soon as earlier. There is no cavil to the well settled
proposition of law that the Court has ample powers to discharge, vary or set
aside the injunction order and even where subsequent to passing of the
injunctive order some development took place and new circumstances emerged
requiring consideration, the Court may in appropriate cases vary, modify or
even discharge the injunctive order, but in this case after considering the
pros and cons. I am of the firm view that both the interim orders obtained by
the parties as stated above should be confirmed. There is no case made out by
both the parties for the discharge or vacating the interim orders passed for
and against and to advance cause of justice, both orders shall remain in field
till final disposal of the suit.
26. Though in
the prayer clause Media Max has prayed that the agency was coupled with
interest and they have also sought declaration that the termination of agency
through legal notice dated 2-2-2012 is mala fide, unlawful and in violation of
principle of natural justice but it is a fact that no injunction application
was filed for seeking suspension of termination notice. Counsel for the Media
Max made much emphasis that since agency was coupled with interest, the same
could not have been terminated. In support of his arguments he relied upon PLD
2004 SC 860 and 2005 CLD 1805. The crux of both the case-law is that the
Section 202 of Contract Act contemplates that the interest of the agent should
exist in the property that forms the subject matter of the agency. Making of
substantial investment in business of agency does not make the agency
irrevocable. The subject matter of agency in this case was that the Media Max
was selling airtime for different transmission including packages of T.V.
commercial and sponsorship for different programs broadcast by ARY against 15%
agency commission. Under Section 202 of the Contract Act it is clear that where
the agent has himself interest in the property which forms the subject matter
of the agency, the agency cannot, in the absence of an express contract, be
terminated to the prejudice of such interest. The relationship between the
parties was quite common as in the case of other franchise or distribution
network. The crux of the agreement and the consideration was the agency
commission which ARY was allowing to Media Max against the services being
rendered by Media Max.
27. It is well
settled that illustrations should not be read as extending the meaning of a section,
they should also not be read as restricting its operation, especially so, when
the effect would be to curtail a right which the plain words of the section
would confer. At this juncture, I would like to quote principles of statutory
interpretation, Ninth Edition authored by Justice G.P. Singh (former Chief
Justice M.P. High Court) in which he has referred to the case of Mahomed Sydeol
Ariffin v. Yeah Oai Gark, 43 IA 256, (1916) 2 AC 575 and Bengal Nagpur Railway
Co. Ltd. v. Ruttanji Ramji, AIR 1938 PC 67 in which Court held that
illustrations appended to a section form part of the statute and although
forming no part of the section, are of relevance and value in the construction
of the text of section and they should not be readily rejected as repugnant to
the section. But illustrations cannot have the effect of modifying the language
of the section and they cannot either curtail or expand the ambit of the
section which alone forms the enactment. It is the duty of a Court of law to
accept, if that can be done, the illustrations given as being both of relevance
and value in the construction of the text. The illustrations should in no case
be rejected because they do not square with ideas possibly derived from another
system of jurisprudence as to the law with which they or the sections deal. And
it would require a very special case to warrant their rejection on the ground
of their assumed repugnancy to the section themselves. It would be the very last
resort of construction to make this assumption. The great usefulness of the
illustrations which have, although not part of the sections, application of the
statute, should not be thus impaired.
28. The two
illustrations attached with Section 202 of the Contract Act have been provided
to define the true spirit of the word "interest" used in the section
itself. The first illustration demonstrate that an authority given by
"A" to "B" to sell A's land to pay himself out of the
proceeds, the debts due to him from A, which authority cannot be revoked. It is
clear from the pleadings of the parties that Media Max has not claimed
authority given by ARY to them to recover their debts by selling the airtime of
ARY TV channel. The next illustration defines that "A" consigns 1000
bales of cotton to "B" who has made advance to him on such cotton and
desire B to sell cotton, and to repay himself out of the price, the amount of
his own advances. This authority cannot be revoked nor it can be terminated.
Again I would like to observe that the relationship between the parties in this
case based on agency commission and it is not the case of Media Max that they
had purchased airtime and made any payment in advance to the ARY hence they
cannot terminate the agency agreement. At present I am of the tentative view,
that Media Max has not made out any case in which they can claim at this stage
that their agency was coupled with interest and their alleged interest is
protected under Section 202 of Contract Act.
29. Where an
agreement is entered into on a sufficient consideration whereby an authority is
given for the purpose of securing some benefit to the donee of the authority
such an authority is irrevocable. The interest of the agent in the subject
matter of the agency may be inferred from the language of the document creating
the agency, and from the course of dealings between the parties. It is the
existence of the interest and not the mode in which it is given, that is of
importance. The interest which an agent has in effecting a sale and the
prospect of remuneration to arise therefrom, do not constitute such an interest
as would prevent the termination of the agency. The prospect of earning a
commission is not an interest for this purpose. Where the plaintiff was only to
get commission after the accrual of the net collection, he cannot prima facie
be said to have any interest. The rule of present section applies only to the
cases where the authority is given for the purpose of being a security or as a
part of security, not to cases where the authority is given independently and
the interest of the donee of the authority arises afterwards and incidentally
only. As for instance, the goods are consigned to a factor for sale. This
confers an implied authority to sell. Afterwards the factor makes advances.
This is not an authority coupled with an interest but an independent authority
and interest subsequently arising. Reference can be made to Section 202 of the
Contract and Specific Relief Acts by Polluck and Mulla 13th Edition Vol. II.
30. Learned
counsel for the ARY quoted different case-laws to highlight the salient
features of an agency coupled with an interest. In the case of Abdul Habib
Rajwani (supra), learned Judge quoted an excerpt from Halsbury's Law of
England, IVth Edn, Volume-I. in which the authority coupled with an interest
has been defined. The same aspect has already been discussed in detail in the
cases of Cooper & Co. (Pvt) Ltd. v. Laurel Navigation (Mauritius) Ltd. M/s.
Time N Visions International (Pvt) Ltd. v. Dubai Islamic Bank Pakistan Ltd.,
M/s. Fospak (Private) Ltd. v. Fosroc International Ltd., M/s. Al-Mumtaz
Agencies v. Millat Tractors Ltd. and M/s. World Wide Trading Co. v. Sanyo
Electric Trading Co. (supra) in all aforesaid case law, the hon'ble Courts have
discussed the word `interest' of the agent, which is necessary to be dilated
for the purpose of declaring or holding any agency coupled with an interest.
The learned counsel for the plaintiff also referred to Section 196 of the
Contract Act which relates to the rectification. He further referred to Section
204 of the Contract Act which provides that the principal cannot revoke the
authority given to his agent after the authority has been partly exercised so
far as regards such acts and obligations as arise from acts already done in the
agency. The purpose of showing both sections is that when the agency agreement
was terminated Media Max already entered into various agreements for selling
sponsorship and airtime and since the authority given to Media Max was partly
exercised hence, ARY could not have terminated the agency agreement. In this
regard learned counsel referred to the case reported in 2005 SCMR 1408, PLD
1989 Kar. 499 and 1999 YLR 1529. The crux of the case-law is that the
rectification could be made by a person on whose behalf an act was done by the
agent. The rectification takes effect though made subsequently in as much as
which validates acts already performed and the rectification of act of an agent
by principal need not necessarily be in writing. It is an admitted fact that
the counsel for the ARY candidly conceded to that ARY will honour all third
party contracts provided that the sale proceeds are paid to them and in view of
Court's order they are not only honoring the contracts but they are also
depositing 15% agency commission of the Media Max with the Nazir of this Court.
31. So far as
the basic principles required to be considered by this Court for granting
injunction are concerned, the media max after termination of agency agreement
cannot represent them as an agent unless their rights are decided by this
Court. In this regard, ARY has made out prima facie case, the balance of
convenience lies in their favour and if injunction order is not confirmed, it
will not only create multiplicity of proceedings but will cause irreparable
injury to them. So in my view the interim orders passed in Suit No. 124 of 2012
on 3-2-2012 deserve confirmation. Simultaneously, I am also of the firm view
that the interim orders passed on 13-2-2012 in Suit No. 165 of 2012 should also
continue till such time all third party contract are honored by ARY, and ARY
will continue to deposit 15% agency commission of the Media Max with the Nazir
of this Court until the entire contractual obligations of all such third party
contracts are satisfied and honored. It is a matter of record that this order
was passed by consent and to this extent, the Media Max has also made out prima
facie case and if this order is recalled or modified, it will cause irreparable
injury and loss to Media Max. Consequently, the C.M.A. No. 1046 of 2012 and
C.M.A. No. 4803 of 2012 filed in Suit No. 124 of 2012 and CMA. No. 1352 of
2012, C.M.A. No. 2206 of 2012, C.M.A. No. 6235 of 2012 and C.M.A. No. 6234 of
2012 filed in Suit No. 165 of 2012 are disposed of in the above terms.
32. Now I would
like to take up contempt of Court applications filed by both the parties in
their respective suits vice versa. ARY in its suit filed C.M.A. No. 1685 of
2012 in which it is stated that C.E.O. of the Media Max has violated the
Court's order dated 3-2-2010 hence, proceedings should be initiated against
them. In the same suit the defendant Media Max has filed C.M.A. No. 2204 of
2012 in which it is stated that the alleged contemnors have misinterpreted the
direction contained in the order dated 3-2-2012, while in the Media Max suit
they have filed CMA No. 9667 of 2012 with the prayer that the Director of the
ARY has wilfully violated the Court's order dated 7-3-2012 so contempt
proceedings be initiated against him. In the same case the defendant ARY has
also filed application bearing CMA No. 1684 of 2012 that the alleged contemnor Media
Max has violated the Court's order dated 3-2-2012. The plaintiff in Suit No.
165 of 2012 has also filed CMA No. 2208 of 2012 in which it has been prayed
that order may be passed against the alleged contemnors who have committed
contempt of Court's order dated 13-2-2012 by disobeying directions to deposit
15% of revenue generated from third party contracts. All the alleged contemnors
have filed their counter affidavits and denied to have committed any contempt.
The issue of contempt is a serious issue which is always a matter between the
Court and the alleged contemnor but before framing issue or charge, it is
incumbent upon the Court to first examine the matter whether any prima facie
case of contempt is made out or not which warrants or merits issuance of show
cause or framing of issue or charge. In the case in hand I am of the view that
the parties in both suits raised allegations and counter allegations that the
other party has flouted the Court order and committed contempt but in the
nutshell nothing has been placed on record to substantiate the allegations. I
have carefully examined all contempt applications. The subject matter of CMA No.
1685 of 2012 is a letter dated 14-2-2012 written by Mr. Abid Zuberi on behalf
of Media Max to the advertisers intimating the order dated 13-2-2012. In CMA
No. 2204 of 2012, Media Max has stated that ARY violated the order dated
3-2-2012 and in CMA 9967 of 2012 and CMA No. 2208 of 2012, it is stated that
ARY failed to deposit the amount. In CMA No. 1684 of 2012, ARY has again only
attached the correspondence made by Mr. Abid on behalf Media Max with
advertisers relating to the Court orders. In the ARY suit Media Max has been
restrained to represent them as agent of ARY while in Media Max case, the ARY
has been directed to deposit the agency commission with the Nazir. May be there
was some delay but fact remains that Nazir report shows the deposit of huge amount.
Both the parties in their applications failed to point out any specific and
precise instance or occurrence of contempt but made only sweeping allegations
against each other which seems to be a pressurizing tactics motivated by
retaliation and vengeance. Nothing shown that parties have committed
disobedience or disregards any order, direction or process of a Court or wilful
breach of any undertaking which tends to bring the authority of Court or the
administration of law into disrespect or disrepute, or to interfere with or
obstruct or interrupt or prejudice the process of law or the due course of any
judicial proceedings or to disturb the order or decorum of the Court. Hence I
feel no hesitation in my mind to hold that there is no plausible reason to initiate
any action against the parties for the contempt of Court proceedings.
Consequently, CMAs. Nos. 1685 and 2204 of 2012, filed in Suit No. 124 of 2012
and CMAs. Nos. 9667, 2208 and 1684 of 2012 filed in Suit No. 165 of 2012 are
dismissed.
33. ARY in their
Suit No. 124 of 2012 filed CMA. No. 1047 of 2012 under Order XL, Rule 1, C.P.C.
for the appointment of Receiver to attach the bank accounts of the defendants
maintained in two banks, while Media Max in their suit filed CMA. No. 1353 of
2012 under Section 94, C.P.C. read with Section 151 and prayed that the Nazir
may be appointed with the direction to take over, operate and manage the
accounts in relation to sale and marketing of airtime and sponsorship business
of ARY Digital from 3-1-2012 onwards in respect of third party contract. In
Suit No. 165 of 2012 the plaintiff has filed another CMA No. 5910 of 2012 under
Section 94 read with Section 151, C.P.C., with the prayer that the bank
accounts and assets of the defendants be attached/freezed. Recently, in Suit
No. 167 of 2012, (Naseem-ul-Haq v. Raees Aftab Ali Lashari and others), I have
decided the receivership application in which it was held that the object and
purpose of the appointment of Receiver may generally be stated to be the
preservation of the subject matter of the litigation pending judicial
determination of the rights of the parties. Appointment of Receiver is an act
of the .Court and made in the interest of justice. The words "just and
convenient" do not mean that the Court is to appoint Receiver simply
because the Court thinks it convenient. The order is discretionary and the
discretion must be exercised in accordance with the principles on which
judicial discretion is exercised. The terms `just and convenient' used in the
rule does not mean arbitrary whim or pleasure of the Court. Appointment of
Receiver deprives a person from enjoyment of the property, and therefore, it
has been regarded as harsh remedy. The distinction between a case in which
temporary injunction may be granted and a case in which a Receiver may be
appointed is that while in either case it must be shown that property should be
preserved from waste and alienation. In the former case it is sufficient that
if it be shown that the plaintiff in the suit has a fair question to raise as
to the existence of the right alleged while in the latter case a good prima
facie title to the property over which the receiver is sought to be appointed
as to be made out. A receiver cannot be appointed unless there is some
substantial background for such interference that the property in suit
dissipated or other irreparable mischief may be done, unless the Court appoints
a Receiver.
34. In the
present case, I have already confirmed interim orders passed by this Court for
and against the parties. It is also a fact that ARY agreed that all third party
contracts entered into by Media Max on its behalf will be honoured. It is also
a fact that ARY is depositing 15% agency commission with the Nazir of this
Court in view of Court's order and Nazir already submitted the report. The bare
bones of the matter is whether Media Max was lawfully appointed agent and in
terms of agency agreement whether Media Max also acted for ARY Communication
Ltd. or not. ARY has already terminated the contract and its claim of any
recovery against Media Max cannot be decided without evidence. On the contrary,
the application filed by the Media Max that the Nazir be directed to take over,
operate and manage accounts for the third party contract for which I would like
to observe that this Court has already passed the order that 15% agency
commission of third party contract will be deposited by the ARY with the Nazir
of this Court hence I do not find it suitable at this stage to appoint Receiver
or to give any directions to the Nazir to takeover or operate the accounts in
relation to the sale and marketing of the airtime relating to the third party
contract or to pass any order for the attachment of ARY or Media Max accounts.
Consequently, CMA. No. 1047 of 2012 filed in Suit No. 124 of 2012 and CMA. No.
1353 of 2012 and CMA. No. 5910 of 2012 filed in Suit No. 165 of 2012 are
dismissed.
35. ARY in its
suit filed CMA. No. 3292 of 2012 for the appointment of Chartered Accountant to
audit the accounts of the business undertaken by the Media Max as an agent
since 2001. ARY has also moved another CMA. No. 6232 of 2012 under Section 151,
C.P.C. for the direction to the Media Max to refund/repay the amount
fraudulently collected directly from the advertisers on behalf of ARY. Further
direction have been sought that Media Max be directed to give full and complete
statement of accounts and the amount be deposited in Court.
36. Conversely,
Media Max in their suit filed CMA. No. 2207 of 2012 in which they have prayed
that the Commissioner be appointed to inspect the defendant's accounts and
obtain copies to ascertain the payment received by ARY from advertisers. In
nutshell, both the parties vice versa in their suits wanted that proper
reconciliation be made out to ascertain their rights and obligation of payment
and their liabilities against each other. The record reflects that there was a
long standing relationship between the parties, in which various third party
contracts might have been executed by Media Max for selling airtime and
advertisement/sponsorship. Both the parties have filed voluminous documents
including invoices and tracking reports etc. and have claimed huge amount
against each other hence, in order to cut short or curtail the volume of
litigation and or the controversy between the parties it would be just and
proper to appoint Chartered Accountant to audit the accounts of Media Max and
ARY for the purpose of reconciliation and to fix the liability against each
other. ARY claims that Media Max collected the amount directly and fraudulently
misappropriated the same, while the Media Max claims that the amount was
regularly being paid to ARY after making deduction of 15% agency commission.
Media Max has also brought on record copies of some cheques to show that the
amount was paid to ARY. As a result of this discussion, CMA. No. 3292 of 2012
and CMA. No. 6232 of 2012 filed in Suit No. 124 of 2012 and CMA. No. 2207 of
2012 filed in Suit No. 165 of 2012 are disposed of in the terms that let a
Chartered Accountant be appointed to audit the accounts of Media Max and ARY
since 2001 in relation to the agency agreement involved in the suit as well as
service rendered if any by Media Max for ARY Communication Ltd. Both parties
will submit the books of accounts relating to their business relationship/dealings
to the Chartered Accountant and will also depute their responsible officials/
representatives to appear before the Chartered Accountant for audit purpose and
proper Stance. The Chartered Accountant shall submit the report within six
months. The fee of the Chartered Accountant will be borne by the parties
equally. Both the parties may appoint any Chartered Accountant or Chartered
Accountant firm by consent and if they will fail to choose the name of
Chartered Accountant by consent, either party may apply to this Court for
appointment of Chartered Accountant.
37. Counsel for
the ARY filed this application under Order VII, Rule 11, C.P.C. on the ground
that no cause of action has been arisen in favour of the plaintiff and the suit
is barred by law. It is a matter of record that before filing suit by Media
Max, ARY filed the suit in this Court, in which they have claimed various
relief(s) against Media Max. It is also an admitted fact that there was an
agency agreement between the parties and under the orders of this Court ARY is
depositing 15% agency commission of Media Max with the Nazir of this Court. At
this juncture, I would like to quote my own judgment authored in the case
reported in 2010 CLC 1603 (Muhammad Shabbir v. Faraha Bibi and others). It is
well-settled principle that only the contents of the plaint may be looked into
without any extraneous consideration and even, the Court may not see the
Written Statement/affidavits etc. filed by the defendants. Court has to confine
itself only to the averments made in the plaint and has to take the contents
thereof to be true and cannot go beyond the same. If, however, on taking the
averments made in the plaint the Court finds the plaint to be barred by law,
the Court can reject the plaint but cannot do so by resolving the contested
facts. The plaint can only be rejected where its perusal shows that the relief
claimed by the plaintiff was barred under any provision of law or a suit on the
basis of it was incompetent. The word "cause of action" means bundle
of facts which if traversed, a suitor claiming relief is required to prove for `obtaining
judgment.
Nevertheless, it
does not mean that even if one such fact, a constituent of cause of action is
in existence, the claim can succeed. The totality of the facts must co-exist
and if anything is wanting the claim would be incompetent. A part is included
in the whole but the whole can never be equal to the part. It is also well
understood that not only should the party seeking relief have a cause of action
when the transaction or the alleged act is done but also at the time of the
institution of the claim. A suitor is required to show that not only a right
has been infringed in a manner to entitle him to a relief but also that when he
approached the Court the right to seek the relief was in existence. It has no
relation to the defence that may be set up nor does it depend upon the
character of the relief prayed. Lack of proof or weakness of proof in
circumstances of the case did not furnish any justification for coming to
conclusion that there was no cause of action shown in the plaint. The Court
cannot take into consideration pleas raised by the defendants in the suit in
his defence as at that stage the pleas raised by the defendants are only
contentions in the proceedings unsupported by any evidence on record. Reference
can also be made to my other judgments also reported in 2010 CLC 1968 (Badal v.
Mansoor Ahmed Awan and others) and 2011 CLC 88 (Bano alias Gul Bano v. Begum
Dilshad Alam and others). Keeping in view the complicated questions of law and
facts involved, I do not find any substance in this application. The CMA. No.
3360/2012 is dismissed.
38. Three more
applications have been filed by the Media Max in their Suit No. 165 of 2012. In
the first application moved under Section 151, C.P.C. the plaintiff has prayed
that the amount deposited with the Nazir be released to them. The next
application has been moved under Order XXXIX, Rule 10, C.P.C. in which the
plaintiff has sought direction that the Defendant No. 1 be directed to deposit
Rs.89,922,341/- in Court while the third application has been moved under Order
XII, Rule 6, C.P.C. in which the plaintiff has prayed that preliminary decree
may be passed to the extent that admitted amount of Rs.89,922,341/- as the
Defendant No. 1 admitted the liability of this amount vide their letter dated
19-12-2012 which is part of plaint. Learned counsel for the plaintiff heavily
relied upon the letter dated 19.12.2011, which is available at page 405
annexure P-24, this letter was written by Media Max to ARY Communication Ltd.
for the balance confirmation for audit purpose. The Media Max according to
their record claimed the balance of agency commission in the sum of
Rs.89,922,341/- as on 31-6-2011. On this letter the authorized representative
of ARY Communication Ltd. confirmed the balance amount. On the basis of this
annexure the plaintiff has prayed that preliminary decree may be passed for the
aforesaid amount. A preliminary decree declares the rights and obligations of
the parties leaving further matters to be determined in subsequent proceedings.
Such decrees are normally determinative of controversies of a fundamental
nature. C.P.C. provides and vested in the Court to pass preliminary decrees
under Order XX Rules 12 to 16 and 18 and under Order XXXIV, Rules 2 to 5 and 7
and 8. A preliminary decree and a final decree are both distinct and
independent entities. According to the Explanation attached to Section 2(2),
C.P.C. a decree is preliminary when further proceedings have to be taken in the
suit and the suit has not been completely disposed of. In contrast, Order XII,
Rule 6, C.P.C. is embedded with the language that a party may apply for a
judgment on admission without waiting for the determination of any other question
between the parties and the decree can be drawn up in respect of the portion of
the admitted claim. In the present circumstances, no case is made for passing
any preliminary decree.
39. Now I would
like to consider whether the endorsement on the letter amounts to admission or
not. The Defendant No. 1 filed the counter affidavit to this application but
instead of giving separate reply they have relied upon the counter affidavit
filed against CMA. No. 1354 of 2012 and took the plea that the alleged admission
on their part cannot in any manner be deemed to be an admission. It is further
submitted that this was current and running account that changes with every
passing moment and the details can be only workout after due and proper
examination of accounts. The letter dated 19-12-2011 was only a formal letter
sent by the plaintiff for the purpose of audit requirement for previous
transactions hence, the Defendant No. 1 sent the same in good faith. It was
further stated that annexure page-26 of the plaint is self-explanatory to the
effect that no amount is outstanding against the Defendant No. 1 as the
plaintiff has already received huge amount which is more than his due share as
such the above amount was only for the audit purpose and was not the actual
amount, which was clarified by the Defendant No. 1's representative vide e-mail
dated 19-12-2012. To this e-mail the counsel for the plaintiff argued that it
was manufactured or fictitious and was sent by Mr.Asim Patel on 10-2-2012 just
three days before filing the Suit No. 165 of 2012.
40. There is no
doubt that Order XII, Rule 6, C.P.C. enables a Court upon application by either
party to dispose of the suit with regard to which there is no dispute between
parties. The entire plaint or written statement is required to be read for the purposes
of finding out the nature of admission. It is also well settled that for the
purposes of decreeing the suit on admission it is necessary that the admission
must be clear, specific, unambiguous, definite and categorical and Court is
bound to examine the plaint and written statement with diligent application of
mind to ascertain the nature of admission. In the judgment reported in PLD 2003
Karachi 253 (M/s.Gerry's International (Pvt) Limited v. M/s.Qatar Airways), the
learned Division Bench of this Court held that mere non-denial to a fact in the
written statement could not be considered as an admission and that too be
equated as unequivocal, clear and unambiguous. The Supreme Court in the case of
Macdonald Layton & Company Pakistan
Ltd. v. Uzin Export-Import Foreign Trade Co. reported in 1996 SCMR 696 held
that essential provision of Order XII, Rule 6, C.P.C. provides summary and
speedy remedy in cases where admission was made by defendant in the pleadings
or outside the same. In order to attract this provision, it is necessary that
the admission should be unequivocal and undeniable. The Court in deciding such
application exercise its discretion which is regulated by the well-recognized
principles. To pass judgment on admission is within the discretion of the Court
which should be exercised in judicial manner and is not a matter of right.
However, if it involves questions which cannot be conveniently disposed of in
an application, the Court may exercise discretion in rejecting the application.
Reference can be made to my own judgment reported in 2013 CLC 535 (Syed Waqar
Haider Zaidi v. Mst.Alam Ara Begum).
41. The learned
counsel for the plaintiff relied upon 2008 CLC 645, 2007 SCMR 1933 and 2007
SCMR 433 in support of his submissions. The gist of the case-law is that the
suit may be decreed on admission at any stage of proceedings but the admission
must be clear, unambiguous, unqualified and unequivocal failing which it is
incumbent upon the Court to frame issues and decide the case. One more thing
which I would like to point out that no such admission has been made by the
defendant in their pleadings, but it is the plaintiff who has filed this letter
in question with the plaint and in response to the application made under Order
XII, Rule 6, C.P.C, the Defendant No. 1 clearly denied to have made any
admission and raised contention that the plaintiff from their own showing,
which is clear from the language of letter, that the confirmation was sought
only for audit purpose. Though at present the plaintiff is not entitled for the
decree on admission for the aforesaid amount, but it is also a fact that huge
amount of 15% agency commission has been deposited by the defendant with the
Nazir in view of the Court's order.
42. Since the
defendants are not at daggers drawn with the sponsors, advertisers and or media
buying houses/companies, therefore, learned counsel for the defendant has
intensely given his statement in Court that the defendant will honour all third
party agreements/ contracts provided that the sale proceeds of the airtime are
directly paid to them and by a consent order the defendants are depositing 15%
agency commission with the Nazir. As I already observed that the matter will be
decided after providing an opportunity of leading evidence to both the parties
and for their convenience and to cut short the volume of litigation, I also
ordered for appointment of Chartered Accountant to examine and audit the books
of accounts to fix the liability and the payment and receivables due against
each other. When both the above suits were fixed for hearing before me on
19-12-2012 the counsel for the plaintiff who is also appearing for defendant in
Suit No. 124 of 2012 made a request that due to some financial crunch, the
defendant wants to withdraw some amount from Nazir subject to depositing of
security or bank guarantee so on his request the Nazir was directed to submit
report which he submitted on 24-12-2012 and confirmed that ARY has deposited
Rupees fifteen crores twenty-two lacs eighty six thousand seven hundred forty
one only, which is on account of 15% agency commission of Media Max generated
through third party contracts during the tenure of agency agreement, therefore,
I am of the view that the claim of agency commission cannot be rejected out
rightly at this stage and no harm will be caused to the ARY if some amount is
released subject to furnishing solvent surety or bank guarantee.
43. The learned
counsel further argued that Media Max desperately needs funds for its survival
so keeping in view the equitable consideration and to maintain equilibrium
during pendant determination of the rights of parties, the Nazir is directed to
release a sum of Rupees five crores to the Media Max subject to furnishing
solvent surety/bank guarantee. After evidence and or submission of chartered
accountant report and hearing of objections if any by this Court, the amount if
any is found due and payable to the Media Max by ARY then this amount will be
adjusted in the amount of agency commission and in case any amount is proved to
be paid by the Media Max to ARY then to secure and guarantee this amount
solvent surety or bank guarantee would be available in the Court to ensure
refund and satisfy the claim of the ARY against Media Max. Consequently, CMA. No.
4817 of 12 is disposed of in the above terms whilst CMA. No. 1354 of 2012 and
C.M.A. No. 1355 of 2012 are dismissed.
44. As a result
of above discussions, Suit No. 115 of 2012 is dismissed along with pending
application. All pending applications in Suit No. 124 of 2012 and Suit No. 165
of 2012 are also disposed of accordingly.