SUIT NO.115 OF 2012
Media Max (Pvt.) Ltd. VS. ARY Communication Pvt.
Ltd. & another
Date of hearing 2.1, 23.1, 12.2, and 15.03.2013.
M/s.Abid S.Zuberi & Haseeb Jamali, Advocates for the plaintiff in Suit Nos.115 & 165 of 2012 and for the defendant in Suit No.124 of 2012.
M/s.Anwar Mansoor Khan, Asim Mansoor & Mohammad Ali Talpur, Advocates for the defendants in Suit Nos.115 & 165 of 2012 and for the plaintiff in Suit No.124 of 2012.
Muhammad Ali Mazhar, J:- 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.923/2012) was fixed in this court on 31.01.2012 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 VS. 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.1046/2012 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) CMA No.4803/2012: The defendant has filed this application under Order 39 Rule 4 CPC for vacating order dated 3.2.2012.
(2) CMA No.1046/2012: The plaintiff has prayed that defendant be restrained to act as agent of plaintiff.
(3) CMA No.1685/2012: The plaintiff claims that the C.E.O of defendant has violated the court’s orders dated 3.2.2012.
(4) CMA No.1047/2012: The plaintiff wants appointment of receiver to attach the accounts of the defendant.
(5) CMA 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) CMA 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) CMA 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. VS. ARY Communication
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 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 (CMA 1352/2012) 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) CMA No.9667/2012: The plaintiff claims that the directors of the defendant have violated the court’s orders dated 7.5.2012.
(3) CMA No.7012/2012: It is an unsigned application and the contention raised are similar to CMA No.9667/2012 hence it is dismissed.
(4) CMA No.4817/2012: The plaintiff has prayed for the release of amount deposited by the defendant No.1 with the Nazir.
(5) CMA No.1352/12: The plaintiff has prayed that defendants be restrained from collecting any revenue in terms of third party contracts.
(6) CMA 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) CMA 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) CMA No.1355/2012: The plaintiff has filed this application under Order 12 Rule 6 CPC and prayed that preliminary decree may be passed to the extent of Rs.89,922,341/-.
(9) CMA No.1684/2012: The defendant No.1 claims that alleged contemnors have violated the order dated 13.2.2012.
(10) CMA No.2206/2012: The plaintiff has filed this application for restraining order against the defendants from collecting any payments from third parties.
(11) CMA No.2207/2012: The plaintiff has prayed for the appointment of Commissioner to inspect the defendant’s accounts.
(12) CMA No.2208/2012: The plaintiff has filed this application against the alleged contemnors who have committed contempt of order dated 13.2.2012.
(13) CMA No.6234/2012: The defendant No.1 wants recalling/reviewing the order dated 6.6.2012.
(14) CMA No.5910/2012: The plaintiff prays that the bank accounts and liquid assets of the defendants be attached/freezed.
(15) CMA No.6235/2012: The defendant No.1 wants that the order dated 13.2.2012 may be set-aside or modified/altered.
(16) CMA No.3360/2012: The defendant No.1 has filed this application under Order 7 Rule 11 CPC 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 24.08.2001, 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 01.07.2001 with Media Max for selling airtime for the promotion of ARY Digital, a Satellite TV Channel. By a letter dated 06.10.2005, ARY informed Media Max that the billing was to be transferred from Media Max to ARY from January 01, 2006. Media Max vide letter dated 17.10.2005 acknowledged the said letter to transfer billing from them to ARY. On 25.05.2006, 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 01.07.2001 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. 115/2012 on 31.01.2012, 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 31.01.2012, 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 24.08.2001, 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 02.02.2012 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. 115/12, Media Max only disclosed five contracts but later on, in the Suit No.165/12, 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 1046/12 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 30.06.2011, 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 165/12 (i.e. Rejoinder in CMA 1352/12) 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 vs. Tahir Saleem & 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 vs. 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 vs. 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 vs. 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. vs. 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. vs. 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. vs. 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 vs. 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. vs. 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. vs. 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 ([email protected]) 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 12 Rule 6 CPC 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 & 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 year 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 27-08-2001 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 Section 202, 204, 206 & 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 there from 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 C.M.A No.7012/2012, 9667/2012 and 2208/2012 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. Vs. Pepsico INC & 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. Vs. 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 Vs. 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.115/2012 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 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.165/2012 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 CMA No.1063/2012 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 extra ordinary 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.124/2012 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.165/2012 against ARY and on 13.2.2012 misc. applications including CMA No.1352/2012 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 leveled 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 their 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 preposition 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 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, specially 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. 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 & 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. vs. Laurel Navigation (Mauritius) Ltd., M/s. Time N Visions International (Pvt) Ltd. vs. Dubai Islamic Bank Pakistan Ltd., M/s. Fospak (Private) Ltd. vs. Fosroc International Ltd., M/s. Al-Mumtaz Agencies vs. Millat Tractors Ltd. and M/s. World Wide Trading Co. vs. 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 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 inconvenience 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.124/2012 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.165/2012 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 CMA No.1046/12 and CMA No.4803/12 filed in Suit No.124/12 and CMA No.1352/12, CMA No.2206/12, CMA No.6235/12 and CMA No.6234/12 filed in Suit No.165/12 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 CMA No.1685/2012 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 CMA No.2204/2012 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.9667/2012 with the prayer that the Director of the ARY has willfully 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.1684/2012 that the alleged contemnor Media Max has violated the court’s order dated 3.2.2012. The plaintiff in Suit No.165/2012 has also filed CMA No.2208/2012 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.1685/2012 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.2204/2012, Media Max has stated that ARY violated the order dated 3.2.2012 and in CMA 9967/2012 and C.M.A No.2208/2012, it is stated that ARY failed to deposit the amount. In C.M.A No.1684/2012, 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 willful 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, CMA Nos.1685 & 2204/2012, filed in Suit No.124/2012 and CMA Nos.9667, 2208 and 1684/2012 filed in Suit No.165/2012 are dismissed.
33. ARY in their Suit No.124/2012 filed CMA No.1047/2012 under Order 40 Rule 1 CPC 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.1353/2012 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.165/2012 the plaintiff has filed another CMA No.5910/2012 under Section 94 read with Section 151 CPC, with the prayer that the bank accounts and assets of the defendants be attached/freezed. Recently, in Suit No.167/2012, (Naseem-ul-Haq Vs. Raees Aftab Ali Lashari & 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 honored. 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.1047/2012 filed in Suit No.124/2012 and CMA No.1353/2012 and CMA No.5910/2012 filed in Suit No.165/2012 are dismissed.
35. ARY in its suit filed CMA No.3292/2012 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.6232/2012 under Section 151 CPC 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.2207/2012 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.3292/2012 and CMA No.6232/2012 filed in Suit No.124/2012 and CMA No.2207/2012 filed in Suit No.165/2012 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 assistance. 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 7 Rule 11 CPC 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 Versus 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 the party seeking relief should 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 versus Mansoor Ahmed Awan and others) & 2011 CLC 88 (Bano alias Gul Bano versus Begum Dilshad Alam & other). 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.165/2012. In the first application moved under Section 151 CPC the plaintiff has prayed that the amount deposited with the Nazir be released to them. The next application has been moved under Order 39 Rule 10 CPC 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 12 Rule 6 CPC 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 31.06.2011. 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. CPC provides and vested in the court to pass preliminary decrees under Order 20 Rules 12 to 16 and 18 and under Order 34 Rule 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) CPC 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 12 Rule 6 CPC is embedded with the language that a party may apply 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.1354/2012 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 10.02.2012 just three days before filing the Suit No.165/2012.
40. There is no doubt that Order 12 Rule 6 CPC 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 12 Rule 6 CPC 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 Vs. 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 12 Rule 6 CPC, 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 defendant are not at daggers drawn with the sponsors, advertisers and or media buying houses/companies, therefore, learned counsel for the defendant 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 defendant 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.124/2012 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.4817/12 is disposed of in the above terms whilst CMA No.1354/12 and CMA No.1355/12 are dismissed.
44. As a result of above discussions, Suit No.115/2012 is dismissed along with pending application. All pending applications in Suit No.124/2012 and Suit No.165/2012 are also disposed of accordingly.
Dated. 26.6.2013 Judge