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BUSINESS LAW (HANDOUT No. 2)

Federation of Pakistan through the Govt. of Pakistan, Ministry of Defence &

2 others vs. IPHCO Int. Pharmaceutical Corp. Lahore

Appellants, Respondent & Nature of the Case:

Appellants: Federation of Pakistan through The Govt. of Pakistan,

Ministry of Defence & 2 others

Respondent: IPHCO Int. Pharmaceutical Corp. Lahore

Nature of The Case: Sales Of Goods Act

Facts of the Case:

Case was 1stsuited before the Trial Court by the respondent in this court

(High Court) for the recovery of money amounting to Rs. 305,200 with

interest as it entered into a contract for the supply of Glucose Powder,

64,000 Kg. For a total consideration of Rs. 13,19,680 at 20.62 per Kg on 27-

02-1984. Case went in favor of IPHCO Corp.

The Supply was to be made in Installments, the 1stinstallment was made and

was accepted but the appellants in this court (Defence Ministry) didnt

accept the 2ndInstallment of 52,000 Kg. and rejected it on 21-02-1985. The

reason was provided that the said supply couldnt pass the Foreign Sugars,

Soluble Starch & Dextrin's Test.

IPHCO Pharmaceutical after continued fruitless efforts for negotiation, sent

a sample from the same batch of supply, made to the appellants (Defence

Ministry), to the National Institute of Health Islamabad where it was

opinioned that the supply of Glucose made is in accordance with the said

test.

But, in spite of this, the supply was not accepted.

The respondent in this court filed a suit in the Trial Court claiming damages

and for the recovery of money for this unlawful and unjustifiable rejection of

the supply.

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BUSINESS LAW (HANDOUT No. 2)

Position Of The Appellants:

The submission of the learned counsel of appellants is that the supply

couldnt pass the requisite test.

Position Of The Respondent

The position of the respondent is that she had been making continuous

efforts for the completion of the contract and even got the sample tested by

the National Institute of Health with a positive result.

Judgments:

The High court dismissed the case in the favor of IPHCO and complied with

the trial court with few amendments in the Judgment.

The court said that the evidence provided by Respondent (IPHCO) was valid

and as the Appellants couldnt provide any evidence pointing that the said

supply was not in accordance with the requisite test, IPHCO is entitled to the

damages claimed.

IPHCO was entitled with the following damages.

The Price of the Glucose Supplied.

The cost of storage by IPHCO amounting Rs. 18,000.

The Profit that IPHCO could have earned otherwise amounting Rs. 200,000.

The sum total of Rs. 14,55,200 was to be recovered from The Appellants in

this court.

Case Dismissed

Presented By: Hamid Sarfraz.