KARACHI, July 7: The Sindh High Court has allowed an application of a pay-phone company which had sought injunction against disconnection of lines of its pay-phones till the adjustment of rebate and interconnecting its lines by the PTCL.

Justice Zahid Kurban Alvi gave the judgement in suit No 46 of 2000 through which plaintiff Telecard Ltd and made the Pak Telecommunication Limited and others, respondent.

The plaintiff had filed a suit for recovery, declaration and injunction. The plaintiff was providing card-operated pay telephone service business to the public in Pakistan since 1992, pursuant to a license granted by the federal government in exercise of its powers under section 4 of the Telephone Act 1885.

In pursuance of the license, the plaintiff undertook a rapid programme for installation of its pay-phone units and establishment of supporting infrastructure. To obtain the vast capital investment for these operations, the plaintiff became the first telecommunication sector company in Pakistan to invite public subscription of its shares on the stock exchange in July, 1995.

With its capital resources, the plaintiff had during a short period up to July, 1996, installed thousands of card phones in 55 major cities of the country and built sizable infrastructure. The Karachi market had huge business on account of being the largest urban and commercial centre of Pakistan.

Up to 30th June 1995, the plaintiff had installed sizable pay-phone units in Karachi. The plaintiff additionally made investment in importing pay-phones and a further order for 1,000 pay phones was placed with the supplier in France. This investment was undertaken with shareholder’s equity and bank borrowing to both sources, the plaintiff had promised return and repayment respectively.

The federal government through its order (dated July 1, 1995) passed in the interest of public safety prohibited the transmission of all messages, inter alia, through card phone services within and outside the city of Karachi.

The defendant had sent a legal notice to the plaintiff in response to which the plaintiff wanted to file a constitutional petition before the Lahore High Court Bench at Rawalpindi inter alia requiring the defendant No. 2 to provide adequate compensation to the plaintiff for loss and injury that it has suffered on account of the prohibitory sanction by defendant No. 2. The loss exceeded Rs2,261.00 million.

In response to the legal notice, the defendant No. 2 through Pakistan Telecommunication Authority (PTA) in terms of its letter agreed to restore the pay-phone services in Karachi and offered an interim relief package in consideration of and upon the condition that the plaintiff withdraw claim for compensation. The plaintiff accepted the interim relief package as an interim relief measure in exception of further and more complete relief package to be negotiated.

According to the plaintiff, the defendant No. 1 failed to notify the modus operandi for implementation of the interim relief package for a substantial period of time. The defendant No. 1 also failed to implement the interim relief package in accordance with its terms.

According to the plaintiff, the defendant delayed the calculation and payment / adjustment of rebate relief discount. The calculation of the amount of rebate relief discount was carried out contrary to the formula specified in the interim relief package itself.

According to the plaintiff, the formula for calculation of the relief rebate discount clearly required a single percentage to be applied to the entire amount of the billing and the plaintiff was entitled to discount of 15 per cent on the entire billing amount of Rs 10 million.

Defendant No. 1 insisted on prior full payment of all bills by the plaintiff before any adjustment / payment for relief rebate discount was to be made available to the plaintiff, which was contrary to the intent of the interim relief package and caused undue and uncalled for financial/liquidity constrains on the plaintiff.

According to the plaintiff, the defendant No 1 had further sought to unilaterally terminate the applicability of the interim relief package with effect from Aug 30, 1998.

The plaintiff claimed that such a termination was without any basis or justification.

Through CMA No. 159/2002, the plaintiff had sought injunction against disconnection of lines of pay-phones till the adjustment of rebate and interconnecting his lines of pay phones Rs349,953.212 on the ground that applications being CMA No. 168/2000 and No. 4386/2001 filed by the plaintiff were allowed and M/S AF Fergusons and Co., reputed Chartered Accountants were appointed to determine the amount of rebate payable by the defendants to the plaintiff.

In rebuttal to the contentions in the injunction application defendant No.1 filed their counter-affidavit alongwith certain documents and submitted that the rebate was granted only for the period commencing from the restoration of service following the lifting of the prohibitory order on Jan 20, 1997 and ending on 21-12-1999. The relief package was limited to the telephones disrupted in the Karachi / Hyderabad region alone and not to the country-wide billings raised by the defendant No.1 on the plaintiff.

The fact that the rebate was admissible only in respect of affected phones was reiterated by the defendant No.2 vide its letter dated Feb 19, 2000.

It was submitted by the defendant under the Pakistan Telecommunication (Re-organization) Act of 1996, compensation to the plaintiff for the acts, tortuous or otherwise of the Federal Government was beyond the powers of defendant No 2.