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Damages for Mental Suffering do not require Specific Evidence and fall under the Category of General Damages --- Islamabad High Court, Islamabad

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Damages for Mental Suffering do not require Specific Evidence and fall under the Category of General Damages --- Islamabad High Court, Islamabad

Islamabad 14-09-2024: The Islamabad High Court has dismissed an appeal by Pakistan International Airlines (PIA), upholding a lower Court’s decision to award Rs. 3 million in damages to a retired employee, Muhammad Saleem Sherwani, for mental suffering and wrongful withholding of his post-retirement benefits.

The Court, in its judgment announced by Mr. Justice Babar Sattar, affirmed that Sherwani, who served PIA for 37.5 years, was entitled to his retirement benefits, including provident fund, gratuity, and pension, which were wrongfully withheld following his retirement. The judgment ruled that PIA had failed to provide legal justification for withholding these benefits and noted that the inquiry initiated against Sherwani after his retirement had not substantiated any allegations of wrongdoing.

Sherwani, a former PIA employee and national hockey player who represented Pakistan in the Olympics, took premature retirement in 2008 due to what he claimed was punitive action by PIA’s then Managing Director. The airline withheld his retirement benefits, initiating an inquiry against him for alleged abuse of power during his tenure at PIA’s Manchester office. In response, Sherwani filed a lawsuit seeking recovery of his benefits and damages for mental agony.

The Civil Court initially decreed the suit in Sherwani’s favor, granting him his due benefits and Rs. 1 million in damages. However, the case was remanded for further hearing, where the Court reaffirmed its decision, increasing the damages to Rs. 3 million.

In its appeal, PIA contested only the Rs. 3 million damages awarded for mental suffering, arguing that Sherwani had provided no evidence to substantiate his claims of mental torture. However, the Islamabad High Court rejected this argument, noting that damages for mental suffering do not require specific evidence and fall under the category of general damages. The Court emphasized that Sherwani’s testimony and the evidence presented were sufficient to establish that the withholding of his benefits was wrongful and caused him financial loss and mental anguish.

The Court also highlighted key legal principles under Section 73 of the Contract Act, 1872, which governs compensation for breach of contract. According to the judgment, damages are recoverable for losses that naturally arise from a breach of contract, including financial loss and mental suffering.

Mr. Justice Babar Sattar referred to several key legal precedents, including Hadley Vs. Baxendale ([1854] 9 Ex 341), which outlines the foreseeability test for damages, and A. Ismailjee & Sons Ltd. Vs. Pakistan (PLD 1986 SC 499), which affirms this test in Pakistan’s legal context. The Court also cited Miss Irshad Jehan Vs. P.N.S.C (1999 CLC 192) and Pakistan International Airlines Corporation Vs. Syed Ali Raza Rizvi (1996 CLC 627), among other cases, to support the recognition of general damages for mental suffering.

The judgment further observed that PIA had no legal authority to carry out an inquiry against a retired employee and that the withholding of Sherwani’s benefits was a wrongful act. The Court stated that even if PIA had deposited Sherwani’s withheld amounts in a savings account, he would have earned significant interest, thereby compounding the financial loss.

The Islamabad High Court dismissed PIA’s appeal and ordered that Sherwani be paid interest on the decretal amount from the date of the judgment until full payment. Additionally, PIA was directed to pay Rs. 500,000 as litigation costs for the prolonged legal battle. The Court criticized PIA for pressing frivolous arguments in its appeal, contributing to the delay in the case’s resolution.

This ruling reaffirms the principle that damages for breach of contract, particularly those related to wrongful withholding of financial benefits and mental suffering, are compensatory in nature and aim to restore the aggrieved party to the position they would have been in if the contract had been fulfilled.