JAWWAD S. KHAWAJA, J. - This appeal has been filed by Shoaib Ahmad Faridi (defendant) to impugn the judgment and decree dated 6.4.2006 passed by the learned Banking Court No. II, Faisalabad, whereby a suit filed by United Bank Limited (respondent No, 1) for recovery of a sum of Rs. 46,09,311/- has been decreed together with cost of funds. The decree has been passed jointly and severally against the appellant-defendant and three other defendants, namely, M/s. Xebec Textiles (defendant No. 1J; Yahya Ahsan Baig (defendant No. 3) and Sh. Riaz-ul-Haq (defendant No. 4). The appellant has not impleaded these three defendants as respondents in the present appeal.
The record of the learned Banking Court was sent for and it was noted by us in our order dated 12.9.2006 that a question as to the competence of the appeal had arisen on account of the appellant's failure to implead these three defendants.
2. Thereafter on 28.9.2006 the appellant filed an application (CM 2-C/2006) under Order 41, Rule 20 read with Section 151, C.P.C. And Section 5 of the Limitation Act for impleading the above-named defendants as "proforma respondents". This application has been resisted by the respondent Bank which has sought the dismissal of the same as well as the appeal on account of the appellant's' failure to implead all necessary parties as respondents, It is this application which requires adjudication in the first instance.
3. Learned counsel for the parties have cited extensive case-law to support their respective contentions. Learned counsel for the Bank referred to the case titled Mst. Murad Begum, etc. v.
Muhammad Rafiq, etc. (PLD 1974 SC 322) and the case titled Mst. Maqbool Begum, etc. v. Gullan and others (PLD 1982 SC 46) to contend that failure to implead all necessary parties in an appeal renders the same incompetent. We have gone through the cited precedents and note that the same proceed in circumstances which are different from the facts of the. Present case, In both cited cases, the matter before the Hon'ble Supreme Court arouse out of an indivisible decree passed against the defendants therein, but only one defendant had assailed the same without impleading the other co-defendants as respondents.. It was field by the Hon'ble Supreme Court that failure to implead the other co-defendants was a fatal flaw in the appeal which was, therefore, liable to be dismissed on his score. ,4. Learned counsel for the respondent Bank also referred to the cases titled Abdul Qadir and 5 others v. Muhammad Umar and others (PLD 1987 Lahore 232), Muhammad Suleman v. Abdul Rashid and 13 others (PLD 1987 Lahore 387), Sher Muhammad and 27 others v. Muhammad Mumtaz-ul-Islam through Legal Heirs and 6 others (2001 MLD 1964), Mst. Jannat Bibi and others v.
Barkat Ali and others (1987 MLD 15) and Muhammad Ibrahim and another v. Jalal Din (2000 CLC 165). These precedents from this Court also arise in appeals where the decrees assailed were indivisible although, in the two cases last referred to it was also observed, obiter, that failure to implead a necessary party was, by itself, sufficient to dismiss an appeal.
5. On analyzing the cases cited on behalf of the respondent Bank it is, apparent that the ratio of these precedents is premised on decrees which were indivisible, In the preset case the decree is not indivisible as will appear from the facts considered below. We, therefore, do not find the above- referred precedents to be of help in deciding the present appeal.
6. It now needs to be seen if defendants Nos, 1,3 and 4 were merely proforma parties for the purpose of this appeal as urged on behalf of the appellant and, secruinity, if they can be impleaded as respondents at this stage when the period of limitation for an appeal against them has already expired. A determination of these questions will also entail consideration of the averment made in this application that "even if the appeal is decided in favour of the appellant, the rights of the remaining defendants would not be affected."
7. According to learned counsel for the appellant the Court had the power, under Order 41, Rule 20, C.P.C., to allow a party to be impleaded at any stage of an appeal. To support this contention he referred firstly, to the case titled Said Muhammad and others v. M. Sardar and others (PLD 1989 SC 532). We have gone through the cited judgment and note that it does not advance the case of the appellant. In the said case, it was held that the omission to implead one of the defendants was a result of inadvertent error arising from the mistake of a typist. This is not the case urged before us.
Learned counsel for the appellant, in fact, argued that the appellant could have filed his appeal alone and that the three defendants mentioned above were merely proforma parties, It Is for this reason that in the application (CM 2-C/2006) also he has prayed for permission to implead the said defendants as "proforma respondents".
8. It may be noted that defendant No. 1 namely, M/s. Xebec Textiles wa sued by the respondent- Bank as a partnership firm to which financial facilities had been advanced by the Bank. The appellant and defendant No. 3 were impleaded as partners of the aforesaid firm while Sh. Riaz-ul- Haq (defendant No. 4) was sued on the basis of a mortgage created by him over his property to secure the finance advanced by the respondent Bank to M/s. Xebec Textiles, In these circumstances, it cannot be said that defendants Nos. 3 and 4 were either proforma parties or that they would remain unaffected if' the present appeal is accepted. A partner is liable to repaying the debts of a partnership firm of which he is a partner, It has been averred by the appellant in his application/written statement under Section 10 of the Financial Institutions (Recovery of Finances)
Ordinance, 2001 that he had - ceased to-be a partner of M/s. Xebec Textiles. This averment, however, has not been accepted by the learned Banking Court. If the appellant succeeds before us and it is held that he is not liable to discharge the financial obligations of M/s. Xebec Textiles, defendant No. 4 will certainly be affected adversely by such judgment because he has not been sued as a partner and his property has only been mortgaged as a third party security for the liabilities of M/s. Xebec Textiles. If the impugned decree is affirmed, defendant No. 4 may have a right before the executing Court, to apply for the attachment and sale of the properties of the appellant before his property is put to auction, (n the alternate, he would have a right to recover from the appellant (in full) and from defendant No. 3 (ratably) the amount realized from the. Sale of his property and applied towards satisfaction of the decree. Likewise, defendant No. 3 will also be affected if the present appeal is allowed because his liabilities as a partner of M/s. Xebec Textiles will be increased without a chance to claim ratable contribution from the appellant under Section 146 of the Contract Act.
9. In the foregoing circumstances, defendants Nos. 3 and 4 have a valid interest in contesting this appeal. They, therefore, cannot be termed proforma parties.
10. Learned counsel for the appellant also referred to the case titled Mst. Sardar Begum v.
Muhammad Anwar Shah and others (1993 SCMR 363) to support his argument that the present application can be allowed. ^Having gone through the cited precedent we find the same to be clearly distinguishable on facts, In the said: case, the legal representatives of a deceased plaintiff were omitted from the array of parties, In the present appeal it is the defendants themselves (hot their-legal representatives) who are sought to be impleaded, It was observed by the Honourable Supreme Court in the cited case that "there is a marked distinction between adding or substituting a party and bring on record the legal representatives of a deceased, party". The case of Mst. Sardar Begum supra therefore, cannot be accepted as authority for deciding this case.
11. Learned counsel for the appellant also referred to the case titled Punjab Road Transport Board through its Chairman, Lahore v. Abdul Ghafoor and 6 others (PLD 1989 SC 541) to urge that Order 41, Rule 20, C.P.C, gave ample power to an Appellate Court to implead any omitted party at any stage.
We are afraid, this is not the ratio of the cited case, In fact, the Hon'ble Supreme Court observed in its judgment that the High Court, while rendering its judgment in appeal, had not considered the implications of the aforesaid rule. The matter was, therefore, remanded to the High Court, inter alia, for consideration of the effect of Order 41, Rule 20, C.P.C, on the outcome of the case.
12. To sum up of the above discussion, we find that the omitted defendants were necessary parties.
They will be direct affected if the appeal is allowed. The failure of the appellant to implead them within, the period of limitation must, therefore, result in the dismissal of this application.
Main Case
13. In view of the foregoing discussion, we find that the appeal is not competent on account of the appellant's failure to implead necessary parties as respondents in the appeal. The appeal is, therefore, dismissed.