' MUSHIR ALAM, J.--- Appellants have impugned the order dated 7-1-2010 passed by the learned Single Judge on joint statement in Suit No,12 of 2009 initially filed by the appellants Nos.2 to 4 as the plaintiffs, whereby referring the matter to be resolved through arbitration.
2. In a nutshell facts appears to be that the appellants Nos.2 to 4, MessRs, Akhtar Qureshi, Muhammad Iftikhar Qureshi and MRs, Madiha Naz and the respondent/defendant, Muhammad Imran Qureshi, are share holder/directors in UIG (Pvt.) Ltd., which company is managing and running Airport Hotel (Midway House). Appellants Nos.2 to 4 filed a suit for declaration and injunction to the effect that the 'defendant is causing hindrance in the smooth functioning of the Company as well as hotel, causing monetary losses and consequential restraining orders against the defendant/respondent from entering into the said hotel premises or causing any harm to the plaintiffs. It seems that the suit proceeded and ultimately a joint statement was filed on 7-1-2010 whereby the plaintiff No,1 (Appellant No,2) for self and for other plaintiffs signed and filed the joint statement along with the defendant. It was agreed between the parties that all the cases in different courts against each other will be withdrawn and the defendant will be allowed to enter the hotel. The defendant also undertook that excepting his family he will not take any of his friends to the hotel nor will create any nuisance. Parties reserved their rights to invoke section 43 of the Arbitration Act, 1940 to seek interim orders to discipline each other. The Court in view of joint statement signed by the plaintiff for himself and on behalf of the plaintiffs Nos.2 and 3 together with his counsel and in presence of defendant and his counsel by consent referred the matter to arbitration.
3. The plaintiffs together with UIG (Pvt.) Limited, the appellant No,1 herein rushed to this Court impugning the consent order passed on the said joint statement.
4. Mr. Nasir Maqsood, learned counsel for the appellants, contended that the appellant No,1, UIG (Pvt.) Limited was not party to the suit and the order impugned affects the affairs of the company and the hotel run by the company is equally, affected.
5. It was next contended that the defendant had earlier filed C.M.A. No,11916 of 2009 under section 34 of the Arbitration Act, which application did not find favour and the same was dismissed on 25- 5-2009 (at page 39) and the defendant took no exception to the order declining arbitration. It is stated that once the application for arbitration was dismissed, no arbitrator could have been appointed by the Court on the basis of joint statement. It is urged that the consent order is not binding on the appellant No,1 company.
6. Learned counsel for the appellants has placed reliance on a large number of cases in support of his contention including (i) Fazal Mehdi v. Allah Ditto PLD 2007 SC 343, (ii) Muhammad Sadiq Gondal v. Additional District Judge and others 1986 CLC 326, (iii) Mst. Mumtaz Danish v. Akhtar Bibi and another 1988 CLC 2134, (iv)' Mr. Manzur Qadir v. Mst. Amtul Hussain and others PLD 1971 Lahore 537, (v) Talawand and others v. Fatehdin and others AIR 1918 Lahore 126, (vi) Muhammad Raza v.
Ram Saroop and others AIR 1929 Oudh 385, and (vii) Mst. Ummakulsum v. Ghulam Rasul Khan Burgri and another AIR 1929 Sind 32. In the case of Fazal Mehdi PLD 2007 SC 343, apex court at para 18 page 352 in consideration of fact that no consent was given either by the party nor by the counsel, therefore decree based on such erroneous consent was not sustained. In the case of Muhammad Sadiq Gondal 1986 CLC 326 and Mst. Mumtaz Danish 1988 CLC 2134 and Mst.
Ummakulsum AIR 1929 Sind 32 it was held that appeal against consent decree is maintainable provided it was disputed or not consented by the parties to the suit or party filing the appeal was not party to the suit. In the case of Manzur Qadir, PLD 1971 Lahore 537, it was ruled that a person who is not a party to the proceedings may prefer appeal with the leave of the court, if the judgement prejudicially affect him. In Talawand and others AIR 1918 Lahore 126 where one of the several plaintiffs agrees to bind by the defendant's oath, other plaintiffs are not bound. In Muhammad Raza AIR 1929 Oudh 385, where a party admitting compromise on behalf of others had no authority appeal by persons no privy to such consent decree was sustained.
7. Learned counsel for the appellants has drawn our attention to the joint statement available at page 27 of the court file to demonstrate the signatures made by the appellant No,2 only and the counsel for plaintiffs and not by the appellant Nos.3 and 4 (plaintiffs Nos.2 and 3). It was stated that no consent of the plaintiff Nos.2 and 3 was obtained and therefore the order impugned is bad in law and appeal maintainable.
8. As regard competence of counsel to compromise, reliance was placed on Smt. Jamila Bai Abdul Qadir v Shankarlal Gulabehand AIR. 1975 SC 2202, in cited case Indian Supreme Court approved that the counsel have implicit authority to compromise provided he acts in good faith and acts prudently. In Thenal Amoral and another v. Sokammal AIR 1918 Madras 656, also recognizes authority of counsel to compromise but in consultation with party. In Mehra v. Ahmed and others AIR 1929 Lah. 746, Sourindra Nath Mittra v. Heramba Nath AIR 1923 PC 98 it was held that to negotiate a compromise on behalf of other, pleader must have filed express authority/Vakalatnama in the case. Case of Baqar v. Muhammad Rafiq 2003 SCMR 1401 defines power of court to correct error in the decree, Commissioner of Income Tax v. Abdul Ghani 2007 PTD 967, deals with the rectification of error under tax law, Asif Ali Ch v. The Registrar Cooperative Societies Punjan 1996 MLD 1709 and Adamjee Insurance Company v. MCB 2003 CLD 463 resound principle that what cannot be done directly cannot be achieved indirectly, last mentioned underlined citations have no relevance to the facts of the case in hand.
9. In contra, Mr. Salahuddin Ahmed, learned counsel for respondent, contended that impugned order is a consent order and no appeal lies against the consent order. It was conceded that indeed the company was not party to the proceedings as the plaintiffs in suit Appellants Nos.2 to 3 are the controlling soul and mind were very much privy to the dispute. They themselves in their own wisdom have not joined the Company in the suit and if at all they are to be blamed and not the defendant. Mr. Salahuddin submits that the joint statement was signed by the plaintiff No,1 for self and on behalf of the plaintiffs Nos.2 and 3. It was urged that now they cannot be allowed to turn around and dispute exercise of such authority by the plaintiff No,1/appellant No,2 herein. It is urged that even otherwise, the joint statement was duly signed by the counsel of the appellants Nos.2 to 4, (Plaintiffs in suit) who had the express authority to enter into compromise, he has drawn our attention to the certified copy of the Vakalatnama filed in the suit by their advocate, which expressly empowers the counsel "to compromise and or withdraw above mentioned matter on our/my behalf". In support of his contention, he has placed reliance on the case-laws reported as
(i) Dr. Ansar Hassan Rizvi v. Syed Mazahir Hussain Zaidi and 3 others 1971 SCMR 634, (ii) Bashiran Bibi and others v. Jewni and others, 1997 SCMR 1079 and (iii) Haseeb Express (Pvt.) Ltd. v. Azerbaijan Hava Yollari State concern Azerbaijan Air Lines, 1998 CLC 1390.
10. It was next urged that the dispute is in fact between the family members who are siblings and the company in fact has been formed as a namesake. Brothers and sisters have formed this company to run and manage the hotel, company is essentially a family concern and where it is so the Courts do not hesitate to pierce veil of incorporation and company is treated as Qusi- Partnership. According to Mr. Salahuddin, it is the plaintiffs-appellants 2 to 4 and the defendant, who in fact are running the show. Joinder or non-joinder of the company is insignificant or inconsequential. In support of his contention, he has placed reliance on the case-laws reported as
(i) Ladli Prasad Jaiswa l v. The Karnal Distillery Co. Ltd, PLD 1965 SC 221, (ii) MessRs, Nagina Films Ltd. v. Usman Hussain and others 1987 CLC 2263 and (iii) Mst. Qamar Loan and 5 others v. Messrs Kashmirian (Pvt.) Ltd. And 6 others PLD 1997 Karachi 376.
11. We have heard the arguments advanced by the learned counsel for the parties, perused the material available on record and thoroughly examined the case-laws cited at bar.
12. From the contents of the plaint, the plaintiffs (appellants herein) in paragraph 1 thereof have stated that the plaintiffs Nos.1, 2 and defendant are the real brothers and plaintiff No,3 is the wife of one of the brothers and they have joined hands to incorporate UIG (Pvt.) Limited, (Appellant No,1).
All the brothers joined hands to form UIG (Pvt.) Limited which company has taken over the Airport Hotel known as "Midway House" to convert it into a Five Star Hotel facility. It seems that number of litigations and suits between the parties and even the criminal prosecution was also initiated.
Indeed, the company is incorporated and for all practical purposes is treated as a separate legal entity. Admittedly, in the instant case, the company is comprised of siblings inter se. No doubt the company is a separate juristic person that could sue or be sued in its own name. The company is run, managed and regulated by its directors which may comprise of Board of Directors or such other delegate as the Board of Directors may delegate. In the instant case one need not make any effort to discover the real person behind the company as the plaintiffs/appellants Nos.2 to 3 have themselves admitted in the pleadings that the company is being run by the family membeRs,
13. Under the given facts and circumstances, in fact, it is a family concern and could be treated like a partnership concern. The plaintiffs/appellants Nos.2 to 3 are the persons who apparently formed A the majority to run the affairs but at the same time they cannot oust or deprive the other shareholders from participating into the affairs or management of the company except in due course of law.
14. It appears that to bring about the differences among the shareholder and siblings, a settlement has been arrived at to refer the dispute to arbitration and which was so referred by consent.
Contention of the learned counsel that the joint statement was not signed by the appellant Nos.3 and 4 and there was some interpolation by the respondent. The appellant No,2 (plaintiff No,1) has not disputed that the joint statement was signed by him. The Vakalatnama on the record shows that the counsel had the authority to compromise as well. There is no allegation in the appeal that the counsel acted against or B beyond the authority or for that matter the counsel before signing the consent statement had not solicited instructions from the appellants Nos.2 to 3.
15. From the memo of appeal, it is apparent that on behalf of the appellant No,1, the appellant No,2 has signed the appeal and the appellant No,2 is the person who has signed the joint statement referred to above, therefore, it is shown that the person, who signed the joint statement represents the appellant No,1 company and in fact effective control of the appellant No,2. The Vakalatnama of the counsel for plaintiffs has been placed on record along with the counter-affidavit which shows that the counsel had authority to compromise and withdraw the matter on behalf of the plaintiffs/appellants. The interest of the appellant No,1 is same and common as that of appellants Nos.2 to 4 as they are one and same and cannot take the benefit of corporate veil to upset the order passed on the said joint statement in presence of the appellant No,2 and the counsel for appellants Nos.2 to 4 and the defendant. ,16. Contention of the learned counsel that earlier the application under section 34 of the Arbitration Act was dismissed, therefore arbitration cannot be resorted. We have gone through the order dated 25-5-2009 passed on application under section 34 of the Arbitration Act learned Single Judge while dismissing the application observed. "The material available before me in the shape of plaint shows that the suit has been filed being "step in proceedings" thus circumstances determining the defendant's conduct amounts to "step in the proceeding". Though said order is not under direct attack,, despite having serious reservation as to the merits of the order, it may be observed that, even after dismissal of the application under section 34 of the Arbitration Act, law does not prohibit to resort to any method of alternate dispute resolution including and not limited to mediation or to arbitration at any stage of the proceedings. Needless to say that even at one point of time the party had not agreed to arbitration will not be a bar in perpetuity to subsequently resort to such arrangement. Even under section 21 of the Arbitration Act, parties to the suit may any time before the judgment is announced apply in writing to the court for an order of reference to arbitration. Recently section 89 read with Rule 1A to Order X, C.P.C. Has been added in C.P.C., the Court to bring an end to the controversy and for expeditious disposal of case by consent of the parties may adopt any alternate method of dispute resolution including mediation, conciliation or any other means, which invariably includes arbitration. Therefore contention of learned counsel for the appellant that once an application under section 34, C.P.C. Has been dismissed no resort to arbitration can be had is not sustainable.
17. In consequence, we do not find any merit in this appeal, which is accordingly dismissed along with the listed application.