ABID AZIZ SHEIKH J. -- This RFA has been filed under Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 ("FIO 2001") against the impugned judgment and decree dated 30.04.2012 passed by the Judge Banking Court No-Ill, Lahore, rejecting the plaint of the appellant under Order 7, Rule 11 of the Code of Civil Procedure, 1908 ("CPC").
2. Brief facts are that earlier suit bearing COS No. 18 of 2001 filed by the appellant was decreed on 09.04.2003 in terms of compromise dated 24.03.2000 according to which outstanding amount of Rs. 137/- Million was payable by the respondents in instalments. Subsequently the appellant and respondents mutually entered into reschedulings of the aforesaid amount and number of instalments vide agreements dated 14.09.2004, 25.11.2006 and finally on 17.4.2008. On failure to pay the remaining payment the appellant filed a fresh suit No. 745/2010 on 18.03.2010 for recovery of Rs. 30403391/- before the Banking Court, Lahore. The plaint in the said suit was rejected under Order 7, Rule 11, CPC vide impugned judgment and decree dated 30.4.2012 by the Banking Court mainly on the ground that the appellant should have filed execution petition under Section 47 of the CPC for execution of the consent decree dated 09.04.2003 instead of filing a fresh suit.
3. The learned counsel for the appellant/plaintiff argued that the learned Banking Court failed to appreciate that after passing of the consent decree dated 09.04.2003 there were three subsequent agreements dated 14.09.2004, 25.11.2006 and 17.4.2008. Which gave rise to fresh cause of action and for which the only remedy was to file a separate suit and not execution petition under Section 47, CPC. It is argued that the consent decree dated 09.04.2003 was novated in terms of Section 62 of the Contract Act, 1872 and therefore the same was not executable by the executing Court. It is further argued that through subsequent agreement the decree was adjusted under Order 21, Rule 2, CPC and no such agreement was ever produced before any Executing Court for its enforcement under Section 47, CPC. Submits that the subsequent agreements did not keep the decree alive which could be executable. The learned counsel for the appellant place reliance on the cases of Ram Das v, Ali Bahadur (AIR 1933 Peshawar 53), Lachhumal Morumal v. Atta Muhammad Khan Nabibaksh Khan and others (AIR 1939 Sindh 343), Surput Singh and others v. Mahraj Bahadur Singh (AIR 1937 Cal 222) Nagendra Nath Nagendra Nath Manjumdar v. Kshitish Chandra Ghose (PLD 1958 Dacca 179), Ch. Muhammad Nawaz v. Ch. Rahmat Ali and others (1994 SCMR 349), Messrs Amin Cotton Co. Ltd. v. Messrs Muhammad Jamil & Co. (PLD 1967 Karachi 795) and Water and Power Development Authority through Chairman, WAPDA, Lahore v. Mian Abdu/ Rauf (PLD 2002 Lah 268).
4. Conversely the learned counsel for the respondents/defendants argued that the consent decree dated 9.4.2003 was executable before the Banking Court under Section 47, CPC and the executing Court could also take into consideration events of agreements and understandings arrived between the appellant and respondents after passing of compromise decree. Further submits that the subsequent agreement did not materially change the terms and conditions of the consent decree dated 9.4.2003 and the only change made, was related to quantum and mode of payment which does not amount to novation of contract, and no fresh suit could be filed. Further, argued that the fresh suit was hit by res judicata under Section 11, CPC.
5. We have heard the learned counsel for the parties and have also examined the record with their able assistance.
6. It is an admitted position that a consent decree was passed by this Court in Banking jurisdiction on 09.4.2003 based on compromise agreement dated 24.03.2003, according to which the respondents were liable to pay Rs. 137/- Millions as settlement amount payable in instalments specified in the schedule. Through subsequent agreement dated 14.9.2004, 25.11.2006 and 17.4.2008, the aforesaid decretal amount and the schedule provide there under was rescheduled. The arguments of the appellant that subsequent agreements amounts to novation and it give rise to fresh cause of action, which was not executable under Section 47, CPC is not tenable for the reasons that it is not the case of. The appellant that total outstanding liability has been repaid or any condition is incorporated in the rescheduling agreements which goes beyond the scope of the suit and compromise decree meaning thereby that it is not argued that new principal debtors or fresh guarantors were introduced or old properties are released and new properties were mortgaged or such similar conditions were agreed in the subsequent agreements which were beyond the scope of the suit, compromise decree and outside the jurisdiction of the Executing Court. We are of the view that in absence of any such material change in the compromise decree the Executing Court would be in a position to execute the! Decree under Section 47, CPC and Executing Court can also take into consideration event of agreements and understandings arrived at between the decree-holder bank and the judgment-debtors even after passing of the compromise decree, In this context reference is made to law laid down by this Court in Industrial Development Bank of Pakistan through Vice President IDBP v. Messrs Crystal Chemicals Limited through Director/Guarantor Crystal Chemical Ltd. And 9 others (PLD 2009 Lahore 176) where it is held as under:- "Effect of the events, understanding, agreement arrived at between the decree-holder and the judgment-debtors after the passing of the decree:-- The learned counsel for the applicant judgment- debtors submitted that this Court may take into consideration events, and agreements and understandings arrived at between the decree-holder bank and the applicant judgment-debtors after the passing of the compromise decree. The Court needs to consider whether subsequent events, agreement and understandings, if any, arrived at between the parties which result in variation, modification and change in the terms and conditions of a decree can be taken into consideration while executing a decree. On this issue the learned counsel for the judgment- debtor referred to Oudh Commercial Bank Ltd., Fyzabad v.
Thahurain Bind Basni Kaur and others (AIR 1939 (Privy Council) 80), Allah Diwata and others v.
Allah Diwata and others (1996 CLC 1399), - Fakir Abdullah and others v. Government of Sindh (PLD 2001 Supreme Court 131). In Fakir Abdullah's case the august Supreme Court of Pakistan held that Executing Court in exercise of its jurisdiction under S. 47, CPC could take into consideration subsequent events even after passing of the decree. Such jurisdiction could be exercised in order to ensure that the process of law might not be abused and the judicial pronouncements should be implemented effectively instead of making them ineffective on account of their inexcusability.
In Allah Diwata and other v. Allah Diwata and others supra it was held that "All questions between parties relating to execution, discharge, or satisfaction of decree would determined by executing Court in terms of S. 47, CPC while adjustment and satisfaction of decree would be possible under Order XXI, Rule 2, CPC. Parties were thus at liberty to adjust their rights and liabilities accrued under decree or decree-holder can discharge judgment-debtor of his obligation under decree", In Oudh Commercial Bank Ltd. Fyzabad v. Thakurain Bind Basni Kaur and others it was laid down that the Code contains no general restriction on the parties, liberty of contract with reference to their rights and obligations under the decree, In the absence of express statutory authority it is not possible to regard, Order XX, R.10 as excluding any possibility of parties coming to a valid agreement for time to which the Court under S.47 will have regard.... In the presence of these authorities which clearly lay down that executing Court under S.47 CPC can look into events subsequent to the passing of the decree and give effect to agreements arrived at between the decree- holder and the judgment-debtors, the Court has no doubt that it can look into and implement agreements which have been made by the parties for the satisfaction of the decree subsequent to the passing of decree."
7. The aforesaid judgment also refers to and follow the law laid down by the august Supreme Court in the case of Fakir Abdullah and others v. Government of Sindh through Secretary to' Government of Sindh Revenue Department, Sindh Secretariat, Karachi and others (PL.D 2001 SC 131) where it is.
Held that executing Court in exercised of its jurisdiction under Section 47, CPC could take into consideration subsequent events, even after passing of the decree and such jurisdiction is exercised in order to ensure that process of law might not be abused and the judicial pronouncement should be implemented effectively instead of making them in effective on account of their inexecutable.
8. We are also not in agreement with the learned counsel for the. Appellant that changed figure of remaining outstanding liability and schedule of payment, will amount to adjustment of decree under Order 21, Rule 2, CPC. We also do not agree that such alterations in subsequent agreements will novate the compromise decree dated 09.04.2003 under Section 62 of Contract Act, 1872. The perusal of subsequent agreements dated 14.09.2004, 25.11.2006 and 17.04.2008 makes it evident that they all refer to compromise agreement dated 24.03.2003 which was the subject-matter of the compromise decree dated 09.04.2003 and it is only the reduction of amount and schedule of payment which was changed in the subsequent agreement, which does not amount to novation of the compromise decree dated 09.04.2003. In this context reliance is placed on the cases Barkat Ullah through Legal Heirs and 12 others v. Wali Muhammad through Legal Heirs and 3 others (1994 SCMR 1737), Mrs. Mussarat Shaukat AH v. Mrs. Safia Khatron and others (1994 SCMR 2189), Messrs Muhammad Amin Muhammad Bashir Ltd., Karachi v. Messrs Star Oil & Ice Mills Ltd., Multan (PLD 1973 Karachi 409).
9. We have also gone through the case-law relied upon by the learned counsel for the appellant which are distinguishable, In all those cases either the decree were adjusted in the manner that the terms of the decree was altered to perform something else or those compromise decrees became un-executable by the Executing Court, in view of the changed circumstances in the compromise decree, In Ram Das's case (supra), after decree, there was an agreement with the surety for payment of entire decretal amount and principal was not party to it and Court held that such agreement amounts to adjustment of decree, In Lachhumal Morumal's case {supra) after the compromise decree, the mortgaged properties were released and .Terms ^ were substantially varied, In Surput Singh's case**{supra) charged properties were released against payment and new terms were added which were totally changed and not executable, In Nagendra Nath Nagendra Nath Manjumdar's case, {supra), the terms of subsequent compromise went far beyond the scope of the original suit, In Ch. Muhammad Nawaz's case {supra), the execution of consent decree of specific performance was not allowed as the sale-deed included the land which was not subject-matter of the consent decree and consent decree was amended unilaterally by one of the parties, In M/s. Amin Cotton's case {Supra), the parties specifically intended to rescind the original agreement which was the subject-matter of the consent decree, In Water and Power Development Authority through Chairman's case {supra) the issue was whether by amendment, 15% compulsory charges given in the consent decree were waived.
In all the aforesaid cases either the compromise decrees were not executable or their terms were substantially varied which gave rise to new cause of action.
10. We have already discussed that in the present case there are no such changed circumstances which are beyond the jurisdiction of the executing Court under Section 47 of CPC, therefore, we are of the view that the appellant could file execution before the Executing Court under Section 47, CPC and after the consent decree, the fresh suit was not maintainable under Section 11 of CPC. In this context reliance is placed on Agricultural Development Bank of Pakistan through Branch Manager Principal Officer v. Muhammad Suleman Khan and others (2011 CLD 523), Muhammad Nazir and others v. Muhammad Arif and others (2006 MLD 187), Ch. Rehmat AH and other Versus Custodian, Evacuee Property, Lahore and others (PLD 1966 Karachi 31) and Mussarat Shahnaz v. Suleman Gillani (2003 MLD 1740).
11. In view of the above discussion, this appeal has no merits and the same is dismissed.