Rasaal Hasan Syed, J. This civil revision stems from order dated 09.4.2018 of the learned Addl. District Judge, Mianchannu, whereby application of the petitioner under section 12(2), C.P.C., for setting aside of decree dated 03.5.2017 was dismissed.
2. Facts as will be necessary for decision of the case are that Haji Abdul Hakeem, respondent, instituted a suit under Order XXXVII, Rule 1, C.P.C., for recovery of a sum of Rs.15,30,000/-, which was contested. Issues were framed on 30.6.2016 and the case was set up for evidence. On 18.4.2017 the parties jointly expressed their intention for resolution of the controversy through their counsel who also gave their willingness to resolve the same as referees.
The parties were directed to contact their counsel who were required to submit a report on 25.4.2017. It seems that on 03.5.2017 the respondent/plaintiff along with his counsel Mehr Ghulam Shabbir Souroo, Advocate, appeared in court. Malik Muhammad Asghar Khokhar, Advocate, also appeared for the petitioner/defendant. In his statement, Malik Muhammad Asghar Khokhar, Advocate, requested the court that in the light of report Ex.C.1, a decree be granted in favour of the respondent. Mehr Ghulam Shabbir Sohroo, Advocate, counsel for the respondent/plaintiff concurred with Malik Muhammad Asghar Khokhar, Advocate, and pressed for a decree in the light of report Ex.C.1.
3. It appears that in view of the statements made the learned Addl. District Judge decreed the suit vide order dated 03.5.2017 in favour of respondent/plaintif f observing that the report Ex.C.1 be treated as a part of decree.
Significantly , the learned Addl. District Judge expressed in his order that at the time when the statement of Malik Muhammad Asghar Khokhar , Advocate, was being recorded, the petitioner was not present; who appeared in court thereafter , and stated that he did not know as to what was the report and that the report of the referees was against law and facts. Despite taking note of this objection the learned Addl. District Judge proceeded to pass a decree on the assumption that the petitioner , having appointed his counsel in the suit, could not resile from his statement. It is, therefore, manifest that the alleged statement was recorded in the absence of petitioner and that before the proceedings were over or the order was passed, petitioner entered appearance before the court, expressed his reservation and challenged the validity of the report.
Notwithstanding the same the court proceeded to pass a decree.
4. Petitioner filed an appeal (RFA No. 127/2017) in this Court to assail the decree granted by the learned Addl.
District Judge. On 07.12.2017 the appeal was disposed of with the observation that "the appellant if advised, may avail alternate remedy ... in accordance with law". The petitioner accordingly moved application under section 12(2), C.P.C., for the annulment of decree dated 03.5.2017 raising serious allegations of fraud and vehemently alleging that the statement of counsel was without his consent and was otherwise unauthorized; that the decree was obtained collusively, the petitioner had never authorized or instructed the counsel to make such conceding statement. And that the alleged referee/counsel without authorization and in collusion with the opposite side, submitted mala fide report which did not bear the signature or thumb-impression of petitioner. It was further averred that no inquiry was ever held, no effort was made to find out the facts in reality, and Malik Muhammad Asghar Khokhar, Advocate, was never vested with the authority to make any statement or concede the grant of decree on the basis of Ex.C.1; and that the report was illegal, which was collusively prepared and on the basis thereof the decree was obtained. The learned Addl. District Judge vide order dated 09.4.2018 dismissed the application under section 12(2), C.P.C., which order is being scrutinized in the instant petition.
5. Learned counsel for the petitioner argue d with vehemence that no decree could be passed on the basis of alleged "faisla" of the referees without allowing an opportunity to file objections; the petitioner never consented to the passing of decree on the basis of the alleged report; the statement of the alleged referee was without the consent and permission of petitioner and even otherwise the report was void ab initio and without jurisdiction as it was not based on the personal information and knowledge of the referee. And that the petitioner having appeared before the court prior to the passing of the impugned order and registered his grievance, the court could not proceed to decree the suit and also that the application could not be decided without framing an issue, with an opportunity to produce evidence. In response the order has been defended by the learned counsel for the respondent.
6. For the purpose of resolving the proposition involved in the case it will be neces sary to first reproduce the order dated 18.4.2017 of the learned Addl. District Judge, appointing referees in the case. It reads as under: "At the very outset, both the plaintif f and defendant submitted jointly that they are ready to get resolved their controversy by their counsels, present in the court.
Both the learned counsels for the parties have also jointly shown their willingness to resolve the controversy between the parties being their referee. They have signed on the margin of order sheet in this regard.
Both the parties are directed to contact their counsels and both the learned counsel for the parties are directed to submit their report in this regard on 25.4.2017 before the court positively".
It appears that on 03.5.2017, respondent/ plaintif f along with counsel Mr. Ghulam Shabbir Souroo, Advocate, as well as Malik Muhammad Asghar Khokhar , Advocate, counsel for the petitioner/defendant appeared in the court and recorded their statements wherein a request for grant of decree in the light of report Ex.C.1 was made, on which the following order was passed: "O R D E R 03.05.2017.
On 18.4.2017, both the parties had shown their willingness to resolve their controversy through their counsels. Both the learned counsel for the parties had also shown their willingness to resolve the controversy between the parties being referees. Today , both the learned counsels for the parties have submitted their reports and got recorded their statements that claim of the plaintif f is true, therefore, suit be decreed.
Defendant, at the time of recording of statements of learned counsel for the parties, did not appear and when the plaintiff along with counsel for parties left the court, he appeared before the court and stated that he does not know what report has been submitted by the counsels and the report of referees is against the law and facts. It is observed that as the defendant himself appointed Malik Asghar Khokhar Advocate as his counsel showing his confidence and he showed his confidence on his counsel on 18.4.2017 to resolve his controversy being referee.
So, he cannot resile from his statement. Keeping in view the statements of learned counsels for the parties and their report Ex.C.1, present suit is hereby decreed in favour of the plaintiff and against the defendant. Report Ex.C.1 should be treated as part of the decree. No order as to costs. Decree sheet be prepared accordingly."
7. The bare reading of order dated 18.4.2 017 shows that the parties had expressed their willingness to resolve the controversy inter se the parties through their counsel as "referees", which assignment the learned for the parties had accepted. The term "resolution of dispute" denotes determination and express ion of decision. Notwithstanding the fact that the reference to the learned counsel was as "referees" yet the scope of their authority was to resolve the dispute between their clients which of course would fall in the domain of an arbitrator . The question that warranted serious attention of the court was as to whether the counsel of parties had acted as "referees" as per Article 33 of Qanun-e-Shahadat Order , 1984, which reads as follows: "33. Admission by persons expressly referred to by party to suit: -- Statements made by persons to whom a party to the suit has expressly referred for information in reference to matter in dispute are admissions."
Illustrations The question is, whether a horse sold by A to be is sound.
A says to B: "Go and ask C. C knows all about it". C' s statement is an admission.
Deeper consideration of Article 33 supra, with the illustration given therein, shows that the referee could only furnish information to the court as per his personal knowledge and that acquisition of such knowledge must precede his appointment and not be subsequent thereto. Such information when furnished, assumes the character of an admission of the parties and results in a decision of the lis on the basis thereof. The word "decision" or resolution of dispute after receiving evidence or "faisla" have been a subject-matter of consideration in number of cases wherein the term was interpreted to mean settlement, conclusion, forming a judgment and making up one's mind implying exercise of judicial determin ation as final and definite result of examining the question. There can be no denying the fact that where a person is called upon to decide the suit after receiving evidence and hearing arguments or collecting material, etc. his role cannot be termed as of a "referee". In fact, there is considerable difference in a reference to the referee who is expected to impart/furnish information to the court according to his own knowledge and belief, and in the case where one acts as an arbitrator who is required to resolve the dispute by receiving evidence and hearing arguments. It has been authoritatively observed in number of cases that where the referee proceeds to examine the witnesses, hear the parties, to reach a concl usion or resolve the dispute, his conclusion will be a decision which could not be treated by the court as a "statement" of referee within the meaning of the terms of Article 33 of the Qanun-e-Shahadat Order , 1984.
8. In "Ghulam Farid Khan v. Muhammad Hanif Khan and others " (1990 SCMR 763), the honourable Supreme Court while considering the scope of Article 33 of Qanun-e Shahadat Order , 1984, observed as follows: "7. It is no doubt true that in their joint application dated 20-5-1987 and in the statement made by counsel before the Court, the person chosen to settle the dispute between the parties was described as 'referee' but clearly , the task assigned to him was not to furnish information but to give his 'faisla' in respect of the differences arising among them with regard to the estate left by the late Nawab. A reference of such a nature is not covered by Article 33, Qanun-e-Shahadat. This Articles reads as follows: "Statements made by persons to whom a party to the suit has expressly referred for information in reference to matter in dispute, are admissions"
It will be noticed that this Article relates to statements furnishing information and not to decisions involving judicial determinations of disputes or controversies. It hardly needs be added that furnishing of information and pronouncing faisla between contesting parties are two entirely different matters. In this context, reference may be made to the observations of the Judicial Committee of the Privy Council in Chhabba Lal v. Kallu Lal AIR 1946 P.C.
72. In this case, there was a dispute between the parties with regard to the partition of the joint family property . The dispute was taken to Court; while the proceedings were pending, the parties appointed their Guru as a referee for the decision of all the facts and also for the decision in respect of the costs of the suit. The question for consideration before the Judicial Committee was whether the decision given by the Guru was covered by the provisions of Section 20, Evidence Act which has already mentioned, corresponds to Article 33, Qanun e-Shahadat.
The Judicial Committee answered the question in the negative and observed: - "It is observed that a reference to an outside party to decide matters in dispute in a suit and the question of costs is not a reference to that party for information in reference to matter in dispute, and if the reference is to be regarded as made only under section 20, it was a bad reference.""
In "Nazir Ahmad and others v. Muhammad Qasim and others " (2004 SCMR 1292 ) the honourable Supreme Court held as under: "... Article 33 in unambiguous words goes to lay down that reliance by a party in a litigation is made on the statement of a third party. The law provides that if the matter is left to the statement of third party, such statement is to be considered as admission by the party. The illustrations below Article 33 further elaborate the matter that when the question is whether a horse sold by A to B is sound, the statement of C regarding the condition of horse would amount to an admission provided A made an offer to B to "Go and ask C. C knows all about it". There are four ingredients of Article 33 aforesaid: First that some party must have referred the matter to a third person.
Second, that the reference must be for information and third, that the referee must make a statement qua such information and lastly that such statement shall be deemed to be an admission by the party who expressly referred to such third person for information. Here the status of such third person is more of a witness than of either an arbitrator or a local commission. Whatever is stated by the third party is nothing but an information.
Whenever a case is agreed upon to be decided on the statement of a referee, the matter might fall under Article 33 of Qanun e-Shahadat but a reference to a third person to decide a matter in dispute is a reference to arbitration.
7. In the instant case, the parties never agreed that Ch. Muhammad Ashraf Cheema, Advocate should make a statement simpliciter furnishing information but the entire decision of the dispute between the parties was entrusted to him. It is, therefore, closer to an arbitration in suits under Chapter IV of the Arbitration Act rather than to an appointment under Article 33 of Qanun-e-Shahadat"
9. In the instant case the two referees in their report Ex.C.1 admitted that the parties with their witnesses appeared before them and presented their viewpoints. They could not agree to any settlement and that after hearing the parties the referees reached the conclusion that the stance of Haji Abdul Hakeem, plaintiff/respondent, was allegedly correct and that the defendant/petitioner had taken a loan of Rs.15,30,000/- from the plaintiff/ respondent which he was to return and that since the stance of respondent in their determination was correct, the suit of the plaintiff/respondent be decreed. Surprisingly, the two referees thereafter appeared before the court on 03.5.2017, tendered the report Ex.C.1 and expressed their consent to the grant of decree in favour of the plaintiff/respondent, on which the order dated 03.5.2017 was passed in terms whereof the suit was decreed.
10. Certain foundational questions which should have attracted the attention of the court before accepting the statement or passing any order in accord therewith were:
(i) - whether Ex.C.1 was a report based on personal information of two referees or was it decision, conclusion, faisla , determination and findings on hearing of the parties and considering their viewpoint and, if it was so, whether it would fall within the scope of Article 33 of Qanun-e Shahadat Order , 1984, to be treated as their personal information; and could it be considered to be an admission of the party for the purpose of decision of lis; (ii) - in case the conclusion is that it was not a statement based on personal information but a decision of the referees then could it be accepted without allowing the parties an opportunity of objections; (iii) - whether these two referees could act as counsel in the case thereafter, let alone to request for the grant of decree on the basis of their decision; (iv) - whether having become referee and returned decision against the petitioner, Malik Muhammad Asghar Khokhar, Advocate could subsequently represent the petitioner in the suit as counsel and whether it will not be in conflict with his status as a referee/arbitrator as he could not be a judge and counsel at the same time; (v) - whether after returning findings against a party he could be allowed to make any concessional statement detrimental to the interest of petitioner; (vi) - whether it was not a case of serious misconduct and fraud upon the court, calling for consequential action; and (vii) - whether the statement of the alleged referee in the obtaining circumstances be given any status except that of a witness and could not be deemed to be the statement of a counsel representing his party.
11. The learned Addl. District Judge, it seems, oblivious to these legal intricacies proceeded in a mechanical manner and granted a decree on the assumption as if it was a statement by referees in terms of Article 33 of the Qanun e-Shahadat Order , 1984, or that it was a conceding statement by the counsel.
12. Another reason, for which the judgment and decree passed by learned Addl. District Judge suffers from legal infirmity is that the order itself shows that immediately on recording of the unauthorized statement of the alleged referees and before passing of any order based thereon, the petitioner had entered appearance in the court and raised his serious reservation and objection to the report Ex.C.1. The learned Addl. District Judge himself recorded in his order dated 03.5.2017 that the defendant was not present at the time of recording of statement of counsel/referee but appeared before the court thereafter and stated that he did not know as to what was the report submitted by the counsel and that the report, if any, of the referee was against the law and facts. Instead of fixing the case for arguments to resolve the controversy, the learned Addl. District Judge proceeded to observe that after having appointed Malik Muhammad Asghar Khokhar, Advocate, as his counsel and showing confidence in him to resolve the controversy, the petitioner could not resile from the statement, little appreciating that the appointment of a counsel as a referee could not denude the petitioner of his right to object and challenge the report on the ground of collusion and transgression of mandate as referee, particularly when opportunity of evidence was not allowed, no proper inquiry was conducted, and the report was stated to be collusively prepared.
The reason that prevailed upon the learned Addl. District Judge for ignoring the petitioner's objection was legally untenable and violative of rule of justice and fair trial.
13. It could not be ignored that the application under section 12(2), C.P.C. raised serious challenge to the decree on the ground that report could not be admitted under Article 33 of the Qanun-e-Shahadat Order , 1984, Malik Muhammad Asghar Khokhar , Advocate, was never permitted to concede based on the report and that the decree was nullity in law having been obtained by fraud and misrepresentation, as evident on the face of record. As observed hereinbefore the parties in the present case never agreed that the referees should make statement simpliciter , furnishing information, but the dispute was entrusted to them for its resolution. Being so the matter did not fall under Article 33 of the Qanun-e-S hahadat Order , 1984. Mere use of the word "referee" could not render the report to be deemed to be an information in his personal knowledge so as to make it an admission within the contemplation of Article 33 of Qanun-e-Shahadat Order , 1984. The report explicitly showing a decision and determination of dispute by rejecting the stance of one side without any basis and accepting the stance of the other side, that too without any evidence and inquiry , could only be treated as an "award"; which could not be admitted unless the parties were given due opportunity to file their objections thereto within the period prescribed by Article 158 of the Limitation Act, 1908. The decree having been obtained by fraud, misrepresentation, making of collusive statement without the consent of the petitioner and without proper opportunity of hearing to the petitioner and also without permitting objections and decision on the same, was without jurisdiction, void ab initio and suffering from serious legal infirmity and could not be affirmed. It was liable to be set aside under section 12(2), C.P.C. In failing to do the needful the learned Addl. District Judge committed serious error of law and jurisdiction.
14. For the reasons hereinabove this revision petition is allowed , the impugned order dated 09.4.2018 is set aside, and application of the petitioner under section 12(2), C.P.C. stands accepted. In result, the decree dated 03.5.2017 of the learned Addl. District Judge, Mianchannu is set aside. The case shall be deemed to be pending which shall now be decided afresh after allowing the parties an opportunity to file objections to the report/award Ex.C.1 and producing evidence in support thereof in accordance with law and on merits. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.