The late Mr. Muhammad Usman Azad (hereafter called the deceased) was the Founder, Editor and Proprietor of an Urdu newspaper known as Anjam, and he died on 11-9-1964. Because of his deep interest in Urdu Journalism, he had made a will on 21st February 1964, bequeathing his income from shares owned by him in a company known as Super Art Engravers Ltd. and his income from three machines owned by him "for the promotion of Urdu Journalism". I shall refer to these shares and these machines as the said assets, and in order to carry out the trust created under his will, the deceased had appointed his brother Mr. Muhammad Umer Faruqui and Mr. Ilyas Rashidi, to be amongst the first trustees of his Trust. I may further observe here that, after his death, Mr. Muhammad Umer Farooqui had filed a suit in the Court of the 4th Civil Judge, First Class, Karachi, being Suit No, 294/65 of that Court, for a declaration that the said assets were subject to the trust created by the will of the deceased. The parties in the present suit were impleaded in that suit which was decreed by the 4th Chid Judge on 4th April 1966. Thereafter, as the heirs of the deceased were not able to administer his estate on 23rd April 1966, one of his sons filed the present administration suit, and Mr. Muhammad Umar Faruqui (now deceased and represented by his legal heirs) was a defendant in the suit, whilst some of the defendants, who are minors, are represented by their mother as their guardian. It is also relevant to observe here that with the plaint the plaintiff had filed an application for the appointment of a receiver to manage the estate of the deceased, pending the hearing of the suit, and had obtained an ad interim order in his favour on 27-2-1966 by which the Official Assignee was appointed receiver. This appointment was confirmed with the consent of the parties on 15-8-1966. In May 1968, as the parties had settled their disputes they filed an application in Court under Order XXIII, rule 3, C. P. C. According to para. 4 of this application, it had been "unanimously decided" by the heirs of the deceased that the said assets should be handed over to the Official Assignee of this Court who was to be appointed the Receiver of the estate of the deceased. The para. further states that the parties had "unanimously decided" to build a suitable memorial in memory of the deceased and a sum of rupees one lakh was earmarked for this purpose. In order to realise the said amount the receiver was to run the Super Art Engravers Press Ltd. and had to set aside the sum of Rs, one lakh from the income of this Press.
The para. then states "This being so, the will dated the 21st February 1964, of deceased Muhammad Azad will become infructuous and in its place the arrangement referred to in this para. will take place in tow. That the will of deceased Muhammad Usman Azad dated the 21st February 1964, be returned to Mr. Muhammad Umar Farooqui by the receiver as the purpose of the will is being achieved by erecting the memorial as mentioned above". Para. 15 of the compromise states that the Super Art Engravers Press Ltd. had been run by Mr. Muhammad Umar Faruqui, but that he should not be "questioned about the previous accounts of the Press". The compromise also deals with the distribution of the estate of the deceased amongst the parties to the suit, but that is not relevant to the application. This compromise application was decreed by a learned single Judge of this Court on 15th May 1968 and a preliminary decree, in terms of the compromise application, was drawn up on 7-8-1968. It is material to observe here that this preliminary decree has not been prepared in the manner in prescribed form No, 17 Appendix D of the Civil Procedure Code which is applicable to administration suits. Thereafter, the Official Assignee took possession of the said assets and of the Super Art Engravers Press Ltd., and after managing them profitably for about two years, on 1-2-1970 he published a notice in the newspapers announcing the closure of the business of Super Art Engravers Press Ltd., and all this was done by the Official Assignee in his capacity as receiver and not as administrator, although the preliminary decree was also passed in an administration suit. Be that as it may, meanwhile, as the intervenor came to know of the Official Assignee's notice, after making enquiries about the will of the deceased, he filed his application to be impleaded in the suit which has come up for hearing before me. According to this application, the order of this Court dated 15-5-1968 is illegal in so far as it has set aside the will of the deceased bequeathing the said assets for the promotion of Urdu Journalism and, as the applicant is a Journalist, he has filed this application to be impleaded as party in the suit.
2. Mr. Ihsanul Haq opposes this application on behalf of the defendants 1 and 2. The plaintiff and the other defendants including the legal heirs of Mr. Muhammad Umar Farooqui, have neither opposed this application nor denied the allegation of the application that the order of this Court dated 15-5- 1968 is contrary to the will of the deceased and has the effect of nullifying that will. I therefore need consider only Mr. Ihsanul Haq's arguments.
3. Mr. Ihsanul Haq's first argument was that the application was hit by section 92 of the Civil Procedure Code. Under section 92 no suit for the alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature", can be filed without the written consent of the Advocate-General, and as the applicant has not obtained the consent of the Advocate-General for filing this application, Mr. Ihsanul Haq argued that he should not be allowed to evade the provisions of section 92 by filing an application instead of a suit. But, as the words quoted show, the bar of section 92 only affects breaches of trusts, and as a provision of this nature has to be construed strictly, Mr. Yousuf Rafi argued that the section related only to completed trusts and did not affect suits to enforce trusts. In support of his submission, learned counsel who has been of great assistance to me in this case referred me to Mulla's Commentary and to the relevant judgments of the High Courts of the sub-continent on the scope of section 92. At page 340 of the 12th Edition of the Code of Civil Procedure the learned Editors of Mulla have stated:-- "Suits against strangers to the trust that is, against trespassers and against transferees from trustees, for a declaration that property in their hands is trust property and for possession are outside the scope of this section such suits must be instituted in the ordinary manner and not under this section."
This view is supported by the judgment of the Privy Council in Abdul Muhammad v. Muhammad Barkatali , in which the Privy Council held that a suit for a declaration that the property in dispute in the suit was waqf property was not hit by section 92. Further, in support of his argument Mr. Yousuf Rafi referred me to a judgment of the Madras High Court in Annavarapu Nacharamma v. Malladi Venkatappayya . The facts of that case appear to be identical to those in the instant case, and in holding that a suit against the executrix of a will for the enforcement of a public trust was not hit by section 92, the learned Judges of the Madras High Court observed as follows:-- "Section 92 deals with completed trusts and is inapplicable where that stage has not been reached as is alleged for the defendant in the present case. The will of the deceased, no doubt, bequeathes a legacy for the constitution of a trust and the proper remedy to enforce the provisions of the will is a suit for administration."
I may observe here that this judgment was followed by Patanjali Sastri, J., in Subramania v. Maya Kone . I am in respectful agreement with the view taken in the judgment cited. therefore Mr. Ihsanul Haq's argument that the application is not' B maintainable under or in view of section 92 is not correct.
4. Mr. Ihsanul Haq's second argument was that the order of this Court decreeing the compromise between the parties has become final, so that the decree could only be challenged by filing a suit and not by way of an application. But in Jadunath v. Parrneshwar , the Privy Council held that a partition suit in which a preliminary decree had been passed was still only a pending suit, therefore, as the decree in the instant case is only a preliminary decree it means that the suit before me is still pending, and as it is pending, why should a party who seeks to correct the preliminary decree be driven to the necessity of filing a separate suit? In any case that was the view taken by this Court in Suit No, 66/62 H. H. Abida Sultana v. H. H. Sajida Sultana and others a case to which Mr. Yousuf Rafi drew my attention. That suit was also an administration suit, and as in the instant case the parties had settled their disputes and had filed an application under Order XXIII, rule 3, which was allowed by the Court. Then, as in the instant case, a preliminary decree for administration was drawn up in terms of the compromise application, so that, as in the instant case, it was in disregard of the form for a preliminary decree prescribed under Form No, 17 Appendix 'D' of the Civil Procedure Code. Although the learned counsel who appeared in the case did not draw the attention of the Court to this discrepancy between the so called preliminary decree as drawn up and the form that was prescribed under the Civil Procedure Code, Wahiduddin, J., (as his Lordship then was) himself noticed this inconsistency and observed that that the decree should have been drawn up be observed in his order of 28-10-1966 "blame lies both on the office and on the learned counsel appearing in this case. In the interest of justice I would, therefore direct the parties to submit a draft of the second preliminary decree " I am in respectful agreement with the view taken in this order, and as Mr. Yousuf Rafi has drawn my attention in his arguments to this illegality in the preliminary decree, it has to be corrected. It is true that the correction sought by the intervenor are not confined to this objection alone, but if the decree has to be corrected, why should he be driven for his other objections to the necessity of filing a separate suit, the more so as this would expose the minors in the suit to the hazards of further litigation. I am satisfied that the Intervenor's application cannot be rejected merely because it seeks to reopen the preliminary decree, however, as I have also heard the arguments on the question whether the preliminary decree can be corrected under section 151,1 C. P. C. because it has illegally nullified the will of the deceased, I shall now briefly consider these arguments.
5. In support of his submission that the intervenor's remedy, if any, was by way of a suit, Mr. Ihsanul Haq referred me to a judgment of the Lahore High Court in Umar Din v. Mir Zaman and others in1 2 3 4 5 which that Court observed "
The mere fact that a decree was passed in a previous litigation which, in view of more recent judicial pronouncements, was erroneous is no ground for setting aside that decree." I am In respectful agreement with this judgment, and I have no doubt that a Court should not lightly exercise its powers under section 151, C. P. C., to set aside a decree. But I have also no doubt that in extraordinary cases a Court Is entitled to, and may be bound to exercise its inherent jurisdiction under section 151, to correct its decrees. Thus it is settled law that a Court will exercise its inherent jurisdiction to correct a decree which has been obtained by practising fraud on it. As pointed out by Munir, C. J. in Grindleys Bank Ltd. v. Murree Brewery Ltd. .
"In law a judgment or order, however high or independent the tribunal delivering or making it and however exclusive its jurisdiction, is a nullity if it be proved that it was obtained by fraud. This fraud may be proved not only in the proceedings in which it was committed but also in a suit to be set aside that judgment or order, the only limitation on the Court's power to avoid such adjudication being that the fraud should have been set up under sections 40, 41, 42 or 43 of the Evidence Act by the party relying on it. In appropriate cases it is the duty of the Court that the seisin of the to recall suo motu an order procured by fraud."
However, this extraordinary jurisdiction is not limited to case of fraud only. I do not have to define the extent of this jurisdiction, but if a Court condemns unheard innocent third parties, I have no doubt that this is a patent illegality, which would warrant interference by the Court in its extraordinary jurisdiction under section 151. I may quote here a judgment of the Judicial Committee in the Bolivar's case . In delivering the judgment of the Judicial Committee Lord Parker observed in that case: "Where substantial injustice would otherwise result, the Court has, in their Lordships' opinion, as inherent power to set aside its own judgments of condemnation so as let in bona fide claims by parties who have not in fact been heard, and who have had no opportunity of appearing. This power is discretionary, and should not be exercised except where there would be substantial justice if the decree in question were allowed to stand, and where the application for relief has been promptly made."
I am in respectful agreement with these observations, and the point for determination in the instant case is whether the intervenors can make out a case either of fraud on the Court or bring his case within the rule laid down by Lord Parker.
6. Mr. Yousuf Rafi submitted that the order allowing compromise application had been obtained by committing fraud on the Court because the attention of the Court was not drawn to the fact that the suit filed by Mr. Muhammad Umar Farooqui in the Court of the 4th Civil Judge had been decreed on 4th April 1966. Learned Counsel's submission that the attention of the Court was not drawn to the decree of the learned Civil Judge is correct. But Mr. Ihsanul Haq submitted that the District Court was not competent to pass a decree in that suit because of the value of the said assets, which were the subject-matter of that suit, far exceeded Rs, 25,000, the pecuniary limit of the jurisdiction of the District Court. As the will of the deceased does not state the value of the said assets and also in view of section 21, C. P. C. I do not think learned counsel's submission is correct.
However, it is not necessary for me to decide it. Irrespective of the question of the competence of the learned Civil Judge to entertain Suit No, 294/65, as the effect of the compromise application was to nullify the decree in that suit, when the learned counsel moved this compromise application, they should have informed the learned single Judge about the decree in that suit. and I am certain that if the attention of my learned brother had been drawn to that decree he would not have allowed the compromise application, because its effect was not merely to set aside the will of the deceased and the decree of another Court, but also to take away the rights which the beneficiaries of the will of the deceased had acquired under the decree of that Court without even6 7 hearing them.
7. Mr. Yousuf Rafi also referred me to another aspect of the compromise application. As I have pointed out, the effect of the compromise application was that the business of Super Art Engravers Ltd. was taken over by the Court and was to be sold when the intervenor filed his application. I am informed that Super Art Engravers Ltd., is a company incorporated under the Companies Act. It is not a party to the present suit, nor is it contended before me that its share-holders or its board of directors had ever passed any resolution allowing its assets to be taken over by the Official Assignee. I therefore invited Mr. Ihsanul Haq to show me how the order of this Court taking over the business of this Company could be sustained in law. Mr. Ihsanul Haq's only argument was that the parties, who owned the overwhelming majority of the shares in this company, had signed the compromise application, therefore the company itself was bound by it. Since the decision of the House of Lords in Salomon v. Salomon & Co. it has been settled law that a company incorporated under the Companies Act is a legal entity distinct from the members who own shares in that company, therefore I am astonished at Mr. Ihsanul Haq's argument. As the preliminary decree was passed without notice to this company, the decree is clearly hit by the rule laid down by Lord Parker in the Bolivar's case and even if it was not obtained by fraud on the Court it has to be set aside on this ground.
8. Mr. Yousuf Rafi then referred me to para. '14' of the compromise application, according to which Mr. Muhammad Umar Faruqui, now deceased, had been relieved of his obligation to account for the profits made by him from running the business of this company as well as the profits of the three machines owned exclusively by the deceased, although he had been enjoying those profits for nearly two years on the date of the compromise application I may observe here that in answer to my question the Official Assignee stated from his recollection that after he had taken over the management of this company and the machines of the deceased he had been making a net profit of about Rs, 6,000 per month. This means that the profits made by Mr. Faruqui in two years from the use of the said assets must have also been substantial, yet in a suit to which minors were parties he was relieved of his obligation to account for the profits made by him by intermeddling with the estate of the deceased. As the compromise application expressly relieved him of that obligation, I agree with Mr. Ihsanul Haq that the compromise order was not obtained by committing any fraud on the Court. But even though the parties did commit fraud on the Court, in view of Mr. Ihsanul Haq's contention that the will of the deceased was "bogus" prima facie the compromise amounted to fraud on the rights of the minors, and in view of the Court's paramount obligation to protect the interest of minors, on this ground alone, I am of opinion that the preliminary decree of 15th May 1968 has to be set aside. I am fortified in my opinion by a judgment of this Court in Mir Attaullah Khan v. Sardar Mahboob Khan and others , where a similar view was taken.
9. I therefore exercise the inherent powers of this Court under section 151, C. P. C. and set aside the preliminary decree passed by the learned Single Judge. As this decree is set aside, the only question which remains for consideration is whether the intervenor is entitled to be impleaded in the suit as a defendant. The bequest in the said will of the deceased is for the promotion of Urdu Journalism and the intervenor claims to be a journalist interested in promoting the cause of Urdu Journalism. As the executor of the will is dead I see no reason why the intervenor should not be allowed to be impleaded. But as he claims to represent the numerous persons who are interested in promoting the cause of Urdu Journalism, he must comply with the provisions of Order I, rule 8, before he can be impleaded as a defendant. If therefore he wishes to be impleaded as defendant he must file the applications required under Order I, rule 8, C. P. C. by 30th May 1970, and if these applications are filed the case should be put up for evidence after the pleadings have been completed. The Intervenor shall be allowed to prosecute his applications, if any, during the vacation. If however, the intervenor does not file any application under Order I, rule 8, C. P. C. by8 9 30th May 1970, he will not be entitled to be impleaded and the case will be put to for evidence thereafter.
10.As the preliminary decree is set aside the orders passed in pursuance of that decree, including the orders of the sale of the assets of the deceased, are also set aside. However, it would appear that except for the first two defendants the other defendants are not contesting the suit and even the objection of the first two defendants is confined to the validity of the will of the deceased, whilst the objection of the intervenor is limited only to the disposal of the said assets. Therefore although the said assets cannot be disposed of till the suit is decided, the wishes of the parties can be considered with regard to the properties of the deceased other than the said assets. I therefore direct that the case should be put up again on 25th May 1970, for this purpose.
11.Subject to the observations made herein, the application of the intervenor is allowed. 1928 P C 16 A 1 R 1917 Mad. 1008 AIR 1940 Mad. 81 AIR 1940 P C 11 AIR 1930 Lah. 654 PLD 1954 Lah. 745 AIR 1916 P C 85 1897 A C 22 PLD 1965 Kar. 341