1. ZAFFAR HUSSAIN MIRZA, J.--This petition for leave to appeal is directed against an interlocutory order dated 30-5-1984 passed by a learned Judge in Chambers sitting on the original side in the High Court of Sind, Karachi, whereby it was directed that the petitioners be added as defendants in Suit No.681 of 1983.
2. Petitioner No.1 is the Pakistan Banking Council a statutory body established under section 9 of the Banks (Nationalization) Act, 1974 and petitioner No.2 Mr. Altaf Ahmad is a Member of the Pakistan Banking Council.
3. The question raised in this petition is whether, in the facts and circumstances of this case, the High Court was justified in law and possessed jurisdiction to add the petitioners as parties to the suit, in the exercise of its powers under rule 10(2) of Order I of the Code of Civil Procedure.
4. The fats necessary for the purposes of this petition briefly stated are that on 25-11-1983 respondent Mr. Ali Maohtaram Naqvi (hereinafter referred to as the plaintiff) filed Suit No.681 of 1983 in the High Court of Sind, Karachi against Habib Bank Limited and seven others who are Officers of the said bank, being either members of the Executive Board or Vice-Presidents of the said Bank. The last mentioned persons are pro forma respondents Nos.1 to 8 before us. According to the allegations of the plaintiff in his plaint he had prepared a project with an estimated cost of Rs.52 lacs which was placed by him before the Habib Bank Limited and its Officers for procuring funds necessary for the execution of the Scheme. After being satisfied with the feasibility of the scheme, Habib Bank agreed to finance it and initially agreed to advance a loan of Rs.15 lacs by way of overdraft on the security of mortgage of the plot of land bearing No.A.M.146, Shambhu Nath Road, Saddar, Karachi, on which the proposed scheme was to be established. The plaintiff alleged that it was stipulated between the parties that further amounts would be paid in instalments of Rs.5 lacs to him by the Habib Bank from the to the. However, according to the allegations of the plaintiff, contrary to the arrangement entered into between the parties, Habib Bank failed to honour its commitments after payment of the first instalment of Rs.5 lacs on 8-7-1979. Instead small amounts of money were released with the result that the actual loan granted by the bank approximated to Rs.13.25 lacs. On the basis of these allegations the plaintiff claimed that Habib Bank was guilty of the breach of contract which had resulted in the total suspension of the work of the scheme causing him financial loss and damage to his business reputation, etc. The grievance of the plaintiff was that despite their own breach Habib Bank went on multiplying the interest on the loan amount advanced by them with the result that as against the principal amount of Rs.13.25 lacs the total amount claimed by Habib Bank was Rs.22,68,509.59 on 11-10-1983. The plaintiff also alleged further commitments made by the Habib Bank for advancing financial facilities which were also not fulfilled. The plaintiff accordingly prayed for the following reliefs:- "(1)Redemption of plot/property/project bearing No.A.M. 146, Shambunath Road, Karachi subject to orders of payment/Deposit of actual Receipts by the plaintiff on the basis of due orders under law.
5. (2)Declaration that the defendants and/or one or more of them were bound to make full payment of Rs.15 lacs to the plaintiff, as stipulated, and/or all further payments as promised/under-- taken/committed with which they were irrevocably bound; (3)Permanent Injunction restraining the defendants and/or one or more of them from realising any sums in excess of Rs.11,80,000 as principal amount or part thereof on mortgage(s) and/or such other sum as held due by this Hon'ble Court;
(4) Damages of Rs.1,00,00,000 as above.
6. (5)Accruing damages @ Rs.1,00,000 per month from lst December, 1983."
7. During the pendency of this suit, on 13-12-1983 the plaintiff filed an application under Order I, rule 10 read with section 151 of the Code of Civil Procedure seeking to join and add the petitioners as defendants in the suit. The grounds disclosed in the affidavit supporting the application briefly were that through a letter dated 25-10-1983 Habib Bank had invited him to attend a meeting of the Karachi Circle Executives Credit Committee to be held on 28-11-1983 as desired by petitioner No.1 Pakistan Banking Council. Reference was made to another letter dated 21-11-1983 by petitioner No.2 Mr. Altaf Ahmad, Member, Pakistan Banking Council, whereby he directed the Presidents of all. The nationalized banks not to grant any facility to the plaintiff without the clearance of the Habib Bank.
8. Further the letter also directed that the plaintiff be asked to come to terms with the Habib Bank. The plaintiff alleged that the aforesaid letters and action contemplated and directed therein were "taken in a back date to thwart the orders of this Hon'ble Court", (namely, ad interim injunction issued by the Court restraining the defendants from taking any prejudicial action against the plaintiff other than seeking legal remedy). On the basis of these allegations the plaintiff claimed that the action taken by the petitioners was mala fide as a result of collusion with the defendants in the suit. An additional affidavit was filed by the plaintiff alleging that as a result of the aforesaid acts of the petitioners he had suffered further damages "in that the mental pain and agony which I was already undergoing has further multiplied and the financial losses which I was already sustaining have become perpetuated." In addition it was further alleged in this affidavit that the action taken by them has pre-empted a proposed move on the part of the plaintiff to apply for redemption by way of interim relief upon payment of the principal amount of loan and a reasonable sum of interest as directed by the Court. The peti--tioners appeared before the Court and contested the application for their joinder as parties to the suit. They denied the allegations made against them and pointed out that in consequence to the letter inviting the plaintiff to attend a meeting on, 28-11-1983, he had written a letter dated 5-11-1983 asking for postponement of the meeting. In his affidavit petitioner No.2 Mr. Altaf Ahmad stated, inter alia, as under:- "4. I say that under this policy of the Nationalization of the banks it is necessary for a Nationalized Bank to refer the outstanding loan and the recovery proceedings thereof to the Pakistan Banking Council before starting a legal action against the borrowers and on the recommendations of the Pakistan Banking Council the necessary action is taken against the borrowers. In that context the recovery of the outstanding loan exceeding Rs.20 lacs due from the plaintiff was referred to the Pakistan Banking Council for approval of necessary legal action against him. The Pakistan Banking Council before sanctioning the approval desired a meeting with the plaintiff and the Members each from all Nationalized Banks and a letter to that effect was written on 25th October, 1983.
5. Instead of attending the meeting in pursuance of the letter dated 25th October, 1983, with a view to discharge his liability to the bank the plaintiff filed the above suit on 28-11-1983 and obtained ex parte injunction order.
6. I say that in the normal course of duties as a Member Pakistan Banking Council I wrote a letter dated 21-11-1983 referred to in paragraph 5 of the affidavit of the plaintiff. I say that the purpose of the letter dated 21-11-1983 was to persuade the plaintiff to discharge his obligations because it was noticed that he had been delaying the same on one pretext or the other.
7. I vehemently deny that the steps taken as per letter dated 21-11-1983 were in a back date to thwart the orders of this Hon'ble Court as alleged in para. 6 of the affidavit. I say that the allegation is patently false. I assert that the letter was written on 21-11-1983 and was dispatched to the Presidents of the Nationalized Banks on 22-11-1983 and received by them on that date which fact is established by the Dispatch Register which is maintained by the Pakistan Banking Council and an entry therein having No.10262 proves that fact. I attach hereto a photo copy of the relative page of the said register and the original register will be produced at the the of hearing."
9. On the aforesaid averments made in the affidavits filed by the parties and the document placed on record the High Court considered the question whether petitioners be joined as defendants in the suit as proper or necessary parties. It was submitted before the High Court on behalf of the plaintiff that he came to know about the letter dated 21-11-1983 after the filing of the suit, whereby the petitioners had prohibited other banks from advancing any loan to the plaintiff. The grievance of the plaintiff, as noted by the High Court in the impugned order, was that the petitioners had taken action which is causing loss and prejudice to him and the facts disclosed that the petitioners had involved themselves in the dispute between the plaintiff and the defendants already impleaded in the suit. The High Court agreed with the submission and observed:- "From the sequence of events it seems clear that the proposed defendants are directly connected with the dispute by taking action in support of the defendant No.1 which according to the plaintiff has caused loss to him. At this stage it is not possible to determine whether the proposed defendants were acting in discharge of their duties under the Act or mala fide and in collusion with the defendants. These questions can be decided only at the final hearing."
10. Thus having taken the view that the action taken by the petitioners could well furnish the foundation for a cause of action for a separate suit, it was held that in order to avoid multiplicity of proceedings it was necessary to add the petitioners as parties so that the Court is enabled to effectually and completely adjudicate upon the dispute in the suit. Accordingly by the impugned order the High Court allowed the application of the plaintiff and ordered the petitioners to be joined as defendants in the suit.
11. In support of the petition Mr. Mansoor Ahmad Khan vehemently urged that the action taken by the petitioners which has been made the foundation for the joinder of the petitioners, being action taken in exercise of statutory powers, the High Court fell in error in proceeding on the assumption that the petitioners had involved themselves in the dispute under adjudication between the parties to the suit. In this connection learned counsel referred to sections 9 and 11 of the Banks (Nationalization) Act, 1974 and pointed out that the functions of the Banking Council include the making of policy recommendations to the Government regulating the bank activities, formulating policy guidelines for the banks, laying down performance criteria for banks and taking steps for ensuring their observance. He pointed out that the policy guidelines laid down by the council were binding on the banks who were required to make every effort for observance of the performance criteria laid down for them. According to the submission of the learned counsel, viewed in this context on the legal plane, the acts performed by the petitioner cannot be characterised as undue or improper involvement on the part of the Banking Council in a dispute with which it was unconcerned; therefore, the counsel submitted, the petitioners were wholly unconcerned and uninterested in the private dispute between the parties to the suit which primarily related to contractual matters and were thus neither necessary nor proper parties to the suit. The next submission of the learned counsel was that in the circumstances of this case the only object of the plaintiff in filing an application under Order I, rule 10, C. P. C. Was to delay the recovery proceedings in the main suit through vexatious and frivolous devices. As regards petitioner No.2 Mr. Altaf Ahmad, it was contended that his joinder was wholly misconceived as the acts attributed to him were admittedly taken by him in his capacity as a Member of the Pakistan Banking Council and not in his personal capacity.
12. On the other hand, Mr. Wajihuddin Ahmad, learned counsel for respondent Ali Maohtaram Naqvi, the plaintiff in the suit, defended the impugned order and submitted that the facts brought on record fully justified the view taken by the Court that the Banking Council had involved itself in the dispute between the plaintiff, and the Habib Bank and its Officers, thereby making it necessary for the Court to bring them as parties to the suit so that all questions in controversy are completely and effectually adjudicated. He reiterated the claim of the plaintiff that the petitioners had intervened in the pending dispute between the parties to the suit after the suit had already been filed. In any case, counsel submitted, if the action was taken earlier without the knowledge of the plaintiff, it clearly had nexus with the cause of action on which the suit was based and, therefore, it would be improper to disallow the plaintiff from bringing the same to adjudication in the same suit.
13. According to him, even otherwise if a separate suit is brought by the plaintiff against the petitioners on the allegations made in the application, since common questions of law and fact would arise in such suit, the conclusion of the High Court that such eventuality will result in multiplicity of proceedings was fully justified. As to Mr. Altaf Ahmad his joinder was justified by the learned counsel on the plea that he along with the Banking Council, was in collusion with the Habib Bank.
14. It is needless to reiterate the true scope of powers vested in the Court for adding parties to a pending suit under Order I, rule 10(2) of the Code of Civil Procedure. It is now well-settled that under) this provision to classes of persons, namely, necessary parties and proper parties can be joined. The former consists of persons who I ought to have been joined as parties and the latter of persons without) whose presence the questions in the suit cannot be completely and', effectually adjudicated upon. If a person does not fall in either of, these to classes, that is to say, he is neither a necessary nor a proper party, then the Court has no jurisdiction to add him as a party under this sub-rule. This is why the Court is called upon not to drag any parties in the array of the suit to suffer the rigours of a trial unnecessarily. It must be further pointed out that the question of addition of parties under this rule is generally not one of initial juris--diction of the Court, but of judicial discretion which hag to be exercised in view of the facts and circumstances of a particular case.
15. No party can be allowed to argue that as the Court has a wide discretion in the matter of the joinder of parties, any person who is neither a necessary nor a proper party may be joined at the convenience of the applicant. It is in this context that the Courts have held that in exercising their powers under this rule, Courts ought to see that they do not load the record with the parties wholly shown to have no interest in the suit and that the trial of the suit is not embarrassed by the simultaneous investigation of totally unconnected controversies.
16. Having made these general observations with regard to the powers of the Court in the matter of adding parties to pending suits, we may now proceed to consider the facts of the present case.
17. The letter dated 21-11-1983 issued by the Member, Pakistan Banking Council under the signature of Mr. Altaf Ahmad is in the following terms:- "Habib Bank have been permitted to file a suit against the above-named borrowers for recovery of their dues. This is a sole-proprietor concern owned by Mr. S.Ali Mohtaram Naqvi. The Office address of the borrowers is as under:- "Messrs Asad Chamber, 146-Shambu Nath Road, Sadar, Karachi.".
18. Residential address of the proprietor is as under:- "117, Alamgir Road, Sharafabad, Karachi. "
19. No facilities should be extended to them or to their associates without getting a clearance from Habib Bank. If any facilities have been extended to them or to their associates particulars o1 their liabilities should be advised to us together with the securities held there against. They should be asked to come to terms with Habib Bank failing which the facilities extended to them should be withdrawn."
20. The contents and the import of this letter clearly refer to the loan: and advances extended by the Habib Bank to the plaintiff which are undoubtedly the crucial subject-matter of the suit filed by the plaintiff. According to the petitioners, this letter was written before the institution of the suit on 25- 11-1983. On the other hand, the allegation of the plaintiff is that in fact the letter was written after the institution o1 the suit but was given an earlier date in order to avoid the effect o1 temporary injunction granted by the Court. This question as to the actual date of issue of this letter is not a matter for decision in these proceedings. But it is clear that the Banking Council had issued e direction that no facility should be extended to the plaintiff and clearly Habib Bank had been permitted to file a suit for recovery of outstanding amounts from the plaintiff. One of the reliefs claimed in the plaint, as reproduced above, was a decree for pendente lite damages at the rate of Rs.1 lad per month. Further according to the averments in the plaint the defendants had committed breach of contract resulting in loss to the plaintiff, by withholding further payments. Now whether the plaintiff can maintain such a suit or would eventually succeed in obtaining a decree, is not a material consideration at this stage. However, in the light of this letter a question may arise, whether Habib Bank could release payments even if they wished to do so in the face of a directive from the Banking Council which has been claimed to be binding on all the nationalized banks. It is not necessary here to determine whether the action of the Banking Council was justified and was in consonance with its duties under its statutory obligations and functions. It might as well be .So, but clearly a relevant nexus has been established by their own at to add a possible point of controversy between the parties, for the decision of which the Banking Council would become a proper party to be brought before the Court. This situation, in our opinion, is peculiar to the nature of this suit and would not normally arise in a suit between the borrowers and the bank. The apprehension of the Banking Council that this will furnish a precedent in every case of dispute between the borrowers and the bank for the Banking Council to be impleaded as a party just because certain statutory powers were exercised by it, is rather unfounded. In this view of the matter it is not and indeed it would be improper for us to pursue the matter further to examine the allegation of collusion between the Banking Council and Habib Bank in these proceedings. We may only point out that fraud and collusion are matters of strict proof and the law relating to pleadings of such cases requires full particulars of the alleged fraud or collusion to be specifically pleaded.
21. However, the case of Mr. Altaf Ahmad stands on an entirely different footing. As is clear from the contents of the letter he had affixed his signature on it obviously in his capacity as a Member of the Pakistan Banking Council. In the last paragraph of the letter the use of the word "us" seems clearly to refer to the Pakistan Banking Council. A vague and general allegation in the affidavit of the.
22. Plaintiff, in the absence of any specific malice or animosity or interest in the subject-matter of the recovery of dues from the plaintiff, on the part of Mr. Altaf Ahmad, is not sufficient to show that he is in any manner concerned in his personal capacity with the subject-matter of this suit. We are, therefore, of confirmed opinion that the request for his being added as a party was wholly unjustified and it would be improper to drag him as a party in this suit. He is neither a necessary nor a proper party to be impleaded in the suit.
23. For the foregoing reasons we hold that the High Court has not committed any error in passing orders for adding the Pakistan Banking Council as a proper party to the suit.
24. Before concluding this order we may refer to the grievance of Mr. Mansoor Ahmad Khan that the Court has by way of consequential order permitted the plaintiff to file an amended plaint which has been permitted "to be amended in such manner as may be necessary". Learned counsel submitted that such a general permission to add a new cause of action or to plead facts wholly unconnected with the original cause of action is not contemplated in law in view of the clear provisions of Order VI, rule 17 of the Code of Civil Procedure. Mr. Wajihuddin Ahmad made statement at the Bar that the allegations contained in the application for adding parties would be incorporated in the plaint which is permissible in view of the provisions of sub-rule (4) of rule 10 of Order I of the Code of Civil Procedure. The amended plaint in its final shape has not so far been filed and we are, therefore, not in a position to determine whether the amendments made would be within the scope of Order I, rule 10(4) of the Code of Civil Procedure. We are sure and it would certainly be within his right for the newly-joined party to raise objection to any amendments which are not permissible not to be allowed by the Court. We, therefore, leave this matter for the trial Court to determine at the appropriate stage.
25. In view of the above we convert this petition into appeal and allow it partially to the extent that we set aside the order directing the joinder of petitioner No.2 Mr. Altaf Ahmad as a party. There will, however, be no order as to costs.