1. ' The facts briefly are that this suit was filed by the plaintiff-Bank against the defendants for recovery of Rs,35,40,427 only. The plaintiff's case is that on or about 19-6-1980 at the request of defendant No,1 they were granted a facility of Rs,65,00,000 under Export Re-Finance Scheme of State Bank of Pakistan; and that the present defendants Nos,2, 3, 4 and 5 had executed guarantees as security for re-payment. The plaintiffs then granted further two loans of Rs,27,50,000 on 23-6- 1981 and Rs,6,30,000 on 22-9-1981 under the same Scheme to the defendant No,1 but on conditions that in case the defendant No,1 failed to ship the goods, to re-pay the amount of these loans within 180 days from the respective dates of loan the said amounts of loans would be re-payable with interest. @ 16% PA. With quarterly rests. The defendant No,1 however, failed to repay the said loans within 180 days and, therefore, the balance amounts i,e, Rs, 17,33,000 (out of Rs,27.50.000) and Rs, 6,30,000 were treated as ordinary loans with effect from 1-1-1982 and 21-3-1982 respectively subject to interest @ 16% PA. With quarterly rests for the security of which the defendant No,1 executed a Promissory Note on 21-3-1982 for Rs,22,00,000 in favour of the plaintiffs. The defendant No,1, thereafter, failed to pay the abovesaid outstanding amount of loan in spite of various acknowledgements given by him from time to time and thus the plaintiff filed the suit.
2. ' The defendants applied for grant of leave to defend the suit. This Court vide order dated 15-8-1989 declined to grant leave to the defendant No,1 and consequently the suit was decreed against defendant No,1 in toto while the leave was granted to defendants Nos,2 to 5, who filed their written statements, issues were settled and the suit was fixed for recording of evidence on 9-9-1991 when Mr. Abdul Latif A. Shakoor, Advocate made a statement that the defendant No,1 only had filed an appeal (11.CA. No,259 of 1989) where the matter was compromised between the plaintiff-Bank and the present defendant No,1 (appellant) with regard to total liability in the suit. Mr. Afsar Abidi, learned counsel appearing for defendants No,2, 3 and 5 placed on record copies of two letters being Letter No,PHQ/SK/MISC/1747 dated 23-7-1990 from the plaintiffs and letter No,NIL dated 29-7- 1990 from Gharo Textile Mills (Pvt.) Limited which showed that the Directors of the Mills (defendant No,1) are released from their personal liability. Mr. Nasim Faruqui, learned counsel appearing for defendant No,4 also supported the contentions of Mr. Afsar Abidi, Advocate. No one had appeared for the plaintiffs at that time and, therefore, in view of above facts the suit was dismissed with no order as to costs.
3. ' After the order was dictated in Court Mr. Zubair Qureshi, learned counsel appearing for the plaintiffs appeared who on the same date moved this application for which notice was ordered for 25-9-1991. However, this application came up for hearing on 17-11-1991 and 24-11-1991 when the arguments of learned counsel were heard and the case was reserved for ordeRs, ' At the very outset Mr. Afsar Abidi, learned counsel for defendants Nos,2, 3 and 5 raised the objection with regard to maintainability of this application. He has submitted that the decree against the defendant No,1 with regard to the total amout in suit stands; and that the suit has been dismissed only with regard to defendants Nos,2 to 5. He has further submitted that the Court, after having disposed of the suit finally has become functus officio; and it would not be open to the Court to invoke the inherent powers under section 151, C.P.C. He has further submitted that the learned counsel for the plaintiffs has not mentioned as to under which provision of law this application has been moved although the ground taken in the application is that the order has been obtained by the Advocate for the defendants by misrepresentation of facts.
4. ' Repelling the abovesaid contentions Mr. Zubair Qureshi, learned counsel for the plaintiffs has submitted that the Court, in exercise of inherent powers can recall any orders passed through mistake or misrepresentation. He has further submitted that the application cannot be dismissed merely on the ground that no provision of law is mentioned at the top of application. He has further submitted that this application can be treated as an application for Review or application for setting aside the decree obtained through misrepresentation as provided under Order XLVII, rule 1, C.P.C. And section 12 (2) of the Code of Civil Procdure respectively. He has placed reliance on the following cases:
(i) Naik Bibi v. Muhammad Tufail (1989 MLD 3990). Katrik Mondal v. Smt. Pagali Dasi (PLD 1969 Dacca 456).
(iii) Asghar All Mollah v. Sura Dindu Sen (PLD 1968 Dacca 498).
5. ' Of course in these three cases it was held that the Court has the inherent power to set aside the orders procured by fraud and misrepresentation. It has also been held in the abovesaid cases and the case of the Chief Settlement Commissioner v. Raja Muhammad Fazil Khan PLD 1975 SC 331) that the Court can exercise powers under Order XLVII, rule 1, C.P.C. To review such orders; and that can also be done suo motu. However, these matters pertained to the period prior to promulgation of Code of Civil Procedure (Amendment) Ordinance, 1980 (Ordinance X of 1980) by which subsection
(2) was added to original section 12 of Civil Procedure Code. The said subsection (2) reads as under: "(2) Where a person challenges the validity of a judgment, decree or order on the plea of fraud, misrepresentation or want of jurisdiction, he shall seek his remedy by making an application to the Court which passed the final judgment, decree or order and not by a separate suit."
6. ' This subsection (2) enables the person challenging the validity of a judgment, decree or order on the plea of fraud, misrepresentation or want of jurisdiction through an application to the Court which passed such final judgment, decree or order. In these circumstances, the present application, in substance, is an application under section 12 (2) of the Code of Civil Procedure as the plea taken by the learned counsel for the plaintiffs is that the impugned order has been obtained by misrepresentation of facts.
7. ' Mr. Nasim Faruqi, learned counsel appearing for defendant No,4 though supported the submissions made by Mr. Afsar Abidi, Advocate but has candidly conceded that this application can be treated as an application under section 12 (2), C.P.C.
8. ' In view of above discussion, I would treat this application as one under section 12 (2), C.P.C. As regards the merits of the case Mr. Zubair Qureshi,learned counsel for the plaintiffs has drawn my attention to the photostat copies of two letters brought on record by Mr. Afsar Abidi, learned counsel for defendants No,2, 3 and 5 and has pointed out that these letters are not a concluded compromise or settlement between the parties. I have carefully read these letters with the learned counsel for the plaintiffs. It appears that these two letters of course do not show that there was a complete and concluded compromise or settlement between the parties. It could at the most be treated as a step towards the same wherein the parties were required to do something more in order to achieve the contemplated settlement. The first letter was written by the plaintiffs on 23rd July, 1990 which shows that the plaintiffs were willing to release the personal guarantess of the outgoing Directors inmediately on completion of relevant documents and legal formalities while the second letter which was written by the defendants No,1 to the plaintiffs shows that it was an intimation to the plaintiffs that possession of Mills and delivery of 100% shares had been affected; and that changes had also been notified to the Registrar, Joint Stock Companies. However, there is nothing on the record to show that this position was accepted by the plaintiffs as a complete and concluded settlement. The orders passed by a Division Bench of this Court in High Court Appeal No,259 of 1989 also show that the appeal filed by the present defendant No,1 was permitted to be withdrawn unconditionally which prayer was not opposed by the learned counsel for the present plaintiffs. This order also does not mention if there was any settlement or compromise between the parties.
9. ' In these circumstances I am of the view that the order passed on 9-9-1991 suffers from error apparent on the face of it as the two letters were not referred to in their true perspective. I would accordingly all the orders passed on 9th September, 1991 and set aside the decree. The suit will proceed against the defendants Nos,2 to 5 from the stage the same was fixed on 9th September, 1991. There will so no order as to costs.