' I take up these appeals for hearing and dispose of the same by a common judgment as the parties to the appeals are same and the same point is involved in all these appeals.
' Briefly the facts are that the present respondent had filed the civil suit for recovery of the amount in suit against the present appellant on the basis of a dishonoured cheque issued by the appellant.
In the suit, the summons as required under Order XXXVII, C.P.C. were served on the appellant, who moved an application for grant of leave to defend the suit, which was rejected by the learned District Judge, Karachi (South) Being aggrieved, this appeal has been filed.
' The plea taken by the defendant in his application under Order XXXVII, rule 3, C.P.C. and affidavit filed in support thereof is that the appellant is one of the Directors of the respondent-Company; and that there was dispute between the plaintiff in the suit and M/s. United Finance Corporation and its Eleven Directors but only the present appellant came forward and acknowledged the liability and promised to pay on behalf of all the defendants except defendants Nos. 3 and 5 and such compromise was recorded. It is also his contention that this compromise was incorporated in the dispute between the parties which was referred to arbitration before the nominee of the Registrar of Cooperative Societies, Sindh at Karachi being Arbitration Case No,20 of 1989 under section 54 of the said Act. However, a plea has been taken by the present appellant that this cheque was issued by way of collateral security for the amount found to be outstanding for which such acknowledgment was given by the present appellant. The learned counsel for the appellant during the course of arguments contended that he being one of the Directors of the Company could not be individually liable but the liability, if any, would be that of the Company. Secondly, the learned counsel has submitted that the Award of the nominee of the Registrar of Cooperative Societies determines the liability; and that the said Award has an effect of a decree and also the Award shows that the said amount, if not paid shall be recoverable as land revenue arrears and, therefore, the suit under Order XXXVII would not be maintainable but would be effected by the provisions of section 11 of Civil Procedure Code.
' Mr. Abul Inam, the learned counsel for the respondent has vehemently opposed the contention of the learned counsel for the appellant.
I have given anxious consideration to the contentions of the learned counsel for the parties. It may be observed that a perusal of the Award shows that the present appellant had acknowledged his liability to pay the said amount even if the other Directors did not pay the amount. This cheque in dispute was admittedly issued by the appellant towards payment of the said liability and by the fact that the cheque was dishonoured by the Bank a fresh cause of action accrued to the respondent. The question of applicability of section 11, C.P.C. would, therefore, not arise in the present case. Lastly, the learned counsel for the appellant aruged that even if the leave to defend is rejected, the suit could not be decreed straightaway but the trial Court should have recorded the evidence and if from the evidence, the trial Court came to such conclusion, the suit could have been decreed. He has placed reliance on the case of Muhammad Aslam v. Falak Sher 1990 CLC 1119.
As against the above contention, Mr. Abul Inam, learned counsel for the respondent has placed reliance on the case of M/s. Ahmed Autos and another v. Allied Bank of Pakistan PLD 1990 SC 497 wherein it is 9bserved by the Hon'ble Supreme Court that the provisions of Order XXXVII, rule 2, C.P.C. provides that the contents of the application shall be deemed to have been admitted and plaintiff shall be entitled to decree where the defendant does not obtain leave to defend the suit. In these circumstances, I do not find any force in the present appeals and the same are dismissed.
However, there will be no order as to costs.
Appeals dismissed.
1992 MLD 640 [Karachi] Before Salahuddin Mirza, Mirza MAHMOOD BAIG---Plaintiff versus Mirza ASHFAQ BAIG---Defendant Suit No,364 of 1986 and J. Misc. No,68 of 1989, decided on 11th August, 1992.
Civil Procedure Code (V of 1908)--- ----S.12(2) & O.XXIII, R.3---Application to set aside decree on plea of fraud and misrepresentation- --Defendant challenged order of Court which was neither judgment nor decree---Particular position of order referred to did not amount to any misrepresentation or fraud on part of plaintiff-- -Order in question was, subsequently consented to by parties for compromise decree---Court already had dismissed application by defendant in which he had levelled allegation of misstatement---Controversy again raised by defendant through application under S.12(2), C.P.C: amounted to circumventing provisions of law under which compromise decree could not be assailed except on ground of fraud and misrepresentation---Defendant at the time of compromise decree being fully aware of contents of order in question, there was no element of fraud or misrepresentation---Application, thus was not competent. [pp 640, 641, 642] A, B, C, D & E Niazi A. Khalique for Plaintiff. Attaullah Khan for Defendant.
' This is an application given by the defendant under section 12(2), C.P.C. wherein it is prayed that the judgment/order/decree dated 30-3-1987 may be set aside on the ground that the same has been obtained by the plaintiff through fraud and misrepresentation about the fact of the tenancy of the business place of the Firm which he had stated to be in the name of the Firm, at the time of passing the impugned order, whereas the said tenancy had always been in the name of one Mirza Islam Beg as would clearly appear from the various rent receipts and the statements of the Advocate for the plaintiff made from time to time while getting the miscellaneous applications moved by the defendant disposed of.
2. As a matter of fact the order passed by this Court on 30-3-1987 is neither the judgment nor the decree. It is simply an order where by a Misc. Application (C.MA. No,4867/86) was disposed of by the Court. This was an application moved by the defendant for seeking a direction of the Court to the plaintiff to deposit an amount of Rs,1,43,000 in the Court which was received by the plaintiff from the defendant himself in furtherance of a settlement reached between them through the elders of the family on 3-11-1982. As would appear from para. 4 of the affidavit of the defendant filed in support of C.MA. No,4867/86, according to the settlement of 3-11-1982 the defendant was to pay in all Rs,3 lacs but had till then only paid Rs,1,43,000. It was further averred by the defendant in the same affidavit that since a receiver had been appointed by the Court, there was no justification for the plaintiff to retain the said sum of Rs,1,43,000 and that the amount should rather be deposited in the Court and should remain there till the fmal disposal of the suit. According to the learned counsel for the defendant, the following portion of the said order of 30-3-1987 was the result of misrepresentation of the plaintiff:-- "The defendant will be the sole proprietor of the factory and the business and tenancy will also remain in the name of the same concern of which the defendant will be the sole owner."
3. I fail to see how the abovequoted portion from the order of this Court amounts to misrepresentation or fraud on the part of the plaintiff. The order was passed in the open Court. If any fact was not incorporated correctly in the said order, it might amount to an error or inadvertence on the part of the Court and by no stretch of imagination can it be called a fraud and misrepresentation on the part of the plaintiff. It may be noted that the suit was not disposed of through this order and it was only a civil miscellaneous application which was disposed of through it.
4. It was on 14-4-1987 that the parties had filed a compromise application under Order 23, rule 3, C.P.C. in which the parties had desired that the suit be decreed in terms of the order, dated 30-3- 1987 subject to the condition that if the defendant committed any default in compliance of the order dated 30-3-1987, the decree-holder would be entitled to proportionate cost as prayed in the suit and recover the decretal amount or any part thereof through the execution of the decree. On the- basis of this compromise application the suit was decreed the next day on 15-4-1987. Now, if there was any misrepresentation on the part of the plaintiff on the basis of which Court order, dated 30-3-1987 had been passed, the defendant would not have so thoroughly relied upon it and he would not have prayed for the decreeing of the suit in terms of the said order of 30-3-1987. I have already held above that there was no misstatement of fact on the part of the plaintiff nor any fraud or misrepresentation had been committed by him on 30-3-1987 but even if it were to be conceded that the plaintiff had done so, the fact that the defendant relied upon that very order for the final disposal of the suit shows beyond any shadow of doubt that the defendant had affirmed as correct every word of that order.
5. It may also be noted that the defendant had moved C.MA. No,5149/87 on 21-11-1987 which was under Order 39, Rule 1, C.P.C. and even on that stage he was relying on the said order of 30-3-1987- and had not claimed that the plaintiff had played any fraud or misrepresentation upon him.
6. It is also worth noting that the defendant had moved C.MA. No,6623 of 1988 on 26-9-1988 in which he had made the same accusation against the plaintiff and had desired the Court to take appropriate legal action against him for making misstatement at the time of the disposal of C.MA.
No,5149 of 1987 on 30-3-1987. This Court dismissed this application vide order dated 16-4-1989 and while dismissing this application this Court made the following observations:--- "It is not necessary to decide this controversy as from consent order dated 30-3-1987 (which is erroneously typed as 20-3-1987) it is quite clear that both the parties jointly stated before the Court at the time of passing the above order that upon payment of Rs,1,53,000 the defendant will become the sole proprietor of the Firm....There is no indication in the joint statement that the tenancy at that time stood in the name of any other person or that some steps were required to be taken by the plaintiff to get the tenancy changed in the name of the Firm."
7. As would appear from the extract of the order of this Court dated 16-4-1989, this dispute stands settled and the defendant cannot be suffered to make it the subject-matter of this subsequent application under section 12, C.P.C. For the same reason reference of learned counsel for the defendant to note dated 24-11-1984, which was signed by both the parties and is appended to this J. Misc. Application as Annexure 'B' and in which Mirza Mehmood Beg plaintiff had undertaken all the responsibilities (including financial liability) for changing the rent receipts in the name of Mirza Islam Beg, is uncalled for.
8. Learned counsel for the defendant had relied upon AIR 1930 Lah. 937 and AIR 1956 SC 162 but under the circumstances of the case, as discussed above, both these authorities have no relevance to the point at issue.
9. In short, I am of the view that no fraud or misrepresentation of any sort was committed by the plaintiff on 30-3-1987 when the impugned order was passed, that this controversy was brought before this Court and was fully discussed and was finally rejected vide order dated 16-4-1989, that at any rate the averments made by the parties before the Court on 30-3-1987 and the order of the Court of that date both stand merged in the final order, dated 15-4-1987 whereby the suit was finally decreed by way of compromise and therefore the controversy now raised by the defendant through this application under section 12 of C.P.C. actually amounts to circumventing the provisions of law under which a compromise decree cannot be assailed except on the ground of fraud and misrepresentation. The alleged fraud and misrepresentation, even if it were to be conceded that it was committed by the plaintiff, was not the basis of the compromise decree. The defendant had fully known the contents of the order of the Court dated 30-3-1987 and it was on the basis of this order that the compromise decree was passed and therefore the compromise decree is free from any allegations of fraud and misrepresentation. In view of this position I find no merit in this application and would therefore dismiss the same with costs.