' The plaintiffs have filed this suit for recovery of damages/losses, etc. Against the defendants.
Defendant No,1 is Habib Bank Ltd., whereas defendants Nos.2, 3 and 4 are the officers of the said Bank.
2. The plaint discloses that defendant No,1 had filed Suits Nos. 326, 327 and 504 of 1989 against the plaintiffs for recovery of Rs,66,84,548 in the first, Rs,28,77,110.50 in the second and Rs,41,49,761.40 in the third suit. The plaintiffs filed applications under Order XXXVII, Rule 3, C.P.C. For grant of leave to appear and defend the above suits. The said applications were dismissed and the suits were decreed.
' The case, as set up in the plaint, is that the defendants had filed the said suits on the basis of unauthorised and illegal debit entries in various accounts against the plaintiffs spread over millions of Rupees without any justification or any such amount having been ever received by them from the Bank. It is further alleged that the defendants had fraudulently manipulated the record, including mortgage documents. It is further alleged that the various agricultural advances and loans were misappropriated by defendants Nos.2, 3 and 4 themselves against the fictitious loans creating false charges against the plaintiffs.
' The plaintiffs, in view of the above conduct of the defendants, filed Suit No,823 of 1989 against them for recovery of Rs,80,00,000, declaration and injunction with specific reference to the illegalities and fraudulent actions of the defendants. But the above suit was withdrawn on 23-9- 1990 as the defendants had prepared compromise applications for settlement of the claims, to be filed in the aforesaid three suits which were got signed from the plaintiffs and their advocate and returned to the defendants for presentation in the aforesaid three suits and so also in Suit No,618 of 1990, which was filed by the Bank in the Special Banking Court at Sukkur, but, however, the defendants, with mala fide intentions did not present those applications after withdrawal of Suit No,823 of 1989 and got the aforesaid three suits (Suit Nos.326, 327 and 504 of 1989) decreed against the plaintiffs on 20-8-1991 and did not disclose the above fact to the plaintiffs, with the result that they lost the opportunity of filing appeal against the judgments and decrees.
3. The plaintiffs then filed applications under section 12(2), C.P.C. For setting aside the aforesaid decrees dated 20-8-1991. The said applications were dismissed on 17-2-1993.
4. On presentation of the plaint, the office has raised objections with regard to the maintainability of the suit in respect of the three amounts decreed in the aforesaid three suits under section 12(2), C.P.C. The plaintiffs replied the above objection as under:-- "That the suit is not hit by the decision on applications under section 12(2), C.P.C., for the reasons:
(1) That the decisions on the said application is (are) not being questioned nor the same is (are) under dispute.
(2) Nor the said decision operates as res judicata as no issues was framed nor any evidence was recorded, nor the decision thereon being (in) any way affecting (affects) merits of (the) present case.
(3) That the present suit is for damages and (is) bases (based) upon the facts arising out of the compromise in pursuance of which the limits, other than the earlier suit amounts were granted by the Bank but the same were declined illegally on false grounds and non-issues by them."
5. I have heard Mr. Muhammad Sadiq Khan for the plaintiffs.
' The learned Advocate for the plaintiffs has contended that the present suit has not been filed challenging the validity of the decrees passed in the suits or orders passed under section 12(2), C.P.C., and as such the embargo contained in the said provision or section 11, C.P.C. Is not attracted to the present suit. On query the learned Advocate for the plaintiffs submitted that the amounts decreed in the three suits have become recoverable by defendant No,1 herein from the plaintiffs and since the plaintiffs herein are not liable to pay the aforesaid decretal amounts, they are entitled to recover the same from defendant No,1 in the present suit.
' The reading of para.14 of the plaint also shows that the plaintiffs have assessed the claim on the basis of the amounts decreed in the three suits, as damages and further damages allegedly sustained by them because of the decrees passed against them.
' The plaintiffs are seeking decree in this suit on the plea that the defendants had made unauthorised and illegal debit entries in various accounts of the plaintiffs, spreading over millions of Rupees without any justification or any such amount having been ever received by them from the Bank and by manipulation of the record and mortgage documents and that the agricultural advances and loans were misappropriated by defendants against the fictitious loans whereby false charges were created against the plaintiffs. In effect the plaintiffs want this Court to give a decision that the amounts claimed in the aforesaid three suits were not due and payable by them, they are, therefore, entitled to be recompensed by way of damages.
The grounds, that have now been raised in this suit, would have been the grounds of defence in the aforesaid three suits.
' Explanation IV to section 11 of C.P.C. Specifically provides that any matter which might and ought to have been made ground of defence or attack in former suit, shall be deemed to have been the matter directly and substantially in issue in such former suit.
' Therefore, the present suit, on the face of it, is hit by section 11 of the Code.
6. It was, however, contended by the learned Advocate for the plaintiffs that the said issues were not heard and finally decided and as such the said section does not come in the way of the present suit.
' As already noted above, the plaintiffs had filed applications under Order XXXVII, Rule 3, C.P.C. For leave to appear and defend the suit and all the three applications were dismissed in default on 20- 8-1991 and the suits were decreed.
Sub-rule (2) of rule (2) of Order XXXVII, C.P.C. Provides that in any case in which the plaint and summons are in such form, as are prescribed under sub-rule (1) of rule 2 of Order XXXVII, C.P.C., the defendant shall not appear or defend the suit unless he obtains leave, provided by Rule 3 of the said Order so to appear and defend; and, in default of his obtaining such leave, the allegations in the plaint shall be deemed to be admitted and the plaintiffs shall be entitled to a decree. Thus the decrees having been passed in the aforesaid three suits are to be deemed to have been passed by the Court on admission of the defendants in the said suits. What is admitted in the above context are the allegations made in the plaints and the amounts respectively claimed to be due and payable by the defendants in the said suits.
' Order XII, rule 6 refers to admission of fact having been made either on the pleadings or otherwise.
The use of the word "otherwise" in the above rule would cover the cases provided for under sub- rule (2) of rule 2 of Order XXXVII, C.P.C.
' In the case of Abdul Ghani v. Muhammad Saley Haji PLD 1960 Kar. 594, following the rule laid down by a Division Bench in the case of Baldevdas Karsondas Patel v. Mohanlal Bapalal Bahia and others AIR 1948 Born. 232, it has been observed that the judgment passed under Order XXXVII, C.P.C. When the defendant is refused leave, is considered on merits and is treated as res judicata.
In.Kambala Sundar Arajamma v. P.S. Ramulu Chetty and others AIR 1932 Mad. 519, it has been observed that the doctrine of res judicata operates not only to actual decisions incorporated in decree but to facts accepted or admitted by the parties. The same view was expressed subsequently in the case of Sukhrani and another v. Gajraj Singh and others AIR 1942 Oudh 354.
' In the latter case it was also laid down that the Court has to see whether a certain plea, if taken, would have defeated the suit as brought and if it finds that there was any such plea available but was not taken, one must hold that plea ought to have been taken and that it could not be taken in the subsequent suit. Applying the above rule, it is to be held that the plaintiffs are debarred from raising the pleas that should have been taken by them in the previous suit. It being the settled law that the decision under Order XXXVII, C.P.C., in default of obtaining leave, is to be taken a decision on merits and even otherwise the plaintiffs are to be deemed to have admitted the respective averments as made in the former suits, on dismissal of their applications under Order XXXVII, rule 3, C.P.C., the suit is hereby held to be barred by section 11 of the Code.
7. Order dated 17-2-1993 whereby plaintiffs' applications under section 12(2) of the Code were dismissed disclose that the only ground taken by the plaintiffs with regard to the fraud allegedly played by defendant No,1, was that the disputes were compromised between the parties, the compromise applications were prepared and signed by the parties and were handed over to defendant No,1 to be filed in Court but such applications were suppressed. No ground was raised with regard to the falsity or legality of the statements of the accounts on which the various claims made by defendant No,1 in the said suits against the plaintiffs were based. The learned Judge, on consideration of the evidence placed before the Court and the material on record in support of the above submission by the plaintiffs, reached the conclusion that no compromise was arrived at on or before 28-8-1991, when the suits were decreed and that the compromise applications were never returned by the plaintiffs herein to defendant No,1, that is to say for presentation before the Court. No appeal was filed against the orders dated 27-2-1993 and the same have attained finality.
8. Subsection (2) of section 12, C.P.C. Specifically provides that 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 separate suit.
' The learned counsel for the plaintiffs has contended, as stated above, that the present suit has not been filed challenging the validity of the decrees passed in the suits or orders passed under section 12(2), C.P.C. And as such the embargo contained in section 12(2), C.P.C. Is not attracted to the present suit.
' The submission of the learned counsel, on the face of it, may appear to be somewhat attractive but what is being sought by the present suit is the decision that the respective amounts decreed in the aforesaid suits were not in fact due and payable and, therefore, the plaintiffs in this suit are entitled to recover the said amounts from the defendants on its realisation by them on the basis of the aforesaid decrees. In a sense he wants to put the entire process of the aforesaid suits culminating in decree in reverse and thereby recover the amounts from the defendants if realised on execution of the decrees from the plaintiffs. Thus on unveiling the submission one finds it to be the one for reversing the decree indirectly. In the process of reaching the above conclusion, the Court has to give the decision in respect of the issues raised by him with regard to falsification of accounts, manipulation of documents, etc. And in effect to hold that the decrees have been obtained by fraud and misrepresentation. It is the rule of law that what cannot be done directly cannot be allowed to be done indirectly. If the above submission is accepted as it is, it will lead to devastating consequences and nullify the object sought to be achieved by section 12(2), C.P.C.
' There is, therefore, no escape from the conclusion that the suit is barred by subsection (2) of section 12 of the Code, as well.
' The office reference is, therefore, accepted as above and the plaint is hereby rejected under sections 11 and 12(2), C.P.C.