' This order will dispose of C.M. No,560-L of 1991 moved by the petitioners for execution of judgment of this Court dated 13-9-1988, C.M. No,321-L of 1993 moved by M/s. Mahmoods hereinafter called the judgment-debtors under section 47 read with Order 21, rules 18 and 19 and sections 151 and 152, C.P.C. For correction of the amount of Rs,72,80,000 and C.M. No, 871-L of 1993 moved by the petitioner/decree-holder praying that M/s. Mahmoods (judgment-debtors) be called upon to perform their part under the decree which they are bound to do under the law.
2. After the order dated 13-7-1978 passed in the main petition for winding up of the Company the dispute was referred to two arbitrators. The said arbitrators delivered award on 3-7-1985. The matter was referred to Mr. Justice (Retd.) K.M.A. Samdani as referee. The referee gave his award on 30-3-1988 which was made the rule of the Court through order dated 13-9-1988.
3. The petitioner i,e, the decree-holder feeling aggrieved against order of this Court rejecting their objections against the award of the referee filed appeal before the Supreme Court and obtained an order for maintenance of status quo on 22-11-1988 which continued to be operative till 26-8- 1990 when the said appeal was finally dismissed by the Supreme Court. From this it is clear that it is the award of the referee as made rule of the Court which is a decree, the execution of which has been sought. According to the award of the referee M/s. Mahmoods' liability (the judgment- debtors) towards Mr. Iqbal i,e,, the decree-holder, was to the tune of Rs,40,00,000. It has been provided in this award that the judgment-debtors i,e, M/s: Mahmoods should clear this debt of Rs,40,00,000 by the 30th of June, 1989 and in case of their failure to do so by the said date, the decree-holder shall be entitled to charge interest @ 15% per annum on the balance remaining to be paid after the said date.
4. The decree-holder seeks execution of this part of the decree. Learned, counsel for the decree- holder submitted that on the failure of the judgment-debtors to pay the said sum of Rs,40,00,000 before 30-6-1989 as provided in the decree, the decree-holders are entitled to interest @ 15% per annum and whatever amount becomes due on account of interest should be added to the said amount of Rs,40,00,000 and the same should be the decretal amount on which further interest at the same rate till the payment of the entire amount due is made shall continue to be added. In order to amplify his argument he submitted that the amount payable on account of interest would be amalgamated in the said amount of Rs,40,00,000 and further interest on the aggregate amount thus payable would be charged.
5. Learned counsel for judgment-debtors is not in agreement with learned counsel for the decree- holders. His case was that whatever amount has to accrue and become payable on account of interest the same shall not amalgamate in the decretal amount of Rs,40,00,000 and whatever payments from time to time are made by the judgment-debtors the same would be adjusted against the said amount of Rs,40,00,000 and the amount accrued on account of interest will be separately determined and paid without any further interest on the said amount.
6. In the award of the referee the judgment-debtors were granted time up to 30-6-1989 for making the payment of the original decretal amount of Rs,40,00,000, failing which they were made liable to pay interest @ 15% per annum on the amount remaining unpaid. This was as a matter of fact a compensation granted to the decree-holders for wrongful withholding of the payment of the decretal amount after the fixed date. If the argument of learned counsel for judgment-debtors is accepted, it would amount to give premium to the judgment-debtors over the wrongful withholding of the decretal amount and also the amount payable on account of interest without any compensation to the decree-holders which was not the intention decree. The argument of learned counsel for decree-holders had considerable force. Whatever amount becomes payable on account of interest after 30-6-1989 would form part of the original decretal amount of which further interest would be payable and this process shall continue till such time the entire decretal amount so payable is fully paid.
7. Learned counsel for decree-holders submitted that through order dated 16-6-1991 learned Company Judge held that up to the said date an amount of Rs,72,80,000 had become due, therefore, from this date the decretal amount should be treated to be Rs,72,80,000 on which further interest would be payable till such time the entire amount is paid. Learned counsel for judgment- bebtors submitted that the calculation and determination of the decretal amount was not properly made in the order dated 16-6-1991, therefore, they have made C.M. No, 321-L/93 for correction of the error.
8. Learned counsel for decree-holders submitted that if the judgment-tors were aggrieved of the order dated 16-6-1991 determining the decretal ount at Rs,72,80,000 they should have challenged the same in appeal which order has become final.
9. The argument of learned counsel for decree-holders in this respect when considered in the light of the order dated 16-6-1991 and the interim order passed by the Court thereafter has not much merits in it. It is manifest from order dated 16-6-1991 that the said figure was not determined on the basis of conscious application of mind to this aspect of the case and does not amount to final adjudication. This figure was mentioned with the observations that all said and done this was the amount due. Even if that was so nothing debars in law the judgment-debtors from making an application for correction of the mistake made by the Court in determining the said amount for the decree-holders themselves in Civil Miscellaneous No,560-L of 1991 have sought the execution of decree dated 13-9-1988 as originally passed and not order dated 16-6-1991 treating the same as decree. Since according to original decree dated 13-9-1988 the Court is to determine as to what exact amount had become due if calculated in accordance with the terms thereof by adding interest, therefore, in the proceedings for execution of decree the Court at this stage is not divested of the jurisdiction to determine the amount recoverable in execution thereof.
10. The view that the amount determined in the order dated 16-6-1991 was merely tentative and not final, finds support from subsequent order dated 14-7-1993 passed by the Court in which further calculations were made and it was held that prima facie approximately an amount of Rs,10,00,000 was payable by the judgment-debtors on account of interest which' was ordered to be deposited.
This amount as observed in the order dated 8-8-1994 has already been deposited by the judgment-debtors.
11. The next question which falls for consideration is to decide as to the manner in which the decretal amount is to be determined. The decree-holders tiled appeal against the decree dated 13-9-1988 before the Supreme Court in which an order was passed by the Supreme Court on their application for maintenance of status quo. Learned counsel for decree holders read out in the Court the prayer made in the miscellaneous application on which the order was passed by the Supreme Court which makes it clear that they sought an order that the said decree should not be acted upon. According to the decree the judgment-debtors were made liable to pay interest @ 15% per annum on their failure to make payment of the decretal amount on or before 30-6-1989, but due to this order for maintenance of status quo they would not be liable to pay interest up to the date of decision of the appeal i.e, 26-8-1990 as the said order remained operative up to the said date.
12. In the order dated 16-6-1991 the claim of he judgment-debtors for adjustment of another amount of Rs,2,00,000 already paid by them, was allowed. This was further confirmed in the subsequent order dated 18-3-1992.
13. The argument of learned counsel for decree-holders that since the amount by the judgment- debtors was paid in the year 1987 prior to the date of award delivered by the reference, therefore, it was not adjustable as the question of adjustment of the same should have been raised before the referee. This argument in view of the abovementioned two orders dated 16-6-1991 and 18-3-1992 cannot be accepted. The said amount of Rs,2,00,00,000 is also adjustable against the decretal amount which became due on 16-6-1991 on which date the said claim was allowed.
14. The judgment-debtors have also admittedly paid an amount of Rs,38,12,830 to the Standard Chartered Bank which according to the decree was an amount payable by the business units which had fallen to the share of the decree-holders the payment of which was secured by the securities furnished by M/s. Mahmoods i,e, the judgment-debtors. According to the decree the decree-holders were directed to replace the said securities by their own by 30-6-1988 much prior to the last date i,e, 30-6-1989 fixed for payment of the amount of Rs,40,00,000. The decree-holders admittedly did not replace the said securities so that the land of the judgment-debtors could be released from encumbrance so that they may be able to sell the same and raise money for payment of the decretal amount. Learned counsel for decree-holders when questioned as to why the judgment-debtors should not be allowed to adjust this amount against the decretal amount referred to section 69 of the Contract Act and argued that the conditions laid down in this provision of law having not been fulfilled, therefore, the judgment-debtors could not get benefit of payment of this amount of loan due from the decree-holders to the Bank of their own without there being any compulsion of any kind against them to make the said payment by the Bank.
15. Section 69 of the Contract Act is as under:--- "A person who is interested in the payment of money which another is bound by law to pay, and who, therefore, pays it, is entitled to be reimbursed by the other."
16. Learned counsel for decree-holders submitted that according to the illustration under this section a person could make payment of an amount due from the other only if he was compelled to do so and there being no such compulsions brought about by the Bank against the judgment- debtors by threatening them to take coercive measures as such payment was made by them of their own. He relied upon judgments reported as Govindram Gordhandas Seksaria and another v.
The State of Gondal by his Highness the Maharaja of Gondal and others (AIR 1949 PC 279) and New Jubilee Insurance Co. Ltd., Karachi v. M/s. American Orient Lines Inc., New York and 2 others (PLD 1977 Karachi 569) in support of his argument.
17. I am not inclined to accept this argument for an illustration under any provision of law may provide guideline for interpretation of such provision but cannot be accepted as the law itself. The judgment-debtors' land was under encumbrance due to the said amount of loan payable by the decree-holders which security they were bound to get released before the particular date which they failed to do, therefore, no wrong was committed in law by the judgment-debtors in making the amount of loan due to the Bank on behalf of the decree-holders from the amount payable to them under the decree and getting the land released from encumbrance. I would, therefore, accept the plea of the judgment-debtors that they are entitled to the adjustment of an amount of Rs,38,13,830 from the total decretal amount which was due on the date when this payment was made to the Bank.
18. Learned counsel for the decree-holders then submitted that the decree-holders might have settled the matter with the Bank as they had raised a substantial issue as regards the actual amount payable on account of the said debt including trate of mark-up and they might have succeeded in getting an adjudication in this regard in their favour from the Court by filing suit had the bank not agreed with them in which case an amount less than Rs,38,13,830 might have been held to be due.
19. If the petitioners/judgment-debtors had any genuine dispute about the amount of loan payable to the bank they should have got made some provisions in the award that till sue-. Time they had got the said dispute settled the securities shall not be replaced. The decree-holders could not by their own omission of not replacing the securities within the fixed time get premium over the same.
Even if they had a genuine dispute with the bank, they should approach the Bank for replacement of securities with their own of the same amount and get the securities of judgment-debtors released and thereafter get the dispute decided at the convenience. Keeping in view the facts and circumstances of the present case in my view the judgment-debtors are entitled to the adjustment of Rs,38,13,830 against the decretal amount with consequential reduction in interest. Learned counsel for decree-holders faced with this situation submitted that the point for adjustment of this amount of Rs,38,13,830 was earlier raised by the judgment-debtors and it was repelled through order dated 17-3-1992. Order dated 17-3-1992 if perused would show that the dispute as to adjustment of this amount of Rs,38,13,830 was not decided or the plea urged by the judgment- debtors repelled. This order shows that on behalf of the decree-holders an undertaking was given to get the land of judgment-debtors released within a week in their favour on payment of Rs,38,13,830 in case which undertaking accepted by the judgment-debtors subject to the condition that the Bank was agreeable to the said arrangement. On this notice to learned counsel for Bank was issued who appeared on 18-3-1992 and stated that the Bank was not willing to pay back the deposit of Rs,38,13,830 and that the landed property which was encumbered in favour of the Bank had already been released.
20. It is rather clear from this order that the decree-holders accepted the position that they were entitled to payment of the said amount in cash only had they got the land of the judgment- debtors released from encumbrance. It was an offer made at a belated stage.
21. Be that as it may. There is nothing to prevent the decree-holders to seek remedy against the said Bank if they are of the view that instead of Rs,38,13,830 lesser amount was payable and in case it is decided in their favour by any Court they can claim the refund but the payment of the said amount made by the judgment-debtors on their behalf in these circumstances can justifiably be allowed on the principle of justice, equity and good conscience and the law.
22. The judgment-debtors have also claimed adjustment of Rs,6,00,00Q payable as compensation for the office premises etc. But this cannot be allowed as per terms of the award which clearly provided that it will not be adjustable against the decretal amount which is a separate matter.
23. Apart from the abovementioned amounts the judgment-debtors have also according to decree-holders been paying different amounts on different dates which are adjustable against the decretal amount which became due according to the above formula on that particular date.
24. I, therefore, direct the parties to submit further statement of accounts after calculating the decretal amount according to the abovementioned decision and making adjustment of the amounts mentioned above against the same and the other payments made from time to time so as to ascertain as to the exact amount payable at present by the judgment-debtors.
25. C.M. No,321-L of 1993 is disposed of in the above terms. Further order for recovery of the amount so ascertained in execution will be passed after the determination of the exact amount on the basis of the said statements and order in C.M. No,871-L of 1993 shall also be passed simultaneously with the same.
26. To come up on 10-7-1995.