' SYED NAJAM-UL-HASSAN KAZMI, J.---This judgment will decide R.F.A. No,493 of 1999 and F.A.O.
No,323 of 1999, as the same raise common issues.
2. Facts necessary for appreciating the controversies herein are that respondent (Askari Commercial Bank Ltd.), filed a suit for recovery of Rs, 15,737,794.86 plus US $ 560120 (less 6.000 million) with future mark-up, against appellants, claiming that appellant No,1 was a partnership firm having appellants Nos.2 and 3 as its partners, appellant No,2 used to deal in export of rice, at the request of appellant No,1 cash facility of Rs,15.000 million was allowed from time to time which was repayable with mark-up and that other financial facilities, in the form of finance against Packing Credit (PAPC) and foreign bills purchase (FBP) was also extended in favour of appellant, which was duly availed. To secure repayment of cash finance and FAPC facilities, appellant No,1 executed various documents including agreement for financing on mark-up basis dated 5-8-1997, general financing and collateral agreement dated 5-8-1997, demand promissory note dated 5-8- 1997 alongwith letter of continuity of even date, pledge agreement dated 5-8-1997, letter of set-off dated 5-8-1997, letter of hypothecation and receivables dated 5-8-1997 and hypothecation agreement dated 5-8-1997. Similarly, appellants Nos.2 and 3 executed their personal guarantees dated 5-8-1997. Memorandum of deposit of title deeds dated 5-8-1997 was executed by appellant No,3 to create equitable mortgage of her property, measuring 10 Marlas in Nishtar Block, Allama Iqbal Town, Lahore, together with construction, furniture, fixtures and appurtenances installed therein. Another memorandum of deposit of title deeds dated 5-8-1997 was claimed to have been executed by appellant No,3 for creating equitable mortgage of her Property No,42, 3rd Floor, measuring square feet in Sadiq Plaza, the Mall, Lahore, together with furniture, fixtures and appurtenances therein. It was maintained that the original title deeds were delivered to respondent-bank as a security for repayment of the outstanding dues against appellant No, 1 . As per plea of respondent, the appellant availed aforementioned banking facilities but failed to liquidate the liability towards the bank, with the result that the suit amount was due from them.
3. Application under section 10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, for the grant of leave to appear and defend the suit (PLA No,17-B of 1999) was filed. On 17-5-1999, the suit was decreed on the statement of learned counsel for the appellants, who stated that the appellants would not contest the suit, if they were allowed six months' time to pay the suit amount and that they would also be liable to pay mark-up at the agreed rate during this period. This offer was accepted by the other side, which resulted in the grant of impugned decree dated 17-5-1999, in terms whereof, appellants were allowed six months' time to liquidate their liabilities. The claim for liquidated damages was, however, declined. R.F.A.
No,493 of 1999 arises from the consent decree dated 17-5-1999.
4. On 11-6-1999, appellants filed C.M.322-B of 1999 purportedly under section 12(2) of C.P.C., for setting aside of order and decree dated 17-5-1999, passed against them in the main suit (COS. No,1 of 1999). This application was dismissed by the learned Single Judge Banking, Lahore High Court Vide order dated 27-10-1999. F.A.O. No,323 of 1999 arises from the order declining application under section 12(2) of C.P.C.
5. Challenge has been thrown to the decree dated 17-5-1999 by the learned couhsel, on the ground that the counsel had no authority to compromise or to agree for the grant of decree in terms of the compromise. It was contended that the counsel acted beyond instructions and authority, hence the decree could not sustain. It was maintained that the facility for the recovery whereof suit was filed, was not availed, hence the appellant could not be burdened with the liability to liquidate the same. Regarding order passed on application 12(2) of C.P.C., learned counsel reiterated the same argument and maintained that the application could not be dismissed, as the compromise was patently without lawful authority.
6. In defence, learned counsel for the respondent submitted that R.F.A. As well as F.A.O. Were not maintainable, as no appeal would lie against a consent decree and also as no appeal was maintainable against an order passed on application under section 12(2) of C.P.C. It was vehemently urged that there was no allegation of fraud, raised against the counsel and that the counsel had the authority to compromise and in any case, the implied authority to compromise could not be denied in the absence of any specific bar.
7. Admittedly, suit of respondent was decreed on 17-5-1999, in consequence of the statement of learned counsel for the appellants to the effect that appellants would not contest the suit, in the case they would be allowed six months' time to pay the suit amount and in that eventuality they would also pay the mark-up at the agreed rate during the period of six months. The offer was, accepted by the learned counsel for other side with the result that the suit was decreed, period of six months was allowed to appellants for payment of the decretal amount alongwith the future mark-up and claim for liquidated damages, raised by the respondent was declined. For all intents and purposes, it was a consent decree. Under section 21 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, any person aggrieved by a decree or an order refusing to set aside the decree can prefer an appeal. It is true that there is no such bar as is contained in section 96(3) of C.P.C., as to the filing of appeal against a consent decree, yet this will not mean that the Banking Act of 1997 provides for an appeal against a consent decree. It only provides for an appeal, if the party is aggrieved from the decree. Any person, who invites the Court to adopt a particular procedure, cannot after the decision have been rendered against him, be allowed to complain against the passing of order to which he would be deemed to be a party. Appellant having themselves appointed a counsel, not denying the fact that the counsel was duly appointed, to act on their behalf and to do all other things necessary and ancillary to the proceedings and the counsel making a statement, to give effect to a compromise on their behalf, the appellants against whom the ultimate decree is passed will be estopped to challenge the same in appeal. Decree will be deemed to be one passed with the consent of appellants and it will not be open for them to appeal from it. Despite the absence of a bar, like subsection (3) of section 96 of C.P.C., in section 21 of the Banking Act, 1997, the A order or decree passed with the consent of parties will not be deemed to be appealable as the section only permits filing of appeal by an aggrieved person and not by a person who, being an instrumental to the decree and having given consent through duly appointed counsel, will be deemed to have left with no grievance to assail the decree. The appeal against decree, in this case is, therefore, not maintainable.
8. Even on factual plane, no valid ground has been made out to take exception to the course adopted in this case. The only objection of the appellants, as appears from the application under section 12(2) of C.P.C. Is that the counsel made a consenting statement, without obtaining any instructions from them and that the counsel allegedly went beyond the authority and powers delegated to him by the appellants with regard to making consenting statement or compromise.
Careful review of the contents of application reveals that there is no allegation of fraud, raised against the counsel or in the matter of decree, nor it is pleaded that the counsel was misrepresented by the other side or that the decree was obtained collusively. The appointment of Ch. Muhammad Saleem, Advocate by the appellants, to represent them in the suit was not disputed. In the absence of any allegation in the application against the counsel, giving remote suggestion that consent of the counsel was motivated by consideration of fraud and that he had colluded, in any manner, with the opposite-party to give his consent for the compromise, the provisions of section 12(2) of C.P.C. Will not be attracted. Challenge to a decree could be thrown only on the ground that the decree was obtained by fraud or that the counsel was motivated by fraud or collusion with the other side in, making a compromise or agreeing for the grant of decree in terms of the compromise. The plea of fraud and misrepresentation, being missing in the application and there being nothing on record to suggest that the counsel had in any manner, colluded with the other side to act against the interest of appellants or had any ulterior consideration, no interference could be claimed under section 12(2) of C.P.C. Reference can be made to Mobile Eye Service of Pakistan, Karachi v. Director, Social Welfare/Registration Authority, Government of Sindh, Karachi and another (PLD 1992 Kar. 183) and Muhammad Saeed v. Indico Paint Colour Varnish Co. (PLD 1995 Kar.25).
9. Power of attorneys executed by the appellants, in favour of Ch. Muhammad Saleem, Advocate vividly demonstrate that the appellants had agreed to appoint him as a counsel to appear, plead, act and answer in the suit, to sign petitions, statements, compromises or other documents etc. Whatsoever, in connection with the said matter and also to do all acts legally necessary to conduct the case in all respects, whether specified in the power of attorney or not, as may be proper and expedient and that the appellants would ratify and confirm all acts done on their behalf under and by virtue of the said power of attorney. This will make manifestly clear that the counsel representing the appellants had the authority to represent them, act on their behalf, and to effect compromise which the appellants had committed to abide and ratify. In view of the authority delegated to their counsel, the appellants could not possibly take any exception to the act of their counsel in making statements for the grant of decree, giving the benefit to appellants of having six months to liquidate the liability and saving them from liquidated damages. Even otherwise, the counsel has power to compromise on behalf of his clients in the absence of any specific bar to the contrary. It is a settled rule that in the absence of specific provision in the power of attorney, preventing the counsel for entering into a compromise on behalf of his clients or declining authority to enter into lawful compromise in the suit, the counsel is deemed to have implied power to compromise in the suit on behalf of his clients and the decree would be deemed to have been lawfully passed, if no injustice has been caused. Reference can be made to Noor Muhammad v.
Muhammad Kamil and another (1991 CLC 92), Kulsoombai and 5 others v. Mst. Shirinbai and 6 others (1989 CLC 234), Manzoor Ahmad and another v. Sardar and 6 others (1990 MLD (Lahore)
1744). In Dr. Ansar Hassan Rizvi v. Sayed Mazahir Hussain Zaidi and 3 others (1971 SCM R 634), it was ruled by the Honourable Supreme Court that the Advocate appointed by a party has implied authority of his client to enter into a compromise and settle the dispute, unless such authority has been expressly denied. In Noor Muhammad and others v. Muhammad Siddique and others (1994 SCM R 1248), a decree passed on the compromise statement of the counsel was restored by taking in consideration that Vakalatnama executed in favour of the counsel empowered him to take any step and conduct proceedings in the suit, as considered proper by him and the same were acceptable to his client and that there was no allegation of fraud or collusion against the learned counsel. In the present case too, we have observed that in the Vakalatnama, the learned counsel was allowed to plead, act and answer in the Court and to sign petitions, statements. Compromise or other documents and also to do all acts legally necessary to manage and conduct the case in all respects, as the counse! May deem proper and expedient, whether specified in the power of attorney or not. In view of the authority and powers given to the learned counsel, he was competent to act on behalf of the appellants and to give effect to compromise by agreeing for a decree in terms thereof as done in this case, to which no valid exception can be taken. Even otherwise, the appellants having appointed their counsel, giving powers to sign compromise, doing all acts necessary for the disposal of the suit, cannot object to the decree and can only have their remedy against the agent for damages.' Valuable rights having accrued to other party, cannot be denied on any flimsy ground. Reference can be made to Muhammad Humayon Khan v. Akbar Jan (1972 SCM R 567), where it was ruled that if the party claims to have been defrauded by his agent, he can have a remedy by way of suit for damages against him and no exception can be taken to the decision of suit on the basis of his statement. Be that as it may, in this case, there is no specific allegation of fraud against the learned counsel.
10. Reliance was placed oa Mst. Noor Jahan v. Azmat Hussain Farooqi and another (1992 SCM R 876) to contend that the decree in this case could not sustain but on account of distinguishing features and facts of the precedent case, the rule therein is not attracted to the present case. In the said case, it was ruled that the Advocate having power to compromise can enter into a settlement with regard to subject-matter of the suit, in respect of which the authority was given but could not introduce any alien matter or any collateral subject to such settlement or compromise, in the absence of specific authority in that regard. As noted supra, n the present case, no extraneous mater or collateral issue was settled or compromised and in fact, the compromise is in regard to the subject-matter of the suit. This being so, the decree, which is based on a compromise, on the issues arising in the suit, cannot be objected to on any extraneous reasoning, particularly when the allegations of fraud, collusion and misrepresentation against the counsel are conspicuously missing from the application.
11. As regard the argument that the appellant was burdened with liability to liquidate one financial facility, which was never allowed, the same is devoid of substance and appears to have been raised in oblivion of the facts appearing on record: From the application under section 10 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, seeking leave to appear and defend the suit, it is manifestly clear that the appellants admitted the availing of different facilities. In their own application, the appellants stated that cash finance facility of Rs,15.000 million was availed for which stocks of rice were allegedly pledged. It was further admitted that finance against Packing Credit in the sum of Rs,5 Millions was availed against mortgage of properties 2.Ad that certain export to Abu Dhabi was made. It was not thy case of appellant, in the application for leave to., appear and defend the suit that the financial facilities, as detailed-in -the plaint, were not applied or availed or that the security documents including memorandum of deposit of title deeds and guarantees were -not executed. The grounds raised for seeking,, leave to appear and defend were illusory no plausible defence was made nor any triable issue was raised. In the presence of admission as to availment of financial facilities and due to absence of any proof of reimburse= it, no case was made out for leave to appear and it appears that for this reason, appellants acting through their counsel, opted to request for six months' time to liquidate the liability. It may be observed that. The, application dated 17-2-1999 for leave to appear and defend the suit was duly signed by Amjad Iqbal, appellant No,2, partner of the firm and also husband of appellant No,3. Keeping in view this aspect of the matter, one can safely conclude that the application under section 12(2) of C.P.C. Was filed on mere concoctions and baseless assertions.
12. Taking in consideration the circumstances and factors noted supra, we do not find any merit in the two appeals, which are accordingly dismissed.