1. ' Applicants through this application under section 12(2), C.P.C. Read with section 151, C.P.C. Have prayed for setting aside the decree, dated 25-9-1998 passed on compromise application filed by the plaintiff signed by the defendants' counsel on the grounds that the Advocates for the defendant namely Mr. Saddiq Mirza had no authority to sign the compromise application under Order 23, Rule 3, C.P.C. The Power/Vakalatnama executed by the defendants in favour of their advocate contains a specific instruction not to compromise, settle or abandon or relinquish any part of the claim without express authority from them. The applicant has also taken other grounds that the plaintiff has no case on merit and on one hand the plaintiff participated in the meeting on the other hand by misrepresentation obtained the decree. In my view the provisions of section 12(2), C.P.C. Can be pressed into service in cases where fraud is played or misrepresentation is made during the proceeding of the suit in Court and not anything done outside the Court. In this regard, reference can be made to the view expressed by this Court in Begum Anwari Khanum and another v. Pakistan (Pvt.) Ltd. And another (1993 MLA 1555). Therefore, only question which requires determination is whether signing of the compromise application on behalf of the applicant- defendant against specific instructions, would amount to fraud played on Court as well as the party viz. Applicant-defendant.
2. ' The application has been resisted by the plaintiff-respondent by filing counter-affidavit, wherein the case set up by the plaintiff-respondent was that the provisions of section 12(2), C.P.C. Cannot be pressed into service is no fraud has been committed nor misrepresentation has been made.
3. The compromise was signed after instructions from defendant No, 1 .
4. ' Out of the contentions, six issues were framed. The parties were allowed to lead evidence. The applicant examined (i) Mr. Siddiq Mirza, Advocate, who was representing the applicant-defendant in Suit No,2 of 1993, (ii) Shabbir Ahmed, Director, Legal of applicant and lastly (iii) Sohail Akhtar Siddiqi. The compromise application (Exh.P.1/2) and power of Mr. Siddiq Mirza, Advocate on behalf of applicant-defendant No,1 filed in the above suit were also produced as Exh.P.1/1, whereas on behalf of the plaintiff-respondent Abdul Karim Khan was examined. Numerous documents were also brought on record.
5. ' Briefly stated the facts leading to the present application are that the plaintiff-respondent filed suit for declaration, Specific performance and Injunction against the applicants-defendants with the following prayers:-- "(a) to declare that as per the Agreement the fishing right in Hub reservoir was assigned to the plaintiff and the defendants are not entitled to assign any contract to another contractor by ignoring the plaintiff;
(b) to declare that the plaintiff has spent millions of rupees for the development of the reservoir and entitled to fishing right as per the agreements;
(c) to direct the defendants to perform their part of obligations of the contractors.
(d) to restrain the defendants, their agents, representatives, attorneys, officers or any person acting on their behalf from assigning or giving the contract of fishing rights of Hub reservoir to any other person except the plaintiff as agreed in the agreements and also restrain them from dispossessing the plaintiff and its employees from the reservoir and further restrain them to interfere into the developing process of the plaintiff."
6. ' Alongwith the plaint, an application under Order 39, Rules 1 and 2, C.P.C. Was also filed, which was disposed of on the statement of defendant No,4, by order, dated 10-5-1994: "I, Abdul Hameed Qureshi, Director, KIP/Hub Dam Project, WAPDA, defendant No,4, state that the WAPDA have no intention to allocate the right of the fishing to any party except the plaintiff and the agreement will be implemented as soon as the ban on commercial fishing will be lifted by NCCW."
7. ' C.M.A. 4380 of 1994 under Order 23, Rule 3, C.P.C. Was filed duly signed by plaintiff-respondent's counsel and applicants/defendants' counsel namely Mr. Siddiq Mirza. The terms and conditions of the application read as under:-- "It is submitted that this Hon'ble Court disposed of C.M.A. 25 of 1993 on 10-5-1994 on the basis of the statement dated 21-2-1994 given on behalf of the defendants by defendant No,4.
(2) That the plaintiff achieved the relief claimed in the suit due to aforesaid statement, therefore, the plaintiff has no intention to further proceed with the suit.
8. ' In view of the above, it is prayed that this Hon'ble Court be pleased to dispose of the above suit as well as 827 of 1990 on the basis of statement dated 21-2-1994."
9. ' The C.M.A., referred to above was disposed of by order, dated 25-9-1994 followed by decree, which reads as under:-- "Counsel for the plaintiff states that in view of the statement dated 21-2-1994, the whole suit may be disposed of on the basis of the statement and for that purpose this application (C.M.A. 4380 of 1994) under Order 23, Rule 3, C.P.C. Has been moved, which is signed by counsel for the plaintiff and counsel for the defendant praying that the suit may be disposed of on the basis of the statement dated 21-2-1994.
10. ' The application is granted. The suit is decreed as prayed." Hence the present application.
11. ' As already pointed out that the main question requiring determination is whether an order passed on compromise application signed by advocate can 1e set aside under section 12(2), C.P.C. And whether the act of the counsel in signing the compromise application on behalf of the applicants- defendants amounts to fraud/misrepresentation played on Court as well as party, other issues are immaterial.
12. ' The counsel namely, Mr. Siddiq Mirza, who was representing the applicant-defendant No,1 in Suit No,2 of 1993 was examined and power given to him by the defendant (WAPDA) has been produced as Exh.P.W.-1/1. The defendants had given him specific instructions in terms of clause 4 that "the counsel shall not have authority to compromise or settle the cause or abandon the issue or to relinquish any part of the claim without express authority from the principal". Mr. Siddiq Mirza has also admitted that there was no written instructions from WAPDA to compromise the matter.
13. ' Learned counsel for the respondent-plaintiff has vehemently opposed the application by contending that when an Advocate enters into a compromise on behalf of a party without being specifically authorized in this behalf, the matter would purely be between the advocate and the party and no compromise can be set aside merely on the ground that the Advocate had no authority and referred the view taken by the Division Bench of this Court in Mobile Eye Service of Pakistan v. Director, Social Welfare/Registration Authority (PLD 1992 Karachi 183), wherein review of consent order was sought under Order 47 read with sections 151 and 12(2), C.P.C. On the ground that Mr. Hasan Akbar, the then Assistant Advocate-General had no authority from respondent No,1 to enter into a compromise on her behalf but there was not even a remote suggestion that Mr. Hasan Akbar while giving his consent was motivated by any consideration of fraud, or that he had colluded in any manner with opposite-party to give his consent to said compromise. There was nothing to point out that misrepresentation was made by Mr. Hasan Akbar notwithstanding the fact that he had no authority to enter into a compromise on behalf of the respondent No,l. Mr. Hasan Akbar's authority to enter into a compromise on behalf of his client was not questioned at the relevant time. In this factual background reference to the provisions of section 12(2), C.P.C. Was found to be misconceived and such provision would not be attracted.
14. ' Learned counsel for the applicant has contended that Mr. Siddiq Mirza's power was on record he was specifically instructed not to enter into compromise or abandon any issue as such the act on the part of Mr. Mirza is nothing but misrepresentation, which culminated in the decree against the applicants, although Mr. Badar Alam, has not cited any case-law on the point but there is no dearth of case-law on the point. In Sourendr Nath Mitra and others v. Tarubala Dasi (AIR 1930 Privy Council 158) Privy Council has held that unless there is specific authority to the contrary, and in absence of written authority such as a Vakalatnama, an Advocate has implied authority of his client to settle the suit". The same view was taken by Supreme Court of Pakistan in Dr. Ansar Hasan Rizvi v. Syed Mazahir Hussain Zaidi (1971 SCMR 634) that it has not been contended that the learned Advocate concerned held any Vakalatnama, which expressly or impliedly debarred him from entering into compromise. Nor anything has been produced to show that the learned advocate's implied authority was countermandated by express direction of his client.
15. ' In Basangouda Hanmantgouda v. Churdhigririgouda (1910) Vol. V Indian Cases 968) a Division Bench of Bombay High Court equated a compromise, without consent of a party, with fraud on Court and ultra vires and void as to the said party, by observing that "the compromise was not binding on the defendant and the decree passed on compromise application was ultra vires and void as to the defendant. The decree passed on document which has no legal foundation to rest upon and if that decree went out the whole suit was re-open as the defendant never consented to the compromise there had been fraud committed on Court. It is an inherent power of every Court to correct its own proceeding where it has been misled".
16. ' It may be pointed out that a distinction was made between "fraud" played upon the Court and "fraud" played upon the party for remedial action/proceedings. In the former case, the order was subject to recall in the same proceedings in which it was made, in exercise of its inherent jurisdiction. In the second case, it was necessary to set aside the order by a separate action.
17. (Muhammad Bibi v. Abdul Ghani PLD 1973 Karachi 444).
18. ' The following decisions are in cases pertaining to "fraud played upon the Court", wherein the orders/decrees were recalled/set aside under the inherent jurisdiction, (i) Peary Choudhry v.
19. Sonoory Dass (AIR 1995 Cal. 622), (ii) Akina Bibi and others v. Muhammad All Shah (AIR 1941 Cal.
20. 336), (iii) Sadho Saran Bai v. Anant Raj (AIR 1923 Pat. 483), (iv) Chuttan Prasadsah v. Mst. Bisunikaur (AIR 1943 Pat. 13).
21. ' The cases, involving order obtained by "fraud played upon the party" subjected to separate proceedings by way of suit, the decisions to be referred are: (i) Forlcoomany Dasi v. Woody Chunder Biswa s (ILR 25 Cal. 649), (ii) Barhandas Parsad v. Banarsi Parsad (1906) 3 CU 119, (iii) Mst.
22. Gulbkoer v. Badshah Bahadur (13 CWN 1197), (iv) JG Galstaur v. Pramatha Nath Roy (AIR 1929 Cal.
23. 470), (v) Grindlays Bank Ltd. v. Murree Brewery Co. Ltd. (PLD 1954 Lah. 745) (vi) Muhammad Yousaf v. Tajammul Hussain (PLD 1972 Lah. 565).
24. Thus the provision of subsection (2) of section 12, C.P.C., was brought on statute book with the purpose to provide a remedy, to the aggrieved party and to save him from the agony of further litigation by filing suit for setting aside a decree obtained on fraud, misrepresentation and without jurisdiction, in the same proceedings.
25. ' In Surrendara Nath (supra) Lord Atkin explained the nature, extent and scope of implied authority with reference to compromise as under:-- "An Agreement to compromise a suit must be established by general principles which govern the formation of contracts, though there are special rules governing its enforcement by the Courts which arise out of its intrinsic nature. If the agreement purports to be concluded on behalf of one or both the parties by their respective legal advisers the first two questions that arise, as on the formation of any contracts by agents are:
(I) Had the agent the actual authority of his principal, express or implied, to conclude the contract?
(2) If no actual authority, had he ostensible authority so as to bind his principal against the other party, relying on ostensible authority?.
26. ' An agreement to compromise a suit, however, almost necessarily involves recourse to the further jurisdiction of the Court in which the suit is brought to effectuate the terms of the compromise. And in several cases in English Law the Courts have refused to enforce the agreement of compromise where it has been established that the legal adviser had in fact no actual authority to settle, or acted under some serious misunderstanding, so that to allow the other party to act upon an ostensible authority would be to impose upon the Court an exercise of jurisdiction which would in fact work substantial injustice. Hence there may arise a third question:--
(3) Will the Court where the suit is compromised give effect to the terms agreed?
27. ' The power to compromise a suit is inherent in the position of an advocate in India. The considerations which have led to this implied power being established in the advocates of England, Scotland and Ireland, apply in equal measures to India. It is a power deemed to exist because its existence is necessary to effectuate the relations between advocate and client, to make possible the duties imposed upon the advocate by his acceptance of the cause of his client. The implied authority of counsel is not an appendage of office, a dignity added by the Courts to the status of barrister or advocate at law. It is implied in the interests of the client, to give the fullest beneficial effect to his employment of the advocate. Secondly, the implied authority can always be countermanded by the express directions of the client. No advocate has actual authority to settle a case against the express instructions of his client. If he considers such express instructions contrary to the interests of his client, his remedy is to return his brief."
28. ' In the instant case, as already observed, Mr. Siddiq Mirza's implied power to compromise has been countermanded by the express direction of his client. Therefore, he cannot clothed himself with implied authority to settle/compromise the matter on behalf of his client against the express instructions. The case referred by Mr. Mumtaz Shaikh, Mobile Eye (supra) is distinguishable. In the said case Mr. Hasan Akbar appeared as Assistant Advocate-General who was not required to file power consented for an order on behalf of the Court. The fact was not brought to the notice of the Court that had no authority, whereas in the instant case in Vakalatnama/power filed by Mr. Siddiq Mirza on behalf of the applicant-defendants, his implied authority to compromise was countermanded by express direction not to enter into compromise or abandon any claim. Thus, I am of the view that such action on the part of Mr. Siddiq Mirza is to be equated with "misrepresentation" a synonymous term of "fraud" played not only on the Court but with applicant as well in the light of view expressed by Division Bench of Bombay High Court in Basangouda case (supra), which is based on the view taken by House of Lord in Neal v. Gordon Lennox (1902 AC 465).
29. ' In the light of the above discussion, I am of the view that Mr. Siddiq Mirza by signing the compromise application has exceeded the authority given to him and misled the Court in passing the decree. Therefore, the provisions of section 12(2), C.P.C. Are attracted in the case. I, therefore, set aside the decree passed on 25-9-1994 in Suit No,2 of 1993, however, with no order as to costs.