Updated: Monday April 29, 2013/AlEthnien Jamada El Thaniah 19, 1434/Somavara Vaisakha 09, 1935, at 10:05:02 PM
Spl. High Court Appeals
No.159, 160, 161 and 162 of 2001.
Dates of hearing: 15.08.2001, 21.08.2001, 28.08.2001, 29.08.2001, 30.08.2001 & 4.9.2001.
Mr. Syed Sharifud-Din-Pirzada, the learned counsel for the appellants.
Mr. Khalid Anwar, the learned counsel for the respondent.
The facts as stated by the appellants in the memos of appeals are that the respondent in 1982 granted several loan/ finance facilities to the tune of Rs.584,065,920/- to M/s Dadabhoy Cement Industries Limited (hereinafter referred to as DCIL) to make payment of a total sum of Rs.1,013,066,026/- towards the repayment of the above loan facility. The above loan facilities were secured by way of mortgage of the properties of DCIL and after making payment of the aforesaid amount, DCIL filed a suit against the respondent for redemption of mortgage being suit No.416/96, whereas the respondent filed a suit against DCIL being suit No.1430/97 for recovery of the amount allegedly outstanding in respect of the aforesaid loan facilities. In suit No.416/96, the parties filed an application under Order XXIII Rule 3 CPC (hereinafter referred to as the Compromise) for disposal of the suit in terms of the compromise. As the appellants have vehemently challenged the legality and propriety of the Compromise and had prayed for its cancellation, it will be appropriate to reproduce the same in extenso as under:-
It is submitted on behalf of the parties in the above suit that pursuant to a Memorandum of Understanding dated 19.12.1997 (Annexure ‘A’) executed between Dadabhoy Cement Industries (“DCIL”) the Plaintiff No.1 herein and NDFC the Defendant a settlement has been arrived at including the dispute in the present suit encompassing all the disputes in relation to the accounting of various facilities provided by NDFC to DCIL and rescheduling/ restructuring of there loans/ facilities including the dispute in the present suit. The dispute involved in the present suit has been resolved on the following terms and conditions:-
1. That it has been agreed between the parties that the interest based loan facilities and mark up based finance facilities specified in Annexure ‘B’ offered by NDFC to DCIL shall be treated as withdrawn/ cancelled in all respect as if the said facilities as to each and every one of them was never offered by NDFC to DCIL.
2. That it has been agreed between the parties that out of the amounts from time to time paid by or for the account of DCIL to NDFC and received by NDFC upto 1.9.1997 on account of various interest based term loan facilities as well as mark up based term finance facilities, an aggregate amount of Rs.948.10 million (Rupees Nine Hundred Forty Eight million one Hundred Thousand only) received from DCIL (in cash, through adjustment of certain loan amounts disbursements, amounts reimbursed by the local banks and Rs.10.36 million received from Asian Development Bank) shall be deemed to have been received and appropriated by NDFC in part payments of amounts owing from DCIL on account of the interest based term loan facilities and in payment of the mark up based term finance facilities provided to DCIL.
3. That on the basis of the appropriation as stated in para 2 thereof, the account of interest based term loan facilities shall be deemed to be re-stated, resulting in an aggregate amount of Rs.717,000,000.00 (Rupees Seven Hundred Seventeen Million only) owing and payable in respect of the aforesaid facilities which shall be paid by DCIL to NDFC in the manner stated hereafter.
4. That it is further agreed between the parties that the mark up based term finance facilities (with the exception of working capital facilities which is subject mater in suit No.1430/97 and for which a separate compromise Application has been moved) shall be deemed to have been settled and finally closed for all intent and purposes.
5. That as a result of the settlement so arrived at between the parties DCIL is liable to pay to NDFC an aggregate amount of Rs.717,000,000/- as on the effective date i.e. 1.9.1997 which DCIL has agreed to pay to NDFC in the following manner.
6. That on execution of the aforesaid memorandum of understanding dated 19.12.1997 DCIL has paid to NDFC the sum of Rs. Two (2) million and the balance of Rs.715,000,000 (Rupees seven hundred fifteen million only)) payable on account of interest based term loan facilities shall, from the effective date i.e. 1.9.1997, bear interest @ 15% per annum on daily balance and on the basis of a 360 days year with quarterly rest until full payment of principal and interest is made to NDFC. The aforesaid sum of Rs.715,000,000/- shall be payable by DCIL to NDFC within 15 years from the effective date i.e. 1.9.1997 in 60 (sixty) equal quarterly installments payable on or before 1st January, 1st April, 1st July and 1st December in each calendar year together with interest accrued at the rate aforesaid upto the date of payment of each such installment as detailed in Annexure ‘C’ with the fist such installment shall be payable on or before 1.4.1998.
7. That in the event of default in payment of any installment, as agreed upon the entire principal and interest accrued thereon then remaining unpaid, shall become immediately due and payable by DCIL to NDFC without any notice. In such an event DCIL shall be liable to pay to NDFC an additional interest @ 4% per annum with semi annual rest on the entire amount of overdue principal, and interest in addition to the 15% interest per annum on daily balances, as stated in para 6 hereof.
8. That it is agreed that the following shall constitute an even of default:
i. If DCIL shall default in making any payment due to NDFC or shall be in breach of any provision of the said MOU dated 19.12.1997 or of any agreement, as modified by the said MOU, governing any interest based term loan facility or of any compromise decree of this Hon’ble Court or of any document creating or evidencing security in favour of NDFC whether alone or together with others for money owing from DCIL to NDFC.
ii. If DCIL shall suffer any petition for its winding up to be filed or any resolution for its winding up to be passed or any decree for money to be passed or any receiver or administrator or manager to be appointed in respect of the business of DCIL or any of its assets on income in or over which NDFC has a security interest.
iii. If in the opinion of NDFC any security held by it for the indebtedness of DCIL is adversely affected, whether on account of actions taken or threatened by one or more creditors against the assets of DCIL in or over which NDFC has a security interest for money owing from DCIL.
iv. If DCIL fails to fulfil any one or more of its obligations including the disposal of the various cases filed by DCIL and NDFC against each other pending in this Honourable Court in pursuance of the settlement arrived at through the aforesaid memorandum of understanding.
9. That it is clarified and fully understood by the parties that notwithstanding the execution of the aforesaid MOU, al the credit agreements and security documents executed by DCIL in favour of NDFC and personal guarantees given by the Plaintiff No.2 to 7 shall remain valid binding and enforceable. However, the terms and conditions of the credit agreements, security documents including personal guarantees shall be deemed to have been modified pursuant to the execution of the aforesaid MOU.
It is, therefore, prayed that this Honourable Court may be pleased to dispose of the above suit in terms of compromise as stated herein above with no order as to costs.
The Compromise was allowed vide order dated 18.2.98 and it will also be useful to reproduce the order as under:-
18.2.1998. Mr. Arshad Mohsin alongwith Nayyar Karim Company Secretary of the Plaintiff.
Mr. Afsar Abidi, Advocate for defendants.
The parties have jointly filed application under Order XXIII Rule 3 CPC, seeking disposal of the suit in terms of the compromise recorded therein. The application is signed by all the plaintiffs and their learned counsel. On behalf of the defendants one Talat Behzad and the learned counsel for the defendants have signed the application. The signatures are duly verified by the learned counsel who admit execution of the application by their respective clients. I have examined the terms of the compromise which appear to be lawful and within the scope of the suit with the exception that in para-7 of the application, the plaintiff have burdened with liability to pay to the defendant additional interest at the rate of 4% per annum with bi-annual rests on the entire amount of over-due principal and the interest. The last mentioned term amounts to imposition to penal interest which cannot be allowed. In the circumstances, such term is modified and it is ordered that para-7 of the application shall be incorporated in the decree as follows:-
“7. That in the event of default in payment of any installment, as agreed upon, the entire principal and interest accrued thereon then remaining unpaid, shall become immediately due and payable by DCIL to NDFC without further notice. In such an event, NDFC shall be entitled to file execution application seeking payment of the entire amount as above from the plaintiffs.”
With the above modification, the application is granted and the suit is decreed accordingly with no order as to costs.
J U D G E
Suit No.1430/97 filed by respondent NDFC was also disposed of in terms of the above compromise and consent order.
According to the above Compromise and the order dated 18.2.98, DCIL had undertaken to repay a sum of Rs.715,000,000/- together with interest at 15 per cent per annum on daily balance with quarterly rest. This amount was to be repaid within fifteen (15) years effective from 1.9.97 in sixty (60) equal quarterly instalments payable on or before 1st January, 1st April, 1st July and 1st December and first such instalment was payable on 1.4.98. According to paragraph 7 of the Compromise, on default in payment of any instalment on the part of DCIL, they would become liable for payment to NDFC of the entire principal amount and the interest accrued thereon immediately without any notice. DCIL defaulted in the payment of quarterly instalments after making payment of four (4) quarterly instalments. Thereafter DICL filed applications under Section 12(2) CPC in June 1998, whereas the respondents filed execution applications in both the aforesaid suits. Application under Section 12(2) filed in suit No.416/99 was registered as J.M.30/99, whereas such application in suit No.1430/97 was registered as J.M. 29/99. Both the aforesaid J.M. petitions and the two Misc. Applications in the two execution applications being Ex. Applications No.110/2000 and 137/2000 were disposed of by order dated 18.6.2001, whereby the learned single Judge refused to recall the order dated 18.2.98 and dismissed both the J.M. petitions No.29/99 and 30/99. Feeling aggrieved and dissatisfied with the aforesaid order, the appellants have filed the aforesaid four (4) Spl. HCAs.
We have heard the arguments of Mr. Syed Sharif-ud-Pirzada, the learned counsel for the appellants and Mr. Khalid Anwar, the learned counsel for the respondent. We have also perused the material on record, the relevant provisions of law and have gone through the case law relied upon by the learned counsel in support of their respective arguments.
It was agreed upon by the learned counsel for the parties that all the four Special High Court Appeals may be disposed of finally at the stage of Katcha Peshi, if need be after admitting them to regular hearing.
Mr. Syed Sharif-ud-din Pirzada assailed the Compromise as well as the order dated 18.2.98 allowing the said Compromise and disposing of suit No.430/96 in terms of the contents of the above Compromise on the following grounds:-
(A) That MOU was based on misrepresentation, suppression of facts, deliberate and gross miscalculation on the part of the respondents with the intention to coerce DCIL to make payments of the amounts in excess of the amounts legally due and payable and recoverable from DCIL which the respondents were prohibited by Banking Control Department’s (hereinafter referred to as BCD) circulars No.13 and 32 of State Bank of Pakistan and that the original amount of loan was blown up by respondent NDFC out of proportion by addition of interest, penal interest and mark up over mark up which was prohibited by law in the form of BCD’s circulars No.13 and 32.
B) That the aforesaid facts not only constituted commission of fraud as contemplated by Section 12(2) CPC but also amounted to jurisdictional defect inasmuch as any action in clear disregard of law cannot be said to be an action or order according to the jurisdiction vesting in the authority and would amount to unlawful order for want of jurisdiction as contemplated in Section 12(2) CPC.
C) That the said order was also defective and illegal as the learned Single Judge failed to take into consideration the provisions of Corporate and Industrial Restructuring Corporation Ordinance, 2000 (hereinafter referred to as CIRC Ordinance L of 2000 LVIII of 2000) which provided an expeditious legal remedy for recovery of outstanding loan payable to the Bank or financial institution by a non-performing asset by referring the same to State Bank of Pakistan for calculation of the actual amount due by the verification Committee.
Mr. Sharifud-din-Pirzada further submitted that MOU and the consent decree suffered from misrepresentation as narrated above and had been obtained by fraud and further that such a consent decree/ compromise could be set aside on the ground that it was obtained by fraud if the aggrieved party could establish fraud or illegality. Further argument of Mr. Sharifud-din- Pirzada was that a consent decree did not stand on a higher footing or pedestal than an ordinary decree and could be set aside or recalled if it could be proved that the same was obtained by practising fraud on the court and/ or was against any express provision of law in support of this above contention, he placed reliance on the following cases:-
1. Zafar Ahmad and 5 others versus Government of Pakistan through Secretary, Ministry of Production, Islamabad and 6 others (1994 MLD 1612);
2. Government of Sindh through the Chief Secretary and others versus Khalil Ahmed and others (1994 SCMR 782) ;
3. Union Carbide Corporation and others versus Union of India and others (1991) 4 SCC 584 ; and
He further submitted that there was no such principle that a party who was aggrieved by a consent decree having been obtained by fraud or was contrary to law was estopped from challenging the consent decree on the ground that there was no estoppel against law. In support of his above contention he placed reliance on the following cases:-
Sales and services (P) Ltd. and another versus State of
2. Pir Sabir Shah versus Shad Muhammad Khan, Member Provincial Assembly, N.W.F.P. and another (PLD 1995 SC 66);
3. Malik Asad Ali and others versus Federation of Pakistan through Secretary Law, Justice and Parliamentary Affairs Islamabad and others (PLD 1998 SC 161) ; and
4. Muhammad Ayub Khan versus The Custodian of Evacuee Property and others (PLD 1963 Karachi 551).
Another ground on which the impugned order dated 18.6.2991 was assailed was that the application under Section 12(2) CPC was vigorously contested by the parties inasmuch as counter affidavit and affidavit-in-rejoinder were filed by the aforesaid parties and in view of the controverted and disputed issues and questions of facts and law, it was incumbent upon the learned Single Judge to enter into an investigation and inquiry and the learned Single Judge in dismissing the application under Section 12(2) CPC without holding an inquiry and investigation into the disputed questions of facts and issues committed an illegality as a result of which his order has been rendered unlawful and is liable to be set aside. In support of his above contention, he placed reliance on the following cases:-
1. Ghulam Muhammad versus M. Ahmad Khan and 6 others (1993 SCMR 662) ;
2. Abdul Razzaq versus Muhammad Islam and 3 others (1999 SCMR 1714)
Mr. Khalid Anwar, the learned counsel for the respondent objected to the maintainability of the aforesaid appeals and submitted that they were hopelessly time barred but the appellants by circumvention of law proceeded to initiate the proceedings, which they were not legally entitled to initiate, with a view to obtain orders from a court of law which could provide them fresh period of limitation for filing the aforesaid appeals. Elaborating his arguments, he submitted that the order dated 18.2.1998 was passed on the Compromise, the contents of which were reduced to writing with the agreement and consent of both the contesting parties and both of them had full knowledge and awareness as to the contents thereof as well as the implication of the contents. In the circumstances, there was no occasion of the Compromise being based on misrepresentation, miscalculation and concealment/ suppression of facts or that the order dated 18.2.98 was obtained by way of fraud as a result of which the grounds of fraud and misrepresentation mentioned in Section 12(2) CPC would not be available to the appellants. He further submitted that mere mention by the aggrieved party that the compromise application contained statements and figures based on misrepresentation, concealment of facts and miscalculation was not sufficient to warrant maintainability of an application under Section 12(2) CPC on the basis of fraud and misrepresentation and it was necessary for the appellants to have mentioned in detail the particulars of the misrepresentation, concealment of facts and miscalculation of the figures. In support of his above contention, he placed reliance on the following cases:-
1. Muhammad Umar versus Muqarab Khan and another (1968 SCMR 983) ;
2. Mst Sahib Noor versus Haji Ahmad (1988 SCMR 1703) ;
3. Ghulam Muhammad versus M. Ahmad Khan and 6 others (1993 SCMR 662) ; and
4. Kunjabehari Chakrabarty versus Krishnadhone Majumdar (AIR 1940 Calcutta 489).
With regard to want/lack of jurisdiction as envisaged in Section 12(2) CPC, it was submitted by Mr. Khalid Anwar that the making of an order by a court in violation or in ignorance of any provision of law though amounted to an illegality yet such an order could not be said to be an order without jurisdiction or lacking in jurisdiction so as to bring the same within the scope of the words “ want of jurisdiction” and the same could not be challenged by an application under Section 12(2) CPC but only by means of an appeal. In support of the above, he placed reliance on the following cases:-
1. Muhammad Khan and another versus Massan and others (1999 SCMR 2464) ;
Rehamt Ali versus The Additional District Judge,
3. Mst Naseem Akhtar and 4 others versus Shalimar General Insurance Company Limited and 2 others (1994 SCMR 22) ;
4. Muhammad Usman versus Pehlwan and 4 others (2000 YLR 2324) ; and
5. Saifuddin versus Zainuddin and others (1992 MLD 631).
He further submitted that in the circumstances, the order dated 18.2.98 was required to be challenged by way of an appeal under Section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (hereinafter referred to as the Act of 1997) but the same was not pressed into action and no appeal was filed against the above order within thirty (30) days as provided in Section 21(1) of the Act of 1997 on which the order attained finality and the appellants were precluded from challenging the same by way of application under Section 12(2) CPC. In support of his above contention, he placed reliance on the case of Mst Naseem Akhtar and 4 others versus Shalimar General Insurance Company Limited and 2 others (1994 SCMR 22) (supra).
The arguments advanced by Mr. Khalid Anwar on the basis of which he had objected to the maintainability of these appeals are the same which were advanced by him while arguing the merits of the appeals. In the circumstances, it will be appropriate to proceed with the appeals on merits as the question of maintainability of the appeals being inter-linked with the objections and the grounds raised by Mr. Khalid Anwar would automatically decide the fate of the appeals with regard to their maintainability.
It is without any dispute that the courts possess inherent power to set aside
their own judgment, decree or final order which had been obtained fraudulently
by way of misrepresentation and concealment/ suppression of facts or
collusively. This sub section provides an aggrieved person with a right to file
an application for recalling or setting aside a decree, final order or judgment
which had been obtained by fraud or misrepresentation. The essential
requirement for such an application is that full particulars of the fraud and
misrepresentation must be given in the application. Fraud includes untrue
statements by one who did not believe it to be true and active concealment of
facts. It is also pertinent to note that the provisions of this section will
not be attracted when the alleged fraud or misrepresentation was not in
connection with the proceedings but prior their initiation. A party alleging
commission of fraud or misrepresentation in obtaining the decree, judgment or
final order has to state facts and circumstances which could warrant a
presumption or the possibility of commission of fraud or misrepresentation. Mr.
Sharifud-din- Pirzada has vehemently relied on the
case of Abdur Rehman Khan versus Muhammad Altaf and 3 others
(1997 CLC 1260) wherein this Court pronounced that where allegation of fraud was made during the course of judicial proceedings then it was the duty of the court to investigate and inquire into the matter to find out as to whether the impugned order or action was the result of fraud or misrepresentation and without making a detailed inquiry and investigation, the allegation of fraud ought not to have been rejected. We are in agreement with the observations made by this Court in the aforecited case. However, from a careful perusal of the aforecited case, it transpires that it had been maintained that the allegation of fraud or misrepresentation must be supported by the attending circumstances and facts of the case and a presumption relating to the possibility of commission of fraud should be forthcoming before any investigation or inquiry could be ordered and on mere allegation without there being any material to lend support or substantiate the commission of fraud or making of misrepresentation would not require commencement of any investigation or inquiry. This Court has further pronounced that there ought to be specific and definite allegation of fraud. It will also be pertinent to note that the definition of the fraud and the discussion as to what amounted to fraud in the aforecited case would make it difficult to infer that in the presence of the facts and circumstances of the case it could be held that respondent NDFC had committed fraud as the main ingredient of fraud namely, intention to deceive or to induce the person by misrepresentation to enter into a contract on a false believe would be found lacking inasmuch as the MOU did not contain any statement which was in suppression of what was true or a representation of a false fact. The action of respondent NDFC in including/adding the amount of interest/mark up in the principal amount and then charging further interest or mark up thereon was neither a misrepresentation nor a statement by way of concealment or suppression of the true state of affairs in view of the fact that the alleged illegal statements/ representations by M/s NDFC were already within the knowledge of the appellant
Amongst the various essential grounds which a party is required to establish for invoking the jurisdiction of a court under Section 12(2) CPC, one essential ground is that the details of the alleged fraud, misrepresentation or concealment should not have been within the knowledge of a party who complains of fraud, misrepresentation or concealment during the course of the proceedings. It is a well established principle of law that where the facts on the basis of which the validity of the decree, judgment or final order was questioned on the ground of fraud or misrepresentation, an application under Section 12(2) CPC on the basis of such assertion would not be sustainable if the same were within the knowledge of the aggrieved party. The appellants’ case is that respondent NDFC committed fraud, made misrepresentation and concealed facts by including/ adding the amount of accrued interest/ mark up in the principal amount for arriving at the principal amount which according to them was due and payable as per statements made by them in the MOU and also charged further mark up/ interest thereon in contradiction of the provisions of BCD's Circulars No. 13 and 32. The above facts were within the knowledge of the appellants. In the suit filed by the appellants against respondent NDFC for redemption of the properties mortgaged as security for the aforesaid loans/ advances/ finance facilities being suit No.416/98, the appellants had categorically stated in para 5(xii) that pursuant to the rescheduling agreement the defendant (respondent NDFC) had added the interest, compound interest, additional interest and undue charges in determining the principal amount due and payable and on this principal amount a huge amount by way of mark up was also included. It will be appropriate to reproduce para 5(xii) as under:-
“That the forced finance created by NDFC pursuant to Rescheduling Agreement/ Letters are on the fact of them extremely unconscionable bargins. In each of these forced loans, the interest, compound interest, additional interest, undue charges have all been converted into principal amount. On this principal amount, a huge amount by way of mark up in price has been included. It is submitted that the Agreement/ Letter is so patently unreasonable and unconscionable that on this ground alone these laons are liable to be struck down by this Hon’ble Court. The Company is not liable to make any payments under these forced loans.
Thus the mode in which respondent NDFC had determined the principal amounts as against the aforesaid various loans/ advances/ finance facilities and charge of further mark up thereon as appearing in the Compromise was already within the knowledge of the appellants and, therefore, such statements and disclosures could not be said to be fraudulent or having been made by way of misrepresentation as the appellants had the knowledge of such facts. The appellants at no stage objected to the veracity and correctness of such facts/ representations thereby implicitly accepting them to be correct. Correspondingly, the mode of calculation of the principal amount and determination thereof together with the stipulation for charging further mark up could not be said to be fraudulent or by way of concealment or suppression so as to amount to misrepresentation.
Mr. Sharifud-din-Pirzada had referred us to the case of Government of Sindh through the Chief Secretary and others versus Khalil Ahmed and others (1994 SCMR 782) in support of his contention that even a consent decree obtained on the ground of fraud could be challenged where one of the parties to the agreement was made to agree upon the terms and conditions of the contract by means of deceit. He had also referred to the cases of (i) Union Carbide Corporation and others versus Union of India and others (1991) 4 SCC 584 ; and (ii) Zafar Ahmad and 5 others versus Government of Pakistan through Secretary, Ministry of Production, Islamabad and 6 others (1994 MLD 1612). These cases have been relied upon by Mr. Sharifud-din-Pirzada on the ground that even an innocent representation which was not correct would amount to misrepresentation and further that a consent decree on the basis of an agreement suffering from fraud or misrepresentation would also be liable to be challenged and set aside. In support of his contention that a consent decree did not stand on a higher footing or pedestal then ordinary decree and was amenable to recall, setting aside or cancellation if the agreement or compromise, terms and conditions of which were based on misrepresentation concealment of facts and suffered from fraud, he placed reliance on the case of Ruby Sales and services (P) Ltd. and another versus State of Maharashtra and others (1994) 1 SCC 531. We are in respectful agreement with the pronouncement made in the aforecited cases and have no dispute with the principle that even a consent decree is liable to be recalled, set aside or cancelled if it could be proved that it was the result of fraud or misrepresentation. However, in these appeals the appellants have failed to bring on record material on the basis of which it could be presumed or inferred that MOU contained misrepresentation, suppression or concealment of facts, representations which were untrue on the basis whereof wrong figure was allegedly calculated thereby causing loss and injury to the appellants as they were made to make payments of the sums/ amounts which they were not legally obliged to pay.
Mr. Khalid Anwar vehemently contended that a party alleging fraud, misrepresentation, concealment/ suppression of facts and wrong or illegal calculation was under a boundant duty to give the necessary particulars of the facts which according to him amounted to fraud or misrepresentation. Mr. Khalid Anwar further submitted that fraud cannot be said to have been committed merely by the act of forgery or tendering a forged document in evidence by one of the parties to proceeding as it did not amount to fraud on court. In support of his above contention, he placed reliance on the cases of (i) Muhammad Umar versus Muqarab Khan and another (1968 SCMR 983) ; (ii) Central Bank of India, Ltd. versus Guardian Assurance Co., Ltd., and another (AIR 1936 PC 179) ; and (iii) A.L.N. Narayanan Chettyar and another versus Official Assignee, High Court Rangoon and another (AIR 1941 PC 93).
In all the aforecited cases, it was held that where a party levels allegation of fraud then it must specify and mention the details of the fraud and further that the same was required to be proved beyond or reasonable doubt and not on the basis of surmises, conjectures and suspicion. The facts/ representations made by M/s NDFC in the MOU were neither deceitful nor were based on misrepresentations as the appellants had been informed of such facts/ statements which were to form the basis of the Compromise prior to the making of the Compromise
The next ground urged by Mr. Sharifud-din-Pirzada was that the learned single Judge failed to proceed in accordance with law as he was under an obligation to hold an investigation and inquiry as to the commission of fraud or misrepresentation again relying on the judgment of this Court in the case of Abdur Rehman Khan versus Muhammad Altaf and 3 others (1997 CLC 1260) (supra). He further submitted that the appellants’ application under Section 12(2) CPC was challenged and controverted by means of counter affidavit by respondent NDFC and the contents of the respondent’s counter affidavit were controverted by way of affidavit in rejoinder filed by the appellants and in such circumstances it was not possible for the learned Single Judge to come to a definite and just conclusion merely on the basis of the perusal of affidavit, counter affidavit, and affidavit in rejoinder and it had become incumbent upon him to hold investigation and inquiry by framing issues and to call upon the party alleging fraud and misrepresentation to produce evidence to substantiate the same. In support of his above contention, he placed reliance on the cases of (i) Ghulam Muhammad versus M. Ahmad Khan and 6 others (1993 SCMR 662) ; and (ii) Abdul Razzaq versus Muhammad Islam and 3 others (1999 SCMR 1714.
Mr. Khalid Anwar on the other hand submitted that there was no principle or rule of law which necessarily provided framing of issues and recording of evidence in every case where allegation of fraud or misrepresentation had been alleged and wherein the warring parties had filed counter affidavit and affidavit in rejoinder and that the framing of the issues and calling upon the parties to adduce evidence for decision thereon would be dependant on the facts and circumstances of each case. In support of his above contention, he referred us to the case of Abdul Razzaq versus Muhammad Islam and 3 others (1999 SCMR 1714) which had also been relied upon by Mr. Sharifud-din-Pirzada in support of his contention that when the matter was contested before the court it was incumbent upon the court to frame issues and record evidence. Mr. Khalid Anwar had drawn our attention to page 1719 where the court observed that it was necessary for the trial court to have decided the application under Section 12(2) CPC after framing necessary issues and allowing opportunity to the parties to lead evidence in support of their respective pleadings but such framing of issues and recording of evidence for contesting the application under Section 12(2) CPC was dependant upon the facts and circumstances of each case. The above observations relied upon by Mr. Khalid Anwar clearly support his contention that it is not incumbent upon the trial court to lead evidence and provide opportunity to the parties to lead evidence and such action had to be resorted to on the basis of the facts and circumstances of each case. We are unable to agree with the contention of Mr. Sharifud-din-Pirzada that the order of learned Single Judge suffered from illegality on the ground that he had neither framed issues nor provided an opportunity to the appellants to establish their plea that the Compromise and the decree suffered from fraud and misrepresentation, which has resulted in miscarriage of justice and cause prejudiced to the appellants. The facts of the case did not warrant framing of issues and providing an opportunity to the parties to lead evidence. The authorities relied upon by Mr. Sharifud-din-Pirzada, in the circumstances and the facts of the case do not advance the case of the appellants relating to holding investigation and inquiry into the question of fraud and misrepresentation.
The consent decree dated 18.2.98 was challenged by Mr. Sharifud-din-Pirzada
on the ground of fraud, misrepresentation and being contrary to law as it was
against the categorical and specific provisions of BCD's Circulars No.13 and 32
issued by State Bank of Pakistan prohibiting addition/inclusion of the interest
accrued on the principal amount as well as prohibiting charging mark up or
interest on such accrued interest or mark up. It had been submitted that
respondent NDFC was fully aware of the contents of the aforesaid BCD's
Circulars No. 13 and 32 but still in contravention thereof, it made the
appellants to pay mark up/ interest on mark up/ interest by including the
accrued interest outstanding on the date of the Compromise in the principal
amount outstanding and then charging further mark up/ interest thereon. In this
connection, Mr. Khalid Anwar had vehemently contended that the provisions o
BCD's Circulars No.13 and 32 were not applicable to the case in hand as the
loans/ finance facilities had been granted to the appellants much earlier, i.e.
sometime in 1982 when there was no prohibition or bar from including/adding the
accrued interest in the principal and then charging interest/mark up thereon.
It was further submitted by him that the provisions of BCD's Circulars No.13
and 32 were applicable to the loans/ advances granted after
The details of the scheme are as under:-
(a) All defaulters can make a full and final settlement of their outstanding liabilities owing to a nationalised commercial bank/DFI as under:-
Period of Default
7 years and above
Principal + 5% of Principal amount.
3 years or more but less than 7 years.
Principal + 20% of Principal amount.
1 year or more but less than 3 years.
Principal + 40% of Principal amount or 75% of accrued mark up, whichever is less.
Mr. Khalid Anwar drew our attention to clause 3 of sub para (a) of paragraph 4 to substantiate his contention that accrued mark up or interest was recoverable along with the principal in cases of full and final settlement of outstanding liabilities of a debtor. He also heavily relied on BCD's Circulars No. 36 in support of his contention that respondent NDFC was legally competent to include/ add the accrued interest/ mark up on the principal amount loaned to the appellants and placed reliance on paragraphs 2(A) (i) (ii) (iii) 2(B) and ‘C’ under the heading ‘Definition of Principal’. It will also be advantageous to reproduce the aforesaid provisions BCD's Circular No.36 as under:-
DEFINITION OF PRINCIPAL
(A) Loans under Interest Based System:
The principal amount includes besides original amount of advance, any or all of the following:
(i) Subsequent enhancements therein.
(ii) Disbursement made in excess over authorised limit and
(iii) Other amounts payable by the customer including those (NOT LEGIBLE) paid by the bank, such as SBP penalty, Excise Duty, Exchange Risk Coverage Fees, debts for the use of credit cards and insurance charges etc. In case of foreign currency loans, in the absence of any exchange risk cover, the bank will apply the rate of exchange prevailing on the date of payment by the bank to the lending agency/ foreign supplier.
(B) Finance under HIB System;
Under this system the purchase/ sale price will be the amount payable/ recoverable on due dates alongwith all perforce payments and may, therefore, be treated at par with the principal.
(C) Loans/Financing under Rescheduled/ Restructured Arrangements:
In cases where rescheduling arrangements have been made, the capitalised unpaid mark up and charges, if any, shall form part of principal on the basis of rescheduling/ restructuring agreements. If, however, the unpaid mark up has been capitalised without the legal formalities/ documentation, it should not be recognised. In the cases where capitalisation has been made with the proper documentation/ arrangements sponsors/ lenders shall be free to negotiate and settle this issue amicably.
He finally contended that in view of the above provisions of BCD's Circulars
No. 19 and 36, the contention that respondent NDFC had been guilty of fraud,
misrepresentation and concealment as they illegally included the amount of
accrued mark up/ interest in the principal amount for rescheduling/
restructuring the loan and again charging mark up/ interest thereon was against
the provisions of BCD's Circulars No. 13 and 32 stood completely negated
inasmuch as BCD's Circulars No. 13 and 32 stood modified by BCD's Circulars No.
19 and 36 which had issued clarification regarding the definition of principal
amount, wherein they specifically allowed addition/ inclusion of mark up/
interest therein and charging of further mark up and interest. The contention
raised by Mr. Khalid Anwar is not without substance and merits consideration.
The grievance of the appellants throughout had been that the respondent had
suppressed and concealed the facts and has also failed to abide by the
provisions of BCD's Circulars No. 13 and 32 which according to them had the
status of law and had bound respondent NDFC to observe the same. This
contention would have held ground if it could be established that the
provisions of BCD's Circulars No. 13 and 32 were applicable with retrospective
effect, that is to say that they were applicable to the loans/ advances which
had been granted earlier than 1st July 1984. It may be pertinent to
point out that w.e.f.
The next ground on which Mr. Khalid Anwar assailed the appeals was that even if it be presumed for the sake of arguments that the contents of the Compromise, which was the basis of the consent decree were in violation of the provisions of instructions/ Circulars having the force of law, still the consent decree could not be challenged by way of an application under Section 12(2) CPC as an order in contravention of any provision of law could not be said to be an order passed for want or lack of jurisdiction. He further submitted that an application under Section 12(2) CPC could be made for recalling/ setting aside a decree, judgment or a final order if it had been obtained from a court having no jurisdiction to make the same and submitted that want of jurisdiction could not be equated either with illegal or wrongful exercise of jurisdiction by a forum having jurisdiction to decide a particular matter. According to him, the learned Single Judge was vested with jurisdiction to decide the matter and make a consent decree and if an illegality was committed by him in violating any provision of law in passing the consent order then such order could not be said to be suffering from “want of jurisdiction” as envisaged in Section 12(2) CPC. It was further submitted by him that admittedly the Banking Court while making the consent decree on the basis of the terms and conditions embodied in the Compromise had the jurisdiction to proceed with the matter and to pass a consent decree, therefore, it could not be said to be a case of usurping or exercising jurisdiction not vesting in the Banking Court. He had drawn our attention to the case of Ch. Muhammad Ismail versus Fazal Zada, Civil Judge, Lahore and 20 others PLD 1996 S.C. 246) in support of his contention that misinterpreting the provisions of law and passing of an order in contravention of the provisions by a forum having territorial and pecuniary jurisdiction to decide the matter was not the same thing as wrong exercise of jurisdiction and would not be a case of usurping jurisdiction but would be a case of wrong exercise of jurisdiction and further that wrong exercise of jurisdiction could not be equated with want of jurisdiction. Consequently, he submitted that upon the above principle, the consent decree was not the result of want of jurisdiction and the appellants could not challenge the same by way of an application under Section 12(2) CPC inasmuch amongst others, one of the grounds on which such a decree or a final order could be challenged was when the same had been made for want of jurisdiction which was not the situation in the present case. It was further submitted by Mr. Khalid Anwar that a decree or final order passed in contravention of a provision of law was liable to be challenged by way of an appeal and in support of his above contention he placed reliance on the cases of (i) Bolan Bank Limited versus Capricorn Enterprise (Pvt) Ltd.(1998 SCMR 1961); (ii) Muhammad Khan and another versus Massan and others (1999 SCMR 2464); and (iii) Rehamt Ali versus The Additional District Judge, Multan and others (1998 SCJ 761.
Mr. Sharifud-din-Pirzada in rebuttal of the arguments advanced by Mr. Khalid Anwar reiterated the arguments which were advanced by him earlier while assailing the order of the learned Single Judge, whereby he disposed of the J.Ms. Petitions and the Misc. Applications in two Execution Applications and submitted that MOU was an illegal document as it was based on misrepresentation; contained statements which were untrue; that there was concealment or suppression of facts which were within the knowledge of respondent NDFC but the appellants had no knowledge thereof, which if had been within the knowledge of the appellants, they would have never placed reliance on MOU and would not have acted upon the same; and lastly that the contents/ representations made therein for repayment of the outstanding loans/finances and for charging mark up thereon were absolutely in contravention of the documents/ instructions which had force of law and a decree based on such MOU was absolutely illegal, ultra virus and void ab initio and was liable to be challenged under Section 12(2) CPC. He vehemently relied on the case law which has already been reproduced herein above. The case law relied upon by Mr. Sharifud-din-Pirzada is to the effect that when there was a contest and the parties had filed counter affidavit and affidavit in rejoinder then the matter required framing of issues and recording of evidence for deciding the question as to whether fraud had been committed; that a consent decree was liable to be challenged by an application under Section 12(2) CPC when the same was obtained by fraud, misrepresentation or for want of jurisdiction; that the consenting party was not precluded from challenging the consent decree if it violated any of his legal rights and he would not be deemed to have relinquished the same as there was no estoppel against law; and that an order or decree in violation of law could be challenged under Section 12(2) CPC. Regarding the pronouncement that an order or decree in contravention of law could be challenged by an application under Section 12(2) CPC, it may be pointed out that the Indian Law on the issue is different from our law as in the Indian CPC an order or decree in violation of any provision of a Statute be attacked by means of an application analogous to Section 12(2) CPC. The case law relied upon by Mr. Sharifud-din-Pirzada is also of no assistance to the appellants as the question of fraud, misrepresentation and or concealment of facts could not be established on the basis of the facts and material on record which would preclude the appellants from challenging the consent decree as it was specifically asserted by Mr. Sharifud-din-Pirzada that a consent decree could only be challenged on the ground of fraud/ illegality.
It was further contended by Mr. Khalid Anwar that in rescheduling/ restructuring an outstanding loan for its repayment, provisions of BCD's Circulars were not to be made applicable and submitted that in view of the above, the contention that the provisions of BCD's Circulars No. 13 and 32 were not taken into consideration while drafting the Compromise and passing of the consent decree would not have any weight and the contention that the Compromise was a fraudulent document having been obtained by misrepresentation, suppression or concealment of facts and by statements contrary to law would not be available to the appellants. In support of his contention, he placed reliance on the case of United Bank Limited versus Messrs Central Cotton Mills Ltd. and 5 others (2001 MLD 78).
We have gone through the aforecited case which supports the contention of Mr. Khalid Anwar. However this issue/ point has already been decided earlier while dealing with the question of applicability of BCD's Circulars and holding that they would be applicable prospectively and not retrospectively.
Mr. Sharifud-din-Pirzada further contended that Circulars issued by the Banking Control Department of State Bank of Pakistan were issued in exercise of the powers conferred by Section 25 of the Banking Companies Ordinance, 1962 and that they were in the nature of the instructions and or directives to the commercial banks whether private or Government owned and they were under a boundant duty to observe the such instructions/ Circulars. We do not disagree with the contention advanced by Mr. Sharifud-din-Pirzada. The fact, however, is that as has already been observed above, the BCD's Circulars No. 13 and 32 relied by Mr. Sharifud-din-Pirzada in support of his contention to establish that the Compromise and the resultant consent decree was based on fraud, misrepresentation and violation of statutory provisions have been found by us to be not applicable to the restructuring or rescheduling of the loans/ finance facilities in question as they had been granted much earlier to the date of the two Circulars in question and the established principle that Notification or orders, instructions issued by the executive authority of the Government or a statutory body operate prospectively and not retrospectively. It was further contended by Mr. Sharifud-din-Pirzada that the aforesaid two Circulars also contained instruction/ directions prohibiting charging/ levying interest and for shifting of other modes of charging of interest as well as prohibiting the levy/ charge of mark up on interest/ mark up which would be applicable to the case of the appellants as respondent NDFC had in the Compromise demanded levy/ charge of mark up on interest/ mark up which was not permissible in view of the judgement dated 25.4.2001 in suit No.1659/99. This contention would hold good but for our observation that the provisions of BCD's Circulars No. 13 and 32 stood modified by subsequent BCD's Circulars No. 19 and 36 dated 5.6.1997 and 17.7.97 respectively which defined the principal amount to include certain charges/ amounts/ expenses including the accrued mark up/ interest.
After having considered the merits of the case, the question of maintainability of the appeals against order passed in J.Ms. No.29 and 30 will be taken up for consideration. The parties in dispute had compromised and a compromise/ consent decree was passed on the basis of the Compromise. This decree was acted upon by the appellants as they deposited four quarterly instalments in pursuance of the consent decree towards the repayment of the outstanding amount. Thereafter, default was committed as the appellants did not deposit any further instalment as envisaged by the consent decree. Mr. Khalid Anwar submitted that the appellants could have challenged the consent decree by means of an appeal under Order 43 Rule 1(m) CPC read with Section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, if they felt aggrieved but the said procedure not having been followed, after expiry of the period of limitation provided in the aforesaid two provisions of law the consent decree attained finality and could not be challenged by the extra ordinary remedy provided by Section 12(2) CPC in the absence of proof that the same was obtained by fraud or misrepresentation or the court making such decree had assumed jurisdiction which did not vest in it. While considering the merits of the appeal, we had come to the conclusion that neither the Compromise nor the consent decree was based on fraud, misrepresentation and or concealment of facts nor it was a case of want of jurisdiction as envisaged in Section 12(2) CPC. In the circumstances, recourse to Section 12(2) CPC was not permissible. In support of the above proposition, reliance is placed on the cases of :-
1. Mushtaq Ahmed and others versus Government of Pakistan etc. (PLJ 1998 SC 866) ;
Muhammad Ismail versus Fazal Dada, Civil Judge,
3. Municipal Committee versus Shaikh Aziz Illahi (PLD 1970 SC 506) ; and
In the first case, the Supreme Court refused to entertain a Constitutional Petition on the ground that the aggrieved party had not availed of the remedy of appeal available to him for challenging the impugned order. The contention of the aggrieved party that the remedy by way of appeal had become time barred was not found to be a ground for allowing the aggrieved party to invoke the Constitutional jurisdiction of the Lahore High Court and it was pronounced that he should have gone ahead with challenging the impugned order in appeal with application seeking condonation of delay on available grounds. In the second case, the aggrieved party had filed a Constitutional Petition in the Lahore High Court to challenged the order of rejection of plaint for non-payment of requisite court fee. The Supreme Court observed that the order could have been assailed by means of an appeal but the aggrieved party rushed to the High Court with Constitutional Petition which course was held to be improper and interference was declined. In the third case, a revision application filed without exhausting the remedy of second appeal was held to be incompetent. In the last case, invocation of writ jurisdiction by an aggrieved party for challenging an order which could have been assailed by a revision under Section 435 Cr.P.C. was held to be improper. In the case in hand, the consent decree could have been challenged under Order 43 Rule 1 clause (m) CPC as well as under Section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 as the consent decree would be covered by the word “decree” used in Section 21(1) of the Act of 1997. However, the appellants did not challenge the consent decree. In view of the aforesaid provisions of law and on the basis of the principle laid down by the Supreme Court in the aforecited four (4) cases, they could not have validly invoke the jurisdiction of the Banking Judge of this Court under Section 12(20 CPC especially when they have failed to establish that the Compromise and the consequential decree based thereon was the result of fraud, misrepresentation and/or want of jurisdiction.
Mr. Khalid Anwar further submitted that the appellants were stopped from challenging the consent decree as by not filing an appeal there against and agreeing to act thereupon they had waived whatever right they had to challenge the same. Mr. Sharifud-din-Pirzada vehemently controverted the arguments advanced by Mr. Khalid Anwar and submitted that the question of estoppel or waiver did not arise as there could be no estoppel against law and in support of his above contention he placed reliance on the cases of Pir Sabir Shah versus Shad Muhammad Khan, Member Provincial Assembly, N.W.F.P. and another (PLD 1995 SC 66); and Malik Asad Ali and others versus Federation of Pakistan through Secretary Law, Justice and Parliamentary Affairs Islamabad and others (PLD 1998 SC 161.
Article 114 of the Qanun-e-Shahadat Order deals with waiver or acquiescence and describes it as intentional relinquishment of a known right or such conduct as would warrant an inference of relinquishment of such right; implying consent to dispense with or forgo something to which a person is entitled ; an agreement to release or not to assert a right ; to constitute waiver there must be some conscious giving up of a right and a person cannot be held bound unless he is aware of what exactly he was waiving and what right he was giving up with knowledge of all the facts. It has been observed that where a person inspite of having full knowledge of violation of any of his rights of personal nature remained silent and did not take any measure for safeguarding it then he would be deemed to have impliedly waived it. In the present case, in view of our observation that the consent decree was not based on fraud or misrepresentation nor was obtained in violation of any provisions of law, the right that was given up by the appellants was their personal right of challenging the consent decree as the appellants had not only remained quiet but also committed positive acts by depositing four (4) quarterly instalments towards repayment of the loan which was due and payable by them. However, a distinction has to be made of waiver of rights created by law. The principle is that a person has a right to waive the benefit of a law or rule made solely for the benefit and protection of individuals in their private capacity provided that such waiver does not result in any infringement of any public right or public policy. In the case of Mrs Zehra Begum Messrs Pakistan Burmah-shell ltd. PLD 1984 SC 38), agreement by a landlord to let out the premises for a fixed period was held to debar him from seeking his ejectment on the ground of personal bona fide use and occupation before the expiry of such fixed period. In the cited case the landlord by agreeing not to eject the tenant before the expiry of the fixed period had contracted against the provisions of the Sindh Rented Premises Ordinance according to which he had the right to seek ejectment of tenant on the ground of his personal use but the Supreme Court repelled the objection raised on behalf of the landlord that placing limitation on restriction for ejectment of the tenant for a particular period amounted to violation of a law and the landlord could not waive such right and it will be appropriate to reproduce the relevant passage from the judgement as under:-
“In the second place, even if there was such a right available under the law (for arguments sake but not as a fact) it stood waived because it is not a part of public policy, but of a personal privilege which the landlord could forego for a valuable consideration.”
In the case of Yaqoob Ali versus Ismail 1987 CLC 526), a learned Single Judge of this Court held that where landlord had accepted rent fully knowing that default had been committed but kept quiet for unreasonable period of time then he would be deemed to have waived default. In the present case while entering into the compromise, respondent NDFC had written off a sum about Rs.20 crores out of the principal amount due and payable in respect of the outstanding loans/ advances. The learned Single Judge who accepted the compromise and passed a decree thereon had applied his mind in decreeing the suit on the basis of compromise and had disallowed a penal interest of 4% which was agreed upon between the parties but only allowed the mark up as agreed in the Compromise.
Mr. Sharifud-din-Pirzada in rebuttal of the contention of waiver of right had placed reliance on the cases of Pir Sabir Shah versus Shad Muhamad, Malik Asad Ali & others versus Federation of Pakistan and Union Carbide Corporation and others versus Union of India and others (Supra). He had laid great emphasis on the case of Union Carbide in support of his contention that an individual could not be made to surrender/ relinquish a right conferred on him by a Statute even by an order of the court or by being a party to a consent order, whereby he had waived or surrendered any of his rights. Mr. Sharifud-din- Pirzada had also placed great emphasis on the pronouncements made by the Indian Supreme Court in the above case of Union Carbide in support of his contention that a right given by law to an individual for invoking the jurisdiction of a court of law for redress of any wrong done to him or for enforcement of any of his legal rights could not be taken away even by an order of the court made with the consent of an individual. He also drew our attention to the observations of the Indian Supreme Court that there could be no estoppel of a provision of law relating to public policy or public good and relying on the above cited case further submitted that where there was no estoppel there could be no waiver. However, the observations made in the cited case cannot be made applicable to the facts and circumstances of the present case as in the cited case relinquishment or waiver by individuals to forego their right to pursue criminal prosecution was opposed to the provisions of the Indian Contract Act, which provides that a person cannot enter into a contract, the terms of which are opposed to a law or a public policy. The appellants had neither relinquished or surrendered any of their rights relating to invocation of jurisdiction of any court for redress of any grievance as per orders of the court nor the right claimed by the respondents to have been waived by the appellants was contrary to the provisions of any law or was opposed to the public policy.
Mr. Sharifud-din-Pirzada vehemently criticised the impugned orders on the ground that the learned Single Judge did not take into consideration the provisions of the Corporate and Industrial Restructuring Ordinance, 2000 and Non-Performing Assets and Rehabilitation of Industrial Undertaking (Legal Proceedings) Ordinance. The provisions of CIRC Ordinance L of 2000 could not be pressed into by the appellants on the ground that the matter had been settled between the parties on 18.2.98 when the aforesaid Ordinances were not in the field. It was a past and closed transaction and the aforesaid two Ordinances did not provide any benefit to the outstanding loans/ advances/ finance facilities which had been disposed of by a competent court of law prior to coming into force of the said Ordinances.
With regard to the contention that an application jointly under the provisions of the Non-Performing Assets and Rehabilitation of Industrial Undertaking (Legal Proceedings) Ordinance and CIRC Ordinance of 2000 was filed but was not properly considered and decided, it is to be observed that the pendency of the application under Section 12(2) CPC could not bring the case of the appellants within the purview o Section 10 above as the application under Section 12(2) CPC was not a valid and proper application in view of our observations herein above that no case for resorting to Section 12(2) CPC was made out. In this view of the matter, the appellants would not be able to take the benefit of the above two Ordinances. Even otherwise, the two appeals against the order on the applications under Section 12(2) CPC not being found maintainable, the propriety of the order could not be examined.
For the foregoing reasons and discussion, we have come to the conclusion that the appeals filed against the order dismissing the application under Section 12(2) CPC were without any substance as neither the Compromise nor the consent decree was based on fraud and/or misrepresentation nor in making the consent orders/ decrees the learned Single Judge of this Court acting as Banking Court assumed or usurped jurisdiction to make it a case of “want of jurisdiction”. Consequently the consent orders/ decrees did not warrant to be assailed under Section 12(2) CPC as the essential requirements necessary to invoke the jurisdiction of a court under Section 12(2) CPC were missing. Similarly, the two appeals against the order passed on CMA No.319 in Execution Application No.110/2000 and CMA No.231/2001 in Execution Application No.137/2000 are without any substance and do not merit consideration. The appellants had filed applications under Section 151 CPC in both the execution applications for staying the proceedings and also obtaining orders that the proceedings therein were illegal as notice required by Order 21 Rule 22(1)(a) was not served on the appellants and the requirement being mandatory, violation thereof rendered the proceedings illegal and liable to be set aside/ recalled. It is to be observed that both the suits between the parties were disposed of by a consent order and the decree was acted upon by the appellants by making payment of four quarterly instalments. Execution Application was filed within one year of the default. Even otherwise, in view of Rule 22(2) of Order 21 the Court could issue a process in execution of a decree without issuing notice for reasons to be recorded.
We are also satisfied that both these appeals are not maintainable as the appellants had circumvented the law by moving applications under Section 12(2) CPC which were not legally maintainable for challenging the consent decrees in view of the facts and circumstances of the case, i.e. failure of the appellants to establish that the consent decree was obtained by fraud or misrepresentation or that the same suffered for want of jurisdiction with a view to provide them an opportunity to file the above High Court Appeals after obtaining orders on such applications which appeals otherwise had become barred by time.
Accordingly, all the four appeals stand dismissed in limine.
Dated: 19-09-2001. JUDGE