1999CLC331 (PLP)

In Brig. (Retd.) Muhammad Aslant Khan v. The Azad Government of the State of Jammu and Kashmir, through the Secretary Forest Department Muzaffarabad and another 1983 CLC 1204 it is observed that:‑‑ "Decree is nullity when passed by Court having no jurisdiction or a decree against dead person. (underline is mine). In Messrs Haji Ahmad & Company v. Muhammad Siddique and others PLD 1965 (W.P.) Karachi 293 a learned Single Judge quoted the judgment of Supreme Court of India in the case of Heera Lal Patni v. Siri Kali Nath AIR 1962 SC India 199 holding that the validity of a decree can be challenged in executing proceedings if it is against a dead person or some such other ground taking effect of rendering the Court entirely lacking in jurisdiction in respect of subject‑matter of the suit or over the parties to it. The observation of the learned Judge in the Supreme Court of India is as under:‑‑

"The validity of a decree can be challenged in execution proceedings only on the ground that the Court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seizen of the case because the subject‑matter was wholly foreign to its jurisdiction of that the defendant was dead at the time of the suit had been instituted or decree passed or some such other ground which would have the effect of rendering the Court entirely lacking in jurisdiction in respect of the subject‑matter of the suit over the parties to it." Reliance is also placed upon Ainuddin Bepari and others v. Banessa Bibi and another PLD 1969 Dacca 658, Islamic Republic of Pakistan v. Muhammad Saeed PLD 1961 SC 192, Abdul Malek Miah v. Moslemuddin (Mokleshuddin) Sheikh PLD 1970 Dacca 743, Saifee Development Corporation Ltd. Karachi v. M.A. Karim PLD 1974 Kar. 426, Messrs Capital Farm Islamabad v. National Development Finance Corporation PLD 1996 Lah. 99, Muhammad Aslam Siddiqui v. Mst. Haseena Begum 1986 MLD

735. The present case is of its own kind and no direct precedent has been produced by the either party so as to attract this phenomenal and extraordinary change taken place during the pendency of the suit before the learned trial Judge at Sindh High Court, Karachi. Keeping in view the nature of this case, this Court has to go behind the decree so as to determine its executability. The perusal of record demonstrates that Suit No.61 of 1990 was filed by Messrs Bari Sons (Pakistan) Limited on 15‑1‑1990 against Vneshnee Conomisheskoje Objedinenije Technopromexport Moscow and 2 others. The present appellant/objector, namely, All Union Export ‑ Import Association Technopromexport was not a party as it came into being after its registration on 27‑7‑1992 under Russian Civil Procedure Code read with section

51. Messrs Bari Sons (Pakistan) Limited the respondent was appointed as an agent by V.O. Technopromexport of USSR origin and letter of intent was issued by the said company for the grant of commission for promoting its interest in the installation of Guddu Thermal Power Station No.3. In this regard certain arguments were entered into between these two in the year 1978. Para. 2 of the plaint of Suit No.61 of 1990 filed at Karachi by respondent would also be relevant which is as under:‑‑

"That the said defendants Nos.2 and 3 at all material times were and are accordingly responsible for the promotion, existence, floating, running and controlling of the business affairs/projects and commercial interests of defendant No. l in Pakistan being owners of all their assets and properties. The said defendant No. l have been accordingly acting under the full direction and control of defendant No.2 who are their owners/principles and further the assets, properties, funds, business, commercial interests/transactions projects of defendant No. l belong to and are owned and run under the control of defendant No.2. Defendant No.3 represents defendant No.2 and has its place of business/work at Karachi. " This shows that it was respondent's own case that V.O. Technopromexport of USSR origin as well as Union of Soviet Socialist Republic both were responsible for the payment of commission as the former was completely working in collaboration and under the control of the latter. As already stated Messrs Muslim Shamim and Munir A. Malik, Advocates filed their power of attorney only for V.O. Technopromexport defendant No.l in the suit. A phenomenal change took place on the world map as Union of Soviet Socialist Republic was disintegrated on 12‑12‑1991 and 15 independent States instead came into being. Subsequent to the disintegration the case proceeded before the learned trial Judge at High Court Karachi without any noticeable progress. It is pertinent to mention over here that the learned trial Judge of Sindh High Court on the refusal from Soviet side to accept summons directed the Attorney‑General of Pakistan through order, dated 28‑3‑1993 to appear in the case and argue if a statement can be filed and maintained against defendant USSR or its successor. However, from the record it is not reflected whether the Attorney‑General of Pakistan or his nominee ever appeared at any stage to clarify these points. Again through order, dated 2‑5‑1995 learned trial Judge directed the plaintiff/respondent Bari Sons (Pakistan) Limited to implead successor of USSR. The interim order, dated 2‑5‑1995 was to the following effect:‑‑ "According to this letter, defendant No.2 has refused service of the summons on the ground that it enjoys the sovereign immunity and this Court has no jurisdiction against it. Defendant No.2 is Union of Soviet Socialist Republic and defendant No.3 is Consulate‑General of Union of Soviet Socialist Republic. Since the Union of Soviet Socialist Republic does not exist any longer, it would be necessary to amend the plaint by impleading successor to it. Mr. Munshi states that he will make necessary application in that regard. The question of service of summons upon the successor will be considered after they are impleaded as party. The letter stands disposed of." The case was accordingly adjourned to 22‑5‑1995. Again on the adjourned date i.e. 22‑5‑1995 while rejecting the plea of reference to arbitrator on an application filed by the defendants in the suit under section 34 of the Arbitration Act, the learned Judge approved the argument of Mr. Aziz A. Munshi that all the defendants in the suit were accepting the liability of payment of commission to the plaintiff/respondents, as such, question of reference to Arbitration would not arise particularly in view of the recent development taken place since the institution of the suit as it was not certain whether the body to which the dispute was to be referred was in existence because USSR has now ceased to exist. However, in spite of existence of the aforesaid situation the learned Judge after dismissing the application for reference to the Arbitration directed the defendants to file written statement within four weeks for final disposal. The Suit again was taken up by the learned trial Judge on 3‑9‑1995 in the absence of the defendants or their counsel and the learned Judge debarred them from filing written statement as the direction earlier given on 22‑5‑1995 mentioned above were not complied with. The case was accordingly adjourned to 12‑9‑1995 by way of ex parte proof on the part of plaintiff/respondent. The case was taken up on 12‑9‑1995 on which date respondent Bari Sons (Pakistan) Limited moved an application under Order 1, Rule 10 read with section 151, C.P.C. for the deletion of defendants Nos.2 and 3 in the suit i.e. USSR and Consulate‑General of USSR. The learned trial judge of Sindh High Court without giving any notice of the said application deleted them and decreed the suit on the same day. It is worth mentioning over here that in the application under Order 1, Rule 10 no reason was advanced by the plaintiff/respondent for the deletion of said defendants and the suit was decreed. Furthermore, this application from the respondent's side for deletion of defendants in the suit was given by Messrs Bari Sons (Pakistan) Limited after the receipt of application by Mr. Muslim Shamim, Advocate on 24‑8‑1995 wherein he has prayed that to clear the clouds, a notice to the foreign office be given as he had got no instructions after disintegration of USSR. It is pertinent to mention over here that an application, dated 18‑5‑1995 was given by the learned counsel Mr. Muslim Shamim that with disintegration of USSR all the defendants in the suit ceased to exist. A prayer was made by him that a notice be issued to the foreign office so that the successor State may be able to defend the suit.. A copy of this application was received by the plaintiff/respondent on 24‑81995 but no further steps were taken towards the resolution of this controversy. The learned Executing Court as reflected from the impugned order rejected the objection of the appellant and held it liable holding that the appellant succeeded to the liabilities of V.O. Technopromexport of USSR origin. It not only used its letter heads, LOGO office premises, telephone etc. but also retained some of its employees. A reference in the impugned order has also been made that two senior Advocates were appearing in the case from the side of defendants in the suit. The learned Executing Court in order to' reach at a decision decided to entertain and look into all the certified copies of the record/documents produced by either of the Parties. Objection raised about the admissibility of those documents were, therefore, overruled by him (underline is mine). Since the learned Executing Court decided to take into consideration all the certified copies/documents produced by the parties, as such, I have also followed that course of action. I am sorry to hold that the learned Executing Court did not take into consideration the documents produced by the parties in its proper perspective. The present appellant in spite of its incorporation on 22‑7‑1993 was never impleaded in the suit. It must be stated over here that on the eve of disintegration the only pending matter between USSR and Pakistan was Multan Thermal Project at Muzaffargarh, the contract of which was earlier taken by V.O. Technopromexport of USSR origin. It is wrong to say that the liability of the Multan Project was taken over by the appellant. Its liability as the documents demonstrates did not devolve upon the appellant automatically. Explicit steps were taken by both Pakistan and Russia through exchange of protocol agreement to upkeep the commissioning of the project. In this regard reference to understanding through letter, dated 2‑11‑1993 both by the Russian and Government of Pakistan would be relevant. The understanding reached at between the two countries as reflected from the same was only regarding the earlier agreement entered into between Union of Soviet Socialist Republic and Government of Pakistan on 16‑12‑1983 on economical and technical cooperation. The understanding reached between the two countries is as under:‑‑

"(1) The Government of the Russian Federation assumes rights and obligations of the Soviet side on the agreement between the Government of Union of the Soviet Socialist Republic and the Government of the Islamic Republic of Pakistan, dated December 16, 1983 on economical and technical cool ration. (2) All references in the above agreement to the Union of the Soviet Socialist Republic the Soviet Union of USSR Soviet Organizations and Soviet Specialist have to be interpreted as relating to the Russian Federation, Russian Organization and Russian Specialisis. (3) All other terms and conditions of the above agreement stand valid and will be implemented by both Russian and Pakistani sides." It must be pointed out here that credit agreement, dated 16‑12‑1983 worth U.S. 277 million dollars was signed between Government of Pakistan and the then Government of Union of Soviet Socialist Republic qua the construction of Thermal Power Station with a capacity of 63' M. W./3 Power Units of 210 at Multan by V.O. Technopromexport of USSR origin. Had the appellant/objector being the same party as judgment‑debtor i.e. V.O. Technopromexport of USSR origin then the necessity of exchange of agreement of understanding between Islamic Republic of Pakistan and Russian Federation per protocol agreement, dated 2‑11‑1993 was not necessary. In the presence of aforesaid understanding how it can be stated that the liability qua the commissioning of Multan Thermal Power Station at Muzaffargarh automatically devolved upon the appellant. The amount attacked by the learned Executing Court pertains to Multan Thermal Project at Muzaffargarh which as stated has been kept alive by virtue of agreement of understanding, dated 2‑11‑1993. This amount has got no nexus whatsoever with the Guddu Thermal Project completed in the year 1980 by V.O. Technopromexport of USSR origin. The commission claimed by respondent Bari Sons (Pakistan) Limited was respecting contract qua the installation of Guddu Thermal Project entered into between WAPDA and V.O. Technopromexport of USSR origin in the year 1978. The plaintiff/respondent also entered into contract with V.O. Technopromexport of USSR origin in the year 1978 for rendering help for installation of the project for which the latter undertook to pay commission. The appellant was not at all in existence at that time. As already stated it came into being on 27‑7‑1993 after its incorporation under Russian Law. The argument that the appellant used for a considerable time the letter heads, LOGO, Office telephone, cars, and premises would not make it liable when the witnesses have stated that the letter heads were used under mistake. The situation was so much fluid after disintegration of USSR that it took some time to settle it down. The appearance of the learned counsel after disintegration of USSR was not such a factum which could have placed all the inabilities of V.C. Technopromexport of USSR origin upon the appellant particularly so when after disintegration of USSR the counsel's power of attorney comes to an end. Reliance in this respect is placed upon Mst. Iffat Masood and 2 others v. Rehmat Ali PLD 1990 Lah. 359 where it was held that with the death of the client, the power of attorney comes to an end. As reflected from the above resume even the Lawyers gave an application which was received by the respondent/decree holder when they had stated that they had no further instructions after the disintegration. In this extraordinary situation the argument of the learned counsel for the respondent that the discharge should have been obtained by the learned counsel under Rule 50 of Sindh Chief Court Rules, Chapter IV for his release would not be attributed. Rule 50 of Sindh Chief Court Rules is as under:‑‑ "

50. An Advocate on record in a suit or matter desiring to obtain an order for his discharge, shall first give notice of his intended application for discharge to his client and the fact of such notice having been served shall be stated in the affidavit in support of such application." Here in this case due to the disintegration of USSR on 12‑12‑1991 learned counsel Mr. Muslim Shamim could not have given notice to his client i.e. V.O. Technopromexport of USSR origin. In these circumstances I am of the view that provisions of Rule 50 (ibid) would not be attracted to the facts of the present case. Reliance is placed upon Barkat Rai and others v. Mst: Ghulam Fatima AIR 1921 Lah. 219 where it was held that:‑‑

"Death of judgment‑debtor during appeal‑‑‑Legal representatives not brought on record‑‑‑Admission of appeal is nullity against them. Where during the pendency of an appeal by a decree‑holder one of the judgment‑debtors dies and his legal representatives were not brought on the record. Held, that an order accepting the appeal is, so far as that judgment debtor's legal representatives are concerned, a nullity." Reference be also made to Chilya Corrugated Board Mills Ltd. v. M. Ismail and another 1992 CLC 2524 where a learned Single Judge observed as under:‑‑

"There is no denying of the legal proposition that in order to succeed a claimant before a Court of law has to independently establish his rights and cannot succeed in obtaining a decree solely on the basis of the weakness, lacunas or even total absence in or of the defence. " Even if the argument of the learned counsel for the respondent is accepted that it was mere a change of prefix as the word Technopromexport remained common in both the companies and this change of prefix was due to the fact that after disintegration of USSR on 12‑12‑1991 the words "all Unions, have to be dropped. The new company was not all impleaded after its incorporation under Russian Law on 27‑7‑1992. The ex parte decree is against USSR Company and only at the time of execution of the word "Soviet" was deleted and the appellant brought in the suit remained unrepresented. Resultantly for what has been stated above the appeals are accepted with no order as to costs. In order to secure the interest of the parties it is directed that the attached amount shall not be released within one month of this judgment so as to enable the parties to avail the remedy provided under the law. H.B.T./V‑2/L Appeals accepted.