2017 PLP 174 (CLCN)

ZAFARULLAH KHAN KHAKWANI, J.

This civil revision is directed against the judgments and decrees dated 4.5.2007 and 10.3.2008 passed by learned civil Judge, Haroonabad and learned Additional District Judge, Haroonabad respectively whereby suit for rendition of accounts filed by the petitioner/plaintiff was concurrently dismissed.

2. The petitioner/plaintiff filed Suit for Rendition of Accounts before the learned Civil Judge, Haroonabad against the respondents/ defendants with the assertion that the petitioner had business dealings of sale/purchase of cotton with respondents Nos. 1 and 2 since 1985. However, from the year 1998 onward he started business with Malik Sarfraz and Co. The petitioner asserted that after closure of business with defendants Nos. 1 and 2 the matter of accounts was settled between the parties but later on respondents Nos. 1 and 2 entered bogus entries of transactions of money in the name of the petitioner whereas nothing of said respondents was due towards him; that the defendants were many times asked to settle the accounts with the plaintiff and pay the remaining amounts to him but they flatly refused to do so. Hence the suit.

3. In response to the notice issued by learned trial Court defendants Nos. 1 to 3 appeared and defended the suit by filing their written statements whereas defendant No. 4 was proceeded against ex parte. The record depicts that during pendency of the suit learned counsel for both the parties made statements before the learned trial Court for appointment of Referee and the learned trial Court with their concurrence appointed one Akhtar Hussain Chaudhry, President Anjuman-e-Artiyan, Grain Market, Haroonabad as Referee to verify the dispute of accounts between the parties. The Referee submitted his report which was placed on record by the learned trial Court vide Mark-C and relying on the said report learned trial Court vide judgment and decree dated 4.5.2007 dismissed the suit filed by the petitioner/plaintiff.

4. Feeling aggrieved of the said judgment and decree the petitioner approached the learned lower appellate Court by way of appeal but the same was dismissed by the learned Additional Distt. Judge, Haroonabad vide judgment and decree dated 10.3.2008. Hence this revision petition.

5. Learned counsel for the petitioner submits that under the law only the parties were competent to make request for appointment of Referee and in that eventuality statement of information of the Referee was to be accepted by the learned trial Court but in the present case appointment was made on the statement of their counsel which cannot be stricto sensu called a valid appointment and as such any statement of information or submission of report was not a statement of information within the meanings of Article 33 of the Qanun-e-Shahadat Order, 1984. Further submits that the Referee so appointed by learned trial Court inspected record of the respondents in absence of the petitioner and did not join him and that the report made by the Referee would show that the same was a decision after thorough inquiry which exercise was beyond the scope of Referee; that he assumed role of an Arbitrator while preparing his report but the learned trial Court did not consider this legal aspect of the matter and that the learned lower appellate Court did not exercise his judicious mind and relied only on the report of the Referee which was alien to law and as such the impugned judgments and decrees of both the learned Courts below are liable to be set aside.

6. Conversely, learned counsel appearing for respondents Nos. 1 to 3 submits that the learned trial Court appointed the Referee on the statement made by learned counsel for the parties; that the petitioner never disowned the statement made by his counsel; that the petitioner was summoned by the Referee more than once but he did not choose to join the proceedings and appeared only once and then again absented. Learned counsel submits that the Referee submitted only his report of information and did not give his decision and the learned Courts below gave their verdict according to law and as such the impugned judgments and decrees do not suffer from any illegality.

7. Learned counsel for the parties have been heard and record appended with this petition perused with their assistance.

8. During the pendency of suit for rendition of accounts, learned counsel for both the parties agreed to the appointment of a Referee. With concurrence of learned counsel for the parties the learned trial Court appointed Mr. Akhtar Hussain Chaudhry, President Anjuman-e-Artiyan, Grain Market, Haroonabacl as Referee. Statements of learned counsel for the parties and the order of the Court may be of some relevance for decision of this petition, as such the same are reproduced hereunder: The above referred order clearly indicates that the trial Court passed the order for rendition of account which is outside the domain of Article 33 of the Qanun-e-Shahadat Order 1984 and the Referee is not competent to conduct rendition of account. Anyway, consequent to the said order, the Referee afforded hearing to the Secretary Anjuman-Arthian and other persons, thrashed out all the record and after conducting rendition of account submitted his report which was placed on record by learned trial Courl as Mark-C. A perusal of said report would reveal that the Referee inspected documents relating to accounts etc. maintained by the respondents and came to the conclusion that the petitioner had conducted business with the respondents but thereafter he left his business relations with the respondents and got him attached with some other persons and that according to the respondents' accounts record certain amount was outstanding towards the petitioner. As per report the Referee sent notices to the petitioner but he did not join the proceedings except for once when he made promise to produce his witnesses but thereafter never turned up. The Referee opined that the petitioner owed some amount to the respondents and he filed the suit only to usurp the said money. The learned trial Court treating the said report as admission by the petitioner within the nreanings of Article 33 of the Qanun-e-Shahadat, 1984 dismissed the suit. At this juncture three questions arise in one's mind. First, whether appointment of Referee made on the statements of the counsel and not that of the parties themselves fulfils the requirement of law and would be sufficient for admission of the statement of such person on behalf of a party within the meaning of Article 33 of the Qanun-e-Shahadat? Second, whether report submitted by a Referee tantamount to his statement of information as required by Article 33 ibid or a decision/"faisla"? and, Third, whether such statement or report (if question No.2 above is answered in positive) must be purely based on personal knowledge of the Referee or it can be made after conducting some inquiry etc.?

9. In order to resolve the above said queries, Article 33 of Qanun-e-Shahadat may be of much help. The said provision of law runs as under: "Admission by person expressly referred to by party to suit: Statements made by person to whom a party to the suit has expressly referred for information in reference to matter in dispute are admissions." If one minutely examines this provision of law, it would reveal that the words "party to the suit has expressly referred" are of much significance. Since statement of information made by a Referee would become an admission on behalf of the party which may not suit to the party, as such the legislature in its wisdom added the word "expressly" to make it imperative for the party to himself make reference to any person to make statement of information on his behalf. In this way, while examining whether statement made by a counsel on behalf of a party is sufficient to infer that such statement was expressly made by the party himself, one has to take extra ordinary care because once a statement by a Referee is made it becomes an admission on behalf of said pafty. In the present case none of the parlies had made any such express request statement to refer the matter to any person. There is nothing on record to show that the petitioner/parties had given instructions to his/their counsels for making statement for appointment of Referee. I have minutely gone through the power of attorney given by the parties to their learned counsel. It has not been mentioned anywhere that the petitioner had also empowered his counsel to make any such statement before the Court for appointment of Referee. The above provision of law reveals that if a party to the suit has himself expressly made statement for appointment of a Referee then the statement made by the Referee would be considered as admission by the party appointing Referee and not otherwise. So in my view, the counsel of the petitioner and the respondents were not competent to make statements in absence of any such specific instruction.

10. Although learned counsel for the parties appearing before learned trial Court had made statements for appointment of Referee but the Referee assumed the powers of an Arbitrator. Needless to mention here that role of a Referee is only to make statement of information based on his personal knowledge and such a statement of a Referee amounts to admission by a party. Secondly, the Referee so appointed did not make any statement of information. Rather he made inquiry by inspecting record of accounts and joining other witnesses and thus the report submitted by him was not based on his personal knowledge. A similar matter came up before the Hon'ble Supreme Court of Pakistan in the case of Nazir Ahmad and others v. Muhammad Qasim and others (2004 SCMR 1292) and while interpreting Arlicle 33 supra it was held as under: Article 33 in unombiguous words goes to lay down that the reliance by the party in a litigation is made on the statement of a third party. The law provides that if the matter is left to the statement of the third party, such statement is to be considered as admission by the party. The illustrations below Article 33 further elaborate the matter that when the question is, whether a horse sold by A to B is sound, the statement of C regarding the condition of horse would amount to an admission provided A made an offer to B to "Go and ask C. C knows all about it". There are four ingredients of Article 33 aforesaid; First, that some party must have referred the matter to a third person. Second, that the reference must be for information and third, that the referee must make a statement qua such information and lastly that such statement shall be deemed to be an admission by the party who expressly referred to such third person for information. Here the status of such third person is more of a witness than of either an arbitrator or a local commission. Whatever is stated by the third party is nothing but an information. Whenever a case is agreed upon to be decided on the statement of a referee, the matter might fall under Article 33 of Qanun-e-Shahadat but a reference to a third person to decide a matter in dispute is a reference to arbitration." In the present case the parties never agreed that the Referee should make his own opinion so at the most the role of the Referee was to make a statement simpliciter furnishing but he formed his own opinion and expressed his view after making ex-parte inquiry which in my humble view is not the command of law and thus he has exceeded his role and the report submitted by him is not mere a statement of information but a decision/faisla after rendition of account. In somewhat a similar case while discussing the role of a Referee in the light of Article 33 of the Qanun-e-Shahadat Order, 1984 the Hon'ble Supreme Court in the case titled Ghulam Farid Khan v. Muhammad Hanif Khan and others (1990 SCMR 763) observed as under: "It will be noticed that this Article relates to statements furnishing information and not to decisions involving judicial determinations of disputes or controversies. It hardly need be added that furnishing of information and pronouncing faisla between contesting parties are two entirely different matters. In this context, reference may be made to the observations of the Judicial Committee of the Privy Council in Chhabba Lal v. Kallu Lal AIR 1946 PC

72. In this case, there was dispute between the parties with regard to the partition of the joint family property. The dispute was taken to Court; while the proceedings were pending, the parties appointed their Guru as a referee for the decision of all the facts and also for the decision in respect of the costs of the suit. The question for consideration before the Judicial Committee was whether the decision given by the Guru was covered by the provision of Section 20, Evidence Act which, as already mentioned, corresponds to Article 33, Qanun-e-Shahadat. The Judicial Committee answered the question in the negative and observed:- "It is obvious that a reference to an outside party to decide matters in dispute in a suit and the question of costs is not a reference to that party for information in reference to matter in dispute, and if the reference is to be regarded as made only under section 20, it was a bad reference." It is, therefore, dfficult to accept the contention of the appellant that the 'decision' presented by Hafiz Nasrullah Khan before Court was a statement within the meaning of Article 33." The record does not depict that the Referee ever made any statement of information rather he submitted his report based on the inquiry conducted by him which is not the requirement of law and thus there is no statement of information by the Referee.

11. To sum up the discussion in the light of above observations, suffice it to say that the impugned judgments and decrees are not sustainable in the eye of law firstly on the ground that appointment of referee was not valid because he was not expressly appointed by the parties and their counsel were not having any sort of instructions for appointment of referee. Secondly, the order dated 14.12.2006 passed by learned trial courl was not a lawful order and was outside the purview of Article 33 of Qanun-e-Shahadat vide which he directed the referee for rendition of account and thirdly, the referee was to make statement simpliciter furnishing information but he stretched his powers and made inquiry by inspecting the record and also by affording opportunity of hearing to other persons which exercise was not within his domain and as such the report made by the referee cannot be equated with mere statement of information rather the same was a decision/faisla.

12. In this view of the matter, this petition is accepted, the impugned judgments and decrees passed by both the Courts below are set aside and the case is remanded to the learned trial Court where suit filed by the petitioner shall be deemed to be pending and shall be decided afresh in accordance with law. ZC/M-12/L Revision allowed.