2017 PLP 225 (CLC)

GHULAM MUSTAFA MUGHAL, C.J.

The captioned appeal has been filed against the judgment and order passed by the learned District Judge, Mirpur on 11.01.2016, whereby application for cancellation of ex-parte decree has been rejected. Precise facts forming the background of the captioned appeal are that M/S Bukhari Travels, plaintiff/respondent, herein, filed a suit against Askari Bank Limited for recovery of 26,620/- British Pounds along with markup. Defendant was proceeded ex-parte. After recording ex parte evidence, the learned District Judge vide judgment and decree dated 31.08.2013 awarded ex-parte decree for recovery of 26620 British Pounds along-with markup. The plaintiff moved an application for cancellation of the ex-parte decree on 21.02.2014 wherein, it was claimed that two suits titled Askari Bank v. M/s Bukhari Travels were filed by the defendant against the Bank and both were returned by the Court under Order VII, Rule 10 of the Code of Civil Procedure. It was stated that on 19.02.2014 bank received a notice from High Court, whereupon, it transpired that defendant on being returned has filed suit before High Court. The petitioner/ Bank applied for copies of the orders of the Court then it was told by the Clerk that ex-parte decree has been passed against the Bank on 31.03.2013 in the instant suit. It was further stated that actually there were three suits pending against the Bank and the petitioners were under the bona-fide impression that all of them have been returned by the Court, hence, nobody appeared on behalf of the Bank. Fact of the matter was that one suit remained pending with District Judge in which petitioner/appellant herein, was proceeded ex-parte and ultimately ex-parte judgment was passed on 31.03.2013. It was further claimed that absence was neither intentional nor deliberate rather it was under a genuine mistake. It was contended that as the valuable rights of the plaintiff are involved, therefore, ex-parte decree may be set aside. It was further stated that application is within limitation from the date of knowledge. Defendant contested the application by filing objections, wherein, it was stated that application is not maintainable under law and is also time barred. It was stated that no sufficient cause has been shown in the application. It was stated that Branch Manager cannot file the application for cancellation of the judgment and decree. As the Bank is banking company and under law after resolution of the Board of Directors as is visualized in Memorandum of Association application for setting aside the ex parte decree can be filed. It was stated that bank was proceeded ex parte on 20.05.2013 and the presence of the Bank Manager is marked in the interim orders recorded in the original file, hence, the facts stated in the application has no substance. The learned District Judge framed issues in light of the pleadings of the parties and treated issues Nos.2, 3 and 8 as preliminary issues and heard the parties. However, it was observed that these issues cannot be resolved without recording evidence. Parties were directed to lead evidence pro and contra. At the conclusion of the proceedings, the learned District Judge Mirpur vide judgment and order dated 11.01.2016 rejected the application on account of limitation. Kh. Ansar Ahmed, the learned Advocate appearing for the appellant vehemently argued that appellant filed three suits against Bank before the District Judge Mirpur and the same were withdrawn for filing the same at proper forum i.e. before the High Court. He submitted that actually two suits were filed against the bank and the bank was not aware of filing of the 3rd suit and was under the impression that the suits against him have been withdrawn. The learned Advocate argued that the suit against the Bank was filed in violation of Order XXIX of the Code of Civil Procedure, therefore, ex-parte proceedings, ex parte decree and rejection of the application were erroneous, perverse and illegal. The learned Advocate contended that the date on which ex parte proceedings were ordered against the bank was not a date of hearing, therefore, all the subsequent proceedings including passing the ex parte decree were nullity in the eye of law and the application was liable to be granted as the same was filed within 3 years. The learned Advocate contended that even otherwise this Court has revisionary jurisdiction and when it is proved from the record that ex parte decree has been passed in violation of mandatory provisions of law and without due service, it can be recalled in exercise of revisional jurisdiction of this Court. The learned Advocate in support of his submissions, placed reliance on following case law:-

1. Tahir Mehmood v. Abdul Salam and 6 others, [2015 YLR. 1768];

2. Muzaffar Ali and others v. Dr. Zaffar Ullah Malik, [2015 YLR 1332], 3, State Life Insurance Corporation of Pakistan v. Nasim-e-Sahar through legal heirs, [1992 CLC 563]. In Tahir Mehmood's case, referred to and relied upon by the learned Advocate for the appellant, my learned brother Mr. Justice Azhar Saleem Babar, Judge after considering the relevant law and in the circumstances of the case before him pleased to observe that the date fixed for filing written statement is not a date of hearing. In Muzaffar Ali's case, it was observed that the date fixed for filing the written statement was not a date of hearing. The reliance was placed on cases reported as PLD 1991 SC 1104 and PLD 1987 SC

22. In Para 13 of the report, it was observed as under:- "It is a settled principle of law that no period of limitation is prescribed for setting aside ex parte order and the residuary Article 181 of the Limitation Act, 1908 provides a limitation of three years. The learned trial Court erred in law while declaring the application of the petitioners/defendants for setting aside ex parte proceedings as barred by time. No doubt there is a period of limitation has been prescribed for setting aside ex parte decree under Order IX, Rule 13, C.P.C. but as the defendant was proceeded against ex parte on 12.12.1989, which was not a date fixed for hearing, and application was filed for setting aside of said order on 23.07.1990, the learned trial Court was not justified while treating the same as beyond limitation. No doubt the ex parte judgment and decree dated 28.02.1990 has been passed on merit after discussing the ex parte evidence adduced by the plaintiff/ respondent but as observed supra since the above referred ex parte proceedings were of no legal effect therefore, no limitation would run against above referred order, which even could be set aside even under section 151, C.P.C. are taken into cognizance, then residuary Article 181 of Limitation Act, 1908 will govern the issue, which provides three years limitation period." In State Life Insurance Corporation of Pakistan's case, it was observed that service of process in suit against corporation has got to be effected on Secretary or Director or other Principal Officer of the corporation. It was further observed that service on corporation would not be valid when summonses were not presented i.e. to Secretary or to Director on Principal Officer of such corporation. It was opined that service of summons effected on a clerk of corporation was violative of the provisions contained in Order XXIX, Rule 2 of the C.P.C. Mr. Masood A. Sheikh, the learned Advocate appearing for the other side, contended that respondent was duly served in this case and he remained present before the Court. However, due to absence the Bank was proceeded ex parte. He submitted that application has been filed after a period of 172 days whereas law requires for filing the same within 90 days. As the application was hopelessly time barred, therefore, findings of learned District Judge Mirpur on the question of limitation were unexceptional and hardly require any interference. The learned Advocate argued that for setting aside ex-parte decree the defendant has to show that his non-appearance on the relevant date was beyond his control and there is sufficient cause for setting aside the ex parte decree, otherwise, he is not entitled to ask for setting aside the ex-parte decree passed against him. The learned Advocate further argued that this application has been filed without lawful authority by an unauthorized person. In support of his submissions, the learned Advocate placed reliance on following case law:-

1. Syed Nisar Hussain Shah v. Sahibzada Abdul Rashid and 2 others [2014 MLD 86];

2. Muhammad Tariq and others v. Abdul Razzaq [2015 CLC 52];

3. Secretary Education Department Govt. of N.W.F.P Peshawar and others. v. Asfandiar Khan, [2008 SCMR 287]; I have heard the learned Advocates for the parties and gone through the record of the case. The contention of the learned Advocate for the appellant that no ex-parte proceedings could have been ordered against the appellant on 20.05.2013 because the said date was not a date of hearing of the case, hence, the order of ex parte proceedings which have been culminated into ex-parte decree was a nullity in the eye of law and the same was liable to be recalled has a substance. However, for determination of question regarding the date of hearing in particular case one has to refer the previous orders recorded by the Court. For coming to a just conclusion, it is necessary to reproduce the interim orders dated 11.04.2013, 15.04.2013, 29.04.2013 and '20.05.2013, which are as under: A perusal of the above reproduced interim orders would show that on 11.04.2013 neither plaintiff was present nor any authorized person on behalf of Bank was present, however, Raja Khalid Mehmood, Advocate undertook to produce the power of attorney on the next date of hearing and the Court adjourned the case for producing power of attorney/written statement on 15.04.2013. On 15.04.2013, the position remained the same and an opportunity was granted for filing written statement on 29.04.2013. On 29.04.2013, Raja Khalid Mehmood, Advocate who undertook to produce power of attorney was not appeared however, presence of the Manager of the Bank recorded along with a request for an adjournment for filing written statement which was accordingly granted and the next date of hearing was fixed as 20.05.2013. On this date the plaintiff's counsel was not appeared rather Mr. Farooq Akber Kiani, Advocate was appeared on his behalf but nobody appeared on behalf of the defendant, hence, he was proceeded ex parte. After going through the record of the case as well as judgment and order passed by the learned District Judge, I am of the view that the application for setting aside the ex parte decree was liable to be accepted in the circumstances of the present case. A perusal of the file of the trial Court reveals that summons have been received by a clerk who was not authorized to receive the same under Order XXIX, Rule 2 of the C.P.C. For appreciation of the matter, Order XXIX, Rule 2 is reproduced as under:-- "

2. Service On Corporation.

Subject to any statutory provision regulating service of process, where the suit is against a corporation, the summons may be served

(a) on the secretary, or on any director, or other principal officer of the corporation, or (b) by leaving it or sending it by post addressed to the corporation at the registered office, or if there is no registered office then at the place where the corporation carries on business". Under the above provision of law a service on the corporation could only be affected on the Secretary or on any Director, or other Principal Officer of the corporation, or by leaving it or sending it by post addressed to the corporation at the registered office, if there is no registered office then at the place where the corporation carries on business. In the present case unfortunately original suit was filed against the Askari Bank Plot No.629-B Jabeer Tower Bank Squire Nangi Mirpur Azad Kashmir through its branch Manager. The Askari Bank Ltd. had its head Office at AWT Plaza Rawalpindi, was not impleaded as party in the original suit filed by M/s Bukhari Travels. A perusal of file of the trial Court reveals that service has been effected on a clerk of the local branch, therefore, the process was not duly served in accordance with the mandatory provisions of Order XXIX, Rule 2, C.P.C. It was a sufficient cause for setting aside the ex-parte decree within the ambit of Order IX, Rule 13 of the C.P.C. which reads as under:- "Setting aside decree ex-parte against defendant.

(1) In any case in which a decree is passed ex-parte against a defendant, he may apply to the Court by which the decree was passed for an order to set it aside; and if he satisfies the Court that the summons was not duly served, or that he was prevented by any sufficient cause from appearing when the suit was called on for hearing, the Court shall make on order setting aside the decree as against him upon such terms as to costs, payment into Court or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit .. .. .. In this case, as noted above the plaint was not properly instituted. The name of Bank Manager was not mentioned. The question that Manager who appeared before the Court was an authorized agent or not, record is silent. The decree in such a case remained un-executable, hence, the learned District Judge failed to consider this aspect of the matter because ex parte decree has been granted in absence of necessary parties (Muhammad Ashraf and 8 others v. Azad Govt. and others, PLD 1985 AJK 102). Such an ex parte decree should have been set aside under the inherent jurisdiction and limitation for the purpose of setting aside the decree i.e. 90 days as is enforced in Azad Jammu and Kashmir was not attracted at all. It may also be stated that Askari Bank Ltd. is a banking company which is being run by the Board of Directors. The powers of Board of Directors have been enumerated in Article 126 of the Memorandum of Association of Askari Bank. Under Article 127, the Board of Directors are entitled to institute conduct, defend, compound, abandon any legal proceeding by or against the company or its officer. Under Article 128 the Directors may from time to time by powers of attorney under seal appoint any company, firm or person, or any fluctuating body persons whether nominated directly or indirectly by the Directors to be attorney or attorneys of the company for such purpose and with such powers, authorities and discretions. While exercising these powers through a resolution dated June 21, 2013 the Board of Directors has delegated the powers to the President and Chief Executive of the Askari Bank Ltd. Para 16 of resolution empowers the President to prosecute or oppose all actions, suits and other legal proceedings and demands relating to any matter in which the bank is or may hereafter be interested or concerned. Through the same resolution, para 24 further empowers the President to delegate the powers that have been given or that may henceforth be given to him by the Board of Directors in respect of various matters. As stated above that Askari Bank Ltd. has its registered office at AWT Plaza Rawalpindi was not impleaded in line of the defendants and the service was also not effected in view of the provisions contained in Order XXIX, Rule 2 of C.P.C., therefore, presence of Manager who was not duly authorized cannot be considered as appearance in accordance with law. It is also noticed that Raja Khalid Mehmood one of the Advocates from Mirpur appeared before the Court to produce power of attorney/written statement but subsequently he did not appear. It was enjoined upon the Court to issue fresh process, therefore, without effecting the due service on the Bank ex parte proceedings and decree was a nullity in the eye of law. In the present case, the service has been effected on some clerk who was not authorized to receive the summons on behalf of the Bank in view of Order XXIX, Rule 2 of C.P.C. In case titled State Life Insurance Corporation of Pakistan v. Naseem-e-Sehar through legal heirs, [1992 CLC 563]; in an identical circumstances it was observed as under:- "learned counsel for the respondents relying on the second proviso to Rule 13(1) of Order IX, C.P.C. has contended that any irregularity in the service of the summons is inconsequential as the Insurance Company in view of the publication of the proclamation in the newspaper had knowledge of the date of hearing and sufficient time to appear on that date and answer the claim. This contention has no force as there is no evidence on record to show that the proclamation ever came to the knowledge of the secretary or any director or any other principal officer of the Insurance Company." Even otherwise, this Court is vested with the revisional jurisdiction and order which on the face of it, is illegal, perverse or nullity in the eye of law that can be recalled in exercise of revisional jurisdiction notwithstanding the competency of appeal or suit or application. Once this Court is seized with the record of the case and noticed some illegalities or irregularities to have been committed by the subordinate Courts, cannot shut its eyes and such like violation can be corrected while exercising revisional/supervisory jurisdiction as has been held in case titled Azad Kashmir Logging and Saw Mill Corporation Ltd. v. Messrs Muhammad Farid Khan and Company Brothers, Contractors AKLASC, [PLD 1986 AJK 228] In para 15 of the report it was observed as under:- "On coming to the conclusion that the ex parte decree was in contravention to law, it is to be determined as to whether such a decree can be set aside in exercise of revisional powers of the High Court or not. My answer to the question is yes, High Court in exercise of its revisional jurisdiction conferred under section 115 of the Civil Procedure Code coupled with section 39 of the Courts and laws code, is competent to set aside such a decree. The revisional power of the High Court, ordinarily can be invoked when it appears that the subordinate Court seized jurisdiction not vested in it or failed to exercise jurisdiction vested in it or acted illegally or with material irregularity. In presence of any of these conditions, High Court is conferred power to revise such an order of the subordinate Court. In Azad Jammu and Kashmir, clause (d) is added to section 115 of the Civil Procedure Code which further empowers the High Court to revise an order of a subordinate Court to meet the ends of justice. Thus the scope of revisional powers conferred on Azad Jammu and Kashmir High Court is more vast. In addition to that, section 39 of the Courts and laws Code Act further empowers the High Court to rectify any error, illegality, irregularity or mistake of a subordinate Court to meet the ends of justice. It is already noticed that the ex-parte decree passed by the subordinate Court is patently illegal as it is in clear contravention to provisions of Order XX, rule 4, sub-rule (2), Civil Procedure Code. The decree in the present shape is not at all helpful to satisfy the claim of the plaintiff as the real claim is yet to be determined. The decree being a nullity is open to intervention." The upshot of the above discussion is that appeal/ revision is accepted, resultantly, the original application for setting aside the ex-parte decree is accepted. The learned trial Court is directed to restore the suit by impleading Askari Bank Ltd. through its head office at AWT Plaza Rawalpindi and proceed further in the matter in accordance with law. KMZ/27/HC(AJ&K) Appeal allowed.