1997 PLP 1342 (CLC)

‑‑‑‑ Consent of parties would not confer jurisdiction where it did not in law exist. Z.U. Ahmed and Khursheed A. Hashmi for Appellants Anwar Muhammad for Respondents. A suit for recovery was instituted by the respondent‑bank against the appellants before Banking Tribunal No.II at Karachi and such came to be decreed by consent, according to the appellants, before the first date of hearing for which summons were issued. Subsequently, during the course of execution proceedings, the appellants‑defendants applied for recall of the decree under section 12(2), C.P.C. The grounds in support of the allegations of fraud, misrepresentation and want of jurisdiction appear to have been set out in paragraphs 4 to 7 in the supporting affidavit of the application which, in extenso, are as under:‑‑ "

4. Inasmuch as plaintiffs, decree‑holders were conscious of the infirmities and lacunas of their case, on one hand and irksome and dilatory process of litigation on the other hand as such they were naturally perturbed about its success strictly on merits at an early date. They, therefore, resorted to the lowly gimmick, and hurled inter alia, insolvency proceedings and blackmailing threats, to get the splash news published in leading daily newspapers of the city in ‑particular and of country in general, regarding the stringent financial position, isolvency and filing of the recovery cases etc., against defendants/judgment debtors. Since, defendants, judgment‑debtors are quoted on the stock exchange, they therefore, shuddered and dreaded the idea of their good name and goodwill being undermined, creditworthiness and reputation ruined by such a insidious and devastating publication. In the circumstances, therefore, they willy or nilly were constrained to give in to plaintiffs, decree‑holders fraudulent pressure, intimidation and blackmailing leading to compromise, eventually resulting into consent judgment and decree. 5 That the defendants, judgment‑debtors for the fear of ignominy, owing to the reasons enumerated hereinabove, on their own received/accepted service from the office of Banking Tribunal‑II on 13th September, 1994, whereas, according to summons they were supposed to appear in the Tribunal on 13th October, 1994. It is submitted that the perusal of record would reveal that plaintiffs, decree‑holders did not even provide an opportunity to the defendants, judgment‑debtors to seek an independent legal advice in the matter, as the compromise application was drafted, signed and filed in the Banking Tribunal‑II, at Karachi, on 29th September, 1994 and that same day judgment and decree was passed. This scenario, in the circumstances of the case, to a reasonable person will certainly smell fishy. 6 That it is abundantly clear that plaintiffs, decree‑holders exercised undue influence, intimidation and hurled threats of blackmailing with a sole view to obtain a material advantage by unfair and wrongful means to the extent of involving their moral obliquity, all this as such tentamounts to fraud. And the defendants, judgment‑debtors acting under‑the fraudulent misrepresentation signed the compromise leading to judgment and decree in question. Since, fraud vitiates everything, "Fraus omina vitiat" the judgment and decree in question, so obtained, is therefore, liable to be set aside. 7 That inasmuch as, in the circumstances of the case, transaction involved tantamounts to interest basis, as such beyond the jurisdiction of this Hon'ble Court. It is submitted that a judgment and decree obtained from a Court which has no jurisdiction in the matter before it is void ab initio and of no legal effect and as such there is no legal impediment in setting aside the same." The learned Chairman of the Banking Tribunal heard the application under section 12(2), C.P.C. and per order dated 9‑6‑1996 dismissed the same. However, as regards charge of future mark‑up in the consent decree the learned Chairman expressed his preservation in these words:‑‑ "Perhaps it may not be out of way to mention here that I have personal reservation with regard to payment of the mark‑up which, I am of the opinion, is in the nature of future mark‑up and hence can be dubbed as interest. But I cannot sit in judgment over the order of my learned predecessor and disallow the payment of future mark‑up. Such order can be passed by the appellate Court if the said Court endorsed my above views. The application for correction of the decree is accordingly disposed in above terms." Now, as to the maintainability of this appeal, section 9 of the Banking Tribunals Ordinance, 1984, does not seem to confer a right of appeal except against specified orders, decrees or sentences. The present appeal, therefore, may not be covered by the provision. However, it is axiomatic that fraud vitiates the most solemn of proceedings and an order passed without jurisdiction is a nullity. Prior to the A insertion of section 12(2) in the Code of Civil Procedure, in cases where fraud or lack of jurisdiction was claimed to vitiate the relevant proceedings and a decree was consequently sought to be avoided, an aggrieved person could resort to a suit for obtaining redress. With the advent of section 12(2), C.P.C., in matters where a judgment, decree or order is assailed on the grounds of misrepresentation, fraud or lack of jurisdiction, an independent suit stands barred and the aggrieved person can only resort to an application under section 12(2), C.P.C. for securing such relief as be capable of being administered. Question, therefore, arises whether in similar matters falling within the purview of the Banking Tribunals Ordinance, an independent suit would lie or an application under section 12(2), C.P.C. can be preferred or the special law leaves the aggrieved person with no redress whatsoever. Relevantly, section 10 of the Banking Tribunals Ordinance, 1984, envisages finality of orders in these terms:‑‑ "

10. Finality of orders.‑‑Subject to the provisions of appeal under section 9, no Court or other authority shall call, or permit to be called, in question any proceeding, order, judgment or decree of a Banking Tribunal or the legality or propriety of anything done or intended to be done by the Banking Tribunal under this Ordinance. " From a perusal of section 10 aforesaid, it clearly emerges that no Court or other authority is to permit to be called in question any proceeding, order, judgment or decree of a Banking Tribunal or the legality or propriety of anything done or intended to be done by the Banking Tribunal under. such Ordinance. An independent suit, therefore, would be barred. Even so, section 3 of the Ordinance postulates that the provisions of the Ordinance shall be in addition to and, save as otherwise provided in the Ordinance itself, not in derogation of and law for the time being in force. Correspondingly, under section 5 of the Ordinance, a Banking Tribunal shall, in the exercise of its jurisdiction, have in respect of a claim filed by a banking company against a customer in respect of or arising out of finance provided by it, all the power vested in the Civil Court under the Code of Civil Procedure, 1908. Likewise, E under the same section, a Banking Tribunal shall, in all matters with respect to which procedure has not been provided for in the Ordinance, follow, inter alia, the procedure laid down in the Code of Civil Procedure. It would thus seem that the power of recall of an order, judgment or decree tainted with fraud and misrepresentation or suffering from want of jurisdiction would be implicit within the power of the Banking Tribunal where due cause for such exercise arises. This is all the more so because the general but fundamental principles of law, invalidating the proceedings or the outcome thereof in a judicial forum, cannot be assumed to be missing for the purposes of the proceedings before the Tribunal. Questions touching the elements of justice, equity and good conscious, where permissible, would be some such questions. Inherent powers of a Civil Court cannot also be denied to a Banking Tribunal, invested as it is with "all the powers" of a Civil Court. The unescapable conclusion, therefore, is that the principle in section 12(2), C.P.C. applies as much to the Tribunal constituted under the Ordinance of 1984 as to any other civil forum. Such being the extent of the Tribunal's powers, the next question is whether against an order passed by the Tribunal in terms of section 12(2), C.P.C., an appeal would lie and, if so, where. As seen, inter alia, specified appeals alone are contemplated by section 9 of the Ordinance and an order under section 12(2) or even under section 151, C.P.C. is not a specified order. In point of fact, even the Code of Civil Procedure does not confer a right of appeal against such orders. However, when a decree is varied either under section 12(2) or section 151, C.P.C., that itself carries decretal elements and would be appealable both under the Code and the Ordinance. In the instant case, as things stand, the decree has been maintained and, therefore, no appeal can conceivably arise. It would, however, remain a moot question whether in such matters a Constitutional petition may lie. All said and done, it must be found that no appeal lies against the impugned order. On merits as well the appellants do not seem to have any case. The facts reproduced above neither constitute misrepresentation nor fraud. Mere psychological pressure, even if conceded, does not qualify as misrepresentation or fraud. Even otherwise, the appellants seem to have entered into a compromise with open eyes and duly subscribed to the relevant application which resulted in the decree. The learned Chairman, therefore, seems to have acted in accordance with law when he refused the application under section 12(2), C.P.C. Here another objection of the learned counsel for the appellants may also be disposed of. It has been maintained that while the consent decree was for a lower amount execution has been preferred for a larger amount viz, that claim in the suit. The learned counsel for the appellants are not only right when they say that only the consent decree upon default could be enforced, but their point of view also seems to have found favour with the Tribunal in whose order some passing remarks to that effect manifestly occur. We have, therefore, no doubt that only the consent decree and the amount mentioned therein would call for execution and nothing more. Lastly, we would like to take note of the above‑quoted passage from the impugned order where the learned Chairman has expressed his reservations about grant of future mark‑up. We do not feel called upon to decide whether the opinion of the learned Chairman is right or wrong, but would only take note of the opinion itself. In line with such opinion, the learned Chairman views the grant of future mark‑up through the consent decree as impermissible under the Ordinance. If that be so, and only if there be so, grant of such mark‑up should have been beyond the jurisdiction of the Tribunal, whether it be actually so or otherwise being another matter. To that extent, therefore, the decree seems to have come to be considered on the score of jurisdiction as well. Upon the principle of section 12(2), C.P.C., the Tribunal should have been within its powers to consider and determine such aspect. It did not do so because the order was that of the learned Chairman's predecessor. Such aspect, in our view, makes no difference. If an order was without jurisdiction, it remained without jurisdiction by whomsoever it was passed. In such context, even the consent of the parties did not matter because no amount of consent could have conferred jurisdiction where it did not in law exist. It does not seem that this precise question of jurisdiction was raised at the instance of the appellants. If so, the appellants would be free to expressly raise it in due course of law. It would then be for the Tribunal to examine and adjudicate upon the same. Even then, the non‑controversial part of the decree would simultaneously be given effect to while the parties. If occasion arose, were heard as to the question of future mark‑up. For the aforesaid reasons, through a short order, we had dismissed this appeal, the reasons having been recorded now. A.A./T‑14/K Appeal dismissed.