2003 PLP 1331 (CLD)

The plaintiff filed counter-affidavit to the said application and categorically stated that the plaintiff has not received any intimation that the defendant No.6 has resigned from the directorship of defendant No.

1. It is stated that the defendant No.6 executed letter of guarantee on 3-2-1987 and the defendant No.6 remained director of the defendant No. 1 Company from 1984 to 1989. It is stated that being the director of defendant No. 1, defendant No.6 had knowledge about the finance used and utilized by the defendant No. 1 and the execution of all the documents including letter of guarantee executed by him. It is stated in the counter-affidavit that the signatures of the defendants Nos.2 to 8 including defendant No.6 were verified by the bank officers at the relevant time. The defendant No.6 filed rejoinder affidavit and stated that he had strained relations with the other defendants and had no knowledge of the suit filed against him. On the basis of these averments, the defendant No.6 prayed to set aside the decree passed by the Court. Under section 12(2), C.P.C. a person can challenge the validity of judgment, decree or order on the plea of fraud, misrepresentation or want of jurisdiction by filing application to Court which passed final judgment; decree or order. In order to attract section 12(2), C.P.C. heavy burden lies upon the applicant to establish from his own affidavit that the judgment, decree or order has been obtained by fraud or misrepresentation. Fraud has been defined under section 17 of the Contract Act, which reads as under:-- "17. `Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to include him to enter into the contract-- (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intent of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent." Section 12(2), C.P.C. introduces new remedy to challenge the judgment, decree and order on the plea of fraud, misrepresentation or want of jurisdiction by filing application to Court, which has passed the judgment, decree or order instead of filing separate suit. The party alleging fraud, misrepresentation has to give full particulars of the fraud and misrepresentation and not on the basis of mere surmises, conjectures and suspicion. My view finds support from the case of Dadabhoy Cement Industries v. N.D.F.C., reported in 2002 CLC

166. The order was authored by the Honourable Chief Justice Mr. Justice Saiyed Saeed Ashhad and has been approved by the Honourable Supreme Court, which is reported in 2002 SCMR 1761. The defendant No.6 denied his signature on letter of guarantee executed on 3-2-1987, on which date admittedly he was one of the directors and all directors of defendant No. 1 have admitted their signatures on similar letter of guarantee executed on said date, and are members of same family. Be that as it may, even if anyone of director of defendant No.1 has forged the signature of defendant No.6 on letter of guarantee, fraud has not been practised in the proceedings of suit for obtaining judgment/ decree. In the case of Begum Anwari Khanum Shaikh v. Messrs Passcon (Pvt.) Ltd. 1993 MLD 1557, M. Abdul Rehman Kazi, J. (as he then was, held that provision of section 12(2), C.P.C. apply where a fraud is played or mis representation is made during proceedings of the suit in the Court and not anything done outside the Court. In the case of Rehmatullah v. Ali Muhammad 1983 SCMR 1064, the Honourable Supreme Court, while dealing question of bar of filing suit under section 12, C.P.C., held that a suit is not barred as fraud and misrepresentation alleged from the appellant's side in that case is alleged to have been committed by the respondent, not in connections with the proceedings, but much before its initiation and that it is not connected with the proceedings in any manner whatsoever. As regards service of summons, the defendant No.6 has not stated that at any time after he shifted from Karachi to Rawalpindi he informed plaintiff about change of his address. Summons were issued by all three modes, viz. through bailiff, registered post and publication of notice in newspapers. Service through publication is as good as personal service except in exceptional cases where party can establish that in spite of publication of notice in the newspapers service cannot be held good against him as for example on the date when notices were published in newspaper, party was not residing in Pakistan. In the case of Pakistan Insurance Corporation v. Grindlays Bank Ltd. reported in 1987 CLC 2164, his Lordship Ajmal Mian, J. (as he then was), held service through publication in daily Urdu Newspaper Hurriyat as good service upon party although bailiff report was not available on record nor the undelivered covers. In the case of Ahmed Autos v. Allied Bank of Pakistan Ltd. reported in PLD 1990 SC 497, the Honourable Supreme Court held that "underline object of rule 8 is to avoid the delay in the service of the summons". The defendant No.6 has not stated that the plaintiff has deliberately made misstatement by showing wrong address of defendant No.6 and as such misrepresented in Court to obtain judgment/decree. The Financial Institutions (Recovery of Finances) Ordinance, 2001, provides specific remedy to get decree set aside if he satisfies the Court that he was prevented by sufficient cause from making application under section 10 or that summons was not duly served. Such application has to be filed within thirty days from the date of knowledge. Admittedly defendant No.6 got information about the decree on 2-12-2001, whereas application under section 12(2), C.P.C. has been filed on 9-1-2002, i.e. much after expiry of thirty days from the date of knowledge. In view of above application under section 12(2), C.P.C. (C.M.A. No.275 of 2002) is dismissed. Consequently, application under Order XXXIX, Rules 1 and 2, C.P.C. (C.M.A. No.277 of 2002) is also dismissed. S.A.K./U-29/K Application dismissed.