1989 PLP 2117 (CLC)

Dates of hearing: 4th, 26th October and 10th November, 1988. This is an application under Section 12(2) of the Code of Civil Procedure.

2. The applicants (herein referred to as insurers) maintain that according to M/s. Imam & Imam Ltd., the respondents in this case Mizrab Cinema , Liaquatabad, Karachi, for which a Fire Insurance Policy (effective 31‑12‑82 to 31 12‑83) was taken from the applicants in the sum of Rs.650,000, was damaged on 19‑3‑1983, due to sectarian strife. The applicants insurers say that a claim for loss amounting to Rs.987,380 was lodged with them on 26‑4‑83, but was rejected on the short ground that the risk was not covered within the said Policy. It is further alleged that the property was under‑insured, its real value, according to Imam & Imam themselves, being 17,00,

000. It is recalled that in Suit No.222/84, filed in this Court for recovery of Rs.6,01,925, the respondents, on written statement of applicants having been submitted, riled an application under Order 12 Rule 6, .P.C. for grant of decree, on admission but such application was controverted through a counter‑affidavit of the insurers/applicants. It is maintained that the then Martial Law Administrator, Zone C and Governor of Sind, on 6‑4‑1985, granted an amount of Rs.3,00,000 to Imam & Imam, which was lat‑.r paid to them and such statement was made in Para 9 of the counter‑affidavit, referred to above. It is stated that a Contract of Insurance is a Contract of Indemnity and the maximum amount the respondents could get was Rs.4,08,353, out of which the insurers paid Rs.1,25,000 whereas a further sum of Rs.3,00,000 was paid by the Government of Sind, making a total of Rs.4,25,

000. As such, it is urged that the respondents were not entitled to move under Order 12 Rule 6, C.P.C. for a decree on admission. Even otherwise, it is urged, the applicants, at best, would be entitled to prorata compensation, if any, on the insured amount and no more. It is maintained that this Court had no jurisdiction to pass a decree on admission as there was no unqualified admission of liability in the written statement. It is denied that the risk was covered or loss was suffered and, besides, effect of receipt of compensation from the Government still remained to be considered. Decree from this Court is said to have been obtained on the basis of misrepresentation and fraud.

3. In these circumstances, it is prayed that the order of my learned brother, Tanzil‑ur‑Rehman, J., decreeing the suit on 4‑9‑1986, be recalled.

4. Respondents, Imam & Imam have submitted objections to the said application on 5‑10‑1987. It is contended that all the questions raised in the application a/s 12(2), C.P.C., have already been considered by the Court, at the time of grant of decree on admission and that nothing has been shown to establish allegations of misrepresentation, fraud or want of jurisdiction. It is pointed out that an appeal was taken against such decree but that the same did not meet any success, which entire circumstance, having been suppressed by the applicants, disentitles them to the relief, if any.

5. I have heard the learned Counsel besides examining the record pertaining to Suit No.222/84. Parties have not examined any oral evidence and, as such, pursuant to order dated 4‑10‑1988, the case, by consent, has been heard on existing record. There can be no cavil with the adoption of such procedure by the parties, as the provision in S.12(2) C.P.C. is calculated to provide all the procedural facilities of a suit yet, with a view to expeditious disposal, is not shackled by any of the dispensable technicalities involved in a suit. Any procedure which satisfies the requirements of the case and which is not otherwise prohibited may, therefore, be taken recourse to in such proceedings but in so doing no one should be exposed to any unwarranted prejudice.

6. The application under Order 12 Rule 6 C.P.C., was moved in Suit No.222/84, on 6‑11‑1985 and in support of that application it was averred that, through their letter dated 15‑8‑1983, the insurers had, even prior to the suit, agreed to pay a sum of Rs.4,08,353, an instalment of Rs.1,25,000, out of which, was paid after its institution. Paragraph 14 of the written statement in Suit No.222/84 in such context was referred wherein the insurers say that they had already informed that an amount of Rs.4,08,353 would be paid to Imam & Imam, in instalments, out of which a sum of Rs.1,25,000 was so paid but before the payment was made, Imam & Imam rushed to Court and riled Suit No.222/84. However, in the same paragraph it was stated by the insurers that Imam & Tmam were not entitled even to Rs.4,08,353 for the reason that the property was under‑ insured and, as such, the insured was only entitled to prorata average loss on the basis of actual value of the property. The application under Order 12 Rule 6 C.P.C., next mentioned, that the insurers had also negotiated a compromise with Imam & Imam, Plaintiffs in Suit No.222/84, in terms whereof they agreed to pay a sum of Rs.4,20,000 by way of full and final settlement. However, out of such amount the sum of Rs.1,25,000, already paid, was to be deducted. Such compromise application, it was said, had been signed by the parties and their Advocates. In spite of due execution of the compromise application, under Order 23 Rule 3 C.P.C., which was appended with the application a/o 12 Rule 6 C.P.C., the Insurers were alleged to have been mala fide postponing its submission in Court. 7 In the Counter‑Affidavit, filed in response to the application under Order 12 Rule 6 C.P.C., it was somewhat inartistically, urged by the insurers, that per letter dated 7‑6‑1984, from the office of the then D.M.L.A. it was stipulated that Imam & Imam had confirmed that they had not been paid any compensation by any Government agency and the insurers were called upon to take action at their end, to which they replied that such compensation, if any, paid to Imam & Imam by the Government be communicated so that the insurers could pay the balance. In sequence it is urged that (since no compensation was shown as paid) the parties agreed and settled the compensation at Rs.4,08,353 out of which a sum of Rs.1,25,000 had been paid. It was contended that after the compromise application was signed, the S.D.M. Liaquatabad before whom the case of compensation of Imam & Imam was pending, assessed the loss payable at Rs.3,00,000 and the Martial Law Administrator, Zone C and the Governor of Sind, on 6‑4‑1985, granted the said amount to them and, later on, it was paid to Imam & Imam, but the latter did not disclose these facts to the insurers, before the compromise application was signed. The insurers in their Counter‑Affidavit further said that as Imam & Imam had been compensated to the extent of Rs.1,25,000 plus Rs.3,00,000, making a total figure of Rs.4,25,000, which was more than the estimated loss of Rs.4,08,353, they were not entitled to any further payment. A contract of Insurance, it was urged, is a Contract of Indemnity and not for profit‑making. Alongwith the said Counter‑Affidavit the summary placed before the then Martial Law Administrator, Zone C and Governor of Sind alongwith orders passed thereon was also appended.

8. In the Affidavit‑in‑Rejoinder submitted by Imam & Imam, it was stated that the amount of Rs.3,00,000 sanctioned by the Provincial Government of Sind, by way of compensation, had nothing to do with the amount payable by the insurers in terms of the Insurance Policy dated 21‑12‑1982, and that such amount was an independent one and in no way absolved the insurers. 9. 1t was in this state of pleadings that the case was taken up by my learned brother, Tanzil‑ur‑Rehman, J., on 4‑9‑1986, and on examination of the pleadings the learned Judge, on admission of liability of Rs.4,08,353 and payment of Rs.1,25,000 in relation thereto, passed a decree for the balance amount of Rs.2,83,

353. The order, however is silent as regards the various pleas taken by the parties as to compensation amount of Rs.3,00,000 granted by the Government of Sind and on other questions regarding under‑insurance etc., pleaded by the insurers.

10. Before dealing with the contentions of the insurers in the application a/s 12(2), C.P.C., it would be instructive to examine the salient features of the summary placed before the Governor of Sind and his orders thereon. The total claim projected was Rs.17,85,

000. Recommendation of the Commissioner, Karachi, that compensation m the sum of Rs.3,00,000 be paid in view of the services rendered by the late Syed Hussain Imam and the fact that his legal heirs were in financial difficulty‑‑‑ was made the basis of the proposal in the summary. The insurers were also shown to be inclined to pay. Lt.‑Gen. Jehandad Khan, thereupon, passed the under‑noted order. Rupees three lacs sanctioned as compensation. The Commissioner to help in resolving the dispute with Insurance Co.

11. The first question for consideration is as to whether the decree, on admission, granted under Order 12 Rule 6 C.P.C., is bad for want of jurisdiction. The contention is that because the admission, if any, was not unequivocal and unconditional the same could not be made the basis of a decree on admission. It is correct that in order that an admission may qualify, as such, under Order 12 1 Rule 6 C.P.C., the same has to be clear, unambiguous, unqualified and unequivocal and the amount recoverable must be due and recoverable in the action in which the admission is made. Reference in this connection may be made to the case of Premsuk Das Assaram v. Udairam Gunga Bux ILR 45 Calcutta; 138, the view of Mooker Jee and Rankin, JJ. in the case of J.C.Galstaun v. E.D. Sasoon (AIR 1924 Calcutta 190), the case of Devi Narain v. Hassanand (AIR 1927 Sind 25), the opinion of Broadway CJ. and Abdul Qadar, J., in the case of Abdul Rehman and Brothers v. Parbati Devi (AIR 1933 Lahore 403) and the dictum of A.S. Farooqui, J., in the case of Kassamali Ali Bhoy v. Shaikh Abdul Sattar (PLD 1966 Kar 75). Now, even if it be assumed that the admission wAs not unconditional or unequivocal and that it was prefixed with denial of liability or other pleas in defence, the question that arises is whether, in recording such admission and proceeding to decree the suit, the learned Judge was acting without jurisdiction, for if a decree is challenged under section 12(2) C.P.C. for want of jurisdiction that is what an applicant has to establish showing that a jurisdictional error, going to the root of the case, is involved. On such questions, as have been raised which, apparently, were present at the time the decree was passed the order questioned herein is, more or less, silent. Patna High Court in the case of Makhada Dasi and others v. Lukshmi Narain Das and others AIR 1939 Patna 221 is of the view that the mere fact that a Judge has not mentioned in his judgment certain evidence does not entitle one to say that he dismissed such piece of evidence wholly from his consideration. Similar is the view in the case of Abbasi Shah v. Muhammad Shah and others AIR 1951 Madhya Bharat 92, a case from Indian jurisdiction, where the view expressed was that in cases in which the trial Judge does not attempt a careful analysis and appraisement of the evidence adduced, the appellate Court may draw a conclusion that the trial Judge had not taken proper advantage of his having seen and heard the matter, rendering the same becoming at large for the appellate Court. The Supreme Court of Pakistan in the case reported as State v. Zubair (PLD 1980 SC 173), though in the context of bails, has observed that the notion that each contention raised before the Court must be dealt with separately or repelled by recording elaborate reasons is misconceived and that an assumption can be made that a disposal on merits had been made on consideration of all the pleas and grounds. Besides, in the instant case, even if it be assumed that an error was involved in not dilating upon the controversy, which I would be extremely slow to concede, it cannot be said that such was a jurisdictional error going to the root of the decree and the same, such as it may have been, could be sought to be rectified, if at all in appeal or, may be even in review. Indeed, as pointed out by Mr. S. Sami Ahmad, appearing for Imam & Imam Limited, an appeal in fact was taken, was registered as H.C.A.172/86, but, on 13.1.1987, was dismissed, as withdrawn. Grievance has been made that due disclosure in this behalf has not been made by the insurers in the application under Section 12(2) C.P.C., which I have no doubt, was obligatory. Equities, therefore, may operate against the defaulting party. Be that as it may, the fact remains that on this question, at least, namely challenging the decree m the factual background above referred, the matter rests where it would have been had no appeal been taken and, as observed earlier, no jurisdictional error being occasioned no case for reappraisal a/s 12(2) arises in such context.

12. The next point taken is that the decree on admission is bad as, allegedly, it is tainted by the exercise of misrepresentation and perpetration of fraud by Imam & Imam aforesaid. As to what are the implications of misrepresentation and what are the connotations of fraud, apart from judicial pronouncements, recourse may also be had to the statutory enunciations on these expressions in the context of contractual obligations. Relevant to this controversy fraud may mean and include, as in section 17 of the Contract Act, 1872, suggestion, as a fact, of that which is not true, by one who does not believe it to be true, or active concealment of a fact by one having knowledge or belief of the fact, or an act or omission as the law specially declares to be fraudulent or any other act fitted to deceive. Mere silence may not constitute fraud unless circumstances are such that, regard being had to them, it is a duty of the person keeping silence to speak or unless silence is itself equivalent to speech. Misrepresentation, under section 18 of the Contract Act, so far as it be relevant here, would mean and include, the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true or any breach of duty which, without an intent to deceive, gains an advantage to the person committing it or any one claiming under him by misleading another to his prejudice or to the prejudice of anyone claiming under him or causing, however innocently, a party to make a mistake as to facts which may be relevant. The difference, therefore, between fraud and misrepresentation is one of intent though the effect of either may be the same namely obtainance of an advantage which, but for the facts alleged, may not have been obtainable. In the context of this case, it is urged that the decree was obtained by making misrepresentation and perpetration of fraud, inasmuch as, it was not disclosed that the property in suit namely, Mizrab Cinema, was under‑insured, that the loss covered and sustained was accordingly, liable for reduction on pro rata basis, and that the Government of Sind had allowed compensation in the sum of Rs.3,00,000 (Rupees three lacs) for the same loss, which was adjustable, as a contract of insurance is a contract of indemnity and it is not permissible for the insured to claim for the same loss twice over, from more entities than one, including the insurer. The points raised, prima facie, seem to be attractive and I have little doubt that if these facts were actually concealed and did not surface in the suit, prior to the decree, such decree, may well have been tainted by misrepresentation or even fraud. It is correct that a contract of insurance is a contingent contract and a contract of indemnity within the meanings of section 124 of the Contract Act, that absolute good faith is a SINE OUA NON in such Contracts and that is only the actual covered loss which can be redressed by the insurer. Mr. Rauf in this connection has made reference to the cases of Tropical Insurance Company Limited v. Zeneth Life Insurance Company Limited (AIR 1941 Lahore 08), Commissioner of Excess Profit Tax, West Bengal v. Rubi General Insurance Company Limited (AIR 1957 S.C.669) and Hunting Clan Air Transport Limited v. Pakistan International Airlines Corporation (PLD 1905 Kar. 219) in all of which cases, it has been declared that a contract of insurance is a contingent contract and a contract of indemnity and the insured cannot be indemnified twice over. While no exception can be taken to these principles, Mr. S. Sami Ahmad, however, has urged that in so far as the compensation by the Government of Sind is concerned that Government was fully aware that the process of compensation from the insurers was on and that action in that behalf was already pending in this Court. Besides, it is pointed out that such compensation was allowed in view of the services, in the cause of Pakistan, rendered by Late Mr. Hussain Imam and due to the financial difficulties of his legal heirs, both of which considerations are claimed to be irrelevant in so far as Imam and Imam Limited arc concerned, who arc a limited liability company and a different entity. These pleas overlook the fact that the compensation from the Government of Sind was in relation to loss or detriment to the subject‑matter of the contract of insurance, which was what and in respect whereof Government of Sind allowed its own compensation and this is not all, as the amount of damage claimed, as reflected in the summary placed before the Governor, exceeded Rupees seventeen lacs indicating that greater suffering was to be redeemed than would be covered by the contract of insurance. Nontheless, on the other hand, the insurers, as well as the Court, were aware as to what was transpiring at the Government end, for the relevant summary and orders thereon had been placed on the record. The facts of the case, therefore, may have indicated anything but did not suffer from and are not based on lack of material. Elements of fraud and misrepresentation, therefore, appear to be missing though the same material, had it not been on the record and then a decree was obtained could have been sufficient to impel the Court, when subsequently such material was brought on record, to hold that fraud was committed or misrepresentation was involved.

13. It has, however to be clarified that the scope of the remedy under section 12(2), C.P.C. namely the right of an aggrieved party to seek annulment of a decree on the ground of want of jurisdiction, misrepresentation or fraud is not exclusive. Similar relief may be obtainable through an appeal, a revision, if relevant, and even review. The exhaustion of one of such remedies or even non applicability thereof may not necessarily bar the other, provided, of course, the t. period of limitation for so doing is not lost in the process. But then all such remedies are distinct and independent. Besides, a particular case may fall within the ambit of one or more of these and may not fall within the scope of the other or others. Thus in the case of Alam Ali and another v. District Judge Multan and 3 others PLD 1983 Lah. 278 Muhammad Munir Khan, J., was of the view that compromise decree though not challenged in appeal or revision may yet be challenged under section 12(2) C.P.C., onus of proof, through evidence being on the applicant. Similarly, in the case of Malik Inayatullah Khan v. Government of Pakistan etc. PLD 1985 Pesh. 23 a Division Bench of the Peshawar High Court consisting of Nazir Ahmad Bhatti and Ali Hussain Qazilbash, JJ observed that the scope of Order XLII and Section 12(2) C.P.C. was different, that the period of limitation under section 12(2) C.P.C. was governed by Article 181 C.P.C. and further that mere availability of right of appeal does not bar the remedy under section 12(2) C.P.C. Likewise, in the case of Noor Muhammad etc. v. Province of Punjab etc. 1985 MLD 1236, Khalilur Rehman Khan, J., is of the opinion that the provisions of section 12(2) C.P.C. do not bar remedy of appeal as against a collusive decree and that a statutory right of appeal cannot be taken away merely because another remedy is available. As I have said earlier there may be cases in which on facts and circumstances more than one remedy may be attracted and the recourse to one such remedy may not bar the other. In this case, for instance, on the same or similar facts an appeal having been taken and dismissed, as withdrawn, may have made no difference if the case squarely fell within the purview of section 12(2) C.P.C. but that it did not so fall is another matter, yet, there may be cases in which recourse to one or the other remedies may result in the ouster of other or others. Thus, on a parity of reasoning, it may well be that apart from appeal this very case may have involved an available relief by way of review under Order XLII, P.P.C. but then an earlier appeal may bar relief in the nature of review.

14. Since the foregoing matters, which have been pleaded in the application under section 12(2) C.P.C., were already on record in suit No.222/84, and were, in fact, duly subjected to contest, by way of affidavits, the resultant decree cannot be said to have been based on anything which may go by the name of fraud or misrepresentation and, accordingly, jurisdiction under section 12(2) does not seem to be attracted. But, then, on such matters, as observed earlier, the order which has preceded the decree is silent. For all that I know the parties may not have addressed the Court on these questions. At any event, this is neither an application for review nor an appeal and the scope of this jurisdiction is limited as postulated in section 12(2) ibid. On dismissal of appeal, a review application is not competent but there is authority to suggest that a review may, competently, be sought if it precedes the filing of an appeal or follows upon withdrawal of appeal, which later situation has been equated with non‑filing of appeal. Approving the last mentioned distinction, in a string of decisions, the principle has, however, not been extended to dismissal of appeals on technical grounds or withdrawals subsequent to preferment of review. On this question the view expressed in Balling Vithaling Sakharpekar v. Sri Devastham Fund, Gondhale AIR 1931 Bom. 232, Jankiram Company v. Chunilal Shriram AIR 1945 Bom. 40 and Wazali and another v. Lal Mamud and others PLD 1960 Dacca 656 may be referred. If the plea was of an error apparent a review could have been occasioned but none was riled. On the other hand, at this stage, it may be too late in the day to do so. But, perhaps, section 14 of the Limitation Act may be invocable as it is because of lack of jurisdiction under section 12(2) C.P.C. to entertain the foregoing pleas that this application is failing.

15. Subject to the above observations, as I am of the view that there was neither lack of jurisdiction in passing the decree, nor the elements of misrepresentation and fraud were involved (since all relevant facts were already on record), this application under section 12(2) C.P.C. does not lie and is, therefore, dismissed but, in the circumstances, without any order as to costs. AA./M‑851/K Application dismissed.