1994 PLP 965 (CLC)

(1) Whether the plaintiff has got no cause of action? (2) Whether this Court has got no jurisdiction to try this suit? (3) Is the plaintiff entitled to the decree for realization of Rs.20,000 in dispute? (4) Are the defendants entitled to refuse to make up the amount in dispute on account of alleged defalcation made by the agent of the plaintiff. (5) Relief. Issue No.4 relates to defalcation allegedly made by Hafiz Muhammad Ali deceased on account of which the respondent claimed a right to withhold the return of Defence Savings Certificates. The trial Court after considering evidence produced by the respondent held that the respondent failed to prove that the stamps were misappropriated by late Hafiz Muhammad Ali. The suit was decreed through judgment dated 4-10-1981 because Hafiz Muhammad Ali deceased was held to have discharged his obligations under the agreement and was entitled to recover the Defence Saving Certificates deposited by him as security.

6. The respondent filed appeal against the said judgment and decree dated 4-10-1981 before the lower appellate Court which has been accepted through judgment and decree dated 13-2-1982 and suit dismissed on the sole ground that aforementioned present suit by Hafiz Muhammad Ali deceased against the notices issued to him for recovery of certain amount on account of the same alleged defalcation was pending before the Court in which the issue regarding alleged defalcation which was subject-matter of issue No.4 in this suit was directly and substantially in issue in the said suit.

7. Learned counsel for the appellant argued that the said previous suit though was pending but no objection was taken in this suit based on section 10, C.P.C. and the same was not got stayed and having been decided on 4-10-1981 prior to the decision of the said suit filed earlier which was disposed of after remand on 21-1-1985, therefore, for the purpose of application of principle of res judicata as contemplated by section 11, C.P.C. the present suit shall be deemed to be the previous suit and the finding recorded in this suit was to operate as res judicata qua the said suit which though was filed earlier but decided later. He further argued that even if the matter in issue in this case was directly in issue in the suit previously instituted suit, the present suit at the most could be stayed and the lower appellate Court was not vested with jurisdiction to dismiss the same.

8. The contentions have considerable force. In the earlier suit the validity of notices issued to Harz Muhammad Ali deceased regarding recovery of certain amount on account of defalcation was challenged on legal plane that while determining the liability against him he was not herd. The said suit was dismissed on merits after remand by the lower appellate Court on 21-1-1985, therefore, for the purposes of section 11, C.P.C. that was the date of the decision of the said suit. The suit from which the present appeal has arisen though was filed later in time but it was decided through judgment dated 4-10-1981 by the trial Court, therefore, this suit shall be deemed to be the previously instituted suit in order to determine whether the finding recorded in this suit would operate as res judicata qua the previously instituted suit with regard to the dispute of defalcation which was directly and substantially in issue in both the suits. This view is in accord with the express provision of section 11, C.P.C. If the respondent wanted a decision on the matter in issue in the previously instituted suit earlier to the disposal of the present suit they should have raised an objection under section 10, C.P.C. in this suit and got the same stayed. This having not been done, therefore, the judgment of the lower appellate Court for the dismissal of the present suit on the ground that the previously instituted suit was still pending was in violation of the express provision of law and not maintainable.

9. Even otherwise since in the said other suit as decided by this Court ultimately in RSA No.74/86 question as regards defalcation has not been decided and the suit had been decided on technical ground of failure of the Department to hear the appellant before issuance of notices impugned in the suit, therefore, the matter regarding defalcation shall not be deemed to have been finally heard and decided in the said suit, as such, the said judgment passed in the said suit does not operate as res judicata qua the present suit regarding determination of dispute regarding the alleged defalcation. Though an observation was made in the judgment passed by this Court in the said previous suit in RSA No.74/86 that the department could take fresh proceedings if permissible under the law but no benefit could be derived from the said observation as the question of defalcation was directly and substantially in issue in the present suit and after recording evidence the trial Court had decided the said issue against the respondents, therefore, there was no question to intitiate fresh proceedings at departmental level regarding the determination of the same question as the finding given in the civil suit after recording evidence are binding on the parties. Even if in pursuance of the said observation fresh proceedings had been taken and in those proceedings it was decided that there was defalcation, the same would not be of any effect and no recovery on the basis of the said finding can be made from the appellant till the findings recorded by the trial Court in this suit on the issue of defalcation are set aside.

10. Learned counsel for the respondents submitted that fresh proceedings were initiated by the respondents on departmental side and it was departmentally held that Harz Muhammad Ali deceased was liable on account of defalcation allegedly committed by him. As observed above the said proceedings and the findings cannot take preference over the finding recorded by the trial Court in this suit, therefore, the efficacy of the same is dependent upon the maintainability or otherwise of the findings of the trial Court in this appeal.

11. Learned counsel for the respondents submitted that since, the lower appellate Court accepted the appeal on technical ground and dismissed the suit and did not record any finding on merits i.e. on issue No.4, therefore, the case should be remanded for disposal of appeal on merits.

12. Had the evidence not been produced by the parties on a particular issue which had been left undecided by the lower appellate Court, I would have considered the desirability of remanding the case for decision of the said issue of defalcation, which course in this appeal need not be adopted as the said issue can be decided by this Court after considering the evidence of the parties already recorded to examine the correctness or otherwise of the finding recorded by the trial Court on this issue. I am not persuaded to remand the case to lower appellate Court in the interest of justice as that course would have the effect of throwing the party to further litigation and this matter is pending since 1971.

13. I have examined the evidence produced by the respondents regarding alleged defalcation. Umar Hayat was examined as D.W.1 in order to prove the defalcation. According to his evidence the stamps were sent from Jhang to Chiniot which were valuing Rs.1,30,000 and the same were received by the Treasury Officer in the treasury but not entrusted to sub-treasurer who was responsible to keep them in double lock. This witness attempted to produce a copy of letter allegedly written by Hafiz Muhammad Ali deceased in which he allegedly admitted the liability for defalcation which was not allowed to be produced for the reason that the same could be fabricated as at the earliest stage of the suit neither the original letter nor its copy was relied upon. It has also come in evidence of the respondent that prior to 6-12-1974 through Exh.P.6 two notices issued by the respondent to Hafiz Muhammad Ali deceased for recovery of an amount of Rs.1,49,639 on account of defalcation/misappropriation were withdrawn. It may be observed here that the legality of these notices was challenged by the deceased in the earlier suit which was dismissed as having become infructuous on account of withdrawal of the said notices but in appeal the case was remanded for its disposal on merits because the deceased wanted decision on merits rather than disposal of suit as having become infructuous. The respondent relied upon two reports of Inquiry Officer Exhs.Dl and D

2. The trial Court held that no value could be attached to these reports as they were based on the personal opinion of the Inquiry Officer and no opportunity was afforded to Hafiz Muhammad Ali deceased to cross-examine the said Inquiry Officer. 14. 1 have gone through the said reports Exhs.Dl and D

2. According to Exh.D2 stamp papers valuing Rs.1,30,000 were sent from Sadar Treasury to Chiniot Sub-Treasury on 13-1-1970 and receipt of the same was duly acknowledged by the Sub-Treasury Officer but the same were not mentioned in the Sub-Treasury record. According to Exh.Dl these stamps were not entrusted to Sub-Treasurer to be placed in the double lock up of the Sub treasury. It was rightly held that the defendants failed to establish- through evidence that these stamps were misappropriated by Hafiz Muhammad Ali deceased predecessor-in-interest of the appellant. The findings recorded by the trial Court on issue No.4 after close scrutiny of the evidence are found to have suffered from no illegality and are affirmed. Findings on issue No.1 are also affirmed because in view of the above discussion Hafiz Muhammad Ali deceased had cause of action to maintain the suit. Learned counsel for the respondents has not been able to pursuade me that the Civil Court lacked jurisdiction in the matter, therefore, issue No.2 was also rightly answered against the respondents.

15. Since it has been held that Hafiz Muhammad Ali was not liable for any defalcation/misappropriation therefore, it was rightly held that he was entitled to the return of Defence Saving Certificates valuing Rs.20,000 which he deposited as security for due performance of agreement which were to be returned to him after six months. Issue No.3 was rightly answered in favour of Hafiz Muhammad Ali deceased.

16. For the foregoing reasons the appeal is accepted, judgment and decree dated 13-2-1982 passed by the lower appellate Court is set aside and judgment? and decree dated 4-10-1981 passed by the trial Court-stands restored. There? will be no order as to costs. H.B.T./A-521/L?????????????????????????????????????????????????????????????????????????????????? Appeal accepted.