Fraudulent act

2014 PLD 179 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 12(2)Arbitration Act (X of 1940), Ss.14 & 17Contract Act (IX of 1872), Ss.201, 187 & 209Fraudulent actAgencyPrincipal and agentDeath of one of the principalsTermination of agency

Petitioners moved an application for setting aside judgment and decree whereby the arbitration award announced by the arbitrator was made rule of the court on the ground that general attorney was not given any power to appoint an arbitrator and file consenting written statement before the court

Application was dismissed concurrently on the ground that the petitioners failed to establish any fraud on the part of the respondents

Validity

Power-of-attorney should be construed according to recitals of the documents on the basis whereof he was exercising his right and any act of the attorney done beyond the power vested with him could not be let go unnoticed and principal was not bound for said act

One of the principals died but the attorney knowing said fact that after his death he was no more his attorney, proceeded to collude with the respondents and filed consenting written statement on behalf of a dead person while showing himself as his attorney which was an example of fraud not only with the parties but also with the court

Respondents being beneficiaries were to prove that arbitrator was duly appointed with the consent of parties and the said fact could only be proved by producing the said arbitrator in the witness box but the respondent did not bother to produce the arbitrator as witness which inference went against the respondents

Non-registration of the award spoke about foul played by the respondents

Prime duty of the attorney was to safeguard interest of the principal and any act done by the attorney repugnant to the rights of the principal could not be given shelter rather the same stood open to attack by the principal

On the termination of agency due to death of one of the principals, it was duty of the attorney to take all reasonable steps for the protection and preservation of interests entrusted to him by the principal on behalf of the representatives of the principal but the act of the attorney was fraudulent

Both the courts below failed to appreciate that attorney had no authority to make statement on behalf of one of the principals.