S.M. ABDULLAH & SON Versus PAKISTAN MERCANTILE CORPORATION LTD KARACHI

In this miscellaneous appeal the appellant has challenged the legality, of the order dated 30-5-1973 passed by the First Additional District Judge Karachi, dismissing the appeal filed by the present appellant.

2. Briefly, the facts relevant for the purposes of this appeal are that the 1st respondent had entered into a contract for the sale of cotton to the appellant on 20-5-1968. It appears that the said contract contained an arbitration clause and disputes having arisen between the parties in relation to the contract, the 1st respondent invoked the arbitration clause. After the appellant failed to appoint his arbitrator in consequence to the usual notice, the 1st respondent appointed his arbitrator who, acting as the sole arbitrator passed an award, which was filed in the Court of 5th Civil Judge, First Class, Karachi. In response to the notice issued; by the Court, the appellant filed his objections to the award, which were however, rejected by the Court. Accordingly, the learned Civil Judge made the award the rule of the Court and passed a decree in terms thereof on 21-1-1970. Aggrieved by the aforesaid decree the appellant filed an appeal which was pending in the Court of First Additional District Judge, Karachi, when on 10-3-1973 neither the appellant nor his counsel was present when the appeal was called on for hearing. The learned Additional District Judge Karachi, did not dismiss the appeal in default in appearance but proceeded to dispose of the same on merits and dismissed it by judgment dated 17-3-1973. On 28-3-1973, application purporting to be under Order IX, rule 7 read with section 151. C. P. C. was moved seeking to set aside the ex pane order dated 10-3-1973 (which i3 Annexure `A' in this appeal). The learned First Additional District Judge however, by his order dated 30-5-1973, dismissed the application on taking the view that the same was not competent as the appeal had been dismissed on merits and not in default. The appellant has now challenged the said order by this appeal.

3. Mr. Mohammad Shafi, learned Advocate for the appellant has first contended that the order passed by the learned Additional District Judge is illegal and untenable in law. It is his contention that the learned Additional District Judge could not pass the judgment on merits of the appeal but was obliged under the law to dismiss the appeal in default, as the appellant and his advocate were absent at the time of hearing. He has referred to Order XLI, rule 17, C. P. C. and has argued that the said provision empowers the Court to dismiss the appeal in default or pass any other order, for instance, adjourning the case to another hearing but in no case permits the dismissal of the appeal on merits. The learned Advocate for the appellant has cited the case of Kundha Singh v. The Punjab State and others (A I R 1962 Pb. 82) in support of his contention and has urged that the First Additional District Judge ought to have exercised jurisdiction under Order XLI, rule 19, C. P. C. to consider his application dated 28-3-1973 for re-admission of the appeal. Mr. Mushir Pesh Imam, learned Advocate for the respondent on the other hand, has disputed the correctness of the proposition of law, made by the learned Advo cate for the appellant and has justified the passing of the judg ment on merits by the learned First Additional District Judge and the subsequent order dismissing in limine the request for restoration of appeal. It is his contention that the application dated 28-3-1973 could not be treated as an application for re-admission of the appeal as the same was made under Order IX, rule 7, C. P. C. He has further urged that this being a case of award filed under the provisions of the Arbitration Act, the Court had limited jurisdiction to interfere.

4. In order to appreciate the contentions of the learned counsel it is necessary to refer to the language of the provisions of Order XLI, rule 17, C. P. C. which are in the following terms:---

"(1) Where on the day fixed, or on any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Court may make an order that the appeal be dismissed.

(2) Where the appellant appears and the respondent does nut appear, the appeal shall be heard ex parte."

The provisions of Order XLI, rule 19, C. P. C. may also be reproduced as under:----

"Where an appeal is dismissed under rule 11, sub-rule (2), or rule 17 or rule 18, the appellant may apply to the Appellate Court for the re-admission of the appeal; and where it is proved that he was prevented by any sufficient cause from appearing when the appeal was called on for hearing or from depositing the sum so required, the Court shall re-admit the appeal on such terms as to costs or otherwise as it thinks fit."

Now so far as the position in the old Code is concerned the corresponding section 556 provided that where on the day fixed or any other day to which the hearing may be adjourned the appellant does not appear when the appeal is called on for hearing the appeal `shall be dismissed in default: Accordingly, there was no question under the old Code of disposing of the appeal on merits. However, in the present Code, these words were substituted for the words `the Court may make an order that the appeal be dismissed.' Therefore, so far as the old Code was concerned there was no doubt that the only option for the Court, in the case of non-appearance of the appellant or his Advocate was to dismiss the appeal in default. But, since the present provision vests a discretion in the Court by using the word `may,' a controversy was raised and it was said that the present Code empowers the Court in its discretion, not to dismiss the appeal in default but to pass a judgment on merits. The High Courts of Allahabad, Caclutta, Madras, Rangoon, Assam, Punjab and Rajasthan have held that the fact that the Court is not bound to dismiss an appeal for default does not enable it to dismiss the appeal on merits, but only to adjourn it to another date. Some of the Courts in the sub-continent have, on the, other hand, taken the contrary view and have held that the powers of an appellate Court under the present rule, as altered in the new Code, are wide enough to include the power to dismiss the appeal on merits if the appellate Court should think fit to do so. However, predominantly the consensus of judicial opinion favours the first view, which in my consideration with all respect, is the correct view of the law as it stands after the present Code came into force. I do not wish to burden this judgment with a discussion of all the decided cases on the point, but I would only refer to some of the decisions whose view :I have adopted as correct. The learned Advocates appearing in this appeal were not able to refer to any decisions of the superior Courts of this country on the question.

5. The first case that I wish to refer to is the decision relied upon by the learned counsel for the appellant, referred to above. In that case, in almost identical circumstances when the appeal came up for hearing before the Court neither the appellant, nor his counsel was present. The District Judge however, did not dismiss the appeal in default but proceeded to look into the file of the case and dismissed the same on merits agreeing with the trial Court in its findings. The appellant sought to have the appeal re-admitted through an application under Order XLI, rule 19, C. P. C. but the District Judge dismissed the sum holding that the same was not competent in view of the fact that he had dismissed the appeal on merits. The matter then, was taken in appeal before the High Court and the same argument was urged as is being sought to be urges in this appeal, that the District Judge had no jurisdiction to dismiss the appeal on merits but was bound to dismiss it in default. After a thorough examination of the provisions of Order XLI, rules 17, 19 and 30, C. P. G3., the Court came to the conclusion that the contention had force and upheld the same. The relevant observations, in that case are as under:----

"In my view this change has merely enabled the appellate Court to adjourn the case to some future date, if it does not want to dismiss the appeal in default on that date, or pass such other order as it thinks proper in the circumstances of the case but it cannot dismiss the appeal on merits. Under the old Code the appellate Court had no other choice but to dismiss the appeal in default in the absence of the appellant. But under the new Code, the appellate Court has been given a discretion. It may dismiss the appeal in default or may adjourn it to- some future date. But as I look at the matter, the appellate Court is not authorised to decide the appeal ex parte and dismiss the same on merits in the absence of the appellant. Sub-clause (2) of rule 17 contemplates that when the appellant is present and the respondent does not appear, the appeal shall be heard ex parte. But it has not been provided in this rule that when the appellant does not appear and the respondent appears, then the appeal shall be disposed of ex parte. If that were the intention of the Legislature, a clear direction to this effect would have been incorporated in this rule.

Moreover, when an appeal is dismissed under rule 17, the appellant is entitled to apply to the appellate Court for the re-admission of the same under rule 19 of Order XLI, Civil Procedure Code, and where the appellant proves to the satisfaction of the Court that he was prevented by any sufficient cause from appearing when the appeal was called on for hearing, the Court shall re-admit the same. If the appeal is dismissed on merits under rule 17, then. the appellant will be debarred from seeking his remedy under rule 19 of Order XLI, Civil Procedure Code, which has remained intact even though the language in rule 17 had been changed. This clearly shows that the intention of the Legislature was that under rule 17 the appeal should not be dismissed on merits in the absence of the appellant but the same should be dismissed in default so that he may avail of the remedy provided under rule 19.

Moreover, if the appeal is dismissed on merits in the absence of the appellant, he will be debarred from raising a number of points in support of his appeal, howsoever, good they may be, and he will not be able to question the findings of fact afterwards. In my opinion, an appeal can be dismissed on merits only under rule 30, Order XLI, Civil Procedure Code, after hearing both the parties."

5-A. So far as the contrary view is concerned the most important case is the case of Daulat Singh v. Maharaja Kisho Prasad Singh (A I R 1921 Pat. 325) where it was held that the change by the language of the provisions of the new Code a wide discretion is given to the appellate Court to enable it to enter into the merits of the case and decide the appeal on its merits. However, this view was dissented from by the same Court in a later case of Kawleshwar Singh v. Raghubir Singh (A I R 1961 Pat. 299) where it was held that the Court can either adjourn the hearing of the appeal or dismiss it in default under rule 17 of Order XLI, C. P. C. But it has no jurisdiction to dismiss it on merits. The Calcutta High Court also held the similar view in the case of Tahir Shaikh v. Otaruddi Howaladar (A I R 1929 Cal. 475).

6. It will be observed that sub-rule (2) of rule 17 of Order XLI provides for the hearing of the appeal ex parte in case the appellant is present and the respondent does not appear at the time of hearing. A remedy is provided for in such happening in rule 21 of Order XLI, C. P. C.' whereby even when the judgment is pronounced ex parte against the respondent he may apply to the Court for re-hearing of the appeal and if he satisfies the Court either that notice of appeal was not duly served on A him or he was prevented by sufficient cause at the time of hearing the Court shall rehear the appeal. Similarly, if an appeal is dismissed for default of appearance under sub-rule (1) of rule 17 of Order XLI, C. P. C due to the non-appearance of the appellant he has a remedy for rehearing of the appeal by making an application under rule 19 of Order XLI, C. P. C. The only provision under which the final judgment can be passed in appeal on merits appeals to be rule 30 of Order XLI which is in the following terms:--

"The appellate Court, after hearing the parties or their pleaders and referring to any part of the proceedings, whether on appeal or in the -Court from whose decree the appeal is preferred, to which reference may be considered necessary, shall pronounce judgment in open Court, either at once or on some future date of which notice shall be given to the parties or their pleaders."

It is after the judgment is pronounced under the above-said rule that the appellate Court would become functus officio so that further remedies if any could only be sought by way of appeal or revision in the higher Court. There is no other provision in Order XLI, C. P. C. dealing with the procedure relating to appeal which empowers the Court to pass a judgment on merits so as to finally dispose of the case from its file. So far as the provisions relating to non-appearance of parties in appeal are concerned the scheme of Order XLI, C. P. C. generally and rules 17, 19 and 21 of Order XLI, C. P. C quite clearly indicates that the dismissal of an appeal in consequence of non-appearance does not make an appellate Court functus officio, but the Court retains seizin of the case, in so far as if the defaulting party appears subsequently and shows sufficient cause for his non-appearance the Court could provide him with an opportunity of hearing and dispose of the matter finally on merits. This opinion is further fortified if a, reference is made to rule 11 of Order XLI, C. P. C. which deals with the summary hearing of, the appeal for admission. It in, substance, provides that the appellate Court on a day fixed for the purpose after hearing the appellant or his pleader may dismiss the appeal summarily. Such dismissal is also on merits and the only remedy for that lies in second appeal. Whereas, sub-rule (2) of rule 11 of Order XLI, C. P. C. provides as under:-----

"If on the day fixed or any other day to which the hearing may be adjourned the appellant does not appear when the appeal is called on for hearing the Court may make an order that the appeal be dismissed."

The perusal of the above provision would quite clearly show that such dismissal is not envisaged to be on merits because under rule 19 of

Order XLI, C. P. C., the defaulting appellant has a right to move for re admission of the appeal so dismissed for default.

7. There is yet another aspect of the matter. That is that, the language of Order XLI, rule 17, C. P. C., which is a specific provision dealing with the procedure in case of non-appearance of the appellant, empowers the Court to dismiss the appeal. On the other hand, if the contrary view, as mentioned above is accepted and it is held that the Court would be competent to consider the merits of the appeal, it would follow that in such a situation the Court would further be competent to decide the appeal, despite the absence of the appellant in his favour. The consequence could be that the appellate Court may accept the appeal. But the plain language of the rule does not make a provision for such a judgment; the only power being to dismiss the appeal.

8. For all these reasons I am very clearly of the opinion that the absence of the appellant at the time of hearing does not empower the appellate Court under rule 17 of Order XLI, C. P. C. to dismiss the appeal on merits.

9. The position that emerges, therefore, is that the judgment pronounced by the learned First Additional District Judge dated 17-3-1973, on merits being in violation of the mandatory provisions of law, can only be deemed to be a dismissal in default, as ought to have been done. Accordingly the application dated 28-3-1973 filed on behalf of the appellant was in substance an application under the law and ought to have been disposed of on its merits. The order dated 30-5-1973 dismissing the said application is, therefore, unsustainable and must, therefore, be set aside.

10. In the result, I would allow the appeal and set aside the order dated 30-5-1973 mentioned above and remand this case with a direction that the First Additional District Judge Karachi, shall dispose of the application as an application under Order XLI, rule 19, C. P. C. according to law. In the circumstances of the case I make no order as to costs.

S. A. H. Appeal allowed.