MUHAMMAD AZEEM Versus NATIONAL BANK OF PAKISTAN

ORDER

The brief facts out of which present writ petition arises are that respondent No. l filed suit (C. O. S. No: l of 1998), titled 'National Bank of Pakistan v. Messrs Rehmat Industries and others, for recovery of Rs.3,28,87, 597.42 only against the petitioners and respondents Nos. 2 to 9 under section 9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (Act XV of 1997), before this Court. The learned Banking Judge registered suit on 9‑3‑1998 and notices were issued to the defendants i.e., the present petitioners and present respondents Nos.2 to 9 including Rehmat Industries through bailiff of this Court and also by registered A.D. Publication thereof in, the Daily Nawa‑i‑Waqt, Multan and The News on 0‑4‑1999 as is evident from the order, dated 9‑3‑1998 of the learned Banking Judge.

2. Rehmat Industries (defendant No. l in C.O.S. No. 1 of 1998) is a registered partnership firm, being principal debtor, and respondent No.2/defendant No.2 is the Managing Partner and present petitioners Nos. l to 4/defendant Nos.3 to 6 are the partners of defendant No. l i.e., Rehmat Industries. Rehmat Industries/defendant No. l through its partners, present petitioners mortgaged its property and respondent No.2/defendant No.2, petitioner No. l/defendant No. 3 and defendants Nos. 7 to 13 mortgaged their own properties as security for the liabilities of the Rehmat Industries/defendant No. l and are jointly ,and severely liable for the liabilities of Rehmat Industries. The defendant No. l had and still has its account in its own nacre at the Timber Market Branch of the respondent Bank. Rehmat Industries/defendant No. 1 through its partners requested respondent/Bank for cash finance facilities and the same was sanctioned for Rs.20,000 Million on 7‑9‑1994 against tile security of pledge of stocks with 25 % margin, Ghee edible oil and with 30 % margin on empty tins, Chemical Soap, and collateral mortgage of various properties. The said finance was enhanced to Rs.25,000 Million on 4‑10‑1994, and it was once again enhanced to Rs.28,000 Million on 25‑5‑1995 against the same terms and conditions. The expiry date of the said finance was 30‑6‑1995.

3. The present petitioners and present defendants Nos.2 to 9 including Rehmat Industries failed to discharge the liabilities of respondent No.1/plaintiff Bank in accordance with terms and conditions arrived at between the parties. Respondent No.1 filed the aforesaid suit against the present petitioners and respondents Nos.2 to 9 including Rehmat Industries Muhammad Khalid Khokhar, respondent No.2/d.‑fondant Managing partner of Rehmat Industries appeared before the learned Banking Judge alongwith the counsel for the present petitioners and present respondent and wanted to make an offer on oath for the disposal of the suit. The statement of Muhammad Khalid Khokhar was recorded which was accepted by the learned counsel for respondent/Bank/plaintiff and the suit was decreed by a consent decree, dated 6‑2‑1999.

4. Respondent. No. 2 and other partners of Rehmat Industries failed to discharge the liabilities in terms of the judgment and decree of the learned Banking Court dated 6‑2‑1999. The respondent Bank/plaintiff filed execution petition against the present petitioners and respondents Nos.2 to 9 including Rehmat Industries.

5. The present petitioners filed an application under section 12(2), C.P.C. read with section 3 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and section 151, C.P.C. before the learned Banking Judge on 27‑5‑2000. The learned Banking Judge dismissed the application vide order, dated 26‑6‑2000. Hence, present writ petition.

6. Learned counsel for the petitioners submits that petitioners Nos.2 to 4 are Pardahnasheen ladies but the learned Banking Judge did not consider this aspect of the case and dismissed the application of the petitioners Nos.2 to 4 in violation of the law laid down by the superior Courts. In support of his contentions he relied upon Karam Ali case (PLD 1990 SC 1). He further submits that the learned Banking Judge had erred in law .to dismiss the application of the petitioners in violation of the law laid down by the superior Courts. In support of his contentions he relied upon Mian Munir Ahmad's case (PLD 1998 Karachi 278). He further submits that the petitioners did not engage any counsel and did not appear before the learned Banking Judge as respondent No.2/defendant No.2 has no authority whatsoever on their behalf to settle the dispute . with respondent/Bank/plaintiff. But this aspect of the case was not considered by the learned Banking Judge. He summed up his arguments that all the ingredients of fraud and misrepresentation are attracted in this case but the learned Single Judge was not justified to dismiss the application of the petitioners.

7. We have given our anxious consideration to the contentions of the learned counsel for the petitioners and perused the record ourselves.

8. It is better and appropriate to reproduce the relationship of present petitioners and respondent No.2 to resolve the controversy between the parties.

REHMAT INDUSTRIES

Muhammad Khalid Kokhar/Managing, Director/defendant No.2.

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Muhammad Azeem Muhammad Arif |

Petitioner No.1 Khokhar respondent | defendant No.3 No.4/ defendant |

No.4. |

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Mst. Ksneez Bibi petitioner No.2/defendant No.4 |

Mid Iqbal Respondent No.3/defendant No.7

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Mst. Sughran Bibi petitioner No.3/ defendant No. 5.

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Muhammad Islam, respondent No. 5/defendant No.9.

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Mst. Zahida Bibi, petitioner NoA/ defendant No.6.

9. The aforesaid Family Table shows that petitioners Nos.1 to 4 and respondents Nos.2 to 5 are close relatives.

10. It is better and appropriate to reproduce the relevant clauses of the partnership deed, operative part of the consent decree, dated 6‑2‑1999 and the impugned order, dated 26‑6‑2000.

PARTNERSHIP DEED

"(6) That the party of the first Part Muhammad Khalid Khokhar will be the Managing Partner of the firm. He will manage all the affairs of partnership business and operate bank account etc. He is authorised to draw loan from the banks or other persons in the name of the firm by mortgaging the property of the firm for use in the best interest of the firm's business."

(13) That all the provisions of Partnership Act shall be applicable to this deed.

Operative part of consent Decree dated 2‑6‑1999

(1) A consenting decree is passed in favour of the plaintiff and against the defendant for Rs.3,28,87,597.42 (Rupees three crore, twenty eight lacs, eighty seven thousand, five hundred and ninety seven and paisas 42 only)

(2) The decretal amount shall be paid by the defendant in eight equal instalments of Rs.41,10,950 after availing of period of 8 months and seven days as grace period;

(3) The 8 instalments of the decretal amount shall be paid by the defendants to the plaintiff as under:‑‑

Installment No.

Amount.

Date of payment

1.

Rs.41,10,950.00

31‑12‑1999

2.

Rs.41,10, 950.00

30‑6‑2000

3.

Rs.41,10,950.00

31‑12‑2000

4.

Rs.41,10,950.00

30‑6‑2001

5.

Rs.41,10,950.00

31‑12‑2001

6.

Rs.41,10,950.00

30‑6‑2002

7.

Rs.41,10,950.00

31‑12‑2002

8.

Rs.41,10, 947.00

30‑6‑2003

Operative part of impugned Order

"The wording of the partnership deed, as such, clearly and unambiguously establishes the authority of Khalid Khokhar to bind the firm. The applicants namely Muhammad Azeem, Mst. Sughran Bibi, Mst. Kaneez Bibi and Mst. Zahida Bibi (respondents Nos.3, 4, 5 and 6), who are partners in the firm, cannot be allowed to wriggle out of their obligation as partners of the firm by setting up a plea which is wholly inconsistent with the partnership deed executed by, them. It is also worth noting that the applicants were duly represented in Court on 6‑2‑1999 when the impugned judgment and decree were passed. Consequently, there is no valid ground for setting aside the aforesaid judgment and decree. As a result, the present application being without merits is dismissed' "

11. The aforesaid operative parts of the impugned decree, order and Partnership deed reveal that respondent No.2/defendant No.2 was impliedly authorised to settle the dispute with the respondent Bank by virtue of section 19 of the Partnership Act, 1932. In arriving to this conclusion we are also fortified by the law laid down by the superior Courts in the following judgments:‑‑

1987 MLD 594 (National Bank of Pakistan v. Umer Brothers and 3 others).

PLD 1953 Dacca 117 (Jiban Krishna De and another v. Sreepada Talukdar and others).

12. For challenging the judgment and decree, dated 6‑2‑1999 the petitioners are required to make out that said judgment has been obtained by fraud or misrepresentation or it is without jurisdiction. Keeping in view the relationship between respondent No.2 and the petitioners, the original decree was passed on 6‑2‑1999 and the present petitioners filed application under section 12(2), C.P.C. on 27‑5‑2000. We, therefore, are of the clear view that if the.Court comes to the findings that an application under section 12(2) is improper, mala fide and has been made only to protract the proceedings and to abuse the process of the Court, the Court can dismiss the same summarily without framing any issue or recording any evidence. In arriving at this conclusion we are fortified by the law laid down by the Hon"ble Supreme Court in 1993 SCMR 662 (Ghulam Muhammad v , M. Ahmad Khan and 6 others).

13. The respondent No.2 and petitioners got maximum benefit out of the consent decree, dated 2‑6‑1999 and thereafter did not honour their commitment and the respondent Bank was constrained by the circumstances to file the execution application against respondent No.2 and petitioners and thereafter petitioners filed application under section 12(2), C.P.CA, which brings the case of the petitioners that petitioners filed the application with mala fide intention for the purpose to frustrate the consent decree. The petitioners had the knowledge of the suit filed by respondent Bank against them as the public notice was issued in the 'Daily Nawa‑i‑Waqt and The News' on 28‑3‑1998. The petitioner No.1 is admittedly a man while petitioners Nos.2 to 4 are ladies‑ but they did not take a stand that they are illiterate. Therefore, the principle of Pardahnasheen Lady as is held by the Hon'ble Supreme Court in PLD 1990 SC 1 is not attracted in the present case. Therefore, the case cited by the learned counsel for the petitioners, is distinguished on facts and law. On account of the Public Notice published in the Daily Nawa‑i‑Waqt and The News, the service of the petitioners had been effected as per principle laid down by the Hon'ble Supreme Court in D PLD 1990 SC 497 (Messrs Ahmad Autos and others v. Allied Bank of Pakistan Limited).

14. The consent decree was passed on 6‑2‑1999 whereas the petitioners had filed application under section 12(2), C.P.C. on 27‑5‑2000. This fact brings the case of petitioners that petitioners did not approach this Court with clean hands. It is settled principle of law that he who seeks equity must come with clean hands, as per principle laid down by the Hon'ble Supreme Court in Nawabzada Raonaq Ali's case (PLD 1973 SC 236). The petitioners have alternative remedy to agitate the original decree under section 21 of the Banking Companies (Recovery of Loans, Advances, Credits and. Finances) Act, ‑1997. Therefore, .the writ petition is not maintainable as per principle laid down by the superior Courts in the following judgments:‑‑---

2000 MLD '421 (Messrs. Gold Star International v. Muslim Commercial Bank Ltd.).

1998 SCMR 2352 (Central Cotton Mills Lid. and another v. Atlas Bot Lease Co. Ltd.).

PLD 1996 SC 246, Messrs Ismail's case.

15. In view of what has been discussed above, this writ petition has no merits and the same is dismissed.

Q.M.H./M.A.K./M‑327/L , . Petition dismissed.