COTTON EXPORT CORPORATION OF PAKISTAN (PVT.) LTD., KARACHI vs AWAMI

' Applicant's case is that it is Government owned limited Company and was exclusively entitled to export cotton from Pakistan. Respondent No,1 is a partnership firm with the other respondents as its partners and at the relevant time had a Ginning and Pressing factory at Ahmadpur East.

Respondent No,1 applied to the applicant for a loan of Rs,5,50,000 for modernization of its factory, which was sanctioned by the applicant and consequently a loan agreement dated 4-12-1988 was entered into between the parties. As security for the repayment of the said loan the respondent No,1 executed several documents including a promissory note dated 28-12-1988 for Rs,5,50,000. The said loan was to be repaid by the respondents in two cotton seasons of 1988-90 with a mark-up at the rate of 43 paisas per thousand per day from the date of disbursement of the said loan till repayment. The loan was disbursed on 28-12-1988. The respondent No,1, however, failed to repay the entire loan in accordance with the terms of the agreement and as on 30-9-1991 a sum of Rs,3,58,602 still remained payable by the respondents towards the loan. Accordingly the applicant filed against the respondents Suit No,65 of 1991, under summary procedure provided under Order 37, C.P.C., for the recovery of the unpaid balance of Rs,3,58,602 with mark-up at the agreed rate.

The suit was filed in the Court of District Judge, South, Karachi, who transferred the same to the Court of IV-Additional District Judge, South, Karachi.

2. It is submitted that during the same period the applicant had sanctioned same amount of loan to another partnership firm with the name of `Awami Cotton Industry', which too had defaulted in the repayment of the loan and as such its papers too were forwarded to the advocate for the filing of suit, but before any suit could be instituted the said firm (Awami Cotton Industry) cleared the entire loan. However, while conveying the information to the advocate there was some inadvertent mix-up due to the marked similarity in the name of respondent No,1 (Awami Cotton Ginning) and the other firms, namely, `Awami Cotton Industries' with the result that under bona fide mistake an application under Order 23, Rule 1, C.P.C. Was filed in the aforesaid Suit No,65 of 1991, praying for withdrawal of the suit. The application read as follows:-- "APPLICATION UNDER ORDER 23, RULE 1, C.P.C.: ' It is respectfully stated on behalf of the plaintiff above-named as under:--

(1) That the defendants have settled/paid/adjusted plaintiff's claim in the above suit with mark-up outside the Court.

(2) In the premises, the plaintiff does not wish to proceed with the above suit.

' PRAYER: ' It is, therefore, respectfully prayed that this Honourable Court may be pleased to allow the plaintiff to withdraw the above suit with no order as to costs."

' On this application the following order was passed by the Additional District Judge on 26-5-1992: "Defendants called absent. The application is allowed, suit is dismissed as withdrawn with no order as to costs."

3. Later, on realising the mistake an application under section 151, C.P.C. Was moved, in the said suit praying for the recalling of the order dated 26-5-1992, whereby the said suit was dismissed as withdrawn. The application was, however, dismissed by the impugned order.

4. The contention of Mr. Salim Thepdawala, the learned counsel for the applicant is that the earlier application under Order 23, Rule 1, C.P.C. Had been filed under bona fide mistake, and as soon as this was realised application under section 151, C.P.C. Was moved for rectification of the mistake which ought to have been granted by the Court below. He submits that in a case like the present, where there was no specific provision prohibiting the recalling of the earlier order, dismissing the suit as withdrawn, the Court in exercise of its inherent powers should have recalled the order, to meet the ends of justice. Reliance is placed on the case of H. M. Saya & Co., Karachi v. Wazir Ali Industries Ltd. And another (PLD 1969 Supreme Court 65). There the question for consideration was whether a stranger to a suit or proceedings can file an appeal if he is adversely affected by an order in that suit or proceeding. In that context it has been observed that:-- "It is true that there is no express provision permitting such party to prefer an appeal against such an order. This omission, however, cannot be understood to amount to prohibition. The Court ought not to act on the principle that every procedure is to be taken as prohibited unless it is expressly provided for. To give such a meaning to the omission would result in grave injustice. The facts of this case are clear example in point. The Court should proceed on the principle that every procedure which furthers administration of justice is permissible even if there is no express provision permitting the same."

' Reference has also been made to the case of Imtiaz Ahmed v. Ghulam All and others (PLD 1963 SC 382), where it was observed that:-- "I must confess that having dealt with technicalities for more than forty years, out of which thirty years are at the bar, I do not feel much impressed with them. I think the proper place of procedure in any system of administration of justice is to help and not to thwart the grant to the people of their rights. All technicalities have to be avoided unless it be essential to comply with them on grounds of public policy. The English system of administration of justice on which our own is based may be to a certain extent technical but we are not to take from that system its defects. Any system which by giving effect to the form and not to the substance defeats substantive rights is defective to that extent. The ideal must always be a system that gives to every person what is his."

5. The inherent powers of The Courts as affirmed by section 151 of the Code are undoubtedly wide and varied and are meant to advance the cause of justice and to redress a wrong. To secure the ends of justice and to prevent abuse of the process of the Court these ought to be exercised unhesitatingly so long as this does not conflict with or is contrary to any provision of law or the Code or is not in respect of a matter for which specific provision is made in the Code.

Here, it is obvious from applicant's application before the trial Court that the withdrawal of the suit was sought on the ground that the respondents had paid the amount claimed by the applicant in the suit. This, statement, as was later found and explained in the application under section 151, C.P.C., was the result of confusion arising out of the similarity in names of respondent No,1 and that of the said other firm known as `Awami Cotton Industry', which in fact had cleared applicant's loan outstanding against it. In these circumstances this was a fit case where the trial Court should have invoked its inherent powers to recall its order dismissing the suit. Its refusal to do so on the technical ground that, "the learned counsel for the applicant/plaintiff has not been able to give any specific law or any case law to satisfy this Court when once an order had been passed wherein the suit has been dismissed as withdrawn it can be recalled subsequently", amounted to failure to exercise jurisdiction vested in it.

For the reasons discussed above I would allow the revision application set aside the impugned order dated 28th July, 1992, grant the application under Section 151, C.P.C., and restore Suit No,65 of 1991 to file in the position it was when dismissed as withdrawn on 26-5-1992.