GOVERNMENT OF SINDH VS KHALIL AHMED
1994 S C M R 782
[Supreme Court of Pakistan]
Present. Nasim Hasan Shah, CJ,
Muhammad Rufiq Tarar and Manzoor Hussain Sial, JJ
GOVERNMENT OF SINDH Through the Chief Secretary and others‑‑‑Appellants
versus
KHALIL AHMED and others‑‑‑Respondents
Civil Appeal No. 236‑K of 1992, decided on 12/01/1994.
(On appeal from the judgment of the Sindh High Court, dated 2‑12‑1991, in HCA No.4 of 1991).
(a) Civil Procedure Code (V of 1908)‑‑‑
‑‑‑‑S. 12 (2)‑‑‑Constitution of Pakistan (1973), Art. 185 (3)‑‑‑Leave to appeal was granted to consider the contention that application under S. 12 (2), C.P.C. should not have been dismissed on the ground of limitation as where the decree was obtained by fraud, question of limitation for setting aside the same, would not arise, as also the entire case was not examined in its correct perspective which resulted in grave miscarriage of justice.
(b) Civil Procedure Code (V of 1908)‑‑
‑‑‑‑S.12 (2)‑‑‑Contract Act (IX of 1872), S. 23‑‑‑Decree passed on the basis of void agreement‑‑‑Limitation‑‑‑Action taken on the basis of a void agreement including the decree passed being nullity, no bar of limitation could be pleaded for setting aside the decree.
(c) Civil Procedure Code (V of 1908)‑‑‑
‑‑‑‑O.XXIII, R‑3‑‑‑Consent‑‑‑Challenged on ground of fraud ‑‑‑Decree‑ Limitation‑‑‑ Decree passed without hearing and notice to the party whose presence was essential before the Court as also without express consent and signatures of the representative of the parties on the compromise application was nullity and question of limitation would not arise.
(d) Civil Procedure Code (V of 1908)‑‑‑
‑‑‑‑S. 12 (2)‑‑‑Decree obtained by fraud‑‑‑Limitation‑‑‑Where parties to an agreement deceitfully agreed to transfer property owned by a third party without latter's knowledge the agreement being fraudulent and void, no bar of limitation could successfully be pleaded against the aggrieved party.
It is true that the provisions of the Limitation Act are to be construed strictly, though they may create hardship in certain cases, as also that the Court is under legal obligation‑ to decide the point of limitation even if not raised by the contending parties, nevertheless where in an agreement parties deceitfully agreed to transfer the property owned by a third party without latter's knowledge the agreement being fraudulent and void, no bar of limitation could successfully be pleaded against the aggrieved party.
Mst. Rehmat Bibi and others v. Punnu Khan and others 1986 SCMR 962; Allah Dino v. Faqir Muhammad and another PLD 1969 SC 582; Malik Khawaja Muhammad and others v. Marduman Babar Kahol and others 1987 SCMR 1543; Syed Nazir Hassan v. Settlement Commissioner PLD 1974 Lah. 434; Hussain Bakhsh and others v. Settlement Commissioner and another PLD 1969 Lah.1039; Yousaf Ali v. Muhammad Aslam Zia and others PLD 1958 SC (Pak.) 104; Ch. Altaf Hussain and others v. The Chief Settlement Commissioner and others PLD 1965 SC 68 and Syed Ali Abbas and others v. Vishan Singh and others PLD 1967 SC 294 ref.
(e) Administration of justice‑‑‑
‑‑‑‑ Public functionaries‑‑‑Acts performed and orders made by public authorities, deserve due regard by the Courts and every possible explanation for their validity has to be explored.
The Chairman, East Pakistan Railway. v. Abdul Majid Sardar PLD 1966 SC 725 and Lahore Improvement Trust v. The Custodian, Evacuee Property and others PLD 1971 SC 811 ref.
(f) Civil Procedure Code (V of 1908)‑‑‑
‑‑‑‑S. 12
(2)‑‑‑Decree obtained by fraud‑‑‑Fraud vitiates even the most solemn proceedings and Courts of general jurisdiction are competent to suo motu recall decrees obtained from it by fraud.‑‑‑[Fraud].
Chief Settlement Commissioner v. Muhammad Fazil PLD 1975 SC 331 ref.
(g) Remand‑----
‑‑‑‑ Claim of plaintiff in the suit being fraudulent which was apparent from the record, Supreme Court declined to remand the case for the proceedings which would have been sheer wastage of time and merely an exercise in futility.
Chief Settlement Commissioner v. Muhammad Fazil PLD 1975 SC 331 ref.
A.G. Mangi, AA.G. (Sindh) and RA. Qureshi, Advocate‑on‑Record for Appellants.
Muhammad Sharif, Advocate Supreme Court and M.S. Ghaury, Advocate‑on‑Record for Respondents.
Date of hearing: 16th October, 1993.
JUDGMENT
MANZOOR HUSSAIN SIAL, J.‑‑‑This appeal by leave of this Court, calls in question, the validity of the judgment dated 2‑12‑1991, of the Division Bench of Sindh High Court, Karachi, passed in HCA No.4/1991, whereby judgment dated 31‑10‑1990, of the learned Single Judge of the same Court, dismissing application under section 12 (2) read with section 151 C.P.C., was upheld and the appeal filed by the appellants was dismissed.
2. The dispute in this case relates to land measuring about 78 acres and 12 guntas, comprising Survey Nos.51, 52, 53, 62 and 64, situate in Deh Bitti Amri, District Karachi (East). It was initially owned by one Lila Ram son of Radha Krishandas, a Hindu evacuee owner.
3. On 15‑7‑1984, one Khalil Ahmad son of A. Aziz Sheikh, instituted suit No. 433/1984, in the Sindh High Court, against Lila Ram and the appellants for specific performance of an agreement of sale dated 29‑1‑1983, pertaining to land in dispute, allegedly executed by Lila Ram in his favour, as consequential relief he prayed for a direction to Lila Ram respondent to execute sale‑deed after receiving balance amount of Rs.2 lacs and in the alternative sought a direction to Nazir of the High Court to execute the sale‑deed in his favour. The relief claimed against the appellants was to issue a no‑objection certificate for the execution of the sale‑deed and to protect his possession of the suit land. It was alleged in the plaint that Lila Ram had been borrowing money from the plaintiff from time to time. On 29‑1‑1993, he executed agreement of sale acknowledging the amount of loan already received and balance of Rs.2,00,000 payable to him at the time of the execution of the sale‑deed. It was also averred in the plaint that Lila Ram had delivered physical possession of the land to him. The suit was resisted by the appellants. It was pleaded in the written statement that Lila Ram had migrated to India. The land in dispute was declared/treated as an evacuee property and formed part of the compensation pool. On the Repeal of the Evacuee Laws, with effect from 1st July, 1974, the land vested in the Provincial Government. A portion thereof was transferred with possession, to the Industries Department for establishment of industrial area under Scheme No33 and the other portion was allotted to various Co operative Housing Societies.
4. On the pleadings of the parties, issues were framed on 11‑11‑1984. One of the issues framed was whether the suit property belonged to Government. Before any evidence was recorded in the suit; Khalil Ahmad plaintiff and Lila Ram defendant No.4 on 23‑9‑1985 jointly filed application under Order XXIII,, rule 3, C.P.C. for disposal of the suit in terms of the compromise reached between them. The application was allowed on 18‑11‑1985. The case was, however, adjourned to 23‑12‑1985 for further orders. The Deputy Commissioner concerned was summoned in Court for issuance of No‑Objection Certificate. It appears that the High Court did not attend to the question, that there existed dispute about the title of the vendor, as defendants Nos. 1 to 3 claimed that land in dispute belonged to the Government. The Deputy Commissioner, Karachi (East) appeared in Court on 23‑12‑1985 and stated that No‑Objection Certificate would be issued provided there was no obstacle in the way. He obtained report from the Mukhtiarkar Karachi (East) who reported that Lila Ram defendant No.4 did not apply for issuance of no -objection certificate for sale, of the suit property. Rao Shaker Naqshbandi Advocate learned counsel for the plaintiff wrote a letter to the Deputy Commissioner seeking communication of the final order passed in the matter in accordance with the direction of the High Court earlier made on 23‑12‑1985 in. the suit.
He further reported that the property in dispute belonged to Provincial Government. Neither Lila Ram nor Khalil Ahmed appeared before him to produce any document to establish ownership of the land. The Deputy Commissioner taking all these facts into consideration held vide his order dated 1‑4‑1986 that the property in dispute vested in the Provincial Government and declined to issue `No‑Objection Certificate' for sale of the land to the plaintiff.
5. Khalil Ahmed plaintiff challenged the aforesaid order of the Deputy Commissioner in the Sindh High Court through CMA No. 2347/1986 which was accepted on 3‑3‑1987 on the ground that the impugned order dated 1‑4‑1986, was passed by the Deputy Commissioner, without hearing the plaintiff, A direction was issued by the High Court to the Deputy Commissioner for service of fresh notice upon Khalil Ahmad and for decision of the question of `No‑Objection Certificate' as well as about the title of Lila Ram, in the property. The Deputy Commissioner fixed 4‑4‑1987, for appearance of Khalil Ahmed and Lila Ram before him with documents of title. It appears that neither Lila Ram nor Khalil Ahmad appeared before the Deputy Commissioner on 4‑41987, rather Khalil Ahmad challenged that order of the High Court through C.P.L.A. No. 167‑K/1987, which was dismissed on 20‑9‑1988, by this Court.
6. Even after service of Lila Ram and Khalil Ahmad respondents, through their counsel and on their failure to establish their identity and authenticity of the documents of title before the Deputy Commissioner, the appellants on 11‑7‑1989, filed application under section 12 (2) read with section 151, C.P.C. in the Sindh High Court, for setting aside the judgment and decree dated 23‑12‑1985, obtained by fraud and misrepresentation. Objection was raised on behalf of the respondents that the application under section 12 (2),C.P.C. was barred by time as envisaged under Article 181 of the Limitation Act, which provided period of three years to be reckoned from 23‑12‑1985, when right to sue accrued. The learned Single Judge of the Sindh High Court on 30‑10‑1990, upheld the objection and dismissed the application. The appellants filed H.CA. No.4 of 1991 against that judgment which also failed on 16‑12‑1991, before the Division Bench of the same Court, on the same ground that the application was barred by time.
7. Leave to appeal seas granted by this Court on 7‑4‑1992, to consider the contention,. that application under section 12 (2), C.P.C. should not have been dismissed on the ground of limitation as where decree was obtained by fraud, question of limitation for setting aside the same, would not arise, as also the entire case was not examined in its correct perspective which resulted in grave miscarriage of justice.
8. The case of the appellants was that the suit property originally belonged to Lila Ram an evacuee owner. On his migration to India, it w‑C treated as an Evacuee property by the Rehabilitation/Settlement Department and constituted part of compensation pool. The Chief Settlement Commissioner, vide notification dated 11‑2‑1966, published in the West Pakistan Gazette on 18‑3‑1966, declared the; property as building site. On repeal of the Evacuee Laws with effect from 1‑7‑1974, this property vested in the Provincial Government of Sindh and a portion thereof was transferred in 1982, to Industries Department and the rest allotted to Co‑operative Housing Societies. The property vested in the Provincial Government which could not be validly sold by a fake person in favour of Khalil Ahmad. The agreement itself, being forged and unlawful could not be enforced nor a valid decree in respect thereto passed. The so‑called compromise reached betweenKhalil Ahmad and Lila Ram could not bind the appellants, who were neither signatories nor the same was executed with their consent. The decree passed without impleading the transferees as defendants in the suit being void no period of limitation would run against them.
Mr. Muhammad Sharif, Advocate, learned counsel for the respondents submitted that the application under section 12 (2), C.P.C. is regulated by Article 181 of the Limitation Act which provides period of three years for filing the application. The decree dated 23‑12‑1985 assailed through application under section 12 (2) read with section 151, C.P.C. on 11‑7‑1989, was time barred and rightly rejected as such by the Sindh High Court. Learned counsel cited Mst. Nigar. Bibi and others v. Salahuddin and others (PLD 1990 SC 76), Mst. Amutul Kabir and others v. Sara Khatoon and others (1991 SCMR 1022), Muhammad Iqbal v. Muhammad Almgir (1990 SCMR 1377), in support of his submission.
It was further contended that the provisions of Limitation Act are to be construed strictly, though they may create hardship in certain cases. Reliance was placed on M/s. Commerce Bank Ltd., Karachi v. M/s. Sarfaraz Autos, Karachi and another (PLD 1976 Karachi 973), Nagendra Nath Dey and another v. Suresh Chandra Dey and others (AIR 1932 PC 165) and General Accident Fire and Life Assurance Corporation Ltd. v. Janmahomed Abdul Rahim (AIR 1941 PC 6).
It was also submitted that the Court is under legal obligation to decide the point of limitation even if it is not raised by the contending parties. Learned counsel referred to Pakistan Railways v. Ghulam Sarwar (1989 SCMR 864), Ahsan Ali and others v. District Judge and others (PLD 1959 SC 167) and Rahim Bakhsh v. Muhammad Baksh and others (PLD 1376 Lahore 686), in this regard.
Learned counsel next contended that law of limitation applies even to orders which are illegal or voidable and relied on Divisional Superintendent Pakistan Railways, Lahore v. Labour Court No.VI, Hyderabad and others (PLD 1979 Karachi 443), The Chairman, District Screening Committee and another v. Sharif Ahmad Hashmi (PLD 1976 SC 258) and V.R. Mall v. Sh. Muhammad Yusuf and another (PLD 1975 Lahore 825), in this behalf.
The perusal of the documents on the record, makes it abundantly clear that Khahlil Ahmad plaintiff in collusion with so‑called defendant No.4, fabricated agreement dated 29‑1‑1983, for sale of the suit property vested in the Provincial Government of Sindh, without knowledge of the latter. On 15‑7‑1984, the plaintiff sought enforcement of the aforementioned agreement, through a regular suit, the defendant No.4 substantially admitted the claim of the plaintiff. On objection raised by the representatives of the Government an issue was also framed on 11‑11‑1984, as to whether the suit property belonged to Government. It appears that in order to frustrate the determination of that issue a joint application was moved by the plaintiff and so‑called defendant No.4 on 23‑9‑1985, for disposal of the suit through compromise.
The suit was decreed on 23‑12‑1985, without notice and presence of the transferee‑owners of the property and even without obtaining express consent or signatures of the appellants on the application for compromise. The very agreement made by plaintiff with so‑called defendant No.4 relating to landed property owned by the Government was fraudulent. It was unlawful and void as envisaged by section 23 of the Contract Act. Section 23 ibid reads:‑---
"What considerations and objects are lawful and what not. The consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, it would defeat the', provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void."
All actions taken on the basis of the void agreement, including the decree passed on 23‑12‑1985, were nullity and no bar of limitation can be pleaded for setting aside the decree.
The impugned decree was passed without hearing and notice to transferree owners whose presence was essential before the Court, as also the C decree was passed without express consent and signatures of the representatives of the Government on the compromise application, the decree was nullity and no question of limitation would arise.
In Mst. Rehmat Bibi and others v. Punnu Khan and others (1986 SCMR 962); this Court held:‑---
"We find that in the High Court the learned Judge has placed reliance on a number of precedent cases, including Allah Dino v. Faqir Muhammad and another (PLD 1969 SC 582), for the proposition that if an impugned order has been passed without hearing and notice to a party whose presence is otherwise necessary before the authorities concerned, then the order will be a nullity in the eye of law, and no question of limitation would arise. Mr. Abdur Rashid was not in a position to controvert this proposition of law by reference to any authority or pronouncement of this Court or even of the High Court. It would appear, therefore, that the Courts below were justified in deciding the question of limitation in favour of the respondent."
'' In Malik Khawaja Muhammad and others v. Marduman Babar Kahol and others (1987 SCMR 1543), this Court approved the finding of the High Court, wherein it was held that where the necessary parties in the case, were condemned unheard any order or decree passed against them would be nullity, and no period of limitation would run against them.
In Syed Nazir Hussain v. Settlement Commissioner (PLD 1974 Lahore 434) the learned Judge of the Lahore High Court relying on the dictum laid down by the Supreme Court in Muhammad Aslam Zia's case (PLD 1958 SC 104) held:
"And if on the basis of void order subsequent orders have been passed either by the same authority or by other authorities, the whole series of such orders, together with the superstructure of rights and obligations built upon them must unless some statute or principle of law recognizing as legal the changed position of the parties is in operation, fall to the ground because such orders have as little legal foundation as the void order on which they are founded."
In this view of the matter, avoid order will have no value whatever and is simply to be ignored and consequently no question of limitation will aria against such an order."
Similarly in Hussain Bakhsh and others v. Settlement Commissioner and another (PLD 1969 Lahore 1039), a Division Bench of the Lahore High Court after referring to the cases Yousaf Ali v. Muhammad Aslam Zia and others (PLD 1958 SC 104), Ch. Altaf Hussain and others v. The Chief Settlement Commissioner and others (PLD 1965 SC 68) and Syed Ali Abbas and others v. Vishan Singh and others (PLD 1967 SC 294) held:
"It will be seen that in all these cases the, principle has been clearly laid down that if an order is without jurisdiction and void, then it need not be formally set aside, and no question would, therefore, arise of holding that the matter cannot be considered on merits on account of any bar of limitation."
It is true that the provisions of the Limitation Act are to be construed strictly, though they may create hardship in certain cases, as also that the Court is under legal obligation to decide the point of limitation even if not raised by the contending parties, nevertheless, where parties to an agreement deceitfully agreed to transfer property owned by a third party without latter's knowledge the agreement being fraudulent and void, no bar of limitation can successfully be pleaded against the aggrieved party.
Even if Article 181 of the Limitation Act applied to the applications under section 12 (2), C.P.C. as held by this Court in the precedents cited above, the appellants being Government functionaries, appear to have become definite about the commission of the fraud only on 4‑4‑1987, when on the basis of investigation conducted by Mukhtiarkar concerned, it transpired that the entire transaction was outcome of fraud engineered by Khalil Ahmad in collusion with some fake person, who failed to appear before the Deputy Commissioner, on that date, despite a direction issued by the High Court, and failed to establish his identity despite opportunities provided to him. He was not found residing on the given address, whereupon the appellants on 11‑7 1989, filed application under section 12 (2), C.P.C. read with section 151, C.P.C, for recall of the decree fraudulently obtained by the respondents. 7 he application was filed within a period of three years and thus was within time, the decisions of the learned Judges to the contrary, on that score are also untenable.
It appears, that learned trial Court, overlooked the pleadings of the parties, the issues framed and the contents of the application for compromise in the light of the provisions of
Order XXIII, rule 3, C.P.C. and section 23 of the Contract Act, before decreeing the suit, otherwise it would have come to its notice that the agreement itself was void and no effective decree touching the property of third party could have been passed. In fact the impugned decree nullified the effect of the orders of the public authorities earlier passed in respect thereto, for instance on the migration of evacuee owner, the treatment of the land in dispute as evacuee property, its notification as building site by the Chief Settlement Commissioner, after repeal of Evacuee Laws the property having vested in the Provincial Government and its transfer to various agencies were actions taken by the public authorities in discharge of their functions. These actions could not have been set at naught in collateral proceedings rather the courts were under legal obligation to explore every possible explanation for their validity. In this regard it was held in The Chairman, East Pakistan Railway v. Abdul Majid Sardar (PLD 1966 SC 725) and Lahore Improvement Trust v. The Custodian, Evacuee Property and others (PLD 1971 SC 811) that the acts performed and orders made by public authorities, deserve due regard by the courts and every possible explanation for the validity should be explored.
Lastly, we are conscious of the general principle that fraud vitiates even the most solemn proceedings and that the courts of general jurisdiction are competent to suo motu recall decrees obtained from it by fraud, as held in Chief Settlement Commissioner v. Muhammad Fazil (PLD 1975 SC 331) and ordinarily we would have remanded the case to the trial Court, for further proceedings, in the matter, but as the claim of the plaintiff is fraudulent which is apparent from the record, the remand of the case in our view would be sheer wastage of time and merely an exercise in futility.
For the foregoing reasons, we accept this appeal set aside the impugned judgments and decrees passed by the learned Judge of the Sindh High Court and dismiss plaintiff's suit with costs throughout.
M.BA./G‑450/S Appeal allowed
