-Time during which another civil proceeding was being prosecuted with due diligence against the same party for the same relief in good faith, in a Court which for defect of the jurisdiction or other cause of alike nature was unable to entertain it, can be excluded-

 PLJ 2010 SC 570

Limitation Act, 1908 (IX of 1908)--

----S. 14--Object of--Bar of limitation, to a person who honestly did his best to get his case tried on merits but failed because the Court was unable to give him such a trial--Time during which another civil proceeding was being prosecuted with due diligence against the same party for the same relief in good faith, in a Court which for defect of the jurisdiction or other cause of alike nature was unable to entertain it, can be excluded--Section 14 of the Act comes into play if the following conditions are fulfilled: (a) that the plaintiff had been prosecuting another civil proceeding against the defendant (b) that he had been prosecuting it with due diligence, (c) that the present proceeding is founded upon the same cause of action (d) that it was prosecuted in good faith (e) that it did not bear fruit because the Court was unable to entertain it due to defect of jurisdiction or other cause of alike nature--Appeal allowed. [P. 574] A

Mr. Akhtar Masood Khan, ASC for Appellant (in both cases).

Mr. Ghulam Hussain Awan, ASC for Respondent (in both cases).

Date of hearing: 1.7.2009.

 PLJ 2010 SC 570

[Appellate Jurisdiction]

Present: M. Javed Buttar and Sardar Muhammad Aslam, JJ.

MUHAMMAD KHAN--Appellant

versus

SALEHUN alias SALEH MUHAMMAD--Respondent

Civil Appeal Nos. 1177-1178 of 2003, decided on 1.7.2009.

(On appeal from the judgments dated 6.11.2002 of the Lahore High Court, Lahore passed in RSA No. 13/99 and S.R. 313-D of 1999).

Judgment

M. Javed Buttar, J.--These appeals, by leave, are directed against the judgment dated 06.11.2002 passed by an Hon'ble Judge in Chambers of Lahore High Court, Lahore, whereby RSA No. 13 of 1999 and Civil Revision No. 313-D of 1999 both filed by the appellant were dismissed. The leave to appeal in both the petitions was granted by this Court on 10.06.2003. The leave granting order describes the relevant facts and the issues involved with brevity and for convenience sake the same is re-produced below:--

"By this common judgment, we propose to decide both these petitions involving identical questions of law and facts.

2. The respondent on 8.8.1988 filed suit for specific performance of agreement of sale dated 13.12.1976 allegedly executed by the petitioner in his favour regarding sale of land for an amount of Rs.50,000/- out of which an amount of Rs.44000/- was shown to have been allegedly paid as earnest money at the time of alleged execution thereof. It was contested by the petitioner on merits and on the ground of limitation as well. The petitioner filed counter suit for recovery of possession of the land in dispute which was consolidated with the said suit filed by the respondent for specific performance of agreement.

3. Before filing the suit, the respondent on 31.1.1977 filed an application for making an award rule of the Court which was obtained by him from an arbitrator allegedly appointed to resolve the dispute of sale of land in dispute. It was contested by the petitioner on the ground that apart from the fact that there was no arbitration agreement, the agreement of sale dated 13.12.1976 in relation to which the said award was obtained, was also forged document. This plea was accepted by the Court and the said application dismissed through order dated 21.6.1981 against which appeal filed by him dismissed on 22.3.1984. The respondent approached the High Court by filing revision petition which was also dismissed on 24.4.1984 against which he filed civil petition for leave to appeal before this Court which was dismissed through judgment dated 10.7.1988 with the observation that as regards finding that agreement of sale was a forged document should not have been recorded in these proceedings, therefore, the respondent may if so wanted seek remedy on the basis of the said agreement of sale. It was in these circumstances that on 8.8.1988, he filed suit for specific performance of the said agreement of sale.

4. Both the suits were consolidated by the trial Court and consolidated issues were framed on 11.5.1992. Initially, Issue No. 3 pertaining to limitation was ordered to be tried as preliminary issue but subsequently the trial Court decided to record evidence on the other issues also and thereafter to decide the case as a whole. The evidence of the respondent-plaintiff was concluded on 18.10.1993. After availing two/three opportunities, the petitioner did not produce evidence, therefore, his evidence was closed on 19.1.1994 and the suit of the respondent of specific performance was decreed by the trial Court on 27.1.1994 whereas the counter suit filed by the petitioner for possession of land was dismissed. Two appeals filed by the petitioner were dismissed by the first appellate Court through judgment dated 5.12.1998 against which he filed regular second appeal in the suit of specific performance and a revision petition in the suit filed by him for possession of the land. Both of them have been dismissed through the consolidated impugned judgment dated 6.11.2002 against which leave is sought.

5. Learned counsel for the petitioner, inter alia, contended:--

(a)   that issue of limitation, has not been correctly decided in accordance with law, for all the Courts below had mechanically proceeded on the assumption as if the observation made by this Court in the judgment dated 10.7.1988 that the petitioner could seek remedy of specific performance of agreement did constitute an expression of opinion or a decision about condonation of delay in filing the suit whereas the question of limitation should have been decided independently keeping in view the facts and circumstances of the case;

(b)   that Section 14 of the Limitation Act has not been properly construed and applied in its true perspective and terms and on relevant consideration inasmuch as the previous proceedings initiated by the respondent under the garb of an arbitration agreement suffered from malafides and was an attempt to indirectly by under hand means to get a decision could not be held by any stretch of imagination or law to be proceedings prosecuted in good faith;

(c)   that even if the evidence of the petitioner had been closed but the certified copies of the proceedings in the previous arbitration matter were produced in evidence as Exh. D1 to Exh. D4 in which a finding had been recorded that there was no arbitration agreement but the Courts below did not apply their mind to this aspect of the case that the respondent was not prosecuting the said case bonafidely in good faith.

6. The points raised by the learned counsel for the petitioner, inter alia, deserve examination, therefore, we grant leave in both these petitions to consider the same.

7. Till the disposal of the appeals', the respondent is hereby restrained from getting the mutation sanctioned in the revenue record on the basis of the decree of specific performance of agreement of sale passed by the Courts below and execution proceedings in pursuance thereof are hereby stayed."

2.  We have heard learned counsel for the parties and have also seen the available record with their able assistance. Learned counsel for the appellant while reiterating the submissions recorded in the leave granting order (reproduced above), additionally contended that under Section 14 of The Limitation Act, 1908 time spent in the wrong forum can be excluded if the said forum has jurisdictional defect but it cannot be excluded if the form of suit was wrong or the relief sought was altogether different.

3.  On the other hand, learned counsel for the respondent while vehemently opposing the appeals, has submitted that the arbitration proceedings were started on 31.01.1977 i.e. before the target date for the completion of the agreement which was 20.03.1977, that the present suit was filed soon after the conclusion of the proceedings from the Supreme Court of Pakistan in the arbitration case, that under Section 14 of the Limitation Act, 1908, the time spent in judicial proceedings on the same cause of action has to be excluded, that arbitration proceedings were initiated in good faith and the respondent perused the arbitration proceedings with due diligence under a bonafide mistake of law. He has also placed his reliance on Abdul Majid and others vs. Mst. Zubeda Begum and others (2007 SCMR 866).

4.  The respondent filed the suit on 08.08.1988 for specific performance of alleged agreement to sell dated 13.12.1976. Apparently the suit was grossly barred by time and if the time spent by him in the arbitration proceedings i.e. from 31.01.1977 when he filed an application for making an award rule of the Court till 10.07.1988 when the Civil Petition for leave to appeal filed by him was disposed of by this Court, is not excluded then his suit would be liable to be dismissed as being grossly barred by time.

5.  The issue of limitation was not decided correctly in accordance with law which was required to be decided keeping in view the facts and circumstances of the case. Courts below proceeded on the wrong assumption. In the judgment dated 10.07.1988 Civil Petition for Leave to Appeal No. 590 of 1984 filed by respondent was converted into an appeal, on the same day (C.A. No. 266/1988) and was partly allowed only to the extent that findings recorded in the arbitration proceedings on the existence or non-existence of the agreement will not prejudice the respondent in any proceedings which the respondent may initiate for the enforcement of the said agreement. No observation whatever was made by this Court in regard to the issue of limitation which was likely to crop up in the subsequent proceedings to be initiated by the respondent. Therefore, in the present suit for specific performance instituted by the respondent, the issue of limitation had to be decided on its own merit.

6.  In our opinion, no justifiable reasons existed for excluding time spent by the respondent in arbitration proceedings before different forums including this Court. The previous proceedings initiated by the respondent under the garb of an arbitration agreement cannot be held to be prosecuted in good faith. It was held that there was no arbitration agreement and the alleged arbitration award produced by the respondent for making the same rule of the Court was declared to be a forged document. The said proceedings, therefore, suffered from malafide or bad faith and the respondent cannot be allowed a premium for the same by extending him the time spent in the said proceedings. The documents Exhs. D1 to D4 established the findings recorded in the arbitration proceedings that there was no arbitration agreement. The Courts below, therefore, failed to apply their mind that the respondent was not prosecuting the said case bonafidely in good faith. Furthermore, the earlier proceedings under the Arbitration Act had not terminated on account of the jurisdictional defect or other cause of alike nature, therefore, for this reason also the provisions of Section 14 of the Limitation Act, 1908 were not attracted. It may also be mentioned here, that in the impugned judgment also it has been held towards the end that the said provision "has no relevance to the proposition in hand, because earlier proceedings under the Arbitration Act, had not terminated on account of the jurisdictional flaw".

Object of Section 14 of the Limitation Act, 1908 is to provide protection against the bar of limitation, to a person who honestly did his best to get his case tried on merits but failed because the Court was unable to give him such a trial. It envisages that the time during which another civil proceeding was being prosecuted with due diligence against the same party for the same relief in good faith, in a Court which for defect of the jurisdiction or other cause of alike nature was unable to entertain it, can be excluded. Section 14 of the Act comes into play if the following conditions are fulfilled: (a) that the plaintiff had been prosecuting another civil proceeding against the defendant; (b) that he had been prosecuting it with due diligence; (c) that the present proceeding is founded upon the same cause of action; (d) that it was prosecuted in good faith; and (e) that it did not bear fruit because the Court was unable to entertain it due to defect of jurisdiction or other cause of alike nature. The conditions (c), (d) and (e) are not satisfied in the present case.

7.  The judgment of this Court cited by learned counsel for the respondent is distinguishable and is not applicable to the facts and circumstances of the present case.

In view of the above mentioned, both the appeals are allowed with costs throughout, the judgments and decrees passed by the Courts below are set aside, the suit filed by the respondent is dismissed as being grossly barred by time and the suit for possession filed by the appellant is decreed.

(M.S.A.)    Appeals allowed.