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2007 C L C 1089

[Lahore]

Before Muhammad Akhtar Shabbir and Maulvi Anwarul Haq, JJ

IQBAL AHMAD SABRI----Appellant

Versus

FAYYAZ AHMAD and another----Respondents

Regular First Appeals Nos.127 and 128 of 2005, heard on 18th January, 2007.

(a) Qanun-e-Shahadat (10 of 1984)---

----Arts. 81 & 95---Power of attorney---Authenticity---Scope---Authenticity is not merely


attestation but something more---Person authenticating has to assume himself of the
identity of person, who has signed instrument as well as the fact of execution---Power of
attorney bearing authentication of notary public or any authority mentioned in Art.95 of
Qanun-e-Shahadat, 1984, is sufficient evidence of execution of instrument by the person,
who appears to be the executant on face of it---Provision of Art.95 of Qanun-e-Shahadat,
1984, is mandatory and it is open to the court to presume that all necessary requirements
for proper execution of power of attorney have been duly fulfilled---Where a purported
power of attorney has actually been acted upon but does not qualify for presumption
under Art.95 of Qanun-e-Shahadat, 1984, those who seek to rely upon it or are allegedly
affected thereby may resort to due modes of its proof, which may include examination of
its attesting witnesses---If donor of power or its executant himself/herself admits
execution of power of attorney, none of such modes would be necessary---In such an
event, principle underlying Art.81 of Qanun-e-Shahadat, 1984, would become applicable
and admission of executant would be sufficient proof of execution as against himself or
herself.

Wali Muhammad Chaudhry v. Jamaluddin Chaudhri AIR 1950 All. 534, Jugrej Singh and
another v. Jaswant Singh AIR 1971 SC 761; Right Society v. Indian Morning Restaurant
AIR 1939 Born. 347; ANZ Grindlays Bank Ltd. v. Saadi Cement Company Ltd. PLD
2001 Kar. 143 and Ziauddin Siddiqui's case 1990 CLC 645 rel.

(b) Civil Procedure Code (V of 1908)---

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----O. VIII, Rr. 3 & 5---Written statement---Denial---Not sufficient under O.VIII, R.3,
C.P.C. for defendant in his statement to deny generally the grounds alleged by plaintiff---
Defendant must deal specifically with each allegation of fact which he does not admit to
be true, except damages---Every allegation of fact in plaint, if not denied specifically or
by necessary implication or stated to be not admitted in pleadings, under O.VIII, R.5,
C.P.C. it is taken to be admitted except as against a person under disability.

Inam Naqashband v. Haji Shaikh Ijaz Ahmad PLD 1995 SC 314; National Bank of
Pakistan v. General Tractor and Machinery Co. Ltd. 1996 CLC 79; 1999 SCMR 2633 and
2003 SCMR 1864 rel.

(c) Specific Relief Act (1 of 1877)---

----S. 12---Qanun-e-Shahadat (10 of 1984), Arts.81 & 95---Agreement to sell---Proof---


Principal and agent---Plaintiff entered into agreement to sell through general power of
attorney of the owner and had received earnest money---Owner of suit property did not
deny execution of the power of attorney but denied execution of sale-deed on the ground
that he had not received earnest money from the attorney---Trial Court decreed the suit in
favour of plaintiff---Validity---As per power conferred upon the attorney, he had received
advance money through cheque which was in the hands of attorney and had not been
encashed--Owner had neither denied the power of attorney nor agreement to sell---
Admitted documents need not to be proved in accordance with the provisions of Qanun-
e-Shahadat, 1984---Power of attorney executed in foreign country in the office of Vice-
Consulate General of Pakistan need not be proved in accordance with Qanun-e-Shahadat,
1984---Presumption of genuineness was attached to such document under Art.95 of
Qanun-e-Shahadat, 1984, which had not been denied specifically by the owner---Findings
of Trial Court were affirmed by High Court in exercise of appellate jurisdiction---Appeal
was dismissed in circumstances.

(d) Qanun-e-Shahadat (10 of 1984)---

----Arts. 95 & 103---Registered document---Presumption---Power of attorney executed


abroad---Effect---Oral evidence cannot be given preference over documentary
evidence---Documentary evidence particularly registered document carries presumption
of truth, which is covered within the provision of S.95 of Qanun-e-Shahadat, 1984---
Evidence with regard to power of attorney executed outside Pakistan and person or
witness holding such power of attorney even if not taken into consideration, then also
documents on record which have been admitted by both the parties substantiate the case
of party in whose favour those documents are.

Mst. Ghafooran Jan v. Muhammad Anwar Khan 2001 CLC 1332 and 1991 CLC 1950 rel.

Razzaq A. Mirza and Sardar M. Ashfaque for Appellant.

Sh. M. Khizar-ur-Rashid for Respondent.

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Date of hearing: 18th January, 2007.

JUDGMENT

MUHAMMAD AKHTAR SHABBIR, J.---This judgment will dispose of Regular First


Appeals Nos.127 and 128 of 2005 as both have arisen out of one and the same impugned
judgment.

2. Facts giving rise to the present R.F.As. are to the effect that plaintiff-respondent
Fayyaz Ahmad had filed a suit for Specific Performance of the agreement dated 21-5-
2003 executed between plaintiff and defendant No.1 through his attorney defendant No.2.
The plaintiff averred in the plaint that he had entered into a sale agreement on 21-5-2003
for the purchase of House No.11, Street No.78, Sector G/6-4, Islamabad (measuring 666
sq. yards) with defendant No.1, through defendant No.2 who being attorney of defendant
No.1 had signed the sale agreement. The sale consideration of the house had been settled
as 97,00,000 and the plaintiff paid Rs.4,00,000 as earnest money to-the defendants
through Cheque No.CD-30681 dated 21-5-2003 to be drawn from Union Bank
Islamabad. The receipt of the earnest money was also acknowledged in the sale
agreement. It was settled between the parties that remaining sale amount of Rs.93,50,000
will be paid within two and half months or at the time of transfer of the property in the
name of the plaintiff or his nominee. Fifteen days grace period was also provided.

3. The defendant instead of completing the agreement served a notice upon plaintiff on
12-6-2003, whereby he disagreed to sell the property in dispute and offered the plaintiff
to receive the earnest money. The plaintiff was ready to perform his part of contract to
make payment of the balance amount. The defendants were under legal obligations to
transfer the house in the name of the plaintiff. Now the plaintiff came to know that
defendants Nos.1 and 2 were planning to sell the suit house to some one else at a little bit
higher price. The plaintiff had approached defendant No.2, asking him to honour the
agreement executed between them but he was reluctant to do so. Hence this suit.

4. The suit was contested by defendant No.1, who filed his written statement. Defendant
No.2 had also filed his written statement separately wherein, in paragraph No.1 he
admitted that he being attorney of the owner/defendant No.1 with permission of original
owner, validly entered into an agreement with the plaintiff for sale of suit house.

5. The defendant No.1 has taken the stand that the suit agreement is without
consideration. Iqbal Ahmad Ansari defendant No.1-appellant had also filed a suit for
declaration and cancellation of documents and perpetual injunction against Fayyaz
Ahmad and another plaintiff contending that the plaintiff is owner of House No.11, Street
No.78, Sector G-6/4, Islamabad and defendant being collusive with each other has
prepared a document dated 6-5-2003 in which it has been shown that plaintiff has
authorized the defendant No.2 to negotiate the sale of the suit house for a consideration of
Rs.97,50,000 and to finalize the deal on plaintiff's behalf at Pak Rs.90,00,000 and to
receive advance amount not exceeding Rs.4,00,000.

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6. Both the suits were consolidated by the trial Court vide order, dated 6-1-2005 and from
the factual controversy appearing on the pleadings of the parties, the Couz, led to frame
the following issues:--

(1) Whether the plaintiff has no cause of action and locus standi to file the suit? OPD

(2) Whether the suit is barred by time? OPD

(3) Whether the suit is false, frivolous and vexatious, hence, the defendants are entitled to
the special costs under section 35-A of C.P.C.? OPD

(4) Whether the execution of the agreement to sell between the parties is illegal, void ab
initio and liable to be cancelled? OPD

(5) Whether the agreement is without consideration. If so, its effect? OPD

(6) Whether the plaintiff is entitled to the specific performance of the agreement, dated
21-5-2003? OPP

(7) Whether the plaintiff of suit titled Iqbal Ahmad Sabri v. Fayyaz Ahmad etc. is entitled
to the relief as prayed in the plaint for the cancellation of documents i.e. Authority letter
and the agreement to sell? OPD

(8) Whether the plaintiff of suit titled Iqbal Ahmad Sabri v. Fayyaz Ahmed etc. is
estopped by his words and conduct to file the suit? OPP

(9) Relief.

7. After framing of issues the parties were directed to produce their respective evidence in
support of their claim and denial. The plaintiff Fayyaz Ahmad appeared in the Court as
his own witness as P.W.1. Muhammad Iqbal son of Manzur Khan appeared as P.W.2,
whereas Muhammad Masood son of Ch. Sher Muhammad appeared as P.W.3. The
plaintiff had also produced documentary evidence i.e. agreement to sell dated 21-5-2003
(Exh.P.1), original power of attorney (Exh.P.2), legal notice dated 12-6-2003 (Exh.P.3),
registered envelope (Exh.P.4), bank receipt (Exh.P.5), bill of telephone as mark "A" and
proclamation in daily Jang (Exh.P.6), while on the other hand Farhat Mehrnood Lodhi
son of Habib Ullah Khan Lodhi appeared as D.W.1. In documentary evidence copy of
power of attorney was also produced as Mark "A".

8. After recording and appreciating the evidence of the parties, the trial Court vide
impugned judgment and decree, dated 6-6-2005 decreed the suit of Fayyaz Ahmad
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plaintiff for specific performance of contract and dismissed the suit filed by the appellant
against Fayyaz Ahmad for declaration and cancellation of documents and perpetual
injunctions.

9. Learned counsel for the appellant has objected the observation made by the trial Court
on Issues Nos.4 and 5 vehemently. He has raised following objections:

(i) That the power of attorney (Exh.P.2) has not been registered in accordance with
Registration Act.

(ii) that the said power of attorney has not been proved in accordance with Qanun-e-
Shahadat Order, 1984.

(iii) That the alleged attorney Adnan Shabbir has not appeared to prove the said
document.

Further argued that agreement to sell (Exh.P.2) is not attested by two witnesses in
accordance with the provision of section 17 of Qanun-e-Shahadat Order. Further
submitted that documents (Exh.P.1) and (Exh.P.2) are inadmissible in evidence and no
finding on the basis of said documents can be given. Further added that said agreement to
sell is without consideration and the plaintiff-respondent No.1 is not entitled for the
decree for specific performance of the Contract.

10. On the other hand, learned counsel for the respondent No.1 has vehemently opposed
the arguments of learned counsel for the appellant contending that appellant has executed
the power of attorney in favour of his attorney Adnan Shabbir which was duly attested by
Vice-Consulate-General of Pakistan Toronto which is per se admissible document.
Further argued that the appellant has not specifically denied the execution of said
document. In his written statement he has only asserted that said agreement is without
consideration. Learned counsel further submitted that in the legal notice the execution of
the agreement to sell in dispute is admitted and the defendant-appellant offered to return
the earnest money, received from the plaintiff.

11. We have heard the learned counsel for the parties and perused the record.

12. Article 95 of the Qanun-e-Shahadat Order, 1984 gives presumption to power of


attorney which reads as under for ready reference:--

"Presumption as to power of attorney.--- The Court shall presume that every document
purporting to be a power of attorney, and to have been executed before, and authenticated
by, a notary public, or any Court, Judge, Magistrate, Pakistan Counsul or Vice-Counsul,
or representative of the Federal Government, was so executed and authenticated."

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The Power of attorney (Exh.P.2) had been executed by Iqbal Ahmad Sabri, defendant
No.1-appellant in foreign country Canada which is reproduced as under:--

To whom it may concern

I Iqbal Ahmad Sabri, Pakistani National ID Card No.101-28-316682 currently residing in


Toronto, Canada state the following:

(1) I am sole owner of the House No.11, Street 78, G-6/4, Islamabad Pakistan.

(2) I intend to sell the above mentioned property.

(3) I authorize Sayyed Adnan Shabbir (NID Card No.6110117714547) son of Sayed
Shabbir Hussain, resident of 52, Bazar Road, G-6/4, Islamabad Pakistan to negotiate the
sale of the property on my behalf.

(4) I authorize him to finalize the deal on my behalf at Pak Rs.90,00,000 (Rs.90 Lakhs)
and receive advance amount not exceeding Rs. four hundred thousand only
(Rs.4,00,000).

(5) I intend to come to Pakistan in next three to six months and will receive the remaining
amount myself and will transfer the above mentioned property in the name of the
purchaser.

Attested

Executant's signatures.

This power of attorney was presented before Vice-Counsul, Consulate General of


Pakistan Toronto, who had attested the same on 8-5-2003.

14. The presumption as to the authenticity and genuineness of power of attorney has been
attached under the provisions of Article 95 of Qanun-e-Shahadat Order that every
document purporting to be a power of attorney and to have been executed before the
authenticated by a Notary Public or any Court, Judge, Magistrate, British Counsel or
Vice-Counsel or representative of Federal Government, was so executed and
authenticated. The authentication is not merely attestation, but something more. It means
that the person authenticating has assumed himself of the identity of the person who has
signed the instrument as well as the fact of execution. It is for this reason that a power of
attorney bearing the authentication of notary public or an authority mentioned in Article
95 is taken as "sufficient", evidence of the execution of the instrument by the person, who
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appears to be the executant on face of it. This provision of Article 95 of Qanun-e-
Shahadat Order, 1984, is mandatory and it is open to the Court to presume that all the
necessary requirements for the proper execution of the power of attorney have been duly
fulfilled. In this context reference can be made to the cases of Wall. Muhammad
Chaudhry v. Jamaluddin Chaudhri AIR 1950 All. 534, Jugrej Singh and another v.
Jaswant Singh AIR 1971 SC'761 and Right Society v. Indian Morning Restaurant AIR
1939 Bom. 347.

15. In case of Jugrej Singh (supra) it had been observed by the Court that there was a
presumption of regularity of official act and the Court is satisfied that the authenticating
authority must have satisfied himself in the discharge of his duties that the person who
was executing it was the said person. The same view was also followed by the
Honourable Judge of Karachi High Court in ANZ Grindlays Bank Ltd. v. Saadi Cement
Company Ltd. PLD 2001 Kar. 143.

16. The burden to prove the Issues Nos.4 and 5 was on the appellant-defendant who
failed to discharge his duty to establish these issues. Where a purported power of attorney
has actually been acted upon but does not qualify for the presumption under Article 95 of
the Qanun-e-Shahadat Order, 1984, those, who seek to rely upon it or are, allegedly,
effected thereby may resort to due modes of its proof, which may include examination of
its attesting witnesses. None of this, however, would be necessary if the donor of the
power or its executant himself/herself admits its execution. In such an event the principle
underlying Article 81 of the Order would become applicable and the admission of the
executant shall be sufficient proof of execution as against himself or herself. Reliance in
this respect can be made to the case of Ziauddin Siddiqui reported as 1990 CLC 645.

17. In the case in hand (Exh.P.2) power of attorney had been executed by the appellant
which was attested by the Consulate-General of Pakistan Toronto and the appellant had
not denied the execution of said document. In paragraph No.2 of facts of his written
statement the appellant has asserted that the answering defendant has received nothing
and the suit agreement is without consideration and he nowhere stated or denied the
execution of power of attorney.

18. Order 8, rule 3, C.P.C. envisaged that it. shall not be sufficient for a defendant in his
written statement to deny generally the grounds alleged by the plaintiff, but the defendant
must deal specifically with each allegation of fact of which he does not admit the truth,
except c damages and Order 8, rule 5, C.P.C. further denotes that every allegation of fact
in the plaint if not denied specifically or by necessary implication, or stated to be not
admitted in the pleading of the defendant, shall be taken to be admitted except as against
a person under disability. In this context, reference can be made to the cases of Inam
Naqashband v. Haji Shaikh Ijaz Ahmad PLD 1995 SC 314, National Bank of Pakistan v.
General Tractor and Machinery Co. Ltd. 1996 CLC 79, 1999 SCMR 2633 and 2003
SCMR 1864.

19. During proceedings of the case, Iqbal Ahmad Sabri appellant had filed an application
on 30-3-2004, in paragraph No.2 of which, he had stated that the said sale agreement was
not approved by defendant No.1 as mentioned in the suit and the said cheque of
Rs.4,00,000 was never encashed only with this intention that defendant No.1 is not
willing to sell the said house and has decided to return to Pakistan along with his family
members for spending future calm life in Pakistan. It would mean that execution of
agreement as provided on Order 8, rule 5, C.P.C. has been admitted by the appellant. He
has also admitted the receipt of cheque of rupees four lacs in advance and to substantiate
this argument clause 4 of the power of attorney is reproduced as under:--
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"I authorize him to finalize the deal on my behalf at Pak Rs.90,00,000 (Rs. 90 Lakhs) and
receive advance amount not exceeding Rs.four hundred thousand only (Rs.4,00,000)."

20. As per power conferred on the attorney Adnan Shabbir he has received advance
money through cheque which is in the hands of the appellant-defendant, it has not been
encashed. The appellant has neither denied the power of attorney nor agreement to sell
and as per contents of the application he has not approved the same, so, admitted
documents need not to be proved in accordance with the provision of Qanun-e-Shahadat
Order, 1984.

21. The power of attorney was executed in foreign country in the office of Vice-
Consulate-General Pakistan in Toronto, it needs not to be proved in accordance with
Qanun-e-Shahadat Order, 1984. Firstly the presumption of genuineness is attached to
such document under Article 95 of the Order, secondly, it is admitted document and has
not been denied specifically by the appellant-defendant No. 1.

22. The most important feature of the case which cannot be ignored is that defendant
No.2/attorney had also filed his separate written statement who had admitted the
execution of power of attorney in his favour and in this respect paragraphs Nos.1 and 4 of
his written statement are reproduced as below:---

"(1) that para. No.1 is correct to the extent that the answering defendant being attorney of
the owner/defendant No.1 with permission of original owner, validly entered into an
agreement with the plaintiff for sale of the suit house.

(4) that para.4 is correct. The notice was served upon the plaintiff as subsequently, the
owner changed his mind. Therefore, the plaintiff was requested to receive the earnest
money back."

23. The legal notice, dated 12-6-2003 had been issued through the counsel of defendant
No.2 to respondent No.2, wherein, the execution of said power of attorney is admitted
and in paragraph No.2 of said notice it was further stated that owner of the
house/appellant had disagreed with the said agreement and is willing to return the earnest
money paid to him i.e. rupees four lacs from respondent No.1. The written statement of
defendant No.2/attorney, power of attorney (Exh.P.2) and legal notice (Exh.P.3) proved
the execution of power of attorney, the sale agreement. No specific plea as discussed
earlier has been raised, denying the execution of said document by the
appellant/defendant No.1. It means that the case of the plaintiff-respondent No.1 stands
proved.

24. Article 81 of Qanun-e-Shahadat Order, 1984, has provided admission of execution by


party to attest document --- The admission of a party to an attested document of its
execution by himself shall be sufficient proof of its execution as against him, though it be
a document required by law to be attested; and a document which is covered under
Article 95 of the Order and admitted by a party need not to be proved/attested as required

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by Qanun-e-Shahadat Order. Reliance in this regard can be made to case of Ziauddin
Siddiqui referred to above.

25. It was the duty of the appellant to appear in the Court and categorically rebut the
execution of power of attorney. He himself did not appear in Court and he had produced
only Farhat Mahmood Lodhi, his general attorney, who was not an eye-witness or the
attesting witness of these documents i.e. Exh.P.2 and Exh.P.3. No such evidence except
the sole statement of D.W.1 has been produced on record by the appellant to contradict
the documentary evidence of plaintiff-respondent No.1.

26. In the instant case, Article 113 of Qanun-e-Shahadat, 1984 would also come into play
and applicable to the case of respondent No.1, which enshrines as under:---

"113. Facts admitted need not be proved.---No fact need be proved in any proceeding
which the parties thereto or their agents agree to admit at the hearing, or which, before
the hearing, they agree to admit by any writing under their hands, or which by any rule or
pleading in force at the time they are deemed to have admitted by their pleadings."

27. It is settled law that oral evidence could not be given preference over documentary
evidence. The documentary evidence particularly registered document carries
presumption of truth which covers within the provision of Article 95 of Qanun-e-
Shahadat Order, 1984 as laid down in case of Mst. Ghafooran Jan v. Muhammad Anwar
Khan E 2001 CLC 1332.

28. An evidence with regard to power of attorney executed outside Pakistan and a person
or witness holding such power of attorney, even if not taken into consideration then also
documents on record which stood admitted by both the parties would substantiate the
case of the plaintiff while dilating upon the issue. In this respect reference can be made to
case of 1991 CLC 1950.

29. The appellant vendor-defendant No.1 has conferred authority on the attorney Syed
Adnan Shabbir defendant No.2, authorizing him to finalize the deal on his behalf at Pak
Rs.90;00,000 (Rupees 90 lakhs) and receive advance money not exceeding rupees four
hundred thousand only and under the authority given to him the said attorney had made
an agreement (Exh.P.1) with respondent No.1 under the same terms and conditions and
received Rs. four lacs in advance. He has made an agreement to sell only and not
executed the sale-deed. This agreement was admitted. The receipt of cheque amounting
to rupees four lacs is also admitted by the appellant in his application filed before the trial
Court for day to day proceedings. In paragraph No.2 of the application it was admitted by
the appellant that cheque of rupees four lacs has not been encashed it would mean that
cheque was with the appellant, though it was not presented for encashment. The stand of
the appellant that the agreement is without consideration is belied from his own
admission as well as by his attorney admission available on record.

30. Another important feature of the case is that the appellant-defendant No.1 has filed a
suit for cancellation of documents, challenging the vices of the same on the basis of his
pleadings. The Issues Nos.4 and 5 were settled and onus to prove these issues was laid on
the appellant-defendant No.1 who failed to prove these issues by producing sufficient and
convincing evidence while he produced only one witness D.W.1/Farhat Mahmood Lodhi.
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No other witness was produced to corroborate the statement of D.W.I. The sole statement
of D.W.1 to contradict the evidence of P. W.1 to P.W.3 as well as documentary evidence
Exh.P.1 to Exh.P.3, is not sufficient to discard the same. For the foregoing reasons, the
findings of learned trial Court on Issues Nos.4 and 5 are affirmed.

31. The agreement to sell had been executed on 21-5-2003 between the parties, whereby,
advance earnest money, amounting to rupees four lacs had been received by the attorney.
As per term No.3 of the agreement to sell the balance sale consideration a sum of
Rs.93,50,000 (Rupees ninety three lacs fifty thousand only) had to be paid to the vendor
within two and a half months at the time of transfer of above said property with fifteen
days grace period.

32. The legal notice was issued to the plaintiff-respondent offering him to receive earnest
money which gave him a cause of action on the said date and he then was constrained to
file the suit on 4-7-2003 while the limitation for filing the suit for specific performance of
the contract

has been provided in Article 113 of the Limitation Act, as three years, hence, it has
validly been filed within time. The appellant and his attorney issued a legal notice to the
plaintiff-respondent that he is disagreed with the sale agreement (Exh.P.1) and offered the
plaintiff to receive the earnest money and in case of failure, it was told that legal remedy
shall be availed of by the appellant under the law which gave right to the plaintiff to file
the instant suit, therefore, the plaintiff having a locus standi and cause of action filed the
instant suit. Thus, the findings of the trial Court on Issues Nos.1 and 2 are also affirmed.
No other objection/argument with regard to remaining issues has been raised by the
learned counsel for the appellant. In view of the above discussion, we find no substance
in these appeals, hence, dismissed. There shall be no order as to costs.

M.H./I-21/L Appeal dismissed.

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2009 C L D 1459

[Lahore]

Before Syed Hamid Ali Shah, J

UNITED BANK LIMITED---Plaintiff

Versus

NAEEM ULLAH MALIK and 2 others--Defendants

C.O.S. No.69 of 1999, decided on 15th April, 2009.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV
of 1997)---

----S. 2(e)---Finance---Definition---Banker and customer---Relationship of---Suit for


recovery of loan---Defendants shown as guarantors in the agreement had availed Clean
Over Draft Facility, Loan Against Trust Receipt, Local Bill Discounted Letter of Credit,
Payment Against Document and Letter of Guarantee---Such transactions pertained to
"finance" as defined in S.2(e), Banking Companies (Recovery of Loans, Advances,
Credits and Finances) Act, 1997 and created "Banker and Customer" relationship-
Transactions inter se the parties and also the subject-matter of the agreement fell within
the ambit of definition "finance" as defined in S.2(e) of the Act.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 2(a) & (7)---Banking Companies (Recovery of Loans, Advances, Credits and
Finances), Act (XV of 1997), Ss.2(a) & 7---"Financial Institution"---"Banking
Company"---Suit for recovery of loan---Plaintiff was a Banking company and transacted
the banking business---"Financial Institution" which transacted banking business was the
"Banking Company" within the meanings of S.2(a) of the Financial Institutions
(Recovery of Finances) Ordinance, 2001-Plaintiff ff was banker and defendants were
customers---Default of the defendants in payment of the outstanding amount was non
fulfilment of obligation---Subject-matter, therefore, exclusively fell within the
jurisdiction of Banking Court-No other court except Banking Court, constituted under S.7
of the Financial Institutions (Recovery of Finances) Ordinance, 2001, had jurisdiction
over the parties and the subject-matter.

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(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 7---Suit for recovery of loan by Bank---Foreign Courts had decided the matter and
held the defendant company and its Directors liable for the payment of amount due with
interest---Territorial jurisdiction---Whether judgments of foreign courts were conclusive
and binding---Plaintiff. on having established its claim against the defendants before
court of first instance and also Appellate Court in the foreign country, filed suit under the
provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances)
Act, 1997 (now repealed) for the amount due and with interest in Pakistan currency of the
equivalent value---Plaintiff had contended that High Court had the jurisdiction, over the
matter and a decree on the basis of foreign decree/judgment could be passed---Validity---
Foreign Court, in the present case, after considering whole evidence and after its due
appraisal, had passed the decree---Said judgments were delivered by Court of competent
jurisdiction, on merits of the case and founded on correct view of law .applicable---
Judgments of the foreign courts did not breach any law in force in Pakistan and did not
offend the principles of natural justice---Said judgments, were conclusive and binding---
One of the defendants on his return from abroad was residing within the jurisdiction of
High Court---Other defendants were also residing, working for gain and carrying the
business within the jurisdiction of High Court--Plaintiff Bank had its regional office and
relevant record of the present controversy had been summoned from abroad by the
Plaintiff ff and the same was now in custody of the plaintiffs officials in its regional
office---High Court having considered various aspects of the present controversy and
having gone through the record had held that High Court had the jurisdiction over the
subject-matter and the parties had territorial jurisdiction---Suit, in circumstances, was
competently filed in the High Court and did not suffer from any jurisdictional flaw---Suit
having been decreed and finding of High Court regarding the merits of the case were
affirmed and upheld in appeal---Question of jurisdiction had been decided in favour of
the plaintiff---Decree for the sum due in foreign country or the Pak Rupees equivalent
thereof at the time of payment along with interest and other charges from the specified
date till the date of realization of the whole amount was, therefore, passed against
defendant, who would be jointly and severally liable for satisfaction of the decree, with
other judgment-debtors---Costs of the suit and costs of funds were also allowed to the
decree-holder/Bank---Failure of the defendants to satisfy the decree within a period of
one month from the date of present order would result into execution of decree forthwith,
without the need of a formal application for execution of the decree.

Messrs Kadir Motors (Regd.), Rawalpindi v. Messrs National Motors Ltd., Karachi and 3
others 1992 SCMR 1174 and T. Zubair Limited and 2 others v. Judge, Banking Court
No.III, Lahore and another 2000 CLC 1405 ref.

Habib Bank Ltd. v. Messrs Virk House Trading company Ltd. 2009 CLD 451 fol.

Ali Zafar Syed for Plaintiff.

Defendants ex Parte.

Date of hearing: 6th June, 2008.

12 of 1
JUDGMENT

SYED HAMID ALI SHAH, J.---This suit has been instituted by the plaintiff through it's
regional office at Lahore, in respect of various financial facilities accorded to defendant
No.3, amounting to Dhs 11800,542.00. Defendants Nos. 1 and 2 furnished their personal
guarantees. Defendant committed default in repayment of the outstanding amount. The
defendant, however, arranged payment of Dhs 468500 by way of 3 cheques, issued by
Hajvairy Textile Ltd. through Mouiz Sultan Awan. The cheques, when presented for
encashment were not paid and legal proceedings for overdue amounts were initiated
before the Court of first instance at Dubai. Learned Court vide order dated 22-9-1996
decided the matter, held the defendant company and it's directors liable for the payment
of 11,800,542.00 Dhs with interest at 9% per annum. Hajvairy Textile Ltd. and Mouz
Sultan, were absolved of liability towards plaintiff bank. The plaintiff assailed the order
in appeal before Appellate Court in Dubai, which was accepted vide order dated 25-5-
1998, whereby Hajvairy Textile Ltd. and Mouiz Sultan Awan were also held liable for
value of unpaid cheques.

2. The plaintiff, on having established it's claim against the defendants before Court of
First Instance and also in Dubai Court of Appeal, filed instant suit, under the provisions
of Act, 1997 (now repealed) for recovery of Dhs 11,800,542.00 as on 30-9-1995 along
with interest at the rate of 9% per annum or the amount in Pak rupees of the equivalent
value. Defendants' non-appearance and failure to file application for leave to defend,
resulted into an ex parte judgment. The suit was decreed vide judgment and decree dated
2-11-1999 in favour of the plaintiff bank and against all the defendants. Subsequently,
defendant No.1 entered appearance, filed application for setting aside the decree and on
acceptance of his application the decree was set aside to his extent and defendant No.1
was allowed to file application for leave to defend the suit. Consequent upon refusal of
the application to defend the suit, the suit was decreed against defendant No.1 as well,
vide judgment and decree dated 28-1-2002. Defendant No.1, assailed the judgment and
decree in appeal (R.F.A. No.170 of 2003) which was partly allowed and the case was
remanded vide judgment dated 30-4-2006, to this Court, for decision afresh on the issue
of jurisdiction in view of objections raised by the appellant/ defendant No.1. In the post
remand proceedings, defendant No.1, stayed away from proceedings and despite
substituted service through citation in Daily "Dawn" in it's print dated 11-4-2008, none
appeared on behalf of defendant No.1 Defendant No. 1 was proceeded against ex parte
through order dated 23-4-2008.

3. Learned counsel for the plaintiff has submitted that a "Banking Company" as defined
in Banking Companies (Recovery of Loans, Advances, Credits and Finance) Act, 1997
means a company whether incorporated within or beyond Pakistan, which transacts the
banking business. He added that a "Financial Institution" within the meaning of section
2(a) of Ordinance, 2001, is any company incorporated within or out-side Pakistan, which
transacts the banking business in Pakistan through it's branches within and outside
Pakistan. Having gone through the definitions from Statute Books, learned counsel
contended that Dubai branch of U.B.L, is a banking company and default in fulfilment of
any obligation, can be adjudicated by the Banking Court, established under the relevant
law. Learned counsel then contended that instant suit was filed against the defendants on
the basis of the decree of the Court of First Instance Dubai, which was affirmed and
upheld by Dubai Court of Appeal. Defendants' failure to satisfy the foreign judgment and
decree of the Court of competent jurisdiction, gives cause to the plaintiff to institute
instant suit against the defendants. The suit is based upon the foreign judgment and
relevant facts are mentioned in paras. 20 and 21 of the plaint. The plaintiff in para. 22 of
the plaint has asserted that cause of action has accrued on 22-9-2006, when the
defendants failed to pay the decretal amount. Learned counsel went on to argue that this
Court has the jurisdiction to pass the decree on the basis of foreign judgment. Learned
13 of 1
counsel relied upon the cases of Messrs Kadir Motors (Regd.); Rawalpindi v. Messrs
National, Motors Ltd., Karachi and 3 others 1992 SCMR 1174 and T. Zubair Ltd. and 2
others v. Judge, Banking Court No.III, Lahore and another 2000 CLC 1405. Learned
counsel has emphasized that a decree on the basis of foreign decree/judgment can be
passed. The only restraint in this regard is the exceptions mentioned in section 13 of
C.P.C.

4. Heard learned counsel for the plaintiff and record perused.

5. Defendant No.1 (Mr. Naeem Ullah Malik) assailed judgment and decree dated 13-1-
2002 in appeal. The appeal was 'accepted and the decree of this Court was partially set
aside. Defendant No.1 in the post remand proceedings absented himself. His counsel Mr.
Abid Aziz Sheikh, Advocate with permission of this Court, vide order dated 26-10-2007,
withdrew his power of attorney for want of instructions. Notices were issued on the last
known address' of defendant No.1 and then the service upon the said defendant was
effected through citation in daily "Dawn" in it's print dated 11-4-2008. The defendant was
proceeded against ex parte on 23-4-2008.

6. The appellate Court in it's judgment dated 3-4-2006 passed in R.F.A. No.170 of 2003,
observed that a judgment based on foreign cause of action, has to be viewed from three-
necessary jurisdictional aspects i.e. jurisdiction over subject matter, jurisdiction over
parties and. territorial jurisdiction. The Honourable appellate Court while observing that
impugned judgment lacked the above treatment on the issue of jurisdiction, remanded the
case to this Court to consider and decide afresh different aspects of jurisdictional
objection. Learned appellate Court, however, maintained the judgment and decree of this
Court (Banking Court) on merits.

7. I will first take up the question of jurisdiction of this Court, over subject-matter and the
jurisdiction of this Court over the parties. The facilities which the defendants availed is
based on agreement dated 7-5-1994, which is signed and executed by United Bank Ltd.
Dubai on one hand and Mr. Shahid Afzal Daha and Naeemullah Malik, on the other hand.
Notary Public has also signed and attested this document. The defendants are shown as
guarantors in this agreement. The defendants availed Clean Over Draft Facility, Loan
Against Trust Receipt, Local Bill Discounted Letter of Credit, Payment Against
Document and Letter of Guarantee. These transactions pertain to "Finance" as defined in
section 2(e) and create Banker Customer relationship. The transaction inter se the parties
and also the subject-matter of the agreement dated 7-5-1994, falls within the ambit of
definition of "Finance" as defined in section 2(e) of the Financial Institutions (Recovery
of Finances) Ordinance, 2001.

The plaintiff is a banking company and transacts the banking business. Financial
Institution which transacts banking business and is incorporated within or outside
Pakistan is the "Banking Company" within the meanings of section 2(a) of Ordinance,
2001. The plaintiff is banker and the defendants are customers. The default of the
defendants in payment of the outstanding amount is non-fulfilment of obligation. The
subject-matter, therefore, exclusively falls within the jurisdiction of this Court. No other
Court except this Court, constituted under section 7 of the Ordinance, 2001, has
jurisdiction over the parties and the subject-matter.

8. Suit on the basis of foreign judgment, treating it as cause of action and conclusiveness
of foreign judgment, was considered by me, in my judgment passed in the case titled
14 of 1
"Habib Bank Ltd. v. Messrs Virk House Trading Company Ltd. 2009 CLD 451" wherein
it was held:--

'The Bench of three Judges headed by Dr. Hassan Basuni (President) of the Court of the
First Instance in Commercial Plenary Jurisdiction, examined the documents, went
through pleadings and other relevant record, held the defendants liable for the payment of
the suit amount. Learned Court considered Account Opening Application, Trust Receipt
of debt dated 31-12-1997 and copy of the statement of account dated 10-5-1998 and then
determined the liability of the defendants. The judgment by all intents and purposes is a
judgment on merit. The liability of the defendants was directly adjudicated upon. Learned
Dubai Appellate Court held defendants Nos.2, and 3 jointly liable for the payment of the
suit amount. The certified copies of the foreign judgments along with their translation, are
available on record. The judgments are presumed to be pronounced by the Court of
competent jurisdiction within the contemplation of section 14 of C.P.C. The defendants
have failed to rebut the presumption. There is nothing on record to show that foreign
judgments, upon which the plaintiff has filed the suit fall within the exception
enumerated in section 13, C.P.C. The judgment is conclusive and binding on the
defendants and this Court while entertaining the claim on the basis of foreign judgment
cannot sit in .appeal, over findings and conclusions of the fact, recorded by the Foreign
Court."

9. Foreign judgment of the Dubai Court of First Instance, has been perused. It's perusal
reflects that the defendants were summoned and re-summoned but they did not attend the
Court. According to Article 53 of the Civil Procedure Law (Law of Dubai) such judgment
is considered as judgment passed in presence of the parties. Defendant No.4 (defendant
No.1 herein) appeared before the foreign Court. So was the case of Hajvairy Textile Mills
Ltd. They contested the suit. Learned Court considered the memorandum, containing
their pleadings and the request for dismissal of the suit to their extent. Learned Court
after considering whole evidence and after it's due appraisal, passed the decree. The
Court absolved Hajvairy Textile Mills Ltd. and Mr. Mouiz Sultan, of the liability again
which the bank went into appeal. Dubai Court of Appeal accepted the appeal vide
judgment dated 25-5-1998 and bound the Hajvairy Textile Mills Ltd. and Mouiz Sultan
for value of unpaid cheques and confirmed rest of the judgment of Dubai Court of First
Instance. These judgments are by Court of competent jurisdiction, given on merits of the
case and founded on correct view of law applicable: The judgments do not breach any
law in force in Pakistan and do not offend the principle of natural justice. The judgments
are conclusive and binding.

10. Defendant No.1, on his return from abroad is residing within the jurisdiction of this
Court, which fact is evident from the perusal of the address, which the said defendant has
himself provided in the title of his appeal. The other defendants are also residing,
working for gain and carrying the business within the jurisdiction of this Court. The
plaintiff has it's regional office at Davis Road, Lahore and relevant record of the instant
controversy has been summoned by the plaintiff from abroad and the same is now in the
custody of officials of the plaintiff in it's regional office. This Court, therefore, has the
jurisdiction over the parties as well. I have considered various aspects of the instant
controversy; gone through the record and have no hesitation to hold that this Court has
the jurisdiction over subject-matter, over parties and the territorial jurisdiction. The suit
was competently filed in this Court and it does not suffer from any jurisdictional flaw.

11. 'The suit was decreed vide judgment and decree dated 31-1-2002 of this Court. The
finding of this Court, regarding the merit of the case were affirmed and upheld in appeal.
The case was remanded only on the question of jurisdiction, which has been decided in
favour of the plaintiff. The decree for a sum of UAE DHs 11,800,542.00 or the Pak
Rupees equivalent thereof at the time of payment along with interest and other charges
15 of 1
from 3-9-1995 till the date of realization of the whole amount is, therefore, passed against
defendant No.1, who will be jointly and severally liable for satisfaction of the decree,
with other judgment debtors. The costs of suit and costs of funds are also allowed to
plaintiff/decree-holder.

12. Failure of the defendants to satisfy the decree within a period of one month from
today will result into execution of decree forthwith, without the need of a formal
application for execution of the decree.

M.B.A./U-8/L Order accordingly.

16 of 1
2009 C L D 1340

[Karachi]

Before Mrs. Qaiser Iqbal and Arshad Siraj Memon, JJ

LIGHT INDUSTRIES (PVT.) LTD. Through Chief Executive---Appellant

Versus

Messrs ZSK STICKMASCHINEN GMBH through Attorney and another---Respondents

High Court Appeal No.32 of 2007, decided on 5th June, 2009.

(a) Interpretation of statutes---

----Law is required to be interpreted in such a manner that it should be saved rather than
destroyed---Courts should lean in favour of upholding constitutionality of legislation and
it is, therefore, incumbent upon the court to be extremely reluctant to strike down laws as
constitutionally such power should be exercised only when absolutely necessary, for
injudicious exercise of such power might result in serious consequences.

Province of East Pakistan v. Sirajul Haq Patwari PLD 1966 SC 854 and Multiline
Associates v. Ardeshir Cowasjee 1995 SCMR 362 ref.

(b) Contract Act (IX of 1872)---

----S.28---Civil Procedure Code (V of 1908), Ss.20 & 9---Principal and agent---Suit of


plaintiff (agent) was stayed on the ground that there existed an exclusive foreign
jurisdiction clause in the agreement---Covenants in the agreement and the contract had
addressed the controversy as the same were not contrary to the public policy nor
contravened the provisions laid down in S.28 Contract Act, 1872 nor the same violated
procedural law---In view of relevant clause of the agreement, contractual relations being
subject to foreign law and both the parties having agreed to fulfil all obligations of the
contract in foreign court having exclusive jurisdiction, there was no ambiguity in the
mind of contracting party---Contention was that relief claimed in the suit could not be
granted by the court of foreign jurisdiction which may deprive plaintiff from legitimate
judicious advantage---Held, question of inconvenience to be faced by anyone of the
parties was negated on account of reciprocal agreement between two parties, decree
passed- by High Court in Pakistan could not be executed in the foreign country as foreign

17 of 1
judgment; there being no reciprocal agreement between the two governments to
execution of such decrees--Appeal was dismissed.

CGM (Compagnie General Maritime v. Hussain Akbar 2002 CLD Kar. 1528; State Life
Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393;
Standard Insurance Company v. Pak Garments Ltd. 1998 SCMR 1239 and M.A.
Chowdhury v. Messrs Misui, O.S.L. Lines Ltd. PLD 1970 SC 373 ref.

Agha Zafar Ahmed for Appellant.

Jawad A. Sarwana for Respondent No.1.

Date of hearing: 19th March, 2008.

JUDGMENT

MRS. QAISER IQBAL, J.---The appellant has assailed the order dated 26-1-2007 passed
by the learned Single Judge in Suit No. 146 of 2006 on C.M.A. No. 2448 of 2006 under
Order I, Rule 10, C.P.C. and Order VII Rules 10 & 11, C.P.C., which were allowed,
whereby the suit of the appellant was stayed on the ground that there exists an exclusive
foreign jurisdiction clause in the agreement.

Succinctly the facts leading to the case are that the respondent No.1 is a Foreign
Company incorporated under the laws of Germany having its registered office in
Germany, by virtue of agreement dated 26-8-1992, appointed the appellant as his
exclusive commercial agent and representative for the territory of Pakistan. In terms of
the agreement negotiated for the sale of respondent No.1's products as well as services
relating to the products, it was agreed that the appellant would be entitled to commission,
which was paid by the respondent No.1 on quarterly basis. The appellant is alleged to
have procured the sale of the equipments of the respondent No.1 to the tune of Euro
5,843,694 and was entitled to 10% commission under the contract. The appellant claimed
commission on sale of spare parts received Euro 8,781,83 whereas respondent No.1 had
unlawfully deducted a sum of Euro 8,355.23 from the bills. Another sum was also
claimed towards expenses creating goodwill for the respondent No.1 Company.
Respondent No.1 terminated the contract with effect from 30-6-2005 and appointed
another Company as an agent for Pakistan. The appellant claimed a sum of Euro
1,180,572.45 from respondent No.1 towards commission arising out of contractual
obligations.

Respondent No.1 filed C.M.A. No.2448 of 2006. After service of summons was effected
fore stay of proceedings seeking directions for the appellant to file his claim before
foreign jurisdiction as per clause contained in the Agency Contract. The appellant filed
counter affidavit, the matter was heard and decided against the appellant.

18 of 1
Learned counsel has contended that the appellant was agent of the Principal as per clause
10 sub-clauses (2) (3) and (4), contractual relation between the parties is subject to
German laws and obligations of the subject contract shall be an exclusive jurisdiction of
Krefeld. It is urged that sub-clause (3) is uncertain and vague clause. All the evidence is
available in Pakistan and the judgment if passed would be executed at Karachi,
inconvenience shall be caused to the appellant, if they shall resort for redress to the Court
of foreign jurisdiction.

Adverting to sub-clause (2) of clause 10 of the Contract, it is submitted that the claim
could be filed by the agent in Germany within the statutory period of six months,
therefore, by any stretch of imagination claim, has become time barred for the purpose of
presenting the same before the Court in foreign jurisdiction, prima duty of the Court is to
take into consideration convenience and inconvenience faced by the parties for
implementation of the covenants of the contract. It was further contended that this Court
has not only jurisdiction to adjudicate upon the matter as termination letter and other
correspondence are in English language whereas German language is a language of
Krefeld Court. It is urged that sale of the respondent No.1's products were procured by
the appellant at Karachi and other parts of Pakistan, the courts at Karachi shall have
jurisdiction to decide the controversy.

Learned counsel for the respondent No.1 has contended that by virtue of clause 10,
jurisdiction of the Court at Krefeld, Germany has to be invoked, as there is no reciprocal
agreement between Government of Pakistan and Germany if any decree is passed by
Pakistani Court, it cannot be executed in the Court of Germany, the forum available to the
appellant is in foreign jurisdiction.

We have heard learned counsel for the parties, perused the record of the case. For the
purpose of adjudication of question of jurisdiction, clause 10 of the Agency Agreement
dated 26-8-1992, 1-10-1992 is material, which is reproduced herein below:

"Clause 10

(1) Projects which have been negotiated by ZSK before signing this contract and which
can be concluded only after coming into force of this contract, are not subject to the
regulations of this contract.

(2) The contractual relation is subject to German law. The direct or respective application
of the obligatory determinations of the German Code for Commercial Representatives is
excluded.

(3) Place of fulfilment for all obligations of this contract and exclusive jurisdiction is
Krefeld ZSK is also entitled to accuse, the Agent as his competent Court.

(4) All claims, resulting from the contractual relation of the Agent and ZSK will expire if
they have not been claimed within a period of 6 months after being due".

19 of 1
The above clause specifies that contractual relation between the parties are subject to
German laws, the parties have agreed to fulfil all obligations of this contract at Krefeld,
which has exclusive jurisdiction.

Learned counsel for the respondent has contended that assuming of covenants of the
agreement are correct, the proper place to decide the dispute would be Krefeld. Both the
parties will have to bring their witnesses to Germany incur expenditure in doing so. It is
difficult to say which place would be less inconvenient and more expensive. It is
however, clear that the dispute would be governed by law of Germany on the basis of
jurisdiction clause for preserving sanctity of the contract. In support of the above
contention reliance has been placed in the case of CGM Compagnie General Maritime v.
Hussain Akbar 2002 CLD Karachi 1528.

The law is required to be interpreted in such a manner that it should be saved rather than
destroyed. The Courts, should lean in favour of upholding constitutionality of legislation
and it is therefore, incumbent upon the courts to be extremely reluctant to strike down
laws as constitutionally, such power should be exercised only when absolutely necessary
for injudicious exercise of this power might result in grave and serious consequences as
held in the case of Province of East Pakistan v. Sirajul Haq Patwari PLD 1966 SC 854
and Multiline Associates v. Ardeshir Cowasjee 1995 SCMR 362.

We have considered arguments advanced by the learned counsel for the parties at bar.

The covenants in the agreement and the contract has addressed the controversy as the
same are not contrary to the public policy not in contravene provisions laid down in
section 28 of the Contract Act nor it violates to procedural law. In case of State Life
Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393
following observations have been reiterated in the case of Standard Insurance Company
v. Pak Garments Ltd. 1998 SCMR 1239. It is observed that:--

"We have considered the arguments of learned counsel for the parties. Under section 9 of
the Code of Civil Procedure the Civil Courts have jurisdiction to try all suits of a civil
nature excepting the suit of which their cognizance is either expressly or impliedly
barred. Under section 20-of the Code of Civil Procedure every suit is to be instituted in a
civil Court within the local limits of whose jurisdiction the defendant resides or carries on
business or where the cause of action wholly or in part arose. Under section 28 of the
Contract Act every agreement by which any party thereto is restricted absolutely from
enforcing his rights under or in respect of any contract, by the usual legal proceedings in
the ordinary Tribunals or which limits the time within which he may, thus, enforce his
rights, is void to that extent. It is evident from a plain reading of these provisions that
there is no absolute exclusion of jurisdiction under section 9 or section 20 of the Code of
Civil Procedure nor there is any violation of the provisions of section 28 of the Contract
Act when two or more Courts have jurisdiction to try a suit and the parties mutually agree
to choose or take their dispute to one of them. The civil Courts exercise their jurisdiction
under the Code of Civil Procedure. If they do not possess such jurisdiction under the
Code it cannot be conferred on them through a mutual agreement of the parties to a
dispute. But in a situation where two or more courts have jurisdiction to try a suit under
the Code of Civil Procedure, then an agreement between the parties that any dispute
arising between them shall be tried only by one of such Courts could not be considered
contrary to public policy as it would neither contravene the provisions laid down in

20 of 1
section 28 of the Contract Act nor would it violate in any manner the provisions of
section 9 or section 20 of the Code of Civil Procedure."

Learned Single Judge while taking into consideration clause 10 has specifically held that
contractual relation was subject to German law and both parties have agreed to fulfil all
obligations of the contract in Court having exclusive jurisdiction, therefore, there was no
ambiguity in the mind of contracting party.

Learned counsel for the appellant has relied upon the case of M.A. Chowdhury v. Messrs
Misui. O.S.K. Lines Ltd. PLD 1970 SC 373 and CGM Compagnie General Maritime
(supra) that relief claimed in the suit cannot be granted by the Court of foreign
jurisdiction, may deprive him from legitimate judicious advantage. In the circumstances
considered above, we are of the view that the question of inconvenience to be faced by
anyone of the parties is negated on account of reciprocal agreement between two parties,
if decree passed by this Court cannot be executed in the Court of Germany as foreign
judgment.

For the foregoing reasons, we are of the view that the impugned order does not call for
any interference. Appeal bears no merits, stands hereby dismissed. The parties bear their
own costs.

M.B.A./L-4/K Appeal dismissed.

21 of 1
2006 C L D 1592

[Lahore]

Before Sh. Azmat Saeed and Umar Ata Bandial, JJ

NAEEMULLAH MALIK---Appellant

Versus

UNITED BANK LIMITED and 2 others ---Respondents

R.F.A. No. 170 of 2003, heard on 3rd April, 2006.

(a) Financial Institutions (Recovery, of Finances) Ordinance (XLVI of 2001)---

---S.3(2)---Civil S.3(2)---Civil Procedure Code (V of 1908), Ss. 13, 20 & 44-A---


Limitation Act (IX of 1908), Art.117---Suit for recovery of Bank loan---Judgment passed
by foreign Courts---Execution in Pakistan---Scope---Suit based on foreign judgment as a
cause of action and suit' based on original cause of action---Maintainability---Res
judicata, principles of-:-Applicability-Plaintiff-Bank's Dubai Branch extended financial
facility to defendant's company and following default in payment, the Bank filed
recovery proceedings against defendants vide -a suit---Courts at Dubai decreed suit
against defendants in absentia---On defendant's failure to satisfy judgments issued by
foreign Court, the plaintiff-Bank filed recovery suit against defendants before the
Banking Court in Pakistan---Banking Court decreed the suit against defendants---
Defendants contended that foreign judgments constituted res judicata and excluded
determination of original cause of action by Banking Court in Pakistan; that claim on
foreign judgments was to be unsuccessful because statutory tests of recognition and
enforceability of foreign judgment were not applied by judgment passed by Court in
Pakistan; that claim based on original cause of action was not available because it went
beyond the scope of suit which was squarely based on foreign judgments and that suit
based on foreign cause of action three aspects namely jurisdiction over subject-matter and
over the parties and territorial jurisdiction were to be taken into consideration---Plaintiff-
Bank argued that a suit based on a foreign cause of action was maintainable before Courts
in Pakistan under provisions of S.20, C.P.C.---Validity---On obtaining a foreign judgment
three courses were open to decree-holder, that is, he could execute decree through
proceedings under S.44-A of C.P.C. without filing a suit, or, if judgment was after
fulfilling conditions of S.13, C.P.C., he could file suit on the basis of foreign judgment
keeping in view the provisions of Art.117 of Limitation Act, 1908; or he could file a suit
on original cause of action as it did not come to an end after passing of foreign judgment
if same was recorded in accordance with provisions of S.13, C.P.C.---In suit based on
foreign cause of action Trial Court was not to deal with question of jurisdiction in
22 of 1
summary manner rather three aspects of jurisdiction, that is, territorial jurisdiction,
jurisdiction over subject-matter and over the parties were to be taken into Consideration,
and record requisite evidence---Objection of jurisdiction was a substantial question of
law, determination of which depended upon ascertainment of certain jurisdictional
facts---For ascertainment of such facts, recording of requisite evidence was not to be
ruled out---Suit filed by Plaintiff-Bank in Pakistan revolved around two types of actions;
firstly, the foreign judgment as a cause of action and secondly, the original cause of
action---Scope and frame of suit, precluded Bank from advancing second type of
action---Quantum and calculation of relief prayed and plea on point of limitation showed
that suit as a whole had substance and effect only with reference to foreign judgments---
Bank was to first show whether it could maintain its claim on original cause of action---
For action on the basis of foreign judgment, the test of recognition and enforceability of
foreign judgment mentioned in S.13 of C.P.C. needed to be applied and satisfied before a
decree on foreign judgment was to be passed---Foreign judgment when given in absentia
then it was to require its scrutiny on the touchstone of rules of natural justice as applied in
Pakistan---Case was to be decided afresh after taking into consideration different facts of
jurisdictional objections raised by appellant.

Emirates Bank International Ltd. v. Messrs Usman Brothers and 9 others 1990 MLD
1779; Nusrat Mehdi Chaudhri Y. Habib Bank Limited and another R.F.A. No.303 of 2003
and National Bank of Pakistan and 4 others v. Gammon Pakistan Limited PLD 1990 Kar.
209 rel.

(b) Civil Procedure Code (V of 1908)---

----Ss. 13 & 44-A---Limitation Act (IX of 1908), Art.117---Suit for recovery of Bank
loan---Judgment passed by foreign Courts---Execution in Pakistan---Scope---Res
judicata, principles of---Applicability---Limitation---Upon obtaining a foreign judgment
three courses were open to decree-holder, that is, that he could obtain execution of
foreign judgment by proceeding under S.44-A of C.P.C., if the country from where decree
had been obtained was United Kingdom or any reciprocating territory and in that case
decree-holder could obtain execution of that decree from District Court of concerned
District in Pakistan and he need not file a suit; that decree-holder could file a suit in
Pakistan on the basis of foreign judgment treating it as cause of action; and in that case if
conditions prescribed in S.13, C.P.C. were fulfilled, the judgment would be conclusive
between the parties, otherwise it was 'res judicata' between them and as such Courts, in
Pakistan were bound by its findings, such suit, however, was to be filed within a period of
six years from the date of judgment as provided under Art.117 of Limitation Act, 1908
and that third course open to decree-holder was that he could file a suit on original cause
of action as it did not come to an end after passing of foreign judgment but remained
intact until and unless that foreign judgment was satisfied---Conditions mentioned in
S.13, C.P.C. if were not satisfied, .then foreign decree would be open to collateral attack
in Pakistan.

Emirates Bank International Ltd. v. Messrs Usman Brothers and 9 others 1990 MLD
1779 rel.

Abid Aziz Sh. for Appellant.

Ali Zafar Syed for Respondents.

23 of 1
Date of hearing: 3rd April, 2006.

JUDGMENT

UMAR ATA BANDIAL, J.---This appeal has been filed against the judgment and decree
dated 31-1-2002 passed by the learned single Judge decreeing the suit by-respondent
No.1 Bank ("Bank") for an amount of UAE Dhs. 11.800 million or equivalent thereof in
Pakistani rupees, costs in the suit and cost of funds determined under section 3(2) of the
Financial Institutions (Recovery of Finances) Ordinance, 2001 ("Ordinance") in favour of
the plaintiff and against the defendants jointly and severally. The appellant before us is
defendant No.1 in the suit. He is a Director of respondent No.2 company (defendant No.3
in the suit) and respondent No.3 (defendant No.2 in the suit) is the duly constituted
attorney of the Directors of the Company. Both the appellant and the respondent No.3 are
guarantors to the Bank in respect of financial facilities provided to the respondent No.2
company.

2. As mentioned in the impugned judgment, an ex parte judgment and decree was passed
against the three defendants on 2-11-1999 in the suit. Only the appellant (defendant No.1)
filed an application for setting aside of the said ex pie judgment and decree which was
allowed by order dated 1-11-2000. Thereafter the appellant filed an application for leave
to defend bearing PLA No.192-B of 2000 which was later amended purportedly to meet
the requirements of the newly-promulgated Ordinance. This PLA was dismissed by the
aforesaid judgment and decree dated 31-1-2002 that is impugned in the appeal before us.

3. The focus of submissions by the learned counsel for the parties before us has been the
appellant's jurisdictional objections to the maintainability of the Bank's suit under the
Financial Institutions (Recovery of Finances) Ordinance, 2001. In order to comprehend
these jurisdictional objections, it is necessary first to traverse the salient facts of the case.
On the strength of securities executed on 9-12-1991, the Bank's branch at Par Dubai
extended financial facilities to the respondent No.2 company. The appellant is alleged to
be guarantor to the Bank for the said facilities and also a signatory to an agreement dated
7-5-1994 claimed in the suit to be a mortgage agreement. Following default in payment
of dues by, inter alia, the defendants in the suit and two other persons, the Bank filed
recovery proceedings before the learned Court of first instance at Dubai which made its
order dated 22-9-1996 declaring "in absentia to bind the defendants jointly to pay the
plaintiff bank, the sum of Dhs 11,800,542.00 with interest of 9% as at the date of filing
the case until full and final settlement and binding them with the court-fee any expenses
and two hundred Dirhams lawyers expenses, rejecting the other requests."

4. Thereafter an appeal was filed by the Bank before the learned Dubai Court of Appeal
which accepted the same by order dated 25-5-1998 and directed two persons who are not
parties to the present proceedings to be additionally bound to pay the value of three
unpaid cheques to the Bank. Based upon the said foreign judgments rendered by the
learned, Courts at Dubai, the Bank filed its suit before this Court to recover the amount
adjudicated against defendants. Paragraphs 20 and 21 of the plaint reproduced below
explain that on quantum and grounds of liability, the foreign judgments constitute the
foundation of the Bank's claim against the defendants arrayed in its suit before the
learned single Judge:--

24 of 1
"20 That the defendants have defaulted/neglected to pay the amount towards
satisfaction of the order/judgment issued by a foreign Court of competent jurisdiction,
binding them jointly to pay Dhs. 11,800, 542.00 with interest. Hence this suit."

"21. That the plaintiff-Bank claims recovery of an amount of Dhs. 11,800,542


with interest at the rate of 9% as from 3-9-1995 from the defendants jointly and severally,
by enforcing their obligations under the guarantee and in respect of
order/judgment passed by the foreign Court of competent jurisdiction, on merits,
in favour of the plaintiff bank as described earlier and by the sale of their personal
assets and properties."

5. It is clear from the foregoing averments that the Bank is suing on the foreign
judgments of the Dubai Courts. This view is reinforced by a submission to such effect by
the Bank's counsel that is noted in para.6 of the impugned judgment.

6. Learned counsel for the appellant has assailed the judgment of the learned single Judge
on the ground that it fails to determine the objection to jurisdiction that the foreign
judgments constitute res judicata and exclude determination of the original cause of
action by the learned single Judge. It is shown that the findings in the impugned judgment
proceed upon a consideration of two distinct types of actions namely, claim on the
foreign judgments combined with a claim based on the original cause of action. The first
type of action is alleged to be unsuccessful because the statutory tests of recognition and
enforceability of a foreign judgment were not applied by the impugned judgment. The
second type of action is also claimed to be unavailable because it goes beyond the scope
of the suit that is squarely based on the foreign judgments. The following dictum in
Emirates Bank International Ltd. v. Messrs Usman Brothers and 9 others 1990 MLD
1779 that is noted in the impugned judgment elaborates this distinction:--

"5--Upon obtaining a foreign judgment three courses are open to the decree'
holder i.e. (1) that he can obtain execution of the foreign judgment by proceeding
under section 44-A of C.P.C., if the country from which the decree has been
obtained is United Kingdom or any reciprocating territory and in that case he can
outright obtain execution of that decree from District Court of concerned District of
Pakistan and that he deed not file a suit even and need not go through the
procedure prescribed for the trial of the suit; (2) that he can file a suit in Pakistan
on the basis of the foreign judgment treating it as the cause of action. In that case if the
conditions prescribed in section 13, C.P.C. are fulfilled, the judgment is conclusive
between the parties and otherwise it is res judicata between them and as such
Courts in Pakistan are bound by its findings. Such suit however, is to be filed
within the period of six years from the date of that judgment as provided under
Article 117 of the Limitation Act, or (3) that he can file a suit on the original cause of
action as it does not come to an end after passing of a foreign judgment, but remains
intact until and unless that foreign judgment is satisfied. However, if the conditions
mentioned in section 13 are not satisfied, then the decree will be open to collateral
attack in Pakistan."

7. On the strength of a recent judgment dated 13-12-2005 by a learned Division Bench of


this Court rendered in R.F.A. No.303 of 2003 titled Nusrat Mehdi Chaudhri v. Habib
Bank Limited and another, learned counsel for the appellants submits that in a suit based
25 of 1
on a foreign cause of action the consideration of three jurisdictional aspects is necessary,
namely, jurisdiction over the subject-matter, over the parties and territorial jurisdiction.
This treatment is stated to be lacking in the impugned judgment in the acceptance of the
second type of action. With respect to the instant objection raised by the learned counsel,
the learned Division Bench in the precedent case has observed as follows:--

"We have heard the learned counsel for the parties and find that in the facts and
circumstances of each case, the objection of jurisdiction raised by the appellants was
not illusionary, frivolous or bald rather by all means it was/is substantial question of
law, the determination of which, depends upon the ascertainment of certain "jurisdictional
facts"'. And for such ascertainment, in all probability, the recording of the requisite
evidence cannot be ruled out. In any case, we are of the view that the said question
should not have been dealt by the Court in a summary manner, rather the three
aspects of the jurisdiction, raised by the appellants and noted above, should have been
considered, dilated upon and decide which is conspicuously missing in the present
cases; resultantly, the case of the appellants warranted the grant of the leave."

8. Learned counsel for the respondent-Bank has opposed the appeal and in particular the
foregoing objections on the plea that a suit based on a foreign cause of action is
maintainable before Pakistani Courts under the criteria prescribed in section 20, C.P.C.
and can be lawfully urged in tandem with a suit based on a foreign judgment. He has
placed reliance on National Bank, of Pakistan and 4 others v. Gammon Pakistan Limited
PLD 1990 Karachi 209 and Emirates Bank International Ltd. v. Messrs Usman Brothers
and 9 others 1990 MLD 1779.

9. In the light of the latest view expressed by the learned Division Bench of this Court, it
appears necessary that the different facets of the objections to jurisdiction raised in the
present case ought to have been dealt with particularity. Such scrutiny would have shown
whether the efforts of Bank to simultaneously sail in two boats satisfied the prescribed
tests to get a decree under the Ordinance. The two boats are the two types of actions
combined before the learned single Judge, the foreign judgment as a cause of action and
secondly, the original cause of action as the basis of the suit. There is merit in the
contention of the learned counsel for the appellant that the scope and frame of Bank's suit
precludes the Bank from advancing the above mentioned second type of action. Apart
from the contents of paras. 20, 21 and 22 of the plaint, the quantum and calculation of the
relief prayed and the Bank's plea on the points of limitation prima facie show that as a
whole the suit has substance and effect only with reference to the foreign judgments.
Accordingly, it would be relevant for the Bank to first show whether on its present
pleadings it can maintain its claim on the original cause of action.

10. With regard to the first type of action, the tests of recognition and enforceability of
foreign judgments mentioned in section 13 of C.P.C. need to be applied and satisfied
before a decree on a foreign judgment is to be passed. This is particularly so where the
foreign judgment is given in absentia for that would require its scrutiny on the touchstone
of the rules of natural justice as applied in Pakistan. We, therefore, feel that the Bank's
suit requires a deeper and a fresh look in the light of the relevant criteria that are
applicable in the foregoing jurisdictional context.

11. Accordingly, for the foregoing reasons and fallowing the view expressed by the
learned Division Bench already noted above, this appeal is partly allowed for the learned
single Judge to consider and decide afresh the different facets of the jurisdictional
objections raised by the appellant. No order as to costs.

26 of 1
S.M.B./N-93/L Case remanded.

27 of 1
2005 C L D 1577

[Karachi]

Before Muhammad Sadiq Leghari, J

CHINA NATIONAL MACHINERY IMPORT AND EXPORT CORPORATION---


Plaintiff

Versus

TUFAIL CHEMICAL INDUSTRIES LTD.---Defendant

Suit No.396 of 2001, decided on 1st April, 2005.

(a) Arbitration (Protocol and Convention) Act (VI of 1937)---

----S. 2---Arbitration Act (X of 1940), S.14---Civil Procedure Code (V of 1908), S.151---


Award---Suit for judgment and decree with prayer for making the award rule of Court---
Maintainability---Company incorporated under the law of China having its office in
China and a company incorporated in Pakistan entered into a contract whereby plaintiff
(the Chinese Company) agreed to sell and respondent (Pakistan Company) agreed to
purchase machinery/ equipment, know-how and design as per terms and conditions of the
contract---Article of the said contract provided for arbitration in China in English to be
conducted by China International Economic and Trade Arbitration Commission in
accordance with the letter, rules, and procedure in case of any or all disputes arising from
the execution of or in connection with the said contract with the provision that (he
arbitration of the Commission would be final and binding upon both the parties---
Necessary notification as required under S.2(b)(c) of the Arbitration (Protocol and
Convention) Act, 1937 was never issued by the Federal Government in respect of China,
so the award could not be treated as foreign award---Such award, though not being
foreign award or domestic award was not enforceable in Pakistan in the manner as an
award was to be enforced under the Arbitration (Protocol and Convention) Act, 1937 or
under Arbitration Act, 1940, yet it could be enforced the way the awards made by the
foreign Arbitrators were being enforced before coming in force of the said Acts---
Contract having been signed in Pakistan and defendants residing in Pakistan and carrying
on business here, the plaintiff could enforce the award by filing suit in Pakistan---Present
suit, though was under a special law, but substantially it was a suit for enforcement of an
award and for recovery of the claim awarded in the arbitration proceedings---Plaintiff,
could not be non-suited for technical reasons that the award could not be enforced under
the provisions of Arbitration (Protocol and Convention) Act, 1937 and Arbitration Act,
1940; it would be proper to treat the same as a regular suit exercising powers under
S.151, C.P.C.---Such an order was not barred by any provision of law---High Court,
therefore, treated the suit of the plaintiff as regular suit for enforcement of the award---

28 of 1
Court had the powers even to convert the proceedings of one kind to the proceedings of
other kind when necessary for doing justice between the parties.

Messrs Yangtze (London) Ltd. v. Messrs Barlas Brothers PLD 1961 SC 573; Province of
West Pakistan v. Mustafa R.C.C. Works PLD 1977 Kar. 397; Sait Pamandas Singaram's
case AIR 1960 Andh. Pra. 59 and Ahmedullah Malik's case PLD 1964 SC 236 ref.

(b) Arbitration (Protocol and Convention) Act (VI of 1937)---

----S. 2---Foreign award---Requirements for treating an award as 'foreign award"


enlisted---If the notification as required by S.2(a)(b) of Arbitration (Protocol and
Convention) Act, 1937 had not been issued by the Federal Government of Pakistan the
award could not acquire the status of foreign award.

Before treating an award as a foreign award under the Arbitration (Protocol and
Convention) Act, 1937 it must be shown:

(i) To have been made in respect of differences between persons who are subject to the
jurisdiction of powers which have been declared by notification published in the official
Gazette by the Central Government to be parties to the Convention mentioned in the Act,
and

(ii) to have been made in a territory which has been similarly declared to be a territory to
which the said convention applies.

If notification as required by clauses (a) and (b) of section 2 of the Act has not been
issued by the Central Government of Pakistan the award cannot acquire the status of
foreign award.

(c) Civil Procedure Code (V of 1908)---

----O. VI, R.17---Amendment/alteration of pleadings---Permission to alter/amend the


plaint could be considered through regular application, proposing the amendments and
such request was to be considered in accordance with law after providing the other side
with an opportunity of hearing.

Ch. Muhammad Jamil for Plaintiff.

Munir A. Malik for Defendant.

29 of 1
Date of hearing: 9th March, 2005.

ORDER

Facts leading to present order are that on 31-10-1993 China National Machinery Import
and Export Corporation a company incorporated under the law of the People's Republic
of China having its office located at West Wing, Sichuan Mansion No.1, Fuwaidajie St.
Xicheng Dist. Beijing, Peoples Republic of China 100037 and respondent Tufail
Chemical Industries Ltd. incorporated under the Companies Ordinance, 1984 having its
office at second Floor Noorani Centre 543 Adamjee Dawood Road, Karachi entered into
a Contract No. M(53)PK-53780 whereby plaintiff agreed to sell and the respondent
agreed to purchase machinery/ equipment, know-how and design as per terms and
conditions of the same contract. Article 18 the A contract provides for arbitration in
Beijing Peoples Republic of China in English to be conducted by China International
Economic and Trade Arbitration Commission in accordance with the letter, rules and
procedure in case of any or all disputes from the execution of or in connection with the
same contract. It also provides that the arbitration of the Commission will be final and
binding upon both the parties.

As dispute arose between the parties regarding the execution of the contract the plaintiff
applied to the CIETAC on 25-5-1999 for arbitration. The Chairman of CIETAC
appointed an Arbitrator in accordance with its arbitration rules and procedure and an
Arbitral Tribunal was constituted on 29-7-1999. The respondent were given notice and on
the first date of hearing i.e. 12-10-1999 the matter was adjourned to 8-11-1999 at their
request. On that date they were absent. However, on 19-11-1999 the Secretariat of
CIETAC received their written statement, objections defence and counter-claim after the
expiry of time limit prescribed by the Arbitration Rules of CIETAC. After considering the
material produced before the Tribunal it rendered its Award No.120 of 2000 within the
prescribed time limit as per its Arbitration Rules. The award was as follows:--

(1) The respondent is ordered to pay USD 820,000 and USD 50,000 as price of the goods
under the contract to the claimant;

(2) The respondent is ordered to pay USD 45,500 as technical service fees to the
claimant;

(3) The respondent is ordered to pay USD 16,000 as interests to the claimant;

(4) The respondent is ordered to pay to the Claimant interests at the rate of 6% per annum
calculated from the date of April 21, 1997 to the date of the Award;

(5) The respondent is ordered to pay RMB 150,000 as lawyer expenses incurred by the
claimant in the arbitration;

30 of 1
(6) The arbitration fee is determined to be RMB 230,912 which should be borne by the
respondent. The fee has been deposited with CIETAC in advance by the claimant.
Accordingly, the respondent shall reimburse the Claimant RMB 230,912 for a refund of
the arbitration fee.

The respondent shall make payments aforementioned within 45 days of this award, after
which date an interest at the rate 6% in USD per annum and 8% in RMB per annum shall
be calculated. The Award is final and binding upon both parties.

(The Award and Record of Arbitration

in original is attached as Annexures "A and B")

On 24-3-2001 the plaintiff/claimant filed present suit for judgment and decree. At the
same time they also prayed for making the award rule of this Court together with the suit.
The copy of award and documents placed as evidence before the Tribunal were annexed.

After service of notice upon them the defendant filed objections to the award pleading
therein that award cannot be treated a foreign award under the provisions of the
Arbitration (Protocol and Convention) Act, 1937. According to them, it can, at the most,
be treated as domestic award under the provision of the Arbitration Act, 1940 but the
same cannot be made rule of the Court firstly the suit has been filed after expiry of the
period of limitation and secondly the award is liable to be set aside on account of the
legal misconduct on the part of the Tribunal. According to them, the Arbitral Tribunal
failed to consider their counter claim which, at the same time was defence against the
claim set up by the plaintiff. They further pleaded that the claimant suppressed the
attachment to the acceptance of the certificate. The plaintiff had only produced the
acceptance certificate suppressing the attachment of the acceptance certificate. They
further alleged that the Arbitral Tribunal misconducted itself as it failed to appoint an
expert under Articles 38 and 41 of the CIETAC Arbitration Rules.

On 9-3-2005 the arguments were heard on the question of maintainability of the suit.

Both of the learned counsel expressed that the award in suit is not to be treated as foreign
award under the provisions of the Arbitration (Protocol and Convention) Act, 1937 as
necessary notification as required under section 2(b) and (c) of the said Act was never
issued by Central Government of Republic in respect of the Peoples Republic of China.

Mr. Munir A. Malik further argued that although clause (18) of the contract provides for
arbitration in Beijing Peoples Republic of China to be conducted by China International
Economic and Trade Arbitration Commission in accordance with its rules and procedure,
and the matter was referred to the arbitration accordingly yet the award rendered by the
Arbitral Tribunal is to be considered as "domestic award". As Pakistan is the country
most closely connected with the contract for the reason that the machinery was to be
supplied at Pakistan and then commissioned there and breach alleged to have been
committed in Pakistan and one of the parties resides and carries on business in Pakistan.
In support of his view point Mr. Munir A. Malik referred to a decision of the Honourable
Supreme Court in case of Hitachi v. Rupali Polyester 1998 SCMR 1618.

31 of 1
Mr. Munir A. Malik further contended that the award being domestic one could be filed
under section 14(2) of the Arbitration Act, 1940 but where it has been filed does not
specify the mandatory requirement of the provisions of the said section. According to him
the provisions require the award to be filed by the arbitrator before the Arbitral Tribunal
along with the evidence produced before it, but here the same has been filed by the
claimant themselves. Moreover, the award has to be filed within 90 days of notice of the
passing thereof but here it has been filed about one year after the date when the same had
been rendered.

According to the learned Advocate, the present suit deserves to be dismissed at


preliminary stage as not maintainable.

Against the arguments of Mr. Munir A. Malik the learned Advocate representing the
plaintiffs contended that if the award in question is treated as "domestic one" and the
prayer for making it rule of Court is found barred by limitation then also the plaintiffs are
entitled to recover the claim awarded to them by the Arbitral Tribunal through this award,
by filing a suit. He further contended that present suit is based upon the award and can be
treated as a regular suit for enforcement of the award. According to him, for the simple
reason that the provisions of the Arbitration (Protocol and Convention) Act, 1937 and
Arbitration Act, 1940 are mentioned in the body of the suit, it cannot be dismissed. It is
the substance which is looked at and not a form of the suit. He also contended that he
intends to alter and amend the plaint, for which permission may be granted to him.

First of all, I deal with the question of the status of the award. "Foreign Award" is defined
by section 2 of the Arbitration (Protocol and Convention) Act, 1937, as under:-

"2. In this Act "foreign award" means an award on differences relating to matters
considered as commercial under the law in force in Pakistan made after the 28th day of
July, 1924:---

(a) In pursuance of an agreement for arbitration to which the Protocol set forth in the
First Schedule applies, and

(b) Between persons of whom one is subject to the jurisdiction of some one of such
Power as the Central Government being satisfied that reciprocal provisions have been
made, may by notification in the official Gazette, declare to be parties to the Convention
set forth in the Second Schedule, and of whom the other is subject to the jurisdiction
some other of the Power aforesaid, and

(c) In one such territories as the Central Government, being satisfied that reciprocal
provisions have been made, may, by like notification, declare to be territories to which
the said Convention applies, and for the purposes of this Act an award shall not be
deemed to be final if any proceedings for the purpose of contesting the validity of the
award are pending in the country in which it was made."

32 of 1
The above reveals that before treating an award as a foreign award under the said Act it
must be shown:--

(i) to have been made in respect of differences between persons who are subject to
the jurisdiction of powers which have been declared by notification published in the
Official Gazette by the Central Government to be parties to the Convention mentioned in
the Act, and

(ii) to have been made in a territory which has been similarly declared to be a
territory to which the said convention applies.

Since notification as required by clauses (a) and (b) of section 2 of the Act of 1937 has
not been issued by the Central Government of Pakistan the award cannot acquire the
status of foreign award.

After this it is to be seen as to whether this award can be treated as domestic award. In
that respect it has to be seen that what law was chosen for governing the contract. Neither
the contract itself speaks anything about the law to govern it nor parties counsel claim
presence of any such clause in it.

No indication appears even in the arbitration clause of the contract that law of Pakistan
was to govern the contract. Clause (18) in the contract provides for arbitration in Beijing,
Peoples Republic of China, in English, to be conducted by China International Economic
and Trade Arbitration Commission, in accordance with its rule and procedure in case of
any and all disputes arising from the execution of or in connection with the same
contract. It is also expressly mentioned in the same clause that such an award shall be
final and binding upon both the parties. Thus under the international contract an Arbitral
Tribunal was to be constituted by CIETAC according to its rules and procedure and the
proceedings were also to be governed by its rules. In presence of that and in absence of
any clause in the contract about the law to govern it an award passed in foreign
arbitration proceedings is not to be treated as domestic award simply for the reason that
Pakistan is the country having closest nexus With the dispute in issue. Had the parties
chosen and agreed to the applicability of the law of Pakistan to the contract then only the
award be treated as domestic one. In absence of any agreement in that respect the award
is not to be treated as domestic one. The case of Rupali Polyster PLD 1998 SC 1618
referred to by Mr. Munir A. Malik is clear on the point. Award in that case was treated as
domestic one not only for the reason that Pakistan had close nexus with the dispute in
issue but at the same time the parties had chosen the law of Pakistan to govern the
contract which included the arbitration clauses.

True that the award not being foreign award or domestic award, is not enforceable in
Pakistan in the manner as an award is to be enforced under the Arbitration (Protocol and
Convention) Act, 1937 or under the Arbitration Act, 1940 yet it can be enforced the way
which the awards made by foreign arbitrators were being enforced before the said Acts.
The point had been dealt with by the Honourable Supreme Court in the case of Messrs
Yangtze (London) Ltd. v. Messrs Barlas Brothers reported in PLD 1961 SC 573.

The plaint and the objections/applications filed by the defendants under sections 5, 6 and
7 of the Arbitration (Protocol and Convention) Act, 1937 read with sections 15, 16 and 33
33 of 1
of the Arbitration Act, 1940 are silent regarding the place or country where the contract
had been signed but it had been expressly pleaded by the defendant in Annexure 'M' to
their objections to the jurisdiction of the Arbitral Tribunal that the contract was signed in
Pakistan. The plaintiff has not disputed that position claiming the contract to have been
signed elsewhere. Thus, it is an accepted position that the F contract had been signed in
Pakistan. Additionally, the defendants reside and carry on business here, therefore, the
plaintiff can enforce the award by filing the suit in Pakistan. The point had been dealt
with to some extent by this Court in case Province of West Pakistan v. Mustafa R.C.C.
Works PLD 1977 Karachi 397 and by full Fench of Andhra Pradesh India in case of Sait
Pamandas Singaram reported in AIR 1960 Andhra Pradesh 59.

Although the present suit is under special enactment but substantially it is suit for
enforcement of an award. In other words, it is for recovery of the claim awarded in the
arbitration proceedings. It does not seem proper to non-suit the plaintiffs hitting them for
technical reason that the award cannot be enforced under the provisions of the Acts of
1937 and 1940. It will be proper to treat this as a regular suit exercising powers under
section 151, C.P.C. Such an order is not barred by any provisions of law. Suit is therefore,
hereby treated as regular suit for enforcement of the award. The Court has powers even to
convert the proceedings of one kind to the proceedings of another kind when necessary
for doing justice between parties. Pronouncement of the Honourable Supreme Court in
case of Ahmedullah Malik reported in PLD 1964 SC 236 is clear on the point of powers
of the Court in that area.

As regard the request for permission to alter/amend the plaint it has to be made through
regular application, proposing the amendments and such request is to be considered in
accordance with law after providing the other side with an opportunity of being heard.

With this order the objection about the maintainability of the suit stands disposed of.
Office to fix the date for written statement by the defendants.

M.B.A./C-30/K Order accordingly.

34 of 1
P L D 2003 Karachi 382

Before Sabihuddin Ahmed and Syed Ali Aslam Jaferi, JJ

MUNAWAR ALI, KHAN---Appellant

Versus

MARFANI & CO. LTD. ---Respondent

High Court Appeals Nos.76 to 79 of 1995, heard on 20th August, 2002.

(a) Civil Procedure Code (V of 1908)---

----Ss. 14-A & O.XXI, R.23-A---Execution of decree passed by Court in the United
Kingdom---Deposit of decretal amount---Objection to the execution--Furnishing of
security by the objector---Necessity---Provisions of O.YXI, R,23-A, C.P.C. do not apply
to foreign decrees or judgments sought to be executed under S.44-A, C.P.C.---Mere non-
furnishing of security would not bar the entertainment of objections to execution.

Abdul Malik Badaruddin v. Gors Venor Casino Limited PLD 1993 Kar. 449 fol.

(b) Private International Law-----

---Execution of decree passed by the Court in Britain---Foreign judgment, action on---


Scope---Action on the basis of a foreign judgment could only be maintained if the
defendant in the judgment was a resident or at least physically present in the foreign
country at the time of commencement of proceedings or had submitted to or agreed to
submit to the jurisdiction of such foreign Court---Mere fact that the cause of action had
accrued within the jurisdiction of such Court would not confer competence upon such
Court in an International, sense so as to make its judgment recognizable and
enforceable---When the question of amenability of a non-resident foreigner to the
jurisdiction of the Court of a particular country was involved the matter had to be
examined from an International Law perspective.

Sardar Gurdyal Singh v. The Raja of Farid Kot 1894 AC 670 and Emanuel v. Symon
(1908) 1 KB 302 fol.

35 of 1
Abdul Malik Badaruddin v. Gors Venor Casino Limited PLD 1993 Kar. 449; Sardar
Gurdyal Singh v. The Raja of Farid Kot 1894 AC 670; Swindells and Sons v. Haji
Muhammad Abdullah PLD 1957 Kar. 933; Ghulam Ahmed and others v. Dr. Sarosh
Rattanji Wadia PLD 1959 Kar. 624; Fazal Ahmed and others v. Abdul Bari and another
PLD 1952 Dacca 152; Cheshire and North's Treatise on Private International Law, 13th
Edn., p.420 ref.

Brijlal Ramjidas and another v. Govindram Gordhandas Seksaria and others PLD 194-7
PC 150 distinguished.

(c) Civil Procedure Code (V of 1908)---

----Ss. 20---Court can exercise jurisdiction if the cause of action has accrued within its
limits irrespective of the residence of the defendant---Court has been left with no
discretion and is required to entertain a suit even against a non-resident foreigner as long
as it can be shown that the cause of action accrued within the territorial jurisdiction of the
Court.

Viswanathan v. Abdul Wajid AIR 1963 SC 1 ref.

(d) Private International Law-----

---- Execution of decree passed by a British Court in Pakistan---Objection application on


the ground of jurisdictional issue of the British Court--Validity---Exercise of jurisdiction
of British Courts over non-resident foreigners---Scope---British Courts are competent to
exercise jurisdiction where a claim is brought to enforce, rescind, dissolve or otherwise
affect a contract or to recover damages or obtain any other remedy in respect of breach of
contract in cases where a contract was made within the jurisdiction of such Courts or the
breach is committed within such jurisdiction--Statement of claim pertaining to the
execution application, in the present case, showed that conditions for competence to
exercise the jurisdiction by British Court were satisfied, therefore it could not be
contended from the stand point of English Law that the British Court pronouncing the
judgment had no jurisdiction to do so---Power of the Court to allow service of motion in
foreign countries ought to be exercised with extreme caution.

Cheshire and North's Treatise on Private International Law, 13th Edn., p.420 fol.

Morguard Investment Limited v. De-Saboya (1991) 76 DLR 256 ref.

(e) Private International Law---

---- Service of motion in foreign countries---Power of the Court to allow service of


motion in foreign countries ought to be exercised with extreme caution.
36 of 1
(f) Civil Procedure Code (V of 1908)--

----Ss.13 & 44-A---Distinction between Ss.13 & 44-A, C.P.C. leads to somewhat
anomalous situation that the decree of a Court in United Kingdom which is directly
executable as a decree of a District Court in Pakistan may become unexecutable merely
because that Court was not considered to possess jurisdiction in an "International" sense
notwithstanding the fact that under its own system of laws it had full powers to pass such
decree---High Court, observed that Ministry, of Law Government of Pakistan and
Pakistan Law Commission to consider the desirability of amending the Civil Procedure
Code, 1908 in view of the anomalies pointed out in the judgment.

Under section 13 a foreign judgment is not enforceable per, se but a suit on its basis has
to be tiled though it is conclusive with respect to a matter adjudicated upon between the
parties subject to six specified exceptions. The first exception being that it will not be
conclusive when it has not been passed by a Court of competent jurisdiction and the
authorities cited before us show that competence is to be reckoned in an international
sense and this exception would become applicable if the defendant was not residing
within the territorial jurisdiction of the foreign Court at the time of institution of the
action or had not voluntarily submitted to the jurisdiction of such Court. Section 44-A on
the other hand stipulates that the decree of superior Court of United Kingdom can be
directly executed as if it had been passed by a District Court. Clause, (3) of this section
however, stipulates that the Court shall refuse execution if it is shown that it falls within
any of the six exceptions contained in section 13. This appears to lead to a somewhat
anomalous situation that the decree of a Court in United Kingdom which is directly
executable as a decree of a District Court in Pakistan may become unexecutable merely
because that Court was not considered to possess jurisdiction in an "international" sense
notwithstanding the fact that under its own system of laws it had full powers to pass such
decree.

A copy of the present judgment was directed to be forwarded to the Secretary, Ministry of
Law Government of Pakistan and Secretary, Pakistan Law Commission to consider the
desirability of amending the relevant provisions of C.P.C. in view of the anomalies
pointed out.

(g) Civil procedure Code (V of 1908)---

----Ss. 13 & 44-A---Execution of decree passed by Court in the United Kingdom---


Decree of the English Court could not be deemed to have been passed by a Court of
competent jurisdiction when admittedly the defendants were not residing within the
jurisdiction of such Court at the time of institution of the action and foreign judgment
was not pronounced by a Court of competent jurisdiction.

Sardar Gurdyal Singh v. The Raja of Farid Kot 1894 AC 670 and Ghulam Ahmed and
others v. Dr. Sarosh Rattanji Wadia PLD 1959 Kar. 624 fol.

(h) Jurisdiction---
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---- Submission to jurisdiction of -a foreign Court when does not take place--Principles.

When a defendant appeared before a foreign Court only to protest against assumption of
jurisdiction he cannot be assumed to have voluntarily submitted to such jurisdiction.
Nevertheless, when he also takes up defences on merits a clear submission can be
inferred. Similarly when he applies to have a default judgment set aside and appeals as to
merits of the claim such appeal would normally amount to submission to jurisdiction.
Nevertheless, if the appeal or application is merely premises upon a jurisdictional issue it
would not tie treated as submission.

Muhammad Ali Sayeed for Appellant.

Raja Qureshi for Respondent. .

Dates of hearing: 8th and 20th August, 2002

JUDGMENT

SABIHUDDIN AHMED, J.---These four appeals are directed against a common order of
a learned Single Judge in Execution Applications Nos. 15, 16, 17 and 18 of 1991 whereby
objections to a decree I the High Court of Justice Chancery Division, Manchester, U.K
(hereinafter mentioned as British Court) were rejected and the execution applications
were directed to proceed.

2. The fact which are not seriously in dispute appear to be that in June, 1989 the
respondents filed a suit against the appellants claiming that the appellants had agreed to
sell and the respondents had agreed to purchase certain immovable properties in Hyde
Park Mansions, London. According to the agreement between the parties certain amounts
by way of service charges under leases were required td, be paid by the appellants to the
respondents, which they failed to pay despite completion of sale and purchase in May,
1986. The respondent-company filed .a suit in the British Court and Writ of Summons
were issued to the appellants all of whom were residents of Pakistan. It is admitted that
summons were served and at least the appellant in H.C.A. 78 of 1995 (Seems Walid)
applied for time to file objections. Time was granted, but the appellant did not submit to
the jurisdiction of the trial Court and the respondents' suits were decreed upon no notice
of intention to defend having been given by the appellants on 6th July, 1990. The
appellants applied for setting aside of the order dated 6th July, 1990, but that application
came to be dismissed, after hearing the parties on 20th March, 1991. The appellants
preferred appeals in July, 1991 but apparently they were also dismissed.

3. Thereafter the respondents sought to execute the decrees through this Court under
section 44-A, C.P.C. through execution applications Nos. 15 to 18 of 1991. The
appellants filed objections, but by order dated 18-5-1992 a learned Single Judge ruled
that the objections could not be heard unless the appellants furnished security in terms of
Order 21, Rule 23-A, C.P.C. The appellants preferred appeals against the aforesaid order
38 of 1
before a Division Bench which were disposed of by a consent order darted 27-8-1992
whereby the order of the learned Single Judge dated 18-5-1992 was set aside and the
matter was remanded to the learned Single Judge. Upon remand another learned Single
Judge hearing the execution applications noticed that the Appellate Bench had not
decided the question of requirement of furnishing security under Order 21, Rule 23-A,
C.P.C and thereafter proceeded to consider the question of non-furnishing of security as
well as the merits of the case. By the impugned order dated 8-8-1995 he held that
furnishing security was a condition precedent for objecting to execution of any money
decree including a decree of a foreign Court and therefore, the appellants' objections
could not be heard. Moreover, proceeding on merits he found the objections to be
unsustainable and directed that the decree be executed. The appellants have questioned
this order through these appeals.

4. On the question of security Mr. Muhammad Ali Saeed learned counsel for the
appellants relied upon the pronouncement of a Division Bench of this Court in Abdul
Malik Badaruddin v. Gors Venor Casino Limited (PLD 1993 Karachi 449) wherein it was
inter alia held that. the provisions of Order 21, Rule 23-A, C.P.C do not apply to foreign
decrees or judgments sought to be executed under section 44-A, C.P.C. Apparently this
-judgment was riot brought to the notice of the learned Single Judge passing the
impugned order and indeed supports Mr.Saeed's contention. Mr.Raja Qureshi learned
counsel for the respondents candidly conceded this position. Accordingly we would hold
that the mere non-furnishing' of security would not bar the entertainment of objections to
execution taken by the appellant. This evidently brings us to the merits of the controversy
and it needs to be examined whether the findings of the learned Single Judge are
sustainable or facts and law. In this context Mr. Muhammad Ali Saeed contended that
under section 44-A(3) that foreign decree could not be executed unless it was shown to
the satisfaction of the Court that the decree did not fall within any of exceptions laid
down in clauses (a) and (f) of section 13. He further contended that judgment and decree
had not been pronounced by a Court of competent jurisdiction, had not been given on
merits and was obtained through proceedings opposed to natural justice. As such it was
hit by clauses (a), (b) and (d) of section 13.

5. Mr. Muhammad Ali Saeed learned counsel for the appellant in the first instance argued
that the judgment sought to be executed was not pronounced by a Court of competent
jurisdiction and was hit by clause (a) of section 13, C. P. C. Relying upon the admitted
facts that the defendants/appellants were domiciled and residing in Pakistan where
summons had been served through publication Courts in United Kingdom could not
assume jurisdiction over the matter. Learned counsel argued that the competence of
foreign Courts should be viewed from the stand-point of International law and not the
procedural law of the country where the suit is brought or where the judgment is
proposed to be enforced. He therefore, contended that the Courts in United Kingdom
could be deemed to be competent to pronounce judgment only under two conditions
namely either the defendants should have been domiciled or residents of the territory
where the judgment was pronounced or had voluntarily submitted to such jurisdiction. He
emphatically contended that territory where the cause of action had accrued was
altogether irrelevant for the aforesaid purpose.

6. In an elaborate and erudite address Mr.Saeed cited a large number of precedents from
several jurisdictions in support of his view. It may not be necessary to refer to all the cited
precedents but some important ones need to be taken note of. The first in point of time
appears to be the pronouncement of the Judicial Committee of the Privy Council in
Sardar Gurdyal Singh v. The Raja of Farid Kot (1894 AC 670). In this case the Raja of
Farid Kot a ruler of a princely State obtained two ex parte decrees against the appellant
(who had at some point of time served as treasurer to the Raja) from the State Courts. An
action founded upon these judgments (which were to be treated as foreign judgments in
British India) was latter brought against the appellant in a Court at Lahore where the
appellant was then residing. The matter was litigated up to the Privy Council which held
39 of 1
that the action brought at Lahore must fall on the ground that the Farid Kot Court had no
jurisdiction on any recognized principle of International Law against a man who had left
the State territory and was domiciled .elsewhere when the action was brought. Learned
counsel also referred to two decisions of this Court in the cases of Swindells & Sons v.
Haji Muhammad Abdullah (PLD 1957 Karachi 933) and Ghulam Ahmed and others v.
Dr.Sarosh Rattanji Wadia (PLD 1959 Karachi 624). In the first case an action was
brought against the judgment-debtors by the plaintiff/decree-holder before the Queen's
Bench Division at Liverpool, writ of summons were served at Karachi where the
judgment-debtors resided and upon their failure to appear ex parte decree was passed.
This decree was sought to be executed in Karachi under section 44-A, C.P.C. Inamullah
Khan, J. (as his Lordship then was) held that since the defendants/judgment debtors did
not reside in nor did they submit themselves by appearance or otherwise to the
jurisdiction of the English Court the Queen's Bench was not competent to pass the decree.
It may be mentioned here that his Lordship took note of the arguments that under Order
11, Rule 1 of the Supreme Court Rules of England British Courts would have jurisdiction
in respect of breach committed within its jurisdiction of a contract wherever made.
Nevertheless, he proceeded to hold that in the case at hand it had not been alleged 'that
breach of contract had been committed within the jurisdiction of the Queen's Bench and
that in any case the Rules and Procedure of British Court had no application in Pakistan
after independence.

7. Learned counsel then relied upon a Division Bench Judgment of this Court in Ghulam
Ahmed and another v. Dr.Sarosh Rattanji Wadia (PLD 1959 Karachi 624). In this case the
respondent had filed a suit against the petitioner for recovery of medical charges for
treatment to the applicants and their families at Bombay between 1946 and 1949 before
the Court of Small Causes, Bombay. The applicant at the time of filing of the suit was
residing and carrying on business at Karachi. The Bombay Court, however, decreed the
suit ex parte against the applicants and upon this decree a suit was, filed and decreed by
the Small Causes Court, Karachi. In a revision application preferred by the applicant,
their Lordships followed the principle laid down in Sardar Gurdyal Singh's case and held
that in the absence of a statutory power to pronounce judgment against a person residing
outside its territorial jurisdiction, a Court could not pronounce judgment in the personam
against any person who was not domiciled or actually residing within the territorial
jurisdiction of the Court unless such person voluntarily submitted to the jurisdiction of
the Court.

8. Mr. Saeed emphatically argued that in the above context the mere fact that the cause of
action according to the procedural law of a particular country arose within its territorial
jurisdiction would be of little significance in determining whether such Court had
jurisdiction to pronounce upon the controversy. Though this proposition does not appear
to have directly dealt with in the above cited precedents (except for some brief
observations in Swindells' case), learned counsel placed reliance upon the judgment of
the Dacca High Court in Fazal Ahmed and others v. Abdul Bari and another (PLD 1952
Dacca 1.52) at page 164 of the report Guha, J. expressed his agreement with certain
decisions taken by the High Courts of Calcutta, Allahabad and Madras to the effect that
cause of action is not a general ground of jurisdiction recognized in International Law
and no foreign judgment can be regarded as given by Court of competent jurisdiction
simply on the ground that the cause of action arose within its jurisdiction and by the local
law of the foreign State etc.

9. Mr. Saeed also drew our attention to Cheshire and North's Treatise on Private
International Law (13th Edition) where the authors recorded their opinion at page 420 in
the-following words:

40 of 1
"According to the decisions that have dealt with the matter up to the present, it is
undoubted that the various circumstances considered above exhaust possible cases in
which a foreign Court possesses international competence. Thus it is not sufficient that
the cause of action, as for instance a breach of contract or a commission of a tort accrued
in foreign country."

10. Indeed Mr. Saeed appears to be correct in asserting that under the Traditional
Common Law Rules of-Private International Law an action on the basis of a foreign
judgment could only be maintained if the defendant in the aforesaid judgment was a
resident or at least physically present in the foreign country at the time of commencement
of proceedings or had submitted to or agreed to submit to the jurisdiction of such foreign
Court. The mere fact that the cause of action had accrued within the jurisdiction of such
Court would not confer competence upon such Court in an International sense so as to
make its judgments recognizable and enforceable in Britain. The Privy Council and the
King's Bench decision in Sardar Gurdyal Singh v. Mahraja of Farid Kot (1894 AC 670)
and Emanuel v. Symon (1908) 1 KB 302) could be treated as the leading authorities for
this proposition.

11. Mr. Raja Qureshi learned counsel for the respondent however, argued that once the
Courts in United Kindgom had exercised jurisdiction in the matter the decision of such
foreign Courts ought to be treated as conclusive in view of the subsequent
pronouncement of the Privy Council in Brijlal Ramjidas and another v. Govindram
Gordhandas Seksaria and others (PLD 1947 PC 150). In the aforesaid case a controversy
had arisen before a Bombay High Court as to whether a judgment of the High Court of
Indore (which was a foreign Court) for the purpose of section 13,, C.P.C was rendered by
a Court of competent jurisdiction. It was not disputed that the parties were amenable to
the jurisdiction of Courts in Indore but the respondent had averred that the District Judge
and not the High Court was competent to adjudicate upon the subject-matter. The
objection was upheld. by the Bombay High Court but the Privy Council reversed the
findings holding that in the aforesaid context the views taken by the foreign Court i.e. the
Indore High Court was conclusive. In our humble opinion the above pronouncement
seems to indicate that when the controversy pertains to the jurisdiction of a particular
forum within a foreign country the-view taken by such foreign Courts ought to be
accorded sanctity. Nevertheless when the question of amenability of a non-resident
foreigner to the jurisdiction of the Court of a particular country is involved the matter has
to be examined from an International Law perspective.

12. Moreover, learned counsel argued that in the statement of claim (plaint) it was clearly
asserted that the cause of action accrued within the jurisdiction of the foreign Courts
where the contract between the parties had been entered and payment had to be made by
the appellants. He contended that under Order 11, Rule 1 of the Supreme Court Rules
foreign Courts could exercise jurisdiction over non-resident foreigners in matters where
cause of action had accrued within their jurisdiction and in the instant case summons
were actually served upon the appellants and one of them responded to the same, sought
time, but did not appear on the date of hearing. This statement of the law appears to be
correct and we have noticed that Order 11 of the Supreme Court Rules is similar to
section 20 of our C.P.C. where a Court can exercise jurisdiction if the cause of action has
accrued within its limits irrespective of the residence of the defendant.

13. Indeed as far as question of exercise of jurisdiction of British Courts over non-
resident foreigners is concerned the common law principles seem to have stated in
Cheshire and North quoted above in Chapter-12. Several rules premised on judgments of
high, authority have been stated at pages 302--305 and it appears that British Courts are
competent to exercise jurisdiction where a claim is brought to enforce, rescind, dissolve
or otherwise affect a contract or to recover damages or, obtain any other remedy in
41 of 1
respect of breach of contract in cases where a contract was made within the jurisdiction
of such Courts or the breach is committed within such jurisdiction. We have gone through
the statement of claim which is available in the files pertaining to the execution
application and it appears that both these conditions are satisfied. This fortifies Mr.Raja
Qureshi's contention to the effect that it could not be contended, from the stand-point of
English Law that the Courts pronouncing judgement had no jurisdiction to do so,

14. Nevertheless, the cases and the statement of law relied upon by Mr. Muhammad Ali
Saeed presents a somewhat anomalous situation that whereas the English Courts would
assume jurisdiction over a non-resident foreigner in a case like the present one, they
would decline to recognize or enforce a foreign judgment where jurisdiction in similar
circumstances has been assumed by a foreign Court. This anomaly appears to be
acknowledged by English Courts and jurists and therefore, in certain cases it has been
held that the power of the Court to allow service of motion in foreign countries (which is
discretionary under Order 11, Rule 1 of the Supreme Court Rules) ought to be exercised
with extreme caution.

15. At this stage it may be mentioned that the above mode of resolving the anomaly may
not be appropriate in Pakistan where section 20, C.P.C. unlike Order 11, rule 1 of the
Supreme Court Rules of England, does not leave any discretion with the Court and
requires it to entertain a suit even against a non-resident foreigner as long as it can be
shown that the cause of action accrued within the territorial jurisdiction of the Court. In
this context it might be pertinent to refer to the pronouncement of the India in
Viswanathan v. Abdul Wajid AIR 1963 SC 1 relied upon by Mr. Raja Qureshi. In this case
question of recognition of a judgment of a Court in Bangalore which at the relevant time
was part of Mysore and a foreign Court for the purpose of section 13, C.P.C. directing the
defendants (who were residing outside the State) to re-transfer the shares of a Company
(which also had its offices outside Mysore) arose. It was observed that there was no
general rule of Private International Law that a Court could in no event exercise
jurisdiction in relation to persons, matters or property outside jurisdiction. The Supreme
Court of Canada as well in some recent pronouncements taken a radically different
approach towards recognition. In Morguard Investment Limited v. D.C. Saboya (1991) 76
DLR 256 the Court dealing with the question of recognition and enforcement of foreign
judgments applicable in inter-provincial cases declined to follow the rule laid down in
Emanuel v. Symon (1908) 1 KB 302 and proceeded to hold that a greater degree of
recognition and enforcement within the Canadian Federation was required than had been
the case under English Common Law Rules, keeping in view the need in modern time to
facilitate flow of wealth, skills and people across State lines. Though this case related to
recognition of a judgment within the Canadian Federation its principles were extended
even to judgment delivered in sovereign foreign States in the subsequent case of Mouses
v. Shore Boat Builders Limited (1993) 106 DLR (4th) 654. In this case the respondent, a
British Colombian Company having no place of business in Alaska (U.S.A.) had built a
boat for the appellant and upon some defects having been found the appellant brought an
action for damages and obtained a judgment from an Alaskan Court. Holding that
judgments ought to be recognized and enforced by a Canadian Court. The Supreme Court
held that the subject-matter had a real and substantial connection with Alaskan Courts
where the contract was performed and the right to claim damages for breach accrued. It
was observed that "it would be odd indeed if a Canadian Court would refuse to recognize
and enforce a judgment of a foreign Court in a situation where the foreign Court assumes
jurisdiction on the same basis on which Canadian Courts assume jurisdiction".

16. Another aspect of the matter that has caused us some anxiety stems from the
difference between sections 13 and 44-A, C.P.C. Under section 13 a foreign judgement is
not enforceable per se but a suit on its basis has to be tiled though it is conclusive with
respect to a matter adjudicated upon between the parties subject to six specified
exceptions. The first exception being that it will not be conclusive when it has not been
passed by a Court of competent jurisdiction and the authorities cited before us show that
42 of 1
competence is to be reckoned in an international sense and this exception would become
applicable if the defendant was not residing within the territorial jurisdiction of the
foreign Court at the time of institution of the action or had not voluntarily submitted to
the jurisdiction of such Court. Section 44-A on the other hand stipulates that the decree of
superior Court of United Kingdom can be directly executed as if it has been passed by a
District Court. Clause (3) of this section however, stipulates that the Court shall refuse
execution if it is shown that it falls within any of the six exceptions contained in section
13. This appears to lead to a somewhat anomalous situation that the decree of a Court in
United Kingdom which is directly executable as a decree of a District Court in Pakistan
may become unexecutable merely because that Court was not considered to possess
jurisdiction in an "international" sense notwithstanding the fact that under its own system
of laws it had full powers to pass such decree.

17. These questions do not appear to be considered in the weighty body of the case-law
cited before us. Nevertheless since we are bound by pre Partition pronouncement of the
Privy Council in Sardar Gurdyal Singh's and of a Division Bench of this Court in Ghulam
Ahmed's case. We are constrained to hold that the decree of the English Court could not
be deemed to have been passed by a Court of competent jurisdiction as admittedly
appellants were not residing within the jurisdiction of such Court at the time of institution
of the action.

18. Mr. Raja Qureshi alternatively submitted that the appellant had submitted to the
jurisdiction of the foreign Court and therefore, the decree was duly enforceable. In this
context learned counsel pointed out that from the record of the execution application that
notice of writ of summons was received by the appellant but failed to appear on the given
date whereupon ex parte judgment was passed. He applied for setting aside such
judgement and by order dated 4th April, 1991 the application was dismissed after hearing
counsel for both parties. We have gone through the cases cited by learned counsel for the
parties and it seems that when a defendant appeared before a foreign Court only to protest
against assumption of jurisdiction he cannot be assumed to have voluntarily submitted to
such jurisdiction. Nevertheless, when he also takes up defences on merits a clear
submission can be inferred. Similarly when he applies to have a default judgment set
aside and appeals as to merits of the claim such appeal would normally amount to
submission to jurisdiction. Nevertheless, if the appeal or application is merely premised
upon a jurisdictional issue it would not be treated as submission. Unfortunately none of
the applications moved by the appellants for setting aside the ex parte judgment have
been placed on record.

19. In the circumstances since there is no material to show that the appellant had
submitted to the jurisdiction of the Courts in Britain and in view of the binding
precedents referred to in para. 17; we are constrained to allow, this appeal on the ground
that the foreign judgment was not pronounced by a Court of competent jurisdiction. In
view of the above it is not necessary to examine the remaining contentions of Mr.
Muhammad Ali Saeed. The impugned judgment of the learned Single Judge is therefore,
set aside, but there shall be no order as to costs. A copy of this judgement, may be
forwarded to the Secretary, Ministry of Law, Government of Pakistan and Secretary,
Pakistan Law Commission to consider the desirability of amending the relevant
provisions of C.P.C. in view of the anomalies pointed out.

M.B.A./M-483/K Order accordingly.

43 of 1
2001 C L C 1224

[Karachi]

Before Zia Perwez, J

Mrs. HASEENA---Plaintiff

versus

Mrs. SHAFQAT MALIK ---Defendant

Suit No.542 and Civil Miscellaneous Application No.10629 of 2000, decided on 16th
March, 2001.

Specific Relief Act (I of 1877)---

----S. 12---Civil Procedure Code (V of 1908), O.XII, R.6---Specific performance of


agreement to sell---Admission of facts in written reply--Effect ---Plaintiff was a foreign
national---Defendant demanded "No Objection Certificate" issued by Government,
regarding permission to purchase property---Execution of agreement was admitted by the
defendant and at the time of receipt of consideration amount the defendant knew about
the nationality of the plaintiff---Refusal to execute sale-deed on such
ground---Validity---Receipts of the amount of sale consideration and handing over the
possession of the suit property was admitted in clear, unambiguous, unqualified and
unequivocal terms---Only objection pertaining to issue of "No-Objection Certificate" had
been overcome as N.O.C. had since been issued to the petitioner by the
Government---Where facts were admitted by the defendant, application under O.XII, R.6,
C.P.C. was allowed and the suit was decreed in circumstances.

Sheikh Mahmood Ahmad v. Dr. Ghaith Pharaon and 3 others 1987 CLC 2131; H.
Gharibullah v. Mst. Mumtaz Begum and others 1990 CLC 1609; Mercantile Fire and
General Insurance Co. of Pakistan v. Messrs Imam & Imam Ltd. 1989 CLC 2117;
Premsuk Das Assaram v. Udairam Gunga Bux ILR 45 Cal. 138; J. C. Galstaun v. E. D.
Sasoon AIR 1924 Cal. 190: Devi Narain v. Hassanand AIR 1927 Sindh 25; Abdul
Rehman & Brothers v. Parbati Devi AIR 1933 Lah. 403 and Kassamali Bhoy v. Shaikh
Abdul Sattar PLD 1966 Kar 75 ref.

Raja Sikandar Khan Yasir for Plaintiff.

Iftikhar Javed Qazi for Defendant.


44 of 1
Date of hearing: 22nd February, 2001.

JUDGMENT

C.M.A. No. 10629 of 2000. By this application under Order XII, Rule 6, read with
section 151, C.P.C. the plaintiff seeks judgment against the defendant on the ground of
admission of facts set forth in the pleadings.

The plaintiff filed the present suit for Specific Performance of Contract and Injunction in
respect of an apartment situated on second floor of Plot No.C-5-C having a covered area
of 960 square feet, situated in Badar Commercial Street No.5, Phase V, Extension,
Pakistan Defence Officers' Housing Authority, Karachi (hereinafter referred as the "said
Apartment"), purchased from the defendants, who are owners and builders under an
agreement of sale executed between the parties, dated 27-11-1999 for an agreed
consideration of Rs.10,50,000. The plaintiff made payment of the total amount of sale
consideration as acknowledged by the defendants vide receipt, dated 27-11-1999, for a
sum of Rs.2,50,000 and second receipt for a sum of Rs.8,00,000 dated 17-12-1999. The
physical possession of the said Apartment was handed over by the defendant to the
plaintiff and acknowledged in writing duly signed by the parties on 17-12-1999. On
20-1-2000, Pakistan Defence Officer's Housing Authority allowed the plaintiff to secure
the property by their Letter No.PD/SSI/WL-5403 allowing the plaintiff to make addition
by fixing steel grill and outer door, window and balconies.

The defendant in her written statement admitted the sale of the said apartment under the
aforesaid agreement of sale, dated 27-11-1999 for a total consideration of Rs.10,50,000
together with the acknowledgement of the receipt of total sale consideration of
Rs.10,50,000. It is also admitted that the possession of the said apartment was handed
over by the defendant to the plaintiff. The only objection taken by the defendant to the
suit is that the plaintiff being a foreigner is required to obtain an N.O.C. from the
Government of Pakistan for purchase of immovable property which has been denied to
her and as such the said apartment cannot be transferred in favour of the plaintiff by
execution of registered sale-deed/sub-lease.

Learned counsel for the plaintiff has placed reliance on the admission contained in para.2
of the written statement admitting the execution of agreement of sale on 27-11-1999 and
receipt of the total sale consideration of Rs.10,50,000. The admission as to the handing
over of the physical possession of the said apartment is contained in the written
statement. In addition the execution of the documents is also not denied. photocopies
whereof are annexed to the plaint. The original documents, filed by the plaintiff in Court
are as under:--

(1) Original Sale Agreement, dated 27-11-1999 executed between the plaintiff and
defendant.

(2) Original payment receipts, dated 27-11-1999 of Rs.2,50,000 issued by the defendant.

45 of 1
(3) Original payment receipt, dated 17-12-1999 of Rs.8,00,000 issued by the defendant.

(4) Original Letter dated 17-12-1999 pertaining to handing over of physical possession to
the plaintiff by the defendant.

(5) Original Letter No.PD/SSI/WL-5403, dated 20-1-2000 of Pakistan Defence Officers


Housing Authority regarding grant of permission to the plaintiff with regard to fixation of
steel grills.

(6) Letter No. PD/107-G dated 14-9-2000 of Pakistan Defence Officers Housing
Authority declaring rooftop over all commercial building is common property of
flat/shop.

(7) Copy of complaint, dated 29-3-2000 to the Deputy Inspector-General of Police.

(8) Notice, dated 10-2-2000 sent by the defendants' counsel Mr. Iftikhar Javed Qazi.

(9) Reply of plaintiff through her counsel vide letter, dated 28-3-2000.

(10) Original Letter No.3/13/2000/PE(III), dated 28-6-2000 of Government of Pakistan,


Ministry of Interior and Narcotics Control (Interior Division), Islamabad with regard to
the processing of case of the plaintiff for issuance of N.O.C.

(11) Copy of N,O.C. vide No. SO/(MC)HD/Proty/6-1/00, dated 15-7-2000 from


Government of Sindh, Home Department, Karachi.

(12) Copy of NOC vide No.SECY(RS&EP)BOR/NOC/2000-167, dated 19-7-2000.

(l3) Original Letter regarding N.O.C. vide No.3/13/2000-PE-111, dated 8-1-2001 of


Government of Pakistan Ministry of Interior and Narcotics Control (Interior Division),
Islamabad for purchase of flat in question. .

(14) Original Letter vide No.3/13/2000-PE(III), dated 10-1-2001 of Government of


Pakistan, Ministry of Interior and Narcotics Control (Interior Division), Islamabad.

46 of 1
(15) Original Letter No.3/13/2000/PE(III), dated 14-2-2001 issued by the Government of
Pakistan, Ministry of Interior and Narcotics Control, (Interior Division), Islamabad for
confirmation and validity of NOC of Government of Pakistan.

The learned counsel for the plaintiff stated that it is due to unwarranted steps taken by the
defendant to deprive the plaintiff and avoid the specific performance of the agreement,
the defendant made complaints to various authorities to prevent the issue of N.O.C. and
thereafter its withdrawal vide Letter No.SO(MC)(HD)/6-1/2000, dated 20-12-2000,
issued by the Government of Sindh. However, the matter finally rests with the letter
issued by Government of Pakistan, Ministry of Interior and Narcotics Control (Interior
Division), Islamabad bearing No.3/13/2000/PE(III), dated 14-2-2001 confirming the
validity of NOC of Government of Pakistan who is competent to grant the N.O.C. and as
such the only objection to the execution of registered sale-deed in favour of plaintiff by
the defendant with respect to the said apartment is removed.

Learned counsel for the defendant has opposed this application on the ground that the
N.O.C. has been withdrawn by the Government of Sindh Home Department vide Letter
No.SO(MC)(HD)/6-1/2000, dated 20-12-2000 and Letter No.SO(MC)(HD)/6-1/2000,
dated 12-2-2001 and has also produced these documents.

From the pleadings and documents available on record it appears that differences
developed between the parties and the matter was referred to the police and it is only after
these incidents that the defendant has taken steps to seek the withdrawal of N.O.C.
granted by the Government to the plaintiff. In this context the learned counsel for the
defendant further stated that the plaintiff after entering upon the said Apartment tried to
take over control of the entire building which is not acceptable to the defendants. It is an
admitted fact that neither of the parties can claim their exclusive right to the common
spaces staircases or of common utilities in a building comprising of several apartments.
However, this is not a valid ground for refusal of execution of sale-deed either and the
aggrieved party can seek remedy from the Court if necessary.

Reliance is placed on the case of Sheikh Mahmood Ahmad v. Dr. Ghaith Pharaon and 3
others 1987 CLC 2131 and H. Gharibullah v. Mst. Mumtaz Begum and others 1990 CLC
1609.

In Shaikh Mahmood Ahmed's case (supra) where an application was made under section
151, C.P.C. stating that the plaintiff was repeatedly offered to collect the cheque in
respect of his dues payable by the defendants. The statement was considered to be
sufficient admission of the liability and order was passed accordingly. In H. Gharibullah's
case (supra) the Court held the statement of admission of liability by the defendants in
their written statement and also observed that omission of specific denial in the written
statement constitutes an admission leading to the judgment against the defendants who
admitted the claim in their written statement under Order 12, Rule 6 the point also came
under consideration in the case of Mercantile Fire & General Insurance Co. of Pakistan v.
Messrs Imam & Imam Ltd. 1989 CLC 2117 and it was observed that in order that an
admission may qualify, as such, under Order 12, Rule 6, C.P.C., the same has to be clear,
unambiguous, unqualified and unequivocal and the amount recoverable must be due and
recoverable in the action in which the admission is made. Reference in this connection
may be made to the case of Premsuk Das Assaram v. Udaram Gunga Bux ILR 45 Cal.
138, the view of Mooker Jee and Rankin, JJ. In the case of J.C. Galstaun v. E.D. Sasoon
AIR 1924 Cal. 190, the case of Devi Narain v. Hassanand AIR 1927 Sindh 25, the
opinion of Broadway, C.J. and Abdul Qadar, J., in the case of Abdul Rehman & Brothers

47 of 1
v. Parbati Devi AIR 1933 Lah. 403 and the dictum of A.S. Farooqui, J. in the case of
Kassamali Bhoy v. Shaikh Abdul Sattar PLD 1966 Kar. 75.

In Shaikh Mahmood Ahmed's case (supra) plaintiff lodged a claim for recovery of
amount. In response the defendant moved an application alongwith a cheque for part of
the amount was enclosed. The Court held the same to be an admission and decreed the
suit to the amount of the cheque submitted alongwith the application in Court and passed
judgment to the extent of admission without prejudice to the right of the plaintiff to
proceed with the balance amount of claim.

In view of the above admission contained in the pleadings, the statements made in
paragraphs Nos.2, 3 and 4 to the effect of admission of the fact of execution of agreement
of sale. Both the receipts, dated 27-11-1999 and 17-12-1999 described the plaintiff as a
National of Netherlands and even her Passport No.N-75300265 is mentioned therein
which confirms the fact that defendant was aware that the plaintiff is a foreign national
since that time. These receipts of the amount of sale consideration and the handing over
possession of the property that is the subject-matter of the claim are all admitted and are
clear, unambiguous, unqualified and unequivocal admission. The only objection
pertaining to issue of N.O.C. has been overcome. These admissions are further supported
by the original documents produced before the Court details whereof are already
mentioned hereinabove. The documents are also admitted by the learned counsel for the
defendants at the time of hearing of the application.

The above facts lead to-the conclusion that the plaintiff is entitled to the specific
performance of the contract and the injunction restraining the defendants from
interfering, and to the relevant injunction as prayed. Accordingly, this application under
Order XII, Rule 6 (bearing C.M.A. No. 10629 of 2001) is allowed and the suit is decreed
in favour of the plaintiff as prayed but with no order as to costs. The listed applications
are accordingly disposed.

Q.M.H./M.A.K./H-36/K Suit decreed.

48 of 1
P L D 1998 Karachi 104

Before Rana Bhagwan Das, J

GROSVENOR CASINO LTD.---Decree-Holder

versus

ABDUL MALIK BADRUDDIN---Judgment-Debtor

Execution No.77 of 1991, decided on 10th December, 1997.

----Ss. 13 & 44-A---Limitation Act (IX of 1908), Art. 181---Execution of foreign


decree---Bar of limitation---Effect---Right to apply for execution of foreign decree would
ordinarily arise from date of decree unless operation thereof, was suspended---Foreign
decree having been passed on or about 7-10-1987, execution of same was presented in
office of High Court on 13-8-1991, which on the face of it was filed beyond period of
limitation of three years prescribed by law---Execution application was, thus, barred
under Art. 181, Limitation Act, 1908.

LINK1

LINK2

1997 SCMR 323; Shaik Ali v. Shaik Muhammad AIR 1967 Mad. 45 and Lukhpat Rai
Sherma v. Atma Singh AIR 1971 Punj. & Har. 476 ref.

(b) Civil Procedure Code (V of 1908)---

----S. 13(f)---Contract Act (IX of 1872), S.30---Foreign judgment/decree--Subject-matter


of foreign judgment/decree was not only completely violative of public policy but also
repugnant to Injunctions of Islam---Such decree was not enforceable in Pakistan.

LINK1

LINK2

49 of 1
Raja Khushbakht--ur-Rehman v. The Province of Punjab PLD 1986 FSC 49; Mushtaq Ali
v. Government of Pakistan PLD 1989 FSC 60; by Wahaba Zuhailee Vol. V, p.178 and
Federation of Pakistan v. Mushtaq Ali, Advocate PLD 1992 SC 153 ref.

(c) Civil Procedure Code (V of 1908)---

----S. 13 .& O. V, Rr. 17, 20---General Clauses Act (J~ of 1897), S.27--Presumption of
service of process---Service of process duly accepted as valid by Foreign Court---Such
process could not be lawfully questioned before High Court being neither opposed to
manner of service of process as provided in Civil Procedure Code, 1908, nor any other
law---Procedure adopted by Foreign Court being in consonance with presumption of
service arising under S.27, General Clauses Act, 1897, would be valid.

LINK1

LINK2

Arif Khan for the Decree-holder.

J.H. Rahimtoola for the Judgment-debtor.'

Date of hearing: 11th November, 1997.

JUDGMENT

In this execution application under section 44-A, C.P.C. read with rule 309 of Sindh Chief
Court (O.S.) Rule. for enforcement of a decree passed by the High Court of Justice
Queen's Bench Division, England, respondent/judgment-debtor has raised the following
objections and exceptions to show that the decree cannot be executed against him-

(1) that the execution by reason of Article 181 of the First Schedule to the Limitation
Act being filed beyond three years from the date of decree is barred by law.

(2) That the suit to recover gaming/gambling debt cannot be decreed and enforced in
Pakistan by reason of section 13(f), C.P.C. and section 30, Contract Act.

(3) That the decree was passed without jurisdiction inasmuch as no service of process
was done on him according to Pakistan law and that he had not submitted to the
jurisdiction of English Court.

50 of 1
2. Decree-holder named above filed a claim for payment of Pounds 25,000 together with
Pounds 1,709,25 by way of interest and Pounds 118 as costs in respect of amount of six
dishonoured cheques against the judgment-debtor in which according to the decree, the
writ was duly served on 26th February, 1987 upon the judgment-debtor who did not
acknowledge service of the writ and did not give notice of intimation to them hence the
claim was decreed as prayed less Pounds 1000 paid by the judgment-debtor since the date
of issue of writ.

3. Execution application was presented and registered in the office of this Court on 13-8-
1991 for recovery of the amount in Pak currency with interest/compensation at 5-1 /2 % .

4. Objections to the execution of the foreign Court decree filed on behalf of the
judgment-debtor, were dismissed by Mr. G.H. Malik, J. (as he then was ) for the reason
that the judgment-debtor failed to comply with the requirements of Order XXI, rule 23-A,
C.P.C. by a short order dated 31-5-1992, detailed reasons wherefor were recorded on 6-6-
1992. This order was impugned in High Court Appeal No. 94/1992 which came up before
a Division Bench consisting of S. Haider Ali Pirzada and S. Khurshid Hyder Rizvi, JJ. (as
they then were) who allowed the appeal and recalled the impugned order expressing the
view that section 44-A, C.P.C. is a self-contained Code as regards execution of a foreign
decree and that in absence of any provision in the aforesaid section right of hearing
objections without furnishing security cannot be curtailed. Judgment in High Court
Appeal was impugned in Civil Appeal No.K-257/1993 which was dismissed vide
judgment dated 31-12-1996 recently published in 1997 SCMR 323.

5. Section 44-A, C.P.C. governing the decree in hand provides for execution of certain
types of foreign judgments and decrees. By reason of this section, the judgments of the
superior Courts of the United Kingdom and other reciprocating territories can be
executed in Pakistan upon filing a certified copy of the same in a District Court and
thereafter such decree shall be treated as if it were a decree passed by the District Court
and all the provisions relating to execution contained in C.P.C. shall be attracted thereto.
It is spelt out from the aforesaid provisions of law that certified copy of such decree shall
be filed alongwith a certificate from such superior Court stating the extent if any to which
it has been satisfied or adjusted and such certificate shall be conclusive proof of the
extent of such satisfaction for the purpose of execution. By reference to clauses (a) to (f)
of section 13, C.P.C., it is stipulated that the District Court shall refuse execution of any
such decree if it is shown to the satisfaction of the Court that the decree falls within any
of such exceptions. It further seems that the provisions of section 47, C.P.C. as from the
filing of the certified copy of the decree shall apply to the proceeding of a District Court
executing a decree under this section. It may not be out of context to produce hereunder
the provisions contained in section 13, C.P.C. which reads as under:

" 13. When foreign judgment not conclusive.--A foreign judgment shall be conclusive as
to any matter thereby directly adjudicated upon between the same parties or between
parties under whom they or any of them claim litigating under the same title except--

(a) Where it has not been pronounced by a Court of competent jurisdiction;

(b) Where it has not been given on the merits of the case;

51 of 1
(c) Where it appears on face of the proceedings to be founded on an incorrect view of
International Law or a refusal to recognise the law of Pakistan in cases in which such law
is applicable;

(d) Where the proceedings in which the judgment was obtained are opposed to
natural justice;

(e) Where it has been obtained by fraud;

(f) Where it sustains a claim founded on a breach of any law in force in Pakistan. "

6. Adverting to the objection as to the execution being patently hit by the provisions of
Limitation Act, a reference may be made to Article 181 of the First Schedule to the
Limitation Act which prescribes a period of three years for an application for which no
period of limitation is provided elsewhere in the schedule or by section 48 of the Code of
Civil Procedure, 1908. This Article is a residuary Article which is available in cases in
which no other Article dealing with the application under the C.P.C. is 'attracted. The
.period of limitation so prescribed would commence from the date when the right to
apply accrues. The right to apply in such cases would ordinarily arise from the date of
decree unless the operation of the decree is suspended. In the present case as would be
seen from the decree itself it was passed on or about 7th October, 1987 whereas
execution was presented in the office of this Court for the first time on 13-8-1991 which
on the face of it was filed beyond the period prescribed by law. There can be no exception
to the view that such application was filed far beyond the expiry of the period fixed by
the Limitation Act and notwithstanding the view expressed in Shaik Ali v. Shaik
Muhammad (AIR 1967 Madras 45), that Limitation Act does not apply to execution of
foreign decree that the view taken in Lukhpat Rai Sherma v. Atma Singh (AIR 1971
Punjab & Haryana 476) runs counter to the Madras view. It was ruled by a Division
Bench in this case that though the decree of a foreign Court has to be treated as a decree
passed by the District Court for the purpose of execution, application filed for execution
for such decree cannot be entertained where neither any step in the execution nor the step
in aid of such execution has been taken by the decree-holder in any Indian Court within
three years from the date of passing of such foreign decree. The view taken by Madras
High Court was also distinguished by our own Supreme Court in 1997 SCMR 323 as the
ratio decidendi of the above case seems to be that section 44-A(a), C.P.C. is confined to
the powers and the manner of execution and has nothing to do with the law of limitation
and that the fiction created by the subsection goes no further and is not for all purposes
but is designed to attract and apply to the execution of foreign judgment by the District
Court, its own power of execution and the manner of it in relation to its decrees without
reference to limitation.

7. It is, thus, evident that the execution application is barred by law having been filed
beyond the period prescribed in Article 181 of the First Schedule to the Limitation Act. I
am least impressed by the contention raised on behalf of the decree-holder that the right
to apply accrued after obtaining certificate relating to non-satisfaction of decree from the
English Court which passed the decree. Learned counsel vainly referred to such
certificate dated 5th March, 1991 but this certificate alone would neither extend the
period of limitation nor deferred the commencement of period of limitation for making
application for execution of a foreign decree. Suffice however to say that affidavit for
obtaining such certificate was sworn before the prescribed officer of the English Court
only on 7th January, 1991 and filed before the Court on 16th January, 1991 by which date
execution itself had become barred by law. It may further be pertinent to observe that the

52 of 1
execution could be filed within the period prescribed by law and certificate with regard to
non-satisfaction of the decree filed subsequently before the executing Court.

8. Adverting to the second contention raised on behalf of the judgment debtor that law
suit to recover gaming debt cannot be enforced in Pakistan by reason of section 13(f),
C.P.C. which postulates an exception clause to the conclusiveness of a foreign judgment.
This clause provides for an exception where a foreign judgment sustains a claim founded
on a breach of any law in force in Pakistan. While a foreign judgment shall be conclusive
as to any matter thereby directly adjudicated upon between the parties subject to
exceptions enumerated in clauses (a) to (f) and by reason of section 14, C.P.C. there is a
presumption to the effect that such judgment was pronounced by a Court of competent
jurisdiction unless the contrary appears on the record; but such presumption may be
displaced by proving want of jurisdiction. It is nobody's case that the English Court
which passed the decree acted without jurisdiction but such decree can always be
attacked and assailed in collateral proceedings like execution or satisfaction of the decree
and more particularly under clauses (a) to (f) of section 13, C.P.C. It is urged that
provision of section 16 of the Gaming Act, 1968 under which the cheques were paid to
the plaintiff renders the recovery of such debt unlawful even in England. It is more
particularly repugnant to section 30 of the Contract Act. Latter provision of law stipulates
that agreements by way of wager are void; and no suit shall be brought for recovering
anything alleged to be won on any wager, or entrusted to any person to abide the result of
any game or other uncertain event on which any wager is made. If the amount was paid to
the JD by reason of a wagering contract, it may be completely violative of public policy
and thus not enforceable in this country. Needless to point out an act of gaming and
gambling is not only prohibited by Gambling Ordinance, 1961 but also repugnant to
Injunctions of Quran and Sunnah which are embedded in every statute and any statute
being repugnant to such injunctions would be void. It may further be observed that the act
of horse-racing is regulated by law in Pakistan, betting on such races has been declared
repugnant to Injunction of Islam. I am fortified in this view by a Full Bench judgment of
Federal Shariat Court of Pakistan in Raja Khushbakhtur-Rehmamv. The Province of
Punjab (PLD 1986 Federal Shariat Court 49). In this Shariat petition, petitioners
challenged the vires of section 2(b) of Punjab Prevention of Gambling Ordinance, 1978
which was heard by a Full Bench consisting of five Judges. The conclusion arrived at by
the Full Bench was that betting of horses in present form is gambling--Bilateral betting
being gambling is forbidden in Islam--Tradition of Prophet of Mohallil is proved only in
case of horses being trained for Jehad and was not available to allow the gambling-
Betting with Mohallil was therefore not allowed--Betting by spectators of horse racing
are not permitted in Islam. No contrivance can be allowed to operate to achieve a
forbidden result. Horse-races are excepted from general restriction, only because of their
need and necessity in Jehad against enemies of Allah and Islam.

8-A. Although no precedent is required for the view I have taken hereinabove, there is a
Full Bench decision by Federal Shariat Court in Mushtaq Ali v. Government of Pakistan
(PLD 1989 Federal Shariat Court 60) in which the Federal Shariat Court has elaborately
discussed the lottery scheme in the wake of sections 294-A and 294-B, P.P.C. After an
exhaustive and comprehensive analysis of merits and demerits of the lottery scheme, the
Court observed as under:

"Be that as it may, such a payment over and above the amount of loan or contribution is
like interest, and so prohibited as stated by Wahaba Zuhailee Vol. V, page 178. It says
Further, the very way of luring people to contribute towards objects which are pious or
charitable appears to be a rebellion against the Injunctions of Islam. It is neither the fear
nor love of Allah but the temptation of a windfall that tempts the investors to bring
contributions for the stated purposes."

53 of 1
Recalling attention to verses 8:60 and 34:39 the Court observed that the net result is that
luring people to contribute for pious and charitable causes on the temptations of monetary
and worldly gains in such schemes would not only amount to paying exorbitant interest in
that form but also defeating the Qur'anic dictates. In the ultimate analysis the Court
declared section 294-A as repugnant to the Injunctions of Qur'an and Sunnah and desired
the President of Pakistan to take steps for amending sections 294-A and 294-B suitably.

The verdict was assailed by Federation of Pakistan before Shariat Appellate Bench of the
Supreme Court which was dismissed. The judgment is reported as Federation of Pakistan
v. Mushtaq Ali, Advocate PLD 1992 SC 153. The apex Court unanimously declared as
under:

"(1) Section 294-A of the Pakistan Penal Code in so far as it exempts " State lottery or
a lottery authorized by the Provincial Government" is repugnant to the Injunctions of
Islam;

(2) Section 294-B of the Pakistan Penal Code in so far as it by its generality prohibits
free trade in commodities on fair market price also, is repugnant to the Injunctions of
Islam."

Indeed the statement of claim forming the subject-matter of the decree expressly
stipulates that the claim for the sum of Pounds 25,000 against the defendant as the drawer
of a series of six cheques payable to the plaintiff which cheques were paid to the plaintiff
in accordance with the provisions of section 16 of the Gaming Act, 1968 which was
complied with in all respects. A glance at section 16 as referred to above renders such
credits for gaming neither lawful nor enforceable ,at law. For these reasons as well the
decree is not capable of execution as such transaction would fall within the ambit of
section 30 of the Contract Act read with section 13(f), C.P.C. besides being hit by the
express prohibition contained in Shariat Law.

9. Adverting -to the third contention that the decree was passed without jurisdiction as the
service of process was not effected on the judgment-debtor in accordance with the
Pakistan Law, there is hardly any merit in this submission as well. It is doubtful whether
the service of writ before the England Court would be regulated by the law applicable in
Pakistan and in all fairness the Civil Procedure Code in relation to service of writ as
applicable in English might be attracted in the case in hand. The judgment under
consideration expressly shows that the writ relating to the claim was duly served on 26th
day of February, 1987 upon the defendant by ordinary post first class mail in an envelope
duly pre-paid and properly addressed to him at his address who did not acknowledge
service of the writ and did not give notice of intention to defend. There is an affidavit of
plaintiff's Legal Manager in support of the judgment filed before the English Court that
the said copy writ was duly sealed with the seal of the Court office out of which it was
issued and was accompanied by a prescribed form of acknowledgment of service; the
said letter or envelope had not been returned by the post office through the dead letter
service and in his opinion and in the opinion of the plaintiff, the said writ of summon so
posted to the said defendant will have come to his knowledge within seven days after the
said date of posting thereof. In fact, the service of process was duly accepted and upheld
by the English Court which cannot be lawfully questioned before this Court in execution
proceedings as it is neither opposed to the manner of service of process as provided in the
Civil Procedure Code nor any other law. The procedure adopted by the English Court is
also in consonance with the presumption of service arising under section 27 of the
General Clauses Act, 1897 which has been generally accepted by superior Courts in this
country. No' doubt JD in his objections has questioned the service of process on him for
54 of 1
the I reason that in February, 1987 he was not in England nor residing in 66, Devon Port
South Wick Street, London W-2. To my mind, mere objection would not be sufficient to
defeat the decree or to refuse execution. On the contrary decree holder has placed on
record various documents including the letters from solicitors of the JD to demonstrate
that he was residing at the address disclosed in the claim filed against him. At any rate,
this Court cannot go behind the decree and I am not inclined to accept the solitary word
of JD at this belated stage that there was no effective service of process on him or that he
did not reside at the given address. No doubt, the presumption raised by the English
Court and as envisaged in section 27 of the General Clauses Act may be rebuttable in my
opinion judgment-debtor has miserably failed to displace such presumption.

For the aforesaid reasons, execution fails and is hereby dismissed

A.A./G-46/K Execution dismissed

55 of 1
1997SCMR323

[Supreme Court of Pakistan]

Present: Ajmal Mian, Abdul Hafeez Memon

and Mukhtar Ahmed Junejo, JJ

GROSVENOR CASINO LIMITED,

SHAHRAH-E-KAMAL ATATURK, KARACHI---Appellant

versus

ABDUL MALIK BADRUDDIN---Respondent

Civil Appeal No.K-257 of 1993, heard on 17th December, 1996.

(On Appeal from. the judgment dated 25-2-1992 of the High Court of Sindh, Karachi,
passed in H.C.A. No.94 of 1992).

(a) Civil Procedure Code (V of 1908)---

----O. XXI, R. 23-A & S. 44-A---Constitution of Pakistan (1973), Art. 185(3)---Execution


of decree passed by a foreign Court---Leave to appeal .was granted to examine whether
O. XXI, R. 23-A, C.P.C. was applicable to the execution of a decree passed by a foreign
Court in terms of S. 44-A, C.P.C.

(b) Civil Procedure Code (V of 1908)---

----S. 13---Analysis of S. 13, C.'P.C.

(c) Civil Procedure Code (V of 1908)---

----S. 44-A---Analysis of S. 44-A, C.P.C.

56 of 1
(d) Civil Procedure Code (V of 1908)---

----O. XXI, R. 23-A---Analysis of O. XXI, R. 23-A, C.P.C.

(e) Civil Procedure Code (V of 1908)---

----Ss. 13, 44-A & O. XXI, R. 23-A---Execution of decree passed by a foreign


Court---Contest by judgment-debtor---Essentials---Foreign judgment/decree can be
assailed on any of the grounds mentioned in Ss.13(a) to 13(f), C.P.C.--Provisions of S.
44-A(3), C.P.C. imposes an obligation on the District Court executing J foreign decree to
refuse the execution of the same if it is shown to its satisfaction that the decree falls
within any of the exceptions specified in S. 13(a) to (f), C.P.C.

A foreign judgment/decree can be assailed on any of the grounds mentioned in clauses (a)
to (1) of section 13, C.P.C., whereas subsection (3) of section 44-A, C.P.C. imposes an
obligation on the District Court executing a foreign decree to refuse the execution of the
same if it is shown to its satisfaction that the decree falls within any of the exceptions
specified in the above clauses (a) to (f) of section 13: The object of deeming provision in
subsection (1) of section 44-A, C.P.C. seems to be to facilitate execution of a foreign
decree in Pakistan by assuming by virtue of fiction of law as if it had been passed by the
District Court in Pakistan, instead of compelling the foreign decree-holder to file a suit on
a foreign judgment which was the position obtaining in India prior to -the incorporation
of above section 44-A in 1937. However, this deeming provision contained in subsection
(1) bf the above section 44-A is to be read in conjunction with subsection (3) thereof in
order to harmonise the above two provisions of the same section. Since subsection (3) of
section 44-A requires an executing Court in Pakistan to refuse the execution of a foreign
decree if it is shown by the judgment-debtor that the decree falls within any one of the
exceptions specified in clauses (a) to (f) of section 13, the same cannot be controlled or
its effectiveness be curtailed by the cumbersome provision of rule 23-A of Order XXI,
C.P.C. This special provision contained in subsection- (3) of section 44-A shall exclude
the application of the general provisions of above Order XXI, Rule 23-A, C.P.C., which is
applicable generally to decrees passed in Pakistan. Additionally subsection (3) of section
44-A, .C.P.C. is a provision of substantive law, whereas Rule 23-A of Order XXI, C.P.C.
is a procedural provision framed under the C.P.C., and, therefore, in case of any
inconsistency, the former shall prevail over the latter. Since the former provision does not
envisage the exercise of the right contained therein by a judgment-debtor subject to
deposit or furnishing of the security of the decretal amount, there seems to be
inconsistency.

Golden Oraphies (Pvt.) Ltd. and 12 others v. Director of Vigilance, Central Excise,
Customs and Sales Tax and others 1993 SCMR 1635 and Neimat Ali Goraya and 7 others
v. Jaffar Abbas, Inspector/Sargeant Traffic 1996 SCMR 826 fol.

Morlays (B'Ham) Ltd. v. Roshanlal Ramsahai and another AIR 1961 Bom. 156 and Sheik
Ali v. Sheik Muhammad AIR 1967 Mad. 45 distinguished.

Qadir Ahmed Siddiqui and 6 others v. Ramzan Ali and 6 others PLD 1977 Kar. 273;
Begum B.H. Syed v. Mst. Afzal Jahan Begum and another PLD 1970 SC 29; Mehreen
57 of 1
Zaibun Nisa v.' Land Commissioner PLD 1975 SC 397; Molasses Trading & Export
(Pvt.) Limited v. Federation of Pakistan and others 1993 SCMR 1905; Golden Oraphies
(Pvt.) Ltd. and 12 others v. Director of Vigilance, Central Excise, Customs and Sales Tax
and others 1993 SCMR 1635 ref.

Qamarul Islam Abbas, Advocate Supreme Court with K.A. Wahab, Advocate-on-Record
for Appellant.

J.H. Rehmatullah, Advocate Supreme Court and M.A.I. Qami, Advocate-on-Record for
Respondent.

Date of hearing: 17th December, 1996.

JUDGMENT

AJMAL MIAN, J.---This is an appeal with leave of this Court against the judgment dated
25-2-1992 of a Division Bench of the Sindh High Court in High Court Appeal No.94 of
1992, filed by the respondent against the order dated 21-5-1992 of a learned Single Judge
of the same Court, passed on the appellant's C.M.A. No. 599/92 in F.O.D.. No.6/91
Execution No.77 of 1991, dismissing the respondent's objection to the foreign
judgment/decree allowing the same by reversing the above order of the learned Judge in
Chambers.

2. The brief facts are that the appellant, which is a company registered in England having
its office at Edagware Road, London, filed a suit for the recovery of pounds 25,000 with
interest and cost on the basis of the respondent's six dishonoured cheques in the High
Court of Justice, Queens Bench Division, London (U.K.). It seems that the aforesaid suit
was decreed on 7-10-1987 for the ,above sum of pounds 25,000 plus pounds 1709.25
interest and pounds 118 as cost. It appears that the appellant after obtaining requisite
certificate in terms of section 44-A of the Civil Procedure Code, hereinafter referred to as
the "C.P.C.", filed an execution application on 13-8-1991 under section 44-A, C.P.C. read
with Rule 309 of the Sindh Chief Court Rules (O.S.), hereinafter referred to as the
"Rules", which was registered under the above number for execution of the above decree
against the respondent. The respondent was issued notice of the above-execution
application by the High Court as per Rules, in response to which, the respondent filed
objections to the execution without depositing or furnishing the security of the decretal
amount in terms of Order XXI, Rule 23-A, C.P.C. Thereupon, the appellant filed above
C.M.A. No.599/92, praying therein that the respondent's above objection be dismissed for
non-compliance with the requirement of the above provision of Order XXI, Rule 23-A,
C.P.C. ~ The above application was resisted by the respondent but the learned Judge in
Chambers by his aforesaid order dated 21-5-1992 allowed the appellant's above civil
miscellaneous application. The respondent thereupon, filed the above High Court Appeal,
which was allowed by a Division Bench through the judgment under appeal. After that,
the appellant had filed a petition for leave to appeal, which was granted to consider the
following question:------

"Whether Order XXI, Rule 23-A, C.P.C. is applicable to the execution of decree passed
by a foreign Court in terms of section 44-A, C.P.C."

58 of 1
3. In support of the above appeal, Mr. Qamarul Islam Abbas, learned A. S. C., has urged
that the learned Judges of the Division Bench were not justified in reversing the order of
the learned Judge in, Chambers, as under subsection (1) of section 44-A, C.P.C. the above
foreign judgment/decree was to be executed in Pakistan as if it had been passed by the
District Judge. His further submission was that since the procedure provided for the
execution of a decree as contained in Order XXI, C.P.C., the provisions of Order XXI,
Rule 23-A, C.P.C. were applicable to the case in hand, which was rightly so held by the
learned Judge in Chambers.

On the other hand, Mr. J.H. Rehmatullah has contended that a foreign judgment/decree
by virtue of subsection (1) of section 44-A, C.P.C. is to be treated as if it had been passed
by the District Court for limited purpose, namely, for getting it executed in Pakistan but it
cannot be equated with a judgment/decree passed by a District Court in Pakistan and,
therefore, the cumbersome provision for depositing of the decretal amount or furnishing
security thereof to terms of Order XXI, Rule 23-A cannot be invoked. His further
submission was, that the scope of inquiry before an executing Court of a foreign
judgment/decree is much wider as compared to the grounds available for assailing a
judgment/decree passed by a District Court in Pakistan. Lastly, it Ads' contended that
subsection (3) of section 44-A being a special provision and also being part of substantive
law will exclude the application of general procedural provisions contained in Rule 23-A
of Order XXI, C.P.C.

4. It may be observed that both the parties have referred to sections 13, 44-A and Order
XXI, Rule 23-A, C.P.C. It may be advantageous to reproduce the same, which read as
follows:-- ---

"Section 13, C.P.C.:

13. A foreign judgment shall be conclusive as to any matter thereby directly adjudicated
upon between the same parties or between parties under whom they or any of ,them claim
litigating under the same title except---

(a) where it has not been pronounced by a Court of competent jurisdiction;

(b) where it has not been given on the merits of the case;

(c) where it appears on the face of the proceedings to be founded on an incorrect view of
international law or a refusal to recognise the law of (Pakistan) in cases in which
such law is applicable;

(d) where the proceedings in which the judgment was obtained are opposed to natural
justice;

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(e) where it has been obtained by fraud;

(f) where it sustains a claim founded on a breach of any law in force in (Pakistan)."

Section 44-A, C.P.C.:

44--A.--(11 Where a certified copy of a decree of any of the superior Courts of the United
Kingdom or any reciprocating territory has been filed to a District Court, the decree may
be executed m (Pakistan) as if it had been passed by the District Court

(2) Together with the certified copy of the decree shall be filed a certificate from such
superior Court stating the extent, if any, to which the decree has been satisfied or adjusted
and such certificate shall, for the purposes of proceedings under this section, be
conclusive proof of the extent of such satisfaction or adjustment.

(3) The provisions of section 47 shall as from the filing of the certified copy of the decree
apply to the proceedings of a District Court executing a decree under this section, and the
District Court shall refuse execution of any such decree, if it is shown to the satisfaction
of the Court that the decree falls within any of the exceptions specified in clauses (a) to
(f) of section 13.

Explanation 1.---'Superior Court' with reference to the United Kingdom, means the High
Court in England, the Court of Session in Scotland, the High Court in Northern Ireland,
the Court of Chancery of the County Palatine of Lancaster and the Court of Chancery of
the County Palatine of Durham.

Explanation 2.---'Reciprocating territory' means (the United Kingdom and such other
country or territory as) the (Central Government) may, from time to time, by notification
in the (official Gazette), declare (to be reciprocating territory for the purposes of this
section and 'superior Courts' with reference to any such territory, means such Courts as
may be specified in the said notification.

Explanation 3.--'Decree', with reference to a superior Court, means any decree or


judgment of such Court under which a sum of money is payable, not being a sum payable
in respect of taxes or other charges of a. like nature or in respect, of a fine or other
penalty, and--

(a) with reference to superior Courts in the United Kingdom, includes judgments given
and decrees made in any Court in appeals against such decrees or judgments, but

(b) in no case includes an arbitration award, even if such award is enforceable as decree
or judgment.

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Order XXI, Rule 23-A, C.P.C.:

23-A. An objection by the judgment-debtor to the execution of a decree shall not lie
considered by the Court unless--

(a) in the case of a decree for the payment of money, he either deposits the decretal
amount in Court of furnishes security for its payment; and

(b) in the case of any other decree he furnishes security for the due performance of the
decree.

5. A persual of the above-quoted section 13 indicates that foreign judgment is to be


treated in Pakistan to be conclusive as to any matter thereby directly adjudicated upon
between the same parties or between the parties under whom they or any of them claim
litigating under the same title except that the same shall not be conclusive if any of the
sub-clauses of the above section is attracted, namely, (a) where judgment has not been
pronounced by a Court of competent jurisdiction; (b) where it has not been given on the
merits of the case, (c) where it appears on the face of the proceedings to be founded on an
incorrect view of international law or a refusal to recognise the law of Pakistan in cases in
which such law is applicable, (d) where the proceedings in which the judgment was
obtained are opposed to natural justice, (e) where it has been obtained by fraud, (f) where
it sustains a claim founded on a breach of any law in force in Pakistan.

It may further be noticed that subsection (1) of section 44-A, C.P.C., provides the manner
of execution of a foreign decree by laying down that where a certified copy of a decree of
any of the superior Courts of the United Kingdom or any reciprocating territory has been
filed in a District Court, the decree may be executed in Pakistan as if it had been passed
by the District Court.

It may also be stated that subsection (2) of the above section requires that the certified
copy of the decree should be accompanied with a certificate from the superior Court of
which decree is to be executed, stating the extent, if any, to which the decree has been
satisfied or adjusted. It further provides that such certificate shall for the purpose of
proceedings under the above section be conclusive proof of the extent of such satisfaction
or adjustment.

It may also be observed that subsection (3) lays down that the provisions of section 47,
C.P.C. shall as from the filing of the certified copy of the decree apply to the proceedings
of a District Court executing a, decree under above section 44-A and the District Court
shall refuse execution of foreign decree if it is shown to the satisfaction of the Court that
the decree falls within any of the exceptions specified in clauses (a) to (f) of

section 13.

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It may be pointed out that Explanations 1, 2 and 3 define the terms "Superior Court",
"Reciprocating Territory" and "Decree". Since the same have no direct bearing to the
controversy in issue, it is not necessary to deal with the same in detail.

It may be pointed out that rule 23-A of Order XXI, C.P.C. provides that an objection by
the judgment-debtor to the execution of a decree shall not be considered by the Court
unless (a) in the case of a decree for the payment of money he either deposits the decretal
amount in Court or furnishes security for its payment, and (b) in the case of any other
decree, he furnishes security for the due performance of the decree.

6. Adverting to the above contentions of the learned counsel for the parties, it may be
pertinent to observe that the sole question in issue is as to whether a foreign decree,
which by fiction of law is to be treated as if it had been passed by the District Court in
Pakistan can only be contested by the judgment-debtor after complying with the
requirement of above Order XXI, Rule 23-A, C.P.C. Mr. Qamarul Islam Abbas, in
support of his submission, has referred to the case of Morlays (B'Ham) Ltd. v. Roshanlal
Ramsahai and another reported in A.I.R. 1961 Bombay 156, the case of Sheik Ali v.
Sheik Muhammad, reported in A.I.R. 1967 Madras 45, and the case of Qadir Ahmed
Siddiqui and 6 others v. Ramzan Ali and 6 others reported in PLD 1977 Karachi 273.

In the first case, a learned Single Judge of the Bombay High Court repelled the
contention that the meaning of the words "as if" as used in subsection(J) of section 44-A,
C.P.C. is that the decree in favour of the plaintiff must be treated as having been passed
by the Bombay High Court and consequently it must be held to have been passed by a
Court of competent jurisdiction notwithstanding clauses (a) to (f) to section 13, C.P.C.
which inter alia includes a ground for assailing the decree, namely, want of the
jurisdiction of the foreign Court to pass the decree, which is sought to be executed.

In the second case, a Full Bench of the Madras High Court was considering the question
as to whether the effect of subsection (1) to section 44-A, C.P.C. by treating a foreign
decree as if it had been passed by the District Court would make the provisions of the
Indian Limitation Act applicable. After reviewing the earlier case-law, the following
conclusion was recorded in paras. 19 and 20 of the above reported case, which read as
,follows:--

"(19). To sum up of our conclusions, we are of the view that section 44-A(1) is confined
to the powers and manner of execution and has nothing to do with the law of limitation.
The fiction created by the subsection goes no further and is not for all purposes, but is
designed to attract and apply to execution of foreign judgments by the District Court its
own powers of execution and the manner of it in relation to its decrees,. without reference
to limitation. It follows that the contrary view expressed in (1963) 2 Mad. LJ 412: (AIR
1964 Mad. 221) is, in our opinion, not correct. The law of limitation as contained in the
Limitation Act, as a procedural law and as lex fori will, however, apply, independently of
section 44-A to execution in India of a foreign judgment of a superior Court in a
reciprocating territory. But the effect of its application is a different thing which is a
matter of construction and which will be considered elsewhere in this judgment.

(20) We now pass on to a consideration of the second question. From our earlier
observations it should be clear that the fiction in section 44-A(1) does not, in any way,
affect the original date of the foreign judgment when filed in a District Court in India.
There is no indication in the section that the date of the foreign judgment should be taken
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to be anything but the original date. But can it be said that the Indian Limitation Act
applies to it even from that date. Neither section 44-A nor the international law relating to
foreign judgments and their execution in the local Courts provides an answer. But there
can be only one answer, as we think namely that it does not. The jurisdiction of a District
Court in this country to execute a foreign judgment arises from and exercisable by the
filing of a certified copy of the foreign decree or judgment. It is only thereafter, and never
until then, the procedural laws as lex fori will be attracted to execution. The Indian
Limitation Act can possibly apply to such execution only after filing a certified copy of
the foreign decree or judgment as required by section 44-A(1)."

In the third case, a learned Single Judge of the Sindh High Court has held that there was
no warrant for the contention that section 47, C.P.C. and Order XXI, Rule 23-A, C.P.C.
are to be read independently of each other and that the requirement of depositing or
furnishing security of the decretal amount is not attracted by virtue of above section 47.

7. On the other hand, Mr. J.H. Rehmatullah has referred to the case of Begum B.H. Syed
v. Mst. Afzal Jahan Begum and another reported in PLD 1970 SC 29 at page 35, the case
of Mehreen Zaibun Nisa v. Land Commissioner reported in PLD 1975 SC 397 at pages
433 and 434, and the case of Molasses Trading and Export (Pvt.) Limited v. Federation of
Pakistan and others reported in 1993 SCMR 1905 at page 1923.

In the first case, this Court while construing a notification dated 7-3-1960, issued by the
Central Government in respect of settlement schemes under the Displaced Persons
(Compensation and Rehabilitation) Act, 1958 providing that the house in the possession
of the husband in pursuance of the order passed on or before 20th day of December, 1958
by a competent authority, his wife if staying with him, will also be deemed to be in
possession, held as follows;---

"At that time there was no deeming notification like the one, dated the 11th August, 1960.
The notification, dated the 7th March 1960, meant only for those persons who were in
physical possession of the property in dispute. In such circumstances, there- should be
very compelling reasons to extend the scope of the notification, dated the 7th March
1960, to persons mentioned in the notification, dated the 11th August, 1960, namely,
allottees who are not in possession of the property. The language of the notification, dated
7th March 1960, does not show any such compelling reason. A bare reading of the said
notification shows that it applies only to those properties which are in physical possession
of husband in which his wife is also staying with him.

Mr. Dilawar Mahmood, the learned counsel for respondent No.l has referred us to a
number of English and Indian decisions to canvass for his contention that the scope of a
deeming clause is very wide. He contended that where a person is deemed to be
something the only meaning possible is that whereas he is not in reality that something
the Act required him to be treated as he were. There is no quarrel with the contention of
the learned counsel for respondent No. l that where the statute says that you must imagine
the state of affairs; it does not say that having done so you must cause or permit your
imagination to boggle when it comes to the inevitable corollaries of that state of affairs."

In the second case, this Court while construing the provisions of Land Reforms (Punjab
Amendment) Act, 1973 (Act XI of 1973) inter alia dilated upon the effect of deeming
clause by observing that, "When a statute contemplates that a state of affairs should be
deemed to have existed, it clearly proceeds on the assumption that in fact it did not exist
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at the relevant time but by a legal fiction we are to assume as if it did exist. The classic
statement as to the effect of a deeming clause is to be found in the observations of Lord
Acquit in East End Dwelling Company Ltd. v. Finsbury Borough Council- (1) namely:

"Where the statute says that you must imagine the state of affairs, it does not say that
having done so you must cause or permit your imagination to boggle when it comes to
the inevitable corollaries of that state of affairs."

In the third case, this Court while construing section 31-A of the Customs Act, 1969,
which was enacted retrospectively held that the effect of a deeming clause is that, ."When
a statute enacts that something shall be deemed to have been done which in fact and in
truth was not done, the Court is entitled and bound to ascertain for what purpose and
between what persons the statutory fiction is to be resorted to (p.1924) L.

8. In furtherance of his above last submission, namely, "that subsection (3) of section
44-A being a special provision and also being part of substantive law will exclude the
application of general procedural provisions contained in rule 23-A of Order XXI,
C.P.C.", Mr. Rehmatullah has referred to the case of Golden Oraphies (Pvt.) Ltd. and 12
others v. Director of Vigilance, Central Excise, Customs and Sales Tax and others
reported in 1993 SCMR 1635 at page. 1644, and the case of Neimat Ali Goraya and 7
others v. Jaffar Abbas, Inspector/Sargeant Traffic reported in 1996 SCMR 826 at page
833.

In the first case, this Court while construing certain items of Pakistan Customs Tariff
observed that where a special provision had been made on a subject and there was also a
general provision susceptible of covering the same field and the matter was covered by
both the provisions, presumption would be that the general provision was not intended to
interfere with the operation of the special provision and the case would have to be dealt
with under a special provision.

In the second case, this Court while construing Police Rules held that where a general as
well as a special law applied to a particular case then to the extent of application of
special law in that case, provisions of general law stand displaced.

9. We have already pointed out hereinabove that a foreign judgment/decree can be


assailed on any of the grounds mentioned in clauses (a) to (t) of section 13, C.P.C.
whereas subsection (3) imposes an obligation on the part of the District Court executing a
foreign decree to refuse the execution of the same if it is shown to its satisfaction that the
decree falls within any of the exceptions specified in the above clauses (a) to (f) of
section 13. The object of deeming provision in subsection (1) of section 44-A, C.P.C.
seems to be to facilitate execution of a foreign decree in Pakistan by assuming by virtue
of fiction of law as if it had been passed by the District Court in Pakistan, instead of
compelling the foreign decree-holder to file a suit on a foreign judgment which was the
position obtaining in India prior to the incorporation of above section 44-A in 1937.
However; this deeming provision contained in subsection (1) the above section 44-A is to
be read in conjunction with subsection (3) thereof in order to harmonies the above two
provisions of the same section. In our view, since subsection (3) of section 44-A requires
an executing Court in Pakistan to refuse the execution of a foreign decree if it is shown
by the judgment-debtor that the decree falls within any one of the exceptions specified in
clauses (a) to (f) of section 13, the same cannot be controlled or its effectiveness be
curtailed by the cumbersome provision of rule 23-A of Order XXI, C.P.C. The above
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special provision contained in subsection (3) of section 44-A shall exclude the application
of the general provisions of above Order XXI, Rule 23-A, C.P.C., which is applicable
generally to decrees passed in Pakistan. Additionally subsection (3) of section 44-A,
C.P.C. is a provision of substantive law, whereas Rule 23-A of Order XXI, C.P.C. is a
procedural provision framed under the C.P.C. and, therefore, in case of any inconsistency,
the former shall prevail over the latter. 'Since the former provision does not envisage the
exercise of the right contained therein by a judgment-debtor subject to deposit or
furnishing of the security of the decretal amount, there seems to be inconsistency.

10. The judgments in the case of Golden Oraphies (Pvt.) Ltd. and 12 others v. Director of
Vigilance, Central Excise, Customs and Sales Tax and others (supra) and in the case of
Neimat Ali Goraya and 7 others v. Jaffar Abbas, Inspector/Sargeant Traffic (supra)
support the above conclusion which we are inclined to take. The above view seems to be
more in consonance with the dictates of justice. This can be illustrated by an example,
suppose "A" obtains, a decree against "B" for a sum of £ 1 million from a Court which
had no jurisdiction. Such a decree is filed in Pakistan under section 44-A, C.P.C. "B" has
very strong defence under clause (a) of section 13, C.P.C. read with subsection (3) of
section 44-A, C.P.C., but his objections are dismissed on the ground that he fails to
deposit or furnish security of the decretal amount. If we were to take a contrary view in
line with the above example, it will frustrate the very object of the above provisions and
thereby defeat the intention of the lawmakers. We may also observe that there is no
parallel provision to Order XXI, rule 23-A, C.P.C. in India. The judgment in the case of
Morlays (B'Ham) Ltd. v. Roshanlal Ramsahai and another (supra) of the Bombay High
Court in fact supports the view which we are inclined to take. It does not advance the
appellant's case, as it has been held that in presence of clause (a) of section 13, C.P.C., it
cannot be presumed that a decree of a foreign Court was passed by a competent Court.
The view found favour by the Full Bench of the Madras High Court in the case of Sheik
Ali v. Sheik Muhammad (supra) also does not support the appellant's case as the ratio
decidendi of the above case seems to be that section 44-A(1), C.P.C. is confined to the
powers and manners of execution and has nothing to do with the law of limitation and
that the fiction created by the subsection goes no further and is not for all purposes but is
designed to attract and apply to the execution of foreign judgments by the District Court
its own power of execution and the manner of it and in relation to it decrees without
reference to limitation.

11. The upshot of the above discussion is that the above appeal has no merit, the same is
dismissed, but with no order as to costs.

M.B.A./G-570/S Appeal dismissed.

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