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Appeal No. 2 of 1966, decided on 15th June 1967.

read with Banking Companies Ordinance (L VII of 1962), S. 61 and with Civil Procedure Code (V of 1908), O. XXI, r. 22(3)‑Execution of money decree against Bank in liquidation stayed by High Court under Ss. 69 & 70 of Act XXVIII of 1951‑Second application for execution instituted in respect of part of decree consisting of items of deposit with Bank which applicant had wrongly assumed would not be covered by stay order‑Notice of application for execution suppressed from judgment‑debtor Bank‑Notice of sale of property of Bank in execution also suppressed‑‑Execution proceedings impeached by Bank as fraudulent under S. 61, Banking Companies Ordinance (L VII of 1962)‑Held, (i) that fraud had been perpetrated ; though a fuller inquiry by way of a suit could have been directed, scheme of Ordinance was to get such matters adjudicated in High Court‑Fraud can be implied where a party stands to gain "over whelmingly" in a transaction‑Notice simply left on table of Manager of Bank, invalid service‑Execution proceeding, held, to be illegal and nullity‑Executing Court had no jurisdiction to proceed with execution of decree in view of stay order made by High Court‑Stay was of whole decree, not o, part‑Non‑service of notice will not confer jurisdiction on executing Court 14 here proceedings are otherwise without jurisdiction‑Separate suit under circumstances, or application under S. 47, Civil Procedure Code (V of 1908), to impeach fraudulent execution proceedings-- Limitation applicable, Art. 95, Limitation Act (IX of 1908).

Syed Ishtiaq Ahmed with Rafiqul Islam for Appellant.

Akhtaruddin Ahmed, Official Liquidator with Noor Muhammad for Respondent.

Dates of hearing : 14th and 15th June 1967.

‑This appeal arises out of the following circumstances: Respondent Mahaluxmi Bank Ltd., as represented by its Official Liquidator, had been a bank which had been func tioning in this country for a long time since prior to indepen dence, that is to say, prior to the creation of Pakistan. After the establishment of Pakistan it appears that the Bank began to show symptoms of gradual sinking. Sometime in the year 1950 the said Bank obtained from this Court an order of moratorium which lasted for a few years, i.e. till 1954.

In this background it may be noted that one Muhammad Saheb Mia had deposited various sums of money in the above mentioned Bank, but the sums so deposited by him represented a comparatively insignificant amount, considering the volume of business which used to be normally transacted by the Bank. He had deposited various sums of money to the tune of about Rs. 5,000. The Bank, not being in a position to pay the said sum could not honour some of the cheques drawn by the said Muhammad Saheb Mia. Eventually, the latter filed a suit to realise the said sum of money and obtained a decree against the Bank. The said decree, which was obtained in the year 1955, was put into execution, and was resisted by the Bank. When the matter came up to this Court on appeal, the following order was passed by a Division Bench of this Court:

"In the result the appeal succeeds and is allowed with costs. The judgment and order of the learned subordinate Judge refusing to stay execution are set aside and the execution in question stayed under sections 69 and 70 of the East Bengal State Acquisition and Tenancy Act."

In stating the facts of the case the Division Bench made the following observations:

"The decree‑holder respondent had a current account with the defendant‑appellant Bank. As his dues were not paid in spite of demand, he brought a suit for money against the defendant Bank and obtained a decree. The appellant paid the 1st instalment but did not pay the second one. The decree‑holder respondent thereafter put the decree into execution. The judgment‑debtor Bank filed an application under sections 69 and 70 of the East Bengal State Acquisition and Tenancy Act, praying for stay of execution of the decree as against it. To this the decree‑holder filed an objection. The learned Subordinate Judge ultimately found, by his order dated the 12th of June 1956, that the amount standing to the credit of the decree‑holder respondent in the Bank was not a debt but it was a sum of money deposited with the Bank and this deposit did not come within the purview of sections 69 and 70 and although it was not disputed that the judgment‑debtor appellant is a rent‑receiver, he did not stay execution of the decree. The judgment‑debtor then filed this present appeal before this Court."

If we pause here for a moment, there can be no manner of doubt whatsoever that this Court had stayed execution, in its entirety, of the decree that was obtained against the aforesaid Bank. Having regard to the aforesaid order passed by this Court, Muhammad Saheb Mia kept quiet for sometime and, on the 7th of September 1959, started a fresh execution case in respect of the same decree, the execution whereof was stayed in toto. It is important to remember this. The second execution case started on the aforesaid date had given rise to the contro versies that have been raised in this Court.

It is alleged that the execution proceedings were collusively and fraudulently resorted to by suppressing notices and processes with regard to the proceeding itself and also with regard to the sale that had taken place thereafter. It has been vigorously urged that Muhammad Saheb Mia had put the decree into execution again, for the second time, by a clever contrivance. He had, in fact, put the same decree into execution, but had only confined himself to a certain amount of the same decree together with added costs which would enable him to argue that the said sum of money represented an amount which was deposited at a time when, according to him, there could be no application of sections 69 and 70 of the East Bengal State Acquisition and Tenancy Act. The argument itself is fallacious and we shall indicate some of the fallacies after stating what had transpired before the execution. It was, indeed, an attempt to execute a part of one and the same decree in a disguised second execution proceeding.

It should be noted, in the first place, that the debt against the Bank was not a piecemeal debt, consisting of distinct debts incurred at various interval of time, but, as decreed by Court, it was a single composite debt. The decree, which the judgment had imposed made the judgment‑debtor liable to pay a single debt in respect of an ascertained and specified amount. In staying execution of that decree this Court stayed its execu tion, in its totality. This Court did not divide the sheep from the goats, as the phrase goes. The order passed by this Court was the only possible order that could be made in the cir cumstances of the case. After the decree was passed there was no question of splitting up the debt which led to the passing of the decree representing the total amount of debt due to the plaintiff.

In the second execution proceeding which was started on the 7th of September 1959, an ingenious argument, which is patently fallacious, was advanced. It was argued that the decree‑holder was trying to execute that part of the decree which represented debts incurred on occasions to which sections 69 and 70 of the East Bengal State Acquisition and Tenancy Act did not apply. It is rather astounding that such argument could be entertained for a moment. It is obvious that the decree operated as a whole and there is no basis for holding that the said decree could be divided in the manner in which it was sought to be enforced in the second execution proceeding. The proposition needs no further elucidation.

However, it so happens that Muhammad Saheb Mia suc ceeded in moving the executing Court on an obviously unsustain able application.

The Official Liquidator, who was appointed subsequent to the passing of the decree, that is, after the Court had passed an order for liquidation of the Bank, has stated that the entire execution proceeding that is the second execution proceeding) and, the subsequent sale of a valuable property of the Bank, are vitiated by fraud and collusion. He had good reasons to say so. In a rigged‑up second execution proceeding which was void and illegal, the said Muhammad Saheb Mia succeeded in getting auctioned, and in purchasing, a valuable property belonging to the Bank in the town of Chittagong in an illegal attempt to enforce a claim for a paltry sum of Rs. 3,236. It transpires that the same property, after acquisition by Government, had been assessed at a sum well over Rs. 1,00,000. The fact that a property worth approximately about Rs. 1,50,000 was appropriated for a sum less than Rs. 4,000 is a circumstance which is significant. The property was sold on 10‑2‑1960. Thereafter, through the instrumentality of Court, Muhammad Saheb Mia succeeded in obtaining pos session of the property which was eventually acquired by the Provincial Government and a compensation of a sum of over Rs. 1,00,000 was awarded in respect thereof. Muhammad Saheb Mia has already obtained a substantial portion of the said compensation. Subsequent payment was stopped because of a series of litigations with regard to its proper destination. In this context, it should be remembered that there was an application for Liquidation of the Bank in 1959 and an order to that effect was made. Mr. Akhtaruddin Ahmad, Barrister‑at‑Law, was appointed Official Liquidator. It is needless to say that, after due enquiry, the Official Liquidator filed various applications in this Court, including the present one in the discharge of his duties, in order to realise the assets of the Bank.

He has made an application to the effect that the aforesaid sale of the Bank's property and the purchase of the same by Muhammad Saheb Mia, should be set aside and that the latter should be directed to pay to the Bank, namely, the Official Liquidator, the sum of money which he (Muhammad Saheb Mia) had already obtained and, furthermore, for a direc tion that the balance of the money due in respect of such compensation should be paid to the Official Liquidator to the extent of the balance which is due to him.

An application was made by the Official Liquidator on behalf of the Bank in 1964 stating the circumstances in which the aforesaid property was sold. The following reliefs were asked for:

"(1) That the proceedings in Execution Case No. 37 of 1959 of the Court and sale thereunder held on 10‑8‑60 be set aside as illegal, ultra vires and without jurisdiction.

(2) That possession of the property be delivered to the petitioner.

(3) That the rent and compensation of the property be paid expeditiously to the petitioner by opposite‑parties Nos. 2, 3 and 4.

In the petition itself the Official Liquidator had asked for setting aside the entire execution proceedings, namely Execu tion Case No. 37 of 1959, as illegal, ultra vires and without jurisdiction. He has asked for obtaining possession of the property and for a further relief, namely, that opposite parties Nos. 2 and 3 and the Province of East Pakistan be directed to pay rent and compensation for the house to the petitioner.

The grievance made by the Official Liquidator and the prayer made by him leave no manner of doubt that normally he would have instituted a suit in order to seek the reliefs he has now asked for. A supplementary affidavit has been filed by the Official Liquidator and sworn on the 16th of August 1965. This affidavit is by way of a reply and has been sworn by the Official Liquidator himself, namely, Mr. Akhtaruddin Ahmad. Para graphs 4, 5 and 6 of the aforesaid affidavit in reply may be stated as follows:

"(4) That the Hon'ble High Court stayed the execution of the degree of the Money Suit No. 26 of 1954 under sections 69 and 70 of the East Bengal State Acquisition and Tenancy Act on 27‑5‑57 until the debt of the Bank (Petitioner) was scaled down and compensation of its rent receiving interest was paid after final publication of the compensation assessment roll.

(5) That the compensation assessment roll of Chandanpara and other villages of Kotwali P. S. and District Chittagong was published finally only on 30‑10‑1961 as notified in the Gazette dated 14‑11‑61. in the Dacca Gazette‑ of November 23, 1961 whereas the decree stayed by the Hon'ble High Court was put into execution long before this date by an Execution Case started in 1959 by suppressing all summons notices and processes fraudulently. Relevant portion of the Gazette is as follows:

No. S. A. 206/61/918‑14th November 1961.‑Under the provision of subsection (2) o f section 48 of the East Bengal State Acquisition and Tenancy Act, 1950 (East Bengal Act XXVIII of 1951), the Governor is pleased to declare that Com pensation Assessment Rolls have been finally published under section 42 of the said Act in respect of the villages of Police Station Kotwali of the District of Chittagong specified in the Schedule below on the dates mentioned against them.

The schedule

Police‑station Kotwali, District Chittagong.

(6) That the copy of the sale proclamation shows that the property worth more than two lakhs of rupees was valued by the opposite‑party judgment‑debtor at only Rs. 1,100 which price is shockingly low and is manifesting the suppression and fraud practised upon the Court."

It is clear from the original petition of objection and the aforesaid paragraph that the real object and purpose of the application was to challenge the execution proceedings which led to the impugned sale at the instance of Muhammad Saheb Mia. It is also clear that Muhammad Saheb Mia was aware that that was the case sought to be made out by the Official Liquidator in this Court. This will be borne out by the supple mentary affidavit‑in‑opposition sworn on his behalf on the 18th of August 1965. The first affidavit‑in‑opposition was sworn by Muhammad Saheb Mia on the 8th of March 1965. Paragraph 7 (a) of the affidavit‑in‑opposition dated 8th March 1965, runs thus:

" . . When the Bank made default In payment this opposite -party No. 1 started Money Execution Case No. 10 of 1956 for realisation of the same but no objection by the Bank under sections 69 and 70 of State Acquisition and Tenancy Act the said case was ultimately stayed by the Hon'ble High Court by its order dated 27‑5‑57 till the debts of the judgment‑debtor be scaled down and compensation for the same be paid . . . "

It is clear that there is no such modification in the order passed by this Court which qualifies the operation of the stay order to be confined till the debts of the judgment‑debtor be scaled down and compensation for the same period be paid. There was no time limit imposed upon the operation of the stay order because the parties were left to draw the attention of the Court for such modification when the occasion question arose. The order which emanated from this Court was an unrestricted and unquali fied one, so far as its nature and operation were concerned.

Muhammad Saheb Mia further goes on to say in the said paragraph:

"Then on 7‑9‑59 this opposite‑party No. I applied for execu tion only for the decretal money deposited subsequent to 7th April 1948amounting to Rs. 2,215‑2‑6 as well as for the cost of the suit amounting to Rs. 1,020‑15‑0 asserting (that) they are beyond the scope of sections 69 and 70 of the said Act . . . ."

The aforesaid paragraph is sufficient to indicate the nature of the subterfuge and contrivance to which Muhammad Saheb Mia had resorted. He was trying to execute the same decree although its execution was unequivocally stayed by an order of this Court. The contravance was to limit the claim for a smaller sum by giving out that the said sum represented the deposits subsequent to the 7th of April 1948. The application may be ingenious but it cannot deceive any body. The decree was one decree and the debt of the judgment‑debtor was one debt; it could not be divided in the manner as Muhammad Saheb Mia has set out to enforce by a slick device.

It is thus clear that the second execution proceeding was not maintainable. By an illegal proceeding. Muhammad Saheb Mia succeeded in obtaining an order of execution of a decree which this Court had stayed in its entirety, for an indefinite period of time. It is rather inexplicable how a Court could have given any order in favour of Muhammad Saheb Mia when apprised of the stay order.

It has been vigorously asserted by a statement by the Official Liquidator himself that notices in respect of the execution case as well as the sale of the property were suppressed. The state ments that have been made by the Official Liquidator leave no manner of doubt that he was seeking to set aside the execution proceedings on the ground that the decree was fraudulently obtained and, further more, on the ground that the executing Court had no jurisdiction to entertain such an application in the face of the order passed by this Court as communicated to the executing Court.

It is in the aforesaid context that the application made under section 61 of the Banking Companies Ordinance, 1962, should be considered. Such an application was male and it was tried by a Single Bench of this Court taking company matters. The trial Court took the view that the application was in the nature of a suit and that the Official Liquidator was competent to bring such a suit, having regard to the provisions of the said Ordinance. The trial Court accepted the averment of the Official Liquidator that the aforesaid sale was vitiated because the second execution proceeding itself was vitiated. As a result thereof the trial Court passed the following order:

"In these circumstances, I order that the sale held on 10‑2‑60 in Money Execution Case No. 37 of 1959 of the 1st Court of the Subordinate Judge at Chittagong which sale was confirmed on 17‑3‑60 be set aside. The sale certificate dated 19‑4‑60 granted to the respondent No. 1 be cancelled. The respondent No. 1 is hereby directed to make over to the Official Liquidator all the amounts received by him as compensation, as rent of the premises and the compensation advance received by him from respondent No. 3 as detailed in the affidavit dated 19‑7‑65 filed by the respondent No. 2 together with any other sum or sums which he may have realised in connection with the said property. The respondent No. 1 is further directed to hand over to the Official Liquidator all documents relating to the property which may be in his hand. The respondent No. 2 is directed to pay the balance of the compensation Money to the Official Liquidator. If the order above is not complied within one month from the date of its drawing up, the Official Liqui dator is given leave to file a supplementary list of debtors under section 63 (2) of the Banking Companies Ordinance, 1962, showing the respondent No. I and the respondent No. 2 as debtors and for setting the debts against them as calculated in accordance with the order made by me when the respondent No. 1 can claim set off his decretal dues.".

It is against the judgment pronounced by the trial Court and the order passed by it, as stated above, that this appeal has been filed.

At the hearing of this appeal Mr. Syed Ishtiaq Ahmad appeared on behalf of the appellant and has ably argued the case on behalf of his client. Having regard to the un-contestable facts, which we have stated above, our finding is that a fraud has been perpetrated by Muhammad Saheb Mia with regard to the impugned execution proceeding and the consequent sale of the property in question. At the outset Mr. Ishtiaq Ahmed has argued that a matter like this is of such consequential nature that it should not be decided on mere affidavits, but on a full trial, as in a suit.

Normally on an issue like this, we would have ourselves directed a fuller enquiry in the matter. But the scheme of the Ordinance is to get such a matter adjudicated in the High Court itself. Secondly, what the nature of the allegation in this case What is, in fact, the issue which has to be decided On the one hand, it is alleged that the second execution case, as set out above is tainted with fraud perpetrated by Muhammad Saheb Mia by suppressing notices and process of Court and, on the other hand, there is an assertion that notices were not suppressed. It should be remembered that it is not possible for either of the parties to lead any protracted evidence; the issue of necessity, at this stage has to be tried by summary evidence which would be available in the shape of assertions made on behalf of one party and a denial by the other. The nature of the allegations is suppression of notices and processes in conducting the aforesaid execution case.

Whenever fraud is alleged the most pertinent question that arises before a tribunal called upon to adjudicate upon the matter is to decide as to who stands to gain by the transaction. The answer is simple and clear. Mohammad Saheb Mia stands to benefit in an overwhelming manner. Whereas his claim was for Rs. 3,000, he has, in fact, succeeded in obtaining a property valued at near about a lac and half rupees. He not only stood to gain, but the overwhelming nature of the windfall is also a material circumstance which throws a flood of light on the probabilities of the case. Can there be any manner of doubt that it is highly probable that Muhammad Saheb Mia, under the circumstances, might have resorted to a subterfuge and fraud The circumstantial evidence against him is deadly.

If we now turn to the actual return, we will find that the process server has appended a certificate that the left the notice on the table of one Nagendra Lal Singh whom he has described as Manager‑in‑charge. It was not personally served on him. In the first place, the aforesaid story itself is not worthy of credence, and, in the second place, leaving the notice on the table of the respondent's Manager is by no manner or means service on the Bank. Mr. Akhtaruddin Ahmad has asserted that the Bank had received no notice whatsoever with regard to the execu tion proceedings. He has said so, on full enquiry. He has made this statement from the bar and we have no hesitation in accepting such statement which comes under circumstances stated above. We do not know what other kind of evidence Mr. Ishtiaq Ahmad could have produced as against this statement. In any event, the notice, as purported to have been served was an invalid service of notice under the law. It must therefore, be held that no legal notice was served can the respondent Bank. To such non‑service the contribution came from the process server for the benefit of Muhammad Saheb Mia. It must be held that the execution proceeding was illegal, ultra vires and without jurisdiction because of the fraud that has been perpetrated in this behalf.

Furthermore, the executing Court had no jurisdiction to entertain the application when it was brought to its notice that this Court had stayed execution of the decree in its entirety. It is, 't therefore, not permissible to execute a part of the decree in another garb.

Mr. Ishtiaq Ahmad has argued that by an amendment of Rule 22 of Order XXI, Civil Procedure Code, sub‑rule (3 has been added to the rule. It has been provided that "Omission to issue notice in a case where notice is required under sub rule (1), or to record reasons in a case where notice is dispensed with under sub‑rule (2) shall not affect the jurisdiction of the Court in executing the decree". This sub‑rule has provided that the jurisdiction of the executing Court would not be treated as a nullity merely on the ground of non‑service of notice under that rule. It does not, conversely, mean that non‑service of notice will, in fact, confer jurisdiction on the executing Court when it is found to be otherwise without jurisdiction. In the first place, fraud is a totally separate allegation by itself and there can be no room for any argument that fraud does not have the effect of rendering the entire proceeding to be a nullity. Ids this case fraud has been alleged and accepted by the trial Court. A suit would lie to set aside the execution proceeding and to declare it to be a nullity on the averment that it is void because of fraud in obtaining the decree. Even if it be held that the matter should be agitated under section 47 of the Code of Civil Procedure, the present jurisdiction of this Court under the Banking Companies Ordinance, would be attracted.

It has been noticed that the proceeding can be impeached as a nullity on the ground that the executing Court had no juris diction to proceed with the application when apprised of the order of the stay passed by this Court. The stay operates in toto. Just because this Court had stated that the execution proceeding was stayed under sections 69 and 70 of the East Bengal State Acquisition and Tenancy Act, it was not open to an inferior Court to interpret the operation of sections 69 and 70 in the face of the positive direction that the entire decree was stayed. Is it possible to revive the same proceeding in respect of the same decree by giving up some claim and bolstering up another one out of the same decree We have no manner of doubt that a suit could have been instituted in order to impeach the said execution proceeding.

The next question is, whether such a suit, and/or an application under section 47 of the Code of Civil Procedure, would be barred by the law of limitation We are in complete agreement with the observations made by the trial Court in this behalf, and, in fact, they have been impeached, on the limited ground that the period of limitation in such a case would be one year, which would run from the date of knowledge of the sale which, according to the applicant, was 5th of June 1962. It is said that the aforesaid Ordinance came into force on the 7th of June 1962. Is it correct to say that the period of limitation is one year from the date of knowledge of the sale as specified in Article 12 of the Limitation Act or would Article 9"5 thereof govern the case Article 12 runs thus:

It is clear and patent that it is Article 95, as quoted above, and not Article 12, which will be attracted. The view that we have taken in this behalf is supported by a long series of deci sions and it is unnecessary for us to specify them. Thus, under the Ordinance, this application will not be barred as the applicant is entitled to the advantage given by the said Ordinance.

The result, therefore, is, that this appeal fails on the grounds, which were pressed, and pressed strenuously, before us. It is, therefore, dismissed with costs.

.‑I agree.

A. H.

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