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First Appeal No. 13 of 1954 and Miscellaneous Appeal No. 13 of 1954, decided on 6th October, 1954.
O. III, r. 4-Compro mise by counsel-Counsel can compromise only if Vakalatnama empowers him to do so.
In case of hakalatnama the power of the advocate depends on its terms. He can enter into compromise only when the vakalatnama empowers him to do so.
A I R 1930 P C 158, I L R 1940 Karachi 467 and A I R 1947 Sind 4 ref.
Ihsanul Hag and Z. A. Suhrawardy, for the appellants.
A. H. Farid, for the respondent.
-These are two appeals from two orders of our learned brother Inamullah, J., one directing preparation of preliminary decree on a consent application and appointing official commissioner for the purpose and the other dismissing application of the appellants under Order 47, Rule 1 and section 151, C. P. C. for review and stay.
The facts leading to the appeals briefly stated are these :-
Appellants Din Muhammad and Khalilur Rahman entered into partnership with respondent Farooq Mirza in photography business in the name and style of "Star Electrical Photo Studio". The terms and conditions were embodied in the partnership deed, executed on 17th March, 1949. According to the deed the capital was to be provided by the appellants and the respondent was to be only a working partner. The deed also provided that in case there was any dispute among the partners the respondent would have no claim on the shop or in the good-will of the firm except the share of the profit. The parties did not pull on well and on 19th March, 1953, the respondent filed a suit for dissolution of partnership and rendition of accounts. The appellants contested the suit.
On 6th April, 1953, the respondent applied for appoint ment of Receiver and the learned Judge on 25th April, 1953, passed an order appointing interim Receiver, as the result of which the premises were sealed and the inventory of the books prepared.
On 18th May, 1953, the Court, after hearing the parties vacated the order appointing Receiver and instead granted the request of the appellants for permission to furnish security in the sum of Rs.50,000. Against this order the respon dent went in appeal but the same was dismissed. The hearing of the suit was postponed from time to time, till 26th January, 1954, when a compromise petition was filed on which the learned Judge passed an order directing the preliminary decree be prepared. He also appointed official commissioner for the purpose The appellants filed an application under Order 47, Rule 1 and section 151 C. P. C. for review and stay of the order on the ground that the consent petition was not signed by appellant Din Muhammad and that the hand written words 'in terms of the prayer in the suit' were added after the signature of appellant Khalilur Rahman was obtained on it. It was also contended that their advocate Mirza Abdul Kadir Beg had no authority to compromise.
The learned Judge by his order dated 18th February, 1954, dismissed this application. Against these orders the appellants have filed two appeals, one under section 96 C. P. C. and the other under Order 43, Rule (1) (M) C. P. C. This, order will dispose of both.
It would appear that the main grounds on which the appeals are based are two (1) that appellant Din Muhammad had neither consented to compromise nor signed the compro mise petition and that his advocate Mr. Abdul Kadir had no authority to compromise. (2) that the words 'in terms of the prayer in the plaint' were added after the signature of appellant Khalilur Rahman was obtained.
On behalf of the respondent it in contended that Din Muhammad appellant was in fact present when the consent petition was submitted to Court and that it was not considered necessary to obtain his signature as it was enough that Khalilur Rahman, who according to them is senior partner, had signed the petition. Affidavits have been filed on either side.
It is admitted that the compromise petition does not bear the signature of appellant Din Muhammad. He had filed an affidavit in support of his contention that he was not even present.
Appellant Khalilur Rahman and Mirza Abdul Kadir advocate have also filed affidavits to the same effect. We have also examined the affidavits of the respondent and his advocate Mr. Farid to the effect that Din Muhammad was present. The latter rely upon the fact that in the order sheet it is mentioned that both the defendants were present in Court. It, however, appears that the body of the order is not written by the learned Judge himself as is required by R. 38 (2) of Chief Court Rules. It has been written by the Serishte dar who appears to have put up the same before the learned Judge for his signature. The order does not show that the parties admitted having compromised nor does it show that the compromise petition was read over to the parties or its terms explained to them. In fact the compromise petition itself does not bear the signature of the initials of the learned Judge.
The fact that the document does not bear the signature of appellant Din Muhammad supports his contention that he was not present, otherwise there was no point in obtaining the signature of one defendant and not the other, particularly when he was present. And the fact that he moved the Court to set aside the order soon after he came to know it would indi cate that the compromise petition was filed without his consent. We are not prepared to accept the statement of Mr. Farid made in his affidavit that defendant No. 2 Khalilur Rahman who signed the petition is the senior partner and everything is in his hand. His source of information on this point would normally be his client Farooq Mirza. The latter himself has made no specific statement to that effect in his affidavit which otherwise consists of as many as 18 paragraphs. He has simply made a general statement in para 1 of his affidavit that what his advocate has stated in his affidavit is true. There is no evidence to support the contention that Khalilur Rahman is senior partner or that everything is in his hands. The partnership deed itself makes no mention nor does the plaint do so. In fact, apart from this solitary statement of Mr. Farid there is nothing to show that Khalilur Rahman is senior partner. But even so, it does not mean he could bind the other partner in a suit filed against them.
The question then arises whether Mr. Abdul Kadir Mirza had an authority to compromise on his behalf. It is true that their Lordships of the Privy Counsel have held in 1930 P. C. 158 that an advocate has an implied authority to compromise ; but that decision is confined to the case of counsel who derive general authority from being briefed and not an authority from an express written authority, such as vakalatnama as is the case here. In fact their Lordships expressed no opinion as to the existence of any implied authority of the kind under discussion in the case of an advocate who derives his authority from a vakalatnama. The relevant portion of the judgment reads as under. 'Their Lordships desire to confine their decision on this point to the case of advocates, whatever their qualifications, admitted as such by the respective appropriate courts in India, who derive their general authority from being briefed in a suit on behalf of client. Where the legal representative in Court of a client derives his authority from an express written authority such as a vakalatnama, different considerations may well arise and in such cases their' Lordships express no opinion as to the existence of any implied authority of the kind under discussion.
It would therefore appear clear that in case of vakalatnama the power of the advocate depends on its terms. He can enter into compromise only when the vakalatnama empowers him to do so.
In the present case the vakalatnama empowered Mr. Abdul Kadir Mirza merely to appear, act and plead. It gives him no authority to compromise.
In this connection we have decisions of our own Court reported in I L R 1940 Karachi 467 (468) and A I R 1947 Sind 4 respectively wherein it is held that advocates cannot compromise a suit unless there is an authority to do so. The authority should be clear and unequivocal
Mr. Mirza does not claim such an authority. Even the compromise petition bears no endorsement of Mr. Mirza that he is empowered to compromise. We therefore hold that Mr. Abdul Kadir Mirza compromised the suit without authority. In view of this decision, we do not consider it necessary to go into the second question whether the words in terms of the prayer in the suit' were added after the signature of appellant Khalilur Rahman was obtained.
In the result we set aside the two orders and also the preliminary decree based on the compromise petition and remand the case for retrial on merits. The costs of these proceedings are directed to be borne by the respondent.
K. M. A. Appeal accepted
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