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Civil Petition for Special Leave to Appeals Nos. 96‑K and 97‑K of 1986, decided on 27th August, 1986.
(From the judgment/order of the Sind High Court Karachi, dated 11‑12‑1985 passed in Civil Miscellaneous Nos. 49 and 50 of 1980).
‑‑‑Art. 185(3)‑‑Civil Procedure Code (V of 1908), S. 12(2)‑‑Leave to appeal granted to examine whether subsection (2) of S.12, Civil Procedure Code, would not be attracted in a case where party had failed to take up plea of fraud and misrepresentation there under before Courts in original proceedings or provision has been enacted to provide remedy to party who on account of reasonable cause was unable to take plea at earliest stages.
‑‑‑Art. 185(3)‑‑Civil Procedure Code (V of 1908), S. 12(2)‑‑Leave to appeal granted to examine as to what would be period of limitation for filing an application under S.12(2), Civil Procedure Code.‑‑[Limitation].
Abdul Sattar Shaikh, Additional Advocate‑General, Sind and S.M. Abbas, Advocate‑on‑Record for Petitioners.
Nemo for Respondents.
Date of hearing: 27th August, 1986.
Leave to appeal has been sought' in these two petitions from order, dated 11‑12‑1985 of the Sind High Court; whereby it refused to take any action on an application filed under newly‑added subsection (2) to section 12 of the C.P.C. This provision furnishes a remedy to a person who challenges the validity of a judgment, decree or order on the plea of fraud, misrepresentation or lack; of jurisdiction by making an application to the Court which passed the final judgment, decree or order and not by a separate suit.
The petitioners (Government of Sind and Executive Engineer, Highway Division, Hyderabad) had made serious allegations of fraud and misrepresentation in the application filed against Ch. Fazal Muhammad and Abu Saeed Khan, Arbitrator (respondents Nos. 1 and 2) under section 12(2), C.P.C., before the High Court. Briefly stated the allegation was that Messrs Fazal Muhammad, a registered partnership firm had obtained a contract of constructing a road around Hyderabad vide an agreement executed in 1955/1956. Disputes arose regarding certain claims whereupon the firm filed a suit against the then Government of West Pakistan for the recovery of Rs.66,470. This suit was dismissed on 5‑5‑1969 for non‑prosecution as the counsel had no instructions. Nearly seven years later despite the earlier dismissal of the suit Fazal Muhammad respondent by concealing the facts about litigation made an application in 1975 to the then Chief Minister of Sind for reference of the dispute to an Arbitrator without disclosing that there was no arbitration clause in the agreement. The arbitration proceeded before different persons. After some contest Fazal Muhammad by his application, dated 29‑12‑1972 addressed to the Chief Engineer, Highway Sind withdrew the arbitration and requested that his claim be decided by the Chief Engineer. The Chief Engineer by his decision, dated 18‑5‑1978 rejected the claim and thus the matter ultimately concluded. Notwithstanding that respondent No. 2 made an award in favour of Fazal Muhammad which was brought before Senior Civil Judge, Hyderabad and a decree was obtained on basis thereof. Appeal before the High Court failed. As the matter prima facie involved fraud and misrepresentation on the part of Fazal Muhammad, the petitioners then moved an application under section 12(2) of the C.P.C. giving an explanation for their failure to urge the point of fraud and misrepresentation earlier. The plea was that "because the relevant officers of the areas were not the original officers as many transfers had taken place and the matter was old of 1955 and the relevant files had passed various hands and with the change of divisions and circles more particularly after dissolution of West Pakistan, the real facts were not available at the time of filing of objections to Application under section 14 of the Arbitration Act. Besides, these were filed by inexperienced officers. The appeal before the High Court was not filed on general grounds and due to ignorance about the facts relating to fraud, the reality came to the knowledge of the petitioners after a long time. File‑ were called and the facts about fraud and misrepresentation were discovered, that is why the point was raised at late stage before the High Court, by taking advantage of the provision contained in section 12(2) of the C.P.C. These facts and circumstances have been taken from the petition for leave to appeal.
A learned Single Judge of the High Court dismissed the application mainly on two grounds: Firstly, that the petitioner had failed to raise the point of fraud and misrepresentation before the trial Court and before the High Court at earlier stages; and secondly, that the application under section 12(2) was time‑barred because the Awards having been made in 1976, the move under section 12(2) was made in 1985.
After hearing the learned Additional Advocate‑General we consider it a fit case to examine:
(a) Whether subsection (2) of section 12 would not be attracted in a case where the party had failed to take up the plea of fraud and misrepresentation there under before the Courts in the original proceedings or the provision has been enacted to provide remedy to party who on account of reasonable cause was unable to take the plea at earlier stages.
(b) What will be period of limitation for filing an application under section 12(2). In this behalf we have kept in view that in this case although the Awards were made in 1976 the amendment which subsection (2) was added to section 12 was enacted in 1980. Therefore, prima facie the time shall not start running before 1980.
(c) Any other related questions.
The matter is also of first impression. We accordingly grant leave to appeal in both these petitions.
M. Y. H. Leave granted.
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