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Petitioner: HONDA ATLAS CARS (PAKISTAN) LTD. VS Respondent: HONDA SARHAD (PVT.) LTD. and others
Court Name: Supreme Court of Pakistan Judge(s): Iftikhar Muhammad Chaudhry, Hamid Ali Mirza, Rana Bhagwan Das Title:HONDA ATLAS CARS (PAKISTAN) LTD. vs HONDA SARHAD (PVT.) LTD. and
others Case No.: Civil Appeals Nos.1766 and 1767 of 2003 Date of Judgment:2004-10-20 Reported As: 2005 SCMR 609 Result: Appeals allowed Judgment ORDER ' IFTIKHAR MUHAMMAD CHAUDHRY, J.--- Appellant Messrs Honda Atlas Cars (Pakistan) Ltd. Being dissatisfied from the judgment dated 24th June, 2003 passed by the Peshawar High Court, Peshawar in R.F.As. Nos.69 and 70 of 2001 has preferred instant appeals which are being disposed of jointly as both the matters raise common questions of facts and law. 2. Facts, giving rise to instant appeals are as under:-- ' Facts of the suit filed by respondents for declaration on 10th July, 1999. (Subject-matter of Civil Appeal No,1766 of 2003) ' Facts giving rise to instant appeal are that appellant Messrs Honda Atlas Cars (Pakistan) Ltd. (appellant) appointed Messrs Honda Sarhad (Pvt.) Ltd. (respondents) as its agent in N.-W.F.P. For the sale of Honda Motor Cars. Later on the appellant terminated the dealership of respondents on 11th December, 1995 on the ground of certain allegations. The respondents filed a suit in the Court of Senior Civil Judge, Peshawar on 10th July, 1999 for declaring the termination of dealership illegal and in the alternative recovery of Rs,100 million as market value of the land and building obtained by it for the showroom and workshops for the cars and further a sum of RS.10 million as damages for the loss of business and damage to the reputation. Along with the suit an application for temporary injunction was also made to restrain the appellant from granting dealership to someone else. ' Facts of the suit for recovery filed by the appellant for recovery of sum of Rs,15,770,552 dated 15th July, 1997. (Subject-matter of Civil Appeal No,1767 of 2003)
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' Briefly stating the facts of the case are that appellant filed a suit before the Senior Civil Judge, Peshawar against the respondents for recovery of Rs,15,770,552 with relief of permanent injunction, on 15th July, 1999, alleging therein that post-dated cheques issued by the respondents in favor of the appellant had been dishonored and due to misappropriation and misconduct of the respondents, the appellant had to supply cars to the customers, payment of which was due from the respondents. 3. As per order-sheet, dated 30th July, 1999 maintained in the suit for declaration and order-sheet, dated 2nd October, 1999 maintained in the suit for the recovery of money, both the matters were postponed for framing of issues. Incidentally vide order-sheet dated 20th November, 1999 both the cases were adjourned for 8th January, 2000. However, the suits could not be taken up on account of Eid-ul-Fitr, as it has been mentioned in the order-sheet dated 7th January, 2000 and the next date was fixed to be 5th February, 2000, when again it was not taken up on account of public holiday i,e, "Kashmir Day" on this date and again it was adjourned for hearing on 13th March, 2000, when respondents failed to appear in Court despite of calling the case repeatedly, therefore, the suit filed on its behalf was dismissed for want of prosecution whereas ex parte order was passed in the suit for recovery filed by appellant. Learned trial Court recorded ex parte proof in the suit for recovery of money and decreed it accordingly on 22nd June, 2000. On 8th January, 2001 respondents filed an application for restoration of its suit whereas on 20th December, 2000 an application for setting aside ex parte decree was also preferred. Appellant contested both the applications, which were dismissed by separate orders dated 17th September, 2001. Thus, respondents preferred R.F.As. Nos. 69 and 70 of 2001 before the Peshawar High Court, Peshawar, which have been disposed of by means of impugned judgment dated 24th June, 2003. 4. Learned counsel for appellant contended that Articles 163 and 164 of the Limitation Act provide 30 days' time for setting aside an ex parte order and an order of dismissal of the suit, whereas in instant case applications in both the suits were filed beyond the period of limitation without seeking condonation of delay. Since section 5 of the Limitation Act had been made applicable to the proceedings under Order IX, rule 13, C.P.C. By means of Ordinance X of 1980, learned High Court was not right in holding that in such-like cases, limitation would be governed under the residuary provisions of Article 181 of the Limitation Act. He pointed out that the edifice of the order of learned High Court is built up on the principle laid down by this Court in the case of Messrs Rehman Weaving Factory (Regd) v. Industrial Development Bank of Pakistan PLD 1981 SC 21 whereas this judgment is distinguishable in view of the facts and circumstances of the cases in hand. 5. On the other hand learned counsel for respondents contended that Reader of the Court was not authorized by the Presiding Officer to give a date in his absence, according to Order XVII, rule 4, C.P.C., therefore, the respondents were not obliged to inquire about proceedings of the case on the next date of hearing, as it was fixed by a person, not authorized to do so. Simultaneously the Presiding Officer was not competent to pass any adverse order on 13th March, 2000, against them because this date was not fixed by an authorized person as no authority was delegated by the Presiding Officer to his Reader, therefore, legally he had no jurisdiction to pass adverse orders against the respondents. 6. The arguments so raised by learned counsel for respondents do not require detailed consideration in view of the fact that in the applications submitted on their behalf for setting aside ex parte order/decree or for restoration of suit, no such assertion was made at all. Contrary to it, their plea was that the date of hearing i,e, 13th March, 2000 was never communicated to them and upon attaining knowledge, they had filed the applications. At this juncture it is important to note that in both the cases no request was made seeking condonation of delay in approaching the Court for setting aside the order adversely operating against them in view of section 5 of the Limitation Act, in both the cases. Admittedly, the applications were beyond the period of limitation
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i,e, 30 days under Articles 163 and 164 of the Limitation Act, therefore, in our opinion it was incumbent upon them to have availed the benefit of section 5 of the Limitation Act. 7. It is important to note that learned High Court interfered with both the orders of the trial Court mainly in view of the judgment in the case of Messrs Rehman Weaving Factory (ibid). According to learned counsel for appellant, this judgment is not applicable to the facts of the case in hand Besides it, subsequently, this judgment has been considered and distinguished in different cases by various learned High Courts. He made reference to the cases of Gulzar v. Hata 1988 MLD 1518, State Life Insurance Corporation of Pakistan v. Shakar Khatoon 1998 CLC 283, China Petroleum Engineering Construction Corporation (CPECC) v. Messrs R.J. Engineering and Management Consultants 1999 CLC 117 Mst. Durdana Akbar v. Government of Sindh 1999 CLC 1846 and Government of N.-W.F.P. v. Surryia Begum PLD 1995 Pesh. 53. He also referred to the judgment reported in the case of Atta-ur-Rehman Baig v. Barey Khan PLD 1998 Pesh. 83, wherein it has been held that for setting aside ex parte decree, Article 164 of the Limitation Act will be applicable and not Article 181 of the Limitation Act. 8. A careful perusal of the judgment in Messrs Rehman Weaving Factory (ibid) indicates that this case was remanded by the learned High Court to the learned trial Court after dismissal of revision filed by the appellant along with record of the case. Learned trial Court on recommencing trial recommenced trial and issued notices for 23rd May, 1972 to the defendants. On this date the plaintiff was represented but no one was present on behalf of the defendants who were allegedly served, therefore, they were proceeded against ex parte and eventually an ex parte decree was passed against them on 27th May, 1972. The defendants on an assertion that notice was not served and that the knowledge about the decree was gained by them on 31st July, 1972, filed an application on the next day for setting aside ex parte decree. A similar application was filed by defendant No,2 on 6th October, 1972. These applications were dismissed on 8th May, 1974, being barred by time. ' Then the defendants filed separate appeals in the High Court, which were accepted on 21st February, 1977 for the reasons that service was not proper, therefore, the defendants could not be deemed to have been duly served, as such the applications, filed within a period of 30 days from the date of knowledge were within time. Thus, on setting aside ex parte decree, case was sent back to the trial Court for determination on merits in accordance with law. Leave was granted against the order of the High Court to examine following questions:-- (a) Whether the learned Single Judge has applied the correct provisions of law regarding the period of limitation applicable for institution of application for setting aside ex parte decree; (b) Whether that period can be extended to on any ground, whatsoever, especially when section 5 of the Limitation Act was not applicable; and (c) The point whether the learned Single Judge could go behind the pleadings of the defendants or any particular defendant in the matter of their or his knowledge about the ex parte decree and whether he has applied correct principle in the matter of appreciation of evidence. 9. Whereas, comparison of facts in these cases indicates that they were fixed for hearing (Muhammad Ismail v. Muhammad Hussain 1991 CLC 237) as issues were to be settled and in presence of respondents date of hearing in both the cases was fixed for 8th January, 2000, when cases were not taken up due to Eid-ul-Fitr, as it has been mentioned in the order-sheet dated 7th January, 2000, and next date was fixed to be 5th February, 2000 but again it was declared a holiday, on account of "Kashmir Day", as such cases were postponed for 13th March, 2000. In the judgment of Messrs Rehman Weaving Factory (ibid) the case was remanded by the High Court to the trial Court on 1st February, 1972. It is not known whether record of the case was received by the learned trial Court from the High Court or not. However, it fixed the hearing on 23rd May, 1972 in respect whereof the defendants were not served as ultimately it has been found by the learned
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High Court in its judgment, dated 23rd February, 1977. Contrary to it, in the case in hand, the parties were aware about the date of hearing i,e, 8th January, 2000 that on this date issues will be framed. In addition to it, in the case of Messrs Rehman Weaving Factory (ibid) parties were not obliged to appear in the Court on the next date after holiday in view of the provisions of Order XVII, rule 4, C.P.C. As till 23rd May, 1972 this provision was not enacted by the Law Reforms Ordinance, 1972. As per these provisions, the parties are required to appear in the Court on the day next following that day or when there are two or more successive holidays, on the date next following the last of such successive days and the Court may then either proceed with the suit on such date or fix some other day, thereafter. As these provisions are mandatory in nature, therefore, firstly the respondents were bound to inquire about the proceedings in both the cases on 9th January, 2000 on the opening of the Court. But it Seems that respondents did not attend the Court on the said date as such they could not acquire knowledge about the fixation of the case on 4th February, 2000 and similarly after 4th and 5th February, 2000, the respondents were under obligation to attend the Court on the next reopening day in order to know the next date as the case was fixed for 13th March, 2000. Therefore, presumption of law would be that appellant had knowledge that the next date was fixed 13th March, 2000. Besides it, there is another distinction between the case of Messrs Rehman Weaving Factory (ibid) and the case in hand, namely that till then section 5 of the Limitation Act was not applicable for seeking condonation of delay in filing, applications for restoration of suit and for setting aside ex parte decree, as it was applied to the provisions of Order IX, rule 9 and rule 13 of C.P.C. Subsequently, by means of Ordinance of 1980 (Amendment Ordinance X of 1980), therefore, the defendants in Messrs Rehman Weaving Factory (ibid) had no privilege to draw the benefit of section 5 of the Limitation Act. It is important to note that Article 164 of the Limitation At has prescribed 30 days time from the date of decree or where the summons were not duly served and the applicant had no knowledge of the decree. The respondents have not pleaded before the trial Court that summons were not received by them in respect of the suit filed by appellant for recovery of money. The contents of the applications indicate that their case was that next date of hearing was not communicated to them. Obviously in presence of provisions of Order XVII, rule 4, C.P.C. The Court was not bound to inform them about the next date of hearing. Contrary to it, it was their duty to have inquired about the next date of hearing. Similarly, this argument would not be available to respondents in respect of suit filed by them, which was dismissed in default because except the respondents, no one else was interested in the proceedings of the suit, for which they had paid court-fee and were pursuing the same for the last about one year, but they failed to appear in Court and to inquire about the next date, as such the Court was left with no option but to dismiss the suit in default. If the respondents were really interested, they could have got restored their suit by submitting an application within 30 days under Article 163 of the Limitation Act which is specifically applicable to such proceedings and if at all some plausible explanation was available to them, they would have submitted an application under section 5 of the Limitation Act, seeking condonation of delay in approaching the Court within the stipulated period but in the absence of such request the Court had no obligation to condone the long delay of ten months. 10. This Court in the case of Messrs Rehman Weaving Factory (ibid) applied residuary Article 181 of the Limitation Act in view of the peculiar facts and circumstances of the case, otherwise it is a settled principle that once a defendant is served for a date of hearing and thereafter he absents himself and ex parte decree is passed against him, under Article 164 of the Limitation Act, an application has to be filed within 30 days and in respect of any other proceedings, which does not fall within the definition of hearing, when the summons are not served upon him and on gaining knowledge, he can move an application within 30 days for setting aside ex parte decree. In this behalf, we may observe that for the purpose of setting aside ex parte decree under Order IX, rule 30, C.P.C., there is no distinction for the Court, whether ex parte decree has been passed under
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Order 1X, rule 6(i) or under Order XVII, rule 4, C.P.C. This argument become more convincing in view of the fact that Legislature, being fully aware of the fact that for setting aside the order of dismissal of suit and ex parte order, a period of 30 days has been prescribed under Articles 163 and 164 of the Limitation Act, which extends the provisions of section 5 of the Limitation Act vide Ordinance X of 1980, in order to cover the situation where on account of sufficient cause, delay in filing of application is sought to be condoned otherwise, there was no necessity to extent the provisions of section 5 of the Limitation Act. In the case of Messrs Rehman Weaving Factory (ibid) this Court has examined number of judgments and ultimately held as follows:--- ' One way of interpreting Article 164 as analysed in the foregoing discussion, which does neither offend against the language used therein, nor against any rule of interpretation, is to correlate it with the language used in Order IX, Rules 6 and 13, C.P.C. This is what, to an extent, has been done in some of the rulings. The words 'summons' used in third column in Article 164 is held to be the same 'summons' as used in first part of rule 13 as also in rule 6. Similarly, the phrases an application by a defendant 'for an order to set aside a decree passed ex parte' against him, used in the first column of Article 164, and 'was not duly served', used in its third column, have been borrowed from and have direct connection with rule 13. The said rule has three facts; one, when the ex parte decree is directly under clause (a) of rule 6(1) of Order IX, then first part of rule 13 would apply because both the provisions relate to first hearing after the initial service of 'summons'. The phrase 'summons duly served' used in Article 164 has also direct connection with `summons duly served' used in rule 6 and 'summons (not) duly served' used in rule 13. Two; rule 13 is applicable also to the situations arising independently of rule 6 when, under rule 2 of Order XVII, the defendant absents himself on an adjourned hearing. In that case, it will not at all be on account of non-service of 'summons' for the first hearing, as interpreted above, but for 'any (other) sufficient cause' visualized in the second part of rule 13, which would include non-service of notice for a subsequent adjourned hearing. Three, as discussed earlier, a distinction is apparent between the first and second part of the main rule- 13--The first relates to `summons'---Dealing only with the first hearing and the second to the other 'causes' including those relatable to the adjourned hearings also. The multi facet rule of rule 13 is not being visualized for the first time. In Muhammad Swaleh's case also this was the approach preceding the decision that it was not necessary in that case to decide the controversy about Article 164. The following observation is most meaningful in this behalf: '... a reference to Order IX, rules 6 and 8 and Order XVII, rule 2 will show that the parties to a suit are penalized for their absence only on the date fixed for hearing or the date to which the hearing is adjourned Order IX relates to the date of hearing for which a summons has been issued to the defendant while Order XVII relates to adjourned hearings. As rule 1 of Order IX will show, this order states only the procedure of the Court on the date fixed in the summons sent to the defendant. Under rule 6 the defendant is to be proceeded against ex parte only when the summons has been duly served. Order. XVII, rule 2 provides that if a party fails to appear on 'the day to which the hearing of the suit is adjourned' the Court may proceed to pass orders in accordance with Order IX. Order IX, rule 6 and Order XVII, rule 2 being the only provisions authorizing ex parte proceedings against a defendant it is clear that ex parte proceedings can be ordered only in respect of absence on the day fixed in the summons or on the day to which the hearing of the case has been adjourned'. ' It has been emphasised that rule 13 has dual role; one when it is applied directly in connection with ex parte decree passed under rule 6 of Order IX and the other, by reference, when the ex parte decree is under Order XVII, rule 2. Similarly views were expressed by the Supreme Court of India in Sangram Singh v. Election Tribunal AIR 1955 SC 425. When dealing with the adjourned hearing dealt with in Order XVII, it was held that rule 2 thereof applies to the non-appearance on the day fixed for the adjourned hearing 'In that event, the Court is thrown back to Order IX with the additional power
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to make 'such order as it thinks fit'; when it goes back to Order IX it finds that it is again empowered to proceed ex parte on the adjourned hearing in the same way as it did, or could have done if one or the other parties had not appeared at the first hearing, that is to say, the right to proceed ex parte is a right which accrued from day to day, because at each adjourned hearing the Court is thrown back to Order IX, rule 6. It is not a mortgaging of the future but only applies to the particular hearing at which a party was afforded the chance to appear and did not avail himself of it'. ' If Order IX, rule 13 applies to ex parte decree passed under clause (a) of rule 6(1) thereof and also by reference to similar decree passed under Order XVII, rule 2, and if the language used in Article 164 is relatable to rule 6(1)(a) and first part of Order IX, rule 13, which caters for situation arising out of rule 6(1)(a), i,e, when 'summons, was not duly served; when it would be logical to assume that Article 164 relates to the ex parte decree passed under rule 6(1)(a) on the first hearing and not to an ex parte decree passed on the adjourned hearing under Order XVII, rule 2. If a 'notice' which was required by natural justice or by law to be served on a defendant to afford him an opportunity for appearance on an adjourned hearing and it was not duly served on him, then his case would not be governed by Article 164, because it would not be a case of first hearing for which 'summons' was to be issued. This interpretation of Article would also permit a judicious interactions of first and third columns thereof; in that, it would govern only those applications which seek the setting aside of that ex parte decree which has been passed after the service (or non-service) of the 'summons' issued for the first hearing visualized under Order IX, rule 6(1)(a). The word 'summons' is not only the key to the interpretation of third column, but it will also govern the entire Article. When any cause is shown for non-appearance at the first hearing whether non-service of 'summons' or any other sufficient cause e.g. An accident on the way, an act of God or act of State beyond human control, only Article 164 would apply and limitation would commence from the date of the knowledge of the decree, when the 'summons' was not duly served; otherwise from the date of the decree. And the remaining cases, other than those of first hearing, would not be governed by Article 164." ' The ratio decidendi in the above case indicates that as in the cases in hand no fresh summonses or notices were required to be issued after fixing the case for settling the issues, in view of the provisions of Order XVII, rule 4, C.P.C., ex parte decree has to be passed in terms of Order XVII, rule 2, C.P.C., then in such situation the case would be covered under Article 164 of the Limitation Act and the respondents ought to have filed the application within 30 days for setting aside the same. Similarly application for setting aside the order of dismissal of the suit was required to be filed within 30 days and if at all there was some delay on account of a sufficient cause, they should have supported their application with the request for extension of time under section 5 of the Limitation Act. 11. It is important to note that in the case of Gulzar (ibid) the judgment of this Court in the case of Messrs Rehman Weaving Factory (ibid) has been discussed in the following terms:- "(5) Learned counsel argued that the authority divided cases into two broad based classes for getting ex parte decrees set aside, namely (i) where the default in appearance was on the first hearing and (ii) all 'the remaining cases'. He relied upon the following observation appearing in a sentence next following the portion of the judgment cited above. It reads:- ' And the remaining cases, other than those of first hearing, would not be governed by Article 164'. ' It will be appreciated that the penultimate phrase 'otherwise from the date of decree' of the above mentioned observation apparently carried different meanings. It envisaged a class of cases by itself without having any regard whatsoever to nonappearance on the first date of hearing due to non-service of the summons or the notice. It clearly made Article 164 (ibid), the above-mentioned phrase will have to be totally discounted from consideration. It was indeed a formidable expression forming part of the same judgment visualizing a situation to which the same Article 164 was held applicable. It has to be harmonized with the observation relied upon by the learned counsel and
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since the Article itself provides room for applying it to cases other than those of first hearing, it shall be assumed that this was the reason why the august Supreme Court pertinently adopted the phrase in their…
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