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Petitioner: GULFAM and anothers VS Respondent: ALI MUHAMMAD and others
Court Name: Sindh High Court Judge(s): Tanzil-ur-Rehman, Allah Dino G. Memon Title: GULFAM and anothers vs ALI MUHAMMAD and others Case No.: High Court Appeals Nos.53 and 54 of 1982 Date of Judgment:1989-03-30 Reported As: PLD 1989 Karachi 499 Result: Order accordingly
JUDGMENT
JUDGMENT ' TANZIL-UR-REHMAN, J.--These are two High Court Appeals Nos.53 and 54 of 1982 against common judgment dated 12-6-1982 passed by a learned Single Judge of this Court in Suits Nos.1 of 1972 and 606 of 1977 whereby Suit No,1 of 1972 was decreed and Suit No,606 of 1977 was dismissed. We also propose to decide these two appeals by this common judgment. 2. Suit No,1 of 1972 was filed on behalf of Qurban Ali on his own behalf and on behalf his principals, namely, Ali Muhammad and Muhammad Ali against Gulfam and Saghir Ahmed for redemption of mortgage, and cancellation of subsequent sale-deed in respect of property bearing No,421/3, Garden East Quarters, Karachi, whereas Suit No,606 of 1977 was filed by Saghir Ahmed against Qurban, All Muhammad, Muhammad Ali and Gulfam for possession and mesne profits in respect of the same building. It may further be stated that Qurban Ali was holding a General Power of Attorney which was executed in his favour on 14-10-1963 by his brother, Ali Muhammad, and brother-in-law, Muhammad Ali as co-owners in respect of the said property. By virtue of this power of-attorney Qurban took a loan of Rs,44,400, as alleged, from Gulfam (appellant in HCA No,53 of 1982), in two transactions for Rs,30,000 and Rs,14,400 on 27-11-1969, in lieu of an agreement of mortgage by deposit of title deeds and also executing and getting registered a General Power of Attorney on 29-11-1969 in favour of Gulfam, giving absolute authority in respect of the said building, including power of sale. Repayment of the said loan having not been made by Qurban Ali, as demanded, Gulfam notified sale in two newspapers of Karachi and, ultimately, disposed of the said property in favour of Saghir Ahmed by a sale-deed dated 14-5-1971 in the sum of Rs,50,000. The said Saghir Ahmed, on purchase, gave notice to Qurban All of his purchase and called upon him to pay the rent. Qurban Ali, then, filed Suit No,1 of 1972 against Gulfam and Saghir Ahmed. After about
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six years, Saghir Ahmed also filed Suit No,606 of 1977 against Qurban Ali and the two co-owners and Gulfam, as stated above. Both the Suits were consolidated and tried together. By consent the following issues were framed: (1) Whether the Suit is barred under section 115 of the Evidence Act, 1872? (2) Whether the plaintiff No,3 secured a loan Rs,44,000 or of Rs,30,000 from the defendant No,1? (3) Whether the pronote of Rs,14,400 is devoid of consideration? (4) Whether the plaintiff No,3 out of the loan received, paid Rs,10,000 to the defendant No,1 as alleged? (5) Whether or not the plaintiff No,3 by virtue of execution of General Power of Attorney by the plaintiffs Nos.1 and 2 in his favour had the authority to sell the property in Suit and whether the plaintiff No,3 was competent to delegate the power to sell, mortgage or/and pledge, if so what is its effect? (6) Whether or not the defendant No,1 as a result of failure on the part of the plaintiff No,3 to repay the loan, was competent to sell without intervention of Court the property in Suit by virtue of the execution of (1) Mortgage Deed dated 27-11-1969, (2) Loan Agreement dated 27-11-1969 and (3) Irrevocable General Power of Attorney dated 27-11-1969 by the plaintiff No,3 if so whether the defendant. No,1 was competent to appropriate the sale proceeds to his own accounts? (7) Whether the sale-deed in respect of the property in Suit executed on 4-5-1971 by the defendant No,1 in favour of the defendant No,2 is fake, without consideration, collusives and void? (8) Whether the plaintiff No,3 has any authority to file the present Suit on behalf of the plaintiffs 1 and 2 and sign pleadings on their behalf? (9) To what relief/reliefs are the plaintiffs entitled? ' Qurban Ali, plaintiff No,3 in Suit No,1 of 1972 examined himself and produced one witness, Muhammad Ahmed Khan, whereas Gulfam and Saghir Ahmed examined themselves only. After hearing arguments in the said Suits, a learned Single Judge of this Court decreed Suit No,1 of 1972 in favour Qurban Ali and others and dismissed Suit No,606 of 1977. 3. Syed Sami Ahmed, learned counsel for the appellants in H.C.A. Nos.53 and 54 of 1982 has put forth the following contentions: (1) "Suit No,1 of 1972 is hit by Section 115 of the Evidence Act 1972, as then in force by the doctrine of estoppel. The principle is operative against all the three plaintiffs, namely, Ali Muhammad, Muhammad Ali and Qurban Ali, and if not, then against plaintiff No,3, Qurban Ali. (2) Plaintiff No,3. Qurban Ali, in the said Suit, was not competent to file the Suit on behalf of plaintiffs Nos.1 and 2 Ali Muhammad and Muhammad Ali. If so, the said two plaintiffs will stand non-suited. (3) That the Power of Attorney dated 26th March, 1.980, executed by Ali Muhammad and Muhammad Ali in favour of Qurban All the plaintiff No,3, does not validate the presentation of the Suit on their behalf. Even otherwise their Suit as against the present appellants had become timebarred under Article 91 of the Limitation Act, 1908. (4) That, the Sale-Deed dated 4-5-1971 cannot, be cancelled unless there is a finding by the Court that sale of the property between the appellants is fake, without consideration and collusive." 4. In support of the first contention as to the doctrine of estoppel within the meaning of Section 115 of the Evidence Act, 1872 Article 114 of the Qanun-e-Shahadat, 1984, learned counsel relied on (1) Li The Shi v. Pong Tsoi Ching (AIR 1935 PC 208), (2) Hail Ghulam Rasool v. The Chief Administrator Auqaf, West Pakistan (PLD 1971 SC 376) and (3) Syed Lal Hussain Shah v. Kausar Hussain Shah (1980 SCM R 765). 5. (i) In the first case A died in 1925 leaving .Behind his widow 3 and an adopted son C. He left a will whereby he transferred all his property in favour of B. In 1930, an indenture was produced, showing that the property had been assigned by A to his adopted son C in consideration of U.S. $ 70,000. Whatever evidence came on record clearly showed that B had. Full knowledge of the false
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transaction. C mortgaged the property with B for a big sum of money. C committed default in payment. Consequently, the property was sold and it was purchased by E.B. At that stage, appeared on the scene and challenged the transaction. Since B remained silent throughout, and that she had full knowledge of the transaction, it was held that under the Doctrine of Estoppel, she was nobody to assert her right against E. (ii) In the second case Auqaf Department issued a Notification, taking eontrol of the shrine of Hazrat Data Gaj Bakhsh and all other properties attached thereto. Mujawaran of the Shrine claimed that the properties in respect of which proceedings were ,initiated were the joint properties of the entire community of Mujawaran. Whatever plea they took was contrary to the declaration of settlement made it. 1882. There were entries based on that declaration in the Record of Rights to the effect that all the lands were owned by the Shrine and the possession of each of them' was purely in the capacity of a cultivator. The High Court took the view that in view of that acknowledgement, the principle of estoppel was applicable within the meaning of section 115 of the Evidence Act. The Hon'ble Supreme Court endorsed that view, holding that whatever they had acknowledged eighty years back was contrary to what they were pleading now. It was thus held that they were debarred from setting up a new case. (iii) In the third case, A gifted his land in favour of B who was his Pir. Mutation was effected. After four years, A filed a suit, claiming that gift made by him in favour of B was obtained by fraud and prayed for its cancellation. During the pendency of the suit, B gifted the same property to his son C. The litigation between A and B was later patched up. When the suit filed by A came to an end, B filed a suit against his own son C, alleging that he was a victim of fraud and that the property in suit had been gifted in favour of C to defeat the claim of A. It was held by the High Court as well as by the Supreme Court that the gift in favour of C by B was-complete in all respects. In view of that position, the Hon'ble Supreme Court gave a clear finding that the petitioner should be held as estopped, under the Doctrine of Estoppel, form challenging the factum of gift in favour of his son C. 6. Before examining the application of the above-cited three cases to the facts of the case before us, it seems proper to define first the scope of "Estoppel by representation". According to Spencer Bower and Turnor on "Estoppel by Representation", third Edition, 1977, pag 4 the following definition of the doctrine of "Estoppel by Representation" emerges:- "Where one person ('the representor') has made a representation by conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive), and with the result of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him end the representee, is estopped, from attempting to establish by evidence, any averment, substantially at variance with his former representation, if the representee at the proper time, and in the proper manner, objects thereto. 7. The learned authors further stated at page 51 of the said book as under: "So, also, if a party, having a right to assert his status as a share-holder in a company, or his right to a share in any business or concern is mute and passive whilst proceedings are being taken by the company, or other persons interested in the business or concern, to forfeit his share or deal with the property as if he had no part or lot therein, and makes no protest or complaint, and tikes no step to prevent or defeat such proceedings, this passivity of his operates either as a representation that he has finally abandoned any claim to such status, right, or interest which he may have possessed, or else as an acknowledgement that he never had any such claim at all; in either case, he is precluded from asserting it on any subsequent occasion as against the parties to whose adverse proceedings he raised no objection at the time."
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8. Mr. Muhammad Munir, former Chief Justice of Pakistan in his well-known book on the "Principles and Digest of the Law of Evidence" has dealt with the subject of representation an extract from which may be given as under:- "Under certain conditions abstension from speech, or from action, may be deemed to constitute a representation as much as positive language or conduct for the purpose of estoppel. The main condition subject to which alone silence or inaction counts as a representation is that a legal (Not a mere moral or social) duty .Shall have been owed by the representor to the representee to make the disclosure, or to take the steps, the omission of which is relied upon as creating the estoppel. The rule is based on the principle expressed in the quoted expression, that, where a man has been silent when in conscience he ought to have spoken, he shall be debarred from speaking when conscience requires him to be silent. Per Thompson, J., in Niven v. Belknap 2 Johns, 357, cited in Begelow, 6th Ed. ,656; see also' Thomas Barclay v. Syed Hussain Ali Khan (1937) 6 C L J 601. In many cases a man may innocently be silent, but in other cases a man is bound to speak out, and his very silence becomes as expressive as if he had openly consented to what is said or done, and become a party to the transaction, Gheran v. Kunj Behari 9 A. 413, 419. If a person, having a right and seeing another person about to commit, or in the course of committing, an act infringing upon that right, stands by in such a manner as really to induce the person committing the act, and who might otherwise having abstained from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain of the act. (Munir's Law of Evidence, Pak. Publishers Limited, Karachi section 115, pp.350-52). 9. Estoppel is based on the maxim alleqans centraria non audiendus (a person alleging contradictory facts should not be heard) and is that species of presumption jurts et de jure--, where the fact presumed is taken to be true, not as against all the world, but as against a particular party. The doctrine of estoppel is, in fact, an equitable doctrine, a rule of exclusion, which implies that if a person has by act or omission altered his position, he will be estopped and be precluded or debarred from denying it or take a position so as to alter his position to the detriment of the other person, the opposite-party. In order to constitute a valid estoppel by representation, the following principles may be deduced from the law cited above:- ' That the party sought to be estopped, or some person, for whose representation such party is in law responsible, made a representation. (ii) Estoppel must be certain. It should clearly refer to the representation on which it may be founded. (iii) That the case which the party is sought to be estopped from making, setting up, or attempting to prove, contradicts in substance his original representation. (iv) That such original representation was of a nature to induce, and was made with the intention of inducing, the party raising the estoppel to alter his position to his detriment. (v) That the party raising estoppel actually altered his position to his detriment on the faith of such original representation. (vi) That the original representation was made to the party setting up the estoppel. (vii) Estoppel cannot circumvent the law. So, there is no estoppel against the statute. Therefore, if the representation is not in accordance with certain provision of law it shall not operate as estoppel against the party making it. (viii) Estoppel by itself does not create title, nor it extinguishes the right. It merely operates as an impediment to litigation. (ix) Estoppel by representation in its application is restricted to the parties. Reference may be made to the case of Ali Mohataram Naqvi v. M/s. Cogefar-Astaldi Sidman (PLD 1986 Kar. 574). 10. Applying the above principles to the facts of the present case, the most pertinent question would arise: Whether Qurban Ali (plaintiff No,3 in Suit No,21/71 and respondent No,3 in H .C.A.
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No,53/82, made representation to the defendants in the suit/appellants herein that he had full authority in law to delegate the power to sell the property in question to them and so on the basis of that representation the defendants/appellants altered their position. In the present case, it is manifest, on evidence, that the respondent/plaintiff No,3 had requested the appellant/defendant (Gulfam) for giving him a loan of Rs,30,000 to overcome the financial difficulty. The appellant asked him if he had any other property besides the shop. Respondent No,3 then stated to him that he had a share in the house in question alongwith two other co-sharers, the other two respondents. On being asked by the appellant, the respondent delivered the title documents and the General Power of Attorney to him who took them to his counsel, M/s. Ghafoor and Sadiq, Advocates, and instructed them to prepare necessary documents to protect his interest. In these circumstances, the appellants and their counsel were in the full know of the factual as well as legal position with regard to the nature of title of respondent No,3 and the scope of the General Power of Attorney executed by. Respondents Nos.1 and 2 in favour of respondent No,3. With this background, it cannot be said that respondent No,3 made any representation on the basis of which the appellant No,1 Gulfam acted and altered his position. It is significant to note that respondent No,3 had no lawyer of his own and the subsequent documents of title as well as the power of attorney were prepared by the counsel for the appellants and were presented for registration by them. No copy of the documents or the General Power of Attorney was supplied to respondent No,3, prior to the registration of the documents sought to be executed by him. Even on his asking, he was told that those were the documents to secure the loan which he had borrowed from the appellant. Under these circumstances, the question of estoppel by representation, in our view, did not arise and the issue of estoppel has been decided correctly by the learned Single Judge. It may further be added that the three cases cited by the learned counsel do not apply to the present case, as the same are 'distinguishable on facts. In all the said cases, there were declarations, acts and omissions intentionally made and caused, and the other persons who acted upon the same were led to believe such thing to be true, whereas in the present case no such declaration, act or omission on the part of respondent No,3 has been proved which led the appellants to act upon the same and alter their position as every thing, in black and white, was before them and their counsel. 11. The second and third contention, being interlinked are taken up together. Learned counsel for the appellants submitted that plaintiff No,3 was not competent to file the suit on behalf of plaintiffs/ respondents Nos.1 and 2, as he did not have the authority to institute the suit on their behalf. Learned counsel for the appellants submitted that the power of attorney executed by plaintiff/respondents Nos.1 and 2 in favour of plaintiff/respondent No,3 did not contain stipulation to file the suit. Since the said respondent was not attorney for the purpose, he could not institute the suit. Subsequently, ratification by executing a fresh power of attorney by the said respondents in favour of respondent No,3 for the purpose of the said suit, according to the counsel, was not valid. Learned counsel placed his reliance on the following cases namely: (i) P.M.Desappa Nayanim Varu and others v. Ramabhaktula Ramiah and others (AIR 1952 Madras 559), (ii) M/s. Eagle Star Insurance Co. Limited v. M/s. Usman Sons Ltd. And others. PLD 1969 Kar.123), (iii) Mohammad Afsar Khan and others v. Khadim Hussain, and others (PLD 1978 SC (AJ&K) 143) and (iv) Bank of Bengal v. Ramanathan Chetty and others (AIR 1915 P.C.121). (i) In the first case (AIR 1952 Madras 559) it was held that the special power of attorney conferred an express power on N.N. To conduct a particular suit pending in a particular Court. It did not expressly engage the attorney for the purpose of conducting the litigation generally in respect of the plaint schedule properties. Hence where the District Munsif returned the plaint on the ground that it was beyond the pecuniary jurisdiction of this Court, the agent had no power to institute and conduct the suit in proper forum.
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(ii) In the second case (PLD 1969 Kar.123), it was held that a power of attorney is a written authorisation by which the principal appoints another person as his agent and confers upon him the authority to perform specified acts on behalf of the principal. The primary purpose of an instrument of this nature is to evidence the authority of the agent to third parties with whom the agents deal. The rule is now well-established that the power of attorney must be srictly construed and stricly pursued. A power of attorney is held to confer only those powers which are specified therein, and the agent may neither go beyond nor deviate from the terms of this instrument, that is, the act done should be legally identical with what is authorised to be done by the instrument. (iii) In the third case (PLD 1978 SC (AJ&K) 143) it was observed that: "The plain reading of the power of attorney conveys clear sense that 'Muhammad Alam attorney was permitted to pursue the cause only upto the High Court. It was, however, contended by Mr. B.A. Farooqui that the power of attorney was executed during the pendency of the appeal in the High Court and, as such, the authority to prosecute the cause in the High Court may be construed to authorise the attorney to prosecute the cause in the Supreme Court as well. The argument in our view is not well founded and it will be demanding too much to give such a liberal interpretation to this document. In the body of the power of attorney, firstly, it is stated that Muhammad Alam attorney is empowered to engage counsel and file appeals but this authority is restricted and controlled by special clause appearing just after it to the effect that Muhammad Alam is permitted to prosecute the suit from the trial Court upto the High Court. The matter is further elucidated when immediately after this phraseology it is stated in the document that in the event the case is remanded back to the trial Court, the attorney is also authorised to conduct the proceedings in that Court too. Thus, it is clear that Muhammad Afsar has only authorised Muhammad Alam to prosecute his case upto the High Court and if the case is remanded to the trial Court in that Court too. In no way it empowers the agent to file an appeal or petition before the Supreme Court." (iv) In the fourth case (AIR 1915 P.C.121), it was observed that: ' if authority is established the mere fact that the principal did not receive any benefit does not rid him of his liability..." 12. It is noticeable that in none of these cases the question of ratification arose for consideration before any Court. In fact; there was no ratification in all these cases. Thus, all the authorities are distinguishable inasmuch as in the instant case there is a specific ratification by executing a special power of attorney executed by respondents Nos. 1 and 2 in favour of respondent No,3 on 26th March, 1980. 13. On the other hand, Mr. Shaikh Haider, learned counsel for the respondents in both the appeals has referred to the cases, namely, (i) Secretary of State for India v. Dinshaw Nauroji and another (AIR 1925 Sind 275), (ii) Motharam Daulatram v. Pahlajrai Gopaldas (AIR 1925 Sind 159), (iii) Emil Adolph Zippel and others v. K.D. Kapur and Co. (AIR 1932 Sind 9), (iv) All India Reporter Ltd. v. Ramchandra Bhonde Batar (AIR 1961 Bom.292), (v) Jhumarmull Sethia v. Champalal Bothra (AIR 1960 Ca1.61) and (vi) M/s. Nabi Bakhsh and Sons v. Pakistan (PLD 1969 Kar. 566). (i) ' In the first case (AIR 1925 Sind 275) it was observed that the object of signature to the plaint is to prevent, as far as possible, disputes as to whether the suit was instituted with the plaintiffs knowledge and authority or not. It was thus held that the authority may be established by other means besides the signature. (ii) In the second case (AIR 1925 Sind 159), it was held that... a person who is named as a co-plaintiff may not sign and verify..." It is thus held that the authority to institute the suit may be established by means other than the signature alone". (iii) In the third case (AIR 1932 Sind 9), again, it was held that signature of other co-plaintiff is not imperative and such authority may be established by other means.
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(iv) In the fourth case (AIR 1961 Bom.292), it was held that signing and verification were matters of procedure and that the suit admitted and entered does not cease to be a plaint.... Because of defect or irregularity. It was further held that defect, if any, if so removed subsequently relates back to the original date of the suit. (v) In the fifth case (AIR 1960 Ca1.61) also, it was held that mere defect can be validated subsequently and it relates back to the date of the presentation of the plaint. (vi) In the sixth case (PLD) 1969 Kar.566) it was held that failure to sign objections was a mere irregularity. The said objections were allowed to be signed at the stage of Latters Patent Appeal. We may also refer to several other cases relevant to the point under discussion: (i) In the case of Shafi Metal Works and 5 others v. The Bank of Bahawalpur Ltd., Gujranwala (PLD 1973 Note 33, Lah.41), it was held that:- "There is no specific provision in the Code of Civil Procedure under which a plaint, as such, must be signed by a person holding a Power of Attorney and it cannot be said by any stretch of imagination that such a plaint which is not so signed can be deemed to be an absolutely void plaint, or a nullity. It is simply an irregularity. The important test for showing that certain proceedings are a nullity is to show that a mandatory provision of law has been violated. In view of the above discussion it can safely be said that in a case of defective signing or presentation of the plaint by a person who does not hold a Power of Attorney but is otherwise orally…
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