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Petitioner: MUHAMMAD YOUNUS and another VS Respondent: VENUE GURDAS ADVANI and others
Court Name: Sindh High Court Judge(s): Nadeem Akhtar Title: MUHAMMAD YOUNUS and another vs VENUE GURDAS ADVANI and others Case No.:Judicial Miscellaneous No, 50 of 2005 in Suit No,1124 of 1997 and Judicial
Miscellaneous. No,47 of 2012 in Suit No,1348 of 2005 and C.M.As. Nos.4350 of 2005 and 2217 of 2013 Date of Judgment:2014-09-16 Reported As: 2015 CLD 390, 2015 YLR 276 Result: Appeal dismissed Judgment ORDER ' NADEEM AKHTAR, J.---By this common order, I propose to decide and dispose of the two applications filed by the applicants Muhammad Younus and Mst. Majeeda under section 12(2), C.P.C., being J. Miscellaneous No,50/2005 for setting aside the order passed on 6-5-2002 in Suit No,1124/1997, and J. Misc. No,47/2012 for setting aside the order passed on 27-1-2009 in Suit No,1348/ 2005. Vide order dated 6-5-2002 impugned in J. Misc. No,50/2005, which was passed on an application filed by the plaintiff in Suit No,1124/1997, the said Suit was dismissed as not pressed with the consent of Messrs Al-Kehkashan (Pvt.) Ltd., defendant No,3 therein, and withott any objection from the other defendants therein. Whereas, vide order passed on 27-1-2009 in pending Suit No,1348/2005, which is impugned in J. Misc. No,47/2012, the voluntary statement filed by the plaintiff in the said Suit was recorded. FACTS AND PLEADINGS IN J. MISC. No, 50/2005 AND J. MISC. No,47/2012 : APPLICANTS' CASE IN J. MISC. No, 50/2005: 2. In their application under section 12(2), C.P.C. Registered as J. Misc. No,50/2005 for setting aside the order passed on 6-5-2002 in Suit No,1124/1997, the applicants have averred that they are the partners of a registered partnership firm; namely, M/S Beach Developers ('the firm'), the plaintiff in Suit No,1124/1997. The other two partners are Mst. Makia wife of Younus Haji Usman and Mrs. Nilofar Sikandar wife of Sikandar Abdul Karim. The firm is the owner of Plot No,DS-124, measuring 6.1 acres, situated at Khayaban-e-Shamsheer, Phase V (Extension), Defence Housing Authority, Karachi ('Plot No,DS-124'), wherein the applicants made investments of more than 50% share directly and
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through their family members. Applicant No,1 was managing the affairs of the firm, including its projects of construction. In the year 1996, both the applicants left for Canada, and due to this reason, the construction started by the firm was suspended. Applicant No,2 has not returned ever since she left Pakistan. In August, 2002, when applicant No,1 returned to Karachi, he came to know that the construction projects of the firm had been taken over by Sikandar Abdul Karim, who is the husband of one of the partners of the firm, Mrs. Nilofar Sikandar. Upon inquiries, applicant No,1 came to know that the said Sikandar Abdul Karim, in collusion with the other two partners of the firm (his wife Nilofar Sikandar and his sister-in-law Mst. Makia), had fraudulently misrepresented before the Registrar of Firms, and by producing forged documents, managed to get both the applicants retired from the firm and inducted himself as a partner thereof. Applicant No,1 filed an application under section 31 read with section 70 of the Partnership Act, 1932, on 12-8-2002 before the Registrar of Firms, but no action was taken on the said application. Thereafter, applicant No,1 again left for Canada. The applicants have stated that in view of the above illegal and mala fide acts of Sikandar Abdul Karim and the partners of the firm, they have filed Suit No,579/2005 before this Court, which is sub judice. 3. The applicants have alleged that they came to know that Sikandar Abdul Karim and his brothers had filed Suit No,901/1996 before this Court against several parties, including Messrs AlKehkashan (Pvt.) Ltd., without impleading the applicants as partners of the firm, although huge payments had been made by them and their family members in respect of the properties involved in Suit No,901/1996. It has been averred that the firm had some disputes with the defendants in Suit No,1124/1997 in relation to properties, due to which the said Suit was filed by the firm through Mrs. Nilofar Sikandar for specific performance of agreement, declaration and permanent injunction. The applicants have alleged that they came to know in the year 2005 that Mrs. Nilofar Sikandar and Mst. Makia, in collusion with Sikandar Abdul Karim, by entering into certain agreements with Messrs Al-Kehkashan (Pvt.) Ltd. And by playing fraud upon this Court, filed an application for withdrawal of Suit No,1124/1997 filed by the firm, and withdrew the said Suit unconditionally. They have further alleged that as a consequence of the said fraud, High Court Appeal No,132/1999 filed by the firm against the dismissal of its stay application in Suit No,1124/1997, and Suit No,901/1996 filed by Sikandar Abdul Karim and his brothers in respect of the properties of the firm, were also withdrawn unconditionally. According to the applicants, the application for withdrawal of Suit No,1124/1997 was signed and filed by the attorney of Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia, by suppressing the real facts of the case. 4. It has been further alleged by the applicants that Sikandar Abdul Karim, Mrs. Nilofar Sikandar, Mst. Makia and Messrs Al-Kehkashan .(Pvt.) Ltd. Collusively and fraudulently executed a deed of assignment and got the same registered on 30-4-2002, whereby Plot No,G-5, measuring 3,703.27 sq. Yds., Block 7, KDA Scheme No,5, Kehkashan; Clifton, Karachi, ('the Clifton plot'), was assigned and transferred in the personal names of Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia, instead of assignment and transfer thereof in the name of the firm. They have also alleged that these collusive and fraudulent acts were committed before the withdrawal of Suit No,1124/1997, High Court Appeal No,132/1999 and Suit No,901/1996, not only to cause loss to the firm and to them, but also in order to play fraud upon this Court. They have further alleged that in lieu of the assignment and transfer of the Clifton plot in the personal names of Sikandar Abdul Karim, Mrs. Nilofar Sikandar, Mst. Makia, they collusively and fraudulently transferred Plot No,DS-124 belonging to the firm in the name of Messrs Al-Kehkashan (Pvt.) Ltd., and also received "hundreds of crores" of Rupees from Messrs Al-Kehkashan (Pvt.) Ltd. The applicants have prayed that, in view of the above stated collusive and fraudulent acts committed by the above named parties and the fraud played by them upon this Court, the impugned order passed on 6-5-2002 for the unconditional
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withdrawal of the firm's Suit No,1124/1997 be recalled/set aside, and the said Suit be proceeded with on merits. REPLY BY THE FIRM: 5. In J. Miscellaneous No,50/2005, objections have been filed by the firm, wherein the averments and allegations made by the applicants in their application under section 12(2), C.P.C. Have been denied. The firm has averred in its objections that both the applicants ceased to be the partners of the firm with effect from 26-8-1998, when they voluntarily retired from the partnership; the applicants have no existing right, interest, share or claim in the assets, business or properties of the firm; after their voluntary retirement, they have no right or authority to question or object to any of the acts and decisions of the firm or its partners; they have no locus standi to file the present application; and, no fraud or misrepresentation was practised or committed by any of the parties when the impugned order was passed on 6-5-2002 in Suit No,1124/1997. By denying that major share or portion of the consideration of the plot or investment was made by the applicants, it is claimed by the firm that the financial assistance and funds were provided to the firm from time to time by Sikandar Abdul Karim. The firm has also denied that applicant No,1 was not in Pakistan during the period alleged by him. It is claimed that he had gone abroad for a short visit, and after returning to Karachi, he fully participated in the business of the firm until he retired on 26-8-1998; and, applicant No,1 left Pakistan in August 1998 after his retirement, and thereafter he as well as applicant No,2 visited Karachi frequently. 6. Regarding the allegations made by the applicants about their alleged illegal retirement and the alleged induction of Sikandar Abdul Karim as a partner of the firm, the firm has asserted that applicant No,1 was fully aware of the induction of Sikandar Abdul Karim as a partner of the firm, as two agreements were executed on 26-8-1998 by applicant No,1 for self and as the attorney, of applicant No,2; one agreement was for the sale and transfer of the applicants' 50% share in the firm to Sikandar Abdul Karim; and, the other agreement was for the re-constitution of the firm, whereby both the applicants confirmed their retirement from the firm and Sikandar Abdul Karim was inducted in their place as a partner of the firm having 50% share therein. The firm has further asserted that all the requisite documents in this behalf were signed by applicant No,1 as per legal requirements, and the same were filed by him personally with the Registrar of Firms Karachi along with his coring letter dated 20-10-1998; after thorough scrutiny, the Registrar of Firms entered the above changes relating to the firm in his official record; and, the mala fide application filed by applicant No,1 on 12-8-2002 containing false allegations was dismissed, and he was fully aware of its dismissal as he was in Karachi at the relevant time. It is averred that applicant No,1 not only executed the above agreements and documents, but vide his letter dated 20-10-1998 addressed to the Defence Housing Authority, he also confirmed his retirement from the firm. 7. In its objections, the firm has denied that the assignment and transfer of the Clifton plot in the personal names of Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia, or the transfer of Plot No,DS-124 in -favour of Messrs AlKehkashan (Pvt.) Ltd., were collusive or fraudulent; or any fraud or misrepresentation was committed by the parties or was played upon the Court when the order for withdrawal of Suit No,1124/1997 was passed. The firm has reiterated that the applicants, after having voluntarily retired from the firm, have no locus standi to challenge or question the actions or decisions of the firm or its partners. REPLY BY MESSRS AL-KEHKASHAN (PVT.) LTD.: 8. J. Miscellaneous. No,50/2005 has also been opposed by Messrs Al-Kehkashan (Pvt.) Ltd. By filing counter affidavit in reply thereto, wherein it has been averred that Plot No,DS-124 was owned by Venu Gurdas Adwani and Messrs International Construction Corporation (the vendors); by an agreement dated 3-11-1994, Venu Gurdas Adwani agreed to sell his 50% share in Plot No,DS-124 to Al-Kehkashan (Pvt.) Ltd. In consideration of Rs,42,500,000.00; upon execution of the said
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agreement, the possession of Plot No,DS-124 was handed over to AlKehkashan (Pvt.) Ltd. When it made a part payment of Rs,10,000,000.00 to Venu Gurdas Adwani; under the said agreement, the balance amount of Rs,32,500,000.00 was payable by Al-Kehkashan (Pvt.) Ltd. On behalf of the vendors to the Defence Housing Authority towards the original occupancy value of Plot No,DS-124; instead of the said balance amount, AlKehkashan (Pvt.) Ltd. Had to pay a sum of Rs,43,600,000.00 as the Defence Housing Authority had demanded additional amount towards delayed payment and surcharge; all necessary documents were executed by Venu Gurdas Adwani for the transfer of Plot No,DS-124 in favour of Al-Kehkashan (Pvt.) Ltd.; and, upon completion of all the above formalities, when the letter for transfer/mutation of Plot No,DS-124 in favour of Al-Kehkashan (Pvt.) Ltd. Was about to be submitted, the firm filed Suit No,1124/1997 and obtained an ad interim injunction order therein, due to which the process of transfer/mutation in favour of Al-Kehkashan (Pvt.) Ltd. Could not take place from 1997 till about the middle of the year 2002. 1t has been averred that due to the blockade of its huge funds, Al-Kehkashan (Pvt.) Ltd. Had to sacrifice the Clifton plot owned by it, by transferring the same in favour of the partners of the firm in consideration of the withdrawal of the firm's Suit No,1124/1997 and H.C.A. No,132/1997, and the connected Suit No,901/1996. In view of the above, the allegations of fraud and misrepresentation levelled by the applicants have been denied by Al-Kehkashan (Pvt.) Ltd. OBJECTIONS BY MESSRS AKBAR MEHMOOD AND OTHERS:-- 9. Messrs Akbar Mehmood and others filed C.M.A. No,2394/2009 in J. Misc. No,50/2005, praying that they may be impleaded therein as parties. Their application was allowed on 5-11-2013 with the consent of all the parties. It is their case that their predecessor-in-interest Messrs Al-Kehkashan (Pvt.) Ltd. Was the lawful and absolute owner of the entire Plot No,DS-124, which was sub-divided into two plots; namely, DS-124/I measuring 15,000 sq. Yds., and DS-124/II measuring 14,524 sq. Yds.; Messrs Al-Kehkashan (Pvt.) Ltd. Sold the sub-divided Plot No,DS-124/I to one Sheikh Abid Hussain, and retained the ownership of the other subdivided Plot No,DS-124/II; and, after purchasing Plot No,DS-124/I from M/S AlKehkashan (Pvt.) Ltd., the said Sheikh Abid Hussain gifted the same to M/S Akbar Mehmood and others, and the said gift was accepted by them. They have pointed out that in their Suit No,579/2005, the applicants did not claim any interest in Plot No,DS-124 on the basis of their alleged share in the firm. They have also pointed out that in C.P.L.A. No,78-K/2007 filed by the firm, arising out of the applicants' Suit No, 579/2005, it was observed by the Hon'ble Supreme Court that in case their said Suit is decreed they would be entitled to their respective shares. It has been asserted that in view of the order of the Hon'ble Supreme Court, the present application filed by the applicants on the basis of their alleged share in the firm is devoid of any legal or factual basis; and, the issue of their alleged share in the firm is yet to be determined in their Suit No,579/2005. It has also been asserted that the applicants had lawfully relinquished their rights and interests in the firm; and, neither the applicants nor the firm have any right, title or interest in Plot No,DS-124. The allegations of fraud and misrepresentation have been denied by Messrs Akbar Mehmood and others. DEFENCE HOUSING AUTHORITY: 10. In its reply/objections to J. Misc. No,50/2005, the Defence Housing Authority ('DHA') confirmed that Plot No,DS-124 was allotted to M/S International Construction Corporation, and the same was transferred in the name of M/S Al-Kehkashan (Pvt.) Ltd. In September 1997 as per the prescribed procedure; Plot No,DS-124 was bifurcated into two plots, one of which was sold by Al-Kehkashan (Pvt.) Ltd. On 26-8-2002; and, the plots were transferred in a transparent manner after personal appearance of the co-owner. APPLICANTS' CASE IN J. MISC. No, 47/2012: 11. In the application filed by the applicants under section 12(2), C.P.C., registered as J. Miscellaneous No,47/2012, for setting aside the order passed on 27-1-2009 in Suit No,1348/2005, the
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background regarding the firm, their claims that they are the partners thereof and Plot No,DS-124 is owned by the firm, and the allegations about their illegal retirement and induction of Sikandar Abdul Karim as a partner of the firm, are the same as averred and alleged by them in J. Misc. No,50/2005. In J. Misc. No,47/2012, the applicants have stated that they came to know on 9-2-2012 in J. Misc. No,50/2005 that an order was passed in Suit No,1348/2005 on 27-1-2009 on the basis of a statement filed by the plaintiff therein. They have alleged that the impugned order dated 27-1-2009 was obtained by the plaintiff in Suit No,1348/2005, M/S Akbar Mehmood and others, Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia, in collusion with one another, by misrepresentation and by playing fraud upon this Court. They have also alleged that the impugned order is adversely affecting their rights and interests not only in J. Misc. No,50/2005, but also in respect of Plot No,DS- 124 owned by the firm. REPLY BY THE FIRM AND MESSRS AL-KEHKASHAN (PVT.) LTD.: 12. Separate counter affidavits have been filed by the firm and Messrs AlKehkashan (Pvt.) Ltd. In reply to J. Miscellaneous No,47/2012, wherein the averments and allegations made by the applicants have been denied, and the same defense/stand has been taken as has been taken by them in their counter affidavits to J. Miscellaneous No,50/2005. They have strongly denied that the impugned order passed on 27-1-2009 was obtained by collusion, misrepresentation, or by playing fraud upon this Court. OBJECTIONS OF MESSRS AKBAR MEHMOOD AND OTHERS: 13. In their counter affidavit, Messrs Akbar Mehmood and others have opposed J. Misc. No,47/2012 on almost the same grounds that have been urged by them in their counter affidavit to J. Miscellaneous No,50/2005. They have raised some additional objections, such as, the application is barred by limitation; the firm, who was the owner of Plot No,DS-124, has withdrawn Suit No,1124/1997, and is not claiming any right, title or interest in the said plot; the applicants, having no right, title or interest in Plot No,DS-124, are not "aggrieved persons"; and, the applicants have failed to specifically plead the fraud and/or misrepresentation allegedly committed at the time of passing of the impugned order dated 27-1-2009. The allegations of misrepresentation and fraud have been denied by Messrs Akbar Mehmood and others. DEFENCE HOUSING AUTHORITY: 14. In its counter affidavit to J. Miscellaneous No,47/2012, DHA has stated that Plot No,DS-124 was transferred to Messrs International Construction Co.; thereafter, Messrs Al-Kehkashan (Pvt.) Ltd., claiming to have purchased Plot No,DS-124 from the partners of the firm, approached DHA for its transfer in its name, to which DHA agreed subject to clearance of its dues and appearance of Venu Gurdas Advani and others before DHA for signatures; after approval of the President Executive Board, Plot No,DS-124 was transferred in favour of Messrs AlKehkashan (Pvt.) Ltd. On 3-7-2002 at the request of the present applicants and on the basis of transfer documents submitted by the partners of Messrs International Construction Co.; Plot No,DS-124 was legally divided by DHA vide letter dated 22-7-2002 on the basis of the documents submitted for its division; sub-divided Plot No,DS-124/I was transferred in favour of Mr. Abid Hussain on 26-8-2002 upon submission of transfer documents; and, at present Plot No,DS-124/I exists in the name of Mr. Abid Hussain, and Plot No,DS- 124/II exists in the name of Messrs Al-Kehkashan (Pvt.) Ltd. KARACHI MUNICIPAL CORPORATION: 15. The defunct City District Government Karachi, now Karachi Municipal Corporation ('KMC'), has also been cited by the applicants as a respondent in J. Miscellaneous No,47/2012. In its counter affidavit, KMC has stated that the Clifton plot was mutated in favour of Messrs Al-Kehkashan (Pvt.) Ltd. On the basis of a registered sale deed dated 17-5-1986; vide mutation letter dated 29-6-2002, it was mutated in the names of Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia, on the
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basis of the registered deed of assignment dated 30-4-2002; and, it was mutated vide mutation letter dated 17-12-2005 on the basis of the registered sale deed dated 26-5-2005. SUBMISSIONS OF THE APPLICANTS' COUNSEL IN JUDICIAL MISCELLANEOUS No,50/2005: 16. Mr. Akhtar Hussain, learned counsel for the applicants, reiterated the contents of the application filed by the applicants under section 12(2), C.P.C. He contended that admittedly the applicants were the partners of the firm when Suit No,1124/1997 was filed by the firm on 10-9-1997, as its composition was purportedly changed on 26-8-1998 when the applicants were illegally and collusively retired from the firm and Sikandar Abdul Karim was inducted as a partner; the said illegal acts were committed by Sikandar Abdul Karim in collusion with the other two partners of the firm, that is, his wife Mrs. Nilofar Sikandar and his sister-in-law Mst. Makia, without the 'consent of the applicants and in their absence when they were not in Pakistan;after excluding and retiring the applicants from the firm illegally, Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia then entered into an agreement with Messrs AlKehkashan (Pvt.) Ltd., whereby the firm's Plot No,DS-124 was transferred by them in favour of Messrs Al-Kehkashan (Pvt.) Ltd. In consideration of the Clifton plot plus crores of Rupees; and, after this collusive and mala fide deal, Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia, claiming to be the partners of the firm, filed an application for the withdrawal of the firm's Suit No,1124/1997, which was allowed through the impugned order dated 6- 5-2002 with the consent collusively given by Messrs Al-Kehkashan (Pvt.) Ltd. By referring to the resolution passed on 30-1-2002 by the Board of Directors of Messrs Al-Kehkashan (Pvt.) Ltd., the learned counsel submitted that the company had resolved that the Clifton plot will be transferred in favour of the firm in consideration of withdrawal of the litigation, including Suit No,1124/1997, but instead of acting upon the said resolution, the Clifton plot was illegally transferred in the personal names of Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia. The main thrust of the arguments of the learned counsel was that on the date when the impugned order was passed, the applicants were and are still the partners of the firm; Sikandar Abdul Karim was/is not a partner of the firm; and, the decisions regarding the sale and transfer of the firm's Plot No,DS-124, acquiring the Clifton plot in lieu thereof, and/or withdrawing the firm's Suit No,1124/1997, could not be made without the consent of the applicants. It was urged that by ousting the applicants from their legitimate share in the firm and its valuable properties, Sikandar Abdul Karim, Mrs. Nilofar Sikandar, Mst. Makia and Messrs Al-Kehkashan (Pvt.) Ltd. Turned out to be the main beneficiaries, and they collusively obtained the impugned order dated 6-5-2002 for the withdrawal of Suit No,1124/1997 by playing fraud upon this Court, due to which the applicants have been completely deprived of their valuable rights, title and interest in the firm and its assets. SUBMISSIONS OF THE APPLICANTS' COUNSEL IN J. MISC. No,47/2012: 17. Regarding this application filed under section 12(2), C.P.C., Mr. Akhtar Hussain, learned counsel for the applicants, contended that the applicants came to know on 9-2-2012 about the impugned order dated 27-1-2009 passed in Suit No,1348/2005 on the basis of a statement filed by the plaintiff therein, whereby it was held that the rights, title and interest of Messrs Al-Kehkashan (Pvt.) Ltd. And Messrs Akbar Mehmood and others, in Plot No,DS-124 stand protected, and all claims to the said plot stand relinquished in their favour. It was further contended that the plaintiff in Suit No,1348/2005, in collusion with Messrs Al-Kehkashan (Pvt.) Ltd. And Messrs Akbar Mehmood and others, filed a statement in the said Suit, whereby the claim of Messrs Akbar Mehmood and others in respect of Plot No,DS-124 was admitted by the plaintiff in Suit No,1348/2005, and he also stated that the said plot had been sold by him to Messrs Al-Kehkashan (Pvt.) Ltd. The learned counsel argued that the subject matter of Suit No,1348/2005 was Plot No,ST-24 and not Plot No,DS- 124,therefore, no order in respect of Plot No,DS-124 could be passed in the said Suit. It was also argued that Messrs Akbar Mehmood and others did not acquire any legal right, title or interest in the sub-divided Plot No,DS-124/I, as the alleged title of their predecessor-in-interest Messrs Al-
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Kehkashan (Pvt.) Ltd. Was based on fraud and collusion. He contended that the plaintiff in Suit No,1348/2005 and Messrs Al-Kehkashan (Pvt.) Ltd. Were parties in J. Misc. No,50/2005, and Messrs Akbar Mehmood and others were interveners therein, but the proceedings of J. Miscellaneous No,50/2005 were deliberately concealed by them in Suit No,1348/2005 when the impugned order was passed therein. It was urged that the impugned order was obtained by the above named parties, and Sikandar Abdul Karim, Mrs. Nilofar Sikandar and Mst. Makia by concealment of facts and misrepresentation, and by playing fraud upon the Court, due to which the applicants have been deprived of their valuable vested rights and interest in the firm's Plot No,DS-124. 18. In support of his above submissions, learned counsel for the applicants relied upon (1) Mrs. Afroz Shah and others v. Sabir Qureshi and others, PLD 2010 SC 913, (2) Abdul Razzaq v. Muhammad Islam…
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