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Official Citation: 2025 IHC 201449
Court / Jurisdiction: Islamabad High Court
Parties: Syed Zaheer Hussain Naqvi vs M/s RP Corporation
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2025 IHC 201449. In this matter between Syed Zaheer Hussain Naqvi and M/s RP Corporation, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Islamabad High Court (Honourable Ms. Justice Saman Rafat Imtiaz) AUTHOR JUDGE: Honourable Ms. Justice Saman Rafat Imtiaz DECISION DATE: 04-FEB-2025 CASE NO: First Appeal Against Order-155-2024 CITATION: 2025 IHC 201449 PARTIES: Syed Zaheer Hussain Naqvi VS M/s RP Corporation LAW / SECTION: - SUBJECT: Against Order, REMARKS: FAO against order dated 16-09-2024. ============================================================ JUDGMENT SHEET
IN THE ISLAMABAD HIGH COURT, ISLAMABAD (JUDICIAL DEPARTMENT)
F.A.O. No. 141 of 2024
M/s R.P. Corporation (Pvt.) Limited Vs. Syed Zaheer Hussain Naqvi
F.A.O. No. 155 of 2024
Syed Zaheer Hussain Naqvi Vs. M/s R.P. Corporation (Pvt.) Limited
SAMAN RAFAT IMTIAZ, J.- 1. Through the instant judgment, I propose to decide both the above titled Appeals as they involve common questions of facts and law between the same parties. 2. The brief facts leading up to the filing of the instant Appeals are that the Plaintiff [Syed Zaheer Hussain Naqvi] filed a Suit for Recovery of Rs.5,500,000/- against the Defendant [M/s R.P. Corporation (Private) Limited]. The Defendant filed his written statement. However, thereafter, the Defendant stopped appearing as a result of which ex-parte proceedings Appellant/Judgment Debtor by: : Mr. Fahad Khan Tareen Advocate.
Respondent/Decree Holder by : Mr. Zaheer Bashir Ansari Advocate.
Date of Hearing : 27-1-2025.
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were initiated against him on 15-10-2022 and the Plaintiff produced his evidence ex-parte. Eventually, the Suit was decreed vide Ex-parte Judgment and Decree dated 30-9-2011. 3. On 15-12-2012 the Defendant filed an application for setting aside of the Ex-parte Judgment and Decree dated 30-9-2011 which was accepted by the learned Civil Judge 1st Class, Islamabad-West (“Trial Court”) vide Order dated 12-1-2017 whereby the Ex-parte Judgment and Decree was set aside subject to cost of Rs. 20,000/-. The Trial Court framed Issues and the parties were directed to produce evidence. 4. Meanwhile, the Plaintiff filed Civil Revision No. 127 of 2017 before this Court assailing the Order dated 12-1-2017. No stay was passed during its pendency. The Civil Revision was dismissed vide Judgment dated 8-6- 2022. 5. Nevertheless, on 22-11-2022 the Trial Court recalled the Order dated 12-1-2017 on account of the Defendant’s failure to fulfill the condition imposed therein for payment of cost Rs. 20,000/- and restored the Ex-parte Judgment and Decree dated 30-9-2011. 6. Thereafter the Plaintiff/Decree Holder filed Execution Petition on 16-2-2023. The Defendant/Judgment Debtor filed Objection Petition on the grounds that the Execution Petition was time barred and that the Ex- Parte Judgment and Decree dated 30-9-2011 was passed only to the extent of recovery of Rs.3,400,000/- and as such the mark-up sought by the Plaintiff/Decree Holder’s at flat rate of 11% on the decreetal amount of Rs.3,400,000/ is beyond the decree. The Executing Court vide the Order dated 16-9-2024 (“Impugned Order”) partially dismissed the Objection Petition to the extent of the objection that the Plaintiff/Decree Holder’s execution petition was time barred and with regard to the non-existence of decree sheet but allowed it to the extent of markup.
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7. The Defendant/Judgment Debtor (for ease of reference hereinafter referred to as Appellant/Judgment Debtor) has preferred F.A.O. No. 141 of 2024 assailing the Impugned Order passed by the Executing Court to the extent that the Objection Petition has been dismissed with regard to the execution petition being time barred. 8. On the other hand, the Plaintiff/Decree Holder (for ease of reference hereinafter referred to as Respondent/Decree Holder) has also assailed the Impugned Order by preferring F.A.O. No. 155/2024 to the extent that the Objection Petition has been allowed in respect of markup. 9. In respect of F.A.O. No. 141 of 2024, the learned counsel for the Appellant/Judgment Debtor submitted that to the extent that the Objection petition has been dismissed the Impugned Oder has been passed without cogent reason. He highlighted that the execution petition was filed by the Respondent/Decree Holder after a lapse of more than eleven years and as such was time barred. He emphasized that though the Appellant/Judgment Debtor had filed an application for setting aside of the Ex-parte Judgment and Decree dated 30-9-2011 but no stay order had been passed by the Trial Court during the pendency thereof. The Trial Court eventually accepted the Appellant/Judgment Debtor’s application vide Order dated 12-1-2017 but by such time the Respondent/Decree Holder’s limitation period for filing of execution petition under Article 181 of the Limitation Act, 1908 (“Limitation Act”) had expired. He explained that the first execution petition is filed under Article 181 which prescribes three years as the limitation period whereas subsequent applications are governed by Section 48, CPC. He argued that the Respondent/Decree Holder did not file execution petition within three years as prescribed under Article 181 of Limitation Act therefore he cannot avail the benefit of the extended period provided under Section 48 CPC. The learned counsel also pointed out that no stay was granted in the Civil Revision No. 127 of 2017 filed by the Respondent/Decree Holder before this Court assailing the Order dated 12-
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1-2017 either, which was in any event dismissed vide Judgment dated 8-6- 2022. The learned counsel submitted that the Order dated 12-1-2017 whereby the Ex-parte Judgment and Decree was set aside was subject to cost which was not paid by the Appellant/Judgment Debtor and as such the Trial Court recalled the same on 22-11-2022 and restored the Ex-parte Judgment and Decree dated 30-9-2011 but that no fresh decree sheet was drawn up at such time as such the rule of merger was not attracted. He argued that the Order dated 22-11-2022 simply clarifies the position that since the condition imposed vide Order dated 12-1-2017 was not complied with the Ex-parte Judgment and Decree dated 30-9-2011 stood restored but that no fresh right to file for execution accrued to the Respondent/Decree Holder as a result thereof. With regard to F.A.O. No. 155 of 2024, the learned counsel submitted that the same is time barred. Even otherwise he argued that since no mark-up was granted vide the Ex-parte Judgment and Decree dated 30-9-2011, the Executing Court cannot go beyond the decree and grant the same. 10. The learned counsel for the Respondent/Decree Holder submitted in respect of F.A.O. No. 141 of 2024 that even if the rule of merger is not applied, time does not start running under Article 181 of the Limitation Act from the date of decree rather it starts to run from the date the right to apply accrues. As such, he submitted that the right to apply for execution of the Ex-parte Judgment and Decree dated 30-9-2011 accrued to the Respondent/Decree Holder on 22-11-2022 when the order setting aside the Ex-parte Judgment and Decree was recalled and the Ex-parte Judgment and Decree was restored. The Respondent/Decree Holder filed the execution petition on 16-2-2023 which was therefore within the limitation period prescribed under Article 181 of the Limitation Act. The learned counsel refuted the argument that F.A.O. No. 155 of 2024 is time barred and submitted that limitation is governed by Article 156 of the Limitation Act which provides a period of ninety days. He argued that even though mark-
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up had neither been claimed by the Respondent/Decree Holder nor granted vide the Ex-parte Judgment and Decree dated 30-9-2011, it ought to be given due to the passage of time. 11. I have heard the learned counsel for the parties and have perused the record. F.A.O. No. 141 of 2024: 12. The main question raised by the Appellant/Judgment Debtor in this appeal is whether the learned Executing Court erred in law by holding vide the Impugned Order that the petition filed on 16-2-2023 by the Respondent/Decree-holder for the execution of the Ex-parte Judgment and Decree dated 30-9-2011 was within the limitation period. What is the applicable limitation period for execution proceedings and when did it begin to run?
13. It is undisputed that the applicable period of limitation to institute execution proceedings is governed by the residuary Article 181 of the Limitation Act, which stipulates three years limitation period that begins to run from the date when the right to apply accrues for applications for which no period of limitation is provided elsewhere in the schedule to the Limitation Act or by Section 48, CPC. It is well settled that the limitation period for the first application for execution of a decree is three years under Article 181 ibid whereas the subsequent applications are governed by Section 48, CPC which provides a period of 6 years1. The parties before this Court are in agreement that the Respondent/Decree Holder only filed one execution petition in respect of which the Appellant/Judgment Debtor filed its objection petition which was decided vide the Impugned order and
1 Sher Dil Khan vs. Baby Maimoona and others, 2016 CLC 256; Khalid Latif vs. United Bank Limited, Shah Alam Market, Lahore and 4 others, 2006 CLD 885; Zari Taraqiayati Bank Ltd. vs. Zafar Pervaiz, 2005 CLC 303; Habib Bank Ltd. vs. Zulfiqar Ali Khan and others, 2002 CLD 1758; Muhammad Ilyas and others vs. Muhammad and others, 1999 MLD 1432; and Mahboob Khan vs. Hassan Khan Durrani, PLD 1990 SC 778.
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as such the relevant provision in the instant case is Article 181 of the Limitation Act. 14. The right to apply for execution of the Ex-parte Judgment and Decree accrued to the Respondent/Decree Holder the day the decree sheet was prepared, which was on 30-9-20112. But the Respondent/Decree Holder did not institute execution proceedings within the three year limitation period. Does filing of an application for setting aside of an ex-parte judgment and decree operate as a stay?
15. During the limitation period, on 15-12-2012, the Appellant/Judgment Debtor filed an application for setting aside of the Ex-parte Judgment and Decree but no stay order was passed by the Trial Court during its pendency. 16. In similar circumstances, a Division Bench of the Peshawar High Court concluded in the case of United Bank Limited vs. Messrs Victory Engineering Company, S.I.E. Abbottabad, 1998 CLC 690 that since the matter was sub judice on account of the judgment debtor’s application for setting aside of the ex-parte judgment and decree for four years the decree holder was justified in not applying for execution and that it had the right to file for execution upon rejection of such application for setting aside of the ex-parte judgment and decree which was therefore held to be within the limitation period. 17. With utmost respect I beg to disagree with such holding. It is well settled that once limitation commences to run it continues to do so unless it is stopped by an express statutory provision3. As emphasized by the
2 National Bank of Pakistan vs. Gammon of Pakistan Ltd., 2009 CLD 330; Hqbib Bank Ltd. vs. Zulfiqar Ali Khan and others, 2002 CLD 1758;Muhammad Ilyas and others vs. Muhammad and others, 1999 MLD 1432. 3 Province of Sindh and 3 others vs. Thakur Das and others, 2022 MLD 174; Commissioner of Income Tax/Wealth Tax, Legal Division, Multan vs. Lady Dr. Musarrat Mumtaz C/O DHQ Hospital, D.G. Khan, 2011 PTD 2358.
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Supreme Court in Siraj Din and others vs. Mst. Khurshid Begum and others, 2007 SCMR 1792 it hardly needs any explanation that unless a case falls within any of the exceptions contained in Section 4 to 25 of the Limitation Act no exemption can be sought from the bar of limitation arising under the Limitation Act. 18. Section 15 of the Limitation Act unambiguously provides that the time during the continuation of the injunction or order by way of which the institution or execution of an application for execution of a decree has been stayed shall be excluded for computing the period of limitation prescribed for the application for the execution of a decree. However, there is no provision of law whereby the time during which an application seeking setting aside of a judgment and decree remains pending can be excluded from the computation of the limitation period for the application for the execution of such a decree in the absence of a stay. In other words, unless the institution or execution of a judgment and decree is stayed by an order the mere filing of an application for setting aside thereof does not operate as a stay. 19. The Supreme Court in Maulvi Abdul Qayyum vs. Ali Asghar Shah, 1992 SCMR 241 has categorically held that while Section 15 of the Limitation Act provides that the time during which execution proceedings remain suspended is to be excluded from computation of the limitation period for execution of a decree but where no stay is in operation the decree passed by the trial court continues to maintain its identity and is capable of execution. Therefore, filing of an application for setting aside of the Ex-parte Judgment and Decree dated 30-9-2011 by the Appellant/Judgment Debtor by itself did not pose any legal hindrance for the Respondent/Decree Holder from initiating proceedings for the execution thereof or provided any justification for not doing so nor can the time consumed in deciding such application be excluded from the computation of limitation for purposes of execution proceedings.
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20. I am fortified in my view by the judgment passed in Sheikh Muhammad Ijaz v. Sheikh Muhammad Mushtaq, 2014 MLD 646 whereby the Lahore High Court upheld the order of the executing court dismissing the application filed by the judgment debtor for stay of execution despite the fact that the Supreme Court had granted leave to appeal in respect of the order of the High Court upholding the dismissal of the application for setting aside of the ex-parte judgment and decree. The reason for rejection of stay application was that no stay order had been passed by the Supreme Court while granting leave. In other words, mere grant of leave to appeal by the Supreme Court in respect of the dismissal of the application for setting aside of the ex-parte judgment and decree was found not to be sufficient reason to grant stay of execution proceedings. 21. Similarly, in Mst. Parveen vs. Liaquat Hayat, 2010 CLC 1395, the Lahore High Court upheld the decision of the lower appellate court of dismissing the application of the judgment debtor seeking suspension of the decree during pendency of his application for setting aside of the ex-parte judgment and decree. The Lahore High Court agreed with the lower appellate court that no irreparable harm would be caused to the judgment debtor as he would be entitled to recover the immovable property in case he succeeds in his application whereas the balance of convenience was found to lie with the decree holder who would be more inconvenienced if the fruit of the decree was taken away. 22. The aforementioned cases confirm that mere filing of an application for setting aside of an ex-parte judgment and decree does not entitle the judgment debtor to suspension of execution proceedings on application much less to an automatic stay. Therefore the limitation did not stop running against the Respondent/Decree-holder on account of filing of the application for setting aside of the Ex-parte Judgment and Decree dated 30- 09-2011 by the Appellant/Judgment Debtor in which no stay was passed.
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What is the effect of the expiry of the limitation period during pendency of an application for setting aside of an ex-parte judgment and decree?
23. The effect of expiry of the limitation period during pendency of the application for setting aside of an ex-parte judgment and decree would depend on (a) whether during such pendency stay was in operation against the institution or execution of an application for execution of the ex-parte judgment and decree; and (b) the outcome of such application. 24. In case stay was in operation and the application is dismissed, the time during which such stay was in operation would be excluded from the limitation period by virtue of Section 15 of the Limitation Act. 25. In case there was no stay in the field during pendency of the application for setting aside of the ex-parte judgment and decree and if such application is ultimately rejected the execution petition would be time barred for reasons aforesaid. 26. Where however, the application for setting aside is allowed the judgment and decree is set aside with the result that the suit is deemed pending for re-adjudication4. The judgment and decree passed after such re-adjudication would entail its own limitation period starting from the date of such judgment and decree. 27. In the instant case, there was no stay during the pendency of the Appellant/Judgment Debtor’s application for setting aside the Ex-parte Judgment and Decree dated 30-9-2011. The three year limitation period under Article 181 of the Limitation Act for the execution of the Ex-parte Judgment and Decree dated 30-9-2011 expired on 29-9-2014.
4 Saifullah Khan through legal heirs vs. Zia Ullah Khan, 2023 YLR 78; Mst. Zohran Bibi and others vs. Ghulam Qadir and others, 2022 MLD 250; Dr. Anwar Hussain Siddiqui vs. Additional District Judge, Islamabad-West and others, 2021 CLC 2005; Muhammad Iqbal vs. Additional District Judge and others, 2019 YLR 43; Hussain Bux alias Mohammed Hussain through Attorney vs. Nabi Bux and 6 others, 2016 YLR 1597.
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28. It is important to bear in mind that although the Respondent/Decree Holder’s remedy to seek execution of the Ex-parte Judgment and Decree dated 30-9-2011 had become time barred on 29-9-2014 but the right of the Respondent/Decree Holder thereunder remained intact5. However, once an ex-parte judgment and decree is set aside there remains no conclusive determination of the rights of the parties in the field with regard to the matters in controversy in the suit. 29. In the instant case, the Appellant/Judgment Debtor’s application for setting aside the Ex-parte Judgment and Decree dated 30-9-2011 was allowed on 12-1-2017 albeit subject to payment of cost. The Trial Court framed Issues on 30-1-2017 and started recording evidence. Had the Appellant/Judgment Debtor complied with the condition imposed vide the Order dated 12-1-2017 and the Trial Court had passed a judgment and decree on merits after recording evidence and hearing the parties the limitation period for the execution thereof would start from the date of such judgment and decree and in that case the expiry of limitation with regard to the Ex-parte Judgment and Decree dated 30-9-2011 during pendency of the application for setting aside such decree would become immaterial as well as the question of stay. Therefore, allowing of the Appellant/Judgment Debtor’s application for setting aside of the Ex-parte Judgment and Decree dated 30-9-2011 was perhaps a blessing in disguise for the Respondent/Decree Holder as he was presented with another opportunity of securing a favourable judgment and decree and the chance to have it executed within its limitation period. 30. As luck would have it (or perhaps by design) the Appellant/Judgment Debtor did not comply with the condition imposed vide the Order on 12-1-2017 whereby the Ex-parte Judgment and Decree was set aside. The Civil Revision petition instituted by the Respondent//Decree Holder against the said order was dismissed on 8-6-
5 Habib Bank Limited vs. Muhammad Abbas and 2 others, PLD 2001 SC 489.
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2022. Thereafter, the Trial Court passed Order dated 22-11-2022, whereby the Order dated 12-1-2017 was recalled and the Ex-parte Judgment and Decree dated 30-9-2011 restored. Subsequently, the Respondent//Decree Holder filed his petition on 16-2-2023 seeking execution of the Ex-parte Judgment and Decree dated 30-9-2011. 31. The Appellant/Judgment Debtor filed Objections, which the Executing Court vide the Impugned Order dismissed to the extent of the Appellant/Judgment Debtor’s objection that the execution filed on 16-2- 2023 was time barred by holding that time would reckon from the date when the right to apply for execution accrued to the Respondent/Decree Holder which the learned Executing Court held was when the case was finally disposed of by the last court order on 22-11-2022 giving rise to a fresh period of limitation by applying the rule of merger in reliance upon Maulvi Abdul Qayyum vs. Ali Asghar Shah, 1992 SCMR 241. Maulvi Abdul Qayyum vs. Ali Asghar Shah, 1992 SCMR 241: 32. In the case of Maulvi Abdul Qayyum (Supra) the leave to appeal filed before the Supreme Court was against the order of the High Court passed in revision whereby the execution petition filed by the decree holder was dismissed as time barred. According to the High Court the time started running from the date of the first appellate order dismissing the appeal against the impugned judgment and decree of the trial court and not from the date of dismissal of the civil revision, whereby the decree of the first appellate court was reaffirmed and judgment and decree was drawn up. The Supreme Court observed that the reason that influenced the Single Bench of the High Court was that while there was a stay suspending the operation of the impugned judgment and decree of the trial court in the field during pendency of the first appeal no such stay had been granted by the High Court in the civil revision which was ultimately dismissed. The Supreme Court held that the High Court was correct in its observance of
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Section 15 of the Limitation Act whereby the time during which execution proceedings remain suspended is to be excluded from computation of the limitation period for execution of a decree but where no stay is in operation the decree passed by the trial court continues to maintain its identity and is capable of execution. Nevertheless, the Supreme Court allowed the appeal against such High Court order on the ground that the rule that the decree of the court of first instance merges into the decree of the appellate court which alone can be executed was not present to the mind of the learned Judge. In such context the Supreme Court held that “It is to be remembered that till such time, an appeal or revision from a decree is not filed, or such proceedings are pending but no stay order has been issued, such decree remains capable of execution but when the Court of last instance passes the decree only that decree can be executed, irrespective of the fact, that the decree of the lower Court is affirmed, reversed or modified”. [Emphasis added]. 33. The Supreme Court of Pakistan also considered whether the rule of merger which is usually regarded as an attribute of appellate jurisdiction can be extended to the revisional jurisdiction so as to furnish a starting point of limitation under Article 181 of the Limitation Act to a revisional decree modifying or affirming the decree of the lower court. The Supreme Court held that the rule of merger applies equally to the decree passed in exercise of revisional jurisdiction notwithstanding the distinction between the remedy of appeal and revision. In reaching such conclusion the Supreme Court observed that although an appeal is a continuation of the original proceedings while the remedy of revision is discretionary and certain limitations apply to the revisional court but in both cases the decree of the lower court is put in jeopardy and correction of error in the proceedings of the lower court is a common characteristic of both the remedies. It was also observed that the concept of acceptance of an appeal is that the lower court has failed to…
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