CLD 2002 Judgments

2002 C L D 1146

Appellate Bench

[Security & Exchange Commission]

Before M. Zafar‑ul‑Haq Hyazi, Commissioner (CL) and Shahid Ghaffar, Commissioner (SM)

Messrs BILWANI & CO. CHARTERED ACCOUNTANTS‑‑‑Appellant

versus

EXECUTIVE DIRECTOR (SPECIALIZED COMPANIES), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN‑‑‑Respondent

Appeal No. 16 of 2001, decided on 16th January, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.254(3)(d)‑‑‑Companies (General Provisions and Forms) Rules, 1985, Rr.4(2) & 25‑‑‑Securitiesand Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal to Appellate Bench of Securities and Exchange Commission‑‑­ Auditor was alleged to be indebted to the company‑‑­Executive Director (Specialized Companies Division) of the Commission on such allegation issued show‑cause notice to the auditor in capacity of statutory auditor of company‑‑­Auditor in reply denied his involvement in any trading business indebtedness with the company and requested that he be allowed to present his case through authorized representative‑‑‑Executive Director insisted on personal appearance of the auditor (appellant) but on his failure in appearing so, passed ex parte order imposing fine, on him‑‑Auditor regarding his non‑appearance on date of hearing before Executive Director submitted that he had to proceed to U.S.A. on account of operation of his son and information of said exigency was duly notified to the Specialized Companies Division of the Commission‑‑‑Auditor's contention was that despite his said request, insistence of Executive Director on his personal appearance was not legally justified‑‑‑Validity‑‑‑Executive Director had erred in insisting upon personal appearance of according to R.125 read in proceedings for an alleged offence, with R.4(2) of the Companies. (General Provisions and Forms) Rules, 1985, could appear before the Commission through an Advocate, a practising member of Institute of Chartered Accountants of Pakistan and a practising member of Institute of Cost and Management Accountants of Pakistan‑‑­Auditor (appellant) had not been provided sufficient opportunity to present his case and impugned order had been passed in haste‑‑‑Appellate Bench of the Security Exchange Commission set aside the impugned order and remanded the case to Executive Director (SC) for its decision after providing proper opportunity of hearing to auditor/appellant through an authorized representative, if he so desired.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.254(3)(d)‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33‑‑‑S.R.O. No. 183(1)/2001, dated 20‑3‑2001‑‑‑S.R.O. No. 862(1)/2000, dated 6‑12‑2000‑‑‑Appeal to Appellate Bench of Securities and Exchange Commission‑‑‑Defaults under S.254 of Companies Ordinance, 1984‑‑‑Powers of Executive Director (Specialized Companies Division) of the Securities and Exchange Commission to take cognizance of such offence ‑‑‑Scope‑‑­Notification S.R.O. No. 862(1)/2000, dated 6‑12‑2000, whereby cognizance of defaults and offences committed under statutory provisions was to be taken by Commissioner concerned had been amended through S.R.O. No.183(1)/2001, dated 20‑3‑2001 and as per S.2(i) thereof, Executive Director (SC) had been delegated powers of the Commission to exercise all adjudicatory powers under relevant laws and to take cognizance of the offences as such Executive Director (SC) was fully empowered to take cognizance of defaults under S.254 of Companies Ordinance, 1984.

Ms. Farah Qamar Faiz, Joint Director (SC) and Wajid Waheed Khan, Joint Director (SC) for Respondent.

Date of hearing: 16th January, 2002.

2002 C L D 1150

Appellate Bench

[Security and Exchange Commission]

Before M. Zafar‑ul‑Haq Hijazi, Commissioner (CL) and Shahid Ghaffar, Commissioner (SM)

Messrs NATIONAL ASSET LEASING CORPORATION LTD. ‑‑‑Appellant

versus

EXECUTIVE DIRECTOR (SPECIALIZED COMPANIES DIVISION). SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN‑‑‑Respondent

(a) Companies Ordinance (XLVII of 1984)‑‑‑‑

‑‑‑‑S.208‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal before Appellate Bench of Security and Exchange Commission‑‑‑Investments by company in associated undertakings in deposit account and certificates of deposits‑‑‑Executive Director (SC) of the Security and Exchange Commission after considering reply to show‑cause notice concluded that such investments constituted 83.52% of the paid‑up capital plus free reserves of the company, thus, imposed fine on all its Directors‑‑­Contention of company was that said investment did not constitute investments in terms of Explanation to S.208(1) of Companies Ordinance, 1984 as the same was neither loan nor advance or equity, but was "deposit"‑‑‑Validity‑‑‑Such interpretation of the company could not be accepted as Explanation to S.208 of the Companies Ordinance qualified any amount, which was not in the nature of "normal trade credit" to be considered as investment.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.2(1)(15‑A) & 208‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal before Appellate Bench of Security and Exchange Commission‑‑‑Investments by company in its associated undertakings in violation of S.208 of Companies Ordinance, 1984‑‑‑Executive Director (SC) of the Security and Exchange Commission for said violation imposed fine on all the Directors of the company‑‑‑Company claiming to be a financial institution pleaded that S.208 of Companies Ordinance, 1984 was not applicable to its case ‑‑‑Validity‑‑­Only such financial institutions were exempt from application of S.208 of the Companies Ordinance, 1984 which were approved by Federal Government in terms of S.208(6)(b) of the Companies Ordinance‑‑‑Company in the present case, had never been notified as a financial institution in official Gazette, as such same did not qualify to be a financial institution for purpose of exemption provided under S.208 of Companies Ordinance, 1984.

(c) Companies Ordinance (XLVII of 1984)‑‑‑‑

‑‑‑‑S.208‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal to Appellate Bench of Security and Exchange Commission‑‑‑Investments in associated companies/undertakings‑‑‑Commission while examining published accounts of the company noticed heavy investments made by company in its associated undertakings‑‑‑Executive Director (SC) of the Security and Exchange Commission after considering reply to show‑cause notice concluded that said total investments constituted 83.53% of the paid‑up capital plus free reserves of the company, thus, imposed fine on all the Directors of the company and made them liable to reimburse to the company any consequential loss on such account as provided in S.208(5) of Companies Ordinance, 1984‑‑‑Contention of company was that if default was made or law was violated, the same was not done knowingly and wilfully‑‑‑Validity‑‑­Chief Executive of the Company made statement before Executive Director (SC) that said investments were made with approval of Corporate Law Authority, but no evidence to that effect had been produced‑‑‑Such fact indicated that directors were mindful of the provisions of S.208 of the Companies Ordinance‑‑‑Legal opinion obtained by management factually pertaining to other companies of the group also indicated that management of the company was reasonably conscious about provisions of S.208 of the Companies Ordinance‑‑‑Company's plea of not having made default wilfully and knowingly could not be accepted in circumstances‑‑ ‑Management had siphoned off company's funds mercilessly and so‑called investments in associated undertakings had really ruined the company‑‑‑Appellate Bench of the Commission dismissed the appeal of the Company in circumstances.

(d) Companies Ordinance (XLVII of 1984)‑‑‑‑

‑‑‑‑S.208‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal to Appellate Bench of Security and Exchange Commission‑‑‑Investments made by company in its associated undertakings in violation of S.208 of Companies Ordinance, 1984‑‑‑Executive Director (SC) of the Security and Exchange Commission for said violation imposed fine on all the Directors of the company‑‑­Contention of company was that requirement of S.208(1) of Companies Ordinance, 1984 was subsequently fulfilled by passing special resolution in its annual general meeting‑‑­Validity‑‑‑Passing of such special resolution would not make any difference as the approval of Corporate Law Authority for making investment in associated undertakings in excess of paid‑up capital and free reserves of the company had not been obtained.

Athar Minallah for Appellants.

Ms. Irum Wahid Butt, Director (Leasing) alongwith Ms. Farrah Qamar Faiz, Joint Director for Respondent.

Date of hearing: 8th January, 2002.

2002 C L D 1164

Appellate Bench

[Security and Exchange Commission]

Before M. Zafar‑ul‑Haq Hijazi. Commissioner (CL) and Shahid Ghaffar, Commissioner (SM)

In re: MEHMOOD ALI KHAN. CHARTERED ACCOUNTANT AND NASIM AKHTER, A.C.A

(a) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑S.20(4)(o) & Sched.‑‑Companies Ordinance (XLVII of 1984). Ss.157, 255, 257, 260(1) & 476‑‑‑S.R.O. No.230(1)/2001, dated 16‑4‑2001‑‑‑Powers bf Executive Director (E&M)‑‑‑Scope‑‑‑Securities and Exchange Commission through S.R.O. No. 230(1)/2001, dated 16‑4‑ 2001 has empowered the Executive Director of its Enforcement and Monitoring Division to adjudicate offences, contraventions and defaults under provisions of Ss.157, 255, 257 & 260(1) of Companies Ordinance, 1984.

(b) Companies Ordinance (XLVII of 1984)---

‑‑‑‑Ss. 256, 257, 260(1)(b), 205 & 476‑‑‑Chartered Accountants Ordinance (X of 1961). S‑24 ‑‑‑ Companies (General Provisions and Forms) Rules, 1985, Forms Nos.1 & 25‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997). S.33‑‑‑Appeal before Appellate Bench of Security and Exchange Commission‑‑‑Signature on auditor's report‑‑‑Signing of auditor's report by some one else instead of the appointed auditor‑‑‑Executive Director of Enforcement and Monitoring Division of the Securities and Exchange Commission during examination of financial statements of the company noticed that auditor's report was not signed by the person who was appointed as auditor of the company‑‑­Both the appointed auditor and the signatory took the plea of having established a partnership verbally, and that report was finally signed by the appointed auditor before the date of annual general meeting‑‑‑Executive Director (E&M) of the Commission not being satisfied with such plea imposed fine on both the persons under S.260(1) read with S.476 of Companies Ordinance. 1984‑‑‑Validity‑‑‑Appointed auditor's plea of having constituted a firm verbally could not be entertained, for the reason that if same was accepted, then whole legal structure for regulating the profession of accountancy would collapse‑‑‑Firms of Chartered Accountants were required to file particulars of the firms including information about its partners with the Institute of Chartered Accountants of Pakistan within one month from, the date of any change therein‑‑‑Legislature had taken much care by requiring particulars of such firms to be kept by the companies under S.205 of Companies Ordinance, 1984; then requiring complete details regarding such firms to be disclosed in Form 29 and Form A; and then requiring that auditor's report could not be signed by any one else except by the person appointed as auditor or a partner in case of a firm‑‑‑Purpose of said legal requirements was that unauthorised person should not sign the auditor's report(s)‑‑‑Only the person appointed as auditor could sign the auditor's report, and none else‑‑‑Plea of appointed auditor of having signed auditor's report before the date of annual general meeting would riot help him as auditor's report circulated to members carried the signatures of the other person who could not sign the same in terms of S.257 of Companies Ordinance, 1984‑‑‑Both the appointed auditor and the signatory of the report had acted in contravention o S.257(1) of the Ordinance for which penalty as provided under S.260(1) of the said Ordinance had rightly been imposed by the Executive Director (E&M)‑‑‑Appellate Bench of the Security and Exchange Commission dismissed the appeal in circumstances.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.257. 260 & 476(1)(b)‑‑‑Chartered Accountants Ordinance (X of 1961). S.24‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal to Appellate Bench of Security and Exchange Commission‑‑­Signing of auditors' report by some one else instead of the appointed auditor of the company‑‑‑Executive Director (E&M) of the Security and Exchange Commission, after finding both the appointed auditor and the signatory to be guilty of professional misconduct in terms of Chartered Accountants Ordinance, 1961. in addition to imposing fine on them under S.260(I) read with S.476 of Companies Ordinance, 1984, referred their case to Institute of Chartered .Accountants of Pakistan for necessary action‑‑‑Validity‑‑‑Matter in question pertained to Institute of Chartered Accountants of Pakistan, to which the same had been rightly referred‑‑‑Appellate Bench of the Commission, thus, declined to consider the issue in appeal.

Nemo for Appellant.

Mubashar Saeed Saddozai, Deputy Director for Respondent.

Date of hearing: 13th February, 2002.

2002 C L D 1309

[Appellate Bench Security and Exchange Commission]

Before N.K. Shahani, Commissioner, Insurance and Information Technology and Abdul Rehman Qureshi, Commissioner, Enforcement and Monitoring

CHIEF EXECUTIVE, BAREX LIMITED and another---Appellants

versus

EXECUTIVE DIRECTOR (COMPANY LAW DIVISION), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and 2 others---Respondents

Appeal No. 8 of 2001, decided on 3rd January, 2002.

Companies Ordinance (XLVII of 1984)---

----Ss. 263, 158, 180, 199, 200, 232 & 252---Security and, Exchange Commission of Pakistan Act (XLII of 1997), S.33--­Appeal before Appellate Bench of the Commission --­Investigation of affairs of company---Executive Director (Company Law Division) of the Commission appointed Chartered Accountant to investigate the affairs of company---Area of investigation as identified by Executive Director was the illegalities committed in holding of elections of directors and continuation of Chief Executive in violation of Ss-180, 199 & 200 of Companies Ordinance, 1984; non­-presentation of accounts in- Annual General Meetings and appointment of auditor in violation of Ss.158, 233 & 252 of Companies Ordinance, 1984; dispute relating to transfer and allotment of shares; mismanagement and misappropriation of funds and other matters relating and incidental to said matters---Validity---Where a Company did not hold Annual General Meeting within prescribed time without any special reason, then it could be inferred that Company was not taking interest to protect the interest of shareholders---No sufficient evidence had been brought before Executive Director in rebuttal by appellants to show compliance with certain statutory requirements of the Ordinance---Appellants had admitted to have committed violations of the Ordinance---Investigations into the affairs of company in the terms set out in impugned order was necessary and it was in the interest of justice to ascertain the extent of violations committed by appellant and as a consequent the prejudice caused to minority shareholders--­Appellate Bench of the Commission dismissed the appeal in circumstances.

Service Industries Textile Limited v. SECP 2000 MLD 1880 ref.

Muhammad Kamran Sheikh, Mujeeb-ur-Rehman Shami and Umer Mujib Shami for Appellants.

Munawwar Bhatti. Dy. Registrar, SEC for Respondent No. 1.

Sardar Khan Niazi for Respondent No.2.

Ahmad Muzammal, Joint Registrar SEC.

Date of hearing: 5th December, 2001.

2002 C L D 1334

[Appellant Bench Security and Exchange Commission]

Before M. Zafar‑ul‑Haq Hijazi, Commissioner (CL) and Shahid Ghaffar, Commissioner (SM)

Messrs ASIAN LEASING CORPORATION LTD. through Chief Executive and 9 others‑‑‑Appellants

versus

EXECUTIVE DIRECTOR (SPECIALIZED COMPANIES DIVISION) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN‑‑‑Respondent

Messrs. Asian Leasing Corporation Ltd.: In re, heard on 8th January, 2002.

Leasing Companies (Establishment and Regulation) Rules, 2000‑‑‑

‑‑‑‑Rr. 5(b) & 20‑‑‑Security and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Failure of company to enhance its paid‑up capital to Rs.200 million as per requirement of R.5(b) of Leasing Companies (Establishment and Regulation) Rules, 2000‑‑‑Executive Director of Specialized Companies Division of the Commission imposed fine on Directors of the Company for their such failure and cancelled its licence to operate as leasing company‑‑‑Validity‑‑‑Company had adopted dilly‑dallying. tactics and m6de no serious attempt to raise its paid‑up capital to requisite level‑‑‑Earlier venture of company for amalgamation with another company had failed on 23‑6‑1999‑‑‑Neither any proposal for enhancement of paid‑up capital of the company had been forwarded nor any serious proposal for merger had been made thereafter‑‑­Present merger with another company had also been initiated as late as on 14‑12‑2001‑‑‑Time period of two years initially notified for enhancement of paid‑up capital of Insurance Companies i.e. 31‑10‑1999 had been further extended to 30‑6‑2001‑‑‑Non‑compliance with statutory requirements could not be ignored for indefinite period‑‑­Company had failed to comply with statutory requirement and was unable to explore and execute successful means to achieve the required limit of paid‑up capital‑‑‑Appellate Bench of the Commission dismissed the appeal with observation that company could apply for licence once its paid‑up capital was enhanced in compliance of R.5(b) of the Rules, 2000.

Syed Najaf Hussain Shah, Barrister and Ms. Sadia Khan, Executive Director (SC) for Appellants.

Ms. Iram Wahid Butt, Director (Leasing) for Respondent

Date of hearing: 8th January, 2002.

2002 C L D 1346

[Appellate Bench Security and Exchange Commission]

Before N.K. Shahani and Abdul Rehman Qureshi. Commissioners

TARIQ BAIG, MANAGING DIRECTOR, TARIQ GLASS INDUSTRIES LTD. ‑‑‑Appellant

versus

EXECUTIVE DIRECTOR (SM), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD‑‑‑Respondent

Appeal, decided on 25th April, 2002.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 224 & 222‑‑‑Security and Exchange Commission of Pakistan Act (XLII of 1‑997), S.33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Trading by Chief Executive of Company‑‑‑Detection of tenderable gain from return filed by appellant under S.222 of the Companies Ordinance, 1984‑‑­Contention of appellant was that purchase of shares was made in good faith and in satisfaction of debt previously contracted‑‑‑Validity‑‑‑Appellant had taken contradictory stance‑‑‑Appellant's voluntary commercial decision of entering into a settlement and purchase of shares, which he was not legally bound to honour, could not be termed as acquiring a security in satisfaction of a debt‑‑‑Mala fides of appellant was evident from the fact of having availed of the buy back facility @ Rs.10, when its market value was @ Rs.18‑‑‑Appellant had failed to prove from record his assertion that profit made from such transaction was tendered to company in form of interest free loan and subsequently waived off the same‑‑‑If only purchase of shares had been made, it would have been a different situation, but the manner of purchase and sale of shares clearly showed that the same had been done to gain profits, which was not lawfully tendered to company‑‑‑Plea that statutory period had lapsed was also not correct‑‑‑Appellate Bench of the Commission finding no merits in the appeal upheld the impugned order.

Umar Mahmud Kasuri alongwith Mujahid Eshai, FAC for Appellant.

Muhammad Ayub‑Qureshi, Director and Muhammad Farooq, Deputy Director on behalf of Respondent.

Date of hearing: 11th April, 2002.

2002 C L D 1355

Appellate Bench

[Security and Exchange Commission]

Before N.K. Shahani, Commissioner, (Securities Market and Insurance) and Abdul Rehman Qureshi, (Enforcement and Monitoring)

AQEEL MEHMOOD KHAWAJA, MEMBER, ISLAMABAD ‑‑‑Appellant

versus

ISLAMABAD STOCK EXCHANGE (GUARANTEE) LIMITED and others‑‑‑Respondents

Appeal No. 25 of 2001, decided on 14th February, 2002.

Security and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑Ss. 20 & 33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Dispute between members of different Stock Exchanges‑‑‑Joint Committee of Inter Stock Exchanges Committee over a complaint filed for recovery of amount from appellant for alleged loss in transactions of shares concluded that appellant was liable to pay certain amount to respondent‑‑‑Chairman, Security and Exchange Commission upheld the decision of Joint Committee‑‑‑Since both the parties had furnished undertaking that they would abide by the decision of Joint Committee and fulfil their part of the obligation within thirty days of the receipt of decision of the Committee; that decision of the Committee in the matter would be binding and final for all purposes; and since decision in impugned order had been based on the findings of Joint Committee, the appellant was legally and morally bound by its decision‑‑‑Appellate Bench of the Commission after examining the documents available on record, dismissed the appeal finding no justification to interfere in impugned order.

Hub Power Company v. WAPDA 1999 CLC 1320 and West Pakistan through Executive Engineer v. Messrs Azhar and others PLD 1977 Lah. 1013 ref.

Talat Farooq Sheikh and Khawaja Muhammad Inam for Appellant.

Ahmad Noman, D.S., Islamabad Stock Exchange for Respondent No. 1.

Asif Baig Mirza for Respondent No.3.

Syed Aamir Masood, Director (SM), Aly Osman, Joint Director (SM) and Ms. Sumbul Naved Qureshi, Junior Executive (SM) for the Commission:

Date of hearing: 22nd January, 2002.

2002 C L D 1366

[Appellate Bench Security and Exchange Commission]

Before Shahid Ghaffar, Commissioner (Securities Market) and N.K. Shahani, Commissioner (Insurance and Information Technology)

Messrs GENERAL TYRE AND RUBBER COMPANY OF PAKISTAN LIMITED and 2 others‑‑‑Appellants

versus

BIBOJEE SERVICES (PVT.) LIMITED and another‑‑‑Respondents

Appeals Nos. 17 and 23 of 2001, decided on 25th April, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.263‑‑‑Security and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 29 & 33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Investigation of company's affairs‑‑‑Jurisdiction of the Commission‑‑‑Scope‑‑‑Inspector appointed at respondent's request had filed his report with the Commission‑‑‑Signing of Memorandum of Understanding between parties after filing of appeals against order of appointment of Inspector agreeing to withdraw different inquiries including complaint filed under S.263 of Companies Ordinance. 1984‑‑‑Effect‑‑‑Even after withdrawal of complaint, the report which had now been finalized had a prima facie value of an evidence under law‑‑‑Commission had powers to take cognizance of the irregularity or contravention pointed therein independent of any complaint.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.263‑‑‑Security and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Investigation of company's affairs‑‑­Appointment of Inspector at respondent's request‑‑­Contention of appellants was that Executive Director of the Commission had not provided them an opportunity of hearing before passing such order‑‑‑Validity‑‑‑Subsequent events arising after appointment of Inspector were generally not to be taken into account‑‑‑Appellate Bench of the Commission found merit in appellants' contention that motive of filing complaint seemed otherwise than to really getting the investigation done by the Commission‑‑‑Taking over the management by majority of shareholders, though it be financial institution, was not prohibited under Companies Ordinance, 1984‑‑‑Nothing barred the Executive Director of the Commission to take into account Government policies while passing an order for investigation in evaluating the conduct of parties‑‑‑Appellate Bench of the Commission did not consider it necessary to go into details of each and every ground for appointment of Inspector‑‑‑Though there were reasons which could require inquiry into the affairs of appellants' companies, but the decision should have been taken only after giving full hearing to major shareholders being concerned parties in the matter‑‑‑Correspondence between parties had exchanged on issue of Government policy vis‑a‑vis financial institutions‑‑‑Giving a fuller opportunity of hearing could have given a better picture of the affairs of company before passing an order under S. 263 of the Companies Ordinance, 1984‑‑‑Appellate Bench of the Commission accepted the appeal by allowing the relief prayed for.

Anwar Ali v. Ghulam Qadir Shah 1986 CLC 1457; PLD 1965 SC 90; PLD 1999 SC 666; 1994 SCMR 1299; 1998 SCMR 429; PLD 1959 SC 45; 1994 SCMR 2232; AIR 1981 SC 136; AIR 1981 SC 818; PLD 1964 SC 150; PLD 1976 SC 208; Rehmat Bibi's case 1986 SCMR 962; 2000 MLD 1880 and AIR 1959 SC 707 ref.

Munir A. Malik and Yawar Farooqi for Appellants Nos.2 and 3.

Mubashir Saeed Saddozai, Deputy Director (E&M) for Commission.

Abid Aziz Shaikh for Respondent No. 1.

Date of hearing: 18th April, 2002.

2002 C L D 1375

[Appellate Bench Security and Exchange Commission]

Before M. Zafar‑ul‑Haq Hijazi and N.K. Shahani, Commissioners

Mian NISAR ELAHI and others‑‑‑Appellants

versus

MUHAMMAD IQBAL KHAWAJA and others‑‑‑Respondents

Appeals Nos. 19, 27 and 28 of 2001, heard on 24th January, 2002.

Security and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑Ss. 20(4) & 33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Interim relief, grant of‑‑‑Removal from membership of Stock Exchange and sale of appellants' frozen shares by Commissioner (Securities Market)‑‑‑Prayer for grant of interim relief by way of suspension of impugned orders‑‑‑Appellants could not convince Appellate Bench of the Commission as to the necessity of granting such relief, which was declined‑‑‑Stock Exchange had expressed its willingness to furnish an undertaking not to sell or dispose of frozen shares during pendency of appeal or proceed with the sale of membership and rooms of appellants‑‑­Appellate Bench of the Commission, in the light of such undertaking, directed Stock Exchange to maintain status quo during pendency of appeals to the extent that no further action would be taken pursuant to impugned orders.

Faisal Hussain Naqvi for Appellant (in Appeal No. 19 of 2001).

Appellant in person (in Appeal No.27 of 2001).

Faisal Hussain Naqvi for Appellant (in Appeal No. 27 of 2001).

Appellant in person (in Appeal No. 28 of 2001).

Mian Mumtaz Abdullah an Authorized Representative of Appellant (in Appeal No.28 of 2001).

Asad Hameed an Authorized Representative of Appellants (in Appeal No.28 of 2001).

Aamir Masood, Director (S‑III), Securities Market Division, SEC and Aly Osman, Joint Director (S‑III), Securities Market Division, SEC for Respondents Nos. 1 and 2 (in Appeal No.28 of 2001).

Arif Saeed of Hassan & Hassan of Lahore Stock Exchange (LSE). For Respondent No.3 (in Appeal No.28 of 2001).

Asad Ullah Javed, Advocate for Muhammad Iqbal Khawaja, Omer Iqbal and M. Pervaiz Awan, Authorized Representatives for Muhammad Iqbal Khawaja for Respondent No. 4 (in Appeal No. 28 of 2001).

2002 C L D 1388

[Appellate Bench Security and Exchange Commission]

Before N.K. Shahani and Abdul Rehman Qureshi, Commissioners

Dr. SAMI ULLAH KHAN‑‑‑Appellant

versus

WASI ULLAH KHAN‑‑‑Respondent

Appeal No. 31 of 2001, decided on 18th February, 2002.

Security and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑‑

‑‑‑‑Ss. 20 & 33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Jurisdiction of the Commission ‑‑‑Scope‑‑­Appellant (a non‑member of Stock Exchange) in his complaint alleged that respondent (a previous member of Stock Exchange) had fraudulently extracted certain amount as consideration for transferring him the latter's leasehold right in a room in Stock Exchange building knowing that same could not be transferred to him as a non‑member‑‑­Commissioner concluded that appellant had no right to said room and that issue of recovering money paid to respondent did not concern a securities related transaction falling outside the ambit of Security and Exchange Commission's jurisdiction‑‑‑Validity‑‑‑Subject‑matter of appeal was not within the jurisdiction of the Commission‑‑‑View of the Commissioner that complainant‑appellant had no rights to said room as expressed in impugned order was of no legal effect‑‑‑Appellant might seek redress before the appropriate forum‑‑‑Appellate Bench of the Commission disposed of the appeal accordingly.

Asad Ullah Javed for Respondent.

Syed Aamir Masood, Director (S‑III) arid Ms. Sumbul Naveed Quershi, Junior Executive for the Commissioner.

Date of hearing: 12th February, 2002.

2002 C L D 1390

[Appellate Bench Security and Exchange Commission]

Before Abdul Rehman Qureshi, Commissioner (E&M) and Shahid Ghaffar, Commissioner (S.M.)

NAFEES A. NAJMI, AIR VICE‑MARSHAL (RETD.) EX‑NOMINEE DIRECTOR OF SHAHEEN FOUNDATION and another‑‑‑Appellants

versus

EXECUTIVE DIRECTOR (COMPANY LAW) SEC‑‑‑Respondent

Appeal, decided on 22nd April, 2002.

Companies Ordinance (XLVIl of 1984)‑‑‑

‑‑‑‑S.497‑‑‑Security and Exchange Commission of Pakistan Act (XLII of 1997), S.33‑‑‑Appeal before Appellate, Bench of the Commission‑‑‑Imposition of penalty for improper use of words "(Pvt.) Limited"‑ ‑‑Appellants claimed not to have any concern with the company‑‑‑Request of appellants for exclusion of their names from list of those on whom penalty had been imposed was genuine as there was nothing on record proving that they had any hand in unlawful use of the words "Private Limited" with the name of company, which was not incorporated by Competent Authority under Companies Ordinance, 1984‑‑‑Appellate Bench of the Commission modified the order of Executive Director (Company Law) to the extent of exonerating the appellants from penalty imposed on promoters of the company.

F.B. Sial, Senior Deputy Director, Corporate Affairs, Shaheen Foundation, Islamabad for Appellant.

Atta Muhammad Khan, Director (E&M) and Ahmed Muzammil, Joint Registrar of Companies for Respondent.

2002 C L D 1583

[Appellate Bench Security and Exchange Commission]

Before N.K. Shahani, Commissioner (Insurance and Information Technology) and Abdul Rehman Qureshi, Commissioner (Enforcement and Monitoring)

LAHORE STOCK EXCHANGE‑‑‑Appellant

Versus

SHAHID GHAFFAR, COMMISSIONER (SECURITIES MARKET)‑‑‑ Respondent

Appeal No. 2 of 2002, decided on 27th June, 2002.

(a) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑S. 33‑‑‑Appeal before Appellate Bench of the Commission‑‑‑Stay of proceedings in appeal on account of pendency of suit before High Court in respect of some shares subject‑matter of transactions in' question‑‑­Validity‑‑‑Stay of proceedings in appeal would not be justified, where parties were distinct, issues involved were substantially different and there was no similarity in the relief prayed for in each of the proceedings‑‑‑Dispute pending before High Court pertained to a different transaction, whereas in the present case, the transaction involved was distinct and different‑‑‑Mere fact that same pertained or happened to overlap with some shares i.e. subject‑matter of the transactions, would not bar Commission to proceed to adjudicate upon the matter‑‑‑Such pending litigation would not warrant stay of proceedings before Commission.

Black's Law Dictionary, Seventh Edn., 1999 p.1059; PLD 1959 SC 45; 1994 SCMR 1299; PLD 1985 SC 376; PLD 1964 Pesh. 250; PLD 1969 SC 599 and PLD 1980 Quetta 29 ref.

(b) Administration of justice‑‑‑

‑‑‑‑While administering substantial justice, trivial and technical objections cannot be considered.

(c) Adjournment‑‑‑

------Grant of‑‑‑Adjournment cannot be granted as of right‑‑‑Adjournment may be granted in exigencies confronting the parties subject to the bona fides of the parties.

(d) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑Ss.29 & 30‑‑‑Investigation and proceedings by Commission‑‑‑Scope‑‑‑Not mandatory on Commission to conduct investigation in each and every case‑‑‑Need for such investigation is primarily dependent on the fact and circumstances of each case‑‑‑Where for decision of a case, sufficient documents are already on record, then it would be absurd to contend that a probe is still required as a mandatory requirement‑‑‑Commission has powers to investigate under Ss. 29 & 30 of the Securities and Exchange Commission of Pakistan Act, 1997 but consideration of relevant facts and documents in possession of parties and providing opportunity of hearing remains in the discretion of concerned authority to proceed with the matter in a manner he deems appropriate‑‑‑Such discretion has to be exercised reasonably and judiciously.

(e) Discretion‑‑‑

‑‑‑‑ Discretion is to be exercised reasonably and judiciously.

(f) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑S.33‑‑‑Appellate Bench of the Commission‑‑‑Exercise of jurisdiction‑‑‑Scope‑‑‑Appellate Bench was expected to administer laws with a minimum of procedural require­ment ‑‑‑Commission while doing so has to take care of the fact that nothing prejudicial to the interest of parties should be done.

PLD 1964 SC 559 and AIR 1935 Lah. 314 ref.

(g) Automated Trading Regulations for Lahore On‑Line Trading System Regulations‑‑‑

‑‑‑‑ Reglns.2 & 19(f)‑‑‑Cross‑trades‑‑‑Connotation‑‑‑Definitions for cross‑trades (both explicit and implicit) require that buyer and seller originate from the same brokerage house.

(h) Automated Trading Regulations for Lahore On‑Line Trading System Regulations‑‑‑

‑‑‑‑Preamble‑‑‑Scope of Regulations‑ ‑‑Lahore Stock Exchange does not possess powers to expand arbitrarily the scope of Trading Regulations to apply to events not covered by Trading Regulations.

(i) Automated Trading Regulations for Lahore On‑Line Trading System Regulations‑‑‑

‑‑‑‑ Reglns.2 & 11‑‑‑Negotiated Deal‑‑‑Concept and reasons for its introduction in securities markets‑‑‑With the advent of on‑line trading systems in securities markets, an option was left to members of stock exchange to access a window on their trading terminals, wherein trades were allowed to be negotiated with another member exclusively‑‑‑Negotiated deals are not prohibited per se, but same may be allowed in the discretion of Lahore Stock Exchange.

(j) Automated Trading Regulations for Lahore On‑Line Trading System Regulations‑‑‑

‑‑‑‑ Reglns.2, 11 & 19(f)‑‑‑Negotiated Deals and cross­-transactions‑‑‑Order for sale of shares placed on Lahore On­-Line Trading System of Lahore Stock Exchange‑‑‑Execution of transactions in May, 2000‑‑‑Complaint about such trades being cross‑transactions and Negotiated Deals ‑‑‑Validity‑‑­Negotiated Deals had been banned by Lahore Stock Exchange since 1998, thus, option for brokers to access special window on their trading terminals, which allowed Negotiated Deals, had been shut down by Lahore Stock Exchange‑‑‑No member of Lahore Stock Exchange at the time of transactions under question could enter into a Negotiated Deal as envisaged by Trading Regulations or by custom and practice‑‑‑Transactions under question were not cross­-transactions or Negotiated Deals within the meaning and scope of Trading Regulations, but were open market deal carried out as per rules and regulations of Lahore Stock Exchange.

(k) Stock Exchange‑‑‑

‑‑‑‑ Normal course of its business‑‑‑Selling and buying of shares‑‑‑Duty of Stock Exchange‑‑‑Remedy of seller against defaulting buyer‑‑‑Principles.

In normal course of business, a selling member will deliver shares to clearing house and the buying member will make payment to the clearing house. In case the buyer fails to make payment to the clearing house, the Exchange will honour the trade by selling the shares delivered to it in the open market and in case of losses will recover the losses from the buyer. In case the buyer fails to pay for the losses, the Exchange would declare the member defaulter and would dispose of all his assets (such as membership card, room etc.) to recover losses. In case losses are still left, the amount sanctioned for clearing house protection fund would be utilized as per regulation to honour trade.

(l) Stock Exchange‑‑‑

‑‑‑‑ Primary function of‑‑‑Honouring trade is of paramount importance in Stock‑ Exchange‑‑‑Stock Exchanges cannot function to generate confidence and trust of investor without sanctity of trade‑‑‑If Stock Exchanges are allowed to take arbitrary and unjustified decisions, same would irreparably damage the image of Stock Exchanges in Pakistan.

1994 SCMR 150; 1984 SCMR 1; AIR 1933 Bom. 209 and PLD 1985 SC 86 ref.

(m) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑S.20‑‑‑Securities and Exchange Ordinance (XVII of 1969), S.7‑‑‑Jurisdiction of Commission‑‑‑Scope‑‑‑Direction of the Commission to Stock Exchange to "honour the deleted transactions"‑‑‑Validity‑‑‑Such phrase indicated that Stock Exchange had to step into the shoes of original buyer, which would tantamount to ordering the performance of a contract, which in fact had never existed between two parties‑‑‑While speaking of Stock Exchange or a clearing house acting as a guarantor, same was more in the sense of facilitator, thus, same could not be asked to step into the shoes of a party either buyer or seller and assume their obligations‑‑‑If owing to acts or omission of a clearing house, any party suffered, some must be penalized in accordance with law, but could not be asked to honour the transaction on behalf of the counter‑parties.

M. Z. Khan v. Securities and Exchange Board of India AIR 1999 Delhi 164; Karnavati Fincap Ltd. v. Securities and Exchange Board of India (1996) 87 Comp. Cas. 186 and Securities and Exchange Board of India v. Alka Synthetics Ltd. and others AIR 1999 Guj. 221 ref.

(n) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑S.33‑‑‑Jurisdiction of Appellate Bench of the Commis­sion ‑‑‑Scope‑‑‑Damages, grant of‑‑‑Appellate Bench of the Commission is quasi judicial body and exercise of its jurisdiction to grant compensation is confined to certain parameters‑‑‑Where issues such as mitigation are relevant, then Courts of law are more appropriate forum for redressing such grievances.

1995 SCMR 1431 and PLD 1985 SC 69 ref.

(o) Words and phrases‑‑‑

‑‑‑‑‑ Negotiate "‑‑‑Meaning.

Black's Law Dictionary, Seventh Edn., 1999, p.1059 ref.

(p) Words and phrases‑‑‑

‑‑‑‑ "Settlement"‑‑‑Meaning.

Black's Law Dictionary, Seventh Edn., 1999, p.1377 ref.

(q) Words and phrases‑‑‑

‑‑‑‑"Measure"‑‑‑Meaning.

(r) Words and phrases‑‑‑

‑‑‑‑ "Cross‑trades "‑‑‑Connotation.

Corpus Juris Secundum, p. 477 ref.

Aamir Zareef Khan, Deputy Secretary (Legal) and Faisal Islam for Appellant.

Syed Aamir Masood, Director and Ms. Sumbul Naved Qureshi, Junior Executive for Respondent No. 1.

Aslam Motiwala in person.

Salim Chamdia for Respondent No.2.

M. Aamer Riaz in person.

Ejaz Ahmed Bodla and Riaz Chaudhry for Respondent No.3.

Tanveer Malik in person.

A. Rafay Alam for Respondent No.4.

Muhammad Rafique Umer, Legal and Corporate Affairs Advisor, KSE and Arif Habib, former Chairman, KSE for Respondent No.5.

Date of hearing: 26 April, 2002.

2002 C L D 37

[Karachi]

Before Mushir Alam, J

SOCIETE GENERALE ‑‑‑Appellant

versus

REGISTRAR OF TRADE MARKS‑‑‑Respondent

Miscellaneous Appeal No.45 of 1998, decided on 13th August, 2001.

(a) Trade Marks Act (V of 1940)‑‑‑.

‑‑‑‑S.2(1)(f)‑‑‑Expression 'mark'‑ ‑‑Definition as given in S.2(1)(f3 of Trade Marks Act, 1940, is merely illustrative and not exhaustive, it does not limit the composition of various variables which a person may employ to make his mark distinct and peculiar.

(b) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.2(1)U) & 6(1)(a)‑‑‑Trade mark‑‑‑Registration‑‑‑Once mark or logo qualifies any criteria laid down under S.6(1)(a) to (e) of Trade Marks Act, 1940, such mark must normally be registered.

(c) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.6(1) & 14‑‑‑Trade mark‑‑‑Application for registration‑‑­Mark to be registered must be in use anterior to making of application‑‑‑Any person claiming to be proprietor of trade mark, used or proposed to be used by him is entitled to apply for the registration of the same‑‑‑Not merely a mark must be in use anterior to making of application but any proposed user thereof gives a right to the intending user to apply for the registration of a particular mark proposed to be adopted by him, provided the mark is otherwise qualified to be registered under the provisions of Trade Marks Act, 1940.

Abdul Aziz v. Seven‑up Co., Karachi and another PLD 1978 Kar. 10 rel.

(d) Discretion‑‑‑

‑‑‑‑Discretion vesting in an authority‑‑‑Exercise of‑‑‑Such discretion does not ipso facto mean that the same is to be exercised arbitrarily at the whims and fancy of the authority or just because the same vests in the authority.

(e) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.6(1)(a) to (e) & 14(1)‑‑‑Registration of trade mark‑‑­Discretion of Registrar of Trade Marks ‑‑‑Exercise of such discretion‑‑‑Principles‑‑‑Discretion vesting in the Registrar under S.14(1) of Trade Marks Act, 1940, is not arbitrary or fanciful, but a judicial one which must be exercised fairly, equitably, with vigilance circumspection, care and caution, based on cogent, sound and supportive reasons in accordance with set principles of law‑‑‑Mere bald statement that a particular order has been passed because a discretion vests in the Authority is nothing but erroneous exercise of discretion liable to be corrected and reviewed, whenever it comes under, judicial scrutiny.

(f) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.2(1)(f), 6(1)a) & 14(1)‑‑‑Trade mark ‑‑‑Registration‑‑­Refusal to register trade mark/logo‑‑‑Logo adopted by the party was composite and compound mark, with particular get up and colour scheme, with combination of company name placed in a particular manner‑‑‑Contention of the party was that the logo fulfilled the definition of mark as provided for under S.2(1)(f) of the Trade Marks Act, 1940‑‑­Validity‑‑‑Any person claiming to be proprietor of a mark used or proposed to be used by him might apply for registration under S.14 of Trade Marks Act, 1940‑‑­Requirement for registration of trade mark under S.6(1)(a) of Trade Marks Act, 1940, was that the same might contain name of the company, individual or a firm represented in a special particular manner‑‑‑Where the logo/mark was combination of name of the party inscribed in the logo/mark in a particular manner, the same was in accordance with the .definition of the word 'mark' as defined under S.2(1)(f) of Trade Marks Act, 1940, and was applicable to the logo/mark applied for‑‑‑Discretion exercised by the Registrar in declining registration of logo/mark was against the set principles of law applicable thereto and the order passed by the Registrar was set aside.

Messrs Colgate Palmolive (Pakistan) Ltd. v. Deputy Registrar of Trade Marks PLD 1992 Kar. 115; 1987 CLC 1286; Messrs Glaxo Laboratories Ltd. v. The Registrar of Trade Marks, Government of Pakistan PLD 1985 Kar. 630; Hyundai Motor Co. v. Deputy Registrar, Trade Marks 1987 MLD 2847; The Assistant Registrar of Trade Marks, Karachi v. Messrs Lakson Tobacco Company Limited 1992 SCMR 2323; Parke, Davis & Company v. The Deputy Registrar' of Trade Marks,‑ Karachi 1984 CLC ‑ 2623; National Detergents Limited v. Assistant Registrar of Trade Marks‑II 1989 MLD 1137; . (1915) 32 RPC 453; (1884) 27 Ch. D 681; 59 RPC 125; 45 RPC 199 and 45 RPC 325 ref.

Qazi Faez Issa for Appellant.

Respondent in person.

Date of hearing: 6th August, 2001.

2002 C L D 46

[Karachi]

Before Sabihuddin Ahmed and S. Ali Aslam Jafri, JJ

ABDUL BASIT ZAHID and another‑‑‑Appellants

versus

MODARABA AL‑TIJARAH and another‑‑‑Respondents

First Appeal No.38 of 1999, decided on 15th September, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑SsA2 & 21‑‑‑Civil Procedure Code (V of 1908), S.12(2)‑‑­Law Reforms Ordinance (X11 of 1972), S.3‑‑‑Intra‑Court Appeal‑‑‑Recovery of Bank loan‑‑‑Setting aside of decree‑‑­Application under S.12(2), C.P.C.‑‑‑Failure to file appeal under S.21 of the Banking Companies (Recovery of Loans Advances, Credits and Finances) Act, 1997‑‑‑Effect Appellants were party to suit and filed their written statement‑‑‑Witnesses were neither cross‑examined by the appellants nor they led any evidence in rebuttal‑‑‑Case of the respondent had gone unrebutted and unchallenged as the same was based on documentary evidence which had not been seriously disputed by the appellants, rather it was admitted by them‑‑‑Banking Court decreed the suit against the appellants which was assailed by the appellant application under S.12(2), C.P.C.‑‑‑Such application w dismissed by the Banking Court‑‑‑Appellants assailed t e judgment and decree passed by the Banking Court as well as the order dismissing the application under S.12(2), C.P.C. in the Intra‑Court appeal‑‑‑Validity‑‑‑Instead of filing appeal under S.21 of the Banking Companies (Recovery of Loans, Advances, Credits arid Finances) Act, 1997, at the proper time, the appellants preferred applications under S.12 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and under S.12(2), C.P.C.‑‑­High Court, in intra‑Court appeal declined to interfere with the judgment and order passed by the Banking Court ‑‑‑Intra‑Court appeal was dismissed in circumstances.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Modarba (Floatation and Control) Ordinance (XXXI of 1980), preamble‑‑‑Notification No.F.48(7)/80‑A(11), dated 30‑12‑1986‑‑‑Suit for recovery of Bank loan against Modarba management company‑‑‑Banking Court‑‑­Jurisdiction‑‑‑Doctrine of de facto‑‑‑Applicability‑‑‑Objection was raised to the jurisdiction of Banking Court on the ground that under Notification No. 48(7)/80‑A(11), dated 30‑12‑1986, the jurisdiction against Modarba company was vested only in the Tribunal constituted under the Notification‑‑‑Validity‑‑‑Although by virtue of the Notification the Tribunal was empowered to try all cases under the provisions of Modarba (Floatation and Control) Ordinance, 1980, yet the Notification was neither brought to the notice of the Banking Court nor any such application was filed by any of the parties to the suit‑‑‑Suit, in the present case, proceeded all along without any objection or application for its transfer to the newly‑created Tribunal‑‑‑Where the Banking Court bona fide passed judgment and decree on merits, the same was protected under the doctrine of de facto‑‑‑Judgment and decree based on bona fides and on merits should be assumed to have been passed de jure and would be deemed to possess all attributes of a lawful operative and binding order.

Javed Iqbal v. Kh. Muhammad Arif 1999 SCMR 13 and Mehmood Khan Achakzai v. Federation of Pakistan PLD 1997 SC 426 rel.

(c) De facto, doctrine of‑‑‑

‑‑‑‑Connotation‑‑‑Doctrine of de facto is based on higher consideration of public policy and is calculated to ensure continuity to avoid dislocation and to prevent confusion in the conduct of public affairs on the one hand, and the safeguard of public and private rights emerging from the de facto act of‑ officer performing functions of the State in the ordinary course, on the other‑‑‑Doctrine of de facto is a well recognized rule embedded in the jurisprudence‑‑‑Under the doctrine of de facto, bona fide acts in public interest performed by persons assuming authority, which turn out to be illegal, are assumed to have been performed by a de jure authority/person and are binding‑‑‑Acts of officers de facto performed by them within the scope of their assumed official authority in the interest of public or third person and not for their own benefit, are generally as valid and binding as if they were the acts of officers de jure.

Muhammad Aziz Khan for Appellants. .

Mansoorul Arfin and Salim Salaam Ansari for Respondents.

Date of hearing: 30th August, 2001.

2002 C L D 97

[Karachi]

Before Zia Pervez and Muhammad Afzal Soomro, JJ

Dr. BHAGWANDAS and another‑‑‑Appellants

versus

Messrs HABIB BANK LIMITED, LARKANA and another‑‑‑Respondents

First Civil Appeal No.D‑3 of 2001, decided on 19th July, 2001.

Transfer of Property Act (IV of 1882)‑‑‑

‑‑‑‑Ss.91‑ & 92‑‑‑Auction of property mortgaged with Bank‑‑­Rights of person who had purchased property for valuable consideration‑‑‑Property had been placed in the auction pool after the original suit filed by the mortgagee‑Bank was decreed by the Trial Court‑‑‑Persons who claimed to have purchased the property for valuable consideration, made statement that they were prepared to deposit the amount due under the decree as recoverable by the Bank‑‑‑Said purchasers of the property under a registered sale deed, having an interest in property were protected under Ss.91 & 92 of Transfer of Property Act, 1882‑‑‑Purchaser of property could clear the liability and as "subrogagee" could acquire the rights of the Bank with whom the property was mortgaged, by subrogation and by the operation of law‑‑­Purchasers of property would move a separate application before the Trial Court where the suit was pending and Court after hearing the parties would decide the matter as to possession of property.

East and West Steamship Co. v. Queensland Insurance Co. PLD 1963 SC 663 ref.

Gulab Rai Jessrani for Appellants.

Abdul Khalique Bhutto for Respondent No. 1.

Date of hearing: 19th July, 2001.

2002 C L D 102

[Karachi]

Before S.A. Rabbani and M. Musa K. Leghari, JJ

Messrs UNIVERSAL LEASING CORPORATION LTD. ‑‑‑Petitioner

versus

STATE BANK OF PAKISTAN‑‑‑Respondent

Constitutional Petition No.D‑1491 and Miscellaneous No.3938 of 2001, decided on 30th July, 2001.

Banking Companies Ordinance (LVII of 1962)‑‑‑

‑‑‑‑S.41‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Banking Company‑‑‑Directions issued by State Bank of Pakistan in exercise of powers under S.41 of the Banking Companies Ordinance, 1962‑‑­Legality‑‑‑Directions issued by State Bank of Pakistan were neither to prevent the affairs of any Banking Company from being conducted in a manner detrimental to the interest of depositors, or in a manner prejudicial to the interest of Banking Company which rendered all Commercial Banks, nor the same were issued to secure proper management of any Banking Company‑‑‑Contention of the petitioner was that the directive issued by the State Bank of Pakistan was against the provisions of 5:41 of Banking Companies Ordinance, 1962‑‑‑Validity‑‑‑Only ground on which direction could be issued was 'the public interest'‑‑‑Where the directive did not mention as to how the same was in the public interest rather the same was directly against the interest of the depositors, such directive was in violation of S.41 of Banking Companies Ordinance, 19.62‑‑‑Direction issued by the State Bank of Pakistan was without lawful authority and the same was set aside in circumstances.

In the present case the impugned order (directive) does not expressly mention for what purpose or object, the direction has been issued. It can, however, be gathered from the contents of the order that the direction has not been issued "to prevent the affairs of any Banking Company from being conducted in a manner detrimental to the interest of the depositors, or in a manner prejudicial to the interest of the Banking Company" which include all the Commercial Banks in this case. The direction has also not been issued "to secure the proper management of any Banking Company generally."

The only other ground on which a direction can be issued is "the public interest". The impugned order does not mention as to how the direction is in the public interest., Section 41, Banking Companies Ordinance, 1962 provides that a direction can be issued to safeguard the interest of the depositors. It cannot, therefore, be issued to the detriment to the interest of depositors and the impugned order does exactly the same. The direction contained in the impugned order is directly against the interest of the depositors. The impugned order, and the direction therein, is, thus, in violation of the law itself, viz. section 41 of the Banking Companies Ordinance, 1962, under which the. order has been issued. It was, therefore, declared that the impugned order/direction had been issued without lawful authority and was of no legal effect.

Kamal Azfar for Petitioner.

Ijaz Ahmed for Respondent.

Date of hearing: 26th July, 2001.

2002 C L D 107

[Karachi]

Before Anwar Zaheer Jamali, J

EFU GENERAL INSURANCE LTD.‑‑ ‑Plaintiff

versus

Messrs SECURITY AND MANAGEMENT. SERVICES (PVT.) LTD. ‑‑‑Defendant

Suit No. 79 of 1997; decided on 13th September, 2001.

(a) Civil Procedure Code (V of 1908)‑‑­

‑‑‑‑O.XXXVII, R.2‑‑‑Negotiable Instruments Act (XXVI of 1881), Ss.64, 76 & 92‑‑‑Summary suit for recovery of money‑‑‑Dishonoured cheques‑‑‑Plea raised by the defendants was that after return of cheque by the Bank with refusal memo., the plaintiff should have again presented the cheques for encashment or should have immediately served notice on the defendant instead of serving such notice after more than eight months ‑‑‑Validity‑‑­When intention of defendants for non‑payment of the sum mentioned in the cheques was visible to the plaintiffs from their conduct, the plaintiffs were under. no legal obligation to present the dishonoured cheques to the drawee Bank again or to have immediately served notice to the defendants.

(b) Negotiable Instruments Act (XXVI of 1881)‑‑‑

‑‑‑‑S.118(a)‑‑‑Negotiable instrument, issuance of‑‑­Presumption under S.118(a) of the Negotiable Instruments Act, 1881 is that when an instrument is issued, it is issued for consideration.

(c) Qanun‑e‑Shahadat (10 of 1984)‑‑‑

‑‑‑‑Art.133‑‑‑Statement on oath of plaintiffs witness not disputed in cross‑examination‑‑‑Effect‑‑‑Such statement of the witness would be deemed to have been admitted by the defendants' side.

(d) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXVII, R.2‑‑‑Negotiable Instruments Act (XXVI of 1881), Ss.64, 79 & 92‑‑‑Summary suit for recovery of money‑‑‑Dishonoured cheques‑‑‑Claiming of interest under S.79 of the Negotiable Instruments Act, .1881‑‑‑Plaintiffs had prayed for a decree in the sum of Rs.5,22,000 towards the amount of four dishonoured cheques and also a sum of Rs.15,660 towards interest at the rate of 6% per annum under S. 79 of the Negotiable Instruments Act, 1881‑‑­Validity‑‑‑Where neither the amount of four dishonoured cheques issued by the defendants was in dispute nor the fact that uptil the institution of the suit no amount had been paid, the plaintiffs in view of S.79 of the Negotiable Instruments Act, 1881 were entitled to claim 6% per annum interest‑‑‑Suit of the plaintiffs was decreed in the sum of Rs.5,37,660 with cost and also 12% per annum mark‑up from the date of institution of suit till realization of decretal amount from the defendants accordingly.

M.A.M. Namazie for Plaintiffs.

Chowdhary M. Jamil for Defendants.

Date of hearing: 30th August, 2001.

2002 C L D 120

[Karachi]

Before Anwar Zaheer Jamali, J

ATCO LAB. (PVT.) LIMITED‑‑‑Applicant

versus

PFIZER LIMITED and others‑‑‑Respondents

Civil Miscellaneous Applications No.3609 in Judicial Miscellaneous No.24 of 1999, Civil Miscellaneous Application No. 7184 in Suit No. 1024 of 1998, Civil Miscellaneous Application No.7186 in Suit No. 1025 of 1998, decided on 23rd August, 2001.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXIX, Rr.1 & 2‑‑‑Grant of injunction‑‑‑Conduct of party‑‑‑Points to be considered by Courts in evaluating the conduct‑‑‑Scope‑‑‑Grant of injunction is a discretionary relief and the Courts, while considering the question of grant of such relief, have to see the coexistence of prima facie case, balance of convenience and irreparable loss and injury in favour of a party seeking such relief‑‑‑While dilating upon the merits of a case on these parameters the Courts can also take into consideration the overall conduct of a party i.e. whether he has approached the Court with considerable delay and has not acted vigilantly and promptly; whether he has not approached the Court with clean hands; whether grant of injunction will be against public interest/public policy; whether grant of injunction will place a party in an undue advantage which will perpetuate injustice; whether the loss/damages likely to be suffered by a party due to refusal of injunction will be calculable in terms of money and whether party approaching the Court for injunction has suppressed material facts and acted in a mala fide manner‑‑‑Where answer to any of these queries is in affirmative, the relief of injunction being discretionary in nature can be declined having regard to the facts of each case.

(b) Patents and Designs Act (II of 1911)‑‑‑

‑‑‑‑Ss.12, 29 & 53‑‑‑Ciui1 Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2‑‑‑Injunction; grant of‑‑‑Infringement of patent‑‑‑Pricing, not a relevant consideration‑‑‑Pricing is not a relevant consideration for examining the question of infringement of 'a patent‑‑‑Pricing, however, is material for considering the question of grant or refusal of equitable relief of injunction by the Court as any disproportionate and exorbitant pricing of a patented item and exploitation of monopoly by a company in this context may swing the balance of convenience against such party found exploiting such monopoly by overpricing and seeking an undue cover to such monopoly and exploitation through injunction.

(c) Patents and Designs Act (II of 1911)‑‑‑

‑‑‑‑Ss.12, 29 & 53‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2‑‑‑Injunction, grant of‑‑‑Monopoly of plaintiff after grant of injunction‑‑‑Patented pharmaceutical compound of the plaintiffs and similar other compounds manufactured by other pharmaceutical companies were mainly used for treatment of high blood pressure‑‑‑Monopoly in the patented medicine in Pakistan was being exploited by the plaintiffs company to the prejudice of the poor people of the country in need of their medicine, which was against public interest ‑‑‑Conditionality‑‑‑Patients suffering from such ailment must be taking the medication out of necessity and such treatment cannot be avoided by them without any serious risk to their health‑‑‑Grant of injunction in favour of plaintiffs, in the present case, would place them in an undue and unjust advantage and the same would be against public interest and also against the principles of equity because neither balance of convenience was in favour of the plaintiffs nor they would suffer any irreparable loss and injury in case of refusal of injunction‑‑‑Future loss should be calculable in terms of money and to protect the interest of the plaintiffs appropriate order could be passed by High Court while disposing of the injunction applications‑‑‑Injunction was refused in circumstances.

Glaxo Group Limited and 2 others v. Evron (Pvt.) Limited and another 1992 CLC 2382: Glaxo Group Limited and 2 others v. Pakistan Pharmaceutical Product (Pvt.) Limited 1991 MLD 1985; Sandox Limited and another v. Pakistan Pharmaceutical Products Limited 1987 CLC 1571; Glaxo Group Limited and 2 others v. Evron (Pvt.) Limited and another PLD 1991 Kar. 252 and Smith Kline & French Laboratories Limited v. Ferozesons Laboratories Limited and another 1992 MLD 2226 distinguished.

Press Mebal Corporation Limited v. Nashir Sorabji Pochkhanawalla and another AIR 1983 Born. 144'; Rado v. John Tye & Sons Limited 1967 RPC 297; Brupat Limited and another v. Sandford Marine Products Limited 1983 RPC 61; Hawker Siddeley Dynamics Engineering Limited v. Real Time Developments Limited 1983 RPC 395; Raj Parkash v. Mangat Ram Choudhary and others AIR 1978 Delhi 1 and SKM S.A. and another v. Wagner Spraytech (U.K.) Limited and others 1982 RPC 497 ref.

(d) Patents and Desiyna Act (11 of 1811)‑‑‑

‑‑‑‑Ss. l 2 & 29‑‑‑Registered patent‑‑‑Suspension of‑‑‑Plaints had been availing benefits of registration of patent in their favour since 1986 and before commencement of present round of litigation in the year 1998, the defendants or any body else had not challenged registration of the disputed patent‑‑‑Application was filed by the defendants for suspension of the disputed patent‑‑‑Validity‑‑‑Plaintiffs under S.12 of the Patents and Desighs Act, 1911, were entitled to avail the benefit of the patent for a period of 16 years from 1986 and until now they had already availed such benefit for more than 15 years‑‑‑No case for suspension of the registration of the disputed patent at such belated stage was made out by the defendants‑‑‑Where factual controversy was raised by the parties, the same could not be resolved without recording of evidence‑‑?Defendants had no prima facie case for grant of interim relief qua suspension of the registration of the disputed patent‑‑‑Application for suspension of registration of the patent was dismissed in circumstances.

Muneeb Akhtar for Plaintiffs.

Munawar Ghani Khan for Defendants.

Dates of hearing: 18th, 25th, 31st January; 26th February: 18th, 19th, 26th April and 6th August, 2001.

2002 C L D 137

[Karachi]

Before Saiyed Saeed Ashhad, C.J. and Wahid Bux Brohi, J

Ms. AFSHAN AHMED ‑‑‑Petitioner

versus

Messrs HABIB BANK LIMITED and another‑‑‑Respondents

Constitutional Petition No.D‑1685 of 2000 and Miscellaneous No.4697 of 2000 in Suit No.366 of 1999, decided on 10th April, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.21(1)‑‑‑Appeal‑‑‑Scope‑‑‑Order or decision not falling within the definition of the decree/order/sentence as specified in S.21(1) of the Act cannot be challenged by way of an appeal under S.21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art.l99‑‑‑Constitutional petition‑‑‑Interlocutory order‑‑­Constitutional petition against such order ‑‑‑Maintainability‑‑­Where statute does not provide appeal against interlocutory order, then the same cannot be challenged by way of a Constitutional petition as allowing such an order to be impugned by way of a Constitutional petition would amount to negating the provisions of the statute which 'does not provide for an appeal against an interlocutory order.

Syed Saghir Ahmed Naqvi v. Province of Sindh and another 1996 SCMR 1165 and Muhammad Iftikhar Mohmand v. Javed Muhammad and 3‑ others 1998 SCMR 328 ref.

(c) Interpretation of statutes‑‑‑

‑‑‑‑ Object of statute‑‑‑Duty of Court‑‑‑Court should not act in a manner by which the object of a statute is defeated and the same is rendered nugatory.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.21‑‑‑Civil Procedure Code (V of 1908), 0.1, R.10‑‑­Constitution of Pakistan (1973), Art.199‑‑‑Constitutional petition‑‑‑Maintainability‑‑‑Assailing order of Banking Court passed on application under O.I, R.10, C.P.C., in Constitutional jurisdiction‑‑‑Validity‑‑‑Where Banking Court had passed separate order on application under O.I, R.10, C.P.C. filed by the petitioner, the same could easily be made ground for attack in the appeal to be filed against the final judgment‑‑‑Constitutional petition was not maintainable in circumstances.

Bolan Bank Limited v. Capricorn Enterprise (Pvt.) Limited 1998 SCMR 1961; Muhammad Ayub Butt v. Allied Bank Limited PLD 1981 SC 359 and Pakistan v. Special Court (Banking), Sindh and others 1991 SCMR 2355 ref.

(e) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.7 & 9‑‑‑Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), Ss.6 & 7‑‑‑Provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and Banking Companies (Recovery of Loans) Ordinance, 1979‑‑‑Comparison‑‑‑Nature of the case, procedure to be followed and the powers to be exercised in deciding case by a Banking Court under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, are similar and analogous to the corresponding provisions and powers conferred on the Special Court constituted under the Banking Companies Ordinance, 1979.

(f) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.7 & 9‑‑‑Civil, Procedure Code (V of 1908), S.115‑‑­ Constitution. of Pakistan (1973), Art.199‑‑‑Constitutional petition‑‑‑Conversion of Constitutional petition into petition under S.115, C.P.C.‑‑‑Order on application under 0.1, R.10, C.P.C. was passed by Banking Court‑‑‑Plea raised by the petitioner was that as the order was under the provisions of Civil Procedure Code, 1908, the Constitutional petition be converted into revision petition under S.115, C.P.C.‑‑­Validity‑‑‑Where the order was passed under the provisions of Civil Procedure Code, 1908, and not under the provisions of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, the same could have been challenged under 5.115, C.P.C.‑‑‑Petitioner, in the present case, did not file the revision allowing the period of limitation for filing the same to lapse and then approached the High Court for invoking the Constitutional Jurisdiction of High Court after nine months of passing of the order‑‑­Constitutional petition was not allowed to be converted into revision petition under S.115, C.P.C. in circumstances.

Messrs Central Cotton Mills Limited and another v. Messrs Atlas Bot Lease and others 1998 SCMR 2352 and Messrs Abdul Aziz Ayoob v. Assistant Collector of Customs and 3 others PLD 1990 Kar. 378 ref.

M. Shaiq Usmani for Petitioner.

A.R. Akhtar for Respondent No. 1.

2002 C L D 145

[Karachi]

Before Shabbir Ahmed, J

CHASE MANHATTAN BANK, N.A. ‑‑‑Petitioner

versus

Messrs FIRDOUS SPINNING AND WEAVING MILLS LTD.‑‑‑Respondent

Judicial Miscellaneous No. 72 of 1989 and Civil Miscellaneous Application No. 1885 of 2001, decided on 27th June, 2001.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.333 (f) & 402‑‑‑Company under liquidation‑‑‑Official liquidator ‑‑‑Powers and duties of‑‑‑Official liquidator has been vested with the power under S.333(f) of the Companies Ordinance, 1984, to sell the movable and immovable properties and things of the company by public auction or private contract with the power to transfer whole to any person or company or to sell the same in partial‑‑‑Such power of official liquidator is subject to the sanction of offer by the Court or of the committee of inspection (as the case may be)‑‑‑Company under winding up continues to be a company for all the purposes till it is dissolved, however, from the date of announcement of winding up of the company, official liquidator is deemed to have taken over the management of the Company and it is so ordained in 5.402 of the Companies Ordinance, 1984, but it does not have its Director, its Chief Executive instead official liquidator manages the same and the assets of the Company are deemed to be in trust with the Court while physical custody of such assets remains with official liquidator.

Speciality Traders Mills v. Firdous Textile Mills Limited 1998 CLC 2109 ref.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.333(f)‑‑‑Civil Procedure Code (V of 1908), O.XXI, R.92‑‑­Stamp Act (II of 1899), Ss. 17 & 23‑‑‑Sale by official liquidator ‑‑‑Stamp duty, payment of‑'‑‑In case of sale by Civil Court in terms of O.XXI, R.92, C.P.C., sale certificate has to be issued and the provisions are not applicable to the sale by official liquidator in terms of S.333(f) of the Companies Ordinance, 1984, but both instruments i.e. sale certificate as well as conveyance deed are subject to stamp duty under Ss. 17 & 23 of Stamp Act, 1899, respectively.

(c) Registration Act (XVI of 1908)‑‑‑

‑‑‑‑S.2(6)‑‑‑Term 'immovable property'‑‑‑Movable property becoming immovable property‑‑‑Principles‑‑‑Where the property is attached to the earth or permanently fastened to any thing which is attached to the earth, then movable property becomes immovable property‑‑‑Nature of attachment, its object and purpose in such a situation would be dominant factors.

Muhammad Ibrahim v. Northern Circars Fibre Trading Co. AIR 1944 Mad. 492 ref.

(d) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.333(f) & 402‑‑‑Registration Act (XVI of 1908), S.2(6)‑‑­Stamp Act (11 of 1899), Ss. 17 & 23‑‑‑Auction of factory by official liquidator ‑‑‑Stamp duty on auction purchase‑‑‑Machinery embedded in the building of the factory was immovable property‑‑‑Factory in the present case, was in running condition when the same was auctioned and the machinery was imbedded in the earth‑‑‑Plea raised by the auction‑purchaser was that the stamp duty was payable only on the price of land and building and not on that of the machinery, as the same was not immovable property‑‑­Validity‑‑‑Machinery embedded in earth, in factory sold with building and land was 'immovable property' for the purpose of registration and Stamp Act, 1899‑‑‑Plea raised by, the auction‑purchaser was not accepted by High Court‑‑­Auction‑purchaser was required to pay the stamp duty on the total purchase price including the price of machinery.

Habib Credit and Exchange Bank Limited v. Hamaliya Textile Mills (Pvt.) Limited PLD 2000 Lah. 391 distinguished.

Muhammad Ibrahim v. Northern Circars Fibre Trading Co. AIR 1944 Mad. 492 ref.

(e) Stamp Act (II of 1899)‑‑‑

‑‑‑‑S.27‑‑‑Term 'consideration'‑‑‑Scope‑‑‑Term 'consideration' used in S.27 of the Stamp Act, 1899, is very significant and the same has to be mentioned in the instrument.

(f) Stamp Act (II of 1899)‑‑‑

‑‑‑‑S.27‑A‑‑‑Minimum valuation of property for the purpose of levying of stamp duty and registration fee‑Object‑‑‑Purpose of enacting S.27‑A of Stamp Act, 1899, is to fix minimum valuation of the property for the purpose of the levying of stamp duty and registration fee on instruments subject to registration, due to practice by the parties to such instruments to suppress the actual consideration with motive to avoid payment of required stamp duty and registration fee‑‑‑Where actual/ real consideration is determined and approved by Court, the provisions of S.27‑A of the Stamp Act, 1899 cannot be pressed into service.

Siddiq Mirza for Applicant.

Bashir A. Memon, Official Assignee.

Date of hearing: 18th June, 2001.

2002 C L D 171

[Karachi]

Before Mushir Alam, J

ACE INSURANCE LIMITED, in the matter of

Judicial Miscellaneous No 19 of 2001, decided on 11th July, 2001.

Insurance Ordinance (XXXIX of 2000)‑‑‑

‑‑‑‑S.5(3)‑‑‑Companies Ordinance (XLVII of 1984), Ss‑284, 285, 286 & 287‑‑‑Scheme of Arrangement, sanction of‑‑­Conversion of branch office of foreign company into public limited company‑‑‑Application was filed by the petitioner for sanction of Scheme of Arrangement by Companies Judge‑‑­Petitioner‑Company was a Foreign Company and was transacting general insurance business in Pakistan‑‑­Company intended to convert its branch office in Pakistan as public limited company‑‑‑Validity‑‑‑Members of the petitioner‑Company had by majority approved the Scheme of Arrangement‑‑‑Neither the employees nor any of the creditors or insured had come forward to oppose the Scheme‑‑‑Where the company had disclosed its latest financial position and apparently nothing in the proposed Scheme ran contrary to the Companies Ordinance, 1984 or the Insurance Ordinance, 2000, Scheme of Arrangement would be in the interest of shareholders of the petitioner-­Company and also of the insured‑‑‑No material on record existed to suggest that the conversion of the registered branch office of the petitioner‑Company into a public Company in compliance of S.5(3) of the Insurance Ordinance, 2000, and in terms of provisions of Ss.284 to 287 of the Companies Ordinance, 1984, was against public interest or in violation of any law‑‑‑High Court sanctioned the Scheme of Arrangement and the petitioner‑Company was incorporated as public limited company in accordance with law.

Muhammad Naeem for Petitioner.

Date of hearing: 11th July, 2001,

2002 C L D 188

[Karachi]

Before Shabbir Ahmed, J

Messrs SHAHEEN FOUNDATION‑‑‑Petitioner

Versus

Messrs CAPITAL F.M. (PVT.) LIMITED

and others‑‑‑Respondents

Judicial Miscellaneous Applications Nos. 19 to 21 of 2000, decided on 18th May, 2001.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S.92‑‑‑Public charities‑‑‑Filing of suit under S.92, C.P.C.‑‑­Object and scope ‑‑‑Reliefs which can be obtained by decree in such suit are removal of trustee; appointment of new trustee; vesting of any property in trustee; directing for accounts and inquiries; declaration of the proportion of the trust property or of the interest therein allocated to particular object of the trust; authorizing the whole 'or any part of the trust property to be let, sold, mortgaged or exchanged; setting of a scheme; or granting such further or other reliefs as the nature of the case may require‑‑‑Question whether suit or proceeding falls within S.92, C.P.C. depends not upon the character in which the plaintiff sues, but upon the nature of the relief sought.

Pramatha Nath Mullick v: Pradhyumma Kumar Mullick and another AIR 1925 PC 139; Janaki Bai Ammal v. Sri Triuchitrambala Vinayakar of Melman AIR 1935 Mad. 825; Raje Anandrao v. Shamrao AIR 1961 SC 1206; Mehboob Elahi v. K.M. Idrees PLD 1955 Lah. 242 and Charan Singh and another v. Darshan Singh and others AIR 1975 SC 371 ref.

(b) Companies Ordinance (AL VII of 1984)‑‑‑

‑‑‑‑S.290‑‑‑Civil Procedure Code (V of 1908), S.92‑‑‑Oppression and mismanagement of companies‑‑‑Application to Court‑‑­Proceedings initiated by trust alleging mismanagement and oppression of minority shareholder‑‑‑Validity‑‑‑Where the relief asked for in the proceedings was not similar to that mentioned in cls. (a) to (b) of S.92, C.P.C., such proceedings would not be subject to the permission from the Trust merely because the character of the petitioner/plaintiff was a Trust ‑‑‑ Ground urged for want of sanction was not tenable in circumstances.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.290‑‑‑Prevention of oppression and mismanagement‑‑­Application to Court‑‑‑Locus standi‑‑‑Shares were purchased by petitioner but full amount had not been paid‑‑‑Objection was raised by the respondents to maintainability of the application‑‑­Validity‑‑‑Where the shares stood transferred and registered in the name of the petitioner purportedly purchased from the share­holders, if full amount had not been paid, the remedy was by way of suit; but the entitlement to file application under S.290 of the Companies Ordinance, 1984, could not be challenged by asserting that the petitioner had not acquired 2096 shares to qualify it to move to the Court‑‑‑Objection was repelled in circumstance.

Shiromani Sugar Mills Limited v. Debi Parasad AIR 1950 All. 508 distinguished.

(d) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.290 ‑‑‑Chcu‑itable Endowments Act (VI of 1890), Ss. 5(1) & 10 ‑­‑Civil Procedure Code (V of 1908), O.V7, R.17 ‑‑‑ Prevention of oppression and mism nagement ‑‑‑ Application by Trust Foundation‑‑‑Maintainability‑‑‑Federal Government by Notification dated 25‑10‑1977, under S.10 of the Charitable Endowments Act, 1890, divested the treasurer of the property of Foundation/Trust and vested the same in the Committee of Administration‑‑‑On divestment of the treasurer, the property of the Trust, vested in the person or persons acting in the administration thereof and be deemed to be held by him or them on the same terms on which it was held by such treasurer‑‑­Application under S.290 of the Companies Ordinance, 1984, was fled by the Trust‑‑‑Validity‑‑‑Where the 'Committee of Administration' under the Scheme framed by the Federal Government held the property of the Trust for the same purpose and on the same Trusts, the powers of the Committee were analogous to the powers of the treasurer with right to sue and to be sued while administering the Trust property as Trustees‑‑‑ Foundation was constituted under Scheme approved by the Federal Government under S.5(1) of the Charitable Endowments Act, 1890‑‑‑In case the proceedings were initiated in the name of Committee of Administration, the same would be a case of mis­description to be remedied through an application for amendment of title under O.VI, R.17, C.P.C.‑‑‑Proper description for the proceedings was in the name of the Foundation‑‑ Application filed in the name of the Trust was maintainable in circumstances.

Treasurer of Endowments for Pakistan v. Inamur Rehman Alvi 2000 CLC 135 ref.

(e) Words and phrases‑‑‑

‑‑"Trust" and "trustees"‑‑‑Distinction‑‑Both "Trust" and "Trustee" are two distinct and separate identities‑‑‑Trust has no juristic personality, whereas, the Trustee has the position of corporate sole.

(f) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.290‑‑‑Prevention of oppression and. mismanagement‑‑­Application to Court‑‑‑Persons authorised to file the application‑‑­Class of persons who may approach the Court by petition, for prevention of oppression and mismanagement are categorized as any member or members holding not less than twenty per cent of the issued share capital; a creditor or creditors having interest equivalent in amount to not less than twenty per cent of the paid‑up capital of the Company and the Registrar.

(g) Companies Ordinance (XLVII of 1984)----

‑‑‑‑S.290‑‑‑Prevention of oppression and mismanagement‑‑­Jurisdiction of Court‑‑‑Object‑‑‑Provisions under S.290 of the Companies Ordinance, 1984, give power to the Court to save a company from winding up by making a suitable order, which is an alternative remedy to the winding up.

General Development and Housing Corporation v. Ghulam Mustafa and others 1987 MLD 413 and Muhammad Fakree and 3 others v. Fakree Development Corporation Limited and 8 others 1992 MLD 668 ref.

(h) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.290, 410, 411, 412, 413, 414 & 415‑‑‑Prevention of oppression and mismanagement‑‑‑Proceedings before Court‑‑­Proceedings under S.290 of the Companies Ordinance, 1984, cannot be confined to the provisions of S.410 to S.415 of the Companies Ordinance, 1984.

Registrar of Companies, Pakistan through Joint Registrar of Companies v. Taj Company Limited and 8 others 1993 CLC 1413 and Muhammad Yousuf v. Taj Company 1994 CLC 403 ref.

(i) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.158(2), 290 & 305(b)‑‑‑Prevention of oppression and mismanagement‑‑‑Failure to hold Annual General Meeting at a place where of we was registered‑‑‑Petitioner raised such plea in the petition under S.290 of the Companies Ordinance, 1984‑‑­-Factum of holding of Annual General Meeting up to the year 1998 was not denied and the same was confirmed by the Registrar‑‑­ Meeting pertaining to the year 1999 was held in foreign country (London) and the meeting for the year 2000 could not be held, due to non‑availability of the Directors ‑‑‑ Effect ‑‑‑ Where the company was a private company, there was no bar of holding such meeting at any other place than in town of the registered office, though in respect of the listed company (public limited company), the Annual General Meeting had to be held in the town of registered office in terms of S.158(2) of the Companies Ordinance, 1984‑‑‑ Company would be deemed to be under mismanagement if failed to convene two consecutive General Meetings in terms of S.305(b) of the Companies Ordinance, 1984‑‑‑ Petition, in the present case, was filed before expiry of the time for holding meeting for the year 2000, thus the ground for not holding two consecutive meetings was not available to the petitioner in circumstances.

Malik Muhammad Ishaque represented by 9 Heirs and 11 others v. Messrs Erose Theatre, Karachi and 26 others PLD 1973 Kar. 52; Ganga Prasad v. Prem Kumar Kohli AIR 1949 All. 173 and Sardar Begum v. Muhammad Aslam 1989 SCMR 704 ref.

(j) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.290‑‑‑Prevention of oppression and mismanagement-----Application to Court‑‑‑Disputed question of fact‑‑‑Where contention of petitioner was not supported by comments of Registrar, such fact had become disputed and required detailed inquiry and. the same could not be gone into by Company Judge in circumstances.

Habib Bank Limited v. Messrs Golden Plastic Company

Limited 1991 MLD 124 and Salahuddin Khan v. Al‑Mansoor PLD 1987 Lah. 569 ref.

(k) Companies Ordinance (XLVH of 1984)------

‑‑‑‑S.290‑‑‑Term 'oppression'‑‑‑Connotation‑‑‑Loss of confidence between group of shareholders‑‑‑Term "oppression" has not been defined in Companies Ordinance, 1984, and it is left to the Court to decide on the facts of each case whether there is such oppression which calls for action under S.290 of the Companies Ordinance, 1984‑‑‑Question in each case is whether the conduct of the affairs of a company by the majority shareholders is oppressive to the minority shareholders and the same depends upon the facts proved in a particular case‑‑‑Not enough to show that there is just and equitable cause for order under S.290 of the Companies Ordinance, 1984-‑‑Mere loss of confidence between groups of shareholders does not come within the mischief of S.290 of the Companies Ordinance, 1984, unless it is shown that such lack of confidence has sprung from a desire to oppress the minority in the management of the Company's affairs and that there is at least an element of lack of probity and fair dealing to a member in the matter of this proprietary right as a shareholder.

Mohan Lal Chandumall and others v. Punjab Company Limited, Bhatinda and others AIR 1961 Punj. 485 and Shanti Prasad Jain v. Kalinga Tubes Limited and others AIR 1965 SC 1535 ref.

(l) Companies Ordinance (XLW of 1984)‑‑‑

‑‑‑‑S.290‑‑‑Prevention of oppression and mismanagement‑‑‑Proceedings before Companies Judge‑‑‑Territorial jurisdiction‑‑­Court has no jurisdiction over the persons residing in foreign country (England) but has jurisdiction over the person though residing in different Provinces regarding matter connected with the company and its asset‑‑‑Petition is maintainable against directors of company, who are residing in Pakistan.

Bishadendu Gupta v. H. Langham Reed and others AIR 1937 Pat. 196 rel.

(m) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.290‑‑‑Prevention of oppression and mismanagement in affairs of company ‑‑‑Returns not properly filed by respondents‑‑­Application under S.290 of the Companies Ordinance, 1984, was filed by the petitioner on the ground that some returns filed by the respondents were not properly filed and were not accepted and deficiencies were not removed‑‑‑Validity‑‑‑Such vague statement could hardly be sufficient material to form. an opinion that affairs of the company were being mismanaged‑‑‑Petitioner had failed to bring on record the material to form an opinion by High Court that the affairs of the company were being mismanaged and/or any oppression was caused to the minority shareholders‑‑‑Petition was dismissed in circumstances.

The Sheriff of Bombay v. Hakimji Motaji & Co. AIR 1927 Born. 521; Secretary, B. & R. v. Fazal Ali Khan PLD 1971 Kar. 625; Fauji Foundation v. Shameem-ur‑Rehman PLD 1983 SC 457; Shameem‑ur‑Rehman v. Fauji Foundation 1992 SCMR 1496; Muhammad Sharif v. Mahmood and another 1984 CLC 2380; Secretary‑cum‑Chief Engineer, Irrigation Department, Government of Balochistan, Quetta and 2 others v. Ghulam Muhammad Khan and another 1986 CLC 2987; Messrs Capital Farms, Islamabad v. National Development Finance Corporation PLD 1996 Lah. 99; Habibullah v. Ali Muhammad 1986 CLC 1227 and Ali Mohataram Naqvi v. Messrs Cogefar‑Astaldi Sidmail PLD 1986 Kar. 574 ref.

Iqbal Haider for Petitioner.

Muhammad Afzal Siddiqui for Respondents.

Dates of hearing: 10th and 12th April, 2001.

2002 C L D 218

[Karachi]

Before Zahid Kurban Alavi, J

AL‑HUDA. HOTELS AND TOURISM

‑CO. and others‑‑‑Plaintiffs

Versus

PAKTEL LIMITED and others‑‑‑Defendants

Suit No.711 and Civil Miscellaneous Application No.3731 of 2000, decided on 6th November, 2000.

(a) Qanun‑e‑Shahadat (10 of 1984)‑‑‑

‑‑‑‑Art.114‑‑‑Estoppel‑‑‑Proof‑‑‑Party, in order to prove estoppel, has to do more than to show that it has acted to its detriment and to the knowledge of the other party in the. hope that the other party would not withdraw from the agreement in principle‑‑‑Party has to show, in addition, that the other party had created or encouraged a belief or expectation that he would not withdraw and the party seeking to find estoppel had relied on that belief or expectation.

Raingold v. Bromley (1931) ALL ER Rep. 822 ref.

(b) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.7‑‑‑Acceptance of proposal‑‑‑Converting proposal into contract‑‑‑Principle‑‑‑In order to convert a proposal into a contract, the acceptance to the proposal must be absolute and un­qualified‑‑‑Consensus ad idem between the parties with regard to all the terms of the contract must be shown to exist‑‑‑Qualified acceptance of proposal or acceptance of proposal with a variation is no acceptance.

Walford and others v. Miles and another (1993) 1 All ER 453; Von Hatzfeldt‑Widenburg v. Alexander (1911‑1913) All ER 148 and Shalsons Fisheries Limited, Karachi v. Lohmann & Co. and another PLD 1982 Kar. 76 ref.

(c) Contract Act (IX of 1872)‑‑‑

‑‑‑‑Ss. 2(h), 3 & 10‑‑‑Concluded contract ‑‑‑Determination‑‑‑Test‑‑Question whether the parties had reached a concluded contract or not, is a question of fact to be deduced from the correspondence and other documentary or oral evidence‑‑‑True test for deciding the question is to ascertain whether the parties were of one mind on all the material terms at the tune the contract was said to have been finalized between them and whether‑the parties intended that the matter was closed and concluded between them.

Custodian, Enemy Property, Islamabad v. Hoshand M. Dastur and 6 others PLD 1977 Kar. 377 and Baijnath v. Ksetradhari Sarkar and others AIR 1955 Cal. 210 ref.

(d) Specific Relief Act (1 of 1877)‑‑‑

‑‑‑‑S.22‑‑‑Specific performance of agreement‑‑‑Enforcement of specific performance of agreement is not an absolute right‑‑­Specific performance of agreement rests in judicial discretion, exercised according to the principles of equity and with reference to the facts of the case‑‑‑Such right should never be granted unless the terms of the agreement sought to be enforced are clearly proved, or where it is left in doubt whether the party against whom the relief is asked in fact made such agreement

Colson v. Thompson (US SC) 4L. ed 253 and William a. Carr v. Samuel H. Duval (US SC) 10 L. ed. 361 ref.

(e) Spec Relief Act (I of 1877)‑‑‑

‑‑‑‑Ss.21 & 22‑‑‑Relief of specific performance‑‑‑Enforcement a the instance of plaintiff ‑‑‑Scope‑‑‑Such relief is discretionary and when the contract is abandoned, the same cannot be enforced at the instance of plaintiffs.

Ashrafi (Pvt.) Limited and another v. Karachi Transport Syndicate Limited, Karachi and another PLD 1973 Note 119 at p. 184 and Narainjan and others v. Muhammad Yunus AIR 1932 Lah. 265 ref.

(f) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑S.55‑‑‑Mandatory injunction, grant of‑‑‑Principle‑‑‑Such injunction cannot be granted by way of interim relief as a grant of such relief would be tantamount to a grant of final relief which would seriously prejudice the defendants.

Muhammad Yaqub v. Muhammad Nasrullah Khan and others PLD 1986 SC 497 and Firozuddin Ahmed v. Trading Corporation of Pakistan Limited and another 1987 MLD 124 ref.

(g) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑S.12‑‑‑Contract Act (IX of 1872), Ss.10 & 29‑‑‑Specific performance of agreement with a condition 'subject to contract'‑‑­Validity‑‑‑Phrase 'subject to contract' is a suspensive condition‑‑­Any document or memorandum agreed to by the parties, subject to such condition does not become binding contract, unless such condition is lid by a subsequent act of the parties.

The Law of Contract by Cheshire & Fifoot, 10th Edn., p. 186 ref.

(h) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑Ss.12 & 21‑‑‑Civil Procedure Code (V of 1908), OXXXIX, Rr.1 & 2‑‑‑Interim injunction, grant of‑‑‑Specific performance of agreement with condition 'subject to contract'‑‑‑No contract was executed between the parties‑‑‑Plaintiff relied upon a letter which contained terms of oral agreement and the letter was accepted by one of the defendants subject to contract ‑‑‑Plaintiff failed to show any act of the parties which would have the effect of lifting the suspensive condition‑‑‑Validity‑‑‑Such agreement was not enforceable in law as the agreement had a condition of 'subject to contract'‑‑‑Where parties had expressed their intention of not entering into legal obligations without a formal contract such term must be respected in order to allow the freedom to the parties to negotiate a deal without the fear of being trapped into obligations which they never intended to create, no binding contract in the present case, existed between the parties‑‑­ Plaintiff, thus failed to establish a prima facie case in its favour for the grant of injunction‑‑‑Application for grant of injunction was dismissed accordingly.

Major (Retd.) Ahmed Khan Bhatti v. Mst. Masooda Fatmi PLD 1981 Kar. 398; Pakistan Industrial Development Corporation v. Aziz gureshi PLD 1965 (W.P.) Kar. 202; Harichand Mancharam v. Govind Luxinan Gokhale AIR 1923 PC 47; Branca v. Cobarro 1947(2) All ER 101; Damon C.I.A. Naviera SA v. Hapag‑Lloyd International SA v. The Blankenstein, The Bartenstein, The Birkenstein (1985) 1 All ER 475; Ateni Maritime Corporation v. Great Marine Limited (1990) 2 Lloyd's Rep. 250; Perry v. Suffields Limited (1916) 2 Ch. D 187; Voest Alpine Intertrading v. Chevron International Oil Co. (1987) 2 Lloyd's Rep. 547; Gloval Container Lines Ltd. v. State Black Sea Shipping Co. Amber Seatrade S.A. and Clifton Navigation S.A. (1999) 1 Llyod's Rep. 127; Foley v.' Classique Coaches Limited (1934) 2 KB 1; Sweet and Maxwell Ltd. v. Universal News Services Ltd. (1964) 3 All ER 30; Finchbourne Ltd. v. Rodrigues (1976) 3 All ER 581; Beer v. Bowden (1981) 1 All ER 1070; Greater London Council v. Connolly (1970) 1 All ER 870; Tiverton Estates Limited v. Wearwell Limited (1974) 1 All ER 209; Cohen v Nessdale Limited (1981) 3 All ER 118; Attorney‑General and another v. Humphreys Estate (Queen's Gardens) Limited (1987) LRC 9 (Comm.) 567; Courtney & Fairbarin Limited v. Tolaini Bros. (Hotels) Limited (1975) 1 All ER 716; Ghulam Nabi and others v. Muhammad Yaqub and others PLD 1983 SC 344; David J. Hennessey v. Clara Woolworth (US SC) 128 US 500; State of Texas v. State of New Mexico (US SC) 96 L.Ed.2d. 105; Sandoz Limited and another v. Federation of Pakistan and others 1995 SCMR 1431; House Building Finance Corporation v. Shahinshah Human Cooperative House Building Society and others 1992 SCMR 19; Mst. Zeemun Nisa Begum v. Ali Muhammad PLD 1990 SC 382; Shajar Ali Hoti v. Esmail Sobani 1987 CLC 2307; Aboo Noor Muhammad v. General Iron and Steel Works Limited PLD 1973 Kar. 234 and Halsbury's Laws of England, Vol. 9, 4th Edn. ref.

(i) Contract Act (IX of 1872)‑‑-----

‑‑‑‑S.10‑‑ Agreement termed as contract ‑‑Principle‑‑‑Where acceptance of offer is subject to additional conditions; the same merely constitutes an expression of willingness to enter into a contract or a counter proposal but does not constitute a binding contract.

Corpus Juris Secundum, Vol. 17 rel.

Khahd Anwar for Plaintiff.

Salman Talibuddin for Defendant.

Date of hearing: 26th September, 2000.

2002 C L D 240

[Karachi]

Before Zia Perwez, J

Messrs NATIONAL AND GRINDLAYS

BANK LIMITED, KARACHI‑‑‑Plaintiff

Versus

ARSHAD ALI KHALID QURESHI

and another‑‑‑Defendants

Suit No.74 of 1973 and Civil Miscellaneous Applications Nos. 3195 and 3196 of 2001, decided on 19th October, 2001.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss.2(b)(i) & 7(6)‑‑‑Suit for recovery of Bank loan‑‑‑Jurisdiction of Banking Court‑‑‑Transfer of the suit under S.7(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑­Value of claim made in the suit was sum of Rs.1,81,056.67‑‑‑Suit pending before the High Court was ordered to be transferred to Banking Court under S.2(b)(0 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Habib Ahmad v. Hong Kong and Shanghai Banking Company 1999 CLC 1953 ref.

Jawad Sarwana for Plaintiff.

Nawab Saeedullah Khan for Defendants.

Date of hearing: 19th October, 2001.

2002 C L D 242

[Karachi]

Before Zia Perwez, J

Messrs MUSLIM COMMERCIAL BANK LIMITED‑‑‑Plaintiff

Versus

Messrs HAWKESBAY SPORTSWEAR INC. ‑‑‑Defendant

Suit No.B‑33 of 2001, decided on 21st November, 2001.

(a) Financial Institutions (Recovery of Finances) Ordinance (XXLVI of 2001)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Failure to appear in Court, in response to sununons duly served on the defendant‑‑­Effect‑‑‑Where contentions of the financial institution had gone unrebutted and unchallenged the suit was decreed accordingly.

PLD 1989 SC 75 ref.

(b) Administrative action‑

‑‑‑‑ Power exercised by executive‑‑‑Mode of exercise ‑‑‑Principles‑‑­Where power is given to do a certain thing in a certain way, the thing must be done in that way or not at all‑‑‑Other methods of performance are necessarily forbidden‑‑‑Such principle would apply with greater force when a Constitutional provision has provided for a method of performance and prescribed a limitation of time for doing a thing.

PLD 1989 SC 75 ref.

Rizwan Ahmed Siddiqui for Plaintiff. Defendant ex parte.

Date of hearing: 26th October, 2001.

2002 C L D 276

[Karachi]

Before Shabbir Ahmed, J

TEXTILE MANAGEMENT (PVT.) LIMITED‑‑‑Plaintiff

Versus

N.I.T. ‑‑‑Defendant

Suit No. 1659 of 1999, decided on 25th April, 2001.

(a) Islamic Jurisprudence‑‑‑

‑‑‑‑ Financing in Islam ‑‑‑ Bai'Mu'ajjal/Murabahah'‑‑‑ Connotation and applicability‑‑‑ Purchase of goods by Bank and through sale to client at appropriate mark‑up in the price on deferred payment basis is called Bai'Mu'ajjal (sale on deferred payment basis), which is called 'Murabahah'‑‑‑Murabahah in Islamic system, is one of the modes, where a seller agrees with his purchaser to provide him a specific commodity on a certain profit added to his costs and such is a Murabahah transaction‑‑‑Basic ingredient is that seller discloses the actual costs he has incurred in acquiring the commodity and then adds some profit thereon, which may be in lump sum or may be based on a percentage‑‑‑Such sale is simple sale with a distinguishing feature from other kinds of sale, the disclosures of actual costs and profit charged‑‑‑Due time of payment can be fixed either with reference to a particular date, or by specifying a period, like three months, but cannot be , fixed with reference to a future event the exact date of which is unknown or is uncertain.

Chapter Murabahah of An Introduction of Islamic Finance by Muhammad Taqi Usmani ref.

(b) Islamic Jurisprudence‑‑‑

‑‑‑‑Financing in Islam ‑‑‑Murabahah transaction‑‑‑Default in payment‑‑‑Principle of roll over‑‑Applicability‑‑‑Price, in such transaction, must be fused at the time of sale‑‑‑Once price is fixed, it cannot be decreased in case of earlier payment, nor can it be increased in case of default ‑‑Buyer may be asked to promise that in case of default he will donate some specified amount for a charitable purpose‑‑‑Seller, in case of default may receive such amount from buyer, not to make such amount as part of income but to use it for charitable purposes on behalf of the buyer‑‑­ Where buyer defaults in payment of price at the due date, in Murabahah financing, the price cannot be increased, though, in interest based loan, the amount of loan keeps on increasing according to the period of default ‑‑‑Murabahah – transaction cannot be rolled over for a further period as the same is not permissible, whereas in interest‑based financing, if a customer of Bank cannot pay at due date for any reason, he may request the Bank to extend the facility for another term‑‑‑If Bank agrees, the facility is rolled over on the terms and conditions mutually agreed at the point of time whereby the newly agreed rate of interest is applied to the new term‑‑‑Concept of Murabahah cannot be misunderstood as a mode of financing analogous to the interest­ based loan by using the concept of roll over‑‑‑If the client, in a Murabahah transaction, requests the Bank to extend the maturity date of Murabahah, to roll it over and extend period of payment on additional mark‑up charged from the client, the same practically means that another separate Murabahah is booked on same commodity‑‑‑Such practice is totally against the well‑settled principles of Shariah.

Chapter Murabahah of An Introduction of Islamic Finance by Muhammad Taqi Usmani ref.

(c) Islamic Jurisprudence‑‑‑

‑‑‑‑ Financing in Islam ‑‑‑Murabahah transaction‑‑‑Re‑scheduling of payment‑‑‑Validity‑‑‑Re‑scheduling of payment, in such transaction, is not permissible‑‑‑Where instalments are re­ scheduled, no additional amount can be charged for re­ scheduling‑‑‑Amount of Murabahah price remains the same in the currency.

Chapter Murabahah of An Introduction of Islamic Finance by Muhammad Taqi Usmani ref.

(d) Banking Companies (Recovery of Loans, Advances, Credits and finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑Contract Act (IX of 1872), S.23‑‑‑Application for leave to defend the suit ‑‑‑Murabahah agreement ‑‑‑Re‑scheduling‑­ Suit was filed by borrowers for return of pledged shares‑‑­ Contention of the borrower was that under Morabahah agreement the whole amount had been re‑paid to the financial institution and nothing was outstanding‑‑‑Plea raised by the financial institution was that the parties had agreed to renewal of facility upon payment of mark‑up at revised rate and termed such agreement as substitution of earlier agreement ‑‑‑Validity‑‑­Where entire sale price had been paid by the borrower but beyond ‑ stipulated period, roll over or re‑structuring was not permissible in Morabahah‑‑‑If the borrower was unable to pay instalment on due date, the financial institution could extend the period of repayment but could not charge anything over and above the purchase price‑‑ Any agreement for extension of payment with further mark‑up was against public policy in terms of S.23 of the Contract Act, 1872‑‑‑Financial institution, in the present case, could not claim any amount over and above the sale price which had been paid‑‑‑Financial institution failed to raise bona fide and serious dispute‑‑‑Application for leave to defend was dismissed‑‑‑Suit was decreed in circumstances.

Abdul Qayoom v. Ziaul Haq and another PLD 1962 (W.P.) Kar. 334; Ghouri Dutt Ganesh Lall Firm v. Madho Prasad and others AIR 1943 PC 147; Banque Indoseuz v. Banking Tribunal for Sindh and Balochistan and others 1994 CLC 2272; United Bank Limited v. Messrs Sarhad Ghee Mills Limited and 13 others 1999 YLR 323 and Dr.M.Aslam Khaki v. Syed Muhammad Hashim PLD 2000 SC 225 ref.

Yawar Farooqui for Plaintiff.

Nadeem Akhtar for Defendant.

Date of hearing: 11th April, 2001.

2002 C L D 343

[Karachi]

Before Sarmad Jalal Osmany, J

Messrs QUAIDABAD WOOLLEN MILLS

LIMITED‑‑‑Petitioner

Versus

THE STATE‑‑‑Respondent

Judicial Miscellaneous No.37 of 2000, decided on 28th August, 2001.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305‑‑‑Winding‑up of company‑‑‑Administration of justice‑‑­Interests of labour working in factory of Company‑‑‑Office of Company was situated in one Province whereas the factory was located in other Province‑‑‑Publication was not made in newspapers having circulation in the area where the factory was located‑‑‑Effect‑‑‑Where the Company's debts/ liabilities were in excess of its assets and that it was not in production any more, High Court was of the opinion that it was just and equitable to wind up the Company‑‑‑High .Court in the interest of justice and for the specific purpose of catering to the interest of the labour of the factory passed order for republication in the newspapers having circulation in the Province where the factory was located‑‑To save the interest of the Company, Official Assignee was appointed as Provisional Manager‑‑‑Petition for winding‑up was adjourned for further action.

Saalim Salam Ansari for Petitioner.

A.H. Mirza for Respondent.

S. Saleemuddin Nasir for the State.

2002 C L D 391

[Karachi]

Before Munir-ur-Rehman, J

Messrs PRINZE (PVT.) LIMITED‑‑‑Appellant

Versus

SHAHID SAEED KHAN and others‑‑‑Respondents

Suit No. 1117 and Civil Miscellaneous Application No. 7236 of 2000, decided on 20th August, 2001.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXVIII R.5‑‑‑Attachment before judgment ‑‑‑Furnishing of security for production of property‑‑‑Pre‑condition‑‑‑Where Court is satisfied by affidavit or otherwise that defendant with intent to obstruct or delay execution of any decree that may be passed against him, is about to dispose of property at any stage of the suit, the Court can pass an order under O.XXXVIII. R.5, C.P.C.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑-O.XXXVIII R.5‑‑‑Attachment before judgment‑‑‑Furnishing of security for production of property‑‑‑Intention of defendant, inferring of‑‑‑After receipt of legal notice given by the plaintiff and prior to institution of the suit, the defendant had transferred his property to his wife, just to avoid the decree which might be passed against him‑‑‑Effect‑‑‑Intention of the defendant was to be inferred from the attending circumstances‑‑‑Transfer by the defendant in favour of his wife in clandestine manner prior to institution of suit showed the conduct/intention of the defendant‑‑‑Where the plaintiffs case came within the provision of O.XXXVIII, R.5, C.P.C., High Court directed the defendant to furnish security.

Faqir Ali v. Muhammad Hayat PLD 1976 Lah. 298 distinguished.

Syed Ziauddin Nasir for Plaintiff.

Ejaz Ahmed for Defendant.

Dates of hearing: 30th January; 1st and 6th February, 2001.

2002 C L D 412

[Karachi]

Before Zahid Qurban Alvi and Mushir Alam, JJ

Rana QAMAR ZAMAN and 6 others‑‑‑Appellants

Versus

HABIB BANK LIMITED‑‑‑Respondent

High Court Appeal No.217 of 1999, decided on 11th December, 2000.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.10 & 21‑‑‑Leave to defend the suit‑‑‑Serious and bona fide dispute‑‑‑Borrower imported goods on account of the Bank and on the failure of the importers to clear the goods after retiring the documents and making the payment the Bank was stuck‑‑­Borrowers were saddled with the documents and a liability‑‑­Dispute did exist between the Bank and the borrower, in the present case and, therefore, the leave to defend should have been granted by the Banking Court and matter disposed of on merits‑‑‑Judgment and decree passed by the Banking Court were set aside and leave to defend was granted‑‑‑Appeal was allowed accordingly.

Imtiaz Ahmed Lari for Appellants.

A.R. Akhtar for Respondent.

Date of hearing: 30th November, 2000.

2002 C L D 415

[Karachi]

Before Muhammad Roshan Essani and Mushir Alam, JJ

Messrs AHMED FOOD INDUSTRIES (PVT.) LIMITED and 2 others‑‑‑Petitioners

Versus

BANKING COURT NO. 1 through learned Presiding Officer/Judge and 3 others‑‑‑Respondents

Constitutional Petition No.D‑1830 of 2001, decided on 31st October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997‑‑‑

‑‑‑‑S.18‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition ‑‑‑Decretal amount, recovery of‑‑‑Issuance of bailable warrants‑‑‑Banking Court issued bailable warrants for the recovery of decretal amount from the judgment‑debtors‑‑­Judgment‑debtors' counsel had stated before the High Court that judgment‑debtors had appeared before dancing Court and had deposited the required security in the Banking Court ‑‑‑Effect‑‑­Order of issuance of bailable warrants against the judgment­ debtors was recalled in view of the statement given by the judgment debtors' counsel‑‑‑High Court directed the Banking Court to decide the matter in accordance with law and to retain the amount of the security so deposited till the final disposal of the case‑‑‑Constitutional petition axis disposed of accordingly.

Kamal Azfer and Saalim Salam Ansari for Petitioners.

Nadeem Akhter for Respondent No. 2.

S. Zaki Muhammad, D.A.G.

2002 C L D 426

[Karachi]

Before Syed Zawar Hussain Jaffery, J

Haji MUHAMMAD MIRZA‑‑‑Appellant

Versus

MUSLIM COMMERCIAL BANK LIMITED through Attorney Manager‑‑‑Respondent

First Civil Appeal No.D‑1 of 2000, decided on 6th September, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.8(2)‑‑‑Suit for recovery of Bank loan‑‑‑Filing of the suit by unauthorized person‑‑‑Effect‑‑‑Unless the attorney was so authorized by resolution passed by the Company's Board of Directors under S.8(2) of the Banking Companies (Recovery of Loans, Advances, Credits and. Finances) Act, 1997, the suit was incompetent.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.8 & 9‑‑‑Written off loan‑‑‑Suit filed by unauthorized person‑‑‑Bank filed the suit in September, 1997, whereas the loan was written off in March, 1993‑‑‑Suit was decreed by the Banking Court in favour of the Bank‑‑‑Plea raised by the borrower was that the suit was beyond the period prescribed by law and the same was filed by unauthorized person‑‑‑Validity‑‑‑Suit, in the present case, was filed by a person who was not duly authorized in that behalf as provided under S.8(2) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑­Where the Banking Court had not examined the legal position in respect of time‑barred claim and competency of Bank to file such suit without having authority from Board of Directors, the judgment and decree passed by it were without lawful authority and the same were set aside‑‑‑Appeal was allowed in circumstances.

Dumez Boric v. International Forwarders Limited NLR 1983 UC 184; Punjab Livestock Dairy and Poultry Development Board v. Shaikh Muhammad Younas 1980 CLC 1932; Khan Iftikhar Hussain of Mamdot v. Messrs Ghulam Nabi Corporation Limited, Lahore PLD 1971 SC 258; National Bank of Pakistan and others v. National Battery Industries and others 1994 CLC 2133 and H.M. Ebrahim Sait v. South India Industrials Ltd. AIR 1938 Mad. 962 ref.

Ahmed Ali Memon for Appellant.

Muhammad Shamim Khan (absent) for Respondent.

2002 C L D 433

[Karachi]

Before Zahid Qurban Alvi and. S.A. Rabbani, JJ .

THE CRESCENT STAR INSURANCE CO. LIMITED‑‑‑Petitioner

Versus

NATIONAL BANK OF PAKISTAN‑‑‑Respondent

C.P.D. No.296 of 2000, decided on 22nd November, 2000.

(a) Insurance Act (IV of 1938)‑‑‑

‑‑‑‑S. 44‑A‑‑‑Delisting of Insurance Company by Bank‑‑­Principles‑‑‑Delisting should only be after due consideration and keeping in mind all the facts of the case and should be considered as a last measure and should be used very sparingly‑‑‑By delisting and blacklisting Insurance Companies in an arbitrary and capricious manner, Bank would be holding themselves vulnerable to action for damages.

(b) Insurance Act (IV of 1938)‑‑‑

‑‑‑‑S.106‑‑‑Constitution of Pakistan (1973), Art 199‑‑‑Constitutional petition‑‑‑Claim of loss by fire by Bank‑‑‑Denial of liability by petitioner Insurance Company as Co‑Insurer to pay such loss‑‑­Delisting of such Co‑Insurer Company by Bank‑‑‑Validity‑‑‑Union Insurance Company issued Fire Insurance Policy in favour of Bank as mortgagee of building, machinery and stock in factory premises of mortgagor‑‑‑Union Insurance Company received an intimation of loss from Bank on account of fire‑‑‑Petitioner Insurance Company was requested on the basis of Co‑Insurance Policy to depute surveyors for assessing loss, but it denied its liability to pay such loss alleging Co‑Insurance Policy to be a fake, false and fabricated document‑‑‑Bank lodged F.I.R. and after investigation of the case, challan was submitted in Court only against Manager of Union Insurance Company, whereas petitioner Insurance Company was exonerated from the charge‑‑‑Suit filed by Bank for recovery of alleged loss was decreed by Banking Court, wherein petitioner Insurance Company was not party‑‑­Controller of Insurance being guiding factor for all Insurance Companies and empowered to ensure strict compliance of the rules had also exonerated petitioner Insurance Company from allegations levelled by Bank‑‑‑Behaviour of Bank, in view of all such factors in favour of petitioner Insurance Company, was very strange and partisan and it was not justified to resort to such a harsh stand‑‑‑Bank had not at all acted with prudence‑‑­Constitutional petition was accepted and impugned action of Bank was declared to be unwarranted and unjustified.

New Jubilee Insurance Company v. National Bank of Pakistan PLD 1999 SC 1126 fol.

Muhammad Ali Sayeed for Appellant.

Muhammad Ashraf Bhatti and S. Zaki Muhammad, Dy. A.G. for Respondent.

Date of hearing: 22nd November, 2000.

2002 C L D 441

[Karachi]

Before Zia Pervez, J

A. HABIB AHMAD‑‑‑Plaintiff

Versus

HONG KONG AND SHANGHAI BANKING CORPORATION and others‑‑‑Defendants

Suit No. 428 of 1987, decided on 8th October, 2001

(a) Words and phrases‑‑‑

‑‑‑‑ "Claim"‑‑‑Defined.

Black's Law Dictionary, 6th Edn. ref.

(b) Words and phrases‑‑‑

‑‑‑"Cause of action"‑‑‑Defined.

Black's Law Dictionary, 6th Edn. ref.

(c) Financial Institution (Recovery of Finance) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑S.2(b)(ii)‑‑‑Recovery of Bank loan‑‑‑Jurisdiction of High Court‑‑­Where valuation of suit was in excess of Rs.5 crores, the same fell within the jurisdiction of High Court within the meaning of S.2(b)(ii) of the Financial Institution (Recovery of Finance) Ordinance, 2001‑‑‑Suit before High Court was maintainable in circumstances.

Maqbool Baqar for Plaintiff.

M.A. Sayeed, Iqbal L. Bawany and Neel Keshav for Defendants.

2002 C L D 512

[Karachi]

Before Ata‑ur‑Rehman, J

HABIB BANK LTD. ‑‑‑Plaintiff

Versus

Messrs TAJ PRINTING & PACKAGING INDUSTRIES LTD. and others‑‑‑Defendants

Suit No. B‑96 of 2000, decided on 8th January, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Companies Ordinance (XLVII of 1984), Ss. 290, 316 & 410‑‑‑Suit for recovery of loan‑‑‑Stay of proceedings ‑‑‑Defendant-­Company was subsidiary Company of the Company which was under liquidation‑‑‑No proceedings could take place against defendant‑Company unless permission was sought by Company Judge from the Company Court under provisions of 5.316 of Companies Ordinance, 1984, as applicable to the defendant-­Company‑‑‑Proceedings of suit were stayed in circumstances.

National Bank of Pakistan v. Banking Tribunals Nos. 1 and 11 others PLD 1994 Kar. 358; IDBP v. Bahawalpur Board Mills Limited and others J.M. No. 69 of 1991; Pakistan American Fertilizers, Mianwali v. Ameer Abdullah Khan and another 1984 CLC 2170; UBL v. Sindh Tech. Industries Limited 1988 CLC 1152 and PLD 1994 Kar. 338 ref.

Aziz‑ur‑Rehman for Plaintiff.

Naazar Khan for Defendant No. 1.

2002 C L D 527

[Karachi]

Before Sabihuddin Ahmed, J

NATIONAL INVESTMENT TRUST LTD. ‑‑‑Plaintiff

Versus

LAWRENCEPUR WOOLLEN AND TEXTILE MILLS LTD. ‑‑‑Defendant

Suit No‑49 of 1979, decided on 3rd October 1998.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S.20‑‑‑Suit could be filed within the territorial jurisdiction of a Court where the cause of action or any part thereof arose irrespective of the question whether the defendant Corporation had its principal or subordinate office within such jurisdiction‑‑­Question of territorial jurisdiction, however, can only be decided on the basis of the case made out by the plaintiff and not the defence set up by the defendant‑‑‑Explanation II to S.20, C.P.C. was only relatable to cls.(a) & (b) and not (c) of the said section‑‑‑[Firm Shaikhan v. W.P. Industrial Development Corporation PLD 1976 Quetta 94 overruled.

Brady & Co. (Pakistan Limited) v. Sayed Saigol Industries Limited 1981 SCMR 494 fol.

Gharibwal Cement Ltd. v. Universal Traders, Gakhar Mandi PLD 1977 Lah. 481 ref.

Firm Shaikhan v. W.P. Industrial Development Corporation PLD 1976 Quetta 94 overruled.

(b) Contract‑‑‑

‑‑‑‑Formation of contract ‑‑Territorial jurisdiction‑‑‑Contract is considered to have come into existence upon acceptance of proposal.

(c) Contract‑‑‑

‑‑‑‑ Defendant an incorporated Corporation offering shares to the plaintiffs‑‑‑Cause of action‑‑‑Territorial jurisdiction‑‑‑Plaintiffs were required to prove that they had accepted or undertaken to purchase shares offered by the defendant ‑‑‑Offer of shares having been made at place K, part of the cause of action, therefore, accrued at place K.

(d) Company‑‑‑

‑‑‑‑Sale of shares of a company‑‑‑Dispute relating to performance of contract of sale of shares of an incorporated company not to be decided by Company Court; such dispute could only be adjudicated by an ordinary Civil Court of general jurisdiction.

(e) Company‑‑‑

‑‑‑‑ Sale of right shares under the consent order of the Controller of Capital Issues‑‑‑Letter of offer of sale of such shares at a specified price to the plaintiffs which also mentioned the exact number of shares available for subscription and not only in the first letter but also in a subsequent letter the defendants themselves used the expression "offer" which was accepted by the plaintiffs‑‑‑Contention of the defendants that their first letter was not an offer but only was in the nature of a pre‑contract inquiry was repelled‑‑‑Contract had been concluded and property in the shares had passed on , to the plaintiffs during the subsistence of the initial consent order of the Controller of Capital Issues‑‑‑Principles.

In the present case in the first place by their letter, dated 9‑10‑1975 the defendants expressly stated 'we hereby offer 130,520 shares of Rs. 10 each to you for subscription at par. After having received the plaintiffs' communication, dated 27‑12‑1975 (unaccompanied by a demand draft), they responded vide their letter dated 1‑1‑1976 stating " since the offer made by us has been accepted by you no formal provisional letter is necessary, in this particular case". Secondly it was evident that if the defendants were of the view that the plaintiffs' letter of acceptance was not responsive to the offer they could have conveniently apprised the plaintiffs of the same. Not only, did they fail to do so but went on to express their happiness over the plaintiffs' acceptance and assured the plaintiffs to be treated as shareholders by stating that no Provisional Allotment Letter was necessary. Therefore, even if the plaintiffs' letter, dated 27‑12‑1975 was considered not to be responsive to the offer and was merely treated as counter‑offer such 'counter‑offer' was also clearly accepted vide letter dated 1‑1‑1976. The fact that the defendants subsequently accepted the sale consideration and attempted to refund the same more than one month later only showed that it was an afterthought.

Even property in shares had passed on to the plaintiffs. Therefore, from whatever angle the matter was to be looked at the conclusion was inescapable that a valid binding contract had come into existence.

The contract had been concluded and the property in the shares had passed on to the plaintiffs during the subsistence of the initial consent order of the Controller of Capital Issues i.e. up to 2‑1‑1976.

The only possible defence which could have been available to the defendants and which had in fact been raised in their several letters was that after making a contract it became impossible for the defendants to perform the same in view of a legal bar imposed by the Capital Issue (Continuance of Control) Act, 1947, whereby sale price could not be accepted after the consent had expired. However, even if it was assumed that the issue of capital could only be made upon receipt of consideration and the bar created by section 3(2) of the Act became applicable, section 6(2) conferred ample powers upon the Government to condone violation of section 3 and therefore, the moment consent was extended with retrospective effect the defendant could not even plead the existence of such legal bar.

Contracts by Fifoot, 1976 Edn., p.55 and Commissioner of Income‑tax, North Zone v. Crescent Textile Mills Limited PLD 1973 Lah. 387 ref.

(f) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑S.42‑‑‑Contract of sale of shares of an incorporated corporation‑‑‑Such contract was neither revocable nor in fact was revoked, and in any event the property in the shares having been passed on to the plaintiffs, it was not possible to see how it could be treated as a mere claim and not right as to specific property‑‑­Plaintiffs' claim as to ownership of shares could be treated as a claim pertaining to right as to property in terms of S.42, Specific Relief Act, 1877.

Nanalal Zaver and others v. Bombay Life Assurance Co. A I R 1949 Bom. 56 and Saeed Ahmad Malik v. Naval Estate Officer 1989 CLC 1056 distinguished.

Alvi Sons case PLD 1968 Kar. 222 and Commissioner of Income‑tax v. Crescent Textile Mills PLD 1973 Lah. 387 ref.

(g) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑S.42‑‑‑Suit for declaration‑‑‑Defendants, a public limited company, were conveyed the consent of the Controller of Capital Issues, Government of Pakistan to issue fully paid right shares subject to specified conditions‑‑‑Defendants, in accordance with the requirements of the Consent Order, offered the shares to the plaintiffs‑‑‑Plaintiffs in response to the said letter informed the defendants that they had decided to take up the un-subscribed shares and requested the defendants to send an allotment letter for the same‑‑‑Defendants replied to the plaintiffs that since the offer made had been accepted, no formal Provisional Allotment Letter was necessary and asked the plaintiffs to send a Bank Draft for the amount involved‑‑‑Plaintiffs sent the demand draft to the defendants which was cashed‑‑‑Defendants vide another letter addressed to the plaintiffs informed that validity of the Consent Order had expired and therefore they were not legally authorized to issue any securities and therefore the amount received was being returned through a draft‑‑‑Controller of Capital Issues, had however, extended the validity of the Consent Order anal thereupon plaintiffs insisted that shares be issued and returned the Bank draft despatched to them which was retained by the defendants‑‑‑Contention of the plaintiffs was that, in circumstances, the defendants were liable to issue the shares in question‑‑‑Validity‑‑‑Plaintiffs were entitled to a declaration that they were owners of the said shares in the defendant company with effect from the date of the decree and plaintiffs would be entitled to all rights and benefits, and dividends to be declared in the forthcoming financial year‑‑­Defendants, however, were to pay an amount calculated on the basis of 1596 per annum on the amount as compensation from the specified date till the date of decree‑‑‑Reasons recorded.

Nadeem Akhtar for Plaintiffs.

Fazal-e-Ghani Khan and Yawar Farooqi for Defendants.

Date of hearing: 23rd September, 1998.

2002 C L D 542

[Karachi]

Before Sabihuddin Ahmed and S. Ali Aslam Jafri, JJ

UNITED BANK LIMITED‑‑‑Appellant

Versus

Messr AZMAT TEXTILE MILLS LIMITED‑‑‑Respondent

Special High Court Appeal No. 153 of 2000, decided on 8th June, 2001.

(a) Banking Companies Ordinance (LVII of 1962)‑‑‑

‑‑‑‑S.33‑B‑‑‑Circulars issued by State Bank of Pakistan under S.33‑B providing incentive scheme to long term Bank defaulters and sick units for making payment to the Bank‑‑‑Nature‑‑‑Such circulars having been issued under authority conferred by statute must be treated as having the force of law.

(b) Banking Companies Ordnance (LVII of 1962)‑‑‑

‑‑‑‑S.33‑B‑‑‑Circulars issued by State Bank of Pakistan providing incentive scheme‑‑‑Dates stipulated in such circulars‑‑­ Entitlement to benefit under the scheme‑‑Statutory provisions i.e. S.33‑B, Banking Companies Ordinance, 1962, had expressly provided for laying down the general guideline for facilitating recovery of bad or doubtful loans, advances of finances by giving incentives to borrowers or customers to make payment within a specified time frame‑‑‑Time for payment; in circumstances, was of the essence and it could not be said that as a general rule the time limit could not be considered to be of the essence for the purpose of availing benefits under the incentive schemes.

(c) Interpretation of statutes‑‑‑

‑‑‑‑Delegated legislation‑‑‑While construing the provisions of delegated legislation, the scope of authority conferred upon the delegatee by the parent statute, must always be kept in view.

Nafees Siddiqui for Appellant.

Kazim Hassan for Respondents.

Mansoorul Arfin : Amicus curiae.

Dates of hearing: 19th, 26th April: 23rd, 26th May and 6th June, 2001.

2002 C L D 582

[Karachi]

Before Sarmad Jalal Osmany, J

Messrs WARRAICH BROTHERS DAHRANWALA through Proprietor Muhammad Aslam having its Head Office at Fortabbas Road, Dharanwalla Bhawalnagar ‑‑‑ Plaintiff

Versus

THE DIRECTOR (I & S) FERTILIZER IMPORT DEPARTMENT, KARACHI and another‑‑‑Defendants

Suit No.765 and Civil Miscellaneous Application No.4467 of 2001, decided on 22nd January, 2002.

(a) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑S.12‑‑‑Contract Act (IX of 1872), S.55‑‑‑Civil Procedure Code (V of 1908), O.XXXIX Rr. 1 & 2‑‑‑Interim injunction, grant of was not of the essence of contract‑‑‑Damages whether adequate compensation‑‑‑Agreement between the parties was executed whereby the plaintiff agreed to purchase the specified quantity of fertilizer bags ‑‑‑Plaintiff failed to deposit the entire sale consideration in advance resultantly the defendant refused to deliver the goods to the plaintiff ‑‑Plea raised by the plaintiff was that as time was not essence of the contract, therefore, the defendant could not withhold the delivery of the goods and the same were to be delivered to the plaintiff‑‑‑Validity‑‑‑Where no time was fared for performance of the contract the same should be performed within the reasonable time‑‑‑Such was a question of fact and depended on circumstances of each case including in ‑the case of a commercial contract of the sale of goods, usage of the trade, the nature of goods, place and mode of delivery and where the goods were available with the seller‑‑‑Suit property, in the present case, was not so unique or one of its kind so as to give a right to the plaintiff for specific performance‑‑‑Damages were adequate compensation which the plaintiff could establish when the matter went to trial‑‑‑High Court declined interim injunction restraining the defendant from disposing of the suit property to anyone else‑‑‑Application was dismissed in circumstances.

Bodriprasad v. The State AIR 1966 SC 58; Peayre Lal Kishan Prasad v. Diwan Singh Ganeshi Lal AIR 1930 All. 661; Messrs Araq Ltd. v. Messrs Muhammad Ismail Muhammad Ashraf PLD 1968 Kar. 686; Punjab Province v. Muhammad Sadiq PLD 1960 (W.P.) Lah. 1099; Ghulam Mustafa v. Officer On Special Duty, Federal Land Commission 1984 CLC 824; Messrs Merkurria Sucden v. The Rice Export Corporation of Pakistan 1993 CLC 714; Saifuddin Khan v. Pak Suzuki Motor Company Limited 1997 CLC 302; Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon 1994 SCMR 2189 and Pakistan Railways v. Ittefaq Foundaries (Pvt.) (Ltd.) 1990 SCMR 355 distinguished.

D.B. Walker & Co. v. Noor Elahi PLD 1974 Kar. 50 ref, (b) Sale of Goods Act (III of 1930)‑‑‑--

‑‑‑‑S.20‑‑‑Unconditional contract, revoking of‑‑‑Prior notice‑‑­Requirement‑‑‑Where in commercial contract for the sale of specific goods, no time is fixed for performance and the contract is not performed by a party within a reasonable time the other party is not bound to give prior notice to perform the contract within a specific time before treating the contract as revoked and cancelled.

Binda Prasad Kishori Saran's case AIR 1929 PC 195 ref.

(c) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.62‑‑‑Novation of contract‑‑‑Essential features ‑‑‑Novation is not the mere dissimilarity of the terms of the old contract and the new one but it is supersession of the old by new one‑‑Before there can be any novation under S.62 of the Contract Act, 1872, there should be actual substitution of the old contract by the new one and consequently till the second contract becomes operative the old contract would continue.

H.B.L. v. Sarmast Cooking Oil Ltd. 2000 CLC 1502; Industrija Masina Traktora v. Bank of Oman Ltd. 1992 MLD 2245; Muhammad Umer v. Zakaria Adamji Charitable Corporation 1998 MLD 1131 and Muhammad Amin v. Star Oil and Ice Mills PLD 1973 Kar. 408 ref.

Altaf Hussain for Plaintiff.

Ziauddin Nasir, Standing Counsel for Defendants.

2002 C L D 624

[Karachi]

Before Mushir Alam, J

Mst. SURIYA WASEEM USMANI and 9 others‑‑‑Plaintiffs

Versus

L & M INIERNATIONAL (PVT.) LTD.

and another‑‑‑Defendants

Suit No.519 and Civil Miscellaneous Applications Nos.3101, 3109, 8112 and 8113 of 1997, decided on 1st October, 2001.

(a) Civil Procedure Code (V of 1908)‑---

‑‑‑‑O. XXXVII, R.2‑‑‑Arbitration Act (X of 1940), Ss.23 & 34‑‑­Summary suit‑‑‑Reference to arbitrator‑‑‑Application under S.34 of the Arbitration Act, 1940, was filed during the proceedings of suit under O.XXXVII R.2, C.P.C.‑‑‑Validity‑‑‑Where suit was based on promissory note for the recovery of amount claimed against defendant in summary manner, no dispute between the parties could be assumed which could be referred to arbitration in terms of the agreement between the parties‑‑‑High Court declined to stay the suit ‑‑Application was dismissed in circumstances.

Cotton Export Corporation of Pakistan (Pvt.) Ltd. v. Asif Cotton Ginners 1995 CLC 1024 and Pioneer Cable Limited v. Sadi Cement 1999 CLC 1841 ref.

(b) Administration Justice‑---

‑‑‑‑ Act of the Court should not prejudice anyone‑‑‑Court, in exercise of its inherent power, in order to foster the cause of justice can treat one type of proceedings as another type of proceedings, and even wrong quotation of provision of law is not considered impediment in dispensation of justice.

(c) Civil Procedure Code (V of 1908)‑‑--

‑‑‑‑O.XXXVII, R.3 & S.139‑‑‑Application for leave to defend‑‑‑Form of application‑‑‑Filing of written statement instead of application for leave to defend‑‑‑Validity‑‑‑No form of application seeking leave to defend was prescribed under O. NXXVH, R.3, C.P.C. all that was required under law was that the accompanying affidavit must disclose such facts as would make it incumbent on the holder of an instrument to prove consideration or such other facts as Court might deem sufficient to support the application‑‑­Affidavit, under the Civil Procedure Code, 1908, was required to be on oath as provided in S.139, C.P.C.‑‑‑Written statement was to be filed within. 10 days from the date of service and the same had to disclose some defense for whatever worth it might be, and its contents should also be verified on oath‑‑‑Such written statement was treated as application for leave to defend.

Muhammad Saleem v. Ashfaq Khan 1989 C L C 1883 and Samina Sohail v. Humaid Naseer Al‑Owais 1989 CLC 1949 ref.

(d) Civil Procedure Code N of 1908)‑----

‑‑‑‑O.XXXVII, R.3‑‑‑Limitation Act (IX of 1908), S.5‑‑‑Application for leave to defend ‑‑‑Condonation of delay‑‑‑Instead of filing of application for leave to defend, written statement was filed within the period of limitation, the same disclosed some defence and was on oath as prescribed for leave to defend‑‑‑Application for condonation of delay was filed and no counter‑affidavit had been filed by the plaintiff since over two years to rebut the facts stated therein by the defendant‑‑‑Application for condonation of delay was allowed in circumstances.

Lachman Das v. Sarvanand 1995 SCMR 435; N.‑W.F.P. Government v. Abdul Ghafoor Khan PLD 1993 SC 418; Imtiaz Ahmed v. Ghulam Ali PLD 1963 SC 382 and Manager, J&K State Property v. Khuda Yar PLD 1975 SC 678 ref.

(e) Civil Procedure Code (V of 1908)‑‑

‑‑‑‑O. XXXVII, R.3‑‑‑Application for leave to defend‑‑‑Plausible defence‑‑‑Dispute was whether a cheque issued by the defendant was in lieu of two dishonored cheques subject matter of the suit or in fact in part settlement of dues claimed by the plaintiff‑‑­Validity‑‑‑Such controversy could only be decided at trial‑‑‑Plea set up made a plausible defence which needed to be thoroughly examined‑‑‑Leave to defend was allowed in circumstances.

Fine Textile Mills Limited v. Haji Urner P L D 1963 SC 163 and Abdul Rauf Ghani v. Kishwar Sultana 1995 SCMR 925 ref.

(f) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXVII, R.2(1)‑‑‑Summary suit‑‑‑Cheque, dishonouring of‑‑­Proceedings against Bank‑‑‑Allegations against the Bank was merely dishonouring of the cheque subject‑matter of the suit on account of stoppage of payment by the drawer whereas the cheques were not issued by the defendant‑Bank ‑‑‑Validity‑‑­Where the claim in the suit was based on bill of exchange, hundi, promissory note or instrument drawn by the Bank as required under O.XXXVII, R.2(1), C.P.C., the same was a condition precedent for bringing a suit under summary chapter against a person who was drawer of instrument mentioned in O.XXXVII, R.2(1), C.P.C.‑‑‑--When the claim in suit against some of the defendants was based on negotiable instrument and against other on guarantee or indemnity or otherwise, then it is permissible to entertain and decide the suit against drawer of instrument under the provisions of O.XXXVII, C.P.C. and to proceed under normal procedure against the other defendant who was not privy to such instrument

Mst. Khatija Bai and another v. Muslim Commercial Bank PLD 1978 SC 96 and Syed Sarwar Hussain Zaidi v. Abdul Hameed 1999 MLD 2931 ref.

(g) Negotiable Instruments Act (XXVI of 1881)‑‑---

‑‑‑‑S. 122‑A‑‑‑Banker and customer, relationship of‑‑‑By issuing cheques, drawer in fact issues command and authorizes the drawee bank to pay the amount specified therein to the holder in due course, when presented for payment ‑‑‑Drawee Bank under law is obligated and duty bound to pay and honour such cheque drawn on it when presented within reasonable time, for payment‑‑‑Such authority and duty to pay cheque is always subject to command and dictate of the drawer who may countermand and revoke the same any time before the authority to pay is exercised.

(h) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXVII, Rr.2 & 3‑‑‑Negotiable Instruments Act ()OM of 1881), S.30‑‑‑Summary suit ‑‑Dishonouring of cheque‑‑­Proceedings against drawer and drawee ‑‑‑Validity‑‑‑Suit under the summary chapter, could only be filed against the drawer of an instrument mentioned in O.XXXVII, R.2(l), C.P.C. and not against any other person or drawee thereof who was merely answerable and accountable to the drawer or endorsee thereof, that too, only to the extent of the fund that might be in his hands‑‑‑Where before presentation of such instrument drawee had received any instruction to stop the payment, then wider the provisions of S.30 of the Negotiable Instruments Act, 1881, drawee was not obliged to honour such instrument in the hand of the third party though the drawer himself might be liable for any consequence arising out of such dishonour or refusal to pay by the drawee ‑‑‑Cheque in the present case was dishonoured by the Bank on the instructions of the defendant, therefore, the suit against the Bank was wrongly proceeding under the provisions of O.XXXVII, C.P.C.‑‑‑High Court directed that the suit against the Bank be continued under normal procedure‑‑‑Bank was not required to file application for leave to defend the suit in circumstances.

S.M. Aqil Fikree v. Muhammad Qamarzaman PLD 1982 Kar. 745; Fine Textile Mills Limited v. Haji Omer PLD 163 SC 163 and Jag Givan Mavaji Vithalani v. Ranchhoddas Meghji A I R 1954 SC 554 ref.

Masood Ahmed Khan for Plaintiffs.

M.L. Shahani and Mohsin Tayabaly for Defendants

2002 C L D 643

[Karachi]

Before Anwar Mansoor Khan, J

N.D. LEASING CORPORATION‑‑‑Plaintiff

Versus

NATIONAL FIBERS LTD.‑‑‑Respondent

Suit No.B‑49 of 2000, decided on 7th September, 2001.

(a) Contract Act (1X of 1872)‑‑‑

‑‑‑‑Ss. 133, 134 & 135‑‑‑Surety, discharge of, his liability‑‑­Principles‑‑‑Where a variance in contract is made without the consent of surety, under 5.133 of the Contract Act, 1872, such variance discharges the surety in respect of transaction subsequent to the date of the variance‑‑‑Surety is discharged under 5.134 of the Contract Act, 1872 from any contract between creditors and principal‑debtors by which principal‑debtor is released or by any act or omission by the creditor, the legal consequences of which is the discharge of principal‑debtor‑‑­Where creditor and principal‑debtor make a composition with, or where debtor promises to give time to the principal‑debtor the surety stands discharged under the provisions of S.135 of the Contract Act, 1872.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S. 9‑‑‑Contract Act (1X of 1872), Ss. 133, 134 & 135‑‑‑Civil Procedure Code (V of 1908), O.XXIII, R.I‑‑‑Recovery of Bank loan‑‑‑Filing of fresh suit on same cause of action‑‑‑Proceedings against guarantors‑‑‑Plea of discharge of surety from the liability on the ground of compromise between principal‑debtor and the financial institution‑‑‑Suit for the recovery of Bank loan was withdrawn as a consequence of the agreement between the financial institution and the principal‑borrower without reference being made to the guarantors‑--‑Principal‑borrower had neither made any payment nor any orders were given for making payment in future‑‑‑Financial institution instituted another suit for the recovery of loan impleading the guarantors also‑‑­Validity‑‑‑When the agreement was entered into and referred to in the application under O.XXIII RA, C.P.C., the financial institution could not be allowed to revert to the original position, by saying that they reserved to file afresh suit‑‑‑Fresh suit would not be on the original cause, but on the subsequent cause‑‑­Guarantors in the present case, could not be made liable on such account as the surety stood discharged when the parties had entered into a compromise‑‑‑Suit was dismissed against the guarantors in circumstances.

Halsbury's Laws of England, Vol. 18, 2nd Edn.; Federation of Pakistan v. National Bank of Pakistan 1981 CLC 847; Zia Farhat Awan v. Islamic Republic of Pakistan 1993 CLC 365 and Pirthi Singh v. Ram Charan Aggarwal AIR 1944 Lah. 428 ref.

A.H. Mirza for Plaintiff.

Ms. Sadaf Yousaf for Defendants.

2002 C L D 668

[Karachi]

Before Shabbir Ahmed, J

HABIB BANK LIMITED‑‑‑Petitioner

Versus

Messrs AHMED FOOD INDUSTRIES WE) LTD. and 3 others‑‑‑Respondents

Suit No.B‑104 and Civil Miscellaneous Applications Nos. No.6982 of 2000 and 7833 of 2001, decided on 1st January, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑

‑‑‑‑S.10‑‑‑Leave to defend‑‑‑Parties agreed to appointment of Chartered Accountant/ Commissioner to audit the account maintained by defendant with plaintiff‑Bank for the purpose of audit and with finding as to the liability of the defendant‑‑‑Court directed the Auditor/Commissioner to submit his report within specified period after auditing the account and liability of the defendant in respect of current finance and running finance.

Hamza I. Ali for Appellant.

Salam Salaam Ansari for Respondents.

2002 C L D 671

[Karachi]

Before Zia Perwez, J

MUHAMMAD AMIN AND MUHAMMAD BASHIR LTD. ‑‑‑Plaintiff

Versus

PAS + R and others‑‑‑Defendants

Suit No.470 and Civil Miscellaneous No.6221 of 1999, decided on 10th December, 2001.

(a) Arbitration Act (X of 1940)‑‑

‑‑‑‑S. 34‑‑‑Stay of proceedings for reference of dispute to arbitration in terms of arbitration agreement‑‑‑Exercise of discretion by Court‑‑‑Subject to provision of law, Court in its discretion can stay suits and can exercise its jurisdiction to entertain suits for adjudication of claims of parties containing arbitration clause and can also consider whether to exercise such discretion in any particular case or not‑‑‑Such exercise of discretion should be judicious, reasonable and after taking into consideration all the facts and circumstances of the case.

Hitachi Limited v. Rupali Polyester 1998 SCMR 1618 and Messrs Eckhardt & Co. v. Muhammad Hanif PLD 1993 SC 42 rel.

(b) Arbitration Act (X of 1940)‑‑

‑‑‑‑S. 34‑‑‑Stay of proceedings for referring the dispute to arbitration in terms of agreement containing foreign arbitration clause‑‑‑Exercise of discretion by Court‑‑‑Factors to be considered‑‑‑While exercising discretion in relation to such agreement, facts to be taken into consideration by Court would be as to in which country evidence was situated or readily available, balance of inconvenience to the party causing denial of justice to him or that it would be unfair to stay proceedings‑‑­Where contract work was carried out in Pakistan, entire evidence would be readily available in Pakistan, and thus, it would be most inconvenient to carry the same to foreign country alongwith witnesses etc.

Hitachi Limited v. Rupali Polyester 1998 SCMR 1618 and Messrs Eckhardt & Co. v. Muhammad Hanif PLD 1993 SC 42 rel.

(c) Arbitration Act (X of 1940)‑‑

‑‑‑‑S. 34‑‑‑Stay of proceedings for reference of dispute to arbitration‑‑‑Suit could not be allowed to be stayed in respect of one defendant and to proceed in respect of other defendant, who was not party to arbitration agreement‑‑‑Where all the parties to suit were not parties to such agreement; Court would be reluctant to substitute any term in agreement without consent of the parties.

Hitachi Limited v. Rupali Polyester 1998 SCMR 1618 and Messrs Eckhardt & Co. v. Muhammad Hanif PLD 1993 SC 42 rel.

(d) Arbitration Act (X of 1940)‑‑

‑‑‑‑S. 34‑‑‑Stay of suit for referring the dispute to arbitration as per terms of agreement containing foreign arbitration clause‑‑­Plaintiffs entered into .a contract with defendant at Muscat (Oman) for sale of rice and furnished their performance bond‑‑­Pre‑shipment inspection of goods was done at Karachi by representative of defendant, who approved the same for shipment‑‑‑Defendant later on alleged that goods shipped were not in conformity with specification and threatened the encashment of performance bond, over which plaintiff ff filed suit‑‑Defendant prayed for stay of suit and reference of dispute to arbitration‑‑‑Validity‑‑‑Keeping in view the facts, i.e. the role of Inspectors, the country where evidence ums readily available, balance of inconvenience to the parties causing denial of justice to them coupled with the fact that shipment had to be made from Pakistan, conflicting claims between the parties, the suit involving prayers against other defendants not party to arbitration agreement, High Court held that the suit could be proceeded with at Karachi.

Md. Esack v. Raja Mian and another PLD 1969 Dacca 719; Pakistan International Airlines Corporation v. Messrs Pak Saaf Dry Cleaners PLD 1981 SC 553; Island Textile Mills Ltd., Karachi v. Techno-expert and another 1979 CLC 307; Danish Brothers Limited and others v. Cotton Export Corporation of Pakistan (Pvt.) Limited 1994 MLD 2227; Messrs Ghulam Qadir & Co. v. Government of Pakistan PLD 1962 (W.P.) Lah. 948; M.A. Chowdhury v. Messrs Mitsui O.S.K. Lines Ltd. and 3 others PLD 1970 SC 373; Akbar Cotton Mills Ltd. v. Messrs Ves/Ojuanojo Objedinenije Tech/Amesh Export and another 1984 CLC 1605; G.M. Pfaff A.G. v. Sartaj Engineering Co. Ltd., Lahore and 3 others PLD 1970 Lah.184 and The Hub Power Co. v. WAPDA 1999 CLC 1320 ref.

Urdu Typing 688

(e) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O. XXXIX, Rr.1 & 2‑‑‑Specific Relief Act (I of 1877), S.54‑‑­ Interim injunction for restraining the encashment of performance bond‑‑‑Plaints; Plaintiffs had pleaded breach of contract by defendant for not establishing a letter of credit in conformity with the conditions of contract for sale of rice and failure on their part to amend such letter so as to bring it in conformity with terms of contract‑‑­ Defendant had claimed breach of contract by plaintiff and shipment of consignment not conforming to specification‑‑­ Question of encashment of performance bond, under such circumstances, could be determined only after liability was prima facie fixed on defaulting party on the basis of evidence‑‑‑Till such time as such prima facie determination was made, it would not be just and proper to allow its encashment as the encashment depended upon the determination of default.

(f) Contract‑--

--‑"Performance Bond" and "Bank Guarantee"‑‑‑Distinction Connotation‑‑‑Bank Guarantee is usually provided in cases, where certain amount or benefit is received against cash payment due on the happening of any specific event, for example, payment of mobilization advance to contractors against their furnishing of Bank Guarantee‑‑‑Purpose and object of Performance Bond cannot be equated with Bank Guarantee‑‑­Performance Bond is distinct/different from a Bank Guarantee and is covered by the conditions governing the contract coupled with the facts of each particular case.

Muhammad Ali Sayeed and Yawar Farooqui for Plaintiff.

Habib‑ur‑Rehman for Defendant No. 1.

Zubir gureshi for Defendant No.2.

Arshad Tayebaly for Defendant No.3.

Date of hearing: 25th May, 2001.

2002 C L D 689

[Karachi]

Before Shabbir Ahmed, J

ALLIED BANK OF PAKISTAN LTD. ‑‑‑Plaintiff

versus

Messrs TAWAKKAL GARMENT INDUSTRIES LTD. and others‑‑‑Defendants

Suit No. 1641 of 1998, decide don 14th May, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (RV of 1997)‑--

‑‑‑‑S. 12‑‑‑Scope of S.12, Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Scope of S.12 was confined to satisfaction of the Court that defendant was prevented by sufficient cause from making an application that summons was not duly served, provided application, under S.12 was filed within 21 days from the date of knowledge.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑-

‑‑‑‑Ss. 9(4), 12 & 21‑‑‑Civil Procedure Code (V of 1908), S.12 (2)‑‑­Suit for recovery of loan‑‑‑Ex parte decree, setting aside of‑‑­Provision of S.12(2), C.P.C.‑‑ Applicability‑‑‑Provisions of S.12(2), C.P.C. could be pressed into service in Banking cases, but it required examination as to whether grounds were available or not to press into service S.12(2), C.P.C.‑‑‑Mere falsity of claim to the knowledge of person to forward claim, could not be a ground for setting aside decree on ground 'of fraud‑‑‑If the claim was false it would be a false representation made on Court, but this could not by itself be a ground for setting aside decree because if such ground was accepted there would be no end to the litigation for every decree which would not proceed on some legal ground alone would be liable to be challenged on ground that a party had deliberately put forward an untrue case‑‑‑Provisions of S.12(2), C.P.C. would apply if fraud or misrepresentation was alleged during the proceeding of suit in Court and not to anything outside the Court.

Emirates Bank International v. Messrs Usman Brothers PLD 1998 Kar. 338; Gold Store International v. Muslim Commercial Bank 2000 MLD 421; Mian Muneer Ahmed v. United Bank Ltd. PLD 1998 Kar. 278; Tawakkal Export Corporation and others v. Muslim Commercial Bank and another 1997 CLC 1342; Lal Din and another v. Muhammad Ibrahim 1993 SCMR 710 and Begum Anwari Khanum v. Messrs Passcon (Pvt.) Ltd. 1993 MLD 1555 ref.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑--

‑‑‑‑Ss. 9(4) & 12‑‑‑Civil Procedure Code (V of 1908), O. V, R. 20‑‑­Suit for recovery of amount‑‑‑Mode of service of summons‑‑­Deeming effect of service of summons by publication under O. V, R. 20, C.P.C. would be that once a proper publication was made in newspaper which satisfied requirement of law, presumption would arise that service thereby was effected on defendant‑‑‑For such service to qualify for necessary presumption requirement of declaration of publication sufficient to carrying knowledge to defendant, should be met‑‑‑Where presumption of effectiveness of service through publication arose a defendant, upon appearance, could show that public notice did not come to his notice‑‑­Defendant being incapacitated and publication of summon did not come to her knowledge due to her ailment‑‑‑Defendant having shown sufficient cause for her non‑appearance judgment and decree were set aside against her only.

Muzafarul Haq v. Muslim Commercial Bank PLD 1993 Lah.706 and United Bank v. Mohabali Trading PLD 1994 Kar.275 ref.

Bashir Ahmed Khan for Plaintiff.

Maqbool Baqar for Defendants.

Date of hearing: 14th May, 2001.

2002 C L D 696

[Karachi]

Before Zia Perwez, J

UNITED BANK LTD. ‑‑‑Appellant

versus

Messrs SHAIKH RAYON SILK MILLS LTD. ‑‑‑Respondent

Ex. 123 of 1999, decided on 29th November, 2001.

(a) Civil Procedure Code (V of 1908)‑--

‑‑‑‑0. XI O. V, R. 13‑‑‑Transfer of Property Act (IV of 1882), S.57‑‑­Sindh Urban Immovable Property Tax Act (V of 1958), S.16(4)‑‑­Companies Ordinance (XLVII of 1984), S.321‑‑‑Disbursement of proceeds of property auctioned by Official Assignee in pursuance of a decree‑‑‑Inter se priorities amongst mortgagee, Excise and Taxation Department, Electricity Supply Corporation and Water and Sewerage Board‑‑‑Basis‑‑‑Contention of Official Assignee was that property was sold in pursuance of the purchaser's offer that such sale would be free from all charges and dues, thus, contract between Official Assignee and, purchaser forming such terms had to be abided‑‑‑Validity‑‑‑Agreement made by Court for the purpose of sale was binding, but disbursement to creditors would be made in accordance with the priority of their claims in accordance with specific provisions of law‑‑‑Permission granted by Court for sale of properties also mentioned "taxes etc. "‑‑‑Word 'etc." would attract such payment. which fell within definition of class of taxes on the principle of ejusdem generts ‑‑‑ Amount not falling within such category could not be treated to be at par with taxes‑‑‑Dues of Electric Supply Company and Water and Sewerage Board did not fall within the category of taxes nor any item ancillary or incidental, which were to be paid out of the balance amount, if available after satisfaction of the claim of mortgagor, which had the next priority after payment of dues of taxes‑‑‑Payment of dues to Excise and Taxation Department was allowed‑‑‑Payment made contrary bra the procedure already laid down would, amount to defeat the claim of mortgagee by assigning first priority to the claim of Electric Supply Company and water and, sewerage contrary to the specific provisions of law.

Industrial Development Bank of Pakistan v. Messrs Maida Limited 1994 SCMR 2248 rel.

(b) Civil Procedure Code (V of 1908)‑--

‑‑‑‑O.XXXIV R.13‑‑‑Transfer of Property Act (IV of 1882), S.57‑‑­Disbursement of proceeds of property sold, in pursuance of a decree‑‑‑Priorities‑‑‑Agreement made by the Court for the purpose of sale would be binding, but disbursement to creditors would be made in accordance with the priority of their claims as provided in law.

Industrial Development Bank of Pakistan v. Messrs Maida Limited 1994 SCMR 2248 rel.

Aijaz Ahmed for the Decree‑Holder.

Jafer Sial for the C.I.R.C.

Suhail H.K. Rana, Advocate.

Shakoor Dehalvi, Advocate.

Bashir Memon, Official Assignee

2002 C L D 702

[Karachi]

Before Sabihuddin Ahmed and S. Ali Aslam Jafri; JJ

Messrs BOLAN BANK LIMITED through Attorney‑‑‑Appellant

versus

Messrs AL‑ASLAM INTERNATIONAL through Proprietor and another‑‑‑Respondents

I. A. No.98 and Civil Miscellaneous Applications Nos.1883 of 1999 and 152 of 2001, decided on 17th April, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997‑‑-

‑‑‑‑S.28‑‑‑Civil Procedure Code (V of 1908), S.114 & O.XLVII‑‑­Review‑‑‑Correction of decree‑‑‑Power of Banking Court ‑‑‑Scope‑‑­Power of review is not available to Banking Court in terms of S.28 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Power to correct a clerical mistake or to bring a decree in accordance with the judgment cannot be characterized as a power of review available to a Civil Court under S.114 & OXLVII, C.P.C.

(b) Act of court‑‑‑

Mistake of Court‑‑‑Effect‑‑‑Mistake of Court should not prejudice a party.

(c) Transfer of Property Act (IV of 1882)‑‑‑

‑‑‑‑‑S.58‑‑‑Mortgage‑‑‑Mortgagor having no title in the property mortgaged‑‑‑Effect‑‑‑No mortgage can be created in respect of property the title whereof does not vest in the mortgagor or the mortgagor does not have any explicit authority to create a charge upon such property.

V.E.R. M.A.R. Chettyar Firm v. Ma Joo Teen and others AIR 1933 Rang. 299 and Australasia Bank Ltd. v. Faruqui House Building Corporation Ltd. and 2 others PLD 1975 Kar.870 ref.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9 & 28‑‑‑Civil Procedure Code (V of 1908), S.152 & O.XX, R.6‑‑‑Decree against judgment‑debtor‑‑‑Correction of clerical mistake‑‑‑Dismissal of suit against mortgagor‑‑‑Decree included the property owned by the mortgagor‑‑‑Application was filed for the correction of the decree‑‑‑Banking Court allowed the application and the decree was corrected whereby the property was excluded from the decree‑‑‑Contention of the Bank was that no review of decree could be made by the Banking Court‑‑­Validity‑‑‑Dismissal of the Bank's suit against the mortgagor in absence of memorandum of deposit of title deed being signed by the mortgagor was unexceptionable‑‑‑Borrower could not create charge upon property of some other person‑‑‑High Court took serious note of the fact that the money was advanced by the Bank to the borrower without obtaining adequate security and such recklessness on the part of the Bank officials possibly acting in collusion with borrowers, could not be provided shelter through protracted legal proceedings or by taking advantage of technical mistake‑‑‑High Court directed the President of the Bank to take appropriate action against the officials responsible for the act‑‑‑Appeal was dismissed in limine.

Rizwan Ahmad Siddiqui for Appellant.

Syed Jamil Ahmad for Respondents.

2002 C L D 723

[Karachi]

Before Saiyed Saeed Ashhad, C.J and Mushir Alam, J.

Mrs. ROSHAN BANG‑‑‑Appellant

versus

ALLIED BANK OF PAKISTAN LIMITED and 3 others‑‑‑‑Respondents

First Appeal No. 115 of 1998, decided on 13th February, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 21‑‑‑Recovery of Bank loan-‑‑Decree against mortgagor and guarantor‑‑‑Attorney of the mortgagor and guarantor had executed sale‑deed in favour of his son prior to the execution of guarantee‑‑‑Banking Court decreed the suit in favour of the Bank‑‑‑Contention of the appellant, who was mortgagor and the guarantor, was that the property was not available for mortgage‑‑‑Transferee of the suit property did not question the judgment and decree‑‑‑Validity‑‑‑Where the appellant had not questioned or disputed the execution of the guarantee, no exception could be taken to the judgment and decree passed against the borrower‑‑‑High Court declined to interfere with the judgment and decree passed by the Banking Court‑‑‑Appeal was dismissed in circumstances.

Saalim Salam Ansari for Appellant.

Rizwan Ahmed Siddiqui for Respondents.

Date of hearing: 10th January, 2002.

2002 C L D 749

[Karachi]

Before Shabbir Ahmed, J

SUNSHINE ENTERPRISES (PVT.) LIMITED and another‑‑‑Applicants

versus

Messrs WEST PAKISTAN TANK TERMINAL LIMITED and 5 others‑‑‑Defendants

Judicial Miscellaneous No.59 of 1999, heard on 18th September, 2001.

Transfer of Property Act (IV of 1882‑‑-

‑‑‑‑S.53‑A‑‑‑Civil Procedure Code (V of 1908), S.12(2)‑‑‑Decree, setting aside of‑‑‑Plea of misrepresentation and collusion‑‑­Protection of S. 53‑A of the Transfer of Property Act, 1882‑‑­Scope‑‑‑Applicant alleged to have purchased the suit property from the borrower and claimed that the borrower and the Bank had collusively got the decree froth the Banking Court wherein the property was declared to be mortgaged with the Bank‑‑­Applicant claimed protection of S.53‑A of the Transfer of Property Act, 1882‑‑‑Validity‑‑‑Suit property was under mortgage with the Bank by deposit of title‑deed‑‑‑Suit was filed much before agreement between the applicant and the borrower wherein liability of the Bank was acknowledged by the applicant itself‑‑­Person seeking protection in terms of S.53 A of the Transfer of Property Act, 1882, had to show that he had performed his part of contract and was ready and willing to perform the remaining part of contract‑‑‑Where the property was mortgaged with the Bank and the applicant had not liquidated the liability of the Bank, the protection under S. 53‑A of the Transfer of Property Act, 1882, was not available to it and the applicant could not claim that the decree was obtained by misrepresentation or by collusion‑‑‑Mortgage would go with the property in spite of its alienation to the third party‑‑‑High Court directed the applicant to make payment of the decretal amount and in case of its failure the Official Assignee could proceed with the sale of the property‑‑­Application was dismissed accordingly.

Mst. Sadat Parveen v. Hafiz Muhammad Rafiq 1998 MLD 2602; Akbar Ali v. ~and another PLD 1997 Lah. 709; Tehmina Bashir v. Muhamrhad Rauf 1995 CLC 973 and Habib Bank Ltd. v. Messrs Ajma Corporation and others 2000 CLC 1425 ref.

Abid Zuberi for Applicant.

Rizwan Ahmed Siddiqi for Plaintiff.

Noorullah A. Manji for Defendant.

Date of hearing: 18th September, 2001.

2002 C L D 767

[Karachi]

Before Saiyed Saeed Ashhad, C.J. and Mushir Alam, J

Mst. ASEFA AFZAL and 3 others‑‑‑Appellants

Messrs JOURNALIST PUBLICATIONS (PVT.) LIMITED and 4 others‑‑‑Respondents

High Court Appeal No.20 of 1997, heard on 17th January, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.305 & 306‑‑‑Law Reforms Ordinance (XII of 1972), S.3‑‑­Winding‑up of Company‑‑‑Procedure‑‑‑Company unable to pay its debts‑‑‑Effect‑‑‑For bringing a winding‑up petition on such ground, creditor has to show that the company is indebted in a sum exceeding one per cent. of its paid‑up capital or Rs. 50, 000 whichever is less and the debt has not been cleared despite service of 30 days' notice upon the company‑‑‑Company is deemed unable to pay its debt in terms of S.306 of the Companies Ordinance, 1984, where a creditor has served a notice on the company and has made a demand under his hand requiring the company to pay the same and if the company for 30 days thereafter neglects to pays the amount or to secure or compound it to the reasonable satisfaction of the creditor‑‑‑Unless the statutory demand as, envisaged under S.306 of the Companies Ordinance, 1984, is made, neglect of the company to pay the debt cannot be made basis of presumption that the company is unable to pay its debts‑‑‑Petitioner, in the present case, had not been able to prove failure of the company to pay its debts ‑‑‑Intra‑Court appeal was dismissed in circumstances.

Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 and Messrs Platinum Insurance Company Limited v. Daewoo Corporation, Sheikhupura through Director, Administration and Finance PLD 1999 SC 1 ref.

(b) Companies Ordinance.(XLVII of 1984‑‑

‑‑‑‑Ss.305 & 306‑‑‑Winding‑up of company‑‑‑Plea based on' discrepancies in income‑tax returns‑‑‑Validity‑‑‑Such plea could be raised only before the Competent Authority.

Aziz Khan for Appellants.

Rizwan Ahmed Siddiqui for Respondents.

Date of hearing: 17th January, 2002.

2002 C L D 773

[Karachi]

Before Zahid Kurban Alavi and Wahid Bux Brohi, JJ

PAKISTAN INDUSTRIAL AND INTELLECTUAL PROPERTY RIGHTS ASSOCIATION "PIPRA" through Home Secretary and 2 others‑‑‑Petitioners

Versus

SECRETARY, MINISTRY OF COMMERCE, GOVERNMENT OF PAKISTAN, ISLAMABAD and another‑‑‑Respondents

Civil Petition No. 110 and Miscellaneous Applications Nos. 340, 584 and 862 of 2001, decided on 22nd March, 2001.

Trade Marks Act (V of 1940)‑

‑‑‑‑S.84‑‑‑General Clauses Act (X of 1897), S‑23 ‑‑‑ S.R.O. No.575(1)/2000, dated 15‑8‑2000‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition ‑‑‑Vires of S.R.O. No.575/ 1 of 2000, dated 15‑8‑2000‑‑‑Failure to publish in official Gazette proposed amendment in the Revised Trade Marks Rules‑‑­Effect‑‑Relevant notification was not issued strictly in consonance with S.84(1) of the Trade Marks Act,1940‑‑‑Where new rules alongwith the fee schedule were not announced after soliciting objections/ view points of public then notification would be deemed to have been issued without lawful authority.

Mrs. Navin Merchant for Petitioners.

Khawaja Mansoor for Respondents.

S. Zaki Muhammad, D.A.‑G.

2002 C L D 779

[Karachi]

Before Shabbir Ahmad, J

Messrs MACKINNONS MACKENZAI & CO. OF PAKISTAN (PVT.) LIMITED‑‑‑Applicant

Versus

Messrs THE EASATERN FEDERAL UNION INSURANCE COMPANY LIMITED and 2 others‑‑‑Respondents

Civil Revision Applications Nos. 189 of 1997 and 85 of 1998 decided on 27th September, 2000.

(a) Customs Act (IV of 1988)-‑‑

‑‑‑S. 55(1)(c)‑‑‑Liability of authorized shipping agent ‑‑‑Scope‑‑­Agent's liability under S.55(1)(c) of the Customs Act, 1969, is not independent of his principal‑‑‑Such liability is co‑extensive with the carrier and unless claim is admitted before holding agent liable, the claimant should establish his claim for damages or short delivery against carrier.

Crescent Sugar Mills and Distil and Ltd. v. American Export Isbrandt Inc. PLD 1983 Kar. 29 and Barjorjee Cawasji v. Habib Insurance Co. PLD 1975 Kar. 194 ref.

(b) Companies Ordinance (XLVII of 1984)‑‑

‑‑‑‑S. 316‑‑‑Winding up of company‑‑‑Proceedings against such company‑‑‑Leave of Company Judge‑‑‑Object‑‑‑Principle underlying S.316 of the Companies Ordinance, 1984, is that property remains vested with the Company but the liquidator is the trustee for the benefit of all the creditors, and therefore, one creditor cannot be placed at an advantageous position and permitted to derive the benefit to the exclusion of other creditors.

(c) Civil Procedure Code (V of 1908)‑‑

‑‑‑‑S. 115‑‑‑Revision‑‑‑Concurrent findings of fact by the Courts below‑‑‑Interference by High Court in exercise of revisional jurisdiction‑‑‑Scope‑‑Such jurisdiction cannot be exercised against the concurrent findings of facts unless such findings are the result of wrong appraisal of the evidence‑‑‑Assumption of jurisdiction against the law amounts to exercise of the jurisdiction illegally and erroneously and the same is amenable to the revisional jurisdiction of High Court.

Haji Rehmdil v. The Province of Baluchistan 1999 SCMR 1060 ref.

(d) Companies Ordinance (XLVII of 1984)‑‑

‑‑‑‑S. 316‑‑‑Customs Act (IV of 1969), S.55‑‑‑Civil Procedure Code (V of 1908), S.115‑‑‑Revision‑‑‑Concurrent findings of fact by the Courts below‑‑‑Recovery from company under winding up proceedings‑‑‑Failure to get leave of the Company Judge‑‑‑Dispute was with regard to short delivery of consignment‑‑‑Suit was filed against the carrier as well as shipping agent which was concurrently decreed by both the Courts below against the carrier and the agent‑‑‑Agent raised the plea that as the carrier company was under liquidation, therefore, proceedings without permission of the Company Judge under 5.316 of the Companies Ordinance, 1984, were not maintainable‑‑‑Validity‑‑‑Both the Courts below in the present case, had ignored the provisions of S.316 of the Companies Ordinance, 1984, while proceeding with the case and bypassed the question of law and thus travelled beyond their jurisdiction, which was subject to correction in revisional jurisdiction of High Court‑‑‑Judgment and decree of the Courts below were set aside‑‑‑High Court directed the plaintiffs to take steps to lodge their claims with the Official Liquidators in accordance with law‑‑‑Suit filed by the plaintiff` was dismissed‑‑­Revision was allowed in circumstances.

Muhammad Din v. Muhammad Abdullah PLD 1994 SC 291;Oxford Dictionary; Mujeed Mughari v. State PLD 1996 Kar. 397 and Messrs Pakistan Industrial Chains Co. v. American Orients Lines, New York and others PLD 1968 Kar. 89 ref.

Mansoor A. Shaikh for Applicants.

Naeem Ahmed for Respondent No. 1.

Date of hearing: 5th September, 2000.

2002 C L D 805

[Karachi]

Before Qaisar Ahmad Hamidi, J

STATE BANK OF PAKISTAN‑‑‑Complainant

Versus

Syed AKBAR HUSSAIN RIZVI and others‑‑‑Accused

Criminal Original Miscellaneous No.7 of 1990, decided on 5th May, 1992.

(a) Criminal trial‑‑‑

‑‑‑‑ Mens rea‑Mens rea or a guilty mind was an essential ingredient of a criminal offence and it was sound rule of construction to read element of mens rea in statutory provisions, unless statute expressly or by necessary implication excluded it.

(b) Banking Companies Ordinance (LVII of 1962)‑‑‑

‑‑‑‑Ss.27(1), 43‑A & 83(1‑C)‑‑‑Appreciation of evidence‑‑‑Benefit of doubt‑‑‑Prosecution had failed to prove its case against accused beyond any reasonable doubt‑‑‑Benefit of doubt was extended to accused and they were acquitted from the charge.

Ainuddin Khan for the Complainant.

Naseemuddin Qamar for the Accused.

Date of hearing: 20th April, 1992.

2002 C L D 823

[Karachi]

Before S. Ahmed Sarwana and Muhammad Moosa K Leghari, JJ

BAYER PAKISTAN (PVT.) LTD. and others‑‑‑Petitioners

Versus

BOARD OF REVENUE and others‑‑ ‑Respondents

Civil Petitions Nos.318, 374, 539 and 351 of 1997, decided on 31st December, 2001.

(a) Stamp Act (II of 1899)‑‑‑

‑‑‑‑Preamble‑‑‑Interpretation of provisions of Stamp Act, 1899‑‑‑Scope‑‑‑Stamp Act, 1899 is a fiscal statute and consequently, it must be construed liberally in favour of the citizen and against the Government and any substantial doubt be resolved in favour of the citizen.

(b) Stamp Act (II of 1899)‑‑‑

‑‑‑S.2(14)‑‑‑"Document"‑‑‑Meaning‑‑‑As the term "document" has not been defined in the Stamp Act, 1899, therefore, it has to be given the ordinary dictionary meaning.

Concise Oxford Dictionary, Ninth Edn., 1998, p.398; Chamber's Dictionary, 1994 Edn., p.496 and Black's Law Dictionary, Sixth Edn. ref.

(c) Stamp Act (II of 1899)‑‑‑

‑‑‑‑S.2(14)‑‑‑Term includes' as used in S.2(14), Stamp Act, 1899‑‑‑Effect‑‑‑By use of the termincludes' in S.2(14), the Legislature has extended the meaning of the term `instrument' by including documents which would otherwise ordinarily be not included in the meaning of the term instrument.

(d) Words and phrases‑‑‑

‑‑‑‑"Instrument"‑‑‑Defined.

Stroud's Judicial Dictionary, Fourth Edn., 1971‑72, p.1368 ref.

(e) Stamp Act (II of 1899)‑‑‑

‑‑‑‑S. 2(14)‑‑‑Term instrument'‑‑‑Connotation‑‑‑Terminstrument' as defined in S.2(14) of the Stamp Act, 1899, includes every document by which any right or liability is or purports to be created, transferred, extinguished etc.‑‑­Consequently, the definition does not include those documents by which no right or liability is so created, transferred or extinguished etc.

(f) Interpretation of document‑‑‑

‑‑‑‑ Written instrument relating to a transaction between parties‑‑‑Interpretation‑‑‑For the purpose of determining true nature of such document, one must look at its substance and not at its form.

(g) Stamp Act (II of 1899)‑‑‑

‑‑‑‑S.2(10)‑‑‑Word conveyance'‑‑‑Defined‑‑‑Verb used in the definition of the wordconveyance' is in present tense, therefore, it means that the transfer of the property must take place in the present by virtue of the instrument‑‑­Property in the goods must be transferred by the document itself and it should not be record of a fact which has taken place in the past or a record of a past transaction between two or more parties.

(h) Stamp Act (II of 1899)‑‑‑

‑‑‑‑S.2(10)‑‑‑Conveyance‑‑‑Memorandum of past transaction, whether a conveyance deed‑‑‑Neither a memorandum of a past transaction or a statement confirming that certain property was transferred in the past from one person to another nor a memorandum or an agreement stating that certain property would be transferred in future by executing another document comes within the definition of `conveyance' as defined in the Stamp Act, 1899‑‑‑Only the document whereby the property is in fact transferred by virtue of the instrument itself from some person to another would fall within the definition of conveyance and would be subject to stamp duty as specified in the Stamp Act, 1899.

AIR 1934 All. 201; AIR 1934 Lah. 530; Muhammad Hasham v. Emperor (1932) 139 IC 154 and Thakur Bageshwari Charan Singh v. Thakurain Jagarnath Kuari (1932) 136 IC 798 ref.

(i) Stamp Act (II of 1899)‑‑‑

‑‑‑‑S.2(10)‑‑‑Conveyance‑‑‑Bank loan‑‑‑Agreement of finance on mark‑up basis‑‑‑Such document whether a conveyance deed‑‑‑Parties entered into such agreement whereby the Bank purchased certain movable property from the borrower with an agreement that the latter would buy back the same at the higher price‑‑‑Goods were not specifically described in the agreement but a general description was stated in order to prepare a document to comply with the mode of finance permitted by the State Bank of Pakistan‑‑‑No real sale and purchase of the goods whatsoever was shown in the agreement‑‑‑Such agreement was a paper transaction where no actual sale or purchase or transfer of title or passing of risk in the goods was involved‑‑‑As the Bank took no risk whatsoever, the documents were prepared to comply with the requirements of the State Bank of Pakistan‑‑‑Various documents executed by the parties including the Mark‑up Agreement indicated that the agreement was used as a mode for providing finance to the borrower and the same could not be regarded as a conveyance of property as defined in the Stamp Act, 1899.

(j) Interpretation of. document‑‑‑

‑‑‑‑ Document evidencing conveyance of property‑‑‑Necessary ingredients‑‑‑Such document basically consists of Recitals' which relate to the past history of the property transferred and sets out the facts and the instrument necessary to show the title and the relation of the parties to the subject­-matter of the deed and the introductory recital which explains the motive for the preparation and execution of the deed as such the same is followed byConsideration for the Contract', Acknowledgement of Receipt of Consideration', the Operative Words' which is the spirit of the document, the Description of the property transferred',Exceptions and Reservations, Covenants and Undertakings' by the parties with their signatures and attestation‑‑‑Most important part of the deed isthe operative words' which express the intention of the persons executing the document‑‑‑Such operative words disclose the nature of the transaction‑‑‑Operative word now commonly used is `conveys'.

(k) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.17‑‑‑Stamp Act (11 of 1899), S.2(10)‑‑‑Qanun‑e‑Shahadat (10 of 1984), Art.l7(2)‑‑‑Contract Act (IX of 1872), S.2(e) & (h)‑‑‑Mark‑up agreement between Bank and borrower whether a conveyance deed‑‑‑Since such agreement is signed by one party only, therefore, the same cannot be termed as an agreement which requires the signatures of two parties for it to be enforceable as a contract under the provisions of S.2(e) & (h) of the Contract Act, 1872 at the best it can be regarded only as an acknowledgement or a confirmation of a past transaction signed by the customer‑‑­Alternately if the Mark‑up agreement is signed by both parties, the same would simply be an agreement between the Bank and its customer confirming the terms and conditions agreed by the parties on the basis of which the Bank would provide finance to the customer in one of the modes suggested by the State Bank of Pakistan by BCD Circular No.13, dated 1‑1‑1985 and not a conveyance deed

(l) Stamp Act (II of 1899)‑‑‑

‑‑‑‑Ss.2(14), 40, Arts.5(d) & 40(c)‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.17‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Instrument insufficiently stamped‑‑‑Impounding of the photocopy of original instrument‑‑‑Authorities treated the mark‑up Agreement as a conveyance deed and intended to impound photocopy of the agreement‑‑‑Contention of the Authorities . was that possession of the original instrument was not necessary and if a party had admitted that the copy of the instrument was genuine and from the copy it was evident that it was insufficiently stamped, the Collector was empowered to demand the deficit stamp duty and could impose a penalty for insufficient stamping‑‑‑Validity‑‑‑Contention of the Authorities was not spelt out from the wordings of Ss.2(14) & 40 of the Stamp Act, 1899‑‑‑Photocopy of the original instrument could not be termed as instrument' such meaning would be preposterous and a blatant abuse of the wordinstrument' used in the Stamp Act, 1899‑‑‑There could not be more than one title document of ownership of one property as the original document was the only document which was the instrument of title intended and had come within the‑meaning of the term `instrument'‑‑‑No other document could replace the same‑‑‑Only the original document required to be stamped under the provisions of the Stamp Act, 1899‑‑‑Demand for payment of the alleged deficit stamp duty on a photocopy of the Agreement of Finance was not warranted by the provisions of S.40 of the Stamp Act, 1899‑‑‑Mark‑up agreement was not a conveyance deed as urged by the Authorities but was a photocopy of a document which at the best could be regarded as an acknowledgement or confirmation of a past transaction and was not liable to Stamp duty as a conveyance‑‑‑Order passed by the Authorities was set aside for the property was not chargeable to stamp duty under Art.40(c) but was subject to duty under Art.5(d) of Sched. I of the Stamp Act, 1899‑‑‑Petition was allowed in circumstances.

PLD 1952 BJ 41; AIR 1932 All. 291 AIR 1918 Lah. 354; PLD 1959 Kar. 1; AIR 1958 Raj. 291; PLD 1975 Kar. 861; PLD 2000 SC 2.25; Ameen v. Haji Abdul Sattar and others 1998 CLC 1256; Messrs Mehrban Fabrics (Pvt.) Limited v. Allied Bank of Pakistan PLD 1997 Lah. 654; Concise Oxford Dictionary, Ninth Edn., 1998, p.398; The Chamber's Dictionary, 1994 Edn., p.496; Black's Law Dictionary, Sixth Edn. and The Conveyancer by P.C. Mogha and N.S. Bindra's Conveyancing, 7th Edn., 1993 ref.

(m) Administration of justice‑‑‑

‑‑‑‑Opportunity of hearing‑‑‑Object and scope‑‑‑Requirements of an opportunity of hearing means that the person must be issued a letter/notice informing him of the action proposed to be taken against him and asking him to explain why it should not be done so‑‑‑After service of such notice, it is necessary that an opportunity be provided to the person to whom the show‑cause notice has been issued to appear in person and explain his position verbally or in writing‑‑‑If the person chooses not to appear in person and explain his position or does not send a written response, such person does so at his own risk.

Atta Muhammad Qureshi v. Settlement Commissioner and others PLD 1971 SC 61 ref.

(n) Interpretation of statute‑‑‑

‑‑‑‑ Every word in a statute has to be given its plain and ordinary meaning and due weight must be given to every word used in the Statute.

Ijaz Ahmed, for Petitioner (in C.P. No.D‑318 of Abul Inam for Petitioner (in C.P. No.D‑351 of 1997).

Muhammad Naeem for Petitioner (in C.P. No.D‑374 and C.P. No.539 of 1997).

Abbas Ali, Additional Advocate‑General for Respondents.

Dates of hearing: 10th and 25th April, 2001

2002 C L D 872

[Karachi]

Before Mushir Alam, J

In re: R.R.P. LIMITED AND

NIMIR RESINS LIMITED

J.M. No.24 of 2000, heard on 28th February, 2001.

Companies Ordinance (RLVII of 1984)‑‑---

‑‑‑‑Ss.284, 287 & 288‑‑‑Petition for merger and amalgamation of companies‑‑‑Members of both companies by majority had approved resolution of merger/ amalgamation of both companies and neither employees nor any of the creditors had come forward to oppose scheme of amalgamation‑‑‑Both companies had disclosed their latest financial position‑‑‑Apparently nothing in proposed ‑‑theme ran contrary to Companies Ordinance, 1984‑‑‑Merger/Amalgamation, in circumstances, would be in the interest of shareholders of both the companies, particularly when no material was on record ‑to suggest that merger/ amalgamation of the two companies would be against public interest or in violation of any law-- Amalgamation/merger scheme was sanctioned and as required under S.287 of Companies Ordinance, 1984 orders were passed accordingly.

Agha Zafar Ali for Petitioners.

Date of hearing: 28th February, 2001.

2002 C L D 878

[Karachi]

Before Zahid Kurban Alvi, J

MALHOTRA SHAVING PRODUCTS LIMITED‑‑‑Applicant

Versus

ACCURAY SURGICALS LTD., and another through

Chief Executive/ Managing Director/

Director/ Secretary/ Manager‑‑‑Respondents

Judicial Miscellaneous No.9 of 1998, decided on 20th March, 2000.

(a) Trade Marks Act (V of 1940)‑‑‑

‑‑‑S. 37(1)(a)(b)‑‑‑Taking off a trade mark from register ‑‑‑Pre­ conditions to be established by an aggrieved person are that applicant for registration has obtained registration without any bona fide intention to use the same in relation to the goods and that there has been no bona fide use of the trade mark in relation to those goods by proprietor thereof up to one month before the date of rectification application or a continuous period of five years or so has elapsed during which there has been no bona fide use, thereof‑‑‑Mere non­ user for a period of five years or longer up to a date one month before the application under S.37 of Trade Marks Act, 1940, is sufficient ground for removal of trade mark.

(b) Trade Marks Act (V of 1940)‑‑‑

‑‑‑S. 37‑‑‑Rectification application‑‑‑Proof‑‑‑Applicant must show that he is an aggrieved person; and that the mark that needs to be removed has not been used for the lat 5 years.

In re: Powell T.M. 1 RPC 195; Powell v. Bringham Vinergar Brewery Coy. (The Yorkshire Relish case) (1894) AC 8; Crossly and Coy's Trade Mark 15 RPC 377; National Bell Company v. Metal Goods Manufacturing Company AIR 1971 SC 898 and Chiswick Products Ltd. v. The Registrar of Trade Marks, Karachi PLD 1983 Kar. 423(sic) ref.

(c) Trade Marks Act (V of 1940)‑‑‑

‑‑‑Ss. 37(1)(a)(b), proviso, 46(2) read with Ss. 6, 8 & 14(1)‑‑­Removal of a trade mark from register‑‑‑Aggrieved person‑‑­Applicant adopted in year 1985 in India the mark "Laser" in relation to the goods it was manufacturing, selling and also exporting to Pakistan since 1992‑‑‑Applicant sought removal of similar trade mark obtained by respondents in Pakistan in respect of their goods‑‑‑Respondents conceded non‑use of trade mark in relations to the goods for which it was registered during statutory period, but contended that they had during the relevant period used the trade mark in another class‑‑‑Validity‑‑‑Applicant had not been able to show user of trade mark in Pakistan and non user by respondents for five years‑‑‑Evidence brought on record by applicant was restricted to letters and invoices, which did not pertain to direct import into Pakistan by any party in Pakistan from applicant‑‑‑Applicant themselves admitted that they had adopted the trade mark "Laser" in 1985, but they had failed to show that indeed the mark had been registered in India‑‑‑Applicant's goods had found their way into the market in Pakistan since 1992, but present application had been filed in 1998, whereas application for registration had been made in 1994 before the local Trade Mark Registry‑‑‑Such delay on the part of applicant was unjustified‑‑‑Applicant did not explain such delay in applying for registration of trade mark in Pakistan and making application for rectification‑‑‑Applicant was not an aggrieved person strictosenso‑‑‑Application was dismissed with observations that applicant might apply again, if it was in a position to bring proof.

Cluett, Peabody & Co. Inc. v. Assistant Registrar of T.M. 1991 SCMR 927 and Abdul Aziz v. Seven‑up Co., Karachi and another PLD 1978 Kar. 14 ref.

(c) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.37(1)(a)(b), proviso, 46(2) read with Ss.6, 8 & 14(1)‑‑­Aggrieved person‑‑‑Explained.

In re: Powell T.M. 1 RPC 195; Powell v. Bringham Vinergar Brewery Coy. (The Yorkshire Relish case) (1894) AC 8; Crossly and Coy's Trade Mark 15 RPC 377; National Bell Company v. Metal Goods Manufacturing Company AIR 1971 SC 898; Chiswick Products Ltd. v. The Registrar of Trade Marks, Karachi PLD 1983 Kar. 423(sic); Cluett, Peabody & Co. Inc. v. Assistant Registrar of T.M. 1991 SCMR 927 and Abdul Aziz v. Seven‑up Co., Karachi and another PLD 1978 Kar. 14 ref.

Abdul Hamid Iqbal for Petitioner.

Salim Ghulam Hussain for Respondents.

2002 C L D 890

[Karachi]

Before Shabbir Ahmed, J

SUI SOUTHERN. GAS COMPANY

LTD. ‑‑‑Plaintiff

Versus

STANDARD INSURANCE COMPANY

LTD. ‑‑‑Defendant

Suit No.202 of 1978, decided on 2nd May, 2000.

Contract Act (IX of 1872)‑‑‑

‑‑‑‑S. 128‑‑‑Arbitration Act (X of 1940), Ss. 17 & 20‑‑­Building construction contract‑‑‑Mobilization advance and performance bond‑‑‑Liability of surety Extent‑‑‑Dispute was with regard to recovery of mobilization advance paid by the plaintiff to the contractor‑‑‑Defendant being an insurance company executed advance payment bond whereby he undertook irrevocably and unconditionally to pay forthwith to the plaintiff without reference to the contractor on demand, in case of failure of the contractor to repay the same‑‑‑Plea raised by the defendant was that the contractor had filed a suit under S.20 of the Arbitration Act, 1940, where the dispute had been referred to arbitration, and until the dispute was finally decided and default if any of the contractor and also the amount due from the contractor was ascertained, the defendant could not be made liable for any amount‑‑‑Plaintiff was successful in proving that the contractor had not paid the amount of mobilization advance by producing the award which had been made rule of the Court‑‑‑Validity‑‑‑Where ‑from the judgment making award rule of the Court it was established that the contractor had not repaid the mobilization advance, the defendant was liable to pay the unpaid amount of advance given to the contractor under the mobilization guarantee‑‑‑Plaintiff was entitled to the recovery of the amount claimed‑‑‑Suit was decreed in circumstances.

Messrs Platinum Insurance Company Limited, Karachi through Managing Director v. Daewoo Corporation, Sheikhupura through Director, Administration and Finance PLD 1999 SC 1; Subhankhan Ramijankhan v. Lalkhan Haji Umarkhan AIR 1948 Nag. 123; Radha Kanta Pal v. United Bank of India Ltd. AIR 1955 Cal. 217 and National Construction Ltd. v. Standard Insurance Co. Ltd. 1984 CLC 286 ref.

Messrs Ali Pipe Industries, Faisalabad v. The Universal Insurance Company Ltd. and 2 others PLD 1989 Lah.390; Sargodha Central Cooperative Bank Ltd. and another v. New Hampshire Insurance Co. PLD 1982 Kar.627; Islamic Republic of Pakistan v. Nazar Din Khatak & Sons PLD 1969 Pesh.313; Federation of Pakistan v. Messrs Muhammad Shafi & Sons PLD 1971 Pesh.93; Nathu Mal Ram Das v. D.B. Samp & Co. and others AIR 1932 Lah.169; Gobandhan Das v. Dan Dayal AIR 1932 All. 273 and Pherai v. Pudai Ram AIR 1925 Oudh 502 distinguished..

M. Aslam Butt for Plaintiff.

Abdul Rauf for Defendant.

Dates of hearing: 4th, 11th and 14th April, 2000.

2002 C L D 904

[Karachi]

Before Anwar Mansoor Khan, J

NATIONAL BANK OF PAKISTAN‑‑‑Applicant

versus

Messrs KHAIRPUR TEXTILE MILLS LIMITED and 8 others‑ ‑‑Respondents

Judicial Miscellaneous No.37 of 2001 in Suit No.685 of 1994, heard on 13th September, 2001.

Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S.12(2) & O.XXI, Rr.l, 2‑‑‑Order, setting aside of‑‑‑Plea of fraud and misrepresentation‑‑‑Suit for recovery of three Bank loans was decreed in favour of the Bank‑‑‑One out of the three loans was settled under the 'incentive scheme of the State Bank of Pakistan" and a letter of settlement was issued‑‑‑During the pendency of execution of the decree‑‑­Judgment‑debtor relying on the letter of settlement filed application under O.XXI, Rr.1 & 2, C.P.C. contending that the decree had been satisfied‑‑‑Application under O.XXI, Rr.1 & 2, C.P.C. was allowed and the Executing Court recorded that the decree had been satisfied‑‑‑Plea raised by the decree‑holder was that the judgment‑debtor did not disclose that only one loan was satisfied and other two loans were yet to be paid off, hence the order passed by the Executing Court was obtained by misrepresenting the correct and true facts‑‑‑Validity‑‑‑Such misrepresentation was a fraud played on the Court which led to the passing of the order of satisfaction of decree‑‑‑If such misrepresentation had not been made before the Executing Court, the satisfaction would not have been recorded‑‑‑Such misrepresentation and fraud perpetuated on the Court to obtain orders fell within the scope of S.12(2), C.P.C.‑‑‑Courts were not expected to act in aid of injustice to perpetuate illegalities or put a premium on ill‑gotten gains‑‑‑Dues in the present case in two accounts had not been paid and non­-pointing out of the true facts had resulted in an incorrect decision‑‑‑Fraud had been played on the Court and the facts­had been misrepresentated‑‑‑Order passed by the Executing Court was set aside‑‑‑Application was allowed in circumstances.

Iftikhar Hussain and others v. Hameed Akhtar Niaz 1996 SCMR 1942; Lal Din and another v. Muhammad Ibrahim 1993 SCMR 710; Mst. Izzat and another v. Kadir Bux PLD 1959 Kar.221; Mst. Safia Bibi v. Mst. Aisha Bibi 1982 SCMR 492; Umer Bux and 2 others v. Azim Khan and 12 others 1993 SCMR 374 and Government of Pakistan v. Khalil Ahmed 1994 SCMR 782 distinguished.

Chief Settlement Commissioner, Lahore v. Raja Muhammad Fazil Khan and others PLD 1975 SC 331; Manager, Jammu and Kashmir State Property in Pakistan v. Khuda Yar and another PLD 1975 SC 678 and Messrs Vulcan Company (Pvt.) Ltd., Lahore through Managing Director v. Collector of Customs, Karachi and 3 others PLD 2000 SC 825 rel.

Gulzar Ahmed for Applicant.

Shehenshah Hussain for Respondents Nos. 1 to 8.

Rizwan Ahmed Siddiqui for Respondent No.9.

Date of hearing: 13th September, 2001.

2002 C L D 917

[Karachi]

Before Mushir Alam, J

UNITED BANK LIMITED‑‑‑Plaintiff

versus

Messrs J. TYLOR & CO. Limited‑‑‑Defendant

Suit No.59 of 1964; Civil Miscellaneous Applications Nos.3775 and 3776 of 2001, decided on 4th February, 2002.

(a) Jurisdiction‑‑‑

‑‑‑‑Jurisdiction under special law‑‑‑Scope‑‑‑Where a special law confers exclusive jurisdiction on Special Court or forum created for the purpose then ordinary jurisdiction conferred under the general law would not be available.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S. 7(6)‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 7(6); ‑‑Civil Procedure Code (V of 1908), S.38‑‑‑Execution of decree‑‑‑Dispute, between the parties was with regard to execution of the decree passed by High Court in exercise of its original civil jurisdiction‑‑‑Contention of the decree‑holder was that after the establishment of Banking Courts, the decree was to be executed by the Banking Court established under the special law whereas plea raised by the judgment‑debtor was that it was the, jurisdiction of the Court which lead passed the decree to execute the same‑‑‑Validity—By establishing Banking Court in terms of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, all proceedings including execution of a decree pending in any Court stood transferred or deemed to have been transferred to the Banking Court having jurisdiction‑‑‑Such intention of Legislature was very much clear from tile provision of S.7(6) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, and similar provisions were contained in S.7(6) of the Financial Institution; (Recovery of Finances) Ordinance, 2001 and it was further provided under the Financial Institutions (Recovery of Finances) Ordinance, 2001, that the Banking Court to which proceedings were transferred would proceed from the stage where the proceedings had reached immediately prior to the transfer‑‑‑Contention of judgment‑debtor that High Court would continue to have jurisdiction could not be sustained‑‑‑Proceedings were transferred to the Banking Court presently established under the Financial Institutions (Recovery of Finances) Ordinance, 2001 having jurisdiction in the matter.

Habib Ahmed v. The Hong Kong and Shanghai Banking Company and 5 others 1999 CLC . 1953; Ali Hussain Rajabali and 2 others v. A. Habib Ahmed and others H.C.A. No. 182 of 1998 and Messrs United Bank Ltd. v. Mst. Rehana Raza PLD 1983 Kar.467 ref.

Muhammad Aslam Butt for Plaintiff.

Fazle Ghani Khan for Defendant.

Date of hearing: 21st January, 2002.

2002 C L D 926

[Karachi]

Before Anwar Zaheer Jamali and Mushir Alam, JJ

JAFFER BROTHERS (PVT.) LIMITED‑‑‑Appellant

versus

M.V.`EUROBULKER II' PRESENTLY BERTHED AT MOORINGS IN KARACHI PORT TO BE SERVED through Master‑‑‑Respondent

Admiralty Appeal No.6 of 2001, decided on 26th December, 2001.

(a) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑‑

‑‑‑‑S.4‑‑‑Exercise of Admiralty jurisdiction in rem ‑‑‑Scope‑‑­Admiralty jurisdiction can be invoked against the Ship or vessel if at the time when action is brought majority shares in the ship are beneficially owned by a person against whom action in personam is maintainable.

(b) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑

‑‑‑‑Ss.3 & 4‑‑‑Recovery of damages on breach of charter­-party alone‑‑‑Suit in rem ‑‑‑Maintainability‑‑‑Contention of the plaintiffs was that since they were endorsee of the Bill of Lading duly signed by the Master of vessel, prima facie, it presupposes a contract between the Master on behalf of the vessel owner and the plaintiffs, therefore, the suit was maintainable in rem against the vessel ‑‑‑Validity‑‑­Contention of the plaintiffs was true as it was the principal agreement of affreightment between the Shippers and Master of Vessel, without there being‑ any knowledge of intermediatory Charter‑party ‑‑‑Such proposition was not true in case where tile Bill of Lading obtained by sub­-charterer from the Master of Vessel was issued under time charter‑‑‑Shipper, in the present case, who was also voyage or sub‑charter had endorsed the Bill of Lading in favour of the plaintiffs‑‑‑Where the shipper himself was the charterer then the Bill of Lading in the hands of the charterer was merely a receipt for goods and such receipts, even if endorsed, as in the present case in favour of the consignee it would not change its complexion and would remain a receipt of goods‑‑‑Endorsee in such case would step into shoes of the shipper and would be liable to and entitled for all such obligations and rights in relation to affreightment contract as might be available to the shipper who incidentally in this case was also charterer of the vessel‑‑­Generally where the Bill of Lading was signed by the Master, presumption would be that Bill was owner's Bill‑‑­Such presumption indeed was rebuttable where it was successfully demonstrated or admitted by the plaintiffs that Bill of Lading had been signed by the Master was in fact, on behalf of the charterer was intended to take effect as the charterer Bill‑‑‑High Court in exercise of Admiralty jurisdiction had rightly drawn the conclusion that the vessel could not be attached in an action in rem as the plaintiffs had failed to show that the Time Charters were the owner or beneficially owned majority shares or interest in the respondent vessel itself‑‑‑Appeal was dismissed in circumstances.

Carver on Bills of Lading, First Edn. 2001, paras.4‑33; Scrutton on Charter‑parties and Bills of Lading, Eighteenth Edn., p.56; (1991) 2 Lloyd's Law Rep., The Fewia, 1991, Vo1.2, p.325; PLD 1988 Kar.515; PLD 1993 SC 88 and PLD 1994 SC 894 ref.

M. Shaiq Usmani for Appellant.

Naeem Ahmed for Respondent.

Dates of hearing: 20th and 21st December, 2001.

2002 C L D 933

[Karachi]

Before Muhammad Roshan Essani and S. A. Rabbani, JJ

Messrs QUALITY STEEL WORKS LIMITED and 2 others‑‑‑Applicants

versus

Messrs GULF COMMERCIAL BANK and another‑‑‑Respondents

Criminal Revision No.18 and Miscellaneous Application No.319 of 2001, decided on 12th September, 2001.

Criminal Procedure Code (V of 1898)‑‑‑

‑‑‑‑S.561‑A‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.20(4)‑‑‑Constitution of Pakistan (1973), Art.13‑‑‑Complaint against dishonour of cheque‑‑­Criminal proceedings‑‑‑Quashing of‑‑‑Contention of accused was that statement of complainant having not been recorded by Trial Court immediately upon receipt of the complaint, proceedings against him were hit by S.20(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 as well as Art.l3 of Constitution of Pakistan (1973)‑‑‑Validity‑‑­Contention was repelled because it was not pointed out by accused as to what prejudice was caused to him by non­-examination of the complainant immediately upon receipt of complaint ‑‑‑Pendency of civil suit filed by complainant against accused with regard to recovery of amount which was subject‑matter of criminal case against accused, was no ground for quashing of criminal case as it could not tantamount to double jeopardy‑‑‑If a criminal liability was spelt out from facts and circumstances .of a particular case, accused could be tried upon a criminal charge‑‑‑Quashing of proceedings against` accused in circumstances would tantamount to stifling of proceedings pending before Trial Court, which was not warranted by law‑‑‑Application for quashing of proceedings was dismissed in circumstances.

Mrs. Tahmina Bashir v. Abdul Rauf and another 1995 CLC 973 and United States v. Irwin Halper 490 US 435 ref.

Faisal Khalid Daudpota for Applicants.

Yousuf Ali Saeed for Respondent No. 1.

Khurshid A. Hashmi, Dy. A.‑G. for Respondent No.2.

Date of hearing: 12th September, 2001.

2002 C L D 1045

[Karachi]

Before Shabbir Ahmed, J

UNITED BANK LIMITED‑‑‑Petitioner

versus

Messrs A.I. BROTHERS (PVT.) LIMITED and 5 others‑‑‑Defendants

Suit No. 1445 of 1999 and Civil Miscellaneous Applications Nos. 2243, 2244, 2245, 2246 and 2247 of 2001, heard on 11th April, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑

‑‑‑‑Ss.9, 10 & 12‑‑‑High Court (Lahore) Rules and Orders, Vol. V, Chap.‑3, R.8‑‑‑Sindh Chief Court Rules (O.S.)‑‑‑Ex parte decree, setting aside of‑‑‑Sufficient cause‑‑‑Banking Court on 18‑8‑2000 dismissed defendants' application under S.10, Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997) for non prosecution and decreed the suit on 19‑2‑2001‑‑‑Defendants sought setting aside of ex pane decree and restoration of application on the ground that both defendants and their counsel, who were stationed at Rawalpindi and Islamabad respectively, had not received intimation for hearing of application on 18‑8‑2000 or 19‑I‑2001 and that earlier only intimation notices regarding hearing had been issued ‑‑‑Validity‑‑­Sindh Chief Court Rules (O.S.) were silent about intimation notice to a party or counsel stationed out of Karachi‑‑‑Rule 8 of High. Court (Lahore) Rules and Orders, Vol. V applicable on appellate side provided intimation of pacca date fixed in a case to be sent by registered post (A.D.) to such parties or their counsel not ordinarily resident of Karachi‑‑‑Such practice had been followed constantly on original side of High Court‑‑‑Intimation notice in the present case to defendants' counsel had been issued for those hearing when matter was not adjourned to a fixed date‑‑‑Court had not fixed 18‑8‑2000 for hearing the cause‑‑‑No intimation notice had been issued to defendants or their counsel, when the matter was fixed for final hearing on 19‑1‑2001‑‑‑Non­appearance of counsel was due to non‑issuance of intimation notice of hearing, which was 'sufficient cause" for setting aside an ex parte decree‑‑‑Defendant had gained knowledge of ex pane decree on 21‑3‑2001, when Bank staff visited their project at Karachi‑‑‑Application made on 26‑3‑2001 was within time‑‑­High Court set aside ex parte decree subject to security.

(b) Sindh Chief Court Rules (O.S.)‑‑

‑‑‑‑R.74‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), Ss. 9, 10 & 12‑‑­Defendants in interlocutory application made two prayers for setting aside of ex parte decree and restoration of application filed under S.10 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Validity‑‑‑Rule 74 of Sindh High Court Rules (O.S.,) provided that interlocutory application would contain only one prayer or one series of alternative prayers of the same kind‑‑‑Application contained two prayers, which were contrary to R.74 of Sindh High Court Rules (O.S.)‑‑‑High Court allowed defendants to elect one of the prayers made therein, whereupon they opted for setting aside the ex parte decree.

Ejaz Ahmed for Petitioner.

Saalim Salam Ansari for Defendants.

Date of hearing: 11th April, 2002.

2002 C L D 1054

[Karachi]

Before Muhammad Roshan Essani and Muhammad Mujeebullah Siddiqui, JJ

STATE LIFE INSURANCE CORPORATION---Petitioner

versus

Haji IRTIZA HUSSAIN ZAIDI and others---Respondents

Constitutional Petition No. D-472 of 1992, heard on 13th March, 2002.

(a) Life Insurance (Nationalisation) Order (10 of 1972)----

----Art. 40-B---Civil Procedure Code (V of 1908), O.XXXIV, R.4--­West Pakistan Land Revenue Act (XVII of 1967), S.113--­Constitution of Pakistan (1973), Art. 199---Constitutional petition--­Recovery of dues by State Life Insurance Corporation as arrears of land revenue against a preliminary decree passed under O.XXXIV, R.4, C.P.C. which the judgment-debtor had failed to pay and Revenue Authorities had declined to recover the amount as arrears of land revenue---Validity---Provisions of Art. 40-B of the Life Insurance (Nationalization) Order, 1972 had overriding effect vis-a-vis any other law for the time being in force and it was without prejudice to the rights of the Insurance Corporation to recover its dues in any other manner---Such overriding effect of Art. 40-B was restricted to the manner of enforcing the recovery of an amount payable under a decree---Legislature thus by Art.40-B had provided another manner of enforcing the recovery of an amount, payable under the decree of any Court by way of arrears of land revenue---If there was legal, valid and executable decree in favour of State Life Insurance Corporation, the Corporation had the option either to get it executed by resorting to the procedure prescribed in C.P.C. or to enforce the recovery of the decretal amount through the Revenue Authorities and in such an eventuality the same would be recovered as arrears of land revenue---Principles.

Article 40-B of the Life Insurance (Nationalization) Order, 1972 has the overriding effect vis-a-vis any other law for the time being in force and it is without prejudice to the rights of the Corporation, to recover its dues in any other manner. Article 40-B does not provide an independent forum for recovery of an amount payable under a decree even if a decree is not executable. In ordinary course, an amount payable under a decree is to be recovered through the execution proceedings prescribed under the Civil Procedure Code. The provisions pertaining to the recovery of decretal amount merely prescribe the manner and method of recovery. It is established principle that the executing Court cannot go beyond the decree. Thus if a decree is not executable in itself, the amount determined in a judgment to be payable by a party cannot be enforced through execution proceedings under the C. P. C. The 'procedure prescribed for execution of a decree under the C.P.C. is cumbersome, while the procedure for recovery of any amount as arrears of land revenue, is simple, speedy, more effective and summary in nature. Thus, by insertion of Section 40-B, in the Life Insurance (Nationlisation) Order, 1972, the Legislature has provided another manner of enforcing the recovery of an amount, payable under the decree of any Court by way of arrears of land revenue. The overriding effect of section 40-B is restricted to the manner of enforcing the recovery of an amount payable under a decree. It has not the effect of conferring validity on an unexecutable decree or a decree which has become barred by time. The Revenue Authorities have been conferred jurisdiction for executing a decree and recovering the dues payable under the decree, in addition to the executing Court, nevertheless, the Revenue Authorities while executing the decree of Courts are also bound by the terms of the decree and cannot go beyond the decree, as is the case with the executing Court acting under Civil Procedure Code. The only difference is that instead of adopting the cumbersome procedure envisaged in the C.P.C., for recovery of decretal amount, the Revenue Authorities shall resort to the simple procedure prescribed in the Land Revenue Act for recovery of arrears of land revenue. In other words, if there is legal, valid and executable decree in favour of State Life Insurance Corporation, the Corporation has the option either to get it executed by resorting to the procedure prescribed in C.P.C. or to enforce the recovery of the decretal amount through the Revenue Authorities and in such eventuality it shall be recovered as arrears of land revenue. Section 40-B of the Life Insurance (Nationlisation) Order, 1972, does not have the effect of validating a decree which is not valid in law or making a judgment itself to be executable in the absence of a decree, a judgment itself is not executable but the decree which follows the judgment is executable in law.

(b) Civil Procedure Code (V of 1908)---

----O.XXXIV, Rr.2, 4, 5 & 10---Scope and application of O.XXXIV, C.P.C.---Mortgage of immovable property---Preliminary decree under O.XXXIV, R.4, C.P.C. does not contain any direction for sale of any mortgaged property or any part thereof but only determines the liability of the defendant and provides an opportunity to the defendant to pay the amount due to the plaintiff and if the amount found due under the preliminary decree, is paid by the defendant the plaintiff is to be directed for delivering up the documents and possession to the defendant--­When a final decree is made it shall contain a direction for the sale of the mortgaged property or a part thereof and the appropriation of the sale proceedings in the manner provided in O.XXXIV, R.4(1), C.P.C.---Principles.

In the present case, a preliminary decree was drawn under Order 34, rule 4, C.P.C., which provides that in a suit for sale, if the plaintiff succeeds, the Court shall pass preliminary decree to the effect mentioned in clauses (a), (b) and (c)(1) of sub-rule (1) of rule 2 and further directing that, in default of the defendant paying as therein mentioned, the plaintiff shall be entitled to apply for a final decree directing that the mortgaged property or a sufficient part thereof be sold, and the proceeds of the sale (after deduction therefrom of the expenses of the sale) be paid into Court and applied in payment of what has been found or declared under or by the preliminary decree due to the plaintiff, together with such amount as may have been adjudged due in respect of subsequent costs, charges, expenses and interest, and the balance, if any, be paid to the defendant or other persons entitled to receive the same. It is further provided under Order 34, rule 5(3) that, where payment in accordance with sub-rule (1) has not been made, the Court shall, on application made by the plaintiff in this behalf pass a final decree directing that mortgaged property or sufficient part thereof be sold, and that the proceeds of the same be dealt with in the manner provided in sub-rule (1) of rule 4.

Order 34, C.P.C. which deals with the suits relating to mortgage of immovable property has provided that initially a preliminary decree shall be made under rule 4 for taking of account of what was due to the plaintiff at the date of such decree for.

(i) principal and interest on the mortgage, (ii) the costs of suit, if any, awarded to him, and'

(iii) other costs, charges and expenses properly incurred by him up to that date in respect of his mortgage-security, together with interest thereon;

or

(b) declaring the amount so due at that date; and

(c) directing---

(i) that, if the defendant pays into Court amount so found or declared due on or before such date as the Court may fix within six months from the date on which the Court confirms and countersigns the account taken under clause (a) of Order 34, rule.2(1) or from the date on which such amount is declared in Court under clause (b) of the above provision as the case may be, and thereafter pays such amount as may be adjudged due in respect of subsequent costs, charges and expenses as provided in rule 10, together with subsequent interest on such sums respectively as provided in rule 11, the plaintiff shall deliver up to the defendant, or to such person as the defendant appoints, all documents in his possession or power relating to the mortgaged property, and shall, if so required, transfer the property to the defendant at his cost free from the mortgage and from all encumbrances created by the plaintiff or any person claiming under him, or, where the plaintiff claims by derived title, from those under whom he claims, and shall also, if necessary, put the defendant in possession of the property. It is further provided in Order 34, rule 2 sub-rule(2) that the Court may, on good cause shown and upon terms to be fixed by the Court, from time to time, at any time before a final decree is passed, extend the time fixed for the payment of the amount found or declared due under sub-rule (1) or of the amount adjudged due in respect of subsequent costs, charges, expenses and interest.

The preliminary decree under Order 34, rule 4, C.P.C. does not contain any direction for sale of any mortgaged property or any part thereof. It only determines the liability of the defendant and provides an opportunity to the defendant to pay the amount due to the plaintiff and if the amount found due under the preliminary decree, is paid by the defendant the plaintiff is to be directed for delivering up the documents and possession to the defendant. The provisions contained in Order 34, rule 4 sub-rule (1) and sub-rule (3) of rule 5 of Order 34 are very clear that when a final decree is made it shall contain a direction for the sale of the mortgaged property or a part thereof and the appropriation of the sale proceedings in the manner provided in sub-rule (1) of Rule 4 of; Order 34.

(c) Civil Procedure Code (V of 1908)----

----O.XXXIV, R.5(3)---Limitation .Act (IX of 1908), Art.181--­Application for preparation of final decree---Limitation-Effect of absence of final decree is that the plaintiff in whose favour a preliminary decree is made looses his right for enforcement of recovery of amount due under the preliminary decree.

The application for preparation of final decree can be made within three years of the passing of preliminary decree. The provisions of Article 181 of the Limitation Act, are attracted for making an application under Order 34, rule 5(3), C.P.C. for passing final decree. The effect of absence of the final decree is that the plaintiff in whose favour a preliminary decree is made looses his right for enforcement of recovery of amount due under the preliminary decree.

Habib Bank Limited v. Muhammad Abbas, 1999 CLC 531 ref.

(d) Life Insurance (Nationalisation) Order (10 of 1972)---

---Art.40-B---Civil Procedure Code (V of 1908), O.XXXVI, R.5(3)--­Limitation Act (IX of 1908), Art. 181---West Pakistan Land Revenue Act (XVII of 1960, S.113----Constitution of Pakistan. (1973,), Art.199---Constitutional petition---Expression "payable under a decree of Court" as used in Art.40-B of Life Insurance (Nationalisation) Order, 1972---Significance---Recovery of dues by State Life Insurance Corporation---Final decree becoming barred by time---Effect---When a final decree becomes barred by time, the plaintiff in whose favour a suit is decreed looses his right to enforce the sale of mortgaged property under the judgment or the preliminary decree---Right to recover the amount due by the plaintiff is not lost, the plaintiff cannot get the right of recovery under the decree revived by recourse to the manner of recovery provided in the West Pakistan Land Revenue Act, 1967---Final decree of the Court become time-barred---Application by the Corporation to the Assistant Commissioner that the mortgaged property be sold by auction or by private treaty for the recovery of the amount due as land revenue when the preliminary decree which was sought to be executed did not contain any direction for the sale of the mortgaged property was rightly declined by the Revenue Authorities in circumstances---Principles.

The effect of the final decree becoming barred by time is that a plaintiff in whose favour a suit is decreed, looses his right to enforce the sale of mortgaged property under the judgment or preliminary decree. While the right to recover the amount due, itself is not lost, the plaintiff cannot get the right of recovery under the decree revived by recourse to the manner of recovery provided in the Land Revenue Act. The words "payable under a decree of any Court" used under section 40-B of the Life Insurance (Nationalisation) Order, 1972, are very pertinent and are indicative of the intention of Legislature that the decree holder/ plaintiff can have recourse to the provisions contained in Land Revenue Act, if the amount is payable under a decree of any Court. However, if the dues are not payable under a decree, it cannot be enforced either through the execution proceedings under the Civil Procedure Code or by recourse to the manner provided in the Land Revenue Act. In the present case in the application submitted before the Assistant Commissioner a prayer was made that the mortgaged property be sold by auction or by private treaty for the recovery of the amount due. Since the preliminary decree which was sought to be executed did not contain any direction of the sale of the mortgaged property, therefore, Revenue Authorities had rightly declined to accede to the prayer of the petitioner.

The Revenue Authorities had rightly declined to initiate the sale proceedings of the mortgaged property and in doing so had exercised their jurisdiction in accordance with the law to which no exception could be taken. The petition being without substance was dismissed, with no order as to costs.

Irtiza Hussain Zaidi for Petitioner.

A. Latif Shamoor for Respondent.

Date of hearing: 7th November, 2001.

2002 C L D 1112

[Karachi]

Before Zahid Kurban Alvi, J

In the matter of Messrs QUAIDABAD WOOLLEN MILLS LTD.

Judicial Miscellaneous No.37 of 2000, decided on 14th March, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑

‑‑‑‑Ss.305 & 309‑‑‑Winding‑up of company for inability to pay its debts‑‑‑Factory (Company) was closed for more than one year‑‑‑Company was not having liquid assets from which its creditors could be paid‑‑‑Winding‑up of Company was justified in circumstances.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑S.305‑‑‑Winding‑up proceedings‑‑‑Creditor's claim‑‑­Applicant‑Bank sought that its decree against Company be given preference at the time of distribution of Company's assets‑‑‑High Court appointed Official Assignee as Official Liquidator with the directions that when Official Liquidator called for claims from all creditors, then applicant‑Bank could file its claim before him.

Saalim Salim Ansari for Petitioner.

S. Salimuddin Nasir for H.B.L. and A.B.L.

Date of hearing: 25th October, 2002.

2002 C L D 1113

[Karachi]

Before Sarmad Jalal Osmany, J

TAPAL TEA (PRIVATE) LIMITED‑‑‑Plaintiff

versus

SHAHI TEA COMPANY‑‑‑Defendant

Civil Suit No. 1160 and Civil Miscellaneous Application No.6370 of 2001, decided on 10th November, 2001.

(a) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S. 21‑‑‑Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2‑‑‑Suit for infringement of trade mark‑‑‑Temporary injunction, grant of‑‑‑Considerations‑‑‑Court, after comparing both the trade marks/labels had to make an assessment, whether the same were more or less similar‑‑‑If answer to such an exercise was in positive, then the earlier trade mark would be given due acknowledgment and acceptance, and consequently the latter trade mark would be restrained.

Rexona Proprietary Ltd. v. Majid Soap Works PLD 1956 Sindh 1; Insaf Soap Factory v. Lever Brothers Port Sunlight Ltd. PLD 1959 Lah.381; Telephone Soap v. Messrs Lever Brothers 1994 CLC 2135 and Sony Kabushiki Kaisha v. Assistant Registrar of Trade Marks PLD 1974 Kar.136 ref.

(b) Trade Marks Act (V of 1940)‑‑‑

‑‑‑S. 21‑‑‑Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2‑‑‑Suit for infringement of trade mark‑‑‑Temporary injunction‑‑‑Plaintiff in year 1990 acquired trade mark titled "Tepal Tea Mezban Super Dust" in respect of its products‑‑­Defendant thereafter adopted trade mark titled "Merjan Premier Dust"‑‑‑Plaintiffs claim was that defendant's trade mark had a reasonable duplication of plaintiff s trade mark, which would deceive common man resulting in losses and damages to plaintiff, thus, sought temporary injunction‑‑­Held: Defendant's label had the same colour, get‑up and design as that of the plaintiff‑‑‑Only dissimilarity between the two appeared to be in the words "Mezban" and "Merjan", which was not a total dissimilarity, but a partial one‑‑‑Defendant's label prima facie was deceptively similar to that of plaintiff; which could cause common man to mistake the defendant's tea to that of the plaintiff, thus, resulting in immense losses to plaintiff; who had invested huge amounts on promotion and advertisement of its brand of tea under the name of "Mezban Super Dust"‑‑‑Plaintiff had made out a prima facie case for grant of temporary injunction‑‑‑Application for temporary injunction was allowed in circumstances.

Ferozeuddin v. Muhammad Shaft PLD 1975 Kar.486; Abdul Wahid v. Haji Abdul Rahim PLD 1973 SC 108; Messrs Gorey International v. Colgate Palmolive (Pvt.) Ltd. 2000 MLD 8; Pakistan Tobacco Co. Ltd. v. West End Tobacco Co. 1992 CLC 1728 and Karachi Textile Works v. Multan Handloom Factory PLD 1958 Sindh 351 ref.

(c) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S. 21‑‑‑Copyright Ordinance (XXXIV of 1962), S.39‑‑‑Suit for infringement of trade mark ‑‑‑Plaintiff had claimed in suit that defendant's trade mark had a reasonable duplication of plaintiff trade mark as having identical label, get‑up, colour scheme‑‑‑Defendant's plea was that its copyright in logo and design would justify use of the same ‑‑‑Validity‑‑­Defendant's copyright being quite 'similar to earlier registered trade mark of plaintiff should not have been sanctioned by Copyright Board‑‑.Condoning the former's use of its copyright would give free reign to an unscrupulous person from adopting the mark/label, which was already being used by another person to the detriment of the latter‑‑­Such was not the intention of law‑‑‑High Court desired that some provisions should have to be there, whereby application for registration of a copyright could be advertised to invite objections, which would then be dealt with, so as to avoid conflicts between an earlier registered trade mark.

(d) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S. 21‑‑‑Copyright Ordinance (XXXIV of 1962), S.41‑‑­Suit for infringement of trade mark ‑‑‑Pendency of rectification application filed by plaintiff before Copyright Board with regard to defendant's copyright‑‑‑Non‑disclosure of such fact in the plaint‑‑‑Defendant's plea was that plaintiff had not come to the Court with clean hands‑‑­Validity‑‑‑Mere filing of such application could not fetter the plaintiffs right to approach the Court for discretionary and equitable relief by way of declaration and injunction‑‑­Rectification application would follow its own course before Copyright Board, whereas the present suit would proceed independently‑‑‑Non‑disclosure of rectification application pending before Copyright Board was not fatal to plaintiff s case.

Akbar v. Abdul Ghafoor 2000 SCMR 1000 and Dabur India Ltd. v. Hilal Confectionary (Pvt.) Ltd. PLD 2000 Kar.190 ref.

Sultan Ahmad Shaikh for Plaintiff.

Khawaja Manzoor Ahmad for Defendants.

2002 C L D 1121

[Karachi]

Before Mushir Alam, J

A. MEREDITH JONES & CO. through Attorney‑‑‑Plaintiff

versus

USMAN TEXTILE MILLS LTD. ‑‑‑Defendant

Suit No. 1584 of 1998, decided on 14th January, 2002.

(a) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑Ss.5, 7 & 8‑‑‑Convention on the Execution of Foreign Arbitral Award, Art. 4‑‑‑Sindh Chief Court Rules (O.S.), R.297‑‑‑Foreign award ‑‑‑Enforcement‑‑‑Requirements‑‑­ Provision of 8.297 of the Sindh Chief Court Rules is in line with the provisions of Ss.7 & 8 of the Arbitration (Protocol and Convention) Act, 1937, and so also in conformity with Art.4 of the Convention on the Execution of Foreign Arbitral Award appended as Second Schedule to the Arbitration (Protocol and Convention) Act, 1937‑‑‑With necessary modifications, the provisions of Art. 4 of the Convention on the Execution of Foreign Arbitral Award has been translated into S.8 of the Arbitration (Protocol and Convention) Act, 1937‑‑‑Requirements that are to be met and fulfilled by a person seeking enforcement of a foreign award have been laid down in R.297 of the Sindh Chief Court Rules in a composite manner‑‑‑Where application under S.5 of the Arbitration (Protocol and Convention) Act, 1937, is deficient in any material particulars, under the provisions of R.297(2) of the Sindh Chief Court Rules, the application is to be returned to the applicant for removing the deficiency within such time as may be allowed by the Court.

(b) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑S. 7‑‑Foreign award ‑‑‑Enforcement‑‑‑Pre‑conditions‑‑­Merely filing of award in Court does not entitle a party to a judgment and decree according to the award‑‑‑Applicant is required to satisfy the Court, that, the award, sought to be enforced as per S.7 of the Arbitration (Protocol and Convention) Act, 1973, qualifies the conditions, viz. that it was made in pursuance of an agreement of arbitration which was valid under the law by which it was governed; that it was made by the Tribunal provided for in the agreement or constituted in manner agreed upon by the parties; that it was made in conformity with the law governing the arbitration procedure: that it had become final in the country in which it was made; that it must be in respect of a matter which may lawfully be referred to arbitration under the law of Pakistan; and that enforcement thereof, must not be contrary to the public policy or the law of Pakistan.

(c) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑Ss. 5, 7, 8 & Second Sched.‑‑‑Sindh Chief Court Rules (O.S.), R.297‑‑‑Foreign award‑‑‑Enforcement‑‑‑Non‑filing of documents relied upon by the plaintiff during arbitration proceedings‑‑‑Application was filed to make foreign award a rule of the Court‑‑ ‑Objection petition was filed by the defendant contending that the plaintiff was not only required to file the award but each and every document which had been relied upon in the award and unless those documents were filed, the award could not be made rule of the Court‑‑‑Validity‑‑‑Plaintiff under law was not obliged to file any document nor required under S.8 of the Act read with R.297(1) of Sindh Chief Court (O.S.) Rules or the convention applicable thereto‑‑‑Such document might be produced before the Arbitration Tribunal before award was made‑‑‑Party interested to challenge a Foreign award was required to satisfy the Court under S.7(2) of the Arbitration (Protocol and Convention) Act, 1937, that there existed requisite conditions that the award had been set aside in the country of origin; that opposite‑party was not given sufficient notice to defend; that opposite‑party was under some legal disability and was not able to defend property; that the Award had not decided the question referred to, and/or the Award had gone beyond the scope of arbitration‑‑‑Defendant failed to point out any deficiency in terms of S.8 of the Arbitration (Protocol and Convention) Act, 1937, or R.297(1) of the Sindh Chief Court Rules for the purpose of hearing and deciding main suit‑‑‑Contentions of the defendant were not substantiated by any provision of the Arbitration (Protocol and Convention) Act, 1937, or the Sindh Chief Court Rules‑‑‑Objection petition was dismissed in circumstances.

(d) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑S. 7‑‑‑Foreign award‑‑‑Refusal to enforce or defer implementation‑‑‑When conditions any of the objections as mentioned in S.7 of the Arbitration (Protocol and Convention) Act, 1937, are sustained, then the Court may either refuse to enforce the award or defer implementation of the same, for such reasonable period as may be considered proper to enable the opponent to have the award annulled by the competent Tribunal.

(e) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑‑Ss. 5, 7 & 8‑‑‑Foreign award‑‑‑Enforcement‑‑‑Duties and powers of High Court‑‑‑Once award is made, it in fact amounts to a foreign judgment and the proceedings before High Court are merely for affirmation of award or otherwise‑‑‑Only limited objections as to the validity and enforceability of the foreign award are permitted under S.7(2) of the Arbitration (Protocol and Convention) Act, 1937‑‑‑High Court cannot sit over foreign award as a Court of appeal nor will scrutinize or examine the quality of evidence before the foreign Arbitrator, therefore, entire matter cannot be allowed to be reopened by calling for any additional evidence or documents not required under the law in fact‑‑‑High Court acts like an Executing Court and cannot go beyond the award, save as expressly provided for, under S.7(2) of the Arbitration (Protocol and Convention) Act, 1937, that too, for a limited purpose to enable the defendant to question the award on merits before the competent forum in the country of origin.

Arif Khan (Qamar Abbas & Co.) for Plaintiff.

Naraindas C. Motiani for Defendant.

Date of hearing: 19th November, 2001.

2002 C L D 1191

[Karachi]

Before Shabbir Ahmed, J

MEREDITH JONES & CO. LTD. ‑‑‑Plaintiff

versus

QUETTA TEXTILE MILLS LTD. ‑‑‑Defendant

Judicial Miscellaneous No.26 of 1997, decided on 10th September, 1999.

(a) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑‑S.7‑‑‑Arbitration Act (X of 1940). S.30‑‑‑Foreign award, setting aside of ‑‑Grounds of attack against a foreign award mentioned in S.7 of Arbitration (Protocol and Convention) Act. 1937. were not only different, but scope was also limited as compared to award rendered under Arbitration Act. 1940‑‑‑Award could be set aside under S.30, Arbitration Act. 1940 on grounds that Arbitrator or umpire had misconducted himself or that award had been improperly procured or was otherwise invalid. whereas said grounds did not find place in S.7 of Arbitration (Protocol and Convention) Act. 1937.

(b) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑‑Ss. 2. 5 & 7‑‑‑Arbitration Act (X of 1940). S.2(a)‑‑­Arbitration agreement‑‑‑Enforcement o/' foreign award‑‑‑Not necessary that an agreement containing arbitration clause should be signed by parties: it was sufficient if terms were recorded in writing and agreement of parties thereto was established‑‑‑Requirement was that there should be an agreement in writing and accepted by both parties‑‑‑Such acceptance could be in writing or oral‑‑ ‑Agreement containing terms could be inform of a document signed by parties or signed by one party and accepted by others either by signing the agreement or showing acceptance by conduct‑‑‑Agreement of parties should be established so that they could be held to be bound by it which was a condition precedent for consensual jurisdiction‑‑‑‑Agreement for arbitration" was one of the conditions for enforcement of a foreign award" under provisions of S.7(i)(a) of Arbitration (Protocol and Convention) Act, 1937‑‑‑Agreement between parties for arbitration which was one of conditions for enforcement of foreign award under S.7 of Arbitration (Protocol and Convention) Act. 1937 having not been established. suit filed by plaintiff was dismissed.

Guardian Insurance Co. Ltd. v. Thakur Shiva Mengal Singh AIR 1937 Al1.208: Ralli Brother & Co. Ltd. v. Muhammad Amin Muhammad Bashir Ltd. 1987 CLC 83: Nan Fung Textiles Ltd. v. Pir Muhammad Shamsuddin PLD 1979 Kar. 762: A Merdith Janes Co. Ltd. v. Crescent Board Ltd. 1999 CLC 437 and Hakim Ali v. Muhammad Saleem 1992 SCMR 46 ref.

(c) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑‑Ss. 2. 5 & 7‑‑‑Objection to jurisdiction of Arbitrator‑‑­Where one of the parties appeared before Arbitrator and objected to his jurisdiction, that party would not waive its right by proceeding with the case before Arbitrator, but could continue to take part in proceedings after protest arid same would not amount to consent to jurisdiction.

Himalya v. Bellerly (1880) 68 BD 63 ref.

(d) Arbitration (Protocol and Convention) Act (VI of 1937)‑‑‑

‑‑‑‑Ss. 2, 3, 5 & 7‑‑‑Jurisdiction of High Court to examine question of existence of agreement for arbitration‑‑­Determination of question of existence, validity and effect by Arbitrator was subject to decision of High Court before it was made enforceable under S.7 of Arbitration (Protocol and Convention) Act, 1937.

Renusagar Power Co. Ltd. v. General Electric Company and another AIR 1985 SC 1156 ref.

Muhammad Arif Khan for Plaintiff.

Khalid Javed Khan for Defendant.

2002 C L D 1207

[Karachi]

Before Muhammad Moosa K. Laghari, J

INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN‑‑‑Applicant

versus

Messrs HYDERALI BHIMJI & CO. and another‑‑‑Respondents

Civil Reference No. l of 1991, decided on 8th April, 2002.

(a) Chartered Accountants Ordinance (X of 1961)‑‑‑

‑‑‑‑Ss.20D, 20C, 20B, 20A. 27 & Sched. II, Part 1, CI. (7)‑‑­Chartered Accountants Bye‑laws. 1961. Chap. X‑‑‑Scope and application of Ss. 20D, 20C, 20B, 20A. 27 & Sched. II, Part 1. Cl.(7) of the Chartered Accountants Ordinance, 1961 and Chap. X of the Chartered Accountants Bye‑laws 1961‑‑‑Professional misconduct by member of the Institute of Chartered Accountants‑‑‑Enquiry by Investigation Committee‑‑‑Mandatory requirements‑‑­Investigation Committee to "consider" the facts of the complaint of professional misconduct and form an "opinion", the criterion of which was to be purely objective‑‑­Consideration implied personal and formation of an opinion by the Committee about the correctness of the complaint or 'otherwise‑‑‑To "consider" would mean to carefully examine, to determine, to adjudicate and to apply mind fairly honestly reasonably and bonafidely‑‑‑Terms "consider" and "opinion"‑‑‑Connotation‑‑‑Failure to follow mandatory procedure prescribed by the relevant statutory provisions both by the Investigation Committee and the council coupled with the complaint of professional misconduct being full of follies, loopholes and legal infirmities, reference to the High Court under S.20D(2) of the Chartered Accountants Ordinance, 1961 was liable to be rejected as provided under S.20F of the said Ordinance‑‑‑Principles‑‑‑Duty of Institute of Chartered Accountants to monitor the affairs of its members outlined by the High Court.

Law requires the Institute that it shall lay the complaint containing relevant and necessary material before the Investigation Committee as and when received by it. On receipt of the complaint, Investigation Committee is required to consider the facts laid before it. On consideration of the facts if it is of the opinion that the facts or the complaint require investigation, it shall give a notice to the member concerned and hold an inquiry. The member concerned. After the service of notice, is to be given an opportunity of hearing and the proceedings of the Investigation Committee are necessarily to be conducted in presence of the member concerned. It is thus, mandatory upon the Investigation Committee to "consider" the facts of the complaint laid before it and form an 'opinion' to see as to whether ex facie a basis has been made for proceedings against a member. It is only then that an opinion is formed by the Investigation Committee after considering the. material facts placed before it to proceed against a member, then a notice is to be served upon the member concerned and the proceedings are taken against him.

Use of term 'consideration' and 'opinion' in the Ordinance and Bye‑laws is significant and clearly shows that the Legislature intended the criterion to be purely objective. "Consideration" implies perusal and formation of an opinion by the authority concerned about the correctness of the report or otherwise.

The word 'consider' means to look at attentively, or carefully, to think, to take into account, to regard, hold the opinion.

In the present case the Investigation Committee had to form its opinion on factual existence of certain grounds capable of objective determination.

To 'consider' would mean to carefully examine, to determine, to adjudicate, and last but not least to apply mind. Undoubtedly such application of mind should be fair, honest, reasonable, and bona fide.

In the present case on receipt of the complaint from the Corporate Law Authority it was not laid before the Investigation Committee. But in derogation of the legal provisions the comments were called by the Institute from the accused members. Thus, the Investigation Committee had no occasion to consider the material in the complaint and form it's independent opinion. Instead the comments/ explanation were referred to the Investigation Committee. Admittedly, the material forming the basis of the complaint was neither considered by the Investigation Committee nor any independent opinion was formed or recorded by the Investigation Committee to proceed against the accused members. Certainly, the Investigation Committee proceeded on the direction of the Institute. The Investigation Committee did not put the accused members on notice before taking into consideration the material placed before it, though the Ordinance and the Bye‑laws made thereunder specifically provided that it was mandatory upon the Investigation Committee to issue a notice to the concerned member before proceedings against him. Thus, the provisions of law were flagrantly violated.

The Investigation Committee conducted ex parte inquiry against the accused members. The members were neither associated with the proceedings of inquiry nor were they provided opportunity of hearing by the Investigation Committee, either before conducting the inquiry or during the proceedings, or even after the conclusion of the inquiry. Thus, not only the provisions of law were flouted, but the proceedings were undertaken in sheer disregard of the fundamental principles of natural justice. After conducting ex parte proceedings against the members, Investigation Committee submitted a report to the Institute. On receipt of the report of the Investigation Committee the Council was required under the provisions of section 20C to record its findings to the effect either to direct that the proceedings against a member be instituted or, as the case may be, the complaint be filed. The Legislature has made it mandatory upon the Council to record a finding. Certainly that findings had to be recorded after evaluating the material made available to the Council as appearing in the inquiry report. Thus, the Council had to tentatively assess and examine the evidence and satisfy itself to the effect that on the basis of facts and circumstances substantiated by the material placed before the Council, action was warranted against the members. Term 'satisfaction' has been defined as 'actual persuasion'. That means a mind not troubled by doubt or which has reached a clear conclusion. However, no independent finding of the Council had been placed on record, as such the legal provisions were, once again, contravened. The proceedings of the Council which had been placed on record were ex parte in nature which, inter alia, authorize the Institute to initiate the proceedings against the members and for that purpose to contact some lawyer and to seek his services for filing reference. The prayer in the reference did not contain the recommendations of the Council as required under section 20D of the Ordinance.

Penal Provisions were to be construed strictly. Benefit must be extended to the accused on account of illegalities and lapses committed on the part of the Institute, as the proceedings were undertaken in a prejudicial and unlawful manner. The proceedings against the members were initiated in a non‑serious, imprudent faint‑hearted manner. which were bound to suffer a set‑back.

On close scrutiny of the record it had come to light that the complaint filed by the Corporate Law Authority against the members was one and the same, which in the first instance seemed to have been dropped by the Institute by accepting the apology tendered by the members. In fact the complaint was not taken seriously and appeared to have been buried by the Institute. However, subsequently when the Corporate Law Authority again furnished serious and minute details of the professional misconduct allegedly committed by the members, the Management of the Institute, which had by then changed, was constrained to initiate the proceedings in a mindless, half‑hearted and haphazard manner under the pressure of events, which led to failure due to the absence of legality. In the circumstances the legal objection raised by the members to the effect that the complaint having already been disposed of, could not be revived, had much force. There was no other option except to sustain the contention.

The complaint being full of follies, loopholes and legal infirmities the Reference was liable to be rejected as provided under section 20F of the Ordinance.

High Court observed that the present case if looked into in the context, reflects a terrible state of affairs. Institute of Chartered Accountants which has been vested with the authority to monitor the affairs of its members, has duty towards the Nation in general and the shareholders in particular to take serious and stringent measures to prevent any mishap. It has been noted with serious concern that the proceedings in the present case were initiated by the Institute in a half hearted manner which adversely reflected the role of the Institute itself, and was bound to erode confidence of the shareholders in the Auditors, which requires to be checked. It was because of the lapses on the part of Applicant Institute that the reference had to be rejected.

1991 PCr.LJ 110: 1987 SCMR 1967 and PLD 1995 SC 4101 distinguished.

Abdul Majid Beg v. K. Karimuddin and others 1968 SCMR 867: Shahbuddin v. Inspecting Assistant Commissioner of Income‑tax. Range‑I, West Zone, Karachi and 4 others PLD 1988 Kar. 587 and Angland v. Payne 1944 NZLR 610 (626) ref.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 252 & 254‑‑‑Auditor, function of ‑‑‑Auditing‑‑Meanings‑‑‑Condescending of auditors to the demand of management of companies causes a devastating effect if the auditor puts a seal of approval on the misleading accounts of company.

As required under section 252 of the Companies Ordinance, 1984, each company must, at their annual general meeting, appoint an Auditor to hold office until the next annual general meeting. Only a person who is Chartered Accountant within the meaning of Chartered Accountants Ordinance, 1961 can be appointed to act as an Auditor of a public company as provided under section 254 of the Ordinance.

An Auditor is not to be confined to the mechanism of checking vouchers and making arithmetical computations. He is not to be written off as a professional "adder upper and subtractor". His vital task is to take care to see that errors are not made, be those errors of computation or errors of omission or commission or downright untruths. To perform this task properly he must come to it with an enquiring mind not suspicious of dishonesty, but suspecting that someone may have made a mistake somewhere and that a check must be made to ensure that there has been none.

Auditing may be defined as the independent examination and investigation of the books, accounts and vouchers of a business with a view to enabling the auditor to report whether the Balance Sheet and Profit and Loss account are properly drawn up so as to show a true and fair view of the state of the affairs and the profit and loss of the business according to the best of the information and explanations obtained by the auditor."

The auditors are the ultimate watchdogs of the shareholders' interest. According' to the set practice. The auditors are required to give a report which is either "clean" or "qualified". By issuing a "clean" report, the auditor certifies that the financial statement reflects "true and fair" view of the company's affairs and a "qualified" report subjects such opinion to some observation of irregularity or inconsistency. The managements of large companies which are dependent or the public confidence, had been frenziedly trying to secure a "clean" audit report from their auditors. Since the auditors are recommended (and virtually appointed) by the Board of Directors, some of them are made to condescend to the management demands. Undoubtedly it causes a devastating effect if the auditors put a seal of approval on the misleading accounts of company.

Fomento Sterling Area Ltd. v. Selsdon Fountain Pen Co. Ltd. (1958) 1 WLR 61 and Principles and Practice of Auditing by R. Glynne Williams ref.

Ghulam Abbas Pishori for Applicant.

Syed Himayat Ali Pirzada for Respondents.

Date of hearing: 18th January, 2002.

2002 C L D 1223

[Karachi]

Before Sarmad Jalal Osmany, J

KOHINOOR SOAP AND DETERGENTS (PRIVATE) LTD. through Chief Executive of the Company‑‑‑Plaintiff

versus

BASRA SOAP FACTORY and 4 others‑‑‑Respondents

Suit No. 1394 and Civil Miscellaneous Applications Nos.4538, 9722 and 11299 of 1998, decided on 15th March, 2002.

(a) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss. 20, 21 & 25‑‑‑Revised Trade Marks Rules, 1963, Rr.49(2), 48 & 47‑‑‑Partnership Act (IX of 1932), Ss. 4, 14, 18. 22 & 35‑‑‑Civil Procedure Code (V of 1908). O.XXXIX. R.4‑‑‑Trade mark‑‑‑Certificate of registration of trade mark not only mentioned the names of the original partners of the firm but also that of the partnership viz. the firm‑‑‑Sale of running business of such firm‑‑‑Effect‑‑‑Trade mark being property of the Firm, in the absence of any disagreement between the partners regarding the trade mark, which was registered as far back as the year 1956, it could safely be concluded that the same belonged to all the partners and indeed the firm itself‑‑‑When running business of the Firm was sold the trade mark would also form part its particularly when the said business was to include the good‑will also‑‑‑Provision of S.35, Trade Marks Act 1940 being enabling one, provided that the Registrar of Trade Marks would record a change in proprietorship of any trade mark on application by the assignee thereof‑‑‑Trade mark, in the present case, was owned by the original partners through the partnership and was thereafter transmitted to the successive partners upon reconstitution of the firm and consequently proprietorship of the said trade mark rested both with the reconstituted firm and its partners ‑‑‑Record showed that trade mark in question had been used right from the very inception of the firm but same had not been renewed in accordance with the Rules ‑‑Plaintiffs trade mark was also not registered and their application was pending with the Registrar, but they had showed that they were also using the disputed trade mark since 1986‑‑­Defendants (firm) being the prior user of the trade mark in question. High Court held that it would be in the interest of justice to vacate the earlier injunction order with the result that both the parties would be allowed to use the trade mark till the suit was decided‑‑‑Principles.

Messrs Kissan Industries v. Messrs Punjab Food Corporation AIR 1983 Delhi 387; Abinash Chandra v. Madhusundan AIR 1952 Cal. 673; Muhammad Zaman Sahib v. Fatimunnisa AIR 1960 Mad. 60; Calmic Ltd. v. Registrar of Trade Mark 1985 CLC 2063; Blighty Industries Association Ltd. v. The Scottish Home Industries Association 44 RPC 269; Abdullah Saeed v. Cannon . Rubber Ltd. 1987 MLD 2583; Hindustan Lever Ltd. v. Bombay Soda Factory AIR 1963 Mys. 173: Ihlee v. Henshaw 3 RPC 15; J.N. Nicholas (Vimto) PLC v. Mehran Botllers (Pvt.) Ltd. 1996 MLD 1203; Azra Jawed v. Jamshed Alam Khan 1996 MLD 1203: Coopers Inc. v. Pakistan General Stores 1981 SCMR 1039; Prince Rubber Ind. v. K.S. Rubber Industries 1983 PTC 83: Carter & Parker Ltd. v. Scotia Wools Ltd. 1960 RPC 206; In the Matter of the Magenta Time Co. Ltd. Trade Mark 44 RPC 169: Prem Singh v. Ceem Auto Inds. AIR 1990 Delhi 233: Societe de Fabrication et de Distribution de Perfumenie v. Deputy Registrar of Trade Marks PLD 1979 Kar. 83: Hawtin (E.V.) Ltd. v. Hawtin (John F) & Coy Ltd. 1960 RPC 95; Dolphin Laboratories Ltd. v. Kaptab Pharmaceuticals Ltd. AIR 1981 Cal. 76; Shri Swaran Singh v. M/s. Usha Industries AIR 1986 Delhi 343; P.M. Dissels (Pvt.) Ltd. v. Thukral Mechanical Works AIR 1988 Delhi 282; G.T.C. Industries v. I.T.C. Ltd. AIR 1992 Mad. 252; George Balantyne Ltd. v. Balantyne Stewart 1959 RPC 273; Shahnawaz Ltd. v. Khawaja Auto Cars Ltd. PLD 1979 Kar. 387; Muhammad Yusuf v. Sabira A. Muhammad 1990 CLC 1127; Nirmala Kanta v. Mulk Raj Kohli AIR 1977 All. 145: Amina Begum v. Ghulam Dastagir PLD 1978 SC 220; Magnum Films Ltd. v. Golcha Properties Ltd. AIR 1983 Delhi 392; Meenakashi Amal v. Rama Ayyar AIR 1928 Mad. 610; Amin v. Haji Abdul Sattar 1992 CLC 1428; PLD 1'981 SC 108; Attaur Rehman v. Adam Ali 1981 CLC 1747; Khuda Bux v. S. Badrul Hasan PLD 1981 Kar. 657; Muhammad Ishaque v. Eros Theatre PLD 1973 Kar.522; Karim Industries v. Nahan Foundry 1984 CLC 648; Sindh Madarsatul Islam Board v. Shamim 1982 CLC 2242; Muhammad Yousuf v. Sabira A. Muhammad 1990 CLC 1127; Engineering Products Ltd. v. S.I.T.E. PLD 1997 Kar. 258; Unilever PLC v. R.B . Oil Industries (Pvt.) Ltd. 1999 MLD 1447; Rexona Proporietary Ltd. v. Majid Soap Works PLD 1956 Sindh 1; General Sales and Trading v. Abdul Razzak NLR 1961 UC 425; Abdul Jabbar v. Ahmad Jan PLD 1973 Kar. 289 and Telephone Soap v. Lever Brothers 1994 CLC 2135 ref.

Attaur Rehman v. Adam Ali 1981 CLC 1747; Khuda Bux v. S. Badrul Hasan PLD 1981 Kar. 657; Muhammad Ishaque v. Eros Theatre PLD 1973 Kar. 522 distinguished.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O. XXXIX, R.4‑‑‑Invocation of provisions of O.XXXIX, R.4‑‑­Conditions.

Order 39. rule 4. C.P.C. can be invoked only where the previous injunction order which was sought to be vacated is unduly harsh and or unworkable or the same is deemed to be necessary in view of fresh circumstances. This becomes more imperative where the injunction order sought to be recalled is ex parte. Where a party is able to show the aforementioned circumstances he cannot be non­-suited merely on the ground that although an appeal could have been filed against the injunction order the same was not done.

Muhammad Yousuf v. Sabira A. Muhammad 1990 CLC 1127 ref.

(c) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S. 151‑‑‑Scope of S.151, C.P.C.

Under section 151, C.P.C. the inherent powers of a Civil Court can be invoked in order to do complete justice between the parties and mould relief in accordance with the circumstances in the larger interest of justice.

Munawar Ghani alongwith Chaman Lal for Plaintiff.

Khalil Kizilbash for Defendants.

Dates of hearing: 16th; 24th April; 1st; 14th; 21st, 23rd December, 1999 and 18th February, 2002.

2002 C L D 1338

[Karachi]

Before Shabbir Ahmed, J

In re: THE COMPANIES ORDINANCE, 1984

and

In re: YUSUF TEXTILE MILLS LIMITED and 2 others

Judicial Miscellaneous No.34 and Civil Miscellaneous Application No.2092 of 2001, decided on 6th December, 2001.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284 & 287‑‑‑Companies (Court) Rules, 1997, R.60, Form 19‑‑‑Amalgamation of Companies‑‑‑Failure to file petition for amalgamation in accordance with Form 19 prescribed under Companies (Court) Rules, 1997‑‑‑Validity‑‑­No bar existed in filing the petition for approval and petition for holding extraordinary general meeting simultaneously‑‑­If the petition substantially fulfils the requirements of Form 19. then the petition is maintainable.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284 & 287‑‑‑Companies (Court) Rules, 1997, R.60‑‑­Amalgamation of companies‑‑‑Scheme of amalgamation‑‑­Petitioner‑companies were associated companies having common management‑‑‑Majority of the shareholders in all the companies were common and they belonged to one group‑‑‑No investigation proceedings under Ss. 263 & 282 of Companies Ordinance, 1984, or any other proceedings under any provision of Companies Ordinance, 1984, were pending against any of the petitioner‑companies‑‑‑Petition for amalgamation was filed with the object of better and more economically carrying on the business of the companies‑‑‑Validity‑‑‑Amalgamation was neither opposed to public policy, nor was against the interest of the creditors/ shareholders, therefore, High Court approved the scheme of amalgamation‑‑‑Petition was allowed accordingly.

A.H. Mirza for Petitioners.

2002 C L D 1352

[Karachi]

Before Zia Perwez, J

In re: Messrs SAADI CEMENT LIMITED through Director, Shamim Mushtaq Siddiqui‑‑‑Petitioner

Judicial Miscellaneous No. 36 and Civil Miscellaneous Applications Nos.2329 and 2572 of 2001, heard on 22nd November, 2001.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.284. 285, 286, 287 & 288‑‑‑Scheme of arrangements‑‑­Repayment of debts‑‑‑Creditors having outstanding liabilities to the extent of over 9796 of the credit had no objection to the sanction of the scheme‑‑‑No other creditor had filed any objection‑‑‑Scheme envisaged repayment to be made over a period of up to 10 years which covered the entire amount of principal as well as mark‑up thereon at the rates set forth therein‑‑‑In addition to the repayment, the scheme also provided additional securities to the creditors by way of‑transfer of property in the leased assets from the leasing companies to the petitioner and secured by the creditors‑‑‑Effect‑‑‑Under the scheme of arrangement, the creditors were on better footing with additional security and backed by their own supervision and monitoring of the affairs of the petitioner Company to be carried out through an executive committee‑‑‑Scheme proposed by the petitioners and as approved in the meeting of creditors of the Company, was sanctioned by High Court‑‑‑Petition was allowed accordingly.

Makhdoom Ali Khan alongwith Farogh Nasim and Sardar Aijaz for Petitioner.

Arshad Tayebally representing the Majoirty of Creditors of Messrs Saadi Cement Ltd.

2002 C L D 1361

[Karachi]

Before Shabbir Ahmed, J

In re: COMPANIES ORDINANCE, 1984 and BSIS BALANCED FUND LIMITED and another

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284 & 287‑‑‑Amalgamation of companies‑‑Object and purpose‑‑‑Object of amalgamation is to achieve economy of scales and to carry on business more economically and efficiently, to streamline and maintain smooth and efficient management and corporate control to cut unnecessary administrative, secretarial and other expenses, to attain the main objectives of both the petitioner‑companies more feasibly, to avoid duplication of managerial and corporate process and to otherwise carry on business more conveniently and advantageously.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284, 285, 286, 287 & 503‑‑‑Companies (Court) Rules, 1997, R.55‑‑‑Sindh Chief Court (O.S.), Rules, R. 953‑‑­Amalgamation of companies scheme‑‑‑No objection from any quarter was raised to the scheme proposed by the petitioner‑companies‑‑‑Registrar Joint Stock Companies had also not commented adversely‑‑‑Security and Exchange Commission of Pakistan had already approved the scheme subject to the sanction by High Court‑‑‑Merger being based on ground realities, it would not affect the interest of the members and the same was not against the public interest either‑‑‑Petition was allowed accordingly.

Iqbal L. Bawany for Petitioners.

2002 C L D 1382

[Karachi]

Before Ata‑ur‑Rehman, J

NATIONAL DEVELOPMENT FINANCE CORPORATION‑‑‑Plaintiff

versus

Messrs MILLROCK QUARRING (PVT.) LTD. and 7 others‑‑‑Respondent

Suit No. B‑55 of 2000, decided on 14th November, 2000.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9 & 10‑‑‑Contract Act (IX of 1872). S.73‑‑‑Suit for recovery of Bank loan‑‑‑Non‑appearance of defendants‑‑­Liquidated damages‑‑‑Financial facility was availed by the defendants who failed to re‑pay the loan‑‑‑Despite service of process to the defendants by the Banking Court neither anyone appeared on behalf of the defendants nor any application for leave to defend was filed‑‑‑Bank filed all necessary documents with the plaint and claimed recovery of liquidated damages also‑‑‑Validity‑‑‑In absence of any rebuttal. High Court relied upon the documents and statement made in the plaint except the claim in respect of liquidated damages which were declined‑‑‑Suit was decreed accordingly.

Habib Bank Limited v. Messrs Farooq Compost Fertilizer Corporation Ltd. and 4 others 1993 MLD 1571 ref.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18‑‑‑Attachment before execution‑‑‑Suit was decreed by High Court in favour of Bank‑‑‑Application under S.18 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, was filed for attachment of the properties mortgaged with the Bank‑‑‑Validity‑‑‑Properties which were mortgaged with the Bank had been listed in the application and the same were attached under S.18 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act. 1997‑‑‑Application was allowed in circumstances.

Zahid Jamil for Plaintiff.

Defendants (absent).

Date of hearing: 14th November, 2000.

2002 C L D 1392

[Karachi]

Before Zia Perwez, J

In re: Messrs PAKLAND CEMENT LIMITED through Director Shamim Musheq Siddiqui

Judicial Miscellaneous No.35 of 2001, decided on 24th December, 2001.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 284‑‑‑Scheme of arrangement‑ ‑‑Sanction of Court‑‑­Scope‑‑‑Such scheme can be formulated and put up for sanction of the Court at any stage subject to any third party rights which may have been created by way of sale in pursuance of execution proceedings.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284, 285, 286, 287 & 288‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss.4, 7(4) & 27‑‑‑Scheme of arrangement‑‑‑Outstanding debts, payment of‑‑‑Scheme of arrangement violating the provisions of Ss.4, 7(4) & 27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Decrees had been passed by Banking Court against the petitioner‑company and in favour of the Financial Institutions‑‑‑Petitioner in order to clear the liabilities of the Financial Institutions made a scheme of arrangement and filed the same before High Court for its approval‑‑‑Contention of the Financial Institutions was that the scheme was based upon mala fides as the same would reduce the decretal amounts or the amounts owed by the petitioner to the Financial Institutions‑‑‑Validity‑‑‑Scheme of Arrangement provided that recoveries of outstanding debts was being facilitated with the collateral attempt to keep the petitioner‑company alive‑‑‑Nothing existed to the Banking Laws or the Civil Procedure Code, 1908, which mandated that no attempt should be made to keep a Company alive‑‑­Where in the present scheme of arrangement, the petitioner had not attempted to reduce the decretal amounts or the amounts owed by the petitioners to Financial Institutions, the present proceedings were not in conflict with the decrees/orders or judgments passed by the Banking Courts or any appeals thereto‑‑‑Scheme of arrangement had neither violated the provisions of Ss.27, 7(4) & 4 of Financial Institutions (Recovery of Finances) Ordinance, 2001, nor there was any conflict thereof with S.284 of Companies Ordinance, 1984‑‑‑Scheme of arrangement was sanctioned and approved by High Court‑‑‑Petition was allowed in circumstances.

2001 SCMR 1341; Industrial Development Bank of Pakistan v. Allied Bank of Pakistan and another PLD 1986 SC 74; Solidaire India Ltd. v. Fairgrowth Financial Services Ltd. and others (2001) 3 SCC 71 = (1997) 89 CC (SC) 547; Sheikh Khalid Mehmood v. Banking Tribunal, N.‑W.F.P. Peshawar and another 1997 CLC 1812; Abdul Razzaq Butt v. Kalsoom Bibi 1999 MLD 30; AIR 1941 Pesh. 49; AIR 1933 Rang. 195 and AIR 1935 Lah. 350 ref.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284. 285, 286, 287 & 288‑‑‑Companies Act (VII of 1913), Ss.153 & 153‑A‑‑‑Indian Companies Act, 1956, Ss‑391, 392, 393 & 394‑‑‑Scheme of arrangement and Banking laws‑ ‑‑Comparison and history of relevant statutes discussed.

(d) Interpretation of statutes‑‑‑

--Conflict in statutes‑‑‑Duty of Court‑‑‑Principles‑‑‑Laws should be interpreted in a manner so as to be saved rather than destroyed‑‑‑Unless and until there was clear‑cut conflict which is irreconcilable, the Court should lean in favour of a harmonious interpretation so as to avoid any conflict and keep the laws operating in their occupied fields in order to avoid any provision becoming redundant or surplus.

Province of East Pakistan v, Siraj‑ul‑Haq Patwari PLO 1966 SC 854 and PLD 1963 SC 683 ref.

(e) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 284‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss.4 (4) & 27‑‑‑Scheme of arrangements in conflict with Banking laws‑‑‑Validity‑‑‑No conflict existed between the Banking laws and the scheme of S.284 of Companies Ordinance, 1984‑‑‑Provisions of both statutes co‑exist as they have co‑existed before.

(f) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 284‑‑‑Scheme of arrangement‑‑‑Assumption of jurisdiction by Companies Judge‑‑ ‑Principles.

Following are the principles with regard to the exercise of jurisdiction under section 284, Companies Ordinance, 1984 and analogous provisions:‑‑

(a) The jurisdiction of the Court in this regard is neither appellate nor revisional but only supervisory in nature;

(b) the statutory majority must be present;

(c) the company should consent to the scheme of arrangement;

(d) the Court would see as a whole whether the scheme is fair. For this purpose it would not launch any investigation or consider each and every provision of the scheme of arrangement minutely. The Court would lean in favour of honouring the wishes of the majority:

(e) onus is on the objectors to establish that the scheme is mala fide or unfair. As regards the letter, unfairness per se would not be enough unless and until the unfairness is patent, obvious and convincing;

(f) Court would prefer to keep the Company alive so as to sanction the scheme rather than allow the company to go into liquidation;

(g) decree‑holders and non‑decree‑holders do not constitute separate classes and as such it is not necessary to have different meetings in relation thereto;

(h) there should not be a differential treatment based upon discrimination between creditors of the same class;

(i) the Court will not go into commercial merits or viability of the decision reached by the majority;

(j) separate meeting of sub‑class of shareholders are only required if separate terms and conditions are laid down in the scheme in their regard:

(k) a class of shareholders would mean where there is a commonality of interest. Which will be when the respective interests are not so dissimilar so as to make it impossible for them to consult each other.

Lipton (Pakistan) Ltd. and another's case 1989 CLC 818; Mian Hamidul Haq and others v. Taj Company Ltd. 1991 MLD 841; Application under sections 153 and 153‑A, Companies Act, 1913 v. Messrs Hunza Central Asian Textile and Woollen Mills Ltd. PLD 1976 Lah. 850; AIR 1937 Bom. 423; AIR 1959 Cal. 679; Lakmichand v. Janardhan and another AIR 1932 Rang. 154; In re: Maneckchowk and Ahmedabad Manufacturing Co. Ltd. (1970) 40 CC 819 (Guj.); India Flour Mills, in re: (1934) 4 CC 137 (Sindh); (1994) 79 CC 110 (Cal.): Jalpaiguri Banking and Trading Co. Ltd., In re: (1935) 5 CC 335; Miheer H. Mafatlal v. Mafatlal Industries Ltd. (1996) 87 CC 792 (SC) = Miheer H. Mafatlal v. Mafatlal Industries Ltd. AIR 1997 SC 506 and In re: Sussex Brick Co. Ltd. (1960) 1 All ELR 772 ref.

Makhdoom Ali Khan, Dr. Muhammad Farogh Naseem and Sardar M. Aijaz Khan for Petitioners.

Arshad Tayabally and Mehmood Y. Mandviwala and Ch. Ejaz Ahmed for Creditors.

Date of hearing: 5th December, 2001.

2002 C L D 1429

[Karachi]

Before Shabbir Ahmed, J

PAK LIBYA HOLDING CO. (PVT.) LIMITED‑‑‑Petitioner

versus

DADABHOY LEASING COMPANY LIMITED‑‑‑Respondent

Civil Miscellaneous Application No. 2450 of 2000 in Judicial Miscellaneous No. 20 of 1999, decided on 28th March, 2001.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑S.316‑‑‑Execution of decree in Banking suit‑‑‑Grant of permission under S.316, Companies Ordinance, 1984‑‑­Permission in terms of S.316 of Companies Ordinance, 1984 was granted to applicant/plaintiff‑Bank to proceed with suit pending before the Banking jurisdiction of High Court subject to condition that in case of decree, it would not be executed unless permission was obtained in terms of S.316 of Companies Ordinance, 1984.

Saleem Saalam Ansari for Petitioner.

Haji Bashir Ahmed Memon, O.A. in person.

2002 C L D 1430

[Karachi]

Before Zahid Kurban Alvi, J

COTTON EXPORT CORPORATION OF PAKISTAN (PVT.) LIMITED‑‑‑Plaintiff

versus

Messrs RUPALI COTTON INDUSTRIES and 4 others‑‑‑Defendants

Suits Nos. 1119 and 1181 of 1991 and Civil Miscellaneous Applications Nos.4111 and 8717 of 2002, decided on 31st May. 2002.

Civil Procedure Code (V of 1908)‑‑‑

‑‑‑O.XX, R.11(2)‑‑‑Instalment of decretal amount ‑‑‑Scope‑‑­Both the parties agreed to payment of decretal amount in instalments‑‑‑High Court allowed instalment in circumstances.

M.A. Khan for Plaintiff.

Salim Saalam Ansari for Defendants.

2002 C L D 1466

[Karachi]

Before Syed Sayed Ashhad, CJ

Malik JEHANGIR KHAN‑‑‑Applicant

versus

BANKING TRIBUNAL No. 1, KARACHI DIVISION, KARACHI and 4 others‑‑‑Respondents

Civil Transfer Application No. 17 of 2000, decided on 4th December, 2000.

(a) Jurisdiction‑‑‑

‑‑‑‑ Pecuniary jurisdiction of Court‑ ‑‑Proceedings in suits or matters involving subject‑matter of value less than the minimum pecuniary jurisdiction conferred on the Court‑‑­When a Court is conferred pecuniary jurisdiction at a higher stage or level then it continues to have jurisdiction to proceed with suits or matters involving subject‑matter of the value less than the minimum pecuniary jurisdiction conferred on it.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.2(b)(i) & 4‑‑‑Civil Procedure Code (V of 1908), Ss.24 & 151‑‑‑Banking Court, jurisdiction of‑‑‑Consolidation of cases‑‑‑Transfer of case from Banking Court, to High Court for adjudication‑‑‑Suit filed by the applicant was pending in High Court whereas the Bank had filed a suit which was pending in the Banking Court‑‑‑Application under S.24, C.P.C. was filed for transfer of the case pending before Banking Court to High Court‑‑‑Objection raised by the Bank was that suit sought to be transferred had the value of the subject‑matter less than thirty million Rupees, therefore, the same could not be adjudicated by High Court‑‑‑Validity‑‑‑On the basis of principle that the greater included the less would be applicable in the facts and circumstances of the present case‑‑‑Conferment of jurisdiction at a higher stage or level on High Court by the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997. would not deprive High Court of its power to proceed with matters wherein the subject‑matter was of the value less than the minimum or lower limit of the jurisdiction‑‑­High Court had jurisdiction to proceed with a suit filed under the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act. 1997, wherein the subject‑matter was less than Rs.30 Million‑‑‑High Court observed that it would be proper, convenient and in the interest of justice that both the suits should be tried by one and the same Court as parties therein were the same and the issues/disputes which required determination were also identical and similar‑‑‑If both the suits were allowed to proceed in two different Courts then the possibility of conflicting decisions /findings being given could not be ruled out which would cause prejudice and injustice to the parties‑‑‑Suit pending before the Banking Court was transferred to High Court‑‑‑Application was allowed in circumstances.

Reference No. l of 1988 made by the President of Pakistan under Article 186 of the Constitution of the Islamic Republic of Pakistan PLD 1989 SC 75 and Syed Ali Azhar Naqvi v. The Government of Pakistan and 3 others PLD 1994 Kar. 67 distinguished.

Mst. Sajida Yousaf v. Lahore Development Authority 1989 MLD 225; Shahzada Sultan Humayun v. Nasiruddin 1984 CLC 3090; Kadir Bux and others v. The Crown PLD 1955 FC 79; Pakistan Fisheries Ltd., Karachi and others v. United Bank Ltd. PLD 1993 SC 109; Utility Stores. Corporation of Pakistan Limited v. Punjab Labour Appellate Tribunal and others PLD 1987 SC 447 and Malik Gul Hassan & Co. and 5 others v. Allied Bank of Pakistan 1996 SCMR 237 ref.

Amir Hani Muslim for Applicant.

Rizwan Ahmed Siddiqui for Respondent No.2.

Miss Masooda Siraj for Respondent No.4.

2002 C L D 1519

[Karachi]

Before Zahid Kurban Alvi, J

AMINUDDIN‑‑‑Petitioner

versus

AZAD FRIENDS & CO. ‑‑‑Respondent

Judicial Miscellaneous No.226 of 1996, decided on 6th April, 1999.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.305(e), (f)(iii)(iv)(v), 320 & 248‑‑‑Winding‑up of Company on ground of its inability to pay debt, mis­management and non‑declaration of dividends ‑‑‑Validity‑‑­Petitioner had not placed any material on record to show such inability of Company except a bare allegation in petition‑‑‑Neither petition nor balance‑sheet showed that any liability was due or that any creditor had initiated any proceedings for recovery of dues‑‑‑Company was a going concern and its assets far exceeded its liabilities as per its balance‑sheet‑‑‑Largest creditors, Bank of the Company, had opposed the petition‑‑‑Employees' Union had not shown anxiety as to Provident Fund dues, but had opposed winding‑up petition‑‑‑Burden was on petitioner to substantiate his allegations by reliable evidence in order to shift the burden on to the respondents to controvert petitioner's allegations‑‑‑Petitioner and respondents had levelled various allegations against each other by way of affidavits, counter‑affidavits and affidavits‑in‑rejoinder‑‑­None of the parties had opted to cross‑examine the other‑‑­None of the creditors and shareholders except the petitioner had supported the winding‑up petition‑‑‑Difficult to prefer the wishes of one shareholder as opposed to remaining shareholders having an overwhelming majority of nearly 6996‑‑‑Petitioner's allegations could not be accepted in absence of any material on record and any support from creditors of Company‑‑‑Declaration of dividends was in the discretion of Board of Directors‑‑‑Nothing on record was available to show that such discretion had not been properly exercised‑‑‑Petitioner had not made out a case for winding-­up of Company‑‑‑High Court dismissed the petition in circumstances.

Messrs Platinum Insurance Company Limited, Karachi v. Daewoo Corporation, Sheikhupura PLD 1999 SC 1; Habib Bank Limited v. Hamza Board Mills Limited and others PLD 1996 Lah. 633; PICIC v. Messrs Indus Steel Pipe Limited 1993 MLD 94; Tripura Administration v. Tripura State Bank Limited AIR 1959 Tripura 41;. Tweed Garages Ltd. (1962) All ER 121; PICIC v. Electric Lamp Manufacturers of Pakistan Limited J.M. No.3 of 1993: Pakistan Industrial Credit and Investment Corporation Ltd. v. Bawany Industries PLD 1998 Kar. 45; Muzaffar Abbas Malik and 2 others v. Messrs Pakistan PVC Ltd. PLD 1998 Kar. 71: United Bank Limited v. Golden Textile Mills Limited PLD 1998 Kar. 330; Messrs Metito Arabia Industries Limited v. Messrs Gammon (Pakistan) Limited 1997 CLC 230; Investment Corporation of Pakistan v. Messrs Charagh Sun Engineering Limited PLD 1997 Kar. 504; Messrs Central Cotton Mills Ltd. and another v. Gulzar Ahmed and 8 others PLD 1992 Kar. 29; Mrs. Sabiha Shahid Raza v. Ahmad Construction Company (Pvt.) Limited PLD 1990 Kar. 191; Ladli Parsad Jaiswal v. The Karnal Distillery & Co. Limited PLD 1965 SC 221: Muhammad Shabbir Khan and others v. Muhammad Anwar 1988 CLC 1955; Messrs Nagina Films Limited v. Usman Hussain and others 1987 CLC 2263; Mansoor Ali Bandeali v. Marine Food Industries Limited 1985 CLC 1239; Feroz‑ud‑Din and 6 others v. Pakistan Hotel Developers limited and 7 others PLD 1996 Kar. 300; Alliance Motors (Pvt.) Limited 1997 MLD 1966; Ulbricht's Wsw. GES M.B.H., Austria v. Ulbricht's (Pakistan) (Pvt.) Limited PLD 1992 Kar. 249; Rajahmundry Electric Supply Corporation Ltd. v. A. Nageshwara Rao and others AIR 1965 SC 213; In re: Sulekha Works Ltd. AIR 1965 Cal. 98 and Cine Industries and Recording Co. Ltd. AIR 1942 Bom. 231 ref.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305(e) ‑‑‑Winding‑up of Company‑‑‑Inability to pay debt by the Company‑‑‑Such allegation could not be accepted in absence of any material on record and any support from creditors of the Company.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.248‑‑‑Declaration of dividends is in the discretion of the Board of Directors.

Mansoorul Arfin for Petitioner.

M. A. Rehman for Respondents.

Date of hearing: 4th February, 1999.

2002 C L D 1528

[Karachi]

Before Saiyed Saeed Ashhad and S. Ahmed Sarwana, JJ

CGM (COMPAGNIE GENERAL MARITIME)‑‑‑Appellant

versus

HUSSAIN AKBAR‑‑‑Respondent

High Court Appeal No. 107 of 1992, decided on 28th August, 1998.

(a) Carriage of Goods by Sea Act (XXXI of 1925)‑‑‑

‑‑‑‑S.3‑‑‑Bill of Lading is a contract between Shipper and Carrier, which is binding on both the parties.

(b) Carriage of Goods by Sea Act (XXXI of 1925)‑‑‑

‑‑‑‑S.3‑‑‑Contract Act (IX of 1872), Ss.28 & 73‑‑‑Arbitration Act (X of 1940). S.34‑‑‑Civil Procedure Code (V of 1908), O. VII, R. 10‑‑‑Suit for damages by cargo‑owner for breach of contract in respect of Bill of Lading‑‑‑Objection of ship‑owner as to institution of suit at Karachi contending that same should have been filed before Tribunal in Paris according to jurisdiction clause in the Bill of Lading‑‑‑Refusal of Court to return the plaint‑‑‑Validity‑‑‑Court should preserve the sanctity of contract between the parties and treat the jurisdiction clause in the same manner as an arbitration clause, stay the action pending before it and allow the parties to resort to the forum of adjudication to which they had agreed‑‑‑Court by staying the action before it would still retain to itself the jurisdiction to resume the case if the adjudication agreed to between the parties for any reason failed or the parties found it impossible to comply with the form of adjudication in the forum to which they had agreed‑ ‑‑Jurisdiction clause of Bill of Lading in the present case could not oust the jurisdiction of Pakistan Court‑‑­Refusal of Court below to return the plaint was not justified.

(c) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.28‑‑‑Arbitration Act (X of 1940), S.34‑‑‑Foreign jurisdiction clause in a contract‑‑‑Burden to satisfy Court as to justification for staying its proceedings lies on person, seeking stay of proceedings and reference of dispute to foreign forum.

(d) Carriage of Goods by Sea Act (XXXI of 1925)‑‑‑

‑‑‑‑S.3‑‑‑Contract Act (IX of 1872), Ss.28 & 73‑‑‑Civil Procedure Code (V of 1908), Ss.20, 151 & OXII, R.10‑‑­Arbitration Act (X of 1940), S.34‑‑‑Suit for damages by cargo‑owner for breach of contract in respect of Bill of Lading‑‑‑Stay of proceedings‑‑‑Ship‑owner and his agent objected to institution of suit at Karachi contending that same should have been filed before Tribunal de Commerce in Paris according to jurisdiction clause in Bill of Lading ‑‑­Refusal of Court to stay suit‑‑‑Validity‑‑‑Ship‑owner or his agent had not given any reason for the stay of proceedings in Karachi Court‑‑‑Court in such state of affairs had to make its own assessment to exercise its discretion to stay the proceedings‑‑‑Goods were loaded at Karachi Port, and a part of cause of action had arisen there, thus, suit had been filed properly‑‑‑Port of destination was Monrovia, where consignment was delivered to Port Authorities and thereafter were destroyed or looted in civil war that erupted there‑‑‑Choice was between Tribunal in Paris or Pakistan, where present suit had been filed‑‑‑Dispute would be governed by law of France on the basis of jurisdiction clause‑‑‑Law of France on the subject would have to be proved by production of expert witnesses in Karachi, which would entail additional expense and inconvenience‑‑‑French Tribunal would be less inconvenient and better placed to decide the dispute under French law‑‑‑Sanctity of contract had to be maintained and enforced‑‑‑Court below had not exercised its discretion in accordance with law‑‑‑Appellate Court accepted the appeal, set aside impugned order and stayed the proceedings with direction to plaintiff/cargo-­owner to refer his dispute for decision by Tribunal de Commerce in Paris as contemplated by Bill of Lading‑‑‑If the action filed by plaintiff before Tribunal at Paris could not commence or was barred by limitation or for any reason failed, then he would be at liberty to move an application before Court below for revival of proceedings.

M. A. Chowdhry v. Mitsui OSK Lines PLD 1970 SC 373 and Eckhardt & Co. Marine GmbH v. Muhammad Hanif PLD 1993 SC 42 ref.

(e) Carriage of Goods by Sea Act (XXXI of 1925)‑‑‑

‑‑‑‑S.3‑‑‑Contract Act (IX of 1872), Ss.28 & 73‑‑‑Civil Procedure Code (V of 1908), OXII, R.10 & S.151‑‑­Arbitration Act (X of 1940), S.34‑‑‑Sindh Chief Court Rules (O.S.), R.111‑‑‑Suit for damages for breach of contract in respect of Bill of Lading containing foreign jurisdiction clause‑‑‑Defendants' application under O. VII, R.10 read with S.15.1, C.P.C. for return of plaint‑‑‑Defendants orally requested the Court to treat such exclusive jurisdiction clause as an arbitration clause, stay the proceedings and direct the plaintiff to resort to agreed forum for settlement of dispute‑‑‑Refusal of Court to accept such oral request‑‑­Validity‑‑‑Relief sought by defendants could be granted by Court below on the basis of Supreme Court Judgment in Mitsui's case reported as PLD 1973 SC 373‑‑‑Reference to O.VII, R.10, C.P.C. in the application was immaterial as defendants had ‑ also mentioned therein S. I 51, C. P. C. , whereunder Court below had inherent jurisdiction to make such order necessary for ends of justice‑‑‑Court below should have granted relief claimed under inherent powers of Court available under S.151, C.P.C.‑‑‑Rule III of Sindh Chief Court (O.S.) Rules, inter alia, provided that motions might be made orally in matters of routine or in matters wholly within the discretion of Court‑‑‑Oral request made before the Court was based on indisputable facts and documents and no further information or evidence was required‑‑‑Court should have exercised its discretion and granted the relief on oral request‑‑Court had not exercised its discretion in accordance with law‑‑‑Appellate Court accepted the appeal and set aside impugned order and allowed the relief claimed by defendants.

M. A. Chowdhry v. Mitsui OSK Lines PLD 1970 SC 373 fol.

(f) Limitation Act (IX of 1908)‑‑‑

‑‑‑‑S.5‑‑‑Condonation of delay‑‑‑No formal application‑‑‑Mere oral application/request‑‑‑Validity‑‑‑Court was competent to consider oral application for condonation of delay.

Sh. Ghulam Muhammad v. The Bank of Bahawalpur 1971 SCMR 148 fol.

(g) Administration of justice‑‑‑

‑‑‑‑ Omission to mention a provision of law or mentioning a wrong provision of law would not render an application invalid or make same fatal to grant of relief, if it was otherwise available under the law to an aggrieved party.

Imtiaz Ahmed v. Ghulam Ali and others PLD 1963 SC 382: 1982 SCMR 673 and 1994 SCMR 1555 ref.

M. H. Kazmi for Appellant.

Muhammad Naeem for Respondent.

Date of hearing: 12th August, 1998.

2002 C L D 1545

[Karachi]

Before Mushir Alam, J

MUHAMMAD SABIR‑‑‑Appellant

Versus

KHALIL‑UR‑REHMAN‑‑‑Respondent

First Appeal No. 14 of 1987, decided on 6th March, 2002.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O. XXXVII, R.2‑‑‑Negotiable Instruments Act (XXVI of 1881), Ss.20 & 118‑‑‑suit for recovery of money based upon promissory note‑‑‑Defendant's contention was that promissory note was executed on 6‑10‑1981, and not on 24‑5‑1982 as claimed by plaintiff, who had filled up said date to bring the suit within limitation ‑‑‑Validity‑‑­Presumption under S.118 of the Negotiable Instruments Act was attached to a negotiable instrument as to receipt of consideration, date of execution, time of acceptance, time of transfer, order of endorsement, stamp and holder in due course, unless contrary was proved‑‑‑If filling up of date as 24‑5‑1982 was presumed to be subsequent, even then as per S.20 of the said Act, the authority to fill up the date and complete the instrument vested in the hands of recipient, which authority apparently had been exercised within three years from the date of execution as claimed by the defendant‑‑‑Such authority was not denied to have been conferred on plaintiff‑‑‑Contention was devoid of force.

Messrs United Bank Ltd. v. President, Bazm‑e‑Salat and another PLD 1986 Kar. 464; Bazm‑e‑Salat and others v. Messrs United Bank Ltd. PLD 1989 Kar. 150 and National Bank of Pakistan v. Aziz‑ul‑Hassan 1984 CLC 1035 ref.

(b) Negotiable Instruments Act (XXVI of 1881)‑‑‑

‑‑‑‑S.118‑‑‑ganun‑e‑Shahadat (10 of 1984), Art.119‑‑­Presumption attached to negotiable instrument‑‑‑Plea in rebuttal of such presumption‑‑‑Burden of proof‑‑‑Where statutory presumption is attached as to existence of any fact, then any person setting up a plea in rebuttal, takes upon himself to prove such plea in rebuttal.

(c) Negotiable Instruments Act (XXVI of 1881)‑‑‑

‑‑‑‑S.118‑‑‑Qanun‑e‑Shahadat (10 of 1984), Art.119‑‑­Presumption attached to negotiable instrument‑‑‑Burden of proof to rebut such presumption‑‑‑Plea of maker of such instrument was that after having denied consideration, the burden to prove consideration shifted upon holder thereof‑‑­Validity‑‑‑Section 18(a) of the Negotiable Instruments Act laid down a special rule of evidence contrary to general rule of burden of proof‑‑‑Burden to dispel statutory presumption was always on the party seeking to rebut the same as to the existence of consideration‑‑‑Once execution of such instrument was admitted, then it was for the maker to disprove consideration.

Mst. Sughran Begum and 11 others v. Haji Mir Qadir Bukhsh and 2 others PLD 1986 Quetta 232 and United Bank Ltd. v. Mrs. Bilquees Begum and 3 others 1988 CLC 1613 and S.K. Abdul Aziz v. Mahmoodul Hassan and 3 others 1998 CLC 337 ref.

(d) Negotiable Instruments Act (XXVI of 1881)‑‑‑

‑‑‑‑S.4‑‑‑Stamp Act (II of 1899), Ss. 12 & 35‑‑‑Promissory note‑‑‑Affixation and cancellation of adhesive stamps‑‑­Mode‑‑‑‑Affixation of stamp and its cancellation on promissory note is sufficient compliance of Stamp Act, 1899‑‑‑No particular mode is provided therefore under S.12 read with S.35 of Stamp Act, 1899.

Malik Muhammad Akram v. Khuda Bakhsh 2000 CLC 759 and National Bank of Pakistan v. Messrs M. Ismail Thakur & Sons Ltd. 1988 CLC 700 ref.

Ejaz Ali Hakro for Appellant.

Muhammad Umar Daudi for Respondent.

Date of hearing: 14th February, 2002.

2002 C L D 1550

[Karachi]

Before S. Ahmed Sarwana and Syed Zawwar Hussain Jaffery, JJ

Agha ATTAULLAH‑‑‑Petitioner

Versus

PRESIDING OFFICER, BANKING COURT and others‑ ‑Respondents

Civil Petition No. 1160 and Civil Miscellaneous Application No.2375 of 2000, decided on 31st May, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr.58, 100 & 101‑‑‑Execution of decree‑‑‑Mode of‑‑‑Court has the discretion to either follow the procedure laid down in the Civil Procedure Code, 1908 or follow any other mode that the Court may deem fit in the circumstances of the case‑‑­Where the judgment‑debtor or any person claiming through the judgment‑debtor does not voluntarily give possession of the mortgaged property, the Banking Court has the power to put the Banking Company or the purchaser of the premises in possession of the mortgaged property in any manner deemed fit by it‑‑‑Principles.

Section 18 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 gives very wide powers to the Banking Court to execute the decrees passed by it.

The provisions of C.P.C. are not mandatory but are only directory in nature and the Court has been given the discretion to execute the decree in accordance with the provisions of C.P.C. or in any other manner it may deem fit. It is also indisputable that the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was enacted because the previous legislation in the field was not found effective for recovering the claims of the banks expeditiously and keeping in view the delays that were occurring. The Legislature considered it fit to give greater flexibility and discretion to the Banking Court so that the claims of the banks may be recovered without undue delay.

Act is a special statute and the provisions of the special law prevail over the general provisions of C.P.C. Section 18 of the Act recognizes this position and clearly states that the Court has the discretion to either follow the procedure laid down in C.P.C. or follow any other mode that the Court may deem fit in the circumstances of case.

Where the judgment‑debtor or any person claiming through the judgment‑debtor does not voluntarily give possession of the mortgaged property, the Banking Court has the power to put the banking company or the purchaser of the premises in possession of the mortgaged property in any manner deemed fit by it. In the present case, the petitioner was not a tenant of the owner of the property, but claimed to be the tenant of his son who had acquired the property by way of a declaration of gift which was declared to be fraudulent by the High Court.

The tenant did not produce any documentary evidence to show that he was a lawful tenant of the lawful owner of the premises and that he had taken the property prior to the commencement of litigation by the Bank except a copy of the Extract from Property Register Card issued by the City Surveyor. The said document read in light of the declaration of gift by the owner of the property clearly shows that his son, who was a minor of 17 years at the time of the alleged gift had acquired the property from his father by way of an oral gift dated 28‑1‑1987. The Gift Deed was not registered with the Registrar of Conveyances. The stamp paper on which the deed is printed was not purchased by the donor or his son but bears the name of some other person without mentioning his father's name which creates doubt about its authenticity. It is common knowledge that back dated documents can be easily procured in this country. Moreover, no document was produced to‑ show that any step was taken by the owner, the father or his son to have the gifted property transferred in the name of donee when he became a major in 1988. If the gift were bona fide, the father or his son would have taken proceedings to record the change in the Property Register of Excise and Taxation Department maintained under the West Pakistan Immovable Property Tax Act, 1958, Electricity Supply Corporation; Gas Company and the Telephone Department. The copy of the Kirayanama (Tenancy Agreement) produced by the tenant written on a Stamp Paper of Rs.50 was purchased on 25‑9‑1998 in the name of the tenant which clearly shows that the alleged tenancy was created by the son who was not the owner during the pendency of the proceedings before the Banking Court. It is, therefore, apparent that this document was made to avoid the execution of the decree obtained by the Bank against the guarantor.

According to the documents on record judgment-­debtor No.1 first obtained financial facilities in 1988, continued to enjoy the same until 1995 and did not liquidate the liabilities within the agreed time as a result of which the Bank was constrained to file the suit on 21‑12‑1995, inter alia, for recovery of money and for attachment and sale of the mortgaged properties. More than 12 years had passed from the time the financial facilities had been provided and more than seven years had passed since the filing of the suit and no payment had till then been made by the judgment‑debtors to the decree­-holder. To meet the ends of justice, the decree was required to be executed expeditiously so that recovery could be made without delay. Consequently, the order of attachment and sale of the mortgaged properties without strictly following the procedure provided in Order XXI, C.P.C. and following the discretionary powers under section 18 of the Banking Companies Act, 1997 was justified in the circumstances of the case.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18‑‑‑Transfer of Property Act (IV of 1882), S.52‑‑­Execution of decree‑‑‑Mortgaged property‑‑‑Such property could not be validly transferred during the pendency of the proceedings in view of bar contained in S.52, Transfer of Property Act, 1882‑‑‑Where the documents filed by the person who acquired such property did not show that he acquired the title in the .property in good faith and for valuable consideration, the transfer was, prima facie, collusive and was made to prevent the decree‑holders from recovering their lawful dues.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18‑‑‑Civil Procedure Code (V of 1908), O. XXI, Rr.58, 100 & 101‑‑‑Transfer of Property Act (IV of 1882), S.52‑‑­Constitution of Pakistan (1973), Art.199‑‑‑Constitutional petition‑‑‑Execution of decree‑‑‑Jurisdiction of High Court under Art.199 of the Constitution‑‑‑Scope‑‑‑Petitioner had claimed the title of mortgaged property which he had acquired fraudulently‑‑‑High Court would not allow any person to claim any interest in any property through any agreement the foundation of which was based on fraud‑‑­Petitioner having come to the Court with unclean hands was not entitled to any discretionary relief available under Art. 199 of the Constitution in circumstances‑‑‑Principles.

The powers of the High Court under Article 199 of the Constitution are discretionary and depend upon the facts and circumstances of each case. The power is principally available to ensure that justice is done in accordance with law, equity and good conscience. In doing so, the Court also looks, at the conduct of the parties. In the present case, the gift of the mortgaged property by the owner in favour of his son who entered into an agreement of tenancy with the petitioner was fraudulent and was made to defeat the claim of the Bank. The transfer of title in favour of the son in the record of Municipal Corporation was made during the pendency of the suit which is contrary to provisions of section 52 of the Transfer of Property Act, 1882. Several persons had filed objections taking various pleas against the execution of the decree by the decree‑holder which were all rejected by the Banking Court for valid reasons. The petitioner is claiming title through son of the owner of the property which title has been acquired fraudulently. The High Court will not allow any person to claim any interest in any property through any agreement the foundation of which is based on fraud. In the circumstances of the case, the petitioner is clearly not entitled to any discretionary relief available under Article 199 of the Constitution. Petitioner's claim is not bona fide, he has not come to the Court with clean hands, the judgment of the Banking Court is proper and the petitioner is not entitled to any relief whatsoever.

Imdad Ali Awan for Petitioners.

Hafiz Usman Ghani for Respondent No.2.

Shaikh Abdul Ghani, D.A.‑G.

Date of hearing: 19th September, 2001.

2002 C L D 1565

[Karachi]

Before Zahid Kurban Alvi, J

EMPLOYEES' MANAGEMENT GROUP PAK‑SAUDI FERTILIZERS and

others‑‑‑Petitioners

Versus

GOVERNMENT OF PAKISTAN and others‑‑‑Respondents

Suit No.480 of 2002, decided on 24th May, 2002.

Privatization Commission Ordinance (LII of 2000)‑‑‑

‑‑‑‑Ss.23, 24, 25, 28 & 29‑‑‑Constitution of Pakistan (1973), Arts. 153 & 154‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2‑‑‑Privatization of a Company‑‑‑Application for grant of temporary injunction by Employees' Management Group of the company which was being privatized‑‑‑Advertisement, valuation and mode of privatization‑‑‑Procedure‑‑‑Detailed narration of facts as well as the documents produced by all the sides concerned and the counter‑affidavits on record showed that detailed factual position and computation of the value of the shares had been shown‑‑ ‑Advertisement had been made in all the leading newspapers including the foreign ones‑‑‑Valuation of the property had been made out for all practical purposes which stood proved‑‑‑Summary of valuation had been filed which showed that valuers and legal advisor were appointed to evaluate fair value of the company to be privatized‑‑‑Methodology adopted for coming into a fair assumption had been given in detail in the relevant documents‑‑‑Shares of the Company had been offered for sale by inviting tenders from the general public‑‑­Methodology of prequalification and ultimately being in a position to bid for the shares had been given in the advertisement‑‑‑Minutes of Council of Common Interest were on record wherein amongst various things discussed, a list of organizations that were going to be privatized was also annexed and name of the Company which was being privatized, in the present case, was also mentioned in the said list‑‑‑Company in question was located in the Province of Sindh and did not come within the ambit of the matters which the Council of Common Interest would be willing to look into or should look into as provided by the Constitution‑‑‑Not only the plaintiffs were given right to participate but were given all the encouragement to participate at various stages‑‑‑Basic qualifications which were essential for the plaintiffs to pre-qualify were not fulfilled‑‑‑Privatization Commission at the behest of the plaintiffs reduced the amount of bid money and in spite of the reduction the plaintiffs failed to pre‑qualify; in fact they refused/failed to submit a financial plan by insisting that since they had a right of first refusal, therefore, after using this right in the bidding process they would submit their financial plan ‑‑‑Plaintiff s in a number of meetings were asked to complete the prequalification/formalities which they failed to do‑‑‑Authorities having fully complied with the requirements of Ss.23, 24 & 25 of the Privatization Commission Ordinance, 2000 while the plaintiffs had not been able to show that prima facie they had a case for getting an injunction‑‑‑Commission, after having initiated privatization the balance of convenience was shifted to the Authorities and no irreparable loss or injury was likely to be caused to the plaintiffs as they had failed to show either in writing or through arguments that in case the injunction was not granted they would suffer irreparable loss and injury‑‑‑No substance in the application under O.XXXIX, Rr.1 & 2, C.P.C. having been found the application for grant of injunction was dismissed in circumstances.

Muhammad Nawaz Sharif v. President of Pakistan PLD 1993 SC 473; Gadoon Textile Mills v. WAPDA 1997 SCMR 641; Millat Tractors Employees' Trust v. Government of Pakistan PLD 1992 Lah. 68; Amin Ahmad v. Ministry of Production, Government of Pakistan PLD 1996 Kar.27; Muhammad Yaqub Khan v. Board of Revenue 1984 SCMR 940 and Belarus Bela Tractors Limited v. Pakistan 2001 PTD 1829 ref.

Abdul Mujeeb Pirzada and Syed Khalid Shah for Petitioners.

Syed Zaki Muhammad, D.A.‑G., Sajid Zahid and Munir A. Malik for Respondents.

Date of hearing: 16th May, 2002.

2002 C L D 1623

[Karachi]

Before Mushir Alam, J

ABDUL WASIM‑‑‑Plaintiff

Versus

Messrs HAICO through Sole Proprietor/Partner and 2 others‑‑‑Respondents

Suits Nos.1109 and 369 of 2001, Civil Miscellaneous Applications Nos.4885, 26363 and 6092, decided on 25th April, 2002.

(a) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.20(2) & 21‑‑‑Specific Relief Act (I of 1877), S.54, illust.(w)‑‑‑Trade mark‑‑‑Grant of injunction against unauthorized use of trade mark‑‑‑Claiming of infringement of unregistered trade mark‑‑‑Disputed trade mark was unregistered and the plaintiff claimed its infringement by defendants‑‑‑Validity‑‑‑Trade mark applied to a property itself is a property‑‑‑Explanation to S.54 of Specific Relief Act, 1877, recognizes trade marks as property because it is valuable and intangible property and cannot be allowed to be encroached upon by any person‑‑‑Registered owner of a trade mark has exclusive right under S.21 of Trade Marks Act, 1940, to the use of the trade mark in relation to the goods with which ft is reputed to be associated‑‑‑As the trade mark, the subject‑matter of the present suit was not registered, therefore, the plaintiff could not claim any infringement of the mark, at the best plaintiff s claim felt on passing off action recognized in terms of S.20(2) of Trade Marks Act, 1940.

(b) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S.14‑‑‑Right to use a trade mark‑‑‑Such right under S.14 of Trade Marks Act, 1940, vests either in a person who is the proprietor of the mark or who proposes to use a mark and apply in writing to the Registrar.

(c) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S.79‑‑‑Phrase 'publici juris'‑‑‑Applicability‑‑‑Trade mark common to the trade, when largely used unhindered by more than one person in the same trade, such trade mark becomes publici juris and all traders in the same field can claim their right on such trade mark.

Andhra Perfumery Works v. Karupa Surya Narayan AIR 1969 Mad. 129 ref.

(d) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.21, 22, 25 & 26‑‑‑Registered trade mark‑‑‑Right of prior user‑‑‑Scope‑‑‑Exclusive right to use trade mark by virtue of registration is conferred on a proprietor in terms of S.21 of Trade Marks Act, 1940, and such right is sub­servient to exception as provided under Ss.22, 25 & 26 of Trade Marks Act, 1940‑‑‑Exclusively to use mark recognized under S.21 of Trade Marks Act, 1940, does not affect the right of prior user, may it be unregistered‑‑‑Right in a trade mark created by prior user, despite non‑registration was superior right recognized under S.25 of Trade Marks Act, 1940.

(e) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.10(2), 22, 25 & 26‑‑‑Principle of 'passing off action'‑‑­Applicability‑‑‑Plaintiff s mark was not registered and his application for registration was pending‑‑‑Effect‑‑‑Plaintiff could not claim a better right and title in a trade mark than a registered trade mark holder, whose rights were sub­servient to the exception provided under Ss.22, 25 & 26 of Trade Marks Act, 1940‑‑‑In the present case, right, if any, that could be claimed by the plaintiff was of passing‑off action' on the basis of pendency of application‑‑‑Right to agitate passing‑off action' was also sub‑servient to the right and exception as provided under Ss.10(2), 22, 25 & 26 of Trade Marks Act, 1940.

Colgate Palmolive Limited and another v. Markwell Finance Limited and another 1988 RPC 283 distinguished.

(f) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.20, 22, 25 & 26‑‑‑Infringement of trade mark of foreign origin‑‑‑Protection to imitator ‑‑‑Pendency of application for registration‑‑‑Mark in question was stated to be imitation of 'N.T.N.' a mark of Japanese origin, which was also registered in Pakistan‑‑‑Effect‑‑‑Where the goods were being imported in Pakistan by more than one importers, it would be difficult for any of the importer to appropriate the trade mark of foreign origin without there being any evidence on record, to the effect that a party was importing particular goods under a licence from registered holder of a foreign trade mark‑‑‑Imitator could not claim any right or protection under the Trade Marks Act, 1940.

1991 CLC 382 ref.

(g) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.20, 22, 25, 26 & 79‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2‑‑‑Interim injunction, grant of‑‑‑Unregistered trade mark‑‑‑Goods of foreign origin‑‑‑During pendency of application for registration of trade mark 'N.B.N.', the plaintiff sought injunction against the defendants for the use of the trade mark‑‑‑From the various documents produced by the defendant, it was apparent that prima facie, same mark was being used by other persons in the same trade even prior to a date when plaintiff in the year 1997 decided to adopt the same‑‑‑Contention of plaintiff was that he was the originator and proprietor of the subject mark which had been adopted by him since 1997‑‑‑Validity‑‑‑Defendants, prima facie, were able to demonstrate that the trade mark in question was common to the trade use and there had been unhindered concurrent as well as prior user of the subject trade mark by various traders‑‑­Plaintiffs claim of exclusive proprietary right was doubtful‑‑­Plaintiff failed to make out a prima facie case for the grant of injunction, balance of convenience was in favour of defendants‑‑‑Interim injunction was declined in circumstances.

Sunder Parmanand Lalwani and others v. Caltex (India) Ltd. AIR 1969 Bom.24; The Imperial Tobacco Company of India Limited v. Albert Bonnan and Bonnan & Company AIR 1924 PC 18; Secretary, B&R, Government of West Pakistan and 4 others v. Fazal Ali Khan PLD 1971 Kar.625; Province of the Punjab through Member, Board of Revenue, (Residual Properties), Lahore and others v. Muhammad Hussain through Legal Heirs and others PLD 1993 SC 147; Haji Abdul Aziz v. Government of Balochistan through Deputy Commissioner, Khuzdar 1999 SCMR 16; Ferozuddin v. Muhammad Shafi and another PLD 1975 Kar.486; Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090 and Messrs Ghulam Muhammad Dossul & Co. v. Messrs Vulcan Co. Ltd. and another 1984 SCMR 1024 ref.

(h) Customs Act (IV of 1969)‑‑‑

‑‑‑‑S.15(e)‑‑‑Importer of goods‑‑‑Prohibition‑‑‑Registered trade mark‑‑‑Provisions of S.15(e) of Customs Act, 1969‑‑‑Scope‑‑­Such provision of law is only attracted in case where trade mark is registered in Pakistan and other persons are importing or getting the goods manufactured from abroad‑‑­Held, Provision of S.15(e) of Customs Act, 1969, would not apply in cases of unregistered mark.

Messrs Ghulam Muhammad Dossul & Company v. Messrs Vulcan Company Limited and another 1984 MLD 886 ref.

Ms. Navin Merchant for Plaintiff.

Raja M. Iqbal for Defendant No. 1.

Muhammad Aslam for Defendant No.2.

Dates of hearing: 12th November, 2001; 14th and 21st January, 2002.

2002 C L D 1639

[Karachi]

Before Mushir Alam, J

Messrs DURAFOAM (PVT.) LTD. through Managing Director, and another--

Plaintiffs

Versus

Messrs VOHRA ENTERPRISES (PVT.) LTD. through Managing

Director‑‑‑Defendant

Suit No. 126 of 2002, decided on 31st May, 2002.

(a) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.21, 22, 25 & 26‑‑‑Right conferred by registration‑‑­Scope‑‑‑Exclusivity of user attached to registered trade mark is not absolute, but is subject to limitation as provided under Ss.22, 25 & 26 of the Trade Marks Act, 1940‑‑‑Such exclusivity would not affect the right of a prior user, though unregistered‑‑‑Right in trade mark created by prior user despite non‑registration is superior right recognized under S.25 of the Act.

Abdul Wasim v. Messrs SACO Traders Private Limited and another Suit No.369 of 2001 fol.

(b) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S.25‑‑‑Unregistered prior user of disputed trade mark‑‑­Claim by such user for protection under S.25 of Trade Marks Act, 1940 against infringement action‑‑‑Burden of proof‑‑­Principles.

By virtue of section 25 of Trade Marks Act, 1940, protection against infringement action is extended to the unregistered user of a trade mark. To claim such right, burden is on the person claiming protection under section 25 of the Act. A person claiming right of a prior user in terms of section 25 has to prima facie demonstrate that contesting mark is in his continuous use; such continuous use is prior in time to the mark used by a person, who claimed to be a proprietor of such mark and or from the date of registration of the subject mark in respect of the same goods, and there is honest and concurrent user as recognized under section 10(2) of the Act.

Initial burden is on the person claiming rights under section 25 of the Act, to prima facie demonstrate through material his prior use of the contesting mark.

(c) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXIX, Rr.1 & 2‑‑‑Application for temporary injunc­tion‑‑‑Decision of‑‑‑Tentative assessment of pleadings etc.‑‑­Interlocutory applications like one under O.XXXIX, Rr.1 & 2, C.P.C., are generally decided on the basis of tentative assessment of pleadings, affidavits, counter‑affidavits, rejoinder, if any, and documents annexed thereto.

(d) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.21 & 25‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2‑‑‑Suit for injunction, infringement and accounts‑‑­Application for grant of temporary injunction‑‑‑Photo copies of sale invoices produced by plaintiff and defendant in support of their claim‑‑‑Both the parties had their reservation as to authenticity and credibility of such sale invoices‑‑‑Such photo copies of sale invoices were not prima facie credible material.

(e) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.21 & 25‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2‑‑‑Suit for injunction, infringement and accounts‑‑­Application by plaintiff for grant of temporary injunction‑‑­Plaintiff applied for registration of subject mark on 17‑1‑1984 claiming to be two months prior user thereof‑‑­Defendant applied for registration of subject mark on 2‑12‑1979, which was advertised in Trade Mark Journal on 2‑12‑1982‑‑‑Such application was treated as abandoned for defendant's failure to deposit registration fee‑‑‑Defendant filed interlocutory application on 15‑8‑1988, which was found to be incompetent‑‑‑Defendant again applied for registration on 22‑8‑1988‑‑‑Defendant produced advertisement materials showing advertisement in newspaper and also on Television much anterior to adoption of subject mark by plaint‑‑Sale figures produced by plaintiff being contradictory to each other did not prima facie, inspire confidence, thus, could not be given any credence at such stage‑‑‑Defendant had applied earlier for registration of subject mark and had successfully demonstrated that it was prior user and was entitled to protection as recognized under S.25 of the Act‑‑‑Application was dismissed in circumstances.

Muhammad Haroon and another v. F.Y. & Brothers and another 1986 MLD 930; Zakauddin v. Muhammad Zahid and 2 others PLD 1993 Kar.766; Messrs Chas A. Mendoza v. Syed Tausif Ahmed Zaidi and 2 others PLD 1993 Kar. 790 and Messrs Tri‑Star Industries (Pvt.) Ltd. v. Messrs Trisa Bursten Tabrik A.G. and others 1999 YLR 638 ref.

(f) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.21 & 25‑‑‑Suit for infringement of trade mark‑‑‑Rights of concurrent user of contentious mark‑‑‑Burden of proof‑‑‑Plaintiff was registered holder of subject mark, whereas defendant claimed to be prior user thereof‑‑‑Plaintiffs plea was that dismissal of defendant's application for rectification amounted to abandonment and waiver on its part to use the subject mark‑‑‑Validity‑‑‑Such circumstance might prima facie, go in favour of plaintiff in the context of concurrent user‑‑‑Such fact of uninterrupted use of subject mark and registration thereof in favour of plaintiff might amount to waiver arid acquiescence as plaintiffs right to claim protection on the basis of concurrent user was concerned‑‑‑Rights of concurrent user was also qualified and subject to proof of "honest concurrent use or of other special circumstance" as might be required in a particular case.

(g) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑Ss.21 & 25‑‑‑Registered holder of a trade mark and unregistered prior user thereof ‑‑‑Distinction between their rights‑‑‑Right of prior user is preferential and superior right subject to proof as against the right of registered holder of contentious mark recognized under S.21 of the Act‑‑‑Right of prior user is valuable and superior right than the right of registered holder of contentious mark‑‑‑Right of prior user in terms of S.25 is not dependent on registration‑‑‑Prior user of unregistered contentious mark in a defensive action has to satisfy the Court that he is using such mark extensively prior to the use by registered proprietor.

Abid Zuberi and Asghar Farooqi for Plaintiffs.

Sajjad Ali Shah for Defendant.

Date of hearing: 2nd May, 2002.

2002 C L D 1653

[Karachi]

Before Sarmad Jalal Osmany, J

PFIZER LIMITED and another‑‑‑Plaintiffs

Versus

WILSON'S PHARMACEUTICALS‑‑‑Defendant

Suit No.316 and Civil Miscellaneous Applications Nos.2038, 2667 and 2668 of 1999, decided on 22nd March, 2002.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S.10‑‑‑Stay of proceedings .in subsequent suit‑‑‑Essential conditions‑‑‑Object‑‑‑Principles.

Three essential conditions are to be considered in an application under section 10, C.P.C. viz. that matter in dispute in the second suit is directly and substantially in issue in the first suit, secondly, that parties in both the suits are same, and finally that the Court in which the first suit was instituted was competent to grant the relief claimed in the second suit. The object being to avoid conflict of judicial decisions by preventing Courts having concurrent jurisdiction from simultaneously adjudicating upon two or more parallel suits in which the matter in issue is same as well as the parties.

Jannana De Malucho Textile Mills Limited v. Waqar A. Chaudhry PLD 1972 SC 34; S.M. Akil Fikree v. Muhammad Qamruzzaman PLD 1982 Kar. 745; HBL v. Ali Mohtarim Naqvi PLD 1987 Kar. 102; Mst. Arifa Begum v. Khulqe Muhammad Naqvi PLD 1969 Kar. 193; Syed Ali v. Muhammad Mustafa PLD 1971 Dacca 286; PICIC v. Modern Embroidery and Textile Mills Limited PLD 1976 Kar. 249 and Muhammad Younus v. Nargis Sultana PLD 1970 Lah. 41 ref.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S.10‑‑‑Patents and Designs Act (II of 1911), S.36‑‑­Specific Relief Act (I of 1877), Ss.42 & 54‑‑‑Stay of suit‑‑­Defendant having earlier filed suit at place D prayed for stay of second suit filed at place K‑‑‑Relief claimed by defendant in first suit was for declaration that he was a lawful importer/manufacturer/seller of drug namely "Sofvasc" and for permanent injunction restraining present plaintiff from threatening causing hindrance in importing/manufacturing/selling said drug‑‑‑Second/present suit was for permanent injunction restraining defendant from infringing plaints patent‑‑‑Federal Government was party in first suit, whereas in second/present suit, it was not so‑‑­Validity‑‑‑Both the suits were quite different in nature‑‑­Parties in both the suits were not the same‑‑‑Decision in first suit would not operate as res judicata in second/ present suit‑‑‑Application was rejected in circumstances.

(c) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S. 20‑‑‑Expression "cause of action"‑ ‑‑Connotation‑‑­Cause of action consists of every fact, which if traversed should be necessary for plaintiff to prove in order to support his right to judgment, and if not proved gives the defendant a right to judgment.

(d) Patents and Designs Act (II of 1911)‑‑‑

‑‑‑‑S. 36‑‑‑Civil Procedure Code (V of 1908), S.20(c) & OXII, R.10‑‑‑Suit for restraining infringement of plaintiffs' patent‑‑­Cause of action‑‑‑Return of plaint‑‑‑Plaintiffs alleged infringement of their patent by defendant registered in Pakistan (Karachi)‑‑‑Defendant denied the allegation by asserting that it was using a process entirely different from that of plaintiffs‑‑‑Defendant's prayer for return of plaint on the ground that no cause of action had arisen to plaintiffs in Karachi‑‑‑High Court had jurisdiction in terms of S.20(c), P.P.C., as cause of action had also arisen to plaints in Karachi.

Mst. Faizan v. Pakistan PLD 1970 Kar. 362; In re: Office Reference PLD 1981 Kar. 210; Bawany Violin Textile Mills Limited v. Firdous Calico Printing Mills PLD 1959 (W.P.) Lah. 522; I.T.O., Mardan v. Sanaullah Khan PLD 1976 SC 790 and Lahore Development Authority v. Senbear Corporation PLD 1984 Lah. 430 ref.

(e) Pa ten is and Designs Act (II of 1911)‑‑‑

‑‑‑‑S. 36‑‑‑Civil Procedure Code (V of 1900, O.VII, R.10‑‑­Sindh Courts Act (VII of 1926), S.8‑‑‑Karachi Courts Order (P.O. II of 1956), S.2 & Sched., Part A, para.1‑‑‑High Court of West Pakistan (Establishment) Order (XIX of 1955), Art.5‑‑­Suit for infringement of patent, declaration and damages in the sum of Rs.30 million‑‑‑Return of plaint‑‑‑Defendant's objection was that suit in respect of patent must have been filed before District Court in terms of S.36 of Patents and Designs Act, 1911, thus, High Court to that extent had no jurisdiction to try present suit‑‑‑Validity‑‑‑High Court was the principal Court of original civil jurisdiction within the civil jurisdiction of District Karachi in respect of money matters valued at Rs.5 lacs and above‑‑‑Suits valued at Rs.5 lacs and above, the cause of action of which arose within District of Karachi would be filed in High Court at Karachi‑‑‑Prayer in present suit was not only confined to declaration and injunction as regards plaintiffs' patent, but also for damages in the sum of Rs.30 million which could only be filed in High Court at Karachi as its value exceeded pecuniary jurisdiction of District Court, which was confined to civil suits involving recovery of damages/compensation only up to Rs.5,00,000‑‑‑High Court rejected the application in circumstances.

Mst. Faizan v. Pakistan PLD 1970 Kar. 362 rel.

Bawany Violin Textile Mills Limited v. Firdous Calico Printing Mills PLD 1959 (W.P.) Lah. 522 distinguished.

(f) Patents and Designs Act (II of 1911)‑‑‑

‑‑‑‑Ss.29, 31 & 36‑‑‑Suit for infringement of patent‑‑‑Prayer for temporary injunction‑‑‑Plaintiffs patent, was for a process for preparing "besylate salt of amodipine" and pharmaceutical compositions thereof‑‑‑Such process was the reaction of 'amlodipine' base with a solution of 'benzenessulfonic acid in an inert diluent, , wherefrom 'besylate salt of amlodipine' could be obtained and was then marketed by plaintiff as "Norvasc"‑‑‑Plaintiff produced expert opinions from abroad in support of its claim to have discovered such process of preparing the drug‑‑‑Defendant claimed to have manufactured its own drug known as "Sofvasc" from imported amlodipine besylate', but could not show that how its process of manufacture differed from that of plaintiff ‑‑‑contained in defendant's carton was the copy of plaintiffs carton as to description, indication, adverse reaction etc. ‑‑‑Prima facie plaintiff had made out a case for grant of temporary injunction‑‑‑Balance of convenience favoured the plaint ff, who had spent huge amounts in research and development of the drug in question‑‑‑Mere registration of defendant with Government of Pakistan as licensed importer of drugs would not entitle it to manufacture and market any drug, which was an infringement of an existing patent owned by another person/company‑‑‑Defendant's drug known as "Sofvasc" containing 'amlodipine besylate' was manufactured through the process patented by plaintiff, which was an infringement of such process‑‑‑High Court allowed the plaintiffs application by restraining defendant from manufacturing, importing, marketing and selling its drug known as "Sofvasc" containing 'amlodipine besylate' or any composition thereof till decision of the suit.

Glaxo Group v. Evron (Pvt.) Ltd. 1992 CLC 2382; Glaxo Group Ltd. v. Pakistan Pharmaceutical Products (Pvt.) Ltd. 1991 MLD 85 and Sandoz Limited v. Pakistan Pharmaceutical Product (Pvt.) Ltd. 1987 CLC 571 ref.

Muneeb Akhter for Plaintiff.

Fazl‑i‑Husain for Defendant.

2002 C L D 1665

[Karachi]

Before Muhammad Moosa K. Leghari, J

Messrs TAURUS SECURITIES LIMITED‑‑‑Plaintiff

Versus

ARIF SAIGOL and others‑‑‑Defendants

Suit No.975 of 2000, decided on 16th January, 2002.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXIX, R. 1 ‑‑‑Suit by public limited company ‑‑‑Institution of suit by an incompetent person‑‑‑Maintainability‑‑‑Suit was instituted, plaint was signed and verified by N claiming to be Acting Managing Director of plaint company on the basis of general power of attorney executed in his favour by M and S, whose position was not ascertainable‑‑‑Neither any resolution passed by Board of Directors for appointment of Attorney had been produced nor Memorandum and Articles of Association of the company had been exhibited /produced in order to ascertain as to whether M and S in fact had possessed authority to delegate/re-­delegate powers for instituting suit‑‑‑Whether initiative to institute the suit had come from company or the authority entrusted with the management thereof under the Articles of Association was also not ascertainable‑‑‑Burden to show institution of suit by authorized person was upon plaintiff‑‑­Plaintiff had failed to discharge such burden‑‑‑Such defect in institution of suit was incurable‑‑‑Suit having been filed by an incompetent person was dismissed being not maintainable.

Muhammad Siddique's case PLD 1966 SC 684; Khan Iftikhar Hussain Khan Mamdot's case PLD 1971 SC 550; Abdul Rahim and 2 others v. Messrs United Bank Ltd. of Pakistan PLD 1997 Kar. 62; Friendship Textile Mills (Pvt.) Ltd. and others v. Government of Balochistan and others 1998 CLC 1767 and China Annang Construction v. K.A. Construction Cc. 2001 SCMR 1877 ref.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXIX, R.1‑‑‑Suit by a company‑‑‑Institution of suit through an authorized person‑‑‑Burden of proof‑‑‑Burden to show that suit was filed by an authorized person was upon the plaints company.

(c) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXIX, R. 1 ‑‑‑Suit by a company‑‑‑Institution of suit through an unauthorized/ incompetent person‑‑‑Effect‑‑‑Such defect in institution of suit is not curable.

(d) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXIX, R.1‑‑‑Suit by a company‑‑ ‑Delegation of authority by the company to a particular person or director to institute legal action on its behalf‑‑‑Method and proof‑‑‑Principles.

The business and affairs of a company include the power, competence and authority to institute legal action. By deduction, the factum of competence and authority to institute legal proceeding would also have to be determined strictly in consonance with the articles of the company. Where articles of the company confer power on a particular person or director to institute legal action and that person or director institutes the suit, there can be no additional requirement of a resolution of the Board of Directors for the simple reason that such power is to be exercisable by a real person. However, where the power to institute the suit is conferred upon an artificial person or body e.g. the Board of Directors or a Committee, the requirement to produce and prove the resolution passed by that artificial person or body cannot be dispensed with since such a person can only take a decision as a body through a resolution passed in a duly convened meeting and not otherwise. In order to ascertain as to whether a delegator is a real person, all that was required to be done was to scrutinize the Articles and then the power of attorney to see whether it had been properly executed and confers the powers so claimed.

Siddique Mirza for Plaintiff.

Nemo for Defendants Nos. 1 to 3.

Date of hearing: 30th October, 2001.

2002 C L D 1673

[Karachi]

Before Mushir Alam, J

PREMIER INSURANCE COMPANY‑‑‑Applicant

Versus

Messrs MACKINNON MACHENZIE & COMPANY OF PAKISTAN

LIMITED‑‑‑Respondent

Civil Revision No.84 of 1997, decided on 26th April, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.316 & 313‑‑‑Object of S.316, Companies Ordinance, 1984‑‑‑Mere pendency of the winding up petition ipso facto does not operate as a bar to any suit or proceedings by or against the Company‑‑‑Bar only operates on actual winding up order or the order appointing. Provisional Manager‑‑­Principles.

From the bare perusal of subsection (1) of section 316 of the Companies Ordinance, 1984 it is abundantly clear that mere pendency of the winding‑up petition ipso facto does not operate as a bar to any suit or proceeding by or against the Company. Bar, only operates on actual winding‑up order or the order appointing Provisional Manager. Object of section 316 of the Ordinance, 1984, is to regulate the pending suit or proceedings pending in any other Courts so that none of the creditors may be prejudiced, their rights and interest are not adversely affected while distributing the assets of Company, amongst them, in accordance with their entitlement and priority if any.

The Company Court assumes special jurisdiction over pending suit and proceedings only after the winding-­up order is passed or when Provisional Manager is appointed to try itself all pending suits or proceedings by or against the company either by itself or grant permission to continue such suit or proceedings pending in any other Court. Such view also finds support from the facts that power to stay any suit or proceeding against the Company are exercisable by the Company Court under section 313 of the Ordinance, 1984 at the motion of company or any of its creditors or contributors any time after presentation of the winding‑up petition and before the winding‑up order is made.

Messrs Mackinnons Mackenzie & Company v. Mrs. Musarrat Jawed and others Civil Revision Application No.85 of 1998 and Messrs Mackinnons Mackenzie & Co. v. Messrs The Eastern Federal Union Insurance Company Limited and others Civil Revision Application No. 109 of 1997 and Ulbricht's WWE, GES M.B.H.A. Schwanenstadt/Kaufing, Austria v. Ulbricht's (Pakistan) (Pvt.) Ltd. 1990 CLC 1329 ref.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.316 & 313‑‑‑Stay of suit on winding‑up‑‑‑Agents (respondents) themselves had initiated winding‑up proceedings against their principal and they could apply for the stay or transfer of the proceedings from the Trial Court to that of the Company Court, if it all they were to take any advantage‑‑‑When such a party allows the suit or legal proceedings, to continue. and in fact participates in such proceedings that amounts to acquiescence in the proceedings and at a later stage would work as estoppel from challenging the proceedings on such accused‑‑­Occasion to seek permission of the company Judge would only arise when any appeal or execution proceedings are filed against the wound‑up Company‑‑‑[Messrs Mackinnons Mackenzie & Co. v. Eastern Federal Union, Insurance Company Limited Civil Revision Application No. 109 of 1997 dissented from].

Bashir Ahmed v. Nippon Bodin (Pvt.) Ltd. 1997 CLC 1205 ref.

Messrs Mackinnons Mackenzie & Co. v. Eastern Federal Union, Insurance Company Limited Civil Revision Application No. 109 of 1997 dissented from.

(c) Customs Act (IV of 1969)‑‑‑

‑‑‑‑S.55‑‑‑Contract Act (IX of 1872), S.128‑‑‑Suit for recovery of sum arising out of short landing of Cargo carried on board by vessel against Shipping Agent‑‑‑Liability of Shipping Agent‑‑‑Determination‑‑‑Concept of co‑extensive liability as described in S.128, Contract Act, 1872‑‑‑Applicability‑‑‑Main ground for holding that the Shipping Agent was liable for the claim in suit rested on a declaration given under S.55(e), Customs Act, 1969 whereby the Agent undertook to discharge all the liabilities of the vessel by virtue of such declaration‑‑‑Shipping Agent being an agent holds himself answerable for the discharge of all the claims for damages or short delivery which may be the liability of the owner of the cargo ‑‑‑Effect of declaration having been detailed in S.55(2) of the Customs Act, 1969, Agent was liable to. pay all the penalties and to satisfy the claim relating to short delivery in terms of the declaration‑‑‑Claim in the suit having been established, against the carrier after full-dress trial, Shipping Agent was personally liable on its declaration given under S.55(d), Customs Act, 1969‑‑‑Liability of the Agent only crystallizes and becomes co‑extensive once such liability is established through Court of law or admitted by the carrier itself‑‑‑Once such liability is established and proved in Court of law, same becomes enforceable against the Agent as well‑‑‑When the liability stood established as against the Principal, the Agent also became jointly and severally liable pursuant to judgment and decree of the Court‑‑‑Concept of co‑extensive liability as enshrined in S.128, Contract Act, 1872 would be attracted‑‑‑Principles.

In the present case, main ground for holding that the applicant was liable for the claim in suit rested on a declaration given under section 55(e) of the Customs Act, 1969 whereby the applicant undertook to discharge all the liabilities of the vessel by virtue of such a declaration. Applicant being an agent held himself answerable for the discharge of all the claims for damages or short delivery which may be the liability of the owner of the cargo, which position was not disputed.

Effect of the declaration referred to above, is detailed in section 55(2) of the Act whereby, the agent is held liable to pay all the penalties and is also liable to satisfy the claim relating to short delivery or damages which is caused to the cargo in terms of the declaration.

The claim in suit was established, against the carrier after full‑dress trial, therefore, Ship Agent was held personally liable on his declaration given under section 55 (d) of Customs Act.

The liability of the agent only crystallized and became co‑extensive with that of the Principal once such liability is established through Court of law or admitted by the carriers themselves. Once such liability is established and proved in Court of law, it becomes enforceable as against the agent as well. Admittedly in the present case the liability stood established as against the Principal. Consequently the agent also became jointly and severally liable pursuant to judgment and decree passed by the Court. It is only after the judgment and decree, that winding‑up order is passed. Concept of co‑extensive liability as enshrined in section 128 of the Contract Act would be attracted.

In the instant case liability as against the agent in terms of section 55 of the Customs Act, was determined by the Court of law. Co‑extensive liability in legal parlance means to extend equally and to exist at the same time, side by side, together. Purport and intent of a judgment and decree against more than one person also bind such judgment‑debtor co‑extensively. It means that either of the parties or judgment‑debtors could be followed by the decree‑holder for the satisfaction of the decree.

Surety becomes liable to pay entire amount immediately after passing of decree and it is not deferred until creditor exhausts his remedies against principal debtor.

Burjorjee Cowasjee & Co. v. Habib Insurance & Co. PLD 1975 Kar. 195; Messrs Pakistan Industrial Chains Company v. American Oriental Lines Inc., New York and others PLD 1968 Kar. 89; N.B.P. v. Allied Paper Industries Ltd. 1997 CLC 737; Arumugahm Chattiar v. Sedasivam Pillai AIR 1971 Mad. 321; Messrs Platinum Insurance Company Limited, Karachi through Managing Director v. Daewoo Corporation, Sheikhupura through Director, Administration and Finance PLD 1999 SC 1 and Citibank v. Tariq Mohsin Siddiqi and others PLD 1999 Kar. 196 ref.

(d) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.316‑‑‑Bar under S.316, Companies Ordinance, 1984, when not attracted‑‑‑Appeal having been filed by the company which was interested to protect itself against the rigors of the judgment passed against it said bar was not attracted.

The bar under section 316, Companies Ordinance, 1984 will not be attracted in cases where a judgment and decree was passed against a company prior to its winding­-up order and where company in distress is very much interested in defending its position to avoid the judgment and decree against it. Such bar is only attracted where any suit or proceedings are to proceed and commended against the Company in terms of section 316(1) of the Companies Ordinance. In the present case, admittedly, the appeal was filed by the company which was very much interested to protect itself against the rigors of the judgment passed against it.

Where suit or other proceedings were commenced against the Company and winding‑up order was made or Provisional Liquidator was appointed or the suit was decreed against the Company, then it could be the Company which may be interested to take a protective proceedings by challenging the same before a higher forum and seek exonerate itself from the consequence of decree or action against it. Under the circumstances respondent in appeal were not obliged to obtain any leave from the Company Court. Conclusion of the Appellate Court that the jurisdiction of the Trial Court was barred during pendency of the winding‑up proceeding before the High Court was erroneous and could not be sustained.

Eastern Automobile Syndicate Ltd. v. Rejinder Kumar Singh AIR 1959 M P 95 and National Bank of Pakistan v. Allied Paper Industries Ltd. 1997 CLC 737 ref.

(e) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.316‑‑‑Bar against suit ‑‑‑Co‑defendant whose liability is joint and several with that of the Company under liquidation‑‑‑Prerogative of the decree‑holder to seek execution of a judgment and decree either jointly or severally against any of the persons against whom the decree had been so made.

There is nothing in section 316 of the Companies Ordinance, 1984 that bars action against co‑defendant whose liability is joint and several with that of company under liquidation. It is prerogative of the decree‑holder to seek execution of a judgment and decree either jointly or severally against any of the persons against whom the decree has been so passed.

Maqsood Hassan Khan for Applicant.

Mansoor A. Sheikh for Respondent.

Date of hearing: 3rd September, 2001.

2002 C L D 1767

[Karachi]

Before Zahid Kurban Alvi, J

SAPPHIRE TEXTILE MILLS LTD. and others‑‑‑Plaintiffs

Versus

A.P.L. PAKISTAN (PVT.) LTD. and others‑‑‑Defendants

Suits Nos. 175, 176 and 189; Civil Miscellaneous Applications Nos. 1567 and 1049 of 2002, decided on 3rd July, 2002.

(a) Civil Procedure Code (V of 1908)‑‑‑--

‑‑‑‑S.11 ‑‑‑Res judicata, principle of‑‑‑Applicability‑‑‑Where prayers in earlier and subsequent suits and petitions for interim injunctions were different, such matter was not hit by the principle of res judicata.

(b) Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)‑‑‑

‑‑‑‑Ss.13, 14 & 15‑‑‑Breach of provisions of Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970‑‑‑Inquiry into such breach ‑‑‑Legality‑‑­Procedure‑‑‑Proper inquiry can be conducted and to that extent witnesses can be summoned and examined on oath‑‑­Notices for production of documents for the purposes of recording the evidence, the issuing of commission for the examination of witnesses etc. are required to be sent for the purpose of coming to a fair and just conclusion.

(c) Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)‑‑‑--

‑‑‑‑Ss.2, 3, 6 & 11‑‑‑Civil Procedure Code (V of 1908), O. VII, R. 11 ‑‑‑Plaint, rejection of‑‑‑Recovery of war risk surcharge‑‑­Assertion of plaintiff in the plaint was that shipping line and liner conference had joined hands and formed a sort of cartel and thereafter imposed a form of a to under the name of war risk surcharge‑‑‑Contention of plaintiff was that Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970, prohibited undue concentration of economic power unreasonably, monopoly power or unreasonable restrictive trade practice‑‑‑Validity‑‑‑ Plaintff failed to realize that once it was claimed that there was an unreasonable restrictive trade practice and that there was a violation of S.3 of Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970, then ipso facto S.11 of the Ordinance of 1970 would come into play‑‑‑Plaintiff did not avail all remedies provided under Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970‑‑‑Plaint was rejected in circumstances.

(d) Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)‑‑‑------

‑‑‑‑Ss.2, 3, 6 & 11 ‑‑‑War risk surcharge, levy of‑‑‑Remedy‑‑­Suit before Civil Court‑‑‑Maintainability‑‑‑Contention of the plaintiff was that war risk surcharge being levied was void and illegal, contrary to the provisions of Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970, and the same could be assailed in civil suit before Civil Courts‑‑‑Validity‑‑‑When remedy was available under the, provisions of Monopoly and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970, seeking of relief by way of civil suit was not proper.

Munib Akhtar for Plaintiffs (in Suits Nos.175, 176 and 189 of 2002).

Shaiq Usmani, Sajid Zahid, M. Naeem and Aijaz Ahmed for Defendants (in Suits Nos. 175, 176 and 189 of 2002).

Date of hearing: 4th June, 2002.

2002 C L D 53

[Lahore]

Before Mian Hamid Farooq, J

NATIONAL DEVELOPMENT FINANCE CORPORATION‑‑‑Plaintiff

versus

SPINNING MACHINERY COMPANY OF PAKISTAN LIMITED‑‑‑Defendant

Civil Suit No. 74 of 2000, decided on 23rd July, 2001.

(a) Interpretation of statutes‑‑‑

‑‑‑‑Two statutes on same subject‑‑‑Effect‑‑‑If provisions of later Act are so inconsistent with or repugnant to those of earlier Act, then earlier stands impliedly repealed by the later.

Messrs Tank Steel and Re‑Rolling Mills (Pvt.) Ltd.. Dera Ismail Khan and others v. Federation of Pakistan and others PLD 1996 SC 77 ref.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.2(a)‑‑‑National Development Finance Corporation Act (XVIII of 1 9 73), S.25‑‑‑National Development Finance Corporation, a banking company‑‑‑Provisions of S.25 of the National Development Finance Corporation Act, 1973, whereby the Corporation was not deemed to be a banking company for the purpose of Banking Companies Ordinance, 1962, stood impliedly repealed by S.2(a) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Corporation was competent to file suits for recovery of loans invoking the jurisdiction of Banking Court under the provisions of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.2(a) & 9‑‑‑National Development Finance Corporation Act (XVIII of 1973), Ss.15 & 25‑‑‑Suit for recovery of Bank loan‑‑‑Maintainability‑‑‑National Development Finance Corporation, a banking company was a body corporate which was transacting business of advancing loan to various enterprises in Pakistan‑‑‑Credit agreement and other documents, executed by the borrower company established the nature of the Corporation's business and the relationship between the Corporation and the company‑‑­Objection was raised to the maintainability of the suit on the ground that the Corporation was not a banking company under S.25 of the National Development Finance Corporation Act, 1973 and under the provisions of Banking Companies Ordinance, 1962‑‑‑Validity‑‑‑From the perusal of the definition of the 'Banking Company' as given in S.2(a)(i)(ii) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, the Corporation was covered by the definition of a 'Banking Company'‑‑­Contention that Corporation was not a Banking Company as defined in the Banking Companies Ordinance, 1962, was irrelevant because the definition of a Banking Company given in the Banking Companies Ordinance, 1962, could not be taken into account for determining whether or not the plaintiff was a 'Banking Company' for the purpose of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Suit was maintainable in circumstances.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.8‑‑‑Suit for recovery of Bank loan ‑‑‑Limitation‑‑­Provisions of S.8 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑­Applicability‑‑‑Limitation prescribed under S.8 of the Banking Companies (Recovery of Loans, Advances. Credits and Finances) Act, 1997, was for filing of suit for recovery of any amount which was written off, released, adjusted under any agreement or was due on account of withdrawal of any suit or proceedings‑‑‑Where the case of the defendant Company did not fall under any of the categories enumerated in S.8 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, suit was not barred by time.

(e) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Leave to defend suit‑‑‑Failure to raise serious and bona fide dispute‑‑‑Effect‑‑‑Where the borrower company had failed to raise serious and bona fide dispute warranting the grant of leave to defend the suit, the application for leave to defend the suit was dismissed.

(f) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑National Development Finance Corporation Act (XVIII of 1973), S.15‑‑‑Suit for recovery of Bank loan‑‑­Leave to defend suit refused‑‑ ‑Corporation had placed on record the photo‑copies of all the documents, on the basis of which they had filed the suit-‑‑Execution of the documents had not been specifically denied by the borrower company even in their application for grant of leave ‑‑‑Effect‑‑­Execution ‑ of all the documents was admitted and statement of accounts was duly verified/ certified under the Bankers' Books Evidence Act, 1891, which was also on record, to which presumption of correctness was attached‑‑As a consequence of the dismissal of the application for the grant of leave to defend the suit, the allegations made in the plaint would be deemed to have been admitted‑‑‑Where there was no rebuttal of the documents on record, the suit would be decreed.

Messrs Tank Steel and Re‑Rolling Mills (Pvt.) Ltd., Dera Ismail Khan and others v. Federation of Pakistan and others PLD 1996 SC 77 rel.

Syed Ali Zafar for Plaintiff, Muhammad Rafique Shad for Defendant.

Date of hearing: 16th July, 2001.

2002 C L D 61

[Lahore]

Before Syed Zahid Hussain, J

PAKISTAN through Secretary to Government of Pakistan, Ministry of Railways and another‑‑ ‑Petitioners

versus

Messrs RAJASTAN ALLOY AND STEEL (PVT.) LIMITED‑‑‑Respondent

First Appeal from Order No.5 of 1991, decided on 10th August, 2001.

(a) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑S.13‑‑‑Arbitrator‑‑‑Powers‑‑‑Ftndtng faults with the contract‑‑‑ Not the function of the arbitrator to be influenced by his own imagination and experience in finding faults with the relevant clauses of the contract between the parties.

(b) Contract Act (IX of 1372)‑‑‑

‑‑‑‑S.55‑‑‑Sale of Goods Act (111 of 1930), S.11‑‑‑Time as essence of contract‑‑‑Immovable property‑‑‑Where contract relates to immovable property time is not ordinarily regarded as of essence but as to other contracts, commercial or mercantile, the time is, prima facie, the essence of the contract with respect to the delivery of the subject‑matter of the contract.

Messrs China Cotton Exporters v. Beharilal Ramcharan Cotton Mills Limited AIR 1961 SC 1295; Orissa Textile Mills Limited and another v. Ganesh Das Ramkishun. AIR 1961 Pat. 107; Messrs Hafiz Abdul Aziz Yusufani and Co. v. Burma 011 Mills Limited PLD 1967 Kar. 318; Messrs Zamindar Cotton Factory v. Burma Oil Mills Limited PLD 1967 Kar. 388; Bunge Corporation v. Tradax SA (1981) 2 All ER 513; United Scientific Holdings Limited v. Burnley Borough Council (1977) 2 All ER 62 and Messrs Venkateswara Minerals Firm and another v. Jugalkishore Chiranjilal, Firm AIR 1986 Karnataka 14 ref.

(c) Words and phrases‑‑‑

‑‑‑‑"But"‑‑‑Connotation‑‑‑Word 'but' is used to emphasize the words following it.

Chambers' 21st Century Dictionary, Revised Edn., 1999, p.192 ref.

(d) Words and phrases‑‑‑

‑‑‑‑"In any case"‑‑‑Connotation‑‑‑Phrase 'in any case' is expressive of emphasis envisaged by the parties.

(e) Sale of Goods Act (III of 1930)‑‑‑

‑‑‑‑S.11‑‑‑Contract Act (IX of 1872), S.55‑‑‑Arbitration Act (X of 1940), Ss. l7, 30 & 39‑‑‑Award, setting aside of‑‑?Misconduct of arbitrator‑‑‑Contract for supply of goods‑‑?Time when as essence of contract‑‑‑Use of expression 'but in any case' in the contract between the parties‑‑‑Meaning and significance‑‑‑Dispute arose between the parties that according to the buyer the supplier failed to supply the goods within the stipulated time‑‑‑Bank guarantee submitted by the supplier was encashed by the buyer‑‑?Matter was referred to arbitrator and award was made by the arbitrator in favour of the supplier‑‑‑Such award was made rule of the Court‑‑‑Contention of the buyer was that by the use of expression 'but in any case' in the contract time was made essence of the contract and the goods were to be supplied by the respondent within the stipulated time‑‑?Validity‑‑‑Use of such expression in the contract was indicative of the intention of the parties that the time was essence of the contract‑‑‑Where the supplier failed to commence the supply till even expiry of the stipulated period, it was the supplier who committed breach of the contract and the same justified the buyer to get the guarantee encashed‑‑‑Not only the arbitrator misconstrued the particular clause of the contract and took wholly unwarranted view about the delivery schedule as to supply of the goods but also issued directions of declaratory nature to the buyer in the award‑‑‑Issuance of directions of mandatory nature were not within the scope of the reference before the arbitrator‑‑‑Where the award was not practicable or possible to implement or carry out the directions contained in the award, it would render the award invalid and not capable of implementation and execution‑‑‑Trial Court having erred in making such award as rule of the Court, same was set aside.

Abdur Rahman Munshi and 7 others v. Dr. Abdul Malek and 11 others 1968 SCMR 275; Lahore Development Authority v. Messrs Khalid Javed & Co. 1983 SCP4R 718; Ghulam Abbas v. Trustees of the Port of Karachi PLD 1987 SC 393; Joint Venture KG/Rist v. Federation of Pakistan PLD 1996 SC 108; Province of Balochistan and another v. Malik Haji Gul Hassan PLD 1982 Quetta 52; Ghee Corporation of Pakistan (Pvt.) Limited v. Broken Hill Proprietary Company Limited PLD 1999 Kar. 112 and K.F. Development Corporation Limited v. Messrs Dawood Cotton Mills Limited 1999 MLD 2953 ref.

(f) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑S.17‑‑‑Award‑‑‑Suo motu jurisdiction of Court ‑‑‑Scope‑‑?Where facts and dictates of justice demand, the Court may on its own, under S.17 of Arbitration Act, 1940, modify or set aside the award accordingly. [p. 73) F

Pakistan Railways v. Messrs Q.M.R. Expert Consultants PLD 1990 SC 800; Union of India v. Pratap Chandra Biswas AIR 1964 Assam and Nagaland 141 and Chhabba Lal v. Kallu Lal and others AIR 1946 PC 72 ref.

(g) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑S.17‑‑‑Award, setting aside of‑‑‑Non filing of application for setting aside the award‑‑‑Effect‑‑‑Jurisdiction of Court‑‑?Scope‑‑‑Where award is found to be nullity because of the invalidity of arbitration agreement or, for any other reason, or the award is prima facie illegal and not fit to be maintained, the Court has power under S.17 of the Arbitration Act, 1940, to set it aside, without waiting for an objection to award being filed or without considering any application for setting aside the same.

Messrs Awan Industries Limited v. The Executive Engineer, Lined Channel Division and another 1992 SCMR 65 and Muhammad Tayab v. Akbar Hussain 1995 SCMR 73 ref.

(h) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑‑Ss.17 & 30(c)‑‑‑Award, setting aside of‑‑‑Misconduct of arbitrator‑‑‑Proof of‑‑‑Principles‑‑‑Where award is found 'otherwise invalid', it is not for a party to establish misconduct on the part of the arbitrator in every case‑‑‑Court under S.30(c) of Arbitration Act, 1940, is empowered to set aside the same and refuse to make it rule of the Court.

(i) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑‑S. 30 (a)‑‑‑`Misconduct'‑‑‑Scope‑‑‑Term 'misconduct' occurring in S.30(a) of Arbitration Act, 1940, does not necessarily mean amounting to moral turpitude and is usually called legal misconduct having very wide meaning.

Pakistan through Secretary, Ministry of Industries v. Messrs Asian Associated Agencies PLD 1974 Kar. 155; Brooke Bond (Pakistan) Limited v. Conciliator appointed by the Governor of Sind and 6 others PLD 1977 SC 237 and The Indian Minerals Co. v. The Northern India Lime .Marketing Association AIR 1958 All. 692 ref.

(j) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑S.29‑‑‑Award‑‑‑Interest on award‑‑‑Grant of Interest for period prior to date of award‑‑‑Interest for such period cannot be awarded.

Ghulam Abbas v. Trustees of the Port of Karachi PLD 1987 SC 393 ref.

Aurangzeb Mirza for Appellants.

Malik Muhammad Nawaz for Respondents, Dates of hearing; 9th, 10th and 16th July, 2001.

2002 C L D 77

[Lahore]

Before Mian Saqib Nisar, J

CONCENTRATE MANUFACTURING COMPANY OF IRELAND and 3 others‑‑‑Appellants

versus

SEVEN‑UP BOTTLING COMPANY (PRIVATE) LIMITED and 3 others ‑‑‑Proforma‑Respondents

First Appeal from Order 82 of 2001, decided on 2nd August, 2001.

(a) Interpretation of document‑‑‑

‑‑‑‑Duty of Court‑‑‑Question of construction of an instrument is a question of law and it is the duty of the Court to interpret a document in its proper legal perspective and apply the correct law.

(b) Contract Act (IX of 1872)‑--

‑‑‑‑Ss.182, 211, 213 & 226‑‑‑'Agent'‑‑‑Obligations and duties‑‑‑Principal and agent, relationship of‑‑‑Agent is the connecting link between the principal and third person; a sort of conduit pipe or an intermediary who has the powers to create legal relationship between the principal and third party‑‑‑Agent has competence to make the principal responsible to the third person and is an imperative bridge by crossing which, the third person can reach the principal to enforce his legal right or vice versa‑‑‑Principal is liable to the third person for all the acts and deeds performed, within the authority of agency, by his agent, as to those were personally performed by him‑‑‑Agent necessarily and the principal in certain circumstances are liable to each other for accounts‑‑‑Where a person is not liable to the principal for the submission of accounts, such as the profit and loss, such person cannot be termed as agent.

Pakistan Paper Corporation Ltd. v. National Trading Company, (NTC) Limited 1983 CLC 1695; Messrs Caltex 011 (Pakistan) Limited, Karachi v. Sheikh Rehan‑ud‑Din PLD 1958 (W.P.) Lah. 63; Messrs Rohtas Industries Limited v. State of Bihar AIR 1958 Pat. 414 and Moti Lal Channoo Lal Vaish v. Golden Tobacco Company AIR 1957 Madh. Pra. 223 rel.

(c) Contract Act (IX of 1872)‑‑‑

‑‑‑‑Ss.182 & 202‑‑‑Principal and agent, relationship of‑‑­Termination of contract‑‑‑Appellant was the supplier and the respondent was the buyer‑‑‑After termination of such supply the respondent assailed the action in civil suit‑‑‑Plea raised by the respondent was that there was a relationship of the principal and agent as the appellant was owner of the trade mark and on account of the principle of vicarious liability was liable, to the third party, therefore, the agency stood created‑‑‑Validity‑‑‑Respondent used to purchase raw material from the appellant against price and property in the goods used to pass on to the respondent on the delivery‑‑‑Respondent was not liable for accounts to the appellant and the product was being sold in Pakistan by the respondent as its own property, for the price fixed by the respondent, without any control of the appellant‑‑­Respondent was solely entitled to the profit and incurred loss if any and did not receive any commission from the appellant on account of the sale of the product‑‑‑Respondent in no manner acted as intermediary or a conduit pipe between the appellant and the third person‑‑‑Respondent was not an agent of the appellant within the purview of law of agency, in circumstances.

(d) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.202‑‑‑Termination of agency‑‑‑Provisions of S.202 of Contract Act, 1872‑‑‑Applicability‑‑‑Where there was no agency relationship, 5.202 of Contract Act, 1872, would have no application.

Muhammad Aref Effendi v. Egypt Air 1980 SCMR 580 distinguished.

(e) Contract‑‑‑

‑‑‑‑Franchise‑‑‑Connotation‑‑‑Franchise is a special privilege conferred by the Government on an individual which otherwise does not belong to a citizen of the country as a common right and when franchise is accepted, it becomes a contract, irrevocable unless the right to revoke is expressly reserved.

Words and Phrases, Permanent Edn. Vol. 17, pp.694, 695, 699, 700 to 706, 712 and 714 ref.

(f) Words and phrases‑‑‑

‑‑‑‑"Franchise"‑‑‑Defined.

Black's Law Dictionary. 6th Edn., p.658 ref.

(g) contract‑‑‑

‑‑‑‑ Franchise agreement‑‑‑Object and scope‑‑‑Franchise agreement when entered into between private individuals, is an licence, which means a personal privilege granted by one person to another without creating any legal right in the property subject‑matter of franchise‑ ‑‑Such an agreement is a permission by the competent person/ authority to another, to do an act which, without the permission, would be illegal‑‑‑Same is true for the grant of franchise for the purpose of trade, business or calling and is revocable at the will of the grantor.

(h) Easements Act (V of 1882)‑‑‑

-----S.60(a)(b)----- Licence, revocation of ------ Provisions qua licences under Easements Act, 1882 relate to immovable property‑‑‑Such licences can be revoked at the pleasure of the licensor, unless falling within the purview of S.60(a)(b) of Easements Act, 1882.

(i) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑Ss.12 & 56(f)(i)‑‑‑Sale of Goods Act (III of 1930), S.5‑‑­Perpetual injunction, grant of‑‑‑Specific performance of contract‑‑‑Contract of supply of goods was revoked by the appellant‑‑‑To enforce the contract, the respondent filed suit for declaration and permanent injunction‑‑‑Validity‑‑‑Where the respondent was simply purchasing goods from the appellants on the payment of the price and against the delivery of the goods, such dealing between the parties was squarely covered by S.5 of Sale of Goods Act, 1930‑‑‑If the appellants. even for mala fide reasons, had refused to sell the goods to the respondent, at the best, the respondent could sue the appellant for damages, but no specific enforcement of the agreement could be obtained under the decree of the Court, as per the provisions of S.56(f)(i) of Specific Relief Act, 1877 read with explanation to S.12 of the Act.

(J) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑S.54‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr.l & 2‑‑‑Interim injunction, grant of‑‑‑When perpetual injunction cannot be granted, there is no question for the grant of temporary injunction.

(k) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.73‑‑‑Specific Relief Act (1 of 1877), Ss.12, 42 & 54‑‑­Breach of contract‑‑‑Remedies against‑‑‑Only two remedies are available to the aggrieved person, either to seek specific performance of the .contract, or to seek for damages‑‑‑Where specific performance cannot be granted under the law, as a substitute, the plaintiff is not entitled to file a suit for declaration or for that matter a suit for perpetual injunction.

Malik and Haq v. Muhammad Shamsul Islam PLD 1961 SC 531; Karachi Shipyard Works v. Muhammad Shakir Sheikh 1993 CLC 330; Shahid Mahmood v. KESC 1997 CLC 1936; Alvi Sons v. Government of East Pakistan PLD 1968 Kar. 222 and M. Farooq v. Suleman A.G. Panjwani PLD 1977 Kar. 88 ref.

(1) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXIX, Rr.1 & 2‑‑‑Interim injunction, grant of‑‑‑Scope‑‑‑Where the suit itself was not maintainable, no interim relief could be awarded.

(m) Specific Relief Act (I of 1877)‑‑‑

‑‑‑‑Ss.53 & 55‑‑‑Civil Procedure Code (V of 1908), Ss.94, 151 & O.XXXIX, Rr.1, 2‑‑‑Contract Act (IX of 1872), S.73‑‑‑Breach of contract‑‑ ‑Mandatory injunction‑‑‑Grant of status quo ante‑‑‑Scope‑‑‑Where breach of obligation by defendant is so patent, that it floats on the surface of the record, causing immediate, pressing and irreparable injury to the plaintiff, the Court may, while exercising its powers under S.94 read` with 5.151, C.P.C., grant a status quo ante‑‑‑In case of breach of contract which agreement is not even enforceable under the law, the Court cannot and should not exercise its judicial discretion to create a situation, which has ceased to exist when the Its is commenced.

(n) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑Ss.94, 151 & O.XXXIX, Rr.1, 2‑‑‑Status quo ante, grant of‑‑‑Such order may be passed in the cases of easements of necessities or the severance of basic necessities of life by the public authority, such as illegal disconnection of electricity or water connection‑‑‑Court in exercise of powers under S.94 read with S.151, C.P.C. can grant status quo ante.

(o) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S.104 & O.XXXIX, Rr.1, 2‑‑‑Sale of Goods Act (111 of 1930), S.5‑‑‑Contract Act (IX of 1872), S.73‑‑‑Interim injunction, grant of‑‑‑Breach of contract‑‑‑Defendant suspended supply of raw material to the plaintiff before the institution of the suit‑‑‑Trial Court granted the injunction whereby the defendant was restrained from discontinuing the supply of the raw material‑‑‑Validity‑‑‑Where the supply had already been suspended by the defendant, the order passed by the Trial Court was not justified to direct the sale of goods to the plaintiff‑‑‑Plaintiff failed to make out a prima facie case and to show that the principles of irreparable loss and balance of convenience was in their favour‑‑‑Order of temporary injunction granted by the Trial Court was set aside and the application filed by the plaintiff was dismissed.

Mst. Salima Bibi v. Mst. Halima Bibi 1994 SCMR 1858; City Bank v. Tariq Mohsin Siddiqi and others PLD 1999 Kar. 196; Abdullah v. Abdul Majid 1999 MLD 2670; M. Younas v. Abdullah 1992 CLC 1 5: Pakietan Paper Corporation Ltd. v. National Trading Company (NTC) Limited ‑1983 CLC 1695; Messrs Caltex 011 (Pakistan) Limited, Karachi v. Sheikh Rehan‑ud‑Din PLD 1958 (W.P.) Lah. 63; Messrs Rohtas Industries Limited v , State of Bihar AIR 1958 Pat.414; Moti Lal Channoo Lal Vaish v. Golden Tobacco Company AIR 1957 Madh. Pra, 223 and Islamic Republic of Pakistan through Secretary, Establishment Division, Islamabad and others v. Muhammad Zaman Khan and others 1997 SCMR 1508 ref.

Umar Ata Bandial for Appellant.

Kh. Saeed‑uz‑Zafar for Respondent.

Date of hearing: 3rd July, 2001.

2002 C L D 94

[Lahore]

Before Amir Alam Khan and Muhammad Sair Ali, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Appellant

versus

JASARAT HUSSAIN ‑‑‑Respondent

Regular First Appeal No. 365 of 1997, heard on 4th June, 2001.

(a) Islamic Jurisprudence‑‑‑

‑‑‑‑ Banking in Islam‑‑‑Mark‑up on mark‑up‑‑‑Scope‑‑‑Mark‑up cannot be allowed like interest recurring on the interest ­bearing loan, as the same is in total negation of the mark‑up system of finance introduced by abolishing interest‑based loans of the banking companies.

(b) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S. 74‑‑‑Liquidated damages‑‑‑Proof‑‑‑Damages to be awarded under S.74 of the Contract Act, 1872, demand proof of actual loss through evidence.

(c) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.11(4)‑‑‑Contract Act (IX of 1872), S. 74‑‑‑Liquidated damages‑‑‑Non‑awarding of‑‑‑Grievance of the Bank was that the Banking Tribunal refused to award the liquidated damages, charges, costs and mark‑up while passing decree in favour of the Bank‑‑‑Validity‑‑‑No evidence was either presented or sought to be presented by the Bank regarding liquidated damages‑‑‑Only on failure of Judgment‑debtor to pay the decretal amount, the liquidated damages under S.11(4) of the Banking Tribunals Ordinance, 1984, were permissible at the discretion of the Tribunal‑‑‑Liquidated damages, if allowed automatically, would amount to charging of interest, thereby defeating the intent and purpose of legal change introduced in Banking Laws‑‑­Where no reasons to seek such discretion from the Tribunal were given nor did any occasion thereto arise, the Tribunal would be justified in refusing to award liquidated damages to the Bank‑‑‑Bank failed to produce any evidence on record for other charges and costs and the same was denied by the borrower, therefore, the Bank was not entitled to claim such costs or charges‑‑‑Appeal was dismissed in circumstances.

Mian Nasir Mahmood for Appellant.

Nemo for Respondent.

Date of hearing: 4th June, 2001.

2002 C L D 116

[Lahore]

Before Sheikh Abdur Razzaq, J

NUSRAT ALI ANJUM‑‑‑Petitioner

versus

SMALL BUSINESS FINANCE CORPORATION, RAHIM YAR KHAN through Manager‑‑‑Respondent

Writ Petition No. 764 of 2001 /BWP. heard on 21st May, 2001.

Small Business Finance Corporation Act (XXIX of 1972)‑‑‑

‑‑‑‑Ss. 20, 21 & 22‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Repayment of loan‑‑­Recovery of mark‑up/interest‑‑‑Petitioners being customers of Corporation had obtained loan with their free consent and had executed agreements in that respect with the Corporation‑‑‑Petitioners, who were liable to return the loan, did not dispute their liability to repay the principal amount, but had asserted that as interest/mark‑up had been declared by Federal Shariat Court as well as Supreme Court against Injunctions of Islam, they were not liable to pay the interest‑‑‑Interest/mark‑up though in any form had been declared against Injunctions of Islam, but its recovery had not been disallowed in past and closed transactions‑‑‑Petitioners, in circumstances, were liable to repay the amount as per agreement executed with the Corporation alongwith agreed interest/mark‑up.

PLD 1991 FSC 1; PLD 2000 SC 225; 1998 CLC 1718; 1999 MLD 2324; 2001 CLC 524 and 1994 SCMR 2787 ref.

Mian Anwar Nabi for Petitioner.

Ch.Muhammad Ashraf Mohandra, Mushtaq Pervaiz Abbasi, Malik Saeed Ejaz, Syed Waseem Ahmad, Masood Ashraf Sheikh, Basit Babar Chughtai and Daud‑ul‑Hassan Qureshi for Respondents.

Date of hearing: 21st May, 2001.

2002 C L D 157

[Lahore]

Before Muhammad Sair Ali, J

TANVIR RASOOL ROLLER FLOUR MILLS (PVT.) LIMITED through Director‑‑‑Petitioner

versus

MAPCO through Chief Executive and another‑‑‑Respondents

Writ Petition No. 6836 of 2001, heard on 9th August, 2001.

(a) Electricity Act (IX of 1910)‑‑‑

‑‑‑‑S.24(1)‑‑‑Partnership Act (IX of 1932), S.59‑‑‑Compqnbes Ordinance (XLVII of 1984), S.32‑‑‑Mischief of S.24(l) of ­Electricity Act, 1910 could only be invoked, if two separate meters installed at different premises were in the name 9f­'same person'‑‑‑Partnership registered under Partners Act, 1932 could not be termed to be the 'same person' as Private Limited Company incorporated under Company’s Ordinance, 1984‑‑‑Electricity meters obtained functioning in such‑like two distinct names could not be h to be one 'consumer' by WAPDA, who were two separate and independent consumers for all practical purpose including S.24 of Electricity Act, 1910‑‑‑Compqnd electricity meter could not be disconnected for liabilities v firm, whose partners might be shareholders of the Company also‑‑‑Electricity meters/accounts in the name of i different distinct legal persons or entities, could not clubbed together for purposes of S.24 of Electricity 1910.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art.199‑‑‑Constitutional petition‑‑‑Maintainability‑‑=M pendency of civil suit could not make Constitutional petit unmaintainable, where patent illegality and invalidity action had been challenged.

Dr.Graith Rashid Pharaon through Special. Attorney v. BCCI through Joint Official Liquidator and 9 others 1999 YLR 1683 ref.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.32‑‑‑'Company' and 'natural person'‑‑ ‑Distinction‑‑­Company incorporated under Companies Ordinance, 1984, is a juristic/legal person, distinct from its shareholders and Board of Directors‑‑‑Natural person holding shares as well as directorship of company cannot be treated to be same person as an incorporated company‑‑‑`Legal person' like a company functions through its Directors, Managers, agents, representatives and employees i.e. the natural persons‑‑­Company and such natural persons under law, continue to retain their respective independent identities and separate personalities and do not get merged into each other.

Muhammad Irfan Whyne for Petitioner.

Malik Haider Jamal Maitla for Respondents.

Date of hearing: 9th August, 2001.

2002 C L D 162

[Lahore]

Before Mian Hamid Farooq, J

WESTMINISTER ENTERPRISES and 2 others‑‑‑Petitioners

Versus

UNITED BANK LIMITED and 2 others‑‑‑Respondents

Writ Petition No. 15686 of 1996, decided on 8th October, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.15 & 21‑‑‑Civil Procedure Code (V of 1908), S.2(2) & O.XXXIV, R.2‑‑‑Constitution of Pakistan (1973), Art.199‑‑­Constitutional petition‑‑‑Preliminary decree‑‑‑Rule of merger‑‑‑Petitioners' appeal filed against preliminary decree was dismissed by Appellate Court on point of limitation whereafter respondents' application for amendment of preliminary decree was allowed by Banking Court‑‑­Contention. of petitioners was that irrespective of dismissal of earlier appeal on point of limitation, preliminary decree stood merged in the decree passed by Appellate Court, therefore, Banking Court had no jurisdiction to make amendment in preliminary decree and it was the Appellate Court, which could have amended the decree ‑‑‑Validity‑‑­Earlier appeal was not decided on merits, but it was dismissed on point of limitation, therefore, principle of merger would not be attracted‑‑‑Merger was for a limited purpose of computation of period of limitation and execution of decree‑‑‑Constitutional petition was dismissed as having no force.

Maulvi Abdul Qayyum v. Syed Ali Asghar Shah and 5 others 1992 SCMR 241 ref.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.15‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Decree in favour of Bank‑‑‑Debtor's suit for damages pending against Bank‑‑‑Effect‑‑‑Decree in favour of Bank, though under challenge in Constitutional petition, had been satisfied by petitioners without any objection, whereas their suits for damages filed against respondent‑Bank were pending adjudication‑‑‑Contention of petitioners was that in case of acceptance of Constitutional petition, they could claim refund of amount‑‑‑Validity‑‑‑If suits filed by petitioners were decreed, then there would be no impediment in recovering the decretal amount from the Bank‑‑‑Constitutional petition was dismissed being devoid of merits.

Mirza Hafeez‑ur‑Rehman for Petitioners.

Muhammad Asif Bhatti for Respondent.

2002 C L D 166

[Lahore]

Before Nasim Sikandar, J

CONSTRUCT (PVT.) LIMITED through Chief Executive‑‑‑Petitioner

Versus

HABIB JUTE MILLS LIMITED‑‑‑Respondent

Civil Original No.75 of 1995, decided on 16th October, 2001.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305(e)‑‑‑Company unwilling to pay its debt‑‑‑Remedy of creditor‑‑‑Remedy of winding up petition would not be available to a creditor, where debtor company, though commercially solvent, was merely unwilling to pay its debt.

Messrs Platinum Insurance Company Limited, Karachi v. Daewoo Corporation, Sheikhupura PLD 1999 SC 1 and Messrs Sindh Glass Industries Limited, Karachi v. Messrs National Development Finance Corporation, Karachi and 2 others 1996 SCMR 645 ref.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305(e)‑‑‑Winding up petition on ground of failure to pay debt‑‑‑Maintainability‑‑‑Where liability to pay debt was not disputed or where after having been called upon, the debtor company failed to pay the debt, petition of winding up would become maintainable.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305(e)‑‑‑ Winding up petition on ground of default in payment of debt‑‑‑Maintainability‑‑‑Availability of alternate remedy for recovery of debt or the debt being barred by limitation does not affect the maintainability of winding up petition on ground of default in payment of debt.

Habib Bank Limited v. Hamza Board Mills and others PLD 1996 Lah. 633 and National Bank of Pakistan v. The Punjab National Silk Mills Limited and others P L D 1969 lah. 104 ref.

(d) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305(e)‑‑‑Winding up petition on ground of default in payment of debt‑‑‑Maintainability‑‑‑Petitioner, in winding up petition had admitted that due to some defects in the construction work carried out by it, the Company did not pay remaining amount of contract, therefore, debt claimed could not be held as contemplated under S‑305(e) of Companies Ordinance, 1984, to become a valid reason for winding up petition‑Petitioner had brought this petition just to coerce a payment against a company, which at least, since the time of filing of such petition, was earning substantial profits‑‑‑Winding up proceedings being summary in nature could riot be granted to force a small payment, which was seriously disputed‑‑‑Winding up petition was dismissed as petitioner had no case at all.

Pakistan Industrial Credit and Investment Corporation Limited 4. Messrs Indus Steel Pipe Limited PLJ 1993 MLD 94; Muzaffar Abbas Malik and 2 others v. Messrs Pakistan P.V.C. Limited PLD 1998 Kar. 71; Messrs Khyber Textile Mills Limited v. Messrs Allied Textile Mills Limited 1989 CLC 1167 and Messrs Bankers Equity Limited and 5 others v. Messrs Balochistan Coaters Limited PLD 1997 Kar. 416 ref.

Syed Taffaz‑ul‑Haider Rizvi for Petitioner.

Miss Iram Ahsan and Syed Mansoor Ali Shah for Respondents.

Date of hearing; 5th October, 2001.

2002 C L D 176

[Lahore]

Before Ijaz Ahmad Chaudhary, J

MUHAMMAD IBRAHIM ‑‑‑Petitioner

Versus

SMALL BUSINESS FINANCE CORPORATION

through Managing Director, Islamabad

and 4 others‑‑‑Respondents

Writ Petition No.11501 of 2001, decided on 11th September, 2001.

(a) West Pakistan Land Revenue Act (XV11 of 1967)‑‑‑

‑‑‑‑S.80‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Recovery of arrears of land revenue‑‑‑Misuse of authority‑‑‑High Court can interfere in the misuse of authority by public functionaries and can look into the legality of the demand being made for the payment of amount as arrears of land revenue.

(b) Contract Act (IX of 1872)‑‑‑

‑‑‑‑Ss.42 & 146‑‑‑West Pakistan Land Revenue Act (XVII of 1967), S.80‑‑‑Constitution of Pakistan (1973), Art.199‑‑­Constitutional petition‑‑‑Recovery of arrears of land revenue without determination by Court of competent jurisdiction‑‑­Joint liabilities of two guarantors‑‑‑Petitioner and one other person stood surety for the Bank loan received by the loanee‑‑‑Recovery of the loan was initiated by the Authorities as arrears of land revenue‑‑‑Petitioner had paid half the amount of the loan but the Authorities were employing coercive measures against the petitioner for the recovery of the whole amount‑‑‑Validity‑‑‑Where there were two guarantors of one loanee, under the provisions of Contract Act, 1872, the half loan had to be paid by one of the guarantors‑‑‑Petitioner, in the present case, had already paid the amount for which he stood guarantor and he could not be held responsible for the payment of loan due from the other guarantor for which the petitioner had not given any guarantee or security‑‑‑Action taken by the Authorities was misuse of authority for the reason that the petitioner stood surety for amount which had been obtained by the loanee‑‑­Coercive method could not be adopted, against the petitioner under the provisions of West Pakistan' Land Revenue Act, 1967, unless the amount was determined by a Court of competent jurisdiction that could be recovered from the petitioner‑‑‑Proceedings initiated without determination of amount by a Court of competent jurisdiction by Authorities were illegal and unlawful‑‑‑High Court restrained the Authorities from recovering the disputed amount from the petitioner unless the amount due was determined from the Court of competent jurisdiction‑‑‑Constitutional petition was allowed in circumstances.

Pehalwan v. Manager, A.D.B.P. and another PLD 1993 Lah. 525; Manzoor Ahmad v. Malik Yaqoob and another PLD 1988 Lah. 627; Mst. Aisan v. Manager, A.D.B.P. and 2 others 2001 CLC 57; Emirates Bank International Limited v. Messrs Fair Commission Agency (Pvt.) Limited and 7 others 1991 CLC 450 and Kohinoor Fibres Limited and 2 others v. First U.D.L. Modaraba and another 2001 CLC 87 ref.

(c) West Pakistan Land Revenue Act (XVIl of 1967)‑‑‑

‑‑‑‑Ss.80, 81 & 82‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Recovery of loan amount not determined by a competent Court‑‑‑Recovery of such amount‑‑‑Financial institution initiated proceedings for recovery of loan against guarantor without having the same determined by the Court of competent jurisdiction‑‑‑Warrant of arrest was issued to the guarantor without issuance of show‑cause notice under Ss.80 & 81 of the West Pakistan Land Revenue Act, 1967‑‑‑Validity‑‑‑Demand of the financial institution was required to be first determined by a Court of competent jurisdiction and only after such determination in its favour it could claim the amount‑‑‑Without determination of the amount by a Court of competent jurisdiction the same could not be recovered as it was a disputed amount.

Agricultural Development . Bank of Pakistan v, Sanaullah Khan and others PLD 1988 SC 67 ref.

Muhammad Saeed Ansari for Petitioner.

Sardar Muhammad Tariq Khan Dareshik for Respondents.

Date of hearing: 2nd August, 2001.

2002 C L D 183

[Lahore]

Before Ch. Ijaz Ahmad and Mian Saqib Nisar, JJ

IMMAD IFTIKHAR and 2 others‑‑‑Appellants

Versus

HABIB BANK LIMITED‑‑‑Respondent

Regular First Appeal No.214 of 1997, heard on 24th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XVof 1997)‑‑‑

‑‑‑‑Ss.9 & 21‑‑‑Suit for recovery of money‑‑‑Bank filed suit against defendants being legal representatives of deceased borrower, wherein they were issued show‑cause notice, which they replied by taking a stand that they were not legal representatives of the deceased; property mortgaged with Bank by the deceased was not owned by him and he could not create mortgage over the same; and they were not liable to pay debt of the Bank in excess of the assets left by deceased and inherited by them‑‑‑Banking Tribunal refused to accept such reply and decreed the suit‑‑‑Validity‑‑‑Such question could not be decided without framing issues and recording the evidence‑‑‑Banking Tribunal had decided the suit in a summary manner without adopting such procedure‑‑‑Appellate Court set aside impugned judgment and decree, and remanded the case to Banking Court for its decision afresh within specified time after framing issues and allowing the parties to adduce evidence.

Karim Nawaz Malik for Appellants.

Shamas Mehmood Mirza for Respondent.

Date of hearing: 24th October, 2001.

2002 C L D 186

[Lahore]

Before Mian Hamid Farooq, J

Messrs MAHPARA GARMENTS through Proprietor and another‑‑‑Petitioners

Versus

NATIONAL BANK OF PAKISTAN

and another‑‑‑Respondents

Writ Petition No. 6913 of 1999, heard on 18th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.15(2)‑‑‑Constitution of Pakistan (1973), Art.199‑‑­Constitutional petition‑‑‑Decree for recovery of amount‑‑­Banking Court refused to grant relief of all time mark‑up to petitioners under Incentive Scheme (Circular dated 24‑3‑1999)‑‑‑Validity‑‑‑Controversial question of accounts being involved in the case, High Court, with agreement of parties, disposed of the Constitutional petition with directions to Banking Court to determine the liability, if any, of petitioners according to terms of Circular dated 24‑3‑1999 issued by Bank after taking into account the amounts already deposited by them in their accounts and under orders of Banking Court and High Court.

Syed Haider Ali Shah for Petitioners.

Abdur Rehman Tariq Alvi for the Bank.

Date of hearing: 18th October, 2001.

2002 C L D 245

[Lahore]

Before Mian Hamid Farooq, J

MUHAMMAD ATHAR HASSNI‑‑‑Petitioner

Versus

CITIBANK and 5 others‑‑‑Respondents

Writ Petition No. 19449 of 2001, decided on 29th October, 2001.

(a) Constitution of Pakistan (1973)

‑‑‑‑Art 199‑‑‑Constitutional petition‑‑‑Factual controversy‑‑‑Bank loan, recovery of‑‑‑Plea taken was that interest/mark‑up being form of interest were against Islam‑‑‑Validity‑‑‑Where the petitioner had obtained loan facility from Bank and had executed some charge documents favoring Bank, even under the Islamic norms of justice, the petitioner was bound to fulfil the contractual obligations and commitments undertaken through the execution of those documents‑‑‑Petition was not maintainable in circumstances.

Messrs Momin Motor Company v. The Regional Transport Authority, Dacca and others PLD 1962 SC 108; Muhammad Mumtaz Masud and 2 others v. House Building Finance Corporation and 2 others 1994 SCMR 2287 and Syed Anwar‑ul‑Hussain v. District Manager, Small Business Finance Corporation Branch, Vehari and 2 others 2001 YLR 2741 ref.

(b) Constitution of Pakistan (1973)‑---------

‑‑‑‑Arts.l99 & 203‑G‑‑‑Constitutional jurisdiction of High Court‑‑­Plea of mark‑up/interest; being un‑Islamic‑‑‑Validity‑‑‑High Court in view of Art 203‑G of the Constitution has no power or jurisdiction, under the law, to determine the same as un‑Islamic.

Muhammad Ramzan v. Citibank 2001 CLC 158; Dr. Muhammad Aslam Khaki v. Syed Muhammad Hashim and 2 others PLD 2000 SC 225 and Mrs. Farha Nasir v. Pakistan through Secretary to Government, Ministry of Economics and Commercial Affairs, Islamabad and 2 others 2001 MLD 1657 rel.

(c) Constitution of Pakistan (1973)‑‑‑

‑‑‑Art,199‑‑‑Constitutional petition‑‑‑Maintainability‑‑‑Factual controversies‑‑‑Execution of loan agreement under duress and blackmailing‑‑‑Petitioner alleged that he was made to sign the loan agreement which was result of fraud, torture, blackmailing and criminal duress‑‑‑Validity‑‑‑Such factual controversies could not be decided without recording evidence of parties and the same could not be undertaken in exercise of Constitutional jurisdiction of High Court and fell within the domain of Courts of plenary jurisdiction‑‑‑High Court in exercise of its jurisdiction vested in it under Art 199 of the Constitution could neither enter into factual controversies nor decide disputed question of facts‑‑‑Petition was not maintainable in circumstances.

Muhammad Younas Khan and 12 others v. Government of N.‑W.F.P. through Secretary, Forest arid Agriculture, Peshawar and others 1993 SCMR 618; Umer ,Hayat Khan v. Inayatullah Butt and others 1994 SCMR 572; Muhammad All and another v. Government of Sindh through Chief Secretary and 2 others 1986 CLC 1123 and Mst. Kaniz Fatima through Legal Heirs v. Muhammad Salim and 27 others 2001 SCMR 1493 ref.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.21(1)‑‑‑Constitution of Pakistan (1973), Art 199‑‑­Constitutional petition‑‑ Adequate remedy‑‑‑Borrower, instead of filing appeal against judgment and decree passed by Banking Court, filed Constitutional petition‑‑‑Validity‑‑‑Remedy of appeal under S.21(1) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, was provided against judgment and decree passed by Banking Court and such remedy was adequate and efficacious‑‑‑Petitioner without availing the alternate remedy of appeal, had straightaway filed Constitutional petition which was not maintainable under Art.l99(1) of the Constitution‑‑‑Petition was dismissed in limine.

Messrs Chenab Cement Product (Pvt.) Limited and others v. Banking Tribunal. Lahore and others PLD 1996 Lah. 672 ref.

(e) Constitution of Pakistan (1973)‑‑‑

‑‑‑ Art 199‑‑‑Constitutional petition ‑‑‑Laches, principle of‑‑­Applicability‑‑‑Judgment and decree were passed by Banking Court in the year 1997, against the petitioner but the same had not been assailed before any higher forum as provided under law‑‑Effect‑‑‑Where the petitioner slept over the matter and acquiesced in the judgment and decree, principle of laches was applicable.

Rashid Murtaza Qureshi for Petitioner.

Nemo for Respondents.

2002 C L D 251

[Lahore]

Before Mian Hamid Farms, J

M.ANWAR SALEEM‑‑‑Petitioner

Versus

UNITED BANK LIMITED and others‑‑‑Respondents

Writ Petition No. 1421 of 1998, heard on 12th October, 2001.

Financial Institutions (Recovery of Finances) Ordnance (XLVI of 2001)‑‑‑

‑‑‑‑Ss.5, 7(6) & 29(2)‑‑‑Civil Procedure Code (V of 1908), OVII, R.10 & ‑O.XXXVII‑‑‑Banff Tribunals Ordinance (LVIII of 1984), S.6(1)(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), Ss. 7(6) & 28‑‑­ Constitution of Pakistan (1973), Art 199‑‑‑Constitutional petition‑‑­Return of Customer's suit against Bank for recovery of pledged forwarding compensation thereof‑‑‑Civil Court on account of lack of jurisdiction transferred such suit to Banking Court‑‑‑Banking Court after recording evidence and hearing the arguments, returned the plaint to customer for its presentation before proper forum‑‑‑Contention was that customer was in doldrums who, on account of said two judgments had been left without any remedy ‑‑‑Validity‑‑‑Customer fwd suit on 23‑2‑1985; when Bang Tribunals Ordinance, 1984, was in force and by virtue off S.6(1) thereof, only Banking Company was competent to against its customer, whereas customer had to resort to Courts of plenary jurisdiction for seeking his remedy against Banking Company‑‑‑Only Civil Courts, at the relevant time, had jurisdiction in such matters, thus, transfer of customer's suit by

Civil Court was not warranted by law‑‑‑Banking Tribunals Ordinance, 1984 was repealed by S.28 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, which came into force on 31‑5‑1997 and by virtue of S. 7(6) thereof, all proceedings pending before Special Courts or other Courts including High Court stood automatically transferred to newly‑constituted Banking Courts‑‑‑If original order of transfer of suit passed by Civil Court was considered to be illegal, even then perforce of S.7(6) of Act 1997, suit filed by customer would be deemed to have been transferred to Banking Court ‑‑When impugned order was passed, Act of 1997 was in force, thus suit filled by customer would be deemed to be pending before Banking Court, which was bound to decide same in accordance with law‑‑‑Impugned order having been passed against such express provisions of law, could not be upheld‑‑‑Financial Institutions (Recovery of Finances) Ordinance, 2001, came into force on 30‑8‑2001 and by virtue of S.7(6) thereof, suit of customer would be deemed to be transferred and pending for disposal before Banking Court established under S.5 of Ordinance of 2001‑‑­Constitutional petition was accepted and impugned order was set aside with direction to Banking Court to decide the suit of customer in accordance with law.

Ch. Muhammad Sarwar for Petitioner.

Nemo for Respondents.

Date of hearing: 12th October, 2001.

2002 C L D 254

[Lahore]

Before Mian Hamid Farooq, J

Syed IJAZ ALI SHAH GILLANI and 7 others‑‑‑Petitioners

Versus

UNITED BANK LIMITED

through Manager and 2 others‑‑‑Respondents

Constitutional Petition No.12394 of 1997, heard on 10th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18‑‑‑Constitution of Pakistan (1973), Art 199‑‑‑Constitutional petition‑‑‑Execution of decree‑‑‑Petitioners claiming to be bona fide purchasers of mortgaged property filed objection petition, which was dismissed for non‑prosecution on 29‑1‑1997‑‑‑Banking Court on 20‑5‑1997 consigned execution petition to record‑room, when Bank desired to sell the mortgaged property itself‑‑‑Petitioners challenged order dated 20‑5‑1997 through Constitutional petition‑‑‑Maintainability‑‑‑Real grievance of petitioners should have been against the order dated 29‑I‑1997 and not order dated 20‑5‑1997‑‑‑Petitioners could file application for restoration of objection petition or fresh objection petition, but they had not availed such remedies at the relevant time‑‑‑Order dated 21‑1‑1997 had attained f finality, which had not been challenged even in the Constitutional petition‑‑‑Failing to avail such alternate, adequate and efficacious remedy at appropriate stage would disentitle the petitioners to invoke Constitutional jurisdiction of the High Court‑‑‑Petitioners being not aggrieved persons within the ambit of Art 199(1) of Constitution, High Court dismissed the Constitutional petition.

Iqbal Mehmood Awan for Petitioners.

Nemo for Respondents.

Date of hearing: 10th October, 2001.

2002 C L D 257

[Lahore]

Before Maulvi Anwarul Haq, J

Sheikh MUHAMMAD ZAFAR---Petitioner

Versus

Dr. JEHAN ARA AHMAD---Respondent

Civil Revision No. 1240 of 2001, heard on 11th October, 2001.

(a) Negotiable Instruments Act (XXVI of 1881)-----

----Ss.4 & 13, Expln.(i)---Stamp Act (11 of 1899), S.2(2) & (5)(b)--­Civil Procedure Code (V of 1908), O.XJOCVH, Rr.2, 3 & S.115---Suit for recovery of money in summary jurisdiction based on promissory note attested by two witnesses---Trial Court found the document not a promissory note, but a bond and sent the case to District Judge for entrusting the same to Civil Court to be tried as ordinary suit---Validity---Such document fund all the conditions laid down in. S.4 of Negotiable Instruments Act; 1881, as same was in writing and signed by its maker; it was not a Bank note or currency note; it contained an unconditional promise by defendant to pay certain amount on demand by plaintiff ff and there was no prohibition on transfer of instrument--­ Unless it was otherwise expressed by specific words that transfer of the instrument was prohibited it would be deemed that same was payable to order of the persons to whom the instrument was payable---Notwithstanding its attestation by witnesses, such document fell out of ambit of S.2(5(b) of Stamp Act, 1899, which would be applicable to instruments not payable to order----Attestation of promissory note by two witnesses would not render same not as negotiable, because Negotiable Instruments Act, 1881 did not prohibit attestation of promissory note or any other instrument defined therein by the witnesses---High Court set aside impugned order and granted to defendant leave to defend on furnishing security in the suit amount to satisfaction of Trial Court.

Raghunath Balakrishna Deshpande v. Biharilal Krishnaprasad Dave AIR 1972 Mys. 159 ref. "

(b) Stamp Act (II of 1899)---

----S.2(5)(b)---Bond---Definition---Bond includes an instrument attested by a witness, whereby a person obliges himself to pay money to another, but not payable to order or bearer.

Muhammad Khalid Mehmood Khan for Petitioner.

Muhammad Yaqub Khan and Waqar Mushtaq for Respondents.

2002 C L D 261

[Lahore]

Before Mian Hamid Farooq, J

M. IFT1KHAR MIAN, The Chief Manager, Union Bank Limited and others‑‑‑Petitioners

Versus

CHAIRMAN BANKING TRIBUNAL, FAISALABAD

and another‑‑‑Respondents

Writ Petition No. 10013 of 1995, decided on 17th October, 2001.

(a) Banking Tribunal Ordinance (LVII of 1984)‑‑‑

‑‑‑‑S. 7‑‑‑Constitution of Pakistan (1973), Art 199‑‑‑Constitutional petition‑‑‑Contempt of Court‑‑‑Banking Tribunal, after passing the decree against defendant, on his application initiated contempt proceedings against the plaintiff‑Bank for having obtained from another Bank confidential report regarding credibility of the defendant‑‑‑Validity‑‑‑Banking Tribunal had mechanically issued impugned notice to plaintiff‑‑‑Banking Tribunal without pursuing the application and in complete oblivion of law on the subject issued contempt notice to the petitioner, whereas from bare reading of its contents, no case for contempt of Court has been made out‑‑‑Banking Tribunal had acted in excess of its jurisdiction and had grossly violated the provisions of law‑‑‑If any loss had been caused to the defendant or its Directors/guarantors, appropriate remedy was to file suit for damages and not to initiate contempt proceedings‑‑‑High Court accepted Constitutional petition and declared the impugned notice and proceedings initiated by Banking Tribunal as illegal and without lawful authority.

(b) Banker and customer‑‑

‑‑‑‑ Exchange of confidential opinion regarding credential of customer between two Banks‑‑‑Banks are within their rights to ask from each other about reliability and credibility of customers with whom they are dealing within financial matters and are also under obligation to respond to the communications addressed to them divulging true facts to another financial institution‑‑‑No exception can be taken by customer to such confidential and privileged communications exchanged between financial institutions in the best of their interest

(c) Constitution of Pakistan (1973)

‑‑‑ Art 199‑‑‑Constitutional jurisdiction‑‑‑Scope‑‑‑High Court could exercise Constitutional jurisdiction in matter, wherein no factual controversy was involved and impugned action was without jurisdiction.

Ali Sibtain Fazli for Petitioners.

Mian Nisar Ahmad for Respondents.

2002 C L D 264

[Lahore]

Before Ch. Ijaz Ahmad, J

TANVEER AKHTAR and 2 others‑‑‑Petitioners

Versus

NATIONAL BANK OF PAKISTAN, SHAKARGARH

and another‑‑‑Respondents

Writ Petition NoA1383 of 1994, decided on 17th October, 2001.

(a) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑S.6‑‑‑Civil Procedure Code (V of 1908), OIX, R.2, O.XVII, R.3 & O.XXI, R.83‑‑‑Constitution of Pakistan (1973), Art. l99‑‑‑Constitutional petition‑‑‑Execution of decree‑‑­Petitioners filed application under O.XXI, R.83, C.P.C., after having deposited some decretal amount which was dismissed by Banking Court for their failure to deposit process fee on a date when Bank representative was present in the Court‑‑‑Validity‑‑‑Dismissal of application on such ground was highly technical‑‑‑Appearance of Bank representative on such date without service of notice could not be believed‑‑‑Provisions of O.IX, R.2, C.P.C., were not of imperative nature, thus, rigid application thereof was not warranted‑‑‑Dismissal order under said provision could not be passed when defendant had appeared before the Court in person or through his agent‑‑‑Discretion of Court under O.IX, R.2, C.P.C. should be exercised sparingly only in case of grave negligence and not in routine‑‑‑Petitioners were non‑suited despite their bona fide to honour their commit­ ment ‑‑‑High Court accepted Constitutional petition and set aside impugned order and directed Banking Court to decide petitioners' application in accordance with law.

Messrs Hoechst Pak Limited v. Messrs Ch. Agriculture Traders 1993 CLC 1892; Shamroz Khan and others v. Muhammad Amin and others PLD 1978 SC 89; Rehmat Ali v. Fazal Hussain and 8 others 1990 CLC 761; Crescent Sugar Mills and Distillery Limited v. Central Board of Revenue and. others PLD 1982 Lah. 1 and Yousaf Ali v. Muhammad Aslam Zia and others PLD 1958 SC (Pak.) 104 ref.

(b) Administration of justice‑‑‑

‑‑‑‑Cases must be decided do merits instead of technicalities.

Manager, Jammu and Kashmir State Property v. Khuda Yar and another PLD 1975 SC 678 and Said Muhammad and others v. M. Safdar and others PLD 1989 SC .532 ref.

(c) Jurisdiction‑‑‑

‑‑‑‑Where basic order was without jurisdiction, then superstructure raised thereon would fall to ground automatically.

Crescent Sugar Mills and Distillery Limited v. Central Board of Revenue and others PLD 1982 Lah. 1 and Yousaf Ali v. Muhammad Aslam Zia and others PLD 1958 SC (Pak.) 104 ref.

Ch. Muzammal Khan for Petitioners. Tariq Nawaz Bhatti for Respondents.

2002 C L D 271

[Lahore]

Before Mian Hamid Farooq, J

ALLIED BANK OF PAKISTAN LIMITED‑‑‑Petitioner

Versus

BANKING COURT (RECOVERY NO. 1)

and 2 others‑‑‑Respondents

Constitutional Petition No.24931 of 1997, heard on 12th October, 2001.

Banking Companies (Recovery of Loans] Ordinance (XIX of 1979)‑‑‑

‑‑‑‑S.12‑‑‑Constitution of Pakistan (1973), Art.l99‑‑­Constitutional petition‑‑‑Appeal filed by defendants against decree in favour of Bank was ‑disposed of in terms of compromise reached between the parties, whereby defendants paid decretal amount and Bank waived the other charges‑‑‑Banking Court on defendants' application directed the Bank to deliver them pledged goods or pay equivalent amount‑‑‑Validity‑‑‑Pledged goods having already been entrusted to defendants, matter stood concluded and fructified‑‑‑Direction of Banking Court to return pledged goods had been passed in complete oblivion of record of the case and order of Appellate Court‑‑‑High Court accepted Constitutional petition and declared impugned orders as illegal, without lawful authority and of no legal effect.

Abid Aziz Sheikh for Petitioner.

Nemo for Respondents.

Date of hearing: 12th October, 2001.

2002 C L D 274

[Lahore]

Before Jawwad S.Khawaja and Abdul Shakoor Paracha, JJ

Mrs. RAKHSHANDA ASAD and another‑‑‑Appellants

Versus

Messrs BANK OF PUNJAB through Manager‑‑‑Respondent

Regular First Appeal No.404 of 2001, heard on 17th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9, 10 & 21‑‑‑Suit for recovery of amount ‑‑Leave to defend‑‑­After filing of written statement, Banking Court, instead of framing all the issues arising out of the pleadings of parties, framed only a preliminary issue and invited Bank to adduce evidence in support of the same‑‑‑Bank did not confine itself to preliminary issue, but adduced evidence in respect of entire case‑‑‑Banking Court through same judgment not only decided preliminary issue in favour of Bank, but decreed the suit‑‑­Contention was that Banking Court had passed decree in a manner as if leave was not granted to defendants in respect of matters arising out of pleadings other than those reflected in preliminary issue ‑‑‑Validity‑‑‑Provisions of Ss.9 & 10 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, did not permit Banking Court to grant leave conditionally or in, respect of some matters and not in respect of the others‑‑‑Impugned order did show that leave to appear and defend had been granted to defendants, but in spite of that, Banking Court had proceeded in a manner not permissible under the provisions of the Act‑‑‑Appellate Court set aside impugned judgment and decree and remanded case to Banking Court for dealing with the matter as a regular long cause.

Agrofoster (Pvt.). Limited and 2 others v. Judge, Banking Court No.5, Karachi and another PLD 1999 Kar. 398 ref. '

Syed Haider Ali Shah for Appellants. Nemo for Respondent.

Date of hearing: .17th October, 2001.

2002 C L D 296

[Lahore]

Before Ch. Paz Ahmad and Mian Saqib Nisar, JJ

Messrs MIAN MUHAMMAD ASHRAF

& SONS through Partners

and 4 others‑‑‑Appellants

Versus

BANK OF PUNJAB ESTABLISHMENT

through duly Constituted Attorney‑‑‑Respondent

Regular First Appeal No.279 of 2001, heard on 15th November, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.l5(2)(b) & 21‑‑‑Decree for recovery of amount –During pendency of appeal, appellants' offer to pay decretal amount in instalments was opposed by respondent Bank alleging the same to be an attempt to frustrate execution proceedings already initiated for auction of attached property and that they had retracted from such offers previously made by them‑‑‑Property put to auction seemed to be of higher value, which might not fetch proper price in present circumstances and its sale would not be in the interest of either party, thus, High Court accepted the offer in the interest of Bank as appellants were satisfying impugned decree in toto‑‑‑High Court modified the decree in exercise of its jurisdiction/powers under S.15(2)(b) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 by allowing the appellants to pay the decretal amount in 9 instalments on specified dates, failing which respondent‑Bank would be free to realize the balance amount of decree through auction of attached property without objection/ resistance from the appellants.

Malik Saeed Hassan for Appellants.

Muhammad Shuja Baba for Respondent

Date of hearing: 15th November, 2001.

2002 C L D 298

[Lahore]

Before Maului Anwarul Haq and Mian Hamid Farooq, JJ

Messrs KAPUR TEXTILE MILLS LIMITED

through Chief Executive---Appellant

Versus

BANKERS EQUITY LIMITED

through Chief Executive---Respondent

First Appeal from Order No.294 of 2001, decided on 8th October, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----S.12---Use of comma' and word 'or' in S.12 of the Act--­ Effect ---Both 'comma' and wordor' signify two different situations which are: Where a decree has been passed, after due service and where summons have not been duly served.

Ebrahim Brothers Limited v. Wealth Tax Officer PLD 1985 Kar. 407 ref.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----Ss.9 & 12---Decree, setting aside of---Limitation--; Computation---Only one period of limitation was provided under S.12 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997---Date of commencement of period of limitation was different in two situations: in case of decree that had been passed after due service of summons, the period of 21 days started from the date of decree itself while where the summons had not been duly served, the period started from date of knowledge---In case of former situation, the applicant had to satisfy Banking Court that he was prevented by sufficient cause from making application under S.9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997; while in latter situation, the applicant had only to show that the summons were not duly served on him--­Both the situations were governed by the same period of limitation Le. 21 days---Where application under S.9(4) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was filed beyond 21 days after the date, the applicant acquired knowledge of decree, such application was rightly dismissed as time-barred by the Banking Court---Appeal was dismissed in limine.

Ali Sibtain Fazli for Appellant.

2002 C L D 301

[Lahore]

Before Jawwad S. Khawaja and Muhammad Sair Ali, JJ

ALLIED BANK OF PAKISTAN LTD., McLEOD ROAD, BRANCH, LAHORE‑‑‑Appellant

Versus

Messrs LUCKY AUTOS AND RICKSHAW EXCHANGE, 1‑ROYAL PARK, McLEOD ROAD, LAHORE

and 2 others‑‑‑Respondents

First Appeal from Order No, 45 of 1995, heard on 19th November, 2001.

Banking Companies (Recovery of Loans) Ordnance (XLY of 1979)‑‑‑

‑‑‑‑Ss. 2 & 6‑‑‑Banking Companies (Recovery of Loans) (Amendment) Ordinance (II of 1983), Ss. 2, 4 & 5‑‑‑Execution of decree passed by Civil Court during the period between the date of promulgation of Banking Companies (Recovery of Loans) (Amendment) Ordinance (II of 1983) and 17-4-1988 i.e. the date of judgment of Supreme Court passed in Yasmeen Nighat's case (PLD 1988 SC 391) settling the law qua absence of jurisdiction in Civil Courts as to suits for recovery of Bank loans valuing Rs.1,00,000 or below‑‑‑Special Banking Court dismissed the Bank application for execution of such decree holding same as void‑‑‑Contention of the Bank was that decree passed by Civil Court prior to judgment of Supreme Court had become final by non‑filing of appeal by respondents, and thus, had assumed character of "past and closed transaction"‑‑‑ Validity‑‑­Judgment and decree so passed by Civil Court being a judgment in personam, had become "final" in absence of challenge arid was thin "a past and closed transaction"‑‑­Special Banking Court had exceeded its jurisdiction by dismissing execution application of the Bank‑‑‑Appellate Court accepted the appeal and set aside the impugned order as a result of which, execution petition filed by the Bank would be deemed to be pending before Banking Court, who would decide same in accordance with law.

Mst. Yasmeen Nighat v. National Bank of Pakistan PLD 1988 SC 391; F.A.0. 269 of 1994 and F.A.0. 261 of 1993 ref.

Zaheer Ahmad Saeed for Appellant.

Khashnood Akhtar Raja for Respondents.

Date of hearing: 19th November, 2001.

2002 C L D 303

[Lahore]

Before Mian Hamid Farooq, J

Messrs EXTRACTION PAKISTAN LTD.

through Chief Executive---Petitioner

Versus

CHAIRMAN, BANKING TRIBUNAL COMMERCIAL III, LAHORE and 2 others---Respondents

Constitutional Petition No. 11463 of 1995, decided on 8th October, 2001.'

Banking Tribunals Ordinance (LVIII of 1984)---

----Ss. 2(a)(e), 6, 13 & Sched.---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.7(6)---Financial Institutions (Recovery of Finances) Ordinance (XLV1 of 2001), Ss. 5, 7(6) & 29---Constitution of Pakistan (1973), Art 199---Constitutional petition---Suit for recovery of money--­Respondent being a leasing company leased out a vehicle to petitioner and on committing default in payment of its monthly rent, respondent filed suit against petitioner---Contention of petitioner' was that respondent was not a banking Company, thus, notification of inclusion of its name in Schedule of Banking Tribunals Ordinance, 1984 could not be issued and on such score, Banking Tribunal could not assume jurisdiction in the matter---Validity---Definition of "Banking company" as given in S.2(a) of the Banking Tribunals Ordinance, 1984 includes a company specified in its Schedule--Definition of Finance" as given in S.2(e) of the Ordinance, includes a "lease" also---Federal Government in exercise of its powers conferred under S.13 of the Ordinance had included the name of respondent-company at Serial No. 18 in the Schedule of the said Ordinance---No exception, thus, could be taken by petitioner with regard to issuance of such notification or filing of recovery suit against him by respondent-company under S.6(1) of the Ordinance--­Constitutional petition was dismissed being devoid of merits --­Suit as a result of repeal of Banking Tribunals Ordinance, 1984 and Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, would be deemed to be transferred and pending before Banking Court established under S.5 of Financial Institutions (Recovery of Finances) Ordinance, 2001, which would decide same in accordance with law.

Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672 ref.

Sheikh Zia Ullah for Petitioner

Nemo for Respondents.

2002 C L D 307

[Lahore]

Before Amir Alam Khan, J

CAPITAL ASSETS LEASING CORPORATION

LTD. through Chief Operating Officer‑‑‑Petitioner

Versus

HALA ENTERPRISES LTD. through Chief Executive

and 2 others‑‑‑Respondents

Civil Original No. 119 of 1996, heard on 8th October, 1999.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 290, 291 & 292‑‑‑Petition for regulating the affairs of company‑‑‑Default in payment of rent of leased equipments‑‑­Respondents showed their willingness to discharge their liability in suitable instalments‑‑‑Schedule of instalments proposed by petitioner was accepted by respondents‑‑‑Company Judge disposed of the petition with. direction to respondents to pay monthly instalments by 10th of each calendar month, and in case of their default in two monthly instalments consecutively, the whole balance amount would become due and would be recoverable in lump sum, and in case, respondents failed to adhere to such compromise, then petitioner would be within his right to approach the High Court again for redressal of his grievance.

Ch. Fazal‑i‑Hussain for Petitioner.

Imtiaz Rashid Siddiqui for. Respondents Nos. land 2.

Haq Nawaz Chattha for Respondent No.3.

Date of hearing: 8th October, 1999.

2002 C L D 309

[Lahore]

Before Amir Alam Khan, J

BASF (PRIVATE) LIMITED through

Branch Manager and duly constituted Attorney‑‑‑Petitioner

Versus

SPECTRUM (PRIVATE) LIMITED

and 4 others‑‑‑Respondents

Civil Original No.34 of 1993, heard on 2nd November, 1999.

Companies Ordinance (XLVII of 1984)‑‑‑‑

‑‑‑‑S.305‑‑‑Winding‑up of company‑‑‑Respondent‑Company did not contest the petition, as a result of which it was wound up and Official Liquidator was appointed‑‑‑Report of Official Liquidator revealed that registered office of the company did not exist; credit of petitioner was Rs. l I lacs; out of two creditors of the company, one Bank did not respond, whereas other intimated that there was no outstanding amount against company; out of 7 debtors of the company, two major companies had denied to owe anything to the company; except Rs., 1,100 lying in liquidation account, there was no assets of the company in hands of Official Liquidator, hence, the creditors were not likely to be paid back even a single penny‑‑‑Request of Official Liquidator in such circumstances was to dissolve the company‑‑‑Validity‑‑‑Position of the company as disclosed by Official Liquidator was hopeless, for there was no likelihood of any recovery‑‑‑Since petitioner was being further burdened with remuneration of Official Liquidator, it would be just and reasonable to dissolve the company‑‑­Company Judge dissolved the company with intimation to Registrar to proceed in the matter in accordance with law.

M.Naeem Sahgal for Petitioner.

Ahmad Fazal Sheikh, Official Liquidator for Respondents.

Date of hearing: 2nd November, 1999.

2002 C L D 312

[Lahore]

Before Jawwad S.Khawaja and Muhammad Sair Ali, JJ

Mst. KANIZ BIBI‑‑‑Appellant

Versus

THE MUSLIM COMMERCIAL BANK LIMITED‑‑‑Respondent

Regular First Appeal No. 112 of 1994, heard on 26th November, 2001.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑‑

‑‑‑‑S.6‑‑‑Civil Procedure Code (V of 1908), OXXXVII, R.3‑‑‑Suit for recovery of amount‑‑ Application for leave to appear and defend suit‑‑‑Banking Court dismissed the application solely on the ground that the amount required to be deposited by defendant, had not been so deposited‑‑‑Validity‑‑‑Requirement of deposit of money as a condition precedent for hearing such application was wholly without legal warrant‑‑‑Application submitted by defendant could not be dismissed on such ground, rather ‑ such condition could only be imposed after hearing the defendant‑‑‑Appellate Court accepted the appeal and set aside impugned judgment and decree while observing that defendant's application for leave to appear and defend would be deemed to be pending before competent Banking Court.

Malik Muhammad Azam Rasool for Appellant.

Abdul Majid Chaudhry for Respondent.

Date of hearing: 26th November, 2001.

2002 C L D 313

[Lahore]

Before Jawwad S. Khawaja and Muhammad Sair Ali, JJ

UNITED BANK LIMITED

through Attorney‑‑‑Appellant

Versus

SAJID MAHMOOD and 5 others‑‑‑Respondents

First Appeal from Order No.312 of 2001, decided on 21st November, 2001.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑‑

‑‑‑‑S. 7‑‑‑Civil Procedure Code (V of 1908), O.XXI- Rr.58, 59 & 62‑‑­Execution of decree‑‑‑Objection to attachment of property‑‑­Respondent claimed to be bona fide purchaser for value of attached property without notice of any encumbrance thereon and in possession thereof since 1996, when agreement to sell was executed in his favour by judgment‑debtor‑‑‑Executing Court accepted such agreement at its face value without determining the allegation of decree‑holder Bank that such agreement was collusive and there was no conveyance of title in favour of the respondent ‑‑Validity‑‑‑Provisions of O.XXI, R.62, C.P.C., mandated an inquiry in order to determine such matter of factual contention‑‑ Appellate Court accepted the appeal, set aside the impugned order and remanded the case to Executing Court for decision afresh along the lines indicated.

Muhammad Afzal Sandhu for Appellant.

Zahid Malik for Respondent No. 1.

2002 C L D 315

[Lahore]

Before Naseem Sikandar and Mansoor Ahmad, JJ

Syed MUNIR HUSSAIN GILANI‑‑‑Appellant

Versus

HABIB BANK LIMITED, TOWNSHIP BRANCH, LAHORE through constituted Attorney

and another‑‑‑Respondents

Execution First Appeal No. 485 of 2001, heard on 13th November, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.l8 & 21‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr.90 & 95‑‑‑Property auctioned in execution of decree was objected to by appellant judgment‑debtor on the ground of inadequacy of price resulting from fraud and material irregularity in holding the auction‑‑‑Banking Court rejected the objection petition ‑‑‑Validity‑‑‑Fraud in auction proceedings had neither been specifically pleaded nor it was otherwise discernible from such proceedings, nor any fraud had been committed in holding the auction nor Executing Court had gone outside the limits prescribed by law‑‑­Appellant had not a good case on merits‑‑‑Neither ex parte judgment nor order of dismissal of application for setting aside such decree was challenged‑‑‑Non‑mentioning of minimum price in Schedule of auction was hardly of any relevance, when property had been auctioned at a price more than decretal amount‑‑‑In absence of any specific prejudice having been caused to the appellant, such objection could not be entertained at appeal stage, when it had not been taken up before Executing Court Properties auctioned through Courts did not fetch market price for a number of reasons, foremost amongst them being shyness of purchasers to involve themselves in transactions entailing proceedings before Courts‑‑ Appellant, at appeal stage, offered to pay decretal amount and interest on total auction price‑‑‑Every owner of property particularly one in which he had‑resided alongwith his family had a peculiar sentimental value for him, whereas purchasers had not yet experienced that set of mind‑‑ Appellate Court while allowing another opportunity to the appellant to save his property directed him to pay within 30 days to the Bank the decretal amount with profit and to auction­ purchaser profit on auction price @ 1396 till date of its payment, and in case of failing to do so, his appeal would stand dismissed both on account of bar of limitation and on merits‑‑‑Appeal was disposed of accordingly.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S. 21‑‑‑Limitation Act (IX of 1908), S.14‑‑‑Prosecuting the remedy before other forum ‑‑‑Condonation of delay‑‑‑Appellant challenged order of Banking Court in Constitutional petition, which was subsequently disposed of and within 10 days thereof, he filed appeal‑‑‑Time spent in prosecuting Constitutional petition was sought to be condoned‑‑‑Validity‑‑‑Proceedings in Constitutional petition could not ordinarily be said to be proceedings before a forum without jurisdiction‑‑‑Lapse of 10 days in filing appeal after disposal of Constitutional petition had not been explained‑‑‑No case for condonation of delay was made out.

Abdul Ghani v. Ghulam Ahmad PLD 1977 SC 102; P.M. Amer v. Qabool Muhammad Shah and others 1999 SCMR 1049; Raja Karamat Ullah and others v. Sardar Muhammad Aslam Sokhara 1999 SCMR 1892 and Brig. (Retd:) Manhar‑ul‑Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706 ref.

(c) Constitution of Pakistan (1973) ‑

‑‑‑‑Art. 199‑‑‑Proceedings in Constitutional petition could not ordinarily be said to be proceedings before a forum without jurisdiction.

Dr. Syed Shaukat Hussain for Appellant.

Faisal Mahmood Khan, Muhammad Tahir Ch. and M.M. Malik for Respondents.

Date of hearing: 13th November, 2001.

2002 C L D 325

[Lahore]

Before Amir Alam Khan, J

ISRARUL HAQ and 3 others‑‑‑Petitioners

Versus

AL‑TAHIR INDUSTRIES (PVT.) LIMITED

and 4 others‑‑‑Respondents

Civil Original No. 27 of 1992, heard on 26th April, 2000.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 290, 86, 156, 158, 205: & 252‑‑‑Minority oppression and mismanagement of affairs of Company ‑‑‑ Petition for regulating the affairs of Company‑‑‑Petitioners owning 42.32% shares prayed that either affairs of Company be regulated or in the alternative, respondents be directed to purchase their shares, because ever since purchase of shares by them, they were neither allowed to participate in management nor were inducted on Board of Directors‑‑‑Respondents contended that shares of petitioners were void having been issued in violation of provision of S.85 of the Ordinance and that no consideration for shares had been paid Petitioners, according to Corporate Law Authority owned 2000 shares out of total 20,000 shares of Rs.100 each; and that Company had not filed Form A and Form‑29 in terms of Ss. 156, 158, 205 & 252 of the Ordinance‑‑‑Copies of share certificates produced by petitioners were bearing the signatures of Chief Exc2utiue or the Directors‑‑‑Company had not denied issuance of such certificates‑‑‑Plea of non‑payment of consideration was raised only in defence of application under S.290 of the Ordinance filed in April, 1992‑‑‑In spite of taking such plea in year 1994, no proceedings had been taken or filed for recovery of consideration of share certificates already issued to petitioners‑‑‑Registrar of Companies certified to have received intimation in Form‑111 duly signed by Chief Executive with regard to issuance of 2000 shares‑‑‑Respondents challenged the genuineness of such Form‑11I being forged or not so signed‑‑‑Such shifting stands of respondents speaks volumes about their conduct and it seemed that they were trying to run away from their liability‑‑‑Long silence of four years on the part of respondents was a factor helping to believe that share certificates had been issued to petitioners and consideration thereof had been paid by them at relevant time‑‑‑No existing shareholder had come forward to object to issuance of share capital to petitioners‑‑‑Due to such manifest distrust, it would be neither just nor proper to thrust the petitioners on unwilling respondents in circumstances‑‑‑While granting alternative relief, High Court directed the respondents to buy the shares of petitioners at par value without being entitled to any dividends‑‑­ Prayer with regard to regulating the affairs of Company was dis­allowed in circumstances.

Mian Muzaffar Hussain and Syed Khalid Saleem for Petitioners.

M.R. Sheikh for Respondents.

Dates of hearing: 24th February; 6th and 26th April, 2000.

2002 C L D 330

[Lahore]

Before Mian Hamid Farooq, J

MUHAMMAD HAQ NAWAZ‑‑‑Petitioner

Versus

HABIB BANK LIMITED through Chairman, Habib Plaza, Karachi and others‑‑‑Respondents

Writ Petition No. 14014 of 1993, heard on 1st October, 2001.

Constitution of Pakistan (1973)‑‑‑

‑‑‑ Arts.199 & 203‑G‑‑‑Constitutional petition‑‑‑Declaration of mark‑up/interest as un‑Islamic‑‑‑Scope‑‑‑Contention was that petitioner was not liable to pay interest/mark‑up on loan being un‑Islamic‑‑‑Validity‑‑‑Petitioner had executed documents/ agreement undertaking thereby to pay the principal amount alongwith mark‑up and all other charges, and he could not wriggle out of his express commitments‑‑‑Petitioner was bound by the documents governing the terms and conditions of availing the loan facility which were still enforceable‑‑‑High Court in view of Art.203‑G of Constitution of Pakistan had no jurisdiction to determine charging of mark‑up/interest as un‑Islamic ‑‑‑ Petitioner could not take advantage of Aslam Khaki's case PLD 2000 SC 225, as that case was a past and closed transaction‑‑‑High Court dismissed the Constitutional petition in circumstances.

Muhammad Ramzan v. Citibank N.A. 2001 CLC 158 and Dr. Muhammad Aslam Khaki v. Syed Muhammad Hashim and 2 others PLD 2000 SC 225 ref.

Ch. Muzammil Khan for Petitioner.

Khalid Mehmood Khan for Respondents.

Date of hearing: 1st October, 2001.

2002 C L D 332

[Lahore]

Before Mian Saqib Nisar, J

MUHAMMAD SHAFIQUE SAIGAL and 2 others‑‑‑Appellants

Versus

INDUSTRIAL DEVELOPMENT BANK OF

PAKISTAN through Chief Manager‑‑‑Respondent

First Appeal from Order No.55 of .1995, decided on 11th October, 2001.

Industrial Development Bank of Pakistan Ordinance (XXXI of 1961) ‑

‑‑‑‑S.39‑‑ Application by Bank for enforcement of its claim‑‑‑Due to absence of appellants‑borrowers' counsel on 7‑2‑1995, when arguments on his miscellaneous application were to be heard, Court below, without proceeding ex pane against him in miscellaneous application, also decided and allowed the main application of the Bank‑‑‑Validity‑‑‑Was not clear from the order sheet of the Court below as to whether 7‑2‑1995 was the date fixed for hearing of main application also, rather the same showed that only miscellaneous application was fixed on that date ‑‑‑If appellants' (borrowers') counsel was not present on that date, only his miscellaneous application should have been dismissed and the main application of respondent‑Bank under S.39 of the Ordinance should have been fixed for hearing‑‑­Court below had committed material irregularity as it had not heard the appellants on main application‑‑‑High Court set aside impugned order and remanded the case to Court below for deciding afresh the main application as well miscellaneous application after giving opportunity of hearing to appellants.

Rana Rashid Akram for Appellants.

S.H.K. Lodhi for Respondent.

Date of hearing: 11th October, 2001.

2002 C L D 334

[Lahore]

Before Malik Muhammad Qayyum and Raja Muhammad Sabir, JJ

MUHAMMAD NAWAZ CHAUDHRY and another‑‑‑Appellants

Versus

CITIBANK N.A. ‑‑‑Respondent

Regular First Appeal No.307 of 1998, heard on 20th September, 2000.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Suit for recovery of loan‑‑‑Competency of suit was challenged by the defendant/ borrower contending that the suit was not instituted by authorized person‑‑‑Power of attorney produced on record by the plaintiff‑Bank clearly showed that the person who instituted the suit on behalf of the plaintiff‑Bank was authorized to institute the same‑‑‑Suit properly instituted by the person in accordance with the power of attorney which was executed in his favour, was competently filed‑‑‑Contention of defendant/ borrower was repelled.

Mian Hamid Farooq for Appellants.

Shahid Ikram Siddiqui for Respondent.

Date of hearing: 20th September, 2000.

2002 C L D 336

[Lahore]

Before Mian Hamid Farooq, J

MASHRAQ BANK---Petitioner

Versus

Messrs AMTUL REHMAN INDUSTRIES (PVT.)

LIMITED and others---Respondents

Execution Petition No.52-E of 1996, decided on 7th August, 2001.

(a) Jurisdiction-----

----Court; jurisdiction of---Consent of parties cannot confer upon or take away jurisdiction from the Courts.

(b) West Pakistan Civil Courts Ordinance (II of 1962)----

----S.18---Valuation bf suit---Forum of appeal ---Determination--­Valuation of suit fixed by plaintiff in the plaint determines the jurisdiction of the Court---Such valuation is the basis for determination of forum for the purpose of filing of appeal.

Government of Pakistan v. Messrs Allah Bakhsh 2000 CLC 1598 and Ditta Khan v. Muhammad Zaman and others 1993 MLD 2105 ref.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----S.18---Execution of decree---Forum for- execution--­Determination---Suit was valued for a sum of Rs.1,76,80,544.45 and was decreed for a sum of Rs.3,03,25,593.66 by Banking Court---Execution of the decree was transferred to High Court--­Objection raised by the judgment debtor was that since the valuation of the suit was less than the pecuniary jurisdiction of High Court the execution petition was not maintainable before the High Court---Validity---Determining factor for the purpose of jurisdiction was the amoun; fixed by the plaintiff in the suit on which amount the subject-matter of the suit had been valued--­Once the plaintiff had determined the value of the suit/relief in the plaint that would be conclusive for the purpose of determining the forum of appeal---Banking Court which initially assumed the jurisdiction on the basis of the value fixed by the decree-holder in the plaint itself, was' the only Court which had pecuniary jurisdiction to execute the decree and to decide other matters relating to the execution, discharge and satisfaction of the decree and to deal with all the ancillary matters relating thereto---High Court could neither entertain such execution petition nor undertake the execution proceedings on account of lack of pecuniary jurisdiction---Decree was transferred to the Banking Court for execution accordingly.

Government of Pakistan v. Messrs Allah Bakhsh 2000 CLC 1598 and Ditta Khan v. Muhammad Zaman and others 1993 MLD 2105 ref.

Muhammad Nawaz Kasuri for the Decree-Holder.

Zahid Malik for the Judgment-Debtors.

2002 C L D 341

[Lahore]

Before Syed Zahid Hussain, J

NATIONAL DEVELOPMENT FINANCE

CORPORATION‑‑‑Plaintiff'

Versus

SHEIKHOO COOKING OIL MILLS LIMITED

and 7 others‑‑‑Defendants

Civil Miscellaneous No.453‑B of 2001 in C.O.S. No.9‑B of 2000, decided on 17th July, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.10, 12 & 21‑‑‑Civil Procedure Code (V of 1908), O.IX, R.13‑‑­Setting aside of ex parte decree‑‑‑Failure to appear before Banking Court‑‑‑Non‑appearance of the defendant was due to negotiation for settlement with the Bank‑‑‑When case was listed for hearing and the names of the counsel of the parties appeared in the cause list nobody appeared before the Banking Court to inform that the parties were negotiating for some settlement‑‑­Effect‑‑ Application filed by the defendants under O.IX, R.13, C.P.C. for setting aside the ex parte decree did not fall within the ambit of S.12 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑In view of the remedy of appeal being available under S.21 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, the ex parte decree, could not be set aside under O.IX, R.13, C.P.C.‑‑Application was dismissed in circumstances.

Sh. Muhammad Mubarak and 5 others v. Muhammad Iqbal and 11 others 1994 CLC 1708 and Ex‑Hav. Mirza Mushtaq Baig v. General Court Martial 1994 SCMR 1948 ref.

(b) Banking Companies (Recovery of Loans, Advances, Credits and finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.12 & 21‑‑‑Civil Procedure Code (V of I 908), O.IX, R.13‑‑­Setting aside of ex parte decree‑‑‑Provisions of O.IX, R.13, C.P.C.‑­Applicability‑‑‑In presence of the remedies provided by Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, itself, application under O.IX R.13, C.P.C. for setting aside of an ex parte decree is not maintainable.

Muhammad Khalid Mahmood Khan for Applicant. Tariq Kamal Qazi for Plaintiff.

2002 C L D 345

[Lahore]

Before Amir Alam Khan and Mian Hamid Farooq, JJ

MUHAMMAD NAZIR‑‑‑Appellant

Versus

Haji ZAKA ULLAH KHAN‑‑‑Respondent

Regular First Appeal No.577 of 2001, heard on 16th August, 2001.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑0.3QCXV11, R.3 & S.96‑‑‑Suit for recovery‑‑‑Leave to defend the suit‑‑ ‑Conditional order‑‑‑Rejection of surety bond ‑‑‑Trial Court allowed the defendant to appear and defend the suit subject to deposit of surety bond equal to the amount claimed in the suit‑‑­Trial Court rejected the surety bond submitted by the defendant and directed the defendant to file fresh surety on the same day, which the defendant could not file and the suit was decreed‑‑­Validity‑‑‑Where the ground for rejecting the surety bond was that the bond was executed by two persons and that joint value of two sureties hardly came to the required amount; judgment passed on such ground was not only spineless and comprehensively lacked the support of law, but it was also harsh and amounted to knocking out the defendant on hyper‑technical ground‑‑ Approach of the Trial Court, while dealing with the matter involving valuable rights of the parties was perfunctory, hyper‑technical and could not be countenanced‑‑‑High Court declined to subscribe to the Judgment passed by the Trial Court and the same was set aside‑‑‑Defendant was directed to furnish fresh surety bond of the amount‑‑ Appeal was allowed accordingly.

(b) Administration of justice

‑‑‑‑Technicalities‑‑‑parties should not be non‑suited on mere technicalities and the lis, so far as possible, has to be decided on merits.

Evacuee Trust Property Board through Assistant Director, Evacuee Trust Properties, Gujrat v. Muhammad Siddique alias Bandoo and others 1995 SCMR 1748; Mir Mazar v. Azim PLD 1993 SC 332 and Master Musa Khan and 3 others v. Abdul Haque and another 1993 SCMR 1304 ref.

Malik Waqar Saleem for Appellant.

Muhammad Ashraf Khan Niazi for Respondent.

Date of hearing; 16th August, 2001

2002 C L D 349

[Lahore]

Before Amir Alam Khan and Muhammad Sair Ali, JJ

FIRM MUSLIM TRADERS GENERAL MERCHANT

AND RICE DEALERS, PATTOKI through Partner (Managing

Partner) and 4 others‑‑‑Appellants

Versus

HABIB BANK LIMITED‑‑‑Respondent

First Appeal from Order No. 120 of 1989, heard on 25th September, 2001.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6(8)‑‑‑Civil Procedure Code (V of 1908), O.XXMV, R.2‑‑­Preliminary decree, non passing of‑‑‑Non‑adherence to provisions of O.XXMV, C.P.C. by Banking Tribunal in not passing a preliminary decree‑‑‑Effect ‑‑Banking Tribunals Ordinance, 1984, was promulgated to provide a mechanism of recovery of finance provided by Banking Companies under a system or financing not based upon interest‑‑‑Banking Tribunals Ordinance, 1984, provided for a special procedure for recovery suits as also the mechanism for execution of the decree in consequence thereof‑‑­Where Banking Company claimed enforcement of mortgage of immovable property, decree passed by the Banking Tribunal was a final decree for foreclosure, sale or redemption as per provisions of O.XXXTV, C.P.C.‑‑‑Such non‑adherence to the provisions of O.XXXIV, C.P.C. had no effect in circumstances.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6(8)‑‑‑Civil Procedure Code (V of 1908), O.XXXIV, R.2‑‑­Recovery suit‑‑‑Execution of mortgaged property‑‑‑Preliminary decree, non‑passing of‑‑‑Decree passed by Banking Tribunal axis assailed on the ground that the Tribunal, instead of passing preliminary decree in the first instance, had .passed final decree‑­Validity‑‑‑Banking Tribunal passed the decree for recovery through sale of mortgage property in terms of S.6(8)‑ of the Banking Tribunals Ordinance, 1984 and the Tribunal was not required to pass a preliminary decree as provided in O.XXMV, C.P.C.‑‑‑Banking Tribunal was within its jurisdiction to order execution of the same through sale of the mortgaged property‑‑­Appeal was dismissed in circumstances.

2002 C L D 352

[Lahore]

Before Ch. Ijaz Ahmad and Mian Saqib Nisar, JJ

Messrs HAQ KNITWEAR (PVT.) LIMITED

and 9 others‑‑‑Appellants

Versus

PRUDENTIAL COMMERCIAL BANK LIMITED

through Branch Manager‑‑‑Respondent

Regular First Appeal No. 140 of 2000 decided on 24th September, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Application for leave to defend ‑‑‑Limitation‑‑‑Computation of‑‑‑Failure to make plausible defence in application for leave to appear and defend the suit‑‑‑Notices were published on 23‑7‑1999 and 31‑7‑1999, whereas the application for leave to defend was filed on 2‑9‑1999‑‑ Application for leave to defend was dismissed for non‑prosecution on 8‑10‑1999 and the Banking Court decreed the suit in favour of the Bank‑‑‑Validity‑‑‑Even if taking the latter date for computing the time, the leave to appear and defend application was beyond time and was liable to be dismissed‑‑­Plausible defence had to flow from the application in order to make out a case for permission to leave to appear and defend, but when appellants had not made out a case within the frame of plausible defence in the application, High Court declined to interfere with the judgment and decree passed by the Banking Court‑‑‑Appeal was dismissed in circumstances.

Altaf‑ur‑Rehman Khan for Appellant.

Shaukat Ummar Pirzada for Respondent,

2002 C L D 355

[Lahore]

Before Maulvi Anwarul Haq and Mian Hamid Farooq, JJ

Messrs ALLAMA TEXTILE MILLS LIMITED through

Chief Executive and 6 others‑‑‑Appellants

Versus

HABIB BANK LIMITED‑‑‑Respondent

Regular First Appeal No.652 of 2001, decided on 25th September, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances Ordinance (XXV of 1997)‑‑‑

‑‑‑‑Ss.9 & 16‑‑‑Suit for recovery of loans‑‑‑Appeal against judgment and decree of the Trial Court‑‑‑Compromise between the parties‑‑‑Controversy involved in the appeal stood amicably settled in compromise arrived at between the parties during pendency of the appeal‑‑‑Both parties stated at the Bar that terms of agreement with regard to compromise had been duly settled and they would abide by the same‑‑‑Appeal was allowed and suit filed by the Bank against the appellant was decreed in terms of agreement/compromise arrived at between the parties.

Asim Hafeez for Appellants.

Shams Mehmood Mirza for Respondent.

2002 C L D 356

[Lahore]

Before Amir Alam Khan and Muhammad Sair Ali, JJ

Messrs FAZAL ABDULIAH EXPORTS (PVT.) LIMITED

through Chief Executive and 3 others‑‑‑Appellants

Versus

HABIB BANK LIMITED‑ ‑‑Respondent

Regular First Appeal No.584 of 2000, heard on 27th September, 2001.

Banking Companies (Recovery of Loan, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Civil Procedure Code (V of 1908), 0. VII, R. 11 ‑‑‑Suit for recovery of loan‑‑‑Leave to defend suit‑‑‑Appellants/borrowers resisted the suit of respondent‑Bank by filing application for leave to defend alongwith application under O.VII, R.11, C.P.C. contending that it was time‑barred as the finance facility had expired on 31‑12‑1994 and the suit was filed on 2‑6‑2000 and respondent‑Bank was not competent to charge mark‑up beyond the period of 31‑12‑1994‑‑‑Banking Court rejected the application and decreed the suit‑‑‑Validity‑‑‑None of the grounds raised by appellants was considered in the impugned judgment‑‑ All the documents except statements of accounts bore the date of 1‑I‑1994‑‑‑No single document showing the extension of facility beyond the period of 31‑12‑1994 was available on record‑‑­Statements of accounts showed entries of debit and credit till 16‑11‑1999 and charging of mark‑up for unspecified period at unspecified rate beyond period of 31‑12‑1994‑‑‑Banking Court seemed to have decided the suit by giving bland, general, vague and unsubstantiated observations, which did not find support from documents available on record‑‑‑High Court set aside the impugned judgment and decree and remanded the case to Banking Court for its fresh decision in accordance with law.

Ch. Tariq Mahmood for Appellants.

Nisar Ahmad Nizar for Respondent.

Date of hearing: 27th September, 2001.

2002 C L D 362

[Lahore]

Before Amir Alam Khan and Muhammad Sair Ali, JJ

Mst. ZAMURAD AFZA‑‑‑Appellant

Versus

NATIONAL BANK OF PAKISTAN through President and 2 others‑‑‑Respondents

First Appeal from Order No. 202 of 1988, heard on 25th September, 2001.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXIV, R.2‑‑‑Banking Tribunals Ordinance (LVIII of 1984), S.6(8)‑‑‑Preliminary decree, non‑passing of‑‑‑Banking Tribunal not passing a preliminary decree under provisions of O.XXXIV, C.P.C.‑‑‑Effect‑‑‑Banking Tribunals Ordinance, 1984, was promulgated to provide a mechanism of recovery of finance provided by Banking Companies under a system or financing not based upon interest‑‑‑Banking Tribunals Ordinance, 1984, provided for a special procedure for recovery suits as also the mechanism for execution of the decree in consequence thereof‑‑­Where Banking Company claimed enforcement of mortgage of immovable property, decree passed by the Tribunal was a final decree for foreclosure, sale or redemption as per provisions of O.XXXIV, C.P.C.‑‑‑Non‑adherence to the provisions of O.XXXIV, C.P.C. had no effect in circumstances.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6(8)‑‑‑Civil Procedure Code (V of 1908), O.XXXIV, R.2‑‑­Recovery suit‑‑‑Execution of decree for recovery through sale of mortgaged property‑‑‑Preliminary decree, non‑passing of‑‑‑Decree passed by Banking Tribunal was assailed on the ground that the Tribunal instead of passing preliminary decree in the first instance had passed final decree‑‑‑Validity‑‑‑Banking Tribunal passed the decree for recovery through sale of mortgaged property in terms of S.6(8) of the Banking Tribunals Ordinance, 1984 and the Tribunal was not required to pass a preliminary decree as provided in O.XXXIV, C.P.C.‑‑‑Banking Tribunal was within its jurisdiction to order execution of the same through sale of the mortgaged property.

Abdul Rehman Madni for Appellant.

Muhammad Anwar Bhaar for Respondents.

Date of hearing: 25th September, 2001.

2002 C L D 365

[Lahore]

Before Mian Hamid Farooq, J

MUNIR AHMAD‑‑‑Petitioner

Versus

JUDGE BANKING COURT‑‑‑Respondent

Writ Petition No. 21729 of 1998, decided on 7th June, 2001

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Civil Procedure Code (V of 1908), S.12(2)‑‑‑Setting aside of decree‑‑‑Provisions of S.12(2), C.P.C.‑‑‑Scope‑‑‑Borrower accepted the decree and sought permission from the Banking Court, to pay the principal amount in instalments‑‑‑After the borrower had consented to the decree, application under S.12(2), C.P.C. was filed by him to set aside the decree‑‑‑Validity‑‑‑Where the decree had been consented and the borrower had made statement for deposit of principal amount, he had no locus standi either to file an application under S.12(2), C.P.C. or any other application challenging the decree‑‑‑Application was not maintainable in circumstances.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9 & 12‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Setting aside of decree‑‑‑ Suit filed by the Bank was decreed by the Banking Court and the decree was accepted by the petitioner‑‑‑Petitioner assailed the order passed by the Banking Court on the ground that he had noted wrong date of hearing‑‑‑Validity‑‑‑Petitioner, in .the present case, was in the knowledge of the proceedings and had been pursuing the same all the time, as he had consented to the decree, sought permission from the Banking Court to pay the principal amount in instalments‑‑‑Plea of wrong noting of the date was of no avail to the petitioner‑‑‑Where the petitioner had, not come to the High Court with clean hands to seek equitable relief, High Court declined to exercise Constitutional jurisdiction in his favour‑‑‑Constitutional petition was dismissed in circumstances.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Civil Procedure Code (V of 1908), S.12(2)‑‑‑Proceedings under S.9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Provisions of S.12(2), C.P.C.‑‑‑Applicability‑‑‑Provisions of S.12(2), C.P.C. have no applicability to the proceedings arising out of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.

Messrs Gold Star International and another v. Muslim Commercial Bank Limited 2000 MLD 421; United Bank Limited v. Messrs Zafar Textile Mills Limited 2000 CLC 1330 and Emirates Bank International Limited v: Messrs Usman Brothers and others PLD 1998 Kar. 338 ref.

Ashar Ellahi for Petitioner.

Mian Yousaf Umar for Respondent.

2002 C L D 369

[Lahore]

Before Mian Hamid Farooq, J

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Plaintiff

Versus

N.T.N. (PVT.) LIMITED‑‑‑Defendant

C.O.S. No. 29 of 1999, decided on 10th September, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Application for leave to defend‑‑‑Negligence of Bank‑‑‑Determination‑‑‑Banking Court, jurisdiction of‑‑‑Contention of the borrower was that the project could not be completed due to fault and negligence of the Bank‑‑‑Validity‑‑‑Exercise of determining such negligence and fault could not be undertaken by Banking Court in the suit for recovery of Bank loan.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Application to defend the suit‑‑‑Grant of‑‑‑Plea of pendency of suit for damages‑‑‑Borrowers had already filed a suit for recovery of some amount as damages against the Bank and the same was pending in the same Court ‑‑‑Effect‑‑‑Pendency of suit for damages was not sufficient, within the parameters of law, for the grant of leave to defend the suit.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Leave to defend the suit‑‑‑Grant of‑‑‑Plea of damages caused due to negligence of Bank‑‑‑Borrowers failed to bring any material on record, even prima facie, to prove that they had, in fact, suffered any losses‑‑‑No amount of alleged damages caused to the borrowers had either been mentioned in their applications for leave to defend or in any of the documents‑‑‑No documentary evidence in support of the said assertion had been placed on record to prima facie show that the borrowers had in fact suffered any losses and if so what was the quantum of such losses‑‑‑Mere a bald assertion regarding causing losses would not entitle the borrowers for the grant of leave to defend the suit.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Non‑receipt of any payment from the Bank‑‑‑Contention of the borrowers was that they had not received any payment from the Bank, rather the suppliers had directly received the same from the Bank‑‑?Validity‑‑‑Where the borrower company had not denied the availing of the financial facilities, it could not say that no transaction was undertaken between the parties‑‑‑Even if some payments were made directly to the suppliers those must be pursuant to some arrangements between the parties and in accordance with the agreement‑‑‑Where Banking Court declined to grant leave to appear and defend the suit, the allegations made in the plaint were deemed to be correct as provided under S.9(4) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Suit was decreed in circumstances.

Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 ref.

(e) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Leave to defend the suit‑‑‑Management; change of‑‑‑Plea raised by the borrowers was that as the management of the defendant company had been changed, therefore, the borrowers not being the existing Directors of the defendant‑company were not liable to re‑pay the loan‑‑‑Neither the change of management was accepted by the Bank nor the alleged incoming management had furnished fresh documents, including the finance agreements, guarantees and the mortgage, nor the charge documents and other allied instruments were released/ discharged by the Bank‑‑‑Effect‑‑‑Where there was no change of management, it was a lame excuse only to manipulate a ground for the grant of leave to defend the suit‑‑‑Application for leave to defend the suit was dismissed in circumstances.

(f) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Contract Act (IX of 1872), S.130‑‑‑Suit for recovery of Bank loan‑‑‑Revocation of guarantee‑‑‑Suit was filed against borrowers as well as the surety‑‑‑Contention of the surety was that she had resigned from the management and was absolved from the liability of her being a surety of the Bank loan‑‑‑No notice for revocation of guarantee, as contemplated under S.130 of the Contract Act, 1872, was served upon the Bank by the surety‑‑‑Effect‑‑‑As such it could not be said that surety stood discharged‑‑‑In the absence of notice the guarantees furnished by the surety could not possibly be revoked.

(g) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Leave to defend the suit‑‑‑Failure to raise serious and bona fide dispute‑‑‑Effect‑‑‑Where the dispute raised by all the defendants was neither serious nor bona fide, the defendants had failed to make out a case for the grant of leave to defend the suit‑‑‑Application for leave to defend was dismissed accordingly.

(h) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Photo‑copies of documents produced by Bank‑‑‑Bank had placed on record the photo‑copies of all the documents, on the basis of which the suit was filed‑‑‑Execution of the documents had not been denied by the borrowers even in their application for the grant of leave to defend‑‑‑Effect‑‑‑Execution of all the documents would be deemed to be admitted‑‑‑Statement of accounts, in the present case, which was duly verified/certified under the Bankers' Books of Evidence Act, 1891, was also on record, regarding the correctness of which no objection was raised by any of the borrowers‑‑‑Presumption of correctness was attached to such statement of account under the law, therefore, the entries made therein were presumed to be true and correct‑‑‑Where there was no rebuttal of the documents on record by the borrowers, the suit was decreed.

Rana Mashhaud Ahmad Khan for Plaintiff.

Mian Ghulam Rasool for Defendants Nos. 1, 2 and 5.

Ch. Muhammad Munir Javaid for Defendants Nos. 3 and 4.

Dates of hearing: 9th April and 7th June, 2001.

2002 C L D 379

[Lahore]

Before Ch. Ijaz Ahmad and Mian Saqib Nisar, JJ

SHAMS PAK ASSOCIATES (PVT.) LIMITED through Chief Executive and another‑‑‑Appellants

Versus

HABIB BANK LIMITED and 3 others‑‑‑Respondents

First Appeal from Order No. 99 of 1996, heard on 25th September, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance (XXV of 1997)‑‑‑

‑‑‑‑Ss.9 & 12‑‑‑Suit for recovery of loan‑‑‑Ex parte decree, setting aside of‑‑‑Banking Tribunal issued notice to the defendants who filed reply to the show‑cause notice issued by Chairman, Banking Tribunal and case was fixed for arguments with direction to submit written arguments‑‑‑Plaintiff filed written arguments but the defendants failed to file the same‑‑‑Banking Tribunal dismissed the reply to show‑cause notice filed by the defendants for non‑prosecution and decreed the suit ex pane‑‑­Application for setting aside the ex parte decree by the defendants was also dismissed‑‑‑Defendants contended that their counsel failed to note the correct date of hearing and was misled about the fixation of the case on date of hearing‑‑‑Question whether the defendants' counsel noted incorrect date, was a question which necessarily could be resolved only through recording of evidence‑‑‑Defendants, prima facie, on account of the contents of the application supported by an affidavit, were able to prove the same‑‑‑Application for setting aside ex parte decree, in circumstances, should have been allowed instead of its dismissal‑‑‑Ex pane judgment and. decree passed by the Banking Tribunal against the defendants were set aside with the result that the suit and. reply to the show‑cause notice would be decided afresh after affording opportunity of hearing to the parties.

M.A. Zafar for Appellants.

Haji Dildar Khan and Mian Nasir Mehmood for Respondents.

Date of hearing: 25th September, 2001.

2002 C L D 397

[Lahore]

Before Mian Hamid Farooq, J

ABDUL HAMID KHOKHAR C/O Metal Manufacturing Company outside Khiali Gate, Gujranwala‑‑‑Petitioner

Versus

BANKING COURT and 2 others‑‑‑Respondents

Writ Petition No. 11692 of 2000, heard on 18th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.12 & 18‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Ex parte decree, setting aside of‑‑‑After passing of ex parte decree, defendants made application for its setting aside‑‑‑Banking Court, without making any decision on such application, issued warrants of arrest of defendants‑‑­Validity‑‑‑Banking Court was under an obligation to dispose of the application irrespective of its result, so that in case of its decision adverse to defendants, they could avail their other remedies before higher forums‑‑‑High Court accepted the appeal anal directed the Banking Court to decide the application filed for setting aside the ex pane decree within specified time.

Syed Amir Ali Shah for Petitioner.

Nemo for Respondents.

Date of hearing: 18th October, 2001.

2002 C L D 399

[Lahore]

Before Jawad S. Khawaja and Abdul Shakoor Paracha, JJ

KHALID PERVAIZ‑‑‑Appellant

Versus

UNITED BANK LIMITED‑‑‑Respondent

First Appeal from Order No. 107 of 2000, heard on 18th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.12 & 21‑‑‑Ex pane decree, setting aside of ‑‑‑Limitation‑‑­Decree was passed on 9‑9‑1998, whereas application for its setting aside was made on 12‑10‑1998‑‑‑Limitation provided under S.12 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 for setting aside ex-parte decree was 21 days‑‑‑Banking Court dismissed the application being time‑barred‑‑‑Validity‑‑‑Banking Court had rightly dismissed the application‑‑‑Appeal was dismissed.

National Bank of Pakistan v. Tradewell (Pakistan) Corporation and 2 others 1991 CLC 1243 ref.

M. Khalid Hashmi for Appellant.

Muhammad Shujah Baba for Respondent.

Date of hearing: 18th October, 2001.

2002 C L D 401

[Lahore]

Before Mian Hamid Farooq. J

Mst. RUQIYYA RHAZES‑‑‑Petitioner

Versus

AL‑FALAH BANK and 7 others‑‑‑Respondents

Writ Petition No. 17221 of 1999, heard on 18th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 3, 12 & 27‑‑‑Civil Procedure Code (V of 1908), S.12(2)‑‑­Decree in suit for recovery of loan‑‑‑Application under S.12(2), C.P.C. for setting aside the decree of Banking Court‑‑­Maintainability‑‑‑Provisions of S.12(2), C.P.C. have no application to proceedings arising out of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.

Emirates Bank International Limited v. Messrs Usman Brothers and others PLD 1998 Kar. 338; United Bank Limited v. Messrs Zafar Textile Mills Limited 2000 CLC 1330 and Life, Paper Store and others v. Bank of Punjab and others 2001 YLR 77 ref.

Mian Javed Jalal for Petitioner.

Shujah Baba for Respondent No. 7.

Nemo for the Remaining Respondents.

Date of hearing: 18th October, 2001.

2002 C L D 403

[Lahore]

Before Mian Hamid Farooq, J

Messrs SHARIF COTTON GINNING, PRESSING AND OIL FACTORY and 4 others‑‑‑Petitioners

Versus

Messrs NATIONAL BANK OF PAKISTAN‑‑‑Respondent

Writ Petition No. 1837 of 1998, heard on 12th October 2001.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6‑‑‑Suit for recovery of money‑‑‑Some of the defendants filed reply to show‑cause notices, while rest of them, although duly served, did not choose to file the reply and abandoned the proceedings‑‑‑Banking Tribunal, after taking into consideration the points/questions raised in reply to show-cause notices: passed the decree‑‑‑Such decree could not be said to be an ex parte decree.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss.6 & 9‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Decree passed by Banking Tribunal-----­Non-filing of appeal‑‑‑Effect‑‑‑Defendants did not file appeal against decree, but after three years of its passing challenged the same through Constitutional petition‑‑‑Maintainability of Constitutional petition‑‑‑Decree had attained finality after lapse of period of limitation prescribed for filing of appeal‑‑‑After passing of decree, defendant went into deep slumber deeming it valid and final, thus, had acquiesced in the matter‑‑‑Constitutional petition was hit by principles of acquiescence and laches deserving dismissal.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 18(6) & 21(5)‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Execution of decree‑‑‑Order of Banking Court to auction the property was challenged through Constitutional petition‑‑‑Validity‑‑‑Impugned order at best, could be termed as interlocutory order, which was outside the purview of Constitutional jurisdiction‑‑‑Defendants could file objections to attachment and sale of property under S.18(6) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and in case of their failure, could file appeal under S.21(5) of the said Act, which remedies were adequate and efficacious‑‑‑Impugned order was not amenable to Constitutional jurisdiction in circumstances.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Execution of decree‑‑‑High Court stayed further execution proceedings subject to deposit of Rs.10 lacs‑‑‑Non-­compliance of order‑‑‑Effect-‑‑Non‑compliance of stay order exhibiting the conduct of petitioners would operate against them‑‑‑High Court refused to exercise Constitutional jurisdiction in the matter, which was an equitable and discretionary relief.

(e) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Interlocutory order is outside the purview of Constitutional jurisdiction.

Amjad Hussain Syed for Petitioners.

Nemo for Respondent.

Date of hearing: 12th October 2001.

2002 C L D 407

[Lahore]

Before Mian Hamid Farooq, J

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Manager‑‑‑Petitioner

Versus

Mst. RUKHSANA and 4 others‑‑‑Respondents

Writ Petition No. 13947 of 1997, heard on 10th October, 2001

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6‑‑‑Decree‑‑‑Mark‑up‑‑‑Remission of‑‑‑While passing decree in a suit for recovery of amount, Banking Tribunal has no jurisdiction to give direction to Bank for remission of mark‑up.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss.6(5), 10 & 11‑‑‑Constitution of Pakistan (1973), Art 199‑‑­Constitutional petition‑‑‑Setting aside of ex parte decree on the application of a person not party to the suit/decree‑‑‑Validity‑‑­Application for setting aside the decree was not even signed by any person‑‑ Applicant had no nexus with decree as he was not party to the suit‑‑‑Effect‑‑‑Ex parte decree had attained finality as parties thereto did not file any application for its setting aside‑‑­Applicant having no locus standi to file application being not authorized to do so by the parties to the decree, application was misconceived and non‑maintainable‑‑‑Banking Tribunal had passed the impugned order in complete oblivion of the record of the case‑‑‑High Court accepted Constitutional petition and set aside impugned order being illegal and without lawful authority.

(c) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.11‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Dismissal of execution petition for non‑prosecution on a date when proceedings were fixed only for awaiting the reply from Head Office of the decree‑holder‑‑‑Validity‑‑‑Execution petition could not have been dismissed in default on a date not fixed for hearing‑‑‑Impugned order could not be said to be a legal order, which was set aside by High Court in exercise of Constitutional jurisdiction‑‑‑Constitutional petition was accepted.

Syed Haider Ali Shah for Petitioner.

Nemo for Respondents.

Date of hearing: 10th October, 2001.

2002 C L D 410

[Lahore]

Before Mian Hamid Farooq, J

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Manager‑‑‑Petitioner

Versus

ZAFAR ULLAH alias MUZAFFAR AHMAD and 3 others‑‑‑Respondents

Writ Petition No. 19378 of 1997, heard on 11th October, 2001.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.Il‑‑‑Constitution of Pakistan (1973), Art. 1991‑‑Constitutional petition‑‑‑Judgment‑debtors, during execution of ex parte decree, produced receipts showing deposit of amount under Prime Minister's Package, whereupon Banking Tribunal, being satisfied, consigned the execution petition to record ‑‑‑Validity‑‑­Banking Tribunal after calculating the amounts had come to the conclusion that judgment‑debtors were entitled to deduction of amount deposited by them out of the principal amount‑‑‑Order passed by the Banking Tribunal was not challenged by the Bank before higher forum, hence, the same attained finality binding the Bank by its terms‑‑‑Impugned order was well‑reasoned and did not suffer from any legal infirmity, therefore, High Court refused to interfere with the same and dismissed the Constitutional petition.

Mian Nasir Mehmood for Petitioner.

Muhammad Asif Raja for Respondents.

Date of hearing: 11th October, 2001.

2002 C L D 417

[Lahore]

Before Mian Hamid Farooq, J

ZAFAR IQBAL‑‑‑Petitioner

Versus

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN and 3 others‑‑‑Respondents

Writ Petition No. 12897 of 1997, decided on 11th October, 2001.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss.6(6), 9, 10 & 11‑‑‑Constitution of Pakistan (1973), Art. l99‑‑­Constitutional petition‑‑‑Maintainability‑‑‑Decree not challenged in appeal‑‑‑Effect‑‑‑Challenge through Constitutional petition to judgment and decree of Banking Tribunal after two years of its passing‑‑‑Validity‑‑‑Constitutional petition was not maintainable, because petitioner had not challenged the judgment and decree in appeal provided under Banking Tribunals Ordinance, 1984‑‑­Petitioner had acquiesced in the matter and as such was bound by the terms of decree‑‑‑Constitutional petition was also hit by the principle of laches, because petitioner had agitated the matter after lapse of two years, which was a past and closed transaction‑‑‑High Court refused too exercise Constitutional jurisdiction in the matter and dismissed the Constitutional petition.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. l99‑‑‑Constitutional petition would not be maintainable against judgment and decree not challenged in appeal within stipulated time.

(c) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Laches‑‑‑Constitutional petition filed against judgment and decree after two years of its passing was, to be hit by the principle of laches.

Asif Mehmood Cheema for Petitioner.

Nemo for Respondents.

2002 C L D 419

[Lahore]

Before Jawad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs BALLY SHOES (PVT.) LIMITED and 3 others‑‑‑Appellants

Versus

EQUITY PARTICIPATION FUND, STATE LIFE BUILDING through Incharge EPF, Cell I.D.B.P.‑‑‑Respondent

Regular First Appeal No.414 of 2001, decided on 15th October, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finance) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 15 & 21‑‑‑Civil Procedure Code (V of 1908), OXX, R.5‑‑­Decree‑‑‑Banking Court after granting leave to defend, framing issues and recording evidence, decreed the suit on assumption that in fact leave to defend had not been granted to appellants/defendants‑‑‑Impugned judgment even otherwise was sketchy and did not comply with requirements of O.XX, R.5, C.P.C.‑‑‑Appellate Court set aside the same and remanded the case to Banking Court for passing judgment in accordance with provisions of O.XX, R.5, C.P.C. after hearing both the parties.

Shazib Masud for Appellants.

Sadiq Hayat Lodhi for Respondent.

2002 C L D 420

[Lahore]

Before Mian Hamid Farooq, J

TAHIR KARIM ‑‑‑Petitioner

Versus

JUDGE BANKING COURT NO. 1, FAISALABAD and 4 others‑‑‑Respondents

Writ Petition No. 8066 of 2000, heard on 18th October 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.15‑‑‑Limitation Act (IX of 1908), S.5‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional-----petition‑‑‑Setting aside of ex parte decree‑‑‑Banking Court without adverting to grounds taken by petitioner in his application for setting aside of ex parte decree and application under S.5 of Limitation Act, 1908, for condonation of delay, dismissed both the applications on the assumption that presence of his brother (defendant) was sufficient to believe that petitioner had also been served‑‑-­Validity‑‑‑Such approach of Banking Court was, perfunctory and could not be countenanced by any stretch of imagination‑‑­Banking Court was bound to decide both the applications dealing with the grounds taken therein after calling for reply from the Bank‑‑‑Impugned order being .devoid of reasons and sketchy warranted interference by High Court in exercise of its Constitutional jurisdiction‑‑‑Constitutional petition was accepted and impugned order was set aside with direction to Banking Court to decide the applications for setting aside of ex pane decree and condonation of delay under S.5 of Limitation Act, 1908 in accordance with law.

Irfan Qadir for Petitioner.

Nemo for Respondents.

Date of hearing: 18th October, 2001.

2002 C L D 439

[Lahore]

Before Jawad S. Khawaja and Muhammad Sair Ali, JJ

UNITED BANK LIMITED‑‑‑Appellant

Versus

Messrs CLIMAX TRADING CORPORATION and 7 others‑‑‑Respondents

Regular First Appeal No. 229 of 1999, heard on 3rd December, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 7, 15 & 21‑‑‑Limitation Act (IX of 1908), S.18‑‑‑Suit for recovery of amount‑‑‑Bank alleged to have inadvertently credited suit amount to the account of defendants being maintained with it, which was withdrawn by defendants in 1977‑‑‑Bank filed suit on 11‑11‑1981, which was dismissed by Banking Court being time‑barred‑‑‑Contention of Bank that on account of provisions contained in S.18 of Limitation Act, 1908, period of limitation did not run against Bank, was wholly misconceived‑‑‑Section 18 of Limitation Act, 1908, would be applicable, where a person having a right to file a suit had been kept from the knowledge of such right by means of fraud committed on him by the other side‑‑­Defendants had not committed any fraud nor had they committed any act to prevent Bank from acquiring knowledge of its rights‑‑­Mistake, if any, was entirely on the part of Bank and was not induced by any deceit or fraud on the part of defendants‑‑‑Bank had the means of detecting its mistake, which in fact had been detected through an audit of its accounts‑‑‑Section 18 of Limitation Act, 1908, thus had no application in circumstances.

(b) Limitation Act (IX of 1908)‑‑‑

‑‑‑‑S.18‑‑‑Applicability‑‑‑Section 18 of Limitation Act, 1908, would be applicable, where a person having a right to file a suit had been kept from the knowledge of such right by means of fraud committed on him by the other side.

Allah Ditta Sajid for Appellant.

Nemo for Respondents:

Date of hearing: 3rd December, 2001.

2002 C L D 444

[Lahore]

Before Ch. Ijaz Ahmad, J

MUHAMMAD ZAHID‑‑‑Petitioner

Versus

JUDGE BANKING COURT NO. II, FAISALABAD and 3 others‑‑‑Respondents

Writ Petition No. 1563 of 2001, decided on 5th November, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18(6)‑‑‑Civil Procedure Code (V of 1908), O.XXI, R.90‑‑­Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑­Execution of decree‑‑‑Constructed house was advertised by Court Auctioneer as plot and auctioned the same for Rs.2, 70, 000‑‑­Executing Court rejected objection petition filed by petitioner‑‑­Validity‑‑‑Issuance of advertisement by Court Auctioneer with regard to plot instead of house brought the case in the area that auction had not been held in terms of the property in question‑‑­Auction‑purchaser had already filed suit against the petitioner for specific performance of agreement to sell executed between them for a consideration of Rs. 5,05,000‑‑‑Such facts made it clear that property in question had not been sold at market price‑‑‑High Court accepted the Constitutional petition and set aside impugned order subject to conditions that petitioner would have to satisfy the decree within specified time and would have to pay 5% to auction‑purchaser on amount of auction price, failing which Constitutional petition would be deemed to be dismissed.

Dawood Flour Mills v. National Bank of Pakistan 1993 MLD 3205 and Messrs S.P.R.L. Rehman Brothers and others v. Judge Banking Court II and another 2000 P.C.T.L.R. 1 ref.

Abdul Wahid Chaudhry for Petitioner.

Syed Muhammad Hanif Bokhari for Respondent No.2.

Nemo for Respondents Nos.3 and 4.

2002 C L D 447

[Lahore]

Before Mian Hamid Farooq, J

Chaudhry FARRUKH RASOOL‑‑‑Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Finance, Government of Pakistan and 4 others‑‑‑Respondents

Constitutional Petition No. 25519 of 1998, heard on 27th November, 2001.

(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑‑Arts. 199 & 203‑G‑‑‑Constitutional petition‑‑‑Bank loan Charging of interest/mark‑up‑‑‑Petitioner/borrower contended that charging of mark‑up/interest by Bank was ran‑Islamic‑--Validity‑‑‑High Court in view of Art. 203‑G of the Constitution had no power or jurisdiction to determine such question.

Muhammad Ramzan v. Citibank 2001 CLC 158 and Dr. Muhammad Aslam Khaki v. Syed Muhammad Hussain and 2 others PLD 2000 SC 225 ref.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Constitution of Pakistan (1973), Art. 199 ‑‑‑ Constitutional petition‑‑‑Bank loan‑‑‑Challenge to demand of interest mark up by Bank ‑‑‑Maintainability‑‑‑ Petitioner/borrower had got the alternative remedy to file a suit against Bank under S.9 Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, thus, Constitutional petition was not maintainable.

Ch. Muhammad Ismail v. Fazal Zada, Civil Judge, Lahore and 20 others PLD 1996 SC 246 and Mrs. Farha Nasir v. Pakistan through Secretary to Government, Ministry of Economics and Commercial Affairs, Islamabad and 2 other 2001 MLD 1657 ref.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Constitution of Pakistan (1973), Art 199‑‑‑Constitutional petition‑‑‑Bank loan‑‑‑Demand of interest/mark‑up on loan was alleged by petitioner‑borrower to be against the Injunctions of Islam‑‑‑Validity‑‑‑Petitioner had obtained a lours facility from Bank and had executed some charge documents favouring Bank Petitioner had entered into agreement with leis free‑will, thus, he was bound under Islamic norms of justice to fulfil the contractual obligations and commitments undertaken by him through execution of such documents‑‑‑High Court refused to exercise Constitutional jurisdiction under such facts and circumstances, and dismissed the petition.

Dr. Mahmood‑ur‑Rahman Faisal and others v. Secretary, Ministry of Law, Justice and Parliamentary Affairs, Government of Pakistan. Islamabad, and others PLD 1992 FSC 1; Messrs Momin Motor Company v. The Regional Transport Authority, Dacca and others PLD 1962 SC 108; Muhammad Mumtaz Masud and 2 others v. House Building Corporation and 2 others 1994 SCMR 2287 and Syed Anwar‑ul‑Hussain v. District Manager, Small Business Finance Corporation Branch, Vehari and 2 others 2001 YLR 2741 ref.

Malik Imran Nazir Awan for Petitioner.

Ch. M. Zafar Iqbal for Respondents.

Date of hearing: 27th November, 2001.

2002 C L D 451

[Lahore]

Before Jawad S. Khawaja and Abdul Shakoor Paracha, JJ

KHALIDA ADEEB KHANAM‑‑‑Appellant

Versus

Messrs PRUDENTIAL INVESTMENT BANK LTD. and 9 others‑‑‑Respondents

First Appeal from Order No. 147 of 2001, decided on 1st November, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.14 & 21‑‑‑Decree‑‑‑Objection petition‑‑‑Appellant's claim was that mortgage of disputed plot in favour of Bank axis not valid, and that he was bona fide purchaser thereof for valuable consideration without having prior notice of any encumbrance thereon‑‑‑Banking Court, after recording evidence, rejected the objection petition‑‑‑Validity‑‑‑Bank claimed to be mortgagee of disputed plot on basis of two documents viz. an application for transfer of allotment of disputed plot signed by its original allottee, from whom mortgagor had acquired it, which was found to be a fake document as it was not part of record of Capital Development Authority; and copy of letter addressed to original allottee, which did not bear signatures of any functionary of Capital Development Authority‑‑‑Both such documents had not resulted in creation of mortgage in favour of Bank‑‑‑Nothing was available on record to show that appellant was not bona fide purchaser of disputed plot‑‑‑Appellate Court accepted the appeal and allowed the objection petition accordingly.

Habib Bank Limited v. Messrs Ajma Corporation and others 2000 CLC 1425 ref.

Muhammad Saliheen Mughal for Appellant.

Shahzada Mazhar for Respondents.

2002 C L D 453

[Lahore]

Before Ch. Ijaz Ahmad, J

Messrs JDW SUGAR MILLS LTD. ‑‑‑Petitioner

Versus

PROVINCE OF PUNJAB through Ministry of Industries and Development, Lahore

and 2 others‑‑‑Respondents

Writ Petition No.21114 of 2001, decided on 29th November, ‑2001.

(a) Words and phrase.‑‑‑

‑‑‑‑"Set up"‑‑‑Meaning.

Kitabistan's Twentieth Century Practical Dictionary ref.

(b) Words and phrases‑‑‑

‑‑‑‑"Enlarge"‑‑‑Meaning.

Black's Law Dictionary ref.

(c) Words and phrases‑‑‑

‑‑‑‑"Extend"‑‑‑Meaning.

Black's Law Dictionary ref.

(d) Punjab Industries (Control on Establishment and Enlargement) Ordinance (IV of 1963)‑‑‑

‑‑‑‑S.3‑‑‑Term: "set up"‑‑‑Connotation‑‑‑Term "set up" means expansion and enlarge.

(e) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Constitutional jurisdiction of High Court‑‑‑Scope‑‑?Findings of Tribunal‑‑‑Interference by High Court ‑‑Extent‑‑‑High Court has no jurisdiction to substitute its own findings in place of findings of Tribunals below in Constitutional jurisdiction.

Musaddaq's case PLD 1973 Lah. 600 ref.

(f) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Constitutional petition‑‑‑Concurrent findings of fact of Tribunals below‑‑‑Interference‑‑‑Scope‑‑‑Constitutional petition is not maintainable against such findings.

Khuda Bakhsh's case 1974 SCMR 279 ref.

(g) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Constitutional petition‑‑‑Maintainability‑‑‑Orders passed by Tribunal‑‑‑Validity‑‑‑Where the orders passed against the petitioner were not in violation of any rules and regulations, Constitutional petition was not maintainable against such orders.

Ali Meer's case 1984 SCMR 433 ref.

(h) Punjab Industries (Control on Establishment and Enlargement) Ordinance (IV of 1963)‑‑‑

‑‑‑‑S.3‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition ‑‑‑Notification of Government of the Punjab Industrial and Mineral Development Department, dated 21‑11‑1998‑‑‑Notification issued by Provincial Government‑‑‑Dispute was with regard to extension in crushing capacity of a sugar mill‑‑‑Show‑cause notice was issued to the petitioner for the reason that the extension was in violation of S.3 of the Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963‑‑‑Contention of the petitioner was that the Notification was applicable with regard to setting up of new sugar mills and not on enhancement or enlargement of existing units ‑‑‑Validity‑‑‑Notification was issued by Competent Authority in accordance with law under the provisions of Punjab Industries (Control on Establishment and Enlargement) Ordinance, 1963‑‑‑Where the matter was within the area of policy, High Court had no jurisdiction to take the role of policy‑maker in the garb of interpreting the law‑‑‑Authorities had rightly repelled the contention of the petitioner and High Court declined to interfere with the findings arrived at by the Authorities‑‑‑Petition was dismissed in circumstances.

Zia ur Rehman's case PLD 1973 SC 49 and Zamir Ahmad Khan's case 1978 SCMR 327 ref.

Ali Sibtain Fazli and Tariq Kamal Qazi for Petitioner.

2002 C L D 459

[Lahore]

Before Mian Hamid Farooq, J

GHULAM SHABBIR SHAH‑‑‑Petitioner

Versus

PAKISTAN through the Secretary to the Government of Pakistan, Ministry of Finance, Islamabad and 3 others‑‑‑Respondents

Constitutional Petition No. 14267 of 1994, heard on 27th November, 2001.

(a) Islamic Law‑‑‑

‑‑‑‑Financing in Islam‑‑‑Contractual obligation‑‑‑Charging of interest‑‑‑ Legality‑‑‑ Petitioner obtained loan from the respondent Bank and a suit for recovery of the loan was pending before the Banking Court‑‑‑Plea raised by the petitioner was that charging of interest was un‑Islamic and the same could not be recovered‑‑­Validity‑‑‑Where the petitioner executed some charge documents favouring Bank and he had entered into agreement with his free­ will, he under the Islamic norms of justice, was bound to fulfil the contractual obligations and commitments undertaken by him through execution of those documents.

Messrs Momin Motor Company v. The Regional Transport Authority, Dacca and others PLD 1962 SC 108 and Muhammad Mumtaz Masud and 2 others v. House Building Finance Corporation and 2 others 1994 SCMR 2287 ref.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Arts. 199 & 203‑G‑‑‑Constitutional petition‑‑‑Constitutional jurisdiction of High Court‑‑‑Scope‑‑‑Charging of interest ‑‑Declaring the same as un‑Islamic‑‑‑High Court, in view of Art. 203‑G of the Constitution has no power or jurisdiction, to determine the charging of interest as un‑Islamic moreover, past and closed transaction cannot be re‑opened.

Muhammad Ramzan v. Citibank 2001 CLC 158 and Dr. Muhammad Aslam Khaki v. Syed Muhammad Hashim and 2 others PLD 2000 SC 225 ref.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Constitution of Pakistan (1973), Art. 199 ‑‑‑ Constitutional petition‑‑‑Maintainability‑‑‑Alternate remedy‑‑‑Grievance of the petitioner was regarding charging of interest on Bank loan‑‑­Validity‑‑‑Petitioner had alternate remedy to file suit against the respondent--‑Bank under S.9 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑High Court declined to exercise Constitutional jurisdiction in favour of the petitioner‑‑‑Constitutional petition was dismissed in circumstances.

Dr. Mahmood‑ur‑Rahman Faisal and others v. Secretary, Ministry of Law, Justice and Parliamentary Affairs, Government of Pakistan, Islamabad, and others PLD 1992 FSC 1; Syed Anwar‑ul‑Hussain v. District Manager, Small Business Finance Corporation Branch, Vehari and 2 others 2001 YLR 2741; Ch. Muhammad Ismail v. Fazal Zada, Civil Judge, Lahore and 20 others PLD 1996 SC 246 and Mrs. Farha Nasir v. Pakistan through Secretary to Government, Ministry, of Economics and Commercial Affairs, Islamabad and 2 others 2001 MLD 1657 ref.

Badar Munir for Petitioner.

Nemo for Respondents.

Date of hearing: 27th November, 2001.

2002 C L D 463

[Lahore]

Before Mian Nazir Akhtar and Maulvi Anwarul Haq, JJ

Chaudhry ABDUL MAJID‑‑‑Appellant

Versus

SADAQAT SAEED MALIK and 3 others ‑‑‑Respondents

Regular First Appeal No. 158 of 1990, decided on 19th November, 2001.

(a) Civil Procedure Code (V of 1908)‑

‑‑‑‑O.XXII, R.4(3)(4) & S‑96 ‑‑‑ Appeal ‑‑‑ Death of one of the respondents‑‑‑No list of legal representatives was filed by the deceased respondent during the trial and the counsel expressed his difficulty in pursuing further with the case‑‑‑Validity‑‑‑High Court, in view of amendment of O.XXII, R.4, C.P.C. effected by Law Reforms Ordinance, 1972, opted to proceed with hearing of the appeal.

(b) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑S.8(3)‑‑‑Civil Procedure Code (V of 1908), O.XXI‑‑‑Execution Of decree‑‑‑Procedure to be adopted by Banking Court ‑‑‑Principles‑‑Once the Banking Court had opted to execute decree in the manner prescribed in Civil Procedure Code, 1908, more particularly in accordance with the provisions of O.XXI, C.P.C. thereof, the discretion vested in the Banking Court by virtue of S.8(3) of the Banking Companies (Recovery of Loans) Ordinance, 1979, to adopt any mode or procedure for execution of its decree stood exhausted.

Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512 ref, (c) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑Ss. 6(4) & 8(3)‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr. 62 & 103‑‑‑Execution of decree‑‑‑Objection to attachment and sale of mortgaged property‑‑‑Jurisdiction of Banking Court ‑‑‑Scope‑‑Attachment and sale of the property in execution of decree was a matter which squarely fell within the exclusive jurisdiction of Banking Court vested in it by S.6(4) of the Banking Companies (Recovery of Loans) Ordinance, 1979, and jurisdiction of any other Court in such matters was completely barred.

(d) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑S.6(4)‑‑‑Civil Procedure Code (V of 1908), S.96 & O.XXI, Rr. 62, 103‑‑‑Specific Relief Act (I of 1877), S.12‑‑‑Specific performance of agreement to sell‑‑‑Property auctioned in execution proceedings‑‑?-Suit property was auctioned by Banking Court in execution proceedings, sale was confirmed and sale certificate was ordered to be issued‑‑‑Plaintiff alleged that agreement to sell regarding suit property was executed in his favour by the owner for valuable consideration‑‑‑Trial Court in view of the bar contained in O.XXI, Rr.62 & 103, C.P.C. rejected the plaint-‑‑Plea raised by the plaintiff was that the sale in favour of the auction‑purchaser pursuant to proceedings for the execution of decree was ineffective upon his rights‑‑‑Validity‑‑‑Plaint in the present case was barred under S.6(4) of the Banking Companies (Recovery of Loans) Ordinance, 1979, and also on principles underlying O.XXI, 8.103, C.P.C.‑‑‑Rejection of the plaint was maintained by High Court in circumstances.

Mohiuddin Molla v. The Province of East Pakistan and others PLD 1962 SC 119 distinguished.

Fazla v. Mehr Din and 2 others 1997 SCMR 837; Kishwar Jehan and 2 others v. The Muslim Commercial Bank Ltd. 1988 MLD 596; Mst. Yasmeen Nighat and others v. National Bank of Pakistan and others PLD 1988 SC 391; Messrs Sindh Engineering (Pvt.) Ltd. v. Oits Elevator Company and 3 others 2000 CLC 1524; Khawaja Ghulam Qadir v. Messrs Regent Properties Ltd. and 5 others 1997 MLD 646; Mst. Khurshid Begum and others v. Mst. Ghulam Kubra and others 1982 SCMR 90; Sh. Ghulam Nabi and others v. Ejaz Ghani and others 1982 SCMR 650 and Mahmood Ahmad v. Muhammad Shafi and 3 others 1981 CLC 389 ref.

Mian Nisar Ahmad for Appellant.

Khalid Salim for Respondent No. 2.

Syed Zamir Hussain for Respondent No.4, Date of hearing: 5th July, 2001.

2002 C L D 490

[Lahore]

Before Jawad S. Khawaja and Muhammad Sair Ali, JJ

TAHIR ZAHOOR MIAN‑‑‑Appellant

Versus

HABIB BANK LIMITED, TIMBER MARKET BRANCH, LAHORE through Manager and 3 others‑‑‑Respondents

E.F.A. No. 733 of 2001, decided on 6th December, 2001.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 19 & 22‑‑‑Civil Procedure Code (V of 1908), O.XXI, R.58‑‑­Claim to property attached in execution of decree ‑‑‑Title in such property came to vest in appellant on 12‑3‑2001 by virtue of Hibba Nama" and relinquishment deed‑‑‑Attachment of such property took place on 5‑5‑2001‑‑‑Validity‑‑‑Appellate Court: while relying on the case titled Naseer Ahmed and another v. Asghar Ali (1992 SCMR 2300) set aside such attachment order with observations that respondent‑Bank would be at liberty to invoke other remedies available to it under law, if it was of the view that alienations comprised in "Hibba Nama" and relinquishment deed had been effected with the object of avoiding creditors such as the respondent‑Bank.

Naseer Ahmad and others v. Asghar Ali 1992 SCMR 2300 ref.

Muhammad Azeem Malik for Appellant.

Abdul Hameed Butt for Respondent No. 1.

2002 C L D 491

[Lahore]

Before Jawad S. Khawaja and Muhammad Sair Ali, JJ

AQEEL AHMED alias AQEEL AMJAD‑‑‑Appellant

Versus

CITIBANK N.A., FAISALABAD through General‑Attorney ‑‑‑Respondent

First Appeal from Order No. 84 of 1999, heard on 12th December, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)--‑

‑‑‑‑Ss. 12 & 21‑‑‑Ex parte decree, setting aside of‑‑‑Appellant in his application contended that his address given in the plaint was incorrect‑‑‑Banking Court dismissed the application‑‑­Validity‑‑‑Address given in the plaint was the same, which appellant had himself given in the agreement entered by him with respondent‑Bank and had not denied execution thereof‑‑­Banking Court had rightly dismissed such application‑‑‑High Court dismissed the appeal in circumstances.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 18 & 21‑‑‑Execution of decree‑‑‑Appellant did not press objection petition filed to assail auction of property‑‑‑Executing Court confirmed the auction in favour of auction‑purchaser‑‑‑Legal right in auctioned property had become duly vested in the auction‑purchaser‑‑‑Such auction could not be allowed to be challenged at such a late stage before the Appellate Court.

Khashnood Akhtar Raja for Appellant.

Shahid Ikram Siddiqui, Raja Shaukat Ali Khan and Mian Saeed Ullah Auction‑Purchaser for Respondent.

Date of hearing: 12th December, 2001.

2002 C L D 493

[Lahore]

Before Naseem Sikandar and Muhammad Saeed Akhtar, JJ

MUHAMMAD ABID ALI ‑‑‑Appellant

Versus

CITIBANK N.A. through its Attorney Manager ‑‑‑Respondent

Regular First Appeal No. 341 of 2001, heard on 29th November, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 15, 18 & 21‑‑‑Decree for recovery of loan amount‑‑­Contention of appellant was that claim of interest was unjustified as statement of accounts did, not reflect the payments made by appellant to Bank from time to time‑‑‑Validity‑‑‑Appellant could not controvert the findings of Banking Court that statement of accounts was prepared in accordance with law and did not contain any exaggerated amount‑‑‑Mere factum of alleged payments by appellant to Bank from whom running finance facility had been availed, could hardly be a good ground for interference by High Court in first appeal‑‑‑Executing Court could effectively look into such question during execution proceedings‑‑­High Court dismissed the appeal in limine.

Dr. Syed Shoukat Hussain for Petitioner.

Shahid Ikram Siddiqui for Respondent.

Date of hearing: 29th November, 2001.

2002 C L D 495

[Lahore]

Before Amir Alam Khan, Syed Jamshed Ali and Muhammad Sair Ali, JJ

Raja LAL MIAN‑‑‑Petitioner

Versus

STATE BANK OF PAKISTAN and others‑‑‑Respondents

Writ Petitions Nos. 17482, 20746 and 22700 of 1998, decided on 20th December, 2001.

(a) Foreign Exchange (Temporary Restrictions) Act (IV of 1998)‑‑‑

‑‑‑‑S.2‑‑‑Protection of Economic Reforms Act ()W of 1992), Ss.5(4) & 10‑‑‑State Bank of Pakistan Circular No. 17, dated 6‑6‑1998‑‑­State Bank of Pakistan Circular No. 23, dated 2‑7‑1998‑‑­Constitution of Pakistan (1973), Art. l99‑‑‑Constitutional petition‑‑­Maintainability‑‑‑Petitioner availed finance facility from Bank against Foreign Currency Accounts‑‑‑Petitioner defaulted in payment of amount due, on which Bank adjusted his liability from such accounts‑‑‑Contention of petitioner was that within the terms of agreements, Bank could raise a demand for settlement of outstanding liability, but could not proceed to liquidate his Foreign Currency Accounts‑‑‑Validity‑‑‑Petitioner could not withdraw foreign currency from his accounts without settling the liabilities of Bank not only because of restriction placed on such withdrawal under S.2 of Foreign Exchange (Temporary Restrictions) Act, 1998, but the same had been collateralised as security for the finance obtained by him‑‑‑Contract executed between the parties was to prevail in all circumstances‑‑‑Bank had authority to make such adjustments within the terms of agreement and security documents‑‑‑Protection available to Foreign Currency Accounts under Economic Reforms Act, 1992 could, not cancel or abolish the agreements between parties‑‑‑No writ could be issued to Bank for breach of the terms of agreements or security documents as they were not performing function in connection with affairs of Federation or Province‑‑­Constitutional petition was dismissed in circumstances.

Shaukat Ali Mian and another v. The Federation of Pakistan 1999 CLC 607 and Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026 ref.

(b) Foreign Exchange (Temporary Restrictions) Act (IV of 1998)‑‑

‑‑‑‑S.2‑‑‑Protection of Economic Reforms Act (XII of 1992), Ss.5(4)‑‑‑Finance facility was availed against Foreign Currency Accounts‑‑‑Bank adjusted liability of petitioner from his such accounts‑‑‑Contention of petitioner was that Bank should have allowed him in presence of foreign currency dealer to withdraw foreign currency for encashing the same from open market and then liquidating his liability‑‑‑Validity‑‑‑Such Foreign Currency Accounts being charged and encumbered, Bank was justified in not allowing withdrawal therefrom under security arrangement between parties‑‑‑Such facility if allowed by Bank to petitioner, then such private accommodation could not be termed as a legal arrangement or contract between parties to vest petitioner with a right to seek enforcement thereof‑‑‑Such a right would be in conflict with basic concept of pledge, special lien, charge, encumbrance or security collateralisation.

Dr. A. Basit for Petitioner.

Mirza Muhammad Ahmad, Muhammad Raza Farooq Muhammad Khalid Mahmood Khan and Sher Zaman Khan, A.A.G. for the Respondents.

Date of hearing: 11th October; 14th, 15th, 19th and 20th November, 2001.

2002 C L D 509

[Lahore]

Before Jawad S. Khawaja and Muhammad Sair Ali, JJ

Mst. PARVEEN AMIR‑‑‑Appellant

Versus

NATIONAL BANK OF PAKISTAN and 3 others‑‑‑Respondents

Regular First Appeal No. 77 of 1998, heard on 27th November, 2001.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑‑

‑‑‑‑Ss. 6 & 9‑‑‑Contract Act (IX of 1872), Ss. 62, 128, 129 & 134‑‑­Decree for recovery of money‑‑‑Liability of guarantor—Appellant guaranteed the liabilities of respondent‑Corporation arising out of agreement, dated 5‑6‑1989, whereunder finance facility had to expire on 30‑6‑1990‑‑‑Such liabilities were fully repaid and adjusted on 16‑9‑1990‑‑‑Respondent‑Bank then allowed fresh finance to the Corporation on 16‑9‑1990‑‑‑Appellant was sued as guarantor for such new/fresh liability‑‑‑Banking Tribunal decreed the claim of the Bank‑‑‑Validity‑‑‑Guarantor could only be burdened to the extent and in accordance with the terms of guarantee executed by him‑‑‑Finance facility under agreement dated 5‑6‑1989 expired on 30‑6‑1990, whereunder entire ability of the Corporation stood cleared as was apparent from settlement of accounts‑‑‑Neither to new facility allowed on 16‑9‑1990 nor to variation of terms of agreement, dated 5‑6‑1989, appellant had given her concurrence nor fresh guarantee had been obtained from her for such new/ renewed facility‑‑ Appellant was not liable for any, amount advanced to the Corporation by way of fresh facility or renewal of earlier facility‑‑‑Banking Court was not justified in passing decree against appellant in favour of the Bank in circumstances.

(b) Contract Act (IX of 1872)‑‑‑

‑‑‑‑Ss. 126 & 128‑‑‑Liability of guarantor‑‑‑Extent‑‑‑Guarantor could only be burdened to the extent and in accordance with the terns of guarantee executed by him.

Syed Najif Hussain Shah for Appellant.

Ali Ahmad Awan for Respondent.

Date of hearing: 27th November, 2001.

2002 C L D 515

[Lahore]

Before Jawad S. Khawaja, J

NISHAT (CHUNIAN) LIMITED through its Assistant Manager Commercial and others‑‑‑Petitioners

Versus

FEDERATION OF PAKISTAN‑‑‑Respondent

Writ Petition No. 20903 of 2001, heard on 12th December, 2001.

(a) Pakistan Merchant Shipping Ordinance (LII of 2001)‑‑‑

‑‑‑‑S.81‑‑‑Scope and application‑‑‑Reference in S.81 of the Ordinance to liner conference agreements could not be taken to mean that international shipping lines were subject to such provisions‑‑‑Shipping operators engaged in coastal shipping could enter into liner conference agreements, whereas International Shipping Operators working within framework of liner conference could become subject to S.81 of the Ordinance on deciding to engage in coastal shipping.

(b) Pakistan Merchant Shipping Ordinance (LII of 2001)‑‑‑

‑‑‑‑Ss. 81, 76 & 77‑‑‑Interpretation‑‑‑Inclusion of Ss.76 & 77 in Part III of the Merchants Shipping Ordinance, 2001 would not have any bearing on the interpretation of S.81 of the said Ordinance, which had to be construed on the basis of its own wording.

(c) Pakistan Merchant Shipping Ordinance (LII of 2001)‑‑‑

‑‑‑‑Ss. 81, 82 & 83‑‑‑Applicability‑‑‑Word "coastal" in relation to the word "shipping" had been used in S.81 of the Ordinance as an adjective to define and qualify the word "shipping"‑‑‑Term "coastal shipping" as used in S.81 of the Ordinance only encompassed shipping between Pakistani Ports, which was intended to be covered by such provisions‑‑‑Had the word "coastal" not been used by Legislature, provisions of S.81 and as a consequence those of Ss. 82 and 83 of the Ordinance would have been applicable to shipping of all types unqualified by any limitations‑‑‑Legislature had consciously used the word "coastal" to refer to the type of shipping, which was intended to be regulated in terms of Ss. 81, 82 and 83 of the Ordinance‑‑‑Such provisions would not apply to international liner conference agreement‑‑‑Federal Government could not require any such shipping lines to provide to it copy of their line conference agreements nor could Federal Government be directed to act under Ss. 82 and 83 of the Ordinance in respect of any liner conference agreement as long as such lines did not engage in coastal shipping.

(d) Pakistan Merchant Slipping Ordinance (LII of 2001)‑‑‑

‑‑‑‑S.81‑‑Applicability‑‑‑Term "Coastal shipping"‑‑‑Meaning‑‑‑Such term could only mean such shipping as was confined to the coastal sea and the ports along the coast of Pakistan, as opposed to international shipping and home trade shipping‑‑ Any other meaning of the term would be wholly inconsistent with natural use of the English language in the given context of the Ordinance.

(e) Interpretation of statutes‑‑‑

‑‑‑‑ Provisions of a statute have to be construed without regard to its chapter headings or section headings.

(f) Interpretation of statutes‑‑‑

‑‑‑‑ Redundancy could not be ascribed to the wording of an enactment unless there was a compelling necessity for doing so.

(g) Words and phrases‑‑‑

‑‑‑‑"Coastal"‑‑‑Meaning‑‑‑Word "coastal" is derived from the word "coast", and as commonly understood, means a thing, which relates to or is connected to the coast.

Salman Akram Raja and Imtiaz Rasheed Siddiqui for Petitioners.

Makhdoom Ali Khan Attorney‑General for Pakistan assisted by Kh. Saeed‑uz‑Zafar, D.A.G. for Respondent No. 1.

Ali Zafar Syed and Haider Zaman Qureshi for Respondents Nos. 2, 7, 8, 15 and 18.

Sajjad Zahid and Asad Munir for Respondent No.4.

Moeen Qureshi for Respondents Nos; 3, 5, 6, 9, 10, 17 and 19.

Muhammad Naeem and M.R. Shaikh for Respondents Nos. 11, 13 and 16.

Date of hearing: 12th December, 2001.

2002 C L D 524

[Lahore]

Before Jawad S. Khawaja and Muhammad Sair Ali, JJ

HABIB CREDIT & EXCHANGE BANK LIMITED, L.D.A. PLAZA, LAHORE‑‑‑Appellant

Versus

EMIRATES BANK INTERNATIONAL LIMITED through Attorney and others‑‑‑Respondents

Regular First Appeal No. 75 of 1996, heard on 28th November 2001.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss. 6 & 9‑‑‑Decree for recovery of money‑‑-Alleged guarantor Bank denied its liability under guarantee contending that it had not executed the same in favour of creditor Bank to secure the liabilities of the borrowers‑‑‑Validity‑‑‑Creditor Bank would be entitled to enforce the guarantee against guarantor Bank, if the same was executed by said Bank, otherwise same could not be enforced against the alleged guarantor Bank‑‑‑Creditor Bank could not show instrument of guarantee on the basis of which it had filed claim against the alleged guarantor Bank, but instead produced some letters having no relevance with the case‑‑‑Such letters could not be used against the alleged guarantor Bank on any legal principle‑‑‑Guarantor Bank, in circumstances, was not liable to creditor Bank under any letter of guarantee‑‑‑High Court allowed the appeal and set aside impugned judgment and decree against the alleged guarantor.

Muhammad Khalid Mahmood Khan for Appellant.

Malik M. Rashid Awan for Respondent No. 1.

Date of hearing: 28th November, 2001.

2002 C L D 557

[Lahore]

Before Mian Hamid Farooq, J

BOLAN BANK LIMITED through Attorneys ‑‑‑Plaintiff

Versus

BAIG TEXTILE MILLS (PVT.) LIMITED through

Chief Executive and 6 others‑‑‑Defendants

C.O.S. No.78 of 2000, decided on 30th January, 2002.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑-

‑‑‑S. 10‑‑‑Contract Act (IX of 1872), S.126‑‑‑Application for leave to defend the suit‑‑‑Bank filed a suit for recovery of money against the defendants as guarantors‑‑‑Plea of defendants was that they never executed personal guarantees; and that one of the defendants, after ousting them from management of the company, had procured the finance by forging documents‑‑­ validity‑‑‑Such defendants had vaguely denied execution of guarantees‑‑‑Record showed that at the relevant time, they were Directors of defendant‑Company and in such capacity had executed letters of guarantees and stood guarantors‑‑‑Nothing was brought on record to show that either the guarantees were forged by Bank or such defendants were forced by the other defendant or the Bank to execute guarantees‑‑‑Plea of defendants that documents had been forged by one of the defendants had no bearing on the case, because it had not been alleged that Bank had forged the same‑‑‑Dispute about alleged ouster from management of company and grabbing of properties by the defendant was between the private persons, which was not the subject‑matter of present proceedings, and Banking Court was not the forum for determination of such, dispute inter se the defendants ‑‑‑Said defendants had executed guarantees, and had denied neither statement of accounts nor availing of financial facilities by defendants‑Company‑‑‑Mere vague denial of execution of documents would not absolve them from discharging the liabilities incurred by them through execution of personal guarantees and other documents‑‑‑Application for leave to defend the suit being devoid of force was dismissed.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑S. 10‑‑‑Contract Act (IX of 1872), S.126‑‑‑Bankers' Books Evidence Act (XVIII of 1894), S.4‑‑‑Application for leave to defend the suit‑‑‑Bank filed suit for recovery of money against defendant‑Company and its Directors/mortgagors/guarantors‑‑­ Defendants in applications for leave to defend did not deny sanctioning of financial facilities and availing the same nor their signatures on documents annexed with the plaint, but asserted that all such documents were not meant to be used in the financial facilities and in he manner in which they had been used by Bank‑‑‑Validity‑‑‑Such assertion on the face of it was unbelievable and did not appeal to reason; ‑ more so when defendants had not been able to show as to what were the alleged transactions, wherein such documents were meant to be used, and which were those financial facilities regarding which they had delivered those documents to the Bank‑‑‑Except financial facilities subject‑matter of the suit, no other accounts/facilities/transactions existed between the parties, in respect which it could be said that these documents were delivered to the Bank‑‑Defendants, apart from minor discrepancies, could not point out any legal infirmity in the statement of accounts, so as to disentitle Bank from claiming suit amount Statement of accounts had been verified/certified by Bank in accordance with the provisions of Bankers' Books Evidence Act, 1891 and presumption of truth was attached to such entries maintained by Bank in normal course of business, and there was no rebuttal thereof‑‑‑Defendants did not show either in their leave application or during arguments that how much account of finance was availed by them; how much amount had been repaid; what amount was still payable by them; and which amounts were disputed‑‑‑Such omission on their part was not only contrary to provisions of S.10(4) of the Ordinance, but showed the hollowness of their case‑‑‑No unauthorized entry debited in the accounts of defendants were found in the statement of accounts‑‑‑Bank had not charged any penal interest or liquidated damages in any statement of accounts, which would show veracity thereof and bona fides of the Bank‑‑­Director/guarantors/mortgagors (i.e. defendants other than the company) had signed and executed documents and had undertaken as per terms of personal guarantees to liquidate outstanding amount, in case the company principal‑debtor failed to liquidate the same‑‑‑Defendants in view of their having executed personal guarantees could not shirk from liquidating their liabilities and they were jointly and severally liable to liquidate the liabilities of company under the provisions of Contract Act, 1872‑‑‑Defendants had failed to raise any substantial question of law and facts to be tried by Court necessitating recording of evidence‑‑‑Application for leave to defend the suit were dismissed, resultantly the allegations made in the plaint would be deemed to be admitted‑‑‑Defendants had not denied their signatures on all the documents filed by Bank in support of its claim, meaning thereby that execution of such documents would be deemed to have been admitted by them‑‑­Bank was not entitled to grant of liquidated damages as per the principle laid down in case of Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments etc. 2001 MLD 1955‑‑­Suit was decreed against the defendants jointly and severally with costs to be determined under S.3(2) of the Ordinance.

Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550 rel.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑--

‑‑‑‑S. 10‑‑‑Civil Procedure Code (V of 1908), O. XXX, R.1‑‑­Companies Ordinance (XLVII of 1984), S.196(1)‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.10‑‑‑Application by company for leave to defend the suit‑‑‑Maintainability‑‑‑Neither any resolution of the company nor authorization was filed with original as well as amended leave application‑‑‑Validity‑‑‑Non‑placing on record of any resolution or authorization would go to show that before filing either original leave application or amended leave application no resolution had been passed by Board of Directors of defendant‑Company authorizing its Director either to file such application or defend the Company ‑‑‑Such a resolution was necessary under law before initiating or defending any proceedings by or against a company/corporate body‑‑‑Original application as well as amended application filed unauthorisedly did not deserve any consideration as on legal plane, there was no application for leave to defend the suit on behalf of the Company, which could be said to be pending before the Court.

Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550; Abubakar Saley Mayet v. Abbot Laboratories and another 1987 CLC 367; Bankers Equity Ltd. through Attorney and 5 others v. Sunflo CIT‑Russ Ltd. (formerly known as Sunflo Juices Ltd.) through Managing Director PLD 1999 Lah.450; Government of Pakistan v. Premier Sugar Mills and others PLD 1991 Lah. 381 and Messrs Standard Hotels (Private) Ltd. v. Messrs Rio Centre and others 1994 CLC 2413 ref.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑--

‑‑‑‑S. 10(3)(4)(5)(6)(12)‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.10‑‑­ Amended application for leave to defend the suit‑‑‑During pendency of original application for leave to defend the suit, Financial Institutions (Recovery of Finances) Ordinance, 2001, came into force‑‑‑Defendants had, thus, to file amended application by virtue of S.10(12) of the Financial Institution (Recovery of Finances) Ordinance, 2001 wherein they failed to give the amount of finance availed by them; the date of payment; amount of finance and other amount relating to finance payable by them to financial institution; the amount of finance and other amount, which they disputed as payable to financial institution‑‑­ Validity‑‑‑Defendants had failed to file amended application within the parameters of S.10(12) of the Ordinance, 2001 and had not complied with the requirements of S.10(3), (4) & (5) of the Ordinance, 2001 nor had shown any sufficient cause for their inability to comply with such requirements‑‑‑Provisions of S.10(12) of the Ordinance, 2001 was mandatory in nature, as its non‑compliance entailed penal consequences as provided under S.10(6) of the Ordinance,‑ 2001‑‑‑Presumption, thus, would be that no application for grant of leave to defend the suit was deemed to be pending‑‑‑Such amended application could not be considered under law as the same deserved summary rejection in pursuance of S.10(6) of the Ordinance, 2001‑‑­Amended leave application was rejected in circumstances.

(e) Interpretation of statutes‑-----

‑‑‑‑ Mandatory or directory provision‑‑Test ‑‑Provision of law couched with penal consequences would be considered as mandatory‑‑‑Where no penal consequences entailed to non compliance of a provision of law, then such provision of law would be taken as directory.

M. Naeem Sahgal for Plaintiff.

Zahid Malik for Defendants Nos. l to 4 and 7.

Saif‑ud‑Din Chughtai for Defendant No.5.

Faisal Hanif for Defendant No.6.

Dates of hearing: 18th and 23rd January, 2002.

2002 C L D 575

[Lahore]

Before Naseem Sikandar, J

IFTIKHAR HUSSAIN and others‑‑‑Petitioners

Versus

DADEX ENTERNIT and others‑‑‑Respondents

C.O. No. 16 of 1999, decided on 30th January, 2002.

Companies Ordinance (XLVII of 1984)------

‑‑‑‑Ss. 7(1)(2), 305 & 307‑‑‑Winding up of company‑‑‑Bifurcation of prayer clause and transferring the same to another Court‑‑­Application for‑‑‑Maintainability‑‑‑Jurisdiction of Court to entertain such petition at Lahore was objected to by the Company on the ground that its registered office was at Karachi‑‑‑Petitioner did not deny claim of company qua the location of its registered office, but contended that his prayer with regard to products being sold in Punjab be retained, while rest of his claim be bifurcated and referred to Sindh High Court‑­‑Validity‑‑‑High Court hawing jurisdiction in the place at which registered office of the Company was situated, could entertain any matter under the Companies Ordinance, 1984‑‑‑Neither prayer clause admitted of any such bifurcation as prayed for nor High Court could legally bifurcate any matter and refer a part of the same to another Court of equal jurisdiction Le. Sindh High Court‑‑‑Winding up petition was returned to the petitioner for its filing before Sindh High Court, if so advised.

Muzaffar Ali Awan v. Messrs Pioneer Alliance (Pvt.) Limited PLD 1989 Lah. 106 and Muhammad Usman v. M/s. The Taj Company Limited 1992 CLC 1737 rel.

Muhammad Javaid Iqbal Jaffari for Petitioners.

Jawwad Hassan for Respondent No. 1.

2002 C L D 577

[Lahore]

Before Mian Hamid Farooq, J

AHMAD MURAD MALIK ‑‑‑Petitioner

Versus

PRESIDING OFFICER, BANKING COURT‑‑‑Respondent

Writ Petition No.12686 of 2001, decided on 13th December, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑---

‑‑‑‑Preamble‑‑‑Provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, being a special statute, would have overriding effect upon the provisions pf general law.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 3, 4 & 7(1)(a)‑‑‑Civil Procedure Code (V of 1908), S.141‑‑­Provisions of C.P.C.‑‑‑Extent of applicability‑‑‑Banking Court established under S.4 of .the Banking Companies (Recovery of Loans, Advances, Credits and Finances Act, 1997) was bound by the procedure provided under the Act and. could not deviate there from while adjudicating the suit filed before it by a customer or a Banking Company‑‑‑Provisions of C.P.C. would not be attracted, where in a given circumstance, special provisions of Act were available‑‑‑If the Act did not provide any remedy or make any headway, in such a case, the provisions of C.P.C. could be made applicable‑‑‑Banking Court could exercise the powers vested in a Civil Court under C.P.C., but it would not mean that special mandatory provisions of the Act would give way to the provisions of C.P.C.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑----

‑‑‑‑Ss. 4, 9(3)(4) & 10 ‑‑‑Civil Procedure Code (V of 1908), S.141‑‑­Constitution of Pakistan (1973), Art 199‑‑‑Constitutional petition‑‑­ Suit against Bank‑‑‑Banking Court, after presentation of plaint, issued notice to defendant‑Bank and upon its service directed it to file statement of accounts, which was accordingly filed‑‑­ Banking Court heard arguments of parties and fixed the case for order‑‑‑Contention of the plaintiff was that procedure adopted by Banking Court was violative of S.9(3)(4) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Validity‑‑‑Procedure for service of summons and deciding the suit as prescribed under S.9 of the said Act was mandatory in nature‑‑‑Banking Court had not adopted such procedure, but had evolved in his own wisdom a procedure alien to the provisions of the act and even to the provisions of C.P.C. Banking court established under S.4 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was bound by the procedure provided under the Act and could not deviate therefrom while adjudicating the suit filed before it by a customer or a Banking Company‑‑‑High Court accepted Constitutional petition and declared the entire proceedings. undertaken by Banking Court in the suit to be illegal and without lawful authority.

(d) Civil Procedure Code (V of 1908)‑‑---

‑‑‑S. 141‑‑‑Provisions of C.P.C. could, be made applicable in case, where special law did not provide the remedy.

Dr. Hameed Ahmad Ayyaz for Petitioner.

Mian Asmat Ullah for Respondent No‑2.

2002 C L D 591

[Lahore]

Before Naseem Sikandar and Muhammad Sair Ali, AJ

Messrs TAJ GHEE AND GENERAL MILLS (PVT.) through Rana Ijaz Ahmed, Chief Executive‑‑‑Appellant

Versus

NATIONAL BANK OF PAKISTAN and 2 others‑‑‑Respondents

First Appeal from Order No. 222 of 2001, decided on 16th January, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑-

‑‑‑‑S.22‑‑‑Non‑deposit of amount with respondent as per terms of Appellate Court's order recorded on appellant's offer‑‑‑‑Appellant ‑sought extension of time‑‑‑Mere fact that an application for extension had been made would not bar giving effect to such order, which was recorded on the offer of appellant and was self­ executory in nature‑‑‑Appeal stood dismissed as per terms of such order.

Syed Zaheer Sagir for Appellant.

Umar Aziz for CIRC.

Mushtaq Ahmed for Respondent No. 1.

2002 C L D 592

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mst. SAJIDA SULTANA and 2 others‑‑‑Appellants

Versus

AGRICULTURAL DEVELOPMENT BANK OF

PAKISTAN through Qayyum Javed Khan, Manager, Agricultural Development Bank of Pakistan, Model Branch, Lahore‑‑‑Respondent

First Appeal from Order No.127 of 2001, heard on 14th January, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑-----

‑‑‑‑Ss. 18 & 21‑‑‑Application for return of title documents after satisfaction of decree‑ ‑‑Banking Court dismissed such application on the ground that respondent‑Bank hard two other suits pending against appellants, thus, Bank was entitled to retain the title documents on account of general lien available with Bank‑‑­Validity‑‑‑General lien under law was available to a banking company only in respect of goods‑‑‑Bank was asserting an interest over title deeds, which were not goods by definition‑‑­High Court set aside impugned order, and directed the Bank to hand over the original title deeds to appellants within specified time subject to any other order, which might be passed by a competent Court.

Muhammad Yaqoob Khan for Appellant.

Qauser Javed Mian for Respondent.

Date of hearing: 14th January, 2002.

2002 C L D 593

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mrs. RAANA AKBAR‑ ‑‑Appellant

Versus

BANK OF PUNJAB through Mr. Tariq Hameed, General Manager, Finance, its duly constituted

Attorney and 6 others‑‑‑Respondents

First Appeal from Order No.313 of 2001, heard on 21st January, 2002.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑--

‑‑‑‑S.11‑‑‑Sale of property in execution of decree‑‑‑Judgment­debtor substituted his mortgaged property known as A with property known as B‑‑‑Objection of judgment‑debtor was that property known as C could not be sold before sale of property known as A‑‑‑Validity‑‑‑Bank had already sold the substituted property known as B in execution of decree thus property known as C could neither be released from attachment nor exempted from sale.

Iftikhar Ullah Malik for Appellant.

Ghulam Haider Algazali for Respondent No. 1.

Date of hearing: 21st January, 2002.

2002 C L D 595

[Lahore]

Before Jawwad S. Khawaja, J

BANK OF PUNJAB through its Managing Director, 7‑Egerton Road, Lahore and another‑‑‑Petitioners

Versus

MUHAMMAD PERVEZ MALIK and 2 others‑‑‑Respondents

Writ Petition No. 19694 of 2001, decided on ,11th January; 2002.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑--

‑‑‑‑S.7‑‑‑Constitution of Pakistan (1973) Art.199‑‑‑Constitutional petition‑‑‑Summoning of plaintiffs' witness for further cross­ examination‑‑‑Plaintiffs' allegation in the plaint was that defendant‑Bank had obtained their signatures on blank documents ‑‑‑Plaintiffs produced an employee of Bank, who produced on record eight documents executed by them in respect of facility availed from Bank Both plaintiff and Bank cross­ examined the witness‑‑‑Plaintiffs appeared as witness and after acknowledging his signatures on such documents deposed that those were signed in blank‑Bank employee being a witness to such documents, Bank filed application for summoning him for cross‑examination in order to ascertain, whether all such documents were duly filed in or were blank when signed‑‑­ Banking Court rejected the application‑‑‑Validity‑‑‑Only suggestion put to the witness was in respect of memorandum of deposit of title deed, which he denied by deposing that the same was incomplete when signatures were obtained on it‑‑‑No such suggestion was put in respect of the other exhibited document thus, there was no occasion for the Bank to put any suggestion to the said witness on the issue as to whether or not all exhibited documents were incomplete‑‑‑Occasion for such question had arisen on a subsequent date, when the plaintiff testified that all exhibited documents were signed by him in blank‑‑‑In sequence of such events, it was the night of Bank to summon the other person being a witness to such documents to prove that those had not been signed in blank‑‑‑Bank was not debarred from producing the said person as their witness even though he had earlier appeared‑‑‑Bank would be entitled to produce their said employee on next date of hearing‑‑‑Constitutional petition was disposed of with such direction.

Ahsan Ilahi v. Messrs Habib Bank Ltd. 1981 SCMR 336 rel.

(b) Pleadings‑‑‑

‑‑‑‑ Plaint‑ by itself did not prove the assertions made therein, rather the contents thereof had to be proved through testimony given on oath subject to cross‑examination by other side.

(c) Qanun‑e‑Shahadat (10 of 1984)‑‑‑-

‑‑‑ Art. 119‑‑‑Burden of proof alleged that defendants had obtained their signatures on blank documents ‑‑‑ Plaintiffs had to prove such assertion through evidence.

Ghulam Haider Alghazali for Petitioners.

Syed Hamid Ali Shah for Respondents.

2002 C L D 598

[Lahore]

Before Ch. Ijaz Ahmad and Saqib Nisar, JJ

Messrs ROSE INCORPORATE, Bajwa Manzil

and 4 others‑‑‑Appellants

Versus

Messrs BOLAN BANK LIMITED through

Muhammad Aslam Chaudhry, Manager

and Muhammad Yousaf Qureshi, Officer Joint

Attorneys of the Plaintiff‑Bank‑‑‑Respondent

Regular First Appeal No.521 and Civil Miscellaneous Nos.3‑C and 4‑C of 1999, decided on 7th January 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑----

‑‑‑‑Ss.10, 15 & 21‑‑‑Application for leave to appear and defend the suit‑‑Suit was decreed after dismissal of such application for non‑prosecution ‑‑‑Contention of defendant was that his counsel was present in the Court in early hours of the day, but subsequently did not enter appearance: and that Banking Court was bound to decide such application on merits instead of dismissing the same for non‑prosecution ‑‑‑Validity‑‑‑Impugned judgment was not in consonance with law ‑‑‑Plaintiff had not been granted fair opportunity to defend the case properly‑‑‑High Court set aside impugned judgment and decree holding that application filed by defendants would be deemed to be pending adjudication before Banking Court.

Muhammad Haleem and others v. H.H. Muhammad Naim and others PLD 1969 SC 270 rel.

Zafar Iqbal Chohan for Appellant.

Bashir Ahmad for Respondents.

Muhammad Iqbal Khichi for Applicant (in C.M. Nos.3 and 4 of 1999).

2002 C L D 600

[Lahore]

Before Jawwad S. Khawaja and

Muhammad Sair Ali, JJ

Messrs MARJAN FASHIONS through Waheed

Ahmad Khan their Sole Proprietor

and others‑‑‑Appellants

Versus

PLATINUM COMMERCIAL BANK LTD. through

Mir Aziz A. Malik, Manager, its duly constituted

Attorney‑‑‑Respondent

Regular First Appeal No.515 of 2001, heard on 14th January, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Leave to appear and defend suit‑‑‑Defendants' plea raised in their petition for leave to defend was that all the documents appended with plaint i.e. Finance Agreement, Facility Letter, Demand Promissory Note, Letter of Continuity and Memorandum of Deposit of title deed, could not have been signed on the same date‑‑‑Validity‑‑‑Such defense was not plausible as there was no reason as to why such documents could not have been signed on the same date‑‑‑Defendants had to show a serious and bona fide defense before they could be allowed leave to appear and defend the suit, but they had failed to do so‑‑--Leave to appear and defend was refused in circumstances.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXXVII, R.3‑‑‑Leave to appear and defend suit‑‑‑Plaintiff upon showing a plausible defense becomes entitled to permission to defend the suit.

National Bank of Pakistan v. Messrs Elegzender & Company and 2 others PLD 1987 Lah, 290 ref.

Khan A. Hameed for Appellants:

Tariq Saleem Sheikh for Respondent.

Date of hearing: 14th January, 2002.

2002 C L D 602

[Lahore]

Before Naseem Sikandar, J

Mian KHURSHID ALAM and another‑‑‑Petitioners

Versus

SHAH ZAIG‑UR‑REHMAN ‑‑‑ Respondent

Civil Original No.65 of 1993, heard on 14th November, 2001.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 305 & 309‑‑‑Petition for winding up of company for its inability to pay its liabilities towards banks; for the reasons that its substratum had extinguished and it had failed to function and run the business and stood closed for the last so many years; and that it would be better to wind up the company as none of its shareholders was in a position to invest money to run its affairs‑‑‑Creditor Banks resisted the petition on the ground' that company owned large sums to its bankers‑‑‑Suit for recovery of money filed by creditor Bank was pending before Banking Court‑‑‑Creditor Bank had also obtained a decree against petitioners/directors from High Court at England‑‑‑Petitioners floated a company abroad and made fictitious exports to it in order to retain huge amounts of foreign exchange abroad‑‑­Petitioners had stated in their petition that most of the exports made to the company abroad proved to be total loss and funds of the company had gone down the drain‑‑---According to creditor Bank, if the veil of incorporation was lifted, then petitioners/ directors would emerge as owners and beneficiaries of both the companies sought to be wound up and the one incorporated by them abroad‑‑‑Petitioners could not rebut all such facts‑‑­Petitioners/Directors had moved the petition in order to create a legal defense against the decree already passed against the Company sought to be wound up or in the suits for recovery pending before different Courts‑‑‑Winding up of company in such circumstances would not be just and equitable‑‑‑High Court rejected the petition.

Nazir Ahmad Sheikh for Petitioners.

Asad Javed for Respondent.

Date of hearing: 14th November, 2001.

2002 C L D 605

[Lahore]

Before Maulvi Anwarul Haq and Mian Hamid Farooq, JJ

Messrs HUSSAIN PAPER AND BOARD MILLS (PVT.)

LTD. and 4 others‑‑‑---Appellants

Versus

HABIB CREDIT AND EXCHANGE

BANK LIMITED‑‑‑---Respondent

Regular First Appeal No.332 of 1997 and Civil Miscellaneous Application No. 1 of 2002 decided on 16th January, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--‑

‑‑‑‑S.22‑‑‑Court Fees Act (VII of 1870), S.13‑‑‑Withdrawal of appeal on the basis of compromise‑‑--Prayer for refund of court fee paid on memorandum of appeal‑‑‑Appeal after having been admitted for regular hearing had, not been faced for hearing and opposite party had not put in appearance‑‑‑High Court allowed the prayer.

Sh. Riaz‑ud‑Din v. Aqil‑ur‑Rehman Siddiqui PLD 1993 SC 76 rel.

Imran Aziz Awan for Appellants.

2002 C L D 606

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

MUSLIM COMMERCIAL BANK LIMITED‑--‑‑Appellant

Versus

Messrs MALIK & COMPANY through Proprietor

Man Naim Ahmad and 2 others‑‑‑Respondents

Regular First Appeal No.250 of 1994, heard on 12th November, 2001.

(a) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑S. 6--‑‑Limitation Act (1X of 1908), Art. 132, Expln. (c)‑‑‑Registration Act (XVI of 1908), S.17‑‑‑Suit for recovery of money based on Memorandums of Deposit of title deeds ‑‑‑Limitation‑‑­Plaintiff‑Bank in support of its claim produced in evidence two Demand Promissory Notes dated 23‑12‑1982 and 9‑8‑1983, and Memorandums of Deposit of title deeds‑‑‑Special Judge found such memorandums to be compulsorily registrable under Registration Act, 1908 and dismissed the suit on the ground that the same had to be filed within 3 years from date of last acknowledgement of liability‑‑‑Validity‑‑‑Such memorandums merely recorded the earlier deposit of title deeds and did not in themselves create any mortgage, thus, were not compulsorily registrable ‑‑--‑Last acknowledgement had been made by defendants on 9‑8‑1983‑‑‑Since mortgage had been duly created by defendant in favour of Bank by deposit of title deeds, period of limitation for filing of such suit was 12 years from 9‑8‑1983 and not 3 years‑‑‑Suit having been filed on 24‑8‑1993 was well within time‑‑‑High Court set aside the impugned judgment/decree and decreed the suit of Bank with costs.

(b) Transfer of Property Act (IV of 1882)‑‑--

‑‑‑‑S.58W‑‑‑Registration Act (XVI of 1908), S.17‑‑‑Mortgage by deposit of title deeds‑‑‑Memorandums of Deposit of title deeds contained the fact that prior to execution of Demand Promissory Notes, title deeds mentioned in the Schedules of memorandums had been deposited with Bank with the intention of creating an equitable mortgage in favour of Bank over the properties comprised in the title deeds‑‑‑Contention of mortgagors was that mention of sum secured together with rate of interest in such memorandums would make them mortgage deeds requiring compulsory registration under Registration Act, 1908‑‑‑Validity‑‑­Such memorandums showed that mortgage had been created prior to their execution through deposit of original title deeds‑‑­Memorandums merely recorded the earlier deposit of title deeds and did not in themselves create any mortgage in praesenti, thus, were not compulsorily registrable.

United Bank of India Ltd. v. Azirannessa Bewa alias Azizannessa Bewa PLD 1965 SC 274 ref.

Muhammad Qamar‑uz‑Zaman for Appellants.

M.A. Zafar for Respondents.

Date of hearing: 12th November, 2001.

2002 C L D 609

[Lahore]

Before Maulvi Anwarul Haq, J

PERVEZ AHMAD KHAN BURKI, ADVOCATE‑‑‑Petitioner

Versus

UNITED BANK LIMITED through Principal Officer

and General Attorney‑‑‑Respondent

Civil Revision No.750 of 1996, decided on 23rd January, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6‑‑‑Financial Institutions (Recovery Finances) Ordinance (JAW of 2001), S.7(4)(6)‑‑‑Civil Procedure Code (V of 1908), S.9 & O.VII, R.11‑‑‑Specific Relief Act (I of 1877), Ss. 42 &. 54‑‑‑Bank fled suit for recovery of money against petitioner and company before Banking Tribunal‑‑‑Petitioner thereafter filed in Civil Court suit for declaration and injunction that he never stood guarantee in the matter of loan provided by Bank to the company‑‑‑Trial Court rejected the petitioner's plaint holding that the matter was related to jurisdiction of Banking Tribunal‑---‑Appellate Court upheld such order‑‑­Validity‑‑‑Banking Tribunal no longer existed and the matters were being dealt with by Banking Courts and the law covering the jurisdiction of such Courts provided for filing of suit by company as well as the customer or borrower‑‑‑High Court disposed of revision petition with a direction that file of the case, which otherwise automatically stood transferred to Banking Court, would be sent to Banking Court, where the same would be taken up alongwith the suit fled by respondent‑Bank, and the question as to whether or not petitioner had executed a valid guarantee or had otherwise guaranteed repayment of loan, would be decided by Banking Court.

Asad Munir for Petitioner.

M. Yaqub Khan for Respondent.

2002 C L D 612

[Lahore]

Before Jawwad S. Khawaja and Muhammad Sair Ali, JJ

NAZIR COTTON MILLS LIMITED through

Chief Executive and 6 others‑ ‑‑Appellants

Versus

ISLAMIC INVESTMENT BANK LIMITED

through Messrs Saqib Ahmed Khan (Branch

Manager) and Rashid Hafeez Malik, its duly

constituted Attorneys‑‑‑Respondent

Regular First Appeal No.776 of 2001 in C.O.S. No.98 of 1999 decided on 12th December, 2001.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XX, R.7‑‑‑Decree cannot be dated prior, to date of judgment.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)

‑‑‑‑Ss.2(c), 7(6) & 22‑‑‑Pecuniary jurisdiction‑‑‑Suit for, recovery of amount less than Rs.50,000,000‑‑‑Financial Institutions (Recovery of Finances) Ordinance, 2001 came into force on 30‑8­2001‑‑‑Single Judge of High Court announced judgment in such suit on . 10‑9‑2001‑‑‑Contention of defendants was that jurisdiction to decide such suit being vested in Banking Court by virtue of S. 7(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 judgment and decree passed on 10‑9‑2001 were without jurisdiction ‑‑‑Validity‑‑‑Single Judge of High Court had passed impugned judgment and decree due to an oversight and without keeping in view the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Appellate Court set aside impugned decree being without jurisdiction with direction to send record of the case to Banking Court which was the forum having jurisdiction in the matter.

Salman Akram Raja for Appellants.

Khashnood Akhtar Raja for Respondent.

Date of hearing: 12th December, 2001.

2002 C L D 614

[Lahore]

Before Naseem Sikandar, J

RIZVI AND RIZVI, ADVOCATES through

Partner Talib H. Rizvi, Senior Advocate‑‑‑Petitioner

Versus

WAK ORIENT POWER AND LIGHT LTD. through

Chief Executive‑‑‑Respondent

Civil Original No.97 of 1997, heard on 22nd November, 2001.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.305(e)(f)(h) & 306‑‑‑Legal Practitioners (Fees) Act (XXI of 1926), S.4‑‑‑Petition for winding up of company for its failure to pay professional fee to petitioner despite notice under S.306 of the Companies Ordinance; and for the reasons that company was conceived and brought forth for unscrupulous and fraudulent activities, usurping the money of its creditors and customers; and that it was just and equitable that company should be wound up‑‑‑Validity‑‑‑Petitioner sought recovery of his professional fee in the form of a petition for winding up‑‑‑Alleged fee due could not be taken to be a "debt" as mentioned in S.305(e) of the Companies Ordinance to be a ground for winding up of company‑‑‑Alleged liability having been denied by company could not be taken as ground for winding up‑‑‑Resolution of factual controversies was germane to regular recovery proceedings and winding up proceedings under the Ordinance was no answer to such situation‑‑‑Petitioner for recovery of alleged fee could institute and maintain legal proceedings under S.4 of Legal Practitioners (Fees) Act, 1926‑‑‑Non‑payment of alleged fee of petitioner had no direct relation with business of company‑‑‑Nothing was brought on record to show that company was unable to pay its debts or it was just and equitable that it should be wound up‑‑‑Commercially viable company could not be permitted to be wound up merely for the reason that it was not willing to pay a certain amount allegedly due on account of services provided‑‑‑Petitioner could establish through evidence that company actually owed it the alleged sums, and once they succeeded in doing so before a competent Civil Court and their claim was converted into a decree, then they would be in a position to claim that company owed it a debt and the question of winding up for its inability to pay that debt would arise thereafter‑‑‑Petitioner had sought winding up of a company, which had not yet commenced any business‑‑­Alleged creditor having provided legal services or for that matter having provided any other service had no business to claim that company was incorporated for fraudulent activities and it was operating against the interest of its creditors, when in fact there was no creditor at all‑‑‑High Court dismissed the petition in circumstances.

Black's Law Dictionary, 6th Edn.; Encyclopedia of Banking and Finance by Charles, J. Woelfel. 10th Edn.; Registrar of Companies v. Kavita Benefit (Pvt.) Limited (1978) 48 Comp. Cas. 231; Cherukuru Krishnaiah v. Rajah Sir AIR 1958 Andh. Pra. 342;. Sharda Bhandari v. Ananya Electronics (1993) 78 Comp. Cas. 167; Paramount Enterprises v. Rechem (1985) 57 Comp. Cas. 200; M. Gordhandas & Co. v. M.W. Industries AIR 1971 SC 2600; Investment Corporation of Pakistan v. Messrs American Marble Products 1998 CLC 514; O.P. Basra v. Kiathal Cotton AIR 1962 Punj. 151; Messrs Khyber Textile Ltd. v. Messrs Allied Textile Mills Ltd. 1989 CLC 1167; Investment Corporation of Pakistan (ICP) v. Messrs Noor Silk Mills Ltd. 1998 CLC 543; Mullah Abdullah and 9 others v. Saria Rope Mills Ltd. PLD 1971 Kar.597; Federation of Pakistan v. The Standard Insurance Company Ltd. PLD 1986 Kar.409; Messrs Adage Advertising, Lahore v. Messrs Shezan International Ltd. 1970 SCMR 184; Messrs Metito Arabia Ltd. v. Messrs Gamoon (Pakistan) Ltd. 1997 CLC 230, Muzaffar Abbas Malik and 2 others v. Messrs Pakistan PVC Ltd. PLD 1998 Kar.71; United Bank Ltd. v. Golden Textile Mills Ltd. PLD 1998 Kar. 330 and Messrs Platinum Insurance Company v. Daewoo Corporation, Sheikhupura P L D 1999 SC 1 ref.

(b) Companies Ordinance (XLVII of 1984)‑‑‑--

‑‑‑‑S.305‑‑‑Winding up of company‑‑‑Purpose to seek a winding up by a creditor is invariably to see that whatever is left of the assets, the same may not further diminish before an actual recovery is effected‑‑‑Ground for winding up of company arises only when it is unable to pay its debts and the creditors are of the view that if the matter is left any further, then either their security will diminish or the amount due to them will further be reduced.

(c) Qanun‑e‑Shahadat (10 of 1984)‑‑‑-

‑‑‑ Arts. 70 & 71‑‑ Absence of documentary evidence in defense to a claim‑‑‑Effect ‑‑‑Defence to claim could not be, false or ingenuine merely for the reason that in all probability, no documentary evidence to support the same could be produced‑‑­Raising of a dispute to challenge or deny a liability was not conditional to the availability or veracity of an evidence, which was likely to be introduced in support thereof.

Shazib Masood and Taffazal, H. Rizvi for Appellant.

Muhammad Raza Farooq for Respondent.

Date of hearing: 22nd November, 2001.

2002 C L D 623

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mirza SHAHID BRIG‑‑‑Appellant

Versus

NATIONAL BANK OF PAKISTAN and

8 others‑‑‑Respondents

E.F.A. No.82 of 2001, decided on 22nd January, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XVI of 2001)‑

‑‑‑‑Ss. 19 & 22‑‑‑Civil Procedure Code (V of 1908), S.55 & O.XXI R37‑‑‑Appeal‑‑‑Execution of decree‑‑‑Prayer in execution petition for arrest of appellant with the object of satisfying the decree was accepted by the Banking Court‑‑‑Validity‑‑‑Decree obtained by Bank was to be satisfied through sale of properties mentioned in Farad Taleeqa‑‑‑Banking Court should have, in the first instance, attempted to sell such properties‑‑‑Where sale proceeds were not sufficient to satisfy the decree or judgment debtor impeded the sale or committed other prejudicial acts, then it would have been proper to proceed against the judgment‑debtors personally‑‑‑High Court modified the impugned order and held that there was no justification for issuing warrants of arrest against the appellant‑‑‑Appeal was partially allowed in such terms.

Mian Abdul Sattar Ijaz for Appellant.

Sh. Jamshed Ahmad for Respondents.

2002 C L D 636

[Lahore]

Before Maulvi Anwaurul Haq and Mian Hamid Farooq, JJ

ZAR JABEEN TEXTILE MILLS (PVT.) LTD. through

Chief Executive and 3 others‑‑‑Appellants

Versus

HABIB BANK LTD. through Tanvir Hussain

Shah and another being holders of General

Power of Attorney‑‑‑Respondent

Regular First Appeal No.489 of 2001, heard 10th January, 2002.

(a) Appeal (civil)‑‑‑

‑‑‑‑Regular first appeal does not lie against an order.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑

‑‑‑‑Ss. 10, 12 & 21‑‑‑Limitation Act (IX of 1908), S.5‑‑‑Appeal‑‑­Limitation‑‑‑Applications for leave to defend‑‑‑Banking Court after dismissing such applications for non‑prosecution decreed the suit on 19‑3‑2001‑‑‑Defendants filed application under S.12 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 for setting aside of judgment and decree, but the same was dismissed as being not maintainable vide order, dated 18‑5‑2001‑‑‑Defendants filed regular first appeal against judgment and decree, dated 19‑3‑2001 as well as order, dated 18‑5‑2001‑‑‑Defendants also filed first appeal against Order, dated 18‑5‑2001‑‑‑Validity‑‑‑Defendants applied for certified copies of impugned judgment and decree after 65 days of its passing i.e. on 24‑5‑2001, when period of 30 days prescribed under S.21 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 for filing of appeal had already expired‑‑‑Defendants had neither filed application under S.5 of Limitation Act, 1908, for‑condonation of delay nor had given explanation in memorandum of appeal for preferring appeal beyond prescribed period of limitation‑‑‑Regular First Appeal thus was grossly time‑barred‑‑‑Regular First Appeal would not lie against the impugned order‑‑‑High Court declined to entertain regular first appeal against order, dated 18‑5‑2001, which had already been challenged in first appeal against order and had been admitted for regular hearing‑‑­Defendants could not file two appeals against the same order‑‑­High Court dismissed the regular first appeal in circumstances.

Farooq Amjad Mir and Muhammad Afzal for Appellants.

Shams Mahmood Mirza for Respondent.

Date of hearing: 10th January, 2002.

JUDGMENT

2002 C L D 639

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

APEX INTERNATIONAL ASSOCIATES

and another‑‑‑Appellants

Versus

BANK AI‑FALAH LIMITED, L.D.A. PLAZA, KASHMIR ROAD, BRANCH, LAHORE‑‑‑Respondent

Regular First Appeal No.917 of 2001, decided on 6th February, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑--

‑‑‑‑Ss. 9,10,12 & 22‑‑‑Civil Procedure Code (V of 1908), O. IX, R.6‑‑‑Ex pane decree, setting aside of‑‑‑Plea of one of the appellants (2) was that his address had. been incorrectly given in the plaint ‑‑Validity‑‑‑Sale deeds of mortgaged property tend title deeds of the said appellant (2) deposited with respondent- ­Bank showed that his address as given in such documents had not been mentioned in cause title of the plaint‑‑ Address of another appellant (1) i.e. borrouring company as mentioned in various finance documents had been correctly given in the plaint, thus, impugned decree would stand. and remain fully enforceable against the appellant‑company‑‑‑Other appellants (2) had not been properly, served before passing of ex pane decree‑‑‑High Court set aside impugned judgment and decree to the extent of appellant (2) who might, within, 21‑ days from date of judgment submit an application for leave to appear and defend the suit in accordance with the provisions of the Ordinance.

M. Shahid Maqbool Sheikh for Appellants.

Ashter Ausaf Ali for Respondent.

2002 C L D 641

[Lahore]

Before Jawwad S. Khawaja, J

Mst. GHULAM ZUHRA‑‑‑Petitioner

Versus

REGIONAL CHIEF, NATIONAL BANK

OFTAKISTAN, MACLAGON ROAD, LAHORE and 2 others‑‑‑Respondents

Writ Petition No.4647 of 2000, decided on 15th February, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑

‑‑‑‑S. 18‑‑‑Civil Procedure Code N of 1908), O.XXI, R.90‑‑­Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑­Mortgaged property was auctioned in execution of money decree‑Objection petition filed by petitioner was dismissed on his. failure to deposit 2096 of auction amount‑‑‑Petitioner contended that he had made payment of suns due to the Bank as per relief package allowed by Bank, but instructions to withdraw execution petition were issued by the Bank after the date of auction of property‑‑‑Validity‑‑‑Equities of case were against the petitioner as he had repeatedly frustrated the attempts of Executing Court to auction the property and thereafter had refused to comply with its order requiring him to deposit 2096 of auction amount‑‑‑Action taken by Executing Court was entirely justified and strictly in accordance with laur‑‑­Constitutional petition to challenge Court auction would not lie in such circumstances‑‑‑High Court dismissed the Constitutional petition with observations that auction amount would be paid to the petitioner, because decree‑holder Bank had already issued a certificate stating therein that outstanding amount recoverable by Bank had been fully adjusted as per relief package.

Naseem Kashmiri and Syed Qamar Abbas for Petitioner.

Kamran Bashir for Respondents Nos. l and 2.

Azhar Hameed Bhutta for the Purchaser.

Date of hearing: 15th February, 2002.

2002 C L D 652

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

HAROON ZAHEER and another‑‑‑Appellants

Versus

CITI BANK N.A. 14, KASHMIR EGERTON ROAD, LAHORE‑‑‑Respondents

E.F.A. No.793 of 2001, decided on 6th February, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑

‑‑‑‑Ss. 19 & 22‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr. 66, 89 & 90‑‑‑Execution of decree‑‑‑Property was auctioned after giving to appellants notice under O.XXI, R.66, C.P.C.‑‑‑Appellants filed application under O.XXI, Rr. 89 & 90, C.P.C. for setting aside such auction, but did not make the payment of amount paid by auction‑purchaser as required by R.89 of O.XXI, C.P.C.‑‑­Appellants had refused to comply with order of Executing Court requiring them to deposit 596 of the auction price in Court‑‑­Application filed by appellants was not maintainable and had been rightly dismissed by the Executing Court‑‑‑High Court dismissed the appeal in circumstances.

Muhammad Aamir Tauseef for Appellants.

Shahid Ikram Siddiqui for Respondents.

Asher Elahi for Respondent No.2.

2002 C L D 653

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Appellant

Versus

Messrs RADIEUX (PRIVATE) LIMITED through

Chief Executive and 7 others‑‑‑Respondents

First Appeal from Order No.205 of 2001, heard on 23rd January, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑

‑‑‑‑S. 18‑‑‑Civil Procedure Code (V of 1908), S.151 & O.XXI, Rr.89, 90‑‑‑Court auction held in execution of decree obtained by appellant‑Bank‑‑‑Bank objected to auction by filing application under S.151, C.P.C.‑on the ground that persons named therein were ready to offer an amount higher than the auction price‑‑­Banking Court dismissed application as such person had not participated in the auction‑‑‑Validity‑‑‑Bank in its application had not claimed any right under O.XXI, Rr.89 & 90, but had set out a plea on behalf of the persons named therein‑‑‑Bank had not complied with the terms of O.XXI Rr.89 & 90, C.P.C.‑‑‑Banking Court had rightly dismissed the application of Bank in circumstances‑‑‑High Court dismissed the appeal.

Rao Muhammad Suleman v. Allied Bank of Pakistan Ltd. and 11 others 1987 CLC 1338 ref.

Sultan Mahmood for Appellant.

Ch. Farooq Mehmood Kahloon for Respondents.

Khalid Saleem and M. Adeel Aqil Mirza for Respondent No.8.

Date of hearing: 23rd January, 2002.

2002 C L D 655

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha. JJ

Messrs M.L. TRADERS through Proprietor and another‑‑‑Appellants

Versus

HABIB BANK LIMITED‑‑‑Respondent

Regular First Appeal No. 431 of 2001, heard on 29th January, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑

‑‑‑‑Ss.10, 15 & 21‑‑‑Civil Procedure Code (V of 1908), O.VI, R.17 & O. VIII, R.10‑‑‑Banking Court after granting leave to defend, directed the defendants to file written statement and also reply to application under O. VI, R.17, C.P.C., filed by plaintiff‑Bank‑‑­Contention of defendants was that Banking Court after disallowing them from bringing written statement on record and then invoking the provisions of O.VIII, R.10, C.P.C., had closed their right of defence‑‑‑Validity‑‑‑Banking court should not have required the filing of written statement before us decision on application for amendment of plaint ‑‑Only after such decision, it would have been possible for defendants to know, whether the plaint as filed or as amended had to be answered by them‑‑­Banking Court itself had granted to defendants leave to defend the suit after they having raised serious and bona fide questions of law‑‑‑Defendants were entitled to one final opportunity to file written statement before their right could be closed under OXIII, R. 10, C.P.C.‑‑Appellate Court set aside impugned judgment and decree and remanded the case to Banking Court for trial.

Shahid Ikram Siddiqui for Appellant.

Shams Mahmood Mirza for Respondent.

Date of hearing: 29th January, 2002.

2002 C L D 657

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs MUNIR & CO., KAMALIA and 2 others‑‑‑Appellants

Versus

ALLIED BANK OF PAKISTAN LIMITED through 2 Attorneys ‑‑‑Respondent

First Appeal from Order No. 14 of 1997, heard on 30th January, 2002.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑S.12‑‑‑Limitation Act (IX of 1908), Ss. 5 & 29‑‑‑Appeal, delay in filing of ‑‑‑Condonation‑‑‑Sufficient cause‑‑‑Ground urged in application under S.5 of Limitation Act, 1908, was that appellants' counsel was busy in marriage ceremony of his daughter‑‑‑Respondent contended that provisions of S.5 of Limitation Act, 1908, were not available to appellants, because an express period of ‑limitation for filing appeal had been provided in the Banking Companies (Recovery of Loans) Ordinance, 1979‑‑‑Validity‑‑‑Contention of the respondent was well founded as the same was based on S.29 of Limitation Act,1908‑‑‑Reason given in application did not constitute sufficient cause Justifying condonation of delay, even if the provisions of S.5 of Limitation Act, had been applicable to the appeal‑‑‑Appeal was dismissed being time‑barred.

Muhammad Zaheer Butt for Appellants.

Mukhtar Abbas for Respondent.

Date of hearing: 30th January, 2002.

2002 C L D 622

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs RADIEUX (PRIVATE) LIMITED through

Chief Executive and 6 others‑‑‑Appellants

Versus

INDUSTRIAL DEVELOPMENT BANK OF

PAKISTAN and another‑‑‑Respondents

E.F.A. No.558 of 2001, heard on 23rd January, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑

‑‑‑‑Ss. 18 & 21‑‑‑Civil Procedure Code (V of 1908), O. X36, Rr.66, 67 & 90‑‑‑Execution of decree‑‑‑Appellants filed objection petition under O. Off, Rr.66,67 & 90 for setting aside the auction of property‑‑‑Executing Court directed appellants to deposit 2096 of auction price within one month‑‑ Appellants failed to comply with such order even within the extended time, thus, objection petition was dismissed‑‑‑Validity‑‑‑Order dismissing objection petition was not open to exception in such circumstances‑‑‑Appeal was dismissed being without merits.

Ch. Farooq Mahmood Khokhar for Appellant No.1.

Sultan Mahmood for Respondent No.1.

Khalid Saleem and Adil Aqil Mirza for the Auction­ Purchasers.

Date of hearing: 23rd January, 2002.

2002 C L D 666

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Miss RAZIA SULTANA‑‑‑Appellant

Versus

HABIB BANK LTD. ‑‑‑Respondent

First Appeal from Order No.179 of 2001, heard on 12th February, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑

‑‑‑‑S.12‑‑Ex pane decree, setting aside of‑‑‑Limitation‑‑‑Filing of application for setting aside ex parte decree after prescribed period of limitation without giving valid or justifiable cause for delay‑‑‑Banking Court had rightly dismissed such application as being time‑barred.

Shabbir Ali Chauhan for Appellant.

Ch. Muhammad Mansha for Respondent.

Date of hearing: 12th February, 2002.

2002 C L D 667

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Manager

and another‑‑‑Appellants

Versus

Mst. MERAJ BIBI‑‑‑Respondent

E.F.A. No.815 of 2001, decided on 14th February, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑

‑‑‑‑Ss. 9 & 22‑‑‑Customer filed suit against Bank for rendition of accounts‑‑‑Bank duly rendered the accounts‑‑‑Banking Court ordered the Bank to pay a sum of Rs.9,400 to the customer‑‑­Bank contended that after having rendered accounts, the customer was left with no further cause of action‑‑‑Validity‑‑‑No occasion for passing such order existed for the Banking Court‑‑­High Court accepted appeal and set aside impugned order, whereby Bank was directed to pay such amount to the customer.

Syed Haider Ali Shah for Appellants.

Respondent in person.

2002 C L D 669

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

BABA FAREED GHEE INDUSTRIES (PVT.) LIMITED through Chief Executive

and 3 others‑‑‑Appellants

Versus

NATIONAL BANK OF PAKISTAN‑‑‑Respondent

Regular First Appeal No.325 of 2001, decided on 30th January, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑

‑‑‑‑Ss. 10, 15 & 21‑‑‑Companies Ordinance (XLVII of 1984), S.230‑‑‑Decree for recovery of money‑‑‑Contention of appellant was that statement of accounts appended with plaint by the Bank was not correct; and that Bank had charged mark‑up for a period after the expiry of limit provided to the appellant‑‑­Validity‑‑‑Objection in respect of statement of accounts must be more specific‑‑‑No such objection had, been taken by appellant in his petition for leave to appear and defend‑‑‑Limited company was required by law to maintain its own accounts‑‑‑Appellant being a limited company had not filed its own account to controvert the statement of accounts filed by the Bank‑‑‑Such bald allegations without backing by any documentary proof could not be given any credence‑‑‑Banking Court had disallowed the mark‑up for 210 days in order to avoid charging of mark‑up twice‑‑‑Impugned judgment and decree being not open to exception High Court dismissed the appeal.

Haq Nawaz Chatha for Appellant.

S. Khalil Mehmood for Respondent.

2002 C L D 684

[Lahore]

Before Ch. Ijaz Ahmad, J

ALLIED BANK OF PAKISTAN through Branch Manager Gole Cloth Branch, Faisalabad ‑‑‑Petitioner

Versus

JUDGE BANKING COURT NO. 1, FAISALABAD and another‑‑‑Respondents

Writ Petition No. 15026 of 1998, heard on 13th February, 2002.

(a) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑

‑‑‑‑S.8‑‑‑Civil Procedure Code (V of 1908), O.IX, R.13 & O.XXI-- R.93‑‑‑Constitution of Pakistan (1973), Art 199‑‑‑Constitutional petition‑‑‑Recovery of Bank loan‑‑‑Ex parte decree against borrower‑Auction of borrower's property‑‑‑Ex parte decree set aside‑‑‑Refund of purchase money to auction‑purchaser‑‑­Property was put to auction in execution of ex parte decree passed against the borrower and the same was purchased in auction by the respondent‑‑‑Ex parte decree was set aside by the Banking Court and the judgment remained upheld up to Supreme Court‑‑‑Borrower returned the loan resultantly the recovery suit was withdrawn by the Bank‑‑‑Auction money was not refunded to the respondent and the Bank applied to the Banking Court for refund of the same‑‑‑Banking Court directed the Bank to refund the auction‑money with simple interest of 1596 per annum from the date of deposit of auction money till the date when the order of refund of the money was passed by the Banking Court‑‑­Validity‑‑‑Where the Bank had utilized the amount deposited by the auction‑purchaser, the auction‑purchaser was entitled to refund of all the amount alongwith 1596 per annum profit as granted by the Banking Court‑‑‑Order passed by the Banking Court was modifled to the extent that the auction‑purchaser was also entitled to refund of all the profit till full and final payment by the Bank‑‑‑High Court directed the Bank to refund the principal amount alongwith 1596 profit per annum to the auction‑purchaser‑‑‑Constitutional Petition was disposed of accordingly.

Muhammad Yousafs case PLD 1989 Lah.322; Abdus Sattar's case PLD 1989 Lah.384; Shambilid Ghori's case PLD 1989 Lah.478; Naseer Ahmad's case PLD 1992 Lah.82; Col. (Retd.) Muhammad Aslam's case PLD 1993 Lah.11; Kunwar Rohani Raman's case AIR 1943 PC 189; Sh. Mehraj Din's case PLD 1965 Lah.374; Iqbal Ahmad's case PLD 1977 Lah. 409; Allah Dia v. Settlement Commissioner Lands 1982 CLC 1908; Hassan Khan v. Mst. Rape Jan 1983 CLC 615; Khalid Saeed v. Hockey Club of Pak. Ltd. 1987 CLC 959; Usman Enterprises v. Collector of Customs, Quetta 1995 CLC 1137; Muhammad Ali v. Deputy Settlement Commissioner PLD 1983 Lah.86; Ghufran Ahmad Siddiqui and others v. Subhand Sheikh and others PLD 1983 Lah.157; Nawab Syed Raunaq Ali and others v. Chief Settlement Commissioner and others PLD 1973 SC 236; Khiali Khan v. Haji Nazir and 4 others PLD 1997 SC 304; Muhammad Zahoor and others v. Lal Muhammad and others 1988 SCMR 322; Captain Sultan Mir Khan v. Khanzada Ain‑ud‑Din and others 1968 SCMR 1004 and Muhammad Khan v. Ramnarayan Misra and others AIR 1956 Orissa 156 distinguished.

(b) Practice and procedure‑--

‑‑‑‑ Question of law‑‑Such question can be raised on any point at any stage.

Haji Abdullah Khan and others v. Nisar Muhammad Khan and others PLD 1965 SC 690 rel.

Imran Aziz Khan for Petitioner.

Manzoor Hussain Basra for Respondent No.2.

Date of hearing: 13th February, 2002.

2002 C L D 695

[Lahore]

Before Jawuad S. Khawaja and Abdul Shakoor Paracha, JJ

TAHIR ISLAM‑‑‑Appellant

versus

HABIB BANK LTD. through its Manager‑‑‑Respondent

Regular First Appeal No.770 of 2001, decided on 13th February, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑--

‑‑‑ Ss. 9(4) & 12‑‑‑Ex parte decree‑‑‑Setting aside of‑‑‑Defendant could not reach the rostrum due to rush in the Court‑room and the decree was passed ex pane‑‑‑Validity‑‑‑Contention having been supported by affidavit of the defendant, High Court considered that the defendant was deprived of his right of hearing‑‑‑Judgment and decree passed against the defendant ex parte was set aside in circumstances.

Ustad M. Iqbal for Appellant.

Iqbal Mehmood Malik for Respondent.

2002 C L D 706

[Lahore]

Before Mian Saqib Nisar, J

Mst. ZEESHAN NADEEM‑‑‑Appellant

versus

OMER AZIZ‑‑‑Respondent

Civil Revisions Nos.2409 and 2410 of 2001, decided on 23rd January, 2002.

(a) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S.20‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2‑‑­ Interim injunction, grant of‑‑‑Passing off, rule of ‑‑‑Applicability‑‑­- Dispute was with regard to the name of two private schools one named The Lahore Lyceum' and the other namedThe Lyceum'‑‑­-Former school was established earlier in time by the defendants and the plaintiff was running branches of the school under franchise agreement‑‑‑Plaintiff rescinded the franchise contract and changed the name of her schools to The Lyceum'‑‑‑The Lyceum' was the key name under which the family had established the business of schools in Lahore, and had earned a goodwill and reputation in the educational spheres‑‑‑Schools set‑up under the name necessarily were deemed, understood and taken by the general public to be those, which had been established by the family of the defendants‑‑‑With a view to protect the name, the family had also got a firm registered‑‑­ Plaintiff on the contrary had not independently attained any goodwill qua the name The Lyceum' and the services attached thereto‑‑‑Plaintiff at the best was running the schools on the basis of a franchise conferred upon her by the defendant company, but the franchise agreements had been unilaterally rescinded by her‑‑‑Contention of the plaintiff was that the rule of "passing off" was not applicable‑‑‑Validity‑‑‑Where the plaintiff had herself rescinded the agreement and continued to use the key name, i.e.The Lyceum' for her business, the same amounted :to representing to the public that her business or services had nexus to the family concern of the defendants as such the same would definitely be an unfair trade practice and unfair competition covered by the rule of passing off and thus, would be actionable under the law of torts by the defendants‑‑­ Appellate Court had rightly restrained the plaintiff from conducting her business or rendering educational service under the name and style of `The Lyceum'‑‑‑Interim injunction was not granted in circumstances.

(b) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S.73‑‑‑Civil Procedure Code (V of 1908), S.9‑‑‑Passing off action‑‑‑Jurisdiction of Civil Court‑‑‑Scope‑‑‑Where from the averments of the plaint it was clear that the claim was based simpliciter on passing off action and not on the infringement of trade mark, Civil Courts had jurisdiction in the matter.

Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090 fol.

(c) Trade Marks Act (V of 1940)‑‑-

‑‑‑‑S.20(2)‑‑‑Contention that passing off action 7uas only confined to goods and to services‑‑‑Validity‑‑‑When the action is based simpliciter under the law of torts, services are duly covered by the definition of passing off" and an action can be duly maintained.

Torts by Street, Sixth Edn., p.365 ref.

(d) Specifc Relief Act (1 of 1877)‑‑‑

‑‑‑‑S.54‑‑‑Arbitration Act (X of 1940), S.34‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2‑‑‑Interim injunction, grant of‑‑­-Interference in business‑‑‑Arbitration between the parties‑‑­ Dispute was with regard to the name of two private schools one named The Lahore Lyceum' and the other namedThe Lyceum'‑‑­ Former school was established earlier in time by the defendants and the plaintiff was running branches of the school under franchise agreement‑‑‑Plaintiff rescinded the franchise contract and changed the name of her .schools to The Lyceum'‑‑‑Plea of the plaintiff was that the defendants be restrained from interfering in the business of the plaintiff there was arbitration clause present in the agreement, without getting the matter resolved through the arbitration, the defendants or any other member ofThe Lahore Lyceum' management, had no authority to illegally and unlawfully interferein the affairs/ business of the plaintiff conducted at the schools in dispute‑‑‑Plaintiff was entitled to the relief of protection qua her possession over the schools in dispute and the management affairs‑‑‑Interim injunction was granted accordingly.

Ahmer Bilal Soofi for Petitioner.

Syed Ijaz Ali Akbar Sabzwari for Respondent.

2002 C L D 712

[Lahore]

Before Mian Hamid Farooq, J

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Plaintiff

versus

Messrs NAQI BEVERAGES (PVT.) LTD. and 7 others‑‑‑Defendants

C.O.S. No. 131 of 1999; heard on 8th January, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997‑‑-

‑‑‑S.9‑‑‑Civil Procedure Code (V of 1908), OJI, R.3‑‑‑Causes of action, joinder of two financial facilities were granted in favour of joinder by the Bank‑‑‑Parties were same and the interest was joint‑‑‑Bank filed one suit wherein the causes of action were joined‑‑‑Validity‑‑‑When the causes involve joint interest, plaintiff was empowered under OII, R.3, C.P.C. to combine several causes of action against the defendants in one suit‑‑‑Causes of action in the present case, could be amalgamated in one suit and there was no illegality committed by the plaintiff in filing one suit thereby combining two causes of action‑‑‑Suit was rightly instituted in circumstances.

The Directorate of Industries and Mineral Development, Government of the Punjab through its Director, Lahore and 3 others v. Messrs Masood Auto Stores through Masood Ahmad Malik, Partner, Lahore PLD 1991 Lah. 174 ref.

(b) Court Fees Act (VII of 1870)‑‑-

‑‑‑‑S.17‑‑‑Multifarious suits‑‑Joining of causes of action‑‑­Insufficiency of court‑fee-‑‑Contention of the defendant was that court fee was insufficiently stamped‑‑‑Validity‑‑‑Where the plaintiff had paid the maximum court fee, suit was not insufficiently stamped but was properly valued in circumstances.

(c) Banking Companies (Recovery of Loans. Advances, Credits and Finances) Act (XV of 1997)‑--

‑‑‑‑S.10‑‑‑Application for leave to defend‑‑‑Plea not raised in the application ‑‑‑Effect‑‑‑Where the defendants had not taken a plea in their application for the grant of leave to appear and defend the suit, they were precluded from pleading and raising such plea at the time of arguments.

City Bank v. Tariq Mohsin Siddiqui and others PLD 1999 Kar. 196 ref.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)-‑‑

‑‑‑‑S.17(2)‑‑‑Qanun‑e‑Shahadat (10 of 1984), Art.17‑‑‑Documents not attested by two witnesses‑‑‑Validity‑‑‑All the documents relied upon by the plaintiff‑Bank in support of its claim were signed and executed before coming into force of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, therefore, simply on account of the fact that some of the documents were not attested by two witnesses, would not invalidate those document.

Messrs United Bank Ltd. v. Messrs Redco Textiles Ltd. and 7 others 2000 CLC 968 ref.

(e) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 22(2), proviso‑‑‑Suit for recovery of Bank loan‑‑‑Fresh cause of action‑‑‑Scope‑‑‑Fresh cause of action arose in favour of the plaintiff on the date of promulgation of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, which was promulgated on 31‑5‑1997, therefore, the suit filed on 31‑5‑1997, was not barred by time.

(f) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Application for leave to defend‑‑‑No substantial questions of law and fact involved‑‑‑Effect‑‑‑Where the defendants had failed to raise substantial question of law and facts to be tried by Banking Court in respect of which evidence needed to be recorded application for leave to defend was rightly dismissed.

(g) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Application for leave to defend, dismissal of‑‑‑Effect‑‑‑With the dismissal of application for leave to defend the suit, the allegations made in the plaint would be deemed to be admitted‑‑‑Plaintiff had produced photocopies of all the documents execution whereof was vaguely and feebly denied by the defendants in their application for leave to defend the suit‑‑‑Plaintiff had produced certified/ verified copies of the statement of accounts pertaining to the account of the defendant to which presumption of correctness was attached‑‑‑Validity‑‑‑Where there was no rebuttal of the documents on record and of the statement of accounts, the suit was decreed.

Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments and others 2001 MLD 1955 ref.

Ch. Shehram Sarwar for Plaintiff.

Khalid Mahmood Ansari for Defendants.

Date of hearing: 8th January, 2002.

2002 C L D 726

[Lahore]

Before Naseem Sikandar and Mansoor Ahmad, JJ

PROGRESSIVE CONSULTANTS (PVT.) LTD. and others‑‑‑Appellants

versus

CORPORATE LAW AUTHORITY and others‑‑‑Respondents

Civil Appeal No. 1 of 1990, decided on 17th September, 2001

(a) Companies Ordinance (XLVII of 1984)‑‑

‑‑‑‑S.37‑‑‑Expressions "no company shall be registered" and "a company shall not be registered in S.37, Companies Ordinance, 1984"‑‑‑Connotation‑‑‑Provisions as stated in S.37(1)(2)(3) of the Companies Ordinance, 1984, are related to a Company which has not yet been registered‑‑‑Words `no company shall be registered' as used in S.37(1) and (3) of the Companies Ordinance, 1984, explain the legislative intent that the Authority (now the Commission) is the sole arbiter if the name of a Company to be registered is violative of any provision of S.37 of the Ordinance‑‑­Provisions of S.37(4) of the Companies Ordinance, 1984, when read in the light of subsections, (1), (2) (3) of S.37 again make it certain that the powers of the Commission with regard to the question as to whether or not the proposed name of Company is violative of provisions of that section is confined to the stage where a Company has yet not been registered.

(b) Companies Ordinance (XLVII of 1980)--‑

‑‑‑‑S.37(4)‑‑‑Registration of name of Company‑‑‑Proposed name already registered against a Company under dissolution process ‑‑‑Procedure‑‑‑Where promoters of Company in the process of registration or of an existing Company wishing to change the name of their Company approach the Registration the promoters are permitted to allow the adoption of the proposed name if the Company in process of dissolution signifies its consent in the manner he requires it to do.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 37(1)(3)(4) & 484(2)‑‑‑Companies (General Provisions and Forms) Rules, 1985, R.5‑‑‑Registration of name of company‑‑­Jurisdiction of Commission‑‑‑Order passed by the Commission‑‑­Scope‑‑‑Provisions of S.37(l)(3) of the Companies Ordinance, 1984, are applicable in cases of fresh registration and are expressive of the jurisdiction of the Commission to be exercised directly before a Company stands registered‑‑‑Provisions of S.37(2) of the Companies Ordinance, 1984, also relate to registration stage of a Company wishing to be registered with a name identical with an existing Company‑‑‑Exception given to existing Company in the process of dissolution coupled with the approval of the Registrar is also to be exercised by the Commission before a Company is actually registered‑‑‑If name of a Company is in violation of any of three subsessions of S.37 of the Companies Ordinance, 1984, the Commission is the ultimate and sole arbiter under the provisions of S.37(4) Of the Companies Ordinance, 1984‑‑‑Where the Commission exercises its jurisdiction before the registration of a Company under various subsections of S.37 of the Companies Ordinance, 1984, it acts on administrative side and its decision under S.37(4) of the Companies Ordinance, 1984, is final though the possibility of a review of such order under S.484(2) of the Companies Ordinance, 1984, is not ruled out‑‑‑Finality of opinion of the Commission as to the permissibility of a name for adoption comes into play only when before registration of a Company, the Commission itself expresses such opinion under S.37 of the Companies Ordinance, 1984‑‑‑If the Commission does not express itself on the information to be supplied on an application under R.5 of the Companies (General Provisions and Forms) Rules, 1985, the provisions of S.37 of the Companies Ordinance, 1984, which relates to the pre‑registration stage and particularly those of S.37(4) of the Companies Ordinance, 1984, are reduced to nullity.

(d) Companies Ordinance (XLV1I of 1984)‑--

‑‑‑‑S.38‑‑‑Rectification of name of a Company‑‑‑Provisions of S.38 of the Companies Ordinance, 1984‑‑‑Scope‑‑‑Provisions of S.38 of the Ordinance are self‑executor and provide for a remedial measure if a Company is registered by a name in contravention of the provisions of S.37 of the Companies Ordinance, 1984

(e) Companies (General Provisions and Forms) Rules, 1985‑--

‑‑‑R.5‑‑‑Registrar of Companies‑‑‑Duties‑‑‑Giving of certificate as to the availability of a name‑‑‑Validity‑‑‑Where the Registrar under the provisions of R.5 of the Companies (General Provisions and Forms) Rules, 1985, gives a certificate as to the availability of a name without making reference to the Commission instead of merely providing for 'information' such act of the Registrar compounds confusion‑‑‑To provide information to an applicant regarding the availability of a particular name, the Registrar cannot bypass the provisions of S.37 of the Companies Ordinance, 1984, as the provisions are not for mere guidance of the Registrar.

(f) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 37 & 38‑‑‑Registration of Company‑‑‑Entertaining application under S.37 of the Companies Ordinance, 1984, after registration of name of a Company‑‑‑Validity‑‑‑Entertaining of such application by the Authority (Commission) is against the scheme of Ss. 37 & 38 of the Companies Ordinance, 1984.

(g) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.38‑‑‑Rectification of name‑‑‑Limitation‑‑‑Object and scope‑‑­Without time‑limit the direction in an executive authority is likely to be unnecessarily feared by public‑‑‑Where registration of a name of a company in contravention of S.37 of the Companies Ordinance, 1984, has not resulted in any adverse effect on another company or public at large during the stipulated period of three years, then the law assumes that nothing would go wrong in the future as well.

(h) Companies Ordinance (XLVII of 1984)‑‑-

‑‑‑‑Ss.37 & 484‑‑‑Registration of name of company ‑‑‑Revesional jurisdiction‑‑‑Scope‑‑‑Exercise of revisional jurisdiction under S.484 of the Companies Ordinance, 1984, however, is a quasi­judicial function and is different from its function on the administrative side as vested in it under S.37 of the Companies Ordinance, 1984.

(i) Companies Ordinance (XLVII of 1984)‑‑-

‑‑‑‑Ss. 12(7), 37, 38 & 484‑‑‑Rectification of registered name‑­--Authority directing Registrar to exercise jurisdiction under S.38 of the Companies Ordinance, 1984‑‑‑Dispute was with regard to a name of a Company which was already a registered name of another Company under dissolution‑‑‑Authority entertained application on behalf of the company under dissolution and directed the Registrar to exercise jurisdiction under S.38 of the Companies Ordinance, 1984‑‑‑Validity‑‑‑‑After the registration of the name of Company, the Authority was not competent to entertain application against the registration of the Company and to record a direction on that application to the Registrar to exercise his jurisdiction under S.38 of the Companies Ordinance, 1984‑‑‑Enforcement of the Companies Ordinance, 1984, was vested in the Commission and all persons employed in the execution of the Companies Ordinance were bound to follow its orders and instructions under S.12(7) of the Companies Ordinance, 1984‑‑‑Such a direction could not be m‑ode to any officer which would result in recording of an order against which a revision was to be filed before the Commission under S.484 of the Companies Ordinance, 1984‑‑‑If in such case the Commission had made a direction to record a particular order which was revisable before it, the remedy, of revision as provided in S.484 of the Companies Ordinance, 1984, would become illusory‑‑­Commission could pass every order on administrative side but such order if acted upon by the concerned officer would no more be revisable on the revisional side by the Commission which was quasi judicial in nature‑‑‑Chairman, in the present case, had wrongly observed in the order that the Authority (Commission) could make a direction to the Registrar on the administrative side under S.37 of the Companies Ordinance, 1984, to proceed and record an order under S.38 of the Companies Ordinance against which a revision lay before it under 5.484 of the Companies Ordinance, 1984‑‑‑Chairman of the Commission was also not correct in pointing out that the company under dissolution had approached the Authority in its original jurisdiction under S.37 of the Companies Ordinance, 1984‑‑‑Original jurisdiction, of the Authority (Commission) vested in it under S.37 of the Companies Ordinance, 1984, was on the administrative side‑‑‑In exercise of original jurisdiction the Authority could pass any order to bar or forestall the violation of the provisions of S.37 of the Companies Ordinance, 1984, and such order would be final‑‑‑Where the jurisdiction particularly under S.37(1) of the Companies Ordinance, 1984, having not been exercised either directly or on a reference by the Registrar, the Authority (Commission) was no more competent to proceed on the administrative side to direct the Registrar to record an order under S.38 of the Companies Ordinance, 1984, which was revisable before it‑‑‑High Court disapproved the exercise of original jurisdiction by the Authority after name of the Company had already been registered‑‑‑Order passed by the Authority was set aside in circumstances.

Muhammad Saleem Sehgal alongwith Naeem Sehgal for Appellant.

Kh. Abrar Majal for Respondent No.2.

Saeed‑ul‑Zafar Khawaja, D.A.‑G. for Respondent No.4.

Dates of hearing: 2nd and 3rd July, 2001.

2002 C L D 739

[Lahore]

Before Ch. Ijaz Ahmad and Syed Sakhi Hussain Bokhari, JJ

Malik ZAHEER NAWAZ and 6 others‑‑‑Appellants

versus

PAKISTAN INDUSTRIAL LEASING CORPORATION LIMITED and 7 others‑‑‑Respondents

First Appeal from Order No. 414 of 2001, decided on 12th March, 2002.

(a) Administration of justice‑‑‑

‑‑‑‑Judicial Officers must pass judgments with reasons.

Mollah Ejahar Ali v. Government of East Pakistan and others PLD 1970 SC 173 rel.

(b) Financial Institutions (Recovery of Loans) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 7, 17 & 22‑‑‑Civil Procedure Code (V of 1908), S.12(2)‑‑­General Clauses Act (X of 1897), S.24‑A‑‑‑Decree for recovery of money‑‑‑Appellants being stranger to such decree filed application under S.12(2), C.P.C., for setting aside the same‑‑­Banking Court by merely mentioning one sentence dismissed the application as time‑barred as well as on merits‑‑‑Validity‑‑­Judicial Officers must pass judgments with reasons‑‑‑Public functionaries, in view of S.24‑A, General Clauses Act, 1897, were duty bound to pass orders with reasons‑‑-High Court set aside the impugned order with observations that application filed by the appellants would be deemed to be pending adjudication before Banking Court to be decided within specified time.

Mollah Ejahar Ali v. Government of East Pakistan and others PLD 1970 SC 173 and Messrs Airport Support Services v. The Airport Manager, Quaid‑e‑Azam International Airport, Karachi and others 1998 SCMR 2268 rel.

Abid Hassan Minto for Appellants.

Sh. Maqbool Ahmad for Respondent No. 1.

Shahid Ikram Siddiqui for Respondent No.8.

2002 C L D 741

[Lahore]

Before Muhammad Nawaz Abbasi, J

Messrs UNION BANK LIMITED through Vice‑President and Attorney‑‑‑Plaintiff

versus

SILVER OIL MILLS (PVT.) LIMITED and 17 others‑‑‑Defendants

Civil Original Suit No.4 of 2001, heard on 3rd January, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (%V of 1997)‑‑‑

‑‑‑‑Ss. 9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Necessary parties‑‑‑Guarantor, proceedings against‑‑‑Contention, of the guarantors was that they need not join the proceedings actively as in case of failure of the remaining defendants to discharge their liability or in case the decree if passed was not satisfied, only then their property mortgaged with the Bank would be under the charge‑‑‑Validity‑‑‑Names of the guarantors, in circumstances, were struck off from the application for leave to appear and defend the suit and they were treated as pro forma defendants in the suit accordingly.

(b) Banking Companies (Recovery. of Loans, Advances, Credits and Finances) Act (XV of 1997‑‑-

‑‑‑‑S.10‑‑‑Unconditional grant of leave to appear and defend the suit‑‑‑Mistake in calculation of claim and mark‑up‑‑‑Effect‑‑‑Mere denial of liability without denial of getting financial facility from the Bank would not be enough to suggest that either there was no liability or it was discharged‑‑‑Mistake in the calculation of claim or the dispute relating to mark‑up was also not a ground either to reject the claim of the Bank in toto or grant un­conditional leave‑‑‑Defendants, instead of offering any explanation for not discharging their liability or accepting their liability, had denied the claim of the Bank through evasive pleadings, which would lead to draw an inference that the defendants, instead of discharging their liability, intended to delay the return of loan‑‑‑Where the defendants had obtained the financial facility from the Bank, the defendants were under legal and moral obligation to discharge their liability in terms of agreement and on failure were bound to face the consequences‑‑­High Court did not find any plausible and reasonable ground to grant unconditional leave to defendants to appear and defend the suit‑‑‑Leave was, however, granted subject to furnishing of cash security or Bank guarantee to the tune of disputed amount in circumstances.

Syed Iqbal Haider and Muhammad Afzal Siddiqui for Plaintiff.

Abdur Raheem Bhatti for Defendants Nos. 1 to 14, Miss Alia Naeem for Defendants Nos. 15 to 18.

Date of hearing: 3rd January, 2002.

2002 C L D 746

[Lahore]

Before Anwar Zaheer Jamali, J

Messrs PAK SHAHEEN (PVT.) LTD. ‑‑‑Petitioner

versus

IN THE MATTER OF THE COMPANIES ORDINANCE 1984 through Agent Messrs Pak Shaheen (Pvt.) Ltd.

Judicial Miscellaneous No.54 of 2000, decided on 15th August, 2001.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.444(3)‑‑‑Winding‑up of foreign company‑‑‑Scope‑‑‑Order of winding‑up in case of unregistered foreign company can be passed by High Curt under S 444(3) of the Companies Ordinance, 1984.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.444‑‑‑Winding‑upon foreign company‑‑‑Commercial insolvency, plea of‑‑‑Allegations made in the petition for winding up of the respondent‑company was that the company should be dissolved because of commercial insolvency and the substratum of the company had gone‑‑‑Allegations made in the petitioner remained unchallenged by all the parties‑‑‑Official Assignee way appointed by High Court as Official Liquidator ‑‑‑Petition for winding‑up was allowed accordingly.

Messrs James Finlay PLC v. Messrs Hellenic Lines Limited and another 1986 CLC 2933 ref.

Mansoor Ahmed Sheikh for Petitioner.

2002 C L D 754

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

DESCON MANUFACTURING‑‑‑Appellant

versus

M. TUFIAL‑‑‑Respondent

Regular First Applications Nos. 186 of 1992 and 194 of 1994, heard on 11th February, 2002.

(a) Limitation Act (IX of 1908)‑‑‑

‑‑‑‑Art. 114‑‑‑Rescinding of contract‑‑‑Limitation‑‑‑Circumstances entitling the plaintiff to rescind the contracts occurred on the dates much prior to the issuance of the preliminary notice‑‑­Limitation was computed from the date of issuance of notice‑‑­Validity‑‑‑Where the facts entitling the plaintiff to rescind the contracts were known to him prior to the last breach as mentioned in the notice, the suit was barred by limitation.

(b) Limitation Act (IX of 1908‑‑-

‑‑‑‑Art. 115‑‑‑Continuous breach of contract‑‑‑Limitation‑‑‑Filing of suit after last breach of contract‑‑‑Legal notice was served in the month of June, 1985, wherein it was admitted that the defendant had been violating the terms of the contracts much before the issuance of the notice‑‑‑Contention of the defendant was that the suit filed on 27‑6‑1988 was barred by limitation‑‑‑Plea raised by the plaintiff was that the term continuing breach used in Art. 115 of the Limitation Act, 1908, was applicable in the case and had given him a right to sue within three years from the last breach before the contracts were rescinded‑‑‑Validity‑‑‑Where there was a monthly breach of contract on the part of the defendant, the plea raised by the plaintiff ff was untenable‑‑‑Suit was time‑barred in circumstance.

(c) Limitation Act (IX of 1908)‑--

‑‑‑‑S.19, Arts. 114 & 115‑‑‑Civil Procedure Code (V of 1908), S.96‑‑‑Acknowledgement in writing‑‑‑Computation of fresh period of limitation‑‑‑Contracts were rescinded by the defendant much before issuance of legal notice in the month of June, 1985, and the suit filed on 27‑6‑1988, was decreed by the Trial Court in favour of the plaintiff‑‑‑Defendant contended that the suit was barred by limitation‑‑‑Plea raised by the plaintiff` was that letters can issued by the defendant constituted an acknowledgement of liability sufficient to give fresh period of limitation to the plaintiff, therefore, the suit was within limitation.‑‑Validity‑‑‑Where the letters did not constitute such acknowledgement of liability, the suit was barred by limitation‑‑‑Judgment and decree passed by the Trial Court was set aside‑‑‑Appeal was allowed in circumstances.

Yaqoob Habib Kaliya v. A. Sattar PI,D 1958 Kar.534 and Harchandrai v. Popular Metal Works PLD 1971 Kar. 925 ref.

Jawwad Hassan for Appellant.

Respondent in person.

Date of hearing: 11th February, 2002.

2002 C L D 759

[Lahore]

Before Maulvi Anwarul Haq, Mian Hamid Farooq and Abdul Shakoor Paracha, JJ

Syed FARASAT ALI SHAH‑‑‑Petitioner

versus

ALLIED BANK OF PAKISTAN LIMITED‑‑‑Respondent

Writ Petitions Nos.12374, 1055 of 1999, 21629 of 1998 and 12587 of 1996, heard on 14th February, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.9‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.5‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­-Constitutional petition‑‑‑Decrees passed against petitioners by Banking Tribunal was not assailed in appeals, but was assailed in Constitutional petitions after expiry of period of limitation prescribed for filing appeal‑‑‑High Court disposed of the Constitutional petitions by virtue of judgment rendered in the case of Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore anti. others (PLD 1996 Lah. 672)‑‑‑Bank thereafter initiated execution proceedings, over which petitioners objected that in view of case Chenab Cement Product (supra), such decrees would be deemed to have been set aside, thus, was not executable‑‑‑Banking Tribunal dismissed the objection petition‑‑‑Validity‑‑‑Such decrees were saved and would be considered to be past and closed cases and had become final by virtue of judgment passed in the case of Chenab Cement Product (supra) and there was no legal impediment in executing the same‑‑‑Where decree passed by Banking Tribunal had been challenged through filing of appeal and simultaneously by way of filing Constitutional petition, and the latter had been disposed of in pursuance of the case of Chenab Cement Product (supra), then in such event, the decree would not be covered within the scope of said judgment and would not fall within the term "past and closed case", but would be deemed to be set aside‑‑‑High Court dismissed the Constitutional petitions being devoid of force, resultantly the decrees passed in the petitioners' cases would be executed by the Banking Courts established under S.5 of Financial Institution (Recovery of Finances) Ordinance, 2001.

Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah.672; Messrs Isman Drug House (Pvt.) Ltd. and 2 others v. Messrs Habib Credit and Exchange Bank Limited and 4 others 2000 YLR 1484; Soneri Bank's case KLR 1997 Civil Cases 742; R.F.A. No. 101 of 1995; Aziz‑ul‑Haq Qureshi and others v. Habib Bank Limited and others Civil Petition No.2172‑L of 1999 and United Bank Limited v. Messrs The Hina Export Co. (Pvt.) Limited Office, Karachi 1998 PSC 78 rel.

Sheikh Zia Ullah for Petitioner

Zahid Hamid for Respondent.

Date of hearing: 14th February, 2002.

2002 C L D 770

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

NATIONAL BANK OF PAKISTAN‑‑‑Appellant

Versus

Messrs HASHMI SONS and 16 others‑‑‑Respondents

First Appeal from Order No. 12 of 1994, heard on 11th October, 2001.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑Ss.6(2)(a)(4) & 8(3)‑‑‑Constitution of Pakistan (1973), Art 189‑‑­Dismissal of execution application by Special Court filed in respect of decree passed by Civil Court on 28‑3‑1983 after coming into force of Banking Companies (Recovery of Loans) (Amendment) Ordinance (II of 1983)‑‑‑Validity‑‑‑Judgment passed by Supreme Court‑‑‑Whether can be given retrospective effect‑‑­Past and closed transaction‑‑‑Judgment in appeal was operative as from the date it was announced and it did not have the effect of re‑opening the rights of the parties concluded finally under the High Court judgment‑‑ Authority of law laid down by Supreme Court under Art. 189 of the Constitution being prospective, decision of High Court nevertheless stood overruled on same question of law but that would not affect right of parties already determined by High Court‑‑‑Judgment and decree in the present case, were not challenged by the judgment‑debtor which had become final and was a past and closed transaction‑‑‑Execution application was wrongly dismissed by the Banking Court which would be decreed pending and would be decided in accordance with law‑‑‑Appeal was allowed in circumstances.

Habib Bank Limited v. Messrs Qadri Traders and another 1998 PCTLR 923 rel.

Muhammad Qamar‑uz‑Zaman for Appellant. .

Nemo for Respondents. Date of hearing: 11th October, 2001.

2002 C L D 778

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

MAJEED AKBAR FAROOQI‑‑‑Appellant

versus

BANK OF PUNJAB through Manager (Attorney)‑‑‑Respondent

First Appeal from Order No.219 of 2001, decided on 12th February, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.21‑‑‑Limitation Act (IX of 1908), Ss. 5 & 29‑‑‑Appeal‑‑­Condonation of delay‑‑‑Validity‑‑‑Period of filing of appeal having been specified in the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act 1997, itself, the provisions of S.29 of the Limitation Act, 1908, were applicable‑‑‑Delay in filing of appeal could riot be condoned under S.5 of the Limitation Act, 1908, or under any other provision of law.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑‑S.21‑‑.Appeal‑‑‑Condonation of delay‑‑‑Ignorance of law‑‑­Instead of filing appeal in the first instance against judgment and decree the appellant filed Constitutional petition‑‑‑Present appeal was filed after withdrawal of the petition‑‑‑‑Plea of ignorance was raised‑‑‑Validity‑‑‑Ignorance of law could not constitute a valid ground for condoning delay‑‑‑Appeal was dismissed as time‑barred.

Mirza Javed Mukhtiar for Appellant.

Tariq Shamim assisted by Muhammad Ramzan Wattoo for Respondents.

2002 C L D 786

[Lahore]

Before Karamat Nazir Bhandari, J

MUHAMMAD HANIF‑‑‑Petitioner

Versus

HABIB BANK LIMITED and another‑‑‑Respondents

Transfer Application No.475‑C of 2001, decided on 28th February, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑S.5(3)‑‑‑Civil Procedure Code (V of 1908), S.12(2) & O.IX, R.9‑‑­Consolidation of proceedings‑‑‑Application under S.12(2), CP.C. ‑& O.IX, R.9, C.P.C. was pending in one Court while execution proceedings regarding same decree were pending in another Court‑‑‑Effect‑‑‑High Court for the sake of convenience and in order to avoid conflicting orders, withdrew the execution proceedings and entrusted to the other Court for disposal‑‑­Application was allowed accordingly.

Anwar Akhtar for Petitioner.

2002 C L D 787

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

NATIONAL BANK OF PAKISTAN‑‑‑Appellant

Versus

Messrs RIAZ AHMAD & SONS (REGD.) through Managing Partner and 2 others‑‑‑Respondents

First Appeal from Order No. 182 of 1993, heard on 23rd January, 2002.

Civil Procedure Code (V of 1908)‑‑‑‑

‑‑‑‑S.48‑‑‑Execution‑‑‑Limitation‑‑‑Banking Court dismissed execution application on the ground that the same was filed three years after passing of judgment and decree‑‑‑Validity‑‑‑Period for filing of execution application was six years in view of S.48, C.P.C.‑‑‑Where decree was passed on 30‑5‑1975, the execution application moved on 3‑5‑1981, was within time‑‑‑Order passed by the Banking Court was set aside and the execution application was deemed to be pending‑‑‑Appeal was allowed in circumstances.

Mehboob Khan v. Hassan Khan Durrani PLD 1990 SC 778 fol.

Mian Qamar‑uz‑Zaman for Appellant.

Nemo for Respondents.

Date of hearing: 23rd January, 2002.

2002 C L D 788

[Lahore]

Before Jawwad S. Khawaja, J

Sh. AKHTAR ALI and 2 others‑‑‑Petitioners

Versus

KARAMAT ALI MIRZA and another‑‑‑Respondents

Writ Petition No.7358 of 1996, decided on 19th February, 2002

Industrial Relations Ordinance (XXIII of 1969)‑‑‑

‑‑‑‑S.22‑A(8)(g)‑‑‑Constitution of Pakistan (1973), Art.199­Constitutional jurisdiction‑‑‑‑Jurisdiction of National Industrial Relations Commission in matter of election of office‑bearers of Company‑‑‑Scope‑‑‑National Industrial" Relations Commission had no jurisdiction in matter of election of a Company because it was for members of Company alone to elect persons in accordance with Companies Ordinance, 1984 and Memorandum and Articles of Association of Company‑‑‑Even if any irregularity or illegality was alleged in election, competent forum for deciding any such dispute was High Court under Companies Ordinance, 1984.

Sohail Akhtar for Appellant.

2002 C L D 790

[Lahore]

Before Muhammad Saeed Akhtar, J

SGS SOCIETE GENERALE ‑‑‑Appellant

versus

PAKISTANI‑‑Respondent

First Appeal from Order 9 of 2002, heard on 14th February, 2002.

(a) International Law‑

‑‑‑‑Monism‑‑‑Defined‑‑‑Monism is a doctrine whereby international law and national law form a single whole, or part of the same conceptual structure, in which international late takes precedence‑‑‑Under this doctrine, adhered to by, inter alia, France and Italy, the obligations of international law, once assumed, enter automatically into the legal system, needing to domestic legislative acts‑‑‑Once entered, the obligations take precedence over national law.

Constitutional and Administrative Law by Hilaire Barnett Second Edn. ref.

(b) International Law‑‑‑

‑‑‑‑Dualism‑‑‑Defined‑‑‑Dualism regards the systems of international law and national law as separate in order for international law to enter into national law, some domestic legislative action must be enacted by the national Parliament‑‑­Such view is the view adopted by the United Kingdom and is one consistent with the sovereignty of Parliament.

Constitutional and Administrative Law by Hilaire Barnett Second Edn. ref.

(c) Washington Convention of 1965‑‑

‑‑‑‑Applicability in Pakistan‑‑‑In Pakistan dualism is the accepted norm‑‑‑No domestic law was enacted to give effect to the Washington Convention of 1965 as such the same remains merely an executive act and no more.

Aziz Khan, Commissioner (E), Pakistan Navy v. The Director‑General, Ports and Shipping 1991 CLC 362 and Messrs Najib Zarab Ltd. v. Government of Pakistan PLD 1993 Kar. 93 distinguished.

(d) Interpretation of Treaties‑‑‑

‑‑‑‑ General rules of interpretation of statute are applicable to the Treaties unless stated otherwise‑‑‑Rules commonly applied by the Courts for the interpretation and construction of Municipal Law are only applicable to the interpretation and construction of Treaties and in particular of law‑making Treaties, insofar as they constitute general rules of Jurisprudence‑‑‑If these rules are sanctioned by the Municipal Law or by the practice of Courts, of a particular country, they may not be applied.

International Law by Open Heim, 8th Edn. ref.

(e) International Center for Settlement of Investment Disputes (ICSID) Convention‑‑‑

‑‑‑‑Art.26‑‑‑Referring dispute to the International Center for Settlement of Investment Disputes‑‑‑Scope‑‑‑Center does not have jurisdiction under Art.26 of the ICSID Convention unless there is a valid consent of the parties‑‑‑Consent is the sine quo. non for institution of the ICSID arbitration proceedings‑‑‑Lack of consent takes the dispute manifestly outside the jurisdiction of the Center.

ICSID Convention: A Commentary by Christoph H. Schreuer, p. 351 ref.

(f) International Center for Settlement of Investment Disputes (ICSID) Convention‑‑

‑‑‑‑Arts., 28(3) & 36(2)‑‑‑Arbitration of International Center for Settlement of Investment Disputes (ICSID)‑‑‑Jurisdiction‑‑‑If host State refuses to give its consent, it would be in breach of its obligation under Bilateral Investment Treaty but the Secretary-­General of ICSID would presumably reject a request for conciliation or arbitration under the circumstances in accordance with his screening powers under Arts.28(3) or 36(2) of the International Center for Settlement of Investment Dispute (ICSID) Convention‑‑‑Request must contain information concerning the consent to the parties to conciliation or arbitration.

(g) Bilateral Investment Treaty‑‑

‑‑‑‑"Investment"‑‑‑Connotation‑‑ All money claims cannot fall within the domain of investment' as defined by the Bilateral Investment Treaty‑‑‑If an investor, while, quitting after the completion of the jobs sells some office furniture to the host State, obviously the claim for non‑payment of money cannot be termed asinvestment dispute'‑‑‑ Where the agreement uses the phrase services' andprofessional services' the same have been kept out of the purview of the term `investment'.

(h) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑S.20‑‑‑International Center for Settlement of Investment Disputes (ICSID) Convention, Arts,28(3) & 36(2)‑‑ Arbitration‑‑­Waiver‑‑‑Applicability‑‑‑Arbitration of International Center for Settlement of Investment Disputes (ICSID)‑‑‑Failure to raise the plea in reply to application under S.20 of the Arbitration Act, 1940‑‑‑Effect‑‑‑Where such plea was not raised earlier, the appellant could not have a volte face and take entirely a different stand‑‑‑Appellant had waived his right to ICSID arbitration in circumstances.

Corpus Juris Secundum Vol. 6, para. 54, p. 260; American Jurisprudence, IInd Edn., Vol. 5, para.51 p.556; Messrs Uzin Export & Import Enterprises for Foreign Trade v. Messrs M. Iftikhar & Company Limited 1993 SCMR 866 and Uzim Export Import Enterprises v. M. Iftikhar & Company PLD 1986 Kar.1 ref.

(i) Contract‑‑‑

‑‑‑‑ International contracts‑‑‑Resolving of disputes‑‑‑Choosing of law‑‑‑Parties to an international contract are at liberty to choose the law which they intend to apply to their agreement‑‑‑Such choosen law is known as `proper law' of parent transaction accordingly to which it will be interpreted and on which the parties' substantive rights would depend; there has to be law governing the arbitration clause and there has to be curial (procedural) law governing the procedure to be followed.

Arbitration by Russell Chap.5, p.63 and Hitachi Limited and another v. Rupali Polyester and others 1998 SCMR 1618 and The Export Trade by Clive M. Schmitthoff ref.

(j) Arbitration Act (X of 1940)‑‑‑

‑‑‑‑S.20‑‑ Arbitration in international contracts‑‑‑Object and scope­‑‑Arbitration clause had a separate life in relation to the contract to which it referred as such the same was considered a fundamental principle in arbitration, otherwise the arbitration clause would have lost its legal effect‑‑‑Localization of arbitral proceedings was preferable insofar as it corresponded to the real intention of the parties when they decided to have recourse to arbitration in order to settle their contractual dispute‑‑‑Very serious reasons point to the application of law of the seat of arbitration when the same had been choosen by ,the parties‑‑­Where both the parties had choosen the Arbitration Act, 1940, of the Territory and the venue at Islamabad, Pakistan, such clause, held, could not be deemed to have been varied/ superseded by the Bilateral Investment Treaty and the parties were bound by the same.

Mst. Salma Jawaid and 3 others v. S.M. Arshad and 7 others PLD 1983 Kar. 303; Ms. Shela Zia and others v. WAPDA PLD 1994 SC 693; Attorney‑General for Canada v. Attorney-­General for Ontario 1937 AC 326; Black Burn v. Attorney-­General Lord Denning Master of Rolls and Halsbury's Laws of England, Vol. 11, para. 1357 ref.

Farrukh Karim Qureshi for Petitioner.

Makhdoom Ali Khan, Attorney‑General for Pakistan.

Salman Talibuddin, Uzair Karamat Bhandari and Raja Muhammad Bashir Prosecutor‑General, NAB for Respondent.

Date of hearing: 14th February, 2002.

2002 C L D 812

[Lahore]

Before Maulvi Anwarul Haq and Mian Hamid Farooq, JJ

NAEEMULLAH SHEIKH and another‑‑‑Appellants

Versus

UNITED BANK LIMITED‑‑‑Respondent

Regular First Appeal No.212 of 2000, heard on 7th January, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997‑‑

‑‑‑‑Ss. 9, 10 & 21‑‑‑Leave to appear and defend the suit‑‑­Conditional leave‑‑‑Finance was provided to the borrower to import certain vehicles‑‑‑Scheme under which the vehicles were to be imported was discontinued and consequently the goods were not released‑‑‑Effect‑‑‑Where the documents were signed for the purpose of import of the vehicle, High Court granted conditional leave with a direction to deposit the admitted amount of the loan facility and it was made clear that in case the borrower failed to deposit the amount, the leave would stand withdrawn and the decree passed by the Banking Court against the borrower would be revived.

Tariq Kamal Qazi for Appellants.

Syed Najaf Hussain Shah for Respondent.

Date of hearing: 7th January, 2002.

2002 C L D 813

[Lahore]

Before Maulvi Anwarul Haq, J

SHIFA MEDICO‑‑‑Petitioner

Versus

FEDERATION OF PAKISTAN‑‑‑Respondent

Civil Revision No. 1033 of 1988, decided on 13th November, 2000.

(a) Sale of Goods Act (III of 1930)‑‑

‑‑‑Ss. 17 & 58‑‑‑Specific Relief Act (1 of 1877), Ss.42, 54 & 56‑‑­Cancellation of contract of supply of goods‑‑‑Suit for declaration and permanent injunction‑‑‑Plaints: Plaintiff supplied goods to defendants according to sample and specification, but defendants, despite expressing satisfaction with regard to the use and quality of goods, cancelled contract at the risk and cost of plaintiff, asking plaintiff to deposit amount as damages‑‑‑Plaintiff in his suit had sought declaration that letter canceling contract and demanding amount as damages be declared illegal, null and void ‑‑‑ Plaintiff had fully proved that goods supplied were according to sample and specification and defendants also could not produce evidence to show that goods were not in accordance with sample and specification‑‑‑In absence of any cogent reasons defendants could not cancel contract at the risk and cost of plaintiff merely on basis of inspection note which otherwise was not tenable and defect, if any, in goods was also rectifiable.

(b) Sale of Goods Act (III of 1930)‑‑‑

‑‑‑‑Ss. 17, 57 & 58‑‑‑Cancellation of contract‑‑‑Damages, demand for‑‑‑Where goods were ordered to be supplied in particular brand and names and were supplied accordingly, but contract was cancelled by purchasers without any cogent reasons, demand of damages from supplier of goods would not be lawful when after cancellation of contract purchasers proceeded to purchase goods of different name and brand from market at three times higher price.

(c) Specific Relief Act (1 of 1877)‑‑‑

‑‑‑‑Ss. 42, 54 & 56(d)‑‑‑Suit for declaration and permanent injunction‑‑‑Bar of suit‑‑‑Suit was dismissed by Trial Court observing that relief prayed for in the suit constituted interference with working of Federal Government‑‑‑Observation was without any basis as plaintiff in the suit had sought injunction restraining defendants from recovering suit amount wrongly being claimed by defendants as damages for breach of contract and there was no question of any interference in working of Government‑‑­Judgments and decrees of Courts below which were result of complete misreading rather non‑reading of evidence on record, were set aside by High Court.

Sh. Zia Ullah for Petitioner.

Javed Sarfraz, Standing Counsel for Pakistan.

Date of hearing: 13th November, 2001.

2002 C L D 821

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs RIZCO CARPETS (PVT.) LTD. and 3 others‑‑‑Appellants

Versus

NATIONAL BANK OF PAKISTAN and another‑‑‑Respondents

E.F.A. No.276 of 2001, heard on 21st February, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 18(6) & 21‑‑‑Civil Procedure Code (V of 1908), S.47‑‑­Execution‑‑‑Diminution in value of pledged stock ‑‑­Determination‑‑‑Power of Executing Court‑‑‑Judgment‑debtor filed application for dismissal of execution petition on the ground that due to failure of the decree‑holder, the stock pledged by the judgment‑debtor had been destroyed and rendered worthless‑‑‑Executing Court dismissed the application on the ground that the claim made by the judgment‑debtor was yet to be determined ‑‑‑Validity‑‑­Contention . between the parties had to be determined by the Executing Court‑‑‑If there were factual matters to be decided for the purpose of such determination, under S.47, C.P.C. the same also had to be decided in execution proceedings‑‑‑Order passed by the Executing Court was set aside and the application was revived accordingly.

Jawaid Shaukat Malik for Appellants.

Naseem Ahmad Khan for Respondents.

Date of hearing: 21st February, 2002.

2002 C L D 853

[Lahore]

Before Jawwad S. Khawaja and

Abdul Shakoor Paracha, JJ

MUSLIM COMMERCIAL BANK LTD. ‑‑‑Appellant

Versus

HABIB & CO. and another‑‑ ‑Respondents

First Appeal from Order No. 71 of 1994, heard on 11th October, 2001.

Banking Companies (Recovery of Loans) Ordnance (XIX of 1979)‑‑‑

‑‑‑‑S.6(2)(2) (as amended by Banking Companies (Recovery of Loans) (Amendment) Ordinance (II of 1983) 8a 8(3))‑‑­Execution of decree‑‑‑Dismissal of execution application by Banking Court on the ground that the judgment and decree had been passed by Civil Court after coming into force of Ordinance (II of 1983)‑‑,Validity‑‑‑Where the judgment and decree was not challenged by the judgment‑debtor, the same had become final qua him and a past and closed transaction‑‑‑View taken by the High Court in the case titled Habib Bank Limited v. Qadari Traders reported as 1998 PCTLR 923 was fully applicable to the case‑‑‑Order passed by the Banking Court wag set aside as a result whereof, the execution petition filed 6y the Bank would be deemed to be pending before the Banking Court‑‑‑Appeal was allowed in circumstances.

Habib Bank Limited v. Messrs Qadri Traders and another 1998 PCTLR 923 ref.

Muhammad Qamar‑ua‑Zaman for Appellant.

Nemo for Respondents.

Date of hearing: 11th October, 2001.

2002 C L D 867

[Lahore]

Before Jawwad S. Khawaja and

Abdul Shakoor Paracha, JJ

ALBARAKA ISLAMIC BANK B.S.C. (E.C.)

through Senior Vice‑President‑‑‑Appellant

Versus

ANSARI TRADE LINKERS (PVT.)

LTD. and 6 others‑‑‑Respondents

E.F.A. No.34 of 2002, heard on 12th March, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑‑

‑‑‑‑S.22‑‑‑Appeal‑‑‑Judgment without reasoning‑‑‑Banking Court had given no reasons for its finding that the action of decree‑holder Bank was not fair‑‑‑Validity‑‑‑Where no basis was given to support the conclusion reached by the Banking Court, the order passed by the Court was set aside‑‑‑Appeal was allowed in circumstances.

Khalid Salim for Appellant. Nemo for Respondents Date of hearing: 12th March, 2002.

2002 C L D 868

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs CRYSTAL ENTERPRISES

and 6 others‑‑‑Appellants

Versus

PLATINUM COMMERCIAL BANK LTD.

and 2 others through

General Attorney‑‑‑Respondents

Regular First Appeal No.275 of 1998, heard on 21st February, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Contract Act (IX of 1872), S.176‑‑‑Suit for recovery of Bank loan‑‑‑Retaining the pledged goods as collateral security ‑‑‑Validity‑‑‑Pledgee Bank‑ finder the provisions of Contract Act, 1872, was entitled to either sell the goods prior to the filing of the suit or to bale its suit and to retain the pledged goods as collateral security‑‑‑Where the Bank exercised the second option, the Bt7nk had rightly retained the goods in its custody as collateral-security.

(b) Banking Companies (Recovery of Loans, Advances, . Credits and Finances) Act (XV of 1997)‑‑

‑‑‑‑‑Ss.9 8s 18‑‑‑Suit for recovery of Bank loan‑‑‑Pledged good, account for‑‑‑Objection raised by the defendants was that the Bank under ,the law was required to account for the goods in its custody ‑‑‑Validity‑‑‑Such matter could only arise in the execution proceedings, when the collateral security was realized in such proceedings through sale of the same‑‑­Objection was repelled accordingly.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 4997)‑‑‑

‑‑‑‑Ss. 9 & 10‑‑‑Suit for recovery of Bank loan‑‑‑Application for leave to appear and defend the suit‑‑‑Serious and bona fide dispute‑‑‑Plea raised by the defendant was that the different business entities were jointed in the proceedings by the Bank‑‑‑Defendants were partners in one concern while they were proprietors of the other. concerns‑‑‑Defendants being owners of the business 6oncerns had executed personal guarantees to secure loan, facilities advanced by the Bank‑‑‑Banking Court declined leave to appear and defend the suit‑‑‑Validity‑‑‑Where the guarantees were not disputed by the defendants, they where liable for the Bank's claim and had not been able to show any credible, bona fide or substantial defence to the so it filed by the bank‑‑­ Banking Court had rightly dismissed the application for leave to appear and defend the suit and the suit was rightly decreed in favour of the Bank‑‑‑Appeal was dismissed in circumstances.

M.M. Alam for Appellants.

Noor Muhammad Khan Chandia for Respondents.

Date of hearing: 21st February, 2002.

2002 C L D 875

[Lahore]

Before Jawwad S. Khawaja and

Abdul Shakoor Paracha, JJ

UNITED BANK LTD. through Attorneys‑‑‑Appellant

Versus

Messrs HOME AIDS CORPORATION

and 6 others through

Managing Director‑‑‑Respondents

First Appeal from Order No.132 of 1995, decided on 4th March, 2002.

Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.IX, R.8 & O.XXII, R.1‑‑‑Dismissal of suit‑‑‑Failure to bring on record legal representative of deceased defendant‑­Despite repeated opportunities, the Bank failed to bring on record the legal representatives even the costs awarded to the Bank was not paid‑‑‑Effect‑‑‑Banking Court had rightly dismissed the suit under O.IX, R.8, C.P.C.‑‑‑Order passed by the Banking Court was maintained in circumstances.

M. Naeem Sehgal for Appellant.

Mirza Naseer Ahmed for Respondents.

Sabir Mahmood Bhatti for Respondent No.6.

2002 C L D 876

[Lahore]

Before Jawwad S. Khawaja

and Abdul Shakoor Paracha, JJ

KAMRAN ZALI‑‑‑Appellant

Versus

Messrs UNION BANK LIMITED

and 4 others through Manager‑‑‑Respondents

Regular First Appeal No.478 of 2001, heard on 5th March, 2002.

Banking Companies (Recovery of Loans, Advances; Credits and Finances) Act (%Y of 1997)‑‑‑

‑‑‑‑S.10‑‑‑Leave to appear and defend the suit‑‑‑Bona fide and serious defence‑‑‑Defendant alleged that neither he had executed any guarantee in favour of the Bank, nor he was connected with the company as a shareholder or as a Director‑‑‑Effect‑‑‑Defendant had disclosed a bona fide and serious defence to the suit filed by the Bank‑‑‑High Court allowed the leave to appear and defend the suit in circumstances.

Syed Haider Ali Shah for Appellant.

Muhammad Khalid Mehmood Khan for Respondents.

Date of hearing: 5th March, 2002.

2002 C L D 915

[Lahore]

Before Syed Jamshed Ali and Syed Zahid Hussain, JJ

AGRICULTURE DEVELOPMENT BANK OF PAKISTAN through the Manager‑‑‑Appellant

versus

SABTAIN SHAH‑‑‑Respondent

Regular First Appeal No.78 of 1995, heard on 11th March, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑Ss. 6, 9 & 11‑‑‑Suit for recovery of Rs.21,56,166 alongwith liquidated damages, expenses and costs‑‑­Defendant offered to pay decretal amount in instalments, in case he was exempted from paying insurance and cushion charges, costs of suit and liquidated damages‑‑‑Bank did not agree to waive such charges and payment of decretal amount in instalments‑‑‑Banking Tribunal decreed the suit in the sum of Rs.16, 76, 806 including mark‑up up to date of suit in 12 quarterly instalments‑‑‑Contention of Bank was that without its consent, defendant could not be permitted to pay decretal amount in instalments; Bank was entitled to mark‑up from the date of suit till date of decision; and that Banking Tribunal had declined the insurance and cushion charges, liquidated damages and costs of suit on the assumption that matter was being disposed of with the consent of parties‑‑‑Validity‑‑‑Since no evidence had been recorded in the case it was not possible to finally determine the claim of Bank‑‑‑Appellate Court allowed the appeal, set aside the impugned judgment and decree and remanded the case to Banking Court for its fresh decision in accordance with law.

Mian Nasir Mehmood for Appellant.

M. Aslam Riaz for Respondents.

Date of hearing: 11th March, 2002.

2002 C L D 923

[Lahore]

Before Ch. Ijaz Ahmad, J

Mian MUHAMMAD LATIF and 2 others‑‑‑Petitioners

versus

MUHAMMAD ASLAM NAGI, CHAIRMAN, BANKING TRIBUNAL, LAHORE and another‑‑‑Respondents

Writ Petition No.23160 of 1996, decided on 4th March, 2002.

(a) Executing Court‑‑‑

‑‑‑‑Executing Court, interference in decree‑‑‑Validity‑‑‑When decree remains intact then the Executing Court cannot go beyond the decree.

Messrs Conforce Limited v. Messrs Rafique Industries Ltd. and others PLD 1989 SC 136 ref.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art.189‑‑‑Judgment passed by Supreme Court ‑‑‑Effect‑‑­Such judgment has prospective effect and not retrospective effect and past and closed transactions cannot be re­opened.

Muhammad Yousuf v. The Chief Settlement and Rehabilitation Commissioner, Pakistan, Lahore PLD 1968 SC 101 ref.

(c) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art.l99‑‑‑Constitutional petition‑‑‑Past and closed transaction‑‑‑Jurisdiction of Executing Court‑‑‑Suit for recovery of Bank loan was decreed in favour of the Bank and the borrower did not assail the decree‑‑‑During the execution proceedings the borrower assailed the decree passed by the Banking Court on the basis of judgment titled M/s. Chenab Cement Product (Put.) Ltd. and others v. Banking Tribunal, Lahore and others reported as PLD 1996 Lah. 672‑‑‑Judgment so relied upon by the borrower was considered by Supreme Court in case titled M/s. Tri Star Polyester Limited v. Citibank reported as 2001 SCMR 410 and the Supreme Court saved the decrees passed by the Banking Courts before the judgment relied upon by the borrower and the aggrieved persons did not file appeals in time under the provisions of banking laws‑‑‑Effect‑‑‑High Court declined to exercise discretion in favour of the petitioner‑‑‑Constitutional petition was disposed of accordingly.

Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672; Messrs Tri Star Polyester Limited v. Citibank 2001 SCMR 410; Nawab Syed Raunaq Ali's case PLD 1973 SC 236 and Rana Muhammad Arshad's case 1998 SCMR 1468 ref.

Ch. Muhammad Bukhsh for Petitioner.

2002 C L D 943

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

IFTIKHAR AHMAD SHAFFI ‑‑‑Appellant

versus

LAHORE STOCK EXCHANGE (GUARANTEE) LTD. and 31 others‑‑‑Respondents

Regular First Appeal No.306 of 2000, heard on 28th February, 2002.

(a) Specific Relief Act (I of 1877)‑‑‑

‑‑‑S. 39, illustration (d)‑‑‑Cancellation of instrument‑‑‑Bill of exchange or cheque issued in consideration of agreement between drawer and payee‑‑‑Validity‑‑‑Even though a bill of exchange or cheque is meant to be a self‑contained instrument creating rights and obligations between drawer and payee even then the same can be cancelled where such instrument is issued in consideration of an agreement between drawer and payee and the payee has been in material breach of such agreement ‑‑‑Voidability of the bill or cheque can result from a breach of agreement even though the instrument has been issued by the drawer through exercise of his free‑will‑‑‑Such instrument can be cancelled in permissible circumstances.

(b) Specific Relief Act (I of 1877)‑‑‑

‑‑‑S. 39‑‑‑Civil Procedure Code (V of 1908), O. VII, R.11‑‑‑Plaint, rejection of‑‑‑Absence of cause of action‑‑­Cancellation of two cheques was sought by the plaintiff on the ground that the defendant, failed to perform their part of agreement on the basis of which the disputed cheques were issued‑‑‑Trial Court rejected the plaint under O. VII, R. 11, C.P.C. for want of cause of action ‑‑‑Validity‑‑‑Averment made in the plaint showed that the plaintiff was entitled to claim cancellation of the cheques as the same fell within the ambit of illustration (d) to S.39 of the Specific Relief Act, 1877‑‑‑Plaint which disclosed a cause of action, could not have been rejected by the Trial Court under O. VII, R. 11, C.P.C.‑‑‑Order passed by the Trial Court was set aside and the case was remanded to the Trial Court for deciding the suit after proper trial.

Muneeb Akhtar for Appellant.

Syed Ali Zafar, Haider Zaman Qureshi and Abid Aziz Sheikh for Respondents.

Mian Qamar‑uz‑Zaman for M.C.B.

Dates of hearing: 26th, 27th and 28th February, 2002.

2002 C L D 950

[Lahore]

Before Maulvi Anwarul Haq and Mian Hamid Farooq, JJ

AMAN ULLAH KHAN---Appellant

versus

NATIONAL BANK OF PAKISTAN and others---Respondents

Regular First Appeal. No.84 of 1994, decided on 19th March, 2002.

Banking Tribunals Ordinance (LVIII of 1984)---

---S.9---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.5---Appeal---Principle laid down by Full Bench of Lahore High Court in case titled Messrs Chenab Cement Product (Pvt.) Limited and others v. Banking Tribunal, Lahore and others reported as PLD 1996 Lah. 672----Applicability---Judgment and decree was passed by the Banking Tribunal before the date rendering of the judgment in Chenab Cement Product's case and the same was challenged through the filing of present appeal--­Contention of the appellant was that the judgment subject of the present appeal was liable to be set aside as the same was not saved by the said judgment---Validity---Where the appeal was filed according to the provisions of S.9 of the Banking Tribunals Ordinance, 1984 the decree under appeal .was not saved, and did not fall within the terms `past and closed cases' within the meaning and scope of the judgment in the Messrs Chenab Cement Product's case---Judgment and decree passed by the Banking Tribunal was set aside and the suit for the recovery of Bank loan would be deemed to -be pending before the newly-constituted Banking Courts established under S.5 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal was allowed in circumstances.

Messrs Chenab Cement Product Private Limited and others v. Banking Tribunal, Lahore and others PLD 1996 Lah.672 fol.

Nasar Ahmad for Appellant.

Iftikhar Ullah Malik for the Bank.

Asghar Hameed Bhutta for Respondents Nos.5-A to 5-J.

Date of hearing: 28th February, 2002.

2002 C L D 953

[Lahore]

Before Ch. Ijaz Ahmad, J

ZAKARIYA and 6 others‑‑‑Petitioners

versus

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN and 3 others‑‑‑Respondents

Writ Petition No.9660 of 2000, heard on 25th February, 2002.

(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art.l99‑‑‑Constitutional petition ‑‑‑Maintainability‑‑‑Appre­hensions of petitioner‑‑‑Petition is not maintainable on mere apprehensions.

National Re‑rolling Steel Mills' case 1968 SCMR 317(2) rel.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑S.6(5)‑‑‑Constitution of Pakistan (1973), Art. l99‑‑­Constitutional petition‑‑‑Petitioners not coming to Court with clean hands‑‑‑Concealing of material facts‑‑‑Effect‑‑‑Ex parte judgment and decree was passed against the petitioners by the Banking Tribunal‑‑‑Petitioner's application under S.6(5) of the Banking Tribunals Ordinance, 1984, for setting aside the ex parte judgment and decree was dismissed by the Tribunal‑‑‑Petitioners without disclosing the fact of dismissal of the application, assailed the ex parte judgment and decree before High Court in Constitutional petition‑‑­Validity‑‑‑He who seeks equity must come with clean hands‑‑‑Where the petitioners did not approach the High Court with clean hands by concealing the material facts, High Court declined the exercise of discretion in their favour‑‑‑Petition was dismissed in circumstances.

Abdul Rashid v. Pakistan and others 1969 SCMR 141; Principal, K.E.M.C., Lahore v. Ghulam Mustafa and others 1983 SCMR 196; Rana Muhammad Arshad v. Additional Commissioner (Revenue), Multan Division and others 1998 SCMR 1462 and Nawab Syed Raunaq Ali v. Chief Settlement Commissioner PLD 1973 SC 236 rel.

(c) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S. 6(3)‑‑‑Civil Procedure Code (V of 1908), O. V, R.20‑­Service through press publication‑‑‑Grievance of the defendants was that, they were residing in the Province of Sindh and the newspapers in which the proclamation was made did not have wide circulation in the Province‑‑­Validity‑‑‑Loan was secured by the original loanee in the Province of Punjab, the land was also situated in the Province of Punjab, therefore, the Banking Tribunal was justified to get the service effected through proclamation in the newspapers having wide circulation in the Province of Punjab‑‑‑Service was effective in circumstances.

Mst. Afzal Begum v. Y.M.C.A. PLD 1979 SC 18; Muhammad Ishaque v. Chief Administrator Auqaf PLD 1977 SC 639 and Brig. (Retd.) Mazhar‑ul‑Haq v. Messrs M.C.B. Limited PLD 1993 Lah. 706 distinguished.

Messrs Ahmad Auto's case PLD 1990 SC 497 rel.

(d) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S. 6(3)‑‑‑Civil Procedure Code (V of 1908), O. V, R.20‑‑­Mode of service‑‑‑Provisions of O. V, R.20, C.P.C.‑‑­Applicability‑‑‑Special law excludes the general law‑‑‑Three modes of service having been prescribed by the Banking Tribunals Ordinance, 1984, provisions of the Banking Tribunals Ordinance, thus excluded the provisions of General law‑‑‑Provisions of O.VI, R.20, C.P.C. were not applicable in circumstances.

Zia‑ur‑Rehman's case PLD 1973 SC 49; United Bank Ltd., Karachi v. Messrs Kashmir Corner 1988 CLC 1068 and Messrs Allied Bank of Pakistan Ltd. v. Messrs Tahir Traders and 8 others PLD 1986 Kar.369 rel.

(e) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6(3)‑‑‑Service of defendant‑‑‑Scope‑‑‑Three modes having been prescribed under the Banking laws, service by any one of the three modes including publication would constitute a good service.

Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 rel.

(f) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss.6(5) & 9‑‑‑Constitution of Pakistan (1973), Art.199‑‑­Constitutional petition‑‑‑Alternate remedy available not availed‑‑‑Failure to file appeal‑‑‑Application for setting aside ex parte decree passed against the petitioners was dismissed by the Banking Tribunal‑‑‑Petitioners instead of fling appeal assailed the order before High Court in Constitutional petition‑‑‑Validity‑‑‑Where the petitioners had alternate remedy to file appeal before High Court under the provisions of the Banking laws, the Constitutional petition was not maintainable‑‑‑Petition was dismissed in circumstances.

Muhammad Ismail's case PLD 1996 SC 246 rel.

Messrs S.M. Ilyas & Sons Ltd. v. Monopoly Control Authority, Islamabad and another PLD 1976 Lah. 834; Fazal Bibi and others v. Abdul Haq and others 1991 CLC 291; Haji Muhammad Islam v. Muhammad Rafique and 2 others 1991 CLCL ,84; Messrs Dawood Yamaha Ltd. v. Government of Balochistan and 3 others PLD 1986 Quetta 148; Government of Sindh v. Raeesa Farooq and 5 others 1994 SCMR 1283; Messrs Chenab Cement Product (Pvt.) Ltd. v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672; Islamia University Bahawalpur v. Dr. Muhammad Khan Malik PLD 1993 Lah. 141; Abdul Rahim and 2 others v. Messrs United Bank Ltd. PLD 1997 Kar.62; Headmaster, Government Zia‑ul‑Aloom High School, Raja Bazar, Rawalpindi and others v. Chairman, Evacuee Trust Property Board and others 1996 CLC 1785; Abdul Wahid v. Banking Tribunal, Bahawalpur and others 1995 MLD 1960 and Messrs Tank Steel and Re‑rolling Mills (Pvt.) Ltd., Dera Ismail Khan and others v. Federation of Pakistan and others PLD 1996 SC 77 ref.

Muhammad Sharif Chuhan for Petitioners.

Waqar Ahmad for Respondent No.3.

Malik Karamat Ali Awan for Respondent‑Bank.

Date of hearing: 25th February, 2002.

2002 C L D 962

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Al‑Haj Chaudhry MUHAMMAD BASHIR‑ ‑‑Appellant

versus

CITIBANK N.A. and 2 others‑‑‑Respondents

First Appeal from Orders Nos.208 and 361 of 2001, heard on 16th January, 2002.

(a) Civil Procedure Code (V of 1908)--

---O. XXI, R. 89(1) [as amended by Lahore High Court]---Sale of property in execution of decree—Setting aside of—Acquiring title in the property either prior or after the auction sale‑‑‑Remedy‑‑‑Any person who acquires title in property auctioned in execution of decree prior to the auction sale, such person can make an application under O.XXI, R.89, C.P.C. to have such sale set aside‑‑‑Effect of the amendment made in O.XXI, R. 89(1), C.P.C. by Lahore High Court is that the right to have an auction sale set aside has also been conferred on those persons who are vested with an interest, in the auctioned property at the time of the making of an application under O.XXI, R. 89, C.P.C.‑‑‑Such interest may be acquired by an applicant even subsequent to the auction sale.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.19‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.23(1)‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr. 89 & 90‑‑‑Sale of property in execution of decree‑‑‑Objector acquiring title in property under sale prior to the date of auction sale‑‑‑Locus standi‑‑‑Banking Court entertained objection raised by such person‑‑­Validity‑‑‑Such purchaser of the property had locus standi to maintain objection petition either under R. 89 or R.90 of O.XXl, C.P.C.‑‑‑Banking Court, as such, far from being functus officio, was the competent forum having jurisdiction to decide the objection petition filed by such purchaser‑‑‑Purchasers of the property could maintain objection petitions to challenge the auction sale confirmed by the Banking Court in favour of the auction purchaser.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑S.19(i)‑‑‑Civil Procedure Code (V of 1908), O.XXI, R.10‑‑­Transfer of Property Act (IV of 1882), S.52‑‑‑Sale of property in execution of decree‑‑‑Acquiring title in mortgaged property‑‑‑Effect‑‑‑Disputed property was mortgaged in favour of the Bank and decree for the sale of the same had been passed in favour of the Bank‑‑‑Title of the property was conveyed by the mortgagor in favour of some other person during the pendency of proceedings before the Court‑‑‑Contention of the Bank was that the mortgage during pendency of proceedings was illegal‑‑‑Validity‑‑‑Title in such property could have been conveyed by the mortgagor (who was the judgment‑debtor in the present proceedings) during the pendency of the present proceedings‑‑‑Conveyance of the mortgaged property subject to the mortgage, was not prohibited by the general law.

Ajodheya Lal Mahaseth v. Mahanth Brij Kishore Dass AIR 1940 Pat. 615 and Banque Indosuez v. Muhammad Saleem 1987 CLC 795 ref.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑S. 19(i)‑‑‑Sale of mortgaged property‑‑‑Validity‑‑‑Sale of a mortgaged property in violation of the terms of the mortgage and delivery of possession of mortgaged property to a purchaser, was an offence under the provisions of S. 19(i) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Such statutory provision did not declare the sale itself to be void as it merely visualized penal consequences for the mortgagor and that too where the sale made by him was contrary to the terms of the mortgage‑‑‑Where the sales were made by the mortgagor/judgment‑debtor in favour of the purchasers, such sales were not affected by the provisions of S.19 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.

(e) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑S. 23(1)‑‑‑Sale of mortgaged property prior to promulgation of the Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Effect‑‑‑Where title in the disputed property had been acquired by the purchasers prior to the change in the substantive law brought about by the Financial Institutions (Recovery of Finances) Ordinance, 2001, such sale of the disputed property in favour of the purchasers was not hit by S.23(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

(f) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑O. XXI, R. 89‑‑‑Sale of property in execution of decree‑‑­Objection by a person acquiring interest in property under sale on the basis of agreement‑‑‑Validity‑‑‑Objection on the basis of O.XXI of R. 89, C.P.C. could only be made where objector had interest in the property auctioned‑‑‑Objector had relied merely on the investment agreement, entered into with the judgment‑debtor, such agreement would not create any title or interest in the disputed property in favour of the objector‑‑‑Objection petition was not maintainable in circumstances.

(g) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑O.XXI, Rr. 89 & 90‑‑‑Setting aside of sale of property in execution of decree‑‑‑Interest in the property under sale as mentioned in the provisions of O. XXI, Rr. 89 & 90, C.P.C.‑‑­Distinction‑‑‑In order to vest a person with locus standi to move an application under O.XXI, R. 89, C.P.C., a subsisting interest is required in the auctioned property‑‑‑Interest in the property sold is not necessarily required under O.XXI, R. 90, C.P.C.‑‑‑Its requirement merely is that the objector should be a person whose interests are affected by the sale‑‑­Difference in the language of Rr. 89 & 90 of O.XXI, C.P.C. has been judicially interpreted as being material‑‑‑Interest involved, referred to in O.XXI, R.90 C.P.C., need not to be an interest in the property as such but can be an interest which is otherwise adversely affected by an auction sale.

Narayanan v. Pappayi AIR 1927 Mad. 783 and Dhirendra Narth Roy; v. Kamini Kumar Pal AIR 1924 Cal. 786 ref.

(h) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑S.23(1)‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.19(i)‑‑­ Civil Procedure Code (V of 1908), O. XXI, Rr. 89 & 90‑‑‑Execution of decree‑‑‑Sale of mortgaged property‑‑­ Objection‑‑‑Interest in the mortgaged property‑‑‑On the basis of an agreement the objector made investment in the mortgaged property and possession of the property was handed over to the objector by the judgment‑debtor/borrower‑‑‑Banking Court in execution of decree sold the property by auction and objection petition assailing the sale was dismissed by the Banking Court‑‑‑Contention of the Bank was that the objector had no locus standi to file the objection petition on the basis of mere an agreement with the judgment‑debtor/borrower‑‑‑Validity‑‑‑Agreement relied upon by the objector was not a mere agreement to sell as observed by the Banking Court but was a contract which according to the objector had been materially acted upon‑‑­Objector had not only been put in possession of the disputed property but he had also raised construction thereon after investing a substantial sum of money at the site as a real estate developer‑‑‑Grievance of the objector in the present case, was that if the auction sale remained in force, his entire investment would be lost‑‑‑High Court with the assistance of the counsel for the parties had conservatively estimated the value of the disputed property at Rs.80,00,000 approximately and the auction sale, which the objector desired to challenge, was for a sum of Rs.12,30,000 in favour of the real brother of the judgment­-debtor/borrower‑‑‑Objector, in the circumstances of the present case, had locus standi to maintain objection petition under O.XXI, R.90, C.P.C.‑‑‑Order passed by the Banking Court was set aside and the objection petition was remanded to the Banking Court for decision on merits‑‑‑High Court directed to the Banking Court to decide the matter on the basis of the State law at the time when the various parties came to be vested with substantive rights in the disputed property‑‑‑High Court desired that changes be made in existing laws in order to ensure protection of bona fide interests of innocent parties‑‑‑Property rights of the objector who was a bona fide purchaser of property for valuable consideration in the present case, had been jeopardized very easily because there were no effective means available to him to make a title search and to avoid the nightmarish consequences which the objector had faced‑‑‑Appeal was allowed accordingly.

Mian Masood Javed and Tariq Rashid Ch. for Appellant.

Shahid Ikram Siddique and Ashar Elahi for the Auction‑purchaser.

Rana Ghulam Sarwar for Applicant (in C.M. No.5‑C of 2001).

Muhammad Ramzan Qadri for Applicant (in C.M. No.6‑C of 2001).

Tariq Kamal Qazi assisted by Imran Aziz Khan: Amicus curiae.

Date of hearing: 16th January, 2002.

2002 C L D 978

[Lahore]

Before Muhammad Sair Ali, J

HALA SPINNING LIMITED‑‑‑Plaintiff

versus

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Defendant

Civil Original Suit No. 116 of 2000, decided on 27th February, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.402‑‑‑Company being wound‑up‑‑‑Status‑‑‑Filing of suit by ex‑Management‑‑‑Supreme Court vide its interim order suspended the winding‑up order passed by the Companies Judge‑‑‑Ex‑Management, without permission of the Court filed the suit‑‑‑Contention of the defendant was that the suit was not maintainable as the same had to be filed by the official liquidators appointed by the Companies Judge‑‑‑Validity‑‑‑Any suit filed by a Company after winding7up order was incompetent, if the same had been instituted by the ex‑Chief Executive or any Member of the ex­Management‑‑‑Such Management of the Company by automatic effect of winding‑up order had lost the status as management and also the authority to represent the Company in any manner‑‑‑Interim suspension order of the Supreme Court in essence only suspended the powers and stayed the future acts of the joint official liquidators under winding‑up process‑‑‑Such order of the Supreme Court had neither removed the official liquidators nor did it direct the revival of complete powers of the ex‑Management ‑‑‑Ex­Management or ex‑Chief Executive had no authority to file the suit‑‑‑High Court did not debar the joint official liquidators to refile a competent and valid suit in accordance with law‑‑‑Suit was dismissed in circumstances.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.402‑‑‑Winding‑up of Company‑‑‑Official Liquidator‑‑­Status‑‑‑From the date of winding‑up of a Company, the Official Liquidator gets substituted in place of the Directors, Chief Executive or Managing Agent, as the case may be.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.402‑‑‑Winding‑up order‑‑‑Suspension of such order by Supreme Court‑‑‑Authority of ex‑Management ‑‑‑Scope‑‑­Interim order of suspension does not obliterate and set aside the order of winding‑up‑‑‑Suspension of the order may, through its effect, allow the ex‑Management to exercise only day, to day operation of the Company for the purpose of facility but does not allow the Management to commit, contract out, liquidate, frustrate or alienate interests, assets and rights or liabilities of a Public Limited Company‑‑‑If any such action is required to be taken, the same can only be done through seeking permission of the Appellate Court like for filing of a case or entering into long time contractual arrangement or transaction‑‑‑If suspension of the operation of winding‑up order is interpreted to mean that all powers of the ex-Management and the ex-Chief Executive are restored in such a case ex-management/ex-Chief Executive and assume the powers of disposing of the assets of the Company under winding up as well or to terminate effect or commit the interest of the Company in a manner prejudicial to its existence and substratum---Interim order of suspension of the operation of winding up order cannot be taken to mean restoration of all embracing powers of the ex-Management, ex‑Chief Executive or ex‑Board of Directors.

(d) Companies Ordinance (XLVII of 1984)‑‑­

‑‑‑‑Preamble‑‑‑Object and scope of Companies Ordinance, 1984‑‑‑Entire scheme of the Companies Ordinance, 1984, is meant to protect the interest of the creditors and share­ holders and not to put their interest at risk by interim arrangements.

(e) Companies Ordinance (XLVII of 1984)‑‑­

‑‑‑‑S.402‑‑‑Winding‑up of order‑‑‑Suspension of such order by Supreme Court‑‑‑Setting aside of petition by Supreme Court‑‑‑Order of winding‑up of the Company was suspended by the Supreme Court vide interim order and later on the petition was dismissed with a result that the interim suspension was set aside‑‑‑Effect‑‑‑By dismissal of the petition by Supreme Court, the order of winding‑up had taken effect from the date the same was passed to commence the process of winding‑up of the Company.

Nauman Akram Raja for Plaintiff.

Pervaiz Akhtar Malik for Defendants.

2002 C L D 983

[Lahore]

Before Maulvi Anwarul Haq and Pervez Ahmad, JJ

Messrs HOTEL KASHMIR PALACE (PVT.) LIMITED through Major (Retd.) Javed‑ul‑Hassan and 2 others‑‑‑Appellants

versus

Messrs FIRST ELITE CAPITAL MODARABA‑‑‑Respondent

Regular First Appeal No.415 of 1998, heard on 8th April, 2002.

Modaraba Companies and Modarabas (Floatation and Control) Ordinance (XXXI of 1980)‑‑‑

‑‑‑S. 30‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.10‑‑‑Recovery of Musharka facilities‑‑‑Leave to appear and defend the suit‑‑­Conditional order‑‑‑Bona fide dispute‑‑‑Financial institution admitted that the entire principal amount had been paid by the borrower besides another sum of Rs.1 million deposited by the borrower‑‑‑Contention of the borrower was that the Banking Court had not taken into account the agreements between the parties whereby the financial institution was to share the loss in the business‑‑‑Validity‑‑‑Contention of the borrower did constitute substantial question to be resolved by the Banking Court‑‑‑High Court granted leave to defend the suit with the condition of depositing Rs.3 million within one month of the passing of the order‑‑‑High Court directed that in case of failure to deposit the amount, the leave granting order would be recalled‑‑‑Appeal was allowed accordingly.

Malik Muhammad Nawaz for Appellants.

Haq Nawaz Chattha for Respondent.

Date of hearing: 8th April, 2002.

2002 C L D 986

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

CHAUDHRY SPRAY CENTRE through Sole Proprietor Ch. Saifullah and 5 others‑‑‑Appellants

versus

ALLIED BANK OF PAKISTAN through Attorney/ Manager‑‑‑Respondent

Regular First Appeal No. 115 of 2002, decided on 10th April, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑S. 10‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.10(12)‑‑‑Application for leave to appear and defend‑‑‑Failure to file application under Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Suit for recovery of Bank loan was filed against the defendants who filed application for leave to appear and defend the suit under S.10 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑After filing of the application Financial Institutions (Recovery of Finances) Ordinance, 2001, was promulgated and the defendants did not file new application under the said law‑‑‑Banking Court without considering the contents of the application already filed by the defendants decreed the suit in favour of the plaintiff‑‑‑Validity‑‑‑Banking Court should have considered the contents of the earlier application and only if the Court had come to the conclusion that the same did not comply with the provisions of S.10(12) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, only then the Court could have dismissed the same‑‑‑Judgment and decree passed by the Banking Court was set aside and the case was remanded for decision afresh in circumstances.

M. Khalid Sajjad Khan for Appellants.

Mian Muhammad Iqbal for Respondent.

Date of hearing: 10th April, 2002.

2002 C L D 988

[Lahore]

Before Ch. Ijaz Ahmad and Syed Sakhi Hussain Bukhari, JJ

MUHAMMAD SHAHBAZ through Legal Heirs and 5 others‑‑‑Appellants

versus

MUSLIM COMMERCIAL BANK LIMITED through its Attorney and another‑‑‑Respondents

Regular First Appeal No.248 of 2001, decided on 13th March, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑Ss. 10, 15 & 21‑‑‑Suit for recovery of loan amount by Bank‑‑‑Some defendants filed application for leave to defend the suit raising a plea that their property was not mortgaged, while other defendants being real beneficiaries did not file any such application‑‑‑Banking Court decreed the suit‑‑‑Validity‑‑‑Mortgage of property in question in favour of Bank was duly supported by documents‑‑­Application for leave to defend did not contain any document to show that property had not been mortgaged with Bank‑‑‑Real beneficiaries had not filed any application for leave to defend the suit, thus, Banking Court had no option except to .pass decree against beneficiaries as per law laid down by Supreme Court in case of Messrs Ahmad Autos (PLD 1990 SC 497)‑‑‑No illegality or infirmity was found in impugned judgment and decree‑‑‑Appeal was dismissed in circumstances.

Messrs Ahmad Autos v. Allied Bank of Pakistan PLD 1990 SC 497 rel.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XY of 1997)‑‑‑

‑‑‑S. 21(1)‑‑‑Limitation Act (IX of 1908), S.5‑‑‑Appeal‑‑­Limitation‑‑‑Delay, condonation of‑‑‑Appellants alongwith appeal filed an application for condonation of delay contending that after filing application for leave to defend the suit, they were under the impression that their names had been struck off from the arena of defendants by Banking Court; and they came to know about the decree after receiving notice from Executing Court ‑‑‑Validity‑‑­Decree was passed on 3‑10‑2000, whereas application for obtaining its certified copy was filed on 2‑4‑2001, when the same had already become time‑barred‑‑­Appellants had pursued the case throughout before Banking Court, thus, it was their duty and obligation to explain the delay of each day‑‑‑Appeal was dismissed being time­-barred.

Jawad Mehmood Pasha for Appellants.

Sheikh Ashiq Parvez for Respondents.

2002 C L D 991

[Lahore]

Before Mian Hamid Farooq, J

MUSLIM COMMERCIAL BANK LIMITED through Chief Manager and Principal Officer‑‑‑Petitioner

versus

JUDGE BANKING COURT NO.2, FAISALABAD and 8 others‑‑‑Respondents

Writ Petition No.3826 of 2002, decided on 11th March, 2002.

(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑Art. 199‑‑‑Constitutional petition‑‑‑Interlocutory orders‑‑‑Maintainability‑‑‑Interlocutory orders are not amenable to Constitutional jurisdiction, thus, Constitutional petitions against such orders cannot be entertained.

Bashir Ahmad v. Province of Punjab and others 1988 CLC 196.5; Malik Abbas Raza v. Government of Balochistan and others PLD 1968 Lah.163; Ghulam Hussain and another v. Malik Shahbaz Khan and another 1985 SCMR 1923; Muhammad Siddique Qazi v. Muhammad Ibrahim and another 1987 MLD 265 and Ghulam Muhammad and others v. Munir Ahmad Shah and others 1994 CLC 14 ref.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑Art.l99‑‑‑Interlocutory order‑‑‑Constitutional jurisdiction‑‑‑Scope‑‑‑High Court would not interfere in interlocutory order, where the same was neither passed in excess of jurisdiction nor suffering from want of jurisdiction.

(c) Constitution of Pakistan (1973)‑‑‑

‑‑‑Art. 199‑‑‑Constitutional jurisdiction‑‑‑Scope‑‑‑Exercise of discretionary powers‑‑‑High Court would be reluctant in interfering with orders passed by subordinate Court in exercise of its discretionary powers.

Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749 and Sh. Muhammad Ramzan v. Special Judge, Banking Court 1986 MLD 614 ref.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 10, 13 & 21‑‑‑Framing issues at the time of granting leave to defend the suit‑‑‑Duty of Banking Court‑‑‑Banking Court, after granting leave to defend and treating leave application as written statement, directed the parties to file proposed issues on adjourned date of hearing ‑‑‑Validity‑‑­Such course was contrary to provisions of S.10(10) of Financial Institutions (Recovery of Finances) Ordinance, 2001, which had enjoined upon Banking Court to frame issues in its order granting leave‑‑‑Adjourning suit to a future date for framing of issues was against the intent of law‑‑‑High Court directed Banking Court to strictly comply with provisions of S.13 of Financial Institutions (Recovery of Finances) Ordinance, 2001 and decide the suit within stipulated period of 90 days, even though it had to undertake day today proceedings.

(e) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 10, 13 & 22(6)‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S. 10‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition by Bank challenging order of Banking Court granting leave to respondents/ borrowers to defend the suit‑‑‑Maintainability‑‑‑Legislature in its own wisdom had made the order granting or rejecting an application for leave to defend the suit as non‑appealable by virtue of S.22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Allowing Constitutional petitions to be filed against such orders and that, too by financial institutions would tantamount to defeat the legislative intent and negate the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 having been promulgated for speedy disposal of cases relating to financial institutions and recovery of public money illegally withheld by some unscrupulous customers‑‑‑If the suit pending before Banking Court was finally decided against petitioner‑Bank, then the same would have a right of appeal under S.22(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, wherein all the grounds raised in the Constitutional petition would be available to Bank before appellate forum as impugned order would merge into final order and could be assailed before Appellate Court‑‑‑Impugned order had neither been passed in excess of jurisdiction nor was suffering from want of jurisdiction nor exercise of discretion by Banking Court in passing the same was not shown to be arbitrary, fanciful or against the recognized principles of law‑‑‑Leave to defend the suit had been granted to respondents on 31‑1‑2002, thus, Banking Court had to dispose of the suit on or before 30‑4‑2002, as per force of S.13 of Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑If Constitutional petition against such interlocutory order was allowed to be entertained, then the same would set at naught said provisions‑‑‑High Court dismissed the Constitutional petition being incompetent and not maintainable.

Writ Petition No.791 of 1999; Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165; Muhammad Iftikhar Mohmand v. Javed Muhammad and 3 others 1998 SCMR 328; Ms. Afshan Ahmad v. Messrs Habib Bank Limited and another 2002 CLD 137; Shaikh Gulzar Ali & Co. Ltd. and others v. Special Judge, Special Court of Banking and another 1991 SCMR 590; Crescent Factories Vegetable Ghee Mills and 5 others v. National Bank of Pakistan, District Courts Branch, Sahiwal and another PLD 1985 Lah. 150; Messrs Salman Mehmood Cotton Ginners, Kabirwala and 2 others v. Special Judge, Banking (II) and another PLD 1982 Lah. 353; Messrs Narumal Jetomal and 2 others v. Judge of the Special Court of Sindh and another 1983 CLC 2695; Khokhar Engineering Company and 2 others v. Habib Bank Limited 1986 MLD 2941 and Syed Ali Azhar Naqvi v. Government of Pakistan through Secretary, Ministry of Finance, Islamabad and 3 others PLD 1994 Kar.67 ref.

Raja Muhammad Akram for Petitioner.

2002 C L D 1001

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

NATIONAL BANK OF PAKISTAN through Attorney‑‑‑Appellant

versus

Haji FAQIR MUHAMMAD and 2 others‑‑‑Respondents

Regular First Appeals Nos. 106, 221, 266, 267, 194 and 201 of 1992 and 267 and 266 of 1993, heard on 12th March, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑Ss. 6 & 9‑‑‑Suit for recovery of finance by Bank‑‑­Liquidated damages, entitlement to‑‑‑Banking Tribunal while decreeing the suit refused to award liquidated damages to Bank‑‑‑Validity‑‑‑Liquidated damages could not be granted by Banking Tribunal as per reasons given in Allied Bank's case reported as 2001 MLD 1955‑‑‑High Court dismissed the appeal having no merits.

Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments and others 2001 MLD 1955 fol.

Syed Haider Ali Shah for Appellant.

Nemo for Respondents.

Date of hearing: 12th March, 2002.

2002 C L D 1002

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mst. SAMINA RIAZ‑‑‑Appellant

versus

PLATINUM COMMERCIAL BANK LIMITED through Manager‑‑‑Respondent

Regular First Appeal No.617 of 2001, heard on 26th March, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑Ss.10, 15 & 21‑‑‑Suit for recovery of loan by Bank‑‑­Banking Court decreed the suit against all defendants by observing that appellant‑defendant had not filed any application for leave to defend the suit‑‑‑Validity‑‑‑High Court after examining the original record found that appellant‑defendant had in fact filed such application, which was lying on record of Banking Court ‑‑‑Appellant­-defendant was, thus, entitled to be heard on such application‑‑‑High Court accepted the appeal and set aside the impugned judgment and decree to the extent of appellant‑defendant only with directions to Banking Court to decide said application within specified period after hearing the parties.

Jehanzeb Khan Bharwana for Appellant.

Noor Muhammad Khan Chandia for Respondent.

Date of hearing: 26th March, 2002.

2002 C L D 1004

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

NATIONAL BANK OF PAKISTAN through Zonal Head, City Zone, Lahore‑‑‑Appellant

versus

Messrs LIFE PAPER STORE through Partners and 7 others‑‑‑Respondents

Regular First Appeal No.76 of 1994, decided on 12th March, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑Ss. 6 & 9‑‑‑Liquidated damages and mark‑up, entitlement to‑‑‑Banking Tribunal decreed the suit, but did not award liquidated damages and mark‑up to the Bank for cushion period‑‑‑Validity‑‑‑Liquidated damages could not be granted by Banking Tribunal as per reasons given in Allied Bank's case reported as 2001 MLD 1955‑‑‑Mark‑up for 210 days (cushion period) was added in the statement of accounts appended with plaint, which had been erroneously and illegally disallowed by Banking Tribunal, though it was bound under law to award mark‑up to Bank for such period‑‑‑High Court accepted the appeal and modified the impugned judgment and decree by awarding mark‑up to Bank for cushion period.

Allied Bank of Pakistan, Faisalabad v. Messrs Aisha Garments and others 2001 MLD 1955 rel.

Syed Haider Ali Shah for Appellant.

Nemo for Respondents.

2002 C L D 1010

[Lahore]

Before Jawwad S. Khawaja, J

Messrs PAKISTAN TELECOMMUNICATION COMPANY LTD. through General Manager (South)‑‑‑Petitioner

versus

GOVERNMENT OF THE PUNJAB through Secretary, Excise and Taxation, Lahore and another‑‑‑Respondents

Writ Petition No.20840 of 2001, heard on 27th November, 2001.

Punjab Finance Act (XV of 1977)‑‑‑

‑‑‑‑S.3‑‑‑Constitution of Pakistan (1973), Arts.199 & 70(4) & Fourth Sched., Part 1, Item No.48‑‑‑Constitutional petition‑‑­Professional tax‑‑‑Imposition of tax on corporations by Provincial Government under S.3 of Punjab Finance Act, 1977‑‑‑Contention of the petitioner was that by virtue of Item No.48 in the Federal Legislative List in Fourth Sched. to the Constitution, it was only the Federal Government which could impose the professional tax‑‑‑Validity‑‑‑Levy of professional tax by a Province or by local authority on a corporation was constitutionally not permissible‑‑‑Levy of professional tax by the Provincial Government was set aside‑‑‑Constitutional petition was allowed accordingly.

Syed Abrar Hussain Naqvi for Petitioner.

Zahid Aslam Khan, A.A.‑G. for Respondent.

Date of hearing: 27th November, 2001.

2002 C L D 1018

[Lahore]

Before Mian Hamid Farooq, J

NATIONAL BANK OF PAKISTAN‑ ‑‑Plaintiff

versus

FIRST TAWAKAL MODARABA through Tawakkal Management (Pvt.) Ltd. and 5 others‑‑‑Defendants

Civil Original Suit NA.38 of 1998, heard on 14th December, 2001.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss. 2(c)(e) & 6‑‑‑Modaraba Companies and Modaraba (Floatation and Control) Ordinance (XXXI of 1980), Ss.2(a) (b)(c) & 24‑‑‑Suit for recovery of money was filed by Bank before Banking Tribunal‑‑‑Plaintiffs case was that it negotiated the export bills of defendant‑company from time to time, credited the value of respective export bills into account of defendant maintained with Bank and the amounts were then withdrawn by defendants from said account as reflected in the statement of accounts‑‑­Defendant‑company objected to jurisdiction of Banking Tribunal for not being a Modaraba Tribunal as envisaged by law‑‑‑Validity‑‑‑Jurisdiction of Banking Tribunal would extend in cases, where claim was to be filed by "Holder of Modaraba Certificate" against the "Modaraba Company' or by a "Modaraba Company" against any "other party with whom it had entered into business"‑‑‑Nature of transaction undertaken by the parties to suit had to be seen for determining the question of jurisdiction of Modaraba Tribunal‑‑‑Transaction undertaken by the parties was neither a "Modaraba Business" nor plaintiff was holder of "Modaraba Certificate" nor same was "Modaraba Company"‑‑ ‑Plaintiffs case fell within the definitions of finance" as given in S.2(e) and "customer" as given in S.2(c) of Banking Tribunals Ordinance, 1984, thus, the same did not fall within the jurisdiction of Modaraba Tribunal.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑

‑‑‑S. 9‑‑‑Suit for recovery of finance by Bank‑‑‑Liquidated damages, entitlement to‑‑‑Bank would not be entitled to recover the amount of liquidated damages as per principle laid down in the judgment passed in Allied Bank's case reported as 2001 MLD 1955.

Allied Bank of Pakistan Ltd. v. Messrs Aisha Garments and others 2001 MLD 1955 fol.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss.3(2), 10 & 29‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.10‑‑­Banking Tribunals Ordinance (LVIII of 1984), S.6‑‑‑Bankers' Books Evidence Act (XVIII of 1891), S.4‑‑‑Amended application for leave to defend under S.10, Financial Institutions (Recovery of Finances) Ordinance, 2001, non-­filing of ‑‑Effect‑‑‑Defendants' reply to show‑cause notice issued to them by Banking Tribunal under S.6(2) of Banking Tribunals Ordinance, 1984, was treated as an application for leave to defend the suit after promulgation of Banking Companies (Recovery of Loans. Advances, Credits and Finances) Act, 1997‑‑‑Defendants after coming into force of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not file amended application for leave to defend within 21 days allowed by Banking Court, but relied upon their reply to show‑cause notice submitted before Banking Tribunal‑‑‑Validity‑‑‑Words "an amended application for leave to defend" and "in accordance with the provisions of this Ordinance" as used in S.10(12), Financial Institutions (Recovery of Finances) Ordinance, 2001, were of great significance requiring that when an application for leave to defend was already pending at the time of coming into force of said Ordinance, the defendants would be allowed a period of 21 days for filing amended application for leave to defend thereby sufficiently complying with provisions of S.10(3)(4) & (5) of the Ordinance‑‑‑Defendants in the present case had not filed amended application for leave to defend, thus, there was neither any compliance of provisions of S.10(3)(4) & (5) of the Ordinance, nor they had shown sufficient cause for their inability to do so‑‑‑Provisions of S.10(12) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were mandatory in nature as non­compliance thereof entailed penal consequences‑‑­Application for leave to defend was rejected as per provisions of S.10(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Since defendants had no defence the allegations made in the plaint would be deemed to have been admitted‑‑‑Banking Court was, thus, obliged to pass judgment and decree in favour of plaintiff‑Bank under S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Defendants had not specifically denied the photo copies of documents produced by Bank alongwith the plaint, meaning thereby that execution of all such documents would be deemed to be admitted by them‑‑­Statement of accounts was duly, verified/ certified under Bankers' Books Evidence Act, 1891, to which presumption of correctness was attached and there was a rebuttal on record thereof ‑‑Defendants had failed to raise substantial question of law and facts to be tried by Court after recording of evidence‑‑‑High Court decreed the suit with cost of funds and the Bank was also declared entitled to the costs to be determined under S.3(2) of Financial Institutions (Recovery of Finances) Ordinance. 2001.

(d) Interpretation of statutes‑‑‑

‑‑‑ Mandatory or directory provisions‑‑‑Distinction‑‑‑Nature, determination of‑‑‑Principle‑‑‑Provision of law couched with penal consequences would be considered mandatory, but provision of law not entailing penal consequences to its non­compliance would be taken as directory.

Raja Muhammad Akram for Plaintiff.

Khalid Mahmood Ansari for Defendants.

Date of hearing: 14th December, 2001.

2002 C L D 1031

[Lahore]

Before Maulvi Anwarul Haq and Mian Hamid Farooq, JJ

COMMERCE AND INDUSTRIES CORPORATION OF PAKISTAN LTD. Through Chief Executive ‑‑Appellant

versus

CHINA NATIONAL MACHINERY AND EQUIPMENT, IMPORT AND EXPORT CORPORATION, CHINA‑‑‑Respondent

Regular First Appeal No. 132 of 1989, decided on 15th January, . 2002.

(a) Contract Act (IX of 1872)‑

‑‑S. 186 ‑‑‑Agency need not be express wad cart be implied.

(b) Contract--

‑‑‑‑Creation of contract of agency ‑‑‑16fere silence of a party would not create contract‑‑‑Such a silence when coupled with conduct or availing of benefits or other circumstances could create a valid contract ‑‑‑Mere non‑reply or silence on the part of one party in response to letters of other party would not constitute a contract and agency‑‑‑Where there was no evidence on record to show that by conduct of any of the two parties the agency relationship came into existence, no contract or agency was created in circumstance.

Ahmad Din v. Muhammad Saleem and others 1989 MLD 3264; U Lat and others v. U Pon Caung AIR 1938 Rang. 145; Abbasin Ltd. v. Metalexport and 4 others 1988 MLD 440; Khub Chand and others v. Chillar Mal AIR 1931 All. 372; Shah Muhammad Khan v. Ahmad Ali Khan AIR 1935 Oudh 170; Union of India v. Ashrfi Devi and others AIR 1957 Madh. Pra. 114; Raja Sir Bissessardas v. Kabulchand AIR 1945 Nag. 121; Haji Qabool Muhammad Shah v. Pir Sarfraz Ahmad PLD 1974 Kar. 334; The Commerce Bank Ltd. v. Habibi Bakhsh and another PLD 1978 Quetta 45; Hukumchand Insurance Co. Ltd. v. The Bank of Baroda and others AIR 1977 Karnataka 204; Vishinji Goverdhan Dass & Co. v. Jasraj Girdharilal AIR 1918 Sindh 1; M. Shahid Nawaz v. Fazal Ellahi Shaikh and another PLD 1986 Kar. 67; S.M. Bholat v. Hokohama Specie Bank Ltd. (28) AIR 1941 Rang. 270; Alfred William Domingo v. L.G. De'Souza AIR 1928 All. 481; Gaddar Mal v. Tata Industrial Bank Ltd. AIR 1927 All. 407; Bhagwandas Goverdhandas Kedia v. Messrs Girdharlal Parshottamdas & Co. and others AIR 1966 SC 543; Mohanlal Jain v. His Highness Maharaja Shri Sawai Man Singhji Ex‑Ruler of Jaipur and others AIR 1962 SC 73; Pakistan Steel Products v. Indus Steel Pipes Limited 1996 CLC 118 and Moosa Bhoy v. Kristiah AIR 1952 Hyd. 79 ref.

Ali Zafar for Appellant.

Dr. Pervez Hassan for Respondents.

Dates of hearing: 11th, 15th, 17th, 18th, 22nd, 23rd, 25th October, 1st and 6th November, 2001.

2002 C L D 1048

[Lahore]

Before Naseem Sikandar, J

AEROFLOT RUSSIAN INTERNATIONAL AIRLINES‑‑‑Petitioner

versus

HAJVAIRY AIRLINES (PVT,) LTD. ‑‑‑Respondent

Civil Original No. 9 of 1994, decided on 22nd April, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑

‑‑‑‑S.305‑‑‑Winding up of company‑‑‑Joint venture between parties‑‑‑Where both petitioner and respondent companies were independent legal persons, then one might go for winding up of the other, if the conditions given in S.305 of Companies Ordinance, 1984 were satisfied.

(b) Companies Ordinance (XLVII of 1984)‑‑

‑‑‑‑S.305‑‑‑Winding up of company‑‑‑Petitioner entered into three aircraft leasing agreements with respondent containing details with regard to payment schedule of rentals thereof‑‑‑Such agreements were terminated on respondent's failure to pay lease rentals‑‑‑Petitioner sought winding up of respondent‑Company as its existing and probable assets were insufficient to meet its existing liabilities‑‑‑Contention that respondent‑Company was a joint venture, if accepted as correct, would not make any difference, as both the companies were independent legal persons, one might go for winding up of the other, if conditions given in 5.305 of Companies Ordinance, 1984 were satisfied‑‑‑No funds sufficient to discharge the liability towards petitioner were available with respondent‑Company‑‑‑Provisions of S.305 of Companies Ordinance, 1984, contemplated the ability or otherwise of a company to pay debt as at the time of filing of petition‑‑‑Such provisions did not leave any room for optimism that hay days would at last dawn upon the Company and all its financial and other hardships would disappear miraculously‑‑‑No legal or moral rule required a creditor to wait for the ideal days that respondent‑Company was dreaming about‑‑‑Such agreements were neither controlled by pre‑incorporation agreement nor there appeared to be any intention of petitioner to postpone the rentals for indefinite period‑‑‑Respondent‑Company was presently unable to pay its debts‑‑‑High Court accepted the prayer for winding up of respondent‑Company in circumstances.

Satyarazu v. Guntur Cotton, Jute and Paper Mills Co. Ltd. AIR 1925 Mad. 199 and Ulbrichts Wwe Gas MBH Austria v. Ulbrichts (Pakistan) (Pvt.) Ltd. PLD 1992 Lah.249 ref.

Shahid Anwar Bajwa for Petitioner.

Ejazul Hassan for Respondent.

Qureshi Muhammad Hafeez, Airport Manager in person.

Date of hearing: 12th November, 2001.

2002 C L D 1071

[Lahore]

Before M. Javed Buttar and Syed Jamshed Ali, JJ

SHAUKAT ALI MIAN‑‑‑Appellant

versus

TRUST LEASING CORPORATION LTD. through Chief Executive, and 4 others‑‑‑Respondents

E.F.A. No. 149 of 2000, heard on 14th May, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.18 & 21‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr.84, 85, 89, 90 & 91‑‑‑Negotiable Instruments Act (XXVI of 1881), S.82‑‑‑Sale of property in execution of decree‑‑­Payment of bid money through cheques in absence of any order of Court or Court Auctioneer requiring such payment in cash‑‑‑Refusal of Court to confirm sale on the ground that payment of bid money by cheque did not meet the requirements of O.XXI, Rr.84 & 85, C.P.C.‑‑‑Validity‑‑­Payment of 1 /4th or balance of sale price in cash was neither required by O.XXI, Rr.84 & 85, C.P.C., nor did the proclamation of sale issued in the present case directed so‑‑­Bid money paid in the form of cheuqes were duly received by the Court Auctioneer and were accepted by Court seeking their encashment, which were duly realized‑‑‑Neither decree‑holder nor judgment‑debtors or any other person had ever raised objection within contemplation of O.XXI, Rr.89, 90 & 91, C.P.C., nor did objection petition contain any allegation of fraud or irregularity in publishing or conducting the sale in question‑‑‑Principle that none should be allowed to suffer for the act of Court was attracted to the present case‑‑‑Value of immovable property runs into million of rupees‑‑‑1/4th bid money, in the present case, was Rs.52,50,000 and to carry such amount in cash by auction­purchaser was neither desirable not practicable from security point of view‑‑‑Auction‑purchaser could not anticipate the exact amount required for payment of 1/4th of bid money‑‑‑Carrying huge unknown amount of cash by auction‑purchaser with him was not realistic, practical and logical ‑‑‑Provisions of O.XXI, Rr.84 & 85, C.P.C. to be construed in view of changed circumstances‑‑‑Payment of 1/4th bid money through cheques and remaining 3/4th of sale price was a valid tender within contemplation of Rr.84 & 85 of O.XXI, C.P.C.‑‑‑High Court accepted appeal and set aside the impugned order.

Messrs Dawood Flour Mills and others v. National Bank of Pakistan 1999 MLD 3205; Commissioner of Income‑tax, Bombay South, Bombay v. Messrs Ogale Glass Works Ltd. Ogale Wadi AIR 1954 SC 429; K. Saras‑Wathy Mills, K. Kalpana v. PSS. Somasundaram Chettiar AIR 1989 SC 1553; Chaudhri Abdur Rashid and others v. The New Bank of India Ltd. and others PLD 1959 Lah.224; Rashid Ehsan and others v. Bashir Ahmad and another PLD 1989 SC 146 and Messrs Ali Match Industries Ltd. through Managing Director and 3 others v. Industrial Development Bank of Pakistan through Manager and another 1999 MLD 2127 ref.

(b) Act of Court‑‑‑

‑‑‑‑ None should be allowed to suffer for the act of Court.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.18 & 21‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr.58, 59, 60, 62 & 103‑‑‑Transfer of Property Act (IV of 1882), Ss.54 & 53‑A‑‑‑Registration Act (XVI of 1908), Ss.49 & 50‑‑‑Specific Relief Act (I of 1877), S.27(b)‑‑‑Execution of decree‑‑‑Investigation of claims and objections‑‑‑Objector claimed protection of possession of property under agreement to sell coupled with an irrevocable power of attorney executed in his favour by judgment‑debtor‑‑­Executing Court dismissed objection petition on the ground that objector was not having registered sale‑deed, whereas agreement to sell did not confer any right except a suit for specific performance, and its plea under S‑53‑A of Transfer of Property Act, 1882, was also repelled‑‑‑Validity‑‑Right to possess immovable property was a valuable right‑‑‑Objector within the scope of O.XXI, Rr.58 & 60, C.P.C. was entitled to prove that he had title, right or interest in the property‑‑­Section 54 of Transfer of Property Act. 1882, provided that contract of sale itself did not create an interest in or charge on such property‑‑‑Omission of expression "right" from the said provision was of importance, which "right" might be based on an imperfect title or equitable title‑‑‑Equitable title was one which required a further exercise of granting power to pass the fee in land or which did not convey full and absolute dominion‑‑‑Objector was entitled to maintain objection petition on the basis of equitable title besides claiming that he was entitled to claim protection of his possession‑‑‑Objector could legitimately urge, subject to investigation and proof of certain facts, that he had a right to remain in possession of property, which right was sufficient to maintain an objection petition under O.XXI, R.58, C.P.C.‑‑‑Objector was entitled to an opportunity to adduce evidence in support of his objection petition‑‑If after recording of evidence, agreement to sell, delivery of possession to objector under agreement to sell and deposit of amount by objector in the account of judgment‑debtor, had been established, only then effect thereof should have been examined by Executing Court‑‑‑High Court accepted appeal and set aside impugned order with direction to Executing Court to decide the matter afresh after allowing the parties to lead evidence in support of their respective plea.

Muhammad Ishaq v. Muhammad Siddique PLD 1975 Lah.909; M. Ghulam Muhammad v. Custodian of Evacuee Property, Lahore and others PLD 1966 (W.P.) Lah.953; Khawaja Ammar Hussain v. Muhammad Shabbiruddin Khan PLD 1986 Kar. 74; Nan Fung v. H. Pir Muhammad Shamsdin PLD 1995 Kar. 421; Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; Fazla v. Mehr Din and 2 others 1997 SCMR 837: Muhammad Yousaf v. Munawar Hussain and 5 others 2000 SCMR 204; Abdul Ghani v. Abrar Hussain 1999 SCMR 348; Mst. Surayya Begum v. Muslim Commercial Bank Ltd. and 4 others PLD 1990 Lah.4; Akbar Ali and others v. Lal and others PLD 1997 Lah.709; Abdul Gani Khan v. Dino Bandhu Adhikari and another PLD 1963 Dacca 777; Mst. Razia Ghafoor v. Messrs Eastern General and others 1987 CLC 777; Mst. Sharifan v. District Judge and others 1985 CLC 2481; Muhammad Yousaf v. Asif Siddique and another PLD 1987 Lah. 659; Muhammad Khalil v. District Judge, Rawalpindi and 4 others 1989 CLC 1865; Muhammad Yousif v. Syed Wali Muhammad Shah through his Legal Heirs 1994 CLC 132; Muhammad Luqman v. Bashir Ahmad PLD 1994 Kar.492 and Pergo Trading Limited v. Trust Leasing Corporation Ltd. through Chief Executive and another 2001 MLD 942 ref.

(d) Words and phrases‑‑‑

‑‑‑‑"Title"‑‑‑Connotation‑‑‑Word "title" has many dimensions, which inter alia includes absolute title, equitable title and imperfect title.

(e) Words and phrases‑‑‑

‑‑‑‑"Absolute title"‑‑ ‑Meaning.

Black's Law Dictionary, Sixth Edn. ref.

(f) Words and phrases‑‑‑

“Equitable title "‑‑‑Meaning.

Black's Law Dictionary, Sixth Edn. ref.

(g) Words and phrases‑‑‑

‑‑‑‑"Imperfect title"‑‑ ‑‑Meaning.

Black's Law Dictionary, Sixth Edn. ref.

(h) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.18 & 21‑‑‑Civil Procedure Code (V of 1908),. O.XXI, R.58‑‑‑Limitation Act (IX of 1908), Arts. 11 & 181‑‑‑Execution of decree‑‑‑Objection as to sale of property attached during pendency of suit‑‑‑Limitation‑‑‑Property belonging to judgment‑debtors was attached on 26‑6‑1998 during pendency of suit, and was put to public sale on 20‑11­-1999 during execution of decree‑‑‑Objector filed objection petition on 22‑11‑1999‑‑‑Contention that objection petition was time‑barred having been filed beyond one year of attachment‑‑‑Validity‑‑‑Limitation provided under O.XXI, R.58, C.P.C., was one year from date of attachment in execution of decree‑‑‑Attachment in the present case was not made in execution of decree, thus, said provision was not applicable‑‑‑Limitation of one year from date of attachment as prescribed by Art.11 of Limitation Act, 1908, pertained to suit only‑‑‑Objection petition filed by objector would be governed by Art.181 of Limitation Act, 1908, which provided limitation of 3 years and the starting point was when the right to apply accrued‑‑‑Objector had come to know about attachment on 27‑10‑1999, when proclamation was pasted at the property‑‑Objection was repelled in the facts and circumstances of case.

Nan Fung v. H. Pir Muhammad Shamsdin PLD 1995 Kar.421 ref.

(i) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXI, Rr.54, 58 & 89‑‑‑Execution of decree‑‑‑Objection to attachment was in fact objection to sale of attached property‑‑‑If attachment was ultimately found not to be in accordance with law, the sale would also stand vitiated.

(j) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXI, Rr.54, 91 & 94‑‑‑Transfer of Property Act (IV of 1882), Ss.8 & 40‑‑‑Specific Relief Act (I of 1877), S.27(b)‑‑­Execution of decree‑‑‑Sale of property‑‑‑Agreement to sell by judgment‑debtor in favour of third person entered into before attachment of property‑‑‑Auction‑purchaser was bound by such agreement, provided he had notice thereof.

Mohyuddin Molla v. The Province of East Pakistan PLD 1962 SC 119 fol.

(k) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXI, Rr.58 & 62 (as inserted by Law Reforms Ordinance (XII of 1972))‑‑‑Specific Relief Act (I of 1877) S.12‑‑‑Execution of decree‑‑‑Attachment of property‑‑­Objection petition by objector claiming property on the basis of agreement to sell executed in his favour by judgment­debtor‑‑‑Maintainability‑‑‑Claim or objection under O.XXI, R.58, C.P.C. was not restricted to matter of possession, and Executing Court could determine questions relating to any right, title or interest asserted in attached property‑‑‑Right and claim of objector was necessarily required to be determined by Executing Court and not by a separate suit‑‑­Separate suit for such purpose would not be maintainable, rather same would only give rise to multiplicity of suits and prolong the agony of parties as if a suit for specific performance was filed, although the questions arising therein would be the same.

Muhammad Rafi and others v. Muhammad Ashfaq, Civil Judge, Hasilpur and others 1993 CLC 1903 rel.

(l) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XXI, R.58‑‑‑Sale of property in execution of decree‑‑‑Inadequacy of sale price‑‑‑Only decree‑holder or judgment-­debtor could legitimately raise such objection, but not a third person.

Syed Najam‑ul‑Hassan Kazmi and Atif Amin for Appellant.

Abdul Hamid Chowhan for Respondent No. 1.

Date of hearing: 14th May, 2002.

2002 C L D 1090

[Lahore]

Before Ch. Ijaz Ahmad and Syed Sakhi Hussain Bukhari, JJ

Major MUHAMMAD TARIQ‑‑‑Appellant

versus

CITIBANK HOUSING FINANCE COMPANY LTD. through Manager‑‑‑Respondent

First Appeal from Order No.90 of 2001, decided on 3rd April, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.18‑‑‑Transfer of Property Act (IV of 1882), Ss.41 & 58(f)‑‑‑Execution of decree‑‑‑Objection‑‑‑Purchase of mortgaged property‑‑‑Failure to secure the original documents from the vendor‑‑‑Protection of S.41 of the Transfer of Property‑ Act, 1882‑‑‑Applicability‑‑‑Suit was decreed by the Banking Court in favour of Bank and the suit property was the subject‑matter of execution proceedings‑‑­Objector raised the plea of being bona fide purchaser for consideration from the ostensible owner‑‑‑Objection was disallowed by the Executing Court‑‑‑Validity‑‑‑Mortgage of immovable property being a charge against property, would go with the same even if property in question had been alienated‑‑‑Objector in the present case, had purchased the property in question without securing the original documents from the original owners, as such the objector was not bona fide purchaser as he had a duty to took into the registered deeds‑‑‑Where the objector had not made any inquiry to find out from the Sub‑Registrar with regard to charge of the Bank over ‑the property in the absence of having made any inquiry and looked upon S. 41 of Transfer of Property Act, 1882, the objector's interest could not be held to be bona fide or protected‑‑‑‑High Court did not find any infirmity or illegality in the order of the Executing Court and, therefore, the same was upheld‑‑‑Appeal was dismissed in circumstances.

Maulana Riaz‑ul‑Hassan v. Muhammad Ayub Khan and another 1991 SCMR 2513 ref.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑S.18(6)‑‑‑Transfer of Property Act (IV of 1882), S. 41‑‑­Execution of decree‑‑‑Investigation of claim‑‑‑Transfer by ostensible owner‑‑‑Benefit of S.41 of the Transfer of Property Act, 1882‑‑‑Scope‑‑‑Principle contained in S.41 of the Transfer of Property Act, 1882, is an equitable principle and cannot be availed of by a person who has come to the Court with unclean hands ‑‑‑Vendee had purchased the property in question from the original owners collusively to frustrate the rights of the Bank (mortgagee) principle of bona fide purchaser was not attracted in circumstances.

Iqbal Sultan v. Chand Sultan and others 1990 CLC 366: Mst. Amina Bibi and others v. Sadiq Ali and others 1994 MLD 2430 and Mst. Noor‑un‑Nisa's case 1994 SCMR 2087 ref.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑S.18(6)‑‑‑Transfer of Property Act (IV of 1882), Ss.41 & 58‑‑‑Execution of decree‑‑‑Investigation of claim‑‑‑Purchase of mortgaged property‑‑‑Bona fide purchaser for consideration‑‑‑Remedy‑‑‑Appellant had purchased the suit property from the original owner whereas the property was already mortgaged with the Bank‑‑‑Effect‑‑‑Appellant had alternative remedy to file a suit against the original owners and had no remedy against the Bank in circumstances of the case.

Muhammad Ibrahim v. Secretary, Government of Pakistan and others PLD 1993 Kar.478 ref.

Abdul Hameed Chohan for Appellant.

Shahid Ikram Siddiqui for Respondent‑Bank.

2002 C L D 1095

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs HABIB BANK LIMITED through Chief Manager and another‑‑‑Appellants

versus

Messrs HEBEI MACHINERY AND EQUIPMENT IMPORT/EXPORT CORPORATION through Attorney and others ‑‑‑Respondents

Regular First Appeals Nos. 156 of 2002 and 767 of 2001, decided on 18th March, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9 & 21‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, R.2(B)‑‑‑Loan instalments‑‑‑Failure to clear the instalment in due time‑‑‑Loan facility was advanced to the plaintiff on the basis of letter of credit‑‑‑Four installments were paid to the plaintiff in due time whereas the fifth instalment was withheld by the Bank on the plea of issuance of interim injunction by the Banking Court‑‑Contention of the plaintiff was that in view of the provision of O.XXXIX. R.2(B), C.P.C. the interim injunction issued by the Court had lapsed after six months, therefore the Bank should have made the payment‑ of fifth instalment after six months ‑‑‑Validity‑‑­Bank as such ought to have made payment of the fifth instalment immediately after six months without any demand being made by the plaintiff‑‑‑Bank could only have withheld payment of the fifth instalment prior to the six months‑‑‑High Court directed the Bank to pay fifth instalment with 1096 interest thereon‑‑‑Appeal was allowed accordingly.

Haral Textiles Mills Limited v. Banque Indosuez Belgium S.A. and others 1999 SCMR 591 ref.

Sher Nawaz Shah for Appellants.

M. R. Sheikh for Respondents.

Date of hearing: 18th March, 2002.

2002 C L D 1097

[Lahore]

Before Maulvi Anwarul Haq and Pervez Ahmad, JJ

NATIONAL BANK OF PAKISTAN‑‑‑Appellant

versus

Messrs ASGHAR ENTERPRISES and 2 others‑‑‑Respondents

Regular First Appeal No.215 of 1992, heard on 13th March, 2002.

(a) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S. 74‑‑‑Banking, Tribunals Ordinance (LVIII of 1984), S.11(4)‑‑‑Liquidated damages, recovery of‑‑‑Suit for recovery of Bank loan included liquidated damages‑‑‑Validity‑‑‑Claim of liquidated damages not being entertainable was declined.

Allied Bank of Pakistan Ltd.. Faisalabad v. Messrs Aisha Garments and others 2001 MLD 1955 ref.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑Ss. 6(2) & 9‑‑‑High Court (Lahore) Rules and Orders, Vol.I, Chap. 16‑B, Rr.18 & 19‑‑‑Counsel fee, award of ‑‑Grievance of the plaintiff was that the Banking Tribunal at the time of passing the decree in its favour did not include fee of the counsel in the decretal amount‑‑‑Validity‑‑‑Matter of omission of grant of counsel fee pertained to the costs ‑‑‑For the purposes of assessment of costs with reference to counsel fee, a certificate had to be filed by the counsel for the plaintiff or for that matter of the defendant‑‑‑No such certificate was filed in the present case even the amount which was being claimed to be awarded was neither mentioned in the plaint nor in the memorandum of appeal‑‑­Appeal was dismissed in circumstances.

Abdul Rehman for Appellant.

Nemo for Respondents.

Date of hearing: 13th March, 2002.

2002 C L D 1099

[Lahore]

Before Maulvi Anwarul Haq and Mian Hamid Farooq, JJ

NATIONAL BANK OF PAKISTAN‑‑‑Appellant

versus

Messrs MUSLIM CORPORATION, OKARA through Managing Partner and 5 others‑‑‑Respondents

Regular First Appeal No.75 of 1994, heard on 27th February, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑­

‑‑‑Ss. 6(2) & 11(4)‑‑‑Contract Act (IX of 1872), S.74‑‑‑ Liquidated damages, recovery of‑‑‑Suit for recovery of Bank loan included liquidated damages‑‑‑Banking Tribunal decreed the suit in favour of the Bank but declined to include liquidated damages in the decree‑‑‑Validity‑‑‑Claim of liquidated damages was not entertainable‑‑‑High Court declined to interfere with the judgment and decree passed by the Banking Tribunal in view of Allied Bank of Pakistan v. Aisha Garments reported as 2001 MLD 1955.

Allied Bank of Pakistan Ltd., Faisalabad v. Aisha Garments 2001 MLD 1955 ref.

Iftikhar Ullah Malik for Appellant.

Nemo for Respondents.

Date of hearing: 27th February, 2002.

2002 C L D 1101

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs HABIB BANK LIMITED through its Chief Manager and others‑‑‑Appellants

versus

Messrs HEBEI MACHINERY AND EQUIPMENT IMPORT/EXPORT CORPORATION through their Attorney‑‑‑Respondent

Regular First Appeals Nos.767 of 2001 and 156 of 2002, decided on 18th March, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑Ss. 15 & 21‑‑‑Recovery of Bank loan‑‑‑Decree passed in favour of Bank did not include costs‑‑‑Validity‑‑‑Banking Court had chosen not to award costs in the decree High Court declined to allow the same.

M. R. Sheikh for Appellant.

2002 C L D 1102

[Lahore]

Before Naseem Sikandar and Muhammad Sair Ali, JJ

RAHEEL IKHLAS‑‑‑Appellant

versus

Messrs CITIBANK N.A. ‑‑‑Respondent

First Appeal from Order No.408 of 2001, decided on 21st March, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.12‑‑‑Ex parte decree, setting aside of‑‑‑Service to defendant not denied‑‑‑Defendant was served personally as well as through citation in newspaper‑‑‑Suit was decreed ex parte by the Banking Court due to non‑appearance of the defendant‑‑‑Application under. S.12 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, to set aside the ex parte decree was dismissed by the Banking Court‑‑‑Validity‑‑‑Where the defendant was served through personal service and served through citation as well, the Banking Court was justified in remarking that personal service having not been denied in the petition the petitioner could not approach that Court' under S.12 of the Banking Companies (Recovery of Loans. Advances, Credits and Finances) Act, 1997.

National Bank of Pakistan v. Tradewell (Pakistan) Corporation and 2 others 1991 CLC 1243; Haji Ali Khan & Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362; Maj. Pervez Shakoor and 4 others v. Muhammad Usman 1991 MLD 536; Nazam Din and others v. Jalal Din and others 1992 MLD 510; Hassan Din and another v. Jalal Din and 2 others 1991 CLC 33; Lt.‑Col. Mohsin Shah v. Mst. Qaseema Wahid and others 1995 MLD 1032; (Col. Retd.) Ashfaq Ahmed and others v. Sheikh Muhammad Wasim 1999 SCMR 2832; Abdul Ghafoor v. Executive Engineer, Rasool Division and 2 others PLD 1988 Lah.180 and Province of the Punjab through Board of Revenue, Lahore and 2 others v. Muhammad Hussain and 4 others 1988 CLC 514 distinguished.

S. Abid Mumtaz Tirmazi for Appellant.

Ashar Elahi for Respondent.

Date of hearing: 19th February, 2002.

2002 C L D 1105

[Lahore]

Before Mian Hamid Farooq, J

UNITED BANK LIMITED‑‑‑Petitioner

versus

WAFAQI MOHTASIB (OMBUDSMAN) REGIONAL OFFICE, LAHORE and 3 others‑‑ ‑Respondents

Writ Petition No. 13515 of 1996, heard on 18th February, 2002.

(a) Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order (1 of 1983)‑‑‑

‑‑‑‑Arts.9 & 10(3)‑‑‑Constitution of Pakistan (1973), Art. l99‑‑‑Constitutional petition‑‑‑Complaint before Wafaqi Mohtasib‑‑‑Limitation‑‑‑Complainant, after availing loan facility from the Bank, suffered loss due to flood in September, 1988‑‑‑Complainant on 3‑11‑1991 filed complaint before Wafaqi Mohtasib for direction to the Bank to make good the losses suffered by him on account of food, over which Wafaqi Mohtasib made certain recommendations to the Bank‑‑‑Contention of Bank was that complaint was grossly time‑barred‑‑‑Validity‑‑‑Complaint under Art. 10(3) of Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983, could be filed within three months from the day on which aggrieved person first had notice of the matter alleged in complaint‑‑‑Complainant's factory was hit by flood in the year 1988, but he had neither approached any forum nor filed complaint before Wafaqi Mohtasib within prescribed period‑‑‑Only exception to bar of. limitation was contained in last portion of Art. 10(3) of Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983‑‑‑Complaint filed after three years was clearly time‑barred, which could not be entertained by Wafaqi Mohtasib, particularly when no "special circumstances" for entertaining the same after period of limitation had been mentioned in the impugned order‑‑‑Essential ingredients for entertaining complaint after period of limitation were clearly absent from the impugned order, 'thus, same having been passed in excess of jurisdiction conferred upon Wafaqi Mohtasib could be interfered with in exercise of Constitutional jurisdiction by the High Court‑‑‑High Court accepted Constitutional petition and set aside the impugned order.

(b) Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order (I of 1983)‑‑‑

‑‑‑‑Art.9(1)(a)‑‑‑Constitution of Pakistan (1973), Art.199‑‑­Constitutional petition‑‑‑Decision of complaint by Wafaqi Mohtasib during pendency of suit between the parties‑‑­Validity ‑‑‑Wafaqi Mohtasib had decided complaint in January, 1993; whereas Bank had filed suit against complainant in September, 1992‑‑‑Subject‑matter of complaint was, thus, sub judice before Court of competent jurisdiction at the time, when Wafaqi Mohtasib had investigated and/or inquired into the matter ‑‑‑Wafaqi Mohtasib would have no jurisdiction as per Art.9(1)(a) of Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983, to investigate or inquire into the matter being sub judice before a Court of competent jurisdiction ‑‑‑Wafaqi Mohtasib had no jurisdiction to embark upon enquiry into the dispute between parties as highlighted in the complaint‑‑‑Impugned order having been passed in excess of jurisdiction conferred upon Wafaqi Mohtasib, could be interfered with in exercise of Constitutional jurisdiction‑‑‑High Court accepted Constitutional petition and set aside impugned order.

(c) Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order (I of 1983)‑‑‑

‑‑Arts.9 & 11 (l)(a) to (g)‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Complaint before Wafaqi Mohtasib‑‑‑Complainant, after availing loan facility from the Bank suffered loss due to flood in September, 1988‑‑­Mortgaged property was insured, thus, he approached the Bank for filing claim against Insurance Company for recovery of his losses, but in vain‑‑‑Complainant filed complaint before Wafaqi Mohtasib for giving direction to the Bank to make good the losses suffered by him on account of flood, over which Bank was directed not to charge interest on loan, extend additional finance facility to complainant and prepare afresh schedule of repayment of loan allowing reasonable time to complainant to discharge his liabilities‑‑­Contention of Bank was that said recommendations were outside the purview of Art.11(1) of Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983‑‑Validity‑‑‑Article 11 of Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983 provided that where matter considered in opinion of Wafaqi Mohtasib amounted to maladministration, then he would communicate his findings to concerned Agency as provided under cls. (a) to (g) thereof‑‑‑Impugned recommendations were not such, which could be made by Wafaqi Mohtasib under Art. 11(1) of Order, 1983‑‑‑Impugned order having been passed in excess of jurisdiction conferred upon Wafaqi Mohtasib, was not sustainable under law, which could be interfered with in exercise of Constitutional jurisdiction‑‑‑High Court accepted Constitutional petition and set aside impugned order in circumstances.

M. A. Zafar for Petitioner.

Muzammil Akhtar Shabbir for Respondents.

Date of hearing: 18th February, 2002.

2002 C L D 1130

[Lahore]

Before Muhammad Sair Ali, J

BUREWALA TEXTILE MILLS LTD. ‑‑‑Petitioner

versus

ENQUIRY OFFICER, WAR RISKS INSURANCE, PUNJAB, N.‑W.F.P. AND FEDERAL TERRITORY and another‑‑‑Respondents

Writ Petitions Nos. 19484 and 19485 of 2001, heard on 13th February, 2002.

(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Arts.25 & 2A‑‑‑Administrative and policy decisions‑‑­Equality of citizens‑‑‑Exercise of discretion by State functionaries‑‑‑Scope‑‑‑Government could not exercise any discretion to become selective, discriminatory and distinctive in applying its decisions at its own preference to persons within one class and where conditions for extending benefits of such decisions were the same for all in that particular class of persons‑‑‑Benefit of Government's decision, upon fulfilment of prescribed conditions, could not be denied to some and allowed to others‑‑‑Policy decision should be applied to all concerned fairly, equally, without prejudice, bias and discrimination‑‑‑Such is the inalienable and guaranteed right of each and every citizen or class of citizens, which Government is obliged to respect and cannot act contrary to that‑‑‑Acting otherwise than in accordance with law and Constitution would be against the grace and goodwill of the Government.

(b) War Risk Insurance Ordinance (XXXII of 1971)‑‑‑

‑‑‑‑S.20‑‑‑General Clauses Act (X of 1897). S.21‑‑­Constitution of Pakistan (1973), Arts.25 & 199‑‑­Constitutional petition‑‑‑Demand of surcharge and interest by Inquiry Officer after acknowledging receipt of assessed war risk insurance premium from assessee within prescribed period‑‑‑Validity‑‑‑Government of Pakistan through letter No.10(2)/80‑Ins. I, dated 17‑7‑1984 by a policy decision had offered to waive interest and surcharge levied under War Risk Insurance Ordinance, 1971 by calling the same as "purely an act of grace and goodwill"; such offer was available to those assessees, who paid up assessed premium by specified date, and such offer was to remain valid up to six months from the date of assessment order or appellate order, as the case may be or the date of Government's decision, whichever was later‑‑‑Such offer without any distinction and discrimination was meant for all assessees of war risk insurance premium, who had till then not paid or had defaulted in payment of assessed dues‑‑‑In absence of prescribing conditions, parameters, principles, premise and factors for refusal of such waiver to complying assessees, retention of such discretion by Government "to consider the waiver" would loose all relevance and become meaningless‑‑‑If by employing words that "Government has decided to consider waiver of interest and surcharge", some kind of discretion to be selective and discriminatory was intended to be retained, such act could not be approved being ultra vires the law and Constitution‑‑‑Final date for availing the waiver of interest and surcharge in the present case did not seem to have been notified as no document was placed on record‑‑‑Said decision and its validity should have been well‑publicized‑‑‑If date of policy decision was finally specified by Government to be 31‑12‑1995, then period of availing the waiver or concession was till 30‑6‑1996 or six months of the date of assessment order, whichever was earlier‑‑‑Date of appellate decision and assessment order in the present case was 30‑4‑2001‑‑‑Assessee had, thus, validly been made an offer by Inquiry officer to avail the waiver of surcharge and interest by making payment of war risk insurance premium by 30‑10‑2001‑‑‑Such offer read with terms of Government's policy decision had clearly amounted to a definite representation and at the minimum a promise attracting the principle of promissory estoppel‑‑­Assessee upon receipt of demand dated 30‑4‑2001 paid premium through pay orders dated 21‑9‑2001, thus, it had given up its right to file further proceedings against the assessment orders‑‑‑Government had no locus poenitentiae to recall the waiver of interest and surcharge after payment of premium by assessee‑‑‑High Court accepted the Constitutional petition while declaring the impugned order to be without lawful authority and of legal effect.

Messrs Gadoon Textile Mills Limited and 814 others v. WAPDA and others 1997 SCMR 641 ref.

Iftikhar Ahmad Dar for Petitioner.

Sher Zaman Khan, Dy. A.‑G. for Respondents.

Date of hearing: 13th February, 2002.

2002 C L D 1170

[Lahore]

Before Mian Hamid Farooq, J

SAUDI‑PAK INDUSTRIAL AND AGRICULTURAL INVESTMENT COMPANY (PVT.) LIMITED, ISLAMABAD‑‑‑Plaintiff

versus

MOHIB TEXTILE MILLS LIMITED LAHORE and 3 others‑‑‑Defendants

C.O.S. No. 45 of 1998, heard on 21st December, 2001.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑S.10(3)(4)(5)(11) & (12)‑‑‑Leave to defend suit‑‑‑Failure to file amended application‑‑‑Effect‑‑‑Defendant having not complied with the requirements of S.10(3)(4)(5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, failed to file amended application in accordance with the provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and no application under S.10(12) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, for leave to defend was presumed to be pending‑‑‑Suit was decreed in favour of the plaintiff in circumstances.

(b) Interpretation of statutes‑‑‑

‑‑‑‑Penalty clause in a statute‑‑‑Effect‑‑‑When a provision of law is couched with the penal consequences then such provision of law is considered as a mandatory provision of law and where no penal consequences entail to the non­compliance of a provision of law, in that case such provision of law is taken as directory.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss.10(6) & 10(12)‑‑‑Penal consequences for non filing of application for leave to defend‑‑‑Provisions of S.10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 are mandatory in nature‑‑‑Non‑compliance of S.10(12) of the Financial Institutions (Recovery of Finances) Ordinance. 2001, entails penal consequences as provided under S.10(6) of the Financial Institutions (Recovery of Finances) ordinance, 2001.

(d) Financial Institutions (Recovery of Finance, Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑S.9‑‑‑Civil Procedure Code (V of 1908), O.II. R.3‑‑‑Joinder of causes of actions‑‑‑Suit for recovery of two Bank loans­--Maintainability‑‑‑Two financial facilities were granted in favour of the borrower by the financial institution, parties were same and the interest was joint, such causes of action could be amalgamated in one suit‑‑‑No illegality was committed by the financial institution by combining two causes of actions in one suit‑‑‑Suit was maintainable in circumstances.

The Directorate of Industries and Mineral Development Government of the Punjab through Director Lahore and 3 others v. Messrs Masood Auto Stores through Masood Ahmad Malik, Partner, Lahore PLD 1991 Lah.174 ref.

(e) Court Fees Act (VII of 1870)‑‑‑

‑‑‑‑S.17‑‑‑Financial Institutions (Recovery of Finances Ordinance (XLVI of 2001), S.9‑‑‑Suits for recovery of Bank loan‑‑‑Multifarious suits‑‑‑Court fees, fixation of‑‑‑Scope‑‑Suits which embraces two or more distinct causes of action and when a suit is filed combining multifarious causes of action, then each claim on the basis of causes of action is to be valued separately and requisite court fee is to be paid on the suit under the provisions of S.17 of the Court Fees Act, 1870.

The Directorate of Industries and Mineral Development Government of the Punjab through Director. Lahore and 3 others v. Messrs Masood Auto Stores through Masood Ahmad Malik, Partner, Lahore PLD 1991 Lah. 174 ref.

(f) Banking Companies (Recovery of Loans, Advances Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.9‑‑‑Suit for recovery of Bank loan‑‑‑Liquidated damages‑‑‑Recovery‑‑‑Such damages are not recoverable in view of principle laid down in case titled Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments Ltd. reported as 2001 MLD 1955‑‑‑Liquidated damages were not granted in circumstances.

Allied Bank of Pakistan Ltd., Faisalabad v. Messrs Aisha Garments and others 2001 MLD 1955 rel.

(g) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑Banker's Book Evidence Act (XVIII of 1891), S.2(8)‑‑‑Suit for recovery of Bank loan‑‑‑Application for leave to defend rejection of‑‑‑Photo copies of documents produced by the plaintiff were not denied by defendants in their application for leave to defend‑‑‑Plaintiff in statement of account had claimed nothing but the repurchase price that too in accordance with the agreements for finances and the statements of accounts and duly verified/certified under the Banker's Books Evidence Act, 1891 ‑‑‑Effect‑‑‑As the execution of the documents were not denied, the same were deemed to be admitted by the defendants‑‑‑Presumption of correctness was attached to the statements of accounts and as the application for leave to defend was dismissed and there was no evidence in rebuttal of the documents on record, the suit was decreed in circumstances.

Hamid Shabbir Azar for Plaintiff.

Muhammad Hussain Malik for Defendants.

Date of hearing: 21st December. 2001.

2002 C L D 1183

[Lahore]

Before Maulvi Anwarul Haq and Mian Hamid Farooq, JJ

FECTO SUGAR MILLS LTD. through Director‑‑‑Petitioner

versus

GOVERNMENT OF PAKISTAN through Secretary, Ministry of Finance and Economic Affairs, Islamabad and 3 others‑‑‑Respondents'

Writ Petitions Nos. 12519 of 1996, 14750 of 1995, 5019 of 1996, 18715 of 1995, 16999 of 1995, 16415 of 1995. 7881 of 1994, 15647 of 1995, 1784 of 1995, 2982 of 199 12976 of 1995, 15596 of 1995, 15959 of 1996, 12225 of 1997, 3858 of 1989, 4583 of 1989, 5299 of 1989, 3857 1989, 5219 of 1989, 5069 of 1989, 3856 of 1989, 2709 1995, 7958 of 1991, 13801 of 1994, 7686 of 1991, 8541 1991. 8542 of 1991, 8802 of 1991, 3048 of 1992, 6774 of 1992, 7908 of 1992, 5382 of 1994 and 11376 of 1997, decided on 19th February, 2002.

(a) West Pakistan Sugar Factories Control Act (XXII of 1950)‑‑‑

‑‑‑‑Ss. 2(h) & 8‑‑‑Notification S.R:O. No.545(I)/94, dated 9-6-­1996‑‑‑Exemption from excise duty‑‑‑Benefit of Notification S.R.O. No.545(I)/94, dated 9‑6‑1996‑‑‑Condition was added to grant of exemption at a point of time when sugar mills had already produced the excess stocks acting on the basis of average production for the three previous years set down in S.R.O. No.545(I)/94, dated 9‑6‑1996‑‑‑Effect‑‑‑Where it was impossible for the mills to meet with requirement of Notification at, the point of time when the same was issued for all practical purposes it was withdrawal of exemption.

Messrs Army Welfare Sugar Mills Ltd. v. Federation of Pakistan 1992 SCMR 1652 distinguished.

(b) West Pakistan Sugar Factories Control Act (XXII of 1950)‑‑‑

‑‑‑‑S. 8‑‑‑Crushing season of sugarcane ‑‑‑Duration determination of‑‑‑Occupier of a sugar factory under the provisions of S.8 of the West Pakistan Sugar Factories Control Act, 1950, has to start crushing by a date not later than 30th November each year‑‑‑Crushing season under the provisions of the West Pakistan Sugar Factories Control Act. 1950, is of 9 months and consequently of as many days as there are in the said 9 months‑‑‑Day of commencement of the crushing season can either be 1st October but not later than 30th November while concluding date is 30th June.

(c) West Pakistan Sugar Factories Control Act (XXII of 1950)‑‑‑

‑‑‑‑Ss. 2(h) & 8‑‑‑Notification S.R.O. No. 505(I)/90, dated 7‑6‑1990‑‑‑Notification S.R.O. No. 545(I)/94, dated 9‑6­1996‑‑‑Pakistan Sugar Journal, Vol. V‑2‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑­Exemption from excise duty‑‑‑Benefit of Notification S.R.O. No.545(I)/94, dated 9‑6‑1996‑‑‑Crushing season‑‑­Determination‑‑‑Contention of mill owners was that the commencement of crushing season for sugar factories was to be adjusted dependent upon the available quantity of the cane‑‑‑Validity‑‑‑Contention was repelled inasmuch as the proviso in Notification S.R.O. No.505(I)/90, dated 7‑6‑1990 did not refer to the working of the factory with reference to the crushing operation rather it stated that the factory must have been working for the full crushing season that was to say that a factory must have been operational during the seasons‑‑‑Crushing period for the purpose of the proviso in Notification S.R.O. No.505(I)/90, dated 7‑6‑1990, would mean a period starting from 30th of November and ending on 30th June the next following year‑‑‑Authority was treating the crushing season to mean 160 days which was less than the period of the crushing season‑‑‑Mill owners would. therefore, be entitled to the benefit of the departmental interpretation and were allowed to clear the excess stocks on payment of duty prescribed in S.R.O. No.545(I)/94, dated 9‑6‑1996 and the conditions mentioned in S. R. O. No.476(I)/95 as to the operation of the mills for the period prescribed therein would not be applicable to the stocks that were produced in excess in terms of S.R.O.No.545(I)/94‑‑‑Constitutional petition was allowed accordingly.

Messrs Army Welfare Sugar Mills Ltd. v. Federation of Pakistan 1992 SCMR 1652 and Collector Customs and Central Excise, Government of Pakistan v. Bawany Sugar Mills Ltd. 2000 SCMR 1266 ref.

Hamid Khan for Petitioner.

A. Karim Malik for Respondents.

Date of hearing:. 31st January. 2002.

2002 C L D 1244

[Lahore]

Before M. Javed Buttar and Syed Jamshed Ali, JJ

MAHBOOB ALAM and another‑‑‑Appellants

Versus

CITIBANK and another‑‑‑Respondents

Execution First Appeal No. 8 of 2000, heard on 8th May 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 18 & 21‑‑‑Civil Procedure Code (V of 1908), O.XXI, R.58‑‑‑Execution of decree‑‑‑Investigation of claim in respect of mortgaged property‑‑‑Appellant claimed to be the owner in possession of disputed property on the basis of transfer letter issued by the Development Authority and was in possession of original sale‑deed executed in favour of judgment-debtor, and that disputed property had never been mortgaged‑‑‑Decree‑holder Bank had also produced original sale‑deed executed in favour of judgment‑debtor‑‑‑Banking Court dismissed appellant's application summarily‑‑­Validity‑‑‑Deeper inquiry/ investigation was required to ascertain whether any equitable mortgage had been created by judgment‑debtor in favour of Bank or not‑‑‑Banking Court had dismissed appellant's application in haste‑‑‑High Court allowed the appeal, set aside impugned order and remanded the case to Banking Court for its fresh decision on merits after holding a proper inquiry.

M. Abbas Mirza for Appellants.

Shahid Ikram Siddiqui for Respondent No. 1.

Date of hearing: 8th May, 2002.

2002 C L D 1245

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

SADIQ ALI and 2 others ‑‑‑ Appellants

versus

NATIONAL BANK OF PAKISTAN and 2 others‑‑‑Respondents

First Appeal from Order No. 288 of 1998, heard on 13th May, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 19(7) & 22‑‑‑Transfer of Property Act (IV of 1882). S.58(f)‑‑‑Investigation of claim and objection, whether property was mortgaged or not‑‑‑Mortgage by deposit of title deeds‑‑‑Bank claiming to be mortgagee of three properties by deposit of title deeds was having original title deed in respect of one property‑‑‑Original title deeds in respect of other two properties were with appellants claiming to be bona fide purchasers thereof for valuable consideration‑‑­Contention of Bank was that judgment‑debtor had submitted to Bank an affidavit alongwith attested copies of title deeds and a power of attorney in respect of other two properties, thus, on their basis mortgage by deposit of title deeds stood created in favour of Bank‑‑‑Validity‑‑‑Such contention was legally not well‑founded ‑‑‑Bank was required to obtain original title deeds‑‑‑Title deeds were not lost as had been stated by judgment‑debtor to Bank‑‑‑Bank had been defrauded by judgment‑debtor‑‑Bank had to bear the consequences of such fraud and not the appellants, who were bona fide purchasers of two properties for valuable consideration and also holding original title deeds thereof‑‑­Bank could assert its security rights as mortgagee in respect of only one property‑‑‑High Court accepted appellants' appeal in respect of other two properties by allowing his objection petition to that extent.

Iftikhar Ullah Malik for Appellants.

Mian Muhammad Qamar‑uz‑Zaman for Respondents.

Date of hearing: 13th May, 2002

2002 C L D 1247

[Lahore]

Before Mian Saqib Nisar and Muhammad Sair Ali, JJ

STANDARD CHARTERED BANK through Attorney of Bank‑‑‑Appellant

versus

Messrs ASIAN BODY BUILDING WORKS and 9 others‑‑‑Respondents

Regular First Appeal No. 64 of 1995, heard on 21st May 2002.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑Ss. 6 & 12‑‑‑Suit for recovery of bank loan‑‑‑Leave to appear and defend suit unconditionally‑ ‑‑Entitlement‑‑­Leave application filed by defendants was pending when Banking Court rejected the plaint on the ground that Bank had written, off the amount sought to be recovered after procuring sanction from State Bank of Pakistan ‑‑‑Validity‑Plaint with its original contents could not have been rejected on account of letter, dated 5‑2‑1981 issued by Bank to defendants on account of sanction for writing off the loan­-Such subsequent development at the best had given a plausible defence to defendants to seek leave to appear and defend unconditionally‑‑‑Banking Court should not have hastily rejected the plaint, rather should have granted the leave and thereafter on the basis of written statement and issues framed should have considered the effect of said letter and sanction of State Bank of Pakistan for writing‑off the loan‑‑‑High Court accepted appeal and set aside impugned order observing that suit would be deemed pending before Banking Court, which would decide the leave application of defendants in accordance with law.

Asim Nazir for Appellant.

Sh. Umar Draz for Respondents.

Date of hearing: 21st May, 2002.

2002 C L D 1249

[Lahore]

Before Naseem Sikandar and Muhammad Sayeed Akhtar, JJ

Syed MUNIR HUSSAIN GILLANI‑‑‑Appellant

versus

HABIB BANK LIMITED and another‑‑‑Respondents

Execution First Appeal No. 485 and Civil Miscellaneous Application No. 6‑C of 2001, decided on 11th April, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 19 & 22‑‑‑Civil Procedure Code (V of 1908), O.LVII, R.1 & S.151‑‑‑Review of judgment passed by High Court in appeal filed against execution of decree‑‑‑Court Auctioneer auctioned the property for Rs.22,00,000 while judgment­-debtor's contention was that its market value was not less than Rs.20 million‑‑‑High Court in order to provide an opportunity to the judgment‑debtor to save his property had directed him to pay within specified time the decretal amount with profits @ 13% on Rs.22, 00, 000 (amount paid by auction purchaser) ‑‑‑High Court during proceedings on review application allowed another opportunity to judgment­-debtor to fetch a buyer of R.5 million to save his property‑‑­Judgment‑debtor instead of availing that opportunity to produce a buyer for his property was attempting to delay the proceedings on one pretext or the other‑‑‑Auction purchaser had deposited the purchase price more than one year back and since then he was being denied possession of property without any justifiable cause‑‑High Court disallowed further request for extension in time‑‑‑None of the conditions necessary for review of order as contemplated in O.LXVII, R.I. C.P.C. having been made out, High Court refused to grant the review petition.

Syed Hamid Ali Shah for Appellant.

M.M. Malik, Faisal Mahmood Khan and Hafiz Muhammad Tahir for Respondents.

2002 C L D 1252

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

KHURSHID ANWAR ‑‑‑Appellant

versus

UNITED BANK LIMITED., BANK SQUARE BRANCH, FAISALABAD through General Attorneys and Principal Offices of the Bank and others‑‑‑Respondents

Regular First Appeals Nos. 83 and 111 of 1991, heard on 17th April, 2002.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6‑‑‑Contract Act (IX of 1872), Ss. 133 & 135‑‑‑Suit for recovery of loan amount‑‑‑Variance in terms of guarantee enhancing rate of interest from 1396 to 1496‑‑‑Defendant­guarantor contended that such variation made without his concurrence was sufficient to discharge him from personal liability for debts of Company‑‑‑Validity‑‑‑Enhancement in rate of interest had been approved by borrower‑company in a meeting of its directors held four years before filing of suit by Bank‑‑‑Defendant as one of the directors was present in the meeting and had certified the minutes of meeting, which had been sent to Bank‑‑‑Defendant had not, at any point of time claimed discharge from his personal liability nor he could urge now that such enhancement had been made without his concurrence‑‑‑Defendant could not be allowed to benefit from provisions of Ss. 133 & 135 of Contract Act, 1872 as the liability of borrowing company and that of defendant stood created when rate of interest was enhanced‑‑‑Defendant as such was personally liable for the amount payable by borrowing‑company.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6‑‑‑Limitation Act (IX of 1908), S.19‑‑‑Suit for recovery of loan amount‑‑‑Limitation‑‑‑Bank filed suit on 8‑11‑1984 for recovery of loan facilities advanced in year 1975‑‑­Contention of defendant‑guarantor was that suit was time­barred‑‑‑Validity‑‑‑Borrower‑Company had acknowledged its liability outstanding on 31‑12‑1981, which acknowledge­ment had been signed by defendant on behalf of the company‑‑‑Suit filed within three years from date of said acknowledgement was not time‑barred.

(c) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑‑

‑‑‑S.6‑‑‑Contract Act (IX of 1872), Ss. 2(h) & 124‑‑‑Suit for recovery of loan amount‑‑‑Defendant‑guarantor contented that he executed contract of guarantee, while same was blank‑‑‑Validity‑‑‑Defendant had not denied his signatures on guarantee‑‑‑Defendant being director was fully aware of the terms stipulated by Bank for finance availed by the company and personal guarantees of the directors was one of such terms‑‑‑Defendant had signed a letter written on behalf of company to Bank stating therein that personal guarantee of active directors including defendant should be treated as sufficient compliance of the requirement of Bank for personal guarantees of directors‑‑‑Defendant could not be allowed to resile from his personal guarantee in view of express words of said letter.

Abid Aziz Sheikh for Appellant.

Khalid Pervaiz Khawaja for Respondents.

Date of hearing: 17th April. 2002.

2002 C L D 1256

[Lahore]

Before Ch. Ijaz Ahmad, J

MATEEN AHMED RANA ‑‑‑Petitioner

Versus

UNITED BANK LIMITED, through President and 3 others‑‑‑Respondents

Writ Petition No. 14923 of 2000 and Civil Miscellaneous No.474 of 2002, heard on 15th May, 2002.

(a) Auction---

‑‑‑‑Public auction‑‑‑Mere participation in auction proceedings as highest bidder would not create any vested right in favour of the participant.

Munshi Muhammad v. Faizan‑ul‑Haq 1971 SCMR 533 fol.

(b) Constitution of Pakistan (1973)‑‑‑

‑‑‑Art. 199‑‑‑Constitutional petition‑‑‑Auction‑‑‑Highest bidder‑‑‑Vested right‑‑‑Public notice for auction of truck‑‑­Petitioner's bid was the highest and he deposited 1 /4th of bid money‑‑‑Bank refused to hand over truck to petitioner, though he was ready to pay entire amount in terms of the bid offered by him‑‑‑Petitioner filed Constitutional petition on 25‑7‑2000, which was fixed for hearing on 27‑7‑2000‑‑­Bank filed parawise comments on 19‑8‑2000 taking the plea that bid of petitioner was not approved and was rejected on 19‑7‑2000 and petitioner was directed to withdraw the amount deposited by him‑‑‑Mere participation in auction proceedings held by Bank and being a highest bidder, did not create any vested right in favour of petitioner‑‑‑Bank had rejected bid on 19‑7‑2000 without giving intimation to petitioner qua rejection of his bid and directing him to withdraw his deposited amount‑‑‑High Court directed Bank to return the amount to petitioner alongwith profit from 17‑7‑2000 to 19‑8‑2000 within specified time‑­Constitutional petition was disposed of accordingly.

Munshi Muhammad v. Faizan‑ul‑Haq 1971 SCMF 533 fol.

Ijaz Feroze for Petitioner.

Sheikh Asif Feroze for Respondents.

Ch. Majid Hussain for Applicants (in C.M. No. 479 of 2002).

Date of hearing: 15th May, 2002.

2002 C L D 1259

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

MAHBOOB AHMED ‑‑‑Appellant

Versus

CITIBANK ‑‑‑Respondent

First Appeal from Order No 139 of 2002, heard on 14th May, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 9(5). 10, 12 & 22‑‑‑Setting aside of ex parte decree‑‑­Banking Court refused to set aside the decree‑‑‑Envelope of courier service did not indicate its issuance by any Court or set out the consequences of its non‑acceptance‑‑‑Courier reported that appellant was not available in Pakistan‑‑­Contention of Bank that appellant had been served through affixation was repelled as there was no order passed by Banking Court ordering service through affixation‑‑‑Modes of service provided under Financial Institutions (Financial Institutions) Ordinance. 2001. did not include service through affixation‑‑‑Banking Court could have passed an order to have the appellant served through any other mode including affixation, which had not been done in the present case‑‑‑Banking Court had treated the citation in daily newspaper as good service on appellant on the ground that said newspaper was also read in America by Pakistani community‑‑‑Citation was not constituted proper service. as appellant had been able to establish in Court through copies of his passport that he was not in Pakistan at the time of citation‑‑‑High Court accepted appeal set aside the ex parte decree and allowed ten days time to appellant for filing of application for leave to appear and defend before Banking Court.

Malik Waqar Saleem for Appellant.

Ashar Elahi for Respondent.

Date of hearing: 14th May. 2002.

2002 C L D 1261

[Lahore]

Before Amir Alam Khan and Muhammad Sair Ali, JJ

HABIB BANK LIMITED, FAISALABAD and others‑‑‑Appellants

versus

Messrs AWAN TEXTILE MILLS LIMITED COMPANY, FAISALABAD and others‑‑‑Respondents

First Appeal from Order No. 142 of 2000, heard on 24th May, 2001.

(a) Banking Companies (Recovery of Loans Advance Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑Ss. 12(2)‑‑‑Banking Tribunals Ordinance (LVIII of 1984) S.6(2)‑‑‑Civil Procedure Code (V of 1908), S.12(2)--Setting aside of ex parte decree‑‑‑Time‑barred reply to show‑cause notice‑‑‑Service on appellants (minor defendants) was effected through their mother (appellant herein) by publication in newspapers, dated 12‑4‑1995, 15-4‑1995 and 13‑6‑1995‑‑‑Reply to show‑cause notice was filed appellants on 19‑9‑1995 long beyond 10 days provided under S.6(2) of Banking Tribunal Ordinance, 1984‑‑‑Case was transferred to High Court after promulgation of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Banking Court after notices including publication in newspapers, took up the case and passed ex parte decree against appellants for their non‑appearance‑‑­Appellants filed application for setting aside decree on the ground of non‑service of notices upon them after transfer of case to High Court‑‑‑Banking Court on statement of decree­holder regarding satisfaction of decree disposed of the application as having become infructuous‑‑‑Validity‑‑‑Time barred leave petition had debarred appellants from seeking defence of suit‑‑‑Appeal being continuation of suit could not entitle appellants to by pass statutory bar of limitation for seeking in appeal defence of suit through removal of judgment and decree passed in the suit‑‑‑Lapse limitation had foreclosed appellants' right to seek Court's consideration to other grounds relevant for suit's defence only‑‑‑Appellants were not entitled to defend the suit for halving filed reply to show‑cause notice beyond 10 days period of limitation‑‑‑High Court dismissed the appeal in circumstances.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 10. 12(2) & 21‑‑‑Time‑barred application for leave to defend‑‑‑Effect‑‑‑Time‑barred leave petition would debar defendant from seeking defence of suit‑‑‑Appeal being continuation of suit could not entitle defendant to by pass the statutory bar of limitation for seeking in appeal defence of suit through removal of judgment and decree passed in the suit‑‑‑Lapse of limitation forecloses defendant's right to seek Court's consideration on other grounds relevant for suit's defence only.

R.A.F. No. 75 of 2000 fol.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S. 15‑‑‑Banking Tribunals Ordinance (LVIII of 1984), S. 11(4)‑‑‑Decree‑‑‑Awarding of liquidated damages‑‑­Validity‑‑‑Such damages could not be awarded either under S.11(4) of Banking Tribunals Ordinance, 1984 or under provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances), Act, 1997.

S.M. Zaman for Appellant.

Shams Mehmood Mirza for Respondent No.1.

Date of hearing: 24th May. 2001.

2002 C L D 1265

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

ZULFIQAR ALI ‑‑‑Appellant

versus

HABIB BANK LIMITED through Manager‑‑‑Respondent

Regular First Appeal No. 558 of 1999, heard on 17th April, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑Ss. 15 & 21‑‑‑Decree for recovery of loan with mark‑up and taw charges‑‑‑B had issued an Incentive Scheme, dated 12‑10‑1998 providing that if defaulting borrower paid 10096 of principal amount then due within 60 days, then mark­up would be waived by Bank‑‑‑Judgment‑debtor had paid Rs.5,000 on 12‑11‑1998 under bona fide impression that such payment coupled with earlier payment of Rs.1,27.618 had resulted in payment of entire principal amount‑‑­Contention of Bank was that a sum of Rs.81,688 as decreed together with law charges in excess of Rs.40, 000 was due and payable by judgment‑debtor‑‑‑Judgment‑debtor had deposited Rs.42.963 pursuant to an order passed in present appeal‑‑‑High Court while taking into account the bona fides of judgment‑debtor ordered that subject to payment of Rs.30.000 as legal charges of Bank within 60 days he would stand absolved of all liability under impugned judgment and decree and in case of his failure to do so, he would be liable to pay the entire decretal debt‑‑‑Appeal was disposed of accordingly.

Miss Gulzar Butt for Appellant.

Nisar Ahmad Nisar for Respondent.

Date of hearing: 17th April, 2002.

2002 C L D 1267

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

MANZOOR AHMED and 3 others‑‑‑Appellants

Versus

CHAIRMAN, AGRICULTURE DEVELOPMENT BANK OF PAKISTAN and 4 others‑‑‑Respondents

Regular First Appeal No. 157 of 2002, heard on 30th May, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 9 & 22‑‑‑Suit by customer seeking rendition of accounts from Bank‑‑‑Plaintiffs‑customers deposited certain amount in pursuance of Court's order, but on their failure to deposit further amount, their suit was dismissed‑‑­Contention of plaintiffs was that Banking Court could not order them to deposit any amount nor their suit could be dismissed for such default‑‑‑Validity‑‑‑Plaintiffs' contention was well‑founded ‑‑‑Plaintiffs had sought rendition of accounts. There was no legal justification for ordering them to deposit any amount‑‑‑Requirement of depositing any amount constituted a clog on the right of a citizen to seek legal redress‑‑‑High Court accepted appeal and set aside impugned order resultantly the suit would be deemed to be pending before Banking Court to be decided on merits in accordance with law.

Malik Tauseef Ijaz for Appellants.

Pervaiz Ahmad Barki for Respondents.

Date of hearing: 30th May, 2002.

2002 C L D 1269

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Rana MUHAMMAD SHAFI and another‑‑‑Appellants

versus

M. JAVED ISBAL SIDDIQUI, JUDGE, BANKING COURT NO. 1, GUJRANWALA and 2 others‑‑‑Respondents

Execution First Appeal No. 671 of 2001, decided on 15th April, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 19 & 22‑‑‑Execution of decree‑‑‑Order of Banking Court allowing decree‑holder Bank to participate in auction‑‑‑No exception could be taken to such order in absence of any prejudice caused to judgment‑debtor‑‑‑High Court dismissed the appeal in circumstances.

S.M. Rasheed for the Appellants.

Ch. Farrukh Mehmood for the Respondents.

2002 C L D 1270

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

MUHAMMAD YUSAF‑‑‑Appellant

versus

A.D.B.P.‑‑‑Respondent

Regular First Appeal No. 896 of 2001, decided on 6th May. 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑S.9(l)(2)‑‑‑Bankers' Books Evidence Act (XVIII of 1891). Ss. 2(8) & 4‑‑‑Suit by customer against Bank‑‑‑Requirement of filing of statement of account with plaint‑‑‑Banking Court rejected plaint for not being supported by statement of accounts‑‑‑Validity‑‑‑Provisions of S.6(1)(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, required customer to append with the plaint a statement of account‑‑‑Only concession available to customer was that such statement of account was not required to be certified in the manner prescribed under Bankers' Books Evidence Act. 1891‑‑‑Plaintiff having failed to file statement of account, Banking Court was justified in rejecting the plaint.

Muhammad Rashid Mirza for Appellant.

Ch. Farrukh Mehmood for Respondent.

2002 C L D 1271

[Lahore]

Before Maulvi Anwarul Haq and Parvez Ahmad. JJ

Messrs UNITED BANK LIMITED, BANK SQUARE BRANCH, LAHORE‑‑‑Appellant

Versus

Messrs J.J. TRANDERS and 7 others‑‑‑Respondents

Regular First Appeal No. 340 of 1995, heard on 22nd April 2002.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑Ss. 6 & 12‑‑‑Suit for recovery of bank loan‑‑ ‑Production of additional evidence during pendency of suit‑‑‑Bank produced one witness in its affirmative evidence and reserved its right to produce evidence in rebuttal‑‑‑Bank made application for additional evidence to prove signatures of a witness on plaint‑ ‑‑Banking Court rejected the application and dismissed the suit‑‑‑Validity‑‑‑Proceedings in the suit were in process, when application for additional evidence was made‑‑‑Object of the application was not to patch up the lacunas in evidence‑‑‑Statement of such witness if recorded, would have facilitated the Court with regard to appraisal of facts requisite for disposal of suit‑‑­Banking Court had wrongly rejected the application‑‑‑High Court accepted the appeal, set aside the impugned judgment and decree and remanded the case to Banking Court with direction to allow Bank to produce said witness in the suit.

Imtiaz Ahmad Ch. for Appellant.

Nemo. for Respondents.

Date of hearing: 22nd April, 2002.

2002 C L D 1275

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

UNITED BANK LIMITED, STOCK EXCHANGE BRANCH, LAHORE‑‑‑Appellant

Versus

S. KHALID HAKEEM‑‑‑Respondent

Regular First Appeal No. 66 of 1994, heard on 15th May, 2002.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑Ss. 6 & 12‑‑‑Limitation Act (IX of 1908), S.19 & Art. 59‑‑­Suit for recovery of bank loan based on promissory note‑‑­Promissory note was dated 13‑5‑1974‑‑‑Suit was filed on 12‑3‑1993‑‑‑Document relied upon by Bank constituting an acknowledgement was dated 31‑2‑1992‑‑‑Banking Court dismissed the suit as being time‑barred‑‑‑Validity‑‑‑For an acknowledgement to be valid under S.19 of Limitation Act. 1908 for the purpose of extending the period of limitation, the same ought to have been executed within three years from the date of promissory note‑‑‑Impugned judgment and decree was in accordance with law‑‑‑Suit had rightly been dismissed as being barred by limitation‑‑‑High Court dismissed appeal in circumstances.

A.D. Sajid for Appellant.

Nemo for Respondent.

Date of hearing: 15th May, 2002.

2002 C L D 1276

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Appellant

versus

NOOR BIBI‑‑‑Respondent

Regular First Appeal No. 116 of 1995, heard on 8th April, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑S.6‑‑‑Recovery of bank loan‑‑‑Unauthorized entries in statement of accounts‑‑‑Borrower disputed certain entries made by the Bank in the statement of accounts‑‑‑On the direction of Banking Tribunal the Bank prepared a fresh statement of accounts‑‑‑Banking Tribunal found that two entries in the statement of accounts were not in accordance with law‑‑‑Suit was decreed by the Tribunal after deducting the unauthorized entries‑‑‑Validity‑‑‑While deducting the unauthorized entries from the statement of accounts, in the present case, the Banking Tribunal did not commit any illegality‑‑‑No legal infirmity could be found with the judgment and decree which was legal, unexceptionable and not calling for any interference by High Court‑‑‑Appeal was dismissed in circumstances.

Qaiser Javed Mian for Appellant.

Nemo for Respondent.

Date of hearing: 8th April, 2002.

2002 C L D 1279

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

AMJAD LATIF and 5 others‑‑‑Appellants

versus

ALLIED BANK OF PAKISTAN‑‑‑Respondent

Regular First Appeal No. 129 of 2002, heard on 18th April, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑S.22‑‑‑Banking Tribunal Ordinance (LVIII of 1984), S.6‑‑­Appeal‑‑‑Conditional leave to appear and defend the suit, non‑compliance of‑‑‑Decree without trial ‑‑‑Banking Court while passing judgment and decree had neither referred to the leave granting order nor reached the conclusion that the conditional leave‑granting order was not complied with by the appellants‑‑‑Validity‑‑‑High Court found no justification for the suit of the Bank being decreed without trial as a regular suit at least in respect of the present appellants, who were legal representatives of the borrower`‑‑Judgment and decree passed by the Banking Court were set aside and the case was remanded to the Banking Court for decision afresh‑‑‑Appeal was allowed accordingly.

Asghar Hameed Bhutta for Appellants.

Mian Azhar Hussain for Respondent.

Date of hearing: 18th April, 2002.

2002 C L D 1280

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Manager‑‑‑Plaintiff

versus

Malik IFTIKHAR AHMED ‑‑‑Defendant

Regular First Appeal No. 62 of 1995, heard on 2nd April 2002.

(a) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.20‑‑‑Mistake as to a matter of fact‑‑‑One of the parties under mistake contended that the agreement was void under S.20 of Contract Act, 1872‑‑‑Validity‑‑‑Where both the parties were not under a mistake but only one party was under misconception of facts, the agreement was not void under S.20 of Contract Act, 1872.

(b) Banking Tribunals Ordinance (L VIII of 1984)‑‑‑

‑‑‑Ss. 6 & 9‑‑‑Contract Act (IX of 1872), S.20‑‑‑Appeal‑‑­Incentiue Scheme, withdrawal of‑‑‑Mistake of fact‑‑‑Incentive letter was issued by Bank to the borrower for deposit of certain amount as full and final payment‑‑‑Borrower in compliance of the letter deposited the amount so demanded with the Bank‑‑‑Banking Court, in the light of amount deposited under the letter decreed the suit in favour of the Bank‑‑‑Plea raised by the Bank was that the letter was issued to the borrower under mistake of fact, therefore, the judgment and decree passed by the Banking Court was liable to be set aside‑‑‑Validity‑‑‑Bank had itself offered the borrower to deposit certain amount on which the remaining amount would be waived‑‑‑By depositing the requisite amount, the borrower accepted the offer, thus, an agreement enforceable under law came into existence‑‑‑After deposit of the requisite amount and having accepted the terms of offer by the borrower, the Bank had no lawful authority to unilaterally retrieve from the terms of the offer, which to all intents and purposes were implemented‑‑‑Judgment and decree passed by Banking Court being valid in law‑‑‑High Court declined to interfere with the same.

Malik Iftikhar Ahmad for Appellant.

Respondent: Ex parte.

Date of hearing: 2nd April, 2002.

2002 C L D 1284

[Lahore]

Before Maulvi Anwarul Haq and Pervez Ahmad, JJ

Messrs ASAKE INDSUTRIES (PVT.) LIMITED through Chief Executive and others---Appellants

versus

Messrs ATLAS LEASE LIMITED and another---Respondents

Regular First Appeal No. 315 of 2000, heard on 2nd May, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----S.9---Quanun-e-Shahadat (10 of 1984), Art.l7---Recovery of bank loan---Letter of guarantee not signed by two witnesses as required under Art.17 of Qanun-e-Shahadat Order. 1984---Effect---Requirement of the second witness on the document was based on injunctions of Islam as contained in the Holy Qur'an---Where the execution of the document and the arrangement contained therein or contents thereof were not denied, the provision of Art.] 7 of Qanun-e-Shahadat, 1984, would not come into play ---Non­-signing of letter of guarantee by the second witness was just a technicality and the same was rightly ignored by the Banking Court in circumstances.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

---S.9---Recovery of bank loan---Terms of loan agreement--­Total loss of machinery---Machinery installed by the borrower was totally destroyed, as a result of fire, therefore, the borrower failed to repay the loan---Banking Court decreed the suit in favour of the Bank---Contention of the borrower was that it was agreed between the parties that in case of total loss of machinery only the amount of agreed loss value was to be paid to the Bank---Effect---No dispute existed that fire took place and the machinery was destroyed. therefore, the contention of the borrower had force---Bank, in circumstances, was only entitled to the amount of agreed loss value---Judgment and decree passed by the Banking Court was modified to the extent of the value of agreed loss---Appeal was allowed accordingly.

Ijaz Feroze for Appellants.

Asim Hafeez for Respondent No. 1.

Nemo for Respondent No.2.

Date of hearing: 2nd May. 2002.

2002 C L D 1288

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

ASIM SHAHZAD‑‑‑Appellant

versus

MUSLIM COMMERCIAL BANK LIMITED through President and another‑‑‑Respondents

First Appeal from Order No. 407 of 2001, heard on 23rd April, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.12‑‑‑Ex parte decree, setting aside of‑‑‑Service on wrong address‑‑‑Plaint filed by the Bank gave two addresses, of the borrower‑‑‑Both the addresses were not the ones which were given by the borrower in loan agreement‑‑‑Process was served on the addresses given in the plaint‑‑‑Borrower did not appear before the Banking Court and the suit was decreed ex parte‑‑‑Application to set aside the ex parte decree was filed by the borrower which was dismissed by the Banking Court‑‑‑Validity‑‑‑Where the addresses given in the plaint could not be taken to be the addresses for sufficient service on the borrower, the Banking Court wrongly dismissed the application‑‑‑High Court set aside the ex parte judgment and decree passed by the Banking Court, allowed the borrower to file application for leave to appear and defend the suit and remanded the case to Banking Court for decision afresh‑‑‑Appeal was allowed accordingly.

Azmatullah Chaudhry for Appellant.

Wasim Majid Malik for Respondents, Date of hearing: 23rd April, 2002.

2002 C L D 1290

[Lahore]

Before Syed Jamshed Ali and Syed Zahid Hussain, JJ

Messrs AGRO FOOD LIMITED through Chief Executive and 4 others‑‑‑Appellants

versus

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Manager‑ ‑‑Respondent

Regular First Appeal No. 592 of 1999, heard on 19th March, 2002.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑S.6‑‑‑Recovery of bank loan‑‑‑Loss in business‑‑‑Claim against insurance company‑ ‑‑‑Defendants in their application for leave to appear and defend the suit admitted the claim of the Bank and had stated that they had suffered loss due to heavy floods‑‑‑Trial Court decreed the suit in favour of the Bank‑‑‑Plea raised by the defendants was that as the project was insured on the direction of the Bank, therefore, it was the responsibility of the Bank to persuade the insurance company for the claim of defendants ‑‑‑Validity‑‑­Defendants who were aggrieved of the action of the insurance company in refusing to admit their claim could seek their remedy in a suit against the insurance company‑‑‑Merely because the defendants had suffered loss on account of ,floods would not relieve them of their liability under the agreement ‑‑‑Triable issue, according to the defendants in the application for leave to appear and defend was the damage to the project and the liability of the Bank to get the claim settled from the insurance company, which was not the responsibility of the Bank‑‑‑High Court declined to interfere with the judgment passed by the Banking Tribunal‑‑‑Appeal was dismissed in circumstances.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑S.151‑‑‑Consolidated judgment‑‑‑Scope‑‑‑Disposal of two suits by consolidated judgment‑‑‑Validity‑‑‑Where both the suits involved common questions of law and fact. there was nothing illegal in the disposal of the two suits by consolidated judgment.

(c) Banking Tribunal Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6‑‑‑Transfer of Property Act (IV of 1882). S.67‑‑‑Right to foreclosure or sale‑‑‑Recovery of bank loan‑‑‑Borrower was ready to surrender mortgaged property in lieu of outstanding loan‑‑‑Contention of the Bank was that the borrower apart from mortgage of the property, had also executed letters of guarantees‑‑‑Effect‑‑‑Not only the mortgaged property could be proceeded against but the Bank could lawfully enforce the personal covenant against the borrower and guarantor‑‑‑Merely because the borrower was prepared to surrender the mortgaged property in favour of the Bank. the personal covenant was not wiped out in circumstances.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.14‑‑‑Civil Procedure Code (V of 1908). O.XXXIV‑‑­Preliminary decree, passing of‑‑‑Banking Court instead of passing preliminary decree passed final decree immediately‑‑‑Validity‑‑‑Banking Court was not required to pass a preliminary decree as provided under O.XXXIV, C.P.C. and could straightaway pass a final decree under S.14 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997.

(e) Banking Tribunals Ordinance (L VIII of 1984)‑‑‑

‑‑‑‑S.6(2)‑‑‑Banking Companies (Recovery of Loans), Rules, 1980, R.8‑‑‑Leave to appear and defend the suit‑‑­Limitation‑‑‑Computation‑‑‑Defendants were served through ordinary process on 7‑3‑1997 while they had already been served through registered post acknowledgement due on 25‑2‑1997‑‑‑Application for leave to appear and defend was filed on 15‑3‑1997‑‑‑Plea raised by the defendant was that the starting point of computation of limitation was 7‑3‑1997, when the summons were served through ordinary process‑‑­Validity‑‑‑Application filed on 15‑3‑1997 was beyond the prescribed period of 10 days under S. 6(2) of Banking Tribunals Ordinance, 1984‑‑‑Mode of service provided under R.8 of Banking Companies (Recovery of Loans) Rules, 1980, was applicable for service under Banking Tribunals Ordinance, 1984‑‑‑Application for leave to appear and defend the suit was time‑barred in circumstances.

Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 ref.

Asghar Hameed Bhutta for Appellants.

Sheikh Javaid Sarfraz for Respondent.

Date of hearing: 19th March, 2002.

2002 C L D 1297

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Appellant

versus

MUHAMMAD TARIQ‑‑‑Respondent

Regular First Appeal No. 124 of 1995. decided on 8th April, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑S.6‑‑‑Contract Act (IX of 1872), S.74‑‑‑Recovery of bank loan‑‑‑Liquidated charges, insurance claim and cushion charges‑‑‑All such charges were included in the statement of accounts filed by the Bank at the time of filing of the suit for recovery of bank loan‑‑‑Banking Tribunal decreed the suit but did not allow the charges‑‑‑Validity‑‑‑Banking Tribunal had rightly declined liquidated charges to the Bank as the Tribunal had no authority to allow the same under the provisions of Banking Tribunals Ordinance, 1984‑‑­Insurance claim and cushion charges could not be recovered/ charged from the borrower as the same were not agreed between the parties‑‑‑Reasons given by the Banking Tribunal for refusal of the insurance claim and cushion charges were in accordance with law‑‑‑High Court declined to interfere with the judgment passed by .the Banking Tribunal‑‑‑Appeal was dismissed in circumstances.

Allied Bank of Pakistan Ltd. Faisalabad v. Messrs Aisha Garments and others 2001 MLD 1955 ref.

Nemo for Appellant

2002 C L D 1299

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

SIDDIQUE WOOLLEN MILLS through all its Partners and 5 others‑‑‑Appellants

versus

ALLIED BANK OF PAKISTAN LIMITED through Manager and General‑Attorney, Badami Bagh Branch, Lahore‑‑‑Respondent

First Appeal from Order No. 172 of 2001, heard on 28th May, 2002.

Civil Procedure Code (V of 1908)‑‑‑

‑‑‑O.XXI, Rr. 54, 66 & 89‑‑‑Execution of decree‑‑‑Auction sale, setting aside of‑‑‑Proclamation of sale not consistent with the Court order‑‑‑Land to be auctioned was 3 Kanals, and 6 Marlas as mentioned in the Fard Taliqa, whereas land put to auction was 7 Kanals‑‑‑At the top of the proclamation. property meant to be auctioned was shown as 3 Kanals. 6 Marlas, while at a later point in the proclamation total area was stated to be 7 Kanals‑‑‑Neither there was any warrant of attachment for 7 Kanals nor there was any order of Executing Court attaching 7 Kanal of land‑‑‑Appellants were ready to deposit bid money in the Executing Court‑‑‑High Court set aside the auction sale subject to deposit of bid money by the appellants‑‑‑Appeal was allowed accordingly.

Sahibzada Riaz Anwar for Appellants.

Aish Bahadur Rana and Mazhar Hakeem for Respondent

Date of hearing: 28th May, 2002.

2002 C L D 1301

[Lahore]

Before M. Javed Buttar and Syed Jamshed Ali, JJ

QAISER HUSSAIN BHATTI‑‑‑Appellant

versus

HABIB BANK LIMITED through President and 2 others‑‑‑Respondents

First Appeal from Order No. 10 of 2001, heard on 23rd April, 2002.

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑O.XXI, R.37‑‑‑Execution of decree‑‑‑Detention of judgment­-debtor‑‑‑Non‑issuance of show‑cause notice‑‑‑In execution proceedings, decree‑holder filed application under O.XXI, R.37. C.P.C. and notice was issued to the judgment‑debtor‑‑‑On the same day, after issuance of notice by the Executing Court, the decree‑holder made an oral, statement alleging that the judgment‑debtor might leave the territorial jurisdiction of the Executing Court, therefore, the notice was withdrawn and warrant of arrest was issued with a direction that the judgment‑debtor would remain in prison till realization of the decretal amount‑‑‑Judgment‑debtor was arrested and confined to prison who remained there for five months‑‑‑Validity‑‑‑Without adopting the normal procedure of summoning the judgment‑debtor through a show‑cause notice for the satisfaction of the decree and of the attachment of movable and immovable property of the judgment‑debtor, the Executing Court had acted in haste in ordering the arrest and detention of the judgment­-debtor‑‑‑Order of detention‑ was passed by Executing Court without any lawful justification and the same was set aside‑‑‑Appeal was allowed in circumstances.

(b) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑O.XXI. R.37‑‑‑Execution of decree‑‑‑Apprehension of absconding of judgment‑debtor‑‑‑Issuance of warrant of arrest by Executing Court in the first instance‑‑‑Instead of issuance of show‑cause notice to the judgment‑debtor, on apprehension of the decree‑holder, the Executing Court issued the warrant of arrest and detained the judgment­-debtor in prison‑‑‑Judgment‑debtor deposited a sum of Rs.50, 000 with the decree‑holder and was released from the prison‑‑‑Effect‑‑‑Deposit of the amount showed that the apprehension was not well founded and instead of straightaway sending the judgment‑debtor to jail. He could have been bound, down through an acceptable security or surety bond to ensure his presence on each and every date of hearing‑‑‑Order of detention was set aside by High Court in circumstances.

Muhammad Ajmal Khan for Appellant.

Syed Nazir Hussain Shah for Respondents.

Date of hearing: 23rd April, 2002.

2002 C L D

[Lahore]

Before Jawwad S. Khawaja and

Abdul Shakoor Paracha, JJ

MUHAMMAD SHAHZAD SHARIF‑‑‑Appellant

versus

HABIB BANK LTD. through President and another‑‑‑Respondents

First Appeal from Order No 167 of 2002, decided on 10th June, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑S.12‑‑‑Financial 'Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.12‑Ex parte decree, setting aside of‑Service of process‑‑‑Appellant was not served under law‑‑‑Effect‑‑‑Judgment and decree passed against the appellant was set aside by High Court‑‑‑High Court allowed the appellant to file application seeking leave to appear and defend within ten days‑Appeal was allowed accordingly.

S.M. Nasem for the Appellant.

Irshad Hussain Bhatti for Respondents.

2002 C L D 1306

[Lahore]

Before Maulvi Anwarul Haq and Parvez Ahmed, JJ

NATIONAL BANK OF PAKISTAN through Senior Vice‑President‑‑‑Appellant

versus

Messrs YAQOOB RICE MILLS through Partners 2 to 5 and 5 others‑‑‑Respondents

Regular First Appeal from Order No. 73 of 1991, heard on 13th May, 2002.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑Ss.7 & 12‑‑‑Civil Procedure Code (V of 1908), O.VII, R.11‑‑­Plaint, rejection of‑‑‑Cause of action‑‑‑Factual controversy‑‑­Plaint filed by Bank was rejected by Banking Court as it showed no cause of action‑‑‑Bank raised pleas of facts but without recording of evidence the Banking Court rejected the plaint for want of cause of action‑‑‑Validity‑For the purpose of ascertainment of the cause of action the only document which was to be seen was the plaint‑‑‑Unless and until the questions arising from the pleas were determined with reference to evidence on record plaint could not have been thrown away summarily‑‑‑Banking Court having wrongly rejected the plaint, the judgment passed by it was set aside and the case was remanded to Banking Court for decision afresh‑‑‑Appeal was allowed accordingly.

Ch. Irshad Ullah Chatta for Appellant.

Ch. Muzammal Khan for Respondents Nos. 1 to 5.

Sh. Abdul Hameed for Respondent No.6.

Date of hearing: 13th May, 2002.

2002 C L D 1314

[Lahore]

Before Jawwad S. Khawaja, J

KOHINOOR RAIWIND MILLS LIMITED through Chief Executive‑‑‑Petitioner

versus

KOHINOOR GUJAR KHAN MILLS and others‑‑‑Respondents

C.O. No. 4 of 2002, heard on 18th April, 2002.

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.287‑‑‑Amalgamation/merger of companies‑‑‑Fair value of shares‑‑‑Determining factors‑‑‑As a general rule in scheme of merger, break‑up value, dividend earning capacity and market value of shares, are the three factors which are relevant for determining the fair value of shares for purpose of determining a swap ratio.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284 & 287‑‑‑Amalgamation/merger of companies‑‑­Fair value of shares, determination of‑‑ ‑Methodology adopted for determining fair value of shares in other schemes of merger‑‑‑Application‑‑‑Such general rule could not by definition be made applicable to .ail schemes of merger‑‑‑Special circumstances might justify an exception being made to the general rule.

(c) Companies Ordinance XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284 & 288‑‑‑Amalgamation/merger of companies‑‑­Approval of scheme‑‑‑Jurisdiction of Court‑‑‑Scope‑‑‑Directors of the companies seeking merger have to propose the scheme, which have to be approved by their shareholders, brut such general rule is subject to certain important caveats‑‑‑Court is not a by‑stander obliged to grant approval to all schemes of arrangement approved by special majority of shareholders specified in S.284 of the Ordinance‑‑‑Court can review proposed scheme and decline approval though approved by requisite majority‑‑‑Proposed scheme will have effect only if sanctioned by Court, but before passing such order. Registrar has a statutory right of being heard.

(d) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.284‑‑‑Sanction of scheme for amalgamation/ merger of companies‑‑‑Jurisdiction of Court‑‑‑Scope‑‑‑Scheme approved by 3/4th majority of shareholders‑‑‑Court would not approve such scheme, where the majority shareholders of a company had voted in a manner coercive or oppressive to the minority or where the majority shareholders had not voted in the interest of the shareholders as a class.

(e) Companies Ordinance (XLVIl of 1984)‑‑‑

‑‑‑S.284‑‑‑Sanction for amalgamation/merger of companies‑‑­Duty of Court‑‑‑Scope‑‑‑Scheme unfair or unconscionable and materially objected to by shareholders either in general meeting or before the Court‑‑‑Duty of Court not to approve such scheme‑‑‑Fact that objecting shareholders constitute a small minority in proportion to the majority, would be wholly irrelevant in such circumstances.

(f) Companies Ordnance (XLVII of 1984)‑‑‑

‑‑‑‑S.284‑‑‑Scheme for amalgamation/merger of companies‑‑‑Sanction of the Court‑‑‑Meant for protecting rights of powerless small minorities, who cannot adequately safeguard their interest on the strength of their voting rights alone‑‑‑Minorities can show to the Court that proposed scheme of arrangement is unfair, unreasonable and prejudicial to their interest or to the interests of shareholders generally.

(g) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.284‑‑‑Constitution of Pakistan (1973), Arts. 23 & 24‑‑­Amalgamation/merger of companies‑‑‑Duty of Court‑‑­Sanction of arrangement by Court though binding on all shareholders may override the freedom of a shareholder to hold and dispose of his shares‑‑‑Right of a person to acquire, hold or dispose of property is constitutionally guaranteed as a fundamental right, but subject to law‑‑­Duty of Court to ensure that provisions of S.284 of the Ordinance are not abused by directors or majority shareholders in a manner depriving the minority of its right to property unfairly or unreasonably‑‑ ‑Such circumstances cast a special duty on Court to scrutinize the proposed scheme to safeguard the constitutionally guaranteed right to property vesting in the objecting shareholders.

(h) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.284‑‑‑Amalgamation/merger of companies‑‑‑Proposed scheme of arrangement‑‑‑Discretion of directors of a company‑‑‑Scope‑‑‑Directors cannot act arbitrarily while proposing such scheme‑‑‑Directors may have discretion in selecting one of various suitable courses of action, which may come before them for consideration, but they have no discretion to choose a course of action not in the interest of shareholders.

(i) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284, 285, 286, 287, 288 & 160(1)(b)‑‑‑Security and Exchange Commission of Pakistan Act (XLII of 1997), S.20‑‑­Merger/amalgamation of three companies as single company i.e. KTM‑‑‑Sanction of Court‑‑‑Objections to proposed scheme by small shareholders of KRM and Security and Exchange Commission of Pakistan‑‑‑Objections of objecting shareholders were well founded as the same were substantiated by audited financial statements of three companies ‑‑‑KTM had not declared any dividend in the last financial year, whereas KGM was on the defaulters' list of Stock Exchange while KRM was a highly 'profitable company with high earnings per share‑‑‑Objecting shareholders had invested in shares of KRM only and had no existing interest in KGM or KTM‑‑‑Sanctioning of proposed scheme would result in divesting the objecting shareholders of their shares in KRM and allotting them shares in KTM against their will and consent‑‑‑Value of shares of KRM and as a consequence the swap ratio had been calculated unfairly only on the basis of average market price and break‑up value of the shares, whereas the third relevant factor i.e. dividend earning capacity, had not been taken into account and no explanation had been given for .such material omission‑‑‑Break‑up value of shares of three companies had not been arrived at by applying a uniform standard of valuation‑‑‑Swap ratio had been calculated on ‑the basis of respective values of shares of three companies‑‑‑Swap ratio would only be fair, if same criteria were applied in a uniform way in the case of each company to arrive at the value of their shares‑‑‑Difference in calculation the value of shares had a direct bearing on the swap ratio, which would adversely affect the interest of objecting shareholders‑‑‑Directors of KRM holding shares in KTM ought to have disclosed the extent of their shareholdings or any indirect interest in KTM to shareholders of KRM through statement under S.160(1)(b) of the Ordinance which had not been done‑‑‑While furnishing audited accounts of KRM to its shareholders, there was nothing in the statement under S. 160(1)(b) of the Ordinance to inform them about the fact that valuation of shares of KRM had been made on a basis, which was materially disadvantageous to them when compared to the basis of valuing the shares of KTM for purpose of calculating the swap ratio‑‑‑Such material facts had not been disclosed in such statement‑‑‑Scheme as proposed was clearly ,flawed and would work seriously to the disadvantage of objecting shareholders‑‑‑Scheme of arrangement proposed by petitioner companies was not approved by High Court.

Aslam Bin Ibrahim v. Monopoly Control Authority PLD 1998 Kar. 295; Dewan Salman Fibre Ltd., Islamabad v. Dhan Fibres Ltd., Rawalpindi PLD 2001 Lah. 230; Brooke Bond (Pakistan) Limited and another v. Aslam Bin Ibrahim and another 1997 CLC 1873; Vijaya Durga Cotton Trading Ltd. 1980 Comp. Cas. 785 and Jitendra R. Sukhadia v. Alembic Chemical Works Company Ltd. 1988 Comp. Cas. 206 ref.

(J) Companies Ordinance (XLVIl of 1984)‑‑‑

‑‑‑‑Ss. 158 & 159‑‑‑Security and Exchange Commission of Pakistan Act (XLII of 1997), S.20‑‑‑General body meetings of company‑‑‑High Court emphasized the Security and Exchange Commission of Pakistan, Commission to consider the advisability of issuing instructions for guidance of companies to insure that shareholders attending general body meetings with the object of considering special business receive full disclosure of facts necessary for making informed decision‑‑‑Commission should also consider issuing guidelines for determining the fair value of shares by companies.

Khurram Saeed and Kh. Saeed‑uz‑Zafar for Appellant.

Tariq Saleem Sheikh for U.B.L.

Azhar Hussain Sheikh for H.B.L.

Kh. Aamer Farooq for N.B.P.

Aamir Zareef Khan, Vice‑President and Muhammad Younus. Asstt. Registrar Companies for Respondent.

Date of hearing: 18th April, 2002.

2002 C L D 1407

[Lahore]

Before Mian Hamid Farooq, J

AL‑SHAMAS APPAREL (PVT.) LTD. Through Chief Executive and 3 others‑‑‑Petitioners

versus

MUSLIM COMMERCIAL BANK LTD. Through Chief Manager/Manager Shadman Colony Branch, Lahore and another‑‑‑Respondents

Writ Petition No. 16514 of 2001, heard on 21st November, 2001.

(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑Art.l99‑‑‑Constitutional petition‑‑‑Maintainability‑‑‑Inter­locutory order‑‑‑Interlocutory order is not amenable to Constitutional jurisdiction of High Court and Constitutional petition is not entertainable against the interlocutory order passed by the Court.

Bashir Ahmad v. Province of Punjab and others 1988 CLC 1965; Malik Abbas Raza v. Government of Balochistan and 3 others PLD 1968 Lah. 163; Ghulam Hussain and another v. Malik Shabaz Khan and another 1995 SCMR 1925; Muhammad Siddique Qazi v. Muhammad Ibrahim Khokhar and another 1987 MLD 265 and Ghulam Muhammad and others v. Munir Ahmad Shah and others 1994 CLC 14 ref.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 10 & 22‑‑‑Constitution of Pakistan (1973), Art.l99‑‑­Constitutional jurisdiction of High Court‑‑ ‑Alternate remedy‑‑‑Interlocutory order merging into final judgment‑‑­Application for leave to appear and defend the suit was filed by the petitioners and in the said application objection was raised to the jurisdiction of Banking Court‑‑‑Objection raised by the petitioners was dismissed by the Banking Court‑‑­Contention of the petitioners was that the Banking Court had wrongly decided the question of jurisdiction‑‑‑Validity‑‑­If the suit would be ultimately decreed by the Banking Court against the petitioners, they would have a right of appeal under S.22 of Financial Institutions (Recovery of Finances) Ordinance, 2001, wherein all the questions /grounds raised by the petitioners in the Constitutional petition would be available to them before the appellate forum‑‑‑Interlocutory order would merge into final order/judgment, if the judgment would be passed against the petitioners‑‑ ‑Petition was not maintainable in circumstances.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 9 & 10‑‑‑Constitution of Pakistan (1973), Art. 199‑‑­Constitutional petition‑‑‑Maintainability‑‑‑Factual contro­versy ‑‑‑Petitioners in their application for leave to appear and defend the suit alleged that the documents relied upon by the Bank were forged fabricated and were never executed by the petitioners‑‑‑Petitioners had raised factual controversies about the execution of documents ‑‑‑Validity‑‑­Such exercise could not be undertaken by High Court in exercise of its Constitutional jurisdiction‑‑‑If any findings on the execution of the documents were given by the High Court, the same would prejudice the case of either of the parties as the suit and application for leave to defend the suit were still pending adjudication before the Banking Court‑‑‑High Court, in exercise of jurisdiction under Art.199 of the Constitution neither enters into factual controversies nor decides disputed questions of facts‑‑­Petition was incompetent and not maintainable in circumstances.

Muhammad Younas Khan and 12 others v. Government of N.‑W.F.P. through Secretary Forest and Agriculture, Peshawar and others 1993 SCMR 618; Umar Hayat Khan v, Inayatullah Butt and others 1994 SCMR 572: Muhammad Ali and another v. Government of Sindh through Chief Secretary and 2 others 1986 CLC 1123; Mst. Kaniz Fatima through Legal Heirs v. Muhammad Salim and 27 others 2001 SCMR 1493 and Secretary to the Government of the Punjab, Forest Department, Punjab, Lahore through Divisional Forest Officer v. Ghulam Nabi and 3 others PLD 2001 SC 415 ref.

Mian Muhammad Waheed Akhtar for Petitioner.

Hassan Nawaz for Respondents.

Date of hearing: 2 1st November, 2001.

2002 C L D 1411

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

RIAZ AHMED ‑‑‑Appellant

versus

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN, HEAD OFFICE AT ISLAMABAD through Manager, Nankana Sahib Branch, District Sheikhupura and 3 others‑‑‑Respondents

Regular First Appeal No. 785 of 2001, heard on 3rd June, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑S.9‑‑‑Suit for rendition of accounts‑‑‑Imposition of condition by Court‑‑ ‑Suit filed by the plaintiff was dismissed by Banking Court for the reason that the plaintiff failed to deposit a sum of money as directed by the Court ‑‑‑Validity‑‑­No, power was vested in the Banking Court to require the plaintiff to deposit any amount while seeking a prayer for rendition of accounts‑‑‑Requiring the plaintiff to deposit a sum of money before his case could be heard constituted a clog on his right to approach a Court of law for redress of his grievance‑‑‑Judgment and decree passed by the Banking Court was set aside and the case was remanded to Banking Court for decision on merits‑‑‑Appeal was allowed accordingly.

Mrs. Khalid Abid for Appellant.

Pervez Ahmed Barki for Respondents.

Date of hearing: 3rd June, 2002.

2002 C L D 1413

[Lahore]

Before Maulvi Anwarul Haq and Parvez Ahmad, JJ

Messrs HUSSAIN RICE FACTORY, MANDI SHAH JEWANA through Partner and 6 others‑‑‑Appellants.

versus

ALLIED BANK OF PAKISTAN through President and 3 others‑‑‑Respondents

Regular First Appeal No. 448 of 1998, heard on 22nd April, 2002.

Civil Procedure Code (V of 1908)‑‑‑

‑‑‑O.VII, R.6‑‑‑Limitation Act (IX of 1908), Art. 120‑‑­Exemption from limitation‑‑‑Failure to state any reason in plaint‑‑‑Suit for rendition of accounts‑‑‑Limitation‑‑‑Plaintiff secured loan facility from the defendant‑Bank against stock of rice pledged with the Bank, suit was filed alleging that due to negligence of the Bank, the pledged stock was deteriorated, resultantly it was sold on very low price in auction, therefore, Bank had to suffer for the less price‑‑­Auction proceedings were conducted on 25‑10‑1988 and the suit was filed by the plaintiff on 16‑12‑1996‑‑‑Exact details of the price of the stocks were mentioned in the plaint and the value of the stocks sold by the auctioneer was also stated, thus suit for specific amount showing difference of value could have been filed‑‑‑Contention of the Bank was that there was no cause of action available to the plaintiff in the present suit and the suit was barred by limitation‑‑­Validity‑‑‑Limitation for suit of such a nature was governed by Art. 120 of Limitation Act, 1908, wherein period of six years started from the date when the right to sue accrued‑‑­In the present case, right to sue accrued when the auctioneer opened up the godown and made a report as to contents thereof and also when the auction was completed in October, 1988‑‑‑Instead of filing the suit till October, 1994, the present suit was filed on 16‑12‑1996‑‑‑No statement within the meaning of O.VII, R.6, C.P.C. showing that the suit was within time was available in the plaint‑‑­Trial Court had rightly dismissed the suit and High Court declined to interfere with the judgment and decree passed by the Trial Court‑‑‑Appeal was dismissed in circumstances.

Ch. Manzoor Hussain Basra for Appellants.

Khizar Abbas Khan for Respondents.

Date of hearing: 22nd April, 2002.

2002 C L D 1417

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Branch Manager‑‑‑Appellant

versus

Mst. NASEEM AKHTAR and another‑‑‑Respondents

Regular First Appeal No. 342 of 1995, heard on 6th May, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑S.6‑‑‑Contract Act (IX of 1872), S.74‑‑‑Recovery of Bank loan‑‑ ‑Liquidated charges, mark‑up and costs of suit‑‑­Grievance of the Bank was that such charges were not allowed by the Banking Tribunal in the decree against the borrower‑‑‑Loan amount was deposited by the borrower with the Tribunal‑‑‑Effect‑‑‑Tribunal had rightly refused the liquidated damages and also the costs as the Bank was left with no cause of action‑‑‑Bank, in the present case, was not entitled to grant of mark‑up‑‑‑High Court declined to interfere with the judgment and decree passed by the Banking Tribunal‑‑‑Appeal was dismissed in circumstances.

Mian Nisar Mahmood for Appellant.

Nemo for Respondents.

Date of hearing: 6th May, 2002.

2002 C L D 1418

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Appellant

versus

MUHAMMAD AFZAL JURA and 3 others‑‑‑Respondents

Execution First Appeal No. 277 of 1995, heard on 8th April, 2002.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6(5)‑‑‑Ex parte decree, setting aside of‑‑‑Amendment of decree‑‑‑During execution proceedings borrower filed application under S.6(5) of Banking Tribunals Ordinance, 1984, for setting aside of ex parte decree‑‑‑While deciding application under S.6(5) of Banking Tribunals Ordinance, 1984, the Tribunal amended the decree‑‑‑Validity‑‑‑When there was no application on behalf of either of the parties seeking amendment of the decree, the Tribunal could not amend the same while processing application for setting aside ex parte decree.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑S.6‑Recovery of Bank loan‑‑‑Incentive scheme‑‑­Technicalities‑‑‑Administration of justice‑‑‑Execution of ex parte decree passed by the Banking Tribunal was pending when the borrower filed application to set aside the decree‑‑‑During the pendency of the application, the borrower stated that he had paid the entire loan amount under the Prime Minister's incentive scheme‑‑‑Banking Tribunal in the light of the statement amended the decree and disposed of the execution petition filed by the Bank‑‑­Validity‑‑‑Tribunal should have recorded the satisfaction of the decree and then instead of amending the decree, should have dismissed the execution petition having borne fruit‑‑­Net result arrived at by the Banking Tribunal was the same that the Tribunal had dismissed the execution petition but without recording the satisfaction of the decree‑‑‑As a natural consequence of such an eventuality the order passed by the Tribunal was correct‑‑‑Where the order passed by the Banking Tribunal was in accordance with law. High Court declined to interfere in the judgment and decree passed by the Banking Tribunal as the same was for the advancement of justice‑‑‑Appeal was dismissed in circumstances.

Qaiser Javed Mian for Appellant.

Nemo for Respondents.

Date of hearing: 8th April, 2002.

2002 C L D 1422

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

SERFRAZ AHMAD MALIK ‑‑‑Appellant

versus

NATIONAL BANK OF PAKISTAN through Branch Manager‑‑‑Respondent

Regular First Appeal No. 754 of 2001, heard on 23rd April, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑Ss. 9 & 10‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 9 & 10‑‑‑Suit against Bank‑‑­Dismissal of suit without application for leave to appear and defend‑‑‑Past and closed transaction‑ ‑‑Banking Court instead of asking the Bank to file application for leave to defend, dismissed the suit for the reason that the transaction subject‑matter of the suit was past and closed‑‑­Validity‑‑‑Banking Court was required to ask the Bank to file an application seeking leave to appear and defend the suit‑‑‑Dismissal of suit by the Banking Court was not consistent with the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, or by Financial institutions (Recovery of Finances) Ordinance, 2001‑‑‑Plaint, in the present case, disclosed a cause of action and the same could riot be rejected‑‑­Banking Court could have considered the application for leave to defend and then decided the same‑‑‑Judgment and decree passed by the Banking Court was set aside and the case was remanded for decision in accordance with law‑‑­Appeal was allowed accordingly.

Muhammad Ahsan Bhone for Appellant.

Mian Qamar‑uz‑Zaman for Respondent.

Date of hearing: 23rd April, 2002.

2002 C L D 1424

[Lahore]

Before Mian Saqib Nisar and Mian Hamid Farooq, JJ

Mst. RAZIA AKRAM‑‑‑Appellant

versus

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Branch Manager‑‑‑Respondent

Regular First Appeal No. 547 of 2001 and Civil Miscellaneous Application No.2‑C of 2002, decided on 3rd June, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.21‑‑‑Limitation Act (IX of 1908), S.5‑‑‑Appeal‑‑­Condonation of delay‑‑‑Time‑barred appeal‑‑‑Proof of delay‑‑‑Suit was decreed against the appellant on 2‑1‑2001, certified copies of judgment and decree were applied for on 2‑7‑2001, copies were supplied on the same day and the present appeal was filed on 6‑7‑2001‑‑‑Reason for delay was shown as the attack of paralysis on the appellant‑‑­Neither any date of the attack was mentioned nor there was any medical certificate appended with the application for condonation of delay nor record of hospital showing that the appellant was so seriously ill that she could not apply for getting the certified copies and file the appeal within time provided‑‑‑Effect‑‑‑Appellant failed to make out a sufficient cause for delay in filing of appeal‑‑‑High Court declined to condone the delay‑‑‑Appeal was dismissed in circumstances.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances] Act (XV of 1997)‑--

‑‑‑‑S.21‑‑‑Court Fees Act (VII of 1870), S.13‑‑‑Appeal‑‑‑Return of court fee affixed on memorandum of appeal‑‑‑Appeal was not heard on merits and was dismissed on the ground of limitation‑‑‑Appellant requested for return of court fee affixed on the appeal‑‑‑Validity‑‑‑High Court directed the return of court fee in circumstances.

Zafar Iqbal Chohan for Petitioner.

2002 C L D 1426

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mst. RUKHSANA BASHIR‑‑‑Appellant

versus

HABIB BANK LTD. through President and 4 others‑‑‑Respondents

Regular First Appeal No. 525 of 2001, decided on 29th May, 2002.

(a) Limitation Act (IX of 1908)‑‑‑

‑‑‑Art.29‑‑‑Compensation for wrongful seizure‑‑‑Provision of Art.29 of Limitation Act, 1908‑‑‑Applicability‑‑‑Provision of Art.29, Limitation Act, 1908 is only applicable where movable property is wrongfully seized under legal process.

(b) Limitation Act (IX of 1908)‑‑‑

‑‑‑Art. 29‑‑‑"Legal Process"‑‑‑Meaning‑‑‑Term "legal process" can only mean a process of some Court established under law.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑‑Limitation Act (IX of 1908), Arts. 29 & 49‑‑‑Wrongful seizure of vehicle‑‑‑Suit for recovery of damages‑‑­Limitation‑‑‑Vehicle of plaintiff was wrongfully seized by the Bank on 23‑3‑1997, without any process of law‑‑‑Suit for damages was filed by the plaintiff on 11‑2‑2000, which was dismissed by the Banking Court as being time‑barred under the provisions of Art. 29 of Limitation Act, 1908‑‑‑Contention of the plaintiff was that the provisions of Art.49 of Limitation Act, 1908, were applicable and the suit was within time‑‑‑Validity‑‑‑Article 49 of Limitation Act, 1908 and not Art.29 of the Act was applicable to the suit filed by the plaintiff‑Judgment and decree passed by the Banking Court were set aside and the case was remanded for decision afresh‑‑‑Appeal was allowed accordingly.

(d) Words and phrases‑‑‑

‑‑‑‑ "Legal process "‑‑‑Meanings.

Ch. Rashid Ahmad for Appellant.

Nemo for Respondents.

2002 C L D 1431

[Lahore]

Before Mian Hamid Farooq, J

NATIONAL BANK OF PAKISTAN through Vice-President, Zonal Chief, Multan---Plaintiff

versus

EFFEF INDSUTRIES LIMITED and 11 others---Defendants

Civil Original Suit No. 121 of 1999 and P.L.As. Nos. 4-B, 7-B. 8-B and Civil Miscellaneous Nos.457-B and 458-B of 2000, heard on 27th February, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

---Ss. 12. 9(4) & 10---Civil Procedure Code (V of 1908), O.IX, Rr. 6 & 12---Limitation Act (IX of 1908), Ss.5 & 14---Suit for recovery of Bank loan---Order of ex parte proceedings against some of the defendants for their non-appearance in Court on 14-1-2000---Application for setting aside ex parte order was made by one defendant on 8-7-2000 under S.12 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 together with application under Ss. 5 & 14 of Limitation Act, 1908---Plea raised by defendant was that as the suit had not been properly instituted, therefore, summons to appear and defend the suit could not have been issued to him ---Validity--­Application was not maintainable under S.12 of the Act as no decree had been passed against defendant---Banking Court had passed ex parte order under Civil Procedure Code, 1908 therefore, it would be construed that present application had been filed under the provisions of C.P.C.--­Defendant had neither asserted that he was not served with any summons nor had shown any sufficient cause for his non-appearance or any reason for non filing of application for leave to defend---Application did not show as to when defendant came to know about filing of suit or passing of ex parte order---Defendant had not yet filed application for leave to defend the suit---Defendant's plea could' not be considered to be sufficient for letting aside an ex pane order within the parameters of law---No cause/ground had been shown in application for condonation of delay---Defendant had failed to make out any case either for setting aside of ex parte order or for condonation of delay in filing requisite application---Signatures of defendant on affidavits filed in support of such applications were doubtful---Both the applications were dismissed being misconceived and devoid of merits.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

---Ss. 3 & 7---Civil Procedure Code (V of 1908), Preamble--­Proceedings before Banking Court---Application of C.P.C.--­Where provisions of the Act were contrary to provisions of C.P.C., then former would override the latter and provisions of the Act would be applicable to the exclusion of provisions of C.P.C.---Where provisions of the Act were silent about a given situation or did not provide any remedy to a party, then the Act would give way to that extent to the provisions of C.P.C., which would be applicable.

Hudaiba Textile Mills Limited and others v. Allied Bank of Pakistan Limited and others PLD 1987 SC 512 fol.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.10---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), Ss. 9 & 10---Suit for recovery of Bank loan---Amended application for leave to defend---Maintainability---Defendants were required to sufficiently comply with provisions of S.10(3)(4)(5) of the Ordinance by filing application for leave to defend in the form of written statement containing summary of substantial questions of law and facts and also giving the amount of finance availed; the amount paid by them; the dates of payment thereof, the amount of finance and other amounts relating to finance payable by defendants to Bank; and the amount of finance and other amounts, which defendants disputed as payable to Bank---Such application must be accompanied by all the documents in support of questions raised therein---Defendants, despite grant of period of 21 days had failed to adhere to said provisions of the Ordinance and had also not shown sufficient cause for their inability to comply with such requirements--­Presumption would be that no application- for leave to defend was pending---Provisions of S.10(12) of the Ordinance were ,mandatory in nature as non-compliance thereof entailed penal consequences provided under S.10(6) of the Ordinance---Such application was liable to be dismissed under S.10(6) of the Ordinance, and was dismissed accordingly.

(d) Interpretation of statutes---

---- Mandatory or directory provisions ---Determination--­Provision of law entailing penal consequences would be considered as mandatory---Provision of law not entailing penal consequences to its non-compliance, would be taken as directory.

(e) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.10---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), Ss. 9 & 10---Civil Procedure Code (V of 1908), O.XXIX, R.1---Suit for recovery of Bank loan against Corporation---Application for leave to defend---No resolution passed by Board of Directors of defendant-Company was filed either alongwith original leave application or amended leave application ---Effect--­Such a resolution was necessary before initiating or defending any proceedings by or against a company--­Original application as well as amended application purporting to have been filed on behalf of defendant-­Company had been filed unauthorisedly---No application for leave to defend the suit could be said to be pending before Banking Court.

Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd., Lahore PLD 1971 SC 550; Abubakar Saley Mayet v. Abbot Laboratories and another 1987 CLC 367; Bankes Equity Ltd. through Attorney and 5 others v. Sunflo CIT-Russ Ltd. Formerly known as Sunflo Juices Ltd. through Managing Director PLD 1999 Lah. 450; Government of Pakistan v. Premier Sugar Mills and others PLD 1991 Lah. 381 and Messrs Standard Hotels (Pvt.) Ltd. v. Messrs Rio Centre and others 1994 CLC 2413 ref.

(f) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.10---State Bank of Pakistan Circular No. 13, dated 20-6-1984---Suit for recovery of Bank loan---Application for leave to defend---Execution of documents relied upon by Bank in support of its suit and availing of financial facilities were acknowledged, by defendants ---Defendants' plea that there was only credit agreement dated 31-10-1983 forming basis for sanctioning and availing of loan facility, and in absence of buy-back agreement, Bank was not entitled to claim mark-up on loan facility, and after introduction of Circular No. 13 issued by State Bank of Pakistan no Financial Institution could undertake transaction based on interest---Validity---Credit agreement had been executed before introduction of Circular No. 13, dated 20-6-1984, therefore, defendants could not take plea that original sanctioned facility could not have been granted, moreso when same had been duly availed and which according to their stance had been repaid---No fresh loan facility after year 1983 had been granted or renewed by Bank on the basis of interest---Bank had merely re-scheduled the loan facility through subsequent credit agreement at the express request of defendant-Company---Defendants' plea was illusory, frivolous and contrary to their stance that said financial facility had been completely liquidated by making payments to Bank---High Court repelled such plea of defendants.

(g) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.10---Qanun-e-Shahadat (10 of 1984), Arts. 117 & 119--­Bankers Books Evidence Act (XVIII of 1891), S.4---Suit for recovery of Bank loan---Application for leave to defend--­Plea of defendants to have repaid loan amount to Bank--­Validity---After having admitted availing of financial facilities and execution of charge documents, onus shifted upon defendants to prove payment of entire outstanding amounts due against them ---Mere bald and oral assertion in this regard would be of no avail to defendants, unless some cogent proof in this regard was placed on record---If defendants had paid any amount, those must have been received by Bank against valid receipts and those receipts should have been in possession of defendants---Basic requirement to succeed on the strength of such plea was that defendants should have annexed such receipts of payment alongwith application for leave to defend which legal requirement was absent in the present case--­Defendants had failed to prove or place on record any document even to prima facie, prove that they had paid outstanding dues to Bank---Defendants had not raised any objection to statement of accounts furnished by Bank nor any entry thereof had been challenged---Statement of accounts had been duly verified in accordance with law, which formed prima facie proof of outstanding liabilities against defendants---Admitting entries of statement of accounts as well as asserting payment of entire outstanding amount was quite amazing on the part of defendants--­Defendants were not entitled to grant of leave to defend the suit as they had failed to raise a substantial question of law and facts requiring recording of evidence ---Applica­tion for leave to defend was dismissed in circumstances.

(h) Contract Act (IX of 1872)---

----S.128---Surety's liability---Extent---Liabilities of principal debtor and guarantor are co-extensive and they are jointly and severally liable to pay the outstanding amount to creditor.

(i) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.10---Application for leave to defend---Plea of defendants­-guarantors was that they, after having resigned from company and being no more its Directors, could not be held liable to liquidate the liabilities of borrower-Company on the basis of personal guarantees---Validity---Defendants had resigned from Directorship of the Company and sold their shares, ranging from period from 23-6-1992 to 26-6-1993 whereas personal guarantees were executed by them on 23-9-1991 and 8-9-1991---Defendants had executed personal guarantees, when according to their stance, they were Directors of the Company---Personal guarantee for the loan to be availed by a company could be executed even by a person not its Director---High Court repelled the contention.

(j) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.10---Contract Act (IX of 1872), S.133---Application for leave to defend---Discharge of surety by variance in terms of contract---Plea of defendants-guarantors was that defendant-Company by entering into an agreement with Bank had changed the original terms of loan agreement, therefore, their personal guarantees stood discharged and they could not be made liable to pay suit amount--­Validity---Alleged document/letter written by Bank to the company thereby giving some offers /proposals for settlement of dispute through availing an incentive scheme had never been reduced into a concluded contract--­Section 133 of Contract Act, 1872 was not at all attracted to such document/letter as the same could not be construed a concluded contract---Banking Court rejected the application as defendants had failed to raise a substantial question of law and fact requiring recording of evidence.

(k) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.10---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), Ss. 9 & 10---Suit for recovery of Bank loin---Application for leave to defend--­Non filing of amended application for leave to defend after coming into force of Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---Provisions of S.10(12) of the Ordinance, 2001 were mandatory---In absence of such amended application, presumption would be that no application for grant of leave to defend the suit was pending before the Court.

(l) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)-

---Ss. 9 & 10---Contract Act (IX of 1872), Ss. 126 & 142--­Suit for recovery of finance by Bank---Liability of guarantor---Application for leave to defend the suit---Plea o f defendant-guarantor was that she had not signed letter of guarantee---Validity---Such simple and bald denial without placing on record any prima facie proof could not furnish a valid ground for grant of leave to defend the suit, unless the document had been shown to be forged and fabricated--Defendant had not asserted or brought on record any material to show that her guarantee had been forged by Bank or its functionaries---Defendant had neither denied availing of financial facility nor had challenged the statement of accounts appended with plaint nor had disputed any entry thereof---Banking Court dismissed the application for leave to defend the suit as defendant had failed to raise a substantial question of law and facts requiring recording of evidence.

Ghazala Arif v. Union Bank Ltd. (now Emirates Bank International), Lahore 2000 CLC 1201 ref.

(m) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)-

----Ss. 9 & 17---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), Ss. 9 & 15---Suit for recovery of Bank loan alongwith liquidated damages---Entitlement---Bank was not entitled to recover liquidated damages.

Allied Bank of Pakistan, Faisalabad v. Aisha Garments etc. 2001 MLD 1955 fol..

(n) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)-

----Ss. 9. 10 & 3(2)---Bankers' Books Evidence Act (XVIII of 1891). S.4---Suit for recovery of Bank loan---Dismissal of application for leave to defend the suit---Effect---Allegations made in the plaint, after dismissal of such application, would be deemed under the law to have been admitted--­Photo copies of documents filed with the plaint were such on the basis of which Bank had instituted the suit--­Defendants had admitted their signatures on those documents---No rebuttal of said documents appeared on record---Statement of accounts duly certified under Bankers' Books Evidence Act of 1891 had neither been challenged by any defendant nor even a single entry thereof had been disputed---Such statement of accounts would be deemed to be admitted by defendants, moreso when presumption of correctness was attached thereto---Banking Court decreed the suit with costs of funds to be determined by State Bank of Pakistan under S.3(2) of the Ordinance.

Hamid Shabbir for Plaintiff.

Ghulam Murtaza Bhatti for Defendants Nos. 1, 5 and 6 (in P.L.A. No.4-B of 2000).

Miss Aisha Malik on behalf of counsel for Defendants Nos. 2, 7 and 8 (in P.L.A. No.8-B of 2000).

Khalid Mahmood Ansari for Defendant No.3 (in C.M. No. 457-B of 2000).

Pervaiz Ahmad Burki for defendant No.9 (in P.L.A. No. 7-B of 2000).

Nemo for Defendants Nos. 10 and 11.

Defendants Nos. 4 and 12: Ex parte.

Dates of hearing: 21st and 27th February, 2002.

2002 C L D 1462

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mst. SALOOMI RANA ‑‑‑Appellant

versus

FIRST LEASING CORPORATION LTD. Through Adnan Naseer and 3 others‑‑‑Respondents

Regular First Appeal No. 442 of 1998, heard on 4th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 2(c), 9 & 22‑‑‑Recovery of Bank loan‑‑‑Relationship of borrower or customer‑‑‑Allegation against appellant was that she was in possession of certain items which allegedly were leased by the plaintiff to the borrower‑‑‑Decree on such basis for repayment of finance was passed by the Banking Court against the borrower and the appellant‑‑‑Contention of appellant was that as she was neither a customer nor a borrower. Therefore, decree passed against her was liable to be set aside‑‑‑Validity‑‑‑Banking Court could not have passed a decree against the appellant who was neither a borrower nor guarantor as defined in Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑At the most the plaintiff would be entitled to take possession of the items in execution proceedings, if it was determined by the Executing Court that the appellant was, in fact, in possession of those items‑‑‑Judgment and decree passed by the Banking Court was set aside‑‑‑Appeal was allowed accordingly.

Sahibzada Riaz Anwar for Appellant.

Respondent No. 1: Ex parte.

Date of hearing : 4th June, 2002.

2002 C L D 1539

[Lahore]

Before Muhammad Nawaz Abbasi and Muhammad Saeed Akhtar, JJ

UNITED BANK LIMITED‑‑‑Appellant

Versus

Ch. AMJAD MAQSOOD and others‑‑‑Respondents

Regular First Appeal No.32 of 1985, heard on 19th June, 2001.

(a) Banker and customer‑‑‑

‑‑‑‑ Withholding or freezing account of plaintiffs by the Bank‑‑‑Bank froze accounts of the plaints on the pretext that accounts were fictitious and that plaints were not the genuine account‑holders ‑‑‑Plaintiffs tried to assure the Bank that they had genuinely opened their accounts, but failed to prevail upon the Bank‑‑‑Plaintiffs, on offer of the Bank appeared before the Bank Manager and satisfied the Manager that they were the genuine persons and not fictitious account‑holders, but Manager despite being satisfied, showed his inability to allow plaintiffs to operate their accounts on the plea that higher Bank Authorities did not agree with him‑‑‑Bank having failed to produce any evidence despite many opportunities were provided to it, Trial Court closed its evidence and decreed the suit‑‑­Validity‑‑‑Receipt of money by banker from or on account of his customer would constitute banker the debtor of customer‑‑‑Banker normally was liable to repay only the person from whom he had received the money‑‑‑Bank borrowed money and would undertake to repay the same or any part of it at the branch of the Bank where account was kept during banking hours upon payment being demanded‑‑­Customer on his part would undertake to exercise reasonable care in executing his written orders so as not to mislead Bank or make forgery easy and to act honestly towards the Bank‑‑‑Contract between banker and customer could not be unilaterally varied‑‑‑Any person could be a customer of a Bank and an account could be opened by a married woman, a minor, trustee, executor, local Authority, an incorporated body or a Company‑‑‑ All considerations of justice, equity and good conscience would prevail before denying drawer its property‑‑‑Nothing had been brought on record, in the present case, to show that plaints were fictitious persons and not genuine account holders, but Bank despite that had withheld money of plaints on flimsy pretext‑‑‑If without justification, a banker would dishonour his customer's cheque he was liable to pay damages to customer for injury caused.

(b) Banker and customer‑‑‑

‑‑‑‑ Relationship of‑‑‑Bank before opening account of a prospective customer could satisfy itself as to credentials of person applying to Bank for opening of account‑‑‑Relationship of creditor and debtor would come into being after opening of account‑‑‑Before acceptance of cheques or negotiable instruments for payment, Bank had to compare signatures of customer on cheque with specimen signatures on documents in its possession.

(c) Negotiable Instruments Act (XXVI of 1881)‑‑‑

‑‑‑‑S.26‑‑‑‑‑Suit for recovery of amount deposited , by customer in the Bank‑‑‑Contract Act (IX of 1872), S.11‑­Opening of account by a minor‑‑‑Freezing of said Account by Bank on the ground that contract with the minor was void‑‑­Validity‑‑‑Plaint showed that only two of the plaintiffs were minors‑‑‑Where an instrument was made or negotiated by a minor, making, drawing or negotiating, would entitle the holder to receive payment of such instrument and to enforce same against any party thereto other than a minor‑‑‑Bank could not refuse to make payment of cheques issued by a minor‑‑‑Minor, at any rate could open account through his guardian/next friend‑‑‑Suit was filed by minors through guardian/ next friend‑‑‑Even otherwise protection was to be used as a shield and not as a sword‑‑‑If a contract was for minor's benefit, same could not be used as sword‑‑‑Other plaintiffs were adults and no justification existed in law to freeze their accounts.

Ehsan Ahmad G. Khawaja for Appellant.

Agha Tariq Mahmood Khan for Respondents.

Date of hearing: 19th June, 2001.

2002 C L D 1621

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs MALIK & COMPANY through Sole Proprietor and others‑‑‑Appellants

Versus

MUSLIM COMMERCIAL BANK through Salah‑ud‑Din, Branch Manager and others‑‑‑Respondents

Regular First Appeal No.713 of 2001, heard on 18th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 17 & 22‑‑‑Civil Procedure Code (V of 1908), S.152‑‑­Bankers' Books Evidence Act (XVIII of 1891), S.4‑‑‑Decree, amendment of‑‑‑Bank filed suit for recovery of Rs.13,18,171.58 with mark‑up‑‑‑Defendant filed application for leave to appear and defend‑‑‑Bank on Court's directive filed complete statement of accounts certified under Bankers' Books Evidence Act, 1891‑‑‑Court after dismissal of leave application intended to pass decree in terms of the plaint for amount set out in statement of accounts, but instead of decreeing suit for principal amount and mark‑up thereon, passed decree for Rs.5,21,503.17, which was the amount of mark‑up only‑ ‑‑Principal amount of debt i.e. Rs.9,96,301.28, was not included in decree‑‑‑Banking Court through amendment passed decree for Rs.15,17,804.45 together with mark‑up thereon‑‑‑Validity‑‑‑Judgment in its terms was clear‑‑‑Decree had originally been passed for a sum of Rs. 5,21,503.17 only on account of miscalculation of principal amount‑‑‑Amount prayed for in the plaint was Rs.13,18,171.58 with mark‑up‑‑‑High Court modified impugned decree and decreed the suit for sum of Rs. 13,18,171.58 together with mark‑up thereon.

Mian Abdul Rashid‑I for Appellants.

Burhan Sabir Mirza for Respondents.

Date of hearing: 18th June, 2002.

2002 C L D 1634

[Lahore]

Before Raja Muhammad Sabir and Mian Hamid Farooq, JJ

Sheikh NAZIR AHMED ‑‑‑Appellant

Versus

HOUSE BUILDING FINANCE CORPORATION through General Manager and 4

others‑‑‑Respondents

Regular First Appeal No. 542 of 2001, heard on 18th June, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9(4), 10 & 21‑‑‑Specific Relief Act (I of 1877), S. 42‑‑­Civil Procedure Code (V of 1908), O.VII R. 11 ‑‑‑Suit for rendition of accounts and declaration‑‑‑Rejection of plaint without deciding leave application‑‑‑Plaintiff‑customer claimed to have adjusted financial facility well within time and thus, becoming entitled to clearance certificate, but Bank was not issuing clearance certificate and was demanding more amount from him‑‑‑Bank filed application for leave to defend the suit, which was replied by plaintiff‑‑­Banking Court instead of deciding leave application while relying upon statement of accounts filed by Bank rejected the plaint for not disclosing any cause of action ‑‑‑Validity‑‑­Rejection of plaint without deciding leave application was against the provisions of law‑‑‑Defendant as a matter of right could not defend the suit unless upon filing of proper application as provided under S. 9(4) read with S. 10 of the Act, Banking Court granted leave to defend the suit to such defendant‑‑‑Banking Court without deciding leave applica­tion was not empowered to call upon defendant to defend suit, muchless on filing of statement of accounts to reject the plaint‑‑‑Banking Court had completely travelled beyond the scope and provisions of special statute i.e. Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Court in order to reject a plaint had to take into account only the contents of plaint and defence pleas raised by defendant could not be considered for such purpose‑‑‑Plaint disclosed a cause of action as averments contained therein were supported by photo copies of voluminous receipts showing that plaintiff had faithfully paid the amount in instalments‑‑‑Present case did not fall under any of the clauses of O. VII, R. 11, C.P.C.‑‑‑Impugned judgment suffered from grave legal infirmity as having been passed in complete oblivion of the express provisions of law‑‑‑High Court accepted appeal, set aside impugned judgment/ decree, and remanded the case for its fresh decision with, observations that leave application would be deemed to be pending before Banking Court, which would firstly decide such application and then would proceed to decide the suit after hearing the parties in accordance with law.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 9(4) & 10‑‑‑Leave to defend suit‑‑‑Right of defendant to defend the suit without obtaining prior leave from Court‑‑­Scope‑‑‑Defendant as a matter of right could not defend suit unless upon filing of proper application as provided under S.9(4) read with S. 10 of the Act, Banking Court granted leave to defend the suit to such defendant.

(c) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.VII, R.11‑‑‑Rejection of plaint‑‑‑Defence plea, consideration of‑‑‑Scope‑‑‑Court in order to reject a plaint had to take into account only the contents of plaint‑‑‑Defence pleas raised by defendant could not be considered for such purpose.

Rao Saeed Ahmad for Appellants.

Ch. Muhammad Arshad Munir for Respondents.

Date of hearing: 18th June, 2002.

2002 C L D 1649

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

SIDDIQ M. MALIK and others‑‑‑Appellants

Versus

AL‑BARAKA ISLAMIC INVESTMENT BANK, B.S.C. (E.C.) through

Vice‑President and Branch Manager and duly Constituted Attorneys and

another‑‑‑Respondents

Regular First Appeal No.428 and Civil Miscellaneous Application No.2‑C of 2002, heard on 3rd June, 2002.

Financial Institutions (Recovery of Finances/Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑S.22‑‑‑Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.15‑‑‑Limitation Act (IX of 1908), Ss.5, 12(2), (5) [as added by Limitation (Amendment) Act (VIII of 1991) & 29‑‑‑High Court (Lahore) Rules and Orders, Vol. I, Chap. XIV‑D, Para.2(ii)(d)‑‑‑Appeal‑­‑Delay of 155 days, condonation of‑‑‑Banking Court passed judgment/decree on 11‑5‑2001‑‑‑Application for certified copy thereof was made on 24‑5‑2001‑‑‑Copies were prepared on 15‑6‑2001, which were delivered to appellant on 26‑10‑2001‑‑‑Appeal was filed on 5‑11‑2001‑‑‑Appellant claimed to be entitled to deduct the time consumed in obtaining such copies till the date on which those were received by him‑‑‑Validity‑‑‑By virtue of S. 12(5) of Limitation Act, 1908 read with High Court (Lahore) Rules and Orders, Vol. I, Chap. XIV‑D, Para. 2(ii)(d), time intervening between the day on which application was made and the day actually intimated to applicant to be the day on which copy would be ready for delivery, the period up to said date could be excluded‑‑‑Applicant, however, had to satisfy the Court about the various dates given on the slip to collect the copy and the steps taken by him to get copy‑‑‑Appellant's case for condonation of delay was not that he was not intimated by office about the date on which copy was to be supplied‑‑­Delay had not been alleged to have occasioned due to carelessness of the office in informing appellant about the date on which copy was ready for, delivery‑‑‑Appellant was, thus, not entitled to exclusion of time from 16‑6‑2001 (when copy was prepared) till 26‑6‑2001, (when he received the copy)‑‑‑Appeal had been filed with delay of more than 155 days, whereas 30 days, period was prescribed for its filing under S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001‑‑‑Section 5 of Limitation Act, 1908 was not applicable to the present case in view of S. 29 thereof‑‑‑High Court dismissed the application for condonation of delay as well the appeal.

Federation of Pakistan through the General Manager (Personnel), Pakistan Railways, Headquarters Office, Lahore v. Mrs. Riaz Latif PLD 1990 SC 90; West Pakistan Industrial Development Corporation, Karachi v. Aziz Qureshi PLD 1973 SC 222 and Cantonment Board, Kharian Cantt. v. Muhammad Shaft PLD 1991 SC 400 ref.

Khawaja Saeed‑uz‑Zafar for Appellants.

Khalid Saleem for Respondent.

Date of hearing: 3rd June, 2002.

2002 C L D 1663

[Lahore]

Before Malik Abdul Qayyum, J

MUHAMMAD UMAR TARAR and others‑‑‑Petitioners

Versus

JUDGE BANKING COURT No. II, LAHORE and another‑‑Respondents

Writ Petition No.23531 of 1998, heard on 27th March, 2001.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss.4 & 6(6)‑‑‑Constitution of Pakistan (1973), Art.199‑‑­Constitutional petition‑‑‑Execution of decree‑‑‑Banking Tribunal passed decree on 23‑11‑1992‑‑‑Judgment‑debtor did not file appeal against decree till 1993; but filed Constitutional petition‑‑‑High Court disposed of Constitutional petition by virtue of judgment rendered in the case of M/s. Chenab Cement Products. (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah.672 with observations that its decision would not affect judgments and decrees, which had become final‑‑‑Bank thereafter applied for execution of decree‑‑‑Banking Tribunal repelled the judgment‑debtor's objection to the effect that decree stood‑ set aside by virtue of said decision of High Court‑‑‑Judgment‑debtor further contended that as appointment of Presiding Officer, who passed the decree, was found to be un‑Constitutional, thus, the decree was void and incapable of being acted upon‑‑‑Bank referred‑ to judgment of Supreme Court passed in the case of Soneri Bank Limited v. Raja Weaving Mills Limited and another KLR 1997 Civil Cases 742, wherein Supreme Court denied relief to petitioner, who had not challenged the decree passed against him‑‑‑High Court dismissed the Constitutional petition as having no force.

Messrs Chenab Cement Products (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah.672; E.F.A. No. 113 of 1998 and Soneri Bank Limited through Mian Abdul Wajid, E.V.P. and another v. Raja Weaving Mills Limited and another KLR 1997 Civil Cases 742 ref.

Fazal‑e‑Miran Chauhan for Petitioners.

Nemo for Respondents Nos. 1, 3 and 4.

Hassan Nawaz Makhdoom for Respondent No.2.

Date of hearing: 27th March, 2001.

2002 C L D 1686

[Lahore]

Before Mian Hamid Farooq, J

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Appellant

Versus

Messrs BANDAGI AGRO SERVICES (PVT.) LIMITED and

another‑‑‑Respondents

Regular First Appeal No. 270 of 1995, heard on 13th June, 2002.

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑Ss. 6 & 9‑‑‑Suit for recovery of finance based on mark­up‑‑‑Refusal of Banking Tribunal to award mark‑up for cushion period five times‑‑‑Contention that Bank was empowered to claim the amount of cushion period as debited in the statement of accounts five times‑‑‑Validity‑‑‑Bank could not cite any Circular of State Bank of Pakistan or any law on the subject to substantiate its such contention‑‑­Concept of charging of amount of mark‑up for cushion period was introduced in Islamic Banking System in order to compensate financial institutions and conclusion of proceedings for recovery‑‑‑Bank could charge mark‑up only for cushion period of 210 days and that too only once at the time of institution of suit commencing from the date of default committed by the customer till the institution of suit‑‑‑Mark‑up in the present case had been charged five times and that too on different occasions and during the currency of the account‑‑‑Banking Tribunal had rightly taken notice of such legal infirmity and declined to award amount of cushion period, to which no exception could be taken by Bank‑‑‑Impugned judgment/ decree was legal not warranting modification as prayed for‑‑‑High Court dismissed appeal as being devoid of merits.

Habib Bank Ltd. v. Messrs Farooq Compost Fertilizer Corporation Ltd. and 4 others 1993 MLD 1571 fol.

Mian Qaisar Javed for Appellant.

Nemo for Respondent.

Date of hearing: 13th June, 2002.

2002 C L D 1689

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs FIRM EVERWIN TRADING COMPANY through Zahid

Mahmood‑‑‑Appellant

Versus

Messrs HABIB BANK LIMITED through Branch Manager and 3

others‑‑‑Respondents

Regular First Appeal No. 245 of 2002, heard on 5th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)

‑‑‑‑S.22‑‑‑Limitation Act (IX of 1908), Ss. 5, 29(2)(b) & Art. 156‑‑‑Appeal‑‑‑Limitation‑‑‑Condonation of delay‑‑­Impugned decree was passed on 8‑3‑2002‑‑‑Application for certified copy of judgment and decree was made on 20‑3‑2002, which were prepared and delivered to appellant on 21‑3‑2002‑‑ Appeal filed on 15‑4‑2002 was barred by time‑‑‑Appellant sought condonation of delay by filing application under S. 5 of Limitation Act, 1908 on the ground that S. 22 of the Ordinance did not provide for any limitation and according to Art. 156 of Limitation Act, 1908, present appeal could be filed within 90 days‑‑‑Validity‑‑‑Section 5 of Limitation Act, 1908 did not apply as the Financial Institutions (Recovery of Finances) Ordinance was a special law and prescribed 30 days' period of limitation for filing appeal, which was different from that prescribed for appeal in Limitation Act, 1908‑‑‑Neither there was any ground for condonation of delay, nor delay could be condoned under S.5 of Limitation Act, 1908‑‑‑Basis of the contention of appellant was a book wherein S. 22(1) of the Ordinance had been wrongly published‑‑‑Appellant might have cause of action against the publisher of the Book‑‑‑High Court dismissed the application for condonation of delay as well as the appeal.

Manual of Banking Laws in Pakistan by Manzoor Law Book House ref.

Muhammad Shahzad Shaukat for Appellant.

Tahseen Ullah Butt for Respondents.

Date of hearing: 5th June, 2002.

2002 C L D 1692

[Lahore]

Before Jawwad S. Khawaja and­ Abdul Shakoor Paracha, JJ

Mst. ALAM BIBI‑‑‑Appellant

Versus

PALTINUM COMMERCIAL BANK LIMITED‑‑‑Respondent

Regular First Appeal No.219 of 2002, heard on 19th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 17 & 22‑‑‑Transfer of Property Act (IV of 1882), S.58(b)(f)‑‑‑Decree for recovery of loan amount‑‑‑Plea of Bank was that appellant‑defendant had created mortgage in favour of Bank to secure the liabilities of other defendant and delivered original title deed of her house to Bank and executed in favour of Bank registered mortgage deed, general power of attorney and memorandum of deposit of title deed‑‑‑Suit was decreed against all defendants‑‑­Appellant denied to have executed such documents or delivered title deeds to Bank; her earlier explanation about custody of title deeds with Bank was that another defendant (a friend of appellant's son) had obtained her original title deeds; her explanation in this regard before High Court was that same were handed over to said defendant in order to show to some Government department that he was a person of means‑‑‑Validity‑‑‑Appellant had handed over title documents to Bank in 1998, but thereafter had done nothing to retrieve the same‑‑‑Bank filed shit oil 18‑5‑2000‑‑‑Appellant lodged F.I.R. on 7‑7‑2002 alleging that title deeds given to said defendant had been misplaced‑‑ ‑Story set up by appellant was far‑fetched and not credible‑‑‑Timing of such F.I.R. showed that same had been meant to thwart recovery suit filed by Bank‑‑­Explanation given for handing over title deeds to said defendant was not plausible as how he could have established that he was man of means by showing title deed of a house owned by appellant, who was not related to him‑‑‑No justification 'existed for letting title deeds remain with said defendant for a period of two years ' till lodging of F.I.R. on 7‑7‑2002‑‑‑Case set up by appellant was not plausible having been advanced just to frustrate recovery of Bank dues‑‑‑Impugned decree was not open to exception‑‑‑High Court dismissed the appeal in circumstances.

Ch. Imdad Ali Khan for Appellant.

Noor Muhammad Khan Chandio for Respondent.

Date of hearing: 19th June, 2002.

2002 C L D 1695

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

NAJABAT‑‑‑Appellant

Versus

A.D.B.P. HEAD OFFICE through Branch Manager‑‑‑Respondent

First Appeal from Order No. 160 of 2002, heard on 13th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)

‑‑‑‑Ss. 12, 9(5), 10 & 22‑‑‑Civil Procedure Code (V of 1908), O. V, R.15‑‑‑Ex parte decree, setting aside of‑‑‑Appellant's plea was that he had not been served‑‑‑Banking Court dismissed application for setting aside ex parte decree‑‑­Contention of respondent‑Bank was that appellant had been duly served through a person, who statedly was his nephew‑‑‑Appellant's contention was that said person was not his nephew; and even if said person had been the son of appellant's real brother, same would not make him a member of his family for purposes of O.V, R.15, C.P.C.‑‑­Validity‑‑‑Appellant's contentions were well‑founded‑‑­Application seeking setting aside of ex parte judgment and decree had wrongly been dismissed‑‑‑High Court accepted the application for said reasons and allowed appellant to file within ten days petition for leave to appear and defend the suit, which would be decided by Banking Court on merits‑‑‑Appeal was disposed of accordingly.

Nazir A. Javed for Appellant.

Syed Haider Ali Shah and Farrukh Mehmood Sulehria for Respondent.

Date of hearing: 13th June, 2002.

2002 C L D 1697

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

MUHAMMAD SAEED SHEIKH‑‑‑Appellant

Versus

CITIBANK N.A. through Naeem Shuja, Branch Manager‑‑‑Respondent

First Appeal from Order No.114 of 2002, heard on 10th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)

‑‑‑‑Ss. 12, 9(5), 10 & 22‑‑‑Ex parte decree, setting aside Of‑‑­Service on wrong address‑‑‑Notice issued to appellant through process serving agency and those appearing in press citation contained his wrong address‑‑‑Contention of respondent‑Bank' was that notices sent through courier service and registered A.D. post were sent at correct address of appellant‑‑‑Validity‑‑‑Had correct address of appellant been given in the notices sent through process serving agency, he could have been served and would thereafter have entered appearance‑‑ ‑High Court accepted appeal, set aside impugned order and allowed ten days to appellant to file application for leave to appear and defend suit before Banking Court, who would decide same within a further period of one month.

Muhammad Islam Sheikh for Appellant.

Shahid Ikram Siddiqui for Respondent.

Date of hearing: 10th June, 2002.

2002 C L D 1698

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Messrs AKBAR SOAP FACTORY and another‑‑‑Appellants

Versus

NATIONAL BANK OF PAKISTAN‑‑‑Respondent

First Appeal from Order No. 162 of 2001, heard on 13th June, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 12 & 21‑‑‑Ex parte decree‑‑‑Dismissal of application for setting aside such decree‑‑‑Contention of appellants raised in appeal was that Bank had wrongly calculated mark‑up‑‑‑Validity‑‑‑Appellants in application for leave to defend the suit had acknowledged their liability to repay the amount of finance availed by them‑‑‑No room for denial of liability at appellate stage in view of said admission‑‑‑High Court granted two adjournments to appellants to approach respondent‑Bank for purpose of showing to, Bank the basis of their assertion for not having calculated mark‑up properly‑‑‑Appellants neither approached Bank nor showed any valid reason for such omission‑‑‑High Court in circumstance inferred that appellants were attempting to delay the decision in appeal‑‑‑Appeal was dismissed in circumstances.

Qazi Zahid Hassan for Appellants.

Muhammad Qammar‑uz‑Zaman for Respondent.

Date of hearing: 13th June, 2002.

2002 C L D 1700

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

GHULAM RASOOL‑‑‑Appellant

Versus

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN and 4

others‑‑‑Respondents

First Appeal from Order No.305 of 2001, heard on 11th June, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)

‑‑‑‑S. 18‑‑‑Civil Procedure Code (V of 1908) O.XXI, R.89‑‑­Execution of decree‑‑‑Court auction of land in favour of decree‑holder Bank‑‑‑Objection to such sale ‑‑‑ Appellant (Judgment‑debtor) and another judgment‑debtor showed their willingness td purchase such land belonging to them‑‑­Banking Court with consent of hank allowed both the judgment‑debtors to deposit auction price plus 596 separately by specified date‑‑‑Other judgment‑debtor deposited the amount, whereas appellant failed to do so, on which Banking Court dismissed his objection petition‑‑­Validity‑‑‑Disputed land was part of a joint Khata owned by appellant, other judgment‑debtors including auction­-purchaser (judgment‑debtor)‑‑‑Auction‑purchaser (judgment­-debtor) possessed a valid and subsisting interest in such land apart from having a subsisting interest in entire Khata and thus he was entitled to acquire the land auctioned in favour of Bank‑‑‑Such right was available to auction­ purchaser (Judgment‑debtor) under O.XXI, R.89, C.P.C.‑‑­Appellant had failed to abide by his commitment and his Constitutional petition to assail such order had also been dismissed‑‑‑Impugned order was not open to exception in such circumstances.

Syed Masud Hussain Sherazi for Appellant.

Ch. Muhammad Nawaz Sulehria and Ch. Muzaffar Iqbal for Respondents.

Date of hearing: 11th June, 2002.

2002 C L D 1703

[Lahore]

Before Raja Muhammad Sabir and Mian Hamid Farooq, JJ

M.N. IFFI OIL MILLS through Sole Proprietor and another‑‑‑Appellants

Versus

NATIONAL BANK OF PAKISTAN‑‑‑Respondent

Regular First Appeal No.40 of 1994, heard on 18th June, 2002.

(a) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑S.12‑‑‑Civil Procedure Code (V of 1908), O.XLI, R. 17(2)‑‑­Hearing of appeal ex parte‑‑‑Appeal was represented‑‑‑Name of counsel for respondent‑Bank had been published in cause‑list, but none had entered appearance to represent respondent‑Bank despite various calls were made‑‑‑High Court after exhausting its cause‑list on that day proceeded ex parte against respondent‑Bank.

(b) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑Ss. 6, 8 & 12‑‑‑State Bank of Pakistan Circular No. 19, dated 5‑6‑1997‑‑‑Sttit for recovery of Bank loan‑‑‑Banking Court dismissed the defendants' application for leave to defend and decreed the suit ‑‑‑Appeal was admitted for regular hearing after defendants furnished requisite security as directed by High Court‑‑‑Defendants after settling their matter with Bank pursuant to an incentive scheme, filed application for setting aside impugned judgment/decree‑‑‑High Court proceeded ex parte against Bank as none appeared on its behalf‑‑‑Photocopies of pay-­in‑slips placed on record showed payment of outstanding amount as undertaken by defendants‑‑‑Contents of application were correct as same were supported by an affidavit coupled with the receipts, undertakings and other allied documents‑‑‑Defendants had liquidated their liabilities incurred through passing of impugned judgment/decree while availing the incentive scheme introduced by State Bank of Pakistan vide Circular No. 19, dated 5‑6‑1997‑‑‑Impugned judgment/decree stood satisfied, which explained the absence of Bank as well as of its counsel‑‑‑Appeal stood allowed having been fructified on account of satisfaction of impugned judgment/decree, thus, no executable decree remained in the field.

Dr. A. Basit for Appellants.

Nemo for Respondent.

Date of hearing: 18th June, 2002.

2002 C L D 1707

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

ABDUL RAZZAQ‑‑‑Appellant

Versus

A. D. B. P. ‑‑‑Respondent

Regular First Appeal No.118 of 2002, decided on 10th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)

‑‑‑‑Ss. 10 & 22‑‑‑Suit for recovery of money‑‑‑Leave to defend‑‑‑Plea of defendant was that he had not issued any cheque for drawing amount in question from Bank‑‑‑Banking Court rejected application for leave to defend and passed the decree‑‑‑Validity‑‑‑None had appeared for the Bank to controvert the statement or produce in Court the cheque issued by defendant‑‑‑Banking Court dismissed such application without justification, though defendant had shown a substantial defence‑‑‑High Court allowed the appeal, set aside the judgment/decree, allowed the application filed by defendant for leave to appear and defend the suit, and remanded the case to Banking Tribunal for its decision as a regular long cause.

Mian Tariq Ahmad for Appellant.

2002 C L D 1708

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

ABDUL SATTAR‑‑‑Appellant

Versus

HABIB BANK LIMITED and another‑‑‑Respondents

E.F.A. No. 439 of 2002, decided on 20th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 17 & 22‑‑‑Decree for .recovery of money‑‑‑Relief claimed in appeal was that appellant wanted to make payment of decretal debt, in instalments ‑‑‑Validity‑‑­Appellant after passing of decree ‑had not paid any amount to respondent‑Bank in satisfaction thereof‑‑‑No equity was in favour of appellant, thus, he was not entitled to any relief or indulgence‑‑‑High Court dismissed the appeal in circumstances.

Malik Naeemullah Khan for Appellant.

Nemo for Respondents.

2002 C L D 1709

[Lahore]

Before Raja Muhammad Sabir and Mian Hamid Farooq, JJ

Messrs RAJPUT DAIRY FARM (PVT.) LIMITED and 3 others‑‑‑Appellants

Versus

NATIONAL BANK OF PAKISTAN through Vice‑President (General

Attorney)‑‑‑Respondent

Regular First Appeal No.233 of 1998, heard on 19th June, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 17, 10 & 21‑‑‑Decree for recovery of loan amount against guarantors/ mortgagors‑‑‑ Validity‑‑‑ Alleged guarantors were neither party nor signatory nor witness to the deed, thus, on its strength, they had not incurred any liabilities‑ ‑‑Bank had impleaded said guarantors as defendants in the suit for the reason that they were shown as co‑owners in original title deed of the land deposited with Bank‑‑‑Memorandum of deposit of title deed had been executed solely by borrower, wherein he had acknowledged only surrender of original title deed relating to land, which already stood partitioned amongst him and alleged guarantors through registered agreement of partition‑‑­Banks reliance on original title deed was misconceived and unfounded as same was under erroneous assumption that total land had been mortgaged in its favour by borrower­defendant and completely forgetting mentioning of partition agreement itself in memorandum of deposit of title deed‑‑‑Alleged guarantors in leave application had raised a specific plea that they were neither borrowers nor guarantors nor mortgagors, but Banking Court had not given any findings on such material aspect of the case‑‑‑Banking Court without adverting to such plea, without determining their liabilities in suit and without examining the documents on record qua appellants had proceeded to pass impugned judgment and decree saddling them with colossal liability of suit amount‑‑‑Alleged guarantors had no nexus with execution of memorandum of deposit of title deed and their land was mortgaged with Bank‑‑‑High Court accepted appeal of the alleged guarantors and set aside impugned judgment/decree to the extent of guarantors while maintained same against remaining defendants.

Iftikhar Ullah Malik with Ms. Khalida Abid for Appellants.

Shahzada Tariq Nawaz Bhatti for Respondent.

Date of hearing: 19th June, 2002.

2002 C L D 1730

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

MUHAMMAD ASHRAF and another‑‑‑Appellants

Versus

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through

Chairman/President, Islamabad and 2 others‑‑‑Respondents

Regular First Appeal No.203 of 2002, decided on 19th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 9, 17 & 22‑‑‑Specific Relief Act (I of 1877), S. 42‑‑‑Suit for declaration by plaintiffs to discharge liability of their deceased father under an incentive scheme issued by Bank‑‑‑Plaints on 30‑11‑2000 attempted to make payment of 20% of outstanding amount, but same was not accepted by Bank‑‑‑Plaintiffs then filed suit on 21‑12‑2000 and Court directed them to deposit entire amount as per terms of incentive scheme on or before 31‑12‑2000, which was done accordingly‑‑‑Banking Court dismissed the suit on the ground that plaintiffs in order to qualify for the benefit of incentive scheme, had not deposited sum of 20% within month of November, 2000‑‑‑Validity‑‑‑Plaintiffs had themselves made an attempt to make such payment‑‑­Plaintiffs' bona fides were shown from the fact that they had paid entire amount due under the scheme on 21‑12‑2000, which was well before its expiry on 31‑12‑2000‑‑‑Suit, in. circumstances, could not have been dismissed‑ ‑‑High Court accepted the appeal and set aside impugned judgment and decree.

Mian Bilal Bashir for Appellants.

Khushnud Akhtar Raja for Respondents.

2002 C L D 1732

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mst. TABASUM NAZ‑‑‑Appellant

Versus

ALLIED BANK OF PAKISTAN LIMITED through Manager‑‑‑Respondent

Regular First Appeal No. 148 of 2002, heard on 18th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 17 & 22‑‑‑Decree‑‑‑Appeal‑‑‑High Court decreed the suit in favour of Bank with consent of parties ‑‑‑Decretal amount was to be payable within three months‑‑‑Appellant would be entitled to negotiate sale of her house, but purchaser thereof would deposit decretal amount directly with Bank‑‑‑In case of appellant's failure to deposit decretal amount within such time, decree would stand restored, which Bank would be entitled to enforce through all available means‑‑‑High Court disposed of the appeal in such terms.

Zia Haider Rizvi for Appellant.

M. Ashar Elahi for Respondent.

Date of hearing: 18th June, 2002.

2002 C L D 1733

[Lahore]

Before Maulvi Anwarul Haq and Parvez Ahmad, JJ

AMIR SAEED‑‑‑Appellant

Versus

Messrs CITIBANK, N.A. and others‑‑‑Respondents

First Appeal from Order No. 147 of 2000, decided on 11th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001) ‑‑‑

‑‑‑‑Ss. 19 & 22‑‑‑Civil Procedure Code (V of 1908), O. XXI, R.58‑‑‑Execution proceedings‑‑‑Objection to sale of mortgaged property‑‑‑Investigation of claim‑‑‑Objection of judgment‑debtor was that his rights in property purchased by him out of disputed Khasra number, might not be prejudiced by sale of property mortgaged by him with Bank‑‑‑Bank stated at the Bar that only property of judgment‑debtor mortgaged with Bank would be sold in execution of decree‑‑‑High Court disposed of the appeal in view of such undertaking given by the Bank.

Iftikhar Ullah Malik for Appellant.

Shahid Ikram Siddiqui for Respondent.

2002 C L D 1735

[Lahore]

Before Maulvi Anwarul Haq and Parvez Ahmed, JJ

WAQAR QAMAR and another‑‑‑Appellants

Versus

HABIB BANK LIMITED‑‑‑Respondent

Regular First Appeal No.521 of 2001, heard on 19th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 9, 17 & 22‑‑‑Suit for recovery of loan amount with mark‑up and legal charges‑‑‑Payment of principal amount in terms of the incentive scheme during pendency of suit‑‑­Defendant filed in Court an application to that effect alongwith deposit receipts‑‑‑Such application remained pending, till the time Court decreed the suit with observation that amount paid during pendency of suit would be adjusted‑‑‑Contention of defendant was that he did not owe any amount to Bank as mark‑up and legal charges, and thus, the impugned decree was illegal‑‑‑Validity‑‑‑Incentive scheme, provided that only principal amount was payable and there was 10096 remission in all types of mark‑up‑‑‑Legal charges of Rs.15, 000 as court fee and Rs.5, 000 as counsel fee claimed by Bank though entered in decree sheet, were also admitted by defendant‑‑‑High Court accepted appeal and set aside impugned judgment and decree with observations that defendant would pay to the Bank Rs.20,000 within one month, failing which Bank could resort to recovery thereof through Executing Court.

Appellant in person.

Ziaullah for Respondent.

Date of hearing: 19th June, 2002.

2002 C L D 1737

[Lahore]

Before Jawwad S. Khawaja and Mian Hamid Farooq, JJ

RAFIQUE HAZQUEL MASIH‑‑‑Appellant

Versus

BANK ALFALAH LTD. and 4 others‑‑‑Respondents

First Appeal from Order No.220 of 2002, heard on 20th June, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑Ss. 17 & 22‑‑‑Contract Act (IX of 1872), S. 126‑‑‑Transfer of Property Act (IV of 1882), S. 58(f)‑‑‑Decree for recovery of loan amount‑‑‑Appellant denied to have executed guarantee or any memorandum of deposit of title deed in favour of Bank‑‑‑Appellant while explaining the custody to his title deed with Bank stated that another respondent (a preacher) had obtained same under some inducement with the object of producing same as security‑‑‑Validity‑‑‑Appellant could not give any detail where title deed was to be shown. or the property comprised therein was offered as security‑‑­Appellant had not taken steps for almost seven years to retrieve title deed deposited with Bank‑‑‑Stance adopted by appellant was devoid of merit‑‑‑High Court dismissed the appeal in circumstances.

Ch. Muhammad Amin Javed for Appellants.

Syed Ali Zafar for Respondents.

Date of hearing: 20th June, 2002.

2002 C L D 1739

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

Mst. SAEEDA‑‑‑Appellant

Versus

HABIB BANK LIMITED and 3 other‑‑‑Respondents

First Appeal from Order No. 173 of 2002, heard on 13th June, 2002.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑Ss. 12, 9(5) & 22‑‑‑Ex prate decree, setting aside of‑‑‑Plea of appellant‑defendant was that neither she was served nor did she file application for leave to defend nor did she appoint any counsel to represent her‑‑‑Banking Court dismissed her application on the ground that application seeking leave to appear and defend filed by other defendants had stated that same was on behalf of the defendant‑‑‑Validity‑‑‑Appellant had not filed any application seeking leave to appear and defend nor had she engaged any counsel to represent her‑‑‑Signature of the appellant did not appear either on leave application or on affidavit in support thereof‑‑ ‑Record showed that no summons had been issued to the appellant‑‑‑Service through registered post had not been effected on appellant as postal endorsement showed that she was not residing at the given address‑‑‑Contention of respondent‑Bank that service on two defendants i.e. the Company and its Managing Director, constituted proper service on appellant‑defendant, was wholly devoid of merit as appellant had been sued in her capacity of guarantor‑‑‑High‑ Court set aside impugned order and allowed the application for setting aside of ex parte decree to the extent of appellant, who would be entitled to file leave application within 10 days, which would be decided by Banking Court in accordance with the provisions of Ordinance, 2001.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑

‑‑‑‑S. 9(5)‑‑‑Issuance of summons to defendant‑‑‑Prescribed modes of service‑‑‑Duty of Banking Court to issue process in each .of the four modes of service prescribed under the Ordinance.

Shahid Ikram Siddiqui for Appellant.

Abdul Rahim Tariq Alvi for Respondents.

Date of hearing: 13th June, 2002.

2002 C L D 1742

[Lahore]

Before Maulvi Anwarul Haq and Parvez Ahmed, JJ

Messrs MAJID & SONS and another‑‑‑Petitioners

Versus

NATIONAL BANK OF PAKISTAN‑‑‑Respondent

E.F.A. No. 163 of 2001, heard on 4th July, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 18(6) & 21‑‑‑Civil Procedure Code (V of 1908), O.XXI, R.90‑‑‑Execution proceedings‑‑‑Objection to sale of property‑‑‑Investigation of claim‑ ‑‑Direction of Executing Court to deposit 2096 of sale price‑‑‑Failure of appellant/ judgment‑debtor to make such deposit‑‑‑Dismissal of application‑‑‑Contention of appellant was that such application had to be dealt with in accordance with S. 18(6) of the Act and provisions of O. XXI, R.90, C.P.C. were not to be followed‑‑‑Validity‑‑‑Provisions of C.P.C., stood excluded by non obstante clause of S. 18(6) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑Execution Court had to decide the objection in respect of attachment or sale of property within 30 days, and if it found that such allegation was filed mala fide to delay the sale it could impose penalty up to 2096 of sale price ‑‑‑executing Court had acted in violation of the Act by directing appellant to make a deposit of 2096 of sale price as a condition precedent for hearing ,of objection‑‑‑High Court accepted the appeal and set aside impugned order with the result, that objection petition filed by appellant would be deemed to be pending before Executing Court to be decided in accordance with provisions of S.18(6) of the Act.

Pakistan Industrial Credit and Investment Corporation Limited, Peshawar Cantt. and others v. Government of Pakistan through Collector Customs, Customs House, Jamrood Road, Peshawar and others 2002 CLD 1 fol.

Syed Haider Ali for Petitioners.

Pervez Alamgir for Respondent.

Date of hearing: 4th July, 2002.

2002 C L D 1745

[Lahore]

Before Jawwad S. Khawaja and Abdul Shakoor Paracha, JJ

BUSHRA KHIZAR and another‑‑‑Appellants

Versus

CITIBANK N.A. through Manager‑‑‑Respondent

Regular First Appeal No.662 of 2001, decided on 25th June, 2002.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 15 & 21‑‑‑Contract Act (IX of 1872), S. 73‑‑‑Decree for recovery of loan amount with liquidated damages‑‑­Validity‑‑‑Neither there was any basis on record nor any justification had been given in the plaint to burden appellants with liability of liquidated damages‑‑‑Bank could not justify its claim for liquidated damages‑‑‑Banking Court had wrongly awarded such claim to Bank‑‑‑High Court partly allowed the appeal, modified the decree and reduced the amount of liquidated damages decreed by Banking Court.

Noor Muhammad Khan Chandia for Appellants.

Asher Ilahi for Respondent‑Bank.

2002 C L D 1747

[Lahore]

Before Naseem Sikandar and Muhammad Sair Ali, JJ

In re: KOHINOOR RAIWIND MILLS LTD. and others

Intra‑Court Appeal No. 14/L of 2002, decided on .1st August, 2002.

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 284, 287 & 10‑‑‑Scheme proposed for merger of appellants companies (i.e. KRM, KGM & KTM), whereby KRM and KGM upon merger in KTM were to stand dissolved without winding up‑‑‑Company Judge accepted objections to "swap ratio" (exchange ratio) of shares of said companies and declined to sanction scheme with observation that scheme was clearly flawed and worked seriously to disadvantage of shareholders and scheme on the face of record was unconscionable and grossly unfair to minority shareholders of KRM‑‑‑Appellants during pendency of Intra­ Court Appeal filed "revised swap ratio" of shares‑‑­Appellants did not argue appeal with a view to obtain reversal of impugned judgment‑‑‑No arguments were advanced against facts recorded, observations made and principles adopted in impugned judgment nor any compelling reason was shown for adopting a view different from that contained therein‑ ‑‑Appellants convassed acceptance of appeal on the basis of "revised swap ratio‑‑‑High Court in Intra‑Court Appeal was not justified to re­examine the rationality and fairness of "revised swap ratio", which had not at all been considered by share­holders of appellant‑companies in accordance with law ‑‑‑Intra‑Court Appeal was dismissed in circumstances.

Raja Muhammad Akram and Khurram Saeed for Appellant.

Khawaja Saeed‑uz‑Zafar and Nasrullah Khan Babar for SECP.

Ijaz Ahmad Awan for Respondent No. 1.

Date of hearing: 1st July,. 2002.

2002 C L D 1753

[Lahore]

Before Maului Anwarul Haq and Parvez Ahmad, JJ

BANK OF OMAN LTD. ‑‑‑Appellant

Versus

MUHAMMAD ALI & BROTHERS through Partners and others‑ ‑‑Respondents

Regular First Appeals Nos.272 to 274 of 1994, decided on 29th April, 2002.

(a) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑

‑‑‑‑Ss. 6 & 12‑‑‑Qanun‑e‑Shahadat (10 of 1984), Art. 17(2)‑‑­Negotiable Instruments Act (XXVI of 1881), S.4‑‑‑Suit for recovery of loan amount based on Promissory Notes‑‑­Execution of such documents was admitted by makers thereof‑‑‑Suit was dismissed on the ground that Promissory Notes were invalid for want of attestation by two witnesses‑‑‑Validity‑‑‑Article 17 of Qanun‑e‑Shahadat, 1984 had been made applicable subject to provisions of any law relating to Enforcement of Hudood or any other special law‑‑‑Promissory Note was an instrument provided in S. 4 of Negotiable Instruments Act, 1881, which was a special law‑‑‑No provision existed requiring attestation of Promissory Note, but the only requirement was that unconditional undertaking as provided in S. 4 of the Negotiable Instruments Act was to be signed by maker thereof‑‑‑Where a party claimed money on the basis of a writing, execution of which was not denied by other party, then there was no question of any doubt arising‑‑‑Not desirable in such circumstances for the Court to create doubt in the matter in the manner as had been done in present case by Banking Court‑‑‑Promissory Notes in the present case were in accord with S.4 of the Negotiable Instruments Act, 1881‑‑‑Banking Court had erred, in law while rejecting Promissory Notes on such grounds‑‑‑High Court accepted appeal and set aside impugned order, resultantly suit would be deemed to be pending before Banking Court to be decided in accordance with law.

(b) Qanun‑e‑Shahadat (10 of 1984)‑‑‑

‑‑‑‑Art. 17‑‑‑Background of enactment of Art. 17 of Qanun‑e-­Shahadat, 1984‑‑‑Execution of writing not denied by its executant‑‑‑Duty of Court‑‑‑Article 17 and language used therein is referable to Holy Qur'an and is in line with command of Allah Almighty in Surah "Al‑Baqra"‑‑‑Reason for such command is stated that "it is justice in the sight of Allah most suitable evidence and more convenient to prevent doubts among the believers"‑‑ ‑Where a party claims money on the basis of a writing and other party does not deny execution of the writing, then there is no question of any doubt arising‑‑‑Not desirable for the Court to create doubt in the matter in such circumstances.

Manzur‑ul‑Haque and Sami Hayat for Appellant

Raja Muhammad Anwar for Respondents.

Date of hearing: 15th April, 2002.

2002 C L D 1758

[Lahore]

Before Maulvi Anwarul Haq, J

HABIB BANK LTD. ‑‑‑Petitioner

Versus

ZULFIQAR ALI KHAN and others‑‑‑Respondents

Writ Petition No.2419 of 1998, heard on 17th May, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 18, 22(1), 7(2) & 21‑‑‑Limitation Act (IX of 1908), Art.181‑‑‑Civil Procedure Code (V of 1908), S.48‑‑­Constitution of Pakistan (1973), Art.199‑‑‑Constitutional petition‑‑‑Execution of decree‑‑‑Limitation‑‑‑Decree was passed on 30‑9‑1981‑‑‑Execution application was filed on 30‑5‑1997‑‑‑Executing Court dismissed such application as time‑barred‑‑‑Validity‑‑‑Execution application had mentioned another application having been filed and dismissed, but no details about dates of its institution and decision had been given‑‑‑High Court assumed that first application had been filed within time prescribed by law, which was three years commencing from date of decree‑‑‑Limitation for second application for execution was not prescribed by Limitation Act, 1908, but was prescribed by S.48, C.P.C.‑‑‑Provisions of S.48, C.P.C. prohibited Court from making an order for execution of decree on any fresh application presented after expiry of six years from date of decree sought to be executed‑‑‑Present execution application squarely fell within the ambit of S.48(a), C.P.C.‑‑‑Section 22(1) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 had done away with the application of Limitation Act, 1908 but not the provisions of S.48, C.P.C., which Banking Court was bound to follow by virtue of S.7(2) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑High Court dismissed the appeal being devoid of merits.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.18 & 21(1)‑‑‑Constitution of Pakistan (1973), Art.199‑‑­Constitutional petition‑‑‑Competency‑‑‑Dismissal of execution petition‑‑‑Right of appeal available, but not availed‑‑­Impugned order had the effect of preventing the sale of property by Banking Court and was appealable under S.21(1) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997‑‑‑High Court dismissed the Constitutional petition as being not competent.

Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah.672 and Messrs Shahzad Ice Factory and 2 others v. Special Judge Banking(II), Lahore and another PLD 1982 Lah.92 ref.

Mian Yousaf Umar for Petitioners

Nemo for Respondent.

Date of hearing: 17th May, 2002.

2002 C L D 1761

[Lahore]

Before Mian Hamid Farooq and Parvez Ahmad, JJ

Messrs NATIONAL BANK OF PAKISTAN through Abdul Waheed Chaudhry, Attorney, N.B.P.‑‑‑Appellant

Versus

Messrs SHAHEED CHEMICALS through Proprietor and another‑‑‑Respondents

Regular First Appeal No.254 of 1995, decided on 23rd July, 2002.

Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)‑‑‑--

‑‑‑‑S.22‑‑‑Civil Procedure Code (V of 1908), S.96(3)‑‑‑Consent decree‑‑‑Appeal against‑‑‑Appeal against decree passed in consequence of a settlement/ arrangement entered into between parties‑‑‑Maintainability‑‑‑Consent decree was not appealable under S.96(3). C.P.C.‑‑‑Bank had certified adjustment of its account by appellant under an incentive scheme‑‑‑High Court dismissed the appeal in circumstances.

Nemo for Appellant.

Ch. Muhammad Bakhsh for Respondents.

2002 C L D 1762

[Lahore]

Before Mian Hamid Farooq and Parvez Ahmad, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Manager

A.D.B.R, Sheikhupura‑--Appellant

Versus

MUHAMMAD ASHRAF SHAMIM‑‑‑Respondent

Regular First Appeal No‑85 of 1995, heard on 25th July, 2002.

Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)‑‑‑--

‑‑‑‑Ss. 6 & 12‑‑‑Civil Procedure Code (V of 1908), O. XXXVII, Rr. 2(2) & 3‑‑‑Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.5‑‑‑Suit for recovery of loan amount‑‑‑Defendants failed to appear and file application for leave to appear and defend suit under O.XXXVII, R.3, C.P.C.‑‑‑Bank upon direction of Court produced original documents including statement of accounts, which were exhibited‑‑‑Banking Court found that defendant had availed loan facility and executed documents, but dismissed the suit on the basis of statement of accounts‑‑‑Validity‑‑‑Bank in absence of defendant's application for leave to appear and defend suit was straightaway entitled to decree in view of provisions of 0.11, R. 2(2), C.P.C., and there was no need to call upon Bank to produce original documents‑‑­Incorrect statement of accounts would not entail dismissal of suit straightaway‑‑‑Documents on record and statement of accounts did show that defendant had availed financial facility and had not repaid same, thus, Bank was entitled to recover outstanding amount from him, more so when defendants had opted to remain absent and had not deemed proper to place their view‑point before Court‑‑­Banking Court had non‑suited Bank on extraneous consideration in complete oblivion of the documents available on record‑‑‑Some unauthorized and questionable entries were found in statement of accounts‑‑‑High Court accepted the appeal, set aside impugned judgment/ decree and remanded the case to Banking Court constituted under S.5 of Financial Institutions (Recovery of ‑‑‑.Finances) Ordinance, 2001 for its decision afresh after taking into consideration documents on record, statement of accounts and hearing the parties in accordance with law.

Syed Haider Ali Shah for Appellant.

Nemo for Respondent.

Date of hearing: 25th July, 2002.

2002 C L D 1772

[Lahore]

Before M. Javed Buttar and Syed Jamshed Ali, JJ

Messrs AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Appellant

Versus

Messrs BIO‑TECH. (PVT.) LTD. Through Javed Qureshi and 4 others‑‑‑Respondents

Regular First Appeal No. 102 of 1996, decided on 17th July, 2002.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑--

‑‑‑‑S.9‑‑‑Limitation Act (IX of 1908), Ss.5 & 29‑‑‑Appeal‑‑­Condonation of delay‑‑‑Filing of time‑barred appeal without application under S.5 of Limitation Act, 1908 for condonation of delay‑‑‑Office returned appeal after raising objection in regard to limitation‑‑.7e filing of appeal with application under S.5 of Limitation Act, 1908 for condonation of delay‑‑‑Validity‑‑‑Appeal was admittedly barred by time‑‑‑Period of filing of. appeal having been specified in S.9 of the Banking Tribunals Ordinance, provisions of S.29 of Limitation Act, 1908 were applicable‑‑­Delay in filing of appeal could not be condoned under S.5 of Limitation Act, 1908 or any other legal provision.

Messrs Munir & Co., Kamalia and 2 others v. Allied Bank of Pakistan Limited through 2 Attorneys 2002 CLD 657 and, Majeed Akbar Farooqi v. Bank of Punjab through Manager (Attorney) 2002 CLD 778 rel.

(b) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.6‑‑‑Qanun‑e‑Shahadat (10 of 1984), Art.17(2)‑‑‑Decree for recovery of loan amount against defendants­-guarantors‑‑‑Non‑attestation of personal guarantees by witnesses‑‑‑Effect‑‑‑Such judgment and decree not void merely because Banking Tribunal had found that personal guarantees furnished by defendants had not been attested in accordance with law.

(c) Limitation Act (IX of 1908)‑‑‑--

‑‑‑‑Ss. 3 & 5‑‑‑Void order or order without jurisdiction‑‑­Connotation ‑‑‑ Distinction‑‑‑ Condonation of gross negligence‑‑‑Order being void or without jurisdiction‑‑‑Scope and distinctive features elaborated.

Void order or an order without jurisdiction is only a type of an illegal order passed by a Court, and the fact that it has been passed and that it may, therefore, create rights cannot be altered by describing it as void or without jurisdiction. Expressions void order and orders without jurisdiction are over‑worked expressions, which are no doubt relevant in some contexts, but it would be better to use these expressions in the narrow and original sense of lack of competence of the Court or Tribunal "to enter on the enquiry in questions".

Messrs Conforce Ltd. v. Syed Ali Shah and others PLD 1977 SC 599 and Anisminic Ltd. v. Foreign Compensation Commission and others (1969) 2 AC 147 fol.

(d) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑--

‑‑‑‑S.9‑‑‑Limitation Act (IX of 1908), Ss.5 & 29‑‑‑Appeal‑‑­Condonation of delay‑‑‑Sufficient cause‑‑‑Judgment and decree were passed on 21‑12‑1996‑‑‑Application for obtaining certified copies was made on 22‑12‑1996, which were prepared and delivered to appellant on 9‑1‑1996‑‑­Appeal was filed on 19‑2‑1996 without application under S.5 of Limitation Act, 1908 for condonation of delay‑‑‑Office on 26‑2‑1996 returned the appeal after raising objection in regard to limitation‑‑‑Appeal was re filed on 4‑3‑1996 alongwith application under S.5 of Limitation Act‑ for condonation of delay‑‑‑Validity‑‑‑Present was the clear case of negligence in filing the appeal in time‑‑‑Reasons given in application did not constitute sufficient cause, which would have justified condonation of delay, had the provisions of S.5 of Limitation Act, 1908 been applicable to present appeal‑‑‑High Court dismissed the appeal being barred by time.

Shaukat Umar Pirzada for Appellant.

Azmat Saeed for Respondent No.2.

Date of hearing: 17th July, 2002.

2002 C L D 1776

[Lahore]

Before Ch. Ijaz Ahmad and Syed Zahid Hussain, JJ

Messrs TRADE LINES through Managing Partner and others‑‑‑Petitioners

Versus

BANK OF PUNJAB through General Manager and another‑‑‑Respondents

Writ Petition No.23190 of 1998, decided on 18th June, 2002.

(a) Banking Tribunals Ordinance (LVIII of 1984)‑‑‑--

‑‑‑‑Ss.6; 9 & 10‑‑‑Civil Procedure Code (V of 1908), Ss.12(2), 151 & O.XXVII‑A, R.1‑‑-Constitution of Pakistan (1973), Art.199 & Fourth Shed., Entry No. 28‑‑‑Constitutional petition‑‑‑Concealment of facts by petitioner‑‑‑Effect‑‑‑Suit for recovery of Bank dues‑‑‑Banking Tribunal decreed the suit after finding reply to show‑cause notice to be time‑barred‑‑­Defendants filed three applications i.e. under S.6(5) of the Banking Tribunals Ordinance, 1984 and S.12(2) and O.XXVII‑A, R.1, C.P.C.‑‑‑Banking Tribunal dismissed all applications‑‑‑Contention of defendants was that Banking Tribunal established by Federal Government had no jurisdiction to take cognizance of the suit filed by Bank, a Provincial Corporation‑‑‑Validity‑‑‑High Court had decided such question of law vide judgment dated 11‑7‑1996 passed in the case of M/s. Chenab Cement Products (Pvt.) Ltd. and others. v. Banking Tribunal, Lahore and others (PLD 1996 Lah.672), whereby judgments and decrees of Banking Tribunal passed prior thereto had been saved on the basis of well‑known principle of past and closed transaction‑‑­Present decree was passed on 23‑5‑1995 i.e. prior to said decision of High Court‑‑‑Defendants had alternative remedy to file appeal under S.9 of the Banking Tribunals Ordinance, 1984 which had not been filed‑‑‑Defendants by not attaching copy of reply to show‑cause notice with Constitutional petition had concealed material facts from High Court regarding raising or non‑raising the point of jurisdiction in such reply‑‑‑Defendants had not approached the Court with clean hands‑‑‑High Court declined to exercise discretion in favour of defendants‑‑‑Defendants had made such applications in order to frustrate the decree granted to Bank, which otherwise had attained finality‑‑‑High Court dismissed the Constitutional petition as having no merits.

Imran v. Presiding Officer, Punjab Special Court No.VI, Multan and 2 others PLD 1996 Lah. 542; Federation of Pakistan through Secretary, Ministry of Law, Justice and Parliamentary Affairs, Islamabad and others v. Aftab Ahmad Khan Sherpao and others PLD 1992 SC 723; Federal Public Service Commission and others v. Syed Muhammad Afaq and others PLD 2002 SC 167; Messrs Indus Match Co. Ltd. v. United Bank Ltd. and another 1996 CLC 1378; Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672; Abdur Rashid v. Pakistan and others 1969 SCMR 141; Messrs Grain Systems (Pvt.) Ltd. and 10 others v. Agricultural Development Bank 1993 SCMR 1996; Nawab Syed Raunaq Ali and others v. Chief Settlement Commissioner and others PLD 1973 SC 236 and Rana Muhammad Arshad v. Additional Commissioner (Revenue), Multan Division and others 1998 SCMR 1462 ref.

(b) Equity‑‑‑

‑‑‑‑ He who seeks equity must come with clean hands.

Azmat Saeed for Petitioners

Ahmed Shuja Baba for Respondents.

2002 C L D 1827

[Lahore]

Before Mrs. Fakhar‑un‑Nisa Khokhar, J

Syed ABDULLAH SHAH and another‑‑ ‑Petitioners

Versus

LAHORE CENTRAL COOPERATIVE BANK through Manager and 2 others‑‑‑Respondents

Civil Revision No.1291‑D of 1998, decided on 2nd July, 2002.

Cooperative Societies and Cooperative Banks (Payment of Loans) Order, 1972 (Martial Law Order No. 241)‑‑‑--

‑‑‑‑Para. 6‑‑‑cooperative Societies and Cooperative Banks (Re‑payment of Loans) Ordinance (XIV of 1966), S.8‑‑­Specific Relief Act (I of 1877), Ss. 42 & 54‑‑‑Suit for declaration and injunction‑‑‑Recovery of loan‑‑‑Auction of mortgaged property‑‑‑Plaintiffs being minors at the time of auction participated through their father, who was brother of mortgagee and an employee of Cooperative Bank‑‑‑Such auction was cancelled as being collusive and irregular‑‑‑Suit filed by plaintiffs was dismissed by Trial Court, which judgment was upheld by Appellate Court‑‑‑Validity‑‑‑Neither proclamation of auction proceedings nor any evidence in respect of its being held with prior permission of Board of Revenue had been produced by the plaintiffs‑‑‑Loan against borrower was Rs.1, 06, 992.75, but mortgaged property had been auctioned for Rs.4,500, which was a ridicules amount on its face‑‑‑Auction had been participated by an employee of Cooperative Bank on behalf of his minor sons (plaintiffs)‑‑‑Composite deposit of Zar‑e‑Chaharam and signing of cheque by minor showed that auction was void for not having been held in the manner and way it should have been held‑‑‑All such facts proved the collusion on record‑‑‑Findings of Courts below were issue‑wise, well ­reasoned and passed within lawful jurisdiction‑‑‑Bank had received total loan from widows of borrower, which factor was not challenged till yet‑‑‑High Court dismissed the petition as being devoid of force.

Riaz Ahmad Qasuri for Petitioners.

Sadiq Hayat Lodhi for Respondents.

Date of hearing: 28th June, 2002.

2002 C L D 1835

[Lahore]

Before Jawwad S. Khawaja, J

Chaudhri NAZIR AHMED ASAD, F. C.A.‑‑‑Petitioner

Versus

INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN and 2 others‑‑ ‑Respondents

Writ Petition No.8987 of 2001, heard on 4th July, 2002.

(a) Chartered Accountants Ordinance (X of 1961)‑‑‑-----

‑‑‑‑Sched. II, Part‑1, Cl. (1)‑‑‑Professional misconduct‑‑­Disclosure of information acquired by Chartered Accountant in the course of his professional engagement without consent of his client‑‑‑Effect‑‑‑Council could not require any member of Institute of Chartered Accountants of Pakistan, whether directly or indirectly, to disclose such information as such disclosure would clearly constitute professional misconduct.

(b) Chartered Accountants Ordinance (X of 1961)‑‑‑

‑‑‑‑Sched. II, Part‑1, Cl. (1)‑‑‑Bye‑Laws of. Chartered Accountants, 1983, Bye‑Law 8(3)‑‑‑Companies Ordinance (XLVII of 1984), Ss.254, 255 & 257‑‑‑Securities and Exchange Ordinance (XVII of 1969), S.34(4)‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑­Professional misconduct‑‑‑Directive of council requiring practising Chartered Accountants to furnish to Institute of Chartered Accountants of Pakistan a list of audited companies, otherwise renewal of certificate of practice might be refused to them‑‑‑Validity‑‑‑Any disclosure of information made by petitioner in compliance with such directives would automatically expose him to a charge of professional misconduct as wording of Cl. (1) of Part 1 of Second Sched. to Chartered Accountants Ordinance, 1961 did not make an exception in respect of disclosures made to the Institute‑‑­Such directive was coercive as same contained threat that members of the Institute such as petitioner would loose their practising certificates, if they did not comply with such directive of Council‑‑‑Members of the Institute could not be required by means of any directive or threatened coercive process to commit professional misconduct as defined in Second Sched. to Chartered Accountants Ordinance, 1961‑‑­Working papers files would include client's information relating to audit ands review thereof by Institute would result in client's information becoming available to Institute, which would fall within ambit of professional misconduct as defined in Cl. (1) of Part 1 of Second Sched. to Chartered Accountants Ordinance, 1961‑‑‑Such directive without making suitable amendments in Chartered Accountants Ordinance, 1961 could not be enforced by the Institute through coercive process set out in Bye‑Law 8(3) of Chartered Accountants Bye‑Laws, 1983.

Kh. Akbar Majid for Petitioner.

Anwar Kamal for Respondents.

Date of hearing: 4th July, 2002.

2002 C L D 1844

[Lahore]

Before Jawwad S. Khawaja, J

KOHINOOR TEXTILE MILLS LTD. Through Company Secretary‑‑‑Appellant

Versus

MONOPOLY CONTROL AUTHORITY through Chairman, Government

of Pakistan‑‑‑Respondent

First Appeal from Order No. 156 of 2002, heard on 5th July, 2002.

Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)‑‑‑----

‑‑‑‑Ss. 3, 4(b), 11, 12(1)(a)(iii) & 20‑‑‑Undue concentration of economic power‑‑‑Mill was technically, commercially and financially insolvent in 1987‑‑‑Package offered by financial institution for revival of the mill required the appellant company that Rs.40 million due to it from the Mill would be subordinated to Financial Institution's debt and that no interest would be accrued thereon‑‑‑Authority directed the appellant‑Company to recover from the Mill its entire amount, which would have accrued as interest on Rs.40 million‑‑‑Validity‑‑‑Appellant‑Company had its equity at stake in the Mill and was also an unsecured creditor‑‑­Revival of Mill and its continued existence as a viable unit was in the best interest of appellant‑Company and its shareholders‑‑‑Appellant‑Company in such context had accepted the condition imposed by the Financial Institution through a valid resolution passed by its Shareholders at general meeting‑‑‑If such decision had not been taken, appellant‑Company would have lost both its investment in the Mill and trade receivables of Rs.40 million‑‑‑Such decision had saved the appellant‑Company and its shareholders from serious Financial loss which would have been caused, had the Mill been liquidated as an insolvent Company‑‑‑Authority while passing impugned order had ignored the material fact that Financial Institution a secured creditor of the Mill had written off the interest for 6‑1 /2 years payable to it by the Mill‑‑‑If a secured creditor such as Financial Institution having a first charge over the assets of the kill could consider its best interest to be served by waiving accrued interest and by deferring payment of its debt \ \ by the Mill then appellant‑Company being an unsecured creditor had even more ,Justification for doing same, in furtherance of its business interest,‑No undue concentration of economic power as defined in S.4 of the Monopoly and Restrictive Trade Practices (Control and Prevention Ordinance, 1970) had been brought about by decision of appellant‑Company to waive interest on trade debt payable by the Mill or by deferring payment of such debt‑‑‑High Court set aside the impugned order in circumstances.

Salman Akram Raja for Appellant.

Kh. Saeed‑uz‑Zafar for Respondent.

Date of hearing: 5th July, 2002.

2002 C L D 381

[Peshawar]

Before Nasirul Mulk and Ijaz‑ul‑Hassan, JJ

Mst. ANWAR BEGUM‑‑‑Appellant

Versus

ALLIED BANK OF PAKISTAN LIMITED and 3 others‑‑‑Respondents

F.A.B. No.31 of 2000, decided on 14th June, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑Suit for recovery of loan‑‑‑Grant of leave to appear and defend suit‑‑‑Principles‑‑‑Grant of leave was not a matter of routine or matter of right‑‑‑Defendant seeking leave to defend had to disclose a plausible defence and where no substantial question of law or fact was involved needing trial and the defence set up was vague or sham, leave could be refused and the suit decreed‑‑‑For the purpose of grant of leave to defend, the party was required to make out a plausible cause and must show that serious and bona fide dispute existed between the parties which could not be resolved without recording evidence‑‑­Defendant, in the present case, had not come with clean hands and had failed to make out plausible cause to defend suit‑‑‑Trial Court, in circumstances, had rightly exercised its discretion in refusing leave to the defendant and order of the Trial Court could not be interfered with.

Pan Ocean Enterprises (Pvt.) Limited and 4 others v. Faysal Islamic Bank of Bahrain and others 1996 MLD 816; Messrs United Bank Limited v. Flora Textiles Limited and 6 others PLD 1996 Lah. 333; Hazoor Bakhsh v. Ghulam Farid 1996 MLD 704; Messrs Ali Match Industries Limited and 3 others v. Industrial Development Bank of Pakistan 1997 SCMR 943; Sheikh Gulzar Ali & Company Limited and others v. Special Judge, Special Court of Banking and another 1991 SCMR 590 and United Bank Limited v. Muhammad Sharfuddin 2000 MLD 456 ref.

Muhammad Iqbal for Appellant.

Abdur Rehman Qadir for Respondents.

Date of hearing: 14th June, 2001.

2002 C L D 386

[Peshawar]

Before Abdul Rauf Khan Lughmani and Ijaz‑ul‑Hassan, JJ

Mst. ZAMURD BEGUM‑‑‑Appellant

Versus

I.D.B.P. and others‑‑‑Respondents

F.A.B. No. 28 of 2000, decided on 20th September, 2001.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 10‑‑‑Suit for recovery of loan‑‑‑Leave to appear and defend suit ‑‑Defendant who was one of the Managing Directors of the Company, obtained non‑interest‑based financial facility from the plaintiff‑Bank by executing various documents in its favour and in order to secure said financial facility defendant mortgaged properties and plant machinery etc. through execution of Memorandum of Deposit of title deed‑‑‑Defendant resisted suit Und applied for grant of leave to appear and defend on various grounds and denied having affixed her signatures on the documents attributed to her and were made basis of suit by the plaintiff‑Bank‑‑‑Defendant had contended that she being an old lady of advance age had been defrauded by other defendant with the collusion of the Bank officials and. that she was entitled to the grant of leave to defend the suit on account of having disputed the signatures attributed to her‑‑‑Lady defendant had claimed that keeping in view the controversy involved regarding genuineness or otherwise of her signatures, the Trial Court should have resolved the point in issue after recording the evidence‑‑‑Validity‑‑‑Comparison of admitted signatures of the defendant appearing on the Vakalatnama, general power of attorney and appeal etc. with those of disputed signatures appearing on the documents made basis of the suit by the Bank had shown that those were absolutely identical and had no distinction‑‑‑Bare denial of signatures by the defendant on the letter of guarantee and other documents without any prima facie proof, could not furnish a ground for the grant of leave to appear and defend the suit especially when nothing was on record in support of allegations of fraud or fabrication‑‑‑Not believable that on account of being a Pardahnashin lady of advance age the defendant was not engaged in the business of Company, that she had no knowledge about the loan and that she had not executed documents in favour of the plaintiff‑Bank‑‑‑Leave to appear and defend the suit had rightly been refused for valid and cogent reasons and order of refusal did not warrant any interference.

National Bank of Pakistan v. Hajira Bai and 2 others PLD 1985 Kar. 431 and National Development Finance Corporation v. Bhital Rubber Industries Ltd. and 7 others 2001 CLC 492 ref.

Muhammad Shafique for Petitioner.

Malik Mehmood Akhtar for Respondents.

Date of hearing: 20th September, 2001.

2002 C L D 423

[Peshawar]

Before Qazi Ehsanullah Qureshi and Ijaz‑ul‑Hassan, JJ

Malik MUHAMMAD AYAZ‑‑‑Appellant

Versus

Messrs UNITED BANK LIMITED through Manager and 12 others‑‑‑Respondents

F.A.B. No.9 of 2000, decided on 31st October, 2001.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Preamble‑‑‑Enactment of Banking Laws‑‑‑Object‑‑‑Banking Laws are enacted to provide speedy measures for recovery of outstanding loans of Banking Companies as their recovery suits remained pending in the Civil Courts for years together‑‑‑Special law has been enacted to meet the economic situation which has arisen on account of defaults in payment of loans and finances by borrowers and customers of the Banking Companies.

(b) Cost‑‑‑

‑‑‑‑ Imposition of costs‑‑‑Effect‑‑‑Costs is the only panacea which heals every sore in litigation.

(c) Administration of justice‑‑‑

‑‑‑‑Expeditious disposal of cases‑‑‑Deciding lis on technicalities‑‑‑Validity‑‑‑Judicial forum has to act in consonance with the dictates of justice and, equity where a cause is decided expeditiously but after giving full and ample opportunity to all sides‑‑‑Law favours disposal of lis upon hearing and not on mere technicalities‑‑‑Procedure is designed to secure advancement of justice‑‑‑With a view of securing expeditious disposal of cases by a Court, legal requirement cannot be sacrificed‑‑‑Courts are required to apply their mind before passing any order or judgment.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.12‑‑‑Recovery of Bank loan‑‑‑Ex parte decree, setting aside of‑‑‑Borrower contested the suit on all grounds and denied claim of Bank‑‑‑Evidence of Bank was being recorded when on one date due to absence of the borrower and his counsel, the Banking Court passed ex parte decree‑‑‑Application to set aside the said decree was dismissed by the Banking Court-‑‑Validity‑‑‑High Court set aside the order passed by the Banking Court on payment of Rs. 5,000 as costs and remanded the case to the Banking Court for decision afresh.

Sultan Ahmad Jamshaid for Appellant.

Aurangzeb Khan for Respondents.

Date of hearing: 18th October, 2001.

2002 C L D 658

[Peshawar]

Before Shah Jehan Khan and Ijaz‑ul‑Hassan, JJ

NATIONAL BANK OF PAKISTAN through President and 4 others‑‑‑Appellants

Versus

KHALID MEHMOOD ‑‑‑Respondent

F.A.B. No. 16 of 2000, decided on 30th January, 2002.

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 7, 9 & 10‑‑‑Suit for redemption of mortgaged property and release of mortgage deed‑‑‑Application for grant of leave to appear and defend the suit‑‑‑Banking Judge, in absence of any triable issue between the parties needing evidence was quite justified to decline to accept application of defendant for grant of leave to appear and defend the suit.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑

‑‑‑‑Ss. 2, 7(4) & 9(1)‑‑‑Requirement and condition precedent for filing suit before Banking Court‑‑‑Borrower or a customer of Banking Company would be entitled to file a suit when any of them committed a default in fulfilling any obligation with regard to any loan or finance‑‑‑First requirement was that parties should be either borrower or a customer or a Banking Company which had been defined in S.2 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997; second condition precedent was that such suit must arise from a commission of a default in fulfilling any obligation touching business of loan or finance‑‑‑If transaction was outside the scope of loan or finance, even then commission of any default in fulfillment of obligation would not bring a suit within jurisdiction of the Banking Court‑‑‑Question whether there existed any agreement to grant loan or finance, would definitely fall within jurisdiction of Banking Court‑‑‑Where a suit was filed by a customer or a borrower claiming that amount received by him was not as a result of loan or finance, it would fall within jurisdiction of Bunking Court.

United Bank Ltd. v. Adamjee Insurance Co. Ltd. 1988 CLC 1660; Munir Ahmad Siddique and another v. Feroz Ahmad Siddique and 2 others 1990 MLD 1776; National and Grindlyas Bank Ltd. v. N.P. Miranda and 2 others 1984 CLC 2106; Messrs Shafiq Hanif (Pvt.) Ltd., Karachi v. Bank of Credit and Commerce International (Overseas) Ltd. PLD 1993 Kar.107 and Kamran Industry (Pvt.) Ltd. v. Industrial Development Bank of Pakistan and others 1994 SCMR 1970 ref.

(c) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑

‑‑‑‑Ss. 2(b), 7 & 9‑‑‑Cases which Banking Court could competently hear and adjudicate enumerated.

A Banking Court as established under section 2(b) of the Act, 1997, is competent to hear and adjudicate cases, inter alia, of the following nature:‑‑‑

(a) All suits filed by the Banking Companies against borrower or customer for recovery of Loan of Finances, either based on interest or mark‑up as defined in Act, 1997.

(b) All suits or claims filed by, a borrower or customer against the Banking Company claiming any adjustment, set off or setting up a counterclaim either through an independent suit or in a suit filed by a Banking Company.

(c) Suits for accounts arising out of a Loan or Finance as defined in the Act, 1997.

(d) Suits for specific performance seeking enforcement of an agreement or contract to pay or re‑pay any Loan or Finance or to perform any obligation arising out of such agreement.

(e) All the suits for declaration as to legality, validity or otherwise of a document which creates Loan or Finance as defined in the Act, 1997.

(f) All the suits for cancellation of any instrument through which any liability to pay or to re‑pay a Loan or Finance may arise.

(g) All the suits for prohibitory injunction which may restrain any of the parties namely Banking Companies, borrower or customer from performing their obligation and duties arising out of such business pertaining to Loan or Finance. In the like manner, all suits in the nature of mandatory injunction.

(h) All the suits for damages (excluding top cases) arising out of the breach of contract executed in respect of Loan or Finance between the Banking Company on the one hand and the borrower or customer on the other.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑

‑‑‑‑Ss.2(b) & 7‑‑‑Jurisdiction of Banking Court to adjudicate controversy relating to redemption of mortgaged property‑‑­Banking Court had exclusive jurisdiction to adjudicate upon matters relating to redemption of mortgaged property and release of its documents.

(e) Contract Act (IX of 1872)‑

‑‑‑‑Ss.2(e) & 37‑‑‑Execution of agreement ‑‑No one could be allowed to go beyond terns and conditions contained in the agreement executed between the parties.

Fazal‑e‑Gul Khan for Appellants.

Tariq Khan Tonoli for Respondent.

Date of hearing: 30th January, 2002.

2002 C L D 1714

[Peshawar]

Before Mian Shakirullah Jan, J

DIAMOND INDUSTRIES LIMITED‑‑‑Appellant

Versus

APPELLATE BENCH OF THE SECURITIES AND EXCHANGE COMMISSION OF

PAKISTAN and others‑‑‑Respondents

Company Case No. 13 of 2000, decided on 8th May, 2001.

(a) Administration of justice‑‑‑

‑‑‑‑ Opportunity of hearing before taking action against a person prejudicial to his interest‑‑‑Scope and purpose‑‑‑Such person should be apprised of the charges levelled against him and the proposed action to be taken against him, so that he may be able to make a proper and effective representation and he should not be taken by surprise.

Raziuddin v. Chairman, Pakistan International Airlines Corporation and 2 others PLD 1992 SC 531 ref.

(b) Administration of justice‑‑‑

‑‑‑‑ Public orders publicly made in exercise of statutory authority‑‑‑Scope of interpretation‑‑‑Such orders cannot be construed in the light of explanation subsequently given by the officer making the order of what he meant or what was in his mind or what he intended to do.

(c) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑Ss. 33 & 34‑‑‑Appeal before Appellate Bench of Commission and High Court‑‑‑Right to raise question in such appeals, whether limited or unlimited‑‑‑Principles.

Unlike the fiscal statute i.e. the Income Tax, Wealth Tax and Customs Act etc., where the scope of appeal has only been confined to the determination of limited question i.e. relating to law, the scope of present appeal before High Court has not been confined to such limited questions. Sections 33 and 34 of the Securities and Exchange Commission of Pakistan Act, 1997 have given a right' of appeal to a person against order passed by the lower forum without making any distinction as to what question could be agitated in the appeal filed under section 33 of the Act and what question in appeal filed under section 34. In absence of such embargo or limitation placed, the scope of appeal before High Court cannot be confined only to the question specifically referred to in the impugned order and by not looking at the other material which goes deep to the root of the case and agitated before the Court and specially when a reference has also been given in the impugned order.

(d) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.XLI, R.22‑‑‑Cross‑objection, filing of ‑‑‑Purpose‑‑‑Cross­ objection is filed only, when there is a part of a decree or judgment, which is against a person.

(e) Appeal (civil)‑‑‑

‑‑‑‑ Scope ‑‑‑Whole case opens and becomes the subject of discussion before appellate forum in absence of any limitation in relevant laws confining the scope of appeal.

Allah Yar v. General Manager, Railways Headquarters, Lahore and another 2001 SCMR 256 rel.

(f) Mala fides‑‑‑

‑‑‑‑ Malice in law‑‑‑Where order passed is within the competence of authority and quite legal in accordance with law, then malice in law cannot be attributed to such authority.

PLD 1997 Lah. 38 ref.

(g) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 263, 264 & 265(b)‑‑‑Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.20(4)(i)‑‑­Investigation into the affairs of Company‑‑‑Proof for requiring investigation under Ss. 263, 264 & 265(b) of the Companies Ordinance‑‑‑Distinction.

The investigation under sections 263 and 264 of the Companies Ordinance, 1984 can only be ordered, when the applicant is having sufficient evidence for showing that he has good reason for requiring the investigation, but under section 265(b), of the said Ordinance, the Commission may direct the investigation, if in its opinion, there are circumstances suggesting the grounds mentioned therein.

The two provisions (sections 263 and 264, Companies Ordinance, 1984) whereby the investigation is directed to be conducted stand on different footing. The one under section 263 can only be ordered when the applicant is having evidence in support of his plea showing thereby that he has got good reasons for requiring the investigation, but in the case of section 265(b), such an investigation can be directed suo motu by the Commission, if in the opinion of the Commission, the circumstances suggested the grounds mentioned therein for the purpose of investigation. The former requires some proof, while in the latter case, it has been left to the opinion of the Commission formed on the basis of circumstances leading to the grounds justifying investigation.

Saeed Ahmad v. Messrs Indo 'Enamel Works Ltd., Lahore PLD 1954 Lah. 490; Rothas Industries Ltd. v. S.D. Agarwal and another AIR 1969 SC 707; Services Industries Textile Limited v. Securities and Exchange Commission of Pakistan 2000 MLD 1880; Aashiq Muhammad Khan Mazari v. Chairman. Federal Land Commission and others PLD 1977 Lah. 461 Surath Chandra Chakravarty v. The State of West Bengal AIR 1971 SC 752; Commissioner of Police, Bombay v. Gordhandas Bhanji AIR 1952 SC 16; Mohinder Singh Gill and another v. The Chief Election Commissioner. New Delhi and others AIR 1978 SC 851; Smt. Ambika Devi v. State of Bihar and others AIR 1988 Pat. 258; Sub‑Divisional Controller of Food and Supplies Durgapur and others v. Amulya Ratan Sadhu and others AIR 1985 Cal. 281; Noor Muhammad v. Din Muhammad and others 1986 CLC 2337; Mumtaz Begum v. Sh. Inayatullah PLD 1969 Lah. 16; The Coimbators Spinning and Weaving Co. v. M.S. Srinivasan Chartered Accountant, Coimbatore and another AIR 1959 Mad. 229 and Mian Miraj Din and others v. Brothers Steel Mills and others 1996 CLC 516 ref.

(h) Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑‑Preamble, S.20(4)(i) & Sched., para. 21‑‑‑Companies Ordinance (XLVII of 1984), Ss. 265, 265‑B & 271‑‑­Investigation into affairs of company‑‑‑Object and nature‑‑­Such investigation is just probing into the matter, to reach at the truth and not a penalty or punishment, even does not include a reprimand or warning‑‑‑Commission at the conclusion of investigation can prosecute a person/member under Ss. 270 & 271 of the Companies Ordinance‑‑‑If reputation of a person or of an entity is kept in view and on such ground hesitation is felt to investigate the matter, then no step can be taken even against the actual culprits, who have committed the offence.

Uzair Karamat Bhandari for Petitioner.

Hamid Farooq Qurrani for Respondents.

Dates of hearing: 7th and 8th May, 2001.

2002 C L D 1

[Supreme Court of Pakistan]

Present: Muhammad Bashir Jehangiri, Actg. C.J., Ch. Muhammad Arif and Mian Muhammad Ajmal, JJ

PAKISTAN INDUSTRIAL CREDIT AND INVESTMENT CORPORATION LIMITED, PESHAWAR CANTT. and others---Appellants

versus

GOVERNMENT OF PAKISTAN through Collector Customs, Customs House, Jamrod Road, Peshawar and others---Respondents

Civil Appeals Nos.897 and 898 of 1999, decided on 29th May, 2001.

(On appeal from the judgment of the Peshawar High Court, Peshawar, dated 10-9-1998 passed in Civil Revisions Nos.207 and 208 of 1998).

(a) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----Ss.18(6) & 21---Constitution of Pakistan (1973), Art. l85(3)---Execution of decree for recovery of Bank loan--­Ratable distribution of assets of judgment-debtor---Property of judgment-debtor was sold in execution of decree--­Executing Court accepted applications of a few objectors holding them entitled to ratable distribution of such sale proceeds---Bank challenged the order in revision petitions before High Court with a prayer that if such petitions were not competent, then those be treated as Intra-Court appeals---High Court dismissed revision petitions being not maintainable---Contention of Bank was that impugned order being final was appeal able under S.21 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997; and if the view of High Court was accepted, then an order depriving, decree-holder of fruits of decree, howsoever unreasonable or arbitrary it may be, could not be rectified or redressed against, as no remedy against same would be available under any law---Supreme Court granted leave to appeal to consider such contention of petitioner raising a question of general importance.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Advances) Act (XV of 1997)---

----S.5---Judge of High Court acting as Banking Court--­Effect---When a Judge of High Court is nominated by Chief Justice for expeditious disposal of the cases under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, such Judge acts as Banking Court and any order passed by him as such Court is in the capacity of a Banking Court and not the High Court in its ordinary jurisdiction.

Pakistan Fisheries Limited v. United Bank Limited PLD 1993 SC 109; Messrs Tank Steel and Re-Rolling Mills (Pvt.) Limited, Dera Ismail Khan and others v. Federation of Pakistan PLD 1996 SC 77 and Messrs Tri-Star Polyster Limited and another v. Citibank 2001 SCMR 410 ref.

(e) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----S.18(6)(a)---Investigation of claims---Provisions of Civil Procedure Code, 1908---Applicability---Civil Procedure Code (V of 1908), Preamble---Objections in respect of attachment of any property whether mortgaged, pledged or not, could be filed under the provisions of S.18(6)(a) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and not under the C.P.C. as the provisions of the C.P.C. have been excluded by the non obstante clause of its subsection.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----Ss.18(5) & 18(6)---Execution of decree---Objection petition, filing of---Investigation of claim regarding attached property- --Remedy against---Where objection petitions are filed under S.18(6) of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, orders passed thereon , would be appeal able under S.18(5) of the Banking Companies (Recovery of. Loans, Advances, Credits and Finances) Act, 1997.

(e) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----5.18(6)---Civil Procedure Code (V of 1908), S.73--­Proceeds of execution-sale---Ratable distribution--­Principles---For ratable distribution, it is necessary that the assets must be held by the Court; there should be more than one person who have money decrees in their favour against the same judgment-debtor and application should be made before the receipt of assets by the executing Court.

(f Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)---

----S.18(6)---Civil Procedure Code (V of 1908), Ss.2(2)(3) & 73---Payment of Wages Act (IV of 1936), S.15---Proceeds of execution-sale---Ratable distribution---Suit for recovery of Bank loan was decreed in favour of the financial institution- --Banking Court, at the time of execution of the decree entertained two applications for ratable distribution of the proceeds of execution-sale---One application was filed by a labour leader who was a decree-holder from Authority under the Payment of Wages Act, 1936, and the second application was filed by Customs Authorities on the basis of protection provided under S.73(3), C.P.C.---Revision against the order passed by Judge of High Court as Banking Court was dismissed by Division Bench of High Court---Plea raised by the decree-holder was that the objectors were not 'decree-holders' within the meaning of S.2(3), C.P.C., therefore, they could not invoke provisions of S.73, C.P.C.--­Validity---Division Bench of High Court, in the present case, did not ascertain as to whether the application qualified the requirements of S.73, C.P.C.---Objectors were not decree­ holders as no decree had been passed by any Court in their favour---Direction/order issued by the Authority under the Payment of Wages Act, 1936, for the recovery of wages was not a decree within the meaning of S.2(2), C.P.C. and as such, application could not be treated to be an application under S.73, C.P.C.---Such objectors could only resort to execute the order of the Authority in the manner prescribed in the Payment of Wages Act, 1936 itself---Order passed by the Division Bench of High Court was set aside and the case was remanded to the Division Bench of High Court for decision afresh.

Raja Muhammad Akram, Advocate Supreme Court and Imtiaz Muhammad Khan, Advocate-on-Record for Appellant (in both Appeals).

Muhammad Nawaz Bhatti, D.A.-G. (on Notice).

K.G. Saber, Advocate-on-Record for Respondents Nos. l and 2 (in C.A. No-897 of 1999).

Respondent No.3: Ex parte.

Jehanzeb Rahim, Advocate Supreme Court and Ejaz Muhammad Khan, Advocate-on-Record for Respondents Nos. l and 2 (in C.A. No. 898 of 1999).

Respondent No.3: Ex parte.

Date of hearing: 29th May, 2001.

2002 C L D 10

[Supreme Court of Pakistan]

Present: Sh. Riaz Ahmed, Ch. Muhammad Arif and Qazi Muhammad Farooq, JJ

ALLIED MANAGEMENT GROUP‑‑‑Petitioner

versus

FEDERATION OF PAKISTAN through Secretary Finance, Islamabad and others‑‑‑Respondents

Civil Petition No.818‑L of 1999, decided on 21st September, 2001

(On appeal from the order dated 21‑4‑1999 of the Lahore High Court; Lahore passed in I.C.A. No.295 of 1999).

(a) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art. 199‑‑‑Constitutional petition‑‑‑Mala fides‑‑‑Effect‑Mala fides on the part of the petitioner, would disentitle him to seek any relief from High Court in its Constitutional jurisdiction.

(b) Companies Ordinance (XLV11 of 1984)‑‑‑

‑‑‑‑S.82(2)(3)‑‑‑Banking Companies Ordinance (LVII of 1962), S.11(1), First proviso, cl.(c)‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑‑Privatisation of Bank‑‑‑Sale of shares‑‑­Petitioner according to the contract was under obligation to purchase the shares owned by the Federal Government but it failed to fulfil its obligation‑‑‑Federal Government on the recommendations of Privatisation Commission intended to sell its shares to general public‑‑‑Petitioner had assailed such act of the Government in Constitutional petition before High Court‑‑ ‑Constitutional petition as well as Intra‑Court Appeal before the High Court were dismissed‑‑‑Contention of the petitioner was that the transfer of shares by the Federal Government was violative of S.82(2)(3) of the Companies Ordinance, 1984 and S.11(1), first proviso, cl.(c) of the Banking Companies Ordinance, 1962‑‑‑Validity‑‑‑Arrange­mentfor the sale of the shares owned by the Government to the general public was not violative of S.82(2)(3) of the Companies Ordinance, 1984 and S.11(1)(c), proviso of the Banking Companies Ordinance, 1962‑‑‑Petitioner could not be paid any premium under the law of the land or under the agreement for lapses on the part of its own members‑‑­Petitioner, in the present case, was neither interested to purchase the shares nor was permitting its sale in favour of the general public‑‑‑Such act of the petitioner was mala fide and devoid of merits‑‑‑Leave to appeal was refused.

Dr. A. Basit, Advocate Supreme Court and Ch. Mehdi Khan Mehtab, Advocate‑on‑Record for Petitioner.

Raja Muhammad Akam, Senior Advocate Supreme Court, M.A. gureshi, Advocate‑on‑Record, M. Saleern Sehgal, Advocate Supreme Court and Aslarn Ch., Advocate­-on‑Record for Respondents.

Date of hearing: 28th June, 2001.

2002 C L D 17

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry, Mian Muhammad Ajmal and Hamid Ali Mirza, JJ

FEDERATION OF PAKISTAN and others‑‑‑Appellants

versus

AMMAR TEXTILE MILLS (PVT.) LIMITED and others‑‑‑Respondents

Civil Appeals Nos.44 to 46 of 2001 and 1205 of 1997, decided on 29th August, 2001.

(On appeal from the judgment dated 2‑10‑2000 and 17‑12‑1996 in I.C.As. Nos.758, 759, 760 of 1999 and C.P. No. 1384 of 1994).

(a) Textile Export Quota‑‑‑

‑‑‑‑ Textile Export Quota for the year 1994‑‑‑Notification S.R.O. No.166(1)/92, dated 7‑3‑1992‑‑‑Notification S.R.O. ~No.228(1)/94, dated 8‑3‑1994‑‑‑Procedure for allocation of textile export quota‑‑‑Two Notifications infield‑‑‑Notification S.R.O: No.228(I)/94, dated 8‑3‑1994, was issued in super‑. session of the earlier Notification S.R.O. No.166(I)/92, dated 7‑3‑1992, for determining entitlement for allocation of Textile Export Quota for the year 1994, the Notification dated 7‑3‑1992 was not in existence with effect from 8‑3‑1994, thus the procedure for the allocation of the quota for the year 1994 had to be followed as per later Notification dated 8‑3‑1994.

(b) Interpretation of statutes‑‑‑

‑‑‑‑ Words employed in a statute‑‑‑Interpretation of such words‑‑‑Each word employed in a statute has to be read and understood in its ordinary meaning without assigning special meaning to any part thereof to avoid inconsistency in its different parts and also to ensure harmony therein.

(c) Notification‑‑‑

‑‑‑‑Time bound Notification‑‑‑Rescinding of such Notification by Competent Authority‑‑‑In time bound Notification, no doubt, at times becomes difficult for the Competent Authority to rescind before the expiry of such period particularly when claim of vested right is pleaded but the Government can overcome such hurdle by exercising authority of review of the Policy if the same has been retained by it in the same Notification simultaneously caring for the rights of the beneficiaries.

(d) Textile Export quota‑‑‑

‑‑‑‑ Textile Export Quota for the year 1994‑‑‑Notification S.R.O. No.166(I)/92, dated 7‑3‑1992‑‑‑Notification S.R.O. No.228(I)/94, dated 8‑3‑1994‑‑‑Procedure for allocation of textile export quota‑‑‑Changing the procedure on the recommendation of Pakistan Readymade Garments Manufacturers and Exporters Association‑‑‑Plea raised by the appellants was that the policy was against the doctrine of Promissory Estoppel ‑‑‑Validity‑‑‑Where in changing the procedure for allocating Textile Quota, Federal Government exercised jurisdiction under S.13 of Notification S.R.O. No.166(I)/92, dated 7‑3‑1992, such action of the Government could not be annulled by invoking doctrine of Promissory Estoppel ‑‑‑Change in the procedure for allocating Textile Quota could not be questioned by individuals because they had no right to direct the Government to adopt a procedure which suited them‑‑‑Appellants, in the present case, had not challenged the vires of the subsequent Notification S.R.O. No.228(I)/94, dated 8‑3‑1994, which had been issued in supersession of the earlier Notification S.R.O. No.166(I)/92, dated 7‑3‑1992, therefore, Supreme Court declined to declare the subsequent Notification as illegal or without lawful authority and the individual exporters could not attach legitimate expectancy that Textile Quota for the year 1994 must be allocated to them in view of the formula envisaged in Notification dated 7‑3‑1992.

Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others PLD 1991 SC 546; Messrs Army Welfare Sugar Mills Limited and others v. Federation of Pakistan 1992 SCMR 1652; Messrs Gadoon Textile Mills Limited and $14 others v . WAPDA and others 1997 SCMR 641; Messrs M.Y. Electronics Industries (Pvt.) Limited through Manager v. Government of Pakistan through Secretary Finance and 2 others 1998 SCMR 1404; Collector of Customs and others v. Rapi Shipping Limited and others 1999 SCMR 412; Government of Pakistan through Ministry of Finance and Economic Affairs and another v. Fecto Belarus Tractors Limited 2000 SCMR 112; 2001 PTD 1829; PLD 1970 SC 439; 1992 SCMR 1652; 1997 SCMR 641 and 1998 SCMR 1404 ref.

(e) Notification‑‑‑

‑‑‑‑Retrospective operation of notification‑‑ ‑Notification altering procedure of doing certain thing would operate retrospectively.

Malik Gul Hassan Khan v. Allied Bank of Pakistan 1996 SCMR 237 ref.

(f) General Clauses Act (X of 1897)‑‑‑

‑‑‑‑S.21‑‑‑Authority of Government to amend, vary or rescind a Notification cannot be denied in view of S,21 of General Clauses Act, 1897. (p. 34) F

(g) Companies Ordinance (XLVII of 1944)‑‑‑

‑‑‑‑S. 160(l)(b)‑‑‑Notification S.R.O. No. 166(1)/92, dated 7‑3‑1992‑‑‑ Notification S. R. O. No. 228(1)/94, dated 8‑3‑1994‑‑‑Textile Export Quota for the year 1994‑‑‑Special meeting‑‑‑Failure to convene such meeting to discuss New Textile Quota Management Policy‑‑‑Notice for convening special meeting to discuss the details 4f the Policy and two other items was duly received by the appellants‑‑‑Meeting so held was attended by the appellants and the other members and through balloting procedure for allocation of the quota was adopted ‑‑‑Validity‑‑‑Provisions of S.160(l)(b) of the Companies Ordinance, 1984, were not contravened in circumstances.

(h) Estoppel‑‑‑

‑‑‑‑Promissory estoppel, doctrine of ‑‑Invoking of the doctrine‑‑‑Conditions necessary for invocation of doctrine of promissory estoppel stated.

Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others PLD 1991 SC 546 rel.

Khalid Anwar, Senior Advocate Supreme Court and M.A. Zaidi, Advocate‑on‑Record for Appellants.

Sheikh Abdul Manan, Advocate Supreme Court and Mehr Khan Malik, Advocate‑on‑Record for Respondents.

Haider Ali Pirzada, Senior Advocate Supreme Court and Abdul Aziz Khan, Advocate‑on‑Record (absent) for Appellants (in C.A. No. 1205 of 1997).

M. Nawaz Bhatti, Deputy A.‑G., Ch. Akhtar Ali, Advocate‑on‑Record and Ahmed Ullah Farooqi, Advocate ?on‑Record (absent) for Respondents (in‑ C.A. No. 1205 of 1997).

Date of hearing: 14th June, 2001.

2002 C L D 269

[Supreme Court of Pakistan]

Present Muhammad Bashir Jehangiri, Munir A. Sheikh and Nazim Hussain Siddiqui, JJ

Messrs LYALLPUR OIL & GENERAL MILLS

and 6 others‑‑‑Appellants

Versus

HABIB BANK LIMITED‑‑‑Respondent

Civil Appeal No. 1199 of 1996, decided on 26th September, 2000.

(On appeal from the judgment dated 11‑12-1995 of the Lahore High Court passed in R.F.A. No.215 of 1995).

Banking Tribunals Ordinance (LVIII of 1984)‑‑‑

‑‑‑‑S.9‑‑ Appeal‑‑‑Failure to deposit decretal amount‑‑­Appellants did not deposit the decretal amount for the reason that the mortgage was sufficient security for the recovery of decretal amount‑‑‑Validity‑‑‑Appellants were required to deposit the decretal amount‑‑‑Supreme Court declined to interfere with the judgment passed by High., Court whereby appeal against the judgment and decree passed by the Banking Tribunal was dismissed.

Shahid Hussain Kadri, Senior Advocate Supreme Court for Appellants.

Nemo for Respondent.

Date of hearing: 26th September, 2000

2002 C L D 286

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui and Javed Iqbal, JJ

DIRECTOR INDUSTRIES, GOVERNMENT

OF N.‑W.F.P., PESHAWAR‑‑‑Appellant

Versus

Messrs NOWSHERA ENGINEERING

COMPANY LIMITED through Managing Director

and 4 others‑‑‑Respondents

Civil Appeal No.629 of 1997, decided on 8th November, 2001

(On appeal from the order dated 11‑2‑1996 passed by Peshawar High Court, Peshawar, C.C. No.7 of 1994).

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.405(1)(a)‑‑‑Interpretation‑‑‑Language used in S.405(1)(a) of the Companies Ordinance, 1984 is free from any ambiguity, absurdity or confusion, which cannot be twisted whatever principle of interpretation may be pressed into service‑‑‑No undue advantage can be taken on the basis of far fetched scholarly interpretation, which the plain language does not imply nor intended to mean, rather it should be interpreted in such a manner that object of its enactment is promoted rather than hampered.

(b) Companies Ordinance (XLYH of 1984)‑‑‑

‑‑‑‑S.405(1)(a)‑‑‑"Revenue"‑‑‑Connotation‑‑‑Term "Revenue" as used in S.405(1)(a) of the Companies Ordinance, 1984 cannot be confined within a limited sphere as it covers variety of fields, which mainly relate to income generating areas or resources of the Government for such generation.

(c) Companies Ordinance (XLVII of 1984)

‑‑‑-S.405(1)(a)‑‑‑Words "due and payable within the twelve months next before that date" as have been used in S.405(1)(a) of the Companies Ordinance, 1984 mean the amount free from any dispute or controversy, liability whereof has either been admitted

by company or otherwise duly proved on the basis of record, would be subject to preferential treatment, if it related to period within twelve months next before the date of winding‑up of company.

(d) Companies Ordinance (XLVH of 1984)‑-----

‑‑‑‑Ss.305 & 405(I)(a)(8)(c)‑‑‑West Pakistan Government Dues Recovery Ordinance XXII of 1962), S.3‑‑‑Constitution of Pakistan (1973), Art. l85(3)‑‑‑Claim of Provincial Government that company under liquidation owed as debt certain amount, which was recoverable as arrears of land revenue per its Notification, was declared as an ordinary unsecured debt‑‑‑Company Judge dismissed the appeal of Government‑‑‑Supreme Court granted leave to appeal to consider, whether Company Judge and Joint Official Liquidators had erred in law in classifying such claim of Government as unsecured ordinary debt

(e) Companies Ordinance (XLVII of 1984)-----

‑‑‑‑S.405(1)(a)‑‑‑West Pakistan Government Dues Recovery Ordinance (XXII of 1962), S.3(1)‑‑‑Preferential claim ‑‑‑Notification of Provincial Government issued under S.3(1) of West Pakistan Government Dues Recovery Ordinance, 1962, had no overriding effect on the mandatory prerequisites and prescribed procedure as envisaged under S.405(1)(a) of Companies Ordinance, 1984.

(f) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.305 & 405(1)(a)(8)(c)‑‑‑West Pakistan Government Dues Recovery Ordinance (XXII of 1962), S.3‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑‑Winding‑up proceedings‑‑‑Preferential. claim‑‑?Provincial Government for recovery of balance price of Steam Coal and Hard Coke supplied to company, issued Notification dated 26‑2‑1991 under S.3(1) of West Pakistan Government Dues Recovery Ordinance, 1962‑‑‑Company Judge concurred with the report of Joint Official Liquidators, whereby such claim of Government was not treated as secured and preferential, but it was classified as an ordinary unsecured trade debt‑‑‑Held, such claim did not fall within the ambit of "taxes", "cases" and "rates" as used in S.405(1)(a) of the Companies Ordinance, 1984‑‑‑Supreme Court, in view of the definition of "Revenue", disapproved the findings of Company Judge and Liquidators that such deal was a commercial deal simpliciter and declaring such amount due as unsecured for the reason that such deal on behalf of Government was for generation of more income‑‑‑Expression "the relevant date" as used in S.405(8)(c) of the Companies Ordinance, 1984 means that date of winding‑up order would be the relevant date, where company was wounded up compulsorily by Court‑‑‑Company was wounded up on 16‑6‑1994 by order of Court on application of a Bank dated 21‑2‑1994‑‑Amount in question was due in year 1980‑81, had such amount been due and payable within twelve months next before such date of winding‑up, then preferential treatment could have been claimed, which could not be extended to the instant case as the amount was due and payable in year 1982‑‑‑Notification dated 26‑2‑1991 issued by Provincial Government under S.3(1) of West Pakistan Government Dues Recovery Ordinance, 1962, had no overriding effect on the mandatory prerequisites and prescribed procedure as envisaged under S.405(1)(a) of the Companies Ordinance, 1984‑‑Amount in question could have been recovered as arrears of land revenue prior to passing up of winding‑up order‑‑‑Company, presently, was not in existence for practical purposes, therefore, question of recovery of such amount as arrears of land revenue would not arise, because the procedure prescribed west Pakistan in Land Revenue Act, 1967 could not be followed‑‑‑Merely by issuance of notification that amount in question could have been recovered as arrears of land revenue, would not entitle Provincial Government to claim preferential treatment; which could not be done in view of the provisions of S.405(1)(a) of Companies Ordinance, 1984.

Punjab Cables v. Government of Pakistan PLD 1989 Lah. 121 and Prem's Judicial Dictionary, Vol. IV, 1964, Arora Law House, New Delhi, India ref.

(g) Interpretation of statutes‑‑‑

‑‑‑‑Function of Court‑‑‑Courts are not concerned with the consequences of interpretation, however, drastic or inconvenient the result may be, because function of the Court is interpretation and not legislation.

Muhammad Ismail v. State PLD 1969 SC 241 ref.

(h) Interpretation of statute‑‑‑‑

‑‑‑‑Purpose of interpretation of a statutory provision is to ascertain the true intention of the Legislature, which has, of necessity, to be gathered from the words used by the Legislature itself‑‑‑If those words are clear and unmistakable, then they cannot be givers any meaning other than that which they carry in their ordinary grammatical sense.

Muhammad Ismail v. State PLD 1969 SC 241 ref. (i) Words and phrases‑‑?‑‑‑‑"Revenue"‑‑‑Its broad and general meanings.

Punjab Cables v. Government of Pakistan PLD 1989 Lah. 121 ref.

(i) Words and phrases‑‑‑

‑‑‑‑"Public revenue"‑‑‑Its broad and general meanings.

Punjab Cables v. Government of Pakistan PLD 1989 Lah. 121 ref.

(j) Words and phrases‑‑‑‑

‑‑‑‑"Revenue"‑‑‑Meaning.

Prem's Judicial Dictionary, Vol. IV, 1964, Arora Law House, New Delhi, India ref.

(K) Words and phrases‑‑

?

‑‑‑‑"Public revenues"‑‑‑Meaning.

Prem's Judicial Dictionary, Vol .IV, 1964, Arora Law House, New Delhi, India ref.

(l) Words and Phrases-----

------Public Revenues?---Meaning.

Prem?s Judicial Dictionary, col. IV, 1964, Arrora law House, New Delhi, India ref.

Imtiaz Ali, Additional Advocate‑General, N.‑W.F.P. and Haji M.A. Qureshi, Advocate‑on‑Record (absent) for Appellant.

Anwar H. Mir, Advocate Supreme Court for Respondent No.2.

Date of hearing: 25th October, 2001.

2002 C L D 320

[Supreme Court of Pakistan]

Present: Muhammad Bashir Jehangiri, Munir A. Sheikh and Rana Bhagwandas, JJ

SWAT CORN PRODUCTS‑‑‑Petitioner

Versus

GRAIN DEALERS and others‑‑‑Respondents

Civil Petitions Nos. 1261 and 1820 to 1823 of 2001, decided on 17th October, 2001.

(On appeal from the judgments of the Peshawar High Court, Peshawar, dated 9‑4‑2001 passed in Civil Revision No. 138 of 2001 and 18‑5‑2001 passed in Civil Revisions Nos. 207 to 210 of 2001 respectively).

(a) Shari‑Nizam‑a Adl Regulation (I of 1999)‑‑‑

‑‑‑‑Regulation is operative prospectively and its provisions can be pressed into service at the stage, when rights and liabilities of parties are to be determined as the law applicable at that time has to be followed.

(b) Shari‑Nizam‑e‑Adl Regulation (I of 1999)‑‑‑

‑‑‑‑Regln. 8(2)‑‑‑Civil Procedure Code (V of 1908), S.34‑‑­Constitution of Pakistan (1973), Art 185(3)‑‑‑Execution of decree for recovery of money with interest‑‑‑Petitioners objected to recovery of interest being repugnant to Injunctions of Islam ‑‑‑Qazi dismissed objection petition‑‑‑Appeals and revision petitions filed against such order were dismissed by Zila Qazi and High Court‑‑‑Contention of petitioners was that in view of S.8(2) of Regulation No.1 of 1999, all proceedings pending before any Court were to be decided according to Shariah, therefore, execution petition was liable to be dismissed to the extent of interest being unrecoverable by virtue of law declared by Supreme Court in Aslam Khaki's case (PLD 2000 SC 225)‑‑­Validity‑‑‑Regulation No.l of 1999 was enforced w.ef. 16‑1‑1999 and was operative prospectively‑‑‑Section 34 of C.P.C. had been declared to be repugnant to Injunctions of Islam and Court could grant compensation for nonpayment of amount due or for its delayed payment w.ef. 30‑6‑2001‑‑‑Liability to pay additional amount under S.34, C.P.C. was determined as far back as in 1979, which decree had become final and past and closed transaction‑‑‑Provisions of Regulation N6.1 of 1999 could be pressed into service at the stage of determination of rights and liabilities of parties, because the law applicable at that time had to be followed‑‑‑Executing Court/ Qazi was bound to execute such decree and could not go behind it in view of S.12 of Regulation No.l of 1999 and judgment in Aslam Khaki's case (supra)‑‑‑Impugned judgments were not suffering from any legal infirmity or jurisdictional defect‑‑‑Supreme Court refused to grant leave to appeal and dismissed the petitions.

Dr. M. Aslam Khakhi v. Syed Muhammad Hashim and 2 others PLD 2000 SC 225 ref.

Raja M. Ibrahim Satti, Advocate Supreme Court and M.A. Zaidi, Advocate‑on‑Record for Petitioners.

Imtiaz Ali, Additional Advocate‑General (N.‑W.F.P.) for Respondents.

Date of hearing: 17th October, 2001.

C L D 2002 472

[Supreme Court of Pakistan]

Present: Muhammad Bashir Jehangiri, Munir A. Sheikh and Rana Bhagwandas, JJ

STATE BANK OF PAKISTAN, SECURITIES DEPARTMENT, CENTRAL DIRECTORATE through Chief Manager, Lahore‑‑‑Appellant

Verses

JAVED AHMAD and 2 others‑‑‑Respondents.

Civil Appeal No. 238 of 1999, decided on 6th November, 2001.

(On appeal from the judgment and order of the Lahore High Court, Lahore, dated 18‑3‑1998 passed in I.C.A. No. 109 of 1998).

(a) Five Years Foreign Currency Bearer Certificate Rules, 1992‑‑‑

‑‑‑‑‑R. 11‑‑‑Public Debt Act (XVIII of 1944), Ss. 2(2)(a)(iii), 11 & 11(1‑A)‑‑‑Public Debt Rules, 1946, R.14‑‑‑Constitution of Pakistan (1973), Arts. 185(3) & 199‑‑‑Supreme Court granted leave to appeal to consider as to whether High Court had rightly found that R. I1 of Five Years Foreign Currency Bearer Certificate Rules, 1992 was ultra vires of S. I 1 of Public Debt Act, 1944; that what was the nature of Foreign Currency Bearer Certificate, and could it be equated with a bond as had been found by the High court, that whether Foreign Currency Bearer Certificates were governed by S.2(2)(a)(iii) of Public Debt Act, 1944; that whether R.14 of Public Debt Rules, 1946 and S.11(1) of Public Debt Act, 1944, were attracted to the facts and circumstances of the case or S.11(1‑A) of the Act would govern the situation and that whether in exercise of Constitutional jurisdiction, High Court could give finding as to genuineness of the claim of the respondent.

(b) Five Years Foreign Currency Bearer Certificate Rules, 1992‑‑‑

‑‑‑‑R. II‑‑‑Public Debt Act (XVIII of 1944), Ss.2(2)(a)(i)(ii)(iii)(iv)‑‑­Stamp Act (II of 1899), S.2(5)‑‑‑Foreign Currency Bearer Certificate, whether bond or Government security‑‑‑Such certificate could not be construed to be a bearer bond falling under S.2(2)(a)(iii) of Public Debt Act, 1944, thus, reliance upon definition of "bond" as given in Stamp Act, 1899 and other Statutes and dictionary meaning of expression "bond" would not be proper‑‑‑Such certificates were Government securities, a category apart from securities falling under S.2(2)(a)(i)(ii)(iii) of Public Debt Act, 1944, which would fall within the ambit of S.2(2)(a)(iv) of the Act.

(c) Five Years Foreign Currency Bearer Certificate Rules, 1992‑‑‑

‑‑‑‑R. 11‑‑‑Public Debt Act (XVIII of 1944), Ss. 2(2)(a)(V to (iv), 11(1) & 11(1‑A)‑‑‑Foreign Currency Bearer Certificate‑‑‑Issuance of duplicate certificate‑‑‑Such certificate being a Government security notified in pursuance of S.2(2)(a)(iv) of Public Debt Act, 1944, would be governed in matter of issuance of duplicate certificate by S. 11 (1‑A) of the Act, providing a right to get duplicate thereof in case it had been defaced or mutilated‑‑‑Rule 11 of Five Years Foreign Currency Bearer Certificate Rules, 1992, to the extent of prohibiting issuance of duplicate of defaced or mutilated certificates, was ultra vices of the provisions of S. 11(1 A) of the Act, which could not be enforced.

(d) Five Years Foreign Currency Bearer Certificate Rules, 1992‑‑‑

‑‑‑‑R. 11‑‑‑Public Debt Act (XVIII of 1944), S.11(1‑A)‑‑‑Public Debt Rules, 1946, 2.2(7)(8)(9)‑‑‑Foreign Currency Bearer Certificates affected by termite‑‑‑Right to obtain duplicate certificate‑‑‑In the case of mutilated and defaced security, the document itself was available in some form, but it had been destroyed or damaged to the extent of its material parts, whereas in case of lost security, the original document itself was not available with the holder‑‑‑Where documents themselves were available but in torn pieces having been affected by termite and its material parts were neither visible nor decipherable, such would. be a case of mutilated security and would fall within the ambit of S.11(1‑A) of Public Debt Act, 1944, and holder thereof could not be denied his right to obtain duplicate certificates.

(e) Five Years Foreign Currency Bearer Certificate Rules, 1992‑‑‑

‑‑‑‑‑R. 11‑‑‑Public Debt Act (XVIII of 1944), S.11(1‑A)‑‑‑Protection of Economic Reforms Act (XII of 1992), S.3‑‑‑Protection of Economic Reforms Ordinance (XXXIX of 1991), S.3‑‑‑Protection of Economic Reforms Ordinance (III of 1992), S.3‑‑‑Constitution of Pakistan (1973), Art.24(1)‑‑‑Foreign Currency Bearer Certificates, if lost, burnt or destroyed‑‑‑Right to obtain duplicate thereof‑‑‑Section 11(1‑A) of Public Debt Act, 1944, provides that duplicate certificates can be issued only in case, they are mutilated or defaced, but not if they are lost, burnt or destroyed‑­‑Such provisions are negating the protection given by Protection of Economic Reforms Act, 1992, to investments and savings made in foreign exchange, for it deprives altogether the owners of their investments and savings‑‑‑Rules 11 of Five Years Foreign Currency Bearer Certificate Rules, 1992 and S.11(1‑A) of Public Debt Act, 1944 being in conflict with Protection of Economic Reforms Act, 1992, Protection of Economic Reforms Ordinance, 1991 and Protection of Economic Reforms Ordinance, 1992 the later would prevail for having overriding effect and holder of such certificate, even in case the original is lost, burnt or destroyed, would be entitled to get duplicate thereof to make use of his investments and savings‑‑‑Such interpretation would be in consonance with fundamental rights as enshrined in Art. 24(1) of the Constitution.

(f) Five Years Foreign Currency Bearer Certificate Rules, 1992‑‑‑

‑‑‑‑R. 11‑‑‑Public Debt Rules, 1946, R.14‑‑‑Public Debt Act (XVIII of 1944), S.11‑‑‑Protection of Economic Reforms Act (XII of 1992), S.10‑‑‑Mutilated, defaced burnt or destroyed Foreign Currency Bearer Certificates‑‑‑Issuance of duplicate certificates‑­‑Absence of Rules‑‑‑Investments and savings made through Foreign Currency Bearer Certificates were protected and saved under Protection of Economic Reforms Act, 1992, and holder of such certificates was entitled to use and derive benefit thereof‑‑‑In absence of rules regarding issuance of duplicate of such certificates, Public Debt Rules, 1946 relating to other securities in case they were mutilated, defaced, lost or bunt, could be invoked and followed.

(g) Five Years Foreign Currency Bearer Certificate Rules, 1992‑‑‑

‑‑‑‑‑R. II‑‑‑Public Debt Act (XVIII of 1944), S.II‑‑‑Public Debt Rules, 1946, R.14‑‑‑Foreign Currency Bearer Certificates affected by termite‑‑‑Issuance of duplicate certificates‑‑‑Broken pieces of damaged original certificates were provided to the Bank‑‑­Issuance of such certificates in respondent's name was established from inquiry held by State Bank and its particulars were available in the record maintained by the concerned Bank, which had not yet been encashed by any person‑‑‑No hindrance thus existed in the way of issuance of duplicate certificates to the holder of such certificates to secure the amount invested by him through such certificates and the profit earned thereby.

(h) Protection of Economic Reforms Act (XII of 1992)‑‑‑

‑‑‑‑Ss. 3 & 10‑‑‑Protection of Economic Reforms Ordinance (XXXIX of 1991), Ss.3.& 10‑‑‑Protection of Economic Reforms Ordinance (III of 1992), Ss.3 & 10‑‑‑Such laws have overriding effect, whereunder savings and investments made in foreign exchange are saved notwithstanding anything contained in any other law to the contrary, and cannot be altered to disadvantage of beneficiaries in view of solemn commitment given by Federal Government as embodied in different provisions thereof.

Abid Hassan Minto, Advocate Supreme Court and Ch. Akhtar Ali, Advocate‑on‑Record for Appellant.

Hamid Khan, Advocate Supreme Court for Respondent No. 1.

M. Rashid Awan, Advocate Supreme Court for Respondent No.2.

Sardar M. Aslam, D.A.‑G. for Respondent No.3.

Date of hearing: 6th November, 2001.

2002 C L D 550

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui, Rana Bhagwandas and Abdul Hameed Dogar, JJ

Messrs HUFFAZ SEAMLEN PIPE INDUSTRIES LTD. and 2 others‑‑‑Petitioners

Versus

Messrs SECURITY LEASING CORPORATION LTD. ‑‑‑Respondent

Civil Petition No.292‑K of 2001, decided on 6th, December, 2001.

(On appeal from the judgment dated 14‑2‑2001 of High Court of Sindh, Karachi passed in First Appeal No. 123 of 2000).

(a) Banking Companies (Recovery of Loans Advances, Credits and Finances) Act (XV of 1997)‑‑‑--

‑‑‑‑S. 9‑‑‑Contract Act (IX of 1872), Ss.126 & 128‑‑‑Recovery of Bank loan‑‑‑Guarantor, liability of‑‑‑Scope‑‑‑Creditor, in an action against a guarantor, is only required to establish the liability of the principal debtor and occurrence of default or breach of the terms leading to the liability‑‑‑Guarantor cannot resort to technicalities to defeat the claim of the creditor‑‑‑Even where the contract becomes unenforceable against the principal debtor the guarantor would still be liable for the surety he had executed, unless there was any covenant to the contrary.

(b) Baking Companies (Recovery of Loans, Advances, Credits and Finance) Act (XV of 1997)‑‑‑---

‑‑‑‑S. 21‑‑‑Appeal‑‑‑Bar to file appeal against any interlocutory order of Banking Court‑‑‑Object‑‑‑Intention of the Legislature is that such disputes are resolved as early as possible.

(c) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art 185(3)‑‑‑Leave to appeal, grant of‑‑‑Scope‑‑‑Clean hands‑‑­Concurrent findings of fact by the Courts below‑‑‑Provisions of Art. 185(3) of the Constitution could not be invoked for discretionary/equitable relief against concurrent findings of fact, particularly when the petitioners have not come to the Court with clean hands.

(d) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑----

‑‑‑‑S. 9‑‑‑Constitution of Pakistan (1973), Art 185(3)‑‑‑Suit for recovery of Bank loan‑‑‑Concurrent findings of fact by the Courts below‑‑‑Principal borrower did not contest the matter white the guarantor filed application for leave to defend the suit which was dismissed by the Banking Court as well as by High Court‑‑­ Validity‑‑‑Principal borrower had received the amount from the financial institution and also leased assets, yet it was not paying the dues of the institution on the basis of misconceived pleas and technicalities which was against law and equity‑‑‑Only object of the borrower in the present case was to prolong the proceedings and to avoid payment ‑‑Supreme Court declined to interfere with the concurrent findings of fact by the Courts below‑‑‑Leave to appeal was refused.

Mushtaq Ahmad Memon, Advocate Supreme Court and K. A. Wahab, Advocate‑on‑Record for Petitioners.

Abdul Latif Channa, Advocate Supreme Court and Ahmadullah Farooqui, Advocate‑on‑Record for Respondent.

Date of hearing: 6th December, 2001.

2002 C L D 856

[Supreme Court of Pakistan]

Present: Sh. Riaz Ahmad, Mian Muhammad Ajmal

and Tanvir Ahmed Khan, JJ

Messrs DADABHOY CEMENT INDUSTRIES

LTD. and 6 others‑‑‑Petitioners.

Versus

NATIONAL DEVELOPMENT FINANCE CORPORATION, KARACHI‑‑‑Respondent

Civil Petitions for Leave to Appeal Nos.2720 to 2723 of 2001, decided on 2nd October, 2001.

(On appeal from the judgment of the High Court of Sindh, Karachi dated 19‑9‑2001 passed in Special High Court Appeals Nos.. 159 to 162 of 2001).

(a) Civil Procedure Code (V of 1908)‑----

‑‑‑‑S. 12(2) & O.XXIII, R.3‑‑‑Contract Act (IX of 1872), S.19‑‑­Corporate and Industrial Restructuring Corporation Ordinance (L of 2000), Ss.2(L),. 10, 20 8a Sched.‑‑­Constitution of Pakistan (1973), Art.l85(3)‑‑‑Suits filed by petitioner for redemption of mortgaged property and that filed by respondent for recovery of loan amount were disposed of in terms of Memorandum of Understanding executed between the parties, whereby petitioner agreed to pay the loan amount in quarterly installments subject to the condition 'that in event of default of any installment; the entire principal amount and interest accrued thereon then remaining unpaid would become immediately payable by petitioner and respondent would be entitled to, file execution application for recovery thereof‑‑Petitioner, after paying four (4) installments stopped further payments and filed applications under S.12(2), C.P.C. which were dismissed by Trial Court‑‑‑Appellate Court also dismissed the petitioner's appeals‑‑‑Contention of petitioner was that Memorandum of Understanding was ;,.obtained through misrepresentation, coercion and fraud; disposal of such applications without inquiry was against law, though Trial Court had omitted penal interest, but respondent was still charging the same; and that respondent could refer a question of bona fide dispute relating to liability etc., of the obligor to Governor State Bank of Pakistan for verification and correct determination/ calculation by Verification Committee‑‑­Validity‑‑‑Petitioner had failed to substantiate the allegations of fraud, misrepresentation and coercion as no particulars thereof had been given in application under S.12(2), C.P.C.‑‑‑Mere allegation not supported by any material would not invariably warrant inquiry or investigation in each case‑‑‑Petitioners had agreed to pay interest/mark‑up on rescheduled outstanding amount, as such they being the privy to rescheduling of loan could not turn around to say that interest/mark‑up had been fraudulently charged‑‑‑Parties with their free‑will and consent had entered into compromise, whereupon signatures of the parties and their counsel had been verified by Trial Court, which had decreed the suit in terms thereof‑‑­Petitioners had acted upon the consent decree by paying four (4) quarterly installments‑‑‑Had petitioners been aggrieved of consent decree, they would have challenged the same in appeal‑‑‑No appeal had been filed against consent decree, which had attained finality‑‑‑Consent decree did not suffer from fraud, misrepresentation or want of jurisdiction, thus, the same was not amenable to challenge under S.12(2), C.P.C.‑‑‑Corporate and Industrial Restructuring Corporation Ordinance. 2000, came into force on 22‑9‑2000, whereas consent decree was passed on 18‑2‑1998, thus, the date on which consent decree was passed, Corporate and Industrial Restructuring Corporation Ordinance, 2000 was not in force‑‑‑Said Ordinance came into force during pendency of applications under S.12(2), C.P.C. but its provisions could not be pressed into service as the applications had been found to be incompetent and consent decree, had been found to have been lawfully and validly passed‑‑‑Judgment passed by Appellate Court was well founded not warranting any interference‑‑‑Supreme Court refused to grant leave to appeal and dismissed the petitions in circumstances.

(b) Civil Procedure Code (V of 1908)‑‑

‑‑‑‑S. 12(2)‑‑‑Fraud, misrepresentation, allegations of ‑­Decision of such application without inquiry‑Validity‑‑‑Mere allegations of fraud, misrepresentation and coercion not supported by any material would not invariably, warrant inquiry or investigation in each case.

(c) Civil Procedure Code (V of 1908)‑‑--

‑‑‑‑S. 12(2)‑‑‑Framing of issues‑‑‑Trial Court is not bound to frame issues in each and every case, but it depends upon the facts and circumstances of each case‑‑‑Where Court finds that further inquiry is required, it would frame issues and record evidence of the parties, but if it is of the opinion that no inquiry is required, then it can dispense with the same and proceed to decide the application.

(d) Fraud‑‑‑

‑‑‑‑Allegation of‑‑‑Where allegation of fraud is levelled, the same must be specified and details thereof should be given.

Abdul Hafeez Pirzada, Senior Advocate Supreme Court, M. Afzal Siddiqui, Advocate Supreme Court and Meter Khan Malik, Advocate‑on‑Record for Petitioners.

Khalid Anwar, Senior Advocate Supreme Court and M.A. Zaidi, Advocate‑on‑Record for Respondent.

Date of hearing: 2nd October, 2001.

2002 C L D 936

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui, Khalil‑ur‑Rehman Ramday and Faqir Muhammad Khokhar, JJ

Messrs MASOOMI ENTERPRISES PAKISTAN (PVT.) LIMITED. and 2 others‑‑‑Petitioners

versus

Messrs PING TAN FISHERY COMPANY and 5 others‑‑‑Respondents

Civil Petitions Nos. 92 and 93 of 2002, decided on 24th January, 2002.

(On appeal from the judgment dated 12‑10‑2001 of High Court of Sindh, Karachi passed in Admt. Appeals Nos.7 and 8 of 2000).

Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑‑

‑‑‑‑Ss. 3(2)(h) & 4(4)‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑‑Admiralty suit‑‑Maintainability‑‑‑Plaintiff through an agreement authorised the defendant to operate ships/trawlers named therein on the plaintiffs fishing licence‑‑‑Defendant defaulted in the payment of agreed amount and committed other breaches of contract, whereupon plaintiff filed Admiralty Suits claiming damages and arrest of the ships‑‑‑High Court after finding that such vessels were owned by another company and not by defendant, transferred the suits to be dealt with on its original side as ordinary suits‑‑‑Division Bench of High Court dismissed the appeals filed by the plaintiff on the grounds that such claim had not arisen from an agreement for hire of the ships; no ship belonging to plaintiff had been hired by defendant; said agreement could be termed as one for hire or use of a licence, which did not fall under S.3(2)(h) of Admiralty Jurisdiction of High Courts Ordinance, 1980; and if it was assumed that defendant was sister concern and held majority shares in 'the owner company, yet no, action in terms of S.4(4)(b) of Admiralty Jurisdiction of High Courts Ordinance, 1980, could be brought against those vessels as the plaintiffs claim had not arisen from those vessels‑‑‑Validity‑‑‑High Court had jurisdiction in any claim based on any agreement relating to carriage of goods do a ship or to its use or hire of a ship and none of the conditions was attracted to the present case‑‑‑Defendant had only to ply its own ships on the licence of plaintiff and pay certain amount‑‑‑Agreement in question basically was for use of licence, and such condition was not covered by S.3(2)(h) of Admiralty Jurisdiction of High Courts Ordinance, 1980‑‑Two arrested vessels were not those, which had been used in performance of the contract‑‑‑High Court hart rightly reached at the conclusion that ships in. question did not belong to defendant, as such, even action under S.4(4) of Admiralty Jurisdiction of High Courts Ordinance, 1980, was not warranted‑‑‑Suits had rightly been transferred to original side‑‑‑Supreme Court refused to grant leave to appeal and dismissed the petitions in circumstances.

Yukong Ltd., South Korean Company, Seoul South Korea v. M.T. Eastern Navigator and 2 others PLD 2001 SC 57 ref.

Ch. Naseer Ahmed, Advocate Supreme Court with Ch. Akhtar Ali, Advocate‑on‑Record for Petitioners.

Nemo for Respondents.

Date of hearing: 24th January, 2002.

2002 C L D 1006

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui and Javed Iqbal, JJ

N.‑W.F.P. EMPLOYEES' SOCIAL SECURITY INSTITUTIONS through Director­ General and others‑ ‑‑Appellants

versus

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN through Chairman, Peshawar and others‑‑‑Respondents

Civil Appeals Nos.207 and 208 of 1995, decided on 12th April, 2002.

(On appeal from the order dated 15‑6‑1994 of the Peshawar High Court, Peshawar in C.M. No.1 of 1992 in C.C. No.3 of 1990 and C.M. No.5 of 1992 in C.C. No.2 of 1990 respectively).

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.405‑‑‑Provincial Employees' Social Security Ordinance (X of 1965), S.23‑‑‑constitution of Pakistan (1973), Art. 185(3)‑‑‑Leave to appeal was granted by Supreme Court to consider whether the petitioner's claim against the liquidated company in its entirety would be deemed to be included amount debts to be given priority over all other debts; and whether on company's failure to pay on due date, the contributions payable by it under S.23(1) of the West Pakistan Employees' Social Security Ordinance, 1965, the amount so payable by it was liable to be increased by 10 per cent. as envisaged by S.23 of the said Ordinance.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.405(1)(a)‑‑‑Provincial Employees' Social Security Ordinance (X of 1965), Ss. 23 & 68‑‑‑General Clauses Act (X of 1897), S. 28‑‑‑Constitution of Employees' Social Security Institution‑‑‑Recovery of dues on priority basis‑‑‑Company under liquidation‑‑‑Official Liquidators treated the amount of contribution as preferential claim‑‑‑Validity‑‑‑Claim of the Institution on preferential basis was brought under S.68 of the Provincial Employees' Social Security Ordinance, 1965, and not on the basis of S.405(1)(a) of the Companies Ordinance, 1984‑‑‑Provisions of S.405(1)(a) of the Companies Ordinance, 1984, and the provisions of S.68 of the Provincial Employees' Social Security Ordinance, 1965, were not inconsistent but were supplementary and complimentary to S.405(1)(a) of the Companies Ordinance, 1984‑‑‑Amount claimed by petitioner was rightly accepted by the Official Liquidator on preferential basis‑‑‑Appeal was disposed of accordingly.

M. Zahoor Qureshi Azad, Advocate‑on‑Record for Appellants.

Noor Ahmed Khan, Advocate‑on‑Record for Respondent No‑1 (in C.A. No.207 of 1995).

Respondent No.2: Ex parte (in C.A. No.207 of 1995).

Date of hearing: 24th October, 2001.

2002 C L D 1012

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry and Hamid Ali Mirza, JJ

PAK CONSULTING & ENGINEERING (PVT.) LTD.‑‑Petitioner

versus

PAKISTAN STEEL MILLS and another‑‑‑Respondents

Civil Petition No.382‑K of 2002, decided on 17th April, 2002.

(On appeal from the judgment/order dated 6‑3‑2002 passed by High Court of Sindh, Karachi in H.C.A. No.289 of 2001).

(a) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.126‑‑‑Contract, of guarantee, encashment of‑‑‑Parties to original contract were in litigation with each other‑‑‑Dispute was with regard to encashment of Bank guarantee during litigation by the Bank‑‑‑Validity‑‑‑Bank guarantee was independent contract between the Bank and the party in whose favour the guarantee had been furnished‑‑‑Where the original parties to the main contract were litigating with each other, encashment of irrevocable Bank guarantee could not be declined by the Bank on the pretext of such litigation.

Messrs National Construction. Co. Ltd. v. Aiwan‑e­-Iqbal Authority PLD 1994 SC 311 ref.

(b) Contract Act (IX of 1872)‑‑‑

‑‑‑‑S.126‑‑‑Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2‑‑‑Constitution of Pakistan (1973), Art.185(3) ‑‑‑ Interim injunction, grant of‑‑‑Condition imposed to Bank guarantee with regard to encashment‑‑‑Bank guarantee executed in favour of the defendant contained a built in condition to the effect that its encashment would depend upon violation of conditions of the tender‑‑‑Plaintiff who had tendered the guarantee assailed the act of encashment of the guarantee in civil suit‑‑‑Both the Courts below declined to grant interim injunction against encashment of Bank guarantee‑‑‑Validity‑‑‑Where violation/ breach could not be determined without conducting inquiry, departure could be made from the rule mentioned in S.126 of the Contract Act, 1872‑‑‑Till final decision of the suit filed by the defendant the Bank guarantee could not be encashed‑‑‑Leave to appeal was granted by Supreme Court in circumstances.

Sirat Trading Establishment v. Trading Corporation of Pakistan Ltd. 1984 CLC 381; Messrs Arul Murugan Traders v. Rashtriya Chemicals and Fertilizers Ltd., Bombay and another AIR 1986 Mad. 161; Kudremukh Iron Ore Co. Ltd. v. Korula Rubber Co. Pvt. and another AIR 1987 Karnataka 139; Messrs Synthetic Foams Ltd. v. Simpled Concrete Piles (India) Pvt. Ltd. AIR 1988 Delhi 207; S. Chand & Co. Ltd. v. Dr. K. Shivarama Karantha and others AIR 1990 NOC 178 (Kant.); State Associates v. Messrs Farben Industrial Development SPA and another 1992 MLD 1007; Messrs Zeenat Brother (Pvt.) Ltd. v. Aiwan‑e‑Iqbal Authority through Chairman, Lahore and 3 others PLD 1996 Kar. 183; Generale. Biscuit, A French Company through Mr. Benoit Barme and another v. Messrs Diamond Food Industries (Pvt.) Ltd. through Chief Executive/Director/Secretary 1999 YLR 305; Messrs Kohinoor Trading (Pvt.) Ltd. v. Mangrani Trading Co. and 2 others 1987 CLC 1533; Messrs Rafidian Bank, Iraq v. M.L. International (Pvt.) Ltd., Karachi and 3 others 1993 MLD 1234; Pakistan Engineering Consultants v. Pakistan International Airlines Corporation and. BCCI and others 1993 CLC 882; Messrs National Construction Co. Ltd. v. Aiwan‑e‑Iqbal Authority PLD 1994 SC 311; Haral Textiles Limited v. Banque Indosues Belgium, SA and others 1999 SCMR 591 and Pakistan National Shipping Corporation PNSC Building, Karachi v. Samsung Co. Ltd: and 3 others 2001 CLC 1473 ref.

Fakhruddin G. Ebrahim, Advocate Supreme Court and Raja Abdul Ghafoor, Advocate‑on‑Record for Petitioner.

G.M. Dastagir, Advocate Supreme Court and Mehr Khan Malik, Advocate‑on‑Record for Respondents.

Date of hearing: 17th April, 2002.

2002 C L D 1067

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry and Hamid Ali Mirza, JJ

NATIONAL BANK OF PAKISTAN‑‑‑Petitioner

versus

CRESCENT STAR INSURANCE CO. LTD. ‑‑‑Respondent

Civil Petition No.717 of 2001, decided on 24th September, 2001.

(On appeal from the judgment dated 22‑11‑2000 passed by High Court of Sindh, Karachi in Constitutional Petition No.D‑296 of 2000).

Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Arts. 199 & 185(3)‑‑‑Constitutional jurisdiction of High Court ‑‑­Delisting of insurance companies from the panel of Bank‑‑­Dispute between Bank and insurance companies was with regard to the payment of amount of claim‑‑‑Insurance companies denied payment of the claim and for the recovery of the same civil suit was filed by the Bank in the Court of competent jurisdiction which was pending‑‑‑Bank was of the view that the companies were acting mala fide, therefore, the companies were delisted from the panel of the Bank‑‑‑Insurance companies assailed the order of the Bank before High Court in exercise of Constitutional jurisdiction under Art.l99 of the Constitution which was allowed by the High Court and the order passed by the Bank was set aside‑‑‑Leave to appeal was granted by Supreme Court to consider, whether petition under Art. 199 of the Constitution filed by the insurance companies in the High Court in the month of February, 2000 challenging order, dated 5th March, 1998 was hit by doctrine of laches and as such was liable to be dismissed on this score alone; whether High Court exercised Constitutional jurisdiction in violation of the settled principle of law that disputed question of facts could not be decided in the Constitutional jurisdiction by the High Court to give relief to the, insurance companies, if so to what effect, whether judgment of High Court was not sustainable because stand taken by the Bank relating to filing of suit for recovery against the borrower and other insurance companies in the jurisdiction of High Court was not considered in the judgment, and whether Constitutional petition filed by the insurance company was liable to abate because suit filed by Bank for recovery of money against insurance companies was earlier in time.

Shamim Iqbal Butt, Advocate Supreme Court for Petitioner.

M. S. Khattak, Advocate‑on‑Record for Respondent.

Date of hearing: 24th September, 2001.

2002 C L D 1143

[Supreme Court of Pakistan]

Present: Munir A. Sheikh, Tanvir Ahmed Khan and Faqir Muhammad Khokhar, JJ

AMJAD ALI and another‑‑‑Petitioners

versus

Messrs M.C.B. and another‑‑‑Respondents

Civil Petitions Nos. 595‑/L and 601‑L of 2002, decided on 28th February, 2002.

(On appeal from the judgment of the Lahore High Court, Lahore dated 19‑10‑2000 passed in F.A.Os. Nos. 102 and 103 of 2000).

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑‑

‑‑‑‑Ss.12 & 21‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑­Supreme Court Rules, 1980, O.XIII, R.1‑‑‑Petitions for leave to appeal barred by 425 days ‑‑‑Condonation‑‑‑Banking Court on 7‑4‑2000 dismissed petitioners' applications for setting aside ex parte decree and their appeals were also dismissed on 19‑10‑2000‑‑‑Petitioners alongwith petitions for leave to appeal filed applications for condonation of delay contending that criminal proceedings in respect of documents allegedly executed by them as guarantors, were pending against respondent‑ loanee and a Bank officer, who were granted bail against cash security of Rs.2,50,000 each, which they deposited and was adjusted by said Court against loan on 30‑7‑2001, therefore, petitioners felt satisfied that decretal amount had, already been paid to Bank and there was no need to file appeal‑‑‑Validity‑‑‑Impugned judgment was passed on 19‑10‑2000, whereas judgment in criminal case was passed on 30‑7‑2001, which too was set aside by High Court, thus, said ground could not be held to be sufficient‑‑‑No explanation was given as to why petitioners against whom ex parte decree had been passed and their applications for setting aside the same had been dismissed, had not approached Supreme Court within period of limitation‑‑‑Applications for condonation of delay were dismissed, resultantly main petitions were also dismissed as barred by time and leave to appeal was refused.

Sh. Maqbul Ahmad, Advocate Supreme Court and C.M. Lateef, Advocate‑on‑Record for Petitioners (in C.P. No.595‑L of 2002).

M.D. Chaudhry, Advocate Supreme Court and Ch. Mehdi Khan Mehtab, Advocate‑on‑Record for Petitioner (in C.P. No. 601‑L of 2002).

Nemo for Respondents

Date of hearing: 28th February, 2002

2002 C L D 1158

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui and Javed Iqbal, JJ

CITY SCHOOLS (PVT.) LTD., LAHORE CANTT.‑‑‑‑Petitioner

versus

PRIVATIZATION COMMISSION, GOVERNMENT OF PAKISTAN and another‑‑‑‑Respondents

Civil Petition No.240 of 2002. decided on 27th March 2002.

(On appeal from the judgment dated 2‑1‑2002 of Lahore High Court, Lahore passed in Writ Petition No. 1453 of 1999)

(a) Privatization Commission Ordinance (LII of 2000)‑‑‑

‑‑‑‑Ss.23 & 25‑‑‑Contract Act (IX of 1872), Ss.2(h) & 10‑‑­Contract‑ ‑‑Tender notice‑‑‑Legal status‑‑‑Tender notice whether a valid contract enforceable at law ‑‑‑Validity‑‑­Tender notice was merely an invitation for making an offer and not by itself an offer or proposal‑‑ ‑Advertisement of the notice did not constitute a proposal; it would become promise or agreement only by acceptance of offer or proposal by the person calling for tender‑‑‑When offer of tender was not accepted by the relevant Authority, no legal rights would accrue to the tenderer ‑‑‑Agreement enforceable by law could become a contract‑‑‑Test for deciding whether a valid contract was made between the parties or not was to ascertain if the parties were of one mind on all the material terms at the time it had been finalized and whether they intended that the matter was closed and concluded between them‑‑‑Correspondence exchanged between parties was to be looked into for such purpose.

(b) Privatization Commission Ordinance (LII of 2000)‑‑‑

‑‑‑‑Ss.5, 23 & 25‑‑‑ Contract Act (IX of 1872), Ss.2(h) & 10‑‑­Constitution of Pakistan (1973), Art.185(3)‑‑‑Contract‑‑­Auction proceedings‑‑‑Petitioner participated in auction proceedings conducted by the Privatization Commission‑‑­Although the petitioner was the highest bidder yet the auction was not confirmed by the Commission and the property was decided to be re‑auctioned‑‑‑Commission did not re‑auction the property rather encashed the Bank draft tendered by the petitioner as earnest money‑‑‑Contention of the petitioner was that the tender notice was a valid contract enforceable under law‑‑‑Validity‑‑‑True test for deciding the question if in a particular circumstance a contract was made or not was to ascertain whether the parties were of one mind on all material terms and conditions or not‑‑‑Commission had never agreed to accept the bid offered by the petitioner and the re‑auction proceedings were never held, as such the same was enough to hold that the Commission was not inclined to sell the property‑‑‑Privatisation Commission could delist a property from auction pool before finalisation of sale process‑‑‑Leave to appeal was refused.

Meraj Din. v. Noor Muhammad and 3 others 1970 SCMR 542; Munshi Muhammad and another v. Faizanul Haq and another 1971 SCMR 533: Muhammad Sharif v. Sharifuddin and 3 others 1972 SCMR 63; Babu Pervez Qureshi v. Settlement Commissioner, Multan and Bahawalpur Divisions, Multan and 2 others 1974 SCMR 337; Moin‑ud‑Din v. Negotiating Committee for Disinvestment of AKMIDC Unit. Muzaffarabad and 8 others PLD 1987 (AJ&K) 99; Messrs Javed (Pvt.) Ltd. v. Government of Pakistan and another 1991 CLC Note 313 at p.237: Muhammad Ali v. District Council, Gujrat and another 1993 MLD 1500; Muhammad Din & Sons Shahdara Mills, Lahore v. The Province of West Pakistan and 5 others PLD 1969 Lah. 823; Ch. Muhammad Yunus v. The Islamic Republic of Pakistan and 3 others PLD 1972 Lah. 847; Calicon (Pvt.) Ltd. v. Federal Government of Pakistan and others 1996 MLD 705; Premier Paper Mills Ltd. v. N.‑W.F.P. Textbook Board 1997 CLC 1288; K.N. Guruswamy v. The State of Mysore and others AIR 1954 SC 592; Haridwar Singh v. Begum Sumbrui and others AIR 1972 SC 1242 and Haji T.M. Hassan Rawther v. Kerala Financial Corporation AIR 1988 SC 157 ref.

Syed Sharifuddin Pirzada, Senior Advocate Supreme Court for Petitioner.

Raja Muhammad Akram, Advocate Supreme Court and Ejaz Muhammad Khan. Advocate‑on‑Record for Respondents.

Date of hearing: 27th March, 2002

2002 C L D 1205

[Supreme Court of Pakistan]

Present: Munir A. Sheikh. Actg. C.J. and Faqir Muhammad Khokhar, J

Haji MUHAMMAD ASHIQ‑‑‑Petitioner

versus

MUHAMMAD AJMAL QURESHI and others‑‑‑Respondents

Civil Petitions Nos.462‑L and 466‑L of 2002, decided on 13th February, 2002.

(On appeal from the judgment, dated 9‑10‑2001 of the Lahore High Court passed in Writ Petitions Nos. 15122 and 15123 of 2001).

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss.9 & 15‑‑‑Penal Code (XLV of 1860), Ss.420/468/471/109‑‑‑Constitution of Pakistan (1973), Arts.185(3) & 199‑‑‑Constitutional petition before High Court‑‑‑Execution of ex parte decree for recovery of Bank loan from petitioners (guarantors) and respondents (borrowers)‑‑‑Adjustment of amount of bail bonds against decretal loan amount‑‑­Petitioners registered a criminal case against respondents for having fraudulently used their title documents for obtaining loan and showing them as guarantors‑‑‑Criminal Court while granting bail to respondents on furnishing bail bonds ordered the adjustment of amount of bail bonds against decretal amount‑‑‑High Court declared such order to be without lawful authority in Constitutional petitions filed by respondents‑‑‑Validity‑‑‑Till recording of a finding by Criminal Court after trial that petitioners were guilty of the offence, the amount of bail bonds provided by them could neither be confiscated nor utilized against amount of loan, which could be recovered in execution proceedings by Bank against all judgment‑debtors or any of them‑‑‑Supreme Court dismissed the petitions and refused to grant leave to appeal.

M. D. Chaudhry, Advocate Supreme Court and Ch. Mehdi Khan Mehtab, Advocate‑on‑Record for Petitioner.

M. A. Qureshi, Advocate‑on‑Record for Respondent No. 1.

Date of hearing: 13th February, 2002.

2002 C L D 1464

[Supreme Court of Pakistan]

Present: Munir A. Sheikh, Tanvir Ahmed Khan and Faqir Muhammad Khokhar, JJ

RAHIM JAN‑‑‑Petitioner

versus

SECURITIES EXCHANGE COMMISSION OF PAKISTAN and others‑‑‑Respondents

Civil Petition No. 3978‑L of 2001, decided on 27th February, 2001.

(On appeal from the judgment of the Lahore High Court, Lahore, dated 29‑10‑2001 passed in Commercial Appeal No. 2 of 2001).

Securities and Exchange Commission of Pakistan Act (XLII of 1997)‑‑‑

‑‑‑S.34‑‑‑Limitation Act (IX of 1908), Ss. 5 & 29‑‑­Constitution of Pakistan (1973), Art.185(3)‑‑‑Appeal before High Court ‑‑‑Condonation of delay‑‑‑Failure to file appeal within limitation provided under S.34 of the Securities and Exchange Commission of Pakistan Act, 1997‑‑‑Petitioner, instead of filing appeal within sixty days against order of the Commission, preferred Constitutional petition before High Court which was withdrawn and the appeal was filed‑‑‑High Court dismissed the appeal being time‑barred‑‑­Validity‑‑‑Petitioner had the knowledge of the date having been fixed by the Commission in the case and even if he was not able to appear on the date fixed, nothing was said in the application for condonation of delay as to what prevented him from filing the appeal within period of limitation before the High Court‑‑‑View taken by the High Court in the judgment that the appeal was barred by time did not suffer from any legal infirmity and Supreme Court declined to interfere with the judgment passed by High Court‑‑‑Leave to appeal was refused.

Irfan Qadir, Advocate Supreme Court and Ejaz Ahmad Khan, Advocate‑on‑Record for Petitioner.

Ch. Akhtar Ali, Advocate‑on‑Record for Respondents.

Date of hearing: 27th February, 2002.

2002 C L D 1473

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui, Hamid Ali Mirza and Abdul Hameed Dogar, JJ

MERCANTILE TRADERS (PVT.) LTD. and another‑‑‑Appellants

versus

STATE BANK OF PAKISTAN‑‑‑Respondent

Civil Appeals Nos.400‑K and 401‑K of 1990, decided on 8th March. 2001.

(On appeal from the judgment dated 14‑2‑1989 of Sindh High Court, dated 14‑2‑1989 in Civil Petitions Nos.D‑1054 of 1990 and 1055‑D of 1990).

(a) Banking Companies Ordinance (LVII of 1962)‑‑‑

‑‑‑‑S.27(l) (as amended by Banking Companies (Amendment) Ordinance (LVI of 1979))‑‑‑Licensing of banking companies‑‑­Object‑‑‑Object of S.27(1) of Banking Companies Ordinance. 1962, was to effectively check the growing trend of illegal banking business by various investment companies, which were defrauding the public by offering high rate of interest up to 5 to 796 per month.

(b) Banking Companies Ordinance (LVII of 1962)‑‑‑

‑‑‑‑Ss. 27(1) & 43‑B [as amended by Banking Companies (Amendment) Ordinance (LVI of 1979)]‑‑‑Constitution of Pakistan (1973), Art.185(3)‑‑‑Leave to appeal was granted by Supreme Court to consider, whether High Court had incorrectly interpreted the concept of banking business; whether it was a necessary condition that the business of banking must be transacted with members of the general public; whether the mere borrowing of money from family members could constitute banking business; whether principle of ejusdem generis was applicable in relation to the definition of 'banking'; whether the order of State Bank could have been passed without giving any reasons: and whether the State Bank failed to note that a discretion had been conferred on it under S.43‑B of Banking Companies Ordinance, 1962.

(c) Banking Companies Ordinance (LVII of 1962)‑‑‑

‑‑‑‑S.5(b)(c)‑‑‑Term 'public'‑‑‑Connotation‑‑‑Members of one family whether fall within the definition of 'public' as envisaged in S.5(b)(c) of Banking Companies Ordinance, 1962‑‑‑Members of one family being indefinite would fall within the purview of public, irrespective of the fact that the deposits were obtained from a limited number of them‑‑­Members of one family or pertaining to a community, besides being members, were 'public' within the meaning of S.5(b)(c) of Banking Companies Ordinance, 1962.

(d) Words and phrases‑‑‑

‑‑‑‑"Ejusdem generis"‑‑‑Connotation and applicability ‑‑‑Pre­conditions.

Doctrine of ejusdem generis would apply when the following conditions exist.

(1) The statute contains an enumeration by specific words;

(2) the members of the enumeration constitute a class;

(3) the class is not exhausted by the enumeration;

(4) a general term follows the enumeration; and

(5) there is not clearly manifested an intent that the general term be given a broader meaning than the doctrine requires.

Doctrine of ejusdem generis is only a rule of construction and not of substantive law. It provides a mode of interpretation, which is always subject to the intention of the Act. It does not apply if the intention of the Act suggests to the contrary.

Black's Law Dictionary, Fifth Edn., p. 464; Don Bosco High School v. The. Assistant Director, E.O.B.I. and others PLD 1989 SC 128 and Jamat‑i‑Islami Pakistan through Syed Munawar Hassan, Secretary‑General v. Federation of Pakistan through Secretary Law, Justice and Parliamentary Affairs PLD 2000 SC 111 ref.

(e) Banking Companies Ordinance (LVII of 1962)‑‑‑

‑‑‑‑Ss 27(1) & 43‑B (as amended by Banking Companies (Amendment) Ordinance (LVI of 1979))‑‑‑Banking business‑‑­Publication of declaration under S.43‑B of Banking Companies Ordinance, 1962‑‑‑Contention of the appellants was that no business of banking was being carried out by them and the investments were only received from their family members and not from the public‑‑‑Authorities made necessary inquiries and found that the appellants were transacting business of banking in contravention of S.27(1) of Banking Companies Ordinance, 1962‑‑‑Factum of holding of inquiry by the Authorities was not challenged either before Supreme Court or before the High Court‑‑‑Only information to be conveyed was that the appellants were transacting the business of banking in contravention of S.27(1) of Banking Companies Ordinance, 1962, which was done arid so was mentioned in the declarations‑‑‑Statements of facts coupled with show‑cause notices were served upon the appellants, which comprehensively provided them to know about material quoted against them by the Authorities‑‑‑Effect‑‑‑Where full opportunity of personal hearing was afforded and the contention of the appellants was repelled by the High Court by assigning reasons which were unassailable, Supreme Court declined to interfere with the judgment passed by High Court‑‑‑Appeal was dismissed.

Mohinder Sindh Gill and another v. The Chief Election Commissioner, New Delhi and others AIR 1978 SC 851; Syed Ali Abide Zaidi and others v. Deputy Settlement and Rehabilitation Commissioner, Gujranwala and others PLD 1967 Lah. 836 and Brigadier His Highness Nawab Muhammad. Abbas Khan Abbasi, Ameer of Bahawalpur v. Government of Pakistan through the Joint Secretary, Ministry of States and Frontier Regions, Rawlapindi and 23 others PLD 1978 Lah. 1166 ref.

Afsar Ali Abidi, Advocate Supreme Court and K.A. Wahab, Advocate‑on‑Record for Appellants.

Ali Ahmed Fazeel, Advocate Supreme Court and M.S. Ghuary, Advocate‑on‑Record for Respondent.

Date of hearing: 8th March, 2001.

2002 C L D 1485

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry and Rana Bhagwandas, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN‑‑‑Petitioner

versus

Messrs VALIBHAI KAMARUDDIN and others‑‑‑Respondents

Civil Petition for Leave to Appeal No. 17‑K of 2000, decided on 24th February, 2000.

(On appeal from the judgment dated 14‑10‑1999 passed by High Court of Sindh in H.C.A. No. 138 of 1990).

Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 10(1)‑‑‑Constitution of Pakistan (1973), Art.185(3)‑‑­Appeal‑‑‑Maintainability‑‑‑Winding‑up of company‑‑‑High Court dismissed appeal of petitioner being not competent‑‑­Validity‑‑‑Leave to appeal was granted by Supreme Court to examine; whether appeal before Division Bench of High Court against order of Company Judge was competent or before Supreme Court.

Muhammad Bakhsh v. Pakistan Industrial Credit Investment Corporation Limited and others 1999 SCMR 25 ref.

A.I. Chundrigar, Advocate Supreme Court and Ali Akbar, Advocate‑on‑Record (absent) for Petitioner.

Afsar Abidi, Advocate Supreme Court and A. Aziz Khan, Advocate‑on‑Record (absent) for Respondents.

Date of hearing: 24th February, 2000.

2002 C L D 1487

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry and Qazi Muhammad Farooq, JJ

HALA SPINNING MILLS LTD. ‑‑‑Appellant

versus

INTERNATIONAL FINANCE CORPORATION and another‑‑‑Respondents

Civil Appeal No. 1528 of 1999, decided on 6th June, 2001.

(On appeal from the order, dated 23‑12‑1999 passed by Lahore High Court, Lahore in Civil Original No.26 of' 1996).

(a) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑Ss. 305 & 306‑‑‑Winding‑up of company while in running condition‑‑‑Duty of Company Judge‑‑‑Whenever case of a running company is placed before Company Judge or Appellate Court, they should examine such matter differently from a company which is not in a running condition‑‑‑Supreme Court observed that in such a case efforts should be made by judicial forums to adopt such a device so that the project may continue running commercially and its financial liabilities start reducing gradually; business trend in the market being that if running concern is put to sale, it fetches high price of its assets which can substantially clear proportionate liability of the creditors.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 451, 452 & 456‑‑‑Foreign company‑‑‑Institution of legal proceedings‑‑‑Conditions‑‑‑Foreign company cannot institute legal proceedings without fulfilling requirements of Ss.451 & 452 of Companies Ordinance, 1984.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 306(1)(a)‑‑‑International Finance Corporation Act (XXVII of 1956). S.5 & Sched., Art.VI‑‑‑Winding‑up proceedings‑‑­Statutory Corporation recognized in Pakistan by International Finance Corporation Act, 1956‑‑‑Initiation of winding‑up proceedings by such Corporation ‑‑‑Validity‑‑­Such Corporation enjoyed the status of Corporation possessing full juridical personality particularly empowered to contract: to acquire and dispose of immovable property and to institute legal proceedings ‑Legal proceedings for winding‑up of a company registered under Companies Ordinance. 1984, could be initiated by a creditor by assignment or otherwise to whom the company was indebted in a sum exceeding one per cent of its paid‑up capital or fifty thousand rupees whichever was less than due, under the provisions of S.306(1)(a) of Companies Ordinance. 1984‑‑‑Where the foreign Corporation was the creditor of the company to be wound up and it had extended credit to the company which was more than Rs.50,000, therefore, after completion of the formalities, the foreign Corporation had a right to pray for the winding‑up of the company in circumstances.

(d) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 305‑‑‑Winding‑up proceedings‑‑‑Defence‑‑‑Where such proceedings are instituted against a company, same are defended on the pretext that there is a bona fide dispute with regard to debts outstanding against it, therefore, winding‑up order cannot be passed against it.

Messrs Sindh Glass Industries Ltd. Karachi v. National Development Finance Corporation and 2 others PLD 1996 SC 601 ref.

(e) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305‑‑‑West Pakistan Usurious‑ Loans Ordinance (XVIII of 1959), Preamble ‑‑‑Winding‑up proceedings‑‑‑Provisions of West Pakistan Usurious Loans Ordinance, 1959‑‑­Applicability‑‑‑Provisions of the West Pakistan Usurious Loans Ordinance, 1959 cannot be pressed into service in the proceedings relating to winding‑up of a company.

(f) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss.10(1), 230, 233 & 305‑‑‑Appeal‑‑‑Winding‑up petition‑‑­Exercise of discretion by Company Judge‑‑‑Material to be considered‑‑‑Scope‑‑‑Properly maintained accounts and statement of accounts as well as balance‑sheet duly audited by the auditors of company in terms of Ss.230 & 233 of Companies Ordinance, 1984, could be considered material documents to exercise discretion either to allow petition for winding‑up or to reject the same subject to true depiction of financial condition of the company‑‑‑On the basis of statement of accounts and balance‑sheet duly audited by the auditor of the company opinion could be formed that the company was financially solvent to clear its liability or otherwise‑‑‑Company was not commercially solvent concern, notwithstanding the fact that presently it was in a running condition but as per up‑to‑date reports of auditor, the. company was running in a loss and its liabilities were increasing day by day, therefore, the company was not in a position to clear its liabilities which it owed towards the institutions which had provided financial accommodation to it from time to time‑‑‑Opinion formed by Company Judge in his judgment that it was just and equitable to wind up the company was not interfered with by the Supreme Court.

Messrs Sindh Glass Industries Ltd., Karachi v. National Development Finance Corporation and 2 others PLD 1996 SC 601; Messrs Ali Woollen Mills Ltd. v. Industrial Development Bank of Pakistan PLD 1990 SC 763; Trade and Industry Publications Limited v. Industrial Development Bank of Pakistan PLD 1990 SC 768 and Messrs Sindh Technical Industries Limited v. Messrs Investment Corporation of Pakistan 1998 SCMR 1533 ref.

(g) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 305‑‑Winding‑up of company‑‑‑Pre‑conditions‑‑‑Where it is impossible to carry on business of company except at loss and there is no reasonable hope that the object of trading at profit cart be achieved and probable assets are insufficient to meet the existing liability, then winding‑up of company becomes inevitable.

(h) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 305‑‑‑Winding‑up proceedings‑‑‑Honest and bona fide dispute‑‑‑Scope‑‑‑Where the company under the winding‑up proceedings failed to establish the honest and bona fide dispute, it was in the interest of the creditors that the company should be wound up.

Messrs Sindh Glass Industries Ltd. Karachi v. ­National Development Finance Corporation PLD 1996 SC 601 fol.

(i) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑Ss. 305 & 306(1)(a)‑‑‑Winding‑up application‑‑‑Failure to join hands by all creditors‑‑‑Effect‑‑‑Where the applicant-­creditor had its debts more than fifty thousand rupees, such creditor did not require other creditors to join hands with the applicant.

(J) Companies Ordinance (XLVII of 1984)‑‑‑‑

‑‑‑‑S.305‑‑‑State Bank of Pakistan Circular No. 19 (Banking Policy and Regulation Department)‑‑‑Winding‑up proceedings‑‑‑State Bank of Pakistan‑‑‑Circular No. 19 (Banking Policy and Regulation Department) ‑‑‑Effect‑‑­Circular cannot be considered a document to override provisions of S.305 of Companies Ordinance, 1984. and on account of issuance of scheme under the circular the winding‑up proceedings are not liable to be postponed.

Umar Atta Bandial, Advocate Supreme Court and M.S. Khattak. Advocate‑on‑Record for Appellant.

Dr. Pervez Hassan, Senior Advocate Supreme Court, M. Bilal. Senior Advocate Supreme Court and Ejaz Muhammad Khan, Advocate‑on‑Record for Respondents.

Dates of hearing: 2nd to 4th May, 2001.

2002 C L D 1510

[Supreme Court of Pakistan]

Present: Munir A. Sheikh and Mian Muhammad Ajmal, JJ

Messrs SIMNWA POLYPROPYLENE (PVT.) LTD and others‑‑‑Petitioners

versus

Messrs NATIONAL BANK OF PAKISTAN‑‑‑Respondent

Civil Petition for Leave to Appeal No.2590‑L of 2000 decided on 23rd November, 2000.

(On appeal from the judgment dated 19‑9‑2000 of the Lahore High Court passed in R.F.A. No. 172 of 2000).

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑S.9‑‑. Constitution of Pakistan (1973), Art.l85(3)‑‑‑Suit for recovery of loan‑‑‑Application for leave to defend‑‑­Limitation‑‑‑Computation‑‑‑Service to defendant was made through three modes viz. through publication in newspaper on 2‑6‑2000: through registered post acknowledgement due on 1‑6‑2000 and through bailiff of the Court on 15‑6‑2000‑‑‑Banking Court computed period of limitation from publication in newspaper and dismissed application for leave to defend being time‑barred‑‑‑Appeal before High Court was also dismissed‑‑‑Contention of the defendant was that for purpose of computing the period of limitation, the service effected through bailiff of the Court should be taken into consideration and not the other modes as the former was comparatively more valid having been made in the prescribed manner‑‑‑Validity‑‑‑Service in any of the modes prescribed in S.9(3) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, was deemed to lie valid for the purpose‑‑‑Contention of the defendant that the latest mode should be taken into consideration for computing the period of limitation and not the other, had no force‑‑‑Judgments passed by both the Courts below not suffering from any illegality, leave to appeal was refused.

Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCMR 2353 and Messrs Ahmad Autos , and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 ref.

M. Abbas Mirza, Advocate Supreme Court for Petitioners.

Ali Ahmad Awan, Advocate Supreme Court for Respondent.

Date of hearing: 23rd November, 2000.

2002 C L D 1513

[Supreme Court of Pakistan]

Present: Jawed Iqbal and Tanvir Ahmed Khan, JJ

Mst. SAEEDA BEGUM‑‑‑Petitioner

versus

SMALL BUSINESS FINANCE CORPORATION, DERA GHAZI KHAN and others‑‑‑Respondents

Civil Petition for Leave to Appeal No.3178/L of 2000, decided on 23rd May, 2002.

(On appeal from the judgment dated 31‑10‑2000 of the Lahore High Court, Multan Bench, Multan passed in F.A.O. No. 116 of 2000).

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997)‑‑‑

‑‑‑‑Ss. 14, 15 & 18‑‑‑Civil Procedure Code (V of 1908), O.XXI, Rr.58, 62, 66, 99 & S.151‑‑‑Constitution of Pakistan (1973), Art.185(3)‑‑‑Execution of decree for recovery of loan amount‑‑‑Objection as to sale of mortgaged property by third person‑‑‑Facility of loan was advanced in the year 1988 and judgment‑debtor provided all the documents pertaining to the property inclusive of its mutation, non‑encumbrance certificate from Sub‑Registrar, approved site plan of the property and many other documents while mortgaging the property‑‑‑Banking Court decreed the suit of Financial Corporation against judgment‑debtor and decree‑holder having equipped with the decree filed execution petition and notices thereupon were issued to the judgment‑debtor under O.XXI, R.66. C.P.C.‑‑‑Nobody having appeared in spite of such notice, order was passed for the auction of the property and auctioneer was accordingly appointed‑‑­Petitioner claimed that he had purchased the property in question in the year 1989 and moved objection petition under O.XXI, R.99 read with S.151, C.P.C. before the executing Court, and auction was stayed‑‑‑Petitioner only produced photostat copies of the registered sale‑deeds relied upon by her and original documents or attested copies of the same were not produced‑‑‑Banking Court in the exercise of its powers under O.XXI, R.58, C.P.C. after taking into account all the documents and pleas raised by the parties, dismissed the objection petition which order was maintained by the High Court‑‑‑Validity‑‑‑Claim/objection of the petitioner was rightly dismissed under O.XXI, R.58, C.P.C. as the Banking Judge, after thrashing the entire documents placed on, record, came to an irresistible conclusion that the disputed property, subject‑matter of the proceedings, was already mortgaged with the Financial Corporation‑‑‑Documents annexed with the objection petition reflected that the petitioner had claimed that she purchased the property in question in the year 1989 while the same was already mortgaged‑‑‑Petitioner had only produced photostat copies of the documents while the decree‑holder had produced a number of documents to substantiate the claim of the Corporation that the property in question was the very property which was mortgaged by the judgment ­debtor at the time of grant of loan‑‑‑No illegality, had been committed by the Banking Court in dismissing the objection petition of the petitioner in exercise of its powers under O.XXI, R.58, C.P.C. which order had been maintained by the High Court‑‑‑Petition for leave to appeal against the order of the High Court was dismissed by the Supreme Court.

Saeedur Rehman Farrukh, Advocate Supreme Court and M. Tanvir Ahmad, Advocate‑on‑Record for Petitioner.

M. Iqbal Khichhi, Advocate Supreme Court for Respondent No. 1.

Date of hearing: 23rd May, 2002.

2002 C L D 1781

[Supreme Court of Pakistan]

Present: Javed Iqbal, Hamid Ali Mirza and Tanvir Ahmed Khan, JJ

UNITED BANK LIMITED‑‑‑Appellant

Versus

PAKISTAN INDUSTRIAL CREDIT AND INVESTMENT CORPORATION LTD. and another‑‑‑Respondents

Civil Appeal No. 517 of 1993, decided on 21st March, 2002.

(On appeal from the order dated 15‑4‑1993, of the High Court of Sindh, Karachi, passed in High Court Appeal No.5 of 1993).

(a) Companies Ordinance (XLVII of 1984)‑‑‑--

‑‑‑‑Ss. 305, 309, 333 & 10(2)‑‑‑Contract Act (IX of 1872), S.126‑‑‑Constitution of Pakistan (1973), Art. 185(3)‑‑­Winding‑up of Company‑‑‑Direction by High Court for encashment of investment guarantee-‑‑Validity‑‑‑Leave to appeal was granted by the Supreme Court to consider, whether the official liquidator should have lodged the claim under the Bank Guarantee up to the last extended validity date or he should have encashed the Bank guarantee on the date when the High Court accepted the official liquidator's reference.

(b) Contract Act (IX of 1872)‑‑--

‑‑‑‑S. 126‑‑‑Companies Ordinance (XLVII of 1884), Ss.305, 309, 333 & 10(2)‑‑‑Contract of guarantee‑‑‑Financial Institution was creditor while the guarantee was provided by a Bank which was surety‑‑‑Said guarantee had been executed for the benefit of the company (creditor) now under liquidation‑‑‑Essence of the guarantee was that the guarantor had agreed to discharge the liability of the debtor if the latter failed in performing his liability which all depended on the terms of the guarantee and guarantor could not be made liable beyond the terms of his guarantee‑‑‑Whatever the guarantor had undertaken, the same had to be performed‑‑‑Guarantee having been executed by the Bank, satisfaction of the same could not be avoided on mere technicalities.

Prudential Commercial Bank Limited v. Hydari Ghee Industries Limited and others 1999 MLD 1694 ref.

(c) Contract Act (IX of 1872)‑‑‑--

‑‑‑‑S. 126‑‑‑Bank guarantee‑‑‑Liability of guarantor ‑‑‑Scope‑‑­Liability of guarantor depends‑ on the language of the guarantee‑‑‑Terms of the guarantee would demonstrate how far the guarantor has bound itself to indemnify the creditor‑‑‑Guarantee may be absolute or conditional, dependant on the performance of a condition by either party within the terms of the guarantee.

(d) Companies Ordinance (XLVII of 1984)‑‑--

‑‑‑‑Ss.316 & 333‑‑‑Contract Act (IX of 1872), S.126‑‑­Liqi.~'d.ation of company‑‑‑Bank guarantee, encashment of‑‑­Jurisdiction‑‑‑Company Judge to order encashment of Bank guarantee given on behalf of the company in liquidation‑‑­Scope‑‑‑Bank had undertaken to pay a specified amount to the creditor (financial institution) if the borrower failed to raise "capital within the stipulated period‑‑‑No condition whatsoever was attached to the performance of the creditor before making demand‑‑‑Guarantee was extended from time to time‑‑‑Time limit in the guarantee was for the borrower to raise the capital within the stipulated period, failure whereof had given unconditional right to the creditor for encashment of Bank guarantee‑‑‑No time limit having been provided for the creditor, as such the direction given by the Company Judge could not be frustrated on that score‑‑­Contention that separate suit should have been filed for encashment of Bank guarantee and the Company Judge had no jurisdiction to order encashment of the same in liquidation proceedings was devoid of any force.

Discount Bank of India Ltd., Delhi v. Triloki Nath and others AIR 1953 Punj. 145; Knowles v. Scott (1891) 1 Ch. 717; Palmer's Company Law, p.414; Manager, Jammu and Kashmir, State Property in Pakistan v. Khuda Yar and another PLD 1975 SC 678 and Imtiaz Ahmad v. Ghulam Ali PLD 1963 SC 382 ref.

(e) Companies Ordinance (XLVII of 1984)‑‑‑--

‑‑‑‑Ss. 316 & 333‑‑‑Contract Act (IX of 1872), S.126‑‑­Liquidation of company‑‑‑Powers of Company Judge and function of Official Liquidator detailed‑‑‑Bank guarantee which was executed for the benefit of the company under liquidation could not be frustrated by putting up technicalities so as to thwart the efficient performance of the liquidator ‑‑‑Pushing the creditor for encashment of Bank guarantee through a civil suit would simply be generating multiplicity of litigation which was not the mandate of law‑‑­Mere. technicalities unless offering insurmountable hurdle not to be allowed to defeat ends of justice.

Section 316 of the Companies Ordinance has given the Company Judge overriding powers for disposing of any matter germane to the winding‑up proceedings. The principal object of winding‑up of a company is to realize its property and its liabilities are discharged in accordance with law. The official liquidator who is an officer of the Court is appointed by the Company Judge who looks after and supervises the interests of all the parties concerned in a liquidation of a company. He is a trustee not only for the creditor but for the company under liquidation as well. He has to safeguard the interests of all the parties for the efficient performance of his duties. He is to take possession of movable and immovable properties of the company. Section 333 of the Ordinance has given wide powers to the official liquidator which are exercised by him under the supervision of Company Judge who has been authorised to issue such directions.

The official liquidator has got ample powers to take steps for the efficient winding‑up of the company so as to create a balance among the interest of the parties according to law and the rules.

In a winding‑up the liquidator acts not merely for creditor but for contributories and for the company also. A liquidator is an agent employed for the purpose of winding‑up of the company. In some respells he is a trustee; but he is not a trustee for each individual creditor: see Knowles v. Scott (1891) 1 Ch. 717 at p.723. His principal duties are to take possession of assets, to make out the requisite lists of contributories and creditors, to have disputed cases adjudicated upon, to realise the assets subject to the control of the Court in certain matters and to apply the proceeds in payment of the company debts and liabilities in due course of administration, and, having done that, to divide the surplus amongst the contributories and to adjust their rights. Any proceedings necessary for the protection of the property are taken by the liquidator in the name of the company, unless the Court has made a vesting order, in which case he can sue in his official name is respect of property vested in him by the order. He can institute or defend any suit with the sanction of the Court and, he can take any other legal proceedings, civil or criminal, also with such sanction.

In the present case the bank guarantee was got executed for the benefit of the company under liquidation by the Bank as such the same could not be frustrated by putting up technicalities so as to thwart the efficient performance of the liquidator. What was permissible for the Courts of general jurisdiction in the interest of justice, fairplay and equity when there was no statutory bar, was also permissible for the Company Judge so as to spare the parties from the ordeal of rushing from one forum to another for the redressal of their grievance. All legal formalities were to safeguard the paramount interest of justice. In the present case pushing the creditor for the encashment of bank guarantee through a civil suit would simply be generating multiplicity of litigation which was not the mandate of law. The guarantor in the present case particularly the 'Bank could not avoid its liability on all these technicalities.

Mere technicalities, unless offering insurmountable hurdle, should not be allowed to defeat the ends of justice.

Discount Bank of India Ltd., Delhi v. Triloki Nath and others AIR 1953 Punj. 145; Knowles v. Scott (1891) 1 Ch. 717; Palmer's Company Law, p.414; Manager, Jammu and Kashmir State Property in Pakistan v. Khuda Yar and another PLD 1975 SC 678 and Imtiaz Ahmad v. Ghulam Ali PLD 1963 SC 382 ref.

(f) Administration of Justice‑------

‑‑‑‑ Mere technicalities unless offering insurmountable hurdle should not be allowed to defeat the ends of justice.

Imtiaz Ahmad v. Ghulam Ali PLD 1963 SC 382 ref.

(g) Constitution of Pakistan (1973)‑‑‑--

‑‑‑‑Art. 185‑‑‑‑Appeal to Supreme Court‑‑‑New plea‑‑­Appellant had not raised the plea of jurisdiction before the High Court and fully participated in the proceedings‑‑­Such plea could not be raised before the Supreme Court.

Ghulam Mohi‑ud‑Din v. Chief Settlement Commissioner (Pakistan), Lahore and others PLD 1964 SC 875 ref.

Abubakr I. Chundrigar, Advocate Supreme Court for Appellant.

Muhammad Munir Peracha, Advocate Supreme Court with Imtiaz Muhammad Khan, Advocate‑on‑Record for Respondent No. 1.

Respondent No.2: Ex parte.

Dates of hearing: 20th and 21st March, 2002.

2002 C L D 1794

[Supreme Court of Pakistan]

Present: Rana Bhagwandas, Javed Iqbal and Sardar Muhammad Raza, JJ

RAUF B. KADRI‑‑‑Appellant

Versus

STATE BANK OF PAKISTAN and another‑‑‑Respondents

Civil Appeal No. 1213 of 2001, decided on 25th April, 2002.

(On appeal from order of Sindh High Court, Karachi dated 18‑4‑2001 passed in J.M. No. 15 of 2000).

Per ‑ Rana Bhagwandas, J.; Sardar Muhammad Raza, J. agreeing; Javed Iqbal, J. contra‑‑‑

(a) Civil Procedure Code (V of 1908)‑‑‑

‑‑‑‑O.I, R.10‑‑‑Scope of O.I, R.10, C.P.C. is very wide‑‑‑Power to transpose is derived amongst others, from O.I, R.10, C.P.C., which has to be interpreted liberally in the interest of complete adjudication of all the questions involved in a lis and in order to avoid multiplicity of the proceedings‑‑‑Such power by the Court is invariably exercised generously and technical hurdles are always bypassed for considerations of effectual adjudication and inexpensive access to justice.

Said Alam v. Raja Sohrab Khan 1970 SCMR 639; Central Government of Pakistan v. Suleman Khan PLD 1992 SC 590 and Uzin Export Import Enterprises v. Union Bank of Middle East Ltd. PLD 1994 SC 95 ref.

(b) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305‑‑‑Constitution of Pakistan (1973), Art.185(2)‑‑­Appeal to Supreme Court‑‑‑Winding‑up of company‑‑‑Law leans in favour of adjudication on merits and in winding‑up cases, utmost endeavour should be made for survival of the Corporate sector rather than to dismantle the same‑‑­Winding‑up proceedings against the company in the present case, having been pending for more than two years, Supreme Court found it just, proper and expedient in the interest of justice to decide the appeal on merits rather than to remand the same to the High Court after such delay‑‑‑Object and spirit of the Companies Ordinance, 1984 is to dispose of such cases with utmost promptitude and an appeal before Supreme Court is required to be finally decided within a time span of ninety days.

(c) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305‑‑‑Constitution of Pakistan (1973), Art.185(2)‑‑­Appeal to Supreme Court‑‑‑Winding‑up of a Banking Company‑‑‑Appeal on behalf of ex‑Chairman of the company‑‑‑Maintainability‑‑‑Order of winding‑up having been passed against the company, company alone as a juristic person or an aggrieved creditor could appeal for its survival rather than a former Chairman, who had not disclosed/produced his pecuniary or any other legal interest in the company or any resolution passed by the Board of Directors of the company and was lawfully superseded by State Bank of Pakistan and was a convict by a competent Court of law‑‑‑Such person in his personal capacity was not competent to assail the winding‑up order without authorization of the company and after the supersession of the company by the State Bank of Pakistan, his connections with the company were completely severed‑‑­Mismanagement and corrupt practices by the said person, in fact, had brought the company to the state of liquidation and his conviction, unless set aside by Supreme Court, would be an ample proof of his disqualification‑‑‑Appeal by such person against order of liquidation as constituted was thus, liable to dismissal on such score alone.

(d) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.306‑‑‑Civil Procedure Code (V of 1908), O.I, R.10‑‑­Winding‑up proceedings in case of a Financial Institution‑‑­Financial Institution had incurred losses over four Billions of Rupees against capital of Rs.0.656 Billion and was unable to pay its debts‑‑‑State Bank of Pakistan became party to the proceedings on its transposition/substitution after withdrawal of the other party and none of its previous members objected to such supersession ‑‑‑Statutory notice under S.306, Companies Ordinance, 1984 were already given by the said party and having failed to respond to the notices, petition for winding‑up was filed against the Financial Institution ‑‑‑State Bank of Pakistan, after transposition/substitution as petitioner was not required to start afresh by issuing notice under S.306, Companies Ordinance, 1984 as non‑service of notice under S.306, Companies Ordinance, 1984 was not fatal to the petition as a whole as the provision was directory in nature and led to the presumption of inability to pay debt in case demand was not secured or debt not settled.

Sindh Glass Industries Limited v. National Development Finance Corporation PLD 1996 SC 601 and Platinum Insurance Company Limited v. Daewoo Corporation PLD 1999 SC 1 ref.

(e) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S. 306‑‑‑Inability of a company to pay its debts‑‑­Section 306 of the Companies Ordinance, 1984 is a self ­contained provision to judge the viability of the company‑‑­Use of word `or' between cls. (a), (b) & (c) of S.306(1) brings to the conclusion that said clauses are disjunctive in nature and‑ independent of each other‑‑‑Company thus would be deemed to be unable to pay its debts if any of the courses provided in S.306 is adopted.

(f) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.306‑‑‑Banking Companies Ordinance (LVII of 1962), Ss.41‑A & 41‑B‑‑‑Civil Procedure Code (V of 1908), O.I, R.10‑‑‑Petition for winding‑up proceedings of a Financial Institution‑‑‑Inability of the institution to pay its debts‑‑­State Bank of Pakistan enjoyed supervisory power under the Banking Companies Ordinance, 1962 over the Financial Institutions and for that reason, in exercise of its power under the said Ordinance, could remove the Directors and other managerial persons according to law‑‑‑State Bank of Pakistan, in the interest of such Financial Institution and the public at large, could also step into the arena to save the creditors‑‑‑Courts of law also had the powers under O.I, R.10, C.P.C. to allow transposition of State Bank of Pakistan in the proceedings against the Financial Institution.

Manager, Jammu and Kashmir State Property v. Khuda Yar PLD 1975 SC 678 and Imtiaz Ali v. Ghulam Ali PLD 1963 SC 382 ref.

(g) Administration of justice‑‑‑----

‑‑‑‑ Procedures are meant ‑only to regulate and foster the cause of justice and not to thawart the same.

Manager, Jammu and Kashmir State Property v. Khuda Yar PLD 1975 SC 678 and Imtiaz Ali v. Ghulam Ali PLD 1963 SC 382 ref.

(h) Banking Companies Ordinance (LVII of 1962)‑‑‑--

‑‑‑‑Ss.41‑A & 41‑B‑‑‑Scope and appreciation of Ss.41‑A & 41‑B, Banking Companies Ordinance, 1962.

While section 41‑A of the Banking Companies Ordinance, 1962 enumerates powers of the State Bank of Pakistan to remove Directors and other managerial persons from the office for reasons to be recorded in writing and after giving a reasonable opportunity' of hearing to the Chairman or Director or Chief Executive of the company, section 41‑B of the said Ordinance highlights the powers of the State Bank to supersede a Board of Directors of the Banking Company. Strictly speaking the action taken by the State Bank of Pakistan as aforesaid may not tantamount to taking over control and management of the affairs of the Company but it is restricted to supersession of the Board of Directors by their removal and substitution in the discretion of the Bank. BY supersession and substitution of the Board of Directors of a Company. State Bank of Pakistan does not acquire itself any proprietary or controlling powers in the assets or affairs of the Company, which are to be run and administered by the newly ­appointed Board of Directors under the Articles of Association and Bye‑laws of the Company and subject to law.

(i) Protection of Economic Reforms Act (XII of 1992)‑‑‑----

‑‑‑‑S.7‑‑‑Object and scope of S.7, Protection of Economic Reforms Act, 1992.

Spirit and object of section 7 of the Protection of Economic Reforms Act, 1992, being to create a liberal environment for savings and investments and lawful protection of economic reforms introduced by the Government in order to create confidence in economic policies introduced by Government, it was intended to protect ownership, management and control of any banking, commercial or other company, establishment or enterprise transferred by the Government to any person under any law with the understanding that it shall not be compulsorily acquired or taken over by the Government for any reason whatsoever. Real intention and object behind this provision of law seems to be that after disinvestments of an establishment or enterprise by the Government through Privatisation Commission or any other agency, Government shall not reacquire or take over the ownership, management and control of‑ such establishment.

(j) Banking Companies Ordinance (LVII of 1962)‑‑‑--

‑‑‑‑Ss.41‑A & 41‑B‑‑‑Protection of Economic Reforms Act (X11 of 1992), Ss.3 & 7‑‑‑Substitution of Board of Directors of a Banking Company by the State Bank of Pakistan would not in any sense of the term, amount to compulsory acquisition or take over of the privatized company by the Government‑‑­Notwithstanding the overriding effect of the provisions of Protection of Economic Reforms Act, 1992 as spelt out from S.3 thereof, powers of State Bank of Pakistan under the Banking Companies Ordinance, 1962 could neuner be abridged nor curtailed or taken away by intendment‑‑­Provisions of Protection of Economic Reforms Act, 1992 by themselves were not in conflict with the provisions of Ss.41‑A & 41‑B of the Banking Companies Ordinance, 1962 and the rule of harmonious interpretation of statutes, required that both the statutes would operate in their respective fields without any overlapping.

(k) Judgment‑‑‑--

‑‑‑‑Mere wrong citation of a provision of law in the order, would not per se vitiate the judgment.

(l) Companies Ordinance (XLVII of 1984)‑‑‑

‑‑‑‑S.305‑‑‑Order of winding‑up of company by High Court or a petition under S.305, Companies Ordinance, 1984‑‑‑Mere reference to a wrong provision viz. S.50, Banking Companies Ordinance, 1962 in the lawful winding‑up order by the High Court would pale into insignificance.

Lahore Improvement Trust v. Custodian, Evacuee Property West Pakistan PLD 1971 SC 811 and Baigan v. Abdul Hakeem 1982 SCMR 673 ref.

(m) Companies Ordinance (XLVII of 1984)‑‑‑--

‑‑‑‑S. 305‑‑‑Constitution of Pakistan (1973), Art.185(2)‑‑­Appeal to Supreme Court‑‑‑Winding‑up of company‑‑­Company had completely lost its substratum and was neither viable nor commercially solvent to discharge its huge liabilities‑‑‑Nothing was available on record except a bald statement of the counsel in appeal on behalf of an unauthorized person to suggest that winding‑up order suffered from any illegality or factual and legal infirmity‑‑­High Court, in circumstances, was perfectly justified in arriving at the conclusion that it was just and equitable to order the winding‑up of the company.

Municipal Corporation of Pakistan v. Sindh Tech. Industries Ltd. 1999 MLD 2609; Sindh Glass Industries Ltd. v. National Development Finance Corporation PLD 1996 SC 601; Platinum Insurance Company Ltd. v. Daewoo Corporation PLD 1999 SC 1 and Hala Spinning Mills Ltd. v. International Finance Corporation 2002 SCMR 450 ref.

Per Javed Iqbal, J. Contra [Minority view], (paras.1‑32)

Industrial Development Bank of Pakistan v. Sarela Cement Limited Company 1993 CLC 1540; AIR 1953 Lah.633; Platinum Insurance Company Limited v. Daewoo Corporation PLD 1999 SC 1; PLD 1991 SC 1; 1989 CLC 1167; PLD 1998 Kar.71; 1998 CLC 543; AIR 1963 AP 243; AIR 1941 Pat. 603; PLD 1973 Lah. 60; PLD 1993 Kar.322; AIR 1920 Cal. 722; PLD 1990 Kar. 191; 1991 MLD 124 and 1990 CLC 1030 ref.

Rizwan Ahmed Siddiqui, Advocate Supreme Court for Appellant.

G.H. Malik, Advocate Supreme Court and Imtiaz Muhammad Khan, Advocate‑on‑Record for Respondent No. 1.

Nemo for Respondent No.2.

Date of hearing: 25th April, 2002.

2002 C L D 1819

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui, Hamid Ali Mirza

and Sardar Muhammad Raza, JJ

TIVI B. V. (A DUTCH CORPORATION) THE NETHERLAND ‑‑‑Appellant

Versus

DEPUTY REGISTRAR OF TRADE MARKS‑‑‑Respondent

Civil Appeal No. 1238 of 1995, decided on 21st May, 2002.

(On appeal from the judgment dated 5‑9‑1994 of High Court of Sindh, Karachi passed in M. A. No.31 of 1993)

(a) Trade Marks Act (V of 1940)‑‑‑--

‑‑‑‑S.6(1)(d)‑‑‑Constitution of Pakistan (1973), Art.185(3)‑‑­Leave to appeal was granted by the Supreme Court to consider the scope of S.6(1)(d) of the Trade Marks Act, 1940.

(b) Trade Marks Act (V of 1940)‑‑‑--

‑‑‑‑Ss.6(1)(d) & 2(l)‑‑‑Distinctive character of trade mark had to be established without any doubt ‑‑‑Function of a trade mark primarily was to supply information to the purchaser about the trade mark from where the goods came‑‑­Expression "trade mark" having been defined in S.2(1) of the Trade Marks Act, 1940, trade mark must fulfil the conditions mentioned in the definition of a trade mark.

(c) Trade Marks Act (V of 1940)‑‑‑

‑‑‑‑S.6(d)‑‑‑Interpretation of S.6(1)(d) of the Trade Marks Act, 1940‑‑‑Foreign words are to be considered on the same footing as an ordinary descriptive word‑‑‑Principles.

Perusal of clause (d) of section 6(1) of the Trade Marks Act, 1940 shows that it is in two parts. The first one deals with." one or more words" having no direct reference to the character and quality of the goods and second is about geographical name or surname or the name of a sect, caste or tribe in Pakistan. When a word has reference to the character or quality of the goods, such as, perfect superfine, best, splendid etc. it would mean as directly referring the character or quality of the goods, as such, would not qualify for registration. Conversely, the words, which do not describe the character or quality goods, would be registrable. Section 6 of the Act does not refer to any language. It being so, the foreign words are to be considered on the same footing as an ordinary descriptive word.

(d) Trade Marks Act (V of 1940)‑‑‑--

‑‑‑‑S‑6(1)(d)‑‑‑Distinctive character of trade mark‑‑‑Trade Mark by the surname not commonly understood in Pakistan but had only one significance of referring to surname which was known outside Pakistan was permissible to be registered for the restriction in S.6(1)(d), Trade Marks Act, 1940 was in respect of surname in Pakistan and not that outside of Pakistan‑‑‑View that the earth has become a global village and that the registration of such trade mark would have been in total disregard of international norms in respect of geographical names as well as surnames was against the provisions of S.6(1)(d) of the Trade Marks Act, 1940‑‑‑Principles.

The restriction in section 6(1)(d), Trade Marks Act, 1940 is in respect of surname in Pakistan and not that outside of Pakistan. The expression "BORIS BECKER" is not commonly understood in Pakistan and it simply refers to surname relating to outside Pakistan. It has only one signification of referring to surname, which is known outside of Pakistan.

Under the law relating to trade mark, a trade mark cannot be registered if it is devoid of any distinctive character or it is of the nature to deceive the public or cause confusion. Trade mark in question in the present case is not hit by section 6(1), clause (d) and its registration is sought in respect of games and playing things, which included many items. Surnames are commonly used as trade marks Always there is no difficulty when the surname is very rare as it helps in determining the distinctiveness.

In all cases of doubt it is advisable for the Registrar to err on the side of allowing registration as the proprietor does not get any exclusive right in respect of non ­distinctive matter contained in the trade mark by registration of the trade mark. Therefore, there is no much of a benefit for the registration of the trade mark.

Since in terms of section 6(1), clause (d) prohibition is confined to geographical name or surname, or the name of a sect, caste or tribe in Pakistan, no valid objection could be raised to its registration. The view that the earth has become a global village and that the registration would have been in total disregard of international norms in respect of geographical names as well as surnames are against the provisions of law, as laid down in section 6(1), clause (d). Such registrations, are permissible.

Supreme Court set aside the judgment of High Court and also the order of Deputy Registrar, Trade Marks with a direction to the latter to accept the application for registration of trade mark and dispose of the same according to law.

Hoechest Aktiengesellschaft v. The Assistant Registrar of Trade Marks, Trade Marks Registry, Karachi Civil Appeals Nos.K‑37 and K‑38 of 1979 fol.

Law of Trade Mark in India by Ashwani K.R. Bansal, Edn. 2001, p.84 ref.

Shahzad Shoukat, Advocate Supreme Court for Appellant.

Sardar Muhammad Aslam, Deputy Advocate‑General (on Court's Notice) for Respondent.

Date of hearing: 21st May, 2002.