CLD 2009 Judgments

2009 C L D 638

[Competition Commission of Pakistan]

Before Khalid A. Mirza, Chairman and Ms. Rahat Kaunain Hassan, Member (Legal)

INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN: In the matter of

Appeal No.11 of 2008, decided on 18th December, 2008.

Competition Ordinance (LII of 2007)---

----S. 4---Competition Commission Appeal Rules, 2007, R.20---Interim relief, grant of---Institution of Chartered Accountants of Pakistan (I.C.A.P.) had filed application for interim relief in appeal filed against order passed by Single Member in a matter of fixing minimum hourly charge out rates and minimum fee for audit engagements by Chartered Accountants---Under Rule 20(3) of Competition Commission Appeal Rules, 2007, Appellate Bench was required to exercise its power to grant interim relief after taking into account all the relevant circumstances, including three crucial factors viz; the urgency of the matter; the effect on the party praying for relief, if relief was not granted; and the effect on competition if relief was granted---Applicant had not fully made a case for grant of an interim relief as provided under said Rules, but in given facts and circumstances of the case, it was observed; that urgency in the matter could be appreciated as the applicant would be liable to a penalty of Rs.300,000 (three lac) per day if it would not comply with the direction of impugned order on or before specified date; that since applicant was a professional body and not a commercial undertaking, out-come of proceedings was likely to impact a large number of professionals across the country, it was, in circumstances, in public interest that matter be finally settled by the Commission and allowing any penalty to incur prior to the final decision in the appeal, would not appear to serve the interest of justice in the particular facts of the case; that grant of stay would not have any impact on competition as the time was not material and appointments (if any) that could be made in such period, were not substantial; and that suspending the impugned order till the final disposal of the appeal, was not likely to unduly affect competition in the relevant market at that stage---Impugned order, in circumstances, was suspended pending final decision of the Bench in the appeal.?

Syed Shabbar Zadi, Member Council ICAP Present.

F H Saifee, Secretary to ICAP Present.

Faisal Kamal Alam, Legal Advisor of ICAP Present.

Ali Almani, Advocate from Fazle Ghani Khan & Co. Present.

2009 C L D 1

[Federal Shariat Court]

Present: Haziqul Khairi, C.J, Allama Dr. Fida Muhammad Khan, Salahuddin

Mirza, Muhammad Zafar Yasin and Syed Afzal Haider, JJ

FEDERAL GOVERNMENT---Plaintiff

Versus

PROVINCIAL GOVERNMENTS---Defendant

Shariat Suo Motu No.73 of 1987 (Suo Motu Examination of Companies Ordinance, 1984); decided on 24th October, 2008.

(a) Company---

----Company, its development, with particular reference to India and Pakistan.

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

----Preamble---Constitution of Pakistan (1973), Art.203-D---Suo motu action of Federal Shariat Court to examine whether or not specified sections of Companies Ordinance, 1984 were repugnant to the Injunctions of Islam---Comments of the Governments, Institutions and Agencies, Juris Consults, Ulema, Scholars and Public etc.

Al-Sharikat fi al Shariah al Islamiah by Dr. Abdul Aziz al Khayyat Vol. I, p.25, published by Muassasa-tu-Alrisala Beirut); Islamic Law of Business Organization Corporation by Imran Ahsan Niazi; Principles of Islamic Jurisprudence by J.A. Rahim; An Introduction to Islamic Law (Oxford 1964, p.125 by Josef Schacht; All Bin Abi Bakr al Haithami: Mujma al Zawaid; Beirut 1407 A.H. Vol. 4, p.110; Abu Awanah Ya'qoob Bin Ishaq Musnad Abi Awanab Dar-al-Ma'rifah Beirut 1998, Vol. 3, p.336; Al-Tashri 'ul Jenai al Islami, Mussasat al Risalah (1992), Vol. I, p.393; al Madkhal al Faqhi-al-Aam Vol. 3, pp.253, 258; Muhammad Bin Abi Al Abbas Al Ramali: Nihayatul Muhtaj Ila Sharh al Minhaj, Beirut, Vol. 5, p.385; Abu Bakar Muhammad Bin Abi Sehal Sarkhsi: Al-Mabsut Lil Sarkhsi, Beirut, 1406 A.H., Vol.12, kp.34; Ahmad Al-Dardir: al Shrhul Kabir, Vol. 4, p.77; Al-Sharikat Fiqhal Islami; Ali Al Khafif p.25; Masjid Shahid Ganj and others v. Shermani Gurdwara Parbandhak Committee Amritsar and others AIR 1940 PC 116; Tanqihul Hamidiya by Ibn Abideen Vol. 1, p.206 and Imran Ahsan Khan Niazee: Theories of Islamic Law, Islamic Research Institute and International Institute of Islamic Thought ND. P.47 ref.

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

----Preamble---Constitution of Pakistan (1973), Art.203-D---Suo motu action of Federal Shariat Court to examine whether or not specified sections of Companies Ordinance, 1984 were repugnant to the Injunctions of Islam---Concept of "limited liability"-Contention was that according to Holy Quran and Ahadith of the Holy Prophet (p. b. u. h.) to the effect that neither getting harmed nor harming others was allowed in Islam, the concept of "legal entity" and "limited liability" was against Islam as the liability was limited to the shares/assets of company and not to the assets of a person and by liquidation of the limited companies, the burden of the loss was borne by the public exchequer or the public directly when the loans against the Companies, remained unpaid---Quranic verse and Ahadith relied for the contention, held, had nothing to do with any kind of business transaction or worldly gain or loss and appeared to be of general nature not relating to business transactions only but extended to all spheres of life of a Muslim---Concept of "limited liability" was not repugnant to Quran and Sunnah and there was nothing in the Companies Ordinance, 1984 according to which a company, "its legal entity" and the "limited liability" of its shareholders were found repugnant to the Injunctions of Islam as laid down in the Holy Quran and Sunnah of the Holy Prophet (P.B.U.H.) as envisaged under Art.203-D of the Constitution---Opinions of scholars/Ulema in support of the view of the Court quoted.

Abu Awanah Ya'qoob bin Ishaq Musnad Abi Awanab Dar-al-Ma'rifah Beirut 1998, Vol. 3, p.336; Al-Tashri 'ul Jenai Al-Islami, Mussasat Al-Risalah (1992), Vol. I, p.393; Al Madkhal Al- Faqhi-al-Aam Vol. 3, pp.253, 258; Muhammad Bin Abi al Abbas al Ramali: Nihayatul Muhtaj ila Sharh al Minhaj, Beirut, Vol. 5, p.385; Abu Bakar Muhammad Bin Abi Sehal Sarkhsi: Al-Mabsut Lil Sarkhsi, Beirut, 1406 A.H., Vol.12, Kp.34; Ahmad Al-Dardir: al Shrhul Kabir, Vol. 4, p.77; Al-Sharikat Fiqhal Islami; Ali al Khafif p.25; Masjid Shahid Ganj and others v. Shermani Gurdwara Parbandhak Committee Amritsar and others AIR 1940 PC 116; Tanqihul Hamidiya by Ibn Abideen Vol. 1, p.206 and Imran Ahsan Khan Niazee: Theories of Islamic Law, Islamic Research Institute; International Institute of Islamic Thought ND. P.47; Holy Quran with English translation, Taj Company Ltd. Karachi, N.D. Vol. 1, p.139-A; Abdullah Yusuf Ali, Holy Quran with English translation, published by Amana Corp. USA, Wash, p.339; Abul A'la Maududi; The Meaning of the Quran, Islamic Publications Ltd., Lahore-Pakistan Vol. II, p.174; Muhammad Asad Holy Quran with English translation, Dar al-Andalus, Gibraltar, p.816; Ma-ariful Quran Maktaba Darul-Uloom Karachi 14, Pakistan Vol.8, p.229; Sayyidah `A'ishah; Surah Yousuf Verse 20 of Holy Quran; Surah Al-e-lmran in verse 75; Kaghazi currency, Fazli Sons Karachi 1998, p.14 by Dr. Noor Ahmad Shahtaz; Microsoft (R) Encarta (R) 2008 1993-2007 Microsoft Corporation; Charter of United Nations and PLD 2008 FSC 1 ref.

(d) Islamic Jurisprudence---

----"Maal (valuable thing)---Contention that Bank notes and shares being paper could not be termed as 'Maal' (valuable thing) in the eyes of Shariah, hence was not permissible in Islam, had no force and was untenable---Principles.

Surah Yousuf Verse 20 of Holy Quran; Surah Al-e-Imran in verse 75; Kaghazi currency, Fazli Sons Karachi 1998, p.14 by Dr. Noor Ahmad Shahtaz; Microsoft (R) Encarta (R) 2008 1993-2007 Microsoft Corporation; Charter of United Nation and PLD 2008 FSC 1 ref.

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

----S. 223---Constitution of Pakistan (1973), Art.203-D--Prohibition on short selling---Repugnancy to Injunctions of Islam---"Short sale" and "Blank sale"---Meaning---Held, there was nothing in S.223, Companies Ordinance, 1984 to protect or safeguard either the interests of the shareholders or the company; in fact there was no mechanism provided in S.223 of the Companies Ordinance, 1984 for safeguarding the interests of shareholders from the underhand and unscrupulous dealings of Directors and others named therein and Kingmakers of Stock Exchange; similarly there was no provisions against those found guilty of violation thereof; what however, imperceivable was that no penal provision had been prescribed against the individual violator or collectively against Director(s), Chief Executive, Managing Agent, Chief Accountant, Secretary or Auditor of a listed company or any one else---Framers of law and the Government agencies rather overlooked the implications of unrestricted Blank/short sale of shares unmindful of grave consequences emanating therefrom---Was therefore, essential that the interest of ordinary shareholders and collective interest of all of them may be protected from the clutches of vested interests of monopoly stock holders and gang mafia operating in stock markets so as to inspire confidence and good corporate governance in the business world---Such object was attainable only when the Federal Government would take necessary steps to eliminate said menace and fraudulent malpractices so frequently taking place in Stock Market---Federal Shariat Court declared that unrestricted "Short selling" under S.223, Companies Ordinance, 1984, or uncontrolled Blank sale, as in practice, were repugnant to Injunctions of Islam.---Accordingly, in exercise of court's powers under Art.203-D of the Constitution the Federal Government through the President of Pakistan was required to make suitable amendment therein within six months hereof which may not be repugnant to Quran and Sunnah of the Holy Prophet (P.B.U.H.) providing penal provisions in respect of Short sale and Blank sale ensuring adequate safeguards to ordinary shareholder of a company and public at large.

Black's Law Dictionary 8th Edn.p. 1366 and Black's Law Dictionary English Edn., p.155 ref.

Mr. Riaz-ul-Hassan Gillani, Deputy Attorney-General, Anwar Ahmed Qadri, Standing Counsel for Federal Government, Abdul Latif, Joint Secretary, Ministry of Finance and Economic Affairs, Iftikhar Hussain Ch. Advocate for Federation of Pakistan, Dr. Abdul Malik Irfani, Advocate for Federal Government and Sardar Abdul Majeed Khan, Standing Counsel for Federal Government.

Farooq Bedar, A.A.-G., Punjab, Mir Rehman Khalil, A.A.-G, N.-W.F.P., Muhammad Yaqoob Khan Yosufzai, A.G., Baluchistan, Syed Sarfraz Ahmed, A.A.G., Sindh, Syed Muhammal Jalal-ud-Din Khuld, A.A.G., Punjab, Syed Sajjad Hussain Shah, A.A.-G., Punjab with Muhammad Aslam Uns, Advocate, Sohail Akhtar, Law Officer, N.-W.F.P., Ruh-ul-Amin, Advocate for A.-G., N.-W.F.P., Shafqat Munir Malik, Addl. A.G., Punjab, Pir Liaqat Ali Shah, A.G., N.-W.F.P., Muhammad Shoaib Abbasi, Advocate for A.G., Baluchistan and Sindh, Mehmood Raza, Addl. A.G., Baluchistan, Qari Abdul Rasheed, Advocate for A.G., N.-W.F.P., Arshad H. Lodhi, A.A.-G, Sindh, Muhammad Saeed, Addl. A.G., N.-W.F.P., Amanat Pervez Bhatti, Deputy Superintendent Home Department, Government of Punjab, Qasim Meer Jat, A.A.-G., Sindh, Muhammad Sharif Janjua, Advocate for A.G., N.-W.F.P., Rashid A. Rizvi, President, Sindh H.C. Bar Association for Provincial Government.

Mansoor Ahmed Khan, Advocate for I.C.P. and Bankers Equity Limited, Fakhurddin G. Ebrahim, Senior Advocate for Banking Council, Syed Zaheer Ahmed, Registrar, Corporate Law Authority, Malik Muhammad Iqbal, Deputy Chief (Legal) Corporate Law Authority, Waqas Qadeer, Director, SECP, Hafiz S. A. Rehman, Advocate for SECP, Arif Tasleem, Assistant Chief Manager, SBP., Salman Akram Raja, Advocate for SECP, Hafeez-ur-Rehman, Advocate for SECP, Yousaf Raza, Assistant Director, SECP, Malik Ghulam Sabir, Advocate for SECP, Raja Naeem Akber, Assistant Director, SECP, Ch. Tajmal Murad, Advocate for SBP, Saleem Akhtar, Legal Adviser, SBP, Munir Ahmed, Junior Joint Director, SBP, Karachi Counsel/ Representatives for Financial Institutions.

Khalid M. Ishaque, Advocate, Maulana Riaz-ul-Hassan Noori, Maulana Muhammad Taseen, Dr. Muhammad Aslam Khaki, Dr. Bashir Ahmed Siddique, Abdul Waheed Siddique, Advocate, Muhammad Sharif, Iqbal-ur-Raheem, Amicus Curiae and Dr. Riaz-ul-Hassan Gillani, Advocate Juris-consults.

Dates of Hearing: 28th June, 1987, 6th January, 1990, 9th April, 1994, 3rd December, 1995, 3rd, 30th May, 2007, 18th September, 2007, 23rd January, 2008, 11th, 26th March, 2008, 2nd, 29th and 30th April, 2008.

2009 C L D 163

[Islamabad]

Before Muhammad Munir Peracha, J

NAJMA SUGAR MILLS LTD. Through Company Secretary ---Petitioner

Versus

Messrs MEGA TRADING COMPANY through Chief Executive ---Respondents

C.R. of 2008, heard on 15th September, 2008.

Partnership Act (IX of 1932)---

----S.69(2)---Civil Procedure Code (V of 1908), O.VII, R.11 & O.XXXVII, Rr.1 & 2---Rejection of plaint---Unregistered partnership concern---Legal status---Plaintiff was an unregistered partnership firm and had filed suit for recovery of money on the basis of dishonoured cheques---In view of bar contained in S.69(2) of Partnership Act, 1932, defendant filed application for rejection of plaint, which application was dismissed by trial Court---Validity---If a suit falling within S.69(2) of Partnership Act, 1932, was instituted by a firm which was not registered at the time of institution of the suit, the plaint must be rejected and subsequent registration of the firm could not validate proceedings which were invalid in their inception---Suit filed by plaintiff was incompetent and was liable to be rejected under O.VII, R.11, C.P.C.--High Court, in exercise of revisional jurisdiction, set aside the order passed by trial Court and rejected the plaint---Revision was allowed in circumstances.

Usman v. Haji Omer and Haji Razzak, PLD 1966 SC 328; Abdul Gafur V. Dr. Daimulla Ahmed PLD 1951 Dac. 56; The Australasia Bank Ltd. v. Messrs A. Ismailji & Sons and others PLD 1952 Lah. 314; M. Muthukumaraswani v. Kumar Textiles AIR 1996 Mad. 433; Lokramdas Chatomal Firm and others v. Tharumal Shewaram and others AIR 1939 Sind 206; Sunderial and Sons v. Yegendra Nath Singh an another, AIR 1976 Cal. 471 and Krishen Lalram Lal v. Abdul Ghafur Khan AIR 1935 Lah. 893 rel.

Raja Muhammad Akram for Petitioner.

Respondent proceeded ex parte.

Date of hearing: 15th September, 2008.

2009 C L D 490

[Islamabad]

Before Muhammad Munir Peracha, J

NORTHERN TOURISM DEVELOPMENT (PVT.) LTD.---Appellant

Versus

EXECUTIVE DIRECTOR (COMPANY LAW) SECURITY AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD and 4 others--- Respondents

Commercial Appeal No. 1 of 2006, decided on 13th November, 2008.

Securities and Exchange Commission of Pakistan Act (XLII of 1997)---

----Ss. 33 & 34---Companies Ordinance (XLVII of 1984), Ss.263, 265, 484(1), Proviso [as added by Companies (Amendment) Ordinance (C of 2002)] & 485---Appeal to High Court against order of Appellate Bench of Commission affirming order of Executive Director (Company Law) appointing an Inspector under 5.263 of Companies Ordinance, 1984 to investigate affairs of appellant company and report to Commission---Maintainability---Original order of Commission or its delegatee i.e. Executive Director (Company Law) could further be challenged before High Court either through revision under S.484 of Companies Ordinance, 1984 or appeal under S.485 thereof---Provisions of Ss.33 and 34 of Securities and Exchange Commission of Pakistan Act, 1997 would apply to an order passed under any provision thereof other than Companies Ordinance, 1984---Order appointing an Inspector to investigate affairs of company and report to Commission for not being a substantial order could not take away right of any party---High Court dismissed appeal for being not competent.

2002 CLD 1714; 2006 CLD 988; 2005 MLD 1255; 2005 CLD 1229 and PLD 2003 SC 124 distinguished.

Najm-ul-Hassan Kazmi and Amjad Hameed Ghauri for Appellants.

Ch. Naseer Ahmad and Ahmad Arslan, Joint Director Law, SECP for Respondents Nos.1, 4 and 5-A to 5-B.

Farrukh Mehmood Chanda for Respondents Nos.2 and 3.

Date of hearing: 13th November, 2008.

2009 C L D 581

[Islamabad]

Before Syed Qalb-i-Hassan, J

JAVED KHAN and 2 others---Petitioners

Versus

STATE BANK OF PAKISTAN through Governor, State Bank and 6 others---Respondents

Writ Petition No.2114 of 2005, decided on 28th November, 2008.

(a) Foreign Exchange Regulation Act (VII of 1947)---

----S.3-AA--Rules and Regulation for Exchange Companies of "B" Category, Cls. 36 & 37---Constitution of Pakistan (1973), Art.199---Constitutional petition---Licence of Exchange Company of "B" category---Establishment of such company by a group of five persons as Directors (thereof---Cancellation of the licence by State Bank on application of three Directors of company including its Chairman (respondents) having 60% shares holding---Plea of petitioners-Directors was that before cancelling their licence, State Bank had not provided them an opportunity of hearing nor had informed them about process of cancellation---Validity---State Bank had intimated respondent-Chairman that their application would be considered after receipt of written consent from all Directors of company, but such intimation had not been conveyed to petitioners---One petitioner was Secretary of the company---State Bank was bound to initiate any proceedings against company through its Secretary---State Bank had made all correspondence and received information from Chairman, who had initiated the process of cancellation of licence---State Bank had not issued notice to company to explain its position in writing---Petitioners had been condemned unheard---High Court directed State Bank to pass fresh order in accordance with law within specified time.

(b) Administration of justice---

----If by an enactment, something is required to be done in a particular manner, then same has to be done in that way and in no other way.

Ch. Imtiaz Ahmad for Petitioners.

Raja Muhammad Rizwan Ibrahim Satti for Respondents.

Date of hearing: 20th November, 2008.

2009 C L D 624

[Islamabad]

Before Syed Qalb-i-Hassan, J

ARSHAD ALI KHAN---Petitioner

Versus

S. M. ISMAIL---Respondent

Civil Revision No.496 of 2006, decided on 17th April, 2008.

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

----O.XXXVII, Rr.2 & 3---Suit for recovery of amount on basis of negotiable instrument---Grant of conditional or un-conditional leave to appear and defend suit---Essential factors.

The governing factors to consider the question of grant of conditional or unconditional and terms of conditions imposed by the Court while granting leave to defend always depends on the grounds taken and material placed before the Court in support of the application for grant of permission to appear and defend the suit. In absence of plausible defence, the Court may not even grant conditional leave and may pass the decree in the suit in exercise of powers under Rule 2(2) read with Rule 3 of Order, XXXVII C.P.C. If the Court in the light of pleadings of the parties, forms an opinion that the defendant has a good or plausible answer to the claim of plaintiff, it may grant unconditional leave.

Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163 rel.

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

----O.XXXVII, Rr.2 & 3---Suit for recovery of amount on basis of dishonoured cheque-Plaintiff s plea was that agreement between parties for establishment of Fuel Station on a plot of PAF could not mature due to refusal of PAF to lease out site to defendant; that out of invested amount promised to be paid to plaintiff, defendant had issued him cheque, which was dishonoured---Defendant's plea raised in leave application was that suit filed at place 1" had no jurisdiction, where neither cause of action had accrued nor was cheque issued nor was Bank situated; that defendant's suit against plaintiff was pending at place "K", where cheque was issued and Bank was situated; and that plaintiff with help of named PAF Officers had got cheque from defendant under coercion--- Trial Court granted leave to defendant to defend suit subject to furnishing of Bank guarantee equal to suit amount---Validity---Defendant had raised a plausible defence or shown a triable substantial question of law and fact---Trial Court was not justified in passing impugned order---High Court modified condition of impugned order by requiring defendant to furnish any solvent security to satisfaction of trial Court.

Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163 and Abdul Rauf Ghauri v. Mrs. Kishwar Sultana and 4 others 1995 SCMR 925 fol.

Barrister Qasim Ali Chowhan for Petitioner.

Mujeeb-ur-Rehman Kiani for Respondent.

Date of hearing: 17th April, 2008.

2009 C L D 1483

[Islamabad]

Before Muhammad Munir Peracha, J

MUSLIM COMMERCIAL BANK LTD. through Attorney---Petitioner

Versus

DEWAN SALMAN FIBRE LIMITED and others---Respondents

Company Petition No.4 of 2009, decided on 24th June, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.305, 306 & 325---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss.4 & 9---Companies Court Rule, 1997, R.7---Civil Procedure Code (V of 1908), O.VII, R.11---Winding up petition, rejection of---Overriding effect of Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Bank filed winding up petition before Companies Judge on the ground of default in payment of finances---Respondent-company sought rejection of petition on the ground that relation between bank and company was that of customer and financial institution, therefore, only remedy available with bank was to file recovery suit before Banking Court---Validity--Before invoking S.4 of Financial Institutions (Recovery of Finances) Ordinance, 2001, respondent, in company jurisdiction, had to establish that there was a provision in Companies Ordinance, 1984, which was inconsistent with the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, it was only then that provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 would override inconsistent provisions of Companies Ordinance, 1984---Exclusiveness of jurisdiction of Banking Court was confined to only those matters which were in the jurisdiction of Banking Court---If a company was solvent and was able to pay debts, then winding up order could not be passed against it, even if the company had neglected to pay debts to a particular creditor---Winding up order could only be passed if it was established before the court that company was unable to pay its debts---If a creditor, whether it was a financial institution or not, was to file suit for recovery of its debts, it could invoke jurisdiction of Banking Court or ordinary civil court as the case might be---However if creditor could establish before Company Judge that company was unable to pay its debts, such creditor could invoke jurisdiction of Company Judge under S.305 of Companies Ordinance, 1984, for winding ,up of the company, thus Financial Institutions (Recovery of Finances) Ordinance, 2001 and Companies Ordinance, 1984, covered two different situations---Application was dismissed, in circumstances.

Majeed A Tahir v. United Bank Limited 2008 CLD 1162; Abdur Rehman Allana v. Citibank 2003 CLD 1843; Maj. (Retd.) Javed Inayat Khan Kiyyani v. the State PLD 2006 Lah. 752; Messrs Sindh Glass Industries Ltd. v. Messrs National Development Finance Corporation PLD 1996 SC 601 and Messrs Pakland Cement Limited 2002 CLD 1392 ref.

Messrs S. Ghulam Dastagir and Sons v. Union Insurance Company of Pakistan Limited PLD 1995 Lah. 290 distinguished.

Jam Asif Mehmood, Tauqeer Ahmad Shah, Azid Nafees, Shahbaz Yar Khan and Raja Naeem Akbar from SECP for petitioner.

Date of hearing 16th June, 2009.

2009 C L D 1492

[Islamabad]

Before Muhammad Munir Peracha, J

MUSLIM COMMERCIAL BANK LTD. through Attorney---Petitioner

Versus

DEWAN SALMAN FIBRE LIMITED and others---Respondents

Company Original No.4 and C.Ms Nos. 92, 93 and 94 of 2009, decided on 15th April, 2009.

Company Ordinance (XLVII of 1984)---

----Ss.305(e), 306(1) & 325---Companies Court Rules, 1997, R.76---Winding up of company---Petition for---Notice was ordered to be issued to the company and was restrained from alienating the substantial asset of the company till the next date of hearing---Company, however, would be at liberty to sell goods in the ordinary course of business.

Jam Asif Mehmood for Petitioner.

2009 C L D 42

[Karachi]

Before Khalid Ali Z. Qazi, J

MUHAMMAD HUSSAIN KHAN---Plaintiff

Versus

N.I.B. BANK LIMITED and another---Defendants

Suit No. Nil and C.M.A. No.6621 of 2008, decided on 31st October, 2008.

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

----O. XXXIX, Rr. 1 & 2---Interim injunction, grant of--Requirements---Burden of proof---Phrase "Irreparable injury"---Connotation---Such party is entitled to relief under O.XXXIX, Rr.1 and 2, C.P.C., which satisfies the court that it has a prima facie case; that balance of convenience is in his favour and irreparable loss and injury can be caused to him if interim injunction is not granted--All three phrases are not rhetoric phrases but elastic words to meet a wide range of situation in given set of facts and circumstances---Burden is always on plaintiff/applicant to satisfy the court that prima facie, case exists in his favour---Court must further satisfy that non-interference by Court would result into irreparable injury to a party seeking relief---Irreparable injury means that injury must be material one, which court cannot adequately compensate by way of damages---Court is expected to exercise sound judicial discretion to find out amount of substantial mischief or injury, which is likely to be caused to other party if injunction is granted.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15---Negotiable Instruments Act (XXVI of 1881), S.118---Specific Relief Act (I of 1877), S.42---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Sale of mortgaged property---Interim injunction, grant of---Plaintiff claimed to have entered into sale agreement with regard to property in question and had paid earnest money to owner whereas mortgage of the suit property in favour of bank was later in time---Validity---Presumption as required under S.118 of Negotiable Instruments Act, 1881, could be raised that bank had granted finance facility to defendant against creation of mortgage---All contentions of plaintiff required deeper appreciation of evidence, which could be properly thrashed out at the time of trial---Plaintiff had no prima facie, case and balance of convenience was also not in his favour, as such great inconvenience would be caused to defendant-Bank in exercising its legal right to recover its finances and to deal as per law---No irreparable loss would be caused to plaintiff if injunction was refused because loss, if any, could be compensated in shape of damages which had already been claimed by plaintiff in prayer clause of suit---High Court declined to grant interim injunction to plaintiff against sale of mortgage property--Application was dismissed in circumstances.

Nasimuddin Siddiqui and another v. United Bank Limited and another 1998 CLC 1718 and Avari Hotels Limited and others v. Investment Corporation of Pakistan and 6 others 2000 YLR 2407 ref.

Abdul Qayyum Abbasi for Plaintiff.

Arshad Tayebally for Defendant No.1.

2009 C L D 49

[Karachi]

Before Mrs. Qaiser Iqbal and Arshad Siraj, JJ

M. NUJEEBULLAH QURESHI---Appellant

Versus

Messrs CITI BANK N.A.---Respondent

1st Appeal No.13 of 2006, decided on 8th October, 2007.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Civil Procedure Code (V of 1908), S.9 & O.VII, R.10---Suit for declaration, permanent injunction, damages for breach of contract and commission of tort by Bank and removal of plaintiffs name from Data Check List---Issuance of clearance certificate by Bank after deposit of outstanding amount against Credit Card issued to plaintiff--Plaintiff s claim for damages against Bank for placing his name on Data Check List---Return of plaint of such suit by Banking Court for lack of jurisdiction---Validity---Jurisdiction of Banking Court would attract in case of commission of default by customer or financial institution in fulfilling any obligation regarding a finance---Defendant-Bank had not included plaintiffs name in Data Check List, which had been prepared by State Bank of Pakistan---Credit Card would. fall within term of finance'---Plaintiff s claim was based on tortuous liability arising out of act and omission of State Bank of Pakistan by placing his name on Data Check List---Banking Court had no jurisdiction over a tort case based upon damages---High Court while dismissing appeal - maintained impugned order in circumstances.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.2(d)---Term finance"---Scope---Credit Card would fall within term "finance".

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Civil Procedure Code (V of 1908), S.9---Suit for damages based upon tort---Jurisdiction of Banking Court---Scope---Banking Court had no jurisdiction to try such suit.

Abdul Rehman Allana v. The Citi Bank 2003 CLD Karachi 1843 and Nasimuddin Siddiqui and another v. United Bank Limited and others 1998 CLC 1718 rel.

Khaleeq Ahmed for Appellant.

M.A. Khan for Respondent.

2009 C L D 82

[Karachi]

Before Khalid Ali Z. Qazi, J

USMAN TEXTILE MILLS LTD. and another: In the matter of

Judicial Miscellaneous Petition No.4 of 2008, decided 13th October, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss.284, 285, 286, 287 & 288--Amalgamation of companies---Liabilities of companies--Contention of petitioners was that liabilities of the company to be merged had already been taken over by the other company, therefore, no prejudice would be caused by amalgamation---Validity---Ail formalities had been completed and there was no impediment for allowing amalgamation of both the companies---High Court approved Scheme of arrangements for proposed merger---Petition was allowed accordingly.

2002 CLD 872; 2005 CLD 93 and 2007 CLD 900 ref.

Shafiq Ahmed for Petitioners.

2009 C L D 85

[Karachi]

Before Ali Sain Dino Metlo and Khawaja Naveed Ahmad, JJ

UNITY MODARABA MANAGEMENT (PVT.) LTD.---Appellant

Versus

REGISTRAR, MODARABA COMPANIES AND MODARABAS---Respondent

1st Appeal No.37 of 2008, decided 2nd September 2008.

Modaraba Companies and Modaraba (Floatation and Control) Ordinance, (XXXI of 1980) --

----Ss.23, 24 & 42---Companies Ordinance, (XLVII of 1984), S.305---Winding-up of Modaraba company---Provisions of Companies Ordinance,, 1984--Applicability---Scope--:Application for winding up of Modaraba company was filed by Registrar mainly on the ground that company could not control recurring losses which had accumulated to more than 99% of the subscribed amount---Tribunal accepted the application and wound up the Modaraba company---Plea raised by the company was that no time was allowed by Registrar to improve affairs of the company and provisions of Companies Ordinance, 1984, were not followed---Validity---Registrar, under Modaraba Companies and Modaraba (Floatation and Control) Ordinance,, 1980, had nothing to do with any permission for revival of the company or its merger with any other company---Provisions of Companies Ordinance, 1984, could be pressed into service only in respect of subjects which were not covered by Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980---In presence of distinct, comprehensive and self-sufficient provisions in Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, regarding winding up Modarabas, provisions of the adopted law i.e. Companies Ordinance, 1984, could not be resorted to---Directors of the company had not done anything to show their bona fides and they had wasted six long years---Registrar had waited too long to file winding up petition, which should not have been done---Division Bench of High Court declined to interfere with the order of winding up passed by Tribunal--Appeal was dismissed in circumstances.

Additional Registrar of Companies v. Messrs Norrie Textile Mills Ltd. 2004 CLD 1109 (Karachi) and Karim Cotton Mills Ltd. v. Executive Director (Enforcement and Monitoring) 2006 CLD 339 (SECP) disting.

Shafiq Ahmad for Appellant.

Naveed Ahmed for Respondent.

Date of hearing: 2nd September, 2008.

2009 C L D 93

[Karachi]

Before Khilji Arif Hussain and Bin Yamin, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN ---Appellant

Versus

Messrs FRENCH FOOD PRODUCTS (PVT.) LTD. and others---Respondents

High Court Appeal No.276 of 2007, decided 30th September 2008.

(a) Industrial Development Bank of Pakistan Ordinance, (XXXI of 1961)---

----S.39 (a)---Order of attachment---Scope---Order of attachment or sale of industrial concern or properties disclosed or undisclosed of persons liable for repayment loan including guarantors can be passed.

(b) Words and phrases---

----"Including"-Connotation--Whenever term "including" is used by legislature, it always means that legislature intended to enlarge meaning of word occurring in body of statute.

(c) Industrial Development Bank of Pakistan Ordinance, (XXXI of 1961)---

----Ss.39 (1) (a) [as substituted by Industrial Development Bank of Pakistan (Amendment] Ordinance, (IV of 1981)]---Civil Procedure Code (V of 1908), S. 64---Law Reforms Ordinance, (XII of 1972), S.3---Infra-Court Appeal--Attachment of property---Private alienation---Properties owned by guarantors---After grant of main petition, Single Judge of High Court, ordered to sell through auction, the properties owned by Directors as the properties were given as guarantee---During pendency of proceedings, one of the Directors had transferred house in question vide registered sale-deed to third person---Bank filed application under S.64 C.P.C. but Single Judge dismissed the application and declined to declare private alienation as void---Plea raised by bank was that the property was in custodia legis of High Court for the satisfaction of debt and the same could not be alienated---Validity---As property in question was disclosed by Directors of the company as assets owned by them, therefore, such attachment order was rightly passed by Single Judge, in exercise of powers under S.39 of Industrial Development Bank of Pakistan Ordinance, 1961---Before substitution of S.39 (a)(1) of Industrial Development Bank of Pakistan Ordinance, 1961, the Court could pass order for attachment or sale of such properties only which were pledged, hypothecated, mortgaged or assigned to the bank as security for loan, whereas after substitution, bank could ask for an order of sale in respect of property mortgaged hypothecated, whether disclosed or undisclosed, owned by the industrial concern or by person liable for payment of loan including guarantors---Object of S.64 C.P.C. was to prevent fraud on creditor/decree holder and to secure in fact the rights of attaching creditor against attached property by prohibiting private alienation pending attachment---Division Bench of High Court set aside the order passed by Single Judge and application under S.64 C.P.C. filed by bank was allowed---Intra-Court Appeal was allowed in circumstances.

Muhammad Sadiq v. Dr. Sabira Sultana 2003 CLC 1; Syed Ashad Ali Sadiq v. Pakistan International Airlines Corporation and another 1992 CLC 1323; Ghulam Abbas v. Zohra Bibi PLD 1972 SC 337; Dhan Singh and another v. Baboo Ram and others AIR 1981 All. 1 and Abdul Sattar and others v: Sh. Muhammad Zaki and 4 others 1999 YLR 865 ref.

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

----O.XXI, R.54(i)---Condition "by beat of drum or other customary mode"---Compliance---Requirement of "by beat of drum" is satisfied if order of attachment is published in newspaper as the object was to make known to general public about order of attachment passed by court and to put them on notice before dealing with the same.

Aziz-ur-Rehman for Appellants.

Nemo for Respondents.

Abdul Majeed for Respondent No.6.

Date of hearing: 30th September, 2008.

2009 C L D 102

[Karachi]

Before Khalid Ali Z. Qazi, J

TRADING CORPORATION OF PAKISTAN and another: In the matter of

Judicial Miscellaneous Petition No.23 of 2007, decided 10th October, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss.284, 285, 286, 287 & 288---Amalgamation of two companies---Meeting of shareholders and creditors; dispensing with---Government of Pakistan was main shareholder of one company and that company was the only shareholder of second company to be merged---Plea raised by petitioner was that no approval or even notice to shareholders was required to give effect to Scheme of Arrangement as Government of Pakistan, the main shareholder had itself decided amalgamation and merger of one petitioner company into other petitioner company---Validity---All formalities had been completed and no objection was received from any quarter--Approval of only one shareholder i.e. Government of Pakistan was required and government had already granted approval, therefore, there was no impediment against merger of both the companies---High Court approved Scheme of Arrangements for proposed merger of both the companies---Petition was allowed accordingly.

2002 CLD 1338; PLD 2001 Karachi 5; 78 Company Cases 430 and J.M. No.36 of 1999 ref.

A.H. Mirza for Petitioners.

2009 C L D 104

[Karachi]

Before Nadeem Azhar Siddiqi, J

MUHAMMAD LAEEQ and 34 others---Petitioners

Versus

SINDH ALKALIES LIMITED and another---Respondents

J. Miscellaneous No.37 of 2003, decided on 29th September, 2008.

Companies Ordinance (LXVII of 1984)---

----Ss.302 & 325---Companies (Court) Rules, 1997, R.126---Winding up of company--Auction of assets---Company was wound up by court and official assignee was directed to sell assets of the company by inviting sealed tenders and to invite claims from creditors---Respondent was the highest bidder and sought recovery of his bid money on the ground that he was not aware of dispute of company with regard to its title over land in question---Validity---Bidder was aware about title dispute and had agreed to purchase properties on "as is where is" basis against consideration offered by him---Bidder had also filed a statement in which he had stated that he was ready and willing to purchase property in question despite existence of dispute regarding validity of lease / title---High Court directed to forfeit the bid amount deposited by respondent---High Court also directed official assignee to re-advertise for sale of land in question for the remaining period of lease with plant and machinery along with condition that all taxes and dues would be payable by auction-purchaser-High Court further directed the Official Assignee to approach Provincial Government for renewal of expired lease--Application was allowed accordingly.

Ms. Noor Naz Agha for Petitioners.

Nemo for Respondent No.1.

Faisal Kamal Alam for Respondent No.2.

Syed Khizer Asker Zaidi, Assistant Advocate-General, Sindh, Ahmed Pirzada, Farhan Abrar, Ghulam Mohuddin Junaid Farooqui and Kadir Bukhsh Umrani, Official Assignee for Respondent 3.

2009 C L D 115

[Karachi]

Before Mrs. Qaiser Iqbal, J

AL-NOOR FERTILIZERS INDUSTRIES LTD. ---Plaintiff

Versus

NATIONAL BANK OF PAKISTAN and another---Defendants

Suit No.B-13 and C.M.A. No.7925 of 2005, decided on 19th September, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 7(4), 2(c)(d) & Preamble---Banking jurisdiction---Scope---Suit for declaration and permanent injunction---Provision of S.7(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 vests a specific jurisdiction pertaining to the existence of a "finance" and such exercise shall be conducted by a Banking Court having jurisdiction---Jurisdiction available to the party (customer) was Banking jurisdiction and the suit filed by the said party was not tenable under C.P.C.---Principles.

Section 7(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, vests a specific jurisdiction pertaining to the existence of a `finance' and such exercise shall be conducted by a Banking Court having jurisdiction. The Preamble of the Ordinance 2001 specifically provides for the procedure. Its bare reading would suggest that in case where default has been committed in fulfilment of any obligation with regard to any finance, the customer may institute a suit in the Banking Court by presenting a plaint which shall be verified on oath, in the case of a Financial Institution a plaint shall be verified by a duly authorized officer of the Financial Institution.

The definition of the customer as defined under section 2(c) means a person to whom finance has been extended by a Financial Institution and includes a person on whose behalf a guarantee or a Letter of Credit has been issued by a Financial Institution as well as surety or an indemnifier. The expression "Finance" is defined in clause (d) of section 2(d).

The jurisdiction available to the party was Banking jurisdiction and the suit filed by the party was not tenable in ordinary course of jurisdiction available under the Code of Civil Procedure.

Abdul Rehman Allana v. Citibank 2003 CLD Kar. 1443; Nasim Siddiqui and Others v. United Bank Limited and others 1998 CLC 1718 and Messrs Grain System (Pvt.) Limited Karachi v. Agricultural Development Bank Of Pakistan Islamabad 1993 MLD Lah. 1031 ref.

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

----O. VII, R.11 & S.11---Rejection of plaint---Res judicata, principle of---Applicability---Until such time the documents relating to earlier proceedings were brought on record in accordance with law and the matter was thoroughly examined with regard to controversy in the two proceedings, it was not possible for the court to reach at the conclusion that the suit involved the same controversy which was decided in the earlier proceedings.

Jewan and 7 others v. Federation of Pakistan through Secretary, Revenue, Islamabad and 2 others 1994 SCMR 826 ref.

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

----O. VII, R.11---Rejection of plaint---Cause of action---Elements and ingredients constituting cause of action.

Haji Mitha Khan v. Muhammad Younus and 2 others 1991 SCMR 2030 ref.

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

----O. II, R.2---Defect in frame of suit---Procedure---If any defect was found in the frame of the suit or deficiency in court-fee, an opportunity had to be allowed to remove the deficiency---Nature of exception to the right of a party as provided by O.II, R.2, C.P.C. had to be strictly construed---Principle.

Muhammad Azim v. Pakistan Employees Cooperative Housing Society Ltd. Karachi and 4 others PLD 1985 Kar. 481 and Abdul Hakim and 2 others v. Saadullah Khan and 2 others PLD 1970 SC 63 ref.

(e) Jurisdiction---

----Court's jurisdiction is based on the relief claimed and the court has power to pass all such orders as may be required to the satisfaction of the decree unless any such order by express or by necessary implication is prohibited.

(f) Financial Institutions (Recovery of Finances)'Ordinance (XLVI of 2001)---

----Ss. 9 & 19---Civil Procedure Code (V of 1908), O. VII, R.11---Suit for declaration and permanent injunction---Promissory estoppel principle of--Applicability---Rejection of plaint---Plaintiff in order to frustrate the execution of decree could not seek setting aside of the decree as the same would tantamount to review of the consent order---Principle of viability of the contract having been entered under duress cannot be reopened on the basis of undue coercion and duress---Proper remedy for plaintiff was to assail consent decree in appeal---Principle of promissory estoppel being applicable to the compromise, decree, the plaintiff had surrendered all rights and could no longer enforce them after filing of the compromise application in the earlier suit and allegations of the plaintiff amounted to waiver of its rights---Plea raised in the earlier suit in connection with wilfull default under National Accountability Ordinance, 1999 also could not be reopened---Plaintiffs suit, in circumstances, was barred by law and plaint was liable to be, rejected under O.VII, R.11, C.P.C.

Jamshed Malik for Plaintiff.

Behzad for Defendant No.1.

2009 C L D 124

[Karachi]

Before Faisal Arab, J

ADDITIONAL REGISTRAR OF COMPANIES, KARACHI---Petitioner

Versus

KARIM SILK MILLS LIMITED---Respondent

J. Miscellaneous No.37 of 2007, decided on 10th October, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss.305 & 309---Winding up petition---Security and Exchange Commission of Pakistan, right to file petition---Object and scope---Petition for winding up of company was filed on the grounds of its being non-functional since 1993, failure to maintain its accounts, non-submission of statutory returns and selling of plant and machinery way back in year, 1999---Validity---Security and Exchange Commission of Pakistan was empowered under S.309 of Companies Ordinance, 1984, to seek winding up of a company either by itself or through an authorized person or through Registrar of Companies---Such power could facilitate minority shareholders to realize their stuck up capital in company that was liable to be wound up under law---All facts against the company had gone unchallenged and it was a fit case where provisions of S.305(c) and (f)(iv) read with S.309 of Companies Ordinance, 1984, could be invoked for winding up of company---High Court wound up the company and appointed official assignee as official liquidator to initiate winding up proceedings---Petition was allowed accordingly.

Ijaz Ahmad for Petitioner.

Nemo for Respondent.

Date of hearing: 28th August, 2008.

2009 C L D 133

[Karachi]

Before Khilji Arif Hussain and Bin Yamin, JJ

Mst. ANWAR BEGUM through Attorney---Petitioner

Versus

ZARAI TARQIATI BANK OF PAKISTAN through Manager and 4 others---Respondents

C.P. No.D-1469 of 2007, decided on 10th October, 2008.

Constitution of Pakistan (1973)---

----Arts. 199 & 25---Constitutional petition---Equality of citizen---Reasonable classification---Petitioner had obtained loan from Bank and was regular in payment of the outstanding amount and had paid due instalments in time and had paid principal amount as well as interest due---Government had announced a package of relief for the persons who were defaulters in repayment of loan amount during particular period---Contentions of the petitioner, who had made the payment of instalments regularly and in time pertaining to the period as specified in the package of relief, were that she also fell within the purview of the package and was entitled to avail the benefits extended under the same; that Bank by refusing to extend the benefit of the package to her were treating her in a discriminatory way as her case, being of a regular payer, was on better footing and she was more entitled to the relief/package than those who committed default in payment of loan and that by refusing the . relief under the package to the petitioner, Bank had violated her right of equality of citizen provided under Art.25 of the Constitution---Validity---Held, all persons placed in similar circumstances must be treated alike and the reasonable classification must be based on reasonable grounds in a particular set of circumstances, but the same, in any case, must not offend the spirit of Art.25 of the Constitution---Person equally placed must be treated alike in matter of privileges and liabilities under the rule of equal protection of law---Refusal of benefit of relief package to the petitioner would amount to penalizing the customers, who were regular in payment of the instalments of the loans and putting the premium on the fault of the defaulter in payment of loan amount---Case of petitioner thus squarely fell within the purview of relief package announced by the Government---High Court, in circumstances, directed the Bank authorities to treat the case of petitioner within the purview of relief package and to extend her the relief provided under the said package within a reasonable time without unnecessary delay.

2001 CLC 385 and 2001 CLC 347 fol.

M. Ismail Memon for Petitioner.

Sanaullah Noor Ghori for Respondents Nos. 1 and 2.

2009 C L D 138

[Karachi]

Before Nadeem Azhar Siddiqi, J

HABIB BANK LTD. through Corporate Centre Branch---Plaintiff

Versus

GALADARI CEMENT (GULF) LTD. and 17 others---Defendants

Suit No.B-23 of 2005, decided on 9th September, 2008.

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

----Ss. 9 & 14---Civil Procedure Code (V of 1908), S.73 & O.XXXIV----Suit for recovery of loan by Bank---Application by intervener (another Bank) for joining as defendant in the proceedings of the suit---Intervener's contention was that defendant (borrower) had availed financial facilities from it and despite requests to repay its dues it had committed default; that defendant had executed a Letter of Continuity regarding mortgage pertaining to its immovable property wherein, inter alia, the mortgage already created in favour of the intervener was acknowledged as continuing security and that to secure the interest of intervener it was necessary to make it a party to the proceedings to protect its interest---Validity---High Court observed that though detailed hearing and arguments were required to appreciate the contentions of the counsel, however keeping in view the order of the High Court in another case wherein the parties having similar nature of claim had been joined as party to the proceedings no purpose would be served in hearing the controversy in detail, hence application was allowed.

Jamshed Malik for Plaintiff.

S. Zulquernain for Defendant No.1.

Saalim Salam Ansari for Defendants Nos.5 to 7.

Bahzad Haider for Defendants Nos. 13 to 17.

Khalil-ur-Rehman for Applicant/Intervener.

2009 C L D 144

[Karachi]

Before Mrs. Qaiser Iqbal and Syed Mahmood Alam Rizvi, JJ

ADAM LIMITED---Appellant

Versus

Messrs MITSUI & COMPANY---Respondent

H.C.A. No.152 of 1995, decided on 20th October, 2008.

Contract Act (IX of 1872)---

----Ss.23, 73, 187 & 237---Law Reforms Ordinance (XII of 1972), S.3---Intra-court appeal---Compensation and damages, recovery of---Transaction by agent---Indoor management, doctrine of---Plaintiff claimed compensation and damages on the ground that despite valid agreement between both the parties, defendant company failed to supply goods---Defendant company denied execution of any contract and contended that letters relied upon by plaintiff were signed by its employee not authorized to do so---Plea raised by plaintiff was that principle of indoor management was applicable---Validity---Doctrine of indoor management was not applicable to transaction entered into between a registered company and a third party in good faith on the basis of any statutory provisions in Companies Ordinance, 1984---Doctrine of indoor management was applicable to such transactions on the principle of public policy, equity and good conscience to protect innocent persons dealing in good faith with corporate entity---If agent had apparent authority to enter into a particular contract on behalf of principal, the contract was valid even though in fact he had no such authority---Written consent of principal was not essential before contract was entered into by agent on behalf of principal---No evidence was available on record to prove market rate of goods on the day of breach, therefore, no damages could be awarded to plaintiff---High Court declined to interfere in the judgment and decree passed by Single Judge---Intra-court appeal was dismissed in circumstances.

Pakistan Industrial Development Corporation v. Aziz Qureshi PLD 1965 (W.P) Kar. 202; 1968 SCMR 539; Pakistan Employees Cooperative Housing Society Ltd. Karachi v. Mst. Anwar Sultana and others PLD 1969 Kar. 474; MLD 1990 878; PLD 1964 Kar. 290; PLD 1981 Kar. 504; Panorama Developments (Guildford) Ltd. v. Fidelis Furnishing Fabrics Ltd. (1971) 3 All England Reporter; Sarshar Ali v. Roberts Cotton Association Ltd. and another PLD 1963 SC 244; Islamic Republic of Pakistan through Ministry of Finance v. Pioneer Trading Company Karachi 1982 CLC Kar. 495; Bismillah Begum v. Messrs Pak Construction Company Ltd. 1987 MLD 648 and Messrs Taj Oil Company Ltd. v. Bengal Oil Mills Ltd. 1990 MLD 877 ref.

Abdul Qadir Khan for Appellant.

Saif Malik for Respondent.

Date of hearing: 4th August, 2008.

2009 C L D 153

[Karachi]

Before Mrs. Qaiser Iqbal, J

FAR EASTERN IMPEX (PVT.) LTD.---Plaintiff

Versus

QUEST INTERNATIONAL NEDERLAND BV and 6 others---Defendants

Suit No.494, C.M.As. Nos.2805, 4494, 6021, 6440 and 7145 of 2008, decided on 4th September, 2008.

(a) Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Ordinance (LVIII of 2007)---

----S.4---Arbitration Act (X of 1940), S.34---Proceedings, stay of---Referring the matter for arbitration---Defendants sought stay of proceedings in suit filed by plaintiff and also sought referring the matter for arbitration in accordance with covenants contained in arbitration agreements entered with the parties---Validity---Discretion available to Court under S.34 of Arbitration Act, 1934 was not available under Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Ordinance, 2007, being mandatory in nature, the foreign elements could not be considered nor the discretion vested with the Court to stay or not to stay the proceedings in terms of arbitration agreement--Plaintiff's suit as against defendants was not maintainable in law and was dismissed---Plaintiff failed to bring out the case within the limitations provided under S.4(2) of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Ordinance, 2007, therefore, proceedings of the suit were stayed---High Court referred the dispute between parties to arbitral proceedings in terms of arbitration clause-Application was allowed accordingly.

Messrs Neincke Food Processing Equipment v. Messrs Danish Butter Cookies (Pvt.) 1992 CLC 1132; PLD 1985 Kar. 425; PLD 1973 SC 373; PLD 1984 Kar. 138; Muhammad Aref Effendi v. Egypt Air 1980 SCMR 588; Karachi Catholic Cooperative Housing Society Ltd. v. Mirza Jawad Baig PLD 1994 Kar. 194; Akbar Cotton Mills Ltd. v. Messrs Ves/Ojuanojo Objedinenije Tech/Amesh Export and another 1984 CLC 1605; Michael Golodetz and others v. Serajuddin and Co. AIR 1963 SC 1044 (V50 C 155) (From Calcutta); Messrs Uzin Export and Import Enterprises for Foreign Trade v. Messrs M. Iftikhar and Company Limited 1993 SCMR 866; Zubair Ahmed v. Pakistan State Oil Co. Ltd. and another PLD 1987 Kar. 112; Zubair Ahmed v. Pakistan State Oil Co. Ltd. PLD 1994 Kar. 194; Messrs Universal Trading Corpn. (Pvt.) Ltd. v. Messrs Beecham Group PLC and another 1994 CLC 726; Rachappa Guruadappa, Bijapur v. Gurusiddappa Nuraniappa and others 1990 MLD 1383; Supreme Court of India Balagamwala Oil Mills (Pvt.) Ltd. v. Shakarchi Trading A. G. and 2 others PLD 1990 Kar. 1; Mian Tajammul Hussain and 3 others v. State Life Insurance Corporation of Pakistan 1993 SCMR 1137; Aziz-ur-Rehman v. Presiding Officer, Local Council Elections and others 2005 CLC 1201 and Managing Director v. Abacus International (Pvt.) Ltd. through President and Chief Executive and 2 others 2006 CLD 497 ref.

(b) Contract Act (IX of 1872)---

----S.202---Interest of agent---Effect---Provisions of S.202 of Contract Act, 1872, can be split up into two parts: First part contemplates that interest of agent himself should exist in property that forms subject matter of agency; Second part, is that when such interest is created, it cannot be terminated to the prejudice of agent, unless it is expressly provided in the contract.

Bolan Beverages (Pvt.) Ltd. v. Pepsico. Inc. and 4 others PLD 2004 SC 860; Messrs Time N. Visions International (Pvt.) Ltd v. Dubai Islamic Bank Pakistan Limited PLD 2007 Kar. 278; Huma Enterprises and 3 others v. S. Pir Ali Shah and others 1985 CLC 1522; Worldwide Trading Company v. Sanyo Electric Trading Company Limited PLD 1986 Kar. 234; Palani Vannan and others v. Krishnaswami Konar and others AIR (33) 1946 Mad. 9; Sheoparsan Singh and others v. Ramnandan Prasad Narayan Singh and others AIR 1916 Privy Council (from Calcutta) and Messrs Business Computing International (Pvt.) Limited v. Ibm World Trade Corporation 1997 CLC 1903 ref.

Abdul Qayyum Abbasi for Plaintiff.

Khawaja Mansoor for Defendants Nos. 1 to 5. .

Nazar Akbar for Defendant No.6.

Iqra Saleem and S.M. Ghani for Defendant No.7.

2009 C L D 169

[Karachi]

Before Azizullah M. Memon and Abdul Rasheed Kalwar, JJ

Messrs MUMTAZ TRADERS and 3 others---Petitioners

Versus

Messrs HABIB BANK LIMITED and another ---Respondents

Constitutional Petition No.D-277 of 2006, decided on 12th October, 2008.

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

----Ss.9 & 10---Constitution of Pakistan (1973), Art.199---Constitutional petition---Suit for recovery of loan---Grant of leave to defend suit---Defendant, after service of process an application under S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, for grant of leave to defend, which was dismissed for non-prosecution---Defendant filed an application for setting aside the said order and to decide the application on merits---Plea raised was that the counsel for the defendant was busy before the Principal Seat of High Court at Karachi on the said date---Validity---Counsel for the defendant had filed his personal affidavit deposing therein that he had actually made appearance before the Principal Seat of High Court at Karachi---Petition was allowed, application under S.10 of the Ordinance, was restored for its disposal subject to payment of costs.

Sham Lal Ladhani for Petitioner.

Muhammad Haroon Memon for Respondent.

2009 C L D 171

[Karachi]

Before Anwar Zaheer Jamali, C.J and Zafar Ahmed Khan Sherwani, J

Messrs S. MALIK TRADERS and another---Appellants

Versus

SAUDI PAK LEASING COMPANY LTD.---Respondent

Ist Appeal No.12 of 2008, decided on 23rd September, 2008.

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

----S.22---Limitation Act (IX of 1908), Ss.5 & 29--Appeal---Condonation of delay, application for---In the present case, if the period of limitation was computed from the date of signing of decree and the period consumed in obtaining certified true copy of the judgment and the decree i.e. two days, was also excluded, still the appeal was time-barred by one day---Held, fact that S.5, Limitation Act, 1908 was not applicable in the appeal, having been preferred under a special statute, same was dismissed by High Court.

Saat M. Ishaque for Appellants.

Samia Alam Khan Durrani for Respondent.

2009 C L D 172

[Karachi]

Before Anwar Zaheer Jamali, C.J

Messrs AL-AZIZ ROUTE TRANSPORT COMPANY and 3 others---Applicants

Versus

Messrs ASKARI LEASING LIMITED and another---Respondents

Civil Transfer Application No.23 of 2008, decided on 17th November, 2008.

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

----S.5(3)---Civil Procedure Code (V of 1908), S.24---Transfer of suit from Banking Court to High Court in its Banking jurisdiction was sought on the plea that another suit was pending in the High Court between the same parties and leave to defend the suit had been granted in the said suit and copy of leave granting order was also submitted---Counsel for other party had conceded that it would be appropriate if both the suits were tried by the same court, i.e. the High Court---Suit pending before Banking Court, with consent of the parties, was ordered to be transferred to the High Court accordingly.

Saalim Salam Ansari for the Applicants.

Behzad Haider for Respondents.

2009 C L D 179

[Karachi]

Before Mrs. Qaiser Iqbal, J

COOPER & CO. (PVT.) LTD. Through duly Authorized---Plaintiff

Versus

LAUREL NAVIGATION (MAURITIUS) LTD. ---Defendant

Suits Nos.127 and 128 of 2008, decided on 12th November, 2008.

(a) Contract Act (IX of 1872)---

----S.202---Shipping agency, termination of---Effect---Interest of agent in such agency being commission or remuneration could not be said to be interest in property itself.

(b) Specific Relief Act (I of 1877)---

---Ss.12, 42 & 54---Contract Act (IX of 1872), S.202---Suit for specific performance of contract by agent for shipping agency, injunction and damages---Incurrence of heavy expenditure by agent in setting up office and necessary infrastructure for carrying on business of agency--Application for temporary injunction to restrain termination of agency by principal---Validity---Interest of agent in such agency being commission or remuneration, same could not be said to be interest in property itself---Incurrence of such expenditure by agent would not warrant grant of injunction as agent had claimed damages as alternative relief---Compensation in money would normally be considered adequate remedy for illegal termination of agency---Application for temporary injunction was dismissed in circumstances.

Abdul Habib Rajwani v. Messrs Brothers Industries Ltd. 2007 YLR 590; Messrs Travel Automation (Pvt.) Ltd. v. Abacus International (Pvt.) Limited 2006 CLD 497; Roomi Enterprises (Pvt.) Limited v. Stafford Miller Limited and others 2005 CLD 1805; Messrs Time N Visions International (Pvt.) Limited v. Dubai Islamic Bank Pakistan Limited 2007 CLD 762; Messrs Farooq and Co. v. Federation of Pakistan and others 1996 CLC 2030; Zubair Ahmed v. Pakistan State Oil Co. Limited and others PLD 1987 Kar. 112; Muhammad Aref Effendi v. Egypt Air 1980 SCMR 588; Muhammad Ibrahim v. Small Business Finance Corporation 2002 CLD 176; Messrs Business Computing International (Pvt.) Limited v. IBM World Trade Corporation 1997 CLC 1903; Pakistan Automobile Corporation Limited and others v. General Motors Overseas Distribution Corporation and others PLD 1982 Kar. 796; Huma Enterprises v. Syed Pir Ali Shah and others 1985 CLC 1522; Messrs Universal Trading Corporation (Pvt.) Limited v. Messrs Beecham Group PIC and others 1994 CLC 726; Bolan Beverages (Pvt.) Limited v. Pepsi Co., Inc. and others PLD 2004 SC. 860; Messrs World Wide Trading Co., v. Sanyo Electric Trading Co., Limited and others PLD 1986 Kar. 234; Muhammad Riaz v. Federal Construction Corporation Limited and others 1987 CLC Kar. 345; Messrs Universal Business Equipment (Pvt.) Limited v. Messrs Kokusai Commerce Inc. and others 1995 MLD 384; Talani Vanna and others v. Krishnaswami Konar and others AIR 1946 Mad. 9; Muhammad Farooq and Co., (Pvt.) Limited v. Messrs Pakistan Tobacco Co., Limited and others 1997 CLC 520; Syed Shafique Hussain v. Syed Abdul Qasim PLD 1979 Kar. 22; Messrs Caltex Oil Pakistan Limited v. Sheikh Rahan-­ud-Din PLD 1958 Lah. 63; Sardar Muhammad Nawaz v. Mst. Firdous Begum 2008 SCMR 404; Muhammad and 9 others v. Hashim Ali PLD 2003 SC. 271; Mst. Salma Javed and others v. S. M. Arshad and others PLD 1983 Kar. 303; Balagarnwala Oils Mills v. Shakarchi Trading AG and others PLD 1990 Kar. 1; Molasses Export Co., Limited v. Consolidated Sugar Mills Limited 1990 CLC 609; Marghub Siddiqui v. Hamid Ahmed Khan and others 1974 SCMR 519; Rehman Khan and others v. Mst. Safia Begum 2002 YLR 3120; Syed Mahmood Ali Gardezi v. Syeda Rabia Begum and others 1993 MLD 814; Muhammad Matin v. Mrs. Dino Manekji Chinoy PLD 1983 Kar. 387; Sui Gas Transmission Company v. Sui Gas Employees' Union 1977 SCMR 220; S.N. Gupta and Co. v. Sadananda Ghosh PLD 1960 Dac. 153; Muhammad Yousuf v. Messrs Urooj Private Limited PLD 2003 Kar. 16; Messrs Farooq and Co. v. Federation of Pakistan 1996 CLC 2030; Sunshine Corporation (Pvt.) Limited v. V.E.I. Du Pont 1999 YLR 2162; Messrs Nasir Traders v. Habib Bank Limited Quetta PLD 1993 Quetta 94; Mst. Azeemun Nisa Begum v. Ali Muhammad PLD 1990 SC 382; Abdul Habib Rajwani v. Messrs Brothers Industries Limited 2007 YLR 590 (Kar.); Messrs World Wide Trading Co. v. Sanyo Electric Trading Co. Ltd PLD 1986 Kar. 234; Philippine Airlines Inc. v. Paramount Aviation (Pvt.) Limited PLD 1999 Kar. 227; Messrs Time N Visions International (Pvt.) Limited v. Dubai Islamic Bank Pakistan Limited PLD 2007 Kar. 278; Bolan Beverages (Pvt.) Limited v. Pepsico Inc. PLD 2005 SC. 349; Messrs Petro-commodities (Pvt.) Limited v. Rice Export Corporation of Pakistan PLD 1998 Kar. 1; Zahid Hussain v. Government of Sindh 1992 CLC 2396; Messrs Pakistan Associated Construction Limited v. Asif H. Kazi 1986 SCMR 820; Puri Terminal Limited v. Government of Pakistan 2004 SCMR 1092; Hameedull v. Headmistress 1997 SCMR 855 and Hazara Hill Tract Improvement Trust v. Mst. Qaisra Elahi and others 2005 SCMR 678 ref.

(c) Contract Act (IX of 1872)---

----S.202---Illegal termination of agency by principal---Remedy of agent---Normally in such case, compensation in money would be considered adequate remedy.

Farogh Naseem for Plaintiff.

Rehman Aziz Malik for Defendant No.1.

Shakeel Pervez Bhatti for Defendant No.2.

2009 C L D 194

[Karachi]

Before Arshad Noor Khan, J

MUHAMMAD AYUB & BROTHERS through Partner---Plaintiff

Versus

PROVINCE OF SINDH through Secretary Irrigation and Power Department, Karachi, and another---Defendants

Suit No.205 and C.M.As. Nos.995, 1851, 2682, 6992 and 7411 of 2008, decided on 3rd November, 2008.

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

----O.XXXIX, Rr. 1 & 2---Temporary injunction, grant of---Essential conditions to be considered by Court stated.

For the purpose of grant of interim injunction, the Court has to consider three cardinal principles regarding grant of interim injunction, viz. (i) existence of a good prima facie case in favour of the plaintiff; (ii) balance of convenience in favour of the plaintiff and (iii) plaintiff shall suffer irreparable loss and injury, in case, if the injunction is refused.

For the loss, if any, which can be measured in terms of money no injunction can be granted. The loss can be recovered as damages by filing of suit against defendant.

(b) Specific Relief Act (I of 1877)---

----S.54---Civil Procedure Code (V of 1908), O.VII, R.11(d)---Arbitration Act (X of 1940), S.34---Suit for permanent injunction---Relief claimed in suit to restrain plaintiff-employer from forfeiting Bank guarantee furnished by plaintiff-contractor---Contract agreement containing clause regarding reference of dispute between parties to arbitrator--Application by defendant for rejection of plaint---Validity---Forum available to plaintiff was to approach Arbitrator and not to Court---Suit was barred by provisions of Arbitration Act, 1908---Plaint was rejected under O. VII, R.11, C.P.C.

(c) Partnership Act (IX of 1932)---

----S.69---Civil Procedure Code (V of 1908), O.XXIX, R.1---Suit by registered partnership firm through a person alleged to be authorized by firm---Resolution or authority on behalf of firm in favour of such person was neither filed along with plaint nor relied upon---Effect---Such person did not possess lawful authority to sign, verify and file plaint on behalf of firm---Plaint had not been filed through a competent person---Suit filed by such person was dismissed for being not maintainable.

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

----O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), S.56---Temporary injunction, grant of---Scope---No injunction could be granted against day to day functioning of public functionaries.

Bilal A. Khawaja for Petitioner.

Muhammad Yousaf Leghari, Advocate-General Sindh for Defendant No.1.

2009 C L D 204

[Karachi]

Before Nadeem Azhar Siddiqi, J

Messrs AL-AZIZ ROUTE TRANSPORT CO. ---Plaintiff

Versus

Messrs ASKARI LEASING LTD. and others---Defendants

Suit No.B-13 and C.M.As. Nos.2232, 2233, 4071 and 4072 of 2008, decided on 8th October, 2008.

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

----S. 9---Plaintiff had obtained certain buses on lease from leasing company under an agreement---Suit for recovery of amount by leasing company---Plaintiff, the lessee, had prayed for confirmation of ad interim order restraining the leasing company from snatching/forcibly taking away the buses plying on route till disposal of suit for recovery---Contentions of the plaintiff were that in case the leasing company succeeded in taking away/snatching the buses in question from the plaintiff, the plaintiff will not be in a position to pay the lease rentals in respect thereof to the leasing company and that City District Government under a separate agreement was liable to pay an amount equal to six per cent of the mark-up on the lease rentals to the plaintiff which it had failed to pay and therefore, the plaintiff was unable to pay the lease rentals regularly to the leasing company---Validity---Plea by leasing company that said company had no concern with- the agreement between City District Government and the lessee was correct, however, if at the present stage the protection provided to the plaintiff by way of interim order was recalled, the plaintiff shall be seriously prejudiced and shall suffer irreparable loss and injury as the leasing company will take over the buses and will auction the same which will not only cause financial losses to the plaintiff but at the same time the leasing company may also not be in a position to recover its dues---High Court, in the interest of both the parities, observed that plaintiff shall continue to ply buses on the route---If leave to defend was granted to the leasing company without protecting the plaintiff, their cause will be frustrated which will not be in interest of anyone---High Court, in circumstances, confirmed the ad interim injunction order, subject to deposit of monthly instalments minus the mark-up of 6% to be paid by the City District Government and laid down the terms of payment---If however, the plaintiff failed to deposit any of the above amounts within the, stipulated time, the stay order shall stand vacated without any further notice/order and the leasing company would be at liberty to take over the possession of the buses and to deal with the same in accordance with law and contract between the parties---Plaintiff was also required to deposit the arrears for the default period within three months---Order accordingly.

Salim Salam Ansari for Plaintiff.

Behzad Haider for Defendant No.1.

Ali Azam for Defendant No.2.

2009 C L D 209

[Karachi]

Before Mrs. Qaiser Iqbal and Syed Mahmood Alam Rizvi, JJ

ZAHEERUDDIN BABER---Petitioner

Versus

STATION HOUSE OFFICER and 3 others---Respondents

Constitutional Petition No.D-1346 to D-1354 of 2008, decided on 12th November, 2008.

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

----S.9---Constitution of Pakistan (1973), Art.190---Constitutional petition---Recovery of outstanding loans including credit card loans by Bank through its recovery staff with help of police and private person by raiding houses of its loaners---Validity---Bank for such recovery could approach only Banking Court---Bank assured High Court that in future guidelines provided by State Bank of Pakistan for realizing such loans would be followed in letter and spirit---High Court restrained Bank from harassing and/or creating disturbances in way of its loaners or their family member.

Gohar Iqbal for Petitioners.

Saifullah, A.A.-G. for Respondent No.1.

Ghulam Murtaza for Respondent/Bank Al-Falah.

Samiuddin for Respondent/ABN Amro/RBS.

Kashif Hanif for Respondent/NIB Bank.

M.A. Khan for Respondent/UBL.

2009 C L D 226

[Karachi]

Before Mrs. Qaiser Iqbal, J

FIRST WOMEN BANK LTD.---Appellant

Versus

Mrs. AFIFA IFTIKHAR and 2 others---Respondents

First Appeal No.53 of 2007, decided on 7th November, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 10---Contract Act (IX of 1872), Ss.129 & 137---Limitation Act (IX of 1908), Art.57---Suit against guarantor by Bank for recovery of finance advanced to principal debtor---Limitation---Letter of guarantee containing a clause binding guarantor till receipt of notice of discontinuation thereof---Notice demanding loan amount from guarantor served upon him before one year of filing of such suit by Bank---Denial of receipt of such notice by guarantor---Refusal of court to grant leave to guarantor to defend suit---Effect---Such guarantee letter would govern rights of parties and liability of guarantor to pay suit amount---Guarantor's liability would start from date of demand made by Bank---Limitation would start to run from service of notice of demand upon guarantor---If such notice presumed not to have been served upon guarantor, filing of suit against him would tantamount to service of such notice---Guarantor's liability to pay suit amount would continue by virtue of guarantee letter read with S.137 of Contract Act 1872 even though suit against principal debtor had become barred by Limitation Act, 1908---Suit was decreed against guarantor in circumstances.

United Bank Limited v. Business Investment Ltd. and 3 others 1982 CLC Kar. 1101; Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 CLD 505; Messrs United Bank Limited v President, Bazm-e-Salat and another PLD 1986 Kar. 464 and United Bank Limited v. Haji Bawa Company Ltd. and 3 others 1981 CLC Kar. 89 rel.

(b) Contract Act (IX of 1872)---

----Ss.126 & 128---Guarantee, contract of---Surety's liability, determination of---Scope--- Such liability would be determined on basis of such contract.

Behzad Haider for Appellant.

Mukhtar Ahmed Kuher for Respondent.

2009 C L D 232

[Karachi]

Before Nadeem Azhar Siddiqi, J

Messrs AL-AZIZ ROUTE TRANSPORT CO.---Plaintiff

Versus

Messrs ASKARI LEASING LTD. and another---Defendants

C.M.A. No.9231 in Suit No.B-13, C.M.A. No.9233 in Suit No.B-14, C.M.A. No. 9235 in Suit No.B-15 and C.M.A. No. 9237 in Suit No.B-16 of 2008, decided on 30th October, 2008.

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

----Ss.9 & 2(b)(ii)---Civil Procedure Code (V of 1908), S.152---Suit for declaration, rendition of accounts, injunction, specific performance of contract redemption/release of securities/guarantees, damages and other reliefs---Any clerical or arithmetical omission or error in the order can be corrected by invoking the jurisdiction of Court under S.152, C.P.C. and the same cannot be said to be reopening the case---Specific intent cannot be corrected.

Salim Salam Ansari and Rana Azeem for Plaintiff (in all suits).

Asif Mahmood and Behzad Haider for Defendant No.1 (in Suit No.B-13 of 2008).

Ms. Naheed A. Shahid for Defendant No.1 (in Suit No.B-14 of 2008).

Ms. Samia Alam Khan Durrani for Defendant No.1 (in Suit No.B-16 of 2008).

Nemo for Defendant No.1 (in Suit No.B-15 of 2008).

Tahawwur Ali Khan for Defendant No.2 (in all suits).

2009 C L D 234

[Karachi]

Before Munib Ahmad Khan, J

PAKISTAN NATIONAL SHIPPING CORPORATION---Plaintiffs

Versus

M.V. LE CONG through Agents and 2 others ---Defendants

Admiralty Suit No.8 of 2006, decided on 31st October, 2008.

Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)---

----S. 7---Civil Procedure Code (V of 1908), O.VII, R.11 & O. XXIX, R.1---Contract Act (IX of 1872), S.196---Admiralty suit by shipping Corporation-Non-filing of resolution of Board. of Directors of plaintiff-Corporation along with plaint of its signatory---Rejection of plaint on such Count, application for---Validity---No mandatory provision of law existed requiring filing of such resolution along with plaint---Such resolution could be filed at the time of evidence---Plaintiff-Corporation had not disputed authority of signatory of plaint---Appointment of an Advocate by plaintiff-Corporation for pursuing case had amounted to validation of such authority to some extent in absence of arty dispute---Plaint on such count not to be rejected under O.VII, R.11, C.P.C.---High Court rejected such application in circumstances.

Adeel Abid for Plaintiff.

S. Ali Haider for Defendants Nos. 1 to 4.

S. Tariq Ali, Standing Counsel for Defendant No.5.

2009 C L D 237

[Karachi]

Before Mrs. Qaiser Iqbal and Syed Mahmood Alam Rizvi, JJ

NIZAR ALI FAZWANI and another---Applicants

Versus

Messrs PAK GOLF LEASING COMPANY LTD. and another---Respondents

Crl. Miscellaneous No.76 of 2008, decided on 7th November, 2008.

(a) Penal Code (XLV of 1860)---

----S.489-F---Dishonestly issuing a cheque---Scope---Section 489-F, P.P.C. has been promulgated to punish those persons who take loans on the basis of forged and fabricated documents or with intent to defraud a bank or financial institution with intention not to pay back the amount.

(b) Criminal Procedure Code (V of 1898)---

----S.561-A---Financial Institutions (Recovery of Finances) Ordinance, 2001, S.20(4)---Penal Code (XLV of 1860), S.489-F---Quashing of F.I.R.--Accused had pledged articles, obtained loan and paid at least 50% amount and it was subsequently that their cheques were dishonoured---Financial Institutions (Recovery of Finances) Ordinance, 2001, was introduced for such defaulter's and the Bank had rightly filed a complaint under S.20(4) thereof as well as a civil suit against the accused--Accused in view of said facts and circumstances did not appear to have any intention to cheat or defraud the respondent-Company---Record did not show that all the cheques were dishonestly issued---Accused had also filed a suit for rescheduling the amount and permanent injunction--Apparently, therefore, ingredients of S.489-F, P.P.C. were not made out against the, accused---When on the face of it no case was made out against the accused, or there was lack of jurisdiction or when there was sheer abuse of the process of law, High Court under its inherent powers under S.561-A, Cr.P.C. could quash the F.I.R. or even proceedings for that matter---Impugned F.I.R. was based on mala fides and ulterior motives and the same being not sustainable was quashed accordingly.

Capt. (Retd.) Nayyar Islam v. Senior Superintendent of Police and others PLD 2001 Lah. 533; Maj. (Retd.) Javed Inayat Khan Kiyani v. The State PLD 2006 Lah. 752; Mian Tariq Azmat Sheikh v. S.H.O. Police Station F.I.A. and others 1996 MLD 1362; Miraj. Khan v. Gul Ahmed and others 2000 SCMR 122; Muhammad Saleem Bhatti v. Syed Safdar Ali Rizvi and 2 others. 2006 SCMR 1957; Agha Wazir Abbas and others v. The State and others 2005 SCMR 1175; Hayat Bakhsh and others v. The State PLD 1981 265; Allah Bakhsh v. the State 1982 SCMR 911; Gul Hassan and another v. The State PLD 1969 SC 89; Muhammad Jamil Ahmed and another v. the State. SBLR 2005 Sindh 1146 and Muhammad Farooq Khan v. Province of Sindh and others 2008 YLR 1265 ref.

Dr. Ghulam Mustafa v. the State and others 2008 SCMR 76; Col. Shah Sadiq v. Muhammad Ashiq and others; 2006 SCMR 276 and Seema Fareed and others v. the State and others 2008 SCMR 839 distinguished.

(c) Constitution of Pakistan (1973)---

----Art. 199---Constitutional jurisdiction---Quashing of procee­dings---High Court in exercise of its constitutional jurisdiction under Art.199 of the Constitution, cannot stifle and throttle the prosecution case at its initial stage, when ingredients of offences charged in the F.I.R. were prima facie made out.

Seema Fareed and others v. The State and another 2008 SCMR 839 ref.

(d) Administration of justice---

----Criminal and civil proceedings---Co-existence---Criminal case must be allowed to proceed on its merits---Institution of civil proceedings relating to same transaction is not a legal bar to maintainability of criminal proceedings and both can proceed concurrently---Conviction for a criminal offence is altogether different matter from civil liability---Purpose and spirit of criminal proceedings is to punish the offender for the commission of a crime, while the purpose behind the civil proceedings is to enforce civil rights arising out of contracts---Both the criminal and civil proceedings can co-exist and proceed simultaneously without any legal restriction.

(e) Criminal Procedure Code (V of 1898)---

----S.561-A---Inherent powers of High Court---Quashing of F.I.R. and proceedings--Application and scope--When prima facie no case is made out, or when there is want of jurisdiction, or when there is a sheer abuse of the process of law, in peculiar circumstances, High Court under its inherent powers under S.561 A, Cr.P.C. can quash an F.I.R. or even proceedings for that matter.

S. Tauqeer Hassan for Applicants.

Amir Mansoob Qureshi for Respondent No.1.

Saifullah learned A.A. -G for State.

2009 C L D 305

[Karachi]

Before, Nadeem Azhar Siddiqi, J

MUHAMMAD UMAR ---Plaintiff

Versus

YAR MUHAMMAD through Legal Heirs and others---Defendants

Suit No.898 of 1997, decided on 1st December, 2008.

(a) Arbitration Act (X of 1940)---

----Ss.8 & 20---Reference of dispute to arbitration, application for--Applicant claimed his share in the profit of partnership business, assets and properties in possession of respondent---Partnership-Deed contained. provision regarding reference of dispute between partners to arbitrator---Respondent's plea was that such application was not maintainable as applicant had already retired from partnership and new partnership had come into existence by admitting new partner---Validity---Before referring dispute to arbitration, three conditions must co-exist i.e. existence of arbitration agreement, existence of dispute thereunder and non-commencement of proceedings under Chap. II of Arbitration Act, 1940---Pleadings of parties fulfilled such three conditions---Parties by agreement had chosen to refer dispute to arbitration, which they were bound to honour and could not bypass the mechanism provided thereunder on flimsy grounds---High Court directed respondent to file arbitration agreement and directed parties to submit name of arbitrator within specified time.

(b) Arbitration Act (X of 1940)---

----S.8---Reference of dispute to arbitration---Existence of three essential conditions stated.

Before referring the matter to the arbitration, three conditions are necessary; (1) existence of arbitration agreement; (2) existence of dispute under the agreement; (3) proceedings under Chapter-II of Arbitration Act, 1940 not having been started.

Arif Bilal Sherwani for Plaintiff.

Nemo for Defendants.

2009 C L D 307

[Karachi]

Before, Gulzar Ahmed, J

MUHAMMAD NASIR GHAZI---Petitioner

Versus

G.M. PRINTO PACK (PVT.) LTD.---Respondent

J.M. No.35 of 2007, decided on 11th November, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss.305, 306, 328 & 329---Petition for winding up of company--Inability of company to pay its debts despite registration of several charges against its assets with Registrar of Companies--Non-filing of objections by company to petition for winding up---Creditors' plea was that petitioner and his wife as Directors of company having embezzled its entire finance be directed to pay off its liabilities---Validity---Objectors had not contested question of inability of company to pay its debts---Objectors might initiate legal proceedings against petitioner and his wife, if permissible under law---High Court ordered company to be wound up while directing its Directors to submit in terms of S.328 of Companies Ordinance, 1984 a statement regarding its affairs verified by an affidavit to Official Liquidator, who, in turn, under S.329 thereof would submit his preliminary report to Court to bring to its notice, inter alia, all factors resulting due to failure of company and further report containing his opinion of, any fraud committed by any person in its promotion and formation, whereupon Court could pass an appropriate order.

Bashir Ahmad Khan for Petitioners.

Nemo for Respondents.

None for Objectors.

Date of hearing: 21st October, 2008.

2009 C L D 312

[Karachi]

Before, Anwar Zaheer Jamali, C.J. and Ghulam Dastagir Shahani, J

HABIB BANK LIMITED ---Appellant

Versus

TAUQEER AHMED SIDDIQUI and another---Respondents

1st Appeals Nos.49 and 50 of 2008, decided on 26th November, 2008.

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

----Ss.3, 9 & 17---Civil Procedure Code (V of 1908), Ss.151, 152 &

153---Decree for recovery of loan amount---Cost of funds, non-awarding of---Application by Bank for amendment of decree to include therein such cost sought in suit---Dismissal of such application by Banking Court---Validity--Awarding of cost in terms of S.17 read with S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was mandatory---Banking Court in its judgment had not observed that Bank was not entitled to such cost from date of default till realization of decretal amount---Bank was entitled to such cost---High Court accepted appeal in Circumstances.

Habib Bank Ltd. v. Iftikhar Ahmed and 7 others 1993 CLC 535 ref.

Syed Saadi Jafri Zainabi v. Land Acquisition Collector and Assistant Commissioner PLD 1992 SC 472 and Messrs Habib Bank Limited v. Sajjad Haider and another Ist Appeal No.24 of 2007 of this Court rel.

Masood Anwar Ausaf for Appellant.

Nemo for Respondents (In 1st Appeal No.49 of 2008).

Nemo for Respondent (In 1st Appeal No.50 of 2008).

2009 C L D 318

[Karachi]

Before, Nadeem Azhar Siddiqi, J

Messrs H & B GENERAL TRADING COMPANY through Director---Applicant

Versus

Messrs INTERNATIONAL MARKETING COMPANY through Proprietor and 2 others---Respondents

J. Miscellaneous Appeals Nos. 14 and 18 of 2008, Suits Nos.571, 572 of 2008 and C.M.As. Nos.3251, 6180, 6181 of 2008, decided on 20th November, 2008.

(a) Trade Marks Ordinance (XIX of 2001)---

----Ss.73, 80, 96 & 117---Civil Procedure Code (V of 1908), Ss.10, 11 & 20(c)---Suit for revocation of registration of defendant's trade mark and declaring same as invalid and suspension of its operation---Fade marks of both plaintiff and defendant were registered at place "K", but defendant on receipt of plaintiff s legal notice at place "P" filed suit at "P" against plaintiff--Application for stay of subsequent suit of plaintiff at place "K" till decision of defendant's earlier suit pending at place "P" in respect of same trade mark---Validity---Cause of action had partly arisen to defendant at place "P", thus, it was justified to file its suit there against plaintiff---Plaintiff should have filed its suit before District Judge at place "P", where proceedings in respect of same trade mark were already pending---Difference between prayer clauses of such two suits would not hinder passing of order under S.10, C.P.C., for being dependant on fate of suit pending at place and without decision therein of rightful owner of trade mark, no decree in both suits could be passed---If suit at place "P" was decided in favour of defendant, then same would operate as res judicata in plaintiff s suit at place K"---Matter in issue in both suits (i.e. question of proprietary of trade mark) between same, parties was same and defendant's previous suit was pending at place "P" before a competent Court, which could grant relief in plaintiff's subsequent suit also---In absence of any one of the conditions mentioned in S.10, C.P.C., Court could stay subsequent suit in interest of justice, provided decision in previously instituted suit would, attract provision of S.11, C.P.C.---Application under S.10, C.P.C., was accepted with observations that interim order passed in plaintiffs subsequent suit would continue to operate till final decision of defendant's previous suit at place "P"---Principles.

Muhammad Younus v. Shaukat Ali, 2003 CLD 1037; Standard Finis Oil Co. Ltd. v. National Detergent Ltd. and others 1984 CLC 781; National Distribution Company v. National Detergent Ltd. PLD 1983 Kar. 402; Salim Industries v. Burhani Trading Co. and others 1982 CLC 973; Habib Bank Ltd. v. Ali Mohtaram Naqvi PLD 1987 Kar. 102; Mahmood Ahmad v. Karachi Road Transport Corporation PLD 1970 Kar. 41 and Dr. Haider Ali Mithani and another v. Ishrat Swaleh and others PLD 1999 Kar. 81 ref.

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

----Ss.10 & 11---Stay of subsequent suit---Scope---Where decision in previously instituted suit would operate as res judicata, then proceedings in subsequent suit could be stayed even in absence of any one of the conditions mentioned in S.10, C.P.C.-Principles.

Main ingredients for invoking provision of section 10, C.P.C. are that; (1) the matter in issue in both suits must be directly and substantially the same in both the proceedings; (2) the previously instituted suit is pending in a Court of competent jurisdiction; (3) the Court before whom the previous suit is pending must be competent to grant relief in the subsequent suit; (4) both the suits, i.e. the previous and the subsequent suits must be between the same parties or their representatives; and (5) the parties must be litigating under the same title.

If all the above-mentioned conditions are fulfilled then the subsequent suit must be stayed under provisions of section 10, C.P.C. However, in case any one of the above mentioned conditions are not present even then the subsequent suit can be stayed under section 10, C.P.C, in the interest of justice provided that the decision in the previously instituted suit would attract provisions of section 11, C.P.C.

Salim Industries Limited v. Messrs. Burhani Trading Company and another 1982 CLC 973 rel.

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

---S.10---Provision of S.10, C.P.C.---Object---Object of such provision is to avoid duplication of trial on same cause of action and obviate conflict of decisions and unnecessary labour on adjudication of a common suit.

(d) Trade Marks Act (XIX of 2001)---

----Preamble---Object of Trade Marks Act, 2001---Mechanism provided in Trade Marks Act, 2001 envisaged that multiplicity of proceedings must be avoided---Application in respect of a trade mark could be filed in a Court, where some proceedings in respect thereof were already pending---Principles.

Nadeem Qureshi and Ahmed Hasan Rana for Petitioner.

Amir Javed for Respondent No.1.

Saleem Merchant for Respondent No.3.

Nemo for Respondent No.2.

2009 C L D 329

[Karachi]

Before Amir Hani Muslim, J

Dr. SHAKEEL AHMED SIDDIQUI and another---Plaintiffs

Versus

PAK LIBYA HOLDING COMPANY (PVT.) LTD.---Defendant

Suit No.B-55 and C.M.A. No.9275 of 2008, decided on 20th October, 2008.

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

----S.10--Application for grant of leave to defend suit---Defendant, in the present case, was served on four different dates and the period in between did not run in months, but in days, therefore, such issue could also be framed---Plaintiff had also claimed damages, which were required to be quantified by leading evidence; there were other questions, which were raised in the leave to defend application---Parities were also to lead evidence on the question inclusive of the issue of buy back price---High Court allowed the application in circumstances A and directed the matter to be posted for issues.

Salim Salam Ansari for Plaintiff.

Abdul Sattar Lakhani for Defendant.

2009 C L D 330

[Karachi]

Before Nadeem Azhar Siddiqi, J

NATIONAL BANK OF PAKISTAN---Applicant

Versus

GAMMON OF PAKISTAN LTD.-Respondent

Execution Application No.204 of 2000 in Suit No.1102 of 1988, decided on 15th December, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.19---Limitation Act (IX of 1908), S.19 & Art.181---Decree for recovery of loan amount, execution of---Limitation---Execution petition filed on 30-11-1998 for execution of judgment dated 13-5-1990 and decree dated 22-5-1990---Plea of decree-holder Bank was that Deputy Director and Managing Director of judgment-debtor-company in their letters dated 7-12-1991 and 13-1-1992 and Annual Reports for years 1990 to 1998 and 2001 had acknowledged their liability towards Bank---Validity---Bank could file execution petition within three years of accrual of right to apply, which right had accrued on date of passing of judgment---Such letters and Annual Reports signed by such representatives of company for being in writing and containing acknowledgement of debt owed by company to Bank could be treated as clear, unequivocal and unconditional acknowledge­ment in terms of S.19 of Limitation Act, 1908---Each Annual Report from year 1990 onwards had given a fresh start to period of limitation on its signing by representatives of company---Execution petition was, held to be within time.

Messrs M. G. Kadir and Co. v. Abdul Latif PLD 1970 SC 708; Abdul Latif v. Messrs M. G. Kadir and Co. PLD 1964 (W.P.) Kar. 558; Deputy Custodian of Enemy Property v. Karachi Electric Supply Corporation Ltd. 1986 CLC 2808; Karachi Electric Supply Corporation Ltd. v. Deputy Custodian of Enemy Property 1989 ALD 468; Rajah of Vizianagaram v. The Official Liquidator Vizianagaram Mining Company Limited AIR 1952 Mad. 136; National Bank of Pakistan v. Azizuddin 1996 SCMR 759; Habib Bank Limited v. Five Star Travels 2006 CLD 1396; National Development Leasing Corporation v. Messrs Sunshine Cloth Limited 2006 CLD 726; Mehboob Khan v. Hassan Khan Durrani PLD 1990 SC 778 and Habib Bank Limited v. Zulfiqar Ali Khan 2002 CLD 1758 ref.

Messrs M.G. Kadir and Co. v. Abdul Latif PLD 1970 SC 708; Abdul Latif v. Messrs M.G. Kadir and Co. PLD 1964 W.P. Kar. 558; Deputy Custodian of Enemy Property v. Karachi Electric Supply Corporation Ltd. 1986 CLC 2808 and Karachi Electric Supply Corporation Ltd. v. Deputy Custodian of Enemy Property 1989 ALD 468 rel.

(b) Limitation Act (IX of 1908)---

----S.19---Acknowledgement of debt in absence of debtor's promise to pay same---Validity---Such promise not a requirement of S.19 of Limitation Act, 1908.

Abdul Latif v. Messrs M.G. Kadir & Co. PLD 1964 (W.P.) Kar. 558 rel.

Tasawur Ali Hashmi for Applicant

Jawad Hassan for Respondent.

2009 C L D 339

[Karachi]

Before Munib Ahmad Khan, J

CLIFFORD CHANCE---Appellant

Versus

ASSISTANT REGISTRAR OF TRADE MARKS---Respondent

Miscellaneous Appeal No.35 of 2002, decided on 3rd December, 2008.

(a) Trade Marks Rules, 1963---

----Rr.25(3) & 84---Limitation Act (IX of 1908), S.29(2)--Appeal to High Court---Limitation--Application for obtaining certified copy of impugned decision dated 25-10-2001 was made on 13-11-2001---Certified copy was made ready on 5-7-2002 and dispatched to appellant on 9-7-2002--Appeal was filed on 7-9-2002--Appellant's plea was that he was intimated on 7-11-2001 about impugned decision, thus, difference of six days between 7-11-2001 to 13-11-2001 was computable towards counting of two months' time provided under R.84 of Trade Marks Rules, 1963---Validity--Appellant had not filed application for condonation of delay---Limitation Act, 1908 would not apply to present case as specific period for filing appeal was provided under R.84 of Trade Marks Rules, 1963---If time of five days was taken, then appeal should have been filed on 4-9-2002--Appeal was dismissed for being barred by three days.

PLD 1992 SC 417 ref.

1987 MLD 218; 1988 CLC 489 and 1973 SCMR 555 distinguished.

(b) Limitation Act (IX of 1908)---

----S.3---Limitation, matter of---Duty of Court to consider such matter itself even though not raised by any party---Principles.

Even if the limitation is not pointed out or objected to by any party, then Court itself has to consider as to whether the matter before it is within time or not, and that the legal objection in respect of maintainability etc., can be taken and raised at any time and is to be decided on priority.

Ms. Aetna Salman for Appellant.

Sultan Ahmed Sheikh for Respondent.

Date of hearing: 3rd December, 2008.

2009 C L D 342

[Karachi]

Before Anwar Zaheer Jamali, C.J. and Ghulam Dastagir A. Shahani, J

Messrs AAMER ENTERPRISES (PVT.) LTD. and 3 others---Appellants

Versus

Messrs UNITED BANK LIMITED and another ---Respondents

Special First Appeal No.55 of 2008, decided on 26th November, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 9---Service of summons---Service through courier, due to alleged refusal by the addressee, as well as through publication was only presumptive in nature, therefore, if any party had disputed service of summons by such modes, this aspect of the case was to be examined by the Banking Court carefully before recording its conclusion.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 10--Application for leave to defend suit---Limitation---Condonation of delay---Scope---Once the applicants had pleaded service of summons in the suit on 19-4-2008, 30 days period of limitation prescribed under S.10(3), Financial Institutions (Recovery of Finances) Ordinance, 2001 was to be computed from that date, and mere non filing of application on 28-4-2008 or 2-5-2008 would not justify rejection of their applications for leave to defend filed on 30-5-2008, on such ground---Banking Court, in the present case, while dealing with the applications also failed to consider that under the proviso to S.10(2) of the Ordinance, it had ample powers to condone delay, if any, in the filing of leave to defend application if the defendant could satisfy the Court that he had no knowledge of summons through publication in newspapers---Leave to defend applications moved by the defendants being within time, Banking Court should have proceeded and decided the same on merits---High Court,' on failure to do so by the Banking Court, set aside the impugned order with directions to the Banking Court to decide the applications for leave to defend suit in accordance with law.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 10 & 22---Application for leave to defend suit---Rejection of---Appeal to High Court---Scope---Contention was that the fate of the leave to defend the application before the Banking Court needed to be decided by High Court in appeal on merits---Validity---Held, such course if followed by the Appellate Court, unless consented by the parties, may deprive the aggrieved party of his legitimate right to challenge same before the Higher forum---High Court, however, directed the Banking Court to expedite the disposal of suit within specified period.

Saalim Salam Ansari for Appellants.

Ijaz Ahmed Shirazi for Respondents.

2009 C L D 346

[Karachi]

Before Khilji Arif Hussain and Dr. Qammaruddin Bohra, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN---Appellant

Versus

MUHAMMAD AYUB and 4 others---Respondents

High Court Appeal No.274, C.M.As. Nos.2251 of 2007 and 600 of 2008, decided on 12th December, 2008.

Industrial Development Bank of Pakistan Ordinance (XXXI of 1962)---

----S.39---Civil Procedure Code (V of 1908), O.XXI, Rr.89, 90, 91 & XXXIV, R.13---Transfer of Property Act (IV of 1882), S.78---Sale of mortgaged property for recovery of loan amount---Issuance of sale certificate in favour of purchaser on payment of entire sale price and delivery of its possession to him--Applicant as prior mortgagee of such property prayed for recalling of order of its sale---Validity---Purchaser, after purchasing property through Court, had paid its price as bona fide purchaser and was delivered its possession---Order of sale at such stage could not be recalled as none should be injured by an act of Court---Applicant's registered mortgage charge on property was prior in time than equitable mortgage charge of decree-holder---Decree­-holder had acted in a gross-negligent manner by failing to make inquiry from Sub-Registrar concerned as to whether such property was free from encumbrance or not---Decree-holder was not entitled to deprive applicant as prior mortgagee from sale proceeds of mortgaged property---Such application was accepted in circumstances.

Muhammad Saleem v. Manager, United Bank Limited, PLD 1990 (AJ & K) 29 and Hoechst Pakistan and others v. Maqbool Ahmad and another, 1998 CLC 134 ref.

Messrs Industrial Development Bank of Pakistan v. Messrs Maida Limited and others, 1994 SCMR 2248; United Bank Ltd. v. Messrs Shaikh Rayon Silk Mills Ltd. 2002 CLC 696; Lloyds Bank, Ltd. v. P.E. Guzdar & Co. AIR 1930 Cal.22 and Kanigalla Prakasa Rao v. Nanduri Ramakrishna Rao and others, AIR 1982 Andhra Prad. 272 rel.

Ainuddin Khan for Appellant.

Khaleeq Ahmed for Respondents.

2009 C L D 353

[Karachi]

Before Amir Hani Muslim, J

PICIC COMMERCIAL BANK LTD.---Plaintiff

Versus

ABBAS ALI KHAN KAIMKHANI---Defendant

Suits Nos.B-19 and B-32 C.M.As. Nos.8102, 8772 of 2007, decided on 20th November, 2008.

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

----Ss. 10 & 9---Suit for recovery of loan by Bank---Application for leave to defend the suit by the defendant---High Court, in circumstances, while dismissing the application for leave to defend the suit, appointed a firm of Chartered Accountants as Commissioner to examine the books of accounts of the parties and to determine the outstanding amounts, which the defendants had to pay towards the loan availed by them from the plaintiff/Bank---Commissioner firm was given specific directions by High Court; for examination of books of accounts of the parties in that behalf within specified period.

Behzad Haider for Plaintiff (in Suit No.B-19 of 2007 and Defendant in Suit No.B-32 of 2007).

Salim Salam Ansari for Defendant (in Suit No.B-19 of 2007 and Plaintiff in Suit No.B-32 of 2007).

2009 C L D 354

[Karachi]

Before Nadeem Azhar Siddiqi, J

HABIB BANK LTD. through Assets Management (ARM) International Division---Plaintiff

Versus

MUHAMMAD NAVEED SOOMAR and others---Defendants

Suit No.B-13 of 2006, decided on 15th December, 2008.

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

----Ss.7(1)(a), 9 & 10---Companies Ordinance (XLVII of 1984), S.316---Civil Procedure Code (V of 1908), S.13---Suit for recovery of loan amount from guarantor on basis of ex parte foreign judgment obtained against him by Bank---Leave to defend suit, application for---Plea of defendant was that suit was not maintainable on basis of such judgment for not being on merits; that principal borrowing company had gone into liquidation under Companies Ordinance, 1984 and Liquidator had invited claims against company; and that according to law of Pakistan original suit was time-barred and thus, present suit was not maintainable on basis of such judgment---Validity---Foreign judgment had been passed ex parte due to non-appearance of defendant, thus, same could not be treated as judgment on merits---Foreign judgment did not show, whether at relevant time defendant was residing in foreign country and whether any attempt hind been made to serve him personally or not---No notice in foreign suit had been served upon Liquidator to represent company---Bank had obtained foreign judgment by suppressing factum of liquidation of company---Defendant appeared to be non-resident of foreign country and had not submitted to jurisdiction of foreign Court, thus, foreign judgment was not binding upon him---Court in Pakistan could refuse to accept foreign judgment as conclusive, if same fell within any of exceptions of S.13, C.P.C.---Defendant had raised substantial questions of law and facts requiring recording of evidence, thus, granting him leave to defend suit became necessary---Banking Court accepted such application and treated same as written statement.

Naeemullah Malik v. United Bank Limited 2006 CLD 1592; R.E. Mahomed Kassim and Co. v. Seeni Pakir-Bin-Ahmad AIR 1927 Mad. 265; National Bank of Pakistan v. Banking Tribunal No.1 PLD 1994 Kar. 358; Nadeem Ghani v. United Bank Limited 2001 CLC 1904; Messrs Safa Textile Ltd. v. Messrs Habib Bank Limited 2004 CLD 279; Emirates Bank International Ltd. v. Messrs Dosman Brothers and 9 others 1990 MLD 1779 and Abdul Ghani v. Haji Saley Muhammad PLD 1960 (W.P) Kar. 594 ref.

Emirates Bank International Ltd. v. Messrs Dosman Brothers 1990 MLD 1779; Abdul Ghani v. Haji Saley Muhammad PLD 1960 (W.P.) Kar. 594; Fazal Ahmad v. Abdul Bari PLD 1952 Dac. 155 and Grosvenor Casino Limited, Shahrah-e-Kamal Ataturk, Karachi v Abdul Malik Badruddin 1997 SCMR 323 rel.

Abdul Sattar Lakhani for Plaintiff.

Tasawur Ali Hashmi for Defendants.

2009 C L D 374

[Karachi]

Before Khalid Ali Z. Qazi, J

IFTIKHAR AHMED---Plaintiff

Versus

MY BANK LTD. through President and 4 others---Defendants

Suit No.1329 of 2008, decided on 1st December, 2008.

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

----S.15---Specific Relief Act (I of 1877), S.42---Civil Procedure Code (V of 1908), O.XXIX, Rr.1 & 2---Injunction, grant of---Sale of mortgaged property---Scope---Plaintiff was buyer of suit properties from the owner by registered sale-deed---Plaintiff was aggrieved of notices issued by bank with regard to sale of suit properties as the same were allegedly mortgaged with bank---Plea raised by plaintiff was that suit properties were never mortgaged with bank and documents with bank were forged---Validity---Bank had issued notices as required under S.15(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, on the addresses of suit properties which were sealed by Nazir of Court as plaintiff was not residing on those addresses, thus there was no due service in law and fact---Bank did not file proper accounts under S.15(10) of Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, bank had violated law to its own benefit and provisions of S.15 (12) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was not attracted---Plaintiff had successfully made out a prima facie arguable case in his favour and balance of convenience was also in his favour as title documents were still in his name--All factual and legal controversies could be thrashed out during trial after recording of evidence and plaintiff might suffer irreparable loss if injunction was not granted---High Court restrained the bank from creating any third party interest in the suit property till disposal of the suit---Application was allowed in circumstances.

PLD 2004 Kar. 304; PLD 1970 SC 180; 2001 CLC 1825; PLD 1990 Kar. 1; 2007 CLD 349; 2007 CLD 232; 1993 CLC 1316; 1990 CLC 1473; 2006 CLD 18; 2003 CLD 931; 2004 CLD 112; 2003 CLD 367; 1998 CLD 1718; 2003 CLD 867, 931; 2007 SCMR 373; Sheikh Abdul Sattar Lasi v. Judge Banking Court 2007 CLD 69; Qaiser Majeed v. National Bunk of Pakistan 2001 CLD 812; Messrs Cargo Aids and 4 others v. Soneri Bank Limited 2008 CLD 1127; Messrs Gold Star Paper Mills (Pvt.) Ltd. and 3 others v. National Bank of Pakistan 2008 CLD 1170; Mst. Shahmim Akhtar v. Muhammad Riaz and another 2008 CLD 186; Syed Waseem Hussain v. Pakistan Export Finance Guarantee Limited and 2 others 2008 CLD 756 and Izhar Alam Farooqui, Advocate and another v. Sheikh Abdul Sattar Lasi and others 2008 CLD 149 ref.

Syed Ghulam Nabi Shah and Raja Sikander Khan Yasir for Plaintiff.

Aziz-ur-Rehman for Defendant No.1.

Qamar Ahmad Shaikh for Defendants Nos.3 and 4.

2009 C L D 411

[Karachi]

Before Anwar Zaheer Jamali, C.J. and Ghulam Dastagir A. Shahani, J

Messrs AAMER ENTERPRISES (PVT.) LTD. and 3 another----Appellants

Versus

UNITED BANK LTD. and others----Respondents

Ist Appeal No.54 of 2008, decided on 26th November, 2008.

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

----Ss.19(1) & 22---Contention of the appellants was that their application under S.19(1) of the Financial Institutions) Recovery of Finances) Ordinance, 2001, along with other applications was disposed of by Banking Court without assigning any reason whatsoever---High Court disposed of the appeal by partially modifying the impugned order to the extent that the application under S.19(1) of the Ordinance read with S.151, C.P.C. moved by the appellants before the Banking Court, shall be heard afresh and be positively disposed of within thirty days from the date of communication of present order of the High Court.

Saalim Salam Ansari for Appellants.

Ijaz Ahmed for Respondents.

2009 C L D 422

[Karachi]

Before Munib Ahmad Khan, J

MUHAMMAD IQBAL and another----Petitioners

Versus

Messrs RAZAK (PVT.) LTD., KARACHI and 4 others----Respondents

J. Miscellaneous No.17 of 2006, decided on 12th September, 2007.

Companies Ordinance (XLVII of 1984)---

----S. 305---Petition for winding up of Company---Share-holding of the company was between the petitioners' family as well as in the respondent family and that association could not go further due to differences arising between them and allegations levelled against each other---Claim of the petitioners to the extent of share-holding had not been rebutted in a satisfactory manner by respondents---Respondents though had claimed that the shares had been transferred by the petitioners, but no proof of payment towards consideration, as alleged, had been shown notwithstanding the facts that company was owner of lands which was relevant factor to determine share value---Contention of the respondents had also not been supported through any statutory submission before the Registrar of Companies, while Registrar had confirmed the holding of the petitioners through his comments---Keeping in view the Auditor's report, there was no reason that the Company should be continued---High Court ordered that the company be wound up---Official Assignee, in circumstances, was appointed as liquidator to wind up the Company---Claims of the parties to the petition which had not been discussed, were to be scrutinized by the official liquidator.

Muhammad Mushtaq Qadri for Petitioners.

Rehman Aziz Malik for Respondents.

2009 C L D 432

[Karachi]

Before Munib Ahmad Khan, J

Messrs SHAZIM INTERNATIONAL (PVT.) LTD. and 6 others----Plaintiffs

Versus

Messrs FIRST WOMEN BANK LTD.----Defendant

Suit No. B-20 of 2006, decided on 28th November, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 10---Suit against Bank by customer---Procedure---Customer and bank both under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, can file suits but procedure specified under Ss.9 (3) and 10 (4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, is in respect to suits which are filed by financial institution and defended by customer---No separate procedure has been provided for customer to file suit---Procedure given in Financial Institutions (Recovery of Finances) Ordinance, 2001, for filing leave to defend application is for customer but as S.9 (1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, provides that customer can also file a suit against financial institution, therefore, same procedure as applicable to banks, has also to be stretched to the suits filed by customer.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Civil Procedure Code (V of 1908), S.141---Banking Courts, working of---Civil Procedure Code, 1908, applicability---Almost complete procedure has been provided in Financial Institutions (Recovery of Finances) Ordinance, 2001, for working of Banking Courts---Wherever specific provisions are not available then by virtue of S.141 C.P.C., the procedure provided in Civil Procedure Code, 1908, is applicable.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Damages, recovery of---Principles---Word "obligation" on non fulfilment of which a suit can be filed, specifically contains word "finance" or any other amount relating to finance or liquidated damages but it does not include general damages on the basis of presumptions or compensatory damages towards mental torture and agony etc.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.10---Leave to defend the suit, grant of---Principles---Matter relating to commercial transaction and issue to be decided in speedy way, therefore, specific procedure and system has been provided---Documents executed between parties towards their rights and liabilities are to be produced and followed by money transaction, therefore, they are given weight---Until defendant establishes his case, leave to defend cannot be granted

(e) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Suit for recovery of general damages---Maintainability---Contrary to summary procedure for finance, a suit for general damages or actual damages needs detailed evidence and issue in that respect cannot be decided only on the basis of documents executed between parties---To prove such type of damages, extraneous evidence to show that claimant has suffered mental torture, agony or damages in respect to loss of reputation is to be brought and supported through different types of evidence with aid and assistance of evidence of other persons having no concern with grant of finance e.g. by experts from medicine and other professions etc.---Standard of evidence required for proving a case under Banking Law, keeping in view documents executed for grant of finance is quite different than quantum of evidence required to prove general damages towards loss of reputation or agony etc.---As far as liquidated damages are concerned and as provided in definition of obligation, such type of damages are different as the same have expressly been stipulated by parties in their contract---In case of breach of contract these are liquidated damages or damages which have been ascertained.

Black's Law Dictionary ref.

(f) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 10---Civil Procedure Code (V of 1908), O.VII, R.11---Rejection of plaint---Recovery of general damages---Scope--Plaintiff filed suit under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, for recovery of damages against bank---Validity---Procedure provided under Financial Institutions (Recovery of Finances) Ordinance, 2001, could be adopted when there were specific conditions in terms of S.9 (3) and defence under S.10 (4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Issue of damages could not be fixed in any definition nor definition of finance or obligation could be interpreted in a way that it should include general damages---Issue of liquidated damages which could be calculated in terms of agreement could be taken in defence by a customer if a suit was filed by financial institution while that could also be taken if the customer himself wanted to file a suit on the allegation of non fulfilment of obligation---Suit was filed by a limited company and its directors while general damages had been claimed for the company and its directors as well as for legal heirs of some of the directors, which showed that damages had been applied in a remotest way, which were not permitted under the law---Plaint could not be returned to plaintiff as two different causes one relating to Banking Court while another in respect to damages to be entertained by Civil Court---Plaint was rejected in circumstances.

N.B.P. v. Khalid Mahmood 2002 CLD 658; 1998 CLC 1718; Value Gold v. U.B.L. PLD 1999 Kar. 1; 2007 CLD 634; 2003 CLD 1419; 2003 CLD 1843; 2006 CLD 1147; 2006 CLD 167; 1993 SCMR 441; 2003 SCMR 1156; 2003 CLD 1848; 2004 CLD 112; 2007 CLD 457; 2008 CLD 385; 2008 CLD 576; 2006 SCMR 1347; 2000 MLD 850; 2005 CLD 569 (DB) and 2006 CLD 1220 ref.

Saalim Salam Ansari for Plaintiffs.

Syed Muhammad Kazim for Defendant.

Arshad Tayebally Amicus Curiae.

2009 C L D 447

[Karachi]

Before Anwar Zaheer Jamali, C.J. and Khawaja Naveed Ahmed, J

SHAKEEL AHMED----Petitioner

Versus

BANKING COURT No.II, KARACHI and another----Respondents

Constitutional Petition No.D-1086 of 2008, decided on 31st October, 2008.

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

----Ss. 9 & 19---Civil Procedure Code (V of 1908), S.12(2)---Constitution of Pakistan (1973), Art.199---Constitutional petition---Suit for recovery of loan---Execution of decree---Protection against order for issuance of non-bailable warrants---Suit filed against the petitioner was decreed and judgment and decree passed in the suit having not been challenged by the petitioner, same had attained finality---When execution proceedings for recovery of decretal sum were initiated against the petitioner, he submitted 'application before the Banking Court under S.12(2), C.P.C., which was dismissed---Subsequently, to save himself from the execution of the decree during which order was passed and non-bailable warrants of the petitioner were issued he had filed constitutional petition---Validity---No case for exercise of constitutional jurisdiction was made out in favour of the Petitioner as grant of any relief to him in those proceedings would serve no other purpose, but to perpetuate injustice---Constitutional petition was dismissed.

S.M. Iqbal for Petitioner.

Manzoor-ul-Haq holding brief for Ms. Samia Alam Khan Durrani for Respondent No.2.

2009 C L D 448

[Karachi]

Before Azizullah M. Memon and Faisal Arab, JJ

Syed AFSAR ALI through Advocate----Appellant

Versus

PAKISTAN EXPORT FINANCE GUARANTEE AGENCY LIMITED and another ----Respondents

Ist Appeal No.55 of 2007, and C.M.As. Nos.1920, 1948 and 2084 of 2008, decided on 1st January, 2009.

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

----Ss. 9, 19 & 22---Civil Procedure Code (V of 1908), S.55---Suit for recovery of loan---Execution of decree---Arrest of judgment­-debtor--Conditions--Appeal had arisen from the order passed by the Executing Court, whereby warrant of arrest was issued against judgment-debtor---Mortgaged property was sold and certain amount was recovered and balance amount was to be recovered--Against said outstanding amount judgment-debtor gave an assurance and issued cheques, which could not be honoured---Executing Court passed order of imprisonment of judgment-debtor, who filed appeal against said order, deposited amount with the Nazir of the court and sought his release---Said appeal, however was dismissed for non-prosecution and he filed restoration application, notice of which was issued to the respondents---Counsel for Financial Institution had submitted that the Financial Institution was interested in the recovery of the decretal amount and had no objection, if the appeal was restored and disposed of on merits---In view of statement of the Financial Institution, Court restored the appeal and took up the same for hearing---Held, judgment-debtor could not be ordered to be imprisoned only because he was unable to satisfy the decrees---Order of imprisonment was to be passed only when judgment-debtor became dishonest and concealed his financial resources from which he could satisfy the decree---Out of the balance decretal amount, some amount had been deposited by the judgment-debtor in the court---With regard to the balance amount, with future cost of funds, judgment-debtor would disclose before the Executing Court all his sources of income as well as list of properties which he, his wife or his children owned---All said information would be placed in the shape of an affidavit to be sworn by the judgment-debtor within specified period---Financial Institution would be fully entitled to confirm the genuineness of such affidavit and in case it was subsequently found that Judgment-debtor had concealed his properties or financial resources from which decree could have been satisfied the Executing Court would be free to pass order in term of S.55, C.P.C. and order his arrest.

Rana Azim-ul-Hasan Azeem and Younis Inayat for Appellant.

Ms. Shamim Naz for Respondents.

2009 C L D 460

[Karachi]

Before Mrs. Qaiser Iqbal and Syed Mehmood Alam Rizvi, JJ

QAMARUZAAMAN KHAN----Appellant

Versus

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN and others----Respondents

H.C.As. Nos.7, 8, 18 and 22 of 2007, decided on 15th October, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (LXVI of 2001)---

----Ss.9 & 10---Suit for recovery of loan amount---Application for leave to defend suit---Plea of defendants was that mortgage documents regarding suit property were forged as their predecessor was not alive at the time of sanction of loan and execution of documents---Defendants in their separate applications averred three conflicting dates of death of their predecessor---Effect---Date of death of defendants' predecessor being a bona fide question going to the root of the case, could not be resolved without recording of evidence--Applications for leave to defend suit were accepted in circumstances---Principles.

2006 YLR 2477; 2002 YLR 2706; 2002 YLR 2655; 1990 CLC 1443; 1989 SCMR 704; 2003 CLC Lah. 1743; 2002 CLD Lah. 876; 20041 CLD 771 Lah.; 2005 CLD 444; PLD 1988 Kar. 316; 2001 CLC 1551; PLD 1999 Kar. 196; 2001 MLD 1351; 2001 YLR 1549; AIR 1971 Del. 316; PLD 1987 Kar. 518; AIR 1934 Mad. 67 and PLD 1985 SC 1416 ref.

(b) Banker and customer---

----Rescheduling of loan---Effect---Subsequent agreement in absence of mention or reference to previous agreement would not change previous agreement---Loan once rescheduled would carry interest---Mark-up could not be charged upon mark-up in case of recovery of loan under previous agreement---Principle.

Jamslied Malik, Salahuddin Ahmed, Zia Kiyani and Nadeem Akhtar for Appellants.

Khalid Mehmood Siddiqiui and Aziz-ur-Rehman for Respondent No. 1.

M. Salim Mangrio for Respondent No.10.

2009 C L D 472

[Karachi]

Before Syed Pir Ali Shah, J

Major (R) ABDUL RAUF KHAN and another---Plaintiffs

Versus

GULF AIR LINE KINGDOM OF BAHRAIN through Country Manager and another---Defendants

Suit No.777 of 2005, decided on 22nd December, 2008:

Carriage by Air (International Convention) Act (IX of 1988)---

----S.22---Wrong by airline---Damages---Proof---Plaintiffs sought recovery of U.S. $ 100 million from airline for not taking them to their destination as per confirm tickets and for humiliating and mishandling them---Validity---Lucrative damages were to be proved by way of necessary documentary as well as oral evidence---Documentary evidence produced on record was to the effect that plaintiffs had travelled through defendant airline and during their stay at Abu Dhabi they were humiliated and mishandled---In such situation, damages could be assessed tentatively without measuring the same in air, because question could arise as to why US.$ 100 million only and why not 200, 300, 400, 500 US $ and so on upwards---As such to the extent of US.$ 100 million was not much so far the respect of a person/human was concerned---High Court found it appropriate that plaintiff would be awarded damages/compensation for such an act on the part of defendants to the tune of US $ one million each of plaintiffs by defendants jointly---In their letters, defendants had not denied their liabilities and responsibilities, on the contrary they admitted their guilt and apologized and offered a sum of US $ 250 per head, which was mockery and did not serve the purpose---Suit was decreed accordingly.

PLD 2004 Kar. 439; 1996 CLC 627; PLD 1996 SC 737; PLD 1997 Kar. 566; 2002 CLC 96; 426 US 290 SC USA Newspaper Dawn SC India; News Paper Dawn High Court Sindh; PLD 1972 SC 25 and PLD 2004 SC 465 rel.

Mrs. Sheraz Iqbal Chaudhry for Plaintiffs.

Nazim Ali Khan for Defendants.

Date of hearing: 5th December, 2008.

2009 C L D 497

[Karachi]

Before Nadeem Azhar Siddiqi, J

SHAUKAT ALI---Petitioner

Versus

Messrs BAWANY SUGAR MILLS LTD. 4 others---Respondents

J. Miscellaneous No.12 of 2007, decided on 5th January, 2009.

Companies Ordinance (XLVII of 1984)---

----S. 290---Application for winding up of company---Maintainability---Held, it was a statutory requirement that a member or members of a company to be able to file a petition for winding up of a company on the ground of oppression and mismanagement must be holding at least twenty per cent of the issued share capital of the company otherwise the petition would not be maintainable---Filing of a winding up petition against a running company was not a matter which could be easily ignored; it affects the reputation of the company in the business circle and was not to be resorted to in a light manner---Principles.

Shaukat Ali v. Amin Fabrics Ltd. and others 2008 CLD 837 ref.

Petitioner in Person.

Naveed-ul-Haq for Respondents Nos.1, 4 and 5.

Nemo for other Respondents.

Date of hearing: 5th November, 2008.

2009 C L D 503

[Karachi]

Before Nadeem Azhar Siddiqi, J

Messrs PAK SUZUKI MOTOR CO. LTD. ---Plaintiff

Versus

MUHAMMAD JUMSHAD SAEED---Defendant

Suit No.373 of 2006, decided on 5th January, 2009.

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

----O.VII, R.2---Qanun-e-Shahadat (10 of 1984), Arts.117 & 120---Recovery of money---Proof of---Onus to prove---Defendant was dealer of plaintiff company and defaulted in payment on which plaintiff company filed suit for recovery of money from defendant---Validity---In order to discharge its burden of proof, plaintiff showed that it had provided goods on credit to defendant and defendant had failed to make payment against the same---Plaintiff produced sufficient material to show that goods were provided to defendant who had failed to settle the accounts---Plaintiffs witness produced dealership agreement, computerized statement of account, various sales invoices, delivery challans, balance confirmation and dishonoured cheques along with memorandum of bank, and such claims of plaintiff had gone unrebutted---Similarly affidavit in ex parte proof filed by plaintiff had also gone unrebutted as defendant neither cross-examined the witness of plaintiff nor produced his evidence in rebuttal---Dishonoured cheques issued by defendant also established that he was liable to pay amount to plaintiff thus plaintiff had proved its case and was entitled to relief prayed for---Suit was decreed in circumstances.

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

----S.6---Cheque---Scope---Cheque is a negotiable instrument and there is rebutable presumption that every negotiable instrument is made, drawn, accepted and endorsed for consideration.

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

----S. 20 & O.VII, R.2---Money suit---Territorial jurisdiction---Scope---Suit for recovery of amount can be instituted in a court in whose jurisdiction the cause of action, wholly or in part arises.

Muhammad Farooq for Plaintiff.

Nemo for Defendant.

Date of hearing: 23rd December, 2008.

2009 C L D 513

[Karachi]

Before Muhammad Athar Saeed and Arshad Noor Khan, JJ

UNITED BANK LTD.---Appellant

Versus

Mrs. JAMEELA MUMTAZ and 8 others---Respondents

Special H.C.A. No.272 of 2005, decided on 20th January, 2009.

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

----Ss. 19 & 15---Civil Procedure Code (V of 1908), S.73 & O.XXXIV, R.13---Sindh Chief Court Rules, R. 337---Karachi Port Trust Act (VI of 1886), S.46---Distinction between S.47 and O.XXXIV, R.13, C.P.C.---Execution of decree---Sale of mortgaged property---Several decree-holders-Application of proceeds---Preferential right of a decree-holder---Principles---Karachi Port Trust being one of the decree-holders whose rights had been protected and safeguarded by virtue of S.46, Karachi Port Trust Act, 1886 and decree being operative in favour of the Trust and the Trust also having been impleaded as party in the execution proceedings in view of R.337, Sindh Chief Court Rules and S. 73, C.P.C. whereas no such protection was available to the other decree holders, as such the Court had rightly given preference to the claim of Karachi Port Trust.

There is vast difference between section 73 and O.XXXIV, R.13, C.P.C. as by virtue of section 73, C.P.C. it is condition precedent that there must be more than one creditor who are required to file application in writing before the Court for execution of decree for payment of money awarded against the judgment-debtor and in view of fourth condition to clause (c) to section 73, C.P.0 the Court shall have to distribute rateably amongst the decree-holders who, prior to sale of the property, had applied to the Court who passed the decree, for its satisfaction whereas Rule 13 of Order XXXIV, C.P.C. does not speak about the proposition when there are more than one decree-holders, how the mortgage decree is to be executed. Thus the provision of section 73, C.P.C. provides complete code and method for satisfaction of money decree obtained by the different decree-holders to get it satisfied from the mortgage decree passed against the judgment debtor, in other suit after compliance of conditions enumerated in section 73, C.P.C. In the present case admittedly there were more than one decree-holders who possessed money decree in their favour passed in different suits by different courts and the 'court keeping in view the applicability of section 73, C.P.C. proceeded to determine the preferential right of the decree holder amongst several decree-holders and after pondering the relevant law in favour of the various decree-holders opined that Karachi Port Trust, in view of S.46 of Karachi Port Trust Act, 1886 had a preferential right to get the decree in its favour satisfied, being government dues.

Section 46 of the KPT Act, 1886 provides that for all the amount of tolls, dues, rates and charges leviable under this Act in respect of any goods, the Board shall have a lien on such goods, and shall be entitled to seize and detain the same until such tolls, dues, rates and charges are fully paid and for the amount of rent lawfully due on buildings, plinths, stacking areas and other premises, the property of the Board, and not paid after bills therefor have been duly preferred, the Board shall have all lien on all goods, therein or thereon, and shall be entitled to seize and detain the same, and that the lien for such tolls, dues, rates and charges shall have priority over all other liens and claims, except a lien for freight, primage and general average, where such lien has been preserved. Section 46 of Karachi Port Trust Act, 1886 therefore fully protects the right of the KPT including the right of recovery of the land and the outstanding dues of the rent including other claims have been protected by way of statute and creates charge over all the goods or the properties. Admittedly the money decree was operating in favour of the KPT, which being Government dues had created lien and charge over the mortgage decree involved in the present suit, in view of section 46 of the Karachi Port Trust Act, 1886 and KPT had been joined as party in execution proceedings. Court had rightly given preference to the claim of the KPT for the reasons that the other decree-holders and the bank had not pointed out any statutory protection in their favour.

It is also an admitted position that Karachi Port Trust was impleaded as a party on its written application in view of rule 337 of the Sindh Chief Court Rules which speaks about becoming a party in the execution application and admittedly the Bank/decree-holder was never impleaded as party in compliance of the Rule 337 as such the Banks had no preferential right against the right of the KPT and the Court rightly observed that the claim of the KPT had statutory protection in view of section 46 of KPT Act.

The right of the KPT being statutory had been safeguarded and protected by virtue of section 46 of Karachi Port Trust Act and the decree was also operating in their favour and also they had been impleaded as party in the execution proceedings, whereas no such statutory protection had been enlightened for the decree-holders/Bank nor they were impleaded as party in view of rule 337 of Sindh Chief Court Rules and section 73, C.P.C. as such, the Court had rightly given preference to the claim of KPT and there was no illegality or irregularity in the order.

Messrs United Bank Limited v. Muhammad Majeed alias Abdul Majeed, 1991 CLC 1102; Mst. Shanti v. Karachi Transport Corporation and others 2000 CLC 595 and Mst. Sooban Bibi v. Mst. Khatoon and others PLD 2001 Lah. 245 distinguished.

Messrs Industrial Development Bank of Pakistan v. Maida (Pvt.) Limited 1994 SCMR 2248; Oudh Commercial Bank Ltd. V. Secretary of State AIR 1935 Lah. 319(2); Messrs United Bank Limited v. Muhammad Majeed alias Abdul Majeed, 1991 CLC 1102; Mst. Shanti v. Karachi Transport Corporation and others 2000 CLC 595 and Mst. Sooban Bibi v. Mst. Khatoon and others PLD 2001 Lah. 245 ref.

Aziz-ur-Rehman for Appellant.

Safdar Mahmood for Respondent No.8.

2009 C L D 588

[Karachi]

Before Gulzar Ahmed, J

ASKARI COMMERCIAL BANK LTD.---Plaintiff

Versus

HILAL CORPORATION (PVT.) LTD. and 6 others---Defendants

Suit No.B-38, C.M.A. No.6788 of 2002 and C.M. No.9630 of 2005, decided on 14th February, 2007.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 9 & 18---State Bank of Pakistan BPD Circular No.29 of 2002 dated 15-10-2002---Suit for recovery of finances by Bank---Decision of State Bank of Pakistan Committee, implementation of---Defendant admittedly failed to contact the plaintiff/Bank for the implementation of the decision of State Bank of Pakistan Committee nor it had made the 10% down payment---Defendant had not adhered to the decision of the forum of its own choice and not only it was too late for asking for its implementation but the defendant apparently had not accepted the decision as it had given to the plaintiff/Bank a proposal not consistent with the decision of the State Bank of Pakistan Committee---Plea of implementation of the decision of Committee was repelled in circumstances.

2004 CLD 257; PLD 1997 SC 315; 2002 CLD 542; PLD 2002 SC 500; 2002 CLC 166 and PLD 1999 SC 1026 distinguished.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 18 & 9---Suit for recovery of loan by Bank---Contention of the defendant was that documents were obtained from him in blank---Validity---Held, in the first place said documents were saved in terms of S.18(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and secondly that right to complete an inchoate document was statutory right without any restriction and could be completed within a reasonable time.

Messrs United Bank Ltd. v. President, Bazm-e-Salat PLD1986 Kar. 464; Habib Bank Ltd. v. Waheed Textile Mills PLD 1989 Kar. 371 and Messrs Bank of Oman Ltd. v. Messrs East Asia Trading Company Ltd. 1987 CLC 288 ref.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 18 & 9---Suit for recovery of finances by Bank---Matter related to non-giving of notice of dishonouring of foreign bills and non filing of their copies by the Bank---Defendants had not disputed that it had negotiated foreign bills with the Bank and that foreign bills were dishonoured and not paid to the Bank---Effect---Held, had the defendant disputed such facts the burden would have been upon the Bank to prove the fact of dishonouring the bills by filing the notice of dishonouring so also the bills---Such being not the case, contention of the defendant had no force.

2003 CLD 1370; 2001 CLC 1172; 2002 MLD 1332; PLD 1997 Kar. 62; 2005 CLD 444; PLD 1998 Kar. 302; 2005 CLD 373; 2006 CLD 1678; 2005 CLD 833; PLD 2001 Kar. 264; 2004 CLD 385; 2003 CLD 1007; 2002 CLD 276; PLD 1963 SC 163; PLD 1999 Kar. 398; PLD 1984 Kar. 257; 1975 SCMR 393; 2004 CLD 110 and 2001 YLR 1244 distinguished.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 18 & 9---Suit for recovery of finances by Bank---Matter related to Bank statements and the allegation that mark-up had been charged over the mark-up---Defendants had not disputed any of the entries contained in the statements of account filed with the plaint and even otherwise Bank's Counsel had taken the court through the contents of the plaint and annexures filed with it which showed the outstanding amount against the defendant as a buy back price in terms of agreement between the parties---Contention of defendant's counsel that a Chartered Accountant be appointed to verify the accounts apparently was of no significance in view of the fact that liability to the extent of the amount as outstanding seemed to be admitted as none of the documents filed with the plaint were disputed.

Arshad Tayabaly for Plaintiff.

Raja Qasit Nawaz for Defendants.

Date of hearing: 14th February, 2007

2009 C L D 605

[Karachi]

Before Muneeb Ahmad Khan and Syed Pir Ali Shah, JJ

ALI TEXTILE MILLS LTD. (JHANG)---Appellant

Versus

BUSINESS AND INDUSTRIAL INSURANCE CO. LTD. and another ---Respondents

M.A. No.1 of 2002, decided on 7th February, 2008.

Insurance Act (IV of 1938)---

----Ss. 47-B(2) & 110---Limitation Act (IX of 1908), Art.86(b)--Insurance claim---Limitation---Starting point of---Out of total verified claim, 8090 claim was paid by Insurance Company to the claimant in October 1997, while 20% was refused on the plea that said 20% insurance claim was not payable by the company---Counsel for claimant had contended that refusal in respect of 20% claim having come to the knowledge of the claimant only in October 1997, limitation in that respect was to be counted from that point of time---Claim of claimant was referred to the Surveyor which remained pending with him from 1992 to 1997 but entire claim was not paid by the company on the ground that 20% out of it was not payable by the company to be and it paid only 80%--After refusal of claim of 20% in such circumstances, was to be counted from the date of refusal as prior to that claimant was not aware as to what quantum of claim was going to be approved by Surveyor or paid by the company---Settlement Board, instead of realizing the date of refusal of 20% claim had rejected on the ground that since it pertained to the year 1992, same was time barred---Record showed that Settlement Board had not turned down the entitlement of the claimant and the Surveyor had also approved the entire claim, but it was the Insurance company, who turned down 20% claim on technical point that it was not its liability, but such contention had not been acceded to by the Settlement Board---Counting the limitation period from date of refusal in October 1997 in respect of 20% claim, application of claimant before the Settlement Board in August 2000 was well within time of three years as prescribed under Art.86(b) of Limitation Act, 1908---Claim thus could not be turned down on the ground of limitation---Allowing appeal, High Court set aside impugned order to the extent of limitation with direction to Insurance company to pay to the remaining 20% with benefit of S.47-B(2) of Insurance Act, 1938.

Muhammad Saleem Thepdawala for Appellant.

2009 C L D 616

[Karachi]

Before Zafar Ahmed Khan Sherwani, J

M. AYUB---Plaintiff

Versus

FEDERATION OF THE ISLAMIC REPUBLIC OF PAKISTAN through Secretary, Ministry of Commerce, Government of Pakistan and 2 others---Defendants

Suit No.1714 of 1997, decided on 27th January, 2009.

(a) Contract Act (IX of 1872)---

----S.73---Breach of obligation by Export Promotion Bureau---Suit for damages with future mark-up till its realization---Quota for export of goods for relevant year purchased by plaintiff from open market according to legally permissible practice---Mentioning of such quota in plaintiffs Pass Book by Export Promotion Bureau---Application form submitted to Bureau for transferring such quota in favour of another company---Non-authentication of such transfer by the Bureau before expiry of quota period-Plaintiff s claim against Bureau for depriving him of his finance and legitimate right to earn profit thereon---Validity---If Export Promotion Bureau had any objection on such transfer, then plaintiff must have been intimated immediately---Bureau had failed to perform their obligation by non-authenticating such transfer and non-replying same immediately---Plaintiffs' quota had expired at the end of relevant year due to such inaction of the Bureau---Plaintiff had been injured on account of breach of obligation created by contract---Suit was decreed accordingly.

(b) Contract Act (IX of 1872)---

----S. 73---Suit for grant of compensation for loss allegedly caused by breach of charter of obligations by defendant---Scope---If defendant had not committed any act in violation of such charter, then he could not be penalized to pay damages for loss sustained by plaintiff for his own act of negligence.

Salahuddin Ahmed for Plaintiff.

S. Afsar Ali Abidi for Defendants.

Date of hearing: 14th January, 2009.

2009 C L D 629

[Karachi]

Before Munib Ahmad Khan and Bin Yamin, JJ

UNITED BANK LTD. ---Appellant

Versus

MUHAMMAD NASEEM QURESHI---Respondent

I.As. Nos. 105 and 106 of 2001, decided on 6th February, 2009.

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

---Ss.2 (d)(f) & 9---Banker and customer, relationship of---Proof---Fraudulent amount, recovery of---Defendant was an employee of bank against whom bank filed suit for recovery of amount withdrawn by him fraudulently which suit was dismissed by Banking Court---Plea raised by bank was that even fraudulent actions of employees or any person out of banking system fell within the jurisdiction of Banking Court---Validity---Overdraft facility was not a voluntary facility by bank nor there was permission or condition nor any interest rate while according to bank itself it was obtained by fraud and fraud could not be an element with the business of banking system---Availing of such facility by defendant was out of legal business transaction for which criminal case had been filed---High Court declined to interfere with the judgment passed by Banking Court as the same was plausible and just---Appeal was dismissed in circumstances.

Hyder Raza Naqvi for Appellant.

Nemo for Respondent.

Date of hearing: 6th February, 2009.

2009 C L D 634

[Karachi]

Before Munib Ahmed Khan and Bin Yamin, JJ

UNITED BANK LTD. ---Appellant

Versus

MUHAMMAD SADIQ---Respondent

I. A. No. 107 of 2001, decided on 6th February, 2009.

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

---Ss.2 (d)(f) & 9---Relationship of customer and bank---Proof--Fraudulent amount, recovery of---Defendant was an employee of bank against whom bank filed suit for recovery of amount withdrawn by him fraudulently which suit was dismissed by Banking Court---Validity---Overdraft facility claimed by bank was actually not overdraft facility but was an amount which had been obtained through fraud by employee, for which a criminal complaint had been filed by bank---Amount which had been obtained by fraud was not obtained under banking system nor it could be considered as a loan, nor the person who had obtained such amount could be termed as a customer---High Court declined to interfere with the judgment passed by Banking Court--Appeal was dismissed in circumstances.

Hyder Raza Naqvi for Appellant.

Nemo for Respondent.

Date of hearing: 6th February, 2009.

2009 C L D 641

[Karachi]

Before Amir Hani Muslim, J

NATIONAL BANK OF PAKISTAN ---Plaintiff

Versus

SPECTRUM FISHERIES LTD. and 11 others---Defendants

Suit No.B-8 and C.M.A. No.3857 of 2006, decided on 14th November, 2008.

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

----Ss. 9 & 10---Suit for recovery of loan---Leave to defend suit---Chartered Accountant Finn was appointed as Commissioner to scrutinize the accounts of the parties---Plaintiff Bank and defendant company, would provide the entire record pertaining to the loans to said Commissioner who would scrutinize the record to ascertain loans and payments made by defendant company including the mark-up calculated on the said loans---Said Commissioner would furnish a detailed report of accounts reflecting the outstanding amounts against the defendants as it was claimed by the counsel of the defendants that loans were disbursed, but the complete statement of accounts had not been filed---Defendants had further submitted that the plaintiff Bank had calculated compound mark-up, which the law did not permit---Counsel for the plaintiff on the other hand had submitted that the loans were disbursed at time, but not a single penny had been paid by the defendant company---Commissioner would examine and scrutinize the account books and/or record of the parties in the light of said contentions---Application for leave to defend was dismissed.

Jam Asif Mehmood for Plaintiff.

Ahmed Hassan Rana for Defendants Nos. 1 to 9.

Abdul Shakoor holding brief of Muhammad Rashid Khan for Defendant No.11.

Ms. Sofia Saeed Shah for Defendant No.12.

2009 C L D 643

[Karachi]

Before Syed Pir Ali Shah, J

NAJEEB FIBRES (PVT.) LTD.---Petitioner

Versus

TANYA KNITWEAR (PVT.), LTD.---Respondent

J.M. No.25 of 2007, decided on 8th July, 2008.

Companies Ordinance (XLVII of 1980--

----Ss.305 & 309---Winding up of company, petition for---Closure of operations by the company since long--Auditor's report showing an outstanding amount of Rs.2 million against the company---High Court accepted such petition.

Arjumand Khan for Petitioner.

Muhammad Sarfraz, Company Secretary of Tanya Knitwear (Pvt.) Ltd. for Respondent.

Date of hearing: 25th April, 2008.

2009 C L D 655

[Karachi]

Before Khilji Arif Hussain and Bin Yamin, JJ

ABDUL GHAFFAR ADAMJEE---Appellant

Versus

MUSLIM COMMERCIAL BANK LTD.---Respondent

High Court Appeal No.154 of 1999, decided on 10th October, 2008.

(a) Contract Act (IX of 1872)---

----S.128---Liability of surety was co-extensive with that' of principal debtor.

Messrs Abdul Aziz Ramzan Valli and others v. Habib Bank Limited 2000 SCMR 95 and Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd., 2002 SCMR 1419 ref.

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

----S.9---Suit for recovery of loan amount-Leave to defend suit, application for---Plea of defendant that his signature on reverse page of guarantee was not in his personal capacity, but was as Managing Director for and on behalf of principal borrower company---Validity---Status of defendant's signature was not clear---Determination of such plea would require evidence-- While granting leave to defend suit, legislature had not attached any condition on exercise of discretion of Banking Court provided a serious and bona fide dispute was raised by defendant---Defendant was granted unconditional leave to defend suit.

Agrofoster (Pvt.) Ltd. and 2 others v. Judge, Banking Court No.5, Karachi, PLD 1999 Kar. 398 rel.

Muhammad Ali Enterprises v. Special Banking Court No.III and another, 2005 CLD 521 ref.

Habib Bank Limited v. Cargo Dispatch Co. Ltd. and 4 others, 1987 CLC 1002 distinguished.

Muhammad Akram Shaikh for Appellant.

Rizwan Ahmed Shaikh for Respondent.

Date of hearing: 17th September, 2008.

2009 C L D 661

[Karachi]

Before Mrs. Qaisar Iqbal and Syed Mahmood Alam Rizvi, JJ

AMEEN RIAZ and another---Appellants

Versus

ALZAMIN LEASING MODARBA and another---Respondents

First Appeal No.17 of 2008, decided on 23rd October, 2008.

(a) Interpretation of statutes---

----Words used by legislature would be read and understood in plain and ordinary meanings.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---Preamble-Object of the Ordinance---Providing machinery for expeditious recovery of money was sole object of Financial Institutions (Recovery of Finances) Ordinance, 2001.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9(5), 10(2) & 12---Ex parte decree, setting aside of, application for---Publication of notice of suit in newspaper on 16-6-2007---Plea of defendant that he received notice of suit from Banking Court on 10-7-2007---Validity---Defendant had been served through such advertisement, thus, he ought to have filed leave application within thirty days i.e. on or before 19-7-2007---Ex parte decree was maintained in circumstances.

Khaleeq Ahmed for Appellants.

Sumeera Usto for Respondents.

2009 C L D 665

[Karachi]

Before Khalid Ali Z. Qazi, J

M.A. KAREEM IQBAL---Plaintiff

Versus

HABIB BANK LIMITED---Defendant

Suit No.190 of 2004, decided on 3rd December, 2008.

(a) Limitation Act (IX of 1908)---

----Art.23---Damages for malicious prosecution, suit for---Limitation---Defamation and mental torture allegedly to be caused to plaintiff by issuance of defendant's legal notice on 11-7-2001 and publication of summons issued against him in September, 2001 in suit filed by defendant for recovery of money---Dismissal of defendant's suit to extent of plaintiff by Appellate Court on 23-12-2003---Suit for damages filed by plaintiff on 27-2-2004---Validity---Such judgment of Appellate Court for not having been challenged by defendant within prescribed time had attained finality---Period of one year prescribed in Art. 23 of Limitation Act, 1908 would start from 23-12-2003---Plaintiffs suit filed on 27-2-2004 was not barred by limitation.

(b) Tort---

----Suit for damages for malicious prosecution, defamation and mental torture---Previous suit by defendant-Bank for recovery of loan amount from plaintiff and others---Plaintiffs claim against Bank after dismissal of previous suit to his extent by Appellate Court---Proof---Plaintiff by filing written statement in previous suit had denied execution of any loan document and his liability to pay any amount to Bank---Bank neither could shake evidence of plaintiff in cross-examination nor did produce evidence to disprove plaintiffs claim---Bank in previous suit had failed to produce any evidence connecting plaintiff with availing of loan, which remained unpaid---Plaintiff was neither borrower or customer of bank nor had committed any default in fulfilling an obligation touching business of loan or finance---Bank had prosecuted plaintiff f without reasonable and probable cause, and prosecution had ended in his favour---Plaintiff had been defamed on account of issuance of such legal notice and publication of summons of Banking Court in newspapers---Allegations levelled against plaintiff in recover suit by Bank were serious in nature also containing threat to initiate criminal proceedings against him---Such allegations had lowered reputation of plaintiff in estimation of others and could be treated as malicious---Plaintiff had suffered immense legal injury for contesting false and malicious previous suit---Plaintiff was entitled to damages claimed by him in plaint---Suit was decreed in circumstances.

Farukh Saeed Khan v. Anisur Rehman Bhatti 2006 CLC 440; Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28; Niaz and others v. Abdul Sattar and others PLD 2006 SC 432; United Bank v. Raja Ghulam Hussain 1999 SCMR 343; Abdul Rauf v. Abdul Razaq and another PLD 1994 SC 476; Raja Braja Sunder Deb v. Bandeb Das AIR 1944 PC 1; Balbabddar Singh v. Badari Sah AIR 1926 PC 46; Abdul Shakoor v. Lipton AIR 1924 Lah. 1; Noor Khan v. Fiwandas AIR 1927 Lah. 120; V.T. Strinivasa Fhathachariar v. Thirunvendat Achariar AIR 1932 Mad. 601; Muhammad Bashir v. The State PLD 1982 SC 139; Muhammad Yousaf v. Syed Ghayyur Hussain Shah and others, 1993 SCMR 1185; Abdul Wahab Abbasi v. Gul Muhammad Hajano PLD 2008 Kar. 558; Abdul Chafoor v. Riaz Ahmed 2007 YLR 3089; United Bank Ltd. v. Mian Ahmed Hassan 2006 CLD 255; Muzammil Shah v. The State 2006 YLR 1431; Mian Nazeer Ahmed v. WAPDA 2006 YLR 816; Riaz Ahmed v. I.G. of Police and others 2006 MLD 1093; Azizullah v. Jawaid .4. Bajwa 2005 SCMR 1950; Munir Ahmed v. Mst. Fazalan and others 2005 MLD 690; Aalia Khattak v. Muslim Commercial Bank, 2005 CLD 99; Shah Wall v. Muhammad Iqbal, PLD 2005 Lah.214; Akbar Khan v. Musam Khan, 2004 CLC 1244; Malik Khadim Hussain v. Haq Nawaz, 2004 CLC 184; Muhammad Hanif v. Muhammad Bashir and others, 2004 YLR 173; Mian Muhammad Anwer Khurshid v. Muhammad Yasin and another, 2003 MLD 1485; WAPDA v. Muhammad Yaqoob, 2003 MLD 1145; Ameeruddin v. Fazalur Rehim Khan, 2003 YLR 136 and Khurshid Iqbal v. Allied Bank of Pakistan and 2 others, PLD 2003 AJK 1 ref.

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

---O.XIII, R.4---Qanun-e-Shahadat (10 of 1984), Art.78---Receipt issued by payee for amount received from payer---Such receipt produced in evidence by payer without examining its author (payee)---Held: payer had failed to prove amount paid to payee through such receipt---Illustration.

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

---O.VIII, R.1---Qanun-e-Shahadat (10 of 1984), Arts.117 & 118---Defamation---Damages, suit for---Denial of plaintiffs claim in written statement of defendant---Statements of plaintiffs witnesses not shaken in cross-examination by defendant---Non­production of evidence by defendant---Effect---Burden lay on defendant to prove that defamatory actions/statements were untrue---Court declined to consider defendant's written statement in circumstances.

(e) Tort---

----Damages for defamation, suit for-Proof-Defamatory matter, unless proved to be true, would be presumed to be false---Matter would be presumed to be defamatory, if same exposes plaintiff to hatred, ridicule or tends to injure him in his profession or trade or in community.

(f) Tort---

----Defamation---General damages, grant of---Criteria stated.

There is no hard and fast rule to grant general damages and there is also no yardstick to measure the same. The rule of award of general damages is that in the case of defamation, the conscience of Court should be satisfied that the damages awarded would, not completely and satisfactorily compensate the aggrieved party; and that the amount assessed must be compensatory in nature and not to appear punitive or exemplary.

The Court is itself competent to ascertain the question of damages keeping in view the circumstances of the case.

Abdul Wahab Abbasi v. Gul Muhammad Hajan PLD 2008 Kar. 558 and Pakistan Industrial Development Corporation v. Aziz Qureshi, PLD 1965 W.P. Kar. 202 ref.

Zaheer H. Minhas for Plaintiff.

Mansoorul Arfin for Defendant.

2009 C L D 682

[Karachi]

Before Azizullah M. Memon and Abdur Rehman Farooq Pirzada, JJ

Ms. SALMA IQBAL CHUNDRIGAR and others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Environmental Protection, Islamabad and others---Respondents

C.Ps. Nos.D-756 and D-2168 of 2008, decided on 27th February, 2009.

(a) Pakistan Environmental Protection Act (XXXIV of 1997)---

----S. 12(1)---Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000, Arts. 3, 4 & 5---Construction of flyover on an existing road---Nature---"Reconstruction" distinguishable from "construction"---Where the project is likely to cause an adverse environmental effect, then the EIA (Environmental Impact Assessment) has to be submitted by the proponent of a project and approval in respect thereof has to be obtained from the Government Agency, prior to the commencement of construction/operation of such project---Relevant provisions providing guidelines to determine as to which of the projects would require and IEE (Initial Environmental Examination) and EIA (Environmental Impact Assessment) are provided in Arts. 3, 4 & 5 of the Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000---Proponent of the project not falling in any of the categories listed in Schedules I & II of the said Regulations, it shall not he required to file an IEE or EIA---Serial No.D-2 of Schedule II of the Regulations is relevant for the purpose of determining if the proposed project would require the submission of EIA, as the same includes major roads (except maintenance, rebuilding or reconstruction of existing roads) with total cost of Rs.50 million and above---Construction of flyover however, does not jail within the category of "reconstruction" of existing road and as such is not covered by the exception clause--`Reconstruction"---Connotation---Reconstruction is distinct and distinguishable .from construction---In the present case, looking at the nature and dimensions of flyover project, the same is altogether "construction" of a new road, and does have nothing to do with the construction, maintenance or rebuilding of an existing road---Project of flyover hence, falls within the ambit of Schedule II of the Regulations which would necessitate the submission of Environmental Impact Assessment (EIA).

Black's Law Dictionary, Seventh Edition and Sumaira Awan, Secretary General v. Government of Pakistan and 10 others 2008 CLD 1185 ref.

(b) Words and phrases---

----Reconstruction-Definition.

Black's Law Dictionary, Seventh Edition ref.

(c) Pakistan Environmental Protection Act (XXXIV of 1997)---

----Ss. 12, 17, 20, 21 & 22---Framework governing the construction of any project having environmental impacts and legal consequences following any violation of the given provisions in Pakistan Environmental Protection Act, 1997---In case of any violation the law has to take its own course and the proper proceedings may be initiated by any aggrieved person before the Environmental Magistrate or Environmental Tribunal which are properly functioning, if necessary, under the law.

(d) Pakistan Environmental Protection Act (XXXIV of 1997)---

----S.12---Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000, Arts. 3, 4 & 5---Constitution of Pakistan (1973), Arts.199, 4, 5, 9, 14 & 25---Constitutional petition---Contentions of the petitioners (residents of the area) were that construction of flyover on an existing road was unlawful, illegal, ultra vires and unconstitutional being in violation of the constitutional and legal rights of the petitioners (residents of the area) and respondents be restrained from doing further construction---Validity---Held, undoubtedly the proposed project had been initiated in the interest of general public; the population and traffic congestion were rapidly increasing every day; alternate roods/flyovers were necessarily required, in order to ease the congestion and heavy traffic in densely populated areas of the city; admittedly, the site of the project was situated in a thickly populated area, facing congestion due to shops and heavy traffic as such the need for alternate flyover/road could not be ignored; besides, huge expenses had been incurred by the Housing Authority on a project which was for the ultimate benefit of the people---High Court, in circumstances, declined to order for stopping the construction process of the said project and directed the Housing Authority to undertake the submission of EIA after properly inviting objections, If any, from the residents of the area, strictly in accordance with the provisions of S.12 of the Pakistan Environmental Protection Act, 1997 as will as the relevant provisions of Pakistan Environmental Protection Agency (Review of IEE and EIA) Regulations, 2000 and in case of any negative findings in the same, EIA, the Housing Authority shall be liable to any legal consequences, besides being liable to make suitable compensation to any affected person, strictly, in accordance with the relevant provisions of law.

Omer Soomro along with Muhammad Adnan for Petitioners (in C.P. No.D-756 of 2008).

Chaudhry Abdul Rasheed along with Arshad Lodhi for Petitioners (in C.P. No.D-2168 of 2008).

Ashraf Ali Butt for Respondent No. 4 (in C.P. No.D-756 of 2008) and Respondent No.5 (in C.P. No.D-2168 of 2008).

Khalid Javed for Respondent No. 5 (in C.P. No.D-756 of 2008) and Respondent No.2 (in C.P. No.D-2168 of 2008).

Manzoor Ahmed for Respondent No. 7 (in C.P. No.D-756 of 2008) and Respondent No.3 (in C.P. No.D-2168 of 2008).

Ms. Afshan Aman for Respondent No.6 (in C.P. No.D-756 of 2008) and Respondent.No.4 (in C.P. No.D-2168 of 2008).

Salman Talibuddin for Respondent No. 8 (in C.P. No.D-756 of 2008) and Respondent No.6 (in C.P. No.D-2168 of 2008).

2009 C L D 705

[Karachi]

Before Syed Pir Ali Shah, J

AZMAT TEXTILE MILLS---Plaintiff

Versus

NDLC IFIC---Defendant

Suits Nos.B-21 and B-22 of 2003, decided 'on 9th July, 2008.

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

----S.10---Leave to defend suit, application for---Defendant's objections were that suit by plaintiff-foreign Bank not incorporated under Companies Ordinance, 1984 filed by its Karachi Branch was not competent as licence issued to plaintiff by State Bank of Pakistan for establishment of Bank in Pakistan was subject to fulfilment of certain conditions, which had not been fulfilled, thus, plaintiff could not be termed a "Financial Institution" for purposes of Financial Institutions (Recovery of Finances) Ordinance, 2001; that Karachi Branch of plaintiff being a distinct entity was not liable for any commitment of its foreign Head Office; that no cause of action accrued in Karachi or elsewhere in Pakistan; and that plaintiffs claim was time barred and hit by principle of res judicata---Validity---Such objections could be decided after framing of issues and recording of evidence---Prayer in suit for attachment of assets and securities of defendant and mark-up from date of suit till realization, could not be disposed of summarily---High Court allowed application for leave to defend suit in circumstances.

2001 CLC 1172 and Province of Punjab v. Malik Ibrahim & Sons 2000 SCMR 1172 ref.

Kamal Azfar for Plaintiffs.

Aziz-ur-Rehman for Defendants.

2009 C L D 710

[Karachi]

Before Munib Ahmed Khan and Dr. Rana M. Shamim, JJ

Mst. GHAZALA HASSAN and another---Petitioners

Versus

CITY DISTRICT GOVERNMENT, KARACHI through City Nazim and 3 others---Respondents

Constitutional Petitions Nos.D-1259, 1443, 1126, 1255 of 2007 and 1906 of 2006, decided on 7th December, 2007, Oil and Gas Regulatory Ordinance (XVII of 2002)---

----S.6---Compressed Natural Gas (C.N.G.) (Production and Marketing) Rules, 1992---Karachi Building and Town Planning Regulations, 2002---Constitution of Pakistan (1973), Art.199---Constitutional petition---C.N.G. filling station in residential area, installation of---Petition raising questions of public safety and tranquility vis-a-vis location and use of such stations in Karachi---Non-availing remedy available to petitioner under Oil and Gas Regulatory Authority Ordinance, 2002 and Karachi Building and Town Planning Regulations, 2002---Validity---Petition involved questions of technical expertise---Effect---High Court directed petitioner to approach competent authorities under Oil and Gas Regulatory Ordinance, 2002 and Karachi Building and Town Planning Regulations, 2002 by filing appeal/representation within seven days, who would decide such questions within specified time after keeping in view uniform policy prevailing in country, interest of people in surrounding and keeping in mind precautions and measure to be adopted---High Court further observed that question of limitation would not bar such appeal/representation for involving questions of public safety and tranquility.

Asad Iqbal Butt Present in Person (in C.P. No.1443 of 2007).

Iqbal Hussain, husband of the petitioner Present in Person (in C.P. No.1126 of 2007).

Nemo for Petitioner (in C.P. No.1255 of 2007).

Naveed Ahmed Khan for Petitioner (in C.P. No.1259 of 2007).

Nisar A. Mujahid and Ms. Saify Ali Khan for Petitioner (in C.P. No.1906 of 2006).

Zafar Hadi Shah for Respondent No.7 (in C.P. No.1443 of 2007).

Fida Muhammad Khan, Masroor Alvi holding brief for Abrar Hassan for Respondents Nos.5 to 7.

Muhammad Shall Siddiqui for Respondent No.10 (in C.P. No.1255 of 2007) and for Respondent No.5 (in C.P. No.1906 of 2006).

Iqbal Ahmed and Fazal-ur-Rehman for Respondents Nos.2 and 9 (in C.P. No.1255 of 2007).

Neel Keshov along with Zulfiqar Ali Mirajt for Respondent No.4 (in C.P. No.1259 of 2007).

Rizwan Ahmed Siddiqui, D.A.-G. for Federation of Pakistan.

Agha Zafir, A.A.-G. for Province of Sindh.

Manzoor Ahmed along with Zafar Ahmed Khan for City District Government Karachi.

2009 C L D 713

[Karachi]

Before Shabbir Ahmed and Gulzar Ahmed, JJ

MAJID and others---Petitioners

Versus

QUALITY STEEL WORKS LIMITED and 3 others---Respondents

Constitutional Petition No.2274 of 1992, decided on 9th October, 2003.

Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance (V of 1970)---

----S.7-B(b), Second Proviso---Economic Reforms Order (1 of 1972), S.7-B---Acquisition of shares of associated company of nationalized company by government---Non-issuance of certificates of entitlement to compensation to ex-owners of associated company for same being indebted to nationalized company---Validity---Liability of associated company could not be transferred to members of holding company for both such companies being independent entities under law---Such owners were entitled to such compensation.

Muhammad Saleem Mangrio for Petitioners.

Asalm Butt for Respondent No.1.

Khalid Javed for Respondent No.2.

Nadeem Azhar Siddiqi, D.A.-G. for Respondent No.3.

2009 C L D 716

[Karachi]

Before Khilji Arif Hussain and Arshad Noor Khan, JJ

EXIDE PAKISTAN LTD. through Finance Director and Company Secretary---Appellant

Versus

Malik ABDUL WADOOD---Respondent

H.C.A. No.272 and C.M.A. No.1662 of 2008, decided on 20th February, 2009.

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

----S.54---Civil Procedure Code (V of 1908), O.XXXIX, Rr, 1 & 2---Contract Act (IX of 1872), S.16(3)---Suit for permanent injunction to restrain defendant from joining for two years another organization competitor in business with plaintiff---Application for temporary injunction by plaintiff-Plaintiffs, plea was that defendant joined plaintiff-company in year 1971 and resigned from service on 4-12-2007; that such restrictive covenant was contained in plaintiffs letter dated 12-6-2001 addressed to defendant informing him about increase in his salary; that plaintiff came to know in 3rd week of May, 2008 that defendant had joined an organization which was competitor in business with plaintiff---Defendant's plea was that said restrictive covenant was forged---Validity---Question, whether defendant had accepted restrictive covenant, could be decided only after recording of evidence---Any change in terms and conditions of service to the disadvantage of employee could not be made without his consent and while considering such change made after 35 years of service, principle of equality of bargaining would be looked into---Nothing was available on record to show that plaintiff had issued any letter to all its employees containing such restrictive covenant and had been accepted by them---Restrictive covenant, if for a reasonable time and area, where employee was asked not to indulge in activity, then Court could grant relief to restrain violation of covenant---Defendant during 35 years of service as sales representative could not be said to have acquired secret information about quality control formulated and developed by plaintiff---Except such letter, no other letter of increment issued to defendant earlier did contain such restrictive covenant---Defendant had denied to have consented to such restrictive covenant contained in such letter---Defendant had some information about dealers of plaintiff, who used to sell its products, which information could not be termed as secret information---Plaintiff on 1-1-2008 and 27-3-2008 had addressed letters to defendant at the address of competitive company joined by him---Plaintiff despite having knowledge about joining of defendant such competitive company since 1-1-2008 had not taken action to restrain him from violating restrictive covenant, but filed suit on 28-5-2008---Plaintiff on account of laches was not entitled for equitable relief of injunction---Plaintiff had failed to make out, a prima facie case---Balance of convenience did not lie in plaintiffs favour---Application for temporary injunction was dismissed in circumstances.

Hafeezullah Khan and two others v. Al-Haj Chaudhri Barkat Ali and 2 others PLD 1998 Kar. 274; Shri Gopal Paper Mills Ltd. v. Sunder K. Ghansham AIR 1962 Cal. 61; Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd. AIR 1967 SC 1098; Superintendence Company of India (P.) Ltd. v. Krishan Murgui AIR 1980 SC 1717 and Karnal Distillery Co. Ltd. and others v. Lodhi Parshad Jiswal and another AIR 1958 Punjab 190 ref.

(b) Contract Act (IX of 1872)---

----Ss.10 & 16---Contract of service---Change in terms and conditions of such contract---Scope---No such change could be made without consent of an employee---Principle of equality of bargaining would be looked into while considering any such change made after long service to the disadvantage of an employee.

(c) Specific Relief Act (I of 1877)---

----Ss.12 & 54---Specific performance of contract of service containing restrictive covenant against employee---Scope.

A restrictive covenant, if it is for a reasonable period of time and for a reasonable area where party was asked not to indulge in activity, then Court can grant relief to a party complaining violation of covenant. The Court has also to see while enforcing restrictive covenant that employee may take advantage of secret information which information he had acquired while discharging his duty and use same against the interest of employer.

Ms. Sana Akram Minhas for Appellant.

Abdul Qayyum Abbasi for Respondent.

2009 C L D 727

[Karachi]

Before Khilji Arif Hussain and Arshad Noor Khan, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN---Appellant

Versus

HYDERABAD BEVERAGES COMPANY (PVT.) LTD. and 2 others ---Respondent

H.C.A. No.287 of 2007, decided on 20th February, 2009.

Industrial Development Bank of Pakistan Ordinance (XXXI of 1961)---

----S.39---Contract: Act (IX of 1872), S.133---Suit for recovery of loan amount against principal borrower and guarantor---Attachment of property belonging to principal borrower---Bank's letter during pendency of suit addressed to defendants intimating them about approval of package by State Bank for rescheduling loan---Deposit of some amount by guarantor on behalf of principal borrower---Cancellation of such package by Bank on default in payment by defendants---Delivery of possession of attached property to principal borrower by Court with consent of Bank, but without consent of guarantor--Guarantor's application for absolving him from liability as guarantor on ground of variation in original loan agreement had been made without his consent---Validity---Guarantor, after rescheduling of loan had for several times requested principal borrower to clear his part of obligation or furnish other guarantee acceptable to Bank and relieve him from responsibility as guarantor---Guarantor had opposed principal borrower's application for de-sealing of attached property, but on Bank's instructions, its counsel had not opposed such application, over which possession thereof was handed over to principal borrower---Attached property was still in possession of principal borrower despite repeated objections of guarantor---Such conduct of Bank and principal borrower would tantamount to variation of terms and conditions of original loan agreement without consent of guarantor---Guarantor's application was accepted by absolving him from his liability under original loan agreement.

Agriculture Development Bank of Pakistan v. Pak Green Fertilizer Co: Ltd. 2000 MLD 1066; United Bank Ltd. v. Messrs Sarhad Ghee Mills Ltd. and others 1999 YLR 323; Messrs Platinum Insurance Co. Ltd. Karachi v. Daewoo Corporation Shaikhupura PLD 1999 SC 1; Mian Aftab A. Shaikh and others v. Trust Leading Corporation Ltd. and another 2003 CLD 702; Dr. M.A. Qadir Khan v. Bank of Bhawalpur Limited and another PLD 1984 Kar. 211 and United Bank Ltd. v. Sarhad Ghee Ltd. and others 1999 YLR 232 ref.

Dr. M.A. Qadir Khan v. Bank of Bhawalpur Limited and another PLD 1984 Kar. 211 rel.

Aziz-ur-Rehman for Appellant.

Abrar Hassan for Respondent No.6.

Ms. Syeda Kanwal for Respondents Nos. 1 to 4.

2009 C L D 735

[Karachi]

Before Zafar Ahmed Khan Sherwani, J

INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN through Secretary---Applicant

Versus

ABU BAKER BILWANI---Respondent

C.R. No.1 of 2006, heard on 6th February, 2009.

Chartered Accountants Ordinance (X of 1961)--

----Ss.3 & 20, Sched. II, Part-I, Cls. 6 & 7---Companies Ordinance (XLVII of 1984), Ss.255 & 260---Reference to High Court--Complaint of professional misconduct lodged against respondent by Security and Exchange Commission on report of its Inspection Team-Investigation Committee of Institute of Chartered Accountants finding respondent to be guilty of such charge--Recommendation of Council of Chartered Accountants debarring respondent from being member of Institute of Chartered Accountants for three years---Plea of respondent was that one member of such Inspection Team had been attending proceedings before such Committee and Council; and that he had filed suit for defamation against a member of Institute, which was later on compromised---Validity---According to provisions of Ss. 20-A to 20-F of Chartered Accountants Ordinance, 1961, such Committee and Council on receiving such complaint must have conducted investigation itself independently, fairly and justly, so that delinquent member might have confidence in both such bodies---Record showed that respondent's objection about neutrality of such Committee and Council had not been redressed---Council in its recommendation had not given any reason for imposing such a serious penalty---Propriety demanded that Council should have dilated upon misconduct vis-a-vis recommendation with proper reasoning---Such conduct of Council could not be termed as neutral, if viewed in the light of such allegation of respondent that Member of Inspection Team was instrumental to reference---Presence of such member of Inspection Team during proceedings before such Committee and Council had eroded confidence of respondent in them, thus, conclusion arrived at by them could not be accepted---Justice should not only be done, but should appear to have been done---Committee and Council had not conducted themselves in accordance with such basic principles of administration of ,justice---High Court dismissed reference in circumstances.

I.H. Zaidi for Applicant.

Respondent in Person.

Date of hearing: 6th February, 2009.

2009 C L D 740

[Karachi]

Before Azizullah M. Memon and Arshad Noor Khan, JJ

Syed WASEEM HUSSAIN---Petitioner

Versus

PAKISTAN EXPORT FINANCE GUARANTEE LIMITED and 2 others---Respondents

Constitutional Writ Petition No.D-1195 of 2007, decided on 22nd December, 2008.

Civil Procedure Code (V of 1908)---

----O. XLVII, R.1 & O.XLI, R.23---Review application---High Court, in constitutional petition in case of Syed Waseem Hussain v. Pakistan Export Finance Guarantee Limited reported as 2008 CLC 756, remanded the matter to Trial Court---Review application was filed by the petitioner before the High Court wherein counsel appearing for both the parties stated at the bar that review application may be disposed of by means of recording of the observation that any/all the observations as recorded in the order of remand for hearing of the case afresh, shall not affect the rights of any of the parties, and that the Trial Court shall not feel influenced by the same while deciding the case---High Court ordered accordingly.

Saalim Salam Ansari for Petitioner.

Naveed-ul-Haq for Respondent No 1.

Naveed Ahmed Khan for Respondent No.2.

2009 C L D 746

[Karachi]

Before Mrs. Qaiser Iqbal and Syed Mehmood Alam Rizvi, JJ

BERGER PAINTS PAKISTAN LTD.---Appellant

Versus

UNITED BANK LTD. and others---Respondents

First Appeal No.93 of 2006, decided on 26th March, 2008.

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

----S.19---Civil Procedure Code (V of 1908), Ss.63, 73, O. XXI, Rr.90, 92 & O. XXXIV, R.13---Proceedings for execution of two decrees pending before civil court and Banking Court---Decree of civil court in mortgage suit was prior in time to decree of Banking Court---Mortgaged property attached by civil court was subsequently auctioned by Banking Court--Application by holder of civil decree under Ss.63, 151 & O.XXI, R.90, C.P.C. for allowing him rateable share in sale proceeds of mortgaged property---Confirmation of sale by Banking Court in favour of auction-purchaser---Validity---Encumbrancer for protection of his right could apply and be joined in proceedings and could press his claim and claim priority, if any---None of claimants had taken steps or joined proceedings of sale---Inter se priority amongst claimants in appropriation of decretal amount could be claimed either on basis of jaw or contract---Banking Court while passing impugned order had violated provision of S.73, C.P.C. and mandatory provision of O.XXI, R.92 thereof---Banking Court prior to recording satisfaction of its own decree ought to have decided applicant's objection regarding rateable distribution of assets of judgment-debtor-High Court set aside impugned order and remanded case to Banking Court for distribution of sale proceeds amongst applicant and Bank on prorata basis.

Trust Modarba through its Trust Management Services v. Trust Leasing Corporation Limited and others PLD 2005 Lah. 5 and Pakistan Industrial Credit and Investment Corporation Limited, Peshawar Cantt. and others v. Government of Pakistan and others 2002 SCMR 496 ref.

Messrs Industrial Development Bank of Pakistan v. Messrs Maida Limited and others 1994 SCMR 2248 and Pakistan Industrial Credit and Investment Corporation Limited, Peshawar Cantt. and others v. Government of Pakistan through Collector Customs, Customs House, Jamrud Road Peshawar and others 2002 SCMR 496 rel.

Nazar Akbar for Appellant.

Aziz-ur-Rehrnan for Respondent No.1.

2009 C L D 751

[Karachi]

Before Amir Hani Muslim, J

SUI SOUTHERN GAS COMPANY LTD.---Plaintiff

Versus

HABIBULLAH COASTAL POWER COMPANY (PVT.) LTD.---Defendant

Suit No.1722 of 2008, decided on 3rd February, 2009.

Arbitration (Protocol Convention) Act (VI of 1937)---

----Ss.5 & 7---Foreign award---Suspension of proceedings---Scope---Award was announced against plaintiff-company and without filing of any appeal plaintiff sought suspension of enforceability of the award---Validity---Question as to whether arbitrators were justified in issuing direction to plaintiff to make payments to defendants was a question which was open to adjudication before proper forum in appeal---High Court while hearing application under S.5 of Arbitration (Protocol and Convention) Act, 1937, could not sit in appeal against award passed by arbitrators in terms of arrangement between the parties -Award had become final, the moment it was pronounced unless the party against whom such award was passed had preferred appeal and got the same set aside-Plaintiff -company did not have any cause of action to invoke jurisdiction of High Court under the provisions of Arbitration (Protocol and Convention) Act, 1937---Suit was dismissed in circumstances.

Marines Ltd. v. Aegus Shipping Co. Ltd. 1987 CLC 1299 and Hassanali & Co. v. Poly Cotton, S.A. PLD 1996 Kar. 416 distinguished.

Bilal A. Khawaja for Plaintiff.

Ijaz Ahmed for Defendant.

2009 C L D 779

[Karachi]

Before Gulzar Ahmed, J

AZRA SAEED---Plaintiff

Versus

RAEES KHAN through General Attorney and 5 others ---Defendants

Civil Suit No. Nil of 2008, decided on 28th February, 2009.

(a) Qanun-e-Shahadat (10 of 1984)---

----Art.95---Power of attorney executed in foreign country---Power of attorney not authenticated by High Commission of Pakistan in that country---Effect---No benefit could be given to attorney thereof.

(b) Specific Relief Act (I of 1877)---

----S.42---Transfer of Property Act (IV of 1882), S.54---Suit for declaration of ownership on basis of sale agreement---Validity---Such agreement itself would not create any interest or charge on property---Sale of immovable property of value of one hundred rupees and upwards could be made only by registered document---Such suit was not maintainable.

(c) Specific Relief Act (I of 1877)---

----S.42---Transfer of Property Act (IV of 1882), S.54---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss.19 & 23---Civil Procedure Code (V of 1908), O. VII, R.11---Suit for declaration of ownership on basis of sale agreement---Plea of defendant-Bank was that suit property was mortgaged with Bank and was subject-matter of decree under execution for recovery of loan amount from vendor-defendant; and that such agreement was void for being executed by vendor-defendant during pendency of execution of such decree---Validity---Vendor­ defendant had not yet cleared dues of Bank---Such agreement for being hit by provision of S.23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was void and of no legal effect---Plaintiff had not acquired any right in suit property to maintain such suit in terms of S. 42 of Specific Relief Act, 1977---Plaint in such suit was rejected for being not maintainable.

Fiaz H. Shah for Plaintiff.

S. Zaki Muhammad for Defendant No.3.

Abdul Majeed for Defendant No.5.

2009 C L D 805

[Karachi]

Before Faisal Arab, J

ESSA ENGINEERING INDUSTRIES (PVT.) LTD. through Authorized Signatory---Appellant

Versus

REGISTRAR OF TRADE MARKS and another---Respondents

M.A. No.3 of 2007, decided on 2nd March, 2009.

(a) Trade Marks Act (V of 1940)---

----Ss.8(a), 10(1) & 14(1)---Trade mark, registration of---Application in year 1991 for registration of such mark in. applicant's name claiming to have conceived same in year, 1988 and being in its use since then for marketing its products of oil, air and fuel filters---Notice of opposition by Japanese company on coming to know in January, 2004 about such mark advertised in Trade Mark Journal claiming to have developed same, in year 1960 and got same registered in 83 countries including Pakistan, where same was registered in 1963---Plea of applicant was that name of such company was not well known for products of such filters for not selling same, thus, question of association of consumers of applicant with products of such company would not arise---Validity---Mark applied for by applicant was identical copy of such company's mark--Adoption of such mark by applicant in same style and font was by itself misleading and would cause deception---Such mark was already in use of such company in Pakistan for its other goods---Dishonesty of applicant would be presumed as he had not established concurrent, long and honest user of such mark prior to its registration in name of such company---Foreign company upon noticing such advertisement had not remained silent, but had immediately filed its notice of opposition---Foreign company might not be presently selling identical goods in Pakistan, but products of applicant could be associated with that of foreign company, who might have built up a sizeable reputation and goodwill for its products in Pakistan by investing on advertisement of such mark-Applicant could not be allowed to trade by taking advantage of name, publicity and goods of foreign company's mark established over a period of time---Such application was rejected in circumstances.

PLD 1970 SC 460; 2004 CLD 315; PLD 1959 Dac. 41 and 1991 CLC 37 ref.

Cooper's Incorporated v. Pakistan General Store reported in 1981 SCMR 1039 and (1906) 23 RPC 774 rel.

(b) Trade Marks Act (V of 1940)---

----Ss. 8, 10 & 14---User for long time of a trade mark registered in someone else's name---Protection available to such user stated.

When the use of a registered make is not objected to for a considerable period of time and on account of such user, a party creates for itself a sizeable market only, then the registered owner of the mark cannot subsequently seek an order against such user. A person, who might have been using a mark prior to its registration in someone else's name, would be entitled to protection of the use of the mark.

(c) Administration of justice---

----No law encourages dishonesty.

(d) Trade Marks Act (V of 1940)---

----Ss.8(a), 10(1) & 14(1)---Application for registration of trade mark---Contest between applicant and registered owner of mark---Burden of proof---Burden to prove honest and innocent user would lie on applicant---Dishonesty of applicant would be presumed in case of his failure to discharge such burden---Principles.

The burden to establish honest and innocent user is on the party, which seeks to apply for the mark, which is already registered. In case, such a burden is not discharged, then dishonesty has to be assumed. In such circumstances, the plea that the applicant is using the mark for its goods, which are different from the goods of the registered owner, loses its significance.

Ms. Saira Shaikh for Appellant.

Saleem Ghulam Hussain for Respondent No.1.

Qamaruddin for Respondent No.2.

Date of hearing: 24th November, 2008.

2009 C L D 814

[Karachi]

Before Amir Hani Muslim, J

RETEX GLOBAL (PVT.) LTD. Through Chief Executive---Plaintiff

Versus

EXPORT PROCESSING ZONES AUTHORITY through Chairman and another---Defendants

Suits r1os.482 to 489 of 2008, decided on 16th January, 2009.

(a) Export Processing Zones Authority Ordinance (IV of 1980)---

----S.24--Arbitration Act (X of 1940), S.34---Specific Relief Act (I of 1877), S.42---Arbitration agreement, absence of---Stay of proceedings---Principle---In suits filed by plaintiffs, authorities sought stay of proceedings and referring the matter to arbitrator---Plea raised by plaintiffs was that there was no arbitration agreement between the parties, therefore, proceedings could not be stayed---Validity---Was not necessary that arbitration agreement was required to be executed in a formal document or any agreement must incorporate arbitration clause in it---No formal agreement of arbitration or agreement containing arbitration clause was necessary if such intent of parties was manifest from documents and or correspondence exchanged between theme-Was not necessary that an arbitration agreement was required to be reduced in writing and signed by parties---Documents signed by parties had reflected clear intention to refer dispute to arbitrator, which intention was manifest from the documents---Scheme for investment in industrial sector prepared by authorities was covered by S.24 (1) of Export Processing Zones Authority Ordinance, 1980---Plaintiffs on signing the document were to abide by rules and regulations framed contained in Export Processing Zones Authority Rules, 1981, and later on could not take a somersault to dispute application of arbitration---High Court stayed the proceedings of suit under S.34 of Arbitration Act, 1940---Application was allowed in circumstances. ?

Tribal Friends Co. v. Province of Balochistan 2002 SCMR 1903; Shamim Akhtar v. Najma Baqai and others PLD 1977 SC 644; Muhammad Hussain and others v. Ghulam Rasool and others 1983 SCMR 231; Cotton Factory v. Ali Muhammad Abdullah and Co. PLD 1966 Kar. 197; Province of Punjab v. Industrial Machine Tools, Lahore PLD 1978 Lah. 829 and Saleem Ali v. Akhtar Ali PLD 2004 Lah. 404 rel.

Uzin Export Import Foreign Trade Co. v. MacDonald Layton and Co. Ltd 1996 SCMR 690; Cosmopolitan Development Co. v. So DI.ME.-S.P.A. 1987 MLD 2832; Tradesmen International (Pvt.) Ltd. v. Federation of' Pakistan 2005 MLD 541; Arshad Ali v. Sarwat Ali Abbasi 1988 CLC 1350; Novelty Cinema Lyallpur v. Firdaus Films PLD 1958 (WP) Lah. 208; Gulf Iran Co. v. Pakistan Refinery Ltd. PLD 1976 Kar. 1060; MacDonald Lyton & Co. v. Associated Electrical Enterprises Ltd. PLD 1982 Kar. 786 and Collector of Sales Tax and Central Excise v. Mega Tech (Pvt.) Ltd. 2005 SCMR 1166 distinguished.

(b) Export Processing Zones Authority Ordinance (IV of 1980)---

----S.10---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), S.42---Interim injunction, grant of---Prima facie case, balance of convenience and irreparable loss---Proof---Plaintiffs were doing business on allotted plots and on account of circulars in question their business was likely to come to an end---Effect---Continuance of business would save plaintiffs from irreparable losses-Plaintiffs had made out a prima facie case and balance of convenience was also in their favour---Interim injunction was granted in circumstances. ?

Sana Minhas for Plaintiff.

Ali Mumtaz Shaikh for Defendant No.1.

2009 C L D 830

[Karachi]

Before Khiji Arif Hussain and Arshad Noor Khan, JJ

MUHAMMAD ASLAM MOTIWALA---Appellant

Versus

Messrs (DICE FOOD INDUSTRIES LTD.---Respondent

H.C.A. No.280 of 2004, decided on 13th March, 2009.

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

----S. 20, O. VII, R.10 & O.XXXVII, Rr.2 & 3---Suit for recovery of money on basis of cheques---Return of plaint by Court at place "K" for want of territorial jurisdiction---Validity---Plaintiff-company was running its business at place "K" through its Branch Office--Memo. of understanding between parties was signed at place "K"---Five cheques had been issued and passed on to plaintiff at place "K"---Three cheques drawn on Bank at place "K" showed there plaintiffs Bank Account---Two cheques had been drawn on Bank at place "I", but Bank at place "K" had informed plaintiff about its dishonouring by Bank at place "I"---Letter head of defendant was showing at its bottom address of their Branch Office at place "K"---Cause of action had also accrued to plaintiff at place "K", where defendant was running its business wholly or partly---Question of territorial jurisdiction would be decided on basis of case set up by plaintiff and not on basis of defence set up by defendant-Court at place "K" held, was competent to entertain and decide such suit---High Court set aside impugned order and remanded case to trial Court for its decision.

Messrs Brady and Company Pakistan Limited v. Syed Saigol Industries Limited 1981 SCMR 494 and National Investment Trust Ltd. v. Lawrencepur Woolen Textile Mills Ltd. 2002 CLD 527 rel.

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

----S. 21---Territorial jurisdiction of Court, question of---Proof---Such question would be decided only on basis of case made out by plaintiff, but not on basis of defence set up by defendant.

Erum Yaqoob for Appellant

Sardar Muhammad Yousaf for Respondent.

2009 C L D 844

[Karachi]

Before Mrs. Yasmin Abbasey and Dr. Rana M. Shamim, JJ

Messrs CHILTAN TRANSPORT COMPANY through Proprietor---Petitioner

Versus

Messrs ORIX LEASING PAKISTAN LTD. through Manager and another ---Respondents

Constitutional Petition No.D-827 of 2008, decided on 29th May, 2008.

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

----Ss.7 & 9---Constitution of Pakistan (1973), Art.199---Constitutional petition---Petitioner had assailed the alleged seizure of vehicle on account of non-payment of instalment against the financial facility provided to him by the Bank---Suit for recovery of the due amount had been filed by the Bank against the petitioner before the Banking Court; and during pendency of proceedings of said suit alleged act was said to have been committed---Proper forum for the petitioner, in circumstances, would be to approach Banking Court, same being the first available forum---Constitutional petition was dismissed.

Azizur Rehman Akhund for Petitioner.

Kumail Ahmed Shirazee for Respondent No. 1.

2009 C L D 853

[Karachi]

Before Sabihuddin Ahmed, C.J

DAWOOD HERCULES CHEMICAL LTD. ---Appellant

Versus

REGISTRATION OF TRADE MARKS and others---Respondents

Miscellaneous Appeal No.299 of 2003, heard on 9th October, 2008.

Trade Marks Act (V of 1940)---

----Ss.6(1)(e) & 76---Registration of trade mark---"Cheeta"---Objection to---Appeal had been directed against order- of Registrar Trade Marks, whereby appellant's opposition to registration of the trade mark "cheeta" and device was rejected---Case of the appellants appeared to be that they had been marketing identical product under the trade mark "Bubber Sher" along with device and had acquired a great deal of respect and credibility in the market for their quality---Appellant had alleged that, respondent by using a similar description "Cheeta" for identical goods were attempting to invade the goodwill of the appellants---No specific plea as regards similarity of the device used by the parties was raised--- "Bubber Sher" and "Cheeta" though belonged lo the same cat family, but appeared to be completely distinguishable both in terms of appearance, as well as the use of the two species in common parlance---In common parlance a "Bubber Sher" (Lion), had a particular appearance being a very heavy animal completely. different from other who might fall in the broad category of "Sher" i.e. a tiger, leopard, panther or a 'Cheeta'---No deception was likely to arise between the marks " Bubber Sher" and "Cheeta"---Appeal was dismissed.

Crescent Pencils Limited v. Indus Pencil Industries Limited 1989 CLC 2005 and Dawood Hercules v. Registrar Trade Marks 1991 CLC 2307 ref.

Ms. Amna Ahmad for Appellant.

Tanveer Ashraf for Respondent No.2.

2009 C L D 874

[Karachi]

Before Khawaja Naveed Ahmed, J

MUHAMMAD TARIQ QAZI and others---Petitioners

Versus

THE STATE---Respondent

Criminal Miscellaneous No.84 of 2007, decided on 2nd April, 2008.

Copyright Ordinance (XXXIV of 1962)---

----Ss.56/66/66-A, B, E/67 & 70 A---Criminal Procedure Code (V of 1898), S.561 A---Quashing of proceedings--Application for---Complainant; who was representative of the company had lodged F.I.R. alleging that his company was producing filter in the brand name of "Scheme" and that owner of the applicant company was doing the business of selling the fake product in the name of his (complainant) company---Police registered case against the applicant under Ss.56/66/66-A, B, E/67 & 70-A of Copyright Ordinance, 1962---Applicant moved an application under S.249 A, Cr.P.C. in the court of Judicial Magistrate on the sole ground that the Police had no jurisdiction in the case as the FTA had exclusive jurisdiction in dealing with the case---Magistrate having rejected application, applicant who could not succeed in the Trial Court, had invoked the inherent jurisdiction of High Court under S.561 A, Cr.P.C.---Standing Counsel had conceded to the legal position that jurisdiction under Copyright Ordinance, 1962 was vested with PTA and cognizance taken by the Police was illegal and beyond their jurisdiction---Counsel for State also conceded to that legal position---Without touching the merits of the case and without prejudice to the rights of the complainant to invoke the proper jurisdiction, High Court held that the cognizance taken. by the Police was without jurisdiction; and proceedings initiated by the Police without jurisdiction stood quashed; it was open for accused/applicants to initiate civil proceedings for claiming damages against the Police Officers, who had illegally taken cognizance without jurisdiction and had caused harassment and expenses to the applicants.

Re. Mian Hamza Shehbaz Sharif v. Federation of Pakistan and others P.Cr.LJ 1584 (Lah.); 1995 P.Cr.LJ 90; 1996 MLD 1874; PLD 1998 Kar. 226; 2002 MLD 746; Mira) Khan v. Gul Ahmed and 3 others 2000 SCMR 122; Mian Munir Ahmed v. the State 1985 SCMR 257 and State through Advocate General, N.-W.F.P. Peshawar and others v. Gulzar Muhammad and others 1998 SCMR 873 ref.

Ibad-ul-Hussain for Petitioners.

Ms. Shaheen Holding Brief for Nadeem Qureshi for the Complainant.

Sofia Saeed Shah, Standing Counsel.

Muhammad Bux Awan, State Counsel.

2009 C L D 880

[Karachi]

Before Faisal Arab, J

DELTA CLIMATE CONTROL AND ENGINEERING LTD. and others: In re

J.M. No.22 of 2007, decided on 24th September, 2007.

Companies Ordinance (XLVII of 1984)---

----Ss.284 & 287---Scheme of arrangement-Petitioners arrived had sought sanctioning of a scheme of arrangement between them whereby non-listed companies, were to merge into a public limited company---Under the scheme of arrangement, the entire undertakings of non-listed companies inclusive of their assets, liabilities and obligations of every description were to be transferred to and vested in the public limited company---Public limited company, in consideration of such transfer was required to issue 60 ordinary shares of Rs.10 each to non-listed companies' share-holders for the every 100 ordinary shares of Rs.10 held by them-Official Assignee submitted report of meeting---Neither any member nor creditor of the non-listed companies or public limited company raised any objection to the sanctioning of the scheme of arrangement i.e. transfer of all assets, liabilities and obligations of non-listed companies to public limited company---None of the members or the creditors had pointed out any prejudice that could he caused to them upon sanction of the scheme of arrangement by the court and adjustment of shares of the share-holders of the non-listed companies to the extent mentioned in the scheme---Security and Exchange Commission of Pakistan in its reply had also shown no reservation as to the sanctioning of the scheme of arrangement---Scheme of arrangement, as stated, was sanctioned by High Court, in circumstances.

Yousaf Saeed for Petitioners.

2009 C L D 899

[Karachi]

Before Khiji Arif Hussain and Dr. Qamaruddin Bohra, JJ

MUHAMMAD MOIN---Petitioner

Versus

STATE BANK OF PAKISTAN and others---Respondents

C.Ps. Nos.D-735, D-779, D-707, D-807, D-997, D-999, D-1131, D-1137, D-1180, D-1203, D-1206, D-1232, D-998, D-1207, D-1208, D-1215 and D-1667 of 2008, decided on 18th December, 2008.

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

----S.9---Constitution of Pakistan (1973), Art.199---Constitutional petition---Maintainability---Availing financial facility from the Bank---Default in payment of outstanding dues---Financial facilities granted by Bank were utilized by all the petitioners, but huge amounts were outstanding against them, which amounts, despite lapse of time, were not adjusted-Petitioners who were defaulters and failed to pay outstanding dues of various kinds of facilities/loans provided by the Bank to them, were attempting to avoid their liabilities---If there was any dispute in respect of charging of mark-up or interest over and above the agreement entered between the parties, petitioners' remedy lay before the Banking Court; and/or if there was any malpractice or any violation of Banking Laws, Rules, Regulations or guidelines or perverse, arbitrary or discriminatory actions by the Bank/ financial institutions, the efficacious remedy was available to the petitioners before the Banking Mohtasib appointed under S.82 of the Banking Companies Ordinance, who had jurisdiction to look into the complaint of aggrieved person---Constitutional petition was not an efficacious remedy---Constitutional jurisdiction of High Court was an equitable remedy provided in aid of justice and not in aid of injustice---Petitioners, who were defaulters, could not invoke constitutional jurisdiction to avoid their outstanding liabilities---Litigation in High Court was not only time consuming process, but also had adverse effect on business environment---Constitutional petition was dismissed being not maintainable.

Abdul Salam Memon, Muhammad Awais Bughio, Ms. Abida Parveen Channa, Syed Nasir Abbas Rizvi, Muhammad Iqbal Bhatti, Munir-ur-Rehman, Ms. Samia Durrani holding brief for S. Tariq Hassan, Agha Zafar Ahmed, Kamran Shahzad Siddiqui, Ms. Kiran Ahmed, Mirza Sarfraz Ahmad and Ms. Fatima Jatoi for Petitioners.

Iqbal Haider, Ghulam Murtaza, Kashif Hanif, Shahab Sarki, Abdul Rauf Arain, Naveed-ul-Haq, Khalid Mehmood Siddiqui, Izhar Muhammad, Samiuddin and M.A. Khan for Respondents.

2009 C L D 905

[Karachi]

Before Khilji Arif Hussain, J

MICROSOFT CORPORATION WASHINGTON DC through Sub-Attorney S. Saeed Mian---Plaintiff

Versus

AL-KARAM TEXTILE MILLS (PVT.) LTD.---Defendant

Suit No.1079 of 2002 and C.M.A. No.1135 of 2004, decided on 31st May, 2004.

Copyright Ordinance (XXXIV of 1962)---

----S.29---Civil Procedure Code (V of 1908), O.XXV, R.1 & S.151--Specific Relief Act (I of 1877), S.54---Suit for injunction and infringement of copyright etc.---Application for. direction to plaintiff to submit security for payment of cost under O.XXV, R.1, C.P.C.---Allegation in the affidavit filed by defendant was that the plaintiff was a foreign company permanently based and having its principal business abroad; and the plaintiff did not possess any immovable property in Pakistan, therefore, plaintiff could be called to furnish security of cost in the sum of Rs. one million--Validity-Plaintiff admittedly was a company having no asset in Pakistan; and it was not the case of the plaintiff that its attorney who was Pakistani could be held personally liable to pay the cost---Plaintiff was directed to deposit or furnish Bank guarantee with the Nazir of the Court within specified period.

Sony Kabushiki Kaisha v. Arif Muhammad Gondal and 2 others 1997 CLC 227 ref.

Zulfiqar Ahmed Khan for Plaintiff.

Ms. Shazia Tasnim for Defendant.

2009 C L D 908

[Karachi]

Before Munib Ahmad Khan, J

Messrs IRFAN WORLD OF SPORTS (PVT.) LTD. through authorized signatory---Appellant

Versus

REGISTRAR OF TRADE MARKS and another---Respondents

Miscellaneous Appeal No.28 of 2006, decided on 24th November, 2008.

Trade Marks Ordinance (XIX of 2001)---

----Ss.28, 29 & 114---Trade Marks Rules, 1963, R.76---Objection to grant of Trade Mark--Appeal---Appeal against order whereby delay in filing objections had been condoned---Grievance of the counsel for the appellant was that opposition/objection which was to be filed within a period of two months from date of publication, was filed after a week of said prescribed period---Validity---Rule 76 of Trade Marks Rules, 1963 gave a discretion to the Registrar to grant extension for a month at one time and it could further be extended on monthly basis totaling six months, but not beyond---Explanation given for said delay was found satisfactory by the Registrar---Default ire non filing of objection in time was procedural delay, while the matter was still to be decided on merits---Such discretion of Registrar could not be questioned---Only one delay of seven days occurred and that too only at one time, whereas the Registrar had power to grant time for a month at one time and that too could be extended upto six months---Appeal having no merits was dismissed.

PLD 1992 SC 417 rel.

Amna Salman for Appellant.

Salim Ghulam Hussain for Respondent No.1.

2009 C L D 915

[Karachi]

Before Khilji Arif Hussain and Arshad Noor Khan, JJ

ZOHAIR ZAKARIA -Appellant

Versus

NATIONAL BANK OF PAKISTAN---Respondent

Spl. High Court Appeal No.288 of 2007, decided on 18th March, 2009.

(a) Transfer of Property Act (IV of 1882)---

----S.53---Qanun-e-Shahadat (10 of 1984), Arts.117 & 120---Fraudulent: transfer---Onus to prove---Nature of transfer---Scope---Transfer of immovable property made with intent to defeat or cause delay in payment to creditors of transferor is not void transaction but is voidable at the option of creditor---Proviso to S.53 of Transfer of Property Act, 1882, protects right of bona fide transferee in good faith against valuable consideration---Creditor has to exercise his right of option to declare transfer of property with intent to defeat and delay its recovery by filing of suit or manifest his intention to avoid transaction such as by attachment of property transferred---Onus of proving that deed of transfer was fraudulent is on the person alleging it.

Chogmal Bhandarl and others v. Deputy Commercial Tax Officer AIR 1976 SC 652 rel.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.23---Transfer of Property Act (IV of 1882), S.23(1)---Transfer of assets---Scope---Restriction put up by S.23(1) of Transfer of Property Act, 1882, on customer relates only to assets or properties furnished to Financial Institutions as security by way of mortgage, lien, etc. whereas under S.23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, transfer or alienation of any property by judgment-debtor is void transfer having no legal effect.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9, 19(7) & 23---Contract Act (IX of 1872), S.128---Transfer of Property Act (IV of 1882), S.53---Civil Procedure Code (V of 1908), O.XXI, R.26---Recovery of Bank loan---Execution of decree---Objection by bona fide transferee---Guarantor, liability of---Father of objector gave guarantee in respect of loan granted to principal borrower and property in question was owned by guarantor who transferred the same to objector vide registered gift deed---Plea raised by objector was that property in question Was neither mortgaged nor any charge was created by guarantor on the same at the time when loan was granted-Validity-Liability of surety in terms of S.128 of Contract Act, 1882, was co-extensive with that of principal debtor, unless it was otherwise agreed by agreement---Word "guarantee" was technical term and essence of guarantee was that guarantor agreed to discharge his liability only when principal debtor had failed to discharge the same---Letter of guarantee in question itself provided that guarantor was liable to pay loan on demand, in other words, on failure of principal debtor to adjust liability when Bank called upon him to pay the guaranteed amount---Guarantor unlike debtor became liable for guaranteed amount from the date of demand or from the date when he came to know that creditor had filed suit for recovery against him---While dismissing objection petition filed by objector, Banking Court did not record any finding that transfer of properly in question in favour of objector was with intent to defeat or delay creditors to transferor---Neither S.53 of Transfer of Properly Act, 1882, nor S.23 of Financial Institutions (Recovery of Finances) Ordinance, 2001, had put any restriction on the right of borrower/customer to deal with its property in normal course bona fide on which charge had not been created---Order passed by Banking Court was set aside and objection application under S.19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, along with application under O.XXI, R.26, C.P.C. were allowed---Appeal was allowed in circumstances.

Textile Management (Pvt.) Limited v. N.I.T. 2002 CLD 490; Industrial Development Bank of Pakistan v. AOKI (Pvt.) Ltd. and others 2008 OLD 158; Messrs Habib Bank Ltd. Karachi and others v. Ghulam Haider and others PLD 1975 Lah. 489; Muhammad Imran Shaikh v. Habib Bank Ltd. through Authorized Attorneys and others 2006 CLD 1437; 2002 CLD 819; Mt. Kanwal Shri v. Babu Lal and another AIR 1937 Lah. 819; Lal Chand v. Raman Shah AIR 1937 Lah. 820 and Chogmal Bhandari and others v. Deputy Commercial Tax Officer AIR 1976 SC 652 ref.

Arshad Tayebaly for Appellant.

Ahmed Hassan Rana for Respondent.

Date of hearing: 3rd March, 2009.

2009 C L D 979

[Karachi]

Before Khilji Arif Hussain and Arshad Noor Khan, JJ

COOPER & CO. (PVT.) LTD. through Authorized Chairman---Appellant

Versus

LAUREL NAVIGATION (MAURITIUS) LTD. and another---Respondents

H.C.As. Nos.304 and 305 of 2008, decided on 6th March, 2009.

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

----O.XXXIX, Rr.1 & 2---Interim injunction, grant of---Duty of Court stated.

For the purposes of grant of interim injunction, Court has to consider the existence of good prima facie case in favour of the plaintiff and balance of inconvenience lies in his favour and he will suffer irreparable loss and injury, if the injunction is refused.

(b) Specific Relief Act (I of 1877)---

----Ss.42 & 54---Contract Act (IX of 1872), Ss.201 & 202---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Suit for declaration and permanent injunction--Agreement for looking after business of cargo shipping of defendant by plaintiff on payment of commission over services rendered by him---Termination of agreement by defendant without issuing 90 days advance notice to plaintiff --Application for temporary injunction to restrain defendant from acting upon termination letter---Plea of plaintiff that he had interest in agency; and that he had invested huge amount on arranging containers, trailers, heavy machinery and staff to manage affairs of business, which investment would be ruined in case of refusal of injunction---Validity---Agreement executed between parties was that of principal and agent---Agreement did not speak about status of plaintiff having any interest in agency, except as a commission agent---According to agreement, such containers, trailers, machinery were assets of principal and payment of salaries to staff employed by plaintiff was to be made from income of business---Nothing on record to show that plaintiff from his own fund had arranged containers, trailers, machinery and staff to promote business of defendant---Such agreement did not provide any clause containing interest of plaint ff as agent in agency, thus, provision of S.202 of Contract Act, 1872 would not apply thereto---Nothing on record to show that there was any express or implied conduct of parties to convert agency agreement into interest in agency in favour of plaintiff---Termination of agency without issuing advance notice of 90 days could be treated as illegal, which point would require evidence, but same could not be considered as sufficient for granting injunction in favour of plaintiff---Plaintiff for termination of his agency could claim damages or compensation from defendant, which was an appropriate and efficacious remedy available to him---Plaintiff had not made out prima facie case nor balance of inconvenience lay in his favour nor he would suffer irreparable loss in case of refusal of injunction---Application for temporary injunction was dismissed in circumstances.

Jamal Ahmed v. Zakaria 1987 MLD 295; Molasses Export Co. Ltd v. Consolidated Sugar Mills Ltd. 1990 CLC 609; Ph- Bux and others v. Ghulam Rasool and others PLD 1997 Kar.113; Messrs Universal Trading Corporation (Pvt.) Ltd. v. Messrs Beecham Group PLC and another 1994 CLC 726; Nooruddin and others v. Messrs Sindh Industrial Trading Estate Ltd and others 1993 CLC 2204; Messrs Business Computing International (Pvt.) Ltd. v. IBM World Trade Corporation 1997 CLC 1903; Puri Terminal Ltd. v. Government of Pakistan 2004 SCMR 1092; Hazara Chill Tract v. Mst. Qaisra Elahi and others 2005 SCMR 678; Mian Muhammad Iqbal v. Mir Mukhtar Hussain and others 1996 SCMIZ 1047; State of Punjab v. hider Singh AIR 1998 SC 07; Shaw Wallace and Co. AIR 31 Calcutta 676; Bright Bros. (Pvt.) Ltd. Bombay v. J.K. Sayani AIR 1976 Mad. 55; Sohrabaji Dhunjibhoy v. Oriental Government Security Life Assurance Co. AIR 1944 Bom. 166; Cooperative Hindustan Bank v. Surandra Nath Dey AIR 1952 Cal. 524; Nandlal v. Dharamdeo Singh and others AIR 1925 Pat. 299; Union of India v. Motilal Kamalia and others AIR 1962 Pat. 384; Chandi Pradad Single v. The State of Uttar Pradesh AIR 1956 SC 149; Lakshminarayan Ram Gopal and Sons Ltd. v. Government of Hyderabad AIR 1954 SC 364; Amrit Lal C. Shah v. Ram Kumar AIR 1962 Pun. 325; Firm Murlidhar Banwarilal v. Kishorelal Jagannath Pradad and others AIR 1960 Raj. 296; Muhammad Yousuf v. Messrs Urooj (Pvt.) Ltd. PLD 2003 Kar.16; Messrs Farooq & Co. v. Federation of Pakistan 1996 CLC 2030; Sunshine Corporation Ltd. v. V.E.I. Du Pont SBLR 2001 Kar.387; ABN Amro Bank v. Wasim Dar 2004 PLC 69; West Pakistan Industrial Development Corporation v. Aziz Qureshi, PLD 1973 SC 222; Messrs Nasir Traders and others v. Habib Bank Ltd. PLD 1993 Quetta 94; Mst. Azeemun Nisa Begum v. Ali Muhammad PLD 1990 SC 382; Hafiz Sharafatullah v. Federation of Pakistan 1995 CLC 1790; Abdul Habib Rajwani v. Messrs Industries Ltd. and others 2007 YLR 590: Pakistan Chest. Foundation v. Government of Pakistan and others 1997 CLC 1379; Khairpur Textile Mills v. National Bank of Pakistan 2003 CLD 326; Trustees of the Port of Karachi v Muhammad Saleem 1994 SCMIZ 2213; Asif Jah Siddiqi v. Government of Sindh PLD 1983 SC 46; Phalippine Airlines Inc. v. Paramount Aviation (Pvt.) Ltd. PLD 1999 Kar. 227; Bolan Beverages (Pvt.) Ltd. v. Pepsico Inc. and others PLD 2004 SC 860: Tauseef Corporation (Pvt.) Ltd. v. Lahore Development Authority and others 2002 SCMR 1269; Shakil Waqas and Co. v. General Manager, Pakistan Railways and others PLD 2001 Kar. 185; Messrs Petro-commodities (Pvt.) Ltd v. Rice Corporation of Pakistan PLD 1998 Kar.1; Messrs Pakistan Associated Construction Ltd, v. Asif H. Kazi and another 1986 SCMR 820: Boulton Bros and Co. Ltd. (India) v. New Victoria Mills Co. Ltd., AIR 1929 Allahabad 87; Thimmarayappa v. Narayanappa and others AIR 1854 Mysore 88; Adam Limited v. Messrs Mitsui and Co., reported in 1997 MLD 2712; S.M. Shafi Ahmed Zaidi v. Malik Hassan Ali Khan 2002 SCMR 338 and Rashid Khan alias Muhammad Rafiq Khan v. Haji Muhammad Yousuf and another 1987 SCMR 392 ref.

Bolan Beverages Ltd v. Pepsico Inc. and others PLD 2004 SC 860; JJ Sayani v. Bright Brothers (Pvt.) Ltd. AIR 1980 Mad.; Muhammad Aref Effendi v. Egypt Air 1980 SCMR 588; Pakistan Paper Corporation v. National Trading Company 1983 CLC 1965; Subhash Chandra J.M. v. Feroze Khan AIR 1982 Deh.114 and Law of Agency, III Edition (Revised) by Prof. SC Srivastava rel.

Pakistan Automobiles Corporation Ltd. v. General Motors Overseas Distribution Corporation and other PLD 1982 Kar.796 and Messrs Oni Prokash Paiwal and another v. Union of India and others AIR 1988 Cal. 143 distinguished

(c) Contract Act (IX of 1872)----

----S.201---Agency, termination of---Conditions and circumstances stated.

The principal has authority to terminate the authority of an agent in the following circumstances:--

(i) by the principal revoking his authority;

(ii) by the agent renouncing the business of the agency;

(iii) by the business of the agency being completed;

(iv) by either the principal or agent dying or becoming of unsound mind;

(v) by either the principal or agent being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors;

(vi) by expiry of the period of agency, if any;

(vii) by the destruction of a material part of the subject matter of the agency;

(viii) the happening of any event which renders the agency unlawful or upon the happening of which, it is agreed between the principal and the agent that the authority shall determine; or

(ix) by dissolution of the principal, where the principal is a firm or a company or other corporation.

The principal has always ample power to rescind, revoke or alter the authority of agent, provided any one or more of the aforesaid conditions are available to the principal to amend, alter, rescind, vary or cancel the authority of the agent.

(d) Civil procedure Code (V of 1908)----

----O.XLI, R. 1(1) &. O.XLIII, R. 1(r)---Appeal against order of dismissal of injunction application---Appeal filed along with photocopy of impugned order---Validity---Appeal was not maintainable for there being an inherent deject therein.

M. Farogh Naseem for Appellant.

A. Rehman Malik and Syed Ali Haider for Respondent No.1.

Shakeel Pervez Bhatti for Respondent No.2.

Date of hearing: 28th January, 2009.

2009 C L D 999

[Karachi]

Before Nadeem Azhar Siddiqi, J

ISLAMIC REPUBLIC OF PAKISTAN---Petitioner

Versus

Messrs SABAH SHIPYARD (PAKISTAN) LTD. and another---Respondents

J. M No.25 of 2005, decided on 8th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.305 & 309---Constitution of Pakistan (1973), Art.99, 173(3) Sr. 174---Civil Procedure Code (V of 1908), O.XXVII, Rr. 1 & 2 Winding up of company, petition for---Inability of company to pay amount of award passed by International Court of Arbitration in favour of Ministry of Water and Power, Government of Pakistan---Filing of such petition by Islamic Republic of Pakistan, Ministry of Water and Power through Managing Director of the Private Power and Infrastructure Board (PPIB), but without signatures of President of Pakistan or his authorized agent---Validity---Islamic Republic of Pakistan in capacity of creditor had filed such petition, for which reference or permission from President of Pakistan was not necessary---Under Art.174 of the Constitution, Federation may sue or be sued by name of Pakistan---Signing of proceedings by President himself or his authorized agent was not required by Arts.173(3) & 174 of the Constitution---Private Power and Infrastructure Board being attached with Ministry of Water and Power and having such award in its favour, had rightly filed such petition as creditor on behalf of Pakistan through Managing Director of Private Power and Infrastructure Board---According to Art.99 of the Constitution, all executive actions including contracts made on behalf of Federal Government would be made in the name of President---Specific authorization from President of Pakistan for filing such petition was not required---Objection as to maintainability of such petition was overruled in circumstances.

Ijaz Ahmed for Petitioner.

Salmon Talibuddin for Respondent No.1.

Nemo for Respondent No.2.

2009 C L D 1013

[Karachi]

Before Azizullah M. Mamon and Khalid Ali Z. Qazi, JJ

Messrs YOUNG MEN'S CHRISTIAN ASSOCIATION (YMCA) through President---Petitioner

Versus

GOVERNMENT OF SINDH through Secretary Social Welfare and Women Development Department Karachi and 3 others--Respondents

C.P. No. D-330 of 2005, C.M.As. Nos. 5573, 5995 of 2005, 697, 868, 1525, 2730, 6893, 8102, 8819, 8880, 8912, 8880, 8912 of 2006, 342, 343, 453, 1296, 7395 of 2007, 70, 71, 1253, 2708, 2709, 5325, of 2008 decided on 30th January, 2009.

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

----S. 11---Res judicata---Declaration given by Court in respect of issues, which were decided---Validity---Orders of Court must he respected---Such declaration was res judicata.

Pir Baksh v. Chairman, Allotment Committee PLD 1987 SC 145 rel.

(b) Constitution of Pakistan (1973)----

----Art.199---Voluntary Social Welfare Agencies (Registration and Control) Ordinance (XLVI of 1961), S. 4---Constitutional petition--Supersession of Governing Body of Association through Notification of Provincial Government---Order of High Court disposing of constitutional petition after setting aside such notification with directions to its Nazir to prepare voters list and conduct of election---Entertainment of interlocutory applications by High Court after passing such order---Objection of petitioner that such order had rendered such applications to be infrucutuous---Validity---Judges having disposed of constitutional petition were not available---Such application had been entertained by Judges other than those having authored such order---Directions contained in such order to hold elections were yet to be brought to their logic end---Such objection was overruled in circumstances.

Capital Development Authority v. Khuda Baksh 1994 SCMR 771 and Abbas Khaleeli v. Saifuddin PLD 1969 Kar. 692 ref.

Capital Development Authority v. Khuda Buksh 1994 SCMR 771 rel.

(c) Constitution of Pakistan (1973)---

----Art.199---Election dispute---Quo warranto, writ of---Scope---person not being a losing candidate, could challenge election by way of such writ.

Muhammad Afsar Khan v. Muhammad Amin Khan Tareen PLD 1983 Pesh 234 ref.

Abdul Wahid v. Din Muhammad PLD 1982 Lah. 168 rel.

(d) Election---

---Election could not be annulled or vitiated in absence of violation of electoral rules/law materially affecting electoral results.

Behram Khan v. Abdul Hameed Khan Achakzai PLD 1990 SC 352 rel.

(e) Constitution of Pakistan (1973)---

----Art.199---Voluntary Social Welfare Agencies (Registration and Control) Ordinance (XLVI of 1961), S.4---Constitutional petition---Supersession of Governing Body of Association through Notification of Provincial Government---Setting aside of such notification by High Court with directions to its Nazir to prepare voters list, notify date of election and conduct of election---Entertainment of fresh voters by Court vide order, dated 12-12-2006 after conduct of election on 10-12-2006---Application for setting aside such election on the ground that Nazir had not given in press any public notice for holding of election and inviting interested persons to approach him with evidence of membership---Validity---Preparation of voters list and conduct of elections had been pursued without issuing proper notices in press to all concerned---Record showed that under Court's order, dated 12-12-2006, new voters approached Nazir, who allowed them to become a party to Electoral College---Some 113 members through interlocutory applications had also shown prima facie evidence in terms of membership cards of the Association--If claim of such new voters was entertained and found genuine, then same would not materially affect result of such election---Eligible voters had been disenfranchised without a proper opportunity due to non-issuance of such public notice by Nazir---Entire process of election was violative of natural justice and against welfare of the concerned community---High Court declared such election and voters list prepared by Nazir to be void ab initio for being against concept of due process of law and in breach of natural justice.

Ghulam Ghous v. Muhammad Refique Khan PLD 1982 Karachi 872, Hakim Ali v. Deputy Commissioner/Election Tribunal PLD 1982 SC 172; Khushi Muhammad v. Kabir Ahmed PLD 1983 Lah. 250; Behram Khan v. Abdul Hameed Khan Achakzai PLD 1990 SC 352; Mauzam Hanif v. Settlement Officer 2006 SCMR 642; Abbas Khaleeli v. Saifuddin PLD 1969 Kar. 692; Maulana Maudoodi v. Government of West Pakistan PLD 1964 SC 673 and Amina Begum v. Ghulam Dastagir PLD 1978 SC 220 ref.

Ahab Shahan Mirani v. President of Pakistan 1998 SCMR 1863 rel.

M. Aqil Awan and M.M. Tariq for Petitioner.

M. Sarwar Khan, Addl. Advocate General, Sindh and Nafis Usmani, A.A.-G. along with Muhammad Yousaf Channa, Assistant Social Welfare Department for Respondents Nos.1 and 2.

Respondent No.3 in Person.

Zahid Hamid for Respondent No.4.

Dr. Farogh Naseem and Munawar Hussain for Interveners.

Muhammad Ashraf Mughal, D.A.-G.

Farid Anwar Qazi, Special Assistant MIT-II.

Dates of hearing: 7th, 21st, August, 2008, 20th, 27th, October, 2008, 10th, 12th, 20th, 24th November, 2008, 1st and 15th December, 2008.

2009 C L D 1028

[Karachi]

Before Khilji Arif Hussain and Arshad Noor Khan, JJ

Messrs H&B, GENERAL TRADING COMPANY through Director---Appellant

Versus

Messrs INTERNATIONAL MARKETING COMPANY through Proprietor and 2 others---Respondents

H.C.As. Nos.404 of 2008 and 11 of 2009, decided on 10th April, 2009.

(a) Trade Marks Ordinance (XIX of 2001)---

----Ss.73(4), 80(4) & 96(1)---Civil Procedure Code (V of 1908), S.10---Application for revocation of registration of defendant's trade mark and rectification of register, and suit for infringement, passing of, permanent injunction and damages in respect of loss caused to plaintiff due to use of disputed trade mark by defendant---Proceedings initiated by defendant concerning disputed trade mark before District Judge at place "P" prior to filing of such suit/J M by plaintiff before High Court at place "K"---Application by defendant for slay of plaintiffs suit/J M at place "K"-- Validity---Under Ss.73(4), 80(4) & 96(1) of Trade Marks Ordinance, 2001, legislature, with a view to avoid conflict of decision and expedite proceedings concerning disputed trade mark, required parties to file all proceedings in one Court Requirement under Ss.73(4) & 80(4) of Trade Marks Ordinance, 2001 was only pendency of proceedings prior in time concerning disputed trade mark in a Court, where proceedings for revocation or rectification of disputed trade mark could be filed-Provision of S. 10, C.P.C., would not attract to facts of present case--High Court returned Judicial Miscellaneous Application and plaint in such suit to plaintiff for presenting same to Court at place "P" where proceedings prior in time concerning disputed trade mark teas pending---Principles.

Dabur India Ltd. v. 1lilal Confectionary (Pvt.) Ltd., PLD 2000 Kar. 139(c); United Distribution Pakistan Ltd. v. Al-Syed Agro Chemicals Services and others 2005 CLC 1659; Dr. Haider Ali Mithani and others v. Ishrat Swatch and others PI,D 1999 Kar. 81; Abdul Ghani and another v. Province of Baluchistan and 2 others PLD 1982 Quetta 63; Thettayil Peter Joseph v. Thettayil Varghese Augustine and another 1991 (2) Arb. LR 286 (Madras); Vikas Manufacturing Co. v. Bharaj Manufacturing Co., Civil 1981 PTD 87 (P&H) and Burma Eastern Ltd. v. Burma Eastern Employees United and others PLD 1967 Deca 190 ref.

(b) Interpretation of statutes---

---Right or liability created by a statute must be enforced by availing remedy provided therein.

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

---S.10---Stay of subsequent suit---Conditions stated.

To attract provisions of section 10, C.P.C. party has to establish that matters in both suits are directly and substantially the same, and that previously instituted suit between the same parties is pending in a Court competent to grant relief.

Muhammad Nadeem Qureshi for Appellant.

Amir Javed for Respondent No.1.

2009 C L D 1043

[Karachi]

Before Nadeem Azhar Siddiqi, J

HASSAN AL-ADAWI and another---Petitioners

Versus

Messrs HAMA INTERNATIONAL (PVT.) LTD. and 3 others---Respondents

J. Miscellaneous No. 18 of 2005, decided on 8th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.152, 290, 305 & 306---Winding up of company, petition for---Petitioner's plea was that respondents had fraudulently transferred his shares in their names; and that respondents were conducting affairs of company in a manner oppressive to petitioner being minority shareholder---Validity---Against fraudulent transfer of his shares, remedy available to petitioner was to apply to Court for rectification of register, but not by way of filing such petition--Only members or creditors having interests equivalent to at least 20% of paid-up capital of company could file such petition on the ground that affairs of company were being conducted in a manner oppressive to them---Petitioner on date of filing such petition was not member of company according to record of Security and Exchange Commission---high Court dismissed such petition for being not competent.

Aeroflot Russin International Arilines v. Gerry's International Ltd. 2003 CLD 1075 ref.

Khawaja Shamsul Islam for Petitioners.

Ch. Abdul Rasheed for Defendants No.1.

Nemo for Defendant No.4.

Date of hearing: 20th November, 2008.

2009 C L D 1056

[Karachi]

Before Anwar Zaheer Jamali, C.J. and Muhammad Karim Khan Agha, J

Messrs BELA LUBRICANT LTD. through Chief Executive and others---Appellants

Versus

NATIONAL BANK OF PAKISTAN and others---Respondents

1st Appeals Nos.6 and 8 of 2009, decided on 21st April, 2009.

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

----S. 19(1)(2)(3)---Civil Procedure Code (V of 1908), O.XXI, Rr.92 & 93---Execution of decree and sale of mortgaged property---Scope of S.19(1)(2)(3) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Law did not permit and it was not just, equitable, fair and proper for the Banking Court to have accepted the bid of Rs.68,80,000 given by the auction-purchaser in November, 2004, while examining the question of confirmation of sale in the year 2009, when before it already the Executing Court had two other offers at much higher sum, and even the auction-purchaser had enhanced his offer from Rs.68,80,000 to Rs.1,00,60,000 and even deposited such sum with the Banking Court and the Banking Court ordered refund of the excess sum of Rs.31,80,000 deposited by auction-purchaser as per his application---High Court set aside the order of flanking Court with the direction that keeping intact, the highest offers in the sum of Rs.13, million arid in the sum of Rs.11 million and the higher offer of auction-purchaser in the sum of Rs.1,00,60,000 the flunking Court shall once again dive all three of them an opportunity to submit their enhanced written sealed offers, it anti, before it at one and the same tune to be /bred by it within one mouth---Such sealed offers shall be opened by the court then and there and to be considered for acceptance and confirmation of sale of mortgaged properly in accordance with law, butt before that the decree holder and the judgment-debtors may also be put to notice of such offers---Law on the subject and reasons elucidated.

A plain reading of section 19(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 reveals that though the execution proceedings before the Banking Court are to be normally regulated under the provisions of the Code of Civil Procedure, 1908 or any other law for the time being in force, but at the same time the decree-bolder has been given a special privilege to request the Banking Court for enforcement and execration of the decree in such manner as it considers appropriate. Not only this but even under subsection (3) to section 19 the power for sale of the mortgaged properly, without. intervention of the court has been conferred on the decree-holder bank, which option could be exercised by the decree-holder after passing of judgment and decree in his favour. Indeed, in the present case such option was not exercised by the decree-holder Bank, but by invoking the special provision seeking execution of decree in the manner decree-holder considered it appropriate, a statement was submitted before the court, calling upon the auction-purchaser for enhancement of his bid from Rs.68,80,000 to Rs.1,00,60,000 which offer was also promptly accepted by the auction-purchaser. It was on the basis of such mutual understanding between the auction--purchaser and the decree-holder bank in terms of subsection (2) of section 19 that earlier sale of the mortgaged property was confirmed in favour of the auction purchaser. Such order of the Banking Cowl was, however, set aside by High Court in Ist appeal mainly for the reason that one of the participants of the proceedings was not afforded any opportunity for contesting such offer and that another higher offer in the sum of Rs.13 million, worth consideration, was available before the Banking Court at that time.

This being the position it -toes not appeal to reason that instead of following the spirit of such-order of Appellate Court, Banking Court will go to the extent of accepting a much lesser offer of Rs.68,80,000 by merely making sweeping observations that the court cannot be turned into auction house, least realizing that at the same time it was the basic duty of the Banking Court to have ensured maximum sale proceed of the mortgaged property for the benefit of the decree-holder and the judgment-debtors, whose property was being sold. It is only after the stage of confirmation of sale that even the judgment-debtors and decree-holder are debarred from negotiating compromise on any other terms, to the prejudice of the auction-purchaser, otherwise mere extension of highest offer or its acceptance has not conferred any substantive legal right in favour of the auction-purchaser.

Even otherwise, when three different parties are present/available before the Banking Court without any disqualification to purchase the mortgaged property at the highest price, and the sale of the property has not yet been confirmed in favour of any earlier bidder, why the court would reject higher offer without any cogent reason, thereby depriving the decree-holder and the judgment-debtor/owner of the mortgaged property from the maximum price. Before confirmation of sale, the auction-purchaser has no locus stand' to challenge the cancellation of auction; mere floating of bid, may be highest one, does not create any legal right in favour of the bidder without confirmation of bid and the highest bid only remains an offer. The confirmation of sale in terms of Order XXI, rule 92, C.P.C. is a mandatory requirement which, in one sense, gives cut off time for transaction of legal rights in favour of the auction-purchaser. Rule 93 of Order XXI, C.P.C. lays down that under rule 92 (ibid), the Executing Court has ample power to set aside the sale of any immovable property and in such case, repayment of purchase money is to be made to the purchaser of the property with or without interest, as the court may direct in this regard. In the present case after the offer of the decree-holder Bank contained in its statement, which was accepted by the auction-purchaser vide his application, his earlier offer of lesser sum of Rs.68,80,000, despite higher offer having been made without prejudice to his right as auction-purchaser, has either disappeared or merged into such higher offer. Therefore, by no stretch of imagination Banking Court was justified in obliging the auction-purchaser with the acceptance of his bid in the sum of Rs.68,80,000 and further ordering refund of the excess sum of Rs.31,80,000 deposited by him as per his application.?

Clear language of subsection (2) of section 19 of the Ordinance, 2001 had virtually diluted its whole effect after the submission of another higher otter by the auction-purchaser in the sum of Rs.1,00,60,000 which was in conformity with the spirit of such provision of law, which lays down that the decree-holder may request the Banking Court for execution of decree in such manner as it considers appropriate.?

Order in 1st appeal was passed by the high Court in the spirit to ensure maximum price of the mortgaged properly from the person interested in buying it, as otherwise the grievance of the other bidders that they were not afforded opportunity of hearing before the Banking Court, could have been redressed, by affording them an opportunity of hearing in the matter before the High Court. Banking Court has not assigned a single reason for non acceptance of the available highest offer of Rs.13 million made by another party, which per statement of decree holder bank, was very much acceptable to them.?

Impugned order was illegal, irrational and arbitrary thus it was liable to be set aside. The case was remanded to the Banking Court with the direction that keeping intact the highest offers in the sum of Rs.13 million, other offer in the sum of Rs.11 million and the higher offer of auction purchaser in the sum of Rs. 1,00,00,000, the court shall once again give all three of them an opportunity to submit their enhanced written sealed offer, if any, before it at one and the same time to be fixed by it within one month. Such scaled offers shall be opened by the court there and then to be considered for acceptance and confirmation of sale of mortgaged property in accordance with law. But before that the decree-holder and judgment-debtors may also be put to notice of such offers.?

Muhammad Ikhlaq Memon v. Zakria Ghani and others PLD 2005 SC 819 distinguished.

Afzal Maqsood Butt v. Banking Court No.2 Lahore and 8 others PLD 2005 SC 470; Settlement commissioner, Multan and Bahawalpur Divisions, Multan and others 1974 SCMR 337; Rehmat Ali and 2 others v. The Revenue Board, West Pakistan Lahore and another 1973 SCMR 342; Ch. Muhammad Ashraf v. Punjab Privatization Board through Secretary Government of Punjab and another 2002 MLD 550; Sheikh Muhammad Rafiq and others v. United Bank Limited and others 1997 SCMR 1149; Hudaybia Textile Mills Ltd. v. Allied Bank of Pakistan and others PLD 1987 SC 512; Muhammad Ikhlaq Memon v. Zakria Ghani and others PLD 2005 SC 819; Messrs Irisma International Karachi and others v. United Bank Ltd. Karachi and another 2007 SCMR 1271; Captain PQ Chemical Industries (Pvt.) Ltd. v. Messrs A.W. Brothers and others 2004 SCMR 1956; Mrs. Yasmeen Yaqoob v. Messrs Allied Bank of Pakistan and others 2007 CLD 1511; Messrs Askari & Company and 2 others v. Muslim Commercial Bank Ltd. and another 2009 CLC 371: United Bank Limited v. Messrs A.Z. Hashmi (Pvt.) Ltd. 2000 CLC 1438 and Askari Commercial Bank Ltd. v. Zafar Ahmed and others 2008 CLD 800 ref.

Pervaiz Khan Tanoli for Appellant (in 1st Appeal No.6 of 2009).

Pervaiz Khan Tanoli for Respondent No.2 (in Ist Appeal No.8 of 2009).

Tasawwar Ali Hashmi for Appellant (in 1st Appeal No.8 of 2009).

Tasawwar Ali Hashmi for Respondent No.1 (in 1st Appeal No.6 of 2009).

Shaikh F.M. Javed for Respondent No.2 (in 1st Appeal No.6 of 2009 and for Respondent No. 1 (in I st Appeal No.8 of 2009).

Shoukat Usman for Respondent No.5 (in Ist Appeal No.6 of 2009).

Date of hearing: 8th April, 2009.

2009 C L D 1074

[Karachi]

Before Anwar Zaheer Jamali, C.J. and Faisal Arab, J

Mian SARERAZ AHMED ANJUM Appellant

Versus

BANKING COURT No.IV through Presiding Officer and others---Respondents

Ist Appeal No.25 of 2003, decided on 20th January, 2009.

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

----Ss.9, 19 & 22---Civil Procedure Code (V of 1908), O.XXI, Rr.89 & 90---Suit for recovery of loan---Execution proceedings--Failure to redeem mortgaged properly---Suit filed by the Bank against defendant borrower, was decreed by the Bunking Court and mortgaged properly was ordered to be sold---While mortgaged property was in the process of being sold in execution proceedings, plaintiff-Bank offered the defendant to get the properly redeemed, but defendant failed to do so---Sale of mortgaged properly in favour of highest bidder was confirmed---Application filed by the defendant for recall of order of sale having been dismissed by the Executing Court, defendant aggrieved with said order, had filed appeal, contending that he was ready and willing to make payment to the plaintiff-Bank, court ought not to have sold the properly---Validity---held, even after the bids were invited, ample opportunity was given to the defendant to gel the mortgaged property redeemed, but the defendant failed to make payment---No other course was left with the Executing Court, but to confirm the bid of the highest bidder; thereafter it was too late for the defendant to seek yet another opportunity to get the sale set aside Court sale should only be set aside when equitable grounds for nullifying the same existed in favour of the person who owned or held any interest in the properly sold---Said equitable grounds were provided by law under the provisions of Rr.89 & 90 of O.XXI, C.P.C.---Defendant having failed to make payment though ample opportunities were given to him at various stages of the proceedings, no legal infirmity existed in the impugned judgment.?

Muhammad Ali Waris Lari for Appellant.

Sami-ud-Din for Respondent No.2.

Khaleeq Ahmed for Respondent No.3.

2009 C L D 1077

[Karachi]

Before Salman Talibuddin, J

PAKISTAN INSULATIONS (PVT.) LTD.---Plaintiff

Versus

Messrs RANHILL ENGINEERS AND CONSTRUCTORS DDFC GROUP OF COMPANIES through General Pakistan Operations Manager and 2 others---Respondents

Suit No.403 and C.M.A. No.2230 of 2008, decided on 29th April, 2009.

(a) Arbitration Act (X of 1940)---

----Ss. 20 & 41(b)---Civil Procedure Code (V of 1908), Ss.15 & 20-Limitation Act (IX of 1908), Art.181---Grant of application under S.20, Arbitration Act, 1940---Conditions--Territorial jurisdiction of court---Extent---Limitation--Principles.

The conditions that have to be met before an application under S. 20 Arbitration Act, 1940 may be granted are as follows:---

(a) That there should be a pre-existing arbitration agreement between the parties;

(b) That the parties should not have taken any steps under sections 3 to 19 of the Arbitration Act, 1940 prior to the institution of the section 20 application;

(c) That differences or disputes have arisen between the parties to which the arbitration agreement applies;

(d) That the section 20 application is not barred by limitation; and

(e) That the court to which the section 20 application has been made has jurisdiction in the matter to which the agreement relates.

Within the context of an application under section 20 of the Arbitration Act, 1940 all that the plaintiff needs to establish is the existence of an arbitration agreement between the parties and prima facie existence of a dispute between them that is capable of being referred to arbitration in accordance with their agreement. If this burden has been discharged, and provided the other conditions set out above have been met, an order granting the application will follow.

"A court having jurisdiction in the matter to which the agreement relates" can only mean that an application under section 20 of the Arbitration Act, 1940 is competent if it is filed in a court that has jurisdiction to entertain a suit the subject-matter of which is the subject-matter of the arbitration agreement. In other words, before entertaining a section 20 application the Court must be satisfied that the disputes referred to arbitration are such as can be made the subject of a suit, and if a suit were filed in respect of the subject-matter, it would lie in it.

Question of jurisdiction has to be determined with reference to the provisions of sections 15 to 20, C.P.C. Of these, the provision that is relevant for the present case is section 20(c) of the Code pursuant to which a suit is competent if it is filed in a court within the local limits of whose jurisdiction the whole or a part of the cause of action arose. If a cause of action has arisen within the territorial jurisdiction of a court, then an application under section 20 can be filed in that court.

In the present case, the dispute raised by the plaintiff was a breach by the Consortium of its obligation to make payment under the subcontract. Clearly this was a dispute that could be made the subject of a suit.

In a suit on a contract the cause of action will consist of the making of the contract and of its breach at the place where it is to be performed. Therefore, an action for breach of contract can at the option of the plaintiff be brought either at the place where the contract was made or the place where the breach was committed.

Accordingly, a part of the cause of action arose at place and court had jurisdiction to entertain the suit.

The time within which an application under section 20 of the Arbitration Act, 1940 must be filed is Article 181 of the Limitation Act, 1908. which provides that such an application should be filed within three years lion) the date on which the right to apply accrues.

Where a section 20 application has been tiled and is maintainable, the court is empowered by section 41(b) of the Arbitration Act. 1940 to make orders in respect of any of the matters set out in Second Schedule of the Act.

While there can be no doubt that in appropriate cases the court may make an order in respect of any of the matters set out in the Second Schedule to the Arbitration Act, 1940 including an order securing the amount in difference in the reference, such an order is within the discretion of the court and will not be passed unless the person seeking such relief establishes a strong prima facie case; establishes that the balance of convenience is in his favour and also that he would suffer irreparable injury if the relict sought was not granted.

Being equitable in nature, it is also imperative that the person seeking such relief comes before the court with clean hands and does not seek to obtain the order on the basis of a misstatement.

When order to refer the matter to the arbitration was obtained on the basis of a misrepresentation of the facts this alone disentitles the plaintiff from confirmation of that order.

Ali Muhammad v. Muhammad Shafi PLD 1996 SC 292; Pir Sabir Shah v. Shad Muhammad Shah, Member Provincial Assembly, N.-W.F.P. PLD 1995 SC 66: Dr. Salahuddin v. Revenue Commissioner, Balochistan PLD 1978 Quetta 61; Mien Nawaz Sharif v. Sardar Farooq Ahmad Khan Leghari 1996 CLC 1714; State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393; Kadir Motors (Regd.) Rawalpindi v. National Motors Ltd.. Karachi 1992 SCMR 1174; Chaudhry Mehtab Ahmed v. Mir Shakeel-ur-Rehman 2004 MLD 662; Das Consultants Private Ltd. v. National Mineral Development Corporation Ltd. AIR 1981 Cal. 202; Fauji Foundation v. Yousaf 1985 CLC 2799; Saleem Chemical Industries v. Bird & Co. (P) Ltd. AIR 1979 Mad. 16; Ratan Lalji Gulab Chand v. Dali Chand AIR 1954 Hyd. 39; Shipyard K. Damon International v. Karachi Shipyard and Engineering Works Ltd. 2003 CLD 309 and Commodities Trading International Corporation v. Trading Corporation of Pakistan Ltd. 1987 CLC 2063 ref.

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

----O. XXI, R.46 & O.XXXVIII, R.5---Application seeking garnishee order---Attachment of property before judgment---Scope---Garnishee order could be passed in execution proceedings under O.XXI, R.46, C.P.C. but only after the debt had been judicially determined---Where the plaintiff had a disputed claims, the order sought fell within the purview of O.XXXVIII, R.5, C.P.C. which empowered the court to order attachment of properly before judgment---Such an order, however, could not be passed lightly and the person seeking the same must satisfy the court, by affidavit or otherwise, that there was imminent danger of the defendant disposing of the whole or any part of his property or of the defendant removing the whole or any part of his property from the local limits of the jurisdiction of the court---Under O.XXXVIII, R.5, C.P.C. it was not only this that the court must be satisfied about but also that the defendant was about to do so with the intention of obstructing or delaying the execution of any decree that may be passed against hint---Attachment be/ore judgment could not be claimed merely on the ground that the defendant was a foreigner and did not own any assets in Pakistan---Where there was nothing on the record to show that any property was about to be .disposed of or taken away with intent to obstruct or delay the execution of any decree that may be passed in favour of the plaintiff---Application seeking garnishee order was declined.

Balagamwala Oil Mills (Pvt.) Ltd. v. Shakarchi Trading A.G. 1990 Kar. 1; New Bengal Shipping Company v. Eri Lancaster Stump PLD 1952 Dac. 22; H. Nizam Din & Sons Ltd., Karachi v. M. V. "Oroomee" and 4 others PLD 1977 Kar. 722 and Associated Drillers Ltd. Karachi v. Dirk Verstoop B.V. PLD 1979 Kar. 734 ref.

Muhammad Ali Mazhar for Plaintiff.

Asad Abbas Zaidi for Defendants Nos. 1 and 2.

Nemo for Defendant No.3.

2009 C L D 1098

[Karachi]

Before Anwar Zaheer Jamali, C.J. and S. Zawwar Hussain Jaffri, J

LAKSON TOBACCO COMPANY LTD.--Petitioner

Versus

CENTRAL BOARD OF REVENUE and others ---Respondents

C. P No.1310-of 2003, decided on 29th October, 2005.

(a) State Bank of Pakistan Banking Companies Department Circular No.9 dated 12-2-1985--

---Para.2(3)--S.R.O. No.515(I)/88 dated 26-6-1988---Constitution of Pakistan (1973), Art.199---Constitutional petition---Availing Export Finance facility-Failure to achieve export target--Imposition of penalty---Petitioner company engaged in cigarettes manufacturing, obtained finance facilities toiler the State Bank of Pakistan Export Finance Scheme for the purpose of their export business---Company having jailed to achieve the required export target during relevant year, State Bank of Pakistan imposed line upon the petitioner company under Para.2(3) of Banking Central Department Circular No.9 dated 12-2-1985-Government withdrew the exemption of excise duly and sales tax on the export of cigarettes on 26-6-1988, whereas the petitioner company availed the Export Finance facility through different banks dewing the period from 1-7-1988 to 30-6-1989---Petitioner company's stand was that offer the withdrawal of exemption the export of cigarettes became a rim viable business, but on the other hand petitioner kept on availing the concessionary finance---Having fully known the fact that the export would not he made, being non-viable, the company utilized the public lands al a considerably low mark up rate on similar finance from the Banks for one full year, flouting the very purpose for which the finds were provided by the State Bank--Such act of the petitioner company was tantamount to abuse of the facility--When the Export Finance facility was availed by the company, it was in its knowledge that. it would not export scone being a non-viable transaction--Plea of the petitioner that non-performance was a force majeure, even if it would have been envisaged under the Part-II of the Scheme, was not tenable--Powers exercised by State Bank of Pakistan for imposing of penalty in the terms as agreed between the parties, could not be termed as arbitrary exercise of jurisdiction, nor the issuance of SRO 515(I)/88 dated 26-6-1988 could he considered as force majeure as alleged by the petitioner to evade fine-Order passed by the Joint Director, Banking Policy Department, State Bank of Pakistan, which was a well discussed and well reasoned order, required no interference from High Court in exercise of its jurisdiction under Art. 199 of the Constitution.?

Chairman Regional Transport Authority Rawalpindi v. Pakistan Mutual Insurance Company Ltd. PLD 1997 SC 14; Faquir Muhammad and others v. Mst. Muhammad Bibi and others PLD 1991 SC 590; Government of Balochistan and others v. Azizullah Memon and others PLD 1993 SC 31; Government of Sindh and others v. Abdul Jabbar and others 2004 PLC (CS) 99 and Dr. Syed Tariq Sohail v. Defence Housing Authority 2001 YLR 1193 rel.

(b) General Clauses Act (X of 1 897)---

----S.24-A---All administrative and quasi judicial officers must pass speaking orders i.e. the order must state the reason for the conclusion reached.?

Naimur Rehman for Petitioner.

Sajjad Ali Shah, D.A.-G. for Respondents Nos. 1 and 3.

Yousaf Ali Sayeed for Respondent No.2.

M.A. Khan for Respondent No.5.

2009 C L D 1106

[Karachi]

Before Muharrem G. Baloch, J

ADDITIONAL REGISTRAR OF COMPANIES SECP---Petitioner

Versus

SPEEDWAYS FOUNMETALL (PAKISTAN) LIMITED and 7 others---Respondents

J. M. No.10 of 2002, decided on 24th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss. 309, 305, 231, 261, 208, 195, 473 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.20 & 30(6)(7)---Petition for winding up of unlisted public limited company by Registrar of Companies Securities and Exchange Commission of. Pakistan---Material available on record showed that sanction for winding up proceedings had been grunted without affording an opportunity to the company to make a representation of being heard; that there was no investigation to the affairs of lire company but it was only on an inspection by the State Bank of Pakistan who was not authorised by the Securities and Exchange Commission of Pakistan; that company being art unlisted public limited company in which no public money was involved and none from the public had made any complaint nor had come forward against the affairs of the company; that State Bank of Pakistan had only identified the irregularities of the company but had not recommended for the sanction of presentation of petition for (finding up of the company; that Registrar of Companies, in view of S. 231, Companies Ordinance, 1984, had not inspected the books of accounts of the company nor had called for any explanation as provided under S.261, Companies Ordinance, 1984 and had also failed to properly exercise the powers under Ss.20 & 30(6)(7) of the Securities and Exchange Commission of Pakistan Act, 1997 and that report of the Slate Hank of Pakistan revealed that one of the Directors of the Company had withdrawn an amount from the company which was repaid, he had thus violated S.208, Companies Ordinance, 1984 and was liable for fine---Held, that the petition, for winding up for the company was not maintainable in view of non-affording the opportunity to the company of being heard by tire Securities and Exchange Commission of Pakistan --Inspection of Lire Slate Bunk of Pakistan, in circumstances, could not be treated as inspection by the Commissioner, therefore, the sanction awarded for presentation of the petition for winding up of the company was against the law and deviated from the provisions of lire Companies Ordinance, 1984---Director who withdrew the money and re-deposited same was imposed a fine of Rs.1,00,000---Order accordingly.?

Dawood Fibre Mills Ltd. v. Commissioner (Company Law Division) 2006 CLD 283; Karim Cotton Mills Ltd. v. Executive Director (Enforcement and Monitoring) SEC and another 2006 CLD 339; PICIC Commercial Bank Ltd. v. Spectrum Fisheries Ltd. 2006 CLD 440; In the matter of: Messrs Netsol "Technologies Limited 2006 CLD 684; In the matter of: Messrs S.G, Power Limited 2006 CLD 997 and Northern "Tourism Development (Pvt.) Ltd. v. Executive Director (Company Law) SEC and 2 others 2006 CLD 1204 ref.

S.M. Aamir Naqvi for Petitioner.

Emadul Hassan for Respondents.

Date of hearing: 27th March, 2009.

2009 C L D 1120

[Karachi]

Before Khalid Ali Z. Qazi, J

PFIZER LABORATORIES LIMITED and another---Petitioners

Versus

PARKE, DAVIS & COMPANY LIMITED---Respondents

Judicial Miscellaneous Application No.8 of 2008, decided on 16th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.284 & 287---Amalgamation of companies---Approval---Scheme for amalgamation was approved and accepted by overwhelming majority of members present in number and value of two companies at two meetings held separately under orders of High Court---Effect---Scheme of amalgamation was found to be fair and reasonable on consideration of various factors which were necessary to be taken into consideration by Chartered Accountants of both the companies---There was no allegation that books of accounts were not reliable---No grounds had been suggested why report of Chartered Accountants should not be accepted---There was no allegation of lack of bona fides on the part of majority of members or minority had been overridden and coerced into accepting scheme of arrangement---High Court accepted proposed scheme of amalgamation of both the companies---Petition was allowed in circumstances.

Mahmood Textile Mills Limited v. Registrar Joint Stock Companies NLR 1993 UC (Civil) 49 at 51 paragraphs 5 and 6; Andhra Pradesh-Vijaya Durga Cotton Trading Limited v. Nava Bharat Enterprise (Pvt.) Ltd. (1980) 50 Company Cases 785 at 794-795; J. M. No.25 of 1998 Pakistan Industrial Promoters (Pvt.) Limited and Lever Brothers Pakistan Limited (order dated 30th April, 1999 passed in C. M. A. No.1582 of 1998); Usman Textile Mills Limited 2009 CLD 82; Lipton and another 1989 CLC 818; J.M. No.5 of 2002 in the matter of Abbott Laboratories (Pakistan) Limited and Knoll Pharmaceuticals Ltd.; Brooke Bond Pakistan Limited v. Aslam But Ibrahim 1997 CLC 1873; J.M. No.42 of 2002 Smith Kline and French of Pakistan, Beecham Pakistan (Pvt.) Limited and Glaxo Wellcome Pakistan Limited; J.M. No. 6 of 2006 Pakistan Papersack Corporation Limited, Khyber Papers (Pvt.) Limited and Thal Limited; J.M. No. 23 of 2006 Pharmacia Pakistan (Pvt.) Limited and Parke, Davis & Company Limited ref.

Badaruddin F. Vellani for Petitioners.

2009 C L D 1129

[Karachi]

Before Muharrem G. Baloch, J

MUHAMMAD HANIF SHAIKHANI through Special Attorney ---Plaintiff

Versus

MUHAMMAD KHALID SHAFI---Defendant Summary

Suit No.905 of 2007, decided on 24th April, 2009.

Negotiable Instruments Act (XXVI of 1881)---

----Ss.79 & 80---Civil Procedure Code (V of 1908), S.34 & O.XXXVII, R.2---Recovery of money---Promissory note---Presumption---Ex parte decree---Interest, imposing of---Plaintiff produced original promissory note, legal notice, postal receipt, application forms for allotment of flat signed by defendant and sub-lease of flats---Defendant had chosen to remain absent and failed to appear in Court and to obtain leave to defend the suit, as provided under O.XX VII, R.2 (2) C.P.C.---Effect--Allegation of plaintiff was deemed to be admitted and he was entitled to decree---Suit was based on promissory note which was negotiable instrument and presumption was that same had been issued against consideration and defendant had not come forward to rebut such presumption---High Court decreed suit in the sum claimed with interest at 6% per annum in accordance with Ss.79 and 80 of Negotiable Instruments Act, 1881, from the date of suit till date of decree---High Court also awarded interest at the rate of 10% per annum from date of decree till the date when payment was realized in accordance with S.34 C.P.C.---Suit was decreed accordingly.

Syed Aijaz Hussain v. Syed Abdul Azeem 2008 CLC 41 ref.

Kamal Azfar for Plaintiff.

Defendant Ex Parte.

Date of hearing: 24th April, 2009.

2009 C L D 1141

[Karachi]

Before Azizullah M. Memon, Actg. C.J. and Khalil Ali Z. Kazi, J

ANWAR AHMED---Petitioner

Versus

Messrs NIB BANK LIMITED and another---Respondents

Constitutional Petition No.1326 and Miscellaneous No.6457 of 2008, decided on 7th July, 2008.

Constitution of Pakistan (1973)---

--- Art.199---Constitutional petition---Banker and customer---Creation of harassment to petitioner by Bank for being its defaulter---Undertaking of Bank not to take any action against petitioner in case of payment of outstanding loan amount by him---Validity---No presumption would be drawn against future intention of any person/defaulter---High Court directed Bank not to create undue harassment against petitioner; and that Bank, if needed, could take legal action against him yet.

Syed Afaq Ali for Petitioner.

Ghulam Hassan, Assistant Director, State Bank of Pakistan.

2009 C L D 1157

[Karachi]

Before Khilji Arif Hussain and Muhammad Karim Khan Agha, JJ

Messrs MILLWALA SONS LIMITED---Appellant

Versus

Messrs JAYMISSCO and another---Respondents

High Court Appeal No.150 of 1989, decided on 11th May, 2009.

(a) Qanun-e-Shahadat (10 of 1984)---

----Art.133---Fact not cross-examined---Effect---If any evidence is not disputed in cross-examination, then it is deemed to be an admitted fact.

Nur Jehan Begum v. Mujtaba Ali Naqvi 1991 SCMR 2300 and Sheraz Tufail v. State 2007 SCMR 518 rel.

(b) Contract Act (IX of 1872)---

----Ss.126 & 127---Interpretation of document---Contract of guarantee---Scope---Plea raised by appellant was that letter produced in evidence was a letter of guarantee---Validity---Guarantee needed involvement of three parties and letter produced in evidence involved only two parties, therefore, it could not fall within the definition of 'guarantee'---Letter in question was given by first respondent after the contract of sale between the other respondent and appellant had already been breached by the first respondent---Single Judge of High Court rightly found that effect of letter in question was substitution of liability from one respondent to other respondent and not a guarantee.

Ramchandra v. Shapurji AIR 1940 Bom. 315 and Bagha Co-operative Society v. Debi Mangal Prasad AIR 1937 Pat. 410 rel.

(c) Interpretation of documents---

----Category of document---Determination---Where document can be construed to fall within number of categories then it is up to Court to determine category/nature of document and its labelling is not critical.

Muhammad Rafiq v. Muhammad Nawaz 2001 CLC 318 rel.

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

----S.4---Civil Procedure Code (V of 1908), O.XXXIX, R.1---Promissory note-Scope-For a document to be regarded as promissory note, it must fulfil definition as set out in S.4 of Negotiable Instruments Act, 1881.

Brijraj v. Raghunandan AIR 1955 Raj. 85 (Vol. 42, C.N.28) and Gopaldas v. Ramdeo AIR 1957 Raj. 360 (V 44 C 138 Nov.) rel.

(e) Negotiable Instruments Act (XXVI of 1881)---

----S.4---Contract Act (IX of 1872), S.126---Civil Procedure Code (V of 1908), O.XXXVII, R.1---Law Reforms Ordinance (XII of 1972), S.3---Infra Court Appeal---Interpretation of document---Incorrect label of document-- Unstamped promissory note---Plaintiff sought recovery of amount against defendants on the basis of two letters claiming the same' to be promissory note---Validity---Letter in question contained an unconditional undertaking, to pay; a sum of money which was certain; a payment that was to be made to a person; and a signature on behalf of executant, therefore, the letter met all requirements of a promissory note---Failure to stamp promissory note would not exclude it from being enforceable---Letter in question was unclear in its labelling and its effect of passing on liability from one defendant to other defendant was not fully appreciated by plaintiff at the time should not debar plaintiff from seeking to recover money rightfully owed to him---Letter in question was whether called a letter of guarantee, a promissory note, an indemnity or by any other nomenclature its intention, as evidenced by correspondence was to create obligation on a defendant to make payment to plaintiff---High Court in High Court Appeal declined to allow defendant, who executed the letter, to wriggle out of his obligation to pay plaintiff under the letter simply because plaintiff based his bona fide demand on unclearly labelled and worded letter but which intention was clear at the time plaintiff sued the executant as opposed to judgment-debtor---High Court set aside the judgment passed by Single Judge of High Court and declared that letter in question was a promissory note and could be relied upon by plaintiff against defendant who executed the same-Infra-court Appeal was allowed accordingly.

State Engineering Corpn. Ltd. v. National Development Finance Corpn. 2006 SCMR 619; Ghulam Rasool v. Nazir of the Sindh High Court 1992 CLC 2490; National Bank of Pakistan v. Alam Industries Ltd. PLD 1992 Kar. 295; Rafique Hazquel Masih v. Bank Alfalah Ltd. 2005 SCMR 72; Adam Ali Agaria v. Asif Hussain 1996 MLD 322; Habib Bank Limited v. Shalimar Silk Mills Ltd. 1993, CLC 1295; Farid Akhtar Hadi v. Muhammad Latif Ghazi 1993 CLC 2015; Rahim Bakhsh v. Allah Jiwaya 1992 CLC 243; United Bank Ltd. v. Pakistan Industrial Credit 7 Investment Corpn. Ltd. 2002 CLD 1781 and Maxwell on the Interpretation of Statutes, Twelfith Edition 212 ref.

(f) Administration of justice---

----Technicalities should not be used in order to circumvent true intention of agreement between parties or as an excuse to avoid liability properly and willingly incurred.

Rahim Bakhsh v. Allah Jiwaya 1992 CLC 2433 and United Bank Ltd. v. Pakistan Industrial Credit 7 Investment Corpn. Ltd. 2002 CLD 1781 rel.

Qazi Faez Issa for Appellant.

Fazle Ghani Khan for Respondents.

Dates of hearing: 22nd and 23rd April, 2009.

2009 C L D 1177

[Karachi]

Before Ms. Soofia Latif, J

Mrs. YUBA JAMIL ANSARI---Plaintiff

Versus

BANK AL-FALAH LIMITED and another---Defendants

C.M.As. Nos.1605, 1607 and 7711 in Suits Nos.B-1 and B-38 of 2008, decided on 20th April, 2009.

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

----Ss.10 & 18---Specific Relief Act (I of 1877), Ss.42 & 54---Contract Act (IX of 1872), Ss.132, 133 & 134---Recovery of bank loan--Application for leave to defend the suit, grant of---Liability of mortgagor and guarantor---Scope---Rescheduling of loan---Blank documents---Bank filed suit for recovery of loan against borrower, guarantors and mortgagors, while declaratory suit was filed by mortgagor against bank---Guarantors stated that they had no knowledge about rescheduling of loan and their consent was not obtained---Mortgagor asserted that words "not accepted" were written on her property documents available with bank---Validity---On account of denial of parties, dispute could not be resolved without recording their evidence---For adjudicating bona fide question raised deep probe and investigation were required---It was also to be decided whether guarantors were bound for thing they had not guaranteed---Liability of mortgagor could only be thrust upon her in view of the documents executed by her---Defendants of both the suits made out prima facie case for grant of unconditional leave as the object received required detailed investigation through recording of evidence---Leave to appear was granted in circumstances.

1981 CLC 847; 1994 CLC 854; AIR 1935 PC 21; AIR 1932 Bom. 168; MR 1918 PC 210; PLD 1968 SC 83; 2009 CLD 460; 2003 CLD 905; 2002 CLD 1707; 2004 CLD 388; 2004 CLD 110; 2005 CLD 581; PLD 1963 SC 163; PLD 1996 SC 749; PLD 1991 SC 976; 1998 MLD 529; 2001 YLR 1244; 2006 CLD 1506; PLD 1997 Kar. 62; 1987 CLC 2364; 2006 CLD 178; 2003 CLD 1406; PLD 1994 Kar. 196; 2006 SCMR 619; PLD 1998 Kar. 278 and 2004 CLD 1741 ref.

PLD 1984 Kar. 211 and PLD 1986 Kar. 107 rel.

Abdul Sattar Lakhani for Plaintiff (in Suit No.B-1 of 2008 and in Suit No.B-28 of 2008 for Defendants).

Saalim Salam Ansari for Plaintiff (in Suit No.B-38 of 2008 and in Suit No.B-1 of 2008 for Defendants Nos.2 to 6).

2009 C L D 1195

[Karachi]

Before Salman Talibuddin, J

SAUDI PAK COMMERCIAL BANK LTD. through Attorney ---Plaintiff

Versus

NAZIMUDDIN and another---Defendants

Suit No.B-310 of 2007 and B-8 of 2008, decided on 18th May, 2009.

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

----Ss.9 & 10---Civil Procedure Code (V of 1908), O.XIII, R.1 & S.151---Suit for recovery of .loan---Leave to appear and defend suit--Application seeking permission to receive additional documents---Plaintiff filed application seeking permission to receive additional documents which had not been filed earlier---Defendant filed application to appear and defend suit---Documents sought to be produced were considered necessary by the plaintiff to its case and it would be in the interest of justice if the same were taken on the record---Effect, however, of doing so would be the grant of defendants' application filed under S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001 to appear and defend suit---That was so because defendants in their counter affidavit had challenged those documents---Since the document on which the plaintiff sought to rely in the suit had to be proved in evidence, application of the plaintiff seeking permission to receive additional documents was allowed---Natural consequence of that would be the grant of application of the defendants to appear and defend suit.

2009 C L D 1225

[Karachi]

Before Mrs. Qaiser Iqbal and Arshad Siraj Memon, JJ

Syed WAJAHAT HUSSAIN ZAIDI---Appellant

Versus

Messrs T.J. IBRAHIM & CO. through Official Assignee and 2 others---Respondents

High Court Appeal No. 33 of 2007, decided on 1st April, 2009.

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

----S.10---Appeal against interlocutory order---Maintainability---After order of company being wound up by Company Judge, appeal against interlocutory order lies before Division Bench of High Court---Where dispute is in respect of winding up proceedings, same lies within the terms of S.10 (1) of Companies Ordinance, 1984, before Supreme Court---Where company ordered to be wound up has paid up capital of not less than Rupees one million, direct appeal lies to Supreme Court and where company to be wound up has paid up capital of less than Rupees one million or having no share capital, such appeal lies only if Supreme Court grants leave to appeal.

Ibrahim Shamshi v. Bashir Ahmed Memon 2005 SCMR 1450; Ch. Jamil Ahmed v. Nippon Bobbin Company (Pakistan) Ltd. PLD 1991 Lah. 467; Messrs Industrial Development Bank of Pakistan v. Messrs Kamal Enterprises PLD 1995 Quatta 41; Lahore Development Authority v. Investment Corporation of Pakistan 2003 CLD 1764; Zakauddin v. Dastgir Investment and Management Ltd. (Liquidation) 2004 CLC 1037; Muhammad Bux v. Pakistan Industrial Credit Investment Corporation Limited 1999 SCMR 25; Muhammad Farooq. V. T.J Ebrahim and Company and Alliance Motors PLD 1999 Kar. 246; Mehbood Industries v. PICIC 1988 CLC 866 and Multiline Associate v. Ardeshir Cowasjee 1995 SCMR 362 ref.

Fakhruddin Khan v. Messrs Ruby Rice and General 2001 YLR 1997 and Kamaluddin Qureshi v. Ali International Co. and others Civil Appeals Nos. 1045 and 1221 of 1999, 378 of 2003, 320 of 2004 and Civil Petition No.2450 of 2001 rel.

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

----S.10---Law Reforms Ordinance (XII of 1972), S.3---Intra-court Appeal---Auction of property---Improvement of bid---Appellant was the highest bidder but Official Assignee got the bid improved in proceedings conducted on the following day---Plea raised by appellant was that such proceedings conducted by Official Assignee were illegal as the same were conducted behind his back---Validity---Signatures of appellant on improvement memo appeared to be different from his signatures on initial offer of appellant and with signatures in supporting affidavit to Intra-Court Appeal and Vakalatnama of appellant---Such fact had created doubt in the mind of Division Bench of High Court---Had the Official Assignee checked the signatures at improvement memo, the controversy would not have arisen-Such aspect of the matter might have escaped notice of Company Judge of High Court, while dismissing application filed by appellant---As the amount received on account of sale auction of the property was to be distributed to affectees, therefore, Division Bench of High Court, in the interest of all concerned, set aside the order passed by Company Judge of High Court and remanded proceedings for improvement of bid which were deemed to be pending Division Bench of High Court directed Official Assignee to call parties afresh for improvement of bid as the appellant had shown his desire to improve his bid---Infra-court Appeal was allowed accordingly.

Abrar Hassan for Appellant.

Sofia Saeed Shah for Respondent No.3.

Shafi Muhammad for Respondents.

Rizwan Ahmed Siddiqui and Abid S. Zubairi as Amicus Curiae.

Qadir Bux Umrani the learned Official Assignee.

2009 C L D 1271

[Karachi]

Before Khilji Arif Hussain and Arshad Noor Khan, JJ

NAVEED HAIDER---Appellant

Versus

Messrs NOMAN ABID CO. LTD.---Respondent

H.C. A. No. 28 of 2008 and C.M.A. No.141 of 2009, decided on 20th March, 2009.

Civil Procedure Code (V of 1908)---

----O.XXXVII, Rr.1 & 2---Law Reforms Ordinance (XII of 1972), S.3---Suit for recovery of money on the basis of dishonoured cheque---Unconditional leave---Plaintiff filed suit for recovery of Rs.21 million on the basis of dishonoured cheque issued by defendant in his favour---Defendant had business relationship with plaintiff who was a stock broker and was maintaining account of defendant for purchase of shares under his instructions-Plaintiff purchased shares on behalf of defendant and cheque for consideration of the shares issued by defendant was dishonoured---Single Judge of High Court granted leave to defend the suit on the condition of furnishing of surety for a sum of Rs.21 million---Plea raised by defendant was that in lieu of dishonoured cheque, he had issued pay order to plaintiff---Validity---Whether after the cheque in question was dishonoured, pay order of same amount was issued in respect of the amount pertaining to dishonoured cheque or it was under some other consideration---Such question could only be answered after recording of evidence---After coming to conclusion that defendant had plausible defence, he had become entitled for unconditional leave to defend the suit---Division Bench of High Court modified order passed by the Single Judge of High Court to the extent that defendant was entitled for grant of unconditional leave to defend the suit---Intra-Court Appeal was allowed in circumstances.

Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749; Pakistan Water and Power Development Authority (WAPDA) v. Messrs Sea Gold Traders and 2 others 2003 CLD 392 and Fine Textile Mills v. Haji Umar PLD 1969 SC 163 fol.

Bahzad Haider for Appellant.

Muhammad Anwar Tariq for Respondent.

2009 C L D 1276

[Karachi]

Before Khilji Arif Hussain and Muhammad Karim Khan Agha, JJ

WORLD AUTOMOBILES through Proprietor and others---Appellants

Versus

MUSLIM COMMERCIAL BANK LTD. and 4 others---Respondents

High Court Appeals Nos. 319, 320, 321, 323, 336 and 337 of 2008, decided on 21st May, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.19---Object of S.19 of Financial Institutions (Recovery of Finances) Ordinance, 2001 being to expedite recovery process and protect interests of genuine aggrieved parties prior to execution being permitted---Principles.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.19(7)---Compromise decree, execution of---Amendment/variation of compromise decree by parties out of Court---Validity---Parties by consent, out of Court, could vary/amend their own---Court sanctioned compromise decree not affecting its substance, but simply substituting one form of security With another being sufficient to repay debt---Such variations/amendments would not require seal of Court, but failure to have same endorsed by Court might be fatal to parties or one party seeking to rely thereon---Duty of Executing Court to determine, whether by new agreement, compromise decree had been varied, if so to what extent, and whether mortgage charge stood relinquished without any order of Court and/or parties had agreed for disposal of specified property and thereafter if decree remained unsatisfied, then mortgaged property might be put to auction---Principles.

Muhammad Ashraf v. Arshad Malik 2003 CLD 1310; Noor Hayat Industries (Pvt.) Ltd. v. Judge, Banking Court No.1 2004 CLD 1281; Farasat Jabeen v. United Bank Ltd. 2004 CLD 1586; Habib Ullah v. Bank of Khyber 2007 CLD 875; Mehran Solvent Extraction (Pvt.) Ltd. v. I. D. B. P 2008 CLD 844; Muhammad Hussain and Co. v. Habib Bank Ltd. 2005 CLD 1400; Nazir Ahmed Vaid v. Habib Bank A.G. Zurich 2005 CLD 1571; Muhammad Alamgir v. Bank of Punjab 2005 CLD 1408; Habib Bank Limited v. Service Fabrics Ltd. 2004 CLD 1117; Intercity Transport System v. Judge, Banking Court No.II 2004 CLD 466; Pakistan Industrial Leasing Corporation Ltd. v. Noorani Industries (Pvt.) Limited 2003 CLD 259; WAPDA v. Abdul Rauf PLD 2002 Lah. 268 and Muhammad Saleem v. Farida Saleem PLD 2006 Kar. 410 ref.

Kazim Hasan for Appellants.

Qazi Faez Issa for Respondents.

2009 C L D 1289

[Karachi]

Before Muhammad Karim Khan Agha, J

LIPHA LYONNAISE INDUSTRIELLE PHARMACEUTIQUE through Authorized Signatory---Appellant

Versus

REGISTRAR OF TRADE MARKS and another---Respondents

Miscellaneous Appeal No.35 of 2004, decided on 25th May, 2009.

(a) Speaking order---

---Not length of order, but its quality is important.

(b) Trade Marks Act (V of 1940)---

---Ss. 8(a) & 10(1)---Registration of trademark having name similar to that of an already registered trademark---Determination---Infringement or passing off in respect of earlier trademark---Test stated.

Whether a proposed trademark with a name similar to that of an already registered trademark can also be registered, or be regarded as infringement or passing off in respect of the earlier trademark, the test is whether through a similarity in name and pronunciation, the two trademarks are likely to cause confusion in the mind of the public.

Where only the prefix of the trademark (which is generic in nature) is similar and the suffixes are largely different, then there is lesser chance of confusion.

English Laboratories (Pvt.) Ltd. v. Chas A. Mendoza 1998 MLD 1234; In the matter of an application by Beck, Koller and Company England Limited for the registration of a Trade Mark, before the Assistant Comptroller 1947 RPC 76; Glaxo Laboratories Ltd. v. Asstt. Registrar, Trade Marks PLD 1977 Kar. 858 and Zenith Laboratory (Pak.) Ltd. v. British Drug Houses Ltd. PLD 1970 Dac. 772 rel.

(c) Trade Marks Act (V of 1940)---

----Ss.8(a) & 10(1)---"Gluconorm" and "Clucophage", both medicines being used for treatment of diabetes---Applications for registration of trademark "Gluconorm" opposed by holder of registered trademark "Glucophage"---Validity---Where only prefix of trademark (generic in nature) was similar and suffixes were largely different, then there would be lessor chance of confusion---Both such trademarks contained prefix "Gluco", which would not alone exclude applicant's product from being registered---Suffixes of both such marks being "Phage" and "Norm being entirely different in spelling and pronunciation from each other---Packing boxes of both such medicines were of different colours and showing different spelling of suffixes and chemical names underneath---Person interested in purchasing either of such medicines might have benefit of pharmacist's advice or medical practitioner---Public would not be confused by marks "Clucophage" and "Cluconorm"---Opposition against registration of trademark "Cluconorm" was dismissed in circumstances.

Rexona Proprietary Ltd. v. Majid Soap Works PLD 1956 Sindh 1; Zenith Laboratory (Pak) Ltd. v. British Drug Houses Ltd. PLD 1970 Dac. 772; Ram Kumar Jalan v. R.J. Wood & Co. AIR 1941 Lah. 262; Burney's Industrial and Commercial Co. Ltd. v. Rehman Match Works PLD 1983 Kar. 357; Kabushiki Kaisha Toshiba v. Muhammad Altaf PLD 1991 SC 27; Seven-Up Company v. Kohinoor Thread Ball Factory PLD 1990 SC 313; Al-Anis Laboratories v. Al-Chemist 1987 MLD 2823; Platinum Pharmaceuticals Co. (Pvt.) Ltd. v. Stand Pharm Pakistan (Pvt.) Ltd 2006 CLD 1109; Glaxo Laboratories Ltd. v. Assistant Registrar, Trade Marks PLD 1977 Kar. 858; Indo-Pharma Pharmaceutical Works Ltd. v. Citadel Fine Pharmaceuticals Ltd. AIR 1998 Mad. 347; J.R. Kapoor v. Micronix India 1994(3) SCC 215; S.B.L. Ltd. v. Himalaya Drug Co. AIR 1998 Del. 126; E.Q. Squibb & Sons Inc. v. Curewel India Ltd. AIR 1987 Del. 197; Hamdard N.F. (Pak.) v. E.I.Du Pont De Nemours & Co. 1987 CLC 1937; Welcome Foundation Ltd. v. Khawar 1989 MLD 2516; Muhammad Yaqoob Lasani Engineering Company v. Punjab Engineering Company 1992 CLC 2036 and Corn. Products v. Shangrila Food Products AIR 1960 SC 142 ref.

Bayer A.G. v. Macter International (Pvt.) Ltd. 2003 CLD 794; English Laboratories (Pvt.) Ltd. v. Chas A. Mendoza 1998 MLD 1234; In the matter of an application by Beck, Koller and Company England Limited for the registration of a Trade Mark, before the Assistant Comptroller 1947 RPC 76; Glaxo Laboratories Ltd. v. Asstt. Registrar, Trade Marks PLD 1977 Kar. 858 and Zenith Laboratory (Pak.) Ltd. v. British Drug Houses Ltd. PLD 1970 Dac. 772 rel.

Ms. Amna Salman for Appellant. Respondent No.1 in Person.

Ms. Saira Shaikh for Respondent No.2.

2009 C L D 1321

[Karachi]

Before Khalid Ali Z. Qazi, J

ROYAL GROUP through Authorized Attorney---Plaintiff

Versus

ASIM MATCH (PVT.) LTD.---Defendant

Suit No. 1261 and C.M.A. No.7989 of 2005, decided on 12th May, 2009.

Trade Marks Act (V of 1940)---

----Ss.2, 21, 43 & 74---Specific Relief Act (I of 1877), S.54---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Interim injunction, grant of---Infringement of, trade mark---Recovery of damages---Same design and colour scheme---Pendency of application for registration of trade mark-Effect-Plaintiff firm alleged that trade mark "Three Coins Safety Matches" was its exclusive trade mark and defendant-company was infringing its trade mark---Validity--Application for registration of trade mark of plaintiff firm was pending before competent authority and defendant company did not file any opposition before the authority---Defendant company did not even file its own application for registration of disputed trade mark in its favour---Suit filed by plaintiff was maintainable for alleged infringements and prima facie, case was established, balance of convenience was in favour of plaintiff who would suffer irreparable loss if injunction was not granted---High Court granted interim injunction in favour of plaintiff---Application was allowed in circumstances.

Tapal Tea (Pvt.) Company Ltd. v. Shahs Tea Company 2002 CLD 113; Messrs Mehran Ghee Mills (Pvt.) Ltd. and others v. Messrs Chiltan Ghee Mill (Pvt.). Ltd. and others 2001 SCMR 967 and P.L. Anwar Basha v. M. Natarajan AIR 1980 Mad. 56 rel.

Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090; Anwer v. The Golden Pen Manufacturing Company PLD 1955 Sindh 345 and Dabur India Ltd. v. Hilal Confectionary (Pvt.) Ltd. PLD 2000 Kar. 139 distinguished.

Muhammad Shahzad Ashraf for Plaintiff.

Neel Kishave for Defendant.

2009 C L D 1329

[Karachi]

Before Nadeem Azhar Siddiqi, J

AMERICAN LIFE INSURANCE COMPANY (PAKISTAN) LTD.---Appellant

Versus

COMMISSIONER, SINDH EMPLOYEES SOCIAL SECURITY INSTITUTION and others---Respondents

Miscellaneous Appeal No.13 of 2006, decided on 23rd May, 2009.

(a) Provincial Employees Social Security Ordinance (X of 1965)---

----S.59---Civil Procedure Code (V of 1908), O.XXIX, R.1---Companies Ordinance (XLVII of 1984), S.17---Appeal by company through a person having authority letter of its Chief Executive Officer---Maintainability---Resolution of Board of Directors of company authorizing its Chief Executive Officer through power of attorney to institute and defend legal proceedings with further powers to delegate such powers to another person---Authority letter not signed by Chief Executive Officer, but signed by someone else on his behalf---Validity---Documents creating rights and liabilities could be signed only by a person duly authorized under a valid document---Person having signed authority letter Was not shown to be sub-delegatee of Chief Executive Officer/attorney of company---Authority letter was not signed by a person authorized by company to act on its behalf or delegate such powers to another person---Chief Executive Officer/attorney of company should have himself either filed appeal or authorized another person to file same---Filing of suit/appeal on behalf of company by an unauthorized person was not an act, which could be ratified by a subsequent resolution---Legal proceedings on behalf of company instituted through a person not duly authorized would be nullity in eye of law---High Court appeal dismissed being not maintainable.

Abdul Rahim and others v. United Bank Ltd. PLD 1997 Kar. 62; Dr. S.M. Rab v. National Refinery Limited and another PLD 2005 Kar. 478; Messrs Razo (Pvt.) Limited v. Director, Employees Old Age Benefit Institution 2005 CLD 1208 and Javedan Cement Limited v. Director, SESSI and others 2008 PLC 312 ref.

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

---O.XXIX, R.1---Suit or appeal on behalf of company filed by an unauthorized person not an act to be ratified by a subsequent resolution---Such proceedings would be nullity in eye of law---Principles.

Filing of a suit/appeal by an unauthorized person is not an act, which can be ratified or clothed with legality by a subsequent resolution/authorization conferring on him such powers.

The law requires that the person filing/instituting legal proceedings on behalf of a company should be duly empowered /authorized to do so. Therefore, if any legal proceedings on behalf of a company are filed by a person not duly empowered/ authorized to do so; such legal proceedings would be nullity in the eye of law.

(c) Administration of justice---

----When law required doing of a thing in a particular manner, then same could be done in such manner only or not at all.

Khurrarn Rasheed for Appellant.

Jawwad Sarwana for Respondent.

2009 C L D 1336

[Karachi]

Before Mushir Alam and Safdar Ali Bhutto, JJ

FATEH MUHAMMAD AGHA and another---Petitioners

Versus

CITY DISTRICT GOVERNMENT, KARACHI through District Coordination Officer and 5 others---Respondents

C.P. No.D-143 of 2007, decided on 16th April, 2009.

Contract Act (IX of 1872)---

----S. 2(f)---Public auction---Authority reserving right to accept or reject bid/offer without assigning any reason---Scope---Such right and discretion to cancel bid/offer must be exercised fairly and equitably, but before its acceptance by competent authority--Binding contract would come into being after acceptance of bid/offer, .and then authority would have no right and discretion to reject bid/offer---Signing of formal agreement etc., would be procedural requirements---Principles.

Authority may reserve to itself right to accept or reject, bid/offer without assigning any reason, provided such authority is exercised with circumspection, due care and utmost responsibility. Such reservation of authority to reject the bid does not clothe the public functionary with brazen and arbitrary power to reject the offer merely because it possesses such power and/or that it reserved to itself such power. Such right or reservation to cancel or revoke the bid could be retained till the offer is not accepted by the competent authority as reserved under the invitation or offer. Once that stage is crossed and the competent authority approves the bid/offer, a binding contract comes into being. Signing of the formal agreement etc., is but procedural requirements.

Public functionary has to exercise its authority with all care and diligence. Once offer is invited on stated terms and conditions, adherence to representation and commitment is obligated upon such functionary. Onerous responsibility is cast upon public functionary to establish and regain its credibility and public trust and confidence in discharge of its public duties and functions, which is fast eroding. There is serious dearth of credibility in the public functionaries. All possible efforts should be made by the public functionary to live up to commitments and representation made by it and adhere to the commitment and live up to the expectation of the common citizen in the realm of contractual obligation committed by it in discharge of its statutory duties.

The discretion and right reserved to reject bid or offer are to be exercised fairly, equitably and before the acceptance by the competent authority. Once bid is accepted by the competent authority, no more discretion to cancel the auction is retained by the Authority.

Syed Masroor Ahmed Alvi for Petitioners.

Manzoor Ahmed for Respondents.

Sarwar Khan, A.A.-G on Court Notice.

Date of hearing: 16th April, 2009.

2009 C L D 1340

[Karachi]

Before Mrs. Qaiser Iqbal and Arshad Siraj Memon, JJ

LIGHT INDUSTRIES (PVT.) LTD. Through Chief Executive---Appellant

Versus

Messrs ZSK STICKMASCHINEN GMBH through Attorney and another---Respondents

High Court Appeal No.32 of 2007, decided on 5th June, 2009.

(a) Interpretation of statutes---

----Law is required to be interpreted in such a manner that it should be saved rather than destroyed---Courts should lean in favour of upholding constitutionality of legislation and it is, therefore, incumbent upon the court to be extremely reluctant to strike down laws as constitutionally such power should be exercised only when absolutely necessary, for injudicious exercise of such power might result in serious consequences.

Province of East Pakistan v. Sirajul Haq Patwari PLD 1966 SC 854 and Multiline Associates v. Ardeshir Cowasjee 1995 SCMR 362 ref.

(b) Contract Act (IX of 1872)---

----S.28---Civil Procedure Code (V of 1908), Ss.20 & 9---Principal and agent---Suit of plaintiff (agent) was stayed on the ground that there existed an exclusive foreign jurisdiction clause in the agreement---Covenants in the agreement and the contract had addressed the controversy as the same were not contrary to the public policy nor contravened the provisions laid down in S.28 Contract Act, 1872 nor the same violated procedural law---In view of relevant clause of the agreement, contractual relations being subject to foreign law and both the parties having agreed to fulfil all obligations of the contract in foreign court having exclusive jurisdiction, there was no ambiguity in the mind of contracting party---Contention was that relief claimed in the suit could not be granted by the court of foreign jurisdiction which may deprive plaintiff from legitimate judicious advantage---Held, question of inconvenience to be faced by anyone of the parties was negated on account of reciprocal agreement between two parties, decree passed- by High Court in Pakistan could not be executed in the foreign country as foreign judgment; there being no reciprocal agreement between the two governments to execution of such decrees--Appeal was dismissed.

CGM (Compagnie General Maritime v. Hussain Akbar 2002 CLD Kar. 1528; State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393; Standard Insurance Company v. Pak Garments Ltd. 1998 SCMR 1239 and M.A. Chowdhury v. Messrs Misui, O.S.L. Lines Ltd. PLD 1970 SC 373 ref.

Agha Zafar Ahmed for Appellant.

Jawad A. Sarwana for Respondent No.1.

Date of hearing: 19th March, 2008.

2009 C L D 1346

[Karachi]

Before Ms. Soofia Latif, J

HABIB BANK LTD.---Plaintiff

Versus

PARAGON INDUSTRIES (PVT.) LTD. through Chief Executive and 5 others---Defendants

Suit No.B-75 and C.M.As. No5.11320, 11321 of 2008, decided on 26th May, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (LXVI of 2001)---

----S.10--Application for leave to defend---Maintainability---Suit for recovery of finance was filed against company and its directors--Application for leave to defend the suit was filed by a person who had been authorized by directors through resolution of the company but no power of attorney or any authority existed in his favour on behalf of directors---Validity---Resolution was signed by directors of company and not by them in their personal capacity---Except such resolution no other authority letter or power of attorney had been given by the defendants in their personal capacity, nor any affidavit of defendants was filed in support of petition, therefore, the defendants could not claim to have filed any application on their behalf---Application was considered to have only filed by company being authorized by resolution in circumstances.

1998 CLC 1152 and 2004 CLD 1227 rel.

(b) Financial Institutions (Recovery of Finances) Ordinance (LXVI of 2001)---

----S. 10---Application for leave to defend the suit---Mandatory requirements--Application for leave' to defend the suit filed by defendants did not fulfil mandatory requirements of S.10 (3), (4) and (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and no sufficient cause was shown in their application for their inability to comply with the requirements---Effect---Such application for leave to defend the suit was liable to be dismissed under S.10 (6) of Financial Institutions (Recovery of Finances) Ordinance, 2001.

Bank of Khyber v. Messrs Spencer Distribution Ltd. 2003 CLD 1406; Allied Bank of Pakistan Ltd. v. Mohib Fabric Industries Ltd. 2004 CLD 716; Habib Bank Ltd. v. Messrs Sabcos (Pvt.) Ltd. 2006 CLD 244 and Sandi Pak Industrial and Agriculture Investment Company (Pvt.) Ltd. v. Mohib Textile Mills Ltd. and others 2002 CLD 1170 rel.

(c) Financial Institutions (Recovery of Finances) Ordinance (LXVI of 2001)---

----Ss.9 & 10---Negotiable Instruments Act (XXVI of 1881), S.20---Recovery of bank loan---Application for leave to defend the suit---Blank documents---Effect---Defendants claimed that blank documents were got signed by bank at the time of sanction of loan---Validity---If documents were given blank, even then in view of S.20 of Negotiable Instruments Act, 1881, defendants were. estopped to challenge legality, validity and genuineness of such documents---In view of execution of personal guarantees and other documents, defendants 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 failed to raise any serious and bona fide dispute warranting grant of leave to defend the suit---Plaint was verified on oath, therefore, allegations made therein were presumed to be admitted---Bank had produced photocopies of all documents on the basis of which suit was filed, execution whereof had been admitted by defendants in their application for leave to defend the suit---Statement of accounts was duly verified/certified under Bankers' Books Evidence Act, 1891, to which presumption of correctness was attached---There was no rebuttal by defendants of documents placed by bank on record---Suit was decreed in circumstances.

Muhammad Sharif v. Muhammad Hashim Paracha and others PLD 1987 Kar. 76; Abdul Aziz v. Mahmoodul Hassan and others 1988 CLC 337; Prudential Commercial Bank v. Hyderi Ghee Industries Ltd and others 1999 MLD 1694; Bank of Khyber v. Spender Distributors 2003 CLD 1406 and Bazm-e-Salat and others v. Messrs united Bank Ltd. PLD 1989 Kar. 150 rel.

Zeeshan Energy Ltd and others v. Faisal Bank Ltd. 2004 CLD 1741; Messrs International Traders through Proprietorship and others v. Union Bank Limited 2003 CLD 1464; Messrs Alma Industries (Pvt.) Ltd. and others v. Allied Bank of Pakistan Limited 2003 CLD 1770; Karim Bakhsh v. House Building Finance Corporation 2004 CLD 212; Tariq Javed and another v. National Bank of Pakistan 2004 CLD 838; PLD 2008 SC 140; CLD 2005 Law Notes 94; 2002 CLD 876; Mst. Mahmooda Begum and others v. Major Malik Muhammad Ishaq and others 1984 SCMR 890; Mst. Hawa v. Muhammad Yousuf and others PLD 1969 Kar. 324 and Messrs Ideal Life Insurance Co. Ltd. and another v. Mst. Khairunnisa A.G. Mirza 1980 CLC 1375 ref.

(d) Pardanashin lady---

----Evidence---Scope---Legal protection given to paradanashin or illiterate woman cannot be transmuted into legal disability.

Nadeem Akhtar for Plaintiff.

Ramesh Kumar for Defendants Nos. 1 to 5.

Neel Kashev for Defendant No.6.

2009 C L D 1358

[Karachi]

Before Muhammad Karim Khan Agha, J

AL-MAL SECURITIES AND SERVICES LTD.---Plaintiff

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Joint Director, Securities Market Division and 2 others---Defendants

Civil Suit No.1343 of 2008, decided on 2nd June, 2009.

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

----Ss.42 & 54---Central Depository Company (Establishment and Regulation) Rules, 1996, R.7---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.6 (g)---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Interim injunction, grant of-Prima facie case---Proof---Suspension of brokerage house operation---Plaintiff was a brokerage house and authorities suspended its operation on the allegation that it traded non-existent shares of a Textile Mill--Authorities contended that Chief Executive Officer of plaintiff was one of the directors of the Mill in question who played major role in floating non-existent shares---Validity---Existence of prima facie case, irreparable damage or injury and balance of convenience were three ingredients under O.XXXIX, Rr.1 and 2 C.P.C. which should have been met for grant of temporary injunction---Plaintiff had to show that for stay to be granted, all said three ingredients were satisfied---Plaintiff failed to make out a prima facie case, as there was ample documentary evidence on file to link plaintiff to the Mill in question and in particular, plaints Chief Executive, who was also a director and shareholder in the Mill, who seemed to be playing a prominent role in management of the Mill---To ensure that other innocent customers of plaintiff, who had inadvertently been caught up in the matter through no fault of their own, would not suffer undue hardship, High Court directed the authorities to put in place a mechanism whereby customers of plaintiff could move their accounts to other brokerage houses, if they chose so---High Court declined to suspend notice issued by authorities under R. 7 of Central Depository Company (Establishment and Regulation), Rules, 1996 read with S.6 (g) of Security and Exchange Commission of Pakistan Act, 1997--Application was dismissed accordingly.

Collector, Sahiwal v. Muhammad Akhtar 1971 SCMR 681 ref.

(b) Securities and Exchange Commission of Pakistan Act (XLII of 1997)---

----S.6 (g)---Securities and Exchange Commission of. Pakistan is essential that public should be protected from any potential fraud---It is also obligation on regulatory body like Security and Exchange Commission of Pakistan to act in advance if need be, in order to protect public interest.

Abdul Wahid v. Securities and Exchange Commission of Pakistan 2008 CLD 57 and Securities and Exchange Board of India v. Alka Synthetics Ltd AIR 1999 Gujarat 221 rel.

Shahab Sarki for Plaintiff.

Ejaz Ahmed for Defendants Nos. 1 and 3.

Jehanzeb Awan for Defendant No.2.

Mrs. Masooda Qureshi for Intervenor.

2009 C L D 1367

[Karachi]

Before Muharram G. Baloch, J

HABIB BANK LTD. through Authorized Attorneys---Plaintiff

Versus

Messrs WISDOM EDUCATION SYSTEM (PVT.) LTD. and 6 others---Defendants

Suits Nos.B-44 and C. M.As Nos.6418, 8420, 8421 of 2008, decided on 29th May, 2009.

Financial Institutions (Recovery of Finances) Ordinance (LXVI of 2001)---

----S.10---Limitation Act (IX of 1908), S.4---Application for leave to defend the suit-Limitation---Period of vacations---Effect---Bank contended that notice was published on 19-6-2008 and application was filed by defendant on 2-8-2008, therefore, the same was barred by time---Defendant raised the plea that period of limitation was secured under S.4 of Limitation Act, 1908 and cheques which were alleged to have been dishonoured were reissued and date of final payment had yet to come---Validity---Period during which Court remained closed on account of vacations, such period had to be excluded for computation of limitation as provided by S.4 of Limitation Act, 1908, therefore, application for leave to defend the suit was within time---Question of law and facts in respect of filing of suit before date of repayment and that the instalments were paid or not was to be probed---Defendants succeeded to make plausible case for grant of leave to defend---Application was allowed.

National Bank of Pakistan v. Messrs Shoaib Corporation and another 2004 CLD 631; Asad Pervaiz v. Habib Bank Ltd. 2005 CLD 1525; Amtul Rehman Industries (Pvt.) Ltd. v. Habib Bank Limited 2005 CLD 1746; Habib-ur-Rehman v. Judge Banking Court No.4 2006 CLD 217; Mst. Amena Bibi v. Abdul Haqees 2000 SCMR 675; First Grindlays Modaraba v. Pakland Cement Ltd 2000 CLD 2017; Muhammad Sharif v. Rehmat Khan 2003 SCMR 1346, Rubina Jamshed v. United Bank Ltd. 2005 CLD 50; Shahid Farooq Sheikh v. Allied Bank of Pakistan Ltd 2005 CLD 1489; Muhammad Shareef v. Muhammad Ramzan 2006 CLC 618; Fazal Karim v. Ghulam Jilani 1975 SCMR 452; Ikramullah v. Sajid Jamal 1980 SCMR 375 and Port Muhammad Bin Qasim v. National Insurance Corporation, Karachi 1983 CLC 3126 ref.

Shakeel Pervez Bhatti for Plaintiff.

Qazi Faez Isa for Defendants.

2009 C L D 1383

[Karachi]

Before Arshad Noor Khan and Muhammad Ismail Bhutto, JJ

NUSRULLAH and 2 others---Appellants

Versus

UNITED BANK LIMITED and 6 others---Respondents

Ist Civil Appeal No.D-1 and C.M.A. No. 24 of 2009, decided on 7th May, 2009.

(a) Review---

--Appeal against dismissal of review application is not competent.

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

---S. 12(2)--Allegation of fraud---Particular of fraud must be specified in the application with particularity and in absence of any such particulars, plea of fraud could not be considered.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S. 15--Auction of property---Process of selling the property to satisfy the decree had gone much ahead---No relief at a belated stage could be granted to the objector.

Muhammad Ikhlaq Memon v. Zakaria Ghani and others PLD 2005 SC 819 and Messrs Rasu Food Industries and another v. Messrs Pakistan Industrial Leasing Cooperation Limited and others 2005 SCMR 1643 fol.

Sarfraz Ahmad Akhund for Appellants.

Haleem Siddiqui for Respondent No.1.

Ali Hyder Dareshani for Respondent No.7.

Zulfiqar Ali Naich for Respondents Nos.4 and 6.

Mukesh Kumar for Respondent No.5.

Nemo for Respondents Nos.2 and 3.

2009 C L D 1398

[Karachi]

Before Muharrem G. Baloch, J

Messrs INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN ---Plaintiff

Versus

Messrs EURO CERAMICS LIMITED and another-Defendants

Suit No.B-34 of 2004, decided on 12th June, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 8---Suit for recovery of loan---Version of witnesses in respect of the transaction between the parties and procured arrangement was not controverted specifically---Plaintiff/Bank having discharged its burden whereby proving that the transaction between the parties and procured arrangement was unconscionable, without consideration and being not bona fide was also in violation of S.8, Financial Institutions (Recovery of Finances) Ordinance, 2001.

Taufiq Textile Mills (Pvt.) Ltd. v. Industrial Development Bank of Pakistan PLD 1999 Kar. 71.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 8---Suit for recovery of loan---Contention of plaintiff/Bank was that defendant (No.2) was the beneficiary substituted defendant (No.1) for the repayment of the loan by a device not acceptable in accordance with S.8 of Financial Institutions (Recovery of Finances) Ordinance, 2001, thus, could not be a privity---Contention of the plaintiff that the defendant (No.2) stepped into the contract/package agreement made with the defendant (No.1) was not denied by both the defendants---Held, under such circumstances, it could not be accepted that there was any transaction with the defendant (No.2) independently, but it was introduced by defendant (No.1) to discharge its liability and as such the defendant (No. 2) was not privity to the transaction made with the defendant (No.1).

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 8(2)---Industrial Development Bank of Pakistan Ordinance (XXXI of 1961), S.39---Suit for recovery of loan---Contention of the defendants was that suit was not maintainable being without approval of the Board of Directors of the Bank---Board of Directors of the Bank had resolved about the suit in question and said resolution was notified in the official Gazette wherein one "A" was empowered to verify the plaint for the suit and also sworn affidavit and was to produce himself as witness---Held, objections of the defendants on the technical ground was inconsistent with the material and the merits of the case on record and was also inconsistent with the Industrial Development Bank of Pakistan Ordinance, 1961---Suit having been filed with approval of the Board of Directors of the Bank, same was maintainable against the defendants.

PLD 1999 Kar. 71 fol.

PLD 2002 Kar. 426 and 1994 CLC 2133 ref.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 8---Contract Act (IX of 1872), Ss.2(g), 2(j) & 56---Suit for recovery of loan---Settlement packages between the plaintiff/Bank and the defendant (No.1) suffering from illegality---Where there was a contract made enforceable by operation of law the fraudulent beneficiary (defendant No.2) was to compensate---Amount was payable by the consideration not being bona fide and the defendants (1 and 2) jointly and severally had to compensate the Bank for all the dues subject to all deductions, if any, for the amount deposited or accrued interest yield upon that amount deposited---Plaintiff/Bank was entitled to revoke to package arrangements---Settlement packages between the plaintiff/Bank and defendant (No.1) suffered from illegality, therefrom, the collaterals, such as guarantees/personal securities having been released and discharged and the charges, liens, claim etc. on the movable and immovable assets having been released and withdrawn by the Bank in terms of S.8, Financial Institutions (Recovery of Finances) Ordinance, 2001 and so also in terms of package arrangements made-Principles.

PLD 1976 SC 258 and PLD 1968 Kar. 196 ref.

(e) Banker and customer---

----Interest on fixed deposit---Interest is not static but variable as being fixed from time to time by the State Bank of Pakistan which was binding on both the parties, therefore, no agreement could subsist on the fixed interest basis and as such the rates are variable as fixed by the State Bank of Pakistan-Bank was entitled to reduce the agreed interest on the customer's long term fixed deposit.

Habib-ur-Rehman for Plaintiff.

Ghulam Abbas Pishori for Defendant No.1.

Zahid F. Ebrahim for Defendant No.2.

Date of hearing: 22nd April, 2009.

2009 C L D 1440

[Karachi]

Before Anwar Zaheer Jamali and Faisal Arab, JJ

Messrs KINZA FASHION (PVT.) LTD. and others---Appellants

Versus

Messrs HABIB BANK LTD. and another---Respondents

First Appeal No.56 of 2008, decided on 17th February, 2009.

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

----Ss.9, 10 & 22---Suit for recovery of loan---Leave to defend suit---Banking Court dismissed the leave to defend application in a hasty manner without examining in detail, the defence put up by the defendant and absence of any material with regard to availing the FATR facility---Impugned order passed on the application and the consequent decree, could not be sustained---Judgment and decree passed in favour of plaintiff--Bank, was set aside and case was remanded to Banking Court with the direction to decide the leave to defend application of defendant afresh.

Khaleeq Ahmad for Appellant.

Salman Huda for Respondent No.1.

2009 C L D 1446

[Karachi]

Before Ali Sain Dino Metlo and Bin Yamin, JJ

HABIB BANK LIMITED---Appellant

Versus

MUHAMMAD ANEES HAMEED---Respondent

First Appeal No.14 of 2007, decided on 3rd March, 2009.

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

----Ss.19 & 22---Limitation Act (IX of 1908), Ss.3 & 5---Execution of decree---First appeal---Limitation---Condonation of delay--Appeal which was filed after 11 days of the expiry of period of limitation, was sought to be admitted for hearing by condoning delay on the ground that decree holder could not file application for certified copy of the impugned order as the file was in the chamber of Presiding Officer for the purpose of writing the order--In order to admit an appeal for hearing filed after the expiry of period of limitation prescribed therefor, two questions were very pertinent for consideration: First, whether the court had power to do so; secondly, whether the appellant had sufficient cause for not preferring the appeal within the prescribed period---Section 5 of the Limitation Act, 1908 provided that appeal etc. could be admitted after the period of limitation, when appellant could satisfy the court that he had sufficient cause for not preferring appeal or making the application, within such period---If a person had sufficient cause for not preferring appeal within the prescribed period of limitation, it would not make any difference, whether the period was prescribed by the Limitation Act, 1908 or by any other law---Sufficiency or insufficiency of cause would depend upon nature of the cause and not upon the law prescribing the period of limitation---It would be anomalous to say that the legislature intended to admit appeals filed after the expiry of period of limitation prescribed by the Limitation Act, 1908 and not to admit appeals for which the period of limitation was prescribed by any other law---Right of appeal was a very important right originating from the Injunctions of Islam-Suet an important right could not be denied on any technical ground and while interpreting a law, principle of advancement of remedy and suppression of mischief would have to be kept in mind-In the present case, appellant had no sufficient cause for not filing appeal within the period of limitation prescribed thereof---No case for admitting the appeal for hearing was made out even under S.5 of Limitation Act, 1908.

Federation of Pakistan v. Public At Large PLD 1988 SC 202; Pakistan through Secretary Ministry of Defence v. The General Public PLD 1989. SC 6 and Abdul Ghaffar and others v. Mst. Mumtaz PLD 1.982 SC 88 ref.

Hassan Akbar for Appellant.

Nemo for Respondent.

Date of hearing: 3rd March, 2009.

2009 C L D 1451

[Karachi]

Before Sajjad Ali Shah, J

ALLIED BANK OF PAKISTAN LTD.-Decree-holder

Versus

FATEH TEXTILE MILLS LTD. and 9 others---Judgment-debtors

Execution Application No.69 of 2004, decided on 12th June, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 7, 15 &19---Suit for recovery of loan---Attachment of property---Execution of decree---Objection by judgment-debtors---Order of court to deposit security of equal amount by judgment­-debtors---Offer of certain properties as security by the judgment­debtors---While evaluating a property, it was also to be kept in mind that mere permission to, use the property for a particular purpose did not necessarily change its value unless it was suitably located---Principles.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 7, 15 & 19---State Bank of Pakistan BPD Circular No.29 of 2002, dated 15-10-2002---Civil Procedure Code (V of 1908), O.XXI, Rr.29 & 23-A---Suit for recovery of loan---Attachment of property---Execution of decree---Objection by judgment-debtors seeking stay of execution---Direction for furnishing security as envisaged under R.23-A, O.XXI, C.P.C.---Failure of judgment-debtors to furnish required security---Effect---Pier. of the judgment-debtors to stay the proceedings under R.29 of O.XXI, C.P.C., till the suit filed by the judgment-debtors against the decree-holder was decided, could not be beneficially examined unless the claim of judgment-debtors against the decree-holder and the object of R.29 of O.XXI, C.P.C. was looked into which appeared to be two fold firstly to enable the judgment-debtor and decree-holder to adjust their claims against each other and secondly to prevent multiplicity of execution proceedings---In the present case, there was no independent recovery claim of the judgment-debtors against the decree-holder but the judgment-debtors in one of their suits had challenged the consent decree by pleading their entitlement under State Bank of Pakistan B.P.D. Circular No.29 of 2002, the benefit whereof was refused to the judgment-debtors, whereas in another suit, satisfaction of the decree by an uncertified adjustment settlement outside the court was claimed-Record showed that all the objections which the judgment-debtors had tried to raise by the application, were raised in their objections to execution and High Court had directed furnishing of security as. envisaged under O.XXI, R.23-A, C.P.C. which order the judgment-debtors, till date, had failed to comply---Even otherwise, while exercising powers under O.XXI, R.29, C.P.C., the executing Court had no power to order stay of execution in a case where the suit against the decree-holder was for declaration that the decree stood satisfied by an Uncertified adjustment outside the court--Application by the judgment-debtors appeared to have been filed not only to circumvent the provisions of O.XXI, R.23-A, C.P.C. or to stealthily seek review of an order, but also to delay the recovery proceedings---No cogent reasons to stay the execution proceedings having been given, application in this behalf was rejected and execution was allowed as prayed.

Munib Akhtar for Decree-holder.

Farogh Naseem for judgment-debtors.

2009 C L D 1466

[Karachi]

Before Faisal Arab and Bin Yamin, JJ

Messrs ATLAS CO. SHIPPING LTD. and another---Appellants

Versus

FARID RIZVI and .2 others---Respondents

Adm. Appeal No.2 of 2007, decided on 9th April, 2009.

Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)---

----Ss.3(2)(b) & 7---Civil Procedure Code (V of 1908), O.VII, R.11---Suit for damages---Application for, rejection of plaint---Plaintiff filed admiralty suit claiming damages against defendants who were owner and agent of ship "M.T. Vega" and also against defendants who were owner and agent of ship "M.T. Zalea"---According to contract of employment, plaintiff was to serve as Chief Officer on board of the ship "M.T. Vega" and one of the terms of employment was that the plaintiffs services were also assignable to any other ship owned by the owner of ship M.T. Vega---On the basis of said term plaintiff was directed to serve on board of the ship "M.T. Zalea" and while performing his duties there he suffered face and eye injuries---Plaintiff was shifted to a hospital abroad for treatment and from there he was repatriated to Pakistan, where he filed suit against owner and agent of ship M.T. Zalea claiming damages on account of injuries which he sustained on board of ship M.T. Zalea"---Defendants filed application for rejection of plaint on the ground that no cause of action had accrued to the plaintiff against them and also prayed that their names be struck off from the array of defendants as the claim for damages against them did not fall within the scope of admiralty jurisdiction as provided under Admiralty Jurisdiction of High Courts Ordinance, 1980---Single Judge of High Court had dismissed the application of defendants, holding that suit was rightly filed in Admiralty Jurisdiction of High Court---Defendants had impugned that Order-in-Appeal-Claim of the plaintiff for damages raised in the suit against defendants fell within the ambit of clause (b) of subsection (2) of S.3 of Admiralty Jurisdiction of High Courts' Ordinance, 1980---Success of the plaintiffs claim for damages against the defendants, would certainly depend on the evidence that was to be led in the suit---Suit should continue to proceed in the Admiralty Jurisdiction of High Court; however, determination of jurisdiction at times would depend upon determination of certain facts, which in turn were to be determined after evidence would be adduced in the case---While finally deciding the suit, it would be open to the trial Court to also decide the question on the basis of contract of employment that was executed between the plaintiff and 'defendant-Conclusion drawn by Single Judge in the impugned order, could not be differed with---Order accordingly.

M. Shaiq Usmani for Appellants.

Munir A. Malik for Respondents.

2009 C L D 1471

[Karachi]

Before Sajjad Ali Shah, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

Messrs KARACHI TANK TERMINAL (PVT.) LTD. and 4 others---Defendants

Suit No.969 of 2000 and C.M. As. Nos.2268 of 2008, 1905 of 2009, decided on 15th May, 2009.

Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance, (XXV of 1997)---

----S.7---Civil Procedure Code (V of 1908), O.II, R.2---Suit for recovery of loan-Cause of action in the previously instituted .suit for which the plaintiff held a decree and the present suit appeared to be the one and the same and the plaintiff could not competently file two separate suits by splitting up his claim and that too without disclosing the fact of having earlier obtained money decree on same cause or advancing any reason for filing separate suit and that also without permission of the court---Explanation to sub-rule (3) of R.2 of O.II, C.P.C. made it clear that successive breach of one obligation would be deemed to give rise to one cause of action and, in the present case, non-payment of the finance facility was one cause of action entitling the plaintiff to various reliefs and since the plaintiff had omitted to sue for one of the reliefs, therefore, was not entitled to sue on the basis of relief so omitted---Suit consequently was dismissed being barred by 0.11, R.2, C.P.C.---Principles.

Abdul Hakim and 2 others v. Saadullah Khan and 2 others PLD 1970 SC 63; Muhammad Khalil Khan and others v. Mehboob Ali Mian and others and Abdul Ghafoor v. Settlement and Rehabilitation Commissioner Karachi 1971 SCMR 602 ref.

Nemo for Plaintiff.

Shaiq Usmani for Defendant No.5.

2009 C L D 1524

[Karachi]

Before Khilji Arif Hussain and Ms. Soofia Latif, JJ

Messrs DADA STEEL MILLS---Appellant

Versus

METALEXPORT and 5 others---Respondents

H.C.A. No.22 of 1985, decided on 27th July, 2009.

(a) Interpretation of statutes---

----While framing a new enactment, Legislature is well-aware of the law in the field.

(b) Specific Relief Act (I of 1877)---

----S. 19---Contract Act (IX of 1872), S.73---Award of compensation---Scope---Court, while exercising power under S.19 of the Specific Relief Act, 1877 comes to the conclusion that the plaintiff is entitled for specific performance but instead of granting such relief of specific performance, it can grant relief of compensation for the breach of contract or further while granting relief of specific performance, to meet the ends of justice, in addition to relief of specific performance, it can grant compensation also---Provisions of S.19, Specific Relief Act, 1877 and 73, Contract Act, 1872, compared.

Sm. Shakuntla Devi and another v. Harish Chandra and another AIR 1952 Allahbad 620; Ganga Singh and others v. Santosh Kumar and others AIR 1963 Allahbad 201; Muhammad Sharif v. National Motors Ltd. 1989 CLC 916; Messrs Nigar Pictures, Karachi v. Messrs United Brothers, Lahore and 6 others PLD 1970 Karachi 770; Domb and another v. Isoz 1980 All ER 942; AIR 1926 Bom. 189; Wroth and another v. Tyler 1973 (1) All E R 897 and Malhotra v. Chaudhry 1979 (1) All ER 186 ref.

Floor a Sassy v. Hardship H. Mama AIR 1926 Bom. 189; Afroz Qureshi and another v. Muhammad Ikram Siddiqui 1995 CLC 735; Wroth and another v. Tyler 1973 (1) All E R 897; Malhotra v. Chaudhry 1979 All ER 186; Sm. Shakuntla Devi and another v. Harish Chandra and another AIR 1952 All. 602; Messrs Nigar Pictures, Karachi v. Messrs United Brothers, Lahore and 6 others PLD 1970 Kar, 770; Arya Pracjishak Pratinidhi Sabha through Lala Hans Raj v. Chaudhri Ram Chand and others AIR 1924 Lah. 713; Muhammad Sharif v. National Motors Ltd. 1989 CLC 916 and Ganga Singh and others v. Santosh Kumar and others AIR 1963 All. 201 quoted.

(c) Contract Act (IX of 1872)---

----S. 73---Specific Relief Act (I of 1877), S.19---Sale of Goods Act (III of 1930), S.58---While interpreting all the said three provisions, not only that intention of the legislature was to be kept in mind that the Sale of Goods Act, 1930 was later in time than the Contract Act, 1872 and Specific Relief Act, 1877; but also that so far as issue in the matter was special law dealing with law of Sale of Goods which previously, was governed by Chapter VII of the Contract Act, 1872, would prevail over the mere general one---Provisions in different statutes, but having bearing on the same subject may be read together in a complimentary manner so that they do not create contradictions while operating in the same field.

(d) Interpretation of statutes---

----Provisions in different statutes but having bearing on the same subject may be read together in a complimentary manner so that they do not create contradictions while operating in the same field.

(e) Specific Relief Act (I of 1877)---

----Ss. 19; 21, & 22---Contract Act (IX of 1872), S.73--Award of compensation---Principles---Scope of application of Ss.19, 21 & 22 of Specific Relief Act, 1877---Where Court came to the conclusion that plaintiff was entitled to specific performance, on the ground of unfair advantage over the defendant or hardship of the defendant which he did not foresee, court could refuse to grant relief of specific performance and could award compensation for which plaintiff was entitled on the date of judgment---Where contract could not be specifically enforced then plaintiff would be entitled to compensation, keeping in view the principles of awarding compensation under S. 73, Contract Act, 1872.

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

----S. 19---Contract Act (IX of 1872), S.73-Award of compensation---Principles.

Compensation under section 19 of Specific Relief Act can be granted when (i) plaintiff has not abandoned his right of specific performance and (ii) Court comes to the conclusion that although plaintiff is entitled to relief of specific performance yet cannot be granted as contract has been broken by the defendant, due to hardship, equity etc. The compensation in such cases, if equity so required, irrespective of the date of breach can be based upon the value of the property or damages, loss etc. caused to the plaintiff upto the date of judgment. However, in case when court comes to the conclusion that plaintiff is not entitled to specific performance then damage/compensation can be determined under section 73 of the Contract Act for breach of the contract.

When the defendant was well-aware at the time when entered into agreement of sale of vessel that the plaintiff was engaged in business of re-rolling and will use the scrap in his factory and as such plaintiff was entitled to a reasonable compensation on this count.

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

----S. 19---Specific performance of agreement and award of compensation---Plaints had performed their part of obligation and defendants had committed breach of contract by failing to deliver the `vessel' though said vessel had arrived at Karachi for the purpose of delivery to the plaintiffs, pursuant to the .agreement of sale between them---Plaintiffs, who were admittedly carrying on business of re-rolling, had not agreed to purchase the vessel for the purpose of selling the scrap to third party but to use the said scrap of the vessel in their own re-rolling factory and if the delivery of vessel was not effected then same may result in closure of the factory and other alike problems, breach of contract etc.---Vessel in question was attached in pursuance of court order, and to eliminate burden of demurrage etc. was ordered to be sold---Parties were given option to participate in the auction and plaintiffs purchased the vessel as highest bidders---Out of the sale proceeds a specific amount was paid to the defendant being price on which defendant had agreed to sell the vessel to plaintiffs and balance amount was ordered to be invested by the Nazir of the Court in terms of court order---Plaintiffs' contention was that they were entitled to the entire amount recovered after sale of vessel irrespective of damages asked by them in the memo. of plaint or even in their evidence-Validity-Plaintiffs, in circumstances, were entitled to specific performance of the contract in question and were also entitled to the amount lying in the court---Suit was decreed accordingly---Principles.

Muhammad Azam Muhammad Fazil & Co. v. Messrs N.A. Industries Karachi and Alfarooq Shipping Co. Ltd. v. Messrs Vasa Shipping Co. Ltd. and 4 others 1980 CLC 1228 distinguished.

Khalid Anwar for Appellant.

Nemo for Respondents.

Date of hearing: 14th May, 2009.

2009 C L D 1564

[Karachi]

Before Anwar Zaheer Jamali, C.J. and Faisal Arab, J

CITI BANK N.A.---Appellant

Versus

Syed SHAHANSHA HUSSAIN---Respondent

1st Appeal No.33 of 2007, decided on 15th January, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLV of 2001)---

----Ss.9, 21 & 22---Suit for rendition of accounts, declaration and permanent injunction---Award of compensatory cost-Plaintiff while seeking declaration from the Banking Court that demand. of defendant-Bank of amount from the plaintiff being baseless, was illegal, reserved in his plaint his right to claim damages for the mental torture caused to him on account of its such baseless and incessant demands---Banking Court decreed suit filed by the plaintiff declaring that claim of defendant-Bank for charges was illegal---Banking Court while declaring so, however, went a step further and awarded sum of Rs.50,000 to the plaintiff as compensatory cost on account of disgrace and mental torture that was said to be caused to the plaintiff on account of illegal demands of the defendant-Bank---Validity of awarding such compensatory cost was called in question by. the Bank in appeal---Provisions of S.21(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, had only prescribed the manner in which any fine or cost, that had already been imposed under some provisions of said Ordinance, was to be applied---Provisions of S.21 Financial Institutions (Recovery of Finances) Ordinance, 2001 did not empower the Banking Court to impose costs or fines---Nothing more could be read into the provisions of said S.21(1) of the Ordinance---There had to be first imposition of costs and fines under some other enabling provisions of the Ordinance before provisions of S.21 of the Ordinance could be applied---No legal justification was available with the Banking Court to award any compensatory costs to the plaintiff.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.2(d), 9, 21 & 22---Scope of S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Claim for compensatory cost---Validity---No doubt, the scope of S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 was limited only to such suits where a default in the fulfilment of any obligation in relation to a finance had been committed, but that did not mean that no claim at all for damages which was based on personal injury could be agitated before a Banking Court---Personal injury could arise on account of default in fulfilment of any obligation in relation to finance and an aggrieved party could claim damages as well---Claim for damages i.e. a claim for seeking pecuniary compensation was a relative term and such a claim could arise on account of inquiry or loss caused by one to the other by commission of tort or by breach of a contractual obligation---Claim for damages caused on account of commission of tort or by breach of a contract which had nothing to do with the default in the fulfilment of an obligation arising from a financial facility and covered under the definition of "finance" as provided in S.2(d) of Financial Institutions (Recovery of Finances) Ordinance, 2001, could not be agitated before the Banking Court; however, a claim for damages, on account of any injury or loss caused by a Financial Institution to its customer, which had resulted from any default committed by the Financial Institution on the fulfilment of its obligation in relation to finance, could certainly be taken to the Banking Court for adjudication---Claim for pecuniary compensation could either arise from a tortuous act i.e. not based on any contract or a breach of a contractual obligation not pertaining to accommodation or facility of finance and for those two categories of claim, the Banking Court was not the appropriate forum.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9, 21 & 22---Award of compensatory costs---Scope---Banking Court decreed suit filed by the plaintiff declaring that claim of defendant Bank with regard to charges was illegal---Banking Court, however while declaring so, went a step further and awarded sum of Rs.50,000 to the plaintiff as compensatory cost on account of disgrace and mental torture---Award of said compensatory costs was completely beyond the scope of the pleadings of the plaintiff---In fact in one of paras of the plaint, the plaintiff had himself stated that he reserved his right to claim damages---No legal justification was available with the Banking Court to travel beyond the scope of the pleadings and award compensatory costs on its own---Court should not pass a decree which was beyond the scope of the pleadings, more particularly when defendant chose not to contest the proceedings---Defendant who was being proceeded ex parte could not be taken by surprise and burdened with a decree which was beyond the scope of the pleadings of the plaintiff-Plaintiff ought to have claimed such compensation in the plaint and sought relief regarding thereto in the prayer clause---In the absence of such pleadings, no decree could be passed on that account---Decree passed by the Banking Court, in so far as it related to award of compensation, was beyond the pleadings of the plaintiff and was liable to be set aside.

M.A. Khan for Appellant.

Rizwan Ahmed Siddiqui for Respondent.

Date of Haring: 15th January; 2009.

2009 C L D 1571

[Karachi]

Before Khilji Arif Hussain and Ms. Sofia Latif, JJ

Mst. SURRAYYA BEGUM---Appellant

Versus

Syed WASEEM HUSSAIN and 2 others---Respondents

1st Appeal No.13 of 2009, decided on 25th May, 2009.

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

----Ss.10 &15-Auction without intervention of Court---Delivery of possession---Statement of account, non filing of---Objection by occupant of property---Objector sought setting aside of sale on the ground that statement of account was not filed within 30 days as required under S.15(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity--- Financial Institutions selling mortgaged property in exercise of powers conferred upon them under S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001, were under obligation to file proper account of sale proceeds in Banking Court within 30 days of sale---Purchaser of property for valuable consideration could not be non-suited due to default of financial institutions in filing of statement of account within a period provided by S.15 (10) of Financial Institutions (Recovery of Finances) Ordinance, 2001---All disputes relating to sale of mortgaged property under S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001, were to be decided by Banking Court which included disputes pertaining to non-compliance of S.15(10) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Time period provided under S.15(10) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was to run from the date of registration of sale-deed in respect of mortgaged-property in favour of purchaser---Financial institution was required to file under S.15 (9) of Financial Institutions . (Recovery of Finances) Ordinance, 2001, proper account of sale proceedings in Banking Court about net sale proceeds after taking into consideration all expenses incurred for sale---Conveyance deed was registered on 24-11-2004, whereas financial institution filed written statement on 23-11-2004 in Banking Court i.e. on day before conveyance deed was executed in favour of auction purchaser and further filed statement of accounts on 17-11-2004, i.e. within 30 days from the date when conveyance deed was registered---Financial institution made substantial compliance of S.15(10) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and the same could not be set aside---Objector failed to bring on record that market value of property disposed of by financial institution was more than for which it was sold--Appeal was dismissed in circumstances.

Naveed Ahmed Khan for Appellant.

Saalim Salam Ansari for Respondent No.1.

Naveedul Haq for Respondent No.2.

2009 C L D 1685

[Karachi]

Before Khawaja Naveed Ahmed, J

In re: Mrs. KAUSAR NAZLI---Petitioner

S.M.A. No.125 of 2007, decided on 12th March, 2009.

Pakistan Merchant Shipping Ordinance (LII of 2001)---

----S.127---Succession Act (XXXIX of 1925), Ss.373 & 383---Application for revocation of succession certificate---Succession certificate was granted by High Court in respect of cash and securities left by the deceased---In the schedule of properties two amounts, one was to the tune of US$ 57,000 while other US$ 144,000, which were payable by the owner of the ship according to Pakistan Merchant Shipping Ordinance, 2001---High Court by order directed Nazar of the Court to collect both said amounts---Under S.383 of the Succession Act, 1925, petition had been filed. by the owner of the ship for revocation of succession certificate issued in favour of the petitioner/legal heir of the deceased---First amount of US$ 57,000 was not disputed, whereas second one for US$ 144,000 was disputed, which could be granted through petition; however, if there was any contentious amount, civil court had power to adjudicate upon the claim after recording evidence of both the parties---Petition under Succession Act, 1925 was. not proper forum to adjudicate the said issue---Earlier order passed by the High Court was modified and Nazir of the Court was directed to collect undisputed amount US$ 57,000 from the owners of the ship---It would be open for the petitioner to file appropriate proceedings for recovery of second amount of US$ 144,000 before the proper forum in separate recovery proceedings.

Chaudhry Waseem for Applicant.

Agha Faquir Muhammad for Objector.

2009 C L D 1687

[Karachi]

Before Sajjad Ali Shah, J

MUHAMMAD SULEMAN KANJIANI and 3 others---Plaintiffs

Versus

DADEX ETERNIT LTD. through Chief Executive and 4 others---Defendants

Suit No.166 and C.M.As. Nos.2012, 2013, 2486, 2757, 3141 and 4513 of 2009, decided on 10th July, 2009.

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

----Ss.42 & 54---Civil Procedure Code (V of 1908), O. XXXIX, Rr.1, 2---Suit for declaration and permanent injunction---Question involved in the application appeared to be two fold, firstly, as to whether in the circumstances non-yielding of profits by the defendant .company corresponding to the investment could be termed as siphoning off the company funds by the Directors of the company in command justifying interference by the court in the internal affairs of the company and that as to whether the plaintiff after having approved the budget and annual accounts containing such capital expenditures, had waived their right to object---Defendants had placed on record documentary evidence to show that all capital expenditures so incurred were unanimously approved by the Board of Directors including the plaintiffs---In order to justify the capital expenditure so incurred the defendants had asserted setting up of a new factory---Plaintiffs/applicants had not questioned the capital expenditure so incurred nor had imputed siphoning off the company's fund under the garb of capital expenditure in the main suit, nor had produced documentary evidence of a solitary example to show that the expenditure so incurred did not reflect the actual purchase/expenses, though one of the plaintiffs was not only a Chartered Accountant by profession, but also Head of audit committee---Even otherwise, allegation of siphoning off the company's fund amounted to imputing fraud upon the Directors of the company in command and would not warrant inquiry or investigation on bald allegations, unless supported by documentary evidence or instances of fraud i.e. siphoning off the company's funds under the garb of capital expenditures were detailed---Directing forensic audit, in circumstances would not only amount to fishing inquiry, but would be against the basic principle relating to the administration of the affairs of the company---Court would not generally intervene at the instance of the shareholders in internal administration of the company and would not interfere with the management of the company by its Directors so long they were acting within the powers conferred on them under the Articles of the company; however, the principle was subject to an important exception i.e. the powers so vested in them must have been exercised honestly, in good faith and in the best interest of the shareholders.

Mst. Khurshid Ismail v. Unichem Corp. (Pvt.) Ltd. 1996 CLC 1863; Islamic Republic of Pakistan v. Israr-ul-Haq PLD 1981 SC 531; Jam Pari v. Muhammad Abdullah 1992 SCMR 786 and Karachi Pipelines Ltd. v. Government of Sindh 1992 CLC 1668 ref.

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

----S.196---Powers of Directors---Suit for declaration and permanent injunction---Powers of the Directors as envisaged under S.196 of the Companies Ordinance, 1984, subject to the restrictions as contained in the Companies Ordinance, 1984 and in the Articles of the company were extensive with those of the company itself----Once elected and in control, the Directors had almost all the powers over operation of the company, until they were removed, however, such powers. were subject to two limitations; firstly, the Board was not competent to do what the Companies Ordinance, 1984, Articles or special resolution, required to be done by the shareholders in general meeting and secondly, in the exercise of their powers, the Directors were subject to the provisions of Companies Ordinance, 1984, Articles and other regulations not inconsistent therewith made by the company in general meeting---While exercising such powers, every Director of the company was expected to discharge the duties of his office honestly, in good faith and in the best interest of the company; and was bound to exercise that degree of care, diligence and skill which a reasonable prudent man would exercise in his own affairs in comparable circumstances---Only acts of the Directors were immune from the judicial scrutiny which were within the sphere of their powers and were performed honestly, in good faith and in the best interest of the company---In case the plaintiffs would place on record any material to prove the contrary, then despite the fact that they could have approved the budget or the annual account containing capital expenses, an investigation as so sought, could very well be directed for the simple reason that there could be a waiver of rights, unless relinquished intentionally or estoppels against fraudulent acts or breach of statutory obligation.

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

----S.230---Books of accounts to be kept by company---Suit for declaration and permanent injunction---Default in keeping the books of accounts properly---Since the law did not draw any distinction between the powers of the Directors; and it was the Rule of Majority which empowered one set of Directors to manage the affairs of the company and rendered the other powerless Directors who were not in command under the law, had also the rights to participate in the meetings of the company and to contribute in the well being by giving their views/expert opinion and as envisaged under subsection (4) of 8.230 of the Companies Ordinance, 1984 were entitled to an access to the record of the company exactly in the manner as the Directors in command---Law, in order to secure such right as provided in subsection (7) of S.230 of the Companies Ordinance, 1984, directed imposition of penalty on every Director, Chief Executive Officer and Chief Accountant who knowingly failed to maintain such books or papers or place them open for inspection by the Directors during business hours---Since nothing was on record to show that the plaintiffs had ever invoked the provisions of subsection (7) of S.230 of. the Companies Ordinance, 1984, or had placed before High Court any documentary evidence to demonstrate the agitation of such grievance, through any other mode, demand of Forensic audit despite demonstrating the enormous increase in capital expenditure without proportionate increase in profit, appeared to be pre-mature.

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

----S.196(2)(j)--Incurring of capital expenditures by Directors of the company---Suit for declaration and permanent injunction---Clause (J) of subsection (2) of S. 196 of the Companies Ordinance, 1984 required a resolution of the Board of Directors for incurring expenditures---Getting ex-post facto sanction of the Board of Directors for the capital expenditure already incurred at the instance of the Chief Executive Officer of the company, not only. appeared to be against the intent of law, but also amounted to "One Man Rule" depriving the company from the expertise of the Directors on Board---Chief Executive Officer of a company though was always backed by the majority of the Directors and all of his actions were approved as and when placed before the Board, but it was also true that even if the approval of Board was obtained in terms of S.196 of the Companies Ordinance, 1984 i.e. before incurring such expenses, the result could not be different; as the best available advice of a Director, could be bulldozed by the "Rule of Majority", and there was nothing much which could be done about it---Practice of incurring capital expenditures as pleaded by the defendants, also appeared to be against the "Rule of Transpency" and would deprive a Director from his statutory right to contribute by participating in meaningful meeting resolving to undertake such expenditures---Capital expenditures admittedly were to be incurred on plant, machinery, equipment, free hold land, building, furniture and fixture, vehicles etc.; and from their very nature, they did not appear to be imminent peril requiring instinctive action incapable of deliberate and intelligent action---All applications were dismissed, two being premature and third one being infructuous--Defendant would be at liberty to incur capital expenditures in terms of S.196 of the Companies Ordinance, 1984 after obtaining approval from its Board of Directors in a meaningful meeting describing the purpose on which those were to 'be incurred with full justification.

Khalid Jawed Khan for Plaintiffs.

Sajid Zahid for Defendants Nos. 1 to 3.

Ameer Haider Holding Breif for Mr. Iqbal Haider for Defendant No.4.

2009 C L D 1699

[Karachi]

Before Azizullah M. Memon and Abdul Rahman Faruq Pirzada, JJ

Haji MUHAMMAD YAQOOB AKHTAR---Appellant

Versus

HABIB BANK LTD. and others---Respondents

Ist Appeal No.51 of 2006, decided on 4th March, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9, 10, 12 & 22---Civil Procedure Code (V of 1908), O.V, R.20---Suit for recovery of loan--Application for setting aside ex parte decree---Substituted service---Appeal---Suit filed by the plaintiff-Bank having been decreed ex parte, defendant had filed application for setting aside of ex parte decree---Banking Court having dismissed said application, defendant had filed appeal against the judgment of the Banking Court contending that he was not properly served---In the present case, principles underlying provisions of O.V, R.20, C.P.C. would be attracted as order for service by publication was not made simultaneously with the order for issuance of summons in ordinary manner---When all the three modes had not been adopted simultaneously and service had not been effected through the two processes, publication was not to be ordered mechanically without adverting to the reports---Before granting service through publication, it was incumbent upon the court to have applied its mind to the facts of the case and found out that whether in spite of the best efforts of the plaintiff, the defendant could not be sewed for the reasons that he was avoiding service with the object of obstructing the disposal of suit---Before ordering publication, the court should have satisfied itself that all the essential conditions for resorting to that mode of service and to proceed ex parte against defendants existed---Court, Judicial Tribunal or even a quasi-judicial Tribunal, entrusted with duty to determine the valuable rights of the parties arraigned before them were required to act deliberately and after proper application of mind to the matter before them---Question whether the defendant was lawfully served or not, was a mixed question of fact and law which was to be answered independently, of the intention of any party---Defendant had a right to defend his cause and for that purpose, the plaintiff--Bank was under a legal obligation to make best efforts in effecting the service on the defendants through the process of court---Plaintiff--Bank had failed to perform its legal obligation, which amounted to mala fide in law---Defendant having not been duly served, ex parte decree passed against him was not in conformity with law and same could not be sustained---Special circumstances existed for setting aside the ex parte decree and other proceedings and to allow the defendant to defend the suit---Defendant had proved that he was not properly served as neither notice was properly issued for service upon him nor he was ever served with notice of the suit---Ex parte judgment and decree was not binding upon him--Appeal was allowed, impugned order passed by the Banking Court was set aside, with the result that application under S.12 of Financial Institutions. (Recovery of Finances) Ordinance, 2001 filed by the defendant was allowed and ex parte judgment and decree passed by the Banking Court against defendant, stood set aside.

Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited Islamabad and another PLD 1993 Lah. 706; Ahmed Autos v. Allied Bank of Pakistan PLD 1990 SC 497 and United Bank Ltd. v. Nishat Chemical Industries Ltd. 1986 CLD 1985 ref.

(b) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)---

----S.7(2)-Civil Procedure Code (V of 1908), O.XXI, Rr.90, 92, O.XXXIV, R.4, O.XXXVII, Rr.1 & 2---Suit for recovery of loan---Procedure of special court---Suits based on mortgage---Jurisdiction of special court---In exercise of its civil jurisdiction, the special court had to follow the procedure provided in Civil Procedure Code,1908 except to the extent that a contrary provision was found in the Banking Companies (Recovery of Loans) Ordinance, 1979---Section 7(2) of said Ordinance had expressly laid down that even in suits based on mortgage summary procedure provided for in Order XXXVII, C.P.C. would be followed---In a recovery suit before the special court, defendant could not appear and defend the suit as a matter of right and had first to obtain the leave of the court to defend suit---Except for that deviation, other provisions of C.P.C. would apply to a suit for recovery heard by the special court---Under O.XXXIV, R.4, C.P.C. in a suit based on mortgage a preliminary decree had to be passed necessarily, if the defendant failed to pay the amount due from him, only then the plaintiff could apply the court for final decree---It was the practice of the court while acting as a special court to pass a preliminary decree in suit founded on mortgage---In the present case Banking Court had failed to pass a preliminary decree--In the impugned judgment, it was stated that ex parte decree was the final decree---Defendants, in circumstances were deprived of the opportunity to pay into the court the amount due from them and avoid the court sale in terms of O.XXXIV, C.P.C.---Non-compliance with O.XXXIV, C.P.C. had provided sufficient reason for setting aside the impugned decree--Application under O.XXI, R.90, C.P.C. could not be entertained unless defendant deposited such amount not exceeding twenty per cent of the sum realized at the sale or furnish such security as the court could direct---While exercising civil jurisdiction, the special court had to follow the procedure laid down in C.P.C. and for the purpose of execution of the decree, it could adopt procedure under O.XXI, C.P.C. and allied provisions of C.P.C.---If conflict existed between the provisions of C.P.C. and the Ordinance, the latter would prevail---Once the special court had chosen to adopt C.P.C., the correctness of orders passed by it in conducting the sale of the property in dispute, would have to be necessarily adjudged on the touchstone of C.P.C.?

Ganapathia Pillai v. Malaiperunmal Chettiar and another AIR 1925 Mad. 202; Alhamdi Begum v. National Bank of Pakistan PLD 1976 Kar. 723; M. Shafique Shah and others v. Mst. Irshad Begum and others 1981 CLC 369; Messrs Mahmood Brothers and another v. National Bank of Pakistan and another 2004 CLD Lah. 771; Asim Shahzad v. Muslim Commercial Bank Ltd. and another 2002 CLD Lah. 1288, Lt. Col. (Retd.) Muhammad Akhter v. Bank of Punjab 2004 CLD Lah.821, Muhammad Saeed Sheikh v. Citibank N.A. 2002 CLD Lah. 1697 and Apex International Associates v. Bank Al-Falah Limited 2002 CLD Lah. 639 ref.

Zafar Iqbal for Appellant.

Shakeel Pervez Bhatti for Respondent No.1.

Munawwar Saleem for Respondents Nos:7 to 39.

Date of hearing: 4th March, 2009.

2009 C L D 1713

[Karachi]

Before Munib Akhtar, J

Messrs KAZMIA TRUST (REGD.) through Authorized Person---Petitioner

Versus

Messrs KAZ INTERNATIONAL (PVT.) LTD. and 5 others---Respondents

Judicial Miscellaneous Application No.7 of 2006, decided on 7th October, 2009.

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

----Ss.305, 385, 2(36), 50 & 160 A---Different ways of winding up of a company---Extraordinary General Meeting---Resolution of voluntary winding up of Company---Notice to shareholders---Modes---Presumption---Voluntary winding up of company by a resolution passed by shareholders holding 60% shares of a private limited company was assailed by a charitable trust which was holding 40% of the shares of the said company---Shareholder holding 40% of the shares of the company, in case of non-service of notice of Extraordinary General Meeting, could have filed petition under S.160A of the Companies Ordinance, 1984 on the ground that it had not been properly sewed with a notice of Extraordinary General Meeting---Having failed to avail the specific statutory remedy provided in the Companies Ordinance, 1984, it was not open to' the said shareholder to raise the issue of non-service---Principles.

Muhammad Sohail Butt v. Capital Insurance Company Ltd. and another 2007 CLD 1484 ref.

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

----Ss.160(2)(b) & 2(36)---Special resolution---Procedure---Special resolution must be passed by a majority of not less than three-fourths of such members entitled to vote as are present in person or by proxy---Illustration.

A special resolution must be passed "by a majority of not less than three-fourths of such members entitled to vote "as are present in person or by proxy" at the meeting concerned. As the highlighted words make clear, the resolution is not, to be passed by three-quarters of the total shareholders of the company. The required percentage (75%) is to be considered on the basis of the members actually present at the meeting. A shareholder holding (or more than one shareholders who together hold) more than 25% of a company's shares can always block a special resolution, provided that he or they show up at the meeting and vote against the resolution. If however, such shareholder(s) choose to stay away, they do so at their own peril, since if more than three-quarters of the members actually present at the meeting vote in favour of the resolution it will be passed as a special resolution. To take a somewhat extreme example: if a company has 1,000 ordinary shares held by 100 members, but at the relevant meeting only 4 shareholders, together holding 250 shares, show up, and three of the, shareholders vote in favour of the resolution with one opposed, the resolution will pass as a special resolution. Mere absence therefore, is not enough. If a shareholder (or shareholders) have or 'control more than 25% of the shares of a company, and thus have a veto power over special resolution, they must actually exercise this power for it to be effectual.

In the present case, the petitioner (holding 40% of shares of the company) chose to stay away from the Extraordinary General Meeting, even though it admittedly had (at the very least) four days' advance knowledge of the meeting, and could have easily attended it. Had it attended the meeting, and voted against the proposed special resolution, it would have been defeated. The petitioner however, remained absent. The record shows that the remaining three members of the company (holding the balance 60% shares) did attend the meeting. There was thus a valid quorum at the meeting (see section 160(2)(b) and Company's Articles of Association). The members present unanimously passed the proposed special resolution. The special resolution was validly passed as such, and was compliant with the requirements of section 2(36). Quorum requirements apart the actual shareholding of the members present was not the decisive factor: as explained above, the question was only whether more than three-quarters of the members present had voted in favour of the resolution. Since all the members actually present voted in its favour, this requirement was met, and the tabled resolution was passed in accordance with law as a special resolution.

Both in law and on the facts as available from the record, the petitioner had notice of the Extraordinary General Meeting and its absence from the meeting did not prevent the proposed resolution from being passed as a special resolution of the members voluntarily winding up the company.

Gower's Principles of Company Law, 5th edition (1992), Page 519 ref.

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

----S.358---Circumstances in which company may be wound up voluntarily---When a proper special resolution was passed at the Extraordinary General Meeting, requirements of S.358(b), Companies Ordinance, 1984 were fulfilled---Interference by court of law---Scope---Principles.

British Water Gas Syndicate v. Notts Derby Water Gas Co. Ltd (1889) 6 TLR 44 and Ellis v. Dadson (1891) 7 TLR 318. ref.

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

----S.391---Scope and application of S.391, Companies Ordinance, 1984---Question as to whether the company ought to have been voluntarily wound up was the one beyond the scope and purview of S.391, Companies Ordinance, 1984.

Section 391 of Companies Ordinance, 1984 deals with a situation arising during or within the course of a voluntary winding up, and enables the liquidator, or any contributory or creditor, to apply to the court for any necessary determination in this regard. Section 391 certainly does not relate to the question of whether the company ought to have been voluntarily wound up at all. That is a question beyond the scope and purview of this section.

Syed Muhammad Abbas Haider for Petitioner. Asim Mansoor for Respondents Nos. 1 to 3.

Messrs Saalim Salam Ansari, Mukhtar Ahmed Kumbhar and Javed Ahmed Bughio for Respondent No.4.

Date of hearing: 2nd October, 2009.

2009 C L D 36

[Lahore]

Before Mian Saqib Nisar and Kh. Farooq Saeed, JJ

ZARAI TARIQIATI BANK LIMITED through Branch Manager---Appellant

Versus

HASSAN AFTAB FATIANA---Respondent

F.A.O. No.213 of 2008, heard on 15th October, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.7(2)---Powers of Banking Court---Scope---Where the Financial Institutions (Recovery of Finances) Ordinance, 2001 itself provides the specific procedure for resolving a proposition, under the settled principles of construction of statutes, the provisions of general law not only to that extent, but even regarding the inherent jurisdiction of the court available under Civil Procedure Code, 1908 shall not be attracted---Principles.

Financial Institutions (Recovery of Finances) Ordinance, 2001 is a special law covering a particular field of litigation and the courts constituted thereunder are vested with both the civil as well as criminal jurisdiction. Section 7(2) prescribes that the court shall, in all matters with respect to which the procedure had not been provided for in the Ordinance, apply the law laid down in the Code of Civil Procedure Code, 1908 (Act V of 1908) and the Code of Criminal Procedure, 1898 (Act V of 1898), meaning thereby that where the Ordinance itself provides the specific procedure for resolving a proposition, under the settled principles of construction of the statutes, the provisions of general law, not only to that extent, but even regarding the inherent jurisdiction of the court available under the Civil Procedure Code, shall not be attracted.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 27, Proviso & S.7---Civil Procedure Code (V of 1908), S.152---Finality of order---Inherent and general powers under S.152, C.P.C.-Applicability---Scope---Cases pertaining to any error in the judgment and decree etc. of the court shall only be regulated by the proviso to S.27, Financial Institutions (Recovery of Finances) Ordinance, 2001, rather the general and inherent power under S.152, CAC., which shall not be applicable in the presence of specific provision of proviso to S.27 of the Ordinance---Proviso to S.27 of the Ordinance, however is restricted in empowering the court to correct the typographical error etc. and unlike S.152, C.P.C. does not provide for supplying any accidental slip or omission.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 27, proviso---Civil Procedure Code (V of 1908), S.152---Typographical error etc.---Scope---Finality of order-Non-­specification in the judgment and decree, the date of default by the Banking Court, by no stretch of interpretation, can be construed as 'typographical error etc., rather it is a simple case of slip/omission of the court and had it been the judgment/decree of the Civil Court, the provision of S.152, C.P.C. could be validly invoked---But for the supply of such an omission/slip, Banking Court had no jurisdiction under proviso to S.27, Financial Institutions (Recovery of Finances) Ordinance, 2001 and impugned order of the Banking Court being beyond the scope of proviso to S.27 could not sustain.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 3 & 27, proviso---Civil Procedure Code (V of 1908), S.47---Non-specification in the judgment and decree, the date of default by the Banking Court---Remedy---Executing Court shall be well within its jurisdiction to adjudicate as to from which date the costs of funds should be allowed to the decree holder---Principles.

Where the Banking Court has not specified in its judgment and decree, the date of default by the judgment debtor, the solution can be achieved by resorting to the provisions of section 47, C.P.C. under which, the court has the power to decide the question about the execution, satisfaction and discharge of the decree and such jurisdiction undoubtedly includes the power of the court to interpret the judgment/ decree on the basis of the law applicable, which, in this case, shall be section 3 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. Therefore, if approached, the Executing Court shall be well within its jurisdiction to adjudicate as to from which date the costs of funds should be allowed to the decree holder.

K.A.S.B. Bank Limited v. Abdul Qadir Jangda 2007 C.L.D. 1639; Sh. Abdul Sattar Lasi v. Federation of Pakistan and 6 others 2006 C.L.D. 18; Industrial Development Bank of Pakistan v. Pakistan Belting (Pvt.) Limited and 5 others 2006 CLD 808 and Messrs Eclipse Dry Cleaners and another v. Messrs Imperial Chemical Industries Pakistan Ltd. and 2 others 1989 SCMR 1708 ref.

Muhammad Shuja Baba for Appellant.

Tariq Mahmood Randhawa for Respondent.

Date of hearing: 15th October, 2008.

2009 C L D 53

[Lahore]

Before Ali Akbar Qureshi, J

SHAUKAT HAYAT---Petitioner

Versus

SHAKIL AHMAD MUGHAL---Respondent

C.R. No.1713 of 2007, decided on 31st October, 2008.

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

----Ss.18 & 27---Civil Procedure Code (V of 1908), S.9, O.VII, R.11(d) & O.XXI, Rr.89, 92---Execution of decree---Auction of property by Banking-Court-Civil suit challenging such auction on the ground that property was undivided, regarding which partition suit was pending; and that property was not mortgaged with decree-holder Bank, rather same was owned by plaintiff, who was not judgment-debtor in decree under execution---Maintainability---Civil Court had no jurisdiction to entertain a suit challenging judgment and decree or any action of Banking Court---Only remedy available to plaintiff to challenge auction was by filing of objection petition before Banking Court, which had jurisdiction to validate or invalidate auction, if not conducted in accordance with law---Plaint was rejected in circumstances.

Pakistan Fisheries Ltd., Karachi and others v. United Bank Ltd. PLD 1993 SC 109 and S. M. Shafi Ahmad Zaidi through Legal Heirs v. Malik Hassan Ali Khan (Moin) through Legal Heirs 2002 SCMR 338 rel.

Rana Nasrullah Khan for Petitioner.

Respondent in Person.

2009 C L D 127

[Lahore]

Before Syed Asghar Haider, J

GUJRAT CHAMBER OF COMMERCE through President---Appellant

Versus

FEDERATION OF PAKISTAN through Secretary Commerce and another---Respondents

F.A.O. No.222 of 2008, decided on 17th October, 2008.

Trade Organizations Ordinance (XXXI of 2007)---

----Ss. 16 & 14---Supersession of Executive Committee and office-bearers and appointment of Administrator to oversee the working of the Chamber till the time when election of the Chamber was scheduled to be held by Federal Government---Procedure to be followed---Interpretation of S.16, Trade Organizations Ordinance; 2007---Right of representation to the Executive Committee intended to be suspended and timing thereof---Representation'---Concept---Such right of representation was to be exercised after the Federal Government had formulated an opinion that affairs of a registered body were not being performed in accordance with the standards set by the Ordinance---Where the Federal Government had formulated its opinion on the basis of inquiry conducted by Directorate-General of the Trade Organization and thereafter it proceeded to initiate action under S.16 of the Trade Organizations Ordinance, 2007, the timing as required by S.16 of the Ordinance, to issue notice was not adhered to, as such no valid notice as required by law was issued---Even if said anomaly was condoned and assumed that a notice was validly issued by the Directorate, the requirement of representation was not adhered to and there was nothing to this effect available in the impugned order---Such most important and pivotal requirement having not been adhered to, proceedings as ordained by S.16, Trade Organizations Ordinance, 2007 Were not followed which was violative of the procedure prescribed by S.16 of the Ordinance, and therefore, not sustainable---Principles---Appeal of Chamber of Commerce was allowed by the High Court, impugned order was set aside and proceedings would be deemed to be pending with the authorities, who would proceed to decide the matter in accordance with the guidelines stated in the judgment and law.

Messrs Eastern Leather Company (Pvt.) Ltd. v. Raja Qamar Sultan, Section Officer, Government of Pakistan Islamabad and 4 others PLD 2004 Lah. 83 ref.

Maulvi M. Sultan Alam Ansari and Malik Maqbool Ellahi for Appellant.

Aamar Rehman, Deputy Attorney General along with Rao Arif Raza, Deputy Director.

2009 C L D 140

[Lahore]

Before Sh. Azmat Saeed and Syed Asghar Haider, JJ

HABIB BANK LTD.---Appellant

Versus

Syed MUHAMMAD HAROON and 4 others ---Respondents

F.A.O. No.140 of 2006, heard on 7th October, 2008.

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

----Ss. 9 & 15---Transfer of Property Act (IV of 1882), S. 41---Suit for recovery of loan by Bank--Auction of mortgaged property---Claim of a bona fide purchaser of mortgaged property---Validity---Held, as a general principle if arty immovable property was under a charge or mortgaged and subsequently alienated, the charge and mortgage would follow the transfer except in the case of 'bona fide purchaser' without notice of such charge or mortgage---Duty of Court---Principles--Bona fide purchaser'---Concept.

As a general principle if any immovable property is under a charge or mortgaged and subsequently alienated, the charge and mortgage would follow the transfer except in the case of bona fide purchaser without notice of such charge or mortgage. Before the equitable defence of bona fide purchaser under section 41 of the Transfer of Property Act is accepted, it must be established that such purchaser has exercised due care and diligence to ascertain the clean vendible title of his transfer. Search and reliance solely of the revenue record is not sufficient to attract section 41 of the Transfer of the Property Act.

Any person who acquires property without obtaining the title deed of the original transferor cannot also be said to have exercised due care and caution so as to enable him to take the defence of a bona fide purchaser.

In the absence of searching in the office of the Sub Registrar of Documents no person can claim to be a bona fide purchaser.

In the present case, Banking Court solely relied upon the factum that mortgage was not reflected in the revenue record which had been allegedly secured. This view taken by the Banking Court was diametrically opposed and contradicted the settled law.

Furthermore, in the present case in the revenue record the property stood in the name of person whose original documents of title were admittedly with the Bank. Evidently, the Banking Court had ignored this vital aspect of the matter and acted contrary to the settled law.

Admittedly there was a registered mortgage deed in favour of the Bank. Had a search been carried out in the office of the Sub Registrar of Documents, the factum of the registered mortgage would have been revealed. The Banking Court totally ignored this aspect of the matter and embarked upon adjudicating the application in a manner contrary to the settled law.

Maulana Riaz-ul-Hasan v. Muhammad Ayyub Khan and another 1991 SCMR 2513; Citi Bank N.A. through Branch Manager v. Munir Ahmad Gill and 2 others 2000 YLR 2938; Mst. Nasiban Bibi v. The Australasia Bank Lahore and others 1970 SCMR 657; Muhammad Anwar Khan v. Habib Bank Ltd. and 4 others 2005 CLD 165 and Major Muhammad Tariq v. Citi Bank Housing Finance Company Ltd. through Manager 2002 CLD 1090 ref.

Shamas Mehmood Mirza for Appellant.

Nasir Mehmood for Respondent No.3.

Tariq Mehmood Randhawa for Respondent No.6.

Date of hearing: 7th October, 2008.

2009 C L D 247

[Lahore]

Before Sh. Azmat Saeed, J

MANZAR LATIF MIAN---Appellant

Versus

Ms. MASARRAT MISBAH---Respondent

F.A.O. No.176 of 2008, decided on 30th October, 2008.

(a) Partnership Act (IX of 1932)---

----S.43---Partnership, dissolution of---Scope---Assertion in appeal that both parties desired such dissolution---Effect---Partnership stands dissolved.

Mr. B. A. Sheikh v. The Custodian Evacuee Property West Pakistan and others PLD 1960 SC 330 rel.

(b) Partnership Act (IX of 1932)---

----Ss.46, 48 & 49---Partnership, dissolution of---Effect---During interregnum of dissolution of firm and its eventual winding up, its assets and properties including its name and goodwill would be held jointly and in common by all partners---Principles.

Mr. B. A. Sheikh v. The Custodian Evacuee Property West Pakistan and others PLD 1960 SC 330 and Bruchell v. Wilde 1900-3 All. ER Ext. 1744 rel.

(c) Partnership Act (IX of 1932)---

----S.53---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Dissolved partnership firm---Grant of temporary injunction to restrain use and possession of assets of firm by one partner or stranger to the exclusion of other partners---Scope---Section 53 of Partnership Act, 1932 prohibited use of firm's property and name by a partner for his own benefit till completion of all its winding up affairs---Such temporary injunction could not be claimed as a matter of right in absence of irreparable loss and injury and subject to balance of convenience---Court in appropriate cases could pass only a regulatory order to protect and preserve assets and properties of firm and balancing rights of all concerned parties---Principles.

Kasuma Gupta v. Sarla Devi AIR 1988 All 154 and Rajindra Kumar Sharma v. Brinjendra Kumar Sharma AIR 1994 All 62 rel.

Raza Kazim and Usman Raza Jamil for Appellant.

Ali Sibtain Fazli and Nasar Ahmed for Respondent.

Date of hearing: 14th October, 2008.

2009 C L D 257

[Lahore]

Before, Sayed Zahid Hussain, C.J, Syed Hamed Ali Shah and Syed Asghar Haider, JJ

MUHAMMAD UMER RATHORE---Petitioner

Versus

FEDERATION OF PAKISTAN---Respondent

Writ Petition No.18196 of 2002, decided on 23rd December, 2008.

Per Syed Hamid Ali Shah, J., Sayed Zahid Hussain, C.J. and Syed Asghar Hadier, J, agreeing

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15---Sale of mortgaged property--Analysis of S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

An analysis of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001 gives a clear inference that:--

(i) The provision is invoked against the mortgagor for recovery of mortgage money, which includes finance, penalties, damages, charges or pecuniary liabilities. In case of default in payment by customer/mortgagor the Financial Institution can proceed for the sale of the mortgaged property, after serving three notices upon him (mortgagor).

(ii) By issuance of notice of demand, the power of mortgagor regarding collection of rents and profits vests with Financial Institution.

(iii) Financial Institution, after issuance of notice and in the event of non-payment in response thereto, can proceed to sell the mortgaged property without intervention of Court.

(iv) Financial Institution is entitled to:-

(a) participate in auction;

(b) purchase mortgaged property;

(c) take its possession;

(d) apply to the Banking Court to be put in possession of mortgaged property, if there is resistance by mortgagor;

(e) execute sale deed and get it registered;

(f) transfer the mortgaged property without encumbrance;

(g) adjust all expenses of sale; and

(h) distribute sale proceeds amongst the mortgagees and pay to the mortgagor surplus, if any.

(v) Financial Institution is required to file accounts and disputes relating to mortgage and the detail of distribution of the proceeds amongst the mortgagees are to be resolved by the Banking Court. An embargo has been placed on the powers of the Banking Court and also of the High Court, to issue or grant injunction restraining sale, unless the Court is satisfied that no mortgage has been created or mortgage money has been paid or the same is deposited in the Banking Court.

(b) Banker and customer---

----Statement of account cannot be taken as gospel's truth and not sufficient to prove the claim of the Bank; the presumption of correctness attached to its entries is rebuttable and corroboration is necessary.?

Messrs Muhammad Siddiq Muhammad Umar. v. The Australasia Bank Ltd. PLD 1966 SC 684; Allied Bank of Pakistan v. Masood Ahmad Khan 1994 MLD 1557; Citi Bank N. A. A Banking Company through Attorney v. Riaz Ahmad 2000 CLC 847 and Messrs United Dairies Farms (Pvt.) Limited 4 others v. United Bank Limited 2005 CLD 569 ref.

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

----S. 69(1)(b)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.15---Sale of mortgaged property---Provision of S.69(1), Transfer of Property Act, 1882 arms the mortgagee with the power to sell or concur in sale of mortgaged property in certain cases---Clause (b) of subsection (1) of the Act relates to the matters, where mortgagee is the Federal Government or a Provincial Government or a Banking Company---Sale of mortgaged land, without intervention of the court, where mortgagee is a Banking Company is permissible only when prescribed conditions, as notified by Federal Government are met---Banking company, therefore, can proceed to sell mortgaged property, as envisaged in proviso to S.69(2), Transfer of Property Act, 1882.?

(d) Interpretation of statutes---

----Banking law---Banking transactions in today's world being complex and intricate, laws were required to be interpreted according to the prevailing banking system, rather than what it used to be when Transfer of Property Act, 1882 was promulgated.?

(e) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15---Transfer of Property Act (IV of 1882), S.69---Constitution of Pakistan (1973), Chap.1 [Arts.8 to 28] & Art. 199---Constitutional petition---Vires of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001---Held, Provisions of transfer of Property Act, 1882, no matter how old they are, hardly remain a justification for the validation and constitunality of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001---Provisions of Transfer of Property Act, 1882, will therefore, be irrelevant consideration to validate S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Principles.

The mere fact that the provision of section 69 of the Transfer of Property Act, 1882 is century old law and has not been declared invalid over such a long period, by itself would not be a justification for validation of another enactment, empowering the mortgagee with the same powers to deal with the mortgaged property as the Acts referred to are strictly not in pari materia and there are several exceptions in this context. The Legislature in its wisdom, distinguished banking transactions being complex and intricate in nature, has not equated it with simple transactions of mortgage, inter se two individuals. The provisions of section 69 of Transfer of Property Act, 1882 were, therefore, found insufficient to cover the disputes of mortgage in a banking transaction and thus, a change was made by adding a proviso to subsection (2). This itself clearly establishes that the legislature itself felt the need to amend the Transfer of Property Act, 1882. Consequently, the proviso was incorporated through Presidential Order No.4 of 1975. Therefore, it is clear that Transfer of Property Act, 1882 was inadequate to deal with banking matters and to harmonize it with the present banking transactions an amendment was incorporated. It is also noteworthy that the Constitution is the supreme law of the land and any law in conflict with any provision of the same cannot hold field. The rights enacted in the Constitution contain an over-riding effect qua all other laws, therefore, any provision in any other law, which is in conflict with the supreme law, especially the fundamental rights cannot survive. The provisions of Transfer of Property Act, 1882 no matter how old they are, hardly remain a justification for the validation and constitutionality of Section 15 of Ordinance, 2001. That Transfer of Property Act, 1882 was enacted when the constitutional provisions regarding fundamental rights of the citizen were not the part of the Constitution and conditional sales were permissible under law. Provisions of Transfer of Property Act, 1882 will, therefore, be irrelevant consideration to validate impugned provision of the Ordinance.?

(f) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15---Constitution of Pakistan (1973), Chap.1 [Arts. 8 to 28] & Art.199---Constitutional petition---Vires of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001---Held, considering the validation of provisions of S.15 of the Ordinance on the basis of other alike statutes, will be wholly conjectural inference.?

(g) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15(12)---Constitution of Pakistan (1973), Art.199---Power of Judicial review of High Court---Provision of S.15(12), Financial Institutions (Recovery of Finances) Ordinance, 2001 purport to take away from the High Court its power of Judicial review.?

(h) Constitution of Pakistan (1973)---

----Arts. 4 & 199---Due process of law---Access to justice is a fundamental right, any thing to the contrary is not permissible and the tribunals of limited jurisdiction are required to follow due process of law---Due process of law" means that individuals are not required to be only dealt with in accordance with law but it qualifies further that the process adopted in this context is open, fair and transparent therefore due determination of the default by an unbiased Tribunal or a Court is sine qua non and anything to the contrary is offensive to the legal parameters of settled law.?

(i) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15---Constitution of Pakistan (1973), Arts.2-A, 3, 4, 9, 18, 23, 24, 25, 175 & 199---Vires of S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Section 15 of the Ordinance is against the principles of equity and treats one of the parties in a disadvantageous position---Where the parties are not treated alike, both in privileges conferred and liabilities imposed, such discrimination is not only against the principles of equity but also offends the provisions of Supreme Law i.e. Arts. 2-A, 3, 4, 9, 18, 23, 24, 25 & 175 of the Constitution.?

(j) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 15---Constitution of Pakistan (1973), Arts.2-A, 3, 4, 9, 18, 23, 24, 25, 175 & 199---Vires of S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 confers upon Financial Institution arbitrary unbridled and uncontrolled powers to follow either of the two procedures in the matter of recovery of amount debt/finance, secured through a mortgage---First procedure is the filing of recovery suit under S.9 of the Ordinance, where the liability of borrower/customer is determined through court and thereafter the process of recovery of the ascertained amount is initiated, by adopting the procedure of execution of decree as envisaged in S.19 of the Ordinance, while the second procedure is resort to S.15 by the sale of the mortgaged property, through its auction, after issuance of three notices and adjustment of sale proceeds towards liability of customer, without intervention of the court and without ascertainment of liability and the Ordinance furnishes no guidance for the exercise of this discretion---No criteria is mentioned in S.15 of the Ordinance for filing of suit against one customer and proceeding under S.15 against the other customer, leaving choice in the hands of creditor (Financial Institution) of pick and choose, which is discriminatory resulting into treating borrowers/customers of a bank, unequally, who are otherwise similarly placed---Financial Institution selects either of two modes of recovery, which is discriminatory and infringes the fundamental rights of citizen.?

Waris Meah v. State Bank of Pakistan PLD 1957 SC 157 and Inamur Rehman v. Federation of Pakistan and others 1992 SCMR 563 ref.

(k) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.15 & 9---Constitution of Pakistan (1973), Arts.2-A, 3, 4, 9, 18, 23, 24, 25, 175 & 199---Vires of S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Visible and striking conflict and repugnancy exists between the two provisions of the Ordinance i.e. S.9 and S.15 of the Ordinance---Such conflict attracts the application of theory of "Reading Down", which is rule of interpretation, resorted to by the courts, when provision of law is found to be such that it offends fundamental rights or it falls outside the ambit of competence of a particular legislature---Section 9 of the Ordinance provides for procedure for ascertainment of liability through proper adjudication keeping in view the principles of natural justice, fair play and equity---Provision of S.15 of the Ordinance are plainly discriminatory, provides no procedural machinery for ascertainment or determination of amount due and violates fundamental rights of the citizens and does not conform to the Constitution and the same cannot survive or exist in view of the provisions of the Constitution---When there is conflict between two provisions, the one which obeys to prescription of natural justice, reasonableness, equality between citizens and yields to due process of law, has to survive as against the one which is unjust, arbitrary and deprives a person of his property without due process of law.?

(l) Interpretation of statutes---

----Theory of "Reading Down"-Applicability---Scope---`Reading Down" theory is a rule of interpretation, resorted to by the courts, when provision of law is found to be such that it offends fundamental rights or it falls outside the ambit of competence of a particular legislature.?

(m) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15(1)(a)---Terms "mortgage"; "obligation", and phrase "gives rise to a pecuniary liability"---Meanings.

Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672; Muhammad Ayub Butt v. Allied Bank Ltd. Peshawar and others PLD 1981 SC 359 and Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512 ref.

(n) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)--

---S.15---Constitution of Pakistan (1973), Arts.2-A, 3, 4, 9, 18, 23, 24, 25, 175 & 199--Vires of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001---Section 15 of the Ordinance reflects that the parties to dispute are not equal, in fact, the status of Bank is elevated at par with the Court of law and it becomes a judge of its own cause, rather it has been bestowed with even more arbitrary authority than a court of law---Section 15 bestows upon the Bank the powers to participate in the auction proceedings, which is a departure from the rules of natural justice and equity---Such is an indicator that a right has been given to the Bank, which compromises the principles of transparency and determination which is clearly in conflict with the Constitution---Status of customer, in the present scenario, is relegated to that of a litigant before a Bank with the rider that he is left defence-less and cannot raise objection, in any manner, whatsoever, to the process adopted by the Bank in terms of S.15---Provision of S.15 is thus clear discrimination against the principles and norms of justice and as such cannot sustain, scrutiny of the Courts.?

(o) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.15---Constitution of Pakistan (1973), Arts.2 A, 3, 4, 9, 18, 23, 24, 25, 175 & 199---Vires of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001---Provisions of S.15 of the Ordinance are repugnant to the provisions of the Constitution and is in conflict with fundamental rights and thus S.15 cannot survive on the touchstone of Arts.2-A,3, 4, 9, 23, 24, 25 & 175 of the Constitution and is ultra vires of the Constitution and of no legal effect---Infirmities and vices found in S.15 on comparison with other similar provisions of law and viewed S.15 on the touchstone of Arts. 2 A, 3, 4, 9, 23, 24, 25 & 175 of the Constitution enumerated---Cases which have attained finality i.e. where the possession of the mortgaged properties have already been delivered, sale proceeds stood adjusted towards outstanding amounts and sale-deed have been registered, under S.15, are past and closed transactions and present judgment will not affect such sales---Other sales under S.15, which have not attained finality are declared illegal and are set aside---Auction price received by the Financial Institutions in respect of the sales, which have not attained finality shall be refunded to the auction purchasers within a period of one month from the date when he approaches the Financial Institution.

Section 15, Financial Institutions (Recovery of Finances) Ordinance, 2001 compared with other similar provisions of law and viewing the provision of section 15 on the touchstone of Articles 2-A, 3, 4, 9, 23, 24, 25 and 175 of the Constitution and analysis yields the clear inference that suffers from various legal infirmities and vices:--

Firstly, no procedure is provided to be adopted for public auction.

Secondly, the provision is silent as to the manner of fixing reserve price.

Thirdly, the Financial Institution is conferred with the authority to sell and itself purchase the mortgaged property, transfer the same and get the sale deed registered in the name of purchaser. The omnibus powers of the Financial Institution are also against the public policy. Financial Institution by virtue of impugned provision becomes the buyer, the seller and the registering or transferring authority. Unbridled powers in the hands of the mortgagee to sell the property, purchase the same and get it transferred in its name, by all means is unequal treatment and the rights of mortgagee are preferred over the interest of mortgagor. The Financial Institution in this exercise sits as judge of its own cause.

Fourthly, a loan, which is also secured by pledge, is to be recovered from sale of the pawner's pledged goods. The pawnee can legally recover its debt only when such pawnee is in a position to deliver back or return the pledged goods. Financial Institution through impugned provision, can recover the debts through sale of mortgage property, even when the Financial Institution is unable to deliver the pledged goods.

Fifthly, the impugned enactment prescribes the mechanism of recovery from mortgagor and principal borrower but is silent about recovery from Financial Institution or its obligation to pay. Both the parties are not treated equally which is against the spirit of Articles 4 and 25 of the Constitution.

Sixthly, a time barred debt can be recovered under the impugned provision and valuable rights of the borrower are snatched, smothered and stymied, which have accrued to customer with the flux of time. Snatching away of such rights is against the mandate of Articles 4, 23 and 24 of the Constitution.

Seventhly, the mortgagee can recover the penalties, other charges and damages without any proof thereof, which is exploitative on its part and violation of Articles 2-A, 3 and 4 of the Constitution.

Eighthly, the mortgaged property is auctioned for recovery of an amount, which is unascertained and undetermined. Financial Institution can sell the mortgaged property without proving that the mortgage was created for the loan sought to be recovered through sale or it related to some other loan between the same parties. The powers of the Financial Institution are clearly violative of Articles 2-A, 3, 4, 23 and 24 of the Constitution.

Ninthly, the impugned provision has failed to save the borrower from mala fide action of the lender, which offends Articles 2-A, 3, 4 and 9 of the Constitution.

Lastly, the powers of the courts are curtailed and a bar is imposed on the Court to restrain sale under the impugned provision. The provision is impinging upon the power of the Court, as enshrined in Articles 2-A and 175 of the Constitution.?

Sh. Abdul Sattar Lasi v. Federation of Pakistan through Secretary, Ministry of Law, Justice and Parliamentary Affairs, Islamabad and 6 others 2006 CLD 18; A. Batcha Saheb v. Nariman K. Irani and others AIR 1955 Mad. 491; Mst. Ameer Khatun v. Faiz Ahmed and others PLD 1991 SC 787; Messrs Elahi Cotton Mills Ltd and others v. Federation of Pakistan through Secretary Ministry of Finance, Islamabad and 6 others PLD 1997 SC 582; Sunil Batra v. Dehli Administration and others AIR 1978 SC 1675; Wajahat Ikram and others v. The State 1999 SCMR 1255 and Rauf Bukhsh Qadri v. The State and others 2003 MLD 777; Aftab Shahban Mirani v. President of Pakistan and others 1998 SCMR 1863; Al-Jehad Trust v. Federation of Pakistan PLD 1996 SC 324; Sharaf Faridi and 3 others v. The Federation of Islamic Republic of Pakistan and others PLD 1989 Kar. 404; Government of Balochistan through Additional Chief Secretary v. Azizullah Memon and others 1993 PLD SC 341; Province of Punjab and others v. National Industrial Cooperative Credit Corporation and others 2000 SCMR 567; National Industrial Cooperative Credit Corporation Ltd. v. Province of Punjab/Government of Punjab through Secretary PLD 1992 Lah. 462; Pakistan through Secretary v. Muhammad Umar Khan and others 1992 SCMR 2450; Naseem. Mehmood v. Principal King Edward Medical College Lahore and others 1965 PLD (W.P.) Lah. 272; Gul Khan v. Government of Balochistan through Secretary PLD 1989 Quetta) 8; Abdul Raheem and 2 others v. Messrs United Bank Limited of Pakistan PLD 1997 Kar. 62; Messrs Chanab Cement Product (Pvt.) Ltd. v. Tribunal Lahore and others PLD 1996 Lah. 672; Khan Asfand Yar Wali v. Federation of Pakistan through Cabinet Division PLD 2001 SC 607; Mehram Ali and others v. Federation of Pakistan and others PLD 1998 SC 1445; Asif Ali Zardari and others v. The State PLD 2001 SC 568; Nek Muhammad v. Roda PLD 1986 SC (AJ&K) 23; Messrs Faridsons Ltd v. Government of Pakistan through Secretary PLD 1961 SC 537; Abdus Saboor Khan v. Karachi University and other PLD 1996 SC 536; Ghulam Mustafa Jatoi v. Additional District and Sessions Judge/Returning Officer 1994 SCMR 1299; A.D.B.P. and others v. Abid Akhtar 2003 SCMR 1547; The Province of West Pakistan v. Muhammad Ayub Khuhro PLD 1967 Kar. 673; A.D.B.P. v. Sanaullah Khan 1988 PLD SC 67; Egmore Benefit Society, 3rd Branch Ltd. through Damodara Mudaliar v. K. Aburupammal AIR (30) 1943 Mad. 301; Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd. and another 2003 CLD 1693; Messrs Nizamuddin & Company and four others v. The Bank of Khyber 2003 CLD 914; Muhammad Rafiq v. United Bank Ltd and another 2005 CLD 1162; Hudabiya Textile Mills Ltd. and other v. Allied Bank of Pakistan Ltd. and other PLD 1987 SC 512; Mrs. Aziz Fatima and three other v. Rehana Chughtai and three other 2000 CLC 863; Brig. (R) Mazhar-ul-Haq and another v. Muslim Commercial Bank PLD 1993 Lah. 706; Messrs A. M. Rice Corporation and others v. Bank of Punjab and others 2003 CLD 1783; Waris Meah v. State Bank of Pakistan PLD 1957 SC 157; Miss Benazir Bhatto v. Federation of Pakistan and another PLD 1988 SC 416; Abdul Latif v. Government of West Pakistan PLD 1962 SC 384; Syed Ali Shah v. Abdul Saghir Khan Shervani PLD 1990 SC 504; Benazir Bhutto v. President of Pakistan PLD 1998 SC 388; Muthialpet Benefit Fund Limited v. Devarajulu Chetty and others AIR 1955 Mad. 455; Haji Ghulam Zamin and another v. A. B. Khondkar and others PLD 1965 Dac.165; Province of Punjab and another v. National Industrial Cooperative Credit Corporation and another 2000 SCMR 597; Agricultural Development Bank of Pakistan v. Sanaullah Khan and others PLD 1988 SC 67; Messrs Grain System (Pvt.) Ltd. Karachi v. Agricultural Development Bank of Pakistan Islamabad 1993 MLD 1031; Asim Textile Mills Ltd and others v. NAB and others PLD 2004 Kar. 638; Waris Meah v. State Bank of Pakistan PLD 1957 SC 157; I. A. Sherwani v. Government of Pakistan through Secretary Finance Division Islamabad and others 1991 SCMR 1041; Umer Ahmad Ghuman v. Government of Pakistan and others PLD 2002 Lah. 521; Miss Shehla Zia and others v. WAPDA PLD 1994 SC 693; New Jubilee Insurance Company Ltd Karachi v. National Bank of Pakistan Karachi PLD 1999 SC 1126; Yousaf Textile Mills v. Trust Leasing Corporation 2006 CLD 1191; Pakistan Muslim League (Q) and others v. Chief Executive of Islamic Republic of Pakistan and others PLD 2002 SC 994; R. K. Garg v. Union of India and others AIR 1981 SC 2138; Messrs Master Foam (Pvt.) Ltd. and 7 others v. Government of Pakistan through Secretary, Ministry of Finance and others PLD 2005 SC 373; Marida Chemicals Ltd. and others v. Union of India and others (2004) 120 CC 373; Saiyyid Abul A'la Maudoodi and others v. The Government of West Pakistan and another PLD 1964 SC 673; Universal Tobacco Company, Par Hoti, Mardan through Manager and 9 others v. Pakistan Tobacco Board and 3 others 1998 CLC 1666; Chitta Ranjan Sutar v. The Secretary, Judicial Department, Government of East Pakistan and 2 others PLD 1967 Dac. 445; Narasimhachariar v. Egmore Benefit Society, 3rd Branch Ltd. AIR 1955 Mad. 135; Alka Ceramics, Piplodi, Himatnagar v. Gujarat State Financial Corporation, Ahmedabad and others AIR 1990 Gujarat 105; Danaharta Urus Sdn Bhd v. Kekatong Sdn Bhd (Bar Council Malaysia, intervener) (2004) 2 MLJ 257; Ocean Industries Limited and another v. Industrial Development Bank PLD 1966 SC 738; Messrs Bank of Oman Ltd. v. Messrs East Trading Co. Ltd. and others PLD 1987 Kar. 404; Messrs R. K. Industries Plot No. SPL 35,E Industrial Estate, Kallur v. A. P. State Financial Corporation and others AIR 1991 AP 174; Haryana Financial Corporation and another v. Jagdamba Oil Mills and another (2002) 3 SCC 496; The Director of Industries, U. P. and others v. Deep Chand Agarwal AIR 1980 S.C. 801; B.K. Kamiruddin and others v. Union of India and others AIR 1993 Orissa 238; Messrs Surprise Hotel (Pvt.) Ltd. v. U.P. Financial Corporation and others AIR 1998 Allahbad 24; Messrs Kharavela Industries (Pvt.) Ltd v. Orrisa Finance Corporation and others AIR 1985 Orissa 153 and Messrs Muhammad Siddiq Muhammad Umar v. The Australasia Bank Ltd. PLD 1966 SC 684 ref.

Per Sayed Zahid Hussain, C.J. agreeing with Syed Hamid Ali Shah, J

(p) Interpretation of statutes---

----While construing a law or its provisions, the legislative history and progression of law assumes significant importance.?

(q) Financial Institutions (Recovery of Finances) Ordinance (XLV of 2001)---

---S.15---Background of provision of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001 and peculiar and special features stated.?

Messrs Chenab Cement Product (Pvt.) Ltd. and others v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672; Muhammad Ayub Butt v. Allied Bank Ltd. Peshawar and others PLD 1981 SC 359; Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; Pakistan Fisheries Ltd., Karachi and others v. United Bank Ltd. PLD 1993 SC 109 and Agricultural Development Bank of Pakistan and another v. Abid Akhtar and others 2003 SCMR 1547 ref.

(r) Banker and customer---

----Obtaining loan or availing financial facility---Rights and obligations of Banker and customer.

If anybody has obtained loan or availed financial facility, it becomes his moral and legal obligation and duty to return the same in accordance with the terms and conditions, on which the same was obtained and availed; and in case of failure and default, the Banking Company/Institution is entitled to seek the remedy for securing its interest and recover the amount due. Whereas the creditor has the right to recover whatever is due, the borrower/customer is entitled to get the determination made of the due amount. Both have certain rights and obligations to be dealt in a just and fair manner.?

(s) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 15---Constitution of Pakistan (1973), Arts.2-A, 3, 4, 9, 18, 23, 24, 25, 175 & 199---Vires of S.15, Financial Institutions (Recovery of Finances) Ordinance, 2001---Term "default" as used in S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Significance and connotation---Unguided arbitrary and unreasonable power, which is amenable to discretionary and discriminatory exercise is contrary to all norms of justice and need to be tested on the touchstone of the constitutional provisions, being the fundamental and basic law of the land---Section 15 of the Ordinance is in conflict with the constitutional provisions---Issue of vires or validity of S.15 of the Ordinance having not arisen in the case, observations appearing in the judgment in United Bank Ltd. v. Defence Housing Authority PLJ 2004 Lah. 323 = 2004 CLD 215, held, cannot be treated as a precedent for the proposition in the present case.

The term "default" has got special significance in the context of provisions of S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001. "Default" as commonly understood is a large and loose word i.e. failure to do or pay what one should do. Every failure on the part of a person without any ulterior design and mala fide intention would not equate with the expression "default" as used in its strict legal sense. Before a person is declared to be in default, it is absolutely necessary that there should have been a demand to make payment of a determined sum which should have remained un-responded and unattended for a period beyond the period prescribed by law. Even under the laws which provide for the recovery through the coercive process i.e. as land revenue, it is necessary to make determination of the amount due and a mere claim by one party to a particular amount, cannot be made basis for the enforcement of coercive procedure. Bank cannot be equated with a proper judicial forum for determination of the amount due against a borrower notwithstanding the fact that summary power of recovery of amount due has been conferred on it by law with a view to obviate cumbersome procedure of execution of decree as contained in Order XXI of the Code of Civil Procedure, 1908 and the Banking Law in the event of substantial dispute between the parties, the recovery of such procedure would be available only where the amount claimed was found due, ascertained and determined by a competent judicial forum. The rationale behind was that unbridled, unjust and arbitrary power could not be attributed to have been conferred on such functionaries. The provisions of section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 indeed vest the Financial Institutions with a vast and extensive power to selling the properties of mortgagers without intervention of the court and without due determination of amount. This unguided, arbitrary and unreasonable power, which is amenable to discretionary and discriminatory exercise is contrary to all norms of justice and need to be tested on the touchstone of the constitutional provisions, being the fundamental and basic law of the land.?

The Financial Institutions (Recovery of Finances) Ordinance, 2001 is in conflict with the constitutional provisions.?

Chief Justice observed that "I am not oblivious of my judgment in United Bank Limited v. Defence Housing Authority (PLJ 2004 Lahore 323=2004 CLD 215) and consider it my duty to refer to the same. In that case after the decree by the Banking Court, the decree holder bank had disposed of the property through auction and issue arose about the implementation of the said sale wherein provisions of sections 15 and 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 were cited. As the perusal of the judgment would show, issue of vires or validity of provisions of section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 did not arise in that case. It may thus be clarified that the observations appearing in that case cannot be treated as a precedent for the proposition in the instant case. This is what I thought fit to add for amplification and clarification through this note, concurring with the conclusions of my learned brother".?

Irfan Gul Magsi v. Haji Abdul Khaliq Soomro and others 1999 PTD 1302; Agricultural Development Bank of Pakistan and another v. Abid Akhtar and others 2003 SCMR 1547; Miss Benzair Bhutto v. Federation of Pakistan and another PLD 1988 SC 416; Mrs. Benazir Bhutto and another v. Federation of Pakistan and another PLD 1989 SC 66;. Inamur Rehman v. Federation of Pakistan and others -1992 SCMR 563; Messrs Chenab Cement Product (Pvt.) and others v. Banking Tribunal, Lahore and others PLD 1996 Lahore 672 and Mehram Ali and others v. Federation of Pakistan and others PLD 1998 SC 1445 and S.M. Zafar in "Understanding Statutes-Canons of Construction" revised Edition-2008 at Page-832 ref.

United Bank Limited v. Defence Housing Authority 2004 CLD 215 clarified.

Shahid Ikram Siddiqui, Barrister Zafar Ullah Khan, Salman Aslam Butt, Iftikhar Ullah Malik, Gohar Sicddiq, Nadeem Ahmad Sheikh and Abdul Hameed Chauhan for Petitioner.

Iftikhar Hussain Shah, Deputy Attorney General of Pakistan, Uzair Karamat Bhandari and Mian Muhammad Kashif for Respondent.

Dates of hearing: 23rd, 26th, 27th May, 9th June and 12th September, 2008.

2009 C L D 361

[Lahore]

Before Syed Hamid Ali Shah, J

Messrs PETROSIN and 2 others---Plaintiffs

Versus

Messrs FAYSAL BANK---Defendant

C.O.S. No.47 of 1999, decided on 3rd September, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9 Civil Procedure Code (V of 1908), O.XVIII, R.3---Suit for damages against Bank---Adjustment of loan amount by Bank from under lien foreign currency account of plaintiff----Denial of plaintiff to have committed default in repayment of loan amount, thus,, alleged such adjustment by Bank to be in breach of finance agreement---Plaintiff; after closing his affirmative evidence reserved his right to adduce evidence in rebuttal---Bank produced documentary evidence to prove plaintiffs failure to repay loan amount---Non-production of evidence in rebuttal by plaintiff to disprove such documentary evidence of Bank---Effect---Documentary evidence of Bank for remaining un­rebutted, successfully established plaintiff's default in payment of loan amount---Suit was dismissed in circumstances.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Civil Procedure Code (V of 1908), S.11 & O.II, R.2---Constitution of Pakistan (1973), Art.199---Suit for damages against Bank---Default in payment of loan amount by plaintiff---Demand of Bank to adjust loan amount from under lien foreign currency account of plaintiff being collateral security---Order of High Court passed in constitutional petition filed by plaintiff restraining Bank from such adjustment---Suit by plaintiff after such adjustment by Bank---Plea of Bank that suit was barred by res judicata and O.II, R.2, C.P.C.---Validity---Plaintiff had challenged vires of BPRD Circular in constitutional petition---Claim of damages would not fall within purview of writ jurisdiction---Question of encashment of collateral security and its adjustment against loan amount were factual controversies---Adjustment from collateral security was permissible according to loan agreement, when there was default---Adjustment from collateral security was permissible according to loan agreement, when there was default---Regular trial would be required to determine question as to whether plaintiff had committed default in repayment of loan amount---Such questions could not be ascertained in writ jurisdiction---Suit was not barred by S.11 & O.II, R.2, C.P.C.

Shaukat Ali Mian and another v. The Federation of Pakistan 1999 CLC 607; Sar Anjam v. Abdul Raziq 1999 SCMR 2167; Muhammad Arif v. Mahmood Ali and 4 others 2003 MLD 954; Aki Habara Electric Corporation (PTE) Limited through Authorized Signatory v. Hyper Magnetic Industries (Private) Limited through Chief Executive/Director/Secretary PLD 2003 Kar. 420; Abdul Haque and others v. Shaukat Ali and 2 others 2003 SCMR 74; Province of Punjab through Chief Secretary and 5 others v. Malik Ibrahim and sons and another 2000 SCMR 1172; Nasimuddin Siddiqui v. United Bank Limited 1998 CLC 1817; National Bank of Pakistan v. Khalid Mahmood 2003 CLD 658; United Bank Limited v. Shahid Corporation 1991 CLC 1743 and Messrs PEL Appliances Limited v. United Bank Limited 2005 CLD 1352 ref.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.9---Suit for damages against Bank---Adjustment of loan amount by Bank from collateral security of plaintiff---Validity---Adjustment from collateral security was permissible according to loan agreement, when there was default in payment of loan amount by customer.

(d) Words and phrase---

---Word "by" as used in contracts and statutes---Connotation.

Muthua Chettiar v. Naraynan AIR 1928 Mad. 528; Goldman v. Broyles (Tax Cr.App, 141 SW 283); Rankin v. Woodworth (Pa, 3 Pen and W 48); Miller v. Philips (31 Pa (7 Casey) 218 and Conley v. Anderson (NY, 1 Hill 519) ref.

(e) Banking Companies Ordinance (LVII of 1962)---

----Ss.3-A, 25 & 41---Circulars issued by State Bank---Binding effect stated.

The circulars issued by the State Bank of Pakistan are in the nature of instructions/directions to the Financial Institutions. The Commercial Banks, whether private or government owned, are bound by those instructions. The directions are as consequence of promulgation of statute or an Act of Parliament. Banking company cannot deviate from these instructions or circulars. Banking Company is under obligation to follow these instructions within the contemplation of sections 3-A, 25 and 41 of Banking Companies Ordinance, 1962.

Wajid Saeed Khan v. Abdul Qadoos 1 than Swati and others 2007 CLD 1239; Messrs Dadabhoy Cement Industries Limited and others v. Messrs National Development Finance Corporation 2002 CLC 166 and United Bank Karachi v. Messrs Gravure Packaging (Pvt.) Ltd. and 4 others 2001 YLR 1549 ref.

(f) Tort---

----Claim for damages for breach of contract---Proof---Duty of plaintiff to establish damages suffered on each count by producing evidence that loss calculated as claimed was result of breach of contract.

Sadaruddin v. Messrs Mitchell's Fruit Farms Ltd., Karachi PLD 1979 Kar. 694; Tariq Cooking Oil v. United Bank Limited and other 2001 MLD 1181; City Bank v. Tariq Mohsin Siddiqi and others PLD 1999 Kar.196 and Jamshed Karimuddin Musalman v. Kunjilal Harsukh Kalar and another AIR 1938 Nag. 530 ref.

(g) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Suit for recovery of damages from Bank for having adjusted loan amount from collateral security of plaintiff in breach of loan agreement---Vague assertion in plaint that plaintiffs wanted to invest such money in business without disclosing its nature---Plaint not showing as to which of the three plaintiffs and to what extent each plaintiff had suffered loss---Evidence to prove such facts not produced by plaintiff----Suit was dismissed in circumstances.

Sadaruddin v. Messrs Mitchell's Fruit Farms Ltd., Karachi PLD 1979 Kar. 694; Tariq Cooking Oil v. United Bank Limited and other 2001 MLD 1181; City Bank v. Tariq Mohsin Siddiqi and others PLD 1999 Kar. 196 and Jamshed Karimuddin Musalman v. Kunjilal Harsukh Kalar and another AIR 1938 Nag. 530 ref.

(h) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.5 & 7---Suit for damages against Bank for breach of Moharaba Finance Agreement---Jurisdiction of Banking Court---Scope---Primary responsibility of banker as trustee of account-holder would be to safeguard interest of its customer and save him from any loss---Failure of banker to perform such obligations would give a valid cause to its customer to bring his grievance before Banking Court---Defendant-Bank was under legal and contractual obligation to fulfil agreements of finance---Determination of question arising out of such agreements was covered under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court had jurisdiction to try such suit.

Habib Bank Limited v. Raj Begum 1990 MLD 804; Abdul Rahim v. United Bank Limited PLD 1977 Kar. 62 and International Finance Corporation v. Halla Spinning Limited PLD 2000 Lah. 323 ref.

Hassan Aurangzeb for Plaintiffs.

Syed Ali Zafar for Defendant.

Date of Hearing: 27th August, 2008.

2009 C L D 390

[Lahore]

Before Syed Hamid Ali Shah and Hafiz Tariq Nasim, JJ

Sh. MUHAMMAD SALEEM---Petitioner

Versus

SAADAT ENTERPRISES---Respondent

R.F.A. No.284 of 2004, decided on 11th November, 2008.

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

----Ss.196, 212 & 283---Contract Act (IX of 1872), S.10---Arbitration Act (X of 1940), Ss. 2(a), 4, 17 & 20---Arbitration agreement on behalf of company signed by a person not authorized through a resolution of Board of Directors---Validity---Such person could not refer dispute to arbitration on behalf of company---Participation of such person in arbitration proceedings would not validate proceedings and award passed therein could not be made rule of Court---Principles.

Province of West Pakistan (Punjab) through Secretary Irrigation and Power Department and another v. Mian Abdul Hamid & Co. 1985 CLC 1170; Mst. Ghafooran Bi v. Abdul Hafeez and others PLD 1993 Kar. 668; Muhammad Suleman Khawar v. Board of Directors, Sindh Provincial Cooperative Bank Ltd. Karachi and 2 others PLD 1989 Kar. 261; Province of Balochistan v. Tribal Friends Company, Loralai PLD 1986 Quetta 321; Province of Punjab through it's Secretary Communication and Works Department, Lahore v. Messrs M.A. Rashid Saeed Alam Khan PLD 1990 Lah. 25; Muhammad Iqbal v. Riaz Sabir 1984 CLC 2375; A Qutab-ud-Din Khan, v. Ghee Mill Wala Dredging Co. (Pvt.) Ltd., Karachi 2001 MLD 115; Project Director Peoples Programme v. Kh. Muhammad Sarwar 1989 CLC 1030; Messrs International Development Association Limited v. Shaheen Foundation P.A.F. 1986 MLD 1753; Mst. Waqar Bano v. Syed Sher Ali and others 1987 MLD 146; Chief Engineer Building Department v. Pakistan National Constructions 1988 SCMR 723; Haji Ilyas, Haji Esa and 9 others v. Haji Ahmad and 7 others 1987 CLC 2509; Abaid Ullah Khan v. Inayat Ullah Khan 1998 MLD 1718; Messrs James Construction Co. (Pvt.) Limited through Executive Director v. Province of Punjab through Secretary to the Government of Punjab (Communication and Works) Department, Lahore PLD 2002 SC 310; Dr. Khalid Malik and 2 others v. Dr. Farida Malik and 7 others 1994 MLD 2348 and Puppalla Raurupu v. Nagidi Apalaswami AIR 1957 And. Pra. 11 ref.

(b) Arbitration Act (X of 1940)---

----Ss. 2(a), 4 & 20---Unsigned arbitration agreement---Validity--Dispute could not be resolved through arbitration on basis of such agreement unless intention of parties to resolve their dispute through arbitration was proved.

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

----Ss.196, 212 & 283---Contract Act (IX of 1872), S.10---Arbitration Act (X of 1940), Ss. 2(a), 4 & 20---Execution of arbitration agreement on behalf of company---Scope---Director or General Manager of company or any third person, unless empowered through a resolution of Board of Directors, could not execute such agreement---Principles.

According to section 10 of the Contract Act, 1872, an agreement is contract only when it is made by the parties competent to contract. An agreement on behalf of a company has to be signed by a competent/authorized person. Company is an artificial person and it can enter into a contract through its agent, who is appointed according to requirements of Memorandum of Association and Articles of Association of the company. Normal mode is through a resolution of Board of Directors of the company. A third party dealing with the agent of company cannot rely upon the apparent authority, but is bound to acquaint himself with memorandum and Articles of Association of the Company.

A Director is an individual and has no power to act on behalf of company. He is one among the body of Directors called Board and alone has no power except the one delegated to him by the Board. General Manager figures nowhere in the affairs of the company. His status is that of an employee and cannot act on behalf of the company. His act binds the company only when his appointment as an agent is made in writing and conferred by the Board of Directors through resolution and under seal. Section 196 of the Companies Ordinance, 1984 provides that business of the company is managed by the Board of Directors by means of a resolution passed in the meeting, while section 212 provides that person empowered on behalf of the company to enter into contract has to sign the deed on behalf of the company under his seal.

Section 283 of the Companies Ordinance, 1984 envisages that company can refer an existing or existing or future dispute between itself and other person through a written agreement.

(1937) 1 All LR 231 and (1982) 52 Company Cases 293 rel.

(d) Contract Act (IX of 1872)---

----Ss. 227 & 228---Contract by agent in excess of and beyond his authority would be void.

(e) Arbitration Act (X of 1940)---

----Ss. 13 & 30---Document, interpretation of---Arbitrator, powers of---Scope---Arbitration could not interpret document in a manner to replace his own view as against express stipulation contained therein.

Mirza Hafeez-ur-Rehman for Appellant.

Sh. Naseer Ahmad and Aleem Baig Chughtai for Respondents.

Date of hearing: 18th September, 2008.

2009 C L D 401

[Lahore]

Before Hafiz Tariq Nasim and Syed Hamid Ali Shah, JJ

A.B.L. ----Appellant

Versus

KHALID MAHMOOD----Respondent

R.F.A. No.122-C of 2008, heard on 30th September, 2008.

(a) Negotiable Instruments Act (XXVI of 1881)---

----Ss.4 & 13---Civil Procedure Code (V of 1908), O. XXXVII, Rr.2 & 3--- Suit for recovery of amount on basis of Call Deposit Receipts issued by Bank--Application for leave to defend suit---Plea of defendant-Bank was that plaintiff in collusion with its Ex-Manager had stolen such receipts and filled and completed same subsequently; that bank had lodged F.I.R. and filed suit for cancellation of such receipts; and that such receipts were not promissory notes, thus, suit was not maintainable---Validity---Bank had alleged plaintiff to be party to fraud and theft of such receipts---No consideration or payment with regard to such receipts had been made---Lodging of F.I.R. and filing of suit by Bank supported its plea---Fraud alleged by Bank was not merely a bald allegation--Allegation of fraud could not be determined summarily as same would need recording of evidence---When controversy needed its resolution through evidence, then grant of leave would be the right course---Leave application was accepted.

Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163; National Bank of Pakistan v. Messrs Elegzender and Company and 2 others PLD 1987 Lah. 290; Messrs Bhera Food Grain Corporation and 9 others v. Muslim Commercial Bank 1987 CLC 1843; Messrs Chaudhri Textile Mills and others v. United Bank Limited 1987 CLC 1957 CLC 1957; Messrs United Bank Limited v. Messrs Okara Trading Company and others 1989 MLD 921; Messrs Bashir Engineering Industries and 3 others v. The Muslim Commercial Bank Ltd. and another 1988 CLC 941; Habib Bank Limited v. Mussarat Ali Khan PLD 1987 Kar. 86; Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749; Zohair Akhtar v. Jawad Adil 2006 YLR 1510 and Messrs Ark Industrial Management Ltd. v. Messrs Habib Bank Limited PLD 1991 SC 976 ref.

M. Sarwar Ghani v. Muslim Commercial Bank Limited 1989 ALD 34 and Abdul Malik K. Lakha through Legal Heirs v. Abdul Karim K. Kara PLD 2004 Kar. 399 rel.

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

----Ss.4 & 13---Civil Procedure Code (V of 1908), O. XXXVII, Rr.1 & 2--- Suit for recovery of amount on basis of negotiable instrument---Leave to defend suit, grant of---Scope---Grant of leave to defend suit would be the right course, if defence put up by defendant needed its resolution through evidence---Duty of court explained.

While granting leave to defend the suit, the Court is to see that triable issues have been raised and defence put up by the defendant is fair, bona fide and reasonable. While examining so the Court is not to see that the defence put up will succeed at the end of the trial. The Court should act liberally (which does not mean generously) in the matter of granting leave to defend the suit. The facts or the plausible defence, has to be disclosed upon affidavit and appraisal of whole evidence or correctness of averments in affidavit, are not required to be examined with minute details, when the application for leave to defend is under consideration. Leave is refused or it is granted subject to condition when the Court finds the defence is illusory or sham, liability and execution of the negotiable instrument is admitted. When allegation of fraud, forgery or fabrication of negotiable instrument is pleaded, it makes a plausible defence, the applicant/ defendant in such circumstances is granted leave to defend the suit.

When the controversy needs its resolution through evidence, then grant of leave to defend the suit is the right course.

Fine Textile Mills Ltd., Karachi v. Haji Umar PLD 1963 SC 163; National Bank of Pakistan v. Messrs Elegzender and Company and 2 others PLD 1987 Lah. 290; Messrs Bhera Food Grain Corporation and 9 others v. Muslim Commercial Bank 1987 CLC 1843; Messrs Chaudhri Textile Mills and others v. United Bank Limited 1987 CLC 1957 CLC 1957; Messrs United Bank Limited v. Messrs Okara Trading Company and others 1989 MLD 921; Messrs Bashir Engineering Industries and 3 others v. The Muslim Commercial Bank Ltd. and another 1988 CLC 941; Habib Bank Limited v. Mussarat Ali Khan PLD 1987 Kar. 86; Mian Rafique Saigol and another v. Bank of Credit and Commerce International (Overseas) Ltd. and another PLD 1996 SC 749; Zohair Akhtar v. Jawad Adil 2006 YLR 1510 and Messrs Ark Industrial Management Ltd. v. Messrs Habib Bank Limited PLD 1991 SC 976 ref.

M. Sarwar Ghani v. Muslim Commercial Bank Limited 1989 ALD 34 and Abdul Malik K. Lakha through Legal Heirs v. Abdul Karim K. Kara PLD 2004 Kar. 399 rel.

(c) Fraud---

----Allegation of---Proof---Such allegation could not be determined summarily as same would need recording of evidence.

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

----Ss.4 & 13---Civil Procedure Code (V of 1908), O. XXXXVII, R.2---Allied Bank Limited Book of Instructions, Part IV, Cl.35---Suit for recovery of amount on basis of Call Deposit Receipt issued by Bank---Maintainability---Such receipt signed by Branch Manager and an officer of bank contained a promise to pay a certain sum of money on demand to payee only---Such receipt could be issued and delivered to a person not maintaining an account with issuing Bank---Such receipt was a promissory note and negotiable instrument as envisaged in Ss.4 & 13 of Negotiable Instruments Act, 1881 respectively---Such suit was, held, to be maintainable.

A.B.L. Book of Instruction Part-IV, Clause 35 ref.

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

----Ss. 10 & 151---Stay of subsequent suit or consolidation of former and subsequent suits---Scope---Where nature, procedure and jurisdiction of courts in both suits was distinct, then neither stay of subsequent suit nor consolidation of both suits could be ordered.

Ch. Tariq Mahmood Gill for Appellant.

Muhammad Ali Qureshi for Respondent.

Date of hearing: 30th September, 2008.

2009 C L D 412

[Lahore]

Before Syed Hamid Ali Shah, J

H.B.L.---Plaintiff

Versus

CRESCENT SOFTWEAR PRODUCTS (PVT.) LTD.---Defendant

C.O.S. No.4 and P.L.A. No.17-B of 2005, decided on 19th March, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.10(3)(4)(5)---Application for leave to defend suit---Non-­complying with mandatory requirements of S.10(3)(4)(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---Such application would become liable to be dismissed under S.10(6) of the Ordinance.

National Bank of Pakistan through Vice-President, Zonal Chief, Multan v. Effef Industries Limited and 11 others 2002 CLD 1431; Bolan Bank Limited through Attorneys v. Baig Textile Mills (Pvt.) Limited through Chief Executive and 6 others 2002 CLD 557; Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 CLD 1033; Bank of Khyber v. Messrs Spencer Distribution and 14 others 2003 CLD 1406; Zeeshan Energy Ltd. and 2 others v. Faisal Bank Ltd. 2004 CLD 1741; Allied Bank of Pakistan Ltd. through Iftikhar-ul-Haq and Khalid Ishaq v. Mohib Fabric Industries Ltd. through Chief Executive 2004 CLD 716 and Habib Bank Limited v. Messrs SABCOS (Pvt.) 21006 CLD 244 rel.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

---S.10---Civil Procedure Code (V of 1908), O.XXIX, R.1---Application for leave to defend suit---Non-filing of resolution of Board of Directors of defendant-company along with leave application---Effect---Lis on behalf of company without such resolution would have no sanctity---Leave application was dismissed in circumstances.

Messrs National Electric Company of Pakistan v. Allied Bank of Pakistan Ltd. and 2 others 1996 CLC 192; Walton Tobacco Company (Pvt.) Ltd. and others v. Azad Government of the State of Jammu & Kashmir and others 1993 CLC 66 and Muhammad Umar Mirza v. Wads Iqbal and others 1990 SCMR 964 rel.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 10---Contract Act (IX of 1872), S.129---Suit for recovery of loan amount--Application for leave to defend suit---Non-denial of such availability of finance facility by principal debtor---Non-­denial of execution of letter of personal guarantee by defendant---Plea of defendant-guarantor was that rescheduling of finance made after furnishing his guarantee had discharged him of his liability---Validity---Contract of guarantee being an independent agreement created contractual obligations between surety/guarantor and principal creditor independently---Such letter of guarantee covered future transactions, variations, rescheduling and renewal of finance facility---Such guarantee would not discharge defendant-guarantor of his responsibility thereunder---Suit was decreed against guarantor and principal debtor jointly and severally.

Habib Bank Ltd. v. Cargo Despatch Co. Ltd. and 4 others 1987 CLC 1002; Aqal Zaman v. Mst. Azad Bibi and 2 others 2003 CLC 702; S.A. Hameed and others v. Allied Bank of Pakistan Limited and others 2004 CLD 1620; Mian Aftab A. Sheikh and 2 others v. Messrs Trust Leasing Corporation Limited and another 2003 CLD 702; PLD 1998 Lah.450; United Bank Limited v. Messrs Usman Textiles and 6 others 2007 CLD 435 ref.

Mian Aftab A. Sheikh and 2 others v. Messrs Trust Leasing Corporation Limited and another 2003 CLD 702 rel.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Suit for recovery of loan amount---Mark-up claimed from date of expiry of agreement till filing of suit---Validity---Mark-up could be levied legally for period of transaction only i.e. from date of disbursement till expiry of period of agreement---Principles.

Messrs Naeem Associates through Proprietor and 6 others v. Allied Bank of Pakistan Limited through Branch Manager 2004 CLD 1672 ref.

Shams Mehmood Mirza for Plaintiff.

Syed Zafar Ali Shah for Defendants.

2009 C L D 425

[Lahore]

Before Syed Hamid Ali Shah and Hafiz Tariq Nasim, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another----Appellants

Versus

Mst. ANWAR GULZAR through her son----Respondents

R.F.A No.347 of 2008, decided on 16th December, 2008.

Insurance Ordinance (XXXIX of 2000)---

----Ss.118 & 124---Application for payment of death claim along with liquidated damages--Appeal to High Court---Counsel for respondent when confronted that the final judgment passed in a matter, without deciding pending application was not sustainable in the eye of law, he conceded and had submitted that the appellant was delaying the matter with mala fide intent, so as to deprive the respondent from her lawful claim, based on a valid insurance policy---Parties had reached the consensus; that the impugned judgment and decree be set aside with the result that the suit of the respondent be deemed to be pending along with application of the appellant for summoning the witness; that counsel for the respondent would contest the application for summoning the witnesses; that Tribunal would decide the application in the first instance through a speaking order and thereafter would proceed in the matter; that direction be issued to the Tribunal for expeditious disposal of the petition---Impugned order/judgment was set aside with the result that petition of respondent as well as the application of the appellant would be deemed pending before the Tribunal---Tribunal would first decide the application of the petitioner and thereafter the petition of the respondent.

Mian Naseer Ahmad icy. Appellants.

Liaqat Ali Butt for Respondent.

2009 C L D 451

[Lahore]

Before Syed Hamid Ali Shah, J

HABIB BANK LTD.----Plaintiff

Versus

Messrs VIRK HOUSE TRADING COMPANY LTD. ----Defendant

C.O.S. No.16 of 2001, decided on 13th January, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 9 & 7---Civil Procedure Code (V of 1908), Ss. 2(6), 44 & 44-A---Foreign judgment---Courses open to decree holder in whose favour foreign judgment has been passed.

Section 2(6) of C.P.C. pertains to a foreign judgment and it refers to decree or order of a foreign Court. Three courses are open to a decree holder in whose favour foreign judgment has been passed. The decree holder can seek execution of the foreign judgment under section 44 or 44-A of C.P.C., where these provisions are applicable. Second available course is filing of the suit on the basis of foreign judgment, treating it to be the cause of action, subject to limitation under Article 117 of the Limitation Act. Thirdly, a suit can be filed in the Court of competent jurisdiction in Pakistan on the basis of original cause. Foreign judgments can be enforced in Pakistan by filing a suit, in which the cause of action is the foreign Judgment. The Banking Court can entertain a suit in a similar manner.

Al-Attar Sports Dress Trading v. Habib Bank Limited 2005 CLD 1693; Naeemullah Malik v. United Bank Limited 2006 CLD 1592; Habib Bank Limited v. Ali Muhammad 2005 CLD 491; Mian Nazir Ahmad v. Abdur Rashid Qureshi 1986 CLC 1309; Ganguli Engineering Ltd. v. Smt. Sushila Bala Dasi and another AIR 1957 Cal. 103 and Popat Virji v. Damodar Jairam AIR 1934 Bom. 390 ref.

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

----S. 13---Foreign judgment---Enforceability of a foreign judgment and being binding in Pakistan---Recognized conditions.

Section 13 of C.P.C. recognizes the enforceability of a foreign judgment in Pakistan provided it fulfils the conditions enumerated therein namely:--

(i) it has been pronounced by a court of competent jurisdiction;

(ii) it has been given on the merits of the case;

(iii) it is founded on correct view of international law, or does not amount to refusal of recognized applicable law of Pakistan;

(iv) proceedings in which judgment was obtained are not opposed to principles of natural justice;

(v) it has not been obtained through fraud; and

(vi) it does not sustain a claim founded on breach of any law in force in Pakistan.

A foreign judgment, which complies with the above conditions is binding when the matter adjudicated upon was directly adjudicated between the same parties.

(c) Judgment---

----Judgment on merits---Test---Judgment is deemed to be on merits, even in cases where no defence has ever been on the file, yet the court pronounced the judgment on judicial consideration of plaintiff s evidence---When Court, while passing the judgment, has not decided the matter solely due to default in appearance of the defendant, the test to be employed for this purpose is to find out whether the judgment is pronounced as penalty for the conduct of the party or it is based on the consideration of the truth or falsity of the plaintiffs case while the defendant despite opportunity, refrained from contesting the lis.

(d) Judgment---

----Natural justice, principles of---Requirement of providing of opportunity of being heard according to the recognized principles of natural justice---Where the defendants were afforded the opportunity of being heard by the court of first instance but the opportunity was not availed, it was wrong to contend that judgment or order passed without hearing the other side, offended the principles of natural justice---Law required that opportunity be afforded to a party to a Us---If such party, despite such opportunity opts to stay away from the proceedings wilfully, it could not subsequently come forward when an adverse order was passed against it and then challenge such order or judgment on the plea of denial of the right of hearing--Aim of rules of natural justice was to secure justice, which rule was originally based on two principles namely that "no one should be condemned unheard" and that "no decision shall be given against a party without affording him a reasonable hearing" and then a third principle/rule emerged that _judicial or quasi-judicial forum, must hold enquires in good faith, unbiased and not arbitrary or unreasonably"---Essential point to be kept in consideration to meet the ends of justice would be that the person concerned should have a reasonable opportunity of presenting his case and such measures should be applied that a reasonable man would regard it a fair procedure in particular circumstances and it would be useless to provide further opportunity to a person, who was once provided adequate opportunity and failed to avail the same without any lawful justification---If the court which passed an order or a judgment had acted fairly then it will be considered that there was no breach of principles of natural justice---Proceedings, action or order judgment would not vitiate in such circumstances on the touchstone of principles of natural justice.

Chairman, Board of Mining Examination and Chief Inspector of Mines v. Rajmee AIR 1977 SC 965 ref.

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

----Ss. 14 & 13---Foreign judgment, presumption as to---Bench of three Judges of a foreign court of the first instance, headed by the President of the court of commercial plenary jurisdiction, examined the documents, went through pleadings and other relevant record, held the defendants liable for the payment of the suit amount---Court had considered relevant account opening application, trust receipt of debt and copy of the relevant statement of account and then determined the liability of the defendants---Judgment to all intents and purposes, was a judgment on merit---Liability of defendants was directly adjudicated upon; appellate court had also held the defendants only liable for the payment of the suit amount---Certified copies of foreign judgments along with their translation were available on record---Judgments were presumed to be pronounced by the court of competent jurisdiction within the contemplation of S.14, C.P.C. and defendant had failed to rebut the said presumption---Nothing was available on record to show that foreign judgment, upon which the plaintiff had filed the suit fell within the exception enumerated in S.13, C.P.C.---Judgment was conclusive and binding on the defendants and High Court in Pakistan, while entertaining the claim on the basis of foreign judgment, could not sit in appeal, over findings and conclusions of the fact, recorded by the foreign court.

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

----S. 2(6)---Limitation Act (IX of 1908), Art.117---Foreign judgment---Suit on the basis of foreign judgment---Limitation---Suit on the basis of cause of action upon a foreign judgment is governed by Art.117, Limitation Act, 1908 which provides a period of six years from the date of the foreign judgment.

Malik Matee Ullah for Plaintiff.

Jahanzeb Khan Bharuana for Defendants Nos.2 and 3.

Date of hearing: 24th December, 2008.

2009 C L D 507

[Lahore]

Before Abdul Shakoor Paracha, J

Messrs MUSLIM COMMERCIAL BANK LTD. through Attonrey---Petitioner

Versus

Messrs NATIONAL SWEET AND CONFECTIONERY WORKS through Proprietor and others---Respondents

Writ Petition No.1106 of 2004, decided on 18th December, 2008.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 9---Constitution of Pakistan (1973), Art.199---Constitutional petition---Suit for recovery of loan by Bank---Defendant/ guarantor had died before the filing of the suit for recovery---Application of the plaintiff/Bank seeking permission to implead the legal heirs of the deceased defendant---Validity---Held, any order passed against a dead person being a nullity in law especially when long before the institution of the proceedings against him he had died, application of the plaintiff/ Bank seeking permission to implead the legal heirs of deceased defendant was rightly rejected by the Banking Court.

Mehr Muhammad v. Dy. Settlement Commissioner and another 1979 SCMR 182 ref.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 9---Civil Procedure Code (V of 1908), O.XXIII, R.1(2)(a)---Constitution of Pakistan (1973), Art.199---Constitutional petition---Suit for recovery of loan by Bank--Application of Bank seeking permission to withdraw the suit with permission to file a fresh suit on the same cause of action was rejected by Banking Court---Validity---Expression formal defect"---Connotation---In the present case, it was not in the knowledge of the Bank, at the time of filing, the suit, that defendant/guarantor had died, who had offered his personal guarantee, executed, signed and delivered memorandum of deposit of title deed to the plaintiff/Bank, mortgaged property of a residential house, executed irrevocable power of attorney in favour of Bank---Defendant/guarantor was a necessary party in the suit, and since he had died before filing of the suit, therefore, the suit against him was nullity in the eye of law and his legal heirs could not have been impleaded as party, therefore there was legal and formal defect in the form of the suit---Defect covered in the plaint was bona fide in nature, therefore, refusal to withdraw the suit was likely to lead to multifarious litigation, besides withdrawal did not injure vested rights of opposite party and served ends of Justice---Trial Court, in circumstances, ought to have granted permission to withdraw the suit and file a fresh suit in respect of the same subject matter---Constitutional petition of the Bank was allowed by High Court and order of rejection of application to file fresh suit was declared to have been passed without lawful authority and of no legal effect---Application of the Bank to withdraw the suit with permission to file a fresh suit was accepted accordingly---Principles.

Mehr Muhammad v. Dy. Settlement Commissioner and another 1979 SCMR 182; Muhammad Din v. Atta Muhammad and others PLD 1957 (P.W.) Lah. 971; Sardar Muhammad Kazm Ziauddin Durrani and others v. Sardar Muhammad Mom Fakhuruddin Durrani and others 2001 SCMR 148; Atul Krushna Roy v. Raukishore Mahanty and others AIR 1956 Orissa 77 and Aqal Hussain v. Muhammad Sadiq and 7 others 1986 CLC 1316 ref.

Ch. Muhammad Khan for Petitioner.

Nemo for Respondents.

2009 C L D 609

[Lahore]

Before Umar Ata Bandial, J

MUHAMMAD IQBAL---Appellant

Versus

N. K. RICE MILLS (PVT.) LTD. through Joint Official Liquidators and 6 others---Respondents

F.A.O. No.280 of 2003, heard on 5th November, 2008.

Companies Ordinance (XLVII of 1984)---

----S. 316(2)---Civil Procedure Code (V of 1908), O.XXXVII---Company under liquidation---Civil claim against such a company must be established before the Court of competent jurisdiction; the decrees on such claims were to be filed before and ranked by the official liquidator of the company under liquidation---Competent Court empowered to adjudicate claims under O.XXXVII, C.P.C. must hear and decide the suit by the claimant---View that a civil claim against a company under liquidation must necessarily be heard by the Companies Bench of the High Court was not supported by any law---Return of plaint in such a suit by the Trial Court was wrong and misconceived.

Tariq Masood and Rai Sajid Ali for Appellant.

Ms. Sidra Fatima Sheikh for Respondents Nos. 1 to 4.

Rana Waqas Latif for Respondent No.7.

Date of hearing: 5th November, 2008.

2009 C L D 614

[Lahore]

Before Sh. Azmat Saeed and Syed Asghar Haider, JJ

Dr. GHULAM HUSSAIN---Appellant

Versus

ORIX LEASING and another---Respondents

R.F.A. No.348 of 2008, decided on 19th November, 2008.

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

----SS. 9, 10 & 22---Suit for recovery of loan--Application for leave to defend suit---Execution of guarantee---Plaintiff had contended that defendant obtained finance by way of lease through personal guarantee of another defendant---Application for leave to defend the suit was dismissed and suit was decreed---Validity---Contention of defendant was that he had never signed a guarantee in favour of the borrower---Said assertion of defendant had been controverted by the counsel for the plaintiff--Alleged guarantee and indemnity which bore the signatures of the defendant had been admitted by him; however his, case was that such signatures had been obtained from him as a witness---Separate part of said document, was specifically identified due to two signatures of witnesses appearing thereat, while signatures admitted by defendant were on place identified for executant viz. the guarantor---Defendant who was in medical profession, was not an illiterate person---No defence worthy of trial having been put forward, application for leave to defend was rightly dismissed and the Trial Court had rightly decreed the suit---No case for interference and invalidation having been made out, appeal was dismissed by High Court.

Shahid Ikram Siddiqui for Appellant.

Akhtar Javed for Respondent No.1.

Respondent No.2 proceeded ex parte.

2009 C L D 622

[Lahore]

Before Mian Saqib Nisar and Abdul Shakoor Paracha, JJ

Dr. HAROON IFTIKHAR---Appellant

Versus

N. D. F. C. ---Respondent

R.F.A. No.630 of 2002, heard on 22nd October, 2008.

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

----Ss. 9, 10 & 22---Suit for recovery of loan---Application for leave to defend suit---Only one of the defendants resisted the suit and simply denied his status as one of the Directors of the company and a share-holder---Said defendant had also contended that he had not executed any personal guarantee and had further alleged that fraud had been committed on him by the management of the company (the principal borrower)---Banking, Court had observed that requisite record of the Registrar of the Companies had envisaged that said defendant was one of the sponsor Directors of the company who had also filed statutory return in the nature of Form 10---Said defendant had admitted that no remedy either civil or criminal had been availed by him to challenge his status of being a share-holder or a Director of the company against the management for the alleged fraud---Mere bald allegation in that behalf and evasive denial of non-execution of the personal guarantee, by itself was no plausible defence within the parameters of the law---Application for leave to defend suit was rightly dismissed by Banking Court and suit was rightly decreed.

Mst. Riffat Jehan and another v. Habib Bank Limited and 10 others 2005 PLD 941 and Kamran Zali v. Messrs Union Bank Limited 2002 CLD 876 rel.

Shahid Ikram Siddiqui for Appellant.

Miss Fatima Najeeb and Akhtar Javed for Respondent.

Date of hearing: 22nd October, 2008.

2009 C L D 632

[Lahore]

Before Kh. Farooq Saeed, J

MUHAMMAD NAWAZ---Appellant

Versus

MUHAMMAD SAFDAR and 3 others---Respondents

Writ Petition No. 11630 of 2007, decided on 2nd December, 2008.

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

----Ss. 7 & 9---Contract Act (IX of 1872), S.178---Constitution of Pakistan (1973), Art.199---Constitutional petition---Maintainability---Suit for recovery of loan by Bank---Petitioner, guarantor of the loan, sought direction of the High Court restraining the Bank from proceeding against the petitioner (guarantor) to pay the loan amount payable by the original loaner who could not pay back in time---Validity---Held, there was no reason for invocation of constitutional jurisdiction of High Court---Loan agreement showed that the loanee and the guarantor both were made jointly and severally responsible for payment of the loan and it was not the case where any fixed assets or collateral had been mortgaged by the Bank for payment, the only security with the Bank was the guarantee on the basis of which the loan was disbursed to the loanee---Entire responsibility, therefore, would shift to the shoulders of the guarantor, though, however, the prime responsibility remained that of loanee---Guarantor was also bound by the agreement under S.178, Contract Act, 1872---High Court declined to interfere in the case and dismissed the constitutional petition.

National Bank of Pakistan v. F.S. Aitzazuddin and 2 others PLD 1982 Kar. 577 fol.

Syed Ali Raza Gillani for Petitioner.

Sh. Nadeem Anwaar and Rana Ameer Ahmad Khan, Assistant A.-G. for Respondent.

Date of hearing: 2nd December, 2008.

2009 C L D 761

[Lahore]

Before Syed Asghar Haider, J

INTERNATIONAL FINANCE CORPORATION---Plaintiff

Versus

SARAH TEXTILES LTD. and 3 others---Defendants

Civil Original Suit No.49 of 2006, decided on 2nd February, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.10---Application for leave to appear and defend the suit---Maxim: Secundum allegata et probata (according to the matter alleged and proved)---Deviation---Normally party could not go beyond its pleadings under the principle of secundum allegata et probata---Defendants having raised propositions of law and partially of facts, which were part of petition for leave to appear and defend the suit, therefore, such petition could not be summarily rejected and should be decided on merits---Principle of secundum allegata et probata was not applicable in circumstances.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Civil Procedure Code (V of 1908), S.20---Banking Court, jurisdiction of---Determination---Filing of suit at place other than the one decided between parties-Effect-Contention of defendants was that Courts in Pakistan did not have any jurisdiction to adjudicate upon the matter as under agreement between the parties, courts at United Kingdom had exclusive jurisdiction---Validity---Various agreements subject-matter of dispute were executed in Pakistan, therefore, under S.20, C.P.C. suits regarding moveable property, personal actions and where cause of action had arisen could be instituted where any of the same had taken place---Defendants were residents of Pakistan, agreement was executed in Pakistan, therefore, Court in Pakistan was bestowed with jurisdiction to take cognizance of dispute---Suit was maintainable in circumstances.

Messrs C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan, 2004 CLD 587; Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931 and Muhammad Nafees v. Allied Bank of Pakistan Limited through manager and another, 2004 CLD 937 distinguished.

Hitachi v. Rupali Polyester Limited, 1998 SCMR 1618 and IFC v. Regent Knitwear COS No.115 of 2000 rel.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.2(a)---Banking Tribunals Ordinance (LVIII of 1984), S.2---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.2---'Financial institution'---Scope---Legislative history started with promulgation of Banking Tribunals Ordinance, 1984, wherein "Banking Company" was defined and institutions covered under the definition were mentioned---Definition of "Banking company" under S.2 of Banking Tribunals Ordinance, 1984, ended with word "means" which held that Banking company was to be construed in narrow and restrictive sense; thereafter provisional enactments were made but next substantive enactment Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, was enacted repealing Banking Tribunals Ordinance, 1984---Section 2 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, again used word "Banking company" and it ended with the word "means", such definition was also narrow and restrictive---Finally Financial Institutions (Recovery of Finances) Ordinance, 2001 was enacted, wherein clear departure from previous definitions on the subject was made and word "Banking company" was dropped and substituted with word "Financial institution"---With inclusion of word "includes" definition of "Financial institution" stood enlarged in S.2(a) of Financial Institutions (Recovery of Finances) Ordinance, 2001.

Don Basco High School v. The Assistant Director EOBI and others, PLD 1989 SC 128 rel.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.2(a) & 9---Banking Companies Ordinance (LVII of 1962), S.27---Banking Court---Jurisdiction---Plea raised by defendants was that in view of bar of S.27 of Banking Companies Ordinance, 1962, plaintiff company did not qualify to be a financial institution" as described under S.2(a) of Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, suit filed by plaintiff company was not maintainable---Validity---Plaintiff was an. investment institution duly recognized by Government of Pakistan---Bar of S.27 of Banking Companies Ordinance, 1962, was inapplicable as the enactment was not restricted to transacting banking business only but also covered ancillary or associated business---Agreement inter se parties permitted plaintiff to sue under Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was maintainable in circumstances.

(e) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.2(d)(iii)---"Obligation"---Scope---Word "obligation" as used in Financial Institutions (Recovery of Finances) Ordinance, 2001, required defendants to liquidate liability as they obtained finance from plaintiff company.

IFC v. Regent Knitwear COS No.115 of 2000 rel.

(f) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 10---Recovery of loan---Statement of accounts---Objection---Maxim: secundum allegata et probates, principle of---Applicability---Defendants admitted receipt of loan but objected to statement of accounts appended with plaint---Validity---Statement of accounts appended with plaint was in accordance with parameters of S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 which had been certified as required by law-Defendants did not object to any specific entry in statement of account, as they were required in law to raise a specific objection but it was not done---No specific objection to statement of accounts having been raised in petition for leave to appear and defend the suit, therefore, the same could not be raised later on under the principle of secundum allegata et probata---Defendants denied liability in law and not one facts, as they did not deny execution of documents subject-matter of the suit---Defendants failed to raise any substantial question of law or fact, which needed recording of evidence, therefore, leave application was dismissed---Documents appended with plaint specifically guarantees executed by defendants, documents of title, memorandum of deposit of title deeds, general power of attorney and admission made in petition for leave to appear, spelled out not only execution of valid agreement by parties but the same was also proved from record---All such documents jointly and severally proved transaction between the parties---Suit was decreed in circumstances.

Ziauddin Siddiqui v. Mrs. Rana Sultana and another, 1990 CLC 645; Gul-e-Rana and 4 others v. Citi Bank N.A. Lahore through Manager and another 2005 CLD 1126; Province of Punjab through Collector Rajanpur and 2 others, 2005 CLC 1336; PICIC Commercial Bank Limited v. Spectrum Fisheries Limited, 2006 CLD 440; National Development Finance Corporation v. Spinning Machinery Company of Pakistan Limited, 2002 CLD 53; Saudi Pak Industrial and Agricultural Investment Company (Pvt.) Ltd. Islamabad v. Messrs Allied Bank of Pakistan and another, 2003 CLD 596; Messrs Ittefaq Industries (Regd.) through Managing Partner and 2 others v. Bank of Punjab through Duly Constituted Attorney 2004 CLD 1356; Messrs C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587; United Bank Limited v. Messrs Ilyas Enterprises through Proprietor Mr. Ilyas Malik and 2 others 2004 CLD 1338; Messrs State Engineering Corporation Limited Islamabad through Manager (Personnel) S.M. Akram Farhat v. National Development Finance Corporation and another 2004 CLD 1344; Investment Corporation of Pakistan v. Sheikhupura Textile Mills Ltd. and others 2004 CLD 1396; Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others, 2003 CLD 931 and Muhammad Nafees v. Allied Bank of Pakistan Limited through Manager and another, 2004 CLD 937 distinguished.

N.B.P v. Effef Industries Limited and others, 2002 CLD 1431; Bolan Bank Limited v. Baig Textile Mills (Pvt.) Ltd. and others 2002 CLD 557; Saudi Pak Industrial and Agricultural Investment Company Ltd. v. Mohib Textile Mills Limited and others, 2002 CLD 1170; Bankers Equity Limited v. Ventonite Pakistan Limited and others, 2003 CLD 931; Bank of Khyber v. Spencer Distribution Limited and others, 2003 CLD 1406; Allied Bank of Pakistan v. Mohib Fabrics Industries Limited, 2004 CLD 716; Zeeshan Energy Limited v. Faysal Bank Limited, 2004 CLD 1741; Haji Ali Khan & Co. v. Allied Bank, PLD 1995 SC 362; Allied Bank v. Kohinoor Cotton Mills, PLD 1985 Lah. 89; Rubina Jamshed v. United Bank, 2005 CLD 50; IDBP v. NTN (Pvt.) Limited, 2002 CLD 369; Hitachi v. Rupali Polyester Limited 1998 SCMR 1618; Mashriq Bank v. Farooq Habib Textile Mills, 2007 CLD 320; Muhammad Nawaz Ch. v. Citibank, 2002 CLD 334; M.C.B. v. Rizwan Textile Mills Limited, 1998 MLD 529; Banque Indosuez v. Jet Travels Limited 1991 CLC 446; PICIC v. Bawani Industries Limited, PLD 1998 Kar. 400; N.B.P. v. Muhammad Ashraf Sanik, PLD 1987 Lah. 17; ICEPAC Limited v. Asian Leasing Corporation, 2003 CLD 232; Citibank v. Judge Banking Court, 2001 CLC 171; 2006 CLD 440; U.B.L v. Sheharyar Textile Mills Limited, 1996 CLC 106; Emirates Bank v. Fair Commission Agencies, 1991 CLC 450; 1990 MLD 538; H.B.L v. Green Garments Manufacturers PLD 1978 Kar. 1027; PLD 1966 SC 684; 1986 MLD 2930; Fida Muhammad v. Mir Muhammad Jan, PLD 1985 SC 341; 1994 SCMR 818; M. Yasin v. Dost Muhammad, PLD 2002 SC 71; PLD 1959 Dhaka 636; Ants Fatima v. Anwar Hussain, PLD 1979 Kar: 22; 1992 CLC 2137 and Don Basco High School v. The Assistant Director EOBI and others, PLD 1989 SC 128 rel.

Syed Ali Zafar along with Muhammad Suleman for Plaintiff.

Shahid Ikram Siddiqui for Defendants.

Date of hearing: 8th November, 2008.

2009 C L D 812

[Lahore]

Before Maulvi Anwarul Haq and Syed Asghar Haider, JJ

MUHAMMAD HUSSAIN---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Assistant Vice President/Chief Manager---Respondent

F.A.O. No.295 of 2007, heard on 25th February, 2009.

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

---Ss. 9, 12 & 22---Limitation Act (IX of 1908), S.5---Suit for recovery of loan---Ex parte decree, setting aside of---Application for---Suit filed by the plaintiff-Bank against defendant having been decreed ex parte, the defendant had filed application for setting aside such ex parte decree against him which application was accompanied by application under S.5 of the Limitation Act, 1908---Said application had been dismissed in absence of the defendant---Validity--Application could not have been decided on the grounds stated in the order without hearing the defendant or his counsel, whose absence had been explained in the affidavit of the counsel filed with the appeal---Impugned order was set aside with, the result that application would be deemed to be pending and would be decided by the Judge Banking Court after hearing the parties.

Khizar Abbas Khan for Appellant.

Pervaiz Akhtar Tahir for Respondent.

Date of hearing: 25th February, 2009.

2009 C L D 825

[Lahore]

Before Syed Hamid Ali Shah, J

ALLAH DITTA---Petitioner

Versus

D.C.O. and others---Respondents

Writ Petition No.7750 of 2007, decided on 23rd February, 2009.

National Environmental Quality Standards (Self-Monitoring and Reporting by Industry) Rules, 2001---

----Constitution of Pakistan (1973), Art.199---Constitutional jurisdiction---Effluents emitting from Chemical Plant of a factory falling in water drain causing danger to health of inhabitants and animals---Suo motu notice taken of such fact by High Court in exercise of constitutional jurisdiction--Installation of effluent treatment plant by factory after such notice---Validity---Improvements and alteration made by factory in its plant were found by Environmental Protection Authority (EPA) not to be a threat to environment---Issuance of BS EN ISO 9001-2000 certificate to the factory being valid till December, 2008 showed its plant to be following quality assurance standards---Effluents and waste management as per report of EPA and other agencies was upto level---High Court declined to take any further action against the factory but directed them to keep project constantly environmental friendly in future, otherwise fresh action would be taken against them; and that F.I.Rs. and other proceedings started against the factory for their illegal acts already committed, would continue and would be decided on merits.

Faysal Ali Qazi, A.A.-G.

Zubair Khalid, Standing Counsel.

Rassal Hassan Syed for Respondent.

Akhtar H. Awan, Local Commissioner.

Jawad Hassan, Amicus Curiae.

Umar Sharif for SNGPL.

2009 C L D 839

[Lahore]

Before Syed Asghar Haider, J

HIRA TEXTILE MILLS LTD. through Director- --Petitioner

Versus

EXECUTIVE DISTRICT OFFICER (REVENUE), KASUR and 4 others---Respondents

Writ Petition No.739 of 2008, heard on 19th January, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.39 & 40---Registration Act (XVI of 1908), S.17---Constitution of Pakistan (1973), Art.199---Constitutional petition---Changing name of company---Registration of fresh transfer deeds---Grievance of petitioner company was that after change of name, it did not require to get fresh transfer deeds registered from previous name to new name---Validity---Petitioner company had not ventured or undertaken any exercise violating exceptions contained in S.17(2) of Registration Act, 1908, because no transfer of immovable property had taken place---Identity of petitioner company was same, therefore, it fell within the exception to S.17 of Registration Act, 1908, as such it was not required to get any sale deed registered---Petitioner company having acted under Ss.39 and 40 of Companies Ordinance, 1984, the same did not contemplate transfer of any property---Petition was allowed in circumstances.

Mazhar Iqbal v. Falak Naz and 2 others PLD 2001 Lah. 495 and Mst. Nasima Fatima v. Bashir Ahmad and others 2008 SCMR 644 ref.

Salman Akram Raja for Petitioner.

Shujat Ali Khan, A.A.-G. for Respondents.

Date of hearing: 19th January, 2009.

2009 C L D 845

[Lahore]

Before Syed Hamid Ali Shah and Ali Akbar Qureshi, JJ

IIABIB BANK LTD.---Appellant

Versus

Messrs DOABA CORPORATION through Proprietor and another---Respondents

R.F. A. No.141 of 2003, heard on 3rd December, 2008.

(a) Banker and customer---

----Running finance facility---Charging of mark-up---Procedure---Mark-up in running finance facility is a revolving credit which renews until exhaustion of amount of credit and customer has the facility to draw it again when limit is reached---Credit is automatically reinstated after each drawing within the limit and limit is renewable credit until it's full utilization.

(b) Banker and customer---

----Revolving credit---Meaning---Revolving credit is system where someone can borrow money at any time up to agreed amount and continue to borrow while still paying off the original loan.

Dictionary of Banking and Finance by P.H.Collin rel.

(c) Banker and customer---

----Revolving credit account---Meaning---Loan allows customer to pay less than total amount due every month and whatever balance is carried forward into following month is subject to agreed upon finance charge---No typical charge for line of credit when it is not in use.

Dictionary of Banking by Jaffrey L. Seglin and Dictionary of Banking by F E Perry and G. Klein rel.

(d) Financial Institutions (Recovery of Finances) Ordinance (LXVI of 2001)---

----Ss.9 & 22---Recovery of bank loan---Running finance facility---Actual amount---Determination---Grievance of bank was that Banking Court erroneously determined principal amount and mark-up in the decree passed against defendants---Validity---When loan in shape of running finance was sanctioned up to a limit, customer could withdraw amounts according to his own choice and there was no charge amount---Frequent transactions had taken place in such accounts as to payments and withdrawals, therefore, mark-up on such transactions was leviable on daily product basis---Banking Court had fallen into error in working out liability of defendants on the basis of buy back price ignoring recognized mode of financing and levy of mark-up on such transaction---Judgment. and decree passed by Banking Court ignoring recognized mode of charging of mark-up on running finance and decreeing the suit on tine basis of buy back price without determining actual amount disbursed was not legally sustainable and was set aside---High Court remanded the case to Banking Court for decision afresh after determining actual amount disbursed by applying mark-up on daily product basis---Appeal was allowed accordingly.

Afzal Sandho for Appellant.

Tipu Sultan Makhdooni for Respondent.

Date of hearing: 3rd December, 2008.

2009 C L D 856

[Lahore]

Before Sh. Azmat Saeed, J

FAYSAL BANK LIMI'TED---Plaintiff

Versus

GENERTECH PAKISTAN LTD. and 6 others---Defendants

C.O.S. No.15 of 2006, decided on 4th February, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 10---Bankers' Books Evidence Act (XVIII of 1891)---Preamble---Recovery of bank loan---Granting of leave to appear in suit---Scope---Provisions of S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, are mandatory---Two separate duties are cast upon plaintiff in suit filed under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, firstly to slate in plaint the finance availed and amount paid back and balance amount outstanding---Plaint must be supported by statement of accounts which, in case of financial institution, must be duly certified under Bankers' Books Evidence Act, 1891---Such statement of accounts should not only show each individual transaction separately whereby any amount was availed (or otherwise debited) or paid back (or otherwise credited) but also such statement of accounts must support claim in plaint---Each and every entry credit or debit must be satisfactorily identified not only as to its date but also its mode and manner---Such identification must be sufficient to make statement of accounts comprehensive to any reasonable person reading the same---In order to satisfy minimum requirements of S.9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and to avoid rejection of plaint, statement of accounts appended. therewith must specifically identify amounts advanced or paid to customer or any sum' expended or incurred for or on his behalf as debit entry along with all payments received from customer or on his behalf as a separate credit entries with final balance---Deficiency, if any, in due identification of individual entries may give rise to triable issue subject to a bona fide dispute raised by defendants in respect thereof.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.10(4)(6)---Leave to defend---Non-compliance of provisions of S.10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---No penal consequences come into effect if sufficient cause for non-compliance is disclosed in petition for leave to appear, as has been stated in S.10(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001.

Bank of Khyber v. Spencer Distribution Ltd. and others 2002 CLD 1406; Allied bank of Pakistan v. Mohib Fabrics Industries Ltd. 2004 CLD 716 rel.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9(1)---Suit for recovery of bank loan--Authority to file-suit----In view of S.9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, plaint signed by manager of the branch of financial institution is valid in law.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 10---Recovery of bank loan---Leave to defend the suit--Failure to disclose any triable issue---Petition for leave to appear neither fulfilled mandatory requirements of S.10(4) of Financial Institutions (Recovery of Finances) Ordinance 2001, nor triable issue or plausible defence was made out by or on behalf of any of the defendants---Effect---High Court dismissed petition for leave to appear and bank was found entitled to amount of principal plus profit minus payments made by defendants---Suit was decreed accordingly.

Bankers Equity Ltd. v. Bentonite Pakistan Ltd. 2003 CLD 931; C.M. Textile Mills Ltd. v. Investment Corporation of Pakistan 2004 CLD 587; United Dairy Farms (Pvt.) Ltd. v. United Bank Ltd. 2005 CLD 569; Habib-ur-Rehman v. Judge Banking Court No.IV, Lahore 2006 CLD 217; F.F.A. No.24 of 2007 Peco International v. Allied Bank Ltd.; United Bank Ltd. v. Ch. Ghulam Hussain 1998 CLC 816; Muhammad Mujtaba and 5 others v. The Bank of Punjab 2004 CLD 712; Nusrat Textile Mills Ltd. and 8 others v. United Bank Ltd. 2005 CLD 1421; AIR 1928 PC 80; Mst. Irshad Bibi v. Muslim Commercial Bank Ltd. and 3 others 2003 CLD 46; United Leather Exports and 4 others v. National Bank of Pakistan 2005 CLD 1391; Barkhurdar v. Muhammad Razzaq and others PLD 1989 SC 749; 996 MLD 1819; 1996 CLC 202; 1992 CLC 2524; 1996 MLD 1040; 1971 SCMR 432; 2007 CLD 1205; AIR 1981 Mad. 180; 2002 CLD 509; PLD 1984 Kar. 21; PLD 1968 SC 83; 1998 ALD 91(2); AIR 1963 SC 746; AIR 1929 Lah. 203; AIR 1931 Oudh 426; 2005 CLC 731; 2006 SCMR 437; 2000 SCMR 472; 2004 CLD 1356; PLD 1999 Kar. 260; 2006 CLD 217; 1997 .SCMR 943; 2004 CLD 1338: Textile Management (Pvt.) Ltd. v. N.I.T. 2002 CLD 276; PLD 2000 Kar. 246; Messrs State Engineering Corporation Ltd., Islamabad through Manager (Personnel) S.M. Akram Farhat 2004 CLD 1344; Deputy Custodian of Enemy Property v. KESC 1986 CLC 2808; H.B. Ltd. v. Karim Cotton Mills 1998 CLC 1403; Habib Bank Ltd. v. Orient Rice Mills Ltd. 2004 CLD 1289: NBP v. EFFEF Industries Ltd. 2002 CLD 1431; Bolan Bank Ltd. v. Baig Textile Mills Ltd. and others 2002 CLD 557; Saudi Pak Industrial and Agricultural Investment Company Ltd. v. Mohib Textile Mills Ltd. and others 2002 CLD 1170; Zeeshan Energy Limited v. Faysal Bank Limited 2004 CLD 1741; Habib Bank Ltd. v. Sabcos (Pvt.) Ltd. 2006 CLD 244 and A. Sheikh and two others v. Messrs Trust Leasing Corporation Ltd. and others 2003 CLD 702 ref.

Syed Ali Zafar for Plaintiff.

Munawar-ul-Islam for Defendants Nos. 1, 2 and 4 to 7.

Shahid Ikram Siddiqui for Defendant No.3.

Date of hearing; 5th December, 2008.

2009 C L D 883

[Lahore]

Before Syed Hamid Ali Shah, J

Mian MUHAMMAD ILYAS MEHRAJ and 17 others---Appellants

Versus

APPELLATE BENCH No.III, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD and 6 others---Respondents

Commercial Appeal No.1 of 2007 decided on 24th February, 2009.

(a) Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002)---

----Ss. 30 & 21---Companies Ordinance (XLVII of 1984), Ss.158, 170, 171 & 178---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.24--Holding of Annual General Meeting by company---Mandatory---Corporate democracy is the essence of the corporate personality of juristic person--Company is made liable to be wound up, f it fails to hold two consecutive Annual General Meetings---Failure in holding of Annual General Meeting by the company on the ground that there was dispute of acquisition of shares---Imposition of penalty by Securities and Exchange Commission of Pakistan---Validity---Dispute of acquisition of shares in violation of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 should not have been made ground for not holding Annual General Meeting for two consecutive years---Acquisition of shares in violation of provisions of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 can be no justification for the management of a company to opt for a different course other than a legal course---Said Ordinance has the overriding impact but with certain limitations; the Ordinance overrides only those provisions of Companies Ordinance, 1984, which are in conflict with the former statute---Provisions of S.178(2)(3)(4)(5) of the Companies Ordinance, 1984 do not offend the provisions of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, therefore, S.178(2)(3)(4)(5), Companies Ordinance, 1984 will apply with all its force and rigour to the target companies, as well---Members are not required to be deprived of (.heir right to he represented in the company---Election of Directors being one of the agenda in Annual General Meeting, act of omission on the part of management to hold meetings within prescribed time, was violation of law and findings of Commission, was the correct view and unexceptionable---Principles.

Dispute of acquisition of shares, in violation of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, should have not been made ground for not holding Annual General Meeting for two consecutive years. Election of Directors was one of the agenda in Annual General Meeting. Act of omission on the part of management to hold meetings within the prescribed time, was violation of law. The finding of the Commission (imposition of fine) was the correct view and unexceptionable.

The company is required under section 158 of Companies Ordinance, 1984, to call at least one meeting (A.G.M.) of it's share-holders in each calendar year, with a gap not more than eighteen (18) months between two meetings. If the company fails to hold Annual General Meeting, two consequences will follow. Firstly any member can apply to the Commission (S.E.C.P.) and latter will order the calling of meeting. Secondly, the Commission has the power to take suo motu action for such default and pass similar order/direction. Admittedly, the failure to call A.G.M. is an offence, punishable with fine. The penalty is imposed upon the company as well as every officer, who is party to such default.?

Section 158(4) of the Companies Ordinance, 1984, in unqualified terms, provides for holding of Annual General Meeting. No departure is permissible from the compliance of the mandatory provisions of section 158. The company is artificial person and those who manage it's affairs arc under legal as well as fiduciary obligation, to run the affairs of the company as the law (Companies Ordinance, 1984) requires. Corporate democracy is the essence of the corporate personality of a juristic person. The legislature in it's wisdom was conscious of the importance of holding of Annual General Meeting and that is why a company is made liable to be wound up, if fails to hold two consecutive Annual General Meetings.

The accounts of the company are audited annually and are approved in Annual General Meeting. Carrying financial activities of the company, without proper audit of accounts and it's approval from general body, shows that the management of company deals with account in an unauthorized manner. The company can lawfully manage it's affairs, when it's members approve the accounts and select among themselves the Board of Directors to perform the functions on behalf of the company. The exclusion of the Directors from the management of the company or exclusion of the share-holders from electing the Directors and approving the audited accounts will negate the concept of corporate democracy. The Directors, who are elected for a specified period, continue to perform their functions beyond such period will amount to usurp the powers given to the Directors. The Directors are elected for certain period and they can perform their function during that period only. Their terms of office, validly exist for the period for which they were elected and not thereafter. The management is under an obligation to hold the meeting (A.G.M.) as and when it becomes due.

The company, in the present case, has taken refuge from this obligation, on the plea that provisions of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 have precedence over other laws including Companies Ordinance, 1984. The acquisition of shares in violation of provisions of the Ordinance, 2002, can be no justification for the management of a company, to opt for a different course, for management of affairs of the company, other than a legal course. Takeover Laws/Ordinance, 2002 has the overriding impact but with certain limitations. Ordinance, 2002 will override only those provisions of Companies Ordinance, 1984, which are in conflict with the former statute. Section 30 of the Ordinance, 2002 will prevail and those provisions of Ordinance, 1984, which are not in conflict with the Ordinance will hold the field. The Ordinance, 2002 nowhere provides for a different procedure for holding election of the Directors or calling the Annual General Meeting of the target company. The provisions of subsections (2) to (5) of section 178 of the Companies Ordinance, 1984 do not offend the provisions of Ordinance, 2002, therefore, these provisions will apply with all their force and vigour to the target companies, as well. The members are not required to be deprived of their right to be represented in the company.

?

The acquisition of voting shares in violation of the provisions of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, does not render the acquisition of share void ab initio. It is curable defect and the acquisition can be validated by imposition of fine or directing the acquirers to sell the shares acquired by offending provisions of Ordinance, 2002, or to debar the acquirers from the company for the next three years. The provisions of Ordinance, 2002 are enacted in the interest of security market and not to safeguard the interest of existing share-holders in the listed company. The member of the company is eligible to vote and participate in the Annual General Meeting of the company as long as he is on the register of the share-holder. A member is only debarred from participating in the meeting (A.G.M.) when his name is removed from the register either in the normal course or through rectification of the register through an order of the Court. The share-holder, unless he ceases to be a member of the company, is vested with the right to participate in the meeting (A.G.M.), seek from the management or from the Commission, direction for calling such meeting.

Respondents, in the present case, were elected as Directors of the company in the Annual General Meeting. The election of Directors could be declared invalid through a petition under section 179 of the Companies Ordinance, 1984. The appellants had not challenged the proceedings of the Annual General Meeting in which respondents were elected as Directors within the prescribed period of limitation. Depriving these Directors from participating in the management of the company was unfair, inequitable and illegal. The Commission had rightly directed the appellants, to hold Annual General Meeting. There was no illegality in the imposition of fine. The order of the Commission was not open to exception.?

Rajapalayan Industrial and Commercial Syndicate Ltd. and another v. K.A. Vairaprakasam and another AIR 1989 Mad. 139; Col. (Retd.) Syed Mukhtar Hussain Shah v. Wasim Sajjad and 30 others 1986 SCMR 48; Muhammad Asim Kurd alias Gailoo v. Nawabzada Mir Lashkari Khan Raisani and others 1999 SCMR 689; Syed Masroor Ahsan v. Muhammad Tariq Chaudhry and others 1991 SCMR 668; Sheikh Abdul Hameed v. Punjab Local Councils Election Authority and 3 others 1984 CLC 993; Abdullah Ismail and another v. Sindh Industrial Trading Estate 1997 CLC 783; Nizam Hashwani v. Hashwani Hotels Limited and 14 others 1999 CLC 1989; Shamsuddtn Ahmad v. Charu Chandra Biswas and others AIR 1934 Cal. 621 and Adamjee Insurance Company Limited and others v. Muslim Commercial Bank Limited and others 2005 SCMR 318 ref.

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

----S. 158---holding of Annual General Meeting by company is mandatory-Company is made liable to be wound up, if fails to hold two consecutive Annual General Meetings.?

(c) Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002)---

----S. 30---Companies Ordinance (XLVII of 1984), S.178(2), (3), (4), (5)---Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 has the overriding impact but with certain limitations; said Ordinance will override only those provisions of Companies Ordinance, 1984, which are in conflict with the former statute---Section 30 of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, nowhere provides for a different procedure for holding election of Directors or calling the Annual General Meeting of the target company---Provisions of S.178(2), (3), (4) & (5) of the Companies Ordinance, 1984 do not offend the provisions of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, therefore, S.178(2), (3), (4) & (5) of Companies Ordinance, 1984 will apply with all its force and rigour to the target companies as well---Members are not required to be deprived of their right to be represented in the company.?

(d) Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002)---

----S. 30---Acquisition of voting shares in violation of the provisions of the Ordinance, does not render the acquisition of share void ab initio; such is a curable defect and the acquisition can be validated by imposition of fine or directing the acquirers to sell the share acquired by offending provisions of the Ordinance, or to debar the acquirers from the company for the next three years---Provisions of the Ordinance are enacted in the interest of security market and not to safeguard the interest of existing share-holders in the listed company---Member of the company is eligible to vote and participate in the Annual General Meeting of the company' as long as he is on the register of the share?holders-Member is only debarred from participating in the meeting when his name is removed from the register either in the normal course or through rectification of the register through an order of the Court-Share-holder unless he ceases to be a member of the company is vested with the right to participate in the Annual General Meeting, seek from the management or from the Security and Exchange Commission, direction for calling such meeting---In the present case, respondents were elected as Directors of the company in the Annual General Meeting-Such election could be declared invalid through a petition under S.179 of the Companies Ordinance, 1984, the appellants had not challenged the proceedings of the Annual General Meeting in which such Directors were elected-Depriving said Directors from participating in the management of the company was unfair, inequitable and illegal-Security and Exchange Commission of Pakistan had rightly directed the appellants to hold Annual General Meeting.?

Syed Mansoor Ali Shah for Appellants.

Imtiaz Rashid Siddique and Jawad Hassan for Respondents Nos.5 to 7.

Taffazal H. Rizvi along with Saqlain Arshad, Assistant Director (Legal) SECP for Respondents Nos.2 to 4.

Dates of hearing: 17th, 18th and 20th February, 2009.

2009 C L D 910

[Lahore]

Before Kh. Farooq Saeed and Nasim Sikandar, JJ

AZHAR IQBAL---Appellant

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another---Respondents

R.F. A. No.191 of 2008, decided on 8th April, 2009.

(a) Insurance Ordinance (XXXIX of 2000)---

----S. 118---Limitation Act (IX of 1908), Art.86(a)---Settlement of claim---Delay---Limitation---Appellant (husband of deceased insured) had always been vigilant to make his claim and it was only the Insurance Corporation to drag his claim in order to avoid payment---Holding the claim of appellant, in circumstances, to be beyond limitation or that after expiry of three years no cause of action remained with the appellant to approach the Insurance Tribunal, was error in law and fact.

(b) Insurance Ordinance (XXXIX of 2000)---

----S. 118---Jeevan Sathi, Plan Insurance Policy---Repudiation of insurance contract by Insurance Corporation on the basis of the facts, which were absolutely not established on record---Admittedly, after the lapse of policy for a short while which was revived on 14-1-1998, the insured lady was again medically examined---Insurance Corporation as well as Insurance Tribunal found against the claim of appellant (husband of insured) on the ground that the appellant as well as his wife had failed to disclose that she was pregnant and that finally on 26-2-1999 her death was caused in the labour room due to excessive bleeding---Said fact alone was found sufficient to hold both policy-holders (husband and wife) to be guilty of concealment of facts---Insurance Corporation and the Insurance Tribunal overlooked the basic fact that the lady dying on the table in the labour room on 26-2-1999 could not be pregnant on 14-1-1998 on the day the policy was revived---Time gap between the revival of policy when admittedly the lady was examined and date of death 26-2-1999 was more than 12 months---No rule of contract, insurance or otherwise expects a lady in the middle of January, 1998 to declare that she might be pregnant within the next couple of months---Insurance Corporation had failed to establish its case to support the repudiation of insurance contract by any cogent and relevant evidence--All such inference in that regard would, therefore, go against the Insurance Corporation who was required to support the repudiation of the insurance agreement inasmuch the appellant by submitting all the relevant documents starting from the copy of the Insurance Policy till the death certificate of the insured had established his entitlement to recover the policy proceeds---Order and judgment of Insurance Tribunal against the insured were set aside by High Court.

Liaqat Ali Butt for Appellant.

Mian Naseer Ahmed for Respondents.

2009 C L D 922

[Lahore]

Before Mian Saqib Nisar, J

MUSLIM COMMERCIAL BANK LTD. Through VP, SAMG---Applicant

Versus

Messrs HIRRA FAROOQ LTD. and 7 others---Respondents

Ex. A. No.18-B of 2002 in C.O.S. No.69-B of 2000 and C.M. No.190-B of 2009, decided on 2nd April, 2009.

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

----S. 15---Contract Act (IX of 1872), S.59---State Bank of Pakistan BPD Circular No.29, dated 15-10-2002---Execution of decree--Initially, a consent decree for specified amount was passed by High Court in favour of the Bank; judgment-debtors failed to discharge their full liability in terms of such consent decree; process of execution was initiated by the decree-holder for the satisfaction of the remaining decree, but during the pendency thereof, the matter was referred to and settled by the Resolution Committee of the State Bank of Pakistan; in view of the decision of the Committee, a compromise was again entered into between the parties, which when filed in the court, was approved and the execution application was disposed of conferring right upon the decree-holder to have its revival in case of failure of the judgment-debtors to fulfil their obligations under the agreement; as the agreement was not fulfilled therefore, execution application had been revived---Contention of the judgment-debtor was that decree to the extent of interest was void and nullity in the eyes of law and was inexecutable---Validity---Held, judgment-debtors, on the basis of the decision of the State Bank's Resolution Committee, out of their free consent, had entered into an agreement and to make the payments strictly in terms thereof and in case of default to discharge the decree---Judgment-debtors had failed to adhere to the said agreement and in such a situation consent decree revived and it was thus, their legal obligation to make the payments in accordance therewith.---Bank had placed on record the statement of accounts, which showed that the mark-up had been calculated as per day default; judgment-debtors had not established, if the calculations were erroneous, unauthorized or illegal or were against the consent decree, which now should be executed because of judgment-debtors' own default in performance of their duty under the agreement---Only for the reason that certain amounts of mark-up even holding/considering it to be an interest was a part of the consent decree, which was in pursuance of the agreement between the parties, and had not been challenged by them before any forum, would not render the decree as nullity and inexecutable and without prejudice to any one's case, such decree, at the best, may be termed as an illegal decree but not void and that an Executing Court could not go behind a decree---Section 15 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, under which the decree was passed, the court had the jurisdiction to award interest/mark­up---Judgment-debtors were liable to satisfy the decree in toto and whatever amount was paid by them had been accordingly adjusted considering each of the instalments due in the decree as the principal amount, therefore, S.59, Contract Act, 1872 had no relevance to the proposition involved in the present case.

Habib Bank v. Messrs Qayyum Spinning Ltd. 2001 MLD 1351; Agriculture Development Bank of Pakistan v. Mubarak Dairies Limited and others 2008 CLD 738; Mubarak Dairies Limited and others v. Agricultural Development Bank of Pakistan through Manager 2001 CLC 1096; Happy Family Associates v. Messrs Pakistan International Trading Co. PLD 2005 Lah. 621; Soneri Bank Ltd. through Duly Authorized Attorneys v. Idrees Ahmad Siddiqi and another 2005 CLD 1003 and Precision Engineering Ltd. and others v. the Grays Leasing Ltd. PLD 2000 Lah. 290 ref.

Habib Bank v. Messrs Qayyum Spinning Ltd. 2002 MLD 1351 distinguished.

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

----S. 15---Civil Procedure Code (V of 1908), O.XXI, R.83---Execution of decree-Postponement of sale to enable judgment-debtors to raise amount of decree-Where such request of the judgment-debtors lacked bona fides as various attempts had been made by the court to sell the property but all those failed and never ever before judgment-debtors had come forward to make any such request, if the judgment-debtors, were allowed the alienation by mortgage or lease or private sale, same shall further complicate the matter---Such request of the judgment-debtors, in circumstances, seemed to be an abortive attempt to seek further postponement of the execution of decree and nothing else---Judgment-debtors, therefore, were not entitled to any relief under O.XXI, R.83, C.P.C.

Khawaja Saeed-uz-Zafar for Judgment-debtors/ Applicant.

Mirza Muzaffar Ahmed for Decree-holder/Bank.

Maqsood Ahmed, Court-Auctioneer.

2009 C L D 960

[Lahore]

Before Sayed Zahid Hussain and Raja Muhammad Shafqat Khan Abbasi, JJ

Messrs EAST-WEST INSURANCE COMPANY LTD. through Chairman and another---Appellants

Versus

Messrs MUHAMMAD SHAFI & COMPANY through Managing Partner and 2 others---Respondents

R.F.A. No.403 of 2007, heard on 1st April, 2009.

(a) Jurisdiction---

----Conferring of jurisdiction---Principles--Consent of parties---Scope---Where Tribunal or Court does not have jurisdiction under law, same cannot be conferred on Court or Tribunal by consent or even by Court---Courts are bound to decide lis before them in accordance with law---Justice is duty of Court which can neither be abdicated in favour of whims nor ignorance of parties or their counsel---If Court otherwise lacks jurisdiction to adjudicate matter, then mere consent of parties cannot confer jurisdiction--- - Question of jurisdiction is always a fundamental question, which must be decided at initial stage of proceedings---Such question is to be considered by Court even though not raised by parties---Principle of estoppel cannot be invoked to defeat provisions of statute or enactment affecting jurisdiction of Court---Even question of waiver does not arise when Court lacks inherent jurisdiction---Any order without jurisdiction is nullity in the eyes of law and the same should be ignored.?

Executive District Officer Schools v. Qamar Dost Khan 2006 SCMR 1630; Muhammad and others v. Muhammad Shaft and another PLD 1996 SC 292; Haji Abdullah Khan and another v. Nisar Ahmad Khan PLD 1965 SC 690; Salah-ud-Din Tirimzi v. Election Commission of Pakistan PLD 2008 SC 735; All Pakistan Newspaper Society and another v. Federation of Pakistan PLD 2004 SC 600; Muhammad Suleman v. Javaid Iqbal PLD 1982 SC (AJ&K) 64; Peer Sabir Shah v. Shahid Mehmood Khan PLD 1995 SC 66; Raleigh Investment Company Ltd. v. Governor General in Council AIR 1947 PC 19; Town Committee Ghakhar Mandi v. Authority under the Payment of Wages Act PLD 2002 SC 452; Muhammad Hussain v. Muhammad Shafi 2004 SCMR 1947; All Muhammad v. Hassan Bakhsh PLD 1976 SC 37 and Khuda Bakhsh v. Khushi Muhammad PLD 1976 SC 208 rel.

(b) Administration of justice---

----Duty of Court---Improper advice of counsel---Effect---Court has to apply correct law---Judge is supposed to wear all laws of country on sleeves of his robes---Failure of counsel to properly advise Judge is not a complete excuse in the matter. ?

Board of Intermediate and Secondary Education Lahore v. Salma Afroze PLD 1992 SC 263; Kutab-ud-Din v. Fazal Ali 1994 SCMR 107; Ghulam Muhammad Khan v. Settlement Re-habilitation Commissioner Hyderabad 1972 SCMR 359; Muhammad Sarwar v. State PLD 1969 SC 278 and Rana Muhammad Hayat Khan v. Rana Imtiaz Ahmad PLD 2008 SC 85 rel.

(c) Administration of justice---

----Change of forum by a law during pendency of the lis---Effect.

When the law is altered during the pendency of an action, the rights of the parties are decided according to the law as it existed when action was begun unless the new statute shows a clear intention to vary such rights, which means if a statute deals merely with procedure in an action and does not affect the rights of the parties, it will apply prima facie to all actions pending as well as future. When the legislature alters the right of the party by taking away or conferring any right of action, its enactments, unless in express terms, they apply to pending actions, do not affect them. ?

(d) Interpretation of statutes---

----Procedural statute is to be given retroactive effect unless law contains a contrary indication---Matters relating to the remedy, mode of trial, manner of taking evidence and forms of action are all matters relating to procedure.?

Colonial Sugar Refining Company Limited v. Irving 1905 AC 369; Joseph Suche and Co. Limited (1875) 1 Ch. D.48; Ghazi v. State PLD 1962 Lah. 662; Mir Hassan v. State PLD 1969 Lah. 786: State v. Muhammad Jamil PLD 1965 SC 681; S.M. Yusuf and Bros v. Muhammad Mchdi Pooya PLD 1965 SC 15; Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187 and Aftabuddin Qureshi and another v. Mr. Rachel Joseph and another I'LD 2001 SC 482 rel.

(e) Insurance Ordinance (XXXIX of 2000)---??????????

----Preamble---Regularization and promotion of Insurance industry---Procedure---Complete hierarchy has been provided under Insurance Ordinance, 2000, for regularization and promotion of Insurance industry and for protection of interest of policy-holders and matters connected therewith, which has enlarged its scope.?

(f) Insurance Ordinance (XXXIX of 2000)---

----S.122(3)---Resolving of disputes---Bar of jurisdiction--Jurisdiction of all Courts including Civil Court other than Tribunal in the matter of claims under Insurance policy is barred under 5.122(3) of Insurance Ordinance, 2000.

Haji Muhammad Hanif v. State Life Insurance Corporation of Pakistan 2007 CLD 490 rel.

(g) Insurance Ordinance (XXXIX of 2000)---

----Ss.122, 123, 126 & 127---Dispute of insurance policy---Civil Court, jurisdiction of-Suit for recovery of insurance claim was decreed by civil Court in favour of plaintiff and against insurance company---Plea raised by insurance company was that during pendency of civil suit, Insurance Ordinance, 2000, was promulgated, thus civil Court did not have any jurisdiction to decide the matter---Validity---Court had neither applied its mind to ,/acts of the case nor it had taken notice of altered/changed situation---It should have taken notice regarding enactment of Insurance Ordinance, 2000 and constitution of Tribunal under it---Court below ignored the law and failed to resolve issue of jurisdiction---After constitution of Insurance Tribunal, Civil Court had no jurisdiction to deal or proceed with suit in question and Civil Court had wrongly assumed jurisdiction on an erroneous assumption as to direction of High Court-After constitution of Insurance Tribunal, proceedings before Civil Judge were coram? non judice, and judgment and decree so passed had no legal value in the eyes of law---High Court, in exercise of appellate jurisdiction, set aside judgment and decree passed by Trial Court and matter was remitted to Insurance Tribunal constituted under S.122 of Insurance Ordinance, 2000, for decision of lis in accordance with law---Appeal was allowed accordingly.

?

Mirza Hafeez-ur-Rehman for Appellants.

Ch. Inayat Ullah for Respondent No.1.

Muhammad Qamar-uz-Zaman for Respondent No.3.

Date of hearing: 1st April, 2009.

2009 C L D 1005

[Lahore]

Before Syed Hamid Ali Shah, J

Messrs NATIONAL TOOLS INDUSTRIES (REGD.) through Managing Partner---Appellant

Versus

Messrs AZHAR ENTERPRISES through Proprietor---Respondent

R.F.A. No.108 of 2000, decided on 30th March, 2009.

(a) Trade Marks Act (V of 1940)---

----S.2---Registration of trade mark---Terms "likely to deceive" and "cause confusion"---Applicability---Infringement of trade mark---Term "likely to deceive" is wide enough to negate that absolute proof is needed to make out a case of infringement of trademark---Plaintiff can establish case of infringement of trade mark, by providing that trade mark has caused confusion or it resembles so nearly with registered trademark that there is likelihood of its deception, without calling witness in witness box, who was so deceived.

Messrs Burney's Industrial and Commercial Co. Ltd. v. Messrs Rehman Match Works PLD 1983 Kar. 357 and Lever v. Goodwin (1887) 36 Ch. D. 1 rel.

(b) Trade Marks Act (V of 1940)---

----Ss.21, 43 & 74-Infringement of trade mark---Recovery of damages---Similarity in design and colour scheme---Plaintiff alleged that trade mark being used by defendant was similar to his mark and the same was causing deception in the minds of plaintiff's buyers---Validity---Defendant. dishonestly followed same pattern and used same colour scheme, opting to make his label identical and similar to that of plaintiff; though both labels were worded different---Label of plaintiff comprised of word "improved" while defendant's label carried word "two camels"-Addresses mentioned in both labels were different but lower portions of both labels were similarly worded---Both labels were comprised of three parts and their colour scheming and size created element of deception---Deception became more conspicuous when label was affixed by defendant at handle of shovel, which was round in shape---If infringing label was fixed at top of handle one of the two camels would become invisible and had given impression of one camel instead of two camels--Unwary purchaser in such case was whether a farmer or a labourer or an illiterate person, as the tool was meant for that class of users, could not distinguish the label by English words used thereon---Such aspect could not be ignored that illiterate purchasers normally purchase product by device or getup Claim of plaintiff for damages was permissible only when damages claimed were asserted in suit under each head separately and proved through cogent evidence --Plaintiff failed to prove damages and his claim was rightly declined by trial Court---High Court in exercise of appellate jurisdiction partially decreed the suit in favour of plaintiff and restrained defendant from infringing plaintiffs registered trade mark but rejected the claim of damages--Appeal was allowed accordingly.

Bashir Ahmad v. Registered Firm Hafiz Habibur Rehman and another 1980 CLC 1268; Austin Nichols and Co. v. The Assistant Registrar of "Trade Marks, Karachi PLD 1993 Kar. 129; Messrs K.S. Sulemanji Esmailji and Sons v. Messrs M. Sulemanji and Company Ltd. 1986 CLC 775; Kaviraj Pandit Durga Dutt. Sharma v. Navaralna Pharmaceutical Laboratories AIR 1965 SC 980; Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8; National Match Works, Sivakasi, v. S.T. Karuppanna Nadar (died) and others AIR 1979 Madras 1957; Formica Corporation v. Pakistan Formica Ltd." 1989 SCMR 361; Insaf Soap Factory v. Lever Brothers Port Sunlight Ltd." PLD 1959 (W.P.) Lah. 381; Bandenawaz Ltd. v. Registrar of Trade Marks, Karachi and another PLD 1967 Kar. 492 and The Welcome Foundation Limited v. Messrs Karachi Chemical Industries (Private) Limited 2000 YLR 1376 ref.

Rizwan Niaz for Appellant.

Muhammad Siddique Qureshi for Respondent.

Date of hearing: 13th October, 2008.

2009 C L D 1038

[Lahore]

Before Mian Saqib Nisar and Ali Akbar Qureshi, JJ

Sheikh MUHAMMAD KHALID---Appellant

Versus

Messrs MALIK FOOD INDUSTRIES through Sole Proprietor and 2 others ---Respondents

Appeal No. 107 of 2004, decided on 8th May, 2009.

(a) Registration Act (XVI of 1908)---

----Ss. 47 & 49---Time from which registered document operates---Effect: of S.47 conjectively read with S. 49 of the Registration Act, 1908, means that a document which is compulsorily registerable, does not affect any it immovable properly comprised therein till it has been registered; it takes effect not from the dale of registration but retrospectively from the date of execution.

AIR 1924 Cal. 600; AIR 1926 All. 549; AIR 1938 All. 431 and AIR 1936 Bom. 94 ref.

(b) Registration Act (XVI of 1908)---

----S. 47---Time from which registered document operates---Once the fact of the execution of the document on a particular date is established and/or is not disputed/controverted or disproved by a third party, provision of S.47, Registration Act, 1908 shall squarely attract and apply to the rights of such party as well.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 23(2)---Restriction on transfer of assets and properties-Scope---Financial Institutions (Recovery of Finances) Ordinance. 2001 had no retrospective effect---Where the sale-deed in the matter was executed on 28-3-2001, the decree in the suit had been passed on 26-6-2001, Financial Institutions (Recovery of Finance) Ordinance, 2001, which was enforced on 30-8-2001 shall not cover or affect any transaction, which had been accomplished before its enforcement-Principles.

Section 23(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was enforced on 3011r of August, 2001, whereas the sale-deed in the matter was executed on 28-3-2001, the decree in the suit had been passed on 26-6-2001. The Ordinance has no retrospective effect at all and shall not cover or affect any transaction, which has been accomplished before its enforcement. Besides, the provisions of section 23 of the Ordinance cater for two situations; subsection (1) relates to the properties/assets which are under the charge/ lien, -etc.; the alienation, etc. of any such property by the customer after the publication of notice under section 9(5) of the Ordinance is void; while under subsection (2), the judgment-debtor is prohibited to transfer, etc. any of his other properties, which are not under the charge without the prior permission of the Banking Judge after the pronouncement of the decree by the Banking Court including an interim decree and if the transaction is so made, it shall be void. The expression "after pronouncement of the judgment and decree by the Banking Court including an interim decree under section 11" undoubtedly means the judgment and decree passed under the Ordinance, 2001 and not the judgment and decree, which has been passed under the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, or any other repealed law on the subject.

Abdul Razzaq Mirza for Appellant.

Nadeem Saeed for Respondents.

Date of hearing: 20th March, 2009.

2009 C L D 1048

[Lahore]

Before Hafiz Tariq Nasim and Syed Hamid Ali Shah, JJ

ATTIQUE REHMAN and others---Petitioners

Versus

ENVIRONMENTAL TRII3UNALS and others-Respondents

E.A. No.1 of 2006, decided on 23rd February, 2009.

Pakistan Environmental Protection Act (XXXIV OF 1997)--

----S. 16---Chilli grinding industrial unit installed in residential urea---Complaint against such unit spreading spices dust and causing severe air pollution---Inspector Environment and Environment Consultant Engineer on inspection found such ruin to be involved in business having adverse effects on health of residents of locality---Order of Tribunal directing shifting of grinding unit---Validity---Appellant had been served with notice before inspection of his unit---Crushing and grinding of chilli had been found creating sever chilli dust as there were holes in roof, walls and doors through which chilli dust was escaping---Inspection of Unit had been curried on direction of Tribunal---Appellant had been involved in a business offending provisions of Pakistan Environmental Protection Act, 1997---Permitting to function such unit in residential area for a considerable long time by offending provisions of Pakistan Environmental Protection Act, 1997 would not serve its purpose and justice--Such illegal activity had to come to an end and should not be allowed to be carried on under shelter of frivolous and technical objections---high Court dismissed appeal in circumstances.

State Life Insurance Corporation of Pakistan v. Director General Military Lands and Cantonments, Rawalpindi and 4 others 2005 SCMR 177 and AIR 1995 Orrisa 1984 ref.

Akhtar H. Awan for Appellants.

Muhammad Zia ud Din Ansari for Respondent No. 3.

Mian Ehsan ul Haq Sajid Addl. A.-G.

2009 C L D 1133

[Lahore]

Before Syed Hamid Ali Shah and Sh. Azmat Saeed, JJ

Mrs. RIFFAT SARAJ through Special Attorney---Appellant

Versus

EYE TELEVISION NETWORK (PVT.) LTD. through Director/Chairperson and another---Respondents

F.A.O. No.69 of 2009, decided on 18th May, 2009.

(a) Copyright Ordinance (XXXIV of 1962)---

----Ss. 62 & 13---Copyright---Moral rights, doctrine of---Applicability--Author of the intellectual work when assigns the rights in the intellectual property, does not assign the 'moral rights', it is the moral rights of the author to have her/his name telecast with regard to the work which is his/her creation.

Whale on Copyright by Jeremy Philips Robyn Durie and Ian Karet, Fifth Edition (62); Copinger and Skone James on Copyright, Fifteenth Edition by Kevin Garnett, M.A. (657) and The Modern Law of Copyright and Designs, by Laddie Prescott and Vitoria, Third Edition (606) ref.

(b) Copyright Ordinance (XXXIV of 1962)---

----Ss.62 & 13---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Copyright---Moral rights, doctrine of---Interim injunction, grant of---In the present case, agreement between the author of a novel and assignee of copyright thereof, had not imposed any restriction on the author to forego her right to claim authorship of her work---Assignee of copyright while telecasting the drama based on the said novel had failed to mention the name of the author of the novel---Author, in circumstances, had made out a prima facie, case on the premise of moral rights as balance of convenience lay in favour of the author and she would suffer irreparable loss if all the episodes were telecast without display of her name as author of the drama---High Court, accepting the appeal, set aside the impugned order and passed injunctive order in favour of the author to the effect that the assignee will telecast the name of the author as author of the script with regard to the episodes which will be telecast---Principles.

Smt. Mannu Bhandari v. Kala Vikas Pictures (Pvt.) Ltd. and another AIR 1987 Delhi 13; Shakeel Adilzadah v. Pakistan Television Corporation Ltd. and 2 others 1989 CLC 2447; V.T. Thomas and others v. Malayala Manorama Co. Ltd. AIR 1989 Ker. 49 and Munawwar Jamil v. Mst. Noshi (Nishat) Gillani and 3 others PLD 2000 Lah. 186 ref.

(c) Copyright Ordinance (XXXIV of 1962)---

----S.62--Author's special rights---Moral rights, doctrine of---Concept surveyed.

Whale on Copyright by Jeremy Philips Robyn Dune and Ian Karet, Fifth Edition (62); Copinger and Skone James on Copyright, Fifteenth Edition by Kevin Garnett, M.A. (657) and The Modern Law of Copyright and Designs, by Laddie Prescott and Vitoria, Third Edition (606) quoted.

Zulfiqar Ali Khan for Appellant.

Jawad Hassan for Respondents.

Date of hearing: 3rd April, 2009.

2009 C L D 1143

[Lahore]

Before Mian Saqib Nisar, J

HABIB BANK LTD.---Plaintiff

Versus

TAJ TEXTILE MILLS LTD. through Chief Executive and 5 others---Defendants

C.O.S. No.21 of 2006, decided on 20th January, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 9 & 10---Rescheduling and restructuring of previous finance---In the cases pertaining to restructuring, the amount is not disbursed, rather is brought forward envisaging as liability of the customer, and therefore, to contend that as no physical disbursement of the amount was made, resultantly, the claim of the Bank was false or unfounded was misconceived and without merit---No fraud or misrepresentation could be attributed to the Bank, if defendants, while rescheduling the previous loan, were asked to execute all the relevant documents in that regard including the guarantees and the finance agreement---Plaint fulfilled the requirements of S.9, Financial Institutions (Recovery of Finances) Ordinance, 2001---Relevant backdrop of the finance arrangement between plaintiff/Bank and defendant/borrower had been appropriately given in the plaint duly supported by requisite documents---Bald and baseless allegations of fraud could not be termed as the substantial question of facts, in the light of admittedly executed documents on account of which the leave could be solicited or granted-Suit was decreed in favour of Bank in circumstances.

Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931; Messrs C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587 and Habib-ur-Rehman and another v. Judge Banking Court No.4, Lahore and another 2006 CLD 217 ref.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 9 &10---Restructuring/rescheduling of previous finance---Bank was not obliged to have brought on record the statements of accounts prior to the agreement through which the restructuring had been made as this was an admitted amount duly acknowledged by the borrower---No disbursement of the amount involved in the matter was required, case being that of restructuring and not in the nature of a fresh finance in which the disbursement may become relevant---No vice, illegality or error had been pointed out in the statements of accounts appended with the plaint in support thereof either in view of provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 or Bankers Books Evidence Act, 1891---Suit was decreed in favour of plaintiff/Bank.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 10---Leave to defend suit---When the borrower had defaulted and requested for restructuring of loan which was granted by the Bank, plea for leave to defend suit on its own force was not relevant and thus, was refused.

(d) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 10 & 15---Leave to defend suit, grant of---Mortgage---Mortgage deed placed on the record by the Bank envisaged the mortgage for "E" company, whereas ,in the present case the borrower was "T" company---Only for the reason that the Managing Director or the managing structure of said two companies was the same, the mortgage should be presumed was not prima facie, tenable and the question/proposition needed the recording of evidence---Resultantly, to the extent of "E" company leave to defend the suit was granted.

Munawar-us-Salam for Defendants.

Shams Mehmood Mirza for Plaintiff.

2009 C L D 1149

[Lahore]

Before Rana Zahid Mahmood, J

MUHAMMAD IQBAL---Petitioner

Versus

STATION HOUSE OFFICER and 2 others---Respondents

Writ Petition No.1239-Q of 2009, decided on 30th March, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.7---Penal Code (XLV of 1860), S.489-F---Aims and objects of both the provisions---Banks debarred from taking advantage of S.489-F, P.P.C.--Aims and objects of Financial Institutions (Recovery of Finances) Ordinance, 2001 and S.489-F, P.P.C. are entirely different and both the enactments cannot be amalgamated or confused with each other by their application at the whims of either party---Financial Institutions (Recovery of Finances) Ordinance, 2001, is a complete code providing procedure for the Banking Courts, specially constituted under the said Ordinance for recovery of loans from the defaulters or taking stock of the situation at the instance of the aggrieved party which may be the loanee against the Bank and for the commission of any offence as enumerated under S.7 of the said Ordinance---Banks or their administrations, therefore, are debarred from taking the advantage of S.489-F, P.P.C., through initiation of proceedings against the defaulters merely on the dishonouring of any cheque issued by the loanee who had availed any finance facility, as scheme of both the enactments are poles apart from each other.

Major (Rtd.) Javed Inayat Khan Kiani v. The State PLD 2006 Lah. 752 ref.

(b) Penal Code XLV of 1860)---

----S.489-F---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.7---Constitution of Pakistan (1973), Art.199---Constitutional petition---Quashing of F.I.R.---Accused petitioner had taken a loan of Rupees fifty lac from the complainant Bank, but due to recession in business he could not deposit four monthly instalments and on demand of Bank furnished a guarantee cheque of Rupees fifty lac, which was not meant for immediate encashment---However, Bank on the said cheque having been dishonoured got the present case registered against the petitioner under S.489-F, P.P.C. vide the impugned F.I.R.---Validity---Aims and objects of Financial Institutions (Recovery of Finances) Ordinance, 2001 and S.489-F, P.P.C., being entirely different, could not be amalgamated or confused with each other at the whims of either of the parties--- Financial Institutions (Recovery of Finances) Ordinance, 2001 was a complete code providing procedure for the Banking Courts, specially constituted under the said Ordinance, for recovery of loans from the defaulters and dealing with the commission of any offence as enumerated under S.7 of the said Ordinance---Banks or their administrations, therefore, were debarred from taking the advantage of S.489-F, P.P.C. through initiation of proceedings against the defaulters on dishonouring of any cheque issued by the loanee, who had availed any finance facility---Registration of the present case by the complainant Bank through its Manager was a mala fide action against the petitioner, as it could avail remedy through the Banking Court under the Financial Institutions (Recovery of Finances) Ordinance, 2001--Registration of case under S.489-F, P.P.C. against the accused petitioner being mala fide and abuse of process of law, could not be allowed to sustain on record---Impugned F.I.R. was consequently quashed and constitutional petition was accepted accordingly.

Major (Rtd.) Javed Inayat Khan Kiani v. The State PLD 2006 Lah. 752 rel.

Shahid Mir for Petitioner.

Khan Salim Mitha, Assistant Advocate-General along with Muhammad Yousaf, A.S.-I.

Malik Asghar Ali Awan for Respondent No.3.

2009 C L D 1172

[Lahore]

Before Umar Ata Bandial, J

Messrs NISHAT MILLS LTD.---Petitioner

Versus

NISHAT APPAREL LTD.---Respondent

Case No.48-L of 2008, decided on 31st March, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss. 284, 285, 286, 287, 288 & 235(2)---Companies (Court) Rules, 1997, R.61---Companies (Issue of Capital) Rules, 1996---Application for merger of two companies---Parawise comments filed by the Securities and Exchange Commission of Pakistan in relation to the terms of Scheme of the merger contained. three observations i.e. that the swap ratio between the companies under merger had been calculated on the basis of break up value of shares taken on historical basis, it was recommended that the swap ratio should be based upon revaluation of assets for arriving at a realistic figure; that although paid up capital of the two merging entities was being added in consequence of the amalgamation, however, the same treatment could not be given to their authorised capital, the authorised capital of surviving entity should be increased to cover the aggregated paid up capital and that merging company was a loss making entity and therefore, the pubic share-holders of the company wherein it was being merged would suffer a disadvantage on account of the merger which was not in their interest---High Court while appreciating the intent of the points by Commission, conducted hearing after inviting the reply of the companies and these points had been answered through rejoinder in the main petition---Held, observations made by the Securities and Exchange Commission of Pakistan, although pertinent, were not sufficient to counter the case for merger approved unanimously by the members of both the merging companies in their general meetings---No objection certificates' from all creditors banks of both companies had been placed on record which showed unanimous approval of the creditors for the relief of merger---High Court allowed the merger prayed for.

Mahmood Power Generation Limited and Mahmood Textile Mills Limited v. Joint Registrar of Companies and others 2006 CLC 1364 ref.

Imran Anjum Alvi for Petitioner.

Sohail Zahid Butt for Counsel for Income Tax Department.

Muhammad Saqlain Arshad, Assistant Director Legal, SECP.

2009 C L D 1185

[Lahore]

Before Syed Hamid Ali Shah, J

HABIB BANK LIMITED---Plaintiff

Versus

Messrs PEARL FABRICS LTD. Through Chief Executive and 7 others---Defendants

Civil Original Suit No.82 of 1998, heard on 24th March, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.9---Qanun-e-Shahadat (10 of 1984), Art.78---Suit for recovery of loan amount---Denial by defendant (Director of borrowing company) to have signed letter of personal guarantee---Proof---None of plaintiffs witnesses had stated that letter of guarantee was signed by defendant in their presence--Plaintiff had not examined either marginal witness or any one in whose presence such letter was executed---Defendant could riot be held liable on basis of corporate record already under challenge in civil suit---Signatures of defendant on admitted documents available on record did not resemble or tally with his signatures on disputed documents---Suit against defendant-guarantor was dismissed in circumstances.

Zulfiqar Ali v. Muhammad Sikria 1998 CLC 900; Muslim Commercial Bank Ltd. v. Darya Khan Bangash 1994 MLD 1897; Abdul Waheed v. Zahida Parveen and others 2005 MLD 48 and Maqsood Ahmad v. Salman Ali PLD 2003 SC 31 ref.

(b) Qanun-e-Shahadat (10 of 1984)---

----Art.78---Disputed signatures---Proof---Court in certain eventualities enjoyed plenary power to itself to compare signatures along with other relevant material to effectively resolve such dispute.

Messrs Waqas Enterprises and others v. Allied Bank of Pakistan and others 1999 SCMR 85 rel.

Abid Aziz Sh. for Plaintiff.

Sajid Mahmood Sh. for Defendant No.5.

Date of hearing: 24th March, 2009.

2009 C L D 1203

[Lahore]

Before Mian Saqib Nisar, J

Messrs SHAH'S IMPEX INDUSTRIES (PVT.) LTD. through Sikander Ali and 2

others---Appellants

Versus

IDBP through Authorized Officer and 3 others---Respondents

E.F.A. No.390 of 2004, decided on 25th May, 2009.

(a) Industrial Development Bank of Pakistan Ordinance (XXXI of 1961)---

----S. 39(9)(10)---Civil Procedure Code (V of 1908), O.XX, R.6---Recovery petition by Bank---Interim relief of attachment was granted to Bank, however, while passing the final order though the attachment was specifically confirmed, but no direction regarding any other relief was made particularly the sale direction was conspicuous!" missing---Order of the court in which sale direction was not given, was not executable qua the sale as well when the order provided the acceptance of the recovery petition in general terms and not containing such a direction---Principles.

In the main recovery petition the Bank had asked for multiple reliefs including the appointment of receiver, etc. and specifically for the sale of the properties and for the attachment thereof. The interim relief of attachment was granted to it however, while passing the final order though the attachment was specifically confirmed, but no direction regarding any other relief was given, particularly the sale direction was conspicuously missing. The word "or" in section 39(9), Industrial Development Bank of Pakistan Ordinance, 1961 is significant and means that the court has the option and the authority to grant either or both the reliefs or otherwise. Therefore, the question which needed determination was, if such an order in which sale direction was not given is executable qua the sale as well, when final order provided the acceptance of the recovery petition in general terms and not such a direction. This provision clearly postulates that the order passed under section 39(9) is composite in the nature i.e. entailing the "judgment" and also a "decree"; the judgment in the context of law is the statement given by the Judge of the grounds of decree, while the decree envisages the relief allowed and is the only instrument having relevance for the execution; the expression in the section "shall be carried into effect" connotes the execution of such a decree and obviously as per the command of section 39(10) of the Ordinance in the manner as has been provided in the Civil Procedure Code. The important aspect, which is to be seen is, whether the final order qualifies the test of a decree, which can be independently executed as required under the law. In this behalf, reference can be made to the provisions of Order XX, rule 6, C.P.C. which prescribes the contents of decree. It is the decree that is to be executed and should clearly specify the relief granted or other determination of the suit. It should be self-contained and capable of execution without reference to any other document. A decree and judgment are distinct and separate documents, though the decree should follow the judgment, but it must specifically contain as to what is the relief which has been allowed to the claimant/plaintiff so that through mechanism of execution (provided in Civil Procedure Code) the fruits thereof can be granted to the decree-holder; final order was a composite order which embodied both the judgment as also the decree, the latter part was the decree and if it (this part) did not specifically provide the relief granted, it shall not conform to the concept of the decree, which could be executed under the law and this was fundamental flaw in the final order as the case was heard on few occasions and during the course of one of the hearings, the Bank, realizing the above fault, had moved an application under section 151 read with section 107(2), C.P.C. seeking direction from High Court to correct and amend the final order suffice it to say that the present proceedings had arisen out of the execution and not on the original side, therefore, the provision of section 107(2), C.P.C. shall be inapplicable; the Bank may, however, choose appropriate remedy if permissible under the law for seeking appropriate amendment of the final order before the proper forum, so as to bring it in lines with section 39(9) of the Ordinance.?

Muhammad Suleman v. Wilayatullah Khan and 2 others 1990 CLC 110; Kareem Bux v. P.O. Sindh and others 1998 CLC 27; Muhammad Ilyas and others v. Muhammad Yasin 1985 CLC 1660 and AIR1944 O. 42 ref.

(b) Industrial Development Bank of Pakistan Ordinance (XXXI of 1961)---

----S. 39(10)---Civil Procedure Code (V of 1908), O.XXI, R.66---Recovery petition---Auction sale of property of judgment-debtor---Notice under O.XXI, R.66, C.P.C. having not been issued, the entire proceedings of the auction without complying with the mandatory provision of O.XXI, R.66, C.P.C. including the sale in favour of auction purchaser, stood vitiated and annulled.?

Messrs Ripple Jewellers (Pvt.) Ltd. through Chief Executive and another v. First Woman Bank through Officers/General Attorney/Principal Officers and 6 others 2003 CLD 1318; Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Ltd. Islamabad and another PLD 1993 Lah. 706; Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd through Branch Manager and 3 others 2003 CLD 1693; Mirza Munawar Baig and 5 others v. Bank Alfalah Limited and 2 others 2007 YLR 126; Mrs. Shahida Saleem and another v. Habib Credit and Exchange Bank Ltd, and others 2001 CLC 126 and Mst. Zainab Bibi v. Allied Bank of Pakistan Ltd. and others 2003 YLR 3274 ref.

(c) Industrial Development Bank of Pakistan Ordinance (XXXI of 1961)---

----S. 39(9)(10)---Civil Procedure Code (V of 1908), O.XXI, R.84---Recovery petition--Auction sale of property of judgment-debtor---Whether auction-purchaser could make the payment of 25% of the auction price through cheque---Principles.

Order XXI, Rule 84, C.P.C. is a mandatory provision because if the amount is not deposited with the Court auctioneer, he is bound to re-sell the property forthwith; this conforms to the spirit of the law that quite a steps and legal formalities are undertaken before the auction and if the successful bidder runs away and the auction remains unsuccessful on that account, again all the legal niceties have to be followed, which shall be an abuse of the process of law and the chance of re-sale there and then shall be gone and frustrated; it is in the above context that the law envisages a cash payment and even otherwise when the law (the Code of Civil Procedure, 1908) was enforced, the banking system, as it is today, was not in place, therefore, the payment through cheque could not be conceived, however, because of the changed circumstances, now-a-days it is a real risk and peril to carry huge money, thus, the payment through cheques can be received, this shall not militate against the spirit of Order XXI, rule 84, C.P.C. but the successful bidder along with the cheque should also establish by providing the latest bank statement to the court auctioneer that he has the requisite funds in the account from where the cheque is issued and if it is otherwise, the officer in the light of the command of law should re-sell the property forthwith, otherwise the law for the resale shall be infringed. Auction-purchaser, in the present case, had failed to provide any statement of accounts to establish the availability of such funds on the relevant date. Instead of allowing the same cheque encashed by the court auctioneer, the auction-purchasers themselves, after three days asked the officer to return it and paid him the cash amount, this was so reported by the court auctioneer in his auction report, this clearly showed that auction-purchaser had no sufficient amount in the said account and this was subsequently replaced by the cash. On account of withholding the best evidence i.e. proof about the availability of the funds in the bank account of auction-purchaser from which the cheque was issued, a presumption could be drawn against him in terms of Article 129(g) of the Qanun-e-Shahadat, 1984.

Asim Hafeez for Appellants.

Faisal Yaqub for Respondent No.1.

Muhammad Saeed Ansari for Respondent No.5.

Date of hearing: 5th May, 2009.

2009 C L D 1213

[Lahore]

Before Muhammad Khalid Alvi and Kh. Farooq Saeed, JJ

Mst. RUKIA BIVI---Appellant

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and

another---Respondents

R.F.A. No.10 of 2008, heard on 19th May, 2009.

Insurance Ordinance (XXXIX of 2000)---

----S.14---Sales Representative of Insurance Company having qualified during lifetime for three categories of insurance policies---Death of Sales Representative by electric shock---Payment of amount relating to Field Self Subscribed Group Insurance policy to mother of deceased---Claim by mother of deceased for amount of remaining insurance policies i.e. Compulsory Group Insurance and Self Subscribed Compulsory Group Insurance---Insurance Company neither in written reply nor during evidence denied such claim---High Court set aside the order of Appellate Tribunal and accepted the claim in circumstances.

Liaqat Ali Butt for Appellant.

Jahanzeb Khan Bharwana for Respondents.

Date of hearing: 19th May, 2009.

2009 C L D 1215

[Lahore]

Before Syed Hamid Ali Shah, J

Messrs NISHAT IMPEX (PVT.) LTD. Through Representative and another---Plaintiffs

Versus

Messrs HABIB BANK LTD. through Duly Authorized Attorneys and 2 others---Defendants

Civil Original Suit No.35 of 2003, decided on 24th February, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 9, 10 & 18---Civil Procedure Code (V of 1908), S.11 & O. VII, R.11---Suit for damages and cancellation of loan documents prepared by Bank on basis of blank and fake documents---Documents alleged by borrower to be void were found authentic by Banking Court while decreeing earlier suit of Bank for recovery of loan amount-Non-filing of appeal by borrower against such decree---Validity---Bank at relevant time had authority to obtain signatures of borrower on blank documents---Signing of blank documents by borrower 20 years prior to enforcement of Financial Institutions (Recovery of Finances) Ordinance, 2001 would amount to his agreeing on implied terms authorizing Bank to fill in the date and amount at a later point of time---Plaint did not disclose a cause of action---Plea raised by borrower in his suit, if entertained, would nullify effect of such decree, which had become final against him---Borrower's suit was hit by principle of res judicata---Plaint in borrower's suit was rejected under O. VII, R. 11, C.P.C., in circumstances.

Al-Rehman Chemicals v. Akhtar Asaleem Syed 2008 CLD 856; Naeem-ud-Din v. Allied Bank of Pakistan and 2 others 2006 CLD 484; ADBP and others v. Yar Muhammad .and others 2004 CLD 1084; State Bank of Pakistan v. Chiragh Son Engineering Ltd. and another 2000 YLR 1198; Commissioner of Income Tax/Wealth Tax Faisalabad Zone v. Messrs Shehzad & Co. Faisalabad 2006 PTD 2436 and Muhammad Mumtaz Masood and 2 others v. HBFC and 2 others 1994 SCMR 2287 ref.

Messrs United Bank Ltd. v. President Bazm-e-Salat and another PLD 1986 Kar. 464; Messrs Bank of Oman Ltd. v. East Asia Trading Co. Ltd. and 4 others 1987 CLC 288; Habib Bank Ltd. v. Messrs Waheed Textile Mills Ltd. PLD 1989 Kar. 371; National Bank of Pakistan v. Messrs M. Ismail Thakur & Sons Ltd. and another 1988 CLC 700 and United Bank Ltd. v. Messrs Sartaj Industries through Qaisar Iqbal Managing Painter and 6 others PLD 1990 Lab. 99 rel.

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

----S.11---Res juclicata, principle of---Scope---No suit by itself could be barred as res judicata, by only matters or issues involved therein might be barred---Subject matter of two suits must be directly and substantially in issue to warrant application of S.11, C.P.C.

Sajjid Mahmood Sh. for Plaintiff.

Khalid Ishaque and Bashir Ahmad Shaheen for Defendants.

Date of hearing: 24th February, 2009

2009 C L D 1221

[Lahore]

Before Muhammad Khalid Alvi and Kh. Farooq Saeed, JJ

MUHAMMAD KHURRAM MIRZA---Appellant

Versus

SMALL MEDIUM ENTERPRISES BANK (SME) through Branch Manager---Respondent

R.F.A. No.209 of 2007, heard on 12th May, 2009.

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

----Ss.9, 10 & 22---Civil Procedure Code (V of 1908), O.VII, R.10---Suit for recovery of loan---Leave to appear and defend suit---Return of plaint---Plaintiff had consolidated various cases of action in a para. of the plaint, i.e. that he was threatened and harassed by defendant; and an amount of Rs.10,000 was also paid by the plaintiff in consequence of the conduct of the defendant---Such various causes were inseparable as they all

had occurred at one time and at one place which was 'R'---Plaint had merely declared that cause of action had occurred at place but that para. of the plaint was in total disagreement with previous para.---Was not permissible under the law to file two separate suits arising out of the same cause of action before two different courts--All the causes of action had to be adjudicated by one and the same court having territorial and pecuniary jurisdiction---Plaint, in circumstances, was rightly returned by the Trial Court under O. VII, R. 10, C.P.C.---Appeal against said order of the Trial Court, was dismissed in circumstances.

Ashar Ellahi for Appellant.

Sh. Nadeem Anwaar for Respondent.

Date of hearing: 12th May, 2009.

2009 C L D 1224

[Lahore]

Before Mian Saqib Nisar and Hafiz Tariq Nasim, JJ

Mian SULTAN AHMED---Appellant

Versus

ALLIED BANK LIMITED through Manager---Respondent

R.F.A. No.361 of 2008, decided on 19th January, 2009.

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

----S.22--Appeal---Appellant had stated that he did not want to pursue the appeal and wanted to withdraw the same, if the decretal amount was recovered from the appellant through instalments---Counsel for Bank had no objection to the statement of the appellant--Appeal was dismissed as having been withdrawn, however, it was directed that the decretal amount should be recovered by the Bank from the appellant through instalments, accordingly.

Malik Muhammad Imtiaz Mahal for Appellant.

Syed Fazal Mahmood for Respondent.

2009 C L D 1250

[Lahore]

Before Syed Hamid Ali Shah, J

MUHAMMAD ASHRAF---petitioner

Versus

UNITED BANK LIMITED through President and 3 others---Respondents

Writ Petition No.11148 of 2003, decided on 6th March, 2009.

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

----S.41---Constitution of Pakistan (1973), Art. 199---Constitutional petition----Banker and Customer---Withdrawal of rate of profit at agreed rate and unilateral reduction of return by Banks on "Profit Schemes"---Conditions contained in the Certificates of schemes were concluded contract and the obligations of parties were to be performed according to these conditions---Depositors in the schemes, could invest without being an account-holder, which fact, by itself, signified that conditions contained in the Account Opening Form" had no application to the investments under the Scheme---Fixed deposit for a fixed period on fixed rate of profit on fixed mode of payment, could not be stretched to fall within the "Profit and Loss Sharing System" of the Banks---Principles.

Muhammad Javed Anjum v. Industrial Development Bank of Pakistan Writ Petition No.4095 of 2003 and I.C.A. No.68 of 2004 rel.

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

----S. 41---Constitution of Pakistan (1973), Arts.199 & 18---Constitutional petition---Theory of State action and `doctrine of public trust'---Applicability---Scope---Banker and Customer---withdrawal of rate of profit at agreed rate and unilateral reduction of return by Bank on Profit Scheme---Grievance of the depositors was not only that Banking Company had breached the terms of contract but the contract involved the public interest and Bank and under the cover of act of omission on the part of State Bank of Pakistan, was running the banking business detrimental to the interest of public as well as the depositors---Whenever it was found that a banking company was conducting its affairs in a manner, detrimental to the interest of its depositors, the State Bank of Pakistan being regulatory body, was bound to issue directions in the public interest---Transaction of banking business, by a company licensed by State Bank of Pakistan to do so, was a "public purpose", and a Bank was performing this function-Delayed action or inaction on the part of State Bank of Pakistan, in the affairs of such companies could be judicially reviewed in the exercise of powers conferred under Art.199 of the Constitution---Principles.

Walk Orient Power and Light Limited v. Government of Pakistan, Ministry of Water and Power through Secretary Islamabad and 2 others 1998 CLC 1178; Shehla Zia and others v. WAPDA PLD 1994 SC 693; Messrs Huffaz Seamless Pipe Industries Ltd. v. Sui Northern Gas Pipelines Ltd. and others 1998 CLC 1890 and Network Television Marketing Ltd. v. Government of Pakistan and another 2001 CLC 681 rel.

(c) Banking Companies Ordinance (LVII of 1962)---

----S. 41---Constitution of Pakistan (1973), Art.199---Constitutional petition---Maintainability---Bank under effective control of the State Bank of Pakistan, so far its banking business is concerned, discharges pub is functions, receives and transacts in public money in trust for public interest---Such functions of the Bank in substance are instrumentalities and functions of the State/Federation and are thus, subject to judicial review of High Court in its constitutional jurisdiction.

(d) Constitution of Pakistan (1973)---

----Art. 199---Constitutional jurisdiction of High Court---Scope---Constitutional jurisdiction of High Court does not extend to enforcement of contractual obligation---Contractual obligation or redressal of breach thereof, can adequately be redressed through a regular suit---Principles---Instances where the High Courts and Supreme Court have passed appropriate directions on the subject in the interest of justice in given situations enumerated.

(e) Constitution of Pakistan (1973)---

----Art. 199---Constitutional petition---Maintainability---Breach of statutory duty and breach of trust---Mandamus, writ of---Issuance---Banker and customer---Withdrawal of rate of profit at agreed rate and unilateral reduction of return by Bankers on Profit Schemes---In the present case, determination of factual controversy was not involved and the only question raised by the depositors was legality or otherwise of the reduction of agreed profit---Such question being legal, had direct bearing on the investment of large number of depositors, therefore; its resolution through invoking constitutional jurisdiction of High Court, was proper and imperative---Present situation was not the breach of contract which was complained of, rather the issue involved was breach of statutory obligation and breach of public trust---Writ of mandamus would lie to compel the performance of public duty, no matter what was the source, it could be statute, contract or charter etc.---Construction of a written contract involved the question of law, true construction of contract was to be decided by courts and none else---Objection to maintainability of constitutional petition, in the present case, was thus, overruled as constitutional jurisdiction of High Court was rightly invoked.

(f) Constitution of Pakistan (1973)---

----Art. 199---Contract Act (IX of 1872), S.23---Constitutional petition---Banker and customer---Unilateral reduction in the agreed rate of profit in "Profit Schemes" floated by Banks, through investment certificates---Contention of the Banks was that reduction in the agreed rate of profit was resorted to in the terms of "Account Opening Form" which authorized the Banks to bring variation in the rate of profit and reduce the same according to changed circumstances---Such plea did not justify the action of the Bank---Bank had widely advertised through scheme payment of profit at a stipulated rate---Certificates purchased by the depositors contained the condition of payment of profit at the said rate--Brochure,. the public notices cited in print media and Certificates (MMC) nowhere provided for reduction of rate of agreed profit unilaterally---Condition, in Account Opening Form, in circumstances, had no precedence over the conditions incorporated in the certificate itself which was paramount document---Investors could purchase certificates, without being an account-holder, therefore, any condition mentioned in the form will not override the express stipulation in the Certificates---Term of unilateral reduction in the agreed rate of profit, mentioned in the "Account Opening Form" was un­conscionable, discriminatory and against the public policy and was therefore, unenforceable under S.23, Contract Act, 1872---Impugned action of the Banks whereby the rate of return/profit on Investment Certificates had been reduced unilaterally, was declared to be without lawful authority and of no legal effect---Banks were legally bound to pay the depositors the profits, on the agreed terms, as expressly incorporated in the Certificates---Depositors were entitled to profit at the agreed rate, till final payment in respect of their investments.

J. Spmling Ltd. v. Bradshow (1956) 1 WLR 461 ref.

Malik Saeed Hassan for Petitioner.

Imran Aziz Khan for Respondents.

Date of hearing: 6th March, 2009.

2009 C L D 1301

[Lahore]

Before Mian Saqib Nisar and Ali Akbar Qureshi, JJ

ASIF ALI and 6 others---Appellants

Versus

SAEED MUHAMMAD---Respondent

R.F.A. No.531 of 2006, heard on 22nd June, 2009.

(a) Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Presumption under S.118, Negotiable Instruments Act, 1881---Scope---Such presumption was not a conclusive presumption about the drawing, consideration etc. of the negotiable instrument rather was rebuttable in nature---Matter of presumption shall be determined by the court on the preponderance of the complete evidence on the record---Principles illustrated.

Section 118 of the Negotiable Instruments Act, 1881, does not envisage a conclusive presumption about the drawing consideration etc. of the negotiable instrument, rather without any fear of contradiction, it can be' held to be rebuttable in nature and this is so clear and obvious from the expression used in the section i.e. "until the contrary is proved". The question which shall thus, arises for the consideration is that where a claim is propounded on the basis of a negotiable instrument, is it necessary and imperative in all such cases that the defendant should prove in the negative, that he has not drawn the instrument and that it is without consideration or it is for the plaintiff to discharge the initial burden of proving his case in this regard, especially when the plaintiff has undertaken to prove that the negotiable instrument (cheque) has been duly executed for the consideration not only that issue had been framed in this case, which has placed the onus in this behalf upon the plaintiff, rather he himself led evidence to prove the payment of the money through two witnesses, his own statement and the statement of Bank Manager, therefore, the respondent/plaintiff is precluded in law to urge in this case that it was for the defendant to prove to the contrary.

Matter of presumption shall be determined by the court on the preponderance of the complete evidence on the record.

Without prejudice to the above, it may further be added that the expression "until the contrary is proved" is couched in the negative and the proof of a "negative fact" has its own limitations and bounds and the law in this behalf does not recognize and require that a litigant should imperatively give the positive evidence of a "negative fact"; this is inconceivable under the law of the proof of a fact. However, the above rule is subject to certain exceptions, where for example that the defendant through positive evidence shall be able to substantiate that on a given date he was not at the place where the execution of the instrument is alleged or the plaintiff has no capacity or the mean to grant the loan, or he or his relative met with some accident or were seriously ill, hospitalized or operated upon which. would preclude the execution of the instrument; these shall constitute an apt illustration of the proof "to the contrary" and may be held to be one category of the cases falling within the purview of section 118; however, the second category, which is perceived by the said section is when after the conclusion of the trial, on the basis of the complete evidence on the record from whichever side it is adduced, that the Court shall be required to determine if the execution and consideration, etc. is proved to be contrary or otherwise. It may be relevant to mention that of course, it shall be permissible in law to prove "to the contrary" by means of cross-examination upon the witnesses of the plaintiff, that the instrument was not drawn and the consideration never passed. The present case falls in the second category and thus, it is on the basis of the total evidence on the record by applying the rule of preponderance (of the evidence) and the possibility that such lis should be decided.

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

----S. 118---Civil Procedure Code (V of 1908), O.XXXVII----Presumption as to negotiable instrument of consideration---Scope---Suit for recovery of loan amount on the basis of a cheque, after grant of leave to defendants and holding the trial, had been decreed by the Trial Court---Suit had not been filed within the life time of the defendant; explanation given in the plaint and in the evidence about his promise to repay the amount and that on account of his illness he expressed his inability, had not been established through independent evidence; no written agreement had been produced on the record or even alleged to have been executed between the parties and despite relationship, it was quite improbable that such substantial amount shall be given by the plaintiff only on the basis of mutual trust; no date, month and even the year of the granting of loan had been given in the plaint; however, it was vaguely mentioned that it was during the time when the Mill of defendant was being in process of creation; plaintiff in his cross-examination had stated that Mill of defendant started functioning in 1997-1998 while his witness' had stated that the money was paid through two tranches i.e. 4-4-1999 and 25-4-1999 which meant that it was after the establishment of the Mill, thus had serious reflection upon the motive and the very purpose of the loan; statement of defendant's witnesses with regard to dates of establishment and closure of the Mill of defendant because of losses had not been subjected to cross-examination by the plaintiff which shall be deemed to have been admitted, had belied the execution and consideration of the cheque; capacity of the plaintiff to pay the amount was under challenge but he had not been able to establish that in the year 1997-1998, he had such a substantial amount to pay to the defendant as loan; plaintiff though admitted to be the income tax assessee but expressed lack of knowledge if the amount of loan advanced to the defendant was declared in his income tax return; plaintiff not only in the plaint but also in his own statement while appearing as witness had mentioned that (Punchaiat) had gone to the defendant for the return of money on two occasions, but no independent person in this behalf had been examined, son, cousin and brother-in-law of plaintiff who appeared as witnesses for plaintiff could not be considered to be those respectables, who in the ordinary parlance could be said to constitute Punchaiat; cheque in question had not been filled up by defendant, and as to who had filled the cheque, was not proved on record; signatures of defendant on the cheque had not been asked for the opinion of expert by the plaintiff; Bank Officer was unable to state, if the signatures on the cheque belonged to the defendant or otherwise; exact dates, which had been given by the plaintiffs witness i.e. Rs.20, 000, 00 was paid on 4-4-1999 and Rs.10, 000, 00 on 25-4-1999, were not specifically mentioned in the plaint nor even so specified in the statement of other plaintiffs' witness and no explanation was available on record about such very conspicuous omission; such quality of evidence on the record had excluded the case from realm of the transactions as had been contemplated by the provisions of S.118, Negotiable Instruments Act, 1881---Case of the plaintiff that the decision of the matter must exclusively be founded on the presumption of S.118, Negotiable Instruments Act, 1881, could not be accepted---Presumption, in circumstances, stood repelled and the plaintiff had failed to prove his case---Judgment and decree of the Trial Court was set aside with the result that suit stood dismissed.

Salar Abdur Rauf v. Mst. Barkat Bibi 1973 SCMR 332; Mahmood Hassan Ashraf v. Shakil Ahmad 1973 SCMR 595; Sundarammal v. Subramanya Chettiar and others AIR 1916 Mad. 278; Syed Aijaz Hussain v. Syed Abdul Azeem 2008 CLD 51; Shell Pakistan Ltd. v. Aero Asia International (Pvt.) Ltd. through Chief Executive and another PLD 2008 Kar. 429; Ali Muhammad Shah v. Ijaz Hussain Shah 2007 MLD 1619; Muhammad Aziz-ur-Rehman v. Liaquat Ali 2007 CLD 1605; Muhammad Aziz-ur-Rehman v. Liaquat Ali 2007 SCMR 1820; Muhammad Ashraf v. Akhlaq Sheeda 2007 CLD 267; Muhammad Arshad and another v. Citibank N.A. Al-Falah Building, Lahore 2006 CLD 1011, Muhammad Akhtar v. Zahar Khan 2006 CLD 737; Sheikh Muhammad Javed Anwar v. Muhammad Ashraf 2006 CLD 107; Muhammad Hussain v. Muhammad Nawaz 2006 YLR 2107; Syed Kausar Abbas Shah v. Sardar Khan 2005 YLR 3321; Sheikh Muhammad Ayub v. Muhammad Yousaf 2005 CLD 588; Muhammad Akbar v. Sheikh Abdul Shakoor 2004 MLD 951; Jam Hameed Shahid v. Liaqat Ali 2004 CLC 219; Messrs Karachi Bonded Stores Limited v. Trustees of the Port of Karachi and others 1999 MLD 3214; Best Foods (Private) Limited v. Tabani Corporation 1991 CLC 1897; Syed Haider Aabdi v. Syed Javed Aabi 1986 MLD2298; Fine Textile Mills Ltd. Karachi v. Haji Umar PLD 1963 SC 163; Shell Pakistan Ltd. through Attorney v. Aero Asia International (Pvt.) Ltd. through Chief Executive 2008 CLD 996; Muhammad Aziz-ur-Rehman v. Liaquat Ali, 2007 SC 1542; Adil Jamshed v. Muhammad Ubaidullah 2005 CLD 1840 Peshawar; Naseer Ahmad v. Mehr Akhtar Abbas 2005 YLR 3021 Lahore; Hamid Shehzad Managing Director v. Muhammad Sohail Saeed 2005 YLR 3226 Peshawar; Malik Muhammad Amin v. Zahid Mehmood 2005 CLD 982 Lah.; Messrs Mach Knitters (Pvt.) Ltd. v. Allied Bank of Pakistan Ltd. CLD 2004 Lah. 535; Irfan Fazal v. Zahid Iqbal 2004 CLC 384; Muhammad Ajmal Khan v. United Bank Ltd 2004 CLD 1577; Kausar Saeed v. Syed Wajahat Hussain 2003 CLD 272; EFU General Insurance Ltd. v. Messrs Security and Management Service (Pvt.) Ltd. 2002 CLD 107; Asif Nadeem v. Bexshim Corporation 2001 CLC 653; S.K. Abdul Aziz v. Mahmood-ul-Hassan 2000 CLC 1967; Khalid Mukhtar v. Sadiqa Tasneem 1996 CLC 741; Khalil-ur-Rehman v. Muhammad Shafi 1993 MLD 1144; State Associates v. Farben Industrial Development S.PA 1992 MLD 1007; Sughiran Begum v. Qadir Bakhsh PLD 1986 Quetta 232; Industrial Mining Enterprises Karachi v. Industrial Mineral Corporation Ltd. 1985 MLD 181 and Karim v. Zikar Abdullah 1973 SCMR 100 distinguished.

Ch. Ali Muhammad for Appellants.

Kh. Saeed-uz-Zafar for Respondent.

Date of hearing: 22nd June, 2009.

2009 C L D 1313

[Lahore]

Before S. Ali Hassan Rizvi and Muhammad Ashraf Bhatti, JJ

Malik LIAQAT ALI---Appellant

Versus

MUHAMMAD SHARIF---Respondent

Regular First Appeal No.279 of 2002, heard on 28th April, 2009.

(a) Negotiable Instruments Act (XXVI of 1881)---

----S.18---Civil Procedure Code (V of 1908), O.XXXVII, Rr.2 & 3---Suit for recovery of money on basis of promissory note---Execution of promissory note and its receipt successfully proved by plaintiff---Effect---Burden would' shift on defendant to prove want of consideration in view of presumption provided under S.118(a) of Negotiable Instruments Act, 1881---Such burden could be discharged either by leading evidence by defendant or relying on evidence of plaintiff which might be contrary to such presumption.

Mst. Sughran Begum and others v. Haji Meer Qaider Bakhsh and others PLD 1986 Quetta 232 and R.F.A. No.15 of 2003 decided on 14-4-2009 rel.

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

----O.XXXVII, Rr. 2 s& 3---Qanun-e-Shahadat (10 of 1984), Arts.102 & 103---Suit for recovery of money on basis of promissory note---Plea of defendant was that promissory note was handed over to plaintiff as security for payment of amount of committee; and that defendant had paid amount to members of committee---Proof---Execution of promissory note and its handing over by defendant to plaintiff had been satisfactorily proved---Nothing on record in support of such plea of defendant---Defendant's evidence had reinforced claim of plaintiff---No evidence contrary to written document regarding disposition of any property would be admitted as between parties thereto---Suit was decreed in circumstances.

(c) Qanun-e-Shahadat (10 of 1984)---

----Arts.117 & 118---Burden of proof in civil matters never remains constant---Principles.

Burden of proof in civil matters never remains constant. It remains on being shifted from one party to another. Even otherwise, when evidence is recorded, burden of proof would lose its importance.

Malik Falak Sher for Appellant.

Nemo for the Respondent.

Date of hearing: 28th April, 2009.

2009 C L D 1317

[Lahore]

Before Khawaja Farooq Saeed and Muhammad Khalid Alvi, JJ

Mst. IJAZ BEGUM---Appellant

Versus

STATE LIFE INSURANCE CORPORATION---Respondent

R.F.A. No.9 of 2008, heard on 10th June, 2009.

Insurance Ordinance (XXXIX of 2000)---

----Ss.72, 73, 124 & 128---Limitation Act (IX of 1908), Art.86-A---Claim for insurance amount---Reference to Insurance Ombudsman--Appeal to High Court---Husband of the appellant applied for Life Insurance Policy and on which provisional receipt was issued and on presentation of cheque, Policy was finalized---On death of husband of appellant in road accident, appellant lodged her claim for insurance amount---Claim of appellant was repudiated whereupon appellant filed a complaint before Federal. Ombudsman, which was allowed, but on representation by the Insurance Company said order was upset by the President---Order of the President, however was set aside by the High Court and case was remanded to the President for reconsideration---Subsequently when Insurance Tribunals were constituted, appellant withdrew her complaint and filed the application before Insurance Tribunal, which having been dismissed by the Tribunal, appellant had filed appeal before High Court--Validity-Appellant was non-suited on two counts; firstly that application of appellant was time barred; secondly that since the matter had already been adjudicated before Ombudsman, same was hit by res judicata---High Court had already resolved in its two judgments---Limitation provided under Art.86-A of the Limitation Act, 1908 was with reference to the suits filed by the claimants under the plenary jurisdiction of the civil court before establishment of Insurance Tribunals---Application brought by the appellant was within time and was not barred by time---High Court while dealing with constitutional petition filed by the appellant had not finally decided the issue involved, but had simply remanded the case to the President, without final adjudication by a court of competent jurisdiction---Principle of res judicata could not be made applicable in circumstances---Defence taken up by the Insurance Company could not be established on record---Allowing appeal, order passed by the Insurance Tribunal, was set aside and application filed by the appellant was allowed.

PLD 2008 Lah. 461 ref.

Liaqat Ali Butt for Appellant.

Mian Naseer Ahmed for Respondents Nos. 1 and 2.

Date of hearing: 10th June, 2009.

2009 C L D 1326

[Lahore]

Before Khawaja Farooq Saeed and Muhammad Khalil Alvi, JJ

MAQBOOL BEGUM---Appellant

Versus

STATE LIFE INSURANCE CORPORATION ---Respondent

R.F.A. No.76 of 2008, heard on 10th dune, 2009.

Insurance Ordinance (XXXIX of 2000)---

----Ss.6, 9 & 124--Expiry of licence of Sales Manager of Insurance Company---Renewal--Appeal to High Court against the decision of the Insurance Tribunal---Husband of the appellant, who was Sales Manager with the Insurance Company had licence in his name---Validity of said licence expired on 22-2-2001 which was renewable within a period of one year i.e. till 22-2-2002, however before termination of licence, husband of the appellant passed away---Claim for Group Insurance filed by the appellant 'having been turned down, appellant filed application before the Insurance Tribunal, which was dismissed on the ground that since licence of deceased had expired and it was not renewed, same would be treated to have been terminated and with said termination, claim of insurance had automatically vanished---Validity---Memorandum of understanding between the Insurance Corporation and employees as amended up to date had clearly postulated that "failure to apply for the renewal of lapsed licence within prescribed time, would not be treated as termination of licence"---Licence of the husband of appellant though had expired but during the period of renewal he having died, still three months' time was available to him to have got his licence renewed---Same thus could not be treated to have been terminated---With the repeal of old Insurance Law and by introduction of new Insurance Ordinance, 2000, office of Controller of Insurance had ceased to exist and process of licensing and renewal also stopped for which an interim arrangement had to be made through memorandum, which was also after the death of deceased husband of the appellant---No occasion was, in circumstances, for deceased to have got his licence renewed---Said memorandum had to be issued by Insurance Corporation in order to bridge the gap existing in the law at that time and also to provide remedies to affected persons---Application of the appellant was allowed along with liquidated damages.

Liaqat Ali Butt for Appellant.

Mian Naseer Ahmed for Respondent.

Date of hearing: 10th June, 2009.

2009 C L D 1373

[Lahore]

Before Maulvi Anwarul Haq, J

Messrs BUTT FLOUR MILLS and others---Appellants

Versus

JUDGE BANKING COURT NO.1, GUJRANWALA and another---Respondents

Transfer Application No.26/C of 2008, decided on 15th October, 2008.

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

----S.9-Suit for recovery of loan--Application for transfer of suit to High Court---Defendants had sought transfer of suit filed by the plaintiff-Bank in Banking Court at place 'G', where C.O.S. filed by the defendants was pending---In the suit filed by the plaintiff-Bank, persons who had been impleaded as guarantors, were not party to C.O.S.---Bank had sued on the basis of finance while defendants had sued the Bank inter alia, for damages---Held, it would not be appropriate to transfer the suit to High Court because of the absence of the said parties in the suit filed by the defendants---Transfer application was dismissed.

Messrs First Women Bank Ltd. v. Registrar of High Court of Sindh, Karachi and 4 others 2004 SCMR 108 ref.

Asghar Khan and Rana Qadeer Ahmad for Applicants.

M. Qamar-uz-Zaman for Respondents.

2009 C L D 1389

[Lahore]

Before Maulvi Anwarul Haq, Sh. Azmat Saeed and Kh. Farooq Saeed, JJ

MUHAMMAD ASLAM and another---Appellants

Versus

NATIONAL BANK OF PAKISTAN and 7 others---Respondents

F.A.O. No.324 of 1999, heard on 5th June, 2009.

(a) Fraud--

----Jurisdiction of court---Scope---Every court including a court established under a special enactment would always be competent to take cognizance of any fraud, misrepresentation or lack of jurisdiction in respect of matter pending before or decided by such Court.

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

----Preamble---Civil Procedure Code (V of 1908), S.12(2)---Ex parte decree--Application under S.12(2), C.P.C., for setting aside such decree---Maintainability---Every court including a court established under a special enactment would always be competent to take cognizance of any fraud, misrepresentation or lack of jurisdiction in respect of matter pending before or decided by such court---Such application was competent before Banking Court.

Emirates Bank International Ltd. v. Messrs Qasim Brothers and others PLD 1998 Kar. 338; Mian Munir Ahmed v. United Bank Limited and 3 others PLD 1998 Kar. 278 and Messrs Gold Star International and another v. Muslim Commercial Bank Limited 2000 MLD 421 ref.

Muhammad Yaqoob and others v. Messrs United Bank Limited and others 2007 SCMR 922 fol.

Dr. A. Basit for Appellants.

Sahibzada Anwar Hameed for Respondent No.4.

Nemo for others.

Date of hearing: 5th June, 2009.

2009 C L D 1392

[Lahore]

Before Syed Asghar Haider and Imtiaz Rasheed Siddiqui, JJ

CITIZENS INVESTMENT CO.---Appellant

Versus

ASKARI LEASING LTD. and others---Respondents

E.F.A. No.30 of 2004, heard on 6th May, 2009.

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S.22---Civil Procedure Code (V of 1908), O.XLI & O.XLIII, Rr. 1, 2--Appeal---Valid filing of---Scope---Filing of appeal could be done even by counsel for appellant because he could sign memo. but the same could be required to be done under delegated authority---As such authority was missing and was not part of record---Counsel was not authorized in law to file the appeal---Appeal was not validly filed in circumstances.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.22 & 23-Civil Procedure Code (V of 1908), S.64, O.XXI, R.58 & O.XXXVIII, R.11--Appeal--Attachment of property---Transfer of title--Appellant claimed that property in question had been validly transferred in his name and the same could not be auctioned during execution proceedings---Validity---Post decretal attachment order was passed under O.XXI, R.58, C.P.C. and the same was not only legally effective but binding as well---Appellant failed to point out any procedural defect in execution proceedings, as such there was no illegality in the same--Passing of two simultaneous orders on the same cause were not illegal---In view of the provisions of O.XXXVIII, R.11, C.P.C. there was also no illegality---Sale-deed in favour of appellant was executed on 11-8-2003, and attachment order passed by Executing Court was earlier in time, therefore, such sale was legally ineffective under S.64, C.P.C., as any transaction subsequent to passing of order of attachment was ipso facto void---Transfer of property in question was legally void and ineffective as it violated the bar contained in S.23 of Financial Institutions (Recovery of Finances) Ordinance, 2001--Appeal was dismissed in circumstances.

Messrs Tri-Star Polyester Limited and another v. Citi Bank 2001 SCMR 410; Vannarakkal Kallalathil Sreedharan v. Chandramaath Balakrishnan and another (.1990) 3 SC cases 291; Faqir Ali v. Muhammad Hayat PLD 1976. Lah. 298; A.T.K.P.L.M. Muthiah Chetti v. Palaniappa Chetti and others A.O.R. 1928 P.C. 139; Ramji and another v. Ramji AIR 1933 All. 844; Derajat Bank Ltd. Dera Ghazi Khan v. Mst. Sardar Bibi and others AIR 1937 Lah. 671; Lachhman Das v. Rup Chand and another AIR 1935 Lah. 57 and State Life Insurance Corporation of Pakistan v. Dr. A.M. J. Shiraze and 9 others PLD 1983 Kar. 112 distinguished.

Sahibzada Anwar Hamid v. Messrs Topworth Investments (MACAU) Ltd. through Chairman and 5 others 2003 YLR 2843; Messrs Standard Hotels (Pvt.) Ltd. v. Messrs RIO Centre and others 1994 CLC 2413; Abubakar Salery Mayet v. Abbot Laboratories and another 2987 CLC 367; Government of Pakistan v. Premier Sugar Mills and others PLD 1991 Lah. 381; Khan Iftikhar Hussain Khan of Mamdot (represented by 6 heirs) v. Messrs Ghulam Nabi Corporation Ltd. Lahore PLD 1971 SC 550; 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; Mst. Afroz Begum and 2 others v. Qutabuddin 1989 MLD 2493; National Bank of Pakistan and others v. Karachi Development Authority and others PLD 1999 Kar. 260 and Board of Control of Cricket in Pakistan v. Karachi Development Authority through Director General and 51 others 1997 CLC 795 rel.

M. Waqar Rana for Appellant.

Malik Qamar Afzal for Respondent No.1.

Date of hearing: 6th May, 2009.

2009 C L D 1413

[Lahore]

Before Sh. Azmat Saeed and Abdul Sattar Goraya, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another---Appellants

Versus

Mst. NASEEM BEGUM ---Respondent

Insurance Appeal No.104 of 2008, decided on 21st May, 2009.

Insurance Ordinance (XXXIX of 2000)---

----Ss.121 & 124--Application for recovery of balance claim---Insurance appeal---Applicant who was mother of deceased had contended that as per memorandum of understanding her deceased son was entitled to Field Self Subscribed Group Insurance Scheme and upon his death the applicant was entitled to a sum of Rs.3,00,000---Applicant had contended that a sum of Rs.1,50,000 as a balance amount remained unpaid---Insurance Tribunal which was seized of the matter, held applicant entitled to a sum of Rs.1,50,000 by impugned order as claimed by the applicant and Insurance Corporation ad filed appeal against the same---Contentions of the Insurance Corporation were; firstly that Tribunal was not duly constituted and secondly that application filed by the applicant was barred by time and that Tribunal must consist of three members, while impugned order had been passed by an Additional District Judge---Validity---Proviso to S.121 of Insurance Ordinance, 2000, had specifically provided that where no such Tribunal was constituted, - Federal Government could issue a notification conferring powers of the Tribunal upon a District, Additional District and Sessions Judge---Said notification had been issued conferring the powers of Insurance Tribunal upon Judicial Officer who passed the order---After death of her son, applicant/mother had been agitating the matter before the Wafaqi Mohtesib and upon the constitution of Insurance Tribunal in 2006, applicant filed application immediately before such Tribunal Insurance Tribunal having not been constituted before 2006, contentions of the counsel for the Insurance Corporation with regard to limitation were without force---Appeal being without any merit was dismissed.

State Life Insurance Corpn. v. Mst. Sadaqat Bano 2008 CLD 1069 ref.

Syed Muhammad Naqvi for Appellants.

Liaqat Ali Butt for Respondent.

2009 C L D 1422

[Lahore]

Before Ch. Mahmood Akhtar Khan, J

Malik TARIQ MEHMOOD---Petitioner

Versus

Messrs ASKARI LEASING LTD.---Respondent

Writ Petition No.777 of 2007, heard on 5th June, 2009.

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

----Ss. 20, 7 & 2(c)---Penal Code (XLV of 1860), S.489-F---Constitution of Pakistan (1973), Art.199---Constitutional petition---Object and reasons for enacting Financial Institutions (Recovery of Finances) Ordinance, 2001 and Penal Code, 1860 were ° different---Cheques issued by customer to Leasing Company in connection with lease of vehicle were dishonoured---Leasing Company got registered F.I.R. against the customer---Validity---Lessee of the vehicle was a "customer" within the meaning of S.2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and case of the lessee clearly fell within the ambit of provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---Section 7, Financial Institutions (Recovery of Finances) Ordinance, 2001 had conferred criminal jurisdiction to the Banking Court, to try offences punishable under the Ordinance---Whenever an offence was committed under S.20(4) of the Ordinance, Banking Court would take cognizance upon a complaint filed by the authorised person and complaint would be tried by concerned Banking Court, appeal against which was provided before High Court---F.I.R. against the customer under S.489-F, P.P.C. or allowing the same to exist was only wastage of time and abuse of process of law---High Court allowed the constitutional petition of the customer and directed the police not to take law in its own hands in cases covered within the ambit of Financial Institutions (Recovery of Finances) Ordinance, 2001---Principles.

Qausain Faisal, Mufti for Petitioner.

Rahil Sikander Khawaja for Respondent.

Muhammad Abid Raja, A.A.-G. with Hasan Askri, S.-I with Record.

Date of hearing: 5th June, 2009.

2009 C L D 1425

[Lahore]

Before Muhammad Akram Qureshi, J

MUHAMMAD SALEEM---Petitioner

Versus

THE STATE-Respondent

Criminal Miscellaneous No.9144-B of 2008, decided on 29th October, 2008.

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

----S.20---Penal Code (XLV of 1860), S.489-F---Criminal Procedure Code (V of 1898), S.498---Pre-arrest bail, grant of---Section 489-F, P.F.C. and S.20 of Financial Institutions (Recovery of Finances) Ordinance, 2001, are two independent sections---Section 489-F, P.P.C. is applicable when transaction is between two individuals---Banks are the financial institutions and if an offence regarding dishonest issuance of cheque was committed to satisfy the loan secured from a Banking Institution then S.20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 would be applicable and' the Bank would be required to file complaint before the Banking Court in that case and registration of case before police, its investigation and submission of challan in pursuance thereof, would not be in accordance with law and Trial Court would be debarred from taking cognizance of the offence---Definition of the word "complaint" excludes the report of a police officer from the ambit of S.20 of the aforesaid Ordinance, which carried maximum penalty of one year's rigorous imprisonment and was a bailable offence---Accused could not be remanded to police custody in a bailable offence---Ulterior motive of the police was quite apparent in the registration of the present case---Interim pre-arrest bail already granted to accused was confirmed in circumstances.

2006 CLD 1314; PLD 2001 Lah. 533 and PLD 2008 Kar. 212 ref.

Umer Farooq for Petitioners.

Ch. Fayyaz Ahmad, D.P.G. with Abdul Hameed, S.-I.

2009 C L D 1428

[Lahore]

Before Mian Saqib Nisar and Ali Akbar Qureshi, JJ

PAKISTAN INDUSTRIAL CREDIT AND INVESTMENT CORPORATION LIMITED---Appellant

Versus

ARIF NOOR and another---Respondents

R.F.A. No.62 of 2003 in C.O.S. No.48 of 2000, decided on 6th July, 2009.

(a) Banking Companies (Recovery of Loans) Ordinance (XIX of 1979)---

----S.6-A---Limitation, extension of---Scope---Two years' limitation was extended if the suit of the banking company under the ordinary law had become barred by time---Such extension however, was subjected to a sufficient cause to be shown by the plaintiff in this regard to the satisfaction of the court---If, however, the extension as prescribed by the law was not availed, the suit shall be out of limitation.

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

----Ss. 22(2) proviso & 25---Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), Preamble---Banking Tribunals Ordinance (LVIII of 1984), Preamble---Transfer of cases pending under Banking Companies (Recovery of Loans) Ordinance, 1979 and Banking Tribunals Ordinance, 1984 to courts established under Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997---Limitation---Revival of cause of action---Scope---"Past transactions" not past and closed transactions"---Provisions of S.22(2), Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 by no means give rise to any fresh cause of action for the "interest bearing loan" and therefore, no extension of limitation can be construed in this category of the cases i.e. those earlier covered under the jurisdiction of Banking Companies (Recovery of Loans) Ordinance, 1979 and there was no limitation provided for the suits falling in the purview of Banking Tribunals Ordinance, 1984 and under Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997---Limitation was being provided and enforced for the fresh institution, thus, with an obvious object and view to provide banking companies/institutions with the requisite period of time and in order to avoid the possibility that any suit under Banking Tribunals Ordinance, 1984 may not be claimed to have become time-barred, the proviso to S.22(2), Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 was added to ensure the noted protection---"Past transaction" did not mean the past and closed transaction", but only referred to the past transactions, which expression should be strictly construed in the context having nexus and the relevance to the Banking Tribunals Ordinance, 1984 alone---Section 22(2), proviso of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 in no manner and by no means had revived the limitation for the purposes of Banking Companies (Recovery of Loans) Ordinance, 1979 as 'fresh cause of action" shall not be deemed to have arisen for such cases that had become blatantly time-barred even under the said Ordinance---Suit, if only based upon S.22(2), proviso of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 would be barred by time.

Khalid Qureshi and 5 others v. United Bank Limited I.I. Chundrigar Road, Karachi 2001 SCMR 103 ref.

Emirates Bank International Ltd. v. Super Drive-In Ltd. and 8 others 1990 MLD 538; National Bank of Pakistan v. General Tractor and Machinery Co. Ltd. and another 1996 CLC 79; United Bank Limited v. Aftab Ahmad 1998 MLD 1744; First Women Bank Ltd. v. Mrs. Afifa Iftikhar and 2 others 2009 CLD 226; V. Somanath Raju and another v. Konchada Ramamurty Subudhi and others AIR 1957 Orissa 106 and Brojendro Kissore Roy Chowdhury v. Hindusthan Cooperative Insurance Society Ltd. AIR 1918 Cal. 707 distinguished.

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

----S. 22(2), proviso---Contract Act (IX of 1872), S.130---Limitation Act (IX of 1908), Arts.57, 115 & S.19---Suit for recovery of loan---Making of demand by the Bank---Contention of the plaintiff (Bank) was that the demand had been made to the defendants { and they had acknowledged their liability and had finally refused to discharge their liability a week before the filing of the suit, therefore, three years' time shall commence from the refusal---Validity---Held, on account of vital omissions and lapses on part of the plaintiff (Bank) to give the details and particulars of the demands so made to bring its case within the purview of Arts.57 or 115 of the Limitation Act, 1908 or S.130 or arty other provision of the Contract Act, 1872 rendered the plaintiff s case as barred by time---Principles.

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

----S. 22(2), proviso---Limitation Act (IX of 1908), Arts.57 & 115---Contentions of the respondents were that Letter of Guarantee would reveal that the status of respondents was not that of guarantors, rather same was of the principal debtors/obligators and therefore, the question of making of demand and their refusal would not have arisen at all; and that neither Art.57 nor 115, Limitation Act, 1908 was applicable to the present case as both related to different circumstances and situations---Validity---Where the guarantor had been described as principal debtor, the question of raising the demand against it was not relevant---Letter of Guarantee having revealed that guarantors were the Principal Debtors, resultantly the plea raised by the Bank that the demands had been made from them but they acknowledged etc., had no force.

Ms. Fashions Ltd. and others v. Bank of Credit and Commerce International SA (in liq) and others 1993 All England Law Reports 769 and Law of Guarantees by Geraldine Mary Andrews and Richard Millet quoted.

Mirza Muzaffar Ahmad for Appellant.

Salman Aslam Butt for Respondents.

Date of hearing: 29th June, 2009.

2009 C L D 1459

[Lahore]

Before Syed Hamid Ali Shah, J

UNITED BANK LIMITED---Plaintiff

Versus

NAEEM ULLAH MALIK and 2 others--Defendants

C.O.S. No.69 of 1999, decided on 15th April, 2009.

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

----S. 2(e)---Finance---Definition---Banker and customer---Relationship of---Suit for recovery of loan---Defendants shown as guarantors in the agreement had availed Clean Over Draft Facility, Loan Against Trust Receipt, Local Bill Discounted Letter of Credit, Payment Against Document and Letter of Guarantee---Such transactions pertained to "finance" as defined in S.2(e), Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 and created "Banker and Customer" relationship-Transactions inter se the parties and also the subject-matter of the agreement fell within the ambit of definition "finance" as defined in S.2(e) of the Act.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 2(a) & (7)---Banking Companies (Recovery of Loans, Advances, Credits and Finances), Act (XV of 1997), Ss.2(a) & 7---"Financial Institution"---"Banking Company"---Suit for recovery of loan---Plaintiff was a Banking company and transacted the banking business---"Financial Institution" which transacted banking business was the "Banking Company" within the meanings of S.2(a) of the Financial Institutions (Recovery of Finances) Ordinance, 2001-Plaintiff ff was banker and defendants were customers---Default of the defendants in payment of the outstanding amount was non fulfilment of obligation---Subject-matter, therefore, exclusively fell within the jurisdiction of Banking Court-No other court except Banking Court, constituted under S.7 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, had jurisdiction over the parties and the subject-matter.

(c) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 7---Suit for recovery of loan by Bank---Foreign Courts had decided the matter and held the defendant company and its Directors liable for the payment of amount due with interest---Territorial jurisdiction---Whether judgments of foreign courts were conclusive and binding---Plaintiff. on having established its claim against the defendants before court of first instance and also Appellate Court in the foreign country, filed suit under the provisions of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (now repealed) for the amount due and with interest in Pakistan currency of the equivalent value---Plaintiff had contended that High Court had the jurisdiction, over the matter and a decree on the basis of foreign decree/judgment could be passed---Validity---Foreign Court, in the present case, after considering whole evidence and after its due appraisal, had passed the decree---Said judgments were delivered by Court of competent jurisdiction, on merits of the case and founded on correct view of law .applicable---Judgments of the foreign courts did not breach any law in force in Pakistan and did not offend the principles of natural justice---Said judgments, were conclusive and binding---One of the defendants on his return from abroad was residing within the jurisdiction of High Court---Other defendants were also residing, working for gain and carrying the business within the jurisdiction of High Court--Plaintiff Bank had its regional office and relevant record of the present controversy had been summoned from abroad by the Plaintiff ff and the same was now in custody of the plaintiffs officials in its regional office---High Court having considered various aspects of the present controversy and having gone through the record had held that High Court had the jurisdiction over the subject-matter and the parties had territorial jurisdiction---Suit, in circumstances, was competently filed in the High Court and did not suffer from any jurisdictional flaw---Suit having been decreed and finding of High Court regarding the merits of the case were affirmed and upheld in appeal---Question of jurisdiction had been decided in favour of the plaintiff---Decree for the sum due in foreign country or the Pak Rupees equivalent thereof at the time of payment along with interest and other charges from the specified date till the date of realization of the whole amount was, therefore, passed against defendant, who would be jointly and severally liable for satisfaction of the decree, with other judgment-debtors---Costs of the suit and costs of funds were also allowed to the decree-holder/Bank---Failure of the defendants to satisfy the decree within a period of one month from the date of present order would result into execution of decree forthwith, without the need of a formal application for execution of the decree.

Messrs Kadir Motors (Regd.), Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others 1992 SCMR 1174 and T. Zubair Limited and 2 others v. Judge, Banking Court No.III, Lahore and another 2000 CLC 1405 ref.

Habib Bank Ltd. v. Messrs Virk House Trading company Ltd. 2009 CLD 451 fol.

Ali Zafar Syed for Plaintiff.

Defendants ex Parte.

Date of hearing: 6th June, 2008.

2009 C L D 1476

[Lahore]

Before Syed Hamid Ali Shah, J

Mst. FAYYAZI BEGUM and 6 others---Appellants

Versus

ALI HASSAN and another---Respondents

F.A.O. No.215 of 2007, decided on 13th May, 2009.

Contract Act (IX of 1872)---

----Ss.126, 131, 135 & 139---Surety bond---Death of surety before any direction or decree was passed for the recovery of the amount from the defendant---Effect---Such bond was the paramount document as rights and obligations of the surety, could be determined on the basis of surety bond alone---In the present case, surety bond had been furnished for the payment of the amount, which the court would determine against the defendant---No amount was determined against the defendant during the life time of the surety---Surety died before any direction or a decree was passed for the recovery of the amount from the defendant---Surety bond was to be construed strictly, according to the terms mentioned therein---Liability of the surety to pay on behalf of the principal debtor as per the surety bond arose only where the decree was passed or the defendant was directed to make payment of the amount---Neither the defendant was directed to pay any amount nor the decree against the defendant was passed during life time of the surety---Decree which was passed after the death of the surety, would neither bind the deceased surety nor his legal heirs---Principles.

Parvatibai v. Vinayak Balwant AIR 1939 Bom. 23; Narayan Ramchandra Bhagwat v. Markandya Tukaram and another AIR 1959 Bom. 516 and T.N. and Q Bank v. Official Assignee AIR 1940 Mad. 396 ref.

Sh. Umer Draz for Appellants.

Ch. Muhammad Anwar Ghumun for Respondents.

Date of hearing: 23rd April, 2099.

2009 C L D 1480

[Lahore]

Before Umar Ata Bandial and Muhammad Ashraf Bhatti, JJ

NASREEN BEGUM---Appellant

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another ---Respondents

R.F.A. No.71 of 2008, decided on 6th July, 2009.

Insurance Ordinance (XXXIX of 2000)---

---S. 80---Limitation Act (IX of 1908), Art.181--Appeal---Limitation---Appellant had sought relief from the Federal Ombudsman because Insurance. Tribunal had not been constituted until the notification thereof on 20-6-2006 and once the Tribunal was constituted the appellant approached the Insurance Tribunal---Time elapsed from the date of the appellant's cause of action in the year 2000 until the date she approached the Insurance Tribunal in the year 2006, was not to be counted against the appellant in circumstances--Application filed upon the constitution of the Insurance Tribunal would not be barred by limitation where the appellant had been agitating the matter before Federal Ombudsman---Principles.

State Life Insurance Corporation v. Nasim Begum R.F.A. No.104 of 2008; State Life Insurance Corporation v. Mst. Sadaqat Bano 2008 CLD 1069; R.F.A. No.54 of 2008 and R.F.A. No.70 of 2008 and Writ Petition No.7807 of 2002 ref.

Liaqat Ali Butt for Appellant.

Jehanzeb Khan Bharwana for Respondents.

2009 C L D 1490

[Lahore]

Before Muhammad Khalid Alvi and Mazhar Hussain Minhas, JJ

NASIR RASHEED CHAUDHRY---Appellant

Versus

HABIB BANK LTD. and 2 others---Respondents

F.A.O. No.314 of 2006, heard on 2nd July, 2009.

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

----Ss.9, 19 & 22---Civil Procedure Code (V of 1908), S.12(2)---Suit for recovery of loan---Execution of decree---Challenging decree on allegation of fraud and misrepresentation---Suit having been decreed, property mortgaged by the borrower was auctioned in execution of decree, which was successfully purchased by respondent and such sale was confirmed by the Executing Court and possession of the property was delivered to the respondent---Application filed by the appellant under S.12(2), C.P.C., challenging the decree had been dismissed---Validity---Appellant in his said application had merely mentioned that decree was based on fraud and misrepresentation---Necessary ingredients of fraud, if any, had not been pleaded nor the elements of misrepresentation had been mentioned in the application under S.12(2), C.P.C.---If fraud was alleged, its necessary ingredients must be pleaded, so as to subsequently prove the same---General and bald allegations of fraud and misrepresentation, could not form basis to upset a decree, otherwise validly passed by a Court of competent jurisdiction---No case for interference in the impugned order having been made out, appeal was dismissed.

Ch. Nadeem Ahmad for Appellant.

Waheed Mazhar for Respondent No.1.

Khalid Ishaq for Respondent No.3.

Date of hearing: 2nd July, 2009.

2009 C L D 1493

[Lahore]

Before Syed Hamid Ali Shah and M.A. Zafar, JJ

SME BANK LIMITED---Petitioner

Versus

MUHAMMAD MEHBOOB---Respondent

F.A.O. No.6 of 2008, decided on 20th October, 2008.

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

----Ss.21 & 22---West Pakistan Land Revenue Act (XVII of 1967), S.114---Peoples Finance Corporation Act ()OIX of 1972), S.22---Recoveries of dues as arrears of land revenue Authority of Bank---Scope---Authority of the Bank to recover it's dues as arrears of land revenue by invoking provisions of S.22 of Peoples' Finance Corporation Act, 1972 was not disputed---Bank had authority of recovering it's dues as arrears of land revenue, but that authority was not unfettered---Bank could resort to the provisions of West Pakistan Land Revenue Act, 1967 only when it's claim had been adjudicated as amount due---Bank, in exercise of recovering the amount due against its borrower, could not be ,equated with the power of judicial forum for the determination of the amount due---Summary power of recovery of the amount due, had been conferred on the Bank by law with a view to obviate cumbersome procedure of execution of decree as contained in O.XXI of Civil Procedure Code, 1908 and the Banking laws---Recovery of claims of a bank, without it's determination by the Court of competent jurisdiction had been held illegal---Appellants having proceeded for recovery of their claims in the absence of any proper judicial determination as to the amount due, Banking Court had rightly observed that appellants had arrested the respondent, without any valid authority---Appellants had proceeded under the provisions of West Pakistan Land Revenue Act, 1967 without serving upon the respondent, the notice of demand---Appellants had caused arrest of the respondent and he was lodged in jail without complying with mandatory requirements of provisions of West Pakistan Land Revenue Act, 1967 which act had offended the rights of the parties and also principles of natural justice---Bank had exercised its jurisdiction in excess and offended the fundamental rights of the respondent---Findings of the Banking Court that the arrest of the respondent under S.22 of Peoples' Finance Corporation Act, 1972 was illegal, was not open to exception---Judgment to that extent was devoid of any illegality or legal infirmity---Banking Court imposed penalty upon Bank, without any explanation and issuing any show-cause notice; it was primary responsibility of the Banking Court to pass the order keeping in view the principles of natural justice---Order passed by the Banking Court in violation of principles of natural justice, was not legally sustainable, which was set aside.

The Province of West Pakistan v. Muhammad Ayub Khuhro PLD 1967 Kar. 673; Agricultural Development Bank of Pakistan v. Sanaullah Khan and others PLD 1988 SC 67 and Agricultural Development Bank of Pakistan and another v. Abid Akhtar and others 2003 SCMR 1547 ref.

Abdul Bashir Qureshi for Appellants.

2009 C L D 1498

[Lahore]

Before Mian Saqib Nisar, J

LPG ASSOCIATION OF PAKISTAN through Chairman-Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Petroleum and Natural Resources, Islamabad and 8 others---Respondents

C.M. No.2202 of 2009 in Writ Petition No.9518, decided on 16th July, 2009.

(a) Constitution of Pakistan (1973)---

----Art. 199(1)(a)(i)(ii)---Constitutional petition---Territorial juris­diction/concurrent jurisdiction of High Court-Principles-Respondents sought return of the constitutional petition on the ground that under Art.199(1)(a) of the Constitution, Lahore High Court did not have the jurisdiction to entertain the petition, primarily for the reason that all. the respondents (except a pro forma respondent) functioned at Islamabad; impugned notice had also been issued there, and therefore, it was the Islamabad High Court which alone had the territorial jurisdiction in the matter---Law and principles on the point of territorial jurisdiction/ concurrent jurisdiction of High Court recapitulated with illustrations.

The following is the law and principles on the point of territorial jurisdiction/concurrent jurisdiction of High Court:--

(a) The Federal Government or any body politic or a corporation or a statutory authority having exclusive residence or location at Islamabad with no office at any other place in any of the Provinces, shall still be deemed to function all over the country.

(b) If such Government, body or authority passes any order or initiates an action at Islamabad, but it affects the "aggrieved party" at the place other than the Federal Capital, such party shall have a cause of action to agitate about his grievance within the territorial jurisdiction of the High Court in which said order/action has affected him.

(c) This shall be more so in cases where a party is aggrieved or a legislative instrument (including any rules, etc.) on the ground of its being ultra vires, because the cause to sue against that law shall accrue to a person at the place where his rights have been affected. For example, if a law is challenged on the ground that it is confiscatory in nature, violative of the fundamental rights to property; profession, association etc. and any curb has been placed upon such a right by a law enforced at Islamabad, besides there, it can also be challenged within the jurisdiction of the High Court, where the right is likely to be affected.

In this context, illustrations can be given, that if some duty/tax has been. imposed upon the withdrawal of the amounts by the account holders from their bank account and the aggrieved party is maintaining the account at Lahore, though the Act/law has been passed at Islamabad, yet his right being affected where he maintains the account (Lahore), he also can competently initiate a writ petition in Lahore besides Islamabad; this shall also be true for the violation of any right to profession, if being conducted by a person at Lahore, obviously in the situation, he shall have a right to seek the enforcement of his right in any of the two High Courts.

(d) On account of the above, both the Islamabad and Lahore High Courts shall have the concurrent jurisdiction in certain matters and it shall not be legally sound to hold that as the Federal Government etc. resides in Islamabad, and operates from there; and the assailed order/action has also emanated from Islamabad, therefore, it is only the Capital High Court which shall possess the jurisdiction. The dominant purpose in such a situation shall be irrelevant, rather on account of the rule of choice, the plaintiff/petitioner shall have the right to choose the forum of his convenience.

Sandalbar Enterprises (Pvt.) v. CBR PLD 1997 SC 334; Messrs Al-Iblagh Limited Lahore v. The Copyright Board Karachi and others 1985 SCMR 758; Mst. Sahida Maqsood v. President of Pakistan and another 2005 SCMR 1746; Dr. Zahoor Ahmed Shah v. Pakistan Medical and Dental Council through Secretary and another 2005 MLD 718; Dr. Qaiser Rashid v. Federal Secretary, Ministry of Foreign Affairs Government of Pakistan, Islamabad PLD 2006 Lah. 789; Messrs Ibrahim Fibres Ltd. through Secretary/Director Finance v. Federation of Pakistan through Secretary/Revenue Division and 3 others PLD 2009 Kar. 154; Abdul Ghaffar Lakhani v. Federal Government of Pakistan and 2 others PLD 1986 Kar. 525; Amin Textile Mills (Pvt.) Ltd. v. Islamic Republic of Pakistan 1998 SCMR 2389; Flying Kraft Paper Mills (Pvt.) Ltd. Charsada v. Central Board of Revenue, Islamabad and 2 others 1997 SCMR 1874; Sh. Abdul Sattar Lasi v. Federation of Pakistan through Secretary, Ministry of Law Justice and Parliamentary Affairs, Islamabad and 6 others 2006 CLD 18; Muhammad Idrees v. Government of Pakistan through Secretary, Establishment Division, Islamabad and 5 others 1998 PLC (C.S) 239; Messrs Lucky Cement Ltd. v. The Central Board of Revenue and others PLD 2001 Pesh. 7; Muhammad Aslam Khan and 9 others v. Federal Land Commission through its Chairman, Central Secretariat Islamabad and 3 others PLD 1976 Pesh. 66 and Trading Corporation of Pakistan (Private) Ltd. v. Pakistan Agro Forestry Corporation (Private) Ltd. and another 2000 SCMR 1703 ref.

(b) Show-cause---

----Show-cause notice---Show-cause' and show-cause notice' can be construed synonymous toshow-cause order'.

Black's Law Dictionary Eighth Edition ref.

(c) Competition Ordinance (LII of 2007)---

----S.30---Constitution of Pakistan (1973), Art.199---Constitutional petition---Territorial jurisdiction/concurrent jurisdiction of High Court---Scope---Petitioner Association had its Head Office at Lahore, most of its members were in Punjab, impugned notice was addressed to and received by the petitioner in Lahore--Respondents/authorities functioned at Islamabad---Show-cause notice issued by respondent/authority under S.30. of the Competition Ordinance, 2007 was of peculiar nature and shall seriously affect the person to whom it was issued and final order based thereupon could have far reaching adverse effects, therefore, the place it was sent, communicated, served and received had the relevance for the purposes of the concurrent jurisdiction---Held, both the Islamabad High Court and Lahore High Court had the concurrent jurisdiction in the matter, therefore, constitutional petition at Lahore had been competently filed.

(d) Words and phrases---

---Affect---Meanings.

Black's Law Dictionary, Deluxe Sixth Edition ref.

Aitzaz Ahsan, Uzair Karamat Bhandari and Shahid Saeed for Petitioner.

Muhammad Ahmad Qayyum and Asjad Saeed for Respondents Nos.3 and 5 to 8.

Basharat Qadir for Respondent No.4.

Dr. Parvez Hassan for Respondent No.9.

2009 C L D 1517

[Lahore]

Before Muhammad Ashraf Bhatti and S. Ali Hassan Rizvi, JJ

MUHAMMAD NAWAZ and 6 others---Appellants

Versus

BAQIR HUSSAIN---Respondent

Regular First Appeal No.15 of 2003, heard on 14th April, 2009.

(a) Negotiable Instruments Act (XXVI of 1881)---

---S.4---Stamp Act (II of 1899), S.2(5)--Civil Procedure Code (V of 1908), O.XXXVII, Rr.1, 2---"Promissory note" and "bond"---Distinction---Plaintiffs filed a suit on the basis of pro note and receipt pro note under O.XXXVII, Rr.1 & 2, C.P.C.---Trial Court dismissed suit of the plaintiffs on the basis that pro note and receipt pro note were not attested by two witnesses--Promissory note was a promise or an undertaking with no conditions attached therewith, duly made by its maker to pay a certain amount on demand on a certain future date to another person or bearer of the said promissory note---If it was signed by a witness and not payable to a bearer, it became a 'bond'---Trial Court had erred in law in arriving at its findings as to the requirements of two attesting witnesses of promissory note.

Aamer Tufail v. Muhammad Sadiq 2006 CLD 91 rel.

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

----S.4---Civil Procedure Code (V of 1908), O.XXXVII, Rr.1 & 2---Promissory note---Non-payment of consideration---Effect---Plaintiffs filed a suit on the basis of pro note and receipt pro note under O.XXXVII, Rr.1 & 2, C.P.C.---Trial Court dismissed suit of the plaintiffs on the basis that neither pro note, receipt pro note and Iqrar Nama (agreement) were attested by two witnesses nor consideration thereunder stood proved on record---While getting a promissory note executed, the parties allegedly entered into a separate agreement reference of which was given in the pro note and receipt pro note which related to consideration---Agreement was not attested by any/witness and merely on its margin the words in vernacular were specifically written with some understanding that witnesses shall later sign it which did not happen---Record revealed that no consideration was paid under the promissory note---High Court declined to interfere in the impugned judgment of the Trial Court.

Mst. Sughran Begum and 11 others v. Haji Mir Qadir Bakhsh and 2 others PLD 1986 Quetta 232 rel.

Ch. Shaukat Ali Saqib for Appellants.

Allah Wasaya Malik for Respondent.

Date of hearing: 14th April, 2009.

2009 C L D 1537

[Lahore]

Before Ijaz Ahmad Chaudhry, J

FOUZIA BEGUM---Petitioner

Versus

GOVERNMENT OF PAKISTAN Through Secretary, Ministry of Finance, Islamabad and 7 others ---Respondents

Writ Petition No.6005 of 2007, decided on 19th May, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss. 282-E & 282-F---National Accountability Ordinance (XVIII of 1999), S.19---Constitution of Pakistan (1973), Art.199---Constitutional petition---Allegations of fraud committed by a Bank---Contention of the petitioner, a depositor of the Bank, was that matter of illegalities and irregularities committed by the Management of the Bank be referred to National Accountability Bureau for holding inquiry against Chief Executive and Directors of the bank in public interest and to safeguard the interest of creditors---Validity---National Accountability Bureau had no power to deal with the matter of financial institutions and even that could not be done without the permission of the State Bank of Pakistan---High Court, in peculiar circumstances of the case, and feeling that the business of the Bank might not be spoiled as the Bank in question had been purchased by a foreign company which had invested huge amount for redressal of grievance of the depositors including the petitioner, declined to issue any direction to the National Accountability Bureau, when so far there was no charge against the subsequent purchaser of the Bank---High Court observed that court would not pass the order which could spoil the business of any establishment working in a lawful manner however, petitioner could approach the authorities for the redressal of her grievance---Constitutional petition was dismissed.

Chaudhry Fawad Ahmed for Petitioner.

Muhammad Saqlain Arshed for Respondents Nos.3 and 8.

Ahmer Bilal Sufi for Respondent No.4.

Jawad Hassan for Respondent No.9.

Muhammad Amin, Officer-I, State Bank of Pakistan.

2009 C L D 1650

[Lahore]

Before Mian Saqib Nisar and Imtiaz Rasheed Siddiqui, JJ

ALLIED BANK LIMITED through Attorneys---Appellant

Versus

Messrs NAEEM ASSOCIATES through Sole Proprietor and 6 others---Respondents

Regular First Appeal No. 367 of 2008, heard 3rd March, 2009.

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

----Ss.9 & 22---Civil Procedure Code (V of 1908), O.XVII, R.3---Suit for recovery of loan---Closing of evidence---Evidence of the plaintiff was closed by the Trial Court and suit was dismissed on the ground that the plaintiff had failed to produce evidence and to cause the attendance of witnesses---Case was not adjourned upon the request of the plaintiff but it was a routine adjournment---Order sheet established that most of the adjournments in the matter were granted for the reason that the parties sought adjournments for an outside court settlement---Penal provisions of O.XVII, R.3, C.P.C., which had to be strictly construed and applied, were inapplicable to the matter in question---Judgment and decree of the Banking Court was set aside and case was remanded to the Banking Court for adjudication afresh by providing two opportunities to the Bank for producing its complete evidence.

Sayed Fazal Mahmood for Appellant.

Shahid Ikram Siddiqui and Syed Shahid Ali Shah for Respondents.

Date of hearing: 3rd March, 2009.

2009 C L D 1656

[Lahore]

Before Mian Saqib Nisar and Ali Akbar Qureshi, JJ

UNION BANK LTD. through Attorney---Appellant

Versus

Messrs B.R.R. INTERNATIONAL MODARABA and 8 others---Respondents

R.F.A. No. 342 of 2004, decided on 12th May, 2009.

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

----Ss.9, 10, 22 & 24---Suit for recovery of loan---Limitation---Application for leave to appear and defend suit---Lease finance from Modaraba Company---Guarantee was issued by the Bank assuring that in case of default by debtors, it would discharge the liability---Default having been committed by debtors, suit was filed against them as also the Bank/guarantor--Application for leave to appear and defend, by the Bank was dismissed by the Trial Court and suit was decreed against all the debtors including the Bank---Guarantee issued by the Bank had expired and suit as claimed was time-barred---Counsel for the Modarba Company had submitted that as per the provision of S.24 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the suit could be instituted even after the expiry of limitation, when a sufficient cause was shown---Modarba Company, in its plaint had not mentioned the circumstances constituting the sufficient cause, besides that as per the provisions of O.VII, R6, C.P.C. ground of exemption of limitation had to be mentioned in the plaint---Question of limitation was considered to be a substantial question of fact and law, entitling the defendants/ debtors to the grant of leave---Impugned judgment and decree was set aside and case was remanded to the court below to frame appropriate issues on the basis of the pleadings of the parties and decide the case afresh.

Kh. Aamir Farooq for Appellant.

Abdul Hameed Chohan for Respondent.

2009 C L D 1662

[Lahore]

Before Syed Hamid Ali Shah, J

PAKISTAN INDUSTRIAL LEASING CORPORATION---Applicant

Versus

SUNRISE TEXTILE MILLS---Respondent

C.O. No.10 of 1995 and C.M. No.488-L of 2008, decided on 10th April, 2009.

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

----Ss.297, 316 & 318---Winding up of company---Object and consequences---Winding up, meaning of---"Winding up" was a term used for proceedings by which a company was dissolved---Such process was also called as "liquidation proceedings"---Assets of the company in winding up proceedings were disposed of, debt was realized and the liability of the company towards its creditors was paid up, out of realized assets---Surplus, if any, was distributed to the members and contributory proportionately---Winding up was a legal process by which an incorporated company was brought to an end---Consequences of winding up order were that all the assets of the company would come under the control of the court and management of the company would vest with liquidator instead of Directors and the Chief Executive of the company---Transfer and disposition of property of the company by anyone, except the liquidator, was prohibited and the law would render any such transaction as void---After the winding up order had been passed, no suit or proceedings could commence against the company, except with the leave of the court---Court (Company Judge) where the winding up proceedings were pending, had the jurisdiction,, within the contemplation of S.316 of the Companies Ordinance, 1984 to entertain and dispose of any suit or proceedings, by and against the company---Even pending proceedings by and against the company would stand transferred to the company court---Object of S.316 of the Companies Ordinance, 1984 was to accelerate disposal of winding up proceedings, cheap and summary remedy in respect of claims for and against the company; and to save unnecessary litigation---Provisions of Companies Ordinance, 1984 were special and would prevail over other laws---Company court would exercise a wide jurisdiction, over all matters relating to the company in the process of winding up---Matters relating to a company in winding up, were to be adjudicated before one court and the wisdom behind that provision was that company should be dissolved finally without complication.

(b) Companies Ordinance (XLVII of I984)---

----Ss.316, 319 & 320---National Accountability Ordinance (XVIII of 1999), S.25-A---Stay of winding up proceedings--Application for---Applicant had sought stay of winding up/proceedings till final decision of Reference under S.25-A of the National Accountability Ordinance, 1999---Such course was not legally permissible as same would offend the provisions of company law, especially S.316 of the Companies Ordinance, 1984---Winding up proceedings being pending in the present case since 1995, any delay would unfairly prejudice the rights of creditors---Section 320 of the Companies Ordinance, 1984 required that regards had to be given to wishes of the creditors.

Mian Nisar Ahmad for Appellant.

Ejaz-ul-Ehsan for Advocate.

Kh. Muhammad Farooq for Respondent.

2009 C L D 1666

[Lahore]

Before Khawaja Farooq Saeed and Muhammad Khalid Alvi, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another ---Appellants

Versus

RAZI -UR-REHMAN---Respondent

R.F.A. No.434 of 2008, heard on 5th May, 2009.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 79, 80 & 118---Suit by legal heir (nominee) of insurer for recovery of policy proceeds and liquidated damages---Commencement of insurance policy on 16-11-1991 and its discontinuation on 25-11-1997 for non-payment of premium---Revival of policy on 20-2-2001 on payment of arrears by insurer---Death of insurer due to ailment on 18-5-2003 i.e. after two years and three months from revival of policy---Denial of plaintiffs claim by Insurance Company for having concealed ailment of insurer at the time of purchasing and revival of policy---Plea of Company that as per medical certificate produced by plaintiff insurer was patient of hypertension, diabetes and mellitus---Validity---Law did not permit for an inquiry after signing of insurance contract and its approval by Company---Subsequent actions like deposit of insurance premium and revival of policy were continuation of such contract---Company could challenge such contract within two years of its commencement in terms of S.80 of Insurance Ordinance, 2000---Death of insurer was beyond period of two years even after revival of policy---Such ailment of insurer could not be called as exceptional reasons---Majority of people having such ailments by remaining more careful in their life time lived either for decades or longer than people not having such diseases---Concealment of such diseases could not be termed as done fraudulently ---Company at the time of insurance must have satisfied itself and should have got insurer medically checked up to its satisfaction---If Company succeeded in establishing that insurer was unwell at the time of revival, then cut-of time of two years during which same could be challenged had already expired---Such plea of company was repelled in circumstances.

Mian Naser Ahmed for Appellants.

Liaquat Ali Butt for Respondent.

Date of hearing: 5th May, 2009.

2009 C L D 1671

[Lahore]

Before Syed Hamid Ali Shah, J

Messrs TAUNSA GYPSUM (PVT.) LTD---Plaintiff

Versus

HABIB BANK LTD.---Defendant

COS No. 33 of 1999, decided on 28th January, 2008.

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

----S.9-Specific Relief Act (I of 1877), Ss. 42 & 55---Limitation Act (IX of 1908), Ss. 2(7), 9, 14, Arts. 32 & 120---Civil Procedure Code (V of 1908), S.10---Suit for declaration, mandatory injunction and recovery of amount as compensation/damages--Limitation---Adjustment of outstanding loan amount by Bank through debit entries made from account of borrower-plaintiff maintained with Bank---Plaintiff filed suit on 25-2-1998 after coming to know on 3-3-1994 about debit entries, dated 8-7-1993 and 12-7-1993---Plaint amended by plaintiff resulted in its return on 31-3-1999 by Banking Court for lacking jurisdiction and was re-presented in High Court on 19-4-1999---Validity---Suit presented in Court lacking jurisdiction would neither be "suit" nor "proceeding in the suit"---Plaint on its return re-presented in Court of competent jurisdiction would be a fresh suit, thus, period of limitation would be computed from date of accrual of cause of action till its re-filing in Court of competent jurisdiction---Plaintiff had amended plaint when period of limitation was about to expire---Plaint was represented in High Court when time for filing suit had already expired---Starting point of limitation was the date on which such adjustment was made---Period of limitation once begun to run would not stop due to subsequent disability or inability to sue--Plaintiff had not sought benefit of S.14 of Limitation Act, 1908 nor was same available to him as element of good faith was lacking---Suit regarding declaratory relief had not been filed within six years from date of such adjustment or date of its knowledge---Plaintiff could challenge such adjustment from his account within two years of his knowledge thereof---Period of limitation for compensation for breach of contract being three years, suit on all three causes of actions had become barred by time on date of re-presentation of its plaint in the High Court-Suit was dismissed for being time barred in circumstances.

Habib Bank Limited v. Messrs Qayyum Spinning Ltd." 2001 MLD 1351; Mst. Nur Jehan Begum through Legal Representative v. Syed Mujtaba Ali Naqvi 1991 SCMR 2300; Faisal Bank through duly appointed Attorney v. Messrs Zimindara Rice Mills and 21 others 2007 CLD 1164; Messrs Muhammad Siddiq, Muhammad Umar and another v. The Australasia Bank Limited PLD 1966 SC 684; Messrs Continental Syndicate of Trade v. Lloyds Bank Limited PLD 1966 Kar. 556; Central Bank of India v. Syed Muhammad Abdul Jalil Shah 1999 CLC 671; Muhammad Sharif and 3 others v. Mahla through Legal Representative and others 2007 MLD 547; Mst. Munira Rafique Anwar through Legal Representatives v. Khalid Javed Anwar and others PLD 2005 Lah. 662; Sindhi v. Ashiq All and 10 others 2005 YLR 2994; 2000 YLR 2645; Muhammad Jan v. The State 2000 YLR 2094; Eada Khan v. Mst. Ghanwar and others 2004 SCMR 1524; Muhammad and 9 others v. Hasham Ali PLD 2003 SC 271; Muhammad Akram alias Raja v. Muhammad Ishaque 2004 SCIVIR `1130;. PLD 1959 W.P. Kar. 348 and Umar v. S.A. Rana PLD 1957 W. P. 760 ref.

Hawa Bai and 6 others v. Abdus Shakoor and. 8 others PLD 181 Kar. 277 rel.

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

----O. VII, R.10---Representation of plaint before competent Court after its return from Court lacking jurisdiction would be a fresh suit and not continuation of former suit---Period of limitation in such case would be computed from date of accrual of cause of action till filing of suit in Court of competent jurisdiction---Principles.

When the plaint after its return from the Court not having jurisdiction is re-presented before the Court having` jurisdiction, the suit will not be continuation of earlier suit. Suit presented to a Court lacking jurisdiction in the matter is neither a "suit" nor "proceedings in the suit". The Court to which such plaint is presented, cannot adjudicate upon the merits of the case nor can it give any, relief to the plaintiff. To treat a plaint a suit, the plaintiff has to show that it is properly stamped and presented before the Court which has the jurisdiction over the parties, subject matter and the territorial jurisdiction. The Court has to see that subject matter of suit is not barred under any law. The absence or presence of these ingredients may result either in return or rejection of the plaint.

The plaint, on its return is represented in the Court of competent jurisdiction is a fresh suit. The period of limitation will be computed from the date of accrual of cause of action till filing of the suit in Court of competent jurisdiction.

Hawa Bai and 6 others v. Abdus Shakoor and 8 others PLD 181 Kar. 277 rel.

(c) Limitation Act (IX of 1908)---

----S.9---Limitation once begun to run, then no subsequent disability or inability to sue could stop the same---Principles.

Once the limitation has begun to run, no subsequent disability or inability to sue stops it. Provisions of section 9 of the Limitation Act, 1908 clearly provide that limitation once commences, it would continue to run, unless the case falls within any exceptions provided for limitation.

(d) Limitation Act (IX of 1908)---

----Ss. 2(7) & 14---Benefit of S.14 of Limitation Act, 1908 could be sought by a party through an application to Court, but not otherwise---Principles.

Time consumed in prosecuting another civil proceedings with due diligence can be excluded in computing the period of limitation, where the proceedings are prosecuted in good faith. The plaintiff has to move an application to seek benefits under section 14 of the Limitation Act, 1908. The Court by itself cannot ascertain that proceedings founded upon the same cause of action or the same relief before the Court having no jurisdiction, were prosecuted in good faith. To establish "good faith", its narration is essential requirement and that purposes can be achieved through filing of an application. Moving for amendment at the fag end of the period of limitation cannot be termed as an act .in good faith. "Good faith" as defined in section 2(7) of the Limitation Act, 1908 excludes everything from the purview of good faith, which is not done with due care and attention. What is done without due care and attention cannot be termed to be done in goof faith.

Sajid Mehmood Sheikh for Plaintiff.

Muhammad Khalid Mehmood Khan for Defendant.

2009 C L D 1682

[Lahore]

Before Iqbal Hameed-ur-Rehman, J

Messrs HUDAYBIA TEXTILES MILLS LTD. through Chief Executive---Petitioner

Versus

Messrs ZULFIQAR ASSOCIATES LTD. and others---Respondents

C.M.A. No.64-B of 2005 in Ex. A. No.2-B of 2005, decided on 18 May, 2009.

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

----S.18---Civil Procedure Code (V of 1908), S.152 & O.XXI, R.94---Execution proceedings---Petition for correction of sale certificate---Petitioner's plea was that due to typographical mistake, word "sale" instead of word "lease" had been written in sale certificate and auction-purchaser was transferred only lease hold rights, but not proprietary rights, thus, auctioned property was liable to be reverted to its original owner after expiry of lease period---Validity---Earlier application for annulment of confirmation of auction accepted by Executing Court was rejected by High Court in appeal, whereagainst petition for leave to appeal and review petition filed before Supreme Court were dismissed---High Court in its order had observed that no objection regarding ownership of property had been taken earlier during trial of suit or before Executing Court---Property auctioned belonged to petitioner, thus, there was no mistake in sale certificate---Such matter had attained finality and could not be reopened after 21/22 years---Execution proceedings were pending before Banking Court at place "F"---High Court had become functus officio and had no jurisdiction to entertain such petition, which was dismissed in circumstances.

Syed Saadi Jafri Zainabi v. Land Acquisition Collector and Assistant Commissioner PLD 1992 SC 472; Muhammad Shahzad v. Khairati Khan and others 1989 SCMR 189; Zari Tariqiati Bank Ltd. through Branch Manager v. Hassan Aftab Fatiana 2009 CLD 36 and Bank Alfalah Ltd. v. Messrs Bilal Spinning Mills Ltd. 2005 CLD 206 ref.

Miss Alia Ejaz for Petitioner.

Imran Muhammad Sarwar for Respondent.

Muhammad Suleman auction-purchaser.

C L D 2009 1242

[Lahore]

Before Mian Saqib Nisar and Ali Akbar Qureshi, JJ

ALL PAKISTAN TEXTILE MILLS ASSOCIATION through Secretary---Appellant

Versus

FEDERATION OF PAKISTAN through Secretary Commerce, Ministry of Commerce, Islamabad and 2 others---Respondents

I.C.A. No.549 of 2008, heard on 13th May, 2009.

(a) Constitution of Pakistan (1973)---

----Art. 199---Civil Procedure Code (V of 1908), O.VII, R.7---Constitutional petition---Moulding of relief---Theory of subsequent event--Applicability---Scope---Court seized of a matter, which is competent and maintainable before it, can always mould the relief as is warranted by the facts of the case, even taking into account the subsequent developments occurring during the pendency of the its---Such rule, however, is subject to important limitations; that no prejudice is caused to the defendant/respondent by doing so; such events must have nexus with the cause of action or the defence of the case and should not amount to setting up a new case by the parties; either side must get a chance of meeting the effect of the subsequent events, which, in ordinary course should be incorporated by appropriate amendment of the pleadings.

Ch. Riyasat Ali, Advocate v. Returning Officer and 2 others 2003 CLC 1730; Capt. S.M. Aslam and others v. Karachi Building Control Authority through Chief Executive Nazim-e-Aala and others 2005 CLC 759; Mehrab Khan through Attorney v. Province of Sindh through Secretary, Irrigation and Power . Department, Government of Sindh and 5 others 2005 CLC 441; Ardeshir Cowasjee v. Province of Sindh 2002 CLC 684; Marghub Siddiqi v. Hamid Ahmad Khan and 2 others 1974 SCMR 519 and Salahuddin and 2 others v. Fronteir Sugar Mills and Distillery Ltd. Tokht Bhai and 10 others PLD 1975 SC 244 ref.

(b) Constitution of Pakistan (1973)---

----Art. 199---Constitutional petition---Theory of subsequent event, applicability of---Moulding of relief---Scope---Vires of specific order of the Commission had not been challenged in the constitutional petition, rather no ground, at all, had been set out on the basis of which it could, especially by the court, be ascertained, assessed, determined and adjudicated as to what was the illegality or vices (legal or factual) of the Commission's' order, not only the court shall be in disadvantageous position to examine the order in this behalf, even the respondent shall not be in a position to defend the case on the basis of the present pleadings.

(c) Maxim---

---Ubi jus ibi remedium---Lex semper dab it remedium---No concept of a wrong without a remedy---Principles.

According to the maxim ubi jus ibi remedium there is no concept of a wrong without a remedy and the "remedium" may be defined to be the right of action, or the means given by law, for the recovery or assertion of a right; besides, in view of another maxim lex semper dabit remedium, if a man has a right, he must have means to vindicate and maintain it, and should have a remedy if he is injured in the exercise and enjoyment of it; and indeed, it is a vain thing to imagine a right without a remedy, for want of right and want of remedy are reciprocal, thus, it appears, that "remedium" in the above maxims has a more extended signification than the word "action" in its modern sense and an "action" is, in fact, one peculiar mode pointed out by the law for enforcing a remedy, or for prosecuting a claim or demand in the court of law.

Broom's Legal Maxims 10th Edn. P.118 ref.

(d) Constitution of Pakistan (1973)---

----Art. 199---Anti-Dumping Duties Ordinance (LXV of 2000), S.64(5)---Non-establishment of Appellate Tribunal by Federal Government under S.64 of Anti-Dumping Duties Ordinance, 2000---Remedy---Maxims ubi jus ibi remedium and lex semper debit remedium---Applicability---In the present case, Association of Textile Manufacturers, subject to its locus standi undoubtedly had a right of appeal under the statute, which was the most sacred right, however, if for any reason the forum of appeal had not been established enabling the exercise of such valuable right, the right, could not be allowed to be frustrated or stultified, for the lapse on part of the Federal Government as it was the fundamental principle of law that the rights and the remedies of the parties could not be left in vacuum, thus, in the situation the Association (Subject to its locus standi) shall have an independent right to challenge any such order under Art.199 of the Constitution, if it had been passed by a forum which could be construed to be a forum against which a writ of certiorari would lie, otherwise before the courts of plenary civil jurisdiction under S.9, C.P.C.

(e) Constitution of Pakistan (1973)---

----Art. 199(4), (4-A)---Constitutional jurisdiction---Interim injunction, grant of---Scope---Provisions of Art.199(4) or (4-A) of the Constitution would only be relevant, if a case for the grant of interim injunction is made out on the basis of the contents of the main petition---Where, however, the statutory body was not under challenge in the petition, how could the interim injunction beyond the scope of pleadings be granted against the said body even ignoring the rule that Civil Procedure Code was applicable to the proceedings under Constitutional jurisdiction.

Hussain Bakhsh v. Settlement Commissioner, Rawalpindi and others PLD 1970 SC 1 and Marghub Siddiqi v. Hamid Ahmad Khan and 2 others 1974 SCMR 519 ref.

(f) Anti-Dumping Duties Ordinance (LXV of 2000)---

----S. 64---Constitution of Pakistan (1973), Art.199---Constitutional petition---Cause of action and entire structure of the case was rested upon one single grievance i.e. for the constitution of the Appellate Tribunal within the parameters of S.64, Anti-Dumping Duties Ordinance, 2000 which could not be granted particularly when the Bill for amendment of the same section of the Ordinance had been approved by the Standing Committee and also for the reason that as per the decision of the National Judicial Policy Making Committee dated 18/19-4-2009, may be the retired Judge of the Supreme Court could not be appointed as the Chairman of the Appellate Tribunal---If any such direction was given by the High Court, it shall be difficult to cope with and reverse a situation, which might emerge on account of the amendment.

Majid Ali Wajid for Appellant.

Ch. Aamir Rehman, D.A.G., Muhammad Nawaz Waseer, Standing Counsel, Shahzad A. Elahi and Ahmed Sheraz for Respondents.

Date of hearing: 13th May, 2009.

2009 C L D 427

[Peshawar]

Before Syed Yahya Zahid Gillani and Muhammad Alam Khan, JJ

Dr. QAMAR ZAMAN KHAN---Appellant

Versus

MUJEEB-UR-REHMAN SHAMI, CHIEF EDITOR DAILY PAKISTAN ISLAMABAD and 18 others----Respondents

R.F.A. No.7 of 2004, decided on 14th February 2008.

Tort--

----Allegation of plaints a doctor, was that news item published by the defendant, lowered him down in the estimate of the general public---Suit for recovery of damages on the ground that a student was brought, in injured condition in the Hospital of which plaintiff was Medical Officer, for treatment who was treated by the plaintiff and other staff---Full treatment was given to the patient, but inspite of that defendants published two items in their newspapers in which certain baseless and uncalled for accusations were levelled against the plaintiffs and the other staff members; it was reported in the news items that the staff of the hospital was not on duty, the hospital rooms were locked and the patient was not properly treated---Plaintiff asserted that said news had lowered him down in the estimate of the general public---Trial Court dismissed the suit of the plaintiff-Validity--Plaintiff had to establish the ill-will and malice on the part of the defendants, but entire evidence was silent in that respect---Nothing was brought on record that the alleged action was either libellous or was based on ill-will---For an action for damages, the plaintiff had to prove the good reputation and the alleged action damaging that reputation, which onus had not been discharged by the plaintiff---Statement of injured student was of immense importance as according to his statement when he was brought to the Hospital neither the Doctor nor the other staff was on duty and on repeated calls by the relatives of the patient the duty Doctor came very late---Said statement of the injured student was the base for publication of the news items and same was not based on any ill-will or mala fide intention, but were fair comments on the prevailing situation in the hospitals---Impugned judgment of the Trial Court was just, legal and in consonance with the established principles of appreciation of evidence, which called for no interference and same was maintained.

Abdul Ghafoor v. Syed Jawed Hussain Jaffrey and another PLD 2006 Kar. 691; Altaf Gauhar v. Wajid Shamsul Hasan and another PLD 1981 Kar. 515; Muhammad Ismail v. Dr. Muhammad Afzal Mirza 1999 CLC 958; Sheikh Muhammad Rashid v. Majid Nizami, Editor-in-Chief, The Nation and Nawa­-e-Waqat, Lahore and another PLD 2002 SC 514; and Messrs Chapal Builders v. Editor Daily Dawn and others 2004 CLC 344 ref.

Illauddin Attorney for Appellant.

Fazlur Rehman Clerk of Counsel for Respondents.

Date of hearing: 14th February, 2008.

2009 C L D 56

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

BESTWAY CEMENT LIMITED: In the matter of

Show-Cause Notice No.EMD/233/368/2002-3506-12, dated 2nd April, 2008, decided on 9th September, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss. 160, 208, 476 & 506---Purchasing shares of associated company in contravention of provisions of law---Imposition of penalty---Examination of the annual audited accounts of the company for the relevant year had revealed that Company had purchased 15,193 shares of associated company without approval of shareholders---Company also advanced an amount of Rs.209 million to said associated company against issue of right shares subsequent approval of which was obtained from the shareholders---Said advance was made in contravention of S.208 of the Companies Ordinance, 1984. which required that the investment in associated company should be made under authority of a special resolution, but no copy of said special resolution was filed---Contention that purchase of shares of associated company in small numbers would not attract provisions of S.208 of the Companies Ordinance, 1984, was not cogent---Law did not 'allow any such exception---Investment in associates, irrespective of the amount of investment could be made, but it should be made with the approval of the shareholders under S.208 of the Companies Ordinance, 1984--Provision of Ss.208, 160 & 506 of the Companies Ordinance, 1984 had been violated in the case; however, considering the amount of equity investment and the fact that shares against the advance had already been issued, taking a lenient view, instead of imposing maximum penalty under S.208 of the Companies Ordinance, 1984, a fine of Rs. 20,000 on each Director and Chief Executive of the company was imposed and to recover interest on advance of Rs.209 million at the rate not less than the weighted average cost of the company.

Gharibwal Cement's case SECP 2003 CLD 131 rel.

M. Javed Panni, Counsel for the Directors Present.

M. Mussadiq Ali Khan, Financial Controller Present.

2009 C L D 61

[Securities and Exchange Commission of Pakistan]

Before Ali Azeem Ikram, Director (Enforcement)

EX-CHIEF EXECUTIVE OF DANDOT CEMENT COMPANY LIMITED: In the matter of

Show-Cause Notice No.EMD/233/373/2002-3846, dated 30th April, 2008, decided on 9th September, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss. 227, 229, 476 & 495---Failure to transfer regular provident fund contribution to provident fund trust---Imposition of penalty---In terms of provisions of S.227 of the Companies Ordinance, 1984, the company was required to pay the provident fund contribution to provident fund trust within 15 days of collection---Company was also required to pay previous liabilities of provident fund---Examination of the annual audited accounts of the company for the relevant year had revealed that the Auditors of the company had qualified their report on the accounts for the company's failure to transfer current provident fund contribution and past dues to provident fund trust within the stipulated time---Mandatory provisions of Ss.227 & 495 of the Companies Ordinance, 1984 had been breached attracting the penal provisions of Ss.229 & 495 of the Companies Ordinance, 1984--Action therefore was necessary under said provisions of the Companies Ordinance, 1984---Considering the default and circumstance of the case, lenient view was taken and instead of imposing the maximum penalty, a fine of Rs.5,000 under S.229 of the Companies Ordinance, 1984 and Rs.15,000 under S.495 of said Ordinance was imposed on Ex-Chief Executive of the Company.

Iqbal A Rizvi, FCA Authorized Representative Present.

2009 C L D 65

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

AL-ABID SILK MILLS LIMITED: In the matter of

Show-Cause Notice No. EMD/233/299/2002-3984-92, dated 15th May, 2008, decided on 7th October, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss. 196, 208, 473 & 476---Making investment in associated company unauthorisedly and in violation of law---Imposition of penalty---Company made contract with the associated private company---Board of Directors of the company did not pass any resolution allowing the company to enter into agreement of sale, purchase or acquiring services from said associated private company---Board of Directors of the company was bound to pass resolution in accordance with S.196 of the Companies Ordinance, 1984, while entering into agreement with said associated private company---Company transferred the machinery costing more than ten million rupees to said associated private company on one hand and on the other without any return on such investment contrary to the requirements of S.208 of the Companies Ordinance, 1984---Said associated private company through such an arrangement was benefited which got assets free of costs and free of interest and depreciation expenses---Associated private company was also getting business from the company without fear of future competition---Common Directors of the associated private company were the ultimate beneficiaries of said transaction and the shareholders of the company were on the losing side getting no return on such investment---Merely emphasizing that the company gained numerous advantages from such transfer of machinery, would not relieve' the Company to obtain the mandatory shareholder's resolution in terms of S.208 of Companies Ordinance, 1984---Provisions of Ss.196 & 208 of Companies Ordinance, 1984, had been violated by the Directors of the company---Directors of the company having violated the mandatory provisions of law, fine of Rs.3, 200, 000 had been imposed on the Directors accordingly.

Raheel Butt, Associate of Mohsin Tayebaly & Company, Karachi Present.

2009 C L D 76

[Securities and Exchange Commission of Pakistan]

Before Tariq Bakhtawar, Director (Enforcement)

Messrs TRANSMISSION ENGINEERING INDUSTRIES LTD.: In the matter of

Show-Cause Notice Nc.EMD/233/432/2002/2435-2442, dated 18th December, 2007, decided on 21st July, 2008.

Companies Ordinance, (XLVII of 1984)---

----Ss. 226, 227, 229 & 476---Utilizing funds of the Provident Fund Trust in violation of mandatory provisions of law--Imposition of the penalty---Company had failed to comply with the mandatory provisions of the Companies Ordinance, 1984 by utilizing the money of the Provident Fund Trust---Company had not been making any payments to Provident Fund Trust in blatant violation of S.227 of the Companies Ordinance, 1984---Company had not kept the moneys received in a special account with a scheduled Bank in violation of S.226 of the Companies Ordinance, 1984---Law did not permit any company to utilize the funds of Provident Fund for its commercial purposes---Company and its Directors had breathed the mandatory requirements of Ss.226 & 227 of the Companies Ordinance, 1984---Object of said provisions of law was to secure the amount collected from the employees of the company as contributions to a Provident Fund for the benefits of the employees of the company through the mechanism of trustees---Law required that all moneys contributed by the employees as well as the company's contribution, if any, including the profit thereon, must be deposited within fifteen days of the contribution and that amount was invested in securities, but company had failed to do so---Company having admitted its default, action against the company was necessary under S.229 of the Companies Ordinance, 1984---Fine of Rs.5,000 was imposed on the Chief Executive of the Company---Other Directors of the company were reprimanded to be careful in future.

Riaz Ahmed Chughtai, Company Secretary Present.

2009 C L D 90

[Securities and Exchange Commission of Pakistan]

Before Tariq Bakhtawar, Director (Enforcement)

Messrs FLYING CEMENT COMPANY LTD.: In the matter of

Show-Cause Notice No.EMD/C.O.258/ 119/2007, dated 10th July, 2008, decided on 21st July, 2008.

Companies Ordinance, (XLVII of 1984)---

----Ss. 258, 259 & 476---Companies (Audit of Cost Accounts) Rules, 1998, Rr.3, 4 & 5--Appointment of cost auditor---Application for---Delay in filing application---Imposition of penalty---In terms of provisions of Rule 3(2) of Companies (Audit of Cost Accounts) Rules, 1998, the Directors of the company were required to appoint cost auditor for the relevant year within sixty days of the close of financial year of the company, but company filed application in that respect with a delay of 48 days---In the terms of R.4(3) of Companies (Audit of Cost Accounts) Rules, 1998, report was required to be submitted to the Commission within sixty days of the appointment of cost auditor, but same was received with a delay of 177 days---Authorized representative of the Chief Executive and Directors of the company, admitted the default and stated that it was their first year of listing and the company had to comply with additional requirements of law and that the management of the affairs of the company, being new, took additional time and resultantly cost audit was delayed---Authorized representative regretted the delay and assured to comply with the provisions of the Rules, within stipulated time in future---Considering the facts narrated by authorized representative of the company, instead of imposing maximum penalty of Rs.26,500 on each of the Directors for said default, penalty of Rs.4,000 was imposed on each Director and Chief Executive.

Musarrat Mahmood Sheikh, FCA Present.

2009 C L D 525

[Securities & Exchange Commission of Pakistan]

Before Razi-ur-Rehman Khan, Chairman and S. Tariq A. Hussain, Commissioner (L.D)

Messrs UNITED INDUSTRIES LTD. and another---Appellants

Versus

Mian WAQAR-UD-DIN and 3 others---Respondents

Appeal No.34 of 2008, decided on 19th December, 2008.

Companies Ordinance (XLVII of 1984)---

----S. 234-A---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Application for ordering of special audit by appointment of auditors--Appeal to Commission---Respondents, who jointly owned 49% of the total share-holding of the company, filed an application under S.234-A of the Companies Ordinance, 1984 for ordering of special audit by appointment of auditors to carry out detailed scrutiny of the affairs of the company---Respondents had levelled certain allegations against appellants who jointly owned 51% share-holding of the company, with regard to conducting the affairs of the company---Show-cause notice was issued to the appellants and proceedings were held---Executive Director (Registration), after considering the show-cause notice and hearing the parties vide impugned order appointed Auditing company as auditor to carry out the special audit and detailed scrutiny of the affairs of the Company under. S.234-A of the Companies Ordinance, 1984---Appellants aggrieved by the impugned order had filed appeal in which jurisdiction of Executive Director was specifically objected to---Validity---Preliminary objection taken by the appellant on the exercise of the powers of Executive Director, was without any merit---Appellants had failed to show any prejudice caused to them as a result of hearing„ before Executive Director, who was delegated the powers to hear the issues relating to S.234-A of the Companies Ordinance, 1984, vide Notification No.839(I)/2008 dated 11-8-2008---Executive Director in exercise of his lawful authority, heard the application filed by the respondents under S.234-A of the Companies Ordinance, 1984---Executive Director of the Commission, in circumstances, was competent to hear the application for a special audit and no injustice or prejudice was caused to the appellants---Introduction of S.234-A of the Companies Ordinance, 1984 was to equip Securities and Exchange Commission of Pakistan with a regulatory tool, which could be used at any time to scrutinize the affairs of the company---Special audit could be conducted by Securities and Exchange Commission of Pakistan on its own motion or on application made by members holding not less than 20% voting rights in the company to carry out detailed scrutiny of the affairs of the company---Special audit could be held as and when ordered by the Commission---Order appointing auditor passed by the Executive Director of the Commission, was upheld.

PLD 1984 Lhr. 69; PLD 1994 Kar. 358 and 2000 CLC 364 ref.

Kh. Saeed-uz-Zafar and Asjad Saeed for Appellants.

Salman Akram Raja and Munawar Ali Bhatti, Departmental Representative for Respondents.

2009 C L D 541

[Securities & Exchange Commission of Pakistan]

Before Abid Hussain, Director (Enforcement)

BABRI COTTON MILLS LTD.: In the matter of

Show-Cause Notice No. EMD/233/92/2002-1305, dated 25th November, 2008, decided on 31st December, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss. 160 & 476---Conducting special business by the Company---Failure to provide material information to the share-holders to understand said special business transaction---Effect---Enforcement Department, while examining the notice of the 38th Annual General Meeting observed Special Business proposed for approval of the share-holders---Security Exchange Commission required the company to provide important information necessary for share-holders to understand the transaction---Company conducted its Annual General Meeting without providing said material information either to the Commission or to the share-holders---In response to show-cause notice issued to the Chief Executive, Directors and Secretary of the Company; the Secretary of the Company appeared representing the Chief Executive and Directors of the Company and accepted the default under the provisions of S.160(1)(b) of the Companies Ordinance, 1984 requesting to condone the default and assured that the company would not proceed with the proposed transaction and the matter would be placed before the share-holders and in that way all the information would be available with the company, which would be provided to the share-holders through statement of material facts under S.160(1)(b) of the Companies Ordinance, 1984---Object of annexation of statement of material facts was that all members of the company must know as to what was the exact nature of the business to be transacted at the meeting so that they could make up their mind to attend the meeting considering the nature of business from their point of view and to make a conscious decision using their rights effectively---Default was established and admitted, however in view of the fact that the company had not proceeded with the transaction on assurance of the authorized representative that the company would convene a fresh meeting for the aforesaid business in which all material information would be provided to the share-holders---Taking lenient view, instead of penalizing the Chief Executive, Directors and Company Secretary the Commission condoned the violation with a stern warning---Directors were further advised to be extra cautious in observing the provisions of law in future.

Zaheer Mir, Company Secretary, Present.

2009 C L D 548

[Securities & Exchange Commission of Pakistan]

Before Abid Hussain, Director (Enforcement)

DATA TEXTILES LTD.: In the matter of

Show-Cause Notice No.EMD/233/ 106/2002-4122, dated 22nd May, 2008, EMD/233/106/2002-179, dated 6th August, 2008, decided on 2nd December, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss. 196 & 476---Reduction in property, plant and equipment and disposal of fixed assets of the company by the Directors unauthorisediy---Imposition of fine---Perusal of quarter accounts of the company for the relevant period, had revealed that its property, plant and equipment had been reduced to Rs.125.483 million from its previous balance of Rs.277.781---Company had also received an amount of Rs.51.550 million as proceeds from disposal of its fixed assets---No special business was proposed for approval from members of the company, however, the minutes of Annual General Meeting, submitted by the company revealed that special business of disposing of company's substantial assets was transacted under "any other business"---Company had submitted that during discussion for approval of accounts, it was pointed out by one of the share-holders that due to rising financial cost of loans, the company was facing huge losses and if liabilities were not adjusted, a stage would come where the loans would be more than the assets of the Company, so it was unanimously decided to take up the matter of sale of fixed assets to pay off the liabilities---Subsection' (3) of S.196 of the Companies Ordinance, 1984 had clearly provided that without the approval/consent of general meeting, Directors were not authorized to sell, lease or otherwise dispose of the undertakings or sizeable part thereof, unless the main business of the company comprised such selling or leasing---Directors having failed to clarify their position with respect, to compliance of requirement of subsection (3) of S.196 of the Companies Ordinance, 1984, an action was necessary under subsection (4) of 5.196 of the said Ordinance---Section 196(4) of the Companies Ordinance, 1984, not only provided a fine of one hundred thousand rupees against the Directors responsible for same but also made them individually and severally liable for losses and damages arising out of such action---Fact of the case warranted no sympathy for the Directors and required a stern action against them---Fine of Rs. 700,000 was imposed in aggregate of the company for contravening the provision of S.196(3)(4) of the Companies Ordinance, 1984.

Muhammad Mansha of Rafaqat Mansha Mohsin Dossani Masoom & Co., Chartered Accountants ("Counsel No. 1") Present.

Mohsin Nadeem of Rafaqat Mansha Mohsin Dossani & Co., Chartered Accountants ("Counsel No. 2") Present.

2009 C L D 564

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

Messrs SIDDIQI & COMPANY, CHARTERED ACCOUNTANTS: In the matter of

Show-Cause Notice No.CLD/EMD/FIU/32/2006-3408-9, dated 3rd March, 2008, decided on 25th July, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss. 255, 258, 260 & 476---Audit of cost account of the company by the Auditors---Making reports pertaining to cost account record otherwise than in conformity with the requirement of law---Effect--Review, analysis and inquiry into the facts disclosed in the account had revealed that the funds were siphoned out of the company and the cost accounts were to camouflage the series of fraudulent transactions---Such events and transactions could have been identified, had the Cost-Auditors performed their duties diligently---Cost Auditors, however reported in their reports, for the relevant year to the Directors that proper Cost accounting records as required by Clause (e) of subsection (1) of section 230 of the Companies Ordinance, 1984 had been kept by the company---Audited accounts were materially misstated mainly on account of transaction and effect of the same resultantly in understatement of the profit for said' years---Information/facts disseminated through cost statements were misleading as the impact of said transactions on the cost data for the relevant audit years was not incorporated---Cost accounting record maintained by the management of the company did not reflect true and fair view of the cost production, processing, manufacturing and marketing. of the products of the company for the relevant year---Apparently Cost Auditors had failed to discharge their duties and responsibilities laid down by the Companies Ordinance, 1984 by not modifying report in respect of the matter, which had impaired the true and fair view of the statement of production, capacity utilization and stock-in-trade---Cost Auditors had no reason to start their work with any suspicion or doubt about the conduct of the company on any of its directors---Powers, duties and responsibilities of the Cost Auditor as stated in S.258 of the Companies Ordinance, 1984 were similar to those of the statutory Auditor of the company---Cost Auditor was responsible to audit and express opinion on the true view and fairness of the cost statement---If the opinion expressed was not correct, the whole exercise would be rendered useless and the user/reader would be deceived---Cost Auditors, in the present case, had signed the audit reports otherwise than in conformity with the requirements of Ss. 255 & 258 of the Companies Ordinance, 1984 and had committed default in terms of S.260 of the Ordinance---Cost Auditors, however, having offered to co-operate with the Commission in the legal recourse against the delinquent management, they were only reprimanded---Cost Auditors were further directed to take the action appropriate in the circumstances in terms of the effect on, the Cost Auditor's opinion, including modification of the cost audit report.

Wasful Hassan Siddiqi, FCMA, Mustafa Hussain Siddiqi, FCMA, Partners, Siddiqi & Company, Cost and Management Accountants Present.

2009 C L D 931

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

NORRIE TEXTILE MILLS LTD.: In the matter of

Show-Cause Notice No. EMD/233/348/2002/720-737 dated 17th November, 2008, decided on 12th February, 2009.

Companies Ordinance (XLVII of 1984)---

---Ss.231, 473, 476 & 495---Order to inspect books of accounts and other papers of the company by the Inspector---Non­compliance of order by the company---Securities and Exchange Commission of Pakistan ordered to inspect the books of accounts and other papers of the company---Inspection order was delivered at the company's office, however access to requisite books and relevant records of the company was denied to the duly authorized Inspectors of the Commission---Compliance with directions of the Commission to make available the requisite records, was not made by the company---Show-cause notices were issued to the Directors of the company and its Secretary requiring them to explain their position in writing within 14 days and to show-cause for not complying with the inspection order issued under S.231 of the Companies Ordinance, 1984 by not making books of accounts and other books and papers of the company available to the authorized Inspectors---Situation, prima facie, exhibited the existence of fraud and risk for the public at large---Facts and events had sufficiently demonstrated that company was trying to buy time to detract the Commission in its efforts to expose said fraud apparently perpetrated in the securities market by engaging the Commission through correspondence containing irrelevant issues and repeated requests for giving further time to arrange information on evasive excuses---Events had sufficiently explained the continued efforts of the Directors of the company to deny the availability of the record of the company and relevant information by providing evasive justifications-Directors of the company having failed to comply with the directions of the Commission, they were liable to be punished under S.495 of the Companies Ordinance, 1984---Facts of the case warranted no sympathy for the Directors and required a stem action against them---Fine of Rupees fifty thousand was imposed on each Director including the Chief Executive and the Company Secretary for contravening the provisions of 3.495(1) of the Companies Ordinance. 1984.

2009 C L D 951

[Securities and Exchange Commission of Pakistan]

Before Abid Hussain, Director (Enforcement)

BAWANVAIR PRODUCTS LTD.: In the matter of

Show-Cause Notice No.EMD/233/480/2003-1336-37 dated 26th November, 2008, decided on 4th March, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.227, 229, 473, 476 & 495---Mismanagement of amount of provident funds and using said amount in violation of directions of Securities and Exchange Commission and in contravention of provisions of law---Imposition of penalty---Company on the one hand had not followed the directions of the Securities and Exchange Commission with regard to amount of provident funds; and on the other hand had also continuously contravened the mandatory provisions of S.227 of the Companies Ordinance. 1984---Objective of the provisions of S.227 of the Companies Ordinance, 1984 was to secure the amount of provident funds of the employees of the company as that fund was exclusively for their use and benefit-Company was under the control of current management for a long span of time, enough for a company to streamline its financial matters and reporting framework and to update and maintain its books of accounts in accordance with the prevailing laws---No serious effort appeared from the management of the company to make arrangement for disbursement of the balance amount of the provident fund---Company had failed to follow the directions of the Commission under S.473 of the Companies Ordinance, 1984 and had continuously violated the provisions of S.227 of the Companies Ordinance, 1984---Objective of provisions of S.227 of the Companies Ordinance, 1984 was to keep the management away from utilizing any portion of provident fund collected as contributions to provident fund and to secure the amounts collected from the employees of ` the company for the benefits of the employees of the company---Law required that when a trust had been created by a company with respect to any provident fund, the company would have an obligation to pay the contributions including its own contribution to the trustees within fifteen days from date of collection---Company had not complied with the directions of the Commission and mandatory provisions of S.227 of the Companies Ordinance, 1984---Action, in circumstances, was necessary under provisions of the Ordinance---Considering the admitted default and circumstances of the case, taking lenient view, instead of imposing the maximum penalty, fine of rupees thirty five thousands only was imposed on all the Directors including Chief Executive of the company Rs. five thousand per person under S.227 of the Companies Ordinance, 1984 and Rs. fifteen thousand under S.495 of the said Ordinance on Chief Executive of the company.

Present Nil

2009 C L D 970

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

INTERNATIONAL HOUSING FINANCE LTD.: In the matter of

Show-Cause Notice No.SMD/TO/15/2006 dated 14th September, 200'7, decided on 20th March, 2009.

Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002)---

----Ss.4, 5, 25 & 26---Increase in shareholding of acquirer of target company---Imposition of penalty---Acquirer acting in consent with his children breached the 25% threshold specified «under S.5 of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, which required mandatory public offer for purchase of voting shares of the target company---Acquirer was advised to clarify his position and to provide documentary proof evidencing compliance with the requirements of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 while acquiring increase from 9.58% to 28.26% of the target company--Information provided by the acquirer was found unsatisfactory as he could not establish that acquisition by him and his children were independent acts---On the contrary it had been acknowledged that acquisition was made to retain the beneficial ownership in a Bank, subsequent to the merger of the target company with the same---Acquirer had failed to provide any information/documents evidencing compliance with any of the requirement of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 and had made them liable for penal action in terms of S.26(3) of said Ordinance ---Main purpose of the said Ordinance, was to provide for a fair and equitable treatment of all the investors and to provide a transparent and efficient system for substantial acquisition of voting shares and control of listed companies---Acquirer in the case had failed to comply with any of the provisions of Ordinance--Acquirer who had violated provisions of the Ordinance could be directed under S.25 of the said. Ordinance to sell the voting shares acquired in violation of the provisions of the Ordinance; however, keeping in view the fact that the target company was subsequently merged in the Bank and did not exist any more; token penalty of Rs.100,000 (one hundred thousand only), was imposed under S.26(3) of the Ordinance on the acquirer in violation of the provisions of the Ordinance.

Jawwad Shekha, Representative of the Acquirer Present.

2009 C L D 995

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (Securities Market Division)

N.U.A. SECURITIES (PVT.) LTD.: In the matter of

Show-Cause Notice No.1(01)/Wash/KSE/MSW/SMD/2009/05 dated 20th February, 2009, decided on 3rd April, 2009.

Securities and Exchange Ordinance (XVII of 1969)--

----S.22---Brokers and Agents Registration Rules, 2001, R.8 &, Sched.---Execution of wash trades---Imposition of penalty---Client of the company bought and sold shares of two other companies in such a way that his orders for buying and selling matched with each other and did not result in any change in its beneficial ownership---Company had stated that execution of orders was made due to misunderstanding between KATS operator and its client and due to said transactions a warning letter had been issued to KATS operator---Said statement did not adequately explain the position of the company---Company had executed the wash trades on its client's behalf without due care and diligence violating the Code of Conduct laid down under the Third Schedule of Brokers and Agents Registration Rules. 2001, which in turn, was a violation of Brokers Rules---Principally, the company was responsible for each and every trade executed--Company was responsible to put proper system and controls in place to ensure that each order placed trough its terminal did not violate any applicable rules and regulations and instructions issued by the Commission from time to lime---Company had been established to have executed wash trades in its client's account---Company by executing the trades in question had violated clauses A2 and A5 of the Code of Conduct contained in the Third Schedule of the Brokers Rules, which in turn was a violation of Brokers Rules, 2001---Violation of the Brokers Rules, 2001 was a serious matter which would entitle the Commission to suspend the registration of the company; however, taking lenient view, fine of Rs.50,000 was imposed on the company tinder S.22 of the Securities and Exchange Ordinance, 1969.

Imroz Alam Assisting the Director (SMD).

Mateettullah Khan, Join't Director Present.

Adnan Ahmed, Assistant. Director Present.

2009 C L D 1051

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (Securities Market Division)

MAHA SECURITIES (PVT.) LTD.: In the matter of

Show-Cause Notice No.1(13)13S/LSE/MSW/SMD/2008/04 dated 9th March 2009, decided on 23rd April, 2009.

Securities and Exchange Ordinance (XVII of 1969)---

----S.22---Brokers and Agents Registration Rules, 2001, Rr. 4 & 8---Execution of Blank Sales in violation of Regulation---Imposition of penalty---Record had shown that client of the company t which was member of Stock Exchange and was registered with the Securities and Exchange Commission of Pakistan sold shares when at time of said sale, said client did not have any pre-existing interest in those shares---Company admitted its mistake and stated that all said trades were erroneously executed by one of its traders---Blank sales could mean a sale by a party that did not own shares or the sale did not constitute a sale with pre-existing interest or was a sale by a party that had not entered into contractual borrowing agreement to meet delivery requirements---Sale by the client of the company without pre-existing interest fell within the ambit of 'Blank Sale' which was prohibited in terms of Regulation 4 of Brokers and Agents Registration Rules, 2001---Company by executing Blank Sales in its client's account had violated the Regulations which, in turn, was a violation of Regln. (iii) of Brokers and Agents Registration Rules, 2001---Such violation of the Rules and Regulations was a serious matter which would entitle the Commission to suspend the company's membership, however, in exercise of the powers under R.8(b) of the Brokers and Agents Registration Rules, 2001, penalty of Rs.50,000 was imposed on the company with direction to the company to ensure that full compliance he made of all the rules, regulations and directions of the Commission in future for avoiding any punitive action under the law.

Muhammad Ali Lashari for Respondent.

Muhammad Atif Iiameed, Deputy Director, Present.

Muhammad Ali Assistant Director, Present.

Ms. Tayyaba Nisar, Assistant Director, Present.

2009 C L D 1154

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

Messrs MUSTEHKAM CEMENT LIMITED: In the matter of

Show-Cause Notice No.EMD/233/383/2002-1410, dated 22nd January, 2009, decided on 23rd April, 2009.

Companies Ordinance (XLVII of 1984)---

----S.245---Failure to submit profit and loss account---Imposition of fine---Company, under S.245 of the Companies Ordinance, 1984 was required to prepare and transmit to the members and simultaneously file with the Registrar and the Commission its quarterly accounts for the relevant year---Failure of the company to comply with the said mandatory requirements within the prescribed time, would necessitate action against the responsible directors of the company---Company in the case had failed to comply with said mandatory requirements---Protection of the investors/shareholders was one of the primary objectives of the Companies Ordinance, 1984 as it was shareholder who provided seed for the capital formation of the company---If the interest of the investors would be protected, they would invest more, in return they must be provided adequate and meaningful information---Annual and interim accounts would provide information to the investors about the affairs of the company---Directors of the company had failed to observe mandatory requirements of law and had not circulated the quarterly accounts to the shareholders within: the prescribed time---Past record of the company in that regard was also not satisfactory---Responsibility for preparation/circulation of quarterly accounts rested with the Directors of the company and they had to take appropriate action at appropriate time---Repetition of defaults, had clearly shown that the company was not making any serious efforts to comply with the provisions of the law---Default having been established, company was liable to pay fine, however, taking lenient view instead of imposing the maximum fine, fine of rupees 10,000 was imposed on each Director of the company.

M.I. Panni Present.

2009 C L D 1191

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

Messrs EAST WEST INSURANCE COMPANY LTD.: In the matter of

Show-Cause Notice No. EMD/233/45/2002-731-37, dated 7th October, 2008; decided on 27th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.208 & 476---Making investment in associated company without authority of special resolution-Imposition of penalty---Examination of the audited accounts of the company for the relevant year had revealed that company had made investment in its associated company without the authority of special resolution, which was in contravention of the provisions of S.208 of the Companies Ordinance, 1984---General Manager, who appeared as representative on behalf of all the Directors, admitted the default and assured that such a default would not be committed in future---Taking a lenient view, instead of imposing a maximum fine of Rs. ten million on each Director, penalty of Rs.150, 000 (Rupees one hundred and filly thousand) was imposed on each Director and the Chief Executive.

Imran Ali Dodani-General Manager (Authorized Representative) Present:

2009 C L D 1197

[Securities and Exchange Commission of Pakistan]

Before Ali Azeem Ikram, Director (Enforcement)

EAST WEST INSURANCE COMPANY LTD.: In the matter of

Show-Cause Notice EMD-233/45/2008-1041-1047, dated 20th November, 2008, decided on 27th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.160 & 476---General meeting of the company or meeting of a class of members of the company---Notice of meeting---Violation of provisions in the notice---Imposition of penalty---Enforcement Department of the Securities and Exchange Commission while examining the notice of Extraordinary General Meeting of the company found that said notice did not contain any material facts with regard to special business regarding increase in authorized capital and bonus issue as required under 5.160(1)(b) of the Companies Ordinance, 1984---In view of the fact that the company did not disclose material information to the shareholders and failed to place "special business" agenda item before the shareholders for their approval, a show-cause notice was issued to the Directors of the company to explain the situation, but they could not explain satisfactorily---Company had classified both the agenda items under the heading of special business, but had not provided the mandatory material facts to the shareholders as required under S.160 of the Companies Ordinance, 1984---Company was also required to pass resolution with regard to fractional shares as special business---Notice of the meeting, in circumstances, did not comply with the provisions of S.160 of Companies Ordinance, 1984---Provisions of S.160 of the Companies Ordinance, 1984 having been violated, Chief Executive and Directors of the company were found liable for the penalties as defined in S.160(8) of the Companies Ordinance, 1984; however, instead of imposing maximum fine on all the Directors, fine of Rs. ten thousand only was imposed on each Director.

Imran Ali Dodani, General Manager, Present.

2009 C L D 1374

[Securities and Exchange Commission of Pakistan]

Before Salman Ali Shaikh, Commissioner (SCD) and S. Tariq A. Hussain, Commissioner (LD)

PAKISTAN MUTUAL INSURANCE COMPANY (GUARANTEE) LIMITED---Appellant

Versus

CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.29 of 2008, decided on 12th November, 2008.

Insurance Ordinance (XXXIX of 2000)---

----Ss.6, 11, 29, 36 & 63---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Securities and Exchange Commission of Pakistan (Insurance) Rules, 2002, Rr.9 & 13---Failure to maintain statutory deposit---Directive to comply with requirement of law--Appeal to the Appellate Bench of the Commission--After coming into force, Insurance Ordinance, 2000, Insurance Division of Security and Exchange Commission of Pakistan sent a notice calling upon the appellant to submit statutory deposit of two and a half million rupees as then required which the appellant deposited---Later when Insurance Division issued circular calling upon all the Insurance Companies to maintain statutory deposit of five million rupees, appellant did not deposit same, claiming to be entitled to exemption from said deposit---Impugned directive was issued to the appellant to comply with the requirements of S.11(1) of Insurance Ordinance, 2000, failing which the appellant was directed to cease entering into new contracts of insurance--Appellant aggrieved by impugned Directive filed appeal contending that said Directive was issued without giving the appellant opportunity of hearing---Under provisions of S.63(1) of Insurance Ordinance, 2000, direction to cease entering into new contracts of insurance, could be issued, if the company would fail to comply with the condition of registration, even without affording an opportunity of hearing---Conditions for registration laid down in S.11 of Insurance Ordinance, 2000 were basic conditions for registration---Companies were required to comply with the requirements within the stipulated period--Argument of the appellant that an opportunity of (fearing should have been given before passing Impugned. Directive, was not sustainable, in circumstances---Appellant had sufficient time to comply with the requirements of law, which appellant failed to do--Appellant was directed to comply with the Impugned Directive---Appeal filed by the appellant being not maintainable, was dismissed, in circum­stances.

Ch. Abdul Karim, Chief Executive for Appellant.

Ali Azeem Ikram and Uzma Farogh for Respondent.

2009CLD 1416

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (Securities Market Division)

AZEE SECURITIES (PVT.) LTD.: In the matter of

Show-Cause Notice No.1(01)/Wash/KSE/MSW/SMD/2009/06, dated 20th February, 2009, decided on 3rd April, 2009

Securities and Exchange Ordinance (XVII of 1969)---

----S.22---Brokers and Agents Registration Rules, 2001, Rr.8, 12, 13 & Third Sched.---Buying and selling shares illegally--Imposition of penalty--After examination of relevant record it was found that the clients of the company, bought and sold shares in ten different scripts in such a way that orders for buy and sell matched with each other but did not result in any change in the beneficial ownership of the shares---In response to notice issued to the company, it was stated on behalf of the company that its clients were completely unaware of the by-laws and it was ensured that it had taken strong notice of the violation and that same would not be repeated in the future---Company, however again engaged in 1318 shares trades in 83 different scrips--Notice, in circumstances was issued to the company under S.22 of Securities and Exchange Ordinance, 1969 and R.8 of the Brokers and Agents Registration Rules, 2001 for said violation of Rules-Company had some responsibility towards market and was duty bound to follow the Rules and Regulations and to act with due skill, care and diligence in the conduct of all its business---Company was not expected to create or indulge in any act which, was detrimental to investors' interest or which would lead to interference with the smooth and fair functioning of the market---Company had violated the Brokers and Agents Registration Rules,, 2001 and Code of Conduct, attracting R.8 of the Brokers Rules, 2001 and S.22 of the Securities and Exchange Ordinance, 1969 which was a serious matter, entitling the Commission to suspend the registration of the company---However as the company had assured that in future it would remain careful, taking lenient view, penalty of fine of Rs.300,000 was imposed on the company.

Syed Qasim Raza, Vice President, Assisting the Director (SMD) Present.

Muhammad Atif Hameed, Deputy Director Present.

Muhammad Ali Assistant Director Present. Ms. Tayyaba Nisar, Assistant Director Present.

2009 C L D 1577

[Securities and Exchange Commission of Pakistan]

Before Muhammad Sohail Dayala, Commissioner (SMD) and S. Tariq A. Hussain, Commissioner (LD)

INVESTEE MUTUAL FUND LIMITED---Appellant

Versus

DIRECTOR (NBFC DEPARTMENT---Respondent

Appeal No.3 of 2007, decided on 20th July, 2009.

Companies Ordinance (XLVII of 1984---

----Ss.158, 233, 245, 265 & 277---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Irregularities and non-compliance of certain provisions of Companies Ordinance, 1984---Investigation in the matter--Appeal---Show­-cause notice was issued to appellant company' which was duly registered as Investment Company with regard to certain irregularities and violation of certain provisions of Companies Ordinance, 1984 by the said company---Securities and Exchange Commission was entrusted with powers under S.265 of the Companies Ordinance, 1984 to appoint an Inspector, if it was satisfied that any of the conditions set out in sub-clauses (i) to (vii) of S.265(b) of the Ordinance, were met---Appellant company in response to the show-cause notice could not deny the factual allegations levelled against it---Appellant company in fact responded to the show-cause notice by raising irrelevant and immaterial arguments---Contention that Commission could not suo mote initiate action under S.265 of the Companies Ordinance, 1984, was repelled as Commission as a regulator, was obliged to look into the affairs of the entities it regulated to ensure that their affairs were not being managed in a manner, which would deprive its members of reasonable return on their investment; the affairs of the company were managed in accordance with sound business principles in prudent commercial practices; and that the financial position was not such as to endanger its solvency--Apart from other functions, Commission was required to perform to meet the various objectives of the law---Provisions of S.265 of the Companies Ordinance, 1984 had clearly given the Commission the powers, it had sought to exercise in the case---No cogent grounds were available to stop the investigation ordered by the Commission---Where an investigation was ordered by the Commission itself cost ought to be initially defrayed by it and could later be recovered from the company under S.277 (1)(c) of the Companies Ordinance, 1984---Impugned order was modified to the extent that investigation would be conducted by a team comprising of authorized officers of the company---Expenses incurred on the investigation by the Commission, would, however, be reimbursed by the company on the conclusion of investigation.

Shafiq Ahmad for Appellant.

Rashid Paracha, Director (NBFC), Syed Asad Haider, Joint Director (NBFC) and Vinod Sitani, Joint Director (NBFC) for Respondents.

2009 C L D 1582

[Securities and Exchange Commission of Pakistan]

Before Abid Hussain, Director (Enforcement)

(COLONY) THAL TEXTILE MILLS LTD. In the matter of

Show-Cause Notice No.EMD/233/53/2002-1282, dated 24th November, 2008, decided on 25th February, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.160, 196 & 484---Review petition---Review petition had been filed against order whereby a penalty of Rs.10,000 was imposed on the Chief Executive of the company under S.160(1) of the Companies Ordinance, 1984---Chief Executive of the company had requested the Commission that proceedings initiated against .him could be dropped as the fixed assets proposed to be disposed of did not constitute a sizable part of the total assets of the company---Chief Executive was asked vide letter to provide the list of scrapped items duly certified by the Auditors of the company to be disposed of along with the progress report relating to disposal of surplus land and company provided the requisite information to the Commission---Information as certified by the statutory Auditors of the company reflected that the assets proposed to be disposed of had a cost of Rs.662,824 which did not constitute to be a sizable part of the assets of the company---Provisions of subsection (3) of S. 196 as well as S. 160 of the Companies Ordinance, 1984, were not attracted---Penalty imposed under subsection (8) of S.160 of the Companies Ordinance, 1984, was withdrawn with no further action.

2009 C L D 1584

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

ASIA INSURANCE COMPANY LIMITED. In the matter of

Show-Cause Notice No.EMD/233/34/08-1375-1382, dated 14th January, 2009, decided on 30th April, 2009.

Companies Ordinance (XLVII of 1984)---

----S.492---False statements-Penalty for---Enforcement Department of the Commission after examination of the annual audited accounts of the company for relevant year had observed that in profit and loss account of the company the amount of net commission was not in conformity with figure stated in statement of expenses---Detailed analysis of the trial balance and ledger of commission from re-insurers had revealed that there was conflict in the submissions of the company and it appeared that the company had overstated its profits for the relevant year---Company, in circumstances, had violated the provisions of S.492 of the Companies Ordinance, 1984---Default of the company, in circumstances, was established---Keeping in view the fact that false statement of expenses could not affect profit of the company and the company had asserted that it would ensure strict compliance of the provisions of the Companies Ordinance, 1984 in future, lenient view was taken and instead of imposing the fine under S.492 of the Companies Ordinance, 1984, all the Directors, the Chief Executive, Director and Chief Financial Officer were warned to observe the compliance of law in letter and spirit.

R. Zahick, Executive Director present.

M. Dawood, present.

Zeeshan Chishti, Chief Financial Officer (Authorized Representative of Directors of Asia Insurance Company Ltd.) present.

2009 C L D 1589

[Securities and Exchange Commission of Pakistan]

Before Ali Azeem Ikram, Director (Enforcement)

Messrs PROGRESSIVE INSURANCE COMPANY LTD. In the matter of

Show-Cause Notice No.EMD/233/701/2008-1935-41, dated 27th January, 2009, decided on 30th April, 2009.

Companies Ordinance (XLVII of 1984)---

---Ss. 204-A & 498---Failure to have a whole time Secretary by the company---Imposition of penalty---In pursuance of subsection (1) of S.204-A of the Companies Ordinance, 1984, company which was a public listed-company, was required to have whole time Secretary, possessing prescribed qualifications, however, during the proceedings of inspection of the company under S.31 of the Companies Ordinance, 1984, it was noticed that the company did not have any whole time Secretary---Default of S.204-A(1) of the Companies Ordinance, 1984 was established and the Chief Executive and Directors, of the company had made themselves liable for the fine under S.498 of the Companies Ordinance, 1984---In exercise of powers conferred under S.498 of the Companies Ordinance, 1984, instead of imposing maximum penalties, fine of Rs.5,000 only was imposed on Chief Executive and Directors of the company.

Nemo for Messrs Progressive Insurance Company Ltd.

2009 C L D 1593

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

Messrs PROGRESSIVE INSURANCE COMPANY LTD. In the matter of

Show Cause Notice No.EMD/233/701/2008-1948-54, dated 27th January, 2009, decided on 30th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.86, 492 & 498---Companies (Issue of Capital) Rules; 1996, R.8---Raising further capital without issuance of right shares and for consideration other than in cash---Imposition of penalty---Company prima facie raised further capital of Rs.35 million without issue of right shares and for consideration other than in cash---Company prima facie, deliberately concealed the fact of issuance of further share capital through means other than by way, of issue of right issue and against consideration other than the cash---Based on annual accounts, statutory returns and other documents supplied by the company during inspection under S.231 of the Companies Ordinance, 1984 and in view of facts of the case the defaults under Ss.85 & 492 of the Companies Ordinance and R.8 of Companies (Issue of Capital) Rules, 1996, were established for which the Chief Executive and Directors of the company had made themselves liable for fine---In exercise of powers conferred under S.498 of the Companies Ordinance, 1984, fine of Rs.100,000 each on the Chief Executive and Directors of the company individually; was imposed---Further fine of Rs.50,000 was imposed on each Director including the Chief Executive for making default of S.492 of the Companies Ordinance, 1984---For contravention of R.8 of the Companies (Issue of Capital) Rules, 1996, a fine of Rs.1, 000 was imposed on each Director and the Chief Executive of the company.

Nemo for Messrs Progressive Insurance Company Ltd.

2009 C L D 1598

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SM)

MRA SECURITIES (PVT.) LTD. In the matter of

Show-Cause Notice No.1(11)DEL/LSE/MSW/SMD/2008/04, dated 29th April, 2009, decided on 9th June , 2009.

Securities and Exchange Ordinance (XVII of 1969)---

----S.22---Brokers and Agents Registration Rules, 2001, Rrs.8, 12 & Sched.---Placing sale orders of shares without having pre-existing interest in Proprietary Account---Imposition of penalty---Company had placed the large sale orders and cancelled the same without having pre-existing interest in its Proprietary Account---Company vide its letter admitted its mistake and stated that all said sales were erroneously executed by one of its KATS operator and that same mistake would not be repeated in future---Company was responsible for each and every order placed or trade executed through its terminals---Prime responsibility of the company was to monitor all trading activities being carried out through its brokerage house in order to track any transaction being made with a view to create any misleading impression or fraudulent intention---Rule 12 of Brokers and Agents Registration Rules, 2001 required that company should abide by Code of Conduct set forth under said Rules; and made it mandatory on the company to execute its business with due care and skill and to put in place proper system and control to ensure that its business was conducted according to the applicable Rules and Regulations---Placing of sale orders and then cancelling the same without having pre-existing interest, had shown that the company had failed to conduct its business with due diligence and care and had interfered in smooth and fair functioning of the market---Company was bound to keep IEATS operators updated with the applicable rules and regulations to avoid any violation of the same and it was also the duty of the company to maintain high standards of integrity, promptitude and fairness, in the conduct of its business and not to create false market or indulge in any act detrimental to the investor's interest---Company by placing the sale orders without having pre-existing interest, had violated A1, A2 and A4 of the Code of Conduct of the Brokers Rules, which, in turn, was a violation of Brokers and Agents Registration Rules, 2001---Securities and Exchange Commission was empowered to take action, in the public interest under R.8 of Brokers and Agents Registration Rules, 2001 and S.22 of Securities and Exchange Ordinance, 1969---Violation of the Rules and Regulations, was a serious matter which entitled the Commission to suspend the membership of the company, but a penalty of Rs.200,000 was imposed on it instead.

M. Farhan Rafiq, Chief Executive Officer and Kamran, Settlement Department Present.

Waqar Ahmad Siddiqui, Joint Director, Adnan Ahmad, Assistant Director and Farhan Yaqoob, Assistant Director, Present.

2009 C L D 1602

[Securities and Exchange Commission of Pakistan[

Before Tahir Mahmood, Executive Director (Enforcement)

Messrs PROGRESSIVE INSURANCE COMPANY LTD. In the matter of

Show-Cause Notice No.EMD/233/701/2008-2066-72, dated 10th February, 2009, decided on 30th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.305 & 309---Winding up of the an Insurance Company---Additional .Registrar of Companies sought sanction of the Commission to present a petition before the High Court for winding up of the company in public interest on the grounds; that the business of the company was suspended since year 2006; that no proper books of accounts were being maintained and kept by the company; and that company was conducting its business in a manner oppressive to its members and minority share­holders---During the proceedings of inspection of the company, it was confirmed that no books of accounts including trial balances, accounting ledgers, cash book, Bank book, Bank statements, fixed assets register, members register, minutes book and other relevant statutory corporate and accounting record and documents were not being maintained and kept by the company---Under said circumstances, the operations of the company were being conducted in a manner which was not fair to minority share-holders---Such state of affairs called for winding up of the company by court under clauses (e) & (f) of S.305 of the Companies Ordinance, 1984---In addition to said facts, the company had also made defaults in complying with the various sections of the Companies Ordinance, 1984, which included Ss.86, 193, 204-A, 492 and R.8 of the Companies (Issue of Capital) Rules, 1996 for which the Commission had initiated actions against the company---No reasonable prospects, in circumstances,- were available for restoration of operations of the company and to meet the statutory requirements of the Companies Ordinance, 1984 as well as those of Insurance Ordinance, 2000 which had rendered the company to be wound up by the court under S.305 of the Companies Ordinance, 1984---Additional Registrar of the Companies in exercise of the powers conferred under S.309 of the Companies Ordinance, 1984 was authorized to present a petition for winding up of the company in High Court.

Nemo for Messrs Progressive Insurance Company Ltd.

2009 C L D 1607

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

Messrs PROGRESSIVE INSURANCE COMPANY LTD. In the matter of

Review Application, dated 13th November, 2008, decided on 30th April, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.245 & 484(2)---Review application---Review application was filed by the company against order whereby a fine aggregating to Rs.120, 000 was imposed on the Chief Executive and five Directors of the company---Chief Executive and Directors of the company had requested in their application for waiving of amount of fine due to financial constraints faced by the company---In the review application, the Chief Executive and Directors of the company had not come with any new issue or new arguments in favour of their plea---All the arguments given in said application had been adequately addressed earlier---For review of an order it was imperative that applicant must bring out new facts or evidence, which could not have been produced at the time of passing of earlier order---No error or omission had been pointed out in impugned order which could have any significant impact on the order---Review application was dismissed.

Nemo for Messrs Progressive Insurance Company Ltd.

2009 C L D 1609

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

Messrs PROGRESSIVE INSURANCE COMPANY LTD.: In the matter of

Show-Cause Notice No.EMD/245/701/2008-269-275, dated 20th June, 2008, decided 10th September, 2008.

Companies Ordinance (XLVII of 1984)---

----Ss.245 & 476---Failure of company to prepare and file its accounts within specified period---Imposition of penalty---Company which was required under clause (b) of subsection (1) of S.245 of the Companies Ordinance, 1984 to prepare and file its accounts for the relevant period with the Commission within specified period had failed to do so---One of the reasons advanced by the company for delay in filing said accounts was redesigning and revamping of its financial reporting system which needed to be improved subsequently---Validity---Company should not have dismantled the existing financial reporting system altogether before the successful implementation of redesigned/revamped system---Moreover back up data could have been used for preparation of 'accounts during the transitional from old to new reporting system---Redesigning and revamping of financial reporting system, in circumstances, could not be considered as a cogent reason for delay in filing of accounts---Limited resources could not be considered as a valid reason for not filing the subject accounts within due time as the company must fulfil its statutory obligations-Arguments advanced on part of the company did not justify late submission of quarterly accounts---Default under S.245(1)(b) of the Companies Ordinance, 1984 having been established, the Chief Executive and Directors of the company had made themselves liable for fine under S.245(3) of the Companies Ordinance, 1984---Keeping in view the financial crunch being faced by the company, a lenient view was taken and instead of imposing a maximum fine of Rs.100,000 on each Director of the company, fine of Rs.20,000 on each Director and Chief Executive of the company was imposed.

Syed Ali Sarwar, Authorized Representative (Chief Internal Auditor; Messrs Progressive Insurance Company Ltd. Present.

2009 C L D 1615

[Securities and Exchange Commission of Pakistan]

Before Ali Azeem Ikram, Director (Enforcement)

ABDUL MUQTADIR SIDDIQUI, PARTNER, MUQTADIR & CO., CHARTERED ACCOUNTANTS: In the matter of

Show-Cause Notice No.EMD/233/701/2008-1942, dated 27th January, 2009, decided 6th May, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.255 & 260---Failure of auditors to perform audit of the company as per standards and guidelines---Imposition of penalty---During the inspection of the company conducted under S.231 of the Companies Ordinance, 1984, it was noticed that the company had not been maintaining proper books of the account as per requirement of the Ordinance---Neglecting said matters, the Auditors failed to bring out material facts about the affairs of the company in Auditors reports---Reply was received from the Auditors, however the issues raised in show-cause notice were not adequately and properly addressed by the Auditors---Auditors had failed to perform the audit of the financial statements of the company as per the standards and guidelines provided in auditing framework and had not discharged their duties of making a truthful report to the members of the company and had been grossly negligent in conducting their professional duties---Due to said facts the audit reports for the relevant year were misleading and were not in conformity with the requirements of S.255 of the Companies Ordinance, 1984 and were untrue and failed to bring out material facts about the affairs of the company---Auditors also failed to perform their duties diligently and/acted too indulgently to provide advantage to the management of the company---Said violations had attracted the penal provisions contained in subsections (1) & (2) of S.260 of the Companies Ordinance, 1984---Facts of the case warranted no sympathy for the Auditors and required a stern action against them---Penalty of rupees one thousand hundred Rs.100,000 was imposed on the Auditors.

Nemo present for Abdul Muqtadir Siddiqui, Partner, Muqtadir & Co., Chartered Accountants.

2009 C L D 1621

[Securities and Exchange Commission of Pakistan]

Before Hizbullah Siddiqui, Director (SMD)

MKA SECURITIES (PVT.) LTD., MEMBER KARACHI STOCK EXCHANGE, ("KSE"): In the matter of

Show-Cause Notice No.SM/KSE-C/Mist,/2009, dated 19th June, 2009, decided on 26th June, 2009.

Brokers and Agents Registration Rules, 2001---

----Rr.4, 8 & 12---Unauthorized pledge/transfer of securities of the company---Suspension of registration of the company---Over the past six months, the Securities and Exchange Commission had received significant numbers of investors' complaints pertaining to the alleged non-transfer of shares -to/from the complainants' account and non-payment of funds---Company failed to file any response to the notice issued by the Commission and also remained absent on the date of hearing without any intimation to the Commission despite service of the notice---Effect---Company had defaulted in compliance with the provisions of. Brokers and Agents Registration Rules, 2001, and applicable laws by neglecting to submit requisite correspondence and documents as advised by the Commission---Conduct of the company was in clear violation of R.12 of the Rules which had made it mandatory upon the broker holding certificate of registration under the said Rules to abide by the Code of Conduct strictly and maintain high standards of integrity, promptitude and fairness in the conduct of all its business---Company had also misused the securities of its clients by unauthorized pledges/transfers---Company had clearly neglected and failed to comply with requirements of Rr.4 & 12 of the Brokers and Agents Registration Rules, 2001 and various instructions issued by the Commission from time to time---Continuation of the company in securities business was not in the interest of investors---Violation of Rules and Regulations and non-compliance with instructions of the Commission was a serious matter which warranted stern action---In the public interest, for the protection of investors, to preserve capital market integrity, in exercise of powers contained in R.8 of Brokers and Agents Registration Rules, 2001, company's registration was suspended till claims against the company, in the light of the investors complaints were settled in accordance with law---Failure of the company to settle the claims, could result in cancellation of registration as provided in the said Rules.

2009 C L D 1625

[Securities and Exchange Commission of Pakistan]

Before Hizbullah Siddiqui, Director (SMD)

CLICK TRADE LIMITED, MEMBER KARACHI STOCK EXCHANGE ("KSE"): In the matter of

Show-Cause Notice No.SM/KSE-C/Misc./2009, dated 19th June, 2009, decided on 26th June, 2009.

Brokers and Agents Registration Rules, 2001---

----Rr.4, 8 & 12---Unauthorized pledge/transfer of securities of investors by the company---Effect---Securities and Exchange Commission received complaints against the company pertaining to the alleged non-transfer of shares to/from the complainants' CDA account and non-payment of funds which had been attributed to the unauthorized pledge/transfer of securities by the company---Company vide its letter had communicated admission of investors' complaints/claims filed against it---Company not only had misused the securities of its clients by-way of unauthorized pledges/transfers, but had also failed to resolve outstanding complaints/claims of investors, despite a lapse of over eight months---Such conduct of the company was in clear violation of R.12 of Brokers and Agents Registration Rules, 2001, which had made it mandatory upon broker holding certificate of registration under Rules, 2001 to abide by the Code of Conduct strictly and maintain high standards of integrity, Promptitude and fairness in the conduct of all its business as stipulated in the said Rules---Company had clearly neglected and failed to comply with the requirements of Rr.4 & 12 of Brokers and Agents Registration Rules, 2001 and various instructions by the Commission from time to time---Violation of Rules and Regulations and non-compliance with the instructions of the Commission was a serious matter and warranted stern action---In the public interest for the protection of investors and to preserve capital market integrity, in exercise of powers conferred by R.8 of the Brokers and Agents Registration Rules, 2001; Commission suspended registration of the company till claims against the company in the light of the investors' claims could be ascertained and settled according to law---Company's failure to settle said claims, could result in cancellation of registration as provided under the Rules.

Zafar Habib, Chief Executive/Nominee Director, Present.

Tahir Mahmood Kiani, Deputy Director (SMD), Ms. Jania Ubaid, Assistant Director (SM) and Ibrahim Ahmad Mian, Assistant Director (Law) Present.

2009 C L D 1629

[Securities and Exchange Commission of Pakistan]

Before Hizbullah Siddiqui, Director (SMD)

CAPITAL ONE EQUITIES LIMITED, MEMBER KARACHI STOCK EXCHANGE ("KSE"): In the matter of

Show-Cause Notice No.SM/KSE-C/Misc./2009, dated 19th June, 2009, decided on 26th June, 2009.

Brokers and Agents Registration Rules, 2001---

----Rr.4, 8 & 12---Non-transfer of shares to/from the accounts of investors and non-payment of funds---Unauthorized pledge/transfer of securities of investors by the company---Suspension of the registration of the company---Over the last six months the Commission had received number of complainants of the investors pertaining to the alleged non-transfer of shares to complainants' C.D.C. account and non-payment of funds, which had been attributed to the unauthorized. pledge/transfer of securities by the company---Company was afforded an opportunity of hearing, but it failed to appear for filing any response to the notice issued by the Commission---Company had defaulted in compliance with provisions ,of Rules and applicable laws by neglecting to submit requisite correspondence---Such conduct of the company was in clear violation of R.12 of Brokers and Agents Registration Rules, 2001, which made it mandatory upon a broker holding certificate of registration under the Rules to abide strictly by the Code of Conduct and maintain high standards of integrity, promptitude and fairness in the conduct of all its business---Company had misused the securities of its clients by way of unauthorized pledges/transfers and had neglected and failed to comply with the requirements of Rr.4 & 12 of the Brokers and Agents Registration Rules, 2001 and various instructions issued by the Commission from time to time---Continuation of company in securities business was not in the interest of the investors---Violation of Rules and Regulations and non-compliance with-instructions of the Commission was a serious matter which warranted stern action---In public interest, for the protection of investors and to preserve capital market integrity; and taking into consideration that the company had neither verbally nor through any written submission, produced any evidence in its defence, Commission, in exercise of power conferred by R.8 of Brokers and Agents Registration Rules, 2001, ordered the suspension of registration of the company, till claims against the company in the light of investors could be ascertained and settled in accordance with law---Failure of the company to settle the claims, could result in cancellation of its registration.

2009 C L D 1633

[Securities and Exchange Commission of Pakistan]

Before Muhammad Sohail Dayala, Commissioner (SAD) and S. Tariq A. Hussain, Commissioner (LD)

HAROON SHIEKH and others---Appellants

Versus

DIRECTOR (NBFC DEPARTMENT) and another---Respondents

Appeals Nos.65 and 66 of 2006, decided on 20th July, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.158 & 245---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure of the company to hold Annual General Meetings and failure to prepare and transfer to its members etc. its quarterly profit and loss accounts and balance sheets---Imposition of penalty--Appeal---Company had failed to hold Annual General Meetings within the stipulated time as required under S.158(1) of the Companies Ordinance, 1984--Company which was also required under clause (a) of S.245(1) of the Companies Ordinance, 1984 to prepare and transmit to its members and the relevant Stock Exchange Registrar and the Commission its quarterly profit and loss accounts and balance sheet for relevant quarters, had failed to comply with said mandatory provisions of the Ordinance which necessitated action against the Directors of the company under S.245(3) of Companies Ordinance, 1984---Fine of Rs.50,000 on each Director of the company was imposed for not holding Annual General Meetings within time in violation of S.158(4) of Companies Ordinance, 1984 and fine of Rs.100,000 on each Director for each quarter in which the quarterly accounts were not submitted as required under clause (a) of S.245(1) of the Companies Ordinance, 1984---Validity---Penalties were imposed on the Directors of the company in their personal capacity, they were required to pay the penalties from their own resources---Plea that company's Bank account having been frozen, finances were not available to file appeal, was without merit as the appellants were required to bear the expenses of filing appeal from their own resources---No ground having been made out for condonation of delay in filing appeal, appeal filed by the appellants, was liable to be dismissed on the ground of limitation without going into the merits of the case.

1999 SCMR 1326 and 2008 SCMR 54 rel.

Shafiq Ahmed for Appellant.

Rashid Paracha, Director (NBFC), Syed Asad Haider, Joint Director (NBFC) and Vinod Sitani, Joint Director (NBFC) for Respondents.

2009 C L D 1636

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Executive Director (Enforcement)

DEWAN SUGAR MILLS LTD.: In the matter of

Show-Cause Notice No. EMD/233/339/2002-2899 dated 24th April, 2009, decided 30th June, 2009.

Companies Ordinance (XLVII of 1984)---

----Ss.208 & 476---Investment in associated companies without obtaining a special resolution and without charging interest--Imposition of penalty---Examination of annual accounts of the company for the relevant year had revealed that huge amount was outstanding against advances extended by the company to its associated undertakings---Said advances were extended without obtaining the authority of a special resolution in terms of S.208 of the Companies Ordinance, 1984 and no interest/mark­up was being charged on said amount---Directors of the company had failed to comply with provisions of S.208 of the Companies Ordinance, 1984 in respect of advances extended by the company to its associated companies---Said advances were not normal trade credit---Due to the interest/mark-up free nature of those unauthorized advances, huge loss had been caused to the company---Intent and purpose of S,208 of the Companies Ordinance, 1984 was to protect company against diversion of a company's funds, to pass an undue benefit to associated companies or undertakings of a company at the cost of the shareholders of such company---Due to that reason authority of special resolution of shareholders of a company was mandated by the law for making any investments, loans, advances etc. to associated companies or undertakings---Any leniency while deciding the cases involving such instances would defeat the whole purpose of a legislation---Circumstances of the case warranted no sympathy for the Directors of the company who had ruthlessly allowed misuse of company's funds for the benefit of associated companies causing huge loss to the company and its shareholders---Provisions of S.208 of the Companies Ordinance, 1984 having been violated, Directors of the company were liable for the penalties as prescribed by subsection (3) of S.208 of Ordinance---Fine of Rs.3,500,000 in. aggregate on Chief Executive and five Directors of the company, was imposed for contravening the provisions of subsection (1) .of S.208 of the Companies Ordinance, 1984, accordingly.

Syed Riazuddin present.

2009 C L D 1652

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

GUARDIAN SECURITIES (PVT.) LTD.: . In the matter of

Show-Cause Notice No. 1(03)/Wash/LSE/MSW/SMD/2009/04 dated 8th May, 2009, decided 22nd June, 2009.

Brokers and Agents Registration Rules, 2001---

----R.8 & Sched.---Purchasing of shares by the company in its Proprietary Accounts in violation of rules and regulations--Imposition of penalty---Company had executed client's trades in its Proprietary Account through different Stock Exchange members---Execution of said trades had shown that company had failed to maintain high standards of integrity, promptitude and fairness in conduct of its business---Company had further failed to comply with specific directives issued by the Commission and the stock exchange and it was the responsibility of the company to keep itself well-informed about applicable rules and regulations to avoid any violation of the same---Company, by executing the trades in question had violated clauses A1, A5 and D1 (2) of the Code of Conduct contained in the Third Schedule of the Brokers and Agents Registration Rules, 2001---Violation of the rules and regulations was a very serious matter, however, in view of fact that representatives of the company had assured that in future they would be more careful, a fine of Rs.50,000 (Fifty Thousand) was imposed on the company in exercise of power under R.8(b) of the Brokers and Agents Registration Rules, 2001.

Mohsin Abbas, Chief Executive Officer and Faisal Samar, Settlement Department Present.

Muhammad Atif Hameed, Deputy Director (SMD), Muhammad Ali, Assistant Director and Ms. Tayyaba Nisar, Assistant Director Present.

2009 C L D 1658

[Securities and Exchange Commission of Pakistan]

Before Hizbullah Siddiqui, Director (SMD)

PRUDENTIAL SECURITIES LIMITED, MEMBER KARACHI STOCK EXCHANGE ("KSE"): In the matter of

Show-Cause Notice No.SM/KSE-C/Misc./2009, dated 19th June, 2009, decided 26th June, 2009.

Brokers and Agents Registration Rules, 2001---

----Rr.4, 8, 12 & Sched.---Non-transfer of shares---Security and Exchange Commission, over the past five months had received complaints against the company relating to the alleged non-transfer of shares to/from the complainants' CDA accounts and non-payment of funds, which had been attributed to the unauthorized pledge/transfer of the securities by the company--In addition to the complaints, Karachi Stock Exchange also reported a substantial number of investor complaints/claims filed against the company during said period---Company had admitted the non transfer of shares in the clients' respective CDA accounts and committed timelines for the transfer of those shares---No concrete steps were taken by the company for the resolution of pending investor's complaints/claims---Company had not only misused the securities of its clients by way of unauthorized pledge/transfer, but also had failed to resolve outstanding investor complaints/claims despite a lapse of oven five months---Such conduct of the company was a clear violation of R.12 of Brokers and Agents Registration Rules, 2001 Which made it mandatory upon a broker holding certificate of registration under the said Rules to abide by the Code of Conduct strictly and maintain high standards of integrity, promptitude and fairness in the conduct of all his business as stipulated in said Rules, 2001---Company had clearly neglected and failed to comply with requirement of R.4 or 12 of Brokers and Agents Registration Rules, 2001 and various instructions issued by the Commission from time to time---Violation of Rules and Regulations and non-compliance with the instructions of the Commission was a serious matter which warranted stern action---Continuation of the company in the securities business, was not in the interest of the investors---In public interest for the protection of the investors and to preserve capital market integrity, in exercise of powers conferred by R.8 of the Brokers and Agents Registration Rules, 2001, suspension of registration of the company was ordered till claims against the company in the light of the investor complaints could be ascertained and settled in accordance with law-Company's failure to settle the claims, could result in cancellation of the registration as provided in the Rules, 2001.

Osama Bin Shoaib, Chief Executive/Nominee Director.

Abbas Mirza, DGM- Operations for KSE.

Tahir Mahmood Kiani, Deputy Director (SMD), Ms. Najia Ubaid, Assistant Director (SM) and Ibrahim Ahmad Mian, Assistant Director (Law) Present.

2009 C L D 173

[Supreme Court of Pakistan]

Present: Mian Hamid Farooq and Syed Zawwar Hussain Jaffery, JJ

AZIZULLAH SHEIKH and another---Petitioners

Versus

STANDARD CHARTERED'BANK LTD.---Respondent

Civil Petition No.299-K of 2007, decided on 22nd October, 2008.

[On appeal from the judgment dated 22-3-2007 of the High Court of Sindh at Karachi, passed in Spl. H.C.A. No.92 of 2006].

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 9(1)---Contract Act (IX of 1872), S.73---Suit for recovery of damages with interest---Breach of contract---Damages, claim for---Party claiming damages had to firstly plead and then prove by sufficient, trustworthy, independent and cogent evidence that the concluded agreement existed between the parties, the other party committed breach of contract, such breach entitled the first party to damages and the foremost factor was quantum of damages---Principles for ascertaining the quantum of general and special damages stated.

Gohar Ali v. Sher Zaman Khattak Civil Appeal Nos. 2763 and 2764 of 2001; Ahmed Saeed Kirmani v. Muslim Commercial Bank Ltd. 1993 SCMR 441 and Islamic Republic of Pakistan v. Sh. Nawab Din PLJ 2002 Lah. 1998 (sic) ref.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 9(1)---Contract Act (IX of 1872), S.73---Suit for recovery of damages with interest---Breach of contract---Damages, claim for---Plaintiffs failed to produce any evidence to show that in fact they suffered any loss due to breach of contract---Solitary statement of one plaintiff was not sufficient to decree the colossal suit amount as plaintiffs' witness did not state anything about damages---Plaintiffs through his failure to produce evidence totally failed to prove that due to breach of contract they were in fact entitled to damages and to what extent, which were sine qua non for the grant of damages under S.73, Contract Act, 1872---Held, plaintiffs, in circumstances, had not proved that they suffered any loss and also failed to prove, through production of evidence on record, that they were entitled for decree of the total amount claimed in the suit.

Suleman Habibullah, Advocate-on-Record for Petitioners.

Nemo for Respondent.

Date of hearing: 22nd October, 2008.

2009 C L D 189

[Supreme Court of Pakistan]

Present: Saiyed Saeed Ashhad and Sheikh Hakim Ali, JJ

Mst AKHTAR BEGUM---Petitioner

Versus

MUSLIM COMMERCIAL BANK LTD.---Respondent

Civil Petitions Nos.343-K and 344-K of 2007, decided on 21st July, 2008.

[On appeal from the order dated 10-4-2007 passed by High Court of Sindh at Karachi in Appeals Nos.22 and 23 2005].

(a) Financial Institutions (Recovery of Loans) Ordinance (LXVI of 2001)---

----S.9---Qanun-e-Shandat (10 of 1984), Art.59---Civil Procedure Code (V of 1908), S.12 (2)---Decree, setting aside of---Fraud and misrepresentation---Comparison of signatures---Report of Forensic Science Laboratory---Suit filed by bank was decreed against petitioner in her capacity of guarantor---Petitioner assailed judgment and decree on the ground that she did not sign any document in favour of bank, including mortgage deed and general power of attorney---Validity---Banking Court must have referred the same to handwriting expert for obtaining his opinion whether purported signatures on disputed documents were in handwriting of petitioner or were forged or manipulated by somebody else---Such important aspect of the case not only escaped attention of Banking Court but High Court also did not take notice thereof--Any person could not be made liable for making payment which he or she was otherwise not legally bound to pay but was pressurized and forced to pay on the ground of some forged or manipulated documents---Supreme Court, in view of persistent, strong and vehemence denial of petitioner of her signatures on mortgage deed, power of attorney etc. made comparison of her denied signatures with her admitted signatures and further directed comparison by handwriting expert to conclusively hold that disputed documents had signatures of petitioner---Supreme Court also directed that proceedings against petitioner would be taken after the report of handwriting expert was received by concerned Banking Court in terms of the report---Appeal was allowed.

(b) Administration of justice---

----Liability of arty party---Determination---Duty of Court---Party has right to seek and demand every possible assistance from Court of law and to hold him/her responsible only when he / she is found to have acted contrary to law.

Rizwan Ahmed Siddiqui, Advocate Supreme Court with K.A. Wahab, Advocate-on-Record for Petitioner.

Syed Shafiq Ahmed, Officer, G.R.I., SAMG (MCB).

Respondent not represented.

2009 C L D 212

[Supreme Court of Pakistan]

Present: Tassaduq Hussain Jillani and Syed Sakhi Hussain Bukhari, JJ

MUHAMMAD KALEEM RATHORE---Petitioner

Versus

INSTITUTE OF CHARTERED ACCOUNTANTS and 4 others---Respondents

Civil Petition No.2557-L of 2003, decided on 23rd October, 2008.

(On appeal against the judgment dated 25-6-2003 and 24-7-2003 passed by Lahore High Court, Lahore, in Writ Petition No.3582 of 2003 and I.C.A. No.394 of 2003).

(a) Securities and Exchange Ordinance (XVII of 1969)---

----S. 34 & Preamble---Companies Ordinance (XVVII of 1984), Preamble---Quality Control Review Programme of the Institute of Chartered Accountants issued by Securities and Exchange Commission of Pakistan---Object and purpose---Functions and objective of Securities and Exchange Commission of Pakistan---Companies Ordinance, 1984 is a general law which has been enacted for regulating all matters relatable to all types of companies including the companies which are listed---Quality Control Review Programme of Institute of Chartered Accountants issued by the Securities Exchange Commission is reflective of Commission's intent to protect investers' interests by ensuring that the external auditor of a listed company has a certain level of professional competence i.e. has obtained a satisfactory rating under the Quality Control Review Programme of the Institute of Chartered Accountants which is not only in accord with the Preamble of the Securities and Exchange Ordinance, 1969 but the Securities and Exchange Commission has been specifically empowered by S.34, Security and Exchange Ordinance, 1969 to direct the Stock Exchange to make regulations---Quality Control Review Programme is a directive/resolution of the kind stipulated in S.34(4) of the Securities and Exchange Ordinance 1969---Quality Control Review Programme issued by the Institute of Chartered Accountants under the directions of Security Exchange Commission does not reflect any jurisdictional defect and is in accord with the letter and spirit of the Securities and Exchange Ordinance, 1969.

(b) Securities and Exchange Ordinance (XVII of 1969)---

----S. 34---Companies Ordinance (XVVII of 1984), S.254 & Preamble---Quality Control Review Programme of the Institute of Chartered Accountants issued by Securities and Exchange Commission as condition precedent for any appointment as external auditor of a listed company is in no way violative of any provision of Companies Ordinance, 1984 much less S.254 of the said Ordinance.

(c) Securities and Exchange Ordinance (XVII of 1969)---

----S. 34---Constitution of Pakistan (1973), Arts.18 & 25---Equality before law---Permissible and reasonable classification---Quality Control Review Programme of the Institute of Chartered Accountants issued by Securities and Exchange Commission, as condition precedent for any appointment as external auditor of a listed company, having been issued by the Commission by virtue of the regulatory powers vested in it, fall within permissible acts/actions contemplated under Art.18 of the Constitution and is not a clog on free trade or profession---Quality Control Review Programme has been issued for a class of companies and it is applicable to companies which are desirous of a common object i.e. to be listed in Stock Exchange; similarly the Quality Control Review Programme is meant only for those which are desirous to be listed companies, therefore Review Programme in question falls squarely within the ambit of permissible and reasonable classification and is not violative of Art.25 of the Constitution---Principles.

Jibendra Kishore Achharya Chowdhury v. The Province of East Pakistan and Secretary Finance and Revenue (Revenue) Department, Government of East Pakistan PLD 1957 SC (Pak) 9 distinguished.

Brig. (Retd) F.B. All and another v. The State PLD 1975 SC 506 ref.

(d) Securities and Exchange Ordinance (XVII of 1969)---

----S. 34---Quality Control Review Programme of the Institute of Chartered Accountants issued by Securities and Exchange Commission as condition precedent for any appointment of external audit of a listed company was a detailed Code of Corporate Governance issued by the Commission under the mandate of its duties at a time when the International Corporate world was facing the shocks of the scandals---Brief reference to the change brought about through legislative reforms in United States quoted.

Be Careful What You Wish for: How Accountants and Congress Created the Problem of Auditor Independence [(45 B.C.L. Rev. 741 (2004)] ref.

Kh. Abrar Majal, Advocate Supreme Court for Petitioner.

Nemo for Respondents Nos. 1 and 2.

Kh. Saeed-uz-Zafar, Advocate Supreme Court along with M. Asif Iqbal, ACA, Director ICAP.

Date of hearing: 23rd October, 2008.

2009 C L D 398

[Supreme Court of Pakistan]

Present: Sabihuddin Ahmed and Sarmad Jalal Osmany, JJ

JAVED PAREKH----Appellant

Versus

MUHAMMAD SAFDAR MALIK----Respondent

Civil Appeal No.1712 of 2008, decided on 2nd December, 2008.

(On appeal against the order, dated 25-9-2008 passed by High Court of Sindh, Karachi in 1st Appeal No.4 of 2007).

Civil Procedure Code (V of 1908)---

----O. XXXVII, R.2---Suit for recovery of amount---Order for furnishing security to appellant by High Court for decreed amount viz. Rs.25,80,000 which was done by submitting the title deeds of property owned by him together with valuation certificate indicating the value of property as about 40,00,000---Nazir of High Court also submitted the report before the Court informing that value of the property in question ranged between Rs.30,00,000 to Rs.32,00,000---High Court, on the basis of said report of the Nazir of the Court directed that the property offered could not be accepted as security because its value was less than Rs.40,00,000 and consequently directed the appellant to furnish fresh security in the amount of Rs.40,00,000 within one month---Validity---Held, it was totally incomprehensible that when the title documents in respect of the property were admitted to be valued at more than the amount ordered by the Court, how the Court was persuaded to hold that such surety could not be accepted---Valuation certificate furnished by the appellant might have represented an exaggerated value, but the fact remained that the Nazir himself had found the property worth more than the amount directed to be furnished as security---No reason for reviewing the earlier order passed by the High Court had been assigned nor it was shown as to on what basis the figure of Rs.40,00,000 was arrived at---Supreme Court, allowed the appeal, set aside the impugned order and directed that the security furnished before the High Court be accepted---Supreme Court, however, observed that greater care was needed to be undertaken by the High Court to help parties in avoiding litigation before the Supreme Court consuming considerable time and expense and causing delay in delivery of justice.

Anwar Hussain, Advocate Supreme Court for Appellant.

Ghulam Qadir Jatoi, Advocate-on-Record for Respondent.

Date of hearing: 2nd December, 2008.

2009 C L D 594

[Supreme Court of Pakistan]

Present: Abdul Hameed Dogar, C.J., Ijaz-ul-Hassan and Ch. Ejaz Yousaf, JJ

MUMTAZ-UD-DIN FEROZE---Petitioner

Versus

Sheikh IFTIKHAR ADIL and others-Respondents

Civil Petition for Leave to Appeal No.782 of 2008, decided on 15th December, 2008.

(On appeal from the judgment dated 4-6-2008 in R.F.A. No.142 of 2004 passed by the Islamabad High Court, Islamabad).

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

----S.18 (2)---Civil Procedure Code (V of 1908), O.XXI, R.66 Money decree---Execution---Highest bidder---Changing mode of recovery---In execution of decree passed by Banking Court, mortgaged property was put to auction for three times but it could not fetch the reserved price---Bid offered by petitioner was accepted by Banking Court---Plea raised by judgment debtors was that Banking Court in execution of decree having once adhered to procedure prescribed by Civil Procedure Code, 1908, could not have switched over to any other mode-Validity--Banking Court, on application of decree holder, was at liberty under S.18 (2) of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, to recover amount covered by decree, in accordance with provisions of Civil Procedure Code, 1908 or any other law or in such other manner as it might have deemed fit---Consideration and approval of offer made by petitioner by Banking Court was neither illegal nor unjustified particularly when inspite of all efforts having been made previously, including those made by decree holder, even judgment debtors failed to procure a better offer-Approval of offer made by petitioner, which was more than the maximum price offered in public auction was just and proper-Supreme Court converted petition for leave to appeal into appeal, set aside judgment and decree passed by High Court and restored that of Banking Court--Appeal was allowed.

Mst. Asma Zafarul Hassan v. Messrs United Bank Ltd. and another 1981 SCMR 108; Muhammad Ikhlaq Memon v. Zakaria Ghani and others PLD 2005 SC 819; Hudaybia Textile Mills and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512; Ghulam Abbas v. Zohra Bibi and another PLD 1972 SC 337 and Janak Rai v. Gurdial Singh AIR 1967 SC 608 ref.

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

----O.XXI, R.90---Auction proceedings, setting aside of---Irregularities---Effect---Non-compliance of provisions of Civil Procedure Code, 1908, with regard to proclamation of sale, its publication and conduct of sale in execution are not material irregularities and cannot be termed as illegalities thereby rendering sale as nullity-Objection after completion of sale should not ordinarily be allowed except on very limited grounds like fraud etc. otherwise no auction sale can ever be completed.

Mian Muhammad Abdul Khaliq v. M. Abdul Jabbar Khan and others PLD 1953 Lah. 147 and Nanhelal and another v. Umrao Sindh AIR 1931 PC 33 rel.

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

----O.XXI, R.72-Auction purchaser---Decree holder and bona fide purchaser-Rights-Distinction has to be drawn between decree holder who comes to purchase under his own decree and bona fide purchaser who comes and gets sate to execution of decree to which he was not party-Where third party is bona fide auction purchaser, his interest in sale of auction has to be protected.

Agha Tariq Mehmood, Advocate Supreme Court and Mehr Khan Malik, Advocate-on-Record for Petitioner.

Syed Ali Zafar, Advocate Supreme Court and Arshad Ali Chaudhry, Advocate-on-Record for Respondents Nos. 1 to 6.

Raja Muhammad Akram, Sr. Advocate Supreme Court and Salman Akrarn Raja, Advocate Supreme Court for Respondent No.7.

Date of hearing: 8th October, 2008.

2009 C L D 610

[Supreme Court of Pakistan]

Present: Mian Hamid Farooq and Sabihuddin Ahmed, JJ

STATE LIFE INSURANCE CORPORATION and others---Petitioners

Versus

JAFFAR HUSSAIN and others---Respondents

Civil Petition No.528-L of 2004, decided on 2nd January, 2009.

(On appeal against the order dated 19-11-2003 passed by Lahore High Court, Lahore in Writ Petition No.9770 of 2003).

(a) Constitution of Pakistan (1973)---

----Art. 199---Constitutional jurisdiction of High Court---Scope---High Court, under Art.199 of the Constitution is not entitled to substitute its own direction for that of the authority whose decision is questioned or interfered with findings of facts arrived at upon a proper appreciation of the entire evidence or material available before such authority, nevertheless court could always oversee whether discretion has been exercised upon sound judicial principles or whether the findings of facts are not premised on misreading or non-reading of evidence.

(b) Insurance Ordinance (XXXIX of 2000)---

----S. 118---Constitution of Pakistan (1973), Art.185(3)---Life insurance policy--Non-payment of death claim by the Insurance Company on the ground that insurant had failed to pay the renewal fee of Rs.660 of the policy on account of delay of nine months (excluding the grace period of three months) in payment of premium---Validity---Held, repudiation of the claim merely on account of non-payment of late fee of a paltry amount of Rs.660 was entirely unjustified-Excessive use of lawful power was also unlawful and could attract the judicial review jurisdiction of superior courts---Insurance company, in circumstances, was required to disburse the entire claim arising to the policy including any bonuses that might have incurred thereupon.

Independent Newspaper Corporation (Pvt.) Ltd. and another v. Chairman, Fourth Wage Board and Implementation Tribunal for Newspaper Employees, Government of Pakistan, Islamabad and 2 others 1993 SCMR 1533 fol.

(c) Judicial review---

----Scope---Excessive use of lawful power was unlawful and could attract judicial review jurisdiction of superior Courts.

Independent Newspaper Corporation (Pvt.) Ltd. and another v. Chairman, Fourth Wage Board and Implementation Tribunal for Newspaper Employees, Government of Pakistan, Islamabad and 2 others 1993 SCMR 1533 fol.

(d) Insurance Ordinance (XXXIX of 2000)---

----S. 118---Life insurance policy-Non-payment of death claim by the Insurance company on the ground that insurant had failed to pay renewal fee of Rs.660 of the policy on account of delay of nine months (excluding the grace period of three months) in payment of premium---Claim for liquidated damages by insurant---Validity---Held, under S.118, Insurance Ordinance, 2000 a claim for liquidated damages arose only when the person entitled to claim had applied with all requirements including the filing of complete papers---In the present case, it could not be denied that some fault, even of a technical nature, was certainly attributable to the claimant in failing to disburse late fee and the required medical certificate for renewal of the policy which made it possible for the Insurance Company to contest the claim---Claimant, in circumstances, could not assert that all requirements including filing of complete papers were complied with by the claimant---Claim of liquidated damages, therefore, could not be sustained.

Sher Zaman Khan, Advocate Supreme Court and Mehmood A. Qureshi, Advocate-on-Record for Petitioners.

Liaquat Ali Butt, Advocate Supreme Court for Respondent No.1.

2009 C L D 645

[Supreme Court of Pakistan]

Present: Mian Hamid Farooq, Muhammad Farrukh Mahmud and Sabihuddin Ahmed, JJ

Messrs AL-MADAN COAL COMPANY (PVT.) LTD. and others---Petitioners

Versus

REGIONAL DEVELOPMENT FINANCE CORPORATION-Respondent

Civil Petition No.2592-L of 2004, decided on 6th January, 2009.

(On appeal from judgment dated 31-5-2004 of the Lahore High Court, Lahore passed in R.F.A. No.403 of 1999).

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

----S.10---Constitution of Pakistan (1973), Art. 185 (3)---Recovery of loan---Leave to defend the suit, denial of---Defendants obtained financial facility under Locally Manufactured Machinery (LMM) Scheme and executed required documents---On the specific request of defendants, showing full satisfaction about quantum and quality of machinery supplied to it, bank disbursed amount to manufacturer---In suit filed by financial institution, Banking Court refused to grant leave to defend the suit and passed decree against defendants---Validity---Defendants could not be allowed to blow hot and cold in the same breath as on one hand they secured machinery and asked financial institution to make payment to supplier and when financial institution demanded outstanding liabilities, defendants opted to deny execution of documents---Defence set up in defendants' application for leave to defend the suit was evasive, improbable and no substantial questions of law or facts were raised therein which was rightly rejected by Banking Court---Supreme Court declined to reverse findings of two courts below which were based on facts of the case and law on the subject---Leave to appeal was refused.

Muhammad Arshad v. Citibank N.A. 2005 CLD 1237; Al-Hadayat Textiles v. State Bank of Pakistan, 2004 CKD 435 and Muhammad Arshad v. Citibank N.A. 2006 CKD 1011 ref.

Malik Saeed Hassan, Sr. Advocate Supreme Court for Petitioners.

Shahid Hamid, Sr. Advocate Supreme Court and Mehmood-ul-Islam, Advocate-on-Record.

Date of hearing: 6th January, 2009.

2009 C L D 741

[Supreme Court of Pakistan]

Present: Mian Hamid Farooq and Muhammad Farrukh Mahmud, JJ

MUHAMMAD IQBAL and others---Petitioners

Versus

Messrs SAMPAK PAPER AND BOARD MILLS and others---Respondents

Civil Petition No.538-L of 2004, decided on 16th January, 2009.

(On appeal from order, dated 5-12-2003 of the Lahore High Court, Lahore passed in C.O. No.76 of 1998).

Companies Ordinance (XLVII of 1984)---

----S. 405---Constitution of Pakistan (1973), Art.185(3)---Liabilities of company---Settlement of claims---Procedure---Proposed scheme for distribution of sale proceeds received from sale of assets was approved by Company Judge and Official Liquidator had made proportionate payments to ex-employees of the company---Plea raised by ex-employees of the company was that order regarding scheme for distribution of sale proceeds should have been a detailed order and after paying revenue tax etc. total claim of ex-employees of the company should have been satisfied---Validity---Even admitted claims of secured creditors and first charge holders could not be satisfied from sale proceeds of assets of the company thus ex-employees of the company were treated as preferential claimants and were rightly disbursed the amount in accordance with law and their claims were rightly satisfied---No detailed order was required for distribution of sale proceeds as company had been ordered to be wound up through detailed order, thereafter it was function of Official Liquidator to receive claims from creditors, scrutinize the claims and furnish his recommendations before Company Judge seeking order for implementation of final scheme for distribution---None including petitioner, raised objection to proposed scheme of distribution, therefore, it was rightly and validly approved by Company Judge and Company was finally directed to distribute the amounts to secured creditors---Order passed by Company Judge for distribution of sale proceeds among creditors was justified and Supreme Court declined to interfere in the same---Leave to appeal was refused.

Ch. Muhammad Amin Javed, Advocate Supreme Court for Petitioners.

Nemo for Respondent No.5.

2009 C L D 756

[Supreme Court of Pakistan]

Present: Sabihuddin Ahmad and Sarmad Jalal Osmany, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN---Petitioner

Versus

MUHAMNIAD AYUB STONE CRUSHERS and others---Respondents

C.P.L.A. No.88-K of 2009, decided on 23rd February, 2009.

(On appeal from judgment of High Court of Sindh at Karachi dated 12-12-2008 passed in H.C.A. No.274 of 2007).

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----S. 19---Industrial Development Bank of Pakistan Ordinance (XXXI of 1961), S.39---Civil Procedure Code (V of 1908), O.XXI, R.52 & O.XXXIV, R.13---Transfer of Property Act (IV of 1882), Ss.48, 50 & 78---Registration Act (XVI of 1908), S.50---Execution proceedings---Mortgage of same property by borrower in favour of Bank 'N' through prior registered deed and then in favour of another Bank by deposit of title deed---Sale of property by Banking Court to satisfy decree of said another Bank, but failure of Official Assignee to deliver possession of property to auction-purchaser for being attached by another court---Application by Bank 'N' for recalling such order of sale for having been obtained by concealment of its prior registered charge on property already attached by another Court in execution of decree---Acceptance of such application by Banking Court with direction to said another Bank to return sale proceeds to Bank 'N'---Validity---Registered mortgage in favour of Bank 'N' was prior in time, while simple mortgage by deposit of title deed in favour of said other Bank was later in time and unregistered---Other Bank's case was not that due to fraud, misrepresentation or gross negligence of Bank 'N' the other Bank had been induced to advance money to judgment-debtor on security of already mortgaged property---Registered mortgage would be a notice to entire world of factum of its registration---Other Bank should have made efforts and exercise due care and diligence before advancing amount to judgment-debtor on strength of property over which Bank 'N' had already a registered mortgage---Registered mortgage, even though later in time, would take priority over an earlier unregistered mortgage---Sale proceeds as per O.XXXIV, R.13, C.P.C., would be applied towards satisfaction of a prior mortgagee's debt before a subsequent mortgage could have any interest therein---Other Bank, despite having full knowledge about property being in custody of another Court on basis of attachment, had approached Banking Court for its sale and started inviting purchase offers on its own---Only Banking Court could determine question of priority of interest as between both the Banks and NBP---Such order of sale was not only illegal, but also without jurisdiction---Supreme Court upheld impugned judgment in circumstances.

(b) Registration Act (XVI of 1908)---

----S.50---Transfer of Property Act (IV of 1882), S.58---Mortgage---Registered mortgage would be a notice to entire world of factum of its registration.

Ainuddin Khan, Advocate Supreme Court and Suleman Habibullah, Advocate-on-Record for Petitioner.

Nemo for Respondents.

Date of hearing: 23rd February, 2009.

2009 C L D 784

[Supreme Court of Pakistan]

Present: Mian Shakirullah Jan, Zia Perwez and Sarmad Jalal Osmany, JJ

CIVIL APPEAL NO.1045 OF 1999

KAMALUDDIN QURESHI---Appellant

Versus

ALI INTERNATIONAL CO. ---Respondent

(On appeal from the judgment dated 5-10-1998 of the High Court of Sindh, Karachi passed in H.C.As. Nos.117 and 182 of 1997 and 73 of 1998).

CIVIL APPEAL NO.1221 OF 1999

Messrs ATARA TARPAULIN AND TEXTILE INDUSTRIES---Appellant

Versus

HABIB BANK LTD. and others---Respondents

(On appeal from the order dated 2-2-1999 of the High Court of Sindh, Karachi passed in H.C.A. No.22 of 1998).

CIVIL APPEAL NO.378 OF 2003

FIRST ELITE CAPITAL MODARABA---Appellant

Versus

RAVI ENTERPRISES (PVT.) LTD. and others---Respondents

(On appeal from the judgment dated 15-1-2003 of the Lahore High Court, Lahore passed in I.C.A. No.26-L of 2002).

CIVIL APPEAL NO.320 OF 2004

ZAKAUDDIN ---Appellant

Versus

DASTAGIR INVESTMENT AND MANAGEMENT LTD. and others---Respondents

(On appeal from the judgment dated 23-9-1994 of the High Court of Sindh, Karachi passed in H.C.A. No.73 of 1994).

CIVIL PETITION NO.2450 OF 2001

Messrs INVESTMENT CORPORATION OF PAKISTAN---Petitioner

Versus

Messrs TANVIR WOOLLEN MILLS LTD. And others---Respondents

(On appeal from the order dated 1-6-2001 of the High Court of Sindh, Karachi passed in J.M.A. No.192 of 1996).

Civil Appeals Nos.1045, 1221 of 1999 and 378 of 2003, 320 of 2004 and Civil Petition No.2450 of 2001, decided on 10th February, 2009.

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

----S. 10(2)(1)---Constitution of Pakistan (1973), Art.185(3)---Leave to appeal was granted by Supreme Court to examine the scope of maintainability of an appeal against the order of the Company Judge exercising jurisdiction under S.10(2)(1) of the Companies Ordinance, 1984.?

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

----S. 10(2)---Appeal against Court's order---Scope and maintainability---Provisions of S.10(2) are attracted to appeals preferred in cases except the appeals against an order of winding up, which is distinct and has multidimensional effects with far reaching consequences---Principles elaborated.

An order of winding up of a company encompasses activities in different spheres of economic activity and affects interests of divergent nature. The investment of share-holders and investors are at stake. The various contracts with those supplying or providing services to the company and their economic activities are affected. In case, the company is engaged in providing goods or services of essential or of daily requirements of the community, such order may cause abrupt withdrawal of all such products or services being provided by the company under liquidation. The various works undertaken by the company or under different contracts are brought to a stand still. The recovery of taxes, duties and levies resulting from the activities is discontinued, last but not the least. The entire range of creditors, suppliers, bankers, financers and employees entitled to their respective dues are also exposed to difficulties and uncertainties. No order passed under the Company Law has consequences of such diversity and magnitude. Thus, the order of winding-up being entirely distinguishable stands out on a different pedestal than any other order relating to any specific subject-matter or dispute. No order passed either before the order of winding-up or afterwards can, therefore, be equated with an order of winding up with respect to its consequence. It has been repeatedly held that the right to appeal is a substantial right. The remedy of an appeal is available only where expressly provided and in the manner it is provided. Subsection (1) of section 10 of the said Ordinance starts with the non-obstante clause and this has an overriding effect over any other law. It confers a right to appeal against an order of winding up. The' intent of the Legislature to provide the remedy of an appeal against an order of winding-up of a company, directly to the Supreme Court is reflected in unambiguous terms irrespective of the fact and nature of the proceedings that may lead to an order of winding-up of a company. The scope of an appeal has therefore, been widened to provide remedy irrespective of the source or basis of such order by use of the words "any order, decision or judgment of the Court", which if not challenged in appeal would otherwise attain finality as an order of winding-up as is apparent by the use of the words "where the company ordered to be wound-up".

The remedy provided is subject to further conditions; that in case the company ordered to be wound-up has a paid up of not less than one million rupees an appeal would lie to Supreme Court but where the company ordered to be wound-up has a paid up capital of less than one million rupees the remedy is subject to an additional condition of grant of leave to appeal. The subsection thus creates a distinction between cases involving the order of winding-up of the company and the remedy of a direct "appeal" or "after grant of leave to appeal" before the Supreme Court on the basis of the paid up share capital of the company. It may not be out of place here to examine the consequences of interpretation of section 10(1) of the Ordinance differently so as to apply to appeals against any order, decision or judgment of the Court other than that the order of winding-up a company. The right of appeal conferred under the said Ordinance, which is a special enactment; adopting any other interpretation, would lead to an anomalous situation. An example of such case may be where an appeal involving a claim of a creditor for over a million rupees brought before the Court against order of a Company Judge in a case where the paid up capital of the limited company is less than one million; a petition for leave to appeal would lie in spite of the fact that the amount over one million against a company under liquidation merely because of the paid up capital being less then one million rupees. A different remedy of a direct appeal to Supreme Court is provided to a creditor having a claim for a few thousand rupees against a company with a paid up capital of over one million would have a right to file a direct appeal against findings of a Company Judge pertaining to his claim involving a company under liquidation although their claims may otherwise be similar except for the difference in amount of respective claims. This, prima facie, is obvious discrimination amongst the creditors. Secondly, for the aforesaid reasons, such interpretation would also be in direct conflict with the provisions of Article 185(d)(e) of the Constitution of Islamic Republic of Pakistan pertaining to appeals before the Supreme Court. There is no distinction regarding appeals prior to passing of an order of winding-up of a company. Such restriction can only be inferred by addition of words to this effect but in view of the plain meanings of the word no addition is required because the language of the statute is clear and unambiguous and words are to be given their ordinary meaning. It appears that the Bench of Supreme Court; was not properly assisted in this case, while considering the case of Ibrahim Shamsi (2005 SCMR 1450) as a result of which this aspect escaped notice and the anomaly resulting in practical terms in case a different interpretation is adopted escaped consideration. Both subsections (1) and (2) of section 10 of the said Ordinance deal with the remedy of appeal provided by the law. Subsection (2) provides that an appeal from any order made or decision shall lie in the same manner and subject to the same conditions under which appeals lie from any order or decision of the Court. This subsection appearing after subsection (1) makes no distinction between orders prior to or subsequent to an order of winding-up. It appears after subsection (1) and pertaining to the same subject-matter, subsection (2) is attracted to and further regulates all the cases of appeals including appeals against orders passed after an order of winding up of a company. The scope of the subsection has been widened by use of the words "an appeal or decision" given to include and to apply to all appeals except those covered by subsection (1) of section 10. The clear wording and sequence of the two subsections of section 10 of the Ordinance cannot be stretched as the same would amount to doing violence to the provisions of that section.

Subsection (1) of section 10 deals only with appeals against order of winding up of a company.

The above view finds further support from the provisions of the subsequent subsection (2) of section 10 of the Ordinance, which is specifically worded as "save as provided in subsection (1)". The second subsection is unconditionally attracted to an appeal against any order made or decision given by a Court and is not restricted to an appeal preferred before or after passing of an order of winding-up of a company nor to the value of the subject-matter. The Legislature has not intended to place any restriction or impediment to the appeals filed under this subsection. Yet another important and significant aspect is that winding up orders passed are to be examined as to the various aspects for revival of the company to be determined on consideration of its further viability. Effort is made to continue the business particularly in cases of a running company and any delay may lead to irreparable losses and drastic consequences.?

Provisions of subsection (2) of section 10 are attracted to appeals preferred in cases except the appeals against an order of winding up, which is distinct and has multidimensional effects with far reaching consequences.?

Pakistan through Secretary Finance and others v. Messrs Lucky Cement and another 2007 SCMR 1367; Brother Steel Mills Ltd. v. Mian Ilyas Miraj PLD 1995 SC 543; Messrs Sindh Tech. Industries Ltd. v. Messrs Investment Corporation of Pakistan 1998 SCMR 1533; Muhammad Bux v. Pakistan Industrial Credit Investment Corporation Ltd. 1999 SCMR 25; Hala Spinning Mills Ltd. v. International Finance Corporation 2002 SCMR 450; Industrial Development Bank of Pakistan v. Messrs Valibhai Kamaruddin 2002 SCMR 415 and United Bank Limited v. Pakistan Industrial Credit and Investment Corporation Ltd. PLD 2002 SC 1100 ref.

(e) Interpretation of statutes---

----Where ordinary meanings can be given to the clear and plain unambiguous language of an enactment, the same are to be followed without any addition. ?

Zaman Cement Company (Pvt.) Ltd. v. Central Board of Revenue 2002 SCMR 312; Federation of Pakistan v. Ammar Textile Mills (Pvt.) Ltd 2002 SCMR 510; Muhammad Ijazul Haq v. Executive District Officer 2006 SCMR 989; Commissioner of Income Tax v. Media Network PLD 2006 SC 787 and Pakistan v. Lucky Cement 2007 SCMR 1367 ref.

(d) Interpretation of statutes---

----Interpretation leading to conflicting judgments is to be avoided. ?

Hafiz Abdul Waheed v. Mrs. Asma Jehangir and another PLD 2004 SC 219 ref.

(e) Interpretation of statutes---

----Intention of the law-maker is always gathered by reading the statute as a whole and meanings are given to each and every word of the whole statute by adopting a harmonious construction.?

Messrs Mehboob Industries Ltd. v. Pakistan Industrial Credit and Investment Corporation Ltd. 1988 CLC 866; Shahid Nabi Malik and another v. Chief Election Commissioner and 7 others PLD 1997 SC 32; M. Aslam Khaki v. Muhammad Hashim PLD 2000 SC 225; Mysore Minerals Limited v. Commissioner of Income Tax 2000 PTD 1486; Hafeezullah v. Abdul Latif PLD 2002 Kar: 457; Hafiz Abdul Waheed v. Mrs. Asma Jehangir PLD 2004 SC 219; Zafar Ali Khan and another v. Government of N.W.F.-P through Chief Secretary and others PLD 2004 Pesh. 263; D. G. Khan Cement Company Limited and others v. Federation of Pakistan and others 2004 SCMR 456; Muhammad Abbas Gujjar v. District Returning Officer/District Judge Sheikhupura and two others 2004 CLC 1559 and Shoukat Baig v. Shahid Jamil PLD 2005 SC 530 ref.

(f) Interpretation of statutes---

----Effect of subsequent sections in an enactment with reference to the earlier provisions with respect to same subject-matter is that the meanings of the earlier provisions of an enactment are regulated by the subsequent sections of the same enactment. ?

State of Bihar v. S.K. Roy AIR 1966 SC 1995; Nalinikant Ambala Modi v. IT Commissioner Bombay AIR 1967 SC 193; IT Officer Kanpur v. Maniram AIR 1969 SC 543; G. Srinivasa Reddy v. Commissioner Excise Board of Revenue AIR 1973 A.F. 178; Messrs Mehboob Industries Ltd. v. Pakistan Industrial Credit and Investment Corporation Ltd. 1988 CLC 866; Bashir Ahmed v. Member (Colonies) Board of Revenue PLO 1997 SC 294 and Allah Rakha v. Federation of Pakistan PLD 2000 FSC 1 ref.

Anwar Hussain Advocate Supreme Court for Appellants (in C.As. Nos.1045 and 1221 of 1999).

Haq Nawaz Chatta, Supreme Court for Appellants (in C.A. No.378 of 2003).

Appellants in Person (in C.A. No.320 of 2004).???????????

Rai Muhammad Nawaz Kharral, Advocate Supreme Court and M.S. Khattak Advocate-on-Record for Appellants (in C.A. No.1045 of 1999).

Salaman Hamid, Advocate Supreme Court for Respondents (in C.A. No.1045 of 1999).

Nemo for Respondents (in C.As. No.1221 of 1999 and 378 of 2003).

Rizwan Ahmed Siddiqui, D.A.-G. (for only MCB in C.A. No.320 of 2004).

Altaf Elahi Sheikh, Advocate Supreme Court for Respondents (in C.P. No.2450 of 2001).

Date of hearing: 24th October, 2008.

2009 C L D 798

[Supreme Court of Pakistani

Present: Mian Shakirullah Jan, Muhammad Qaim Jan Khan and Mian Hamid Farooq, JJ

AFZAL MOTORS COMPANY (PVT.) LTD.---Petitioner

Versus

PROVINCE OF SINDH and others---Respondents

Civil Appeal No.1232 of 2008, decided on 17th December, 2008.

(Against the judgment dated 25.8.2108 of the High Court of Sindh at Karachi, passed in C.P. No.D-1142 of 2008).

Mala fide---

----Contention was that actions of public functionaries including awarding of contract to the highest bidder, were mala fide and the entire process in the said direction was not transparent---Record did not demonstrate that in fact the public functionaries, while initiating, processing and awarding contract acted. in a mala fide manner---No document was available on record which could tend to show that the actions of the public functionaries were tainted with malice or the process starting from the invitation of tenders till award of contract was either mala fide or non-transparent---Simply to level vague and unsubstantiated allegation of mala fide on the part of the public functionaries did not advance the case of mala fide; it was very easy for a litigant to allege mala fide but was very difficult to prove the same---Allegation of mala fides required proof of a high order and the burden of proof lay on the person who made it---Principles.

Federation of Pakistan v. Saeed Ahmed PLD 1974 SC 151; Shabbir Hussain v. Registrar, Lahore High Court PLD 2004 SC 191 and Hazara `(Hill Tract) Improvement Trust v. Qaisara Elahi 2005 SCMR 678 fol.

Muhammad Afzal v. Shahzad Dar 2003 SCMR 280; Ittehad Cargo Service v. Syed Tasneem Hussain Naqvi PLD 2001 SC 116; Air Support Service v. Airport Manager 1998 SCMR 2268; Pacific Multinational (Pvt.) Ltd. v. I.-G. of Police PLD 1992 Kar. 283; Riaz Ahmed v. Regional Transport Authority 1992 MLD 1882 and Petrosin Products Pak. (Pvt.) Ltd. v. Federation of Pakistan 2001 CLC 820 ref.

Afzal Siddiqui, Advocate Supreme Court with Ejaz M. Khan Advocate-on-Record for Petitioner.

Nemo for Respondents.

Date of hearing: 17th December, 2008.

2009 C L D 802

[Supreme Court of Pakistan]

Present: Sardar Muhammad Raza Khan, Nasir-ul-Mulk and Sheikh Hakim Ali, JJ

REGIONAL DEVELOPMENT FINANCE CORPORATION-Appellant

Versus

Haji GUL HASSAN and another----Respondents

Civil Appeal No.1859 of 2000, decided on 26th November, 2008.

(On appeal from the judgment, dated 3-10-2000 of the Peshawar High Court, Peshawar passed in F.A.B. No.57 of 1998).

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

----S. 9---Civil Procedure Code (V of 1908), Ss.20 & 21---Recovery of bank loan---Territorial jurisdiction of Banking Court---Scope---Objection to territorial jurisdiction---Suit decreed by Banking Court was dismissed by High Court on the ground of lack of territorial jurisdiction---Validity---Court within territorial jurisdiction of which cause of action had arisen had jurisdiction under S.20 (c) C.P.C. to adjudicate upon the matter yet S.20 (a) and (b) C.P.C. equally conferred jurisdiction on court within local limits of whose jurisdiction, defendant resided---Bank had chosen first option which was not at all illegal---No objection, under S.21 C.P.C. regarding territorial jurisdiction could be allowed to be taken before appellate or revisional Court unless such objection was taken in the Court of first instance i.e. Trial Court---Application for leave to defend indicated that no objection about territorial jurisdiction was taken by defendant at the earliest possible opportunity---High Court had wrongly repelled objection taken by bank as provisions of S.21 C.P.C. could not be so conveniently avoided---Judgment and decree passed by High Court was set aside and case was remanded to High Court for decision of appeal afresh---Appeal was allowed.

Mian Abdul Rauf, Advocate Supreme Court for Appellant.

Hidayatullah Khan, Advocate Supreme Court for Respondent No.1.

Tariq Jehangiri, Advocate Supreme Court with Ch. M. Akram, Advocate-on-Record for Respondent No.2.

Date of hearing: 26th November, 2008.

2009 C L D 836

[Supreme Court of Pakistan]

Present: Sabihuddin Ahmed and Sarmad Jalal Osmani, JJ

Messrs AXLE PRODUCTS LIMITED---Petitioner

Versus

Messrs ALLIED BANK OF PAKISTAN LTD.---Respondent

Civil Petition No.19-K of 2009, decided on 10th February, 2009.

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

----O.V, R.20(1)(e)---Service of summons through publication in press---Validity---Such service could only be resorted to upon failure of other modes under C.P.C.

(b) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss.9 & 12(2)---Constitution of Pakistan (1973), Arts.25 & 185(3)---Application for setting aside of ex parte decree---Service of summons effected upon defendant through publication in press---Plea of defendant that no personal service had been effected upon him either through bailiff or registered post or courier; and that summons had been pasted at the address, where defendant's office had ceased to exist---Dismissal of such application by Banking Court upheld by High Court in appeal---Validity---Provision of S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, relating to service of summons simultaneously through all modes being different from that in C.P.C., Supreme Court granted leave to appeal to consider as to whether substituted service would be valid without resorting to other modes; and that a statute providing a special procedure for trial in banking matters might be just[[ fable on gro4ind of reasonable classification and whether same principle could he extended to S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 relating merely to service of summons.

Mobarak Ali v. First Prudential Modaraba C.Ps. No.139-K and 273-K of 2006 and Messrs Ahmad Autos and another v. Allied Bank of Pakistan Limited PLD 1990 SC 497 ref.

Saalim Salam Ansari, Advocate Supreme Court of Pakistan and Suleman Habibullah, Advocate-on-Record for Petitioner.

Aziz-ur-Rehman, Advocate Supreme Court of Pakistan and A.S.K. Ghori, Advocate-on-Record for Respondent.

2009 C L D 849

[Supreme Court of Pakistan]

Present: Rana Bhagwandas, ACJ, Saiyed Saeed Ashhad and Hamid Ali Mirza, JJ

MUBARAK ALI---Petitioner

Versus

FIRST PRUDENTIAL MODARABA-Respondent

Civil Petitions Nos.1 39-K and 273-K of 2006, decided on 4th January, 2009.

(On appeal from the judgment dated 22-3-2006 in 1st Appeal No.15 of 2006 and dated 5-4-2006 in 1st Appeal No.42 of 2006 passed by the High Court of Sindh, Karachi).

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

----S.12---Ex parte decree, setting aside of---Plea of defendant was that he had left his city residence address on which was available with Bank; that he was not served with summons at his village residence; that none of the newspapers in English and Urdu were being delivered at his village; that bailiff in his report stated on oath that he had gone to city address given by Bank, where he could not find defendant as some one else was residing there---Validity---Bailiff in his report had specifically stated that no person of name of defendant was residing at address given by Bank---Bank had not challenged defendant's statement on oath regarding non-delivery of such newspapers at his village-Bank had not examined any person from Newspaper Agency to state that such newspapers did reach or were being delivered at defendant's village---Court had not received acknowledgement due receipt of registered post---Defendant could not be presumed to have been duly served with summons in case of non-delivery of newspapers at his village or non-receipt thereof by him at his residence in village---Parties should be given due opportunity to defend lis and put up their case before court and decree be passed on merits---If claim of Bank was genuine and based on valid documents, then they would ultimately be entitled to decree even if defendant was given chance to apply for leave to defend suit---Ex parte decree was set aside in circumstances.

Neel Keshav, Advocate Supreme Court with Suleman Habibullah, Advocate-on-Record for Petitioner.

Nadeem Akhtar, Advocate Supreme Court with A. Aziz Khan, Advocate-on-Record for Respondent.

Date of hearing: 4th January, 2009.

2009 C L D 937

[Supreme Court of Pakistan]

Present: Mian Shakirullaih Jan, Nasir-ul-Mulk and Muhammad Qaim Jan Khan, JJ

ECHO WEST INTERNATIONAL (PVT.) LTD. LAHORE---Appellant

Versus

GOVERNMENT OF PUNJAB through Secretary and 4 others---Respondents

Civil Appeal No.1297 of 2006, decided 20th March, 2009.

(On appeal from the judgment of the Lahore High Court, Lahore dated 15-3-2006 passed in ICA No.9 of 2006).

(a) Public Procurement Regulatory Authority Ordinance (XXII of 2002)---

----Preamble---Public Procurement Regulatory Authority Rules, 2004---Law Reforms Ordinance (XII of 1972), S.3(2), proviso---Constitution of Pakistan (1973), Art.185(3)---Award of contracts---Leave to appeal was granted by Supreme Court to consider inter alia, as to whether the bidding process and procedure adopted for the award of contracts, for the construction of three mega projects, involving government properties, by a company jointly owned by Federal Government and Government of the Punjab, was valid, transparent, non-arbitrary, non-discriminatory and in accordance with the guidelines and requirements laid down by the superior courts of Pakistan in such-like matters; that whether bidding mechanism and process adopted by the government owned company were contrary to and violative of Public Procurement Regulatory Authority Ordinance, 2002 and Public Procurement Regulatory Authority Rules, 2004 and whether intra-court appeal instituted by the petitioner which resulted in the impugned judgment, was not competent due to the bar as contained in proviso to S.3(2), Law Reforms Ordinance, 1972, if so, its effect. ?

(b) Constitution of Pakistan (1973)---

----Art. 199---Issuance of writs in the nature of certiorari or mandamus to a limited company by the High Court---Criteria.

Writs in the nature of Certiorari or mandamus can be issued to, inter alia, persons performing functions in connection with the affairs of the Federation or the Province. Limited company possessing legal entity, is a person and the primary test for determining as to whether a limited company can be treated for the purpose of exercising writ jurisdiction over it by a High Court, as "performing functions of Federal or Provincial Government", must always be whether the functions entrusted to the organization or person concerned are indeed functions of the State involving some exercise of sovereign or public power; whether the control of the organization vests in a substantial manner in the hands of government: and whether the bulk of the funds is provided by the State. If these conditions are fulfilled, then the person, including a body politic or body corporate, may indeed by regarded as a person performing functions in connection with the affairs of the Federation or a Province; otherwise not. In the present case, going through the Memorandum and Articles of Association and other documents, the company does fulfil the above test to qualify as a person performing functions of the Federation as well as the Provincial Government. The share capital of the company, according to the Memorandum of Association, was to be provided by the Government of Pakistan through Ministry of Commerce and Government of the Punjab through Industries, Commerce and Investment Department. The Provincial Government was to provide land for the project and according to the Articles of the Association, the primary funding was to be provided in the shape of grants by the Federal and the Provincial Governments. Out of 11 Members of the Board of Directors of the Company, 4 each are nominated by the Federal Government and the Provincial Government and the remaining 3 from the business community nominated jointly by the two governments. The objectives of the company enumerated in the Memorandum of Association broadly is for promoting exports, commerce generally, generating revenue and other similar activities, by providing facilities for exhibitions, holding meetings and conferences relating to trade and commerce, nationally and internationally. The company was, thus, set up for performing functions which indeed were primarily those of the State and it was funded and controlled by the Federal Government and the Government of the Punjab. Objection to the maintainability of constitutional petition on this score is without force.

Salahuddin v. Frontier Sugar Mills and Distillery Ltd PLD 1975 SC 244 fol.

(c) Constitution of Pakistan (1973)---

----Art. 199---Public Procurement Regulatory Authority Ordinance (XXII of 2002), Preamble---Constitutional jurisdiction of High Court---"Aggrieved person"---Scope---"Public interest litigation"---"Personal interest litigation"---Distinction---Petitioner, a bidder of mega projects, realizing that it was unlikely to succeed in view of its participation in the bidding process to obtain relief for itself regarding the said projects, insisted that the matter be examined as one of public importance to undo the result of failure of public functionaries to perform their duties; it was thus, urged by the petitioner that the entire process be repeated and transparency ensured---Petitioner further attempted to make the case as that of "public interest litigation"---Petitioner had also contended that Public Procurement Regulatory Authority Ordinance, 2002 was applicable to the facts of the present case---Held, litigation of such nature did not fall specifically under any provision of Art.199 of the Constitution---Such concept, however, had received judicial recognition enabling the courts to enlarge the scope the meaning of "aggrieved person" under Art.199 of the Constitution to include a public spirited person who brings to the notice of the court a matter of public importance-Petitioner, in the present case, had a personal interest as he was motivated purely by his own economic interest and wanted the entire bidding process reversed so that he could avail another opportunity of bidding for the projects---Present litigation was, therefore, not in public interest but was rather in personal interest and petitioner had locus standi, having personal interest in the litigation but at the same time had no cause of complaint---Present case being not. of public interest litigation and petitioner having not been treated unfairly or discriminately, Supreme Court declined to comment upon the arguments by both the sides, on the application or otherwise, of the provisions of the Public Procurement Regulatory Authority, Ordinance, 2002 to the present case.?

Syed Ali Zafar, Advocate Supreme Court along with Arshad Ali Ch. Advocate-on-Record for Appellant.

Sardar Muhammad Latif Khan Khosa, Attorney General for Pakistan along with Mudassar Khalid Abbasi, A.A.-G. Punjab and Taffazul H. Rizvi, Advocate Supreme Court for Respondents Nos. 1 to 3.

Alamgir, Advocate Supreme Court for Respondent No.4.

Barrister Ijaz-ul-Hassan, Advocate Supreme Court for Respondent No.5.

Dates of Hearing: 16th and 17th February, 2009.

2009 C L D 1442

[Supreme Court of Pakistan]

Present: Nazim Hussain Siddiqui and Javed Iqbal, JJ

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Petitioner

Versus

Mian NISAR ELAHI and others---Respondents

Civil Petitions Nos.2502, 2503 and 2504 of 2001, decided on 25th October, 2001.

Securities and Exchange Commission of Pakistan Act (XLII of 1997)---

----Ss.33 & 34---Constitution of Pakistan (1973), Art.185(3)---Independent Inquiry Committee appointed to investigate the matter, submitted its .report and Commission had passed some interim orders, which were challenged before the High Court---Before approaching High Court, respondents should have waited for alternate remedies available under Ss.33 & 34 of Securities and Exchange Commission of Pakistan Act, 1997---Dispute was highly technical in nature and could amicably be resolved only through special expertise---Very object of Securities and Exchange Commission of Pakistan Act, 1997 would be frustrated if initial orders of the Securities and Exchange Commission were directly challenged before the High Court, whereas the law had provided alternate remedy, which, as a rule, would be followed, unless cogent reasons were shown for proceedings otherwise---No such reason having been shown and controversy relating to the crises could more appropriately be appreciated before the hierarchy provided under Securities and Exchange Commission of Pakistan Act, 1997, petitions for leave to appeal were converted into appeal and were allowed.

Waseem Sajjad, Senior Advocate Supreme Court with Ch. Akhtar Ali, Advocate-on-Record for Petitioner.

Aitazaz Ahsan, Senior Advocate Supreme Court with Ejaz Muhammad Khan, Advocate-on-Record for Respondents.

Date of hearing: 25th September, 2001.

2009 C L D 1523

[Supreme Court of Pakistan]

Present: Sardar Muhammad Raza Khan and M. Javed Buttar, JJ

ROZNAMA HAMDARD through Chief Editor---Petitioner

Versus

HAMDARD NATIONAL FOUNDATION PAKISTAN---Respondent

Civil Petition No.1376 of 2008, decided on 8th July, 2009.

(On appeal from judgment of the Islamabad High Court Islamabad dated 30-7-2008 passed in R.F.A. No.8 of 2008).

Trade Marks Ordinance (XIX of 2001)---

----S.40(4)---Constitution of Pakistan (1973), Art.185(3)---Infringement of trade mark---Publication of newspaper---Petitioner intended to use name "The Daily Hamdard" for newspaper to be published by it---Respondent was owner of registered trade mark known as "Hamdard" renowned in the field of Unani medicines, syrups and other goods---Respondent assailed the name of petitioner on the ground that it was already publishing magazines and journals under the name and title of Hamdard-e-Sehat" and "Hamdard Naunehal"---High Court allowed the suit in favour of respondent and restrained petitioner from using the name---Validity---Petitioner's name could give an abrupt impression that it was some publication of Hamdard National Foundation i.e. respondent---Such name was deceptive and so was rightly declared by High Court as name of petitioner's daily newspaper could create deception---Supreme Court declined to interfere in the judgment passed by High Court---Leave to appeal was refused.

Ishtiaq Ahmad Raja, Advocate Supreme Court for Petitioner.

Sultan Ahmad Sheikh, Advocate Supreme Court and M. S. Khattak, Advocate-on-Record for Respondent.

2009 C L D 1542

[Supreme Court of Pakistan]

Present: Sardar Muhammad Raza Khan, Khalil-ur-Rehman Ramday and Faqir Muhammad Khokhar, JJ

STATE BANK OF' PAKISTAN---Appellant

Versus

FRANKLIN CREDIT AND INVESTMENT COMPANY LTD. through Attorney---Respondents

Civil Appeal No.576 of 2003, decided on 13th May, 2009.

(On appeal from judgment dated 11-7-2002, of the High Court of Sindh, Karachi, passed in C.P. No. D-1506 of 2000).

(a) Qanun-e-Shahadat (10 of 1984)---

----Art. 129(e)-Acts performed by public f functionaries---Presumption---Duty of Court---Scope---Acts performed by public authorities deserve due regard by Courts and every possible explanation for their validity should be explored and whole gamut of powers in pursuance to which they act or perform their functions and discharge their duties should be examined---Presumption of regularity is attached to official acts.

Federation of Pakistan through Secretary, Law, Justice and Parliamentary Affairs and others v. Aftab Ahmed Khan Sherpao and others PLD 1992 SC 723; Government of Sindh through Chief Secretary and others v. Khalil Ahmed and others 1994 SCMR 782; Syed Muhammad Khurshid Abbas Gardezi and others v. Multan Development Authority and others PLD 1983 SC 151; Lahore Improvement Trust v. Custodian, Evacuee Property PLD 1971 SC 811; Chairman Pakistan Railway Board, Chittagong and others v. Abdul Majid Sardar PLD 1966 SC 725 and Federation of Pakistan and others v. Ch. Muhammad Aslam and others 1986 SCMR 916 rel.

(b) General Clauses Act (X of 1897)---

----S.24-A---Order, quashing of---Reasons stated in order---Validity---If bad reasons are severable from good ones and are not intertwined or inter-linked, an order passed by an administrative authority may not be quashed if otherwise sustainable on remaining valid grounds---Cases involving detention or liberty of citizens fall in a different category.

Government of West Pakistan v. Haider Bakhsh Jatoi and another PLD 1969 SC 210; Rafiq Ahmed Sheikh v. The Crown PLD 1951 Lah. 17; Kh. Ahmed Tariq Rahim v. Federation of Pakistan through the, Secretary Ministry of Law, Justice and Parliamentary Affairs, Islamabad PLD 1992 SC 646 at P.666; Mohtarama Benazir Bhutto v. the President of Pakistan and others PLD 1998 SC 388 at pages 541-542; Commissioner Sargodha Division v. Khizar Ilayat PLD 1996 SC 793; Brig. (Retd.) F.B. Ali v. The State PLD 1975 SC 706; Swam Singh v. State of Punjab and others AIR 1976 SC 232; State of Orrisa and others v. Bidyabhushan Mohapatra AIR 1963 SC 779 at pages 785-786; State of Maharashtera v. B.K. Takkamore AIR 1947 S.C. 1353; Royal Bank of Canada v. I.R.C. (1972) 1 All. E.R. 225 at page 239; Breen v. Amalgamated. Engineering Union and others (1971) 2 Q.B. 175; Halsbury's Laws of England, Fourth Edition, Volume 1 Paragraph 26 P.29 and Administrative Law by H.WR. Wade, Sixth Edition P.338 rel.

(c) Banking Companies Ordinance (LVII of 1962)---

----S.27(4)---State Bank of Pakistan Prudential Regulation No.XXI for Fund Management Services---Banking company---Cancelling of licence---Governor State Bank---Powers and duties---Mismanaging of affairs---Siphoning of funds---Chief Executive of Bank, appointing of---Approval of State Bank---Respondent-Bank was involved in mismanagement of affairs of bank and misuse of position by Directors of Bank for their own benefit---Huge amount of bank was siphoned off to the detriment of interest and rights of depositors in collusion with foreign companies in which Directors of the Bank had substantial interests---Chairman of Board of Directors' acted as de facto Chief Executive of Bank without approval of State Bank---Governor State Bank, in exercise of powers under S.27(4) of Banking Companies Ordinance, 1962, cancelled licence of respondent-Bank---Validity---Governor State Bank, while dealing with matter of cancellation of licence was not required to hold full-dress trial like a Court of law---Charges against respondent-Bank were serious enough to warrant cancellation of licence---Governor State Bank had acted fairly and reasonably by observing principles of natural justice and statutory requirements on the basis of relevant material---High Court was not expected to substitute its judgment for that of State Bank as if it was exercising an appellate jurisdiction---In the presence of relevant material including inquiry report of chartered accountants, Governor State Bank of Pakistan was perfectly justified in forming opinion that . affairs of respondent-Bank were being conducted in a manner detrimental to the interest of depositors---Governor State Bank had necessary expertise in relevant field and he arrived at a conclusion which a reasonable man in his place would do---Once licence was granted, it became a matter of serious concern to cancel the same---Judgment passed by High Court was not sustainable at law and more so when matter of winding up of respondent-Bank had already attained finality with dismissal of appeal and review petition by Supreme Court ---Fact of acquittal of Directors of respondent-Bank from charges of criminal misconduct would not per se nullify order of cancellation of licence passed by Governor State Bank in exercise of his statutory powers conferred under S.27(4) of Banking Companies Ordinance, 1962---Judgment passed by High Court against order passed by Governor State Bank was set aside---Appeal was allowed.

State Bank of Pakistan v. Indus Bank Limited through Chairman 2001 CLC 1833; Mr. Rafique Ahmed Sheikh v. The Crown PLD 1951 Lah. 17 (22); Maher Alvi v. Pakistan and 5 others PLD 1980 Kar. 609(650); Khalid Malik v. Federation of Pakistan PLD 1991 Kar. 1(99); Mohtarma Benazir Bhutto and another v. President of Pakistan and others PLD 1998 SC 388 (541-542); Independent Newspapers Corporation (Pvt.) Ltd. v. Chairman Fourth Wage Board 1993 SCMR 1533; Kumar v. Union of India AIR 2000 SC 3689-(2001)2 S.C.C. 386-2000 SOL Case No.636; Habib Bank Ltd. v. Hamza Board Mills PLD 1996 Lah. 651; Taj Company Ltd. In re: NLR 1996 Un-reported cases 799; Alliance Motors (Pvt.) Ltd. In re: 1997 MLD 1966 (Karachi); New Swadeshi Mills of Ahmedabad Ltd. v. Dye-Chen Corporation (1986) 59 Com. cases 183 (186-187); In re: Messrs Pakland Cement Limited 2002 CLD 1392; Sudersan Chits (India) Ltd. v. Sukumaren Pillai (1985) 57 Corn. Cases 85; Collector Land Acquisition Abbottabad and 2 others v. Lal Khan PLD 2002 SC 277; Syed Ali Abbas v. Vishan Singh PLD 1967 SC 294; S. Vankatachalam Iyyer v. State of Madras AIR 1957 Madras 623(626); Manak Lal v. Dr. Prem Chand Singhri PLD 1957 SC (India) 346 (351-352); Jamil Ahmed v. Province of Sindh 2001 YLR 1837; Reserve Bank of India v. Patiala Central Bank Ltd. AIR 1961 Kerala 268 at P.275; District Magistrate Lahore v. Faqeer Sayyed Fayyazuddin PLD 1965 SC 371 (377-378); Associated Provincial Pictures House Ltd. v. Wednesbury Corporation 1947 2 All. E.R. 680; The Presiding Officer v. Sadaruddin Ansari and others PLD 1967 SC 569 (579); Krishna Murari Aggerwala v. The Union of India AIR 1975 SC 1877 (1882-1883); H. Lavender and Sons Ltd. v. Minister of Housing and Local Government 1970 3 All E.R. 871 (872); Muhammad Jamil Asghar v. The Improvement Trust PLD 1965 SC 698; Hyderi International Finances Limited v. The State Bank of Pakistan PLD 1980 Lah. 658; Saghir Ahmed through L.Rs v. Province of Punjab through Secretary, Housing and Physical Planning, Lahore and others PLD 2004 SC 261 at P.268; Nazir Ahmed v. Pakistan PLD 1970 SC 453; Ram Labhaya v. Dhani Ram AIR 1947 Lah. 296; K.P. Veghaese v. The Income Tax Officer AIR 1981 SC 1922; Radha Corporation and others v. Collector of Customs 1989 SCMR 353; Asian Food Industries Limited v. Pakistan 1985 SCMR 1753 at P.1756; Mrs. Aiman Arshad v. Miss Naeem Khan PLD 1990 SC 612; Koro v. The State PLD 1963 Kar. 256; Craies On Statute Law, Sixth Edition by S.G.G. Edgar at page 150; Crawford Statutory Construction in sections 219 and 221 at pages 393 and 399 and N.S. Bindra's Interpretation of Statutes, 10th Edition 2007, in Chapter 16 at Pages 859-861 ref.

Khalid Anwar, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Appellant.

Anwar Mansoor Khan, Senior Advocate Supreme Court for Respondents Nos. 1 to 3.

Date of hearing: 13th May, 2009.