CLD 2011 Judgments

2011 CLD 42

[Competition Commission of Pakistan]

Present: Ms. Rahat Kaunain Hassan, Chairperson, Abdul Ghaffar, Member (C&M)

and Dr. Joseph Wilson, Member (PRI)

In the matter of: SHOW-CAUSE NOTICES ISSUED TO MESSRS PAKISTAN POULTRY ASSOCIATION

File No. CCP / CARTELS / 04 / 2010, decided on 16th August, 2010.

(a) Competition Ordinance (XVI of 2010)---

----Ss. 3, 4, 30, 37 & 38---Abuse of dominant position---Entering into prohibited agreements---Imposition of penalty---Competition Commission taking notice of media reports regarding an unprecedent hike in prices of poultry products and possible cartetization, initiated a suo motu enquiry under S.37(1) of the Competition Ordinance, 2010---Commission appointed Enquiry Officers to conduct an enquiry into possible violation of Ss.3 & 4 of Competition Ordinance, 2010---Enquiry Officers in their report reported that there were prima fade violation of S.4 of the Competition Ordinance, 2010 and recommended that proceedings under S.30 of the Ordinance could be initiated against the Poultry Association---Association was provided a copy of enquiry report containing complete summary of allegations coupled with the evidence relied thereon---Contention of Association that it was not included during process of enquiry and had not given a chance of providing its point of view before the show-cause notice was issued, was repelled because Association was completely aware that an inquiry was underway into its activities---Enquiry report alleged collusive conduct in terms of price fixing and production of various poultry goods--Ethos behind trade association was to provide representation to industry people in dealing with the Government and to improve general industry progress; it was not a platform to discuss and make decisions related to business---Anti-competitive practices including collusion, had taken place in the market for perishable items---Decision of Association to reduce bird population by culling it early, as a collective measure, was anti-competitive in object and was in violation of S.4(1)(2)(a)(c) of Competition Ordinance, 2010 and it was not necessary to prove a series of individual decisions regarding price or rates when the mechanism of determining those prices or rates was abundantly clear---Existence of a mechanism a formula or target price, was enough to prove the existence of a price fixing decision---Distinct violation of S.4 of Competition Ordinance, 2010 was found by a single Association in five different relevant markets, which was an unprecedented situation in terms of scope of anti-competitive by a single entity---In view of such violation a penalty of rupees 10 million was imposed for each instances of collusive activities in the different relevant markets amounting to a total of Rupees 50 million. ?

Tikka Iqbal Muhammad Khan and others v. General Pervez Musharaf PLD 2008 SC 178; Sindh High Court Bar Association and another v. Federation of Pakistan and others PLD 200.9 SC 879; R v. Local Government Board 11914] 1 K.B.160; Commission of Income Tax and others v. Messrs Media Network and others 2006 PTD 2502; Rees and others (1994)1 All E.R.833 and Parry Jones v. Law Society and others (1969) 1 Ch Division 1 ref.

(b) Competition Ordinance (XVI of 2010)---

----Ss. 3, 4 & 30---Proceedings in cases of contravention---Issuance of show-cause notice---Show-cause notice must contain specific and explicit allegations, mentioning therein the minute details of the allegations---Purpose and logic behind said settled principle was to enable the undertaking to explain its position, the allegations and to provide it an opportunity to rebut the charges, which was not possible, unless the details of the accusation was brought to the notice of the undertaking concerned.

Dr. Bashir Mahmood Bhatti, Secretary General, Dr. Muhammad Aslam, Faqir Muhammad Sabir, Khalil Sabir, Raza Mahmoqd Khursand, Abdul Basit, Ch. Azmat Ali, Dr. Muhammad Sadiq and Ch. Khurshid Ahmed for Messrs Pakistan Poultry Association.

Saifullah Khan, Javed Qaiser and Ms. Khizran for S.U. Khan Associates.

2011 CLD101

[Competition Commission of Pakistan]

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

In the matter of: SHOW-CAUSE NOTICES Nos.70 to 73 OF 2009 issued to Messrs CHINA HARBOUR ENGINEERING COMPANY LTD. (CHEC) and 3 others

File Nos.3(17)/L.O/CCP/2009, decided on 23rd July, 2010.

(a) Competition Ordinance (XVI of 2010)---

---Ss. 4(1), (2)(a)(b)(e), (3), 30, 37 & 38---Competition Commission of Pakistan (Conduct of Business) Regulations, 2007, Regln.4(1)(e)--Entering into prohibited agreement--Imposition of penalty---Competition Commission took notice of the news item, wherein it was reported that some international dredging companies had formed a cartel in order to qualify for the bids---Commission pursuant to the powers contained in clause (e) of Sub-Regln. (1) of Regln.4 of the Competition Commission of Pakistan (Conduct of Business) Regulations, 2007, appointed Enquiry Officers to conduct enquiry into the allegation of collusive bidding---Enquiry Officers after conducting inquiry concluded that two undertakings were not competing with each other in their allocated territories in violation of S.4(1),(2)(b) & (e) of Competition Ordinance, 2010 and that three undertakings had entered into an agreement for submission of a single joint bid, the aim and object of which was to prevent, restrict or reduce competition within the relevant market in violation of S.4(1)(2)(a) & (e) of Competition Ordinance, 2010---Issue in the case was, whether two undertakings had divided territories among themselves and had colluded with each other and filed cover bids to realize each division in violation of S.4(1)(2)(e) of Competition Ordinance, 2010---Said two undertakings could not rebut allegation of 'cover bid'---Significant cost difference quoted by said undertakings was evident---One undertaking quoted cost for overall work Rs.33,229,281,430 and average rate Rs.1006 per cubic meter whereas other undertaking quoted cost for overall work Rs.19,325,886,984 and average rate Rs.585 per cubic meter---Undertaking which quoted less cost and average rate, claimed being inexperience and lack of expertise in the relevant field---Said undertaking had failed to produce supporting evidence in proof of its claim---Undertaking in question was one of the largest general contractors in China, competing more than 600 international contracts in more than 60 countries and was one of the top 225 international contractors; it could easily be concluded that there was collusive arrangement inter se the two undertakings to file cover bid in their respective territories, which had object of restricting, reducing and distorting competition and was in violation of S.4(1)(2)(b)(e) of Competition Ordinance, 2010---Issue was decided against the said two undertakings accordingly.

(b) Words and phrases---

---'Cover bidding' defined and explained.

(c) Competition Ordinance (XVI of 2010)---

----Ss.2(b) & 4---Agreement---Scope---Agreement could consist of not only in an isolated act, but also in a series of acts or a course of conduct---Conduct could amount to a concerted practice even where the parties had not explicitly subscribed to a common plan defining their action in the market, but knowingly adopt or adhere to collusive devices which facilitate the co-ordination of their commercial behaviour.

Case C-49/92P Commission v. Anic Partecipazioni SpA, [199]ECR 1-4125, Paragraph 81 and Case T-7/89 Hercules v. Commission [1991] ECR II-1711, Paragraph 256. ref.

(d) Competition Ordinance (XVI of 2010)---

----Ss. 4(1)(2)(a)(b)(e), 30, 37 & 38---Entering into prohibited agreement---Imposition of penalties---Issue involved was "whether three undertakings through "consortium Agreement" had entered into a prohibited agreement which had its object or effect of preventing, restricting, reducing or distorting competition within the relevant market, in violation of S.4(1)(2)(e) of Competition Ordinance, 2010---Generally speaking, a bidding consortium between two or more significant competitors could violate the provisions of S.4 of Competition Ordinance, 2010, if parties to the consortium qualified as competitors i.e. they were independently capable of performing the project and would have submitted a bid in absence of agreement to bid jointly---Bidding consortia or consortium agreements for bidding were permissible inter se the small and medium enterprises, which in view of magnitude of work or their economic, financial or technical inabilities were not independently capable of performing the whole project--Such agreement was generally formed among undertakings which were not competitors and where formulating a bid itself was not costly and where there was no risk of investment factors---Bidding consortia were to be treated as case to case basis applying the rule of reason and should not be treated as per se illegal--All three undertakings, in the present case, appeared to be expert in the performing dredging activities and could clearly be termed as each other's competitors and had become dominant---Undertakings not only independently carried out maintenance dredging project, but had been rivals in the first round of bidding---All undertakings were involved in the provision of similar/same service and had previously completed many dredging projects independently---Justification afforded by the undertakings on the pretext of non-availability of equipment for entering into the 'pre-bid agreement' was unjustified and being not sustainable was rejected---Financial ability of undertakings was much better---"Consortium agreement" between the undertakings fell within the purview of 'prohibited agreement' and such collaboration had prevented, restricted, reduced or disturbed competition within the relevant market in terms of S.4(1)(2)(e) of Competition Ordinance, 2010---Such agreements were declared void in terms of S.4(3) of Competition Ordinance, 2010--Maximum fixed penalty under S.48 of Competition Ordinance, 2010 being fully justified each undertaking would- pay penalty of Rs.50 million.

(e) Competition Ordinance (XVI of 2010)---

----S. 2(1)(k)---Relevant market---Scope---Concept of 'relevant market' in Competition Ordinance, 2010, was similar to what existed under the European law; it was used to identify the products and undertakings that were directly competing with each other in a business---Relevant market was the market where the competition would take place---'Relevant market' consisted of a product market and a geographic market---Product market could be said to mean the market with respect to the different groups of goods available, while geographic market, was the market in terms of geographic area in which those products were either produced and/or traded under/or the services were provided-Relevant product market consisted of all those products that were considered to be substitutable by consumers in terms of their prices, characteristics and end uses-In identifying the relevant product market, several different factors needed to be considered, for instance substitutability, competition, prices and product demand elasticity; it was not necessary for the products/services to be identical in their functional and physical aspects, price or quality but it was sufficient that the products merely present themselves as real economic alternatives to the other i.e. they had the ability to influence consumer buying.

Wang Moping, and Mao Jiaming (Business Manager) on behalf of China Harbour Engineering Company Ltd.

Badaruddin Fateh Ali Vellani, Imran Ahmed and Jan-Mark Van Mastwijk, Area Manager for Dredging International.

Muhammad Arshad Warsi for Jan De Null N.V.

Barrister Khaliq-uz-Zaman Khan and Yan Xinde (General Manager) for China International Water and Electric Corporation.

Abdullah Leghari, Director (Technical) and Munawer Ali Essani, Legal Advisor for Port Qasim Authority.

2011 C L D 605

[Competition Commission of Pakistan]

Before Rahat Kaunain Hassan, Chairperson and Vadiyya S. Khalil, Member

Messrs FAUJI FERTILIZER COMPANY LTD.: In the matter of

File No. 324/MERGER/CCP/2010, decided on 26th January, 2011.

Competition Ordinance (XVI of 2010)---

----S. 11---Approval of merger of companies, application for---Company submitted its pre-merger application for the acquisition of 75% to 79.87% shares of other company---Company had pre-merger market share of more than 50% in the relevant product market before the proposed merger---Competition Commission considering that the proposed acquisition/merger, allowed, would not substantially lessen competition, issued its no objection to the bidding of the company for the proposed merger, subject to certain conditions---While, competition generally would derive undertakings to achieve efficiencies internally, the primary benefit of the mergers to the economy was their potential to produce substantial efficiencies by enhancing its ability; and incentive to compete---Efficiency claim, however, should not be vague or speculative and should be verifiable by reasonable means---Eventual benefit, from the consumer's perspective, was to see whether those efficiencies would result in lower price, improved quality, enhanced services or new products---Commission hoped that its decision would help achieving economics of scale in the industry leading to decrease in consumer prices without substantially lessening competition---Commission was also of the view that from trade would ensure competition, would keep competitive pressure on the local industry and would protect consumers from possible exploitation.

Zahir Riaz, Orr Dignam & Co., Khalid Rohail Ansari, Syed Iqtidar Saeed, Zia ud Din, Brig. Fiaz Ahmed Satti (Rtd.), Brig. Tariq Izaz (Rtd.), Ather Javed, Omer Shahid, Aman Mir and Mohsin Kadir for Fauji Fertilizer Company Ltd.

Ahmad Humayun Shaikh, Syed Akbar Ali Bilgrami, Advisor, Waqqas Ahmad Mir, Maliha Sardar Azam, Wall Muhammad and Irfan Ahmad Khan for Azgard Nine Ltd. & Agritech Ltd.

Salman Akram Raja, ASC and Waqqas Ahmad Mir for Raja Muhammad Akram & Co.

Burhan Nasir and Shauzab Ali for NIB Bank and Standard Chartered Bank.

2011 C L D 1376

[Competition Commission of Pakistan]

Before Rahat Kaunain Hassan, Chairperson and Vadiyya S. Khalil, Member (M&A)

WATEEN TELECOM (PVT.) LIMITED: In the matter of

Show-cause Notices Nos. 63 and 64 of 2010, decided on 22nd March, 2011.

(a) Competition Ordinance (XVI of 2010)---

----S. 4--- Entering into prohibited agreement---Retrospective application of Competition Ordinance, 2010---Company had submitted that Strategic Services Agreement arrived at between the company and Housing Authority, was executed before the enactment of Competition Ordinance, 2010; and that S.4 of said Ordinance was prospective in nature and same could not have retrospective application---Validity---Even if an agreement had been executed before the enactment of the Ordinance, but continued after Ordinance came into effect, same would fall under the purview of S.4 of Competition Ordinance, 2010---Section 4 of Competition Ordinance, 2010 would apply to prohibited agreements that were of a continuing nature and not to past and closed transactions---Strategic Services Agreement arrived at between the parties having continued after the enactment of Competition Ordinance, 2010, same was of a continuing nature--- Ordinance, in circumstances, was applied prospectively and not retrospectively---Application of the Competition Ordinance, 2010 or any penalty that could be imposed for violation of S.4 of said Ordinance would not be retrospective i.e. from the date the Strategic Services Agreement was executed between the parties, but from the date the Ordinance came into effect.

Kowtha Suryanarayan Rao v. Bank of Hindustan Ltd. (1953) 23 Comp Case 168 (Mad) and Khan Asfandyar Wali v. Federation of Pakistan PLD 2001 SC 607 rel.

Muhammad Waseem v. Sessions Judge, Islamabad 2004 YLR 2867 ref.

(b) Competition Ordinance (XVI of 2010)---

----S. 4---Entering into prohibited agreement---Imposition of penalty---Defence Housing Authority and company entered into the Strategic Services Agreement, whereby authority agreed to grant irrevocably certain rights and privileges to company, conditional; upon which company agreed to provide telecommunication service in Defence Housing Authority Region and scope of said agreement was 30 years---Said agreement was restricted from entering into any kind of agreement with any third party for the provision of service covered by Strategic Services Agreement---In effect company had the exclusive right to provide telecommunication and media services in the Defence Housing Authority Region for 30 years---Clauses of the Strategic Services Agreement, which had the effect of preventing, restricting and reducing competition through the division of the telecommunication and media services market in the Housing Authority Region, were in violation of S.4(1)(2)(b) of Competition Ordinance, 2010, were declared to be of no legal effect---Defence Housing Authority having admitted their fault and had shown the willingness to take all appropriate measures to modify any violation of the Strategic Services Agreement, quantity of penalty was restricted to Rs.10 million only, in circumstances.

(c) Competition Ordinance (XVI of 2010)---

----Ss. 4, 5 & 9---Prohibited agreement---Exemptions and criteria for individual and block exemption---If an undertaking would meet the criteria stipulated in S.9 of Competition Ordinance, 2010, Competition Commission of Pakistan could grant exemption in respect of an agreement, if agreement contributed to; improving production and distribution; promoting technical or economic progress, while allowing consumers a fair share of resulting benefits; or benefits of that clearly outweigh the adverse effect of absence or lessening of competition.

Asim Hafeez for Defence.

Muhammad Aslam Khan Niazi, Additional Director Telecom for Housing Authority.

Habib Ahmed Bhatti, Ms. Naila Aziz, Muhammad Khalid Bashir, Manager Special Projects, Ikhlaq Ahmed Bhatti and Malik Qaiser Anwar for Wateen Telecom Limited.

Dates of hearings: 22nd, 30th December of 2010 and 13th January of 2010.

2011 C L D 1417

[Competition Commission of Pakistan]

Before Rahat Kaunain Hassan, Chairperson and Joseph Wilson, Member

Messrs CINEPAX LIMITED: In the matter of

Show-cause Notice No. 25 of 2010, decided on 28th March, 2011.

Competition Ordinance (XVI of 2010)---

----S. 3---Abuse of dominant position---Company was in the business of operating Pakistan's only multiplex cinema---Competition Commission of Pakistan received a complaint alleging a tying of movie tickets with food coupons---Commission wrote, letter to the company to provide information about the sale of cinema tickets contingent on the mandatory purchase of food coupons---Company submitted required information stating that it had started selling the coupon with the cinema ticket as a marketing strategy to make an inevitable price increase of the cinema ticket more acceptable to customers---By selling the movie tickets with food coupon as a tied product, company did in fact tie-in two separate products; the cinema tickets and food coupons---Customers who merely wanted to watch a movie, were also obliged to buy food coupons, even if they did not want to have any food at the cinema, which were two products, distinct from each other---Such was, in circumstances a violation of S.3(1)(2)(3)(c) of Competition Ordinance, 2010---Company offered to hold five free movie shows during the year for the under-privileged, in their biggest screen, comprising of 300 seats, in lieu of its inadvertent violation and such violation did not continue for long and was stopped prior to taking of cognizance by the Commission---Commission deemed it appropriate, under circumstances, to take a lenient view and accepted the company's offer of holding a minimum of five free shows for the under-privileged during the year 2011.

Danny Sidhwa, C.E.O. and Pir Saad Ahsanuddin, Director for Messrs Cinepax Limited.

Date of hearing: 1st March, 2011.

2011 C L D 1450

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Dr. Joseph Wilson, Member

Messrs RITS INCORPORATION: In the matter of

Show-cause Notice No. 1 of 2011, decided on 11th May, 2011.

Competition Ordinance (XVI of 2010)---

----Ss. 10 & 37---Deceptive marketing practice---Distribution of fake or misleading information to consumers---Undertaking was in the business of hair fall solution product called "Remaine"---Competition Commission of Pakistan received information regarding couple of advertisements of said product in which the undertaking had claimed that use of "Remaine" for 15 or even 10 days would stop hair from falling by 100 per cent, regardless of the cause of hair fall---Advertisements, prima facie, being in violation of S.10 of Competition Ordinance, 2010, Office of Fair Trade took cognizance on its own and recommended the Commission to initiate an enquiry under S.37(1) of Competition Ordinance, 2010---Enquiry revealed that supporting documents produced by the undertaking did not suffice in forming reasonable basis of the absolute claims made in the advertisements---Material submitted, clearly did not support claims made in the advertisements that "100 % stop in hair fall in 8-15 days" and lacked reasonable basis---Representatives of the undertaking, in response to show-cause notice, expressed their inclination to amend the said advertisement and sought guidance from the Commission so that the advertisement would be in consonance with S.10 of Competition Ordinance, 2010---Undertaking was directed to remove absolute claims lacking reasonable basis, entirely from their packages as well as their advertisements which was rectified to the effect that "depending on the severity of the problem by applying twice a day, the user will experience a decrease in hair fall, the result would be experienced by the user in 8-15 days"---Commission appreciated the co-operation extended in ensuring compliance with the Competition Ordinance, 2010---Taking lenient view, no penalty was imposed and undertaking was reprimanded to ensure more responsible behaviour in future with respect to marketing of the products and making any claim in respect thereof.

Barrister Yousaf Khosa and Leena Inaam Khan for RITS Incorporation.

Date of hearing: 1st February, 2011.

2011 C L D 1471

[Competition Commission of Pakistan]

Before Dr. Joseph Wilson, Member

ACQUISITION OF WIND TELECOM S.P.A. (FORMERLY WEATHER INVESTMENTS Sarl) BY VIMPELCOM LTD.: In the matter of

File No. 373/Merger/CCP/2011) of 2011, decided on 17th March, 2011.

Competition Ordinance (XVI of 2010)---

----Ss. 2(e) & 11--- Competition (Merger Control) Regulations, 2007, Regln.6---Approval for merger of companies---Application for---Company 'V' through its Legal Advisor, submitted a pre-merger application regarding the proposed acquisition of other company 'W'---Such transaction would involve an amalgamation of two leading international telecommunication groups, 'V' and 'W', which would create the world's sixth largest telecommunication carrier measured by the number of subscribers---Acquisition of 'W' by 'V' would result in indirect change of control of 'O' company and its subscribers in Pakistan---Such transaction would involve proposed acquisition of the entire capital of 'W' by 'V'---Once transaction was consummated, 'V' would have sole control of 'W'---Such transaction had a potential to impact competition in the relevant product market comprising the provision of mobile telecommunication service in Pakistan---Competition Commission of Pakistan, in circumstances, initiated inquiry, wherein the Bench raised concerns regarding potential impact on competition in the relevant market through coordinated effects and/or strengthening or creating of a (joint) dominant position---Counsel of parties, having understood the concern of the Commission, proposed and committed to implement and the Bench agreed to grant its 'No Objection' based on commitments given by the parties to alleviate competition concerns---Commission would reserve the right to assess the effects of the transaction on the relevant market after one year from the date of the closing of the transaction under subsection (13) of S.11 of Competition Ordinance, 2010---Applicant would file a compliance report within three months from the date of closing of the transaction.

Asim Nasim, Mir Nasar Ahmad and Orr, Dignam & Co. (Legal Advisors) for Vemplecom.

Khalid S. Ibrahim, Agha M. Qasim, VP Corporate Affairs, PMCL and Niaz Brohi, Director (Legal), PMCL for PMCL.

Romano Righetti, Deputy COO, Wind Telecom for Wind Telecom.

Date of hearing: 11th March, 2011.

2011 C L D 1575

[Competition Commission of Pakistan]

Before Abdul Ghaffar, Dr. Joseph Wilson and Mueen Batlay (Members)

PAKISTAN SHIP'S AGENTS ASSOCIATION: In the matter of

File No. 08/APPMA/CMTA/CCP/10/1709, decided on 22nd June, 2011.

Competition Act (XIX of 2010)---

----Ss. 4(1)(2)(a), 30, 33, 34 & 38---Prohibited agreement---Fixing selling price of provision of service by Ship's Agents---Imposition of penalty---Competition Commission, received information that Pakistan Ship's Agents Association, which was the sole licensed trade association for shipping, could be involved in collusive practices regarding determination of ancillary charges pertaining to shipping services by various ship agents---Competition Commission appointed Enquiry Officer, which searched the premises of the Association and reported to the Commission that prima facie, there was evidence of violation of S.4 of Competition Act, 2010---Enquiry Report recommended that Commission should proceed against the Association under S.30 of Competition Act, 2010--- Enquiry Report and other communications and evidence on record had established, Association's role in developing and negotiating the range of charges for ancillary services offered by its members, which amounted to fixing the selling price of provision of a service as described in clause (a) of subsection (2) of S.4 of Competition Act, 2010---Actions and business practice of Association and its members had allegedly violated S.4(1)(2)(a) of Competition Act, 2010----Keeping in view the mitigating factors and Association's co-operative conduct and professed commitment to support the competition regime in Pakistan, the Competition commission required that Association, would pay a nominal penalty of Rs. One million under S. 38 of the Competition Act, 2010 and pass a resolution as mentioned in Para 9(a) of the present order of the commission.

Tika Iqbal Muhammad Khan and others v. General Pervez Musharaf PLD 2008 SC 178 and Sindh High Court Bar Association and another v. Federation of Pakistan and others PLD 2009 SC 879 rel.

Muhammad A. Rajpar, Chairman, Pakistan Ship's Agents Association, Amir Ali Jamal, Secretary, Pakistan Ship's Agents Association and Abdur Rahman on behalf of Pakistan Ship's Agents Association.

2011 C L D 1802

[Competition Commission of Pakistan]

Before Abdul Ghaffar, Member

Messrs ELTEK VALARE A.S.: In the matter of

Complaint File No.2(236)/AGR/EXM/REG/CCP of 2011, decided on 8th September, 2011.

Competition Commission (General Enforcement) Regulations, 2007---

----Reglns. 4 & 21---Competition Act (XIX of 2010), S.37---Exemption Certificate---Complainant, in collaboration with the respondents formed a company (joint venture) and complainant was a major shareholder, having 51% shares while the respondents collectively were shareholders of 49%---Respondents, without informing the complainant filed application to the Competition Commission for exemption certificate---Complainant had alleged that respondents had acquired the exemption by filing application which was not in conformity with the provisions of Regln.4(1) of Competition Commission (General Enforcement) Regulations, 2007 and the Schedule thereof and sought cancellation of the exemption---Parties were provided opportunity of hearing by the Commission---Chief Executive Officer of complainant company informed the Commission that they did not wish to pursue the complaint; and that same could be treated as withdrawn--- Counsel for the complainant had also informed the Commission that his client no longer wished to pursue the complaint---Requirement laid down in para. 1.5 of the exemption application having been complied with by the respondents, in pursuance of the provisions of Regln. 21 of the Competition Commission (General Enforcement) Regulations, 2007, request of withdrawal of complaint made by the complainant, was accepted and complaint was dismissed as withdrawn.

Nemo for Messrs Eltek Valare A.S.

Nemo for Imran Saeed and Muhammad Tariq.

2011 C L D 1024

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

QASIM GLASS BOTTLES---Respondent

Complaint No. 118 of 2009 and Private Complaint No. 58 of 2007, decided on 27th January, 2011.

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

----Ss. 11, 16 & 17---Prohibition of certain discharges or emissions---Violation of environmental protection order---Imposition of penalty---Respondent/accused misstated before the Tribunal many times that he had adopted remedial measures---Site Inspections were ordered to be conducted by the department several times and reports had revealed that respondent/unit consisted of one main furnace, two small heating furnaces and four moulding machines---Raw material was moulded in main furnace at 1000-1100°C---Whole process emitted fumes of diesel in the atmosphere and generated high noise, which was source of discomfort for all the inhabitants of the locality and caused serious environmental implications in thickly populated area---Night working also enhanced problems of inhabitants of the area---Respondent/unit was playing hide and seek with the Tribunal and abusing the process of law---Whenever, site inspection was ordered to be conducted by the Tribunal, respondent closed the unit to avoid the site inspection---Such behaviour had been practised by the respondent since 2006---Site inspection reports sufficiently evident that due to functioning of respondent unit, large number of inhabitants of the locality were suffering due to high noise, gaseous emissions in the locality---Site inspection reports had sufficiently connected respondent unit with commission of offence under S.11 of Pakistan Environmental Protection Act, 1997---Respondent unit had to be closed permanently to save the people from all types of environmental complications---Respondent was charged with Rs.500,000 as fine for the past pollution to be deposited within one month of passing the order---Order accordingly.

Sanaullah, ADPP with Khalid Mehmood, Inspector (Legal) EPA, Lahore for the Complainant.

Haroon, respondent in person along with Akhtar H.Awan for Respondent.

Date of hearing: 27th January, 2011.

2011 C L D 1067

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

TELENOR COMPANY, GHARIB SHAH---Respondent

Complaint No. 7 of 2010, decided on 28th March, 2011.

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

----Ss. 16, 17, 18, 20 & 21---Criminal Procedure Code (V of 1898), Ss.205, 353 & 540-A---Violation of environmental protection order---Dispensing with personal attendance of accused---Counsel for accused moved an application to dispense with personal attendance of accused and for the withdrawal of warrant of arrest on the ground that; Chief Executive Officer of accused unit was a foreigner and was unable to enter his personal appearance before the Tribunal due to security reasons---Three ingredients were important to be noticed by a court while exercising Jurisdiction under S.540-A, Cr.P.C. with regard to deal with absence of accused viz., there should be two or more accused present before the court; any one or more asking for exemption and incapable of remaining before the court---Reasons for dispensation from personal attendance must be very strong---Normally enquiry or trial would take place in the presence of accused as envisaged in S.353, Cr.P.C., unless exemption from personal appearance was granted as provided in S.540 A, Cr.P.C.---In the present case, reasons provided for exemption from personal appearance, were the security reasons--Accused who was foreigner, was not able to appear personally before the Tribunal safely---Personal attendance of accused could be dispensed with when due to social and political situation prevailing in the country, the travelling of a foreigner was not safe, especially in politic places---Order accordingly.

Haji Auranzeb v. Mushtaq Ahmad PLD 2004 SC 160 ref.

ADPP with Khalid Mehmood, Inspector EPA, Punjab for the Complainant.

Qamar Ali Rizwi for Respondent.

Date of hearing: 28th March, 2011.

2011 CLD 1103

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

ABDUL HAMEED POULTRY FARM---Respondent

Complaint No. 232 of 2010, decided on 17th January, 2011.

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

----Ss. 11, 16 & 21---Complaint case---Inspection revealed that poultry waste was found burnt and dumped in the open; and that there was only one solid waste storage room at the poultry farm---Respondent/owner of the poultry farm gave undertaking to stop the burning and dumping of poultry waste and to contract another morality pit for the birds/chicks, within ten days---Representative of the department got site inspection for verifying the stoppage of dumping and burning of poultry waste and the construction of another mortality pit for the burial of dead chicks---Site Inspection Report filed by Inspector who' conducted inspection, was incomplete having no details regarding all the precautionary measures adopted by respondent poultry farm and did not provide the exact distance of respondent poultry farm from the Lake Catchment area and the residential area of the village concerned---Before disposing of the complaint, the Site Inspection Report of the respondent poultry farm had to be conducted in detail---Order accordingly.

Ijaz Majeed, AD (L. & E), EPA, Lahore with Inam-ul-Haq Inspector EPA, Rawalpindi for the Complainant.

Abdul Hameed along with Azhar Rehman Abbasi for Respondent.

Date of hearing: 17th January, 2011.

2011 CLD 1138

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

WI-TRIBE, LAHORE---Respondent

Complaint No. 54 of 2009, decided on 9th February, 2011.

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

----Ss. 11, 12, 13, 16, 17 & 21---Environmental Tribunal Rules, 1999, R.13---Prohibition of certain discharges or emissions---Violation of environmental protection order---Impleading of party, application for---Applicant had filed application under S.21(6) of Pakistan Environmental Protection Act, 1997, read with O.I, R.10, C.P.C. with the prayer to implead him as respondent in the proceedings in the interest of justice-Validity-Under R.13 of Environmental Tribunal Rules, 1999, Code of Criminal Procedure, 1898 was applicable to the proceedings before the Environmental Tribunal relating to trial of offences under S.17 of Pakistan Environmental Protection Act, 1997---Tribunal under S.17 of the .Act, was competent to take cognizance against the person who contravened or failed to comply with the provisions of Ss.11, 12, 13, 16 of the said Act" By virtue of S.21(4) of Pakistan Environmental Protection Act, 1997, Tribunal while exercising criminal jurisdiction, would have the same powers as were vested in the Court of Session under Cr.P.C.---Section 21(6) of Pakistan Environmental Protection Act, 1997, though had provided that in all matters with respect to which no procedure had been provided for by the Act, the Tribunal would follow the procedure laid down in the Cr.P.C,; but while exercising jurisdiction under any law, the Tribunal was not to negate the substantial principles of natural justice in coining its own procedure for criminal or civil jurisdiction by overlapping each other in a particular matter---In all the complaints, whether filed by Environmental Protection Agency or by private person, criminal jurisdiction had to be exercised under Cr.P.C. and general principles of natural justice, incidental to applicability of Criminal Procedure, should be adopted---Criminal Procedure Code carried no provisions which supported the addition (impleading) of party during the trial--- Application for impleading as party was dismissed accordingly.

ADPP with Khalid Mehmood, Inspector (Legal) EPA, Lahore for the Complainant.

Ghulam Rasool for Respondent.

Date of hearing: 9th February, 2011.

2011 CLD 1155

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

Syed MAQSOOD ALI SHAH POULTRY FARM---Respondent

Complaint No. 219 of 2010, decided on 17th January, 2011.

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

----Ss. 11, 16 & 21---Environmental protection order, violation of---Complaint was filed by Environmental Protection Agency against the respondent unit through its owner who appeared and filed reply to allegation---Respondent undertook that he would keep the area clean and disinfect and would not let the solid waste of his Poultry Farm scatter to contaminate the natural streams of the area---To confirm the statement of the respondent, the department was directed to conduct the site inspection---Site inspection report had revealed that though preventive measures had been adopted by the respondent, but distance of respondent Poultry Farm from residential area and from natural streams was not mentioned---Respondent unit was situated in Rawal Lake Catchment area and close to natural streams in the area and residential area of the village---Guidelines regarding the poultry farms specifically mentioned the distance of poultry farms from human settlement which was 500 meters---Distance was required to be measured specifically to arrive at just and proper decision and without those measurements the complaint could not be disposed of---Order accordingly.

Ijaz Majeed, AD (L. & E.), EPA, Lahore with Inam-ul-Haq, Inspector EPA, Rawalpindi for the Complainant.

Azhar Rehmand Abbasi for Respondent.

Date of hearing: 17th January, 2011.

2011 C L D 1168

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

WALID JUNAID STEEL MILLS, SHEIKHUPURA---Respondent

Complaint No. 122 of 2009, decided on 7th February, 2011.

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

----Ss. 11, 16, 21 & 22---Prohibition of certain discharges or emissions---Violation of environmental protection order---Complaint alleged that respondent unit was creating environmental pollution by generating dust and smoke in the atmosphere---Site inspection conducted by the Inspector confirmed the environmental pollution emitting through respondent unit---Smoke was due to burning of deposition residual material---No device had been installed by the unit to control the air pollution---Environmental protection order was issued directing the unit to adopt remedial means---Respondent appeared through counsel and stated that unit was closed and not operational---Site inspection was directed to be conducted to verify the statement of counsel for the respondent---Inspection report revealed that unit was not in operation as its main gate was closed, and that owner/unit was bank and WAPDA defaulter---Unit though was closed, but offence complained, had already been committed by it in the past, which could not be ignored by mere closure of the unit---Respondent having already committed offence under S.11 of Pakistan Environmental Protection Act, 1997, it must be summoned according to law by issuing him bailable/non-bailable warrant of arrest--- Order accordingly.

ADPP with Khalid Mehmood, Inspector (Legal) EPA, Punjab for the Complainant.

Nemo for Respondent.

Date of hearing: 7th February, 2011.

2011 C L D 1179

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

SARDAR FAKHAR IMAM---Complainant

Versus

TAJ PAPER MILLS and others---Respondents

Complaint No. 616 of 2010, decided on 29th March, 2011.

Environmental Tribunal (Procedure and Functions) Rules, 2008---

----R. 21---Criminal Procedure Code (V of 1898), Chapter VI [Ss.68 to 93]---Processes to compel appearance---Mode of---Relevant provisions prescribed for the issuance of process under Criminal Procedure Code, were Ss.68 to 93---Court was empowered to issue summons/warrant of arrest, with or without surety to compel the appearance of any party; for that S.H.O. of the concerned Police Station was the agency whose services could be adopted for the purpose---Modes were also prescribed under R.21 of the Environmental Tribunal (Procedure and Functions) Rules, 2008 i.e., S.H.O. of Police Station concerned would also be responsible for executing any warrant of arrest against any person within his jurisdiction---In view of said provisions of law, serving notice through District Officer (Environment) concerned was not permissible as District Officer (Environment) acted as complainant and witness in the case---Report of said officer regarding the service of respondent, could not be relied upon safely---Issuance of notice through District Officer (Environment) to compel the appearance of respondent, was illegal as not permissible under the law.

Ghulam Rasul Clerk for the Complainant's Counsel.

ADPP with Khalid Mehmood, Inspector EPA, Lahore for Respondents Nos. 3, 4 and 5.

Date of hearing: 29th March, 2011.

2011 CLD 1189

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

Mian MUHAMMAD IMRAN---Complainant

Versus

PARAMOUNT ENGINEERING WORKS---Respondent

Private Complaint No. 43 of 2008, decided on 29th March, 2011.

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

----Ss. 11, 12, 13, 16 & 17---Criminal Procedure Code (V of 1898), S.342---Prohibition of certain discharges or emissions---Violation of environmental protection order---Power to examine accused---Statement of accused under S.342, Cr.P.C. had not been recorded, immediately after the prosecution evidence was completed which could be termed as violation of the mandatory provisions of S.342, Cr.P.C.---Resultantly, the whole trial could be' vitiated---Recording of statement of accused under S.342, Cr.P.C. was necessary before proceedings further---Order accordingly.

Mian Muhammad Imran Complainant in person.

Akhtar H. Awan along with Liaqat owner of Unit for Respondent.

Date of hearing: 29th March, 2011.

2011 C L D 1209

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

GULZAREEN POULTRY FARM---Respondent

Complaint No. 220 of 2010, decided on 17th January, 2011.

Pakistan Environmental Protection Act (XJCXIV of 1997)---

----Ss. 11, 16 & 21---Complaint---Tenant of respondent had stated that the soakage pit as well as burial pit were already provided by the owner of the Poultry Farm when he took over the same---Representative of complainant department who was directed to get the site inspected for verifying the statements of the tenant filed report---Said report revealed that compliance of the directions issued by the department had already been made by the respondent---Site Inspection Report filed by the department revealed that respondent poultry farm was situated near the river and it was apprehended that poultry farm would pollute the river, which was a natural reservoir---Guideline adopted by Pakistan Environmental Protection Agency was that poultry farm should be situated 500 meters away from the human settlement and on the leeward side---Farm being near the river, it was to be shifted 500 meters' away from the river---Order accordingly.

Ijaz Majeed, AD (L & E), EPA, Lahore with Inam ul Haq, Inspector EPA, Rawalpindi for the Complainant.

Azhar Rehman Abbasi along with Respondent.

Date of hearing: 17th January, 2011.

2011 C L D 1220

[Environmental Tribunal Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Khalil (Member Tech.) and Ms. Gulzar Butt (Member Legal)

DG EPA---Complainant

Versus

HAFEEZ STEEL MILLS---Respondent

Complaint No. 8 of 2010, decided on 28th March, 2011.

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

----Ss. 11, 16, 17 & 21---Criminal Procedure Code (V of 1898), S.265-D--- Complaint--- Causing pollution--Imposition of penalty---Non-compliance of procedure---Effect---Complaint filed against respondent for causing pollution was accepted and a fine of Rs.50,000 was imposed upon the respondent---Court was obliged to follow the procedure laid down in Chapter XXII-A, Cr.P.C. and prior to passing any conviction, charge had to be framed under S.265-D, Cr.P.C.---If accused would plead guilty, it would be compulsory for the court to record the plea and thereafter pass the order of conviction.

ADPP with Khalid Mehmood, Inspector EPA, Punjab for the Complainant.

Azhar Majeed Bhatti for Respondent.

Date of hearing: 28th March, 2011.

2011 C L D 1232

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal, Chairperson and Ch. Muhammad Khalil, Member Technical

RAHEEL MAJEED---Complainant

Versus

DG EPA---Respondent

Private Complaint No. 15 of 2008, decided on 18th May, 2011.

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

----Ss. 11, 12, 16, 17 & 21---Running factories without securing environmental approval---Complainants had alleged that factories in question were being run without securing environmental approval which was necessary under S.12 of Pakistan Environmental Protection Act, 1997; that operation of heavy electrical hammer in the factories was causing loud noise, vibration and tremors as a result of which the adjoining houses and buildings were being damaged; that odour and pungent fumes emitted by those factories were adversely affecting health of nearby inhabitants and that parking and plying of heavy vehicles in the street was causing nuisance---Chief Analyst, got conducted detailed site inspection of the Units/Factories with the conclusion that 'NOx, SO2, H2S from the exhaust of heating furnace did not exceed NEQs limits and that there was negligible impact of noise in and around the Factory---Allegations of loud noise, vibration and tremors caused by operation of electric hammers of the factories, emission of offensive odour and pungent fumes from the factories; and nuisance caused by parking and plying of heavy vehicles, were not established---Main charge against the factories was that of "expansion of the unit especially installation of aluminum moulding section (extruder) anodizing work and fibre glass ladder section without securing environmental approval mandatory under S.12 of Pakistan Environmental Protection Act, 1997---Factories had not produced 'no objection certificate' for establishing, expanding and operating their units; they had failed to comply with the provisions of S.12 of the Act---Fine pf Rs.1,00,000 for the units for such non-compliance, was imposed upon the factories.

Saeed Ahmed along with Complainant. ADPP for Respondent No. 1.

Ashfaq Amir on behalf of Akhtar H. Awan for Respondents Nos. 2 and 3.

Date of hearing: 2nd May, 2011.

2011 C L D 1280

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal (Chairperson), Ch. Muhammad Khalil (Member Technical) and Ms. Gulzar Butt (Member Legal)

PAKISTAN MOBILE COMMUNICATION, SANGLA HILL---Applicant/Appellant

Versus

DG EPA---Respondent

Application No. 5 of 2011, decided on 18th February, 2011.

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

----Ss. 12, 16, 21 & 22---Premises wherein Diesel Generator was causing severe vibration and noise pollution in residential area was sealed---Application for de-sealing of premises---Environmental protection order was issued to the applicant directing to stop within 10 days operation of said Diesel Generator being operated within the premises without obtaining environmental approval---Environmental Protection Agency during pendency of application filed by the applicant against environmental protection order, sealed the premises (Tower)---Application for de-sealing of premises was filed much after expiry of limitation period of filing of appeal---Record had revealed that premises in question was situated in the children park of residential area---Such aspect of the matter could not be decided without hearing the final arguments in detail---Prima facie de-sealing of the premises, could cause adverse environmental effect and irreparable loss to public at large in the children park and adjacent area---Balance of convenience, in circumstances, lay in favour of public at large and not in favour of applicant---By sealing the premises, the department had rightly acted upon its own direction embodied in environmental protection order as no status quo was granted by the Tribunal to suspend the operation of impugned order---No provision existed in Pakistan Environmental Protection Act, 1997 to de-seal the unit prior to final decision---Department had rightly sealed the premises and its de-sealing was not permissible---Matter regarding de-sealing had to be decided at the final hearing of appeal.

Hamood ur Rehman for Applicant/Appellant.

ADPP with Aamir Shah Inspector (Legal) EPA for Respondent.

Date of hearing: 18th February, 2011.

2011 C L D 1295

[Environmental Tribunal, 'Lahore]

Before Khawaja Muhammad Afzal (Chairperson) and Ch. Muhammad Khalil (Member Technical)

LAFARGE PAKISTAN CEMENT COMPANY LTD.---Complainant

Versus

DG EPA---Respondent

Complaint No. 9 of 2008, decided on 6th July, 2011.

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

---Ss. 12, 16, 17 & 21---Complaint against construction of plant causing pollution---Environmental protection order---Appeal against--- Appellant company had challenged validity and legality of environmental protection order gassed by the Authority on private complaint-Contention of the company was that construction of plant in question was started in the year 1994 when Pakistan Environmental Protection Act, 1997, was not in existence and it was not possible for the appellant company to obtain approval from Environmental Protection Authority under S.12 of the Act---Company, however in order to ensure compliance of law, submitted its Environmental Impact Assessment Report to the Authority---Environmental Impact Assessment of construction of the project was to be deemed to have been approved w.e.f. four months after completion of the requisite data to the extent to which it did not contravene the provisions of Pakistan Environmental Protection Act, 1997 and the Regulations made thereunder---Company, however, had failed to obtain the mandatory permission of the Environmental Protection Authority for operation of factory under S.12 of the Act---For such violation a fine of Rs.100,000 was imposed on the company---Representative of the Authority had admitted that remaining directions given in the environmental protection order had been carried out by the company---Company was directed to approach the concerned authority for approval of operation of the unit accordingly.

Date of hearing: 6th July, 2011.

2011 C L D 1325

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal (Chairperson) and Ch. Muhammad Khalil (Member Technical)

DG EPA---Complainant

Versus

MULTAN INDUSTRIAL ESTATE, MULTAN---Respondent

Complaint No. 25 of 2008, decided on 13th June, 2011.

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

----Ss. 11, 16 & 21---Environmental pollution caused by untreated and improper disposal of waste water--Inspector had submitted site Inspection report to the effect that environmental pollution caused by the untreated and improper disposal of waste water of Industrial Estate concerned was of acute and chronic nature and damaging the environment, health and lives of people living in the area---President Board of Management, Industrial Estate in response to notice submitted in his written reply that Environmental Impact Assessment of Phases-I and II of the estate had already been initiated which would be followed up by design and construction of Combined Effluent Treatment Plant (CETP) in partnership with Government for environmental compliance---Defence of the. estate was rejected by the complainant agency and environmental protection order was issued---Paper books submitted by the estate, a project in public sector, had revealed that it had completed the duty of resolving the problems of immediate nature which were within its capacity and control---Estate had completed the planning phase for long term actions and prepared a PC-I of Rs.219,969 million for the construction of Waste Water Treatment Plant which would lead to the compliance of rest of the directions of environmental protection order---Complaint against the Estate was disposed of with direction to the Estate to pursue the case with the Government till its completion.

Date of hearing: 28th April, 2011.

2011 C L D 1351

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal (Chairperson) and Ch. Muhammad Khalil (Member Technical)

D.G. KHAN CEMENT COMPANY LTD.---Appellant

Versus

EPA, GOVERNMENT OF PUNJAB---Respondent

Appeal No. 8 of 2008, decided on 10th June, 2011.

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

----Ss. 11, 12, 16, 17 & 21---Appellant company had challenged the validity and legality of environmental protection order passed by Agency under S.16 of Pakistan Environmental Protection Order, 1997---Apart from other directions, the appellant company was directed by the Authority to apply for paying penalty/fine regarding violation of S.12 of the Pakistan Environmental Protection Act, 1997---Appellant had contended that said direction was illegal, without jurisdiction and contrary to the provisions of Pakistan Environmental Protection Act, 1997, as under S.21(2) of the said Act such authority lay exclusively with the Environmental Tribunal---In view of the documentary evidence produced by the appellant, it was clear that company had complied with other directions contained in the impugned environmental protection order---Impugned direction whereby appellant was directed to apply for paying penalty/fine, was declared by the Tribunal to be without jurisdiction and of no legal effect.

ADPP for Respondent.

Date of hearing: 10th June, 2011.

2011 C L D 1360

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal (Chairperson) and Ch. Muhammad Khalil (Member Technical)

ZIA ULLAH---Complainant

Versus

DG EPA---Respondent

Private Complaint No. 41 of 2009, decided on 30th April, 2011.

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

----Ss. 11, 12, 16, 17 & 21---Unit causing environmental pollution---Complaint against---Complainant had not served mandatory notice of 30 days on Environmental Agency as required by S. 21(3)(b) of Pakistan Environmental Protection Act, 1997---Failure to observe Codal formalities by complainant, complaint was not maintainable.

Nemo for the Complainant.

ADPP for Respondent.

Date of hearing: 30th April, 2011.

2011 C L D 1373

[Environmental Tribunal, Lahore]

Before Khawaja Muhammad Afzal (Chairperson) and Ch. Muhammad Khalil (Member Technical)

DG EPA---Complainant

Versus

SHAHEEN FOUNDRY, OKARA---Respondent

Complaint No. 20 of 2009, decided on 13th June, 2011.

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

----Ss. 11, 12, 16, 17 & 21---Complaint against high level of noise and fumes of organic solvents caused by company/unit---Order directing company to control environmental problems--- Appeal--- Company, in the environmental protection order was directed to take necessary measures for the control of environmental protection and was directed to adopt remedial measures to control high level of noise and fumes of organic solvents---Company stated that it was doing its business within four walls of its workshop and no noise or any kind of fumes travelled beyond its boundary wall---Only ground for proceeding against the unit/company was that it was causing noise pollution which was a source of discomfort---Test analysis of noise and fumes of organic solvents conducted by Laboratory and Chief Analyst, was to the effect; that high noise was produced during operation of the unit which was a source of discomfort; and no fumes of organic solvents were observed---Levels of noise and fumes, were to be taken as within NEQS limits for the unit was located in a commercial area---No case of causing pollution had been made out against the unit/company---Complainant having failed to prove its case against the company, complaint was dismissed, in circumstances.

Date of hearing: 13th June, 2011.

2011 CLD 857

[Environmental Protection Tribunal Karachi]

Before Mrs. Ashraf Jahan, Chairperson, Dr. Sami-uz-Zaman, Member Technical and Abdul Karim Memon, Member Legal

DIRECTOR-GENERAL, ENVIRONMENTAL PROTECTION AGENCY, GOVERNMENT OF SINDH, KARACHI---Complainant

Versus

Khawaja ANWAR MAJEED, CHIEF EXECUTIVE OFFICER, ANSARI SUGAR MILLS, KARACHI---Respondent

Complaint No. 7 of 2010, decided on 31st May, 2010.

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

----S. 16---Environmental Tribunals (Procedure and Functions) Rules, 2008, R.9(c)---Change of management of mills---Complaint against new management---New management had taken over the charge of mills in question from the Receiver---Samples were taken and examined much prior to taking over the charge of mills by new management---Such change of management of mills being not in the knowledge of the complainant, no fresh notice of personal hearing under S.16(1) of Pakistan Environmental Protection Act, 1997 had been served on the new management---Samples of material in question were collected about nine months prior to taking over the mills by new management and at that time personal hearing was given to the then management---Later on, samples were again collected two years after change of management, but neither said samples were delivered to the new management nor copy of the laboratory report was delivered to them; and complaint had been filed without providing the opportunity of hearing to new management---Such conduct of the authorities reflected their negligent, careless and non-serious attitude in performance of their official duties---Present complaint, was also silent as to whether new management was complying with the smart program or not---When the results of the laboratory were again found in excess of National Environment Quality Standard, it became incumbent upon the authorities to monitor the mills---Application under R.9(c) of the Environmental Tribunals (Procedure and Functions) Rules, 2008 filed for withdrawal of complaint, was allowed, with permission to file fresh one if so required.

Abdul Maroof, D.D.P.P. for E.P.A. Sindh.

Muhammad Rafi for Respondent.

2011 CLD 1253

[Environmental Protection Tribunal, Karachi]

Before Mrs. Ashraf Jehan (Chairperson) and Abdul Karim Memon (Member Legal)

DIRECTOR-GENERAL, ENVIRONMENTAL PROTECTION AGENCY---Complainant

Versus

[SMAIL H. ZAKARIA, CHIEF EXECUTIVE OFFICER---Respondent

Complaint No. 4 of 2010, decided on 15th February, 2011.

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

----Ss. 11, 16, 21 & 22---Environmental Samples Rules, 2001, R.8(2)---Environmental pollution by wastewater generated by mill---Complaint was filed by Authority to the effect that after test and analysis of sample of wastewater of mill, it was observed that the level of Biochemical Oxygen Demand, Chemical Oxygen Demand, Total Suspended Solid, Grease and Oil, were in excess of National Environmental Quality Standards; that the wastewater being generated by the mill was discharged in the environment without any in-house treatment, which was adversely contaminating the water quality of canals; and that said wastewater was not only affecting the ecology of the area, but also causing water borne diseases to a large section of the population residing in the vicinity---Mill was involved in violation of S.11 of Pakistan Environmental Protection Act, 1997; and that twice the mill was inspected and both the times results were found in excess of National Environmental Quality Standards---Not a single witness in support of said allegations was examined by the complainant/ prosecution---None of the members of the team of Environmental Protection Agency which inspected the mill had been examined by the prosecution in support of their case---Case of mill was that no samples were taken by Environmental Protection Agency; in every document, different sample number and identification was mentioned which was glaring contradiction in sample identification, and a fatal blow to the case of the prosecution; alleged samples were received in the laboratory six days after collection of said samples and there was no plausible explanation for said inordinate delay as to where said samples were lying for said intervening six days and who was responsible for that period---As per R.8(2) of Environmental Sample Rules, 2001, samples were to be delivered within forty-eight hours to the laboratory for test and analysis---Prosecution had not examined any independent witness in whose presence the samples were taken as required by Rules---Complainant also did not disclose as to what type of pollution could be caused by the mill---Prosecution having failed to prove the charge against the mill, same was acquitted in the case---As it was established that Laboratory Authorities had failed to perform their official duties diligently, in accordance with law; they remained oblivious of the legal consequences of their lethargic, casual 'and unprofessional conduct, due to which the whole case of prosecution was seriously damaged, observations were recorded by the Tribunal in that respect.

Jamil Khan Afridi v. The State 2004 MLD 542 and Ashfaq v. The State 1993 SCMR 147 ref.

Abdul Maroof, Deputy District Public Prosecutor for SEPA.

Muhammad Jamshid Malik for Respondent.

Date of hearing: 15th February, 2011.

2011 CLD 1271

[Environmental Protection Tribunal, Karachi]

Before Mrs. Ashraf Jahan (Chairperson) and Abdul Karim Memon (Member Legal)

SINDH PARTICLE BOARD MILLS LIMITED through Company Secretary---Appellant

Versus

ENVIRONMENTAL PROTECTION AGENCY through Director-General---Respondent

Appeal No. 1 of 2010, decided on 20th January, 2011.

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

----Ss. 11, 12, 16, 21 & 22--Issuance of environmental protection order against environmental pollution---Various complaints were made against mill that it was manufacturing chipboard from Bagasse (solid waste of sugarcane), with a mixture of various chemicals; and during the process of grinding of the chipboard, small/very fine chemically mixed particles were freely released in the open air spread/fly in the area; there was bad smell and health of the workers and their families in the nearby colonies had been affected badly; not only human life was suffering, but the agriculture crop had been affected---Comments of Environmental Protection Agency, which were based on facts and findings, complaints of various persons and mills was survey reports, had established that appellant involved in causing pollution which was injurious to the health of workers as well as residents of adjoining villages and the surrounding areas---Attitude of mill was a classic example of high-handedness which could not be given protection---Letters, visit reports, show-cause notices and even earlier environmental protection order, had not been complied with by the mill---Mill in circumstances, could not take the stand that no personal hearing was given to it for treatment of the environmental issues---Mill having no case on merits, environmental protection order, impugned in the appeal, had rightly been issued which could not be interfered with in appeal.

Zulfiqar Norrani for Appellant.

Abdul Maroof, DDPP for Respondent.

Date of hearing: 20th January, 2011.

2011 C L D 1355

[Islamabad]

Before Iqbal Hameed-ur-Rehman, C.J.

MCB BANK LIMITED through Manager---Plaintiff

Versus

Messrs MILLENNIUM SECURITIES AND INVESTMENT PRIVATE LIMITED through Chief Executive and 6 others---Defendants

C.O.S. No. 5 of 2009 and C.Ms. Nos. 168, 166, 194 of 2009 and 204 of 2011, decided on 13th July, 2011.

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

----Ss.9 & 16 (1)---Civil Procedure Code (V of 1908), O.XXXVIII, R.5---Recovery of bank loan---Attachment before judgment--- Property not mortgaged--­-Apprehensions of plaintiff---Scope---Bank sought attachment before judgment of the properties of defendants which were not mortgaged at the time of availing of loan---Validity---Attaching of the properties would adversely affect the business of defendants and their business would come to halt, as such the same could not be justified in any manner, in presence of sufficient security being available to the bank in the form of mortgaged property---Provision of S. 16(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was applicable to the properties mortgaged/ pledged, whereas bank had sought attachment of properties other than mortgaged/ pledged properties, therefore, application was not sustainable---Order for attachment before judgment could be passed under O.XXXVIII, R.5, C.P.C. on mere apprehensions/ presumptions---High Court declined to attach the properties of defendant before judgment---Application was dismissed in circumstances.

Messrs MEC Shipbreakers Ltd. v. Messrs Peason Investment Inc. and another PLD 1982 Kar. 701 rel.

Omer Farooq Adam, Muhammad Aslam Aryan and Shoaib Aslam for Plaintiff.

Ehsan Ahmad G. Khawaja for Defendants Nos. 1 to 5.

Muhammad Ghani for Defendant No. 7.

2011 CLD 84

[Karachi]

Before Muhammad Ali Mazhar, J

MCB BANK LIMITED---Plaintiff

Versus

EASTERN CAPITAL LTD. and 7 others---Defendants

Suit No.B-42 of 2009 in C.M.As. Nos.8027, 2444, 2445, 4684 and 4685 of 2009, decided on 16th September, 2010.

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

----Ss. 9 & 10(4)(5)---Qanun-e-Shahadat (10 of 1984), Arts.117 & 120---Bankers' Book Evidence Act (XVIII of 1891), S.4---Recovery of bank loan---Liability, determination of-Shifting of onus---Procedure---Bank sought recovery of bank loan and liability was not disputed by defendants---Effect---Plaintiff-Bank was responsible under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, in first phase to submit statement of accounts duly certified under Bankers' Book Evidence Act, 1891, with supporting documents and thereafter burden was shifted to defendants to answer the claim keeping in view the provisions of S.10(4) and (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---In order to avoid delay in disposal, efforts should be made to institute banking suit and file leave to defend in letter and spirit of law along with property documents relating to disbursement of finance facility, payments, repayments and plaint and leave to defend must be equipped with proper break up of amount---Terms of rescheduling/restructuring/settlement of liabilities were accepted and agreed vide letter/agreement which showed that liability was accepted with due care and caution after institution of suit and filing of leave to defend application, therefore, in view of the clear admission of liability, instead of dismissing the application for leave to defend for non-compliance of requirement of S.10(4) and (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, in all conscience---High Court passed an interim decree against the defendants on the basis of undisputed letter/agreement produced by the plaintiff-Bank along with the replication---Suit was decreed accordingly.

Messrs Taxila Cotton Mills Ltd. v. Allied Bank of Pakistan Limited 2005 CLD 244; Rafaqat Ali and 2 others v. Muslim Commercial Bank Limited 2006 CLD 115; Messrs Iqbal Traders v. National Bank of Pakistan 2006 CLD 977 and Messrs Allahwallah Printers v. The Bank of Punjab 2004 CLD 1643 ref.

Behzad Haider for the Plaintiff.

Emmad-ul-Hassan for the Defendants Nos. 1 to 4 and 6 to 8.

Khadim Ali Metlo, holding brief on behalf of Saleem Thepdawala for Defendant No.5.

2011 C L D 161

[Karachi]

Before Muhammad Tasnim, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

WALI BHAI INDUSTRIES (PVT.) LTD. and 3 others---Defendants

Suit No.B-88 and C.M. No.7881 of 2009, decided on 5th November, 2010.

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

----Ss. 9 & 10---Recovery of bank loan---Application for leave to defend the suit---Question of law and fact---Scope---Defendants admitted availing of finance facilities and also admitted that entire liability was not discharged, however certain payments were made by defendants---Defendants also admitted execution of documents and substantial amount was liable to be paid to bank---Validity---No substantial question of law and fact was raised by defendants, which required any evidence to be recorded by Court---Defendants were supposed to show that entire amount was paid by defendants to bank but defendants failed to make out any substantial question of law or fact which required evidence to be recorded---High Court declined to grant leave to defend the suit to defendants---Suit was decreed in circumstances.

Qamaruzzamen Khan v. Industrial Development Bank of Pakistan and others 2009 CLD 460; Messrs Yussra Textile Corporation and 2 others v. PICIC Commercial Bank Limited 2003 CLD 905; Abdul Razzaq v. A.D.B.P. 2002 CLD 1707; Sheikh Muhammad Kashif Zia and another v. Bank of Punjab and another 2004 CLD 388; Allied Bank of Pakistan Limited v. Fahmida and 2 others 2004 CLD 110; Messrs Mohib Exports Ltd. and 4 others v. Trust Leasing Corporation Ltd. 2005 CLD 581; Messrs ARK industrial Management Ltd. v. Messrs Habib Bank Limited PLD 1991 SC 976; Mrs. Yuba Jamil Ansari v. Bank Al-Falah Limited and another 2009 CLD 1177; Habib Bank Limited v. Messrs Pearl Fabrics Ltd. and 7 others 2009 CLD 1185 and Muhammad Khalid Butt v. United Bank Limited 2003 CLD 911 distinguished.

Habib Bank Limited v. Messrs SABCOS (Pvt.) 2006 CLD 244; Zeeshan Energy Ltd. and 2 others v. Faisal Bank Ltd. 2004 CLD 1741; Shahid Farooq Sheikh v. Allied Bank of Pakistan Limited 2005 CLD 1489; National Development Finance Corporation v. Spinning Machinery Company of Pakistan Limited 2002 CLD 53; Industrial Development Bank of Pakistan v. N.T.N. (Pvt.) Limited 2002 CLD 369; Bolan Bank Limited v. Baig Textile Mills (Pvt.) Limited and 6 others 2002 CLD 557; Saudi Pak Industrial and Agriculture Investment Company (Pvt.) Limited, Islamabad v. Mohib Textile Mills Limited Lahore and 3 others 2002 CLD 1170: National Bank of Pakistan v. Messrs A.I. Brother (Private) Limited and others 2007 CLD 1356; Messrs Saudi Pak Commercial Bank Limited v. Messrs Marva Agrochem (Private) Limited and 9 others 2007 CLD 1374; H.B.L. v. Crescent Software Products (Pvt.) Ltd. 2009 CLD 412; International Finance Corporation v. Sarah Textiles Ltd. and 3 others 2009 CLD 761; Faysal Bank Limited v. Genertech Pakistan Ltd. and 6 others 2009 CLD 856; Habib Bank Ltd. v. Paragon Industries (Pvt.) Limited and 5 others 2009 CLD 1346; NIB Bank Limited v. Taha Spinning Mills Limited and others 2010 CLD 635 and United Bank Limited v. Progas Pakistan Limited 2010 CLD 828 ref.

Qutab-ud-Din Saim Hashmi for Plaintiff.

Muhammad Arif Sheikh for Defendant.

2011 CLD 168

[Karachi]

Before Muhammad Tasnim, J

HOUSE BUILDING FINANCE CORPORATION LIMITED---Plaintiff

Versus

FIRST DAWOOD INVESTMENT BANK LIMITED---Defendant

Suit No.B-69 and C.M.A. No.7872 of 2009, decided on 2nd November, 2010.

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

---Ss. 9 & 10---Recovery of bank loan---Application for leave to defend the suit---Relationship of banker and customer---Proof---Question of law and fact---Payment of mark-up---Bank sought recovery of bank loan against defendant being defaulter---Defendant denied relationship of banker and customer between them---Validity---Defendant availed finance facility and certain payments were made by defendant to bank on account of mark up, therefore, defendant could not challenge relationship of banker and customer between the parties---Defendant admitted availing of financial facility and also admitted that nothing had been paid towards principal amount which was payable by defendant to bank---Defendant failed to make out any substantial question of law or fact which required evidence to be recorded---High Court declined to grant leave to defend the suit to defendants---Suit was decreed in circumstances.

Karachi Electric Provident Fund v. National Investment (Unit) Trust and others 2003 CLD 1026 ref.

Ijaz Ahmed for Plaintiff.

M. Salim Thepdawala for Defendant.

2011 C L D 173

[Karachi]

Before Muhammad Ali Mazhar, J

CRESCENT STAR INSURANCE COMPANY LIMITED---Plaintiff

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Defendant

Suit No.857 of 2009, decided on 15h October, 2010.

(a) Insurance Ordinance (XXXIX of 2000)---

----S. 63---Specific Relief Act (I of 1877), Ss.42 & 54---Plaintiff, an Insurance Company filed suit for declaration along with permanent injunction on the ground that directive issued by Securities and Exchange Commission of Pakistan requiring the Company to cease its business within one month from the date of direction, was in contravention and violation of S.63 of the Insurance Ordinance, 2000 and further pleaded that no directive could be issued by the Commission without giving the insurer an opportunity to be heard---Commission contested suit on the ground that directives were issued under subsection (1) of S.63 of the Insurance Ordinance, 2000 and the said subsection was not regulated by subsection (2) of S.63 of the said Ordinance. therefore, directive was rightly issued without any show-cause notice or affording an opportunity of hearing under the proviso attached to clause (d) of subsection (2) of S.63 of the Ordinance---Validity---Proviso attached to clause (d) of subsection (2) of S.63 of the Insurance Ordinance, 2000 clearly provided that the directive should not be issued under the said clause without giving the insurer an opportunity to be heard---Subsection (1) of S.63 could not be read in isolation but it had to be read along with subsection (2), particularly clause (d) in which the legislature had provided a procedure and mechanism to deal with the situation when the Commission deemed it fit and proper to issue directives and non-compliance of the directives might result further repercussions which might include the direction to cease entering into new contracts of insurance but this could only be done after giving insurer an opportunity to be heard---Directive issued without complying with the requirement of said proviso was bad in law---High Court decreed the suit of the plaintiff Insurance Company by declaring that directive had been issued without lawful authority which had no legal effect with further clarification that Commission was a regulatory authority and present judgment would be without prejudice to the right of the Commission to initiate action and to issue directive to the plaintiff for non-compliance, if any, after providing an opportunity of hearing as envisaged under the proviso attached with clause (d) of subsection (2) of S.63 of the Ordinance.

Collector Sahiwal and 2 others v. Muhammad Akhtar1971 SCMR 681; New Jubilee Insurance Company Ltd. v. National Bank of Pakistan PLD 1999 SC 1126; Miss Rukhsana Soomro v. Board of Intermediate and Secondary Education, Larkana 2000 MLD 145; Collector Sahiwal and 2 others v. Muhammad Akhtar 1971 SCMR 681; Qurban Ali Abbasi v. Province of Sindh PLD 2009 Kar. 327 and Humayoon Muhammad Khan v. Province of Sindh 2009 CLC 1473 ref.

1971 SCMR 681; PLD 1999 SC 1126 and 2000 MLD 145 rel.

(b) Administration of justice---

----Where the notice required to be given by the statute was mandatory, then failure to comply with the said mandatory requirement of the statute would render the act void ab initio.

PLD 1999 SC 1126 rel.

(c) Administration of justice---

----Person could not be said to have been given a fair and proper trial unless he was provided a reasonable opportunity to defend the allegations made against him.

2000 MLD 145 rel.

(d) Insurance Ordinance (XXXIX of 2000)---

----S. 63(1) & (2)---Directive by Securities and Exchange Commission of Pakistan---Scope---Subsection (1) of S.63 of the Insurance Ordinance, 2000 could not be read or applied in isolation but it would be read in conjunction with subsection (2) which provided that Commission might issue directions to cease entering into new contracts on happening of some events or pre-conditions, which were mentioned in sub-clause (a) to clause (d) in subsection (2)---Proviso attached to clause (d) had made it mandatory that directions should not be issued under clause (d) without giving insurer an opportunity to be heard.

Amel Kansi for Plaintiff.

Ijaz Ahmed for Defendant.

2011 C L D 193

[Karachi]

Before Muhammad Ather Saeed and Munib Akhtar, JJ

SONERI TRAVEL AND TOURS LTD. Through Chief Executive/Director/Secretary---Appellant

Versus

SONERI BANK LIMITED---Respondent H.C.A. No.141 of 2010, decided on 28th October, 2010.

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

----Preamble, Ss. 40 & 92---Trade Marks Act (V of 1940), Preamble---Background of promulgation of Trade Marks Ordinance, 2001 repealing Trade Marks Act, 1940---Provisions of Ss.40 & 92 of Trade Marks Ordinance, 2001, distinction between---Applicability of case-law under Act, 1940 to provisions of Ordinance, 2001---Scope stated.

The multilateral trade negotiations round known as the Uruguay round culminated in the establishment of the World Trade Organization (known as the WTO) by means of the Marrakesh Agreement, which came into effect on 01-011995. Along with the Marrakesh Agreement, the State party to the same (known as Member States including Pakistan) also entered into a number of other agreements, one of the most important of which was the Agreement on Trade-related Aspects of Intellectual Property Rights (commonly known as TRIPS). As its name suggest, TRIPS; relates to Intellectual Property Rights including patents, trade marks and designs. Developing countries like Pakistan were given certain grace period/ in this regard, which in the case of TRIPS extended upto 5 years. Part-I of TRIPS lays down certain general provisions and basic Principles, while Section-2 of Part-II specifically deals with trade marks and related rights. Article 2 (which is to be found in Part-I) provides that in respect of Part-II, Member States have to comply with Article-1 through 12 and 10 of another agreement, the Paris Convention for the Protection of Industrial Property as amended (commonly known as the Paris Convention). Thus, in order to comply with their obligations under TRIPS, the Member States also had to be in compliance of the Paris Convention. Pakistan became a signatory to the Paris Convention on 22-07-2004.

It was in order to comply with its obligations under TRIPS that Pakistan repealed its then existing Intellectual Property Laws, being the Patents and Designs Act, 1911 and the Trade Marks Act, 1940, and replaced them with the Patents Ordinance, 2000, the Registered Designs Ordinance, 2000 and Trade Marks Ordinance, 2001 respectively. This is, therefore, the backdrop to the Trade Marks Ordinance, 2001, and in order to understand and apply its provisions properly, it is necessary to keep in mind the relevant provisions of TRIPS and the Paris Convention. If the Trade Marks Act, 1940 and the Trade Marks Ordinance, 2001 are compared, it will be seen that the latter statute introduces many new legal concepts (based of course on TRIPS and the Paris Convention), which were not to be found in the Trade Marks Act, 1940. Even in respect of those legal concepts which may appear to be the same as or similar to those found the Trade Marks Act, 1940, the Trade Marks Ordinance, 2001 in many cases uses new and different statutory language. Thus, even in respect of facts and circumstances which may be same as or similar to those as arose under the Trade Marks Act, 1940, the application of the Trade Marks Ordinance, 2001 may yet yield different results. Cases decided under or in relation or with reference to the Trade Marks Act, 1940 must, therefore, be re-read and re-appraised carefully before they are applied to the provisions of Trade Marks Ordinance, 2001, even if those provisions may appear at first sight to be equivalent to those under the former enactment.

Sections 40 and 92 of Trade Marks Ordinance, 2001 relate to two entirely different and distinct rights, which can exist independently of each other. Section 40 and subsections (4) and (5) thereof relate to the infringement of a trade mark, whereas section 92 relates to trade names.

The legal concepts embodied in the aforesaid provisions are not to be found as such in Trade Marks Act, 1940. These are new concepts, which are based on and emanate from TRIPS and the Paris Convention.

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

---Ss. 40(4)---Registered trade mark, infringement of--Proof-Essential conditions to be fulfilled stated.

Section 40(4) of Trade Marks Ordinance, 2001 applies when the infringing mark is used in relation to goods or service dissimilar to those for which the trade mark being infringed was registered. Section 40(4) applies if all these conditions are fulfilled: (a) the defendant must "use" a "mark" in the course of trade; (b) the mark so used must be either (i) identical with or (ii) deceptively similar to the registered trade mark; (c) the mark must be used in relation to goods and services not similar to those for which the trade mark is registered; (d) the trade mark must have a reputation in Pakistan; (e) the use of the mark must be without cause; and (f) such use must either (i) take unfair advantage of or (ii) be detrimental to the distinctive character or the repute of the registered trade mark.

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

----Ss. 2(xxiv), 39, 40(4)(5), 42 & 92---Companies Ordinance (XLVII of 1984), Ss.37(2) & 143---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---General Clauses Act (X of 1897), S.3(20)---Suit for infringement of registered trade mark and trade name---Plaintiff-Bank having registered trade mark comprising of words "Soneri Bank Ltd.," alleged its infringement by defendant-Travel Agency by using word "Soneri" as part of its company's name "Soneri Travel & Tours (Pvt.) Ltd."---Bank's application for interim injunction to restrain defendant from using word "Soneri" with its company's name---Validity---Burden was on plaintiff to satisfy court that all conditions mentioned in S.40(4) of Trade Marks Ordinance, 2001 were fulfilled, except use of trade mark without cause, onus of which lay on defendant---Provision of S.40(4) of Trade Marks Ordinance, 2001 had not prohibited every "use" of a mark "in the due course of trade"---Non-trade mark use of a mark did not fall within prohibition of S. 40(4) of the Ordinance---Use of word "Soneri" by defendant in relation to its company name was a non-trade mark use thereof--Plaintiff had not identified any particular service or product being offered to public by defendant by using word "Soneri" in trade mark sense---Plaintiff had registered trade mark in respect of only traveller cheques and credit cards, thus, reputation acquired in respect of its banking services or business would not be relevant as concept of "reputation" was linked to goods or services for which trade mark was registered---Debit card for being linked with a bank account was different from credit card---Service of debit card having nexus with banking business was not something being offered by plaintiff in its own right---Plaintiff could not establish that defendant had actually taken unfair advantage by using word "Soneri" as Part of its company name or plaintiff had suffered actual detriment to its registered trade mark---Nothing on record to indicate that defendant had acted dishonestly in adopting or using such name, thus, bare allegation in such regard would not be sufficient---In order to determine likelihood of any confusion between registered trade mark and offending mark, both had to be looked into at a whole and factors requiring consideration would include degree of similarity between relevant marks, degree of similarity between relevant goods or services, likely perception of marks in minds of average consumer of goods or services in question and degree of distinctiveness of earlier mark--Plaintiffs registered trade mark was not simply word "Soneri", but trade mark in its entirety (i.e. words and logo)---Mere use of word "Soneri" by defendant as part of its company would not cause confusion or any other interference with plaintiffs registered trade mark---Right asserted by Bank under S.92 of the Ordinance in relation to a trade name was entirely distinct and separate from rights conferred by a registered trade mark---Plaintiffs name being " Soneri Bank Ltd." being its company's name was its trade name denoting its business of banking, which was protected under S.92 of the Ordinance---Protection provided to a trade name under S.68 of Trade Marks Ordinance, 2001 was to the extent that another person could not use plaintiffs trade name or material part thereof to denote same trade as that of plaintiff ---Defendant's name was "Soneri Travel & Tours (Pvt.) Ltd.", which was its trade name denoting its trade of a travel agency-Banks did not provide travel or travel related services as was being done by defendant---Defendant's use of word "Soneri" did not infringe protection granted to plaintiffs trade name under S.92 of the Ordinance---Interim injunctive relief was declined to plaintiff in circumstances.

Master Enterprises (Pvt.) Ltd. v. Registrar of Trade Marks and another 2010 CLD 692; Tri Star Industries (Pvt.) Ltd. v. Sayyed Engineers (Pvt) Ltd. 2007 CLD 802; Lipha Industrielle Pharmaceutique v. Registrar of Trade Marks and another 2009 CLD 1289; Philip Morris Products, Inc. v. Deputy Registrar of Trade Marks PLD 1996 Kar. 122; Montres Rolex v. Assistant Registrar Trade Marks PLD 1993 Kar. 442; Grinnell Corporation v. Deputy Registrar of Trade Marks 1993 CLC 2201 (Kar.); Ferring A.B. v. Deputy Registrar of Trade Marks 1993 CLC 2203 (Kar.); Nippon Paint Co. Ltd. v. Registrar of Trade Marks 1993 MLD 1094 (Kar.); American Cynamide Co. v. Aero Trading Co. PLD 1992 Kar. 395; Seven Up Company v. Assistant Registrar of Trade Marks 1992 CLC 694 (Kar.); Premier Tobacco Industries Ltd. v. Assistant Registrar of Trade Marks 1992 MLD 1001 (Kar); The Seven Up Co. USA v. Abdul Aziz Nook Muhammad PLD 1976 Kar. 895; Kraft General Foods Inc. v. Abid Anjum 1994 MLD 607 (Lah.); Ellora Industries v. Banarasi Dass Goelal AIR 1980 Delhi 254; Hamdard National Foundation v. Abdul Jalil (1999) 19 PTC. 294; General Motors Corporation v. Yplon SA [1999] ETMR 950 (Case C-375/97); Raymond Ltd. v. Raymond Pharmaceuticals (Pvt.) Ltd. (2010) 112 Bom. LR 2945; Arsenal Football Club v. Matthew Reed [2003] RPC 9 (Case C-206/01); Anheuser-Busch Inc. v. Budejovicky Budvar NP [2005] ETMR 27 (Case C-245/02); ITC Ltd. v. Philip Morris Products SA and others (2010) 42 PTC 572; Kerly's Law of Trade Marks and Trade Names (14th ed., 2005); Daimler Chrysler AG v. Alavi [2001] RPC 42; Intel Corporation v. CPM United Kingdom Ltd. [2009] ETMR 13; Intel Corporation Inc. v. CPM United Kingdom Ltd. [2007] EWCA Civ 431 and Raymond Ltd. v. Raymond Pharmaceuticals (Pvt.) Ltd. (2010) 112 Bom. LR 2945 ref.

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

---Ss. 40 & 92---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2 ---Suit for Infringement of trade mark or trade name--Interim injunction, grant of--Matters essential to be considered by court stated.

When the court is considering the question of interim relief, it has to go by the material placed on the record, and the matter is in the realm of prima facie case and the other ingredients required for such relief. The probative value of the material so placed and considered, and the use to which it is put by court, is obviously different from the stage when evidence is eventually produced at the trial. Nonetheless, there must be something specific and concrete placed on the record to which the prescribed tests and factors can be applied. Bare assertions and mere allegations (general speculation about harm) will not be sufficient.

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

---S. 42---Defence under S.42 of Trade Marks Ordinance, 2001---Essential conditions to be fulfilled stated.

The defence under section 42, Trade Marks Ordinance, 2001 is available if these conditions are fulfilled: (a) the person must use his name (or the name of his place of business) in good faith; and (b) such use must not result in either a likelihood of confusion, or otherwise interfere with (i) an existing trade mark, or (ii) other property right.

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

----S. 37(2) ---Compliance with provision of S.37(2) of Companies Ordinance, 1984)---Power to ensure such compliance vested in Securities and Exchange Commission of Pakistan and its subordinate officers.

(g) Interpretation of statutes---

----Definition clause of a statute using word "means" and/or "includes"---Scope stated.

Definition clauses usually use either the word "means" or the word "includes". When the former is used, the definition is exhaustive and is confined to what is stated in the statute. When the latter is used, the definition is expensive; the word bears not merely its ordinary dictionary meaning, but also carries the extended meaning given in the statute. If the definition clause use both "means" and "includes", the definition is exhaustive as to what follows the word "means", but this exhaustive definition also incorporates what follows the word "includes".

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

----Ss. 2(xliv), 40(5) & 92---Companies Ordinance (XLVI of 1984), Ss. 16, 17, 18 & 143---Partnership Act (IX of 1832), S.4---Protection provided to trade name under S. 92 of Trade Marks Ordinance, 2001---Applicability of such protection to name of a company and firm---Scope stated with illustrations.

The term "trade names" defined in section 2(xliv) of the Trade Marks Ordinance, 2001 is exhaustive; it means the names "used" by a person to "denote" his "trade or calling". This exhaustive definition also incorporates, in the case of companies and firms, the names thereof. The intent behind including company and firm names is not difficult to discern. The (exhaustive) definition requires that the person "use" the name for the stated purpose (i.e. to denote his trade or calling). But the name of a company or firm is simply part of its identity. In the case of a company, it is required to be stated in its memorandum of association (sections 16-18 of the Companies Ordinance, 1984) and in the case of a firm, it is designated as the "firm name" (section 4 of the Partnership Act, 1932). To this extent, the name is not "used" in any sense. However, a company or firm name is many times (though of course, not always) descriptive of what the company or firm does, i.e., it may denote the entity's trade or calling. If it does so, then (but only then) it is included in the definition of a "trade name" within the meaning of section 2(xliv).

A few examples will perhaps help illustrate the point. Suppose a company is registered with the name of "ABC Textile Mills Ltd.". This is of course, its name, part of its identity. But it also tells us something about the company's business. It is, therefore a "trade name" within the meaning of section 2(xliv). But supposing that company's name were only "ABC Ltd." This is just a name. It tells us nothing about the company's business. It could be in the textile trade, the sugar business, part of the cement industry or engaged in some altogether different field of activity. The name does not denote the company's trade. It is, therefore, not a "trade name" within the meaning of section 2(xliv). The same rules would of course apply in the case of firm names. One point should, however, be kept in mind it may be that a company (say "ABC Ltd.") builds up its business over time so that its name comes to be associated with its trade. This does not make the name a "trade name" within the meaning of section 2(xliv). That definition is exhaustive. It requires that the name itself be used to denote (i.e. to indicate or to signify) the entity's trade or calling. If the name does not so denote, then any association that may develop with it or its use over time does not convert it into a "trade name".

The trade name enjoys the protection expressly granted to by the Trade Marks Ordinance, 2001. For example, section 68 thereof protects a trade name against misleading and comparative advertisement. This section also confers protection in its own terms. This protection is to the extent to which the name denotes the person's trade or calling. If any other entity wishes to use the trade name or material part thereof, it can do so if and to the extent that its use does not denote the prior user's trade or calling.

For example, suppose a company is registered under the name "Soneri House Mortgages Co. Ltd." or under the name "Soneri Financial Services Ltd." or under the name "Soneri Forex Ltd.". In each of these cases, it may be that the subsequent user has encroached upon the prior user's protected field. The reason is that granting mortgages, providing financial services or engaging in foreign exchange trade is what banks does; it is part of their trade or business. Each case would have to be examined on its own merits and in the context of its own facts and circumstances. There could, for example, be situations of overlap. Each trade, or business can be regarded as having a core area or areas of activity surrounded by a penumbra of ancillary or adjunctive activities. It may be that the core activity of the subsequent user's trade (as denoted by its trade name) is merely an ancillary or adjunctive activity of the prior user's trade (again as denoted by its trade name). In such a situation, the court may well conclude that the prior user's rights under section 92, Trade Marks Ordinance, 2001 have not been infringed. In other words, the extent to which a trade is denoted (or should be regarded as being denoted) by a trade name is a matter of degree. There may well be a gradient of activities and not necessarily sharply defined boundaries. Furthermore, no trade or business is static. Real life business is a dynamic activity. What is a core business activity today may become an ancillary function tomorrow and vice versa. These sorts of issues would have to be resolved on a case-by-case basis. If, however, the subsequent user's name denotes some other trade or calling, then it does not encroach on the protected field, and such use is not within the scope of section 92.

The name of a company registered under the Companies Ordinance, 1984 may infringe a proprietor's rights in respect of his registered trade mark under section 40(5) of Trade Marks Ordinance, 2001 or may be violative of the protection granted to a trade name under section 92 thereof. The manner in which a company is required to use and publicize its name is given in section 143 of Companies Ordinance, 1984, which is a mandatory provision, and a company is liable to penal consequences, if it fails to comply with its terms.

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

----Ss. 40(5) & 92---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Companies Ordinance (XLVI of 1984), S.143---Suit for infringement of trade mark or trade name of a company--Temporary injunction, grant of---Principles stated.

Even if a plaintiff is able to make out a cause (especially at the interim stage) against a company's name either under section 40(5) or section 92 of the Trade Marks Ordinance, 2001 the court must carefully consider whether an injunction ought to be granted and if so, on what terms. The reason is that to prohibit a company from using its name is essentially to shut down the company. Interim relief in such case should be granted with great care and caution and only where a clear case of infringement of the plaintiffs right is made out. Even if the suit is being finally decred in favour of the plaintiff, care should be taken to give the company a reasonable opportunity to change its name in accordance with the provisions of the Companies Ordinance, 1984s.

Munir Ahmed Khan for Appellant.

Khurram Ghori and Ms. Shazia Tasleem for Respondent.

2011 C L D 226

[Karachi]

Before Irfan Saadat Khan, J

KARIM KAROBAR COMPANY and 2 others---Plaintiffs

Versus

BANK OF KHYBER and another---Defendants

Suit Nos.B-88 and B-97 of 2001, decided on 23rd October, 2010.

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

--S. 9---State Bank of Pakistan Foreign Exchange Circular No.77---Recovery of money---Negligence of bank---Plaintiff­ company opened Letter of Credit through defendant-bank and after import of goods, bank charged an additional money on the ground that bank did not obtain prior permission for establishing Cost and Freight Free Out Letter of Credit--Plea raised by plaintiff was that differential amount was to be paid due to negligence of bank officials---Validity---Bank was under legal obligation to know all laws in respect thereof and to follow them strictly---Bank admitted in its various communications that it had failed to obtain prior permission as envisaged under the law and had termed the same either to be through inadvertence or due to rush of work-Bank even accepted that no such mistake would be made by them in future and also admitted that legal formalities before opening disputed Letter of Credit were not fulfilled--Bank further admitted that error committed by it was due to inadvertence and rush of work---Such mistake of not obtaining prior permission from State Bank of Pakistan was on the shoulders of bank which it could not shift/transfer to plaintiff, who could not be penalized for no fault of theirs---If bank had committed some mistake by violating certain law and regulation, it should be the bank who would be suffering the agony of that mistake---Shifting of burden upon plaintiff would be illegal as the bank was negligent in performance of its obligations and it could not be pleaded by bank that amount recovered from it by State Bank of Pakistan would have to be borne by plaintiff---Bank was under obligation/duty to look after the interest of its clients to the best of its ability and not to penalize the clients for no fault of their as the bank had charged substantial amount in such regard from plaintiff for providing required services--Default of bank was apparent, it was inequitable to allow them to get benefit of their own wrong against plaintiff as nobody could be allowed to get benefit of their own misdeed/negligence---High Court decreed the suit in favour of plaintiff and against defendant---Suit was decreed accordingly.

1986 CLC 222; Ch. Muhammad Yousuf v. United Bank Ltd. 2004 CLC 1507 and Lahore High Court in Government of Pakistan v. Messrs Al-Farooq Roller Mills Ltd. 2000 MLD 1130 ref.

Abul Inam for Plaintiffs (in Suit No.B-88 of 2001).

Ms. Huma Sadiq for Defendant No.1 (in Suit No.B-88 of 2001).

None for Defendant No.2 (in Suit No.B-88 of 2001). Ms. Huma Sadiq for Plaintiff (in Suit No.B-97 of 2001). Abul Inam for Defendants (in Suit No.B-97 of 2001). Date of hearing: 1st October, 2010.

2011 C L D 243

[Karachi]

Before Muhammad Tasnim, J

NIB BANK LTD.---Plaintiff

Versus

MUHAMMAD YASIR and another---Defendants

Suit No. B-111 of 2010, decided on 1st November, 2010.

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

----Ss.2(c), 9 & 10(3}--Recovery of bank loan---Muccaddam (custodian), suit against---Pledged stocks were illegally removed by borrower, which were under the custody of Muccaddam---According to agreement between parties, Muccaddam was responsible for all losses, theft, damages, pilferage, demand, expenses, charges, rents, actions and suits etc. which the bank would suffer due to shortage or loss and destruct of the goods for any reason---Bank filed suit against borrower as well as Muccaddam for recovery of bank loan---Validity---Pledged goods were delivered to Muccaddam, which were under its exclusive control under lock and key---In confirmation thereof, Muccaddam along with borrower, had executed stock reports of pledged goods which were removed, the same had caused loss to the bank and Muccaddam did not indemnify the bank---No substantial question of law and facts were raised in respect of which any evidence was to be recorded.---Suit was decreed in favour of bank and against Muccaddam to the extent of value of pledged goods along with costs of funds from the date of default till realization---Suit was decreed accordingly.

Bank of Khyber v. Messrs Spencer Distribution Ltd. and 14 others 2003 CLD 1406; Zeeshan Energy Ltd. and 2 others v. Faisal Bank Ltd. 2004 CLD 1741; Muhammad Ramzan and 4 others v. Agricultural Development Bank of Pakistan through Manager 2004 CLD 1376: Habib Bank Limited v. Messrs Sabcos (Pvt.) 2006 CLD 244; Muhammad Farooq M. Memon Advocate v. Government of Sindh through its Chief Secretary, Karachi 1986 CLC 1408; Muhammad Akhtar v. Mst. Manna and 3 others 2001 SCMR 1700; Daulat Ali through Legal I-Ieirs and 2 others v. Ahmad through Legal heirs and 2 others PLD 2000 SC 792; Salcem Akhtar v. Nisar Ahmad PLD 2000 Lah. 385 and Mst. Baswar Sultan v. Mst. Adeeba Alvi 2002 SCMR 326 ref.

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

----S.10(3)---Leave to defend the suit---Application, form of---Application was not in the form of written statement, nor any substantial question of law or facts was raised, which required evidence---Application was dismissed in circumstances.

Syed Mamnoon Hasan for Plaintiff.

Raza Hashmi for Defendant No.2.

2011 C L D 262

[Karachi]

Before Muhammad Tasnim, J

MUZAFFAR H. SUFI---Plaintiff

Versus

Messrs FIRST WOMEN BANK LIMITED and 2 others---Defendants

Suit No.53 of 2009, decided on 10th November, 2010.

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

----Ss. 7(2) & 9(1) --Civil Procedure Code (V of 1908), O.I, R.10 & O.II, R.6---Suit against Bank by customer---Necessary parties---Plea of the defendants (employees of Bank) that they had been added unnecessarily in the proceedings as they could not be joined as defendants in Banking suit and that they be deleted from the array of defendants and matter might be proceeded against the Banking Company/Financial Institution---Plaint(ff asserted that there was no bar of joinder of other parties apart from the Financial Institution and the customer---Validity---Suit had been filed under Financial Institutions (Recovery of Finances) Ordinance, 2001, which provided a procedure under S.9 of the Ordinance--Provisions of Civil Procedure Code, 1908 were applicable in Banking suit where Ordinance was silent---Section 9 of the Ordinance provided procedure and joinder of defendants was in violation of provision of S.9(1) of the Ordinance, presence of defendants/employees of the Bank, in the proceedings was unnecessary---High Court directed office to delete the names of defendants from the array of defendants with RED INK.

Emadul Hassan for Plaintiff.

Jam Asif Mehmood for Defendants 1 and 2.

Naheed A. Shahid for Defendant No.3.

2011 CLD 265

[Karachi]

Before Muhammad Ali Mazhar, J

MEEZAN BANK LIMITED---Plaintiff

Versus

DEWAN SALMAN FIBRES LIMITED---Defendant

Suit No.166 of 2009 and C.M.As. Nos.1393, 10552 and 10553 of 2010, decided on 15th October, 2010.

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

----Ss. 9 & 10--Suit for recovery of loan---Application for leave to defend suit---Defendant in his application for leave to defend suit had admitted the liability in the sum of Rs.165,257,526.95---Counsel for plaintiff bank submitted that he would be satisfied, if interim decree was passed for the said admitted amount of liability--counsel for the defendant had also no objection for passing interim decree for said admitted amount and had further prayed that his application for leave to defend be allowed---By consent of the counsel, application for leave to defend was allowed and same was converted into written statement---On request of both counsel of the parties, Court appointed a Charted Accountant as Commissioner to resolve the controversy.

Jam Asif Mehmood along with Saim Hashmi for Plaintiff.

M. Saleem Thepdawala for Defendant.

2011 C L D 267

[Karachi]

Before Maqbool Baqar, J

KASB BANK LIMITED---Plaintiff

Versus

DEWAN SALMAN FIBRE LIMITED---Defendant

Suit No.B-173 of 2009 and C.M.A. No.1501 of 2010, decided on 30th September, 2010.

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

----Ss. 9 & 10---Suit for recovery of loan---Application for leave to defend the suit---Counsel for defendant requested for an adjournment contending that in view of Constitutional (18th Amendment) Act, the question would arise as to whether the procedure provided under the Financial Institutions (Recovery of Finances) Ordinance, 2001 was in consonance with the concept of fair trial and due process as enunciated through the said amendment---Said amendment was under consideration by a Division Bench of the High Court and constitutional petition was being heard on day to day basis---Counsel for the defendant, requested that the hearing in the case could be adjourned till such time the Division Bench decided as to whether the procedure of the present proceedings would meet said criteria or not---Defendant in his application for leave to defend suit had admitted its liability towards the plaintiff Bank in the sum of Rs.406,436,00---Counsel for the plaintiff had submitted that interim decree to the extent of said amount be granted---Interim decree in favour of the plaintiff bank for payment of said amount by the defendant to the plaintiff was granted---Hearing in respect of leave to defend application for the remaining amount, was adjourned, in circumstances.

Saim Hashmi and Jam Asif Mehmood for Plaintiff.

Salim Thepdawala for Defendant.

2011 CLD 269

[Karachi]

Before Mushir Alam and Aqeel Ahmed Abbasi, JJ

IMRAN ALI SOOMRO---Appellant

Versus

SAUDI PAK LEASING COMPANY LIMITED---Respondent

First Appeal No.14 of 2009, decided on 30th September, 2010.

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

----Ss. 9, 10 & 22---Application for leave to defend suit---Security for finance to the principal borrower---Plea of fraud---Appellant (guarantor) had offered security at the time of signing of loan documents---Bank filed suit for recovery of loan amount of Rs.32,326,937 and after dismissal of application for leave to defend the suit, Banking Court decreed the suit against all defendants jointly and severally to the extent of Rs.1,799,723 with future cost of fund---Plea raised by appellant (guarantor) was that he had been made victim as he was induced to create mortgage by fraud and misrepresentation and the said mortgage was created only for the purpose of regulatory requirements without risking his property---Validity---Loan documents showed that the mortgage was created to offer mortgaged property as a security for repayment of liability under the finance and other supplemental agreements---Appellant did not dispute creation of equitable and registered mortgage which unequivocally acknowledged that mortgage had been created in consideration of finance produced or promised by the principal borrower---Appellant could not be allowed to plead any condition extraneous to written terms and agreement between the parties---Appellant might have a remedy against the principal borrower for damages and even otherwise, appellant being surety for the liability of the principal borrower, could proceed against the principal borrower or security lying with the Bank---High Court dismissed the appeal having no merits.

Zakas (Pvt.) Limited v. The Bank Alfalah Limited 2004 CLD 1660; Union Bank of India v. Manku Narayana AIR 1987 SC 1078; Haji Fazal Elahi &.Sons v. Bank of Punjab 2004 CLD 162 and Marianne Khan versus National Bank of Pakistan 2006 CLD 232 ref.

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

----Ss. 9, 10 & 22---Contract Act (IX of 1872), S.145---Bank loan---Promise to indemnify surety--Mortgagor by executing a mortgage, committed to the mortgagee/creditor that on failure of the borrower/debtor to clear the liability same be set off against the mortgaged property---All engagement to guarantee for repayment of debt implied a promise on the part of principal borrower to indemnify mortgagor/ guarantor whose mortgaged/charged property was liquidated to satisfy a debt for which the mortgage/charge was created.

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

----Ss. 9, 10 & 22---Contract Act (IX of 1872), S.141---Bank loan---Surety's right to benefit of creditor's securities---Scope---Surety was entitled to the benefit of all security of the debtor held by the creditor.

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

----Ss. 9, 10 & 22---Contract Act (IX of 1872), S.128---Bank loan---Surety's liability---Liability of surety was co-extensive with that of principal borrower, all the sureties stood side ­by-side and were on equal footing, it gave an option to the creditor to proceed against the securities and on charged property in sequel creditor in its option considered most expedient or less cumbersome to proceed against, unless of course parties to the contract of surety/guarantee/ mortgage stipulated otherwise---Agreement of surety, guarantor mortgagor of a debt could be subject to contingency or limitation to proceed after exhausting remedy against the principal sequence as might be contemplated in such agreement.

(e) Financial Institutions (Recovery of Finances) Ordinance (XL VI of 2001)---

----Ss. 9, 10 & 22---Contract Act (IX of 1872), 8.127---Bank loan---Consideration of guarantee---Plea of the judgment-debtor (guarantor) was that he was neither Director nor beneficiary of the finance availed by principal debtor; therefore he was not liable---Validity---One need not be director, partner and officer or in any manner beneficiary of finance extended to the borrower/debtor---Commitment or promise of creditor to extend finance to the borrower was sufficient consideration for standing guarantor, mortgagor or surety---No law provided that guarantor, and surety or mortgagor should invariably be directed or personal beneficiary for the credit line extended by the creditor to the borrower.

Imad-ul-Hasan for Appellant.

Mrs. Samia Faiz Durrani for Respondent No.1.

Date of hearing: 16th August, 2010.

2011 C L D 275

[Karachi]

Before Ms. Rukhsana Ahmed, J

S.A.H. ENTERPRISES Inc.---Plaintiff

Versus

EXPORT PROCESSING ZONES AUTHORITY through Secretary---Defendant

Suit No.1057 and C.M.A. No.10957 of 2010, decided on 10th November, 2010.

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

----S. 2-Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Interim injunction, grant of--Restraining order---Plaint(ff was an industrial undertaking and sought restraining order against authorities with regard to his exporting poly-bags made from Polyethylene Vinyl Acetate (P.E.V.A.) sheets into "Tara f Area" and to foreign country---Validity---Environmental Protection Agency after inspection observed that there was no health hazards noted inside the factory during its visit---Environmental Consultants conducted Environmental Audit, read ambient air quality and environmental Management Plan of factory and a certificate was issued giving clearance in favour of plaintiff--Plaintiff did not commit any irregularity in manufacture / production of bio-degradable poly bags for utilizing the same in packing of its products by maintaining and remaining within the eco friendly system as recommended / provided under the law---High Court restrained the authorities from interfering in the right of plaintiff to export, poly-bags made from Polyethylene Vinyl Acetate (P.E.V.A) sheets into the "Tariff area" and to foreign country---Application was allowed in circumstances.

Umer Soomro for Plaintiff.

Khawaja Naveed Ahmed for Defendant.

2011 CLD 285

[Karachi]

Before Munib Akhtar and Muhammad Athar Saeed, JJ

Messrs TEAM NAYYER (PVT.) LIMITED through Authorized Attorney---Appellant

Versus

SUI SOUTHERN GAS COMPANY LIMITED and another---Respondents

H.C.A. No.297 and C.M.A. No.1340 of 2006, decided on 4th October, 2010.

(a) Registered Designs Ordinance (XLV of 2000)---

----S. 8, proviso---Infringement---Interim relief, grant of---Principle---Grant of interim relief requires plaintiff to establish (at least) three things: a prima fade case; validity of his design and its infringement by defendant.

(b) Registered Designs Ordinance (XLV of 2000)---

----S. 2 (a) & (e)---Terms "article" and "design"---Distinction---Design is separate and distinct from article to which it is tipplied and it is the former that can be registered and not the latter---In determining whether a design has been infringed or whether it is valid, the first exercise that must be carried out is to determine what is the "article" in question and what are the "features" of shape, configuration, pattern or ornament that are being "applied" to the article.

Dover Ltd. v Nurnberger Celluloidwaren (1910) 27 RPC 498; Bharat Glass Tube Ltd. v. Gopal Glass Works Ltd. AIR 2008 SC 2520; Intellectual Property Law by Lionel Bently and Brad Sherman (2001), pg. 581; Gramophone Co. Ltd. v. Magazine Holder Co. (1910) 27 RPC 151; Amp Inc. v. Utilux Pvt. Ltd. (1972) RPC 103 and Interlego AG v. Tyco Industries Inc. (1988) RPC 343 ref.

(c) Registered Designs Ordinance (XLV of 2000)---

----Ss. 2(a), (d), (e), 6 & 8(1) proviso---Civil Procedure (Amendment) Ordinance (X of 1980), S.15---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2--High Court appeal---Interim injunction and damages---Registered design, infringement of---Plaintiff claimed that defendant had infringed his design which was registered in his name---Single Judge of High Court declined to grant interim relief on the ground that plaintiff had also claimed damages against defendant---Validity---Registered designed was infringed if it, or a design not substantially different from it, was applied to an article without permission of the registered proprietor and the article was made, imported, sold, hired or offered for sale, thus test was one of "substantial difference"---If allegedly infringing article carried a design that was substantially different from the registered design, then there was no infringement and if there was no substantial difference, then the registered design had been infringed---Article in question was a canopy, which was fairly a large sized item and was mounted on a fiat board or pickup truck---In most instances, the canopies would, therefore, be seen from a certain distance when vehicle moved around the city---When two canopies were examined by Division Bench of High Court, the immediate impression was that of similarity and not that of dissimilarity, thus disputed design was prima facie not substantially different from the first design, therefore, on such basis, there had been infringement of the latter---Registered proprietor was allowed under section 8(1) of Registered Designs Ordinance, 2000, to bring a suit both for damages and for an injunction against continuation of infringement and the proviso expressly recognized that an interim injunction could be granted in appropriate circumstances--Fact that defendants might be liable to plaintiff for damages could not in and of itself disentitled the latter from obtaining injunctive relief---Order passed by Single Judge was set aside and interim relief was granted to plaint---Appeal was allowed accordingly.

Team Nayyer (Pvt.) Ltd. v. Tariq Ahmed Sultani 2008 CLD 94; Team Nayyer (Pvt.) Ltd. v. Kamran Jamul Khan 2008 CLD 227: Mere & Co. v. Hilton Pharma (Pvt.) Ltd. 2003 CLD 407; Valor Heating Company Ltd. v. Main Gas Appliances Ltd. (1972) FSR 497; Mehran Plastic Industries (Pvt.) Ltd. v. Registrar of Designs and others 2006 CLD 546: Wall Oil Mills Ltd. v. Faisalabad Oil Refinery (Pvt.) Ltd. 2004 CLD 1198; Universal Brushwares (Pvt.) Ltd. v. Syed Industries and others 1991 CLC 382; Maniar Industries Ltd. v. Mobin Plastic Industries 1987 CLC 135; Haji Sayed Sikander Shah v. Mian Bahim Bakhsh AIR 1940 Pesh. 38; Dover Ltd. v Nurnberger Celluloidwaren (1910) 27 RPC 498; Bharat Glass Tube Ltd. v. Gopal Glass Works Ltd. AIR 2008 SC 2520; Intellectual Property Law by Lionel Bently and Brad Sherman (2001), pg. 581); Gramophone Co. Ltd. v. Magazine Holder Co. (1910) 27 RPC 151; Amp Inc. v. Utilux (Pvt.) Ltd. (1972) RPC 103; Interlego AG v. Tyco Industries Inc. (1988) RPC 343 and Dunlop Rubber Co. Ltd. v. Golf Ball Developments Ltd. (1931) 48 RPC 268 ref.

Haider Waheed for Appellant.

Asim Iqbal for Respondent No.1.

Nemo for Respondent No.2.

2011 CLD 341

[Karachi]

Before Ms. Rukhsana Ahmed, J

NELOFAR SAQIB---Plaintiff

Versus

SAIBAN BUILDERS AND DEVELOPERS and others---Defendants

Suit No.918 of 2008, C.MA. No.8982 of 2008 and C.M.A. No.8860 of 2009, decided on 19th August, 2010.

Partnership Act (IX of 1932)---

----Ss. 39 & 48---Arbitration Act (X of 1940), S.34---Specific Relief Act (I of 1877), Ss.44 & 54---Suit for dissolution of partnership, rendition of accounts, appointment of receiver and injunction---Referring the matter to arbitrator---Pending suit filed by the plaintiff, defendants filed applications under S.34 of Arbitration Act, 1940 for a direction to the plaintiff to approach relevant Arbitration Forum in accordance with one of the clauses of partnership deed---Plaintiff had alleged commission of fraud by the defendants--Where allegations of fraud were levelled by one party against another; and if the same appeared to be substantial, weighty and bona fide allegations, then case should be tried in court rather than to remit the same to arbitrator for a decision---In the present case plaintiff having levelled allegations of fraud on the part of the defendants, same should only be decided by the court of law instead of being referred to arbitration proceedings.

PLD 2006 SC 196 ref.

Waqar Muhammad Khan Lodhi for Plaintiff.

Wajid Wyne for Defendant No.2.

Zahid Marghoob for Defendant No.3.

2011 C L D 350

[Karachi]

Before Munib Akhtar and Muhammad Athar Saeed, JJ

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

Versus

Master AGHA JAN AHMED and another---Respondents

H.C.A. No.192 of 2007, decided on 25th November, 2010.

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

----Art. 57---Previous judgment---Relevancy---Conviction in criminal trial---Effect---Previous judgment, order or decree is irrelevant unless either (i) existence of such judgment, order or decree is itself a fact in issue, or (ii) judgment, order or decree is relevant under some other provision of qanun-e-Shahadat, 1984---Judgment and conviction in a criminal case is not even relevant in another or subsequent criminal trial.

Ghulam Rasool v. Muhammad Waris Bismil 1995 SCMR 500; Khushi Muhammad v The State PLD 1986 SC 146 and Richard Benjamin Wheeler Haines v. Ismail and others 1980 PCr.LJ 1172 rel.

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

----Ss. 174 & 176---Suicide---Inquiry by police---Object, purpose and scope-- Purpose of investigation under section 174, Cr.P.C. or inquiry under section 176, Cr.P.C. is only to ensure that no offence has been committed in connection with death of a person---Such investigation or inquiry is not to establish that suicide has occurred.

(c) Insurance Ordinance (XXXIX of 2000)---

----S. 118---Criminal Procedure Code (V of 1898), S.176---Qanun-e-Shahadat (10 of 1984), Arts. 57, 117 & 120---Insurance policy, recovery of--Claim of liquidated damages---Suicide of assured---Onus to prove---Predecessor­-in-interest of plaintiff was assured with defendant company and the company declined to pay insurance amount on the ground that death of assured was result of suicide--- Defendant based its decision on report of Magistrate prepared under section 176 Cr.P.C.---Validity---Not merely was Magistrate's report itself inadmissible and irrelevant for the purposes of suit but whatever was recorded therein as statements of persons who appeared before Magistrate, was also inadmissible since those persons did not appear in suit as witnesses and their statements had not been subjected to cross-examination--Defendant failed to discharge onus that lay on it with regard to proving that assured committed suicide---Defendant could not lawfully invoke exclusion clause against plaintiffs and hence it was liable to latter in terms of two policies to full extent, thereof---Terms of contract could not be varied subsequently by statute unless relevant statutory provisions specifically so provided---Provisions of section 118 of Insurance Ordinance, 2000, and the term implied by law as provided therein, did not apply to contracts of insurance already entered into prior to coming in force of Insurance Ordinance, 2000---Claim of liquidated damages in terms of section 118 of Insurance Ordinance, 2000, could not be sustained---Appeal was dismissed in circumstances.

Master Agha Jan Ahmed and another v. American Life Insurance Company (Pakistan) Limited 2007 CLC 1237; Beresford v. Royal Insurance Company Ltd. [1938] 2 All ER 602; Scottish Union and National Insurance Co. v. N. Roushan Jehan Begum AIR 1945 Oudh 152; Trustees Executors Limited v QBE Insurance (International) Limited [2009) NZHC 1403; Progressive Homes Ltd. v. Lombard General Insurance Company of Canada 2010 SCC 33; Analog Devices BV and others v. Zurich Insurance Company and another [2005) IESC 12; General Principles of Insurance Law (6th ed., 1993) by E.R. Hardy Ivamy ad Foremost Trading Company v. Caledonian Insurance Company Ltd. and others PLD 1988 Kar. 131 ref.

(d) Evidence---

---Expert evidence---Principle--Expert can only give evidence in respect of foreign law---There is and cannot be any "expert" on Pakistan law insofar as courts of Pakistan are concerned, it is the court itself that is the expert.

Masjid Shahid Ganj and others v. Shiromani Gurdwara Parbandhak Committee and another AIR 1940 PC 116 and Aziz Banu v. Muhammad Ibrahim Husain AIR 1925 All 720 rel.

Khalid Rahman for Appellant.

Habibur Rahman and A. Qadir Khan for Respondents.

Date of hearing: 4th November, 2010.

2011 C L D 373

[Karachi]

Before Sarmad Jalal Osmany, C.J. Mushir Alam and Faisal Arab, JJ

MUHAMMAD SHAFI and others---Applicants

Versus

HABIB BANK LTD. and others---Respondents

Civil Transfer Applications Nos.2, 3, 11 and 22 of 2010, decided on 8th October, 2010.

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

----Ss. 5(1) & (3)---Civil Procedure Code (V of 1908), S.24---Transfer of case---Principle---Term "Banking Court"---Scope---Financial Institution filed suit against defendants before Banking Court and defendants sought transfer of the same to High Court on the ground that already another suit filed by defendants was pending against the bank in High Court---Validity---Term "Banking Court" appearing in the end of section 5(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was referable to both the categories of Banking Courts---High Court was fully empowered to withdraw a suit from any Banking Court established by Federal Government under section 5(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, for its trial before its own Banking jurisdiction and vice versa---Such power of transferring cases was analogous to the power of High Court that was contained in section 24, C.P.C. by virtue of which High Court could also withdraw any case pending in any court subordinate to it and try or dispose of the same itself---Transfer of suit for its trial with other suit should not be allowed where customer's application for leave to defend the suit had already been dismissed---Where leave to defend was granted in a suit filed by a financial institution and recording of evidence had yet not started or was at an initial stage, High Court might allow transfer of suit from one Banking Court to another or to its own banking jurisdiction for trial but not where customer's leave to defend application was still pending adjudication in a suit filed by financial institution---High Court should not mechanically exercise its power of transfer under section 5(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, but should allow Banking Court to first dispose of leave to defend application--Mere seeking transfer on the ground preventing conflicting judgments was not enough in ordering transfer of banking cases---High Court was fully empowered to withdraw a banking case pending in a Banking Court for its trial before its own Bench hearing banking case but while considering such transfer application, High Court must ensure that every purpose for which expeditious mechanism for disposal of recovery suits devised under banking laws, was not defeated---Order 'was passed accordingly.

First Women Bank Ltd. v. Registrar of High Court 2004 SCMR 108 rel.

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

----S. 9(4)---Civil Procedure Code (V of 1908), S.10---Res sub judice, principle of---Applicability---Stay of proceedings---provision of section 10, C.P.C. have been made inapplicable to banking suits under section 9(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, which enables Banking Court to proceed with trial of suit filed by financial institution irrespective of the fact that customer has already filed a suit for settlement of account or damages against financial institution subsequent to the suit filed by its customer---Subsequent suit filed by financial institution continues to proceed and is not liable to be stayed on the basis of conditions laid down in section 10, C.P.C.

(c) Precedent---

----Precedents remain binding only when elucidation that they provide does not come into conflict with any statutory provision.

Abdul Rehman v. Mst. Chaman Ara PLD 1972 Kar. 164 rel.

Nawab Mirza for Applicant (in Civil Transfer Application No.11 of 2010).

Aijaz Ahmed for Respondent (in Civil Transfer Application Nos.2 of 2010 and 11 of 2010).

Kazim Hasan for Applicant (in Civil Transfer Application Nos.2 of 2010 and 3 of 2010).

Saalim Salam Ansari for Applicant and Khalid Mehmood Siddiqi for Respondent (in Civil Transfer Application No.22 of 2010).

Ghulam Murtaza for Respondent (in Civil Transfer Application No.22 of 2010).

2011 C L D 393

[Karachi]

Before Muhammad Tasnim, J

ALLIED BANK LIMITED---Plaintiff

Versus

MUSLIM CO1TON MILLS PRIVATE LIMITED and 3 others---Defendants

Suit No.89 of 2009, decided on 15th November, 2010.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), 0.XXIX, R.1---Suit for recovery of Bank loan-Plaint signed by two attorneys of Bank authorized by its President through Power of Attorney notarized in accordance with law---Such Power of Attorney fulfilled requirements of S.9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was validly instituted and maintainable.

Banque Indosuez v. Jet Travels Limited and others 1991 CLC 446; National Bank of Pakistan v. Muhammad Ashraf Sanik PLD 1987 Lah. 17 and Khyam Films and another v. Bank of Bahawalpur Ltd. 1982 CLC 1275 rel.

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

----Ss. 9 & 10---Bankers' Books Evidence Act (XVIII of 1891), Ss.2(8) & 4---Suit for recovery of Bank loan---Leave to defend suit, application for---Defendant's plea was that statement of accounts contained unjust entries without showing details thereof---Validity---Defendant in support of his plea had not pointed out any specific entry in such statement---Such statement lying on record contained all transactions of defendant's account and was certified and dated by competent officer in accordance with provisions of Bankers' Books Evidence Act, 1891---High Court repelled defendant's plea for being vague.

Bank of Punjab v. Mrs. Mah Tallat Sultan and another 2006 CLD 773; National Bank of Pakistan and others v. National Battery Industries and others 1994 CLC 2133 and Messrs Saudi Pak Commercial Bank Limited v. Messrs Marvi Agrochem (Private) Ltd. and others 2007 CLD 1374 distguished.

National Bank of Pakistan v. Messrs Mujahid Nawaz Cotton Ginners and others 2007 CLD 678 rel.

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

----Ss. 9 & 10---Suit for recovery of Bank loan---Leave to defend suit, application for---Leave application showing non fulfilment of requirements of S.10(314) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendant's admission to have availed amount of finance mentioned in plaint and executed documents in favour of Bank to secure its repayment---Effect--Defendant had failed to show any sufficient cause for his inability to comply with such requirements---Defendant had failed to discharge his obligation under finance agreement---Defendant had failed to make out any substantial question of law and fact requiring leading of evidence by parties---High Court dismissed leave application and decreed suit as prayed for.

United Bank Limited v. Messrs Ilyas Enterprises and others 20.04 CLD 1338; Industrial Development Bank of Pakistan, Karachi v. Messrs Zamco (Pvt.) Ltd. and others 2007 CLD 217; Shahid Farooq Sheikh v. Allied Bank of Pakistan Limited 2005 CLD 1489; Zeeshan Energy Ltd. and others v. Faisal Bank Ltd. 2004 CLD 1741; U.B.L. v. Messrs Sindh Tech. Industries Ltd. and others 1998 CLD 1152 and Messrs Malik & Company and others v. Muslim Commercial Bank and others 2002 CLD 1621 ref.

National Bank of Pakistan v. Messrs Mujahid- Nawaz Cotton Ginners and others 2007 CLD 678; Bank of Punjab v. Mrs. Mah Tallat Sultan and another 2006 CLD 773 and National Bank of Pakistan and others v. National Battery Industries and others 1994 CLC 2133 distguished.

National Bank of Pakistan v. Messrs A.I. Brothers (Private) Limited and others 2007 CLD 1356; Bank of Khyber v. Messrs Spencer Distribution Ltd. and others 2003 CLD 1406 and Habib Bank Limited v. Messrs Sabcos (Pvt.) Ltd. 2006 CLD 244 rel.

Jam Asif Mehmood and Qutab-ud-Din Salim for Plaintiff.

Abid Hussain for Defendants.

2011 C L D 408

[Karachi]

Before Muhammad Ali Mazhar, J

SONERI BANK LIMITED---Plaintiff

Versus

CLASSIC DENIM MILLS (PVT.) LIMITED and 3 others---Defendants

Suit No.B-71 of 2008, decided on 30th November, 2010.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), O. VI, Rr.14, 15 & O.XXIX, R.1---Suit for recovery of Bank Loan---Plaint not signed by any of two attorneys of Bank, but signed by its counsel and verified on oath by its one attorney---Leave to defend suit, application for---Defendant's plea that plaint on account of its non-signing by both the attorneys was defective and liable to be rejected---Validity---Plaint found mention that Bank had duly appointed both attorneys through annexed Power of Attorney to act jointly on its behalf---Plaint did not find mention that one of such attorneys was Branch Manager of Bank---Plaint was required to have been signed by both attorneys of Bank---Plaint for not having been signed by a person on behalf of Bank suffered from technical defect and lacuna in form of suit---Signing, verification and drafting of plaint in a particular manner were matters of mere procedure, thus, provisions relating thereto could not be construed strictly---Non-signing or non-verification of plaint could not make same a nullity---Bank could not be non-suited on such ground alone for same being irregularity and technical defect curable at any stage of proceedings---Plaint on basis of such irregularity and technical defect could not be rejected---High Court repelled the plea while allowing Bank to cure such defect by signing plaint through its both attorneys.

Suit No.B-27 of 2006 (Messrs Standard Chartered Bank Pakistan Limited v. Messrs MAK Dyeing & Finishing Mills Limited); Suit No.B-141 of 2009 (United Bank Limited v. Pak Leather Crafts Limited); Munir Hussain v. Muhammad Aslam PLD 2003 (AJ&K) 16; National Bank of Pakistan v. Karachi Development Authority PLD 1999 Kar. 260; Citibank N.A. v. Judge Banking Court-IV 2001 CLD 171; H.B.L. v. Crescent Soft Wear Products (Pvt.) Ltd.) 2009 CLD 412 and Habib Bank Ltd. v. Paragon Industries (Pvt.) Ltd. 2009 CLD 1346 ref.

Ismail v. Mst. Razia Begum 1981 SCMR 687; 1-laji Muhammad Rafiq v. Shahenshah Jehan Begum PLD 1987 Kar. 180; Qatar Airways PLC v. ANZ Grindlays Bank 2000 CLC 1455 and Niaz Muhammad Khan v. Mian Fazal Raqib PLD 1974 SC 134 rel.

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

----O. VI, Rr. 14, 15 & O. VII, R. 1---Signing, verification and drafting of plaint in a particular manner---Scope---Such rules relating merely to procedure would be construed liberally, but not strictly-Non-following such rules could not make presentation of plaint a nullity---Principles.

Signing, verification and drafting of plaint in a particular manner are matters of mere procedure; thus, relevant provisions cannot be strictly construed. Rules regarding verification and signatures on plaint, being matter relating to procedure, are to be liberally construed. Such presentation or signing cannot make plaint a nullity. Rules and regulations are only meant to streamline the procedure and administer the course of justice, but not to thwart the same. Duty of the court is to do substantial justice. Prime object behind all legal formalities are to safeguard the paramount interest of justice.

Mere technicality, unless offering insurmountable hurdle, should not be allowed to defeat the ends of justice. Legal precepts are devised with a view to impart certainty, consistency and uniformity to administration of justice and to secure the same against arbitrariness.

Ismail v. Mst. Razia Begum 1981 SCMR 687; Haji Muhammad Rafiq v. Shahenshah Jehan Begum PLD 1987 Kar. 180; Imtiaz Ahmad v. Ghulam Ali PLD 1963 SC 382; Qatar Airways PLC v. ANZ Grindlays Bank 2000 CLC 1455 and Niaz Muhammad Khan v. Mian Fazal Raqib PLD 1974 SC 134 rel.

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

----Ss. 9(2) & 10(3)(4)---Constitution of Pakistan, Art.10-A---Suit for recovery of Bank loan---Leave to defend suit, application for---Defendant's plea was that suit filed with incomplete statement of accounts was liable to be dismissed---Plaintiffs plea raised in replication filed in reply to leave application that statement of accounts was complete, correct and legal, but due to clerical mistake could not file same with plaint entire statement, which he annexed therewith---Filing of additional documents with a statement of accounts by Bank after filing replication without obtaining leave of court---Defendant's further plea was that by filing further statement of accounts with replication and thereafter additional documents with a statement of accounts, he was deprived of an opportunity to rebut same, thus, no liability could be determined on basis thereof without recording evidence of parties--Validity-Duty of Bank while filing suit was to file complete statement of accounts with plaint---Purpose of such obligation was to give fair opportunity to defendant to come up with cogent ground for leave to defend suit---According to S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, court after accepting leave application would treat same as written statement---Defendant was not permitted by law to file further or fresh leave application---If plaintiff was left open and allowed to file statement of accounts in piecemeal through replication or separate statement, then defendant could not avail further opportunity to counter or reply subsequent statement of accounts---According to Art.10-A of the Constitution, for determination of civil rights, obligations or in a criminal charge, person affected thereby would be entitled to a fair trial and due process---Non-fulfilment of requirements of S.10(3) & (4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 by defendant could not be strictly enforced, unless he was provided complete statement of accounts and suit was instituted in accordance with S.9(2) thereof---Purpose of allowing plaintiff to file replication was to reply leave application and was never intended by legislature to provide art opportunity to plaintiff to remove lacuna or make improvement in its case through replication---Filing of complete and accurate statement of account with plaint was a mandatory requirement, which defect could not be cured through replication---Dismissal of leave application on basis of incomplete statement of account would tantamount to a violation of Ordinances and infringement of Fundamental Right guaranteed by Art.10-A of the Constitution---Controversy involved, in the present case, could be resolved after recording evidence--High Court accepted leave application unconditionally and converted same into written statement.

Kinza Fashion (Pvt.) Ltd. v. Habib Bank Ltd. 2009 CLD 1440; C.M. Textile Mills (Pvt.) Ltd. v. Investment Corporation of Pakistan 2004 CLD 587; Bank of Punjab v. Genertech Pakistan Ltd. 2008 CLD 765; Habib Bank Limited v. Sabcos (Pvt.) 2006 CLD 244; Zeeshan Energy Ltd v. Faisal Bank Ltd. 2004 CLD 1741; Bank of Khyber v. Spencer Distribution Ltd. 2003 CLD 1406; International Finance Corporation v. Sarah Textiles Ltd. 2009 CLD 761 and Siddique Woollen Mills v. Allied Bank of Pakistan 2003 CLD 1033 ref.

2004 CLD 587 and Haji Ali Khan & Company v. Allied Bank of Pakistan Limited PLD 1995 SC 1995 rel.

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

----Ss. 9(2) & 10(3)(4)---Application for leave to defend suit---Non fulfilment of requirements of S.10(3) & (4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 by defendant-Validity-Defendant's such failure would be considered after plaintiff first fulfilled requirements of S.9(2) of the Ordinance---Principles.

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

----S. 10---Application for leave to defend suit---Filing of replication to such application by plaint---Object stated.

The purpose of allowing an opportunity to file replication is to reply the leave to defend application, and it is not intended by the legislature to provide an opportunity to the plaintiff to remove the lacuna or to make improvement in the case through replication.

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

----S. 10---Civil Procedure Code (V of 1908), O.VI, Rr.14 & 15---Joint application for leave to defend suit---Signing and verification of such application by both defendants separately---Plaintiffs plea was that such application was not maintainable---Validity---Defendant had fulfilled legal requirements---No prejudice would be caused to plaintiffs claim due to such joint application---High Court repelled the plea of plaintiff in circumstances.

Nafees Siddiqui for Plaintiff.

Khaleeq Ahmed for Defendants.

2011 C L D 430

[Karachi]

Before Muhammad Tasnim, J

KHALID JAWAID AND BROTHER ("KJB") and another---Plaintiffs

Versus

SONERI BANK LTD.---Defendant

Suit No.B-34 of 2008, decided on 2nd November, 2010.

Specific Relief Act (I of 1877)--

----Ss. 42 & 54---Civil Procedure Code (V of 1908), S.151---Auction-purchaser---Short delivery---Recovery of amount---Applicant was auction-purchaser whose grievance was that complete quantity of goods (sugar) purchased in auction was not delivered by Official Assignee---Plea raised by Official Assignee was that the short delivery of goods was injurious to health and not fit for human consumption---Validity---Delivery order in respect of 11,070 bags was to be issued by Official Assignee against payment of Rs.1.32 Crore by auction-purchaser but only 9708 bags of sugar were delivered to auction-purchaser---Auction-purchaser made application for refund of cost of remaining 1362 bags---High Court, in circumstances, directed the Official Assignee to return the amount of short supply of goods to auction-purchaser---Application was allowed accordingly.

Abdul Sattar Lakhani for Plaintiffs.

Mansoor-ul-Arfin for Defendant along with Muhammad Ali Haider, Bank Representative.

Ms. Sofia Saeed Shah, for A/P.

2011 C L D 436

[Karachi]

Before Muhammad Tasnim, J

SILKBANK LIMITED---Plaintiff

Versus

Messrs DEWAN SUGAR MILLS LIMITED---Defendant

Suit No.56 of 2010 and C.M.As. Nos.7887, 11741 and 12085 of 2010, decided on 14th December, 2010.

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

----S. 9(1)---Recovery suit, filing of---Locus standi---Contention of defendant was that as no resolution of Board of Directors was appended with the plaint therefore, suit filed on behalf of bank was not filed by competent person---Validity--Plaint could be presented by a financial institution before Banking Court duly signed and verified on oath either by Branch Manager or such other officer of the bank who held power of attorney or was authorized otherwise---Plaintiff bank brought on record a power of attorney and the same had fulfilled requirements of section 9(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was maintainable in circumstances.

Banque Indosuez v. Jet Travels Limited and others 1991 CLC 446; National Bank of Pakistan v. Muhammad Ashraf Sanik and another PLD 1987 Lah. 17 and Khyam Films and another v. Bank of Bahawalpur Ltd. 1982 CLC 1275 ref.

Nazimuddin v. Messrs the Bank of Khyber and another 2005 CLD 647; PICIC Commercial Bank Limited v. Spectrum Fisheries Limited 2006 CLD 440; United Bank Limited v. Pak. Leather Grafts Limited and 3 others 2010 CLC 701; Al-Madina Electric Store v. Habib Bank Limited 2006 CLD 734; Habib Bank Limited v. A.B.M. Graner (Pvt.) Limited and others PLD 2001 Kar. 264 and Nusrat Textile Mills Ltd. and others v. United Bank Ltd. 2005 CLD 1421 distinguished.

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

---S. 9(3)-Recovery suit---Necessary ingredients---Defendant sought rejection of plaint on the ground that the same had not been filed in conformity with provisions of section 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Plaintiff specifically mentioned principal amount of finance availed by defendant, principal amount repaid, balance principal amount, outstanding mark-up payable by defendant till filing of suit and total amount recoverable from the defendant---Plaint fulled requirements of section 9(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001.

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

----Ss. 9 & 10---Recovery of bank loan---Leave to defend the suit, grant of-Principles-Substantial question of fact and law---Scope---Plea raised by defendant was that he had raised substantial question of law and facts and the same could not be determined without recording of evidence---Validity---There was only one financial facility, which was admittedly disbursed to defendant, who admitted availing of the same in full and had also admitted execution of documents---Amount paid by defendant on account of principal reflected in statement of accounts and nothing had been paid on account of mark-up by defendant to plaintiff bank, as such the same did not require any inquiry to be made by an expert or recording of evidence---Defendant failed to raise any substantial question of law or facts, therefore, High Court declined to grant leave to defend the suit to defendant---Suit was decreed in circumstances.

Pakistan Industrial Credit and Investment v. Messrs Bawany Industries Limited PLD 1998 Kar. 400; The Australasia Bank Ltd. v. Messrs H.S. Mahmood Hassan Akbar and others PLD 1983 Kar. 431; Habib Bank Limited v. Messrs Ahmed Food Industries (Pvt.) Ltd. and others 2002 CLD 668; Nazimuddin v. Messrs the Bank of Khyber and another 2005 CLD 647; Gul I-Iabib v. Habib Bank Ltd. PLD 1983 Pesh. 31; Industrial Development Bank of Pakistan v. Al-Mansoor Ltd. and others PLD 1989 Pesh. 191; Allied Bank of Pakistan v. Masood Ahmad Khan 1994 MLD 1557; Citi Bank N.A., a Banking Company v. Riaz Ahmed 2000 CLC 847; Habib-ur-Rehman and another v. Judge Banking Court No.4, Lahore and another 2006 CLD 217; Messrs United Dairies Farms (Pvt.) Limited and others v. United Bank Limited 2005 CLD 569; Messrs C.M. Textile Mills (Pvt.) Limited and others v. Investment Corporation of Pakistan 2004 CLD 587; Muhammad Nafees v. Allied Bank of Pakistan Limited and another 2004 CLD 937; United Bank Limited v. Messrs Ilyas Enterprises and others 2004 CLD 1338; The Central Bank of India, Ltd., Lahore v. Messrs Taj-ud-Din Abdur Rauf and others 1992 SCMR 846 and Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931 distinguished.

National Bank of Pakistan v. Messrs A.I. Brothers (Private) Limited and others 2007 CLD 1356 and Muhammad Arshad and another v. Citibank N.A., Al Fallah Building, Lahore 2006 CLD 1011 rel.

Qamaruzaaman Khan v. Industrial Development Bank of Pakistan and others 2009 CLD 460; Umar Hayat v. Agricultural Development Bank of Pakistan 2003 CLD 204; Abdul Razzaq v. A.D.B.P. 2002 CLD 1707; Bhatt Export Private Ltd. v. United Bank Ltd. 2004 CLD 389; Messrs Mohib Exports Ltd. and others v. Trust Leasing Corporation Ltd. 2005 CLD 581; Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation PLD 1971 SC 550; Industrial Development Bank of Pakistan, Karachi v. Messrs Zamco (Pvt.) Ltd. and others 2007 CLD 217; Haji Ali Khan & Company, Abbottabad and others v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362; United Bank Limited v. Ch. Ghulam Hussain 1998 CLC 816; Messrs Saudi Pak Commercial Bank Limited v. Messrs Marvi Agrochem (Private) Ltd. and others 2007 CLD 1374; Industrial Development Bank of Pakistan v. Muhammad Ayub and others 2009 CLD 346; Shahid Farooq sheikh v. Allied Bank of Pakistan Limited 2005 CLD 1489; Zeeshan Energy Ltd. and others v. Faisal Bank Ltd. 2004 CLD 1741; Bank of Khyber v. Messrs Spencer Distribution Ltd. and others 2003 CLD 1406; Messrs U.B.L. v. Messrs Sindh Tech. Industries Ltd. and others 1998 CLD 1152; Messrs Malik & Company and others v. Muslim Commercial Bank and others 2002 CLD 1621; Habib Bank Limited v. Messrs Sabcos (Pvt.) Ltd. 2006 CLD 244; National Bank of Pakistan v. Messrs A.I. Brothers (Private) Limited and others 2007 CLD 1356; American Express Bank Ltd. v. Adamjee Industries Limited 1995 CLC 880; Messrs Razzaq & Company v. Messrs Riazeda (Pvt.) Ltd. 1990 CLC 1243 and Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 CLD 1033 ref.

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

----S. 10---Leave to defend the suit, grant of--Claim of set-off or counter-claim--- Scope---By raising claim of set-off or counter-claim, defendant cannot be entitled to grant of leave---If leave is granted on such ground alone, the same may change complexion of suit instituted under special law i.e. Financial Institutions (Recovery of Finances) Ordinance, 2001---Claim, if any, defendant has against Plaintiff can properly be dealt With by Court of competent Jurisdiction including Banking Court, in accordance with law through separate proceedings.

Arshad Tayebally and Abdul Sattar Lakhani for Plaintiff.

Saalim Salam Ansari for Defendants.

2011 CLD 461

[Karachi]

Before Muhammad Tasnim, J

KASB BANK LIMITED---Plaintiff

Versus

Mirza GHULAM MUJTABA and 2 others---Defendants

Suit No.B-107 of 2009 and C.M.A. Nos.8592, 9265, 8595, 8591, 8593 and 8594 of 2009, decided on 15th December, 2010.

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

----S. 9(1)---Recovery suit, filing of---Locus standi---Contention of defendants was that as no resolution of Board of Directors was appended with the plaint, therefore, suit filed on behalf of bank was not filed by competent person---Validity---Plaint could be presented by a financial institution before Banking Court duly signed and verified on oath either by branch manager or such other officer of the bank who held power of attorney- or was authorized otherwise---Plaintiff bank brought on record valid power of attorneys and the same had fulfilled requirements of section 9 (1) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit was maintainable in circumstances.

The Central Bank of India, Ltd., Lahore v. Messrs Taj-­ud-Din Abdur Rauf and others 1992 SCMR 846; PICIC Commercial Bank Limited v. Spectrum Fisheries Limited 2006 CLD 440; United Bank Limited v. Pak. Leather Grafts Limited and others 2010 CLC 701; Al-Madina Electric Store v. Habib Bank Limited 2006 CLD 734; Habib Bank Limited v. A.B.M. Graner (Pvt.) Limited and others PLD 2001 Kar. 264 and Nusrat Textile Mills Ltd. and others v. United Bank Ltd. 2005 CLD 1421 distinguished.

Banque Indosuez v. Jet Travels Limited and others 1991 CLC 446; National Bank of Pakistan v. Muhammad Ashraf Sanik and another PLD 1987 Lah.17 and Khyam Films and another v. Bank of Bahawalpur Ltd. 1982 CLC 1275 rel.

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

----S. 9---Contract Act (IX of 1872), S.176---Recovery of bank loan--- Pawnee's right--- Default by pawnor---Remedy---Defendants contended that suit filed by bank was not maintainable as plaintiff bank should have sold pledged shares available with it----Validity---It was a right of pawnee/pledgee either to bring a suit upon debt or to sell goods pledged upon giving a reasonable notice of sale---Both rights were concurrent and had been provided under section 176 of Contract Act, 1872--- Pawnee had a right under section 176 of Contract Act, 1872, to auction the debt, notwithstanding possession of goods, subject to pawnee's right to redeem the goods upon tender of amount due before the sale---Plaintiff bank had rightly filed suit in spite of the fact that pledged shares were not sold and were retained by plaintiff bank-Such action of bank was in line with the provisions of section 176 of Contract Act, 1872.

A.M. Burq and another v. Central Exchange Bank Ltd. and others PLD 1966 (W.P) Lah. 1; Muhammad Habib and others v. Messrs National Bank of Pakistan 1989 MLD 1026; Salim Adamjee v. Al-Faysal Investment Bank Ltd. and another PLD 1999 Kar. 468 and Messrs Crystal Enterprises and others v. Platinum Commercial Bank Ltd. and others 2002 CLD 868 rel.

(c) Administration of justice---

----When a particular procedure has been provided under a statute for doing a particular thing in particular manner, the party invoking such provision of law has to act in accordance with the procedure laid down in that statute.

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

----Ss. 9 & 10 (3)(4)(5)(6)--Recovery of bank loan-Leave to defend the suit---Non-compliance of mandatory requirements---Effect---Plaintiff bank resisted application for leave to defend on the ground that defendants did not comply with mandatory requirements of section 10(3)(4)(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Application filed by defendants did not comply with the provisions of section 10 (3)(4) and (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, the same was liable to be dismissed under the provision of section 10(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Defendants failed to show any sufficient cause for their inability to comply with such requirements---Defendants did not discharge their obligations as per agreement and suit was rightly filed by plaintiff bank---Defendants failed to make out any substantial question of law as well as fact in respect of which any evidence was required to be led---Application for leave to defend the suit filed by defendants was dismissed by High Court---Suit was decreed in circumstances.

Muhammad Khan and others v. Shabarati PLD 1995 Kar. 267; Muhammad Haleem and others v. H.H. Muhammad Naim and others PLD 1969 SC.270; Vedabai alias Vaijayantabai Baburao Patil v. Shantaram Baburao Patil and others AIR 2001 SC 2582; Sarpanch, Lonand Grampanchayat v. Ramgiri Gosavi and another AIR 1968 SC 222; Bank of Baroda v. Sansar Chand Kapur and another AIR 1994 Delhi 359; United Bank Limited v. Progas Pakistan Limited 2010 CLD 828; Messrs Fybron (Pvt.) Limited and others v. National Bank of Pakistan 2006 CLD 127; Rahat Badaruddin Bandey v. Union Bank Limited 2005 CLD 1080 and Bankers Equity Limited and others v. Messrs Bentonite Pakistan Limited and others 2003 CLD 931 distinguished.

NIB Bank Limited v. Taha Spinning Mills Limited and others 2010 CLD 635; Askari Commercial Bank Limited v. Hilal Corporation (Pvt.) Ltd. and others 2009 CLD 588; Messrs Mach Knittrs (Pvt.) Limited and others v. Allied Bank of Pakistan Limited 20.04 CLD 535; Bank of Khyber v. Messrs Spencer Distribution Ltd. and others 2003 CLD 1406; Habib Bank Limited v. Messrs Sabcos (Pvt.) Limited 2006 CLD 244; Muhammad Arshad and another v. Citibank N.A., Al-Fallah Building, Lahore 2006 CLD 1411; National Bank of Pakistan v. Messrs A.I. Brothers (Private) Limited and others 2007 CLD 1356; American Express Bank Ltd v. Adamjee Industries Limited 1995 CLC 880; Messrs Razzaq & Company 'v. Messrs Riazeda (Pvt.) Limited 1990 CLC 1243 and Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 CLD 1033 ref.

Habib Bank Limited v. Messrs Sabcos (Pvt.) Ltd. 2006 CLC 244 and Bank of Khyber v. Messrs Spencer Distribution Ltd. and other 2003 CLC 1406 rel.

Saim Hashmi, Jam Asif Mehmood and Behzad Haider for Plaintiff.

Habibur Rehman for Defendants Nos. 1 to 3.

2011 C L D 484

[Karachi]

Before Gulzar Ahmed, J

KASB BANK LIMITED---Plaintiff

Versus

Messrs MEKRAN FISHERIES (PVT.) LTD and others---Defendants

Suit No. B-69 of 2001, decided on 3rd November, 2006.

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

----S. 19(3)---Civic Procedure Code (V of 1908), S.152--Amendment of decree---Mortgaged property, selling of---Banking Court decreed the suit in favour of plaintiff-bank and directed to publically auction mortgaged property and to deposit sale consideration in court---Plaint1ff-bank sought amendment of judgment and decree on the ground that mortgaged property could be sold by bank directly---Validity---Plaintiff bank was empowered under S. 19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, to sell mortgaged properties by public auction or by inviting sealed tenders and to appropriate the proceeds towards the total and partial satisfaction of decree with or without intervention of Banking court-Though decree provided for selling of mortgaged property by Court and depositing of its sale proceeds in Court but in view of provision of S. 19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, plaintiff-bank could exercise its right---Plaintiff-bank did not need to obtain any order of Court or amendment in decree in that regard---Application was disposed of accordingly. ?

Naveed Ahmed for Plaintiff.

Syed Mazharul Haq for Defendants.

2011 C L D 496

[Karachi]

Before Shahid Anwar Bajwa and Tufail H. Ibrahim, JJ

MUHAMMAD MASOOD BUTT and 3 others---Petitioners

Versus

S.M. CORPORATION (PVT.) LTD. and 6 others---Respondents

Constitutional Petition No.D-197 of 2010, decided on 24th December, 2010.

(a) Constitution of Pakistan---

----Art. 19 A---Right to information---Article 19-A of the Constitution is attracted when a particular information is of public importance---Regulations and restrictions imposed by law, absence of---Effect---Absence of regulations and restrictions could not render such right as nugatory, but same would still be available to citizens---Principles.

Article 19-A of the Constitution indicates that every citizen has been conferred a right to have access to information in all matters of public importance, however, subject first to regulations and secondly to reasonable restrictions by law. Non-framing of the regulations cannot have effect of rendering the right guaranteed by Article 19-A as nugatory. Therefore, even if no regulations are framed, this right is available to all the citizens. In the absence of regulations and in the absence of restrictions, task will be thrown to the court to determine whether request for information in a particular case or denial of information in a particular case is reasonable or an order without lawful authority or not. But the Article does not stop here, it further says that it must be in "matters of public importance". Therefore, it must be a matter in which public at large or at least a' substantial section of population is interested.

Article 19-A is attracted when a particular information is of public importance.

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

----Ss. 290 & 305---Constitution of Pakistan, Arts.19-A & 199---Non-declaration of dividend by a private limited company for a long time---Constitutional petition by shareholders for giving direction to company to provide them information in respect of different matters, affairs and accounts of company---Maintainability--Article 19-A of the Constitution would attract when information sought was of public importance---Information sought regarding operation of company was of no significance to 99.9% of people of Pakistan---Rights of shareholders including their right to information and dividend were regulated under Companies Ordinance, 1984 providing them complete remedy---Writ could not be issued in case of a company not owned/controlled by Government---Shareholders had .not pointed out violation of their fundamental right---High Court dismissed constitutional petition for being not maintainable.

Human Rights Commission of Pakistan and 2 others v. Government of Pakistan and others PLD 2009 SC 507 ref.

Muhammad Mohsin Butt and others v. Muhammad Inayat Butt and others 2005 CLD 1047; Salahuddin and 2 others v. Frontier Sugar Mills and Distillery Ltd., Tokht Bhai and 10 others PLD 1975 SC 244 and Gujrat Punjab Bus Ltd. and others v. Mian Muhammad Ashraf Pugganwala and others PLD 1960 (W.P.) Lah. 609 rel.

(c) Constitution of Pakistan---

----Art. 199---Constitutional petition by a company not owned/controlled by Government---Maintainability---Writ could not be issued in case of such company.

Salahuddin and 2 others v. Frontier Sugar Mills and Distillery Ltd., Tokht Bhati and 10 others PLD 1975, SC 244 and Gujrat Punjab Bus Ltd. and others v. Mian Muhammad Ashraf Pugganwala and others PLD 1960 (W.P.) Lahore 609 rel.

Rasheed A. Akhund for Petitioners.

Kashif Paracha for Respondents Nos. 1, 2 and 4.

Zubair Hashmi for Respondents Nos. 5 and 6.

Date of hearing: 10th December, 2010.

2011 CLD 511

[Karachi]

Before Shahid Anwar Bajwa and Tufail H. Ibrahim, JJ

Messrs ZURASH INDUSTRIES (PVT.) LTD. through Director and 4 others---Petitioners

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Interior, Islamabad

and 3 others---Respondents

Constitutional Petition No.908 of 2009, decided on 8th January, 2011.

Exit from Pakistan (Control) Ordinance (XLVI of 1981)---

----S. 2---Constitution of Pakistan, Art.199---Constitutional petition---Banker and customer---Petitioner was Director of company which had obtained financial facility from respondent-bank which had filed recovery suit and criminal complaint against the petitioner and his company---Petitioner challenged inclusion of his name in Exit Control List without any notice or information to him---Validity---Right to travel abroad was an important feature of citizen's liberty---Putting someone on Exit Control List was serious infringement of citizen's liberty---Provision of notice must be read as an integral part of each statute unless specifically excluded---Person concerned must be heard before passing an adverse order against him---Show-cause notice must follow the order which should disclose reasons for the action taken against a person---Order barring a person from going abroad without reasons was liable to be set aside---If there was provision in the substantive law under which a person was being proceeded against (that his name be paced on exit control list) it would not be permissible to put his name in the exit control list---Pendency of criminal cases did not, ipso facto, disentitle a person from travelling abroad---Obtaining sufficient security against an ultimate order of recovery was more appropriate than barring a person from exercising his right---Petitioner's leave to defend in recovery suit had yet to be decided---Placement of petitioner's name on the Exit Control List was clumsy exercise of power in circumstances---Constitutional petition was allowed setting aside the order putting petitioner's name on Exit Control List.

PLD 1989 FSC 39; Ashfaq Yousuf Tola v. Federation of Pakistan through Secretary, Ministry of Interior and Narcotics Control, Islamabad PLD 2006 Kar. 193: Wajid Shams-ul-Hassan v. Federation of Pakistan through Secretary, Ministry of Interior, Islamabad PLD 1997 Lah. 617; Mirza Muhammad Iqbal Baig v. Federation of Pakistan and others 2006 YLR 2797 and Sohail Latif and 2 others v. Federation of Pakistan through Secretary, Ministry of Interior, Government of Pakistan, Islamabad and 2 others, PLD 2008 Lah. 341 ref.

Government of Pakistan and another v. Dada Amir Haider Khan PLD 1987 SC 504 and Collector, Sahiwal and 2 others v. Muhammad Akhtar 1971 SCMR 681 fol.

Khawaja Shamsul Islam for Petitioners.

Shahab Serki along with S. Israr Ali, Dy. Director, F.I.A. for Respondent No.1.

Hassan Akbar for Respondent No.2.

Malik Khushhal for Respondent No.3.

Date of hearing: 13th December, 2010.

2011 C L D 529

[Karachi]

Before Muhammad Tasnim, J

Messrs AS ENTERPRISES and another---Plaintiffs

Versus

Messrs NATIONAL BANK OF PAKISTAN and another---Defendants

Suit No. B-31 of 2006 and C.M.A. No. 9414 of 2007, decided on 1st December, 2010.

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

----S. 9(1)---Civil Procedure Code (V of 1908), O.I, R.10---Insurance Ordinance (XXXIX of 2000), S.122---Limitation Act (IX of 1908), S.14---Banker and customer---Suit for recovery, declaration and permanent injunction---Power of the court to strike out or add parties---Defendant/ Insurance Company contended that it could not be impleaded as necessary party in the proceedings between the plaintiff and the defendant/bank-Validity--Plaintiff being customer of defendant bank, relief claimed by him could only be granted in banking jurisdiction---In order to settle the claims of policy holders against insurance companies, S.122 of the Insurance Ordinance, 2000 created a special court/Insurance Tribunal vested with the powers of civil court in terms of Civil Procedure Code, 1908---Defendant Insurance Company was not necessary party in the present proceedings which were initiated under Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaintiff was held to be at liberty to initiate proceedings before appropriate forum and seek condonation of delay under S.14 of the Limitation Act, 1908--- Application of defendant was allowed with direction to plaintiff to file amended plaint.

Messrs Bengal Wool House and others v. The Standard Insurance Co. Ltd. and others 1989 CLC 839 distinguished.

(b) Insurance Ordinance (XXXIX of 2000)---

----S. 122---Powers of Insurance Tribunal-Scope--Insurance Tribunal created by S.122 of the Insurance Ordinance, 2000 to settle the claims of policy holders against insurance companies was vested with the powers of civil court in terms of Civil Procedure Code, 1908.

Muhammad Rafiq Kamboh for Plaintiff.

Muhammad Rehan Quraishy for Defendant No. 1.

Sultan A. Allana for Defendant No. 2.

2011 C L D 550

[Karachi]

Before Muhammad Ali Mazhar, J

PAKISTAN REFINERY LIMITED---Plaintiff

Versus

MASKATIYA INDUSTRIES (PVT.) LIMITED---Defendant

Suit No.1094 and C.M.As. Nos. 7860, 11551 of 2008, decided on 7th December, 2010.

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

----Ss. 42 & 54---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Constitution of Pakistan, Art.189---Suit for declaration and permanent injunction---Interim injunction, application for---Judgment passed on such application by Single Bench of High Court affirmed by Division Bench of High Court---Judgment of Supreme Court passed with consent of parties setting aside both impugned judgments of High Court and remanding case to Single Bench of High Court to decide such application afresh---Effect---Supreme Court in its judgment had not decided any question of law, thus, same would have no binding effect---Such judgment of Division Bench after having been set aside by Supreme Court had lost its efficacy and binding effect---Single Bench of High Court while deciding such application would not be bound by such judgment of Division Bench---Principles.

2009 MLD 1100; PLD 2009 Kar. 315; Mian Fazal Din v. Lahore Improvement Trust, Lahore PLD 1969 SC 223; Suleman Mala v. Karachi Building Controlling Authority 1990 CLC 448; Afroz Ilahi v. K.M.C. and others 1990 MLD 828; Mst. Khalida v. Raja Muhammad Khurshid Khan 2008 CLC 1570; Mrs. Halima Tahir v. Naheed 2004 MLD 227; Pir Bakhsh v. Chairman, Allotment Committee PLD 1987 SC 145; Messrs Sandal Dye Stuff Industries Ltd. v. Federation of Pakistan 2000 CLC 661 and Al-Jehad Trust v. Federation of Pakistan PLD 1997 SC 84 ref.

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

----Ss. 42, 54 & 55---Civil Defence Act (XXXI of 1952), S.2---Civil Defence (Special Powers) Rules, 1951, R.10---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Constitution of Pakistan, Art.23---Suit for declaration, permanent and mandatory injunction and damages---Pakistan Refinery Limited (PRL) classed as Key Point Installation 1-A---Key Point Installation 1-A being an installation in proximity of 200 yards whereof no structure could be raised without prior permission of Key Point Intelligence Division (Inter Services Intelligence)---Construction of private factory in close proximity of PRL without permission of KPID---Temporary injunction to restrain such construction, application for---Validity---Plaintiff in suit had not pleaded that in case of refusal of KPID to grant permission to defendant, what would be its effect, whether plaintiff would compensate defendant or acquire defendant's property at market price with or without compensation---Question as to whether defendant's factory was within 200 yards of PRL, could be decided only after framing or issues---Further question requiring decision would be as to whether entire installation of PRL would be considered as Key Point Installation A-1 or only its terminals---High Court directed its Nazir to measure actual distance between PRL and defendant's factory---High Court allowed defendant to raise boundary wall on suit plot at his own risk to protect same from encroachment, but restrained him from constructing factory thereon---High Court framed issues and directed parties to address arguments thereon for involving law points.

Rashid Anwer for Plaintiff.

Messrs Muneer A. Malik and Haider Waheed for Defendant.

2011 C L D 648

[Karachi]

Before Maqbool Baqar, J

GUANGDONG OVERSEAS CONSTRUCTION GROUP COMPANY LTD. through General-Manager---Plaintiff

Versus

CREEK MARINA PRIVATE LIMITED and 2 others---Defendants

Suit No.701 and C.M.As.4358, 4359 of 2008, decided on 12th March, 2011.

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

----S. 22-Both parties to the contract under a common mistake-Effect-Doctrine of 'estoppel by convention' Applicability-Scope.

In terms of section 22 of the Contract Act, a contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.

When the parties to a contract are both under a common mistake as to the meaning or effect of it and thereafter embark on a course of dealing on the footing of that mistake, thereby replacing the original terms of the contract by a conventional basis on which they both conduct their affairs, then the original contract is replaced by the conventional basis.

The parties are bound by the conventional basis. Either party can sue or be sued upon it just as if it had been expressly agreed between them. When the parties to a transaction proceed on the basis of an undefying assumption (either of fact or of law, and whether due to misrepresentation or mistake, makes no difference), on which they have conducted the dealings between them, neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the court will give the other such remedy as the equity of the case demands.

The existence of the LOA depended on the acceptance and the signature of the plaintiff and no matter what the defendant would have represented, the plaintiff would have known whether the LOA existed or not, and the plaintiffs' case is hit by the doctrine of 'estoppel by convention' whereby the plaintiff and defendant are stopped from claiming that the guarantees are void due to a mistake of fact, as in terms of the said doctrine where the parties to a transaction have acted on the agreed assumption that a state of facts can, for the purpose of that transaction, be regarded as true, the parties are precluded from denying the truth of those assumed facts, in case where it would be unjust to allow them or only one of them to do so.

Where the parties have established by their construction of their agreement or their apprehension of its legal effect a conventional basis and on that basis they have regulated their subsequent dealings and it would be unjust or unconscionable if one of the parties resiled from that convention and further that the party who is sought to be estopped must have contributed in some active way towards the creation or continuance of the mistaken basis on which the parties thereafter conducted their dealings, so that it would be unconscionable to allow him to resile from the stance he had taken, which had to a certain extent influenced the other party to behave as it did applicable with full force.

Amalgamated Investment and Property Co. Ltd. (in liquidazion) v. Texas Commerce International Bank Ltd. [1981] 3 All ER 577 and Bank of Scotland v. Wright and another 1991 BCLC 244 fol.

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

---S. 22 Party to contract cannot be said to be mistaken about the existence of an instrument, its existence requires the signature of the said party.

(c) Estoppel by convention---

---Applicability--Scope--In terms of doctrine of `estoppel by convention' where the parties to a transaction have acted on the agreed assumption that a state of facts can, for the purpose of that transaction, be regarded as true, the parties are precluded from denying the truth of those assumed facts, in case where it would be unjust to allow them or only one of them to do so.

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

----Ss.126, 127 & 128-Specific Relief Act (1 of 1877), S.53---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2--letter of credit', 'unconditional bank guarantee' and 'performance bond'/guarantee--Scope---Grant of ad interim injunction or interference by Court Principles.

In case of a letter of credit and an unconditional bank guarantee, the Court would generally be reluctant to grant an ad interim injunction, restraining a bank from honouring its contractual obligation. However, in exceptional cases, where refusal to grant an ad interim injunction, will perpetuate fraud or injustice, which should be apparent from the material on record, the Court may grant an ad interim injunction.

With regard to the performance bond, the same stands entirely on different footing than the bank guarantee and unless and until the Court prima facie finds that the default was on the part of the defendants, it would not be just and proper to allow its encashment as the encashment depends on the commission of default.

Performance guarantee stands on footing similar to an irrevocable letter of credit, the bank which gives performance guarantee must honour that guarantee according to its terms. It is not concerned in the least with the relations between the parties to the main contract and as to whether the contractor has performed his contracted obligation or not, nor with the question whether the contractor is in default or not. The bank must pay according to the terms of the guarantee all demands, and if so stipulated, without proof or condition and that the only exception is a case of clear fraud of which the bank has notice. There is an absolute obligation upon the banker to comply with the terms and conditions, as enumerated in the guarantee and to pay the amount stipulated therein irrespective of any dispute between the parties to the main contract, as to whether the goods supplied are up to the specification or not. The bank guarantee should be enforceable on its own terms and that realization against the bank guarantee would not affect or prejudice the case of the contractor, if ultimately the dispute is referred to arbitration and further that the contract of bank guarantee is an' independent contract between the bank and party concerned and is to be worked out independently of the dispute arising out of the work agreement between the parties to the work agreement and, therefore, the extent of the dispute and claim or counter-claims were matters extraneous to the consideration of the question of enforcement of the bank guarantee. Where the bank had undertaken to pay the stipulated sum, at 'any time, without demur, reservation, recourse, contest or protest, and without any reference to the contractor, no interim injunction, restraining payment under the guarantee could be granted. Bank guarantee is an autonomous contract and imposes an absolute obligation on the bank to fulfil the terms and the payment on the bank guarantee becomes due on the happening of a contingency on the occurrence of which the guarantee becomes enforceable. In the absence of special equities and the absence of any clear fraud the bank must pay on demand, if so stipulated and whether the terms are such must be found out from the performance guarantee, as such. Unqualified terms of guarantee could not be interfered with by the Courts irrespective of the existence of dispute.

In case of confirmed bank guarantees/irrevocable letters of credit the Court will not interfere unless there is fraud and irretrievable damages are involved in the case and the fraud has to be an established fraud.

The Court cannot interfere in the matter of encashment of confirmed bank guarantees/irrevocable letters of credit, unless there is fraud and irretrievable injustice involved in the case and fraud has to be an established fraud.

Irretrievable injustice which was made the basis for grant of injunction really was on the ground that the guarantee was not encashable on its terms.

There should be prima facie a case of fraud and special equities in the form of preventing irretrievable injustice between the parties. Mere irretrievable injustice without a prima facie case of established fraud is of no consequence in restraining the encashment of bank guarantee.

A bank issuing a guarantee, is not concerned with the underlying contract between the parties to the contract. Unless there is an allegation of fraud, the Courts will not interfere. A bank guarantee is ordinarily a contract quite distinct from the underlying contract and gives rise to a separate cause of action.

Bank issuing a guarantee is not concerned with the underlying contract between the parties to the contract. The duty of bank under a performance guarantee is created by the document itself. Once the documents are in order, the bank giving the guarantees must honour the same to make payment. Ordinarily, unless there is an allegation of fraud or the like, the Courts will not interfere directly or indirectly to withhold payment, otherwise trust in commerce, internal and international, would be irreparably damaged. But that does not mean that the parties to the underlying contract cannot settle their dispute with respect to allegations of breach by resorting to litigation or arbitration as stipulated in the contract. The remedy arising ex contract is not barred and the cause of action for the same is independent of enforcement of the guarantee.

Where the special circumstances and/or special equities which had been pleaded were that there was a serious dispute on the question as to who had committed breach of the contract, that the contractor had a counter-claim, that the disputes between the parties had been referred to the arbitrators and that no amount could be said to be due and payable by the contractor till the arbitrators declared their award, these factors were not sufficient to make this an exceptional case justifying interference by restraining from enforcing the bank guarantees.

When the guarantor had bounded itself to pay the amount of guarantee upon service of notice without recourse or reference to the company or any other person, neither prima facie case was made out nor was balance of convenience in favour of the company.

Courts must give effect to the covenants of the bank guarantees, the performance guarantees, for the smooth performance of the contracts. The guarantees are independent contracts and the bank authority must construe them, independent of the primary contracts. They should encash them notwithstanding any dispute arising out of the original contract between the parties.

Unless and until the Court prima facie finds that the default was on the part of the contractor, it would not be just and proper to allow encashment of the performance guarantee/bond, is binding.

In the present case the plaintiffs have committed defaults in performance in terms of their obligations towards defendant, so much so, that they have even failed to mobilize themselves adequately to undertake and carry out the project works as required of them and neither are there any special equities nor any fraud committed by the defendants, it will not be just and proper to restrain the defendants from encashing the subject guarantees. However, since no payment has been made under mobilization advance guarantee and the defendant has submitted that they are not seeking encashment of said guarantee the same shall not be encashed.

Pakistan Engineering Consultants v. P.I.A.C. 1989 SCMR 379 distinguished.

Shipyard K. Damen International v. Karachi Shipyard and Engineering Work Ltd. PLD 2003 SC 191 fol.

Pakistan Engineering Consultants v. P.I.A.C. 1993 CLC 1929; Messrs Jamia Industries Ltd. v. Pakistan Refinery Ltd. Karachi PLD 1976 Kar. 644; U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. IT 1987 (4) SC 406; National Thermal Power Corporation Limited v. Flowmore Private Ltd. and another (1995) 84 Comp. Cas. 97; Larsen & Toubro Ltd. v. Maharashtra State Electricity Board and others (1996) 85 Comp. Cas.; United Commercial Bank Ltd. v. Bank of India (1982) 52 Comp. Cas. 186: (1981) 2 SC 766; U.P. Cooperative Federation Ltd. Singh Consultants and Engineers (P) Ltd. (1989) 65 Comp. Cas. 283; (1988) 1 SCC 174; General Electric Technical Services Company Inc. v. Punj. Sons (P) Ltd. (1992) Comp. Cas. 624; (1991) 4 SC 230; Elian & Rabbath v. Matsas and Matsas, (1966) 2L Lloyd's List Law Reports 495; Svenska Handelbarrken v. Indian Charge Chrome, (1994) 1 SC 502, 523-524, 526-27; (1994) 79 Comp. Cas. 589, 616-617, 620; UCO Bank v. Bank of India 1901 (3) SCR 300 at 325; Contax (India) Ltd. v. Vinmar Impex Inc. JT 1986 SC 174; 1986 (4) SC 136; U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd., JT 1987 (4) SC 405; National Grid Company PLC v. Government of Pakistan, Private Power and Infrastructure Board, Minister of Water and Power 1999 SCMR 2367; Messrs National Construction Ltd. v. Aiwan­e-Iqbal Authority PLD 1994 SC 311; Heavy Mechanical Complex Pvt. Ltd. Taxlia v. Attock Industrial Products, Rawalpindi PLD 2003 SC 295; Shipyard K. Damen International v. Karachi Shipyard and Engineering Work Ltd. PLD 2003 SC 191; Ardeshir Covasjee v. Karachi Building Control Authority 1999 SCMR 2883 and Pakistan Engineering Consultants v. P.I.A.C. 1989 SCMR 379 ref.

Bilal A. Khawaja for Plaintiff.

Arshad Tayabally and Azizur Rehmabn for Defendants.

2011 C L D 709

[Karachi]

Before Muhammad Tasnim, J

Messrs KHADIJA EDIBLE OIL REFINERY (PVT.) LTD.---Plaintiffs

Versus

M.T. "GALAXY" and 4 others---Defendants

Admiralty Suits Nos. 3, 4 and C.M.As. Nos. 22 and 24 of 2011, decided on 18th February, 2011.

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

----Ss. 3 & 4---Admiralty suit---Action in rem and personam joined in one suit---Suit was maintainable.

Messrs MSC Textiles (Private) Limited v. Asian Pollux and others 2007 CLD 1465 and Bangladesh Shipping Corporation v. M. V. Nedon and another PLD 1981 Kar. 246 fol.

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

----Ss. 3 & 4(4)---Invoking of Admiralty jurisdiction of High Court---Facts essential to be pleaded by plaintiff stated.

In applying section 4(4) of Admiralty Jurisdiction of High Courts Ordinance, 1980, one has to take into consideration the existing facts at the time when cause of action arose in connection with offending ship. In order to invoke the jurisdiction, the plaintiff has to plead that: (a) the claim falls in any of the clauses (e) to (h) and (j) to (q) of subsection (2) of section 3 and arises in connection with a ship; (b) when the cause of action in personam arose; (c) the person liable in an action in personam at the time when such cause of action arose, was the owner or charterer of or in possession or in control of the offending ship; (d) the offending ship or any other ship when is sought to be arrested at the time when action is brought is beneficially owned as respect of majority shares by the person liable on the claim is an action in personam.

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

----Ss. 3 & 4--Admiralty suit for damages against owner of offending ship---Sister ship of offending ship, arrest of---Scope---Person liable for claim in an action in person am, if beneficially owned majority shares in sister ship at time of accrual of cause of action, only then action in rem for arrest of sister ship could be filed.

Yukong Ltd. v. M.T. Eastern Navigator PLD 2001 SC 57; Union Council v. Associated Cement (Pvt.) Ltd. 1993 SCMR 468; Central Insurance Co. v. M.T. Tasman Spirit SBLR 2004 (Sindh) 414; Nazar Muhammad v. Ali Akbar PLD 1989 Kar. 635; Pak American Fertilizers Ltd. Mianwali v. Amir Abdullah Khan and another 1984 CLC 2170; Atlantic Steamer's Supply Company v. M.V. Titisee and others PLD 1993 SC 894; Central Insurance Company Ltd. and others v. M.T. Tasman Spirit and others 2004 CLD 695; and Proceeding in Rem Against the Vessel M.T. Portofino and another v. M.T. Portofino SBLR 2003 Sindh 778 ref.

V.N. Lakhani and Co. v. M.V. Lakatoi Express PLD 1994 SC 894; Messrs Maratos and Co. v. Rice Trader PLD 1989 Kar. 94; M.V. Sea Success I v. Liver Pool and London Steamship Rotection and Indemnity Association Ltd. AIR 2002 Bomb. 151; Global Tradeways Ltd. v. Tsavliris Russ (World Salvage and Towage) Limited and another 2004 YLR 2581 and [(1981)] 1 All England Law Reports 1092 rel.

(d) Company---

----Subsidiary company and parent/holding company---Legal status stated.

Fundamentally each company incorporated in law is a distinct legal entity and mere incorporation of 100% subsidiary company by its parent company cannot lead to the conclusion that the assets of the former belong to and are owned by parent company. It is not that in all cases a subsidiary company must be treated as an asset of the holding company. If that be so, the subsidiary company shall have no independent identity and such subsidiary company will crack not under the pressure of its own uncongenial shareholders, but also of the pressure of the shareholders and creditors of the holding company.

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

----Ss. 3 & 4---Admiralty suit---Sister ship of offending ship, arrest of---Scope---Bald statement in pleadings or inference that ship in question was sister ship for reasons not legally sustainable would not be sufficient to disclose a cause of action.

Messrs Mazhar Imtiaz Lari and Ibaad Mazhar Lari for Plaintiff (in Admiralty Suits Nos. 3 and 4 of 2011).

Khalid A. Rehman for Defendants Nos. 1 to 5 (in Admiralty Suits Nos. 3 and 4 of 2011).

2011 CLD 733

[Karachi]

Before Muhammad Tasnim, J

HABIB BANK LIMITED---Plaintiff

Versus

BAHJANI SCRAP TRADING COMPANY LLC and 2 others---Defendants

Suit No.B-162 of 2010, decided on 14th February, 2011.

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

----Ss. 13 & 44-A---Limitation Act (IX of 1908), Art. 117---Foreign judgment--Execution---Scope---Upon obtaining foreign judgment by plaintiff, three courses are open to such plaintiff firstly he can obtain execution of foreign judgment by proceeding under S.44-A, C.P.C., if the country from which decree has been obtained is United Kingdom or any reciprocating territory and in that case, plaintiff can outrightly obtain execution of the decree from District Court of concerned district of Pakistan and plaintiff need not file suit even and need not go through procedure prescribed for trial of suit---Secondly plaintiff can file suit in Pakistan on the basis of foreign judgment treating it as cause of action---In adopting second course, if conditions prescribed in S.13 C.P.C. are fulfilled, the judgment is conclusive between parties and otherwise it is res judicata between them and such Courts in Pakistan are bound by its findings---Such suit is to be filed within the period of six years from the date of that judgment as provided under Art.117 of Limitation Act, 1908---Third course against foreign judgment is that plaintiff can file suit on the original cause of action as it does not cone to an end after passing of foreign judgment but remains intact until and unless that foreign judgment is satisfied---If conditions mentioned in S.13 C.P.C. are not satisfied, then the decree remains open to collateral attack in Pakistan. ?

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

----S. 9---Qanun-e-Shahadat (10 of 1984), Art. 96---Civil Procedure Code (V of 1908), S:13-:-Recovery of finances---Foreign judgment---Certified copies and its translation--Plaintiff company filed recovery suit against defendant in a foreign country, where finance was availed and was to be repaid, the suit was decreed in favour of bank by foreign court---On the basis of judgment and decree passed by foreign Court, plaintiff filed suit against defendant in Pakistan for recovery of decretal amount---Validity---There was nothing in S.13 C.P.C. which had effect of excluding provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, or to sit on a foreign judgment in appeal---Plaintiff had filed suit on the basis of foreign judgment treating it as cause of action, which the plaintiff could do under the law---High Court did not find any illegality in the form of suit and the suit was maintainable in banking jurisdiction as provided under Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaintiff bank had filed certified copies of foreign judgment and its translation duly attested by the Consulate General of Pakistan was also brought on record, as required under Art.96 of Qanun-e-Shahadat, 1984---Defendant did not file application for leave to defend the suit and there was nothing on record to rebut the claim of plaintiff---Suit was decreed in favour of plaintiff in circumstances.?

Habib Bank Ltd. v. Messrs Virk House Trading Company Ltd. 2009 CLD 451; United Bank Limited v. Naeem Ullah Malik and others 2009 CLD 1459; Popat Virji v. Damodar Jairam AIR 1934 Bombay 390; Emirates Bank Intl. Limited v. Messrs Osman Brothers and others 1990 MLD 1779 and Abdul Ghani v. Haji Saley Muhammad PLD 1960 Kar. 594 rel.

Mian Nazir Ahmed v. Abdur Rashid Qureshi 1986 CLC 1309; Ganguli Engineering Ltd. v. Smt. Sushila Bala Dasi and another AIR 1957 Cal. 103; Messrs Kadir Motors (Regd.), Rawalpindi v. Messrs National Motors Ltd., Karachi and others 1992 SCMR 1174 and T. Zubair Limited and 2 others v. Judge, Banking Court No.III, Lahore and another 2000 CLC 1405 ref.

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

----S.14---Foreign judgment---Scope---Such judgment is presumed to be pronounced by court of competent jurisdiction within the contemplation of S. 14, C.P.C.?

Muhammad Jamshid Malik for Plaintiff.

Nemo for Defendants.

2011 C L D 755

[Karachi]

Before Muhammad Tasnim, J

Messrs SONERI BANK LIMITED through Attorneys---Plaintiff

Versus

Messrs ELITE PUBLISHERS LIMITED and 3 others---Defendants

Suit No. B-9 of 2010, decided on 12th November, 2010.

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

----S. 7---Bankers' Books Evidence Act (XVIII of 1891), S.4---Statement of accounts issued by Bank using therein words "withdrawal" and "deposit" instead of "debit" and "credit"---Validity---Mere non-using of words "debit" and "credit" would not make such statement invalid.

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

----Ss. 9 & 10---Suit for recovery of loan---Leave to defend Suit, application for---Such application not showing amount of finance availed by defendant and paid to Bank with dates of payments, amount payable by defendant and facts supporting liability disputed by defendant---Validity---Defendant had not complied with provisions of S. 14(4) of Financial Institutions (Recovery of Finances) Ordinance, 1984---Defendant in a document attached with application had admitted availing of running finance---Defendant had not paid finance within stipulated period---Defendant had failed to raise any substantial question of law or facts---High Court dismissed leave application and decreed suit as prayed for.

The Central Bank of India, Ltd., Lahore v. Messrs Taj-­ud-Din Abdur Rauf and others 1992 SCMR 846; PICIC Commercial Bank Limited v. Spectrum Fisheries Limited 2006 CLD 440; Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931; United Bank Limited v, Pak, Leather Grafts Limited and 3 others 2010 CLD 701; Al-Madina Electric Store v. Habib Bank Limited 2006 CLD 734; Habib Bank Limited v. A.B.M. Graner (Pvt.) Limited and others PLD. 2001 Kar, 264; Nusrat Textile Mills Ltd. and others v. United Bank Ltd. 2005 CLD 1421; Habib Bank Limited v. Messrs Sabcos (Pvt.) Ltd, 2006 CLD 244; Bank of Khyber v. Messrs Spencer Distribution Ltd. and others 2003 CLD 1406; NIB Bank Limited v. Taha Spinning Mills Limited and others 2010 CLD 635; Askari Commercial Bank Limited v. Hilal Corporation (Pvt.) Ltd. and others 2009 CLD 588; Messrs Mach Knittrs (Pvt.) Limited and others v, Allied Bank of Pakistan Limited 2004 CLD 535; Banque Indosuez v. Jet Travels Limited and others 1991 CLC 446; National Bank of Pakistan v. Muhammad Ashraf Sanik and another PLD 1987 Lail, 17 and Khyam Films and another v. Bank of Bahawalpur Ltd. 1982 CLC 1275 ref.

Azizuddin Khan for Plaintiff.

Ms. Saman Rafat Imtiaz for Defendants Nos. 1 to 4.

2011 C LD 780

[Karachi]

Before Mushir Alam and Nisar Muhammad Shaikh, JJ

NOOR ISLAM and another---Appellants

Versus

Messrs CRESCENT LEASING CORPORATION LTD.---Respondent

Ist Appeal No. 34 of 2009, decided on 16th September, 2010.

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

----Ss. 9 & 10---Recovery of bank loan---Leave to defend the suit---Re-possession of vehicle---Defendant availed financial facility for purchase of vehicle but he failed to repay the financial facility---Application for leave to defend the suit was dismissed by Banking Court and suit was decreed in favour of Financial Institution---Plea raised by defendant was that Financial Institution had re-possessed the vehicle, therefore, leave to defend the suit should have been granted to him---Validity---Documents of re-possession filed by defendants together with such statement were scrutinized by Banking Court so also letter of Financial Institution showing that vehicle was not re-possessed by it---Banking Court came to conclusion that documents of re-possession were prepared for wrongful gain and vehicle had not been re-possessed by Financial Institution---Such finding of Banking Court was based upon sound reasons and therefore, the same did not call for interference by High Court---No serious and bona fide dispute of triable issue existed between the parties so as to get it resolved by recording evidence---Leave to defend the suit was rightly refused by Banking Court and suit was rightly decreed in favour of Financial Institution---Appeal was dismissed in circumstances.

Ch. Abdul Rasheed for Appellants.

Mrs. Samia Faiz Durrani for Respondent.

Date of hearing: 16th September, 2010.

2011 CLD 790

[Karachi]

Before Muhammad Athar Saeed and Muhammad Ali Mazhar, JJ

Messrs SHAZ PACKAGES and 3 others---Appellants

Versus

Messrs BANK ALFALAH LIMITED---Respondent

First Appeal No. 9 of 2010, decided on 24th March, 2011.

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

----S. 10---Leave to defend the suit---Banking Court---Responsibility---Documents to be appreciated---Banking Court dismissed leave to defend application filed by defendants and decreed the suit in favour of bank---Plea raised by defendants was that besides raising various preliminary objections, they had also framed questions of law but Banking Court without appreciating the same dismissed leave to defend the suit application--Validity-While deciding leave to defend application, heavy responsibility rested upon Banking Court to appreciate not only the contents of plaint but also leave to defend application and replication, if any filed---In order to pass a speaking order with sound reasoning, it was necessary to look into facts of the case and also consider documents attached with plaint, leave to defend application and replication---After going through entire pleadings of parties, it was obligatory upon Banking Court to decide question of law raised in leave to defend application and not to dismiss or reject it in perfunctory and cursory manner---In banking suit it was a sole opportunity for defendants to apply for leave to defend and their entire future rested upon its decision, therefore, in all fairness defendants had legitimate right to be heard and all questions of law and facts raised in leave to defend application should be answered by Banking Court for the reason that on rejection of leave to defend, defendants were to go out of arena without any further opportunity to defend---Judgment and decree passed by Banking Court against defendants and order dismissing leave to defend application could not be sustained and the same was set aside---High Court remanded the case to Banking Court to decide leave to defend application afresh in accordance with law---Appeal was allowed accordingly.

Messrs Kinza Fashion (Pvt.) Ltd. v. Messrs Habib Bank Ltd. 2009 CLD 1440; Messrs Haq Feed Industries (Pvt.) Limited v. National Development Finance Corporation 2007 CLD 975; Habib-ur-Rehman v. Judge Banking Court No. 4 Lahore 2006 CLD 217 and Messrs Naeem Associates v. Allied Bank of Pakistan Limited 2004 CLD 1672 rel.

Messrs Mach Knitters (Pvt.) Limited v. Allied Bank of Pakistan Limited 2004 CLC 53,5 and Muhammad Arshad v. Citibank N.A. Lahore 2006 SCMR 1347 distinguished.

Khaleeq Ahmed for Appellants.

Abdul Shakoor for Respondent.

Date of hearing: 18th January, 2011.

2011 CLD 811

[Karachi]

Before Muhammad Tasnim, J

J & P COATS LIMITED and another---Plaintiffs

Versus

Messrs GOLDEN THREAD INDUSTRIES, through Proprietor---Defendant

Suit No. 1283 and C.M.As. Nos. 8445, 9055 of 2007, decided on 12th November, 2010.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 21, 43 & 74---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Infringement of registered trade mark and passing off---Suit for damages and permanent injunction---Plaintiffs plea that defendant on its product boxes had adopted similar colour scheme, shades, number, appearance, positioning of letters, get-up, design and all essential and distinctive features of Plaintiffs trade mark, which was causing confusion amongst ordinary illiterate customers--- Interim injunction, application for--- Validity--- Boxes of defendant's products, though not carrying plaintiffs trade mark, were confusingly similar to label device of Plaintiffs boxes---Visual look on defendant's boxes reflected complete resemblance providing similarity of design, scheme, colour and get-up, by which illiterate customers would be misled for taking defendant's product as that of plaintiff---Principle of law and fair commercial trading demanded that deceptive measure should not be adopted to adversely affect good-will and recognition earned by other organizations in trading specific commodity---Defendant could not be allowed to take advantage of plaintiffs goodwill by marketing its goods in impugned boxes---Plaintiff would suffer irreparable loss in case defendant was not restrained from passing its goods as goods of plaintiff during pendency of suit---Plaintiff had made out case for grant of injunction---High Court accepted such application in circumstances.

Telephone Soap v. Messrs Lever Brothers 1994 CLC 2135; Bandenawaz Ltd. v. Registrar of Trade Marks, Karachi and another PLD 1967 Kar. 492; Seven-up Company v. Kohinoor Thread Ball Factory and 3 others PLD 1990 SC 313; Messrs Western Brand Tea, Karachi v. Messrs Tapal Tea (Pvt.) Limited Lahore and another PLD 2001 SC 14; Messers Meshran Ghee Mills (Pvt.) Limited and others v. Messrs Chiltan Ghee Mill (Pvt.) Limited and others 2001 SCMR 967; Messrs Chas A. Mendoza v. Syed Tausif Ahmed Zaidi and others PLD 1993 Kar. 790; Bashir Ahmad v. Registered Firm Hafiz Habibur Rehman and another 1980 CLC 1268: Messrs Burney's Inustrial and Commercial Co. Ltd. v. Messrs Rehman Match Works PLD 1983 Kar. 357: Abdul Jabar and another v. Ahmad Jan PLD 1973 Kar. 289; Rexona Proprietary Ltd. v. Majid Soap Works PLD 1956 Sindh 1; Akhtar and others v. Messrs Soofi Soap Factory PLJ 1973 Lah. 208: James Chadwick & Bros. Ltd. v. The National Sewing Thread Co. Ltd. AIR 1951 Bombay 147; Samreen Liaquat Malik v. Messrs Aqmar Health Foods and others 2008 CLD 1243; Sardar Tahir Mahmood v. Ikram-ul-Haq 1991 MLD 164; Muhammad Abid and others v. Nisar Ahmed. 2000 SCMR 780; Yusuf Hussain Shirazi and another v. Lt. Col. Muhammad Alam Shaikh PLD 1966 (W.P.) Kar. 472; Abdul Wasim v. Messrs. Haico and others 2001 CLD 1623; J.N. Nichols (VIMTO) PLC v. Mehran Bottlers (Private) Limited PLD 2000 Kar. 192 and Hiralal Parbhudas v. Ganesh Trading Company AIR 1984 Bombay 218 ref.

Monawwer Ghani-for Plaintiffs.

Khaleeq Ahmed for Defendant.

2011 C L D 833

[Karachi]

Before Muhammad Ali Mazhar, J

ROYAL PVC (PVT.) LTD. through Authorized Officer---Petitioner

Versus

REGISTRAR OF TRADE MARKS and another---Respondents

J.M. No. 27 of 2009, C.M.As. Nos. 2926 of 2010 and 10499 of 2009, decided on 29th December, 2010.

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

----Ss.73 & 116---Trade Mark Rules, 2004, R.68---Revoking of trade mark---Forum---Direct application before High Court---Scope---Petitioner was owner of registered trade mark in his name and filed direct application before High Court for revoking trade mark in the name of respondents---Plea raised by respondents was that direct application to High Court was not maintainable---Validity---Remedy provided under law for revocation of trade mark was forum of Registrar of Trade Mark---Direct application for revocation could only be moved to High Court in exceptional circumstances---Applicant had option under S. 116 of Trade Marks Ordinance, 2001, either to make application either before High Court or District Court or the Registrar---If any suit or proceedings concerning trademark were pending before High Court or District Court, application could be made to High Court or as the case may be the District Court---No direct application could be moved in High Court for revocation of any trade mark unless proceedings concerning trademark in question were pending before High Court---Proper mechanism and procedure for applying revocation, invalidation and rectification was provided under R.68 of Trade Mark Rules, 2004, with specific "Form T.M. 26" which was required to be filed by interested person for revocation of trade mark together with statement of grounds on which application was made---Petition was dismissed in circumstances.

Volume 1 Judicial Review of Publications page 423 by Justice (R.) Fazal Kareem and Interpretation of Statutes 7th Edition 1984 N.S. Bindra ref.

Messrs Feroze Sons Private Limited v. Dr. Col. (Retd.) K.U. Qureshi 2003 CLD 1052; Port Qasim Authority v. Official Assignee of Karachi 2007 CLD 143; Badrul Haque v. Election Tribunal, Dacca PLD 1963 SC 704; Messrs Universal Brushes Limited v. Superintendent Central Excise and Land Custom PLD 1985 Kar. 132; Malik Ghulam Mustafa Khar v. Pakistan and others PLD 1988 Lah. 49 and Karachi Pipe Mills Limited v. Sindh Labour Appellate Tribunal PLD 1984 Kar. 503 distinguished.

(b) Interpretation of statutes---

----Rule of interpretation should be in aid to discover legislative intent behind an enactment.

Pakistan Burma Shell v. Nasreen Irshad 1989 SCMR 1892 rel.

(c) Interpretation of statutes---

----Duty of court---Scope---Court is bound to act in accordance with the procedure provided by law and any deviation may result in refusal to exercise of jurisdiction or exercise of jurisdiction not vesting in court---It is duty of court to interpret the law as it stands and if possible a statute must be interpreted in such a manner as would make it workable.

(d) Interpretation of statutes---

----Redundancy---Scope---Redundancy must not be attributed to legislature and each word used in statute is to be read as integral part thereof, carrying the meaning if in the circumstances not impracticable which is assigned to it in ordinary parlance.

(e) Interpretation of statutes---

----Remedy provided in statute---Scope---Where general obligation is created by a statute and a specific statutory remedy is provided, that statutory remedy is the only remedy.

(f) Interpretation of statutes---

----General and special laws---Scope---Where legislature has in a special act laid down particular conditions for exercise of a power by court, the court is not justified in disregarding those conditions and holding by reference to a general Act that it has powers beyond those given by special Act.

Shazia Tasleem for Petitioner.

Saleem Ghulam Hussain for Respondent No. 1.

2011 C L D 847

[Karachi]

Before Syed Hasan Azhar Rizvi, J

DOLLAR INDUSTRIES (PVT.) LTD. through Abdullah Feroz and another---Plaintiffs

Versus

NISAR TRADERS through Proprietor and 7 others---Defendants

Civil Suit No. 134 and C.M.As. Nos. 495, 496 and 1572 of 2011, decided on 18th February, 2011.

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

----S. 40---Registered Designs Ordinance (XLV of 2000), S.30---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Suit for infringement of registered design---Design being used by defendant on its product alleged to be similar in all respects with registered design of plaintiff--Temporary injunction, plaintiffs application for---Validity---Plaintiffs design was duly registered with Registrar of Designs and was its lawful owner and using same since its registration---Defendant had failed to show to have imported infringed design---Both designs appeared to be similar to each other. and capable of creating confusion and deception in mind of general public---Resemblance in two designs would be sufficient to establish infringement, but similarity thereof to each other in all respects would not be necessary---Plaintiff had a prima facie case for grant of injunction---Balance of convenience was in favour of plaintiff who would suffer irreparable loss in case of refusal of injunction---Such application was accepted in circumstances.

Tajuddin v. Haji Mushtaq and another 1985 CLC 2182 ref.

Dwarkadas Dhanji Sha v. Chhotalal Ravicarandas & Co. AIR 1941 Bombay 188 rel.

(b) Registered Designs Ordinance (XLV of 2000)---

----S. 30---Design, infringement of---Proof---Resemblance in two designs would be sufficient to establish infringement, but similarity thereof to each other in all respects would not be necessary.

Dwarkadas Dhanji Sha v. Chhotalal Ravicarandas & Co. AIR 1941 Bombay 188 rel.

Abbadul Hussnain for Plaintiffs.

Muhammad Asghar for Defendant No. 1.

Saira Shaikh for Defendants Nos. 2, 7 and 8.

2011 C L D 885

[Karachi]

Before Muhammad Tasnim, J

Messrs FAISALABAD OIL REFINERY (PVT.) LTD. and others---Plaintiffs

Versus

M.T. GALAXY and others---Defendants

Adm. Suits Nos. 2, 5, 6 and 7 of 2011 and C.M.As. Nos. 5, 26, 28, 30 of 2011, decided on 18th February, 2011.

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

----Ss. 5, 4 & 3---Admiralty suit---Short landing by vessel---Action in rem and personam---Scope---Vessel as well as owner can be joined in the proceedings---Principles.

Messrs MSC Textiles (Private) Limited v. Asian Pollux and others 2007 CLD 1465 and Bangladesh Shipping Corporation v. M.V. Nedon and another PLD 1981 Kar. 246 ref.

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

----S. 4---Admiralty suit---Short landing by vessel---Action in personam--Mode of exercise of jurisdiction under S.4, Admiralty Jurisdiction of High Courts Ordinance, 1980---Scope---Precondition for invoking jurisdiction under S.4(4)(a)(b) of the Ordinance is that the person who would be liable on the claim in an action in personam, when the cause of action arose should beneficially own majority shares in the ship---Bald statement in the pleadings that the ship in question was the sister ship of offending ship or the inference that the ship was a sister ship for the reasons mentioned which were not sustainable was not sufficient to disclose a cause of action---Principles.

Lord Denning in I Congreso del Parlido [(1981)] 1 All Englan Law Reports 1092; M.V. Sea Success I v. Liver Pool and London Steamship Rotection and Indemnity Association Ltd. AIR 2002 Bombay 151; Messrs Maratos and Co. v. Trice Trader PLD 1989 Kar. 94; Global Tradeways Ltd. v. Tsavliris Russ (World Salvage & Towage) Limited and another 2004 YLR 2581 and V.N. Lakhani and Company v. M.V. Lakatoi Express PLD 1994 SC 894 ref.

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

----Ss. 3 & 4---Admiralty suit---Short landing by vessel---Application for arrest of vessel---Plaintiff had invited attention of the court to commercial invoices, bill of ladings, survey report, dry certificate after discharging, joint dip statement and letters of Chief Officers to the Master of Ship and contended that from the perusal of the documents shown it would be seen that invoices and bill of ladings show the manifested consignment and survey report revealed the short landing; that apart from survey reports short landings were further confirmed from the letters titled as "discrepancy bill of lading and ship quantity" addressed to the Master of the vessel by Chief Officer of the vessel and that short landing was also established from the perusal of joint dip statement---Defendants had not denied the genuineness of the documents produced---Held, plaintiff prima facie, had made out a case for confirmation of earlier order of arrest of the vessel---Actual quantum of loss was yet to be established by the plaintiff by leading evidence but at the present stage tentative assessment of the record suggested that plaintiff had made out a case of confirmation of orders of arrest---High Court observed that if the arrested vessel was allowed to leave the limits of the court's jurisdiction without a security, the suit shall loose its utility and may not be possible to execute the decree if any passed, as by time the suit will be finalized the vessel may sink or she may be purchased by a bona fide purchaser without notice---Applications for arrest of the vessel were allowed and the interim order passed in the suit was confirmed.

Mazhar Imtiaz Lari for Plaintiff (in Adm. Suits Nos. 2, 5, 6 and 7 of 2011).

Khalid A. Rehman for Defendants Nos. 1 to 4 (in Admin Suits Nos. 2, 5, 6 and 7 of 2011).

2011 CLD 931

[Karachi]

Before Mushir Alam, C.J., and Syed Hasan Azhar Rizvi, J

UNITED BANK LIMITED---Petitioner

Versus

PRESIDING OFFICER, BANKING COURT NO.2, KARACHI and 6 others---Respondents

Constitutional Petition No. D-1716 of 2010, decided on 7th April, 2011.

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

----Ss. 10, 11 & 27---Constitution of Pakistan, Art. 199---Constitutional petition---Suit for recovery of finance---Application for leave to defend suit---Plaintiffs claim partly admitted by defendant in such application--Acceptance of leave application by Banking Court without passing interim decree for admitted amount---Validity---When dispute between parties did not extend to whole claim of finance, then Banking Court while granting leave to defend with respect to disputed amount would be bound to pass interim decree in respect of such part of claim appeared to be payable by defendant to plaintiff-No appeal or constitutional petition against interlocutory order was provided under applicable law---High Court in exercise of constitutional jurisdiction had power to correct wrong particularly when no efficacious remedy under applicable law was available to aggrieved party---High Court directed Banking Court to pass preliminary decree for amount admitted by defendant.

Sheikh Abdul Sattar Lasi and another v. Judge Banking Court and 3 others 2007 CLD 69; Trimbak Gangadhar Telang and others v. Ramchandra Ganesh Bhide and others AIR 1977 SC 1222; Messrs First Women Bank Limited and another v. Judge (Banking Court), Sindh High Court Karchi 2002 MLD 1655; Syed Saghir Ahmed Naqvi v. Province of Sindh and another 1996 SCMR 1165 and Abdul Majid v. Syed Muhammad Ali Shamim and 10 others 2000 SCMR 1391 ref.

(b) Constitution of Pakistan---

---Art. 199---Constitutional petition against interim order not appealable under relevant statute---Maintainability---High Court had power to correct wrong particularly in case of non-availability of efficacious remedy to aggrieved person under applicable statute---Principles.

Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881 rel.

Ijaz Ahmed for Petitioner.

Asghar Bangash for Respondents.

Date of hearing: 11th March, 2011.

2011 C L D 944

[Karachi]

Before Syed Hasan Azhar Rizvi, J

LIBERTY MILLS LIMITED AND LIBERTY ENERGY (PRIVATE) LIMITED: In the matter of

J.M. Application No. 30 of 2010, decided on 8th February, 2011, Companies Ordinance (XLVII of 1984)---

----Ss. 284 & 287---Merger of companies---Petition to obtain sanction of the court for merger---Members of the petitioners companies had unanimously approved the resolution of the merger of two companies---Neither the employees of both companies nor of the creditors thereof had come forward to oppose the scheme of arrangement for merger---Law Officer of Securities and Exchange Commission of Pakistan, present in court, had recorded his 'no objection' for merger---Nothing was on record, to suggest that proposed merger would be against public interest or in violation of any law---Petition, in circumstances, was allowed as prayed for and amalgamation/scheme of arrangement was sanctioned.

Khalid Latif for Petitioners.

Syed Imran Shamsi, Law Officer of SECP is present in Court.

2011 C L D 952

[Karachi]

Before Qasim Iqbal and Syed Mehmood Alam Rizvi, JJ

SAJJAD ASLAM GONDAL---Appellant

Versus

MUHAMMAD ASHRAF GONDAL and another---Respondents

High Court Appeal No. 62 of 2008, decided on 24th March, 2008.

Negotiable Instruments Act (XXVI of 1881)---

----S. 4---Civil Procedure Code (V of 1908), O. XXXVII, Rr.1, 2 & S. 9--- Recovery suit--- Maintainability--- Promissory note--- Scope--- 'Promissory note' and 'agreement'---Distinction---Non-mentioning of amount in instrument---Plaintiff filed suit for recovery of money under O.XXXVII, Rr.1 and 2 C.P.C. but office objection was maintained by Judge in Chambers of High Court and suit was declared to be not maintainable under summery jurisdiction---Validity---Whether an instrument was a 'promissory note' or not should be judged by words used, which depended upon circumstances and wording in each case---Whether a document was a promissory note or an agreement, one of the tests to be applied to find the same was intention of parties---Second test was whether document as drawn out could be said to be negotiable, that was to say, could a third person file suit on the strength of that document, if he could not, then it was mere an agreement---In alleged 'promissory note', amount for payment was not specified, therefore, there was no acknowledgement of liability, thus it was not a 'promissory note'---Central point in 'promissory note' was that it was an instrument containing and undertaking to pay money to another---Promissory note must state certain sum of money as payable under it and any instrument which did not state definite sum was not promissory note---Order passed by Judge in Chambers of High Court required interference as plaintiff's suit should be treated as long cause suit and would be proceeded in ordinary jurisdiction under S. 9 C.P.C.--Appeal was dismissed accordingly.

PLD 1965 SC 634; AIR 1926 Nag. 194; AIR 1925 Oudh 560; AIR 1951 Ajm. 71 and AIR 1957 Rajas. 360 ref.

Minhaj Farooqui for Appellant.

2011CLD 959

[Karachi]

Before Syed Hasan Azhar Rizvi, J

CITIBANK N.A.---Plaintiff

Versus

ABDULLAH APPARELS (PVT.) LIMITED and 2 others---Defendants

Suit No. B-117 and C.M.As. Nos. 1090, 10290 of 2010, decided on 11th February, 2011.

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

----Ss.9 & 10---Application for leave to defend, dismissed for non-prosecution---Effect---Application for leave to defend having been dismissed, therefore, in view of S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001, suit was decreed against defendant in circumstances.

Ajaz Ahmed for the Plaintiff.

Nemo for Defendants.

2011 CLD 976

[Karachi]

Before Ms. Rukhsana Ahmed, J

ROYAL BANK OF SCOTLAND LTD. through Paper Market Road Branch, Karachi---Plaintiff

Versus

SAEED ABBAS---Defendant

Suit No. B-75 and C.M.A. No. 7832 of 2009, decided on 28th October, 2010.

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

----Ss. 9 & 10---Suit for recovery of loan amount---Leave to defend suit, application for---Loan obtained from Bank 'P' having merged into another Bank 'A' which also merged in another Bank 'S' (plaintiff Bank)---Suit filed by plaintiff through a person holding Power of Attorney from Bank 'A'---Plea of defendant claiming to be customer of Bank 'P' that plaintiff Bank had filed suit without resolution of its Board of Directors-Validity--All liabilities, interests and accounts of Bank 'P' after its merger into Bank 'A' and then merger of Bank 'A' into plaintiff-Bank stood transferred to latter---Obligations and liabilities owned by defendant to Bank . 'P' under Finance Agreement as result of is merger into Bank 'A' and then merger of Bank 'A' into plaintiff Bank stood transferred to plaintiff Bank---Such mergers published in widely circulated newspapers had taken place with approval of State Bank and Ministry of Finance---Defendant had admitted execution of documents in favour of Bank 'P' and Bank 'A'---Payments made by defendant were not supported by documentary evidence---Defendant in leave application had not raised any substantial question of law and fact---Defendant while filing leave application had not complied with mandatory requirements of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court dismissed leave application in circumstances.

Jam Asif Mehmood for Plaintiff.

S. Hassan Ali for Defendant.

2011 C L D 988

[Karachi]

Before Sarmad Jalal Osmany and Salman Hamid, JJ

SIKANDER DADA---Petitioner

Versus

ENVIRONMENTAL PROTECTION TRIBUNAL, SINDH and 2 others---Respondents

Constitutional Petition No. D-1250 of 2010, decided on 2nd December, 2010.

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

----S. 18--- Constitution of Pakistan, Art. 199---Constitutional petition---Pendency of complaint against company Tribunal---Application by Chief Executive of company for granting him exemption from personal appearance before Tribunal---Complainant's objection that for offence alleged in complaint to have been committed by company, only its Chief Executive was liable to be prosecuted, thus, he was not entitled to such exemption---Dismissal of such application by Tribunal---Validity---High Court with consent of parties granted such exemption till framing of charge against company, if any, whereafter its Chief Executive would be bound to appear before Tribunal till giving of decision in complaint.

Jam Asif Mehmood for Petitioner.

Umer Hayat Sandhu, D.A.-G.

M. Sarwar Khan, Additional A.-G. Sindh.

Hussain Bux Saryo for Respondent No. 3.

2011 C L D 995

[Karachi]

Before Muhammad Athar Saeed and Munib Akhtar, JJ

Messrs SHAHI TEXTILES and 3 others---Appellants

Versus

ASKARI BANK LIMITED through President---Respondent

Spl. HCA No. 167 and C.M.A. No. 1598 of 2010, decided on 13th December, 2010.

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

----Ss. 9 & 10(2)---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.10(1)---Banking Companies (Recovery of Loans) Ordinance (XIX of 1979), S.7(2)---General Clauses Act (X of 1897), S.9---Civil Procedure Code (V of 1908), Appendix B, Form No.4---Suit for recovery---Single Judge of High Court dismissed defendant's application for leave to defend for being time-barred and subsequently decreed the suit---Contention of defendant was that the day on which summons was served had to be excluded while computing the period of limitation---Plaintiff contended that word 'of, and not word from' having been used in S.10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, S.9 of the General Clauses Act, 1897 was not applicable, therefore, the day of service of summons could not be excluded while computing the period of limitation---Validity---Under Banking Companies (Recovery of Loans) Ordinance, 1979 and the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, day of service of summons was excluded from consideration---Form No.4 of Appendix 'B' of the C.P.C. as adapted for use under Financial Institutions (Recovery of Finances) Ordinance, 2001 required defendant to obtain leave from the court within 30 days from the service of summons---Section 9 of the General Clauses Act, 1897 provided for exclusion of the first day in a series of days or any other period of time---Absence of word from' would not mean that the first day would be included---General Clauses Act, 1897 did not provide for inclusion of the first day where word 'of had been used---Inclusion or exclusion of the first day would be determined by the contents of statutory provision---Under S.10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the day on which summons was served would be excluded---Section 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 provided for specific form of summons which used the word from'---Section 10(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was applicable where service was effected by a summons in the form prescribed by S.9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Inclusion of day of service on the basis of a summons which allowed defendant to file leave to defend within 30 days from' service would be most inequitable---Conjoint reading of the provision of Ss.9(5) and 10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 suggested that day of the service of summons had to be excluded from consideration---Section 10(2) did not expressly provide for exclusion of the day of service while computing the period of limitation---Where such inclusion could have a penalizing effect of debarring the defendant from appearing in the suit, interpretation which excluded the day of service should be preferred---Provisions relating to limitation should be construed to preserve the rights of parties unless relevant statutory language was clear and connoted only one meaning---Leave to defend was held to have been filed within time---Appeal was allowed and case was remanded to the Single Judge to be decided on merit.?

(b) General Clauses Act (X of 1897)---

----S. 9---Scope of S.9, General Clauses Act, 1897---Section 9 of the General Clauses Act, 1897 provided for exclusion of the first day in a series of days or any other period of time--Absence of word from' would not mean that the first day would be included---General Clauses Act, 1897 did not provide for inclusion of the first day where word 'of had been used.?

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

----S. 10(2)---Scope and application of S.10(2), Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S.10(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 the day on which summons was served would be excluded---Section 10(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was applicable where service was effected by a summons in the form prescribed by S.9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001.?

Qureshi Salt and Spice Industries and another v. Muslim Commercial Bank Ltd. 1999 SCMR 2353 ref.

National Bank of Pakistan v. West Pakistan Tank Terminal (Pvt.) Ltd. 2000 CLC 896 distinguished.

Makhanlal Roy Pramanick and others v. Pramathanath Basu and others AIR 1953 Cal. 50, 52 rel.

Asghar Bangush for Appellants.

Waleed Khanzada for Respondent.

2011 C L D 1003

[Karachi]

Before Muhammad Tasnim, J

Messrs HABIB BANK LTD.---Plaintiff

Versus

Messrs UNIVERSAL CARGO SERVICES (PVT.) LTD. and 6 others---Defendants

Suit No. B-51 of 2007, decided on 26th January, 2011.

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

----Ss. 9 & 10---Suit for recovery of bank loan---Leave to defend suit, application for---Availing of finance facility and execution of documents by defendant not denied---Such application not filed in conformity with provisions of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Filing of copy of ledger maintained by defendant containing debit and credit entries in rebuttal of statement of accounts filed by Bank showing break-up of outstanding amount---Validity---Defendant had admitted availing of loan facility and execution of documents---Defendant had not Pointed any unauthorized entry of charges in such break-up claim filed by Bank---Such break-up showed amount availed and payments made by defendant and mark-up accrued thereon---High Court dismissed leave application and decreed the suit in circumstances.

Badar Alam for Plaintiff.

Nemo for Defendants.

Date of hearing: 20th January, 2011.

2011 C L D 1008

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

SAEED QURESHI---Appellant

Versus

Mrs. SURRIYA AFZAL and others---Respondents

High Court Appeal No. 44 of 2010, decided on 28th February, 2011.

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

----S. 39---Suit for cancellation of document and recovery of Rs.5,00,000 as damages---Suit plot owned by plaintiff sought by first defendant to be mutated illegally in his favour on basis of forged and fake title document prepared with connivance of second defendant---Registration of criminal case and filing of such suit by plaintiff against defendants---Cancellation of such document by Trial Court finding same to be fabricated and decreeing damages of Rs. 10,00,000 and 2,50,000 against first and second defendants respectively---Appeal by second defendant only against such decree challenging its validity to extent of imposition of such damages and not cancellation of document---Plea that such damages could not be awarded in absence of proper quantification thereof in plaint---Validity---Compensation for damages sought in such cases has to be quantified and some nexus had to be established between claim and person sued therefor---Plaintiff had made a scanty and vague prayer in plaint without quantifying amount claimed as damages against first defendant---Trial Court while awarding impugned damages had not given basis as to how such amount had been quantified---High Court set aside impugned decree to the extent of impugned damages in circumstances.

Abdul Wahab Abbasi v. Gui Muhammad Hajano 2008 CLD 1230; Sufi Muhammad Ishaq v. The Metropolitan Corporation, Lahore PLD 1996 SC 737 and Muhammad Sharif v. Nawab Din PLD 1957 WP (Lah.) 283 ref.

Abdul Wahab Abbasi v. Gul Muhammad Hajano 2008 CLD 1230 rel.

(b) Tort---

----Damages, determination of---Scope---Factors essential to be considered would be quantification of amount of damages in plaint and establishment of nexus between such claim and person sued therefor---Principles.

Where compensation for damages is being sought, the same has to be quantified as well as some nexus has to be established between the claim and the person against whom such amount is being claimed.

Exact amount of damages cannot be determined, but the person making a claim against any other person has to substantiate his claim with cogent material in respect of the amount claimed as damages against the said person. No vague and unreasonable amount can be claimed, but the amount so claimed should be reasonable, which depends upon the facts of each case and no universal rule or rule of thumb can be applied in this regard.

Sufi Muhammad lshaq v. The Metropolitan Corporation Lahore PLD 1996 SC 737 rel.

Mehmood Habibullah for Appellant.

Tassawar AlI Hashmi for Respondent No. 1.

Nemo for other Respondents.

Date of hearing: 25th February, 2011.

2011 CLD 1013

[Karachi]

Before Ahmed Ali Shaikh and Salman Hamid, JJ

NATIONAL BANK OF PAKISTAN through Attorney---Appellant

Versus

SANAULLAH and others---Respondents

Criminal Banking Appeals Nos. 1 to 7 of 2011, decided on 3rd February, 2011.

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

----Ss. 20 & 9---Default in payment of finance---Criminal complaint---Provisions of S.20 of Financial Institutions (Recovery of Finances) Ordinance, 2001, relating to certain offences, would be enforced by a Financial Institution against a person, who dishonestly committed a breach of terms of security documents to his advantage; and to the detriment of the Financial Institution; or who made fraudulent misrepresentation or committed a breach of an obligation; or representation made to a financial institution on the basis of which, the financial institution had granted a finance etc.---Respondents who had allegedly committed default in payment of finance; would not fall in any of the contingencies available in S.20 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Criminal complaints preferred by Bank against the respondents, were misconceived, in circumstances--Impugned order which was passed by the Banking Court in criminal case was just and proper and required no interference by High Court---Proper remedy which was available to the bank was under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001 which provided for institution of banking suit by bank against person who committed default in repayment of loan/finance.

Nemo for Appellant.

2011 CLD 1018

[Karachi]

Before Mushir Alam, C.J. and Syed Hasan Azhar Rizvi, J

Mst. SAFIA BEGUM through Attorney and 2 others---Petitioners

Versus

STATE BANK OF PAKISTAN through Governor and 3 others---Respondents

Constitutional Petition No. D-2389 and Miscellaneous No.11961 of 2009, decided on 10th May, 2011.

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

----Ss. 3, 17 & 22---Companies Ordinance, (XLVII of 1984), S. 290--- Constitution of Pakistan, Art. 199---Constitutional petition---Order of High Court dated 18-4-2001 passed in liquidation proceedings to wind up plaintiff Bank for being unable to pay its debts---Subsequent suits filed by plaintiff--Bank in year 2000 for recovery of finance availed by petitioners/mortgagors--Non-filing of appeal against decrees dated 2-12-2002 and 13-2-2008 passed against petitioners by Banking Court---Statement filed before Liquidator by plaintiff Bank showing its cost of funds fixed by State Bank of Pakistan w.e.f. 31-8-2001 on basis of annual financial statement for year 2007---Petitioners plea that State Bank had acted illegally and in excess of jurisdiction in fixing such cost of funds of plaintiff having retrospective effect from year 1999 in absence of its annual audited accounts of each year since promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001 on 31-8-2001---Validity---Bank after passing order of its winding up had filed suits against petitioners and consequent thereto two decrees had been passed against them on 2-12-2002 and 28-5-2003---Decree dated 28-5-2003 was later on modified on 13-2-2008 with cosent of parties allowing cost of funds to plaintiff from the date of promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001 till realization of decretal amount---Petitioners despite having an alternative and efficacious remedy under law had not challenged such decrees or orders before competent forum---Allegations levelled against Bank would require recording of evidence, which could not be done in Constitutional jurisdiction---State Bank had not committed any illegality in calculating cost of funds of plaintiff Bank on basis of its last available audited accounts for year 2007 as plaintiff was under liquidation since year 2000---Petitioner had no case on merits---High Court dismissed constitutional petition for being not maintainable in circumstances.

Wealth Tax Officer and another v. Shaukat Afzal and 4 others 1993 SCMR 1810 rel.

(b) Constitution of Pakistan---

----Art. 199---Constitutional petition containing allegations requiring recording of evidence---Maintainability---Such controversy could not be entertained in Constitutional jurisdiction for its scope being very limited.

Badar Alam for the Petitioners.

Hassan Akber for the Respondents Nos. 1 and 2.

Muhammad Ali Hakro for Respondent No. 4.

2011 C L D 1029

[Karachi]

Before Syed Hasan Azhar Rizvi, J

SALEH MUNAWAR---Petitioner

Versus

SHAHNAWAZ MUNAWAR and 3 others---Respondents

Judicial Miscellaneous No. 27 of 2009, decided on 17th March, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss.7, 9 & 162---Register, rectification of---Fraud and forgery---Petitioner owned shares of company in question and alleged that his name was deleted from register fraudulently---Validity---Commission of fraud was apparent as no documentary evidence regarding resignation of petitioner from CEO/ Directorship of the company and transfer of shares had been produced by respondents before High Court or before Security and Exchange Commission of Pakistan---At belated stage, the respondents tried to fill lacuna by producing photocopies of documents regarding resignation by filing a prayerless application and had enclosed photocopies of alleged resignation and resolution both dated 30-8-2003, but the same were never filed along with objections to petition filed by respondents on 27-10-2009---Security and Exchange Commission also did not produce such documents before High Court---Petitioner categorically stated in his counter affidavit that photocopies of such documents were forged---Respondents failed to bring any document whereby petitioner had transferred his shares in the name of one of the respondents---No personal affidavit of transferee respondent in that respect was filed in High Court that he had paid the amount to petitioner or his son---Petition was allowed in circumstances.

Lahore Race Club v. Raja Khushbakht-ur-Rehman PLD 2008 SC 707; Manzoor Ahmad Bhatti and 4 others v. Haji Noval Khan and 5 others 1986 CLC 2560 and 2003 CLD 1429 ref.

Tasawar Ali Hashmi for Petitioner.

Habibullah Jatoi for Respondent.

Syed Imran Shamsi, Assistant Director Law SECP.

Osama Ahmed Osmani, Assistant Registrar Companies SECP.

Date of hearing: 7th February, 2011.

2011 C L D 1056

[Karachi]

Before Munib Akhtar and Muhammad Athar Saeed, JJ

HOUSE BUILDING FINANCE CORPORATION LTD. through Manager Law---Appellant

Versus

VTH BANKING COURT AT KARACHI and another---Respondents

Ist Appeals Nos. 80 to 91 of 2010, decided on 29th November, 2010.

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

----Ss. 7 & 22--- Appeal--- Limitation--- Condonation of delay---Connected appeals which were being disposed of and reasons given for seeking condonation of delay in time-barred appeals were cogent, delay could be condoned in case of time-barred appeals, and all appeals disposed of in terms of the orders made in respect of the appeals which were within time.

Commissioner of Income Tax v. Media Network and others PLD 2006 SC 787 fol.

Khalid Mahmood Siddiqui for Appellant.

Date of hearing: 29th November, 2010.

2011 CLD 1062

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

TAHIR ANEES---Appellant

Versus

Messrs CITI BANK N.A.---Respondent

Ist Appeal No. 39 of 2009, decided on 9th April, 2011.

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

----Ss. 7 & 22--Appellant who had defaulted in making the stipulated payment had made request simpliciter that the mark-up amount may be substantially reduced keeping in view the hardship faced by him---Validity---Whenever a person defaulted in fulfilling his legal and financial obligations, the Bank or the Financial Institution was entitled to receive and recover the amount from the person---Decisions are made by looking at the facts and circumstances of the case---Where no justifiable reason had been pointed out to disturb the order passed by the Banking Court, no relief could be granted on compassionate grounds alone.

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

----S. 9---Suit for recovery of amount---Merely for the reason that copies of power of attorney were filed subsequently by the Bank will not make the suit incompetent---Even if the plaint was not competently filed, such an anomaly could be rectified subsequently.

Habib Bank Ltd. v. Messrs ESS EMM ESS Corporation Pakistan Ltd. and 5 others 2005 CLD 854 ref.

Samsan Ali Raza for Appellant.

Khalid Mehmood Siddiqui for Respondent.

Date of hearing: 1st April, 2011.

2011 CLD 1072

[Karachi]

Before Muhammad Tasnim, J

Mirza GHULAM MUJTABA and another---Plaintiffs

Versus

KASB BANK LIMITED---Defendant

Suit No. B-143 of 2009, decided on 15th December, 2010.

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

----Ss.9 & 10---Suit for recovery of damages by customer---Application for grant of leave to defend suit by Bank---Bank's plea that claimed damages could not be granted without recording evidence of parties---Validity---High Court with parties' consent granted such application unconditionally.

Habib-ur-Rehman for Plaintiffs.

Saim Hashmi, Jam Asif Mehmood and Behzad Haider for Defendant.

2011 C L D 1082

[Karachi]

Before Muhammad Athar Saeed, J

PETROMARK (PRIVATE) LIMITED---Appellant

Versus

REGISTRAR OF TRADE MARKS and another---Respondents

M.A. No. 303 of 2003, decided on 24th November, 2005.

Trade Marks Act (V of 1940)---

----Ss.15 & 76---Registration of trade mark---Notice of opposition---Limitation---Contention of appellant was that after the entire opposition was dismissed as being time barred, the Registrar could not order respondent's application to proceed to registration with disclaimer of E4---Validity---Authorities were not justified in ordering respondent's application to proceed to registration with disclaimer of E4 as no such disclaimer was ordered by Deputy Registrar, against whose order the opponent had filed opposition---Order passed by Registrar could not be sustained and, therefore, his order was set aside to the extent of disclaimer of E4 and order of Deputy Registrar on the point was restored---Appeal was disposed of accordingly.

B.S. Industries v. The Deputy Registrar, Trademarks and another PLD 1969 Dacca 451 rel.

Salim G. Merchant for Appellant.

Nemo for Respondent.

Date of hearing: 24th November, 2005.

2011CLD1095

[Karachi]

Before Salman Hamid, J

ADDITIONAL REGISTRAR OF COMPANIES----Petitioner

Versus

KARIM SILK MILLS LIMITED---Respondent

J.M. No. 37 of 2007, decided on 3rd January, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 305---Winding up of company---Company could not be treated as a dead unit during winding up proceedings.

Grindlays Bank Ltd. v. Muree Brewery Co. Ltd. PLD 1954 Lah. 745 and Siddique Muhammad Malik and 4 others v. Immad Ifthikhat Malik and others 2000 CLC 477 ref.

Ijaz Ahmed for Petitioner.

Salimuzzaman for Respondent, Date of hearing: 13th December, 2010.

2011 CLD 1119

[Karachi]

Before Mushir Alam, C.J. and Muhammad Ali Mazhar, J

DADEX ETERNIT LIMITED---Petitioner

Versus

Syed HAROON AHMED and others---Respondents

C.P. No. D-2059 of 2010, decided on 9th March, 2011.

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

----Ss. 21 & 24---Jurisdiction of Environmental Tribunal and Environmental Magistrate---Scope---Substance of allegations and charges made in complaint and not its nomenclature or title would govern such jurisdiction in a matter---Mis-quoting any provision of law would not affect merits of complaint, provided same was cognizable under different provisions.

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

----Ss. 11 to 14, 16, 17 & 23---Constitution of Pakistan Art. 199---Constitutional petition---Complaint---PVC Pipes manufacturing factory (petitioner)---Generation of highly hazardous air polluting waste known as "asbestos" from production of PVC pipes spreading within radius of 15 miles of factory and causing various types of cancers amongst residents of area including death of complainant's brother---Report of Environmental Protection Authority not found to be comprehensive by Environmental Tribunal---Order of Tribunal finding such matter to be of technical nature directed for constitution of commission to carry out environmental audit and directed petitioner to prepare Environmental Management Plan through reputable environmental consultants to address on environmental issues---Validity---Complainant had not alleged in the complaint that the petitioner was using any hazardous substance with or without a valid licence---Complainant had lodged complaint against hazardous waste and sought direction in public interest against petitioner to clean asbestos from the area and take preventive measures and pay damages for death of his brother---Such matter was exclusively triable by the Tribunal---Tribunal constituted under special law was legally obliged to examine environmental issue before passing any final order---Impugned order, whereby Tribunal had decided to conduct an inquiry into allegations made in complaint, was not a final order and appealable under Pakistan Environmental Protection Act, 1997--Impugned order was not prejudicial to interest of petitioner---Tribunal while passing impugned order had not committed any illegality or jurisdictional error---Setting aside of such interim order in constitutional jurisdiction would tantamount to negating provisions of relevant statute not providing for an appeal thereagainst---Setting aside of impugned order at such premature stage would amount to strangulate and stifling spirit and scope of Pakistan Environmental Protection Act, 1997 promulgated in larger public interest---High Court dismissed constitutional petition in limine.

Nasir Abdul Qadir v. The State and others 2003 SCMR 472; Allah Din and others v. The State and another 1994 SCMR 717; Malik Muhammad Hasan v. Assistant Commissioner, Quetta and others 1987 CLC 182 and Digital Radio Paging Limited v. Pakistan Industrial Credit and Investment Corporation and others 2003 CLD 1612 ref.

Anjum Irfan v. LDA and others PLD 2002 Lah. 555; Sheri C.B.E. v. Government of Pakistan and others 2007 CLD 783; Ms. Shehla Zia and others v. WAPDA PLD 1994 SC 693: Muhammad Iftikhar Mohmand v. Javed Muhammad and others 1998 SCMR 328; Ms. Afshan Ahmed v. Messrs Habih Bank Limited and another 2002 CLD 137; Syed Ali Azhar Naqvi v. The Government of Pakistan and others PLD 1994 Kar. 67; Ardeshir Cowasjee and others v. Sindh Province and others 2004 CLC 1353 and Khalid Mamood v. Collector of Customs 1996 SCMR 1881 rel.

(c) Constitution of Pakistan---

----Art. 199 ---Constitutional petition---Interlocutory order not appealable under relevant law---Constitutional jurisdiction of High Court to set aside such order--Scope---Duty of court not to act in a manner by which object of a statute would be defeated and rendered nugatory---Setting aside of such order in constitutional jurisdiction would tantamount to negating provision of relevant statute not providing for an appeal thereagainst---Principles.

Muhammad Iftikhar Mohmand v. Javed Muhammad and others 1998 SCMR 328: Ms. Afshan Ahmed v. Messrs Habib Bank Limited and another 2002 CLD 137; Syed Ali Azhar Naqvi v. The Government of Pakistan and others PLD 1994 Kar. 67; Ardeshir Cowasjee and others v. Sindh Province and others 2004 CLC 1353 and Khalid Mamood v. Collector of Customs 1996 SCMR 1881 rel.

M. Jamshed Malik for. Petitioner.

Qazi Abdul Hameed Siddiqui and Hussain Bakhsh Saryo for Respondent No. 1.

Mian Khan Malik and Nazar Akbar, D.A.-G.

Abdul Maroof, Deputy District Public Prosecutor for Respondent No. 2.

Adnan Karim. Additional Advocate-General, Sindh.

Dates of hearings: 29th July, 2010 and 21st February, 2011.

2011 CLD 1144

[Karachi]

Before Gulzar Ahmed and Shahid Anwar Bajwa, JJ

S.M.E., LEASING LIMITED---Appellant

Versus

Messrs UMAR KNITTING and 2 others---Respondents

First Appeal No. 4 of 2010, decided on 21st April, 2011.

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

----S. 9---Limitation Act (IX of 1908), S. 19 & Art. 50---Suit for recovery of loan amount---Limitation---Loan amount being payable in instalments by defendant---Statement of accounts showing last deposit of instalment by defendant on 19-3-2005---Suit filed on 14-11-2008 for recovery of outstanding dues dismissed by Banking Court for being time barred---Plaintiffs plea that through letter dated 19-7-2006 filed along with plaint, defendant had acknowledged his liability by stating that he would clear plaintiffs dues by selling merchandise, thus, such letter amounted to acknowledgement in terms of S. 19 of Limitation Act, 1908, and suit filed within three years thereof was within time---Validity---Relationship of banker and customer existed between the parties---Defendant in said letter, had not only admitted to have obtained finance facility, but had undertaken to clear outstanding dues by selling merchandise---Such letter was an acknowledgement of his liability by defendant towards plaintiff giving rise to fresh period of limitation in terms of S. 19 of Limitation Act, 1908---Suit was not time barred---Impugned order suffered from grave misreading of record---High Court set aside impugned order and remanded case to Banking Court for its decision afresh.

Hukumat Sing Kundanmal v. Nenumal Bejhumal AIR 1928 Sind 45; United Bank Limited, Stock Exchange Branch, Lahore v. S. Khalid Hakeem 2002 CLD 1275; Pakistan Industrial Credit and Investment Corporation Limited v. Arif Noor 2009 CLD 1428; Sualeh Sons (Private) Limited v. Karachi Development Authority 1997 CLC 893; Behlol v. Quetta Municipal Corporation 1997 SCMR 536 and Syed Muhammad Rafiq Shah v. Syed Fida Hussain Shah 2003 MLD 966 ref.

Harchandrai v. The Popular Metal Works, Gujranwala and 2 others PLD 1971 Kar. 925 and Pakistan v. Messrs Ameejee Valeejee and sons and another PLD 1978 Kar. 244 rel.

Abdul, Shakoor for Appellant.

K.A. Vaswani for Respondents.

Date of hearing: 21st April, 2011.

2011 C L D 1157

[Karachi]

Before Salman Hamid, J

ABDUL QAYOOM---Applicant

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and 3 others---Respondents

Civil Revision No. 16 of 2010, decided on 31st January, 2011.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 121 & 122---Civil Procedure Code (V of 1908), S.115---Specific Relief Act (I of 1877), S. 42---Suit for declaration, settlement of accounts and damages filed by insurer in June 2009 against Insurance Company---Return of plaint by Senior Civil Judge and then by Additional District Judge for want of jurisdiction---Validity---According to S. 122(3) of Insurance Ordinance, 2000, no court other than a Insurance Tribunal would have jurisdiction with respect to matter falling under Insurance Ordinance, 2000---According to Circular No.15 of 2006 issued by Security Exchange Commission of Pakistan, Federal Government in consultation with the Commission and Chief Justices of all High Courts had conferred powers of Insurance Tribunals on District and Sessions Judges in each Province---Cases emanating from insurance policies or regarding insurance claims could be entertained only by Insurance Tribunal and jurisdiction of all other courts including Civil Courts was expressly barred---Such bar was operative when plaintiff filed suit before Senior Civil Judge---Senior Civil Judge and Additional District Judge have rightly refused to entertain suit---Courts below had refrained from exercising jurisdiction not vested with them by law and in passing impugned orders had not committed any jurisdictional error---Plaint4f was not competent to invoke revisional jurisdiction of High Court-- Revision petition was dismissed in circumstances.

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

----S. 115---Provisions of S. 115, C.P.C., applicability of---Scope---Conclusion of law or fact not affecting jurisdiction of court below would not attract S. 115, C.P.C.-Principles.

Provisions of section 115, C.P.C., are applicable only in those cases, which involve illegal assumption, non-exercise or the irregular exercise of the jurisdiction and would not be available against conclusion of law or fact, which do not in any way affect the jurisdiction of the court.

Noshad Ali Tagar for Applicant.

Nemo for Respondents Nos. 1 to 4.

Date of hearing: 21st January, 2011.

2011 CLD 1171

[Karachi]

Before Mushir Alam, C.J. and Salman Hamid, J

ARSHAD SALEEM -Appellant

Versus

CIVIL AVIATION AUTHORITY through Airport Manager and another---Respondents

H.C.A. No. 178 of 2008, decided on 18th May, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 111---Civil Procedure Code (V of 1908), S.12(2)---Law Reforms Ordinance (XII of 1972), S.3---Liability of Director of the company---Setting aside ex parte judgment on ground of fraud and misrepresentation---Authority entered into an agreement with company for installation of the advertisement and hoardings on terms and conditions agreed between the parties---Said transactions were signed and executed by the appellant, who was Director of the company---Suit filed by the Authority against the company was decreed---When execution proceedings against the company proceeded, the appellant who was the Director of the company, when learnt about the ex parte judgment and decree, filed application under S. 12(2), C.P.C. stating therein that he was a paid Director of the company and not shareholder and had no liability---High Court in consideration of the fact that service was effected and there being business relationship between the appellant and the company, the Corporation/plaintiff could not be deprived of the fruit of the judgment and decree---Appellant being merely a paid Director of the company could not be held liable for the acts and deeds of the company as the company was a separate and distinct legal entity from its shareholders and Directors---Any liability against the company could not be foisted, unless it was shown that Directors or shareholders had assumed any responsibility to discharge such liability in terms of S.111 of the Companies Ordinance, 1984---impugned order was reversed, application under S.12(2), C.P.C. was granted and judgment and decree against the appellant was set aside.

2001 YLR 526; 2006 CLD 191 and PLD 2000 Lah. 414 ref.

Naseer Hussain Jafri for Appellant.

Sanaullah Qamar for Respondent No.1.

Nemo for Respondent No.2.

Date of hearing: 18th May, 2011.

2011 C L D 1186

[Karachi]

Before Maqbool Baqar, J

ASKARI LEASING LIMITED---Plaintiff

Versus

SHER BAHADUR and others---Defendant

Suit No. B-22 of 2008, decided on 14th September, 2010.

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

----S. 10---Suit for recovery of funds---Application for leave to defend suit belatedly filed was dismissed for non-prosecution as no one appeared for the defendants on five dates--Application for leave to defend, however, did not reveal any substantial defence, the only objection that was raised was that the leased vehicles, taken in possession by the Leasing Company (plaintiff), were sold at throw away prices and thus the plaintiffs dues could not be satisfied fully---Plaintiff Leasing Company had stated that vehicles were sold through public auction and the notice of such auction was published in two leading daily newspapers---Suit was decreed, in circumstances.

Jam Asif Mahmood for the Plaintiff.

2011 C L D 1196

[Karachi]

Before Munib Akhtar, J

A. KHALID ANSARI---Plaintiff

Versus

Mir SHAKIL UR RAHMAN---Defendant

Suit No.952 and C.M.A. No.12872 of 2010, decided on 20th May, 2011.

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

----O. VII, R.11(a) & O.XXIX, R.1---Suit against Director of company for recovery of money for work done for registered company---Maintainability---Plea of plaintiff was that defendant was holding majority shares in the company, while remaining shares thereof had been distributed amongst his own kin and kiths, thus, suit was maintainable---Validity---Facts stated in plaint for purposes of O.VII; R.11, C.P.C. must be assumed to be true---Documents annexed with plaint showing suit claim to be against company---Liability to pay suit amount, if any, was that of company and not of defendant director personally---Company being a separate legal entity in its own right, thus, any liability thereof would solely and exclusively be that of company and not of its officer, directors or shareholders---Limited number of statutory and judicially evolved exceptions to such rule were not applicable to the present case---Plaint for not disclosing any cause of action against defendant was rejected in circumstances.

(b) Defamation Ordinance (LVI of 2001)---

----Ss. 2(e), 3(4) & 8---Civil Procedure Code (V of 1908), O.VII, R.11(a)---Suit for damages---Defamation by e-mail sent by defendant to plaintiff---Application under O.VII, R.11, C.P.C. for rejection of plaint for not disclosing any cause of action against defendant---Validity---Defamation by e-mail was clearly libel in terms of S.3(4) of Defamation Ordinance, 2002---Defendant had attached e-mail of a journalist with his e-mail---Such e-mail of journalist, if libelous, was a libel committed by such journalist and not defendant merely its recipient and- not its author or originator---Plaintiff had not pleaded in plaint that there was possibility of defendant having dictated such e-mail to his Secretary---Dictation of e-mail by defendant to Secretary would constitute a distinct and separate publication in its own right---Each act of publication of alleged defamation being a separate act of defamation must be alleged, pleaded and proved accordingly---Plaintiff had to prove defamation, and if publication was denied by defendant, then he had to prove publication as well---Plaint did not contain any averment regarding publication of e-mail by defendant---Plaintiff had no cause of action in absence of any publication of alleged e-mail in a newspaper nor was same broadcast from a station---Plaintiffs subsequent e-mail asking defendant for an unconditional apology would constitute sufficient with requirements of S.8 of Defamation Ordinance, 2002---Plaint was rejected in circumstances.

Azhar Chaudhry v. Residents Executive Committee and another 2007 YLR 2231(1) and Raees Ghulam Sarwar v Mansoor Sadiq Zaidi and others PLD 2008 Kar. 458 ref.

(c) Defamation Ordinance (LVI of 2002)---

----Ss. 2(e) & 3(4)---Libel, non-publication/circulation of--Effect-Alleged libel must injure reputation of a person or tend to lower him in estimation of others or tend to reduce him to ridicule, unjust criticism, dislike, contempt or hatred---Where defamatory communication was coned only to person being allegedly defamed and there was no publication/circulation thereof, then there could be no defamation.

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

----O. VII, R.11---Rejection of plaint---Material requiring consideration---Scope---All factual averments in plaint would be assumed to be true---Concomitant requirement of such assumption being that plaintiff must have averred or alleged all facts which taken together would constitute his cause of action---If plaintiff failed to aver all such facts, then he could not ask court to assume relevant facts in his favour---Principles.

(e) Defamation Ordinance (LVI of 2002)---

----S. 13---West Pakistan Civil Courts Ordinance (II of 1962), Ss. 3 & 7---Civil Procedure Code (V of 1908), S.15---Suit for damages under Defamation Ordinance, 2002---Pecuniary jurisdiction of District Court---Scope---Section 13 of Defamation Ordinance, 2002 created an exception to rule contained in S.15, C.P.C., and particularized one of Civil Courts namely District Court as appropriate forum for instituting such suit---Not open and permissible now for plaint(ff to file such suit in any Civil Court other than District Court---Where pecuniary claim in such suit with jurisdiction of Civil Districts, if greater than limit stipulated in S.7 of West Pakistan Civil Courts Ordinance, 1962, then, same must be brought in High Court---Principles.

Azhar Chaudhry v. Residents Executive Committee and another 2007 YLR 2231(1) and Raees Ghulam Sarwar v Mansoor Sadiq Zaidi and others PLD 2008 Kar. 458 not fol.

Habib ur Rehman and Hasan Hashimi for Plaintiff.

Ali Almani and Sami-ur-Rehman for Defendant.

Date of hearing: 2nd May, 2011.

2011 C L D 1216

[Karachi]

Before Syed Hasan Azhar Rizvi, J

STIEFEL LABORATORIES PAKISTAN (PRIVATE) LIMITED AND GLAXO SMITHKLINE PAKISTAN LIMITED: In the matter of

Judicial Miscellaneous Petition No. 44 of 2010, decided on 21st January, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 284 & 287---Scheme of arrangement for amalgamation of two private limited companies---Petition for sanctioning proposed scheme---Neither employees nor creditors of petitioners companies opposed such scheme---Security Exchange Commission of Pakistan recorded their 'no objection' to such amalgamation---Nothing on record to suggest that such merger would be against public interest or in violation of any law---High Court sanctioned such scheme in circumstances.

Mehmood Y. Mandviwalla and Ms. Sana Iftikhar for Petitioners.

Saghir Ahmed Hashmi, Registrar of Companies along with Syed Imran Shamsi, Law Officer of SECP.

2011 C L D 1221

[Karachi]

Before Syed Mahmood Alam Rizvi and Maqbool Ahmed Awan, JJ

GHULAM SARWAR---Petitioner

Versus

MUKHTIARKAR (REVENUE) TALUKA QASIMABAD, HYDERABAD and 3 others---Respondents

Constitutional Petition No. D-475 of 2007, decided on 29th April, 2009.

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

----Ss. 9 & 19---Civil Procedure Code (V of 1908), O.XXI, Rr.66 & 89---Constitution of Pakistan, Art.199---Constitutional petition---Suit for recovery of loan---Execution proceedings---Suit for recovery of loan by bank against borrower was decreed along with mark up charges---Executing Court, on filing execution application by decree-holder, proceeded to sell the property of judgment-debtor through auction---Application by objector for suspending the auction proceedings was dismissed and auction of property was held and highest bidder deposited 25% of bid amount and subsequently he deposited 75% of the balance amount---After confirmation of sale, mother of the judgment-debtor filed application under O.XXI, R.89, C.P.C. for setting aside the auction/sale proceedings on the ground that she had inherited the share of her deceased husband in the property in question and had become the owner thereof before the auction proceedings---Applicant failed to deposit the sale price as well as a sum equivalent to 5% of the purchase money---Application was dismissed by the Banking Court---Petitioner who was brother of deceased judgment-debtor had failed to point out any illegality in the impugned order---Petition was dismissed.

Saeeduddin Siddiqui for Petitioner.

Mumtaz Alam Leghari, Assistant A.-G. for Respondent No.1.

Anwar Baig Mughal for Respondent No.2.

Date of hearing: 21st April, 2009.

2011 CLD 1238

[Karachi]

Before Salman Hamid, J

Messrs DEWAN DEVELOPMENT (PVT.) LTD. and 2 others---Plaintiffs

Versus

Messrs MYBANK LIMITED through Regional General Manager---Defendant

Suit No. 1294 and C.M.A. No. 6463 of 2010, decided on 29th December, 2010.

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

----O. I, Rr. 9 & 10---Mis joinder and non joinder of parties---Not fatal---Court could add parties either suo motu or on application or oral request---Principles.

The provisions of Rule 10 of Order I, C.P.C., would show that the same are liberal and the court is empowered to substitute or add as plaintiff upon such terms as it thinks just at any stage of the suit. Rule 10 of Order I, C.P.C., empowers a court to remedy such defect. Mis-joinder by itself is not fatal nor is non-joinder per se fatal. Parties can be added by the court either on application, oral request or suo motu.

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

----Ss. 42, 12 & 64---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Suit for declaration, permanent injunction and specific performance of Memorandum of Understanding---Transfer of property by plaintiff in compliance of terms of Memo of Understanding in favour of defendant-Bank with condition that Bank would roll over and restructure plaintiffs liability, which Bank failed to perform---Application for temporary injunction to restrain Bank from creating third party interest in such property---Validity---Such Memo of Understanding contained certain reciprocal and/or collateral acts to be performed on either side--- Conditional transfer of property by plaintiff in favour of Bank was one of such acts to be reciprocated by Bank by rolling over and restricting of plaintiffs liabilities to enable him to do business, make profits and re-purchase such property within specified period---Bank had failed to perform its part of contract as agreed upon in terms of Memo of Understanding---Such Memo of Understanding was still subsisting and valid document and not superseded by subsequent agreement and sale-deeds, thus, same was capable of specific performance---No commercial enterprise would enter into an agreement (Memo of Understanding in the present case) without any consideration---Such transaction constituted mortgage with conditional sale---Interest of plaintiff in such property was to be safeguarded till decision of case---Bank had Net to comply with terms of the Memo of Understanding---High Court restrained Bank from creating third party interest in such property till final decision of suit.

Mehran Sugar Mills v. Sindh Sugar Corporation Ltd. and 2 others 1995 CLC 707; Tahir Hussain Malik v. Mst. Najma Rafi 1995 SCMR 1407; S. M. Majeda. Khatun Chowdhurani v. Rabindra Chandra DE and others 1952 Dacca 112; Muhammad Amin v. Khainisa and another PLD 1956 Lah. 242; Muhammad Hussain (deceased) through his legal heirs v. Noor Muhammad 1992 CLC 1459; Muhammad Farouk Dossa v. Mrs. Qudsia Dossa and 2 others 1990 MLD 2016; Major (R.) Ahmed Khan Bhatti v. Mst. Masooda Fatima PLD 1981 Kar. 398; Qamaruzaaman Khan v. Industrial Development Bank of Pakistan 2009 CLD 460; Sandoz Limited and another v. Federation of Pakistan and others 1995 SCMR 1431; Hoshang and others v. Dr. Eddie P. Bharucha and others PLD 1968 Kar. 723; Civil Aviation Authority v. Messrs AER Rianta 2002 CLC 1430; Shahab Shahzad Mirza v. Nadeem Ahmed 2009 YLR 1601; Eidoo Khan v. Abdul Majeed and 3 others 2001 YLR 2634; Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon and others 1994 SCMR 2189; Muhammad Hussain v. State Bank of Pakistan and others 2001 YLR 2259 and National Bank of Pakistan v. S.G. Fibre Ltd. and others 2004 CLD 689 ref.

Dr. Farogh Naseem for Plaintiff.

Arshad Tayyabally for Defendant.

Dates of hearing: 6th, 13th, 22nd and 23rd December, 2010.

2011 C L D 1284

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

C.I.T.---Applicant

Versus

B.R.R. INVESTMENT (PVT.) LTD.---Respondent

ITRA No. 45 of 1996, decided on 13th June, 2011.

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

----Ss. 14, 15 & 36---Income Tax Ordinance (XXXI of 1979), Ss. 2(12), 2(16)(cc) (as inserted by Finance Act (VII of 1992)] & Second Sched. Cl. (116)---Modaraba Companies and Modaraba Rules, 1981, R. 22---Capital gains derived from sale of Modaraba certificates prior to 30-6-1992--- Taxability--- Scope--- Modaraba being a company and body corporate would squarely fall under definition of term "company" as defined in Income Tax Ordinance, 1979---Clause (cc) had been inserted in S.2(16) of Ordinance, 1979 through Finance Act, 1992 to remove confusion about status of Modaraba---Beneficial provisions of law would have retrospective effect, unless and until made prospective by their implication---Such amendment, was beneficial to taxpayer---Modaraba would be considered a company even prior to such amendment---Modaraba enjoyed status of company being a body corporate formed under Mod araba Companies and Modarabas (Floatation and Control) Ordinance, 1980---Income from sale of Mod araba certificates falling under Cl. (116) of Second Sched. of the Ordinance was exempt from ambit of tax---Principles.

Commissioner of Income Tax v. Spring Field Secondary School Karachi 2003 PTD 1264 and Commissioner of Income Tax v. Messrs Lahore Cantt. Cooperative Housing Society 2009 PTD 799 distinguished.

Central Insurance Co. and others v. Central Board of Revenue 1993 SCMR 1232 rel.

(b) Interpretation of statutes---

----Beneficial provisions of law would have retrospective effect unless and until made prospective by their implication.

Commissioner of Income Tax v. Shahnawaz and others 1993 SCMR 73 rel.

(c) Interpretation of statutes---

----Remedial and curative statutes are always retrospective in nature.

Commissioner of Income Tax v. Shahnawaz Ltd. and others 1993 SCMR 73 rel.

Jawaid Farooqui for Applicant.

Ms. Lubna Pervez for Respondent.

Date of hearing: 21st April, 2011.

201 1 C L D 1300

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

COMMISSIONER (LEGAL)---Applicant/Appellant

Versus

Messrs EFU GENERAL INSURANCE LTD.---Respondent

I.T.R.As. Nos. 158 to 160 of 2010, decided on 6th June, 2011.

(a) Insurance Ordinance (XXIX of 2000)---

---S. 3---Income Tax Ordinance (XLIX of 2001), Ss.3, 67, 99, 100-A & Fourth Sched. Rr. 5, 6-A & 9---Income Tax Rules, 2002, R. 13---Income Tax Ordinance (XXXI of 1979), Ss. 24, 26 & Fourth Sched. Rr. 5, 8---Income Tax Act (XI of 1922), S. 10(7) & First Sched.---Income of Insurance Company from an insurance business and normal business---Taxability---Scope---Legislature had treated such two classes of businesses separately---Ordinary rules for computation of profits and gains could not be applied in case of an insurance business---Profits and gains of an insurance business would be computed in accordance with procedure laid down in Fourth Sched., of Income Tax Ordinance, 2001 for being a special provision would prevail over general provisions thereof---Fourth Sched. of Income Tax Ordinance, 2001 did not speak about proration of any expense---Insurance Company would be taxed as one unit, thus, unidentifiable expenses would not be prorated against exempt income of insurance business and normal business income---Federal Board of Revenue itself had accepted concept of one unit way back in year 1988---Capital gains/dividends income of Insurance Company like other profits of insurance business would, be considered as one basket income---Business income of insurance and computation of its income for being governed by special provisions of S. 99 read with rules contained in Fourth Sched., of Income Tax Ordinance, 2001 could not be considered at par with computation and taxability of normal business-Application of S. of Income Tax Ordinance, 2001 to Insurance Company would be unlawful and totally against concept of working out its profits and gains under Fourth Sched., thereof---Principles.?

Federal Bank for Cooperatives, Islamabad v. Ahsan Muhammad 2004 SCMR 130; Godeln Orphies (Pvt.) Ltd. v. Director of Vigilance, Central Excise, Customs and Sales Tax 1993 SCMR 1635; A.P. Moller v. Taxation Officer of Income Tax, Audit V (1TRA No. 2050 of 2007 and others); Commissioner of Income Tax, Central Zone, "A" Karachi v. Messrs Phoenix Assurance Co. Ltd. 1991 SCMR 2485; Messrs E.F.U. General Insurance Co. Limited v. The Federation of Pakistan and others 1997 PTD 1693; Central Insurance Co. and others v. Central Board of Revenue, Islamabad and others 1993 PTD 766 = 1993 SCMR 1232 and 2003 PTD 1321 ref.

E.F.U. General Insurance Co. Ltd. v. Federation of Pakistani 1997 PTD 1693: Central Insurance Company's case 1993 PTD 766 = 1993 SCMR 1232 and Commissioner of Income Tax, Companies-III, Karachi v. Central Insurance Co. Ltd. Karachi 2003 PTD 1321 rel.

(b) Administration of justice---

----Thing not done in prescribed manner would vitiate whole proceedings---Principles.

If something is stated td be done in a particular manner, it has to be done in that manner only; otherwise any deviation in this regard would vitiate the whole proceedings.?

(c) Interpretation of statutes---

----Special statute ousts general provisions-Principles. When special statute provides something to be done in a particular manner, then general provisions are ousted.?

Federal Bank for Cooperatives, Islamabad v. Ehsan Muhammad 2004 SCMR 130 rel.

(d) Income Tax Ordinance (XLIX of 2001)---

----S. 214---Instructions of Federal Board of Revenue---Binding on tax authorities.?

Kafeel Ahmed Abbasi for Applicant/Appellant.

Sirajul Haq Memon and Arshad Siraj Memon for Respondent.

Date of hearing: 15th April, 2011.

2011 C L D 1329

[Karachi]

Before Gulzar Ahmed and Imam Bux Balouch, JJ

Messrs KHADIJA EDIBLE OIL REFINERY (PVT.) LTD.---Appellants

Versus

M.T. "GALAXY" and 4 others---Respondents

Admiralty Appeals Nos. 1 and 2 of 2011, decided on 18th May, 2011.

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

----Ss. 4 & 57---Pakistan Merchant Shipping Ordinance (LII of 2001), S.17---Short landing of consignment-Arrest of ship--- Beneficial ownership--- Proof--- Action in personam--- Special and general law--- Factual controversy---Plaintiff sought arrest of two ships in lieu of ship against which there was a cause of action and it was alleged that defendant was beneficial owner of the ship---Validity---For arresting of ship that it should be beneficially owned, as respects majority shares by person against whom the claim was in personam---Such test of beneficial ownership of majority shares was required to be established for a sister ship---Provisions of Admiralty Jurisdiction of High Courts Ordinance, 1980, was a special law and the same could not be overreached by Pakistan Merchant Shipping Ordinance, 2001, which was a general law--- Provisions of S.57 of Admiralty Jurisdiction of High Courts Ordinance, 1980, only spoke of beneficial interest and not that of a beneficial owner---There was no beneficial interest of defendant in ship to be arrested, thus such provisions had no application---Question of short landing of consignment was the matter of disputed facts which needed to be established by evidence and the owner of offending ship having been joined as defendant in Admiralty suit, therefore, such aspect of the matter could be decided after evidence was led by the parties---Plaintiff failed to make out a case for arrest of ship and Single Judge of High Court had rightly dismissed the application for arrest of ship---Division Bench of High Court declined to interfere in the order passed by Single Judge of High Court---High Court appeal was dismissed in circumstances.

Messrs V.N. Lakhani and Company v. M.V. Lakatoi Express and 2 others PLD 1994 SC 894; Central Insurance Company Ltd. and others v. M.T. Tasman Spirit and others 2004 CLD 695; Messrs Maratos and Co. v. Rice Trader and 2 others PLD 1989 Kar. 94; Union Council, Ali Wahan, Sukkur v. Associated Cement (Pvt.) Limited 1993 SCMR 468; Nippon Yusen Kaisha (NYK) Lines v. Messrs MSC Textiles (Private) Limited and 6 others PLD 2008 Kar. 244; Yukong Ltd. South Korean Company, Seoul, South Korea v. M.T. Eastern Navigator and 2 others PLD 2001 SC 57; Syed Adil Hussainv. Mst. Majda 2000 CLC 1982; Eastern Federal Union Insurance Company Limited v. American President Lines Limited and another PLD 1992 SC 291; Abdul Jalil Chowdhury v. The Muhammadi Steamship Company, Ltd. and others PLD 1961 SC 340; British India Steam Navigation Company Ltd., London v. National Security Insurance Company Ltd. 1985 CLC 1720; Messrs Fatima Enterprise Ltd. v. Government of Pakistan and others 2003 PTD 2791; Bruusgaard Kiosteruds Dampskibs Aktieselskab v. Secretary of State AIR 1940 Bom. 294; East and West Steamship Co. v. Hossain Brothers and others PLD 1968 SC 15, PLD 1986 Kar. 1599; The Aventicum [1978] Vol. 1 LLR 184; The Saudi Prince [1982] Vol. 2 LLR 255; Amoco Oil Co. v. Parpada Shipping Co. Ltd. (The "George S") [1989] Vol. 1 LLR 369; East and West Steamship Co. George Town, Madras v. S.K. Ramalingam Chettiar AIR 1960 SC 1058; Messrs New Jubilee Insurance Co. Ltd. Dacca v. The United Oriental Steamship Co. Karachi and another PLD 1975 Kar. 647; Newzealand Insurance Co. Ltd. Chittagong v. M.A. Rouf and others PLD 1962 Dacca 31; Deutsche Dampschifffaharts-Gesellschaft and another v. Central Insurance Co. Ltd., Karachi PLD 1975 Kar. 819; Centerchem Products, Inc. v. A/S Rederiet Odfjell and Skibs A/S Hassle and A/S Special Bank 1972 AMC 373; Northeast Petroleum Corp. v. Prairie Grove, Her Ingines and others and Mathiasen's Tanker Industries, Inc. 1977 AMC 2139; Collector of Customs and another v. Messrs Fatima Enterprises Limited and others" 2005 SCMR 1493; M.T. Portofino and another v. M.T. Portofino 2003 CLD 1655; Farred v. Alaxander [1976] Vol. 1 ALL ER 129; Bakri Bunker Trading Company Limited v. The Owners of and others Persons Interested in the Ship Neptune 1985 No. AJ211; Adams and others v. Cape Industries PLC and another [1991] 1 All ER 929; Glastons Shipping Ltd. and Continental Chartering and Brokerage Ltd. Hong Kong Brach v. Panasian Shipping Corporation and Withers (The Glastons) [1991] 1 LLR 482; The Skaw Prince [1994] 3 SLR 379; Messrs MSC Textiles (Private) Limited through Executive Director v. Asian Pllux and 5 others 2007 CLD 1465; Bangladesh Shipping Corporation v. M.V. Nedon and another PLD 1981 Kar. 246; Owners of the Motor Vessel Monte Ulia v. Owners of the Ships Banco and others (The Banco) [1971] Vol. l All ER 524; The Maritime Trader [1981] Vol. 2 LLR 153, Macaura v. Nortern Insurance (1925) AC 619; 2003 HK LRD 49; The Evpo Agnic [1988] Vol. 2 Lloyds' Report 411; Atlantic Steamers Supply Company v. M.V. Titisee and others PLD 1993 SC 88; M.V. Sea Success-I v. Liverpool and London Steamship Protection and Indemnity Association Ltd. and another AIR 2002 Bomb. 151; Pak-American Fertilizers Ltd., Mianwali v. Amir Abdullah Khan 1984 CLC 2170/2175; Ghulam Shabbir v. Nur Begum and others PLD 1977 SC 75; Salomon v. Salomon and Co. Ltd. 1895 to 1899 All ELR 33 and M.V. Sea Success I v. Liverpool and London Steamship Protection and Indemnity Association Ltd. and another AIR 2002 Born. 151 ref.

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

----O. VI, R.4---Pleadings---Plea of fraud---Proof---Mere pendency of suits in themselves is not sufficient ground to sustain a claim of fraud---Such claim of fraud has to be supported by pleadings, facts, giving details such as dates, items, suit numbers, the amount claimed, party names, the name of offending ship and its owners etc. ought to be given for complying with the provision of O.VI, R.4, C.P.C.

Mazhar I. Lari for Appellants.

Khalid Rehman for Respondents.

Dates of hearing: 8th, 9th, 11th and 15th March, 2011.

2011 C L D 1430

[Karachi]

Before Munib Akhtar, J

M.C.B. BANK LTD.---Decree-Holder

Versus

DUTY FREE SHOP LTD.---Judgment-Debtor

Execution No.69 of 2008 and C.M.A. No.908 of 2010, decided on 15th July, 2011.

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

----O. XXI, Rr. 54 & 58(1) [as amended by Lahore High Court and also substituted by Law Reforms Ordinance (XII of 1972)]---Limitation Act (IX of 1908), Art.11---Objection petition filed after one year from date of first attachment---Maintainability---Intent behind amendment made in O.XXI, R.58(1) by Law Reforms Ordinance, 1972 was to prevent raising of frivolous, fictitious or vexatious objections/claims, but not to shut out genuine and valid claims simply due to expiry of one year from date of order of first attachment---Outer limit of one year would apply only to objector having knowledge of first attachment, but not to others having no such knowledge---Objections/claims in terms of O.XXI, R.58(1), C.P.C. could be taken at any time after attachment and confirmation of subsequent sale---First attachment must substantially comply with requirements of O.XXI, R.54, C.P.C.---Mere making of attachment order, attachment would not be effective without giving effect to same in prescribed manner---Proviso to O. XXI, R.58(1), C.P.C. would become applicable in appropriate circumstances once attachment was held to have been properly effected, but not otherwise---Principles.

Mulla on the Code of Civil Procedure 13th Edn. 1967, Vol II; Sardhari Lal v. Ambika Prasad (1888) 15 Indian Appeals 123 and Code of Civil Procedure by Aamer Raza A. Khan 10th Edn. 2010 rel.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, R.58---Transfer of Property Act (IV of 1882), S.54---Registration Act (XVI of 1908), Ss.17 & 49---Companies Ordinance (XLVII of 1984), S.196---Limitation Act (IX of 1908), Art.11---Money decree, execution of---Sale of warehouse of judgment-debtor situated in Islamabad Capital Territory---Confirmation of sale in favour of auction purchaser by Executing Court---Objection petition by Pakistan International Airlines Corporation (PIA) claiming to be owner of warehouse on basis of handing/taking over certificate issued by judgment-debtor company in pursuance of decision of its Board of Directors and on payment of its outstanding dues to Capital Development Authority (CDA) prior to passing of decree under execution--- Plea of decree-holder and auction purchaser that objection petition filed after one year of first attachment was hit by proviso to R.58(1), O.XXI, C.P.C.; that sale of warehouse to PIA without registered sale deed was invalid and violative of S.196 of Companies Ordinance, 1984---Validity---Reports of Bailiff on record did not show that copy of order of first attachment was affixed on a conspicuous part of warehouse and court---First attachment was without substantial compliance with requirements of O.XXI, R.54,. C.P.C., thus, proviso to R.58(1) thereof would not apply thereto---Nothing on record to show that PIA had knowledge of execution proceedings or order of first attachment and delayed filing of objection petition designedly or unnecessarily or did not file same within a reasonable time---Proviso to O.XXI, R.58(1), C.P.C. would not apply to objection petition filed by PIA in such circumstances---Warehouse was standing in name of PIA in record of Capital Development Authority (CDA)---Provisions of Transfer of Property Act, 1882 were not applicable to Islamabad Capital Territory---Transfer of warehouse to PIA had taken place by decision of Board of Directors of judgment-debtor company, and not by any document, thus, provisions of S.17 of Registration Act, 1908 would not apply thereto---Such handing/taking over certificate was not a document declaring any rights, rather same confirmed factum of change of ownership to warehouse and did not itself bring about such change---Capital Development Authority had duly accepted transfer of warehouse to PIA and given effect thereto in its record without a registered document---Nothing on record to show that transfer of warehouse came within description given in S.196(3) of Companies Ordinance, 1984---Warehouse had been transferred to PIA prior to first order of attachment and decree under execution---High Court accepted objection petition and set aside sale of warehouse including its confirmation and order of its attachment.

Ghulam Mohiuddin and others v. Haji Muhammad and others PLD 1957 Kar. 643 and Bageshwari Charan v. Jagarnath Kuari AIR 1932 PC 55 rel.

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

----Ss. 1 & 2---Islamabad Capital Territory---Provisions of Transfer of Property Act, 1882 not applicable to such territory, but principles thereof would apply by way of equity, justice and good conscience.

Barkatullah Khan v Abdul Hameed 1981 SCMR 1200; Malik Naveed Ahmed v. Nasreen Hameed 2005 SCMR 357 and Shabnam Ashraf v. Muhammad M. Iqbal 2003 YLR 495 rel.

(d) Registration Act (XVI of 1908)---

----S. 17---Transfer of Property Act (IV of 1882), S.54---Provision of S.17, Registration Act, 1908---Scope---Matters specified in various clauses of S.17 of Registration Act, 1908 not required thereby to come about by way of registered document---Requirement of S.17 of Registration Act, 1908 was that where a written document was used in respect of any of matters specified in various clauses thereof, then same must be registered---In places where Transfer of Property Act, 1882 was applicable relevant document such as sale of immovable property must be by way of registered document because of S.54 thereof and not by reasons of S.17 of Registration Act, 1908.

(e) Registration Act (XVI of 1908)---

----S. 17--- Provisions of S. 17 of Registration Act, 1908, would be construed strictly---Where two interpretations of a document were reasonably possible, one of which would make same compulsorily registrable, while other would not, then latter would be preferred.

Behzad Haider for Decree-Holder.

Abdul Sattar Lakhani for the Judgment-Debtor.

Zaki Ahmed and Jawad A. Sarwana for PIAC.

Ahmed Nawaz Bhatti for Auction Purchaser.

Kh. Ahsan,. Advocate.

Jam Asif Ali, Advocate.

Qadir Bux Umrani, Official Assignee.

Date of hearing: 3rd May, 2011.

2011 C L D 1463

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

ABID IQBAL and 2 others----Appellants

Versus

EXPORT PROCESSING ZONES AUTHORITY through Chairman----Respondent

High Court Appeal No.46 of 2010, decided on 4th May, 2011.

Export Processing Zone Authority Ordinance (IV of 1980)---

----S. 24---Arbitration Act (X of 1940), S.34---Civil Procedure Code (Amendment) Ordinance (X of 1980), S.15---Arbitration clause---Stay of proceedings---Plaintiff assailed stay of proceedings of suit on the plea that basis of dispute between the parties was not mentioned in arbitration application---Validity---If suit was filed not on the basis of an agreement but was covered by Export Processing Zone Authority Ordinance, 1980, then it was not necessary that disputes were specifically highlighted---Only thing the court had to examine was that whether such disputes were covered by arbitration clause in Export Processing Zone Authority Ordinance, 1980, or not---As the dispute between the parties was covered by arbitration clause of Export Processing Zone Authority Ordinance, 1980, therefore, arbitration application was rightly allowed---Order of High Court was unexceptionable and no interference was called for in High Court Appeal---Appeal was dismissed in circumstances.

Novelty Cinema, Lyallpur v. Firdaus Films and another PLD 1958 (W.P.) Lah. 208; Muhammad Yousuf Burney v. S. Muhammad Ali 1983 CLC 1498; Messrs Cosmplitan Development Company v. Messrs SO DI.ME,-S.P.A. and another 1983 MLD 2832; Syed Arshad Ali v. Sarwat Ali Abbasi 1988 CLC 1350; Mst. Zohra Begum v. Messrs Abdul Razak and Co. and 10 others 1984 CLC 1643; Union of India v. Birla Cotton Spinning and Weaving Mills Ltd. AIR 1967 SC 688 and Messrs National Small Industries Corporation Ltd., New Delhi v. Messrs Punjab Tin Printing and Metal Industries Ajraunda, Faridabad (Haryana) and others AIR 1979 Delhi 58 distinguished.

Ali Muhammad Khan v. Riazuddin Khera PLD 1981 Kar. 170 ref.

H.A. Rahmani for Appellants.

Ali Mumtaz Shaikh for Respondents.

Date of hearing: 26th April, 2011.

2011 C L D 1485

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

LIGHT METAL AND RUBBER INDUSTRIES (PRIVATE) LIMITED and others---Appellants

Versus

SARFRAZ QAUDRI---Respondent

High Court Appeal No. 195 of 2010 and C.M.A. No. 723, J.M. No. 30 of 2009, decided on 13th June, 2011.

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

----Ss. 263, 265, 290, 305 & 309---Civil Procedure Code (V of 1908), S. 151---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Investigation of company's affairs on application by members---Petitioner being Chairman of company alleged that in his absence from country, respondent Directors had not only transferred huge amount from company's account to their personal accounts, but had maintained duplicate/bogus and unofficial accounts; and that due to respondents' inefficiency, business had suffered huge loss---Petitioner's application under S. 151, C.P.C., with prayer to appoint Chartered Accountant to inspect accounts of company since year 2007 onwards---Order of High Court directing Securities and Exchange Commission of Pakistan to appoint Chartered Accountant as Inspector to investigate affairs of company since year 2007---Validity---Shareholders of company had a legal right to know about affairs of company for they being its stakeholders---Petitioner being Chairman and having 22% shareholding of company had right to know about it and its financial status and enquire from other shareholders about its financial status--- Allegations levelled against respondents of misappropriation and manipulation could be determined on basis of documents, which required a thorough investigation into financial affairs of company---Such investigation could be done by appointing a person having sound knowledge of subject to dig out true affairs of company---Appointment of Inspector in such circumstances was necessary for ends of justice---Court under S. 151, C.P.C., had power to pass such orders, which would be necessary to meet ends of justice---Where court was satisfied that prima facie case was made out, then discretion vested with court to give directions for appointment of an Inspector or not---Such exercise of jurisdiction would not be open to any exception--- Both, parties would have fair chance to repel allegations levelled against each other with help of documents---High Court dismissed appeal and maintained impugned order in circumstance.

Nadar Press Ltd. v. N.P.S.N. Ramiah Nadar and others (1968) 38 Comp. Cases 337 (Mad.); Service Industries Textiles Ltd. v. SECP and others 2000 MLD 1880; Rohtas Industries Ltd. v. S.D. Agarwal AIR 1969 SC 707; Delhi Flour Mills Co. Ltd. [(1975) 45 Comp. Cases 33 (Del.)]; V.J. Thomas Vettom v. Kuttanad Rubber Co. Ltd. (1984) 56 Comp. Cases 284 (Ker.); Fazal Din and others v. Milkha Singh AIR 1933 Lah. 193; Secretary to Govt. (West Pakistan) and others v. Abdul Kafil PLD 1978 SC 242; Muhammad Iqbal v. Riaz Sabir 1984 CLC 2375; Progressive Consultants (Pvt.) Ltd. v. Corporate Law Authority and others 2002 CLD 726; Alembic Glass Industries' case [(1972) 42 Comp. Cases 63 (Guj.)]; 2003 YLR 2150; Ejaz Siddiqui v. Kaneez Begum 1992 CLC 1658; (1983) 54 Comp. Cases 368; Diamond Industries Limited v. Appellate Bench of the Securities and Exchange Commission of Pakistan 2002 CLD 1714; Sardar Khan Niazi v. Barex Lahore Ltd. 2005 CLD 1670; Brothers Steel Ltd. v. Mirajuddin PLD 1995 SC 320; Attock Refinery Ltd. v. Executive Director, Enforcement and Monitoring Division, SECP 2010 CLD 774; Qamar Loan v. Kashmirian (Pvt.) Ltd. PLD 1997 Kar. 376; Muhammad Shabbir Khan v. Muhammad Anwar 1988 CLC 1955; Amina Begum v. Ghulam Dastagir PLD 1978 SC 220 and Safia Bibi v. Aisha Bibi 1982 SCMR 494 ref.

Government of Sindh v. Sirtaj Bibi PLD 2001 Kar. 442 and Brothers Steel Ltd. and others v. Mian Mirajuddin and 15 others PLD 1995 SC 320 rel.

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

----S. 151---Inherent powers of court---Scope.

Section 151, C.P.C., signifies inherent powers to a court in order to do complete administration of justice to pass such orders as may be necessary to meet the ends of justice. The courts are empowered under the said Section to pass such orders, which are necessary to do substantial justice between the parties, subject to the condition that court is not to act upon something which is specifically prohibited by express words in this regard. The words "as may be necessary for ends of justice" used in the said Section are quite significant and empower the court to such orders as may be necessary for ends of justice.

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

----S. 265---Appointment of Inspector to investigate affairs of company---Jurisdiction of High Court---Scope---Where court was satisfied that prima facie case was made out, then discretion rested with court could be exercised to give directions for appointment of Inspector---Such exercise of jurisdiction would not be open to any exception.

Taimur Mirza for Appellants.

Badar Alam for Respondent.

Dates of hearing: 1st and 5th April, 2011.

2011 C L D 1530

[Karachi]

Before Syed Hasan Azhar Rizvi, J

UNITED BANK LIMITED and others---Decree Holder

Versus

Messrs NUSRAT TEXTILE MILLS LIMITED and others---Judgment Debtor

Execution No. 93 of 2000 and C.M.A. No.2285 of 2001, decided on 23rd May, 2011.

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

----S. 16---Civil Procedure Code (V of 1908), O. XXI, R. 58---Execution of decree obtained by Bank against judgment debtor--- Objection petition--- Objector a Modaraba Company seeking possession of leased machinery lying in factory of judgment debtor on basis of money decree obtained from Modaraba Tribunal after getting permission to sell same without intervention of Tribunal---Objector claimed to have made payments of Letters of Credit opened by judgment debtor for importing such machinery---Validity---Agreement and mortgage deeds produced by Bank did not mention/specific description of machinery claimed by objector---­Objector had produced cheques to prove payments made against Letters of Credits opened by judgment debtor for importing such machinery---Judgment of Modaraba Tribunal had attained finality for not challenged in appeal by judgment debtor---Plaint in suit filed by objector in Modaraba Tribunal disclosed details of machinery imported by judgment debtor and lease agreement executed in favour of objector for such machinery---Bank had failed to prove any lien/charge over such machinery, which belonged to the objector---High Court accepted objection petition in circumstances.

Naveedul Haq for the Decree-holder.

Shahab Sarki for Objector B.R.R. International Modarba.

Muhammad Aslam holding brief for Hasan Akber for Intervenor.

Date of hearing: 9th February, 2011.

2011 C L D 1550

[Karachi]

Before Munib Akhtar, J

MCB BANK LIMITED---Plaintiff

Versus

Messrs ATLAS RUBBER AND PLASTIC INDUSTRIES PVT. LTD. and 6 others---Defendants

Suit No. B-45 of 2009 and C.M.A. No. 5399 of 2010, decided on 9th June, 2011.

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

----Ss. 9 & 16---Civil Procedure Code (V of 1908), O.XXXVIII, R.5---Suit for recovery of loan---Attachment of property of guarantor, application for---Defendant who along with others was guarantor of debtor had been sued as guarantor of loan facilities that were made available to the debtor---Plaintiff bank by means of application filed under S.16 of Financial Institutions (Recovery of Finances) Ordinance, 2001, had sought property belonging to guarantor attached---Guarantor had been sued only as a guarantor in the suit on the basis of the personal guarantee that had been given by him to the plaintiff bank in respect of the finance facilities made available to the debtor---Simply because person had given a personal guarantee in respect of an outstanding loan, would not mean that he stood precluded from dealing with his properties and assets in accordance with law, and in such manner as he would deem appropriate---Simply because a suit had been filed against a guarantor, would not in and of itself entitle the creditor to come forward, and, in effect, restrain the guarantor from dealing with his properties---Creditor must show something specific and additional as required in terms of R.5 of O.XXXVIII, C.P.C.; that concerned guarantor was disposing of; or was about to dispose of his property with intent to defeat or delay any decree that could be made in the suit---Mere bald assertion in that regard was not enough---Application for attachment of property filed by the plaintiff bank, being without merit, was dismissed, in circumstances.

Bahzad Haider for Plaintiff.

Zeeshan holding brief for Asim Mansoor for Defendant No.1.

Salim Salam Ansari for Defendants Nos. 5 and 7.

Irfan Haroon for Intervener.

2011 C L D 1571

[Karachi]

Before Mushir Alam, C.J. and Syed Hassan Azhar Rizvi, J

Messrs HABIB BANK LIMITED through Authorized Officers/Attorneys---Petitioner

Versus

Messrs VICTOR ELECTRONICS APPLIANCES INDUSTRIES (PVT.) LTD. and another---Respondents

Constitution Petition No. D-3382 and C.M.A. No. 13504 of 2010, decided on 21st June, 2011.

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

----Ss. 9 & 10--- Constitution of Pakistan, Art. 199---Constitutional petition---Suit for recovery of damages against Bank---Leave to defend suit, application for---Granting of such leave by Banking Court subject to furnishing of security by defendant - Bank in sum of Rs.5 Million within 15 days---­Defendant's plea that impugned order was without jurisdiction--- Validity---High Court had jurisdiction to correct wrong in case of non-availability of efficacious remedy to aggrieved party---Defendant being a private limited company was running banking business for more than four decades and there was no chance of its abscondance---Imposition of condition of furnishing security was of no consequence---High Court modified impugned order to extent of condition of furnishing such security.

Messrs Shahzad Ice Factory and 2 others v. Special Judge Banking (II) Lahore and another PLD 1982 Lah. 92; Messrs S.M. Ayub and Co. and others v. National Bank of Pakistan 1983 CLC 2828; Messrs Chenab Cement Product (Pvt.) Ltd. v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672; Ijaz Ahmad Piracha v. Judge, Special Court Banking and others 1982 CLC 2367 and Federation of Pakistan and another v. Malik Ghulam Mustafa Khar PLD 1989 SC 26 ref.

(b) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope---Impugned interlocutory order not appealable under relevant statute---High Court had jurisdiction to correct wrong particularly in case of non-availability of afficacious remedy to aggrieved party.

Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881 ref.

Kashif Hanif for Petitioner.

Khaliq Ahmed for Respondents.

Date of hearing: 14th April, 2011.

2011 C L D 1602

[Karachi]

Before Munib Akhtar, J

MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD.---Plaintiff

Versus

F.T. SELNES and 3 others---Defendants

Admiralty Suit No. 29 and C.M.As. Nos. 1314, 1315 of 2010, decided on 15th July, 2011.

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

----Ss. 3(2)(c) & 6---Stamp Act (II of 1899), Sched-I, Arts. 16 & 56---Suit by foreign Bank for arrest and sale of vessel for recovery of loan amount---Bank's claim in rem against vessel for being its mortgagee for finance advanced for its purchase---Non-filing of suit within two years of accrual of cause of action---Validity---Term "respondentia" as defined in Art. 56 of Stamp Act, 1899 related to a lien on cargo laden or to be laden on board a ship---Term "bottomry" as defined in Art.16 of Stamp Act, 1899 related to money borrowed by master of a sea going ship on security of ship to enable him to preserve ship or prosecute voyage---Claim in nature of mortgage or charge on ship especially in relation to financing of its purchase or acquisition would not come within term of "bottomry" or "respondentia" as defined in Stamp Act, 1899---Such mortgage was not a claim in respondentia and a maritime lien, thus, provision of S. 6 of Admiralty Jurisdiction of High Courts Ordinance, 1980 would not apply thereto--- Suit based on claim falling under S.3(2)(c) of the Ordinance could not be regarded as barred by limitation on account of S. 6 thereof---Provisions of S.6 of Admirality Jurisdiction of High Courts Ordinance, 1980 were not applicable to the present case.

Oriental Shipping Company Limited v. M.V. Mone Cristo and others 1984 CLC 2265; Proceedings in rem against the vessel M.T. Portofino and another 2003 CLD 1655; State Life Insurance Corporation of Pakistan v. Rana Muhammad Saleem 1987 SCMR 393; Kadir Motors v. National Motors Limited 1992 SCMR 1174; E.F.U. General Insurance Limited and others v. Fahimul Haq 1997 CLC 1441; Abdul Rahman and others v. Member Judicial, Board of Revenue and others 2001 YLR 2284; Bankers Equity Limited v. Iqas Weaving Mills (Pvt.) Limited 2001 CLC 169; Syed Asadul Haq v. Balochistan Glass Limited 2001 CLC 294; Messrs Abdoun Oil Company SA v. "M/T Abdoun Discovery" and another 2004 CLD 286; Atlantic Steamers Supply Company v. M.V. Titisee and others PLD 1993 SC 88; V.N. Lakhani and Company v. M.V. Lakatoi Express and others PLD 1994 SC 894; Masoomi Enterprises Pakistan (Pvt.) Limited and others v. Ping Tan Fishery Company and others 2002 CLD 936; Sun Line Agencies Limited v. M.V. Psiloritis and others 1984 CLC 1553; United Bank Limited v. Nephew and Nephew Co. Ltd. 2004 MLD 319; Messrs Abdoun Oil Company SA v. M.T. Camaro Pride and another 2003 CLD 1774; Black's Law Dictionary (Sixth ed., 1990); Words and Phrases (Permanent Edition) and Maritime and Shipping Dictionary (by Aga Faquir Muhammad, 2006) ref.

Muhammad Ahsan Ghani Siddiqui for Plaintiff.

Naeem Ahmed for Defendant No.1.

Saghir Ahmed Abbasi for the Invervener.

Date of hearing: 19th April, 2011.

2011 C L D 1625

[Karachi]

Before Salman Hamid, J

Messrs CONTINENTAL CABLE (PVT.) LTD.---Plaintiff

Versus

Messrs CHINA HARBOR ENGINEERING CO. LTD. and another---Defendants

Suit No.157 and C.M.A. No. 1086 of 2010, decided on 13th June, 2011.

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

----S.126---Bank Guarantee---Encashment of unconditional Bank Guarantee issued to cover amount advanced by way of mobilization advance---Grant of injunction against such encashment---Scope---No injunction should normally be granted to restrain encashment of such guarantee.

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

----S.126---Performance Bond/Guarantee---Encashment of---Scope---Where prima facie evidence of breach of contract existed, then allowing encashment of performance Bond/Guarantee would normally be not just and proper.

1989 SCMR 379; Zeenat Brothers v. Awan-e-Iqbal Authority PLD 1996 Kar. 183 and Port Qasim Authority, Karachi v. Al-Ghurrair Company and 3 others PLD 1997 Kar. 636 rel.

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

----S.20---Contract Act (IX of 1872), S.126---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Application for filing in court arbitration agreement and referring matter to an arbitrator---Construction contract---Application by plaintiff to restrain defendant from encashing performance Bank Guarantee till disposal of matter by arbitrator---Validity---Dispute regarding completion of work still existed between parties, which would require thrashing by way of evidence before Arbitrator---Plaintiff had completed substantial work under contract, thus encashment of such guarantee at present stage would be detrimental to its interest--- High Court retrained defendant from encashing such guarantee till disposal of suit before Arbitrator.

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

----S.20---Contract Act (IX of 1872), S.126---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Application for filing in court arbitration agreement and referring matter to an arbitrator---Construction contract---Bank Guarantee for mobilization advance---Plaintiff's application to restrain defendant from encashing such guarantee till disposal of matter by Arbitrator---Validity---Plaintiff had not denied receipt of such advance at time of commencement of work at site---Such advance being for mobilization of work would be returnable either at time of termination of contract or after completion of entire work in terms of contract---High Court dismissed such application in circumstances.

Awan-e-Iqbal's case PLD 1994 SC 311 rel.

Usman Shaikh for Plaintiff.

Yawar Faruqui for Defendant No.1.

2011 C L D 1642

[Karachi]

Before Salman Hamid, J

TRADING CORPORATION OF PAKISTAN (PVT.) LTD.---Plaintiff

Versus

Messrs UNIVERSAL NAVIGATION (PTE.) LTD. through Authorized Local Agents

and 4 others---Respondents

Suit No.1083 and C.M.A. No. 9176 of 2007, decided on 9th June, 2011.

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

----S. 34---Suit for recovery of amount with cost and interest / markup / damages / compensation--- Purchase contract between plaintiff and one out of five defendants containing arbitration clause---Application for stay of suit by one defendant being party to purchase contract---Maintainability---Plaintiff had prayed for a judgment and decree against all defendants jointly and severally---Plaintiff showed that defendant-vessel through other defendants being its agents, had brought plaintiff's consignment to Karachi Port---Losses sustained by plaintiff was due to acts of omission and commission of all defendants, who under freight contract and provisions of law were bound to take due and proper care of consignment imported by plaintiff---Evidence regarding alleged losses was available at Karachi, where entire contract was concluded---Except one defendant, all defendants were not signatory to purchase contract---Contesting matter by all defendants at Karachi would be convenient to them---Stay of suit or splitting matter into two actions would not be in interest of justice--- Such application was dismissed in circumstances.

Echardt and Company Marine GmbH, West Gemany and another v. Muhammad Hanif PLD 1986 Kar. 138; Eckhardt and Co. v. Muhammad Hanif PLD 1993 SC 42; Muhammad Amin and Muhammad Bashir Ltd. v. PAS + R and others 2002 CLD 671; Hitachi Ltd. v. Rupali Polyester 1998 SCMR 1618; State Bank of Pakistan v. Naqson and others PLD 1970 Kar. 490 and M.A. Nawaz and Co. (Regd.) and 5 others v. NBP through Regional Manager, Multan 1970 SCMR 234 ref.

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

----S. 34---Stay of legal proceedings, grant or refusal of---Scope---No hard and fast rule could be laid down for such purpose---Grant or refusal of such stay could be made on objective assessment of each case---Principles.

No hard and fast rule can be laid down or no line of demarcation can be drawn as to in which cases refusal be made and in what not. Each case has different factors and grounds of refusal. Particular and peculiar circumstances of each case need, to be addressed. It is the objective assessment of a case which brings to conclusion whether stay of legal proceedings can be granted or refused.

S. Naqi Mirza for Plaintiffs.

Nemo for Defendants Nos.1, 2 and 3.

Ahmed Subhani for Defendants Nos. 4 and 5.

2011 C L D 1655

[Karachi]

Before Mushir Alam, C.J. and Aqeel Ahmed Abbasi, J

APOLLO TEXTILE MILLS LTD. through Chief Executive and Director and 3 others---Appellants

Versus

SONERI BANK LIMITED through Manager/ Principal Officer---Respondent

Special High Court Appeal No. 40 of 2010, decided on 20th June, 2011.

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

----Preamble---Interpretation and scope of Financial Institutions (Recovery of Finances) Ordinance, 2001---Every provision of the Ordinance for being a special law, would be construed strictly and adhered to meticulously.

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

----Ss. 3(2), 4 & 9---Default in discharge of obligation by customer or financial institution---Effect---Such default would not only incur cost of funds under S. 3(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, but would be actionable under S. 9 thereof---Party seeking recovery of outstanding liabilities from other would be legally bound to support contents of plaint by filing statement of accounts and other relevant documents relating to grant of finance--- Plaint, in case of suit by financial institution, must disclose amount of finance availed, paid and payable by customer.

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

----Ss. 9 & 10--- Suit for recovery of loan amount by Bank---­Leave application---Customer's objection that statement of accounts filed by Bank started with brought forward balance instead of zero balance---Validity---Customer had neither disputed execution of charge documents and availing of finance nor alleged any payment not reflected in statement of accounts---Had either customer disputed existing outstanding amount or Bank claimed mark up, then such objection would have carried weight---Such objection was turned down in circumstances.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), O. VIII, R.6---Suit for recovery of loan amount by Bank---Leave application---Customer's claim for set-off on account of damages suffered by him due to action/non-action on part of Bank---Maintainability---Customer could not set up a claim of set-off against Bank in such suit---Permitting a customer to claim damages by way of counter claim or set-off would not only frustrate very intent of the Financial Institutions (Recovery of Finances) Ordinance, 2001 as in every case where damages by way of counter claim or set-off were asserted the provisions of S.10 of the Ordinance would become redundant and the borrower would automatically become entitled to leave to defend as claim of damages could not to be rejected outrightly without permitting its claimant to lead evidence.

Government of Sindh and 2 others v. Amir Muhammad through Legal Heirs 1988 MLD 18; Allied Bank of Pakistan v. Masood Ahmad Khan 1994 MLD 1431; Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd. PLD 1966 SC 684; Messrs Ansari Cotton Ginning and Pressing Factory (Pvt.) Ltd. through Directors and 5 others v. Habib Bank Limited 2006 CLD 1220; Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 SCMR 1156 = 2003 CLD 1033; American Express Bank Ltd. v. Adamjee Industries Limied 1995 CLC 880; International Finance Corporation v. Sarah Textiles Ltd. and 3 others 2009 CLD 761; Trading Corporation of Pakistan (Pvt.) Ltd. v. Murshad Enterprises PLD 2004 Kar. 407; Messrs Foremost Trading Company v. Galedonian Insurance Company Ltd., Karachi PLD 1981 Kar. 540; Sri Narasimhaswami, Namagiri Amman and Sri Ranganathaswami Temples by its Executive Officer, P. Rangaraju v. Muthukrishnalyengar AIR 1962 (Madras) 244; Messrs Mahendrakumar Chandulal, Ahmadabad v. Central Bank of India Ahmadabad AIR 1984 (NOC) 113; UCO Bank v. Hem Chandra Sarkar AIR 1990 SC 1329; Messrs Taxila Cotton Mills Ltd. v. Allied Bank of Pakistan 2005 CLD 244; Abdul Majeed and 6 others v. Mst. Haleema and 18 others 1987 CLC 2331; Haji Ali Khan and Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362; Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited, Karachi through President and 3 others 1999 SCMR 2353; Agricultural Development Bank of Pakistan v. Messrs Modern Leathers and others 2007 CLD 1424; Basheer Ahmed Siddiqui v. Shama Afroz 1988 SCMR 892; Rasheed Ahmad v. Province of Punjab through District Collector, Vehari and another 2004 SCMR 707; Sherin and 4 others v. Fazal Muhammad and 4 others 1995 SCMR 584; NIB Bank Ltd. v. Muhammad Yasir and another 2011 CLD 243; Habib Bank Limited v. Messrs Sabcos (Pvt.) 2006 CLD 244; Government of Sindh and 2 others v. Amir Muhammad through Legal Heirs 1988 MLD 18; Allied Bank of Pakistan v. Masood Ahmed Khan 1994 MLD 1431; Messrs Armair Corporation v. Allied Bank of Pakistan 1987 MLD 339; Messrs Qadaria Dyes and Chemical Company Ltd. v. United Bank Limited, Clock Tower, Faisalabad 1987 MLD 406; Messrs United Bank Ltd. v. Messrs Muhammad Saeed Muhammad Hussain 1983 CLC 428; Nasir Ahmad Shaikh v. The State Life Insurance Corporation of Pakistan and another 1990 MLD 1261; Pakistan Burmah Shell Ltd. v. S.S. Phoenix and 4 others PLD 1979 Kar. 789 and British India Steam Navigation Co. Ltd. v. National Security Insurance Company Ltd. 1985 CLC 1720 ref.

Messrs Ansari Cotton, Ginning and Pressing Factory (Pvt.) Ltd. through Directors and 5 others v. Habib Bank Limited 2006 CLD 1220; Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 SCMR 1156 = 2003 CLD 1033; American Express Bank Ltd. v. Adamjee Industries Limited 1995 CLC 880; Messrs Razzaq and Company v. Messrs Riazeda (Pvt.) Ltd. and International Finance Corporation v. Sarah Textiles Ltd. and 3 others 2009 CLD 761 rel.

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

----S.10(6)---Provisions of S. 10(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001 are mandatory in nature---Principles.

Provisions of Section 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 provide penal consequences for non-compliance of the requirements of subsections (3), (4) and (5) of section 10 thereof, therefore, said provisions are mandatory in nature.

(f) Interpretation of statutes---

----Mandatory or directory nature of a provision, determination of---Test stated.

The test to examine as to whether any provision of law would be construed as mandatory or directory is that when a provision of law has been couched with the penal consequences, the said provision would be considered as a mandatory provision, and where no penal consequences entailed to the non-compliance, in that case the said provision of law could be taken as directory.

Niaz Muhammad v. Fazal Raqib PLD 1974 SC 134 rel.

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

----S. 22---Civil Procedure Code (V of 1908), O.XLI, R. 1---­Limitation Act (IX of 1908), S. 5---Appeal---Non-filing of certified copy of decree along with appeal and thereafter within period of limitation---Impugned judgment/decree were passed on 4-1-2010---Application for certified copy of judgment/decree was made on 23-1-2010, which were made ready on 2-11-2010 and supplied to appellant on 30-10-2010, on which date appeal was filed---Respondent's application seeking dismissal of appeal for non-compliance of mandatory provisions of O. XLI, R. 1, C.P.C.---Filing of photocopy of decree by appellant on 6-12-2010 along with his reply to such application by raising plea therein that its certified copy could not be obtained earlier due to misunderstanding between staff of appellant's counsel pursuing suit and staff of appellant's counsel pursuing appeal---Validity---According to O. XLI, R. 1, C.P.C., every memo of appeal duly signed by appellant or his pleader must be accompanied by a copy of decree appealed against---Appellate Court could only dispense with filing of copy of judgment on which decree was founded---­Appellant had filed copy of decree along with his such reply without filing application under S. 5 of Limitation Act, 1908 for seeking condonation of delay---Appellant had failed to make out a case on merits---Exercise of discretion by High Court to condone non-compliance of provisions of O. XLI, R. 1, C.P.C., and delay in filing such copy would not advance cause of justice, rather would frustrate same---High Court dismissed the appeal in circumstances.

Abdul Majeed and 6 others v. Mst. Haleema and 18 others 1987 CLC 2331; Bashir Ahmed Siddiqui v. Shama Afroz 1988 SCMR 892; Rasheed Ahmad v. Province of Punjab through District Collector 2004 SCMR 707; Sherin and 4 others v. Afzal Muhammad and 4 others 1995 SCMR 584; Rasheed Ahmad v. Province of Punjab through District Collector 2004 SCMR 707 and Sherin and 4 others v. Afzal Muhammad and 4 others 1995 SCMR 584 ref.

Cooperative Model Town Society through Secretary v. Mst. Asghari Safdar and others 2005 SCMR 931 rel.

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

----O.XLI, R.1---Limitation Act (IX of 1908), S. 12(2)---Appeal not accompanied by copy of decree---Decree not drawn up at time of filing appeal---Effect---Time could be extended for filing decree-sheet in such circumstances.

Ms. Pooja Kalpana for Appellants.

Aziz-ur-Rehman for Respondent.

Date of hearing: 11th April, 2011.

2011 C L D 1706

[Karachi]

Before Salman Hamid, J

NIB BANK LTD.---Plaintiff

Versus

Messrs APPOLO TEXTILE MILLS LTD. and 2 others---Defendants

Suit No. B-59 and C.M.As. Nos. 10014 to 10016 of 2008, decided on 13th June, 2011.

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

----Ss. 9 & 10---Suit for recovery of loan amount---Application to leave to defend---Admission of execution of loan documents and re-payments by defendant---Non-raising of any substantial question of fact or law in such application---Validity---Bank had already given up rebate and other interest and had claimed only due amount recoverable in terms of loan agreement, execution of which was not denied by defendant---Such admission of defendant amounted to admission of his liability---High Court dismissed leave application and decreed suit as prayed for.

Yawar Faruqui for Plaintiff.

Farogh Nasim for Defendants.

Date of hearing: 1st June, 2011.

2011 C L D 1711

[Karachi]

Before Mushir Alam, C.J. and Aqeel Ahmed Abbasi, J

SAJJAD GONDAL---Appellant

Versus

ORIX LEASING PAKISTAN LIMITED and 2 others---Respondents

First Appeal No. 24 of 2009, decided on 5th November, 2010.

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

----Ss. 9, 10 & 16(3)---Suit for recovery of outstanding lease rentals and repossession of leased machines on basis of Equipment Lease Agreement---Application to defend suit by principal debtor, dismissal of---Passing of decree by Banking Court---Validity---Principal debtor had not denied financial transaction, execution of entire documents, receipt of leased machines and default in payment of lease rentals--- Principal debtor had attempted to highlight a dispute with other two defendants over disposal of leased machinery during pendency of suit---Such agreement was between plaintiff and principal debtor, whereas other two defendants were not party thereto -- Principal debtor with a view to create a false defence had impleaded in appeal other two defendants as party, whose names were earlier deleted by Banking Court---Personal dispute of principal debtor with other two defendants could not be allowed to be raised in appeal arising from such agreement between him and plaintiff as same was governed by provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---Principal debtor had neither raised any substantial ground in leave application nor complied with requirements of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001---As under the terms of such agreement and provisions of S.16(3) of the Ordinance plaintiff had authority to recover and repossess leased machinery in case of default, High Court dismissed appeal with costs against plaintiff and with special cost of Rs.25,000 against other two defendants payable by principal debtor.

Messrs Waheed Corporation v. Allied Bank of Pakistan 2003 CLD 245; Industrial Development Bank of Pakistan v. Blue Star Hotel (Pvt.) Ltd., and others 2006 CLD 1568; Ms Afshan Ahmed v. Habib Bank Limited 2002 CLD 137; Techno Powergen (Pvt.) Ltd. and others v. Al-Zamin Leasing Modaraba Management (Pvt.) Ltd. and another 2003 CLD 1729 and Rehman Feeds (Pvt.) Ltd. v. Agriculture Development Bank of Pakistan 2001 YLR 2240 ref.

NIB Bank Ltd. v. Muhammad Yasir and another 2011 CLD 243; Habib Bank Limited v. Messrs Sabcos (Pvt.) 2006 CLD 244; Apollo Textile Mills Ltd. v. Soneri Bank Limited Special H.C.a. No. 40 of 2010 and Niaz Muhammad v. Fazal Raqib PLD 1974 SC 134 rel.

Kashif Paracha for Appellant.

Bashir Ahmed for Respondent No.1.

Mushtaq Ahmed Chaudhry for Respondents Nos.2 and 3.

Date of hearing: 5th November, 2010.

2011 C L D 1721

[Karachi]

Before Salman Hamid, J

MY BANK LIMITED---Plaintiff

Versus

Messrs MUSLIM COTTON MILLS (PVT.) LTD. through Chief Executive and 3 others---Defendants

Suit No. B-154 and C.M.As. Nos. 13145, 13146 of 2010, decided on 2nd May, 2011.

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

----Ss. 9(5) & 10---Limitation Act (IX of 1908), S. 5---Suit for recovery of loan amount---Delay in filing application for leave to defend---Application under S.5 of Limitation Act, 1908 for condonation of delay---Defendant's plea that on 1-11-2010, guard of his factory had informed him about Bailiff of High Court to have brought summons of suit, which he refused to collect, where after he rushed to court and obtained copies of pleadings; that he was served through publication of summons in newspaper on 23-10-2010 and filed leave application on 29-11-2010---­Validity---According to S. 9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, service of summons on defendant, if effected by any one of the modes prescribed therein, would be deemed to be valid service---Defendant had neither denied his service on 23-10-2010 through publication nor alleged same to be invalid---Neither choice of defendant would prevail nor would he be allowed to decide as to which mode of service be held to be good out of four prescribed modes---Defendant, despite his service through publication had filed leave application beyond prescribed period of limitation---High Court dismissed leave application for being time-barred.

Sitara Rice Trading and another v. UBL and another 2011 CLD 254; Axle Products Limited v. ABL 2009 CLD 836; Haji Muhammad Yaqoob Akhtar v. HBL and others 2009 CLD 1699; Nazir Hussain and another v. Bank of Punjab through Manager 2007 CLD 687; Hussan Ara and 8 others v. Bank of Punjab through Manager 2006 CLD 1502; Monazam Bibi and 2 others v. Zarai Taraqiati Bank Ltd. through Branch Manager 2006 CLD 836; Allied Bank of Pakistan Ltd. v. Muslim Cotton Mills (Pvt.) Ltd. and 3 others 2011 CLD 393; Simnwa Polypropylene (Pvt.) Ltd. and others v. NBP 2002 SCMR 476; Arshad Ahmed and 2 others v. Trust Commercial Bank Ltd. through Manager 2005 CLD 1705 and Khawaja Muhammad Bilal v. Union Bank Ltd. through Branch Manager 2004 CLD 1555 ref.

Khalid Jawed Khan for Plaintiff.

Shahab Sarki for Defendants.

2011 C L D 1737

[Karachi]

Before Syed Hasan Azhar Rizvi, J

ZULFIQUAR HUSSAIN and 2 others---Petitioners

Versus

BAMBINO (PVT.) LIMITED through Chief Executive Officer---Respondent

J.M. No. 50 of 2010 and C.M.As. Nos. 186, 187 of 2011, decided on 22nd August, 2011.

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

----Ss. 10 & 309---Civil Procedure Code (V of 1908), O.IX, R.13---Application under O.IX, R. 13, C.P.C., for setting aside ex parte winding up order---Maintainability---Civil Procedure Code would not apply to companies matters for being related to special jurisdiction, but only provisions of Companies Ordinance, 1984 would apply thereto---High Court dismissed such application in circumstances.

Muhammad Swaleh and another v. Messrs United Grain and Fodder Agencies PLD 1964 SC 97; Malik Muhammad Nazir v. Mian Abdur Rahim and another PLD 1968 Lah. 792; Maj. Pervez Shakoor and 4 others v. Muhammad Usman 1991 MLD 536; State Life Insurance Corporation of Pakistan v. Nasim-e-Sahar 1992 CLC 563; Feroz Khan v. Muhammad Shuaib 1994 CLC 1462; Noorul Amin and another v. Muhammad Hashim and 27 others 1992 SCMR 1744; Mansoor Textile Mills Limited Shorkot v. Jamail Akhtar Naseeb, Textile Consultant, Faisalabad 2001 CLC 1065; PLD 1986 SC 14; PLD 1976 SC 572; PLD 1976 Lah. 611 and PLD 1987 SC 512 ref.

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

----S. 309---Winding-up petition---Non-impleadment of all directors or shareholders as party in such petition---Effect---­Mere impleadment of company would be sufficient as same covered all directors or shareholders.

Ejaz Ahmed for Petitioners.

Khalid Mehmood Siddiqui for Respondent.

Date of hearing: 20th June, 2011.

2011 C L D 1743

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

VAKIL AHMED SIDDIQUI----Petitioner

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another----Respondents

Constitutional Petition No.D-255 of 2003, decided on 23rd July, 2011.

Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order (I of 1983)---

----Arts. 9 & 32---General Clauses Act (X of 1897), S.24-A---Constitution of Pakistan, Art.199---Constitutional petition---Life Insurance Policy acquired by petitioner from office of Pakistani Insurance Company at Dubai---Demand of Dirham 67,281.32 by company including 100% late fee with further medical examination of petitioner for revival of such policy---Order of Wafaqi Mohtasib directing company to waive mark-up, review late fee and obtain declaration of good health from petitioner instead of medical check-up--- Company's representation against order of Mohtasib upheld by President of Pakistan without giving opportunity of hearing to petitioner---Validity---Exercise of powers by President under S.32 of Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order, 1983 must be in a just and fair manner---Recommendations of Mohtasib could be interfered with only by way of passing a well reasoned and speaking order---Simply affirming or discarding findings of Mohtasib would not be termed as proper dispensation of justice vested in the President---President in the present case, had discarded recommendations of Mohtasib without giving even a single reason and in a very hasty manner---President had not disposed of matter in a legal and judicious manner by fulfilling norms of law---High Court set aside impugned order and directed company to implement recommendations of Mohtasib within specified time.

Federation of Pakistan v. Muhammad Tariq Pirzada 1999 SCMR 2744; Federation of Pakistan v. Muhammad Tariq Pirzada 1999 SCMR 2189 and State Life Insurance Corporation and another v. Jaffar Hussain and others PLD 2009 SC 194 rel.

Petitioner in person.

Ghulam Ali for Respondent No.1.

Date of hearing: 2nd June, 2011.

2011 C L D 1757

[Karachi]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

SAEED ABBAS----Petitioner

Versus

AGAR INTERNATIONAL (PVT.) LTD. through Director----Respondent

High Court Appeal No. 192 of 2010, decided on 3rd August, 2011.

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

----Ss. 4, 5, 6, 118, 123-A, 124, 129 & 130--- Civil Procedure Code (V of 1908), O. XXXVII, R. 2---Suit for recovery of money on basis of dishonoured cheque or dishonoured crossed-cheque---Maintainability---Cheque being a negotiable instrument, thus, bank would be bound to place into account of payee amount indicated thereon when collected and not into any other account---When cheque was dishonoured, then its payee could sue its drawer and get decree against him for recovery of its amount---Cheque, if crossed "account payee", would cease to be negotiable and banker collecting its payment would be bound to put same in account of its payee---Provisions of 0. XXXVII, C.P.C., would apply to all bills of exchange whether negotiable or not---Suit upon a cheque crossed "account payee" would be maintainable under O.XXXVII, C.P.C.---Principles.

According to provisions of sections, 4, 5, 6, 118 and 123 of Negotiable Instruments Act 1881, a cheque is a negotiable instrument, which may be negotiated, and the Bank has the duty to place into the account of payee the amount indicated on the cheque when collected and not into any other account. However, so far as crossed cheque is concerned, the same is to be dealt with under specific provisions like sections 123-A, 124, 129 and 130 of the Negotiable Instruments Act. When a cheque is dishonoured, the payee can sue for an action for the payment of amount of cheque from its drawer, meaning thereby that if a person gives a cheque for the amount due to be presented at a certain bank on a certain date, and if a cheque is dishonoured on presentation, a person can sue for consideration and get the decree for recovery of that amount in his favour. A cheque is a negotiable instrument resembling a bill of exchange, but entirely different, in the ordinary course, it is not intended for a circulation, but it is meant for the payment to the person on whose name the said cheque was made. Section 6 defines the cheque as a "bills of exchange" drawn on a specific bank and not expressed to be payable otherwise than on demand. The drawer must be a person, who enter into the contract and should be pointed out with certainty and his signatures on the cheque has to be obtained. Whenever a cheque is dishonoured, then in such cases execution has been admitted and it is presumed that the said cheque was executed for the consideration mentioned therein and the drawer could hardly wriggle out of the situation that the said cross cheque was meant for any other consideration other than mentioned on the said cheque. The onus in this regard squarely lies on the drawer. Even on reading of section 123-A of the Act, it is clear that when cheque is crossed account payee, it will cease to be negotiable and it will be the duty of the banker collecting payment of cheque to put the same in the account of the payee mentioned in said cheque. However, if the section 123-A of the Act is read with Order XXXVII, C.P.C., which applies to all bills of exchange whether negotiable or not, a suit upon a crossed cheque account payment only is maintainable. The provisions of Order XXXVII, C.P.C., are not only relevant in negotiable instruments only, but apply to crossed cheques also.

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

---Ss. 6, 118 & 123---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 2 & 3---Suit for recovery of money on basis of dishonoured crossed-cheque---Non-filing of leave application by defendant---Defendant's objection raised at time of final disposal of suit that cheque was issued in name of "Agar Corporation", thus, suit on its basis filed by "Agar International Limited" was not maintainable---Validity---Defendant's counsel did not deny that in past, defendant had been issuing cheques to plaintiff-company in name of "Agar Corporation Limited"---Defendant's counsel did not deny that in past, bills pertaining to "Agar International Limited" had been issued by defendant in name and style of "Agar Corporation"---Such admissions of defendant's counsel fully established that bills and cheques issued in past pertained to plaintiff-company, thus, defendant now could not take somersault by stating that cheques were issued by him in name of "Agar Corporation" and not in name of Agar International Limited---Bank statement of accounts showed that all previous bills and cheques issued by defendant were in name of "Agar Corporation" and encashed, except suit cheques dishonoured with specific remarks of bank "due to insufficient funds"---Defendant in his letter had requested plaintiff to hold suit cheques till specified month and had apologized for inconvenience---Magistrate in F.I.R. lodged against defendant under S.489-F, Cr.P.C., had convicted and sentenced him---Plaintiff-company in its audited report had shown suit amount to be outstanding against defendant---Such uncontroverted facts showed that defendant had, in consideration of business dealings, handed over suit cheques to plaintiff to be encashed as past practice and by dishonouring same, defendant had exposed himself to legal action against him---High Court decreed suit amount along with an interest of 10% per annum from date of suit till recovery of entire decretal amount.

Muhammad Tariq Khan v. Khawaja Muhammad Javed Ansari 2007 SCMR 818; Muhammad Ayub v. Barkat Ali Shah 2011 CLC 349; Messrs C.M. Textile Mills (Pvt.) Ltd. v. ICP 2004 CLD 587; Ponnuswami Chetiar v. P. Velai Muthu Chetiar AIR 1957 Mad. 355; Zujya Pascol Damel v. Manmohandas Lalubhai Partap AIR 1940 Bombay 164; Karachi Road Transport Corporation v. Fazal Brother Limited and another PLD 1971 Kar. 583; M. Muhammad Shafi and Co. v. A. Rehman Enterprises and others 2010 CLD 920 and Muhammad Sultan v. The State 2010 SCMR 806 ref.

Syed Hassan Ali for Appellant.

Kazi Abdul Hameed Siddiqui for Respondent.

Date of hearing: 30th May, 2011.

2011 C L D 1770

[Karachi]

Before Syed Hasan Azhar Rizvi, J

STANDARD CHARTERED BANK (PAKISTAN) LIMITED---Plaintiff

Versus

ADMORE GAS (PVT.) LIMITED and 6 others---Defendants

Suit No. B-133 and C.M.A. No. 11536 of 2010, decided on 16th August, 2011.

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

----Ss.9 & 10---Suit for recovery of loan amount by Bank---Dismissal of defendant's leave application for non-prosecution---Effect---Documents produced along with plaint showed availing of finance by defendant and his failure to liquidate liabilities as per terms of Finance Agreements and security documents executed by him---High Court decreed the suit in circumstances.

Ijaz Ahmed Shirazi for Plaintiff.

Nemo for Defendants.

2011 C L D 1779

[Karachi]

Before Syed Hasan Azhar Rizvi, J

Messrs A.M. INDUSTRIAL CORPORATION LIMITED: In the matter of

Judicial Miscellaneous No.4 and C.M.A. No. 80 of 2010, decided on 16th August, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 309--- Winding-up petition---Non-appearance of respondents and non-filing of objections, affidavits or counter-affidavits by them to deny contents of such petition---Effect---Contents of such petition would be deemed to be true, correct and acceptable---High Court accepted such petition.

Jehan Khan v. Province of Sindh and others PLD 2003 Kar. 691 and Mehmood-ul-Hassan and another v. Baig Industries (Pvt.) Ltd. and others 1997 CLC 1577 rel.

Muhammad Mustafa Hussain for Petitioner.

2011 C L D 1812

[Karachi]

Before Muhammad Tasnim, J

THE BANK OF PUNJAB---Plaintiff

Versus

NINA INDUSTRIES LIMITED and 5 others---Defendants

Suit No. B-152 and C.M.A. No. 11223 of 2009, decided on 10th May, 2010.

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

----S. 9--- Civil Procedure Code (V of 1908), S. 75(c)---Recovery of bank loan--- Financial liability---Determination---Local commissioner, appointment of---Bank filed suit against defendant for recovery of finance facility availed---Both the parties agreed to get the accounts scrutinized by Chartered Accountant---Effect---High Court with the consent of parties appointed a Chartered Accountant's firm as Commissioner to scrutinize accounts of parties---High Court directed the parties to provide entire record pertaining to the finance/loan to the Commissioner who would scrutinize the record to ascertain quantum of finance and payments made by defendant, including mark up calculated on the finance in pursuance to finance agreement---High Court directed the Commissioner/ Chartered Accountants firm to furnish detailed report of accounts--- Application was allowed accordingly.

Jam Asif Mehmood for Plaintiff.

Adnan Choudhry for Defendant.

2011 C L D 1

[Lahore]

Before Umar Ata Bandial and Muhammad Ashraf Bhatti, JJ

AKHTAR ALI---Appellant

Versus

MUHAMMAD SHOIAB AHMAD---Respondent

R.F.A. No. 68 of 2008, decided on 10th September, 2009.

Defamation Ordinance (LVI of 2002)---

----Ss.5 (h) & 6---Civil Procedure Code (V of 1908), O. VII, R.11--Rejection of plaint---Defamation--Proof--Essentials---Annual Confidential Report--Nature---Plaintiff, a civil servant was aggrieved of the comments in his Annual Confidential Report, prepared by defendant another civil servant---Trial Court rejected the plaint for non-disclosure of cause of action--Validity---For wrongful act defamation to be committed it was necessary that communication of defamatory material be made to "at least one person other than the person defamed"---To prove defamation, recipient of communication were necessary to allege that plaintiff ridiculed-Plaint lacked any such particulars of "communication" and wrong of defamation was incomplete without communication--Annual Confidential Report of a government servant contained confidential opinion given by reporting officer about service credentials, performance and capabilities of his subordinate officer---As name of the report suggested, such remarks were made in strict confidence under the provision of law---Annual Confidential Reports formed part of the record of competent authority in government for determining service prospects and capabilities of officer commented upon; it was essential that an objected communication and the person to whom it was made be stated in pleadings---Particulars about slander were given to the extent that essential ingredients of falsity of statement, injury to reputation or exposure to a claim in consequence of false statement, must be evident from pleadings--Plaint in the suit had been rightly rejected for non-disclosure of cause of action and High Court declined to interfere in the order passed by Trial Court--Appeal was dismissed in circumstances.

M. Akhtar Ali Chaudhry for the Appellant.

2011 C L D 10

[Lahore]

Before Umar Ata Bandial, J

JUBILEE SPINNINGS WEAVING MILLS LTD.---Petitioner

Versus

JUBILEE ENERGY LTD.---Respondent

C.O.No.42 of 2008, decided on 29th May, 2009.

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

---Ss. 284 & 287-Merger of companies---Principles--Creditors, role of---Scheme under S.284 read with S.287 of Companies Ordinance, 1984, is not a tool in the hands of a creditor to recover money or to coerce the company to pay---Court may direct payment or direct that a creditor or any class of them should be paid their dues or they be substantially secured, before the Court sanctions scheme of merger---Debtor company may dispute an overdue debt or a creditor may be fully secured for recovery, therefore, an objector's call must have a wider reach---Objection would have force if merger scheme is shown to be mala fide or fraudulent or against public interest or unjust to the interests of a class or all creditors of merging company.

International Multi Leasing Company v. Capital Assets Leasing Corporation Limited and another 2004 CLD 1; Mayfair Ltd.'s Case (2003)46 SCL 672 and Zee Interactive Multimedia Ltd.'s Case (2002)111 Comp. Case 733. (Bom.) rel.

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

----Ss.284 & 287--Merger of companies---Objections---Rights of secured creditors--Duty of court---Petitioner companies sought their merger on the ground that creation of a single entity after merger would save administrative expenses/over heads, enhance profitability of the entity and would be to the advantage of shareholders jointly and severally--One of the secured creditors objected to the scheme of merger as the merging company was in continuous default of instalments of bank loan---Validity---Court was not supposed to sit in judgment over the commercial wisdom of shareholders and management of one petitioner company to pursue a business contemplated in its objects clause as long as the same did not infringe its charter covenant or any mandatory law of land---Court would, however, react if the scheme was shown to be contrary to law or shocking to its conscience or if it was patently unfair to the members or creditors or any class of them or was against public interest or contrary to public policy---Court would not stand in the way of new business plans of entrepreneurs by rejecting their bona fide scheme---Objection raised by lending bank lacked relevance and substance for the purposes of merger and the same was rejected---Neither other opposition to the petition by any other interested persons nor other ground to refuse sanction of the scheme was on record---All necessary procedures had been complied and the court was satisfied that the proposed scheme of amalgamation was reasonable and that it was in the best interest of petitioner companies and all concerned---High Court accorded sanction to the scheme of amalgamation of petitioner companies---Petition was allowed in circumstances.

Mahmood Power Generation Limited and Mahmood Textile Mills Limited v. Joint Registrar of Companies and others 2006 CLC 1364 ref.

Imran Anum Alvi with Asif-ur-Rehman for the Petitioners.

Tariq Kamal Qazi for the Objector (NBP).

Muhammad Saqlain Arshad, Assistant Director Legal, SECP.

2011 CLD 18

[Lahore]

Before Umar Ata Bandial, J

Ms. SAFINA ASLAM and others---Petitioners

Versus

MUSLIM COMMERCIAL BANK and another---Respondents

Writ Petition No.6904 of 2009, heard on 1st June, 2010.

Prudential Regulations for Consumer Finance of State Bank of Pakistan Regulations---

---Regln.6-BPRD Circular No.13 of 2008-Constitution of Pakistan, Art.199---Constitutional petition-Consumer financing-Car loan-Repossession of vehicle--Principle-Petitioner got loan from respondent bank for purchase of vehicle--Bank without any prior notice, snatched the vehicle from petitioner on the allegation of default in payment of instalment of loan-Validity-Prudential Regulations for Consumer Financing were framed by State Bank of Pakistan to ensure fair treatment by financing bank with its customers-Prudential Regulations were supplemented by BPRD Circular No.13 of 2008 of State Bank of Pakistan issued in December, 2008, which required a bank to give 14 days' prior written notice before undertaking repossession of leased vehicle-Prior notice had the utility of providing an opportunity to a customer to avoid repossession of his leased asset-Notice relied upon by bank notified termination of finance by demanding entire balance amount of finance from petitioner and had threatened legal action-Such notice neither warned repossession of vehicle nor indicated an outstanding amount for payment to avoid adverse action thus excluding an opportunity for petitioner to regularize car finance-Legal duties/obligations of State Bank of Pakistan were enforceable by High Court in its constitutional jurisdiction-Failure to satisfy Prudential Regulations for Customer Finance of State Bank of Pakistan Regulations; BPRD Circular No.13 of 2008 and also bank's own repossession policy in relation to the action of bank was arbitrary-Respondent bank failed to discharge its duties under the regulatory framework of State Bank of Pakistan High Court referred the matter to State Bank of Pakistan for taking action and granting relief against bank in accordance with law for violation of bank's duties under State Bank of Pakistan's regulatory framework in relation to bank's commercial dealings with petitioner, who was its customer Petition was disposed of accordingly.

Hashwani Hotels Limited v. Federation of Pakistan and others PLD 1997 SC 315 ref.

Muhammad Yaseen Farrukh Kamboh for Petitioners.

Ahsan Masood for Respondents.

Date of hearing: 1st June, 2010.

2011 CLD 37

[Lahore]

Before Umar Ata Bandial, J

CRESCENT COMMERCIAL BANK NOW SAMBA BANK LTD.---Plaintiff

Versus

GENERTECH PAKISTAN LTD.---Defendants

C.O.S No.45 of 2008, decided on 19th August, 2010.

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

----S.9-Recovery of bank loan---Restructured finance---Claim of mark-up-Finance facility amount claimed to have been provided by plaintiff--bank to defendants was in the nature of restructured arrangement---No disbursement of funds had taken place pursuant to the agreement of finance---Effect---Claim of mark-up on such restructured amount was not maintainable---Claim for overdue amounts on principal account in respect of restructured finance of defendant company was duly substantiated by several documents executed and actions taken by defendants---In the context of restructured facility the absence of fresh disbursement was immaterial--Suit was decreed in favour of plaintiff accordingly.

Bankers Equity Ltd. through Principle Law Officer and 5 others v. Messrs Bentonite Pakistan Ltd. and 7 others 2003 CLD 931; ADBP v. Modern Leathers Ltd. 2007 CLD 1424 and Habib Bank Ltd. v. Taj Textile Mills Ltd. through Chief Executive and 5 others 2009 CLD 1143 ref.

Mian Sultan Tanvir Ahmed for Plaintiff.

Nemo for the Defendants.

2011 C L D 75

[Lahore]

Present Shaukat Umar Pirzada and Muhammad Naseem Akhtar Khan, JJ

Messrs BERRY FOOD INDUSTRIES and others---Appellants

Versus

MUSLIM COMMERCIAL BANK LTD.---Respondent

Regular First Appeal Case No.116 of 2005, heard on 24th August, 2010.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), S.144---Recovery of bank loan---Leave to defend suit---Bank claimed recovery of amount of Rs.117,922.70 with costs of funds at the agreed mark up @ of 0.761 paisa per thousand rupees per day---Defendant took plea in the application for leave to defend that he had not signed the execution of charge and security documents---Defendant also filed an application under S.144, C.P.C. for the refund of Rs.600,000 which was deposited by him in discharge of partial liability determined through ex parte decree passed by Banking Court earlier against him, to stop execution proceedings---Banking Court dismissed both applications of the defendant through consolidated judgment and decree---Validity---Contention of the defendant with regard to execution of charge and security documents was evasive and vague---Statement of account showed that disbursement of facility started in the year 2.000--Mere disputing the validity of the documents by not invoking any legal course to have them adjudged forged and fabricated despite the fact that the suit was filed about 10 years ago, effectively belied the defence/contention of the applicant that documents were not executed by him---Contention of the defendant that application under S.144, C.P.C. should not have been decided along with the petition for leave to defend the suit rather the same should have been decided first, was a mere technical objection without entailing any serious consequences and of no substance, particularly, after rejection of his petition for leave to defend the suit and passing of impugned judgment and decree by the Banking Court---High Court declined to interfere in the judgment and decree passed by Banking Court and dismissed appeal with costs throughout.

2003 CLD 606; 2004 SCMR 1956; 2004 CLD 587 and 2005 CLD 1417 ref.

Bank of Khyber v. Messrs Spencer Distribution Ltd. and 14 others 2003 CLD 1410 rel.

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

----S. 9(1)---Recovery of bank loan---Contention of the defendant was that suit filed was not instituted by the duly authorized person---Scope---Suit was filed and signed by Branch Manager of the Bank who was fully authorized under S.9(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Faysal Bank Limited v. Genertech Pakistan Ltd. and 6 others 2009 CLD 856 rel.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), S.144--Recovery of bank loan---Rejection of application to leave and defend suit---Contention of the defendant that application under S.144, C.P.C. should not have been decided along with the petition for leave to defend the suit rather the same should have been decided first was a mere technical objection without entailing any serious consequence and of no substance, particularly after rejection of defendant petition for leave to defend the suit and passing of impugned judgment and decree by the Banking Court---Banking Court had rightly rejected the application under S.144, C.P.C.

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

----Ss. 9 & 10---Suit for recovery of bank loan----Contention of the defendant was that statement of account filed by the bank was not correct, therefore, no decree could be passed on the basis of said statement of account---Defendant had failed to point out any error in the entries of the statement of account and had simply relied on the bank note that present balance not tallying with the merger computational balance; which note was of no consequence particularly when entries contained in the statement of account stood unrebutted and no specific error had been pointed out therein which impliedly amounted to an admission as to its correctness by the other party .

Syed Waqar Hussain Naqvi for Appellant.

Bilal Kashmiri for Respondent.

Date of hearing: 24th August, 2010.

2011 CLD 92

[Lahore]

Before Iqbal Hameed-ur-Rahman, J

HABIB BANK LTD. through duly Authorized Attorneys---Plaintiff

Versus

FAIQA TRADING COMPANY (PVT.) LTD. through Director and Chief Executive Officer and 5 others---Defendants

Civil Original Suit No.5 of 2010, decided on 28th June, 2010.

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

----Ss. 9 & 10---Suit for recovery of bank loan---Application for leave to defend suit---Defendants had executed documents which had not been denied by them-Finance facility had also been extended and renewed on the request of defendants---Contention raised by defendants was that there had been a mis-calculation on the part of defendants and that the defendants had made an excess payment of Rs.201,747---Validity---Statement of account attached with the plaint depicted the availing of the finance facility and thereafter, its subsequent disbursement, extention and renewal were duly reflected in the same which showed credit and debit articles---Perusal of sanction letter revealed that the mark-up had rightly been calculated as agreed in the same---Contention of the defendants that they had made an excess amount of Rs.201,747 to the bank was not sustainable---Defendants could not succeed in raising any question of law and fact which needed recording of evidence---High Court decreed suit along with cost and cost of funds and dismissed application for leave to defend.

Muhammad Ramzan v. Habib Bank Limited 2005 CLD 1376 ref.

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

----Ss. 9 & 19---Execution of decree---Under S.19(1) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the judgment-debtors were afforded 30 days to satisfy the decree; thereafter, the suit stood converted into execution proceedings without the need to file a separate execution petition and no fresh notice needed to be issued to the judgment-debtors---Decree-holder should file Particulars of the mortgaged, pledged, hypothecated properties and other assets of the judgment-debtors.

Usman G. Rashid for the Plaintiff.

Sardar Mashkoor Ahmad for Defendants Nos. 1 to 5.

Mian Qamar-uz-Zaman for Defendant No.6.

2011 C L D 157

[Lahore]

Before Iqbal Hameed-ur-Rahman, J

NATIONAL BANK OF PAKISTAN through S.V.P. SAMG (North)---Applicants

Versus

Messrs TAJ TEXTILE MILLS LTD. through Chief Executive and 4 others-Respondents

Execution Application No.16/B, C.M. No.428-B of 2008 in C.O.S. No.5 of 2002, decided on 18th October, 2010.

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

----S. 19--Civil Procedure Code (V of 1908), Ss.48, 151, O.XXI, R.22 & O.XXIII, Rr.1, 2, 3---Execution petition---Objection to execution petition on the ground of limitation---Validity---Judgment-debtors had accepted the terms and conditions of the compromise which formed the basis of consent decree; their guarantees were continuing so they were liable to discharge the outstanding liabilities---Under S.19, Financial Institutions (Recovery of Finances) Ordinance, 2001 decree passed by a Banking Court would automatically be converted into execution petition, therefore, limitation in such a case would run from the date of passing of the final consent decree---Execution petition, in circumstances, was not time-barred---Application was dismissed.

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

----S. 19---Judgment and decree by Banking Court--Limitation--Judgment and decree by Banking Court would automatically stand converted into execution petition and limitation would run from the date of passing of the final decree.

Munawar-us-Salam for Applicants.

Noor Muhammad Khan Chandia for Respondents.

2011 C L D 186

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

MAZCO INDUSTRIES LTD. ---Plaintiff

Versus

HABIB BANK LTD. and others---Defendants

C.O.S. No.98 of 2010, heard on 28th July, 2010.

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

----Ss. 2, 9 & 10---Specific Relief Act (I of 1877), Ss.42 & 54---Civil Procedure Code (V of 1908), O. VII, Rr.10 & 11---Suit against principal debtor and Bank for declaration, permanent injunction and recovery of amount---Failure of principal debtor to discharge his financial obligations with Bank through sale of pledged goods--Plaintiff's plea that he at inducement of Bank agreed, to purchase pledged goods against payment to credit of principal debtor and as such he was indemnifying Bank; that Bank later on illegally stopped delivery of pledged goods despite receiving its price, due to which plaintiff suffered huge loss for failing to fulfil commitment with his customers---Leave applications by defendants seeking rejection or return of plaint on ground of lack of jurisdiction of Banking Court and in alternative unconditional leave to defend suit on grounds that neither plaintiff was customer of Bank nor did any agreement exist between plaintiff and Bank nor had plaintiff claimed any relief against Bank---Validity---Held, it was necessary for invoking jurisdiction of Banking Court that subject-matter of suit should be finance and plaintiff should be a customer of financial institution---Customer would be that person to whom finance was extended by a financial institution or on his behalf a guarantee or letter of credit was issued by a financial institution or who was a surety or an indemnifier---Plaintiff had not claimed that principal debtor had caused any loss to Bank and for payment of such loss, plaintiff was depositing into account of principal debtor---Plaintiff was receiving pledged goods against payment into account of principal debtor, thus, no privity of contract existed between plaintiff and Bank---Bank had not allowed any finance to plaintiff nor plaintiff had executed an agreement of indemnity in favour of Bank on behalf of principal debtor--Not necessary in contract of indemnity for indemnifier to act at request of debtor---In absence of any agreement of indemnity, inference would be that Bank was acting on instructions of principal debtor and was releasing its security of finance against repayment of finance-Bank was not party to any agreement between plaintiff and principal debtor regarding purchasing of pledged goods---Banking Court had no jurisdiction to decide alleged controversy--Plaint was returned for its presentation before competent court in circumstances.

Shahid Ikram Siddiqui for Plaintiff.

Majid Ali Wajid for Defendant No.1.

Iftikharullah Malik for Defendant No.2.

2011 C L D 238

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

KHALID MAHMOOD---Appellant

Versus

TANDALIANWALA SUGAR MILLS LTD. through Manager Personnel and Administration, Faisalabad---Respondent

R.F.A. No.243 of 2002, decided on 15th September, 2010.

Negotiable Instruments Act (XXVI of 1881)---

---Ss. 4 & 13---Civil Procedure Code (V of 1908), O.XXXVII, R.2---Suit for recovery of amount on basis of promissory note-Part-payment made by defendant out of amount of promissory note admitted by plaintiff-Effect-Promissory note' being against consideration contained unconditional promise of executor to pay its amount on demand-Promissory note in case of such part-payment stood converted into subsequent agreement under which part-payment was made and adjusted, thus, same lost its credibility and enforceable under special law-In case of such part-payment, suit on basis of original promissory note could be filed before Civil Court under its ordinary jurisdiction, but not under special jurisdiction of O.XXXVII, C.P.C.-Plaint was returned to plaint for its presentation before competent Court---Principles.

Inayat Ullah Ch. for Appellant.

Komal Malik Awan for Respondent.

Date of hearing: 28th July, 2010.

2011 C L D 254

[Lahore]

Before Mansoor Akbar Kokab and Ch. Muhammad Tariq, JJ

Messrs SITTARA RICE TRADING and another---Appellants

Versus

UNITED BANK LIMITED and another---Respondents

R.F.A. No.3 of 2006, decided on 20th October, 2010.

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

---S. 10(2)---petition for leave to defend suit---Banking Court dismissed defendant's application for leave to defend for being time-barred by computing period of limitation from the date of issuance of notice through courier service and proclamation in newspapers---Validity---Date of knowledge had to be computed from the delivery of notice either through courier service or registered mail---Application of defendant was not time-barred as limitation would run from receipt of notice through courier service or registered mail and not from the issuance of the notice or date of publication of proclamation in newspapers which had been rendered irrelevant for limitation purposes sifter specific date had been notified for appearance of defendant---Trial Court should not have declined leave to defend the suit on a technicality especially when defendant had paid substantial portion of liability---Appeal was accepted and impugned order was set aside---Case was remanded to Trial Court with direction to consider the application for leave to defend the suit to have been granted.

Fauzi Zafar for Appellant.

Rana Zahoor Ali Khan for Respondent.

2011 C L D 280

[Lahore]

Before Ch. Shahid Saeed and Muhammad Naseem Akhtar Khan, JJ

MUHAMMAD AMIN alias JALOO---Appellant

Versus

JUDGE BANKING COURT and others---Respondents

F.A.O. No.18 of 2006, heard on 19th May, 2010.

(a) Auction---

----Bidding---Procedure---Bidder has always to start from reserve price and Court auctioneer has nothing to do except the permission of the Court.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, Rr.66, 89 & 90---Execution of decree---Sale through auction---Auction proceedings---Reserve price, non fixation of---property owned by judgment-debtor was sold through auction under execution of decree passed against him---plea raised by judgment-debtor was that valuable property was auctioned without fixing any reserve price by Executing Court---Validity---Provisions of O.XXI, R.66, C.P.C. were mandatory in nature and without full-filing basic requirements, if some auction had taken place that would not be considered to have been lawfully made---Specific order under O.XXI, R.66, C.P.C. was required, of the Court which produced the effect of drawing proclamation envisaging terms and conditions of sale--Intention of law was to fix reserve price in proclamation to safeguard rights of judgment debtor---Executing Court as well as Court Auctioneer committed material irregularity while conducting auction and accepting bid without fixing reserve price of the land, as neither the reserve price was mentioned in the order of auction nor any other terms and conditions were mentioned therein even notice to judgment debtor' was not served---Reserve price which was fixed by Court Auctioneer had no nexus with market price as such the same was without lawful authority and auction which took place was also illegal---Order passed by Executing Court was set aside and auction proceedings were declared illegal and without lawful authority, as the order for putting the property to auction was not speaking one---Appeal was allowed accordingly.

Malik Saeed Ijaz for Appellant.

Zameer Ahmad Khan and Aziz-ur-Rehman for Respondent No.2.

Date of hearing: 19th May, 2010.

2011 CLD 312

[Lahore]

Before Tariq Javaid and Syed Akhlaq Ahmad, JJ

BHATTI COTTON LINKS through Muhammad Iqbal Bhatti and 2 others---Appellants

Versus

BANKING COURT NO.IV, LAHORE and another---Respondents

R.F.A. No.7 of 2009, heard on 19th October, 2010.

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

----S. 10---Suit for recovery of loan amount by Bank---Dismissal of application for leave to defend suit of defendant on merits in his absence without placing him ex parte and without reference to ground taken therein--Plea of defendant was that on the relevant date, Banking Court had to decide first the application of Bank for obtaining ex parte order against other defendant, whereas he was told that no proceedings would take place on his leave application on such date---Validity---Impugned order was not a speaking order as Banking Court had not given any reason while dismissing leave application---Defendant had been condemned unheard as he was not given a fair opportunity of hearing on his leave application, which was not fixed for hearing on relevant date---High Court set aside impugned order and remanded case to Banking Court for decision of leave application afresh.

Dr. A. Basit and Rana Muhammad Mahtab for Appellant.

Jahangir Ikram and Syed Khurshid-ul-Hassan for Respondents.

Date of hearing: 19th October, 2010.

2011 C L D 316

[Lahore]

Before Mian Saqib Nisar and Hafiz Tariq Nasim, JJ

MUHAMMAD ASIF---Appellant

Versus

ZARAI TARQIATI BANK LIMITED, PHALIA MANDI, BAHAUDDIN and 3 others---Respondents

F.A.O. No.10 of 2008, decided on 3rd February, 2009.

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

---Ss. 19 & 22---Execution, proceedings---Sale of mortgaged property---Appellant's property having been mortgaged with the respondent bank, without first seeking the sale of the property for the satisfaction of decree, no warrants of arrest of the appellant could be issued---Order issuing warrant of arrest having been passed without jurisdiction was declared unlawful and was set aside, in circumstances.

Precision Engineering Limited and others v. The Grays Leasing Limited PLD 2000 Lah. 290 ref.

Nazeer Ahmad for Appellant.

Muhammad Shuja Baba for Respondent.

2011 C L D 507

[Lahore]

Before Sh. Ahmad Farooq, J

Messrs NASIR NAWAZ through Muhammad Bukhsh---Petitioner

Versus

ASSISTANT DIRETOR, MINES AND MINERAL and 4 others---Respondents

Writ Petition No.13779 of 2010, decided on 23rd July, 2010.

Punjab Mining Concession Rules, 2002---

----R. 235(2)---Constitution of Pakistan, Art.199---Constitutional petition--Auction, cancellation of---Vested right---Petitioner claimed to be highest bidder and assailed the order of competent authority whereby auction was cancelled---Validity---Not only that orders passed by competent authority was in exercise of powers under R.235(2) of Punjab Mining Concession Rules, 2002 but also after giving opportunity to the petitioner of being heard---Fresh auction of area in question was to be held soon and petitioner would be at liberty to take part in forthcoming auction---Petitioner had no vested right for obtaining lease of area in question merely on the basis of acceptance of his highest bid vide letter issued by competent authority---Order declaring petitioner as highest bidder was already set aside by lease granting authority, therefore, High Court declined to interfere in the matter---Petition was dismissed in circumstances.

Ch. Irshad Ullah Chattha for Petitioner.

Jawad Hassan, Addl. A.G. with Rashid Mahmood and Muhammad Ramzan, Deputy Director, Mineral, Lahore Region.

2011 C L D 523

[Lahore]

Before Kh. Imtiaz Ahmad and Shaukat Umar Pirzada, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN through Branch Manager, Principal Officer---Appellant

Versus

MUHAMMAD SULEMAN KHAN and others---Respondents

R.F.A. No. 143 of 2003, decided on 3rd October, 2010.

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), S.11 & O.VII, R.11---Suit for recovery of loan---Res judicata, principle of --Applicability---Scope---Dismissal of suit---Suit by appellant (Bank) was dismissed by Banking Court under S.11 of Civil Procedure Code, 1908---Plea raised by borrower was that earlier the claim of the Bank was decreed on the basis of compromise in the year 1999 in a suit filed by Bank which was conditional and both the parties were obliged to fulfil their respective conditions imposed on them by the Banking Court; however the Bank had failed to fulfil its condition to deposit the court fee by 4-12-1999 which had resulted into dismissal of its claim, which could not be re-agitated in view of the bar contained in S.11, C.P.C.---Contention raised by the Bank was that Banking 'Court could not dismiss the recovery suit and at the most only the plaint could be rejected---Validity---Contention of the Bank that through impugned order of the Banking Court, it could reject the plaint and not dismiss the suit was without substance, because the decree passed in the year 1999 was conditional and non fulfilment whereof by the Bank had resulted in dismissal of its claim---Controversy between the parties had been finally settled between them through consent decree, therefore, the said suit was hit by the principle of res judicata---Such suit was not maintainable and the Bank was estopped to bring a fresh suit against the borrower on the subject matter---Banking Court had rightly dismissed the suit of the Bank---Appeal was dismissed by High Court.

Sher Muhammad and 2 others v. Aroora 1984 CLC 3292; PLD 1963 Dacca 816; 1991 MLD 2295; 1991 MLD 57 and PLD 1992 SC 822 ref.

PLD 2004 SC 1987 rel.

Mian Abdul Aziz Naseem for Appellant.

Ishfaq Ahmad Khan for Respondents.

2011 C L D 533

[Lahore]

Before Rauf Ahmad Sheikh and Ch. Muhammad Tariq, JJ

NADEEM KAMRAN and another----Appellants

Versus

WASEEM AKHTAR TAREEN----Respondent

Regular First Appeal No.325 of 2005, heard on 30th November, 2010.

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

----S. 4---Civil Procedure Code (V of 1908), O. XXXVII, R.2---Recovery suit---"Promissory note"---Essentials---Trial Court decreed the suit---Defendants contended that promissory note was executed by them as security and not for payment, therefore, matter pertained to rendition of accounts and suit under O.XXXVII, C.P.C. was not maintainable---Validity---For a document to become a 'promisory note', four conditions were necessary, namely, an unconditional undertaking to pay; sum of money should be certain; the payment should be to, or to the order of a certain person, or to the bearer of the instrument and the maker should sign the document---Defendant's contention that they had not received the amount in cash so the promissory note in question was not valid document and it was not correct that as a promissory note was merely a promise to pay a certain amount at a certain time---Promissory note in question was a valid 'promissory note' as defined by S.4 of the Negotiable Instruments Act, 1881---Defendants had admitted to have received the stock and made the part payment of the same----Defendants failed to point out any illegality in the impugned judgment or misreading of evidence---Appeal was dismissed in circumstances.

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

----S. 4---Constituents of a 'promissory note'---For a document to become a promissory note, four conditions were necessary, namely, (i) an unconditional undertaking to pay (ii) sum of money should be certain (iii) the payment should be to, or to the order of a certain person, or to the bearer of the instrument (iv) the maker should sign the document.

Ch. Nazir Ahmad Kamboh for Appellants.

Sajid Latif Hanjra for Respondent.

Date of hearing: 30th November, 2010.

2011 CLD 704

[Lahore]

Before Ijaz Ahmad Chaudhry, C J

MUHAMMAD MAZHAR IQBAL---Petitioner

Versus

THE STATE and another---Respondents

Criminal Miscellaneous No.12134-CB of 2010, decided on 20th December, 2010.

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

----S. 20(4)---Penal Code (XLV of 1860), S.489-F---Criminal Procedure Code (V of 1898), S.497(5)---Dishonestly issuing a cheque---Pre-arrest bail, cancellation of--According to F.I.R. accused had availed a loan facility of Rupees twelve million from the Bank---Cheques issued by the accused towards repayment of this loan amount had been dishonoured on presentation in the Bank---Contention of the defence counsel was that the contents of the F.I.R. had depicted a matter of recovery of loan, which could be recovered by the complainant by filing a complaint under S.20 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, so no criminal case could have been registered against the accused and he had been rightly allowed pre-arrest bail---Complainant, no doubt, could file a complaint under S.20(4) of the said Ordinance, but the Bank was not debarred from getting the criminal case registered against the accused under. S.489-F, P.P.C.---Complainant had the prerogative to get redressed his grievance through efficacious and speedy remedy of his choice and no objection from the other side in this regard could be entertained---Ingredients of S.489-F, P.P.C. were fully attracted---Accused had not bothered to arrange for the return of loan according to agreement, which showed mala fides on his part---Dishonour slips issued by the Bank available on record had connected the accused with the offence---Parameters laid by Superior Courts for grant of pre-arrest bail had been ignored by trial Court---No ill-will or personal grudge on the part of the complainant or the police was pointed out on behalf of accused for his false implication in the case---Bail granted to accused was cancelled in circumstances.?

Saeed ul Hassan Jaffri for Petitioner.

Abdus Samad, Additional Prosecutor-General with Khurshid, A.S.-I.

Sahir Mahmood Bhatti for Respondent No.2.

2011 CLD 746

[Lahore]

Before Ijaz ul Ahsan and Muhammad Farrukh Irfan Khan. JJ

STATE LIFE INSURANCE CORPORATION---Appellant

Versus

RAZI-UR-REHMAN---Respondent

E.F.As. Nos. 724 to 729 of 2010, decided on 13th December' 2010.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 118 & 121--- Insurance claim--- Liquidated damages---Insurance Tribunal---Time consumed in litigation---Insurance Tribunal found claimants entitled to their insurance claims and liquidated damages from the date of death of insured---Insurance company contended that Additional District Judge was not a lawfully constituted Insurance Tribunal and liquidated damages were wrongly calculated---Validity---Where no Insurance Tribunal was constituted, Federal Government could issue a notification under proviso to S.121 of Insurance Ordinance, 2000, conferring powers of tribunal to a District or an Additional District and Sessions Judge---Such notification had been issued conferring powers of Insurance Tribunal upon Additional District Judge, therefore, judgment was rendered by validly constituted Tribunal having jurisdiction to pass the same---Insurance company was not prevented by causes beyond its control to process and pay the claims within time frame provided in S.118 of Insurance Ordinance, 2000---Claimants were forced by acts and omissions on the part of insurance company to resort to litigation---If time consumed in litigation were to be excluded by High Court, it would set a bad precedent and create a loophole in the law which could be abused by unscrupulous insurance companies to drag claimants in protracted litigation and deprive them of their lawful claims for years on end---Such would be contrary to the principles of equity, justice and fair play and good conscience and would also defeat the very Purpose for which provision was made for payment of liquidated damages---Provision for liquidated damages was incorporated in order to safeguard the interests of claimants and to ensure that settlement of claims was not unduly delayed/prolonged---There was no illegality in the order passed for legal costs and expenses incurred by them in bona fide prosecuting their claims before Courts of competent jurisdiction---Appeal was dismissed accordingly.?

State Life Insurance Corporation v. Mst. Sadaqat Bano PLD 2008 Lah. 461; Mst. Nusrat Malik Saleem v. Federation Of Pakistan 2006 CLD 874 and State Life v. Mst. Jafar Hussain 2009 CLD 1413 ref.

2009 CLD 1069 rel.

Jahanzeb Khan Bharwana for Appellant.

Liaqat Ali Butt for Respondent.

2011 CLD 776

[Lahore]

Before Rauf Ahmad Sheikh and Ijaz Ahmad, JJ

Messrs ABDUL GHAFFAR and others---Appellants

Versus

D.G. ENVIRONMENTAL PROTECTION AGENCY and others---Respondents

F.A.Os. Nos. 3 to 11 of 2011, heard on 23rd February, 2011.

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

----Ss. 16, 17 & 21(2)---Environmental Tribunal Rules, 1999, R.13--Criminal Procedure Code (V of 1898), Chapter XXII-A (Ss. 265-A to 265-N) & S.133---Environmental Tribunal ordered shifting of poultry farms of appellants for polluting the environment---Validity---Section 17(i) of the Pakistan Environmental Protection Act, 1997 provided for punishment of fine which may extend to one million rupees---Under S.21(2) of the Pakistan Environmental Protection Act, 1997 the Environmental Tribunal had exclusive jurisdiction in respect of the offences punishable under S.17 of the Pakistan Environmental Protection Act, 1997---In holding the trial of offences under Pakistan Environmental Protection Act, 1997, the Environmental Tribunal was vested with the powers of the Court of Session under the Code of Criminal Procedure, 1898---Section 21(6) of the Pakistan Environmental Protection Act, 1997 read with R.13 of the Environmental Tribunal Rules, 1999, Code of Criminal Procedure, 1898 was applicable to proceedings before the Environmental Tribunal-Object of severe punishment was to eradicate the evil of environmental pollution---Tribunal having been vested with the powers of Court of Session should have tried the appellants under Chapter XXII-A of the Code of Criminal Procedure, 1898---Impugned order was not passed after following the prescribed procedure and the punishment provided under S.17 of the Pakistan Environmental Protection Act, 1997 had not been awarded to any of the appellants---Impugned orders were not sustainable under the law---Appeals were accepted and cases were remanded to the Environmental Tribunal for de novo trial under Chapter XXII-A of Criminal Procedure Code, 1898.

Masood Ahmad Khan for Appellants.

Khurshid Ahmad Satti, AAG and Shaukat Hayat District Officer, Environment, Rawalpindi for Respondents.

Date of hearing: 23rd February, 2011.

2011 C L D 806

[Lahore]

Before Ch. Muhammad Tariq and Syed Akhlaq Ahmad, JJ

ALAM SHER MALIK through Special Attorney---Appellant

Versus

MUSLIM COMMERCIAL BANK LIMITED and 2 others---Respondents

F.A.O. No. 167 of 2008, decided on 14th December, 2010.

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

----S. 22---Appeal---Auction of mortgage property---Trial Court decreed the suit ex parte---Defendant's application for setting aside the ex parte decree was also dismissed while executing court dismissed his objection petition---Regular first appeal was also dismissed---Defendant contended that the respondent/its general attorney executed documents of collateral mortgage on his behalf without his consent using the general power of attorney executed by defendant in his favour---Validity---Objection petition of defendant was dismissed for not depositing 20% of the auction money---Defendant's application for setting aside ex parte was dismissed in default---Having not availed the remedy before the Supreme Court of Pakistan after dismissal of his regular first appeal, defendant could not derive any benefit from the present first appeal from order especially when sale certificate by the court had been issued in favour of plaintiff bank and possession had also been delivered to the plaintiff---No relief could be granted to the defendant at this belated stage after sale of the suit property by the plaintiff bank---First appeal from order was dismissed in circumstances.

Messrs Rasu Food Industries and another v. Messrs Pakistan Industrial Leasing Cooperation Limited and others 2005 SCMR 1643 fol.

M. Farooq Qureshi Chishti for Appellant.

Hassan Nawaz Makhdoom for Respondent No. 1.

2011 CLD 825

[Lahore]

Before Ch. Muhammad Tariq and Rauf Ahmad Shaikh, JJ

Messrs MANGORA TEXTILES INDUSTRIES through Partner---Appellant

Versus

ALLIED BANK OF PAKISTAN and another---Respondents

Regular First Appeal No. 515 of 2002, heard on 1st December, 2010.

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

----Ss. 9, 15 & 22---Civil Procedure Code (V of 1908), S.47, O.XXIII, R.3---Qanun-e-Shahadat (10 of 1984), Art.103---Suit for recovery of loan---Banking Court/Trial Court dismissed the suit---Plaintiff contended that the defendant bank was bound to redeem the property and release the machinery and stocks after plaintiff had paid sum of money in consequence of the agreement whereby the parties had agreed to withdraw their respective suits filed against each other---Validity---Defendants' contention that the question regarding implementation of the agreement had to be determined by the executing court, therefore, the suit was not maintainable under S.47, C.P.C. was without force, as no decree had been passed in the previous suit which was withdrawn due to compromise in terms of agreement---Question of cause of action or that of locus standi of the plaintiff had to be determined by the contents of plaint---Plaintiff had the locus standi in view of averments of plaint---Machinery attached or fastened to the ground would be considered as immovable property but the stocks etc., under pledge were not part of immovable property---Nothing was available on record to prove that the said stock was in possession of defendants at the time of the compromise/agreement deed which did not mention of any such stock---Oral evidence regarding the contents of admitted document would be excluded under Art.103 of the Qanun-e-Shahadat, 1984---Machinery and mills were not mortgaged with possession---Plaintiff remained in possession of said machinery and mills---Plaintiff never raised the question of possession of the said machinery or removal thereof by defendants from withdrawal of the earlier suit to the filing of the present suit---Counsel for plaintiff having categorically stated at the time of compromise/agreement that nothing was due from defendants, plaintiff could not allege possession or misappropriation of the stocks by the defendant---Earlier suit having been withdrawn unconditionally, subsequent suit regarding recovery of the price of recovery of stocks was barred under O.XXIII, R.3, C.P.C.---Trial Court properly appreciated the evidence and arrived at correct and just conclusion---Appeal was dismissed in circumstances.

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

----Art. 103---Exclusion of oral evidence---Oral evidence regarding the contents of admitted documents would be excluded under Art.103 of the Qanun-e-Shahadat, 1984.

Official Liquidator v. Sri Krishna Deo and others AIR 1959 Allahabad 247; Addu Achiar v. The Custodian, Evacuee Property, Hyd-Decean AIR 1953 Hyderabad 14; J. Kuppanna Chetty, Ambati Ramayya Chetty and Co. v. Collector of Anantpur and others AIR 1965 Andhra Pradesh 457; Jan Muhammad v. Mulla Abdul Rehman and 4 others 1999 CLC 266; Sakhi Muhammad v. Muhammad Nasir Bashir 1999 CLC 454; A.M. Burq and another v. Central Exchange Bank Ltd. and others PLD 1966 (W.P.) Lah. 1 and Nazarul Hussain v. The Collector, Lahore District, Lahore and 5 others PLD 1990 Lah. 472 distinguished.

Duncans Industries Ltd. v. State of U.P. and others 200(1) A.W.C. 464 (S.C.): Mst. Nur Jehan Begum through Legal Representatives v. Syed Mujtaba Ali Naqvi 1991 SCMR 2300; Government of Pakistan, Secretaries, Works, Communications and Physical Planning v. Tauqir Ahmed Khan and others 1996 SCMR 968; Hazratullah v. District Counceil, Haripur 1997 SCMR 1570; Parveen Begum and another v. Shah Jehan and another PLD 1996 Kar. 210; Maula Bakhsh v. Allah Ditta 1989 MLD 4633; Saleem Akhtar v. Nisar Ahmad PLD 2000 Lah. 385 and Saleh Muhammad and others v. Subedar-Major Muhammad Bakhsh and others PLD 1960 (W.P.) Lah. 231 ref.

Israr Ahmad Qureshi and Aftab Umar Sheikh for Appellant.

Muhammad Naeem Sahgal for Respondents.

Date of hearing: 1st December, 2010.

2011 C L D 842

[Lahore]

Before Ch. Muhammad Tariq and Rauf Ahmad Shaikh, JJ

Haji MUHAMMAD ASHIQ through Legal heirs and others---Appellants

Versus

BANK OF OMAN LTD. through A.V.P. and others---Respondents

F.A.O. No. 35 and C.M. No. 3-C of 2006, decided on 2nd December, 2010.

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

----S. 22---Civil Procedure Code (V of 1908), O.XXXVII, R.2, O.XXI, Rr.10, 89, 90 & S.48---Limitation Act (IX of 1908), Arts.165, 166 & 181---Suit for recovery of loan---Banking Court decreed the suit directing sale of property mortgaged to plaintiff bank---Appellants/owners of the property filed objection petition which was dismissed by the executing court for being time-barred under Art.166 of the Limitation Act, 1908---Scope and application of Arts.165 & 166, Limitation Act, 1908--Appellants/ objection petitioners contended that they never mortgaged the property to the bank---Suit land was not mortgaged to bank by appellants at the time of institution of suit---Judgment-debtor did not obtain non-encumbrance certificate from Revenue Department before filing of the suit---Executing court committed glaring mistake by passing order of attachment of suit property and subsequent auction which dispossessed owners of the property---Executing court did not consider that the execution petition was time-barred---Factual controversy of limitation was decided without framing the issues and recording of evidence---Article 165 of Limitation Act, 1908 did not apply to the application filed by judgment-debtor whereas Art.166 of Limitation Act, 1908 was applicable to application filed by judgment-debtor as well as to an application filed by any of persons mentioned in O.XXI, Rr.89 & 90, C.P.C. for setting aside the sale within thirty days from the date of sale---Provisions of Art.181 of Limitation Act, 1908 provided for period of 3 years for filing first application for the execution of a decree---Executing court made an error by proceeding under S.22 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 which, having been promulgated after the dispute between the parties arose, could not be applied with retrospectively---Appeal was allowed---Impugned order passed by the Banking Court was set aside and the case was remanded to executing court for decision afresh after framing the issues and providing opportunity of hearing to the parties.

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

----Arts. 165 & 166---Civil Procedure Code (V of 1908), O.XXI, Rr.89 & 90---Application of provisions of Arts.165 8. 166, Limitation Act, 1908---Scope---Articles 165 & 166 of Limitation Act, 1908 differed in application---Article 165 of Limitation Act, 1908 did not apply to the application filed by judgment-debtor whereas Art.165 of Limitation Act, 1908 was applicable to application filed by judgment-debtor as well as to an application filed by any of persons mentioned in O.XXI, Rr.89 & 90, C.P.C. for setting aside the sale within 30 days of the date of the sale.

Syed Najam-ul-Hassan Kazmi, Muhammad Hanif Niazi and Imran Muhammad Sarwar for Appellants.

Naeem Yousaf Rana and Sh. Sajid Mahmood for Respondents.

Ahmad Awais for Applicant (in C.M. No. 3-C of 2006).

Date of hearing: 2nd December, 2010.

2011 CLD 927

[Lahore]

Before Nasir Saeed Sheikh, J

ALLAMA IQBAL OPEN UNIVERSITY through Vice-Chancellor and 4 others---Appellants

Versus

IRFAN BOOTA and another---Respondents

Regular First Appeal No.439 of 2008, decided on 9th December, 2010.

Punjab Consumer Protection Act (II of 2005)---

----Ss. 2(c)(k), 25 & 28---'Consumer'; `Services'---Meaning and scope-Consumer Court awarded compensation totalling Rs.20,000 to complainant/student who was declared failed by the university as his assignment was not sent to the Controller of Examination of the University by his tutor---University contended. that the complainant, being a student, was not a "consumer" as defined by clause (c) of S.2 of the Punjab Consumer Protection Act, 2005 and that the services provided by the university also did not fall within the definition of services' contained in clause (k) of the Punjab Consumer Protection Act, 2005---Validity---University was an educational institution and could not be described to have undertaken commercial activity---Definition of the term 'consumer' in clause (c) of S.2 of the Punjab Consumer Protection Act, 2005 contemplated hiring of services for a consideration and the definition was not applicable to the matter wherein a student had submitted application for appearing in any examination to be conducted by an educational institution---Neither the student appearing in the examination held by the university could be described as a 'consumer' as defined in S.2(c) of the Punjab Consumer Protection Act, 2005, nor the university was a 'service provider' as envisaged in the provisions of S.2(k) of the Punjab Consumer Protection Act, 2005---Complaint lodged by the student was not entertainable by the Consumer Court---Appeal was accepted and impugned order was set aside.

University of Jammu and others v. Brinder Nath and others AIR 2000 J&K 93 rel.

Rana Zia Abdul Rehman for Appellants.

2011 C L D 948

[Lahore]

Before Sh. Azmat Saeed and Mamoon Rashid Sheikh, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Chairman and another---Appellants

Versus

JAVED IQBAL---Respondent

R.F.A. No. 447 of 2008, heard on 16th September, 2010.

Insurance Ordinance (XXXIX of 2000)---

----S. 80---Civil Procedure Code (V of 1908), O.XVI, R.1---Recovery of policy proceeds---Production of document--Insurance Tribunal accepted application for recovery of policy proceeds and awarded liquidated damages--Insurance Corporation/appellant contended that applicant had obtained policies fraudulently by concealing material facts regarding health of the assured and that Tribunal had wrongly declined the application for summoning of additional witnesses---Validity---Policies had lapsed at one point of time but the same were revived---Corporation admitted that policies were in force at the time of death of the assured---Question of validity of policies stood resolved/settled in favour of applicant in the wake of said admission---Insurance Corporation could not substantiate the allegation of material concealment by the applicant---Corporation was estopped from raising any grievance under O.XVI, C.P.C. after their counsel had closed the evidence---Illness of the assured, subsequent to issuance of insurance policy was of no legal consequence and could not be relied upon to assert or prove that such illness existed prior to issuance of the insurance policy---Assured could not be accused of not disclosing any illness that had occurred after insurance policy had been obtained---Insurance Corporation failed to prove any material concealment qua the health of assured at the time when the insurance policy was issued--Impugned order did not suffer from any illegality and the same being unexceptionable was not open to any interference by High Court---Appeal was dismissed in circumstances.

Mian Naseer Ahmed for Appellants.

Liaqat Ali Butt for Respondent.

Date of hearing: 16th September, 2010.

2011 CLD 963

[Lahore]

Before Ijaz ul Ahsan, J

HABIB BANK LIMITED through Authorized Attorneys---Plaintiff

Versus

AZAM MAJEED---Defendant

Civil Original Suit No. 191 of 2010, decided on 15th March, 2011.

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

----Ss. 9 & 29---Civil Procedure Code (V of 1908), Ss. 13 & 14---Limitation Act (IX of 1908), Art. 117---Suit for recovery of Bank loan with interest on basis of foreign judgment and decree---Validity---Plaintiff Bank having a Branch Office in foreign country was established and registered under laws of Pakistan---Defendant-guarantor was residing within jurisdiction of Banking Court-.. Relationship of customer and banker existed between parties as defendant stood guarantor for loan granted by Bank through its Branch Office in foreign country-Defendant after having been duly served had contested suit in foreign court, which granted him opportunity to defend himself through counsel---Foreign court of first instance consisting of three Judges on 26-11-2002 had passed judgment/decree against defendant after proper trial and examining all relevant documents and evidence produced by parties and found him liable for payment of suit amount---Foreign Appellate Court consisting of six Judges after hearing defendant had dismissed his appeal on 28-11-2004, whereagainst no further appeal was filed---Bank had produced certified copies of judgments and decrees passed by foreign court of first instance and foreign Appellate Court with its translation---Nothing was available on record to show that foreign judgment/decree fell within any exceptions mentioned in S. 13, C.P.C.---Such foreign judgment/ decree for being conclusive and binding on defendant could furnish cause of action and basis to Bank to maintain present suit against defendant (guarantor)---Judgment/decree of initial foreign court had merged in foreign appellate decree---Limitation of six years provided under Art. 117 of Limitation Act, 1908 for filing suit on basis of foreign judgment would start from 28-11-2004, when defendant's appeal was dismissed by foreign Appellate Court---Present suit filed on 25-11-2010 was, thus, within time---Defendant, in the present suit was not served in person, but his service effected through publication of citations in newspapers would be deemed to be valid service---Defendant despite service had neither entered appearance nor filed application for leave to defend suit, thus, allegations of fact in plaint would be deemed to be admitted---Bank's claim with interest was supported by duly attested statements of accounts---Recovery of interest on finance was prohibited under Islamic modes of finance---Recovery of interest on foreign loans was permissible by virtue of circular No.13, dated 30-6-1984 issued by State Bank of Pakistan, Banking Control Department---Suit amount had been decreed by foreign court under its law on basis of loan agreement executed between parties, for repayment of which defendant stood guarantor---Foreign courts had passed a valid and legally enforceable judgments and decrees in favour of Bank and against defendant---Banking Court had jurisdiction to entertain present suit---Suit was decreed for amount finding mention in foreign judgments and decrees.?

Emirates Bank International Ltd. v. Messrs Osman Brothers and 9 others 1990 MLD 1779; Habib Bank Ltd. v. Messrs Virk House Trading Company Ltd. 2009 CLD 451; United Bank Limited v. Naeem Ullah Malik and 2 others 2009 CLD 1459; Chairman Board of Mining Examination and Chairman Inspector of Mines v. Ramjee AIR 1977 SC 965; Messrs Farm and Foods International through Attorney v. Hamid Mahmood 2006 CLC 492; Maulvi Abdul Qayyum v. Syed Ali Asghar Shah and 5 others 1992 SCMR 241; Baijnath Karnani v. Vallabhdas Damani AIR 1933 Madras 511 and Messrs Ahmad Autos and another v. A.B.L. PLD 1990 SC 497 rel.

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

----Ss. 13 & 14---Limitation Act (IX of 1908), Art. 117---Suit on basis of foreign judgment---Execution of foreign decree---Limitation---Execution of foreign decree could not be filed in Pakistan, if same had not attained finality for being under challenge before foreign Appellate forum---Period of six years provided under Art. 117 of Limitation Act, 1908 for filing such suit on basis of foreign judgment/decree would start running from date when such decree attained finality after dismissal of such appeal---Illustration.?

Chairman Board of Mining Examination and Chairman Inspector of Mines v. Ramjee AIR 1977 SC 965; Messrs Farm and Foods International through Attorney v. Hamid Mahmood 2006 CLC 492 and Maulvi Abdul Qayyum v. Syed Ali Asghar Shah and 5 others 1992 SCMR 241 rel.

Barrister Usman G. Rashid for Plaintiff.

Ex parte for Defendant.

Date of hearing: 15th March, 2011.

2011 CLD 990

[Lahore]

Before Sagheer Ahmad Qadri and Ch. Muhammad Tariq, JJ

Messrs AGROCARE and 3 others---Appellants

Versus

ZARAI TARAQIATI BANK LTD.---Respondent

F.A.O. No. 92 of 2007, heard on 23rd February, 2011, (a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)---

----Ss. 9, 7(2), 22 & 27---Civil Procedure Code (V of 1908), O.IX, R.13---Suit for recovery of loan---Banking Court decreed the suit ex parte---Application for setting aside the ex parte decree was dismissed---Defendants contended that the Trial Court had erred in holding that the application under O.IX, R.13, C.P.C. was not maintainable in view of S.27 of Financial Institutions (Recovery of Finances), Ordinance, 2001 as said section did not bar the court to recall its own order passed on merit and that under Financial Institutions (Recovery of Finances) Ordinance, 2001 procedure laid down in C.P.C. was applicable to set aside the ex parte decree, as such mandatory provision of law was ignored by the Banking Court---Validity---Defendants did not appear in the court despite service of notice, so the ex parte decree was passed by the Banking Court on merit---Judge, Banking Court having discussed merits of the case, the judgment and decree fell within purview of final judgment/order---Under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, any person aggrieved by any judgment, decree, sentence or final order passed by a Banking Court might, within a period of 30 days, of such judgment, decree, sentence or final order prefer an appeal to the High Court, therefore, defendants misconstrued the provisions of S.7(2) and S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Under S.7(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the provisions of C.P.C. were applicable only where the Financial Institutions (Recovery of Finances) Ordinance, 2001 was silent and no procedure had been laid down--Application of provisions of S.7 and S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was to be determined by the fact whether the ex parte decree was passed before or after the filing of petition for leave to appeal---Defendants appeared and filed petition for leave to defend the suit but none of them appeared on the crucial date, hence the Judge, Banking Court decided the matter ex parte on merits---Application of defendants under O.IX, R.13, C.P.C. was rightly dismissed---Appeal was, therefore, dismissed.

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

---Ss. 7(2) & 22---Application of Civil Procedure Code, 1908---Scope---Under S.7(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the provisions of C.P.C. were applicable only where the Financial Institutions (Recovery of Finances) Ordinance, 2001 was silent and no procedure had been laid down---Application of provisions of Ss.7 and 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was to be determined by the fact whether the ex parte decree was passed before or after the filing of petition for leave to appeal.?

2001 CLC 1363; 2001 CLC 1363 and 2008 CLD 341 distinguished.

2005 CLD 927 rel.

Hasham Ahmad Khan for Appellants.

Muhammad Khalil Rana and Muhammad Usman Arif for Respondent.

Date of hearing: 23rd February, 2011.

2011 C L D 1058

[Lahore]

Before Kh. Imtiaz Ahmad, J

MERAJ AGRO, CHEMICAL (PVT.) LIMITED, MULTAN through Chief Executive---Petitioner

Versus

MUHAMMAD SIDDIQUE- Respondent

Civil Revision No.471 of 2008, decided on 18th February, 2011.

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

----O. XXXVII, Rr. 2 & 3---Suit for recovery of amount on basis of dishonored cheque---Leave to defend suit, application for--Defendant's plea that son-in-law of plaintiff was Accountant of defendant, who while leaving job without intimation took away books of accounts and cheque books belonging to defendant; that before filing suit by plaintiff, defendant had registered criminal case against plaintiff and his son-in-law---Trial Court accepted leave application subject to furnishing of Bank guarantee by defendant equal to suit amount---Validity---Imposition of condition was discretion of court which should not be harsh---Defendant had plausible defence---Instead of imposing harsh condition of submission of bank guarantee, defendant could be directed to submit personal surety bond or surety of any other person supported by documents of title of immovable property having value equal to suit amount---High Court modified impugned order and directed defendant to submit such bond within specified time.

Agha Jee Cotton Factory v. Hakim Trading Company Rahim Yar Khan 1995 CLC 302; Saran v. Haji Mahmood NLR 1994 AC 658; Khalid Javed and Co. v. Javed Oil Industries 1988 SCMR 391; Messrs Ark industrial Management Ltd. v. Messrs Habib Bank Limited PLD 1991 SC 9.76; Muhammad Tariq Siddiqui v. Nasir All and another 2011 CLC 191 and Raja Saeed Ahmad Khan v. Sabir Hussain 2000 CLC 199 ref.

Abdul Rauf Ghauri v. Mrs. Kishwar Sultana and 3 others 1995 SCMR 925 rel.

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

----O. XXXVII, Rr. 2 & 3---Suit for recovery of amount on basis of negotiable instrument---Leave to defend suit--Imposition of condition by court while granting such leave---Scope---Imposition of condition being discretion of court, such condition should not be harsh.

Abdul Rauf Ghauri v. Mr. Kishwar Sultana and 4 others 1995 SCMR 925 rel.

Safdar Ramay for Petitioner.

Mian Mushtaq Ahmed for Respondent.

Date of hearing: 17th February, 2011.

2011 C L D 1080

[Lahore]

Before Iqbal Hameed ur Rehman and Tariq Javaid, JJ

Messrs CHAUDHRY TEX through Proprietor and 2 others---Appellants

Versus

HABIB BANK LTD. through Branch Manager and another---Respondents

R.F.A. No. 394 of 2009 and F.A.O. No. 228 of 2010, heard on 2nd November, 2010.

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

----Ss. 9, 10 & 22---Bankers' Books Evidence Act (XVIII of 1891), S. 4---Suit for recovery of loan--Application for leave to defend suit---Defendant/loanee, having failed to repay amount advanced to him, the plaintiff bank filed suit for recovery of loan against the defendant---Application filed by the defendant to defend suit was dismissed and suit was decreed---Main argument of the defendant was that impugned judgment and decree had been passed on the basis of photo copy of the documents with regard to the reconstruction of loan and original documents were not produced---Counsel for defendant had not disputed the amount of loan---Bank, no doubt was under legal obligation to produce the original documents---Statement of amount in question, certified under the Bankers' Books Evidence Act, 1891 was annexed by the bank with the plaint---No objection with regard to the said statement had been raised by the defendant; nor it was disputed that said amount was not borrowed by the defendant---Suit, in circumstances, was rightly decreed.

Talib Hussain Baloch for Appellants.

M. Usman Ghani for Respondent No.1.

Date of hearing: 2nd November, 2010.

2011 CLD 1105

[Lahore]

Before Sagheer Ahmed Qadri, J

Sayyed HANAN KHALID GILLANI---Petitioner

Versus

DISTRICT JUDGE/PRESIDING OFFICER, DISTRICT CONSUMER COURT, MULTAN and others---Respondents

Writ Petition No.12194 of 2010, decided on 4th April, 2011.

(a) Interpretation of statutes---

----Words occurring in a statute---Dictionary meanings---Principle---Firstly, if any word occurring in a statute has to be interpreted, its meanings should be searched and if it is defined in the definition clause or any other part of the statute with reference to that statute and with reference to the subject---If no such definition is provided in that statute/enactment, then its literal/dictionary meaning are to be taken into consideration.

(b) Punjab Consumers Protection Act (II of 2005)---

---Ss. 2(0, 25 & 28---Constitution of Pakistan, Art.199---Constitutional petition---Word "animal"---Scope---Claim against supplier---Dispute between the parties was with regard to supply of chicks---Consumer alleged that supplier did not supply him the chicks of grade 'A" for which payment was made to him---Claim submitted by consumer under S.28 of Punjab Consumers Protection Act, 2005, was found to be maintainable by Consumer Court---Validity---Word "animal" in S.2(j) of Punjab Consumers Protection Act, 2005, was used in general sense, therefore, birds included the same and agreement reached between consumer and supplier for supply of chicks did not fall within the meaning of supply of any product---High Court set aside the order passed by Trial Court and claim submitted by consumer under S.28 of Punjab Consumers Protection Act, 2005, was not maintainable---Petition was dismissed in circumstances.

Chamber 21st Century Dictionary; Conscise Oxford Thesaurus, Third Edn. and Halsbury's Law of England, 4th 'Edn. Vol.2, para.201 ref.

Fakhar Raza Malana for Petitioner.

Mian Babar Saleem for Respondent No.2.

Sardar Farooq Ahmad Khan for Respondent No.3.

2011 C L D 1225

[Lahore]

Before Kh. Imtiaz Ahmad and Amin-ud-Din Khan, JJ

Syed NAJAM ALI SHAH---Appellant

Versus

MUHAMMAD HAJI---Respondent

R.F.A. No. 38 of 2001, heard on 17th May, 2011.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr.1 & 2---Suit for recovery of money---Promissory note---Proof---Presumption---Finger print expert report---Defendant had not only signed but also affixed his thumb impression on promissory note as well as on the receipt but Trial Court dismissed the suit---Validity---Signatures of defendant could be disputed but finger prints had more sanctity, authenticity and reliability than the signatures---Report of finger print expert as well as presumption attached to promissory note under S.118, Negotiable Instruments Act, 1881, were in favour of plaintiff---Trial Court did not properly appreciate the evidence of parties which required interference---High Court in exercise of appellate jurisdiction set aside the findings recorded by Trial Court and suit was decreed in favour of plaintiff---Appeal was allowed in circumstances.

Raja Muhammad Sohail Iftikhar for Appellant.

Pirzada Muhammad Afzal Nizami for Respondent.

Date of hearing: 17th May, 2011.

2011 C L D 1361

[Lahore]

Before Ijaz Ahmad Chaudhry, C.J. and Mazhar Iqbal Sidhu, J

Sheikh MUHAMMAD AZIM and another---Appellants

Versus

NATIONAL BANK OF PAKISTAN and 3 others---Respondents

Regular First Appeal Case No. 367 of 2006, heard on 26th May, 2011.

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

----Ss. 9 & 10---Suit for recovery of Bank loan---Leave to defend suit, application for---Denial of principal debtor and guarantors to have availed loan and executed documents in favour of Bank and contention that documents of title in possession of Bank were handed over as a trust just to show their financial status; and that at relevant time guarantors being foreign nationals were not present in Pakistan---Proof---Record showed that principal debtor after having availed loan had requested for its enhancement, which was granted against mortgage of property owned by him and guarantors---Guarantors along with leave application had not attached any document to show their absence from Pakistan at time of execution of disputed documents---Signatures of defendants on disputed documents produced by Bank did tally with their signatures appearing on leave application and were genuine---Loan was initially sanctioned in year 1998 and was enhanced in years 1999 and 2000, but defendants had not bothered to know about status of their property till filing of suit against them in year 2006---Guarantors had not denied being directors of principal debtor-company, which was granted loan---Defendants being close relatives had tried to swallow loan amount availed by them---Defendants had not shown as to for what purpose their financial status was shown to the Bank---Defendants had admitted to having business relations with Bank for last twenty years---Preparation of forged documents by Bank was not possible as same would not only entail penal action against delinquents, but reputation of Bank as a whole would be at stake---Documents tendered by defendants at different times would speak volumes about fact that principal debtor had availed loan, while remaining defendants being directors stood guarantors against such loan---Bank had explained entries in statement of accounts, according to which suit amount was outstanding against defendants---Defendants had not denied that amount claimed by Bank had never been credited in account of principal debtor, which fact alone was sufficient to determine their liability--- Suit was decreed in circumstances.

Mst. Akhtar Begum v. Muslim Commercial Bank Limited 2009 SCMR 264 and Mst. Riffat Jehan and another v. Habib Bank Limited and 10 others 2005 CLD 941 ref.

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

----Art. 59---Handwriting expert, opinion of---Evidentiary value---Not necessary for court to send matter to handwriting expert in every case---Court in case of ambiguity could refer matter to expert for opinion---Prerogative of court either to send matter to handwriting expert or form an opinion after bare perusal of disputed material---Such opinion could not be conclusive unless same found support from relevant documents.

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

----O. XIII, R.4---Documents exhibited in evidence or not---Validity---Court had power to consider all such documents to arrive at a just conclusion.

(d) Administration of justice---

----Technicalities cannot be allowed to impede way of substantive justice; rather same should be ignored while determining rights of parties.

Najam ul Hassan Ali and Waqar ul Mohsin Luck for Appellants.

Mansoor Usman Awan for Respondent No.1.

Ijaz Ahmad for Respondents Nos. 2 to 4.

Date of hearing: 26th May, 2011.

2011 C L D 1539

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

MURSHID ALI and 4 others---Petitioners

Versus

S.H.O., POLICE STATION SADDAR, KHANEWAL and another---Respondents

Writ Petition No. 12772 of 2010, decided on 26th May, 2011.

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

----Ss. 7, 9, 10 & 20---Penal Code (XLV of 1860), S. 406---Constitution of Pakistan, Art.199---Constitutional petition---Criminal breach of trust---Registration of F.I.R. pending suit for recovery of loan---Petition for quashing of F.I.R.---Relationship between the petitioners and Bank was of banker and customer and Financial Institutions (Recovery of Finances) Ordinance, 2001 which was a special law, had been enacted for resolution of dispute arising out of finance, both civil and criminal---Basic purpose for enacting said special law was to provide machinery for ousting the jurisdiction of local Police with reference to commercial dispute between the banker and customer---Financial Institutions (Recovery of Finances) Ordinance, 2001, had provided the complete procedure for redressal of bank's grievance of criminal nature in addition to civil nature; and under S.7(b) of Ordinance Banking Court enjoyed all powers, vested in a Court of Session---Said powers were subject to proviso of S.20 of the said Ordinance, whereunder Banking Court would take cognizance only on a complaint in writing made by a person authorized in that behalf---Courts established under Criminal Procedure Code, 1898, would have no jurisdiction to take cognizance of the matter arising out of a finance advanced by the bank---Main object for enacting Financial Institutions (Recovery of Finances) Ordinance, 2001, which was special law, was that customer or the bank should not be dealt under ordinary court or criminal law---Special law would prevail over the general law---Local Police, in circumstances, had no jurisdiction to take cognizance in the matter covered under the Ordinance---Jurisdiction under the general law having been specially ousted, entertainment of complaint was patently against law---Very registration of F.I.R. was void as complainant was not authorized person to lodge the complaint and the exclusive jurisdiction to decide the issue was with the Banking Court---F.I.R. was quashed in circumstances.

Industrial Development Bank of Pakistan and others v. Mian Asim Fareed and others 2006 SCMR 483 ref.

Capt. (Retd.) Nayyar Islam v. Senior Superintendent of Police and others PLD 2001 Lah. 533 and Aamer Khurshid Mirza v. The State 2005 CLD 20 rel.

Muhammad Suleman Bhatti for Petitioners.

Rana Javed Akhtar, Standing Counsel along with Shafiq Ahmad, S.-I. for Respondents.

2011 C L D 1594

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Zonal Head----Petitioner

Versus

FAISAL TAHIR and 3 others----Respondents

Civil Revision No.428 of 2003, decided on 17th June, 2011.

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

----Arts. 117, 120 & 124---Missing person---Presumption---Date of death---Onus to prove---Person who has not been heard for seven years is presumed to be dead---If date of his death is claimed that has to be proved by the person who is claiming.

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

----Art. 124--- Missing person--- Presumption of death---Relevant persons---Principle---Relevant persons about presumption of death of a person are those who could naturally hear about the person as if he had been alive---Wife as well as sons and daughters are the first persons who can claim refuge under Art. 124 of Qanun-e-Shahadat, 1984.

(c) Succession Act (XXXIX of 1925)---

----S. 381--- Qanun-e-Shahadat (10 of 1984), Art. 124---Succession certificate---Presumption of death---Insurance claim---Legal heirs filed application for issuance of succession certificate on the ground that their predecessor-in-interest was kidnapped 12 years ago and his whereabouts were not known, therefore, he should be presumed to be dead---Succession certificate issued by Trial Court in favour of legal heirs was maintained by Lower Appellate Court---Insurance company assailed the certificate on the plea that insurer could not pay the claim unless it was established that the insured had died---Validity---After elapse of 12 years no one had claimed that he had seen the insured person and insurance company was not claiming that it had evidence about fact that the insured was alive---It was a proven fact that insured was dead, insurance policy was covered against death of insured and as such insurance company was bound to pay insurance claim to legal heirs of insured in terms of succession certificate issued by competent court of law---Insurance claim had matured from the date of expiry of seven years which commenced from the date of kidnapping---High Court, in exercise of revisional jurisdiction declined to interfere in succession certificate issued by the courts below and insurance company was bound to pay the insurance claim to legal heirs of insured---Revision was dismissed in circumstances.

Gul Zaman v. Sher Zaman and others PLD 1972 Azad J&K 26 ref.

(d) Insurance Ordinance (XXXIX of 2000)---

----S. 122--- Insurance Tribunal--- Powers--- Insurance Tribunal, in exercise of jurisdiction under S.122 of Insurance Ordinance, 2000, enjoys powers in respect of claim filed by policy holder against insurance company in respect of or arising out of a policy of insurance.

Jahanzaib Khan Bharwana for Petitioner.

Khalid Aseer Chaudhary for Respondents.

2011 C L D 1753

[Lahore]

Before Umar Ata Bandial, J

RABIA JAMSHED and 2 others---Petitioners

Versus

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Zonal Head and 8 others---Respondents

W.P. No. 11317 of 2010, decided on 11th July, 2011.

Insurance Ordinance (XXXIX of 2000)---

----S.73---Insurance Rules, 2000, R.8---Central Employees Benevolent Fund and Group Insurance Act (II of 1969), S.19---Constitution of Pakistan, Art. 199---Constitutional petition--- Group insurance--- TARKA of deceased---Nominee---Scope---Deceased insurer was survived by a widow and two children and three children from a wife duly divorced by him in his life time---During pendency of litigation between widow and children from divorced wife, Insurance company paid Group Insurance policy to widow on the ground that deceased had made her nominee in insurance documents---Validity---Dispute between both the parties regarding entitlement to shares in Group Insurance claim was within the knowledge of Insurance company, therefore, unless the dispute was proved to have been resolved or settled, Insurance company should not have released payment of claim to the nominee---Rights of nomination were inoperative under S. 73 of Insurance Ordinance, 2000, read with rule 8 of insurance Rules, 2000, where insurer had express notice about dispute regarding entitlement to insurance money---Insurance company was bound by its duty under law to respect such entitlement of children from divorced wife---High Court directed Insurance company to pay to children from divorced wife, their respective shares/amount due to them under Group Insurance claim arising from death of deceased insured--- Petition was allowed accordingly.

Government of Pakistan v. Public at Large PLD 1991 SC 731 ref.

Mst. Ameeran Khatoon v. Mst. Shamim Akhtar and others 2005 SCMR 512 fol.

Liaqat Ali Butt for Petitioners.

Mian Naseer Ahmad for Respondent/SLIC.

Mst. Fouzia Jamshed in person.

2011 C L D 1794

[Lahore]

Before Sagheer Ahmad Qadri and Sayyed Mazahar Ali Akbar Naqvi, JJ

Master ABBAS KHAN---Appellant

Versus

SUB. SIKANDAR KHAN---Respondent

Regular First Appeal No. 72 of 2001, heard on 20th September, 2011.

(a) Tort---

----Malicious prosecution--- Suit for damages---Maintainability---Scope---Acquittal of accused of charges by extending him benefit of doubt by criminal court---Benefit of doubt---Scope---Such acquittal of accused would not bring his case within ambit of malicious prosecution entitling him to claim damages from complainant---Rationale behind the proposition stated.

If the accused is acquitted of the charges while extending benefit of doubt, he cannot claim damages. The rationale behind the same is that it is a cardinal principle of administration of criminal justice which is a basic norm of Criminal Jurisprudence that you can acquit one hundred guilty, but cannot convict one innocent person. The same principle has also been given much credence in Islamic Jurisprudence as well. As far as Islamic Jurisprudence is concerned, the word of benefit of doubt has been entrusted with more force as compared to one as stated above. In the verse of Holy Qur'an:

Despite the fact that the word "Adal" has been used, which is more comprehensive in its composition, but still the word "Ihsan" has been added, which clearly depicts that in Islam, the element of mercy has attained very high value and the same on its analogical interpretation be termed as what has been stated above and which is cardinal principle of English and Latin jurisprudence.

If a person is acquitted of the charges by extending the benefit of doubt, it does not mean that involvement of accused was an outcome of malice on the part of the complainant; rather the same would be deficient to convict as an abundant caution, because liberty of a person is an inalienable right, which cannot be snatched and if anything comes in favour of the accused, that is to be extended in his favour as a matter of right, therefore, mere acquittal of accused from the criminal case does not bring his case within the ambit of malicious prosecution.

Altaf Gohar v. Wajid Shams-ul-Hassan PLD 1981 Kar. 515; Muhammad Akram v. Mst. Farman B PLD 1990 SC 28; Syed Ahmed Saeed Kirmani v. Messrs Muslim Commercial Bank Ltd. Islamabad 1993 SCMR 441; Muhammad Yousaf v. Syed Gayur Hussain Shah 1993 SCMR 1185; Sufi Muhammad Ishaque v. Metropolitan Corporation Lahore through its Mayor PLD 1996 SC 737; Sub. (Retd.) Fazale Rahim v. Rub Nawaz 1999 SCMR 700 and United Bank Ltd. v. Raja Ghulam Hussain and others 1999 SCMR 734 ref.

Government of the Punjab through Secretary, Health Department, Lahore v. Salamat Ali Khan PLD 1991 SC 699; Sher Hassan v. The State PLD 1959 SC (Pak) 480; Sadaruz Zaman v. State 1990 SCMR 1277; Feroze Khan v. Fateh Khan and 2 others 1991 SCMR 2220 and Mahmood Akhtar v. The Muslim Commercial Bank Ltd. and another PLD 1992 SC 240 rel.

(b) Criminal trial---

----Benefit of doubt---Scope.

(c) Precedent---

----Each and every case having its own facts would be dealt with keeping in view such facts independently.

Ch. Afrasiab Khan for Appellant.

Sardar Muhammad Zameer for Respondent.

Date of hearing: 20th September, 2011.

2011 CLD 307

[Peshawar]

Before Mazhar Alam Khan Miankhel and Syed Sajjad Hassan Shah, JJ

ALI KHAN---Appellant

Versus

ASKARI LEASING LTD.---Respondent

F.A.Bs. Nos.31, 32 and 33 of 2008 with Civil Miscellaneous No.329 of 2008, decided on 30th September, 2010.

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

----Ss. 9, 10 & 22---Specific Relief Act (I of 1877), S.42---Civil Procedure Code (V of 1908), O.VII, R.11---Suit for recovery of loan and declaration---Application for leave to defend---Rejection of plaint---Plaintiff/loanee filed two declaratory suits against defendant bank---Bank submitted application for leave to defend the suits---Defendant bank also filed a suit for recovery of remaining finance facility, wherein the plaintiff/loanee also filed his application for leave to defend the suit---Banking Court rejected the plaint of the loanee under O.VII, R.11, C.P.C. and accordingly refused leave to defend the suit filed by the bank---Recovery suit filed by the bank was decreed to the extent of entire claim made by the bank without considering the legal and factual issues raised by the loanee in his application to defend suit and without disposing of the application for leave to defend the suit---Validity---Judge Banking Court was under legal obligation to consider all the factual and legal pleas raised in application---Under the law, the Banking Court after considering the same was bound to pass judgment and decree in the favour of the plaintiff, if the application for leave to defend the suit was rejected or the defendant had failed to fulfil the conditions attached to the grant of leave to defend---Any such order/decision should be based on due application of mind and with reasons---Impugned judgment in declaratory suit was without said requirements---Banking Court instead of giving its findings on the application for leave to defend the suit, outrightly refused the leave to defend and in the same breath, the plaint was rejected under O.VII, R.11, C.P.C.--- Judge Banking Court was required to pass a decree in case of refusal of leave to defend, under S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001---If at all the suit of the plaintiff was not competent, then same should have been dealt with under the taw---Outright rejection of the plaint in such a cursory manner without discussing and considering the pleas raised by the parties, was nothing, but an exercise of jurisdiction against the law and was a material irregularity and illegality---Cases were sent back to the Banking Court to decide the same according to relevant law.

Aamir Javed for Applicant.

Nazirullah Qazi for Respondent.

Date of hearing: 30th September, 2010.

2011 C L D 458

[Peshawar]

Before Attaullah Khan, J

Sheikh SALAHUDDIN---Appellant

Versus

HABIB BANK LIMITED and another---Respondents

Civil Appeal No.7 of 2006, decided on 18th May, 2010.

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

----Ss. 19 & 22---Execution proceedings---Auction of mortgaged property---Dismissal of objection petition for non-prosecution and confirmation of auction by Banking Court---Appeal against impugned order---Judgment-debtor's plea supported by affidavit to the effect that on crucial date, junior of his counsel appeared before court and requested for an adjournment, but his presence was not marked and objection petition was decided in absence of appellant and his counsel---Validity---Decree-holder had not filed counter-affidavit to rebut such affidavit of judgment-debtor---High Court accepted such affidavit of judgment-debtor, meaning thereby that he was represented by another counsel on crucial date, thus, Banking Court could not proceed against him---Petition contained objection against auction conducted by Auctioneer, decision whereof was necessary---Judgment-debtor on technical ground could not be deprived of an opportunity to represent his case before Banking Court---High Court set aside impugned order and directed Banking Court to decide objection petition within specified time.

S. Abid Hussain Shah Bokhari for Appellant.

M. Anwar Awan for Respondent No.1.

Khuda Bukhsh Baloch and M. Iqbal Kundi for Respondent No.2.

Date of hearing; 18th May, 2010.

JUDGMNET

ATTAULLAH KHAN, J.--- This appeal filed by the appellant Sheikh Salahuddin under section 22 of the Financial Institution (Recovery of Finances) Ordinance 2001 is directed against the order dated 16-2-2006 passed by the learned Judge, Banking Court-II Camp at D.I. Khan vide which the objection petition of the appellant was dismissed in default and the auction of the mortgage property was confirmed.

1. Briefly stated the facts are that the respondent-Bank filed a suit for recovery of Rs.3,63,705 due against the appellant as financial facility availed by him on credit basis and to that effect an agreement was executed between the parties, according to which the appellant promised to pay the purchase price including mark-up and in case of failure to deposit the amount, the Bank was declared to be entitled to demand immediately the entire amount due. Since the appellant committed default for five monthly instalments, therefore, the Bank demanded the entire amount in lump sum. To secure, a mortgage deed was also executed between the parties. After the default, the suit was filed which was contested by the appellant by filing application for leave to defend.

2. After hearing arguments, the suit was decreed against the appellant vide judgment and decree, dated 7-4-2004.The proceedings were converted into execution proceedings and the matter was further processed. During the process of execution, the Court ordered the auction of the mortgaged property. Auction was conducted and the Auctioneer submitted auction report as would be shown from order sheet dated 10-2-2005. The judgment-debtor/appellant filed objection petition in the trial Court and the case was fixed for reply to that objection petition. The Court directed for submission of objection, if any, regarding the auction report. The proceedings were processed and on 16-2-2006, the appellant/judgment­-debtor was absent, therefore, proceeded ex parte and the objection petition was dismissed in default.

3. It is against the above order that the appeal in hand has been preferred.

4. Learned counsel for the appellant argued that appeal against the order has been filed on 15-3-2006' which is within time. He further argued that on that date his junior was present in the Court but his presence was not noted by the learned Judge and thus the objection petition of the appellant was dismissed in default. To this effect, an affidavit dated 15-3-2006 has also been filed which reveals that one Syed Amir Abbas Advocate appeared on the crucial date before the learned Judge Banking Court-II Camp at D.I. Khan as a proxy for Syed Abid Hussain Bukhara, advocate for the Judgment-debtor/appellant. According to the affidavit, he appeared and requested the Court for adjournment but his presence was not marked and the matter was decided in the absence of the judgment-­debtor/appellant and his counsel. The learned counsel submitted that the absence of the appellant and his counsel was not intentional and in fact they were represented by Syed Amir Abbas Advocate and to that effect affidavit is on file and there is no counter-affidavit on the part of the respondent-bank to rebut the same.

5. The affidavit mentioned above proved that another counsel had represented the counsel for the appellant on the crucial date. The affidavit has not been controverted or rebutted because no counter-affidavit has been filed by the respondents, therefore, we have no option but to accept the affidavit and if the affidavit is accepted, it means that the appellant was represented by another counsel.

6. In this view of the matter, the Court could not proceed against the appellant.

2011 C L D 486

[Peshawar]

Before Sher Muhammad Khan, J

FAZAL ELLAHI---Appellant

Versus

AKHTAR ALI---Respondent

Regular First Appeal No. 27 of 2009, decided on 17th September, 2010.

Negotiable Instruments Act (XXVI of 1881)---

---Ss. 4 & 13---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 2 & 3---Money suit on basis of promissory note signed by two marginal witnesses---Maintainability---Suits on basis of negotiable instruments including promissory note under O. XXXVII, R. 2, C.P.C., might be instituted by presenting a plaint in prescribed forum---For purposes of deciding question as to whether document relied upon by a plaintiff was a negotiable instrument and trial under O. XXXVII, C.P.C., only contents thereof Would be taken into consideration---Where contents of such document fell under definition of S. 13 of Negotiable Instruments Act, 1881, then plaintiff would have option to file suit in ordinary civil court or special court-exercising powers under O. XXXVII, C.P.C.---Promissory note relied upon by plaintiff, which was duly entered in register of petition writer and exhibited in evidence, clearly indicated that defendant had given undertaking to plaintiff that he had secured loan of suit amount from him in presence of witnesses and would pay same on demand to plaintiff when, where and to' whom he desired---Such undertaking squarely fell under definition of promissory note given in S. 4 of Negotiable Instruments Act, 1881---Special Court exercising powers under O. XXXVII, C.P.C. had the jurisdiction to decide such suit on merits.?

Khalil ur Rahman v. Muhammad Shafee 1993 MLD 1144: Abdur Rauf v. Farooq Ahmad and another PLD 2007 Lah. 114; 2007 CLD 114 = PLD 2007 Lah. 121; Muhammad Asghar v. Mian Muhammad Hussain 2010 CLC 22; Aamir Tofail v. Muhammad Siddique and another 2006 CLD 91; Altaf Sarwar v. Shamas Din 2005 YLR 2614; PLD 2007 Lah. 121; 1973 SCMR 332 and 1973 SCMR 595 ref.

Ahmad Ali Khan for Appellant.

Malik Muhammad Asad for Respondent.

Date of hearing: 23rd July, 2010.

2011 C L D 504

[Peshawar]

Before Muhammad Safdar Khan Sikandri, J

MUHAMMAD KHALIL KHAN---Appellant

Versus

SALAH-UD-DIN---Respondent

R.F.A. No. 7 of 2008, decided on 20th September, 2010.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O. XXXVII, Rr.2 & 3---Qanun-e-Shahadat (10 of 1984), Art. 59---Suit on basis of promissory note---Signature on promissory notice and cheques denied by defendant in written statement and evidence---Report of Handwriting Expert showing signatures of defendant on promissory note not in conformity with his Specimen Signature Card of Bank---Validity---Statutory presumption of truth was attached to promissory note unless same was rebutted--- Burden lay on defendant to prove that promissory note was forged---Expert opinion was that signature on promissory note was not that of defendant and was forged---Nothing on record to prove that opinion of expert was otherwise---Cheques had become irrelevant due to failure of plaintiff to prove promissory note---Suit was dismissed in circumstances.

Rustam Khan Kundi for Appellant.

S. Mastan Ali Zaidi for Respondent.

Date of hearing: 14th September, 2010.

2011 CLD 727

[Peshawar]

Before Attaullah Khan, J

Haji MUHAMMAD AYAZ KHAN---Appellant

Versus

Malik KHAN AYAZ KHAN- --Respondent

R.F.A. No.45 of 2007, decided on 4th January, 2011.

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

----O. XXXVII, R. 2---Suit for recovery of loan amount on basis of pro note along with agreement---Plea that execution of agreement would create doubt about genuineness of pro note---Validity---Both pro note and agreement contained undertaking of defendant to pay on demand amount mentioned therein---No illegality existed in executing two documents regarding amount payable by defendant---Such plea was repelled in circumstances.

PLD 2007 Lah. 114 rel.

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

----S. 4---Stamp Act (II of 1899), S. 2(5)(b) & (22)---Qanun-e-Shahadat (10 of 1984), Art. 17(2)(x)---Pro note---Attestation by two marginal witnesses---Scope---Pro note, though not requiring such attestation under law, so attested, would attain a legal status of pro note---Such marginal witnesses would be in capacity of just indorsees.

PLD 2007 Lah. 114 rel.

Rustam Khan Kundi for Appellant.

Saleemullah Khan Ranazai and Anwarul Haq for Respondents.

Date of hearing: 4th January, 2011.

2011 CLD 863

[Peshawar]

Before Syed Sajjad Hassan Shah, J

Haji SIKANDAR WALI----Petitioner

Versus

Shahzada MOHIYUDDIN and another----Respondents

Civil Revision No.474 of 2001, decided on 20th September, 2010.

Civil Procedure Code (V of 1908)---

----O. VII, R.2---Contract Act (IX of 1872), Ss.2(d), 126, 127, 128 & 145---Suit for recovery of amount---Contract of guarantee, consideration for---Liability of surety---Surety's right to indemnity---Defendant/borrower obtained loan from bank and the plaintiff stood surety to the repayment of said loan to the bank---According to letter of lien, plaintiff/surety undertook to repay the loan amount with interest accrued thereto and he also authorized the bank to appropriate from his account in the same bank, any amount that could be necessary to adjust the loans taken by the borrower, without any reference to the plaintiff/surety---Borrower having failed to repay amount of loan to bank, same was recovered/adjusted by the bank from account of plaintiff surety---Plaintiff filed suit for recovery of said amount against defendant borrower---Said suit was dismissed by the Trial Court, but lower Appellate Court set aside judgment and decree passed by the Trial Court and decreed the suit---Validity---Recovery of amount having been made from the account of plaintiff, in the light of the terms and conditions of the letter of lien, proceedings between the bank and plaintiff was blessed with statutory sanction as provided under S.126 of Contract Act, 1872---Plaintiff being surety had paid loan amount to the bank on failure of borrower to pay the same-Plaintiff had legal right to demand the return of amount which he paid/adjusted towards the payment of loan obtained by the borrower---Under provisions of S.145 of Contract Act, 1872 borrower had to indemnify the surety and the surety was entitled to recover from the borrower the amount which had been paid by the surety---Right of plaintiff had sufficiently been protected under the law---Surety was entitled for the amount paid by him to the bank as surety of the borrower---Defendant borrower was bound to pay the disputed amount to the plaintiff surety---Judgment and decree passed by lower Appellate Court, which was lawful and not suffering from any illegality, irregularity and jurisdictional error, was maintained. ?

UBL v. Shahryar Textile Mills and others 1996 CLC 106: (Raja) Jagannath Bakhsh Singh v. Chandra Bhukhan Singh and another AIR 1937 Oudh 19; (1894) 2 QB 885 and Muthu Raman Chetty v. Chinna Vellayan Chetty AIR 1917 Madras 83 ref.

Mazullah Barkandi for Petitioner.

Abdul Sattar Khan for Respondents.

Date of hearing: 20th September, 2010.

2011 C L D 938

[Peshawar]

Before Mazhar Alam Khan Miankhel, J

MCB BANK LIMITED, PESHAWAR---Appellant

Versus

Messrs TILA FRONTIER FRUIT COMPANY and others---Respondents

F.A.B. No. 49 of 2006, decided on 2nd March, 2011.

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

----Ss. 9, 10 & 22---Suit for recovery of loan---Leave to defend suit--Appeal---Suit filed by plaintiff bank was dismissed by the Banking Court---In the present case, the entries of the statement of account, were denied and disputed by defendant/loanee from the day one---Once authenticity and correctness of statement of account was challenged, bank was required to prove entries made therein and only production of certified copies of statement of account would not absolve the bank front proving the entries so questioned---Bank had conducted the case in a very casual and careless manner and failed to prove even the existence of loan, what to talk of entries of statement of account---Bank could only succeed when the case was proved through cogent and reliable evidence in its favour---Burden of proof being on the Bank, it having failed to discharge the same, the only way, in normal course before the court was to dismiss the claim of the Bank---Plaintiff/bank had failed to prove its case through cogent and reliable evidence---Trial Court, in circumstances, had rightly dismissed the suit, which otherwise was barred by time---In absence of any misreading or non-reading of evidence on the record, impugned judgment could not be interfered with in appeal by High Court.

Messrs Muhammad Siddiq Muhammad Umar and another v. The Australasia Bank Ltd. PLD 1966 SC 684 ref.

Nazirullah Qazi for Appellant.

Nisar Ahmad Khan for Respondents.

Date of hearing: 2nd March, 2011.

2011 CLD 957

[Peshawar]

Before Ejaz Afzal Khan, C.J., and Mazhar Alam Khan Miankhel, J

KHURSHID KHAN---Appellant

Versus

REGIONAL GENERAL MANAGER (OPERATION), HABIB BANK LTD. and another---Respondents

F.A.B. No. 78 with C.M. No. 340 of 2009, decided on 22nd March, 2011.

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

----Ss. 9 & 22---Suit for rendition of account---Lease agreement of vehicle, that actual price thereof at 20%, would be paid by the lessee and remaining amount was to be paid in 60 monthly instalments---Lessee was entitled to free comprehensive insurance free registration etc.-Plaintiff filed suit against the Bank when he came to know that bank had charged him for the said benefits---Suit was dismissed by the Banking Court---Validity---Documents of the bank itself denied the version of the bank---Bank had indirectly included the amount of insurance etc. amount of benefits in the instalment on one side and on the other side, referred the same to be the benefits of the package---Impugned judgment and decree of Banking Court were set aside by High Court in appeal, and the suit of the plaint(ff was decreed holding that the bank was not entitled to recover the disputed amount.

Isaac Ali Qazi for Appellant.

Alhaj Gohar Rehman for Respondents.

Date of hearing: 22nd March, 2011.

2011 C L D 1586

[Peshawar]

Before Syed Sajjad Hassan Shah, J

MUHAMMAD RAFIQ and 6 others----Petitioners

Versus

ASHIQ BADSHAH or ZAHAWAR SHAH----Respondent

Civil Revision No.268 of 2008, decided on 9th June, 2011.

(a) Tort---

----Malicious prosecution---Suit for damages---Necessary ingredients---Plaintiffs had filed a suit against defendant for recovery of Rs.3,00,000 as damages on account of institution of suit against them by the defendant, on grounds that same was false, illegal and without any entitlement---Necessary ingredients of suit for damages were that the plaintiff was under the onus to show that he was prosecuted by the defendant in a false litigation; that prosecution terminated in favour of the plaintiff; that prosecution was malicious; that the prosecution was without reasonable and probable cause; that the proceedings had interfered with the plaintiff's liberty and had also affected his reputation and that the plaintiff had suffered damages---Was incumbent upon the plaintiffs to prove all said requirements, but they failed to substantiate the same through reliable evidence---Plaintiffs also did not bring on record any proof that suit filed by the defendant against them was based upon mala fide or any malice---Plaintiffs had not pleaded and said anything during their deposition before the court that defendant had filed the suit without reasonable and probable cause and was based on malice---Mere allegation that the suit of the defendant was false, against the law and without any rhyme or reason, was not sufficient to meet the requirement of law--- Trial Court had not considered the pleadings as well as evidence for arriving at a conclusion that the grant of damages for malicious prosecution was justified or not---Plaintiffs besides their own statement, could not produce any other documentary and oral evidence to substantiate their claim of award of damages---Appellate Court, in circumstances had rightly dismissed the suit of plaintiffs---No illegality or material irregularity having been committed by Appellate Court while deciding the appeal; judgment of Appellate Court could not be interfered with, in circumstances.

Abdur Rauf. v. Abdur Razaq and another PLD 1994 SC 476 and Mst. Amna v. Nizamuddin 1985 MLD 271 rel.

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

----S. 115---Revisional jurisdiction, exercise of---While hearing revision petition under S.115, C.P.C., High Court had to satisfy itself on three matters; that order of the lower court was within its jurisdiction; that case was one in which the court ought to exercise jurisdiction; and that in exercising the jurisdiction, the court had not acted illegally.

Khalil Khan Khalil and M. Muhammad Younas Shah for Petitioners.

Hidayatullah Khattak for Respondent.

Date of hearing: 9th June, 2011.

2011 C L D 1683

[Peshawar]

Before Ejaz Afzal Khan, C.J. and Yahya Afridi, J

Messrs SPINGHAR TEXTILE MILLS LTD. and another---Appellants

Versus

UNITED BANK LIMITED and another---Respondents

I.C.As. Nos. 1 and 2 of 2011, decided on 13th July, 2011.

(a) Law Reforms Ordinance (XII of 1972)---

----S. 3---Intra Court appeals---Maintainability of two appeals filed by company, was objected to on the ground that either the resolution of Board of Directors of the company was not available or it was too vague to be considered as a valid authority to the persons who had filed the appeals---Extract of minutes of the meeting of the Board of Directors of the company, with regard to one appeal, was available in record which had seal of the company affixed thereon---Said resolution had authorized the Chief Executive of the company to represent the company which appeared to be sufficient authorization of Chief Executive of the company to institute appeal on behalf of the company---Said appeal, in circumstances, was maintainable in its form and authority---No resolution of the company was on record authorizing the eight persons named in the other appeal to represent the company in the filing of the appeal---Memo of said appeal was silent on their interest in mortgaged property---Other appeal, in circumstances, was not maintainable on that legal score, alone.

1999 MLD 2127; PLD 1993 Lah. 706; 2003 CLD 1157; 2003 CLD 956; 2002 CLD 1071; 2005 CLD 1511; 2007 CLD 712; Khan Iftikhar Hussain Khan of Mamdot v. Messrs Ghulam Nabi Corporation Ltd. PLD 1971 SC 550 and Hibro Instruments (Pvt.) Ltd. v. Mst. Sikandar Begum 2007 MLD 1270 rel.

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

----Ss. 4, 7(1)(a), 9(4)(5), 19(2)(7) & 22---Civil Procedure Code (V of 1908), Ss. 4, 96, 104, 141, O.XLIII, R.1(J)---Appeal, maintainability of---Maintainability of appeal was objected to on the ground that when a clear provision of appeal had been provided under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, appeal under Code of Civil Procedure, 1908, was not maintainable---Appeal filed by appellant company, purported to have been filed under S.96 of C.P.C. and said provision, did not relate to the facts of the case, as same related to an appeal against a decree---In the present case, the company was aggrieved of an order of the Banking Judge, confirming the sale of auction and rejection of the objection made thereon by the company---Relevant provision for an appeal against such order in C.P.C. was provided for in S.104 read with R.1(J) of O.XLIII, C.P.C.---When there was a clear provision of appeal provided in Financial Institutions (Recovery of Finances) Ordinance, 2001, then appeal provided therein would prevail; and would override the provisions of appeal provided in C.P.C.---When compared the provisions of appeal against an order provided in both the statutes, C.P.C. and the Ordinance had a common forum; the High Court---No special condition precedent existed under S.22 of Financial Institutions (Recovery of Finances) Ordinance, 2001, that rendered the appeal filed by the company as incompetent---Quoting a wrong provision of law in the appeal, but before a correct forum, would not render the appeal incompetent and liable to dismissal---Present appeal would be deemed to be an appeal filed under S.22 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Objection raised by the Bank, in that respect, was rejected as merit and substance and not technicalities were to govern.

Hudaybia Textile Mills Ltd. v. Allied Bank of Pakistan Ltd. PLD 1987 SC 512 rel.

Land Acquisition Collector, Rawalpindi v. Lieutenant-General Wajid Ali Khan Burki PLD 1961 Lah. 1028; Sajid Hussain Shah v. Ghulam Rukkia PLD 2004 Lah. 475 and Sikandar Trading Company v. Habib Bank Ltd. 2008 CLD 326 ref.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O.XXI, Rr.89 & 90---Execution of decree---Objection to---Appeal---Contention of decree-holders was that judgment-debtor by not depositing 5% of auction amount with objection petition, had violated provisions of O.XXI, R.89, C.P.C., which had rendered the objection petition to be not maintainable being misplaced---Regime provided under Rs.89 & 90 of O.XXI, C.P.C., cater to different and distinct circumstances---Where the judgment-debtor or the mortgagor did not want to contest the 'bona fide' of the auction or its property and merely wanted to release his property from the interest created in favour of the auction purchaser, he had to apply under R.89 of O.XXI, C.P.C.---Where the judgment-debtor or the mortgagor having an interest in the auction property was aggrieved of any 'fraud' or 'irregularity' committed in the auction proceedings, or its confirmation, he need not deposit the amount so stated in Rule 89 of O.XXI, C.P.C.; he could invoke the provisions of R.90 of Order XXI, C.P.C.---Appellants having alleged 'fraud' and 'irregularity' in the very auction proceedings, their case would fall under R.90 and not under R.89 of O.XXI, C.P.C. and there was no requirement for the appellant to deposit any amount with their objection petition---Objection was overruled, in circumstances.

Mir Wali Khan v. Manager Agricultural Development Bank of Pakistan PLD 2003 SC 500 rel.

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

----Ss. 19 & 22---Civil Procedure Code (V of 1908), O.XXI, Rr.84 & 85--- Execution of decree--- Making payment, through cheque--- Judgment-debtor objected in the petition that by paying auction amount through cheque, provisions of O.XXI, R.84, C.P.C. had been violated by auction purchaser---Validity---In the present day law and order situation, it would be unfair, for a prospective bidder to carry with him a huge amount of funds running into millions in cash in order to fulfil the requirements of Rr.84 & 85 of O.XXI, C.P.C.---Banking Judge, while settling the terms of proclamation, ought to take into account all aspects of the case and depending upon the peculiar circumstances of the case, determine the mode of payment---Site and time of auction and the value of property, being auctioned, would be relevant factors for determining the said mode of payment---Paramount consideration being that the auction proceedings were validly carried out, and no prejudice was caused to any party---Entire auction proceedings could not be brought to a halt, merely for the reason that the initial payment was made through cheque---Record had revealed that, not only was the cheque deposited with the auctioneer and before the Banking Judge, but same was duly honoured and funds were realized---Such ground of challenge made by the judgment-debtor was not sustainable, in circumstances.

Muhammad Ikhlaq Meman v. Zakria Ghani 2005 CLD 1589; Shaukat Ali Mina v. Trust Leasing Corporation 2002 CLD 1071 and Messrs Ali Match Industries Limited v. IDBP 1999 MLD 2127 rel.

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

----S. 19--- Execution of decree--- Objection to--- Judgment-debtor agitated that there was a 'fraud' committed by the officials of decree-holder/bank and the auction purchaser, whereby mortgaged property had in fact been sold at a very nominal price---Validity---Auction report and the accompanying statement recorded by the auctioneer, did not support such serious allegations made by the judgment-debtor---Record of the auction proceedings revealed that the bidders present were from different parts of Pakistan, the bids so made had been clearly stated in respect of each bidder and the contest between the two highest bidders was also very close---No concrete evidence was placed on record which could sway attention to alleged 'fraud'---Said ground of challenge, did not prevail, in circumstances.

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

----S.19---Civil Procedure Code (V of 1908), O.XXI, Rr.64, 65, 66 & 90---Execution of decree---Objection to---Auction and its confirmation was objected to by judgment-debtor, alleging that as the "reserve" price had not been mentioned in the proclamation, the entire auction proceedings was liable to be set aside---Validity---Once the Banking Judge had decided to opt for executing the decree by public auction of the mortgaged property under the provisions of C.P.C., then prior to the actual auction, the terms of auction had been settled and thereafter the same were duly incorporated in the proclamation as ordained under provisions of Rr. 64, 65, 66 of O.XXI, C.P.C.---Was not mandatory for the Banking Judge to state its own value of the property being auctioned in the proclamation, which was more commonly referred to as the 'reserve price'; it was, however, mandatory that the value so determined by the parties, i.e. the decree holder and the judgment-debtor, was to be stated in the proclamation---Rationale behind stating the said value in the proclamation, was to ensure full disclosure to the prospective bidder intending to participate in the proposed auction---Estimated 'value' of mortgaged property as considered by the parties, was also not mentioned in the said proclamation---Direction rendered by the Banking Judge to the auction, regarding the decision for separate auction of machinery, plant and landed property, was also not incorporated in the proclamation---Not only the clear letter but the spirit behind the provisions contained in R.66 of O.XXI, C.P.C. were violated, which would bring the same within the mischief of the term irregularity provided in R.90 of O.XXI, C.P.C.---Order of Banking Court and auction proceedings were set aside, with the direction to the Banking Judge to carry out fresh auction of mortgaged property.

Mrs. Shahida Saleem v. Habib Credit and Exchange Bank Ltd. 2001 CLC 126; Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd. 2003 CLD 1693; Jadhar Prasad and others v. Babu Bakhta Ratan and others AIR 1973 SC 2593; Raghunath Singh v. Hazari Sahu AIR 1917 Patna 381; Saadatmant Khan v. Phul Kuar 1898 20 All 412; Barkat Ram v. Baghwan Singh AIR 1940 Lah. 394; Ban Behari Chattar Ji v. Bhukhan Lal Chaoudhury AIR 1933 Cal. 511; Suhrawardy and Graham, JJ. (Kumar) Pashupati Nath Maliah and another v. Bank of Behar AIR 1932 Cal. 141; Suhrawardy and Graham, JJ, Lachira v. Rameswar Singh and others AIR 1930 Cal. 781; Muhammad Hussain v. Muslim Commercial Bank Ltd. 2003 CLD 1693 and Brig. (Rtd.) Mazharul Haq and another v. Messrs Muslim Commercial Bank Ltd. Islamabad and another PLD 1993 Lah. 706 rel.

S. Mudassir Amir for Appellants.

Amir Javed and Ch. Riasat Ali Gondal for Respondents.

Date of hearing: 2nd June, 2011.

2011 C L D 1774

[Peshawar]

Before Mian Fasih-ul-Mulk, J

Messrs GAGGAN CATERING SERVICE----Petitioner

Versus

Messrs BALANA RESTAURANT through Authorized Partner and others----Respondents

Civil Revision No.998 of 2011, decided on 8th September, 2011.

(a) Public Procurement Regulatory Authority Rules, 2004---

----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--- Catering contract award of---Plaintiff's plea that Pakistan International Airlines Corporation had awarded such contract to defendant without floating tenders in electronic and print media whereby plaintiff had been deprived of an opportunity of fair competition through tendering process---Plaintiff's application under O.XXXIX, Rr.1 & 2, C.P.C., to restrain Airlines Corporation from acting upon such contract---Trial Court dismissed such application, while Appellate Court suspended operation of letter of intent---Validity---Questions as to whether plaintiff was informed of bidding process or not and whether Airlines Corporation had violated Public Procurement Regulatory Authority Rules, 2004 or not, would be determined after recording pro and contra evidence of parties----Granting of stay order would amount to grant of full relief as sought in the suit---Total relief could not be granted in garb of interim relief---Airlines Corporation could not make out a prima facie case and satisfy other essential ingredients for issuance of interim injunction---High Court set aside impugned order and restored that of Trial Court with directions to decide suit within specified period.

Tauseef Corporation Private Limited v. Lahore Development Authority and others 2002 SCMR 1269; Oil and Gas Development Corporation v. Lt. Col. Shujauddin Ahmad PLD 1970 Kar. 332 and Shah Jehan v. Fazlur Rehman 2001 CLC 1695 rel.

(b) 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---Interim injunction, relief of---Scope---Total relief could not be granted in garb of such relief.

Qazi Jawed Ehsanullah for Petitioner.

Alam Zeb and Zakir Tareen for Respondents.

Date of hearing: 8th September, 2011.

2011 CLD 23

[Quetta]

Before Qazi Faez Isa, C.J. and Syeda Tahira Safdar, J

MUHAMMAD SHOAIB---Petitioner

Versus

PROJECT DIRECTOR, NATIONAL ICT SCHOLARSHIP PROGRAM, MINISTRY OF INFORMATION TECHNOLOGY, ISLAMABAD and another---Respondents

C.P.No.709 of 2009, decided on 1st March, 2010.

(a) Constitution of Pakistan---

----Art. 199-Constitutional petition Application for scholarship-Petitioner who was one of the applicants had completed the prescribed Registration Form and provided particulars about his academic achievements and mentioned his preference of universities as sought in the Registration Form-Petitioner recorded his four preferences; viz; National University of Science and Technology; COMSATS . Institute of Information; Balochistan University of IT and Ghulam Ishaq Khan Institute-Petitioner fulfilled the scholarship programme criteria and obtained the requisite marks and was designated as 'qual4fled', pursuant to the test given by National Testing Service-Petitioner then proceeded to second preference university namely 'COMSATS' as instructed by the authorities-When petitioner was found not to meet the said university's entrance criteria, he proceeded again as instructed to third preference-Authorities, in circumstances, were not Justified to allege that transfer of the petitioner to third preference was without approval.

Salahuddin v. Frontier Sugar Mills and Distillery Limited PLD 1975 SC 244; Province of N.-W.F.P. v. P.T. Corpn. PLD 2005 SC 670; Zahoor Ahmed shah v. Pakistan Medical and Dental Council 2005 MLD 718; New Jubilee Insurance Co. Ltd. v. Collector of Customs 1997 MLD 2770; Abdul Razzak v. Federation of Pakistan PLD 1998 Lah.394; Benazir Bhutto v. Federation of Pakistan PLD 1999 Kar.39; Amin Farooq v. Vice-Chancellor 1993 CLC 474; Mrs. M.N. Arshad v. Miss Naeema Khan PLD 1990 SC 612 and Zainul Abidin v. Multan Central Co-operative Bank Ltd. PLD 1966 SC 445 ref.

(b) Constitution of Pakistan---

----Arts. 29 & 37---Functions of State and Principle of Policy---Provision of education was function of the State--No reason existed for ignoring the requirements of Art.37(c) of the Constitution whereunder the State would make technical and professional education generally available and higher education equally accessible to all on the basis of merit---Article 29 of the Constitution, providing Principles of Policy, required each organ or Authority of State to act in accordance with those principles.

Attiya Bibi Khan v. Federation of Pakistan 2001 SCMR 1161; Benazir Bhutto v. Federation of Pakistan PLD 1988 SC 418 and Employees of the Pakistan Law Commission v. Ministry of Works 1994 SCMR 1548 ref.

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

----Ss. 15, 29 & 30-Memorandum and Articles of Association-- Government controlled Company--Appointment of Directors of such company---Power to appoint Directors and Chairman mentioned in the Memorandum, vested in the Federal Government--Remaining Directors were to be selected by the Secretary Ministry of Information Technology---Directors appointed under Article of the Memorandum though designated as 'Independent Directors' could be removed even before the expiry of their terms--In view of the fact that six Directors were Federal Government employees and the remaining were chosen by the Selection Committee constituted by the Federal Government without security of tenure, it was clear that the control of the company vested in a substantial manner in the hand of the Government.?

(d) Constitution of Pakistan---

----Art. 199---Powers of High Court to issue writ---Scope-Two-fold power vested with High Court to issue writs---In the first place, the person to whom High Court would issue such a writ must be within the territorial jurisdiction of the court; and in the second, the impugned act done or proceedings taken by a person must have been done or taken within the territorial jurisdiction of the court.

?

H. Shakil Ahmed for the Petitioner.

Muezzin Qureshi for Respondent No.1.

Qahir Shah for Respondent No.2.

Date of hearing: 8th December, 2010.

2011 CLD 785

[Quetta]

Before Jamal Khan Mandokhail and Mrs. Syeda Tahira Safdar, JJ

Haji DAD MUHAMMAD---Appellant

Versus

MUSLIM COMMERCIAL BANK LIMITED---Respondent

High Court Appeals Nos. 9 and 10 of 2004, decided on 16th March, 2011.

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

----Ss. 2(c)(d), 7, 9 & 22---Suit for recovery of amount and damage--- "Customer" and "Finance"--- Definition---Jurisdiction of Banking Court---Scope---Plaintiffs had alleged in their plaints that they were maintaining account in the defendant Bank, which account was not properly maintained and the Bank had failed to perform its liabilities; that they had deposited various amounts in cash as well as through cheques and other negotiable instruments, but Bank had failed to credit said amount in their accounts and that the Bank had illegally detained the amount and was not ready to pay it to the plaintiffs---Maintainability of suit filed by the plaintiffs was objected to by the Bank alleging that Banking Court had no jurisdiction in the matter as plaintiffs did not come within the definition of "customer" and their claim also did not come within the definition of 'finance" as defined in S.2(c)(d) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court accepting objection of defendant Bank, returned both the plaints to the plaintiffs---Validity---Word 'customer' in S.2(c) of Financial Institutions (Recovery of Finances) Ordinance, 2001 was limited to a person on whom finance had been extended and it included a person on whose behalf a guarantee or letter of assurance had been issued by the financial institution and person, other than defined in said section would not come within the definition of a 'customer'---Mere being an account-holder of the Bank, plaintiffs could not be considered as 'customers'; and amount allegedly deposited by the plaintiffs also would not come within the purview of finance'---Opening of an account and depositing of amount by an account-holder would not be considered as finance'---All claims relating to advancement of 'loan' or default in fulfilment of an obligation pertaining to any finance' was triable by the Banking Court---Law had not permitted any other claim to be tried by a Banking Court---Plaintiffs in the present case had claimed that they had deposited their amount with the defendant Bank, but had not been credited in their account---Claim of the plaintiffs, did not come within the jurisdiction of the Banking Court---No illegality or irregularity having been found in the impugned orders, appeals were dismissed by High Court.

Gul Hassan for Appellants.

Muhammad Zahid Muqeem Ansari and Syed Pervaiz Akhtar for Respondent.

Date of hearing: 2nd August, 2010.

2011 C L D 982

[Quetta]

Before Mrs. Syeda Tahira Safdar and Jamal Khan Mandokhail, JJ

MUHAMMAD ALI---Appellant

Versus

BRANCH MANAGER, NATIONAL BANK OF PAKISTAN and 2 others---Respondents

High Court Appeal No. S-1 of 2009, decided on 24th February, 2011.

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

----Ss. 9(5) & 12---Ex parte decree against principal debtor and guarantor---Guarantor's application for setting aside such decree on ground that he was not served with summons in suit; that he came to know about decree after his arrest in its execution; and that newspapers had no circulation in his area---Validity---Report in respect of summons issued through registered post and Divisional Police Officer were not available on record---Service of summons was effected upon defendants through publication in two newspapers available on record-As service was duly effected on defendants through publication, therefore, no further notice was required to be issued to them---Guarantor had not denied his address finding mention in plaint---Reports of process serving agencies on notices and warrants issued in execution proceedings showed avoidance of service by defendants---Ex parte decree was passed on 12-4-2008, whereas guarantor filed such application on 28-4-2009 after his arrest on 24-7-2009 in its execution---Guarantor had failed to appear before court' at relevant time after his service through publication-As per his admission, guarantor got knowledge of decree on 24-7-2009, when he was arrested---Guarantor had filed such application after 21 days of his arrest without giving any reason or explanation for such delay---Avoidance of service of process of court by defendants showed mala fides on their part---Nothing on record to show that Bank had committed fraud with guarantor---Guarantor had failed to approach court within provided period and establish that he was not properly served---Such application was dismissed in circumstances.

Ayaz Swati for Appellant.

Gohar Yaqoob Khan for Respondent No. 1.

Date of hearing: 23rd September, 2010.

2011 CLD 1263

[Quetta]

Before Naeem Akhtar Afghan and Muhammad Noor Meskanzai, JJ

Messrs NOOR FLOUR MILLS through Sole Proprietor and another---Appellants

Versus

JUDGE BANKING COURT BALOCHISTAN, QUETTA and another---Respondents

High Court Appeal No. 16 of 2007, decided on 30th May, 2011.

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

----O. XX, R. 5--- Judgment--- Necessary ingredients---Judgment must contain reasons that justify conclusion arrived at and those reasons should be convincing---Judgment should contain concise statement of the case, points for determination, decision thereon and reasons for each decision, manifesting application of mind by the judge to resolve issues involved---Judgment should be speaking, well reasoned and reflecting due consideration of facts, law and contention of parties.

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

----S. 10---Application for leave to defend---Questions of fact and law---Non-speaking order---Effect---Banking Court without discussing/ dilating upon points of fact and law agitated in application for leave to defend and without considering documents available on record dismissed the application resultantly the suit was decreed in favour of bank---Validity---Matters relating to commercial transactions and issues were to be decided in speedy way for which specific procedure and system had been provided within the provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001---In matters relating to commercial transactions, documents were executed between parties towards their rights and liabilities which were to be given weight/ discussed--Judgment and decree passed by Banking Court could not be termed as a speaking judgment as Banking Court failed to give any decision on points of facts and law agitated by defendant nor had discussed the documents filed by parties on record---High Court set aside the judgment and decree passed by Banking Court and remanded the case to Banking Court for deciding application filed by defendant under S. 10 of Financial Institutions (Recovery of .Finances) Ordinance, 2001---Appeal was allowed according.

Syed Ayaz Zahoor for Appellants.

Ayaz Sawati for Respondents.

Date of hearing: 17th May, 2011.

2011 C L D 1554

[Quetta]

Before Muhammad Hashim Khan Kakar and Ghulam Mustafa Mengal, JJ

Messrs AL-MAKKAH CNG STATION through Proprietor---Petitioner

Versus

GOVERNMENT OF PAKISTAN MINISTRY OF PETROLEUM AND NATURAL RESOURCES through Secretary Islamabad and another---Respondents

Constitutional Petition No.(S) 51 of 2011, decided on 18th August, 2011.

(a) Oil and Gas Regulatory Authority Ordinance (XVII of 2002)---

----S. 6---Compressed Natural Gas (CNG) (Production and Marketing) Rules, 1992---Constitution of Pakistan, Arts.4, 18, 158 & 199---Constitutional petition---Establishment of CNG Filling Station in Sibi (Balochistan)---Grant of Provisional licence for such station and obtaining of NOC from Municipal Administration, Chief Inspector of Explosives and the Gas Company---Completion of such station by spending huge amount---Pre-commissioning inspection of such station by consultant of OGRA and payment of dues of SSGC by petitioner---Refusal of OGRA to grant CNG Marketing Licence to petitioner in view of subsequent ban imposed by Prime Minister on new gas connections---Validity---Impugned ban would apply only to new industrial connections---Petitioner did not fall within ambit of impugned ban for having been granted permission by SSGC much prior to its imposition---Petitioner in pursuance of provisional licence after having obtained NOCs from various authorities and deposited dues of Gas Company, had a vested right for grant of marketing licence---Oil and Gas Regulatory Authority was legally bound to issue licence for putting petitioner's station into operation--- Petitioner's fundamental right to conduct lawful business of such station had been infringed---So long a trade or business was lawful, a citizen eligible to conduct same could not be deprived from undertaking the same---High Court, in exercise of its powers of judicial review, could examine prohibition, if any, imposed on such right---Every citizen had a fundamental right to be dealt with in accordance with law---Refusal of Oil and Gas Regulatory Authority to issue marketing licence to petitioner was illegal, thus, he had not been dealt with in accordance with law---Policy decision of Federal Cabinet was that supply of gas would remain uninterrupted in gas producing areas including Balochistan--- Article 158 of the Constitution had provided that a Province, in which a well-head of natural gas was situated, shall have the precedence over other part of Pakistan in meeting the requirements from the well-head, subject to the commitments and obligations as on the commencing day---Oil and Gas Regulatory Authority had neither pleaded that gas produced in Balochistan was more than its requirements nor placed on record any agreement regarding commitment---When statutory functionary acted mala fide or in a partial, unjust and oppressive manner, then High Court could issue appropriate directions--- High Court accepted constitutional petition with special cost of Rs.20,000 and directed the Authority to issue marketing licence to petitioner immediately.

Brig. Muhammad Bashir v. Abdul Karim and others PLD 2004 SC 271 rel.

(b) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope---When statutory functionary acted mala fide or in a partial, unjust and oppressive manner, then High Court had the power to issue appropriate directions.

Brig. Muhammad Bashir v. Abdul Karim and others PLD 2004 SC 271 rel.

H. Shakeel Ahmed for Petitioner.

Malik Sikandar Khan, Dy. A.-G. for Respondent No.1.

Saleem Ahmed Lashari for Respondent No.2.

Date of hearing: 11th August, 2011.

2011 C L D 1730

[Quetta]

Before Mrs. Syeda Tahira Safdar, J

Messrs AKHTAR MUHAMMAD AND BROTHERS through Proprietor---Appellant

Versus

Haji MUHAMMAD NABI AND BROTHERS and another---Respondents

Civil Miscellaneous Appeal No. 8 of 2011, decided on 24th August, 2011.

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

----S. 40(5)---Trade mark---Infringement---Scope---Act of infringement only takes place when there is a registered trade mark--- In absence of registration, act of infringement is nowhere.

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

----Ss. 39, 40 & 41---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Infringement of trade mark---Interim injunction---Pre-conditions---Plaintiff claimed that trade mark in question was registered in his name and use of the same by defendant was an act of infringement---Interim injunction was granted by Trial Court in favour of plaintiff---Plea raised by defendant was that no trade mark was registered in favour of plaintiff---Validity---In absence of Certificate of Registration of Trade Mark, no right accrued in favour of plaintiff, infringement of which could be claimed---No prima facie case existed in favour of plaintiff and balance of inconvenience was also not in his favour---In absence of other two ingredients, suffering of irreparable loss was out of question---Trial Court did not properly appreciate the facts thus arrived to the conclusion which was not in accordance with law and facts, therefore, the same was not sustainable---High Court in exercise of appellate jurisdiction, set aside the order passed by Trial Court and application of interim injunction filed by plaintiff was dismissed---Appeal was allowed, in circumstances.

Muhammad Qahir Shah for Appellant.

Kamran Murtaza for Respondent No.1.

Date of hearing: 8th June, 2011.

2011 C L D 4

[Securities and Exchange Commission of Pakistan]

Before Asif Jalal Bhatti, Executive Director (SCD)

In the matter of: Messrs INVESTEC MUTUAL FUND LTD.

Show-Cause-Notice No.SCD/NBFC/MF-IMFL/533/2010, decided on 6th July, 2010.

Companies Ordinance (XLVII of 1984)---

---Ss. 305, 309(c), 158, 233 & 245---Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, Rr. 37, 38, 39 & 40---Winding up of the company---Violation of various provisions of regulatory framework--Securities and Exchange Commission of Pakistan, found the company to be in violation of various provisions of the regulatory framework that appeared to be prejudicial to the interests of the shareholders of the company---Show­cause notice was issued to the company pointing out that the company had failed to obtain registration under R.38 of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2002; that it failed to hold its Annual General Meeting for the relevant year as required under S.158 of the Companies Ordinance, 1984; that company had failed to prepare the annual accounts for the relevant year and that company had failed to appoint a custodian with prior written approval of the Commission in terms of R.40(1) of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003---Investigation report had clearly established that affairs of the company were severely mismanaged, its management was guilty of misconduct and had carried out business of the company in a manner oppressive to its members and the financial position of the company was such as to endanger its solvency---Company was not only financially insolvent, but also not a going concern and had been violating Rr.38, 39 & 40(1) of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, as well provisions of Ss.158, 233, 245 of Companies Ordinance, 1984 and consequently was jeopardizing and oppressing the interests of the members of the company---Commission, in exercise of its power under S.309 of the Companies Ordinance, 1984, authorized the Joint Registrar, Company Registration Office to present a petition for winding up of the company in High Court.

2011 C L D 256

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

SALMAN MAJEED SECURITIES (S. M. C. PRIVATE) LIMITED: In the matter of.

Show-cause Notice No.1(13)SMS/MSW/SMD/2010//01, dated 6th October, 2010, decided on 3rd November, 2010.

Brokers and Agents Registration Rules, 2001---

----Rr. 8, 12 & Third Sched.---Movement of securities pertaining to sub-account holders from main account to home account---Imposition of penalty---Securities pertaining to CDC Sub-account holders which were not part of proprietary trading of the company, were moved by the company from main account to home account---Securities and Exchange Commission directed the company to furnish reply vide a letter with regard to relevant movement of securities---Required information regarding movement of securities pertained to period from February, 2010 to April, 2010, but the company provided information for an irrelevant period from September 1 to September 24, 2010---Information given by the company also contradicted the statement made in its letter---Information provided by the company was misleading and incorrect---Company by so doing had violated clause 1X2) of Code of Conduct prescribed in the Brokers and Agents Registration Rules, 2001 with R.8(iv) thereof---Further, providing information to the Commission that was false, was contra to the prohibition imposed in R.8(viii) of Brokers and Agents Registration Rules, 2001---Violation of Code of Conduct and provisions of the Brokers and Agents Registration Rules, 2001, had attracted the penal provisions of R.8(a)&(b) of said Rules, which had empowered the Commission to suspend registration of the Broker or impose a fine---Company, however, having prayed to take lenient view, Commission did not exercise its powers to suspend the registration of the company and instead in exercise of its power under R.8(b) of Brokers and Agents Registration Rules, 2001, imposed on the company a penalty of Rs.25,000 and further advised the company to ensure compliance of law and directives of the Commission in future for avoiding any punitive action under the law.

Salman Majeed Sheikh, Chief Executive Officer and Fazal Mahmood, Consultant.

Syed Asad Haider, Joint Director and Umair Zahid, Assistant Director assisting Director (SMD).

2011 CLD 317

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

SHOW-CAUSE NOTICE ISSUED TO IRFAN ASLAM: In the matter of.

Show-cause Notice, dated 12-3-2010, decided on 23rd July, 2010.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 15-A---Sale and purchase transaction through Stock Exchange by insider---Imposition of penalty---Both Textile Mills and Cotton Mills, in the present case, were Public Limited Companies listed on the Stock Exchange---During period under revision Cotton Mills sold its entire holding of shares---Trading date of the Stock Exchange for period under revision had shown that out of total sale to Textile Mills by Cotton Mills shares were purchased by insider and he also purchased shares of Textile Mills through Karachi Automated Trading System (KATS) of the Stock Exchange---Said insider was brother of Chief Executive Officer of the Textile Mills and Director of Cotton Mills---Both mills were merged and as a result of said merger, Cotton Mills was supposed to be merged into Textile Mills and Textile Mills remained as the surviving entity---Counsel for the insider had admitted that transaction in the shares of Textile Mills were conducted between the insider and Cotton Mills through a coordinated and prearranged manner and his brother who was Chief Executive Officer of Textile Mills and Director of Cotton Mills, was privy to said transaction; it was also admitted that brother of insider was operating the brokerage account of Cotton Mills---Both brothers were insiders and through their dominant, position in Textile Mills had information regarding financial performance of said mills and it was established that the trading in the shares of Textile Mills by insider in the period under revision was substantially different from the trading history of the scrip---Insider neither was an officer of both Mills nor was on Board of Directors of said companies; as a simple shareholder, he would not have had access to confidential information regarding the financial performance of the either mills directly which had clearly indicated that insider had inside information prior to the transactions based on which he placed orders to purchase shares of Textile Mills---Insider had purchased shares of mills at a significantly low price on the basis of said information regarding financial results of Mills---Total loss caused by the insider to the Mills amounted to Rs.11,541,140---Penalty of rupees one million was imposed on insider for contravention of provisions of S.15-A of Competition Ordinance, 2010; he would also pay amount of Rs.11,541,140 to Cotton Mills as compensation of loss caused by him by purchasing share of Textile Mills.

Salman Akram Raja Legal Counsel, Rashid Sadiq Consultant and Humayun Bakht, CFO (Shahzad Textile Mills Limited) representing Irfan Aslam at first hearing.

Tayyaba Nisar, Assistant Director and Umair Zahid, Junior Executive assisting Director (SMD) at first hearing.

Rashid Saidq, Consultant and Humayun Bakht, CFO (Shahzad Textile Mills Limited) representing Irfan Aslam at second hearing.

Tayyaba Nisar, Assistant Director and Umair Zahid, Junior Executive assisting Director (SMD) at second hearing.

2011 C L D 345

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director

SHOW-CAUSE NOTICE ISSUE TO FAIRTRADE CAPITAL SECURITIES (PRIVATE) LIMITED: In the matter of

No.SMD-South/MSI/INV/2010, decided on 26th November, 2010.

Securities and Exchange Ordinance (XVII of I969)---

----Ss. 5A & 22---Brokers and Agents Registration Rules, 2001, R.12 & Third Schedule---Contravention of Code of Conduct--Imposition of penalty---After examination of the Karachi Automated Trading System ('KATS') data, it was noted that company had not properly entered clients' codes for execution of inter-exchange trades in various scrips on behalf of clients of Lahore Stock Exchange (Guarantee) members---Commission vide its letter advised the company to provide its comments and documentary evidence to clarify its position in the matter---Reply of the company was not considered satisfactory as it did not contain any cogent reason, explanation, evidence or justification regarding the execution of the clients trading in the Proprietary Accounts of Lahore Stock Exchange members---In order to have the fair, efficient and transparent market, it was critical that every trade executed at a stock exchange should be tracked to recognize the true identity of beneficial owner---Act of the company to execute the client's trading in Proprietary Accounts of Lahore Stock Exchange members, were contra to the provisions of the legal framework engrained in the Code of Conduct prescribed under Securities and Exchange Ordinance, 1969 and the Brokers and Agents Registration Rules, 2001---Such execution had shown that company had failed to maintain high standard of integrity and fairness in conduct of the business---Company had also failed to comply with specific directive issued by the Commission---Company, in circumstances, had violated clauses A1, A2, A5 and D1(2) of the Code of Conduct contained in Third Schedule prescribed under S.5A of Securities and Exchange Ordinance, 1969 and R.12 of Brokers and Agents Registration Rules, 2001, attracting the penal provisions of S.22 of the Ordinance---Violation of said provisions of law was a serious matter, however, in view of an express assurance communicated by representative of the company of complete compliance of applicable laws in future, taking lenient view, fine of Rs.50,000 was imposed on the company with direction to the company to ensure full compliance of all the laws applicable to it and directives of the Commission in future for avoiding any serious punitive action under the law.

Kapeel Dev, Assistant Director (SMD).

Abdul Rahman, Manager Accounts Fairtrade Capital Securities (Pvt. Ltd.).

2011 C L D 367

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director

SHOW-CAUSE NOTICE ISSUED TO SALMAN MAJEED SECURITIES (SMC-PRIVATE) LIMITED: In the matter of

No.1(13)SMS/MSW/SMD/2010/01, decided on 3rd November, 2010.

Brokers and Agents Registration Rules, 2001---

----Rr. 8, 12 & Third Schedule---Providing misleading and incorrect information regarding movement of the securities--Imposition of penalty---Securities and Exchange Commission, enquired from the company regarding movement of securities pertaining to CDC sub-account holders from main account to house account of company during period from February, 2010 to April, 2010; as said securities were not part of proprietary trading of the company---Required information regarding said movement of securities pertained to the period from February, 2010 to April, 2010, whereas the company provided misleading and incorrect information for an irrelevant period that was September 1, 2010 to September 24, 2010---Company was informed about submission of said misleading and incorrect information---Company was also required to submit the appropriate details regarding the matter, but in complete disregard to the Commission's letter, no information or reply was received from the company---Representative of the company prayed that the Commission could take a lenient view in the matter because the delay in providing information was not wilful or to cause any offence---In view of the contraventions of Code of Conduct and Brokers Rules, while giving due consideration to the prayer of the company to take a lenient view, the Commission had not exercised the power to suspend the registration of the company---However, in exercise of powers under R.8(b) of Brokers and Agents Registration Rules, 2001, imposed on the company a penalty of Rs.25,000--Company was strongly advised to ensure compliance with law and directives of the Commission in future for avoiding any punitive action under the law.

Umair Zahid, Assistant Director (SMD).

Salman Majeed Sheikh, Chief Executive Officer and Fazal Mahmood, Consultant for Respondent.

Syed Asad Haider, Joint Director.

2011 C L D 383

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD)

ZAHIDJEE TEXTILE MILLS LIMITED: In the matter of

No.EMD/233/209/2002/1710-1717, decided on 1st October, 2010.

Companies Ordinance (XLVII of 1984)---

----Ss. 492, 472 & 476--Making false statement--Imposition of penalty---Examination of annual audited accounts of the company for relevant year revealed that accounts of the company disclosed receivable against disposal of short term investment in the amount of Rs.34.264 million---Company attributed said receivable to the sale proceeds of ordinary shares received from company's authorized Broker---Information called from the Broker showed that the share sale proceeds were not remitted/settled by the broker directly to the company; rather were transferred from the company's trading account to the trading account maintained in the name of Executive of the company---Company was called upon for the supporting documents to verify its position with regard to the sale of shares and receipt of funds including the Bank Vouchers and broker ledger, but same were not provided by the company--company's plea for not recording the transaction due to delayed receipt of written confirmation was not valid since the company was regularly receiving the ledger/trading statement from the Broker where all the relevant share sales and purchases were indicated along with the receivable/payable balance from/to the Broker---Company's representative, during the hearing, after witnessing the evidence, admitted the default and requested for a lenient attitude---Section 492 of the Companies Ordinance, 1984 had been violated and Directors of the company were liable for the penalties as defined in said section--However, since substantial amounts of interest from loan had been provided by Directors to the company, penalty aggregating to Rs.17,50,000 on the Chief Executive and 7 Directors, was imposed, in circumstances.

Shahab-ud-Din, Company Secretary.

Atta Muhammad Khan, Legal Counsel.

2011 CLD 537

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD)

SHOW-CAUSE NOTICE ISSUE TO ELAHI COTTON MILLS LIMITED: In the matter of

Show Cause Notice No. EMD/TO/26/2009-2415-2418, decided on 15th December, 2010.

Listed Companies (Substantial Acquisition of Voting Shares and Takeover) Ordinance (CIII of 2002)---

----Ss. 4, 5, 25 & 26---Acquisition of substantial shares of company---Increase in shareholding crossing the threshold level of 25% holding of voting shares in the company--- Non-compliance of directions of the Commission--- Imposition of penalty--- Information provided by the acquirer and records available/ submitted with the Commission had shown that the acquirer had increased his shareholding from 8.92% to 28.54% thereby crossing the threshold level of 25% holding of voting shares in the company---Such action required the compliance of S.5 of Listed Companies (Substantial Acquisition of Voting Shares and Takeover) Ordinance, 2002, which included the disclosure to the target company; and to the stock exchange; as well as making of a public announcement of offer, but that had not been done in the case---Directions of the Commission as provided in S.25 of the Listed Companies (Substantial Acquisition of Voting Shares and Takeover) Ordinance, 2002, had not been complied with by the acquirer in violation of S.26 of the said Ordinance---Purpose of the Ordinance was to provide for a fair and equitable treatment to all the investors and to provide a transparent and efficient system for substantial acquisition of voting shares; and control of listed companies---In the present case acquirers had failed to comply with any of the provisions of the Ordinance---Ordinance had provided wide ranging powers to the Commission to issue directions and impose penalties on the acquirer who would fail to fulfil the provisions of the Ordinance, however, while deciding the case of violations it could not be ignored that since inception of the company, the effective control of the target company had always vested with acquirers and their sponsors---Taking a lenient view and keeping in view the circumstances of the case, fine was imposed on the acquirers under S.26(3) the Ordinance---Fine of rupees Rs.200,000 on one acquirer for violation of S.5 of the Ordinance and Rs.500,000 each on four acquirers for violation of S.6 of Takeover Ordinance, 2002.

Javed Panni, MJ Panni & Associates.

M. Ayub Qureshi, MJ Panni & associates.

2011 CLD 571

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

Messrs BAWANY AIR PRODUCTS LIMITED: In the matter of

Show Cause Notice dated July, 28th, 2010, decided on 29th December, 2010.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 15-A & 15-E(3)---Insider trading---Prohibition on Stock Exchange deals by insider---Imposition of penalty for insider trading-Respondent who was Chief Executive and Director of Public Limited Company 'A' which was listed on the Karachi Stock Exchange, was also the Chief Executive and Director of another company named 'B'---Respondent in his capacity as Chief Executive and Director of 'A', possessed price sensitive inside information about the improved financial performance of said company---Respondent being privy to the insider information was able to pass that information to other company `B', which purchased shares of 'A' Company, at lower market price and indulged in insider trading---Respondent being in his capacity as the Chief Executive and Director of both the companies had a fiduciary duty to the company 'A' and its shareholders, he was required to exercise care consistently to maximize the value to all of the shareholders of company "A", he should also discharge his responsibilities diligently without exception in any matter including his position as an insider, holding confidential _information regarding Company "A"---In exercise of powers under S.15-E(3) of Securities and Exchange Ordinance, 1969, Commission imposed on respondent a fine of Rs.1,000,000 for passing on/disclosing inside information regarding financial results of Company "A" to other company "B" with direction to the respondent to ensure that full compliance be made of all rules, regulations and directives of the company in future for avoiding any punitive action under the law.

Muhammad Sohail, Chief Financial Officer, Bawany Air Products Limited representing the Chief Executive Officer.

Syed Asad Haider, Joint Director.

Muhammad Atif Hameed, Deputy Director.

Adnan Ahmed, Deputy Director assisting the Director (SMD).

Date of hearing: 4th November, 2010.

2011 C L D 580

[Securities and Exchange Commission of Pakistan]

Before Ms. Nasreen Rashid, Executive Director (Insurance)

Messrs EAST WEST INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated 15th November, 2010, decided on 20th January, 2011.

(a) Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(F), 12, 59-A(1) & 156---Failure to meet criteria for sound and prudent management---Imposition of penalty---During the course of on-site Inspection of the Insurance Company it was noted that no policy, manual or standard operating procedure in the company to provide guidelines and framework for carrying out the operations of the company with efficiency and effectiveness existed---Company had not adopted a proper system of internal control, which could prevent or detect and correct error on timely basis---Software application/modules being used by the company were obsolete and lacked proper built-in controls---Scope given to the internal audit was very limited and did not cover the areas relating to the control issues---Weakness in internal control system in the inspection report had resulted in various irregularities and discrepancies---Default of Ss.11(1)(F) & 12 of Insurance Ordinance, 2000, in circumstances, was established---Penalty as provided under S.156 of Insurance Ordinance, 2000 could be imposed on the company which could be extended to one million rupees---However, instead of imposing the maximum penalty, fine of Rs.50,000 were imposed on the company due to the facts; that (a) investment losses were borne by the Directors to safeguard the interests of the stakeholders of the company; (b) company's management had taken proactive approach to rectify the shortfall in the payment of Federal Excise Duty; and (c) company had assured that the rectification of the error in the system was in the process---Company was issued a stern warning that in case of similar non-compliance in future, a strong action would be taken against the company.

(b) Insurance Ordinance (XXXIX of 2000)---

----S. 136---Insurance Company---Powers and duties of the Directors---Directors, in addition to day to day running of the company and the management of its business, also had some fiduciary duties i.e. duties held in trust and some wider duties imposed by statute; and breach of those statutory duties would usually be a criminal offence, punishable by fine or imprisonment---Directors, in circumstances were gauged against a higher standard of accountability which required them to be vigilant and perform their duties with due care.

Naved K. Yunus, Managing Director and Chief Executive.

Kazim Raza, Director (Operations).

2011 C L D 589

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

Messrs PATTOKI SUGAR MILLS LIMITED: In the matter of

Show Cause Notice dated August 10th, 2010, decided on 23rd December, 2010.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 15-A & 15-B---Unfair trading practices by insider--Imposition of penalty---On perusal of Karachi Stock Exchange trading data for relevant period, it was observed that the price of company's shares witnessed a sudden surge and increase from Rs.5.50 to Rs.16.44 with a very low volume---Since said trading in the scrip of the company was in apparent violation of S.15-A of Securities and Exchange Ordinance, 1969 show-cause notice was issued to the company to show as to why action could not be taken against it under S.15-B of the Ordinance---Representative of the company was unable to explain the rationale behind the transactions executed by the company in the light of the provisions of insider trading---Contention of the representative regarding lack of knowledge about the securities law, was unacceptable in view of established principle of law enshrined in the Latin maxim of "Ignorantia Juris Neminum Excusat" (Ignorance of law is no excuse)---Account Opening Form of the company with the Brokerage House indicated that company had been trading in the stock market since January, 2009, which had established that the company was not nave market player and was familiar with the legal regulatory framework---Even otherwise, director of the company being experienced business person, ought to possess basic knowledge of law relating to Insider Trading while investing in capital market---However, the assurance provided by representative on behalf the company was appreciated, but could not absolve the company of liability under law---It was established that the Director of the company being an insider trader on the basis of Insider Information available to him owing to his official capacity, had contravened with the provisions of S.15-A(2) of Securities and Exchange Ordinance, 1969---Said unfair trading practices, had damaged market integrity and efficiency---Insider Trading was a grave offence and could damage investor's confidence and lead to exit of stakeholders from the market resulting in adverse consequences for the capital market---Penalty of Rs.200,000 had been imposed on the company for contravention of the provisions of S.15 A(1) of Securities and Exchange Ordinance, 1969, with further direction to the company to ensure that full compliance be made of all rules, regulations and directives of the Commission in future for avoiding any punitive action under the law.

Akbar v. Muhammad Aslam 2005 YLR 221 rel.

Hammad Raza Zaidi, Consultant.

Syed Asad Haider, Joint Director.

Ms. Tayyaba Nisar, Assistant Director.

Umair Zahid, Assistant Director assisting the Director (SMD).

2011 C L D 599

[Securities and Exchange Commission of Pakistan]

Before Nazir Ahmad Shaheen, Executive Director, (Registration)

Messrs PAKISTAN SUGAR MILLS ASSOCIATION: In the matter of

Show Cause Notice No. CLD/RD/Co.476/56/2009/1956 dated 18 October, 2010, decided on 30th December, 2010.

Companies Ordinance (XLVII of 1984)---

----Ss. 173, 476 & 492---Passing of resolution without convening meeting and giving false statement---Imposition of penalty---Supreme Court vide its order directed the Securities and Exchange Commission to conduct an inquiry and submit report with regard to the Passing of so-called resolution approved by Central Executive Committee of the Pakistan Sugar Mills Association---Commission after conducting inquiry submitted the report wherein it was stated that no valid meeting of Central Executive Committee of the Association was held---Record and statements of members with regard to passing of alleged resolution reflected that neither formal notice was issued to the members for any such meeting to be held nor proper minutes were recorded and circulated to the members within the time stipulated under S.173(1) of the Companies Ordinance, 1984---No valid meeting was held and no valid resolution was passed-Resolution placed before the Supreme Court was false and fake, in circumstances---False resolution was presented before the Supreme Court by deliberately concealing the material facts about the lapses in calling and convening of meeting, which was material in nature; and could not be ignored which attracted penal provisions as contained in Ss.492 & 476 of Companies Ordinance, 1984---However, as no valid meeting was held, S.173 of Companies Ordinance, 1984, had become irrelevant---Acting Chairman of Pakistan Sugar Mills Association was imposed penalty of Rs.500,000 and penalty of Rs.100,000 was imposed on Secretary General of said association.

Athar Minallah along with Javed A. Kayani, Acting Chairman and Iskander Khan, Chairman of the Pakistan Sugar Mills Association.

2011 CLD 614

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD)

J.K. SPINNING MILLS LIMITED: In the matter of

Show Cause No. EMD/233/ 141 /2002/2227-2233 dated August 10, 2010, decided on 10th January, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 208, 473 & 476---Investment in associated company without approval and authority of the shareholders---Imposition of penalty---Company had been acting as a financer to associated company and the funds of the public listed company was advanced to associated company without the authority of the shareholders of the company---Outstanding amount due from associated company was not in the nature of normal trade credit as claimed by the company, but in fact it was financing arrangement to support the cash flow requirements of the associated company---Directors of the company utilized funds of the listed company to support the operation of their owned undertaking without approval of the shareholders---Mandatory requirement of S.208 of the Companies Ordinance, 1984 that the funds could only be invested in the associated/subsidiary company under the authorization of the shareholders---Directors of the company had violated the mandatory requirements of S.208 of the Companies Ordinance, 1984 and management had deprived the shareholders to exercise their legitimate right to make a decision to invest in its associate---Directors of the company owed fiduciary duties to the company they served and its shareholders; they must discharge their statutory obligations in good faith with fairness and honesty, but they had breached their said fiduciary duty by providing unnecessary benefits to its associated undertaking where they were major shareholders and thereby acting against the interest of its shareholders---Default was considered deliberate and wilful---Chief Executive and the Directors of the company had made themselves liable for fine as provided under subsection (3) of S.208 of the Companies Ordinance, 1984---However, considering that the remaining debt balance due from associated company, standing in the books of company, had been adjusted by way of subsequent purchases from associated company, instead of imposing maximum penalty of Rs.10,000,000, aggregate of fine Rs.700,000 on all the seven Directors, Rs.100,000 each.

2011 C L D 624

[Securities and Exchange Commission of Pakistan]

Before Abid Hussain, Director (Enforcement)

Messrs INDUS FRUIT PRODUCTS LIMITED: In the matter of

Show-cause Notice No. EMD/233/568/2002 dated November, 22, 2010, decided on 30th December, 2010.

Companies Ordinance (XLVII of 1984)---

----Ss. 158 & 476---Failure to hold Annual General Meeting---Imposition of penalty---Company which under S.158(1) of Companies Ordinance, 1984 was required to hold its Annual General Meeting within prescribed period, had failed to comply with said mandatory provision of law---Annual and interim accounts, which provided information to the investors about the affairs of the companies are laid in Annual General Meeting and such Meeting was a forum where the investors could freely discuss, speak and vote on important matters concerning approval of accounts, appointment of auditors, election of Directors etc.---Directors of the company were not observing said compulsory requirements of law and company had violated the provisions of S.158 of the Companies Ordinance, 1984---Penalty of Rs.500,000 on the company and all the Directors of the company, was imposed, in circumstances.

Nemo for Petitioner.

Nemo for Respondent.

2011 C L D 627

[Securities and Exchange Commission of Pakistan]

Before Ms. Nasreen Rashid, Executive Director (Insurance)

Messrs EAST WEST INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice dated November 15, 2010, decided on 20th January, 2011.

(a) Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(d), 41(1), 59-A(i) & 156---Reinsurance arrangement---Requirement to effect and maintain reinsurance arrangement---Default in complying with the requirements---Imposition of penalty---On inspection of the company conducted under the order of Executive Director of the Insurance Division, it was found that different Policies were issued on a single risk; the company had retained multiple retention of premium per risk instead of single retention, which was contrary to the terms and conditions of the treaty---Company was in violation of the terms and conditions of the treaty arrangement; and could carry a risk of premature cancellation of its reinsurance treaties---Default of S.41 read with S.11(1)(d) of Insurance Ordinance, 2000, stood established and the company had also accepted its default---Penalty as provided under S.156 of Insurance Ordinance, 2000, could be imposed on the company, in circumstances---However, in exercise of the power conferred on Commission under S.156 of Insurance Ordinance, 2000, instead of imposing the maximum penalty of one million rupees, Commission imposed a fine of Rs.500,000 due to the fact that the company had assured that the error in the system would be fixed without delay---Company was also issued a stern warning that in case of similar non-compliance in future a strong action would be taken against the company.

(b) Insurance Ordinance (XXXIX of 2000)---

----Ss. 59-A, 63(1) & 136---Duties of Directors---Directors, in addition to the day to day running of the company and the management of its business, also had some fiduciary' duties, i.e. duties held in trust and some duties imposed by statute---Breach of such statutory duties would usually be a criminal act punishable by fine or imprisonment---Directors were gauged against a higher standard of accountability which required them to be vigilant and perform their duties with due care.

Naved K. Yunus, Managing Director and Chief Executive.

Kazim Raza, Director (Operations).

2011 C L D 634

[Securities and Exchange Commission of Pakistan]

Before Nazir Ahmed Shaheen, Executive Director (Registration)

Messrs PAK PANTHER SPINNING MILLS LIMITED: In the matter of

Show Cause Notice dated 29th December, 2010, decided on 7th February, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 76, 77, 78 & 78-A---Request for transfer of shares---Refusal of such transfer---Appeal---Appellant who purchased shares sifter making payment against them in US Dollars, requested the Registrar to direct the company to transfer the shares in his name, but Share Registrar vide its letter refused the transfer of shares on behalf of the company without notifying any defect or invalidity---Taking into consideration Articles of Association of the company; scheme of law as enunciated in Ss.77 & 78 of the Companies Ordinance, 1984, it could be considered that the law did not give discretionary powers to the Directors to refuse any shares---Directors must have regard to any those considerations which the Articles of Association or provisions of law on their true construction permit them to consider---Any refusal based on extraneous or other consideration, was totally unjustified---Shareholders were free to transfer their shares subject to restrictions contained in Articles of Association---However, no such restrictions were provided in the Articles of Association--Articles of Association did not restrict transfer of shares by any of the shareholders to any person including the appellant, but it imposed bar on sale of assets of the company and the shares could not be termed as assets of the company---Representative of the respondent was advised to convey the observation of the Bank within a week's time, which he failed to do so---Appeal was accepted and appellant was advised to re-lodge transfer of shares and the Directors of the company was directed to register transfer of the shares within fifteen days thereof.

Rashid Sadiq, FCA for Appellant.

Zahid Latif GM (Finance) for Respondents.

2011 C L D 640

[Securities and Exchange Commission of Pakistan]

Before Tariq Soomro, Joint Director (SROD)

Messrs MUHAMMAD LATIF AND MUHAMMAD INAM: In the matter of

Show-Cause Notice No. SMD/SE/2(207)2009 dated 26-4-2010, decided on 5th January, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 2(cd), 3(1), 20 & 22---Involvement of partners of firm in listing/transacting standardized contract---Complaint against---Partners of registered firm having been found involved in listing/transacting standardized contract, a complaint was filed before Securities and Exchange Commission of Pakistan in that respect---Prima facie, it was established that illegal commodity futures trading in contravention of law was being conducted by partners of said firm--- Partners admitted in their earlier filed writ petition that firm was doing business in the market providing the facility of future trading to its customers---Firm was doing its business for almost last 4 years and had earned a very good reputation in the market---Commission issued a prohibitory order under S.20 of Securities and Exchange Ordinance, 1969 against the partners of the firm, directing them to refrain from dealing/trading; and all the ancillary transactions in commodity futures on behalf of general investors/ traders---Partners were called upon to clarify in writing within seven day as to why proceedings could not be initiated against them under S.22 of Securities and Exchange Ordinance, 1969 for violation of S.3(1) of the Ordinance---Partners were given a number of appointments to appear before the Commission, but they failed to do so---Firm and its partners having wilfully and blatantly violated provisions of S.3(1) of Securities and Exchange Ordinance, 1969, were liable to be penalized under S.22 of the Ordinance---In the interest of the capital markets and for the interest of common investors, the partners of the firm were directed to forthwith refrain and stop operating and carrying on any of the functions of illegal commodity exchange and penalty of Rs. five million, each was imposed on the partners. ?

Nemo for Appellant.

Taimur Saeed, Junior Executive (SROD) assisting the Joint Director (SROD).

2011 C L D 645

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood Commissioner (CLD)

Messrs INDUS FRUIT PRODUCTS LIMITED: In the matter of

Show-Cause Notice No. EMD/233/568/2002 dated August 11, 2010, decided on 30th December, 2010.

Companies Ordinance (XLVII of 1984)---

----Ss. 158, 170, 171 & 476---Failure of company to hold Annual General Meeting---Imposition of penalty--Company which was required to hold its Annual General Meeting for the relevant year within prescribed period, having failed to do that, Commission directed the company in terms of S.170 of Companies Ordinance, 1984 to convene the overdue Annual General Meeting, but the company had failed to comply with said direction---Annual General Meeting was a forum where the investors could freely discuss, speak and vote on important matters concerning approval of accounts, appointment of auditors, election of Directors, etc., but the Directors of the company did not observe such compulsory requirements of law---Default having been established, fine of Rs.10,000 was imposed on the Chief Executive of the company.

Nemo for Appellant.

Nemo for Respondent.

2011 C L D 872

[Securities and Exchange Commission of Pakistan]

Before Akif Saeed, Executive Director, (S.D.)

RECOVERY OF TENDERABLE GAIN: In the matter of

Show-Cause Notice No. S.M.(B.O)C.O.222/4(3947)95, decided on 18th March, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 224---Companies (General Provisions and Forms) Rules, 1985, R.16---Purchase and sale transactions, by Director of company---Failure to tender gain accrued by such transactions---Effect---Returns of beneficial ownership furnished by Director of the company had shown that Director made purchase and sale transactions within a period of less than six months and made gain of Rs.995,000---Computed in the manner prescribed in R.16 of the Companies (General Provisions and Forms) Rules, 1985---Matter of accrual of said gain neither was reported by the Director in Part-D of the prescribed returns of the beneficial ownership filed by him with the Commission of said transactions, nor its tendering or recovery was reported to the Commission as provided under S.224 of the Companies Ordinance, 1984---Contention of the Director that he was unaware of the provisions of S.224 of the Companies Ordinance, 1984, was repelled in view of the fact that said Director was on the Board of Directors of the company since 17-5-1994 and had been filing his returns of beneficial ownership under S.222 of the Companies Ordinance, 1984---Said Director was supposed to be acquainted with duties and liabilities of a Director of a listed company arising out of the provisions of S.224 of the Companies Ordinance, 1984---Even otherwise ignorance of the law was no excuse---Director requested for waiving the amount of tenderable gain which could not be considered as the Commission did not have power under Companies Ordinance, 1984 to waive off the amount of tenderable gain---Amount in question was required to be tendered as. per scheme provided in the law---Amount of gain had been calculated in the light of manner 'Lowest-in-Highest-out' prescribed in R.16 of Companies (General Provisions and Forms), Rules, 1985 and Commission did not have power to reduce the amount of gain by applying another method of calculation--Director was directed to tender Rs.995,000 to the Securities and Exchange Commission of Pakistan as provided in S.224(2) of Companies Ordinance, 1984.

Smolowe v. Delendo Corp. (1943, Circuit Court of Appeals, Second Circuit) ref.

Imran Inayat Butt, Director (SD), Muhammad Farooq, Joint Director (SD) and Nazim Ali, Assistant Director (SD) assisting the Executive Director (SD).

Respondent in person.

Date of hearing: 13th October, 2010.

2011 C L D 1043

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

Messrs ADAM SECURITIES (PVT.) LIMITED: In the matter of

Show-Cause Notice No. Wash/SMD-South/MSW/INV/ 126, decided on 15th April, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 5-A & 22---Buying and selling shares in violation of Rules and Regulations---Imposition of penalty---Director of the company repeatedly bought and sold shares in such a manner that orders for buy and sell matched with each other; and did not result in any change in ownership of shares---Such transactions fell within the meaning and ambit of the term 'Wash Trades'---Show­-cause notice was issued to the Director with a direction to submit a written reply which was submitted by the Director through his Advocate---Preliminary objection raised by Counsel of the Director regarding S.22 of the Securities and Exchange Ordinance, 1969 was not valid because said section was an enforcement clause of the Ordinance under which show-cause notice had to be issued for violation of any provision of said Ordinance and Rules---Director had placed the buy and sell orders at the same exchange in such a way that orders for buy and sell matched with each other and did not result in any change in beneficial ownership of the shares, which created false and misleading impression in the market---Violation of the Rules and Regulations, was a serious matter which could even lead to suspension or cancellation or registration of company of said Director as a broker by the Commission---In view of the fact that said type of non-compliance on part of the Director of the company had been observed for the first time, taking a lenient view in the matter, a penalty of Rs.50,000 had been imposed, with strong advice to the Director of the company to take immediate measures and put in place proper checks in Management System to restrict such orders, which could amount to Wash Trades' and to ensure that full compliance be made of all Rules, Regulations and objectives of the Commission in the future for avoiding any serious punitive action under the law.

Abdul Majeed Adam, Chief Executive Officer, Noman, Director and Haider Waheed, Legal counsel representing Adam Securities (Pvt.) Limited. Adnan Ahmed, Deputy Director and Kapeel Dev, Assistant Director assisting the Director (SMD).

Date of hearing: 5th November, 2010.

2011 C L D 1073

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner, (CLD)

SALMAN ALI HUSSAIN---Appellant

Versus

DIRECTOR (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 5 of 2010, decided on 1st June, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 224---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Involvement of officer of the company in `insider trading'---Imposition of penalty---Appellant who was employed with the company as Fund Manager, was also acting as Manager, Equity Trading Department; and member of the Investment Committee of the company---Appellant was also involved in decision making with respect to day, to day investments of the funds of the company---On perusal of the trading data of Stock Exchange for the period under review, it transpired that the appellant traded in his personal capacity through another company and his trading concentrated in the same shares in which the funds had traded---Appellant traded in a manner, whereby, the appellant bought shares at a lower rate prior to initiation of buying activity of the funds and sold his shares once the price appreciated resulting from the purchases made by the funds---Authority passed impugned order and imposed a penalty of Rs.357,592 being an amount equivalent to the gain made based on inside information and further directed the appellant to surrender said amount being the amount of profit realized by the appellant---Appellant failed to abide by the policy of the company for trading of shares in personal capacity; he failed to obtain prior permission of the company before trading in the securities and was required to trade through company, whereas he traded through other company, which was again a clear violation of the policies---Appellant having been established to be involved in "insider trading", question as to whether or not the appellant was front running, did not arise---Impugned order of imposition of penalty and surrender of amount of profit realized by appellant was not interfered with in circumstances.

Iqbal L. Bawaney, Salman I. Bawaney and Muhammad Tahir Qureshi for Appellant.

Imran Inayat Butt, Director (SMD) for Respondent.

Dates of hearings: 7th July, 2010 and 28th April, 2011.

2011 CLD 1085

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

GHULAM MUHAMMAD, CHIEF EXECUTIVE OFFICER AND DIRECTOR OF EXCEL INSURANCE COMPANY LIMITED: In the matter of

Show-Cause Notice No. 1(6) PIL/MSW/SMD/2011/03, decided on 19th May, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 15-A & 15-E---Purchase and sale of shares by Director in his personal account illegally---Director of public unlisted company and also a Chief Executive Officer, started purchasing the shares of other companies in his personal account---Director was established to have indulged in Insider Trading' by purchasing shares of other companies in violation of S.15-A of Securities and Exchange Ordinance, 1969 on the basis of insider information relating to investment; and subsequently selling the shares at the substantial profit---Written reply submitted by the Director to show-cause notice issued to him being unsatisfactory, Commission taking a lenient view in the light of the agreement shown by the Director to repay the total amount of profit earned by him from such transactions, in exercise of powers under S.15-E of Securities and Exchange Ordinance, 1969, directed him to pay fine of Rs.800,000 for contravention of subsection (1) of S.15A of the Ordinance, and to pay a sum of Rs.7,897,525 to the company under S.15-E(2)(ii) of said Ordinance.

Ijaz Ahmed and Habib Ahmed, Legal counsel representing Ghulam Muhammad.

Syed Asad Haider, Joint Director and Umair Zahid, Assistant Director assisting the Director (SMD).

Date of hearing: 21st April, 2011.

2011 CLD 1111

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SM)

PEARL CAPITAL MANAGEMENT (PVT.) LIMITED: In the matter of

Show-Cause Notice No. 1(07) BS/KSE/MSW/SMD/2009/decided on 26th May, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---Regulations for the short selling under Ready Market, 2002, Cls. 2(a), 5(b) & 8(i)--Selling shares without having pre-existing interest, in violation of Regulations---Imposition of penalty---Company was registered with the Commission under Brokers and Agents Registration Rules, 2001 and on perusal of the trading data, it was found that company had been engaged in selling and then squaring up the positions in different scrips---In absence of any evidence and justification regarding the execution of sales in its proprietary accounts as well as in its clients, show-cause notice was issued to the company under S.22 of Securities and Exchange Ordinance, 1969 stating that company had prima facie contravened clauses A(2) & A(5) of the Code of Conduct set forth under the third Schedule of Brokers Rules---Company was established to have sold shares without having pre-existing interest and without following the pre-requisites of the Regulations for the Short-Selling under Ready Market---Such sale was prohibited in the said Regulations---By indulging into such Blank Sales, company had failed to exercise due care, skill and diligence in conduct of its business; and also had failed to abide by the provisions of Rules and Regulations issued by the Commission and Stock Exchange from time to time---Company, in circumstances had violated the Code of Conduct set forth under Third Schedule of the Brokers and Agents Registration Rules, 1969 and also had violated Regln.4 of the Regulations for this short selling under Ready Market which in turn was violation of R.12 of the Brokers and Agents Rules, 2001 read with R.8 of the said Rules---Violation of said Rules and Regulations was a serious matter which would entitle the Commission to suspend the company's membership, but Commission in exercise of the powers under S.22 of Securities and Exchange Ordinance, 1969 imposed on the company a penalty of Rs.100,000 (Rupees one hundred thousand only).

Muhammad Jawad, Head of Settlement and Tauseef M. Iqbal, IT Consultant representing the Pearl Capital Management (Pvt.) Limited.

Ms. Shazia Baig, Deputy Director assisting the Director (SMD).

Date of hearing: 12th April, 2011.

2011 CLD 1141

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

HASHMI CAN COMPANY LIMITED---Appellant

Versus

DIRECTOR (ENFORCEMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 39 of 2005, decided on 26th May, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 227 & 472---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to deposit payable amount of provident fund-Amount payable by the appellant company against provident fund, having not been paid by the company, Commission initiated proceedings against the company---Commission besides imposing penalties, directed appellant to pay the outstanding liability along with the mark up---Appellant was also directed under S.227(3) of the Companies Ordinance, 1984 to pay monthly contribution to the Provident Fund within the prescribed time---Application was moved by the appellant in the court for sale of 5 acre of land in order to settle the liabilities of the provident fund---Court allowed the sale of said land under the supervision of Official Assignee vide impugned order and the appellant had requested the court to set aside the impugned order---Appellant having not been able to pay off the liabilities toward the provident fund despite the directions of the Commission, the best course for recovery of the fund was by way of sale .of said property by the Official Assignee in terms of order of the court.

Hamid Idrees for Appellant.

Bilal Rasul, Additional Registrar/Director (Enforcement) for Respondents.

Dates of hearing: 28th and 29th April, 2011.

2011 CLD 1149

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

YOUNUS DAWOOD (CHIEF EXECUTIVE) and 6 others---Appellants

Versus

DIRECTOR (ENFORCEMENT) /ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 37 of 2011, decided on 26th May, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. ----Ss. 208, 476 & 160(I)(b)---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---S.R.O. 865(I)/2000 dated 6-12-2000---Investment in associated companies and undertakings without prior permission of shareholders of both the companies and Commission---Directors of the company, in circumstances, had failed to comply with the substantial requirement of S.208 of the Companies Ordinance, 1984 and S.R.O. 865(I)/2000 dated 6-12-2000---Authorities dissatisfied with response of appellants to show-cause notice, rightly proceeded against the appellants and imposed a fine of Rs.70,000 on appellants for the contravention of S. 208(3) read with S.476 of Companies Ordinance, 1984---Impugned order could not be interfered with, in circumstances.

Messrs Gharibwal Cement Limited and others v. Executive Director (Enforcement and Monitoring), Securities and Exchange Commission of Pakistan 2003 CLD 131 ref.

K.D. Rajani for Appellants.

Bilal Rasul, Additional Registrar/Director (Enforcement) for Respondent.

Date of hearing: 28th April, 2011.

2011 C L D 1163

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SM)

INTERMARKET SECURITIES LIMITED: In the matter of

Show-Cause Notice No. 1(07) BS/KSE/MSW/SMD/2009, decided on 6th May, 2011.

Brokers and Agents Registration Rules, 2001---

----Rr. 8, 12 & Third Schedule---Code of Conduct of Brokers Rules, 2001, Cls. A-2 & A-5---Purchase and sale of shares without having pre-existing interest in the shares---Imposition of penalty---Company which was a member of Stock Exchange and was registered with the Commission under Brokers and Agents Registration Rules, 2001, first sold shares of corporation; and subsequently squared its position by purchasing the shares---Show-cause notice was issued to the company, but the company neither acknowledged the receipt of said show-cause notice nor submitted its written reply to the Commission---Subsequently, Chief Financial Officer and Company Secretary attended the hearing and submitted that 'Blank Sale' transaction as highlighted by the Commission were un-intentional trades on their part---Company was established to have placed the sale orders in its proprietary accounts without having pre-existing interest and without fulfilling the prerequisites of the Regulations---Company by executing such transactions had violated Regulations, which in turn was violation of Code of Conduct set forth under the Third Schedule of the Brokers and Agents Registration Rules, 2001, that made it mandatory on the company to execute its business with due care and skill---Company had violated clauses A.2 and A.5 of the Code of Conduct of Brokers Rules, 2001, which in turn was a violation of said Rules---Conduct of the company during the course of subject proceedings, was irresponsible and casual---Violation of the Rules and Regulations was a serious matter which entitled the Commission to suspend the company's membership, but taking lenient view, Commission in exercise of its power under R.8(b) of the Brokers and Agents Registration Rules, 2001, imposed on company a penalty of Rs.100,000 with direction to the company to ensure that full compliance be made of all Rules, Regulations and directives of the Commission in the future for avoiding any punitive action under the law.

Yasin Chaudhary, CFO and Company Secretary representing the Inter-market Securities Limited.

Ms. Shazia Baig, Deputy Director assisting the Director (SMD).

Date of hearing: 12th April, 2011.

2011 CLD 1174

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

Syed MAJEEDULLAH I-IUSSAINI, CEO and 4 others---Appellants

Versus

DIRECTOR (NBFCD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 19 of 2010, decided on 1st June, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 224---Modarba Companies and Modarba (Floating and Control) Ordinance (XXXI of 1980), Ss.11 & 32---Modarba Companies and Modarba Rules, 1981, R.10---Prudential Regulations for Modarba, Regln.7(3)---Investment made by Directors of the company in associated companies---Imposition of penalty---On the examination of annual audited account of the relevant year of the company, it was observed that the company had violated provisions of Rules and Regulations---Registrar issued show-cause notice to appellants under S.32 of Modarba Companies and Modarba (Floating and Control) Ordinance, 1980, for failure to comply with the provisions of R.10 of Modarba Rules, Regln.7(3) of Prudential Regulations for Modarba---Penalty of Rs.5000 was imposed on each appellant for violation of R.10 of the Modarba Rules; and imposed penalty of Rs.50,000 on each appellant for violation of Regln.7(3) of Prudential Regulations for Modarba---Objection of appellants' counsel that the Prudential Regulations for Modarba was not published in the official Gazzete, did not have any basis as the Prudential Regulations were additional conditions for authorization to float a Modarba in S.11 of Modarba Ordinance, 1980 and were not required to be published in the official Gazzete---Conditions were introduced by the Commission through Circular dated 20-4-2000 and were widely disseminated to the Modarba Companies---In the present case, the investments were made by appellants in the associated companies and the t1i,poltants could not be allowed to take a plea that a decision of such nature was done carelessly, thoughtlessly, heedlessly or inadvertently---Registrar (Modarba) on taking cognizance of the offence, withdrew the facilities of the company---Taking a lenient view, penalty was set aside to the extent of Directors, excluding the Chief Executive Officer, who was directed to pay the penalty as per impugned order.

PLD 2005 Lah. 261; PLD 2004 SC 261; 2008 SCMR 1717: PLD 2010 Kar. 236; 1984 CLC 2456: 2002 CLC 1925 .and PLD 1984 Kar. 315 ref.

Ms. Faiqa Naz, Abdul Baqi Lone and Jam Asif Mehmood for Appellants.

Hasnat Ahmed, Registrar (Modaraba) for Respondent.

Date of hearing: 29th April. 2011.

2011 CLD 1181

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

SHOW CAUSE NOTICE

NO. S.M.(B.O.)C.O.222/1(150)11: In the matter of

Show Cause Notice No. S.M(B.O) C.O.222/1(150) 11, decided on 30th June, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 222(2)(b) & 224(4)---Failure to file return of beneficial ownership on prescribed form, within the stipulated time period---Bank which was holding more than ten per cent equity securities of issuer Company, was required under provisions of S.222(2)(b) of the Companies Ordinance, 1984 to- file its return of beneficial ownership on prescribed form, within the stipulated time period of 30 days, but it had filed the same with delay of 272 days---Default of late filing of return in question was admitted on part of the bank, but it was contended that said default was not committed wilfully and knowingly and assured for timely filing of the return in future; and requested to condone the default in question---Record had shown that bank had not made any purchase/sale transaction in the market and had filed said return promptly on receipt of letter from the Securities and Exchange Commission of Pakistan---Late filing of the return of beneficial ownership being not wilful, lenient view of the matter had been taken; and bank was strictly warned to ensure timely compliance of S.222 of the Companies Ordinance, 1984 in future.

Muhammad Ali, Assistant Vice President and Head Shares Department The Bank of Khyber and Zahid Sahibzada, Assistant Vice President and Company Secretary The Bank of Khyber representing the Respondent.

Nazim Ali, Assistant Director (SMD) assisting the Director (SMD).

Date of hearing: 6th June, 2011.

2011 CLD 1192

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mahmood, Commissioner (CLD)

KHUSHI MUHAMMAD, CHIEF EXECUTIVE OFFICER OF ADAM JEE PLASTIC INDUSTRIES (PVT.) LIMITED---Appellant

Versus

JOINT REGISTRAR OF COMPANIES (CRO, FAISALABAD)---Respondent

Appeal No. 52 of 2011, decided on 14th July, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 37 & 38---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Rectification of name of company---Petition was filed for cancellation of the certificate of incorporation of the company, alleging that the complainant group was well known industrial group established in 1960 which adopted the trademark 'Adamjee" and since then it had extensively and continuously been used for all its services and products in Pakistan---Joint Registrar of Companies after hearing the parties, found that the company had contravened S.37 of the Companies Ordinance, 1984; and directed the company to change its name within 30 days of the date of the direction---Company had preferred appeal against impugned order---Section 38 of the Companies Ordinance had empowered the Registrar Companies for issuance of direction within three years of incorporation of a company registered through inadvertence or otherwise with the name which was in contravention of S.37 of Companies Ordinance, 1984---Direction to change the company's name, having been given by' the Registrar within prescribed period of three years, impugned order could not be interfered with.

Babu Muhammad Aslam v. Mst. Rehana Parveen PLD 1989 Pesh. 185 rel.

Muhammad Anwar Bhatti, Kashif Dildar Bhatti, Tanveer Hussain and Mian Zafar Iqbal for Appellant.

Hashim Raza, Raza and Associates for the Complainant.

Muhammad Siddiqui, Registrar of Companies for Respondent.

Date of hearing: 19th May, 2011.

2011 CLD 1211

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mahmood, Commissioner (CLD)

AZGARD NINE LIMITED---Appellant

Versus

DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---2espondent

Appeal No. 8 of 2009, decided on 14th July, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 75---Securities and Exchange Commission of Pakistan Act (XLII of 1987), S.33---Central Depository Act (XIX of 1997), S.11---Issuance of duplicate certificates of shares---Complaint was filed against company for non-­conversion/non-transfer of shares in name of the complainant---Complainant lodged original shares for conversion and transfer in his name with the company along with original purchase invoice duly authenticated by the Stock Exchange and duly verified transfer deeds---Company refused such transfer stating :that duplicate shares had already been issued to a woman---Original shares, transfer deeds and invoice, were not returned by the company to the complainant---Show-cause notice was issued to the company---Director (Enforcement) being dissatisfied with response of the company, passed order directing the company to resolve the complainant's grievance by transferring the shares and make good the loss of the complainant---Complainant's claim that he held the original shares and transfer deed, had not been refuted by the company---In presence of original shares and transfer deeds in favour of the complainant, alleged woman could not have got the shares transferred in her name from the company---Woman had claimed that she had lost the shares and the transfer deeds while shifting from her house---Complainant should have initiated action against the woman in the court of competent jurisdiction in terms of S.11 of Central Depositary Act, 1997---Company was directed to provide the original share certificates and transfer deeds to the complainant to enable him to proceed before the right forum and assist the competent court in ascertaining the facts of the case and to help to resolve the grievance of the complainant.

Wasif Majeed for Appellant.

Nazar Hussain for the Complainant.

Ali Azeem Ikram, Director (Enforcement) and Tariq Ahmed, Deputy Director for Respondent.

Date of hearing: 1st July, 2011.

2011 C L D 1228

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

FAROOQ HASSAN, EXECUTIVE DIRECTOR (MANAGEMENT ASSOCIATION OF PAKISTAN) and another---Appellants

Versus

DIRECTOR (CL) ---Respondent

Appeals Nos. 20 and 23 of 2010, decided on 26th May, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 42, 476 & 506(2)---Companies (General Provisions and Forms) Rules, 1985, Rr.6 & 35---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Registration of association as a company with limited liability---Prohibition of payment of remuneration for services to its members---Complaint was received regarding affairs of Management Association of Pakistan to the effect that Association had been paying remuneration and financial benefit to Executive Director of the Association, who was one of the directors/ members; that Executive Director had been a nominated member of National Development Finance Corporation; and by virtue of that membership had held various important positions in the Association---Appellants' counsel had admitted that the membership fee of Executive Director was paid by the Association and no refund had been made---Name of Executive Director did not appear as an individual member in the minutes---No evidence had come to light regarding the consideration, approval or rejection of membership of Executive Director by the Committee---In terms of Art.4 of the Articles of Association of the Association, Executive Director could only become an individual member after the application was submitted and subsequently the member was either elected or rejected by the Committee---Case, in circumstances, was remanded to the department, with direction to obtain the complete record of the Register of Members and minutes of meeting of Committee to establish whether or not Executive Director was admitted as an individual member of the Association and to ascertain whether or not the procedure laid down under Art.4 of Articles of Association of the Association had been followed in letter and spirit.

Badaruddin F. Vellani, Ferzeen E. Bhadha and Masood Hashmi for Appellants.

Sidney Pereira, Joint Registrar, CRO (Incharge) for Respondent.

Date of hearing: 29th April, 2011.

2011 CLD 1249

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

VAZIR ALI F. MUHAMMAD, CHIEF EXECUTIVE (FORMER) and 6 others---Appellants

Versus

DIRECTOR (ENFORCEMENT)/ADDITIONAL REGISTRAR OF COMPANIES---Respondent

Appeal No. 35 of 2010, decided on 26th May, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 3(a) & 237---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure of the company to prepare and attach to its financial statements the consolidated financial statements of the group---Imposition of penalty---Company was holding more than 50% of voting shares' in nine companies---Company, which was a holding company, by virtue of holding such voting securities and power to elect and appoint more than 50% of its Directors as specified in S.3(a) of Companies Ordinance in violation of S.237 of the Ordinance, had failed to prepare and attach to its financial statements the consolidated financial statements of the group---Company, being holding company was to submit the consolidated financial statements in accordance with Fourth Schedule of the Companies Ordinance, 1984 and International Accounting Standard---Failure on the part of the company, could not be termed as bona fide as the law had imposed a duty on every officer of the company to comply with its requirements---Chief Executive and Directors of the company had a fiduciary relationship with the company---Fiduciary was required to have greater knowledge and expertise about the matters being handled---If the requirements of law on a particular matter were clear it was unacceptable for the fiduciary to claim that he was unaware of the requirements---Appellants by not complying with the requirements of S.237 of the Companies Ordinance, 1984, were in violation of the law and their inaction would be termed as recklessly careless---Penalties were rightly imposed on the appellants---Impugned order could not be interfered with, in circumstances.

Shaikh Jalaluddin F.C.A. v. Commissioner (Enforcement and Monitoring) SEC 2005 CLD 333 ref.

Furkan Ali for Appellants.

Bilal Rasul, Additional Registrar/Director (Enforcement) for Respondent.

Date of hearing: 28th April, 2011.

2011 CLD 1268

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

Agha FAQUIR MUHAMMAD---Appellant

Versus

REGISTRAR OF COMPANIES and 2 others---Respondents

Appeal No. 6 of 2011, decided on 26th May, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 37 & 42---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Refusal to register company with the name 'Pakistan Community Services Association"---Appeal against---Appellant being a proposed sponsor of the company to be licensed under S.42 of the Companies Ordinance, 1984, filed application for availability of name Pakistan Community Services Association"---Said application was objected to and rejected by Junior Executive by impugned order on the ground that word "Association" was not appropriate for registration of the proposed company; as it could be opted by trade bodies only---Appellant was informed that proposed name was not available under S.37 of the Companies Ordinance, 1984 as same was "deceptive"---Appellant had filed appeal against impugned order, contending to be registered under the names similar to the proposed name, such as "Executive Development Association", "Baloch Welfare Association of Pakistan" etc.---Apart from that Page 6 of 'Availability of Name Guide" published by the Commission had provided that word "Association" could be included in the name of companies to be established on grant of licence by the Commission under S.42 of Companies Ordinance, 1984 or which were established as a trade organization under Trade Organization Ordinance, 2007---Impugned order was set aside and allowed the proposed name 'Pakistan Community Services Association" to the appellant, in circumstances.

Aga Zaheer for Appellant.

Sidney Pereira, Joint Registrar (In charge CRO, Karachi) for Respondents.

Date of hearing: 29th April, 2011.

2011 C L D 1402

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

EAST WEST INSURANCE COMPANY LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR (INSURANCE), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 41 of 2011, decided on 17th June, 2011.

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

----Ss. 20(4)(r) & 33---Insurance Ordinance (XXXIX of 2000), Ss.2(xxvii), (ii), 11(1)(d), 41 59-A & 156---Issuance of different policies on a single risk---Imposition of penalty---Different policies were issued by the insurance company on a single risk---Company had retained multiple retentions of premium per risk instead of single retention which was contrary to the terms and conditions of its reinsurance treaty---Company carried a risk of premature cancellation of its reinsurance treaty---Executive Director (Insurance) of the Commission, being dissatisfied with the response of the company to show-cause notice, vide impugned order imposed a penalty of Rs.500,000 on the company---Securities and Exchange Commission of Pakistan had been given powers under S.20(4)(r) of Securities and Exchange Commission of Pakistan Act, 1997, to regulate the contract of insurance including reinsurance---Commission had been entrusted with powers to oversee reinsurance arrangements outlined in S.41 of Insurance Ordinance, 2000; firstly, the reinsurance treaties were to be submitted to the Commission by any insurer in terms of S.41(2) of Insurance Ordinance, 2000; secondly, the insurer concerned would submit to the Commission particulars of alteration in the treaty, or new treaty entered into in terms of S.41(3) of Insurance Ordinance, 2000---Finally the Commission could direct the insurer to make modification in its reinsurance arrangements in terms of S. 41(4) of Insurance Ordinance, 2000---Section 41(1) of Insurance Ordinance, 2000, had given the prerogative to the Directors of a company to decide as to whether or not the reinsurance arrangements were adequate in order to ensure continuing compliance by the insurer with the provisions of Insurance Ordinance, 2000 relating to solvency---No violation of S.41 of Insurance Ordinance, 2000 having taken place in the case, but the compliance of reinsurance treaty could not be left at the sole discretion of the Directors of the company---When the Directors would transgress their powers, Commission which had been entrusted with the powers to oversee the contract of insurance, Commission could take action against the Directors of the company to ensure the interest of the policy holder---Company had contravened its reinsurance treaty as it was not complying with the definition of "risk" given in the reinsurance treaty ; and as a result was retaining multiple retention of premium per risk instead of single retention---Company, in circumstances was directed to comply with the requirements of the reinsurance treaty in letter and spirit---Impugned order was set aside to the extent of the penalty as violation of S.41 of Insurance Ordinance, 2000 could not be established.

Rizwan Ali Dodani, Kazim Raza and Imran Ali Dodani for Appellant.

Tariq Hussain, Director, Muhammad Kashif Siddiqui, Joint Director, Ameer Hassan, Deputy Director and Sharick Ather Rehman, Junior Executive Department Representatives.

Date of hearing: 29th April, 2011.

2011 C L D 1425

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

TAHIR HASSAN, CHIEF EXECUTIVE OFFICER and another---Appellants

Versus

EXECUTIVE DIRECTOR (E & M), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 20 of 2003, decided on 17th June, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 245 & 196---Securities and Exchange Commission of Pakistan (Appellate Bench Procedure) Rules, 2003, R.3---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Failure to prepare and transmit half yearly accounts---Imposition of fine---Company under provisions of S.245(1)(b) of the Companies Ordinance, 1984, was required to prepare and transmit half yearly accounts to its members within specified period had failed to do so; respondent/Executive Director (E & M) of the Commission after issuing show-cause notice to the Directors of the company and the company, imposed fine of Rs.50,000 each on the Chief Executive and the Directors of the company---Show-cause notice was issued to the Directors and the company and not to the Chief Executive of the company, but penalty was imposed on Chief Executive---Chief Executive, could not have been proceeded against, in circumstances---Sections 245 and 196 of Companies Ordinance, 1984, did not differentiate between Executive Directors and Non-Executive Directors and held all the Directors responsible for violation of S.245 of the Companies Ordinance, 1984---Argument of the counsel for the company that since the Director of the company who had not attended Board of Directors' meeting, he would not be held responsible for violation of S.245 of the Companies Ordinance, 1984 was repelled---Fine was rightly imposed on the said Director---Impugned order, however was set aside to the extent of Chief Executive Officer, in circumstances.

PLD 1969 SC 167, 1990 SCMR 164 and 1983 SCMR 1239 rel.

Tariq Khokhar and Aslam Arain for Appellants.

Nasir Askar, Director and Saima Ahrar, Deputy Director Department Representatives.

Date of hearing: 19th May, 2011.

2011 C L D 1457

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

ZAFAR MOTI CAPITAL SECURITIES (PVT.) LIMITED---Appellant

Versus

DIRECTOR (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 64 of 2009, decided on 17th June, 2011.

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

----Ss. 33 & 43(b)---Securities and Exchange Ordinance (XVII of 1969), S.22---Brokers and Agents Registration Rules, 2001, Third Sched., Cls.A(2) & A(5)---Making short sale and purchase of shares by company through its clients---Trading data, showed that two clients of the company, who had no pre-existing interest in the shares, sold and purchased shares---Company had placed short sales on its client behalf without fulfilling prerequisites of the Regulations for such transaction---Company, prima facie, had contravened clauses A(2) & A(5) of the Code of Conduct under Third Schedule of Brokers and Agents Registration Rules, 2001, and penalty of Rs.400,000 was imposed upon the company---Claim of the company was that shares were owned by a person, who gifted the shares to said two clients---Validity---Central Depository Company Account Balance Report of said person and the authority letter, had clearly shown that shares were not transferred in favour of said clients of the company---Main ingredients of gift in shape of transfer of entitlement or possession was missing---Authority letters, could not be treated as a valid gift---Contention of the company that S.22 of Securities and Exchange Ordinance, 1969 whereunder penalty was imposed upon the company, could not be invoked as provisions of Brokers and Agents Registration Rules, 2001, were self-contained and penal provisions had already been provided, was misconceived as Rules were secondary or subordinate legislation made under S.43(b) of Securities and Exchange Commission of Pakistan Act, 1997---Director of Securities and Exchange Commission of Pakistan in circumstances, had rightly imposed penalty under S.22 of Securities and Exchange Ordinance, 1969---No reason being available to interfere with impugned order, appeal filed by the company, was dismissed, in circumstances.

Haji Muhammad Ibrahim and others v. Muhammad Usman Ghani Qureshi and others 2007 MLD 837; Reham Ali and another v. Abdul and 3 others 1980 CLC 1110 SC (AJ&K); Rana Khalid Mehmood v. The State 2007 YLR 1088; Mir Jan v. The State 2003 PCr.LJ 1903 and Muhammad Ashraf v. The State 2003 MLD 165 ref.

Nauman Qaiser for Appellant.

Syed Asad Haider, Joint Director and Muhammad Ali, Deputy Director for Respondent.

Date of hearing: 19th May, 2011.

2011 C L D 1479

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

MUHAMMAD HANIF Y. BAWANY, CHIEF EXECUTIVE OF BAWANY AIR PRODUCTS LIMITED---Appellant

Versus

DIRECTOR (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 8 of 2011, decided on 12th August, 2011.

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

----S. 33---Securities and Exchange Ordinance (XVII of 1969), Ss.15-A, 15-B, 15-C & 15-E---Insider Trading---Chief Executive Officer of the company, who had attended meeting of the Board of Directors of the company, in which half yearly accounts for the period ended on 30-12-2009 were approved, was 'insider' in the terms of S.15-C(1) of Securities and Exchange Ordinance, 1969---Half yearly accounts were "Price Sensitive Information' as those exhibited positive financial outlook---Information, in circumstances, was 'inside information' in terms of S.15-B(1)(a) of Securities and Exchange Ordinance, 1969---Chief Executive Officer of the company, traded in the shares of the company just before the conclusion of the Board of Directors' meeting---Chief Executive Officer, being an 'insider' traded in the shares of the company, while in possession of 'inside information' and indulged in 'Insider Trading' in terms of S.15-A(2)(a) of Securities and Exchange Ordinance, 1969---Requirement of making gain or avoiding a loss, was not an ingredient of "Insider Trading"---Fact that Chief Executive Officer of the company indulged in 'Insider Trading' was sufficient to invoke the penal provisions of S.15(E) of the Securities and Exchange Ordinance, 1969---Chief Executive Officer as an 'insider', passed/disclosed 'Insider information' regarding financial results of the company, while the information was not made public--- Penalty under S.15-E(3) of Securities and Exchange Ordinance, 1969, was rightly imposed on Chief Executive Officer of the company.

Securities and Exchange Commission v. Milken, 1990 WL 455346, Fed. Sec. L. Rep. and U.S. v. Rajaratnam, 1:09-cr-01184, U.S. District Court, Southern District of New York (Manhattan) rel.

Iqbal and Sohail Razzak for Appellant.

Imran Inayat Butt, Director for Respondent.

Muhammad Ali, Deputy Director and Kapeel Dev. Assistant Director Department Representatives.

Date of hearing: 28th April, 2011.

2011 C L D 1504

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director (SMD)

JAWAD AHMED, TREASURY MANAGER, TREET CORPORATION LIMITED: In the matter of

Show-Cause Notice No. MSW/SMD-SOUTH/2011/150 of 2011, decided on 16th June, 2011.

Securities and Exchange Ordinance (XVII of 1968)---

----Ss. 15-A, 15-B, 15-C & 15-E---Insider trading by virtue of the material "inside information" relating to shares of the company---Board of Trustees of the Company's Funds, delegated certain powers to an Investment Advisory Committee---Said Committee delegated the powers to make investment regarding investment in listed equities to the Treasury Manager of the company; and authorized him to issue instructions to the Stock Brokers---Treasury Manager was primarily responsible for taking all the investments decisions of the Funds---After share price was increased significantly, Treasury Manager, while using his position as trustee, sold his almost entire holding to the Fund and realized gain and it was prima facie established that he was involved in "Insider trading" by virtue of the material 'inside information' relating to the shares of the company---Prima facie it was established that father of the Treasury Manager also traded in the shares of the company based on information of declaration of interim cash dividend---Treasury Manager after having purchased shares of the company, then sold those to Funds, thereby realizing personal gains in a short period of time---Claim of Treasury Manager with respect to bona fide investment decision was not true; he fell within the scope and meaning of 'insider' and information possessed only by him to invest in the shares of the company was 'inside information'--- Fine of Rs. 200,000 was imposed on the Manager for contravention of subsection (1) of S.5-A of Securities and Exchange Ordinance, 1969.

Salam Zaheer Khan and Hasan Nizami (Legal Counsel) representing Mr. Jawad Ahmed the Respondent.

Syed Asad Haider, Joint Director, Adnan Ahmed, Deputy Director and Umair Zahid, Assistant Director assisting the Director (SMD).

Date of hearing: 16th May, 2011.

2011 C L D 1536

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mahmood, Commissioner (CLD)

FAROOQ IBRAHIM, CHIEF EXECUTIVE OFFICER and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR (CLD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 24 of 2006, decided on 12th August, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 245---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Submission of quarterly account with a delay of 22 days---Representative of the company contended that delay in filing account was not intentional, but was due to uncertain conditions that had prevailed in Karachi after the Bomb blast on 30-5-2005---Plea of the representative of the company was not justified as the law and order situation in Karachi after the Bomb blast had prevailed for 2 or 3 days only, whereas the accounts were filed after a delay of 22 days---Company's compliance record had not been exemplary as on previous occasions, company had delayed holding of Annual General Meetings; had delayed submission of quarterly and half yearly account, which had shown that company had no regard to the provisions of the Companies Ordinance, 1984---Commission had already taken a lenient view by imposing penalty of Rs. 30,000 on Chief Executive Officer and Rs.20,000 on each of the Directors of the company---Directors/ appellants of the company would pay the penalty from their personal resources and not from the coffers of the company.

Farhan Siddiqui for Appellants.

Date of hearing: 4th July, 2011.

2011 C L D 1546

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

MUHAMMAD ASHRAF KHAN, CHIEF EXECUTIVE, KASHMIR POLYTEX LTD. and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR (CLD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 25 of 2006, decided on 17th June, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 245 & 453---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S.31(2)(a), Third Sched., Paras 16, 17, 49 & 52---Failure to prepare and transmit quarterly account---Imposition of penalties---Jurisdiction of Securities and Exchange Commission of Pakistan---Appellant company, which was required to prepare and transmit its quarterly account under S.245 of the Companies Ordinance, 1984, to its shareholders, Stock Exchanges, Registrar and Securities and Exchange Commission of Pakistan, though submitted such accounts with the Registrar, Company Registration Office and Stock Exchanges, but failed to submit the same to Securities and Exchange Commission of Pakistan within the stipulated time---Executive Director (CLD) imposed penalties on Chief Executive Officer and other Directors of the company---Contention of counsel for company was that company being incorporated in Azad Jammu and Kashmir, Securities and Exchange Commission of Pakistan, lacked jurisdiction over the company---Validity---Section 31(2)(a) of Azad Jammu and Kashmir Interim Constitution Act, 1974 had mandated that AJK Council would have exclusive power to make laws with respect to any matter in the Council Legislative List set out in the Third Schedule of the Azad Jammu and Kashmir Interim Constitution Act, 1974---Under Paras 16, 17, 49 & 52 in the Schedule of said Act, exclusive power to legislate regulation of companies incorporated with AJK, solely lay with AJK Council; and Securities and Exchange Commission of Pakistan Act, 1997 having not been adopted by AJK Council, Securities and Exchange Commission of Pakistan lacked jurisdiction to impose fines and penalties on the company or any of its directors, incorporated in Azad Jammu and Kashmir---Azad Jammu and Kashmir did not constitute a part of Islamic Republic of Pakistan and was a foreign country under the Constitution and companies of AJK were treated as foreign companies---No case was made out for violation of S.245 of the Companies Ordinance, 1984---Impugned order was set aside, in circumstances.

PLD 1985 SC (AJ&K) 62 rel.

Samay Sham, Jamil and Jamil and Ms. Fozia Omar for Appellants.

Bilal Rasul, Additional Registrar/Director (Enforcement), Departmental Representative.

Date of hearing: 28th April, 2011.

2011 C L D 1560

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

ADAM SECURITIES (PVT.) LIMITED---Appellant

Versus

DIRECTOR (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 56 of 2011, decided on 12th August, 2011.

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

----S. 33---Securities and Exchange Ordinance (XVII of 1969), Ss.5-A & 22---Brokers and Agents Registration Rules, 2001, R.12 & Third Sched.---Wash Trades---Imposition of penalty---Appeal---Trading data of Karachi Automated Trading System (KATS) of Karachi Stock Exchange and Unified Trading System (UTS) of Lahore Stock Exchange, showed that appellant/company repeatedly bought and sold shares in such a manner that orders for buying and selling matched each other; and did not result in any change in the beneficial ownership of shares--- Said transactions, in circumstances, fell within the meaning and ambit of the term "wash trades"---Show-cause notice was issued to the appellant company under S.22 of Securities and Exchange Ordinance, 1969 for contravention of the Code of Conduct prescribed in the Third Schedule of Brokers and Agents Registration Rules, 2001---Reply submitted by the appellant company to the show-cause notice being unsatisfactory, a penalty of Rs.50,000 was imposed on the appellant company---Execution of 'wash trades', even due to arbitrage business was not acceptable as it was the violation of the regulatory framework---Appellant company had no justification to carry out 'wash trades' on the pretext of arbitrage business---Unfair trade practices like 'wash trades' were harmful for the development of market---Execution of such trades had shown that appellant had failed to exercise due care, skill and diligence in conduct of the business---Securities and Exchange Commission was bound to protect the interest of investors and in doing so it was empowered to deal with elements which would affect smooth and fair functioning of the Stock Exchange---Appellant company by creating false transactions induced other investors into buying the shares and had indirectly caused loss to many investors---Commission could have suspended the licence of the appellant company as broker, but as it was the first time that such non-compliance was observed, commission took lenient view and rightly imposed a penalty of Rs.50,000---Appellant was directed to ensure compliance of all the rules, regulations and directives of the Commission in future for avoiding any serious punitive action under the law.

1990 PLC 373; 2002 CLC 1925 and 1984 CLC 2456 ref.

Haider Waheed, Basil Nabi Malik, Ms. Rubab Dhanji, M.Farhan Rafiq, C.E.O. and Adnan Abdul Majeed for Appellant.

Imran Inayat Butt, Director for Respondent.

Muhammad Ali, Deputy Director and Kapeel Dev, Assistant Director as Departmental Representatives.

Date of hearing: 4th July, 2011.

2011 C L D 1619

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Tahir Mehmood, Commissioner (CLD)

MRA SECURITIES (PVT.) LIMITED---Appellant

Versus

DIRECTOR (SMD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 22 of 2010, decided on 12th August, 2011.

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

----Ss. 33 & 43(b)---Securities and Exchange Ordinance (XVII of 1969), Ss.5-A & 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---Short selling under Ready Market Regulations, 2002, Reglns. 2(i) & 2(J)---Sale and purchase of shares without any pre-existing interest in the shares---Imposition of penalty---Appellant company in its proprietary account sold and purchased shares and said trade was executed by the company without having any pre-existing interest in the shares, which was 'short sale'---'Short sale' as per Regln. 2(J) of the Short Selling Under Ready Market Regulations, 2002, was a sale by a member or a client, who at the time of sale did not have a pre-existing interest in the securities---Short sale was permissible, as long as the member or a client had a contractual borrowing arrangement to ensure that the delivery requirements were met on the settlement dates---Company, in the present case, had not entered into a borrowing arrangement to ensure that the delivery requirements would be met---Penalty of Rs.2.5 million had been imposed on the company as company despite issuance of order under S.22 of the Securities and Exchange Ordinance, 1969 and several warnings thereafter had failed to comply with the requirements of law---Contention that S.22 of the Securities and Exchange Ordinance, 1969 could not be invoked as provisions of Brokers and Agents Registration Rules, 2001 were self-contained and penal provisions had already been provided therein, was misconceived---Said Rules were secondary or subordinate legislation made under S.43(b) of Securities and Exchange Commission of Pakistan Act, 1997, read with S.5-A of Securities and Exchange Ordinance, 1969---Rules were made to implement the requirements of the Ordinance (1969) which would prevail---Penalty, in circumstances was rightly imposed on the appellant company under S.22 of Securities and Exchange Ordinance, 1969.

1984 CLC 2456 rel.

Barrister Atif Rafiq and Farhan Rafiq, CEO for Appellant.

Imran Inayat Butt, Director (SMD), Muhammad Ali, Deputy Director and Kapeel Dev, Assistant Director for Respondent.

Date of hearing: 4th July, 2011.

2011 C L D 1633

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director HOD (MSCI)

SHOW CAUSE NOTICE ISSUED TO MUHAMMAD ATIF MALIK: In the matter of

Show Cause Notice No. 1(7)IT/MSW/SMD/2011/01 dated 8th June, 2011, decided on 11th August, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 15-E(3)---Insider trading---Company was a corporate member of Stock Exchange and respondent used to work with the company in the capacity as Vice President and Head of International Sales---Respondent, as a part of his employment was responsible for handling matters relating to foreign clients of the company including execution of their trading orders---Mother and sister of the respondent traded extensively in shares of a number of companies; their trading pattern and its significant synchronization with trading of foreign clients of the company, along with the observation of strong relationship of the respondent, prima facie, had established that respondent, being an insider by virtue of his position as Vice President and Head of International Sales of the company, had passed on/disclosed the inside information relating to large trading orders received from foreign clients, to his mother and sister; based on which his mother and sister indulged in inside trading and earned significant amounts of profit---Respondent was established to be an insider by virtue of his position and employment in the company, where he received material non-public information relating to large trading orders of foreign clients and he provided information relating to large trading orders of foreign clients to his mother and sister---Respondent, being among the highest level officials of the company, was entrusted with confidential information pertaining to foreign clients including their trading orders; he was expected to maintain a high degree of conduct and ensure his vigilance and awareness of the laws and rules in general; and particularly the laws established for the oversight of his areas of responsibility---Respondent had responsibility to ensure that his actions were in the best interest of the clients of the company---Respondent, however had now assured that he would be vigilant in all professional matters in future; and would not be involved in any kind of violation of law and had prayed that lenient view could be taken in the matter---In view of apologetic submission of the respondent of his offence, Commission in exercise of powers under S.15-E(3) of Securities and Exchange Ordinance, 1969, took lenient view and imposed fine of Rs. 500,000 for offence of disclosing material inside information relating to large trading orders of foreign clients to his mother and sister.

Muhammad Atif Malik, Former VP and Head of International Sales, JS Global Capital Limited.

Umair Zahid, Assistant Director assisting the Director (MSCID).

Date of hearing: 23rd June, 2011.

2011 C L D 1647

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director

Messrs TRG PAKISTAN LIMITED: In the matter of

Show Cause Notice No. SCD-SD(Enf)/TRG/2011/136, dated 2nd May, 2011, decided on 10th August, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 158, 233, 282-J, M & 476---Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003, R.7(1)(db)---Failure to hold Annual General Meeting and to submit Annual account and balance-sheet---Company had failed to hold Annual General Meeting for relevant year, even within extended time; and Directors of the company had also failed to lay before the company in Annual General Meeting a balance-sheet and profit and loss account for relevant year, within stipulated period---Reasons put forth by the authorized representative of the company, did not carry merit and did not justify the default---Directors of the company were responsible to hold timely Annual General Meeting for providing timely information to its shareholders in order to enable them to consider and approve the significant matters like approval of accounts, appointment of auditors, election of Directors, performance of the company and other important issues relating to the company---Past record of the company revealed that the management of the company had committed such defaults in the past as well---Directors of the company had admitted their failure to fulfil the responsibility entrusted to them in the Companies Ordinance, 1984 with respect to presenting the financial statements of the company and holding Annual General Meeting for the approval of financial statements within the stipulated period---Since the company and its Directors had been penalized on similar non-compliance in the past, company and its Directors needed to take all the steps necessary to eliminate inefficiencies in the system that prevented the company from presenting the financial statements and holding Annual General Meetings on time---Explanations with regard to company's failure to furnish copy of its Annual report and other financial statements of the company to the Commission within the prescribed time as required under R.7(1)(db) of Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003, did not prove that failure or contravention or default took place or was committed without the Directors' knowledge---Commission, in exercise of powers conferred in terms of S.158(4), read with S.476 of the Companies Ordinance, 1984, imposed penalty of Rs.50,000 on the Chief Executive and every Director of the company, and in exercise of the powers under S.282-J of the Companies Ordinance, 1984, imposed fine of Rs.100,000 on the company Chief Executive and every Director for contravention of R.7(1)(db) of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003.

Muhammadullah Khan Khaishgi (Director) on behalf of Chief Executive Officer and all Directors of TRG Pakistan Limited.

Date of hearing: 7th July, 2011.

2011 C L D 1783

[Securities and Exchange Commission of Pakistan]

Before Nazir Ahmed Shaheen, Executive Director (Registration)

Messrs AL-HAMRA HILLS (PRIVATE) LIMITED: In the matter of

Show Cause Notice No. CLD/RD/Co.84(5) of 2010, decided on 11th August, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 82, 84, 86, 196, 476 & 492---Sanction of the Securities and Exchange Commission for issuance of shares at a discount---False statement---Application filed by the company seeking sanction of the Commission for issuance of shares at discount, was accorded by the Commission in terms of S.84 of Companies Ordinance, 1984, subject to compliance of the requirements of S.86 of the Ordinance---Extension in the period for issuance of shares at discount, as sought by the company, was also allowed---Directors of the company, prima facie, did not follow the prudent commercial practices---Board of Directors of the company, was legally bound to discuss the agenda of the meeting, specifically payment and arrangements with reference to underwriting commission with judiciousness, keeping in view the spirit of S.82 of the Companies Ordinance, 1984, while exercising their powers under provisions of S.196 of the Companies Ordinance, 1984--- Underwriting arrangements, could only be made in case of public subscription; and if the public would fail to subscribe, the underwriter would take up shares and get his commission according to contractual obligation---Underwriter was paid commission for the risk he was exposed to in the placing of shares before the public---In case of a private company, limited numbers of private shareholders were involved, and no justification was known and could easily be ascertainable at any time before subscription day---No risk, in circumstances, could be visualized for which underwriting arrangements were made and amount of underwriting commission was paid---Company should have disclosed such arrangements of underwriting commission---Non-disclosure and omission of said arrangements in original application made by company spoke of concealment of the fact, which attracted the provisions of S.492 of the Companies Ordinance, 1984---Whole exercise by the company, had revealed that it had omitted material fact about underwriting commission and concealed it from the regulator while obtaining approval for issuance of shares at discount; and in circumstances violated the provisions of Ss.196 & 492 of the Companies Ordinance, 1984---Penalties, in exercise of powers under Ss.196, 492 & 476 of the Ordinance were imposed on the defaulting directors accordingly.

(b) Words and phrases---

----"Underwrite" and "Underwriter" defined and explained.

Ibrar Ahmed for Respondents.

Nemo for Qazi Munir-ul-Haq, Director for Respondent No.7.

Waqas Ahmed, Director for Respondent No.9 in person, along with Waseem Majid Malik, Head Legal Affairs, Innovative Investment Bank Ltd.

Dates of hearing: 20th April, 13th May, 27th May, 22nd June and 8th July of 2011.

2011 CLD 860

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar and Amir Hani Muslim, JJ

STATE LIFE INSURANCE CORPORATION OF PAKISTAN and another---Petitioners

Versus

JAVAID IQBAL---Respondent

Civil Petition No. 2519 of 2010, decided on 14th February, 2011.

(Against the judgment dated 16-9-2010 passed by Lahore High Court, Lahore in R.F.A. No. 447 of 2008).

(a) Insurance Ordinance (XXXIX of 2000)---

----S. 118---Civil Procedure Code (V of 1908), O. VII, R. 14, O. XIII, Rr. 1, 3 & 4---Life insurance policy and liquidated damages, amount of---Suit for recovery of such amount by husband/nominee of deceased insured---Plea of Insurance Company that insurance contract founded upon rule of Uberrima Fides (i.e. utmost good faith) stood vitiated as deceased had breached such rule by concealing her serious illness at the time of obtaining and subsequently getting revived insurance policy---Application by company to produce additional evidence by examining doctor as witness, who had issued certificate showing that deceased was indisposed for last six years before her death---Validity---List of witnesses filed by company did not find mention name of such witness----Company had neither filed such certificate along with written statement nor relied thereupon---Such additional evidence could not be allowed without establishing a sufficient cause for non-filing and non-relying upon such certificate---Such certificate not produced and proved in evidence but only "marked" could not be considered by courts as a legal evidence of a fact---Only witness examined by company had not made testimony about illness of deceased and its concealment---Company after death of insured was obliged to pay amount covered by such policy---Company had withheld such amount without any reasonable cause and excuse---Suit was decreed in circumstances.

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

----O.X II, Rr. 3 & 4---Document not produced and proved in evidence but only marked could not be considered by courts as a legal evidence of a fact.

Saria Ullah Zahid, Advocate Supreme Court for Petitioners, Nemo for Respondent.

2011 C L D 883

[Supreme Court of Pakistan]

Present Justice Jawwad S. Khawaja and Khilji Arif Hussain, JJ

Ms. KAUSER PERVEEN and another---Petitioners

Versus

KASB BANK LIMITED, LAHORE and others---Respondents

Civil Petitions Nos. 1171-L and 1172-L of 2009, decided on 20th April, 2010.

(On appeal from the judgment dated 25-5-2009 of the Lahore High Court, Lahore passed in EFA No. 91 of 2009).

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

----Ss. 9 & 19---Constitution of Pakistan, Art.185(3)---Suit for recovery of loan---Execution of decree---Auction of mortgaged property---Petitioners neither were defendants in the suit filed by the Bank nor they were mortgagers, but were owners of the property which was sold in execution of decree obtained by Bank against judgment­ debtors---One of the petitioners deposited amount in court to defray the costs of auction and to cover the amount at which the mortgaged property was auctioned---Auction of property in question, otherwise was vitiated because the auction-purchaser had failed to make payment of balance amount within stipulated period---Leave to appeal was granted to consider said aspects of the case---Since a short question was involved, the office was directed to fix the appeals for hearing.

Sajid Mehmood Sheikh, Advocate Supreme Court for Petitioners (in both cases).

Nemo for Respondents.

2011 C L D 907

[Supreme Court of Pakistan)

Present: Mian Shakirullah Jan and Mian Saqib Nisar, JJ

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Commissioner---Appellant

Versus

FIRST CAPITAL SECURITIES CORPORATION LIMITED and another---Respondents

Civil Appeal No. 946 of 2005, decided on 2nd May, 2011.

(On appeal from the judgment dated 2-6-2005 passed by Lahore High Court, Lahore in Commercial Appeal No. 12 of 2004).

Companies Ordinance (XLVII of 1984)---

----S. 224---Trading by directors, officers and principal shareholders---Interpretation, object and scope of application of S.224, Companies Ordinance, 1984---To adopt a literal interpretation of S.224 would render the section unconstitutional, and in order to protect the section and bring the same within the framework of constitutionally prescribed parameters, the interpretation of words should be determined in terms of legislative intent---Word 'vest' occurring in S.224 of the Companies Ordinance, 1984---Meaning---Word 'vest' per se does not confer an absolute title on Securities and Exchange Commission of Pakistan---Gains will remain under all circumstances the property of the company and Securities and Exchange Commission of Pakistan has no right or entitlement thereto---Principles.

Section 224, Companies Ordinance, 1984 applies to certain specified categories of persons, namely, a director, chief executive, managing agent, chief accountant, secretary or auditor of a listed company or a person who, is directly or indirectly, the beneficial owner of not less than 10% of the shares of a listed company. The section is triggered off by the sale or purchase of any shares of the company in question within a period of less than 6 months by a designated person (the "shareholder"), and, in the event of such a sale or purchase taking place, the shareholder is obligated to tender the amount of gain, if any, made by him to the company under intimation to the Registrar and the Securities and Exchange Commission of Pakistan. In the event of a failure to discharge the aforementioned legal obligation taking place, or, even if tie company in question fails to recover the amount of the gain within the specified periods, the gain is to vest in the SECP and the failure to deposit such gain with it may lead to action for recovery as arrears of land revenue. The Explanation to the section extends the beneficial ownership of shares to the shareholder, or his spouse or any of his dependent lineal ascendants or descendants of any partnership firm or private company in which he has an interest. A proviso to subsection (1) excludes the application thereof only in relation to securities acquired in good faith in satisfaction of a debt previously contacted.

The contention of SECP, in the present case, was that it acquires an absolute right and title to the gain. In the facts of the case admittedly a substantial gain accrued and was initially not tendered or paid to the company prior to the cut off date. After SECP, by means of its letter accused the beneficial owner of a violation of the law the amount was belatedly deposited not with SECP, but with the company, with the total delay being of the order of 20 months. The contention of SECP was that the amount in question had accrued to it and the company was not entitled to retain the same. Prime reliance was placed on the meaning of the word "vest" which was construed by it to mean that the title in the said amount had vested absolutely in SECP.

The word "vest" is variable in meaning and its interpretation is contextually dependent.

Held, SECP's contention that the use of the word vest per se conferred an. absolute title on it is erroneous. The question will have to be answered with reference to the context in which the word is used in the section. Any word, in isolation, has a wide range of disparate meanings. It is the combination of words reflected by the syntax of a sentence that confers logical coherence and meaning to it.

The section unfortunately reflects a poor quality of legislative drafting. For example, the list of persons hit by it includes the managing agent of a company. Now the concept of a managing agent, as is well known, was contained in the Companies Act, 1913. It was defined in section 2(9) as meaning a person, firm or company entitled to the management of the whole affairs of a company by virtue of an agreement with the company. Thereafter by means of the Companies (Managing Agency and Election of Directors) Order, 1972 (PO No.2 of 1972) the concept of managing agency was repealed. It is, therefore, somewhat surprising to note that the legislature as late as the year 1984 is proceeding on the assumption that the managing agency system still exists and hence the language of section 224.

Apart from the above error, there is a more substantial question which arises in relation to the interpretation of section 224. What was the objective underlying this section? No direct answer to this is provided by the language used in it. It merely states that in the event of a person falling within any of the categories mentioned therein making a profit in relation to a sale and purchase within a period of less than 6 months failing to tender the said profit within the prescribed time limit to the said company, or the company failing to recover it from the said person, the quantum of the gain is to vest in the SECP. But why? What is the justification for such a provision? What objective, rooted or based in public policy, is sought to be achieved thereby?

Although no direct answer is contained in this section, an answer can reasonably be inferred. It is clear that this section proceeds on the tacit assumption that the person in question was privy to inside information and, taking advantage of the .same, obtained a gain to which accordingly he was morally not entitled and thus was required it to surrender it to the company. In other words, there is a presumption, which is tacit, to the effect that the person has done something which is unjust or inequitable, or in violation of his duties and obligations to the company as a person falling within any one of the prohibited categories, and thus should be compelled to surrender his gains to the company. Obviously, it would have been better if this presumption had been made explicit and not tacit but, accepting that the presumed legislative intent was the above, court can proceed further with the analysis.

To adopt a literal interpretation of section 224 would also be liable to render it unconstitutional, and in order to protect the section and bring it within the framework of constitutionally prescribed parameters, the interpretation of the words should be determined in terms of the legislative intent.

Insofar as tie question that there may have been collusion or fraud between the company and the shareholder who purchased or sold its shares within the prohibited time frame is concerned, the section itself provides a mechanism for punishing the guilty person. This is contained in subsection (4) thereof which provides that whoever has knowingly or wilfully contravened any of the provisions of the said section (or the associated sections 222 and 223) is liable to a fine which may extend to Rs.30,000 and in the case of a continuing contravention to a further fine for every day for which the contravention, non-compliance or default continues. This is more than ample in order to punish any person who may have been guilty. The gains will remain under all circumstances the property of the company and SECP has no right or entitlement thereto. This is in line with the general principle that the State can only require the property of its citizens by following a constitutionally mandated procedure. The State has no inherent power to confiscate property - if it does so it must pay compensation. It is only entitled to acquire property by way of taxation because the Constitution expressly permits this. No law can be passed authorizing the police to take over the ownership of stolen property which it has recovered merely because the owner has acted in an improper manner. The thief can be punished by the imposition of a fine or otherwise but the ownership of the stolen property will always be that of the rightful owner.

Since the penal provision is stringent 'in nature it should be applied in an appropriate manner. In applying such a provision. SECP should always bear in mind the importance of determining not merely a technical contravention but a substantial finding of guilt in relation to the person on whom the fine or penalty is being levied. It is not sufficient either in the case of this law, or any other law, merely on the basis of a technical contravention to arbitrarily impose a fine of either the full amount or 50% or 75% or any other arbitrarily chosen figure. A condign punishment is the requirement of law and equity.

1987 SCMR 1197; New Oxford Dictionary (1998 Edition), page 2056 and KP Varghese v. Income Tax Officer (1981) 131 ITR 597 ref.

Aftab Ahmed Khan, Advocate Supreme Court for Appellant.

Imtiaz Rashid Siddiqui, Advocate Supreme Court for Respondents.

Date of hearing: 29th April, 2010.

2011 C L D 1190

[Supreme Court of Pakistan]

Present: Muhammad Sair Ali and Khilji Arif Hussain, JJ

Mehr NOOR MUHAMMAD---Petitioner

Versus

NAZIR AHMED---Respondent

Civil Petition No. 417-L of 2008, decided on 16th June, 2011.

(Against judgment dated 31-3-2008 of Lahore High Court, Bahawalpur Bench, Bahawalpur, passed in RFA No. 10 of 1997).

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr. 2 & 3---Stamp Act (II of 1899), S. 2(5)---Negotiable Instruments Act (XXVI of 1881), S. 4---Qanun­e-Shahadat (10 of 1984), Arts. 17(a) & 79---Constitution of Pakistan, Art. 185(3)---Suit for recovery of amount on basis of promissory note---Non-cancellation of stamp on promissory note and non-production of marginal witnesses by plaintiff to prove its execution---Validity---Supreme Court granted leave to appeal to consider questions as to whether short cause suit could not be treated as long cause suit in consequence of purported non-cancellation of stamps on promissory note; what was the legal effect of partial non-cancellation of stamps on promissory note; whether plaintiff under Arts. 17 & 79 of Qanun-e-Shahadat, 1984, was obliged to produce both marginal witnesses despite deposition of scribe to the effect that promissory note and receipt were written by him and were signed by defendant in his presence; and whether promissory note did require production of two marginal witnesses after promulgation of Qanun-e-Shahadat, 1984 or whether attestation of two witnesses on promissory note would under law change its nature.

Mian Javed Jalal, Advocate Supreme Court for Petitioner.

Nemo for Respondent.

Date of hearing: 16th & June, 2011.

2011 C L D 1517

[Supreme Court of Pakistan]

Present: Tassaduq Hussain Jillani, Tariq Parvez and Amir Hani Muslim, JJ

Mst. NADIA MALIK---Appellant

Versus

Messrs MAKKI CHEMICAL INDUSTRIES PVT. LTD. through Chief Executive and others---Respondents

Civil Appeal No. 1733 of 2002, decided on 2nd June, 2011.

(On appeal from judgment dated 4-11-2002 of the Lahore High Court, Lahore, passed in E.F.A. No. 690 of 2002).

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

----S. 19(2)---Execution of decree, modes for---Scope---Word "or" used twice in S. 19(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 would be read disjunctively classifying three different modes for execution of decree---­Banking Court could execute decree by applying provisions of C.P.C., or in a manner provided under any other law for the time being in force or at request of decree holder, which must be in writing.

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

----O. XXI, Rr. 84, 85 & 86---Non-deposit of 3/4 of auction money by purchaser within 15 days provided under proclamation--- Application by purchaser seeking extension of time for such deposit after expiry of stipulated period of 15 days---Acceptance of such application by Executing Court---­Validity---Language of O.XXI, Rr. 84 & 85, C.P.C., was mandatory in nature---Language used in proclamation requiring deposit of 3/4 purchase money within 15 days of sale was borrowed from mandatory provisions of O. XXI, R. 85, C.P.C.---Such failure for being violative of mandatory conditions provided under proclamation had rendered sale/auction proceedings as nullity---Executing Court in case of such failure could forfeit deposited amount and order resale of property, resultantly defaulting purchaser would forfeit all claims to property---Violation of such condition would not empower Executing Court to extend unilaterally time for deposit of such money---Executing Court had wrongly entertained such belated application and that too without notice---Principles.

Afzal Maqsood Butt v. Banking Court No. 2, Lahore and others PLD 2005 SC 470 and Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mahmad and others AIR 1954 SC 349 rel.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr.54(2), 67, 84 & 85---Execution of decree---Sale of mortgaged property, confirmation of---Objection petition by judgment debtor that no auction was held and entire auction proceedings were fictitious and fraudulent; that proclamation issued neither mentioned venue of auction nor was affixed at notice board of court; and that minutes of auction proceedings and attendance sheet of parties and participants in auction were not placed on record---Purchaser's plea that judgment debtor had not deposited 20% amount along with such application---Validity---Auction proceedings could not be held to be transparent in absence of fixation of proclamation on notice board of court---Non-mentioning of venue of auction in proclamation was violative of provisions of O.XXI, Rr. 54(2) & 67, C.P.C.---According to report of Court Auctioneer, auction proceedings were concluded at 5-10 p.m., when purchaser deposited 1/4th purchase money through pay order, when by that time Banks were closed---Record showed that auction proceedings were not conducted transparently and were fake---Sale in favour of auction purchaser was violative of provisions of O. XXI, R. 85, C.P.C., and nullity and could be challenged by interested person even though same having been confirmed by Executing Court---Non-deposit of 20% amount by objector could be condoned in exceptional circumstances when auction was violative of O. XXI, Rr.54(2), 67, 85 & 86, C.P.C., and sale was confirmed erroneously by Executing Court---Such sale was set aside in circumstances---Principles.

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

----O. XXI, R. 85---Sale/auction of property in violation of provisions of O. XXI, R. 85, C.P.C.---Validity---Such sale/auction would be nullity and could be, challenged by interested party even though same having been confirmed by Executing Court.

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

----O. XXI, R. 90---Provisions of O. XXI, R. 90, C.P.C., would be read with exception---Any law without exception would be a bad law.

(f) Administration of justice---

----Any law without exception would be a bad law.

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

----O. XXI, Rr. 54(2) & 67---Proclamation of sale neither affixed on notice board of Court nor venue of sale/auction mentioned therein--- Validity--- Such sale/auction for being violative of provisions of O. XXI, Rr. 54(2) & 67, C.P.C., could not be held to be transparent.

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

----O. XXI, Rr. 54(2), 67, 85, 86 & 90---Sale/auction being violative of provisions of O. XXI, Rr. 54(2), 67, 85 & 86, C.P.C.---Condition of deposit of 20% of sale amount by a party objecting to such sale---Validity---Object of deposit of such amount under O. XXI, R. 90, C.P.C., being to ensure making of objections by bona fide persons and prevent misusing of such rule to frustrate sale---Such condition could be condoned in exceptional circumstances, when sale/auction was violative of mandatory provisions of O. XXI, Rr. 54(2), 57, 85 & 86, C.P.C.

Pakistan Industrial Credit and Investment Corporation Ltd. Peshawar Cantt. v. Government of Pakistan through Collector Customs, Customs House, Jamrod Road 2002 CLD 1; Muhammad Ikhlaq Memon v. Zakaria Ghani and others v. Banking Court No. 2, Lahore and others PLD 2005 SC 819; Al-Hassan Feeds and others v. UBL Jinnah Road Abbottabad 2004 CLD 275; Messrs Tawakkal Export Corporation v. Messrs Muslim Commercial Bank Ltd. and others 1998 MLD 866; Messrs International Laboratories Ltd. v. Employees Union and another PLD 1982 SC 46; Mst. Murad Begum v. Muhammad Rafiq PLD 1974 SC 322; Madan Gopal and others v. Maram Bepari and others PLD 1969 SC 617 and 2010 SCMR 827 distinguished.

Amir Alam Khan, Senior Advocate Supreme Court for Appellant.

Gul Zarin Kyanai, Senior Advocate Supreme Court for Respondents Nos. 1 to 4.

Nemo for Respondents Nos. 5 to 6.

Sajid Mehmood Sh., Advocate Supreme Court and Altaf Elahi Sheikh, Advocate Supreme Court for Respondent No. 7.

Date of hearing: 2nd June, 2011.

2011 C L D 1569

[Supreme Court of Pakistan]

Present: Sarmad Jalal Osmany and Amir Hani Muslim JJ

Messrs SILK BANK LIMITED---Petitioner

Versus

Qazi EHTISHAMUL HAQ and others---Respondents

Civil Petition No. 484-K of 2010, decided on 23rd February, 2011.

(On appeal from the judgment dated 22-5-2010 of the High Court of Sindh at Karachi passed in First Appeal No. 42 of 2009).

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

----S. 12(2)--- Judgment, setting aside of--- Principle---Judgment and decree of a court can only be assailed before that court, when aggrieved party seeks to have it set aside on the ground that either the party was not served or that the same was obtained through misrepresentation, fraud etc.

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

----S. 12(2)---Judgment, setting aside of---Forum---First appeal was allowed by High Court and judgment and decree passed by Banking Court was varied by enhancing the claim of bank along with cost of funds by way of sale of mortgaged properties of defendants---On application under S. 12(2), C.P.C., filed by defendants, Banking Court set aside the judgment passed by High Court in favour of bank---Validity---Judgment and decree passed by High Court attained finality and that of Banking Court merged therein, therefore, proper forum for assailing such decree was High Court and not Banking Court---Judgment and decree passed by High Court in exercise of appellate jurisdiction was set aside and if defendant would file application under S.12(2), C.P.C. the same was to be decided by High Court---Appeal was allowed accordingly.

Nafis Ahmed Siddiqui, Advocate Supreme Court and K.A. Wahab, Advocate-on-Record for Petitioner.

Khalique Ahmad, Advocate Supreme Court and A.S.K. Ghori, Advocate-on-Record for Respondent No. 2.

Nemo for Respondents Nos. 1 and 3.

Date of hearing: 23rd February, 2011.

2011 C L D 1806

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali and Sarmad Jalal Osmany, JJ

Mst. RUBINA BADAR (DECEASED) through L.R.---Petitioner

Versus

Messrs LONG LIFE BUILDERS and 4 others---Respondents

Civil Petition No. 614-K of 2011, decided on 29th September, 2011.

(On appeal against the judgment dated 6-12-2010 passed by High Court of Sindh, Karachi in S.A. No. 12 of 2011)

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

----S.45---Dissolution of firm---Liability of partners to third party---Scope---True import of S.45 of Partnership Act 1932, is the continuing liability of partners for acts done by partners after dissolution of the firm, unless public notice is given thereof---As such the same is in order to protect third party who deals with partners of the firm after dissolution without such notice and in good faith.

Muhammad Jameel and Co. v. A.M. Wazir Ali (Proprietor of Sind Oil Mills) PLD 1959 (W.P.) Kar. 472 and Ejaz Ali Siddique and another v. Rana Irshad Ahmed and others 1998 CLC 1684 rel.

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

----S. 41, proviso---Specific Relief Act (I of 1877), Ss. 12, 27(b), 42 & 54---Constitution of Pakistan, Art. 185(3)---Suit for specific performance, declaration and injunction--- Bona fide purchaser for valuable consideration---Ostensible owner, principle of---Plaintiff claimed ownership of the suit property on the basis of sale agreement, duly acknowledged receipt of sale consideration, public notice in newspaper physical possession, payment of property tax and utility bills etc.---Defendant resisted the suit on the basis of a registered lease deed duly executed in his favour by the attorney of the owner of suit property, six years earlier than the agreement to sell relied upon by plaintiff---Validity---Equitable doctrine as contained in proviso to S.41 of Transfer of Property Act, 1882, which protected a subsequent transferee, was to be established by him that he had acted in good faith and taken reasonable care before entering into the transaction and that he had given valuable consideration for such transfer-­--Such equitable doctrine was a deduction from the law of estoppel which must be pleaded clearly with specific facts to be relied upon in such regard---Onus to prove that a person was entitled to the benefit of S.41 of Transfer of Property Act, 1882, was always upon the person who pleaded such protection---Plaintiff never pleaded that she was a bona fide purchaser without notice of the earlier transaction vis-a-vis property in question between the owner and defendant---Neither the plaintiff had led any evidence to such effect before Trial Court---If the plaintiff had checked with the concerned Registrar, the earlier lease deed between the owner and defendant would have been discovered but the same was not done---No issue was framed by Trial Court since the plaintiff never raised the same and Supreme Court declined to give benefit of proviso to S.41 of Transfer of Property Act, 1882---Plaintiff even could not establish under S.27(b) of Specific Relief Act, 1877, to be a bona fide purchaser for valuable consideration without notice--- Supreme Court declined to interfere in the judgments and decrees passed by the courts below---Leave to appeal was refused.

Muhammad Ishaque (Represented by his Legal Heirs) v. Messrs Eros theatre and others PLD 1977 SC 109; Mst. Hamida Begum v. Mst. Murad Begum and others PLD 1975 SC 624; Abdul Majeed and 6 others v. Muhammad Subhan and 2 others 1999 SCMR 1245; Ghulam Shabbir v. Mst. Nur Begum and others PLD 1977 SC 75 and Mst. Khair-ul-Nisa and 6 others v. Malik Muhammad Ishaque and 2 others PLD 1972 SC 25 distinguished.

Allah Bakhsh and others v. Province of Punjab and others 2002 SCMR 2003 rel.

Ch. M. Jalib, Advocate Supreme Court and Mazhar Ali B. Chohan, Advocate-on-Record for Petitioner.

Imran Ahmed, Advocate Supreme Court for Respondent No.2.

Date of hearing: 29th September, 2011.