CLD 2012 Judgments

2012 C L D 102

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Abdul Ghaffar, Member

PAKISTAN VANASPATI MANUFACTURERS ASSOCIATION (PVMA): In the matter of

Show Cause Notice No.04/2011 dated 27th April, 2011, decided on 30th June, 2011.

(a) Competition Act (XIX of 2010)---

----Ss. 3, 4, 28, 30 & 37---Abuse of dominant position and entering into prohibited agreement---Competition Commission carried out a study in the sector of ghee and cooking oil---"Sector Study Report" had stated some of the vulnerabilities which could have object or effect to prevent, restrict or distort competition in said sector---Commission constituted enquiry committee, which after completing inquiry, submitted enquiry report, which concluded that there was prima facie evidence of violation of Ss.3 & 4 of the Competition Act, 2010---Enquiry report recommended that proceedings under S.30 of Competition Act, 2010 be initiated against Pakistan Vanaspati Manufacturers Association/PVMA---Allegations in the enquiry report and show-cause notice were; firstly that PVMA appeared to have taken collective decision on behalf of its member mills and facilitated the collusion among its members to set price; Association appeared to have played a leading role to negotiate the price with the Government, costing was done by the Association on behalf of its member mills to fix the price, prima facie in violation of S.4(1)(2)(a) of Competition Act, 2010; secondly, the Association appeared to have entered into negotiation with edible oil transporters association, and decided the transport rates for its members, such arrangements/agreements, prima facie prevented and restricted competition between the members of transporters Association inter se and also distorted competition between members of different transporters Association and National Logestic Cell in violation of S.4(1)(2)(a) of Competition Act, 2010 and thirdly that the Association was charging different rates from its members and commercial importers for the same service of invoice verification, prima facie; in violation of S.3(3)(f) of Competition Act, 2010 which prohibited price discrimination by charging different prices for the same services from different customers in absence of objective justification that could justify different prices---Association played active role in costing and then negotiated for pricing based on costing prepared by itself---No involvement of Government was on record in "Price fixation"---Demand on behalf of Government for reduction in price, particularly in the wake of decline in price of edible palm oil used as raw material in manufacturing of ghee/cooking oil, seemed legitimate---Role of Government as portrayed by the Association could not entitle them to what was generally known as the "State Action Defence", doctrine in competition law---Association had failed to establish that its recommendations were only advisory in nature and were never acted upon by its members---In order to deter the undertaking from engaging in anti competitive practices and to reflect the seriousness of the infringement i.e. price fixing in contravention of S.4 of Competition Act, 2010, a penalty of Rs.50 million, was imposed, which the Association was liable to deposit within 30 days---Association, for violation of S.3(3)(b) of Competition Act, 2010 was directed to cease the practice of charging discriminatory rates and to implement similar rates/charges/fee for invoice verification from manufacturers/members and commercial importers/non-members.

Case C-309/99) [2002] 1 All ER (EC) 193; Case T-328/03) [2006] All ER (D) 13; Case 22/71 Beguelin Import [1971] ECR 949; Case C-399/93 Oude Littikhuis and others [1995] ECR I-4515; NV IAZ International Belgium and others v. Commission of the European Communities C-96/82 IAZ International Belgium NV v. Commission [1983] ECR 3369; O2 (Germany) GmbH and Co. v. European Commission (Case T-328/03)[2006] All ER (D) 13; Visa Europe Ltd. and another v. European Commission [2011] All ER (D) 251; Competition Authority v. Beef Industry Development Society Ltd. and another [2009] All ER (EC) 367 Para 39; European Night Services Ltd. v. Commission [1998] ECR II - 3141; Case C-235/92 P Montecatini v. Commission [1999] ECR I-4539, para 133; M6 and others v. Commission, Paras 72 to 77 and Case T-65/98 Van den Berge Foods v. Commission [2002] ECR II-4653, paras 106 and 107 ref.

(b) Competition Act (XIX of 2010)---

----Ss. 2(1)(h)(p), 3 & 4---Role of trade Associations---Such Associations could play an important role in the development of sector they represent---Association must also be extremely careful about what sort of activities could violate Competition Law---Discussion, deliberation and decisions regarding purely business concerns like current and future pricing, production and marketing were anti - competitive; and should be avoided at all cost by the Associations---Associations had a responsibility to ensure that their forum was not used as a platform for collusive activities---Rule of thumb, was not to allow discussion, deliberation or sharing of sensitive commercial information that could allow members, who were competitors, to co-ordinate business policy---Ensuring that every or even one, member had a profitable business was not the job of an Association.

Umer Islam Khan, Secretary-General on behalf of Pakistan Vanaspati Manufacturer's Association.

Malik Qamar Afzal, Advocate Supreme Court, Ms. Zainab Effandi, Nabeel Rehman and Ms. Rehana Zaman for Corporate Counsel.

Dates of hearing: 21st and 22nd June, 2011.

2012 C L D 150

[Competition Commission of Pakistan]

Before Abdul Ghaffar and Joseph Wilson, Members

AMIN BROTHERS ENGINEERING (PVT.) LIMITED and 4 others: In the matter of

Show Cause Notices Nos. 27 to 31 dated 2nd August, 2010, decided on 13th May, 2011.

(a) Competition Act (XIX of 2010)---

----Ss. 4, 30, 37, 38 & 62---Bid rigging in the tender---Department having found indications of potential bid rigging in the tender, inquiry was conducted in the matter---Enquiry Officer after completing inquiry submitted report which concluded that respondents/ companies had prima facie, collusive bid for the tender in violation of S.4 of Competition Act, 2010 and it was recommended that proceedings under S.30 of the Competition Act, 2010 could be initiated---Proceedings were initiated accordingly after issuing show-cause notices to the companies---Counsel for the companies raised preliminary objection with regard to retrospective operation of Competition Act, 2010---Contention of counsel for the companies was that Competition Ordinance, 2010 was promulgated on 18-4-2010 and was given effect only from 26-3-2010, whereas bid for the tender had taken place on 3-8-2009, much prior to promulgation of said Ordinance, which was not applicable in the case--- Validity--- Section 60 of Competition Ordinance, 2010/S.62 of Competition Act, 2010, had provided that provisions of Ordinance, 2010, would have and would be deemed always to have had, effect accordingly; it had clearly indicated that the drafters of Competition Ordinance, 2010 intended that its provisions had retrospective effect from 2-10-2007 regardless of the day of commencement of said Ordinance---Section 60 of Competition Ordinance, 2010, had provided continuation of the competition regime started by Competition Ordinance, 2007 on 2-10-2007, thereby filling the vacuum created by the lapse of successive Ordinances---If the contention of the counsel for the companies was accepted then the purpose and ethos of introducing a reformed competition law in Pakistan would be negated---Contention was repelled, in circumstances.

(b) Competition Act (XIX of 2010)---

----Ss. 4, 28(2) & 37(4)---Bid rigging in the tender---Issuance of show-cause notice---Department having found indicators of potential bid rigging in the tender by the companies in violation of S.4 of Competition Act, 2010, proceedings were initiated by issuing show-cause notices to the companies---Counsel for the companies presented two pronged challenges to the issuances of the show-cause notices firstly, that said notices were issued by the Registrar of the Competition Commission, who did not have the power to do so and secondly, that even if the Registrar of the Commission had the authority to issue show-cause notices, same were issued illegally, since the Registrar of the Commission did not have the power to determine; whether or not it was in the 'public interest' to do so as mandated by S.37(4) of the Competition Act, 2010---Validity---Section 28(2) of the Competition Act, 2010, empowered Competition Commission to delegate its functions and powers to any Member or Officer of the Commission---In the present case, the Registrar of the Commission was delegated the power to issue the show-cause notices in question---Section 37(4) of the Competition Act, 2010 provided that Commission was to determine that proceedings under S.30? of? Competition? Act,? 2010? was? in? the? public interest.

(c) Competition Act (XIX of 2010)---

----Ss. 2(1)(K), 3 & 4--- Abuse of dominant position and entering into prohibited agreements---Distinction to be made between unilateral anti-competitive conduct (abuse of dominance in S.3 of Competition Act, 2010 cases) and multilateral anti-competitive conduct (collusion in S.4 of Competition Act, 2010 cases); in the first instance, the issue was to determine, whether a dominant undertaking had abused its market power in a particular market; before an abuse of dominance could be established, dominance in a particular market had to be established which, in turn, warranted a definition of relevant market--- Essential requirement in cases regarding abuse of dominance was that a relevant market was identified in order to establish dominance and its abuse, if any which was not true in cases of collusive behaviour prohibited under S.4 of the Competition Act, 2010---Underlying presumption was that all the undertakings involved were operating in the same market---If such was not, then the need or question of collusion would not have arisen in the first place---In cases of collusion, market power was irrelevant, but the agreement to collude was relevant.

(d) Competition Act (XIX of 2010)---

----S. 4---Entering into prohibited agreement---Bid rigging in the tender---Facts in the present case had made out an allegation of bid rigging in the tender---Object of bid rigging was to inter alia, raise prices above the competitive levels i.e. collusion to fix prices---Given the restriction by object nature of bid rigging, there was no need to determine the effects in the relevant market; in the light of facts of the case, determination of the relevant market was not needed---Bid rigging schemes were designed to fix prices and divide markets---Both said actions constituted restriction by object as per the jurisdiction evolved in Pakistan---Anti-competitive effects of said actions had consistently been established over a hundred years competition jurisprudence and no economic evidence had been established that had shown pro-competitive benefits of those actions---Collusive bidding, in circumstances, would remain on the restriction by object category before the Competition Commission---Case dealt with supply for certain goods to public sector entities through tenders and bidding---Not all tenders carried the same terms and conditions but terms and conditions of different tenders varied which could not be placed in the same relevant product market---Inquiry report provided prima facie evidence of collusive bidding by the companies, concluding that a joint venture agreement was a mere quota agreement, while the bid of one company was a cover bid designed to give the impression of competitive bidding---Figures had made it clear that the joint venture was formed to share qualities between the members of the joint venture at a non-competitive price---Exchange of information about pricing took place between two companies and pricing difference, could not have been a mere coincidence, in circumstances; in fact, on a balance of probabilities, that pricing strategy was a result of a co-ordinated? move? between? the? two? companies? to? ensure? that? the? joint? venture? would? win? while? giving the impression of a competitive bidding process---Respondents/companies, in circumstances, had violated S.4 of Competition Act, 2010 by engaging in collusive bidding which was a serious infringement of Competition Law---Penalty of rupees two million, was imposed on each of the company, which penalty should be deposited within thirty days of the present order, in circumstances.

?????? Waqqas Ahmed Mir of Muhammad Akram and Company for Respondents.

?????? Dates of hearing: 3rd November 2010, 25th January, 24th February and 9th March, 2011.

2012 C L D 200

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson, Abdul Ghaffar and Ms. Vadiyya S. Khalil, Members

Messrs FAUJI FERTILIZER COMPANY LTD.: In the matter of

File No. 324/MERGER/CCP/2010, decided on 23rd November, 2011.

Competition Act (XIX of 2010)---

----S. 11(11)(b) & (13)---Competition (Merger Control) Regulations, 2007, Reglns. 11(5)(b) & 17--- Approval of merger of undertaking--- Imposition of conditions---Company which intended to acquire 79% shares of another company, applied for issuance of "NOC" to Competition Commission in that respect---Commission issued "NOC" by imposing certain conditions, which conditions were impugned by the acquiring company before High Court, through constitutional petition---High Court dismissed constitutional petition observing that under provisions of Regln. 11(5)(b) of Competition (Merger Control) Regulations, 2007, Commission was empowered to impose the conditions and that under provisions of S.11(3) of Competition Act, 2010 and Regln. 17 of Competition (Merger Control) Regulations, 2007, petitioner had the right to file the review within one year of the order of the Commission---Acquiring Company assailed the order passed by High Court before the Supreme Court---Supreme Court set aside the order of Competition Commission to the extent of imposing of the conditions and remanded the case to the Commission to dispose of the matter relating to the imposition of the conditions after hearing the parties and thereafter Commission would issue a certificate holding as to whether the conditions were to be imposed or not---Acquiring company was required to propose conditions which were amenable to it; the company accordingly submitted its written submissions along with the proposed amendments in the conditions---Competition Commission revised the conditions and issued NOC for the proposed merger subject to revised conditions accordingly.

Imitaz Siddiqui, Hasnain Kazmi, Advocate Supreme Court, Khalid Rohail Ansari and Inam-ur-Rehman Siddiqui for Messrs Fauji Fertilizer Company.

Salman Akram Raja, Advocate Supreme Court and Umar Akram Chaudhary for Messrs Agritech Limited.

Dates of hearing: 19th August, 6th September, 21st October and 21st November, 2011.

2012 C L D 767

[Competition Commission of Pakistan]

Before Rahat Kaunain Hassan (Chairperson), Abdul Ghaffar, Dr. Joseph Wilson, Ms. Vadiyya S. Khalil, Shahzad Ansar and Mueen Batlay (Members)

INTERNATIONAL CLEARING HOUSE AGREEMENT

AMONG LDI OPERATORS: In the matter of

File No.2(291)/AGR/EXMP REG/CCP/11, decided on 8th February, 2012.

Competition Act (XIX of 2010)---

----Ss. 4, 5 & 9---Exemption from prohibited agreement---Application for withdrawal of exemption--- Pakistan Telecommunication Company Limited (PTCL) and Long Distance and International Licensees (LDI Operators), filed application under S.5 of Competition Act, 2010 to seek exemption for their proposed International Clearing House Agreement (ICH), entered between PTCL and LDI Operators---ICH agreement, in essence was (i) giving PTCL the monopoly to receive all incoming international traffic; (ii) having a single rate for incoming international traffic; and (iii) dividing the market share of incoming international traffic---Another company being a competitor of PTCL, strongly objected to the proceedings and gave a detailed presentation in that regard---Said company had contended that ICH agreement could not be in the long term interests of industry and country---PTCL firstly submitted its response to concerns raised by said company, subsequently, through a letter requested the Competition Commission to allow PTCL to withdraw their application for exemption as the industry had not reached consensus on the modalities of ICH Operators---While allowing the withdrawal of the exemption application Commission observed that it could be noted that if in future the applicants enter into such agreement/ arrangement, notwithstanding, any authorization obtained from any other authority, such agreement/ arrangement prior to its execution would require clearance from the Competition Commission; as prima facie, it had serious competition concerns; and would attract the provisions of the Competition Act, 2010.

Zulfiqar Qazilbash, VP Communications and Naveed Malik, VP Finance for Messrs Transworld International.

Haider Latif, Manger (Legal Affairs), Affan Hassan Khan Lodhi and Abdul Mobeen for Messrs Telenor LDI Communications.

Lt. (Col.) Shafiq Ahmad Abbasi, Vice Chairman, Asia Batool, Director Law and Regulatory Affairs for Messrs Wise Communications Systems (Pvt.) Limited.

Malik Arif Munir, Head of Corporate Voice and Fahad, Regional Manager for Messrs Multinet Pakistan.

Muhammad Wajahat Zeeshan Khan, Consultant for Messrs Circlenet Communications (Pvt.) Limited.

Imran Qureshi, Director Carrier and Government Relations and Jawad Latif, Consultant Regulatory Affairs for Messrs Witribe Pakistan Limited.

Sikandar Naqi, SEVP, M. Amer Shafique, GM (Reg. Affairs) and Aziz ur Rehman, SM (CP&S) for Messrs Pakistan Telecommunication Company Limited (PTCL).

Abdul Waheed for Messrs 4B Gentle International (Pvt.) Limited.

Aurangzeb for Messrs Dancom Pakistan (Pvt.) Limited.

Gul Ahmed, Senior Advisor Regulatory Affairs for Messrs Worldcall Telecom Limited.

Abdul Sattar, FCA for Messrs ADG LDI (Pvt.) Limited.

Brig. (Retd.) Shahid Naeem Butt and Rizwan Muzaffar Cheema for Messrs Telecard Limited.

Junaid Sheikh for Messrs Wateen Telecom Limited.

Iftikhar Butt for Messrs Redtone Communications Pakistan (Pvt.) Limited.

Tariq Sultan, Head GR and Sahibzada Uzair Hashim for Messrs Link Direct International Limited.

Dates of hearing: 13th December 2011 and 31st January, 2012.

2012 C L D 783

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan (Chairperson)

and Shehzad Ansar (Member)

COMPLAINT FILED BY RECKITT BENCKISER

PAKISTAN LTD. AGAINST MESSRS S.C. JOHNSON

AND SON PAKISTAN LIMITED FOR DECEPTIVE

MARKETING PRACTICES: In the matter of

File No.77/REG/RECKITT/OFT/2011, decided on 20th January, 2012.

(a) Competition Act (XIX of 2010)---

----Ss. 10 & 37---Deceptive marketing practice---Pursuant to a complaint, show-cause notice was issued against the respondent company alleging that the company was making a claim in Marketing Campaign and advertisements to be "No.1 in Pakistan" with respect to all of its products under the brand 'Baygon'---Contentions were that on the basis of the Audit Retail Survey; the market share of the respondent's said products was 5%; that the claim in respondent's Marketing Campaign lacked a reasonable basis, related to character, suitability for use; or quality of goods in violation of S.10(2)(b) of the Competition Act, 2010; and that said Marketing Campaign was capable of harming the business interest of the complainant---Claim 'No.1 in Pakistan', was not a general assertion, but was a quantifiable and specific statement, which described specific character and it could not be accepted that either claim 'No.1' or 'Pakistan in any manner conveyed a general impression towards the consumers---When the logo of 'brand of the year' was placed with the claim 'No.1 in Pakistan', every ordinary consumer would prima facie believe on the statement and was likely to be misled by such marketing, particularly when Dengue fever was becoming an epidemic and the consumers were looking for the best protection against mosquitos---Counsel for the respondent submitted that even before the Enquiry Committee, they had submitted that they were willing to modify/amend their claim and advertisement in the light of the direction of the Competition Commission---Counsel also undertook that marketing campaign in question, would be withdrawn---In view of the prima facie findings of the enquiry report, which had not been rebutted either orally or by production of any documents/evidence, claim 'No.1 in Pakistan' lacked 'reasonable basis' and was in violation of S.10 of Competition Act, 2010---In the light of the prevailing situation when fight against 'Dengue' fever was going on vigorously, there was merit in the claim that such campaign was capable of harming the business interest in the competing undertakings, including the complainant---Respondent was reprimanded not to indulge in deceptive marketing practices in future as it would entail penal consequences; and it would continue to refrain from making the subject claims in the present form in their advertisements or marketing campaign.

In the matter of Proctor and Gamble Pakistan 2010 CLD 1695; American Italian Pasta Company v. New World Pasta Company 371 F3d 387 and Deborah A. Fraker v. K.F.C. Corporation; Yum! Brands, INC., 2007 U.S. Dist. LEXIS 32041 ref.

(b) Words and phrases---

----'Puffery' defined and explained.

Better Living, Inc., et al., 54 F.T.C. 648 (1957) and Newcal Industries v. Ikon Office Solution 513 F.3d 1038 (2008) rel.

Mehmood Mandviwalla and Ms. Sana Iftikhar for Messrs Reckitt Benckiser Pakistan Ltd.

Waseem Majid Malik, Advocate Supreme Court and Wasif Majeed for Messrs S.C. Johnson and Son Pakistan Ltd.

Date of hearing: 3rd November, 2011.

2012 C L D 808

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan (Chairperson), Ms. Vadiyya S. Khalil and Shahzad Ansar (Members)

SHOW CAUSE NOTICES NOS.8 TO 23 OF 2011 ISSUED TO PAINT MANUFACTURERS: In the matter of

Show Cause Notices Nos. 8 to 23 of 2011, decided on 13th January, 2012.

Competition Act (XIX of 2010)---

----S. 10--- Deceptive marketing practices--- Scope---Competition Commission of Pakistan, upon reference and concern expressed by the Consumer Association of Pakistan, took notice of the marketing practice in the Paint industry of inserting redeemable tokens in Paint packs used for household purpose, falling in the decorative paints category---Practice of placing a 'token' within the Paint pack without making any disclosure with regard to its amount or its presence in the pack was an industry wide phenomenon---Undertakings in the case had admitted to the use of that marketing tool and had further admitted that no disclosure was being made in that regard---Undertakings were bound to disclose information about 'tokens' and take necessary measures to ensure that the benefit was accrued to the consumer, rather than the undertakings which would be contrary to the intent of law---Advertisement was deceptive, if it had the elements of being misleading, capable of giving the wrong impression or idea and would tend to misinform or misguide owing to vagueness or any omission---Non-disclosure of tokens in Paint pack was established to be deceptive in that it created ambiguity and was found lacking having a reasonable basis as to the price borne by the consumer---Practice of omission of material information with respect to the tokens in paint packs amounted to misleading the consumers---Such was deceptive and in violation of S.10 of Competition Act, 2010--- While the Competition Commission was empowered to prohibit deceptive marketing practice, it was not mandate of the Commission to require abandoning of any particular practice, if due disclosures were in place---Undertaking had prerogative to adopt or not to adopt any marketing practices---Commission had to only ensure that such practices were compliant with S.10 of Competition Act, 2010---All undertakings had agreed, in principle, to start disclosing the presence of token in Paint packs to the consumer; and had shown their willingness to comply with the direction of the Commission---Keeping in view the co-operation extended; and the assurances given to rectify practice by the undertakings, the Competition Commission, owing to its compliance oriented approach, did not impose any penalty for committed violation---Undertakings were reprimanded to ensure responsible behaviour in future with regard to the marketing of their products and were directed to comply with directions in that respect.

International Harvester Co., 104 F.T.C. 949 at pg.1058; Cliffdale Associates, Inc., 103 F.T.C. 110, (1984); American Home Products, 98 F.T.C. 136, 370 (1981); Nederlandsche Banden Industrie Michelin v. Commission of the European Communities, Hoffman-La Roche v. Commission (1979) and AKZO Chemie v. Commission (1991) ref.

Vellani and Vellani, Ms. Farzeeb Bhadha, Ms. Samiya Fikree, Jehannzeb Khan, Vice President ICI and Imran Qureshi for Messrs ICI Pakistan Ltd.

Imran Anjum Alvi, Advocate Supreme Court for Messrs Mansoor Paint Industries (Pvt.) Limited, Messrs Diamond Paints Industries (Pvt.) Limited, Messrs UP Industries (Pvt.) Limited, Messrs Sikka Paint Industries (Pvt.) Limited, Messrs Karss Paints Industries (Pvt.) Limited (Happilac), Nelson, Paint Industries, Messrs Black Horse Paints, Messrs Rafiq Polymer Industries (Pvt.) Limited (Kingfisher), Messrs Allied Paint Industries, Messrs Brighto Paints (Pvt.) Limited and Messrs Chawla Chemicals and Metal Industries (Pvt.) Limited.

Shakeel Ahmed Qazi for Messrs Kansai Paint (Pvt.) Limited.

Muhammad Waseem, Chief Executive Officer for Messrs Brolac Paints.

Wahid Qureshi, Company Secretary and Ahmed Abbad for Messrs Berger Paints Pakistan Ltd.

Irfan Ahmed Malik and Samad Zaheer, General Manager for Messrs Nippon Paint Pakistan (Pvt.) Limited.

Dates of hearing: 25th August, 14th September and 21st October, 2011.

2012 C L D 963

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson, Abdul Ghaffar, Member (C&T.A), Dr. Joseph Wilson, Member (M&I.A), Ms. Vaddiya S. Khalil, Member (A&I.T.), Mueen Batlay, Member (CP&R) and Shehzad Ansar, Member (B&OFT)

APPLICATION FOR EXEMPTION OF JOINT VENTURE AGREEMENT BETWEEN MESSRS METRO CASH AND CARRY INTERNATIONAL HOLDING B.V. AND THAL LIMITED: In the matter of

No.2(290)/AGR/EXM/REG/CCP/2011, decided on 9th January, 2012.

Competition Act (XIX of 2010)---

----Ss. 4, 5, 9 & 11---Competition Commission (General Enforcement) Regulations, 2007, Regln.4---Application for exemption of "Joint Venture Agreement" from the application of S.4 of Competition Act, 2010---Scope---Earlier, the undertakings had also filed a pre-merger application under S.11 of Competition Act, 2010 seeking No Objection Certificate for the Joint Venture so created---Undertakings had agreed to restructure their respective subsidiaries in Pakistan---Parties agreed to impose restriction upon themselves and their affiliates not to directly or indirectly own, manage, operate, join, control, or participate in the ownership, management, operation or control of any company, firm or person, carrying on competitive business in or from Pakistan; or provide technical or other information to any third party, concerning the setting up of any competitive business---For application of competitive business, the Commission defined the relevant market as that of hyper-market, retail food stores and super market selling food and non-food items, with a shop floor area in excess of 1,500 square-meter, within the territory limits of Pakistan---Counsel for the parties submitted that the retail segment would always be a competitive, even though their main focus, was on the wholesale segment---For an agreement to qualify for exemption under S.5 of Competition Act, 2010, it must meet the criteria as laid down in S.9 of said Act---Application of the undertakings had mentioned that the proposed joint venture would facilitate the growth of the wholesale business as the entities would be able to combine their resources and take advantage of the resulting economics of sale, thereby becoming more competitive and benefiting the consumers---Submission had merit to the effect that the parties would bring in not only their expertise in the wholesale business, but would also confine their assets in order to form the Joint Venture, which ultimately could result in reduced prices on account of economics of sale, providing increasing opportunities for local suppliers etc.---Restrictions imposed by undertakings upon each other, would ensure efficiency; and were essential for the smooth operation of the Joint Venture so created---Parties having addressed the concerns, exemption was granted in terms of S.5 of the Competition Act, 2010, with direction to the Registrar of the Commission to issue the exemption certificate, with a condition that the non-compete obligation, would only continue to have effect during the life of Joint Venture under the agreement.

Badruddin F. Villani and D. Bonnor, Managing Director for Messrs Metro Cash and Carry International Holding B.V.

Yousaf Khosa, Ambreen Abbasi and Firdous Naqvi, Director for Messrs Thal Limited.

Date of hearing: 7th December, 2011.

2012 C L D 1486

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Abdul Ghaffar, Member

Messrs SIEMENS (PAKISTAN) ENGINEERING COMPANY LTD.: In the matter of

File No.1(2)/Reg/S.39/CCP/2011, decided on 3rd April, 2012.

(a) Words and phrases---

----"Leniency or lenience", literary concept and historical background, explained.

http://dictionary.reference.com/browse/leniency; Bac-caria (1986 [1764] p.46) and "Drafting and Implementing an Effective Leniency Program", Anti-Cartel Enforcement Manual, Cartel Working Group-Subgroup 2: Enforcement Techniques, ICN (2006), p.2. rel.

(b) Competition (Leniency) Regulations, 2007---

----Reglns. 3, 4 & 5---Competition Act (XIX of 2010), S.4---Leniency application--- Benefits of leniency policy---Scope---Applicant claimed leniency under Regulations 3 & 4(1) of Competition (Leniency) Regulations, 2007---Regulation 3 of the Regulations empowered the Competition Commission to grant total immunity from financial penalties, whereas under Regulation 4, the Commission would grant reduction in the amount of penalty up to 100%--- Total immunity under Regulation 3(1)(i) of Competition (Leniency) Regulations, 2007, was available, if the undertaking was the first to provide the Commission with "evidence of prohibited activity"---Stipulation laid down in Regulation 3(1)(i), was that the undertaking was the first to uncover the prohibited activity--- Regulation 4 of Competition (Leniency) Regulations, 2007, manifested that reduction in penalty was available to an undertaking which would come forward before or after the issuance of show-cause notice and submitted corroborative evidence to strengthen the enquiry or proceedings undertaken by the Commission---Level of reduction in penalty would be determined based on stage at which the undertaking would come forward and the quality of evidence---While the objective of both Regulations (3 & 4) was to give incentive to a cartel participant for busting the cartel, their application was different in terms of enforcement of Competition Law---Regulation 3 would operate as an effective tool to investigate by offering incentives to uncover the conspiracy and come forward to admit and implicate conspirators and collect evidence more quickly and at a lower cost---Regulation 4 would operate as an encouragement for parties to break ranks with the cartel members even after the relation was found out or established---Leniency Policy had four basic benefits; (i) deterrence-making cartel membership less attractive; (ii) detection-prompting the discovery of cartels; (iii) desistence-causing cartels to cease operation and (iv) sanctioning-making punishment of conspirators more likely---Said objectives were achieved through the incentives of grant of immunity or reduction in financial penalty---Leniency, seemed to be the single most important tool to be used by Competition agencies to improve cartel detection and to strengthen their proceedings against the cartel members---Whether the applicant was entitled to total immunity from penalty under Regln. 3 or qualified for reduction in penalty up to 100% had to be assessed based on the stage of the proceedings, nature and quality of evidence that the Commission already had in possession; and further provided by the applicant, and the peculiar facts and circumstances of the case---Applicant in the present case, had admitted unconditionally the infringement as alleged against it in the show-cause notice issued to it; and had given the undertaking and commitment that it had abandoned its participation in prohibited activity---Applicant had assured to have made full and true disclosure---Applicant had not been coerced for any undertaking not to take part in any activity prohibited under Competition Act, 2007---All the conditions required to entertain the claim under Regulations had been satisfied---Applicant was entitled for immunity from future proceedings that would be initiated in respect of new prohibited activity---Immunity was granted to the applicant from penalty with respect to price fixing, subject to compliance with the Regulation 3(a) to (d) of Competition (Leniency) Regulations, 2007---Applicant having made full and true disclosure, continuous co-operation and undertaking to refrain from participation in any prohibited activity, his application was granted and he was given 100% reduction in penalty.

Shahid Raza, Orr Dignam & Co. for Messrs Siemens (Pakistan) Engineering Company Ltd.

Dates of hearing: 19th and 31st January, 2012.

2012 C L D 1762

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson, Abdul Ghaffar and Dr. Joseph Wilson, Members

1-LINK GUARANTEE LTD. AND MEMBER BANKS: In the matter of

Files Nos.1/24/ATM Charges/C&TA/CCP/2011, 2(317) and (318)/AGR/EXM/REG/CCP/2012, decided on 28th June, 2012.

(a) Competition Act (XIX of 2010)---

----S. 2(1)(K)--- Relevant market, determination of---Association of Banks---First step in order to determine the relevant product market was to identify the relevant products/services that were interchangeable or substitutable with the products/services at issue---Product/services which were at issue, in the present case, were services available electronic banking mode, which were; cash withdrawal service (ATM); Utility Bills Payment Services (UBPS); Inter-Bank Fund Transfer (IBFT) and online inter-bank payment between the customers of two different banks---Automated Teller Machine (ATM), was a computerized telecommunication device that would allow the customer/client of a bank in Pakistan to conduct financial transaction, such as cash withdrawal, non-financial transactions and other services (UBPS or IBFT) at any time in a public space, without the need of a cashier, human clerk or bank teller---All that a customer/client had to do was to insert a Plastic ATM---Cash withdrawal transaction done through an ATM, could not be said to be substitutive with cash withdrawal transaction at bank teller---Second sub-set of relevant product market was that of "UBPS", which was an electronic bills presentment and payment system that enables banks to deploy bill presentment and payment service through their electronic delivery channels including 'ATM'---UBPS eliminates the inconvenience encountered during the bill payment procedure by submitting bills in traditional banking hours, or standing in long queues---Third sub-set of relevant product market was the 'IBFT' service, which service enables card holders of a bank to transfer funds instantaneously from their account to pay any of the millions of accounts of other banks network across the country through delivery channels made available by the switch and eliminates the hassle of writing cheques, making demands drafts etc.; and also reduces the cost of transaction significally---'IBFT' service is available round the clock---Services of ATM cash withdrawal, UBPS and IBFT, had distinct features, and conventional/ traditional banking services, were not comparable to them in terms of interchangeability and substitutability---Even otherwise services provided by banks through a network/switch, had been consistently recognized and dealt with in other jurisdictions as a distinct relevant market--- Enough evidence was available which had established that State Bank of Pakistan had played a significant role in fixing the 'UBPS' charges and also the modality of its collection.

(b) Competition Act (XIX of 2010)---

----Ss. 4, 5 & 9---Prohibited agreement---Association of Banks---ATM Service---Individual exemption---Criteria for individual and block exemption--- Term 'prohibited agreement', was applied to a wide range of practices, whereby competitions co-ordinate among themselves to prevent, restrict or reduce competition in the market---Most glaring example of prohibited agreement was co-ordination among the competitors to fix the price---Such anti-competitive agreement aimed to reduce price competition, raise price or effect price in a favourable way for the undertaking (Association of Banks in the present case) involved and certainly had the object and effect of reducing competition in the market under S.4 of Competition Act, 2010, prohibited agreement could also be exempted under S.5 of the Act---To seek such exemption, an agreement had to fulfil the criteria/ conditions laid down in S.9 of the Act---Section 9 of the Competition Act, 2010, essentially raised the question that whether there were efficiency gains of a competition restrictive agreement; and benefits were passed on to the consumers; or whether its pro-competitive benefits outweigh its anti-competitive harms---In absence of a collective agreement to standardize interchange fee, some of the members (Banks) could find incentives to increase their fee, while also expecting others to keep their fee low; in such situation of free riding, while their customers continued to enjoy ATM cash withdrawal service at cheap rates, the customers of other banks would generate greater revenue for them in lieu of a higher fee---If that trend would continue, every bank which owed large ATM networks, would find it in its interest to raise its fee at par with others in order to avoid the situation, wherefrom riding was taking place at its expenses---Free riding would threaten the very existence of the network by reducing, demand for such services and could result in fees much higher than that which was collectively set by the members (Banks)---Individually negotiated inter-change fee could have the effect of hampering production and distribution while also apparently threating the failure of a system that would contribute to economy.

ATM Fee Anti-Trust Litigation on March 24, 2008 rel.

(c) Competition Act (XIX of 2010)---

----S. 5---Individual exemption---Association of Banks---Utility Bill Payment Services (UBPS), facility introduced under the direction of the Supreme Court and regulation of State Bank of Pakistan had proved beneficial for utility companies by increasing their bill collection at a reasonable fee charged to them; and also providing relief to customers by providing them different delivery channels without bearing any cost---Such was a fit case for exemption---Parties could avail the benefit of exemption to avoid unnecessary work load for business as well as to lawfully reduce the cost---In view of peculiar facts and circumstances involved in the case, Competition Commission would grant individual exemption subject to conditions.

(d) Competition Act (XIX of 2010)---

----Ss. 4, 5 & 9--- Individual exemption, claim for---Association of Banks---Exemption provision for a horizontal price fixing agreement, could not be invoked except in the case of a joint venture; that too where fee was not fixed vis-à-vis customers and exemption was granted on distinct grounds of efficiency---Price fixing in horizontal agreements, was viewed as having the object of preventing, restricting and reducing the competition and treated as per se anti-competition---Undertaking (Banks) in the present case, had been behind the imposition of uniform charge on the customers/account holders by banks---Undertaking (Banks) in the guise of seeking clarification in fact had requested the State Bank of Pakistan to allow banks to continue to have a fixed and uniform fee in the garb of request for standardized fee---Undertaking had gone beyond its mandate---Board of the undertaking had deliberated, discussed and resolved on commercial aspect such as customer/cardholder's charges---Undertaking, in terms of its activities and decision, had acted more as an association of its Member Banks and provided a forum, particularly to those who were represented on the Board to discuss, review/revise on matters of common interest; and then the member banks acceding to agreement; who implemented the deliberation undertaken by the Board---Such conduct of the undertaking and collective behaviour of banks of charging uniform fee 'off US" ATM cash withdrawal transaction fell in prohibited category in terms of S.4(1) & (2)(a) of Competition Act, 2010---Violation had been committed on part of parties concerned, in circumstances--- Horizontal fixing of uniform charges amongst the competitors had the object of preventing, restricting and reducing the competition---In banking regulations, competition issues seemed to have been neglected or overlooked; and such behavioral trends, prevented more efficient systems to emerge in the banking industry---If such bad behavioral trends were not condemned or deterred, same would have far reaching impact on over vulnerable economy---Member Banks were directed to cease and desist from conduct of collective decision making or behaviour with respect to charging a uniform fee from customers for "off US" ATM cash withdrawal transactions; and to hold their Board meetings for deliberations and independent decision making with respect to such imposition of fee/charge from their customers.

Kazim Hassan, Barrister, Nadir Burney and Mehvish Muneera for Messrs 1-Link Guarantee Ltd.

Liaquat Merchant, Mustafa Ahmed, Umar Adam, Mehmood Mandviwalla and Ms. Sana Iftikhar for Standard Chartered Bank Ltd., JS Bank Ltd., Bank Al-Habib, Kashif Microfinance Ltd., Bank Alfalah, Barclays Bank, Citi Bank, Allied Bank, Habib Bank, Faisal Bank, Burj Bank, Summit Bank, Soneri Bank, Tameer Bank, Mehmood Mandviwalla and Ms. Sana Iftikhar for Al Barka Bank, Bank of Punjab, United Bank Ltd. Askari Bank Ltd., NIB Bank Ltd., KASB Bank, Habib Metropolitan Bank Ltd., Meezan Bank Ltd., National Bank Ltd., Silk Bank and Samba Bank.

Umair R. Vadria and Ms. Sanaa Ahmed for Bank Islami and Sindh Bank Ltd.

Sheikh Imtiaz Ahmed, Advocate Supreme Court for Bank of Khyber.

Muhammad Azam Zia and Raja Tariq for Dubai Islamic Bank Ltd.

Dates of hearing: 3rd May and 12th June, 2012.

2012 C L D 1861

[Competition Commission of Pakistan]

Before Ms. Rahat Kaunain Hassan, Chairperson and Shahzad Ansar, Member

Messrs AL-HILAL INDUSTRIES (PVT.) LIMITED: In the matter of

File No.18/REG/OFT/FRESHER JUICE/CCP/2011, decided on 20th June, 2012.

Competition Act (XIX of 2010)---

----S. 10---Deceptive marketing practice---Distribution of false or misleading information to consumers---Competition Commission took notice of advertisements of a "Fresh Juice" undertaking, both in print and electronic media claiming to be "100% pure juice"---Undertaking did not supply any supporting document to substantiate their said claim---Packaging and advertisements, prima facie, were in violation of S.10 of Competition Act, 2010---Question that needed to be addressed was, whether, the claim of undertaking with respect to "Fresh Juice" being 100% pure along with contents and ingredients disclosed a fine print at the back of the product, made such marketing of the product deceptive---Images of the front and back of the packaging, made apparent that the claim on the front was "Peach Juice 100% pure", while the back of the bottle bore the claim "Peach Nector"---Clear distinction existed between the two, while the claim "Peace Juice 100% Pure" gave the impression that said juice was directly obtained from the fruit without any additives; the claim "Peach Nector" on the back in contrast gave the impression that the product contained fruit juice/Pure/Pulp, water, sweetners and other additives---Undertaking had admitted that purified water and other natural ingredients were required to be added to the pulp to bring it to liquid form; and that said juice was reconstituted with water---Inference could be that the description provided more closely conformed to the internationally accepted definition of "Nector"---Alternately, the labelling on the packaging did not provide that the said juice was reconstituted with water when the undertaking had submitted such information---Fine print disclosures were inadequate in correcting the deceptive impression---Claim of "100% of Pure Juice" could not be justified as it lacked reasonable basis and mislead consumers into thinking that Fresh Juice was "100% Pure" when it was like any other packaged juice Nector with additives---Undertaking's justification that it had never its intention to lead customers into believing that the juice was without any additives whatsoever, was not relevant---Undertaking had admitted that "due to the hot filling process sucrose (sugar) had to be added to maintain its taste"---Undertaking's marketing in relation to its product "Fresh Juice", in circumstances, was deceptive and found to be lacking a reasonable basis in terms of S.10(1) and S.10(2)(b) of Competition Act, 2010, but undertaking had given the assurance to rectify such practice; and remove from all labels as well as print and electric advertisement of its product the claim of "100% Pure"---No penalty was imposed on the undertaking, in circumstances, for the committed violation---Undertaking, however, was reprimanded to ensure more responsible behaviour in the future with respect to the marketing of their products.

Federal Trade Commission v. Bronson Partners, LLC, [564 F.Supp.2d 119 (2008)]; New Zealand Commerce Commission v. Brownlie Brothers (District Court Napier, CRI 2003-041-3200, 29 March, 2004); ZONG Order dated September 29, 2009 and Paints Order dated January 13, 2012 ref.

Muhammad Azam Zia, Legal Advisor for Messrs Hilal Industries (Pvt.) Limited.

Date of hearing: 19th October, 2011.

2012 C L D 1696

[Environmental Protection Tribunal, Karachi]

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

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

Versus

RAEES-UL-HASSAN, CHIEF EXECUTIVE OFFICER, HABIB SUGAR MILLS, NAWABSHAH---Respondent

Complaint No.3 of 2010, decided on 27th May, 2011.

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

----Ss. 11, 16, 17, 21 & 22---Complaint against spreading pollution---Case of prosecution was that it had received complaints against accused/mill in respect of spreading pollution and it took samples---Prosecution had not cited the private complainant as witness---Allegation in the complaint was that due to pollution caused by the mill it had affected the ecology of the area; and also causing waterborne diseases to a large section of the population residing in the vicinity in the down-streem towns and villages, but no such evidence had been brought on record by the prosecution side to support the contents of complaint---Evidence and the material placed on record had shown that there was glaring violation of procedural Rules, committed by the prosecution witnesses, right from the beginning of initiating process against the mill, till submission of the complaint before the Tribunal---Inordinate delay occurred in sending the wastewater sample to the Laboratory---Head Research Analytic Service, had categorically stated that samples were received in the Laboratory after seven days of their collection---No reason was provided for such delay, which delay was fatal to the case of prosecution and had hampered the whole case of prosecution---Neither chain of custody of samples was established nor samples were sent to Laboratory in time---No reliance could be placed on the test report, in circumstances---Case of prosecution was that there had been violation of S.11 of Pakistan Environmental Protection Act, 1997, but neither any notice of said violation had been issued; nor the mill had been given any opportunity of hearing as required under S.16(1) of said Act---No Environmental Protection order was issued; and case was directly sent to the Tribunal without fulfilling the legal requirements---Prosecution, in circumstances, had failed to prove the charge against the mill---Chief Executive Officer of the mill was acquitted, in circumstances.

Waqar Ahmed v. Shaukat Ali and others 2006 SCMR 1139; Qurban Hussain alias Ashiq v. The State 2010 SCMR 1592; Muhammad v. The State 2006 PCr.LJ 526; Muhammad Rafiq v. The State 2005 YLR 3247 and Jameel Khan Afridi v. The State 2004 MLD 542 ref.

Karim Nawaz Qureshi, Deputy District Public Prosecutor for SEPA.

Zulfiqar Ali Noorani for Respondent/Accused.

Date of hearing: 27th May, 2012.

2012 C L D 1848

[Environmental Protection Tribunal, Karachi]

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

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

versus

ABDUL KHALIQ---Respondent

Complaint No.8 of 2010, decided on 27th April, 2011.

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

----Ss. 11, 16, 17, 21 & 22---Discharging wastewater in the environment without any in-house treatment---Allegation against respondent/factory was that waste water generated by it was discharged in the environment without any in-house treatment in excess of notified National Environmental Quality Standards; which was adversely contaminating the underground water quality; and created nuisance for in land flora and fauna---Case of prosecution was totally silent upon the material of fact that as to whether there was any discharge of wastewater outside the factory---Case of respondent/factory was that not a single drop of water was discharged in the environment by the factory---Neither the complainant nor the two witnesses who had gone to collect the wastewater sample had supported the case of the prosecution on that issue---Material contradictions existed in the evidence of said two witnesses, which had created doubt---Prosecution had failed to prove the charge so far as S.11 of the Pakistan Environmental Protection Act, 1997, was concerned---Environmental Protection Agency, had issued Environmental Protection order without hearing respondent factory, while as per law such orders were to be passed after providing an opportunity of being heard---No concrete evidence had been brought by the prosecution to discharge the burden satisfactorily---Issue as to whether respondent/factory had committed violation of Ss.11 & 16 of the Pakistan Environmental Protection Act, 1997, was answered as not proved---Accused, Chief Executive Officer of the factory was acquitted under S. 265-H, Cr.P.C., in circumstances.

Karim Nawaz Qureshi, Deputy District Public Prosecutor for SEPA.

Khowaja Navid Ahmed for Respondent/Accused.

2012 C L D 1887

[Environmental Protection Tribunal, Karachi]

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

COCA COLA BEVERAGES (PAKISTAN) LIMITED---Appellant

versus

DIRECTOR-GENERAL, ENVIRONMENTAL PROTECTION AGENCY, GOVERNMENT OF SINDH---Respondent

Appeal No.2 of 2010, decided on 25th March, 2012.

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

----Ss. 11, 16 & 22---Failure to comply with the National Environmental Quality Standard and to eradicate pollution---Environmental Protection order was issued to the appellant/factory on allegation that it was discharging polluted wastewater, which was affecting human life of the surrounding area and ecological system of the vicinity---Test reports of different laboratories submitted by both the factory and the department had shown that "Biochemical Oxygen Demand" and "Chemical Oxygen Demand", were in excess of National Environmental Quality Standard---Counsel for appellant had failed to give any satisfactory reply, rather he conceded that violation of National Environmental Quality Standard was established---Appellant had also moved an application for grant of six months' time to complete the proposed plan of Environmental Management Plan---Earlier the appellant itself in a letter had given time frame for implementation of wastewater management plan---No justification, in circumstances, was available to grant another period of six months as prayed by the appellant---Since the violation of National Environmental Quality Standards, was established, rather admitted, appeal filed by the appellant merited no consideration---Appeal was dismissed.

Khalid Mehmood Siddiqui for Appellant.

Abdul Maroof, DDPP for the Environmental Protection Agency, Sindh.

2012 CLD 2004

[Environmental Protection Tribunal, Karachi]

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

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

Versus

MOHSIN TABANI, CHIEF EXECUTIVE OFFICER, TMK SUGAR MILL---Respondent

Complaint No.5 of 2010, decided on 22nd December, 2011.

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

----Ss. 11, 16, 17 & 21(3)(a)---Environmental samples Rules, 2001, R.8(2)---Discharge or emit any effluent or waste---Complaint against---Appreciation of evidence---Wastewater samples were analyzed and tested in Laboratory of Environmental Protection Agency and it was observed, that level of Biochemical Oxygen Demand (BOD), and Chemical Oxygen Demand (COD), were in excess of National Environmental Quality Standards---Complaint was filed against the Sugar Mill to the effect that as it had clearly been established that management of Mill had violated Ss.11 & 16 of Pakistan Environmental Protection Act, 1997, Tribunal could take cognizance of the offence under S.17(1) of said Act---Evidence and the material placed on record, had shown that there were glaring violations of procedural Rules committed by the prosecution witnesses, right from the beginning of initiating process against the mill, till submission of complaint before the Tribunal---Most of all, there was inordinate delay in sending wastewater samples to the laboratory, which fact was admitted by all witnesses---Test report and certificate of test or analysis produced on record, had revealed that sample number was mentioned as 'NIL'---From said certificate it could not be ascertained as to how it pertained to the mill, as nowhere any reference or name of that mill was mentioned; and no plausible explanation had been brought on record in that regard by the department---Samples were sent to the laboratory after 48 hours in violation of R.8(2) of Environmental Samples Rules, 2001 and said inordinate delay was fatal to the case of prosecution---Neither the claim of custody of samples was established in the case nor the samples were sent to the laboratory in time---No reliance could be placed on the test report, in circumstances---Prosecution having failed to prove the charge against Chief Executive Officer of the mill, he was acquitted in the case, in circumstances.

2010 SCMR 1592; 2006 PCr.LJ 46 and 2011 SCMR 11 ref.

(b) Criminal trial---

----Burden of proof---Prosecution had to prove its case independently beyond any shadow of reasonable doubt.

Karim Nawaz Qureshi, Deputy District Public Prosecutor for SEPA.

Zulfiqar Ali Noorani for Respondent/Accused.

2012 C L D 2032

[Environmental Protection Tribunal, Karachi]

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

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

Versus

SHABBIR AHMED, CHIEF EXECUTIVE OFFICER---Respondent

Complaint No.14 of 2010, decided on 9th June, 2011.

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

----Ss. 11 & 16--- Release of untreated effluent---Environmental Protection Agency, keeping in view the potential impacts of Textile Mills on environment, due to release of untreated effluent, got the mill inspected by team of Environmental Protection Agency---Inspection Team collected the samples and on getting the wastewater tested, it was observed that the level of Biological Oxygen Demand (BOD), and Chemical Oxygen Demand (COD) were in excess of the National Environmental Quality Standards---Environmental Protection Order was issued directing for immediate stoppage of production process of the mill till installation of wastewater treatment plant---Period of establishment of the mill was only one month---Prosecution witness did not remember the colour of cooler in which samples of water in question were kept---Prosecution witness had given contradictory statement in respect of ice used to cool the sample of water---In view of contradictory evidence of prosecution witnesses, who had gone to collect the samples, it had become doubtful as to whether the samples were kept at the required temperature or not---Evidence of prosecution witness was also silent as to whether the seals of sample bottles were intact or not and who had received the samples and where those were kept when received in the late night---No proper chain of custody was established by the prosecution in the case---Result as per certificate of test or analysis produced on record, contradicted the result as per other test report which reflected negligence on part of laboratory; and it appeared that care and caution was not taken by the laboratory at the time of issuing the certificate---No reliance could be placed upon vague and contradictory certificate---If any one had failed to appear on part of the mill, then instead of issuing Environmental Protection Order to stop production forthwith, another opportunity should have been provided to mill---No one should be condemned unheard---Out of many spinning mills, only present mill had been targeted though it had submitted copy of treatment plant and ensured compliance of the same---Same policy should have been adopted towards the present mill---Prosecution had failed to prove the charge against the mill beyond shadow of reasonable doubt--- Mill having not been proved involved in contravention of Ss.11, 16 of Pakistan Environmental Protection Act, 1997, Chief Executive Officer of the mill was acquitted in circumstances.

Karim Nawaz Qureshi, Deputy District Public Prosecutor for SEPA.

Syed Shamim Hasan for Respondent/Accused.

2012 C L D 1578

[Gilgit-Baltistan Chief Court]

Before Sahib Khan and Muzaffar Ali, JJ

SAFDAR ENTERPRISES PVT. LIMITED through Javed Hussain and 8 others---Petitioner

Versus

NATIONAL BANK OF PAKISTAN through President Head Office and 5 others---Respondents

Criminal Writ Petition No.38 of 2011, decided on 14th December, 2011.

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

----Ss. 2(b)(ii) & 22---Gilgit-Baltistan (Empowerment and Self-Governance) Order, 2009, Arts. 69, 71(2)--- Writ petition---Suit for recovery of loan---Jurisdiction of Chief Court to entertain suit filed under Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Intra-court appeal before Chief Court--- Scope--- Bank (respondent) had filed a recovery suit against the defaulters (petitioners), and since the claim exceeded fifty million rupees, as envisaged under S.2(b)(ii) of Financial Institutions (Recovery of Finances) Ordinance, 2001, Chief judge of the Chief Court entrusted the suit to a judge of the Chief Court---Defaulters filed a writ petition against such order of the Chief judge with the contentions that nomination and entrustment of the suit to any judge of the Chief Court, was derogatory to S.2(b)(ii) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which section only envisaged "High Court" and not the "Chief Court", and that the Chief Court had no concept of intra-court appeal and if the nominated judge passed any decree against the defaulters, they would be deprived of their right to intra-court appeal---Validity---Chief Court assumed and exercised all the powers of a "High Court" under general laws extended to Gilgit-Baltistan---Chief Court had been empowered to entertain the suits under the Financial Institutions (Recovery of Finances) Ordinance, 2001, as a "High Court"---Chief judge exercised jurisdiction of the Banking Court under the Ordinance and did not act as a judge of the High Court in its ordinary jurisdiction, therefore, any order/ judgment/decree passed by him could be appealed against before the Chief Court under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, notwithstanding the fact that the Chief Court had no rules of intra-court appeal---Chief Court directed the competent authority having legislative power to look into the serious consequences of the issue and to introduce necessary amendments to the Gilgit-Baltistan (Empowerment and Self-Governance) Order, 2009---Order accordingly.

2002 SCMR 496 rel.

Malik Shafqat Wali and Javed Ahmed for Petitioners.

Hassan Rashid Qamar and Raja Zia-ur-Rehman for Respondents.

Ehsan Ali, President High Court Bar Association Gilgit-Baltistan on Court's Notice as Friend of the Court.

Date of Decision: 14th December, 2011.

2012 C L D 675

[High Court (AJ&K)]

Before Ghulam Mustafa Mughal, C.J., Munir Ahmed Chaudhary and M. Tabassum Aftab Alvi, JJ

MUHAMMAD ASLAM and 27 others---Petitioners

versus

AZAD GOVERNMENT OF THE STATE OF

JAMMU AND KASHMIR through Chief Secretary to

Azad Govt. Muzaffarabad and 9 others---Respondents

Writ Petition No.1208 of 2011, decided on 7th December, 2011.

(a) Land Acquisition Act (I of 1894)---

----Ss. 4 & 17(4)---Companies Ordinance (XLVII of 1984), Ss.30, 31, 32, 451 & 452---Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S.44---Writ petition---Acquisition of property--- Public purpose---Scope---Notification issued by Collector for acquisition of property for construction of a Power Project by company, had been challenged by the owners of the property---Petitioners (owners) had contended that said company being a non-State-Subject and not registered in Azad Jammu and Kashmir, acquisition of property for such company was neither lawful nor same was being acquired for the public purpose--- Validity--- Term "company" would mean a company registered under the Companies Ordinance, 1984---Certificate issued by Registrar of Joint Stock Companies, had revealed that the company had delivered the necessary documents required under Ss.30, 31, 32 & 451 of Companies Ordinance, 1984; and thereafter the proceedings of acquisition of land in the company's favour had been made---Once any company was registered after fulfilling the requirements of proceedings then it could not be said that the company was non-State Subject---Purpose for which land was being acquired for the company was of public utility---Even otherwise acquisition proceedings, though were being taken in favour of company, but ownership of said project would be given to Azad Jammu and Kashmir Government---Controversy that the company was not State Subject had, therefore, become irrelevant---Company had also stated in written statement that their status was that of collector/lessee and; they would use the project only for 35 years, subject to payment of settled tariff to Azad Government---Contention of the petitioners that property in question had been acquired for the company, being misconceived was turned down, in circumstances.

(b) Land Acquisition Act (I of 1894)---

----Ss. 4 & 17(4)---Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S.44---Writ petition---Acquisition of land for public purpose---"Public purpose", determination of---Scope---Collector Land Acquisition had the prerogative to determine as to whether purpose of acquisition was public purpose or not--- Question of public purpose, could not be determined by High Court in exercise of writ jurisdiction---Property in question having been acquired by Government for construction of project by company which would remain in the ownership of Government and after using 35 years as a contractor, the project would be handed over to the Government; land in question, therefore, was required for public purpose within the meaning of S.4 of Land Acquisition Act, 1894---Prayer of the petitioners for abrogation of notification pertaining to emergency acquisition, was also declined.

Administrator Municipal Corporation Committee Kotli and others v. Muhammad Abdullah and 3 others 2001 YLR 3367 rel.

(c) Land Acquisition Act (I of 1894)---

----Ss. 4 & 15--- Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S. 44---Writ petition---Acquisition of land--- Determination of amount of compensation---Collector had the sole prerogative to determine the amount of compensation---Constitution of Advisory Committee for the purpose through impugned notification was contrary to basic provision of Land Acquisition Act, 1894---No provision of law existed under which said notification was promulgated---Price of the land in question was determined by Advisory Committee and not by the Collector while exercising its independent power---Impugned notification pertaining to the constitution of District Price Assessment Advisory Committee for the purpose of acquisition of land was quashed by High Court---Ancillary proceedings of the Advisory Committee regarding fixation of market value of immovable property in question, were declared without jurisdiction and set aside---Collector, was directed to assess the market value of land including other things attached to said land in accordance with the provisions of S.15 of Land Acquisition Act, 1894.

Messrs Qureshi Vegetables and Ghee Mills v. Deputy Collector Excise and Taxation Mirpur and others 1994 SCR 123; Iqbal Razzaq Butt v. Abdus Salam Butt and 6 others 1999 MLD 261; Walayat Khan and 2 others v. Muhammad Azam and 12 others PLD 1996 SC(AJ&K) 18; Messrs Haroon Brothers v. Drugs Registration Board and another 1992 CLC 1017; Attaullah Atta v. Ghulam Bashir Mughal and 5 others 1996 CLC 1551 and Federation of Pakistan through Ministry of Defence and 2 others v. Muhammad Khan and another PLD 1991 SC(AJ&K) 33 distinguished.

Abdul Rasheed Abbasi for Petitioners.

Syed Shahid Bahar for Respondents Nos. 1 to 9.

Noorullah Qureshi for Respondent No.10.

Date of hearing: 6th October, 2011.

2012 C L D 1020

[High Court (AJ&K)]

Before Ghulam Mustafa Mughal, C.J. Munir Ahmed Chaudhary and M. Tabassum Aftab Alvi, JJ

ABID HUSSAIN---Applicant

versus

THE STATE---Non-applicant

Reference No.48-A of 2012, decided on 18th April, 2012.

(a) Azad Jammu and Kashmir Ehtesab Bureau Act (I of 2001)---

----S. 4(n)---Azad Jammu and Kashmir Ehtesab Bureau (Adaptation and Extension) Act (IX of 2005), Ss. 1(3) & 2(2)---Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S. 19(3)---"Public office holders"---Definition---Scope---Contention that employees of bank did not fall within the definition of "public office holders" as defined under S.4(n) of the Azad Jammu and Kashmir Ehtesab Bureau Act, 2001---Validity---Perusal of S.4(n) of the Azad Jammu and Kashmir Ehtesab Bureau Act, 2001, and sections 1(3) and 2(2) of Azad Jammu and Kashmir Ehtesab Bureau (Adaptation and Extension) Act, 2005 showed that banks were not under the administrative control of the government or Azad Jammu and Kashmir Council rather the latter was vested with the authority to co-ordinate with the Government of Pakistan for conducting the business in Azad Jammu and Kashmir, therefore, despite the fact that Azad Jammu and Kashmir Ehtesab Bureau Act, 2001, had been adapted by the Council, the employees of the banks did not come within the definition of "holders of public office" as defined in S.4(n) of the Azad Jammu and Kashmir Ehtesab Bureau Act, 2001---Council had not adapted the definition of "public office holders" listed in S.4(n) of the Azad Jammu and Kashmir Ehtesab Bureau Act, 2001, rather it had limited the application of the said Act only to departments in the administrative control of the Azad Jammu and Kashmir Council and the departments which were for the time being under the administrative control of the Council.

Muhammad Shabbir and another v. Ehtesab Bureau Azad Kashmir and others Civil Appeal No.44 of 2011 ref.

United Bank Ltd. Employees Union through its President and General Secretary at Muzaffarabad and 4 others v. United Bank Limited through President and others 2000 PLC (C.S.) 930; Habib Bank Ltd. through Manager Kalyal Chakswari Branch, Mirpur v. Zulfiqar Ali Malik and 2 others 2000 PCr.LJ 967 and Genuine Rights Commission through Munir Ahmed Farooqi, Advocate and others v. Federal Government through Chief Secretary, Islamabad and 11 others PLD 2006 HC(AJ&K) 1 rel.

(b) Azad Jammu and Kashmir Ehtesab Bureau Act (I of 2001)---

----S. 4(n)---Azad Jammu and Kashmir Offences in Respect of Banks (Special Courts) Act, 1984, S. 4 & Sched. 1---Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S. 19(3)---Cognizance of bank related offences by the Ehtesab Bureau---Scope---Contention that Ehtesab Bureau had no jurisdiction to investigate any offence which was covered under the Azad Jammu and Kashmir Offences in Respect of Banks (Special Courts) Act, 1984---Validity---Offences relating to the banks could only be tried by the Judge Banks (Offences) Special Court under the provisions contained in the Azad Jammu and Kashmir Offences in Respect of Banks (Special Courts) Act, 1984, and the Ehtesab Bureau had no jurisdiction to investigate and try the offences relating to the banks except banks functioning under the administrative control of the Azad Jammu and Kashmir Government or the Council.

Sadaqat Hussain Raja for Applicant.

Sardar Zaffar Iqbal Azad, DCP for the Ehtesab Bureau.

Ch. Shaukat Aziz, Advocate for the Government.

Syed Shahid Bahar, Advocate for the Bank.

Sardar K.D. Khan, Advocate for Muhammad Anwar Khan, Muhammad Munir Khan and Malik Naeem.

2012 C L D 394

[Islamabad]

Before Riaz Ahmad Khan, J

Messrs DANCOM PAKISTAN (PVT.) LIMITED through Chief Executive Officer---Petitioner

Versus

PAKISTAN TELECOMMUNICATION AUTHORITY through Chairman and another---Respondents

Writ Petition No. 3190 of 2010, decided on 24th June, 2011.

Access Promotion Rules, 2004---

----R. 12---- Pakistan Telecommunication (Re-organization) Act (XVI of 1996), S. 23---Constitution of Pakistan, Art.199--- Constitutional petition--- Reporting requirements---Petitioner was issued show cause notice under S.23 of Pakistan Telecommunication (Re-organization) Act 1996 by Pakistan Telecommunication Authority (PTA) by virtue of which petitioner was asked to submit International Incoming Traffic Data for the months of January, February and March 2010 and also explain in writing within thirty days of the issuance of the said notice as to why their licence should not be suspended, terminated or any other enforcement order should not be passed against them---Held, petitioner, through the show-cause notice, was asked to provide information as required under Rule 12(1)(a) of the Access Promotion Rules, 2004 and therefore no adverse order had been passed against the petitioner---Show-cause notice could not be challenged in constitutional jurisdiction---Constitutional petition being not maintainable, same was accordingly dismissed with costs.

2000 SCMR 1017 ref

Mian Irfan Akram and Zahid Aman for Petitioners

Raja Nosherwan Akhtar, Zulqurnain Bhatti, Deputy Director Legal and Ali Raza, Assistant Director Legal, for PTA.

Shafi Muhammad Chandio, learned D.A.-G. for Respondent No.2.

Dates of hearing: 31st May, 7th, 14th, 20th and 24th June, 2011.

2012 C L D 619

[Islamabad]

Before Riaz Ahmad Khan, J

OMV MAURICE ENERGY LIMITED through General Manager---Petitioner

Versus

OCEAN PAKISTAN LIMITED through Chief Executive Officer and another---Respondents

C.S. No.249 of 2011, decided on 29th November, 2011.

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

----Ss. 20 & 4---Application for filing arbitration agreement in court and referring the matter to arbitration---Petroleum Concession Agreement and Petroleum Farmout Agreement---Petitioners, on the basis of a Petroleum Concession Agreement signed between the Government and the respondents, had entered into a Farmout Agreement with the respondents to carry out petroleum exploration operations---Deed of Assignment for the exploration work was signed between the parties on the basis of said Farmout Agreement---Under said Farmout Agreement and the Deed of Assignment , the majority 75% shares of the operation were transferred to the plaintiffs while the remainder minority shares were retained by the respondents and the Government---Dispute between the parties arose relating to default in payment and non-participation in work by the respondents after exploration work had started on the basis of the Farmout Agreement---Contention of the petitioners was that the forum for settlement of such dispute under the Farmout Agreement was arbitration, and that the respondents did not want to initiate arbitration---Contention of the respondents was that the transfer of shares of the operations to the petitioners was illegal which had been challenged in a constitutional petition, and the defendants had initiated a civil suit regarding the demand for payment, and the right of the petitioners to carry out exploration work and in presence of said constitutional petition and civil suit, the matter could not be referred to arbitration and that the Farmout Agreement was superseded by the Deed of Assignment---Validity---Deed of Assignment itself was issued on the basis of the Farmout Agreement, and it could not be said that the Deed of Assignment had overruled the Farmout Agreement---Respondents, on the basis of Farmout Agreement had agreed to transfer 75% of the working interest to the plaintiff, and approval for the said transfer was given by the President of Pakistan by virtue of the Deed of Assignment---Farmout Agreement as well as the Deed of Assignment determined the rights and liabilities of the parties---Contention of the respondents that under Deed of Assignment disputes could only be settled through arbitration in accordance with the Petroleum Concession Agreement and not the Farmout Agreement was misleading as the Petroleum Concession Agreement provided for settlement of disputes between the Government and the parties---In the present case, the dispute was between the parties only (petitioner and respondents), who had the working interest in the exploration and production of petroleum products---High Court accepted the application of the petitioner for referring the matter to arbitration, with the direction to the parties to nominate the arbitrators, and in case of dispute between the parties, an Umpire would be appointed by the arbitrators, with the consent of the parties, whose decision shall be final and binding upon the parties---Basic dispute between the parties was regarding payment required to be made by the respondents however, the respondents could raise any other issue before the arbitrator.

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

----S. 41---Civil Procedure Code (V of 1908), O.XXXIX Rr.1 & 2---Procedure and powers of court---Petroleum Concession Agreement and Petroleum Farmout Agreement---Application of petitioners/applicants for permission to carry out exploration and development work at the petitioners'/applicants' own risk and cost---Contention of the petitioners/applicants was that the working could not be carried out without joint decision of the parties having the working interest in the operations and the respondents' non-participation in meetings was with the object to stop the petitioners/applicants from carrying out work---Petitioners/applicants further contended that the representative of the Government did not attend the meetings due to non-participation of the respondents---Validity---Record showed that petitioners/applicants had got 75% working interest in the operations, whereas the respondents had got 20% of the working interest, therefore, the petitioners/applicants had a prima facie case---Balance of convenience was also in favour of the petitioners, because if work was stopped at the site, huge loss would be caused to the petitioners as well as to the Government, and the same would result into an irreparable loss not only to the petitioners but also the public , as interest of the public was also indirectly involved in the matter---High Court directed that the petitioners would be at liberty to carry out the work even if the respondents did not participate in the meetings---Representative of the Government was directed to participate in the meetings, if he otherwise had no objection---High Court accepted application of petitioners, in circumstances.

Ali Raza, Sardar M. Ishaq and Sufia Khan for Petitioner.

Syed Naeem Bukhari and Syed Hasnain Kazmi for Respondents.

Date of hearing: 29th November, 2011.

2012 C L D 858

[Islamabad]

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

DIGITAL MEDIAL SOLUTIONS PRIVATE LIMITED through Company Secretary---Plaintiff

versus

WARID TELECOM PRIVATE LIMITED through Faisal Saeed---Defendant

C.S. No.1 and C.M. No.260-S of 2011, decided on 21st March, 2012.

(a) Copyright Ordinance (XXXIV of 1962---

----Ss. 2(l) & 39---Civil Procedure Code (V of 1908), O. VII, R. 11 & O. XXIX, R. 1---Suit for infringement of copyright by company---Application for rejection of plaint---Subscription and verification of pleadings---Respondent (company) had filed suit against applicant (company) for infringement of respondent's copyrights over certain licensed music content--- Applicant filed present application under Order VII, Rule 11, C.P.C. for rejection of respondent's plaint with the contention that suit had not yet been filed by the duly authorized person in accordance with law; that respondent only had the right to sell and distribute the licensed content and was not the owner of copyright, therefore, it had no cause of action and locus standi to file the suit, and that respondent had filed an application before the Copyrights Office, but same was pending and the request had not yet been granted---Validity---Contention of applicant that plaint had not been verified by duly authorized person, same was a formal defect which could be cured subsequently and the plaint could not be rejected on such ground---Mere failure on part of respondent to get the copyright registered did not invalidate or impair the copyright nor destroyed the right to sue for copyright infringement---Contentions of applicant raised crucial and substantial questions of facts and law which were to be adjudicated at the trial of the suit and same could not be decided without recording of evidence---Respondent had properly pleaded the cause of action in the plaint and at present stage the contents of the same were admitted to be true---Lack of proof or weakness of proof in the circumstances of the case did not furnish any justification for coming to the conclusion that there was no cause of action or locus standi shown in the plaint---Rejection of plaint on technical grounds would have amounted to depriving the respondent from his legitimate right of availing legal remedy--- Plaint of respondent could not be rejected under Order VII, Rule 11 of C.P.C., and, consequently, application for rejection of plaint was dismissed.

Shadoo Muhammad Khan v. Ganmoon 1989 MLD 4624; Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited 2011 CLD 408 and Messrs Ferozesons Pvt. Ltd. v. Dr. Col. Retd. K.U. Kureshi 2003 CLD 1052 rel.

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

----O. VII, R. 11; O.III, R.4; O.VI, Rr.14 & 15; O.XLI, R.1 & O. XXIX, R. 1---Copyright Ordinance (XXXIV of 1962), Ss.2(l) & 39--- Suit for infringement of copyright by company--- Rejection of plaint--- Scope--- Defects in pleadings, application and memorandum of appeal with regard to presentation, signing and verification being technical irregularities relating to matter of procedure, could be rectified at any stage of proceedings and could not furnish basis for rejection of plaint, application or memorandum of appeal.

Shadoo Muhammad Khan v. Ganmoon 1989 MLD 4624 quoted.

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

----O. VII, R. 11---Copyright Ordinance (XXXIV of 1962), Ss.2(l) & 39---Suit for infringement of copyright by company---Rejection of plaint--- Scope---For decision of application under Order VII, Rule 11, C.P.C, the facts as alleged in the plaint were to be looked into and nothing extraneous could be seen and where the plaint, prima facie, disclosed a cause of action, same could not be rejected.

(d) Administration of justice---

----Prime object and purpose of establishing courts was to dispense justice to the parties before it in accordance with the law and discourage adjudication on technicalities.

(e) Copyright Ordinance (XXXIV of 1962)---

----Ss. 2(l) & 39---Civil Procedure Code (V of 1908), O.VII, R.11 & O.XXIX, R.1---Suit for infringement of copyright by company---Application for rejection of plaint---Trial Court, inadvertently, did not frame issues regarding objections taken in the written statement of the applicant (defendant)---High Court, while dismissing application for rejection of plaint gave directions to Trial Court to add such issues.

Sophia Khan along with Sardar M. Ishaq for Applicant/Defendant.

Babar Ali Khan for Respondent/Plantiff.

2012 C L D 957

[Islamabad]

Before Riaz Ahmad Khan, J

Messrs The BRANDS through Muhammad Arshad---Petitioner

versus

RENT CONTROLLER, ISLAMABAD and 2 others----Respondents

Writ Petition No.1241 of 2010, decided on 21st February, 2012.

Islamabad Rent Restriction Ordinance (IV of 2001)---

----S. 17--- Constitution of Pakistan, Art.199---Constitutional petition---Ejectment petition filed by landlord company through a person not having any authorization letter/resolution of the Board of the company---Maintainability---Tenant (petitioner) assailed concurrent findings of the courts below ordering the ejectment of tenant from the premises---Contention of the tenant was that the landlord was a private limited company and the ejectment petition was filed through the Secretary of the company who had no authorization letter to move said ejectment petition---Validity---Landlord had filed ejectment petition, but along with said petition, no resolution passed by the Board of the landlord company was attached---Constitutional petition also did not mention as to through whom the ejectment petition was filed and that he was authorized by the Board of the landlord company through any resolution---Constitutional petition was not even signed by the person through whom the ejectment petition was filed---Authorization letter produced during the course of evidence, was actually issued by the person through whom the ejectment petition had been filed and on the basis of such letter he simply authorized a witness to give a statement in evidence during the proceedings---Said letter was not a resolution passed by the Board of landlord company---Ejectment petition being not maintainable, in circumstances, orders of the courts below were set aside---High Court, however, observed that the landlord would have right to file a fresh ejectment petition in accordance with the law, rules and procedure, and that the acceptance of the tenant's constitutional petition by the High Court would not come in the way of the landlord filing a fresh ejectment petition--- Constitutional petition was allowed, accordingly.

PLD 2005 Kar. 478; PLD 2008 Kar. 540; PLD 1991 Lah. 381; PLD 1971 SC 550 and 2009 SCMR 846 ref.

2006 SCMR 437 fol.

Raja Muqsit Nawaz Khan for Petitioner.

Syed Javed Akbar Shah for Respondent No.3.

Date of hearing: 15th February, 2012.

2012 C L D 1633

[Islamabad]

Before Riaz Ahmad Khan and Muhammad Azim Khan Afridi, JJ

MUHAMMAD FAWAD and another---Appellants

Versus

STANDARD CHARTERED BANK (PAKISTAN) LIMITED through Branch Manager---Respondent

E.F.As. Nos.8 and 9 of 2011, decided on 29th May, 2012.

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

----Ss. 22(1), 22(2), 4, 15 & 19---Civil Procedure Code (V of 1908), Ss.47, 104, O.XXI & O.XLIII---Execution of decree---Suit for recovery was decreed---Sale of mortgaged property---Appeal against order of Banking Court for fixing reserve price for auction---Maintainability---Section 104 and O. XLIII, C.P.C. specified the orders of the court from which appeal lay---Fixation of reserve price, in pursuance of auction proceedings, was neither stated nor mentioned as an appealable order under the provisions of the C.P.C.---According to S.4 of the Financial Institutions (Recovery of Finances) Ordinance, 2001; in case if any inconsistency between the provisions of the Ordinance and any other law for the time being in force, the provisions of the Ordinance would have an overriding effect---According to S.22(1) of the Ordinance, only a judgment, decree, sentence or final order passed by a Banking Court would be appealable before the High Court---Section 22(2) of the Ordinance barred appeal, review, revision against an order accepting or rejecting an application for leave to defend or any interlocutory order of the Banking Court, or an order passed under S.15(11) or 19(7)---Orders impugned were neither final within the meaning of S.22(1) of the Ordinance nor could be termed as interlocutory order aimed at disposal of the entire case---Appeal being not maintainable, was dismissed, in circumstances.

Muhammad Shahid Peracha for Appellants.

Raja Muqsit Nawaz for Respondent.

Date of hearing: 17th May, 2012.

2012 C L D 1675

[Islamabad]

Before Noor-ul-Haq N. Qureshi, J

SUMMIT BANK LTD. through Authorized Officer/Attorneys---Plaintiff

Versus

FARHAD---Defendant

C.O.S. No.11 of 2011, decided on 23rd May, 2012.

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

----S. 10---Application for leave to defend---Suit by the Bank had been validily filed and was maintainable as the power of attorney had been executed by the President of the plaintiff Bank---Defendant had admitted the issuance of the finance facility and that he was regularly paying the instalments but due to unavoidable circumstances, he could not pay the same further---Effect---Defendant had not discharged his obligation as per his agreement with the plaintiff Bank and had failed to make out any substantial question of law or fact in respect of which any evidence was required to be filed---Application for leave to defend was dismissed and the suit of the plaintiff Bank was decreed, in circumstances.

Allied Bank Limited v. Muslim Cotton Mills Private Limited and 3 others 2011 CLD 393; National Bank of Pakistan v. Messrs Apollo Textile Mills Limited and 4 others 2012 CLD 189 and Siddique Woollen Mills and others v. Allied Bank of Pakistan 2003 SCMR 1156 ref.

Raja Muqsit Nawaz Khan for Plaintiff.

Rai Azhar Iqbal Kharal for Defendant.

Date of hearing: 20th April, 2012.

2012 C L D 1714

[Islamabad]

Before Riaz Ahmad Khan, J

Messrs SHANDAR PETROLEUM/CNG through Managing Partner and 46 others---Petitioners

versus

FEDERATION OF PAKISTAN through Ministry of Petroleum and 2 others ---Respondents

Writ Petitions Nos.3128, 3144, 3145, 3156, 3160, 3161, 3171, 3172, 3173, 3177, 3191, 3203, 3204, 3206, 3210, 3236, 3254, 3255, 3258, 3260, 3292, 3299, 3311 and 3312 of 2011, decided on 23rd December, 2011.

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

----S. 2---Compressed Natural Gas (CNG) Supply Stations, setting up of---Incentive provided by Government inviting general public to invest in CNG Sector---Suspension of gas supply to such Stations by Government due to load-shedding--- Validity--- Conversion to gas was required to minimize use of petrol and diesel--- Policy and procedure for establishment of CNG Stations could not be considered as an incentive---Anything mentioned in policy regarding use of CNG could not be taken as an incentive on part of Government or a promise with a person wanting to establish CNG Station.

PLD 2007 SC 642; 1978 SCMR 327; 1986 SCMR 680; PLD 1973 SC 49; PLD 2011 Lah. 120; PLD 2002 Lah. 359; 1995 CLC 1687; PLD 2011 SC 44; AIR 1977 SC 1496; AIR 1990 SC 1851; 2008 SCMR 17; 2007 PTD 1005; 2010 MLD 690; AIR 1991 SC 14; 2006 YLR 229; 348 U.S. 483 (1955); 174 U.S. 96 (1899) and 2011 YLR 1491 ref.

(b) Constitution of Pakistan---

----Arts. 158 & 172---Islamabad Capital Territory (Administration) Order (18 of 1980), Art.2---Natural gas, well-head of---Priority given to a Province to meet its requirements from such well-head situated in its territory---Extending such priority to other Province(s) or Islamabad Capital Territory by judicial pronouncement---Scope---Such priority given to a Province specified in Art.158 of the Constitution could not be given to any other Province or Federal Government despite addition of Sub-Article 3 to Art. 172 of the Constitution---Such priority provided in a specific manner by the Constitution could not be extended by way of judicial pronouncement---Nothing could be added to the Constitution or any other laws by way of judicial pronouncement for same being meant only for interpretation of constitutional provisions--- Executive authority of Capital Territory vested in the President as same was not part of Punjab---Capital Territory could not be equated with Khyber Pakhtunkhwa as Federal Government would not mean such territory---No Article of the Constitution provided such priority to Capital Territory of Islamabad---Principles.

(c) Constitution of Pakistan---

----Arts. 23, 24 & 199---Constitutional jurisdiction of High Court---Scope---Policy introduced by Government---Court could scrutinize and strike down such policy, if it found the same to be arbitrary, unreasonable or violative of law or Constitution, but could not give policy or substitute same by introducing a new policy.

PLD 2007 SC 642, 1998 SCMR 327 and 1986 SCMR 680 rel.

Makhdoom Ali Khan, Barrister Khurram M. Hashmi, Saad M. Hashmi, Sajid ur Rehman Mashwani, Umair A. Rishi, Hyder Ali Khan and Shahzaib for Petitioners (in Writ Petitions Nos.3128, 3171 and 3172, 3236 of 2011).

Syed Hassan Ali Raza for Petitioners (in Writ Petition No.3144 of 2011).

Ch. Abdul Rehman Bajwa for Petitioners (in Writ Petitions Nos.3160, 3177 and 3210 of 2011).

Barrister Sajeel Shehryar for Petitioners (in Writ Petition No.3173 of 2011).

Syed Intikhab Hussain Shah for Petitioners (in Writ Petitions Nos.3191, 3254, 3255, 3258 and 3312 of 2011).

Muhammad Ilyas Sheikh and Rubina Shaheen for Petitioners (in Writ Petition No.3292 of 2011).

Tahir Afzal Abbasi for Petitioners (in Writ Petition No.3203 of 2011).

Muhammad Iqbal, Representative of Petitioner (in Writ Petition No.3204 of 2011).

Syed Intikhab Hussain Shah on behalf of Ayyaz Shaukat for Petitioners (in Writ Petitions Nos.3206 and 3156 of 2011).

Sheikh Muhammad Suleman for Petitioners (in Writ Petition No.3145 of 2011).

Naveed Malik, Yasir Raja and Qazi Hafeez for Petitioners (in Writ Petitions Nos.3161, 3260 and 3299 of 2011).

Raja Amjad Mehmood for Petitioners (in Writ Petition No.3311 of 2011).

Agha Sikandar, President, CNG Association for Petitioners.

Noor-ul-Amin, Vice-President, C.N.G. Association I.C.T. for Petitioners.

Mirza Mahmood Ahmad for M/O Petroleum.

Asim Hafeez for SNGPL.

Muhammad Abid Raja, D.A.-G., Rizwan ul Haq, Principal Law Officer, OGRA, Rehan Nawaz, General Manager, SNGPL for Respondents.

Misbah Gulnar Sharif, for OGDCL (in Writ Petition No.3144 of 2011)

Date of decision: 23rd December, 2011.

2012 C L D 36

[Sindh]

Before Salman Hamid, J

MANSOOR AHMED MUGHAL---Plaintiff

Versus

NOOR QADIR TAWAQAL and 3 others---Defendants

Suit No. 833 of 2006, decided on 11th May, 2011.

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

----O.XII, R.6 & O.XXIX, R.1---Recovery of money---Admissions---Plaintiff sought recovery of money against company and its chief executive---Validity---Defendant company being a juristic person was a legal entity, separate from its shareholders, the admission of liability by defendant/chief executive of the company could not be treated as admission of liability by defendant company---Defendant company despite filing of written statement, chose not to lead any evidence, challenging the claim of plaintiff against it---Nothing on record had been brought by defendant company not to accept the claim of plaintiff against it---Liability to pay was not denied by defendant company on the one hand and liability to pay was admitted by defendant/ chief executive, thus suit was decreed in terms that both the defendants would pay to plaintiff jointly and severally the amount claimed, with mark up at latest prevailing bank rate--- Suit was decreed accordingly.

(b) Words and phrases---

----"Jointly and severally"---Connotation---Jointly and severally means that when two or more members of a company declare themselves jointly and severally bound to render themselves liable to a joint action against all as well as to a separate action against each in case conditions of bond are not complied with.

Raja Qureshi for Plaintiff.

Shafiq Ahmed for Defendants Nos. 1 and 2.

Nemo for Defendants Nos. 3 and 4.

Date of hearing: 3rd May, 2011.

2012 C L D 50

[Sindh]

Before Mushir Alam, C.J. and Imam Bux Baloch, J

ENGRO FERTILIZERS LIMITED---Petitioner

Versus

ISLAMIC REPUBLIC OF PAKISTAN AND FEDERATION OF PAKISTAN, ISLAMABAD and others---Respondents

C.P. No.D-1282 of 2011, decided on 18th October, 2011.

(a) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction--- Scope--- Good governance--- Commitments of State--- Duty of courts---Scope---Petitioner established an industrial unit for production of fertilizer on the assurance and guarantee of Federal Government and natural gas transmission company that the plant would get uninterrupted and regular supply of a fixed quantity of natural gas---Grievance of petitioner company was that US$1.1 billion were spent on establishing of the plant but authorities had failed to provide the agreed amount of natural gas regularly---Validity---If State or Government failed to live up to its commitments, assurances and guarantees, court could enforce such incentive scheme and concessions, assurances and guarantee offered and acted upon at the motion of parties complaining of breach or violation thereof---Whenever State or Government, to lure or attract investment held out, gave assurance or represented to investors to provide certain incentives, tax holiday, concession in customs or excise duties, advantages, concession, licences and/or benefits etc. and acting on such sovereign incentive assurances, representations and guarantees any investor had made investments in any industrial undertaking it was obligatory on part of the State or the Government to ensure that it would live up to its sovereign representations, assurances, commitments, representation and guarantees, otherwise it would cause a serious dent in credibility of any State and or Government---No State or Government could afford to breach such sovereign commitment, assurances and guarantees---If these were not fulfilled, such State and/or Government would not only lose its face and credibility internationally and locally but also confidence and trust of investors would be shattered, which would not only be devastating for future of any State and or Government but had far reaching adverse impact and consequence immeasurable in terms of money---High Court directed the authorities to supply guaranteed quantity of natural gas to petitioner's plant strictly in accordance with contract---Petition was allowed in circumstances.

Lucky Cement Ltd. v. Federation of Pakistan PLD 2011 Pesh. 57 rel.

Bismillah Textile v. HBL 2008 CLC 504; The State v. Asif Adil 1997 SCMR 209; PLD 1982 Kar 250; Ghulam Hussain v The State PLD 1981 Kar. 711; 2010 SCMR 1972; PLD 2011 SC 235; Dewan Petroleum (Pvt.) Limited v. Federation of Pakistan 2010 CLD 988; Azra Riffat Rana v. Federation of Pakistan, PLD 2008 SC 476; Federation of Pakistan v. Fecto Belarus Tractors Limited. PLD 2002 SC 208; Petrosin Gas Pakistan Ltd. v. PSO 2010 YLR 2643; Echo West International v. Government of Punjab 2009 CLD 937; Huffaz Seamless Pipe Industries Limited v. SNGPL 1998 CLC 1890; Hazara Improvement Trust v. Qaisara Elahi 2005 SCMR 687; Ramna Pipe v. SNGPL 2004 SCMR 1274; Airport Services Manager v. Quaid-e-Azam International Airport 1998 SCMR 2268; Ameer Khan v. Government of Punjab PLD 2010 Lah 443; Habibullah Energy Ltd. v. WAPDA; 2008 YLR 2612; Hydri Ship Breaking Industries v. Sindh Government; 2007 MLD 770; A.R. Khan v. Federation of Pakistan 2010 CLD 1648; Lt. Gen. Salahuddin Tirmizi v. Election Commission of Pakistan; PLD 2008 SC 735 and Al-Iblagh Limited v. The Copyright Board, Karachi 1985 SCMR 758 ref.

(b) Constitution of Pakistan---

----Arts. 158 & 172---Natural resources---Ownership---Mineral, oil and natural gas produced in any province, under the provisions of Arts.158 and 172 of the Constitution, vest in the province producing it and the Federal Government, jointly and equally.

(c) Constitution of Pakistan---

----Art. 161---Federal excise duty and royalty on natural gas---Entitlement---Net proceeds of excise duty on natural gas levied at well head and royalty collected by Federation Government is to be paid to the Province in which the well head of natural gas and oil is situated---Such amount though collected by Federal Government does not form part of Federal Consolidated Fund.

Makhdoom Ali Khan for Petitioner.

M. Ashraf Mughal, DAG along with Bismillah Rai, Director Ministry of Petroleum and Natural Resources for Respondents Nos. 1 and 2.

Sarwar Khan A.A.-G. on Court Notice.

Asim Iqbal for Respondent No.3.

Date of hearing: 15th September, 2011.

2012 C L D 71

[Sindh]

Before Salman Hamid, J

SAUDI PAK INDUSTRIAL AND AGRICULTURAL INVESTMENT COMPANY (PVT.) LIMITED----Plaintiff

Versus

NATIONAL BANK OF PAKISTAN----Defendant

C.M.As. Nos.2808 of 2005 and 3014 of 2004 in Suit No.B-40 of 2000, decided on 31st May, 2011.

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

----S. 9---Civil Procedure Code (V of 1908), O. XII, R.6---Recovery of bank loan---Judgment on admission---Principle---Banking Court granted leave to defend the suit and framed issues---Plaintiff sought passing of judgment under O.XII, R.6 C.P.C. on the ground that defendant had allegedly made admissions with regard to claim of plaintiff---Validity---Issues were framed with regard to liability to pay under guarantees and circumstances under which guarantees had been executed it could not be said that it was a case of admission and the case could not be decided on the decision of two issues referred by plaintiff---Dispute between the parties could not be decided without first resorting to leading of evidence on all issues including those two which were subject-matter of application under O.XII, R.6, C.P.C.---Application was dismissed in circumstances.

Macdonald Layton and Company Pakistan Ltd. v. Uzin Export-Import Foreign Trade Co. 1996 SCMR 696; Mian Tajammul Hussain and 3 others v. State Life Insurance Corporation of Pakistan 1993 SCMR 1137; G.R. Syed v. Muhammad Afzal 2007 SCMR 433 and State Life Insurance Corporation of Pakistan v. Wali Muhammad Akbarji and others 1985 CLC 2865 distinguished.

Izzat Khan and another v. Ramzan Khan and others 1993 MLD 1287; Muhammad Zaki and another v. Muhammad Taqi PLD 1995 Kar. 416 and Gerry's International (Pvt.) Limited through Managing Director v. Qatar Airways through Area Manager PLD 2003 Kar. 253 rel.

Mansoor A. Shaikh for Plaintiff.

Zubair Qureshy for Defendant.

2012 C L D 92

[Sindh]

Before Mushir Alam, C.J. and Imam Bux Baloch, J

HASSAN RAZA through Lawfully Constituted Attorney---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary Ministry of Interior, Islamabad and 2 others---Respondents

C.P.D. No.756 of 2011, decided on 29th September, 2011.

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

----S. 2---Exit from Pakistan (Control) Rules, 2010, R.2(1) & (2)--- Constitution of Pakistan, Art. 199---Constitutional petition---Exit control list---Bank loan, recovery of---Name of petitioner had been placed on Exit Control List for recovery of bank loan when recovery suit was pending before Banking Court of competent jurisdiction---Validity---Where a person was involved in a private dispute, the provisions of Exit from Pakistan (Control) Rules, 2010, were not applicable, unless government interest was at stake or where person was involved in fraud against foreign banks and reputable companies with significant foreign investment or if it was shown that person was involved in heinous crime or in drug trafficking---Nothing was available on record that petitioner had committed any fraud with respondent banking company nor there was any such allegation against him of such nature---Suit relied upon by respondent banking company was simpliciter a case of financial liabilities which were secured against tangible security and the same had been liquidated against principal borrower and liability, if any, against petitioner was shown to be less than Rs.100 million---Unless such liability was shown against petitioner, as per Exit from Pakistan (Control) Rules, 2010, name of petitioner could not be placed on Exit Control List---High Court directed the authorities to delete the name of petitioner from Exit Control List, as there was no justification for the same---Petition was allowed in circumstances.

Hashmat Ali Chawla v. Federation of Pakistan and others PLD 2003 Kar. 705; Zia Mohyuddin v. Additional Director (Emigration) Fedral Investigation Agency Airport, Karachi and others PLD 2010 Lah. 128 and Zurash Industries (Pvt.) Ltd. v. Federation of Pakistan and 3 others 2011 CLD 511 ref.

Malik Altaf Javed and Malik Naeem for Petitioner.

Muhammad Ashraf Khan Mughal, D.A.-G. for Respondent No.1.

Muhammad Aslam, Additional Director and Mudasar Latif, Assistant Director for Respondents Nos. 2 and 3.

Date of hearing: 29th September, 2011.

2012 C L D 141

[Sindh]

Before Salman Hamid, J

NIB BANK LTD.---Plaintiff

Versus

DEWAN TEXTILE MILLS LTD.---Defendant

Suit No. B-128 of 2010, decided on 30th May, 2011.

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

----S. 10---Leave to defend the suit---Substantial question of law or fact---Scope---Simple denial of payment does not by itself raise a substantial question of law or fact, mandate of S. 10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, or even a plausible case.

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

----S. 10---Civil Procedure Code (V of 1908), O.XXXVII, R.2---Recovery of money---Leave to defend the suit---Pre-condition---Defendant cannot appear and defend the suit under the provisions of O.XXXVII, R.2, C.P.C. unless he obtains leave from judge, whereas under the provisions of S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it is mandated that substantial questions of law and facts must be alive, which constitutes, "substantial questions of law and fact"---Defendant having overcome such hurdle becomes entitled to leave.

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

----Ss. 9 & 10---Recovery of bank loan---Leave to defend the suit---Restructuring of loan---Defendant did not deny availing of finance facility and contended that finance facility extended in year, 2007, was nothing but renewal of running finance facility previously granted and defendant never agreed to the same---Validity---Restructured amount was always an admitted and acknowledged amount by borrower and no disbursement was involved in such restructuring which was distinct and different from fresh finance, where disbursement was pivotal---Restructuring of borrower's liability was an accommodation and latitude extended by financial institution---No case for leave was made out and application for leave to defend the suit by defendant was dismissed--- Suit was decreed accordingly.

Azmat Wali v. Hassan Al-Adawai and 2 others 1983 CLC 546; Fine Texile Mills Ltd. Karachi v. Haji Umer PLD 1963 SC 163; Habib Bank v. Qayoom Spinning Ltd. 2001 MLD 1351 and Muhammad Arshad and another v. Citibank NA 2006 CLD 1011 ref.

Taimoor Mirza for Plaintiff.

Munir A. Malik for Defendant.

2012 C L D 170

[Sindh]

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

HABIB BANK LIMITED and others---Appellants

Versus

RAFIQ AHMED and others---Respondents

First Appeals Nos. 39 and 47 of 2008, decided on 3rd October, 2011.

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

----Ss. 9 & 22---Qanun-e-Shahadat (10 of 1984), Arts. 48, 65, 74 & 76---Recovery of bank loan---Report of Chartered Accountant---Effect---Suit filed by bank was decreed in its favour on the basis of report prepared by Chartered Accountant appointed by Banking Court to examine the accounts of bank---Banking Court, after going through tabulated figures and conclusion arrived at in the Chartered Accountant's report, observed that assessment of accounts had thoroughly been made by Chartered Accountant, as he had dealt in details each and every transaction of three accounts maintained by defendants with bank and such figures were not controverted by bank during cross-examination---Banking Court further held that while dealing with accounts, entries from Books of Accounts and Registers made for the purposes of calculations, were in accordance with Arts.74 and 76 of Qanun-e-Shahadat, 1984---Validity---Conclusion arrived at after affording extensive cross-examination of Chartered Accountant and opinion arrived therein fell within the parameters of Arts. 48 and 65 of Qanun-e-Shahadat, 1984---Bank failed to point out any error either in the observation and conclusion drawn by Chartered Accountant in his report, nor any illegality had been pointed out in the judgment and decree passed by Banking Court, which otherwise was based on proper reading of evidence and sound principles of law---Division Bench of High Court, in High Court appeal, did not find any error in the judgment and decree passed by Banking Court, which was otherwise based upon report of an expert, whereas neither bank nor defendants could refer to any document or evidence which could possibly justify any interference in the judgment---Appeal was dismissed in circumstances.

United Bank Limited v. Messrs Central Cotton Mills Ltd. and 5 others 2001 MLD 78; Banque Indosuez v. Banking Tribunal for Sindh and Balochistan and others 1994 CLC 2272; Trinity Private School and another v. Mumtaz H. Hidayatullah and others 1997 SCMR 494; Habib Bank Limited v. Service Fabrics Ltd. and others 2004 CLD 1117; Messrs Dadabhoy Cement Industries Limited and others v. Messrs National Development Finance Corporation 2002 CLC 166; Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation, Karachi PLD 2002 SC 500; Government of N.-W.F.P. v. Hussain Khan and others 2004 CLC 1229; Syed Iqbal Hussain v. Mst. Sarwari Begum PLD 1967 Lah. 1138; Zaheer-ur-Din v. Mst. Khurshida Begum 1996 CLC 580; M.A. Khan v. Mst. Masooda Shaheen 1981 CLC 1358; Darbar Khan Talukdar and others v. Babu Apurba Kumar Hazra and others PLD 1959 Dacca 26; Chandan Mull Indra Kumar and others v. Chiman Lal Girdhar Das Parekh and others AIR 1940 Privy Council 3; Bhawani Sahai Saliq Ram v. Chhajju Mal and others 1937 Allahabad 276; B.B. Harjimal and Sons v. Firm of Dhampatmal AIR 1921 Sind 42; Haji Fazal Elahi and Sons v. Bank of Punjab 2004 CLD 162; Samar Gul v. Central Government and others PLD 1986 SC 35; Syed Niamat Ali and 4 others v. Dewan Jairam Dass and another PLD 1983 SC 5; Mehar Din v. Dr. Bashir Ahmed Khan 1985 SCMR 1 and Habib Bank Limited v. Al-Jalal Textile Mills Ltd. 2003 CLD 1007 distinguished.

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

----S. 9---Civil Procedure Code (V of 1908), O.XII, R. 6---Recovery of loan--- Admission--- Scope--- Admission necessarily has to be unequivocal, clear, unconditional and unambiguous---Such admission should not only be in respect of amount but liability to pay the same to plaintiff.

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

----S. 9---Recovery of loan---Plaint---Necessary facts---Plaintiff bank was to state his claim in plaint by specifying amount of finance availed by defendant from financial institution; amounts paid by defendant to financial institution and debits of payments; and amount of finance and other amounts relating to finance payable by defendant to financial institution upto the date of institution of the suit and supporting evidence.

Macdonal Layton and Co. Pak. Ltd. v. Uzin Export-Import Foreign Trade Co. 1996 SCMR 696 rel.

Nadeem Akhtar for Appellants.

Tasawar Ali Hashmi for Respondents.

Date of hearing: 22nd August, 2011.

2012 C L D 189

[Sindh]

Before Salman Hamid, J

NATIONAL BANK OF PAKISTAN---Plaintiff

Versus

Messrs APOLLO TEXTILE MILLS LIMITED and 4 others---Defendants

Suit No. B-115 and C.M.As. Nos. 7950, 7951, 7952, 11614 of 2009, decided on 9th June, 2011.

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

----Ss. 9(2) & 10---Recovery of bank loan---Leave to defend suit---Statement of accounts---Defendants, application for leave to defend the suit did not deny having taken the loan---Plea raised by defendants was that statement of accounts provided by bank did not fulfil requirement of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and the suit was not filed by authorized persons---Validity---Bank gave statement of accounts in sufficient detail and break-up, not only therein but also in the body of plaint, and the same had met the requirements of S. 9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, as the requisite information was ably communicated to the defendants---Documents attached with plaint showed that the suit was competently filed---No substantial question of law and facts was raised by defendants in their application for leave to defend that required recording of evidence for which leave was necessary---Defendants had also admitted their liability and no case for leave was made out--- Application was dismissed in circumstances.

C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587; Bank of Punjab through Manager v. Mrs. Mah Tallat Sultan and another 2006 CLD 773; National Bank of Pakistan through Manager v. Messrs Mujahid Nawaz Cotton Ginners through Partners and 6 others 2007 CLD 678; Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others 2010 CLD 65 and Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited and 3 others 2011 CLD 408 ref.

Saleem Iqbal for Plaintiff.

Farogh Nasim for Defendants Nos. 1 to 3.

Ghulam Murtaza for Defendant No. 4.

Date of hearing: 26th May, 2011.

2012 C L D 194

[Sindh]

Before Gulzar Ahmed and Muhammad Tasnim, JJ

Mst. KHALIDA KHATOON and another---Appellants

Versus

ASKARI BANK LIMITED and 2 others---Respondents

First Appeal No. D-85 of 2011, decided on 5th August, 2011.

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

----Ss. 3 & 5---Condonation of delay---Principles---Delay of each day is to be explained---Mandatory duty under S.3 of Limitation Act, 1908, has been imposed upon court to dismiss a suit, appeal or application, if it has been instituted after prescribed period of limitation---Party wishing to take advantage of S.5 of Limitation Act, 1908, must therefore, satisfy the court that it was not negligent and had been prosecuting its case with due diligence and care.

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

----S. 5---Limitation---Condonation of delay---Negligence of counsel---Effect---Negligence of counsel is negligence of party because he is agent of the party---Gross negligence on the part of counsel, while the party may have a good case for proceeding against him, cannot form a ground for extension of time under S.5 of Limitation Act, 1908---Party wishing to take advantage of S.5 of Limitation Act, 1908, must satisfy the court that it has not been negligent rather had been pursuing his case with due diligence and care and was not inactive.

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

----S. 5---Condonation of delay---Old age has not been considered as a ground for condonation of delay under S.5 of Limitation Act, 1908.

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

----S. 22---Limitation Act (IX of 1908), S. 5---Appeal---Condonation of delay---Expression "sufficient cause"---Pre-condition--- Appellants contended that counsel representing them did not inform them about passing of judgment and decree by Banking Court against them---Validity---In order to have benefit of S. 5 of Limitation Act, 1908, it was the duty of appellants to explain delay that elapsed beyond the period allowed by law for filing the appeal---Existence of "sufficient cause" was condition precedent for exercise of discretion under S.5 of Limitation Act, 1908---Expression "sufficient cause" was a cause which was beyond the control of party invoking aid of S.5 of Limitation Act, 1908---Cause of delay which, by due care and attention, the party could have avoided, could not be a "sufficient cause"---The test of whether or not a cause was sufficient was to see whether it could have been avoided by the party by exercise of due care and attention; whether it was a bona fide cause---Nothing was to be deemed to be done bona fide or in good faith which was not done with due care and attention---Appellant failed to make out a case for condonation of delay in filing of appeal---Appeal was dismissed in circumstances.

?????? Jhanda v. Maqbool Hussain and others 1981 SCMR 126; Sher Muhammad v. Said Muhammad Shah 1981 SCMR 212; Mustafa v. Settlement Commissioner, Bahawalpur Division, Bahawalpur 1974 SCMR 104 and Saddiqunnisa v. Khan Sahib Agha Muhammad Sultan Mirza and others PLD 1972 Kar. 103 ref.

?????? Faisal Shahzad Malik for Appellants.

?????? Respondents in person.

?????? Date of hearing: 4th August, 2011.

2012 C L D 212

[Sindh]

Before Salman Hamid, J

NIB BANK LTD. through Authorized Attorney---Plaintiff

Versus

SHADMAN ELECTRONIC INDUSTRY (PVT.) LTD. and 2 others---Defendants

Suit No. B-127 of 2009 and C.M.As. Nos. 9684 of 2009, 4701 of 2010, decided on 28th April, 2011.

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

----S. 10---Recovery of bank loan---Application for leave to defend the suit was moved during pendency of suit by the defendant---Defendant did not deny having taken the loan but only relied upon a suit filed by him against the bank---Validity---Mere filing of suit for accounts by defendant / borrower did not mean and form valid, good or substantial ground for leave---Defendant had to stand on his own legs and to make out a case for leave to defend it---No substantial question of law and facts was raised by defendant---Only by passing amounts claimed by plaintiff had been denied, that too by taking the stand that suit against bank was pending, was not sufficient to claim leave---Application was dismissed in circumstances.

Ms. Sofia Saeed Shah for Plaintiff.

Moin Azhar Siddiqi for Defendants.

Date of hearing: 22nd February, 2011.

2012 C L D 218

[Sindh]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

Messrs HABIB BANK LIMITED---Appellant

Versus

BANKING COURT NO.II and 2 others---Respondents

Ist Appeal No. 37 of 2010, decided on 1st April, 2011.

(a) Words and phrases---

----"Obiter dictum/dicta" Definition

Habib Bank Ltd. and another v. Wasim Enterprises and others 2007 CLD 473 ref

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

----Ss. 19 & 22---Execution of decree for recovery of suit amount passed against defendants jointly and severally limiting liability of defendant-mortgagor to amount secured and shown in Memorandum of Deposit of Title Deeds plus all service charges and cost etc.---Auction of mortgaged property--- Application by defendant-mortgagor that from sale proceeds of mortgaged property, only amount secured by such Memorandum could be recovered and not beyond that---Acceptance of such application by Executing Court---Decree-holder's plea that decree was passed against both defendants jointly and severally; and that Executing Court had gone beyond decree by accepting such application as observations of Banking Court made in decree limiting liability of defendant - mortgagor to the extent of amount secured and shown in such Memorandum were not a substantive decision and were liable to be ignored---Validity---­Such observations of Banking Court, being in nature of a proviso restricting application of main statute, had restricted earlier part of judgment whereby liability of both defendants had been held to be joint and several---Such observations were not only part of substantive order, but qualified as such---Decree-holder had not appealed against such decree---Executing Court by accepting such application had not gone beyond decree and committed any illegality--- High Court dismissed appeal in circumstances.

Habib Bank Ltd. and another v. Wasim Enterprises and others 2007 CLD 473; Habib Bank Ltd. v. Iftikhar Ahmed and 7 others 1993 CLC 535; Blacks Law Dictionary; Hyderabad Development Authority v. Abdul Majeed and others PLD 2002 SC 84; Najmul Hassan Ata and 4 others v. Habib Bank Limited through President and 5 others 2006 CLD 1506 and Ist Appeal No.46 of 2005 ref.

(c) Execution---

----Executing Court, powers of---Scope---Executing Court could not go beyond decision in original judgment and decree.

Habib Bank Ltd. and another v. Wasim Enterprises and others 2007 CLD 473 fol

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

----Ss. 9 & 22---Civil Procedure Code (V of 1908), S. 34-B---­Decree in suit for recovery of loan amount---Non-granting of interest on suit amount by Banking Court in terms of S. 34-B, C.P.C.---Validity---Grant of such interest was a mandatory right of loan giving agency---Decree-holder in such case would have a remedy to file appeal against such omission of Banking Court.

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

Sadruddin Hudda for Appellant

Aftab Hussain Soomro for Respondent No.2

Date of hearing: 25th March, 2011.

2012 C L D 226

[Sindh]

Before Salman Hamid, J

ARC INTERNATIONAL through Authorized Signatory---Plaintiff

Versus

AHMER MANSOOR and 2 others---Defendants

Suit No. 166 and C.M.A. No. 1096 of 2011, decided on 17th June, 2011.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 2(xii), 40, 67 & 86---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), S. 54--- Infringement and protection of trade mark, deception and unfair competition--- "Deceptively Similar"---Test---Expressions "of well known worldwide"---Criteria---Interim injunction, grant of--- Plaintiff, a French company of glassware and household items was owner of trade mark "LUMINARC" with an impression showing an Archer device, since year, 1948--- Grievance of plaintiff was that the defendants deceptively used trade mark "LUNIMARC" with an impression showing an Archer device in reverse position---Plea raised by plaintiff was that it was owner of well known trade mark and defendants were manufacturing products under the imitated trade mark causing deception to consumers and unfair competition---Validity---Defendants were trying to pass off their goods firstly by using well known trade mark of plaintiff and secondly it was also mentioned to mislead the consumers that the product was of plaintiff made in France---Test of "deceptively similar" under S. 2(xii) of Trade Marks Ordinance, 2001, was such near resemblance between it and another trade mark that it was likely to deceive or cause confusion---Trade mark of defendants, on the face of it, was deceptively similar in relation to trade mark of plaintiff which resemblance between plaintiff's trade mark and defendants trade mark would likely to deceive and cause confusion in common consumers' mind---Prima facie, defendants had also fallen prey to the provisions of S. 67(f) and (g) of Trade Marks Ordinance, 2001---Imitated word "LUNIMARC" was deceptively similar not only in spelling by also phonetically and was invariably also pronounced to be read as "LUMINARC", a well known name / word associated with plaintiff, used by it internationally since 1948 and same was the position with Archer device---Prima facie, the intent of defendants was to cash on from plaintiff's well known trade mark, and the same was not permissible under the provisions of Trade Marks Ordinance, 2001---Plaintiff for the purposes of injunction, had shown prima facie that its trade mark was well known worldwide---Criteria of "or well known worldwide" at interlocutory stage had been met and basic test of prima facie case was achieved by plaintiff---Peculiar embodiment of S.86 of Trade Marks Ordinance, 2001, was quite liberal when it came to be gauged from plaintiff's point of view---High Court confirmed interim injunction---Application was allowed in circumstances.

Soneri Travel and Tours Ltd. v. Soneri Bank Limited 2011 CLD 193 rel

Moin Qamar and Ms. Amna Salman for Plaintiff

M. Husain Tabassum for Defendants Nos. 1 and 2

Sibtain Mehmood for Defendant No.3

Date of hearing: 1st June, 2011.

2012 C L D 239

[Sindh]

Before Gulzar Ahmed and Muhammad Ali Mazhar, JJ

Messrs UNITED BANK LIMITED through Attorneys and 2 others----Appellants

Versus

Messrs PLASTIC PACK (PVT) LIMITED and 4 others----Respondents

First Appeal No.35 of 2009, decided on 11th November, 2011.

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

----S. 151---Inherent jurisdiction---Object, scope and extent---Court has inherent powers under S.151, C.P.C. to make such orders as may be necessary for the ends of justice and to prevent abuse of the process of the court---Such are enabling provisions and powers thereunder can be exercised by court to cover ostensibly impossible situations for complete dispensation of justice, for which Civil Procedure Code, 1908, has been designed but despite the best efforts of draftsman to cater for all possible situations, if it is found lacking in meeting some eventualities, the court can act ex delicto justitia, supply the omission in the procedure, adopt methodology for effectually carrying out the purpose in view.

PLD 1993 SC 418 rel.

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

----Ss. 48, 151, O.IX, Rr.8 & 9---Execution application, restoration of--- Inherent powers--- Applicability---Provision of O.IX, R.9, C.P.C. is designed for restoration of suit wholly or partly dismissed under O.IX, R.8, C.P.C. and it does not speak anything about restoration of application dismissed in default---Absence of necessary provisions do not necessarily lead to absence of jurisdiction in a civil court for restoration of execution application dismissed in default upon proof of sufficient cause---Execution application can be restored in exercise of inherent powers.

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

----S. 22---Civil Procedure Code (V of 1908), Ss.48, 151, O.IX, Rr. 8 & 9--- Appeal--- Execution application, restoration of--- Inherent jurisdiction--- Execution application filed by decree holder was dismissed for non-prosecution and application for restoration of execution was also dismissed for non-prosecution, thereafter application for restoration of the application for restoration was also dismissed for non-prosecution---Held, while deciding second restoration application, Executing Court was only obliged to see whether any case was made out for restoration of earlier application but instead of considering the crucial question whether any sufficient cause had been made out or not, second restoration application was dismissed without considering the reasons for non-appearance mentioned in personal affidavit of the counsel filed in support of restoration of application---High Court set aside the order dismissing second application for restoration of execution application and the same was restored to its original position---Appeal was allowed accordingly.

Abdul Haleem Siddiqui for Appellant

Nemo for Respondents

Date of hearing: 11th November, 2011.

2012 C L D 252

[Sindh]

Before Salman Hamid, J

ZULFIQAR HUSSAIN and 2 others---Petitioners

Versus

BAMBINO (PVT) LIMITED through Chief Executive Officer---Respondent

J.M. No. 50 of 2010, decided on 23rd May, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 305 & 309---Winding up of company---Losses to company---Petitioner sought winding up of company on the ground that the company was incurring losses every year---Notices were issued to the company through bailiff, courier, publication and official gazette and was duly served---Despite service, there was no response, reply or rebuttal by the company---Validity---Auditors of the company had also expressed their opinion that there was material uncertainty about the company's ability to continue as a going concern---Despite service the respondent/company did not come forward to dispute or deny the allegations as raised in the petition---High Court directed winding up of the company and official liquidator was appointed to take further actions according to law--- Petition was allowed accordingly.

Ladali Prasad Jaiswal v. The Karnal Distiller Co. Ltd. PLD 1965 SC 221; Mst. Qamar Loan and 5 others v. Kashmirian (Pvt.) Ltd. and 6 others PLD 1997 Kar 376; Muhammad Shabbir Khan and others v. Muhammad Anwar 1988 CLC 1955; Mst. Khursheed Ismail and others v. Uni Chem Corporation (Pvt.) Ltd. and others 1996 SCLC 1863; Nagina Films Ltd. v. Usman Hussain and others 1987 CLC 2263; Mansoor Ali Bandeali v. Marine Foods Industries Ltd. and others 1985 CLC 1239; Ebrahim's case (1973) AC 360; Jehan Khan v. Province of Sindh and others PLD 2003 Kar. 691; Mehmood-ul-Hassan and another v. Baig Industries Pvt. and others 1997 CLC 1577 and Sheikh Mazhar Ali v. Lasani Straw Board Mills Pvt. Ltd. and 4 others 2003 CLD 1494 ref.

Aijaz Ahmed for Petitioners

Nemo for Respondent

Date of hearing: 13th May, 2011.

2012 C L D 263

[Sindh]

Before Salman Hamid, J

DAWOOD ISLAMIC BANK LIMITED---Plaintiff

Versus

ADMORE GAS (PVT.) LIMITED and 6 others---Defendants

Suit No.B-195 of 2010, decided on 23rd May, 2011.

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

----S. 9---Recovery of bank loan---Mark up on mark up---Despite notices issued to defendants, they did not file application for leave to defend the suit---Nothing was available on record whereby it could be deduced that amounts claimed by bank were not due and payable by defendants to bank, more particularly when legal notice was sent, despite receipt by defendants, was not responded to and liability mentioned therein was not disputed or denied---Defendants had only mentioned that they would revert back to it in due course of time---Validity---Principal outstanding amount and agreed profit together with cost of funds as calculated by plaintiff was accepted against Murabaha facility and Ijarah facility---Charity against Murabaha and Ijaraha facility was declined inasmuch as the same was nothing but mark up on mark up and could not be allowed in any form---Suit of bank was decreed to the extent of amounts mentioned in statement of summary of accounts minus charity mentioned against Murabaha and Ijarah finance--- Suit was decreed accordingly.

Muhammad Masood Khan for Plaintiff

Nemo for Defendants

Date of hearing: 13th May, 2011.

2012 C L D 267

[Sindh]

Before Muhammad Athar Saeed and Irfan Sadaat 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.

Arbitration Act (X of 1940)---

----S. 34---Export Processing Zones Authority Ordinance (IV of 1980), S.24---Civil Procedure Code (Amendment) Ordinance (X of 1980), S.15---Specific Relief Act (I of 1877), S.42---High Court appeal---Suit for declaration---Arbitration clause---Stay of proceedings---Basis of dispute, non-mentioning of---Single Judge of High Court, on application by defendant Authority, stayed the proceedings of suit filed by plaintiff and referred the matter to arbitrator---Plea raised by plaintiff was that basis of dispute was not mentioned in the arbitration clause of agreement between the parties, therefore, application should have been stayed---Validity---Suit was filed not on the basis of agreement between the parties but was covered by Export Processing Zones Authority Ordinance, 1980, therefore, it was not necessary that disputes were specifically highlighted as from reading of all pleadings---As to what the dispute was and that whether such disputes were covered by arbitration clause in Export Processing Zones Authority Ordinance, 1980, or not was clear, and as the dispute was covered by arbitration clause, therefore, arbitration application was rightly allowed by Single Judge of High Court---Division Bench of High Court declined to interfere in the order passed by Single Judge of High Court---High Court appeal was dismissed. [p. 275] A

Novelty Cinema, Lyalpur v. Firdaus Films and another PLD 1958 (WP) Lah, 208 distinguished

Muhammad Yousuf Burney v. S. Muhammad Ali 1983 CLC 1498; Messrs Cosmplitan Development Company v. Messrs SO DI.ME,-S.P.A. and another 1987 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; 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 and 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.

2012 C L D 276

[Sindh]

Before Munib Akhtar, J

KHALIL (PVT.) LIMITED through Authorised Officer---Plaintiff

Versus

m.v. WALES II and 3 others---Defendants

Admiralty Suit No. 32 of 2009 and C.M.As Nos. 495, 466 of 2010, decided on 11th October, 2011.

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

----O.XII, R.6---Judgment on admission---Scope---If a fact has been admitted, then court may (but is not bound to) give such judgment to which party concerned may be entitled on such admission--- Such judgment may be given without determining "any other question between the parties"---Court has to first establish what is the relevant admission of fact and admission must be clear, unambiguous, categorical and unconditional.

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

----S.3---Sales of Goods Act (III of 1930), S.37---Civil Procedure Code (V of 1908), O.XII, R.6--- Admiralty jurisdiction---Acceptance of goods---Judgment on admission---Dispute between the parties was with regard to supply of quantity of Marine Gasoline Oil---Plaintiff claimed to have supplied 96.36 Metric Tons of the Oil onto the defendant vessel, whereas defendant claimed to have received 83.8 Metric Tons of the Oil, on board---Plaintiff sought judgment on the basis of admission made by defendant to the extent of oil received by it on board---Validity---If a buyer had the option of rejecting the goods short supplied but if he did not do so and accepted the goods so delivered, then under the provision of S. 37(1) of Sales of Goods Act, 1930, the buyer was bound to pay to seller at the contractual rate--- Even if the defendants were correct and there was a short supply of Marine Gasoline Oil, it was clear that the quantity as supplied was in fact accepted and not rejected---High Court entered the judgment in favour of plaintiff for a sum of contractual amount to the extent of supply of the oil admitted by defendants and preliminary decree would follow--- Application was allowed accordingly.

Amir Bibi v. Muhammad Khurshid and others 2003 SCMR 1261 distinguished.

Macdonald Layton and Company Pakistan Ltd. v. Uzin Export-Import Foreign Trade Co. and others 1996 SCMR 696; Gerry's International (Pvt.) Ltd. v. Qatar Airways PLD 2003 Kar. 253 and Kassamali Alibhoy v. Shaikh Abdul Sattar PLD 1966 Kar 75 ref

Agha Zafar Ahmed for Plaintiff

Muhammad Nouman Jamali for Defendants Nos 1 and 2

Date of hearing: 6th September, 2011.

2012 C L D 285

[Sindh]

Before Muhammad Athar Saeed and Irfan Saadat Khan, JJ

MAZHAR BUTT---Appellant

Versus

UNITED BANK LIMITED and another---Respondents

Miscellaneous Civil Appeal No. 13 of 2010, decided on 13th June, 2011.

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

----S. 22---Civil Procedure Code (V of 1908), Ss. 96, 115, O.XXXIX, Rr.1, 2 & O.XLIII, R.1---Interlocutory order---Appeal---Maintainability---Civil Procedure Code, 1908---Applicability--- Scope--- Appellant sought interim injunction under O.XXXIX, R.1 and 2 C.P.C., which application was dismissed by Banking Court-­--Appellant assailed the order of Banking Court before High Court in appeal under O.XLIII, R. 1(r), C.P.C.---Validity---Financial Institutions (Recovery of Finances) Ordinance, 2001, was a special statute and Civil Procedure Code, 1908, even if its provisions were not specifically ousted by any section of the Ordinance the same was still a general law so far as banking matters were concerned---Prima facie, the provisions of S. 22 of Financial Institutions (Recovery of Finances) Ordinance, 2001, would prevail over the general law and sections providing for appeals and revisions under Civil Procedure Code, 1908, including O.XLIII, R. 1(r), S. 115 and S. 96, C.P.C.---If there was a bar for filing an appeal against an interlocutory order under S.22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, then it could not be circumvented by filing appeals or revisions under the provisions of Civil Procedure Code, 1908, even if orders of Banking Court had been made on application filed under any provision of Civil Procedure Code, 1908---High Court declined to circumvent the bar provided under S.22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, by filing revision under S.115, C.P.C. or appeal under O.XLIII, R.1(r), C.P.C. or under any of the provisions and such revision or appeal were not maintainable---Appeal was dismissed in circumstances.

Ms. Afshan Ahmed v. Messrs Habib Bank Limited and another 2002 CLD 137; Habib Bank Limited v. Messrs Indus Lenentose (Pvt.) Ltd. and others 2003 CLD 1788; Pakistan Fisheries Ltd. v. United Bank Ltd. PLD 1993 SC 109; Tri-Star Polyster Limited v. City Bank 2001 SCMR 410; Pakistan Industrial Credit and Investment Corporation Limited, Peshawar Cantt. and others v. Government of Pakistan through Collector Customs, Customs House, Jamrud Road, Peshawar and others 2002 SCMR 496; Messrs Tank Steel and Re-Rolling Mills (Pvt.) Ltd. Dera Ismail Khan and others v. Federation of Pakistan and others PLD 1996 SC 77; Mian Tahir-ul-Rafique v. City Housing 2005 MLD 26; Karachi Pipe Mills Limited v. Habib Bank Ltd. and another 2003 CLD 1487; Messrs Habib Bank Ltd. v. Messrs Bela Automotives Ltd. 2006 CLd 169; Muhammad Ayub Butt v. Allied Bank Ltd., Peshawar and others PLD 1981 SC 359; Marhaba Textile Ltd. v. Industrial Development Bank of Pakistan 2003 CLD 1822 and Rasu Food Industries and another v. Messrs Pakistan Industrial Leasing Cooperation Limited and others 2005 SCMR 1643 ref.

Ghulam Mohiuddin for Appellant

S.A.A. Hasni for Respondent No.1

Asif Ali for Respondent No.2

Muhammad Qasim, Standing Counsel for the Federation of Pakistan.

Saifullah, Assistant Advocate-General Sindh.

Mushtaq A. Memon as Amicus Curie

Dates of hearing: 12th April, 20th May and 1st June, 2011.

2012 C L D 332

[Sindh]

Before Salman Hamid, J

FAYSAL BANK LIMITED---Plaintiff

Versus

Messrs DEWAN TEXTILE MILLS LIMITED---DEFENDANT

Suit No. B-74 and C.M.A. No. 8880 of 2010, decided on 3rd June, 2011.

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

----Ss. 9 & 10---Recovery of bank loan---Leave to defend the suit---Substantial question of law and fact---Evidence, recording of---Defendant contended that no amount whatsoever was due and payable as facility under Murabaha Finance Agreement was not disbursed and Forced TR was paid off by defendant---Validity---Documents appended with plaint showed that principal amount under Murabaha Finance Agreement was Rs.150,000,000 and its resale price was Rs.154,974,658---Resale price having been settled, therefore, prima facie, plaintiff was not entitled to charge profit of Rs.9,768,164 of which no plausible explanation was available to plaintiff---What amount was actually due and payable under Forced TR, if compared with the figures mentioned in application and agreement for irrevocable documents was to be proved which was the application and agreement for irrevocable documents which showed that Forced TR of US$ 776,026.24 was created---If US$ were calculated at the rate of Rs.62.30 (conversion rate at the relevant time) it had come to Rs. 48,346,435 as against the same, plaintiff had mentioned that defendant had paid the amount towards such Forced TR to the extent of Rs.51,184,543 which also required reconciliation through evidence--- All such discrepancies having been raised by defendant had come within the pale of substantial questions of law and fact and required evidence and to prove the case, leave had become inevitable and the same was granted---Application was allowed in circumstances.

Taimoor Mirza for Plaintiff

Khalid Mehmood Siddiqui for Defendant

2012 C L D 364

[Sindh]

Before Syed Hasan Azhar Rizvi, J

M. YOUSUF ADIL SALEEM & CO. CHARTERED ACCOUNTANTS and 5 others---Plaintiffs

Versus

MUHAMMAD SALEEM and another---Defendants

Suit No.8 and C.M.As. Nos. 62 and 1048 of 2011, decided on 3rd October, 2011.

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

----S. 32---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration and injunction--- Interim injunction, grant of--- Partnership concern--- Retirement of partner---Procedure---Plaintiffs claimed that according to Circular Resolution defendants were suspended from management of the firm---Validity---Where partnership deed had provided mode of retirement, such mod should be adopted for retirement alone---If a thing was required to be done in particular manner then it must be done in that manner alone---Mode of retirement was provided in the partnership deed and case fell within the ambit of S.32(1)(b) of Partnership Act, 1932---Circular Resolution had not been passed by 3/4th majority of votes, as the defendants had 29.07% share in the partnership firm---Defendant was not only the partner of the firm but he was Deputy Managing partner as well as member of the Board---Managing partner or Deputy Managing partner was for a period of 5 years and it was prerogative of partners' general meeting to choose the Managing partner in case of demise or retirement of the Managing partner---Neither the Managing partner died nor taken retirement from the partnership firm, therefore, another partner could not become Chief Executive of the firm without having the post of Chief Executive in the partnership deed in question---Circular Resolution regarding suspension of defendants had been passed after passing of interim orders by civil court at other cities for which defendants had filed contempt application which was pending---Plaintiffs had no prima facie case and balance of convenience was also not in favour of plaintiffs as great inconvenience would be caused to defendants in exercising their legal rights to deal with the subject-matter as per law---No irreparable loss would be caused to plaintiffs, if injunction was refused because the loss, if any could be compensated in shape of damages---High Court declined to grant interim injunction in favour of plaintiffs---Application was dismissed in circumstances.

Inam Naqshband v. Haji Shaikh Ijaz Ahmad PLD 1995 SC 314; Bashir Ahmed and 3 others v. Muhammad Aslam and 6 others 2003 SCMR 1864; Iqbal Ahmad Sabri v. Fayyaz Ahmad and another 2007 CLC 1089; Nem Das and others v. Kunj Behari Lal and another AIR 1928 Oudh 424; Mian Muhammad Latif v. Province of West Pakistan PLD 1970 SC 180; S. Azhar-ul-Hassan Naqvi v. Mst. Hamida Bibi and 2 others 1979 CLC 754; Muhammad Ramzan v. Trustees of Port of Karachi 1990 CLC 1086; House Building Finance Corporation v. Shahinshah Humayun Cooperative House Building Society and others 1992 SCMR 19; Islamic Republic of Pakistan v. Muhammad Zaman Khan and others 1997 SCMR 1508; Messrs K.G. Traders and another v. Deputy Collector of Customs and 4 others PLD 1997 Kar. 541; United Bank Limited and others v. Ahsan Akhtar and others 1998 SCMR 68; Regional Commissioner of Income Tax Corporate Region Karachi v. Shafi Muhammad Baloch 1998 SCMR 376; Mushtaq Ahmed Sabto and others v. Federation of Pakistan and others 2001 PLC (C.S.) 623; Puri Terminal Ltd. v. Government of Pakistan and 2 others 2004 SCMR 1092; Messrs Maxim Advertising Company (Pvt.) Ltd. v. Province of Sindh and 4 others 2007 MLD 2019; M. Yousuf Adil Salim & Co. and 7 others v. Hamid Masood 2007 CLD 916; Chief Justice of Pakistan Iftikhar Muhammad Chaudhry v. President of Pakistan and others PLD 2010 SC 61; ERIN Estate, Galah Ceylon v. Commissioner of Income Tax, Madras AIR 1958 SC 779; Mrs. Dino Majekji Chinoy and 8 others v. Muhammad Matin PLD 1983 SC 693; Mst. Salma Jawaid and 3 others v. S.M. Arshad and 7 others PLD 1983 Kar. 303; Muhammad Matin v. Mrs. Dino Manekji Chinoy and others PLD 1983 Kar. 387; Balagamwala Oil Mills (Pvt.) Ltd. v. Shakarchi Trading A.G. and 2 others PLD 1990 Kar. 1; Imdad Magsi and others v. Karachi Water and Sewerage Board and others PLD 2002 SC 728; Hussain A. Haroon v. Mrs. Laila Sarfaraz and others 2003 CLC 771 and Justice Khurshid Anwar Bhinder and others v. Federation of Pakistan PLD 2010 SC 483 ref.

Syed Khurshid Sohail v. Aziz Hami and 4 others 1988 MLD 381 and Law of Partnership, 10th Edn. p.44 by Lindley rel.

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

----O. XXXIX, Rr.1 & 2---Interim injunction, relief of---Principles---Relief of injunction is discretionary and court is not bound to grant it in every case and it is not to be granted unless the court is satisfied as to its real need---Discretion is to be exercised in accordance with reasons and sound judicial principles---Court while dealing with application for grant of injunction has to look and to assess all circumstances obtaining the suit and moreso, to equitable relief---Discretion vested in a court of law has to be exercised judicially and equitably ensuring all the times, that twain of law and justice are adequately applied and administered.

Rasheed A. Rizvi, Ravi Pinjani and Laila Bhgatia for Plaintiffs Nos.3 and 5.

Munir A. Malik and Chaudhry Atif for Defendant No.2

Date of hearing: 11th May, 2011.

2012 C L D 396

[Sindh]

Before Munib Akhtar, J

PAKISTAN STEEL MILLS CORPORATION (PRIVATE) LIMITED---Plaintiff

Versus

KARACHI WATER AND SEWERAGE BOARD through Chief Executive and 2 others---Defendants

Suit No. 146 and C.M.A. No.9360 of 2007, decided on 2nd December, 2011.

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

----Ss. 42, 39 & 54---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 8---Plaintiff, a steel mill (public sector entity), in a suit for declaration, cancellation, injunction and damages, filed application seeking interim injunction against Water & Sewerage Board stating therein that for the purpose of its operations, the plaintiff needed huge quantity of water on a daily basis (running into millions of gallons per day), for which it was billed by the Water and Sewerage Board---Basic contention of the plaintiff was that the water being supplied to it came from, or belonged, to the Provincial Government and that the Water and Sewerage Board was not entitled to charge for the same and that in addition to the water charges claimed by the Board, it also charged for Sewerage and Conservancy and for fire fighting purposes, thus the bills raised and demands made from time to time by the Water and Sewerage Board had four distinct elements---Plaintiff's case was that (for the various reasons stated in detail) it was not liable to make payment to the Board in respect of any of said charges---Plaintiff also claimed that it was entitled to continued supply of water, thus the interim relief sought was that its water supply should not be disrupted for any alleged non-payment of the billed amounts---Validity---High Court disposed of the application in the terms that the Water and Sewerage Board, the City District Government and the Provincial Government were restrained from preventing, restricting or hindering the supply of water to the plaintiff in any manner interfering in or with the same subject to the terms that the plaintiff was liable to make payment of water charges as per the Agreement, and the Board was empowered to bill for and collect the same; that plaintiff and the Board shall be at liberty to compute the amount payable up to the date of present order on the stated basis, and if there had been (according to the plaintiff) any overpayment, or (according to the Board) any underpayment, then the concerned party shall be entitled to make an appropriate application for such orders as the court may deem appropriate; that Rs.200 million earlier deposited by the plaintiff and withdrawn by the Board shall be deemed adjustable against the water charges; that plaintiff shall continue to make timely payment of the water charges in terms of future billing---Water and Sewerage Board, City District Government Provincial Government were restrained from recovering demanding or collecting any amount by way of sewerage or conservancy charges, whether by way of arrears thereof as on the date of present order, or on account of any future billing---Future billing by the Board may continue to reflect these elements, and the plaintiff shall be entitled, without prejudice to its case, to deposit the billed amount(s) with the Nazir of the High Court, which amounts shall be dealt with in terms of such orders or directions as may be given by the court---If at all any such amounts were deposited, then the Nazir shall immediately invest the same in some profit bearing scheme---Plaintiff shall be obligated to make payment of the arrears of the "fire" element of the billing up to the date of present order, which payment shall be made in six equal monthly instalments (and payable each month thereafter accordingly), and which shall be deposited with the Nazir of the court---City District Government (or any successor entity) shall be entitled to withdraw the same by making an appropriate application to the court---Future billing by the Board shall not contain any such element, and the Board was restrained from in any manner collecting, demanding or recovering any such amount from the plaintiff---City District Government (or any successor entity) may recover, demand and collect the "fire tax" in future in accordance with any applicable law for the time being in force.

Karachi Municipal Corporation v. Karimi and Co. PLD 1967 Kar 371; Karimi and Co. v. Karachi Municipal Corporation 1974 SCMR 440; S.Z. Mehdi v. Government of Sindh and others 1990 CLC 352; ABN Amro Bank v. Karachi Water and Sewerage Board 2009 YLR 775; ABN Amro Bank v. Chairman, Karachi Water and Sewerage Board 2006 CLC 597 and Nazir Ali v. Karachi Water and Sewerage Board 2004 CLC 578 ref.

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

----S. 2(d)---Consideration---Act or omission which serves as the consideration for the promise, need not come from the promisee; it may move from "any other person".

(c) Precedent---

----Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law but governed and qualified by the particular facts of the case in which such expressions are to be found---Case is only an authority for what it actually decides and cannot be quoted for a proposition that may seem to follow logically from it.

Quinn v. Leatham [1901] AC 495 and Trustees of the Port of Karachi v. Muhammad Saleem 1994 SCMR 2213 ref.

Abdul Rehman for Plaintiff

Emad-ul-Hasan for Defendant No.1

Ali Azam for Defendant No.2

Khizar Zaidi, A.A.-G

Dates of hearing: 22nd September and 13th October, 2011.

2012 C L D 436

[Sindh]

Before Munib Akhtar, J

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN---Petitioner

Versus

Messrs TRANSMISSION ENGINEERING INDUSTRIES (PRIVATE) LTD. and 15 others---Respondents

J.M. No. 40 of 2002 and C.M.A. No. 594 of 2008, decided on 14th October, 2011.

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

----S. 39(3)---Bank claim, enforcement of---Attachment of property---Scope---Properties to be considered for the purposes of S.39(3) of Industrial Development Bank of Pakistan Ordinance, 1961, must be the properties of borrower itself---Exercise of attachment of properties cannot begin with the properties of other persons, if any, liable for payment of the finance, including guarantors; it is only, if all properties specified of the borrower appear insufficient for the purposes of S.39(3) of Industrial Development Bank of Pakistan Ordinance, 1961, then the matter can proceed on to a consideration of the properties of other persons which may be liable to attachment.

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

----S. 39(3)---Civil Procedure Code (V of 1908), S.151---Bank claim, enforcement of---Attachment of property---Pre-conditions--- Non-issuance of show-cause notice---Recalling of attachment order--- Suit was pending against borrower, with regard to recovery of credit facility and to enforce the claim of bank, properties of guarantor were attached under S.39 of Industrial Development Bank of Pakistan Ordinance, 1961---Borrower sought recalling of attachment order---Plea raised by the bank was that the application filed by borrower was beyond the period specified in S.39(7) of Industrial Development Bank of Pakistan Ordinance, 1961---Validity---Issuance of proper show-cause notice under S.39(6) of Industrial Development Bank of Pakistan Ordinance, 1961, was necessary condition for application of S.39(7) of Industrial Development Bank of Pakistan Ordinance, 1961, which was not a standalone provision but was in continuation of an act begun in terms of former subsection---Provisions of S.39(7) of Industrial Development Bank of Pakistan Ordinance, 1961, could not be invoked without a proper show-cause notice being issued, and it itself was a specific order making attachment absolute and such order was passed against the properties in question---No ad interim order of attachment of property of guarantor was made as contemplated by S.39(3) of Industrial Development Bank of Pakistan Ordinance, 1961, and order of attachment actually made was not in any case followed up by show cause notice required in terms of S.39(6) of Industrial Development Bank of Pakistan Ordinance, 1961---Non-compliance with requirements of S.39 of Industrial Development Bank of Pakistan Ordinance, 1961, having been made, therefore, order of attachment could be recalled---High Court recalled the order whereby properties of guarantor were attached for enforcement of bank claim---Application was allowed in circumstances.

Industrial Development Bank of Pakistan v. Allied Bank of Pakistan and another PLD 1986 SC 74 and Industrial Development Bank of Pakistan v. French Food Products (Pvt.) Ltd. and others 2009 CLD 93 distinguished.

Azizur Rehman for Petitioner.

Khalid Mehmood Siddiqui for Respondent No.1.

Muhammad Adnan for Respondent No.3.

Riaz Munir for Respondent No.8.

Date of hearing: 8th September, 2011.

2012 C L D 453

[Sindh]

Before Gulzar Ahmed and Salman Hamid, JJ

PAKISTAN HERALD PUBLICATIONS (PVT.) LTD. and 2 others---Appellants

Versus

KARACHI BUILDING CONTROL AUTHORITY through Controller of Buildings---Respondent

H.C.A. No. 122 of 2005, decided on 19th October, 2011.

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

----Preamble---Defamation---Object and scope---Defamation Ordinance, 2002, is a special law on the subject creating special remedies and also providing specific court for trial of cases and appeal--- Jurisdiction for trial of cases under Defamation Ordinance, 2002, was conferred on District Court.

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

----Ss. 2(bb) & 13 [as amended by Defamation (Amendment) Act (IX of 2004)]---West Pakistan Civil Courts Ordinance (II of 1962), S.7 [as amended by Sindh Civil Courts (Amendment) Ordinance, 2002]---Civil Procedure Code (Amendment) Ordinance (X of 1980), S.15---High Court appeal---Defamation suit---Trial---High Court, jurisdiction of---Suit for recovery of Rs.5 million was filed by plaintiff in High Court in exercise of original jurisdiction---Single Judge of High Court returned the plaint to plaintiff for filing the same before District Court--- Validity--- Jurisdiction with regard to District Court was not to be read as provided in West Pakistan Civil Courts Ordinance, 1962, where High Court had been conferred jurisdiction to hear suits exceeding value of Rs.15 million as a principal civil court of original jurisdiction---District Court was court of trial of cases under Defamation Ordinance, 2002, it would be the District Court and no other court including High Court and it was the appeal against final decision and decree of that court which would be heard by High Court--- Division Bench of High Court did not find any illegality in the order passed by Single Judge of High Court and the same was maintained---High Court dismissed the appeal in circumstances.

Rimpa Sunbeam Cooperative Housing Society Ltd. through Managing Director v. Karachi Metropolitan Corporation through Administrator PLD 2006 Kar. 444 ref.

Adnan Chaudhary for Appellants.

Ghulam Haider Sheikh for Respondent.

Date of hearing: 27th September, 2011.

2012 C L D 471

[Sindh]

Before Gulzar Ahmed and Salman Hamid, JJ

UNITED BANK LIMITED---Appellant

Versus

Messrs EXIM INTERNATIONAL and 7 others---Respondents

First Appeal No. 69 of 2005, decided on 27th September, 2011.

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

----Ss.9, 12 & 22---Qanun-e-Shahadat (10 of 1984), Art.84---Civil Procedure Code (V of 1908), S.12(2), O.VII, Rr.1(c) & 9(1A)(b)--- Suit for recovery of bank loan---Fraud---Proof---Comparison of signatures---Powers of court---Suit filed by bank was decreed ex parte against some of the defendants and execution was filed---Such defendants got ex parte decree set aside on the ground that they did not mortgage their properties resultantly suit filed by bank was dismissed---Validity---Mortgage deed in respect of properties showed name of one defendant as witness, whereas power of attorney of the same date showed that same defendant executed it on such date and some other person was shown as a witness---Such anomaly itself showed nothing but fraud and forgery and vitiated the two documents---Banking Court, on its own, under the provisions of Art.84 of Qanun-e-Shahadat, 1984, looked into the signatures of the defendant as available on mortgage deed and power of attorney, both of the same date and compared the same from the ones available on Vakalatnama, leave to defend application and other documents and came to the conclusion that signatures appearing on deeds and power of attorney were forged---Banking Court after looking into the matter had rightly dismissed the suit and judgment required no interference--- Appeal was dismissed in circumstances.

Asad Helepota for Appellant.

S. Abid Hussain Shirazi for Respondent No.4.

Abrar Hassan for Respondents Nos. 5, 7 and 8.

Nemo for Respondents Nos. 1 to 3 and 6.

Date of hearing: 27th September, 2011.

2012 C L D 483

[Sindh]

Before Gulzar Ahmed and Salman Hamid, JJ

Mst. ARIFA SHAMS through Special Attorney---Appellant

Versus

MUHAMMAD IMTIAZ AHSAN and 2 others---Respondents

High Court Appeal No.276 of 2010, decided on 12th October, 2011.

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

----Ss. 2(c), 2(d), 2(e) & 7(4)---Civil Procedure Code (V of 1908), O.VII, R.11---Law Reforms Ordinance (XII of 1972), S.3--- Intra court appeal--- 'Customer', status of---Determination---Jurisdiction of Banking Court---Scope---Plaintiff filed civil suit on the ground that loan guarantee alleged to him was based on his lost papers of property mortgaged with the bank---High Court in exercise of original civil jurisdiction rejected the plaint on the ground that matter pertained to the Banking Court---Validity---Plaintiff having executed loan guarantee, was "surety" within the definition of "customer" as contained in S. 2(c) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Obligation by virtue of S. 2(e) of Financial Institutions (Recovery of Finances) Ordinance, 2001, amongst others included mortgage and performance of an undertaking, therefore, again plaintiff fell within the pale of provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001, in as much as mortgage in respect of house in question was also created by plaintiff in favour of the bank---By virtue of S.7(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, it was only a Banking Court, which would decide whether plaintiff was 'customer' of bank or otherwise---Banking Court was the only forum where suit could have been preferred---Division Bench of High Court declined to interfere with the order passed by Single Judge of High Court--- Intra court appeal was dismissed in circumstances.

M. Nujeebullah Qureshi v. City Bank NA 2009 CLD 49 distinguished.

Aminuddin Ansari for Appellant.

Khadim Hussain Metlo and Muhammad Salim Thepdawala for Respondent No.1.

Ali Mumtaz Shaikh for Respondent No.2.

Nemo for Respondent No.2, the Province of Sindh.

Ashiq Raza, D.A.-G. on Court Notice.

Date of hearing: 12th October, 2011.

2012 C L D 491

[Sindh]

Before Munib Akhtar, J

Haji RIAZ AHMED through Attorney and another----Plaintiffs

Versus

Messrs HABIB BANK LIMITED through President and 2 others----Defendants

Civil Suit No.751 of 2009 and C.M.A. No. 8164 of 2011, decided on 25th November, 2011.

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

----Ss.16, 17, 20, 120 & O.VII, R.10---Territorial jurisdiction---Original civil jurisdiction of High Court---Scope---Customer of bank filed suit against bank at place "K", before High Court where head office of the bank was situated---Plea raised by defendant bank was that the concerned branch was located at place "P", in another Province, therefore, the suit should be returned for filing the same before appropriate court---Validity---Original civil jurisdiction of High Court must also be regarded as extending to the situation where the defendant ordinarily resided, or worked for gain, at place "K"---If a corporation had its principal office or head office at place "K", High Court at "K" would also have jurisdiction, and the same was regardless of whether the cause of action had accrued at place "K" or not---Any other view would necessarily result in a loss and curtailment of the court's jurisdiction and that was not a result that the law countenanced by applying S.120, C.P.C. to High Court---Head office of defendant bank was situated at place "K", therefore, it necessarily followed that plaintiff could bring the suit at place "K" and file it on the original side of High Court, notwithstanding that cause of action had accrued entirely at place "P"---High Court declined to return the plaint to plaintiff, as the court had jurisdiction in the matter---Application was dismissed in circumstances.

Muhammad Naveed Aslam and others v. Ayesha Siddiqui and others PLD 2010 Kar. 261; Muhammad Naveed Aslam and others v. Ayesha Siddiqui and others 2011 CLC 1176; Shaikh Muhammad Amin & CO. v. Provincial Industrial Development Corporation 1991 CLC 684; West Pakistan Industrial Development Corporation v. Fateh Textile Mills Ltd. PLD 1964 Kar. 11l; Wajid Hussain Farouqui v. Shahida Shahnwaz and others 2007 CLC 394; Gulfam and others v. Bibi Qudsia Begum and others 2003 CLC 1183; WAPDA and others v Mian Ghulam Bari PLD 1991 SC 780; Agricides (Pvt.) Ltd. v. Ali Agro Supply Corporation Ltd. 1988 CLC 59 and Muhammad Bachal v Province of Sindh and others 2011 CLC 1450 ref.

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

----Ss. 16, 17 & 20---Jurisdiction of courts---Discretion of court--- Scope--- One of the key requirements of jurisdictional rules is that the rules must be certain and this must be so, whether they are statutory in nature or judicially evolved---Such is so because such rules affect, regulate and control exercise of judicial power at the most fundamental level---Leaving matters to discretion of the court introduces, an unacceptable uncertainty in the law; all rules must of course be interpreted but that is an entirely different matter.

Raja Maroof Khan for Plaintiff.

Aziz-ur-Rehman for Defendant.

Date of hearing: 21st September, 2011.

2012 C L D 506

[Sindh]

Before Gulzar Ahmed and Salman Hamid, JJ

Messrs SHAHI TEXTILES and 4 others---Appellants

Versus

HABIB BANK LIMITED through President---Respondent

First Appeal No. 54 of 2010, decided on 18th October, 2011.

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

----S. 10--- Leave to defend---Provisions of S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001, are mandatory and non-compliance thereof is fatal.

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

----Ss. 9, 10 & 22---Suit for recovery of bank loan---Appeal---Plea not raised in application for leave to defend the suit---Banking Court passed judgment and decree in favour of bank after disposal of application for leave to defend the suit---Plea raised by defendant was that bank should have first presented the bills for clearance to foreign buyer and if the same were dishonoured, only then suit could be filed---Validity---Ground raised by defendants in appeal was not raised or even argued before Banking Court, therefore, such plea could not be allowed to be raised before High Court---Plea was factual and Banking Court had failed to appreciate and explore if the bills were presented for payment by the bank and if the same had been dishonoured or not and only if such was the outcome, then the suit could have been filed---No such ground having been raised in leave to defend application, appreciation or otherwise of the same was not possible by High Court---Judgment and decree passed by Banking Court was legal, apt to the facts and circumstances of the suit and did not call for any interference---High Court declined to dislodge the findings of Banking Court---Appeal was dismissed, in circumstances.

Veerappa Chetty v. Vellayan Ambalam and others AIR 1919 Madras 179; C.C. Sinha v. Bidhu Bhusan De and another AIR 1955 Calcutta 562 (V.42,C.175 Nov); Kanhyalal and others v. Ram Kumar and others AIR 1956 Rajasthan 129 (AIR V 43 C 40 Aug); F. Nanak Chand Ramkishan Das and others v. Lal Chand Ganeshi Lal and others AIR 1958 Punjab 222 (V.45 C 60); United Bank Ltd v. Taj Seafood Industries, Karachi and 4 others PLD 1975 Kar. 410; United Bank Limited v. Azmat Trading Co. (Pvt.) Ltd. and 5 others 2001 CLC 1172; Haji Abdullah Khan and others v. Nisar Muhammad Khan and others PLD 1965 SC 690; Lahore Cantt. Park View Cooperative Housing Society v. Muhammad Ishaq and others 2000 SCMR 39 and National Bank of Pakistan v. Shahyar Textile Mills Ltd. 2003 CLD 1370 ref.

S.A.A. Hasni for Appellants.

Arshad Tayyabaly for Respondent.

Date of hearing: 10th October, 2011.

2012 C L D 517

[Sindh]

Before Mushir Alam, C.J. and Nisar Ahmed Shaikh, J

FEROZE ABDUL KARIM---Appellant

Versus

MUSLIM COMMERCIAL BANK LTD. through Managing Director---Respondent

High Court Appeals Nos.176, 177 and 178 of 2009, decided on 12th October, 2011.

(a) Tort---

----Malicious prosecution--- Suit for compensation---Limitation---Rejection of plaint--- Suit for damages against alleged wrongful dismissal was filed after more than 9 years from the said dismissal order along with application under S.5 of Limitation Act, 1908 for condonation of delay---Grounds disclosed by the plaintiff for condonation of said inordinate delay in filing suit were far from satisfactory---Applications for condonation of delay were dismissed, in circumstances---Appeals, otherwise being barred by time, were dismissed, in circumstances.

Muhammad Yousuf v. Ghayyur Hussain Shah 1993 SCMR 1185 distinguished.

(b) Interpretation of statutes---

----Where special provision was applicable, general provision, would not apply.

1993 MLD 1550; 2002 YLR 3712 and PLD 2008 Kar. 25 rel.

Umer Hayat Sandhu for Appellant.

Imran Khan for Respondent.

2012 C L D 609

[Sindh]

Before Faisal Arab and Aqeel Ahmed Abbasi, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN through Attorney---Appellant

Versus

ABDUL LATIF CHANNA and 6 others---Respondents

Criminal Acquittal Appeal No. 161 of 2010, decided on 23rd November, 2011.

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

----S. 19---Criminal Procedure Code (V of 1898), Ss. 265-K & 417---Appeal against acquittal--- Application filed by three respondents under S.265-K, Cr.P.C. for acquittal was allowed by Banking Court---Allegation against the respondents was that machinery/plant for which loan was provided, was missing and the mortgaged property had been handed over to someone else on lease---Allegations of mis-utilization of the finance and the removal of machinery/plant were directed against one respondent---Counsel for the bank had contended that it was an admitted position that loan was obtained by said three respondents and they were liable for the criminal offence---Validity---Under the law, obtaining loan and inability to pay back the same was not a criminal offence---It could be a civil liability to be proceeded in civil forum provided under the law, but the commission of default in repayment of loan, would not give birth to a criminal offence---Machinery/plant had been removed which allegation was directed against one respondent only---Criminal proceedings against said respondent, in circumstances, would continue, whereas no useful purpose would be served, if remaining respondents were proceeded against; as there was no likelihood of their conviction, in the circumstances of the case.

Ainuddin for Appellant.

Dur Muhammad Shah for Respondents Nos. 1, 2 and 7.

2012 C L D 701

[Sindh]

Before Gulzar Ahmed and Salman Hamid, JJ

MUHAMMAD HAFEEZ---Appellant

versus

BANKING COURT NO.1, KARACHI

and 3 others---Respondents

First Appeal No.82 of 2011, decided on 20th September, 2011.

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

----Ss. 9, 19 & 22---Civil Procedure Code (V of 1908), S.12(2)---Suit for recovery of bank loan---Execution without intervention of court---Suit was decreed in favour of bank by Banking Court on the basis of agreement between the parties---Bank initiated execution proceedings under S.19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, against judgment debtors---Appellant contested execution of the decree on the ground that judgment debtors were not the owners of property under execution---Validity---As a ploy to defeat the decree and proceedings initiated by bank under S.19 of Financial Institutions (Recovery of Finances) Ordinance, 2001, appellant filed applications, all of which were dismissed by Banking Court by observing that earlier in time, the same advocate who had preferred applications on behalf appellant, also moved similar applications on behalf of some other person and that such applications had been dismissed by Banking Court with cost---Banking Court also dismissed the application on the ground that appellant had already preferred civil suit without impleading bank therein and by misrepresentation and twisting of facts ex parte injunction order was obtained, without disclosing that appellant or some other person was not the owner of the property---Civil suit in respect of property in question was pending adjudication before High Court, wherein bank had also made its appearance (by filing application under O.I, R.10, C.P.C.) and injunctive order against the bank and judgment debtors who were operating in the civil suit in favour of appellant in respect of property in question--- All allegations on either end would be looked into and thrashed out vis-a-vis title of the property through evidence therein, therefore, High Court declined to interfere in the order passed by Banking Court---Appeal was dismissed in circumstances.

Muhammad Shafiq for Appellant.

Ch. Muhammad Ali for Respondents No.4.

Date of hearing: 20th September, 2011.

2012 C L D 746

[Sindh]

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

NATIONAL BANK OF PAKISTAN---Appellant

versus

Messrs WHITE GOLD EXPORTERS (PVT.) LTD.

and 4 others---Respondents

H.C.A. No. 61 of 2007, decided on 30th November, 2011.

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

----Ss. 15, 19 & 22---Civil Procedure Code (V of 1908), O.XXI, R.58--- Civil Procedure Code (Amendment) Ordinance (X of 1980), S.15--- High Court appeal---Execution of decree---Objection to attachment of property---Investigation of claim--- High Court stayed execution of decree on the application filed by objector on the ground of pendency of suits against judgment debtor/bank---Validity---No stay was operating either in the suits filed by objector nor any appeal was pending against such judgment and decree---Objections filed by objector had already been dismissed whereas appeal against such order also met the same fate---Order passed by High Court as Executing Court restraining execution of banking judgment and decree amounted to review of its own order and negated effect of the order passed in appeal, and the same was not permissible in law---Order passed by High Court was in the nature of final order, whereby the entire execution proceedings had come to a "halt" since 6-3-2007, otherwise the order fell within the Exceptions provided under S.22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, hence appealable---Division Bench of High Court set aside the order passed by single Judge of High Court and directed the court to proceed with the execution of proceedings in accordance with law and dispose of the same within a reasonable period---Division Bench of High Court also directed that the pending suits of the objector should also be heard and disposed of on their own merits strictly in accordance with law---High Court appeal was allowed in circumstances.

Messrs Habib Bank Ltd. v. Messrs Bela Automotives Ltd. 2006 CLD 169; Nazir Ahmed Vaid and others v. Habib Bank AG Zurich 2005 CLD 1571; Messrs Huffaz Seamlen Pipe Industries Ltd. and 2 others v. Messrs Security Leasing Corporation Ltd. 2002 SCMR 1419; Malik Israr Salim v. Citi Bank NA Lahore and another 2003 CLD 588; Messrs Tri Star Polyester Ltd. v. Citi Bank 2001 SCMR 410 and Bolan Bank Limited v. Capricorn Enterprise (Pvt.) Ltd. 1998 SCMR 1961 distinguished.

Mrs. Seema Waseem for Appellant.

Mansoor-ul-Arfin and Muhammad Shafi Siddiqui for Respondent No.5.

Date of hearing: 31th October, 2011.

2012 C L D 764

[Sindh]

Before Syed Hasan Azhar Rizvi, J

FAISAL through L.Rs.----Plaintiffs

versus

Mrs. KHALIDA BANO and 2 others----Defendants

Suit No.1316 of 2004 and C.M.A. No.735 of 2006, decided on 16th November, 2011.

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

----S. 72---Specific Relief Act, (1 of 1877), Ss. 42 & 54---Suit for declaration and permanent injunction---Nomination by insurance policy holder---Error in court order---­Resemblance in names of insurance policy holder and nominee---Insurance policy was issued in the name of the deceased but due to resemblance in names of deceased and his mother, court while disposing of the suit, made the mistake of declaring that insurance policy was issued in the name of the deceased's mother, which deprived deceased's widow from her share of insurance policy and share of this minor child was reduced significantly---Insurance Corporation had filed written statement in which it categorically stated that deceased at the time of purchasing Life Insurance Policy nominated his mother as his nominee but after his marriage he changed his nomination and nominated his wife as his nominee---Neither the fact of filing written statement by Insurance Corporation was brought to the notice of the court nor any application for rectification/ recalling of erroneous order had been filed---Error having occurred into the assessment of shares of legal heirs of deceased, High Court in the interest of justice ordered issuance of notice to all the legal heirs of the deceased.

(b) Act of court---

----Error in court order---No one shall suffer on account of an error of court.

(c) Insurance---

----Insurance policy, benefit of---Interest of minors---Duty of court---Court is obliged to look after and protect interests of a minor on its own.

Abdus Salam Baloch along with Faisal one of the legal heirs for Plaintiffs.

Ms. Shabana Ishaq for Defendant No.1.

Date of hearing: 6th October, 2011.

2012 C L D 774

[Sindh]

Before Munib Akhtar, J

HABIB BANK LIMITED----Plaintiff

versus

Syed JAFFAR ABBAS----Defendant

Suit No.908 of 2003 and C.M.A. No.1433 of 2004, decided on 17th December, 2011.

Civil Procedure Code (V of 1908)---

----S. 13 & O.XI, R.1---Foreign judgment---Suit for recovery of bank loan---Interrogatories, delivery of---Plaintiff bank filed recovery suit against defendant on the basis of decree passed by a foreign court against same defendant and in favour of same plaintiff--- Defendant filed application under O.XI, R. 1, C.P.C. to serve interrogatories on plaintiff bank---Validity---All questions put to plaintiff bank by defendant related to evidence to be led by plaintiff---If at all, plaintiff bank would choose to lead evidence in respect of original cause of action, then defendant was entitled to cross-examine plaintiff's witnesses and to examine and challenge any document that they might produce and proposed questions could be put to such witnesses---No party was entitled to serve interrogatories to find out the facts constituting the other side's evidence and proposed questions of defendant fell in such category---Defendant should, therefore, wait for the trial to put such questions to plaintiff's witness, if the latter would choose to lead evidence on original cause of action---Inappropriate for defendant to serve proposed interrogatories on plaintiff bank at present stage---Application was dismissed in circumstances.

Hamza I. Ali for Plaintiff.

Akhtar Mehmood for Defendant.

Date of hearing: 13th December, 2011.

2012 C L D 796

[Sindh]

Before Syed Hasan Azhar Rizvi, J

NOBLE CHARTERING INC. through Attorney---Plaintiff

versus

AWAN TRADING COMPANY (PVT.) LTD.---Defendant

Suit No. 1434 of 2004, decided on 10th October, 2011.

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

----Ss. 2(1)(b), 4 (1)(2) & 5---Foreign award---Making of award rule of the court---Court, duties of---Scope---Dispute between the parties was decided by arbitrators under English law and award was announced---Plaintiff sought making the award rule of the court---Validity---High Court was not an appellate forum to re-examine final award within the parameters of provisions made available under Arbitration (Protocol and Convention) Act, 1937---Interference, if any, could only be warranted if the conditions surfaced the Arbitration (Protocol and Convention) Act, 1937---Defendant should have availed remedy in appeal available to it, which it did not avail---High Court by exercising powers could pass an executing order, not travelling beyond the final award---Final award having already been filed, same was made rule of the court by High Court and suit was decreed in terms of the final award accordingly.

Alfred C. Toepfer International GMBH v. Pakistan Molasses Company 2003 CLD 1666 and Messrs Continental Grains Co. v. Messrs Naz Brothers 1982 CLC 2301 ref.

A. H. Mirza and Ghulam Murtaza for Plaintiff.

Agha Zafar for Defendant.

Date of hearing: 8th September, 2011.

2012 C L D 832

[Sindh]

Before Gulzar Ahmed and Imam Bux Baloch, JJ

DATA STEEL PIPE INDUSTRIES (PVT.) LTD.---Appellant

versus

SUI SOUTHERN GAS CO. LTD. and others---Respondents

H.C.A. No.168 of 2011, decided on 15th November, 2011.

Public Procurement Rules, 2004---

----R. 29---Civil Procedure Code (Amendment) Ordinance (X of 1980), S. 15---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 54---High Court appeal---Suit for declaration---Application for grant of interim injunction---Plaintiff company assailed bidding process for supply of goods and claimed to be the lowest bidder---Single Judge of High Court declined to grant interim injunction in favour of plaintiff---Validity---Bidding process initiated by authorities was not violative of Public Procurement Rules, 2004, as the bid of the companies was the lowest one and authorities rightly accepted such bid---Order passed by Single Judge of High Court was well reasoned and there was no illegality or irregularity in the same, which could call interference by Division Bench of High Court--- High Court appeal was dismissed in circumstances.

Zayyad Khan Abbasi for Appellant.

Asim Iqbal and Farmanullah Khan for Respondent No.1.

Date of hearing: 21st October, 2011.

2012 C L D 866

[Sindh]

Before Salman Hamid, J

NASIR UDDIN SHAHAB---Applicant

versus

THE STATE---Respondent

Criminal Miscellaneous Application No.284 of 2011, decided on 21st December, 2011.

Criminal Procedure Code (V of 1898)---

----S. 561-A--- Penal Code (XLV of 1860), Ss.420/468/ 471/34---Cheating and dishonestly inducing delivery of property, forgery for purpose of cheating, using as genuine a forged document, common intention---Application for quashing of order---Complainant/ applicant had obtained financial facilities (loan) from the Bank, against which he provided a commercial building on a plot as collateral/security---Complainant provided the Bank with photocopies of title documents of other various immovable properties owned by him, to show his credit worthiness to obtain the financial facility---Bank subsequently sent a letter to the Sub-Registrar mentioning that such immovable properties were purchased by the complainant from the Bank's financial facilities and he had executed declarations in the name of the Bank, therefore, no registration of any deed for transfer of such immovable properties was to be accepted without issuance of 'no objection certificate' (NOC) from the Bank---Complainant lodged F.I.R. against the accused (bank officials) and on investigation report submitted by police under S.173, Cr.P.C., Magistrate agreed with the police report and approved F.I.R. as 'B' class---Contention of complainant was that Investigating Officer essentially based his findings on the handwriting expert's report with respect to complainant's signatures, seal on the declarations and stamp, which the Magistrate accepted mechanically without appreciating that such report of expert was contested; that accused were directly charged in the F.I.R. for the commission of forgery which they corroborated by producing forged agreements and expert evidence, therefore in view of the complexity of the case, trial was imperative; that Magistrate did not appreciate a report from a different Bank, which revealed that one of the said immovable properties was purchased by the complainant on a mortgage agreement, through said different bank, before obtaining the financial facilities, therefore question of purchase of said immovable property from financial facilities of the Bank did not arise, and that interest of Bank had already been fully secured by the commercial building on the plot which was kept as collateral/security---Validity---Accused had not disputed the fact that complainant sent the photocopies of title documents of immovable properties to show his creditworthiness---Expert evidence report obtained by the complainant showed dissimilarities in the stamp and signature---Letter written by the Bank to the Sub-Registrar mentioned that NOC had to be obtained from the Bank first in respect of immovable properties but said letter did not mention that the properties were mortgaged with the Bank, which showed that letter was written with ulterior motive---Material witnesses had not been examined by the Investigating Officer and his report was wrong to the extent that one of the immovable properties was purchased through a mortgage agreement with a different Bank---Magistrate had been impressed by the handwriting expert's opinion and did not appreciate the fact that there were other documents on record which showed tha the complainant never mortgaged the immovable properties mentioned in the declarations and the Bank's letter to the Sub-Registrar---Financial facility of the Bank had already been secured by the commercial building on the plot, which left no occasion for the complainant to mortgage other immovable properties with the Bank---Accused had apparently committed breach of trust by using the allegedly forged declarations against the complainant---Further examination of other witnesses and documents was required because of which it was not an open and shut case and required further probe, which was only possible if case proceeded further through trial---Impugned order of Magistrate being illegal, was set aside, and the case was sent for trial after restoration of the F.I.R.

Noor Muhammad v. The State 2005 SCMR 1958; Syed Muhammad Umer Shah v. Bashir Ahmed 2004 SCMR 1859; Anwar Ahmed v. Nafis Bano through Legal Heirs 2005 SCMR 152 and Ali Ahmed alias Ali Ahmed Mia v. The State PLD 1962 SC 102 ref.

Shafiq Ahmed Rizvi for Applicant.

Ali Haider Saleem, A.P.-G. for the State.

Jaffer Raza for Accused.

I.A. Hashmi for Bank Islami.

Date of hearing: 1st December, 2011.

2012 C L D 879

[Sindh]

Before Munib Akhtar, J

AHMED KULI KHAN KHATTAK---Plaintiff

versus

CREEK MARINA (SINGAPORE) PVT. LTD. through Chief Executive Officer and 5 others---Defendants

Suit No.911 and C.M.A. No.7630 of 2011, decided on 24th February, 2012.

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

----S. 2(35)---Sale of Goods Act (III of 1930), S. 2(3)---Shares in company---Legal nature---Scope---Shares of company are regarded as constituting a bundle of rights that shareholder has in, and against, company (and as appropriate against other shareholders as well)---Of these, by far the most, valuable rights are the rights to participate and vote in a members' meeting (such as the annual general meeting or an extraordinary general meeting) and to receive dividends--- Share certificates, in English Law are only evidence of a shareholder's title to such rights, whereas under Sale of Goods Act, 1930, share certificates are, in addition, goods as well.

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

----S. 2(35)---Sale of Goods Act (III of 1930), S. 2(3)---Shares in company---State of goods---Scope---State of goods in context of shares is not limited to their physical condition---Shares mean and include the document i.e. transfer deed duly executed by seller, without which buyer cannot enjoy benefit of goods that he is acquiring.

Official Assignee, Bombay v. Madholal Sindhu AIR 1947 Bombay 217 and Ghulam Mustafa v. Officer on Special Duty, Federal Land Commission and another 1984 CLC 824 ref.

(c) Sale of Goods Act (III of 1930)---

----S. 2(3)---Specific Relief Act (I of 1877), S. 12---Civil Procedure Code (V of 1908), O. XXXIX, Rr.1 & 2---Suit for specific performance of agreement to sell---Interim injunction, grant of---Shares purchase contract---Plaintiff and two others entered into agreement with defendant, for purchase of entire shareholding of defendant company--- Defendants resisted interim injunction on the plea that plaintiff failed to make payment in terms of agreement--- Validity--- Payment of a sum of USD 1.5 million under one clause of agreement was not in dispute--- Plaintiff claimed that another payment of USD 1.5 million under other clause of agreement was made but the same was denied by defendants---High Court for the purposes of application for interim injunction, proceeded on the basis that tentatively the payment was made by plaintiff---Plaintiff had made out a prima facie case and conduct of defendants in the matter and in relation to transaction and before High Court left a lot to be desired---Equities were in favour of plaintiff and against defendants---Undisputedly a large portion of sale consideration remained unpaid and therefore, defendants' interest must also be protected---High Court directed plaintiff to furnish bank guarantee in sum of USD 5.25 million or its equivalent Pakistani Rupees and interim injunction was granted---Application was allowed accordingly.

Guandong Overseas Construction Group Company Ltd. v. Creek Marina (Pvt.) Ltd. PLD 2011 Kar. 304; 2011 CLC 648; Seth Essabhoy v. Saboor Ahmed PLD 1972 SC 39; Jaffar Khan v. Muhammad Achar PLD 1961 Kar. 335; Ziaulkhalique and others v. Tanveer Ismail and others 1989 MLD 3940; Kulkarni v. Manor Credit (Davenham) Ltd. [2010] EWCA 69; [2010] 2 Lloyd's Rep 431; R.V. Ward Ltd. v. Bignall [1967] 2 All ER 449; Attorney-General of Belize v. Belize Telecom Ltd. [2009] UKPC 10 and [2009] 2 All ER 1127 ref.

Abid S. Zuberi with Muhammad Haseeb Jamali and Ayan M. Memon for Plaintiff.

Arshad Tayebaly with Amel Khan Kansi for Defendants Nos.1 to 5.

Dates of hearing: 30th September, 10th October, and 25th November, 2011.

2012 C L D 923

[Sindh]

Before Faisal Arab and Aqeel Ahmed Abbasi, JJ

OFSPACE (PRIVATE) LIMITED---Petitioner

versus

FEDERATION OF THE ISLAMIC REPUBLIC OF PAKISTAN through Secretary Ministry of Finance Islamabad and 3 others---Respondents

Constitutional Petition No.D-740 of 2011, decided on 5th January, 2012.

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

----Ss. 231, 476 & 484---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 33---Constitution of Pakistan, Art. 199---­Constitutional petition---Inspection of books of account of company---Order of Securities and Exchange Commission for making such inspection passed on basis of written complaint of Directors/shareholders regarding delayed payment of dividends by company---Petitioner's plea that before passing such order, he was neither issued show-cause notice nor provided an opportunity of hearing---Validity---Exercise of powers under S.231 of Companies Ordinance, 1984 by Commission was administrative in nature and limited to inspection and conducting of preliminary inquiry into affairs and accounts of a company---Legislature had neither provided for issuance of show-cause notice before invoking provision of S.231 of Companies Ordinance, 1984 nor could same be read therein as no adverse action was stipulated therein---Registrar or authorized officer of the Commission, in order to ensure compliance of provisions of Companies Ordinance, 1984 could invoke provision of S. 231 thereof against a company by assigning reasons in writing---Mere issuance of an administrative order or inspection of accounts by Registrar or authorized officer would neither require any show-cause notice or hearing nor amount to an adverse order against a company---­Defaulting company would be entitled to a show-cause notice and/or right of hearing before invoking any consequential provisions of Companies Ordinance, 1984 in case of violation and non-compliance of its provisions--- Impugned order was not illegal or mala fide---Person aggrieved by an order other than an order under S. 476 of Companies Ordinance, 1984 could challenge same by filing revision before Commission under S.484 thereof, and he could abandon or bypass such statutory remedy without any lawful excuse or justification---High Court dismissed the constitutional petition and observed that pursuant to such inspection, if any action was likely to be taken against petitioner, then same be provided an opportunity of hearing and matter be decided strictly in accordance with law.

New Jubilee Insurance Company Ltd., Karachi v. National Bank of Pakistan, Karachi PLD 1999 SC 1126; Commissioner of Income Tax and others v. Messrs Media Network and others PLD 2006 SC 787 and Humayoon Muhammad Khan and another v. Province of Sindh 2009 CLC 1473 ref.

Beema Pakistan Company Ltd. v. The Securities and Exchange Commission of Pakistan and others Constitutional Petition No.D-445 of 2007; Commissioner of Income Tax and others v. Messrs Media Network and others PLD 2006 SC 787; Pearlberg v. Varty (Inspector Taxes) (1972) 2 All England Reports 7 and New Jubilee Insurance Company Ltd. v. National Bank of Pakistan, Karachi, PLD 1999 SC 1126 rel.

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

----Ss. 476 & 484---Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Order passed under Companies Ordinance, 1984 other than an order under S.476 thereof---Aggrieved person could challenge such order by filing revision under S.484 of Companies Ordinance, 1984 before Commission---Aggrieved person could not abandon or bypass such statutory remedy without any lawful excuse or justification.

Agha Faisal for Petitioner.

Faisal Kamal for Respondent No.2.

Ijaz Ahmed for Respondents Nos.3 and 4.

Date of hearing: 1st December, 2011.

2012 C L D 971

[Sindh]

Before Mushir Alam, C.J. and Ahmed Ali M. Shaikh, J

EQUITY PARTICIPATION FUND---Appellant

versus

Messrs ABBRASIVE PRODUCTS CO. LIMITED

and 4 others---Respondents

First Appeal No. 101 of 2006, decided on 25th November, 2011.

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

----Ss. 9 & 10---Suit for recovery of bank loan---Maintainability--- Mandatory provision--- Essential feature---Non-filing of statement of accounts---Effect---Suit filed by bank was dismissed by Banking Court on the ground that the statement of accounts filed by plaintiff Bank purportedly to support the plaint, containing entries, did not truly reflect the entries as per Bankers' Books Evidence Act, 1891--- Plea raised by Bank was that provisions of S.9(1) and (2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were merely directory and not mandatory---Validity---One of the essential features of mandatory provision was not merely use of word "shall" which might be used merely to stress importance of compliance of particular requirement emphasized or prescribed in enactment---Where consequences of failure to comply with direction or requirement of a statute were not stated, the direction was treated as directory and not mandatory---Where directions to do something in a particular manner entailed some penalty or consequence, like the consequences for not complying with requirements of S.10(3), (4) and (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, unless sufficient cause was shown, was visited by rejection of application for leave, had made the provision mandatory---Judgment and decree passed by Banking Court, negated the principle of mandatory provision of law, therefore, the same was set aside and the case was remanded to Banking Court for decision afresh---Appeal was allowed accordingly.

PLD 1978 Kar. 926; PLD 2001 SC 499; 2000 SCMR 1305; 2001 SCMR 1001; PLD 2007 Kar. 243; 2007 CLC 315; Citibank N.A. v. Judge Banking Court IV and 2 others 2001 CLC 171 and Habib Bank Limited v. English Engineering Co. 2005 CLD 292 ref.

(b) Interpretation of statutes---

----Mandatory provision---Essential feature---One of the essential features of mandatory provision was not merely the use of word "shall" which might be used merely to stress importance of compliance of particular requirement emphasized or prescribed in the enactment---Where consequences of failure to comply with direction or requirement of a statute were not stated, the direction was treated as directory and not mandatory---Where directions to do something in a particular manner entailed some penalty or consequence, like the consequence for not complying with requirements of provision of a statute, was visited by rejection of application, had made the provision mandatory.

PLD 1978 Kar. 926; PLD 2001 SC 499; 2000 SCMR 1305; 2001 SCMR 1001; PLD 2007 Kar. 243 and 2007 CLC 315 ref.

Muhammad Saleem Mongrio for Appellant.

Nemo for Respondents Nos. 1 to 4.

Khaleeq Ahmed for the Respondent No. 5.

Date of hearing: 25th November, 2011.

2012 C L D 993

[Sindh]

Before Mushir Alam, C.J.

MAHMOOD-UZ-ZAMAN KHAN---Applicant

versus

Messrs STANDARD CHARTERED BANK (PAKISTAN) LIMITED and another---Respondents

Civil Transfer Application No. 22 of 2010, decided on 8th August, 2011.

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

----Ss. 7(6), 9 & 10---Suit for recovery of outstanding amount of loan---Application for transfer of suit---Mere seeking transfer of the suit on the ground of preventing conflicting judgments, was not enough in ordering transfer of the Banking cases---While exercising such power of transfer, the very object of achieving expeditious disposal of Banking cases as provided in Financial Institutions (Recovery of Finances) Ordinance, 2001, must not be lost sight of and must always be kept in mind while deciding transfer application---While considering such transfer application, the High Court must ensure that the very purpose for which expeditious mechanism for disposal of recovery suit was devised under Banking laws, was not defeated---Whether the purpose was to avoid conflicting decisions or to defeat the very disposal of the Banking suit should be glanced from the pleadings of the parties---Case was not fit where transfer of the case could be ordered in the mechanical fashion---Application for transfer of suit, was dismissed, in circumstances.

Arif Shaikh for Applicant.

Khalid Mehmood Siddiqui for the Respondents.

2012 C L D 1036

[Sindh]

Before Munib Akhtar, J

PAKISTAN KUWAIT INVESTMENT COMPANY (PVT.) LIMITED through Authorized Representative---Plaintiff

versus

Messrs ACTIVE APPARELS INTERNATIONAL and 6 others---Defendants

Suit No. B-50 and C.M.A. No. 5295 of 2009, decided on 10th January, 2012.

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

----S. 10(3)(8)--- Application for leave to defend suit---Substantial questions of law or fact requiring recording of evidence---Scope---Court, while considering leave application would not decide questions thereby for same being matter of trial, if leave was granted, rather court only required to be satisfied that defendant had successfully crossed threshold imposed by S. 10(8) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Question of fact could not be decided without recording evidence---Leave could be granted if either substantial questions of fact or mixed questions of law and fact were raised as evidence would be needed to be recorded for deciding such questions---Pure question of law, even if substantial, could be decided without recording evidence, thus, leave could not be granted in respect of such question, which ought to be decided by court at leave granting stage there and then---Pure question of law decided at leave granting stage could not be re-opened or re-agitated at any subsequent stage of suit---Principles.

(b) Jurisdiction---

----Choice of forum clause in an agreement---Validity---Choice or agreement of parties could not confer jurisdiction on courts of forum, unless such jurisdiction otherwise vested in them---Forum chosen by parties in agreement would not be conclusive.

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

----Ss. 9 & 10(8)---Civil Procedure Code (V of 1908), S. 16---Suit for recovery of loan amount---Leave to defend suit, application for---Territorial jurisdiction of court at place "K" to entertain such suit objected to by defendant---Cheques showing repayment of loan amount issued and handed over to representative of plaintiff at place "M" and deposited by plaintiff in its bank account at place "K"---Effect---Such documents would indicate that payments had been made outside place "K"---Defendant in view of such facts had raised a substantial question of law and fact, which would require recording of evidence.

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

----Ss. 9 & 10(8)---Civil Procedure Code (V of 1908), S. 16(c) & O.XXXIV, R. 1---Transfer of Property Act (IV of 1882), S.91---Suit for recovery of loan amount by sale of mortgaged property---Leave to defend suit, application for---Territorial jurisdiction of court at place "K" to entertain such suit was objected to by defendants i.e. principal borrowers and guarantors---Deposit of title deed of mortgaged property by defendant at place "K"---Validity---Such suit as per S.16(c), C.P.C. could be brought where either mortgaged property was situated or cause of action had arisen in whole or in part---Cause of? action? in? respect? of? mortgaged? property? would arise,? inter? alia,? where? mortgage? was? created? or suit? amount? was? advanced--- Mortgage? by? deposit? of title? deed? would? create? at? place? of? its? deposit,? thus, cause of action in the present case partly arose at place "K"---By virtue of O. XXXIV, R. 1, C.P.C. read with S.91 of Transfer of Property Act, 1882, all persons having an interest either in mortgaged security or in right? of? its? redemption? would? be? joined? as? parties? in a? single? suit? seeking? its? sale--- Plaintiff? had? rightly joined principal and guarantors as defendants in the suit---Question of territorial jurisdiction for being a pure question of law could be decided at leave granting stage---Court decided such question against defendants.

(e) Interpretation of statutes---

----Mandatory provision--- Provision mandatorily obli-gating a person to do an act impossible for him to perform must be regarded as absurd---Absurdity could not readily be imputed to legislature.

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

----Ss. 9(1)(2) & 10(8)---Bankers' Books Evidence Act (XVIII of 1891), Ss.2(8) & 4---Suit for recovery of loan amount by Bank---Leave to defend suit, application for---Plaint and statement of account not finding mention name and official title of person having signed/verified and certified same respectively---Validity---Plaintiff had maintained discreet silence as to employment status and/or position held by such person at time of filing of suit---Nothing on record to show that person having signed/verified plaint and certified statement of account was at relevant time an officer of either designation as contemplated by S.2(8) of Bankers' Books Evidence Act, 1891 and S.9(1)(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaintiff had failed to comply with requirements of S. 9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 and its mandatory obligation to put forward its best possible case at leave granting stage, thus had deprived defendant of valuable right to answer the same---High Court granted unconditional leave to defend suit to the defendant.

?????? Bank of Credit and Commerce and others v. Asrar Hassan and others 2007 SCMR 852; Askari Leasing Ltd. v. Judge Banking Court No.1, Multan 2008 CLD 708; Highnoon Textile Ltd. v. Saudi Pak Industries and others W.P. 24148 of 2009, decided on 11-2-2010 (unreported); Muhammad Siddiq Muhammad Umar and another v. Australasia Bank Ltd. PLD 1966 SC 684; United Dairies Farms (Pvt.) Ltd. v. United Bank Ltd. 2005 CLD 569; C.M. Textile Mills (Pvt.) Ltd. v. Investment Corporation of Pakistan 2004 CLD 587; Bankers Equity Ltd. v. Bentonite Pakistan Ltd. 2003 CLD 931; Icepac Ltd. v. Pakistan Industrial Leasing Corporation Ltd. 2005 CLD 1186; Ravi Associate (Pvt.) Ltd. v. Industrial Bank of Pakistan 2005 CLD 393; AECO International v. Allied Bank Ltd. R.F.A. No.24 of 2007; Soneri Bank Ltd. v. Classic Denim Mills (Pvt.) Ltd. 2011 CLD 408; Saudi Pak Commercial Bank Ltd. v. Nazimuddin and another 2009 CLD 1195; Muzamil Brothers and another v. Saudi Pak Commercial Bank Ltd. 2006 CLD 1546 and Nusrat Textile Mills Ltd. v. United Bank Ltd. 2005 CLD 1421 ref.

?????? Ms. Sofia Saeed for Plaintiff.

?????? Salman Butt and Shoaib Rashid for the Defendants Nos 1 to 6.

2012 C L D 1095

[Sindh]

Before Shahid Anwar Bajwa, J

JACOB'S BAKERY LIMITED through Attorney---Applicant

versus

ENGLISH BISCUIT MANUFACTURERS (PVT.) LIMITED and 2 others---Respondents

Revision Application No. 79 of 2006, decided on 28th December, 2011.

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

----Ss. 8(a), 10 & 76---Civil Procedure Code (V of 1908), O.I, R.10---Suit for declaration and injunction---Plaintiff claimed vested right in suit trade mark for being its long user; that defendant was not entitled to use such mark, thus, prayed to restrain Registrar Trade Marks from cancelling its registration as registered user of such mark---Intervener's application under O.I, R.10, C.P.C. for impleading him as party in suit accepted by court---Subsequent dismissal of intervener's application by Registrar for registration of suit trade mark claiming to be its subsequent proprietor by virtue of deed of assignment---Pendency of appeal filed by intervener against such order of Registrar---Striking off name of intervener from array of defendants in suit by Trial Court on plaintiff's application under O.I, R.10(2), C.P.C. on ground of dismissal of such application of intervener by Registrar---Validity---Appeal would be continuation of proceedings---Appellate Court in appeal pending against order of Registrar could not order registration of suit trade mark---Trial Court, after allowing intervener's application under O.I, R. 10, C.P.C., could not knock out him despite pendency of his appeal before Registrar merely on ground of dismissal of his application for registration of suit trade mark by the Registrar---High Court set aside impugned order and dismissed plaintiff's application under O.I, R.10(2), C.P.C.

PLD 1973 Note 85 at page 123 and Lakshmi Narain and another v. Satgurnath and another AIR (29) 1942 Oudh 338 ref.

Raja Hamayun Sarfraz Khan and others v. Noor Muhammad 2007 SCMR 307; Haji Rehmdil v. the Province of Balochistan and another 1999 SCMR 1060; Muhammad Husain Munir and others v. Sikandar and others PLD 1974 SC 139; Nawab Syed Raunaq Ali and others v. Chief Settlement Commissioner and others PLD 1973 SC 236; Sultan Shah and 5 others v. Province of Sindh and 4 others 2010 YLR 528; Muhammad Idrees and others v. Muhammad Pervaiz and others 2010 SCMR 5; F.A. Khan v. The Government of Pakistan PLD 1964 SC 520; Wajid Ali v. Syed Sajid Ali 1985 SCMR 401; Abdul Rehman v. Haji Ghazan Khan 2007 SCMR 1491; Ch. Muhammad Shafi v. Shamim Khanum 2007 SCMR 838 and Utility Stores Corporation of Pakistan Limited v. Punjab Labour Appellate Tribunal and others PLD 1987 SC 447 rel.

(b) Appeal---

---- Appeal would be continuation of proceedings.

F.A. Khan v. The Government of Pakistan PLD 1964 SC 520; Wajid Ali v. Syed Sajid Ali 1985 SCMR 401 and Abdul Rehman v. Haji Ghazan Khan 2007 SCMR 1491 rel.

Zahid F. Ibrahim for Applicant.

Shaiq Usmani for Respondents.

2012 C L D 1115

[Sindh]

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

Messrs SUPER TRADERS through Proprietor---Petitioner

versus

ALEEM KHAWAJA and another---Respondents

Constitution Petition No.D-2456 of 2008, decided on 17th November, 2011.

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

----S. 19--- Execution proceedings--- Auction of property by Banking Court through its Nazir--- Validity--- Nazir in such a case would act as "AMEEN" of public property.

Petitioner in person.

Mirza Adil Baig for Respondent No.1.

2012CLD 1136

[Sindh]

Before Munib Akhtar, J

PAKISTAN INDUSTRIAL CREDIT AND INVESTMENT CORPORATION LTD.--Plaintiff

versus

Messrs KHAIRPUR SUGAR MILLS LIMITED and another---Defendants

Suit No.B-213 of 2000 and C.M.As. Nos. 8049, 8050 of 2009, decided on 14th March, 2012.

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

----Ss. 18 & 19---Civil Procedure Code (V of 1908), O.XXIII, R.3, Ss.2(2) & 12 (2)--- Compromise decree and agreement---Distinguished---Setting aside of compromise decree and agreement---Principles---Compromise agreement is made by parties and compromise decree by court---If agreement is successfully impugned then decree almost always fails, but it may be possible to attack the decree without impugning the agreement---Challenge to one is, therefore, not necessarily a challenge to the other---Grounds on which the agreement on one hand and the decree on the other can be attacked may overlap but are nonetheless distinct; it may be that as a matter of form, the challenge is directed towards the decree---Substance of challenge has to be carefully ascertained and distinction between decree and agreement must be kept in mind---If a compromised matter is challenged on the ground of misrepresentation, it is important to be clear, whether attack is directed against agreement or decree--Compromise agreement is simply a contract and can be impugned on the ground of misrepresentation, if matter comes within the ambit of Ss. 18 and 19 of Contract Act, 1872, and compromise decree, on the other hand, can be set aside under S.12(2), C.P.C.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance (XXV of 1997)---

----S. 9---Contract Act (IX of 1872), Ss..18, 19 & 21---Civil Procedure Code (V of 1908), O.XXIII, R.3 & S.152--- Recovery of bank loan---Compromise decree, modification of--- Illegality and misrepresentation--- Voidable agreement---Determination---Defendant's challenge was directed towards compromise agreement on the ground that it was tainted by illegalities amounting to misrepresentations and hence liable to be modified---Validity---Remedy sought, i.e. relief under S.152, C.P.C., was only available against decree---Compromise decree and agreement were not the same thing---Relief under S.152, C.P.C. was available in respect of a compromise decree without compromise agreement being impugned at all---Correction of compromise decree was not the same thing as modification of compromise agreement---Power to "correct" decree did not confer any power to modify agreement, as the two matters were separate and distinct and must be so dealt with---None of the provisions of Ss.18 and 19 of Contract Act, 1872, invoked by defendant were applicable---High Court declined to modify decree passed earlier on the basis of compromise arrived at between the parties--Application was dismissed in circumstances.

Jamnabhai v. Fazalbhoy Heptoola and others AIR 1923 PC 184; Allah Wasaya and others v. Irshad Ahmad and others 1992 SCMR 2184; Dadabhoy Cement Industries Ltd v. National Development Finance Corporation PLD 2002 SC 500; 2002 CLC 166; Mobile Eye Service of Pakistan v. Director Social Welfare and another PLD 1992 Kar. 183; Zafar Ahmad and others v. Government of Pakistan and others 1994 MLD 1612; Cotton Export Corporation of Pakistan (Pvt.) Ltd. v. Awami Cotton Ginners and others PLD 1995 Kar. 282; Manzoor Hussain and others v. Malik Karam Khan and others 1991 SCMR 2451; Sher Muhammad and others v. Khuda Bux- and another PLD 1961 Lah. 579; Civil Aviation Authority v. Aer Rainta International (Pvt) Ltd. 2003 YLR 1523; Wafaq-e-Pakistan v. Awamunnas 1988 SCMR 2041; World Automobiles and others v. Muslim Commercial Bank Ltd. and others 2009 CLD 1276; Koka Adinarayana Rao Naidu v. Koka Kothandaramayya Naidu and others AIR 1940 Mad. 538; Bankers' Equity Ltd. and others v. Khairpur Sugar Mills Ltd. And others 2001 CLC 737; Bank Alfala Ltd. v. Bilal Spinning Mills Ltd. And another 2005 CLC 206; Zarai Taraqaiati Bank Ltd. v. Hassan Aftab Fatiana 2009 CLD 36; Kleinwort Benson Ltd. v. Lincoln City Council [1998] 4 All ER 513; Pankhania v. Hackney LBC 12002] EWHC 2441 (Ch.); Alec Lobb Ltd. v. Total Oil (Great Britain) Ltd. [1983] 1 All ER 944 and Boustany v. Pigott (1995) 69 P. &C. R. 298, 203 ref.

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

----Ss. 39 & 40---Contract Act (IX of 1872), S..10---Voidable agreement---Effect---Courts, duty of---Such. agreement be avoided in its entirety or not at all, the same either stands or fails as a whole---Court cannot make agreements for the parties, as that is the matter of parties and for them to decide---Paramount duty of court is to ascertain (on an objective basis) the intent of parties and real terms of agreement actually arrived at---Courts have developed fairly elaborate principle of interpretation of contracts in order to do so; it is the different matter from first finding the agreement voidable and then modify it in order to bring or keep it within the law---Some agreements contain what are known as severability clauses, which provide that if any one or more clauses of agreement is found to be void or illegal, the same does not affect the other clauses---To apply such provision is not to modify the contract, it is simply to give effect to what the parties themselves intended.

(d) Fraud---

----Full particulars of alleged fraud or misrepresentation must be stated and particularized.

Taj Muhammad Khan v. Munawar Jan 2009 SCMR 598 and Ghulam Shabbir v. Nur Begum and others PLD 1977 SC 75 rel.

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

----S. 19---Voidabtlity of agreement---Plea of fraud and misrepresentation--Aggrieved party is enabled under S.19 of Contract Act, 1872, to insist that contract be performed and that he be put in the position he would have been in if the representation had been true--Aggrieved party would be interested in invoking S.19 of Contract Act, 1872, if he stands to gain by it.

Ijaz Ahmed and Aijaz Shirazi for Plaintiff.

Mushtaq A. Memon for Defendant No.1.

Dates of hearing: 24th March, 13th, 26th April, 6th, 18th, 30th May, 5th, 13th July and 16th December, 2011.

2012 C L D 1192

[Sindh]

Before Munib Akhtar, J

PAKISTAN INDUSTRIAL CREDIT AND INVESTMENT CORPORATION LTD.---Plaintiff

Versus

Messrs KHAIRPUR SUGAR MILLS LIMITED and another---Defendants

Suit No.B-213 of 2000 and C.M.A. Nos. 8049, 8050 of 2009 decided on 14th March, 2012.

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

----Ss. 18 & 19---Civil Procedure Code (V of 1908), Ss.2(2), 12(2) & O. XXIII, R. 3--- Compromise decree and agreement---Distinguished---Setting aside of compromise decree and agreement--- Principles--- Compromise agreement is made by parties and compromise decree by Court---If agreement is successfully impugned then decree almost always fails, but it may be possible to attack the decree without impugning the agreement---Challenge to one is, therefore, not necessarily a challenge to the other---Grounds on which the agreement on one hand and the decree on the other can be attacked may overlap but are nonetheless distinct, it may be that as a matter of form, the challenge is directed towards the decree---Substance of challenge has to be carefully ascertained and distinction between decree and agreement must be kept in mind--- If a compromised matter is challenged on the ground of misrepresentation, it is important to be clear, whether attack is directed against agreement or decree---Compromise agreement is simply a contract and can be impugned on the ground of misrepresentation, if matter comes within the ambit of Ss.18 and 19 of Contract Act, 1872, and compromise decree, on the other hand, can be set aside under S.12(2), C.P.C.

(b) Banking Companies (Recovery of Loans, Advances, Credits and Finances) Ordinance (XXV of 1997)---

----S. 9---Contract Act (IX of 1872), Ss. 18, 19 & 21---Civil Procedure Code (V of 1908), S.152 & O.XXIII, R.3---Recovery of bank loan--- Compromise decree, modification of--- Illegality and misrepresentation---Voidable agreement--- Determination--- Defendant's challenge was directed towards compromise agreement on the ground that it was tainted by illegalities amounting to misrepresentations and hence liable to be modified---Validity---Remedy sought, i.e. relief under S.152, C.P.C., was only available against decree---Compromise decree and agreement were not the same thing---Relief under S.152, C.P.C. was available in respect of a compromise decree without compromise agreement being impugned at all---Correction of compromise decree was not the same thing as modification of compromise agreement---Power to "correct" decree did not confer any power to modify agreement, as the two matters were separate and distinct and must be so dealt with---None of the provisions of Ss.18 and 19 of Contract Act, 1872, invoked by defendant were applicable---High Court declined to modify decree passed earlier on the basis of compromise arrived at between the parties---Application was dismissed in circumstances.

Jamnabhai v. Fazalbhoy Heptoola and others AIR 1923 PC 184; Allah Wasaya and others v. Irshad Ahmad and others 1992 SCMR 2184; Dadabhoy Cement Industries Ltd. v. National Development Finance Corporation PLD 2002 SC 500; 2002 CLC 166; Mobile Eye Service of Pakistan v. Director Social Welfare and another PLD 1992 Kar. 183; Zafar Ahmad and others v. Government of Pakistan and others 1994 MLD 1612; Cotton Export Corporation of Pakistan (Pvt.) Ltd. v. Awami Cotton Ginners and others PLD 1995 Kar. 282; Manzoor Hussain and others v. Malik Karam Khan and others 1991 SCMR 2451; Sher Muhammad and others v. Khuda Bur and another PLD 1961 Lah. 579; Civil Aviation Authority v. Aer Rainta International (Pvt) Ltd. 2003 YLR 1523; Wafaq-e-Pakistan v. Awamunnas 1988 SCMR 2041; World Automobiles and others v. Muslim Comme4rcial Bank Ltd. And others 2009 CLD 1276; Koka Adinarayana Rao Naidu v. Koka Kothandaramayya Naidu and others AIR 1940 Mad. 538; Bankers' Equity Ltd. And others v. Khairpur Sugar Mills Ltd. And others 2001 CLC 737; Bank Alfala Ltd. v. Bilal Spinning Mills Ltd. And another 2005 CLC 206 and Zarai Taraqaiati Bank Ltd. v. Hassan Aftab Fatiana 2009 CLD 36; Kleinwort Benson Ltd. v. Lincoln City Council [1998] 4 All ER 513; Pankhania v. Hackney LBC [2002] EWHC 2441 (Ch.); Alec Lobb Ltd. v. Total Oil (Great Britain) Ltd. [1983] 1 All ER 944 and Boustany v. Pigott (1995) 69 P.& C.R.298, 203 ref.

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

----Ss. 39 & 40---Contract Act (IX of 1872), S.10---Voidable agreement---Effect---Courts, duty of---Such agreement be avoided in its entirely or not at all, the same either stands or fail as a whole---Court cannot make agreements for the parties, as that is the matter of parties and for them to decide---Paramount duty of court is to ascertain (on an objective basis) the intent of parties and real terms of agreement actually arrived at---Courts have developed fairly elaborate principle of interpretation of contracts in order to do so; it is the different matter from first finding the agreement voidable and then modify it in order to bring or keep it within the law---Some agreements contain what are known as severability clauses, which provide that if any one or more clauses of agreement is found to be void or illegal, the same does not affect the other clauses---To apply such provision is not to modify the contract, it is simply to give effect to what the parties themselves intended.

(d) Fraud---

----Full particulars of alleged fraud or misrepresentation must be stated and particularized.

Taj Muhammad Khan v. Munawar Jan 2009 SCMR 598 and Ghulam Shabbir v. Nur Begum and others PLD 1977 SC 75 rel.

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

----S. 19---Voidability of agreement---Plea of fraud and misrepresentation--- Aggrieved party is enabled under S.19 of Contract Act, 1872, to insist that contract be performed and that he be put in the position he would have been in, if the representation had been true---Aggrieved party would be interested in invoking S.19 of Contract Act, 1872, if he stands to gain by it.

Ijaz Ahmed and Aijaz Shirazi for Plaintiff.

Mushtaq A. Memon for Defendant No.1.

Dates of hearing: 24th March, 13th, 26th April, 6th, 18th, 30th May, 5th, 13th July and 16th December, 2011.

2012 C L D 1225

[Sindh]

Before Munib Akhtar, J

KARACHI WATER AND SEWERAGE BOARD through Authorised Representative---Plaintiff

Versus

Messrs KARACHI ELECTRIC SUPPLY CORPORATION and 3 others---Defendants

Suit No.1263 of 2011 and C.M. As. Nos.10555, 10556 of 2011, 2737 of 2012 decided on 25th April, 2012.

(a) Administration of justice--

----Procedural objection ought not to stand in way of a determination on merits.

(b) Contract---

----Right of a third party to sue under a contract---Scope---Generally, a contract could not confer right or impose obligations arising thereunder on another person except party thereto---Third party would be entitled to sue under a contract having created a trust or quasi-trust in his favour or involved a family arrangement.

Mastersons v. Ebrahim Enterprises and another 1988 CLC 1381 ref.

(c) Contract---

----Privity of contract, doctrine of---Modification of such doctrine in relation to third party benefits---Scope---No profit rule, applicability of---Exception stated.

In Pakistan, the no-benefit rule should be applied only in a modified form, subject to a general exception or qualification to the rule that will apply if the following test, comprising of four elements, is fulfilled:

(a) Did the parties to the contract intend to confer or extend the benefit in question on or to the third party seeking to rely on the contractual provision and

(b) Were the actions of any of the contracting parties in relation to or affecting the third party seeking to rely on the contractual provision, or of the third party itself (as the case may be), the very actions contemplated as coming within the scope of the contract in general, or the provision in particular, again as determined reference to the intentions of the parties if so, then

(c) The contract, insofar as it confers or extends the benefit, may be enforced directly by the third party, but

(d) Subject to any defences that would have been valid between the contracting parties.

The word "actions" above has been used in a broad and general sense and as including, e.g., omissions. The no-benefit rule should be regarded as having been modified in the foregoing manner and to that extent.

In Pakistan, where the legislature has intervened hardly, if at all, in matters relating to the law of contract, it may well be that the courts will have to continue playing the leading role in the proper development and evolution of the law. It may be that eventually the courts themselves will totally abrogate a rule that is, after all, a judicial creation in the first place. However only the future can tell whether, when and/or how this will happen. The test stated hereinabove should therefore be regarded only as a beginning and certainly not the end. But for the time being the "no-benefit rule" is to be regarded only as having been modified in the manner and extent as stated above, and is to be applied accordingly.

Leigh and Sullivan v. Aliakmon Shipping Col. Ltd. (The Aliakmon) [1986] 2 All ER 145; [1985] UKHL 10 and Chitty on Contracts 30th (2008) ed., para.18-001 ref.

Tweddle v. Atkinson (1861) 1 B&S 393; 121 ER 762; Dunlop Pneumatic Tyre Company Ltd. v. Selfridge and Company Ltd. [1915] AC 847; [1915] UKHL 1; Drive Yourself Hire Co. (London) Ltd. v. Strutt [1953] 2 All ER 1475; Midland Silicones Ltd. v. Scruttons Ltd. [1962] 1 All ER 1; [1961] UKHL 4; Beswick v. Beswick [1967] 2 All ER 1197; [1967] UKHL 2; Darlington Borough Council v. Wiltshier Northern Ltd. [1995] 3 All ER 895; [1994] EWCA Civ 6; Lawrence v. Fox (1859) 20 NY 268; Trident General Insurance Co. Ltd. v. McNiece Bros Pty Ltd. (1988) 165 CLR 107; [1988] HCA 44; London Drugs Ltd. v. Kuehne and Nagel International Ltd. [1992] 3 SCR 299; Fraser River Pile and Dredge Ltd. v. Can-Dive Services Ltd. [1999] 3 SCR 108; Khwaja Muhammad Khan v. Husaini Begum (1909-10)37 IA 152; [1910] UKPC 25; Jamna Das v. Pandit Ram Autar Pande and others (1911-12) 39 IA 7: [1911] UKPC 69; Debnarayan Dutt v. Chunilal Ghose (1914) 41 Cal. 137; Iswaram Pillai v. Tharagan and others AIR 1914 Madras 701; Krishna Lal Sadhu and another v. Mt. Promila Bala Dasi AIR 1928 Cal. 518; Thirumulu Subbu Chetti v. Arunachalam Chettiar AIR 1930 Mad. 382; Khirod Behari Dutt v. Man Gobina and others AIR 1934 Cal. 682; Bhujendra Nath Biswas and others v. Sushamoyee Basu and another AIR 1936 Cal. 67; National Petroleum Co. Ltd. v. Popatlal Mulji AIR 1936 Bom. 344; Babu Ram Budhu Mal and others v. Dhan Singh Bishan Singh and others AIR 1957 Punjab 169; M.C. Chacko v. State Bank of Travancore AIR 1970 SC 504; Klaus Mittlelbachert v. East India Hotels Ltd. AIR 1997 Delhi 102(SB); E.I. Ltd. and another v. Klaus Mittelbachert AIR 2002 Delhi 124; Peruri Somanna v. Grandhi Manikam (1911) 14 Ind. Cases 517 (Madras); Tulsidas and others v. Gangaram Ghanshamdas AIR 1925 Sindh 272; Torabaz Khan and another v. Nanah Chand and another AIR 1932 Lahore 566; Ram Dhan and another v. L. Chauthmal and others AIR 1935 Oudh 496; Pandurang Ganpatrao v. Vishwanath Pandurang AIR 1939 Nagpur 20; Kepong Prospecting Ltd. v. A.E. Schmidt [1968] AC 810; [1967] UKPC 22; Allah Wasaya v. Sardar Shah PLD 1984 Lah. 59; Jnan Chandar Mukherjee v. Manoranjan Mitra and others AIR 1942 Cal. 251; Irrawady Flottila Company v. Bugwandas (1891) 18 Cal. 620; [1891] UKPC 23; Jwaladutt R. Pillani v. Bansilal Motilal AIR 1929 PC 132; Woodar Investment Development Ltd. v. Wimpey Construction U.K. Ltd. [1980] UKHL 11; [1980] 1 All ER 571 at pp. 588-89 and Swain v. Law Society [1982] 2 All ER 827 at p.832 rel.

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

----S. 39---Repudiatory breach of a contract---Remedy of innocent party---Scope---Innocent party would have a choice i.e. to make an election either to regard contract as continuing and thereby affirming same or accept repudiation and consider contract as having come to an end---Where innocent party elected to continue with contract and affirm same, then such affirmation would be irrevocable and contract would continue as a whole i.e. he could not regard provision of contract breached as terminated while continuing with rest of contract.

A.C. Yusuf and Co. v. K.B.M. Habibullah and Co. PLD 1965 Kar. 374(SB), 382-5 ref.

Muhammad Farogh Naseem for Plaintiff.

Abid Shahid Zuberi for Defendant No.1.

Qazi Majid Ali, A.A.G. for Defendant No.3.

Dates of hearing: 10th, 12th and 18th April, 2012.

2012 C L D 1269

[Sindh]

Before Shahid Anwar Bajwa and Nisar Muhammad Shaikh, JJ

SAFEHAVEN MARINE LTD., IRELAND through Duly Constituted Attorney----Petitioner

Versus

KARACHI PORT TRUST----Respondent

Constitutional Petition No.D-4168 of 2011, decided on 13th March, 2012.

(a) Public Procurement Rules, 2004---

----Rr. 33, 36 & 38---Constitution of Pakistan, Art.199---Constitutional petition---Public procurement---Financial bid---Vested right of bidder---Scope---Port Trust (KPT) invited bids for procurement of two Pilot Boats and petitioner claimed to be the lowest bidder having vested right to its bid to be accepted but KPT did not award contract---Validity---At the end of bidding, there were only two bids left; one by petitioner and other by another bidder---Petitioner's bid was for Glass Reinforced Plastic (GRP) hull and that of the other bidder was for steel hull, therefore, prima facie the two were apples and oranges and could not be compared with each other---In tender documents, type of material for hull, GRP or Steel was not specified, therefore, it could be either---Even if the two bids remaining in field were treated as comparable and therefore, should have been compared with each other, in presence of only two bids, there could be a "lower" bid and a "higher" bid but there could not be " the lowest bid", which adjective being in superlative degree and not in comparative degree required at least three to be compared with each other---High Court declined to interfere in the order passed by authorities---Petition was dismissed in circumstances.

Mst. Shabnam v. Federation of Pakistan through General Manager/Operations Pakistan Railways Headquarters Office, Lahore and 3 others 2009 PLC (C.S.) 327; Kamaluddin Qureshi v. Ali International Co. PLD 2009 SC 367; Muhammad Kaleem Asif v. Additional District Judge PLD 2009 Lah. 484; Muhammad Usman and another v. Additional District Judge, Lahore PLD 2010 Lah. 281; City Schools (Pvt.), Lahore Cantt. v. Privatization Commission, Government of Pakistan and others 2002 SCMR 1150; Afzal Motors Company (Pvt.) Limited v. Province of Sindh and others 2009 SCMR 659; Petrosin Corporation (Pvt.) Ltd. Singapore and 2 others v. Oil and Gas Development Company Ltd. through Managing Director, Islamabad 2010 SCMR 306 and Messrs Bagh Construction Company v. Federation of Pakistan and others 2001 YLR 2791 ref.

(b) Public Procurement Rules, 2004---

----R. 33---Bid, cancellation of---Discretion of authorities---Scope---Public functionaries are trustees of public power and are required to act fairly, justly and for valid reasons and are not required to act whimsically, capriciously or arbitrarily.

Khurram Rashid for Petitioner.

Badar Alam for Respondent.

Date of 6th March, 2012.

2012 C L D 1302

[Sindh]

Before Munib Akhtar, J

Messrs SONERI BANK LIMITED---Plaintiff

Versus

Messrs COMPASS TRADING CORPORATION (PVT.) LIMITED through Director/Chief Executive and 3 others---Defendants

Suit No.B-93 and C.M.A. No.7894 of 2009, decided on 23rd January, 2012.

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

----S. 9(2)---Bankers' Books Evidence Act (XVIII of 1891), S.2(8)---Certification of statement of accounts to be filed along with suit--- Words "bank" and "principal accountant" as used in S. 2(8) of Bankers' Books Evidence Act, 1891---Scope---For purposes of Financial Institutions (Recovery of Finances) Ordinance, 2001, such word "bank" would be read as "financial institution", while such word "principal accountant" would include Chief Financial Officer ---Certificate at end of such statement must be subscribed by any one of the officers identified by S. 2(8) of Bankers' Books Evidence Act, 1891---Principles.

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

----Ss. 9 & 10---Bankers' Books Evidence Act (XVIII of 1891), S. 2(8)--- Suit for recovery of loan amount by Bank--- Application for grant of leave to defend suit---Customer's plea was that persons having certified statement of accounts were not "officers" as contemplated by S.2(8) of Bankers' Books Evidence Act, 1891 and were not in employment of Bank at time of filing of such suit---Validity---Power of attorneys filed along with plaint simply described such persons to be officer of Bank without having power to certify such statement on behalf of plaintiff-Bank--- None of such attorneys was principal accountant or manager of plaintiff-Bank--- Certificates at the end of such statements did not specify name or title of its signatories--- Specific statutory requirements of S.2(8) of Bankers' Books Evidence Act, 1891 could not be ignored---Such statement was not duly certified within meaning and for purposes of said Act--- Defendant was entitled to unconditional leave to defend suit---High Court accepted leave application in circumstances.

(c) Power of attorney---

----Power of attorney containing a clause empowering attorney to do all such acts, deeds etc., as would be deemed by attorney to be necessary or expedient "to carry on and manage business of the Bank"---Scope---General clauses of such nature in a power of attorney must be given a contextual meaning and would invariably be intended to be supplementary to and supportive of specific provisions of instrument and would not be regarded as conferring independent powers on their own---Illustration.

(d) Natural justice, principles of---

----Person sued in a court of law would be entitled as of right to defend himself and contest claim put forward by plaintiff--- ­Such right being manifestation of fundamental principles of natural justice would lie at the heart of judicial adjudicatory system.

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

----Ss. 9 & 10(3) to (6)---Suit for recovery of loan amount by Bank---Application for leave to defend suit---Bank's plea was that such application was liable to be rejected for failing to comply with requirements of S. 10(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---Defendant had filed suit for rendition of accounts against Bank---Defendant in leave application had raised specific objections regarding amounts claimed by Bank in the plaint of present suit---Such objections raised by defendant could be regarded as constituting sufficient cause within meaning of S. 10(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001 as to why he had been unable to comply with requirements of subsection (4) thereof---High Court granted unconditional leave to defend suit in circumstances.

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

----Ss. 9 & 10(3) to (6)---Suit for recovery of loan amount by Bank---Application by borrower for grant of leave to defend suit not conforming to requirements of S. 10(3) to (5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---­Such requirements for being purely procedural in nature would go only to form of leave application and not its merits---Rejection of leave application on ground of not being in conformity with requirements of S.10(3) to (5) of the Ordinance while regarding same to be mandatory and not directory, would be ultimate success of form over substance---Denying the defendant a right to defend himself by hearing his leave application on account of procedural infirmities in its form would place procedure on a pedestal far higher than that warranted under the law---Procedure was the handmaid of justice and not its mistress, rather its stepmother----Provisions of S.10(3) to (5) of the Ordinance read with subsection (6) thereof were directory in nature and not mandatory---Leave application on account of non-compliance of such requirements would not be liable to be rejected as a matter of course---Principles.

Habib Bank Ltd. v. Sabcos (Pvt.) Ltd. 2006 CLD 244 and United Bank Ltd. v. Progas Pakistan Ltd. 2010 CLD 828 ref.

Imtiaz Ahmad v. Ghulam Ali and others PLD 1963 SC 382 rel.

Mansoor ul Arfin for Plaintiff.

Qazi Hafizur Rehman for Defendants.

Dates of hearing: 19th October and 23rd November, 2011.

2012 C L D 1330

[Sindh]

Before Salman Hamid, J

AVARI HOTELS LIMITED----Appellant

versus

FEDERATION OF PAKISTAN through Secretary, Information and Broadcasting and another----Respondents

Second Appeals Nos.73, 74 and 77 of 2009, decided on 1st February, 2012.

(a) Pakistan Electronic Media Regulatory Authority Ordinance (XIII of 2002)---

----S. 33---Pakistan Electronic Media Regulatory Authority Rules, 2002, Rr.2(e) & 2(1)---Civil Procedure Code (V of 1908), O.VII, R.11---Specific Relief Act (I of 1877), Ss.42 & 56---Suit for declaration---Notice issued by Pakistan Electronic Media Regulatory Authority (PEMRA) demanding plaintiff to obtain a license for Cable Television (CTV) operations in its hotel---Plaintiff claimed not to be falling within meaning of CTV Operator as he was not "transmitting" and/or "broadcasting" through "head-end" channels in its hotels as alleged in the impugned notice---Defendant's application under O.VII, R.11, C.P.C. seeking rejection of plaint for not being maintainable under Ss. 42 & 56(d)(i)(j) of Specific Relief Act, 1877---Order of Trial Court rejecting plaint upheld by Appellate Court---Validity---Evidence would be required for deciding questions as to whether plaintiff was "transmitter" and/or "broadcaster" through "head-end" or engaged in business of transmission or re-transmission of audio visual programs by cables or MMDS, and whether such were services licensable under Pakistan Electronic Media Regulatory Authority Ordinance, 2002 and Pakistan Electronic Media Regulatory Authority Rules, 2002---Trial Court while granting interim injunction had come to conclusion that admittedly appellant was providing hotel management services to its guests, thus, he was not involved in transmission and distribution of programs to subscribers, rather he was using TV Channels to ensure availability of programs to its guests---Appellant had a legal character to invoke jurisdiction of court for a declaration that provisions of Pakistan Electronic Media Regulatory, Authority Ordinance, 2002 and Rules were not applicable---Plaintiff's case prima facie fell into pail of S.42 of Specific Relief Act, 1877---High Court set aside impugned order in circumstances.

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

----S. 42---Expression "legal character" as used in S.42 of Specific Relief Act, 1877---Meaning stated.

The expression "legal character" as used in section 42 of the Specific Relief Act, 1877 is equivalent to a legal status and legal status is a legal right when it involves a peculiarity of the personality arising from any thing unconnected with the nature of the act itself which the person of inherence can enforce against the person of incident.

S.M. Awan for Appellants (in Appeals Nos.73 and 74 of 2009).

Zahid F. Ebrahim for Appellants (in Appeal No.77 of 2009).

Pir Riaz M. Shah, Standing Counsel for Respondent No.1.

Kashif Hanif for Respondent No.2.

Date of hearing: 21st November, 2011.

2012 C L D 1339

[Sindh]

Before Muhammad Tasnim, J

NAVEED JAN BALOCH and 3 others---Plaintiffs

Versus

FEDERATION OF PAKISTAN through Secretary, Ministry of Commerce and 4 others---Defendants

Suit No.61 of 2012, decided on 29th February, 2012.

(a) Trade Organizations Ordinance (XXXI of 2007)---

----Preamble & S. 31---Trade Organization Rules, 2007---­Constitution of Pakistan, Arts. 89, 128 & 264---General Clauses Act (X of 1897), S.6---Promulgation of Trade Organizations Ordinance, 2007 on 5-6-2007 and framing of Trade Organizations Rules, 2007 on 7-6-2007---Abatement of Rules 2007 after expiry of Ordinance, 2007 by efflux of time in October 2007---Scope---Statute having repealed would be considered as never existed and bye-laws made there under would cease to have any validity unless repealing statute contained some provision preserving validity thereof notwithstanding the repeal---Trade Organizations Ordinance, 2007 was not repealed by virtue of the Constitution, but same died its natural death by operation of statute after expiry of four months, thus, there was no question of having any provision preserving validity of the Trade Organisations Rules, 2007---Principles.

Sindh High Court Bar Association v. Federation of Pakistan PLD 2009 SC 879; Zamir Ahmed Shaikh, Ex-Deputy Chief Controller of Purchase/C.F. Pakistan Railways, Lahore v. Pakistan Railways and others PLD 2000 Lah. 181; Umar Mujeeb Shami v. District Magistrate/Deputy Commissioner, Islamabad and others 2003 CLC 430; Karachi Watch v. Imran Fasihi and another 2008 CLC 222; Government of Punjab v. Zia Ullah Khan and others 1992 SCMR 602; Air League of PIAC Employees v. Federation of Pakistan M/O. Labour and Manpower Division Islamabad and others 2011 SCMR 1254; Mian Ahmad Saeed and others v. Election Tribunal for Kasur at Okara and others 2003 SCMR 1611; Manzoor Ali and others v. United Bank Limited 2005 SCMR 1785; Mian Rafi-ud-Din and others v. Chief Settlement and Rehabilitation Commissioner and others PLD 1971 SC 252; United Liner Agencies of Pakistan (Pvt.) Ltd. Karachi and others v. Miss Mahenau Agha and others 2003 CLD 183; Muhammad Arif and another v. The State and another 1993 SCMR 1589; Unreported order passed by this Court in Miscellaneous Appeal No.5 of 1998 dated 1-2-1999; Unreported order dated 28-12-2011 passed by Balochistan High Court in C.P. No.903 of 2011; Unreported order dated 24-1-2012 passed in I.C.A. No.746 of 2011 by Lahore High Court; Harish Chandra v. The State of Madhya Pradesh AIR 1965 SC 932; Tika Iqbal Muhammad Khan v. General Pervez Musharaf and others PLD 2008 SC 6; Tika Iqbal Muhammad Khan and others v. General Pervez Musharaf and others PLD 2008 SC 178 and Tika Iqbal Muhammad Khan v. General Pervez Musharaf, Chief of Army Staff, Rawalpindi and others PLD 2008 SC 615 ref.

Sindh High Court Bar Association v. Federation of Pakistan PLD 2009 SC 879; Craies on Statute Law, seventh edition, by S.G.G. Edgar, C.B.E., at Page-411 and Craies on Statute Law, seventh edition, at page-336 rel.

(b) Interpretation of statutes---

----Repeal of a statute---Effect.

If a law is repealed, then effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law.

When an Act of Parliament is repealed, it must be considered (except as to passed and closed transactions as if it had never existed. Any bye-law made under repealed statute ceases to have any validity unless repealing Act contains any provision preserving the validity of the bye-law notwithstanding the repeal.

Craies on Statute Law, seventh edition, by S.G.G. Edgar, C.B.E., at Page-411 and Craies on Statute Law, seventh edition, at page-336 fol.

Abdul Sattar Pirzada and Rana Ikramullah for Plaintiff No.1.

Rehman Aziz Malik for Plaintiff No.2.

Sameer Ghazanfar for Plaintiffs Nos. 3 and 4.

Syed Qamarul Hassan, Standing Counsel for Defendants Nos.1 and 2.

Khalid Javed and Malik Asghar for Defendant No.3.

Baz Muhammad Kakar and Usman Shaikh for Defendant No.4.

Dates of hearing: 20th and 21st February, 2012.

2012 C L D 1372

[Sindh]

Before Munib Akhtar, J

UNITED BANK LIMITED---Plaintiff

Versus

MEHMOOD ILYAS KHAN and another---Defendants

Suit No.B-124 of 2010 and C.M.A. No.9336 of 2011, decided on 15th February, 2012.

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

----Ss. 10(8) & 22---Civil Procedure Code (V of 1908), S.12(2)---­Leave to defend suit, application for---Dismissal of leave application for non-appearance of defendant and passing of decree by court---Application under S.12(2), C.P.C. for setting aside such order and decree---Plaintiff's plea was that against impugned order and decree, only appeal was competent and not application under S. 12(2), C.P.C.---Validity---Once leave application was filed, then court would be statutorily bound to consider the same regardless of non-appearance of defendant or his counsel---Disposal of leave application must show application of mind by court to its contents---Court would be bound to grant such application, if satisfied that there was even a single substantial question of law or fact raised therein---Court while dismissing leave application had not even considered the same---Impugned order and decree were without jurisdiction and liable to be set aside under S.12(2), C.P.C.---High Court set aside impugned order and decree and restored leave application---Principles.

Chaoudhry Mairajuddin v. West Pakistan Province and others 1970 SCMR 96; Abid Aziz Khan and 2 others v. Bank of Punjab 2007 CLD 997 and Dadabhoy Cement Industries Limited and others v. National Development Finance Corporation, Karachi 2002 CLC 166 ref.

Dr. Asad Pervez Sheikh v. National Bank of Pakistan 2005 CLD 438; Khairpur Textile Mills Ltd. v. National Bank of Pakistan and another 2003 CLD 326 and National Bank of Pakistan v. Khairpur Textile Mills Ltd. 2001 CLC 1187 rel.

(b) Administration of justice---

----Application not disclosing the provision under which the same was made---Effect---Substance of relief sought by applicant would be relevant and not specific provision cited therein---Where substance of application accorded with a particular provision, then same would be treated thereunder---Illustration.

Aijaz Ahmed along with Aijaz Ali Shah for Plaintiff.

Waqar Muhammad Khan for Defendant.

2012 C L D 1402

[Sindh]

Before Faisal Arab and Aqeel Ahmed Abbasi, JJ

SHAHID MAZHAR---Appellant

Versus

SHADMAN COTTON MILLS LIMITED and 3 others---Respondents

High Court Appeal No.112 and C.M.As. Nos.2332, 2323, 2252, 1668 of 2011, decided on 29th November, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 181---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1, 2 & O.XLIII, R. 1---Law Reforms Ordinance (XII of 1972), S. 3--- Intra-court appeal--- Ad interim order restraining defendant from acting as a Director of Company and from participation in Board Meetings---Validity---Restraining the defendant from acting as a Director and participating in Board meetings was within the jurisdiction of the Company Judge---Special provision had been provided in terms of S.181 of the Companies Ordinance, 1984 for removal of a Director, therefore, interim order to such extent was unwarranted and could not have been passed in the suit---Order of Single Judge of High Court was modified to the extent that the defendant was free to participate in the Annual General Meeting of the company in his capacity as a Director and shareholder of the company and could raise objections on the accounts presented in the meeting---Appeal was disposed of, accordingly.

2010 YLR 2426; 1998 SCMR 68 and PLD 1992 SC 203 ref.

Muhammad Najeeb Jamali for Appellant.

Arshad Tayabally for Respondents.

2012 C L D 1413

[Sindh]

Before Muhammad Tasnim, J

Messrs NASEEM OILS through Proprietor---Plaintiff

Versus

M.T. MIRAMIS through Master/Chief Officer and 3 others---Defendants

Admiralty Suit No.37 of 2011, decided on 10th February, 2012.

(a) Words and phrases---

----"Time Charter"---Meaning.

Marine Encyclopedic Dictionary 2nd Edn. ref.

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

----Ss. 3(2) & 4(4)---Sindh Chief Court Rules (O.S.), R. 731---Suit for recovery of dues of supply of Bunker to defendant-vessel and damages--- Arrest of vessel, application for---Plaintiff's plea that such supply was made at the request of fuel agent was acknowledged by master of vessel, but its payment was not made by fuel agent and charterer---Validity---Plaintiff had admitted not to have made such supply at request of master of vessel---Fuel agent and charterer were not owners of vessel --- Record showed that plaintiff had knowledge that vessel at the relevant time was on "Time Charter" with defendant---Charterer under terms of "Charter Party" would be obliged to make payment of such supply to plaintiff, but not vessel and its owner---Claim in rem against vessel could not be maintained in such circumstances---­Plaintiff had failed to make out case in personam against owner of vessel---High Court dismissed such application.

Messrs Global Venture Ltd. v. M. V. Rio G. and 2 others 2001 YLR 1115; Messrs Al-Yousuf Baghpati and Co. and another v. M.V. Naran and 3 others 1992 CLC 833 and Medway Drydock and Engineering Company Ltd. v. The Andrea Ursula (1971) 1 Lloyd's Law Reports 145 ref.

Marine Encyclopedic Dictionary 2nd Edition; Unreported order passed in Admiralty Suit No.21 of 2006, dated 13-11-2006; Messrs Sun Line Agencies Ltd. v. Vessel M.V. 'Psiloritis' and 2 others 1984 CLC 1553; Messrs V.N. Lakhani and Company v. M.V. Lakatoi Express and 2 others PLD 1994 SC 894 and A/S Dan-Bunkering Limited v. M.V. Salam in Admiralty Suit No.21 of 2006 rel.

Shakeel Ahmed for Plaintiff.

Shaiq Usmani for Defendants Nos.1 and 2.

Date of hearing: 3rd February, 2012.

2012 C L D 1445

[Sindh]

Before Sajjad Ali Shah, J

Messrs SHAHEEN CONSTRUCTION COMPANY through Mrs. Zeeshan Fatima---Plaintiff

Versus

PAKISTAN DEFENCE OFFICERS HOUSING AUTHORITY through Administrator---Defendant

Civil Suit No.1294 of 2011 and C.Ms. Nos.11671, 10783, 11687 and 11689 of 2011, decided on 30th January, 2012.

(a) Public Procurement Rules, 2004---

----Rr. 15, 18, 19 & 36---Procurement through open competitive bidding---Scope---Mere prequalification of a prospective bidder would not create vested right in him to be directly selected for any prospective bid---Prospective bidder once having meted out pre-qualification criteria laid down for execution of a particular work could not be ousted from participating in financial bid by knocking him down while changing prequalifying criteria and that too without any lawful justification---Prequalified contractor would have vested right unless disqualified or blacklisted in terms of Rr.18 & 19 of Public Procurement Rules, 2000 to directly compete in financial bidding---Principles.

(b) Public Procurement Regulations, 2008---

---- Regln. 3--- Procurement through open competitive bidding---Prequalification criteria change in---Scope---When prequalification was job specific, then any such change would not only be discriminatory but would be voilative of Regln.3 of Public Procurement Regulations, 2008---Process for asking prequalified contractors to go through prequalification process afresh and that too without any plausible or lawful justification would be without authority---Illustration.

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

----S. 151, O.XXXIX, Rr.1 & 2---Interim relief/injunction or maintaining status quo, grant of---Scope---Ultimate/final relief claimed in a suit would normally be not granted as an interim measure, if same would create a new situation--- Mere directing parties in a suit for injunction to maintain status quo would neither amount to granting main relief nor creating a new situation.

Islamic Republic of Pakistan through Secretary, Establishment Division, Islamabad and others v. Muhammad Zaman Khan and others 1997 SCMR 1508 rel.

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

----O. XXXIX, Rr.1 & 2---Interim injunction against public functionaries, grant of--- Scope--- Where decisions of public functionaries were either mala fide or against law and/or rules, then same would be liable to be struck down, thus, balance of inconvenience in such case would hardly matter---Court could not ignore such violation while weighing balance of convenience---Principles.

In cases where the allegations are against public functionaries for violating the rules which they are bound to follow while discharging their functions, then balance of inconvenience hardly matters as it is the bounden duty of the court to ensure that the public functionaries while discharging their functions should act strictly in accordance with the rules and therefore, cannot ignore such violation while weighing the balance of convenience. Powers vested in government functionaries is a sacred trust and they are bound to exercise such powers and perform their duties as trustees in a most transparent manner and in cases where the decisions of the State functionaries are either mala fide or contrary to law, the same are liable to be struck down.

Ovais Co. v. Federation of Pakistan PLD 1999 Kar. 472; Muhammad Abid and 2 others v. Nisar Ahmed 2000 SCMR 780; Petrosin Corporation (Pvt.) Ltd. and others v. MOL Pakisatan Oil and Gas Co. and others PLD 2008 SC 472; Shah Jehan Khan v. Fazal-ur-Rehman Khan and another 2001 CLC 1695; Abdul Ghaffar v. Waqas Hafeez and others 2010 CLC 285; City Schools (Pvt.) Ltd., Lahore Cantt. v. Privatization Commission, Government of Pakistan and others 2002 SCMR 1150 and BBJ Pipe Industries (Pvt.) Ltd. v. Sui Northern Gas Pipelines Ltd. 2003 YLR 1442 ref.

Shahenshah Hussain for Plaintiff.

M. Ilyas Khan and Omer Siyal for Defendant.

Muhammad Saleem Mangrio for Messrs MJB Corporation Company.

Naveed Ahmed Khan for Messrs Indusmens Corporation.

Dates of hearing: 14th, 16th, 20th and 21st December, 2011.

2012 C L D 1525

[Sindh]

Before Munib Akhtar, J

CREEK MARINA (PRIVATE) LIMITED---Plaintiff

Versus

PAKISTAN DEFENCE OFFICERS' HOUSING AUTHORITY through Administrator---Defendant

Suit No.1352 of 2011, decided on 21st May, 2012.

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

----S. 309---Winding up petition, filing of---Locus standi---Persons who can present a winding up petition have been specified in S.309 of Companies Ordinance, 1984, and the list is exhaustive---For filing of such petition, a person has to be either a creditor or a contributory.

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

----S. 309---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Specific Relief Act (I of 1877), Ss. 42 & 56---Suit for declaration and injunction---Interim injunction, grant of---Restraining from filing winding up petition--- Plaintiff was a construction company and had a dispute with defendant authority with regard to certain payments---Plaintiff filed suit to restrain defendant authority from filing winding up petition against plaintiff company---Validity---Prima facie defendant was not yet a creditor of plaintiff company---Even a "contingent" or "prospective" creditor, under S.309 of Companies Ordinance, 1984, was permitted to present a winding up petition---Chances of success of petition presented by such creditor were remote and strong case would have to be presented by such creditor before winding up order could be made---Even if damage was not irreparable, court could issue an appropriate injunction, if it was significant and substantial---Plaintiff was engaged in a high profile construction project in which hundreds of persons had booked flats and apartments---Presentation of winding up petition and public knowledge of such petition would cause considerable diminution and loss to plaintiff and its commercial activities would be seriously jeopardized on account of loss of public confidence and its position might be irrevocably compromised---Damage caused to plaintiff would be significant and substantial, if not irreparable---Equity was in favour of plaintiff and against defendant, as the case for interim relief had been made out---High Court restrained defendant from presenting a winding up petition against plaintiff company on the basis of claim as set forth in the notice of demand---Application was allowed in circumstances.

Ross & Craig v. Williamson [2006] EWHC 880 (Ch); Re a Company (No.8735 of 2006) [2006] EWHC 3299; Moorside Investments Ltd. v. DAG Construction Ltd. [2007] EWHC 3490 (Ch); Mann v. Goldstein [1968] 2 All ER 769; ICS Incorporation Ltd. v. Michael Wilson and Partners [2005] EWHC 404; Metalform Asia Pte Ltd. v. Holland Leedon Pte Ltd. [2007] SGCA 6; [2007] 2 SLR (R) 268; Westform Far East Sdn Bhd v. Connaught Heights Sdn Bhd and others [2010] 3 MLJ 459; [2009] MYCA 68 (Court of Appeal); Multimedia Development Corp Sdn Bhd v. Pembinaan Purcon Sdn Bhd [2006] 2 MLJ 653 (High Court) and Cotton Corporation of India v. United Industrial Bank AIR 1983 SC 1272; [1983] INSC 125 ref.

Fortuna Holdings Pty Ltd. v. Deputy Commissioner of Taxation of the Commonwealth of Australia [1978] VicRp 9; [1978] VR 83 rel.

Arshad Tayebaly, Amel Khan Kansi, Ovais Ali Shan and Ali T. Ebrahim for Plaintiff.

Khalid Mehmood Siddiqui for Defendant.

Dates of hearing: 8th, 20th December, 2011, 5th January and 15th May, 2012.

2012 C L D 1556

[Sindh]

Before Faisal Arab and Nadeem Akhtar, JJ

Messrs UNITED BANK LIMITED through Authorized Attorneys---Petitioner

Versus

BANKING COURT NO.II and 2 others---Respondents

Constitutional Petition No.D-1595 of 2010, decided on 26th July, 2012.

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

----S. 10(11)---Words "forthwith" and "shall"---Object, scope and purpose---Words "forthwith" and "shall" used in S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001, cast a duty upon Banking Court to decree suit in favour of plaintiff against defendant immediately, when defendant's application for leave to defend is rejected or where a defendant fails to fulfil conditions attached to grant of leave to defend---Object of inserting S.10(11) in Financial Institutions (Recovery of Finances) Ordinance, 2001, is not to cause prejudice to any party but is to provide expeditious and equitable relief in banking suits to plaintiff after dismissal of defendant's application for leave to defend.

Black's Law Dictionary (Seventh Edition); Chambers 21st Century Dictionary (1996 Edition); K. J. Aryer's Judicial Dictionary (A complete Law Lexicon) Thirteenth Edition; P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edition, Volume 2) D-I 2005; Words and Phrases (Permanent Edition) Volume 17; Apollo Textile Mills Ltd. and others v. Sonery Bank Ltd. 2012 CLD 337; Mrs. Jawahar Afzal v. United Bank Limited 2003 CLD 119; Khawaja Muhammad Bilal v. Union Bank Limited 2004 CLD 1555 and Habib Bank Limited v. Messrs SABCOS (Pvt.) Ltd. 2006 CLD 244 rel.

(b) Administration of justice---

----Where any statute provides a procedure for doing a thing in a particular manner that thing should be done in that particular manner and in no other manner.

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

----Ss. 9 & 10--- Constitution of Pakistan, Art. 199---Constitutional petition---Consolidating of suits---Leave to defend, refusal of---Two suits were pending before Banking Court, one filed by bank and the other filed by one of the defendants, after refusal of leave to defendants in suit filed by bank, Banking Court allowed application of defendant and consolidated both the suits---Plea raised by bank was that both the suits could not be consolidated---Validity---Dismissal of application for leave to defend the suit meant that accounts between parties could be settled without recording of evidence---When no evidence was required to settle accounts, then decree for settlement of accounts was to follow as no other step was left in the suit to be taken other than passing of decree on the basis of accounts already placed before court by parties---After dismissal of application for grant of leave to defend the suit, law had envisaged that suit should be decreed forthwith---At a stage when only decree was to be passed in a suit, consolidation of such suit with any other suit in which evidence was to be recorded would defeat the object of S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Order of consolidation passed by Banking Court also had the effect of nullifying the order whereby application for leave to defend the suit was dismissed, therefore, such order of consolidation of suits could not be sustained in law---Banking Court had violated the provisions of S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001, therefore, order for consolidating the suits was not sustainable and the same was set aside---High Court directed Banking Court to conclude/decide the suit filed by petitioner bank expeditiously under S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001--- Petition was allowed accordingly.

Muhammad Shafi and others v. Habib Bank Ltd. and others SBLR 2010 Sindh 1573; Messrs Tank Steel and Re-Rolling Mills (Pvt.) Ltd., Dera Ismail Khan and others v. Federation of Pakistan and others PLD 1996 SC 77; Messrs First Women Bank Limited v. Registrar, High Court of Sindh, Karachi and others 2004 SCMR 108; Pakistan through Secretary Ministry of Food and Agriculture v. Special Court (Banking) Sindh and others 1991 SCMR 2355; Zarai Taraqiati Bank v. Laeeq Ahmed 2009 SCMR 301; Muhammad Yaqoob v. Behram Khan 2006 SCMR 1262; Messrs Tri-Star Polyester Limited and another v. Citi Bank 2001 SCMR 410; Bolan Bank Limited v. Capricorn Enterprises (Pvt.) Ltd. 1998 SCMR 1961; Syed Ali Azhar Naqvi v. The Government of Pakistan through Secretary, Ministry of Finance, Islamabad and 3 others PLD 1994 Kar. 67; M.A. Kareem Iqbal v. Presiding Officer, Banking Court No.III and 4 others 2003 CLD 1447; Karachi Pipe Mills Limited v. Habib Bank Ltd. and another 2003 CLD 1487; Marhaba Textile Ltd. v. Industrial Development Bank of Pakistan 2003 CLD 1822; Ms. Afshan Ahmed v. Messrs Habib Bank Limited and another 2002 CLD 137; Karachi Water and Sewerage Board through Managing Director v. Messrs M.A. Majeed Khan and 2 others 2002 CLC 566; Muhammad Ashraf and others v. Union Bank of Middle East and others 1991 MLD 2037; Al-Shams Apparel (Pvt.) Ltd. through Chief Executive and 3 others v. Muslim Commercial Bank Ltd. through Chief Manager/Manager Shadman Colony Branch, Lahore and another 2002 CLD 1407; Muslim Commercial Bank Limited through Chief Manager and Principal Officer v. Judge Banking Court No.2, Faisalabad and 8 others 2002 CLD 991 and Doha Bank Limited through Duly Authorized Attorney v. Javaid Carpets (Pvt.) Ltd. through Managing Director and 6 others 2001 MLD 1532 ref.

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

----S. 10(11)--- Constitution of Pakistan, Art. 199---Constitutional petition--- Maintainability--- Expeditious disposal of case---Banking Court, after dismissal of application for leave to defend filed by defendant, consolidated the suit with another suit which was filed by defendant--- Validity--- Constitutional petition was maintainable as constitutional jurisdiction of High Court could be invoked by an aggrieved party who had no other remedy---Banking Court failed to exercise jurisdiction which was vested in it under S.10(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001--- Petition was maintainable in circumstances.

Rasheed A. Akhund for Petitioner.

Muhammad Ilyas Khan Tanoli for Respondent No.3.

Nemo for Respondent No.2.

Date of hearing: 16th May, 2012.

2012 C L D 1588

[Sindh]

Before Muhammad Shafi Siddiqui, J

NADIR AKMAL KHAN LEGHARI and others---Plaintiffs

Versus

ASIM ARSHID and others---Respondents

Suit Nos. 222 and 293 of 2012, decided on 13th August, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 214, 215, 216 & 217----Trusts Act (II of 1882), S.88---Contract/arrangement/negotiations to be made by company with a third person---Directors(s) having personal conflicting interest in such contract etc.---Duties/loyalty of such Directors(s) towards company stated.

Section 214 of the Companies Ordinance, 1984 deals with the obligation of the director, who has interest in any contract or arrangement entered into by the company to disclose his interest to other directors and imposition of penalties for not disclosing his interest. From the bare reading of this section, it appears that the object of this section to compel a director to disclose his personal interest when there is possibility of such interest conflicting with their duties to the company as its director, and thus to avoid there being such a conflict which would remain unknown. Section 214 further stretches down to the effect that the disclosure of interest must be made at a meeting of the directors. A director is in fiduciary relationship with the company, and it is a general rule of equity that no one who has such duties to discharge shall be allowed to enter into engagement or negotiations in which he is or can have a personal interest conflicting or which may conflict with the interest of those whom he is bound to protect. The company is entitled for the services of its directors in terms of the Companies Ordinance, 1984. The company is a separate and distinct legal entity and the directors perform duties under the law.

Subsection (6) of section 214 deals with the penalty, which makes the operation of this section as of a mandatory in nature.

Under section 217, the directors can be declared to be lacking fiduciary behaviour, if they contravene the provisions of section 214 or subsection (1) of section 215 or section 216 of the Companies Ordinance, 1984. Section 217 makes other sections such as 214, 215 and 216 as mandatory in nature as it provides a penalty for contravening the aforesaid sections.

As long as the company exists, the relationship of its directors with the company exists. If this legal entity i.e. the company is to survive and live with all dis-functioning, the loyalty of its directors with the company is the first one to continue and it cannot be made is functional and allowed the company to suffocate under such circumstances. This function of loyalty of directors and fiduciary relationship has been taken care of by sections 214 to 217 of the Companies Ordinance, 1984. A company cannot be allowed to live by dis-functioning the aforesaid organ.

More importantly a company should not be allowed to be betrayed by its directors and the company being a separate legal entity is entitled to undivided loyalty from its directors. The directors were enjoying this ship when it was sailing with full pace and providing benefits to its directors, but the Companies Ordinance, 1984 does not allow the directors to get away from the ship when it is in hot water. This is the time when company needed its loyal directors more than any other time and they should make every effort to save the ship from sinking. The directors have derived maximum benefits when it was at its peak and its directors cannot be allowed to betray and become disloyal in difficulties.

Section 88 of the Trusts Act, 1882 defines that a constructive trust shall arise out of all dealings entered into by a person occupying a fiduciary position. Under the circumstances in which his own interest are or may be adverse to that of the beneficiary and a benefit thereby accrues to that person. The underlying principle being that an advantage gained by a person who has got into a position where his duty clashed with his interest, is not countenanced by a court of Equity.

Duties of the directors towards a company are the prime factor as far as smooth sailing of the company is concerned. The director's loyalty to the company and the duty to observe that no conflict principle, which embraced a duty not to make a secret profit/benefit for himself. The parties/directors owe fiduciary duties to a company as they were appointed to direct the affairs of the company for its benefit. It should be the prime consideration to use their position to promote its success and to protect its interest in accordance with the equitable principle. Thus a company is entitled to the undivided loyalty of its directors. If a director obtains the opportunity for himself (while being a director), he will be liable to the company for breach of duty regardless of the fact that he acted in good-faith or that the company could not and would not take advantage of the opportunity.

The loyalty of a director for his company is indispensable and is a prime consideration and under no stretch of imagination one can blink his eyes towards the importance of fiduciary relationship. The directors are supposed to swim and sink with the company, but the element of being disloyal cannot be accepted under any circumstances.

PLD 1995 Lah. 264; Island Export Finance Limited v. Umunna and another of Queen's Bench Division; Baiston Limited and another v. Headline Filters Limited and another (in the High Court of Justice - Chancery Division; Foster Bryant Surveying Limited v. Bryant, Savernake Property Consultants Limited ([2007] EWCA Civ. 200); Thermascan Ltd. v. Norman (Chancery Division); Vaishnav Shorilal Puri and others v. Kishore Kundanlal Sippy and others; Can. Aero v. O'Malley ([1974] SCR 592); PLD 1992 SC 276; 1986 MLD 1870; (1972) 2 AER 162 and (2012) B.C.C. 72 ref.

PLD 1963 Dacca 269 and PLD 1982 Kar. 172 rel.

Khalid Javed Khan for Plaintiffs (in Suit No.293 of 2012).

Salman Talibuddin for Plaintiffs (in Suit No.222 of 2012).

Salman Talibuddin for Defendant No.1 (in Suit No.293 of 2012).

Taha Ali Zia for Defendants (in Suit No.222 of 2012).

2012 C L D 1623

[Sindh]

Before Muhammad Shafi Siddiqui, J

NIB BANK LIMITED---Plaintiff

Versus

TERRY TOWELLERS (PVT.) LIMITED and 2 others---Defendants

Suit No.B-65 of 2009, decided on 13th August, 2012.

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

----Ss. 9 & 15---Civil Procedure Code (V of 1908), O. XXI, Rr. 58 & 62---Suit for recovery was decreed and machinery of judgment-debtor was to be auctioned---Objection Application to enforcement of decree---Contention of the objector inter alia was that he was the landlord of the premises where the machinery was kept; that arrears of rent had been due to him and that he on his own expense moved the machinery to a godown and had incurred rent for the same---Contention of the objector was that he be compensated for the costs incurred by him from the sale proceeds of the machinery---Validity---Claims of the objector were flimsy and he had not kept record of the accounts or payments by cash for the godown and it was inconceivable that he was incurring expenditures on a person who in arrears of rent and with whom he was litigating---Machinery was hypothecated/pledged with the decree holder Bank and even otherwise it was the preferential right of the decree holder Bank to auction the machinery against their claim---Claim of objector was without merit---Application was dismissed, in circumstances.

Naveedul Haq for Plaintiff.

Muhammad Farooq for Objector.

Abdul Rehman for Defendant.

Date of hearing: 9th August, 2012.

2012 C L D 1641

[Sindh]

Before Shahid Anwar Bajwa, J

PROVINCE OF SINDH through Secretary, Food Department, Government of Sindh and another----Appellants

Versus

Messrs JAKHARNI ROLLER FLOUR MILL, JACOBABAD through Manager----Respondent

First Civil Appeal No.3 of 2011, decided on 22nd March, 2012.

(a) Sale of Goods Act (III of 1930)---

----Ss. 35 & 36---Delivery of goods in absence of an express agreement/contract between the parties---Scope---Date, place and time of delivery is to be decided by express contract between the parties, but where there is no express contract, delivery will be governed by Ss.35 and 36 of the Sale of Goods Act, 1930, and in such a case it is the duty of the buyer to apply for delivery, however it is available to the seller to deliver the goods without any application in that behalf by the buyer, but the seller is also entitled to wait until buyer applies for the delivery---Seller is not bound to deliver the goods unless the buyer applies for delivery but when the buyer applies for delivery, he must demonstrate that he was ready and willing to perform his part of the contract.

Alapaty Ramamoorthy and others v. Polisetti Satyanarayana AIR(sic), Andhra Pardesh 550; Syed A. and M. Wazir Ali v Haji Abu Baker PLD 1957 (W.P) Kar. 913; Seth Mangoomal Jessassing v Hansraj Kooverjee & Co. AIR 1935 Rangoon 166; Messrs Muhammad Amin Muhammad Bashir Ltd. v. Messrs Muhammad Amin Bros. Ltd. PLD 1969 Kar. 233 and Kamruddin Kadibhair and Co. v. Municipal Committee, Anjangaon, AIR (38) 1951 Nagpur 148 rel.

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

----O. XLI, R. 6---Appeal filed against decree which has been executed---Maintainability---In view of 0. XLI, R. 6, C.P.C, where appeal is filed against a decree and no stay order is granted, though the decree may be executed, but the appeal does not abate.

(c) Sale of Goods Act (III of 1930)---

----S. 35---Buyer to apply for delivery---Scope---Language of the section clearly indicates that the provision is intended for the benefit of the seller---Seller, may, if he chooses, deliver the goods without any application in that behalf by the buyer, but he was also entitled to wait until the buyer applies for delivery, unless he has contracted himself out of this right.

Alapaty Ramamoorthy and others v. Polisetti Satyanarayana, AIR(sic) Andhra Pardesh 550 quoted.

(d) Sale of Goods Act (III of 1930)---

----S. 35---Contract for sale of goods---Buyer to apply for delivery---Scope---Section 35 of Sale of Goods Act, 1930, imports into all contracts of sale of goods, a term that the seller is not bound to deliver the goods until the buyer applied for delivery, which may be negative only by the actual words used in the bargain between them or a true consideration of those words.

Alapaty Ramamoorthy and others v. Polisetti Satyanarayana, AIR(sic)Andhra Pardesh 550 quoted.

Abdul Hamid Bhurgi, Additional A.-G. Sindh for Appellants.

Inayatullah Morio for Respondent.

Date of hearing: 2nd February, 2012.

2012 C L D 1670

[Sindh]

Before Faisal Arab and Aqeel Ahmed Abbasi, JJ

TRYCOT SYNTHETIC FIBRE COMPANY through Proprietor and another---Appellants

Versus

HABIB BANK LIMITED---Respondent

Ist Appeal No.52 of 2009, decided on 16th April, 2012.

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

----Ss. 3 & 22---State Bank of Pakistan BCD (Banking Control Department) Circulars Nos.13 & 34---Islamic financing--- Buy-back price--- Scope--- Excess amount claimed by financer (customer) over and above the buy-back price would convert the transaction into an interest based transaction, which was prohibited under the Islamic modes of financing introduced under BCD (Banking Control Department) Circulars 13 & 34 of the State Bank.

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

----Ss. 3 & 22---Islamic financing---Provision of prompt payment bonus--- Effect on buy-back price---Amount that is determined to be payable as prompt payment bonus within the stipulated time is to be regarded as actual buy-back price and anything above this buy-back price would enter the transaction into the realm of interest based financing, and once financier agrees to a lesser amount for settlement of his claim then he cannot charge any amount over and above such lesser amount---Accounts have to be settled at such lesser amount under the Islamic mode of financing, therefore, any amount that is charged in excess of this amount i.e. after deducting prompt bonus would certainly bring the transaction within the ambit of interest, which would convert a permissible transaction under Islamic banking laws into a non-permissible interest based transaction.

2007 CLD 1655 and 1999 MLD 1888 ref.

Filzholmes v. The Bank of Upper India Ltd. AIR 1923 Lah. 548 distinguished.

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

----Ss. 3 & 22---Depositing outstanding amount after default date--- Calculation of cost of funds--- Scope---Default in repayment of amount is to be treated only to the extent of the outstanding amount that is not repaid within the contractual period but is deposited subsequently---Cost of funds is to be calculated only on the defaulted sum at the rates applicable from the date of commission of default till the defaulted sum was deposited in the Banking Court.

Appellant No.1 in person.

Mrs. Sofia Saeed Shah for Appellant No.2.

Aziz-ur-Rehman for Respondent.

Date of hearing: 6th March, 2012.

2012 C L D 1734

[Sindh]

Before S. Hasan Azhar Rizvi and Muhammad Shafi Siddiqui, JJ

ADAM SUGAR MILLS LIMITED----Petitioner

versus

FEDERATION OF PAKISTAN through Secretary Ministry of Commerce and 2 others----Respondents

Constitutional Petition No.D-2188 of 2012, decided on 10th July, 2012.

(a) Constitution of Pakistan---

----Art. 199---Constitutional petition---Public contract---Judicial review, powers of---Scope---If action of public functionary in awarding contract lacks transparency, constitutional petition would lie, as it has been their constitutional obligation to act fairly and justly while performing administrative functions---If any unfair or arbitrary actions are complained of or discrimination is agitated, such grievances can be dealt with in exercise of its powers of judicial review under Art. 199 of the Constitution, if High Court is otherwise satisfied that action complained of is arbitrary and unfair and the same can be struck down.

Reliance Consultancy v. Federation of Pakistan 2010 CLC 1046 and Arif Builders and Developers v. Government of Pakistan PLD 1997 Kar. 627 rel.

(b) Public Procurement Rules, 2004---

----R. 48--- Constitution of Pakistan, Art. 199---Constitutional petition--- Alternate and efficacious remedy---Petitioner sought declaration that categorization of petitioner as defaulter and action taken by authorities on that basis was perverse, arbitrary and unjustified and petitioner had been deprived to participate in tenders for all times to come---Validity--- Such situation was not dealt with by Rule 48 of Public Procurement Rules, 2004---Procurement agency itself formulated committee under Rule 48 of Public Procurement Rules, 2004, and the same did not provide efficacious and alternate remedy---Petition was maintainable in circumstances.

(c) Public Procurement Rules, 2004---

----R. 48---Constitution of Pakistan, Arts.18, 25 & 199---Constitutional petition---Public tender, awarding of---Defaulter--- Determination--- Petitioner-company was excluded by Corporation calling for tenders from participating in bidding pursuant to public tender on the ground of its being defaulter---Validity---Petitioner on payment of outstanding dues in terms of award, could not be termed as defaulter and could not be ousted to participate in tender process---Act of ousting of petitioner to participate in tender lacked authority and jurisdiction and was violative of Articles 18 and 25 of the Constitution---Such acts and decisions of public functionaries were amenable to constitutional jurisdiction and petitioner had rightly challenged arbitrary and unjustified decision---Tendering Corporation was a public functionary / procuring agency and was obliged to procure such service by means of open competitive biddings in fair and transparent manner and discretion that such public authorities enjoyed, could not be exercised in an arbitrary and capricious manner---Open competitive bidding was invariably the best method for ensuring transparent and unobjectionable process---Petitioner had been wrongly ousted from participating in tender and its categorization as permanent defaulter was not sustainable under law---Petitioner was entitled to participate in bid and was also entitled for required quota of 10,000 Metric Tons for which it had submitted its bid--- Petition was allowed accordingly.

2010 CLC 1810; 2006 CLD 674; 1999 MLD 1238; PLD 1967 SC 530; 2009 MLD 1399; PLD 1996 SC 109; PLD 1998 Kar. 79; Messrs Huffaz Seamless Pipe Industries v. Allied Bank of Pakistan Limited 2001 CLC 713; 2010 CLD 1829; 1998 CLC 221; 2010 CLD 1838; 2001 MLD 1876; Gatron (Industries) Ltd. v. Government of Pakistan 1999 SCMR 1072; Kamran Industries v. Collector of Customs (Exports) PLD 1996 Kar. 68; Gul Ahmed Textile Mills v. Collector of Customs (Appraisement) 1990 MLD 126; 1990 CLC 1044; PLD 2003 SC 322; Hydri Ship Breaking Industries v. Sindh Government and others 2007 MLD 770; Messrs S. Abdulla and Co. v. Collectors of Customs (Appraisement) PLD 1992 Kar. 258; Messrs Pacific Multinational (Pvt.) Ltd. v. Inspector-General of Police PLD 1992 Kar. 283; SBLR 2011 Sindh 1249; Mehmoodul-Hassan v. Government of Sindh 2011 PLC 258; BP Pakistan Exploration and Production Inc. v. Additional Commissioner Karachi 2011 PTD 647; Muhammad Akbar Shah v. Federation of Pakistan and others 2011 MLD 1484; Messrs KSB Pumps Company Ltd. v. Government of Sindh 2011 MLD 1876; Pakistan Barmah Shell Ltd. v. Mrs. Nasreen Irshad and others 1989 SCMR 1892 and 2006 PCr.LJ 263 ref.

Yousuf Ali Sayeed for Petitioner.

Sadaqat Ali Khan Standing Counsel for Respondent No.1.

Rafique Kalwar for Respondent No.2.

Nemo for Respondent No.3.

Date of hearing: 2nd July, 2012.

2012 C L D 1858

[Sindh]

Before Gulzar Ahmed and Shahid Anwar Bajwa, JJ

Messrs SAJID BROTHERS & CO. through Proprietor and 2 others---Petitioners

versus

MANAGER, ALLIED BANK LIMITED and 8 others---Respondents

Constitutional Petition No. D-1780 of 2009, decided on 5th May, 2011.

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

----S. 22--- Constitution of Pakistan, Art. 199---Constitutional petition--- Maintainability--- Appeal---Petitioner assailed order of Banking Court whereby names of respondents in a suit were struck off from the list of defendants---Maintainability---Section 22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 provided an aggrieved person remedy of appeal against a judgment, decree, sentence or final order passed by the Banking Court but did not provide appeal, review, revision against an order accepting or rejecting the application for leave to defend or any interlocutory order of the Banking Court, which did not dispose of the entire case before the Banking Court---Banking Court, in the present case, had decided the application for leave to defend the suit and in doing so had struck off the names of said respondents from the list of defendants---Appeal against such order was expressly barred by law and therefore, there was no warrant for entertaining a constitutional petition and doing so would circumvent and frustrate the law---Constitutional petition being not maintainable, was dismissed.

Sami Ahsan for Petitioners.

Ms. Naheed A. Shahid for Respondents Nos.1 to 4.

2012 C L D 1893

[Sindh]

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

NAWMAN AHMED---Petitioner

Versus

ADJUDICATING OFFICER and 2 others---Respondents

Constitutional Petition No.D-2443 of 2010, decided on 10th May, 2011.

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

----S. 23-C--- Constitution of Pakistan, Art. 199---Constitutional petition--- Maintainability--- Appeal to Appellate Tribunal---Scope---Petitioner assailed orders passed by Joint Director of Adjudication, Foreign Exchange Adjudication Court, State Bank of Pakistan---Maintainability---Remedy of appeal was provided under S.23-C of the Foreign Exchange Regulation Act, 1947 and the constitutional jurisdiction of High Court could not be used as substitute for the appeal or to circumvent limitation prescribed for an appeal---Where a Tribunal existed and was functional, though the Member was not nominated, the proper course was to file appeal before the forum so provided under the law, and in case it was non-functional on account of non-availability of the Member, then such party may approach and invoke the constitutional jurisdiction of the High Court to seek interlocutory relief---Order accordingly.

Haroon Shah for Petitioner.

Naheed A. Shahid for Respondent No.3.

Masood Anwar Ausaf for Respondents Nos.1 and 2.

Aashiq Raza, D.A.-G.

Sher Muhammad K. Shaikh, A.A.-G.

2012 CLD 1915

[Sindh]

Before Faisal Arab and Nadeem Akhtar, JJ

Messrs MOGHUL AND SONS through Partner---Appellant

Versus

NIB BANK LTD. and another---Respondents

Special High Court Appeal No.279 of 2010, decided on 5th April, 2012.

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

----S. 22---Civil Procedure Code (V of 1908), O.XLIII, R. 3---Appeal---Maintainability---Respondents raised objection to maintainability of appeal on the ground that it was not Special High Court Appeal---Validity---Person filing appeal, under S.22(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, was required to give a notice in accordance with the provisions of O.XLIII, Rule.3, C.P.C. to respondents---Appellant issued such notice to both the respondents and appellant had also affixed maximum court-fee of Rs.15,000 on memorandum of the appeal---Word "special" in appeals arising out of judgment, decree, sentence or final order passed by a Single Judge of High Court exercising banking jurisdiction was used in High Court merely as a practice to distinguish such appeals from other High Court appeals filed against interlocutory orders, final judgment and decrees passed by Single Judge of High Court exercising original civil jurisdiction---Words "Special High Court Appeal" appearing in title of appeal had no importance and had no relevance with merits of the case---Appeal was competently filed in circumstances.

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

----S. 9---Banking Court, jurisdiction of---Pre-condition---For assumption of jurisdiction by Banking Court in suit filed by financial institution against customer is "default" of "customer" in fulfilling "obligation" with regard to any "finance".

Procter and Camble Pakistan (Pvt.) Ltd. Karachi v. Bank Al-Falah Ltd. Karachi and 2 others 2007 CLD 1532; Abdul Rahman v. Citibank N.A. 2003 CLD 1843; Bankers Equity Ltd. v. Bentonite Pakistan Ltd. 2003 CLD 931; Karachi Electric Provident Fund v. National Investment Trust 2003 CLD 1026; National Bank of Pakistan v. S.G. Fiber Ltd. 2004 CLD 689; Imtiaz Ahmed v. Platinum Commercial Bank Ltd. 2004 CLD 481; A. Rashid M. Hanif v. Faysal Bank Ltd. 2003 CLD 722; Rainbow Packages Ltd. v. First Elite Capital Modaraba 2004 CLD 1313; Third Edition of 2008 Biswas Encyclopaedic Law Dictionary (Legal and Commercial); Third Edition of Ballentine's Law Dictionary; Advanced Law Lexicon (Volume 1) 2005 Edition and Permanent Edition of Words and Phrases (Volume 10A) rel.

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

----S. 2(c)--- Indemnifier--- Responsibility--- Indemnifier cannot be made liable for more than the amount for which he had agreed to indemnify.

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

----Ss. 2(c), 9 & 22---Recovery of bank loan---Muccaddam (custodian), liability of---Bank sought recovery of loan from Muccaddam (custodian) appointed by bank to take care of mortgaged property---Plea raised by Muccaddam was that Banking Court had no jurisdiction to entertain any such case under Banking jurisdiction---Validity---Mere execution of agreement by Muccaddam did not bring Muccaddam within the definition of "customer" as defined under S.2(c) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and he could not be sued---Bank's legal remedy against Muccaddam, if any, was under original civil jurisdiction, therefore, suit under Financial Institutions (Recovery of Finances) Ordinance, 2001, was not maintainable---Single Judge of High Court had no jurisdiction under Banking jurisdiction to pass judgment and decree against Maccaddam---Plaintiff bank did not comply with mandatory requirements of S.9(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001, in respect of Muccaddam and had not stated anywhere in the plaint about finance availed by him, repayments made by him with dates thereof and amount of finance repayable by Muccaddam---Bank did not establish any case against Muccaddam under Financial Institutions (Recovery of Finances) Ordinance, 2001, as suit against Muccaddam was not maintainable---Division Bench of High Court, in exercise of appellate jurisdiction set aside judgment and decree passed by Banking Court against Muccaddam--- Appeal was dismissed in circumstances.

M. Manzoor Ahmed Paracha v. Habib Bank Ltd. 2007 CLD 571; Citibank N.A. v. Syed Shahenshah Hussain 2009 CLD 1564; Mehr Ashiq Hussain v. Citibank N.A. 2006 CLD 167; Messrs Grace Textile Mills (Pvt.) Ltd. v. Habib Bank Ltd. 2003 CLD 1685; Mst. Saloomi Rana v. First Leasing Corporation Ltd. 2002 CLD 1462; Larkana Sugar Mills (Pvt.) Ltd. and another v. United Bank Ltd. 1993 MLD 1154 and PLD 2012 SC 268 ref.

Mst. Murad Begum and others v. Muhammad Rafiq and others PLD 1974 SC 322; Anwar Ali and others v. Manzoor Hussain and another 1996 SCMR 1770; Amir Shah v. Ziarat Gul 1998 SCMR 593; Chief Engineer, Hydel (North) and Project Director, WAPDA, Warsak v. Zafarullah Shah and another 2003 SCMR 686; Mubarak Ali and others v. Khushi Muhammad and others PLD 2011 SC 155; Citibank N.A., A Banking Company through Attorney v. Riaz Ahmed 2000 CLC 847; Muhammad Ramzan and 4 others v. Agricultural Development Bank of Pakistan through Manager 2004 CLD 1376; Tariq Shahbaz Chaudhry and 5 others v. Bank of Punjab through Attorney and 4 others 2004 CLD 207; Ch. Muhammad Ashraf and another v. Muslim Commercial Bank Ltd. through its Manager 2005 CLD 1685; Shahid Farooq Sheikh v. Allied Bank of Pakistan Ltd., through Manager 2005 CLD 1489 and Bashir Ahmed v. Judge, Banking Court-I, Gujranwala, Division Gujranwala and another 2005 CLD 1728 distinguished.

S. Mazhar-ul-Haque and S. Sammad-ul-Haque for Appellant.

S. Mamnoon Hassan for Respondent No.1.

Respondent No.2 called absent.

Date of hearing: 5th April, 2012.

2012 CLD 1945

[Sindh]

Before Nadeem Akhtar, J

NAVAID AHMED SIDDIQUI and 2 others---Petitioners

versus

OFFICIAL ASSIGNEE---Respondent

Three Insolvency Petitions Nos.Nil of 2012, decided on 3rd August, 2012.

(a) Insolvency (Karachi Division) Act (III of 1909)---

----Ss. 9 & 15(3)---Sindh High Court Rules (Original Side) Rr.586(2) & 586(1)---Insolvency petitions---Petitioners claimed to be agents working at a car showroom and having taken huge investments from different persons---Contention of the petitioners was that having incurred huge losses and after selling all their movable and immovable properties they were unable to settle their liabilities to the investors and accordingly they should be adjudged as insolvent and discharge certificate be issued in respect of their liabilities---Validity---Petitioners admitted before the court that there was no record of import of vehicles, manner of sales proceeds appropriation and claimed that they did not maintain any bank account or books of accounts and did not produce bank statements or income tax assessments---Petitioners had therefore, not complied with the provisions of the Insolvency (Karachi Division) Act, 1909---Specific grounds must have been stated in an application for declaring insolvency and under S.15(3) of the Insolvency (Karachi Division) Act, 1909; when a debtor's application was admitted, he shall unless the court otherwise directed, produce all his books of accounts---Petitioners had admittedly not given any specific grounds/details and had admittedly not complied with mandatory requirements of S.15(3) of the Act---Petitioners could not be adjudged as insolvent unless they obtained a certificate from the Official Assignee under Rule 586(2) of the Sindh High Court Rules (Original Side) which could not be granted under the said Rule 586(2), unless mandatory requirements of Rule 586(1) were fulfilled by the petitioners---Statements of the petitioners before the Official Assignee as well as the reports submitted by the Official Assignee established that the mandatory requirements of Rule 586(1) of the Sindh High Court Rules (Original Side) had not been complied with by the petitioners---Reports of the Official Assignee or contents thereof had not been denied by the petitioners and it appeared that they had not come to the court with clean hands as genuine debtors---Petitioners had filed the petitions in a mala fide manner to save themselves from legal actions which their creditors may initiate against them---Petitioners had, therefore, failed to justify their inability to pay their debts, their insolvency petitions were dismissed in circumstances.

(b) Insolvency (Karachi Division) Act (III of 1909)---

----Ss. 26, 15(3) & 9---Sindh High Court Rules (Original Side), Rr.586(2) & 586(1)---Insolvency petition---Meeting of creditors before adjudication as insolvent--- Scope---Petitioners had not submitted documents which were required to be produced under S.15(3) of the Insolvency (Karachi Division) Act, 1909--- Contention of the petitioners was that the required information/documents could be produced by the petitioners in a meeting of the petitioners' creditors to be called under S.26 of the Insolvency (Karachi Division) Act, 1909---Validity---Said contention was without any force as meeting of creditors under S.26 of the Insolvency (Karachi Division) Act, 1909 could only be called after an order of adjudication against an insolvent was passed and on application of a creditor before the Official Assignee under the Sindh High Court Rules (Original Side)---If no such order of adjudication as insolvent had been passed against the petitioners, no meeting under S.26 of the Act could be called.

Hussain Bux Balouch for Petitioners.

Kadir Bakhsh Umrani, Official Assignee.

Date of hearing: 19th July, 2012.

2012 CLD 1957

[Sindh]

Before Faisal Arab and Nadeem Akhtar, JJ

Mst. PATHANI through Attorney---Appellant

versus

HABIB BANK LIMITED and another---Respondents

First Appeal No.14 of 2012, decided on 9th May, 2012.

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

----S. 15(6) proviso---Sale of mortgaged property---Tenant, eviction of--- Protection--- Pre-conditions--- Protection provided under proviso to S.15(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, is available only to such person who is in occupation of mortgaged property or any part thereof under a bona fide lease and such protection is available till expiry of period of lease---Pre-requisite for seeking protection by a person under proviso to S.15(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, is to show that there is a bona fide lease in his/her favour and burden to show the same lies exclusively upon such person.

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

----Ss. 15 & 22---Sale of mortgaged property---Eviction of tenant---Banking Court, powers of---Appellant resisted execution of decree on the plea that she was bona fide tenant in mortgaged property and could only be evicted by Rent Controller---Validity---Specific powers had been given to Banking Court for eviction of tenants from mortgaged properties, as Financial Institutions (Recovery of Finances) Ordinance, 2001, was a special law, provided lease was bona fide---Appellant who was not a tenant in respect of mortgaged property and her alleged claim of tenancy was not bona fide, was not entitled to seek protection under proviso to S.15(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court declined to interfere in execution proceedings and Banking Court had rightly dismissed application filed by appellant---Appeal was dismissed in circumstances.

Asif Ali Pirzada for Appellant.

Sadruddin Hudda for Respondent No.1.

Sohail Hameed for Respondent No.2.

Date of hearing: 20th April, 2012.

2012 C L D 1976

[Sindh]

Before Munib Akhtar, J

IRFAN NAWAB---Plaintiff

Versus

SONERI BANK LIMITED---Defendant

Suit No.B-77 and C.M.A. No.10220 of 2011, decided on 22nd May, 2012.

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

----S. 15(1)(b)--- Mortgage money--- Documentation---Any collateral document which refers to mortgage is insufficient for the purposes of definition of mortgage money and the same would include a document that may be necessary to be prepared, filed or maintained to meet any statutory requirement.

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

----S. 15---Sale of mortgaged property---Bar to jurisdiction of court---Principles---If there has been any failure to comply with mandatory requirements of any of the subsections of S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001, or a matter does not otherwise come within its terms, bar contained in S.15(12) of Financial Institutions (Recovery of Finances) Ordinance, 2001, cannot be applied.

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

----Ss. 12(b) & 15---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Sale of mortgaged property---Interim injunction, grant of---Defendant bank issued public notice regarding auction of properties of plaintiff customer---Plea raised by plaintiff was that he had paid off secured money and bank had not issued three statutory notices---Validity---In a suit filed by customer, in which sale of mortgaged property was challenged and it was contended that secured money had been paid off, appropriate test would be that for limited purposes of ascertaining whether S.12(b) of Financial Institutions (Recovery of Finances) Ordinance 2001, was engaged, customer's claim should be examined as though it were a leave to defend application filed in suit filed by financial institution---For such purpose, financial institution's pleadings and material placed on record would also have to be examined---If on such basis, it was concluded that claim had raised a leave question with respect to repayment of secured moneys, then for limited purposes, it could be said that moneys had been repaid and thus if a case was otherwise made out, an injunction could be issued---High Court granted interim injunction against sale of mortgaged property without intervention of court---Application for grant of injunction was allowed accordingly.

Sindh High Court Bar Association v. Federation of Pakistan and others PLD 2009 SC 879; Mir Muhammad Idrees and others v. Federation of Pakistan and others PLD 2011 SC 213 and Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 ref.

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

----S. 15--- Transfer of Property Act (IV of 1882), S. 69---Sale of mortgaged property--- Provision of S.69 of Transfer of Property Act, 1882, applies generally to mortgages and moneys advanced or repayable in terms of Transfer of Property Act, 1882, whereas S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001, relates only to mortgage-money, as specifically defined in.

Saalim Salam Ansari and Zeeshan Abdullah for Plaintiff.

Ijaz Ahmed for Defendant.

Dates of hearing: 10th November, 21st November, 12th December, 22nd December of 2011 and 17th May, 2012.

2012 C L D 1995

[Sindh]

Before Faisal Arab and Nadeem Akhtar, JJ

Messrs UNITED BANK LTD. through Authorized Attorneys---Appellant

Versus

M. MUBEEN KHAN---Respondent

First Appeal No.97 of 2010, decided on 30th April, 2012.

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

----Ss. 9 & 22---Recovery of bank loan---Appeal---Cost of funds and service fee---Judgment and decree passed by Banking Court was assailed by bank on the ground that bank was entitled to recover service fee from defendant---Validity---Service which was being rendered by bank to defendant had come to an end on 22-6-2007, when defendant stopped availing facility and credit card in question was cut into two pieces and was dropped by him in drop box of concerned branch of the bank---No justification was available for charging service fee after such date as the same would have been justified only if defendant after committing default was still utilizing the facility and bank was rendering services to him---Rate at which service fee was to be charged by bank was never agreed by parties nor any specific rate was mentioned in plaint and statement of accounts---Mark-up/profit could not be charged without mutual agreement and/or beyond mutually agreed period---Customer could not be penalized twice for the same wrong/default and for the same period, that was, default in fulfilment of his obligation by charging service fee or any other type of penalty from him from the date of default on one hand and on the other hand by claming cost of funds from him with effect from the same date of default---Cost of funds having been granted to bank by Banking Court from the date of default on the amount claimed by bank, therefore, bank was not entitled to service fee for the same period---High Court declined to interfere in judgment and decree passed by Banking Court---Appeal was dismissed, in circumstances.

Mst. Jannat Bibi v. Sher Muhammad and others 1988 SCMR 1696; Malik Muhammad Faisal and others v. State Life Insurance Corporation through Chairman and 2 others 2008 SCMR 456; Sh. Fateh Muhammad v. Muhammad Adil and others PLD 2007 SC 460; Zulifqar and others v. Shahadat Khan PLD 2007 SC 582; Bin Yamin and 3 others v. Choudhry Hakim and others 1996 SCMR 336; Dr. Zia-ur-Rehman Khan and others v. Dr. Atiq-ur-Rehman Khan PLD 2009 Lah. 641; Messrs C.M. Textile Mills (Pvt.) Ltd. through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587; Haji Fazal Elahi and Sons through Muhammad Tariq v. Bank of Punjab 2004 CLD 162; Muhammad Sharif and Sons through Proprietor and another v. United Bank Ltd. 2004 CLD 974 and Muhammad Akram Choudhry v. Style Enterprises (Pvt.) Ltd. 2004 CLD 1714 ref.

S.M.S. Bukhari v. Citi Bank N.A. 2004 CLD 1247 distinguished.

Shahab Sarki for Appellant.

Respondent called absent.

Date of hearing: 10th April, 2012.

2012 C L D 2027

[Sindh]

Before Tufail H. Ebrahim, J

Mst. NUSRAT MUFTI---Plaintiff

Versus

MUHAMMAD HANIF and another---Defendants

Suit No.541 of 2009, decided on 8th December, 2009.

Negotiable Instruments Act (XXVI of 1881)---

----S. 118--- Civil Procedure Code (V of 1908), O.XXXVII, Rr.2 & 3---Limitation Act (IX of 1908), S.5---Suit for recovery of amount on bais of dishonoured cheque---Time barred leave application without condonation application under S.5 of Limitation Act, 1908---Validity---Defendant had failed to obtained leave to defend suit, thus, contents of plaint would be deemed to be admitted---Suit was based on negotiable instrument, thus, suit cheque would be presumed to have been issued against consideration---Plaintiff was entitled to decree against defendant, who had issued suit cheque---Suit was decreed with costs and mark-up/profit @ 12.5% per annum from date of suit till realization of decretal amount.

Adeel Abid for the Plaintiff.

Date of hearing: 7th October, 2009.

2012 C L D 1

[Lahore]

Before Mehmood Maqbool Bajwa, J

SHAUKAT ALI and others---Petitioners

Versus

THE STATE and others---Respondents

Writ Petition No. 2495 of 2010, decided on 21st October, 2011.

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

----S. 7(4)---Penal Code (XLV of 1860), S. 406---Constitution of Pakistan, Art. 199---Constitutional petition---Breach of trust---Quashing of F.I.R.---Petitioner obtained loan from complainant Bank and mortgaged assets and properties, besides hypothecation of stock---Complainant Bank on inspection of stock, noted deficiency therein and intimated the petitioner but their grievance was not properly redressed---Case under S. 406, Penal Code, 1860 was got registered against petitioner for mis-appropriation of hypothecated stock--- Petitioner's contention was that under S.7(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 the only remedy available to complainant Bank was to file complaint before Banking Court to decide the matter as there was embargo under the Ordinance to avail remedy under any ordinary law, either civil or of criminal nature---Validity---No order for quashing of F.I.R. could be passed in absence of any finding that the offences mentioned in F.I.R. were false and malicious and there was no finding that a particular forum or mode had been prescribed with respect to taking of cognizance of an offence which also implied prohibition regarding the registration of F.I.R.---Registration of F.I.R. and taking of cognizance of cases were two distinct and independent concepts under the criminal law---If the intention of law-maker was to put any clog on the registration of F.I.R. then the legislature would have said so specifically and if the law put a condition only on the taking of cognizance then it could never be read to imply prohibition on registration of F.I.R.---Petition was dismissed in circumstances.

Murshid Ali and 4 others v. SHO, Police Station Saddar Khanewal and another 2011 PCr.LJ 1763; Nizar Ali Fazwani and another v. Messrs Pak Golf Leasing Company Limited and another 2009 PCr.LJ 325; Malik Tariq Mehmood v. Messrs Askari Leasing Ltd. 2009 CLD 1422; Muhammad Iqbal v. Station House Officer and 2 others 2009 CLD 1149 and Sabir Ahmed v. Nazeer Ahmed and another 2010 PCr.LJ 412 distinguished.

Shaikh Muhammad Taqi v. The State 1991 PCr.LJ 963; Ghulam Sarwar Zardari v. Piyar Ali alias Piyaro and another 2010 SCMR 624; Zahid Jameel v. SHO and others (W.P. No. 7635 of 2008); Mahmood Akhtar Khan v. The State and 2 others 2010 CLD 639; Asif Mehmood Bhatti v. Federal Investigation Agency and 2 others 2002 YLR 3847; Muhammad Saleem Bhatti v. Syed Safdar Ali Rizvi and 2 others 2006 SCMR 1957; Haji Sardar Khalid Saleem v. Muhammad Ashraf and others 2006 SCMR 1192 and Col. Shah Sadiq v. Muhammad Ashiq and others 2006 SCMR 276 ref.

Industrial Development Bank of Pakistan and others v. Mian Asim Fareed and others 2006 SCMR 483 fol.

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

----S. 561-A---Quashing of F.I.R.---Allegation of malice, effect of---F.I.R. can be quashed if the very registration of case is proved to be mala fide on the record but mere allegation of malice does not confer jurisdiction to grant such relief.

Mian Manzoor Hussain for Petitioners.

Rana Shamshad Khan, Assistant Advocate-General for the State.

Muhammad Ahmad Pansota for Respondents Nos. 3 and 4.

2012 C L D 83

[Lahore]

Before Ijaz ul Ahsan, J

FAT ENTERPRISES through Managing Partner, Lahore---Petitioner

Versus

GOVERNMENT OF PUNJAB and 3 others---Respondents

Writ Petition No.228 of 2010, decided on 17th August, 2011.

(a) Words and phrases---

----"Theatre and related fields"---Definition---Production of stage plays would fall within definition of phrase "theatre and related fields".

(b) Lease---

----Bids for lease of cinema/theatre at expiry of its previous lease, invitation of---Plea of incumbent lessee that during previous lease of ten years, he had made huge investment for installation of equipment, seats and converting cinema into cinema-cum­-theatre, thus he had automatically earned preferential right to its fresh lease---Validity---Incumbent lessee had given undertaking to lessor that he would not claim any such preferential right by virtue of such investment at time of expiry of his lease---Had such been an intention of parties to give such preferential right to incumbent lessee, then same would have been incorporate in his lease---Incumbent lessee, therefore, had no such right.

(c) Constitution of Pakistan---

----Art. 199---Constitutional petition---Bids for lease of cinema, invitation of---Petitioner claimed to be highest bidder by offering to pay a sum of Rs.3,50,000 per month for being sole bidder---Acceptance of respondent's bid by Authority for being higher than petitioner by Rs.81,000 per month---Petitioner's willingness to offer Rs.4,50,000 per month instead of Rs.4,31,000 as offered by respondent---Respondent's willingness to improve upon petitioner's offer by offering Rs.4,75,000 per month---Process of improving upon offer made by each party before court culminated in a final bid of Rs.10,25,000 per month offered by respondent---Petitioner failed to match such bid of respondent---Interest of Authority stood adequately served by increase in rent from Rs.4,31,000 per month to Rs.10,25,000---High Court dismissed constitutional petition with observations that Authority would grant lease to respondent according to standard terms and conditions subject to payment of rent @ Rs.10,25,000 per month in addition to security deposit and other charges, if any, required to be paid under relevant rules and regulations.

Ali Sibtain Fazli for Petitioner.

Syed Moazzam Ali Shah for Respondent No.1.

Imran Aziz Khan and Ghulam Murtaza Chaudhry for Respondent No.3.

Faisal Zaman Khan, Additional Advocate-General.

Date of hearing: 9th May, 2011.

2012 C L D 98

[Lahore]

Before Rauf Ahmad Sheikh, J

TALIB HUSSAIN----Appellant

Versus

ABDUL SHAKOOR----Respondent

R.F.A. No.40 of 2004, heard on 20th September, 2011.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr.2 & 3---Negotiable Instruments Act (XXVI of 1881), S.118(a)---Suit for recovery of amount on the basis of Promissory Note---Petition for leave to defend suit---Words "until the contrary was proved" occurring in S.118(a), Negotiable Instruments Act, 1881---Connotation---Maker of the promissory note furnished an unconditional undertaking to pay on demand or at a fixed or determinable future time the amount mentioned therein---Under S.118(a) of the Negotiable Instruments Act, 1881, a presumption was attached to the negotiable instrument that it was for consideration---Words "until the contrary was proved" as used in S.118 of Negotiable Instruments Act, 1881, had revealed that said presumption was rebuttable and the maker of instrument, even if he admitted the execution and had signed the same, could lawfully prove that the same was without consideration---Onus to prove the same would lay on the maker---In the present case, defendant had categorically contended that the promissory note and the cheques were obtained as guarantee on account of mutual trust and same were without consideration---No counter-affidavit in that regard was filed along with the reply---Trial Court, in circumstances, should have not declined to grant the leave to defend as cogent reasons for allowing the same did exist---Whenever the court was satisfied that plausible defence had been put forth by the defendant, then the grant of leave to defend under O.XXXVII, R.3, C.P.C. was necessary and expedient for ends of justice---By disallowing the petition for leave to defend and consequently on passing the impugned judgment and decree, Trial Court had committed material illegality causing gross miscarriage of justice---Impugned judgment and decree were set aside, and petition for leave to defend moved by the defendant was accepted, in circumstances.

Muhammad Azizur Rehman v. Liaquat Ali 2007 SCMR 1820 and Altaf Sarwar v. Shamas Din 2005 YLR 2614 ref.

Rao Jamshaid Ali Khan for Appellant.

Tariq Zulfiqar Ahmad Choudhary for Respondent.

Date of hearing: 20th September, 2011.

2012 C L D 298

[Lahore]

Before Muhammad Ameer Bhatti, J

Messrs SYED BHAIS (PVT.) LTD. through Director---Petitioner

Versus

GOVERNMENT OF PUNJAB through Secretary Local Government and 3 others---Respondents

Writ Petitions Nos. 10703, 10823 and 10945 of 2011, decided on 7th July, 2011.

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

----S. 196---Constitution of Pakistan, Art. 199---Constitutional petition---Company---Only competent person can file and initiate legal proceedings---Act of ratification of petition can only be availed, if Directors were empowered in the Articles of Association.

2005 CLD 1208 ref

(b) Constitution of Pakistan---

----Art. 199---Constitutional petition---Scope---Contractual obligation--- Unclean hands of petitioner--- Effect---Petitioners having failed to perform their obligations within the stipulated period, had no right to seek any remedy before the High Court with unclean hands.

PLD 2009 SC 28 and 2007 SCMR 1318 ref

(c) Continuation of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope--- Contractual obligation--- Arbitration clause mentioned in the contract---Disputed questions of fact---Controversy between the parties hinged upon the pivotal point as to whether the physical work (construction) executed by the petitioners was in accordance with the contract or not---Such question, held, could not be resolved by High Court in exercise of constitutional jurisdiction under Art.199 of the Constitution, as the court had no mechanism to resolve the question involved---Where the disputed questions of facts had been raised, particularly when floating at the surface of the record and arbitration clause was provided in the contract, constitutional petition was not maintainable, however each case had to be decided on its own peculiar facts and circumstances.

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

----S. 24-A--- Constitution of Pakistan, Art. 199---Constitutional petition--- Contractual obligation not covered by any statute---Benefit of S.24-A of General Clauses Act, 1897 could not be extended to the petitioners---Principles.

(e) Constitution of Pakistan---

----Art. 199---Companies Ordinance (XLVII of 1984), S.196---Constitutional petition--- Maintainability--- Company---Constitutional petition, in the present case, had not been filed by the petitioner on the basis of the resolution of the company---Effect---When law required a thing to be done in a particular manner, the same must be done accordingly and if prescribed procedure was not followed, presumption would be that the same had not been legally done---Subsequent resolution of the company authorizing the petitioner to ratify would not resolve the issue as for that matter there should have been some powers vesting in the Directors to ratify the wrong and no such power had been provided in the Memorandum and Articles of the company---Constitutional petition, on such score, was not maintainable.

2005 CLD 1208 ref

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

----S. 126---Bank guarantee---Default---Written demand---Notice of default before encashment---Words of guarantee made it clear that the very first written demand constituted the notice of default, meaning thereby that the "notice of default" and "on such written demand" had been amalgamated into one and there was no need to serve notice separately---Guarantee must follow its terms and conditions---Guarantee was an independent and self-governing document and only words of the same could be considered for its decision without considering agreement or contract for making any decision on it---Principles.

(g) Interpretation of statutes---

----Any condition cum provision of law which has no consequence is considered advisory and directory but not having any mandatory consequence--- Provision which has no mandatory effect, if not complied with, does not vitiate the effect of the act/order for that matter.

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

----S. 126--- Bank guarantee--- Encashment--- Scope--- Bank guarantee shall be considered for its encashment along with its conditions---Encashment by Bank in violation of the terms of the guarantee---Effect.

PLD 2003 SC 191 ref

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

----S. 126--- Constitution of Pakistan, Art.199---Constitutional petition--- Bank guarantee--- No terms attached to the guarantee and no form of default asserted therein---Once guarantee placed for encashment cannot be stayed and Bank is bound to encash it and courts are refrained to interfere in such like matters.

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

----S. 126--- Constitution of Pakistan, Art.199---Constitutional petition---Bank guarantee---Arbitration clause provided in the contract---Effect---Once such guarantee put for encashment cannot be stayed and has to be encashed and aggrieved person may challenge the encashment in the ordinary course of law or avail the remedy of arbitration as provided under the contract.

(k) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Scope---While sitting in writ jurisdiction, High Court cannot delve upon factual depth to resolve the whole dispute in a slipshod manner---Questions which involve factual controversies cannot be resolved by High Court through summary procedure under Article 199 of the Constitution---Where the matter needs evidence which exercise cannot be undertaken by High Court for which the petitioners have to approach the proper forum.

Kh. Saeed-uz-Zafar, Asjad Saeed and Ch. Muhammad Naseer for Petitioner

Shakil-ur-Rehman, Additional Advocate-General along with Shehryar Sultan DG, LG and CD Department and Ch. Abrar Ahmad, Director Legal, LG and CD Department.

Khurram Mushtaq for Respondents Nos. 1 to 3.

Syed Shadab H. Jafferi and Pervaiz Akhtar Tahir for Respondent No.4

Dates of hearing: 16th, 17th, 20th, 21st, 23rd and 24th June, 2011.

2012 C L D 429

[Lahore]

Before Ijaz Ahmad Chaudhry, C J

BASHIRAN BIBI and others---Petitioners

versus

PUNJAB COOPERATIVE BOARD FOR LIQUIDATION and others---Respondents

Cooperative Petition No.39 of 2011, decided on 4th November, 2011.

Punjab Undesirable Cooperative Societies (Dissolution) Act (I of 1993)---

----S. 11---Cooperative Societies Act (VII of 1925), S. 31---Bankers' Books Evidence Act (XVIII of 1891), S.4---Qanun-e-Shahadat (10 of 1984), Art. 48---Claim---Proof---Petitioners filed claim before Punjab Cooperative Board for Liquidation on the basis of Special Modarba Receipt duly issued by Finance Corporation in question---Punjab Cooperative Board for Liquidation declined to entertain the claim on the ground of its being forged---Validity---Despite lengthy cross examination on one petitioner as well as the other witnesses while appearing in witness box, the Board failed to shatter their veracity, who remained consistent on all material points---Punjab Cooperative Board for Liquidation instead of producing any evidence to prove their claim, opted to produce documents through Law Officer which were wrongly relied upon by the Judicial Officer while passing order against petitioners---Claim of petitioners was established from the documents produced by them before Judicial Officer who wrongly confined his findings to one Special Modarba Receipt inasmuch as the petitioners filed their claim under different Special Modarba Receipt---Findings of Judicial Officer on all issues were not confidence inspiring rather ran contrary to the record---High Court directed Punjab Cooperative Board for Liquidation to pay the amount to petitioners as claimed by them and set aside the order passed by Judicial Officer---Petition was allowed accordingly.

Muhammad Rasheed Bhatti for Petitioners

Ch. Abdul Ghaffar for Respondents

2012 C L D 451

[Lahore]

Before Sh. Azmat Saeed, J

UNION BANK LIMITED through Manager and another---Petitioners

Versus

MUHAMMAD ASLAM FIAZ KHOKHAR and another---Respondents

Write Petition No. 1098 of 2005, decided on 28th February, 2005.

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

----S. 11---Specific Relief Act (I of 1877), S. 55---Contract Act (IX of 1872), S. 171---Constitution of Pakistan, Art. 199--- Constitutional petition--- Suit for rendition of accounts, mandatory and permanent injunction---Petitioner bank repossessed vehicle of respondent on non-payment of monthly instalments on lease of vehicle and credit card facility---Banking Court, on application for interim relief in suit filed by respondent, directed restoration of vehicle in favour of respondent---Contention of petitioner-Bank was that substantial payment was due from the respondent on credit card facility and that the petitioner Bank had a general banker's lien on the car---Validity---Perusal of order of Banking Court revealed that the question of general banker's lien on credit card liability had not been taken into account or decided---Nature of such lien would depend not only upon the provision of the law applicable but also upon documents executed by the respondent in respect of credit card facility---Grant of interim relief was to be reconsidered after taking into account the rights and obligations of the parties in respect of vehicle in question not only with reference to the documents executed for the lease of vehicle but also with regard to the credit card facility---Order of Banking Court was set aside and case was remanded for decision afresh on application for interim relief---Constitutional petition was accepted, accordingly.

Mian Tahir Maqsood for Petitioners.

Rana Zulfiqar Ali Khan with Miss Khaldia Perveen for Respondent No.1.

2012 C L D 458

[Lahore]

Before Ch. Shahid Saeed, J

MUHAMMAD NADEEM----Petitioner

Versus

ADDITIONAL DISTRICT JUDGE, BHAKKAR and 6 others----Respondents

Writ Petition No.2020 of 2007, decided on 3rd November, 2011.

Arbitration Act (X of 1940)---

----Ss. 20, 30, 34 & 39---Contract Act (IX of 1872), S.73---Specific Relief Act (I of 1877), Ss. 42 & 54---Constitution of Pakistan, Art.199---Constitutional petition---Suit for declaration and permanent injunction---Arbitration proceedings--- Award, objection to--- Damages---Entitlement---Plaintiff who was distributor of defendant company his distributorship having been terminated by defendant, he filed suit for declaration and permanent injunction---Defendant, during pendency of suit, filed an application under S.34 of the Arbitration Act, 1940 for settlement of dispute through arbitration as provided in one of the clauses of the agreement---With consent of the parties, Trial Court referred the matter to arbitrator---Both the parties made a joint statement before the arbitrator that they would abide by the award made by the arbitrator---After hearing the parties, the arbitrator held the plaintiff entitled to get amount Rs.16,49,033 as damages---No objection was raised by defendant before the arbitrator with regard to scope of reference or upon the jurisdiction of the arbitrator---Parties raised no objection on the credibility or jurisdiction of the arbitrator---When arbitrator award was made and announced, the defendant company, seeing the award unfavourable to it, took certain objections with regard to scope of reference for determination of the dispute---Validity---Defendant at that stage could not be allowed to point out any lacuna, whatsoever in the order of reference or the jurisdiction of the arbitrator---When the plaintiff submitted his claim for damages before the arbitrator who also framed issues on that point, ample opportunity was available to the defendant to take objections that neither scope of reference nor agreement allowed the award of damages, but defendant completely failed to do so---Under S.73 of the Contract Act, 1872, damages could be claimed even if there was no clause in the agreement---Award of the arbitrator was in accordance with law and same could not be set aside---Courts below were not justified in law while setting aside the award---Constitutional petition filed by the plaintiff was allowed as prayed for and impugned judgments passed by courts below were set aside, in circumstances.

Messrs Aslam Saeed & Co. v. Messrs Trading Corporation of Pakistan Ltd. PLD 1985 SC 69; Messrs Sirmur Chemical and General Industries Ltd. Nahan v. The Union of India and others AIR 1958 Himachal Pradesh 20; Syed Arif Ali Sabir v. Abdul Samad through LRs and 2 others 2008 YLR 2309 and Messrs Farooq & Co. v. Federation of Pakistan and 3 others 1996 CLC 2030 ref.

Messrs Quality Builders Ltd. v. Karachi Metropolitan Corporation 1999 CLC 1777; WAPDA and another Messrs Khaznzada Muhammad Abdul Haque Khan Khattak and Co. PLD 1990 SC 359 and Messrs Agrimpex Trading Company Ltd. v. Trading Corporation of Pakistan (Pvt.) Ltd. 2004 MLD 477 rel.

Syed Shahab Qutab for Petitioner.

Muhammad Iqbal Akhtar for Respondents.

Date of hearing: 25th October, 2011.

2012 C L D 477

[Lahore]

Before Muhammad Khalid Mehmood Khan and Syed Mansoor Ali Shah, JJ

M. AHMED SH. and 2 others----Appellants

Versus

J.S.B. BANK LIMITED through Branch Manager----Respondent

E.F.A. No.391 of 2011, decided on 5th October, 2011.

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

----S.19---Civil Procedure Code (V of 1908), O. XXI, Rr. 67, 69 & 72---Execution of decree---Auction of mortgaged property---Decree-holder's offer to purchase such property at reserved price made after postponement of auction proceeding by court auctioneer due to non-availability of any bidder---Confirmation of sale in favour of decree-holder by court---Validity---Decree-holder had not obtained permission of court before making such offer---Court auctioneer was legally bound to require decree-holder before entertaining its offer to obtain permission from court---Court before confirming any sale would decide its validity and after coming to conclusion that sale was valid, only then court might confirm same---Decree-holder had only made an offer to purchase such property and that too without permission of court, thus, there was no sale, which could be confirmed by the court---According to O.XXI, R.69(2), C.P.C., where court or court-auctioneer adjourned sale for a longer period than seven days, then fresh proclamation under R.67 thereof would be required to be made except in case of waiver of right by judgment-debtor---Court, in the present case had not issued notice under O.XXI, R.67, C.P.C. for re-conducting sale---Court had ignored mandatory requirement of law while confirming sale on a single offer of decree-holder and that too against reserved price---Execution proceedings had been commenced under C.P.C. and not under S.19 of Financial Institutions (Recovery of Finances) Ordinance, 2001---High Court set aside impugned order for being illegal.

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

----O. XXI, R. 72---Property to be sold in execution of decree---Purchase/sale of such property by/to decree-holder without permission of court---Scope---Such purchase/sale would be voidable if not void in absence of consent of judgment debtor---Principles.

Under Order XXI, Rule 72, C.P.C. if decree-holder intends to participate in auction proceedings, then decree-holder has to obtain permission of executing court.

The perusal of Rule 72, O.XXI, C.P.C. shows that decree-holder will not be permitted to participate in auction proceedings, meaning thereby the law only binds the decree-holder for obtaining permission and it is silent for the permission of judgment-debtor, this clear distinction in law is intentional. The judgment-debtor if will purchase the property, he will offer maximum price as the maximum price will be in his benefit for discharging the liability under the decree, whereas the decree-holder may try to purchase land on lesser price, that is the reason the legislator has taken care of slightest possibility of unfairness which may cause loss to the judgment-debtor, hence the logical conclusion under the provision of Order XXI, Rule 72, C.P.C. is, if the decree-holder intends to participate in auction, he is bound to obtain permission of court and any sale in favour of decree-holder without court's permission will be voidable if not void in the absence of judgment debtor's consent.

(c) Administration of justice---

----Cognizance of a matter taken by court under one procedure---Effect---Proceedings once commenced under such procedure would be finalized thereunder---No pick and choose authority would be available to court in law.

Waqar Mushtaq for Appellants.

Ahmad Pervaiz for Respondent.

2012 C L D 488

[Lahore]

Before Ch. Shahid Saeed, J

RAZA MUHAMMAD---Petitioner

Versus

MUHAMMAD KHAN---Respondent

Civil Revision No. 2660 of 2004, heard on 14th September, 2011.

Arbitration Act (X of 1940)---

----S.30---Award, setting aside of---Misconduct---Arbitrator neither heard parties nor gave reasons in award nor mentioned therein as to which piece of disputed land would be given to each party---Award showing some additions made at its end---Validity---Arbitrator was bound to give cogent reason for making award---Addition of new lines at the end of award, which might be result of some afterthought and non-mentioning of any reason therein would tantamount to glaring misconduct on part of Arbitrator--- Requirements of law having not been met by Arbitrator, award was set aside, in circumstances.

Shoaib Zafar for Petitioner.

Muhammad Riaz Lone for Respondent.

Date of hearing: 14th September, 2011.

2012 C L D 582

[Lahore]

Before Umar Ata Bandial, J

DAWOOD HERCULES CHEMICALS and others: In the matter of

C.O. No.47 of 2010, decided on 27th January, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 284, 285, 286, 287 & 288---Demerger of companies---Scheme of arrangement---Family dispute---Effect---Petitioner companies sought demerger into two separate units and for that purpose scheme of arrangement was prepared---Objector claimed that million of shares in one petitioner company were owned by his deceased father and he sought postponement of demerger till settlement of dispute regarding those shares---Validity---Scheme was approved by 99.99% of the shareholders of one petitioner company present and voting at the extraordinary general meeting which was attended by 89.23% of the total voting power of that company---Similar resolution was unanimously passed by members of the other petitioner company in their extraordinary general meeting held on the same date---All secured creditors of one petitioner company had consented to the scheme being duly implemented and other petitioner had no secured creditors---Security Exchange Commission of Pakistan and Federal Board of Revenue had no objection to the scheme and Commission's proposal about method of calculating value of net assets of one petitioner had been duly accepted by management of that company---Objection to sanction of the scheme filed by non-member of one petitioner company, based on family dispute with certain members of that company, had already been rejected on account of its irrelevance to the proceedings---No ground was available militating sanction of scheme of arrangement approved by huge majority of shareholders of both petitioner companies and duly supported by creditors of such companies---Requirements of S.284 of Companies Ordinance, 1984, imposing statutory safeguards for finalization and sanction of scheme of arrangement were duly met by the petitioners---Scheme approved by shareholders of both petitioner companies was sanctioned by High Court under S.284(3) of Companies Ordinance, 1984---Petition was allowed accordingly.

Kazim Hassan and Khurram Shahzad Chughtai for Petitioners.

Mian Irfan Hassan and Amir Majeed Khan for Objector (Aziz Ahmad Dawood).

Muhammad Asif Hashmi for FBR.

Muhammad Saqlain Arshad, Deputy Director (Legal) SECP.

2012 C L D 645

[Lahore]

Before Umar Ata Bandial, J

J.K. SPINNING MILLS LTD.---Petitioner

versus

J.K. FIBER MILLS LTD. and others---Respondents

C.O. No.14 of 2011, decided on 17th August, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 284 & 286---Merger of companies---Scheme of merger---Liabilities of merging company---Petitioners were two companies one to be merged in the other---Validity---Petitioners had placed on record "No Objection Certificates" issued by secured creditors of petitioners and by Competition Commission of Pakistan---One leasing company had expressed its concern about security of its leased machinery---Petitioners had assured that under the scheme all objections and liabilities of merging entities including their duties in relation to leased finance and leased machinery were to be borne and discharged by surviving entity---Such aspect had been covered under the tendered scheme and the same had settled the concerns of leasing company---No impediment existed to grant and sanction of scheme of merger of one petitioner company into other petitioner company---High Court sanctioned scheme of merger filed by the petitioners---Petition was allowed in circumstances.

Imtiaz Rashid Siddiqui, Asif-ur-Rehman and Qadir Bakhsh for Petitioner.

Iftikhar Ahmad for Standard Chartered Bank/Objector.

M. Saqlain Arshad, Deputy Director (Legal) SECP.

2012 C L D 663

[Lahore]

Before Malik Shahzad Ahmad Khan, J

ALAM DIN---Petitioner

versus

MUHAMMAD HUSSAIN and 2 others---Respondents

Civil Revision No.536 of 2009, decided on 16th November, 2011.

(a) Malicious prosecution---

----Damages for---Plaintiff was mentioned as one of the accused in the F.I.R.---Plaintiff after his arrest in the case remained in judicial lock-up for some period, but acquitted after trial by extending him benefit of doubt---Plaintiff's claim for recovery of damages for malicious prosecution---Proof---Police after holding detailed investigation had declared plaintiff guilty of charges and placed his name in Column No.3 of Challan submitted in Trial Court---Trial Court as well as High Court had dismissed plaintiff's application for his acquittal moved under S.249-A, Cr.P.C., during trial---Prosecution of plaintiff could not be declared to be malicious merely on ground of his acquittal in such case---Trial Court had acquitted plaintiff not on ground of registration of false case, but on ground of failure of prosecution to prove its case beyond reasonable doubt---Acquittal of plaintiff by extending him benefit of doubt would establish that defendant had not lodged such case without reasonable and probable cause and for having malice against plaintiff---Suit was dismissed in circumstances.

Hicks v. Faulkner (1881) 8 QBD 167; Denning L.J. in Tempest v. Snowden (1952) 1 KB 130; Sher Muhammad v. Maula Bux 1995 CLC 1134; Sadaruz Zaman v. The State 1990 SCMR 1277; Feroze Khan v. Fateh Khan and 2 others 1991 SCMR 2220; Mahmood Akhtar v. The Muslim Commercial Bank Ltd. and another PLD 1992 SC 240; Subedar (Retd.) Fazale Rahim v. Rab Nawaz 1999 SCMR 700; Abdul Rauf v. Abdul Razzak and another PLD 1994 SC 476 and United Bank Limited and 5 others v. Raja Ghulam Hussain and 4 others 1999 SCMR 734 rel.

(b) Malicious prosecution---

----Damages for---Factors essential to be proved by plaintiff stated.

The basic elements, on the basis of which a suit for recovery of an amount as damages for malicious prosecution can be accepted or rejected, are that: (a) the prosecution of the plaintiff by the defendant; (b) there must be a want of reasonable and probable cause for that prosecution; (c) the defendant must have acted maliciously i.e. with improbable motive and not to further the ends of justice; (d) the prosecution must have ended in favour of the person proceeded against; and (e) it must have caused damage to the party proceeded against.

Prosecutor may be wrong, but if he honestly believed that accused had committed a criminal offence, he cannot be initiator of malicious prosecution. Even otherwise, malice alone would not be enough, there must also be shown to be absence of reasonable and probable cause.

The maxim "the reasonable and probable cause" means that it is an honest belief in the guilt of the accused based upon full conviction, based on reasonable grounds of the existence of a state of circumstances, which assuming them to be true would reasonably lead any ordinary prudent man to the conclusion that the person charged was probably guilty of crime imputed.

If reasonable and probable cause is established, then question of malice becomes irrelevant.

Mere fact that prosecution instituted by the defendant against the plaintiff ultimately failed cannot expose the former to the charge of malicious prosecution, unless it is proved by the plaintiff that the prosecution was instituted without any justifiable reason and it was due to malicious intention of the defendant and not with a mere intention of carrying the law into effect.

Acquittal on extension of benefit of doubt does not mean that accused was falsely implicated and possibility would be excluded that accused might also have been involved in the matter.

Hicks v. Faulkner (1881) 8 QBD 167; Denning L.J. in Tempest v. Snowden (1952) 1 KB 130; Sher Muhammad v. Maula Bux 1995 CLC 1134; Sadaruz Zaman v. The State 1990 SCMR 1277; Feroze Khan v. Fateh Khan and 2 others 1991 SCMR 2220; Mahmood Akhtar v. The Muslim Commercial Bank Ltd. and another PLD 1992 SC 240; Subedar (Retd.) Fazale Rahim v. Rab Nawaz 1999 SCMR 700; Abdul Rauf v. Abdul Razzak and another PLD 1994 SC 476 and United Bank Limited and 5 others v. Raja Ghulam Hussain and 4 others 1999 SCMR 734 rel.

Atif Farzauq Raja for Petitioner.

2012 C L D 706

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

BAKHT FRAZ CONSTRUCTION COMPANY, MULTAN through Chief Executive----Petitioner

versus

FEDERATION OF PAKISTAN through

Chairman Pakistan Railways, Islamabad

and 6 others----Respondents

Writ Petition No.1186 of 2011, decided on 31st March, 2011.

Constitution of Pakistan---

----Art. 199---Constitutional petition---Lease of property for 99 years---Rejection of proposal---Petitioner, in response to advertisement issued by Ministry of Railways for commercial development of Railways property on joint venture basis, submitted the bid document and was the sole bidder---Petitioner had prayed that Railways which had failed to execute the agreement in terms of the bid document be directed to perform their part of agreement---Petitioner while submitting the bid documents, had annexed a certificate from a Commercial Bank for establishing his financial stability, which was the necessary document for participating in the bid as it was a joint venture and the petitioner was to invest the money for raising commercial building on the land of Railways---Issuing Bank of the financial stability certificate confirmed that no such certificate had been issued by the Bank---Bid money deposited by the petitioner was refunded to him---Petitioner having submitted false document, proposal and bid of the petitioner, was rightly rejected by Railways---Constitutional petition was dismissed.

Tahir Mehmood for Petitioner.

Rao Muhammad Iqbal along with Muhammad Abu Tahir, Assistant Director for Respondents.

2012 C L D 779

[Lahore]

Before Mehmood Maqbool Bajwa, J

MUHAMMAD JAVED IQBAL---Appellant

versus

ABDUL LATIF ALVI---Respondent

F.A.O. No.287 of 2008, heard on 12th December, 2011.

Punjab Consumer Protection Act (II of 2005)---

----S. 2(c)--- "Consumer", "Service provider"--- Consumer Court jurisdiction of---Scope---To confer jurisdiction upon Consumer Court, there must be a "consumer" having grievance either against a manufacturer or service provider, however buyer for re-sale or hire for any commercial purpose were excluded from the definition of a "consumer"---Contribution of amount on monthly basis by the complainant with group of persons in order to pay the same turn by turn on monthly basis, did not bring complainant within the definition of "consumer" provided in S.2(c)(i) of Consumer Protection Act, 2005---Section 2(c)(ii) of the Act defined "consumer" as a person who hired services for a consideration, but in the present case, every contributor paid and received equal amount and the "collector", by collecting the amount on monthly basis had no additional benefit which could be termed as "consideration" in order to establish the complainant as a "consumer"--- Section 21 of the Consumer Protection Act, 2005 was not applicable in view of the facts of the case and specifically S.21(c) and (d) of the Consumer Protection Act, 2005, did not apply as no representation regarding particular kind, standard or equality of service was made by the collector of the amount and similarly there was no representation on part of the "collector" concerning his skill, qualification or experience in providing alleged service---Grievance of complainant was outside the jurisdiction of Consumer Court---Impugned order of Consumer Court was set aside---Appeal was allowed. [pp. 781, 782, 783] A, B, C, D, E, F, G, H & I

Agha Zafar Iqbal for Appellant.

Malik Muhammad Rasheed Awan for Respondent.

Date of hearing: 12th December, 2011.

2012 C L D 827

[Lahore]

Before Muhammad Ameer Bhatti, J

SAEED AHMAD---Petitioner

versus

NIAZ AHMAD and 3 others---Respondents

Civil Revisions Nos. 1880 and 1832 of 2011, heard on 20th September, 2011.

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

----Ss. 8, 21 & 23---Specific Relief Act (I of 1877), Ss. 9, 42 & 54--- Suit for possession, declaration and permanent injunction---Appointment of referee---Rival parties had filed suits against each other---Plaintiffs had filed a suit for possession against the defendant and during pendency of said suit, the defendant had filed a suit for declaration and permanent injunction---Both rival suits were consolidated---On the appeal of the defendant, two persons were nominated for appointment as referees; and the Trial Court appointed a referee, who submitted his report in compliance of the order of the Trial Court---Trial Court, on the basis of said report, decreed the suit of plaintiffs and dismissed the suit of the defendant---Said judgment and decree was affected and Appellate Court, having dismissed the appeal, the defendant had assailed the said order---Grounds taken in the revision petition by the defendant could not be considered as the referee had been appointed with the consent of the parties; and High Court not only had approved the appointment of said referee, but had also issued the direction to decide the fate of the suit on the basis of the statement of the referee---Question arising during pendency of the suit which stood decided and settled under order of a Revisional Court, could not be allowed to be reagitated in appeal filed against the decree---Courts below had rightly passed the judgment and decree in accordance with the report of referee available on record--- Revision was dismissed, in circumstances.

Baqa Muhammad v. Muhammad Nawaz and others PLD 1985 Lah. 476 and Shamshad Khan and others v. Arif Ashraf Khan and 2 others 2008 SCMR 269 rel.

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

----Ss. 8, 21, 22 & 23---"Arbitrator" and "Referee"---Distinction---Referee was the one who would make statement according to his own knowledge, but the arbitrator, after obtaining the material and recording the statement of the parties, would draw his conclusion and on the basis of that material, he got his statement recorded; and he was also liable to cross-examination.

PLD 1988 Lah. 25 and PLD 1977 Lah. 672 rel.

Nemo for Petitioner.

Moiz Tariq for the Respondents.

Date of hearing: 20th September, 2011.

2012 C L D 846

[Lahore]

Before Umar Ata Bandial, J

REGIONAL MANAGER, ADAMJEE INSURANCE COMPANY LTD.---Petitioner

versus

PRESIDING OFFICER, DISTRICT CONSUMER COURT, LAHORE and 3 others---Respondents

Writ Petition No.1130 of 2010, decided on 18th January, 2012.

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

----Ss. 122(1)(a) & 122(3)---Punjab Consumer Protection Act (II of 2005), S.2(c)(ii) & 13---Constitution of Pakistan, Arts. 143, 199 & Fourth Sched., Federal Legislative List, Item No.29---Constitutional petition---Inconsistency between Federal and Provincial law---'Consumer'---Definition---Liability for faulty or defective services---Scope---Claim under an insurance policy filed before Consumer Court--- Maintainability--- Jurisdiction of Insurance Tribunal--- Scope--- Insurance company (respondent) allegedly failed to pay the policy proceeds to the policy-holder for his insured car---Policy-holder claimed relief before the Consumer Court in his capacity of a policy-holder of the insurance company, alleging that the insurance company committed a breach by failing to perform its duty/service according to the policy-holder's insurance policy---Insurance company assailed the order of the Consumer Court with the contention that for a claim arising from an insurance policy, Consumer Court could not have any jurisdiction to determine a dispute, as such jurisdiction solely vested in an Insurance Tribunal---Validity---Subject of insurance was dealt with by Item No.29 of the Federal Legislative List in the Fourth Sched. to the Constitution, and Insurance Ordinance, 2000, was framed in exercise of authority conferred by Item No.29 of the Federal Legislative List---Section 122(3) of the Insurance Ordinance, 2000, provided that jurisdiction of the Insurance Tribunal was exclusive in matters that fell within the ambit of its authority, and S.122(1)(a) of the Insurance Ordinance, 2000 stated that jurisdiction of the Insurance Tribunal extended to "claims filed by a policy holder against an insurance company in respect of or arising out of a policy of insurance"---Claim of policy-holder fell under S.122(1)(a) of Insurance Ordinance, 2000, as the said provision created an exclusive remedy in respect of claims based on Insurance policies--- Insurance Ordinance, 2000, as a competent Federal Legislation prevailed over conflicting Provincial Legislation under Art.143 of the Constitution, and even otherwise provisions of a special law on a subject excluded the application of a general law to such subject, and assuming that remedy of policy-holder was competent before Consumer Court, yet such remedy was general in character in comparison to his remedy before the Insurance Tribunal---Constitutional petition was allowed and it was held that suit filed by the policy-holder before the Consumer Court was not maintainable.

Inspector General of Police, Punjab v. Mushtaq Ahmad Warraich PLD 1985 SC 159 ref.

(b) Interpretation of statutes---

----Law of general application and special law---Applicability and scope---Provisions of a special law on a subject excluded the application of a general law to that subject.

Inspector General of Police, Punjab v. Mushtaq Ahmad Warraich PLD 1985 SC 159 ref.

(c) Constitution of Pakistan---

----Art. 143 & Fourth Sched., Federal Legislative List, Item No.29---Insurance Ordinance (XXXIX of 2000), Ss.122(1)(a) & 122(3)---Punjab Consumer Protection Act (II of 2005), Ss.2(c)(ii) & 13---Inconsistency between Federal and Provincial law---Laws framed in exercise of authority conferred by Item No. 29 of the Federal Legislative List in the Fourth Sched. to the Constitution, as competent federal legislation prevailed over conflicting provincial legislation under Art. 143 of the Constitution---Provisions of a special law on a subject excluded the application of a general law to such subject.

Inspector General of Police, Punjab v. Mushtaq Ahmad Warraich PLD 1985 SC 159 ref.

Ahmad Pervaiz for Petitioner.

Rao Zahid Tasawur for Respondent No.3.

Malik Shafqat Rasool for other Respondents.

2012 C L D 905

[Lahore]

Before Umar Ata Bandial, J

Malik MUHAMMAD RAFIQ AWAN---Appellant

versus

JAVAD IQBAL and others---Respondents

F.A.O. No.436 of 2009, decided on 31st January, 2011.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 40 & 46(2)---Infringement of trade mark---Interim injunction, grant of---Appellant owned restaurant with the registered trademark "Dera Restaurant" and the respondents owned the adjoining restaurant that was previously named "Fazl-e-Haq Family Restaurant" but was renamed as "Fazl-e-Haq Dera"---Appellant alleged violation of its trademark by the use of the word "Dera" in the respondent's restaurant---Trial Court declined grant of interim relief on the ground that the name "Fazl-e-Haq" clearly distinguished the two restaurants, and said order of Trial Court was assailed by the appellant---Validity---Similarity between trademarks adopted by contesting parties should be such as to create reasonable confusion and deception in the mind of the unwary purchaser---Evidence was yet to be recorded in the main suit, on the point as to whether there was sufficient basis for confusion and deception to be inferred from the facts of the case, however there was merit in appellant's contention that the two establishments being located adjacently, the respondent's restaurant on account of common word in its name had a likelihood of attracting/diverting customers away from the appellant's restaurant---Accordingly, for the reason of proximity between the two establishments, there was a likelihood that the word "Dera" in the name of the respondent's restaurant would cause confusion and deception amongst customers---Photograph of the latest signboard outside the respondent's restaurant did not minimize the effect of the name "Dera" that was written in a large size but in a different font than the one used to write "Fazl-e-Haq", and for purpose of interim relief said notification adopted by respondent was not satisfactory---High Court ordered, that subject to the outcome of the main suit, the respondent's restaurant may include the word "Dera" only if it was written in one line and in one font of equal size as "Fazl-e-Haq Dera"---Appeal was partly allowed, accordingly.

Jamia Industries Ltd. v. Caltex Oil (Pak.) Ltd. and another PLD 1984 SC 8 and Messrs Mehran Ghee Mills (Pvt.) Limited and others v. Messrs Chiltan Ghee Mill (Pvt.) Limited and others 2001 SCMR 967 rel.

Syed Fayaz-ul-Hassan for Appellant.

Shahzad Rabbani for Respondents.

2012 C L D 935

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

Haji ABDUL RAHIM---Petitioner

versus

MUHAMMAD SHARIF (DECEASED) through L.Rs.---Respondents

Civil Revision No.82-D of 2009, heard on 6th June, 2011.

Arbitration Act (X of 1940)---

----Ss. 17 & 30---Award making rule of court---Umpire, role of---Scope---Misconduct---Parties agreed to get their dispute resolved through arbitration and for that purpose, four persons were appointed as arbitrators while fifth was appointed as umpire---Award was announced by umpire which was made rule of the court but the same was set aside by Lower Appellate Court---Validity---Umpire was a person who had to make award if two arbitrators disagreed---Where two or more arbitrators were appointed and arbitration agreement itself provided that in event of their disagreement, matter in dispute would be referred to decision of third person, umpire would act only when there existed difference between arbitrators themselves---Jurisdiction of umpire commenced only after difference of opinion between arbitrators and not before---If umpire acted and took part in deliberation before difference arose between the arbitrators then active participation of umpire in proceedings would be deemed to be an illegality---Award itself, in the present case, was void document having been announced by umpire (Sarpunch) who was not authorized to participate in the arbitration proceedings---Even if arbitrators were authorized to appoint umpire, even then umpire had no role to play---No dispute existed between arbitrators and as such help of umpire was not required---Courts below were not courts of appeal of arbitration but court before making award as rule of court was bound to see whether arbitrator had mis-conducted himself and award was partial one---Arbitrators had mis-conducted, they involved an umpire (Sarpunch) who participated in proceedings, rather he influenced all arbitrators and did not hand over the award to parties but he kept the same with him and after that he handed over the award to petitioners who filed application before court---No notice was issued to respondents before announcement of award---Lower Appellate Court had rightly set aside the award and dismissed application of petitioners---Revision was dismissed in circumstances.

United Bank Limited v. Consolidated Exports Limited and 3 others 1996 MLD 1727; Mst. Rasul Bibi v. Nasrullah Khan 1994 CLC 1774 and Mst. Farrukh Jabin v. Maqbool Hussain through legal representatives and others PLD 2004 SC 499 ref.

Naveed Shaharyar Shaikh for Petitioner.

Rana Abdul Hafeez for Respondents.

Date of hearing: 6th June, 2011.

2012 C L D 961

[Lahore]

Before Umar Ata Bandial, J

BANK OF PUNJAB through Authorised Officer---Plaintiff

versus

Messrs KNK INFRASTRUCTURE (PVT.) LTD. through Chief Executive Officer and 2 others---Defendants

C.O.S. No.72 of 2009, decided on 21st September, 2011.

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

----S. 3--- Suit for recovery of loan--- Agreement for rescheduling of loan--- Levying of service charge---Charging of mark-up---Plaintiff had advanced an amount of Rs.78 million under Murabaha finance agreement to the defendant and purchase price of goods transacted was fixed at Rs.90 million---Plaintiff, upon expiry of the facility and having defaulted in payment, entered into a rescheduling agreement which extended term of finance but levied service charges @ Rs.16.88 % for the extended term---Defendant's contention was that mark-up had been charged beyond contract period--- Held, rescheduling agreement was not enforceable with respect to service charges as said charge was clearly in the nature of an interest and could not accrue either under law or on the terms of the Murabaha facility---Financial Institutions (Recovery of Finances) Ordinance, 2001, created for unpaid creditor/financial institutions an entitlement to compensation through cost of funds as determined under the provisions of S.3 of the Ordinance from date of default until date of realization---Defendant's contention with respect to accrual of mark-up under the rescheduling agreement was upheld---Suit was decreed to the extent of unpaid amount against the defendants jointly and severally along with the payment of cost of funds with effect from the date of default till realization in terms of S.3 of the Ordinance.

Ali Khan's case PLD 1995 SC 362 ref.

Hafeez Saeed Akhtar for Plaintiff.

2012 C L D 981

[Lahore]

Before Nasir Saeed Sheikh, J

Dr. QAMAR MAHMOOD and 2 others---Petitioners

versus

RUKHSANA KAUSAR and 5 others---Respondents

Civil Revision No.779 of 2011, decided on 20th December, 2011.

Auction---

----Civil Procedure Code (V of 1908), O.XXI, Rr.26, 90 & Ss.94(e)---Sale of suit property through auction---Objection petition---Clerical mistake---Suit for partition of property through sale and division of shares was decided---Auction proceedings were finalized and property was sold through auction in favour of respondent for sum of Rs.1,10,00,000 (one crore and ten lacs)---On account of clerical mistake, Court Auctioneer misplaced the digit '0' in his report describing the sale price as Rs.100,100,000 (ten crore and one lacs) instead of Rs.1,10,00,000---Petitioners in their objection petition had alleged that entire court proceedings had been vitiated---Said objection petition was dismissed by the court holding that, it was just a clerical mistake and there was no cogent reason for suspension of the auction---Application filed by the petitioners for cancellation of sale/auction proceedings, was dismissed---Said order had attained finality as the petitioners had not further assailed the same---Court confirmed the sale in favour of respondent and directed the sale certificate to be issued in favour of the respondent vide its order---Local Commissioner was appointed to get the sale deed registered in favour of respondent--- Court vide its order approved the sale-deed and ordered for handing over the sale-deed to respondent and delivery of possession of the subject property---Petitioners had assailed all such orders---Validity---Orders of the Trial Court assailed by the petitioners were interlocutory which had been passed upon the finality of the court auction proceedings---All said miscellaneous and consequential orders had been passed in accordance with law---No violation of any specific provision of law had been pointed out by the counsel for the petitioners during his arguments and orders passed were also not violative of any law---Petition was dismissed.

Haji Inayat Ali v. Haji Rehmat Ali and 16 others 2010 MLD 894 ref.

Ghazanfar Ali Syed for Petitioners.

Umar Abdullah for Respondents.

2012 C L D 996

[Lahore]

Before Syed Iftikhar Hussain Shah and Sagheer Ahmad Qadri, JJ

ALLIED BANK LIMITED through Manager and A.V.P. SAM---Appellant

versus

Messrs SHAHABAD TEXTILES PVT. LTD. through Chief Executive---Respondent

R.F.A. No. 345 of 2008, heard on 4th October, 2011.

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

----S. 22---Limitation Act (IX of 1908), Ss. 5 & 29(2)---Appeal to High Court---Application for condonation of delay of 32 days--- Impugned decree was passed on 24-4-2008--- Certified copy of decree was applied on 13-5-2008 and supplied on 23-5-2008, while appeal was filed on 5-6-2008---Contents of application revealed that appellant himself was not certain that whether appeal was well in time or not---Appellant had knowledge of day on which decree was passed and he could file appeal within 30 days---Limitation for present appeal was prescribed by Financial Institutions (Recovery of Finances) Ordinance, 2001, thus, by virtue of S. 29(2) of Limitation Act, 1908, provision of S. 5 thereof would not attract thereto---High Court dismissed appeal for being time barred.

Industrial Development Bank of Pakistan v. Rehmania Textile Mills (Pvt.) Ltd. 2006 CLD 81; Protein and Fats International (Pvt.) Limited v. Capital Assets Leasing Corporation Limited 2005 CLD 857; Sikandar Hayat v. Agricultural Development Bank of Pakistan 2005 CLD 870; Abdul Rasheed and another v. Bank of Punjab 2004 CLD 800 and Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286 ref.

Imran Aziz Khan for Appellant.

Waqar Mushtaq for the Respondent.

Date of hearing: 4th October, 2011.

2012 C L D 1009

[Lahore]

Before Mehmood Maqbool Bajwa, J

MUHAMMAD JAVED IQBAL---Appellant

versus

ABDUL LATIF ALVI---Respondent

Consumer Appeal No.F.A.O. 287 of 2008, decided on 12th December, 2011.

Punjab Consumer Protection Act (II of 2005)---

----S. 2(c)--- 'Consumer", "Service provider"--- Consumer Court jurisdiction of---Scope---To confer jurisdiction upon Consumer Court, there must be a "consumer" having grievance either against a manufacturer or service provider, however buyer for re-sale or. hire for any commercial purpose were excluded from the definition of a "consumer"---Contribution of amount on monthly basis by the complainant with group of persons in order to pay the same turn by turn on monthly basis, did not bring complainant within the definition of "consumer" provided in S.2(c)(i) of Consumer Protection Act, 2005---Section 2(c)(ii) of the Act defined "consumer" as a person who hired services for a consideration, but in the present case, every contribution paid and received equal amount and the "collector", by collecting the amount on monthly basis had no additional benefit which could be termed as "consideration" in order to establish the complainant as a "consumer"---Section 21 of the Consumer Protection Act, 2005 was not applicable in view of the facts of the case and specifically S.21(c) and (d) of the Consumer Protection Act, 2005, did not apply as no representation regarding particular kind, standard or equality of service was made by the collector of the amount and similarly there was no representation on part of the "collector" concerning his skill, qualification or experience in providing alleged service---Grievance of complainant was outside the jurisdiction of Consumer Court---Impugned order of' Consumer Court was set aside--- Appeal was allowed.

Agha Zafar Iqbal for Appellant.

Malik Muhammad Rasheed Awan for Respondent.

Date of hearing: 12th December, 2011.

2012 C L D 1014

[Lahore]

Before Umar Ata Bandial and Muhammad Farrukh Irfan Khan, JJ

Messrs STATE LIFE INSURANCE CORPORATION OF PAKISTAN---Appellant

versus

Mst. ANWAR GULZAR---Respondent

Execution First Appeals Nos.53, 47, 48 and F.A.Os. Nos. 173 to 175 of 2011, heard on 28th February, 2012.

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

----Ss.118(2), 118(1) & 2(8)---Calculation of Liquidated Damages payable by Insurance Company on late settlement of claims---"Prevailing Base Rate", meaning of---Contention of the decree-holder/claimant was that the meaning of the expression "Prevailing Base Rate" in S. 118, Insurance Ordinance, 2000 was the State Bank of Pakistan repurchase rate announced at the time of the decree or at the time of the filing of the execution petition and that the said rate was to be applied uniformly for the period of delay, i.e. from the time when payment became due till the time payment was made---Said contention of the decree holder was accepted by the Executing Court---Validity---Deceased insured person died on 20-3-1998 and payment of the life insurance policy proceeds were delayed, and therefore, in addition to the sum assured to the decree-holder, payment of a further amount as liquidated damages was visualized by S.118(1) of the Insurance Ordinance, 2000---Liability was admitted by the Insurance Company, and only the quantum of liquidated damages was in dispute between the parties---Liquidated damages were to be calculated at monthly rests for the period that an insurer had failed to make payment due under a policy---Entitlement of the decree holder, therefore, was to be determined with reference to each month that payment was delayed---Guidance in this regard may be sought from the definition of the expression "base rate" given in S.2(8) of the Insurance Ordinance, 2000---Expression "prevailing base rate" used in S.118(2) of the Ordinance referred to the "six monthly State Bank of Pakistan repurchase rate" announced most recently before the monthly rests under consideration for calculating the liquidated damages accruing during said period--- Said expression, "prevailing base rate", was dynamic in meaning as it varied from time to time depending on the six monthly repurchase rate announced by the State Bank of Pakistan that was most recent in relation to the relevant monthly rest under consideration---To peg such base rate to a particular event would burden either the insurer or the claimant, with the change effect of a high or low base rate as the case may be, without apportioning the benefit or burden of the impact of a dynamic rate---Resort to a weighted base rate in order to simply calculation of liquidated damages was not justified---In order to determine accumulated liquidated damages, base rate must be calculated for each monthly rest separately, and applied accordingly in calculations---Claim by the decree-holder on the basis of fixed prevailing base rate was not maintainable---High Court directed the Insurance Company to rework the calculation of the liquidated damages based on said findings---Insurance Company had made payments of the policy proceeds with reference to the date of the death of the insured person, and the issue of date from which calculation of the liquidated damages were to be made, stood settled by the conduct of the Insurance Company---Appeal was allowed, accordingly.

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

----Ss.118 (2), 2(8)---"Prevailing Base Rate"---Connotation---Expression "Prevailing Base Rate" used in S.118(2) of the Insurance Ordinance, 2000 referred to the six monthly State Bank of Pakistan repurchase rate announced most recently before the monthly rests under consideration for calculating the liquidated damages accruing during a said period---Expression, "prevailing base rate" ,was dynamic in its meaning, as it varied from time to time depending on the six monthly repurchase rate announced by the State Bank of Pakistan that was most recent in relation to the relevant monthly rest under consideration---Order accordingly.

Ali Lashari for Appellant.

Liaquat Ali Butt for Respondent.

2012 C L D 1060

[Lahore]

Before Muhammad Khalid Mehmood Khan and Muhammad Ameer Bhatti, JJ

MUHAMMAD YASIN----Appellant

versus

Sheikh MUHAMMAD PERVAIZ----Respondent

Regular First Appeal No.126 of 2008, heard on 29th February, 2012.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr. 2 & 3---Suit for recovery of amount on basis of pro note---Application for leave to defend suit---Suit decreed after dismissal of such application---Defendant's plea was that he was not served in terms of provisions of R. 2 of O.XXXVII, C.P.C.; and that his counsel appeared on 19-12-2007, but court did not warn him that same was the last day for filing leave application, rather adjourned proceedings to 10-1-2008 for filing power of attorney and written statement---Validity---Record showed that neither defendant was served with summons in Form IV, Appendix-B nor was copy of plaint attached thereto---­Underlying purpose of issuance of summons in Form IV accompanying plaint and reflecting principal amount due, interest thereon and cost upon defaulting party would be to intimate defendant of his rights in law in suit under special provisions of law---Delay or default in filing of leave application within prescribed period could not be attributed to a defendant, unless he was informed in required statutory mode and manner--- Trial Court on 19-12-2007 had not handed over copy of plaint to defendant for filing of leave application, rather had adjourned proceeding for 10-1-2008 for filing written statement---Filing of leave application on 10-1-2008 could not be said to be time-barred due to negligence on his part, rather he had been victim of such act of Trial Court---Requirements of law had not been fulfilled while serving summons upon defendant---Defendant alone could not be made to undergo penal consequences in face of contributory negligence on part of Trial Court---Impugned decree was nullity in the eye of law--- Trial Court had not exercised its jurisdiction in accordance with law--- High Court set aside impugned decree and directed Trial Court to decide leave application on merits in accordance with law.

(b) Act of court---

----Act or omission of court---No person should suffer for an act or omission of court---Act of court should not prejudice anyone.

Mian Muhammad Talah Adil v. Mian Muhammad Lutfi 2005 SCMR 720 rel.

Mian Shah Abbas for Appellant.

Muhammad Akram Khawaja for Respondent

2012 C L D 1078

[Lahore]

Before Umar Ata Bandial, J

NATIONAL BANK OF PAKISTAN---Plaintiff

versus

Messrs TREND HOSIERY (PVT.) LTD. and others---Defendants

C.O.S. No.117 of 2009, decided on 30th November, 2011.

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

----S. 10---Recovery of bank loan---Application for leave to defend the suit---Concealing of facts---Speculative plea---Effect---Plaintiff was under a duty to demonstrate by reference to documents, the sanction of finance and its disbursement---Plaintiff was to prove its case in every particular at the time of filing the suit---Impression entertained by defendant that ambiguity or apparent inconsistency in material on record might entitle defendants to adopt a speculative plea was wrong---Plea of denial of disbursement taken by defendants before High Court knowing that Rs.25 million was actually paid by plaintiff bank, tantamount to taking a false plea and committing abuse of process of court---High Court imposed cost on defendants---Application was dismissed, in circumstances.

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

----Ss.9 & 10---Suit for recovery of bank loan---Leave to defend the suit---New facts in replication---Filing of rejoinder---Plea raised by defendant was that he only had an opportunity to rebut claims made in plaint and not those made in replication, as the plaintiff had annexed certain new documents with replication---Validity---No prohibition existed against filing of a rejoinder to replication and defendant was allowed to rebut the contents thereof---Court would consider question of costs, if any, that were liable to be imposed on plaintiff for having excluded documents from plaint---Statement of accounts pertained to cash finance and apart from first entry, there were several other entries which all were transfer entries---Neither the plaint nor replication explained such entries for which evidence should have to be recorded---High Court granted unconditional leave to defend the suit to defendants---Petition was allowed in circumstances.

H.M. Saya and Co., Karachi v. Wazir Ali Industries Ltd. Karachi and another PLD 1969 SC 65 and Imtiaz Ahmed v. Ghulam Ali PLD 1963 SC 382 ref.

United Dairies Farms v. UBL 2005 CLD 569 fol.

Mian Muhammad Qamar-uz-Zaman for plaintiff.

2012 C L D 1112

[Lahore]

Before Sh. Azmat Saeed, C.J. and Nasir Saeed Sheikh, J

GENERAL MANAGER---Appellant

versus

Mst. SAKINA BIBI and others---Respondents

R.F.A. No.913 of 2011, decided on 9th February, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 121 & 124---Limitation Act (IX of 1908), Ss. 5, 29(2) & Art. 156--- Appeal against order of Insurance Tribunal---Application for condonation of delay of one day---Maintainability---Provision of Art. 156 of Limitation Act, 1908 would not govern such appeal, for which period of limitation was prescribed by Insurance Ordinance, 2000 being a special law on the subject of insurance regulating enforcement of insurance claim---Provision of S.5 of Limitation Act, 1908 would not apply to period of limitation prescribed by any special or local law for being protected by S.29(2) thereof---Such application was not entertainable---High Court dismissed appeal for being time barred.

Allah Dino and another v. Muhammad Shah and others 2001 SCMR 285; Shujahat Hussain v. Muhammad Habib and another 2003 SCMR 176; City District Government, Lahore through District Coodination Officer, Lahore v. Mian Muhammad Saeed Amin 2006 SCMR 676; Begum Syeda Azra Masood v. Begum Noshaba Moeen 2007 SCMR 914; Ilam Din v. Hassan Din and others PLD 2006 Lah. 121 and Taj Muhammad and others v. Pirzada Khalid Mansoor and others 2007 CLC 213 rel.

Ali Abid Tahir for Appellant.

2012 C L D 1128

[Lahore]

Before Syed Mansoor Ali Shah, J

Hafiz MUHAMMAD ALEEM---Petitioner

versus

LAHORE DEVELOPMENT AUTHORITY through Director-General, LDA and 4 others---Respondents

Writ Petition No.1805 of 2012, decided on 6th February, 2012.

Punjab Procurement Regulatory Authority Act (VIII of 2009)---

----Ss. 2(n) & 5---Punjab Procurement Rules, 2009, Rr. 50 & 51---Constitution of Pakistan, Art.199---Constitutional petition---Public procurement---Catering services---Petitioner assailed tender for catering services finalized by Lahore Development Authority---Validity---Tender was advertised by-passing the Rules resulting in mis-procurement as provided under R.50 of Punjab Procurement Rules, 2009---No reason was furnished by the Authority for not complying with provisions of Punjab Procurement Rules, 2009, for inviting bids under tender for catering services---Lahore Development Authority stated that it did not fall within the purview of Punjab Procurement Regularity Authority Act, 2009 or Punjab Procurement Rules, 2009, but admitted that bides were processed under Punjab Procurement Regulatory Authority Act, 2009---Parawise comments of Lahore Development Authority were contrary to position taken by the Authority and the same were in violation of facts on record---Tender in question and subsequent proceedings thereunder were violative of Punjab Procurement Rules, 2009, and resulted in mis-procurement thus same were set aside---High Court cancelled contract awarded to respondent as the same lacked transparency---High Court directed Punjab Procurement Regulatory Authority to actively perform its functions under S.5 of Punjab Procurement Regulatory Authority Act, 2009, across the Province---Petition was allowed in circumstances.

Suo Motu Case No. 5 (PLD 2010 SC 731): Messrs Malik Mushtaq Goods Transport Co., Lahore v. Federation of Pakistan through Secretary Railways, Islamabad and 9 others PLD 2010 Lah. 289; Messrs Airport support Sevices v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268 and Messrs Ramna Pipe and General Mills (Pvt.) Limited v. Messrs Sui Northern Gas Pipel Lines (Pvt.) and others 2004 SCMR 1274 ref.

Syed Faiz-ul-Hassan for Petitioner.

Waqar A. Sheikh for Respondent.

Imran Ahmad Mian for Respondent No.5.

Ishtiaq Ahmed, Director, C&I, LDA.

Sibtain Raza Qureshi, Assistant Director, LDA.

2012CLD 1133

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

Sheikh NIAZ ANJUM---Appellant

versus

GOVERNMENT OF PAKISTAN, MINISTRY OF INTERIOR, ISLAMABAD through Secretary and 2 others---Respondents

Writ Petition No.2377 of 2011, decided on 30th January, 2012.

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

--S. 2--- Constitution of Pakistan, Art. 199---Constitutional petition---Allegations of Bank default and misappropriation of pledged stock---Name of accused placed in Exit Control List---Validity---Order of High Court passed in the matter showed that pledged stock was sold by the Bank to accused against the payment of Rs.140 million under the supervision of the High Court, therefore, it could not be said that accused had misappropriated the stock---Order of High Court also showed that in its plaint Bank had not mentioned anything concerning the misappropriation of pledged stock and it seemed Bank was trying to blackmail the accused--Authorities. had wrongly entered the name of the accused in the Exit Control List, which was against his fundamental rights---Accused had the right and constitutional protection for travelling abroad in connection with his business---Constitutional petition was allowed and authorities were directed to delete the name of the accused from the Exit Control List.

Munir Ahmad Bhatti v. Government of Pakistan, Ministry of Interior through Secretary and others PLD 2010 Lah. 697 and Mian Tahir Jahangir v. Federation of Pakistan through Secretary, Ministry of Interior, Islamabad and another 2008 YLR 1857 fol.

Shahid Ikram Siddiqui for Petitioner.

Abdul Hameed Chohan for Respondent No.2.

Imran Muhammad Sarwar for Respondent No.3.

2012 C L D 1183

[Lahore]

Before Muhammad Khalid Mehmood Khan and Muhammad Ameer Bhatti, JJ

Chaudhry MUHAMMAD ANWAR---Appellant

Versus

HABIB BANK LTD. through Manager---Respondent

Regular First Appeal No.72 of 2007, heard on 1st February, 2012.

Negotiable Instruments Act (XXVI of 1881)---

----S. 10---"Payment in due course"---Meaning---Pay-Order---Bank's right to stop payment of pay-order at the request of its purchaser or issue duplicate pay order without request/consent of its beneficiary---Scope and procedure stated.

Pay-order is a banking instrument, which the Bank issues on receipt of cash from the purchaser in favour of a third party. The beneficiary of pay order is a person in whose favour and benefit pay order is issued. There are three parties in the transaction of pay order, one is the purchaser, second is the issuer and third one is the payee.

Under section 10 of Negotiable Instruments Act, 1881 payment in due course means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to pay person thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of amount therein mentioned.

In a pay order there are three parties, without consent of payee a duplicate pay order cannot be issued.

Section 10 of Negotiable Instruments Act, 1881 shows that payment in due course is a discharge of obligation by the issuer of instruments, if the beneficiary fulfils this condition "The holder and presenter is the real beneficiary of instrument."

Under the Banking Law and Procedure, the pay order cannot be paid or encashed at the counter of bank, and it can be collected through banker of beneficiary. The banker of beneficiary while presenting the pay order confirms the payee bank in this undertaking "payees account credited". This means collecting bank is confirming paying bank that amount collected will be credited to the account of real payee. It is the responsibility of collecting bank to confirm and ascertain the identity of his account holder.

United Bank Limited v. Trustees of the Port of Karachi 1994 CLC 2116 and Vadlamany Venkatesam and another v. Mangipudi Viswanadham and another AIR 1918 Mad. 512 ref.

Khawaja Saeed uz Zafar for Appellant.

Miss Umbreen for Respondent.

Date of hearing: 1st February, 2012.

2012 C L D 1222

[Lahore]

Before Ijaz Ahmad and Ibad-ur-Rehman Lodhi, JJ

Messrs WARRIOR CHEMICAL (PVT.) LTD. and 5 others---Appellants

Versus

NATIONAL BANK OF PAKISTAN---Respondent

Regular First Appeal No.383 of 2005, decided on 2nd April, 2012.

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

----Ss. 9 & 10---Suit for recovery---Company (appellant) filed an application for grant of leave to defend suit, which application was dismissed by the Banking Court---Contentions of the company were that the application for grant of leave to defend the suit disclosed such facts which necessitated the recording of evidence; that in the said application the company had denied the execution of any agreement pertaining to the loan, and that it had specifically stated that the amounts in question had never been disbursed; that the original statement of accounts was substituted by a secondary statement of accounts, which could not be taken into consideration in view of the Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001); that the documents produced by the bank (respondent) were not verified in accordance with the Bankers' Books Evidence Act, 1891, and that the recovery suit did not contain all the required documents---Validity---Plaint filed by the bank was not accompanied by the statement of accounts---Original statement of accounts was substituted by another statement of accounts---Documents had not been verified in accordance with the Bankers' Books Evidence Act, 1891---Property of the company was under mortgage---Company had set up an arguable case and its application for leave to defend contained facts which necessitated the recording of evidence---Appeal was accepted and the company was granted leave to defend the suit.

Messrs Liaqat Flour and General Mills through Partners and 3 others v. Messrs Muslim Commercial Bank Ltd. 2007 CLD 188; Healthco Surgical Supplies and 4 others v. Standard Chartered Bank (Formerly Chartered Grindlays Bank, Anz Grindlays Bank) 2006 CLD 1587 and Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited and 3 others 2011 CLD 408 ref.

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

----Ss. 9 & 10--- Application for leave to defend---Grant/denial---Scope---Law had to be interpreted in favour of a party whose right to defend had been denied--- Where leave to defend was not granted, the defendant had to bear the brunt of a decree, but where such leave was granted, the plaintiff was only burdened to produce the evidence in order to prove his case.

Khalid Ishaque for Appellants.

Fakhar-ul-Zaman Akhtar Tarar for Respondent.

2012 C L D 1288

[Lahore]

Before Shujaat Ali Khan, J

Messrs NISHAT CHUNIAN LTD.---Petitioner

Versus

PROVINCE OF PUNJAB through Secretary, Local Government and 2 others---Respondents

Writ Petition No. 177 of 2008, decided on 17th May, 2012.

(a) Punjab Local Government Ordinance (XIII of 2001)---

----Sixth Sched., para 44---Punjab Local Government (Fee for Licensing and Permits and Licensing of Professions and Vocations) Rules, 2002, R.3(iii)(f)---Constitution of Pakistan, Arts. 189 & 199---Constitutional petition---License fee, demand of---Manufacturing of textile products---Supreme Court, decision of--- Judgment in rem---Petitioner was a textile manufacturing company and was aggrieved of notice of demand issued by authorities for recovery of professional fee---Plea raised by authorities was that notice was rightly issued as the matter had already been decided by Supreme Court---Validity---Business of manufacturing textile products fell within the purview of paragraph 44 of Sixth Schedule to Punjab Local Government Ordinance, 2001, read with Rule 3(iii)(f) of Punjab Local Government (Fee for Licensing and Permits and Licensing of Professions and Vocations) Rules, 2002, therefore, notice for demand of license fee was lawfully issued by authorities---Earlier petition filed by petitioner was disposed of in terms of judgment passed in main petition and the same was set aside by Supreme Court, which was judgment in rem, and binding on all in view of Art.189 of the Constitution---Non-filing of appeal in other cases was of no legal consequence---Judgment settling proposition of law and declaring legal position was binding upon petitioner company and as such demand notice was legally issued by authorities under Punjab Local Government Ordinance, 2001--- Petitioner failed to make out a case for holding notice as illegal and without lawful authority---Petition was dismissed in circumstances.

Quetta Textile Mills Limited, Nadir House, G/F-I, I.I. Chundrigar Road, Karachi v. Pakistan through Secretary, Ministry of Finance, Government of Pakistan Islamabad and 2 others 2000 YLR 2683; Income-Tax Officer, Central Circle II, Karachi and another v. Cement Agencies Ltd. PLD 1969 SC 322; Mian M. Azam Chaila v. Wajid Ali Khan and others PLD 2009 Lah. 449; Koh-i-Noor Sugar Mills Limited v. Pakistan through Secretary, Ministry of Finance and 2 others 1989 SCMR 2044 and Muhammad Idrees v. Agricultural Development Bank of Pakistan and others PLD 2007 SC 681 distinguished.

(b) Constitution of Pakistan---

----Art. 199---Civil Procedure Code (V of 1908), O.XXIX, R.1--- Constitutional petition--- Corporation/company, locus standi---Pre-condition---Company is not competent to file constitutional petition in absence of certified true copy of resolution and Memorandum of Articles and Association---Such deficiency is fatal and subsequent rectification cannot fill up such lacuna.

Messrs Syed Bhais (Pvt.) Ltd. through Director v. Government of Punjab through Secretary Local Government and 3 others PLD 2012 Lah. 52; Messrs Sargodha Jute Mills Limited v. Federation of Pakistan and others Writ Petition No.13784 of 2008; Tara Chand and others v. Karachi Water and Sewerage Board, Karachi and others 2005 SCMR 499; Words and Phrases (Volume 23) published by West Publishing Co.; Justice Khurshid Anwar Bhinder and others v. Federation of Pakistan and another PLD 2010 SC 483; Trustees of the Port of Karachi v. Karachi International Container Terminal Limited 2010 CLC 1666; Messrs Sandal Dye Stuff Industries Ltd. v. Federation of Pakistan through Secretary Finance, Pakistan Secretariat, Islamabad and 5 others 2000 CLC 661 and Pir Bakhsh represented by his Legal Heirs and others v. The Chairman, Allotment Committee and others PLD 1987 SC 145 rel.

Malik Ahsan Mahmood for Petitioner.

Ch. Abrar Ahmad and Hafiz Muhammad Naeem for Respondent No.1.

Rana Shamshad Khan, A.A.-G.

2012CLD 1336

[Lahore]

Before Umar Ata Bandial, J

BANK OF KHYBER---Plaintiff

Versus

Messrs SPENCER DISTRIBUTION LTD. through Chief Executive and 14 others---Defendants

C.O.S. No.63 of 2001, decided on 11th November, 2011.

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

----S. 2(c)---Mortgagor as customer---Scope---Law does not contemplate that a mortgagor ought to be a beneficiary of finance or ought to have nexus with principal debtor in order to be liable on mortgage executed by him/her.

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

----Ss. 3, 9 & 10---Suit for recovery of bank loan---Leave to defend the suit---Execution of mortgage---Proof---Two loan facilities were advanced to defendant company and suit was filed for recovery of Rs.75.848 million--- Guarantor denied having executed mortgage deeds of her property. in favour of bank---Validity---Some of charged documents were executed on behalf of guarantor by her husband as general attorney but the attorney was not on record---Bank had shown that documents were signed by guarantor in year 1997, including registered mortgage deed for an amount of Rs. 100,000 and another mortgage deed for an amount of Rs.6.155 million, were signed " by guarantor personally and signatures matched---Both the mortgage documents stated that security was tendered to secure disbursement of finance to defendant company---High Court passed interim decree in favour of bank to the extent of Rs.6.155 million and in respect of claim made by the bank for remaining amount of Rs.75.8 million unconditional leave to defend was granted to the guarantor---Decretal amount, under. S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, was subject to payment of cost of funds from the date when, guarantor first disputed her liability towards bank in her petition for leave to appear---Petition was allowed accordingly. (p. 13381 B

Abdul Hameed Chohan for Plaintiff.

Israr Ahmad Qureshi for Defendants.

2012 C L D 1380

[Lahore]

Before Muhammad Ameer Bhatti, J

FAISALABAD DEVELOPMENT AUTHORITY through Director-General---Applicant

Versus

Messrs SARWAR LATIF ASSOCIATES through Alleged Attorney---Respondent

C.M. No.1503-C of 2003 in F.A.O. No.221 of 1994, decided on 2nd November, 2011.

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

----S. 69---Unregistered partnership firm---Effect---Such firm could not start its business in its name unless registered.

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

----Ss. 45, 46, 47 & 48---Registered partnership firm dissolved subsequently--- Continuing authority of partners of such firm---Scope---Merely on dissolution of firm, partnership would not come to a complete end, rather same would continue and its partners would continue to perform their duties till winding up of all its matters---Every partner after dissolution of firm could sue or be sued in the name of such firm provided cause of action arose before its dissolution and its adjudication remained unfinished.

Messrs Memon Trading Co. v. Messrs Hajee Gaffar Hajee Habib Janoo PLD 1966 Dacca 612 rel.

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

----Ss. 196 & 202---Partnership Act (IX of 1932), Ss. 45, 46, 48 & 69---Civil Procedure Code (V of 1908), S. 12(2)---Partnership firm, dissolution of---Award in arbitration proceedings made rule of court making judgment-debtor liable to pay certain amount to partners of dissolved firm---Judgment-debtor's application under S.12(2), C.P.C. for setting aside such award/decree on ground that all partners had appointed "R" on 25-2-1981 as general attorney of firm dissolved on 25-5-1982, whereafter such power of attorney lost its validity and general attorney had no authority to participate in arbitration proceedings on behalf of firm, thus such award was result of fraud and misrepresentation---Validity---Mere on dissolution of firm, partnership would not come to a complete end, rather same would continue and its partners would continue to perform their duties till winding up of all its matters---General attorney with consent of all partners had performed function after dissolution of firm---Partners had not revoked such power of attorney, thus, whatever had been done by general attorney on behalf of all partners would be considered a valid performance of duty on behalf of firm---­Principal could accept even an unauthorized act done by his agent, which would amount to its validation and ratification---­Decree-holder firm had not challenged authority of its general attorney, but accepted as correct whatever had been done by its general attorney---Such award/decree was not result of fraud and misrepresentation, whereby no prejudice had been caused to judgment-debtor---Judgment-debtor had filed such application with mala fide intention and succeeded in denying eventual fruits of such decree to decree holder for at least eight years---High Court dismissed the application with costs.

Lakhani Textile International through Partner v. Messrs Southern Agencies (Pvt.). Ltd. 2008 CLC 444; Messrs Sainjee Cargo Services v. Messrs Cargo Movers and others 1989 CLC 2229; Abdul Rehman v. Parvez Ahmed Butt and 2 others 1983 CLC 1740; Messrs Marvi International through Partners v. Muhammad Aslam and 2 others PLD 2007 Kar. 78; Ali Muhammad v. Mirza Muhammad Hussain Beg PLD 1968 Lah. 712; Goverdhandoss Takersey v. M. Abdul Rahiman and another AIR (29) 1942 Madras 634; Sasadhar Chakravarty and another v. Union of India and others AIR 1997 SC 336; Jagdish Chandra Gupta v. Kajaria Traders (India) Ltd. AIR 1964 SC 1882; Loonkaran Sethia and others v. Mr. Ivan E. John and others AIR 1977 SC 336; Sundarlal and Sons v. Yagendra Nath Singh and another AIR 1976 Cal. 471; Salahuddin v. Mst. Zohra Begum and 6 others 2008 CLC 75; Mumtaz Begum and another v. Hafiz Abdul Muqtadir and 4 others PLD 1982 Kar. 783; Muhammad Yasin v. Sheikh Hanif Ahmed and 4 others 1993 SCMR 437; Qasim International Containers Terminal Ltd. v. Qasim Freight Station Pvt. Ltd. and another 2002 MLD 171; Ch. Fazal Muhammad through L.Rs. v. Pakistan through Secretary Ministry of Defence and others 2007 CLC 148 = 2006 SCMR 71; Khawaja Muhammad Yousaf v. Federal Government through Secretary Ministry of Kashmir Affairs and Northern Areas and others 1999 SCMR 1516; Government of Sindh through the Chief Secretary and others v. Khalil Ahmed and others 1994 SCMR 782; Mst. Sabiran Bibi and others v. Ahmed Khan and others 2008 SCMR 226; Shuja-ul-Mulk v. Firm Abdul Ghafoor-Abdul Qadim PLD 1964 Pesh. 110; Messrs Chaudhry Allah Bux Moula Bux v. Aijaz Messrs Moula Bux and another PLD 1973 Kar. 468; Messrs Memon Tradind Co. v. Messrs Haji Ghaffar Haji Habib Janoo PLD 1966 Dhaka 612; Messrs Pioneer Housing Society Ltd. through Managing Director Bank Square Lahore v. Messrs Babar and Company through Shakir Ali Khan and 2 others PLD 1999 Lah. 193 ref.

Messrs Memon Trading Co. v. Messrs Hajee Gaffar Hajee Habib Janoo PLD 1966 Dacca 612; Muhammad Ali Razi Khan v. Muhammad Ali Zaki Khan and others 2007 MLD 54; Sardar Muhammad Mushtaq Khan and 6 others v. Sardar Muhammad Parvez Khan and 14 others 2001 MLD 1725; Muhammad Yasin Khan v. Nazir Begum and another 2009 CLC 23; Haji Shafi Muhammad Jamote v. Fishermen Cooperative Society Limited and 6 others 1999 MLD 1668; Imperial Bank of Canada v. Mary Victoria Begley AIR 1936 PC 193 and Muhammad Zakria and 3 others v. Bashir Ahmad 2001 CLC 595 rel.

Ali Akbar Qureshi for Applicant.

Khawar Ikram Bhatti for Respondent.

Date of hearing: 27th October, 2011.

2012 C L D 1405

[Lahore]

Before Iqbal Hameed-ur-Rahman, J

SHAUKAT MEHMOOD---Petitioner

Versus

GOVERNMENT OF PUNJAB through Secretary Agriculture and 6 others---Respondents

Writ Petitions Nos.14930, 14866, 15529, 14275 and 12619 of 2010, decided on 16th July, 2010.

West Pakistan Sugar Factories Control Act, (XXII of 1950)---

----S. 14(2)---West Pakistan Sugar Factories Control Rules, 1950, R.6(2)--- Constitution of Pakistan, Art.199---Constitutional Petition---Petitioners, sugar cane growers, sought a direction to the Cane Commissioner, Punjab to effect recovery of the dues of petitioners from the sugar mill owners---Validity---High Court directed the Cane Commissioner, Punjab to proceed against the sugar mill owners, and exercise all powers available to him through the provisions of the Punjab Sugar Factories Control Act, 1950; which empowered the Cane Commissioner to act as a Collector for the recovery of such dues of the petitioners in an expeditious manner, and under the provisions of the West Pakistan Land Revenue Act, 1967, and to adopt different modes he was provided in law for effecting recovery of the dues of the petitioners and may even proceed with initiating the criminal proceedings against the sugar mill owners---Constitutional petition was disposed of accordingly.

S. Hamid Raza Bukhari for Petitioner.

Raja Nadeem Haider, Additional A.-G. for Respondent.

Syed Sibte Hasan, Assistant Office of the Cane Commissioner, Punjab.

2012 C L D 1428

[Lahore]

Before Mehmood Maqbool Bajwa, J

Messrs SUI NORTHERN GAS PIPELINE LIMITED through General Manager and 2 others---Appellants

Versus

ABDUL HAMEED---Respondent

F.A.O. No.120 of 2008, decided on 6th March, 2012.

Punjab Consumers Protection Act (II of 2005)---

----Ss. 25 & 33--- Consumer Court, jurisdiction of---Consumer Court vide its order had directed Gas Company to revise the bill issued to the complainant---Validity---Consumer Court, prior to deciding the merits of the complaint, was required and obliged to determine its jurisdiction first; being a court of limited and special jurisdiction---No objection as to the jurisdiction of the Consumer Court was raised by the defendant Gas Company, however, since the Consumer Court was not a court of general jurisdiction, it was its duty to examine the allegations contained in the complaint in order to determine its jurisdiction---Prayer for cancellation of gas bill issued by Gas Company and change of gas meter; could not have conferred jurisdiction upon the Consumer Court; as the same fell outside its purview---Consumer Court was not vested with any jurisdiction to take cognizance of the grievance of the complainant---Order of Consumer Court was set aside, and complaint was dismissed---Appeal was allowed, accordingly.

Umar Sharif for Appellants.

Respondent ex parte.

2012 C L D 1436

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

ZAFAR IQBAL PROPRIETOR UNIVERSAL CABLE NETWORK, DASKA KALAN---Petitioner

Versus

PAKISTAN ELECTRONIC MEDIA REGULATORY AUTHORITY (PEMRA), ISLAMABAD through Chairman and another---Respondents

Writ Petition No.22884 of 2011, decided on 19th January, 2012.

Pakistan Electronic Media Regulatory Authority Ordinance (XIII of 2002)---

----Ss. 19 & 23---Issuance of licence to broadcast or operate---Object stated.

The scheme of the Pakistan Electronic Media Regulatory Authority Ordinance, 2002 is designed to provide licence to the broadcaster not to be created as monopoly, but with a view to provide maximum coverage of such service to the people of Pakistan in the most competitive and transparent manner depending upon the financial and organizational capability of a particular party for such distribution.

Nasir Ahmad Awan for Petitioner.

Muhammad Azam Zia for Respondents.

2012 C L D 1461

[Lahore]

Before Mehmood Maqbool Bajwa, J

Messrs DAWLANCE UNITED REFRIGERATION INDUSTRIES PVT. LTD. through Branch Coordinator---Appellant

Versus

MUHAMMAD JAMEEL---Respondent

F.A.O. No.173 of 2009, heard on 12th October, 2011.

(a) Punjab Consumers Protection Act (II of 2005)---

----Ss. 28(2), 28(4), 30(1)(c)---Consumer Court vide its order had directed the manufacturer (appellant) to provide a new refrigerator to the consumer (respondent) and pay compensation to the consumer---Said order of Consumer Court was assailed by the manufacturer (appellant)---Validity---Notice under S. 28 of the Punjab Consumers Protection Act, 2005 was sent to the retailer but not the manufacturer, and therefore the claim of the consumer was not to be entertained by the Consumer Court---Appellant (Manufacturer) was arrayed as respondent in the complaint on 17-3-2009 and the cause of action, according to the contents of the complaints, arose 3 or 4 days after the purchase of the refrigerator on 19-5-2008 ; and therefore the claim of the consumer was barred by time---No application under proviso to S.28(4) of the Punjab Consumers Protection Act, 2005 for condonation of delay was made by the consumer---Grievance of consumer regarding improper functioning of the refrigerator was a technical matter , and the Consumer Court instead of deciding the matter on oral evidence should have invited expert evidence within the meaning of S. 30 of the Punjab Consumers Protection Act, 2005--- Judgment of Consumer Court was set aside---Appeal was allowed, in circumstances.

(b) Punjab Consumers Protection Act (II of 2005)---

----S. 30(1)(c)---Expert evidence---Grievance of consumer regarding improper functioning of the refrigerator was a technical matter, and the Consumer Court instead of deciding the matter on oral evidence, should have invited expert evidence within the meaning of S. 30 of the Punjab Consumers Protection Act, 2005.

Kashif Ali Chaudhry for Appellant.

Ex parte for Respondent.

Date of hearing: 12th October, 2011.

2012 C L D 1550

[Lahore]

Before Muhammad Khalid Mehmood Khan and Shahid Waheed, J

MUHAMMAD HUSSAIN---Appellant

Versus

Malik ALLAH YAR KHAN---Respondent

R.F.A. No.418 of 2006, heard on 24th April, 2012.

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

----O. XXXVII, Rr. 1 & 2---Suit for recovery of money---Pro note, consideration of---Proof---Suit filed by plaintiff on the basis of pro note was dismissed by Trial Court---Plaintiff did not produce any witness to prove payment of consideration amount---Pro note was proved to be without consideration and no decree on the basis of such pro note could be passed, as plaintiff had no cause of action against defendant---High Court declined to interfere in judgment passed by Trial Court---Appeal was dismissed in circumstances.

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

----S. 13---Civil Procedure Code (V of 1908), O.XXXVII, Rr.1 & 2---Stamp Act (II of 1899), S.35 & Art. 49 [as amended by Punjab Finance Act, 1995]---Negotiable instrument---Deficient stamp---Admissibility in evidence---Principle---Pro note is liable to be stamped under Art.49 of Stamp Act, 1899 and by virtue of amendment made by Punjab Finance Act, 1995, stamp of an amount of Rs.100 is payable if amount exceeds Rs.500,000---Provision of proviso (a) to S.35 of Stamp Act, 1899, is curative and covers situation according to which if any instrument is not stamped or insufficiently stamped would be admitted in evidence on payment of penalty---Payment of stamp duty is a matter between a citizen and the State and an adversary cannot be permitted to capitalize on a technicality which otherwise is not fatal to suit.

Amir Abdullah Khan Niazi for Appellant.

Nemo for Respondent.

Date of hearing: 24th April, 2012.

2012 C L D 1582

[Lahore]

Before Ch. Shahid Saeed and Ijaz Ahmad, JJ

ALLAH DITTA---Appellant

Versus

Z.T.B.L. HEAD OFFICE AT ISLAMABAD through President and another---Respondents

R.F.A. No.504 of 2010, heard on 12th March, 2012.

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

----S. 22---Specific Relief Act, (I of 1877), Ss. 42 & 54---Constitution of Pakistan, Art. 25---Suit for declaration and permanent injunction--- Equality of citizens---Relief/incentive package of Bank for loanees who had defaulted on installments--- Applicability--- Debtor (appellant) along with others obtained a loan of Rs.3,23,500 from the Bank on 19-12-1993, and same was to be repaid to the Bank in 20 equal instalments till 7-7-2004---Bank offered an incentive/relief package to all the loanees and in that regard issued a notice---Bank, as per the said notice had offered to its loanees, who had obtained the loan during the specific period that they could get their accounts closed by depositing the specified amount---Debtor on receipt of said notice, deposited certain amount in the Bank in two instalments accordingly and approved the Bank authorities for the closing of his account, as he had deposited the amount as per offer of the Bank---Bank refused to close the account of the debtor on the pretext that the relief package was not meant for people who were regularly repaying their loans to the Bank but for those who were defaulters of at least two instalments, and since debtor had defaulted on only one instalment, he could not get the relief offered by the Bank---Debtor instituted a suit for declaration with permanent injunction before the Banking Court but same was dismissed---Validity---When the Bank had offered a relief package which was accepted and the amount was deposited, the Bank could not refuse the same on the pretext that it was not for those who made regular payment for the loan but only for defaulters---Bank's offer and money deposited in response thereto had created valuable rights in favour of the debtor---Case of debtor for availing the facility offered by the Bank was on much better footing as compared to those who, in view of the Bank, 'deserve' the relief---Case of debtor fell within the purview of the Bank's incentive scheme and the same was obliged to admit the claim of the debtor and close his account---Bank could not be allowed to adopt a new version and claim anything which was contrary to the relief package---Persons equally placed must be treated alike in matters of privileges and liabilities as envisaged in Art.25 of the Constitution---Refusing benefit of relief package to the debtor would not have only discouraged the regular payers of loans but would have also penalized them for making regular payments---Banking Court had failed to apply its judicious mind and erred in law while passing the impugned judgment---Appeal of debtor was allowed, impugned judgment of Banking Court was set aside and the case was remanded to the Banking Court for decision afresh.

Mst. Anwar Begum through Attorney v. Zarai Taraqiati Bank of Pakistan through Manager and 4 others 2009 YLR 308 rel.

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

----S. 22---Specific Relief Act (I of 1877), Ss. 42 & 54---Constitution of Pakistan, Art. 25---Suit for declaration and permanent injunction---Equality of citizens---Relief/incentive package of Bank for loanees who had defaulted on instalments--- Applicability--- Scope---Contention of Bank that the relief package was not meant for people who were regularly repaying their loans to the Bank but for those who were defaulters of at least two instalments, and since debtor had defaulted on only one instalment, he could not get the relief offered by the Bank---Validity---High Court while allowing the appeal of the debtor observed that contention taken by the Bank tantamount to encouraging people who obtained loan from the banks with intention not to return them, and in fact relief should be for those whose dealings were more clean so that the people who paid their loans regularly could be encouraged---High Court further observed that attitude of banks was softer towards the defaulters and harder towards regular payers as small loanees were subjected to penalization but loans worth crores and billions were written off by governments/banks, which practice in the view of the High Court was neither appreciable nor in accordance with the Injunctions of Islam.

Muhammad Umar Riaz for Appellant.

Shahid Mahmood Khan for Respondents.

Date of hearing: 12th March, 2012.

2012 C L D 1627

[Lahore]

Before Mehmood Maqbool Bajwa, J

BASHIR AHMED----Petitioner

Versus

Messrs SKYLINE LAHORE (PVT.) COMPANY through Chief Executive----Respondent

Civil Revision Petition No.478 of 2009, decided on 25th January, 2012.

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

----O. XXXVII, R.1---Leave to appear and defend the suit, grant of---Principles:

Following focal points can be formulated to be kept in view while deciding the question of grant of leave to appear and defend the suit.

(1) If any kind of defence is made out, either plausible or illusory, leave is to be granted to defend the suit;

(2) If leave is to be granted to the defendant to defend the suit, it can be conditional or un-conditional, depending on the strength of defence set up by defendant. If a plausible defence, either on facts or in law, is made out, un-conditional leave is to be granted while deciding question of plausible defence, following points can be taken into consideration amongst others (a) substantial question of law and fact; (b) jurisdiction of court doubtful; (c) complex question of limitation; (d) Instrument not property stamped; (e) Instrument allegedly not attested by two witnesses; (f) Document issued without consideration; (g) Allegation of fraud requiring inquiry;

(3) Even if the defence is plausible but the conduct of the defendant is mala fide or is clothed with suspicion, leave may not be granted un-conditionally;

(4) If no defence is made out, on factual or legal premises, leave may be refused, resulting in decretal of suit; and

(5) If the defence set up is not plausible leave to defend be granted but conditionally, either on condition of furnishing security or deposit of amount.

Fine Textile Mills Ltd. v. Haji Umar PLD 1963 SC 163; Muslim Commercial Bank Ltd. v. Tayyab Sharif 1975 SCMR 393; Mian Rafique Saigol and another v. Bank of Credit and Commerce International Overseas Ltd. and another PLD 1996 SC 749; Azmat Wali v. Hassan Al-Adawi and 2 others 1983 CLC 546; Shahzad Ice Factory v. Special Judge, Banking PLD 1982 Lah. 92; Dur Muhammad Pracha v. Judge Special Court Banking 1982 CLC 1625; Habib Bank Ltd. v. Karachi Properties Investment Co. Ltd. PLD 1984 Kar. 257; Habib Bank Limited v. Messrs Pazhong Traders and 12 others 1986 CLC 1086; Raja Saeed Ahmad Khan v. Sabir Hussain 2000 CLC 199; Asif Khurshid v. Saeed Ahmad 2000 CLC 913; Sheikh Muhammad Ayub v. Muhammad Yousuf PLD 2005 Lah. 197; Asif Javed and others v. Ghulam Shabbir 2007 YLR 187; Umer Khan v. Haji Musa Jan 2009 SCMR 1101 and Zubair Ahmad and another v. Shahid Mirza and 2 others 2004 SCMR 1747 rel.

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

----O. XXXVII, Rr.1 & 2---Suit for recovery of money---Leave to defend the suit, grant of---Plausible defence---Scope---Trial Court granted conditional leave to defend the suit to defendant subject to submission of surety bond---Defendant failed to submit surety bond as Trial Court declined to extend time for the same--- Plea raised by defendant was that as he had raised plausible defence, therefore, leave should have been granted unconditionally---Validity---Defendant wrote name of plaintiff company in his own hand, put his signatures but amount in words and figures was written by one of his companion---Plausible defence was offered by defendant while seeking leave to appear and defend the suit---Prima facie, malice could not be attributed to defendant in order to decline him leave unconditionally, in view of dates of institution of other suits and private complaint by brother of defendant---Substantial question of law and facts was raised by defendant, entitling him to get leave to appear and defend the suit unconditionally---Trial Court, though noted down facts but did not consider such aspect and as such order passed by Trial Court granting conditional leave suffered from jurisdictional defect, therefore, declining extension of time for submission of surety bond was also legally not sustainable---High Court in exercise of revisional jurisdiction, set aside order passed by Trial Court and application for leave to appear and defend the suit was allowed unconditionally---Revision was allowed in circumstances.

Haji Abdul Wahid v. Hoechst Pakistan Limited and another 1993 CLC 1291; Crystal Seeds (Pvt.) Ltd., Lahore through Chief Executive and 2 others v. Crescent Commercial Bank Limited Lahore through Branch Manager 2007 CLD 229 and Sarwar Khan v. Mehran Bibi and others 2005 SCMR 521 ref.

Muhammad Safdar Shaheen Pirzada for Petitioner.

Nisar Ahmad Kausar for Respondent.

2012 C L D 1654

[Lahore]

Before Ijaz Ahmad and Ibad ur Rehman Lodhi, JJ

Mrs. QAMAR KHALID RASOOL---Appellant

Versus

FAYSAL BANK LIMITED and anther---Respondents

E.F.A. No.253 of 2010, heard on 15th May, 2012.

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

----S. 19(7)---Civil Procedure Code (V of 1908), O.XXI, R.90 & S.47---Execution of decree---Sale of property---Application/objection petition for setting aside auction on ground of alleged irregularities and fraud by the Court Auctioneer, the Bank staff and the auction-purchaser---Said application/objection-petition was dismissed by Banking Court and order of the Banking Court was assailed by the appellant---Validity---Reserve price which was determined by the decree-holder Bank in the year 2008 was reduced after a period of one year; which was a mischievous act of the decree-holder Bank---Manner in which the auction proceedings were conducted showed pre-determination in the minds of the Court Auctioneer and the auction-purchaser and both were in prior knowledge as to at what rate the highest bid would be finalized and what would be the one-fourth bid amount, and the exact same amount in shape of an already prepared Pay Order was in possession of the auction-purchaser---Said Pay Order was naturally prepared prior to the participation of the auction-purchaser in the auction proceedings---Collusiveness of the interested persons was seen, and the appellant was deprived of the actual value of her property---Banking Court while confirming the sale price had conveniently ignored the fact that a year ago the decree-holder Bank had itself determined the value of the property much higher than to what the property was to put to auction for and objections raised by the appellant in such regard were not considered in an appropriate manner; and sale of such tainted proceedings should not have been confirmed---Inadequacy of price, if was by the reason of fraud and material irregularity; would provide a ground for setting aside the decree and also the sale in the execution of such a decree---Dismissal of application/objection petition under Order XXI, Rule 90 of the C.P.C. without recording of evidence of parties was not justified, and without recording findings adduced on such evidence; the Banking Court should not proceed to reject an objection petition filed under Order XXI, Rule 90, C.P.C.---Appeal was accepted, and the sale as a result of the impugned auction was set aside.

Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706 and Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another PLD 2003 SC 500 rel.

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

----O.XXI, R.90---Application for setting aside sale as a result of execution of a decree---Practice and Procedure---Dismissal of application under Order XXI, Rule, 90, C.P.C. without recording of evidence of parties was not justified, and the court, without recording findings adduced on such evidence should not proceed to reject an objection petition filed under Order XXI, R.90, C.P.C.

Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another PLD 2003 SC 500 rel.

Syed Ijaz Ali Akbar Sabzwari for Appellant.

Muhammad Naeem Sehgal and Shehzada Mazhar for Respondents.

Date of hearing: 15th May, 2012.

2012 C L D 1663

[Lahore]

Before Muhammad Khalid Mehmood Khan and Muhammad Ameer Bhatti, JJ

Mian AFTAB A. SHEIKH and 2 others----Appellants

Versus

Messrs TRUST MODARBA through Trust Management Services (Pvt.) Ltd. and another----Respondents

First Appeal from Order No.268 of 2010, decided on 5th March, 2012.

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

----Ss. 2(h), 25, 26 & 28(2)---Civil Procedure Code (V of 1908), S.47---West Pakistan Land Revenue Act (XVII of 1967), Ss.4(2)(14), 79, 80 & 81---Money decree, execution of---Objection petition under S.47, C.P.C. by judgment debtor that Modaraba Tribunal lacked jurisdiction to execute such decree as same was executable by Collector as arrears of land revenue---Validity---Land revenue being a kind of rent imposed by State and payable by landowner, which if remained unpaid would become arrears of land revenue---Procedure for recovery of land revenue was provided under Ss.79 to 81 of West Pakistan Land Revenue Act, 1967, but not for recovery of decretal amount---Impugned decretal amount was an outcome of dispute arisen out of a business agreement between two parties having no nexus with land---State was not party in such agreement, thus, decretal amount could not be termed as land revenue and judgment debtor could take refuge under Ss.79 to 81 of the Act---Word "as" used in S.28(2) of Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 and omission of word "Collector" therefrom would denote that decretal amount would be recoverable by Tribunal as arrears of land revenue, but not by Collector---Tribunal could exercise all powers available to Collector under S.80 of the West Pakistan Land Revenue Act, 1967---Tribunal being a civil court had option to execute its decree either under O.XXXVII, C.P.C. or by adopting procedure under West Pakistan Land Revenue Act, 1967--- Tribunal once having opted to execute its decree under C.P.C. could not adopt procedure under West Pakistan Land Revenue Act, 1967 and vice versa--- Objection petition was dismissed in circumstances.

Maj. Mehtab Khan v. The Rehabilitation Authority and another PLD 1973 SC 451; First Grindlays Modaraba v. Pakland Cement Ltd. and 2 others 2000 CLC 2017; Tanveer Hussain v. Divisional Superintendent; Pakistan Railways and 2 others PLD 2009 SC 249; Tahir Farooq v. Judge Family Court and others 2002 MLD 1758 and Enmay Zeb Publications (Pvt.) through Director General v. Sindh Labour Appellate Tribunal through Chairman and 2 others (2001 SCMR 565 ref.

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

----Preamble, Ss. 1 & 4---Application of special statute to Civil Procedure Code, 1908, Scope---Where special statute provided for application of C.P.C. without debarring specifically any provision thereof, then C.P.C. as a whole would become applicable thereto.

Muhammad Shahzad Shaukat and Barkat Arif Chaudhry for Appellants.

Muhammad Aqil Malik for Respondents.

Date of hearing: 13th February, 2012.

2012 C L D 1681

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

ASKARI BANK LIMITED---Plaintiff

Versus

WALEED JUNAID INDUSTRIES and 2 others---Defendants

C.O.S. No.144 of 2010, decided on 13th October, 2011.

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

----S. 9---Partnership Act (IX of 1932), Ss. 25 & 69---Suit for recovery of loan amount against registered partnership firm and its partners---Denial of partners to have executed personal guarantee in favour of Bank for securing loan advanced to the firm, thus, claimed not to be liable to pay suit amount outstanding against their firm---Validity---Admitting for sake of arguments such plea of partners to be true, even then they being partners of firm would still be jointly and severally liable to pay liabilities of partnership firm---Such plea of partners was repelled in circumstances.

Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931; Messrs C.M. Textile Mills (Pvt.) Limited through Chairman and 5 others v. Investment Corporation of Pakistan 2004 CLD 587; Nusrat Textile Mills Ltd. and 8 others v. United Bank Ltd. through Attorney 2005 CLD 1421; Agricultural Development Bank of Pakistan through Manager v. Messrs Malik Food Industries Limited through Director/Chief Executive/Share-holder and 13 others 2005 CLD 1359; Soneri Bank Limited v. Classic Denim Mills (Pvt.) Limited and 3 others 2011 CLD 408; Gul-e-Rana and 4 others v. Citibank N.A., Lahore through Manager and another 2005 CLD 1126; Dr. S.M. Rab v. National Refinery Ltd. 2005 CLD 1330; Picic Commercial Bank Limited v. Spectrum Fisheries Limited 2006 CLD 440; Messrs Ravi Associate (Private) Limited through Director and 10 others v. Industrial Development Bank of Pakistan through Senior Vice-President 2005 CLD 393; Faysal Bank Limited v. Genertech Pakistan Ltd. and 6 others 2009 CLD 856; Messrs United Dairies Farms (Pvt.) Limited and 4 others v. United Bank Limited 2005 CLD 569; Muhammad Nafees v. Allied Bank of Pakistan Limited through Manager and another 2004 CLD 937; Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257; Faisal Bank through duly appointed attorneys v. Messrs Zimindara Rice Mills and 21 others 2007 CLD 1164; Trading Corporation of Pakistan (Pvt.) Ltd. v. Messrs S.R. International 2008 CLD 412; Habib-ur-Rehman and another v. Judge Banking Court No.4 Lahore and another 2006 CLD 217; Haji Fazal Elahi and Sons through Muhammad Tariq v. Bank of Punjab and another 2004 CLD 162; United Bank Limited v. Messrs Usman Textiles and 6 others 2007 CLD 435 and Muhammad Khalid Butt v. United Bank Limited 2003 CLD 911 ref.

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

----S. 2(a)(e)---Finance against imported merchandize---Procedure for "finance against imported merchandize".

The facility of "Finance against imported merchandize" is that banking facility, which financial institutions allow to its customer for financing its import and local business. The customer when opens the letter of credit (L/C), then L/C opening bank on behalf of its customer gives unconditional guarantee to exporter that if the documents drawn under the letter of credit were in conformity with the terms of letter of credit, the bank will pay the amount of letter of credit to exporter without referring the demand to importer/L.C. opener. The bank after negotiating the documents creates a demand against customer, the documents drawn under the L/C is title to goods, if the importer pays the amount of documents to bank, the bank delivers the documents to importer and the importer on the basis of these documents get the delivery of imported goods from port, if the goods are imported, and if the L/C is in land, then as per terms of L/C.

After the payment of price of documents to bank the "finance against imported merchandize" facility stand adjusted and the transaction is over, but if the importer fails to pay the price of documents, the documents remain with the bank and the said facility in the books of bank remain unadjusted and recoverable from the importer.

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

----Ss. 9 & 10---Suit for recovery of finance advanced against imported merchandize facility---Bank's claimed to have allowed the facility to defendant, opened letter of credit, thus, outstanding amount in the facility account against defendant being Rs.17,700,527.29 against total utilization of Rs.32,166,726 excluding mark up---Application for leave to defend suit---Defendant's denial to have opened letter of credit and utilized the finance against imported merchandize facility---Validity---Photocopies of letter of credit along with request of defendant to open such letter placed on record would establish only opening of letter of credit---Outstanding amount being less than the utilized amount would show that documents of L/C had been released partly to defendant, while partly were in possession of bank, either bank had taken delivery of goods and were in its possession or bank had sold goods for adjustment of the said facility---Bank without proving its claim of the facility could not get decree against defendant---Plaint was silent about such subsequent events, which would require deeper probe and could be resolved after recording of evidence---Defendant had raised substantial questions of law and facts---High Court allowed the defendant to defend suit unconditionally.

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

----S. 2(a)(e)---Cash Finance (Pledge) Facility---Procedure for getting such facility and its adjustment stated.

The Cash Finance (Pledge) facility in banking parlance is self-adjustable facility. The bank allows cash finance (pledge) by keeping reasonable margin in the price of goods as per agreement between the parties, the pledge goods remain under the bank's lock and key. In case the customer intends to take delivery of pledge goods, the customer has to pay the price of goods sought to be released and in this way the liability of cash finance (pledge) automatically comes to an end.

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

----Ss. 9 & 10---Contract Act (IX of 1872), Ss. 151, 152 & 176---Suit for recovery of amount due from defendant under cash finance (pledge) facility---Bank's plea that defendant (customer) had stolen pledged goods---Application for leave to defend suit---Validity---Customer as per such facility could take delivery of pledged goods on payment of its price to bank---According to Ss. 151 & 152 of Contract Act, 1872, bank being bailee of goods was bound to return same to debtor/bailor against payment of loan, and in case of its inability to return same, bank had to give adjustment of stolen or lost goods unless proved to have taken care of pledged goods like an ordinary prudent man---According to S.176 of the Contract Act, 1872, pawnee could file suit for recovery of its debt without selling pawned goods, but ultimately decree of debt would be recoverable from sale proceed of pawned goods in absence of agreement of personal obligation of pawnor---Bank had not yet lodged F.I.R. against defendant for alleged theft---Responsibility regarding stolen goods would be fixed and of defaulting party could be fixed only after recording of evidence, and till then presumption would be that pownee had failed to take care thereof like a man of ordinary prudence---Defendant had raised substantial question of law and facts---High Court allowed defendant to defend suit unconditionally.

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

----Ss. 9 & 10---Suit for recovery of loan amount---Leave to defend suit, application for---Entries in statement of accounts not in consonance with documents and plaint---Effect---Statement of accounts, though being a most important document, would lose its legal value in case of such inconsistency---Statement of accounts did not reflect true accounts between the parties, thus, bank had to prove debit entries through evidence---Defendant had raised substantial question of law and facts---High Court allowed defendant to defend suit unconditionally.

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

----Ss. 9 & 10---Suit for recovery of loan amount---Leave to defend suit, application for---Documents filed by plaintiff with reply to leave application---Validity---Defendant had a right to know while replying plaintiff's claim that all documents creating his liability must be brought into his notice in order to enable him to accept or deny the same---Defendant would have no chance to explain or deny documents filed by plaintiff with reply to leave application---Court while deciding leave application would consider only documents filed along with the plaint---Permission to grant unconditional leave to defend suit would not mean that plaintiff's claim stood rejected, rather such permission would provide opportunity to both the parties to prove their respective claim---Defendant had raised substantial question of law and facts---High Court allowed defendant to defend suit unconditionally.

Agricultural Development Bank of Pakistan through Manager v. Messrs Malik Food Industries Limited through Director/Chief Executive/Share-holder and 13 others CLD 2005 1359 and Nusrat Textile Mills Ltd. and 8 others v. United Bank Ltd. through Attorney CLD 2005 1421 rel.

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

----Ss. 9 & 10---Suit for recovery of loan amount---Leave to defend suit, application for---Defendant's plea was that plaint on behalf of "Askari Bank Limited" was signed by two attorneys, one of them was holding power of attorney by "Askari Commercial Bank Limited", thus, one attorney had no power to file such suit---Validity---Defendant had raised such objection during arguments, but not in the leave application, thus, same could not be considered---Plaint did not find mention that "Askari Commercial Bank Limited" was renamed as "Askari Bank" in accordance with law---Defendant's such objection would require recording of evidence due to absence of such assertion in the plaint---High Court granted defendant unconditional leave to defend suit, in circumstances.

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

----Ss.9 & 10---Suit for recovery of loan amount by Bank---Leave to defend suit, application for---Defendant's plea that he had filed suit against Bank for recovery, redemption, rendition of accounts on basis of same transaction, wherein Bank's leave application had been accepted, thus, defendant became entitled to same treatment in the present suit filed by Bank---Validity---Defendant had neither taken such objection in leave application nor filed copy of plaint of his such suit---High Court in absence of any pleadings declined to consider such objection of the defendant.

Muhammad Khalid Butt v. United Bank Limited 2003 CLD 911 rel.

Muhammad Suleman and Syed Ali Zafar for Plaintiff.

Shahid Ikram Siddiqui for Respondents.

Date of hearing: 28th September, 2011.

2012 C L D 1709

[Lahore]

Before Ijaz Ahmad and Ibad ur Rehman Lodhi, JJ

Haji MUHAMMAD NAWAZ KHOKHAR---Appellant

Versus

UNITED BANK LIMITED through President and 3 others---Respondents

F.A.O. No.90 of 2003, heard on 16th May, 2012.

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

----S. 9---Civil Procedure Code (V of 1908), O.VII, R.11---Suit for recovery of damages and violation of contractual obligations---Rejection of plaint---Remedy against wrong---Plaintiff filed suit against bank in civil court of plenary jurisdiction but on the application of bank plaint was returned to him for filing the same before Banking Court---After return of plaint, the plaintiff filed suit before Banking Court and there on the application of bank plaint was rejected under O.VII, R.11, C.P.C.---Validity---No one could be left without remedy and if a wrong had been committed with him and he was in search of some redress against such wrong, there must be some forum available to entertain his claim and to adjudicate upon proceedings instituted by such person---Conduct of bank was nothing but to make plaintiff a shuttlecock in between different forums for redress of his grievances---After return of plaint from civil court, plaintiff rightly availed the forum of Banking Court, which with reference to pecuniary jurisdiction, was at relevant time lying with High Court in its Banking jurisdiction---Division Bench of High Court set aside the order passed by Single Judge of High Court whereby plaint was rejected and case was remanded for regular trial---Appeal was allowed in circumstances.

State Bank of Pakistan v. Chiragh Sun Engineering Ltd. and another 2000 YLR 1198 and Qayyum Nawaz Khan and another v. The Regional Manager, Agricultural Development Bank of Pakistan, Dera Ismail Khan and 4 others PLD 1997 Pesh. 72 ref.

Salman Aslam Butt for Appellant.

M. Akram Raja for Respondent.

Date of hearing: 16th May, 2012.

2012 C L D 1754

[Lahore]

Before Nasir Saeed Sheikh, J

Rana MUHAMMAD IKRAM---Petitioner

versus

MEHRAN FERTILIZERS (REGD.), FAISALABAD through Ms. Rashida Tallat---Respondent

Civil Revision No.1019 of 2012, decided 26th March, 2012.

Negotiable Instruments Act ( XXVI of 1881)---

----S. 4---Civil Procedure Code (V of 1908), O.XXXVII, Rr.1, 2 & 4---Recovery of money---Negotiable instrument---"Promissory note"---"Iqrarnama"---Suit filed by plaintiff under O.XXXVII, rule 1, C.P.C. for recovery of Rs.15,00,000 was decreed ex parte in favour of plaintiff and Trial Court declined to set aside the judgment---Plea raised by defendant was that plaintiff relied upon "Iqrarnama", which was not a "promissory note"---Validity---In Iqrarnama an unconditional undertaking and assurance was incorporated that an amount of Rs.15,00,000 was payable by defendant and would be paid to plaintiff in two specific dates---Contents of the document were fully covered by definition of "promissory note" as defined in Negotiable Instruments Act, 1881---Trial Court rightly took cognizance and entire proceedings had been conducted in accordance with relevant law---Trial Court rightly passed ex parte judgment and decree against defendant and dismissed application under O.XXXVII, R. 4, C.P.C. for valid and lawful reasons--- High Court in exercise of revisional jurisdiction declined to interfere in judgment and decree passed by Trial Court---Revision was dismissed in circumstances.

Pir Saber Shah v. Shad Muhammad Khan, Member Provisional Assembly N.-W.F.P. and another PLD 1995 SC 66 distinguished.

Shahid Pervaiz alias Shahid Hameed v. Muhammad Ahmad Ameen 2006 SCMR 631 and 1984 SCMR 568 ref.

Khalid Jamil for Petitioner.

2012 C L D 1819

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

BANK OF PUNJAB through Executive Vice-President---Plaintiff

versus

Messrs ACRO SPINNING AND WEAVING MILLS LTD. through Chief Executive and 16 others---Defendants

C.O.S. No.69 of 2012, decided on 5th June, 2012.

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

----S. 3--- "Default"--- Connotation--- Word "default" is subjected to judgment of court against claim of financial institutions---To declare any customer defaulter, is in domain of court.

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

----S. 3---Default, penalty of---Criminal or civil liability---If customer commits default, under S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, court is bound to grant costs of funds from date of default till payment or realization---Default of customer, if proved, comes to an end by order of court and customer becomes liable to repay finance with additional amount of cost of funds and financial institution stands compensated---Default of customer to fulfil his obligation is not a criminal offence and can be compensated in terms of money which is business of bank---In finance agreement under Financial Institutions (Recovery of Finances) Ordinance, 2001, intention of both parties is bona fide at the time of entering into agreement, as both wanted to earn profit, that is the reason in Financial Institutions (Recovery of Finances) Ordinance, 2001, word "default" has been used only for the purpose of imposition of penalty in shape of money.

Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 rel.

(c) National Accountability Ordinance (XVIII of 1999)---

----Preamble---National Accountability Ordinance, 1999, was brought into action to eradicate corruption and corrupt practices of person holder of public office.

(d) National Accountability Ordinance (XVIII of 1999)---

----S. 5(r)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.3---Wilful default, offence of---Pre-condition---For bringing transaction of finance under NAB, element of corruption and corrupt practice is the condition precedent.

(e) National Accountability Ordinance (XVIII of 1999)---

----S. 5(r)--- Words "amount due from him"---Determination---Lending is under an agreement and lender only can claim that debtor has failed to pay, debtor disputes the claim and in such circumstances dispute arises which is a question of fact---Claim remains claim unless adjudicated by competent court of law, therefore, words "amount due" are outcome of adjudication by competent court of law---Declaration of financial institution that debtor defaulted to fulfil his obligation under agreement is not "amount due" in terms of S.5(r) of National Accountability Ordinance, 1999, and it remains a claim till decree is passed by Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001.

Agricultural Development Bank of Pakistan v. Sanaullah Khan and others 1988 PLD SC 67; Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 and Abdul Latif v. The Government of West Pakistan and others PLD 1962 SC 384 rel.

(f) National Accountability Ordinance (XVIII of 1999)---

----S. 5(r), proviso---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.3---Wilful default---Proof---Such default is subject to establishing fact that lender is not at fault---Adjudication is mandatory before declaration of amount due.

(g) National Accountability Ordinance (XVIII of 1999)---

----Ss. 5(r) & 31-D---"Imprudent financing"---Connotation---If imprudent finance is interpreted in narrower meaning, it may be called "wilful default" but in that case customer and official of lender both are accused and in absence of decree from Banking Court, provision of S.5(r) of National Accountability Ordinance, 1999, can be pressed into service.

(h) National Accountability Ordinance (XVIII of 1999)---

----S. 5(r)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 3, 9 & 10---Suit for recovery of finance---Wilful default, notice of---During pendency of suit for recovery of finance, bank issued notice under S.5(r) of National Accountability Ordinance, 1999, to petitioners---Plea raised by bank was that it was financial institution which could declare customer a wilful defaulter and NAB could take cognizance---Validity---Bank had filed suit for recovery of finance and prayed for sale of mortgaged property and other securities for realization of its claim---Petitioners had filed application for permission to defend the suit which would be decided by court according to law---No allegation against petitioners that bank had allowed finance without securing the finance as required and the finance in dispute was imprudent loan/finance---If plea of bank was accepted, purpose of establishing Banking Court would fail---High Court suspended notice under S.5(r) of National Accountability Ordinance, 1999, till final disposal of the suit---Petition was allowed accordingly.

Asim Textile Mills Ltd. and others v. National Accountability Bureau and others PLD 2004 Kar. 638; Industrial Development Bank of Pakistan through Attorney v. Abdul Latif Channa and 6 others 2012 CLD 609; Brig. (Retd.) Mazhar-ul-Haq and another v. Messrs Muslim Commercial Bank Limited, Islamabad and another PLD 1993 Lah. 706; Wateen Telecom (Pvt.) Ltd. v. P.T.A. and others PLD 2010 Lah. 260; Sunrise Textiles Limited through Ex-Managing Director v. Crescent Commercial Bank Limited and others 2007 SCMR 1569; Haji Sardar Khalid Saleem v. Muhammad Ashraf and others 2006 SCMR 1192; National Steel Rolling Mills and others v. Province of West Pakistan 1968 SCMR 317 and Mir Nabi Bakhsh Khan Khoso v. Branch Manager, National Bank of Pakistan, Jhatpat (Dera Allah Yar) Branch and 3 others 2000 SCMR 1017 ref.

Shahid Ikram Siddiqui for Petitioner/Defendants.

A.W. Butt for Respondents/Plaintiff.

2012 C L D 1873

[Lahore]

Before Ch. Shahid Saeed, J

RIAZ UD DIN---Petitioner

versus

PROVINCE OF PUNJAB and others---Respondents

Writ Petition No.258 of 2007, decided on 21st June, 2012.

(a) Land Acquisition Act (I of 1894)---

----S. 4---Acquisition of land---Compensation, non-payment of---Effect---While acquiring land under Land Acquisition Act, 1894, alternate land or compensation should be paid to land owners, without which acquisition of land is not legal.

(b) Co-operative Societies Act (VII of 1925)---

----Ss. 4, 15, 15-A, 67 & 68---Companies Ordinance (XLVII of 1984), S.4(ii)---Constitution of Pakistan, Art. 199---Constitutional petition---Merger/amalgamation of co-operative society with company---Admissibility---Dispute was with regard to merger of co-operative society with private limited company---Plea raised by respondents was that Provincial Government had granted exemption under S. 67 of Co-operative Societies Act, 1925---Validity---Housing society and a company were two different entities which should function under their respective supervisory control of Registrar of Co-operative Society and Security and Exchange Commission of Pakistan respectively--- Provisions of Co-operative Societies Act, 1925 and Companies Ordinance, 1984, were not applicable to each other---When housing society and a company could not merge under law and intention of legislature to run both entities separately under separate supervisory control of the Registrar and Security and Exchange Commission of Pakistan, exemption for merger could not be allowed---Exemption under S.67 of Co-operative Societies Act, 1925, could only be granted from any of the provisions of Co-operative Societies Act, 1925, but notification in question did not speak about which provision, the exemption had been awarded, as such the exemption awarded was not in accordance with law--- High Court in exercise of Constitutional jurisdiction, declared that the notification had no consequence and merger/amalgamation was illegal and the same was set aside---Petition was allowed in circumstances.

(c) Constitution of Pakistan---

----Art. 199--- Constitutional petition--- Maintainability---Fraud---Scope---When all facts available on record proved about commission of fraud with petitioners, depriving them from their lawful rights, then there was no need to record evidence---Such matter could be decided by High Court in its constitutional jurisdiction---Petition was maintainable in circumstances.

(d) Constitution of Pakistan---

----Art. 199---Constitutional petition---Fraud---Laches---Scope---When whole proceedings are illegal and based on fraud, limitation does not come in the way of justice.

Raja Muhammad Bashir, Manzoor Hussain Malik, Hamad Malik, Rizwan Niaz, Malik Atta Rasool Joya and Muhammad Masroof Chaudhry for Petitioner.

Barristers Gohar Ali Khan and Bilal Khokhar for Respondent No.7 (Bahria Town).

Qaiser Qadeer Qureshi for Respondents Nos.4 and 5 (DHA).

Khan Beg Janjua for Respondent No.8 (Administrator).

Rashid Hafeez and Saif ur Rehman, Assistant Advocate-General, Muhammad Hafeez, D.O. Co-operatives, Abdul Qayyum, Assistant Registrar, Zahid Sohail, A.C. (Saddar), Rawalpindi, Malik Noor Zaman, Tehsildar, Rawalpindi and Muhammad Fayyaz, Head Clerk, LAC Branch for the State.

Dates of hearing: 18th and 19th June, 2012.

2012 CLD 1966

[Lahore]

Before Ayesha A. Malik, J

WASEEM YAQOOB---Petitioner

versus

CHIEF COMMISSIONER, INCOME TAX and others---Respondents

W.P. No.18046 of 2012, decided on 16th August, 2012.

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

----Ss.76, 155 & 156---Form-A filed by company for relevant year not reflecting name of petitioner as shareholder of company---Effect---Company could not register a transfer of shares or debentures without proper instrument of transfer duly stamped and executed by transferor and transferee and delivered to company along with scrips---Provision of S.76 of Companies Ordinance, 1984 being mandatory in nature, but default in compliance therewith, if any, would be a matter inter se between company and Security Exchange Commission, which could take its cognizance---Such Form-A would be prima facie evidence of matters contained therein, which could not be denied or refuted without cogent evidence---Petitioner for not being named in such Form-A ceased to be shareholder of company in relevant year---Principles.

Shahana Parvez and 2 others v. Messrs Goodluck Trade Impex (Pvt.) Ltd. Lahore and 6 others 1998 CLC 1157 ref.

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

----Ss.2(66), 91, 138(1) & 139---Income Tax Rules, 2002, R.186---Constitution of Pakistan, Art.199---Constitutional petition---Failure of petitioner after attaining majority to pay tax due from him for assessment years during his minority as shareholder of company---Issuance of warrants of detention of petitioner under R.186 of Income Tax Rules, 2002 and demand notice under S.138(1) of Income Tax Ordinance, 2001---Petitioner's plea that for being minor during disputed tax years, he was not a tax-payer, thus, could not be made liable to pay such tax of company---Validity---No person could be made liable for tax of company for assessment years during which he either ceased to be its shareholder or was a minor---Record, in the present case, showed that petitioner was a minor during disputed years, thus, he could not be made liable for total income tax of company for such years---High Court set aside impugned order of detention while declaring same to be illegal in circumstances.

Shafqat Mahmood Chohan, Mian Muhammad Athar and Abdul Qaddus Mughal for Petitioner.

Asjad Yaqub with Zain-ul-Abadin Addl. Commissioner and Shahid Sattar, Deputy Commissioner, Inland Revenue for Respondents.

Date of hearing: 10th August, 2012.

2012 C L D 1973

[Lahore]

Before Muhammad Khalid Mehmood Khan and Muhammad Farrukh Irfan Khan, JJ

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN through Assistant Vice President---Appellant

Versus

Messrs IMPERIAL PIPE INDUSTRIES PRIVATE) LIMITED and 5 others---Respondents

E.F.A. 19 of 2008, decided on 24th November, 2011.

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

----S. 19---Execution of decree---Appellant Bank assailed orders of the Banking Court whereby it allowed the respondent to withdraw 25% of her bid, deposited after she was declared the successful bidder in the sale of the property of the judgment-debtors under S.19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Respondent made said application for withdrawal on the ground that the appellant Bank represented to her that it was only the Bank that would confirm the sale alone--- Validity--- Proclamation advertisement published to invite bids for the sale of the property, nowhere mentioned that the sale would be subject to the final order of the Banking Court and that the Court was involved for auctioning the property--- Respondent-auction-purchaser, was therefore, justified in believing that the appellant Bank would confirm the sale---Appellant Bank was unable to show any document or communication which confirmed that the Bank informed the perspective bidders about the order passed by the Banking Court---Respondent-auction-purchaser was therefore, justified in withdrawing her bid---No illegality in the impugned order of the Banking Court having been found, appeal was dismissed.

Sardar Mashkoor Ahmed for Appellant.

Shahid Ikram Siddiqui for Respondents Nos.5 and 6.

2012 C L D 2016

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

HABIB BANK LIMITED through Authorized Attorney---Plaintiff

Versus

HAIDRI HOMES through Partners and 3 others---Defendants

Civil Original Suit No.166 of 2010 and C.M. No.167-B of 2012, decided on 8th March, 2012.

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

----Ss. 9 & 10---Bankers' Books Evidence Act (XVIII of 1891), S.4---Suit for recovery of bank loan---Conditional leave---Non-compliance of condition---Certified statement of accounts---Defendants failed to comply with condition imposed while granting leave to defend the suit on the plea that suit was not maintainable---Validity---No rebuttal of statement of accounts was on the record and as such the suit was maintainable---Certified statement of accounts under S.4 of Bankers' Books Evidence Act, 1891, was the core document under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Statement of account was available on record and no entry of the same was challenged and as such it was presumed that account prepared and maintained by bank were correct---Statement of account having certificate under S.4 of Bankers' Books Evidence Act, 1891, was admissible per se specially when there was no opposition and there was no objection against any debit entry---In absence of any rebuttal, amount due as per statement of account would be deemed to be the correct liability of defendants---Suit was decreed accordingly.

Haji Ali Khan and Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited Abbotabad PLD 1995 SC 362; Naeem Iqbal v. Mst. Zarina 1996 SCMR 1530; Col. (Retd.) Ashfaq Ahmed and others v. Sh. Muhammad Wasim 1999 SCMR 2832 and Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited Karachi through President and 3 others 1999 SCMR 2353 ref.

Usman Ghani Rashid Cheema for Plaintiff.

Zeeshan Saeed for Defendants.

2012 C L D 2029

[Lahore]

Before Umar Ata Bandial, J

Mst. MEERAN BIBI (AMEER BIBI) and 4 others---Petitioners

Versus

MANAGER, ZARAI TARAQIATI BANK LIMITED, PHOOL NAGAR, DISTRICT KASUR and 2 others---Respondents

Writ Petition No.11891 of 2009, decided on 16th September, 2010.

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

----S. 15--- Constitution of Pakistan, Art.199---Constitutional petition---Sale of mortgaged property---Petitioner impugned action of sale of his mortgaged property by the respondent Bank under S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 on the ground that S.15 of the Ordinance had been declared unconstitutional by the Full Bench of the Lahore High Court in Muhammad Umer Rathore v. Federation of Pakistan (2009 CLD 257)---Validity---Full Bench judgment was a declaratory one with respect to the validity of a law and its effect therefore operated in rem---Bank's recovery of dues by the sale of the mortgaged property under S.15 of the Ordinance was declared to be illegal; and present declaration was made in personam and did not impair the Bank's right to obtain recovery through lawful processes including by way of filing a suit for recovery before a competent Banking Court---Constitutional petition was allowed accordingly.

Muhammad Umer Rathore v. Federation of Pakistan 2009 CLD 257 fol.

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

----S. 15--- Constitution of Pakistan, Art.199---Constitutional petition---Sale of mortgaged property---Petitioner impugned action of sale of his mortgaged property by the respondent Bank under S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 on the ground that S.15 of the Ordinance had been declared unconstitutional by Full Bench of the Lahore High Court in Muhammad Umer Rathore v. Federation of Pakistan (2009 CLD 257)---Validity---Contention of the respondent Bank was that Supreme Court had suspended said judgment of the Full Bench of High Court in 2009 CLD 257 which had declared S.15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to be unconstitutional---Held, said suspensory order of the Supreme Court was to have effect inter partes only and was not a judgment in rem.

Gen. (Retd.) Mian Ghulam Jilani v. The Federal Government through the Secretary, Government of Pakistan, Interior Division, Islamabad PLD 1975 Lah. 65 rel.

Ejaz Anwar for Petitioners.

Muhammad Jehanzeb for Respondents.

2012 C L D 245

[Peshawar]

Before Shah Jehan Khan and Syed Sajjad Hassan Shah, JJ

NASEEM AHMED ANSARI---Appellant

Versus

HOUSING AND WORKS DEPARTMENT through Secretary and 4 others---Respondents

R.F.A. No.48 of 2002, decided on 22nd September, 2011.

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

----S. 25(3)---Mere promise to pay time-barred debt without any writing duly signed by both parties---Validity---Such promise would not be considered a good consideration and valid agreement---Principles.

It is clear from provisions of section 25(3) of the Contract Act, 1872 that whenever the suit is barred by the Limitation Act, 1908, the acknowledgement is not acceptable in any other mode unless it is offered by one party and accepted by the other and reduced into writing and duly signed by both the parties, then it forms a valid contract, because it contains a promise to pay wholly or in part on the stipulated date or period mentioned therein as it expresses an intention to pay which can be construed to be a promise within the meaning of the above section. According to the provision of above subsection, the old date is not revived, but it is considered to be a good consideration for the promise to pay, this amounts to a new promise to pay the debt to the creditor and this is a sort of measure of his right. Where there is nothing in writing and just a promise to pay for a time barred debt, it would not be considered as good consideration and also that there is novation of contract in the shape of promise to pay under which fresh consideration passes from the promisee and there is on the part of the promisor, the receipt of such consideration as well as a promise to pay for a time barred debt, thus, on fulfilment of aforestated two requirements of law, amounts to a valid agreement, even if the previous debt has been barred by time. In such eventuality, the plaintiff can enforce his right of recovery of his outstanding dues, if otherwise, proved by cogent and convincing evidence.

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

----O. XXVII, R. 1---Contract Act (IX of 1872), S.2---Suit against Government Department and its officials for recovery of amount due on account of extra work done as per drawings changed during course of construction---Plaintiff's plea that he did such work on verbal direction/order of such officials---Validity---Mere verbal direction or order of officials would not amount to a promise made on behalf of Government Department unless same was duly made in writing with sanction of competent authority after amending original agreement by adding fresh condition thereto---No verbal direction for raising construction under control of government functionaries would be acceptable except work done in accordance with terms and conditions prescribed in agreement---Government would not be under any legal constraint to pay suit amount to plaintiff on basis of such verbal direction/order---Record did not show that plaintiff had incurred suit amount in extra construction work as per requirement of law---In case of verbal direction passed by such officials without sanction of competent authority, plaintiff could claim suit amount from them in their private capacity but not as officers in their official capacity---Suit was dismissed in circumstances.

Liaqat Ali Khan Orakzai for Appellant

Badiuz Zaman Khan, D.A.G., Zahid Yousaf Qureshi, A.A.-G and Muhammad Ali Shah, DDOR Swabi for Respondents

Date of hearing: 22nd September, 2011.

2012 C L D 323

[Peshawar]

Before Attaullah Khan and Azmatullah Malik, JJ

MUHAMMAD NADEEM ANWAR---Appellant

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Intra-Court Appeal No.1 of 2010, decided on 30th November, 2011.

(a) Words and phrases---

----"Same offence"---Definition

Black's Law Dictionary ref

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

----Ss. 10(2), 282-K, 230(7) & 234(6)--- National Accountability Ordinance (XVIII of 1999), Ss. 9(a) & 10(a)---Criminal Procedure Code (V of 1898), S. 403---General Clauses Act (X of 1897), S.26---Constitution of Pakistan, Art. 13---Double jeopardy---Scope---Complaint under Ss.282-K, 230(7) & 234(6) of Companies Ordinance, 1984 pending before Company Judge against appellant---Conviction of appellant by Accountability Court for offences of having obtained loan facilities in other names fraudulently and used the same for his personal benefits, purchased properties at exorbitant prices and received kickback---Appellant's application before Company Judge that he had already been convicted by Accountability Court in same offence, thus, he could not be proceeded against for second time under provisions of Companies Ordinance, 1984---Dismissal of such application by Company Judge--- Validity---Difference in elements to be proved in two instances would not make them same offences---Charges levelled against appellant in Accountability Court were under Ss.9(a) & 10(a) of National Accountability Ordinance, 1999, which related to fraudulent, misappropriation, dishonest/corrupt practices or obtaining any benefit wilfully, which he could not obtain lawfully---Offences for which appellant was charged under the Companies Ordinance, 1984 related to violation and non-compliance of statutory requirements in respect of books of accounts, keeping true and fair contents of balance-sheet and making false statement---Essential ingredients and substance of such offences under National Accountability Ordinance, 1999 were quite different from such offences under Companies Ordinance, 1984 and were not similar---Appellant could be prosecuted under Companies Ordinance, 1984 and same would not amount to double jeopardy in terms of Art.13 of the Constitution and S.403, Cr.P.C.---High Court dismissed appeal in circumstances.

Black's Law Dictionary; PLD 1990 FSC 62 and PLD 1977 Kar 145 rel

Ms. Jamila Aslam for Appellant

Barrister M. Zahoorul Haq and Ms. Zara Tajwar for Respondents

Date of hearing: 24th November, 2011.

2012 C L D 447

[Peshawar]

Before Attaullah Khan and Khalid Mehmood Khan, JJ

IMAM DIN---Appellant

Versus

BANK OF KHYBER, D.I. KHAN through Manager---Respondent

F.A.B. No. 8 of 2010, decided on 10th August, 2011.

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

----Ss. 9, 10 & 22---Suit for recovery of loan---Application for leave to defend suit---Plaintiff bank filed a suit for recovery of loan amount with accrued and future mark up---Defendant submitted his application for leave to defend suit and written statement---Banking Court decreed the suit along with cost and defendant had filed appeal---Defendant in his application for leave to defend, had denied regarding the execution of any document in favour of the plaintiff bank, and had clearly admitted that he was regularly paying the amount to the plaintiff bank---Defendant in his application for leave to defend, had nowhere stated as to how much finance facility he had availed and how much amount he had paid---Defendant did not annex any receipt or document regarding the finance facility, which was mandatory provision of law provided in S.10 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Plea taken in the application by the defendant was self-contradictory and he was blowing hot and cold in the same breath---Facts and figures mentioned in the memorandum of appeal, nowhere found place in the application for leave to defend---Defendant, in appeal, had altogether taken different stance with certain amount and figure which was missing in the application for leave to defend---Defendant had not come to the court with clean hands and it was only a futile exercise debarring the plaintiff/bank from the recovery of outstanding loan---When the defendant had himself admitted that he was paying the outstanding amount according to law then his appeal was meritless and decree passed by the Banking Court was in accordance with law and did not warrant interference by High Court---Impugned judgment/decree which was based on solid footings needed no interference---Appeal was dismissed.

2007 CLD 435 and 2005 CLD 373 ref.

Muhammad Iqbal Khan Kundi for Appellant.

Zafar Ali Khan for Respondent.

Date of hearing: 10th August, 2011.

2012 C L D 464

[Peshawar]

Before Mazhar Alam Khan Miankhel and Yahya Afridi, JJ

NATIONAL HIGHWAY AUTHORITY----Appellant

Versus

Messrs PUT SARAJEVO GENERAL ENGINEERING COMPANY and another----Respondents

First Appeal No.52 of 2010, decided on 5th July, 2011.

Arbitration Act (X of 1940)---

----Ss. 2(c), 14(2), 17, 31 & 39---Civil Procedure Code (V of 1908), S.20(c)---Contract Act (IX of 1872), Ss. 23 & 28---Making award rule of court---Territorial jurisdiction of court---Award having been announced by the sole arbitrator, contractor company moved the court for making the award rule of the court---Court at place 'P' allowed the petition by partially making the award rule of court---Appellant had raised objection with regard to jurisdiction of the court, contending that as the contract/agreement was executed at place "I" and Head Office of the appellant as well as respondent company being located at place "I" and "L", the court at "P" had no territorial jurisdiction over the matter---Plea of respondent company was that relevant clause of the agreement had merely fixed the venue at place "I" for the purpose of arbitration only, which had nothing to do with conferring of an exclusive jurisdiction in the court at place "I"---Agreement between the parties was executed at place "I" for a work to be done within District "P" and "N"---Agreement provided a clause for referring the dispute to adjudicator and then to the sole arbitrator---Agreement further provided that arbitration between the parties would be made at place "I"---Where there were many courts having the jurisdiction to entertain the dispute between the parties under the agreement, and the parties with their mutual consent agree to refer their dispute to any such court or courts, such consent agreement between the parties was not against the provisions of S.23 or 28 of the Contract Act, 1872---In the present case no such clause of agreement conferring jurisdiction in any one court except the one that the arbitration would be held at place "I"; in given circumstances, dispute between the parties could be referred to the court having the jurisdiction under the general law---Head Office of respondent company being at place "L", suit regarding any dispute against respondent could be filed at place "L"---Work being done was within the territorial jurisdiction of the court at place "P" and dispute between them also cropped up there---Sub-offices of both the parties were also situated at place "P"---Such a dispute between the parties regarding the subject matter situated within the territorial jurisdiction of courts at place "P" could well be referred and agitated before the court at place "P" as cause of action wholly or partly, within the meaning of S.20(c), C.P.C. arose there---No bar existed in the agreement that the courts at place "P" would have no jurisdiction---Court at place "P" could well entertain the dispute--- Findings of the courts below were set aside directing the office to send both the cases to the court of Senior Civil Judge at place "P", who would decide the matter between the parties at its earliest.

Messrs Kadir Motors (Regd.) Rawalpindi v. Messrs National Motors Ltd., Karachi and 3 others 1992 SCMR 1174; Messrs Trade Masters (Pvt.) Ltd. through Chief Executive v. Messrs Shell Pakistan Ltd. through Chief Executive 2010 CLD 670; Messrs Unitrade Impex and others v. Federation of Pakistan and others 2010 CLC 1267; Special Communication Organization through Director-General, Rawalpindi v. Messrs IBELL (Pvt.) Ltd., Lahore 2007 CLC 248; Food Corporation of India and another v. Great Eastern Shipping Co. Ltd. AIR 1988 SC 1198; Messrs Nanak Chand Shadurain v. The Tinnelvelv-Tuticorin Electric Supply Co. Ltd., Calcutta AIR 1975 Madras 103; Messrs Salem Chemical Industries v. Messrs Bird and Co. (P) Ltd., Calcutta AIR 1979 Madras 16; Messrs Road Transport Corporation and others v. Messrs Kirloskar Brothers Ltd. and others AIR 1981 Bombay 299; Messrs Angils Insulations v. Messrs Ashmore India Ltd. and another AIR 1995 SC 1766; Rajasthan High Court Advocates Association v. Union of India and others AIR 2001 SC 416; Ravi Glass Mills Limited v. I.C.I. Pakistan Powergen Limited 2004 YLR 2503 and Special Communication Organization v. Messrs IBELL (Pvt.) Ltd., Lahore 2007 CLC 248 ref.

Zahid Idrees Mufti for Appellant.

Omar Faruk Adam for Respondents.

Date of hearing: 5th July, 2011.

2012 C L D 502

[Peshawar]

Before Ejaz Afzal Khan and Mazhar Alam Khan Miankhel, JJ

GOVERNMENT OF N.-W.F.P. and others---Appellants

Versus

Messrs JAN CONSTRUCTION CO.---Respondent

R.F.A. No. 29 of 2009, decided on 14th November, 2011.

Arbitration Act (X of 1940)---

----Ss. 14, 17 & 39---Making award rule of the court---Work, according to agreement arrived at between the Authority and the construction company was completed, but the payment having not been made to the company accordingly, matter was referred to arbitrators according to terms of the agreement---Two arbitrators announced the award, which was submitted for making same as rule of the court---Court without commenting upon the validity of the award straightaway made the same rule of the court---Validity---Court was duty bound to consider all the questions regarding validity of the award, both on legal as well as on its factual aspects---Under the law court could refuse to make the award Rule of the Court or could remit the award back to the arbitrators by pointing out deficiencies in the award---All such exercise should also be based on reasons---Such was not just a mechanical process that on the one end of the machine one would insert the award and on the other end would get the authentication of the court on the award--- Short-cut as adopted by the court was not permissible under the law---Trial Court even did not bother to have a look on the award what to talk of considering its validity---Such a judgment could not be maintained---Judgment and decree of the Trial Court were set aside and case was remanded to the Trial Court for decision afresh in accordance with law as earlier as possible, but not later than one month.

Messrs Mechanised Constractors of Pakistan Limited v. Airport Development Authority, Karachi 2000 CLC 1239 and Noor Nabuwwat v. Moulvi Muhammad Noor Ali Khan 1999 CLC 1685 ref.

Government of N.-W.F.P. v. Shahin Shah and others 2009 MLD 1418 and Pakistan Television Corporation Limited v. Messrs Interconstruct (Pvt.) Limited through Managing Director, Peshawar PLD 2010 Pesh. 34 rel.

Naveed Akhtar, A.A.-G. for Appellants.

Shakeel Azam Awan for Respondent.

Date of hearing: 13th October, 2011.

2012 C L D 512

[Peshawar]

Before Mazhar Alam Khan Miankhel and Nisar Hussain Khan, JJ

RAZIA SULTANA---Appellant

Versus

SHAHID DURRANI---Respondent

R.F.A. No.80 with C.M. No.103 of 2010, decided on 22nd September, 2011.

Defamation Ordinance (LVI of 2002)---

----Ss. 3, 9 & 13---Suit for damages for defamation---Plaintiff had alleged that the defendant wrote baseless and frivolous letter to the high-ups of the plaintiff; and for that matter proper inquiry was initiated against the plaintiff and after proper inquiry she was exonerated of the charges levelled against her by the defendant and that letter/complaint of the defendant had injured the reputation of the plaintiff in her department and in her family, which resulted into physical and mental torture for her and her family---Trial Court dismissed the suit---Validity---Plaintiff under the law was required to prove the issuance/writing of letter by defendant to high-ups of the plaintiff with a malice to defame her in the eyes of her high-ups, colleagues and other friends and family members, but evidence on record led by the plaintiff was deficient in that regard---Very letter/complaint, which was the bone of contention of the suit of the plaintiff, had not been brought on the record as same was not tendered in evidence---Plaintiff had failed to prove that in consequence of inquiry, she remained suspended---Under the law the plaintiff was required to serve the defendant with a notice within two months of the knowledge of defamatory material came into her knowledge, but that had not been done---Mere assertion in the pleadings would not absolve the plaintiff from her obligation when same had been denied by the defendant---Very foundation of the suit thus was not in accordance with law---Available evidence and material on the record could in no way be termed as sufficient for grant of decree for damage in favour of the plaintiff---Claim of the plaintiff being baseless, was not tenable, in circumstances.

Appellant in person.

Tariq Javed for Respondent.

Date of hearing: 22nd September, 2011.

2012 C L D 758

[Peshawar]

Before Yahya Afridi and Nisar Hussain Khan, JJ

SHEHZADA----Petitioner

versus

KHAIRULLAH and others----Respondents

Writ Petition No.1162 of 2008, decided on 11th October, 2011.

(a) Malicious prosecution---

----Suit for damages on basis of malicious prosecution arising out of civil litigation---Conditions essential to constitute a 'cause of action for such suit stated.

Condition precedents for a person to have a cause for damages on the basis of malicious prosecution arising out of civil litigation are that (i) the plaintiff was prosecuted by the defendant; (ii) the prosecution ended in plaintiffs favour; (iii) the defendant acted without reasonable and probable cause; (iv) the defendant was actuated by malice; (v) the proceedings had interfered with plaintiffs liberty and had also affected his/her reputation; and finally (vi) the plaintiff had suffered damage.

Muhammad Amin v. Jogendia Kumar Bannerjee AIR 1947 Privy Council 108; Haji Muhammad Shafi v. Mst. Hamidan Bibi 1990 MLD 597 and Ali Asghar v. Fazal Akbar 1988 CLC 147 ref.

Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28 fol.

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

----O. VII, R. 11---Rejection of plaint---Powers of court---Scope---Court could reject plaint even without an application by defendant---Principles.

The plain reading of the provision contained in Order VII, Rule 11, C.P.C. clearly provides that there is no express requirement for the defendant to file an application to seek the rejection of the plaint. The court has the authority under the said provision to reject the plaint even without any application made by an interested party

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

----O. VII, R. 11--- Rejection of plaint--- Essential considerations---­Court would consider only plaint and not plea raised in written statement, if same was beyond pale of what was contained in plaint.

Jewan v. Federation of Pakistan 1994 SCMR 826; Muhammad Akhtar v. Abdul Hadi 1981 SCMR 878; Nazir Ahmad v. Ghulam Mehdi 1988 SCMR 824 and Pakistan Agricultural Storage and Services Corporation Ltd. v. Mian Abdul Latif PLD 2008 SC 371 rel.

Muhammad Aman Khan for Petitioner.

Nemo for Respondents.

Date of hearing: 11th October, 2011.

2012 C L D 842

[Peshawar]

Before Khalid Mehmood Khan, J

Syed FIDA-UR-REHMAN SHAH---Appellant

versus

MUHAMMAD ZAHID---Respondent

R.F.A. No. 124 of 2010, decided on 12th September, 2011.

Negotiable Instruments Act (XXVI of 1881)---

----Ss. 4 & 13---Stamp Act (II of 1899), S. 2(5)---Civil Procedure Code (V of 1908), O.XXXVII, Rr. 2, 3 & O.VII, R.10---Suit for recovery of amount on basis of pro note---Return of plaint---Trial Court returned the plaint to the plaintiff for its presentation before the competent court of jurisdiction, holding that alleged promissory note on basis of which suit was filed was not a pro note, but was a bond--- Validity--- Money had been admitted by executant/defendant which was payable as per demand of the plaintiff---On the basis of said promissory note, the receipt regarding the payment of disputed money to the defendant had been acknowledged by marginal witnesses; and said document bore the signature of defendant---Document produced by the plaintiff was a pro note because it was expressly mentioned therein that suit amount would be paid to the plaintiff on his demand---From no score of interpretation or any law said promissory note could be considered as a bond---Defendant, as per contents of the promissory note was obliged to pay the amount as the same was a pro note and not a bond---Judgment and decree passed by the Trial Court were set aside and case was remanded to Appellate Court for disposal within four months.

Abdur Rauf v. Farooq Ahmad and another 2007 CLD 114 distinguished.

Muhammad Ayaz v. Khan Ayaz Khan PLD 2011 Pesh. 187 and Fazal Ellahi v. Akhtar Ali 2011 CLC 334 rel.

Muhammad Jahanzeb Ahmad Chughtai for Appellant.

Ahmad Ali Khan Marwat for the Respondent.

Date of hearing: 12th September, 2011.

2012 C L D 850

[Peshawar]

Before Khalid Mehmood, J

Syed SHAH PIR MIAN KAZMI---Petitioner

versus

Mst. NELOFER (Widow) and others---Respondents

Civil Revisions Nos. 379 and 381 of 2010, decided on 25-11-2011.

Succession Act (XXXIX of 1925)---

----Ss. 371, 372 & 373--- Issuance of succession certificate---Bank account having endorsement of "either or survivor"---Islamic law---Inheritance---Applicability---Scope---Petitioner, and his son, who later on died, opened joint account in the bank, with clear instruction that account would be operated "either or survivor"---After death of son of the petitioner/joint account holder, respondents being legal heirs of deceased applied for issuance of succession certificate, which finally was issued to them being successors of the deceased---Validity---Claim of the petitioner/father of deceased, was that amount deposited in the account, did not come within the legacy of deceased; and that as per instructions and declaration of both account holders when joint accounts were opened, belonged solely to the petitioner---Petitioner had urged that he being survivor of the account holder, was legally entitled to receive the entire amount deposited in the banks---Deceased/son of the petitioner, before his death proceeded abroad and joint accounts were opened during the period when deceased was abroad and was earning handsome amount in Pound Sterling during those days---Amount in Pound Sterling was transferred in the joint account and nothing was on record suggesting that petitioner had any source of such great earnings and that he himself had deposited money in the suit accounts---Respondents/legal heirs of deceased had proved that all the amount was deposited from abroad in shape of Pound Sterling by the deceased---Petitioner had failed to prove that the amount was gifted in his favour by the deceased---Even in cases of nomination, nominee was not entitled to receive the entire amount of the deceased---Such nomination could not override provision of Islamic Law of inheritance---No legal heir could be deprived from receiving their respective share---Appellate Court had correctly appreciated the legal and factual aspect of the case---In absence of any illegality, irregularity, misreading or non-reading of evidence, revision petition against judgment of the courts below, was dismissed in circumstances.

Guran Ditta v. T. Ram Ditta AIR 1928 PC 172; Habib Ullah v. Shikhupura Central Cooperative Bank Ltd. 1987 SCMR 53 and Safdar Ali Khan v. Public at Large 2004 SCMR 1219 rel.

Malik Mehmood Akhtar for Petitioner.

Tehmas Khan Jadoon for Respondents.

Date of hearing: 25th November, 2011.

2012 C L D 908

[Peshawar]

Before Syed Sajjad Hassan Shah and Qaiser Rashid Khan, JJ

ZARAI TARAQIATI BANK LTD. through Manager---Appellant

versus

WAQAR AZEEM KHAN---Respondent

F.A.B. No. 2 of 2007, decided on 29th November, 2011.

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

----Ss. 9 & 22---Suit for recovery of loan---Schedule of instalments, determination of---Bank (appellant) had sanctioned amount to defendant (respondent) as financial assistance and by way of security respondent mortgaged his agricultural land in favour of Bank and also executed a finance agreement according to which respondent had to pay buy back price/markup to the Bank through eight yearly instalments with effect from 7-7-1998 to 7-7-2005---According to agreement between the parties, defendant was obliged to pay regular yearly instalments to the Bank but during those eight years till the suit was finally decreed, the respondent had paid only a token amount---Banking Court refused to grant leave to defend the suit to the defendant and decreed the Bank's suit but determined some schedule of instalments for the respondents to pay off his liabilities, payable up to 7-7-2008---Banking Court was not empowered and authorized under the Financial Institutions (Recovery of Finances) Ordinance 2001, to pass such judgment and decree and that too when date of expiry of the buy back agreement was 7-7-2008---Banking Court stretched the date of payment of outstanding dues to 7-7-2008, which was illegal and thus not tenable---Bank statements issued by appellant-Bank showed that defendant had paid part of the amount to the Bank after the suit was decreed, thus, after deducting amount paid by defendant before the suit together with the amount paid after it, the remainder still stood outstanding against the defendant---Agreement between parties stood expired on 7-7-2008 after which no further mark up could be claimed by the Bank from the respondent---Appeal was allowed and judgment and decree of Banking Court was set aside and the Bank's suit was decreed for the remaining amount with costs on fund along with costs of suit.

Arif Rahim Khan Ustrana for Appellant.

Syed Abid Hussain Shah for the Respondent.

Date of hearing: 29th November, 2011.

2012 C L D 1637

[Peshawar]

Before Qaiser Rashid Khan, J

SARHAD DALL MILLS HAVELIAN and others---Appellants

Versus

NORTH-WEST FRONTIER PROVINCE (KHYBER PAKHTUNKHWA), SMALL INDUSTRIES DEVELOPMENT BOARD through Managing Director S.I.D.B.---Respondent

F.A.B. No.13 of 2010, decided on 18th April, 2012.

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

----S. 10---Suit for recovery was decreed ex parte against defendants---Contention of the defendants was that they had filed a suit for declaration pertaining to the same matter, which was pending at the time and that they were not served in the suit for recovery before the Banking Court---Validity---Proceedings in the declaratory suit filed by the defendants against the plaintiff Bank was afoot as seen from the order sheets but no effort worth the name was made to serve them over there and instead after publication in Daily Newspapers with little readership, an ex parte decree was granted against the defendants---Held, such was glaring irregularity committed by the Banking Court while it decreed the suit of the plaintiff Bank while in full knowledge of the pending declaratory suit of the defendants---Decree against the defendants was obtained in surreptitious manner, and it was unsavory and uncanny on part of the Banking Court not to attend to the facts of the other pending suit pertaining to the same monetary controversy between the parties--- High Court set aside decree of Banking Court and remanded the matter to Banking Court---Appeal was allowed, accordingly.

(b) Administration of justice---

----Courts of law were not supposed to display indifference and confine themselves in cocoons where the valuable rights of the individuals were involved.

Sajjad Ahmad Abbasi for Appellants.

Malik Mehmood Akhtar for Respondent.

Date of hearing: 18th April, 2012.

2012 C L D 1844

[Peshawar]

Before Qaiser Rashid Khan, J

ZARAI TARAQIATI BANK LIMITED---Appellant

versus

SAJJAD AHMED---Respondent

Appeal No.22 of 2011, decided on 19th April, 2012.

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

----S. 15--- Auction of mortgaged property without intervention of the Court---Appellant Bank impugned the order of Banking Court whereby its application for handing over physical possession of auctioned mortgaged property was dismissed---Validity---Appellant Bank, in the present case, had not complied with the provisions of S.15(2) of the Financial Institutions (Recovery Of Finances) Ordinance, 2001, and had only published a notice in an Urdu daily---Where a statute had given a certain leverage to the Financial Institution; viz. its defaulters to put mortgaged property to auction, without the intervention of the court, simultaneously, a responsibility had also been cast upon such Financial Institution to show strict compliance to the mandatory provisions of law not to dispose of mortgaged properties at their unbridled discretion---Any departure from such statutory provisions would vitiate whole proceedings carried out in such cases by Financial Institutions---Appellant Bank had showed total disregard to mandatory provisions of law---Appeal was dismissed.

Rashid Ahmad v. State PLD 1972 SC 271 and Izhar Alam Farooqi Advocate v. Sheikh Abdul Sattar Lasi and others 2008 SCMR 240 rel.

Malik Mehmood Abbasi for Appellant.

Respondent in person.

Date of hearing: 19th April, 2012.

2012 C L D 802

[Balochistan]

Before Mrs. Syeda Tahira Safdar, J

SHAH WALI and 6 others---Appellants

versus

QUETTA CHAMBER OF COMMERCE

AND INDUSTRY and 17 others---Respondents

Civil Appeal No.3 of 2010, decided on 16th January, 2012.

(a) Trade Organizations Ordinance (XLIX of 2009)---

----S. 21(4)---Limitation Act (IX of 1908), S. 5---High Court appeal---Delay---Condonation of---Appellants challenged order of Authority dated 29-12-2009 through appeal to the High Court filed on 25-2-2010 with a delay of 28 days---Contention of appellants was that copy of order dated 29-12-2009 was supplied to them two days prior to the filing of present appeal, and that the officials of the Authority with mala fide intention adopted an adverse attitude towards them and the delay in filing of present appeal was neither intentional nor deliberate---Validity---Order was made by the Authority on 29-12-2009 marked in the name of one of the appellants, but there was no endorsement as to when said order was served on him---Time of service was most important because period of limitation had to be counted from the date of service; which was missing---High Court, while keeping in view such circumstances, condoned the delay in filing of the appeal.

(b) Trade Organizations Ordinance (XLIX of 2009)---

----Ss. 14(3), 21(2) & 21(4)---Appeals in matters relating to the electoral process before the conduct of an election---Powers of the Director-General Trade Organizations---Scope---Appellants had preferred an appeal before the Authority challenging order of Director-General Trade Organizations that was dismissed as being not maintainable on technical grounds---Said order of Authority was assailed in the present appeal---Validity---Director-General of Trade Organizations was the final forum of appeals in matters relating to the electoral process before conduct of the election---Perusal of application filed by appellants before Director-General Trade Organizations reveals that it was filed with the subject "Cancellation of illegal schedule of forthcoming election of Chamber of Commerce Quetta"---Said application was proceeded with and decided by the Director-General Trade Organizations---Grievance of appellants was in respect of matter pertaining to the electoral process, and that too, before the conduct of the election, which was decided by the Director-General of the Trade Organizations being the competent Authority---According to S.14(3) of the Trade Organizations Ordinance, 2009, no further appeal lay to the Federal Government under S.21 of the said Ordinance---Authority rightly refused the appeal as being not maintainable and there was no illegality in the impugned order---Appeal was dismissed by High Court, in circumstances.

Kamran Murtaza for Appellant.

Malik Sikandar, Deputy Attorney-General for Respondents Nos.1 and 3.

Baz Muhammad Kakar for Respondents Nos.4 to 18.

Date of hearing: 28th June, 2011.

2012 C L D 1611

[Balochistan]

Before Qazi Faez Isa, C.J.

Messrs INTERNATIONAL BUNKERING MIDDLE EAST DMCC through Authorized Attorney---Plaintiff

Versus

M. T. TRIDONAWATI and 3 others---Defendants

C.M.A. No.115 of 2012 in Admiralty Suit No.1 of 2012, decided on 27th July, 2012.

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

----O. VII, Rr.1(i) & 11(c)---Plaint without payment of court-fee filing of---Effect---Discretion of court to proceed with such suit.

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

----Ss. 3(2)(i), 3 & 4---Suit for recovery of amount of furnace oil supplied to ship---Sale of ship by its previous owner to defendant before filing of such suit by plaintiff---Effect---Where defendant had paid valuable consideration for ship and its beneficial ownership vested in him and he had no knowledge about suit claim, then in absence of any evidence to show that he was party to any sham transaction, he could not be made liable for plaintiff's claim.

Bangladesh Shipping Corpn. v. M.V. 'NEDON' PLD 1981 Kar. 246; The "Banco" [1971] Vol. 1 Lloyd's Law Reports 49; M.V. "Goloz" Ex-M.V. "Mustafa Bey" v. Pacmar Shipping (Pvt.) Ltd. 2010 CLD 660; Yukong Ltd. South Korean Co. v. M.T. Eastern Navigator PLD 2000 SC 57; The "Freccia del Nord" [1989] Vol. 1 Lloyd's Law Reports 388; "The Indian Grace No.2" [1998] Vol. 1 Lloyd's Law Reports 1; Alexander G. Tsavliris & Sons v. M.V. Rice Trader 1985 CLC 1355; The "Monica S." [1967] Vol. 2 Lloyd's Law Reports 113; In re ARO CO. Ltd. [1980] The Law Reports 1 Ch. 196; The "Daien Maru No.18" [1984] Part 5 Case 10 High Court of Singapore; Oriental Shipping Co. Ltd. v. Panaghia Odigitria 1991 MLD 148; Kuwait Flour Mills Co. Sak v. M.V. "Kashmir" 1990 MLD 2196 and Khadija Edible Oil Refinery (Pvt.) Ltd. v. M.T. "Galaxy" 2011 CLD 1329 ref.

(c) Letter of Credit---

----??????? Irrevocable Letter of Credit issued by Bank---Validity---Such letter could not be manipulated for back-dated as a number of formalities had to be met before Bank would issue such letter.

Omair Nisar for Plaintiff.

Shaiq Usmani and Osman Hadi for Defendant No.1.

Jawad A. Sarwana for Defendant No.2.

Date of hearing: 16th June, 2012.

2012 C L D 1659

[Balochistan]

Before Ghulam Mustafa Mengal, J

COMMISSIONER MEKRAN and another---Petitioners

Versus

Haji ABDUL WAHID and 7 others---Respondents

Civil Revision No.184 of 2010, decided on 2nd May, 2011.

Contract Act (IX of 1872)---

----Ss. 2(a), 2(b) & 2(c)---Agreement---Whether signed letter issued by the authorities to the plaintiffs constituted an agreement within the meaning of S.2 of the Contract Act, 1872---Valid agreement---Scope---Plaintiffs had filed a suit against the authorities for the enforcement of a letter addressed to them, which the plaintiffs contended to be an agreement between the parties---Suit was decreed in favour of the plaintiffs and upheld in appeal by the appellate court below---Contention of the authorities was that no agreement was executed between the parties and the letter in question could not be considered as an agreement within the meaning of S.2(b) of the Contract Act, 1872---Validity---Letter in question neither bore the signature of the government official ( petitioner) nor the district officer (petitioner) concerned had any authority to issue such a letter---For the constitution of a valid agreement there must be at least two persons, i.e. promisor and promisee, who agreed with their free consent to a lawful object and legal consideration, as required by S.2 of the Contract Act, 1872---Letter in question only contained the signatures of one of the plaintiffs and, therefore, did not fall within the definition prescribed in S.2(b) of the Contract Act, 1872---Letter in question had not been executed by the competent person---Mere signing of a letter could not be termed as a "valid agreement" within the meaning of S.2 of the Contract Act, 1872, therefore, the plaintiffs were not entitled to any decree of enforcement of the letter in question---Revision petition was accepted, judgment and decrees of both the courts below were set aside and the suit filed by the plaintiffs was dismissed.

Blackwood Hodge (Pakistan) Ltd. v. Hakimsons (Impex) Ltd. 1983 CLC 1251; Government of N.-W.F.P. and others v. Bahadur Khan 1985 CLC 1457 and Michal Assely and others v. Messrs Abdul Sattar and Brothers PLD 1960 Kar. 346 distinguished.

Abdul Aziz Khilji, Additional A.-G. for Petitioners.

Ali Ahmed Kurd for Respondents.

Date of hearing: 20th April, 2011.

2012 C L D 44

[Securities and Exchange Commission of Pakistan]

Before Amir M. Khan Afridi, Director (SMD)

SHOW CAUSE NOTICE ISSUED TO HAJI GHANI HAJI USMAN: In the matter of

Show Cause Notice No.SMD/Co.62/5/2007 dated 23rd August, 2011, decided on 6th October, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 18-A & 22---Companies Ordinance (XLVII of 1984), Ss.57 & 62---Offer of shares or debentures for sale---Making of fictitious and multiple applications---Shares of the company were offered to the general public by offerer for subscription through offer for sale documents issued, circulated and published with the approval of the Securities and Exchange Commission under Ss.62 & 57 of the Companies Ordinance, 1984---After the initial public offering and post ballot scrutiny, consultant to the offer, reported 185 cases comprising 257 applications being multiple and fictitious submitted for subscription of shares of the company in violation of S.18-A of Securities and Exchange Ordinance, 1969---Offerer was advised to deposit confiscation subscription money of 254 applications, but despite repeated reminders the offerer failed to do so within the time period stipulated in each order, which tantamount to the non-compliance of the orders of the Commission---Offerer also failed to ensure that the shares had been issued to three applicants whose applications were restored by the Commission---Offerer had intentionally and wilfully used delaying tactic in implementation of the Commission's 185 orders passed under S.18-A of the Securities and Exchange Ordinance, 1969 in the subject matter and in circumstances attracted imposition of a penalty upto the sum of fifty million rupees as mentioned in S.22 of the Ordinance---Taking lenient view, a penalty of three hundred thousands rupees (Rs.300,000) was imposed for non-implementation of the orders issued under S.18-A of Securities and Exchange Ordinance, 1969---Offerer was further required to ensure compliance with the orders accordingly.

Haji Ghani Haji Usman Representing the Offerer.

Muhammad Abdul Hannan, Assistant Director (SM) assisting the Director (SMD).

Date of hearing: 8th September, 2011.

2012 C L D 68

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

NEW JUBILEE LIFE INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice No. S.M(B.O.)C.O.156(713)96 dated 17-10-2011, decided on 14th November, 2011.

Companies Ordinance (XLVII of 1984)---

----S. 246---Public listed company was required to file annual return in Form-A of the Third Schedule specified in S.156 of the Companies Ordinance, 1984 and prescribed additional information regarding pattern of shareholding and soft copy of list of Members (Annual Return) with Head Office of the Commission within the stipulated time limit---Company had not filed said annual return with the Commission for Annual General Meeting held in year 2011---Commission took cognizance of said default and issued notice calling upon the company to explain along with documentary evidence, as to why action could not be taken against it pursuant to S.246(2) of Companies Ordinance, 1984 for said contravention---Authorized Representative of the company stated that the annual return had been filed with the respective company Registration Office and pledged to furnish a copy of the acknowledgment receipt, issued by the Registrar to that effect---Authorized Representative, in circumstances, requested to drop the proceedings---Company had rightly claimed timely filing of annual return with the Commission---Plea of the company was accepted in circumstances.

Javed Ahmed, Chief Executive Officer and Manzoor Ahmed, Chief Financial Officer, New Jubilee Life Insurance Company Limited representing the Respondent.

Muhammad Farooq, Joint Director (SMD) assisting the Director (SMD).

Date of hearing: 26th October, 2011.

2012 C L D 79

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHARIQ IFTIKHAR, CHIEF EXECUTIVE OF DIAMOND INDUSTRIES LIMITED: In the matter of

Show Cause Notice No. SM(BO)222/18(566-D)/96, dated 29-9-2011, decided on 31st October, 2011.

Companies Ordinance (XLVII of 1984)---

----Ss. 222, 223 & 224---Public listed company was required under S.222(2)(c) of the Companies Ordinance, 1984 to file return of beneficial ownership on prescribed form within stipulated time period, but it failed to discharge said obligation, which attracted penal provisions contained in S.224(4) of Companies Ordinance, 1984---Company had admitted the default of late filing of the said return, with the contention that said default was not committed wilfully and knowingly and assured for timely filing of the returns in future and requested to condone the default in question---Submission made by the Secretary of the company was considered and Security and Exchange Commission agreed with the contention that the late filing of the return, was not wilful---Lenient view was taken and company was strictly warned to ensure timely compliance of S.222 of the Companies Ordinance, 1984.

2012 C L D 589

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

MUHAMMAD AHMED: In the matter of

Show Cause Notice No.1(3)/INS/MSW/SMD/2011/DCML-2 dated 5th October, 2011, decided on 4th January, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 15-A---Companies Ordinance (XLVII of 1984), S.282---Prohibition of Insider Trading--- Respondent was employee in the capacity of Fund Manager of various funds during the period under review; was also member of the Investment Committee of a company and in circumstances was involved in the decision making for day to day investments of the funds---Trading date of the Stock Exchange for the period under review, it was observed that wife of respondent was an active market participant and carried out her trading through five brokerage houses---Trading in the accounts of wife of respondent was occasionally in correlation with trading of funds of which the respondent was Fund Manager during period under review---Considering the fact that wife of the respondent was an active trader and she executed massive trading through her all accounts, only small segment of matched or correlated trades, were insufficient to conclude that respondent and his wife were guilty of misusing the information available to the respondent by virtue of his official capacity---Significant amount of losses suffered by the wife of the respondent during the course of her trading, when the respondent was Fund Manager and Member of the Investment Committee, also strengthened the arguments of the respondent regarding his non-involvement in the business affairs of his wife and her father---No stance of insider trading could be established against the respondent, whereby the respondent or his wife specifically traded in a manner that they took advantage of the trading by the funds---Respondent may not play a part in executing the trading decisions of accounts of his wife, but the fact could not be ignored that respondent had fiduciary responsibilities towards the funds and the unit holders by virtue of his privileged position---Respondent had a responsible position for managing the affairs of the funds which required thorough integrity and honesty while performing his official obligations---Linkages of respondent with the trading accounts of his wife, had raised conflict of interest between his official responsibilities and personal actions---Respondent who had not exercised diligence and care while performing his official responsibilities, was strictly warned to abstain from any unprofessional conduct in future , failing which appropriate action would be taken against him.

Muhammad Ahmed, Ex-Fund Manager of First Dawood Mutual Fund, Dawood Islamic Fund and Dawood Income Fund Present.

Ms. Tayyaba Nisar, Assistant Director assisting the Director/HOD (MSCID).

Date of hearing: 15th November, 2011.

2012 C L D 602

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

PEARL CAPITAL MANAGEMENT (PVT) LIMITED: In the matter of

Show Cause Notice No.1(07)BS/KSE/MSW/SMD/2011 dated 4th November, 2011, decided on 30th November, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, R.8, Third Schedule of Code of Conduct---Selling shares without having pre-existing interest and in violation of Regulations---Trading data of Karachi Automated Trading System of Karachi Stock Exchange revealed that company had been engaged in selling and then squaring up the positions in different scrips in its proprietary account---Securities and Exchange Commission of Pakistan sought clarification regarding said irregularity---Considering the arguments made by the company through a written reply and submission made by the representative of the company, it was established that company had sold shares without having pre-existing interest and without following the pre-requisites of the Regulations for Short Selling under Ready Market, 2001---Commission had earlier passed order against the company under S.22 of Securities and Exchange Ordinance, 1969 for violation of Code of Conduct and directed the company to ensure that full compliance be made of all Rules and Regulations---Company was also reprimanded through letter to conduct its business with due diligence, care and skill, failing which appropriate action could be taken against it---Despite earlier directions and warnings of the Commission the company continuously indulged in trading activities that were not permitted in law which had shown relaxed and casual attitude of the company towards compliance and its conformity with the applicable rules and regulations---Each and every market participant was responsible to play its due role to ensure that market was fair, efficient and transparent for the protection of investors and to reduce the systematic risk of the market---Violation of Rules and Regulations was a serious matter which entitled the Commission to suspend company's membership---Commission taking lenient view, in exercise of power under S.22 of Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.300,000 and strongly advised the company to take immediate measures and put in place proper system and checks to eliminate the occurrence of such instances in future---Company was also directed to ensure that full compliance be made of all Rules and Regulations for avoiding any punitive action under the law.

Muhammad Jaffar, Chief Operating Officer representing the Pearl Capital Management (Pvt.) Limited

Muhammad Ali, Deputy Director assisting the Director (SMD).

Date of hearing: 17th November, 2011.

2012 C L D 612

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commissioner (CLD) and Muhammad Asif Arif, Commissioner (Insurance)

SHERMAN SECURITIES (PVT.) LIMITED---Appellant

Versus

JOINT DIRECTOR (SMD)SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 48 of 2005, decided on 12th January, 2012.

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

----S. 33---Securities and Exchange Ordinance (XVII of 1969), Ss.17 & 22---Brokers and Agents Registration Rules, 2001, Rr.8 & 12 & Third Schedule---Unfair trade practice and breach of Code of Conduct---Company during month of March, 2005 carried out two hundred and thirty one trades in the shares of various companies through 'Karachi Automated Trading System' (KATS)---Securities and Exchange Commission of Pakistan obtained KATS data from Karachi Stock Exchange for the relevant period, which had shown that in March, 2005, company had executed trades which cancelled out each other; and did not result in a change in beneficial ownership---Show-cause notice was issued to the company who responded to said notice---Joint Director of the Commission dissatisfied with the response of the company, passed impugned order and imposed a penalty of Rs.100,000 on the company---Validity---Section 17 of Securities and Exchange Ordinance, 1969, would only be applicable in the case of company, if the creation of false trading and misleading appearance of active trading in any security was meant to operate as a fraud, deceipt or manipulation---No such charge against the company had been proved---Facts and evidence on record had shown that company had failed to act with due skill, care and diligence in the conduct of its business and had acted in violation of Rr.8(iv), 12 of the Brokers and Agents Registration Rules, 2001---Company had not been alleged to have benefited by indulging in the said transactions, but it had certainly breached the Code of Conduct by indulging in practices which had the effect of interfering with fair and smooth functioning of the market---Unfair trade practices like 'wash trades", were harmful for the development of market---Commission was bound to protect the interest of investors; and in doing so, it had been empowered to deal with elements which would affect smooth and fair functioning of Stock Exchanges---Company by creating false transactions, induced other investors into buying the shares and had indirectly caused loss to many other investors---Joint Director of the Commission could have suspended the licence of the company as a broker, but by taking a lenient view, had rightly imposed penalty of Rs.100,000 on the company---Impugned order could not be interfered with in appeal, in circumstances.

(b) Words and phrases---

----"Wilful", defined and explained

Muhammad Ali Lashari for Appellant

Atif Hameed, Deputy Director and Muhammad Ali, Deputy Director for Respondent.

Date of hearing: 15th November, 2011.

2012 C L D 626

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (SM)

IGI FINEX SECURITIES LIMITED: In the matter of

Show Cause Notice No.SM/BRK-138/3-4-5-6-7-10 dated 15th December, 2010, decided on 23rd November, 2011.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 21 & 22---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.29---Brokers and Agents Registration Rules, 2001, Rr.8 & 12, Third Schedule, Code of Conduct---Unauthorized trading of shares---Complainants alleged that unauthorized trading in their accounts had been done by one of the registered agent of the company---Securities and Exchange Commission advised the company to get the issue resolved, but company failed to respond to the Commission despite reminders---Company had mentioned that it was not responsible for any statement if given by the agent---Commission served show-cause notice to the company for prima facie violation identified---Commission initiated enquiry against the company under S.21 of Securities and Exchange Ordinance, 1969 read with S.29 of Securities and Exchange Commission of Pakistan Act, 1997 and Enquiry Officers were appointed---Enquiry report established that unauthorized trading was executed by the company violating clauses A-1 and B-6 of Code of Conduct contained in Third Schedule of Rules, wherein company was required to act with due skill, care and diligence in the conduct of its business; and should not have considered clients' interest inferior to its own, thereby violating R.12 of Brokers and Agents Regulations Rules, 2001---Company vide its letter misstated the facts and tried to mislead the Commission---Accounts of the complainants were established to have been used unauthorizedly by the Agent of the company---Company, in circumstances, had failed to exercise due skill and care in the conduct of its business---Conduct of the company, during the subject proceedings was irresponsible and casual and it failed to provide the information in a timely manner and also made false statements---Violation of Rules and Regulations was a serious matter which empowered the Commission to suspend registration of the company as a broker, but Commission had not exercised said power, however in exercise of powers under S.22 of Securities and Exchange Ordinance, 1969, Commission had imposed on company a penalty of Rs.750,000---Company was directed to ensure full compliance with the Ordinance, Rules, Regulations and Directives of the Commission for avoiding any punitive action under the law in future.

Azhar Batla, Chief Executive Officer, Raza Hussain Rizvi, Chief Financial Officer, Raza Hirani, Head of Operations and Farrukh Mustapha, Manager Finance authorized representatives of IGI Finex Securities Limited.

Date of hearing: 30th September, 2011.

2012 C L D 658

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director (Insurance)

Messrs NEW HAMPSHIRE INSURANCE

COMPANY: In the matter of

Show-Cause Notice dated 17th October, 2011, decided on 4th January, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(F), 12(1)(e), 99(4) & 156---Duties of the management of insurance company---Failure to meet criteria for sound and prudent management---Management of the company, in addition to the day to day running of the company and the management of its business, also had some fudiciary duties i.e. duties held in trust and some wider duties imposed by statute---Breach of those statutory duties would usually be a criminal offence punishable by fine or imprisonment---Directors of company were gauged against a higher standard of accountability which required them to be vigilant and perform their duties with due care---In the present case, the Directors had failed to perform their duties with due care and prudence---Directors were supposed to be well aware of their legal obligations in connection with statutory requirements of S.12 of Insurance Ordinance, 2000 which dealt with criteria for sound and prudent management read with S.11(1)(F) of said Act, it could legitimately be inferred that the default was committed knowingly and willfully---Penalty as provided under S.156 of Insurance Ordinance, 2000, could be imposed on the company, however, instead of imposing the maximum penalty, a nominal fine of Rs.100,000 was imposed on the company and was also sternly warned that in case of any non-compliance in future, more punitive action would be taken against the company.

Mujib Khan, Country Manager, Hasan Dossani, Chief Financial Officer and Malik Murad, Compliance Officer (Attended).

Date of hearing: 14th December, 2011.

2012 C L D 673

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

REGISTRATION OF GUARDIAN SECURITIES

(PVT.) LTD.: In the matter of

Application for Certificate of Registration, decided on 5th January, 2012.

Brokers and Agents Registration Rules, 2001---

----Rr. 3, 4(h) & 5(4), (5)---Application for grant of certificate of registration as a broker---Detailed scrutiny of information/documents attached with the application for grant of certificate had revealed that financial position of the applicant company was severely deteriorated, as the company defaulted on its loans payable to the Banks; had failed to provide its audited financial statements; was facing serious unresolved management conflicts; had no proper Board of Directors as the Chief Executive Officer/Nominee Director of the company had resigned but the company was still declaring the said person as its Chief Executive Officer---Change of Nominee Director of the company was neither reported to, nor notified by, the Stock Exchange---Present Directors of the company did not fulfil the experience as stipulated in R.4(h) of Brokers and Agents Registration Rules, 2001---Allowing the company to undertake securities business in view of said deficiencies was not in the interest of investors and stock market---Applicant company being not eligible for registration as a Broker, its application was refused in terms of R.5(5) of Brokers and Agents Registration Rules, 2001.

Abdul Mansoor Khan, Consultant, Guardian Securities (Pvt.) Ltd. and Tariq Junaid, Manager Accounts, Guardian Securities (Pvt.) Ltd. Present.

Hasnat Ahmad, Director (BR&ICW) and Ms. Asima Wajid, Deputy Director (BR&ICW) assisting the Director/HOD (MSCID).

Date of hearing: 19th December, 2011.

2012 C L D 691

[Securities and Exchange Commission of Pakistan]

Before Muhammad Asif Arif, Commissioner (Insurance)

and Imtiaz Haider, Commissioner (SMD)

MONNOO INDUSTRIES LIMITED

and 7 others---Appellants

versus

EXECUTIVE DIRECTOR (CLD), SECURITIES AND

EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.13 of 2006, decided on 12th January, 2012.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.160, 208, 236 & 476---Investment in associated company made without authority of special resolution---Additional Registrar of the Companies, reported that an amount of Rs.8.516 million was disclosed as due from associated undertaking Annual audited accounts of the company---Company acknowledged said default and requested for pardon for the same---Company failed to offer any explanation of said contravention, which attracted penal provision contained in S.160(8)(b) of the Companies Ordinance, 1984---When an investment was made in associated companies without a special resolution under S.208 of the Companies Ordinance, 1984, the shareholders could either reverse the transaction or regularize the investment by passing a special resolution---Such would not absolve the shareholders from penalty for non-compliance of S.208 of Companies Ordinance, 1984---Post facto approval of investment made in associated company through a special resolution was not envisaged by the Ordinance; and subsequent ratification of the default would not exonerate the company from non-compliance of S.208 of the Companies Ordinance, 1984---Order imposing penalty on the company and its Directors, could not be interfered with in appeal, in circumstances.

Shahbaz-ud-Din v. Service Industries Textiles Limited PLD 1988 Lah. 1 and M. Shahid Saigol v. Kohinoor Textile Mills Limited PLD 1995 Lah. 264 distinguished.

Gharibwal Cement Limited v. Executive Director (Enforcement and Monitoring) Securities and Exchange Commission of Pakistan 2003 CLD 131 rel.

Asif-ur-Rehman for Appellants.

Mubasher Saeed Saddozai, Director and Waseem Ahmad Khan, Joint Registrar for Respondent.

Date of hearing: 13th October, 2011.

2012 C L D 710

[Securities and Exchange Commission of Pakistan]

Before Muhammed Asif Arif, Commissioner (Insurance)

and Imtiaz Haider, Commissioner (SMD)

SALEEM BAIG---Appellant

versus

YASMEEN WEAVING MILLS LIMITED---Respondent

Appeal No.4 of 2007, decided on 12th January, 2012.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.77, 78-A, 152 & 406(1)---Transfer of shares---Refusal to transfer---Respondent company availed various finance facilities from the Bank; and against said facility, company pledged various shares with the Bank as security---Company having failed to pay back the finance facility, the bank disposed of the pledged shares---Appellant bought shares of the company from the bank and paid amount as full consideration of the paid shares---Appellant lodged shares with the company along with all requisite documents for transfer of shares in his name, but the company did not accede to the request of the appellant nor stated any reason of its refusal in sheer violation of S.77 of the Companies Ordinance, 1984---Appellant filed appeal under S.78-A of the Companies Ordinance, 1984, the Securities and Exchange Commission of Pakistan, was entrusted to hear appeals against refusal to register the transfer of shares---Commission could exercise said powers concurrently with a court, where the issue only pertained to ordering registration of shares with the company---In the present case the shares had already been transferred in the name of the appellant, but transfer of shares had not been registered by the company---Executive Director (Registration), in terms of S.78-A(3) of the Companies Ordinance, 1984, ought to have ordered the company to register the shares in the name of the appellant---Order for winding up of the company had already been passed by the court; and official liquidator had been appointed---Matter was referred to the liquidator, who could approve to enter the name of the appellant in the register of members in terms of S.406(1) of Companies Ordinance, 1984.

Immad I. Malik and Qasim Rasool for Appellant.

Mubasher Saeed, Director (Enforcement) for Respondent.

Date of hearing: 13th October, 2011.

2012 C L D 741

[Securities and Exchange Commission of Pakistan]

Before Muhammad Asif Arif, Commissioner (Insurance)

and Imtiaz Haider, Commissioner (SMD)

RAZA ABDUL AZIZ AL-RAEE, CHAIRMAN/

CHIEF EXECUTIVE OFFICER and 6 others---Appellants

versus

EXECUTIVE DIRECTOR (CLD), SECURITIES AND

EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No. 20 of 2006, decided on 12th January, 2012.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.208 & 472--- Unauthorized investment in associated undertaking---Annual audited accounts for the relevant years of the company showed that company made unauthorized investment in its associated undertaking---Company submitted reply to show-cause notice issued to it---Counsel for the company admitted default and assured that default of non-compliance with mandatory provisions of S.208 of the Companies Ordinance, 1984 would be ratified within 25 days; and requested that a lenient view could be taken---Commission vide impugned order imposed a penalty of Rs.300,000 on each Director of the company; in addition Commission further directed the company under S.472 of the Companies Ordinance, 1984 to make good the default and recover the unauthorized investments; and to remove the irregularities made in the investments---Company was in violation of S.208(1) of the Companies Ordinance, 1984 for failing to pass special resolution indicating the nature, period and amount of investment; and the terms and conditions under which the investment was made---Counsel for appellant company had confirmed in writing that directions of the Commission in the impugned order regarding return of investments, had been complied with, which fact had also been confirmed by the representatives of the Commission---Commission while passing the impugned order had gone beyond the ambit of show-cause notice and penalty was also imposed on transaction regarding which investments were returned in compliance with the direction of the Commission---Company having complied with the direction of the Commission, taking lenient view penalty was reduced from Rs.300,000 to Rs.100,000 on each Director of the company.

M. Farooq Akhtar for Appellants.

Haris Bin Tipu, Deputy Director and Anwar Hashmi, Deputy Director for Respondent.

Date of hearing: 13th October, 2011.

2012 C L D 854

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCI)

ZAFAR MOTI CAPITAL SECURITIES (PRIVATE) LIMITED: In the matter of

Show Cause Notice No.1(07)BS/KSE/MSW/SMD/2009 dated 22nd November, 2011, decided on 28th December, 2011.

Brokers and Agents Registration Rules, 2001---

----Rr. 8, 9, 12 & Third Sched.---Securities and Exchange Ordinance (XVII of 1969), S.22---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.33 & 34---Failure to deposit amount of penalty---Suspension of registration---Securities and Exchange Commission of Pakistan, imposed a penalty of Rs.400,000 on the company registered with the Commission under S.22 of Securities and Exchange Ordinance, 1969 and directed the company to deposit said amount in the account of the Commission within 30 days---Appeal filed by the company under S.33 of Securities and Exchange Commission of Pakistan Act, 1997, was dismissed and order imposing penalty was upheld by the Appellate Bench---Company, neither preferred an appeal under S.34 of Securities and Exchange Commission of Pakistan Act, 1997 nor deposited the amount of penalty as directed through order of the Commission---Admission of default and failure of the company to deposit the amount of penalty and failure to comply with the direction of the Commission, despite being afforded numerous opportunities to deposit the amount of penalty, had established that the company had contravened clause D(1)(2) of Code of Conduct set forth under the Third Schedule and R.12 of the Brokers and Agents Registration Rules, 2001---Conduct of the company of consistent and flagrant contravention of direction of the Commission, was appalling and deeply concerning---Registration of the company, as a broker was suspended for a period of fifteen days, by the Commission in exercise of the powers under R.8 of Brokers and Agents Registration Rules, 2001; company was directed to immediately deposit the amount of the penalty and furnish a copy of the deposit challan in the office, failing which registration of the company as a broker would be cancelled in accordance with R.9 of Brokers and Agents Registration Rules, 2001.

Zafar Moti, Chief Executive Officer representing Zafar Moti Capital Securities (Pvt.) Limited.

Muhammad Ali, Deputy Director assisting the Director (SMD).

Date of hearing: 28th December, 2011.

2012 C L D 873

[Securities and Exchange Commission of Pakistan]

Before Tahir Mahmood, Commission (CLD) and Mohammed Asif Arif, Commissioner (Insurance)

REHAN AHMED, CHIEF EXECUTIVE OFFICER, MUBARAK TEXTILE MILLS LIMITED---Appellant

versus

COMMISSIONER (SMD)---Respondent

Appeal No.86 of 2006, decided on 12th January, 2012.

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

----S. 33---Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002), Ss.3, 4, 5, 7, 9, 13, 25 & 26---Increase in shares---Annual audited accounts of the company for the relevant years transpired that company's shareholding had increased attracting Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002---Company's consultant, intimated that the transactions which caused increase in shareholding of company, were shares from parents of the Chief Executive of the company as gift and from his brother---Consultant of company further stated that those were all inter family transactions/arrangements and no general public acquisition or takeover had taken place---Shares in question having been claimed to be transferred to the company as a gift from the Chief Executive's parents during their lifetime, subsection (e) of S.3 of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 was inapplicable---Section 3 of said Ordinance had listed down certain transactions which were exempt from the provisions of said Ordinance---Inter family transactions/arrangements did not fall under any of those exempted transactions---Commission had already taken a lenient view in the impugned order by imposing a penalty of Rs.100,000 on the appellant, when maximum penalty could have been one million rupees--- Impugned order imposing penalty was upheld and appeal was dismissed.

Faisal Latif, Chartered Accountant for Appellant.

Abid Hussain, Director and Aqeel A. Zeshan, Deputy Director for Respondent.

Date of hearing: 15th November, 2011.

2012 C L D 911

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (BR&ICW)

SHOW CAUSE NOTICE DATED APRIL 20, 2011, ISSUED TO MESSRS H.S.Z. SECURITIES (PVT.) LTD. EX- MEMBER OF THE LAHORE STOCK EXCHANGE (G) LIMITED: In the matter of

Show Cause Notice dated 20th April, 2011, decided on 5th March, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 21 & 22---Failure of the company to provide required information within stipulated time and non-appearance before enquiry Committee by the Directors of the company---Notice was published in the newspapers that company had filed a winding-up petition in the High Court---Company closed its offices registered with the Stock Exchange without any prior information in violation of Regulation 10 of the Regulation governing Stock Exchange Members' office for conducting the business and trading of shares and securities within/outside the Exchange---Enquiry Committee was duly appointed and the company was directed to fully co-operate and assist the Enquiry Committee to provide any information and documents as required by the Committee---Enquiry Committee advised the company to provide certain information, but the company, not only failed to provide the required information, within the stipulated time, but the Directors of the company also failed to appear before the Enquiry Committee despite repeated notices---Company and its directors had been delaying the matter on one pretext or the other---Arguments and contentions raised by the company in the matter had no merits---Numerous opportunities had been afforded to the company to furnish the required information and to comply with the directions of the Enquiry Committee, but the company and its directors had failed to comply with the directions of the Enquiry Committee to furnish the information and record as required under the Securities and Exchange Ordinance, 1969---Certain issues of grave concern had also been placed on record by the Enquiry Committee, which had further substantiated the motive of the Directors of the company for failure to comply with the provisions of the Ordinance---In view of deliberate and wilful failure of the company and its Directors to provide required information, violation of S.21 of Securities and Exchange Ordinance, 1969, stood established---Company and its directors having failed to comply with the requirements of the Ordinance and Rules and Regulations made thereunder, Securities and Exchange Commission, in exercise of powers conferred on it by S.22 of Securities and Exchange Ordinance, 1969, imposed penalty of Rs. 2 million on the company and of Rs.1 million on each Director of the company.

No one appeared on behalf of H.S.Z. Securities (Pvt.) Ltd.

Asima Wajid, Deputy Director assisting the Director (BR&ICW).

Date of hearing: 20th October, 2011.

2012 C L D 944

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHOW CAUSE NOTICE ISSUED TO MR. WASIM HYDER JALBANI: In the matter of

Show Cause Notice No.1(13)/INS/MSW/SMD/2010/JSIL/01 dated 19th October, 2011, decided on 29th February, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 15-A---Companies Ordinance (XLVII of 1984), S.282(I)--- Insider trading--- Funds Manager of the Investment Company and the funds under its management, remained part of Investment Committee; he was involved in the decision making process of investment/disinvestment of portfolios of Islamic Fund, Protected Fund and was privy to inside information pertaining to investment by said Funds---Company had authorized the said Manager to operate the trading account on its behalf---During on-site inspection of the company and the funds, the trading details of the funds, were reviewed including the details of trading activities undertaken by the brother of the respondent and it was observed that brother of the respondent was an active market participant and carried out his trading activities---Trading activities of brother of the respondent were reviewed in relation with the trading of the funds---Major trading portion of brother of the respondent was executed in corelation with the funds, wherein the timing of trade executed by the brother of the respondent was in close corelation with trading funds---Suspicious trading by brother of the respondent was observed in 21 different scrips---Details received from the Broker Houses had revealed that respondent had authorized the brother to operate his trading account on his behalf---Respondent being a Fund Manager was privy to the inside information regarding investment by the funds---Trading of brother of the respondent, mostly concentrated in those scrips in which the funds traded, while the respondent was the Fund Manager---Huge amount was credited in the bank account of the respondent---Significant amount of profits in the trading account of the brother of the respondent and its trading pattern had clearly indicated that the respondent had used inside information pertaining to the investment decisions of the funds; and traded on the basis of such inside information through the account of his brother and earned significant profit--- In terms of S.15-A(2)(a) of Securities and Exchange Ordinance, 1969, an insider person transacting any deal, directly or indirectly using inside information involving listed securities to which the inside information pertained, would be deemed to have committed inside trading--- In exercise of powers under S.15-E(1) of Securities and Exchange Ordinance, 1969, fine of Rs.2,500,000 was imposed on the respondent and Rs. Five Hundred Thousands for the contravention of subsection (1) of S.15-A of said Ordinance.

Wasim Hyder Jalbani, Ex-Fund Manager, JS Investment Limited.

Muhammad Ali, Deputy Director and Ms. Tayyaba, Assistant Director assisting the Director/HOD (MSCID).

Date of hearing: 30th December, 2011.

2012 C L D 977

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHOW CAUSE NOTICE ISSUED UNDER SECTION 246 OF THE COMPANIES ORDINANCE, 1984 TO FIRST DAWOOD INVESTMENT BANK LIMITED: In the matter of

Show Cause Notice No.S.M(B.O.)C.O.156(650)95 dated 21st December, 2011, decided on 30th January, 2012.

Companies Ordinance (XLVII of 1984)---

----S. 246---Failure to submit statements of account and reports---Record had shown that company had failed to file annual return in Form-A of Third Schedule specified in S.156 of the Companies Ordinance, 1984---Secretary of the company was asked vide letter to file said Annual Return along with reasons for non-filing of the same within the stipulated time limit---Company, in response to said letter filed the Annual Return with the contention that the return had already been filed with the Commission and provided documentary evidence to that effect---Documents filed by the company were examined and it was observed that required return was filed by the company with the Company Registration Office, instead of the Commission---Record showed that return had been filed with the Commission with a delay of 312 days in contravention of notification issued by the Commission---Said default attracted penal provisions of S.246(2) of the Companies Ordinance, 1984---Record had revealed that company had previously filed its returns with the Commission within the stipulated time limit---Return under reference was also filed by the company within the stipulated limit, but it was mistakenly addressed to the Specialized Companies Division rather than Securities Market Division of the Commission--- Lenient view of the matter had been taken and contention of the company was accepted.

Nabeel-ur-Rehman, Branch Manager, First Dawood Investment Bank Limited, Lahore for Respondent.

Muhammad Farooq, Joint Director (SMD) assisting Director/HOD (MSCID).

Date of hearing: 24th January, 2012.

2012 C L D 987

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHOW CAUSE NOTICE ISSUED TO ADEEL AND NADEEM SECURITIES (PVT.) LTD.: In the matter of

Show Cause Notice No.Misc/MSW/SMD/1 (5) 2004/1480 dated 3rd February, 2012, decided on 24th February, 2012.

Brokers and Agents Registration Rules, 2001---

----R. 8(ii)(iv), (a)(b), Third Schedule, Code of Conduct, Clause-D---Failure to provide specific information---Commission advised the company to provide specific information relating to its client---Information sought by the Commission was vis-a-vis, the client's account opening forms, trading statement, financial ledger and receipts and payments for the relevant period---Company provided incomplete information, which was misleading and incorrect---Show cause notice was issued to the company for not providing complete and accurate information and concealing the same from the Commission---Company was established to have complete idea of the information required by the Commission; which the company had knowingly failed to provide and violated clause-D(2) of Code of Conduct prescribed in the Brokers and Agents Registration Rules, 2001, R.8(ii)(iv), which was punishable under R.8(a)(b) of said Rules---Commission took lenient view of the matter and instead of suspending the company under R.8(a) of the Brokers Rules, in exercise of the power under R.8(b) of the Rules, imposed on the company a penalty of Rs.50,000 and company was strictly advised to follow the regulatory framework---Company was asked to ensure compliance with applicable legal regime and directives of the Commission in future for avoiding any punitive action under the law.

Ali Bakhsh Khokhar, Manager Accounts for Adeel and Nadeem Securities (Private) Limited.

Umair Zahid, Assistant Director assisting the Director/HOD (MSCID).

Date of hearing: 14th February, 2012.

2012 C L D 999

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHOW CAUSE NOTICE ISSUED TO INVEST CAPITAL MARKETS LIMITED: In the matter of

Show Cause Notice No.MISC/MSW/SMD/ 1(5)2004 dated 22nd December, 2011, decided on 31st January, 2012.

Brokers and Agents Registration Rules, 2001---

----Rr. 5, 8, 14 FL 17---Registration and obligation of company---Company, in the present case, was member of Karachi Stock Exchange (Guarantee) and registered with Securities and Exchange Commission under Brokers and Agents Registration Rules, 2001--Automated Trading System (KATS) data and off-market data of Stock Exchange, showed that unusually high volume in the scrip of a specific company, was traded at the Stock Exchange---Further scrutiny of the matter revealed that the company executed order of its clients, in the scrip of said specific company---Commission asked the company to provide its comments and explain the rationale behind the execution of the trades in question---Company vide its reply reiterated its stance and narrated that since said specific company was a thinly traded scrip and few trades in the scrip contributed to the high volume of the scrip---Company had further stated that it facilitated the off-market reversal of the said trades keeping in view that its client might want to change the , investment . classification of the scrip---Company executed trades through its terminals in a manner, whereby there was no change of beneficial ownership---Matter of prime importance keeping in view the sensitivity of scrip of the specific company in terms of Index weightage; and its subsequent impact on the market statistics---Company should have conducted business with responsibility; and ensured full compliance of all the rules and regulations of the Commission and Stock Exchange---Prime responsibility of the company was to monitor all trading activities being carried out through its brokerage house and keep track of any transaction which was being made with a view to create any misleading impression---Company had not exercised diligence and care while performing its obligation---Considering the fact that it was the first noted occurrence of such improper practice by the company and it had assured to adopt cautious approach in future, lenient view in the matter. was taken and company was strictly warned to abstain from any malpractice in future failing which appropriate action would be taken--- Company was also directed to ensure that full compliance was made of all the rules, regulations and directives of the Commission in future for avoiding any punitive action under the law.

Mehmood Mandiwalla, Ms. Sana Iftikhar, Legal Counsel, Mandviwalla and Zafar and Shahrukh Naqvi, Head of Equity Sales representing Invest Capital Markets Limited.

Khurshid Malik, CEO, Invest Capital Markets Limited representing Invest Capital Investment Bank Limited

Enam Khan, Head of Equity and Capital Markets representing Faysal Bank Limited.

Ms. Tayyaba Nisar, Assistant Director assisting Director/HOD (MSCID).

Date of hearing: 30th December, 2011.

2012 C L D 1031

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHOW CAUSE NOTICE ISSUED UNDER SECTION 224(4) OF THE COMPANIES ORDINANCE, 1984 TO BANK ALFALAH LIMITED, A MORE THAN TEN PER CENT SHAREHOLDER OF WATEEN TELECOM LIMITED: In the matter of

Show Cause Notice No. S.M(B.O.)C.O.222/1(85)11 dated 21-12-2011, decided on 31st January, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 222, 223 & 224---Failure to submit statements of beneficial owners of listed securities---Bank which was more than ten per cent shareholder of Issuer company, was required to file the return of beneficial ownership on Form-31, within the period stipulated under S.222 of the Companies Ordinance, 1984, but it failed to discharge the said obligation which had attracted penal provisions contained in S.224(4) of the Companies Ordinance, 1984---Beneficial owners/persons, were required to report their shareholding as well as changes in shareholding at the same time to the Registrar of the Companies and the Commission---Said officers and more than ten per cent shareholders of a listed company, were required to fulfil their statutory requirements within time period provided in the law---Inevitability of the filing of the return of beneficial ownership with the Commission, could be adjudged from the fact that it would enable the Commission to monitor the trading activities of the returnee---Bank had contravened the provisions of S.222 of the Companies Ordinance, 1984, but it had promptly acted on receipt of letter and filed the Form-31---Record had revealed that Bank had made no purchase and sale transaction in the shares of the Issuer company---Taking a lenient view of the fault, in exercise of powers conferred under S.224(4) of the Companies Ordinance, 1984, the Commission had imposed a fine of Rs.30,000 on the Bank; and no further fine for continuous default, which could extend one thousand rupees per day for the default period.

Hamid Ashraf, General Manager, Legal and Company Secretary, Bank Alfalah Limited for Respondents.

Muhammad Farooq, Joint Director (SMD) assisting the Director/HOD (MSCID).

2012 C L D 1065

[Securities and Exchange Commission of Pakistan]

Before Ali Azeem Ikram, Head of Enforcement Department

Messrs ALI ASGHAR TEXTILE MILLS LIMITED: In the matter of

Show Cause Notice No.EMD/233/78/02-983-89 dated 12th January, 2012, decided on Ist February, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 196 & 476---Powers of Directors of the company---Scope---Provisions contained in S.196 of the Companies Ordinance, 1984 were clear and unambiguous and had drawn a dividing line between powers of Directors of company and that of its shareholders---Procedure and manner of seeking shareholders' approval had been elaborated through notification---In the present case, the assets disposed comprised of 30% of total assets and 48% of total company lands, was sizeable part of the company, both in terms of value and size---Disposal transaction, was required to be taken to a duly convened shareholders' meeting for approval as a special business, in accordance with provision in S.196 of the Companies Ordinance, 1984; if it was accepted that the transaction was approved by 95% of the company's shareholders in the Annual General Meeting, called and convened after the publishing of notice for invitation of bids, even then the approval did not in any way undo the default of express provisions of S.196 of the Companies Ordinance, 1984, read with the notification---Provisions of clause (a) of subsection (3) of S.196 of the Companies Ordinance, 1984 had been violated and the default had been admitted---Directors were liable for the penalties as defined in subsection (4) of S.196 of the Companies Ordinance, 1984--- Instead of imposing maximum penalty provided in the law, penalty aggregating to Rs.3,50,000 was imposed on the Chief Executive and six Directors.

Mansoor Usman Awan present.

2012 C L D 1082

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSCID)

SHOW CAUSE NOTICE ISSUED TO MESSRS WASI SECURITIES (SMC-PVT.) LTD. EX-MEMBER OF THE LAHORE STOCK EXCHANGE (G) LIMITED: In the matter of

Show Cause Notice No.4 (BRL-53) SE/SMD/2001 dated 14th February, 2012, decided on 7th March, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 21 & 22---Securities and Exchange Commission of Pakistan Act (XLI Of 1997), S.29---Complaint against the company which had filed application for its winding-up---Failure of the company to provide required information---Security Exchange Commission, received numerous complaints against the company which had applied for its winding-up, regarding unlawful withdrawal of shares from the sub-accounts of its clients and disposing of the shares without permission of the account holders---Company also failed to honour the arbiter award of arbitrators of the Stock Exchange---In view of such violation, misstatements, non-compliance and pending investor's claims, on part of the company, Enquiry Committee was constituted to enquire into the matter---Company was directed to fully cooperate and assist the Enquiry Officers in conducting and completing the enquiry and to provide any information and documents as required by the Enquiry Officers from time to time---Company failed to provide required information and Directors of the company failed to appear despite repeated directions---Arguments and contentions raised by the Company were not relevant to the matter in issue---Issues of grave concerns placed on record by the Enquiry Committee, had further substantiated the motive of the directors of the company for failure to comply with the provisions of Securities and Exchange Ordinance, 1969---Company and its directors had been delaying the matter on one pretext or the other---In view of said deliberate, wilful failure of the company and its directors to provide the information/record as required by the Enquiry Officers, violation of S.21 of Securities and Exchange Ordinance, 1969, stood established---Securities and Exchange Commission of Pakistan, in exercise of its powers conferred by S.22 of Securities and Exchange Ordinance, 1969, imposed penalty of Rs.3 million on the company and of Rs.2 million on the directors of the company, in circumstances.

Nemo for Respondents.

2012 C L D 1109

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (BR&ICW)

SHOW CAUSE NOTICE ISSUED TO MESSRS FIRST PAKISTAN SECURITIES LIMITED: In the matter of

Show Cause Notice No.4(BRL-91)/SMD/SE/2002 dated 7th February, 2012, decided on 7th March, 2012.

Brokers and Agents Registration Rules, 2001---

----R. 8---Renewal of certificate of registration---Company, which was a member of Stock Exchange and was registered with Securities and Exchange Commission of Pakistan, applied for renewal of its certificate of registration with the Commission---Scrutiny of said application revealed that financial health of the company had seriously deteriorated as per its statements for the year 2011 and company was operating with negative equity---Commission advised the company to inject additional equity to support its financial position---Company, despite Commission's continuous instructions, had failed to take necessary steps for the revival of its financial position---Taking notice of such failure, show-cause notice was served to the company for initiating action under R.8 of Brokers and Agents Registration Rules, 2001---Authorized representative of the company appeared and provided written statement and gave certain justifications and stated certain steps had been taken to improve the financial position of the Company---Keeping in view the steps taken by the company so far, for revival of its financial position, it was observed that there was no complaint against the company---In the larger interest of the investors and stakeholders, a lenient view was taken; and the certificate of registration of the company was renewed---Company was directed to submit quarterly reports to the Commission regarding the efforts and their outcome for improving its financial position, till the time of next renewal.

Ali Raza Jaffery, Authorized Representative of the Respondent.

Ms. Asima Wajid, Deputy Director assisting the Director (BR&ICW).

2012 C L D 1120

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCI)

SHOW CAUSE NOTICE ISSUED TO JS GLOBAL CAPITAL LIMITED: In the matter of

Show Cause Notice No.1(7) IT/MSW/SMD/2011/09 dated 28th November, 2011, decided on 20th March, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Trading by individual clients of the company extensively in shares of other companies---Trading data of Automated Trading System of Stock Exchange had shown that five individual clients of the company traded extensively in share of a number of companies---Said individual clients, as a result of such trading, earned a cumulative profit of over Rs.8.70 million in their accounts---Trading pattern of individual clients and their synchronization with trading of foreign and local institutional clients of the company along with the observation of strong relationship of some of the individual clients with senior executive of the company, prima facie, indicated that the company failed to provide best execution to its foreign and local institutional clients---Company therefore, failed to protect confidential information relating to large trading orders and investment decisions of those individual clients, which was being used by individual clients for their own trading purposes---Employees of the company misused the information regarding trading decisions provided by the foreign and local institutional clients of the company---Trading by the individual clients was not by any means in accordance with the legitimate and fair market practices---Time span of around two years involved in the suspected trading by the individual clients, which was in collusion with the employees of the company, was quite significant; which had caused suspicion that those activities went undetected by the company, despite the strong control and policies as signified by the company---Employees of the company, including the senior officials, were assisting and aiding in the suspected activities of the individual clients, compromising the fair execution to foreign and local institutional clients--- Company, quite likely, was not aware of the activities of the individual clients in collusion with its employees to trade on the basis of material non-public information, but failure of detection mechanism of the company, despite all its stated control and policies established to averse the activities of its employees, was of deep concern---Company was reproached and censured for conduct which did not commensurate with high standards of conduct expected of the company---Company was advised to ensure that no employee or their associated person should be allowed or given any opportunity to take unfair advantage of their position at the expense of other clients of the company---Company was directed to ensure compliance of the laws and policies and directives of the Commission.

Kamran Nasir, CEO, JS Global Capital Limited.

Rashid Sadiq, Authorized Representative.

Umair Zahid, Assistant Director (MSCID) assisting the Director (MSCID).

2012 C L D 1174

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHOW CAUSE NOTICE ISSUED TO UNITED CAPITAL SECURITIES (PVT.) LIMITED: In the matter of

Show Cause Notice No. MISC/MSW/SMD/1(5)2004/1471 dated 17th January, 2012, decided on 13th April, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, R.12, Sched.III---Failure to abide by Rules---Detailed analysis of the trading data of the company indicated that its two clients had actively traded in the scrips in a manner whereby majority of their transactions matched with each other; and resulted in the price appreciation of the scrips---Date-wise trading details of the scrips, indicated that said clients while trading through the company, were the main traders during the days when the share prices witnessed an increase and it was noted that at various instances said two clients placed their bids and offers regularly at the upper limit in such a way that bids and offers matched with each other; and the scrips closed at the upper price limit of the day---Prima facie, it appeared that said clients were trading in collusion with each other in the scrips and it was evident that the company showed negligence in conduct of its business and was unable to detect/scrutinize the abnormal trading executed through its terminals---Transactions in question executed through the company, resulted in price inflation and generation of artificial volumes in the scrips and in circumstances had created false market--- Being in the business of brokers, it was mandatory on the company to execute its business with due care and skill; and to put in place proper systems and controls to ensure that it business was conducted according to the law---Company being a broker during the period under review, had failed to abide by R.12 of Brokers and Agents Registration Rules, 2001 and had violated cls. (A-1), (A-2), (A-4), (A-5) of the Sched. III of said Rules punishable under S.22 of Securities and Exchange Ordinance, 1969---In exercise of powers under S.22 of Ordinance, 1969 a penalty of Rs.10,000 was imposed on the company.

Wasi Mirza, Chief Executive Officer and Ms. Haroon Younus, Director representing United Capital Securities Limited.

Ms. Tayyaba Nisar, Assistant Director and Kapeel Dev, Assistant Director assisting the Director/HOD (MSCID).

Date of hearing: 22nd March, 2012.

2012 C L D 1262

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

AL MEEZAN INVESTMENT MANAGEMENT LIMITED: In the matter of

Show Cause Notice No.1(3)INS/MSW/SMD/2012/AMIML-01, dated 5th January, 2012, decided on 28th March, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 15(E)---Insider trading---Scrutiny and examination of trading data of Automated Trading System of Stock Exchange, revealed that funds under the management of the company, traded heavily through its funds---Different funds administered by the company made a cumulative gain on sale of shares---Company, in response to notice, submitted its reply, wherein it was contended that company had no inside information regarding the sale of shares---Company had contended that the subject off market deal was offered by another company; and that it had no information regarding the identity of the seller---Said contention appeared to have no rational basis, as the structuring of such outsized deals usually required substantial time---Trading in question did not meet the standards of trading practices that was expected of a major participant in the market which had created doubts and suspicions and resulted in initiation of proceedings by the Commission---Transactions were structured in a way which had given impression of Insider dealing---Such dubious trading patterns and timing of trades, could lead to believe by the Regulator as interference in the fair and proper functioning of the market---Company was a well-reputed and prestigious Asset Management Company of the country; and high standards of conduct and compliance was expected of it---Company was reproached and censured for conduct, which did not commensurate with high standards of comfortment expected of the company--- Company was also warned to abstain from trading in such questionable manner in future, which created suspicions and doubts of insider dealing--- Management of the company was directed to ensure compliance of the laws in letter and spirit.

Muhammad Asad, Chief Investment Officer and Jaseem Ahmed Khan, Compliance and Internal Audit for Respondent.

Osman Syed, Deputy Director, SECP assisting the Director/HOD (MSCID).

Date of hearing: 27th January, 2012.

2012 C L D 1276

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSCID)

SHOW CAUSE NOTICE DATED FEBRUARY 17TH, 2012 ISSUED TO Messrs KHALID JAVED SECURITIES (PVT.) LTD., EX-MEMBER OF THE LAHORE STOCK EXCHANGE (G) LIMITED: In the matter of

Show Cause Notice dated 17th February, 2012, decided on 29th March, 2012.

Companies Ordinance (XLVII of 1984)---

----S. 297---Securities and Exchange Ordinance (XVII of 1969), Ss. 18 & 22--- Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.21 & 29---Winding up of company---Failure to provide required information and making false and incorrect statements---Company which was a Member of Stock Exchange and registered with the Commission as a broker, through a letter informed the Commission about winding up of the company and closure of its offices registered with Stock Exchange---Commission conducted initial scrutiny of documents, record and contents of the winding up petition filed by the company, which had revealed that heavy amount of Rs.39.84 million was payable by the company to the investors---In view of the prima facie violation, non-compliances and pending investors claims against the company, the competent Authority ordered an inquiry under Ss.21 & 29 of Securities and Exchange Commission of Pakistan Act, 1997---Inquiry reports submitted by the Inquiry Officers had revealed that the company had submitted false and incorrect information/statements; and that company had failed to provide relevant record and information despite repeated directions---Chief Executive of the company during the course of inquiry proceedings, made incorrect and self-conflicting statements, and he even admitted that the documents required by the Enquiry Officers were in his custody---In view of the wilful default of the company and its Directors to provide information, failure to comply with the direction's of the Enquiry Officer, company had failed to comply with requirements of the Securities and Exchange Ordinance, 1969 and Rules made thereunder---Penalty of two million rupees was imposed on the company, in circumstances, payable jointly and severally by the company and its Directors---In addition, in view of the false and incorrect statements made by the Chief Executive on behalf of the company, a penalty of Rs. One Million was imposed on the Chief Executive of the company---Order accordingly.

Javed Gulzar, Chief Executive/Director and Khushnood Ahmed Gulzar, Director of Respondent representing Messrs Khalid Javed Securities (Pvt.) Ltd.

Mrs. Samina Javed, Director of Respondent absent.

Date of hearing: 8th March, 2012.

2012 C L D 1326

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (BR&ICW)

RENEWAL OF CERTIFICATE OF REGISTRATION OF TRUST CAPITAL (PVT.) LTD. AS A BROKER UNDER THE BROKERS AND AGENTS

REGISTRATION RULES, 2011: In the matter of

Application No. Nil, dated 17th November, 2011, decided on 18th April, 2012.

Brokers and Agents Registration Rules, 2001---

----Rr. 5 & 7---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss.22 & 23---Renewal of certificate of registration as a broker---Detailed scrutiny of information/documents attached by the company with its application for the purpose had revealed that the company was a wholly owned subsidiary of an Investment Bank---Company had reported change in its shareholding structure and accordingly filed return i.e. "Form A"---Bank filed an application with competent Authority for approval of sale of its shareholding to another company---Prima facie, it appeared that company furnished information along with its application for renewal of certificate of registration, which it had reasonable cause to believe to be false and incorrect---Authorized representative of the company had stated that the company was not aware of the pendency of the Bank's application for sale of the company with competent Authority---Company before recording the change in its register of members and subsequently reporting the same to Company Registration Office through 'Form-A' should have known the requirement of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003 regarding prior approval of the Commission before divestment by a shareholder which was a Non-Banking and Finance Company, which was also holding company of the applicant company---Since the application filed by the Bank for sale of company's shares under Non-Banking and Finance Companies (Establishment and Regulations) Rules, 2003, had been refused by the competent Authority, sale/transfer of shareholding of the company as reported to the Commission, was unauthorized---Company having been established that same in its application for renewal of certificate of registration, had provided false and incorrect information, had failed to fulfil the eligibility requirements for renewal of the certificate of registration---Renewal of certificate of registration was also not in the interest of investors and stock market---Application of the company for renewal of certificate of registration as a "broker" was refused, in circumstances.

Abrar Hussain, CEO/Nominee Director, Trust Capital (Pvt.) Ltd.

Ms. Asima Wajid, Deputy Director (BR&ICW) assisting the Director (BR&ICW).

Date of hearing: 5th April, 2012.

2012 C L D 1366

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SHOW-CAUSE NOTICE ISSUED UNDER SECTION 224(4) OF THE COMPANIES ORDINANCE, 1984 TO CH. ZAHOOR AHMED, CHIEF EXECUTIVE OF THE PAKISTAN GENERAL INSURANCE COMPANY LTD.: In the matter of

Show Cause Notice No.S.M.(B.O)C.O.222/2(306)07 dated 9th January, 2012 decided on 22nd March, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 222 & 224---Failure to file return of change in beneficial ownership---Chief Executive/Director of Public Limited Company, who was required to file return of change of his beneficial ownership on Form 20, within the period stipulated under S.222 of the Companies Ordinance, 1984, had failed to discharge said obligation, which attracted penal provisions contained in S.224(4) of the Companies Ordinance, 1984---Director of the company had contravened the provisions of S.222 of the Companies Ordinance, 1984 and had filed the return in question on receipt of letter from the Commission, for receipt of bonus shares regularly---Taking lenient view of the defaults, in exercise of powers conferred under S.224(4) of the Companies Ordinance, 1984, fine of Rs. Twenty thousand was imposed on the Director, in circumstances.

M. Javed Panni, Chief Executive, MJ Panni and Associates representing the Respondent.

Muhammad Farooq, Joint Director (SMD) assisting the Director/HOD (MSCID).

Date of hearing: 22nd February, 2012.

2012 C L D 1394

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Muhammad Asif Arif, Commissioner (Insurance)

NAZIR AHMED PERACHA, CHAIRMAN, SHAHPUR TEXTILE MILLS LIMITED and 5 others---Appellants

Versus

COMMISSIONER (CL), SECURITIES AND EXCHANGE COMMISSIONER OF PAKISTAN---Respondent

Appeal No.26 of 2006, decided on 9th March, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 86(3), 472 & 492---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Further issue of capital---Offer of new shares---False statement---Examination of annual accounts of the company for relevant year had revealed that share capital of the company had increased considerably---Show-cause notice was issued to the company but Commissioner (CL) of the Commission dissatisfied with the response of show-cause notice issued to the company, vide impugned order imposed a penalty of Rs.50,000 on each Director under S.492 of Companies Ordinance, 1984 and directed them under S.472 of Ordinance to provide a financial plan after carrying out due diligence---Facts stated by the Commission regarding loan advanced by the Directors to the company and its repayment stood established from the financial statements---Directors' assertion that loans were advanced for balancing, modernization and replacement of the existing plan of the company, was in fact misstatement which facilitated the conversion of Directors' long term loans into equity and caused dilution of ordinary shareholders' equity---Commission in the impugned order had taken a lenient view and no penalty was imposed on the Directors in violation of Balloters, Transfer Agents and Underwriters Rules 2001---Directors had also failed to comply with the direction of the Commission and showed their inability to provide information regarding the working capital requirements and business strategy to bring the company out of operational losses---Appellate Bench of the Commission declined interference in circumstances.

Muhammad Haroon Mumtaz for Appellants.

Amina Aziz, Director representing the Department.

Date of hearing: 22nd December, 2011.

2012 C L D 1408

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Muhammad Asif Arif, Commissioner (Insurance)

DIAMOND INDUSTRIES LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR (CLD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.21 of 2005, decided on 14th February, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 208 & 473---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Making investments in Associated Companies and undertakings without authority of special resolution---Examination of accounts of company for the relevant period revealed that an amount of Rs.35.231 million was advanced by the company to its associated company---Company stated that said transaction was not an investment in terms of S.208 of the Companies Ordinance, 1984, instead it was normal trade credit---Commission further found that there was transfer of funds by the company without interest to its associated company, and it was not a normal trade credit as there was no common business between the two concerns---Counsel for company had argued that in fact investment was made in terms of special resolution in 1996---Company, at the time of making investment in the associated company being unaware of special resolution already passed in the year 1996, ought to have passed fresh resolution in compliance with S.208 of the Companies Ordinance, 1984---Requirements of S.208 of the Companies Ordinance, 1984 were very specific as it required the company to indicate the nature, period and amount of investment and terms and conditions attached to it---Special resolution passed in the year 1996 was deficient and failed to disclose the mandatory requirements of S.208 of the Companies Ordinance, 1984---Company Secretary had admitted during the hearing before the Commission that the advances were interest-free---Company, in circumstances, did not comply with the deficient special resolution---Appellant's counsel undertook to provide the evidence of compliance with the direction under S.473 of the Companies Ordinance, 1984 within 7 days of hearing, but no such communication had been made to the Appellate Bench of the Commission---In absence of any evidence of compliance with S.473 of the Companies Ordinance, 1984, the Commission was called upon to ensure that the direction in the impugned order was complied with.

Khurram Saeed for Appellant.

Tariq Ahmad, Deputy Director and Tauqeer Sipra, Junir Executive for Respondent Department.

Date of hearing: 22nd December, 2011.

2012 C L D 1423

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Muhammad Asif Arif, Commissioner (Insurance)

GHARIBWAL CEMENT LIMITED---Appellant

Versus

DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondents

Appeal No.36 of 2008, decided on 5th April, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 227, 229 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Constitution of trust for managing the provident fund---Obligation laid on company---Failure to comply with the provisions of Companies Ordinance, 1984---Annual audited accounts of the company for the relevant year, had revealed that amount of Rs.17.5 million was disclosed as payable to Provident Fund Trust by the company with mark up---Company in response to the query, submitted a loan agreement with the Trust---Company did not adhere to the loan agreement as it had not repaid the loan along with mark-up---Director (Enforcement) of the Commission vide impugned order taking a lenient view imposed penalty on the Chief Executive Officer---Where a Trust was constituted for managing the provident fund, the obligation laid on the company under S.227(2) of the Companies Ordinance, 1984, would devolve on the TRUSTEES and would be discharged by them instead of the company---Onus for managing the affairs of the Trust completely devolved on the trustees, who were bound to deal with the funds in accordance with the requirements of S.227(2) of the Companies Ordinance, 1984---Trustees, in the, present case, entered into an agreement with the company and advanced amount in contravention of the requirements of S.227(2) of the Companies Ordinance, 1984, which mandated them to use the funds only in the manner prescribed therein---Cognizance for the fault of the trustees should have been taken into account by the Commission---Trustees were reprimanded for having failed to comply with the provisions of Companies Ordinance, 1984; and were called upon to strictly comply with the requirements of S.227(2) of the Companies Ordinance, 1984.

Ashfaq A. Khan for Appellant.

Aqeel A. Zeeshan, Deputy Director representing the Department.

Date of hearing: 14th March, 2012.

2012 C L D 1430

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SM) and Muhammad Asif Arif, Commissioner (Insurance)

S.M. AHMED and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.38 of 2006, decided on 1st March, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 208, 473 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Receivable balance, a 'trade debt'---Receivable from associated company not a 'normal trade credit'---Annual audited of accounts for relevant period, showed that company had received balances as "trade debts" and 'other receivables' from its associated company, which did not fall in the nature of 'normal trade credit' in terms of S.208 of the Companies Ordinance, 1984---Executive Director (Enforcement) of the Commission taking a lenient view enforced penalty of Rs.100,000 on each Director, after they admitted default and began process of rectifying the default by recovering the said receivables due from the associated company---Documents and financial statements of the company's 'trade debts' showed far exceeded the paid up capital---Said credit facility extended to the associated company could not be termed as a 'normal trade credit' providing 'open ended trade credit' fell under the ambit of S.208 of the Companies Ordinance, 1984---Said credit was extended to the associated company without seeking prior approval of the shareholders through a special resolution---Chief Executive and the Directors were established to have violated the provisions of S.208 of the Companies Ordinance, 1984 and had not exercised due care while extending credit to the associated concern---In the present case, the aim of the company was to provide financial assistance to its associated concerns---Approval through special resolution in general meeting of shareholders was required for such finances to be provided to associated companies---Company was non-operational and financial statements had further disclosed that an amount aggregating to Rs.176,112,583 was still receivable from the associated company which had also shut down its plant and was running into huge losses---No compliance had been made in pursuance of the directions issued by the Commission through the impugned order---No markup had been provided in the current financial year against the liability---Impugned order could not be interfered with, in circumstances.

Javed Panni, Chief Executive, MJ Panni and Associates for Appellant.

Ms. Amina Aziz, Director for Respondent Department.

Date of hearing: 22nd December, 2011.

2012 C L D 1439

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Muhammad Asif Arif, Commissioner (Insurance)

S. M. MUNEER and 9 others---Appellants

Versus

DIRECTOR ENFORCEMENT (CLD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.69 of 2006, decided on 9th March, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 74 & 476--- Allotment of shares--- Transfer of shares---Limitation of time for issuance of certificate---Complaint was lodged with the Commission regarding non-receipt of shares from the company after being held successful in the share balloting---Commission found that company had prima facie contravened the provisions of subsection (1) of S.74 of the Companies Ordinance, 1984 and a fine of Rs.5,000 was imposed on each Director including the Chief Executive of the company---Validity---Company had allotted 500 shares under allotment letter in the name of the complainant and said shares later on were transferred through a verified transfer deed in the name of the transferee---Company had sufficient record to prove that the complainant was once the legal owner of the shares which were received and subsequently were sold for value---Issue was about 20 years old---Since the allotment of shares, the complainant had never attempted to communicate with the company regarding her holding and other ancillary matter such as dividend and right shares---Due diligence was carried out before transferring the said shares in the name of the transferee---Complainant had renounced her shares in favour of the transferee who had the subject allotment letter as well as a transfer deed---Under provisions of S.74(1) of the Companies Ordinance, certificates were required to be issued to the shareholders within 90 days of the date of allotment---Ample evidence was available that the company had allotted the shares under allotment letters in the name of the complainant and the share certificates were in fact issued---Penalty should not have been imposed on the ground that the company had failed to produce documentary evidence pertaining to receipt of the share certificates where the shares had been duly transferred after allotment to the complainant in the name of the transferee through transfer deed---Issue relating to verification of signatures or dispute about fraudulent entry or omission from the register of members of the company could not become the subject of dispute before the Commission, as the jurisdiction to decide such issues rested with the courts in terms of S.152 of the Companies Ordinance, 1984---Impugned order was set aside, in circumstances.

Rashid Sadiq for Appellants.

Abdul Rahman Laghari, Joint Director for Respondent Department.

Date of hearing: 5th January, 2012.

2012 C L D 1835

[Securities and Exchange Commission of Pakistan]

Before Muhammad Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SMD)

S.M. EHTISHAMULLAH and 2 others---Appellants

versus

EXECUTIVE DIRECTOR (ENFORCEMENT)---Respondent

Appeals Nos. 13, 14 and 15 of 2007, decided on 1st March, 2012.

Companies Ordinance (XLVII of 1984)---

----S. 208---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Investment in associated concern without authority of special resolution---Facts and circumstances had shown that investments of the company made in its associated undertakings were not in accordance with the resolutions approved by the shareholders---Executive Director (Enforcement) of the Commission, being dissatisfied with the response of the company, vide impugned order imposed penalty of Rs.100,000 each on the Chairman, Chief Executive and the non-executive and the Executive Director of the company were reprimanded---Validity---Section 208 of the Companies Ordinance, 1984, had stipulated that the company would not make investment in any of its associated companies and associated undertakings, except under the authority of a special resolution, which would indicate the nature, period and amount of investment and terms and conditions attached thereto---Company sought approval for making 'equity investment' in the Extraordinary General Meeting, but approval for "advance" was not sought through a special resolution---Company, in circumstances, had not complied with the requirement of S.208 of the Companies Ordinance, 1984---Contention that the acts of the Company/Directors were not wilful, was not substantiated from the facts of the case---Company was fully cognizant of the fact that the advance to the associated concern was without the shareholders' approval---Default could not be condoned, in circumstances---Violation of S.208 of the Companies Ordinance, 1984 was only in respect of the Extraordinary General Meeting---No reason existed to interfere into the order of the Director Enforcement of the Commission, but, Company should be penalized and held responsible only to the extent of violation committed by them---Taking a lenient view, penalty imposed through the impugned order was waived and Chairman, Chief Executive and Executive Director of the company were reprimanded and warned to be careful in future; and act in accordance with the requirements as envisaged under the law; and comply with the resolution of general meeting in letter and spirit, in circumstances.

2010 CLD 75, 2010 CLD 36; 2006 CLD 1055; 2008 CLD 17; 2009 CLD 1639; 2006 CLD 1150; 2009 CLD 65; 2008 CLD 786; 2006 CLD 458; 2008 CLD 809; 1990 CLC 1008 and 1984 CLC 2456 ref.

1984 CLC 2456 rel.

Dr. Pervez Hassan and Majid Jehangir for Appellants.

Amina Aziz and Ayesha Riaz, Directors for Respondent.

2012 C L D 1855

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (BR&ICW)

Messrs HIGHLINK CAPITAL (PRIVATE) LIMITED: In the matter of

Show Cause Notice No.(BRL-138)/SE/SMD/2006, decided on 30th May, 2012.

Brokers and Agents Registration Rules, 2001---

----R. 8---Failure to pay credit balance---Securities and Exchange Commission of Pakistan received complaints that credit balances available in their (complainants) accounts with the company had not been paid to them despite their repeated requests---Complainants had provided letters of authorization (Authority Letters) to the company whereby they authorized a person to trade into their accounts on their behalf---Company issued cheques in favour of the authorized person to offset its liability towards the complainants without any approval from them---According to Authority Letter, authorized person was only authorized to receive "A/C Payee Cheque" from the company issused only in the names of the complainants---Authorized Representative of the company admitted that the company in order to clear its liabilities towards the complainants issued cheques in the name of the Authorized Person on the assumption that the complainants would not object to payments being made to their blood relation, who was fully authorized to act on their behalf---Company admitted its inadvertent error and in order to settle the claim it stated that it had again issued cheques in the name of the respective complainant, equivalent to the disputed amount---Company submitted that the error was neither deliberate nor wilful---Error was human and the actions of the company were bona fide at all times---Statements and conduct of the company showed that omission was not a wilful or deliberate, but was an error and mistake emanating from misreading of the provision of Authority Letter---Taking a lenient view, show-cause notice issued to the company was withdrawn, in circumstances.

Junaid Jahangir, Authorized Representative of Highlink Capital (Pvt.) Ltd.

Ms. Asima Wajid, Deputy Director (BR&ICW) assisting the Director (BR&ICW).

Date of hearing: 2nd May, 2012.

2012 C L D 1882

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

SAKARWALA CAPITAL SECURITIES (PVT.) LIMITED: In the matter of Show Cause Notice No.MISC/MSW/SMD/1(5)2004/1538 dated 13th April, 2012, decided on 28th June, 2012.

Brokers and Agents Registration Rules, 2001---

----Rr. 8, 12 & Third Sched.---Violation of Code of Conduct---Trading data of Karachi Automated Trading System of Karachi Stock Exchange, showed that two clients of the company were engaged in circular trading in the scrip of other company---Clients traded in the scrip in such a way that buy orders of one client matched with the sell orders of the other client and subsequently the trades were reversed between the clients on the same day---Analysis of the information available on record and the clarification provided by the company, prima facie showed that company had failed to maintain high standard of integrity, and had failed to exercise due care, skill and diligence in conduct of its business, which was a violation of the Code of Conduct which in turn was a violation of R.12 of the Brokers and Agents Registration Rules, 2001---Violation of said Brokers Rules, 2001, was a serious matter and said Rules had entitled the Securities and Exchange Commission to take action against the company---Keeping in the view the number of shares involved in the trades, no gain made by the clients, historical conduct of the company and assurance by the Representative that such violations would not occur in future, no penal action was taken against the company---Taking a lenient view, a stern warning was issued by the Commission to the company with a direction 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.

Ghulam Mujtaba, Nominee Director, Sakarwala Capital Securities (Pvt.) Limited representing Sakarwala Capital Securities (Pvt.) Limited.

Muhammad Atif Hameed, Deputy Director, SECP (through Video Conference Link) assisting the Director/HOD (MSCID).

Date of hearing: 20th June, 2012.

2012 C L D 1895

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director (Insurance)

DAWOOD FAMILY TAKAFUL LIMITED: In the matter of

Show Cause Notice dated 20th January, 2011, decided on 14th May, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 12, 39, 59-A & 156---Companies Ordinance (XLVII of 1984), Ss. 160(1)(b) & 209--- Mismanagement and carrying out transaction without care and diligence by Takaful Company---Board of Directors of the company in the meeting resolved to place before the shareholders of the company in the first Annual General Meeting of the company, the approval of equity investment in shares/certificates/Units of the bank up to Rs.100 million---Findings of on-site inspection of the company, revealed that said investment transaction by the company contained certain discrepancies---Prima facie, the decision of the company of investment in the shares of Bank had been carried out without 'due care and professional skills'---Company, in circumstances, had contravened the provisions of S.12(1)(a) of Insurance Ordinance, 2000---Directors and the Chief Executive of the company, in addition of the day-to-day running of the company and the management of the business, also had some "fiduciary" duties, held in trust and some wider obligations imposed by statute on them and on the company---Board of Directors of the company had acceded to the fact that mismanagement took place in carrying out the transaction in question---Carrying out that transaction without due care and diligence, had not only led to the contravention of S.12(1)(a) of Insurance Ordinance, 2000, but also to the contravention of S.39 of said Ordinance, and/or S.209 of Companies Ordinance, 1984---Said contravention had clearly affected the interests of the shareholders of the company---Keeping in view that the shares of the Bank had been transferred in the name of the company, evidencing that the company's management had taken steps to comply with the provisions of S.39 of the Insurance Ordinance, 2000 with respect to the shares of the Bank, the company's intention to abide by the applicable laws was noticeable---Securities and Exchange Commission, in exercise of powers conferred on it under S.156 of Insurance Ordinance, 2000, instead of imposing a penalty on the company and its Directors, took a lenient view and did not impose any fine---Company and its Directors, however, were warned to exercise due care in future, while complying with the requirements of the law.

Aziz Nishtar (Legal Counsel), Abbas Qurban, Director, Tahir Mehmood, Director and Fahad Alam, Company Secretary for Dawood Family Takaful Limited.

Dates of hearing: 12th April and 14th June, 2011.

2012 CLD 1936

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (BR&ICW)

Messrs EQUITY MASTER SECURITIES (PRIVATE) LIMITED, MEMBER OF THE LAHORE STOCK EXCHANGE (G) LIMITED: In the matter of

Show Cause Notice No.(BRL-148)/SE/SMD/2008 dated May 11, 2012, decided on 21st June, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 16 & 22---Securities and Exchange Rules, 1971, R.4(4)--- Regulatory violations, complaint against---Complainant had alleged that due to regulatory violations committed by the company, he had suffered huge losses---Chief Executive Officer of the company had submitted that company, at the time of opening an account of a client, records the cell/mobile number of its client/account holder in good faith with the mutual understanding to use the same for sending S.M.S. texts including daily trade confirmations and other market related informations---Since the SMS message/texts was not included in the acceptable modes of information as per Special Terms and Conditions of the "Standardized Account Opening Form (SAOF)", and the SMS message/text sent to the complainant did not include all the information as required to be sent under R.4(4) of Securities and Exchange Rules, 1971, violation of said Rules and clauses of Special Terms and Conditions of "SAOF", stood established---Company had made endeavors to put in place a system for dissemination of trade confirmations, which system was not recognized by the existing legal framework any dissemination of trade confirmation through the system established by the company would not be deemed to be discharged of its obligations provided in the law---Company was duty bound to comply with the provisions of Securities and Exchange Ordinance, 1969 and Rules and regulations made thereunder---If a law had provided thing to be done in a particular way, that should only be done in that manner and in no other manner---Company, in the event of the complainant's failure to respond to the margin calls, should have liquidated his position instead of extending the credit/financing and charging liquidation charges to him---Section 16 of Securities and Exchange Ordinance, 1969, had explicitly prohibited extension and maintenance of credit in contravention of the Rules---Contravention of S.16 of Securities and Exchange Ordinance, 1969, stood established against the company, in circumstances---Violation of Ordinance, Rules and Regulations being a serious matter, the Director (Broker Registration and Investor Complaints Wing) of the Commission, directed the company to pay the Securities and Exchange Commission by way of penalty a sum of Rs.300,000 on account of such violations.

Muhammad Rafiq, Chief Executive Officer, Sultan Wali Khan, Company Secretary and Tahir Anwar, Corporate Manager Authorized Representatives of Equity Master Securities (Pvt.) Ltd.

Ms. Asima Wajid, Deputy Director (BR&ICW) assisting the Director (BR&ICW).

Date of hearing: 29th May, 2012.

2012 CLD 1952

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

KAMRAN SHAHID, DIRECTOR OF KOHINOOR ILLS LIMITED: In the matter of

Show Cause Notice No.S.M.(B.O.) C.O.222/4 (998)2012, dated 14-5-2012, decided on 28th June, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 222 & 224(4)---Failure to file returns of beneficial ownership---Director of listed company was required to file return of change in his beneficial ownership on Form 32, within the period stipulated under S.222 of the Companies Ordinance, 1984, but he failed to discharge his obligation---Director of the Company thus had contravened the provisions of S.222 of the Companies Ordinance, 1984, but on receipt of letter from the Commission, he had filed Form 32---Taking a lenient view of the default, a fine of Rs. Fifteen thousands was imposed on the Director under S.224(4) of the Companies Ordinance, 1984 and no further fine for continuous default was imposed.

M. Javed Panni, Chief Executive representing the Respondent.

Muhammad Farooq, Joint Director and Muhammad Sadiq Shah, Deputy Director assisting the Director/HOD (MSCID).

Date of hearing: 26th June, 2012.

2012 CLD 2019

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Mohammed Asif Arif, Commissioner (Insurance)

NASEEM A. SATTAR, CHAIRMAN and 9 others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSIO OF PAKISTAN---Respondent

Appeal No.42 of 2008, decided on 5th June, 2012.

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

----Ss. 196, 208, 473 & 476---Securities and Exchange Commission of Pakistan (XLII of 1997), S.33---Investment in associated company---Securities and Exchange Commission called for the minutes of meeting of the Board of Directors to ascertain, whether or not a resolution was passed to enter into the agreement with the associated company---Company submitted that the transfer of stitching machines from the premises of the company to the premises of associated company being neither an acquisition nor sale of machines in any manner, the approval of the Board was not necessary---Show-cause notice was issued to all the Directors of the company including the Chief Executive Officer of the company---Executive Director (Enforcement) of the Commission, being dissatisfied with the response of the appellant/company, imposed fine for violation of Ss.196 and 208 of the Companies Ordinance, 1984---Under provisions of S.196(2) of the Companies Ordinance, 1984, powers of the company could only be exercised by the Board of Directors through a resolution---In the present case, company and associated company, had common Directors; and in case of S.196(2) of the Companies Ordinance, 1984, in case of common directorship, the Board of Directors of the company ought to have passed a resolution allowing the Directors to enter into the agreement with the associated company---Failure to pass a resolution of Board of Directors before entering into the agreement with the associated company, was violation of S.196(2) of Companies Ordinance, 1984---Penalty was rightly imposed on the Directors of the company---Argument of the counsel for the company that authority to enter into an agreement was exercised by virtue of powers conferred by the Articles of Association of the company, was not tenable as provisions of S.196(2)(g) of Companies Ordinance, 1984, would override the Articles of the Articles of Association in terms of Ss.6 & 31 of the Companies Ordinance, 1984---Company entered into an agreement, whereby no rental was payable by the associated company to appellant company---Agreement, however, was silent with regard to the rental payable to the company---Order to the extent of violation of S.196 of the Companies Ordinance, 1984 on part of the Directors including the nominee Directors, was upheld---Penalty imposed on Directors including nominee Directors under S.208 of the Companies Ordinance, 1984 and the Direction under S.473 of the Companies Ordinance, 1984, was set aside.

(b) Words and phrases---

----'Investment', defined and explained.

The Black's Laws Dictionary rel.

Mansoor-ul-Arafin for Appellants.

Shahzad Afzal, Joint Director (Enforcement) and Haris Bin Tippo, Deputy Director (Enforcement) Departmental Representatives.

Date of hearing: 20th April, 2012.

2012 C L D 6

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry, C.J., Khilji Arif Hussain and Amir Hani Muslim, JJ

ABDUL MAJEED KHAN---Petitioner

Versus

TAWSEEN ABDUL HALEEM and others---Respondents

Civil Petition No.463 of 2011, decided on 19th September, 2011.

(On appeal against the judgment dated 9-2-2011 passed by the Lahore High Court, Lahore in R.F.A. No.312 of 2010)

Per Amir Hani Muslim, J, Iftikhar Muhammad Chaudhry, C.J. and Khilji Arif Hussain, agreeing--

(a) Suit for damages---

----Suit for recovery of damages---Exercise of official authority--- Mala fide acts--- Rule of thumb---Applicability---Plaintiff was civil servant who suffered on account of official orders passed by defendant which were based on mala fide---Trial Court and High Court dismissed the suit filed by plaintiff---Validity---Orders passed by defendant were reversed by competent authority and those were found to be passed unauthorizedly---Plaintiff had brought on record a number of official documents through custodian of the record, which documents were neither objected to nor their contents were challenged by defendants before Trial Court at evidence stage---Plaintiff though had failed to quantify the damages claimed by him as required under the law, as such the same did not mean that plaintiff was not entitled to grant of general damages under the rule of thumb on the face of material brought on record by him during trial---Plaintiff was entitled to grant of general damages for mental agony which he had suffered on account of the conduct of defendant---Plaintiff pleaded specific instances to establish personal vengeance against defendant on account of which he claimed to have suffered losses and mental agony---Pleadings and evidence brought in support of claim of damages by plaintiff were sufficient to award general damages to plaintiff against defendant--- Supreme Court set aside the judgments and decrees passed by Trial Court and High Court and partly decreed the suit in favour of plaintiff---Plaintiff was entitled for damages to the tune of Rs.100,000 with mark up at the rate of 10% till the date of recovery of the amount---Appeal was allowed.

Per Iftikhar Muhammad Chaudhry, C.J. agreeing with Amir Hani Muslim, J--

(b) Damages---

----'General damages' and 'special damages'---Distinction---Term 'general damages' refers to special character, condition or circumstances which accrue from immediate, direct and approximate result of wrong complained of---Similarly term 'special damages' is defined as actual but not necessary result of injury complained of---Special damages follow as a natural and approximate consequence in a particular case by reason of special circumstances or condition---In an action for personal injuries, general damages are governed by the rule of thumb whereas special damages are required to be specifically pleaded and proved---Special damages consist of out-of-pocket expenses and loss of earning incurred down to the date of trial and is generally capable of substantially exact calculation---General damages are those which law implies even if not specially pleaded, which includes compensation for pain and suffering and the like and if injuries suffered are such as to lead to continuing or permanent disability, compensation for loss of earning power in future---Basic principle, so far as loss of earnings and out-of-pocket expenses are concerned, is that injured person should be placed in the same financial position, so far as can be done by an award of money he would have, had the accident not happened.

British Transport Commission v. Gourley [(1956) ac 185]; Qazi Dost Muhammad v. Malik Dost Muhammad 1997 CLC 546; Islamic Republic of Pakistan v. Sh. Nawab Din 2003 CLC 991; Azziullah Sheikh v. Standard Chartered Bank Ltd. 2009 SCMR 276; Mrs.Alia Tareen v. Amanullah Khan PLD 2005 SC 99; C.K. Subramonia Iyar v. T. Kunhikuttan Nair AIR 1970 SC 376; Singlete, J. said in Waldon v. War Office [(1956) 1 WLR 51] and The Mediana (1900 AC 113 and Cooper v. Firth Brown Ltd. [(1963) 2 All ER 31] = [(1963) I WLR 418] rel.

(c) Suit for damages---

----Special or general damages---Determination---Exercise of official authority---Mala fide acts---Plaintiff was civil servant who suffered on account of official orders passed by the defendant which were based on mala fide---Trial Court and High Court dismissed the suit filed by plaintiff---Validity---Plaintiff while appearing as his own witness did not try to explain the causes of damages except stating that due to acts of defendant, he had remained jobless for four years; suffered loss of lacs of Rupees; his father died due to mental torture; and he spent lacs of Rupees on litigation as well as on medical treatment of his wife; it was therefore, necessary to determine in the light of evidence available on record the expenses which plaintiff had actually and reasonably incurred for medical treatment and litigation---Plaintiff could recover as special damages under such head only the amounts so determined---Defendant objected to the manner in which damages were claimed by plaintiff, which were round sum on each head--- Apparently damages were not based on any account; neither any breakup had been given nor any explanation was offered in that behalf---Plaintiff had failed to quantify special damages as such he was not entitled for the same---Plaintiff had suffered mentally due to illegal acts of defendant, which were ultimately set aside by competent forum---Plaintiff was entitled for general damages under the rule of thumb---Supreme Court partly decreed the suit in favour of plaintiff.

Per Arif Khilji Hussain, J. agreeing with Amir Hani Muslim, J--

(d) Damages--

----Classification---'General damages' are such, as the law presumes to be natural and probable consequences of defendant's act---'Special damages' are such as the law does infer from wrongful act but those must, therefore, be specially claimed in pleadings and proved through evidence thereof at the trial--- Besides broad classifications as general and special, damages may also be contemptuous damages; nominal damages; punitive or exemplary; compensatory; and prospective damages.

(e) Damages---

----General damages--- Determining factors--- General damages must be such which would compensate the injured---Loss arising out of injury to reputation of a person cannot be compensated in terms of money and other non-pecuniary losses may not be accurately calculated in terms of coins but for such reasons alone, courts do not decline to grant compensation and formulate certain parameters and devise principles for evaluation or assessment of such general damages---Ordinarily in such cases just, fair and reasonable compensation is assessed and awarded to victim---No yardstick or definite principle for assessing damages in such cases and it becomes difficult to assess a fair compensation---Court in its discretion may on facts of each case and considering how far society would deem it to be a fair sum, determine the amount to be awarded to a person who has suffered such damage---General damages are those, which law implies in very violation of legal rights---Such damages need not be proved by strict evidence as they arise by inference of law, even though no actual pecuniary loss has been or can be shown---Vital canon followed by judicial mind in such cases is that conscience of court should be satisfied that damages awarded would, if not completely, satisfactorily compensate the aggrieved party---Adequate care should be taken in such regard while dilating on quantum of awards and court should be vigilant to see that claim is not fanciful or remote, the award should never rise to be reflective of lavish generosity and must also obviously not dwindle down to be an indicator of abstemious parsimony, but court should give the aggrieved party what it considers in all circumstances a fair and reasonable compensation for his loss.

C.B. Singh v. Agra Cantonment AIR 1974 All. 147; West Pakistan Industrial Development Corporation Karachi (WPIDC) v. Aziz Qureshi 1973 SCMR 555 and Muhammad Hanif v. Muhammad Bashir 2004 YLR 173 rel.

(f) Tort--

----Law of torts---Applicability---Principles---Law of torts or civil wrongs in Pakistan is almost wholly the English Law, which is administered as rules of justice, equity and good conscience---Before applying any rule of English Law, court has to see whether it suits to the society and circumstances.

(g) Tort--

----Malicious prosecution---Remedy---Where a claimant has been subjected to a criminal prosecution, as a consequence of which he loses or risks losing his liberty and/or his reputation, a remedy in the court of tort of malicious prosecution lies---Institution of a civil action should exceptionally result in liability under tort, when claimant loses the suit, the defendant's reputation is restored and he recovers his cost spent on defending the action---For malicious proceedings in bankruptcy and winding up, which may wreck claimant's business, destroy confidence in his competence and integrity and in his company's goodwill, a remedy in tort lies.

(h) Malicious prosecution---

----Claim---Determining factors---To ground a claim for malicious prosecution plaintiff must prove that the law was set in motion against him on a criminal charge; that the prosecution was determined in his favour; that it was without reasonable and proper cause; and that it was malicious.

Gregory v. Portsmouth Council (2001) 1 All ER 560; Cavaley v. Chief Constable (1989) All ER 1025; Muhammad Amin v. Jogendra Kumar AIR 1947 PC 108; Imran Raza Zaidi v. Government of Punjab 1996 PLC C.S. 691; Muhammad Shafi v. Hamidan Bibi 1990 MLD 597; Abdul Rauf v. Abdul Hamid Khan PLD 1965 SC 671; Lucknow Development Authority v. M. K. Gupta AIR 1994 SC 787 and Yaqoob Shah v. XEN, PESCO (WAPDA) PLD 2002 SC 667 rel.

(i) Damages---

----Protection--- Principle--- Act of mala fide--- Effect---Protection provided under S.23-A of Civil Servants Act, 1973, to an officer is only for the acts done 'bonafidely' but not for an act which is not bona fide---Malicious acts are not protected under said provision of law---Any order passed malafidey in colourable exercise of power cannot be termed as an act done in exercise of power conferred by Act or Rules but in fact it is an act of abuse of power to which no protection can be extended.

(j) Damages---

----Misuse of authority--- Imposing mark up/interest on damages---Various orders passed by defendant against plaintiff were result of personal vendetta and without any basis, just to humiliate and torture him---Plaintiff claimed for general damages aggrieved on account of mental torture, damage to service career and legal expenses incurred by him---Supreme Court found the plaintiff entitled to damages with mark up/interest---In absence of any statutory provisions, custom and usage, the defendant could not be burdened with the interest/mark up from the date of filing of the suit.

Messrs A.Z. Companty v. Messrs S. Maula Bakhsh Muhammad Bashir PLD 1965 SC 505; Pakistan v. Waliullah Sufyan PLD 1965 SC 310; Messrs Ralli Brothers Ltd. v. Firm Messrs Bhagwan Das Parmeshri Dass AIR 1945 Lah. 35; Jaggo Bai v. Hari Har Prasad AIR 1947 Privy Council 173 and A. Ismailjee and Sons Ltd. v. Pakistan PLD 1986 SC 499 rel.

Petitioner in person.

Hashmat Ali Habib, Advocate Supreme Court and M.S. Khattak, Advocate-on-Record for Respondents Nos. 1 and 3.

Nemo for Respondent No.2.

Date of hearing: 15th July, 2011.

2012 C L D 259

[Supreme Court of Pakistan]

Present: Mian Shakirullah Jan, Jawwad S. Khawaja and Anwar Zaheer Jamali, JJ

Messrs SANA INDUSTRIES LIMITED---Appellant

Versus

GOVERNMENT OF PAKISTAN and another---Respondents

Civil Appeal No. 1106 of 2005, decided on 21st October, 2011.

(Against the judgment dated 14-12-2004 passed the High Court of Sindh, Karachi in Constitutional Petition No.920 of 1995).

Companies Profits (Workers' Participation) Act (XII of 1968)---

----S.3 & Sched.---Workers' Participation Fund---5% profits of company for financial year 1-10-1991 to 30-9-1992 paid into such fund on 16-1-1993---Interest on such profit from 1-10-­1991 till its payment on 16-1-1993 claimed by such Fund---­Company's plea that no interest was payable on such profit paid during grace period of nine months after end of a financial year---Validity---According to provisions of S. 3(2) of Companies Profits (Workers' Participation) Act, 1968, such profit payable by company stood allocated to and vested in such Fund on first day of the following financial year i.e. 1-10-1992---No legal nexus existed between such grace period and liability of a company to pay interest on delayed payment of such profit---According to scheme given in Schedule of the Act, interest to such Fund would accrue on and from first day of year next succeeding the year in which scheme became applicable to the company---Such scheme became applicable to company on 1-10-1992, thus, company was liable to pay claimed interest.

Dilshad Hussain and another v. Islamic Republic of Pakistan through Secretary, Ministry of Labour Manpower and Overseas Pakistanis, Islamabad and another 2005 SCMR 530 distinguished.

M. Humayoon, Advocate Supreme Court for Appellant.

Respondents Ex parte

Date of hearing: 18th October, 2011.

2012 C L D 337

[Supreme Court of Pakistan]

Present: Muhammad Sair Ali and Mian Saqib Nisar, JJ

APOLLO TEXTILE MILLS LTD. and others---Petitioners

Versus

SONERI BANK LTD.---Respondent

Civil Petition No.1183 of 2011, decided on 12th October, 2011.

(On appeal against the judgment dated 20-6-2011 passed by High Court of Sindh, Karachi in Appeal No.40 of 2010).

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

----Ss. 9 & 10---Petition for leave to defend suit---Procedure of Banking Court---Provisions of Ss.9 & 10, Financial Institutions (Recovery of Finances) Ordinance, 2001 oblige the parties to the suit to identically plead/state the same nature of accounts or the heads of accounts.

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

----Ss. 9(3) & 10(3)(4)---Petition for leave to defend suit---Procedure of Banking Court---Plaintiff institution and the defending 'customer' have identical responsibility respectively under Ss.9(3) and 10(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 to plead and state clearly and particularly the finances availed by defendant, repayments made by him, the dates thereof and the amounts of finances repayable by such defendant who has also been saddled with the additional responsibility to also specify the amounts disputed by him---Defending customer is thus obliged to put in a definite response to the Banks' accounting and has under S.10(3) and (4) to compulsorily plead in answer in the leave petition his accounts as well as the facts and amounts disputed by him as repayable to the plaintiff.

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

----Preamble & S.9---Banking suit---Procedure---Financial Institutions (Recovery of Finances) Ordinance, 2001, has rationale of schematic discipline---Banking suit is normally a suit on Accounts which are duly ledgered and maintained compulsorily in the books of Accounts under the prescribed principles/standards of Accounting in terms of the laws, rules and Banking practices---Instead of leaving it to the option of the parties to make general assertions on accounts, the Ordinance binds both the sides to be absolutely specific on accounts---Parties to a suit have been obligated equally to definitively plead and to specifically state their respective accounts---Scope of the suit thus becomes well defined---Controversies are confined to the claimed and/or the disputed numbers, facts and reasons thereof---Unnecessary controversial details, the evidence thereto and the time of the trial, are curtailed---Trial would remain within the laid out parametrical scope of the claimed and the disputed accounts.

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

----Ss. 10(1)(3)(4)(6)(11) & 9(3)---Petition for leave to defend suit---Procedure of Banking Court---Non-impleadment under Ss.10(3)(4) and 9(3) of the Ordinance of accounts in terms of said provisions, entails legal consequences under S.10(1)(6) and (11) of the Ordinance.

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

----Ss. 4 & 10---Petition for leave to defend suit---Financial Institutions (Recovery of Finances) Ordinance, 2001 is a special law and provides a special procedure for banking suits---Provisions of the Ordinance under S.4 thereof override all other laws and require strict consequences of rejection of leave petition along with decree etc.

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

----Ss. 9 & 10---Provisions of Ss.9 & 10 of the Financial Institution (Recovery of Finances) Ordinance, 2001 are mandatory.

Niaz Muhammad v. Fazal Raqib PLD 1974 SC 134 ref.

(g) Interpretation of statutes---

----Construction of statute as to whether mandatory enactment shall be considered directory only or obligatory, with an implied nullification for disobedience---Principles.

It is true that no universal rule can be laid down for the construction of statutes as to whether mandatory enactments shall be considered directory only or obligatory, with an implied nullification for disobedience. It is the duty of the Courts to try to get at the real intention of the legislature, by carefully attending to the whole scope of the statute to be construed. As a general rule however, a statute is understood to be directory when it contains matter merely of direction but not when those directions are followed up by an express provision that, in default of following them, the facts shall be null and void. To put it differently, if the Act is directory, its disobedience does not entail any invalidity; if the Act is mandatory disobedience entails serious legal consequences amounting to the invalidity of the act done in disobedience to the provision.

Niaz Muhammad v. Fazal Raqib PLD 1974 SC 134 ref.

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

----S. 10(3)(4)(5)(6) & (11)--- Petition for leave to defend suit---Requirements---Application of defendants, in the present case, was not in conformity with mandatory provisions (S.10(3) & (5)) did not fulfil the mandates of S.10(3)(4)(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001 and failed to plead the required accounts without showing any cause or reason for inability to comply with said requirements---Petitioners, attracted the prescribed legal consequences, in circumstances---Principles.

In the present case, the application for leave to defend the suit filed by the petitioners did not fulfil the requirement of section 10(3), (4) and (5) of the Financial Institutions (Recovery of Finances) Ordinance, 2001. It was admittedly not in conformity with the said mandatory provisions. No cause or the reasons for inability to comply with said requirements were shown. Instead it was expressly admitted by the petitioners before the High Court and also before the Supreme Court that the petitioners failed to fulfil the mandates of the said provisions and did not plead the required accounts. The petitioners/defendants thus attracted the prescribed legal consequences of:--

(i) rejection of their leave petition under section 10(6);

(ii) non-entitlement under section 10(1) to defend the suit for not obtaining leave to defend the suit in terms provided for in section 10;

(iii) the allegations of fact in the plaint were deemed under section 10(1) to have been admitted by them; and

(iv) a judgment and decree against them and in favour of the plaintiff bank under sections 10(1) and (11).

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

----Ss. 9(2) & 10---Bankers' Books Evidence Act (XVII of 1891), S.4---Procedure of Banking Court---Provision of S.9(2), Financial Institutions (Recovery of Finances) Ordinance, 2001 is mandatory and without strict compliance wherewith, the plaint is incomplete and cannot become basis of a suit under the Ordinance---Principles.

Subsection (2) of section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 makes it mandatory for a Banking institution to support its plaint in a suit against the customer by a statement of account duly certified under the Bankers' Books Evidence Act, 1891 and also by all other relevant documents relating to grant of finance. Without such a 'Statement of Account' filed along with the plaint, a customer will obviously remain totally unaware of the amount advanced, mark up charged and the basis, break up, premise mode of calculation of account nature of default and the actual amount of Bank's claim against the defendant-customer. He will thus be unable to frame his defence within the limited period prescribed by law, to show reasonable, serious and plausible grounds of contest to be able to seek and obtain leave to defend the suit. Absence of filing the requisite statements of account along with the plaint, will essentially amount to absence of providing adequate, proper and reasonable opportunity of defence to the defending customer. Being thus unable to file a proper leave petition within thirty days under section 10(2) or within twenty one days under section 10(12) of the Ordinance, such a customer may or may not later be able to amend his leave petition. His defence shall thus be rendered illusory, hence denied. Upon the compliance a Banking Company with the provisions of section 9(2) of the Ordinance, depends the right of defence of a defendant in the summary suits as visualized under the Ordinance, wherefor, the filing of duly certified statements of account by a Banking company along with its plaint, cannot be taken to be a mere formality or a technicality. This provision can only be held to be mandatory. Without strict compliance wherewith, the plaint is incomplete and cannot become basis of a suit under this law.

The similarity of the provisions legislated in sections 9 and 10 of the Ordinance leads to identical consequences in the absence of the demanded accounts and the documents. Suit of the plaintiff institution will be rejectable while defendants' leave petition will be exposed to rejection etc. A Plaintiff institution may be rendered unable or deficient in appropriately setting up its answers to the accounts, disputed amounts and facts of the defendant in reply to the leave application as per section 10(8) of the Ordinance. And that in the absence of the requisite account and the facts etc. in defence filed by a defendant in the leave petition, a plaintiff will remain unaware of the admitted or denied or disputed accounts and facts of the defendants, to adequately, seriously and reasonably pursue the suit and its trial. This will obviously defeat the intent and the object of the provided provisions of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

In the absence of the support of statements of accounts and finance documents, Bank's plaint was liable to be rejected. Consequent upon the rejection of the leave petition, the defendants were deemed to have admitted the contents of the plaint. The defendants remained bound thereto. The court of course was not so bound. It was not expected to proceed blindfolded. The court therefore in performance of its duty, itself examined the plaint along with documents to decide as to whether the suit complied with the mandatory provisions of section 9 or not and as to the nature of the order, judgment or decree to be passed by the Court.

Bankers Equity Limited and 5 others v. Messrs Bentonite Pakistan Limited through Chief Executive and 7 others 2010 CLD 651 ref.

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

----S. 10---Petition for leave to defend---Petitioners had not shown the prejudice caused to them purportedly by alleged incomplete statements of accounts, which in fact were complete on considering the effect of rollovers---Separate statement of accounts was filed by the plaintiff Bank in each separate/independent account which commenced without a debit from its respective date of commencement---Petitioners had failed to distinguish the particulars of one account from the other, lending non-credibility of their objection as raised---In the absence of denial of availing of the finance facilities, execution of the charge/security documents and admission of the outstanding liability or the statement of accounts, there existed no substantial question of law or fact requiring evidence.

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

----S. 15---Pledging of goods with Bank as security for the advance, does not absolve the defendant (customer) from his liability to clear his dues---Bank only acquires a lien over such pledged goods for the recovery of his dues and had a right, after notice to the debtor, to sell those goods to reimburse itself---Debtor can claim an adjustment of the sale proceeds of the goods against the amount claimed by the Bank only where such a sale is actually held.

Messrs Muhammad Siddiq Muhammad Umar v The Australasia Bank Ltd. PLD 1966 SC 684 ref

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

----O. XLI, R.1 & S.96---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S.22---Special High Court appeal--- Provision regarding production of certified copy of the decree sheet along with memo of appeal to be mandatory and the appeal unaccompanid with the certified copy of the decree sheet not to be properly constituted and thus incompetent.

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

----S. 22---Civil Procedure Code (V of 1908), S.96 & O.XLI, R.1---Appeal---Comparative analysis of the 'appeal' provisions in Civil Procedure Code, 1908 and Financial Institutions (Recovery of Finances) Ordinance, 2001.

The linguistic construction, phraseology, terms, words and the schematic design/layout of the appeal under S.22, Financial Institutions (Recovery of Finances) Ordinance, 2001 provision is distinguishably different than in section 96 of the C.P.C. Under section 22 an appeal has been provided against "any judgment, decree, sentence, or final order passed by a Banking Court, within 30 days of such judgment, decree, sentence or final order". Was intention of the legislature to provide a scheme of appeal(s) under section 22 to be different from that in section 96, C.P.C.

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

----S. 22---Civil Procedure Code (V of 1908), S.109---Supreme Court Rules, 1980, O.XII, R.4---Constitution of Pakistan, Art. 185--- Appeal to Supreme Court---Limitation---Scope---Where appeal was allowed against the judgment or decree or a final order, filing of appeal within limitation was mandatory from the delivery of judgment and waiting for the grant of certified copy of the decree would not enlarge the limitation and in such a case non-filing of the decree would not be fatal to the appeal.

Imtiaz Ali v. Atta Muhammad and another PLD 2008 SC 462 and Nakuleswar Sikdar v. Barum Chandra Chakravorty and another 1971 SCMR 54 ref.

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

----S. 10--- Constitution of Pakistan, Art. 185(3)---Application for leave to defend suit---Decree in the defendant's suit was passed by a single Judge of the High Court in the exercise of Banking jurisdiction, on the grounds of default of the petitioners under S.10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 as well as on merits---Special High Court Appeal was also dismissed principally on the said grounds---Judgments and decrees had been validly passed and petition for leave to appeal was not sustainable--- Supreme Court, in circumstances, declined to go into the question of maintainability or competence of the appeal which was left to be decided in an appropriate case and because none of the counsel had addressed on such aspect of the case particularly in view of the propositions recorded by the court.

Dr. M. Farogh Naseem, Advocate Supreme Court and Mehr Khan Malik, Advocate-on-Record for Petitioners

Arshad Tayyab Ali, Advocate Supreme Court for Respondent.

Date of hearing: 12th October, 2011.

2012 C L D 520

[Supreme Court of Pakistan]

Present: Tassaduq Hussain Jillani, Mian Saqib Nisar and Ejaz Afzal Khan, JJ

Dr. AKHTAR HASSAN KHAN and others---Petitioners

Versus

FEDERATION OF PAKISTAN and others---Respondents

Constitutional Petitions Nos. 5 and 15 of 2004, C.M.A. No.4251 of 2011 and H.R.C. No. 14144-S of 2009, decided on 29th November, 2011.

(a) Privatization Commission Ordinance (LII of 2000)---

----Preamble & Part V--- Constitution of Pakistan, Art.184(3)--- Constitutional petition--- Privatization of--- Validity and legality of privatization--- Private Foundation successfully bid for the Bank as the highest bidder, which was accepted by the Privatization Commission on 30th of December, 2003 as it found the Foundation's bid to be higher than the reference price---State Bank of Pakistan also provided their clearance for declaring the Foundation as successful bidder and Cabinet Committee on Privatization (Privatization Committee) accepted the recommendation of the Privatization Commission, and the Foundation paid the initial sale price and entered into an agreement on 26th of February 2004 with the Privatization Committee and the State Bank of Pakistan for the purchase of 51% share of the government stake in the Bank and for taking over the management of the Bank---Contention of petitioners was that privatization of Bank had been carried out in haste, in a non-transparent manner and on the desire of the International Monetary Fund (IMF)---Validity---Federal Government examined the issue of privatization of the Bank in the year 1995 and a summary was initiated, report was requisitioned from the Bank which among other things included taking ways and means to improve the performance of the Bank so as to make it a profit earning enterprise rather than a loss making entity for sale---Privatization Commission in December 1998, invited Expressions of Interest in relation to sale of 26% shares of the Bank and eight parties submitted the Expression of interest, and Commission thereafter, called for Statement of Qualification from potential bidders, but this process had to be abandoned in view of the military takeover in October, 1999---Privatization Commission Ordinance, 2000 was promulgated to provide a legal regime to the privatization process and the Commission appointed a firm of Chartered Accountants as the Financial Advisor for such exercise---Being dissatisfied with the number of statement of qualifications submitted in the year 2002, Commission once again called for Expression of interest in April 2003 and this time 19 parties submitted the expression of interest followed by submission of statement of qualifications---Said statements of the bidders were examined by a Pre-qualification Committee and such bidders were also granted access to all the relevant information regarding the Bank and its assets so that the bidders could carry out due diligence at their end---Commission in November 2003, decided that while bidders would be required to bid for 51% of the issued and paid up capital of the Bank, they would also have the option of either purchasing the entire 51% stake at once or first to acquire a 26% or more stake with management control and then pay for the remaining stake within a period of not exceeding two years---Pre-qualification Committee formed by the Commission in its meeting, held in December, 2003, permitted three potential bidders to participate in the bidding process, including, the Foundation---Reference price recommended by the Financial Advisor was Rs.20.609 billion for the value of government stake of 51% in the Bank which was being invested, however, said reference price was revised by the Commission itself and fixed at Rs.22.143 billion, which was also later approved by the Cabinet Committee on Privatization (Privatization Committee)--- Bidding for the sale of 51% shares was held on 29-12-2003 but only two parties, including the Foundation submitted the bidding documents and the earnest money---Highest bid was received from the Foundation and was accepted by the Privatization Commission in its meeting on 30th of December, 2003 as it found it to be higher than the reference price of Rs. 22.143 billion---State Bank of Pakistan also provided their clearance for declaring the Foundation as successful bidder vide letter dated 31st December, 2003 and Privatization Committee accepted the recommendation of the Privatization Commission on 1st of January 2004, and the Foundation paid the initial sale price and entered into an agreement on 26th of February, 2004 with the Privatization Committee and the State Bank of Pakistan for the purchase of 51% share of the government stake in the Bank and for taking over the management of the Bank---Privatization of Bank was part of the overall policy of privatization whereby several financial institutions were disinvested to improve their financial viability---Process of privatization of the Bank, in circumstances, showed that the impugned privatization was neither done in utter haste nor it was institution specific---Decline in financial worth of the Bank could be gathered from a comparison of its 50% share of the local commercial banking market prior to its nationalization with the volume of its non-performing loans after nationalization which grew from Rs. 25.00 billion to Rs. 198.00 billion in the period between 1989 to 1998---Privatization Commission and Committee were conscious of the history of the Bank's privatization, the critical state of its finances and how the earlier attempts made since 1995 could not be successful, which must have made them wiser to take every step with care and without unnecessary delay to search for a credible buyer---Nationalized banks were privatized because they were no longer profit bearing enterprises and their poor performance and dismal balance sheets was attributable to a host of factors, including overstaffing, over-branching, political interference for grant and recovery of loans leading to huge portfolios of non-performing loans, under capitalization, poor customer services and lack of professional management---Adverse effects of growing losses on national economy were some of the compelling reasons requiring privatization of the Bank---Contention of petitioners that impugned privatization was undertaken merely at the behest of the International Monetary Fund (IMF) or done in undue haste, lacked any concrete proof and entailing factual inquiry could not be a valid basis for interference in constitutional jurisdiction of the Supreme Court---Mere advice or suggestion from an international financial institution, which assists and aids developing countries towards economic progress, may not amount to a pressure of the kind to have deprived the competent authority under the law to have taken independent decision---Better performance and rising profits of the Bank justified the impugned process of sale and made it a credible exercise---Approval of the Bank's privatization by the Privatization Committee was within the purview of Privatization Commission and the whole process did not reflect violation of any statutory provision---Constitutional petition was dismissed, in circumstances.

(b) Privatization Commission Ordinance (LII of 2000)---

----Preamble & Part V---Privatization Commission (Modes and Procedures) Rules, 2001. Rr. 3, 4, 5 & 6---Privatization Commission (Hiring of Valuers) Regulations, 2001 Regln. 3---Privatization Commission (Valuation of Property) Rules, 2001 Rr. 4, 5 & 6(2)---Constitution of Pakistan, Art. 184(3)---Constitutional petition---Judicial review of administrative action---Scope---Manner and procedure for privatization, approval or rejection of highest ranked bidder, additional modes of privatization, negotiated sale, manner and procedure for hiring of valuers, valuation of property by the valuer and adviser and processing of valuation report---Privatization of a Bank----Allegations of mala fides in the privatization procedure---Private Foundation as the highest bidder---Validity---Foundation successfully bid for the Bank as the highest bidder, which was accepted by the Privatization Commission on 30th of December, 2003 as it found the Foundation's bid to be higher than the reference price---State Bank of Pakistan also provided their clearance for declaring the Foundation as successful bidder and Cabinet Committee on Privatization (Privatization Committee) accepted the recommendation of the Privatization Commission, and the Foundation paid the initial sale price and entered into an agreement on 26th of February 2004 with the Privatization Committee and the State Bank of Pakistan for the purchase of 51% share of the government stake in the Bank and for taking over the management of the Bank---Contention of petitioners was that procedure adopted for privatization of the Bank was tainted with mala fides; procedure was carried out in violation of the Privatization Commission Ordinance, 2000 and that approval of the Foundation as the highest bidder by the Privatization Committee warranted interference under judicial review---Validity---No allegation was made regarding some personal gain made by any Member of the Privatization Committee or Commission or the Financial Advisor, or that any one of them wanted to help the highest bidder for mala fide reasons---General allegations of being influenced by International Monetary Fund (IMF) or crony capitalism were insufficient to establish that the impugned privatization was tainted with mala fides warranting interference in judicial review---Substantial compliance was made with the relevant provisions of the Privatization Commission Ordinance, 2000 and the Rules/Regulations framed thereunder and minor deviation of Rules or Regulations, if any, in absence of any credible allegation of mala fides or corruption would not furnish a valid ground for interference in judicial review---Important steps taken by the Privatization Commission in compliance of Privatization Commission Ordinance, 2000 and the Rules/Regulations framed thereunder, included, appointment of Chartered Accountants as Financial Advisor because of the slow international response for the search of potential buyers; calling for Expressions of Interest through advertisement; requisition of Statements of Qualification from bidders; constitution of a Pre-qualification Committee; the screening of three parties by the said Committee and recommendations of three parties by the Pre-qualification Committee for undertaking due diligence---Said three parties, recommended by the Pre-qualification Committee were invited to review the documentation relating to the Bank, however only the Foundation submitted a Confidentiality Agreement in December, 2002 and at that point Privatization Commission, if it intended to help the Foundation, could have declared it the highest bidder, but instead in April 2003, the Commission again called for Expressions of Interest through advertisements---Pre-qualification Committee, thereafter, recommended the Foundation and two other potential buyers, which was approved by the Privatization Commission, after which, Data Room of the Bank remained open for the potential buyers to carry out their due diligence---Privatization Commission simultaneously also finalized the process of privatization by taking various steps in compliance of Rules 3, 4 and 5 of Privatization Commission (Modes and Procedures) Rules, 2001---Bid of the Foundation, being the highest bid, was also higher than the reference price approved by the Privatization Committee---All such steps indicated that there was substantial compliance with the relevant provisions of the Privatization Commission Ordinance, 2000 and the Rules/Regulations framed thereunder---Process of privatization was neither tainted with lack of transparency or mala fides nor the Foundation lacked qualifications prescribed in law---Constitutional petition was dismissed accordingly.

(c) Privatization Commission Ordinance (LII of 2000)---

----Preamble---Privatization Commission (Modes and Procedures) Rules, 2001, Rr. 3, 4, 5 & 6---Privatization Commission (Hiring of Valuers) Regulations, 2001 Regln. 3---Privatization Commission (Valuation of Property) Rules, 2001, Rr. 4, 5 & 6(2)---Constitution of Pakistan, Art. 184(3)---Constitutional petition---Judicial review---Scope---Minor deviation from Rules/Regulations framed under Privatization Commission Ordinance, 2000, if any, in absence of any credible allegation of mala fides or corruption would not furnish a valid ground for interference in judicial review---Constitutional petition was dismissed, accordingly.

(d) Privatization Commission Ordinance (LII of 2000)---

----Preamble--- Privatization Commission (Modes and Procedures) Rules, 2001, Rr. 3, 4, 5 & 6---Constitution of Pakistan, Art. 184(3)---Constitutional petition---Manner and procedure for privatization, approval or rejection of highest ranked bidder, additional modes of privatization, negotiated sale--- Privatization of Bank---Private Foundation as highest bidder--- Validity--- Steps taken by Privatization Commission in compliance of Rules 3, 4, 5 & 6 of Privatization Commission (Modes and Procedures) Rules, 2001, recorded--- Constitutional petition was dismissed in circumstances.

(e) Privatization Commission Ordinance (LII of 2000)---

---Preamble--- Privatization Commission (Valuation of Property) Rules, 2001, Rr. 4 & 5---Constitution of Pakistan, Art. 184(3)---Constitutional petition---Manner and procedure for valuation of property by the valuer and adviser hired by the Commission---Transfer of non-performing loans of value of Rs.1.283 billion to CIRC (Corporate Industrial Restructuring Corporation) and issuance of recovery bonds worth Rs.9.804 billion in respect of tax refunds in the Bank prior to privatization---Validity---Transfer of non-performing loans to CIRC (Corporate Industrial Restructuring Corporation) was carried out in an entirely transparent manner and all the bidders were informed in advance---Loans were transferred from the Bank to CIRC in the years 2001 and 2003, and some loans were then transferred back and various other amounts were also adjusted by mutual consent after which an amount of Rs.994.076 million was paid to the Bank by CIRC---Transfer of bad loans to CIRC was a well thought out and fully planned strategy which had the effect of enhancing the value of the Bank and contact was established between the Bank and officials of the Finance Ministry on a regular basis in order to execute the transfer efficiently---Transfer to CIRC was completed after CIRC's due diligence and resolution of Bank's non-performing loans with State Bank of Pakistan's Resolution Committee--- Government had issued bonds against the Bank's admitted tax liability, when taxation authorities had collected taxes from the Bank in excess of its actual liability---Both the transfer of non-performing loans to CIRC and issuance of bonds were duly considered by the valuer in assessing the value of the Bank---Constitutional petition was dismissed, in circumstances.

(f) Privatization Commission Ordinance (LII of 2000)---

----Preamble---Privatization Commission (Valuation of Property) Rules, 2001, Rr. 4, 5 & 6 (2)---Constitution of Pakistan, Art. 184(3)---Constitutional petition---Judicial review---Manner of processing for valuation report and procedure for valuation of property by the Valuer and Adviser hired by the Commission--- Privatization of Bank---Valuation and determination of fair price of the Bank---Discounted Dividend Method for valuation of Bank--- Allegations of non-compliance with valuation Rules and collusion in appointment of Valuer---Validity---Reserve price of the Bank was fixed on the basis of a methodology known as "Discounted Dividend Method" which was different from the "Discounted Cash Flow" methodology and in case of determination of reserve price of banks 'Discounted Dividend Method' was used---Petitioners did not controvert the explanation given by the Privatization Commission for the valuation and determination of fair price of the Bank and it was also not disputed that the valuation was carried out in terms of the Financial Advisory Services Agreements; that the mode of valuation adopted by the valuer was permissible under the Privatization Commission (Valuation of Property) Rules, 2001 and that the valuation report was processed by the Board of the Privatization Commission in accord with Privatization Commission (Valuation of Property) Rules, 2001---Approval of the highest bid of the Foundation by the Privatization Committee being higher than the reference price was neither improper nor violative of the law governing the process of privatization to call for judicial review---No material was available on record to establish that either the valuer was appointed collusively or the valuation carried out by it was against the Rules or best practices being followed--- Constitutional petition was dismissed accordingly.

(g) Privatization Commission Ordinance (LII of 2000)---

----Preamble---Constitution of Pakistan, Art. 184(3)---Constitutional petition--- Privatization of Bank----Recapitalization/Bail out of the Bank prior to its privatization---Private Foundation successfully bid for the Bank as the highest bidder, which was accepted by the Privatization Commission on 30th of December, 2003 as it found the Foundation's bid to be higher than the reference price---Government had contributed a sum of Rs.17.7 billion to recapitalize/bail out the Bank, prior to its privatization, citing the reason that by not doing so would have brought the Bank close to bankruptcy---Validity---Injecting money into banks had been a worldwide phenomenon during the period of financial crunch---When said amount was injected into the Bank in question, the volume of its non-performing loans was huge and the Federal Government and its Financial Experts deemed it proper to finance the Bank---Petitioners had not referred to any opinion of some reputed economist holding the impugned bail out to be inappropriate or unwise or against best practices being followed---Keeping in view the opinions of academics and heads of states who were at the helm of affairs during the economic and banking crisis, decision of Government to recapitalize/bail out the Bank and privatize it subsequently, was motivated by bona fide considerations---Government's injection of money into banks was amongst the known methods to prop up the banks and such bail outs were not intended to merely help the banks, rather these were also designed to keep the economy afloat, so that the banks continued to advance loans for further investments which in turn meant more jobs and greater productivity---Measures taken by Government to recapitalize the Bank or to reduce the volume of its non-performing loans to make it more attractive for sale was neither against the law or the best practices being followed, nor did it reflect mala fides to furnish a ground for interference---Constitutional petition was dismissed, in circumstances.

(h) Privatization Commission Ordinance (LII of 2000)---

----Preamble---Constitution of Pakistan, Art. 184(3)---Constitutional petition---Privatization of Bank through bidding----Recapitalization/bail out the Bank prior to its privatization---Extracts from books/papers of heads of state and academics, explaining and justifying bail out of banks in different parts of the world during economic crisis provided.

Autobiography 'Decision Points' by George W. Bush; On the Brink by Henry M. Paulson Jr.; Beyond the Crises by Gordon Brown and White Paper on All the Options for Managing a Systemic Bank Crises co-authored by three academicians cited.

(i) Privatization Commission Ordinance (LII of 2000)---

----Preamble--- Constitution of Pakistan, Art. 184(3), Part II, Chap. 1--- Constitutional petition---Maintainability---Privatization of Bank through bidding---Locus standi of the petitioners---Petitions were in the nature of public interest litigation and the court in exercise of its constitutional jurisdiction qua matters of public importance relating to enforcement of Fundamental Rights had been liberal particularly if the issue raised was relatable to a public injury arising from breach of public duty---Petitions were maintainable.

(j) Constitution of Pakistan---

----Art. 184(3)---Judicial review of Executive's authority---Scope and limitations---Once the competent authority in the government has taken a decision backed by law, it would not be in consonance with the well established norms of judicial review to interfere in policy making domain of the executive authority.

Asia Foundation and Construction Ltd. v. Trafalgar House Construction (I) Ltd. ((1997) 1 Supreme Court Cases 738) ref.

(k) Constitution of Pakistan---

----Art. 184(3)---Constitutional petition---Judicial review of award of contract by government--- Scope and limitations---Duty of the court is to confine itself to the question of legality and its concern should be, whether a decision-making authority, exceeded its powers; committed an error of law; committed a breach of the rules of natural justice; reached a decision which no reasonable tribunal would have reached , or abused its powers---Question whether a particular policy of a particular decision taken in the fulfilment of that policy is fair, is not for the court to determine and it is only concerned with the manner in which those decisions have been taken--- Court must exercise its discretionary powers of judicial review with circumspection and only in furtherance of public interest and not merely for making out of a legal point and it should always keep the larger public interest in mind to decide whether to interfere or not--- Only when the public interest overwhelms any other consideration, the court should interfere.

Tata Cellular v. Union of India (36(1994) 6 SCC 651) and Air India Ltd. v. Cochin International Airport Ltd. ((2000) 2 Supreme Court Cases 617) ref

(l) Constitution of Pakistan---

----Art. 184(3)--- Constitutional petition--- Judicial review of administrative action--- Grounds--- Grounds upon which an administrative action is subject to control by judicial review, includes, illegality, which means the decision-maker must understand the law correctly that regulates his decision - making power and must give effect to it; irrationality, namely, Wednesbury unreasonableness, and procedural impropriety.

Tata Cellular v. Union of India (36(1994) 6 SCC 651) ref.

(m) Constitution of Pakistan---

----Art. 184(3)--- Constitutional petition--- Judicial review of administrative action--- Scope--- Not every wandering from the precise paths of best practice, lend fuel to a claim for judicial review.

R.V. Deptt. of Constitutional Affairs [2006 All ER (D) 201] quoted.

(n) Constitution of Pakistan---

----Art. 184(3)--- Constitutional petition--- Judicial review of administrative action--- Scope--- Judicial review would be available only if public law element is apparent which would arise only in a case of bribery, corruption, implementation of unlawful policy and the like.

Airport Developers (P) Ltd. v. Airports Authority of Indian and others [(2006) 10 SCC] quoted.

(o) Constitution of Pakistan---

----Art. 184(3)--- Constitutional petition--- Judicial review of administrative action on account of mala fides---Scope---In absence of some un-rebuttable material on record qua mala fides, the court would not annul the order of executive authority which otherwise does not reflect any illegality or jurisdictional defect.

(p) Constitution of Pakistan---

----Art. 184(3)--- Constitutional petition--- Judicial review of administrative action on basis of mala fides---Proof of mala fides---Scope---Onus is entirely upon the person alleging mala fides to establish it, because, there is, to start with, a presumption of regularity with regard to all official acts, and until that presumption is rebutted, the action cannot be challenged merely upon a vague allegation of mala fides---Mala fides must be pleaded with particularity, and once one kind of mala fides is alleged, no one should be allowed to adduce proof of any other kind of mala fides nor should any enquiry be launched upon merely on the basis of vague and indefinite allegations, nor should the person alleging mala fides be allowed a roving enquiry into the files of the government for the purposes of fishing out some kind of a case.

Federation of Pakistan v. Saeed Ahmed Khan PLD 1974 SC 151 quoted.

(q) Mala fides---

----Definition and Scope---Mala fides literally means in bad faith and action taken in bad faith is usually action taken maliciously, in which the person taking the action does so out of personal motives either to hurt the person against whom the action is taken or to benefit oneself.

Federation of Pakistan v. Saeed Ahmed Khan PLD 1974 SC 151 quoted.

(r) Constitution of Pakistan---

----Art. 184(3)---Constitutional petition---Judicial review of cases concerning financial management or awarding of contracts by the government---Scope and limitations---Courts while dealing with such cases must appreciate that these are either policy issues or commercial transactions requiring knowledge in the specialized fields and courts lack the expertise to express any opinion on the soundness or otherwise of such acts/transactions---Court should ordinarily refrain from interfering in policy making domain of executive authority or in the award of contracts unless those acts smack of arbitrariness, favoritism and a total disregard of the mandate of law---Court, under judicial review, cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State and have inherent limitations on the scope of any such enquiry, but at the same time the court can certainly examine whether decision making process was reasonable rational, not arbitrary and violative of the Constitution.

Watan Party v. Federation of Pakistan PLD 2006 SC 697 fol.

Sterling Computers Ltd. v. M & N Publications Ltd. ((1993) 1 Supreme Court Cases 445) quoted.

(s) Constitution of Pakistan---

----Art. 184(3)---Constitutional petition---Judicial review of economic decisions by government--- Scope and limitations---Court refrains from interfering with economic decisions as it has been recognized that economic expediencies lack adjudicative disposition and unless the economic decision, based on economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason, that the court would decline to interfere---Government while taking a decision related to economic issues, has a right to trial and error as long as both trial and error are bona fide and within limits of authority.

Messrs Elahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582 and BALCO Employees Union (Regd.) v. Union of India AIR 2002 SC 350 ref.

(t) Constitution of Pakistan---

----Art. 184(3)---Constitutional petition---Administrative decisions of government bodies--- Judicial restraint and judicial review---Principles---Scope---Court does not sit as a court of appeal but merely reviews the manner in which decision was taken by the government because the court does not have the expertise in the domain of administrative decision making.

Tata Cellular v. Union of India ((1994) 6 Supreme Court Cases 651) ref.

(u) Constitution of Pakistan---

----Arts. 184(3) & 199---Constitutional petition---Scope---Where a legal wrong or a legal injury is caused to a person or to a determinate class of person by reason of violation of any constitutional or legal right or any burden is imposed in contravention of any constitutional or legal provision or without authority of law or any such legal wrong or legal injury or illegal burden is threatened and such person or determinate class of persons is by reason of poverty, helplessness or disability or socially or economically disadvantaged position, unable to approach the court for relief, any member of the public can maintain an application for an appropriate direction, order or writ in the High Court and in case of breach of any fundamental right of such person or determinate class of persons, in the Supreme Court seeking judicial redress for the legal wrong or injury caused to such person or determinate class of persons.

S.P. Gupta and others v. President of India and others AIR 1982 SC 149 ref.

(v) Constitution of Pakistan---

----Part II, Chap. 1 & Art. 184(3)--- Constitutional petition---Scope---Fundamental Rights---Locus standi of petitioner---Scope---Group or class actions---Where there is violation of Fundamental Rights of a class or a group of persons who are unable to seek redress from the court, then the traditional rule of locus standi can be dispensed with, and the procedure available in public interest litigation can he made use of, if it is brought to the notice of the court by a person acting bona fide---Article 184(3) of the Constitution provides abundant scope for the enforcement of the Fundamental Rights of an individual or a group or class of persons in the event of their infraction and it would be for the Supreme Court to lay down the contours generally in order to regulate the proceedings of group or class actions from case to case.

Miss Benazir Bhutto v. Federation of Pakistan PLD 1988 SC 416 ref.

(w) Constitution of Pakistan---

----Arts. 184(3) & 199---Constitutional petition---Judicial review---Scope---Availability of alternate remedy---Even the existence of an alternate remedy cannot prevent the court from exercising its power of judicial review if the said alternate remedy is neither efficacious nor expeditious---If an adequate remedy provided by law is less convenient, beneficial and effective in case of a legal right to performance of a legal duty, the jurisdiction of the High Court can be invoked and if a statutory functionary acts mala fide or in a partial, unjust and oppressive manner the court in exercise of its writ jurisdiction has power to grant relief to the aggrieved party.

Al-Jehad Trust v. Federation of Pakistan PLD 1996 SC 324 and Wukala Mahaz Barai Tahafaz Dastoor v. Federation of Pakistan PLD 1998 SC 1263 ref.

Watan Party through President v. Federation of Pakistan PLD 2006 SC 697 quoted.

(x) Constitution of Pakistan---

----Arts. 184(3) & 199---Public interest litigation---Scope---Frivolous petitions which are neither of public importance nor relatable to enforcement of a fundamental right or public duty---Public interest litigation is a weapon which has to be used with great care and circumspection and the judiciary has to be extremely careful to see that behind the veil of public interest a private malice, vested interest and/or publicity seeking is not lurking---Public interest litigation should be aimed at redressal of genuine public wrong or public injury and not publicity oriented cases or those founded on personal vendetta---Court must be careful to see that a body of persons or member of public, who approaches the court is acting bona fide and not for personal gain or private motive or political motivation or other oblique consideration---Such petitions deserve to be rejected at the threshold, and, in appropriate cases with exemplary costs.

Ashok Kumar Pandey v. State of West Bengal AIR 2004 SC 280 ref.

M. Ikram Ch. Senior Advocate Supreme Court along with Petitioner in person (in Constitutional Petition No.5 of 2004).

Barrister Zafarullah Khan, Senior Advocate Supreme Court for Petitioner (in Constitutional Petition No.15 of 2004).

Ch. Aitzaz Ahsan, Senior Advocate Supreme Court assisted by Faisal Qausain Naqvi for Respondent No.2 (in Constitutional Petition No.5 of 2004).

Barrister Gohar Ali Khan, and Arshad Ali Chaudhry, Advocate-on-Record for Respondent No.3 (in Constitutional Petition No.15 of 2004)

Makhdoom Ali Khan, Senior Advocate Supreme Court and M.S. Khattak, Advocate-on-Record assisted by Saad Hashmi for Respondent No.3 (in Constitutional Petition No.5 of 2004) and for Respondent No.5 (in Constitional Petition No.15 of 2004).

S.M. Zafar, Senior Advocate Supreme Court, Syed Ali Zafar, Advocate Supreme Court and Raja Abdul Ghafoor, Advocate-on-Record assisted by Talib Hussain for Respondent No.4 (in Constitutional Petition No.5 of 2004) and for Respondent No.6 (in Constitutional Petition No.15 of 2004).

Syed Iftikhar Hussain Gillani, Senior Advocate Supreme Court for Respondents Nos. 7 to 23 (in Constitutional Petition No.5 of 2004).

Maulvi Anwar ul Haq, Attorney-General for Pakistan for Respondent No.1 (in Constitutional Petitions Nos.5 and 15 of 2005)

Dates of hearing: 27th October, 21st, 22nd, 23rd, 24th, 28th and 29th November, 2011.

2012 C L D 598

[Supreme Court of Pakistan]

Present: Nasir-ul-Mulk, Sarmad Jalal Osmany and Amir Hani Muslim, JJ

GHULAM MURTAZA---Petitioner

Versus

PROVINCE OF PUNJAB and others---Respondents

Civil Petition No. 1526 of 2011, decided on 17th November, 2011.

(On appeal against the judgment dated 18-8-2011 passed by Lahore High Court, Rawalpindi Bench in W.P. No.1182 of 2011).

Punjab Mining Concession Rules, 2002---

----R. 185---Demarcation of areas after award of mining leases and reducing mining area of petitioner while increasing that of respondent---Impugned demarcation notification set aside by Appellate Authority, but restored by High Court---Validity---Petitioner's bid of Rs.81 million and that of respondent Rs. 10 million were submitted on the basis of previous demarcation which establish that mining area of petitioner was larger than that for which respondent had submitted its bid---Acting upon impugned notification would be manifestly unfair for the same had significantly reduced the area of mining lease of petitioner and increased that of respondent---Supreme Court accepted appeal while directing the Authority to notify demarcation of disputed areas prior to the auction process in future.

Ahmad Awais, Advocate Supreme Court and Masood A. Qureshi, Advocate-on-Record for Petitioner.

Javad Hasan, Additional A.-G., Punjab for Respondents Nos.2 to 6.

A.R. Sheikh, Advocate Supreme Court for Respondent No.7.

Date of hearing: 17th November, 2011.

2012 C L D 640

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry, C.J., Khilji Arif Hussain and Tariq Parvez, JJ

Maulana ABDUL HAQ BALOCH and others---Petitioners

Versus

GOVERNMENT OF BALOCHISTAN and others---Respondents

Civil Petition No. 796 of 2007 and C.M.As Nos. 4560 and 4561 of 2009 and C.M.A. No. 116 of 2011, C.M.As Nos. 403 and 406 of 2012, Criminal Miscellaneous A. No.8 of 2011 in C.P. No.796 of 2007, Constitutional Petition No.68 of 2010, Constitutional Petition No.69 of 2010 and Criminal O.P. No.1 of 2011, Constitutional Petitions Nos.1 and 4 of 2011 and Human Rights Case No. 5377-P of 2010.

International Arbitration---

----Public Interest Litigation---Dispute over legality and validity of joint venture agreements between Provincial Government and transnational corporations/ international companies---Arbitration over such dispute---Application to stay arbitration proceedings at International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID)---Appointment of arbitrator by Provincial Government---Petitioner had moved an application to direct the respondents not to take further steps in the arbitration of the matter and also withdraw request for arbitration at the International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID), till the Supreme Court decided upon the legality and validity of the joint venture agreements---Validity---Provincial and Federal Government were directed by Supreme Court to make a request to the International Council for Commercial Arbitration (ICCA) and International Centre for Settlement of Investment Disputes (ICSID), not to take any further steps in the arbitration proceedings and extend the period for nomination of arbitrator, so that Supreme Court could finally dispose of the petitions filed before it on the same subject and matter.

Raza Kazim, Senior Advocate Supreme Court and Mahmood A. Sheikh, Advocate-on-Record for Petitioners (in C.P. 796 of 2007).

Tariq Asad, Advocate Supreme Court for Petitioner in person (in Constitutional Petition No. 68 of 2010).

Barrister Zafarullah Khan, Advocate Supreme Court for Petitioners (in Constitutional Petition No.69 of 2010).

Sahibzada Ahmed Raza Qasuri, Senior Advocate Supreme Court for Petitioners (in Constitutional Petition No.1 of 2011).

Nemo for Petitioners (in Constitutional Petition No.4 of 2011).

Shafi Muhammad Chandio, D.A.-G., Raja Abdul Ghafoor, Advocate-on-Record and Irshad Ali Khokhar, D.-G. for M/o. Petroleum for Respondents.

Amanullah Kanrani, A.-G. (Blo), Ahmer Bilal Soofi, Advocate Supreme Court, Raja Abdul Ghafoor, Advocate-on-Record and Azhar Ghafar, Dy. Dir. for Government of Balochistan for Respondents.

Nemo for Balochistan Development Authority.

Nemo for Respondent No.6 (in Constitutional Petition No. 68 of 2010).

Raja Muqsit Nawaz Khan, Advocate Supreme Court for Respondent No.7 (in Constitutional Petition No.1 of 2011).

Khalid Anwar, Senior Advocate Supreme Court for Respondent No.4 (in Constitutional Petition No.1 of 2011).

Fakhruddin G. Ebrahim, Senior Advocate Supreme Court and Mehr Khan Malik, Advocate-on-Record for Respondent No.4 (in C.P. No. 796 of 2007).

Barrister Sajid Zahid, Advocate Supreme Court and Arshad Ali Chaudhry, Advocate-on-Record for Respondents Nos. 5 and 7 (in C.P. No. 796 of 2007).

Khalid Anwar, Senior Advocate Supreme Court and Mehr Khan Malik, Advocate-on-Record for Respondent No.6 (in C.P. No. 796 of 2007).

Abdul Hafeez Pirzada, Senior Advocate Supreme Court and Arshad Ali Ch., Advocate-on-Record for Respondent No.8 (in C.P. No.796 of 2007).

Qazi A. Naeem Qureshi, Advocate Supreme Court (Absent) for State Bank of Pakistan (in C.P. No. 796 of 2007).

Malik Shakeel-ur-Rehman, Advocate Supreme Court (Absent) for the Applicant (in C.M.As. Nos. 3680, 3687 of 2010 and 151 of 2011).

M. Ikram Ch., Advocate Supreme Court (Absent) for the Applicant (in C.M.A. 215 of 2011).

Raja Abdul Rehman, Advocate Supreme Court for the Applicant (in C.M.A. No.324 of 2011).

Saleem Khan, Advocate Supreme Court (Absent) and Ms. Afshan Ghazanfar, Advocate Supreme Court (Absent) for the Applicant (in C.M.A. No.414 of 2011).

Date of hearing: 7th February, 2012.

2012 C L D 698

[Supreme Court of Pakistan]

Present: Ejaz Afzal Khan and Ijaz Ahmed Chaudhry, JJ

MAHMOOD KHALID---Petitioner

versus

SENIOR MEMBER BOARD OF REVENUE, PUNJAB, LAHORE and others---Respondents

Civil Petition No.1004 of 2011, decided on 27th January, 2012.

(On appeal from the order dated 30-6-2011 of the Lahore High Court, BahawalpurBench in W.P. No.3531 of 2011/BWP).

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

----S. 21---Criminal Procedure Code (V of 1898), S. 133---Constitution of Pakistan, Art. 185(3)---Public Nuisance---Nuisance created by machines in grind mill installed in inhabited area---Notices were issued by Supreme Court to Director-General Environment to explain as to whether installation of grind mill in inhabited area was permissible---Director-General Environment submitted report outlining, the different forms of nuisances created by the machines installed; the reasons for the nuisance; remedial measures that could be adopted to reverse the impact of the nuisance, and the fact that machines had since been sealed and were not operational on orders of the Assistant Commissioner---Contention of petitioner was that the grind mill was a nuisance in all forms and manifestations and it was required to be removed--- Validity---Respondent had stated that machines installed by him had been sealed under order of the Assistant Commissioner and in case he operated them again, same would abide by all the remedial measures suggested by the Director-General Environment in his report---Petition for leave to appeal was disposed of accordingly.

Syed Saleem-ud-Din Aftab, Advocate Supreme Court for Petitioner.

Muddassir Khalid Abbasi, A.A.-G. Punjab for Respondents Nos.1 to 3 and 5.

Date of hearing: 27th January, 2012.

2012 C L D 1071

[Supreme Court of Pakistan]

Present: Mian Shakirullah Jan and Anwar Zaheer Jamali, JJ

MUNEER HUSSAIN GILLANI---Judgment Debtor

versus

HABIB BANK LIMITED and another---Respondent/Decree Holder

C.M.A. No.871 of 2009 in C.R.P. Nos.73, 74 and 82 of 2007, decided on 27th March, 2012.

(For refund of Rs. 22,00,000).

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

----S. 19--- Constitution of Pakistan, Art. 185(3)--- Execution proceedings---Auction of property---Deposit of decretal amount by judgment debtor in Supreme Court in pursuance of its interim order---Acceptance of judgment-debtor's appeal by Supreme Court setting aside such auction and allowing auction purchaser to withdraw such amount--- Application by auction purchaser for refund of such amount with compensatory interest--- Validity--- Such amount deposited by judgment debtor was lying in current account of Supreme Court bearing no interest/mark-up thereon--- Plea of compound interest or future interest raised by auction purchaser was not tenable as same was beyond stipulation contained in such order of the Supreme Court---Application was disposed of in circumstances.

Gulzarin Kiyani, Senior Advocate Supreme Court and Ch. Akhtar Ali, Advocate-on-Record for Judgment Debtor.

Muhammad Aslam Awan, Advocate Supreme Court and M. M. Malik, Attorney for Applicant/Auction Purchaser.

Ms. Aaliya Nelum, Advocate Supreme Court for Habib Bank Limited.

Pervaiz Ahmed, Ex-Deputy Registrar, SCP on Court Notice.

2012 C L D 1319

[Supreme Court of Pakistan]

Present: Mian Shakirullah Jan, Jawwad S. Khawaja and Amir Hani Muslim, JJ

C.V. "LEMON BAY" and others---Appellants

Versus

SADRUDDIN and others---Respondents

Civil Appeals Nos. 1444 to 1447 of 2004, decided on 9th May, 2012.

(Against the judgment dated 30-3-2004 passed by the High Court of Sindh at Karachi in Admiralty Appeals Nos.8 and 9 of 2009).

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

----Ss. 3(2)(h) & 4(4)---Admiralty Jurisdiction of High Court---Arrest of ships---Action in personam---Scope---Action in rem against a sister vessel/ship---Scope---Contract of carriage---Plaintiff/consignor shipped first consignment through vessels 'A' (defendant) and 'B', while the second consignment was sent through vessels 'C' (defendant) and 'D'---Failure on part of the shipping companies (defendants) to obtain bank guarantees necessary for the release of consignments---Effect---Plaintiff suffered monetary loss and consequently filed two suits against the defendants in the High Court which were decreed in its favour---Appellate Bench of the High Court modified the decree of the High Court by reducing the amount of the decree on the basis that in the first suit vessel 'B' had not been impleaded as a defendant nor was it averred in the plaint that the vessel 'B' was a sister ship of 'A' and similarly in the second suit plaintiff had not impleaded vessel 'D' as a defendant nor had any averment been made in the plaint that said vessel was a sister ship of the vessel 'C'---Contention of the defendants was that the sister ships 'B' and 'D' had been wrongfully and unlawfully arrested in the suits because said ships were not parties and in the absence of pleadings to establish their relationship with other vessels, the sister ships could not be burdened with the liability for the plaintiff's claim---Validity---Claim of the plaintiff was based on the contract of carriage executed on behalf of the shipping companies and the modification agreed by them that the consignments would be released against bank guarantees and not on DAP basis as originally agreed---Admittedly the bank guarantees which the shipping companies were obliged to obtain on behalf of the plaintiff, before releasing the consignment to the consignee were forged---Defendants released the consignments without obtaining the bank guarantees because of which the plaintiff did suffer a monetary loss---Sections 3(2)(h) and 4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980, made it clear that an action in personam could be founded on any agreement such as a bill of lading relating to the carriage of goods in a ship, and that admiralty jurisdiction of the court could also be invoked for an action in rem for the arrest of a sister ship such as 'B' and 'D' in the present proceedings---Even if it was held that the sister ships had not been impleaded as defendants in the two suits and that there was no averment in the plaint asserting a claim against the sister ships, the decree in personam could still have been passed against the defendants even if a decree in rem was not permissible against the sister ships in view of S.4(4) of the Admiralty Jurisdiction of High Courts Ordinance, 1980---Appellate Bench of the High Court fell in error when it reduced the amounts decreed by the Single Judge of High Court---Judgment and decree of the Appellate Bench of the High Court was set aside and that of the Single Judge of High Court was restored---Order accordingly.

R.F. Virjee, Advocate Supreme Court for Appellants (in C.As. Nos.1444 and 1445 of 2004).

Shaiq Usmani, Senior Advocate Supreme Court for Appellants (in C.As. Nos.1446 and 1447 of 2004).

Shaiq Usmani, Senior Advocate Supreme Court for Respondent No.1 (in C.As. Nos. 1444 and 1445 of 2004).

Ex parte for Respondent No.2 (in C.As. Nos. 1444 and 1445 of 2004).

R.F. Virjee, Advocate Supreme Court for Respondent No.1 (in C.As. Nos. 1446 and 1447 of 2004).

Ex parte for Respondents Nos. 2 to 4 (in C.As. Nos. 1446 and 1447 of 2004).

Date of hearing: 9th May, 2012.

2012 C L D 1465

[Supreme Court of Pakistan]

Present: Sarmad Jalal Osmany and Gulzar Ahmed, JJ

SHAN FOOD INDUSTRIES---Appellant

Versus

EASTERN PRODUCTS (PVT.) LTD and others---Respondents

Civil Appeal No.223-K of 2011, decided on 4th July, 2012.

(Against the judgment dated 29-12-2010 passed by High Court of Sindh, Karachi in M.A. No.55 of 2004).

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

----S. 15---Opposition filed with the Registrar against a proposed trade mark---Failure to file power of attorney along with the opposition---Effect---Such failure was merely a procedural irregularity and could be cured by filing said document subsequently during the proceedings.

Gap Inc. A Daware Corporation USA through Authorized Signatory v. Gap Departmental Store, Karachi and another 2006 CLD 1477 ref.

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

----Ss. 15(2) & 2(h)---Revised Trade Marks Rules, 1963, Rr.30 & 76---Filing of opposition to a proposed trade mark---Limitation---Scope---Extension of time for filing opposition allowed by the Registrar---Legality---Appellant had registered a trade mark by the name of "SHAN" in respect of spices, since the year 1985---Respondent applied for the trade mark, "EASTERN SHAN TEA", registration of which was refused by the Registrar on the grounds that same was not only identical with the trade mark of the appellant, but also deceptively similar---Respondent contended that the opposition filed by the appellant to its proposed trade mark was time barred as the date of respondent's advertisement in the Trade Marks Journal was 1-10-1998 whereas opposition to it was filed by the appellant on 8-9-2001, which was not within the two months' period provided under Rule 30 of the Trade Marks Rules, 1963 and that extensions were granted to the appellant for filing opposition in a consolidated manner which could not be done in terms of Rule 76 of Trade Marks Rules, 1963, which rule clearly provided that each extension must be for one month only---Validity---Respondent's advertisement for its proposed trade mark was issued for publication in the Trade Marks Journal on 1-10-1998 but was actually published in the said Journal on 15-3-2001, therefore, the limitation of two months provided in Rule 30 of Trade Marks Rules, 1963, would be counted from the latter date, as no one could oppose any application for registration of a trade mark unless it came within the public domain---Time for filing opposition, in such circumstances, would have expired on 15-5-2001---Applicant filed four applications for extension of time for filing opposition, which were allowed by the Registrar up to one month each---Opposition was finally filed by the appellant on 8-9-2001, whereas the extended time period for filing opposition expired on 15-9-2001---Opposition filed by the appellant, in such circumstances, had in fact been filed within the maximum extension period of six months provided by Rule 76 of Trade Marks Rules, 1963---Appeal was allowed, accordingly.

Rehamt Elahi v. Messrs Hoyo Kabushiki Kaisha PLD 1992 SC 417 ref.

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

----S. 15(3)---Revised Trade Marks Rules, 1963, Rr. 30 & 76---Filing of opposition to a proposed trade mark---Limitation--- Scope--- Order of Registrar allowing extension of time for filing opposition---Appeal against such order of the Registrar---Maintainability---Order of Registrar for extension of time up to an aggregate of six months could not be the subject matter of an appeal, however extension granted beyond the period of six months was not only illegal but attracted S.15(3) of the Trade Marks Act, 1940, whereby the application for registration would stand abandoned if filed beyond such period of time---Order passed by Registrar vis-a-vis extension of time for filing opposition did not decide the rights and liabilities of the parties and hence could not be challenged in appeal as it was merely procedural in nature.

Rehmat Elahi v. Messrs Hoyo Kabushiki Kaisha PLD 1992 SC 417 rel.

(d) Revised Trade Marks Rules, 1963---

----R. 76---Registrar allowing extension of time to the aggrieved party for filing opposition to a proposed trade mark---No notices was issued to the applicant of the proposed trade mark---Justiciability of such an order---Discretion of Registrar---Scope---Where the Registrar did not deem it necessary to issue notice then same would not be justiciable.

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

----Ss. 8(a) & 10(1)---Prohibition on registration of certain trade marks--- Determination as to whether two competing trade marks caused deception or confusion in the minds of the common public---Procedure---In order to come to such a conclusion, the two competing trade marks had to be kept side by side and thereafter a conclusion reached whether a mark so nearly resembled another so as to cause deception or confusion---Such an exercise was not one of discretion by a Tribunal but a finding of fact.

Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8 ref.

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

----Ss. 8(a) & 10(1)---Prohibition on registration of certain trade marks---Determination as to whether a proposed trade mark/logo would cause deception or confusion in the minds of common public as compared to a previously registered/used trade mark---Considerations.

Considerations were the process of manufacturing of the two commodities, their outlets or sale points, the nature of the goods, the trade channels, potential customers/ consumers and visual comparison between the wrappers/ packing of the products.

Said considerations were not absolutely essential in order to reach the correct conclusion regarding deception, etc. and there might be other variables. [p. 1482] G

Seven-up Company v. Kohinoor Thread Ball Factory and 3 others PLD 1990 SC 313; Messrs Alpha Sewing Machine Company v. Registrar of Trade Marks and another PLD 1990 SC 1074; Messrs Western Brand Tea, Karachi v. Messrs Tapal Tea (Pvt.) Limited, Lahore and another PLD 2001 SC 14; Formica Corporation v. Pakistan Formica Ltd. 1989 SCMR 361 and Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8 ref.

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

----Ss. 8(a) & 10(1)---Prohibition on registration of trade mark---Proposed trade mark likely to cause deception and confusion in the minds of the common public---Effect---Proposed trade mark more or less identical to an existing/registered trade mark---Effect---Appellant had registered a trade mark by the name of "SHAN" in respect of spices, since the year 1985---Respondent applied for the trade mark, "EASTERN SHAN TEA", registration of which was refused by the Registrar on the grounds that same was not only identical with the trade mark of the appellant, but also deceptively similar---Contentions of the respondent were that the word "SHAN" was a word of the "Urdu" language and had never been coined by anybody, therefore, no one could be allowed to monopolize the same; that logos of both the parties' products were quite dissimilar, and that there could be no question of deception as products were not co-related because tea was a refreshment and spices were not---Validity---Spices and tea were items of daily use usually available at the same general store and potential customers were the general public---Method of advertisement of both the products was generally the same, i.e. electronic and print media as well as billboards--- Consumers and sale outlets of both the products were the same--- Tea was a refreshment and not essentially a food item, similarly spices were used for seasoning food and were not an essential food item--- Spices/condiments and tea were ingredients used for the purpose of refreshment/seasoning etc., the object of both being to make drinkables and eatables more palatable---Logo/design and words used in the wrappers/containers of both the products were essentially the same---Word "SHAN" in yellow letters with a red background was common to the wrappers of both the products, even though the wrappers varied in size and presentation---Registration of the respondent's proposed trade mark would have been a violation of S.8(a) of the Trade Marks Act 1940, as there was every likelihood of deception and confusion being caused in the minds of the common public as product of the respondent i.e. tea would be connected with the product of the appellant i.e. spices, and would have also been a violation of S.10(a) of the Act as both trade marks were more or less similar---Appeal was allowed, and respondent was directed not to use the word/logo "SHAN" for its product i.e. tea.

Unilever PLC., A British Company of Port Sunlight Wirral Merseyside, England v. R. B. Oil Industries (Pvt.) Ltd. Karachi 1999 MLD 1447; Mars Incorporated v. Pakistan Mineral Water Bottling Plant (Pvt.) Ltd. through Chief Executive/Director/Secretary 2001 MLD 39; Seven-up Company v. Kohinoor thread Ball Factory and 3 others PLD 1990 SC 313; Messrs Alpha Sewing Machine Company v. Registrar of Trade Marks and another PLD 1990 SC 1074 and Kabushiki Kaisha Toshiba (also trading as Toshiba Corporation) v. Ch. Muhammad Altaf (trading as Murad Industries (Regd.) and another PLD 1991 SC 27 ref.

Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8; CECIL De Cordova and others v. Vick Chemical Company PLD 1951 PC 108; National Detergents Limited v. MOD International (Pvt.) Ltd. 1993 MLD 590; Seven Up Company v. Deputy Registrar of Trade Marks 1987 MLD 91; MCDONALD'S Corporation v. Maxfood (Private) Limited and another 2006 CLD 466 and Multani Sohan Halva, Hussain Aghahi Multan v. Registrar of Trade Marks, Karachi and another 1987 CLC 1448 ref.

Messrs Western Brand Tea, Karachi v. Messrs Tapal Tea (Pvt.) Limited, Lahore and another PLD 2001 SC 14; Messrs Mehran Ghee Mills (Pvt.) Limited and others v. Messrs Chiltan Ghee Mills (Pvt.) Limited and others 2001 SCMR 967; Messrs Hero Motors Ltd. through Authorized Signatory v. Babar Auto Trading and Manufacturing Company through Proprietor 2010 CLD 22; Messrs Hero Motors Ltd. and another v. Babar Auto Trading and Manufacturing Company through Partners, Proprietors, Manager and another 2008 CLD 983; Formica Corporation v. Pakistan Formica Ltd. 1989 SCMR 361; Skyline Education Institute (Pvt.) Ltd. v. S.L. Vaswani and another AIR 2010 SC 3221; Lifeguard Milk Products Proprietary Ld.'S Application for a Trade Mark 1957 RPC 79; In the Matter of an Application by Ladislas Jellinek for the registration of a Trade Mark 1963 RPC 59; Soneri Travel and Tours Ltd. through Chief Executive/Director/ Secretary v. Soneri Bank Limited 2011 CLD 193; Lipha Lyonnaise Industries Pharmaceutique through Authorized Signatory v. Registrar of Trade Marks and another 2009 CLD 1989; Thomas Bear and Sons (India) Ltd. v. Prayag Narain and another AIR 1940 Privy Council 86 and Malayan Tobacco Distributors Ltd. v. United Kingdom Tobacco Co. Ltd. AIR 1934 Privy Council 167 distinguished.

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

----Preamble---Revised Trade Marks Rules, 1963---Trade mark laws---Purpose---Trade mark laws were not only made for the protection of the owner of the trade mark but also for protection of the general public.

Sultan Ahmed Sheikh, Advocate Supreme Court and K.A. Wahab, Advocate-on-Record for Appellant.

Abdul Kadir Khan, Advocate Supreme Court for Respondent No.1.

Saleem Ghulam Hussain, Advocate Supreme Court for Respondent No.2.

Dates of hearing: 8th June and 4th July, 2012.

2012 C L D 1608

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry, C.J., Jawwad S. Khawaja and Khilji Arif Hussain, JJ

Syed PHOOL BADSHAH and others---Appellants

Versus

ADBP through Manager, Peshawar Branch and others---Respondents

Civil Appeal No.110 of 2002, decided on 3rd July, 2012.

(Against judgment dated 10-1-2002 of the Peshawar High Court, Peshawar, passed in FAB No.33 of 1999).

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

----S. 9---Civil Procedure Code (V of 1908), O. VII, R. 7---Suit for recovery of loan---Relief to be specifically stated---Scope---Banking Court decreeing a suit for recovery of finance including a finance facility, which was not subject matter of the suit---Validity---No application was filed for amendment of memo of plaint to incorporate the said finance facility and same was not the subject matter before the Banking Court---Banking Court could not decree the suit in respect of an amount which was not subject matter before it in the suit---Appeal was allowed, judgments and decrees of courts below were set aside and matter was remanded to the Banking Court for decision afresh strictly in accordance with the law.

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

----O. VII, R. 7---Relief to be specifically stated---Scope---Facts not disclosed in the pleadings---Effect---Provisions of Order VII, Rule 7, C.P.C. empowered the court to grant an effective or ancillary relief even if not prayed, as the plaint as a whole was to be looked into in order to determine relief for which plaintiff was entitled, however, no relief could be granted upon facts and documents not disclosed in the pleadings.

Abdul Rauf Rohaila, Senior Advocate Supreme Court for Appellants.

Asad Kamal, Advocate Supreme Court for Respondent No.1.

Nemo for Respondent No.2.

Date of hearing: 3rd July, 2012.

2012 C L D 649

[Supreme Court (AJ&K)]

Present: Muhammad Azam Khan, C.J.

and Raja Saeed Akram Khan, J

MUHAMMAD NAZIR KHAN----Appellant

versus

MUHAMMAD AMEER----Respondent

Civil Appeal No.14 of 2007, decided on 17th January, 2012.

(On appeal from the judgment of the High Court, dated 3-11-2006 in Civil Appeal No.5 of 2006).

(a) Malicious prosecution---

----Suit for recovery of amount on the ground of false and malicious prosecution---Plaintiff filed a suit for recovery of amount on the ground that defendant had instituted a false and baseless private complaint, which was dismissed by the Trial Court and Appellate Court below---Plaintiff claimed that due to said false complaint he was entitled to recovery of suit amount because prosecution was malicious---Defendant in his written statement had denied all the allegations stating that he had correctly filed the complaint against the plaintiff---Trial Court had considered the contents of plaint, written statement and evidence produced by the parties; and after detailed examination of evidence, concluded that plaintiff had failed to prove his case---Findings of the Trial Court were upheld by the Appellate Court below and High Court---Validity---Nothing was in the statement of witnesses wherefrom it could be ascertained that the prosecution of the plaintiff was malicious---Only evidence which was produced by the plaintiff was that he was acquitted in said private complaint filed by the defendant/complainant---From mere acquittal, it could not be said that prosecution of the plaintiff was malicious one; it was necessary for the plaintiff to prove in the suit for damages that his prosecution was without reasonable cause and malicious---If a person had got reasonable and probable cause, the prosecution could not be described as malicious because he had got enmity---Whatever was stated by the plaintiff or his witness, the defendant cross-examined the witnesses and no material point was left in cross-examination---Plaintiff also failed to prove that he had suffered damages due to prosecution and that the proceedings had interfered with his liberty and affected his reputation--- Appeal was dismissed by Supreme Court.

Muhammad Akram v. Mst. Farman Bi PLD 1990 SC 28; Haji Muhammad Latif Khan v. Muhammad Hanif 2007 SCR 125; Muhammad Arif v. Muhammad Boota and 4 others 2007 SCR 363; Muhammad Latif Khan and 2 others v. Muhammad Afsar Khan PLD 2000 SC (AJ&K) 31; Naber Shaha v. Shamsuddin and others PLD 1964 Dacca 11 and Muhammad Mantazuddin v. Shamsur Rahman PLD 1964 Dacca 618 rel.

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

----O. VIII, R.5---Specific denial---If the allegation in the plaint was not denied by the defendant in clear terms or by necessary implication; and if there was evasive denial, such denial could not be considered; and allegation in the plaint, would be considered to be correct.

Qurban Hussain v. Mst. Bashir Begum and 6 others PLD 1986 SC (AJ&K) 109 ref.

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

----Art. 133---Cross-examination of a witness---Cross-examination of witness was a right of adverse party; and if a particular portion of the statement of a witness was not cross-examined, that would be deemed to be admitted true---If the statement of any witness would go against the defendant and he failed to cross-examine on that point, then the point would be deemed to be admitted.

Islamuddin and others v. Ghulam Muhammad and others PLD 2004 SC 633 rel.

Asghar Ali Malik, Advocate for Appellant.

Syed Nazir Hussain Shah Kazmi, Advocate for Respondent.

Date of hearing: 10th January, 2012.

2012 C L D 1166

[Supreme Court (AJ&K)]

Present: Muhammad Azam Khan, C.J. and Ch. Muhammad Ibrahim Zia, J

SAFDAR ALI KHAN----Petitioner

versus

AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR through

Chief Secretary and 2 others----Respondents

Civil Review Petition No.23 of 2010, decided on 10th February, 2012.

(In the matter of review from the judgment of this Court, dated 23-4-2010 in Civil Appeal No.11 of 2009).

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

----S. 14---Civil Procedure Code (V of 1908), O. VII, R.2 & O.XLVII, R.1---Limitation Act (IX of 1908), Arts.158 & 178---Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S.42---Azad Jammu and Kashmir Supreme Court Rules, O. XLVI---Review of Supreme Court judgment--- Money suit--- Arbitration proceedings--- Objection to report/award of the Arbitrator---Limitation---Parties having agreed for appointment of an arbitrator, Trial Court appointed arbitrator who filed report in presence of the parties---None of the parties filed objection on the report submitted by the arbitrator with stipulated period of 30 days---Later on after about 2-1/2 months, plaintiffs filed objection to the said report and prayed for setting aside the award---Court rejected the objection which was filed beyond the period of limitation and passed decree in terms of award submitted by the arbitrator---Feeling aggrieved from the judgment and decree of the Trial Court, the plaintiff filed appeal in High Court---High Court modified the judgment and decree of the Trial Court to the extent of finding regarding overpayment to the plaintiff, and rest of the judgment and decree was upheld---Appeal filed before the Supreme Court having been dismissed the plaintiff had filed review petition---Award/report having been submitted by the arbitrator in presence of counsel for the parties, written notice was not the requirement of law---Plaintiff having failed to point out any error apparent on the face of record in the judgment under review, no case for review was made out---Review petition was dismissed by the Supreme Court in circumstances.

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

----O. XLVII, R.1---Azad Jammu and Kashmir Supreme Court Rules, O. XLVI--- Review of Supreme Court judgment---Supreme Court could review its judgment under O.XLVI of Supreme Court Rules on the grounds similar to those mentioned in O.XLVII, C.P.C., which postulated that the review was permissible on the ground of error apparent on the face of record on discovery of some new evidence or fact; but the review was not permissible, if a party would argue that a different interpretation of law was possible.

Ramnath Agarwal v. G.S. Iyer, Collector of Customs, Kandla and another AIR 1961 Gujarat 51, Ratnawa v. Gurushiddappa Gurushantappa Magavi and others AIR 1962 Maysoor 135 and Col. (Rtd.) Muhammad Aslam v. Haji Muhammad Shafi and another PLD 1993 Lah. 11 distinguished.

Rashida Awan v. District Education Officer and 8 others 2007 SCR 406; Azad Government v. Muhammad Suleman and 6 others 2003 SCR 423 and Mst. Nasreen Gulab v. Mst. Tasleem Akhtar and 4 others 2010 SCR 375 ref.

Messrs Shafi Corporation Ltd. Karachi v. Government of Pakistan through Director-General of Defence Purchase PLD 1981 Kar. 730 rel.

Tahir Aziz, Advocate for Petitioner.

Abdul Waheed Durrani, Advocate for Respondents.

Date of hearing: 3rd February, 2012.