CLD 2013 Judgments

2013 C L D 748

[Competition Commission of Pakistan]

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

PAKISTAN OVERSEAS EMPLOYMENT PROMOTERS ASSOCIATION (POEPA)---Applicant

Versus

G.C.C. APPROVED MEDICAL CENTERS ADMINISTRATIVE OFFICE (GAMCA) AND GCC APPROVED MEDICAL CENTERS---Respondents

File No.2(2)/JD(L)/POEPA/CCP/2011), decided on 29th June, 2012.

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

----Ss. 2(1)(q), 4, 30, 37 & 38---Pre-departure medical check-up by intending emigrants---Entering into prohibited agreements by Medical Centres---Complainant, an Association filed complaint against respondents/ approved Medical Centres alleging that respondents had cartelized to allocate the intended emigrants to approved Medical Centres among themselves on equal basis, which allocation fell, prima facie under the arrangement/agreement prohibited under S.4(2)(b) of the Competition Act, 2010; that Medical Centres had divided the territory of Pakistan for provision of services of pre-departure medical tests into five regions in violation of S.4(2)(b); and that anti-competitive behaviour of respondents had affected the intended emigrants who were forced to pay exorbitant charges in violation of S.4(2)(a) of Competition Act, 2010---Competition Commission initiated enquiry in pursuant to S.37(2) of Competition Act, 2010 and Enquiry Officers submitted their report in which it was recommended that proceedings be initiated against respondents under S.30 of Competition Act, 2010---Issue which emerged from the divergent pleadings of the parties was that whether or not the respondents were conducting an economic activity and fell within the purview of "undertaking" in terms of clause (q) of subsection (1) of S.2 of Competition Act, 2010---Held, services provided by respondents were not free and they were not rendering social services as 'no profit organization'; they were charging the fee for services they render, and were making profit for carrying out such activities---Respondents were in fact, engaged in economic activity; and were not concerned with the 'test', and were more keenly interested in implementation of the division of markets and equal allocation of consumers---Argument that services rendered by the respondents, did not involve an economic activity had no merit---Respondents, in circumstances, were in fact, 'undertakings' in terms of clause (q) of subsection (1) of S.2 of Competition Act, 2010.

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

----Ss. 4, 30, 37 & 38---Pre-departure medical check-up by intending emigrants---Complaint against entering into prohibited agreement by approved Medical Centres by cartelizing to allocate the intended emigrants among themselves---Question for determination was whether the Executive Board of Health Ministers' Council and the respondents (Medical Centres) constituted 'single economic entity' as they were acting as an auxiliary arm/agent of the Executive Board, therefore, the provisions of competition laws were not applicable to them---Claim of respondents was that in all respects, the legal relationship between the Executive Board and the respondents (Medical Centres) was that of a 'principal and agent' to the extent that respondents conducted pre-departure medical check-up---Submission of the complainant was that respondents were running profit earning units based on commercial and economic activity; and that Executive Board was a 'Regulator' and not the 'Principal'---No exemption to 'single economic entity' had been provided under Competition Act, 2010 from the application of its S.4---Respondents were not acting on behalf of the Executive Board in dealing with intended emigrants but were conducting their own business after obtaining the licence from the Executive Board; it was not the Executive Board, but the respondents who incurred the costs and market investment for purchase of relevant equipment and training of personnel; respondents were not responsible for? making? the? loss? good? towards? the? Executive Board; respondents were not obliged to render the accounts? to? the? Executive? Board? on? their? demand and did not receive any payment on behalf of the Executive Board---Fee charged by the respondents for the conduct of pre-departure medical tests, was retained by the respondents and only annual licence fee was paid to the Executive Board for the permission to conduct the economic activity for another year; respondents were also? engaged? in? the? provision? of? other? health related? activities,? for? which? no? reimbursement? had been made by the Executive Board---Relationship of 'principal' and 'agent' therefore, did not exist between the Executive Board and respondents, in circumstances.

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

----S. 182---Principal and agent, relationship of---Scope---For establishing the relationship of principal and agent conditions which must be fulfilled were; to do an act for the principal, or to represent the principal in dealing with third parties; no element of risk and cost was attributed to the agent; a loss sustained by the principal, was bound to be made good by the agent; agent was bound to render proper accounts to his principal on demand, and was bound to pay his principal all sums received on his account; agent not to retain any profit, but only would receive his commission.

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

----Ss. 4, 30, 37 &? 38---Pre-departure medical check-up by intending emigrants--- Entering into prohibited agreements by approved Medical Centres by cartelizing to allocate the intended emigrants among themselves---Question for determination was whether the conduct under review, qualified itself as a 'foreign sovereign compulsion' or 'act of State' and the provisions of competition law were not applicable to respondents---Two defences had been clubbed together by the respondents, the doctrine of "foreign sovereign compulsion"; and the doctrine of "act of State"---Two essential requisites that must co-exist in order to invoke doctrine of "Foreign Sovereign Compulsion" were that the conduct in question was in pursuant to a 'unilateral act or legislation' of the foreign sovereign; and its non-compliance would entail penal consequences---Doctrine of 'foreign sovereign compulsion' was not applicable as matter in the present case pertained to a service being provided within the territories of Pakistan---Argument of the respondents that alleged act fell within the purview of "foreign sovereign compulsion', was not tenable---Facts and circumstances of the present case had clearly negated the conduct under review in the subject proceedings qualified for 'foreign sovereign compulsion' or 'act of State'.

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

----Ss. 4, 30, 37? & 38---Pre-departure medical check-up by intending emigrants--- Entering into prohibited agreements by approved Medical Centres by cartelizing to allocate the intended emigrants among themselves---Question for determination was whether fixing of fee for pre-departure medical check up by the respondents (Medical Centres) constituted violation of clause (a) of subsection (2) of S.4 of Competition Act, 2010---Under the Enquiry Report and the subsequent show-cause notices issued to the respondents, it had been alleged that "it appeared that the fee charged from the consumers/ intended emigrants/expatriates, by the respondents across Pakistan, was uniform and apparently was fixed under the auspices of respondents, and subsequently proposed to the Executive Board of Health Minister's Council for its approval---Chart showing history of fee charged for the pre-departure medical tests as provided by the respondents, it appeared that same fee was charged by the respondents, upon review of the rules and regulations---No regulations, addressing the aspect of prescribed/fixed fee had been found---Subsequent prescribed/fixed fee was not catered for by the Rules and Regulations, but an acknowledgment by the Executive Board was on the record to the effect that fee was charged and it was not specified whether, it was to operate as an upper ceiling or a 'fixed' fee---Prescribed fee in Pakistan was lesser than the fee charged in other countries---Such prescribed fee, in the facts and circumstances, if allowed to operate as an upper ceiling, would outweigh the adverse effect of absence or lessening of competition which would also result in a more streamlined regulatory process---Medical tests were in the nature of mandatory/necessary services, and were only conducted by the accredited medical centres i.e. respondents, if a prescribed fee in the form of ceiling was not provided, the respondents could start charging fee at exploitative rates---Purpose of allowing upper ceiling for such prescribed fee would also allow certain level of competition among the respondents vis-a-vis the fee.

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

----Ss. 4, 30, 37 &? 38---Pre-departure medical check up by intending emigrants--- Entering into prohibited agreements by Medical Centres cartelizing to allocate the intending emigrants among themselves---Question for determination was whether the division of market and equal allocation of the customers for pre-departure medical check-ups by the respondents, constituted a violation under clauses (b) & (c) of subsection (2) of S.4 of the Competition Act, 2010---System of pre-departure medical tests was in practice since 1995; it was only in 1999 that Pakistan was segregated into different regions by establishing G.C.C. Approved Medical Centres Administrative Office (GAMCAs) in every region/city where two and more GAMCs were operating and also the equal allocation G.C.C. customers among the GAMSs within? a? region? was? fallen--- In? order? to? achieve? the real? objective? of? the? Executive? Board? of? Health Ministers' Council the modus operandi of division of market? by? creating? five? regions,? and? equal allocation of G.C.C. customers within each of the regions, could not be considered as indispensable---Proposing and implementing each system seemed to have only ensured of the respondents' profitability at the cost of violation of Competition Act, 2010---Such contravention was restrictive of competition in the relevant market and could not be termed as done for public cause---Mere pretext to curb malpractices could not be a ground to allow the contraventions of law---Division of market and equal allocation of G.C.C. customers (quota system) had allowed the respondents to operate in their Comfort Zones by ensuring of guaranteed revenues---By implementing the division of market? and? equal? allocation? of? G.C.C Customer (quota system),? the competition was prevented and restricted, leaving no incentive to bring any innovation or efficiency--- Competition Commission had the responsibility of endeavouring behaviour on the part of economic agents that adversely impacted upon the right of the general public---Such practice and conduct of the respondents were violative of clauses (b) and (c) of subsection (2) of S.4 of the Competition Act, 2010 and warranted imposition of penalty---Regarding the quantum of penalty to be imposed, the Commission took into account the aspect of seriousness and duration of the violation and the conduct of the respondents---Market division and customer allocation was in a sense inherently anti-competitive---Agreements were designed to create an area of monopoly in which competition and efficiency were totally absent---In such markets no benefit was advanced to the general public, and not only the customer choices/preferences were restricted and foreclosed, but innovation and efficiency was also lost---Respondents had engaged themselves into an arrangement which was per se illegal---Fixed penalty was imposed in view of all given facts and circumstances---Respondents were further directed to discontinue the practice/arrangement of territorial division and equal allocation of G.C.C. Customers among the respondents, and file the compliance report thereof with the Registrar of the Commission.

??????????? Bank's Cartelization's case 2010 CLD 1271; Stock Exchanges' case 2010 CLD 1377; Karachi Stock Exchange (G) Ltd. abuse of dominance case, the Jamshoro Joint Venture Limited case and the Proctor and Gamble Pakistan's case 2010 CLD 1695; Pir Sabir Shah v. Shad Muhammad Khan, Member Provincial Assembly N.-W.F.P. PLD 1995 SC 66; Akhtar Ali Parvez v. Altafur Rehman PLD 1963 Lah. 390; Mehr? Dad v. Settlement and Rehabilitation Commissions PLD 1974 SC 193; Chempak (Pvt.) Ltd. v. Sindh Employee's Social Security Institution (Sessi) 2003 PLC 380 and Federation of Pakistan v. Aitzaz Ahsan PLD 1989 SC 61 rel.

??????????? Hofner and Elser v. Macroton [1991] E.C.R. I-1979; FENIN v. Commission of European Communities [2003] 5 CMLR 1; Diego Cali v. SEPG [1997] 5 CMLR 484; Firma Ambulanz? Glockner? v.? Landkries Sudwestpfalz [2001] ECR I-8089; Commission v. Italy [1998] ECR I-3851; Union Internationale? des? Chemins? de? Fer? v.? Commission [Case T-14/93] and CEES v. CEP, Case C-217/05 distinguished.

??????????? Bolan Beverages (Pvt.) Limited v. PEPSICO Inc., PLD 2004 SC 860; Vertical Exemption Guidelines; International Association of Machinists v. The Organization of Petroleum Exporting Countries (IAM I), 477 F.Supp. 553 (C.D. Cal. 1979) at 569; In re Refined Petroleum Products (RPP) Antitrust Litigation 649 F. Supp. 2d 572 (2009) and Spectrum Stores v. Citgo Petroleum Corporation 632 F.3d 938 (2011); Mannington Mills, Inc. v. Congoleum Corp. 595 F.2d 1287 (3d Cir. 1979) at 1293; Interamerican Refining Corp. v. Texaco Maracaibo, Inc., 307 F.Supp. 1291 (D. Del. 1970); re Vitamin C Antitrust Litigation 810 F. Supp. 2d 522 (2011); Underhill v. Hernandez, 168 U.S. 250 (1897) at 252; W.S. Kirkpatrick 493 U.S. 400 (1990) at 406; Terrorist Attacks 538 F.3d 71 (2008) at 85; United States v. Sisal Sales Corporation et al., 274 U.S. 268 (1927); United States v. Watchmakers of Switzerland Information Center, Inc. (Swiss Watchmakers) 1963 Trade Cases (CCH) 70,600 (S.D.N.Y. 1962), modified, 1965 Trade Cases (CCH) 71,352 (S.D.N.Y. 1965), A. Ahlstrom Osakeyhtio and others v. Commission of the European Communities (Wood Pulp), Joined Cases 89, 104, 114, 116, 117 and 125 to 129/85 [1988] ECR 5193; Asia Motors III Asia Motor France SA and others v. Commission of the European Communities (Asia Motor III), Case T-387/94 [1996] ECR II-961; Vitamin C Antitrust Litigation, 810 F. Supp. 2d 522 (E.D.N.Y. Sept. 2011); Interamerican Refining Corp. v. Texaco Maracaibo, Inc., 307 F. Supp. 1291 (D. Del. 1970); International Association of Machinists v. The Organization of Petroleum Exporting Countries (IAMI), 477 F.Supp. 553 (C.D. Cal. 1979) at 569; Allied Bank International v. Banco Credito Agricolo de Cartago (757 F.2d 516 (2d Cir); Khan v. State Oil Co. 93 F.3D 1358 (7th Cir. 1996); Global Antitrust Law and Economics by Eliner Elhaque and Damien Geradin, Foundation Press 2007; United States v. Topco Assocs. Inc., 405 U.S. 596; Palmer v. BRG of Georgia, Inc., 498 U.S. 46; Columbia Steel v. Portland GE, 103 F.3d 1446 (U.S. Court of Appeals 9th Circuit) and Robert Pitofsky et al in his book Trade Regulation ref.

??????????? Qausain Faisal Mufti, Advocate and Fida Ahmad, Secretary-General, POEPA on behalf of Pakistan Overseas Employment Promoters Association (POEPA).

??????????? Salman Akram Raja, Advocate Supreme Court, Umar Akram Chaudhry, Advocate, Malik Ghulam Sabir, Advocate, Dr. Inaam, Dr. Shamshad, Dr. Mujahid Malik, Imran Sohail and Dr. Hashmat Malik on behalf of GCC Approved Medical Centers and GAMCA.

??????????? Dates of hearing: 20th March, 25th April and 22nd June, 2012.

2013 C L D 1014

[Competition Commission of Pakistan]

Before Rahat Kaunain Hassan, Chairperson, Mueen Batlay and Shahzad Ansar, Members

Messrs DHL PAKISTAN (PVT.) LTD.: In the matter of

File No.66/REG/COMP/DHL/CCP/2011, decided on 21st December, 2012.

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

----Ss. 10, 37(2) & 38---Deceptive marketing practice---Complainant had alleged that respondents were fraudulently using complainant's stylized and artistically created logo/trade mark, without its permission or authorization or consent, which was false, deceptive and misleading and also capable of harming the business interest of the complainant; and by so doing the respondents had violated the provision of S.10 of Competition Act, 2010---Respondents had alleged that the complaint had not been filed by the competent person, as the resolution of Board of Directors of complainant company did not contain the names and designation of Directors of the company---Validity---Complainant was a legal person being a company limited by shares and it was registered as a company with the Securities and Exchange Commission of Pakistan under the provisions of the Companies Ordinance, 1984---Pleadings in legal proceedings, initiated on behalf of juristic person could be signed by any person; (i) authorized to do so under the Articles of Association of company; or (ii) authorized by its Board of Directors; or (iii) authorized to do so through a general power of attorney---Complaint had been filed by company Secretary; and complaint not only was bearing the signature, but also was bearing the seal of the complainant undertaking---Certified true copy of the Board's resolution had also been annexed with the complaint---Complaint did contain the signature of authorized person of the complainant company by virtue of Board's resolution; and seal of the complainant was also affixed on the complaint---Power of attorney of the counsel was also duly signed by company's Secretary, who was duly authorized in that regard---Objection of respondents had no merits.

Messrs GMS Lines Co. Ltd. v. Messrs Adamjee Insurance Company Limited 2010 CLD 327 rel.

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

----Ss. 10, 37(2) & 38---Deceptive marketing practice---Ignorance of law---Common objections taken by the respondents was that 'They had no knowledge about special law i.e. Competition Act, 2010'; that they had no intention to deceive any person in any manner; that the complaint had been filed for extraneous purposes and with mala fide intention which tantamounted to victimization and harassment to the respondent---Validity---Trade mark of the company 'DHL' and its logo were known worldwide---Complainant company had incurred considerable expenses in advertising and promoting its trade mark through various media, both print and electronic, having circulation/viewership throughout the world; and in Pakistan and through its quality service had earned a certain stature in rendering courier services---Ignorance of law could not be accepted as a valid justification or defences---Respondents' contention that they had no knowledge about the Competition Act, 2010 or any such type of special law, was not a valid justification---Complainant, in circumstances, was within right to seek and pursue protection of its rights conferred under the law.

Order dated 16-8-2010 in the matter of Ace Group of Industries 2010 CLD 1840 rel.

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

----Ss. 10, 37(2) & 38---Deceptive marketing practice---Complainant establishment had alleged that the respondents were fraudulently using, complainant's stylized and artistically created logo/trade mark, without its permission or authorization or consent, which was false, deceptive and misleading, and was also capable of harming the business interest of the complainant; and the respondents were violating the provision of S. 10 of the Competition Act, 2010---Validity---Persons who were violating the provisions of S.10 of the Competition Act, 2010 could be divided in four categories; first category was of those who were allegedly using complainant's trade mark, but discontinued its use subsequent to the receipt of notice of the commission; second category was of those who allegedly used complainant's trade mark and had not stopped from using the same, but courier packages were being sent through the complainant; third category was of those who had allegedly used trade mark of the complainant; and had not provided any proof of its discontinuation or provided any evidence that the couriers were passed on to the complainant and fourth category was of those who allegedly continued using the marks which were deceptively similar to the trademark of the complainant and had been carrying out business in their own names---Comparison of the trademark of the complainant and the marks used by respondents of first category, led to the conclusion that they had used the identical trademark for marketing purpose, but subsequent to the receipt of Commission's notice, promptly discontinued the use of trademark of the complainant; and also reported compliance by removing said trademark from their billboards, nearby hoardings and also brought major changes to the website, thus demonstrating their good faith in the case---In view of said conduct of said respondents, taking a lenient view, no penalty was imposed on them and they were reprimanded not to commit such contravention in future while other respondents were imposed penalty by the Competition Commission.

2010 CLD 462; PLD 1971 SC 550; Sikandar Hayat v. Haseena Sheikh PLD 2010 SC 19; Mst. Musarrat Bibi v. Tariq Mahmood Tariq 1999 SCMR 799; Malik Umar Aslam v. Sumera Malik PLD 2007 SC 362; Muhammad Ishaq v. District and Session Judge, Jhang 2000 SCMR 1274 and Kamran Asghar v. Board of Intermediate and Secondary Education, D.G. Khan PLD 2001 Lah. 260 ref.

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

----Ss. 10, 37(2) & 38---Deceptive marketing practice---Respondents had used trademark of the complainant and had not stopped from using the same, but courier packages were ultimately being sent through the complainant---Complainant in case of said respondents had not taken any step in discouraging the practice except for filing the complaint---Complainant needed to devise an appropriate modality to deal with such 'unauthorized' representatives---Said respondents though had assured the Competition Commission of future compliance, but penalty was imposed on them keeping in view that the practices were misleading and deceptive in terms of S.10 of the Competition Act, 2010---Penalty of Rs.500,000 was imposed on the said respondents, in circumstances.

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

----Ss. 10, 37(2) & 38---Deceptive marketing practice---Respondents had allegedly used trademarks of the complainant, and not provided any proof of its discontinuation or provided any evidence that the couriers were passed on to the complainant---Said respondents were using the complainant's trademarks in contravention of subsection (1) of S.10 of Competition Act, 2010---Respondents had not placed on record that they had any authorization by the complainant in regarding with the use of trademarks of the complainant---Sole purpose of respondents was to represent themselves as the complainant's 'service center', or 'Authorized Dealers', to reap the benefit from the good-will attached to the complainant's trademark by misleading the consumers---Said respondents had failed in substantiating their stance and had not even demonstrated their good faith through their conduct---Contravention of S.10(1) of the Competition Act, 2010 having stood established, necessary deterrent effect would be achieved, and the interest of justice served, even if a penalty in the sum of Rs.1,000,000 was imposed, in circumstances.

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

----Ss. 10, 37(2) & 38---Deceptive marketing practice---Respondents allegedly continued using the marks which were deceptively similar to trademark of the complainant and had been carrying out the business in their own names---One of said respondents, even used the complainant's trademark and displayed it in the glass wall of his outlet---By displaying the trademark of the complainant on billboards, nearby hoardings and visiting cards, the respondents had, in fact, made the consumers believe that they were authorized dealers/representatives or service centres of the complainant---Complainant or its principal had not authorized any of the respondents to use its trademarks or logo---Such conduct of said respondents was aimed at capitalizing on the good-will attached to complainant's trademarks by misleading the consumer through the deceptive logo, capable of harming the business interest of the complainant in terms of clauses (a) & (b) of subsection (2) of S.10 of the Competition Act, 2010---Penalty of Rs.1,000,000 was imposed on the respondents.

Order in the matter of ZONG 2010 CLD 1478 rel.

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

----S. 10---Fraudulent use of another's trademark---Good-will---Scope---Part of any business's identity was the good-will, which it had established with consumers, while part of a product's identity was the reputation it had earned for quality and value---Trademark promote initiative and enterprise worldwide by rewarding the owners of trademark with recognition and financial profit---Trademark protection also would hinder the efforts of unfair competitions, such as counterfeiters, to use similar distinctive signs to market inferior or different products or services which enabled people with skill and enterprise to produce and mark goods and services in fair conditions, thereby facilitating the International Trade.

Hoffmann-La Roche [1978] E.C.R. 1139, para 7; Philips Electronics NV v. Remington Consumer Products Ltd. [2002] ECR 1-0000; Arsenal Football Club v. Matthew Reed [2003] RPC 9 and Loendersloot [1997] E.C.R. 1-6227 rel.

Hassan Irfan Khan, Ms. Maria Farrukh Khan, Ms. Habeeba Ahmad, Advocates of Irfan and Irfan for Messrs DHL Pakistan (Pvt.) Ltd.

Nauman Anwar Butt, Shoaib Atta, Uzair Zain ul Abidin, Abdul Shakoor on behalf of Rehan Sheikh, Raja Asir Munir, Asif Iqbal, Salman on behalf of ICS Couriers and Malik M. Pervaiz for Respondents.

Dates of hearing: 13th March and 15th August, 2012.

2013 C L D 1129

[Competition Commission of Pakistan]

Before Abdul Ghaffar and Dr. Joseph Wilson, Members

ACQUISITION OF PFIZER NUTRITION (A BUSINESS UNIT OF PFIZER INC.) BY NESTLE S.A.: In the matter of

File No.493/MERGER-CCP/2012, decided on 9th October, 2012.

Competition Act (XIX of 2010)---

----Ss. 2(e), 11 & 31(1)(d)(i)---Competition (Merger Control) Regulations, 2007, Regln.6---Pre-merger application---Applicant/acquirer, had submitted a pre-merger application regarding the clearance from the Competition Commission of Pakistan the acquisition of corporation---Applicant was a dominant player in the relevant product market and would further strengthen its dominant position in the relevant market---Transaction involved the proposed acquisition of the merger corporation by way of contracts, assets and liabilities of the business segments by corporation---Apart from lessening of competition, elimination of a competitor also would reduce the choices available to consumer---Availability of choice was an important determinant of a competitive market---Reduction in choices available to consumers was the concern of the Competition Commission---Bench and the merger parties, however, agreed that a written undertaking by the applicant/acquirer to the effect that, merged corporation's products would continue to be available for a period of three years from the date of closing of transaction in Pakistan---Since the applicant had given a written undertaking to the Competition Commission the Bench authorized the acquisition under S.31(1)(d)(i) of the Competition Act, 2010.

Ijaz Ahmed and Habib Ahmed Bhatti for Nestle S.A.

Ms. Ferzeen Bhadha and Ms. Samiya Farkee for Pfizer Inc. (Wyeth Pakistan).

Date of hearing: 2nd October, 2012.

2013 C L D 1184

[Competition Commission of Pakistan]

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

INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN (ICAP): In the matter of

Show Cause Notice No.105/2012, dated 17th September, 2012, decided on 10th January, 2013.

Competition Act (XIX of 2010)---

----Ss. 4 & 38(3)---Abuse of dominant position---Institution of Chartered Accountants of Pakistan (ICAP), issued 'July Directive' whereby it had prohibited its members and chartered accountant firms from training non-ICAP accountancy students---'ICAP', maintained that pursuant to subsequent directive (October Circular), said prohibition was narrowed down to such members and accountancy firms who were approved training organization of 'ICAP'---Said 'July Directive', had a wider scope and had placed an absolute bar on all members of 'ICAP' engaging trainees of other accounting bodies---Contention of 'ICAP' that subsequent to the 'October circular', show-cause notice issued to it had lost its basis had no merit---Such prohibition on accountancy firm foreclosed, shut out and precluded not only a large segment of the relevant market for non-ICAP students, but the most valuable segment---Accountancy firms were restricted in their choice and freedom to engage a trainee; while it deprived the non-ICAP students, both quantitatively and qualitatively, from gaining such experience, practically from the most prestigious segment of the training market which adversely impacts the accountancy firms as well as the value of the qualification offered by direct competitors of 'ICAP', thereby restricting, preventing and reducing competition in the relevant market---Normally, each accountancy body had a best of public practice firms and/or commercial organizations, which were recognized for imparting training, necessary to complete the requirements for getting membership of the institute---Those recognized trainers, then accept accountancy students and certify that experience gained by the students---Training through a public practice accounting firms, was a valuable form of training for accountancy students---Said 'July Directive', had also created a barrier for those students seeking entry in the market for provision of accountancy services in Pakistan---'ICAP' need not ban its members from training students of other accountancy bodies to purportedly improve the quality of training for their own students---'ICAP' ought not discourage, discriminate or otherwise unequally treat growing number of a human resource, essential for a vibrant economy---As a natural corollary of competition in the market, the increase in the number of such professionals in the past had provided and should continue to provide, the businesses and other consumers, not only with a greater choice, but also improved quality and reduced costs for accountancy services---'July Directive' and 'October Circular', were declared to be in violation of S.4 of Competition Act, 2010, and to be without any legal force---Penalty of Rs.25 millions, was imposed on 'ICAP', and it was restrained, from issuing similar Directives and Circulars, in future.

Wouters v. Algemene Roaad can de Nederlandse Orde can Adcovaten (C-309/99) ECR I-1577; Pavlov v. Stichting Pensioenfnonds Medische Specialisten (C-180/94 to C-180/98) [2000] ECR I-6451 and Wouters and Hemat v. The Medical Council [2006] IEHC 187 rel.

Hemat v. Medical Council [2006] IEHC 187 ref.

Ahmed Saeed, President, Abdullah Yousaf, Member Council, Yaqoob Sattar, VP (South), Naeem Akhter Sheikh, VP (North), Shoaib Ahmed, Secretary, Salman Akram Raja, ASC, Sameer Khosa, Barrister, Amna Hassain, Advocate and Malik Ghulam Sabir, Advocate on behalf of Institute of Chartered Accountants of Pakistan (ICAP).

Arif Masud Mirza, Head of ACCA Pakistan, Haroon A. Jan, Head of ACCA Lahore, Rehan Uddin, Head of ACCA Karachi and Noor Ulain, Head of ACCA Islamabad on behalf of Messrs ACCA Pakistan Ltd.

Dates of hearing: 4th October, 1st, 16th and 27th November, 2012.

2013 C L D 16

[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

FAROOQ GULZAR, CHIEF EXECUTIVE OFFICER, GULZAR OIL INDUSTRIES---Respondent

Complaint No.17 of 2010, decided on 30th June, 2011.

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

----Ss. 11, 16 & 17--- Environmental Samples Rules, 2001---Release of untreated effluent---Main allegation was that the wastewater samples collected from the mill, were found beyond the limits of National Environmental Quality Standards---Environmental Protection Agency, initiated proceedings against the mill for violation of S.11 of the Pakistan Environmental Protection Act, 1997---Case of prosecution was that date of collection of wastewater sample was 9-2-2010, but the test report bore the date of receiving of samples as 15-2-2010 and customer reference number contradicted the number mentioned on Forms B & C---Said material contradictions had made the whole case of prosecution as doubtful one---No details of procedure adopted by mill was disclosed in respect of manufacturing process, use of water and its alleged polluted discharge in the environment causing damage to the underground water quality---Prosecution had not brought anything in respect of service of notice on the mill---If representative of mill had failed to appear on the relevant date, another opportunity of hearing should have been afforded instead of issuance of Environmental Protection Order on the same date---Violation was in the case of mandatory provisions of Environmental Samples Rules, 2001---Issuance of Environmental Protection Order without providing the copy of report and service of notice, appeared to be harsh and against the principles of natural justice---Prosecution had failed to prove the charge against mill beyond shadow of reasonable doubt---Chief Executive Officer of the mill was acquitted, in circumstances.

Karim Nawaz Qureshi, Deputy District Public Prosecutor for SEPA.

Muhammad Ali Tak Chhipa for Respondent/Accused.

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2013 C L D 1438

[High Court (AJ&K)]

Before Ghulam Mustafa Mughal, C.J., M. Tabassum Aftab Alvi and Abdul Rasheed Sulehria, JJ

COMMUNICATION AND WORKS DEPARTMENT, AZAD GOVERNMENT OF THE STATE OF JAMMU AND KASHMIR through Chief Engineer EEAP AJK---Appellant

Versus

Messrs DESIGN AND ENGINEERING SYSTEM and 4 others---Respondents

Writ Petition No.159 of 2012, decided on 16th April, 2013.

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

----S. 30---Award, setting aside of---Scope---Grounds recognized by law for setting aside award being very limited---Principles.

An arbitration forum is one of exclusive jurisdiction based on the choice of parties. Award rendered in arbitration is not to be lightly interfered with as grounds for interference are very limited. Out of such grounds an error of law apparent on the face of award, misconduct on part of arbitrator or in proceedings or an award improperly procured or is otherwise invalid are recognized by law.

Kh. Ghulam Rasool Lone v. Azad Jammu and Kashmir Government PLD 1971 AJK 127; Ghulam Abbas v. Trustees of the Port of Karachi PLD 1987 SC 393; Messrs Combined Enterprises v. Water and Power Development Authority, Lahore PLD 1988 SC 39; Government of East Pakistan v. Messrs A. Rab and Sons and another PLD 1967 (Dacca) 797; Dr. Khalida Malik and 2 others v. Mst. Farida Malik and 7 others 1994 MLD 2348; Province of Punjab through Secretary to Government of the Punjab Communications and Works Department Lahore and another v. Messrs Tarmic Construction (Pvt.) Limited 1999 CLC 946; Pakistan Steel Mills Corporation, Karachi v. Messrs Mustafa Sons (Pvt.) Ltd., Karachi PLD 2003 SC 301; Messrs Tribal Friends Co. v. Province of Balochistan 2002 SCMR 1903; Zakaullah Khan v. Government of Pakistan through Secretary, Buildings and Roads Department, Lahore PLD 1998 Lah. 132 and S.G. Rayon Mills (Pvt.) Limited v. Fida Hussain and Associates 2002 CLC 353 rel.

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

----S. 39---Appeal against order of Trial Court making award rule of court---Powers of High Court to interfere with such order---Scope stated.

High Court while adjudicating the validity of an award does not sit as a Court of Appeal over the Arbitrators as well as Arbitration Court. If the findings of the Arbitrators are based on documentary evidence and are not perverse and if there is no misreading or non-reading of evidence, the findings of Arbitrators cannot be disturbed. Weight of the judicial opinion has always been in favour of non-interference in the findings of the Arbitrator/Arbitrators, if it is based on evidence. Until and unless it is found that gross miscarriage of justice has been caused due to any perverse findings by the Arbitrators, a Court of law will not disturb such findings, even if different view of the matter can be taken.

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

----Preamble---Arbitration Act, 1940, object of---Scope---Sole object of Act, 1940 being to enforce arbitration agreement and resolve dispute between parties thereto through domestic Tribunal speedily---Principles.

The whole object underline to the Arbitration Act is to enforce the arbitration agreement whereby the parties have bound themselves to have their disputes arising out of the transaction to which such an agreement is applicable adjudicated upon and decided by a domestic Tribunal. The object of the Tribunal is to decide disputes speedily by quasi-judicial means by avoiding formalities, technicalities of law, delay and expensive litigation.

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

----Ss. 2 & 30---Term "misconduct" being akin to neglect duties and responsibilities of Arbitrator.

Abdul Rasheed Karnahi, Standing Council for Appellant.

Barrister Humayun Nawaz Khan for Respondent No.1.

Nemo for Respondents Nos.2 and 5.

Respondents Nos.3 and 4 in person.

Date of hearing: 16th April, 2013.

2013 C L D 216

[Islamabad]

Before Noor-ul-Haq N. Qureshi, J

NASEEMUL ALI, EX. CHIEF EXECUTIVE OFFICER OF TRUST MANAGEMENT SERVICES (PVT.) LTD. TRUST MODARBA---Petitioner

Versus

EXECUTIVE DIRECTOR, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and another---Respondents

Writ Petition No. 1803 of 2010, heard on 16th October, 2012.

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

----Ss. 34 & 33--- Constitution of Pakistan, Art. 199---Constitutional petition--- Maintainability--- Alternate adequate remedy--- Petitioner impugned order of Securities and Exchange Commission imposing fine upon him against which his appeal was dismissed by the Appellate Bench of the Commission---Validity---Petitioner had availed right of appeal under S.33 of the Securities and Exchange Commission of Pakistan Act, 1997 which was dismissed and further appeal to the High Court as provided by S.34 of the Securities and Exchange Commission of Pakistan Act 1998 was available to him, which he did not avail---Constitutional Petition, was therefore, not maintainable and was dismissed, in circumstances.

Khalid Mahmood v. Collector of Customs, Lahore 1999 SCMR 1881 and Collector of Customs and others v. Universal Gateway Trading Corporation and another 2005 SCMR 37 rel.

Raja Imran Aziz for Petitioner.

Sultan Mazhar for Respondents.

Date of hearing: 16th October, 2012.

2013 C L D 508

[Islamabad]

Before Muhammad Anwar Khan Kasi, J

ABID MAHMOOD MALIK---Petitioner

Versus

STATION HOUSE OFFICER, POLICE STATION MARGALLA and others---Respondents

Criminal Miscellaneous No.22-Q of 2012, decided on 29th January, 2013.

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

----Ss. 20 & 7---Penal Code (XLV of 1860), S.489-F---Cheque issued to Financial Institution for repayment of loan---Dishonouring of cheque---Quashing of F.I.R. under 489-F, P.P.C.---Petitioner sought quashing of F.I.R. filed against him on the ground that since dispute was between a Financial Institution and customer, therefore, the sole jurisdiction in the matter vested with the Banking Court under Financial Institutions (Recovery of Finances) Ordinance, 2001--- Validity--- Financial Institutions (Recovery of Finances) Ordinance, 2001 being a special enactment had an overriding effect on ordinary law, therefore, the petitioner could not be proceeded with under provisions of the P.P.C. and only remedy available for the Financial Institution was to invoke provisions of S.20 of the Ordinance by filing a direct complaint under S.7(1)(b) of the Ordinance---Prosecution of the petitioner under S.489-F, P.P.C. was an abuse of the process of the court and was without lawful authority--- Financial Institution was debarred from taking advantage of S.489-F, P.P.C.---F.I.R. against the petition was quashed, in circumstances.

PLD 2009 Lah. 541; 2009 PCr.LJ 325; 2010 YLR 547; 2009 CLD 1422; 2010 CLD 344; 2010 PCr.LJ 412; 2009 CLD 1149; 2011 CLD 1539; 2012 MLD 1551; 2012 PCr.LJ 1890; 2006 CLD 625 and 2010 CLD 10 ref.

Yasir Tanveer Awan for Petitioner.

Shabbir Ahmad Abbasi, Standing Counsel.

Imran Ali Khan for the Complainant-Respondent No.3.

Ishtiaq Ahmad, A.S.-I. with record.

2013 C L D 738

[Islamabad]

Before Riaz Ahmed Khan and Noor-ul-Haq N. Qureshi, JJ

ABDUL RAUF CHAUDHRY and 2 others---Appellants

Versus

The STATE and 2 others---Respondents

Intra-Court Appeal No.14 of 2013, decided on 21st February, 2013.

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

----S. 7(4)---Criminal Procedure Code (V of 1898), S. 154---Penal Code (XLV of 1860), Ss.408, 410, 419, 468 & 471---Law Reforms Ordinance (XII of 1972), S.3---Intra Court appeal---Offence committed under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Registration of F.I.R for such offence---Legality---"Registration of F.I.R." and "taking of cognizance"---Distinction---Plea was that only Banking Court could take cognizance of an offence under the said Ordinance on a complaint in writing made by a person authorized by the Bank, therefore, registration of F.I.R. by the complainant was without jurisdiction---Validity---Registration of F.I.R. and taking of cognizance were two distinct and independent concepts under criminal law---No clog or implied prohibition on registration of F.I.R. had been provided specifically--- Appeal was dismissed accordingly.

2006 CLD 625 rel.

Syed Javed Akbar for Appellants.

2013 C L D 801

[Islamabad]

Before Riaz Ahmad Khan and Muhammad Azim Khan Afridi, JJ

SAMBA BANK LTD. through Authorized Officer/Attorney---Appellant

Versus

Messrs PARAMOUNT ENTERPRISES and another---Respondents

F.A.O. No.17 of 2011, decided on 22nd February, 2012.

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

----S. 19(7)(b), proviso---Civil Procedure Code (V of 1908), O.XXI, R.90--- Auction of mortgaged property---Investigation of claims and objections---Furnishing of written undertaking by the Financial Institution for payment of penalty in the event objections were found to be valid---Scope---Suit for recovery was decreed whereafter application of respondent/applicant under proviso to S.19(7) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 was allowed and the plaintiff Bank was ordered to file a written undertaking to compensate the aggrieved party and pay twenty per cent penalty in the event the objections were found to be valid---Contention of plaintiff-Bank was that said order was not sustainable as the judgment-debtor had not paid anything towards his liability to the plaintiff-Bank and S.19(7) of the Ordinance was applicable to the present case--- Validity--- Proviso to S.19(7) of the Ordinance clearly indicated that a written undertaking was to be given by the financial institution in the mode and manner laid down therein, and as such the impugned order being in harmony with the said S.19 of the Ordinance, as well as with the terms of the proviso to S.19(7) of the Ordinance was valid and in consonance with the law and could not be interfered with---Appeal was dismissed, in circumstances.

2008 CLD 449 and 2007 CLD 1511 ref.

Malik Muhammad Siddique Awan for Appellant.

Qausain Faisal Mufti for Respondents.

Date of hearing: 22nd February, 2012.

2013 C L D 1085

[Islamabad]

Before Noor-ul-Haq N. Qureshi, J

WARID TELECOM (PVT.) LTD. and others---Petitioners

Versus

PAKISTAN TELECOMMUNICATION AUTHORITY, ISLAMABAD---Respondent

Writ Petitions Nos.1152 of 2012 and FAOs. Nos.16 to 19 of 2012, decided on 8th March, 2013.

(a) Pakistan Telecommunication (Re-organization) Act (XVII of 1996)---

----S. 4(m)---Telecom Consumer Protection Regulations, 2009, Regln.8 ---Constitution of Pakistan, Art. 199---Constitutional petition---Unfair commercial practices---Protection of consumer rights---Maxim: Audi alteram partem---Applicability---Public interest---Petitioner mobile telecommunication-services companies impugned order of Pakistan Telecommunications Authority ("PTA") whereby "prize-schemes"/lucky draw were suspended by the PTA on the ground that such schemes were prima facie contrary to the law and in violation of Regln. 8 of the Telecom Consumer Protection Regulations, 2009---Contention of the petitioners was, inter alia, that such suspension amounted to being condemned unheard and was contrary to the principle of audi alteram partem---Validity---Petitioners had themselves pleaded that the prize schemes were launched for the purpose of marketing and providing incentives to the customers, but the same did not affect their original business, therefore , no right of the petitioners was being infringed and petitioners could not allege the same to be a natural right---Petitioners had stated before the court that they were not capable of stopping malpractices associated with such schemes, and therefore, they were not capable of taking responsibilities, and could not claim rights on the same footing---Under provisions of the Pakistan Telecommunication Re-organization Act, 1996; consumer's interest was protected and was therefore, an undisputed legal right---Under Ss.4(m) and 18 of the said Act, paramount consideration was consumer's interest---Consumers could not be left to the mercy of the telecom companies, as such schemes had been launched without any accountability---Relief claimed by petitioners was against public interest---Constitutional petitions were dismissed, in circumstances.

PLD 1989 FSC 60; 2001 CLC 385; PLD 2010 SC 61; PLD 1992 SC 153; 2004 YLR 1161; 2006 CLC 342; 1998 SCMR 1863; 2007 SCMR 289; 2007 SCMR 410; 2011 YLR 2705; PLD 2010 SC 676; PLD 1989 SC 61; PLD 1965 SC 90; 2008 CLC 694; 2003 CLC 331 and PLD 2010 SC 483 ref.

2009 MLD 367; 2007 YLR 399; 2008 YLR 2381; PLD 1983 SC 280 and 2004 CLC 324 rel.

(b) Administration of justice---

----If anyone escaped from his responsibilities, he could not claim rights on the same footing.

(c) Pakistan Telecommunication (Re-organization) Act (XVII of 1996)---

----Ss. 7 & 3---Telecom Consumer Protection Regulations, 2009, Regln.8---Pakistan Telecommunication Authority---Order/directive issued by Director Consumer Protection suspending lucky draw prize schemes launched by mobile telecom operators---Appeal against such directive not maintainable---Directive issued by Director Consumer Protection was not to be deemed as a "decision" by the Authority in view of Ss.3 and 7 of the Pakistan Telecommunication (Re-organization) Act, 1996 and therefore, no appeal against the same could be preferred.

(d) Constitution of Pakistan---

----Art. 18---Freedom of trade, business or profession---Scope---Rights guaranteed under Art.18 of the Constitution were attracted with certain conditions envisaged and not entirely unfettered.

Ali Raza, Ali Sibtain Fazli and Malik Sardar Khan for Petitioners/Appellants.

Afnan Karim Kundi and Misbah-ul-Mustafa for Respondents.

Dates of hearing: 4th and 8th March, 2013.

2013 C L D 1483

[Islamabad]

Before Muhammad Anwar Khan Kasi, C.J. and Shaukat Aziz Siddiqui, J

OIL & GAS DEVELOPMENT COMPANY LIMITED---Appellant

Versus

Messrs MARATHON CONSTRUCTION COMPANY and another---Respondents

R.F.A. No.98 of 2010, decided on 27th May, 2013.

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

----Ss. 30 & 33---Application for setting aside of award---Framing of issues and recording of evidence by court---Scope--- When Arbitrator had framed necessary issues on every aspect of case, then such exercise again would not be mandatory for court---Court might in its discretion, if considered just and expedient, set down such application for hearing on other evidence also.

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

----Ss. 14, 17 & 39---Award given by sole Arbitrator appointed in terms of arbitration clause---Award made rule of court---Appellant's plea was that Arbitrator had been appointed without fulfilling conditions precedent mentioned in arbitration clause---Validity---When parties had voluntarily opted for resolution of their dispute through Arbitrator, who had delivered award, then court would proceed with presumption of correctness attached to award---Award could not be disturbed merely on technical reason not affecting merits of award or at whims of some party aggrieved by terms of Award---Record showed that parties with their mutual consent had appointed sole Arbitrator---Appellant had participated in arbitration proceedings and produced evidence on each and every issue---High Court dismissed appeal in circumstances.

1985 SCMR 597; PLD 1996 SC 108; 2002 SCMR 1662; PLD 2003 SC 301; 2004 SCMR 590; PLD 2006 SC 169; PLD 1980 SC 122; 1984 SCMR 77; 1983 SCMR 718; PLD 2006 Lah. 314; PLD 1998 Lah. 132; 2004 YLR 274; 2006 SCMR 614; 1981 CLC 311; PLD 1992 SC 479; 1973 SCMR 555; PLD 1973 SC 311; PLD 1991 FSC 1; 1992 SCMR 408; PLD 1997 SC 559 and 2011 YLR 2604 ref.

1983 SCMR 718; PLD 2006 Lah. 314 and 2002 SCMR 1662 rel.

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

----Ss. 14, 17 & 39---Award made rule of court---Jurisdiction of Appellate Court---Scope---Appellate Court would not interfere with award, if having been made by Arbitrator after framing of issues.

Khalil-ur-Rehman Abbasi, Advocate Supreme Court for Appellant.

Muhammad Shahid Paracha, Advocate Supreme Court for Respondent No.1.

Syed Tanvir Haider for Respondent No.2.

Date of hearing: 26th March, 2013.

2013 C L D 7

[Sindh]

Before Sajjad Ali Shah, J

COMPANIES ORDINANCE 1984 ANDMETRO CASH AND CARRY PAKISTAN (PRIVATE) LIMITED ETC.: In the matter of

Judicial Miscellaneous Application No.8 of 2012, decided on 11th June, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 284 & 287---Scheme of arrangements between two companies---Factors essential to be considered for sanctioning the scheme by High Court stated.

High Court while exercising its discretion in favour of scheme of arrangement has to ensure, firstly, as to whether all statutory requirements have been fulfilled, secondly, whether all classes of shareholders have been fairly represented, and thirdly, whether scheme of arrangement would be acceptable to an ordinary businessman. The court is not supposed to scrutinize the scheme of arrangement with that much care with which an expert would scrutinize or with the intent of picking holes in it. If the statutory required majority of the shareholders acting in a bona fide and honest manner approve a scheme of arrangement or compromise which normally a fair minded person, reasonably acquainted with the facts of the case can regard it as beneficial for those whom the majority seeks to represent, then, unless there are some strong and cogent grounds to show that the scheme was conceived, designed or calculated to cause injury to others, the court ordinarily would sanction the scheme.

Powers to facilitate reconstruction and amalgamation of the companies have been conferred upon the court by virtue of section 287 of the Companies Ordinance, 1984, subsection (1)(f) whereof clothes the court with the powers to direct for such incidental, consequential and supplemental matters while sanctioning the compromise or arrangements, as are necessary to carry out the reconstruction or amalgamation fully and effectively.

Reference (1997) 88 Companies Case, 596 ref.

Badaruddin F. Vellani for Petitioners Nos.1 and 5.

Omer Soomro for Petitioners Nos.2 to 4.

Shokat Hayat Alizai, Deputy Director S.E.C.P. present in person.

Date of hearing: 30th May, 2012.

2013 C L D 34

[Sindh]

Before Munib Akhtar, J

ZULFIQUAR HUSSAIN and 2 others---Petitioners

Versus

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

J.M. No. 50 of 2010 and C.M.As. Nos.318, 319 of 2011, decided on 29th May, 2012.

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

----S. 319--- Power of court to stay winding up etc.---Scope---Jurisdiction in company matters is equitable jurisdiction and at the discretion of court and the court has to act in accordance with well established principles regulating exercise of discretionary powers---Much depends on relevant facts and circumstances of the case before the court and relative weight and importance that it assigns to such factors---Power conferred by S.319 of Companies Ordinance, 1984, is not open ended nor can relief thereunder be claimed ex debito justitiae---Scope of S. 319 of Companies Ordinance, 1984, is time bound and application must be moved within three years of winding up order---All such factors ensure that S. 319 of Companies Ordinance, 1984, does not become a vehicle allowing vexatious or frivolous challenges being taken to winding up order.

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

----Ss. 305, 309 & 319---Companies (Court) Rules, 1997, R.28---Winding up of company---Ex parte order, setting aside of---Petitioners were majority share holders and were aggrieved of ex parte order passed by High Court winding up of company in question---Validity---Even if irregularities and defects were regarded as essentially formal in nature, there was substantial injustice---Company on account of failure to serve it property, lost the opportunity to defend itself and was proceeded against ex parte in respect of matter that was literally life-and-death issue for a legal entity; question whether it should be wound up or not---Company was proceeded against ex parte, substantial injustice had also been caused to the majority shareholders, who had been condemned unheard, although Rule 28 of Companies (Court) Rules, 1997, made provision for notice, in appropriate circumstances, being given to them---Such injustice could not be remedied as the company itself had been ordered to be wound up---High Court recalled the order of winding up of the company, passed ex parte---Application was allowed accordingly.

Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd. PLD 1965 SC 221; Nagina Films Ltd. v. Usman Husain and others 1987 CLC 2263; Additional Registrar of Companies v. Noorie Textile Mills Ltd. 2008 CLD 277; Additional Registrar of Companies v. Schon Textile Mills Ltd. 2008 CLD 475; Abdul Rasheed Mughal v. ECSA (PK) (Pvt.) Ltd. 2006 CLD 852; Halsbury's Laws of England, Vol. 7(3) at page 859; East India Cotton Mills Ltd. AIR 1949 Cal. 69 and Nilkanta Kolay v. Official Liquidator AIR 1996 Cal. 171 distinguished.

Ijaz Ahmed for Petitioners.

Mansoor ul Arfin, Nadeem Akhtar and Muhammad Junaid Farooqi for Applicant Shareholders.

Dates of hearing: 19th, 27th October, 2010, 16th November, 20th December, 2011, 13th and 23rd May, 2012.

2013 C L D 57

[Sindh]

Before Irfan Sadaat Khan, J

Messrs SNOWHITE DRY CLEANERS through Partner---Plaintiff

Versus

SUFIYAN AHMED---Defendant

Suit No.1429 and C.M.As. Nos. 11155, 11156 of 2012, decided on 19th October, 2012.

Trade Marks Ordinance (XIX of 2001)---

----S. 46---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Trade mark, infringement of---Suit for declaration and permanent injunction---Temporary injunction, grant of---Contention of plaintiff was that he was running a "Dry Cleaning Shop" under the name and style of "Snowhite Dry Cleaners" since 1949 while defendant (his ex-employee) had opened a "Dry Cleaning Shop" by using the name "Snowash Dry Cleaners" from April, 2011 and that name and style of shop was very similar in pronunciation and was thereby deceiving the general public and causing irreparable loss to the plaintiff---Validity---High Court restrained the defendant from using alleged deceptive trademark till next date of hearing--- Application was allowed, in circumstances.

Moiz Ahmed along with Muhammad Hafeez Qadri for Plaintiff.

2013 C L D 68

[Sindh]

Before Sajjad Ali Shah, J

COMPANIES ORDINANCE 1984 AND ICI PAKISTAN LIMITED and another: In the matter of

Judicial Miscellaneous Application No.46 of 2011, decided on 17th May, 2012.

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

----Ss. 284 & 287---Scheme of arrangements between two companies---Powers of High Court to sanction such scheme---Scope---High Court would apply its judicial mind to such scheme and consider as to whether same would be in interest of company as a whole and would deserve its sanction.

(b) Companies (Court) Rules, 1997---

----R. 66---Rule 66 of Companies (Court) Rules, 1997---Object stated.

The purpose behind Rule 66 of the Companies (Court) Rules, 1997 appears to safeguard the interest of creditors and shareholders and prevent the management from reducing share capital of the company stealthily under the garb of Scheme of Arrangements or to obviate chances for the management to get through the reduction of share capital without proper notice or knowledge of the creditors/ shareholders, but in the cases where proper procedure prescribed by the Ordinance and the Rules has been undertaken and members and creditors are well informed as required by the Rules, a special resolution for reduction of the share capital is accorded by the creditors and employees, to refuse the sanctioning of the Scheme of Arrangements containing reduction of share capital by directing the company to first go through the whole gamut of procedure prescribed for reduction of share capital independently would be uncalled for.

Messrs Hunza Central Asian Textile and Woolen Mills Ltd., Rawalpindi PLD 1976 Lah. 850; Novopan India Limited (1997) 88 Company cases 596 and Areva T and D India Limited (2007), 138 Company Case, 834 (Calcutta) ref.

Badaruddin F. Vellani for Petitioners.

Shokat Hayat Alizai, Deputy Director SECP present in person.

Date of hearing: 21st March, 2012.

2013 C L D 88

[Sindh]

Before Irfan Saadat Khan, J

HABIB METROPOLITAN BANK LTD.---Plaintiff

Versus

Mian ABDUL JABBAR GIHLLIN and another---Defendants

Suit No.B-67 of 2009, decided on 5th November, 2012.

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

----S. 9---Suit for recovery of loan amount---Suit plaint signed by attorney, whose power of attorney was duly signed by directors of a Bank, which was subsequently taken over by plaintiff-Bank with permission and under rules and regulations of State Bank of Pakistan---Competency---Suit was, held, to have been instituted by competent person.

Messrs Saudi Pak Commercial Bank Ltd. v. Messrs Marvi Agrochem (Pvt.) Ltd. and 9 others 2007 CLD 1734 distinguished.

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

----Ss. 9 & 10---Electronic Transaction Ordinance (LI of 2002), S.3---Suit for recovery of loan amount by Bank---Application for leave to defend---Electronically generated statement of accounts filed by Bank along with plaint---Defendant's plea that such statement had no legal value due to absence of signature of officer and seal of Bank thereon---Validity---Electronically generated documents would not require any signature by virtue of Electronic Transaction Ordinance, 2002---Such statement of accounts containing complete picture of loan facility obtained by defendant would not be considered to be a document having no legal authenticity---Non-denial of obtaining of loan facility by defendant established execution of documents mentioned in plaint and his failure to discharge his liability in accordance with agreed terms--- Defendant while filing leave application had failed to comply with provisions of Ss.10(3), 10(4) & 10(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Grant of leave to defend suit could not be considered a matter of routine or right, unless the suit involved substantial question of fact and law--- Defendant had neither denied execution of loan documents nor complied with mandatory requirement of law, thus, was not entitled to leave to defend---High Court dismissed leave application and suit was decreed resultantly.

National Bank of Pakistan v. Al-Asif Sugar Mills Ltd. 2001 MLD 1317; Sahib Deed v. Inam and 4 others PLD 1985 Quetta 69; Shafiq Ahmad v. Mirza Muhammad Anwar Beg PLD 1968 Lah. 367; National Bank of Pakistan v. Messrs Mujahid Nawaz Cotton Ginners 2007 CLD 678; Bankers Equity Ltd. and 5 others v. Messrs Bentonite Pakistan Ltd. 2010 CLD 651; Bankers Equity Ltd. v. Messrs Bentonite Pakistan Ltd. 2003 CLD 931; 2011 CLD 408; Bolan Bank Ltd. v. Baig Textile Mills (Pvt.) Ltd. 2002 CLD 557; Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Ltd. Islamabad v. Mohib Textile Mills Ltd. Lahore and 3 others 2002 CLD 1170; National Development Finance Corporation v. Spinning Machinery Company of Pakistan Ltd. 2002 CLD 53; Industrial Development Bank of Pakistan v. N.T.N. (Pvt.) Ltd. 2002 CLD 369; Allied Bank of Pakistan Ltd. v. Mohib Fabric Industries Ltd. 2002 CLD 716; International Finance Corporation v. Sarah Textiles Ltd. and 3 others 2009 CLD 761; Industrial Development Bank of Pakistan, Karachi v. Messrs ZAMCO (Pvt.) Ltd. 2007 CLD 217; National Bank of Pakistan v. Messrs A.I. Brothers (Private) Ltd. and others 2007 CLD 1356; Hajji Ali Khan and Company, Abbotabad and 8 others v. Messrs Allied Bank of Pakistan Ltd., Abbotabad PLD 1995 SC 362; United Bank Ltd. v. Ch. Ghulam Hussain 1998 CLC 16; National Bank of Pakistan v. EFFEF Industries Ltd. and 11 others 2002 CLD 1431; United Bank Ltd. v. Progas Pakistan Ltd. 2010 CLD 828; NIB Bank Ltd. v. Taha Spinning-Mills Ltd. and others 2010 CLD 635; Habib Bank Ltd. v. Paragon Industries (Pvt.) Ltd. 2009 CLD 1346; H.B.L. v. Crescent Softwear Products (Pvt.) Ltd. 2009 CLD 412; Faysal Bank Ltd. v. Genertech Pakistan Ltd. and 6 others 2009 CLD 856; Habib Bank Ltd. v. Messrs SABCOS (Pvt.) 2006 CLD 244; Shahid Farooq Sheikh v. Allied Bank of Pakistan Ltd. 2005 CLD 1489; Zeeshan Energy Ltd. and 2 others v. Faisal Bank Ltd. 2004 CLD 1741; Bank of Khyber v. Messrs Spencer Distribution Ltd. and 14 others 2003 CLD 1406; Allied Bank Ltd. v. Sholl International (Pvt.) Ltd. (Unreported judgment in the case bearing Suit No.B-25 of 2008); Imtiaz Ahmad v. Ghulam Ali and others PLD 1963 SC 382; Manager, Jammu and Kashmir, State Property in Pakistan v. Khuda Yar and another PLD 1975 SC 678; Ch. Akbar Ali v. Secretary, Ministry of Defence, Rawalpindi and another 1991 SCMR 2114; North-West Frontier Province Government, Peshawar v. Abdul Ghafoor Khan PLD 1993 SC 418; Riaz Hussain and others v. Muhammad Akbar and others 2003 SCMR 181; Mst. Arshan Bi through Mst. Fatima Bi and others v. Maula Bakhsh through Mst. Ghulam Safoor and others 2003 SCMR 318; Messrs U.B.L. v. Messrs Sindh Tech. Industries Ltd. 1998 CLC 1152; Messrs Malik and Company v. Muslim Commercial Bank 2002 CLD 1621; Muhammad Mujtaba and 5 others v. The Bank of Punjab 2004 CLD 712; Muhammad Mumtaz and 2 others v. Pakistan Industrial Credit and Investment Corporation Ltd. and another 2006 CLD 1384 and Messrs Saudi Pak Commercial Bank Ltd. v. Messrs Marvi Agrochem (Pvt.) Ltd. and 9 others 2007 CLD 1374 ref.

(c) Electronic Transaction Ordinance (LI of 2002)---

----Preamble---Electronic Transaction Ordinance, 2002---Object stated.

The Electronic Transaction Ordinance, 2002 was promulgated with the view to provide recognition and facilitation of documents, records, information, communications and transactions in electronic form etc. By virtue of this Ordinance, a legal cover has been provided to the electronic forms by categorizing that their legal recognition and admissibility etc., would not be called in question, if the same has not been attested by any witness, in case the same is in electronic form. It is observed that rapid changes have occurred in the recent years as old and conventional system of banking has been done away with to a great extent. Inspite of having conventional and old method banking system latest technology has taken over by way of introduction of electronic and digital methods.

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

----Ss. 9 & 10--- Suit for recovery of loan amount by Bank--- Application for leave to defend suit---Execution of loan documents not denied by defendant---Effect---Defendant would not be entitled to such leave.

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

----S. 10---Leave to defend suit, grant of---Scope---Grant of leave could not be considered a matter of routine or right unless the suit involved a substantial question of fact and law.

Jam Asif Mehmood for Plaintiff.

Altaf Hussain for Defendant No.1.

Bilal Aziz Khilji for Defendant No.2.

Dates of hearing: 23rd and 24th October, 2012.

2013 C L D 114

[Sindh]

Before Munib Akhtar, J

Mst. NEELOFAR SHAH and another---Petitioners

Versus

Messrs OFSPACE (PVT.) LTD. through Company Secretary and 8 others---Respondents

J.M. No.31 of 2007, decided on 5th July, 2012.

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

----Ss.9 & 290---Court---Procedure---Court, under S.9 of Companies Ordinance, 1984, follows summary procedure in all matters before it---Provisions of S.9 of Companies Ordinance, 1984, cannot absolve the court from exercising its statutory jurisdiction on the ground that matter before it involved difficult, complicated or intricate (or simply disputed) questions of fact---Disputed questions of fact, even if intricate, complicated or difficult, arising in the context of petition under S.290 of Companies Ordinance, 1984, can be taken up and decided by court.

Lahore Race Club v. Raja Khush Bakht-ur-Rehman PLD 2008 SC 707; Yousuf v. Valika Textile Mills Ltd. PLD 1964 Kar. 31; Manzoor Ahmed Bhatti and others v. Haji Noval Khan 1986 CLC 2560; Zakir Latif Ansari and another v. Pakistan Promoters Ltd. and others 1988 CLC 1541; Engro Chemical Pakistan Ltd. v. Muhammad Hussain Dawood and others 2003 CLD 293; Shah Mushtaq Ahmad v. Shoukat Soap Factory and others 1987 CLC 2079; Khurshid Ahmad Khan and another v. Pak Cycle Manufacturing Company Ltd. and others PLD 1987 Lah. 1; Salaintddin Khan v. Al-Mansoor Ltd. and others PLD 1987 Lah. 569; Muhammad Aslam Javed and another v. Malik Ijaz Ahmad and another 2003 YLR 2150; 2003 CLD 1442; Rohail Hashmi and others v. Nabeel Hashmi and others 2003 CLD 201; Scottish Co-operative Wholesale Society Ltd. v. Meyer [1958] 3 All ER 66; Shahamatullah Qureshi v. Hi-Tech Construction (Pvt.) Ltd. 2004 CLD 640; Saleh Muhammad v. Mst. Resham Bibi 1986 CLC 2561; Muhammad Suleman v. Abdul Rashid and others PLD 1987 Lah. 387 and Muhammad Mohsin Butt and others v. Muhammad Inayat Butt and others 2005 CLD 747 ref.

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

----S. 290---Application to court---Limitation---Scope---Jurisdiction under Companies Ordinance, 1984, is indisputably equitable in nature and relief can be refused on the grounds of laches.

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

----Ss. 290, 291 & 292---Case of oppression---Assets and income of company---Entitlement---Applicants claimed to be entitled to revenues and income received from the project of the company and alleged that respondents had been usurping and grabbing the same---Validity---Property, assets and income of company belonged to it alone and shareholders did not have any interest, right or title in or to the same---Property in question belonged to company in question and was its assets and it was that company which was entitled to any income derived from it; such assets regardless of whether the construction of property in question was financed entirely by applicants---Shareholders of the company, even by unanimous decision could not themselves deal directly with company's assets and income as though they were the owners thereof, even though the shareholders could ultimately be entitled to the benefit of income by way of a payout of dividend---Two things (i.e. the company's income and a dividend declared in favour of shareholders) were in law separate and distinct---Rights and obligations purportedly created in terms of agreement between the parties with regard to property in question and income to be derived from it were unenforceable in law---Even those clauses of the agreement which could have such an effect were also unenforceable---Neither of the parties could have any legal grievance against the other with regard to any alleged "breach" of agreement in question---Alleged non-implementation of agreement in question by respondents could not form the basis of or support and action by applicants under S.290 of Companies Ordinance, 1984---Applicants had made out a case of oppression within the meaning of S.290 of Companies Ordinance, 1984 and were entitled to have brought the situation to an end---High Court declined to make an order for buyout of the shares of one group by the other, as the company was a going concern and it appeared to be a profitable one---High Court in exercise of powers under Ss.290 and 291 of Companies Ordinance, 1984, issued directions that would be to the ultimate advantage and benefit of both sides---Application was disposed of accordingly.

Syed Akbar Ali v. Mamun Ali Bumask (Pvt.) Ltd. and others 2006 CLD 960; Saeeda Mahmood and another v. Anas Munir (Pvt.) Ltd. and others 2007 CLD 637; Khurshid Ahmad Khan and another v. Pak Cycle Manufacturing Company Ltd. and others PLD 1987 Lah. 1; Fareedabad Cold Storage v. Official Liquidator AIR 1978 Delhi 158; R C Abrol Company v. A R Chandia and Company AIR 1978 Delhi 167; Sha Mulchand & Co. Ltd. (In Liquidation) v. Jawahar Mills Ltd. AIR 1953 SC 98; Town Municipal Council, Athani v. The Presiding Officer, Labour Courts, Hubli and others AIR 1969 SC 1335; Kerala State Electricity Board, Trivandrum v. T.P. Kunhaliumma AIR 1977 SC 82; Saloman v. A. Saloman and Co. Ltd. [1897] AC 22; Anjum Rashid and others v. Shehzad and others 2007 CLD 1210 and in Re: Jermyn Street Turkish Baths Ltd. [1971] 3 All ER 184, 199 ref.

Abid S. Zuberi, Asghar N. Faruqui and Haseeb Jamali for Petitioners.

Rasheed A. Razvi and Tahmasp Razvi for Respondent No.1.

Agha Faisal for Respondents Nos. 2 to 4.

Arshad M. Tayebaly and Amel Khan Kansi for Respondents Nos.5 and 6.

Shehryar Qazi for Respondent No.8.

Dates of hearing: 5th, 10th, 13th, 24th 30th May, 2nd June, 3rd, 4th August, 15th December, 2011 and 10th May, 2012.

2013 C L D 180

[Sindh]

Before Mushir Alam, C.J. and Syed Muhammad Farooq Shah, J

ARY COMMUNICATION (PVT.) LTD. through Authorized Officer---Petitioner

Versus

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

Constitution Petition No.D-2534 of 2010, decided on 25th October, 2012.

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

----Ss. 19, 22, 30-A & 33---Pakistan Electronic Media Regulatory Authority (Appeal and Review) Regulation, 2008, Regln. 14---Constitution of Pakistan, Art.199---Constitutional petition---Broadcasting licence, issuance of---Discrimination---Exercise of discretion by licence granting Authority---Principle---Petitioner applied to Pakistan Electronic Media Regulatory Authority (PEMRA) for licence of landing rights of satellite television channel for transmiting religious and educational knowledge---Grievance of petitioner was that despite deposit of processing fee, the Authority had not issued required licence for the past many years---Validity---Authority in its absolute unfettered discretion, acted arbitrarily and discriminately by issuing licence to entertainment, sports, English and other television channels by ignoring channel of petitioner without any sufficient reasons and cause---Authority in pursuance of powers conferred upon it, had delayed licence to such an extent that petitioner was kept waiting for years without any fault on its part, thus Authority did not act fairly, transparently, judiciously and above any suspicion---Vested right of individual was protected by the Constitution and by fundamental rights guaranteed to citizens---Functionaries like Authority in question, which exercised statutory power were legally and constitutionally bound to discharge their functions strictly in accordance with law, otherwise an action contrary to law would not be sustainable and such Authority would expose itself for discriminatory treatment, which amounted to denial of valuable fundamental rights of people, for whose benefit such Authority had been created---Action of Authority was ultra vires, contrary to the Constitution and law, having no legal sanctity--- High Court directed the Authority to strictly follow principles of 'equity' and 'fairness' for taking decision on application submitted by petitioner for issuance of licence---Constitutional petition was allowed accordingly.

Abid Hussain Shirazi v. Secretary M/O Industries and others 2005 SCMR 1742; Dr. Tariq Nawaz and another v. Government of Pakistan through the Secretary, Ministry of Health, Government of Pakistan, Islamabad and another 2000 SCMR 1956; Messrs Arshad and Company v. Capital Development Authority, Islamabad through Chairman 2000 SCMR 1557; Sheraz Ata Ullah Khan (Minor) through his Real Maternal Uncle v. Nazir Ahmad Khan and others 1993 CLC 945; Chaudhry Shujat Hussain v. The State 1995 SCMR 1249; Abdul Razak Rathore v. The State PLD 1992 Kar. 39; Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652; Messrs Gadoon Textile Mills and 814 others v. WAPDA and others 1997 SCMR 641; Messrs Shadman Cotton Mills Limited, Rawalpindi v. Federation of Pakistan through Secretary, Ministry of Finance, Federal Secretariat, Islamabad and another 2001 CLC 385; I.A. Sharwani and others v. Government of Pakistan through Secretary, Finance Division, Islamabad and others 1991 SCMR 1041; Abdul Baqi and others v. Muhammad Akram and others PLD 2003 SC 163; Syed Kamal Shah v. Government of N.-W.F.P. 2010 SCMR 1377; Dr. Shahid Masood and others v. Federation of Pakistan and others 2010 SCMR 1849; G Sambasiva Rao v. APSRTC (1997) 1 An LT 219 at 230 and Muhammad Bashir v. Abdul Karim PLD 2004 SC 271 ref.

Asim Mansoor Khan for Petitioner.

Kashif Hanif for Respondent No.2.

Date of hearing: 29th August, 2012.

2013 C L D 233

[Sindh]

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

MUHAMMAD RAMZAN KATIAR through Legal Heirs---Appellants

Versus

PAKISTAN REFINERY LTD. and another---Respondents

High Court Appeal No.231 of 1999, decided on 10th September, 2012.

Cantonments Act (II of 1924)---

----Ss. 60, 83 & 99-A---Specific Relief Act (I of 1877), Ss.42 & 54--- Law Reforms Ordinance (XII of 1972), S. 3---Octroi charges, recovery of--- Suit for declaration, injunction and recovery of money---Intra-court Appeal---Import and use of crude oil within limits of Cantonment Board---Octroi charges, recovery of---Legality---Plaintiff was contractor of Cantonment Board and collected octroi on articles imported for use, consumption or sale within the limits of Cantonment Board concerned---Defendant-company was oil refinery and denied import of crude oil from abroad and refused to pay octori on the ground that oil was supplied through underground pipelines---Validity---Octroi tax was not like toll tax so as to be imposed at entry of road or bridge but octroi tax was liable not merely on import or entry of goods in octroi limits but also on its sale, consumption or use within such limits---Mere import of crude oil was not of any significance so as to attract levy of octroi---Entry of crude oil within octroi limits was admitted, therefore, it would be immaterial if the same was brought through underground pipelines or by road etc.---Defendant availed remedy provided under S.99-A of Cantonments Act, 1924, but without success due to retrospection of notification in question, which was since issued in favour of defendant under the provisions of same statute, hence its applicability could not be denied by defendant--- Octroi duty imposed on import, use etc. of crude/mineral oil, mentioned in duly approved octroi schedule issued under notification dated 10-9-1976, with previous sanction of Federal Government and also published in official gazette in compliance of S.60 and other sections of Cantonments Act, 1924, could not be termed to be ultra vires of the Constitution in any way---Division Bench of High Court directed defendant to pay octroi duty on import and use of crude oil in its refinery within octroi limits of Cantonment Board to plaintiff for period of his octroi--- Division Bench of High Court reversed findings of Judge in Chambers of High Court on material issues---Appeal was allowed accordingly.

Mst. Nargis Moeen and another v. Government of Pakistan through Secretary Defence, Islamabad and another PLD 2003 Lah. 730; Bela Automatic Ltd. v. KMC and 2 others PLD 1999 Kar. 410; Messrs Universal Merchants v. Commissioner of Karachi and 2 others 1980 CLC 704; Municipal Committee Multan v. Burmah Shell Storage and Distributing Co. of Pakistan Ltd. and another PLD 1976 Lah. 726; Municipal Corporation, Faisalabad v. Atta Muhammad and others 1990 SCMR 84; Messrs Anwar Khan Mahboob Co. v. The State of Bombay and others AIR 1961 SC 213; Burmah Shell Oil Storage and Distributing Co. of India Ltd. Belgaum v. Belgaum Borough Municipality, Belgaum AIR 1963 SC 906; Burshane (Pakistan) Ltd.'s case PLD 1983 Kar. 517; C.E.O. and another v. Burshane (Pak.) Ltd. 1986 SCMR 1308; AIR 1947 F.C. 14; Chief Officer, Corporation City of Lahore v. The Punjab Flour and General Mills Co. Ltd. Lahore (Regular Second Appeal No.1744 of 1943; Messrs Saadat Factory v. The Chairman, Municipal Committee, Dera Gazi Khan (Writ Petition No.42 of 1961); Jafarabad Municipality v. Kathiawar Industries Ltd. AIR 1969 Gujarat 344; Kathiawar Industries Ltd. v. Jaffrabad Municipality AIR 1979 SC 1721; Chief Administrator Auqaf v. Mst. Amna Bibi 2008 SCMR 1717; Ashraf Sugar Mills v. Federation of Pakistan and others 1993 CLC 910; Collector of Central Excise and Sales Tax Lahore v. Messrs Abdullah Sugar Mills Ltd. 2008 PTD 894; M.A. Rashid Khan and 2 others v. Azad Government and others PLD 1981 AJ&K 30 and Sheikh Fazal Ahmad v. Raja Ziaullah Khan and another PLD 1964 SC 494 ref.

Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652 distinguished.

Bilal Khilji for Appellants.

Muhammad Chunai and Tahir Mahmood Parihar for Respondent No.1.

None present for Respondent No.2.

Dates of hearing: 29th September, 2010 and 27th August, 2012.

2013 C L D 276

[Sindh]

Before Mushir Alam, C.J. and Syed Muhammad Farooq Shah, J

Mst. ISHRAT JEHAN and another----Appellants

Versus

Syed ANIS-UR-REHMAN and another----Respondents

High Court Appeal No.149 of 2008, decided on 12th October, 2012.

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

----O. IX, Rr. 6, 7 & O. VIII, R. 1--- Order of ex parte proceedings against defendant--- Filing of written statement by defendant without making application for recalling ex parte order and also remaining absent thereafter---Validity---No order for recalling ex parte order had been passed, thus, such written statement would have no legal sanctity.

Shah Bashir Alim's case 1997 MLD 2308 rel.

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

----O. XX, R. 5---Judgment of Trial Court not containing findings on issues framed---Validity---Such judgment would not be sustainable.

(c) Tort---

----Negligence---Negligence due to one's own fault---Effect---Each person, for being bound to exercise all reasonable care, would be responsible for his own fault.

(d) Tort---

----Negligence---Burden of proof---Scope---Initial onus to prove negligence would lie on plaintiff---Where evidence adduced by plaintiff found to be sufficient to call defendant to reply, then defendant would be bound to lay material facts before court---Onus of proving negligence by plaintiff would stand discharged in case of failure of defendant to do so.

(e) Tort---

----Negligence---Negligence of manufacturer and builder---Effect---Manufacturer would be liable to a person injured by his negligence---Builder of defective premises might be liable in negligence to a person having suffered injury thereby.

(1977) 2 All ER 492 (HL) and Shah Bashir Alam and 2 others v. Messrs Arokey Chemical Industries Limited 1997 MLD 2308 rel.

(f) Administration of justice---

----Law leans towards adjudication on merits---Rules of procedure being meant to advance justice and preserve rights of litigants would not be interpreted in a way as to hamper administration of justice.

Police Department v. Javed Israr 1992 SCMR 1009 rel.

Farrukh Usmani for Appellants.

Abdul Wajid Wyne for Respondent No.1.

Muhammad Ishaque Memon for Respondent No.2.

Date of hearing: 14th September, 2012.

2013 C L D 291

[Sindh]

Before Muhammad Tasnim, J

CUMMINS SALES AND SERVICE (PAKISTAN) LIMITED through Authorized Signatory---Plaintiff

Versus

CUMMINS MIDDLE EAST FZE through Chief Executive and 3 others---Defendants

Suit No.1804 of 2009, decided on 7th September, 2012.

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

----S. 6---Constitution of Pakistan, Art. 264---Ordinance, expiry of---Pending cases---Effect---Once an Ordinance expires, the law which was repealed by that Ordinance takes the field---Expiry of Ordinance during pendency of case does not affect pending application and the same remains maintainable.

Pir Sabir Shah v. Shad Muhammad Khan PLD 1995 SC 66; Federation of Pakistan v. M. Nawaz Khokhar PLD 2000 SC 26; State v. Muhammad Sharif PLD 1960 Lah. 236; The Sargodha Bhera Bus Service Limited v. The Province of West Pakistan PLD 1959 SC 127 and Air League of PIAC Employees v. Federation of Pakistan M/O Labour and Manpower Division Islamabad and others 2011 SCMR 1254 rel.

(b) Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Ordinance (XXXIII of 2009)---

----Ss. 3 & 4---Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act (XVII of 2011), Ss. 3 & 4---Specific Relief Act (I of 1877), S. 54---Civil Procedure Code (V of 1908), S.151---Suit for injunction--- Enforcement of arbitration agreements---Stay of proceedings---Null and void agreement---Determination---Defendants sought stay of proceedings before Court referring the same to arbitration in terms of arbitration mechanism agreed between the parties---Validity---Pre-condition for refusing stay of proceedings was that arbitration agreement was null and void, inoperative or incapable of being performed---Words null and void, inoperative or incapable of being performed should be read keeping in view rule of ejesdem generis i.e. when a particular word pertaining to class, category or genus or followed by general words, the general words were construed as limited to things of the same kind as those specified---plaintiff failed to point out from record that arbitration agreement was null and void, inoperative or incapable of being performed---Application for stay of suit could not be rejected as arbitration agreement could be refused to a party to arbitration agreement unless court had found the same as null and void, inoperative or incapable of being performed---Plaintiff failed to bring case within the exceptions provided under S.4(2) of Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Ordinance, 2009 or Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, so as to refuse to stay the proceedings---High Court directed to refer disputes between parties to arbitration in terms of arbitration clause stated in agreement and stayed proceedings before court---Application was allowed in circumstances.

Messrs Travel Automation (Pvt.) Ltd. through Managing Director v. Abacus International (Pvt.) Ltd. through President and Chief Executive and others 2006 CLD 497; Far Eastern Impex (Pvt.) Ltd. v. Quest International Nederland BV and others 2009 CLD 153; Gas Authority of India Ltd. v. Spie Capag, S.A. and others AIR 1994 Delhi 75; Svenska Handelsbanken and others v. Messrs Indian Charge Chrome Ltd. and others ((1994) 2 Supreme Court Cases 155; A. Merdith Janes Co. Ltd. v. Crescent Board Ltd. 1999 CLC 437; R.M. Investment & Trading Co. Pvt. Limited v. Boeing Co. and others AIR 1994 SC 1136; Messrs Srivenkateswara Constructions and others v. The Union of India AIR 1974 Andhra Pradesh 278; SQN. LDR. (R.) Khurram Zaman v. Mrs. Afia Zafar and others 2008 CLD 662; Lahore Development Authority through Director General, L.D.A., Lahore v. Mohandisin-e-Masud through Managing Partner and another 2010 YLR 66; Aftab Khalil and others v. Shaukat Hussain 2008 CLC 1592; Messrs Eckhrdt & Co. Marine Gmbh v. Muhammad Hanif PLD 1993 SC 42; Bolan Beverages (Pvt.) Limited v. Pepsico. Inc. and others 2004 CLD 1530; Messrs Shakil Waqas & Co. and others v. General Manager/Marketing, Pakistan Railways and others PLD 2011 Kar. 185; Concentrate Manufacturing Company of Ireland and others v. Seven-up Bottling Company (Private) Limited and others 2002 CLD 77; Tahir Zaman v. Jin Wei (M) SDN BHD and others 2004 CLD 603; Marghub Siddiqi v. Hamid Ahmad Khan and others 1974 SCMR 519; Lahore Stock Exchange Ltd. through Managing Director and another v. Messrs Hassan Associates through Managing Partner 2010 MLD 800; Messrs Gulf Pacific Fertilizer, California, U.S.A. through Attorney v. Messrs Ali Akbar Enterprises and others 2000 MLD 1537; Zulqarnain and others v. Surbuland Khan and another 2004 SCMR 1084; Noor Ahmad v. Muhammad Shafi PLD 1969 Baghdad-ul-Jadid 17; Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon and others 1994 SCMR 2189; Metropolitan Steel Corporation Ltd. v. Macsteel International U.K. Ltd. 2006 CLD 1491; M.A. Chowdhury v. Messrs Mitsui O.S.K. Lines Ltd. and others PLD 1970 SC 373; Messrs Uzin Export and Import Enterprises for Foreign Trade v. Messrs M. Iftikhar and Company Limited 1993 SCMR 866; Messrs Danish Brothers Limited and others v. Cotton Export Corporation of Pakistan (Pvt.) Limited 1994 MLD 2227; Associated Agencies Ltd. and another v. Industrija Masina/Tractora and another PLD 1993 Kar. 459; Messrs Serulean (Pvt.) Ltd. Karachi v. Messrs Bhoja Airlines (Pvt.) Ltd. through Chairman and another 2001 YLR 3150; Island Textile Mills Ltd. Karachi v. V/O Technoexpert and another 1979 CLC 307; Port Qasim Authority, Karachi v. Al-Ghurair Group of Companies and others PLD 1997 Kar. 636; Lahore Stock Exchange Limited v. Fredrick J. Whyte Group (Pakistan) Ltd. and others PLD 1990 SC 48; Dar Okaz Printing and Publishing Limited Liability Company v. Printing Corporation of Pakistan Private Limited PLD 2003 SC 808; Haji Soomar Haji Hajjan v. Muhammad Amin Muhammad Bashir Ltd. 1981 SCMR 129; S. Ghous Mohiuddin v. Messrs National Refinery Ltd. PLD 1968 Kar. 652; Izhar Alam Farooqi, Advocate v. Sheikh Abdul Sattar Lasi and others 2008 SCMR 240; Wak Orient Power and Light Limited v. Westinghouse Electric Corporation and others 2002 SCMR 1954; Messrs Muslim Commercial Bank Limited v. Tahir Edible Oil (Pvt.) Ltd. and others 2003 CLC 416; North-West Frontier Province Government, Peshawar through Collector, Abbottabad and another PLD 1993 SC 418; International Multi Leasing Company v. Capital Assets Leasing Corporation Limited and another 2004 CLD 1; Messrs Eckhardt & Co., Marine Gmbh v. Muhammad Hanif PLD 1993 SC 42 and Far Eastern Impex (Pvt.) Limited, Karachi v. Quest International Nederland BV and others 2009 YLR 334 ref.

Moeen Qamar for plaintiff.

Sajid Zahid and Mansoor A. Shaikh for Defendants Nos.1, 2 and 4.

Ghulam Abbass Pishori for Defendant No.5.

Dates of hearing: 6th, 16th and 28th August, 2012.

2013 C L D 330

[Sindh]

Before Sajjad Ali Shah, J

TILLOTTS PHARMA AG through Authorized Signatory---Plaintiff

Versus

GETZ PHARMA (PRIVATE) LIMITED through Authorized Officer/Director/Secretary---Defendant

Suits Nos. 1453 and 1468 of 2011, decided on 24th July, 2012.

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

----S. 90---Acts of agent or representatives---Limitation---Once it is established that proprietor of trade mark was aware that his agent, representative or importer has filed application for registration of his mark, be that after filing of application for registration or trade mark or actual registration of the trade mark, period of limitation prescribed under S.90(4) of Trade Marks Ordinance, 2001, of three years for availing remedy under S.90(1) of Trade Marks Ordinance, 2011, commences.

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

----Ss. 67, 86 & 90(2)--- Specific Releif Act (I of 1877), S.54---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Interim injunction, grant of---Unfair competition and infringement of trade mark---Plaintiff claimed to be proprietor of trade mark ASACOL and sought injunction against defendant from restraining him to use trade mark in question---Validity---Defendant till date never used trade mark ASACOL in its own right by introducing any product of their own---Defendant in terms of distribution agreement, whereby it was importing ASACOL from plaintiff, had acknowledged and agreed that it would not acquire any right in respect of any trade names or trade marks of plaintiff or its affiliates---Defendant failed to justify its actions in terms of S.90(2) of Trade Marks Ordinance, 2001---Plaintiff made out prima facie case, balance of inconvenience was also in favour of plaintiff and no irreparable loss would be caused to defendant, in case defendant was restrained from using trade mark ASACOL--- Application was allowed accordingly.

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; Kabushiki Kaisha Toshiba (also trading as Toshiba Corporation) v. Ch. Muhammad Altaf (trading as Murad Industries (Regd.) and another PLD 1991 SC 27 and National Detergents Limited v. Nirma Chemicals Works and another 1992 MLD 2357 distinguished.

National Detergents Ltd. v. MOD International (Pvt.) Ltd. 1993 MLD 590; Ashok Kumar Sahu v. Union of India and others AIR 2006 SC 3324; Messrs Power Control Appliances and others v. Sumeet Machines Pvt. Ltd. and Sumeet Research and Holdings v. Sumeet Machines and another 1994(2) Supreme Court Cases 448; Al-Karam Textile Mills (Pvt.) Limited v. Mehtab Chawla and 3 others 2007 CLD 966; Getz Pharma (Pvt.) Ltd. v. Farooq & Sons 2007 CLD 957; Lipha Lyonnaise Industrielle Pharmaceutique v. Registrar of Trade Marks and another 2009 CLD 1289; Bayer A.G. and another v. Macter International (Pvt.) Ltd. 2003 CLD 794; The Welcome Foundation Ltd. v. Khawar 1989 MLD 2516; Tri-Star Industries (Pvt.) Ltd. v. Sayyed Engineers (Pvt.) Ltd. 2007 CLD 802; Exide Pakistan Limited, Karachi v. Pakistan Accumulator (Pvt.) Ltd. Islamabad and 3 others 2003 CLD 1117; Bolan Beverages (Pvt.) Limited v. Pepsico Inc. and 4 others PLD 2004 SC 860 and Tahir Zaman v. Jin Wei (M) SDN BHD and others 2004 CLD 603 ref.

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

----Ss. 67, 86 & 90(2)--- Specific Relief Act (I of 1877), S.54---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Suit for injunction---Interim injunction, grant of---Unfair competition and infringement of trade mark---Plaintiff sought injunction against defendant from restraining him to use trade mark MASACOL registered in its name of the plea of deception and similarity---Validity---Trade mark MASACOL was a registered trade mark of defendant and plaintiff without seeking declaration or its cancellation was simply seeking injunction---Plaintiff could not place any material on record to deny claim of defendant that after import of last consignment in year, 2009, Government had declined permission to grant license for import of product of plaintiff which had not been available in Pakistan for the last two years---Product MASACOL was being sold in market since middle of year, 2010 and there was no justification on record as to why plaintiff had brought action against defendant after a delay of almost 18 months, especially when plaintiff claimed that defendant was his agent in Pakistan for sale of his product which was not imported after expiry of its license in year, 2009---Claim of plaintiff as to infringement of their trade mark by defendant through its registered trade mark MASACOL, on the plea of similarity could not be determined unless plaintiff would succeed in rectifying register of trade marks in respect of its product and till then plaintiff was not entitled to injunction---Balance of inconvenience tilted in favour of defendant on account of admitted position that plaintiff's product was out of market and defendant's claim to have captured sizable market was in record---High Court declined to issue interim injunction in favour of plaintiff and against defendant from selling product under the name of MASACOL---Application was dismissed in circumstances.

Messrs Mehran Gheee Mills (Pvt.) Ltd. and others v. Messrs Chiltan Ghee Mill (Pvt.) Ltd. and others 2001 SCMR 967; The Wellcome Foundation Limited v. Messrs Karachi Chemical Industries (Private) Limited 2000 YLR 1376; Muhammad Saeed Mughal v. Messrs National Aviation Services (Pvt.) Limited 2001 YLR 2004 and MOD International (Pvt.) Ltd. v. National Detergents Ltd. 1993 MLD 605 distinguished.

National Detergents Ltd. v. MOD International (Pvt.) Ltd. 1993 MLD 590; Ashok Kumar Sahu v. Union of India and others AIR 2006 SC 3324; Messrs Power Control Appliances and others v. Sumeet Machines Pvt. Ltd. and Sumeet Research and Holdings v. Sumeet Machines and another 1994(2) Supreme Court Cases 448; Al-Karam Textile Mills (Pvt.) Limited v. Mehtab Chawla and 3 others 2007 CLD 966; Getz Pharma (Pvt.) Ltd. v. Farooq & Sons 2007 CLD 957; Lipha Lyonnaise Industrielle Pharmaceutique v. Registrar of Trade Marks and another 2009 CLD 1289; Bayer A.G. and another v. Macter International (Pvt.) Ltd. 2003 CLD 794; The Welcome Foundation Ltd. v. Khawar 1989 MLD 2516; Tri-Star Industries (Pvt.) Ltd. v. Sayyed Engineers (Pvt.) Ltd. 2007 CLD 802; Exide Pakistan Limited, Karachi v. Pakistan Accumulator (Pvt.) Ltd. Islamabad and 3 others 2003 CLD 1117; Bolan Beverages (Pvt.) Limited v. Pepsico Inc. and 4 others PLD 2004 SC 860 and Tahir Zaman v. Jin Wei (M) SDN BHD and others 2004 CLD 603 ref.

Moen Qamar for Plaintiff.

Faisal Siddiqui for Defendant.

Date of hearing: 6th June, 2012.

2013 C L D 362

[Sindh]

Before Faisal Arab and Nadeem Akhtar, JJ

F.T. SELNES---Appellant

Versus

MEGA INTERNATIONAL COMMERCIAL BANK and 3 others---Respondents

Admiralty Appeal No. 5 of 2011, decided on 30th July, 2012.

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

----Ss. 3(2)(c) & 6---"Claim in respondentia" and "claim by mortgage"---Distinguished---Claim in respondentia does not include claim by way of general mortgage or charge on ship itself--- Provisions of S.6 of Admiralty Jurisdiction of High Courts Ordinance, 1980, have no application in respect of a mortgage which, not being a "claim in respondentia", is not a maritime lien---Suit based on a claim that falls under S.3(2)(c) of Admiralty Jurisdiction of High Courts Ordinance, 1980, cannot be regarded as barred by limitation on account of S.6 of Admiralty Jurisdiction of High Courts Ordinance, 1980.

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

----S. 3(2)---Admiralty Jurisdiction of High Court---Terms "bottomry" and "respondentia"---Distinction---When a loan is obtained by offering ship itself or cargo/freight etc. thereon as security, it is called "bottomry"---Whereas loan obtained by using only freight/cargo etc. on ship as security is called "respondentia".

Words and Phrases (Permanent Edition) and Maritime and Shipping Dictionary (By Agha Faquir Muhammad, 2006) rel.

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

----S. 3(2)---Admiralty Jurisdiction of High Court---Action in rem---Scope---Whenever a loan is obtained for any purpose against mortgage of ship, the transaction is of "bottomry"; in such event, action in rem, is enforceable against the ship under Admiralty Jurisdiction under S.3(2)(q) of Admiralty Jurisdiction of High Courts Ordinance, 1980.

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

----Ss. 3(2)(c), 3(2)(q), 3(5)(c), 4(2), 4(3) & 6--- Maritime claim---Limitation---Suit under Admiralty jurisdiction of High Court was filed by bank against vessel and its owners, seeking recovery of outstanding dues and claims from defendants---High Court directed to arrest the vessel and detain it till all outstanding dues and claims were recovered---Plea raised by defendants was that suit was barred by limitation---Validity---Claim of maritime lienee was superior than those of a mortgagee, as latter's claim was always subject to satisfaction of maritime lien and that mortgage could not be equated with maritime lien---Maritime lien and mortgage were distinct and unrelated right having altogether different privileges, rights and liabilities of maritime lienee and mortgagee---Single Judge of High Court was right in holding that claim of bank in suit based on mortgage was not that of maritime lien and as such was not hit by S.6 of Admiralty Jurisdiction of High Courts Ordinance, 1980---Claim of bank in suit was a claim in rem against defendant vessel under Ss.3(2)(c), 3(2)(q), 3(5)(c), 4(2) and 4(3) of Admiralty Jurisdiction of High Courts Ordinance, 1980, and suit was maintainable under S.6 of Admiralty Jurisdiction of High Courts Ordinance, 1980, as well as under the principle of lex fori---Claim/charge of bank as mortgagee of vessel was not that of a maritime lien as the charge of bank/mortgagee had arisen solely by virtue of mortgage agreement, whereas charge of maritime lienee was to arise by operation of law---Suit filed by bank was not barred by limitation as S.6 of Admiralty Jurisdiction of High Courts Ordinance, 1980, was only applicable to "maritime lien" and "or any other maritime lien" as specifically provided therein and not to "mortgage", "charge" or "claim", which were not specifically provided therein--- Division Bench of High Court in exercise of appellate jurisdiction declined to interfere in the order passed by Single Judge of High Court---Appeal was dismissed in circumstances.

Atlantic Steamer's Supply Company v. M.V. Titisee and others PLD 1993 SC 88; Hong Leong Finance Limited v. M.V. Asian Queen through Nazir High Court PLD 1991 SC 1021; Yukong Ltd. South Korean Company, Seoul, South Korea v. M.T. Eastern Navigator and 2 others PLD 2000 SC 57; Port Qasim Authority and others v. Official Assignee of Karachi and others 2007 CLD 143; Inham Refrigerator B.V. v. The Owners of "F.T. Parivash" and "Transocean Holdings Ltd." PLD 1989 Kar. 65; "Maritime Liens and Claims" by William Tetley; 2004 CLD 286; Black's Law Dictionary (Sixth Edition 1990); Messrs Sun Line Agencies Ltd. v. Vessel M.V. "Psilloritis" and 2 others 1984 CLC 1553; "Maritime Liens" by D.R. Thomas (Volume 14) and "Modern Admiralty Law" by Aleka Mandaraka-Sheppard ref.

Naeem Ahmed for Appellant.

Muhammad Ahsan Ghani Siddiqui for Respondents.

Date of hearing: 21st March, 2012.

2013 C L D 397

[Sindh]

Before Aziz-ur-Rehman, J

SECTIONS 284 TO 288 OF THE COMPANIES ORDINANCE, 1984: In the matter of

Judicial Miscellaneous Petition No.48 of 2011, decided on 24th September, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 94, 284(2), 287 & 288---Merger of companies---Scheme of arrangement---Approval---Court, powers of---Petitioners filed application for approval of scheme of arrangements for merger of companies---Validity---While exercising powers of Company Judge, correct approach was to ascertain whether statutory requirements had been complied with and to determine whether scheme of arrangement as a whole had been arrived at by majority shareholders and in actual fact it was for the benefit and in the interest of whole body of shareholders---Company Judge was to see whether scheme as such was fair and reasonable and shareholders had considered the scheme for benefit of companies and for themselves---Scheme of arrangement was manifestly reasonable and none of the creditors and/or members of petitioner companies had opposed the petition---Scheme of arrangement was apparently in the interest of members and seemed without prejudice to the rights of creditors---Filing/delivering of certified copy of order of sanctioning of the scheme before Registrar of Companies in terms of S.287(3) of Companies Ordinance, 1984, rendered requirement of notice in terms of S.94 of Companies Ordinance, 1984, irrelevant and unnecessary as filing of certified copy of the order sanctioning the scheme itself was notice---Court, under S.287 of Companies Ordinance, 1984, was invested with power to sanction/approve not only scheme of arrangements but also direct increase/enhancement in authorized share capital of a company---Petition was allowed accordingly.

Messrs Omer Iqbal Solvent (Private) Limited and another 2010 CLD 1802; Regional Director and another v. Cavin Plastics and Chemicals (P) Limited [2008] 141 Camp Cas 475 (Madras) and Saboo Leasing (P) Limited [2003] 117 Camp Cas 728 Andra Pardesh, High Court ref.

Taimur Ali Mirza for Petitioners.

Waqas Asad Shaikh, Assistant Director Law, SECP.

Dates of hearing: 18th August and 6th September, 2012.

2013 C L D 423

[Sindh]

Before Mushir Alam, C.J. and Aftab Ahmed Gorar, J

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

Versus

STANDARD CHARTERED BANK (PAKISTAN) LIMITED---Respondent

Spl. H.C.A. No.162 of 2011, decided on 28th June, 2012.

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

----S. 10---Leave to defend the suit---Scope---Obtaining leave to defend is sine qua non or condition precedent to defend banking suit---Defendant is obligated to obtain leave to defend and without obtaining leave, Financial Institutions (Recovery of Finances) Ordinance, 2001, does not permit defaulting defendant to contest claim set up in banking suit.

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

----S. 10--- Application for leave to defend the suit---Dismissal for non-prosecution---Where defendant despite ample opportunity, fails and or neglects to appear and satisfy court that substantial question of law and fact have been raised in leave to defend application that necessitate recording of evidence, in default of his doing so, Banking Court in terms of S.10(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001, read with provisions of Civil Procedure Code, 1908, may in such situation dismiss the application for non-prosecution and or ignore the same---Result in either of eventuality is same and by virtue of deeming clause, allegation of fact in plaint deems to be admitted and Banking Court may pass decree in favour of plaintiff on the basis thereof or such other material as Banking Court may require in the interests of justice.

Sahara Trading International (Pvt.) Ltd. v. Bank Alfalah 2004 CLD 1522 rel.

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

----S. 10---Application for leave to defend the suit---Dismissal for non-prosecution---Mark up, calculation of---Appointment of Local Commissioner---Application for leave to defend the suit filed by defendants was dismissed by Banking Court for non-prosecution---Validity---Defendants filed leave to defend application but neglected, failed and defaulted to purse leave application, this failed to obtain leave within contemplation of S.10(1) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Despite several and last opportunity given, consequently the application was dismissed and suit on the basis of facts pleaded and material placed along with plaint, was considered and suit was decreed---Defendants were not able to make out any case for interference and High Court declined to take any exception to judgment and decree passed by Banking Court as regard principal amount---High Court appointed Local Commission to calculate mark up on outstanding principal amount in accordance with finance agreement for subject facility---Appeal was dismissed accordingly.

Rose Incorporate v. Bolan Bank Ltd. 2002 CLD 598; Messrs Noor Flour Mills v. Judge Banking Court Balochistan, Quetta and another 2011 CLD 1263; Abid Aziz Khan v. Bank of Punjab 2007 CLD 997; Apolo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Asim Hussain Qadri v. Deuteche Bank 2006 CLD 1129 and Nasim Nizami v. Habib Bank Ltd. 2006 CLD 1213 ref.

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

----Preamble---Object, purpose and scope---Scheme of Financial Institutions (Recovery of Finances) Ordinance, 2001, a special enactment is to prove summary procedure and speedy remedy for recovery of outstanding finance and enforcement of obligation and to avoid lengthy litigation under general provisions of law.

Bilal A. Khawaja for Appellants.

Ijaz Ahmed for Respondent.

Date of hearing: 28th June, 2012.

2013 C L D 439

[Sindh]

Before Munib Akhtar, J

MEEZAN BANK LIMITED---Plaintiff

Versus

WAPDA FIRST SUKUK COMPANY LIMITED through Chief Executive Officer and 2 others---Defendants

Suit No.B-187 of 2009, decided on 31st May, 2012.

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

----Ss 2(a), 2(c), 10---Suit for recovery---"Provider of finance"--- Financial Institution--- Scope--- Plaintiff had acquired "Sukuk" certificates issued by the defendants---Said "Sukuk" certificates had been originally allotted to another institution and were subsequently traded in the financial market and the plaintiff acquired the said "Sukuk" certificates in good faith---When the original allottee did not receive the "rental payment" against said certificates; it contacted the defendants and contended that it had never transferred said "Sukuk" certificates---Plaintiff's title to the certificates, therefore, led back to an elaborate swindle---Plaintiff contended that the transaction embodied in the "Sukuk" certificates was "finance" within meaning of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and the defendants, who had issued the said certificates, were "customers" within the meaning of the Ordinance, and therefore the suit for recovery was maintainable---Validity---Question to be determined was whether the plaintiff on acquisition of said "Sukuk" certificates became a financial institution that had provided finance to the defendants within the meaning of the Financial Institutions (Recovery of Finances) Ordinance, 2001; there was a distinction to be drawn between a person who was a provider of finance and someone who was a holder of debt--- Provider of finance, if it was financial institution, as defined in S.2(a) of the Ordinance, was entitled to bring a suit under the Ordinance but a mere holder of debt, however, even if the same was a financial institution, may or may not be able to do so---Every provider of finance within the meaning of the Ordinance was also a holder of debt, but every holder of debt was not necessarily a provider of finance within the meaning of the Ordinance ----For the Financial Institutions (Recovery of Finances) Ordinance, 2001 to apply it was crucial that the finance should originally have been provided by the financial institution----Crucial element in the definition of "customer" was the origination of the finance that was being sued upon and whether or not it was extended by a financial institution---Even if the finance was held at the time of default by a financial institution, it was merely a holder of debt and was therefore, in such capacity, not entitled to bring a suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Suit being not maintainable, was dismissed, in circumstances.

Ijaz Ahmed and Aijaz Shirazi for Plaintiff.

Abid Aziz Sheikh for Defendants Nos.1 and 2.

Dates of hearing: 20th September, 18th October, 17th November, 14th December, 21st December of 2011 and 24th May of 2012.

2013 C L D 456

[Sindh]

Before Maqbool Baqar, J

Mst. SHAMIM AKHTER---Plaintiff

Versus

MUHAMMAD HANIF QURESHI---Defendant

Suit No.1637 of 2007, decided on 9th August, 2012.

Malacious prosecution---

----Suit for damages---Pre-conditions---Criminal court, judgment of---Plaintiff claimed to face humiliation, defamation and also sustained mental anguish and also suffered physically as well, due to registration of F.I.R. against her, although she did not face any trial---Effect---For maintaining suit for malicious prosecution, it was absolutely necessary that plaintiff should have been prosecuted by defendant---Even in a case where police prepared a charge sheet against plaintiff but did not send him up for trial, such person could not be said to have been prosecuted, so also where police had arrested a person on complaint of somebody but itself let him off on bail and subsequently that person was discharged on submission of final report, there was no prosecution as to find action of malicious prosecution---Merely setting law in motion by making appeal to some person clothed with judicial authority in regard to any matter or merely giving information to police which induced the latter to launch investigation would not constitute prosecution---In an action for damages on account of malicious prosecution, judgment of criminal court was not admissible in evidence except for the purpose of finding out whether or not decision in criminal case was in favour of plaintiff---Not only that Judgment of criminal court had to be ignored altogether but it could not be relied upon as conclusive for deciding civil suit for malicious prosecution---Civil court had to go into the matter on the basis of evidence adduced before it in civil suit independently of the view expressed by criminal court---Observations of criminal court or reasons on which acquittal was based was not to be accepted as conclusive---Plaintiff failed to make out a case of damages against defendant---Suit was dismissed in circumstances.

Plaintiff in person.

Nemo for Defendant.

Dates of hearing: 16th September, 2nd October, 9th October, 22nd October and 25th November, 2009.

2013 C L D 463

[Sindh]

Before Mushir Alam, C.J. and Muhammad Shafi Siddiqui, J

Mst. NOOR KHATOON and 3 others---Appellants

Versus

Messrs HABIB BANK LTD. and another---Respondents

First Appeal No. 50 of 2012, decided on 21st December, 2012.

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

----O.II, R.2---Omitting of claim---Effect---If appellant omits to sue or relinquish any portion of his rights, entitlements and claims, he is precluded from reagitating such claim or grounds in subsequent proceedings or appeal.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, R.89---Execution of decree---Setting aside of sale---Principle---Act of court---Banking Court disposed of all applications while confirming auction proceedings in favour of auction purchaser and claim of objection petitioner was misconceived---Effect---Inadvertence, mistake, error or irregularity on the part of court could not take away rights of auction purchaser which accrued in his favour when he deposited bid amount as provided under law---Both applications under O.XXI, Rule 89, C.P.C. were filed without substantial compliance of O.XXI, Rule 89(1)(a) and (b), C.P.C. and it could be considered as if no such applications had been preferred---High Court declined to interfere in the order passed by Banking Court, whereby objections petitions were dismissed and sale was confirmed in favour of auction purchaser---Appeal was dismissed in circumstances.

Hudaybia Textile Mills Ltd. v. Allied Bank of Pakistan PLD 1987 SC 512; United Bank Limited v. Messrs A.Z. Hashmi (Pvt.) Limited 2000 CLC 1438; Tribhovandas v. Ratilal AIR 1968 SC 372; Unicom Enterprises v. Banking Court No. 5 2004 CLD 1452 and Lutufr Rahman v. Mst. Tahera Khatun and others PLD 1961 Dacca 303 ref.

Muhammad Yaseen Azad for Appellants.

Nemo for Respondent No.1.

Ms. Sana Akram Minhas for Respondent No.2.

Date of hearing: 4th December, 2012.

2013 C L D 488

[Sindh]

Before Sajjad Ali Shah and Riazat Ali Sahar, JJ

YAWER KADIR---Appellant

Versus

BANKING COURT NO.V, PAKISTAN SECRETARIAT, KARACHI and 3 others---Respondents

First Appeal No.81 of 2012, decided on 6th November, 2012.

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

----Ss. 19 & 15---Civil Procedure Code (V of 1908), O.XXI, Rr. 84 & 85---Sale of property in execution of decree---Power of Nazir or Commissioner appointed by court to accept or reject any bid---Time for deposit of balance sale price by highest bidder, commencement of---Scope.

The procedure prescribed for public sale under the Code of Civil Procedure is that the bidder after having been declared purchaser by the officer conducting sale under Order XXI, Rule 84, C.P.C. has to deposit 25% of the offered amount and thereafter in the same breath he is granted under Rule 85 fifteen days time for deposit of balance sale price. The Court sales are normally conducted by the Nazir or Commissioner appointed by the Court, who has no authority whatsoever to either accept or reject any bid, his function is only to place the list of the bidders, the amount offered by such bidder before the court by pointing out the highest bidder. Once the sale report is placed before the court, then in terms of Order XXI, Rule 84, C.P.C. the court declares the highest bidder and directs for payment of balance sale price and for this reason time for deposit of balance sale price does not commence from the day Nazir declares a bidder highest in order, but such time commences once the court accepts any of the bids.

The order accepting the bid or declaring a bidder "purchaser" must be unequivocal and specific leaving no doubt as to the status of highest bidder and of course should reflect application of mind.

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

----Ss. 19 & 15---Civil Procedure Code (V of 1908), O.XXI, Rr.89, 90 & 91---Sale of property in execution of decree---Confirmation of sale by court before expiry of period provided by law to challenge such sale---Effect---Court in such case would become functus officio to grant relief under O.XXI, Rr. 89, 90 & 91, C.P.C.---Principles.

Notwithstanding the procedure adopted by the court for the public sale of a property, unless an application under Order XXI, Rules 89, 90 & 91, C.P.C. is dismissed earlier, the confirmation of sale before the expiry of period provided by law to challenge such sale, gives an inference that the sale was confirmed and made absolute in order to render the court functus officio and to prevent relief(s) under Order XXI, Rules, 89, 90 & 91 of the Code of Civil Procedure.

Confirmation of sale on the very day when the bid of the highest bidder is accepted or even before expiry of the period provided for preferring an application to set aside the sale, gives an inference that the sale was confirmed and made absolute in order to render the court functus officio and to prevent relief(s) under Order XXI, Rules 89, 90 & 91 of the Code of Civil Procedure.

Afzal Masood Butt v. Banking Court No.2, Lahore 2005 CLD 967; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993; Mst. Asma Zafarul Hassan v. Messrs United Bank Limited 1981 SCMR 108 and Messrs Ashraf Agro and others v. HBL 2008 CLD 449 ref.

Gauri Ram v. Jaishi Ram AIR (37) 1950 Hamachal Pardesh 1; L. Rajan v. Muthusami Naidu AIR 1981 Madras 285 and Pathummakutty v. Thekkechalil Kathiyumma AIR 1990 Karalla 286 rel.

(c) Constitution of Pakistan---

----Art. 203---Supervisory jurisdiction of High Court---Scope---High Court in exercise of such jurisdiction could correct misuse of judicial power and set record straight.

Khawaja Shamsul Islam and Mohsin Shahwani for Appellant.

Suleman Huda for Respondent No.2.

Zamir Ghumro and Malik Naeem Iqbal for Respondent No.4.

Nemo for Respondent No.3.

Irfan Haroon and Khaleeq Ahmed for Alleged Contemnors.

Date of hearing: 25th September, 2012.

2013 C L D 504

[Sindh]

Before Aqeel Ahmad Abbasi and Farooq Ali Channa, JJ

NASEEM BAZ KHAN---Appellant

Versus

UNITED BANK LIMITED through Manager and 3 others---Respondents

First Appeal No.40 of 2010, decided on 20th September, 2012.

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

----Ss. 2(c), 2(a), 7 & 9---Suit for recovery of loan was decreed against appellant---Contention of the appellant was that he had not obtained the finance facility, was neither a borrower nor guarantor and had signed all documents in the capacity of a witness only---Validity---Perusal of documents revealed that same were signed by the appellant as a witness only and was not an executing party who could be held liable in terms of the agreement, and therefore, he could not be sued under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court, under the Ordinance had jurisdiction to resolve the controversy between the financial institution and the customer with regard to any finance, whereas, in the present case, the appellant was neither a financial institution nor a customer---No liability whatsoever of the plaintiff Bank for repayment could be created or received from the appellant---Decree of the Banking Court was set aside---Appeal was allowed, in circumstances.

Sohail Muzaffar for Appellant.

Masood Shahryar for Respondent No.1.

Date of hearing: 5th September, 2012.

2013 C L D 511

[Sindh]

Before Mushir Alam, C.J. and Muhammad Shafi Siddiqui, J

AL-BARAKA BANK (PAKISTAN) LIMITED---Appellant

Versus

Raja ASHFAQ HUSSAIN---Respondent

Ist Appeal No.113 of 2011, decided on 7th December, 2012.

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

----S. 15(11)---Contract Act (IX of 1872), S.2---Civil Procedure Code (V of 1908), O.VII, R.10---Auction of mortgaged property without intervention of Banking Court---Appointment of nominee by highest bidder to make payment and complete formalities of such auction---Deposit of 15% of bid amount by nominee of highest bidder, but his failure to deposit balance 85% thereof within specified time resulted into forfeiture of such 15% amount---Suit by such nominee after four years for refund of such forfeited amount on ground that as Bank had compromised with borrower, thus, Bank was obliged to pay back 15% bid amount with profit to nominee---Maintainability---Offer of mortgaged property for sale by Bank, when respondent to by a proposal of highest bidder and was accepted by Bank, then a binding contract came into existence between the parties---Nominee's case was based on such independent contract irrespective of any provision of Financial Institutions (Recovery of Finances) Ordinance, 2001---Nominee had not disputed sale of suit property or its subsequent sale---Nominee's claim for recovery of forfeited amount of bid could not be equated with expression "dispute of sale of property" as used in S.15(11) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court had no jurisdiction to entertain the present suit---High Court returned plaint to nominee for its filing in competent court.

Muhammad Yusuf v. Mst. Kharian Bibi 1995 SCMR 784; Abdul Aziz v. Sheikh Abdur Rahim PLD 1984 SC 164; Mian Rashid Ahmad v. Syed Azeem Shah 1991 SCMR 94; Mst. Sardar Begum v. Malik Khalid Mehmood and others 1986 CLC 2342; Ameer Umar v. Additional District Judge, Dera Ghazi Khan 2010 SCMR 780 and Anwar Khan v. Fazal Manan 2010 SCMR 973 ref.

Mehr Ashiq Hussain v. Citi Bank NA 2006 CLD 167 and united Bank Limited v. Adamjee Insurance Company 1988 CLC 1608 rel.

Arshad Tayab Ali for Appellant.

Ms. Rizwana Ismail for Respondent.

Date of hearing: 22nd November, 2012.

2013 C L D 526

[Sindh]

Before Aqeel Ahmad Abbasi and Farooq Ali Channa, JJ

Messrs JAN SHER KHAN PETROLEUM SERVICE through Proprietor and another---Appellants

Versus

Messrs ALLIED BANK LIMITED---Respondent

First Appeal No.3 of 2012, decided on 11th September, 2012????????.

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

----Ss. 10 & 22---Application for leave to defend the suit---Appeal---Insurance policy, recovery from---Defendants admitted sanction of loan, execution of finance agreement and other charged documents---None of the documents executed between parties or relied upon by bank were refuted or denied by defendants---Disbursement of finance facility and its full availment was also admitted---Plea raised by defendants was that bank was under legal obligation to seek reimbursement and recovery of outstanding liabilities against defendants from insurance company and not from them keeping in view execution of insurance policy---Validity---Defendants were liable to pay their all outstanding liabilities towards claim of bank, irrespective of clause relating to insurance of goods and machinery---Insurance policy was duly signed by defendants, whereas bank was neither signatory to such insurance policy nor there was any clause in such policy, which could possibly put bank under obligation to file a claim with insurance company of any outstanding liability of defendants, in case of default---High Court declined to interfere in order passed by Banking Court, as application for leave to defend was rightly dismissed---Appeal was dismissed in circumstances.

Khaleeq Ahmed for Appellants.

Nisar Ahmed for Respondent.

Date of hearing: 24th August, 2012.

2013 C L D 534

[Sindh]

Before Aziz-ur-Rehman, J

NIB BANK LIMITED---Plaintiff

Versus

THREE STAR HOSIERY MILLS (PVT.) LTD. and 3 others---Defendants

Suit No.B-23 of 2010, decided on 5th November, 2012.

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

----Ss. 9(5) & 10(1)---Application for leave to defend, non-filing of---Effect---When defendant, despite service in terms of S.9(5) of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not come forward and file leave to defend application or otherwise fails to obtain from Banking Court, leave for defending the suit, then allegations of fact in plaint are deemed to be admitted---Resultantly, Banking Court in such or may pass a decree in favour of Bank.

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

----Ss. 3(2) & 9---Suit for recovery of bank loan---Cost of funds and liquidated damages---Principle---Application for leave to defend filed by defendant was dismissed and bank also sought recovery of cost of funds and liquidated damages---Validity---Along with finance agreement, neither 'Repayment schedule' was annexed nor in the agreement itself there was any mention of dates of installments on which it became due, and even number of installments were not mentioned---Bank was only entitled to claim 'cost of funds' from date of expiry of finance agreement---Bank was not entitled to liquidated damages in absence of any positive evidence, as the same required evidence muchless to the effect of actual loss suffered---Even fixed amount of liquidated damages could not be awarded unless quantum of actual loss was proved---Suit was decreed accordingly.

Abdul Sattar Lakhani for Plaintiff.

Nemo for Defendants.

Date of hearing: 23rd October, 2012.

2013 C L D 550

[Sindh]

Before Muhammad Shafi Siddiqui, J

Messrs SARDAR MUHAMMAD ASHRAF D. BALOCH (PVT.) LIMITED through Director and 2 others---Petitioners

Versus

NATIONAL BANK OF PAKISTAN through President and another---Respondents

Constitution Petition No.734 of 2008, decided on 7th November, 2012.

(a) Constitution of Pakistan---

----Art. 199---Contractual obligations---Indoor management, doctrine of---Constitutional jurisdiction of High Court---Scope---contractual obligations between private parties and public functionaries or disputed questions of facts could not be invoked in such jurisdiction---Doctrine of indoor management, whereby one private company sold its share to another private company without involving National Bank of Pakistan, would not be open for judicial review in Constitutional jurisdiction of High Court.

Haq Nawaz v. Zonal Chief National Bank of Pakistan 2001 MLD 1477; Mumtaz Masood's case 1994 SCMR 2287; Ch. Muhammad Ismail v. Fazaldad and others PLD 1996 SC 246; NLR 1995 CLJ 574; Abdul Ghani Saeed v. National Bank of Pakistan 1983 PLC (C.S.) 41; Messrs Sandal Fibres Limited v. Government of Pakistan PLD 1982 Lah. 400 and Habib-ur-Rahman Unnar v. Government of Sindh PLD 2004 Kar. 728 ref.

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

----S. 62---Agreement of novation---Scope---Party not signatory of novation agreement would not be bound by it.

Asim Mansoor Khan for Petitioners.

Khalid Anwar, Mustafa Ali and Yousuf Naseem for Respondent No.1.

Muhammad Ashraf Mughal, D.A.-G. for Respondent No.2.

Date of hearing: 30th October, 2012.

2013 C L D 558

[Sindh]

Before Muhammad Ali Mazhar, J

BANKERS EQUITY LIMITED through Authorised Representative and 6 others---Plaintiffs

Versus

MUZAFFAR HUSSAIN and 4 others---Defendants

Suit No.B-32 of 2003, decided on 8th November, 2012.

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

----Ss. 9 & 10---Contract Act (IX of 1872), S.128---Limitation Act (IX of 1908), Art. 57---Constitution of Pakistan, Art. 10-A---Suit for recovery of loan amount surety's liability---Application for leave to defend suit by guarantor---Guarantor's pleas were that suit was time-barred; that court had granted leave to another defendant on similar ground of limitation; that statements of accounts found mentioned mark-up over mark-up and huge amount against penalties and that assets of principal company due to its winding up had been sold, but plaintiff had failed to file its claim thereagainst---Validity---Provision S.128 of Contract Act, 1872 would not affect application of statute of limitation---Point of limitation raised in the present case was a mixed question of law and fact---Such complicated questions raised by guarantor would require evidence---Wisdom and applicability of Art.10-A of the Constitution could not be ignored or overlooked in circumstances---High Court accepted the leave application unconditionally.

National Bank of Pakistan v. F.S. Aitzazuddin and 2 others PLD 1982 Kar. 577; United Bank Ltd. v. Haji Bawa Company Ltd. and 3 others 1981 CLC 89; National Bank of Pakistan v. General Tractor and Machinery Co. Ltd. 1996 CLC 79; National Commercial Bank Ltd. Karachi v. Muhammad Tufail and another PLD 1975 Kar. 671; Sreenath Roy and others v. Peary Mohan Mookerjee AIR 1917 Cal. 154; National Bank of Pakistan v. Messrs Shoaib Corporation and others 2004 CLD 631 and Messrs Shaz Packages v. Messrs Bank Alfalah Limited 2011 CLD 790 rel.

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

----S. 128---Limitation Act (IX of 1908), Art. 58---Liability of surety---Scope---Recovery of loan amount from guarantor/surety---Limitation---Provision of S.128 of Contract Act, 1872 would not affect application of statute of limitation---Right of action against guarantor would generally arise at the same time as right of action against principal debtor---Principles.

Under section 128 of the Contract Act, 1872 the liability of the surety is co-extensive with that of principal debtor, unless it is otherwise provided by the contract. This section is directed to defining the liability of a surety upon the terms of contract of guarantee, but it does not affect the application of the statute of limitation. The right of action against surety would generally arise at the same time as right of action against the principal debtor.

A.H. Mirza for Plaintiffs.

Naim-ur-Rehman for Defendant No.4.

Usman Hadi for Defendant No.5.

Date of hearing: 18th September, 2012.

2013 C L D 579

[Sindh]

Before Maqbool Baqar and Muhammad Shafi Siddiqui, JJ

Syed MUHAMMAD FURQAN---Applicant

Versus

The STATE---Respondent

Criminal Bail Application No.380 of 2012, decided on 18th April, 2012.

Criminal Procedure Code (V of 1898)---

----S. 497(2)---Central Depositories Act (XIX of 1997), S. 24---Securities and Exchange Ordinance (XVII of 1969), S. 16(c)---Penal Code (XLV of 1860), Ss. 409/420/109/34/477-A---Criminal breach of trust by banker, merchant or agent, cheating and dishonestly inducing delivery of property, abetment, common intention, falsification of accounts, handling book-entry securities without authority, prohibition and restriction on pledging customers' securities ---Bail, grant of---Further inquiry---Allegation against the accused [alleged director of a company (brokerage house) dealing in securities] was that he, in connivance with the co-accused and different banks, unauthorizedly and illegally, pledged shares of various clients, including those of the complainant, with the banks to secure finances for the company, and as a consequence of default committed by the company, the banks sold the pledged shares causing colossal losses to the complainant and other clients of the company---Prosecution contended that in terms of S.24 of the Central Depositories Act, 1997, a stock broker was not authorized to pledge shares with any bank/financial institution and/or Stock Exchange without authorization from the sub-account holder, and that such restriction was also imposed by S.16(c) of Securities & Exchange Ordinance, 1969---Contentions of the accused were that he was a paid employee of the company and was working for the company as a General Manager and that he had resigned from his job with the company---Validity---Investigation officer had admitted that none of the witnesses, whose statements were recorded under S.161, Cr.P.C., had alleged any personal involvement of the accused in the entire transaction; that he had not been able to lay hands on any document which might implicate the accused directly, and that all relevant documents pertaining to the transactions/scam in question had been signed and executed by the two absconding co-accused---Neither the complainant had made any allegation against the accused nor he nominated the accused in the F.I.R., but the accused had been nominated as a co-accused in the challan---Accused held merely 0.02% shares in the capital of the company, therefore, it seemed that he was merely a paid employee---Accused remained on physical custody of the Federal Investigation Agency (FIA) for about 11 days, but nothing incriminating could be procured and/or discovered against him---None of the documents pertaining to the transaction in question had been executed and/or signed by the accused---Holding further inquiry into the guilt of the accused was essential---Accused was admitted to bail, in circumstances.

Shahab Sarki and Zulfiqar Ali Langah for Applicant.

Syed Ashikue Raza, D.A.-G. along I/O. Sub-Inspector Mansoor Ali Khan, FIA, Corporate Crime Circle for the State.

2013 C L D 585

[Sindh]

Before Muhammad Shafi Siddiqui, J

MUHAMMAD SHARIF---Applicant

Versus

Mst. HASEENA---Respondent

Civil Revision No.181 of 2010, decided on 20th September, 2012.

(a) Malicious Prosecution---

----Suit for malicious prosecution---Essential ingredients.

In a suit for malicious prosecution, the plaintiff is under an obligation to show that he was prosecuted by the defendant on the criminal charge that the prosecution terminated in favour of the plaintiff; that the prosecution was malicious; the prosecution was without reasonable and probable cause; that the proceedings had interfered with plaintiff's liberty and had also affected his reputation, and that finally the plaintiff had suffered damages.

Abdul Rauf v. Abdul Razaq and another PLD 1994 SC 476; Sheikh Muhammad v. Mst. Hashmat Sultana 1989 SCMR 34; Muhammad Bakhsh v. Province of Punjab through District Collector, Multan (now Lodhran) and 2 others 1994 SCMR 1836; Anwar Zaman and 5 others v. Bahadur Sher and others 2000 SCMR 431; Muhammad Ashraf v. Municipal Corporation Gujranwala through Mayor/Administrator 2000 MLD 514 and Niaz and others v. abdul Sattar and others PLD 2006 SC 342 ref.

(b) Malicious Prosecution---

----Suit for malicious prosecution---Burden of proof---Claim made on basis of malicious prosecution was a heavy burden that could not be discharged so conveniently---Burden on the plaintiff in a suit for malicious prosecution was more than it was in a normal suit.

Abdul Rauf v. Abdul Razaq PLD 1994 SC 476 rel.

(c) Words and phrases---

----"Actual malice" -Meaning of.

PLD 1957 Lah. 283 rel.

(d) Words and phrases---

----"Implied malice"---Meaning of.

PLD 1957 Lah. 283 rel.

(e) Words and phrases---

----"Malicious" ---- Meaning of.

PLD 1957 Lah. 283 rel.

Abdul Razzaq Leghari for Applicant.

Sontosh Kumar J. Kalal for Respondent.

Date of hearing: 12th September, 2012.

2013 C L D 600

[Sindh]

Before Maqbool Baqar and Naimatullah Phulphoto, JJ

WASEEM YOUSUF---Appellant

Versus

STANDARD CHARTERED BANK (PAKISTAN) LIMITED---Respondent

Ist Appeal No.134 of 2011, decided on 8th October, 2012.

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

----S. 9---Suit for recovery of bank loan---Un-rebutted documents---Effect---Bank produced documentary evidence to prove borrower's failure to repay loan amount---Borrower did not produce evidence in rebuttal to disprove documentary evidence of bank---Banking Court dismissed application for leave to defend the suit and decreed the same in favour of bank---Validity---Un-rebutted documentary evidence of bank successfully established borrower's default in payment of loan amount---Banking Court properly appreciated evidence in accordance with settled principles of law and not a single anomaly either legal or factual was pointed out by borrower---No substantial objection and/or prima facie defence was raised by borrower before Banking Court---Un-rebutted documents filed by bank fully substantiated its claim and finding recorded by Banking Court required no interference by High Court---Appeal was dismissed in circumstances.

Abdul Jabbar Qureshi for Appellant.

2013 C L D 613

[Sindh]

Before Aziz-ur-Rehman, J

NIB BANK LIMITED---Plaintiff

Versus

ALI HAMID TRAVELS and 3 others---Defendants

Suit No.B-31 of 2010, decided on 17th October, 2012.

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

----S. 9---Civil Procedure Code (V of 1908), O.I, R.10---Suit for recovery of loan amount by sale of mortgaged property---Non-appearance of defendant (borrower-mortgagor)---Application by intervener under O.I, R.10, C.P.C. for impleading him as party in suit claiming to have purchased suit property from defendant through sale agreement and having filed against him suit for its specific performance---Validity---Defendant had mortgaged suit property with Bank in year 2008, whereas intervener claimed to have purchased same through sale agreement in year 2009---Intervener had no concern with present suit, wherein he was not necessary or proper party---Intervener would be at liberty to proceed with his suit filed against defendant---High Court dismissed such application in circumstances.

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

----S. 58(f)---Mortgage by deposit of title deeds---Scope---Memorandum of deposit of title deeds was not required by law for such mortgage.

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

----Ss. 9 & 10---Suit for recovery of loan amount---Non-appearance of defendant and non-filing of leave application despite service of summons upon him---Effect---Allegations of fact made in plaint would be deemed to be admitted in such circumstances---Banking Court in such circumstances might decree suit on basis of such allegations and/or such other materials required by court in interest of justice.

M.A. Khan for Plaintiff.

Nemo for Defendant.

Date of hearing: 5th October, 2012.

2013 C L D 627

[Sindh]

Before Aqeel Ahmed Abbasi and Farooq Ali Channa, JJ

MUHAMMAD HANIF---Appellant

Versus

NIB BANK LIMITED and 4 others---Respondents

Spl. H.C.A. No.25 of 2011, decided on 26th September, 2012.

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

----Ss. 2(c) & 9---Civil Procedure Code (v of 1908), O.I, R.10---Suit for recovery of loan amount by sale of mortgaged property---Application under O.I, R.10, C.P.C. by intervener claiming to have purchased mortgaged property from defendant-borrower through sale agreement---Maintainability---Pre-requisite for invoking provisions of Financial Institutions (Recovery of Finances) Ordinance, 2001 was existence of relationship between parties as financial institution and customer---Person being able to show existence of an agreement with financial institution or dealing therewith in capacities as enumerated in S.2(c) of Financial Institutions (Recovery of Finances) Ordinance, 2001 could be impleaded as necessary party to proceedings---Sale in question was between two private persons without consent/involvement of Bank, thus, intervenor by mere such purchase would not acquire status of a "customer" as defined under S.2(c) of the Ordinance---No proceedings for and against a person, who was neither a customer nor financial institution, would be maintainable before the Banking Court---Mere execution of agreement for sale of mortgaged property and its possession would not create any legal right in favour of intervenor in banking proceedings---High Court dismissed such application in circumstances.

Siraj Din and others v. Khushi Muhammad 2002 YLR 1643 ref.

Yousuf Moulvi for Appellant.

Mehmood Ahmed Khan for Respondents.

Date of hearing: 26th September, 2011.

2013 C L D 636

[Sindh]

Before Nadeem Akhtar, J

A.J. CORPORATION through Managing Partner---Plaintiff

Versus

FAUJI FERTILIZER BIN QASIM LIMITED through Chief Executive Officer---Defendant

Suit No.104 of 2010, decided on 19th November, 2012.

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

----S. 74---Compensation for breach of contract---Reasonable---Connotation---Word "reasonable" specifically used in S.74 of the Contract Act, 1872 was of great importance because a reasonable amount according to one party may not be reasonable for the other---What was reasonable and was not could not be decided by the parties themselves, but could be decided only by an independent and impartial person/forum in fair and proper manner; as a party could not be a judge of its own case.

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

----S. 20---Application to file arbitration agreement in court---Scope---Reference of dispute to arbitration---Conditions---Existing dispute was an essential condition for reference to an arbitration---Assertion of a claim by one party and repudiation thereof by the other party would constitute a dispute to warrant recourse to S.20 of the Arbitration Act, 1940---Before referring a matter to arbitration, three conditions were necessary, namely, existence of an arbitration agreement; existence of a dispute under the agreement, and proceedings under Chapter II of the Arbitration Act, 1940 not having been commenced.

Pakistan through Ministry of Finance, Economic Affairs and another v. Fecto Belarus Tractors Ltd. PLD 2002 SC 208; Crescent Industrial Chemical Ltd. v. Federation of Pakistan and 3 others PLD 2004 Quetta 92 and Messrs Friends Trading Co. v. Messrs Muhammad Usman-Moula Bux PLD 1954 Sindh 56 ref.

Ghulam Ishaq Khan Institute of Engineering, Science and Technology and another v. Messrs Hassan Construction Co. (Pvt.) Ltd. Engineer and Consultants 1998 CLC 485 and Muhammad Umar v. Yar Muhammad through Legal Heirs and others 2009 CLC 348 rel.

Assadullah Jaral for Plaintiff.

Walid Khanzada for Defendant.

Date of hearing: 1st November, 2012.

2013CLD672

[Sindh]

Before Nadeem Akhtar, J

ASKARI BANK LIMITED---Plaintiff

Versus

Messrs SHAHI TEXTILES and 3 others---Defendants

Suit No.B-4 of 2010; decided on 15th November, 2012.

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

----Ss. 10 & 5---Suit for recovery of finances- Application for leave .to defend was dismissed---Contention of defendant was that even after dismissal of application for leave to defend, grounds agitated therein by defendant could still be looked into by the court---Validity---Said contention was untenable as the grounds urged by defendants in their leave to defend had already been rejected by the court and as such same could not be re-agitated-Under S.10(11) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, Court had to pass judgment and decree in favour of plaintiff against the defendants forthwith upon dismissal of defendants' application for leave to defend.

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

----S. 10---Dismissal of application for leave to defend the suit---Scope and effect stated.

Dismissal of application for leave to defend did not mean that entire claim of plaintiff in a suit under the Financial Institutions (Recovery of Finances) Ordinance,12001 should be decreed as prayed, for by the plaintiff without ';examining the claim of the plaintiff. In such an event, no doubt the plaintiff becomes entitled to a decree, but only to the extent of such amount, which is permissible in law. Markup other than the agreed rate and/or beyond the agreed 'period cannot be granted to the financial institution. Similarly, no other charges or amounts can be allowed to the financial institution to which the customer had not agreed. The court must examine the claim of the financial institution in the light so the above before passing the decree.

Waleed Khanzada for Plaintiff.

Asghar Khan Bangash for Defendants.

Date of hearing: 30th October, 2012.

2013 CLD 681

[Sindh]

Before Muhammad Ali Mazhar, J

Messrs GLOBAL ENERGY & COMMODITY EXCHANGE GROUP ITALY SPA (GECX GROUP) and another---Plaintiffs

Versus

TRADING CORPORATION OF PAKISTAN through Chairman and another---Defendants

Suit No.455 and C.M.A. No. 4528 of 2012, decided on 30th January, 2013.

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

----S. 20---Dispute between buyer and supplier in relation to terms and conditions of the Letter of Credit which the supplier termed as unworkable---Supplier (Plaintiff) filed application under S.20 of the Arbitration Act, 1940 to file arbitration agreement in court and sought direction to refer the matter to arbitration---Buyer (defendant) opposed application to refer the matter to arbitration on the ground that the supplier (plaintiff) had committed default of its contractual obligations and there was no dispute, therefore, there was no need to refer the matter to arbitration-Validity-Allegations and counter allegations levelled by parties against each other as to which party committed default and became instrumental in breach of contractual obligations; required evidence---In the present case, there existed certain differences between the parties relating to the terms and conditions of the Letter of Credit and the modalities of shipment and such differences were required to be resolved through arbitration and in presence of an arbitration clause in the agreement, it would be just and proper to appoint arbitrator to the dispute---high Court allowed application under S.20 of the Arbitration Act, 1940 and directed the parties to nominate arbitrators in order to resolve the dispute in accordance with the arbitration clause of the contract between the parties.

Janardan Mohapatra v. Executive Engineer, Sambalpur Central Works, Division CPWD and another AIR 1987 Orissa 59; Societe Generale De Surveillance S.A. v. Pakistan through Secretary, Ministry of Finance, Revenue Division, Islamabad 2002 SCMR 1694; Messrs Continental Cable (Pvt.) Ltd. v. Messrs China Harbor Engineering Co. Ltd. and another 2011 CLD 1625; Ch. Abdur Rauf v. Mrs. Zubeda Kaleern and others 2011. CLC 664; Zawar Petroleum v. OGDC and others 2003 YLR 1450; Messrs Asadullah Khan and Co. Ltd. Karachi v. Karachi Shipyard and Engineering Works Ltd. and another 1979 CLC 625; Messrs Shaukat and Raza Ltd. Karachi v. The Karachi Development Authority, Karachi and another 1980 CLC 346; Arbab Abdul Qadir v. Mst. Bibi Fatima and another 1984 CLC 546; Messrs Commodities Trading International Corporation v. Trading Corporation of Pakistan Ltd. and another 1987 CLC 2063; Islamic Republic of Pakistan v. Muhammad Zaman Khan and others 1997 SCMR 1508; Mst. Sughra Bai v. Mst.. Rabia 1982 CLC 344; Alavi Sons Ltd. v. The Government of East Pakistan and others PLD 1968 Kar. 222; Messrs National Construction Ltd. v. Aiwan-e-Iqbal Authority PLD 1994 SC 311 and Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191 ref.

Messrs Jamia Industries Ltd. v. Messrs Pakistan Refinery Ltd. Karachi PLD 1976 Kar 644 rel.

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

----S. 20--Application to file arbitration agreement in court and for the appointment of arbitrator---Existence of a dispute between the parties, determination of---Scope---"Dispute" meaning of-Existence of a difference or dispute was an essential condition that constituted a cause of action for an application under S.20 of the Arbitration Act, 1940-Dispute implied an assertion of a right by one party and repudiation thereof by another---Scope and power conferred on the court under S.20 of the Arbitration Act, 1940 was merely limited to determination of the factual of a real dispute and no more; and it was not for the court to go into questions pertaining to the disputes raised or to suggest the manner of decision thereof, which would amount to usurping of the jurisdiction of the arbitrator-If the court passed an order or reference of the matter to arbitrators, it amounted tai acceptance of application and no formal order of filing arbitration agreement was necessary for the court and while passing such an order it would be deemed to have taken the agreement on the file.

Messrs Jamia Industries Ltd, v. Messrs Pakistan Refinery Ltd. Karachi PLD 1976 Kar. 644 rel.

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

----S. 126--- Contract of guarantee or surety--- Bank guarantee.-- Nature of such guarantee explained.

Messrs National Construction Ltd. v. Aiwan-e--Iqbal Authority PLD 1994 SC 311; Shipyard K. Daman International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191 and Standard Construction Company Pvt. Ltd. v. Pakistan through Secretary, M/O Communication and others 2010 CLD 196 rel.

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

----S. 41---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Contract Act (IX of 1872), S.126---Encashment of bank guarantee---Dispute between buyer and supplier in relation to terms and conditions of the letter of credit, which the supplier termed as unworkable--Application for restraining buyer from enchasing bank guarantee furnished by the plaintiffs at the time of the contract, till conclusion of arbitration proceedings---Validity---Unqualified terms of guarantee could not be interfered with irrespective of existence of dispute nor interim injunction restraining payment there under could be granted-Bank guarantee would not affect or prejudice the case of the contractor if ultimately the dispute was referred to arbitration, once the terms and conditions of the guarantee were fulfilled---Bank liability under the guarantee was absolute and it was wholly independent of the dispute proposed to be raised---In the present case, bank guarantee was unconditional and buyer (defendant) was the sole judge to decide whether the seller had performed the contract and fulfilled terms and conditions of the contract---Guarantor agreed to honour the guarantee as directed by ,the buyer on the day of receipt of demand in writing without any question whatsoever and without oral or written reference to the seller---Commitment of banks must be honoured free from interference of the court---No case was made out by the supplier (plaintiff) for passing restraining order against encashment of performance guarantee--Application was dismissed, in circumstances.

Ch. Abdur Rauf v. Mrs. Zubeda Kaleem and others 2011 CLC 664; 1989 SCMR 379; PLD 1996 Kar. 183; 1979 CLC 625; 1980 CLC 346; 1984 CLC 546; 1987 CLC 2063; 1997 SCMR 1508; 1982 CLC 344 and PLD 1968 Kar. 222 distinguished.

Omair Nisar for Plaintiffs.

S. Mamnoon Hassan for Defendant No.1.

Malik Khushal Khan for Defendant No.2.

Dates of hearing: 25th September and 30th October, 2012.

2013 C L D 719

[Sindh]

Before Muhammad Ali Mazhar, J

Messrs BESROCK (PVT.) LTD. through Director/Chief Executive---Applicant

Versus

PAKISTAN STEEL MILLS CORPORATION through Secretary---Respondent

J.M. No.99 of 2011, decided on 31st October, 2012.

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

----Ss. 14, 3 & Sched.---Filing of arbitration award in the court---Section 14 of the Arbitration Act, 1940 was related to procedure in filing an award which was ministerial act and nowhere precluded an arbitrator or umpire from filing an award suo motu---Party other than an arbitrator could only file an award in the court when specifically authorized by the arbitrator and it was the role of arbitrator/umpire to either file award himself to make it rule of the court or to authorize one or both of the parties to file the award in the court.

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

----S. 14---Limitation Act (IX of 1908), Art. 178---Filing of arbitration award in court---Object---Limitation---Scope.

Muhammad Shafi and others v. Muhammad Sabir and others PLD 1960 Lah. 591 and Sh. Maboob Alam v. Sh. Mumtaz Ahmad PLD 1960 Lah. 601 rel.

Munir-ur-Rehman for Applicant.

Nemo for Respondent.

Date of hearing: 31st October, 2012.

2013 C L D 805

[Sindh]

Before Aqeel Ahmed Abbasi and Sadiq Hussain Bhatti, JJ

NADEEM ATHAR and another---Appellants

Versus

Messrs DUBAI ISLAMIC BANK (PAKISTAN) LTD.---Respondent

Special High Court Appeal No.210 of 2011, decided on 27th November, 2012.

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

----Ss. 22(6) & 22(1)---Law Reforms Ordinance (XII of 1972), S.3(2)--- High Court appeal--- Maintainability---Interpretation of Ss.22(1) & 22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaintiff (customer) impugned order of Banking Court whereby his application to lead secondary evidence under Art.74 of the Qanun-e-Shahadat, 1984, was dismissed---Contention of the defendant-bank was that present appeal was not maintainable in terms of provisions of S.22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Validity---No appeal lay against any interlocutory order passed by the Banking Court---Impugned order, for all intents and purposes, was an interlocutory order as the lis was still pending before the Banking Court, which had still not rendered its final verdict---Legislature had made orders such as the impugned order, non-appealable by specifically making provisions in this respect by virtue of S.22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---When the Legislature had specifically prohibited the filing of an appeal against the interlocutory order, no exception could be drawn from such legislative intent, which otherwise would amount to defeating the clear intent of the Legislature---Appeal of the plaintiff was therefore, without merit which was dismissed, in circumstances.

Mst. Hameeda Shamim and others v. Deputy Commissioner and 7 others 2009 MLD 556; Karachi Water and Sewerage Board through Managing Director and another v. Muhammad Moosa 2001 CLC 221; Abdul Waheed Khan and another v. Allemuddin Khan 2001 CLC 333 and National Bank of Pakistan v. Khairpur Textile Mills Ltd. and others 2001 CLC 1187 distinguished.

Raj Muhammad v. Mst. Chan Bibi and others 1984 SCMR 1068; Muhammad Ibrahim v. Raj Muhammad and another PLD 1984 SC (AJ&K) 51 and Mian Muhammad and 10 others v. Additional Commissioner (Revenue)/ Settlement Commissioner, Rawalpindi and 2 others 1991 SCMR 520 ref.

Muhammad Mushtaq Qadri for Appellants.

Ms. Naheed A. Shahid for Respondent.

Date of hearing: 20th November, 2012.

2013 C L D 818

[Sindh]

Before Syed Hasan Azhar Rizvi, J

Messrs UNITED BRANDS LIMITED---Petitioner

Versus

BRAND MASTERS (PRIVATE) LIMITED---Respondent

J.M. No.6 of 2009, decided on 11th March, 2013.

Companies Ordinance (XLVII of 1984)---

----S. 305---Petition for winding up of company by court---Default in payment of debt by company---Respondent-company failing to abide by a settlement agreement regarding payment of debt---Effect---Respondent-company (debtor) entered into a settlement agreement with the petitioner-company (creditor) for payment of debt and according to the terms of the settlement respondent-company agreed to discharge its entire liability; agreed to pay the debt within a period of 12 months in 12 equal instalments, and agreed to deposit each instalment with the Nazir of the Court---Respondent-company violated its own commitment---Notices were repeatedly issued to the respondent-company through all modes including publication in newspapers but all in vain---Conduct of respondent-company showed that it was unable to pay its debt---Winding up petition was allowed, Official Assignee was appointed as Official Liquidator to look after the affairs of respondent-company and to proceed further strictly in accordance with the law.

Zeeshan Edhi for Petitioner.

Nemo for Respondent/Alleged contemnor.

2013 C L D 841

[Sindh]

Before Aqeel Ahmed Abbasi and Farooq Ali Channa, JJ

MUKHTAR AHMED---Appellant

Versus

Messrs UNITED BANK LIMITED and another---Respondents

I. A. No.D-75 of 2012, decided on 27th September, 2012.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, Rr. 66 & 92---Suit for recovery---Execution of decree---Auction of mortgaged property---Auction-purchaser, rights of---Suit was decreed thereafter mortgaged property was put to auction which was purchased by the respondent---Contention of the appellant/judgment debtor was that after fresh evaluation of the mortgaged property a fresh proclamation had to be issued and re-advertised in terms of provisions of O.XXI, R.66, C.P.C. and further that the mortgaged property had been auctioned at a throwaway price---Validity---No such plea was raised by appellant before Trial Court and he was present on each date before Trial Court during execution proceedings---No fresh notice under O.XXI, R.66, C.P.C. was required to be served when the fresh evaluation had taken place at the request of the appellant/judgment debtor and when he was in knowledge about the auction-purchaser's offer---Last assessment of value of mortgaged property was made through an evaluator appointed by the court and the property was sold at the determined "forced sale" value---Respondent auction-purchaser had acquired valuable rights in the mortgaged property which could not be disturbed or recalled at present stage at behest of the appellant/judgment debtor---Appeal was dismissed in circumstances.

Mujahid A. Bhatti for Appellant.

Khalid Mehmood Siddiqui along with Azhar Faridi for Respondents.

Date of hearing: 19th September, 2012.

2013 C L D 854

[Sindh]

Before Mushir Alam, C.J. and Muhammad Shafi Siddiqui, J

CRESCENT LEASING CORPORATION LIMITED through Constituted Attorney---Appellant

Versus

Messrs SARHAD GOODS TRANSPORT COMPANY and 3 others---Respondents

First Appeal No.152 of 2010, decided on 19th December, 2012.

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

----Ss. 9, 10 & 22---Civil Procedure Code (V of 1908), O.XLI, R.33--- Suit for recovery of finance/loan---Application for leave to defend---Defendant alleged non-delivery of leased assets to him by Bank---Dismissal of leave application by Banking Court while directing parties to submit accounts/break-up along with supporting documents---Non-delivery of leased assets to defendant discovered from such documents, which resulted into dismissal of suit---Bank's plea was that after dismissing leave application, Banking Court was bound to decree suit---Validity---Issue addressed and decided at time of dismissal of leave application could not be reconsidered by Banking Court---Interim order of dismissal of leave application had merged with final order of dismissal of suit---Defendant by alleging non-delivery of leased assets had raised substantial question of fact and law, thus, Banking Court ought to have granted him leave to defend suit---Jurisdiction exercisable by High Court in an appeal arising from judgment and decree would be in continuation of original suit---Appellate Court could exercise powers available to original court---Mere setting aside of impugned judgment/decree would not meet ends of justice as interim order of dismissal of leave application would then become operative---Defendant's omission to file cross-objections against findings recorded by Banking Court while dismissing leave application could be saved in terms of O.XLI, R.33, C.P.C.---Banking Court had decided leave application without considering material available on record---High Court granted leave application unconditionally and remanded case to Banking Court to decide question of handling over possession of leased assets after recording evidence of parties.

Messrs Ahmad Autos v. Allied Bank of Pakistan Limited PLD 1990 SC 497; Mrs. Jawahar Afzal v. Messrs United Bank Limited 2003 CLD 119; CM. Textile Mills (Pvt.) Ltd. v. Investment Corporation of Pakistan 2004 CLD 587; Bankers Equity Limited v. Bentonite Pakistan Limited 2010 CLD 651 and Tariq Rafique Sheikh v. Citi Bank 2008 CLD 1252 ref.

Muhammad Nawaz v. Ahmad Bibi 1995 SCMR 266; Khalid Mehmood v. Asghar Ali Bhatti 2005 CLC 1821; N.-W.F.P. v. Abdul Ghafoor PLD 1993 SC 418; Syed Ghaus Bakhsh v. Land Acquisition Collector 2007 MLD 1315 and Province of Punjab v. Col. Abdul Majeed 1997 SCMR 1692 rel.

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

----S. 22---Civil Procedure Code (V of 1908), S.107 & O.XLI, R.33--- Appeal--- Jurisdiction of High Court--- Scope---Jurisdiction exercisable by High Court in an appeal arising from judgment and decree would be in continuation of original suit---High Court in appeal could pass any order, which could be passed by Trial Court---Appellate Court could exercise powers available to original court.

(c) Appeal---

----Right of---Conferable by law expressly.

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

----S. 22---Civil Procedure Code (V of 1908), O.XLI, R.22---Interim order, passing of---Remedy of aggrieved party---Scope---Such order in absence of right of appeal, review or revision thereagainst could be challenged in an appeal from final judgment/decree by plaintiff or defendant through cross-objections irrespective of non-filing of an appeal or objection by any of them---Principles.

Muhammad Nawaz v. Ahmad Bibi 1995 SCMR 266; Khalid Mehmood v. Asghar Ali Bhatti 2005 CLC 1821; N.-W.F.P. v. Abdul Ghafoor PLD 1993 SC 418; Syed Ghaus Bakhsh v. Land Acquisition Collector 2007 MLD 1315 and Province of Punjab v. Col. Abdul Majeed 1997 SCMR 1692 rel.

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

----O. XLI, R.22---Interim order, passing of---Remedy of aggrieved party---Scope---Such order in absence of right of appeal, review or revision thereagainst could be challenged in an appeal from final judgment/decree by plaintiff or defendant through cross-objections irrespective of non-filing of an appeal or objection by any of them---Principles.

Muhammad Nawaz v. Ahmad Bibi 1995 SCMR 266; Khalid Mehmood v. Asghar Ali Bhatti 2005 CLC 1821; N.-W.F.P. v. Abdul Ghafoor PLD 1993 SC 418; Syed Ghaus Bakhsh v. Land Acquisition Collector 2007 MLD 1315 and Province of Punjab v. Col. Abdul Majeed 1997 SCMR 1692 rel.

Samia Faiz Durrani and Manzoorul Haq for Appellant.

Muhammad Saleem Thepdawala for Respondents.

2013 C L D 880

[Sindh]

Before Ghulam Sarwar Korai, J

Messrs SHABIR TILES AND CERAMICS LIMITED through Company Secretary----Applicant

Versus

Messrs CACHE SYSTEMS PAKISTAN through Sole Proprietor----Respondent

Civil Revision Application No.18 of 2009, decided on 24th October, 2012.

Civil Procedure Code (V of 1908)---

----O. VI, R. 17---Amendment of pleadings---Principle---Suit filed by proprietorship concern through its Sole Proprietor---Plaintiff (proprietary concern) sought amendment in title of plaint by correcting its name and description---Trial Court declined said amendment but Lower Appellate Court allowed the same---Validity---Suit was filed by proprietorship concern through its sole proprietor, who also verified the plaint---Application for amendment in title of plaint showed that neither plaintiff was changed therein nor any new party was added or character of suit disturbed---Misdescription in title of plaint appeared to be bona fide typographical error, which could be corrected by amendment in its title even with red link and such amendment would not involve substitution or addition of parties---No legal infirmity was found in judgment passed by Lower Appellate Court, which was well reasoned and did not warrant interference by High Court---Revision application was dismissed in circumstances.

Messrs PUB Corporation v. Water and Power Development Authority through Managing Director and 2 others PLD 2009 Kar. 139 fol.

Altaf Hussain for Applicant.

Khalid Javed for Respondent.

Date of hearing: 24th October, 2012.

2013 C L D 898

[Sindh]

Before Muhammad Ali Mazhar, J

BOC PAKISTAN LIMITED---Applicant

Versus

NATIONAL GASES (PVT.) LIMITED---Respondent

C.M.A. No.5758 of 2012 in Suit No.1056 of 2010, decided on 18th January, 2013.

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

----S. 34---Civil Procedure Code (V of 1908), O. XXXVII, R.3---Suit for recovery of money---Dishonouring of cheque---Stay of proceedings in presence of an arbitration agreement between the parties---"Dispute"---Scope---Defendant-company was proceeded ex parte whereafter it filed application under S.34 of the Arbitration Act, 1940 for stay of proceedings in presence of an arbitration clause in the agreement between the parties---Contention of the defendant was that the agreement between the parties stipulated that all disputes be referred to arbitration, therefore, proceedings of the suit should be stayed---Validity---Defendant, in the application had only relied upon the clause of the agreement which contained general terms and conditions but failed to point out any dispute---Dishonouring of cheque was an independent cause of action and S.34 of the Arbitration Act, 1940 did not apply to stay the suit---Neither the issuance of the cheque was disputed nor its dishonouring and mere dishonouring of cheque due to insufficiency of funds did not create any dispute which was to be resolved through arbitration---When there was no dispute, there could be no arbitration and thus it would be irrational and illogical to stay the proceedings as the dispute was non-existent---Application for stay in proceedings was dismissed, in circumstances.

Associated Agencies Ltd., and another v. Industrija Masina/Tractora PLD 1993 Kar. 459; Messrs Cepcon (Pvt.) Ltd. v. Messrs Rizwan Builders Ltd. 1990 MLD 2027; Mrs. Rubby Hameedullah and 3 others v. Dr. Arif and 4 others 2010 YLR 3331 and Director Housing, A.-G.'s Branch Rawalpindi v. Messrs Makhdum Consultants Engineers and Architects 1997 SCMR 988 distinguished.

Mrs. Suriya Waseem Usmani v. L&M International (Pvt.) Ltd. 2002 CLD 624 ref.

Cotton Export Corporation of Pakistan (Pvt.) Ltd. v. Messrs Asif Cotton Ginners and 5 others 1995 CLC 1024; 2001 CLC 1156; 1999 CLC 1841; PLD 1958 (W.P.) Lah. 208; 1988 CLC 1350 and PLD 1993 SC 42 rel.

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

----S. 34---Application for stay of proceedings in presence of an arbitration agreement between the parties--- Scope---Essential ingredients---Dispute must be specified in an application under S.34 of the Arbitration Act, 1940---Party making application had to satisfy the court firstly that there was an agreement to refer, secondly that the suit related to any matter agreed to be referred to arbitration and thirdly that there was a "dispute" between the parties which was covered by the agreement; and unless this was shown, the suit could not be stayed---In a dispute that arises on basis of an agreement which contained an arbitration clause, mere fact that the defendant was not prepared to pay the amount for which he was liable under the agreement, did not mean that there was a "dispute" between the parties---When an application is moved under S.34 of the Arbitration Act, 1940 for stay of proceedings and the defendant fails to state the "dispute" between the parties, but makes only a reference to the arbitration clause, said shortcoming was sufficient to cause dismissal of the application---Essential consideration weighing with the court in refusal was on its satisfaction, there were no sufficient reasons for making reference to arbitration and substantial miscarriage of justice would take place or inconvenience would be caused to party if stay is granted.

PLD 1958 (W.P.) Lah. 208; 1988 CLC 1350 and PLD 1993 SC 42 rel.

Atif Choudhry for Applicant.

Abdul Qadir for Respondent.

Date of hearing: 11th December, 2012.

2013 C L D 912

[Sindh]

Before Mushir Alam, C.J. and Muhammad Shafi Siddiqui, J

ANWAR MEHMOOD---Appellant

Versus

Messrs ASKARI BANK LIMITED---Respondent

Ist Appeal No.92 of 2011, decided on 11th December, 2012.

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

----S. 27---Civil Procedure Code (V of 1908), S.152---Finality of judgment---Arithmetical mistakes---Correction of errors---Special and general law---Scope---Financial Institutions (Recovery of Finances) Ordinance, 2001, which is a special statute had provided a parallel provision to obtain remedy as claimed which excludes application of general principle of law i.e. S.152, C.P.C.---Provision of S.152, C.P.C. deals with clerical or arithmetical mistakes in judgments, decrees or orders arise therein from accidental slip or omission whereas proviso to S.27 of Financial Institutions (Recovery of Finances) Ordinance, 2001, deals with only clerical or typographical mistakes in judgment---Arithmetical mistake is considered to be mistake of calculation; clerical mistake is mistake in writing or typing whereas error arising out of or occurring from accidental slip or omission is error due to careless mistake of Court---Legislature's intent is very visible and clear while incorporating provision of Financial Institutions (Recovery of Finances) Ordinance, 2001, and only includes clerical and typographical mistakes.

(b) Interpretation of statutes---

----Special law excludes application of general law in the context in which formal provision has been enacted.

Captain (Rtd.) Nayyar Islam v. Judge Accountability Court No.III and others 2012 SCMR 669 rel.

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

----Ss. 9, 22 & 27---Civil Procedure Code (V of 1908), S.152---Suit for recovery of bank loan---Accidental slip---Scope---Banking Court passed judgment and decree in favour of bank to the extent of Rs.67,490 but on application filed by bank, a sum of Rs.289,117 was included in decretal amount as service charges which were stated to have been missed due to accidental slip---Validity---Alleged claim of service charges was Rs.533,656/40 whereas Banking Court while deciding application under S.152, C.P.C. had come to the conclusion that in fact it was Rs.289,117 and such could not be an accidental slip, as claimed---Figure of Rs.289,117 could only be achieved after discussion, deliberation and arguments and not merely by clerical or typographical mistake, which in fact was mandate of S.27 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court misapplied S.152, C.P.C. and while applying provision of S.27 of Financial Institutions (Recovery of Finances) Ordinance, 2001, it provided no room for accidental slips as claimed in application which was granted in terms of order as the same could not have been done---High Court set aside the order passed by Banking Court---Appeal was allowed in circumstances.

Captain (Rtd.) Nayyar Islam v. Judge Accountability Court No.III and others 2012 SCMR 669; Zarai Taraqiati Bank v. Hassan Aftab Fatima 2009 CLD 36 and Messrs Agro Care and 3 others v. Zarai Taraqiati Bank 2011 CLD 990 ref.

Khaleeq Ahmed for Appellant.

Khalid Mehmood Siddiqui for Respondent.

Date of hearing: 28th November, 2012.

2013 C L D 920

[Sindh]

Before Shahid Anwar Bajwa, J

NAJMUL ARFEEN and 6 others---Petitioners

Versus

DEWAN METHARAM DHARMADAS TRUST and 6 others---Respondents

Constitutional Petition No.S-312 of 2010, decided on 22nd March, 2012.

(a) Sindh Rented Premises Ordinance (XVII of 1979)---

----Ss. 15 & 13---Civil Procedure Code (V of 1908), O. XXII, R. 1---Ejectment petition filed by a duly constituted Trust through authorized attorney---Death of the attorney during pendency of said petition---Effect---Contention of the tenants was that with death of the attorney, the ejectment petition came to an end---Validity---When a person himself filed particular proceedings, after death of such person, right to sue survives for the proceedings to continue, and provisions in this regard have been made in O. XXII, C.P.C.---If the principal dies, right to sue continues and suit could be continued by legal heirs---Where principal continues in existence as in the present case, and only person who executed power of attorney in favour of another expired, same was a situation which was on much better footing---In the present case, with the death of the attorney, the ejectment petition continued since the principal (the Trust) continued in existence.

Muhammad Ibrahim through Legal Heirs and others v. Mst. Basri through Legal Heirs and others 1998 SCMR 96; A.M. Industrial Corporation Ltd. v. Aijaz Mahmood and others 2006 SCMR 437; M. Imamuddin v. Sh. Bashir Ahmed and 7 others 1989 CLC 2309; Muhammad Haleem and another v. General Manager (Operation) Pakistan Railways Headquarter, Lahore and others 2009 SCMR 339; Mehdi Khan v. Faqir Muhammad and 4 others PLD 1980 Lah. 110 and Mahr Muhammad Iqbal v. Subedar Muhammad Zaman Khan and others 2003 SCMR 783 distinguished.

(b) Sindh Rented Premises Ordinance (XVII of 1979)---

----S. 21--- Constitution of Pakistan, Art. 199---Constitutional petition--- Maintainability---Alternate remedy under S.21 of Sindh Rented Premises Ordinance, 1979 was available--- Effect--- Word "May", connotation of---Contention of tenants was that since the word "may" was used in S.21 of the Sindh Rented Premises Ordinance, 1979, therefore, Constitutional petition against order of Rent Controller was maintainable, without the tenants first availing right of appeal under said S. 21---Validity---Word "may" used in S.21 indicated that a party who was aggrieved by order passed by Rent Controller had the option of either accepting the order of the Rent Controller or challenging the said order in appeal---Contention of tenant was therefore, not correct.

Muhammad Ovais and another v. Federation of Pakistan 2007 SCMR 1587 ref.

Muhammad Swaleh and another v. Messrs United Grain and Fodder Agencies PLD 1964 SC 97; Syed Jahangir Ali and others v. District Coordination Officer and others PLD 2011 Kar. 293; Nagina Silk Mills, Lyallpur v. The Income Tax Officer, A-Ward Lyallpur and others PLD 1963 SC 322; Mansab Ali v. Amir and 3 others PLD 1971 SC 124 and Haji Ahmed Haji Essa v. Rent Controller and others 1983 CLC 840 distinguished.

(c) Sindh Rented Premises Ordinance (XVII of 1979)---

----S. 15---Ejectment petition filed by a duly constituted Trust was allowed---Contention of tenants was that all trustees should have joined in the ejectment petition, therefore, the same was not maintainable---Validity---Ejectment application clearly stated that the original applicant was the sole trustee and when ejectment proceedings were decided, he was described as the sole trustee ----- Record, therefore, showed that the position of the sole trustee appeared to have continued and therefore, there could not have been any question of joining in other trustees---Tenants had also failed to place on record anything to substantiate the claim that there were other trustees as well---Contention of the tenants was therefore, without force.

Norendra Nath Kumar and another v. Atul Chandra Bandopadhya and others AIR 1918 Calcutta 810 and Vavuttu Naicken v. Venkata Sesha Aiyar and another AIR 1914 Madras 119[1] ref.

(d) Sindh Rented Premises Ordinance (XVII of 1979)---

----Ss. 15 & 15A---Constitution of Pakistan, Art. 199---Constitutional petition---Ejectment petition was allowed on ground of subletting by legal heirs of deceased tenant to a private limited company---Contention of tenants was that they were legal heirs of the deceased original tenant, and in terms of their family settlement, they had incorporated a private limited company and they were the sole shareholders of said company; therefore, there was no parting of possession---Validity---When a company was registered, a new legal personality emerged and from date of its registration, it was regarded as a body corporate or corporation aggregate and the same began to function as an entity distinct and separate from its shareholders---Personality of members of a company had nothing to do with the person of the incorporated company---Private Company incorporated by the tenants, in the present case, was a separate entity notwithstanding the reasons for which it was created and therefore the mischief sought to be remedied by S.15 of the Sindh Rented Premises Ordinance, 1979 was attracted to the present case---Mere fact that legal heirs of the original tenants were sole shareholders in the Company did not detract in any way from the legal personality and consequence of the legal person of the private company---No interference was called for in the order of Rent Controller---Constitutional petition was dismissed.

Muhammad Yousuf and 5 others v. Adam Ali and 4 others 1981 CLC 596; Sh. Zubair Ahmed v. Ali Ahmed 1983 CLC 3254; Habibullah v. Rent Controller, Peshawar and 11 others 1998 SCMR 2656; Adam Limited v. General and Rubber Trading Co., Karachi 1998 MLD 579; Mrs. Freni A. Cavina v. Mrs. Dhunmai Phiroze Dalal PLD 1991 SC 265; Muhammad Sharif and another v. Muhammad Afzal Sohail and others PLD 1981 SC 246 and Muhammad Latif v. District Judge Karachi (South) and others 2009 YLR 2234 distinguished.

Muhammad Latif v. District Judge Karachi (South) and others 2009 YLR 2234; State Trading Corporation of India, Ltd. v. The Commercial Tax Officer and others AIR 1963 SC 1811; Mrs. Bacha F. Guzdar, Bombay v. Commissioner of Income Tax, Bombay AIR 1955 SC 74 and Bankers Equity Ltd. through Attorney and 5 others v. Sunflow CIT-RUSS Ltd. PLD 1999 Lah. 450 rel.

Abdul Qadir Khan for Petitioners.

Abrar Hassan for Respondent No.1.

Mustafa Lakhani for Respondent No.5.

Date of hearing: 9th March, 2012.

2013 C L D 941

[Sindh]

Before Muhammad Tasnim and Aziz-ur-Rehman, JJ

MUHAMMAD HUSSAIN---Appellant

Versus

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN, HYDERABAD and another---Respondents

Ist Appeal No.31 of 2011, decided on 19th December, 2012.

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

----S. 19---Civil Procedure Code (V of 1908), O.XXI, Rr. 54, 66, 67, 68, 89 & O.XXIII, R.1---Limitation Act (IX of 1908), Arts. 166 & 181---Execution proceedings---Public auction of mortgaged property---Judgment-debtor's application under O.XXI, R.89, C.P.C. for setting aside auction sale---Auction-purchaser's plea was that such application filed beyond 30 days was time barred by virtue of Art. 166 of Limitation Act, 1908---Non-confirmation of auction sale by Banking Court on account of compromise made between Bank and borrower---Validity---Duty of Executing Court under O.XXI, R.66, C.P.C. was to cause proclamation of intended auction and such proclamation was required to be drawn up after notice to decree holder and judgment debtor stating therein time and place of auction and accurate description of property to be auctioned---Neither judgment debtor had been served with requisite notice in terms of O.XXI, R.66, C.P.C. nor reserve price and venue of auction had been mentioned in sale proclamation---Valuation report had been obtained in violation of direction of Banking Court much after date of auction---Impugned auction had taken place before expiry of 30 days---Auction purchaser had deposited 25% of bid money after conclusion of auction proceedings, but not immediately in compliance of terms and conditions of auction---Impugned auction was collusive, unfair and in violation of mandatory provisions of O.XXI, C.P.C.---Article 181 of Limitation Act, 1908 and not Art. 166 thereof would apply to the present case---Executing Court had neither confirmed nor had accepted auction, thus, no vested right to confirmation of auction had accrued in favour of auction purchaser---In absence of specific provision of law pertaining to compromise of execution, court had inherent powers to pass order on compromise application filed in execution proceedings---High Court dismissed appeal filed by auction purchaser.

Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan and others PLD 1987 SC 512; Muhammad Din v. Ellahi Noor and 4 others PLD 1975 Lah. 1393; U.B.L. v. Heryana Asbestos Cement Industries (Ltd.) and 20 others 2006 CLC 1272; Muhammad Suleman v. Allied Bank of Pakistan Ltd. and 11 others 1987 CLC 1338; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993; Messrs National Electric Company of Pakistan v. Allied Bank of Pakistan Limited and 2 others 1996 CLC 192; Noor Ellahi v. Trading Corporation of Pakistan (Pvt.) Ltd. and 4 others 2007 CLC 1409 and Noor Badshah v. House Building Finance Corporation through District Manager, HBFC, Faisalabad and another PLD 2006 Lah. 771 ref.

Muhammad Attique v. Jamil Ahmad and others PLD 2010 SC 993 rel.

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

----O. XXI, Rr. 89 & 90---Application for setting aside of auction sale---Scope---Such application could be filed either under R. 89 or 90 of O. XXI, C.P.C., but both such applications had different connotations and parameters---Question of deposit of an amount of 20% or not exceeding 20% of sum realized in sale or otherwise of furnishing security would not arise in absence of application under O.XXI, R.90, C.P.C.---Person upon filing of application under O.XXI, R.90, C.P.C. would become disentitled to make application under R.89 thereof---Principles.

Nadia Malik v. Makki Chemical Industries Pvt. Ltd. and others 2011 SCMR 1675 rel.

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

----S. 151, O.XXI, R.11 & O.XXIII, R.1--- Execution proceedings, compromise in---Scope---In absence of specific provision of law pertaining to compromise of execution, court had inherent powers to pass order on compromise application filed in execution proceedings.

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

----S. 19(2)---Execution of decree, three different modes for---Effect---Once the mode for execution of decree was chosen, then the same could not be changed by Executing Court---Principles.

The word "or" used twice in subsection (2) of section 19 of Financial Institutions (Recovery of Finances) Ordinance 2001 has to be read disjunctively which classify three modes for execution of the decree. Once the mode for execution of the decree is chosen, then same cannot be switched over to another made by the Executing Court much less unilaterally.

Aijaz Ali Hakro for Appellant.

Ms. Nasreen Qadri along with Aftab Amin, AVP of I.D.B.P. and Shabir Ahmed OG-I.

Pirbhulal Goklani for Respondent No.2.

Muhammad Azeem Panhwar, State Counsel.

Dates of hearing: 22nd November and 4th December, 2012.

2013 C L D 981

[Sindh]

Before Nadeem Akhtar, J

KHADIM HUSSAIN and 12 others---Appellants

Versus

GUL HASSAN TIWANO and 3 others---Respondents

First Civil Appeal No.2 of 2010, decided on 7th January, 2013.

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

----S.13 & Preamble---Constitution of Pakistan, Art. 199---Interpretation of S.13, Defamation Ordinance, 2002---Trial of cases under Defamation Ordinance, 2002---Jurisdiction---Scope---Suit for damages on ground of loss of reputation and defamation was decreed by Trial Court (which was the civil court)---Contention of the defendant was that suit of plaintiffs was barred under S.13 of the Defamation Ordinance, 2002 as only the District Court had jurisdiction to try the same and Trial Court had no jurisdiction in respect of the matter, therefore the impugned proceedings were coram non judice---Validity---Special law excluded general law and where a special tribunal/court was constituted to hear and decide a dispute which came under the relevant statute, then all other courts would stand debarred from exercising powers of the same nature---Section 13 of the Defamation Ordinance, 2002 provided that the District Court shall have the jurisdiction to try cases under the Ordinance, and the language used in S.13 of the Defamation Ordinance, 2002 was absolutely clear and unambiguous while the use of the word "shall" was of great significance---Interpretation of S.13 of the Defamation Ordinance, 2002 made it abundantly clear that all cases in respect of defamation and/or the matters connected therewith or incidental thereto could be tried under the Ordinance only by the District Court and no other Court, including the High Court, shall have jurisdiction in respect thereof---Suit for defamation, in the present case, ought to have been filed by the plaintiffs before the District Court---High Court declared impugned proceedings of civil court as coram non judice and void ab initio and having no legal effect---High Court converted appeal of defendants into a constitutional petition and set aside impugned order of Trial Court---Constitutional petition was allowed, accordingly.

Pakistan Herald Publications (Pvt.) Ltd. and 2 others v. Karachi Building Control Authority through Controller of Buildings 2012 CLD 453; A. Khalid Ansari v. Mir Shakil ur Rehman 2011 CLD 1196; Industrial Development Bank of Pakistan v. Allied Bank of Pakistan and another PLD 1986 SC 74; Attaullah Khan and others v. Samiullah and others 2007 SCMR 298; Shahid Maqbool v. Mst. Ayescha Saleem Khan and 24 others 2009 CLC 1452; Fazal Dad v. Col. (Rtd.) Ghulam Muhammad Malik and others PLD 2007 SC 571; Shabbir Jan Sarhandi v. Province of Sindh through Chief Secretary and 3 others 2006 PLC (C.S.) 955; Mst. Mubarak Salman and others v. The State PLD 2006 Kar. 678; Muhammad Ayaz alias Cheena and others v. The State PLD 2004 Kar. 652 and Syed Ghazanfar Hussain through Legal heirs and others v. Nooruddin and others 2011 CLC 1303 rel.

(b) Interpretation of statutes---

----Preamble of a statute was always the key to interpret the statute.

Fazal Dad v. Col. (Rtd.) Ghulam Muhammad Malik and others PLD 2007 SC 571 rel.

(c) Jurisdiction---

----Order/judgment without jurisdiction was void and a nullity in law and an order/judgment without jurisdiction being void ab initio could not be clothed with legality merely because it had been upheld in appeal or revision by inadvertence.

Muhammad Ayaz alias Cheena and others v. The State PLD 2004 Kar. 652 rel.

(d) Constitution of Pakistan---

----Art. 199---Civil Procedure Code (V of 1908), S. 151---Constitutional jurisdiction of High Court---Inherent powers of High Court---Scope---High Court had inherent and constitutional powers to remedy/correct the wrongs committed by subordinate courts by passing judgments/orders which were void or without jurisdiction.

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

----Ss. 151, 96, & 115--- Constitution of Pakistan, Art.199---Appeal and revision---Inherent powers of High Court---High Court, in its inherent jurisdiction, could convert an appeal, constitutional petition or revision to any other remedy.

Syed Ghazanfar Hussain through Legal heirs and others v. Nooruddin and others 2011 CLC 1303 rel.

Abdul Qadir Shaikh for Appellants.

Arbab Ali Chandio for Respondents.

Date of hearing: 24th September, 2012.

2013 C L D 994

[Sindh]

Before Aqeel Ahmed Abbasi and Sadiq Hussain Bhatti, JJ

Mrs. RUKHSANA YAHYA---Appellant

Versus

NAZAZ ALI and 2 others---Respondents

High Court Appeal No. 197 of 2011, decided on 18th December, 2012.

Civil Procedure Code (V of 1908)---

----O. XXIX, R.2---Sindh Chief Court Rules (O.S.), R. 782---Service on corporation---Service upon Director of Corporation/Company---Dispute was with regard to service upon defendant company---Plea raised by plaintiff was that service to company through directors had been effected and there was no need of repeating the process---Validity---Once service effected upon defendants held to be good and matter was fixed for filing of written statements, notices could not be repeated without assigning any reason or showing sufficient cause in that respect---Company stood served in fact and law and there was no need of repeating service upon defendant company---Manager and director of the company were already being represented by a counsel, no prejudice in such regard was otherwise likely to be caused to defendant company---Appeal was allowed accordingly.

Mansoor Textile Mills Limited, Shorkot v. Jamail Akhtar Naseeb, Textile Consultant Faisalabad 2001 CLC 1065 rel.

Syed Muhammad Yahya for Appellant.

H. A. Rahmani for Respondents.

Date of hearing: 4th December, 2012.

2013 C L D 1002

[Sindh]

Before Nadeem Akhtar, J

Messrs ARK GARMENTS INDUSTRY (PVT.) LTD. through Managing Director and 2 others---Applicants

Versus

NATIONAL BANK OF PAKISTAN---Respondent

Judicial Miscellaneous No.10 of 2010 in Suit No.B-52 of 2006, decided on 24th December, 2012.

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

----S. 9---Civil Procedure Code (V of 1908), S. 12(2)---Suit for recovery of finance---Ex parte decree in favour of Bank, passing of---Defendant's application under S.12(2), C.P.C. for setting aside decree on ground of fraud---Object of S.12(2), C.P.C.---Plea of plaintiff-Bank was that Banking Court had become functus officio after passing impugned decree, thus, could not set aside same for having attained finality---Validity---Use of words "judgment" and "decree" in S. 12(2), C.P.C. made clear that such application would be maintainable after passing thereof and not before that---Banking Court was competent to entertain and decide such application---High Court repelled the plea of plaintiff---Principles.

Objections that High Court has become functus officio after passing the decree and that the impugned decree cannot be set aside as it has attained finality, are not tenable. The very object of section 12(2), C.P.C. is to provide a specific remedy to a party, who is aggrieved by an order, judgment or decree, obtained against him by misrepresentation or by exercising fraud or from a court/forum that has no jurisdiction to pass the same. Misrepresentation or fraud can happen between the parties inter se or upon the court itself. The inclusion of the words "judgment" and "decree" in section 12(2), C.P.C. clearly shows that an application under this section for setting aside the judgment and decree will be maintainable only after passing of the judgment and decree and not before that. The court shall not be deemed to have become functus officio while hearing and deciding the application under section 12(2), C.P.C. and shall have the competent jurisdiction to entertain and decide the same. Section 12(2), C.P.C. would not have been inserted lately if it was the intention of the legislature to take away all the powers from the courts after passing of the judgment and decree.

The finality of a judgment is subject to the provisions of section 12(2), C.P.C.

Mobina Begum v. The Joint Secretary, Ministry of Religious Affairs, Government of Pakistan 1994 MLD 1441 rel.

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

----S. 9---Civil Procedure Code (V of 1908), S. 12(2)---Suit for recovery of finance---Ex parte decree in favour of Bank, passing of--- Defendant's application under S.12(2), C.P.C. for setting aside such decree on ground of fraud---Defendant's plea was that Bank obtained such decree by concealing settlement agreement executed between parties, which had been acted upon---Validity---Bank had not denied execution of such agreement, which was still intact and subsisting---Bank while acting upon such agreement had withdrawn public notice issued for sale of mortgaged property---Bank being party to such agreement and beneficiary thereof had knowledge about its execution and subsistence at time of filing such suit--- Bank had filed suit without disclosing such agreement and had not brought to notice of court before passing of impugned decree, but had kept on pressing suit as if such agreement did not exact---Such acts of Bank amounted to concealment of material facts/documents, misrepresentation and fraud committed by Bank with defendant and upon court---High Court set aside impugned decree and accepted such application while directed defendant to file leave application within specified time.

Javaid Tanveer Mughal v. Agricultural Development Bank of Pakistan and 3 others 2004 CLD 748; National Bank of Pakistan v. Messrs Polycol Textile Industries and others in Suit No.B-229 of 2000; 2001 CLC 1187; 2005 CLD 192; 2010 CLD 1762; Lal Din and another v. Muhammad Ibrahim 1993 SCMR 710 and Muhammad Tahir v. Emirates Bank International PJSC and another 2010 CLC 1545 ref.

Government of Sindh v. Khalil Ahmed 1994 SCMR 782; Muhammad Akram Shaikh v. Messrs Pak Libya Holding Company (Pvt.) Ltd. and 14 others PLD 2010 Kar. 400; Khadim Hussain and others v. Abid Hussain and others PLD 2009 SC 419; Mst. Fehmida Begum v. Muhammad Khalid and another 1992 SCMR 1908 and Allah Wasaya and 5 others v. Irshad Ahmad and 4 others 1992 SCMR 2184 rel.

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

----S. 12(2)---Application under S. 12(2), C.P.C.---Fulfilment of all or any of requirements of S.12(2), C.P.C.---Effect---Impugned order/judgment/decree in such case could not sustain.

Mirza Sarfraz Ahmed and Muhammad Junaid Farooqi for Applicants.

Muhammad Zubair Quraishy for Respondent.

Date of hearing: 12th December, 2012.

2013 C L D 1053

[Sindh]

Before Muhammad Ali Mazhar, J

NORTHERN POLYTHENE LIMITED (NPL) through Director---Plaintiff

Versus

NATIONAL BANK OF PAKISTAN and 3 others---Defendants

Suit No. B-1630 of 1998, decided on 27th February, 2013.

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

----O. IX, R.9---Suit dismissed for non-prosecution---Plaintiff's plea was that after withdrawal of Vakalatnama by his earlier counsel, no notice was issued to him; and that court was required to issue him notice for each and every date---Validity---Court had given specific date and reasonable time to plaintiff either to engage another counsel or pursue his earlier counsel to proceed with the case---Duty of plaintiff was to pursue his case vigilantly and engage another counsel and not to act recklessly---Court in such circumstances was not bound to send notice to plaintiff for each and every date---Such application was dismissed in circumstances.

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

----O. IX, R. 9---Dismissal of suit for non-prosecution---Restoration---Words "sufficient cause' as used in O.IX, R.9, C.P.C.---Connotation.

There is no strait-jacket (precise) formula for determining what "sufficient cause" is. The expression "sufficient cause" so as to grant relief under order IX, Rule 9, C.P.C. has been left to the wisdom, good sense and discretion of the court. The words "sufficient cause" for restoration of suit is not susceptible of any exact definition and no hard and fast rule can be laid down. As to what is "sufficient cause" depends on the facts and circumstances of each case. Parameter of each case would primarily be its own facts, it would have to be taken into consideration for determining as to whether "sufficient cause" was shown or not. The court is to be satisfied as to the sufficiency of good cause and it has to be subjective satisfaction. Where suit is dismissed for default, it is the duty of that party or counsel to show sufficient cause as to why case was not prosecuted on the relevant date. Mere engagement of counsel does not absolve the party of his responsibility as it was as much his duty as that of counsel engaged by him to see whether the case was properly and diligently prosecuted or not, and if counsel was lacking his sense of responsibility, it is the party who engaged him should suffer and not the other side.

Sufficient cause has been given a meaning to embrace all relevant circumstances. The question would be whether the plaintiff honestly intended to be in court and did his best to get there in time, but for intervention of some inevitable cause he failed to appear, which is sufficient cause inviting order for restoration.

Muhammad Ismail v. Faiz Bakhsh and others 1987 SCMR 732; Muhammad Qasim and others v. Moujuddin and others 1995 SCMR 218; Muhammad Aslam v. Agricultural Development Bank of Pakistan 2003 CLD 898; Al-Waqar Corporation v. Rice Export Corporation and another 2011 MLD 266; Province of Sindh and another v. Anwar SBLR 2012 Sindh 1021; Messrs United Bank Ltd. and others v. Messrs Plastic Pack (Pvt.) Ltd. and others 2012 CLC 229; Jangoo v. Fasahatullah Khan and others 2012 CLC 556; Pehalwan Goth Welfare Council v. District Co-ordination Officer (DCO), Karachi and others PLD 2012 Sindh 110; Sheikh Muhammad Saleem v. Faiz Ahmad PLD 2003 SC 628; Abdul Karim and 2 others v. Rehm Ali 1991 MLD 63; Mst. Ghulam Sakina and others v. Karim Baikhsh and others PLD 1970 Lah. 412; Sabzal and others v. Bingo and others PLD 1989 Kar. 1; Mian Muhammad Asif v. Fahad and another 2009 SCMR 1030 and Abdul Rashid v. Director-General, Post Offices, Islamabad and others 2009 SCMR 1435 ref.

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

----O. IX, R.9---Limitation Act (IX of 1908), S.5 & Art.163---Suit dismissed for non-prosecution---Restoration---Limitation--- Delay, condonation of--- Scope--- Plaintiff would be obliged to show sufficient cause for his previous non-appearance and explain delay of each and every day---Principles.

For the purposes of restoration of suit and condonation of delay, the plaintiff has to demonstrate the sufficient cause whereby he was prevented not to diligently pursue the suit, while for the purposes of condonation of delay under section 5 of the Limitation Act, 1908 delay of each and every day has to be explained. If condonation is allowed, even then it does not mean that restoration of suit will also be achieved, but this remedy is subject to the proof of sufficient cause.

Sufficient cause has been given a meaning to embrace all relevant circumstances. The question would be whether the plaintiff honestly intended to be in court and did his best to get there in time, but for intervention of some inevitable cause he failed to appear, which is sufficient cause inviting order for restoration.

Muhammad Ismail v. Faiz Bakhsh and others 1987 SCMR 732; Muhammad Qasim and others v. Moujuddin and others 1995 SCMR 218; Muhammad Aslam v. Agricultural Development Bank of Pakistan 2003 CLD 898; Al-Waqar Corporation v. Rice Export Corporation and another 2011 MLD 266; Province of Sindh and another v. Anwar SBLR 2012 Sindh 1021; Messrs United Bank Ltd. and others v. Messrs Plastic Pack (Pvt.) Ltd. and others 2012 CLC 229; Jangoo v. Fasahatullah Khan and others 2012 CLC 556; Pehalwan Goth Welfare Council v. District Co-ordination Officer (DCO), Karachi and others PLD 2012 Sindh 110; Sheikh Muhammad Saleem v. Faiz Ahmad PLD 2003 SC 628; Abdul Karim and 2 others v. Rehm Ali 1991 MLD 63; Mst. Ghulam Sakina and others v. Karim Baikhsh and others PLD 1970 Lah. 412; Sabzal and others v. Bingo and others PLD 1989 Kar. 1; Mian Muhammad Asif v. Fahad and another 2009 SCMR 1030 and Abdul Rashid v. Director-General, Post Offices, Islamabad and others 2009 SCMR 1435 ref.

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

----Ss. 7(2), 22 & 27---Civil Procedure Code (V of 1908), O.IX, R. 9 & O. XVII, R.17---Application for restoration of suit dismissed for non-prosecution---Jurisdiction of Banking Court---Scope---Banking Court, in absence of procedure provided in respect of any matter in Financial Institutions (Recovery of Finances) Ordinance, 2001, would have to follow procedure laid down in C.P.C.---Order of dismissal of suit for non-prosecution neither decided rights of parties on merits nor was a judgment, decision or decree liable to be challenged in appeal---Such order could not be considered a decision under O.XVII, R. 3, C.P.C.---Provision of S. 27 of Financial Institutions (Recovery of Finances) Ordinance, 2001 did not bar Banking Court from restoring suit, which had been dismissed for non-prosecution without touching merits of case---Banking Court before restoring suit would be bound to see whether sufficient cause for previous non-appearance had been shown or not and whether such application was barred by limitation, if so, then whether delay of each and every had been explained or not---Principles.

Messrs Makran Fisheries (Pvt.) Limited v. Platinum Co. 2006 CLD 52 and Shaikh Kamran Maqbool v. Bolan Bank Limited through Manager and another 2006 CLC 163 ref.

Muhammad Anwar Tariq for Plaintiff.

Yousuf Naseem for Defendant No.1.

Khawaja Shams-ul-Islam for Defendant No.4.

Dates of hearing: 22nd November and 7th December, 2012.

2013 C L D 1110

[Sindh]

Before Nadeem Akhtar, J

Messrs CRESCENT STEEL AND ALLIED PRODUCTS LIMITED---Plaintiff

Versus

Messrs SUI NORTHERN GAS PIPELINE LIMITED and another---Respondents

Suit No.1107 of 2011, decided on 10th December, 2012.

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

----S. 20---Appreciation for filing of arbitration agreement in court---Duty of court---Court in such case would have to examine existence or non-existence of arbitration agreement and dispute(s) between the parties---Denial of assertions made by either side would prove existence of dispute---Arbitrator appointed by parties would be only an independent and impartial forum in case of such agreement---Principles.

Messrs Friends Trading Co. v. Messrs Muhammad Usman-Moula Bux PLD 954 Sindh 56; Ghulam Ishaq Khan Institute of Engineering, Science and Technology and another v. Messrs Hassan Construction Co. (Pvt.) Ltd. Engineer and Consultants 1998 CLC 485; Muhammad Umar v. Yar Muhammad through his Legal Heirs and others 2009 CLC 348 and Muhammad Azam Muhammad Fazil and Co., Karachi v. Messrs N. A. Industries, Karachi PLD 1977 Kar. 21 rel.

(b) Administration of justice---

----No party could be judge of his own cause.

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

----S. 2(a)---"Contract" and "arbitration agreement"---Distinction.

Where the parties enter into a contract, which incorporates an arbitration clause, it constitutes an arbitration agreement. However, the arbitration clause and the contract which incorporates it are two distinct contracts. The arbitration clause provides an agreement by the parties to resolve present and future disputes by arbitration, whereas the contract which incorporates the arbitration clause by reference is the underlying contract. Dispute between the parties arises from the underlying contract and not from the arbitration agreement.

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

----S. 20---Civil Procedure Code (V of 1908), O. XXXIX, Rr.1 & 2---Arbitration agreement with intervention of court---Dispute between parties regarding non-performance of contract---Application for restraining first defendant from encashing performance guarantee and also second defendant from making payment thereunder to first defendant till decision of such dispute by arbitrator---Applicant's plea was that quantum of liquidated damages, if any, required decision on basis of evidence; and that question yet requiring decision was as to whether or not first defendant was entitled to such damages---Validity---Plaintiff as tentative measure had submitted such guarantee equivalent to quantum of such damages claimed by first defendant---Determination of quantum of such damages and fulfilment of conditions for encashment of such guarantee being a dispute between parties would be decided by arbitrators to be appointed in terms of arbitration agreement---First defendant had yet to prove losses suffered by him in order to become entitled to such damages, thus, he could not be allowed to encash such guarantee before conclusion of arbitration proceedings---High Court accepted such application of plaintiff in circumstances.

Messrs Jamia Industries Limited v. Messrs Pakistan Refinery Limited PLD 1976 Kar. 644; Messrs Petrosin Products (Pvt.) Limited and others v. Government of Pakistan through Secretary, Privatization Commission of Pakistan, Ministry of Finance, Government of Pakistan, Islamabad and 3 others 2000 MLD 785; Messrs Zeenat Brother (Pvt.) Ltd. v. Aiwan-e-Iqbal Authority through Chairman, Aiwane Iqbal Complex, Lahore and 3 others PLD 1996 Kar. 183; Standard Construction Company (Pvt.) Ltd. v. Pakistan through Secretary, Ministry of Communication, Islamabad and 5 others 2010 CLD 360 and Standard Construction Company (Pvt.) Ltd. v. Pakistan through Secretary, M/o Communications and others 2010 CLD 196 rel.

Chaudhry Atif for Plaintiff.

Siddique Shahzad for Defendant No.1.

Gazain Magsi for Defendant No.2.

Date of hearing: 29th November, 2012.

2013 C L D 1144

[Sindh]

Before Mushir Alam, C.J. and Muhammad Shafi Siddiqui, J

MEGA CURRENCY EXCHANGE COMPANY (PVT.) LTD. through Director and Attorney of Chief Executive---Petitioner

Versus

Senior MANAGER COMMERCIAL C.A.A. and 5 others---Respondents

Constitutional Petition No. D-2524 of 2012, decided on 13th December, 2012.

(a) Constitution of Pakistan---

----Art. 199---Constitutional petition---Laches---Rejection of petitioner's tender and acceptance of respondent's tender by Authority---Constitutional petition challenging such decision of authority filed after five months of issuance of licence to the respondent---Petitioner had not explained such delay of five months---High Court dismissed petition on ground of laches in circumstances.

(b) Tender---

----Procurement of services through biding---Duty of public functionaries/procuring agencies, stated.

Public functionaries/procuring agencies are obliged to procure services by means of open competitive, transparent and unambiguous biding. They are performing duty as a sacred trust, which require them to protect public interest and interest of Authority and not to extend undue favour.

S. Haider Imam Rizvi for Petitioner.

S. Toqeer Hassan for Respondents Nos. 1 to 4.

Munir-ur-Rehman, D.A.-G. for Respondent No.5.

Ayaz Ali Chandio and Shafique Ahmed for Respondent No.6.

Date of hearing: 30th November, 2012.

2013 C L D 1165

[Sindh]

Before Aqeel Ahmed Abbasi and Farooq Ali Channa, JJ

ATIF MANZOOR---Appellant

Versus

FAYSAL BANK LIMITED through President and 4 others---Respondents

Ist Appeal No.19 of 2011, decided on 18th October, 2012.

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

----Ss. 9 &10---Suit for recovery---Application for leave to defend suit was dismissed and suit was decreed---Validity---Plaintiff Bank had complied with provisions of S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and its claim was duly supported by all finance documents while the defendant, in his application for leave to defend suit, could not raise any substantial legal ground to dislodge claim of the Plaintiff Bank---Defendant instead took a false plea that he was not the Director of the company that availed the finance facility, which claim was false in view of the certified copy of Form 29 issued by Securities and Exchange Commission Pakistan---Further contention of defendant which merely was an objection alleging signatures on one or two documents were doubtful, which in the absence of any other substantial legal ground, would not justify filing the leave to defend application by a customer, and the same could not be treated as proper compliance with the provisions of S.10 of the Financial Institutions (Recovery of Finances) Ordinance 2001---Filing of application for leave to defend the suit, in circumstances, was not justified.

American Express Bank Ltd. v. Adamjee Industries Limited 1995 CLC 880; Al-Hadayat Textile through Proprietor and 2 others v. Soneri Bank Limited 2003 CLD 105 and Kamran Zali v. Messrs Union Bank Limited and 4 others 2002 CLD 876 distinguished.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 rel.

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

----Ss. 9 & 10---Suit for recovery---Application for leave to defend suit---Burden of proof---Scope.

Once a financial institution files a suit for recovery, after having complied with the requirements of section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001, by furnishing duly certified statement of account, the documents relating to the grant of finance and the detail of amount of finance availed by the customer, amounts repaid, with the dates of payments and the amount of finance and other amounts relating to the finance payable up to the date of institution of suit, the burden to dislodge the said claim shifts upon the customer who is required to file leave to defend application in terms of section 10 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in the form of written statement containing summary of the substantial question of law as well as of facts in respect of which evidence is required to be recorded. It shall also specify details mentioned in section 10(4) of the Financial Institutions (Recovery of Finances) Ordinance 2001.

Asghar Bangash for Appellant.

M. Arshaque Memon for Respondent No.1.

Date of hearing: 18th October, 2012.

2013 C L D 1213

[Sindh]

Before Nadeem Akhtar, J

CHIEF RESIDENT REPRESENTATIVE WAPDA---Plaintiff

Versus

Messrs TRANSGLOBE SHIPPING SERVICES through Sole Proprietor---Defendant

Suit No.1266 of 2009, decided on 30th November, 2012.

Arbitration Act (X of 1940)---

----Ss. 14 & 30---Limitation Act (IX of 1908) Arts. 178 & 158---Filing of award by arbitrator---Object and scope---Purpose of S.14(1) of the Arbitration Act, 1940 relating to notice of making of award was only to inform the parties that an award had been made so that they may file an application for filing of the award in court and such application had to be filed within ninety days of the service of notice of making the award under Art.178 of the Limitation Act, 1908---Object of notice of filing the award was to enable the parties to file an application for setting aside the award for which the limitation under Art.158 of the Limitation Act, 1908 was 30 days---No provision existed in the Arbitration Act, 1940 which cast a duty on the arbitrator to supply copies of the award and its annexures to the parties---Arbitrator was required under law to only file the award in the court whereafter his responsibility came to an end---After filing of the award notices were issued to the parties by the court and if the parties were duly served, then in order to safeguard their interest, it became the duty of the parties to pursue the matter vigilantly by obtaining copies of such documents which had been received them---Application of the defendant was dismissed, in circumstances.

Badar Alam for Plaintiff.

Abdul Haleem Siddiqui for Defendant.

2013 C L D 1229

[Sindh]

Before Muhammad Ali Mazhar, J

Mrs. SYMA MAHNAZ VAYANI and others---Petitioners

Versus

MOLASSES EXPORT COMPANY PVT. LTD.---Respondent

J. M. No.10 of 2012, decided on 31st January, 2013.

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

----Ss. 305 & 306---Winding up of a company---Scope and object stated.

Object of winding up of a company is to release the assets of the company and pay its debts in accordance with law. In winding up cases, utmost endeavor should be made for survival of the corporate sector rather than to dismantle it. A company may be wound up on any of the grounds mentioned in section 305 of the Companies Ordnance, 1984. The conjoint effect of sections 305 and 306 of the Companies Ordinance, 1984 made it clear that the court had discretion to order or not to order the winding up of a company after taking into consideration relevant facts. Winding up proceedings cannot be used as a lever for pressurizing a company to pay its disputed debts. For winding up a company, the court has to consider whether the substratum of the company is gone, the object for which it was incorporated to carry on the business except at loss and no reasonable hope that the object of trading at profit can be attained and the existing or probable assets are insufficient to meet liabilities.

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

----Ss. 305, 306 314, 152 & 79---Winding up of company---Grounds on which a company may be wound up---Scope---Petitioners who were legal heirs of deceased shareholder and director of respondent company, sought winding up of company on various grounds including that the shares of the deceased had not been transferred to the petitioners; that the respondents were siphoning funds from the company illegally and that assets of the company were being sold illegally---Validity---Petitioners admittedly claimed shareholding of 16.72% which had still not been transferred in their names and the petitioners had neither pleaded the case of winding up on allegation that the company was conducting its business in a manner oppressive to its members nor on this ground had the petitioners filed the winding up petition---Non-transfer of shares to the petitioners was not a ground available for winding up a company under S.305 of the Companies Ordinance, 1984; and said grievance of the petitioners was to be dealt with by Ss.79 & 152 of the Companies Ordinance, 1984---Petitioners had alleged that the company had stopped monthly disbursement according to a family arrangement with the petitioners and other shareholders---Said allegation could not be considered a ground of winding up the company especially since no other shareholder had come forward to support the allegation---In the present case, keeping in view the status of the petitioners, it could not be said that petitioners had been excluded from the management of the company and that there existed a state of deadlock or justifiable lack of confidence in the management of the company which may be treated as justifiable and equitable ground for dissolving the respondent company---Petitioners had further alleged that major assets of the respondent company had been sold out, however, the petitioners were neither shareholders nor on the Board of Directors and for claiming participation in the management of the company, it was necessary that the shares of their predecessor be first transferred in the petitioners' names---Books of account could also only be opened by the members/shareholders of the company, which the petitioner at present were not---Jurisdiction to wind up a company was circumscribed by limitation laid down by S.314 of the Companies Ordinance, 1984 and usually the discretion to wind up was to be exercised in extreme cases and the court in the first instance was to find ways and means to remedy the wrong and pass orders which were appropriate to regulate the conduct and affairs of the company---No case was therefore made out by the petitioners for winding up the company---High Court dismissed petition for winding up the respondent company with the direction that shares of the predecessor of the petitioners be transferred in the names of the petitioners under S.152 of the Companies Ordinance, 1984.

Ladli Prasad Jaiswal v. The Karnal Distillery Co. Ltd. PLD 1965 SC 221; Messrs Nagina Films Ltd. v. Usman Hussain and others 1987 CLC 2263; Muhammad Hussain v. Dawood Flour Mill and others 2003 CLD 1429; Aminuddin v. Messrs Azad Friends & Co. 2004 CLD 1064 and Bayswater Trading Co. Ltd.'s case (1970) 1 All. E.R. 608 rel.

Mst. Khursheed Ismail and others v. Unichem Corporation (Pvt.) Limited 1996 CLC 1863; Mansoor Ali Bandeali v. Marine Food Industries Ltd. and others 1985 CLC 1239; Ebrahimi v. Westbourne Galleries Ltd. and others 1973 Appeal Case No.361 House of Lords; Lundie Brothers Ltd.'s case 1965 I.W.L.R. 1051 and Shahamatullah Qureshi v. Hi-Tech Construction Pvt. Ltd. 2004 CLD 640 ref.

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

----Ss. 305 & 306---Winding up of company on ground of loss of substratum---Scope---Substratum of a company was deemed to be gone when the subject matter of the company was gone or the object for which the company was established had substantially failed or there was no reasonable hope that the object of trading at profit could be attained or that existing and probable assets were insufficient to meet the existing liabilities---Court would lean in favour of the company to be a going concern---Increase and decease or ups and downs was a common phenomenon, which could not be considered to be an indication of whether the company had lost its substratum and that it had become commercially insolvent.

(d) Companies (Court) Rules, 1997---

----Rr. 76 & 19---Companies Ordinance (XLVII of 1984) Ss.305, 314 & 438---Power of Company Judge to dispense with requirement of advertisement on admission of a petition for winding up a company---Scope---Although under R.19(2) of the Companies (Court) Rules, 1997 it is provided that except in case of a petition for winding up the company, the Judge may if he thinks fit, dispense the requirement of advertisement, however, R.3 of the Companies (Court) Rules, 1997 provided that nothing in the said Rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of process of court---Court, in winding up cases, therefore, may dispense with the requirement of advertisement on case to case basis at the time of admission of the petition and it was permissible under R.3 of the Companies (Court) Rules, 1997 to do so in cases where harassment could be caused to the company or where business of the company was bound to suffer.

Kerala State Industrial Development Corporation Ltd. v. Poonmudi Tea Pack Ltd. 1988 Company Cases 575 and National Conduits (P.) Ltd. v. S.S. Arora 1967 Company Cases 786 rel.

Ijaz Ahmed and Aijaz Shirazi for Petitioners.

Arshad M. Tayebaly for Respondent.

Dates of hearing: 10th October, 2nd and 6th November, 2012.

2013 C L D 1254

[Sindh]

Before Syed Muhammad Farooq Shah, J

Messrs SERI SUGAR MILL through Manager Administration and Attorney---Applicant

Versus

Haji KHAWAND BUX GHULAM MUHAMMAD---Respondent

R.A. No.158 of 2011, decided on 21st November, 2012.

Negotiable Instruments Act (XXVI of 1881)---

----S. 13---Sale of Goods Act (III of 1930), S. 2(2)---Civil Procedure Code (V of 1908), S.115 & O.XXXVII, Rr. 1, 2, 3---Suit for recovery of money---Negotiable instrument---Delivery order---Plaintiff sought recovery of money in summary proceedings on the basis of delivery order and Trial Court granted leave to defendant to appear and defend the suit---Validity---Plaintiff, if at all, might have claimed his right as prayed for in the suit, as per entitlement, in accordance with law but not by way of filing suit under O.XXXVII, R.3, C.P.C. and could proceed like ordinary suit, according to normal procedure prescribed under Civil Procedure Code, 1908---High Court in exercise of revisional jurisdiction set aside order passed by Trial Court as corum non judice---Revision was allowed in circumstances.

Messrs National Security Insurance Company Limited and others v. Messrs Hoechst Pakistan Limited and others 1992 SCMR 718 ref.

Noor Ahmed Memon for Applicant.

Respondent in person.

2013 C L D 1263

[Sindh]

Before Muhammad Ali Mazhar, J

NAJAMUDDIN ZIA and another---Plaintiffs

Versus

Mst. ASMA QAMAR and others---Defendants

C.M.A. No.7010 of 2012 in Suit No.1458 of 2011, decided on 7th December, 2012.

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

----Ss. 263, 290 & 292---Civil Procedure Code (V of 1908), O.VII, R.11---Specific Relief Act (I of 1877), Ss. 42 & 54---Suit for declaration, permanent injunction and damages---Plaintiff's plea as Director of company that defendants were grouping together detrimental to interest of company; that plaintiff was stopped from exercising powers and functions as Director; that defendants had shut down factory of company causing losses; that bank accounts were not being operated according to prudential regulations; that salary of employees had not been paid; that defendants had transferred production of company to their own undertaking; and that in case, defendants were not restrained, then irretrievable loss and damage would cause to the company, its shareholders and Directors including plaintiff; that plaintiff claimed damages and appointment of Receiver to take over the company---Defendants application under O.VII, R.11, C.P.C. for rejection of plaint on ground that plaintiff's case fell within ambit of Ss. 263, 290 & 292 of Companies Ordinance, 1984, thus, he could avail proper remedy thereunder before Company Judge of High Court---Validity---Plaintiff had not prayed for investigation of the affairs of company, thus, he could not be asked to avail remedy under S.263 of Companies Ordinance, 1984---Defendants were not Directors of company---Provision of S.290 of the Ordinance could not be invoked for settlement of disputes between the parties inter se as said provision essentially intended to control and prevent oppression of rights of minority shareholders and mismanagement by majority shareholders---Disputed questions of facts raised by plaintiff requiring evidence could not be made subject matter of proceedings under S.290 of Companies Ordinance, 1984---Plaintiff had also claimed damages, which could not be decided without recording evidence---Plaintiff having claimed multiple reliefs, plaint could not be rejected in piece meal---Rejection of plaint on technical ground would amount to deprive plaintiff from his legitimate right of availing remedy in undoing wrong done in respect of such right---Provision of O.VII, R.11, C.P.C. could not be invoked in case of existence of substantial question of fact or law and proper course in such case would be to frame issues thereon and decide same on merit on basis of evidence---High Court dismissed the application in circumstances.

Jogesh Chandra Majumdar v. Durga Mohan Chakrabarty and others AIR 1932 Calcutta 714; Karnal Distillery Co. v. Ladli Parshad AIR 1958 Punjab 190; Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and others PLD 1996 SC 543; Haroon Ayoob Abdul Karim v. Sulleman Ahmed and others 1983 CLC 162; AIR 1941 Madras 354; 2003 SCMR 132; Messrs Chalna Fibre Co. Ltd. Khulna and others v. Abdul Jabbar and others PLD 1968 SC 381 and Muhammad Yasin Fecto v. Muhammad Raza Fecto and others 1998 CLD 237 ref.

Registrar of Companies v. Pakistan Industrial and Commercial Leasing Ltd. and others 2005 CLD 463; AIR 1932 Calcutta 714; AIR 1958 Punjab 190; PLD 1996 SC 543; PLD 1968 SC 381; 1998 CLD 237 and Mst. Bano alias Gul Bano and others v. Begum Dilshad Alam and others 2011 CLC 88 rel.

(b) Administration of justice---

----Each case is to be decided on its own facts.

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

----S. 290---Jurisdiction of Company Judge under S.290 of Companies Ordinance, 1984, invocation of---Essential conditions stated.

In order to invoke the jurisdiction of Company Judge of High Court under section 290, Companies Act, 1984 it must be made out that the company's affairs are being conducted in a manner prejudicial to the public interest or oppressive to any member or members of the company, which may justify the winding up order. The provisions are essentially intended to control and prevent oppression of the rights of the minority shareholders and mismanagement by majority shareholders. The word "oppression" must be given its ordinary sense. "Oppression" complained of should involve visible departure from the standard of fair dealing and the violation of conditions of fair play on which every shareholder, who entrusts his money to a company, is entitled to rely. The term "oppression" has not been defined in the Companies Ordinance, 1984, and it is left to the court to decide on the facts of each case whether there is a case of "oppression" or not, which calls for action under section 290, Companies Ordinance, 1984.

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

----O. VII, R. 11---Plaint containing multiple reliefs, rejection of---Scope---Plaint could not be rejected in piecemeal.

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

----O. VII, R.11---Rejection of plaint on technical ground---Effect stated.

The rejection of plaint on technical ground amounts to deprive a person from his legitimate right of availing legal remedy in undoing the wrong done in respect of such right.

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

----O. VII, R.11---Plaint involving substantial question of facts or law, rejection of---Scope stated.

In case of substantial question of facts or law, the provisions of O.VII, R.11, C.P.C. cannot be invoked, rather the proper course for the court in such cases is to frame issues on such questions and decide the same on merits in the light of evidence.

Mst. Bano alias Gul Bano and others v. Begum Dilshad Alam and others 2011 CLC 88 rel.

Faisal Kamal for Plaintiffs.

Sami Ahsan for Defendants Nos.1, 2 and 4.

Khalid Dawoodpota for Defendant No.3.

Salman Hamid Advocate for Intervener.

Date of hearing: 18th October, 2012.

2013 C L D 1273

[Sindh]

Before Maqbool Baqar and Muhammad Shafi Siddiqui, JJ

Syed MUHAMMAD FURQAN---Applicant

Versus

The STATE---Respondent

Criminal Bail Application No. 380 of 2012, decided on 18th April, 2012.

Criminal Procedure Code (V of 1898)---

----S. 497(2)--- Penal Code (XLV of 1860), Ss.409, 420, 109, 34 & 477-A---Central Depositories Act (XIX of 1997), S.24---Securities and Exchange Ordinance (XVII of 1969), S. 16(c)---Criminal breach of trust by banker, merchant or agent, cheating and dishonestly inducing delivery of property, abetment, common intention, falsification of accounts, handling book-entry securities without authority, prohibition and restriction on pledging customers' securities---Bail, grant of---Further inquiry---Allegation against the accused [alleged director of a company (brokerage house) dealing in securities] was that he, in connivance with the co-accused and different banks, unauthorizedly and illegally, pledged shares of various clients, including those of the complainant, with the banks to secure finances for the company, and as a consequence of default committed by the company, the banks sold the pledged shares causing colossal losses to the complainant and other clients of the company---Prosecution contended that in terms of S.24 of the Central Depositories Act, 1997, a stock broker was not authorized to pledge shares with any bank/financial institution and/or Stock Exchange without authorization from the sub-account holder, and that such restriction was also imposed by S.16(c) of Securities and Exchange Ordinance, 1969---Contentions of the accused were that he was a paid employee of the company and was working for the company as a General Manager and that he had resigned from his job with the company---Validity---Investigation officer had admitted that none of the witnesses, whose statements were recorded under S.161, Cr.P.C., had alleged any personal involvement of the accused in the entire transaction; that he had not been able to lay hands on any document which might implicate the accused directly, and that all relevant documents pertaining to the transactions/scam in question had been signed and executed by the two absconding co-accused---Neither the complainant had made any allegation against the accused nor he nominated the accused in the F.I.R., but the accused had been nominated as a co-accused in the challan---Accused held merely 0.02% shares in the capital of the company, therefore, it seemed that he was merely a paid employee---Accused remained on physical custody of the Federal Investigation Agency (FIA) for about 11 days, but nothing incriminating could be procured and/or discovered against him---None of the documents pertaining to the transaction in question had been executed and/or signed by the accused---Holding further inquiry into the guilt of the accused was essential---Accused was admitted to bail, in circumstances.

Shahab Sarki and Zulfiqar Ali Langah for Applicant.

Syed Ashikue Raza, D.A.-G. along I/O Sub-Inspector Mansoor Ali Khan, FIA, Corporate Crime Circle for the State.

2013 C L D 1280

[Sindh]

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

SULTAN-UL-ARFEEN and 6 others---Petitioners

Versus

DISTRICT OFFICER (REVENUE), CITY DISTRICT GOVERNMENT, KARACHI and 5 others---Respondents

C.P. No.D-2427 of 2009, decided on 1st November, 2011.

(a) Pakistan Telecommunication (Re-organization) Act (XVII of 1996)---

----S. 23---West Pakistan Land Revenue Act (XVII of 1967), Ss. 80 & 91---Companies Ordinance (XLVII of 1984), Ss.111 & 112---Civil Procedure Code (V of 1908), S.47---Constitution of Pakistan, Art. 199---Constitutional petition---Recovery of outstanding licence fee from company through its directors---Validity---Liability of a company registered under Companies Ordinance, 1984 for being a separate legal entity could not be treated as that of its directors/shareholders or foisted on them merely on account of contract having been signed by any of them for and on behalf of company---Coercive recovery process under West Pakistan Land Revenue Act, 1967 could be invoked against a person against whom liability was adjudicated and/or established---Impugned liability prima facie was against company of which petitioners were directors---If the Authority could establish that petitioners had used corporate shield to defraud authority and/or appropriated the property of company, then Authority could follow such assets in hands of petitioners and/or any other person by establishing so---High Court struck down impugned demand while observing that Authority would be at liberty to initiate appropriate proceedings against company for recovery or its winding up or follow its assets in hands of third party including petitioners.

Ikram Bux Service v. Board of Revenue PLD 1963 SC 564; Ayaz Durrani v. Government of Pakistan PLD 2000 Lah. 414; Shamsuddin v. Federation of Pakistan 1995 CLC 299; Ehtisham Ghazi v. Azharuddin 2001 YLR 526; A Rehman v. Tehsildar Lahore 1993 CLC 1222; Tariq Saed Saigal v. Dist. Excise and Taxation 1982 CLC 2387; Hamdard Dawakhana v. K.B. Joseph and Co. Ltd. PLD 1971 Kar. 279; Faiz Najmuddin Abdul Ali v. Capital Development Authority PLD 1976 Kar. 1084; Salmon v. Salmon 1897 AC 22; Shaikh Datar Cotton Industries and Oil Mills v. Mahmood Pvt. Ltd. 2006 CLD 191; Desiraju Vankatakarishna Sarma Re, (1955) 25 Comm. Cases 32; Parameshwari Das v. Collector of Bulandshahr (1955) 25 Com. Cases 343; G.C. Mehrotra v. Deputy Collector (Collection) Sales Tax (1998) 93 Com. Cases 617; Kallash Prasad Modi v. Chief General Manager Orissa Telecommunications AIR 1994 Orissa 98; Arshad Saleem v. Civil Aviation Authority 2011 CLD 1171; Abdul Latif v. Government of West Pakistan and others PLD 1962 SC 1047 and Muhammad Akber Cheema v. The Province of West Pakistan 1984 SCMR 1047 rel.

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

----Ss. 111 & 112---Contract Act (IX of 1872), Ss. 124 & 126---Financial liability of company--- Not treatable as liability of its directors and/or shareholders---Exceptions stated.

Liability of the company cannot be treated or foisted as the liability of the directors and/or its shareholders merely because any contract is signed by any of the directors/shareholders and or any other person authorized by the company for and on behalf of the company, unless of course in situation where directors or persons other than the company could also be held personally liable firstly; where the director/any other person had executed some documents acknowledging and or assuming the liability of the company upon himself in his personal capacity as surety, guarantor or indemnifier for the company as per provisions of Contract Act, 1872 (such was normal and usual in banking and commercial transition). Secondly; where the creditor or regulator as the case may be before extending any financial benefit, licence, permit, or concession in any form, which carries recurring financial liability or obligation seek from the director and or member, who proposes a person for election or appointment to the office of director, shall add to the proposal a statement that the liability of the person holding that office will be unlimited and the officers of the company or any of them shall before that person accepts the office or act therein, give him notice in writing that his liability will be unlimited (see section 111 of the Companies Ordinance, 1984). Thirdly; by securing a special resolution in terms of section 112 of the Companies Ordinance, 1984 thereby liability of director/s could be made unlimited, provided the memorandum so permits and in case memorandum does not so permit, memorandum could be amended to achieve such objectives. And fourthly; was a situation that made the liability of director/s unlimited, was where the business of the company was being consciously carried on with less than minimum statutory strength of directors that was to say less than three in case of public or in case of private company less than two members (except in case of single member company) for more than six months, in such an eventuality, such directors were severally liable for the payment of whole debts of the company contracted during that period (see section 47 of the Code of Civil Procedure, 1908).

Ikram Bux Service v. Board of Revenue PLD 1963 SC 564; Ayaz Durrani v. Government of Pakistan PLD 2000 Lah. 414; Shamsuddin v. Federation of Pakistan 1995 CLC 299; Ehtisham Ghazi v. Azharuddin 2001 YLR 526; A Rehman v. Tehsildar Lahore 1993 CLC 1222; Tariq Saed Saigal v. Dist. Excise and Taxation 1982 CLC 2387; Hamdard Dawakhana v. K.B. Joseph and Co. Ltd. PLD 1971 Kar. 279; Faiz Najmuddin Abdul Ali v. Capital Development Authority PLD 1976 Kar. 1084; Salmon v. Salmon 1897 AC 22; Shaikh Datar Cotton Industries and Oil Mills v. Mahmood Pvt. Ltd. 2006 CLD 191; Desiraju Vankatakarishna Sarma Re, (1955) 25 Comm. Cases 32; Parameshwari Das v. Collector of Bulandshahr (1955) 25 Com. Cases 343; G.C. Mehrotra v. Deputy Collector (Collection) Sales Tax (1998) 93 Com. Cases 617; Kallash Prasad Modi v. Chief General Manager Orissa Telecommunications AIR 1994 Orissa 98 and Arshad Saleem v. Civil Aviation Authority 2011 CLD 1171 rel.

(c) West Pakistan Land Revenue Act (XVII of 1967)---

----Ss. 80 & 91---Recovery of amount/dues as arrears of land revenue---Denial of liability to pay such amount or its payment under protest---Remedy of aggrieved person stated.

A remedy is provided to a person, who pays the amount of arrears of land revenue under protest by filing a suit in a court from whose jurisdiction the recovery was effected. Such situation would only occur where the amount is paid under protest and not in cases where the liability is denied. The recovery of dues as arrears of land revenue by any Authority or Agency as may be permitted by law to do so or by the Government, the coercive measure could be employed after the claim has infact crystallized as dues and determined on the basis of some adjudication in accordance with law either by the authority if such powers were conferred under the law and where no such adjudication powers were conferred by filing legal proceedings.

Abdul Latif v. Government of West Pakistan and others PLD 1962 SC 1047 and Muhammad Akber Cheema v. The Province of West Pakistan 1984 SCMR 1047 rel.

Uzair Karamat Bhandari and Malik Muhammad Ejaz for Petitioners.

Yawar Farooqui for Respondents Nos.4 and 5.

Sarwar Khan, Learned D.A.-G.

Saifullah, Learned A.A.-G.

Shabbir Ahmed, Deputy Secretary and Baqar Raza, S.O., Finance Department.

2013 C L D 1291

[Sindh]

Before Nadeem Akhtar, J

EMIRATES GLOBAL ISLAMIC BANK LIMITED---Plaintiff

Versus

MUHAMMAD ABDUL SALAM KHAN---Defendant

Suit No.B-181 of 2009, decided on 21st December, 2012.

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

----Ss. 10(11) & 9---Suit for recovery---Dismissal of application for leave to defend---Effect---Under S.10(11) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, Banking Court had to pass judgment and decree in favour of plaintiff against defendant forthwith upon dismissal of defendant's application for leave to defend---Dismissal of application for leave to defendant, however, did not mean that entire claim of plaintiff in a suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001 should be decreed as prayed for by the plaintiff without examination of the claim of the plaintiff---Plaintiff became entitled to a decree only to the extent of such amount which was permissible by law---Markup more than the agreed rate and/or beyond the agreed period, could not be granted to financial institution and no other charges or amount could be allowed to the financial institution to which the customer had not agreed to.

Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337; Messrs United Bank Ltd. v. Banking Court No.II and 2 others 2012 CLD 1556; Mrs. Jawahar Afzal v. United Bank Ltd. 2003 CLD 119; Khawaja Muhammad Bilal v. Union Bank Ltd. 2004 CLD 1555 and Habib Bank Ltd. v. Messrs SABCOS (Pvt.) Ltd. 2006 CLD 244 rel.

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

----Ss. 2(d), 2(e) & 10---"Finance", meaning of---"Obligation"--- Scope--- Word "Charity"--- Connotation---Financing agreement stipulating obligation upon customer to pay a certain percentage to charity in case of default or delay in payment---Legality---Suit for recovery--- Application for leave to defend was dismissed---Plaintiff bank, in addition to principal amount and markup had also claimed an amount from defendant as "charity"---Contention of plaintiff was that defendant was liable to pay the said amount in view of the agreement between the parties, which stipulated that in case of delay or default committed by defendant, the defendant undertook to pay a certain percentage of the outstanding amount for the period of default, to a charity fund---Validity---Various finance facilities could be granted by a financial institution to the customer and all types of finance facilities had been defined in S.2(d) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Any facility or accommodation which was not covered by said S.2(d) of the Ordinance, would not be deemed to be, or called, "finance" and same could not be claimed under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Cause of action for filing a suit for recovery under the Financial Institutions (Recovery of Finances) Ordinance, 2001 accrued only upon breach of an obligation by any parties in relation to "finance" which was defined in the Ordinance as "finance"---"Charity" had neither been defined as "finance" in S.2(d) of the Ordinance, or elsewhere in the Ordinance---Essential feature of finance was that some amount of facility was granted by the financial institution to the customer in any form defined in S.2 of the Ordinance---Plaintiff Bank, in the present case, instead of granting any amount or facility, was claiming from the defendant an amount at fixed rate in the name of "charity" in case of delay in repayment or default by defendant---Penalty or penal charges in any form could not be claimed by the financial institution/plaintiff---Charity amount charged on the contract price was nothing but markup under the guise of charity---Charity fund, according to the agreement between the parties was constituted by the plaintiff Bank and was used by it at its sole discretion---Charity could not be claimed or charged compulsorily, or under compulsion---Charity, in legal parlance, was a gift---Charity or gift was something a donor gave or granted with his own free will, at his own discretion and according to his own choice and not under compulsion or dictates of others---Plaintiff Bank was not entitled to any amount or account of charity, and said claim was rejected by High Court---Suit was partially decreed, accordingly.

Dawood Islamic Bank Limited v. Admore Gas (Pvt.) Limited and 6 others 2012 CLD 263 rel.

(c) Words and Phrases---

----"Charity"---Connotation---Charity, in legal parlance, was a gift---Charity or gift was something a donor gave or granted with his own free will, at his own discretion and according to his own choice and not under compulsion or dictates of others---Charity could not be claimed or charged compulsorily, or under compulsion.

Taimur Mirza for Plaintiff.

Khaleeq Ahmed for Defendant.

Date of hearing: 10th December, 2012.

2013 C L D 1305

[Sindh]

Before Aqeel Ahmad Abbasi and Sadiq Hussain Bhatti, JJ

SHADMAN ELECTRONICS INDUSTRY PVT. LIMITED and 2 others---Appellants

Versus

NIB BANK LIMITED through Authorized Attorney---Respondent

Special High Court Appeal No.207 of 2011, decided on 18th December, 2012.

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

----Ss. 3 & 9---Suit for recovery of bank loan---Liquidated damages, grant of---Principle---Suit filed by Bank was decreed in favour of bank and against defendants jointly and severally in the sum of Rs.100,798,440 along with cost of funds and cost of suit, however liquidated damages were not granted---Validity---Single Judge of High Court was not cognizant of the fact that amount shown as recoverable from defendants in summary of accounts, filed by Bank, also included amount of liquidated damages at fix rate of 20%---Liquidated damages in absence of any evidence, showing actual amount of damages sustained by any party, particularly when cost of funds in terms of S.3 of Financial Institutions (Recovery of Finances) Ordinance, 2001, had already been granted along with cost of suit, could not be allowed at flat rate--- Division Bench of High Court upheld judgment and decree by modifying the same by deleting amount of liquidated damages i.e. Rs.16,799,740 claimed by Bank at flat rate of 20%---Appeal was disposed of accordingly.

Saudi-Pak Industrial and Agricultural Investment Company (Pvt.) Limited v. Messrs Allied Bank of Pakistan 2003 CLD 596 and Atif Manzoor v. Faysal Bank Limited and others I.A. No.19 of 2012 decided on 18-10-2012 rel.

Allah Ditta v. Ghulam Haider and others 1988 SCMR 964 and Muhammad Sultan and others v. Faqirullah and others 1991 CLC 1098 distinguished.

Khaleeq Ahmed for Appellants.

Mushtaq A. Memon for Respondents.

Date of hearing: 27th November, 2012.

2013 C L D 1313

[Sindh]

Before Mushir Alam, C.J.

Messrs EFU GENERAL INSURANCE LIMITED through Authorized Person/Attorney---Appellants

Versus

Messrs DUTY FREE SHOPS LTD.---Respondent

Appeal No.29 of 2010, heard on 27th August, 2012.

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

----Ss. 121 & 122---Civil Procedure Code (V of 1908) O.VII, R.11 & S.9---Insurance Tribunal, jurisdiction of---Scope---Suit for recovery of unpaid premium---Plaint of Insurance Company was returned by Trial Court on the ground that the same should be filed before the Insurance Tribunal constituted under Ss.121 & 122 of the Insurance Ordinance, 2000; and that the civil court had no jurisdiction in the matter---Validity---Insurance Tribunal under S.122(1) of the Insurance Ordinance, 2000 had been created to adjudicate upon claims as may be invoked by the Policy Holder(s) against an Insurance Company in respect of the policy of insurance---Courts below failed to take note of the fact that jurisdiction of Insurance Tribunal in terms of S.122(1)(a) of the Insurance Ordinance, 2000 could only be invoked by the "Policy Holder" and not the Insurance Company---Present suit had been filed by an Insurance Company against its Policy Holders and the only remedy that could be availed by the Insurance Company was by filing a suit before civil court in terms of S.9, C.P.C.---High Court set aside impugned order of Trial Court and remanded the case to Trial Court---Appeal was allowed, in circumstances.

State Life Insurance Corporation v. Rana Muhammad Saleem 1987 SCMR 393; Messrs EFU General Insurance Limited v. Fahim-ul-Haq 1997 CLC 1441 and 2001 Pakistan Supreme Court Cases 233 ref.

(b) Jurisdiction---

----Concurrent jurisdiction---Special Courts/Tribunals---Where two courts had concurrent jurisdiction on the subject matter of a controversy, the parties to the dispute may by agreement agree to invoke jurisdiction of one court; however, such proposition would not be attracted where jurisdiction was conferred exclusively with a Special Court or Tribunal created under a special enactment /statute.

1987 SCMR 393 distinguished.

(c) Constitution of Pakistan---

----Art. 175(2)---Jurisdiction of courts---No court shall have jurisdiction unless conferred on it by the Constitution or under any other law and parties could neither take away nor confer jurisdiction even by consent and/or agreement.

Naeem Ahmed and Naveed Ahmed for Appellants.

Nemo for Respondent.

Date of hearing: 27th August, 2012.

2013 C L D 1339

[Sindh]

Before Sajjad Ali Shah and Naimatullah Phulpoto, JJ

ALLIED BANK LIMITED through Authorised Officer---Applicant

Versus

SIKANDAR ALI and 5 others---Respondents

Criminal Revision No.130 of 2011, decided on 21st February, 2013.

Offences in Respect of Banks (Special Courts) Ordinance (IX of 1984)---

----S. 2(d)---Penal Code (XLV of 1860) Ss. 467, 468 & 471---Banking Companies Ordinance (LVII of 1962) S. 7---Interpretation of S.2(d) of the Offences in Respect of Banks (Special Courts) Ordinance 1984---Special Court (Banks) jurisdiction of---"Scheduled offence", definition and scope---Banking Company impugned order of Special Court (Banks) whereby its criminal complaint against respondents was dismissed under S.203, Cr.P.C. on ground that the complaint did not fall within the definition of "scheduled offence" under the Offences in Respect of Banks (Special Courts) Ordinance, 1984---Contention of Bank was that the respondents who had availed finance facility from the Bank, had manipulated documents from the Bank, in order to show that they had discharged their liability to the Bank and had redeemed their mortgaged properties from the charge of the Bank, and the same fell under the definition of "scheduled offence" under Offences in Respect of Banks (Special Courts) Ordinance, 1984---Validity---Perusal of manipulated documents revealed that the same were manipulated with the sole intent of depriving the Bank from recovery of outstanding liability and to unsecure the finance facility, which prima facie appeared to fall within the ambit of Ss. 467, 468 and 471, P.P.C.---Special Court (Banks) misled itself by holding that such manipulation did not indicate that the accused had allegedly committed any cheating fraud or manipulation in respect to or in connection with the business of the Bank, and had given a very narrow meaning to the words "business of the bank"---Special Court (Banks) erred by holding that its jurisdiction only extended to cases where some monetary fraud was committed in the transaction---Words "alleged to have been committed in respect of or in connection with the business of a bank" used in S.2(d) of the Ordinance, did not call for a narrow interpretation but embraced all such acts which pertained to banking transactions and withdrawal of an amount from a bank account was undoubtedly a banking transaction---Special Court (Banks) in order to determine whether an offence was triable as a "scheduled offence" or not had to examine whether the allegation which constituted such offence was in any manner linked with the business of the financial institution or not and had to keep in mind that with the passage of time the Financial Institutions had expanded their business as earlier banks dealt in documents only but now hypothetically dealt in goods also---Business which the banks engaged in was detailed in S.7 of the Banking Companies Ordinance, 1962---Respondents, in the present case, had manipulated the documents to show that they had paid their entire liability and had redeemed their properties from the charge for the bank, and since creation of charge/mortgaged to secure finance was business of the bank according to S.7(g) of the Banking Companies Ordinance, 1962, therefore, the same had a direct nexus with mortgage and the business of the bank, and fell exclusively within the jurisdiction of the Special Court as a scheduled offence---High Court set aside impugned order and directed Special Court (Banks) to bring complaint on record and issue process accordingly--- Revision was allowed, in circumstances.

A. Habib Ahmed v. M.K.G. Scott Christian and 5 others PLD 1992 SC 353; Karachi College Teachers Co-operative Housing Society v. Judicial Magistrate XVI, Karachi East and another 2011 YLR 1825; Ali Hussain and 2 others v. Presiding Officer Special Court for Offences in Respect of Banks Karachi and 3 others PLD 1989 Kar. 157 and Sikandar Ali v. The State 1989 PCr.LJ 614 rel.

Shaukat Hayat for Applicant.

Shiraz Iqbal Choudhry, Standing Counsel.

Sohail Qasim for Respondent No.5/SECP.

2013 C L D 1361

[Sindh]

Before Muhammad Ali Mazhar, J

FARID VIRANI and another---Plaintiffs

Versus

FEROZ VIRANI---Defendant

Suit No.438 and C.M.A. No.4582 of 2012, decided on 20th March, 2013.

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

----S. 34---Stay of legal proceedings by court due to subsistence of valid arbitration agreement between parties---Procedure and scope---Mere such agreement would not bar jurisdiction of court to entertain suit---Not obligatory on court in such case to refer dispute to arbitration, rather to stay suit or not being its discretion---Principles.

Section 34 of the Arbitration Act, 1940 relates to stay of proceedings brought before the court in the subsistence of valid agreement of arbitration. This Section aims at to make arbitration agreement effective and to prevent a party from going to court contrary to his own agreement. Where the provisions of this Section are attracted, the court may stay the proceedings requiring the matter to be referred to the Arbitrator. In order to stay the legal proceedings, it is necessary that the proceedings must have been commenced by a party to arbitration agreement against any other party to the agreement, the legal proceedings which is sought to be stayed must be in respect of a matter agreed to be referred, the applicant for stay must be a party to the legal proceedings, the applicant must have taken no steps in the proceedings after appearance, the applicant must also satisfy that he was not only at the time when the proceedings were commenced, but still ready and willing to do everything necessary for the proper conduct of the arbitration and the court must be satisfied that there is no sufficient reason why the matter should not be referred to arbitration. Mere existence of an arbitration clause in the agreement does not bar jurisdiction of civil court, but such clause only provides that where a party to an agreement commences legal proceedings against another party to the agreement, then such a party before filing a written statement or taking any other legal step in the proceedings may apply to the court to stay the proceedings.

The court has jurisdiction to entertain the suit, however, the court in its discretion may stay the suit, but the court has to consider whether discretion should be exercised in a particular case or not. Section 34 does not make it obligatory on the court to necessarily refer the dispute to arbitration and may exercise the discretion to stay the proceedings, if it is satisfied that there is no sufficient reason why the matter should not be referred to in accordance with the arbitration agreement.

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

----Ss. 42 & 54---Partnership Act (IX of 1932), Ss. 7 & 43---Civil Procedure Code (V of 1908), O. XX, R. 15 & O. XL, R.1---Arbitration Act (X of 1940), S. 34---Suit for accounts, appointment of receiver of dissolved firm, permanent injunction and damages---Existence of arbitration clause in partnership deed---Defendant's application under S.34 of Arbitration Act, 1940 to stay plaintiff's suit after filing written statement therein and subsequent suit against plaintiff for declaration, permanent injunction and damages---Validity---No specific condition relating to dissolution of firm was mentioned in such arbitration clause in agreement, rather parties had broadly agreed thereby to refer to arbitration any difference or dispute arising amongst partners or matter relating to interpretation of deed or touching or concerning partnership affairs, while matters not covered thereby would be governed by Partnership Act, 1932---Plaintiff in suit had not asked for dissolution of partnership firm, rather had alleged partnership to have already dissolved by giving its notice to defendant and intimation to Registrar of Firms---Defendant in his suit had sought various declarations regarding partnership firm, which was also subject matter of plaintiff's suit wherein application for its stay and reference of dispute to arbitration had been made by defendant---Absence of prayer in defendant's suit regarding reference of dispute to Arbitrator had made arbitration clause redundant and unworkable---Both suits involved complicated and overlapping issues of law and facts regarding partnership business---Staying plaintiff's suit and proceeding with defendant's suit would not advance cause of justice, rather would create legal complications---Arbitration would not be suitable method of determining questions raised by both parties---High Court dismissed defendant's application and fixed both suits together for hearing in circumstances.

Vawdrey v. Simpson [1896] 1.Ch 166; Walmsley v. White [1892] L.T. 433; Befild v. Bourne [1893] 1.Ch.521; Dhulia-Amalner M.T. v. Raychand Rupsi Dharamsi AIR 1952 Bombay 337; Ram Singh v. Ram Chand AIR 1924 Privy Concil 2; Sathappa v. Subrahmanyan AIR 1927 Privy Council 70; Ali Mohamedbhai v. Sadruddin PLD 1959 (W.P.) Kar. 452; Olver v. Hillier [1959] 2 All E.R.220; Sh. Khursheed Anwar v. Kaiser Arts and Crafts and 2 others 1988 CLC 570 and Ganesh Chandra v. Kamal Kumar AIR 1971 Calcutta 317 (V 58 C 65) ref.

Olver v. Hillier [1959] All E.R.220; Joplin v. Postlethwaite [1889], 61 L.T.629; Vawdrey v. Simpson [1896], 1 Ch. 166; AIR 1924 Cal. 796; AIR 1943 Pat. 53 and Messrs Eckhardt and Co. v. Muhammad Hanif PLD 1993 SC 42 rel.

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

----Ss. 7, 43 & 44---Partnership at will, dissolution of---Scope---In absence of any provision in contract regarding duration or determination of partnership, then same could be dissolved by giving its notice by any one or more of partners---Dissolution would take effect from date specified in such notice or from date of communication of such notice when no date was mentioned therein---Dissolution of partnership could not be refused by court in absence of any time frame in contract---Principles.

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

----S. 34--- Stay of legal proceedings due to existence of arbitration clause in agreement between parties---Scope---Court would not grant such stay in a case involving complicated questions of law and facts.

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

----S. 34---Partnership Act (IX of 1932), S. 44---Dissolution of partnership firm, legal proceedings for---Stay of such proceedings by court due to existence of arbitration clause in partnership agreement---Scope---Even a widest arbitration clause could not bar court to refuse to give such stay---Court could decide question as to whether or not dissolution of firm would be just and equitable---Principles.

The arbitration clause is a universal feature of almost all partnership agreements, the definite existence of arbitration clause in partnership agreement that all disputes between the partners falling within the scope of arbitration clause would have to be submitted to arbitration. The court can itself adjudicate upon matters of law where a partner applied for dissolution on the ground of its being just and equitable, even a widest arbitration clause was not able to prevent the court in refusing to give its stay. The court permitted the action to continue because whether it is just and equitable to dissolve a firm is entirely a matter for the court to decide.

An arbitration agreement will fall to be construed in the same way as in other contract. There will be assumption that all disputes will fall within the ambit of such an agreement. Accordingly, whilst the expression "disputes or difference" is likely to be construed more widely than the word, "dispute" appearing alone. In most instances the clause will either expressly or by necessary implication authorizes the Arbitrator to order dissolution of the firm.

Erach F.D. Metha Case AIR 1971 SC 1653; [1998] 1 W.L.R. 727 (C.A.); (2007) Bus. L.R. (686) (2010) 2 Lloyd's Rep. 209 (2005) 1 W.L.R. 2339 (CA); 2007) EWHC 1143 (Ch.) p. 342 (10-272 Lindley and Banks on Partnership, Nineteenth Edn. by Roderick I Anson Banks rel.

Arshad Tayebally for Plaintiffs.

Aziz A. Munshi and Abdullah Munshi for Defendant.

Dates of hearing: 16th, 30th November, 7th and 18th December, 2012.

2013 C L D 1398

[Sindh]

Before Muhammad Ali Mazhar, J

Messrs NIB BANK LIMITED---Decree-Holder

Versus

Messrs APOLLO TEXTILE MILLS LIMITED and 2 others---Judgment-Debtor

Execution Application No.84 of 2011 in Suit No.B-59 of 2008, decided on 2nd April, 2013.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, R. 66---Execution of decree with or without intervention of court---Mode---Scope---Suit upon announcement of judgment and decree by court would stand converted into execution proceedings automatically---Court had discretion to adopt any mode for execution of decree---Court or financial institution once having opted and invoked provision of O.XXI, C.P.C. could not later on avoid its express provisions relating to auction proceedings and issuance of public notice of sale through newspapers---Duty of court would be to protect rights of judgment-debtor by trying to fetch appropriate price through sale of his properties and would avoid its sale at throwaway price---Principles.

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

----O. XXI, R. 66---Execution proceedings---Sale of property by public auction---Essential conditions---Such sale, if made without fulfilling mandatory requirements of O.XXI, R. 66, C.P.C., would be unlawful and liable to be set aside---Principles.

Provisions of Order XXI, Rule 66, C.P.C. are mandatory in nature and without fulfilling basic requirements, if auction is taken place, it would not be considered to have been lawfully made.

The absence of mandatory notice to the judgment-debtors under Order XXI, Rule 66, C.P.C. is by itself sufficient for setting aside the court auction. Before calling upon Court Auctioneer to conduct auction, duty of Executing Court is to have satisfied itself that mandatory notice has been issued to judgment-debtors. Such contravention of provisions of Order XXI, Rule 66, C.P.C. by Executing Court would vitiate entire proceedings including sale, which is nullity in eyes of law.

The word "cause" appearing in Rule 66, Order XXI, C.P.C. requires a specific order of court, which produces the effect of drawing the proclamation envisaging the terms and conditions of sale. Thus, includes the settlement of conditions etc., by court itself or to approve those filed by parties after hearing them. It is duty of the court to cause to be made a proclamation of sale. Such proclamation must be drawn after notice to the judgment-debtor.

Intention of law is to fix reserve price in proclamation to safeguard rights of judgment-debtor.

The proclamation should include the estimate if any, given by either judgment-debtor or decree-holder or both the parties.

It is mandatory that the value so determined by the parties i.e. the decree-holder and the judgment-debtor, is to be stated in the proclamation, as the word "shall" has been stated therein. The rationale behind stating the said value in the proclamation is to ensure full disclosure to the prospective bidders.

Muhammad Amin alias Jaloo v. Judge Banking Court and others 2011 CLD 280; Muhammad Hassan v. Messrs Muslim Commercial Bank Ltd. and others 2003 CLD 1693; Khursheed Begum and others v. Inam-ur-Rehman Khan and others PLD 2009 552; Muhammad Attique v. Jami Limited and others PLD 2010 SC 993; [Brig. Rtd.) Mazhar-ul-Haq and another v. Muslim Commercial Bank Ltd., Islamabad PLD 1993 Lah. 706; Desh Bandhu Gupta v. N.I. Anand and Rajinder Singh 1994 1 S.C.C 131; Mirza Munawar Baig and others v. Bank Alfalah Limited and others 2007 YLR 126; Messrs Ripple Jewellers (Pvt.) Ltd. v. First Woman Bank 2003 CLD 1318; Messrs Spinghar Textile Mills Ltd. and another v. United Bank Ltd. and another 2011 CLD 1683; Mrs.Aziz Fatima and others v. Mrs. Rehana Chughtai and others 2000 CLC 863; Mrs.Shahida Saleem and another v. Habib Credit and Exchange Bank Ltd. and others 2001 CLC 126; Mst.Nadia Malik v. Messrs Makki Chemical Industries Pvt. Ltd. 2011 SCMR 1675; Balram v. Ilam Singh and others AIR 1996 SC 2781; Manilal Mohanlal Shah and others v. Sardar Sayed Ahmed Sayed Mahmad AIR 1954 SC 349; Appu v. Achuta Menon and others AIR 1926 (Madras) 755; Shahid Ali v. Mrs. Aziz Fatima and others PLD 2010 SC 38; Muhammad Ahmed Sheikh v. J.S. Bank Limited 2012 CLC 498; Feroz Abdul Karim v. Muslim Commercial Bank Ltd. 2012 CLC 545; (Capt. Rtd.) Nayyar Islam v. Judge, Accountability Court No.III 2012 SCMR 669; Commissioner of Income-Tax v. D.P.S.(I.) (Pvt.) Ltd. 1998 PTD 2809 and Ibrar Hussain v. State 2012 YLR 805 ref.

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

----O. XXI, R. 85---Deposit of remaining purchase money by purchaser within 30 days as per direction of Court Auctioneer---Validity---Provision of O. XXI, R. 85, C.P.C. requiring such deposit to be made within 15 days was mandatory---Non-payment of such money would render sale proceedings as a complete nullity---Court in such circumstances could take suo motu action for setting aside sale.

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

----O. XXI, R. 66---Proclamation of sale---Reserve price of property not fixed in proclamation---Effect---Such omission would render proclamation to be illegal and make auction proceedings liable to be set aside.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 66, 84 & 85---Sale of mortgaged property in execution of decree by Official Assignee by adopting mode provided in O.XXI, C.P.C.---Proclamation of sale not containing particulars required to be incorporated therein by Official Assignee in terms of O. XXI, Rr. 66, 84 & 85, C.P.C.---Effect---Such proclamation for being illegal would not be sustainable---High Court set aside such sale while directed Official Assignee to set down fresh draft of proclamation of sale in terms of O.XXI, Rr. 66, 84 & 85, C.P.C. in presence of both parties and submit same before court.

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

----O. XXI, R. 65---Sale in execution of decree---Official Assignee, appointment of---Scope---Court for conducting such sale could appoint Official Assignee.

(g) Interpretation of statutes---

----Special law---Applicability---Provisions of special law would exclude application of general law.

Yawar Faruqui and Irfan Memon for Decree Holder.

Mian Raza Rabbani, Zeeshan Abdullah and Sajid Ansari for Judgment Debtor Nos. 1 & 2.

Naveed-ul-Haq for the Bank of Punjab.

S. Nauman Zahid Ali for Standard Chartered Bank Ltd.

Date of hearing: 14th December, 2012.

2013 C L D 1451

[Sindh]

Before Muhammad Ali Mazhar, J

Messrs SADAT BUSINESS GROUP LTD.---Plaintiff

Versus

FEDERATION OF PAKISTAN through Secretary and another---Defendants

Suit No.1134 of 2011, decided on 9th May, 2013.

(a) Words and phrases---

----Force majeure---Defined.

Black's Law Dictionary (Sixth Edition) and Messrs Global Energy and Commodity Exchange Group Italy SPA (GECX Group) v. Trading Corporation of Pakistan 2013 CLD 681 rel.

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

----S. 20--- Appointment of arbitrator--- Contract, termination of---Effect---Plaintiff invoked arbitration clause in contract between parties and sought resolving of dispute by appointment of arbitrator---Plea raised by defendant was that by termination of contract, arbitration clause did not survive--- Validity---Termination/cancellation could occur due to breach in contractual obligations by any of the parties to contract which in fact could lead towards a dispute and in order to resolve dispute between parties and even for determination of their rights and liabilities and even a wrongful termination could also be made subject matter of arbitration proceedings otherwise the whole purpose and scheme of incorporation arbitration clause in contract would become redundant and superfluous and it was very easy for any party to terminate and or frustrate contact out rightly in order to avoid arbitration proceedings and claims if any---Cancellation of contract or invoking arbitration proceedings both were two distinct situations, termination clause could not be given overriding effect on arbitration proceedings or provision made for arbitration in contract---Despite cancellation/termination of contract provision of arbitration survived and agreement for arbitration contained in contract was a separate part of contract---High Court appointed arbitrator to resolve and arbitrate dispute between parties---Suit was disposed of accordingly.

Firm Karam Narain v. Volkart Bros. AIR (33) 1946 Lahore 116; The Hub Power Company Ltd. v. Pakistan WAPDA PLD 2000 SC 841; Jaikishan Dass Mull v. Luchhiminarain Kanoria & Co. AIR 1974 SC 1579; Khardah Company Ltd. v. Raymon and Co. (India) Private Ltd. AIR 1962 SC 1810; Messrs Friends Trading Co. v. Messrs Muhammad Usman-Moula Bux PLD 1954 Sindh 56; Malik Muhammad Mumtaz v. Malik Abdul Rauf 2002 YLR 2238; Hitachi v. Rupali PLD 1998 SCMR 1618 and Corpus Juris Secundum, Volume-6, 2004, Chapter Arbitration (Page 76-77) ref.

Manzoor Construction Co. Ltd. v. University of Engineering & Technology, Textila 1984 CLC 3347; Das Consultants Pvt. Ltd. v. National Mineral Development Corporation Ltd. AIR 1981 Calcutta 202; Muhammad Azam Muhammad Fazil & Co. v. Messrs Trading Corporation of Pakistan 1986 CLC 2630 and Lahore Stock Exchange Limited v. Fredrick J. Whyte Group (Pakistan) Ltd. PLD 1990 SC 48 distinguished.

Faisal Kamal for Plaintiff.

Malik Muhammad Riaz for Defendant No.2.

Nemo for Defendant No.1.

Dates of hearing: 15th March and 5th April, 2013.

2013 C L D 1516

[Sindh]

Before Faisal Arab and Nadeem Akhtar, JJ

NASIRUDDIN SHAHAB---Petitioner

Versus

SUB-REGISTRAR-I and others---Respondents

Constitutional Petition No.D-3469 of 2010 decided on 19th April, 2012.

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

----S. 9--- Constitution of Pakistan, Art. 199---Constitutional petition---Maintainability---Petitioner's plea was that he had mortgaged one property with the Bank, which had issued letter to Sub-Register not to accept without its NOC, registration of sale deed of 9 other properties belonging to the petitioner---Bank's plea was that petitioner had availed finances for such 9 properties, which he could not sell without repaying amount of finance---Validity---Banking Court had jurisdiction to decide such dispute pertaining to financial transaction---Banking Court had passed restraint order against such properties in a suit filed by Bank---Petitioner had already filed suit in Banking Court challenging validity of such letter--- High Court dismissed constitutional petition in circumstances.

Shafiq Ahmed for Petitioners.

Ms. Naheed A. Shahid for Respondents Nos.2 and 3.

Murtaza Wahab and Ahmed Pirzada, Advocates.

Date of hearing: 19th April, 2012.

2013 C L D 1531

[Sindh]

Before Aziz-ur-Rehman, J

VIFOR (INTERNATIONAL) INC. through Authorized Signatory---Plaintiff

Versus

Me'MON PHARMACEUTICAL through Sole Proprietor---Defendant

Suit No. 1282 of 2009, decided on 4th March, 2013.

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

----Ss. 2(xxxv), 8(a), 14, 17, 18, 22, 28, 33 & 39---Registered trade mark, infringement of---Permanent injunction, suit for---Plaintiff being proprietor of registered trade mark "MALTOFER" alleged its illegal use by defendant under imitated trade mark "MALTOS" in respect of pharmaceutical preparation---Proof---No trade mark or any part thereof in respect of goods or services would be registered, if same would cause deception and/or create confusion---Proprietor of a registered trade mark has an exclusive right therein and its violation was not permissible under law---Defendant could not be permitted to defeat vested right of registered proprietor (plaintiff), who entered the field first---Defendant's trade mark "MALTOS" was mala fide replacement of letters "FER" of plaintiff's registered trade mark "MALTOFER' with letter "S" to make the same "MALTOS"---Defendant's trade mark "MALTOS" was phonetically, visually, structurally, deceptively and confusingly similar and nearly resembling plaintiff's registered trade mark "MALTOFER"---Defendant had deliberately chosen to use trade mark "MALTOS" with a view to sell deceptively lower quality of goods by creating confusion qua plaintiff's best quality of goods available in market under trade mark "MALTOFER"---Nothing was available on record on behalf of defendant in rebuttal of plaintiff's evidence---No one under law could use trade mark of someone to deceive public and cause injury to its owner's goodwill and/or reputation---Plaintiff had not suffered damages/losses as he had filed suit immediately after getting knowledge about infringement of its registered trade mark by defendant---Plaintiff became entitled to relief of permanent injunction in view of its un-rebutted evidence and such dishonest act of defendant---Suit was decreed in circumstances.

Jamia Indus Limited v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8; Messrs Alpha Sewing Machine Co. v. Registrar of Trade Marks and another PLD 1990 SC 1074; Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090; Messrs Mehran Ghee (Pvt.) Ltd. and others v. Messrs Chiltan Ghee Mill (Pvt.) Ltd. and others 2001 SCMR 967; Seven-up Co. v. Kohinoor Thread Ball Factory and 3 others PLD 1990 SC 313; Messrs Platinum Pharmaceutical Co. (Pvt.) Ltd. v. Stand Pharm Pakistan (Pvt.) Ltd. and 3 others 2006 CLC 1190; MOd International (Pvt.) Ltd. v. National Detergent Ltd. 1993 MLD 605; Glaxo Laboratories Ltd., England v. Assistant Registrar, Trademark Karachi and another PLD 1977 Kar. 858; Messrs Chas A. Mendoza v. Syed Tauseef Ahmed Zaidi and 2 others PLD 1993 Kar. 790; Muhammad Saeed Mughal and 3 others v. Messrs National Aviation Services (Pvt.) Ltd. through Malik Talat Mahmood 2001 YLR 2004; The Wellcome Foundation Ltd. v. Messrs Karachi Chemical Industry (Pvt.) Ltd. 2000 YLR 1376; J.N. Nicholas (Vimto) PLC A. Co., Incorporated in the United Kingdom v. Mehran Bottlers (Pvt.) Ltd., Karachi PLD 2000 Kar. 192; Pakistan Drug House (Pvt.) Ltd. v. Rio Chemical Co. and another 2003 MLD 1513; Messrs Ali Anas Laboratories through 4 Partners v. Messrs Al-Chemist and another 1987 MLD 2823; National Detergents Ltd. v. Nirma Chemical Works and another 1992 MLD 2357; Messrs Platinum Pharmaceuticals Co. (Pvt.) Ltd. v. Stand Pharma Pakistan (Pvt.) Ltd. and 3 others 2006 CLD 1109; Hiralal Parbhudas v. Garnish Trading Company AIR 1984 Bombay 218 and CIBA Ltd. Basle Switzerland v. M. Ramalingam and S. Subramaniam Trading in the name of South Indian Manufacturing Co., Madura and another AIR 1958 Bombay 56 ref.

Mohan Goldwater Breweries (Private) Limited v. Khoday Distilleries Private Limited and another Appeal Against Order Nos.456 and 457 of 1974; Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8; Law of Trade Mark and Trade Names (1966 Edn.) written by Kerly page 838; Messrs Mehran Ghee Mills (Pvt.) Ltd. and others v. Messrs Chiltan Ghee Mill (Pvt.) Ltd. and others 2001 SCMR 967 and Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090 rel.

(b) Tort---

----Damages, claim of---Absence of positive proof about actual losses suffered by plaintiff---Effect---Such claim could not be granted---Principles.

Under law damages cannot be granted in absence of "positive evidence". Damages require evidence vis-a-vis details of losses actually suffered. As a rule, even fixed amount of damages cannot be granted unless quantum of actual losses is proved. Party claiming damages have to firstly plead and then prove damages by sufficient, cogent, trustworthy and independent evidence. Regarding damages and quantum thereof, burden of proof always lies on the claimant. Without discharging such burden, one cannot succeed.

Muhammad Amin Muhammad Bashir Ltd. v. Muhammad Amin Brothers Ltd. PLD 1979 Kar. 233; Daoud Shami v. Messrs Emirates Airlines and another PLD 2011 SC 282 and Syed Ahmad Saeed Kirmani v. Messrs Muslim Commercial Bank Ltd., Islamabad 1993 SCMR 441 rel.

Ms. Amna Salman for Plaintiff.

Nemo for Defendant.

Date of hearing: 13th February, 2013.

2013 C L D 1568

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

Messrs GAC PAKISTAN (PVT.) LTD.---Petitioner

Versus

E.F.U. GENERAL INSURANCE LTD. and 2 others---Respondents

Constitutional Petition No.D-2933 of 2011, decided on 22nd February, 2013.

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

----Ss.2(11), 7 & 316---Constitution of Pakistan, Art. 199---Constitutional petition---Suit for recovery of damages from company already ordered to be wound-up by Company Judge of High Court---Application under S.316 of Companies Ordinance, 1984 for staying proceedings in suit till getting permission from High Court for continuing therewith---Civil court dismissed such application on ground that Company Judge while passing winding-up order had not stayed proceedings in suit---Validity---Jurisdiction in matters of winding up of companies was vested in Company Judge of High Court, but not in any other Court---Civil court after taking notice of passing of winding-up order by Company Judge ought to have stayed proceedings in suit and asked plaintiff to approach Company Judge for permission to proceed with the suit---Something required by law to be done in a particular manner must be done in such manner or not to all---Civil court could not proceed with the suit, which was not maintainable for want of requisite permission from Company Judge---High Court accepted constitutional petition and stayed suit while observing that plaintiff could approach Company Judge for permission to proceed therewith---Principles.

2009 CLD 1662 ref.

National Bank of Pakistan v. Banking Tribunal No.1 and others PLD 1994 Kar. 358; Pakistan Industrial Leasing Corporation v. Sunrise Textile Mills 2009 CLD 1662; Industrial Development Bank of Pakistan v. Bahwalpur Board Mills Limited 2001 MLD 1708; 2000 SCMR 1720; Mackinnons Mackenzai and Co. of Pakistan (Pvt.) Ltd. v. The Eastern Federal Union Insurance Company Limited and others 2002 CLD 779 and Crescent Sugar Mills and Distillery Ltd. v. American Export Isbrandt Inc. PLD 1983 Kar. 29 rel.

(b) Administration of justice---

----Something required by law to be done in a particular manner must be done in such manner or not at all.

2000 SCMR 1720 rel.

Usman Hadi for Petitioner.

Nemo for Respondents.

Abid S. Zuberi, Amicus Curiae on Court Notice.

Date of hearing: 15th January, 2013.

2013 C L D 1667

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

MUHAMMAD RAFIQ through Attorney----Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary and 2 others----Respondents

Constitutional Petition No.D-1010 of 2012, decided on 15th May, 2013.

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

----O. XXI, R. 89---Execution of decree---Application for setting aside of order of sale of mortgaged property through auction---Applicant's plea that property had been sold at a low price---Validity---Property sold through auction would never fetch market value---Inadequacy of sale price in court sale would not be a valid ground for setting aside such sale---Such application was dismissed---Principles.

It is very well-known to a person of ordinary prudence that a property sold through auction will not fetch the market value and will always be sold for a price below the market value.

Mere inadequacy of sale price in court sale is no valid ground for setting aside the sale. A buyer is always reluctant to purchase a property in court sale as it involves litigation; it is time consuming and has the element of uncertainty. The court sales do not fetch market price for the reason and sale through auction cannot be set aside on this score alone.

Mumtaz-ud-Din Feroz v. Sheikh Iftikhar Adil and others 2009 CLD 594 ref.

East Yarn Trading Company and others v. United Bank Limited and others 2007 CLD 1555 rel.

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

----O. XXI, R. 94---Execution proceedings---Sale of property through auction, confirmation of---Validity---Ownership right in property would be deemed to have vested in auction purchaser once such sale was confirmed by court.

Muhammad Attique v. Jami Limited and others PLD 2010 SC 993 rel.

(c) Constitution of Pakistan---

----Art. 199---Constitutional petition in matters wherein High Court having ultimate appellate or revisional powers under relevant statute---Scope stated.

In matters, where the High Court itself is the repository of the ultimate appellate, revisional or referral power conferred by the relevant statute, it is in the rarest of cases that the High Court may be persuaded to entertain a constitutional petition and to enforce the constitutional remedy in preference to its own appellate, revisional or referral dispensation arising in course of time.

Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881 Mir Zaman v. Mst. Sheda and others 2000 SCMR 1699 rel.

Fiaz H. Shah for Petitioner.

Abdul Shakoor for Respondent No.3.

Ali Raza for Intervenor/Auction Purchaser.

Date of hearing: 21st February, 2013.

2013 C L D 1701

[Sindh]

Before Aftab Ahmed Gorar, J

MUHAMMAD TARIQ---Appellant

Versus

Malik BASHIR-UD-DIN through Attorney and another---Respondents

First Appeal No.40 of 2010, decided on 16th April, 2013.

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

----O. XXXVII, Rr. 2 & 3---Institution of summary suit on negotiable instrument---Leave to defend---Principles---If the defendant had succeeded to show a plausible defence or was able to establish that there was some substantial question of fact or law, then he was entitled to the grant of leave to defend---If it seemed that the defence was vague or unsatisfactory or there was doubt as to its genuineness, even then leave should not be refused but certain conditions could be imposed---Court trying summary suit was required to see that there was bona fide allegation of triable issue which was not illusory and court need not to be satisfied that defence would succeed and it was enough that defence was verified by oath.

PLD 1963 SC 163 and 1995 SCMR 925 rel.

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

----O. XXXVII, Rr. 2, 3 & S.151---Institution of summary suit on negotiable instrument--- Application for exemption to furnish bank guarantee---Inherent powers of court---Plaintiff filed suit for recovery of money wherein application for permission to appear and defend the suit was moved which was accepted by the Trial Court and defendant was granted conditional leave to defend the suit by furnishing bank guarantee---Defendant filed application under S.151, C.P.C. for exemption to furnish bank guarantee which was dismissed by the Trial Court---Validity---Trial Court should have allowed the parties to adduce evidence---Defence taken by the defendant was not illusory---Condition of furnishing bank guarantee was based upon the pendency of criminal cases---Triable issue had been raised by the defendant---No sufficient ground existed for imposition of condition of furnishing bank guarantee---Appeal was accepted.

PLD 1963 SC 163 and 1995 SCMR 925 ref.

Sabir Hussain Shah for Appellant.

Mobarak Ahmed for Respondent No.1.

Date of hearing: 2nd February, 2011.

2013 C L D 1735

[Sindh]

Before Muhammad Ali Mazhar, J

ABDUL RAUF---Petitioner

Versus

ARY CEMENT LIMITED---Respondent

J.M. No.2 of 2012, decided on 18th December, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 305, 328 & 329---Winding up of a company, petition for---Non-commencement of business by company for more than sixteen (16) years due to non-obtaining of certificate from Securities and Exchange Commission of Pakistan---Effect---Court would wind up a company in case of failing to commence its business within one year from date of its incorporation or suspending its business for the whole year--- High Court accepted such petition and appointed Official Liquidator in circumstances.

Faiz Durrani for Petitioner.

Manzoor-ul-Haq for Respondent.

Date of hearing: 18th December, 2012.

2013 C L D 1756

[Sindh]

Before Munib Akhtar, J

SONERI BANK LIMITED through Constituted Attorneys/Authorized Officers and another---Plaintiffs

Versus

Messrs PAK LAND CORPORATION (PVT.) LIMITED through CEO and 4 others---Defendants

Suit No.249 of 2012, decided on 18th March, 2013.

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

----Ss. 82A & 82B(5)---Jurisdiction of Banking Mohtasib---Scope and extent--- Section 82A of the Banking Companies Ordinance, 1962 set out the scope and extent of the Mohtasib's jurisdiction, but said section must be read with S.82B(5) of the Banking Companies Ordinance, 1962 which amplified the former and the said provision expressly provided that the Mohtasib had the jurisdiction to entertain complaints in relation to fraudulent or unauthorized withdrawals or debit entries in accounts.

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

----S. 82D(2)---Interpretation of S.82D(2) of the Banking Companies Ordinance, 1962---Procedure for making complaints before the Banking Mohtasib---Requirement of intimation in writing by complainant to the concerned bank, wherein complainant mentions his intention of filing complaint---Scope and application---Said condition should not be construed strictly and applied literally---Many of the complainants (i.e. customers of banks) would not at all be conversant with legal niceties and procedural requirements and their complaints ought not to be non-suited on technicalities---If an intimation relied upon, on a fair reading, disclosed an intention to take legal action then the same ought to be construed as including action by the way of a complaint to the Mohtasib.

(c) Banking Companies Ordinance (LVII of 1962)---

----S. 82D(2)---Interpretation of S.82D(2) of the Banking Companies Ordinance, 1962--- Procedure for filing complaints before Banking Mohtasib---Requirement of passage of forty five days before complainant can make a complaint to the Mohtasib---Scope and application---Literal reading of S.82D(2) of the Banking Companies Ordinance, 1962 and its application would require the complaint to be filed after the passage of 45 days however, if a complaint was filed with the Mohtasib, without intimation having first been given to the concerned bank, the Mohtasib should simply keep the complaint in his files and ask the complainant to approach the bank---Complainant, if he reverts after the 45 days' period (within the stipulated time), then the complaint already on file could be taken up---Complainant, in other words, should not be asked to repeat something he has already done, however, in the formal and legal sense, the complaint would only be "entertained" after due intimation had been given to the concerned bank and the 45 days' period had passed without satisfaction being given by the Bank.

(d) Banking Companies Ordinance (LVII of 1962)---

----S. 82D(4)--- Jurisdiction of Banking Mohtasib---Procedure for making complaints---Prohibition on the Banking Mohtasib on issuing an order in the nature of a stay order was absolute---Condition imposed on Mohtasib not to entertain any complaints if the matter was pending before a court or other legal forum applied only in relation to the entertaining of a complaint.

(e) Banking Companies Ordinance (LVII of 1962)---

----Ss. 82A & 82D(4)---Jurisdiction of Banking Mohtasib---Entertaining of complaints if same matter was pending before a court or legal forum---Scope---Banking Mohtasib had the jurisdiction to entertain a complaint only after the 45 days had passed from the complainant having given due intimation to the concerned bank, but without satisfaction being given to the customer/complainant by the Bank---If the complaint was already on the Banking Mohtasib's files, then the Mohtasib could take the matter up and it was only then that he could be said to have entertained it---Crucial date for the purpose of S.82D(4) of the Banking Companies Ordinance, 1962 was to be determined, if on that date there was a matter pending in a court or other legal forum, the Mohtasib must stay his hand and he, in such a case, would not have the jurisdiction to entertain the complaint and for him to proceed with the same would be unlawful.

(f) Banking Companies Ordinance (LVII of 1962)---

----Ss. 82D(4), 82(C) & 82(A)---Civil Procedure Code (V of 1908) O.XXXIX, Rr. 1 & 2---"Court" or "other legal forum", connotation---Interpretation of S.82D of the Banking Companies Ordinance, 1962---Pending criminal proceedings were not relevant for the purpose of S.82D of the Banking Companies Ordinance, 1962---Bank sought staying of proceedings before the Banking Mohtasib inter alia on the ground that the complainant company had itself initiated criminal proceedings which were pending before Special Court at the time complaint was filed by the said company before the Banking Mohtasib and therefore, the Banking Mohtasib could not adjudicate upon the same and entertaining said complaint would be in violation to S.82D(4) of the Banking Companies Ordinance, 1962---Validity---"Court or other legal forum" mentioned in S.82D(4) of the Banking Companies Ordinance, 1962 must be a court of civil jurisdiction or a forum that could give relief of a civil nature (for example, reference to an arbitrator); and the same could not be a court of criminal jurisdiction as the matter that fell within the jurisdiction of the Banking Mohtasib was of a civil nature---Section 82D(4) of the Ordinance clearly contemplated that the "matter" that was before the Mohtasib, ought to be of the same nature as that which pending before any court or other legal forum and the relief which was sought from any other court or other legal forum (or which the same could grant) may not necessarily be the same as claimed from the Mohtasib (or which it could grant)---For the purposes of S.82D(4) of the Ordinance, it was the "matter" which was relevant and determinative---Same fact situation could give rise to both criminal and civil liability and each had to be dealt with, on its own terms and according to its own nature---"Matter" in criminal and civil proceedings was different and the same was indicated by the fact that the standard of proof was different---Offence (which was the "matter" in a criminal case) must be proved beyond reasonable doubt whereas civil liability (which was the "matter" in civil suits) must be established on the balance of probabilities---Complaint before the Banking Mohtasib was not required to be established beyond reasonable doubt while the standard of proof required may not exactly be a balance of probabilities (it may in certain respects, be higher or greater than that) it was nonetheless more akin to the latter---Section 82C of the Ordinance also clearly applied only in relation to civil proceedings, for example a suit for recovery, and this indicated that the "court" referred to in S.82D of the Ordinance could only be a court of civil jurisdiction---High Court observed that the criminal case pending before the Special Court was not relevant for the purposes of S.82D(4) of the Banking Companies Ordinance, 1962---Application for staying proceedings before the Banking Mohtasib was dismissed, in circumstances.

(g) Administration of justice---

----"Civil" and "criminal" jurisdictions---Distinction---Same fact situation could give rise to both criminal and civil liability and each had to be dealt with on its own terms and according to its own nature---Matters in criminal and civil proceedings were different and this was indicated by the fact that the standard of proof was different---Offence in a criminal case must be proved beyond reasonable doubt whereas civil liability must be established on the balance of probabilities---Aggrieved person in a criminal case may fail to prove that an offence had been committed yet may succeed as the plaintiff in a civil suit in respect of the same fact-situation.

Rizwan A. Siddiqui for the Plaintiffs.

Iftikhar Javed Qazi for Defendants Nos.1 to 3.

Qamar Abbas for Defendant No.5.

Date of hearing: 12th December, 2012.

2013 C L D 1796

[Sindh]

Before Nadeem Akhtar, J

Mst. SHAHMIR---Appellant

Versus

GHULAM HYDER---Respondent

Ist Civil Appeal No.13 of 2010, decided on 10th September, 2012.

Civil Procedure Code (V of 1908)---

----O. XXXVII, Rr. 1 & 2---Limitation Act (IX of 1908) S.5 & Art. 159----Money Suit---Application for leave to appear and defend suit---Limitation---Suit for recovery of money was decreed ex parte against the defendant after she failed to file application for leave to appear and defend the suit within the stipulated period of limitation---Contention of the defendant was that ex parte order against her be recalled, as delay in her filing of application for leave to defend was due to illness and such delay ought to have been condoned---Validity---Service of summons on the defendant was effected on 20-1-2010 and prescribed period of limitation of ten days for filing of application for leave to appear and defend commenced with effect from 21-1-2010---Service effected through any one mode had to be considered as good service--- Application for condonation of delay was based on a vague statement and specific dates during which she was confined to bed, and date of her recovery, were not disclosed in the said application---Delay of each and every day, therefore, was not explained by the defendant---When a defendant failed to appear or failed to obtain leave to defend in response to a summons served or where the court refused to grant leave, allegations in the plaint shall be deemed to be admitted and the plaintiff would be entitled to a decree---No illegality, therefore, existed in the impugned order---Appeal was dismissed, in circumstances.

Messrs Ahmed Autos and another v. Allied Bank of Pakistan Ltd. PLD 1990 SC 497; Messrs Qureshi Salt and Spices Industries, Khushab and another v. Muslim Commercial Bank Limited through President and 3 others 1999 SCMR 2353; Shahid Pervaiz alias Shahid Hameed v. Muhammad Ahmad Ameen 2006 SCMR 631; Haji Ali Khan and Company, Abbottabad and 8 others v. Messrs Allied Bank of Pakistan Limited, Abbottabad PLD 1995 SC 362; Naeem Iqbal v. Mst. Zarina 1996 SCMR 1530 and Col. (Retd.) Ashfaq Ahmed and others v. Sh. Muhammad Wasim 1999 SCMR 2832 rel.

Muhammad Imran Shamsi for Appellant.

2013 C L D 1820

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

MAZHAR BUTT---Appellant

Versus

UNITED BANK LIMITED and another---Respondents

First Appeal No.119 of 2011, decided on 5th March, 2013.

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

----S. 27---Civil Procedure Code (V of 1908), O.XLVII, R.1, Ss.153 & 114---Review of judgment---Scope---Amendment of judgment---Aggrieved party, on account of some mistake or error, apparent on the face of the record, or for any other sufficient reason, might apply for review of the judgment to the court, which had passed the decree or made the order---Law has placed an embargo on the 'aggrieved person' to the effect that he could only file an application for revival if no appeal was provided from the order sought to be reviewed or if appeal was provided but no appeal had been preferred.

(b) Constitution of Pakistan---

----Arts. 199 & 189---Constitutional petition---Scope---Order/judgment which has been upheld by the Supreme Court and has attained finality could not be interfered.

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

----O. XLVII, R.1 & S.114--- Review of judgment---When appeal was filed by the party challenging the order, then no application for review could be entertained against the said order.

Ghulam Mohiuddin for Appellant.

M.A. Hasni for Respondent No.1.

Taimoor Mirza for Respondent No.2.

Date of hearing: 21st February, 2013.

2013 C L D 1829

[Sindh]

Before Munib Akhtar, J

METAL CONSTRUCTION OF GREECE S.A. (MEKTA S.A.), ATHENS through Attorney---Plaintiff

Versus

OWNERS OF THE VESSEL m.v. LADY REA---Defendant

Admiralty Suit No.35 of 2008, decided on 12th November, 2012.

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

----Ss. 3(2)(h) & 4(4)---Carriage of goods---Claim in tort---Proof---Action in rem against vessel---Scope---Such claim can be sustained under S.3(2)(h) of Admiralty Jurisdiction of High Courts Ordinance, 1980, and all that is required is that it be "connected with" agreement of the nature as stated therein---Not necessary that parties to action be themselves party to such agreement based on tort---If plaintiff can establish claim in tort against ship-owner on the basis that vessel was not seaworthy, that claim would be "connected with" agreement relating to carriage of goods in vessel, namely the agreement as evidenced by bills of lading in which plaintiff is shipper and charterer is carrier and it is irrelevant when considering such claim that ship-owner is not itself directly party to the agreement of affreightment---As the matter falls within the ambit of S.3(2)(h) of Admiralty Jurisdiction of High Courts Ordinance, 1980, and it is a claim against ship-owner, therefore, the same necessarily comes within the scope of S.4(4) of Admiralty Jurisdiction of High Courts Ordinance, 1980---Action in rem is maintainable against vessel in circumstances.

[1984] 2 All ER 353 rel.

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

----Ss. 3(2)(h) & 4(4)---Carriage of goods---Claim in tort---Proof--- Action in rem against vessel--- Seaworthy certificate, expiry of---Contract of affreightment was entered into between parties whereby plaintiff's cargo was to be shipped on board the vessel---Two bills of lading were issued in respect of cargo which showed plaintiff as consignor---Contention of plaintiff was that as per contract of affreightment, vessel was to proceed straight to port of destination from the port of loading but it stopped on way to discharge some cargo, which was breach of contract of affreightment---Vessel was due for annual survey at the time when it sailed from the port of loading and when it stopped on way, the port authorities refused to allow vessel to sail until appropriate certificate was in place and vessel off-loaded cargo for the purposes of sea-worthy certificate---Plaintiff claimed to be entitled to bring suit in rem against the vessel and had it arrested---Validity---Duty to provide sea-worthy ship was determined at commencement of sailing---Vessel's certification might have been current when it sailed from port of loading, through it was imminently expiring and had to be renewed---Ship-owner was prima facie in breach of its duty notwithstanding that in technical sense vessel might have had a valid certification when it sailed from the port of loading---Fact that such certification was about to expire and vessel would be without proper certification with the attendant consequences was known to the ship-owner---Prima facie, it was established that ship-owner owed a duty, in tort, to provide a sea-worthy vessel; that such duty was owed, among others, to a person such as plaintiff, whose cargo was shipped on board the vessel under a contract of affreightment; that it was irrelevant that ship-owner was not contractual carrier and bills of lading were charterer's bills; that duty owed by ship-owner to plaintiff was breached in facts and circumstances; that claim for breach of such duty could be made by cargo owner i.e. plaintiff, in terms of S.3(2)(h) of Admiralty Jurisdiction of High Courts Ordinance, 1980; and that by virtue of S.4(4) of Admiralty Jurisdiction of High Courts Ordinance, 1980, action in rem was maintainable against the vessel---Equity was in favour of plaintiff and against vessel and ship-owner---All ingredients for grant of interim relief were in place and such relief could not be denied to plaintiff---High Court directed to detain the vessel and permission to sail was granted subject to deposit of surety--- Application was allowed in circumstances.

The Bukhta Russkaya [1997] 2 Lloyd's Rep 744, 746-7); The Komninos S [1991] 1 Lloyd's Rep 370; Sunrise Maritime Inc. v. Uvisco Ltd. ("The Hector") [1998] 2 Lloyd's Rep 287; Sun Line Agencies Ltd. v. The Psiloritis 1984 CLC 1553 (SHC; SB); Atlantic Steamer's Supply Company v. m.v. Titisee and others PLD 1993 SC 88; V.N. Lakhani & Co. v. m.v. Lakatoi Express PLD 1994 Sc 894; Jaffer Brothers (Pvt.) Ltd. v. m.v. Eurobulker II 2002 CLD 926 (SHC; DB); The Rewia [1991] 2 Lloyd's Rep 325); [2000] 1 Lloyd's Rep 85; [2001] EWCA Civ 56, [2001] 1 Lloyd's Rep 437; [2003] UKHL 12; [2003] 1 Lloyd's Rep 571; [2003] 2 All ER 785; The Flecha [1999] 1 Lloyd's Rep 612, Margem Chatering Co. Inc. v. The Bosca [1997] 2 FC 1001; [1990] 3 All ER 967; Alfred C. Toepfer Schiffahrtsgesellschaft GmbH v. Tossa Marine Co. Ltd. (The "Derby") [1985] 2 Lloyd's Rep 325; Golden Fleece Maritime Inc. v. ST Shipping and Transport Inc. [2008] EWCA Civ 584 and [2008] 2 Lloyd's Rep 119 ref.

Qamar Abbas for Plaintiff.

Shaiq Usmani for Defendant.

Dates of hearing: 28th March, 16th April, 21st May, 31st May and 8th November, 2012.

2013 C L D 1867

[Sindh]

Before Muhammad Ali Mazhar, J

Messrs BRECAST INDUSTRIES (PVT.) LTD. through Director/Chief Executive Officer---Plaintiff

Versus

HOUSE BUILDING FINANCE CORPORATION through Managing Director---Defendant

Suit No.B-66 of 2009, decided on 9th May, 2013.

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

----S. 10---Suit by borrower against financial institution---Leave to appear and defend the suit--- Substantial question of fact and law---Scope---Plaintiff availed finance facility from House Building Finance Corporation and matter was finally settled in Supreme Court in terms of calculating liability---Official Assignee was appointed to calculate liability---Plaintiff filed the suit disputing markup/interest and also claimed recovery of excess amount paid to House Building Finance Corporation and also claimed liquidated damages and general damages which could not be adjudicated through a snap decision---Validity---Was necessary to see whether Official Assignee rightly calculated outstanding liability in terms of settlement reached before Supreme Court and to be adjudicated whether plaintiff was liable to pay markup/profit up to the date of taking over the possession by the Corporation or it was continuing right to claim markup/profit on last calculation made by Official Assignee up to 1-12-2006---Even defendant in leave to defend showed calculation up to 30-4-2009, payable by plaintiff which was on and on---In order to resolve such controversy including the claim of damages and excess amount an opportunity needed to be provided to parties for leading evidence so that bone of contention might be decided---Defendant in its leave to defend application had raised substantial question of law and fact hence, deserved unconditional leave to defend---High Court directed Official Assignee to submit latest report in court with up to date calculation of dues if any---Application was allowed accordingly.

Muhammad Iqbal Chaudhry Advocate v. Federation of Pakistan and others PLD 1992 FSC 501; PLD 2000 SC 716; State Bank of Pakistan through Governor and another v. Imtiaz Ali Khan and others 2012 SCMR 280; Khairpur Textile Mills Ltd. and 7 others v. National Bank of Pakistan and another 2003 CLD 326; Messrs Nishat Impex (Pvt.) Ltd. v. Messrs Habib Bank Ltd. 2009 CLD 1215; HBFC v. Muhammad Sharif PLD 2000 SC 760; Messrs Shaz Packages and 3 others v. Messrs Bank Al-Falah Ltd. 2011 CLD 790 and Soneri Bank Ltd. v. Classic Denim Mills (Pvt.) Ltd. 2011 CLD 408 ref.

Khawaja Shams-ul-Islam for Plaintiff.

Nafees A. Siddiqui for Defendant.

Date of hearing: 16th January, 2013.

2013 C L D 1886

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J.

AVM (R) S.J. RAZA---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Registrar and another---Respondents

C.P. No.D-2592 of 2009, decided on 22nd February, 2013.

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

----Ss. 33 & 34---Constitution of Pakistan, Art. 199---Constitutional petition--- Alternate and afficacious remedy--- Penalty was imposed by authorities and petitioner instead of filing appeal invoked constitutional jurisdiction of High Court---Validity---Petitioner was not able to show that remedy available by way of appeal under S.34 of Securities and Exchange Commission of Pakistan Act, 1997 was not adequate---Petitioner availed remedy available under S.33 of Securities and Exchange Commission of Pakistan Act, 1997, by filing appeal before Commissioner---When appeal was dismissed, instead of approaching forum provided under Securities and Exchange Commission of Pakistan Act, 1997, petitioner directly approached High Court under constitutional jurisdiction without availing remedy provided under S.34 of Securities and Exchange Commission of Pakistan Act, 1997---Provision of Art.199 of the Constitution had imposed embargo on filing of constitutional petition in case adequate and alternate remedy was available to petitioner---Petition was dismissed in circumstances.

Al Ahram Builders (Pvt.) Limited v. Income Tax Appellate Tribunal 1993 SCMR 29 and Shabbir Ahmed Shaikh v. Government of Balochistan and others 1988 CLC 2267 ref.

(b) Constitution of Pakistan---

----Art. 199--- Constitutional jurisdiction--- Scope--- Such jurisdiction cannot be used to circumvent limitation and/or as a substitute of alternate and efficacious remedy available under law.

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

M. Saleem Thepdawala for Petitioners.

Khurram Rasheed for Respondents.

Jawed Farooqui, D.A.G.

Date of hearing: 16th January, 2013.

2013 C L D 1922

[Sindh]

Before Mushir Alam, C.J. and Muhammad Shafi Siddiqui, J

IRFAN NAWAB through Attorney---Appellant

Versus

SONERI BANK LIMITED---Respondent

Special High Court Appeal No.98 of 2012, decided on 7th May, 2013.

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

----S. 15(12)---Sale of mortgage property---Scope---Borrower is required in terms of S.15(12) of Financial Institutions (Recovery of Finances) Ordinance, 2001, to show a positive evidence that all amounts secured by mortgaged property have been paid.

(b) Administration of justice---

----When an act is required to be done in a particular way, it has to be performed in the manner provided under law---If an act provided to be performed in a particular way is followed by some consequence, then it no more remains mere procedural requirement but assumes mandatory requirement.

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

----S. 15(2) & (4)---Sale of mortgage property---Scope---Assumption of power under S.15(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, is of such nature that it takes away certain valuable rights of borrower/mortgagor and hence compliance of provisions of S.15(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, becomes mandatory.

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

----Ss. 15 & 22--- Qanun-e-Shahadat (10 of 1984), Art.129(f)--- Sale of mortgage property without intervention of court---Statutory notices, requirement of---Loss of courier receipts---Presumption---Borrower assailed sale of mortgage property on the plea that notices under S.15(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were not issued--- Validity--- Bank should have been more vigilant in retaining receipt of such courier company through which second disputed notice was sent, more particularly when assumption of powers under S.15(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001 depended on fulfilment of S.15(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001---Loss of such receipt could only yield to establish a presumption which was contrary to the presumption drawn by Single Judge of High Court---Bank did not present postal receipt or courier receipt to enable the court to apply Art. 129 of Qanun-e-Shahadat, 1984 to presume that such letter was posted---Presumption drawn on assumption and hypothesis and that too in respect of special law i.e. Financial Institutions (Recovery of Finances) Ordinance, 2001, the provisions of which were mandatory and any departure from such mode would render all subsequent event nullity---Prima facie question of second and third notices were not established at least at interlocutory stage, therefore, powers under S.15(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, were not passed on to bank and hence not available to the bank to proceed in terms thereof---Division Bench of High Court in Special High Court Appeal set aside order passed by the Single Judge and auction of property under consideration was uncalled for---Appeal was allowed.

Izhar Alam Farooqi v. Sheikh Abdul Sattar Lasi 2008 SCMR 240; Mst. Shamim Akhtar v. Muhammad Riaz 2008 CLD 186; Haji Muhammad Yaqoob Akhtar v. Habib Bank Ltd. 2009 CLD 1699; Iftikhar Ahmed v. My Bank Ltd. through President 2009 CLD 374; Shakoor Hussain v. Muhammad Sadiq 1991 MLD 67; Amin Khan v. University of Sindh PLD 1968 Kar. 899; Messrs Waqas Electronics and others v. Allied Bank of Pakistan and others 1999 SCMR 85; Ghulam Rasool and others v. Sardarul Hassan and another 1997 SCMR 976; Muslim Commercial Bank Limited and another v. Aamir Hussain and another 1996 SCMR 464; S.M. Zahir v. Pirzada Fazal Ali Ajmari 1974 SCMR 490; E.A. Evans v. Muhammad Ashraf PLD 1964 SC 536; Anjum Hayat Mirza v. Rehmat Khan 1996 SCMR 1230; Fakhar Mahmood Gillani v. Abdul Ghafoor 1995 SCMR 96; Messrs M.A. Khan and Company v. Messrs Pakistan Railway Employees Cooperative Housing Society Ltd. 1996 CLC 45; PLD 1997 Kar. 37; Syed Riazul Hassan v. Zamirul Haque 1983 CLC 2274; Mrs. Parveen Chaodhry v. VIth Senior Civil Judge, Karachi and another PLD 1976 Kar. 416 and Shankareppa v. Shivarudrappa AIR 1963 Mysore 115 ref.

Raza Rabbani along with Saalim Salam Ansari and Muhammad Zeshan Abdullah for Appellant.

Ijaz Ahmed for Respondent.

Date of hearing: 19th December, 2012.

2013 C L D 1945

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

Messrs GOLDEN THREAD INDUSTRIES through Proprietor---Appellant

Versus

J & P COATS LIMITED COMPANY and another---Respondents

High Court Appeals Nos. 280 and 282 of 2010, decided on 13th March, 2013.

(a) Trade Mark---

----Infringement of/passing off---Registered trade mark---Similar design of packing--- Deceptive measures---Wrappers of the commodities having resemblance providing similarity of design, scheme and colour---Both the parties were dealing in same commodity---Appellants were packing their products in a pack which was strikingly similar to that of the respondents---Respondents/plaintiffs filed suit to call upon the appellants/defendants to refrain from doing such act---Single Judge of High Court allowed application under O.XXXIX, Rr. 1 & 2, C.P.C. filed by plaintiff-respondent---Validity---Trade mark of appellants were totally different from the respondents registered trade mark both visually and phonetically---Colour scheme of respondents was not registered---No cause of action had arisen to the respondents---Appellants could not be prevented from using their own registered trade mark---Case was not that of the infringement of the registered trade mark, but it was the case of passing of---By packing their products in a pack which was strikingly similar to that of the respondents, appellants were deceiving ordinary purchaser into believing the goods of the appellants to be that of the respondent---Case of the respondents was that of 'passing off' and not of "infringement" of their registered trade mark by the appellants--- High Court appeals were dismissed against the order of Single Judge granting interim relief.

Messrs Western Brand Tea, Karachi v. Messrs Tepal Tea (Pvt.) Limited Lahore and another PLD 2001 SC 14 rel.

(b) Trade Mark---

----Resemblance in packing of products---Passing off---Causing confusion in the mind of unwary purchaser---Effect---Colour scheme, label design and pattern of the two packs was almost identical and an ordinary person could not differentiate between the two at a cursory glance---No doubt that colour per se could not be called a trade mark, in the present case though the marks of the appellants, were phonetically and visually quite different and distinctive from the respondents' registered trade mark, however, when all the packets kept side by side for example in a show case of the shopkeeper, an ordinary purchaser would not be able to distinguish between the three on account of identical size of the packs in the backdrop of yellow colour with typical rectangular border running across the packing, they will tend to cause confusion in the mind of unwary purchaser---If the packets were mixed with each other an unwary buyer might be deceived---High Court appeal, were dismissed.

Lipha Lyonnaise Industrielle Pharmaceutique through Authorized Signatory v. Registrar of Trade Marks and another 2009 CLD 1289 rel.

(c) Trade Mark---

----Resemblance in packing of products---Role of colour scheme used in packing---Scope---If the prefixes were similar but since the colouring of boxes were different, therefore, an ordinary person could not be deceived---Particular colour scheme played vital part in identification of a product and it was particularly so when such product was used mainly by illiterate persons.

Khaleeq Ahmed for Appellant (in H.C.A. No.280 of 2010).

Tanveer Ahmed for Appellant (in H.C.A. No.282 of 2010).

Monawwar Ghani for Respondents (in H.C.As. Nos.280 and 282 of 2010).

Date of hearing: 27th February, 2013.

2013 C L D 1965

[Sindh]

Before Muhammad Ali Mazhar, J

JAHANGIR SIDDIQUI---Plaintiff

Versus

NOMAN ABID INVESTMENT MANAGEMENT LIMITED and 3 others---Defendants

Suit No.1731 of 2009, decided on 24th May, 2012.

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

----S. 42---Non-Banking Finance Companies and Notified Entities Regulations, 2008, Regls. 54(4), 57 & 66---Securities and Exchange Commission of Pakistan Act (XLII of 1997), Ss. 10 & 33---Companies Ordinance (XLVII of 1984), S. 282-J---Civil Procedure Code (V of 1908), S.9 & O.VII, Rr. 10 & 11---Suit for declaration, recovery of money and damages---Non-payment of redemption money of Units of Reliance Income Fund purchased by plaintiff from defendant-company---Defendant's application under O.VII, Rr. 10 & 11, C.P.C. for rejection or return of plaint for want of jurisdiction as such dispute pertaining to "Mutual Funds" and its redemption could be decided only by Securities and Exchange Commission; and that plaintiff had failed to avail remedy of appeal under S.33 of Securities and Exchange Commission of Pakistan Act, 1997---Validity---Executive Director of the Commission through his letter in response to plaintiff's complaint had advised him to approach appropriate forum for resolution of such dispute---Director had neither granted any relief to plaintiff nor issued him show-cause notice nor passed any order---Such letter had not decided any rights of parties, thus, same could not be treated as an order, rather same would be treated as an advisory or administrative direction, not appealable under S.33 of Securities and Exchange Commission Act, 1997---Civil Court had jurisdiction to try all suits, except those barred expressly or impliedly---No specific bar existed in Securities and Exchange Commission Act, 1997 on filing of present suit, thus same was maintainable--- Application under O.VII, Rr.10 & 11, C.P.C. was dismissed in circumstances.

Securities and Exchange Commission of Pakistan v. Mian Nisar Elahi 2009 SCMR 1392; National Accountability Bureau v. Zahida Sattar PLD 2001 Kar. 256; Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187; Fouzia Begum v. Government of Pakistan through Secretary, Ministry of Finance, Islamabad 2009 CLD 1537; Mst. Zahida Sattar v. Federation of Pakistan PLD 2002 SC 408; M. Waqar Monnoo, Member Central Managing Committee v. All Pakistan Textile Mills Association through C.E.O. 2003 CLD 1185; Qayyum Nawaz Khan v. Regional Manager, Agricultural Development Bank of Pakistan, Dera Ismail Khan PLD 1997 Pesh. 72; Abbasia Cooperative Bank (Now Punjab Provincial Cooperative Bank Ltd.) v. Hakeem Hafiz Muhammad Ghaus PLD 1997 SC 3; Amin Cotton Company v. Karachi Cotton Association Ltd. PLD 1968 Kar. 797; Shah Muhammad v. Mst. Resham Bibi 1986 CLC 2561; Collectorate of Central Excise Karachi v. Syed Muzakkar Hussain 2006 PTD 219; Attaullah v. Sanaullah PLD 2009 Kar. 38; Black's Law Dictionary; Judicial Dictionary by K.J. Aiyar 13th Edition; Deedar Hussain Jakhrani v. Federation of Pakistan 2011 PLC (C.S.) 203 and Sabir Hussain v. Board of Trustees Karachi 2010 YLR 3313 ref.

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

----Ss. 94, 151, O.XXXIX, Rr. 1, 2 & O.XL, R.1---Inherent jurisdiction of Civil Court---Extent---Temporary injunction, grant of---Receiver, appointment of---Scope.

Where there are compelling reasons and interest of justice requires or demands, the courts are neither helpless nor are they fettered by the specific provisions of Order XXXIX or Order XL, C.P.C., and in exercise of their inherent jurisdiction will certainly grant relief by way of temporary injunction or through appointment of a Receiver to protect the rights of citizens. It is not possible and prudent to specify or identify the various situations or reasons where or when the courts will exercise their inherent powers under S.94 or S.151, C.P.C. for granting a temporary injunction or appointing a Receiver. In each case, the court evaluates the overall situation considering the peculiar facts and circumstances on record and then the decision is taken whether in the interest of justice inherent powers are to be exercised or not. Each case has its own different set of facts and again and again new situations come before the court and, therefore, it is not possible to lay down specific principles restricting the power of courts to exercise their inherent jurisdiction in certain specified situations or for certain reasons only. If this were done, it would only impede the administration of justice and restrict the development of law.

Under Clause (e) of S.94, C.P.C., in order to prevent ends of justice from being defeated, court may, if it is so prescribed, make an interlocutory order as may appear to the court to be just and convenient. Passing of an interim order is on the part of working of judicial system and no separate or specific provision is necessary to empower a court to issue interim order. The power to grant interim relief vests in a court as a necessary corollary to the power to grant main relief. Not only under O.XXXIX, Rr. 1, & 2, C.P.C. injunction can also be granted under Ss.94 & 151, C.P.C.

Ali Muhammad Brohi v. Haji Muhammad Hashim PLD 1983 Kar. 527 ref.

Mst. Salma Jawaid v. S.M. Arshad PLD 1983 Kar. 303 and Sayyid Yousuf Husain Shirzai v. Pakistan Defence Officers Housing Authority 2010 MLD 1267 rel.

(c) Non-Banking Finance Companies and Notified Entities Regulations, 2008---

----Regls. 54, 57 & 66--- Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.10---Non-redemption of Units at Net Asset Value by Non-Banking Finance Company within statutory period of six days of request for redemption made by Unit-Holder---Consequences stated.

The redemption request has to be honoured within six days. If NBFC will operate their affairs in such a way and fail to comply with the specific regulations to honour and redeem the units within a specific period of time, there will be serious chaos and turmoil and the confidence reposed by the public-at-large on the financial institutions/Non-Banking Finance Companies will be shattered, their rights will be seriously prejudiced and their money will be on stake. Once redemption request is made, it is the responsibility of NBFC to honour the same without any delay or excuse. It does not sound good and logical that a person who has purchased units from NBFC on the hopes that he will have reasonable profit and returns/growth on his investment or funds, has to face serious hardship and problems to get back his own money on actual Net Assets Value (NAV) prevailing on the date of lodging his request, but has to wait for a long time for the redemption at the will and leisure of the NBFC, which is totally against the spirit of regulations promulgated by the Securities and Exchange Commission of Pakistan Act, 1997, which infact notified the regulations to safeguard and protect the rights and interest of unit holders.

(d) Words and phrases---

----"Order", meaning of.

Black's Law Dictionary; Judicial Dictionary by K.J. Aiyar 13th Edition and Deedar Hussain Jakhrani v. Federation of Pakistan 2011 PLC (C.S.) 203 rel.

Khalid Javed Khan for Plaintiff.

Muhammad Anwar Tariq and Obaidur Rehman for Defendants Nos.1 and 2.

Ijaz Shirazi for the Defendant No.3.

Date of hearing: 25th February, 2012.

2013 C L D 1995

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

ELITE PUBLISHERS LIMITED and 3 others---Appellants

Versus

SONERI BANK LIMITED---Respondent

Special High Court Appeal No.16 of 2011, decided on 22nd February, 2013.

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

----S. 9(2)---Documents attached with plaint---Scope---Unless full particulars supported by documents are disclosed in plaint, defendant would not be able to rebut the same---Mandatory under S.9(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, that plaint should be supported by statement of account.

Bankers Equity Limited and others v. Bentonite Pakistan Limited and others 2003 CLD 931 rel.

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

----Ss.9, 10 & 22---Recovery of Bank loan---Leave to defend, dismissal of---Effect---After dismissal of application for leave to defend, suit was decreed in favour of Bank---Validity---Defendants in their letter admitted that they could not make payment of outstanding dues of plaintiff Bank and then raised objections to statement of account but on scrutiny objections were found to be superficial and having no substance---Defendants could not prove that any of the entries in statement of account produced before Banking Court was wrong---If there was any discrepancy in statement of account, the same should have been brought to the notice of court to reconcile the same---High Court dismissed leave to defend application of defendants on technical ground as well as on merits---Defendants could not show any infirmity in order passed by Single Judge of High Court and such findings were maintained in High Court appeal.

C.M. Textile Mills (Pvt.) Ltd. v. Investment Corporation of Pakistan 2004 CLD 587; National Bank of Pakistan v. Al-Asif Sugar Mills Limited and others 2001 MLD 1317; Soneri Bank Limited v. Compass Trading Corporation (Pvt.) Limited and others 2012 CLD 1302 and Akber Soap Factory and another v. National Bank of Pakistan 2002 CLC 1698 ref.

Ms. Saman Riffat Imtiaz for Appellants.

Azizuddin Khan for Respondent.

Date of hearing: 23rd January, 2013.

2013 C L D 2022

[Sindh]

Before Ghulam Sarwar Korai and Munib Akhtar, JJ

ALLIED BANK OF PAKISTAN LTD.---Appellant

Versus

Messrs SAFA TEXTILE LIMITED and 7 others---Respondents

Ist Appeal No.31 of 2009, decided on 31st May, 2013.

Banking Tribunals Ordinance (LVIII of 1984)---

----S. 7---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S.9---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 2(c)(d), 7 & 22---Civil Procedure Code (V of 1908), O.VII, R.10---Suit for specific performance of underwritten agreement and sponsor agreement---Fresh issuance of shares by making public offer thereof for increasing in share capital of defendant-company---Bank agreeing with company through underwritten agreement to subscribe and take up specified number of shares in event of public offer thereof being under-subscribed---Sponsor agreement between Bank and other defendants, whereby they agreed to take up shares in terms stated therein---Failure of other defendants to take up shares, which Bank had taken under underwritten agreement in event of public offer thereof being under-subscribed--- Return of plaint by Banking Court for want of jurisdiction--- Bank's plea that shares were property, and subscription of underwritten shares by Bank was a purchase of property falling with definition of "finance"---Validity---Shares were property of movable type and share certificates were goods as per Sale of Goods Act, 1930---Shares once issued to a subscriber, he would become shareholder of company and holder of property at such time--- Act of issuance of fresh share capital by company would not be a sale of property--- Underwriting obligation was owed by Bank not on behalf of company---Sponsor agreement was not owed by company, but by its directors and/or sponsors, who were legally separate and distinct persons---Obligation undertaken by Bank in respect of an underwritten agreement/ transaction could not be regarded as "finance" within meaning of S.2(d) of Financial Institutions (Recovery of Finances) Act, 2001---Principles---High Court dismissed appeal.

National Bank of Pakistan v. S.G. Fibre Ltd. and others 2004 CLD 689; Bank Alfalah Ltd. v. Iftikhar A. Malik 2003 CLD 363; Naini Gopal and others v. State of Uttar Pradesh (1965) 35 Comp. Cas. 30; Mughul and Sons v. NIB Bank Ltd. and another 2012 CLD 1915; Procter and Gamble Pakistan (Pvt.) Ltd. v. Bank Alfalah Ltd. 2007 CLD 1532 and Karachi Electric Provident Fund v. National Investment (Unit) Trust 2003 CLD 1026 ref.

Asim Mansoor Khan for Appellant.

Rashid A. Razvi and Ms. Fareeda Mangrio for Respondent No.1.

Kashif Paracha for Respondents Nos.2 to 4 and 7 to 8.

Dates of hearing: 3rd April, 2nd and 15th May, 2013.

2013 C L D 2033

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

BANK OF PUNJAB through Authorized Attorney---Appellant

Versus

Messrs AMZ VENTURES LIMITED and another---Respondents

Special High Court Appeal No.133 of 2011, decided on 24th May, 2013.

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

----S. 22--- Constitution of Pakistan, Art. 199---Constitutional petition---Interlocutory orders, appeal against--- Maintainability--- Converting appeal into constitutional petition--- Scope--- For assailing interlocutory orders passed under Banking laws, no right of appeal vests in litigant and is specifically barred---Resort cannot be made to revisional and appellate jurisdiction of Civil Procedure Code, 1908, or to constitutional jurisdiction by filing petition under Art.199 of the Constitution to circumvent such specific bar under banking law---High Court has wide powers to treat appeal as petition under Art.199 of the Constitution and likewise a petition can be converted into appeal subject to limitation and jurisdiction---Appeal against interlocutory order cannot be converted into constitutional petition because statute has excluded right of appeal from interim order and the same cannot be bypassed by bringing under attack such interim orders in constitutional jurisdiction---Party affected has to wait till it matures into a final order and then to attack it in proper exclusive forum created for the purpose of examining such orders.

Pakistan Fisheries Ltd and others v. United Bank Limited PLD 1993 SC 109 and Syed Saghir Ahmad Naqvi v. Province of Sindh through Chief Secretary, S&GAD, Karachi and another 1996 SCMR 1165 rel.

(b) Administration of justice---

----Same transaction---Civil and criminal proceedings---Scope---Pendency of civil proceedings relating to same transaction is not a bar to commencement or continuation of criminal proceedings---Both proceedings can proceed concurrently as conviction for criminal offence is altogether a different matter from civil liability.

(c) National Accountability Ordinance (XVIII of 1999)---

----Ss. 5(r) & 9(a)(viii)---Wilful default of Bank loan---Prosecution---Pre-condition---Once Banking Court decrees suit of Bank only then bank is armed with unimpeachable evidence to get borrower declared as wilful defaulter---In absence of decree in favour of Bank, borrower cannot be declared wilful defaulter only on the basis of notice under National Accountability Ordinance, 1999.

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

----Ss. 9 & 22(6)---National Accountability Ordinance (XVIII of 1999), Ss.5 (r) & 9 (a)(viii)---Suit for recovery of Bank loan---Wilful default of bank loan---Remedies---Bank first filed banking suit under S.9 of Financial Institutions (Recovery of Finances) Ordinance, 2001, against respondents for recovery of money---Respondents filed leave to defend applications therein which were still pending and instead of following that remedy, bank resorted to new remedy by sending notice to respondents under the provisions of National Accountability Ordinance, 1999---Respondents approached Banking Court seeking orders restraining Bank from taking any action under notice issued by NAB---Validity---Bank had nothing to show that respondents were wilful defaulters; it could only be so when a competent court would determine liability of debtor i.e. respondents that lender (Bank) could approach Accountability Court under National Accountability Ordinance, 1999---Bar provided under S.22(6) of Financial Institutions (Recovery of Finances) Ordinance, 2001, could not be circumvented by filing revision under S.115, C.P.C. or appeal under O.XLIII, C.P.C. or constitutional petition under Art.199 of the Constitution--- Appeal was dismissed in circumstances.

Federation of Pakistan v. Mufti Iftikharuddin and another 2000 SCMR 1; Pakistan through Secretary, Ministry of Defence v. The General Public PLD 1989 SC 6; Chenab Cement Products Limited v. Banking Tribunal, Lahore and others PLD 1996 Lah. 672; Shafique Ahmed Butt v. Punjab Labour Appellate Tribunal 1983 CLC 1352; Sunrise Textile Mills Limited v. Crescent Commercial Bank Ltd and others 2007 SCMR 1569; Mrs. Shahida Faisal v. Federation of Pakistan and others PLD 2005 SC 323; The Bank of Punjab v. Administrator General, Central Zakat PLD 1994 Lah. 207; Mrs. Imtiaz Begum; v. Tariq Mehmood and another 1995 CLC 800; Umar Farooq Shah and others v. Mst. Shagufta Nasreen and others 1997 CLC 1846;Shaheen Airport Services v. Sindh Employees' Social Security Institution 1994 SCMR 881; Salah Muhammad v. Muhammad Roz and others PLD 1962 (WP) Lah. 68; PIA Corporation v. Wafaqi Mohtasib and 2 others PLD 1994 Kar. 32; Shamim Akhtar and others v. Mst. Maimoona Begum 1996 CLC 1257; International Multileasing Company v. Capital Assets Leasing Corporation Ltd. and others 2004 CLD 1; Mohar Khan and others v. Sultan Khan and others 1988 CLC 20; Marghub Siddiqi v. Hamid Ahmad Khan and others 1974 SCMR 519; Unichem Corporation (Pvt) Ltd. and others v. Abdullah Ismail and others 1992 MLD 2374; Haji Sardar Khalid Naseem v. Muhamamd Ashraf and others 2006 SCMR 1192; Seema Fareed and others v. The State and another 2008 SCMR 839; Talib Hussain v. Anar Gul Khan and others 1993 SCMR 2177; Messrs Mehran Solvent Extraction (Pvt.) Ltd. and others v. IDBP 2008 CLD 844; Ms. Afshan Ahmed v. Habib Bank Limited and another 2002 CLD 137; Habib Bank Limited v. Bela Automobiles Ltd. 2006 CLD 169 and Marhaba Textile Ltd. v. Industrial Development Bank of Pakistan 2003 CLD 1822 ref.

S. Hamid Ali Shah for Appellant.

Nemo for Respondent No.1.

Salman Talibuddin for Respondent No.2.

Date of hearing: 13th March, 2013.

2013 C L D 2056

[Sindh]

Before Muhammad Ali Mazhar, J

SHAFIQUE AHMED QURESHI and others---Plaintiffs

Versus

HYDERABAD CHAMBERS OF COMMERCE AND INDUSTRY through President and others---Defendants

Suits Nos. 1408 and 1409 of 2012, decided on 5th August, 2013.

(a) Trade Organizations Rules, 2013---

----R. 2(b) & (g)---'Associate member' and 'corporate member'---Scope---Associate membership can only be allowed with some restrictions in the class itself---Requirement of annual turnover of fifty million rupees or above is mandatory for both the classes of members.

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

----Ss. 42 & 54---Companies Ordinance (XLVII of 1984), Ss.42 & 177---Trade Organizations Ordinance (XLIX of 2009), Ss.1(3) & 35(a)---Suit for declaration and injunction--- Chamber of Commerce and Industry, elections of---Voter lists---Corporate and Associate class---Dispute was with regard to holding of elections of Chamber of Commerce and Industry and pertaining to inclusion of voters in corporate class and associate class---Plea raised by plaintiffs was that when election was stayed by High Court, then in view of S.177 of Companies Ordinance, 1984, previous management would continue till next elections---Validity---Provision of S.177 of Companies Ordinance, 1984, had no direct application or germane to the controversy involved---Once High Court restrained the Chamber of Commerce and Industry concerned from holding elections it meant that status quo order was required to be maintained and formation of ad hoc committee in intervening period was not a lawful act---Entire controversy could be resolved between corporate and associate class of members if extraordinary general meeting was convened and appointment of ad hoc committee would not serve the purpose, as the same not only complicated the situation but would become further instrumental to delay election process---High Court directed that present executive committee of the Chamber would continue to hold their offices till next elections and would not terminate/cancel membership of any member nor induct any new member---High Court further directed the executive committee to hold extraordinary general meeting (EGM) of its members on 21 days clear notice to all members in accordance with articles of association and agenda of the meeting would be to discuss articles of association to decide the matter according to will of majority of members---High Court also directed that after deciding fate of articles of association in the meeting executive committee would announce date of next election and also appoint independent and impartial election sub-committee and appellate commission as provided in articles of association to conduct elections---Suit was decreed accordingly.

Abu Dhabi Medical Devices Co. L.L.C. v. Federation of Pakistan 2010 CLC 1253; Sindh High Court Bar Association v. Federation of Pakistan PLD 2009 SC 879; PLD 2010 Kar. 261; Lahore Race Club v. Raja Khusbakht-ur-Rehman PLD 2008 SC 707; Rimpa Sunbeam's case PLD 2006 Kar. 444; Muhammad Saeed v. Federation of Pakistan PLD 1954 Sindh 117; Pakistan v. Waliullah Sufyani PLD 1965 SC 310; Mushtaq Ali Tahirkheli's case PLD 2003 SC 930; Chalna Fibre v. Abdul Jabbar PLD 1968 SC 381; 2010 CLD 760; PLD 2011 Kar. 416; 1998 SCMR 1618; PLD 1993 SC 395 and 2012 CLD 1339 ref.

Dr. Muhammad Farogh Naseem for Plaintiffs (in both suits).

Sardar M. Aijaz Khan for Defendant No.1 (in both suits).

Ravi Pinjani for Defendants Nos.3 to 8 (in Suit No.1408 of 2012).

Jhamat Jethanand for Defendants Nos.11 to 18 (in Suit No.1408 of 2012) and for Defendants Nos.6 to 13 (in Suit No.1409 of 2012).

Haq Nawaz Talpur for Defendants Nos.9 and 10 (in Suit No.1408 of 2012) and for Defendant No.8 (in Suit No.1409 of 2012).

Dates of hearing: 27th March, 10th April, 24th April and 29th May, 2013.

2013 C L D 2087

[Sindh]

Before Nadeem Akhtar, J

BAYER AG. through Authorized Signatory and another---Plaintiffs

Versus

BAYHEALTH CARE (PRIVATE) LIMITED through Chief Executive Director, Company Secretary and another---Defendants

Suit No. 727 of 2008, decided on 27th May, 2013.

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

----Ss. 43 & 77---Suit for trademark/trade-name/passing off/copyright, infringement of---Facts essential to give rise to a cause of action to plaintiff stated.

In a case where the plaintiff alleges that the defendant has infringed his trademark, copyright or trade name, it is to be gauged as to whether or not the products of the plaintiff and the defendant are identical or to what extent they are similar in size, shape, colour/colour scheme, texture, packing, presentation or appearance, so as to deceive the customer/consumer to purchase/use the product of the defendant without any hesitation or doubt in his mind, under the impression that he has purchased/used the product of the plaintiff. It is no necessary that the defendant's product should have all the above characteristics to look similar or identical to the product of the plaintiff; any one or some of them may be sufficient in some cases to create such a situation. If the customer/consumer gets deceived or becomes doubtful or confused after looking at or comparing the products of the plaintiff and the defendant, the plaintiff will be justified in bringing an action against the defendant. It is not necessary that the deception or confusion was caused by the defendant deliberately or intentionally, and even unintentional deception and confusion in such cases would give rise to a cause of action to the plaintiff as the main element is the deception and/or confusion, and not the intention of the person responsible for the deception and/or confusion. The above aspect becomes more important and applicable when the plaintiff and defendant are operating and carrying on business in the same area/field, the nature of their business is the same or similar, and the operations and business of the plaintiff were prior in time to those of the defendant.

Messrs Mehran Ghee Mills (Pvt.) Limited and others v. Messrs Chiltan Ghee Mills (Pvt.) Limited and others 2001 SCMR 967; Messrs Tabaq Restaurant v. Messrs Tabaq Restaurant 1987 SCMR 1090; Jamia Industries Ltd. v. Caltex Oil (Pak) Ltd. and another PLD 1984 SC 8; Glaxo Laboratories Ltd., England v. Assistant Registrar, Trade Marks, Karachi and another PLD 1977 Kar. 858; Messrs Zenith Laboratory (Pak.) Ltd. v. Messrs British Drug Houses Ltd., England and another PLD 1970 Dacca 772; Pakistan Battery Manufacturing Co., Karachi v. Muhammad Hussain and 3 others PLD 1970 Kar. 92; Bandenawaz Ltd. v. Registrar of Trade Marks, Karachi and another PLD 1967 Kar. 492; New Light Chemical Industries v. Registrar of Trade Marks and another PLD 1963 Dacca 75; Messrs Al-Anis Laboratories through its 4 Partners v. Messrs Al-Chemist and another 1987 MLD 2823; Muhammad Rafiq v. Muhammad Ali 1986 CLC 2621; Bashir Ahmad v. Registered Firm Hafiz Habibur Rehman and another 1980 CLC 1268; Messrs Muhammad Bakhsh and Sons Ltd. and another v. Azhar Wali Muhammad and 11 others 1986 MLD 1870 and Messrs ADT Services AG through Attorney and another v. Messrs ADT Pakistan (Pvt.) Ltd. through Promoter and Director and 4 others 2005 CLD 1546 ref.

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

----Ss. 43 & 77---Infringement of trademark/trade-name/ passing off/copyright--- Steps to minimize possibility of infringement stated.

When a person, firm or company decides to start the business in a particular name and style or with a particular trademark or copyright, he/they are duty bound to ascertain and ensure that the name and style or the trademark or copyright which they intent to use, was not being used by any other entity. If such caution is not exercised and any infringement and/or passing off is caused, the entire responsibility as to the consequences shall rest on the person/entity, who uses the same or similar name and style, trademark or copyright that was already in the use of or was already owned by the other entity.

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

----Ss. 43 & 77---Infringement of trademark/trade-name/ passing off/copyright---Consequences/impact stated.

In the case of infringement or passing off, the person indulged in or responsible for the infringement or passing off not only commits illegal acts, but he also commits moral and ethical wrongs. He deceives and cheats the unguarded public at large; he deceives and cheats the person whose trademark/copyright/trade name/company name is infringed or whose business or goods are involved in passing off; he causes loss to the business, reputation and goodwill of such person through his illegal acts of infringement, passing off and unfair competition; and he also violates the law.

Mrs. Amna Salman for Plaintiffs.

Defendant No. 1 Bayhealth Care (Private) Limited called absent.

Defendant No.2 the Deputy Registrar of Companies, SECP, Karachi called absent.

Dates of hearing: 14th December, 2012 and 11th January, 2013.

2013 C L D 2107

[Sindh]

Before Mushir Alam, C.J. and Nadeem Akhtar, J

BASHIR AHMED---Petitioner

Versus

ALLIED BANK LIMITED and 2 others---Respondents

Constitutional Petition No.D-4559 of 2012, heard on 17th May, 2013.

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

----Ss. 9, 19 & 15---Constitution of Pakistan, Art.199---Constitutional petition---Suit for recovery of loan amount---Execution of decree by the Banking Court---Sale of mortgaged property---Objection petition---Bank filed suit for recovery of loan amount against the mortgagor who did not file application for leave to defend nor did he appear and suit was decreed ex parte---Execution petition was filed and mortgaged property was ordered to be attached---Petitioner filed objection petition for protection of his possession being tenant of mortgaged property which was dismissed by the executing court---Validity---Section 15 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, applied to cases where notices were issued by the financial institution to the mortgagor demanding payment of the outstanding mortgage money and such notices could be issued even without approaching the Banking Court---No notices were issued by the Bank and suit for recovery was filed before the Banking Court which resulted into passing of the decree---Upon pronouncement of judgment and decree, S.19 of the Ordinance would come into play, which provided the mechanism for execution of the decree and sale of the mortgaged property with or without intervention of the Banking Court---Applicability of subsection (3) of S.15 of the Ordinance had been specifically excluded in the sale of mortgaged, pledged or hypothecated property by a financial institution in exercise of its power conferred by S.19(3) of the Ordinance---Burden was on the petitioner to prove the assertion that lease in his favour was bona fide and the question as to whether the lease was bona fide or not, could be proved only through evidence and not otherwise---Question as to the presumption of the lease to be not bona fide, was to be left at the discretion of the Banking Court, and such question was to be decided and such discretion was to be exercised by the Banking Court according to the facts and circumstances of each case---Lease was created in favour of the petitioner during the subsistence of the mortgage in favour of Bank---Consent of Bank/mortgagee was also not obtained by the mortgagor--- Lease was created for a term of five (5) years through an unregistered document, the purpose of not getting the lease registered was obvious---Had the lease been submitted for registration, the Sub-Registrar would have immediately refused to register the same in view of the mortgage already registered with him---Mala fides on the part of mortgagor and collusion on the part of petitioner were apparent---Facts about creation of the lease in favour of the petitioner after creation of the mortgage, petitioner having failed in establishing that Rs. 1,060,000.00 was paid by him towards the rent, and the collusion on his part, were noticed by the Banking Court---Lease was not bona fide and petitioner was not entitled to the protection under the proviso of S.15(6) of the Ordinance---Mortgagor did not file any appeal against the decree passed by the Banking Court for the sale of the mortgaged property and said decree had attained finality---Duty of the Banking Court was to execute the decree in accordance with law---No infirmity or illegality in the impugned order passed by the Banking Court was found---Constitutional petition was dismissed.

Lubna Afzal v. Union Bank Limited and 8 others 2003 CLD 868 and Mst. Pathani through Attorney v. Habib Bank Limited and another 2012 CLD 1957 rel.

Mrs. Mubarak Shah v. The Banking Court Judge No.III and others 2005 CLD 515 and Messrs Climax Printer and another v. Messrs Habib Bank Ltd. and others 2008 CLD 761 = 2008 MLD 1068 distinguished.

Naleymitho alias Muhammad Ishaque for Petitioner.

Ms. Tania Alam for Respondent No.1.

Jamsheed Ghaswala for Respondent No.2 called absent.

Date of hearing: 17th May, 2013.

2013 C L D 2120

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

SALFI TEXTILE MILLS LIMITED and another---Petitioners

Versus

CITY DISTRICT GOVERNMENT OF KARACHI through D.C.O. and another---Respondents

Constitutional Petition No.D-3383 of 2011 and C.M.As. Nos.2223 and 2224 of 2013, decided on 11th March, 2013.

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

----Ss. 39 & 40---Change of its name by company---Procedure and legal effect of such change stated.

Incorporation, registration, management, change in the management, shares, amalgamation, merger, change in name, conduct and affairs of companies, certain other association and corporate enterprise and matter incidental thereto are regulated and controlled by the Companies Ordinance, 1984, which is a comprehensive Code in itself. A company incorporated under the Companies Ordinance, 1984 is permitted to change its name in accordance with the provisions of section; which inter alia require a special resolution with the approval of the Registrar of Companies in writing bringing the change of its name. The effect of such change in the name of the corporate entity is dealt with in section 40 of the Ordinance; whenever a special resolution is passed by the company with the concurrence of the Registrar of Companies, such change in name of the company is to be recorded in the Register of the companies in place of its former name and a fresh certificate of incorporation with new name is issued. On issuance of certificate of incorporation with altered or new name, the process of change of name of a corporate entity is complete. Whenever name of a company is changed in accordance with section 39, the company that has changed its name is mandated to continue use of its former name along with its new name side by side for a period of one year from the date of issuance of such altered certificate of incorporation. Change in the name of a company does not affect any right or obligation of the company nor render defective or any legal proceedings by or against the company nor rights and interest of creditors and or other persons dealing with the company in any manner are prejudiced, legal proceedings, contract and or transaction as the case may be continued or commenced and or executed and enforced against the company by its former name or by its new name and for all practical purposes change of name does not affect or bring about the change of management and or transfer of management and change in name does not bring into being a new legal entity it remains the same entity merely with a new identity.

(b) Disposal of Land and Estate Regulations, 1965---

----Regln. 14 & Appendix-F, Condition No. 17---Karachi Development Authority Order (P.O. V of 1957), Art. 15---­Constitution of Pakistan, Art. 199---Constitutional petition--- ­Industrial plot--- Petitioner-company as allottee/lessee of such plot sought to change its name into record of City District Government and permission to mortgage such plot---City Government required petitioner to register change of its name with Sub-Registrar, then change of name in its record and permission to mortgage such plot would be processed and finalized---Validity---Petitioner had not claimed change in its name on basis of any registered document or inheritance or decision of court---Petitioner had sought change in its name on basis of resolution of its Board of Directors with concurrence of Registrar of Companies in accordance with S. 39 of Companies Ordinance, 1984, thus, such change in name would not involve any change of interest i.e. same would be without transfer of title, right and interest in such plot---Petitioner's company despite change in its name would remain same company with a new name and identity---Such change in record of City Government could be made on payment of Rs.10 per square yard as mutation fee---High Court directed City Government to effect such change in its record on payment of Rs.10 per square yard and process petitioner's request for permission to mortgage plot in accordance with law within specified time.

Pioneer Protective Glass Fibre P. Ltd. v. Fibre Glass Pilkington Ltd. Vol.60 1986 Company Cases page 707; Kalipada Sinha v. Mahalxmi Bank Ltd. AIR 1966 Calcutta 585; Sulphur Dyes Ltd. v. Hickson and Dadajee Ltd. Vol. 83 (1995) Company Cases page 533 and Hira Textile Mills Ltd. v. Executive District Officer (Revenue), Kasur and 4 others 2009 CLD 839 rel.

(c) Interpretation of statutes---

----Fiscal statute---Charging provision would be construed strictly, but ambiguity therein, if any, would be resolved in favour of assessee---Principles.

Charging provisions may it be prescribing fee or tax are to be strictly construed and in case of any ambiguity, it is to be resolved in favour of the subject/assessee. A person cannot be compelled to pay more than what is prescribed and fixed by or under the authority of law.

Rashid Anwar and Muhammad Amin Bandukda for Petitioners.

Syed Sultan Ahmed for CDGK/KMC.

Miran Muhammad Shah, A.A.-G.

2013 C L D 2138

[Sindh]

Before Muhammad Ali Mazhar, J

MEEZAN BANK LIMITED---Plaintiff

Versus

Messrs FOCUS APPARELS (PVT.) LTD. and 6 others---Defendants

Suit No.B-62 and C.M.A. No.11385 of 2012, decided on 28th August, 2013.

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

----S. 9---Civil Procedure Code (V of 1908), O.I, R.10---Contract Act (IX of 1872), Ss. 131, 127 & 129---Suit for recovery--- Contract of guarantee/surety--- Death of surety---Effect---Application for impleadment of legal heirs of surety as party(s) in the suit for recovery---Revocation of continuing guarantee by surety's death---Scope---Plaintiff Bank sought to implead legal heirs of one of the defendants in the suit for recovery, who had died, on basis of a guarantee furnished by the said deceased defendant---Contention of the plaintiff Bank was that the said personal guarantee had stated that in event of his death, defendant's successors would be liable and that S.131 of the Contract Act, 1872 provided that the death of a surety revoked the continuing guarantee but only in absence of a contract to the contrary---Validity---Contract of guarantee could not be enforced unless there was some consideration for the guarantee and the contract of guarantee must be based on consideration and if the consideration so specified was not brought on record, then court could not assume such consideration---Nothing was mentioned in the plaint as to what financial facility was availed by the said defendant against the guarantee executed by him and it was not mentioned whether any demand was raised against the deceased defendant in his lifetime---Although the deceased defendant had agreed that in case of his death, the bank shall have the right to dispose of his moveable and immovable assets, but no schedule was attached with guarantee to show whether the defendant/guarantor had provided any details of his moveable and immovable assets---Vast difference existed between a "guarantor" and a "mortgagor"; and had the deceased defendant in his lifetime mortgaged property against some finance facility, recovery could have been made through disposal of assets by impleading his legal heirs, however, this was not the situation in the present case---Mere mentioning of the words in the guarantee that the same "would be binding on successors-in-interests" would have no significance and the legal heirs could not be held responsible unless they agreed to the covenant made in the guarantee by their predecessors-in-interest in their absence---Condition of S.131 of the Contract Act, 1872 "in absence of any contract" did not mean to hold responsible legal heirs of a deceased guarantor as there existed no contract between the plaintiff Bank and the said legal heirs, and therefore, S.131 of the Contract Act, 1872 was not applicable---Legal heirs of the deceased defendant, were therefore, neither necessary or proper party(s) to the suit and the plaintiff had failed to figure out any cause of action against the said legal heirs---Application was dismissed, in circumstances.

First Women Bank Ltd. v. Mrs. Afifa Iftikhar and 2 others 2008 CLD 552; Rafique Hazquel Masih v. Bank Alfalah Ltd. and others 2005 SCMR 72; Malik Bashir Ahmad Khan and another v. Qasim Ali and 12 others PLD 2003 Lah. 615 and Messrs Habib Bank Ltd. v. Messrs Indus Lenentose (Pvt.) Ltd. and others 2003 CLD 1788 distinguished.

Muslim Commercial Bank v. East and Exports (Pvt.) Ltd. and others 2007 CLD 1205 and Mst. Fayyazi Begum and 6 others v. Ali Hassan and another 2009 CLD 1476 rel.

A.I. Chundrigar, Nabeel Kolachi and Muhammad Ilyas for Plaintiff.

Mirza Sarfraz Ahmed for Defendants Nos.1, 2 and 4 to 6.

Khawaja Shams-ul-Islam for the Legal Heires of Defendant No.3.

Date of hearing: 7th May, 2013.

2013 C L D 2156

[Sindh]

Before Muhammad Ali Mazhar, J

COMPANIES ORDINANCE, 1984 FOR CONFIRMING THE REDUCTION IN CAPITAL: In the matter of

J.M. No.11 of 2013, decided on 5th August, 2013.

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

----Ss. 96, 97 & 98---Instances in which reduction of share capital of company is commonly adopted, listed.

Guide to the Companies Act, 17th Edition 2010 authored by A. Ramaiya, at pages 1407 to 1409 rel.

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

----S. 96, 97, 98 & 101---Reduction in share capital of Company---Power of the court to dispense with addition to name of company of the phrase "and reduced"---Scope---Order of court confirming reduction of share capital of the Company---Nature and scope of---Court firstly has to be satisfied that if any creditors had objected to the reduction in share capital of the company, that either their consent to the reduction had been obtained or their debts or claims had been discharged with or settled---Court's power in said matters relating to reduction of share capital was discretionary with further powers to impose conditions if found necessary keeping in view the facts and circumstances of each case---Court generally required the company to use the words "and reduced" as part of its name after capital reduction and to publish the same in newspapers for the sake of public's knowledge of the reasons for the reduction in share capital but such condition may be dispensed with if reduction did not involve diminution of any liability in respect of unpaid share capital or payment to any shareholder of any paid-up capital---Extent and amount of reduction was a domestic matter and so long as there was no injustice caused to the creditors or shareholders, the court was not concerned with the precise amount of reduction of capital---Powers were conferred on the court in order to enable it to protect the interests of dissenting shareholders including even those who did not appeal and in making its order, the Court approved a minute and embodying minute in a confirmatory order was a sufficient approval---Said minute was designed to show the altered structure of the company capital and the amount of remaining share capital, the number of shares into which it was to be divided, the amount of each share if any at the date of registration of the minute deemed to be paid-up on each share---In order to determine whether to approve the reduction of capital or not, the court would consider the factors whether shareholders had been treated equitably, whether the reduction proposals had been properly explained, whether creditors or third party interests had been prejudiced and whether the reduction had a discernable purpose.

Pak Asian Fund Limited's case 1999 CLC 1603; Bankers Equity Ltd.'s case 1988 MLD 1408; Guide to the Companies Act, 17th Edition 2010 authored by A. Ramaiya, at pages 1407 to 1409; Westburn Sugar Refineries Ltd.'s case [1951] 1 All ER 881 and Palmer's Company Law's case Vol.1 25th Edn. rel.

Mehmood Mandviwala and Naveed-ul-Haq for Petitioner.

Waqas Shaikh, Law Officer, SECP.

Muhammad Ramzan, Deputy Director, State Bank of Pakistan.

Date of hearing: 28th June, 2013.

2013 C L D 2187

[Sindh]

Before Mushir Alam, C.J. and Sadiq Hussain Bhatti, J

ABDUL RAHMAN BALOCH---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN through Chairman and 3 others---Respondents

Constitutional Petition No.D-424 of 2009, decided by 24th April, 2013.

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

----S. 282-D---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.20---Securities and Exchange Commission Circular No. 26/2008 dated 5-11-2008--- Non-Banking Finance Companies (Establishment and Regulations) Rules, 2003, R.7---Constitution of Pakistan, Art. 199--- Constitutional petition--- Mutual Funds, investments in--- Net Asset Value of such funds, calculation of--- Circular issued by Securities and Exchange Commission directing securities held by such Funds to be valued after applying discount rates prescribed therein---Determination of redemption value of petitioner's investments in such funds on basis of such discounted rates---Petitioner alleged such Circular not to be in public interest as same would result in reducing size of investment of an investor---Validity---Commission for ensuring honest and fair trade practices in securities markets could issue directions in nature of impugned Circular to Assets Management Companies---Such companies for being regulatory authorities were legally bound to follow such directions of Commission---Impugned Circular had neither recalled profit received by petitioner nor disturbed any past and closed transaction---Main object of impugned Circular was to save stock markets from complete collapse by correcting defective pricing mechanism to safeguard interest of general investors---According to Commission at time of issuing impugned Circular, there was dearth of liquidity and price discovery in stock markets playing havoc with the market, which led to complete erosion of confidence in market, which led to unprecedented redemption pressure---Commission in such circumstances had directed redemption of units at actual Net Asset Value by applying discounted rates prescribed in impugned Circular, but not at exaggerated Net Asset Value---Commission had lawfully issued impugned Circular in public interest i.e. to safeguard interest of unit holders and eliminate element of unfair trading practices in stock markets---High Court dismissed constitutional petition in circumstances.

Babar Khan Ghori and another v. Federation of Pakistan and others PLD 1999 Kar. 402; Al-Samrez Enterprise v. The Federation of Pakistan 1986 SCMR 1917; Abdul Quddus v. The State 1985 SCMR 172; Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268; Mian Muhammad and others v. The Municipal Committee through Chairman 1983 SCMR 732; State Life Insurance Corporation of Pakistan v. Messrs Pakistan Tobacco Company Ltd. PLD 1983 SC 280 and Messrs Momin Motor Company v. The Regional Transport Authority, Dacca PLD 1962 SC 108 ref.

(b) Words and phrases---

----"Public interest"---Definition stated.

Babar Khan Ghori and another v. Federation of Pakistan and others PLD 1999 Kar. 402 and Stroud's Judicial Dictionary, Fourth Edition, Page 2186 ref.

Shahenshah Hussain for Petitioner.

Khurram Rasheed for Respondent No.1.

Abdul Qayyum Abbasi for BMA Associates Management.

Muhammad Ashraf Mughal, D.A.-G.

Ms. Naheed A. Shahid for Respondent No.3.

Muhammad Akram Javed for Respondent No.4.

Date of hearing: 13th March, 2013.

2013 C L D 2220

[Sindh]

Before Irfan Saadat Khan, J

Messrs S. S. CORPORATION through Authorized Attorney---Appellant

Versus

PROGRESSIVE TRADERS (PVT.) LTD. and another---Respondents

Miscellaneous Appeal No.16 of 2008, decided on 19th April, 2013.

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

----S. 114---Trade Marks Rules, 2004, R.85---Appeal before High Court---Delay, condonation of---Impugned order passed on 29-8-2007, certified copy whereof applied on 25-9-2007, which was prepared and issued on 12-11-2007, whereas appeal was filed on 9-1-2008---Validity---Period of 60 days for filing an appeal, if computed from date of impugned order, then appeal would be barred by 133 days---Period of 48 days consumed in obtaining certified copy of impugned order, if excluded from 133 days, then delay would come to 85 days---High Court had jurisdiction to allow further time after considering merits of case, if there was an application for condonation of delay, but not otherwise---Appellant had not filed application for condonation of delay, thus, no relief could be given to him by way of implied condonation of delay---High Court dismissed appeal for being time barred.

National Detergents Limited v. Nirma Chemical Works and another 1992 MLD 2357; 1928 Volume 45 RPC 193; 1928 Volume 45 RPC 421; 1909 Volume 26 RPC 850; Exon Corporation and Esso Inc. v. Syed Nasir Ahmed Jafry and another 1994 SCMR 918; Clifford Chance v. Assistant Registrar of Trade Marks 2009 CLC 339 and Arshad Nasim v. Registrar of Trade Marks and another 1986 CLC 2622 ref.

Clifford Chance v. Assistant Registrar of Trade Marks 2009 CLC 339; Arshad Nasim v. Registrar of Trade Marks and another 1986 CLC 2622; Messrs Star Cotton Corporation (Pvt.) Ltd. Karachi v. Collector of Customs, Karachi and another 2010 PTD 1739; Abid v. The State 1998 SCMR 1146; Honda Atlas Cars (Pakistan) Ltd. v. Honda Sarhad (Pvt.) Ltd. and others 2005 SCMR 609 and Miss Rahat Afroze v. State Life Insurance Corporation and others 2008 SCMR 656 rel.

(b) Limitation---

----Appeal on its face being time-barred---Effect---Appellate Court would not be bound to discuss and dilate upon merits of case.

Munawar Ghani for Appellant.

Naveed Ahmed for Respondent No.1.

Date of hearing: 12th April, 2013.

2013 C L D 1

[Lahore]

Before Umar Ata Bandial, J

REGISTRAR OF COMPANIES, PAKISTAN through Joint Registrar of Companies---Applicant

Versus

TAJ COMPANY LTD. and 8 others---Respondents

C.M. No.334-L of 2004 in Civil Original No.45 of 1990, decided on 29th September, 2011.

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

----Ss. 19 & 22---Execution proceedings---Mortgaged property at place "K" attached by Banking Court at place "L"---­Objection petition by another decree holder-Bank that such property could not be attached as same was purchased by objector at reserve price fixed in failed auction thereof by Banking Court at place "K" in satisfaction of its decree obtained against deceased principal debtor and mortgagor---­Validity---Objector-Bank had filed recovery suit against principal debtor and mortgagor of property at place "K" in court at place "K" after its attachment by court at place "L" in execution proceedings---Deceased principal debtor in his statement made to court at place "L" claimed to be owner of three properties including property at place "K", which he got registered in names of his family members---Mortgagee and objector of such properties was same objector-Bank---In absence of proof on record of the means of mortgagor (wife of principal debtor) to acquire ownership of two of properties including property at place "K", principal debtor appeared to have been laundering and re-cycling embezzled monies belonging to his company under liquidation before court at place "L"---Objector-Bank had strong financial links with deceased principal debtor and had advanced him loan---Objector-Bank had knowledge about present execution proceedings---Objector-Bank, though claimed equitable mortgages in its favour regarding other two properties and displayed same collusive protection in relation thereto, but had not challenged order of court at place "L" allowing sale thereof---Such inaction of objector-Bank would show its plea to be defective and bogus---Fraudulent and collusive action to avoid process of court at place "L" by resort to a collusive and artificial sale in execution of a collusive decree could not receive protection of immunities and exceptions created for honest transactions entered by genuine and bona fide parties--­Neither principal debtor nor his mortgagor wife nor objector-­Bank were bona fide parties to a genuine and honest execution sale by court at place "K"---Principal debtor, his wife-mortgagor and objector-Bank had colluded to create an obstruction to enforcement of attachment order passed by court at place "L"---High Court at place "L" dismissed such objection petition in circumstances.

Union Leasing Limited v. Pakistan Industrial Credit and Investment Corporation Ltd. through Deputy Managing Director and 8 others 2005 CLD 958; United Bank Limited v. P.I.C.I.C. and others 1992 SCMR 1731; Mana and 4 others v. Hussain Bakhsh and 5 others 1993 CLC 1400; Industrial Development Bank of Pakistan through Deputy Chief Manager v. Saadi Asmatullah and others 1999 SCMR 2874 and Orix Leasing Pakistan Ltd. v. Sunshine Cloth Limited 2001 PTD 3146 ref.

Ms. Qubra Gillani for Applicant.

Shehram Sarwar Chaudhry for O/L of Respondent Company.

Syed Zafar Ali Shah, O/L along with Akram Rathor, General Manager, Taj Company.

2013 C L D 25

[Lahore]

Before Shujaat Ali Khan, J

MUHAMMAD ADNAN (MUHAMMAD IRFAN)----Petitioner

Versus

ADDITIONAL DISTRICT JUDGE HAFIZABAD and another----Respondents

Civil Revision No. 2275 of 2012, decided on 20th July, 2012.

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

----O. XXXVII, R. 3---Suit for recovery---Direction to the defendant lo deposit disputed amount in court---Scope---Application for leave to defend by the defendant was allowed with the direction to the defendant to deposit the recovery amount in the court---Defendant contended that condition on the defendant for depositing the said amount with the court was arbitrary and therefore, the order of the Trial Court should be set aside to such extent---Validity---Court under O. XXXVII, Rule 3, C.P.C. had the discretion to grant leave to defend conditionally or unconditionally and could, amongst other things, direct payment of the amount in dispute to be deposited with the court ----No illegality in the impugned order having been found, revision was dismissed.

Bashumal v. Dr. Zahoor Ahmad Sheikh 2008 SCMR 39; Abdul Karim Mengal v. Sultan Badshah 2010 YLR 2596 and Muhammad Azad v. Malik Zahoor 2008 CLD 1128 rel.

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

----S. 118---Execution of a cheque, prima facie, carried the presumption that the same was issued against some consideration.

Muhammad Azhar Sulehria for Petitioner.

2013 C L D 54

[Lahore]

Before Muhammad Khalid Mehmood Khan and Shahid Waheed, JJ

M. SALEEM & COMPANY and 4 others---Appellants

Versus

Messrs ASKARI COMMERCIAL BANK LIMITED---Respondent

Regular First Appeal No. 218 of 2006, heard on 2nd April, 2012.

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

----Ss. 10 & 22---Suit for recovery was decreed, and leave to defend was refused, on the ground that the defendant had availed the finance facility for Letter of Credit and had not pointed out any discrepancy---Validity---Amount availed by the defendant was as per agreement and the amount due pertained to that period which was not covered under the agreement for finance---Agreement for Letter of Credit, on examination, showed that the column for mark-up was blank---Defendant had deposited the margin for every Letter of Credit but the said margin amount had not been shown credited to the appellants liability account---Signature on the Letters of Credit and the other letters relied on by the Trial Court, prima facie, differed with each other---High Court set aside decree of Trial Court and remanded the case to Trial Court with the direction to grant the defendant leave to defend---Appeal was allowed, in circumstances.

Waqar Mushtaq Ahmed for Appellants.

Qazi Iftikhar Ahmad Toor for Respondent.

Date of hearing: 2nd April, 2012.

2013 C L D 66

[Lahore]

Before Ch. Shahid Saeed, J

NAVEED MERCHANT---Petitioner

Versus

SAFDAR GONDAL and 4 others---Respondents

Civil Revision No.2644 of 2010, decided on 19th December, 2011.

Contract Act (IX of 1872)---

----S. 73---Civil Procedure Code (V of 1908), O. I, R. 10---Breach of contract--- Suit for damages and compensation---Necessary or proper party---Defendant's application for striking out his name as a defendant in the suit was dismissed by Trial Court---Validity---Plaintiff had filed suit on the basis of an oral agreement between him and the other defendant and no specific role had been mentioned in the plaint against the defendant---Main grievance of the plaintiff was against the defendant Company and its officials whereas the defendant was only an estate advisor for said Company---Defendant was not a beneficiary of the alleged oral agreement---Compensation for breach of contract could be claimed from a party which had breached the terms of the agreement---Person who was not a party to contract was neither necessary nor proper party in a suit for damages---High Court set aside order of Trial Court and allowed the defendant's application for striking out his name as defendant in the suit---Revision was allowed, accordingly.

Province of the Punjab through Secretary, Sports Government of the Punjab and another v. Messrs Qavi Engineers Pvt. Ltd. through Director and 2 others 2007 MLD 89 rel.

Aamir Mehmood for Petitioner.

Bilal Kashmiri for Respondents.

2013 C L D 108

[Lahore]

Before Mrs. Ayesha A. Malik, J

ICI POLYESTER EMPLOYEES UNION (CBA) REGISTERED---Petitioner

Versus

TRUSTEES UNION and 2 others---Respondents

C.O. No.31 of 2009, decided on 19th December, 2012.

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

----Ss. 7, 227, 229, & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S. 20---Employee's provident fund and securities---Petitioner (Employee's Union) under S.227 of the Companies Ordinance, 1984 sought direction for payment of loss and for furnishing all receipts of money deposited in the provident fund by the respondent company---Contention of the petitioner was that under S.7 of the Companies Ordinance, 1984 High Court could exercise jurisdiction in all civil matters under Companies Ordinance, 1984---Validity---Section 7 of the Companies Ordinance, 1984, no doubt, vested original civil jurisdiction with the High Court, however, context or meaning of original civil jurisdiction was that jurisdiction conferred by statute, and which was in contradiction to criminal jurisdiction---Companies Ordinance, 1984 specifically mentioned "the court" (High Court) where it empowered "the court" (High Court) to exercise jurisdiction---Expression "having jurisdiction" meant that the High Court was the authorized legal authority to hear and determine issues under the Companies Ordinance, 1984, but S.7 of the Companies Ordinance, 1984 did not necessitate the High Court to adjudicate upon all disputes which arose under the Companies Ordinance, 1984---Wherever it was required under the Companies Ordinance, 1984, specific sections provided that the High Court shall adjudicate upon a matter---Argument that High Court while exercising jurisdiction under S.7 of the Companies Ordinance, 1984 must adjudicate upon the present case was flawed as this interpretation went against spirit of the Companies Ordinance, 1984 and against the rationale for S.7 of the Companies Ordinance, 1984---Petitioner should have filed its grievance before the Securities and Exchange Commission of Pakistan which was the competent authority to adjudicate upon irregularities and management of a provident fund under S.227 of the Companies Ordinance, 1984---High Court under S.7 of the Companies Ordinance, 1984 could not direct the Securities and Exchange Commission of Pakistan to carry out an investigation under S. 227 of the Ordinance---Petition under S.227 of the Companies Ordinance, 1984 being not maintainable, was dismissed in circumstances.

Gulzar Ahmed v. The State 2003 CLD 981 and Lahore Race Club through Secretary and others v. Raja Khushbakht ur Rehman 2008 CLD 1117 ref.

Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 and Messrs Sunrise Textiles Ltd. and others v. Mashreq Bank PSC and others PLD 1996 Lah. 1 rel.

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

----S. 7--- Interpretation of S.7, Companies Ordinance, 1984---Jurisdiction of High Court---Adjudication of dispute---Scope---Section 7 of the Companies Ordinance, 1984 no doubt vested original civil jurisdiction with the High Court, however, context or meaning of "original civil jurisdiction" was that jurisdiction as conferred by statute, and in contradiction to criminal jurisdiction---Companies Ordinance, 1984 specifically mentioned "the court" where it empowered "the court" to exercise jurisdiction---Expression "having jurisdiction" meant that the High Court was the authorized legal authority to hear and determine issues under the Companies Ordinance, 1984, but S.7 of the Companies Ordinance, 1984 did not necessitate the High Court to adjudicate upon all disputes which arose under the Companies Ordinance, 1984--- Wherever it was required under the Companies Ordinance, 1984, specific sections provided that the High Court shall adjudicate upon a matter.

Brother Steel Mills Ltd. and others v. Mian Ilyas Miraj and 14 others PLD 1996 SC 543 and Messrs Sunrise Textiles Ltd. and others v. Mashreq Bank PSC and others PLD 1996 Lah. 1 rel.

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

----Ss. 227, 228 & 229--- Securities and Exchange Commission of Pakistan Act (XLII of 1997), Preamble & S. 20---Employee's provident fund and securities---Power to impose fine/penalty and conduct investigation into irregularities and mismanagement--- Jurisdiction---Jurisdiction under S.227 of the Companies Ordinance, 1984 vested with the Securities and Exchange Commission of Pakistan.

Haris Azmat for Petitioner.

Shahzad Ata Elahi for Respondents Nos.1 to 5.

Umair Mansoor, Assistant Director, Law, SECP for Respondent No.6 (SECP).

Date of hearing: 28th November, 2012.

2013 C L D 177

[Lahore]

Before Mehmood Maqbool Bajwa and Shahid Waheed, JJ

Messrs KHAN TRACTORS, ALIPUR ROAD, KHAN GARH DISTRICT MUZAFFARGARH through Proprietor and 2 others---Appellants

Versus

HABIB BANK LIMITED, RAILWAY ROAD BRANCH, MUZAFFARGARH through Manager---Respondent

Execution First Appeal No. 20 of 2012, decided on 17th May, 2012.

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

----S. 22--- Limitation Act (IX of 1908), Ss. 5 & 29--- Appeal---Application under S.5, Limitation Act, 1908 for condonation of delay for appeal filed under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Maintainability---Section 5 of the Limitation Act, 1908 by virtue of ouster clause was not applicable to the proceedings of the appeal under S.22 of the Ordinance; as the same prescribed a period of 30 days for filing of the appeal---No enabling and permissive provisions of the law existed in the said Ordinance in order to apply S.5 of the Limitation Act, 1908---Provisions of S.5 of the Limitation Act, 1908 were not attracted to the appeal preferred under S.22 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Application for condonation of delay was not maintainable---Appeal, being barred by time, was dismissed.

Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; Abdul Rasheed and another v. Bank of Punjab through Branch Manager 2004 CLD 800; Protein and Fats International (Pvt.) Limited through Chief Executive and 2 others v. Capital Assets Leasing Corporation Limited through Manager 2005 CLD 857; Sikandar Hayat v. Agricultural Development Bank of Pakistan through Manager 2005 CLD 870; Industrial Development Bank of Pakistan v. Rehmania Textile Mills (Pvt.) Limited through Chief Executive and 3 others 2006 CLD 81 and Messrs S. Malik Traders and another v. Saudi Pak Leasing Company Ltd. 2009 CLD 171 rel.

Mian Babur Saleem for Appellants.

2013 C L D 201

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

PIONEER CEMENT LIMITEDthrough Company Secretary---Appellant

Versus

FECTO CEMENT LIMITED through Chief Executive Officer and 3 others---Respondents

First Appeal from Order No.213 of 2012, decided on 28th September, 2012.

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

----O. VII, R. 14 & O.XLI, R.1---First appeal---Documents filed along with appeal---Such documents not filed along with plaint before the Trial Court---Appellant filing such documents at appeal stage without seeking permission of court by making a separate application---Validity---Had such application been made by appellant, then court would have issued notice thereof to respondent before allowing or disallowing such request on merits---Such documents were, held, to be inadmissible at stage of appeal against impugned order.

Messrs Ghulam Muhammad Dossul & Co. v. Messrs Vulcan Co. Ltd. and another 1984 SCMR 1024 rel.

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

----S. 5(2)---Use of specific trademark to goods to be exported from Pakistan---Scope---Specific trademark, if applied to goods to be exported from Pakistan, would be deemed to have been actually used in Pakistan, thus, its prior use, reputation and goodwill would be deemed to have existed in Pakistan giving right to its owner (prior user) to restrain its infringement by third party.

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

----S. 39---Distributor in trademark matters, role of---Scope---Distributor for being a representative of owner of trademark could not get its registration in his own name---Principles.

Unless otherwise shown, the concept of a distributor in trademark matters is that a distributor is merely a representative of the owner of the trademark for a specified territory for supply or distribution of goods manufactured/ assembled/packed by the owners under his trademark. For such service, the distributor gets a certain commission. In such cases, distributor has no other relationship with the manufacturer/packer/assembler of goods, who is also the owner of trademark, and merely by distributing goods on behalf of the owner, a distributor does not and cannot become entitled to claim ownership of a mark to register the said trademark in his own name and even if he succeeds in securing trademark registration, that will be liable to be cancelled/rectified after the true owner obtains knowledge of existence of such registration.

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

----Ss. 39 & 40--- Prior user and proprietor of an unregistered trademark, principle of---Applicability and proof---Such principle would be applicable when none of contesting parties had a registered trademark---Prior use and proprietorship of an unregistered trademark could be proved at interim stage by filing independent documentary evidence such as copies of undisputable sale invoices, advertisements, sale and publicity figures etc.

The Welcome Foundation Limited v. Messrs Karachi Chemicals Industries (Private) Limited 2000 YLR 1376; Mehtabur Rehman v. Saeed Ahmed and 2 others 1986 CLC 348 and Syed Muhammad Maqsood v. Naeem Ali Muhammad 1985 CLC 3015 rel.

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

----S. 39--- Trade mark rights, infringement of---Consequences stated.

Trademark rights are lifeline of businesses and un-authorised use of owner's trademark by third parties results in un-quantifiable loss and damage to its goodwill and business, which is irreparable in nature.

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

----S. 46(2)---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Infringement of trademark---Suit for damages, injunction and accounts---Relief---Scope---Under S.46(2) of Trade Marks Ordinance, 2001 all such reliefs by way of damages, injunction, accounts were available to the proprietor of a trademark simultaneously and not as an alternate to each other---Where in addition to interim injunction a plaintiff had claimed damages and compensation in a suit relating to trademark rights, interim relief could not be denied to proprietor of trademark on such ground.

Syed Azeem Abbas Naqvi for Appellant.

Mian Bilal Ahmad for Respondents.

Date of hearing: 24th August, 2012.

2013 C L D 218

[Lahore]

Before Mehmood Maqbool Bajwa and Shahid Waheed, JJ

Mst. NASREEN FATIMA---Appellant

Versus

The BANK OF PUNJAB through Manager---Respondent

Execution First Appeal No. 11 of 2012, heard on 28th June, 2012.

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

----S. 22(6)---Suit for recovery was decreed ex parte against the defendants--- Banking Court, during execution proceedings, passed an order which was impugned by the defendants---Contention of the defendants was that they had already made an application under S.12(2), C.P.C. for setting aside ex parte decree which was still pending and that until said application was decided, execution proceedings should not be undertaken--- Validity--- Impugned order was interlocutory in nature, causing no prejudice at all to the defendant; which even otherwise could not be assailed in view of S.22(6) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Appeal, being incompetent, was dismissed.

Mst. Akhtar Begum v. Muslim Commercial Bank Ltd. 2009 SCMR 264 ref.

Khawaja Adnan Farooq for Appellant.

Muhammad Saleem Iqbal for Respondent.

Date of hearing: 28th June, 2012.

2013 C L D 224

[Lahore]

Before Mehmood Maqbool Bajwa and Shahid Waheed, JJ

AASIM SAJJAD SIDDIQUI and another---Appellants

Versus

MUSLIM COMMERCIAL BANK LTD. through Branch Manager and another---Respondents

Execution First Appeal No. 9 of 2011, heard on 20th June, 2012.

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

----S. 19--- Suit for recovery was decreed--- Objection petition to sale of mortgaged property was dismissed by Appellate Court and sale was confirmed---Contention of the judgment-debtor/appellant was that no auction was held on the spot---Validity---Question as to whether the auction at all was conducted at the spot could only be resolved by the Banking Court after the framing of issues and enabling the parties to lead evidence; and if the auction had not taken place, no valid sale could be confirmed---High Court set aside impugned order and remanded the matter to the Banking Court---Appeal was allowed, in circumstances.

Mumtaz-ud-Din Feroze v. Sh. Iftikhar Adil and others PLD 2009 SC 207 and Messrs British Biscuits Co. (Pvt.) Ltd. v. Messrs Atlas Investment Bank Limited 2005 CLD 674 ref.

Mrs. Salma Javed v. Deutsche Bank A.G. Lahore through Attorney and 4 others 2004 CLD 1560 rel.

Shahid Mumtaz Paracha for Appellants.

Muhammad Saleem Iqbal for Respondent/Bank.

Hafiz Muhammad Abubakar Ansari for Respondent No.2.

Date of hearing: 20th June, 2012.

2013 C L D 228

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

MUHAMMAD AZAM---Appellant

Versus

NATIONAL BANK OF PAKISTAN and others---Respondents

F.A.O. No.447 of 2011, decided on 3rd October, 2012.

(a) Punjab Consumer Protection Act (II of 2005)---

----Ss. 4, 5 & 6--- "Manufacturing" or "design defect"---Scope--- Complainant (appellant) obtained an auto rickshaw after obtaining loan facility from Bank---Complainant filed complaint before Consumer Court on the basis that auto rickshaw was consuming too much petrol and its parts were not working properly---Consumer Court rejected the complaint---Contentions of complainant were that expert, who was deputed for inspection by the Consumer Court, categorically stated that rickshaw was not equipped with an air filter which shortened the life of the engine, and that solenoid valve was faulty which caused difficulty in starting the rickshaw---Validity---Grievance of complainant did not attract Ss. 4, 5 or 6 of Punjab Consumer Protection Act, 2005---Non-availability of air filter could not be termed as a "manufacturing defect", as an air filter was a replaceable part in an engine and had a specific life span and had to be replaced after it exhausted its life expectancy---Similarly a "solenoid" was also a part which might become defective through rough or improper use and had a definite life span and could be replaced to use the equipment or machine (auto rickshaw)---Defects pointed out by complainant could not be said to have caused any effect on the basic design and were not material deviation from the manufacturer's own specification and such fact had been admitted by the expert during his cross-examination---Defects alleged by complainant were of minor nature and could also occur due to negligence/rough use---Said defects could simply be overcome by replacing the relevant parts---Complainant did not get the rickshaw inspected by the Motor Vehicle Examiner or some other expert of similar qualification to support his allegation regarding inherent mechanical defect---Complainant after having apparently made an ill-informed choice of getting an auto rickshaw, wanted to get rid of it and was trying to use the Consumer Protection Act, 2005 as a tool to obtain back the money invested by him and wriggle out of his contractual relationship with the manufacturer and the bank---Complainant could not produce any cogent and reliable evidence from which it could be inferred that auto rickshaw contained any manufacturing defect, which had caused him any damage---Appeal was dismissed in circumstances.

(b) Words and phrases---

----"Manufacturing defect"---Meaning.

Black's Law Dictionary 8th Edn. ref.

(c) Punjab Consumer Protection Act (II of 2005)---

----Preamble & S. 25---Consumer Protection Act, 2005 was not to be invoked where a consumer made a wrong or an ill-advised choice of purchasing a product or service, which he might not like later or which might not meet his aesthetic requirement and which was otherwise non-defective, properly designed and had no inherent mechanical defect.

Ch. Liaquat Ali Sial for Appellant

2013 C L D 267

[Lahore]

Before Shahid Waheed, J

ZIA ULLAH MALIK---Appellant

Versus

NADEEM BAIG---Respondent

F.A.O. No.133 of 2009, heard on 17th October, 2012.

(a) Punjab Consumer Protection Act (II of 2005)---

----S. 2(c)---West Pakistan General Clauses Act (VI of 1956), S. 2(47)---"Consumer", definition of---Scope---"Firm" as a consumer---Scope---Complaint filed by a "firm" against a manufacturer of products---Pre-requisites---"Firm" being a "person" fell within the definition of "consumer" as provided in S.2(c) of Punjab Consumer Protection Act, 2005 and might competently maintain a complaint against a manufacturer in respect of a product before the Consumer Court, if it satisfied that there was a transaction of sale or lease; that the sale or lease was of a product; that buying or leasing of product was for consideration; that obtaining of product was not for resale purposes, and that obtaining of product was not for a commercial purpose, which did not include use by a consumer of product bought and used by him only for purpose of his livelihood as a self-employed person.

Laxmi Engineering Works v. P.S. G. Industrial Institute AIR 1995 SC 1428; Ravi Kant and others v. National Consumer Disputes Redressal Commission and others AIR 1997 Del. 182; Department of Enterprise Trade and Investment v. The Carrill Group Ltd. (2007) NICA 39; MFI Furniture Centre Ltd. v. Hibbert 160 JP 178 and Benincasa v. Dentalkit (1998) All ER (EC) 135 ref.

(b) Punjab Consumer Protection Act (II of 2005)---

----S. 2(c)--- "Consumer", definition of--- Scope--- Term "consumer" was comprehensive and covered not only consumer of products but also consumer of services---Term "consumer" did not include a person or entity which obtained any product either for resale or for any commercial purpose, which did not include use by a consumer of products bought and used by him only for the purpose of his livelihood as a self-employed person.

(c) Punjab Consumer Protection Act (II of 2005)---

----S. 2(c)---West Pakistan General Clauses Act (VI of 1956), S. 2(47)---Consumer, definition of---"Firm" as a consumer---Scope---Complainant (appellant) who was running a registered firm purchased an Electronic Bagging Plant ("Plant") from the defendant---Said Plant was installed by defendant at the premises of the complainant, but it did not work properly---Complainant filed a complaint before the Consumer Court for recovery of entire amount paid to defendant as cost of the machine; for recovery of extra cost paid for purchase of new machine, and for recovery of economic losses arising from deficiency and loss of use of product---Consumer Court returned complaint holding that Corporation (firm) of complainant did not fall within the definition of consumer as given in Punjab Consumer Protection Act, 2005---Validity---Firm being a "person" fell within the definition of "consumer" as provided in S.2(c) of Punjab Consumer Protection Act, 2005 and might competently maintain a complaint against a manufacturer in respect of a product before the Consumer Court--- Appeal was allowed, impugned order was set aside and case was remanded to Consumer Court for decision afresh in accordance with the law.

Laxmi Engineering Works v. P.S. G. Industrial Institute AIR 1995 SC 1428; Ravi Kant and others v. National Consumer Disputes Redressal Commission and others AIR 1997 Del. 182; Department of Enterprise Trade and Investment v. The Carrill Group Ltd. (2007) NICA 39; MFI Furniture Centre Ltd. v. Hibbert 160 JP 178 and Benincasa v. Dentalkit (1998) All ER (EC) 135 ref.

Naveed Zafar Khan for Appellant.

Nemo for Respondent.

Date of hearing: 17th October, 2012.

2013 C L D 323

[Lahore]

Before Mamoon Rashid Sheikh, J

LEO PHARMACEUTICAL PRODUCTS---Appellant

Versus

SHAIGAN PHARMACEUTICAL (PVT.) LTD.---Respondent

R.F.A. No.110 of 2002, decided on 31st January, 2011.

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

----Ss. 43 & 77---Civil Procedure Code (V of 1908), O.VII, R.11, O.XXXIX, RR.1 & 2---Specific Relief Act (I of 1877), S. 54---Infringement of trade mark---Suit for injunction---Rejection of plaint---Principle---Suit of plaintiff was fixed for arguments on application for grant of temporary injunction but Trial Court proceeded to reject the plaint---Validity---Trial Court erred in law in having done so, as the suit of plaintiff was not only confined to infringement of trade mark but also alleged passing off which necessarily entailed detailed inquiry and recording of evidence, therefore, plaint could not have been rejected---High Court set aside order rejecting the plaint and remanded the case to Trial Court for decision afresh in accordance with law---Appeal was allowed in circumstances.

Qazi Muhammad Tariq v. Hasin Jahan and 3 others 1993 SCMR 1949 rel.

Lipha Lyonnaise Industrielle Pharmaceutique through Authorized Signatory v. Registrar of Trade Marks and another 2009 CLD 1289 and Bayer A.G. and another v. Macter International (Pvt.) Ltd. 2003 CLD 794 ref.

(b) Administration of justice---

----Law favours cases to be decided on merits and technicalities should be avoided.

Maulana Atta-ur-Rehman v. Al-Hajj Sardar Umar Farooq and others PLD 2008 SC 663 rel.

Moeen Qamar for Appellant.

Muhammad Shakeel Abid for Respondent.

Date of hearing: 21st January, 2011.

2013 C L D 349

[Lahore]

Before Nasir Saeed Sheikh and Mian Shahid Iqbal, JJ

MUHAMMAD SHARIF and another---Appellants

Versus

Hafiz MUHAMMAD ISMAIL and 10 others---Respondents

E.F.A. No.158 of 2008, heard on 20th April, 2012.

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

----Ss. 15 & 19---Civil Procedure Code (V of 1908), O.XXI, R.89---Sale without intervention of court---Objection petition---Deposit of 5% of auction price---Objectors claimed to have ex parte decree in their favour and filed objection petition against sale of shop in question by bank without intervention of court---Plea raised by objectors was that they had deposited 5% of auction price---Validity---Objection application for setting aside of sale on the ground of deposit of 5% of auction price as envisaged by O.XXI, Rule 89, C.P.C. was only entertainable by Executing Court when sale of immovable property had taken place in execution of decree---Application moved by objectors by invoking provisions of O.XXI, Rule 89, C.P.C. was incompetent---Objectors could not claim setting aside of auction/sale completed in favour of auction purchaser merely on the ground that they had deposited 5% of auction price before Banking Court unless some illegality was established or pointed out in effecting of auction or of the sale in favour of auction purchaser---Order passed by Banking Court was unexceptionable and the same did not call for any interference by High Court---Appeal was dismissed, in circumstances.

Mumtaz ud Din Adil and others v. Sheikh Iftikhar Adil and others PLD 2009 SC 207 and Hakim Enayat Ullah v. Khalil Ullah Khan and another AIR 1938 Allahabad 432 ref.

M. Qamar-uz-Zaman for Appellants.

Sh. Nadeem Ashraf for Respondents Nos. 1 to 9.

Inam Ullah Hashmi for Respondent No.11.

Date of hearing: 20th April, 2010.

2013 C L D 387

[Lahore]

Before Umar Ata Bandial and Muhammad Farrukh Irfan Khan, JJ

JHANG TEXTILE INDUSTRIES (PVT.) LIMITED through Chief Executive and 6 others---Appellants

Versus

PAKISTAN INDUSTRIAL CREDIT AND INVESTMENT CORPORATION LTD. and 3 others---Respondents

F.A.O. No.19 of 2003, heard on 14th December, 2011.

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

----Ss. 15 & 19---Civil Procedure Code (V of 1908), O.XXI, Rr.66 & 85---Execution of decree---Auction proceedings---Reserve price, fixing of---Duty of court---Non-depositing of remaining amount---Judgment debtor assailed auction proceedings on the ground that reserve price which was fixed could only be modified by Banking Court and not by court Auctioneers---Validity---Proclamation stated reserve price much less than that fixed by Banking Court and court Auctioneers were not authorized in law to modify terms of auction, in particular, the reserve price fixed by court---Court Auctioneers were to mandatorily have followed terms of auction settled in proclamation and to have paid due regard to provisions of O.XXI, Rule 66, C.P.C.---No notice was given to decree holder and judgment debtor for drawing up proclamation, therefore, there was no valid sale in favour of respondent, which could be confirmed---Remaining 3/4th amount of auction was to be deposited with court within fifteen days from date of sale but no amount was so deposited---High Court directed to re-auction mortgaged property as auction proceedings and order rejecting objection petition and issuance of sale certificate by Banking Court were illegal and nullity in the eye of law---Appeal was allowed accordingly.

Messrs A.M. Rice Corporation and others v. Bank of Punjab and others 2003 CLD 1783; Messrs S.P.R.L. Rehman Brothers and others v. Judge Banking Court No.II, Lahore 2000 MLD 1957; Messrs Maqi Chemicals Industries (Pvt.) Ltd. and others v. Habib Bank Ltd. and others 2003 CLD 571 and Noor Badshah v. House Building Finance Corporation and others PLD 2006 Lah. 771 ref.

Mrs. Salma Javaid v. Deutsche Bank and others 2004 CLD 1560 and Messrs Majid and Sons and others v. National Bank of Pakistan 2002 CLD 1742 rel.

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

----S. 15---Civil Procedure Code (V of 1908), O.XXI, R.84---Execution of decree---Auction proceedings---Non-deposit of 25% of reserve price---Effect---Failure on the part of successful bidder to pay 25% of reserve price on the spot to court Auctioneer was sufficient to vitiate whole proceedings as required under O.XXI, Rule 84, C.P.C.

Messrs Dawood Flour Mills and others v. National Bank of Pakistan 1999 MLD 3205 rel.

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

----Ss. 15 & 19(7)--- Auction proceedings--- Objection petition---Imposition of penalty---Scope---Requirement for depositing upto 20% of sale proceed can be imposed by Banking Court after making necessary investigation on objection petition and not as a pre-requisite condition to consider the petition.

Amir Zahoor Chohan for Appellants.

Nadeem Ahmad Sheikh for Respondent No.1.

Nadeem Ahmad Ansari for Respondent No.2.

Nadeem Ahmad Ansari for Court Auctioneer.

Date of hearing: 14th December, 2011.

2013 C L D 416

[Lahore]

Before Umar Ata Bandial, C.J. and Muhammad Farrukh Irfan Khan, J

SHAHZADA AKHTAR---Appellant

Versus

BANK ALFLAH LTD. through Manager and 3 others---Respondents

F.A.O. No.29 of 2012, decided on 23rd February, 2012.

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

----Ss. 2(c), 9, 7 & 22---Civil Procedure Code (V of 1908), S.12(2)---Application for setting aside decree on the grounds of fraud and misrepresentation---Non-impleadment of mortgager/owner of mortgaged property in suit for recovery---Effect---Suit for recovery was decreed against the defendants whereafter during execution proceedings, the applicant/appellant (who was not party to the suit) made application under S.12(2), C.P.C. for setting aside the decree on the ground that she being the owner of the mortgaged property was not impleaded in the suit---Contention of the plaintiff Bank was that the applicant/appellant was the wife of the defendant who, through power of attorney in his favour, had mortgaged the property and the applicant/appellant being the wife of the defendant had knowledge of the finance facility availed as well as the court proceedings---Validity---Plaintiff Bank, at the time of the filing of the suit, was fully aware of the fact that the appellant/applicant was the lawful owner of the mortgaged property and mortgage deed in favour of the plaintiff Bank was executed on her behalf by the alleged attorney, who was her husband---Appellant/applicant therefore, squarely fell within the definition of "customer" in terms of S.2(c) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and was a necessary party to the suit---Non-impleadment of the appellant as a party was therefore a gross error on the part of plaintiff Bank---Effect of non-impleadment of the appellant was that there was neither any decree against her nor could her personal property be sold in execution of a decree to which she was not a party---Mortgage deed in favour of plaintiff Bank was executed by a general power of attorney which authorized the defendant/attorney to sell or mortgage the said property but it did not mean that he could do so without the knowledge of the principal (appellant/applicant)---Plaintiff Bank should have at least impleaded the appellant/applicant as a party to the suit so that she could put across her stance as she was the lawful owner of the mortgage property and had valuable rights qua the said property---High Court set aside decree of the Banking Court and remanded the case with the direction that the appellant/applicant be granted an opportunity to move application for leave to defend the suit---Appeal was allowed, in circumstances.

Pakistan Water and Power Development Authority (WAPDA) through Authorized Signatory v. American Express Bank Limited 2005 CLD 1764; Vesu and another v. Thekkedath Veetil Kannama and others AIR 1926 Madras 991; Fida Muhammad v. Pir Muhammad Khan and others PLD 1985 SC 341 and Malik Riaz Ahmad and others v. Mian Inayat Ullah and others 1992 SCMR 1488 rel.

Iftikhar Ullah Malik for Appellant.

Muhammad Farooq for Respondent No.1.

2013 C L D 435

[Lahore]

Before Syed Muhammad Kazim Raza Shamsi, J

NOOR AHMAD---Petitioner

Versus

MUHAMMAD SHAHID PARVAIZ---Respondent

Civil Revision No.115 of 2012, decided on 18th June, 2012.

Stamp Act (II of 1899)---

----S. 35--- Inadmissibility of instruments not duly stamped---Scope---Defect of deficiency of stamps on a promissory note or bill of exchange --- Effect--- No instrument chargeable with duty should be admitted in evidence, unless such instrument was stamped and only those documents could be admitted in evidence which were stamped in the manner provided by law---Exceptions to said rule had been narrated in the proviso to S.35 of the Stamp Act, 1899---Document valued less than 25 paisas should not be chargeable with duty and a bill of exchange or promissory note were required to be duly stamped and would not be admitted in evidence if they were not duly stamped---Legislature had internationally kept out making up a deficiency in the payment of stamp duty in respect of bill of exchange or promissory note; from the Stamp Act, 1899---Defect of deficiency of stamps on a promissory note was incurable and remained to be inadmissible in evidence; which was the ultimate purport of the S.35 of the Stamp Act, 1899.

1996 SCMR 575; Masood Anwar v. Sabir Khan PLD 2006 Pesh. 208 and Munir Ahmad Kahloon v. Rana Muhammad Yousaf PLD 2003 Lah. 173 distinguished.

Chaudhry Khalid Mehmood v. Chaudhry Said Muhammad 2005 CLD 1864 rel.

Javed Ahmad Khan for Petitioner.

Ch. Abid Ali for Respondent.

2013 C L D 451

[Lahore]

Before Abdus Sattar Asghar, J

Messrs CITY SCHOOLS (PVT.) LIMITED through Executive Director Project---Petitioner

Versus

AZMAT NAWAZ---Respondent

Civil Revision No.3435 of 2011, heard on 29th November, 2012.

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

----Ss. 34, 8 & 20---Civil Procedure Code (V of 1908), O.VII, R.11 & S.11---Stay of legal proceedings in presence of an arbitration agreement---Appointment of arbitrator by the court---Suit for recovery---Application of the defendant under S.34 of the Arbitration Act, 1940 for stay of proceedings in presence of an arbitration agreement was allowed by Trial Court---Res judicata, principle of---Applicability---Scope---Defendant, thereafter, filed an application under S.8 read with S.20, Arbitration Act, 1940 for appointment of arbitrator by the court, in response to which the plaintiff-company filed application under O.VII, Rule 11, C.P.C. for rejection of said application filed by defendant---Contention of plaintiff-company was that defendant had earlier filed an application for appointment of arbitrator, upon which no findings were given by Trial Court, therefore, subsequent application was not maintainable under the principle of res judicata in accordance with S.11, C.P.C.--- Validity--- In order to apply the bar of res judicata, it was imperative for the court to first determine as to whether the issue in question was raised, determined and decided in the former proceedings between the parties---Perusal of order of Trial Court made it clear that only proceedings of the suit for recovery lodged by the plaintiff-company were stayed and no order with regard to appointment of arbitrator was made---Since no findings were recorded by the Trial Court on said specific dimension of the matter, therefore, the invocation of the doctrine of res judicata was out of place in the present case---Plaintiff-company's application under O.VII, R.11, C.P.C. was rightly dismissed by courts below---Revision was dismissed, in circumstances.

Atta Muhammad Khan and another v. Lasbella Cement Ltd. 1999 CLC 1795 ref.

Muhammad Anwar v. Messrs Associated Trading Co. Ltd. and others 1989 MLD 4750 distinguished.

Hafiz Noor Muhammad and others v. Ghulam Rasul and others 1999 SCMR 705 and Mst. Iram Cheema v. Auqaf Department 1999 SCMR 2289 rel.

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

----S. 11---Res Judicata, principle of---Application---Scope---In order to apply the bar of res judicata, it was imperative for the court to first determine as to whether the issue in question was raised, determined and decided in the former proceedings between the parties.

Shahzad Atta Elahi for Petitioner.

Qayyum Javed Khan for Respondent.

Date of hearing: 29th November, 2012.

2013 C L D 477

[Lahore]

Before Umar Ata Bandial, C.J., Syed Mansoor Ali Shah and Ayesha A. Malik, JJ

Mst. ROBINA BIBI---Appellant

Versus

STATE LIFE INSURANCE and others---Respondents

R.F.A. No.183 of 2008, decided on 15th February, 2013.

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

----Ss. 115 & 170---Insurance Act (IV of 1938), Ss. 46 & 2(6) [since repealed]---Limitation Act (IX of 1908), Art.86(a) & S. 5---Insurance claim filed under the repealed Insurance Act, 1938---Claim barred by time in view of Art.86(a) of the Limitation Act, 1908---Question was as to whether Insurance Tribunal created under Insurance Ordinance, 2000 could condone the period of limitation and entertain such a claim---Insurance Ordinance, 2000 did not provide any legislative cover for transfer of pending claims under the repealed Insurance Act, 1938 to the Insurance Tribunal or for grant of fresh lease of time to time barred claims under the repealed Act---Insurance Tribunal had no jurisdiction to entertain application (insurance claim) which was covered under the repealed Insurance Act, 1938---Claimant of a time-barred claim arising out of insurance policy prior to commencement of the Ordinance, might apply to the court of competent jurisdiction under the repealed Act, subject to the provisions of Limitation Act, 1908, which would be considered by the respective court on its merits in accordance with law---Appeal was allowed accordingly.

Ghulam Raza Sajid v. State Life Insurance Corporation of Pakistan and another 2010 CLD 792; Mst. Riffat Asghar v. State Life Insurance Corporation of Pakistan and others 2010 CLD 1123; Mst. Fatima Begum v. State Life Insurance Corporation of Pakistan and others 2010 CLD 1171; State Life Insurance Corporation v. Mst. Sadaqat Bano PLD 2008 Lah. 461; State Life Insurance Corporation of Pakistan through Chairman and another v. Mst. Naseem Begum 2009 CLD 1413; Azhar Iqbal v. State Life Insurance Corporation of Pakistan through Chairman and another 2009 CLD 910; Mst. Ijaz Begum v. State Life Insurance Corporation 2009 CLD 1317; Nasreen Begum v. State Life Insurance Corporation of Pakistan through Chairman and another 2009 CLD 1480 and Mst. Rukia Bivi v. State Life Insurance Corporation of Pakistan through Chairman and another 2009 CLD 1213 held per incuriam.

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

----Ss. 115, 170 & 121---Insurance Act (IV of 1938), Ss. 46 & 2(6) [since repealed]---Filing of insurance claim (application) before the Insurance Tribunal created under the Insurance Ordinance, 2000---Scope---Only the claims arising under insurance policies issued after the commencement of the Insurance Ordinance, 2000 i.e., 19-8-2000 can be brought before the Insurance Tribunal, while claims arising out of insurance policies issued prior to the commencement of the Ordinance continue to be governed under the repealed Insurance Act, 1938 and will continue to be agitated before the court of competent jurisdiction in terms of S.2(6) of the repealed Act---Insurance Tribunal cannot assume jurisdiction over claims that arise out of insurance policies issued prior to the date of commencement of the Ordinance i.e., 19-8-2000.

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

----S. 123---Limitation Act (IX of 1908), Arts. 86(a) & 181 & S. 5---Filing of insurance claim (application) before the Insurance Tribunal---Limitation---Scope---Condonation of delay in filing insurance claim (application)---Scope---Period of limitation had not been prescribed under the Insurance Ordinance, 2000 for filing of application (insurance claim) before the Insurance Tribunal---In the absence of a statutory provision under the Ordinance, Art.86(a) of the First Schedule to Limitation Act, 1908, would apply to insurance claims and in the presence of a specific provision, the general provision under Art.181 of the Limitation Act, 1908 would not apply---Section 5 of Limitation Act, 1908 had not been extended to the Insurance Tribunal under the Ordinance, therefore, facility of condonation or extension of time was not available to the application (insurance claim) filed before the Insurance Tribunal.

Liaqat Ali Butt for Appellant (in R.F.As. Nos. 188, 189, 190 of 2008 and 385 of 2007).

Abrar Ahmed for Appellant/Petitioner (in R.F.As. Nos.911, 1024 of 2011 and Writ Petition No.948 of 2008).

Ali Akbar Qureshi and Abrar Ahmed for Respondents (in R.F.As. Nos. 188, 189, 190 of 2008 and R.F.A. No.385 of 2007).

Liaqat Ali Butt for Respondents (in R.F.As. Nos.911, 1024 of 2011 and Write Petition No.948 of 2008).

Date of hearing: 12th October, 2012.

2013 C L D 501

[Lahore]

Before Ijaz Ahmad and Amin-ud-Din Khan, JJ

Messrs SAHIB GAS WAYS through Partner and 4 others---Appellants

Versus

The BANK OF PUNJAB through Manager---Respondent

F.A.O. No.131 of 2010, heard on 22nd October, 2012.

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

----Ss. 7 & 22---Civil Procedure Code (V of 1908) O. IX, R.13---Suit for recovery was decreed against defendant---Contention of defendant was that his application for leave to defend was dismissed in default of his appearance and his application under Order IX, R. 13, C.P.C. for setting aside ex parte decree should be allowed---Validity---Banking Court dismissed application for leave to defend on merits and contention that it was dismissed for non-appearance was not factually correct---Since decree was passed after dismissal of application for leave to defend on merits, the decree was assailable through appeal under S.22 of the Financial Institutions (Recovery of Finances) Ordinance 2001 and filing application under Order IX, Rule 13, C.P.C. was misconcieved and not competent---Appeal was dismissed.

Messrs Agrocare and 3 others v. Zarai Taraqiati Bank Ltd. 2011 CLD 990 and Mst. Tahira Yasmeen and another v. Muslim Commercial Bank through Branch Manager and 6 others 2005 CLD 927 rel.

Muhammad Suleman Bhatti for Appellants.

Muhammad Saleem Iqbal for Respondent.

Date of hearing: 22nd October, 2012.

2013 C L D 522

[Lahore]

Before Shahid Waheed, J

FARMERS' EQUITY PRIVATE LIMITED (FEP) through Chief Executive and 3 others---Appellants

Versus

MEHBOOB ALAM---Respondent

F.A.O. No.255 of 2004, decided on 26th November, 2012.

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

----Ss. 34, 14 & 17---Civil Procedure Code (V of 1908), O. XXIII, R. 3----Suit for recovery---Application of defendant for stay of proceedings in suit in presence of an arbitration agreement between the parties was dismissed---Said arbitration agreement was entered into by the parties after the date of institution of the suit---Effect---Suit after institution was subsequently referred by parties to arbitration without leave of the court through an agreement which was dated after institution of suit---Section 34 of the Arbitration Act, 1940 was restricted to cases in which the suit had been instituted after agreement to refer to arbitration---Procedure for making reference to arbitration in a pending suit was provided in Ss.21 to 25 of the Arbitration Act, 1940---Reference to arbitration and award procured in a pending suit without intervention of the court were a nullity and such award could not be made rule of the court in accordance with Ss.14 and 17 of the Arbitration Act, 1940----No bar existed on parties to get their case decided by mutual agreement at any time prior to final adjudication under provisions of O.XXIII, Rule 3, C.P.C. under which existence of a lawful agreement was one of the essential pre-requisites for the applicability of said provision---Arbitration agreement without orders of a court in pending suit being departure from mandatory provisions of Ss.21 to 25 of the Arbitration Act, 1940 could not be categorized as a lawful agreement and was not enforceable---Application under S.34 of the Arbitration Act, 1940 was therefore rightly dismissed by Trial Court---Appeal was dismissed.

Peruri Suryanarayan & Co. v. Gullapudi China Narsingham and others (4 IC 133) and Vyankatesh Mahadev v. Ramachandara Krishna (27 IC 46) rel.

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

----Ss. 21, 22, 23, 24 & 25---Arbitration agreement entered into in a pending suit without leave of the court---Validity---Arbitration agreement without orders of a court in a pending suit being departure from mandatory provisions of Ss.21 to 25 of the Arbitration Act, 1940 could not be categorized to be lawful agreement and was not enforceable.

Sahibzada Mahboob Ali for Appellants.

Nemo for Respondent.

Date of hearing: 26th November, 2012.

2013 C L D 531

[Lahore]

Before Shahid Waheed and Muhammad Yawar Ali, JJ

GHULAM ASGHAR KHAN and 3 others---Appellants

Versus

BANK OF PUNJAB---Respondent

F.A.O. No.4 of 2011, decided on 10th December, 2012.

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

----Ss. 9(5), 12 & 22---Suit for recovery of finance---Suit filed by the plaintiff bank, having been decreed ex parte by the Banking Court against the defendants they filed application under S.12 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which was dismissed---Validity---Application for setting aside ex parte judgment and decree which was to be filed within 10 days of the impugned order, was filed after more than 2 months---Defendants had failed to explain the delay of each and every day in filing application for setting aside ex parte judgment and decree---Record had revealed that service was duly effected upon the defendants---Defendants having failed to disclose any sufficient cause for recalling of ex parte judgment and decree, impugned judgment of the Trial Court did not warrant any interference.

Abdul Rahim Patel v. Habib Bank Limited through Branch Manager and another 2008 CLD 701 and M. Afzal v. Allied Bank of Pakistan Ltd. and another 2003 CLD 765 rel.

Sardar Riaz Karim for Appellants.

Muhammad Saleem Iqbal for Respondent.

2013 C L D 546

[Lahore]

Before Muhammad Khalid Mehmood Khan and Muhammad Farrukh Irfan Khan, JJ

Rao MUHAMMAD SADAQAT ALI and another---Appellants

Versus

Messrs RANA JAMAL AKBAR ICE FACTORY RAJAN PUR and another---Respondents

F.A.O. No.156 of 2010, decided on 7th November, 2012.

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

----Ss. 15, 19 & 22---Auction of mortgaged property by Bank under S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Objection petition by judgment-debtor alleging such auction to be fraudulent and without notice to him---Banking Court accepted such objection petition and set aside the auction---Pleas of auction purchaser were that objection petition was time-barred; that Banking Court had set aside auction after four years without considering huge amount incurred by him on renovation and construction of suit property---Validity---Decision of Full Bench of Lahore High Court in Muhammad Umar Rathore v. Federation of Pakistan 2009 CLD 257 which had declared S.15 of Financial Institutions (Recovery of Finances) Ordinance, 2001 as ultra vires to Constitution on 23-12-2008, would not apply to suit property auctioned on 8-11-2006---Bank had not proved publicizing of proposed auction in two daily newspapers as required by S.15(4) of the Ordinance---Bank had not submitted accounts of auction to Banking Court within thirty days---Auction report showed that Bank had conducted auction at its office and sent its report to its Head Office, but approval was not available on record---Bank had sold suit property at less than the reserve price---Bank had not informed Banking Court or local authorities while handing over possession of suit property to auction purchaser, without preparing its inventory---Bank along with auction report had not placed on record list of bidders that participated in the auction and other proceedings conducted at the spot---Collusion between Bank and auction purchaser was apparent on face of record---Auction purchaser had not provided any details for alleged amount incurred by him---High Court modified impugned order by directing judgment debtor to pay 20% instead of 5% to auction purchaser on price of auction and also directed Banking Court to appoint local commission for preparing quantum of machinery added and ascertaining its price and expenses incurred by auction purchaser.

Muhammad Umar Rathore v. Federation of Pakistan 2009 CLD 257 mentioned.

Sardar Riaz Karim and Shahid Mumtaz Piracha for Appellants.

Raja Naveed Azam for Respondents.

Date of hearing: 7th November, 2012.

2013 C L D 583

[Lahore]

Before Amin-ud-Din Khan and Ijaz Ahmad, JJ

FALAK SHER SHERWANI---Appellant

Versus

NATIONAL BANK OF PAKISTAN through Branch Manager---Respondent

F.A.O. No.177 of 2011, decided on 30th October, 2012.

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

----Ss. 12, 19 & 22---Appeal---Limitation---Summer vacations of Court of appeal---Effect---Ex parte decree was passed against defendant, who filed application for setting aside of the decree but Banking Court instead of deciding the application, directed auction of mortgaged property---Validity---Appeal should have been filed within 30 days and crucial day fell in summer vacation, therefore, appeal preferred on the first day court opened after summer vacation, was within the period of limitation---Setting schedule for auctioning mortgaged property and fixing date for submission of auction report without deciding application of defendant for setting aside ex parte decree was declared illegal---Order was passed by Banking Court in wrong exercise of jurisdiction vested in the court---Appeal was allowed accordingly.

Abdul Majeed Malik for Appellant.

Sardar Riaz Karim for Respondent.

Date of hearing: 30th October, 2011.

2013 C L D 598

[Lahore]

Before Amin-ud-Din Khan and Ijaz Ahmad, JJ

Mst MAH RUKH BATOOL---Appellant

Versus

JUDGE BANKING COURT NO.III and 5 others---Respondents

E.F.A. No.2 of 2011, decided on 22nd October, 2012.

Civil Procedure Code (V of 1908)---

----O. IX, R. 13 & S. 47---Sale of mortgaged property---Objection---Suit for recovery filed by respondent-Bank was decreed and during execution proceedings, the appellant filed an objection application to auction of mortgaged property on the ground that the appellant had purchased said property and had an agreement to sell in the appellant's favour---Application was dismissed for non-prosecution and subsequent second application was also dismissed as being barred by law---Validity----Contention of the appellant that the case was only fixed on the day of hearing for submission of written reply which had been submitted, was not acceptable and could only be a ground for restoration of original objection application but not for making another application---Even otherwise, an agreement to sell did not defeat the right of a decree holder and did not equip a person with any legal right---Decree holder had not been impleaded by the appellant in a suit for specific performance of agreement to sell instituted by the appellant---Second application was not maintainable under principle laid down in O.IX, R.9 of C.P.C.---Appeal was dismissed.

Malik Muhammad Riaz Khokhar for Appellant.

Muhammad Saleem Iqbal for Respondent No.2.

Muhammad Wasem Thaheem for Respondents Nos.3 to 5.

Mughees Aslam Malik for Respondent No.6/auction purchaser.

2013 C L D 604

[Lahore]

Before Muhammad Farrukh Irfan Khan, J

Haji ASHRAF ALI and others---Petitioners

Versus

Haji MUSHTAQ ALI and others---Respondents

Civil Revision No.594 of 2010, decided on 7th November, 2012.

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

----Ss. 14 & 17---Civil Procedure Code (V of 1908), O.VII, R.11---Application for making award rule of court---Rejection of such application under O.VII, R.11, C.P.C.---Scope---Provisions of C.P.C. would stand excluded to the extent where a procedure had been provided in Arbitration Act, 1940---Provision of O.VII, R11, C.P.C. would apply to plaint in a suit---Plaint though not defined in C.P.C. would be regarded as a written memorial tendered to a court in which plaintiff set forth cause of action and sought order/judgment/decree as a consequential relief---Application under Ss. 14 & 17 of Arbitration Act, 1940 would not be deemed to be a plaint or suit---Application under O.VII, R.11, C.P.C., thus, would not be maintainable in proceedings under Ss. 14 & 17 of Arbitration Act, 1940.

Government of Sindh and another v. Ch. Fazal Muhammad and another PLD 1991 SC 197 and Messrs Combined Enterprise v. Wapda PLD 1988 SC 39 rel.

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

----Ss. 14, 17, 30, 32 & 33---Civil Procedure Code (V of 1908), O.VII, R.11---Stamp Act (II of 1899), S.33 & Art. 12---Registration Act (XVI of 1908), S.17---Application for making award rule of court---Applicability of S.33 & Art. 12 of Stamp Act, 1940 and Registration Act, 1908---Scope---Application under O.VII, R.11, C.P.C. for rejection of application under Ss.14 & 17 of Arbitration Act, 1940 on ground that award was not drawn on stamp paper and that award for being unregistered could not be made rule of court---Maintainability---Provisions of C.P.C. would stand excluded to extent where a procedure had been provided in Arbitration Act, 1940---Provision of O.VII, R.11, C.P.C. would apply to plaint in a suit---Application under Ss.14 & 17 of Arbitration Act, 1940 would not be deemed to be a "plaint or suit"---Court could set aside award on basis of specific provisions provided in Arbitration Act, 1940---Deficiency of stamp duty, if any could be ordered to be made up by Trial Court at any state---Mere fact of non-drawing of award on stamp paper would not justify rejection of application for making award rule of court---Registration of award would be necessary only after same was made rule of court, but not before such stage---No party could be prejudiced by mere existence of an award---Award would not become operative and enforceable unless same had been filed in court and court adjudicated about its validity---Application under O.VII, R.11, C.P.C. was dismissed in circumstances.

Government of Sindh and another v. Ch. Fazal Muhammad and another PLD 1991 SC 197; Messrs Combined Enterprise v. Wapda PLD 1988 SC 39; Mst. Farida Malik and others v. Dr. Khalida Malik an others 1998 SCMR 816; Haji Muhammad v. Syed Manzoor Hussain Shah PLD 2003 Lah. 208; Lachman Dass v. Rama Lal and others 1990 PSC and Sher Muhammad v. Sh. Muhammad Aslam and others 1989 MLD 4508 rel.

(c) Stamp Act (II of 1899)---

----S. 33 & Art. 12---Arbitration award---Deficiency of stamp duty, if any, could be ordered to be made up by Trial Court at any stage---Mere fact of non-drawing of award on stamp paper would not justify rejection of application for making award rule of court.

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

----S. 17---Arbitration award---Registration of award would be necessary only after same was made rule of the court, but not before that stage.

Sardar Mushtaq Ahmad Khan for Petitioners.

Syed Tajammul Hussain Bukhari for Respondents Nos.2 and 4.

2013 C L D 630

[Lahore]

Before Kh. Imtiaz Ahmad and Ali Baqar Najafi, JJ

Syed TAHIR HUSSAIN SHAH---Appellant

Versus

Syed SAEED ANWAR and others---Respondents

Regular First Appeal No.81 of 2002, decided on 17th December, 2012.

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

----Ss. 182, 186 & 213---Specific Relief Act (I of 1877), S. 42---Civil Procedure Code (V of 1908), O.VII, R. 2---Partnership---Rendition of accounts by partner---Requirements---Suit for declaration and rendition of accounts and mense profits in respect of joint-property wherein a commercial cinema was being run, was decreed---Validity---Status of the partners/parties as co-owners was admitted, therefore, the plaintiff's entitlement to half of the shares was not challenged by defendant---Defendant had claimed that the cinema business was running in loss, however, some shares from profit had been paid to the defendants, which meant that claim of plaintiff in profit was correct---Settlement of accounts could be made with mutual consent of partners/sharers at any time or at time of conclusion of partnership---Status of a co-sharer who was running affairs of a business was of either of an agent or principle---In a suit for rendition of accounts, plaintiff was required to establish, firstly, the partnership, secondly, the share of each member in the partnership, thirdly, the profit or loss, fourthly, the type of business, fifthly the duration of the partnership and sixthly the accounts---Trial Court had acted according to said criteria---Status of Agent of a co-sharer running a joint business was that of an agent having authority expressly or impliedly who was bound to render proper accounts to his principal on demand, under Ss.182, 186 and 213 of the Contract Act, 1872---No interference was required in decree of the Trial Court---Appeal was dismissed, in circumstances.

Pakistan International Airlines Corporation v. Karachi Municipal Corporation through Chairman/Administrator, Karachi and another PLD 1994 Kar. 343 ref.

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

----Ss. 182, 186 & 213---Partnership---Co-sharers---Rendition of accounts, suit for---In a suit for rendition of accounts, plaintiff was required to establish, firstly, the partnership, secondly, the share of each member in the partnership, thirdly, the profit or loss, fourthly, the type of business, fifthly the duration of the partnership and sixthly the accounts.

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

----Ss. 182, 186 & 213---Partnership---Co-sharers---Status of a co-sharer running a joint business was that of an agent having authority expressly or impliedly who was bound to render proper accounts to his principal on demand, under Ss. 182, 186 & 213 of the Contract Act, 1872.

Altaf Elahi Sheikh for Appellant.

Sheikh Zamir Hussain for Respondents.

Date of hearing: 17th December, 2012.

2013 C L D 643

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

Messrs SILKBANK LIMITED---Plaintiff

Versus

Messrs K.K.P. (PVT.) LTD. and 9 others---Defendants

C.O.S. No.33 of 2010, deiced on 22nd November, 2012.

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

----S. 10---Suit for recovery of amount paid to beneficiary after encashment of Bank Guarantee/Performance Bond---Application for leave to defend---Contention of the defendants was that the plaintiff Bank had violated the terms and conditions of the Bank Guarantee by enchasing the same in favour of the beneficiary---Validity---Defendants had not placed on record the document of the guarantee establishing as to how the plaintiff had violated its terms and it was not the claim of the defendants that the guarantee had expired---While the plaintiff Bank had also not placed on record the document of the guarantee, the defendants had themselves admitted to the same---Defendants had also filed a separate suit in the civil court wherein they alleged that the beneficiary had violated the terms of the guarantee and had not alleged in the plaint that the plaintiff Bank had dishonored the terms of the guarantee---Contract of guarantee was an independent contract of the principal contract---Application for leave to defend the suit was dismissed and suit of the plaintiff Bank was decreed as prayed for.

Pak Consulting engineering v. Pakistan Steel Mills 2002 SCMR 1781 and Messrs Ayaz Builders v. Board of Trustees Karachi Port Trust 2008 CLC 726 ref.

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

----S. 126---Contract of guarantee or surety---Bank Guarantee---Contract of guarantee was an independent contract of the principal contract.

Abdul Hameed Chohan and Imraa Muhammad Sarwar for Plaintiff.

Rana Muhammad Khalil-ur-Rehman for Defendants.

2013CLD678

[Lahore]

Before Ijaz Ahmad and Syed Iftikhar Hussain Shah, JJ

MUHAMMAD RAFIQUE and another---Appellants

Versus

UNITED BANK LIMITED through Manager----Respondent

Regular First Appeal No. 182 of 2009, heard on 6th February, 2013.

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

----Ss. 10 & 19--- Suit for recovery--- Application of defendant for leave to defend was dismissed and suit was decreed---Defendant subsequently made application before Executing Court to pay the decretal amount in instalments which. was allowed by the Executing Court---Validity---Defendant had voluntarily accepted the validity of the impugned decree of Banking Court by promising to pay the decretal amount in instalments and the Executing Court had accepted such request of the defendant---Defendant was therefore estopped to question the legality and validity of the impugned decree of Banking Court--Appeal was dismissed.

M. Manzoor-ul-Haq for Appellants.

Muhammad Saleem Iqbal for Respondent.

Date of hearing: 6th February, 2013.

2013 C L D 724

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

The BANK OF PUNJAB through Attorney---Applicant

Versus

Messrs ZEPHYR TEXTILE LIMITED through Chief Executive Officer and 3 others---Respondents

Civil Miscellaneous No.595-B of 2012 in C.O.S. No.8 of 2011, decided on 11th October, 2012.

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

----Preamble---Civil Procedure Code (V of 1908), Preamble---Proceedings before Banking Court---Absence of procedure in Financial Institutions (Recovery of Finances) Ordinance, 2001---Effect---Procedure provided in C.P.C. would become applicable in such case.

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

----Ss. 9 & 10---Civil Procedure Code (V of 1908), O.XXIII, R.1---Suit for recovery of finance---Grant of leave to defend---Procedure---Framing of issues and fixation of case for evidence after granting of defendant's leave application unconditionally---Plaintiff's application for withdrawal of suit with permission to file fresh one due to existence of some formal defect therein---Validity---Procedure provided in C.P.C. for decision of suit would be followed after granting of leave application due to absence of procedure in Financial Institutions (Recovery of Finances) Ordinance, 2001---Plaintiff had not pointed out any formal defect, which might result into dismissal of suit---Court had to pass decree according to pleadings and evidence to be adduced by both parties---Plaintiff had every opportunity to adduce evidence or amend plaint in accordance with law---High Court dismissed such application in circumstances.

Sardar Muhammad Kazim Ziauddin Durrani and others v. Sardar Muhammad Asim Fakhuruddin Durrani and others 2001 SCMR 148; Municipal Committee Chakwal v. Ch. Fateh Khan and others PLD 1959 (W.P.) Lah. 535; Pehlwan and others v. Haji Muhammad Muran and others 2005 SCMR 1405; Muhammad Saleem v. Muhammad Tariq 2009 CLC 1295; Mana and 4 others v. Hussain Bakhsh and 5 others 1993 CLC 1400; Ghulam Farid and 2 others v. Muhammad Ashraf and 8 others 2000 YLR 2166; Ismail v. (1) Fida Ali and (2) Sayyed Iqbal Shabbir PLD 1965 SC 634; Karamat Ali Khan and another v. Sardar Ali and 29 others PLD 2001 SC(AJ&K) 30; Ahban Uthool Village v. Ahban Zani Village PLD 2004 Pesh. 198 and Muhammad Din v. Atta Muhammad and others PLD 1957 Lah. 971 ref.

Sardar Muhammad Kazim Ziaduddin Durrani and others v. Sardar Muhammad Asim Fakhuruddin Durrani and others 2001 SCMR 148 rel.

Abdul Hameed Chohan and Imran Muhammad Sarwar for Plaintiff.

Munawar-us-Salam for Defendants.

2013 C L D 836

[Lahore]

Before Syed Hamid Ali Shah and Kh. Farooq Saeed, JJ

ASKARI COMMERCIAL BANK LIMITED through Authorized Signatory---Appellant

Versus

Messrs BAKE LINE PRODUCTS through Partners and 5 others---Respondents

F.A.O. No.180 of 2006, heard on 23rd June, 2008.

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

----S. 27, proviso--- Interpretation--- Correction of typographical or clerical errors---Scope---Phrase "clerical or typographical error", connotation---Suit for recovery was decreed by Banking Court---Application of the plaintiff-Bank under S.27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 for modification of the decree, in relation to the calculation of markup and amount recoverable, was dismissed---Contention of the plaintiff Bank was that the term "clerical mistake" had a wide connotation and covered the situation of the present case---Validity---Perusal of the judgment of Banking Court revealed that the Banking Court gave its judgment after due consideration of arguments and there was no cavil about the same and even while deciding the application of the plaintiff-Bank under S.27 of the Ordinance, the court reconfirmed its earlier decision---Findings of the Banking Court, could be challenged through appeal but the same did not give any impression of any omission or clerical error---Clerical error meant omission of a kind which if corrected did not change the effect of the main order and if a correction of any error ended, increased or reduced liability, the same would amount to review of judgment, which was not covered under S.27 of the Ordinance---Enhancement of liability could not be done through "correction of typographical error" or omission or typographical mistake---Review, revisiting or correction of an error, which changes the fate of the judgment and decree was beyond the scope of S.27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, which had a very restricted application---Appeal was dismissed.

Aisha and others v. Molvi Abdul Sattar 2005 CLC 296; Crown v. Habibullah and others PLD 1952 Lah. 587; Bank Al-Falah Ltd. v. Messrs Bilal Spinning Mills Ltd. and another 2005 CLD 206 and Shaikh Kamran Maqbool v. Bolan Bank Limited through Manager and another 2006 CLD 163 ref.

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

----S. 27, proviso--- Finality of order--- Correction of typographical or clerical errors---Scope---Review or revisiting or correction of an error, which changes the fate of the judgment and decree was beyond the scope of S.27 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 which had a very restricted application.

Umair Majeed Malik for Appellant.

Qausain Faisal Mufti for Respondents.

Date of hearing: 23rd June, 2008.

2013 C L D 871

[Lahore]

Before Abdus Sattar Asghar, J

FAISALABAD DEVELOPMENT AUTHORITY and another----Appellants

Versus

Messrs ORIENT ASSOCIATES, ARCHITECTS AND CONTRACTORS (PVT.) LIMITED, FAISALABAD----Respondent

First Appeal against Order No.221 of 1998, decided on 19th December, 2012.

Arbitration Act (X of 1940)---

----Ss. 17 & 30---Judgment in terms of Award---Power of court to remit award/set aside the Award---Scope---Award to be made rule of the Court---Essentials---Appellants impugned order of Trial Court whereby the arbitral award was made rule of the Court and objections filed thereagainst under S.30 of the Arbitration Act, 1940 by the appellants were dismissed---Contention of the appellants was that the objections raised by them under S.30 of the Arbitration Act, 1940 could not have been dismissed without the framing of issues and recourse to evidence---Validity---Award was to be made rule of the Court only if the court saw no reason to set it aside or to remit it; and therefore, it was incumbent upon the court to satisfy itself that the Award did not suffer from any illegality or defect necessitating either the setting aside of it or its remission to the Arbitrator---Even in absence of any objection, the court had inherent powers to set aside the Award which exceeded the Arbitrators' jurisdiction or if a material irregularity had appeared on the face of the Award---Appellants, in the present case, had raised serious objections on the Award as well as the conduct of the Arbitrator along with jurisdictional defects and material irregularities---Respondent-company had filed written reply to such objections, and in view of said circumstances, it was not the case where such objections could have been repelled without the framing of issues and without having recourse to evidence---Impugned order of Trial Court making the Award rule of the Court was violative of law and principles of natural justice and was set aside---Appeal was allowed, in circumstances.

Ashfaq Ali Qureshi v. Municipal Corporation Multan and another 1985 SCMR 597 rel.

Ali Akbar Qureshi for Appellants.

Syed Ejaz Ali Akbar Sabzwari for Respondent.

Date of hearing: 19th December, 2012.

2013 C L D 885

[Lahore]

Before Shahid Waheed, J

Messrs SPRINT ENERGY (PVT.) LIMITED through Advisor----Appellant

Versus

AHSAAN ULLAH and 2 others----Respondents

First Appeal from Order No.262 of 2012, heard on 17th October, 2012.

Arbitration Act (X of 1940)---

----S. 34---Civil Procedure Code (V of 1908), O. VII, R. 11---Stay of proceedings in presence of an arbitration agreement between the parties---"Step in proceedings"---Scope---Suit for recovery---Defendant had filed application for rejection of plaint under Order VII, R.11, C.P.C. and thereafter made application under S. 34 of the Arbitration Act, 1940 for stay of proceedings---Said application under S.34 of the Arbitration Act, 1940 was rejected on the ground that after making application under O.VII, Rule 11, C.P.C. the defendant could not request stay on legal proceedings under S. 34 of Arbitration Act, 1940---Validity---Criterion to decide whether an act constituted a step in proceedings was whether an application was made to the court on summons or orally and whether the act was such as would indicate that party was acquiescing to the method adopted by the other side of having the dispute decided by court---Intention of statute was that defendant who wanted to take advantage of an arbitration clause must without any ado, and before submitting to the jurisdiction of the court; inform the court in unequivocal terms that he was going to insist upon implementation of the arbitration clause---Defendant would disentitle himself from protection of S.34 of Arbitration Act, 1940 if he did not take such stand before filing a written statement and such situation was not different if he takes steps in proceedings before raising an objection---Defendant had taken steps in the proceedings before moving application under S.34 of the Arbitration Act, 1940 and therefore Trial Court had rightly rejected his application for stay in proceedings---Appeal was dismissed in circumstances.

Director Housing, A.G's Branch, Rawalpindi v. Messrs Makhdum Consultants Engineers and Architects 1997 SCMR 988; ACB (Pvt.) Ltd. v. Ups Worldwide Forwarding Inc. 2007 MLD 1520; Pakistan Telecommunication Corporation Ltd. v. Dr. Waqar Hussain Chaudhary PLD 2007 Lah. 678; Aftab Khalil and 5 others v. Shaukat Hussain 2008 CLC 1592 and Mrs. Rubby Hameedullah and 3 others v. Dr. Arif and 4 others 2010 YLR 3331 ref.

Industrija Masina-i-Traktora v. Bank of Omen Ltd. 1992 MLD 2245; M/s. Cepcon (Pvt.) Ltd. v. Messrs Rizwan Builders Ltd. 1990 MLD 2027; Hyderabad Municipal Corporation v. Messrs Columbia Enterprises 1990 CLC 47; Middle East Trading Co. v. The New National Mills Ltd. AIR 1960 Bom. 292; Vaisyaraju Subramanyam Raju v. Vaisyaraju Chandramauly Raju and others AIR 1987 Ori. 23; The Province of the Punjab v. Messrs Irfan & Co. PLD 1956 Lah. 442; New Bengal Shipping Company v. Eric Lancaster Stump PLD 1952 Dacca 22; Subal Chandra Bhur v. Md. Ibrahim and another AIR 1943 Cal. 484; Uzin Export Import Enterprises v. M. Iftikhar & Company Ltd. PLD 1986 Kar. 1; G.M. Pfaff A.G. v. Sartaj Engineering Co. Ltd., Lahore and 3 others PLD 1970 Lah. 184; N.-W.F.P. through Collector, Mardan and 2 others v Faiz Muhammad PLD 1984 Pesh. 180 and Pakistan International Airlines Corporation v. Messrs Pak Saaf Dry Cleaners PLD 1981 SC 553 rel.

Shamshad Ullah Cheema for Appellant.

Tariq Mehmood Sipra for Respondents.

Date of hearing: 17th October, 2012.

2013 C L D 1075

[Lahore]

Before Muhammad Khalid Mehmood Khan and Shahid Waheed, JJ

Messrs CAPITAL INSURANCE CO. LTD.---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and 4 others---Respondents

Writ Petition No.24457 of 2010, heard on 20th September, 2012.

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

----Preamble, Ss. 2 (xxvii), (xlvi) & 127(2)---Constitution of Pakistan, Art. 199---Constitutional petition---complaint to Federal Insurance Ombudsman against Insurance Company for its refusal to pay claim under its 'performance guarantee'---Order of Ombudsman allowing such complaint---Plea of Insurance Company was that such guarantee for having expired was not payable; that default was on part of issuer of such guarantee; that contract between parties was of a guarantee and not an insurance contract, thus Ombudsman had no jurisdiction to entertain such complaint---Validity---"Insurance policy" and "contract of guarantee" were two different subjects---Insurance Company could enter into contract of insurance in consideration of premium-purchaser in contract of guarantee or performance bond had to pay commission, which did not cover entire amount of contract---Purchaser in case of encashment of guarantee would be bound to pay amount of guarantee to guarantor---Insurance Company in case of death of insured would be bound to pay insured amount irrespective of payment of only or two instalments---Insurance Company despite payment of entire premium by insured and maturity of insurance policy would be bound to pay insured amount to insured person---Contract of guarantee was not a contract of insurance---Contract of performance bond/guarantee, which insurance company had entered into with respondent for a specific act---Performance bond/guarantee was valid upto 30-11-2005 and claim lodgment period thereunder was within 15 days after its expiry---Respondent allegedly lodged claim on 14-12-2005, which was alleged to have been received in office of Insurance Company on 14-12-2005---Respondent had lodge complaint before Ombudsman on 27-5-2006---Insurance Company alleged not to have received claim till July 2006---Dispute between parties before Ombudsman was as to whether claim lodged by beneficiary was within time or not---Such dispute between parties was factual, which could be resolved after recording of evidence---Ombudsman was not a court, which could record evidence---Jurisdiction of Ombudsman was restricted to insurance business only---Ombudsman had wrongly assumed jurisdiction on complaint of respondent---High Court declared impugned order of Ombudsman as without lawful authority and of no legal effect, in circumstances.

Punjab Industrial Development Board v. United Sugar Mills Limited 2007 SCMR 1394; Mst. Inayat Bibi v. Nazir Ahmed and others 1991 CLC 1660; Collector of Customs, Sales Tax and Central Excise Karachi-III v. Mudasser Travers Karachi and another 2006 PTD 146; Muhammad Khalid v. Divisional Superintendent M.S.T.K. Division 2009 PLC 71; Messrs Poineer Cables Limited through General manager v. Chairman Labour Appellate Tribunal Balochistan Quetta and 2 others 2002 PLC 82 and Colgate-Palmolive (Pakistan) Ltd. v. Registrar of Trade Marks and another 2008 CLD 974 ref.

(b) Words and phrases---

----"Mal-administration"--- Defined and explained.

Oxford English Dictionary and Black Law Dictionary ref.

(c) Words and phrases---

----"Omission"---Defined and explained.

Imran Muhammad Sarwar for Petitioner.

Umair Mansoor for Respondents Nos.1 and 3.

Waleed Khalid for Respondent No.4.

Ali Ameel Pervaiz Malik for Respondent No.5.

Date of hearing: 20th September, 2012.

2013 C L D 1105

[Lahore]

Before Nasir Saeed Sheikh, J

NIB BANK LTD. through Power of Attorney---Appellant

Versus

PRESIDING OFFICER, DISTRICT CONSUMER COURT, SIALKOT and another---Respondents

F.A.O. No.94 of 2013, decided on 6th March, 2013.

(a) Punjab Consumer Protection Act (II of 2005)---

----S. 33---Limitation Act (IX of 1908) S. 5---Appeal to High Court---Limitation---Condonation of delay---Provisions of S.5 of Limitation Act, 1908 had been excluded from application to cases covered by special laws and therefore, cases instituted under Punjab Consumer Protection Act, 2005,which was a special law, could not be governed by provisions of S.5 of the Limitation Act, 1908---Benefits available for seeking condoation of delay under S.5 of the Limitation Act, 1908 therefore, could not be extended in such cases---Appellate Court, under S.33 of the Punjab Consumer Protection Act, 2005 did not have suo motu powers in respect of condoning delay.

Hafeez Ahmad and others v. Civil Judge, Lahore and others PLD 2012 SC 400 distinguished.

(b) Punjab Consumer Protection Act (II of 2005)---

----S. 27---Financial Institutions (Recovery of Finances) Ordinance, 2001 (XLVI of 2001) S. 7---Jurisdiction of Consumer Court in respect of matters between a Financial Institution/Bank and its customer---Consumer/complainant sought damages from respondent Bank contending inter alia that he had paid all due instalment of the auto vehicle leased from the bank, however, the bank despite repeated requests, did not release the registration book of said vehicle and had created an embargo on further transfer of the vehicle's ownership---Consumer Court directed respondent Bank to pay damages to the consumer/complainant---Contention of the Bank was that said matter fell under the exclusive jurisdiction of the Banking Court under the Financial Institutions (Recovery of Finances) Ordinance, 2001, and the Consumer Court had no jurisdiction in the matter---Validity---No objection regarding jurisdiction of the Consumer Court was raised by the Bank before the Consumer Court---Consumer Court was vested with the power granting damages to the complainant/consumer in view of the peculiar circumstances of the case---Appeal was dismissed in circumstances.

Amar Sana for Appellant.

2013 C L D 1133

[Lahore]

Before Nasir Saeed Sheikh, J

ALLIED BANK LTD, FAISALABAD through Attorneys of the Bank---Appellant

Versus

KHALID MEHMOOD---Respondent

F.A.Os. Nos.203, 204, 205 and 373 of 2009, decided on 21st November, 2012.

(a) Punjab Consumer Protection Act (II of 2005)---

----S. 2(d)--- "Damage", definition of--- Scope--- Account holder of a bank suffering losses and damage due to fraud committed by employees of the Bank---Such damage would be covered under the term "damage" defined in S.2(d) of Punjab Consumer Protection Act, 2005.

(b) Punjab Consumer Protection Act (II of 2005)---

----S. 2(k)--- "Services", definition of--- Scope--- Term "services" had not been given restricted sense (definition) for the purpose of Punjab Consumer Protection Act, 2005 and a generalized definition had been placed upon the term.

Lucknow Development Authority v. M.K. Gupta AIR 1994 SC 787 ref.

(c) Punjab Consumer Protection Act (II of 2005)---

----S. 2(k)--- "Services", definition of--- Scope--- Services provided by a Bank to its account holders---Concept (of services) provided in the Punjab Consumer Protection Act, 2005 was wide enough to include therein the services provided by a Bank which encompassed all kinds of facilities, advice or assistance being provided to its account holders.

Standard Chartered Bank Ltd. v. Dr. B.N. Raman AIR 2006 SC 2810 ref.

(d) Punjab Consumer Protection Act (II of 2005)---

----S. 2(c) & (k)---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), S. 2(c)---Account holder (consumer) of a bank (service provider)---"Consumer" and "services" as defined under the Punjab Consumer Protection Act, 2005 and "customer" as defined under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Scope---Decision of superior Courts on the Financial Institutions (Recovery of Finances) Ordinance, 2001 which had defined the term "customer" had no relevance to the definition of "consumer" as well as of "services" being provided by the bank which were amenable to the jurisdiction of the Punjab Consumer Courts.

Izhar Alam Farooqi, Advocate v. Sheikh Abdul Sattar Lasi and others 2008 SCMR 240 rel.

(e) Punjab Consumer Protection Act (II of 2005)---

----Ss. 2(d), (k) & 27---Account holder of a Bank suffering losses and damage due to fraud committed by employees of the Bank---Complaint filed by account holder against the Bank---Consumer Court, jurisdiction of---Scope---Account holder of a Bank when defrauded by the Bank or its employees could justifiably lodge a claim against the Bank before the Consumer Court established under the Punjab Consumer Protection Act, 2005.

Syed Fazal Mahmood for Appellant.

Pervaiz Akhtar Tahir for Respondents.

Date of hearing: 2nd November, 2012.

2013 C L D 1174

[Lahore]

Before Amin-ud-Din Khan, J

MUHAMMAD NAWAZ---Petitioner

Versus

AMIR SULTAN---Respondent

Civil Revision No. 2376 of 2012, heard on 22nd November, 2012.

Civil Procedure Code (V of 1908)---

----O. V, Rr. 20, 21, O. XXXVII, Rr. 2, 3 & Appendix-B, Form No.4---Suit for recovery of money on basis of pro note---Issuance of summons for 14-12-2011 by Trial Court to defendant on his foreign address through substituted service in absence of receipt of report from his foreign address about previous summons issued to him--- Appearance of defendant's counsel in court on 3-1-2012 and filing of leave application on 7-1-2012---Order of Trial Court dismissing leave application for being time barred---Validity---Nothing on record to show as to by which means or mode defendant had been sent summons on his foreign address---Nothing on record to show sending of summons to defendant at his address of District "L" given in plaint through court at place "L"---Record did not show that defendant either had avoided service of summons or could not be served through ordinary means---Trial Court before issuing summons through substituted service had not fulfilled requirements of O.V, R.2, C.P.C.---Summons were not issued to defendant in accordance with Form No.4 of Appendix-B, C.P.C.---Publication of summons in newspaper published at place "L" in Pakistan would not fulfil requirement of service of defendant residing in foreign country--- Leave application was attested on 2-12-2011 by High Commission of Pakistan in the foreign country, whereas his counsel filed memo of appearance in court on 3-1-2012 and filed leave application on 7-1-2012---Trial Court had to grant leave to defend suit on basis of affidavits, whereas defendant's leave application had been authenticated, verified and attested by High Commissioner of Pakistan--- Pro note was alleged to have been executed by defendant on 6-5-2009, whereas according to his passport, he had left Pakistan on 5-5-2009---High Court set aside impugned order and directed Trial Court to decide leave application on merits after considering copies of defendant's passport and give him opportunity to file affidavit in support of his pleas.

Sardarzada Zafar Abbas and others v. Syed Hassan Murtaza and others PLD 2005 SC 600 rel.

Rana Muhammad Asif for Petitioner.

Imran Muhammad Sarwar for Respondent.

Date of hearing: 22nd November, 2012.

2013 C L D 1325

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

UNITED BANK LIMITED---Plaintiff

Versus

KASHIR TEXTILE MILLS LIMITED and others---Defendants

C.O.S. No.165 of 2010, decided on 20th February, 2012.

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

----Ss. 3 & 9---Contract Act (IX of 1872), S. 23---Suit for recovery of non-interest based finance---Bank's claim of over-due mark-up after agreed period on basis of defendant's agreement to pay same---Validity---No financial institution could transact banking business after 20-6-1984 on interest based system or mark-up on mark-up basis, except in case of foreign loan---Lender institution under non-interest based system could recover buy back price of commodity only upto agreed period, but not thereafter---Defendant's such agreement was illegal and hit by S.23 of Contract Act, 1872, thus, Bank was not entitled to recover any mark-up after agreed period---Such claim of Bank was rejected in circumstances.

Crescent Commercial Bank now Samba Bank Ltd. v. Genertech Pakistan Ltd. 2011 CLD 37; A.M. Burq and another v. Central Exchange Bank Ltd. and others PLD 1966 (W.P.) Lah. 1; Faisal Bank through duly appointed Attorneys v. Messrs Zimindara Rice Mills and 21 others 2007 CLD 1164; Habib Bank v. Messrs Qayyum Spinning Ltd. 2001 MLD 1351; Habib Bank Ltd. v. Karachi Pipe Mills Ltd. 2006 CLD 842; Mst. Akhtar Begum v. Muslim Commercial Bank Ltd. 2009 SCMR 264; Mst. Riffat Jehan and another v. Habib Bank Limited and 10 others 2005 CLD 941; United Bank Limited v. Messrs Ilyas Enterprises through Proprietor Mr. Ilyas Malik and 2 others 2004 CLD 1338; Messrs United Dairies Forms (Pvt.) Limited and 4 others v. United Bank Limited 2005 CLC 569; Bankers Equity Limited through Principal Law Officer and 5 others v. Messrs Bentonite Pakistan Limited and 7 others 2003 CLD 931; Faysal Bank Limited v. Genertech Pakistan Ltd. and 6 others 2009 CLD 856; National Bank of Pakistan and others v. Karachi Development Authority and others PLD 1999 Kar. 260; Messrs Ittefaq Industries (Regd.) through Managing Partner and 2 others v. Bank of Punjab through duly Constituted Attorney 2004 CLD 1356; Dr. S.M. Rab v. National Refinery Ltd. 2005 CLD 1330; Nasim Nizami v. Habib Bank Limited 2006 CLD 1213 and Syed Asad Abbas v. Allied Bank of Pakistan through Branch Manager and others 2006 CLD 79 ref.

Waman Shriniwas Kini v. Ratilal Bhagwandas and Co. AIR 1959 SC 689 and Anayat Ali Shah v. Anwar Hussain and 2 others 1995 MLD 1714 rel.

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

----Ss. 2(d)(e)(i) & 9---Suit for recovery of restructured finance by Bank---Jurisdiction of Banking Court to entertain such suit---Scope---Banking Court could take cognizance of default committed by financial institution or customer in non-fulfilling financial obligation with regard to any finance---Structuring of finance by Bank would not change nature of finance, rather would facilitate customer to pay finance in extended period---Liability restructured was a finance in terms of S.2(d) of Financial Institutions (Recovery of Finances) Ordinance, 2001, thus, Banking Court would have jurisdiction to entertain such suit.

Ch. Muhammad Javed Arshad for Plaintiff.

Shahid Ikram Siddiqui for Defendants.

Date of hearing: 25th January, 2012.

2013 C L D 1390

[Lahore]

Before Abdus Sattar Asghar and Malik Shahzad Ahmad Khan, JJ

MUHAMMAD NAWAZ---Appellant

Versus

ZARAI TARAQIATI BANK LIMITED through Manager and 2 others---Respondents

R.F.A. No. 51 of 2012, heard on 5th September, 2012.

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

----Ss. 9 & 7---Civil Procedure Code (V of 1908), O.VII, R.11---Constitution of Pakistan, Art. 10-A---Rejection of plaint by Banking Court---Scope---Due process---Suit for declaration before Banking Court was filed by the customer/plaintiff seeking declaration to the effect that the plaintiff had nothing outstanding against the defendant bank---Banking Court, after framing of issues, dismissed the suit on basis of statement by defendant/Bank that the Bank would not adopt coercive measures against plaintiff for recovery of loan without determination from competent court---Contention of the plaintiff was that said order of the Banking Court was untenable in law---Validity---Under provisions of S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, if the financial institution committed a default in the fulfilment of any obligation with regard to any finance, the customer was also competent to institute a suit in the Banking Court by presenting a plaint---Since the Financial Institutions (Recovery of Finances) Ordinance, 2001 did not provide procedure with regard to scrutiny of plaint, therefore, procedure laid down under Order VII, Rule 11, C.P.C. was applicable to plaints before Banking Court---Only relevant material to determine whether the plaintiff had a cause of action or not for the purpose of Order VII, Rule 11, C.P.C. were only the facts stated in the plaint---Plaintiff could not be non-suited in the circumstances of the case merely on the basis of statement of the defendant-Bank and in the present case Banking Court did not take into consideration the facts given in the plaint---Suit for recovery filed by the defendant bank with respect to finance availed by the plaintiff was pending and if plaintiff's application for leave to defend in the said suit was dismissed, the plaintiff would be left remediless, and such state of affairs would violate Art.10-A of the Constitution; consolidation of the present suit with the defendant-Bank's suit would, therefore, be in the interest of justice---High Court set aside order of Banking Court and remanded the case to the Banking Court with the direction to consolidate the suit with the suit filed by the Bank---Appeal was allowed, in circumstances.

Muhammad Khalid Butt v. United Bank Limited 2003 CLD 911 and M.L. Traders through Proprietor and others v. Judge, Banking Court No.IV, Lahore and 2 others 2007 CLD 634 ref.

Messrs First Women Bank Limited v. Registrar, High Court of Sindh, Karachi and 4 others 2004 SCMR 108 rel.

Messrs A-Umar Fabrics through Proprietor and 2 others v. Habib Bank Limited through General Attorney/Manager 2006 CLD 1181 distinguished.

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

----O. VII, R.11---Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001), Ss. 9 & 7---Rejection of plaint---"Cause of action"---Connotation---Expression "cause of action" meant the cause for which the suit was brought---Term "action" meant those proceedings in which a legal demand of a right was made and the term "cause of action" referred to every fact, which if traversed, it should be necessary for the plaintiff to prove in order to support his right to judgment and which if not proved, gave the defendant a right to judgment and for this purpose only facts stated in the plaint were to be construed in order to determine whether they constitute a cause of action---Relevant material to determine whether the plaintiff in a suit had a cause of action were only the facts stated on the plaint.

Sheikh Shahid Mehmood for Appellant.

Mian Abdul Aziz Nasim for Respondents.

Date of hearing: 5th September, 2012.

2013 C L D 1472

[Lahore]

Before Mrs. Ayesha A. Malik and Abid Aziz Sheikh, JJ

BANK OF PUNJAB---Petitioner

Versus

INTERNATIONAL CERAMICS LTD. and others---Respondents

Writ Petition No.5864 of 2013, decided on 29th April, 2013.

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

----Ss. 9, 10 & 22---Constitution of Pakistan, Art. 199---Constitutional petition--- Maintainability--- Suit for recovery of bank loan---Grant of leave to defend the suit---Petitioner bank was aggrieved by order passed by Banking Court, whereby unconditional leave was granted to respondent borrower to defend the suit---Validity---Constitutional petition was maintainable in exceptional circumstances, where petitioner could show blatant illegality in order, such that Banking Court did not follow expressed mandate of law or that Banking Court had exercised its powers outside the jurisdiction conferred; in such situation, in order to meet the ends of justice and to prevent gross miscarriage of justice constitutional petition was maintainable---Granting leave merely gave respondent borrower an opportunity to lead evidence to defend its case and no right of petitioner bank was prejudiced---Petitioner bank did not have open and shut case on the basis of which decree could be passed and that petitioner bank would have to prove its claim through evidence---In leave granting order entries relied upon by petitioner bank did not provide sufficient data to show that disbursement and utilization of finance had been made by respondent borrower---High Court did not find any illegality in leave granting order and it did not fall within the ambit of exceptions---Petition was dismissed in circumstances.

Sheikh Abdul Sattar Lasi and another v. Judge Banking Court 2007 CLD 69; Messrs United Bank Ltd. through Authorized Attorneys v. Banking Court No.II and 2 others 2012 CLD 1556; United Bank Ltd. v. Presiding Officer, Banking Court No.2, Karachi and 6 others 2011 CLD 931; Agricultural Development Bank of Pakistan and others v. Yar Muhammad and others 2004 CLD 1084; Messrs Sajid Brothers and Co. through Proprietor and 2 others v. Manager, Allied Bank Limited and 8 others 2012 CLD 1858 and 2011 CLD 1571 ref.

Muhammad Ahmad Pansota for Petitioner.

2013 C L D 1518

[Lahore]

Before Nasir Saeed Sheikh, J

PUNJAB GOVERNMENT SERVANTS HOUSING FOUNDATION SCHEME, RAWALPINDI through Project Director---Petitioner

Versus

Messrs ABDUL SATTAR AND COMPANY---Respondent

Revision Petition No.2417 of 2012, decided on 12th February, 2013.

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

----S. 126---Arbitration Act (X of 1940), S.34---Stay of proceedings---Bank guarantee submitted by the party for due performance of the contract was an absolute and unconditional Bank guarantee of which encashment could not be stayed by the court which became functus officio by staying the proceeding of the suit by invoking the provisions of S.34 of Arbitration Act, 1940.

Orix Leasing Pak Ltd. v. Zahid Industries and others NLR 1992 CLJ 693; Arbab Abdul Qadir v. Mst. Bibi Fatima 1984 CLC 546; Messrs Commodities Trading International Corporation v. Trading Corporation of Pakistan Ltd. and another 1987 CLC 2063; Fareed Yaqub Ali v. Haji Muhammad Tahir, Haji Muhammad Tahir v. Fareed Yaqub PLD 1989 Quetta 16 and Ch. Abdur Rauf v. Mrs. Zubeda Kaleem and others 2001 CLC 664 distinguished.

Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191 and National Construction Company Limited v. Aiwan-e-Iqbal PLD 1994 SC 311 ref.

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

----S. 62---Arbitration Act (X of 1940), S.41---Notice for recission of contract was an independent act undertaken by the party and was subsequent to the stay of the proceedings---Issuance of notice could have given rise to an independent cause of action and party might have opted to file fresh proceedings for assailing the notice which was not subject matter of main suit and court having become functus officio after stay of proceedings could not entertain the application moved under S.41 of the Arbitration Act, 1940 to issue interim injunction.

Aurangzeb Mirza for Petitioner.

Ijaz Ali Akbar Sabzwari for Respondent.

2013 C L D 1562

[Lahore]

Before Ijaz Ahmad, J

MUHAMMAD TAHIR through Special Power of Attorney and 2 others---Petitioners

Versus

MUHAMMAD ASHRAF and 16 others---Respondents

Writ Petition No.7566 of 2012, decided on 30th January, 2013.

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

----Ss. 15(10) & 15(4)---Civil Procedure Code (V of 1908), S.12(2)--- Sale of mortgaged property--- Fraud, misrepresentation, or lack of jurisdiction in sale of mortgaged property---Scope---Suit for recovery was decreed whereafter during sale of mortgaged property, some of the defendants made application under S.15(10) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 for filing of proper accounts of the sale proceeds, which was allowed, and the Bank was ordered to remit the excessive amount to the defendants---Subsequently, the other defendants/applicants made application under S.12(2), C.P.C. for setting aside order for filing of accounts, on grounds of fraud and contended that the rest of the defendants had connived with the Bank to sell away the property at throw away price---Said application under S.12(2), C.P.C. was rejected by the Banking Court---Defendants/applicants impugned the said order inter alia on the ground that no notice was served upon the defendants/applicants before the order for filing of accounts was made---Validity---Bank had adopted the procedure laid under S.15(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 by putting to auction the mortgaged property and had published two notices, one in an English daily and one in an Urdu Daily, both having country-wide circulation---After receipt of an application under S.15(10) of the Ordinance, the other defendants/applicants would be deemed to have been validly served by the Banking Court by publication in the newspaper---After the property had been put into auction, and the highest successful bid was offered, the Financial Institution/Bank was only to file the proper accounts of the sale proceeds in the Banking Court, which was done--- Application made by the applicants/defendants after a lapse of ten years was of no avail and they should have availed remedy of appeal against decree of Banking Court---Impugned order was a final order and even otherwise an application under S.12(2), C.P.C. was not maintainable as there was no element of fraud, misrepresentation and lack of jurisdiction in the present case---Application under S.12(2), C.P.C. was rightly rejected by Banking Court---Appeal was dismissed, in circumstances.

Muhammad Aslam and another v. National Bank of Pakistan and 7 others 2009 CLD 1389; Ghulam Mustafa Bughio and another v. Judge Banking Court No.4, Karachi and another 2006 CLD 528; Messrs Gold Star International and another v. Muslim Commercial Bank Limited 2000 MLD 421 and Mst. Ruqiyya Rhazes v. Al-Falah Bank and 7 others 2002 CLD 401 rel.

Messrs Unicon Enterprises v. Banking Court No.5 City Court Building, Karachi and 2 others 2004 CLD 1452; Muhammad Umer Rathore v. Federation of Pakistan PLD 2009 Lah. 268 and Javaid Mahmood v. United Bank Limited and 4 others 2001 CLC 2011 ref.

Tariq Zulfqar Ahmed Choudhary for Petitioners.

S.M. Baqir for Respondent No.15.

Syed Zumrad Hussain for Respondent No.16.

2013 C L D 1661

[Lahore]

Before Mrs. Ayesha A. Malik and Abid Aziz Sheikh, JJ

HABIB BANK LIMITED through Authorized Attorneys---Appellant

Versus

PAK POLY PRODUCTS (PVT.) LTD. and 3 others---Respondents

E.F.A. No.449 of 2011, heard on 7th May, 2013.

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

----Ss. 3, 17 & 22--- Civil Procedure Code (V of 1908), S.47---Suit for recovery of loan---Grant of costs of funds---Cost of funds in the decree were allowed under Ss. 3 & 17 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Determination of cost of funds by the Executing Court---Executing Court granted cost of funds from the date of institution of suit---Bank had impugned the order of the Banking Court whereby the cost of funds had been determined from the date of institution of the suit and not from the date of default till realization of amount, as claimed by the Bank---Contentions of the Bank were that under Ss. 3 & 17 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the Bank was entitled to the grant of cost of funds from the date of default till its realization and not from the date of institution of suit and that the date of default was to be considered as the date beyond which the mark-up was not allowed by the Banking Court---Respondents contended that the cost of funds could only be recovered from the respondents from the date of institution of suit and that no date of default was determined by the Banking Court while passing the decree---Validity---Under the provisions of Ss.3 & 17 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the customer was liable to pay cost of funds from the date of default till realization of the cost of funds as certified by the State Bank of Pakistan---Banking Court while passing the decree in favour of the Bank had granted cost of funds under Ss. 3 & 17 of the Ordinance---Although specific date of default was not mentioned in the decree, however, the date of default was defined in a manner that the claim of the Bank of an amount of mark-up charged after the date of default was declined by the Banking Court while passing the decree---Banking Court was mindful of the date of default at the time of passing the decree, after which date no mark-up was allowed to the Bank---Statement of account showed the relevant date of default beyond which the mark-up was not allowed in the decree by the Banking Court, and this date was to be taken as the date of default for the purposes of S.3 of the Ordinance---Argument of the respondents that cost of funds should be from the date of institution of suit was not tenable for two reasons, firstly, that under S.3 of the Ordinance, the cost of funds were to be granted from the date of default, and secondly, that the date of default was already determined in the decree---Executing Court could determine the date of default under S. 47, C.P.C., if no such date was defined in the decree but, in the present case, date of default was defined and could be ascertained from the decree---Impugned order was not sustainable in view of the settled principle of law that an Executing Court could not go behind the decree and was obliged to execute the decree as it was---Impugned order of the Banking Court was set aside and the appeal was allowed by the High Court, in the circumstances.

Habib Bank Limited v. Tauqeer Ahmed Siddiqui and another 2009 CLD 312; Allied Bank of Pakistan Limited v. Northern Polyethylene Limited and others 2006 CLD 565; Bank of Punjab through Authorized Officer v. Messrs KNK Infrastructure (Pvt.) Ltd. through Chief Executive Officer and 2 others 2012 CLD 961; Messrs Emen Textile through Sole Proprietor and another v. Habib Bank Limited 2010 CLC 547; Industrial Development Bank of Pakistan v. Pakistan Belting (Pvt.) Limited through Chief Executive and 5 others 2006 CLD 808; Zarai Taraqiati Bank Limited through Branch Manager v. Hassan Aftab Fatiana 2009 CLD 36 and Crescent Commercial Bank Now Samba Bank Ltd. v. Genertech Pakistan Ltd. 2011 CLD 37 ref.

Zahid Industries v. Habib Bank 2007 CLD 618; Muhammad Ali v. Zakir Hussain PLD 2005 Lah. 331; Ayesha Bibi v. National Logistic Cell 2002 CLC 747; Hassan Masood Malik v. Additional District Judge and others 1994 MLD 1877 and Messrs Dawood Cotton Mills Ltd. v. KF Development Corporation Ltd. 2004 CLC 671 rel.

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

----Ss. 3 & 17---Cost of funds---Grant of---Under the provisions of Ss.3 & 17 of the Financial Institutions (Recovery of Finances) Ordinance, 2001, the customer was liable to pay cost of funds from the date of default till realization of, the cost of funds as certified by the State Bank of Pakistan.

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

----S. 47---Powers of Executing Court---Date of default, determination of---Executing Court could determine the date of default under S.47, C.P.C. if no such date was defined in the decree by the Court.

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

----S. 47---Execution of decree---Executing Court cannot go behind the decree and is obliged to execute the decree as it is---Principle.

Zahid Industries v. Habib Bank 2007 CLD 618; Muhammad Ali v. Zakir Hussain PLD 2005 Lah. 331; Ayesha Bibi v. National Logistic Cell 2002 CLC 747; Hassan Masood Malik v. Additional District Judge and others 1994 MLD 1877 and Messrs Dawood Cotton Mills Ltd. v. KF Development Corporation Ltd. 2004 CLC 671 rel.

Majid Ali Wajid for Appellant.

Asif Mehmood Cheema for Respondents.

Date of hearing: 7th May, 2013.

2013 C L D 1684

[Lahore]

Before Ijaz Ahmad and Amin-ud-Din Khan, JJ

MUHAMMAD HUSSAIN and another---Appellants

Versus

JUDGE BANKING COURT NO.1 MULTAN and 3 others---Respondents

F.A.O. No.133 of 2010, heard on 5th March, 2013.

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

----Ss. 15 & 23---Transfer of Property Act (IV of 1882), S.52---Sale of mortgaged property---Principle of lis pendens---- Applicability--- Bona fide purchaser---Scope---Suit for recovery was decreed whereafter during execution proceedings, the appellants made application to the effect that they were bona fide purchasers of the suit property and were not aware of the decree---Contention of the appellants was that when they had purchased the mortgaged property they had taken all precautions before the purchase and had no knowledge of the decree and there was no mention in the record of rights of any charge created over the property by the Bank , and therefore, the said property could not be cast away for satisfaction of the decree---Appellants had purchased the mortgaged property three months after the passing of the decree---Under S.23 of the Financial Institutions (Recovery of Finances) Ordinance 2001, a suit was automatically converted into an execution application and no formal application was required to be made by the Bank---Appellants had purchased the suit property at a rate less than the one paid by the previous purchaser, and therefore, purchase did not seem to be bona fide---Principle of lis pendens, in the present case, defeated the right of the appellants---Appeal was dismissed.

Khalid Adeeb Khanam v. Messrs Prudential Investment Bank Ltd. and others 2002 CLD 451 and Risaldar Ghazi Khan and another v. Abdur Rehman and another 1984 CLC 1615 ref.

Risaldar Ghazi Khan and another v. Abdur Rehman and another 1984 CLC 1615 rel.

Muhammad Saleem Iqbal for Appellants.

Muhammad Waseem Shahab for Respondent No.2.

Ahmad Nadeem Khan for Respondent No.4.

Date of hearing: 5th March, 2013.

2013 C L D 1705

[Lahore]

Before Umar Ata Bandial, C.J.

MUHAMMAD RIAZ---Petitioner

Versus

PRESIDENT, P.C. BANK, LAHORE---Respondent

Writ Petition No.13234 of 2006, decided on 30th October, 2012.

Prudential Regulations for Consumer Financing (State Bank of Pakistan)---

----Reglns. 6 & 14--- Constitution of Pakistan, Art.199---Constitutional petition--- Consumer financing---Auto-finance--- Termination of loan--- Consumer impugned actions of respondent Bank whereby his car finance loan was terminated a few months after the disbursement of the loan, and he was asked to pay an amount for delivery of the vehicle to the petitioner---Contention of the petitioner was that the actions of the respondent (Bank) were in violation of the Prudential Regulations for Consumer Finance issued by the State Bank of Pakistan---Validity---Termination of auto-lease was effected without notice and without the case of the petitioner incurring classification under Regln.14 of the said Prudential Regulations for Consumer Finance (State Bank of Pakistan)---Termination letter was not preceded by any notice in terms of Regln.6 of the Prudential Regulations for Consumer Finance (State Bank of Pakistan) and the specific default period of 90 days as per the said Regulations, was not attracted to the present case and the repossession of the vehicle was therefore contrary to the said Regulations---Conduct of the respondent bank also had an element of mala fide and coercion and there was a failure of the respondent Bank to confront the petitioner with his specific default and with the means to cure the same---High Court directed the State Bank of Pakistan to probe the transactions and dealing of the respondent Bank in order to determine a suitable compensation for the petitioner and to take appropriate action against the respondent Bank---Constitutional petition was disposed of accordingly.

Ms. Safina Aslam and others v. Muslim Commercial Bank and another 2011 CLD 18 ref.

C.M. Sarwar for Petitioner.

Shahid Ikram Siddique for Respondents Nos. 1 and 3.

Rehan Nawaz for SBP.

2013 C L D 1718

[Lahore]

Before Umar Ata Bandial and Muhammad Farrukh Irfan Khan, JJ

SHEHZADA AKHTAR---Appellant

Versus

BANK ALFALAH LTD. and others---Respondents

F.A.O. No.29 of 2012, decided on 23rd February, 2012.

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

----Ss. 2(c), 7 & 15---Civil Procedure Code (V of 1908), S.12(2) & O.I, R.3---Suit for recovery---Necessary party to suit for recovery---Non-impleadment of owner of mortgaged property---Effect---Suit for recovery was decreed and during execution proceedings, the applicant moved application under S.12(2), C.P.C. for setting aside decree contending inter alia that she was the owner in possession of the mortgaged property and she was never impleaded in the suit and had neither mortgaged the said property nor had obtained any finance facility---Application was dismissed by Trial Court---Validity---Bank, at time of filing of suit, was aware that the applicant was the lawful owner of the mortgaged property and the mortgaged deed in favour of bank was executed on her behalf by her alleged attorney (her husband)---In terms of the definition of "customer" in S.2(c) of the Ordinance, applicant was the mortgagor of the security, and therefore, she fell within the said definition of "customer" and was a necessary party to the suit and her non-impleading as a defendant in the suit was a gross error---Effect of such non-impleadment was that there existed neither any decree against applicant nor could her personal property be sold in execution of a decree to which she was not a party to---Nothing on record showed that it could be inferred that the agent (husband) ever communicated to the principal (applicant) about the mortgage of her property and finance facility was only for the benefit of the husband--- High Court observed that the plaintiff bank should have been more cautious about such fact before awarding the finance facility and should at least have impleaded the applicant as party to the suit---High Court set aside order of Trial Court and remanded the case to the said court with the direction to provide the applicant an opportunity to file application for leave to contest---Appeal was allowed, accordingly.

Pakistan Water and Power Development Authority (WAPDA) through Authorized Signatory v. American Express Bank Limited 2005 CLD 1764; Vesu and another v. Thekkedath Veetil Kannama and others AIR 1926 Mad. 991; Fida Muhammad v. Pir Muhammad Khan and others PLD 1985 SC 341 and Malik Riaz Ahmad and others v. Mian Inayat Ullah and others 1992 SCMR 1488 rel.

Iftikhar Ullah Malik for Appellant.

Muhammad Farooq for Respondent No.1.

2013 C L D 1736

[Lahore]

Before Umar Ata Bandial, J

ASGHAR ABBAS GARDEZI---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and others---Respondents

Writ Petition No.1163 of 2011, decided on 11th April, 2012.

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

----Ss. 22(3) & 33---Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Ordinance (III of 2002) S. 6---Constitution of Pakistan Art. 199---Constitutional petition---Adjudication by the Commission upon the rights of any person whose application on any matter it was required to consider in exercise of any power or function under the Securities and Exchange Commission of Pakistan Act, 1997---Essentials---Alternate remedy of appeal before the Commission---Petitioner, a minor shareholder in the target company for takeover, impugned letter/order issued by the Commission whereby it was intimated that S.6 of the Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Ordinance 2002 (relating to consolidation of holdings) did not apply to the transaction of shares in the target company whereby shareholding of the respondents increased to more than fifty per cent---Contention of the petitioner was that the adverse order passed by the Commission must conform with the requirements of S.22(3) of the Securities and Exchange Commission of Pakistan Act, 1997 for the petitioner to avail alternate remedy of appeal before the Appellate Bench of the Commission under S.33 of the Act---Validity---On plain reading the impugned letter /order failed to satisfy the statutory requirement of providing reasons for the Commission decision by it---High Court, upon the consent of the respondents, including the Commission, set aside impugned letter/order of the Commission and remanded the matter to the Commission for decision by the competent authority envisaged under the law on the objections raised by the petitioner---High Court directed that determination upon the issue shall be made after hearing the affected parties with reasons to be recorded in writing in accordance with the statutory principle enshrined in S.22(3) of the Securities and Exchange Commission of Pakistan Act, 1997 within a period of three months and that till such time Acquirers' shares in the target company shall not be transacted or transferred by the respondents---High Court further directed that till such decision was made by the Commission, status quo with respect to title of shares of management of the target company should be maintained---Constitutional petition was disposed of, accordingly.

Imtiaz Rasheed Siddiqui assisted by Shahryar Kasuri for Petitioner.

Sikandar Bashir Mohmand on behalf of Abdul Hafeez Pirzada for Respondents Nos.5, 6 and 7.

Zahid Nawaz Cheema on behalf of Syed Ali Zafar for Respondent UBL.

Ravi R. Pinjani on behalf of Rasheed A. Rizvi for Respondent SECP along with Ahmad Arslan, Joint Director, SECP and Liaqat Ali, Joint Registrar.

Mehr Muhammad Iqbal for Respondent No.13/LSE.

Muzammal Akhtar Shabbir for CCP/Respondent No.3.

2013 C L D 1748

[Lahore]

Before Mrs. Ayesha A. Malik, J

CREATIIVE ELECTRONICS AND AUTOMATION----Petitioner

Versus

COMMISSIONER, LAHORE and others----Respondents

Writ Petition No.25955 of 2012, decided on 12th April, 2013.

Partnership Act (IX of 1932)---

----Ss. 69, 18 & 19 --Constitution of Pakistan, Art.199---Constitutional petition--- Maintainability--- Non-registered firm--- Words "other proceedings" in S.69, Partnership Act, 1932---Scope---Objection was raised to maintainability of constitutional petition in view of bar contained in S.69 of Partnership Act, 1932---Validity---Words "other proceedings" did not include constitutional jurisdiction as such jurisdiction created by the Constitution, could not be equated with suits or claims of set off---Bar contained in S.69 of Partnership Act, 1932, was not applicable to constitutional petition---One partner had implied authority to act and carry on business in usual way and could bind his firm, therefore, he could file constitutional petition on behalf of other partners without written authorization from other partners---Subsequent filing of deed of Association and ex-post facto rectifications by partners was accepted and the same cured technical defects in filing petition---Constitutional petition was maintainable in circumstances.

Muhammad Ayub and Brothers through Partner v. Province of Sindh through Secretary Irrigation and Power Department, Karachi and others 2009 CLD 194; Messrs Nishat Chunnian Ltd. v. Province of Punjab through Secretary, Local Government and 2 others 2012 CLD 1288; Muslim Commercial Bank Limited Karachi v. Haji Shaikh Yaqinuddin and 2 others PLD 1992 Kar. 314; Rala Singh and others v. Babu Bhagwan Singh and Sons AIR 1925 Rangoon 30; Muhammad Azam Muhammad Fazil & Co., Karachi v. Messers N.A. Industries, Karachi PLD 1977 Kar. 21; Brig. Muhammad Bashir v. Abdul Karim PLD 2004 SC 271; Sajawal Khan v. Wali Muhammad 2002 SCMR 134 and Messrs Al-Raham Travels and Tours Pvt. Ltd. v. Ministry of Religious Affairs, Hajj, Zakat and Ushr through Secretary and others 2011 SCMR 1621 ref.

Mansoor Usman Awan for Petitioner.

Waqas Qadeer Dar, A.A.-G. for Respondents.

2013 C L D 1780

[Lahore]

Before Rauf Ahmad Sheikh and Mamoon Rashid Sheikh, JJ

BANKERS EQUITY LIMITED---Appellant

Versus

DECENT INDUSTRIES (PVT.) LIMITED and another---Respondents

E.F.A. No.324 of 2007, decided on 6th May, 2013.

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

----S. 22---Limitation Act (IX of 1908), S.5---Appeal before High Court---Delay in re-filing of appeal after removal of office objections, condonation of---Appellant's plea was that office of High Court had not given him notice about raising of any further objection; that he received file from office on 7-6-2007 in order to remove further objections and re-filed same on 18-6-2007; and that he could not be penalized in absence of such prior notice---Validity---Nothing on record to show issuance of notice to appellant for removal of further objections and as to why office had not fixed appeal for hearing in motion due to non-removal of further objections within specified time---Appellant could not be penalized for such inaction of office---Appeal was, held to be within time.

Bank of Punjab v. Punjab Labour Appellate Tribunal Lahore and 2 others PLD 2010 Lah. 666; Allah Dino and another v. Muhammad Shah and others 2001 SCMR 286; Muhammad Anwar and others v. Mst. Ilyas Begum and others PLD 2013 SC 255; Protein and Fats International (Pvt.) Limited through Chief Executive and 2 others v. Capital Assets Leasing Corporation Limited through Manager 2005 CLC 857; Messrs Khan Tractors, Alipur Road, Khan Garh District Muzaffargarh through Proprietor and 2 others v. Habib Bank Limited, Railways Road Branch, Muzaffargarh through Manager 2013 CLC 177; Shazia Munawar v. Punjab Public Service Commission through Secretary, Lahore PLD 2010 Lah. 160 and Province of Punjab through District Collector Lodhran and 6 others v. Muhammad Khalid Khan 2005 CLC 1083 ref.

Mst. Sabiran Bi v. Ahmad Khan and another 2000 SCMR 847 and Farman Ali v. Muhammad Ishaq and others PLD 2013 SC 392 rel.

Hamid Shabbir Azar for Appellant.

Shahid Ikram Siddiqui for Respondent No.2.

2013 C L D 1802

[Lahore]

Before Rauf Ahmad Sheikh and Mamoon Rashid Sheikh, JJ

SHAHBAZ A. KHOKHAR---Appellant

Versus

HABIB BANK LIMITED---Respondent

R.F.A. No.231 of 2007, heard on 21st May, 2013.

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

----Ss. 9 & 10---Suit for recovery of amount for loss suffered by customer due to delayed encashment of his US Dollars by Bank and difference of its conversion rate on relevant dates---Subsequent suit for recovery of finance by Bank against customer---Filing of leave applications by both parties in suit filed against each other---Banking Court dismissed customer's leave application and decreed Bank's suit, while dismissed customer's suit---Validity---Findings of Banking Court were erroneous to the effect that customer had failed to substantiate his objections to statement of accounts filed by Bank and competence of its attorney to institute subsequent suit---Banking Court had accepted Bank's leave application by observing that questions raised therein would require determination on basis of evidence---When there were triable issues in one suit as per such observations of Banking Court, then same would hold true for other suit---Banking Court had erred in law by dismissing customer's suit---High Court set aside impugned judgment and decree and remanded case to Banking Court for its decision afresh while deeming customer's leave application as pending.

Messrs Ali Match Industries Ltd. and 3 others v. Industrial Development Bank of Pakistan 1997 SCMR 943; Faisal Bank Limited v. Badin Board Mills and 6 others 2010 CLD 442; United Bank Limited v. Messrs Ilyas Enterprises through Proprietor Mr. Ilyas Malik and 2 others 2004 CLD 1338; Messrs Ittefaq Industries (Regd.) through Managing Partner and 2 others v. Bank of Punjab through Duly Constituted Attorney 2004 CLD 1356; United Bank Limited v. Tanvir Khalid 2003 CLD 291; Muhammad Ramzan and 4 others v. Agricultural Development Bank of Pakistan through Manager 2004 CLD 1376 and Messrs Al-Kashmir Traders and 6 others v. United Bank Limited through Muhammad Jarar 2005 CLD 1116 ref.

Appollo Textile Mills Ltd. and others v. Soneri Bank Ltd. PLD 2012 SC 268 and Habib Bank Ltd. (Foreign Exchange Branch) v. Dost Muhammad Cotton Mills Ltd. and others PLD 1997 Kar. 331 rel.

Shahid Ikram Siddiqui for Appellant.

Ahmed Pervaiz and Zain Ghaffar for Respondent.

Date of hearing: 21st May, 2013.

2013 C L D 1810

[Lahore]

Before Ijaz ul Ahsan, J

MUHAMMAD MASOOD---Petitioner

Versus

BANK OF PUNJAB (BoP) through President and 3 others---Respondents

Writ Petition No.31903 of 2012, decided on 28th December, 2012.

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

----Ss. 252, 254, 259 & 260---Constitution of Pakistan, Art.199---Constitutional petition---Maintainability---Non-compliance of law and rules by bank---Validity---Appointment of Chartered Accountants as external auditors---If at all the Board of Directors had acted illegally or in violation of the rules, the remedy of the petitioner lay in approaching the regulator i.e. Securities and Exchange Commission of Pakistan by bringing to its attention that the Board of Directors and the Annual General Meeting were not informed of the material which was allegedly available against the Chartered Accountants which had disentitled them from being appointed as external auditors---Constitutional petition was dismissed.

(b) Chartered Accountants Ordinance (X of 1961)---

----S. 15--- Constitution of Pakistan, Art.199---Constitutional petition---Appointment of Chartered Accountants as external auditors---Institute of Chartered Accountants of Pakistan and its Quality Assurance Board regulate auditing and accounting in Pakistan---Quality Assurance Board is an independent body set up by the Institute of Chartered Accountants of Pakistan as per its framework---Quality Control Board is tasked to ensure adherence to various standards of firms of auditors and to review and confirm the Quality Control Rating of firms of auditors---If there is any ambiguity in Quality Control Rating of the firm, petitioner is at liberty to approach Institute of Chartered Accountants of Pakistan as well as its Quality Assurance Board---High Court declined to interfere in the matter in its constitutional jurisdiction.

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

----Ss. 252, 254, 259 & 260---Constitution of Pakistan, Art.199--- Constitutional petition--- Maintainability---Chartered Accountants as external auditors---Available forums to challenge the appointment of Chartered Accountants---Remedy of the petitioner lies in approaching the regulator i.e. Securities and Exchange Commission of Pakistan---State Bank of Pakistan is the regulatory authority for all Banks---Number of specialized regulatory authorities are present before whom, the petitioner could have agitated the matter and pointed out illegalities committed in appointment of external auditors of the bank---Said regulators have adequate and sufficient powers available to them under the respective governing statutes to take cognizance of the matter and pass such orders as may be necessary under the law, rules and regulations---Constitutional petition before the High Court was not maintainable.

Shazib Masud for Petitioner.

2013 C L D 1862

[Lahore]

Before Shujaat Ali Khan, J

Messrs GUJRANWALA FOOD INDUSTRIES (PVT.) LTD.---Appellant

Versus

Messrs CORAL ENTERPRISES (PVT.) LTD. and another---Respondents

First Appeals Against Order Nos.61, 62 and 63 of 2010, heard on 16th April, 2013.

Trade Marks Ordinance (XIX of 2001)---

----Ss. 111(2) & 29---Trade Marks Rules, 2004, Rr. 30(6) & 30(7)--- General Clauses Act (X of 1897) S. 24-A---Registration of trade mark---Opposition proceedings---Procedure before Registrar of Trade Marks---Notice/opportunity of being heard to party adversely affected by order of the Registrar---Non-filing of evidence in opposition proceedings within statutory period of two months---Extension in time---Scope---Appellant filed oppositions against trade marks that the respondents had sought to register, and said oppositions were disallowed by the Registrar on ground that evidence under R.30(6) of Trade Marks Rules, 2004 was not filed within the stipulated period of two months by the appellants---Validity---Under R.30(6) of the Trade Marks Rules, 2004 if opposing party failed to file evidence within two months, such party's opposition could be abandoned, however by virtue of R.30(7) of the said Rules, the Registrar was vested with the power to extend such statutory period of two months for filing of evidence---In the present case, Registrar while knocking out the appellants on basis of R.30(6) of the Trade Marks Rules, 2004 had neither mentioned reasons for not allowing the extension in time nor had detailed the causes for penal action taken against the appellant---Under S.24-A of the General Clause Act, 1997 every authority was bound to justify its decisions by giving valid reasoning for the same---Impugned order was bereft of any reasoning could not be considered a speaking one, therefore the same could not be allowed to hold field---Even otherwise under Ss.29(7) & 29(8) of the Trade Marks Ordinance, 2001 the Registrar was bound to give notice of hearing and then to decide the matter of registration of trade marks---No notice was issued to the appellants in the present case, which the Registrar was bound to issue under provisions of S.111 of the Trade Marks Ordinance, 2001---High Court set aside impugned order and remitted the matter back to the Registrar with the direction that the appellant be provided a reasonable opportunity to tender its evidence---Appeal was allowed, accordingly.

Assistant Registrar of Trade Marks, Karachi v. Messrs Lakson Tobacco Company Ltd. 1992 SCMR 2323 and Universal Tobbaco (Pvt.) Ltd. and others v. Japan Tobacco Inc. and others 2003 CLD 1549 ref.

Rehmat Elahi v. Messrs Hoya Kabushiki Kaisha PLD 1992 SC 417 and Mohsin Aziz Butt and others v. General Electric Industries and others 1988 CLC 1358 distinguished.

Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268 and Wajid Saeed Khan v. Abdul Qadoos Khan Swati and others 2007 CLD 1239 rel.

Shakeel Abid for Appellant.

Haseeb Zafar for Respondent No.1.

Date of hearing: 16th April, 2013.

2013 C L D 1895

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

MCB BANK LTD. through Authorized Officer and another---Petitioners

Versus

STATE BANK OF PAKISTAN through Governor and another---Respondents

Writ Petition No.18612 of 2010, decided on 28th May, 2013.

(a) Agreement---

----Amendment--- Principle--- Concluded and performed agreement cannot be amended or altered without consent of party concerned unless there is allegation of fraud and misrepresentation against affected party.

(b) Order---

----Retrospective operation--- Scope--- Such operation cannot be given to an executive order for usurping contractual rights and obligation already accrued.

Mian Muhammad Nawaz Sharif v. President of Pakistan and others PLD 1993 SC 473 rel.

(c) Interpretation of statutes---

----Retrospective effect--- Scope--- Enactment which prejudicially affects vested rights or legality of past transactions or impairs contract, cannot be given retrospective operation.

Federation of Pakistan and others v. Shaukat Ali Mian and others PLD 1999 SC 1026 rel.

(d) Banking Companies Ordinance (LVII of 1962)---

----Ss. 27(4)(i)(ii)(iii) & 41--- Constitution of Pakistan, Art.199--- Constitutional petition--- Banking licence, cancellation of---Executive order---Retrospective effect---Petitioner was a banking company and it was aggrieved of circular issued by State Bank of Pakistan cancelling banking licence of petitioner---Validity---State Bank of Pakistan was enjoying powers to cancel banking licence of any banking company, if banking company's case fell in the mischief of provision under S.27(4)(i)(ii)(iii) of Banking Companies Ordinance, 1962---No such situation was prevailing in the case of petitioner as provided under S.27(4)(i)(ii)(iii) of Banking Companies Ordinance, 1962---Petitioner had only applied for change of name that too after proper permission under the law, so action of authorities to cancel licence of petitioner was patently without any jurisdiction and was void ab initio---State Bank of Pakistan through circular in question introduced new terms in concluded and fully performed agreement with the purchasers of shares of petitioner bank, who were not sponsors of petitioner bank---Circular in question was beyond the powers conferred upon State Bank of Pakistan under S.41 of Banking Companies Ordinance, 1962, as petitioner bank was an independent juristic entity and its shareholders were enjoying separate juristic status--- Order of State Bank of Pakistan cancelling banking licence of petitioner and issuance of new banking licence was illegal and without lawful authority---High Court declared that original banking licence of petitioner would be deemed effective and circular in question was not applicable against shareholders of petitioner/Bank and that all circulars and orders of State Bank of Pakistan directing petitioner to comply with circular in question were without lawful authority and were of no legal effect--- Petition was allowed in circumstances.

Safeer Travels (Pvt.) Ltd. through Chief Executive Safeerul Islam v. Muhammad Khalid Shafi through Legal Heirs PLD 2004 SC 690; Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652 and Collector of Customs (Appraisement) v. Messrs Saleem Adaya, Karachi PLD 1999 Kar. 76 rel.

(e) Constitution of Pakistan---

----Art. 199--- Constitutional petition---Laches, principle of---Applicability---If order or act of any authority is void, unjust and improper, principle of laches cannot be pressed into service.

Masooda Begum v. Government of Punjab PLD 2003 SC 90; Pakistan Post Office v. Settlement Commissioner 1987 SCMR 1119 and Chief Kwame Asante v. Chief Kwame PLD 1949 Privy Council 45 rel.

Khalid Anwar for Petitioners.

Zahid F. Ebrahim for Respondents.

Abdus Sattar Junaid, Standing Counsel for Federation.

Mahmood Shafqat, Additional Director Banking Policy and Regulation Department, SBP, Karachi.

Date of hearing: 12th December, 2012.

2013 C L D 1953

[Lahore]

Before Muhammad Khalid Mehmood Khan, J

JAHANGIR SIDDIQUI and others---Petitioners

Versus

AZGARD NINE LIMITED and others---Respondents

C.O. No.33 of 2012, decided on 21st January, 2013.

Companies Ordinance (XLVII of 1984)---

----S. 160-A---Circumstances in which proceedings of a general meeting (AGM) may be declared invalid---Scope---Petition under S.160-A of the Companies Ordinance, 1984 was maintainable only in case of finished/ concluded meetings---Petitioner sought declaration to the effect that proceedings of the Annual General Meeting of the respondent Company were illegal on ground of a number of irregularities---Validity---Under S.160-A of the Companies Ordinance, 1984, the court had powers to set aside the whole proceedings of an Annual General Meeting or any part thereof, and word "proceedings" used in said section was significant, and "proceedings" of a Annual General Meeting had the vital role---Proceedings of the impugned meeting showed that said meeting was not finalized but was adjourned, under stay order granted by Civil Court---Since the impugned meeting was not concluded and stood adjourned till the vacation of the restraining order of the Civil Court, the status of the meeting was of an unfinished meeting---Petition under S.160-A of the Companies Ordinance, 1984 will only be maintainable in the case of a concluded meeting---High Court held that after the conclusion of the impugned Annual General Meeting of the respondent company, the petitioners had two remedies, under Ss.160-A & 179, whereby they could challenge the legality of the Annual General Meeting as a whole or could challenge the election of the Directors---Petition under S.160-A of the Companies Ordinance, 1984 being premature, was dismissed, in circumstances.

Lt. General (Retd.) Shah Rafi Alam and others v. Lahore Race Club and others 2004 CLD 373; Central Cotton Mills Limited and 2 others v. Naveed Textile Mills Limited and another 1996 MLD 1943; Naveed Textile Mills Ltd., Karachi and 3 others v. Central Cotton Mills Limited, S.I.T.E., Kotri, District Dadu and 2 others PLD 1997 Kar. 432; Integrated Technologies and Systems Ltd. v. Interconnect Pakistan (Pvt.) Limited through Acting Chief Executive and others 2001 CLC 2019 and Syed Amir Hussain Shah v. Progressive Papers Ltd. and others PLD 1969 Lah. 615 ref.

McLaren v. Thomson (Chancery Division) [1917 M. 479] ]1917] 2 Ch.41; Mrs. A. Ananthtlakshmi Ammal v. The Hindustan Investment and Financial Trust Lt. AIR (38) 1951 Madras 927; Delhi High Court 47 (1992) DLT 363 Equivalent 1992 (22) DRJ 431 and Syed Ameer Hussain Shah v. Progressive Paper Limited PLD 1969 Lah. 615 rel.

Ahmad Pervaiz for Petitioners.

Salman Akram Raja for Respondent No.3.

Syed Shahab Qutab for Respondent No.9.

Umar Riaz Malik and Saqib Haroon for Respondents.

Muzamil Akhtar Shabbir for SECP.

Date of hearing:7th December, 2012.

2013 C L D 2005

[Lahore]

Before Syed Mansoor Ali Shah, J

GULISTAN TEXTILE MILLS LTD.---Plaintiff

Versus

ASKARI BANK LTD. and others---Defendants

C.O.S. Nos.128, 129, 133 and 134 of 2012, decided on 27th December, 2012.

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

----O. VII R. 11---Rejection of plaint---Power of the Court to reject plaint under Order VII, R. 11, C.P.C.---Scope---Court enjoyed an independent, suo motu and sua sponte power to examine the plaint at any stage of the suit under O.VII, R.11, C.P.C. under the wisdom that the Court could always, nip a frivolous suit in the bud, by rejecting the plaint in order to retain its docket and time for more serious claims---Order VII, R.11, C.P.C. contemplated firstly that a stillborn suit should be properly buried, at its inception, so that no further time is consumed on a fruitless litigation and secondly, it gave the plaintiff a chance to retrace his steps, at the earliest possible moment, so that, if permissible under law, he may found a properly constituted case---Such power is grounded in good public policy and the Court enjoyed an insular power under O.VII, R.11, C.P.C. to examine the plaint, primarily on the basis of the contents of the plaint---For the Court it did not matter if the defendants in a suit had been issued summons or applications for leave to defend or written statements have been filed by the defendants or even whether the defendants were in Court to defend their positions; the Court could still proceed unilaterally against the plaintiff alone without engaging the other party, if the court was of the view that the plaint was liable to be rejected.

Mst. Shamim Tahira and others v. Zarai Taraqiyati Bank of Pakistan Ltd. through Manager and another 2007 CLD 778; Platinum Insurance Company's case 1997 MLD 2394; Waheed Corporation case: Falcon Ventures Pvt. Ltd. through Chief Executive, Iftikhar Ahmad v. Punjab Banking Court No.II, Lahore and another 2004 CLD 726; Sheikh Muhammad Kashif v. Askari Leasing Limited through Manager/Chief Executive of Branch/Recovery Officer 2004 CLD 1645; Manzoor Ahmad and another v. Agricultural Development Bank of Pakistan through Manager Nankana Sahib Branch and 3 others 2005 CLD 653; Muhammad Azwar Siddiqui v. Chief Executive Union Leasing Ltd. and 21 others 2006 CLD 946; and Messrs Multimed Marketers through Managing Partner and 7 others v. United Bank Limited through Manager 2007 CLC 344 distinguished.

PLD 1967 Dacca 190 and AIR 2003 SC 759 rel.

(b) Words and Phrases---

----"Sua sponte", meaning of---Latin: "of their own accord"---Describes an act of authority taken without formal prompting from another party.

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

----Ss. 7(2), 9 & 10(8)---Civil Procedure Code (V of 1908) O.VII, R.11---Procedure of Banking Court---Power of Banking Court to reject plaint if the same did not disclose a cause of action---Scope---Contention of the plaintiff was that the plaint could not be rejected under O.VII, R.11, C.P.C. before considering application for leave to defend filed by the defendants---Held, that inherent power of the Banking Court under O.VII, R.11, C.P.C. preceded the statutory obligation of the Banking Court under S.10(8) of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Banking Court had a primary obligation to examine the plaint and reject it, inter alia, if the same did not disclose a cause of action and such power could be exercised at any stage of the suit and it did not matter if an application for leave to defend, or written statement had been filed by the defendant---Power of the Court under O.VII, R.11, C.P.C. read with S.7(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 preceded and prevailed over the power of the Court under S.10(8) of the Financial Institutions (Recovery of Finances) Ordinance, 2001.

Haji Abdul Karim and others v. Messrs Florida Builders (Pvt.) Limited PLD 2012 SC 247; Jewan and 7 others v. Federation of Pakistan through Secretary, Revenue, Islamabad and 2 others 1994 SCMR 826; Haji Allah Bakhsh v. Abdul Rehman and others 1995 SCMR 459; S.M. Shafi Ahmad Zaidi thought Legal Heirs v. Malik Hassan Ali Khan (Moin) through Legal Heirs 2002 SCMR 338; Pakistan Agricultural Storage and Services Corporation Ltd. v. Mian Abdul Latif and others PLD 2008 SC 371; Bank Alfalah Limited v. Iftikhar A. Malik 2003 CLD 363; ARY Traders (Pvt.) Ltd. v. Muslim Commercial Bank Ltd. 2003 CLD 1601; Raja Ali Shan v. Messrs Essem Hotel Limited and others 2007 SCMR 741; Abdul Rehman v. Sher Zaman and another 2004 CLC 1340; Saleem Bhai and others v. State of Maharashtra and others AIR 2003 SC 759; Samar Singh v. Kedar Nath and others AIR 1987 SC 1926; I.T.C. Limited v. Debts Recovery Appellate Tribunal and others (1998) 2 SCC 70; P.R. Sukeshwala and another v. Dr. Devadatta V.S. Kerkar and another AIR 1995 Bombay 227 and Burmah Eastern Ltd. v. Burmah Eastern Employees' Union and others PLD 1967 Dacca 190 rel.

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

----S. 9---Standard of plaint in a suit filed under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Essential requirements enumerated.

Plaint filed in a regular suit has to meet the standards of "pleadings" and "plaint" given under Orders VI and VII of the C.P.C. Plaint under the Financial Institutions (Recovery of Finances) Ordinance, 2001, however, has a special format, requiring a higher standard of precision. The plaint under the special law has to be tailored strictly in accordance with the statutory standards set-out and given in section 9 of the Ordinance i.e., the plaint must bring to the Banking Court a dispute between the "financial institution" and the "customer" only. It must arise out of the contractual relationship indicating default in fulfillment of any "obligations" of "Finance." It must indicate the contractual breach, which is to be monetized and reflected in the Statement of Account (certified in case of a financial institution), which has to accompany the plaint. In addition, the plaint can carry a claim for damages if it arises out of the Finance Agreement between the parties but not tortious claims simpliciter. Such is the standard required of a plaint in a banking suit under section 9(1) and (2) of the Ordinance. The "cause of action" to be pleaded in a plaint under the Ordinance must be fashioned to meet the above requirements. Narration of general allegations of breach without reference to the Finance Agreement or allegation of damages without any monetized quantification of the damage caused or absence of reference to the precise violation of the finance agreement (indicating the relevant clause) does not constitute a plaint that meets the standard of section 9 of the Ordinance.

(e) Administration of justice---

----Non-actionable plaint was a non-starter and in the interest of administration of justice and good judicial governance, it was best if such a plaint, which did not disclose a cause of action, was removed from the docket of the Court at the earliest.

Nasimuddin Siddiqui and another v. United Bank Limited and others 1998 CLC 1718, Citi Bank N.A. v. Syed Shahansha Hussain 2009 CLD 1564; Apollo Textile Mills Ltd. and others v. Soneri Bank Ltd. 2012 CLD 337 and Messrs United Bank Ltd., Karachi v. Messrs Mohibali Tannery Ltd. and 8 others PLD 1994 Kar. 275 rel.

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

----O. VII Rr. 1 & 11---Examination of plaint---Standard of plaint---"Cause of action", meaning and connotation of---Essential elements of "cause of action"---Cause of action was the foundation of a lawsuit and was the "totality of material facts which it was necessary for the plaintiff to allege and prove in order to succeed"---Elements of a cause of action were: first, the breach of duty owing by one person to another; second the damage resulting to the other from the breach---"Cause of action" has been held from the earliest time to include every fact which is material to be proved to entitle the plaintiff to succeed, and every fact which a defendant would have a right to traverse---Test of "cause of action" was that if what the plaintiff stated was taken to be correct, did it entitle him to a relief or not in law---Cause of action meant the infringement of the right which furnished occasion for the action and must be antecedent to the institution of a suit and on the basis of it the suit must be filed---Plaint if it did not disclose a cause of action, a Court will reject such a plaint---Plaint must, therefore, be pregnant with a lawful cause of action for the suit to progress and fructify---For Court it would be meaningless and futile to proceed with a suit if upon examination the court found it to be devoid of any cause of action---Purpose of conferment of powers under O.VII, R.11, C.P.C. was to ensure that litigation which was meaningless and bound to prove abortive should not be permitted to occupy the time of the court---Obligatory upon the courts to judicially assess, ideally at the very beginning, if the plaint disclosed a "cause of action" and if it did not, reject the same without further ado.

PLD 1959 SC 356; (2004) 3 SCC 277; 1991 SCMR 2030; 2000 CLC 63; 1986 Supp SCC 315; (1998) 2 SCC 70 and PLD 1967 Dacca 190 rel.

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

----Ss. 9 & 7---Suit under the Financial Institutions (Recovery of Finances) Ordinance, 2001---Examination of plaint---Standard of plaint---Plaint under S.9 of the Ordinance must disclose a cause of action which spelled out the "default in fulfillment of any obligation with regard to any finance" and for this reason that S.9(2) of the Ordinance prescribed that the plaint must be supported by statement of account, which was applicable to both the parties i.e., customer and the financial institution---Additional requirement existed for the financial institution to get their statement of account certified under the Bankers' Books Evidence Act, 1891 and such requirement of the Statement of Account is to quantify the default complained of under the Finance Agreement(s) entered between the parties---Default or breach, arising out of the contract between the parties or in fulfillment of any obligation with regard to any finance, must be numerically quantified and reflected through the Statement of Account---Section 9(2) of the Ordinance further stated that the plaint shall be supported by all other relevant documents relating to the grant of finance.

Salman Butt, Munawar-us-Salam and Shahzad A. Elahi for Plaintiff.

Mansoor Ali Ghangro and Serjeel Mowahid for Defendant No.1.

Barrister Hassan Nawaz for Defendant No.2.

Salman Akram Raja and Barrister Haroon Dugal for Defendant No.17 (in C.O.S. No.128 of 2012).

Salman Akram Raja and Barrister Haroon Dugal for Defendant No.13 (in C.O.S. No.129 of 2012).

Salman Akram Raja and Barrister Haroon Dugal for Defendant No.10 (in C.O.S. No.133 of 2012).

Salman Akram Raja and Barrister Haroon Dugal for Defendant No.11 (in C.O.S. No.134 of 2012).

Imtiaz Rasheed Siddiqui and Barrister Shehryar Kasuri for Defendants Nos.13 and 31 (in C.O.S. No.128 of 2012).

Imtiaz Rasheed Siddiqui and Barrister Shehryar Kasuri for Defendants Nos.10 and 22 (in C.O.S. No.129 of 2012).

Imtiaz Rasheed Siddiqui and Barrister Shehryar Kasuri for Defendants Nos.8 and 14 (in C.O.S. No.133 of 2012).

Imtiaz Rasheed Siddiqui and Barrister Shehryar Kasuri for Defendants Nos.8 and 17 (in C.O.S. No.134 of 2012).

Akhtar Javaid for Defendant No.5 (in C.O.S. No.128 of 2012).

Muhammad Akram Pasha for Defendant No.16 (in C.O.S. No.128 of 2012).

Muhammad Akram Pasha for Defendant No.12 (in C.O.S. No.129 of 2012).

Muhammad Akram Pasha for Defendant No.10 (in C.O.S. No.134 of 2012).

Ashar Elahi for Defendant No.23 (in C.O.S. No.128 of 2012).

Ashar Elahi for Defendant No.17 (in C.O.S. No.129 of 2012).

Ashar Elahi for Defendant No.16 (in C.O.S. No.133 of 2012).

Salman Faisal, Umer Liaqat and Ms. Farrah Malik for Defendant No.28.

Majid Ali Wajid for Defendant No.20 (in C.O.S. No.128 of 2012).

Majid Ali Wajid for Defendant No.15 (in C.O.S. No.129 of 2012).

Majid Ali Wajid for Defendant No.15 (in C.O.S. No.133 of 2012).

Arshad Nazir Mirza for Defendants Nos.12, 17 and 27 (in C.O.S. No.128 of 2012).

Arshad Nazir Mirza for Defendants Nos.7, 8 and 9 (in C.O.S. No.129 of 2012).

Arshad Nazir Mirza for Defendants Nos.5, 6 and 7 (in C.O.S. No.133 of 2012).

Arshad Nazir Mirza for Defendants Nos.6, 7 and 18 (in C.O.S. No.134 of 2012).

Abdul Hameed Chohan and Imran Muhammad Sarwar for Defendants Nos.4, 8, 9 and 21 (in C.O.S. No.128 of 2012).

Abdul Hameed Chohan and Imran Muhammad Sarwar for Defendants Nos.5, 6 and 16 (in C.O.S. No.129 of 2012).

Abdul Hameed Chohan and Imran Muhammad Sarwar for Defendant No.4 (in C.O.S. No.133 of 2012).

Abdul Hameed Chohan and Imran Muhammad Sarwar for Defendant No.5 (in C.O.S. No.134 of 2012).

Rana Haseeb Ahmad Khan for Defendant No.18 (in C.O.S. No.128 of 2012).

Mrs. Samia Faiz Durrani along with Sh. Nadeem Anwaar for Defendant/First Habib Modarba.

Muhammad Aqeel Malik for Defendant No.4 (in C.O.S. Nos.129 and 134 of 2012).

Kazim Hasan for Defendants Nos.14, 25 and 29 (in C.O.S. No.128 of 2012).

Kazim Hasan for Defendants Nos.18 and 20 (in C.O.S. No.129 of 2012).

Kazim Hasan for Defendant No.11 (in C.O.S. No.133 of 2012).

Kazim Hasan for Defendant No.13 (in C.O.S. No.134 of 2012).

Assisted by Muhammad Amir Munir, Rai Muhammad Khan and Sher Hassan Pervez Research Associates, Research Centre, Lahore High Court, Lahore.

Dates of hearing: 26th and 27th December, 2012.

2013 C L D 2030

[Lahore]

Before Kh. Imtiaz Ahmad, J

Prof. (Retd.) Raja MUHAMMAD ASLAM KHAN---Appellant

Versus

Messrs HOUSE BUILDING FINANCE CORPORATION through District Manager and others---Respondents

F.A.O. No.182 of 2006, heard on 27th May, 2013.

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

----S. 7(4)---Civil Procedure Code (V of 1908) O. VII, R.11---Jurisdiction of Banking Court---Scope---Suit for damages against defendant-Bank based on allegations that plaintiff was illegally arrested by the defendant Bank and its employees---Contention of the plaintiff was that he had obtained a loan from the bank but was illegally arrested, and was, as a result, entitled for damages---Plaint was rejected by Trial Court on the ground that as per S.7 of the Financial Institutions (Recovery of Finances) Ordinance 2001, civil court lacked jurisdiction---Validity---Present suit was not with regard to financial liability but was for damages under allegations that plaintiff had been illegally arrested, was sent to jail and suffered loss of reputation, liberty etc.---Provisions of S.7 Financial Institutions (Recovery of Finances) Ordinance, 2001 were therefore, not applicable to the present case---Suit, if it were for simple damages, then only the civil court had jurisdiction---High Court set aside impugned order and remanded the case to Trial Court---Appeal was allowed, accordingly.

Mehr Ashiq Hussain v. Citi Bank 2006 CLD 167 ref.

Agricultural Development Bank of Pakistan v. Yar Muhammad 2004 CLD 1084 distinguished.

Ghufran Khurshid Imtiazi for Appellant.

Sardar Muhammad Ashfaq Abbasi for Respondents.

Date of hearing: 27th May, 2013.

2013 C L D 2050

[Lahore]

Before Muhammad Khalid Mehmood Khan and Shujaat Ali Khan, JJ

NIB BANK LTD.---Appellant

Versus

Messrs SUNSHINE CLOTH LTD. through Official Liquidators and 4 others---Respondents

E.F.A. No.172 of 2006, heard on 6th February, 2013.

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

----S. 18---Companies Ordinance (XLVII of 1984), S. 316---Recovery of bank loan---Execution of decree---Limitation---Decree holder filed execution application against judgment debtors but the same was dismissed by Banking Court being barred by time---Validity---Dispute between the parties was not that principal judgment debtor was not a company---After winding-up order, decree holder approached Company Court for execution of decree---Company Court entertained execution application and accepted decree holder's claim partially and finalized execution of decree against judgment debtor company---Pendency of execution of decree before Company Court established the fact that decree holder filed execution of decree within three years of passing of decree and did not fail to file execution of decree within three years of the decree---High Court set aside the judgment and remanded the matter to Banking Court for proceedings with execution of decree--- Appeal was allowed accordingly.

Muhammad Sher v. Muhammad Khan PLD 1975 Lah. 1016; Muhammad Jalat Khan and another v. Ghulam Sarwar (deceased) represented by legal heirs) and 3 others 1986 CLC 552 and United Bank Limited Bank Square Branch, Lahore v. Fateh Hayat Khan Tiwana and 7 others 2004 CLD 223 ref.

Ghulam Farid-ud-Din for Appellant.

Sheikh Aftab Ahmad for Respondents.

Date of hearing: 6th February, 2013.

2013 C L D 2080

[Lahore]

Before Mrs. Ayesha A. Malik and Abid Aziz Sheikh, JJ

SAMBA BANK LTD. through Authorized Officers---Appellant

Versus

Messrs SYED BHAIS and others---Respondents

R.F.A. No.523 of 2012, heard on 9th May, 2013.

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

----Ss. 19 & 7---Civil Procedure Code (V of 1908), Ss. 11, 47, O.VII, R.11 & O.XXIII, R.3---Suit for recovery of loan---Rejection of plaint---Res judicata, principle of---Applicability---Scope---Compromise between Bank and customer---Consent decree, execution of---Suit for recovery was decreed in terms of a compromise, after which the Bank filed fresh suit for recovery on the ground that the defendant failed to pay installments in terms of said compromise---Plaint was rejected concurrently on ground of res judicata for the reason that the plaintiff Bank should have instead filed an execution petition under S.47 of the C.P.C.---Contention of the plaintiff Bank was that after passing of the consent decree there were three subsequent agreements between the parties, which gave rise to fresh causes of action, and for which the only remedy was filing of a fresh suit---Validity---Contention of the Bank was not tenable as present case was not one where the total outstanding liability had been repaid or any condition was incorporated in the re-scheduling agreements which went beyond the scope of the previous suit and compromise decree---Plaintiff Bank had not argued that the new principal debtors or fresh guarantors were introduced or old properties were released and new properties were mortgaged or such similar conditions were agreed in the subsequent agreements which were beyond the scope of the suit, compromise decree and outside the jurisdiction of the Executing Court---In absence of any such material change in the compromise decree, the Executing Court would be in a position to execute the decree under S.47 of the C.P.C., and could also take into consideration event of agreements and understandings arrived at between the decree holder Bank and the judgment debtors, even after passing of the compromise decree---Appeal was dismissed, in circumstances.

Ram Das v. Ali Bahadur AIR 1933 Pesh. 53; Lachhumal Morumal v. Atta Muhammad Khan Nabibaksh Khan and others AIR 1939 Sindh 343; Surput Singh and others v. Mahraj Bahadur Singh AIR 1937 Cal. 222; Nagendra Nath Manjumdar v. Kshitish Chandra Ghose PLD 1958 Dacca 179; Ch. Muhammad Nawaz v. Ch. Rahmat Ali and others 1994 SCMR 349; Messrs Amin Cotton Co. Ltd. v. Messrs Muhammad Jamil and Co. PLD 1967 Kar. 795 and Water and Power Development Authority through Chairman WAPDA, Lahore v. Mian Abdul Rauf PLD 2002 Lah. 268 distinguished.

Industrial Development Bank of Pakistan through Vice President IDBP v. Messrs Crystal Chemicals Limited through Director/Guarantor Crystal Chemical Ltd. and 9 others PLD 2009 Lah. 176; Fakir Abdullah and others v. Government of Sindh through Secretary to Government of Sindh Revenue Department Sindh Secretariat Karachi and others PLD 2001 SC 131; Barkat Ullah through Legal Heirs and 12 others v. Wali Muhammad through Legal heirs and 3 others 1994 SCMR 1737; Mrs. Mussarat Shaukat Ali v. Mrs. Safia Khatoon and others 1994 SCMR 2189; Messrs Muhammad Amin Muhammad Bashir Ltd. Karachi v. Messrs Star Oil and Ice Mills Ltd. Multan PLD 1973 Kar. 409; Agricultural Development Bank of Pakistan through Branch Manager Principal Officer v. Muhammad Suleman Khan and others 2011 CLD 523; Muhammad Nazir and others v. Muhammad Arif and others 2006 MLD 187; Ch. Rehmat Ali and others v. Custodian, Evacuee Property, Lahore and others PLD 1966 Kar. 31 and Mussarat Shahnaz v. Suleman Gillani 2003 MLD 1740 rel.

Ashar Elahi for Appellant.

Shahid Ikram Siddiqui for Respondents.

Date of hearing: 9th May, 2013.

2013 C L D 2102

[Lahore]

Before Nasir Saeed Sheikh and Amin-ud-Din Khan, JJ

MUHAMMAD ANWAR and another---Appellants

Versus

NATIONAL BANK OF PAKISTAN through Manager---Respondent

F.A.O. No.369 of 2006, decided on 5th November, 2012.

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

----Ss. 9 & 7---Civil Procedure Code (V of 1908), O. IX, R.9 & S.151---Plaintiff-Bank filed suit for recovery of loan amount---Suit was dismissed for non-prosecution---Application was moved for restoration of the same which was accepted by the Banking Court---Provisions of S.7(a) of the Financial Institutions (Recovery of Finances) Ordinance, 2001, envisaged that the powers of civil court had been conferred upon the Banking Court which were available under the Code of Civil Procedure, 1908---Provisions of S.7(2) of the said Ordinance, provided that Banking Court in the matters to which procedure had not been provided would follow the procedure laid down in the Code of Civil Procedure, 1908---Under the provisions of Civil Procedure Code, 1908, Banking Court could dismiss the suit for non-prosecution and restore the same---Appeal was dismissed.

2006 CLD 52; 2006 CLD 163 and 2002 CLD 341 distinguished.

Israr Ahmad Qureshi and Sh. Aftab Umar for Appellants.

Nemo for Respondent.

2013 C L D 2116

[Lahore]

Before Syed Iftikhar Hussain Shah and Shoaib Saeed, JJ

MANZOOR QADIR---Appellant

Versus

UNITED BANK LIMITED through Branch Manager---Respondent

R.F.A. No.177 of 2012, decided on 10th July, 2013.

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

----Ss. 10 & 9---Contract Act (IX of 1872) S.65---Procedure of Banking Court---Obligation of person who has received advantage under void agreement or contract that becomes void---Scope---Application for leave to defend of defendant was dismissed and suit for recovery was decreed----Contention of the appellant was that he had earlier obtained a business finance facility, which was fully adjusted against a home loan, and nothing was payable against said business finance facility as he obtained a loan-exit form; however, the suit was decreed against liability of the appellant in relation to both the business finance facility and the home loan---Validity---Appellant had admittedly availed the business finance facility which was adjusted against new facility in nature of a home loan, however, there was no denying of the fact that the appellant kept utilizing the previous facility by withdrawing different amounts from the account therefore adjustment of previous facility would not discharge the liability of the appellant---Subsequent facility of home loan also remained outstanding and not even a single debit or credit entry in the statement was rebutted by the appellant---Section 9(2) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 no where stated that in case ancillary requirements were not met, the borrower was absolved from fulfilling the mandatory requirement of S.10(3) of the Ordinance---Section 65 of the Contract Act, 1872 protected the respondent Bank from wrongful advantage taken by any person (of the bank's negligence) and such person was bound to restore the same in its entirety---No illegality existed in the impugned order---Appeal was dismissed, in circumstances.

Ali Rana and Akhwand Aurangzeb Raza for Appellant.

Asher Elahi and Shamrez Nasir for Respondent.

Date of hearing: 10th July, 2013.

2013 C L D 2133

[Lahore]

Before Abdus Sattar Asghar and Shujaat Ali Khan, JJ

FAYSAL BANK---Appellant

Versus

JUSTICE OF PEACE and others---Respondents

Intra Court Appeal No.224 of 2013, decided on 8th July, 2013.

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

----Preamble---Object of enacting law is to provide speedy remedy at one forum to banks for recovery of their finances and for customers of banks to approach same court in case of grievance against banks.

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

----S.20 (4)---Penal Code (XLV of 1860), S.489-F---Criminal Procedure Code (V of 1898), Ss. 22-A & 22-B---Law Reforms Ordinance (XII of 1972), S.3---Intra court appeal---Registration of case---Special and general law---Forum of choice---Scope---Ex-Officio Justice of Peace, on the application of bank directed Station House Officer to register case against borrower as cheque issued by him was dishonoured---Plea raised by bank was that it could file complaint under S.20(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, but was not debarred from getting a case registered under S.489-F, P.P.C.---Validity---In case of special law and a general law on the same subject, which if standing alone would include the same matter and conflict with special law, it was the special law to prevail, since it evinced legislative intent more objectively and specifically than the general law---Intent to legislate S.20(4) of Financial Institutions (Recovery of Finances) Ordinance, 2001, and S.489-F, P.P.C. were altogether different and should not be intermingled---Bank was debarred from getting criminal case registered under S.489-F, P.P.C. to redress its grievance through speedy remedy of his choice---Division Bench of High Court declined to interfere in order passed by Single Judge of High Court, who had rightly set aside the order passed by Ex-Officio Justice of Peace--- Intra court appeal was dismissed in circumstances.

Khizar Hayat and others v. Inspector-General of Police, Punjab, Lahore and others PLD 2005 Lah. 470 rel.

Syed Waseem Haider for Appellant.

2013 C L D 2149

[Lahore]

Before Abdus Sattar Asghar, J

STATE LIFE INSURANCE CORPORATION OF PAKISTAN through Principal Office---Petitioner

Versus

Mst. MAQSOODAN BIBI---Respondent

Civil Revision No.1656 of 2002, decided on 12th June, 2013.

(a) Insurance Act (IV of 1938)---

----Ss. 45 & 39---Qanun-e-Shahadat (10 of 1984), Art. 78---Civil Procedure Code (V of 1908), O. XXII, R. 4---Suit for recovery of insurance money---Incorrect information to insurance company---Proof of signature and hand-writing--- Death of defendant--- Effect--- Contention of plaintiffs-insurance company was that at the time of getting the insurance policy, insured/deceased husband of the defendant had given incorrect information as to his health---Suit was decreed by the Trial Court but the same was dismissed by the Appellate Court---Validity---Insurance Policy of Rs. 75,000 was not denied by the plaintiffs at the time of its payment---Deceased declared that he did not suffer from any serious disease which declaration was verified by the Area Sales Officer---Plaintiffs got conducted an inquiry at the time of second claim of another insurance policy by their investigator who submitted his report that deceased was suffering from blood cancer and liver disease---No inquiry was conducted with regard to claim of Rs.75,000---Defendant's case was that her husband died because of heart attack---Investigator as well as scribe admitted that he had not conducted the inquiry with regard to the claim of Rs. 75,000---Plaintiffs had failed to produce the original record of the hospital and scribe of the documents was not examined by them---Doctor and brother of the deceased who made statements with regard to the disease were not produced---Copies of the documents other than the judicial record could not be received in evidence without proof of signature and handwriting---Investigation report could not be termed as a valid, reliable or conclusive proof of the fact that deceased was suffering from blood cancer or liver disease---Plaintiffs-Insurance company were debarred from making the investigation after expiry of two years---Insurance Policy was effected on 13-4-1981 and policy-holder died on 3-7-1984 whereas death claim was made on 2-8-1984---Investigations were made and report was submitted on 21-4-1985 after four years of issuance of policy---Plaintiffs had failed to establish any false or fraudulent statement on the part of policy-holder---Plaintiffs/Company were not competent to claim refund of death claim---Defendant (wife of deceased) died during pendency of revision petition and same stood abated---Legal representatives of the deceased were not liable to any financial liability of their predecessor who could be liable to the extent of the estate which had devolved upon them---Nothing was on record to show that any estate of the deceased-nominee had devolved upon her legal heirs---Revision could not proceed against legal representatives of the deceased---Revision was disposed of.

Agricultural Development Bank of Pakistan v. Sana Ullah Khan and others PLD 1988 SC 67 rel.

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

----O. XXII, R. 4 & S. 115---Death of defendant---Revision---Applicability---Provisions of O.XXII, R. 4, C.P.C. were not applicable to the revision petitions rather the same were applicable to the suits and appeals only.

Dr. Syed Ali Sajjad Bukhari and 6 others v. Sabir Ali Shah and 4 others 1987 CLC 229 and Pordil and others v. Barkat and others PLD 1953 Pesh. 14 rel.

Sheikh Shahzad Ahmad for Petitioner.

Abdul Latif Chaudhry for Respondent.

Date of hearing: 12th June, 2013.

2013 C L D 2167

[Lahore]

Before Ijaz Ahmad and Ali Baqar Najafi, JJ

FAUJI FOUNDATION through General Manager (Engineering)---Appellant

Versus

Messrs CHANAN DIN AND SONS through Attorney and others---Respondents

Regular First Appeal No.226 of 2011, decided on 3rd July, 2013.

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

----Ss. 14, 20 & 30---Non-completion of work by respondent within agreed time---Award of fresh contract by applicant to a third party for completing remaining work--- Respondent's notice to appellant claiming Rs.1,13,78,207---Reference of dispute between parties to Arbitrator in terms of arbitration clause in contract---Submission of claim by respondent for Rs.2,24,18,619 instead of Rs.1,13,78,207---Award by Arbitrator for differential amount of Rs.4.9 million made rule of court by Trial Court---Validity---According to terms of contract, respondent's claim had to be confined to amount for which he had issued notice to applicant---Neither court nor Arbitrator was competent to enlarge scope of contract or application made under S.20 of Arbitration Act, 1940---Award for differential amount between respondent's contract and such third party's contract was beyond jurisdiction of Arbitrator---Arbitrator's function was not to be influenced by his imagination and opinion, rather he was obliged to apply agreed clauses of contract between parties---High Court set aside impugned judgment and remanded case to Trial Court for its decision afresh in terms of reference.

Fauji Foundation and another v. Shamim-ur-Rehman PLD 1983 SC 457 and Shamim-ur-Rehman v. Fauji Foundation, Rawalpindi and another 1992 SCMR 1496 ref.

House Building Finance Corporation v. Shahinshah Humayun Corporative House Building Society and others 1992 SCMR 19 and Shamim-ur-Rehman v. Fauji Foundation, Rawalpindi and another 1992 SCMR 1496 rel.

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

----Ss. 17 & 30---Making award rule of court---Powers of court---Scope---Court while examining correctness and legality of award could neither act as a court of appeal nor undertake reappraisal of evidence recorded by Arbitrator in order to discern error or infirmity therein.

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

----S. 30--- Award, setting aside of--- "Misconduct of Arbitrator"---Meanings.

In the judicial sense, the misconduct of an Arbitrator means his failure to perform his essential duty resulting in substantial miscarriage of justice between the parties.

Mian Corporation through Managing Partner v. Messrs Lever Brothers of Pakistan Ltd. through General Sales Manager, Karachi PLD 2006 SC 169 and Brooke Bond (Pakistan) Ltd. v. Conciliator Appointed by the Government of Sindh and 6 others PLD 1977 SC 237 rel.

Muhammad Azam Chattha for Appellant.

Waqar-ul-Haq Sheikh for Respondents.

Date of hearing: 6th June, 2013.

2013 C L D 2202

[Lahore]

Before Ijaz Ahmad, J

DUBAI ISLAMIC BANK PAKISTAN LIMITED through Authorized Attorneys---Petitioner

Versus

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

Writ Petition No.2820 of 2012, decided on 28th March, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 143 & 144---Cantonments Act (II of 1924), Ss. 282 & 283--- Constitution of Pakistan, Art. 199---Constitutional petition---Notice issued by Cantonment Board demanding tax from Bank on displaying advertisement boards on its own building---Bank's plea was that non-publication of its name outside its business place was punishable under S.144 of Companies Ordinance, 1984---Validity---Bank on basis of such plea would not be absolved from paying any charges, if due under law---Board without providing any space or service could not demand under law any fee or tax from Bank---Providing spaces was pre-condition for imposition of tax---Board could not entrust duty of collecting charges, fees and taxes to a contractor---Local Council, but not contractor, would be answerable to people---Collection of advertisement fee, if permissible under law, could not be entrusted to a contractor---Board could assign its functions to a contractor requiring application of technology and scientific know-how, which could not be performed by a non-technical employee of a Local Council---Board before demanding charges was legally obliged to provide places of uniform size within its limits for displaying names and boards by persons and companies desiring so---High Court declared impugned notice as illegal and directed Board to provide uniform size of boards while keeping in view safety of life and property of people etc.

Station Commander, Chaklala Cantt. v. Col. (R) Muhammad Abbas Malik 2007 CLC 35; Messrs Ace Quality (Pvt.) through Chief Executive v. Tehsil Municipal Administration, Multan Saddar through Nazim and 3 others 2011 MLD 1987 and Messrs Haidri Beverages (Pvt.) Ltd. v. Office of the Cantonment Board Rawalpindi through its President and another W.P. No. 322 of 2004 ref.

Muhammad Munir Abdullah v. T.M.A. and others 2010 YLR 2543; Messrs Shamim and Co. v. Tehsil Municipal Administration, Multan City through Nazim and 2 others 2004 YLR 366; Arbab Contracting and Co. through Managing Partner v. Tehsil Municipal Administration Multan and 2 others 2005 MLD 1520; 2001 MLD 1987 and Azad Government of the State of Jammu and Kashmir through Chief Secretary Azad Kashmir Government Civil Secretariat Muzaffarabad v. Haji Mir Muhammad Naseer and others 1999 PLC (C.S.) 1173 rel.

Malik Muhammad Siddique Awan for Petitioner.

Mirza Waqas Rauf, Legal Advisor for Respondent No.2.

2013 C L D 2230

[Lahore]

Before Syed Iftikhar Hussain Shah and Shoaib Saeed, JJ

AGRICULTURAL DEVELOPMENT BANK OF PAKISTAN (ZTBL) through Branch Manager and another---Appellants

Versus

ALLAH YAR through Special Attorney and 4 others---Respondents

R.F.A. No.77 of 2008, heard on 4th June, 2013.

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

----S. 22---Appeal---Ex parte judgment without examining documentary evidence---Scope---Suit filed by respondents/ plaintiffs was decreed in their favour by the Banking Court--- Appellants/defendants contended that documentary evidence produced on record had neither been examined nor discussed by the Banking Court---Validity---Mere reference of documents exhibited would not amount to minutely examining the same by the Banking Court---Every bit of evidence had to be discussed and judgment should be based on the basis of evidence---Notwithstanding the fact that there was nothing in rebuttal from the appellants/defendants' side but respondents/plaintiffs had to prove their case on their own strength---Impugned judgment was set aside in circumstances---Case was remanded to the Banking Court with a direction to pass the judgment after discussing every bit of documentary evidence placed on record.

Muhammad Shakeel Akhtar Hashmi for Appellants.

Muhammad Maalik Khan Langah for Respondents.

Date of hearing: 4th June, 2013.

2013 C L D 2250

[Lahore]

Before Abdus Sattar Asghar, J

Raja ABDUL RASHEED---Petitioner

Versus

STATION HOUSE OFFICER, POLICE STATION PEOPLES COLONY, FAISALABAD and 2 others---Respondents

Writ Petition No.25016 and Criminal Original No.2275-W of 2012, heard on 21st February, 2013.

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

----Ss. 20(4), 22 & 7---Penal Code (XLV of 1860), S. 489-F---Criminal Procedure Code (V of 1898), Ss. 22-A, 22-B & 154---Constitution of Pakistan, Art.199---Constitutional petition---Dishonouring of cheque issued by customer for repayment of loan advanced by Bank---Registration of case on application of Bank by order of Additional Sessions Judge/Ex-Officio Justice of Peace---Quashing of F.I.R.---Objective in enacting the Banking Laws was to provide speedy remedy at one forum to the Banks for the recovery of their loans and for the customers of the Banks to approach the same court in case of grievance against the Banks---Objective to legislate S.20(4) of the Financial Institutions (Recovery of Finances) Ordinance, 2001 and S.489-F of P.P.C. being altogether different, should not be intermingled---Order passed by Additional Sessions Judge/Ex-Officio Justice of the Peace and F.I.R. registered on the basis thereof being abuse of process of law were untenable---Constitutional petition was accepted and order passed by Additional Sessions Judge/Ex-Officio Justice of the Peace and F.I.R. registered on the basis thereof were quashed.

Rana Habib ur Rehman Khan for Petitioner.

Ms. Asma Tanvir for Respondent No.2.

Ms. Firdous Butt, A.A.-G. with Muhammad Anwar, ASI.

Date of hearing: 21st February, 2013.

2013 C L D 2263

[Lahore]

Before Ijaz Ahmad and Mamoon Rashid Sheikh, JJ

SOHAIL IKRAM and others---Appellants

Versus

MUJAHID SHAH and others---Respondents

R.F.A. No.133 of 2005, decided on 27th June, 2013.

(a) Tort---

----General damages including for mental torture, claim for---Proof---Standard or method stated.

No standard or method of proof can be laid down with precision in the claims made under the category of general damages including the mental torture. In the suits for damages, the doctrine "Res ipsa loquitur" is to be applied as it is attracted when the things that inflict damage are under the sole management and control of defendant.

Damages may be awarded on account of mental anguish as well.

Sabran Bibi and 7 others v. WAPDA through Chairman, WAPDA House 2003 CLC 885; Sufi Muhammad Ishaque v. The Metropolitan Corporation, Lahore through Mayor PLD 1996 SC 737 and Malik Gul Muhammad Awan v. Federation of Pakistan 2013 SCMR 507 rel.

(b) Tort---

----Damages, suit for---Grave injuries sustained by plaintiff and his family members as a result of rash and negligent driving of car by defendant---Plaintiff claimed Rs.2 Crore as damages for having become disabled to earn his livelihood due to fracture on thigh etc.---Trial Court decreed suit to extent of Rs.5 lac---Validity---Plaintiffs had proved wrongful act of defendant, who instead of providing medical aid to them had decamped from site---Defendant was bound to prove absence of his negligence and rashness in accident, but he failed to do so---According to evidence on record, plaintiff and his family had sustained serious physical injuries and suffered mental torture and agony and had been made to languish for rest of life---Plaintiff as sole earning male member of his family had become disabled permanently and business of his wife had closed down---Plaintiffs remained admitted in hospital for treatment for a considerable time---Plaintiffs had sustained actual and collateral loses as their car had been smashed, job and business had gone and had to lead a depressed life for being worried about future of two minor children---Plaintiffs' claim was result of such wrongful act of defendant and was not remote, thus, they were entitled to be recompensed reasonably---Damages decreed by Trial Court were too meagre to commensurate to injuries, mental agony, torture suffered by plaintiffs and loss of physical disability sustained by first plaintiff---High Court enhanced damages to Rs.15 lacs with mark-up at bank rate on unpaid decretal amount from date of decree of Trial Court and on amount decreed by High Court till its realization.

Mukhtiar Begum v. Karachi Transport Corporation and another 1992 MLD 1711; Hyder and another v. Burmah Shell Oil Company of India, Ltd. and others PLD 1951 Sindh 24; Muhammad Aziz Ullah Qureshi v. Iqbal Umar and others 1982 CLC 1081; Muhammad Younus Khan and 3 others v. Karachi Road Transport Corporation and another 1984 CLC 2830; Sabran Bibi and 7 others v. WAPDA through Chairman, WAPDA House 2003 CLC 885 and Sufi Muhammad Ishaque v. The Metropolitan Corporation, Lahore through Mayor PLD 1996 SC 737 ref.

Pakistan Railways through its General Manager v. Javed Iqbal 1995 SCMR 446 and Malik Gul Muhammad Awan v. Federation of Pakistan 2013 SCMR 507 rel.

S.M. Ayyub Bukhari for Appellants.

Nemo for Respondents.

Dates of hearing: 18th and 20th June, 2013.

2013 C L D 2270

[Lahore]

Before Syed Muhammad Kazim Raza Shamsi, J

TARIQ HAMEED and 2 others---Petitioners

Versus

ADDITIONAL SESSIONS JUDGE and 5 others---Respondents

Writ Petition No.789 of 2012, decided on 2nd July, 2013.

(a) Interpretation of statutes---

----Special law has overriding effect over general law.

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

----S. 7 (b)---Penal Code (XLV of 1860), Ss. 380 & 406---Criminal Procedure Code (V of 1898), S.22-A---Constitution of Pakistan, Art.199--- Constitutional petition---Special law---Banking offence---Registration of case---Petitioner availed finance facility from respondent bank and also pledged bags of rice---Bank alleged that petitioner had misappropriated or stolen the rice bags and sought direction from Ex-Officio Justice of Peace for registration of F.I.R.---Validity---Financial Institutions (Recovery of Finances) Ordinance, 2001, was a special law and had overriding effect over the provisions of Penal Code, 1860---When Financial Institutions (Recovery of Finances) Ordinance, 2001, itself provided procedure for dealing with matters of civil as well as criminal nature, only Banking Court constituted under Financial Institutions (Recovery of Finances) Ordinance, 2001, had jurisdiction to take action upon criminal acts performed by parties---Provision of S.7(b) of Financial Institutions (Recovery of Finances) Ordinance, 2001, created a prohibition in respect of lodging of criminal case under the provisions of Penal Code, 1860---Ex-Officio Justice of Peace was not within his jurisdiction when he ordered for registration of case against petitioners under the provisions of Penal Code, 1860---Bank had no authority to file application under S.22-A, Cr.P.C., nor Ex-Officio Justice of Peace had any jurisdiction, in presence of Banking Court, to order for registration of case against petitioners---High Court set aside the order passed by Ex-Officio Justice of Peace---Petition was allowed in circumstances.

Murshid Ali and 4 others v. S.H.O. Police Station Saddar, Khanewal and another 2011 PCr.LJ 1763; Mian Asim Farid and another v. Industrial Development Bank of Pakistan and 4 others 2005 PCr.LJ 766 and Malik Tariq Mehmood v. Messrs Askari Leasing Ltd. PLD 2009 Lah. 629 ref.

Shaukat Ali and others v. The State and others 2012 CLD 1 and Industrial Development Bank of Pakistan and others v. Mian Asim Fareed and others 2006 SCMR 483 distinguished.

Ch. Muhammad Abdul Qayyum for Petitioners.

Wali Muhammad Khan, A.A.-G.

Hassan Iqbal Warriach for Respondent No.5.

2013 C L D 2284

[Lahore]

Before Abdus Sattar Asghar, J

FAQIR MUHAMMAD---Petitioner

Versus

MUHAMMAD SHAKIL---Respondent

Civil Revision No.3700 of 2011, decided on 14th May, 2013.

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

----S. 3---Defamation---Scope---Libel or slender---Defamation was the publication of a statement which reflected on a person's reputation and tended to lower him/her in the estimation of right thinking members of society generally or tended to make them shun or avoid him/her---Defamation ordinarily took the form of two separate torts i.e. libel and slander---Libel was actionable per se and injury to reputation would be presumed---Three elements which must exist to prove element of libel or slender were that imputation must be defamatory; that it must identify or refer to the claimant and that it must be published/communicated to at leat one person other than the claimant.

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

----Ss. 3, 4 & 9---Defamation---Damages---Contention of the plaintiff was that defendant filed an application before District Police Officer attributing false implication of theft of his cattle against the plaintiff and imputing derogatory statements against him---Suit was dismissed concurrently---Validity---Documentary evidence produced by the petitioner-plaintiff failed to contain any defamatory imputation and any allegation of theft of cattle against the petitioner-plaintiff---Contents of application did not fall within the ambit of libel---Witness of petitioner-plaintiff appearing in the witness box stated that the petitioner-plaintiff bore a good reputation and commanded the honour and respect in the area and he had not stated that the imputation of the respondent-defendant had lowered the respect or reputation of the petitioner - plaintiff in his estimation or in the estimation of right thinking members of the society in general or made him shun to avoid the petitioner-plaintiff---Petitioner-plaintiff had not been able to establish the allegation against the respondent-defendant for causing defamatory imputation amounting to libel or slander to claim damages---No misreading or non-reading of evidence, material illegality or irregularity in the impugned judgments and decrees was found---Revision was dismissed.

Rashid Gill for Petitioner.

2013 C L D 197

[Peshawar]

Before Khalid Mehmood, J

INDUSTRIAL DEVELOPMENT BANK OF PAKISTAN through Vice President/Chief Manager---Appellant

Versus

ZAHID S. SHEIKH and 4 others---Respondents

Criminal Appeal No. 22 of 2011, decided on 1st November, 2012.

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

----S. 20---Criminal Procedure Code (V of 1898), Ss. 265-K & 403---Constitution of Pakistan, Art. 13---Default in payment of bank loan---Double jeopardy, principle of---Applicability---Acquittal before trial---Accused persons availed various loans from complainant bank and on default of payment of loan, bank filed complaint under S.20 of Financial Institutions (Recovery of Finances) Ordinance, 2001---On application filed by accused persons, Trial Court acquitted them in exercise of powers under S.265-K, Cr.P.C.---Validity---All liabilities against alleged misappropriation were admitted by co-accused, who was real beneficiary of the deal---Bank had already filed similar nature of complaint on 17-1-2001 and after its dismissal on 4-9-2002, bank kept mum from the date of dismissal till filing of present complaint---Bank failed to render any reason for filing second complaint after lapse of seven years---No appeal or application against order of dismissal was preferred---Complaint in question also amounted to double jeopardy, which was against S.403, Cr.P.C. and also against Art.13 of the Constitution---High Court did not find any probability of conviction of accused persons for alleged offence, even if prosecution would have allowed to produce evidence against them---Charge levied against accused persons being without substance and groundless, therefore, Trial Court had rightly acquitted accused persons under S.265-K, Cr.P.C., which needed no interference---Appeal was dismissed in circumstances.

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

----S. 265-K---Acquittal before framing of charge---Scope---Trial Court under S.265-K, Cr.P.C. can acquit accused at any stage, if charge against accused facing trial is groundless and there is no likelihood of his conviction---Trial Court can acquit accused even before framing of charge.

Malik Mahmood Akhter for Appellant.

Syed Amjad Ali Shah and Zahid Idrees Mufti for Respondents.

Date of hearing: 1st November, 2012.

2013 C L D 1470

[Peshawar]

Before Miftah-ud-Din Khan and Waqar Ahmad Seth, JJ

MUHAMMAD HUZAFA---Petitioner

Versus

AMERICAN LIFE INSURANCE COMPANY (PAKISTAN) LTD. (ALICO) through Chairman/General Manager/Managing Director and another---Respondents

Writ Petition No.2113 of 2011, decided on 11th April, 2012.

Insurance Ordinance (XXXIX of 2000)---

----S. 162--- Constitution of Pakistan, Art. 199---Constitutional petition---Previous sanction of Securities and Exchange Commission for institution of proceedings under the Insurance Ordinance, 2000---Scope---Petitioner impugned order of insurance Tribunal whereby proceedings initiated by him were stayed till sanction of the Securities and Exchange Commission of Pakistan (Commission) in terms of S.162 of the Insurance Ordinance 2000---Contention of the petitioner was that S.162 was not applicable to proceedings instituted by claimants---Validity---Contention of petitioner had no force as provisions of S.162 of the Insurance Ordinance, 2000 were clear and unambiguous and no proceedings could be conducted without sanction of the Commission---Impugned order of the Insurance Tribunal was perfectly in accordance with law and could not be interfered with---Constitutional petition was dismissed in circumstances.

Khawaja Zafar Jehangir for Petitioner.

M. Jamil Khan for Respondents.

Date of hearing: 11th April, 2012.

2013 C L D 1504

[Peshawar]

Before Rooh-ul-Amin Khan and Ikramullah Khan, JJ

Messrs SONERI BANK LIMITED through AVP/Manager---Appellant

Versus

Messrs AZEEM MATCH (PVT.) LTD. through Chief Executive and 7 others---Respondents

F.A.B. No.54 of 2006, decided on 9th April, 2013.

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

----S. 5(8)---Amicus curiae appointed by Banking Court being a Chartered Accountant, but neither having experience of 10 years at banking side nor worked at senior management level in any Financial Institution of repute or State Bank of Pakistan---Validity---Banking Court as a special court was bound to strictly follow Financial Institutions (Recovery of Finances) Ordinance, 2001 for being a special law---Where law required a thing to be done in a particular manner, then same would lawfully done only if same was done in such manner and not otherwise---Duty of court was to appoint an amicus curiae possessing qualifications and experience as mentioned in S.5(8) of the Ordinance---Appointment of an amicus curiae in a manner other than that as provided in the Ordinance would be a nullity in eyes of law---Such appointment of amicus curiae was illegal, thus, report submitted by him was set aside by High Court in circumstances.

(b) Administration of justice---

----Where law required a thing to be done in a particular manner, then same would lawfully be done only if same was done in such manner and not otherwise.

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

----Ss. 7(2), 9 & 10---Civil Procedure Code (V of 1908), O.VII, R.11---Suit for rendition of accounts against Bank by customer---Framing of issues by Banking Court after granting leave to Bank to defend suit---Appointment of Chartered Account by Court as amicus curiae at the request of parties to sort out as to what was actually due and what had been paid by customer to Bank---Filing of report by amicus curiae and application by Bank for rejection of plaint to be time barred---Filing of objection petitions by Bank on subsequent date against report of amicus curiae and reply by customer to Bank's application under O.VII, R.11, C.P.C. and adjournment of proceedings by Bank for arguments thereon---Suit decreed by court after hearing arguments of parties while leaving such application undecided---Validity---Banking Court after framing of issues and despite availability of list of witnesses had neither provided opportunity to lead evidence nor allowed them to exhibit documents lying on record---Banking Court after granting leave was legally obliged to adopt procedure provided in C.P.C.---Banking Court had not framed legal issue on point of limitation--- Propriety required the court to decide first a pending interlocutory application before passing a final order on the suit---Banking Court, therefore, was obliged to decide such application first and then the suit---Failure of Banking Court to decide such application had vitiated impugned judgment---High Court set aside judgment of Banking Court and remanded case to said court for its decision afresh on merits after framing issue on point of limitation and allowing parties to produce evidence.

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

----Ss. 7(2), 9 & 10---Civil Procedure Code (V of 1908), O.XVI, R.1---Duty of Banking Court after granting defendant leave to defend suit---Scope---Banking Court would be legally obliged to follow procedure laid down in C.P.C. i.e., to frame issues, allow parties to lead evidence thereon and decide each and every issue---Principles.

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

----O.XVI, R.1 & O.XX, R.5---Duty of parties during trial and that of court after framing the issues---Scope.

The trial of a civil suit commences after the framing of issued under Order XVI, C.P.C., which are meant for ascertaining the real dispute between the parties by narrowing down the area of conflict and determining where the parties differ. After framing of issues, the court shall provide opportunity to the parties to lead their respective evidence for enabling the court to render an effective judgment. During the trial, the parties are required to prove the issues and not the pleadings and similarly, the court is bound to decide each and every issue.

(f) Administration of justice---

----Propriety required court to decide first a pending interlocutory application before passing a final order on the suit---Failure of court to decide such application would vitiate final judgment---Illustration.

Naveed Maqsood for Appellant.

Qazi Muhammad Anwar for Respondents.

Date of hearing: 9th April, 2013.

2013 C L D 1525

[Peshawar]

Before Rooh-ul-Amin Khan and Ikramullah Khan, JJ

STATE LIFE INSURANCE CORPORATION and others---Appellants

Versus

Mst. SHUMILA and others---Respondents

F.A.O. No.26 of 2012, decided on 10th April, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 77, 78, 79, 80, 118, 122, 123 & 124---Appeal before High Court---Application for recovery of insurance amount with liquidated damages---Refusal of insurance company to pay such amount to widow on ground that deceased had concealed his ailment while getting life insurance policy---Insurance Tribunal decreed widow's claim partially---Validity---Record showed that before acceptance of insurance policy, competent doctor of insurance company had examined deceased and found him fit medically---Insurance company had regularly received premium from deceased, who remained alive for three years after getting such policy, but had not raised such objection during his life time---Insurance company was not legally entitled to repudiate or avoid insurance contract after lapse of three years and that too even after death of deceased---Insurance company had failed to pay amount of insurance policy to widow within stipulated 90 days, rather had delayed its payment for more than six years---Original amount decreed by Tribunal would not be proper redressal of grievance of widow while keeping in view increase in prices of daily commodities and devaluation of currency---High Court dismissed appeal of insurance company by awarding cost of Rs. 50,000 to widow in addition to decretal amount.

Khalil Khan Khalil for Appellants.

Nemo for Respondents.

Date of hearing: 9th April, 2013.

2013 C L D 1807

[Peshawar]

Before Mazhar Alam Khan Miankhel and Malik Manzoor Hussain, JJ

SHAH JEHAN----Appellant

Versus

FEROZ SHAH and others----Respondents

First Appeal from Order No.16 of 2013, decided on 22nd April, 2013.

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

----Preamble, Ss. 3, 4, 8, 9 & 11---Scope and object of Defamation Ordinance, 2002 was a special law which was promulgated to cope with the defamatory statements, articles published/circulated in electronic and print media---Defamation accruing out of publication or circulation either in written or visual form were actionable.

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

----Ss. 3, 4, 8, 9 & 11---Civil Procedure Code (V of 1908), O.I, R.10 & O.VII, Rr.11, 10---Defamation---Damages---Striking out names of---Scope---Rejection of plaint---Plaintiff filed suit for malicious prosecution and recovery of damages wherein defendants moved application for rejection of plaint and striking out their names---Application was accepted and plaint was returned for want of jurisdiction---Validity---Plaintiff had instituted suit for general damages for malicious prosecution and tortuous acts---Suit could be filed under general law of torts in ordinary court of original jurisdiction and not before special Tribunal constituted under the Defamation Ordinance, 2002---Appeal was dismissed.

Arshad Jamal Qureshi for Appellant.

Nemo for Respondents.

Date of hearing: 22nd April, 2013.

2013 C L D 28

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Mohammed Asif Arif, Commissioner (Insurance)

GHULAM MUHAMMAD MALKANI---Appellant

Versus

DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.57 of 2011, decided on 31st May, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 195, 196(3)(b) & 473---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Powers of the Directors of the company to give relief or to give extension of time for the repayment of outstanding debt---Amount of Rs.33,674,564.00, was receivable from 'spouse' of appellant/Chief Executive of the company---She had traded in shares through her equity trading account which was maintained with the company---Show-cause notice was issued to the appellant under S.196(3)(b) of the Companies Ordinance, 1984, which had restricted the powers of the Directors of a public company to remit, give any relief or give extension of time for the repayment of any debt outstanding against their spouse and minor children without consent of the shareholders in a general meeting---Appellant had provided to the Commission an undertaking by spouse of the appellant regarding repayment of the outstanding amount in a minimum monthly instalment of Rs.100,000---Said undertaking could not over-rule the requirement of law and the consent of the shareholders in general meeting, could not be dispensed with---Penalty imposed on the appellant/Chief Executive Officer, was upheld.

Ghulam Muhammed Malkani, Appellant present.

Abid Hussain, Director for Respondent.

Amir Saleem, Deputy-Director, Department Representative.

Date of hearing: 14th February, 2012.

2013 C L D 58

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Mohammed Asif Arif, Commissioner (Insurance)

OLYMPIA SPINNING AND WEAVING MILLS LIMITED---Appellant

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT)---Respondent

Appeal No.1 of 2010, decided on 13th July, 2012.

Companies Ordinance (XLVII of 1984)---

----S. 492---False statement---Contravention of S.492 of Companies Ordinance, 1984 was not a criminal offence, but contravention of S.492 would attract imposition of penalty by the Commission---Ingredients of criminal offence, need not be established in order to impose penalty under S.492 of Companies Ordinance, 1984, it was sufficient to prove that the contravention was made knowingly.

AIR (36) 1949 Madras 657, [1967] 37 Com Cas. 790; AIR 1929 Bombay 443 and Messrs Gharibwal Cement Limited and others v. Executive Director (Enforcement and Monitoring), Securities and Exchange Commission of Pakistan 2003 CLD 131 ref.

Muhammad Anas Makhdoom, Barrister-at-law and Waqar Monnoo, CEO for Appellant.

Shahzad Afzal, Joint Director (Enforcement) and Haris Bin Tippo, Deputy Director (Enforcement) for Respondent.

Date of hearing: 20th April, 2012.

2013 C L D 82

[Securities and Exchange Commission of Pakistan]

Before Muhammad Ali, Chairman and Muhammad Asif Arif, Commissioner (Insurance)

AZMAT ALI SHEIKH, DIRECTOR/ CHIEF EXECUTIVE OFFICER and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeals Nos. 9 and 10 of 2009, decided on 31st May, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 245 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Securities and Exchange Commission (Appellate Bench Procedure) Rules, 2003, R.17(5)---Company which was required to prepare and file its profit and loss account and balance sheet for relevant quarters within prescribed period having failed to file the same accordingly, a penalty of Rs.20,000 on each Director of the company was imposed---Validity---Reasons for failure of company to comply with provisions of S.245(1)(b) of Companies Ordinance, 1984 like failure of transfer of record pertaining to the affairs of the company, including books of account; and other statutory books by ex-Management; and failure in hiring of right professionals, could not be considered as valid justification for the long delay in filing of the said accounts---Maintenance of books of accounts pertaining to the affairs of the company, was the responsibility of the Management of the company present at the time of issuance of show-cause notice---New management of the company, ought to have instituted appropriate proceedings for transfer of shares in their name---Directors and Chief Executive of the company, were supposed to be well aware of their legal obligations in accordance with statutory requirement and consequences of said default---Company having failed to submit the accounts despite the issuance of show-cause notice and initiation of proceedings it could not be allowed to take a plea that the act was not done knowingly--- Default for first quarter continued for 265 days, while for second quarter for 142 days---Directors of the company in complete disregard to the direction of the authorities were adamant and had not submitted the accounts for the relevant period---Commission on appeal, in exercise of powers under Ss.245(3) and 476 of the Companies Ordinance, 1984 and R.17(5) of the Securities and Exchange Commission (Appellate Bench Procedure) Rules, 2003, enhanced the amount of fine imposed on the Directors of the company to the maximum fine of Rs.100,000 on each Director of the company.

Umar Farooq for Appellants.

Muhammad Tariq Hussain, Director, Departmental representative.

Date of hearing: 14th February, 2012.

2013 C L D 103

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Mohammed Asif Arif, Commissioner (Insurance)

GHULAM AHMED ADAM, CHIEF EXECUTIVE and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.68 of 2009, decided on 5th June, 2012.

Companies Ordinance (XLVII of 1984)---

----S. 492---Making false statement---Executive Director (Enforcement) of the Commission required the company to provide explanation with regard to the recognition of the sale in the accounts not pertaining to the relevant year, in violation of the company's policy---Information provided by the company had revealed that as a result of recognition of sales in contravention of the company's policy, the Profit and Loss Account of the company for the year under review, had been misstated---Show-cause notice under S.492 of the Companies Ordinance, 1984, was issued to the Directors of the company for making misstatement in the accounts---Executive Director (Enforcement) of the Commission, dissatisfied with the response of the Directors of the company, passed impugned order and imposed a penalty of Rs.500,000 on each Director of the company---Directors were further directed to rectify the misstatement and the default---Legislature in its own wisdom had provided penalty under S.492 of the Companies Ordinance, 1984 for making false statement in the financial statements/accounts; and it had been established that in fact a misstatement was made in the accounts---No reason existed to interfere with the findings of impugned order on merits--- Directors of the company had made good the default in the next financial year and had complied with the requirements of law--- Keeping in view, the compliance to the law and corrective measures, taken by the Directors, penalty imposed on the directors, was reduced to sum of Rs.2,50,000 on each director.

Messrs Habib Bank Limited v. Messrs Schon Textile Limited 2010 CLD 1819 rel.

Muhammad Waseem, FCA and Iqbal, FCA for Appellants.

Shahzad Afzal, Joint Director, Enforcement and Haris Bin Tippo, Deputy Director, Enforcement, Departmental representative.

Date of hearing: 20th April, 2012.

2013 C L D 158

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

MUHAMMAD AAMIR: In the matter of

Show Cause Notice No.1(18)IT/MSW/SMD/1(5)2004/10 dated 20-1-2012, decided on 31st May, 2012.

(a) Securities and Exchange Ordinance (XVII of 1969)---

----S. 15-E---Insider Trading---While reviewing the trading data of Modarba and Bank during the review period, it was noted that trading by the respondent in certain illiquid scrips through his different trading accounts, was in correlation with the trading of Modarba and the Bank; it was noted that in majority of the instances, hebought the scrip prior to the purchase by Modarba and the Bank; and subsequently sold all or major portion of the same to the Modarba and the Bank and the rest in the market at higher price, around the same time Modarba and the Bank started buying the shares, which resulted in considerable gain to him---During the period from July 1, 2008 till January 31, 2011, he undertook bulk trading activities in 147 scrips---Out of said 147 scrips traded by him during the period, his trading in only 22 scrips as given in show-cause notice, matched with either Modarba or the Bank---Record established that during the Review Period, he was an active investor/trader in the market---Data provided by him regarding his trading during the review period corresponded to the data available with the Commission---Neither in written reply nor during the course of hearing, he himself or his representative had denied execution of any of the transactions mentioned in show-cause notice---Contention of the respondent that due to his bulk trading, a minor percentage of his trading matched with Modarba and the Bank, which was insignificant, immaterial and completely accidental, and unintentional, was not true---No documentary evidence was provided, which could prove that the payments as mentioned in the show-cause notice, were made in connection with the business mentioned in Partnership Deed---Mere presentation of the Partnership Deed and payment through Banking Channel, did not prove that payments made, were the result of any other business transaction---Person who was Equity Investment Portfolio Manager at Modarba and was also looking after Investment Portfolio of the Bank, by virtue of his position, was in possession of material inside information regarding the investment decisions of Modarba and the Bank---Respondent was held guilty of contravention of S.15-(A)(1) and in exercise of the powers under S.15-E of Securities and Exchange Ordinance, 1969, respondent was directed to deposit a fine of Rs.4.500 million (Rupees Four million Five Hundred Thousands only).

Central Insurance Company and others v. The CBR and others 1993 SCMR 1232 and Mir Muhammad Idris v. The Federation of Pakistan and others Constitutional Petition No.58 of 2010 ref.

(b) Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 15-A, 15-D & 15-E---Prohibition of Insider Trading---Purpose and intent behind the prohibition of Insider Trading was to prevent a person from making a gain, or avoiding a loss by trading in listed securities based on inside information relating to such listed securities before the issuer of such securities disclose such information as required by S.15-D of Securities and Exchange Ordinance, 1969---In order to come within the ambit of S.15-A of Securities and Exchange Ordinance, 1969, the insider information, the insider and security should relate directly to the issuer.

Shahid Mehmood Tabassum representing Muhammad Aamir.

Muhammad Atif Hameed, Deputy Director, SECP and Mian Ahmad Ibrahim, Deputy Director, SECP assisting the Director/HOD (MSCID).

Date of hearing: 30th March, 2012.

2013 C L D 211

[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(03)/Wash/KSE/MSW/SMD/ 2009/dated 6-6-2012, decided on 25th June, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---"Wash Trades"---Examination of the trading data of Karachi Automated Trading System of Karachi Stock Exchange, showed that the company bought and sold shares in such a way that orders for buy and sell matched with each other; and did not result in any change in ownership of the shares---Said transactions fell within the meaning and ambit of the term "Wash Trades" which had created false and misleading impression in the market and was a violation of the regulatory framework---Unfair trade practice like "Wash Trades" were detrimental for the development of the market and damaged the market integrity---Execution of such trades had shown that the company had failed to maintain high standard of integrity and had been unsuccessful in exercising due care, skill and diligence in conduct of its business---Company was established to have contravened the provisions of the Code of Conduct of Brokers Rules, 2001---Violation of the Rules and Regulations was a serious matter which could even lead to suspension or cancellation of registration of the company by the Securities and Exchange Commission---Company having assured to adopt cautious approach in future, taking a lenient view in the matter, a penalty of Rs.100,000 was imposed on the company---Company was strongly advised by the Commission to take immediate measures and put in place proper checks in its Order Management System to restrict such orders, which could result in execution of "Wash Trades"---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 serious punitive action under the law.

Muhammad Jaffer, Authorized Representative, Pearl Capital Management (Pvt.) Limited.

Osman Syed, Deputy Director, SECP assisting the Director (MSCID).

Date of hearing: 25th June, 2012.

2013 C L D 220

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Mohammed Asif Arif, Commissioner (Insurance) RAZA KULI KHAN KHATTAK, CHAIRMAN and 9 others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.26 of 2008, decided on 5th June, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 208 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Investment in associated companies and undertaking---Extending abnormal credit period to associated companies for making the outstanding payment---Company extended credit to its associated companies with either no recovery or delayed recovery, which could not be termed as normal trade credit--- Executive Director of Commission took a lenient view, after being assured during the hearing that the company would receive substantial amount against receivables from associated companies by specified date and through impugned order imposed penalty of Rs.50,000 on each Director of the company---Debt collection period from the associated companies was 312 days as opposed to 33 days for other trade debts---Directors of the company had extended abnormal credit period to associated companies for making the outstanding payment---Argument of the Director's representative that sale to the associated concern was not material in terms of total sale, was not acceptable---Directors of the company in fact made investment in the associated companies under S.208 of the Companies Ordinance, 1984 and they ought to have taken approval from the shareholders before making the said investment---Impugned order, could not be interfered with and same was upheld.

Gharibwal Cement v. Executive Director 2003 CLD 131 rel.

Afzal Munif, FCA, M. Moin Khan, FCA and Saleem Baig, CFO for Appellants.

Shahzad Afzal, Joint Director (Enforcement) and Haris Bin Tippo, Deputy Director (Enforcement), Departmental Representative.

Date of hearing: 20th April, 2012.

2013 C L D 261

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director

CAPITAL INSURANCE COMPANYLIMITED: In the matter of

Show Cause Notice dated 18th January, 2012, decided on 12th July, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11, 28 & 156---Failure to comply with provisions relating to "minimum paid up share capital" and "requirements as to capital"---Company had prima facie contravened provisions of Ss.28 & 11(1)(a) of Insurance Ordinance, 2000 relating to the minimum paid up capital requirement---Directors and Chief Executive of the company, in addition to the day to day running of the company and the management of its business, also had some fiduciary duties i.e., duties held in trust and some wider obligations imposed by statute on them and the company---Directors and the Chief Executive of the company were supposed to be well aware of their legal obligation; and the company's legal obligation in the said matter along with the consequences of the said default---Company had not complied with the statutory requirements pertinent to the minimum paid up share capital---Company was amongst the oldest and profit-making insurance companies in Pakistan---Contravention, in question did not appear to have affected the rights and interests of any of its stakeholders strictly during the period of non-compliance---Securities and Exchange Commission, in exercise of powers conferred on it under S.156 of the Insurance Ordinance, 2000, imposed a penalty of Rs.100,000 for such default/continuous default of provisions of Ss.11(1)(a) & 28 of the Insurance Ordinance, 2000---Chief Executive, the Directors and the company itself was warned and advised to exercise due caution in future while complying with the requirements of the law.

Muhammad Ishaq Butt, Director Capital Insurance Company Limited.

Date of hearing: 16th February, 2012.

2013 C L D 273

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Mohammed Asif Arif, Commissioner (Insurance)

KHAWAR ALMAS KHAWAJA, CHIEF EXECUTIVE OFFICER---Appellant

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.42 of 2012, decided on 13th July, 2012.

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

----S. 33--- Companies Ordinance (XLVII of 1984), Ss.204-A(2) & 498---Company having failed to appoint an independent share Registrar in terms of S.204-A(2) of the Companies Ordinance, 1984, Executive Director (Enforcement) of the Commission vide impugned order imposed penalty of Rs.200,000 on the company, which had filed appeal against impugned order---Share Registrar was appointed for good corporate governance who was responsible for keeping the company's register of share-holders up-to-date, the distribution of share-holder communications and administering the payment of dividends etc.---Contention of the company that default in appointment of independent share Registrar continued from the previous management; and that present management was not aware of the legal requirement, was repelled as ignorance of law was no excuse---One was bound by a law, even if one did not know of it---Management of the company was responsible to be vigilant regarding the applicable laws and it ought to comply with the laws at all times---Chief Executive Officer of the company was responsible for conduct of affairs of the company and it was his responsibility to ensure that all legal requirements were complied with---Executive Director (Enforcement) of the Commission had already taken a lenient view in the impugned order by imposing a penalty of Rs.200,000 only on the company under S.498 of the Companies Ordinance, 1984 instead of the maximum penalty of one million rupees on every Director of the company---Impugned order could not be interfered with in appeal, in circumstances.

Muhammad Aslam Awan, FCA for Appellant.

Amina Aziz, Director (Enforcement) and Rohail Ahmed Abbas, Assistant Director (Enforcement) Departmental Representative.

Date of hearing: 23rd May, 2012.

2013 C L D 287

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SM) and Mohammed Asif Arif, Commissioner (Insurance)

Mian SHAHZAD ASLAM, CHIEF EXECUTIVE/DIRECTOR and 6 others---Appellants

Versus

COMMISSIONER (CLD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeals Nos.13, 14, 17, 19, 21, 22 and 25 of 2011, decided on 13th July, 2012.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.245 & 492---Filing false half-yearly accounts statement by the company---Half-yearly accounts of the company for relevant period filed with the Commission pursuant to the provisions of S.245 of the Companies Ordinance, 1984, were purportedly reviewed by the Auditors who had apparently given clean conclusion of said accounts---Opinion of the Auditors was inconsistent with the opinion expressed by previous Auditors---Auditors had never issued a review report on the accounts of the company, which had raised serious concerns about the authenticity of the Accounts filed with the Commission---Commissioner (CLD) passed impugned order and imposed penalty of Rs.500,000 on the Chief Executive Officer and Rs.50,000 each on the Directors of the company---Default committed by the company was admitted, but it was contended that penalty imposed was too harsh, which could be set aside---Validity---Under provisions of S.492 of the Companies Ordinance, 1984, a company was strictly prohibited from making false statement or omitting any material fact knowing same to be material---Directors in the case had attempted to circumvent the legal provisions requiring submission of reviewed half yearly accounts---Directors had tried to mislead the Regulator, the shareholders and the creditors by filing un-reviewed half yearly accounts---Negligence of the Directors, could not be accepted as an excuse for such deliberate effort to deceive a vital regulatory compliance requirement---Directors had in fact demonstrated an unprofessional and irresponsible attitude by submitting false information purporting same to be authentic---Default under S.492 of the Companies Ordinance, 1984 was established to have been committed by the appellants/Directors---Penalty had been imposed on the Chief Executive Officer and the Directors in their personal capacity---Lenient view on the penalty could not be taken on ground that the company had poor financial health---Impugned order was not interfered with.

Maqbool Hussain Bhutta, Director for Appellant.

Shahzad Afzal, Joint Director and Amir Saleem, Deputy Director, Departmental Representatives.

Date of hearing: 23rd May, 2012.

2013 C L D 327

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SMD) and Mohammed Asif Arif, Commissioner (Insurance)

HAMID TEXTILE MILLS LIMITED and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.43 of 2010, decided on 13th July, 2012.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.245 & 476---Failure to submit quarterly accounts within stipulated time---Company, in terms of the provisions of S.245 of the Companies Ordinance, 1984, was required to prepare and transmit its quarterly accounts within one month of the close of relevant quarter to shareholders, stock exchanges, Registrar and the Commission; but it did not file the accounts within prescribed time and filed the same after a delay of 20 days from the close of prescribed period---Executive Director (Enforcement) of the Commission, vide impugned order imposed a penalty of Rs.25,000 each on the Chief Executive Officer and Directors of the company---Validity---Preparation and circulation of quarterly accounts was one of the statutory obligations of the management of the company, which was required to make serious efforts to ensure compliance with the provision of law---Company's compliance record had not been exemplary, which had shown that it had no regard to the provisions of Companies Ordinance, 1984---Plea of the company was that the quarterly accounts for relevant year could not be prepared due to delay in completion of half yearly accounts---Said plea was not tenable on the ground that the quarterly accounts were submitted before the submission of half yearly accounts---Default of the company stood established, in circumstances---Executive Director of the Commission had already taken a lenient view by imposing penalty of Rs.25,000 when the maximum penalty could have been Rs.100,000 on Chief Executive Officer and Directors---In absence of any ground to interfere with the impugned order, appeal was dismissed.

Muhammad Aslam Awan, FAC for Appellant.

Amina Aziz, Director (Enforcement) and Rohail Ahmed Abbas, Assistant Director (Enforcement), Departmental Representative.

Date of hearing: 23rd May, 2012.

2013 C L D 357

[Securities and Exchange Commission of Pakistan]

Before Imtiaz Haider, Commissioner (SM) and Mohammed Asif Arif, Commissioner (Insurance)

YOUNUS DAWOOD, CHIEF EXECUTIVE, M/S. DYL MOTORCYCLE LIMITED and 4 others---Appellants

Versus

DIRECTOR (ENFORCEMENT)/ADDITIONAL REGISTRAR OF COMPANIES, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.53 of 2010, decided on 13th July, 2012.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.214, 216 & 476---Failure of the Directors of the company to disclose the nature of their concern and interest in the contract or arrangement in the meeting of Board of Directors---Directors had participated in the meeting to form quorum at the time of discussion and voted for equity investment in associated company in contravention of provisions of Ss.214 & 216 of the Companies Ordinance, 1984---Director (Enforcement) of the Commission vide impugned order imposed penalty of Rs.2,000 each on the Chief Executive and Directors of the company---Validity---By virtue of S.214 of the Companies Ordinance, 1984, Director of a company having concern or interest in a contract or arrangement made by the company was required to disclose the direct interest and was not allowed to take part in the discussion or vote on the contract or arrangement in which he was interested---Presence of interested Director was not counted for the purpose of forming quorum of a Board of Director's meeting at which such contract or arrangement was discussed in terms of S.216 of the Companies Ordinance, 1984---Directors of the company had failed to comply with the provisions of S.214 of the Companies Ordinance, 1984---Company had altered the statement of material facts by adding para concerning the Director's interest---Penalty was rightly imposed on the Directors on their failure to comply with the provisions of S.214 of the Companies Ordinance, 1984---In absence of any reason to interfere with impugned order, appeal was dismissed, in circumstances.

K.D. Rajani for Appellant.

Shahzad Afzal, Joint Director and Haris Bin Tipoo, Deputy Director, Departmental Representatives.

Date of hearing: 20th April, 2012.

2013 C L D 566

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSCID)

Messrs FIRST NATIONAL EQUITIES LIMITED, MEMBER KARACHI STOCK EXCHANGE (GUARANTEE) LIMITED: In the matter of

Show Cause Notice No.4/BRK-176/SE/SMD/2004, dated 11th May, 2012, decided on 10th July, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6, 18 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3, 4 & 7---Securities and Exchange Rules, 1971, Rr.3, 5, 7, 8 & Third Schedule---Deficiencies in calculation of Net Capital Balance (NCB)---Securities and Exchange Commission, ordered an inspection of the books and records required to be maintained by the company---Report submitted by Inspection team highlighted major deficiencies in the calculation of Net Capital Balance of the company---Record had shown that, if Net Capital Balance was calculated in strict compliance with the requirements of Securities and Exchange Rules, 1971, same would have been in negative thereby implying that the company by submission of false Net Capital Balance had not only attained the certificate of registration as broker, but also much higher trading exposure thereby increasing the systemic risk in the market---Net Capital Balance as calculated by the company was not in accordance with Third Schedule of Securities and Exchange Rules, 1971 and company, by submission of overstated Net Capital Balance had submitted statement and given information, which it had reasonable cause to believe to be false or incorrect in material particular in violation of S.18 of Securities and Exchange Ordinance, 1969---Violation of Ordinance, Rules and Regulations, was a serious matter---In view of regulatory violations, in exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969, the company was directed to deposit a sum of Rs.500,000 (Rupees Five Hundred Thousand) to the Commission by way of penalty---Company was further directed to ensure full compliance with the Ordinance, rules, regulations and directives of the Commission in future.

Ali A. Malik, Chief Executive Officer, Ijaz Mahmood Ch., Legal Counsel and Asif Mumtaz Mian, Company Secretary Authorized Representatives of First National Equities Ltd.

Ms. Saima Shafi Rana, Deputy Director (BR&ICW) representing (BR&ICW).

Date of hearing: 5th June, 2012.

2013 C L D 650

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director

Messrs EAST WEST LIFE ASSURANCE COMPANY LIMITED: In the matter of

Show-Cause Notice dated 5th July, 2012, decided on 28th September, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(F), 12,' 59-A & 156---Failure to meet criteria for sound and prudent management---Onsite Inspection of the Insurance Company was conducted and Inspection team uncovered several internal control weaknesses in the operation of the company, which had provided opportunity to the ex-employees to indulge in fraudulent activities---Besides control weaknesses, there was also conflict of interest---Board of Directors of the company and its Audit Committee, had not paid attention towards the development and implementation of proper system of internal control--:Audit Committee did not take serious steps towards strengthening the Internal Audit Department and had not paid any consideration towards the development of the operational manuals and guidelines---No proper investment decision-making mechanism existed in the company nor was there any Investment Committee---Surrender value calculate system of the company needed improvement as for a single policy at a point of time, the system was simultaneously showing that particular policy as lapse/auto surrender and in force which discrepancy could lead to wrong calculation of cash value of the policies---In view of said facts, it prima facie appeared that the internal control system of the company was very weak, particularly due to the absence of operational policies, procedures and manuals that were vital for carrying out the operations of the company which indicated that the business of the company had not been carried out with due care and professional skills as required by the relevant provisions of Ss.11, 12 of the Insurance Ordinance, 2000---Company was not aware of the activities of its employees, including' the departmental heads, whether they were in any way, involved in any other business activity---Directors of the company, in addition to the day to day running of the company and the management of its business also had some 'fiduciary' duties i.e., duties held in trust; and some wider duties imposed by statute; and breach of those statutory duties would usually be a criminal offence, punishable by fine or imprisonment---Directors, in circumstances, were gauged against a higher standard of accountability which required them to be vigilant and perform their duties with due care---Directors were supposed to be well aware of their legal obligations in connection with statutory requirements of Ss.11(1)(F), 12 of Insurance Ordinance, 2000---Default of Ss.11 & 12 of the Insurance Ordinance, 2000 having been established, penalty as provided under S.156 of the Insurance Ordinance, 2000, could be imposed on the company---Commission, instead of imposing the maximum penalty, imposed a nominal fine of Rs.500,000 due to the fact that the company had not complied with the provisions of Ss.11(1)(F) & 12 of the Insurance Ordinance, 2000 by not establishing and maintaining proper system of internal controls all ' across the company.

Maheen Yunus, Managing Director/Chief Executive and Imran Dodani, Chief Operating Officer for the Company.

Date of hearing: 13th September, 2012.

2013 C L D 706

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director (Insurance)

Messrs EFU GENERAL INSURANCE LIMITED: In the matter of

Show-Cause Notice dated 24th July, 2012, decided on 28th September, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(f), 12, 59-A & 156---Failure to meet criteria for sound and prudent management by Insurance Company---Onsite inspection revealed that company had no investment Policy, nor was there any Investment Committee or department to make investment decisions---Inspection Team of the Commission was not provided with any research report or rationale on the basis of which investment decisions were made, which had resulted into loss on investment---Transactions in the company had not been carried out with due care and professional skill---Inspection Team had observed that no policies and operational manual existed in the company---Company also appeared to have violated the provisions of Code of Corporate Governance, which required that the Board of Directors would formulate significant policies and establish system of sound internal control that were implemented effectively at all levels of the company---Prima facie, it appeared that the internal control system of the company, was very weak particularly due to the absence of major policies, procedures and manuals that were vital for carrying out the operation of the company which had indicated that the business of the company was not being carried out with due care and professional skills as required by the relevant provisions of Ss.11 & 12 of the Insurance Ordinance, 2000---Directors of the company, in addition to the day to day running of the company, and the management of its business, also had some 'fiduciary' duties i.e. duties held in trust, and some wider duties imposed by statute; and breach of those statutory duties, would usually be a criminal offence---Directors were gauged against a higher standard of accountability, which required them to be vigilant and perform their duties with due care---Directors, in the present case, had failed to perform their said duties---Directors were supposed to be well aware of their legal obligations in connection with statutory requirements of Ss.11(1)(f) & 12 of Insurance Ordinance, 2000, and were required to put in place formal policies and procedures, covering all the operational aspects and decision making---Default had also been accepted by the company---Commission, in exercise of powers under S.156 of Insurance Ordinance, 2000, instead of imposing the maximum penalty, took lenient view and condoned the company, issuing a stern warning that in case of similar non-compliance in future a strong action against it would be taken.

Altaf Qamruddin Gokal, Chief Financial Officer and Company Secretary.

Date of hearing: 12th September, 2012.

2013 C L D 729

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

INDUS DYING AND MANUFACTURING COMPANY LIMITED: In the matter of

Show Cause Notice No.S.M(B.O.)C.O.222/4(2641)12 dated 31-7-2012, decided on 15th November, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 222 & 224(4)---Failure to file return of beneficial ownership within stipulated period---Company being a beneficial owner of more than ten per cent of its ordinary shares, was required to file return of beneficial ownership within the period stipulated under S.222 of the Companies Ordinance, 1984, but it failed to discharge its obligation which attracted penal provision contained in S.224(4) of the Ordinance---Company had admitted its default, with the contention that default was not committed wilfully and knowingly and assured for timely filing of said returns of beneficial ownership in future and requested to condone the default in question---Record had revealed that company had filed the return promptly on receipt of letter from the Commission---Late filing of the return being not wilful, a lenient view of the matter was taken and the company was strictly warned to ensure timely compliance of S.222 of the Companies Ordinance, 1984.

Ahmed Faheem Niazi for Respondent.

Muhammad Farooq, Joint Director (SMD) assisting the Director/HOD (SMD).

Date of hearing: 13th November, 2012.

2013 C L D 740

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director (Insurance)

Messrs EFU GENERAL INSURANCE LIMITED: In the matter of

Show-Cause Notice dated 24th July, 2012, decided on 28th September, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 45, 59-A & 156---Failure to maintain proper books and records---During course of onsite inspection, the Inspection team was not given access to various claim files relating to motor claims---Said claim files pertained to the claims paid to the workshop, and the amount of claims paid to those workshops were aggregating to more than Rs.1,869,382---Survey reports of said claims were also not available on the company's Internet portal---Claim files were found missing from the record of the company---Misplacement of entire claim record of three particular workshops, had raised serious doubts on genuineness and authenticity of all those claim payments---Missing of 116 files, had shown inappropriate maintenance of records by the company---Company, in circumstances, had violated the provisions of S.45 of Insurance Ordinance, 2000---Directors of the company had some 'fiduciary' duties i.e. duties held in trust and some wider duties imposed by statute---Directors were gauged against a higher standard of accountability, which required them to be vigilant and perform their duties with due care---Directors were supposed to be well aware of their legal obligations in connection with the said statutory requirements of S.45 of the Insurance Ordinance, 2000 and required to put in place a proper mechanism of maintenance of all books and record of the company, but they failed to do so---Default of S.45 of Insurance Ordinance, 2000 was established, and the company had also accepted its default---Commission, in exercise of powers under S.156 of Insurance Ordinance, 2000, instead of imposing the maximum penalty, imposed fine of Rs.500,000---Company was also directed to thoroughly probe into the issue of missing files and genuineness of the claims paid, and to take immediate measures for recovery of those missing files.

Altaf Qamruddin Gokal, Chief Financial Officer and Company Secretary.

Date of hearing: 12th September, 2012.

2013 C L D 812

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

HABIB BANK LIMITED: In the matter of

Show Cause Notice No.Misc./MSW/SMD/1(5) 2004/1645 dated 8th November, 2012, decided on 30th November, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22(c)---Listing Regulations of Karachi Stock Exchange, Regln.16---Failure to follow the requirements of Regulation---Regulation 16 of the Listing Regulations of Karachi Stock Exchange required that a listed company would communicate to the Exchange all decisions of its Board of Directors relating to cash dividend, bonus issue, right issue or any other entitlement or corporate action and other price sensitive information in the manner notified by the exchange from time to time---Company, in the present case, had failed to follow the requirements of said Regulations---Company, prima facie had contravened Regulation 16 of the Listing Regulations, which in turn was a violation of S.22 of the Securities and Exchange Ordinance, 1969---Company in its written statement, and its representatives, accepted that company had failed to comply with the Listing Regulations---Company was a very well reputed Commercial Bank and it was one of the top performing company listed at Karachi Stock Exchange---Company was expected to have placed proper system and adequate internal controls which could prevent the occurrence of such lapses---Company needed to review and further strengthen its internal control and procedures and exercise more prudence and care while disseminating its financial results in future---Violation of Securities and Exchange Ordinance, 1969, was a serious matter, but in view of the fact that it was an inadvertent mistake due to human error, acknowledgment of mistake and prompt action taken by the company to rectify its mistake, no abnormal trading volume and volatility in share price, previous compliance record of the company; and assurance by the representatives that such violation would not occur in future, Commission, did not take penal action against the company---Commission taking a lenient view, a stern warning was issued to the company to ensure full compliance of all applicable rules and regulations in the future for avoiding any punitive action under the law.

Ayaz Ahmed, Chief Financial Officer and Ms. Nausheen Ahmad, Company Secretary representing Habib Bank Limited.

Muhammad Atif Hameed, Joint Director assisting Director/HOD (MSCID)

Date of hearing: 21st November, 2012.

2013 C L D 831

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director (Insurance)

Messrs EFU GENERAL INSURANCE LIMITED: In the matter of

Show-Cause Notice dated 24th July, 2012, decided on 28th September, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 32(2)(k) & 156---Inclusion of deposits received as security against guarantees as admissible assets---Insurance---Company in its statement of assets for solvency purposes, had included the deposits received as security against guarantees as admissible assets in violation of S.32(2)(k) of Insurance Ordinance, 2000---Directors of the company, in addition to the day to day running of the company, and the management of its business, also had some 'fiduciary' duties i.e., duties held in trust and some wider duties imposed by statute; and breach of those statutory duties, would be a higher standard of accountability which required them to be vigilant and perform their duties with due care---Directors, in the present case, had failed to perform their duties with due care and prudence---Directors were supposed to be well aware of their legal obligations as required by the Insurance Ordinance, 2000 under S.32(3), and were required to ensure compliance with the clear wordings of S.32(2) of Insurance Ordinance, 2000---Legitimate inference was that the default was committed---Commission in exercise of powers conferred under S.156 of Insurance Ordinance, 2000 instead of imposing the maximum penalty, imposed a nominal fine of Rupees one hundred thousand only---Company was issued a stern warning that in case of similar non-compliance in future, strong action would be taken against it.

Altaf Qamruddin Gokal, Chief Financial Officer and Company Secretary for the Company.

Date of hearing: 12th September, 2012.

2013 C L D 846

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director (Insurance)

Messrs KHZ ASSOCIATES (PRIVATE) LIMITED: In the matter of

Show-Cause Notice dated 22nd June, 2012, decided on 18th September, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss.111(3) & 112(3)(6)---Insurance Rules, 2002, R.19(3)---Failure of licensed surveyor to comply with conditions of licence---Survey reports submitted by the Survey company contained some misleading text---Company, in circumstances, had contravened the provisions of Ss.111 and 112(3) of Insurance Ordinance, 2000 by issuing survey reports for which it did not have a registered authorized surveying officer---Directors of the company, in addition to the day to day running of the company, and the management of its business, also had some 'fiduciary' duties i.e. duties held in trust and some wider duties imposed by statute---Breach of those duties would be criminal offence, punishable by fine or imprisonment---Directors were gauged against a higher standard of accountability which required them to be vigilant, and perform their duties with due care---Directors, in the present case, 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 the said statutory requirements of Ss.111 and 112 of Insurance Ordinance, 2000, it could be inferred that the default was committed knowingly and wilfully---Default of Ss.111 and 112(3)(c) of Insurance Ordinance, 2000, which was established, was also accepted by the company---Commission in exercise of power conferred under S.112(6) of Insurance Ordinance, 2000, cancelled the insurance surveying licence of the company.

Khalid Mahmud, Chief Executive Officer for the Company.

Date of hearing: 24th July, 2012.

2013 C L D 875

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

FALKI CAPITAL (PVT.) LIMITED, BROKER ISLAMABAD STOCK EXCHANGE LIMITED: In the matter of

Show-Cause Notice No.1(07) BS/KSE/MSW/SMD/2011/04 dated 24th September, 2012, decided on 8th November, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---Engagement of the client of the Brokerage company in selling and then squaring his position in different scrips---Trading data of Stock Exchange for the relevant period, showed that client of the company had been engaged in selling and then squaring up his position in different scrips through trading as Inter-exchange client---Said client placed the sale orders without having pre-existing interest---Company was supposed to monitor all trading activities being carried out by its clients in order to track and prevent any transaction being made in violation of any applicable rules and regulations---Company had failed to exercise due care, skill and diligence in conduct of its business and had also failed to abide by the provisions of the Rules and Regulations, issued by the Commission from time to time---Company, in circumstances, had violated the clause A(2) & (5) of the Code of Conduct set forth under the Third Schedule of the Brokers and Agents Registration Rules, 2001 and which in turn was violation of R.12 of the Brokers Rules, 2001 read with its R.8---Violation of the Rules and Regulations was a serious matter which entitled the Commission to suspend the membership of the company, but the Commission elected not to exercise its power and in exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.25,000.

Brig. (R.) Fateh Khan Malik, Chief Executive Officer, Faisal Fateh, Chief Financial Officer and Kaleem Arshad, Legal Council Representing Falki Capital (Pvt.) Limited.

Muhammad Ali, Deputy Director assisting the Director (SMD).

Date of hearing: 10th October, 2012.

2013 C L D 890

[Securities and Exchange Commission of Pakistan]

Before Shahid Nasim, Executive Director (Insurance)

SHAHEEN INSURANCE COMPANY LIMITED: In the matter of

Show Cause Notice Issue Dated 23rd January, 2012, decided on 18th July, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11, 28 & 156---Companies (General Provisions and Forms) Rules, 1985, R.30---S.R.O. 291(I) 2007 dated 26th March, 2007---Failure of Insurance Company to comply with provisions of Insurance Ordinance, 2000 relating to minimum paid-up share capital---Ministry of commerce, vide notification No. S.R.O. 291(I) 2007 dated March 26, 2007 had prescribed the minimum amount of paid-up capital requirement for the Insurance Companies---Said minimum amount of the paid-up capital was Rs.300 million, but unaudited financial statement for three quarters, had revealed that paid-up capital of the company was Rs.250,000,000--- Company, in circumstances, was in default of the requirements of Ss.28 & 11(1)(a) of Insurance Ordinance, 2000---Legal Counsel submitted reply to the show-cause notice on behalf of the company and the Chief Executive and Directors of the company, accepted that company had been unable to fulfil the minimum paid-up share capital requirement---Company had informed that the process of enhancement of the paid-up share capital had been completed---Company, at that stage, was compliant with respect to the provisions of S.28 of Insurance Ordinance, 2000 as the company had paid-up required share capital of Rs.300,000,000---Directors and the Chief Executive of the company, in addition to the day to day running of the company; and the management of its business, also had some fiduciary duties i.e. duties held in trust and some wider obligations imposed by statute on them and on the company---Directors and the Chief Executive of the company were supposed to be well aware of their legal obligation; and the company's legal obligation in the matter along with the consequences of the default---Company was at present compliant with the statutory requirement pertinent to the minimum paid-up share capital---Contravention did not appear to have affected the rights and interest of any of its stakeholders strictly during the period of non-compliance---Commission, in exercise of powers conferred under S.156 of Insurance Ordinance, 2000 took a lenient view and instead of imposing a fine, condoned the contravention of the company---Chief Executive, the Directors and the company itself, were warned and advised to exercise due caution in future whilst complying with the requirements of the law.

Ali Thaheem Murtaza, Legal counsel (Surridge Beecheno) for the Company.

Date of hearing: 13th March, 2012.

2013 C L D 907

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

LIVE SECURITIES LIMITED, TREC HOLDER OF KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show-Cause Notice No.SMD-/MS&CID-C&IW/10-1(152)/ 2012 dated 20th September, 2012, decided on 26th November, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, R.5---Brokers and Agents Registration Rules, 2001, R.8---Failure of Brokerage company to co-operate with the Inspectors by not providing information/document etc.---Brokerage company had failed to co-operate with the Inspectors in inspection initiated by the Commission, and had prima facie contravened the provisions of S.6(3) of the Securities and Exchange Ordinance, 1969 and R.8(x) of Brokers and Agents Registration Rules, 2001---Violation of Rules and Regulations was a serious matter which would entitle the Commission to even suspend the membership of the company/trading right entitlement, but the Commission taking a lenient view in the matter, in exercise of the powers under S.22 of Securities and Exchange Ordinance, 1969, imposed a penalty of Rs.100,000 on the company with further direction to fully co-operate with the Inspectors, and provide all the requisite information and necessary record for the purpose of inspection---Company was further directed to ensure that full compliance be made of all Rules, Regulations and directives of the Commissions in the future.

Altaf Husein Kapadia, Chief Operating Officer, Muhammad Rizwan, Manager Accounts and Naeem Yahya, Head of Settlement representing the Live Securities Limited.

Muhammad Tanveer Alam, Joint Director, Kashif Ali, Deputy Director and Adnan Ahmed, Deputy Director assisting the Director/HOD (MSCI).

Date of hearing: 13th November, 2012.

2013 C L D 934

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

IBL HEALTH CARE LIMITED: In the matter of

Show-Cause Notice No.1(5)IBL HCL/MSW/SMD/2012/01 dated 15th October, 2012, decided on 26th November, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, R.8---Volatility in the share price resulting from the withdrawal of stock dividend by the company---Trading record of the company had revealed volatility, both in terms of share price and volume, on the dates of first and second announcement---On the first announcement the share price of the company closed on the upper circuit breaker---On the date of second announcement during the first five minutes of the trading period a total number of shares of the company i.e., 177,500 was traded, which was more than the total volume of shares traded which constituted 44% of the total traded volume of 404,000 shares on that day---Representative of the company had accepted that it was a mistake on part of the company and should have not taken place at first place---Representative of the company admitted the mistake and asserted that the violations of the provisions of the Listing Regulations of Stock Exchange had occurred inadvertently by the company---Representative of the company was apprised that considerable volatility was also observed in the share price of the scrip---Trading pattern exhibited relatively unusual movement compared with recent historical trading pattern, both in terms of the share price and trading volume---Payout announced by the company in the form of stock dividend and cash dividend were revised and the payout announcement did not include the stock dividend that was announced in the first announcement and volatility in the shares price was observed---Company was one of the recognized institutions of the health sector and belonged to a well known group---Company, in circumstances, was expected to be conversant and had fully complied with the regulatory requirements---Institute of company's repute was expected to know that any disclosure of price sensitive information should be equitable and not in a manner that would compromise the investors' confidence on the fairness and transparency of the market---Volatility in the share price resulting from the withdrawal of stock dividend by the company had intensified the gravity of the violation as it prejudiced the interest of the investors at large scale and damaging to the development of fair and transparent market---Board of Directors had fiduciary responsibility to ensure that they had complied with all the laws, rules and regulations before the announcement of financial results---Company was established to have contravened the provisions of the Listing Regulations of Stock Exchange and requirement stated in Correspondence Manual, made pursuant of the Listing Regulations---Commission in exercise of power under S.22 of the Securities and Exchange Ordinance, 1969, imposed a penalty of Rs.300,000 on the company with direction to ensure that reasonable care and caution be exercised while announcing any sensitive information about price.

Zubair Palwala, Group Director - Finance representing IBL Health Care Limited.

Muhammad Ghufran, Deputy General Manager representing Karachi Stock Exchange Limited.

Ms. Najia Ubaid, Deputy Director (MSCID) assisting the Director/HOD (MSCID).

Date of hearing: 6th November, 2012.

2013 C L D 964

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCI)

FIRST NATIONAL EQUITIES LIMITED, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.1 MISC/MSW/SMD/1(5)2004/1580 dated 31st July, 2012, decided on 6th November, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---Creation of artificial volume in the scrip of the Brokerage company and execution of scheme in concert with other companies---Violation of Code of Conduct---Trading data of Stock Exchange for the relevant period showed that out of total trading volume in the scrip of the company, approximately 82% was traded by its associates and resulted in increase in share price---Company was found involved in creation of artificial volume in its scrip and execution of the scheme in concert with its participants, with a view to distort the market for personal gains---As provided in the Code of Conduct set forth under the Third Schedule of the Brokers and Agents Registration Rules, 2001, it was the responsibility of the company not to create false market, either singly or in concert with others, or indulge in any act that was detrimental to the investors' interest---Company, in circumstances, had violated clause A(1)(2)(4) & (5) of Code of Conduct, which in turn was violation of R.12 of Brokers and Agents Registration Rules, 2001, read with R.8 thereof---Company had shown very casual attitude towards the Commission and despite number of extensions on its own request, did not even feel the need to inform about its non-availability/absence on date of final hearing---Each and every market participant was supposed 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---If any market participant did not act accordingly, then it should be held accountable for that---Violation of the Rules and Regulations, was a serious matter which entitled the Commission to suspend the registration of the company, but Commission elected not to exercise that power---Commission, in exercise of powers under S.22 of Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.500,000 in circumstances.

Nemo for First National Equities Limited.

Ms. Najia Ubaid, Deputy Director assisting the Director/HOD (MSCI).

Dates of hearing: 16th, 30th August, 5th, 25th September, 15th and 22nd October, 2012.

2013 C L D 989

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCI)

INVEST CAPITAL MARKETS LIMITED, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.1(07) BS/KSE/MSW/SMD/2011 dated 7th September, 2012, decided on 19th October, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12 & Third Sched.---Engagement of clients of the Brokerage company in selling and then squaring up their position in different scrips---Trading data of Stock Exchange showed that for the relevant period it was noted that company's clients, were engaged in selling and then squaring up their position in different scrips---Clients of the company were established to have placed the sale orders without having pre-existing interest---Company was responsible to monitor all trading activities being carried out through its brokerage house in order to track and prevent any transaction being made in violation of any applicable Rules and Regulations---Company had failed to exercise due care, skill and diligence in conduct of the business, and had also failed to abide by the provisions of the Rules and Regulations issued by the Commission and Stock Exchange---Company, in circumstances, had violated the clauses A(2) and A(5) of the Code of Conduct set forth under Third Schedule of Brokers and Agents Registration Rules, 2001, which was violation of Rules 12 and 8 of said Rules---Placing the sale orders without having pre-existing interest, interfered with the fair and smooth functioning of the market and created misleading impression for other investors---Each and every market participant was supposed to play its due role to ensure that market was fair, efficient and transparent for the protection of investors, and to reduce the systemic risk of the market---If any market participant, did not act accordingly, then it should be held accountable for that---Violation of the Rules and Regulations, was a serious matter which would entitle the Commission to suspend the company's membership---Commission, in exercise of the power under S.22 of Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.100,000 with advice to 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 the full compliance of all Rules, Regulations and Directives of the Commission in future for avoiding any punitive action under the law.

Sohail Yousaf, Director and Ahmed Usman, Chief Financial Officer representing Invest Capital Markets Limited.

Kapeel Dev, Assistant Director assisting the Director (SMD).

Date of hearing: 20th September, 2012.

2013 C L D 1071

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

ABRAR HASAN DIRECTOR OF NATIONAL FOODS LIMITED: In the matter of

Show Cause Notice No.S.M(B.O.)C.O.222/18(1264)90, dated 5-9-2012, decided on 17th October, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 222(2)(c) & 224(4)---Failure to file Return of change in beneficial ownership---Company, which was a Public Listed Company was required to file return of change in beneficial ownership on Form 32, within the period stipulated under S.222 of the Companies Ordinance, 1984, but it failed to discharge said obligation which attracted penal provisions contained in S.224(4) of the Companies Ordinance, 1984---Company had admitted the default of late filing of the Return of beneficial ownership with the contention that said default was not committed wilfully and knowingly---Company assured for timely filing of the Return of beneficial ownership in future; and requested to condone the default in question---Record had revealed that the company had earlier filed Returns of beneficial ownership timely and regularly---Present changes in beneficial ownership had already been reported to the respective Company Registration Office--- Considering the submissions submitted by the company, its contention was agreed with---Taking lenient view of the matter, company was strictly warned to ensure timely compliance of S.222 of the Companies Ordinance, 1984 in future.

2013 C L D 1097

[Securities and Exchange Commission of Pakistan]

Before Mohammed Asif Arif, Commissioner (Insurance) and Tahir Mahmood, Commissioner (CLD)

Messrs ARIF HABIB CORPORATION LIMITED (FORMERLY, ARIF HABIB SECURITIES LIMITED)---Appellant

Versus

DIRECTOR (SMD)---Respondent

Appeal No.68 of 2011, decided on 2nd November, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 57 & 62---Securities and Exchange Ordinance (XVII of 1969), Ss.18-A & 22---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Constitution of Pakistan, Arts.23 & 24---Offering shares to general public for subscription---Submission of multiple and fictitious applications for subscription of shares---Failure to deposit confiscated subscription money---Shares of appellant corporation were offered to the general public for subscription---After the initial public offering, the appellant reported 228 cases comprising 457 applications being multiple and/or fictitious in violation of S.18-A of the Securities and Exchange Ordinance, 1969--- Appellant was advised; to deposit the confiscated subscription money of 336 applications in the Commission's Bank; to refund the subscription money of 2 applications; and to issue 59,500 shares against 119 applications---Despite repeated reminders, appellant deposited Rs.388,500 only out of total confiscated money and failed to deposit the balance confiscated money of 299 applications amounting to Rs.3,139,500 within stipulated period, which tantamount to non-compliance of orders of the Commission---Section 18-A of Securities and Exchange Ordinance, 1969, had given the Commission power to confiscate money in case of violation of its provisions---Power entrusted to the Commission to confiscate the application money was to create deterrence in the market and to ensure that no applicant indulged in malpractice of making fictitious or multiple applications---Provisions of S.18-A of Securities and Exchange Ordinance, 1969, was reasonable restriction in public interest and was not violative of Arts.23 & 24(1)(2) of the Constitution---Fundamental right to acquire, hold and dispose of the property envisaged by Arts.23 & 24(1)(2) of the Constitution, was not an unfettered right, but was subject to the applicable laws of the country---Right to confiscate the application money had to be determined by an authority which was entrusted with the powers to protect the investor and regulate the market---Neither a company nor the offerer had been conferred upon such rights in the Securities and Exchange Ordinance, 1969---Intention of the legislature could be gathered from the formal procedure laid down in S.18-A of said Ordinance---Section 22(1)(b) of Securities and Exchange Ordinance, 1969 had provided penalty for refusal or failure to comply with any order or direction of the Commission---Appellant had refused to implement the orders issued by the Commission, which act of the appellant was "wilful" as appellant despite numerous reminders of the Commission had failed to submit the confiscated money---Impugned order of penalty, could not be interfered with, in circumstances.

Rabeel Akhund for Appellant.

Aamir M. Khan Afridi, Director (CI), SMD, Departmental Representative.

Date of hearing: 19th September, 2012.

2013 C L D 1122

[Securities and Exchange Commission of Pakistan]

Before Mohammed Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SMD) MAHBOOB ELAHI, CHIEF EXECUTIVE and 3 others---Appellants

Versus

COMMISSIONER (CLD), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.4 of 2011, decided on 17th October, 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.5, 6, 25 & 26-Increase in share-holding of the Directors of the company---Share-holding of Chief Executive of the company increased substantially in the paid up capital of the company in relevant periods---Chief Executive, in circumstances, crossed the threshold level of 25% holding of voting shares in the company set out in S.5 of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002, which required the disclosure to the company and to the stock exchange on which the voting shares of the company were listed---Increase in shareholding required compliance of S.6 of the Ordinance---Rationale as stated in the Preamble read with other provisions of the Ordinance was to provide for a fair and equal treatment to all the investors, as well as a transparent and efficient system for substantial acquisition of voting shares and takeovers of listed companies---Investors in the company whose share or control was being acquired, were provided with the opportunity to dispose of their shareholdings, where they were not confident of the merits, with the acquisition of voting rights of control by one or more individuals---Commercial advantages or disadvantages were not of concern to the Ordinance---Chief Executive of the company was required to comply with the requirements of S.5 of the Ordinance, but he failed to comply with the said requirement---Company acted in concert and acquired voting shares in the company, which had been established as the shareholding of the company increased from 26.26% to 48.19% and subsequently to 78.50% due to increase in holding of three Directors in doing so, the company had failed to comply with the requirements of S.6 of the Ordinance---Shareholder, held 86,760 ordinary shares (13.35%) in 1980 which stood reduced to 73,500 ordinary shares (5.66%) in 2007 and continued to remain the same up to 8-10-2009---Appellant was part of the company, but there was no evidence to suggest that she acted in concert with other Directors, as there was no increase in the shares held by appellant---Penalty was rightly imposed on the Directors and Chief Executive of the company, but appeal was accepted to the extent of appellant/shareholder, in circumstances.

Wazir Ali Industries v. Executive Director (Enforcement)(sic) rel.

Mahmood Elahi, CEO Appellant in person.

M. Javed Panni, Consultant for Appellants.

Tariq Ahmad, Deputy Director (Enforcement), Departmental Representative.

Date of hearing: 24th May, 2012.

2013 C L D 1150

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

PAKISTAN PETROLEUM PROVIDENT FUND TRUST COMPANY (PVT.) LIMITED AND ITS DIRECTORS NAMELY; ASIM MURTAZA KHAN, MOIN RAZA KHAN AND KAMRAN WAHAB KHAN: In the matter of

Show Cause Notice No.1(4)INS/MSW/SMD2012/PPL-02 dated 19th September, 2012, decided on 30th November, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 15-A & 15-E---Insider trading---Provident Fund Trust Company, a private limited company managed the funds of the employees of Pakistan Petroleum Limited---Board of trustees of the 'Fund' had prior information regarding the financial results of the 'Fund' by virtue of their positions in the 'Fund'---Information, regarding financial results of the 'Fund' was inside information as same was not available publically before its dissemination---Board of trustees of the 'Fund' using the material information regarding financial results of the 'Fund', disclosed by its Director traded on behalf of the 'Fund' by purchasing the shares of the 'Fund' just before the announcement of its financial results---Directors of the 'Fund' found engaged in "insider trading" by dealing with the shares of 'Fund' on the basis of inside information in violation of S.15-A of Securities and Exchange Ordinance, 1969---Company was liable for the penalty as defined in the S.15-E of the Ordinance---Commission, in exercise of powers under S.15-E(1) of Securities and Exchange Ordinance, 1969, imposed penalty of rupees one million on the company for contravention of S.15-A of the Ordinance by trading in the shares of the 'Fund' on the basis of inside information--- Directors of the company were directed to ensure that the operations of the 'Fund' were closely monitored by them and no trading was done on the basis of inside information in contravention of S.15-A of Securities and Exchange Ordinance, 1969.

Asim Murtaza Khan, Chief Executive Officer, Pakistan Petroleum Provident Fund Trust Company (Pvt.) Limited ("PPPFTCL").

Kamran Wahab Khan, Director, PPPFTCL.

Maudood Ahmad Khan, Jt. Senior Partner, Orr. Dignam & Co.

Taha Alizai, Partner, Orr Dignam & Co.

Osman Syed, Deputy Director, SECP assisting the Director/HOD (MSCID).

Date of hearing: 23rd October, 2012.

2013 C L D 1179

[Securities and Exchange Commission of Pakistan]

Before Mohammed Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SMD)

NASEEM SAIGOL, CHIEF EXECUTIVE and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.1 of 2011, decided on 17th October, 2012.

Companies Ordinance (XLVII of 1984)---

----Ss. 208, 473 & 476---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Unauthorized investments in associated companies and undertaking---Company had advanced amount to its associated companies for purchase of textile machinery and cotton, etc.---Said advances, prima facie, were not in the nature of normal trade credit and appeared to be in violation of S.208 of the Companies Ordinance, 1984---Regarding amount advanced to associated company for purchase of machinery, that project was abandoned due to defective machinery---Instead of recovering the advance from the said associated company, the company extended further credit which was not in the nature of normal trade credit---Explanation provided in S.208 of the Companies Ordinance, 1984, had clearly stated that 'investment' included 'advances' and required payment of a special resolution---Company made advance payment and converted the same advance into open ended credit to associated company, and failed to recover outstanding receivables---Credit was utilized by the associated company without requisite approval under S.208 of the Companies Ordinance, 1984---Company advanced amount to associated company for purchase of electricity, which became overdue for a long period and also met certain expenses without authorization of the shareholders under S.208 of the Companies Ordinance, 1984---Such open ended credit without specific purpose could not be termed as normal trade credit---Fact that the parties had an agreement, would not make such financial facilities a normal trade credit---Directors of the company utilized funds of the company to support the operation of their own undertaking without the approval of shareholders---Amount advanced by the company was adjusted after a considerable time of one year---Company, in circumstances, failed to pass a special resolution authorizing the abnormal credit period---Impugned order imposing penalty on Chief Executive and Directors of the company, could not be interfered with, in circumstances.

Syed Pervaiz Amjad, S.P. Amjad & Co. Chartered Accountants and Muhammad Shamil, General Manager for Appellants.

Tariq Ahmad, Deputy Director Departmental Representative.

Date of hearing: 27th June, 2012.

2013 C L D 1216

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (SM)

ILYAS SAEED & COMPANY, CHARTERED ACCOUNTANTS: In the matter of

Show Cause Notice No.4/BRK-176/SE/SMD/2004, dated 11th May, 2012, decided on 4th October, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6, 18 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Irregularities in calculation of Net Capital Balance (NCB)---Books and records, required to be maintained by the company, which was member of Stock Exchange and was registered with the Commission as a Broker, were inspected by order of the Commission---Inspection report submitted by Inspection team, had highlighted major irregularities in calculation of Net Capital Balance (NCB) of the company---Said calculation was duly verified and certified by the company---If said 'NCB was calculated in strict compliance with requirements of Securities and Exchange Rules, 1971, would have been in negative---Company had not applied the necessary prudence in certifying the said NCB, and was not aware about the significance of NCB, and the systemic risk involved as a result of over statement---NCB as certified by the company, was not in accordance with the Third Schedule of Securities and Exchange Rules, 1971---Company had provided a statement while it had reasonable cause to believe to be false or incorrect in material particulars and in violation of S.18 of Securities and Exchange Ordinance, 1969---Violation of the Rules and Regulations, was a serious matter in view of the regulatory violations and in exercise of the powers under S. 22 of the Securities and Exchange Ordinance, 1969, Company was directed to deposit a sum of Rs. Fifty Thousand to the Commission by way of penalty---Company was further directed to ensure full compliance with Ordinance, Rules, Regulations and directives of the Commission in future.

Muhammad Ilyas (Senior Partner), Irfan Ilyas (Partner) and Imran Ilyas (Partner) for Messrs Ilyas Saeed and Company.

Ms. Saima Shafi Rana (DD-BR&ICW) and Muhammad Tanveer Alam (JD) through Video Conference) representing (BR&ICW).

Date of hearing: 30th May, 2012.

2013 C L D 1257

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCI)

EQUITY MASTER (PVT.) LIMITED, MEMBER LAHORE STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.1(07)BS/KSE/MSW/SMD/2011 dated 19th July, 2012, decided on 17th September, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2000, Rr.8 & 12, Third Schedule, Clauses A(2) & A(5)---Short sales and trading by client of Brokerage Company---Client of the company had been engaged in selling and then squaring up his position in different scrips through trading as inter-exchange client of Stock Exchange brokers---Client of the company had been established to have placed the sale orders without having pre-existing interest---Company was responsible to monitor all trading activities being carried out by its clients in order to track and prevent any transaction being made in violation of any applicable rules and regulations---Company had failed to exercise due care, skill and diligence in conduct of its business; and also failed to abide by the provisions of the Rules and Regulations issued by the Commission from time to time---Company, in circumstances, had violated clauses A(2) & A(5) of the Code of Conduct set forth under the Third Schedule of Brokers and Agents Registration Rules, 2000 which in turn was violation of Rr.12 & 8 of said Rules---Trading activities of the client of the company, interfered with the fair and smooth functioning of the market and also damaged the interest of other investors who were trading in stock market---Violation of Rules and Regulations, was a serious matter which entitled the Commission to suspend membership of the company---Commission had not elected to exercise said powers, but in exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs. Fifty Thousand only, with advice to the company to take immediate measures and put in place proper system and checks to eliminate the occurrence of such instances in future---Company should ensure that full compliance be made of all Rules, Regulations and directives of the Commission in future.

Tahir Anwar, Chief Operating Officer representing Equity Master (Pvt.) Limited.

Muhammad Ali, Deputy Director assisting Director (SMD).

Date of hearing: 2nd August, 2012.

2013 C L D 1275

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (SM)

HUM SECURITIES LIMITED, MEMBER PAKISTAN MERCANTILE EXCHANGE LIMITED: In the matter of

Show Cause Notice No.4/BRC-160/PMEX/SMD/11 dated 25th October, 2012, decided on 29th November, 2012.

Commodity Exchange and Functions Contract Rules, 2005---

----R. 15---S.R.O.1076(I)/2010, dated 29-11-2010---Failure of company to resolve a large number of complaints---Suspension of registration of the company---Company which previously was a member of the Stock Exchange, later on transferred its membership and it ceased to be a member of Stock Exchange---Soon after transferring of the said membership, a large number of complaints amounting to Rs.16 million were received by the Stock Exchange---Despite constant follow-up by the Commission, the company had failed to resolve the complaints---Despite lapse of five months, no serious effort had been made by the company to settle the investors' complaints---Non-settlement of investors' complaints and deteriorating financial condition of the company were serious matters because of which, continuance of the company in the business, was not in the interest of the market--- Commission under powers delegated vide statutory notification No.S.R.O.1076(I)/2010 dated 29-11-2010 suspended the registration of the company till resolution of all legitimate investors' complaints to the satisfaction of the Commission---Company was advised to take immediate measures to do the needful and fully co-operate and comply with the direction of the Commission in letter and spirit.

Shahid Nadeem representing the Respondent.

Ms. Saima Shafi Rana, (Deputy Director-MSCID) representing MS&CID.

Date of hearing: 28th November, 2012.

2013 C L D 1300

[Securities and Exchange Commission of Pakistan]

Before Mohammed Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SMD)

INAYAT ULLAH NIAZI, DIRECTOR, D.G. KHAN CEMENT COMPANY LIMITED and 6 others---Appellants

Versus

EXECUTIVE DIRECTOR, ENFORCEMENT---Respondent

Appeal No.7 of 2010, decided on 17th October, 2012.

Companies Ordinance (XLVII of 1984)---

----S. 208---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Investment in associated company and undertaking without authority of a special resolution---Company advanced amount to associated concern and said advance was disclosed in the accounts of the company as advance against issue of shares, but no shares were issued by the associated concern and the amount in question was received back by the company after about one year---Company did not provide interest on the said advance---Shareholders of the company had only approved equity investment in the shares of the associated concern to the extent of Rs.700 million in their extraordinary general meeting---Approval of shareholders was only for making equity investment, but the company made an investment in the nature of advance, and also caused loss to the company by not charging interest thereon--- Executive Director (Enforcement) of the Commission imposed penalty on the company---Validity---Any amount, whether in the form of advance or equity, was an 'investment' in terms of S.208 of the Companies Ordinance, 1984---Argument of the representative of the Directors of the company that it was an equity investment and not an advance was not substantiated with facts of the case as the aforementioned amount was advanced at the time when no offer for issuance of shares was made by associated concern; whereas, the special resolution was passed later on---Enhancement of the authorized capital was a pre-requisite for enhancing the paid up capital of the company---Said amount, in circumstances, could only be treated as an advance by the company to its associated company---Contention of the representative of the Directors of the company that no loss was caused to the Directors, was without any basis---Authority at the time of imposition of penalty of Rs.150,000 on each Director, instead of maximum penalty of Rs. Ten million on each Director, had taken into consideration the mitigating circumstances including the fact that advance had been recovered.

Rashid Sadiq, CEO, RS Corporate Advisory for Appellants.

Ms. Ayesha Riaz, Joint Director and Tariq Ahmed, Deputy Director for Respondents.

Date of hearing: 24th May, 2012.

2013 C L D 1319

[Securities and Exchange Commission of Pakistan]

Before Mohammed Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SMD)

ATHAR AND CO., CHARTERED ACCOUNTANTS---Appellant

Versus

DIRECTOR (ENFORCEMENT), SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.70 of 2009, decided on 17th October, 2012.

Companies Ordinance (XLVII of 1984)---

----S. 260---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Making and submission of untrue and illegal audit report by the Auditors---Auditor audited the accounts and books of accounts of the company and made audit report---Examination of said audit report had revealed that Auditor had failed to appropriately modify his opinion on the account in spite of following serious going concern uncertainties confronted by the company as on the date of audit report---Company due to said uncertainty had to suspend its operations on account of unfavourable market conditions; the company defaulted in payments of its liabilities towards banks; all employees of the company were laid off; and power supply and other utilities were discontinued etc.---Director (Enforcement) of the Commission taking a lenient view imposed a penalty of Rs.70,000 on Auditor under S.260(1) of the Companies Ordinance, 1984---Validity---Auditor's responsibility was to consider the appropriateness of management's use of the going concern assumption in the preparation of the financial statements and consider whether there were material uncertainties about the entity's ability to continue as a going concern that needed to be disclosed in the financial statements---Auditor should consider whether there were events or conditions and related business risks which could cast significant doubt on the entity's ability to continue as a going concern---Audit report should include specific reference to the fact that there was a material uncertainty that could cast significant doubt about the entity's ability to continue as a going concern---Auditor's submission that the operations were subsequently restored, could not be substantiated as no result of operations was evident in the half yearly accounts---Mere submission of electricity bill for one month, did not support auditor's stance that the company re-commenced its operations---intentions and fruitless attempts by management of the company to commence operations, could not justify the use of going concern as the basis for preparing accounts---Going concern uncertainty confronted by the company at the time of audit report, was significant enough to affect the audit report; and its intensity could not be ignored by the Auditor while expressing its opinion in its report--- Impugned order could not be interfered with, in circumstances and same was upheld.

Mian Abdul Bari, Advocate High Court and Rana Muhammad Ather, FCA for Appellant.

Zohra Sarwar Khan, Deputy Director and M. Anwar Hashmi, Deputy Director, Departmental Representatives.

Date of hearing: 28th June, 2012.

2013 C L D 1353

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (SM)

M.R.A. SECURITIES (PRIVATE) LIMITED, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show Cause Notice No.4/BRK-121/SE/SMD/2006 dated 12th October, 2012, decided on 23rd November, 2012.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Brokers and Agents Registration Rules, 2001, R.8(x)---Failure to provide requisite record---Inspection team of the Commission after inspection of records of the Brokerage company, disclosed in its inspection report that, the company despite several reminders, did not produce majority of the books and accounts, information, documents, etc. and also had not clarified in that respect to the Inspection Team---Major irregularities were observed in calculation of Net Capital Balance (NCB)---Contention of the company that provision of record was not practically possible due to law and order situation in the city, had no merit as business of the company, was in process during that period---Failure of the company to provide the record, in circumstances, was wilful---Since no arguments were made by the company in its written comments; and no clarification was given during the hearing, it stood established that Net Capital Balance (NCB) as calculated by the company was not in accordance with the Rules---Violation of the Rules and Regulations was a serious matter which empowered the Commission to even suspend the company's registration as Broker, but the Commission elected not to exercise that power---Commission in exercise of the powers under S.22 of the Securities and Exchange Ordinance, 1969; imposed on the company a penalty of Rs.300,000 with advice to the company to take immediate measures and put in place proper checks and procedures to eliminate the occurrence of such instances, in future to ensure full compliance with the Rules and Regulations and directives of the Commission---Company was also directed to fully co-operate with any enquiry or investigation carried out by the Commission in future.

Mirza M. Baig, Manager and Kamran Hanif, Assistant Manager Present at Hearing.

Ms. Saima Shafi Rana, Deputy Director-MSCID representing MS&CID.

Muhammad Tanveer Alam, Joint Director-MSCID, Kashif Ali, Deputy Director-MSCID, Adnan Ahmed, Deputy Director-MSCID and Moizuddin Siddiqui, Assistant Director-MSCID representing Inspection Team through Video Conference (From Karachi).

Date of hearing: 19th October, 2012.

2013 C L D 1385

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (OED and TMF&CD) and Imtiaz Haider, Commissioner (SMD)

FAWAD AHMAD MUKHTAR, CHIEF EXECUTIVE and 6 others---Appellants

Versus

DIRECTOR (ENFORCEMENT) SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN---Respondent

Appeal No.3 of 2011, decided on 14th March, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 208 & 473---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Investment in associated companies and undertakings un-authorisedly---Annual audit account of the company for relevant year, had revealed that company had provided interest free loans and advances to various associated companies without any authority of special resolution passed by the shareholders of the company---Advances made by the company to the associated companies, could not be deemed to have been advanced by the sponsors--- Act of the company was done stubbornly, and in an unseemliness manner despite the express provision of law--- Failure of the company to comply with the requirements of S.208 of the Companies Ordinance, 1984, was mala fide---Authorized representative had admitted the default of the company---Commission taking lenient view, vide impugned order imposed penalty of Rs.10,000 each on the Directors of the company, and gave directions under S.473 of the Companies Ordinance, 1984 to regularize the transactions by presenting the matter before the shareholders of the company; and accordingly get the approval by way of special resolution, containing the nature, terms and conditions for making loans and advances to associated companies.

Jalaluddin F.C.A. v. Commissioner SEC 2005 CLD 333 rel.

Basharat Hashim, Manager for Appellant.

Shahid Javed, Deputy Director (Enforcement) and Malik Asim Pervez, Deputy Director (Enforcement) Departmental Representative for Respondent.

Date of hearing: 27th February, 2011.

2013 C L D 1421

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (OED and TMF&CD) and Imtiaz Haider, Commissioner (SMD)

Messrs NAZIR COTTON MILLS LIMITED---Appellant

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and 2 others---Respondents

Appeal No.9 of 2013, decided on 14th March, 2013.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.265, 477, 484 & 485(1), proviso---Appointment of Chartered Accountant to act as an Inspector to investigate into affairs of the company---Accounts of the company portrayed a dismal financial position of the company---Company was in downward spiral and no steps had been taken by its Management to reverse the trend of losses and put the company back on the recovery path---Company's capital had been completely eroded by its losses---Record also revealed a lot of irregularities on part of the company---Authority in exercise of powers under S.265(b) of Companies Ordinance, 1984 vide impugned order appointed Chartered Accountant to act as Inspector to investigate into affairs of the company, and bring into light the actual state of affairs of the company---Validity---Order of investigation, should not be interfered with in revision as it did not dispose of entire case before the Commission---Interference in the order of investigation, was not warranted by the law, be it in exercise of power in revision or appeal before the Commission or before the court---Scope of revision was only limited to the exercise of jurisdiction and could not go beyond that---Revision could only be preferred in cases involving illegal assumption, non-exercise or irregular exercise of jurisdiction---Company had preferred appeal against the impugned order passed by Authority in exercise of the powers of revision---No appeal would lie against order of revision in terms of S.33(1)(b) of Securities and Exchange Commission of Pakistan Act, 1997---Investigator was directed to investigate into the affairs of the appellant company, in circumstances.

Attock Oil Refinery v. Executive Director (Enforcement) and Monitoring Division, SECP and another PLD 2010 SC 946; Sartaj Hussain v. Assistant Administrator, Evacuee Trust Property 1994 MLD 2195 and Muhammad Boota and 48 others v. Allah Ditta and 14 others 1998 SCMR 2764 rel.

Waseem Ahmed Siddiqi v. Zafar-ul-Haq Hijazi 2006 CLD 298 distinguished.

Mian M. Tariq Hassan and Jabran Tariq Butt for Appellant.

Shahzad Afzal, Joint Director (Enforcement) and Amir Saleem, Deputy Director (Enforcement) for Respondents.

Date of hearing: 27th February, 2013.

2013 C L D 1432

[Securities and Exchange Commission of Pakistan]

Before Mohammed Asif Arif, Commissioner (Insurance) and Imtiaz Haider, Commissioner (SMD)

SUCCESS INDUSTRIES (PVT.) LTD.---Appellant

Versus

The REGISTRAR (SECP)---Respondent

Appeal No.3 of 2012, decided on 22nd March, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 21, 96 & 97---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Alteration of memorandum---Reduction of share capital---Appellant company filed Form-A and Form-26, stating paid-up capital of the company as Rs.10 million divided into 100,000 shares of Rs.100 each---Company submitted an application stating that paid-up capital was incorrectly mentioned due to typing error and company's paid-up capital actually of Rs.10,000 constituting 100 shares of Rs.100 each---Company requested the Commission to rectify the mistake of paid-up capital---Request of the company was not accepted on the ground that it being matter of reduction of paid-up capital, same fell under jurisdiction of High Court in terms of Ss.96 & 97 of the Companies Ordinance, 1984---Contention of the company was that it was a typing mistake and not a matter of reduction of capital---Validity---Effect of rectification sought by the company, would be reduction of capital, and the power to reduce the capital, rested with the High Court---Alteration in memorandum could only be done in respect of the objects of the company stated in S.21(1)(a) to (g) of Companies Ordinance, 1984, which did not include alteration in the share capital of the company---Remedy had clearly been provided in Ss.96 & 97 of the Companies Ordinance, 1984, whereby the High Court had the exclusive jurisdiction in the matter.

Ch. Khalid Mahmood for Appellant.

Syed Iftikhar H. Naqvi, Joint Registrar (CRO, Multan), Departmental Representative.

Date of hearing: 22nd February, 2013.

2013 C L D 1466

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (OED and TMF&CD) and Imtiaz Haider, Commissioner (SMD)

SHABBIR GHANI, CHIEF EXECUTIVE OFFICER---Applicant

Versus

COMMISSIONER (CLD), SECP, ISLAMABAD---Respondent

Revision No.43 of 2011, decided on 22nd May, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 158(1), 170, 171, 476 & 477---Failure to hold Annual General Meeting--- Company, in terms of provisions of S.158(1) of Companies Ordinance, 1984, was required to hold its Annual General Meeting for the relevant year within the prescribed time period, but it had failed to comply with provisions of law and direction of the Securities and Exchange Commission of Pakistan---Law on non-holding of Annual General Meeting was explicit and set out definite timelines to be allowed---Holding of Annual General Meeting was one of the fundamental requirements of the Companies Ordinance, 1984, as non-holding of said meeting had serious consequences for the investors---Closure of Office and non-availability of staff was not a valid justification, under the law for non-holding of Annual General Meeting---Act of the company being wilful, penalty was rightly imposed on company, in circumstances.

Mian Muhammad Ilyas Mehraj and 17 others v. Appellate Bench No.III 2009 CLD 883 rel.

Maqsood Ahmad for Applicant.

Mubasher Saddozai, Director (CCD) and Anwar Ahmed, Assistant Registrar (CCD), Departmental Representative.

Date of hearing: 9th April, 2013.

2013 C L D 1478

[Securities and Exchange Commission of Pakistan]

Before Zafar Abdullah, Commissioner (OED and TMF&CD) and Imtiaz Haider, Commissioner (SMD)

HABIB ULLAH, CHIEF EXECUTIVE and others---Appellants

Versus

EXECUTIVE DIRECTOR (ENFORCEMENT)---Respondent

Appeal No.6 of 2010, decided on 22nd May, 2013.

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

----S. 33---Companies Ordinance (XLVII of 1984), Ss.476 & 492---Annual audited accounts of the company for the relevant year, had revealed that an amount of Rs.51.150 million had been advanced for purchase of a house, which would be used as guest house for the officials of the company---Correspondence between the company and the Securities and Exchange Commission had shown that company had made a misstatement that said house had been purchased as a guest house for its officials, but in fact that house was in personal use of Chief Executive Officer of the company---Company had also made a false and incorrect statement in its account sent to its shareholders and general public and misstated facts to the Commission through its various communications---Company had also failed to provide any documents to show that Chief Executive Officer was allowed to stay in the house in question in accordance with the Policy of the company---Misstatements made by company were established, which was in violation of S.492 of the Companies Ordinance, 1984---Executive Director (Enforcement) of the Commission being dissatisfied with the response of the company imposed penalty of Rs.100,000 on each of the Directors of the company---Order imposing penalty, could not be interfered with in appeal, in circumstances.

Ms. Rehana Zaman and Ms. Amina Iqbal for Appellants.

Tariq Ahmad, Joint Director (Enforcement) for Respondent.

Date of hearing: 9th April, 2013.

2013 C L D 1637

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSRD)

CYAN LIMITED THROUGH CHIEF EXECUTIVE OFFICER: In the matter of

Show Cause Notice No.Misc/MSW/SMD/1(05) 2004/1635 dated 6th November, 2012, decided on 19th April, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 15-A & 15-E---Insider trading---Person who was the Chief Executive Officer of company, was also a member of Board of Directors of a Corporation---Said person was authorized to operate the trading account on behalf of the company and by virtue of his position at both the enterprises the company and Corporation were in possession of material information regarding the financial and operation condition of the Corporation---Open ended decision taken by Board of Directors of the company to sell shares of Corporation for portfolio reallocation, could not substitute the sale of shares by the company, just prior to announcement of financial results---Said person fell under the definition of 'Insider' as he was serving as Chief Executive of the company and non-executive Director of the Corporation---Directors of any company, were first source of insider information, however, the person in possession of insider and confidential information, must take proper care and caution, so that confidentiality was neither compromised, nor breached---Person in possession of inside information would hold that information as a trust---In the present case, it was evident that being on the Board of Directors of the Corporation, said person was directly privy to the inside information regarding worsening operational condition as well as weakening financial position of the Corporation---Considering the financial position of the Corporation the company sold shares of the Corporation aggressively---Three components of S.15 of Securities and Exchange Ordinance, 1969 i.e. insider, inside information and inside trading were established to be present in the case---Said person was the insider, determining financial and operating position of the Corporation, and financial result, was inside information, and selling of shares of the Corporation by the company on basis of insider information just days before the announcement of financial result of the Corporation, constituted inside trading---Said person was privy to the inside information by virtue of his position at the Corporation, disclosed inside information to the company on the basis of which company sold the shares of the corporation; before dissemination of material non-public information---Contravention of S.15-A(1) of Securities and Exchange Ordinance, 1969, stood established against the company--- Commission, in exercise of powers under S.15-E of Securities and Exchange Ordinance, 1969, directed the company to deposit a fine of Rupees Two Million only, in circumstances.

Sulaiman S. Mehdi, Chief Operating Officer and Faisal Nadeem, Chief Financial Officer representing CYAN Limited.

Muhammad Ali, Deputy Director assisting the Director/HOD (MSRD).

Date of hearing: 19th November, 2012.

2013 C L D 1677

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director

Messrs THE CRESCENT STAR INSURANCE COMPANY LIMITED---Appellant

Versus

Messrs SULTANABAD MODEL GINNING, PRESSING FACTORY AND OIL MILLS---Respondent

Appeal No.8 of 2012, heard on 29th January, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 129 & 130(2)---Securities and Exchange Commission (Insurance) Rules, 2002, R.35--- Fire Insurance Cover Note, cancellation of---Respondent (insured a Mill) entered into a contract with Insurance Company for obtaining Fire Insurance Cover Note for period of three months starting from 14-10-2009 subject to payment of premium amount---Cheque sent by the Mill regarding payment of premium amount on 25-10-2009, was not received by the Insurance Company and was returned intimating the Mill that as Mill failed to pay amount of premium at the very date of taking the delivery of Fire Insurance Note on 14-10-2009, said Insurance Cover Note stood cancelled automatically---Complaint filed for said cancellation by the Mill, having been accepted by the Insurance Ombudsman, the Insurance Company had filed appeal under S.130(2) of Insurance Ordinance, 2000---Fire Insurance Cover Note, which carried no premium payment date was cancelled on 23-10-2009, only 9 days from issuance of said Fire Insurance Cover Note, without any prior notice to the Mill---Insurance company or its agent did not make any prior advice to the Mill to the effect that the premium must be paid within such period---Law did not support the view that an Insurance company must insist on immediate payment of the premium in order to award of Insurance Cover---Impugned order passed by the Insurance Ombudsman, which could not be differed, was upheld---Insurance company was directed to treat the Cover Note as quite valid as if it had not been cancelled, and was binding to be honoured, in circumstances---Appeal was dismissed.

Qutbuddin and Fakhruddin Bundukwala for Appellant.

Zahid Mahmood and Prdeep Kumar for Respondent.

Date of hearing: 29th January, 2013.

2013 C L D 1691

[Securities and Exchange Commission of Pakistan]

Before Muhammad Asif Arif, Commissioner (Insurance)

TAKAFUL PAKISTAN LIMITED: In the matter of

Show Cause Notice Issue Date March, 11, 2013, decided on 8th May, 2013.

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

----Ss. 11(1)(F), 12(1)(b), 63(1) & 156--- Insurance Companies (Sound and Prudent Management) Regulations, 2012, Regln.2(2)---Failure to seek approval of the Commission before appointing Chief Executive Officer---Effect---Company and its Directors were required to seek approval of the Securities and Exchange Commission before appointing Chief Executive Officer of the company which the company and its Directors had not complied with---Default of Regln.2(2) of Insurance Companies (Sound and Prudent Management) Regulations, 2012 and Ss.11(1)(F) & 12(1)(b) of Insurance Ordinance, 2000, had been established, in circumstances---Direction under S.63(1) of Insurance Ordinance, 2000, and/or the penalty as provided under S.156 of said Ordinance, could be imposed on to the company and/or its Directors---Commission, however, in exercise of the power conferred on it under Ss.63(1) & 156 of Insurance Ordinance, 2000, instead of directing the company to cease entering into new contracts of insurance, imposed a fine of Rs. one million only on the Director of the company for not seeking the approval of the Commission prior to appointment of Chief Executive Officer of the company---Fine of Rs.200,000 was further imposed on each of remaining six Directors of the company for not ensuring the appointment of a 'Fit and Proper' person to act as the Chief Executive Officer.

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

----Ss. 11(1)(a) & 12(1)(b)--- Insurance Companies (Sound and Prudent Management) Regulations, 2012, Regln.2(2)--- Duties of the Directors of Insurance Company---Scope---Directors, in addition to the day-to-day running of the company and the management of its business, also had some 'fiduciary' duties i.e. duties held in trust, and some wider duties imposed by statute; and breach of those statutory duties, would usually be a criminal offence, punishable by fine or imprisonment---Directors were gauged against a higher standard of accountability which required them to be vigilant and perform their duties with due care---Directors were supposed to be well aware of their legal obligations in connection with Regln.2(2) of Regulations and Ss.12(1)(b) & 11(1)(F) of Insurance Ordinance, 2000.

Taimur Mirza of Messrs Mohsin Tayebaly and Co. for Takaful Insurance Limited.

2013 C L D 1710

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

PAK KUWAIT TAKAFUL COMPANY LIMITED: In the matter of

Show Cause Notice Issue Date February 20, 2013, decided on 4th April, 2013.

Companies Ordinance (XLVII of 1984)---

----Ss. 227 & 229---Deduction of amount of provident fund from the company employee for deposit in the Provident Fund Account---Late deposit of amount in Provident Fund Account--- Company under provisions of S.227 of Companies Ordinance, 1984 was duty bound to deposit amount of Provident Fund within prescribed period of 15 days in provident fund Account, but company had failed to comply with said provisions of law and had been making payments after said period of 15 days---Company had admitted the delay---Directors of the company, in addition to the day to day running of the company and the management of its business, also had some 'fiduciary' duties i.e. duties held in trust and some wider duties imposed by statute; and breach of those statutory duties, would be a criminal offence, punishable by fine or imprisonment---Directors, were gauged against a higher standard of accountability, which required them to be vigilant and perform their duties with due care---In the present case company and its Directors had failed to perform their duties with due care and prudence---Default of S.227 of the Companies Ordinance, 1984 having been established, penalty as provided under S.229 of the Companies Ordinance, 1984 could be imposed on the company and its Directors---Commission instead of imposing the penalty, took lenient view and condoned the company , due to the fact that the act of late transfer/deposit of amounts to the Provident Fund had not harmed the interests of the employees of the Company---Company was issued a stern warning that in case of similar non-compliance in future, a strong action would be taken against it.

Syed Wajahatullah Quadri, Chief Financial Officer of Messrs Pak Kuwait Takaful Company Limited.

2013 C L D 1725

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director

PAK QATAR FAMILY TAKAFUL LIMITED: In the matter of

Show Cause Notice Issue Date January 2, 2013, decided on 26th February, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 76(1) & 95--- Misleading or defective advertise-ment---Bank, being a corporate agent of the Insurance Company, attempted to market three product of the company i.e. Wedding Plan, Retirement Plan, and Education Plan, through advertisement, but name of the Company was not printed anywhere in the said advertisement---Advertisement did not suggest any role of the company---Advertisement, in circumstances, was defective/misleading for the public at large---Insurance Company for which 'Bank' was acting as an agent, was required to ensure that its advertisement should not contain any deceptive or misleading information---Directors of the company, in addition to the day-to-day running of the company, and the management of its business, also had some 'fiduciary' duties i.e. duties held in trust and some wider duties imposed by statute; and breach of those statutory duties would usually be a criminal offence, punishable by fine or imprisonment---Directors were gauged against a higher standard of accountability which required them to be vigilant and perform their duties with due care---Directors of the company had failed to perform their duties with due care and prudence---Commission, in exercise of the power conferred under S.156 of the Insurance Ordinance, 2000, imposed on the company a fine of Rs.800,000 and a fine of Rs.200,000 on the Chief Executive Officer of the company---Company and its management were also directed to take necessary measures for properly educating their agents in respect of all the applicable laws that were relevant to arrangement of agency, and that the company and its management should avoid publication/ disclosure of any misleading and/or deceptive information, either by the company itself or by any of its agents as required by S.76(1) of Insurance Ordinance, 2000.

Waqas Ahmad, Senior Manager Operations, Pak Qatar Family Takaful Limited and Syed Fakher-i-Alam, Senior Manager Operations, Pak Qatar Family Takaful Limited attended.

Date of hearing: 26th February, 2013.

2013 C L D 1742

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

Messrs EAST WEST LIFE ASSURANCE COMPANY LIMITED---Appellant

Versus

Mst. TEHMINA BASHIR---Respondent

Appeal No.1 of 2012, decided on 11th February, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 76(4) & 130(2)---Cheating and mal-practice of the officials of the insurance company---Complainant had alleged that certain officials and agents of the insurance company, had unduly deprived her of Rs.3,90,000 in the name of issuing her insurance policies of the insurance company---Investigating Officer, had reported that said officials were involved in cheating and mal-practices, and he brought out their mal-practices into the notice of the senior officials of the company---Insurance company had failed to exercise adequate control over its field officials and agents, which resulted in cheating the complainant/widow by the company's officials---Such flaw of poor internal control in the management of the company, also caused, in the past, some troublesome situations for a number of people in other cases also---Order passed by the Insurance Ombudsman was upheld in terms of S.130(2) of Insurance Ordinance, 2000 and insurance company was directed to pay amount in question to complainant, plus the compensation as damages under S.118 of the Ordinance within 30 days of the receiving of that order for the mental agony the complainant had been suffering since the day she was robbed of her money.

Sheikh Khalid Mahmood, Regional Manager and M. Imran Butt an Official of the Insurance Company (Appellant).

Dr. S.M. Sarosh for Respondent.

Dates of hearing: 30th November, 2012 and 11th February, 2013.

2013 C L D 1770

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director

MUHAMMAD IMRAN---Appellant

Versus

CHIEF EXECUTIVE OFFICER---Respondent

Appeal No.9 of 2012, decided on 30th April, 2013.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 129 & 130(1)(2)---Denial of payment on the claim made under the Insurance Policy---Complaint---Appeal against order passed by Insurance Ombudsman---Issue essentially involved in the case was, whether the loss of vision of the insured persons (appellant) had been caused by the fall he had while discending the stairs as claimed, or it was the eventual result of some ailment, the appellant had contracted and suffered much before entering into insurance contract with the insurance company---Approach to discern fact from the fiction via medical tests had already been tried and exhausted without leading to conclusion; it was assumed, in circumstances, that it would be better, if both parties try to reach on amicable settlement on their own---Appellant side offered that, if the Insurance Company would undertake the treatment of the blinding disease of the appellant, then there would be no more dues on the company---Other offer of appellant side was that Insurance Company refund the entire premium already paid, and the main Life Policy be continued---Other options discussed were the waiver of the premium in the respective future term period, and the Policy to continue as such and that compensation be paid to the appellant under the policy in a fairway with main Policy of life remain intact---Counsel for Insurance Company had submitted that company was willing to refund the whole premium with no deduction at all to the appellant plus Rs.50,000---Appellant accepted the final settlement offer, with Proviso that no deduction be made from the premium refund---Insurance Company, on that point had already expressed their approval---Parties having arrived at the settlement on their own quite agreeably, it was ordered that Insurance Company would refund the premium already paid, to the appellant with no deduction under any head plus the payment of Rs.50,000 on compassionate ground---Policy along with all auxiliary benefits thereafter would stand terminated.

Muhammad Younus for Appellant.

Fazal-ur-Rehman (Father of Appellant) and Dr. Rizwan (Brother of Appellant).

Barrister Tariq Saeed Rana for Respondent.

Date of hearing: 12th February, 2013.

2013 C L D 2173

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSRD)

AXIS GLOBAL LIMITED, BROKER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show-Cause Notice No.4(BRK-204)SMD/BR/06 dated 13th November, 2012, decided on 11th April, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6, 16 & 22---Central Depositories Act (XIX of 1997), Ss. 16, 24 & 28---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3 & 4---Mishandling of securities by the company and late payment of charges to its clients---Securities and Exchange Commission of Pakistan ordered an inspection of the books and record required to be maintained by the company---Inspection Team, after inspection, had disclosed that the company was mishandling the securities of its clients, and company was involved in imposing late payment charges to its clients---Major irregularities in calculation of Net Capital Balance (NCB), was also observed, and it appeared that NCB was not in accordance with the Third Schedule of Securities and Exchange Rules, 1971---In many instances, the company had moved/pledged the shares without proper authority of the sub-account holders and was imposing late charges in violation of S.16 of Securities and Exchange Ordinance, 1969---Violation of the Ordinance, Rules and Regulations was a serious matter---In view of the regulatory violations, the company was directed to deposit a sum of Rs.100,000 under S.22 of Securities and Exchange Ordinance, 1969 and a further sum of Rs.300,000 under S.28 of Central Depositories Act, 1997 to the Commission by way of penalty---Company was directed to ensure that the shares of the investors be transferred to the respective sub-accounts at the earliest---Company was further directed to ensure full compliance with Ordinance, Rules and Regulations and directives of the Commission, in future.

Raj Kumar, Chief Executive Officer and Hamid Nazir Kehar, Company Secretary Present at hearing.

Ms. Saima Shafi Rana, Deputy Director (MSRD) Representing SECP (SMD).

Date of hearing: 19th December, 2012.

2013 C L D 2207

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

SHAHEEN INSURANCE COMPANY LIMITED: In the matter of

Show-Cause Notice issued dated 6th July, 2012, decided on 17th December, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 11(1)(c), 36, 63(1) & 156---Securities and Exchange Commission (Insurance) Rules, 2002, R.13---Solvency position of the company had revealed that it was insolvent by an amount of Rs.49,328,754---Default under the relevant provisions of Insurance Ordinance, 2000 was established---Company's Legal Counsel had admitted such situation---Directors of the company, in addition to the day to day running of the company and the management of its business, also had some 'fiduciary' duties, i.e., duties held in trust and some wider duties imposed by statute; and breach of those statutory duties would usually be a criminal offence; punishable by fine or imprisonment---Directors were gauged against a higher standard of accountability, which required them to be vigilant and perform their duties with due care---Directors, in the present case, 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 requirement of Ss.11(1)(c) & 36 of the Insurance Ordinance, 2000, and were required to maintain adequate solvency so as to comply with the minimum/solvency/requirements on relevant date and even thereafter, which was grossly overlooked by the Directors---Company was required to act practically for the recovery of its outstanding balance---Legitimate inference could be that the default was committed knowingly and willingly, therefore default of Ss.11(1)(c) and 36 of the Insurance Ordinance, 2000, was established---Penalty as provided under Ss.63(1) and 156 of the Insurance Ordinance, 2000, could be imposed on the company---In exercise of powers conferred on the Commission under S.156 of the Insurance Ordinance, 2000, fine of Rs.300,000 on the company; and Rs.100,000 on each Director of the company, including the Chief Executive Officer, was imposed---Company and its Directors were directed to take immediate steps to meet the shortfall in their solvency requirements; and that the Annual Audit Accounts and Regulatory Returns for the relevant year, should evidence that the company had complied with the mandatory requirements of Ss.11(1)(c) & 36 of the Insurance Ordinance, 2000.

Messrs Surridge and Beecheno Advocates through Ali Thaheem Murtaza and Khurram Rashid attended.

Dates of hearing: 24th, 28th September and 16th November, 2012.

2013 C L D 2232

[Securities and Exchange Commission of Pakistan]

Before Imran Inayat Butt, Director/HOD (MSCID)

BMA CAPITAL MANAGEMENT LIMITED, TREC HOLDER/BROKER OF KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show-Cause Notice No. Misc/MSW/SMD/1(05) 2004/1621 dated 17th October, 2012, decided on 19th February, 2013.

(a) Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12, Third Schedule, Code of Conduct---Duty of Broker towards clients---Scope---Handling of conflict of interest---Method---Contravention of Code of Conduct in trade transactions---Company purchased 578,000 shares of its clients at the rate of Rs.920 in its proprietary account, and only after five days from purchase of said shares, sold the same at the rate of Rs.1000 to its associate company---Said transaction resulted in an appropriate profit of Rs.46 million to the company---Commission sought clarification from the company regarding said transactions which resulted in a significant gain to the company---Response of the company was found unsatisfactory---Company, though was a reputed institution and had large base of foreign clients, it was its obligation to work more professionally and prudently---Market intermediaries were required to treat their customers in a fair manner characterized by high standards of honesty and integrity---Primary duty of a broker/company was to act as an agent for parties who wished to buy or sell shares and not enter into transactions where conflict of interest would arise between the broker and its clients---Broker's responsibility was always to place the interest of the customer ahead of its interest---Broker's obligation and duty to the customer, must be paramount which was not only moral duty of broker, but law also put onus on the shareholders of the broker company to give preference to its clients when such situation would arise---Conflict of interest was a fundamental and pervasive issue in developed and emerging capital market, where transactions between the market participants were primarily assisted by market intermediaries---Market intermediaries in primary and secondary capital market had to balance their own interest and those of issuers and investors--- Situation creating a conflict of interest could occur between a broker and a client, and between different groups of clients---Former class of conflict would take place between the brokers' own economic interest and the interests of its clients---Best way to handle the conflict of interest, was to avoid situations which placed broker in positions where its duty to its clients was at odds with its personal interest---Broker/company, prima facie had contravened clauses A(1), A(2), A(5) & B(6) of Code of Conduct set forth under Third Schedule of Brokers and Agents Registration Rules, 2001, in circumstances.

(b) Securities and Exchange Ordinance (XVII of 1969)---

----S. 22---Brokers and Agents Registration Rules, 2001, Rr.8, 12, Third Schedule, Code of Conduct---Primary responsibility of broker---Scope---Trade transactions in contravention of Code of Conduct---Proprietary trading was not prohibited for the broker/company, but the law had set certain parameters and restrictions, which a broker had to follow for trading in its proprietary account in order to protect the interests of the clients---In the present case, the company, though had conducted trading from its proprietary account, but the pattern of trading by the company was very unusual and abnormal---Transactions under questions, were very peculiar in nature, since in a very short span of time huge profit was earned by the company---Last three years' proprietary trading history of the company, had shown that transactions of similar nature, were not undertaken by the company with any of its clients---Company failed to safeguard the interest of its clients by giving preference to its own interest over their interest---Primary responsibility of a broker, was to advise the clients and act on their behalf for the purchase and sale of shares; it was duty of the broker to fulfil its prime responsibility to execute those transactions at the best amicable market price in a transparent manner, in order to safeguard the interest of its clients---Broker company had failed to act with due skill, care and diligence in conduct of its business, and to protect the interests of its clients---Company was established to have contravened the provisions of the Code of Conduct prescribed in the Third Schedule of the Brokers and Agents Registration Rules, 2001---Violation of the Rules and Regulations was a serious matter, which entitled the Commission to even suspend company's registration, but the Commission in exercise of the powers under S.22 of Securities and Exchange Ordinance, 1969, imposed on the company a penalty of Rs.50,000,000 (Rupees Fifty Million only) with direction to the company that in future full compliance was made of all the rules, regulations and directives of the Commission.

Moazzam M. Malik, Chief Executive Officer and Bilal Shaukat, Legal Counsel representing BMA Capital Management Limited.

Muhammad Ali, Deputy Director assisting the Director (SMD).

Date of hearing: 12th November, 2012.

2013 C L D 2254

[Securities and Exchange Commission of Pakistan]

Before Hasnat Ahmad, Director (MSCID)

Messrs AZEE SECURITIES (PRIVATE) LIMITED, TREC HOLDER KARACHI STOCK EXCHANGE LIMITED: In the matter of

Show-Cause Notice No.4/BRK-62/SE/SMD/01 dated 14th November, 2012, decided on 15th February, 2013.

Securities and Exchange Ordinance (XVII of 1969)---

----Ss. 6(1), 16, 18 & 22---Stock Exchange Members (Inspection of Books and Record) Rules, 2001, Rr.3, 4 & 7---Securities and Exchange Rules, 1971, R.2(d) & Third Sched.---Violations of existing regulatory framework governing the brokerage business---Inspection team, after inspection of the Books and Record of the Broker/ company, had highlighted violations of the existing regulatory framework governing the brokerage business---Record showed that, if 'Net Capital Balance (NCB)' was calculated in strict compliance with the requirements of Securities and Exchange Rules, 1971, 'NCB' of the brokerage company would have been negative which implied that the company by submitting false 'NCB' had attained much higher trading exposure thereby increasing the systemic risk in the market, thus it stood established that 'NCB' as calculated by the company was not in accordance with the Third Schedule of Securities and Exchange Rules, 1971; that the company by submission of overstated 'NCB' had submitted a statement and given information, which it had reasonable cause to believe to be false or incorrect in material particulars in violation of S.18 of the Securities and Exchange Ordinance, 1969---Violation of Third Schedule of Securities and Exchange Rules, 1971; and S.16 of Securities and Exchange Ordinance, 1969, stood established which was a serious matter---Company was directed to pay by way of penalty a sum of Rs.100,000 (One Hundred Thousand only) on account of said violations---Company was further directed to make necessary arrangements for compliance with the regulatory framework, and submit a comprehensive report in that regard.

Ghazi Naseem, Authorized Representative of AZEE Securities (Private) Limited present.

Murtaza Abbas, Deputy Director (BR&ICW) representing (BR&ICW).

Date of hearing: 7th December, 2012.

2013 C L D 2274

[Securities and Exchange Commission of Pakistan]

Before Tariq Hussain, Director (Insurance)

CREDIT INSURANCE COMPANY LIMITED: In the matter of

Show-Cause Notice Issued dated 6th July, 2012, decided on 28th December, 2012.

Insurance Ordinance (XXXIX of 2000)---

----Ss. 46(1), 51(1) & 156---Failure to file Annual Audited Accounts and Regulatory Returns within time---Company was required to file its Annual Audited Accounts and Regulatory Returns for relevant year on or before stipulated date, but company had failed to do that even after maximum allowable extention of time thus committed default---Directors of the company, in addition to the day to day running of the company and the management of its business, also had some 'fiduciary' duties, i.e. duties held in trust; and some wider duties imposed by statute, and breach of those statutory duties would be a criminal offence, punishable by fine or imprisonment---Directors were gauged against a higher standard of accountability which required them to be vigilant; and perform their duties with due care---As default of Ss.46(1) & 51(1) of Insurance Ordinance, 2000 and Regulations had been established penalty as provided under S.156 of the Ordinance could be imposed on the company and its Directors---Commission, in exercise of its power conferred under S.156 of the Insurance Ordinance, 2000, instead of imposing the maximum penalty, imposed a fine of Rs.20,000 on the company---Company and its management were also warned and directed to take special care in filing the Annual Audited Accounts, Regulatory Returns and other statutory returns as required by law.

M. Ikhlaq Butt, Chief Executive Officer attended.

Date of hearing: 30th November, 2012.

2013 C L D 733

[Supreme Court of Pakistan]

Present: Tassaduq Hussain Jillani, ACJ and Nasir-ul-Mulk, J

Malik GUL MUHAMMAD AWAN---Petitioner

Versus

FEDERATION OF PAKISTAN through Secretary M/o Finance and others---Respondents

Civil Petition No. 777-K of 2011, decided on 26th December, 2012.

(On appeal from the High Court of Sindh, Karachi dated 24-6-2011 passed in H.C.As. Nos.98 and 128 of 2009).

(a) Tort---

----Suit for damages for mental agony and torture---Compensation, determination of---Plea for enhancement of damages, dismissal of---Plaintiff/petitioner closed down his business on account of financial losses and applied to the Sales Tax Department for de-registration of his business---Officials of the Department visited premises of plaintiff for verification purposes and allegedly maltreated him, demanded illegal gratification and kept him in confinement--- Material belonging to plaintiff was also allegedly confiscated by the Department---Plaintiff filed a civil suit against the Department for recovery of Rs.81.82 million as damages on account of mental agony and torture allegedly suffered by him---Single Judge of High Court decreed the suit and awarded damages of Rs. 100,000 to the plaintiff---Division Bench of High Court allowed appeal filed by plaintiff and increased the damages awarded to Rs. 10,00,000 with mark up at bank rate from the day of default till its realization---Plaintiff contended that Division Bench of High Court had not awarded damages commensurate with the humiliation, mental torture and agony suffered by him, and that he had certain documents to prove the extent of damages suffered by him, which documents could not be produced before the Single Judge or Division Bench of the High Court---Validity---Closure of business by plaintiff was not connected with the incident which led to the plaintiff's arrest and humiliation leading to filing of the suit and claim for damages--- Conduct of officials of the Department was untenable and there were concurrent findings that they had taken the law in their hands with motives that were not bona fide---Plaintiff claimed damages to the tune of Rs. 81.82 million but it had concurrently been found that he failed to substantiate the claim to the said extent by cogent evidence--- Documents available with the plaintiff to establish that amount of damages determined by the Division Bench of the High Court did not commensurate with the extent of shock and injury suffered by him, were never tendered in evidence during trial or appeal---Said documents were of no avail to the plaintiff at present stage---Plaintiff did not file any application for additional evidence at any stage---Concurrent findings of fact recorded by High Court were not against the record and the law declared---Petition was dismissed in circumstances---Constitution of Pakistan, Art. 185(3).

Sufi Muhammad Ishaque v. The Metropolitan Corporation, Lahore through Mayor PLD 1996 SC 737 rel.

(b) Damages---

----Award, of---Principle---Discretion---Scope---Awarding of damages was discretionary and said discretion had to be exercised in the light of the evidence led qua the extent of damages suffered by a party.

(c) Damages---

----Special damages, claim of--- Principles--- Person claiming special damages had to prove each item of loss with reference to the evidence brought on record.

(d) Damages---

----General damages, claim of--- Principles--- "Rule of Thumb" for awarding damages--- Scope--- General damages claimed for mental torture, agony, defamation and financial loss were to be assessed following the "Rule of Thumb" and said exercise fell in the discretionary jurisdiction of the court, which had to decide it in the facts and circumstances of each case.

Petitioner in person.

Nemo for Respondents Nos.1 and 2.

Nemo for Respondent No.3.

Nemo for other Respondents.

Date of hearing: 26th December, 2012.

2013 C L D 974

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, Sarmad Jalal Osmany and Gulzar Ahmed, JJ

AZAM WAZIR KHAN---Appellant

Versus

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

Civil Appeal No.17-K of 2011, decided on 27th February, 2013.

(Against the judgment dated 11-2-2011 passed by High Court of Sindh, Karachi in H.C.A. No.109 of 2004).

(a) State Bank of Pakistan Act (XXXIII of 1956)---

----S. 9A--- State Bank of Pakistan--- Purpose and functions---State Bank of Pakistan in its capacity as the premier regulatory authority of the Government of Pakistan in the financial sector acted as a watchdog over the Government in order to secure monetary stability and soundness of the financial system---Main function of State Bank of Pakistan was to ensure and secure stability of the financial system in the country and for such purpose it issued guidelines and advices from time to time in the shape of Banking Control Department (BCD) Circulars.

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

----S. 25---State Bank of Pakistan Act (XXXIII of 1956), Preamble--- Banking Control Department (BCD) Circulars issued by State Bank of Pakistan--- Binding effect--- Scope--- Such Circulars/ Instructions issued by State Bank of Pakistan were binding upon all concerned.

Hashwani Hotels Limited v. Federal of Pakistan and others PLD 1997 SC 315 ref.

(c) State Bank of Pakistan Act (XXXIII of 1956)---

----S. 9A---Banking Control Department (BCD) Circulars issued by State Bank of Pakistan--- Scope--- Such Circulars, which could be termed as delegated legislation/directives/orders, could not displace legislative instruments such as Acts of Parliament.

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

----S. 29---Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act (XV of 1997), S. 15 [since repealed]--- State Bank of Pakistan Act (XXXIII of 1956), S. 9A---Industrial Development Bank of Pakistan Ordinance (XXXI of 1961), S. 39---State Bank of Pakistan, BCD Circular No. 13 dated 20-6-1984---State Bank of Pakistan, BCD Circular No. 32 dated 26-11-1984---Interest-bearing loan---Compound interest, grant of---Power of State Bank of Pakistan in relation to recovery of interest-bearing loans---Scope---Claim of Bank (respondent) was allowed with simple interest---Bank filed appeal before High Court contending that as per agreement between parties compound interest was to be allowed--- High Court allowed compound interest to the Bank--- Contention that in view of BCD Circular No.13 dated 20-6-1984, and BCD Circular No.32 dated 26-11-1984, Bank could not charge compound interest on loans given by it after 1-1-1985, and that Bank had unlawfully amalgamated three loans into one and started charging compound interest---Validity---Powers and functions given to State Bank of Pakistan were entirely divorced from the laws enacted from time to time for recovery of outstanding loans by the Banks and other development financial institutions, hence it could not be said that after 1-1-1985 no loans previously given by any company/development financial institutions on the old interest bearing system could not be recovered as such---Section 15 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (since repealed) provided that both interest and mark-up could be recovered and the same was reflected in S.29 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Parties had voluntarily agreed to amalgamation of loans through the agreement, which provided for 12% compounded interest---Appeal was dismissed in circumstances.

Qamaruzaaman Khan v. Industrial Development Bank of Pakistan and others 2009 CLD 460 and Mushtaq Ahmed Vohra v. Crescent Investment Bank Limited 2005 CLD 444 distinguished.

Messrs Dadabhoy Cement Industries Ltd. and 6 others v. National Development Finance Corporation, Karachi PLD 2002 SC 500 ref.

Akhtar Husain, Advocate Supreme Court and K.A. Wahab, Advocate-on-Record for Appellant.

A.I. Chundrigar, Advocate Supreme Court and A.S.K. Ghori, Advocate-on-Record for Respondents.

Date of hearing: 27th February, 2013.

2013 C L D 1430

[Supreme Court of Pakistan]

Present: Mian Saqib Nisar and Iqbal Hameedur Rahman, JJ

QAISER ABBAS---Petitioner

Versus

MUSLIM COMMERCIAL BANK LTD. and others---Respondents

Civil Petition No.275-L of 2013, decided on 30th April, 2013.

(Against the order dated 7-2-2013 of the Lahore High Court, Multan Bench, Multan passed in F.A.O. No.13 of 2011.)

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

----S. 19--- Civil Procedure Code (V of 1908), O. XXI, Rr.66, 67(2) & 90---Constitution of Pakistan, Art. 185(3)---Execution of decree---Illegal auction---Wrong description of property---Non-compliance of proclamation of sale---Press publication---Judgment debtor assailed auction proceedings on the pleas that Court-Auctioneer without any authority, in the advertisement of auction, had fixed date different from the one fixed by court and illegally auctioned property on such date; that description of property was wrongly and incorrectly mentioned in the advertisement; that proper advertisement required under law was not made as property was situated in city "M", whereas advertisement/publication was made in inconspicuous newspapers published from cities "L" and "V"---All such factors were vital, which vitiated auction but such aspects had not been taken into account by the courts below---Leave to appeal was granted by Supreme Court to consider the contentions of judgment-debtor---Petition was allowed.

Qazi Misbah-ul-Hassan, Advocate Supreme Court and Mahmood A. Qureshi, Advocate-on-Record for Petitioner.

M. Irfan Waiyn, Advocate Supreme Court and Mrs. Tasneem Amin, Advocate-on-Record for Respondent No.2.

Date of hearing: 30th April, 2013.

2013 C L D 1581

[Supreme Court of Pakistan]

Present: Anwar Zaheer Jamali, Tariq Parvez and Ejaz Afzal Khan, JJ

Messrs LANVIN TRADERS, KARACHI---Petitioner

Versus

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

Civil Petition No.2324 of 2002, decided on 13th February, 2013.

(On appeal against the judgment dated 20-11-2002 passed by the High Court of Sindh at Karachi in Ist Appeal No.31 of 2002.)

Per Ejaz Afzal Khan, J.; Tariq Parvez, J. agreeing; Anwar Zaheer Jamali, J. dissenting [Majority view]

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

----O. XXI, R. 66---Execution of decree---Auction of judgment debtor's property---Proclamation of sale by public auction--- Proceedings under O. XXI, R. 66, C.P.C.---Scope---Order XXI, R. 66, C.P.C. provided an exhaustive procedure for the proclamation of sale by public auction---Order XXI, R. 66, C.P.C. provided as to how the proclamation of intended sale shall be caused to be made; how it shall be drawn up after notice to the decree holders and judgment debtors and how it would state the time and place of sale and specify as fairly and accurately as possible (a) the property to be sold, (b) the revenue assessed upon the estate or part of the estate, where the property to be sold was an interest in an estate or in part of an estate paying revenue to the Government, (c) any encumbrance to which the property was liable, (d) the amount for the recovery of which the sale was ordered, and (e) every other thing which the court considered material for a purchaser to know in order to judge the nature and value of property---In the absence of any of the said particulars, the purpose of sale could not be achieved---Failure to comply with provisions of O. XXI, R. 66, C.P.C. could not be defended under any canons of law and propriety, when it tended to damage the rights of the decree holders or those of judgment debtors, simply because a sale had been effected in favour of a third party---Although proceedings under O. XXI, R. 66, C.P.C. did not involve any judicial determination, but at the same time it could not be disputed that they laid a sure foundation for judicious and judicial determination of the rights and liabilities of the parties, therefore, a balance had to be struck to protect the rights and liabilities of the parties which could either be imperiled or even extinguished by not complying with the provisions of O.XXI, R. 66, C.P.C. [Majority view]

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, R. 66---Execution of decree passed by Banking Court---Sale of judgment debtor's property by way of public auction---Auction proceedings tainted with serious lapses causing prejudice to decree holder (i.e. the Bank) as well as judgment debtor---Non-mentioning of reserve price of auctioned property---Effect---Recovery suit filed by the Bank against the defendant was decreed by the Banking Court to the amount of Rs.1,67,02,105.84---Bank filed execution application for recovery of decretal amount by sale of mortgaged property in question under O.XXI, R.66, C.P.C.---Banking Court issued sale proclamation in consequence whereof property in question was ordered to be sold to person "M" being the highest bidder in the sum of Rs. 1,35,00,000---Objector/appellant, who was a stranger to the execution proceedings, filed an application under S. 151, C.P.C. wherein he offered an enhanced price of Rs. 1,55,00,000 for the property in question, however said application was dismissed by Banking Court---Subsequently objector and defendant/judgment debtor filed a joint application under S. 151, C.P.C. wherein price offer for property in question was increased from Rs. 1,55,00,000 to Rs.1,67,02,106 however said application was also dismissed on the basis that objector had failed to establish his right or title in respect of the property in question and also his locus standi to file the application(s) under S.151, C.P.C.---Appeal filed by objector against dismissal of his application by Banking Court was also dismissed by the High Court---Validity---In the present case, things were done in a casual and cursory manner without due application of mind---Questions as to when writ of attachment was issued; when it was received after being duly executed, if it was executed at all; what was the point in issuing writ of attachment again; how and when the terms of sale were settled; when and what the court considered material for the purchaser to know in order to judge the nature and value of the property, were questions which were not answered by the record---Absence of answers to said questions went to the root of the case and brought the whole proceedings under a thick cloud of doubt---Another question was as to what were the extraordinary circumstances which necessitated the passing of orders by Banking Court at the back of the parties, which illegality alone was sufficient to vitiate the whole proceedings ending in the auction of the property---Proceedings leading to sale of property in question were marred by serious lapses which caused serious prejudice to the decree holder (i.e. the Bank) as well as the judgment debtor (i.e. the defendant), who along with the objector offered a price for the property which was much greater than that given by the auction purchaser (i.e. person "M")---No reserve price was provided for the auction, and although the expression "reserve price" did not find mention in O.XXI, R. 66, C.P.C., but the words used in the said Rule pointedly hinted thereto--- Sale by auction, in absence of reserve price, was apt to giving a walkover to manoeuvers to fix any price of choice---Number of bidders for the auction were close to nil---Clever manoeuvering forcing way for disposal of a property in execution of a decree for a paltry sum had to be guarded against jealously with all care and circumspection so that such property might go for a sum it deserved---Impugned judgments of Banking Court and High Court were set aside , and case was sent back to Banking Court for proceedings de novo in accordance with law--- Petition for leave to appeal was converted into appeal and allowed accordingly. [Majority view]

Messrs Majid and Sons and another v. National Bank of Pakistan through Manager and another 2004 CLD 1616; Messrs Magi Chemical Industries v. Habib Bank 2003 CLD 571; Appu alias Subramania Patter v. O. Achuta Menon and others AIR 1926 Madras 755; Mir Wali Khan and another v. Manager, Agricultural Development Bank of Pakistan, Muzaffargarh and another PLD 2003 SC 500; Nanhelal and another v. Umrao Singh AIR 1931 Privy Council 33 and Hudaybia Textile Mills Ltd. and others v. Allied Bank of Pakistan Ltd. and others PLD 1987 SC 512 ref.

Per Anwar Zaheer Jamali, J; disagreeing with Ejaz Afzal Khan, J. [Minority view]

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

----S. 19(3)---Civil Procedure Code (V of 1908), O. XXI, R.66---Execution of decree passed by Banking Court---Power of financial institution to sell off mortgaged, pledged or hypothecated property without intervention of Banking Court---Scope---Section 19(3) of Financial Institutions (Recovery of Finances) Ordinance, 2001 provided that in the cases of mortgaged, pledged or hypothecated properties, the financial institutions had been empowered to sell or cause the same to be sold with or without intervention of the Banking Court, either by public auction or by inviting sealed tenders and appropriate the sale proceeds towards the total or partial satisfaction of their decree---Section 19(3) further laid down that the decree in favour of the financial institution, passed by the Banking Court in itself constituted and conferred sufficient powers and authority in its favour to sell or cause the sale of mortgaged, pledged or hypothecated property together with transfer of marketable title and that no further order of the Banking Court was required for such purpose---Financial institution was not required to wait for any further direction or order of Banking Court, but had the option of selling the mortgaged property on its own either by public auction or by inviting the sealed tenders---Procedure for auction of property contemplated under the Civil Procedure Code, 1908 had absolutely no material bearing in such regard. [Minority view]

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, R. 66---Execution of decree passed by Banking Court---Sale of judgment debtor's property by way of public auction---Fraud, manipulation, collusion, misrepresentation and mala fide in the auction process---Proof---Bona fide auction purchaser---Scope---Fraud, manipulation, collusion, misrepresentation, mala fide etc. on the part of Banking Court, financial institution or the auction purchaser, if proved, would be fatal to any purported solemn transaction of sale, either through public auction, through negotiation, inviting of tenders or by any other mode, but such situation would only arise when such fact was brought to the notice of the court by the aggrieved party at the earliest in accordance with law and was substantiated/proved to the satisfaction of the court---Conversely, any whimsical attribution to such effect would not prejudice the rights of the auction purchaser, as the principle 'Actus Curiae Neminem Gravabit" (an act of the Court shall prejudice no man), would be squarely attracted in his favour in line with the principle of protection of rights of a bona fide purchaser for valuable consideration. [Minority view]

(e) Administration of justice---

----Courts while proceeding with any lis, had to clear their mind from any predetermined notions and had to examine the case of the parties before it in a fair and equitable manner, giving due consideration to the case of all the litigating parties by placing it in juxtaposition and evaluating their respective claim in line with applicable law.

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, Rr. 66 & 89---Limitation Act (IX of 1908), First Sched., Art.116---Execution of decree passed by Banking Court---Sale of judgment debtor's property by way of public auction---Protection of rights of a bona fide purchaser of auctioned property---Scope---Recovery suit filed by the Bank against the defendant was decreed by the Banking Court to the amount of Rs.1,67,02,105.84---Bank filed execution application for recovery of decretal amount by sale of mortgaged property in question under O.XXI, R.66, C.P.C.---Banking Court issued sale proclamation in consequence whereof property in question was ordered to be sold to person "M" being the highest bidder in the sum of Rs. 1,35,00,000---Objector/appellant, who was a stranger to the execution proceedings, filed an application under S. 151, C.P.C. wherein he offered an enhanced price of Rs. 1,55,00,000 for the property in question, however said application was dismissed by Banking Court---Subsequently objector and defendant/judgment debtor filed a joint application under S. 151, C.P.C. wherein price offer for property in question was increased from Rs. 1,55,00,000 to Rs.1,67,02,106 however said application was also dismissed on the basis that objector had failed to establish his right or title in respect of the property in question and also his locus standi to file the application(s) under S.151, C.P.C.---Appeal filed by objector against order of Banking Court was also dismissed by the High Court---Validity---Objector, who was a stranger to the proceedings, moved his first application under S. 151, C.P.C., wherein he did not question the legitimacy of auction of mortgaged property in favour of highest bidder (i.e. person "M"), but only offered a higher bid of Rs.1,55,00,000---Said application was not only time-barred but also filed by a stranger and not the judgment debtor/defendant, and thus it was liable to be rejected outrightly on such ground alone---First application under S. 151, C.P.C. was dismissed by the Banking Court vide its order, which remained unchallenged and thus attained finality---Subsequently second application under S. 151, C.P.C., which was also time barred, was jointly filed by the judgment debtor/defendant and objector with a better offer of Rs.16,707,106 for sale of mortgaged property in favour of objector, who did not bother to participate in the open public auction---Said application also, did not attribute any mala fide, fraud or misrepresentation of any nature on part of either Nazir of the Court, who conducted the auction proceedings in favour of highest bidder (i.e. person "M") , or against the Bank whose representative fully watched such proceeds to ensure its transparency and to safeguard the interest of his Bank---Only grievance agitated in the second application was that the mortgaged property so sold through court auction, could have earned more (money) and for such reason, the court should accept their offer---Second application under S. 151, C.P.C. was similar to the first application and thus was also barred on the principle of constrictive res judicata as the first application was already dismissed by the executing/Banking Court, which order admittedly remained unchallenged--- Judgment debtor/defendant and objector did not even bother to file any application for condonation of delay in filing their applications under S. 151, C.P.C., despite being aware of the auction proceedings---Judgment debtor/defendant and objector were not at all objecting to the auction of mortgaged property in favour of person "M" in the sum of Rs.1,35,00,000 on any factual or legal ground having nexus to any irregularity or fraud; instead they simply wanted to buy back the mortgaged property at a higher price---Mere increased offer made by some stranger after more than one month and fifteen days to the fall of hammer during auction proceedings could not be accepted by the Executing Court as a valid ground for setting aside a valid sale through open auction with intervention of the court, unless the proceedings of auction were shown to be collusive, fraudulent or lacking transparency---Even some mutual understanding, consent or compromise between the decree holder and the judgment debtor or any third party would not affect the rights of the auction purchaser, which the court was bound to honour and protect in order to maintain the sanctity of such transaction---Under O. XXI, R. 66, C.P.C. it was not a mandatory requirement that each proclamation of sale must contain the "reserve price" of the mortgaged property under sale---Adherence to any technical procedure prescribed under the Civil Procedure Code, 1908 could not be enforced merely to defeat the process of sale of mortgaged property under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001---By virtue of O. XXI, R. 89, C.P.C. where the property was under-valued for the purpose of sale or sold at a lesser price than its market value or otherwise, the judgment debtor or any other person holding interest in the property could get rid of such sale and retrieve the property from the purchaser upon further payment of five per cent of the sale price to the purchaser, and payment of decretal sum to the decree holder, while in the present case neither the judgment debtor nor any other person came forward to avail such opportunity in time---However, later on the judgment debtor came forward after more than four months to offer more money than the auction sale price of Rs.1,35,00,000---All such facts reaffirmed that there was no irregularity or fraud what to speak of any other legal impediment, which could justify striking down a confirmed sale through court in favour of person "M"--- Petition for leave to appeal was dismissed accordingly and impugned order of High Court was maintained. [Minority view].

Hudaybia Textile Mills Ltd. v. A.B.P.L. PLD 1987 SC 512; Narsing Das v. Mangal Dubey [(1883) 5 All 163]; Saadatmand Khan v. Phul Kaur [ILR 20 All. 412 (P.C.)]; Md. Said Khan v. Md. Abdus Sami AIR 1932 All 664; Dwarka Dass v. Bhawani Prasad and others AIR 1960 Allahabad 510; Ghulam Abbas v. Zohra Bibi PLD 1972 SC 337; Asma Zafarul Hassan v. United Bank Ltd. 1981 SCMR 108; Rashad Ehsan v. Bashir Ahmad PLD 1989 SC 146; Muhammad Ikhlaq Memon v. Zakraia Ghani PLD 2005 SC 819 and Mumtaz ud Din Feroze v. Iftikhar Adil PLD 2009 SC 207 ref.

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

----O. XXI, R. 66---Sale of judgment debtor's property by way of public auction---"Reserve price" of mortgaged property under sale---Under O.XXI, R. 66, C.P.C. it was not a mandatory requirement that each proclamation of sale must contain the "reserve price" of the mortgaged property under sale. [Minority view]

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

----S. 19---Civil Procedure Code (V of 1908), O. XXI, R. 66---Execution of decree passed by Banking Court---Sale of mortgaged property by way of public auction---Applicability of Civil Procedure Code, 1908---Scope---Adherence to any technical procedure prescribed under the Civil Procedure Code, 1908 could not be enforced merely to defeat the process of sale of mortgaged property under S. 19 of Financial Institutions (Recovery of Finances) Ordinance, 2001---Section 19 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 gave vast discretion to the Executing/Banking Court as regards procedure to be followed by it, thus Banking Court could not be compelled to adhere to the provisions of the Civil Procedure Code, 1908 for issuing proclamation for sale of mortgaged property through public auction. [Minority view]

(i) Pleadings---

----Fraud, misrepresentation, collusion or mala fide--- Proof---Elementary principle of pleadings was that where allegations of fraud misrepresentation, collusion or mala fide were attributed, necessary particulars and details in such context were to be unfolded in the application/pleadings, and any bald or vague statement to such effect was of no legal consequence.

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

----O. XXI, R. 66---Execution of decree---Sale of judgment debtor's property by way of public auction---Property, nature of---Scope---Process of public auction in terms of O. XXI, R. 66, C.P.C. was not merely confined to the sale of immoveable properties, but it also included sale of any other property, which might not be an immovable property. [Minority view]

(k) Interpretation of statutes---

----Nothing could be added or read in a provision of law which was not provided therein by the legislature.

(l) Limitation---

----Delay in availing remedy---Condonation of delay---Scope---Invoking of remedy by some aggrieved party beyond the prescribed period of limitation created valuable legal rights in favour of the opposite party, therefore, in such cases delay of each day was to be explained by the defaulting party to the satisfaction of the court, which could not be condoned lightly or as of routine, as such arbitrary exercise of discretion would cause serious prejudice to the interest of the opposite party.

M. Afzal Siddiqui, Advocate Supreme Court for Petitioner.

A. I. Chundrigar, Advocate Supreme Court for Respondent No.2 (HBL).

Khalid Anwar, Advocate Supreme Court for Respondent No.4.

Nemo for Respondent No.3.

Date of hearing: 7th February, 2013 (Judgment Reserved).

2013 C L D 1687

[Supreme Court of Pakistan]

Present: Khilji Arif Hussain and Gulzar Ahmed, JJ

Messrs SYMPHONY (PVT.) LTD.---Petitioner

Versus

Haji FAZAL KARIM and others---Respondents

Civil Petition No.189-K of 2013, decided on 13th May, 2013.

(On appeal from the judgment 12-3-2013 passed by High Court of Sindh Karachi in C.P. S-108 of 2006.)

(a) Sindh Rented Premises Ordinance (XVII of 1979)---

----Ss. 18 & 15---Transfer of Property Act (IV of 1882), S.5---Constitution of Pakistan, Art. 185(3)---Eviction of tenant---Change of ownership---Default in payment of rent to new landlord---Present landlord claimed that he had purchased suit property from a company (former landlord) vide a conveyance deed dated 13-2-1997, whereafter he sent a notice to the tenant under S. 18 of Sindh Rented Premises Ordinance, 1979 requesting the tenant to pay the rent to him at the previous rate with effect from March 1997---Tenant contended that former landlord, which was a company, was officially dissolved on 4-12-1982, so how could the present landlord obtain conveyance deed from a dissolved company on 13-2-1997; that under S.5 of Transfer of Property Act, 1882 only a living person, which included a company, could transfer property, and since in the present case suit property was transferred through a conveyance deed after dissolution of former landlord company, the conveyance deed was a void document---Rent Controller decided in favour of the present landlord and directed the tenant to vacate and hand over possession of suit property---Order of Rent Controller was upheld by First Appellate Court and High Court---Validity---Courts below took into consideration all aspects of the matter including evidence on record, registered conveyance deed, release deed, transfer order of the concerned society, mutation letter and Form P.T.I., and rightly came to the conclusion that present landlord on the basis of registered conveyance deed requested the tenant to tender future rent to him---Title of present landlord had not been questioned by any of the shareholders of the dissolved company---Till date tenant neither tendered rent to the present landlord nor deposited the same in court---Tenant had committed default in payment of rent and was liable to be ejected---Concurrent findings of courts below did not suffer from any illegality or infirmity---Petition for leave to appeal was dismissed in circumstances.

Kassim and another v. S. Rahim Shah 1990 SCMR 647 rel.

(b) Constitution of Pakistan---

----Art. 185(3)--- Petition for leave to appeal, dismissal of---Concurrent findings of courts below not suffering from any illegality or infirmity---Effect---No interference would be called for by the Supreme Court in such circumstances while exercising jurisdiction under Art.185(3) of the Constitution.

Abdul Qadir Khan, Advocate Supreme Court for Petitioner.

Nemo for Respondents.

Date of hearing: 13th May, 2013.

2013 C L D 1787

[Supreme Court of Pakistan]

Before Nasir-ul-Mulk, Muhammad Ather Saeed and Iqbal Hameedur Rahman, JJ

ASGHAR ABBAS GARDEZI---Petitioner

Versus

SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN and others---Respondents

Civil Petition No.1757 of 2012, decided on 4th July, 2013.

(On appeal against the judgment dated 11-9-2012 of the Lahore High Court, Lahore passed in Intra Court Appeal No.290 of 2012.)

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

----S. 20(4)(j)---Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance (CIII of 2002), Ss. 29-B & 6---Constitution of Pakistan, Art. 199---Matter concerning substantial acquisition of shares---Constitutional jurisdiction of High Court to remand such matter to the Securities and Exchange Commission of Pakistan for its decision in accordance with law without deciding it itself---Scope---Consortium of different companies held 61.87% shares of a Bank---One of the companies from the consortium intended to acquire shares of another company belonging to the same consortium---Petitioner, who held 0.001% shares in the Bank wrote a letter to the Securities and Exchange Commission of Pakistan ("the Commission") seeking clarification as to whether the intended acquisition of shares in question attracted provisions of S. 6 of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002--- Commission replied vide its letter stating that said provision was not attracted to the acquisition of shares in question---Petitioner, aggrieved of Commission's reply, challenged the same before the High Court by way of a constitutional petition---Single Judge of the High Court set aside the reply-letter of the Commission, and directed that shares in question shall not be transacted or transferred pending fresh decision, and remanded the matter back to the Commission for decision by the competent authority on the objections raised by the petitioner---Intra-Court appeal filed by petitioner against order of Single Judge of the High Court was disposed of by the Division Bench upholding the order of remand to the Commission and it was held that the Commission was the primary regulatory body for the matter in question in view of Securities and Exchange Commission of Pakistan Act, 1997 and Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002---Plea of petitioner was that present matter had to be decided by the High Court itself and it could not be remanded to the Commission---Plea on behalf of consortium of companies was that High Court had rightly remanded the matter to the Commission as it was the regulatory authority for substantial acquisition of shares---Validity---Single Judge of the High Court had rightly set aside the impugned reply-letter of the Commission, therefore letter of petitioner seeking clarification was pending before the Commission, and High Court rightly remanded the matter to the Commission to dispose it of in accordance with law---Such direction of remand from the High Court did not fall in the category of cases which could not be remanded to the lower fora---Petitioner sought relief directly under Art. 199 of the Constitution and the High Court had inherent jurisdiction to dispose of writ petitions in any manner it deemed lawful---Division Bench of the High Court had very ably dealt with the questions before it and conclusions reached by it were unexceptionable---Petition for leave to appeal was dismissed accordingly and leave was refused.

Imtiaz Rashid Siddiqui, Advocate Supreme Court and Syed Hasnain Ibrahim Kazi, Advocate Supreme Court for Petitioner.

Abdul Hafeez Pirzada, Senior Advocate Supreme Court and Sikandar Bashir, Advocate Supreme Court for Respondents Nos.5 to 7.

Babar Bilal, Advocate Supreme Court for Respondent No.3.

Syed Ali Zafar, Advocate Supreme Court for Respondent No.4.

Date of hearing: 4th July, 2013.

2013 C L D 1815

[Supreme Court of Pakistan]

Present: Asif Saeed Khan Khosa, Ejaz Afzal Khan and Ijaz Ahmed Chaudhry, JJ

SURRIDGE AND BEECHENO---Appellant

Versus

M.T. EASTERN NAVIGATOR and others---Respondents

Civil Appeal No.1678 of 2008, decided on 4th June, 2013.

(On appeal against the order dated 21-4-2008 of the High Court of Sindh at Karachi in Admiralty Appeal No.3 of 2007.)

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

----S. 3---Solicitors Act, 1932, S. 69--- Salvage right---"Salvor" of a vessel---Scope---Law firm claiming right of salvage in connection with services rendered by it for a vessel---Law firm (appellant) were engaged by a company for pleading an admiralty suit in connection with a vessel which had been arrested for recovery of some outstanding amount---Plea of law firm that services rendered by it not only salvaged the vessel but also preserved the interest of their client-company, therefore, it was entitled to a charge thereon; that law firm had a salvage right which could be enforced under S. 3 of Admiralty Jurisdiction of High Courts Ordinance, 1980; that S. 69 of Solicitors Act, 1932 also recognized the enforceability of such right in the Admiralty jurisdiction of High Court---Validity---Record showed that vessel in question stood arrested before the law firm stepped into the arena---Vessel was no more in a state of danger when the law firm, instituted a suit on behalf of its client-company---Law firm in such context could not be treated as a salvor nor could it be said to have recovered or preserved something in a time of danger, by its labour or work---Even if the law firm preserved and protected interest of client-company, it was at a later stage, which did not make it a salvor by any attribute so as to entitle it to a charge in the nature of salvage right---Solicitors Act, 1932, was not in force in the country, and even it was, it would not entitle the law firm to a salvage right since at no stage of the proceedings, the court trying the lis declared that the services rendered by the law firm proved instrumental in recovering or preserving the property---In the absence of such declaration, which was sine qua non in terms of S. 69 of the Solicitors Act, 1932 for the enforcement of such right, the law firm could not on its own don the attire of a salvor and ask for the enforcement of such right---Appeal was dismissed accordingly.

Kuttikrishna Memon v. Cochin Mercantiles Ltd. (1962) (32) Company Cases 378 and Greer v. Young (1883) 24 Chapter D. 545 distinguished.

M. Shaiq Usmani, Advocate Supreme Court for Appellant.

Nemo for Respondents Nos.1 and 4.

Nemo for Respondent No.2.

Qamar-ul-Islam Abbas, Advocate Supreme Court for Respondent No.3.

Date of hearing: 4th June, 2013.